Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document Information [Line Items] | ' |
Document Type | 'S-1 |
Amendment Flag | 'false |
Document Period End Date | 31-Dec-13 |
Entity Registrant Name | 'ALLIANZ LIFE INSURANCE CO OF NORTH AMERICA |
Entity Central Index Key | '0000072499 |
Entity Filer Category | 'Non-accelerated Filer |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fixed-maturity securities: | ' | ' |
Available-for-sale, at fair value (amortized cost of $62,706,408 and $59,652,036, respectively) | $66,403,722 | $68,178,162 |
Held to maturity, at amortized cost (fair value of $219,516 and $486,715, respectively) | 220,752 | 475,074 |
Mortgage loans on real estate (net of valuation allowances of $66,750 and $85,250, respectively) | 6,134,525 | 6,045,334 |
Short-term securities | 7,547 | 5,502 |
Derivatives | 831,707 | 490,149 |
Loans to affiliates | 1,191,170 | 28,725 |
Policy loans | 158,217 | 163,768 |
Acquired loans | 205,131 | 216,062 |
Equity securities: | ' | ' |
Available-for-sale (cost of $29,112 and $0, respectively) | 29,112 | ' |
Trading (cost of $209,978 and $28,523, respectively) | 227,822 | 31,837 |
Other invested assets | 50,046 | 23,262 |
Total investments | 75,459,751 | 75,657,875 |
Cash and cash equivalents | 2,944,394 | 2,080,173 |
Accrued investment income | 831,904 | 768,277 |
Receivables (net of allowance for uncollectible accounts of $6,254 and $6,938, respectively) | 142,028 | 158,588 |
Reinsurance recoverables and receivables | 4,105,078 | 4,079,593 |
Deferred acquisition costs | 4,820,215 | 2,603,307 |
Other assets | 2,073,826 | 1,651,474 |
Assets, exclusive of separate account assets | 90,377,196 | 86,999,287 |
Separate account assets | 30,747,777 | 25,670,675 |
Total assets | 121,124,973 | 112,669,962 |
Policyholder liabilities: | ' | ' |
Account balances and future policy benefit reserves | 78,125,212 | 75,210,540 |
Policy and contract claims | 416,109 | 358,732 |
Unearned premiums | 135,639 | 88,883 |
Other policyholder funds | 272,209 | 186,607 |
Total policyholder liabilities | 78,949,169 | 75,844,762 |
Derivative liability | 1,391,989 | 279,825 |
Mortgage notes payable | 99,210 | 105,858 |
Other liabilities | 2,840,304 | 2,333,383 |
Liabilities, exclusive of separate account liabilities | 83,280,672 | 78,563,828 |
Separate account liabilities | 30,747,777 | 25,670,675 |
Total liabilities | 114,028,449 | 104,234,503 |
Stockholder's equity: | ' | ' |
Common stock, $1 par value. Authorized, 40,000,000 shares; issued and outstanding, 20,000,001 shares at December 31, 2013 and 2012 | 20,000 | 20,000 |
Additional paid-in capital | 4,053,371 | 4,053,371 |
Retained earnings | 2,001,466 | 2,110,280 |
Accumulated other comprehensive income, net of tax | 1,002,784 | 2,232,905 |
Total stockholder's equity | 7,096,524 | 8,435,459 |
Total liabilities and stockholder's equity | 121,124,973 | 112,669,962 |
Class A, Series A preferred stock | ' | ' |
Stockholder's equity: | ' | ' |
Preferred stock, value | 8,909 | 8,909 |
Class A, Series B preferred stock | ' | ' |
Stockholder's equity: | ' | ' |
Preferred stock, value | $9,994 | $9,994 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Amortized cost of fixed-maturity securities available-for-sale | $62,706,408 | $59,652,036 |
Held to maturity, fair value | 219,516 | 486,715 |
Mortgage loans, valuation allowances | 66,750 | 85,250 |
Available-for-sale equity, at cost | 29,112 | 0 |
Trading securities, at cost | 209,978 | 28,523 |
Receivables, allowance for uncollectible | 6,254 | 6,938 |
Common stock, par value | $1 | $1 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 20,000,001 | 20,000,001 |
Common stock, shares outstanding | 20,000,001 | 20,000,001 |
Class A, Series A preferred stock | ' | ' |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 8,909,195 | 8,909,195 |
Preferred stock, shares issued | 8,909,195 | 8,909,195 |
Preferred stock, shares outstanding | 8,909,195 | 8,909,195 |
Preferred stock, liquidation preference | 2,340 | 150,082 |
Class A, Series B preferred stock | ' | ' |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 9,994,289 | 9,994,289 |
Preferred stock, shares outstanding | 9,994,289 | 9,994,289 |
Preferred stock, liquidation preference | $2,625 | $149,509 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue: | ' | ' | ' |
Premiums | $235,783 | $240,604 | $254,501 |
Policy fees | 1,172,357 | 932,737 | 803,684 |
Premiums and policy fees, ceded | -119,767 | -124,184 | -131,990 |
Net premiums and policy fees | 1,288,373 | 1,049,157 | 926,195 |
Interest and similar income, net | 3,592,117 | 3,632,406 | 3,520,016 |
Change in fair value of assets and liabilities | 921,265 | -157,279 | -205,567 |
Realized investment gains, net | 188,297 | 227,701 | 113,393 |
Fee and commission revenue | 261,926 | 212,458 | 210,687 |
Other revenue | 44,853 | 28,248 | 11,498 |
Total revenue | 6,296,831 | 4,992,691 | 4,576,222 |
Benefits and expenses: | ' | ' | ' |
Policyholder benefits | 834,552 | 973,757 | 707,552 |
Change in fair value of annuity embedded derivatives | 1,598,061 | 1,140,185 | 1,984,638 |
Benefit recoveries | -268,067 | -286,714 | -342,544 |
Net interest credited to account values | 1,539,473 | 1,062,975 | 1,375,146 |
Net benefits and expenses | 3,704,019 | 2,890,203 | 3,724,792 |
Commissions and other agent compensation | 978,316 | 859,823 | 963,909 |
General and administrative expenses | 663,319 | 645,656 | 629,654 |
Change in deferred acquisition costs, net | 206,699 | 684,350 | -735,151 |
Total benefits and expenses | 5,552,353 | 5,080,032 | 4,583,204 |
Income (loss) from operations before income taxes | 744,478 | -87,341 | -6,982 |
Income tax expense (benefit): | ' | ' | ' |
Current | 42,854 | 280,018 | -63,316 |
Deferred | 160,438 | -324,977 | 5,441 |
Income tax expense (benefit) as reported | 203,292 | -44,959 | -57,875 |
Net income (loss) | 541,186 | -42,382 | 50,893 |
Realized investment (losses), net: | ' | ' | ' |
Total other-than-temporary impairment losses on securities | -15,048 | -28,768 | -21,487 |
Portion of loss recognized in other comprehensive income | ' | ' | ' |
Net impairment losses recognized in realized investment gains, net | -15,048 | -28,768 | -21,487 |
Other net realized gains | 203,345 | 256,469 | 134,880 |
Realized investment gains, net | $188,297 | $227,701 | $113,393 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income (loss) | $541,186 | ($42,382) | $50,893 |
Foreign currency translation adjustments, net of tax | -1,650 | 604 | -541 |
Unrealized gains (losses) on postretirement obligation, net of tax | 167 | -226 | 12 |
Unrealized (losses) gains on fixed-maturity and equity securities, net of tax | -1,228,638 | 340,573 | 926,215 |
Total other comprehensive (loss) income | -1,230,121 | 340,951 | 925,686 |
Total comprehensive (loss) income | ($688,935) | $298,569 | $976,579 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholder's Equity (USD $) | Total | Preferred stock | Common stock | Loan to parent company | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income |
In Thousands, unless otherwise specified | |||||||
Beginning balance at Dec. 31, 2010 | $7,251,372 | $18,903 | $20,000 | ($108,939) | $4,053,371 | $2,301,769 | $966,268 |
Comprehensive income: | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 50,893 | ' | ' | ' | ' | 50,893 | ' |
Net unrealized gain (loss) on investments, net of shadow adjustments and deferred taxes | 926,215 | ' | ' | ' | ' | ' | 926,215 |
Net unrealized gain (loss) on postretirement obligation, net of deferred taxes | 12 | ' | ' | ' | ' | ' | 12 |
Foreign currency translation adjustment, net of deferred taxes | -541 | ' | ' | ' | ' | ' | -541 |
Total comprehensive (loss) income | 976,579 | ' | ' | ' | ' | ' | ' |
Dividend | ' | ' | ' | 50,000 | ' | -50,000 | ' |
Payment received on loan | 53,976 | ' | ' | 53,976 | ' | ' | ' |
Ending balance at Dec. 31, 2011 | 8,281,927 | 18,903 | 20,000 | -4,963 | 4,053,371 | 2,302,662 | 1,891,954 |
Comprehensive income: | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | -42,382 | ' | ' | ' | ' | -42,382 | ' |
Net unrealized gain (loss) on investments, net of shadow adjustments and deferred taxes | 340,573 | ' | ' | ' | ' | ' | 340,573 |
Net unrealized gain (loss) on postretirement obligation, net of deferred taxes | -226 | ' | ' | ' | ' | ' | -226 |
Foreign currency translation adjustment, net of deferred taxes | 604 | ' | ' | ' | ' | ' | 604 |
Total comprehensive (loss) income | 298,569 | ' | ' | ' | ' | ' | ' |
Dividend | -150,000 | ' | ' | ' | ' | -150,000 | ' |
Payment received on loan | 4,963 | ' | ' | 4,963 | ' | ' | ' |
Ending balance at Dec. 31, 2012 | 8,435,459 | 18,903 | 20,000 | ' | 4,053,371 | 2,110,280 | 2,232,905 |
Comprehensive income: | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 541,186 | ' | ' | ' | ' | 541,186 | ' |
Net unrealized gain (loss) on investments, net of shadow adjustments and deferred taxes | -1,228,638 | ' | ' | ' | ' | ' | -1,228,638 |
Net unrealized gain (loss) on postretirement obligation, net of deferred taxes | 167 | ' | ' | ' | ' | ' | 167 |
Foreign currency translation adjustment, net of deferred taxes | -1,650 | ' | ' | ' | ' | ' | -1,650 |
Total comprehensive (loss) income | -688,935 | ' | ' | ' | ' | ' | ' |
Dividend | -650,000 | ' | ' | ' | ' | -650,000 | ' |
Ending balance at Dec. 31, 2013 | $7,096,524 | $18,903 | $20,000 | ' | $4,053,371 | $2,001,466 | $1,002,784 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows provided by operating activities: | ' | ' | ' |
Net income (loss) | $541,186 | ($42,382) | $50,893 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Realized investment gains | -199,546 | -229,909 | -112,150 |
Purchases of trading securities | -226,555 | -13,174 | -4,806 |
Sale and other redemptions of trading securities | 49,856 | 17,179 | 130,077 |
Change in annuity-related options, derivatives, and gross reserves | 3,573,672 | 1,358,018 | 398,135 |
Deferred income tax (benefit) expense | 160,438 | -324,977 | 5,441 |
Charges to policy account balances | -136,807 | -120,090 | -103,906 |
Gross interest credited to account balances | 1,731,843 | 1,430,161 | 1,727,538 |
Amortization of discount, net | -10,259 | -56,380 | -20,739 |
Change in: | ' | ' | ' |
Accrued investment income | -63,627 | -15,178 | -62,190 |
Receivables | 16,560 | -88,379 | 71,186 |
Reinsurance recoverables and receivables | -25,485 | -25,443 | -72,657 |
Deferred acquisition costs | 206,699 | 684,350 | -735,151 |
Future policy benefit reserves | -764,875 | 112,768 | 1,444,265 |
Policy and contract claims | 57,377 | 64,723 | 41,010 |
Other policyholder funds | 85,602 | -5,413 | -44,466 |
Unearned premiums | 9,639 | -5,730 | -75 |
Other assets and liabilities | 105,279 | -34,519 | -1,299,919 |
Other, net | -3,109 | 80 | -588 |
Total adjustments | 4,566,702 | 2,748,087 | 1,361,005 |
Net cash provided by operating activities | 5,107,888 | 2,705,705 | 1,411,898 |
Cash flows used in investing activities: | ' | ' | ' |
Purchase of available-for-sale fixed-maturity securities | -9,190,492 | -7,832,093 | -10,131,213 |
Purchase of available-for-sale equity securities | -163,512 | -337,225 | -68 |
Purchase of real estate | ' | -228 | -4,350 |
Funding of mortgage loans on real estate | -559,154 | -592,716 | -955,786 |
Sale and other redemptions of fixed-maturity securities | 5,831,084 | 7,087,767 | 5,765,352 |
Matured fixed-maturity securities | 724,008 | 472,067 | 464,602 |
Sale of available-for-sale equity securities | 134,400 | 348,635 | 4,884 |
Sale of derivative securities | 85,471 | 318,150 | 635,174 |
Sale of real estate | 15,471 | ' | 316,183 |
Net change in securities lending | 970,364 | -688,770 | 1,531,308 |
Repayment/disposal of mortgage loans on real estate | 493,391 | 463,591 | 319,904 |
Net change in short-term securities | -2,045 | 350 | 72,185 |
Purchase of home office property and equipment | -2,831 | -4,016 | -2,737 |
Purchase of interest in equity method investees | -1,478 | -1,219 | -1,754 |
Change in loan to affiliate | -1,162,445 | 27,293 | 25,932 |
Options purchased, net | -217,382 | -431,167 | -404,109 |
Other, net | 236 | -6,838 | 4,023 |
Net cash used in investing activities | -3,044,914 | -1,176,419 | -2,360,470 |
Cash flows (used in) provided by financing activities: | ' | ' | ' |
Policyholders' deposits to account balances | 7,014,576 | 5,817,341 | 6,812,260 |
Policyholders' withdrawals from account balances | -6,438,692 | -6,826,518 | -5,644,985 |
Policyholders' net transfers between account balances | -1,094,927 | -1,495,577 | 293,032 |
Change in amounts drawn in excess of bank balances | -23,062 | 42,887 | 24,762 |
Dividend paid to parent company | -650,000 | -150,000 | ' |
Payment received on loan to parent company | ' | 4,963 | 53,976 |
Repayment of mortgage notes payable | -6,648 | -6,293 | -5,955 |
Net cash (used in) provided by financing activities | -1,198,753 | -2,613,197 | 1,533,090 |
Net change in cash and cash equivalents | 864,221 | -1,083,911 | 584,518 |
Cash and cash equivalents at beginning of year | 2,080,173 | 3,164,084 | 2,579,566 |
Cash and cash equivalents at end of year | $2,944,394 | $2,080,173 | $3,164,084 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2013 | |
Organization | ' |
(1) Organization | |
Allianz Life Insurance Company of North America is a wholly owned subsidiary of Allianz of America, Inc. (AZOA or parent company), which is a wholly owned subsidiary of Allianz Europe, B.V., Allianz Europe, B.V. is a wholly owned subsidiary of Allianz Societas Europaea (Allianz SE), the Company’s ultimate parent, which is incorporated in Munich, Germany. Allianz Life Insurance Company of North America and its wholly owned subsidiaries are referred to as the Company. | |
The Company is a life insurance company licensed to sell annuity, group and individual life, and group accident and health policies in the United States, Canada, and several U.S. territories. Based on 2013 statutory net premium written, 95%, 4%, and 1% of the Company’s business is annuity, life insurance, and accident and health, respectively. The annuity business comprises fixed-indexed, variable, and fixed interest annuities representing 66%, 33%, and 1% of 2013 statutory annuity net premium written, respectively. Life business comprises both traditional and group life. Life business includes products with guaranteed premiums and benefits and consists principally of universal life policies, fixed index universal life policies, term insurance policies, limited payment contracts, and certain annuity products with life contingencies. Accident and health business primarily comprises closed blocks of long-term care (LTC) insurance. The Company’s primary distribution channels are through independent agents, broker-dealers, banks, and third-party marketing organizations. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary of Significant Accounting Policies | ' | ||||||||
(2) Summary of Significant Accounting Policies | |||||||||
(a) Basis of Presentation | |||||||||
The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities. The accounts of the Company’s primary subsidiary, Allianz Life Insurance Company of New York, and all other subsidiaries have been consolidated. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||
(b) Use of Estimates | |||||||||
The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital markets, and asset valuations could cause actual results to differ from the estimates used in the Consolidated Financial Statements. Such changes in estimates are recorded in the period they are determined. | |||||||||
(c) Investment Products and Universal Life Business | |||||||||
Investment products consist primarily of fixed, variable, and deferred annuity products. Premium receipts are reported as deposits to the contractholders’ accounts. Policy fees on the Consolidated Statements of Operations represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products and universal life insurance. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Amounts assessed that represent compensation to the Company for services to be provided in future periods are not earned in the period assessed. Such amounts are reported as unearned premiums, which include unearned revenue reserves (URR), and are recognized in operations over the period benefited using the same assumptions and factors used to amortize capitalized acquisition costs. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Derivatives embedded in fixed-indexed, variable, and certain life products are recorded at fair value and changes in value are included in change in reserves at fair value on the Consolidated Statements of Operations. Benefits consist of interest credited to contractholders’ accounts and claims incurred in excess of the contractholders’ account balance and are included in net interest credited to account values and policyholder benefits, respectively, on the Consolidated Statements of Operations. | |||||||||
During 2013, the Company began offering a variable annuity product that combines a separate account option with a general account option that is similar to a fixed-indexed annuity. The Company has elected the fair value option to account for the entire insurance contract liability and the mutual fund assets backing the separate account. The insurance contracts’ reserves are reported in account balances and future policy benefit reserves and the mutual fund assets backing the separate account are reported in equity securities, trading on the Consolidated Balance Sheets. Electing the fair value option for an insurance contract liability requires that the Company account for that liability as a financial instrument and also requires that acquisition costs be recognized immediately in expense. | |||||||||
(d) Life and Accident and Health Insurance | |||||||||
Premiums on traditional life products are recognized as earned when due. Benefits and expenses are associated with earned premiums so as to result in recognition of profits over the life of the contracts. This association is accomplished by establishing provisions for future policy benefits and deferral and amortization of related acquisition costs. | |||||||||
Accident and health premiums are recognized as earned on a pro rata basis over the risk coverage periods. Benefits and expenses are recognized as incurred. | |||||||||
(e) Goodwill | |||||||||
Goodwill is the excess of the amount paid to acquire a company over the fair value of its tangible net assets, value of business acquired (VOBA), other identifiable intangible assets, and valuation adjustments (such as impairments), if any. Goodwill is reported in other assets on the Consolidated Balance Sheets. | |||||||||
Goodwill is evaluated annually for impairment at the reporting unit level, which is one level below an operating segment. Goodwill of a reporting unit is also tested for impairment on an interim basis if a triggering event occurs, such as a significant adverse change in the business climate or a decision to sell or dispose of a business unit. | |||||||||
(f) Value of Business Acquired and Other Intangible Assets | |||||||||
The value of insurance in-force purchased is recorded as the VOBA and is reported in other assets on the Consolidated Balance Sheets. The initial value was determined by an actuarial study using the present value of future profits in calculating the value of the insurance purchased. An accrual of interest is added to the unamortized balance using the rates credited to the policyholder accounts. The balance is amortized in relation to the present value of expected future gross profits in the same manner as DAC. The amortization period is expected to be approximately 20 years from the date the business was acquired; however, the Company continually monitors this assumption. If estimated gross profits differ from expectations, the amortization of VOBA is adjusted on a retrospective or prospective basis, as appropriate. | |||||||||
Adjustments to VOBA are made to reflect the estimated corresponding impact on the present value of expected future gross profits from unrealized gains and losses on available-for-sale investments used to support policyholder liabilities (commonly known as shadow VOBA). These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. | |||||||||
The recoverability of VOBA is evaluated annually, or earlier if factors warrant, based on estimates of future earnings related to the insurance in-force purchased. If the existing insurance liabilities, together with the present value of future net cash flows from the blocks of business acquired, are not sufficient to recover VOBA, the difference, if any, is charged to expense through general and administrative expenses within the Consolidated Statements of Operations. | |||||||||
Intangible assets are identified by the Company in accordance with the Intangibles – Goodwill and Other Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification), which requires an identifiable intangible asset to be recognized apart from goodwill when it arises from contractual or legal rights or it is capable of being separated and valued when sold, transferred, licensed, rented, or exchanged. The Company determines the useful life and amortization period for each intangible asset identified at acquisition, and continually monitors these assumptions. An intangible asset with a determinable life is amortized over that period, while an intangible asset with an indefinite useful life is not amortized. | |||||||||
The Company’s intangible assets include trademarks, agent lists, and noncompete agreements that were acquired as a result of the Company’s ownership in field marketing organizations, and are reported in other assets on the Consolidated Balance Sheets. These intangible assets were assigned values using the present value of projected future cash flows and are generally amortized over five years using the straight-line method. Also included in the Company’s intangible assets are the trade name and service mark of a broker-dealer acquired during 2005, and state insurance licenses acquired in 2007. | |||||||||
Recoverability of the value of the amortizing intangible assets is assessed whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of the value of the nonamortizing intangible assets is assessed annually or earlier if events or changes in circumstances indicate the carrying amount may not be recoverable. | |||||||||
(g) Deferred Acquisition Costs | |||||||||
Acquisition costs consist of commissions and other incremental costs that are directly related to the successful acquisition of insurance contracts. Acquisition costs are deferred to the extent recoverable from future policy revenues and gross profits. However, acquisition costs associated with insurance contracts recorded under the fair value option are not deferred as guidance related to the fair value option requires that transaction costs are recorded immediately as an expense. For interest-sensitive products and variable annuity contracts, acquisition costs are amortized in relation to the present value of expected future gross profits from investment margins and mortality, morbidity, and expense charges. Acquisition costs for accident and health insurance policies are deferred and amortized over the lives of the policies in the same manner as premiums are earned. For traditional life and group life products, such costs are amortized over the projected earnings pattern of the related policies using the same actuarial assumptions used in computing future policy benefit reserves. DAC is reviewed for recoverability, at least annually, and adjusted when necessary. Recoverability is evaluated separately for fixed annuities, variable annuities, and life insurance products. Evaluating recoverability is a two-step process where current policy year issues are evaluated, and then in-force policies are evaluated. Before assessing recoverability, DAC is capped, if necessary, such that the balance cannot exceed the original capitalized costs plus interest. | |||||||||
Adjustments to DAC are made to reflect the corresponding impact on the present value of expected future gross profits from unrealized gains and losses on available-for-sale investments used to support policyholder liabilities (commonly known as shadow DAC). These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. | |||||||||
Changes in assumptions can have an impact on the amount of DAC reported for annuity and life insurance products and their related amortization patterns. In the event experience differs from assumptions or assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense, which is referred to as DAC unlocking. In general, increases in the estimated investment spreads and fees result in increased expected future profitability and may lower the rate of DAC amortization, while increases in costs of product guarantees, and lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization. | |||||||||
The Company formally evaluates the appropriateness of the best-estimate assumptions on an annual basis. If the economic environment or policyholder behavior changes quickly and substantially, assumptions will be reviewed more frequently to affirm best estimates. Any resulting DAC unlocking is reflected prospectively in change in DAC, net on the Consolidated Statements of Operations. | |||||||||
Adjustments may also be made to the estimated gross profits related to DAC that correspond to deferred annuities and universal life products for investment activity, such as write-downs on other-than-temporarily impaired fixed-maturity securities, and realized gains and losses. Management action may include assumption changes in the DAC models, such as adjustments to expected future gross profits used, as well as in-force management action such as crediting rate changes or index rate cap adjustments. This approach applies to fixed-maturity securities purchased at investment grade only and not noninvestment-grade items that were purchased with other yield considerations. See further discussion of DAC unlocking in note 10. | |||||||||
The Company assesses internal replacements on insurance contracts to determine whether such modifications significantly change the contract terms. An internal replacement represents a modification in product benefits, features, rights, or coverages that occurs by the exchange of an in-force insurance contract for a new insurance contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. If the modification substantially changes the contract, the remaining DAC on the original contract is immediately expensed and any new DAC on the replacement contract is deferred. If the contract modification does not substantially change the contract, DAC amortization on the original contract continues and any new acquisition costs associated with the modification are immediately expensed. | |||||||||
(h) Deferred Sales Inducements | |||||||||
Sales inducements are product features that enhance the investment yield to the contractholder on the contract. The Company offers two types of sales inducements on certain universal life and annuity contracts. The first type, an immediate bonus, increases the account value at inception, and the second type, a persistency bonus, increases the account value at the end of a specified period. | |||||||||
Annuity sales inducements are deferred when credited to contractholders and life sales inducements are deferred and recognized as part of the liability for policy benefits. Deferred sales inducements DSI are reported in other assets in the Consolidated Balance Sheets. They are amortized over the expected life of the contract in a manner similar to DAC and are reviewed annually for recoverability. DSI capitalization and amortization are recorded in policyholder benefits on the Consolidated Statements of Operations. | |||||||||
Adjustments to DSI are made to reflect the estimated corresponding impact on the present value of expected future gross profits from unrealized gains and losses on available-for-sale investments used to support policyholder liabilities, commonly known as shadow DSI. These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. | |||||||||
Adjustments may also be made to DSI related to deferred annuities for investment activity, such as write-downs on other-than-temporarily impaired fixed-maturity securities, and realized gains and losses. Management action may include assumption changes in the DSI models, such as adjustments to expected future gross profits used, as well as policyholder changes, such as credited rate changes. This approach applies to fixed-maturity securities purchased at investment grade only and not noninvestment grade items that were purchased with other yield considerations. | |||||||||
(i) Account Balances and Future Policy Benefit Reserves | |||||||||
Policy and contract account balances for interest-sensitive products, which include universal life and fixed deferred annuities, are generally carried at accumulated contract values. For fixed-indexed annuity products, the policyholder obligation is divided into two parts – one part representing the value of the underlying base contract (host contract) and the second part representing the fair value of the expected index benefit over the life of the contract. The host contract is valued using principles consistent with similar deferred annuity contracts without an index benefit. The index benefit is valued at fair value using current capital market assumptions, such as index and volatility, to estimate future index levels. The index benefit valuation is also dependent upon estimates of future policyholder behavior. The Company must include provisions for the Company’s own credit risk and for risk that the Company’s assumptions about policyholder activity could differ from actual experience. The fair value determination of the index benefit is sensitive to the economic market and interest rate environment, as it is discounted at current market interest rates. There is volatility in this liability due to these external market sensitivities. | |||||||||
Certain two-tier fixed annuity products provide additional benefits payable upon annuitization for period-certain and life-contingent payout options. An additional annuitization reserve is accrued using assumptions consistent with those used in estimating gross profits for purposes of amortizing DAC. | |||||||||
Policy and contract account balances for variable annuity products are carried at accumulated contract values. Future policy benefit reserves for any death and income benefits that may exceed the accumulated contract values are established using a range of economic scenarios and are accrued for using assumptions consistent with those used in estimating gross profits for purposes of amortizing DAC. Future policy benefit reserves for accumulation and withdrawal benefits that may exceed account values are established using capital market assumptions, such as index and volatility, along with estimates of future policyholder behavior. | |||||||||
Future policy benefit reserves on traditional life products are computed by the net level premium method based upon estimated future investment yield, mortality and withdrawal assumptions, commensurate with the Company’s experience, modified as necessary to reflect anticipated trends, including possible unfavorable deviations. Most life reserve interest assumptions range from 2.6% to 6.0%. | |||||||||
Future policy benefit reserves on LTC products are computed using a net level reserve method. Reserves are determined as the excess of the present value of future benefits over the present value of future net premiums and are based on best estimate assumptions at the time of issue for morbidity, mortality, lapse, and interest with provisions for adverse deviation. Most LTC reserve interest assumptions range from 5.0% to 6.0%. | |||||||||
An additional reserve has been established to provide for future expected losses that are anticipated to occur after a period of profits. The reserve accrual will be over the profit period and is based on best estimate assumptions as of the beginning of the accrual period without provisions for adverse deviation. | |||||||||
(j) Policy and Contract Claims | |||||||||
Policy and contract claims include the liability for claims reported but not yet paid, claims incurred but not yet reported (IBNR), and claim settlement expenses on the Company’s accident and health business. Actuarial reserve development methods are generally used in the determination of IBNR liabilities. In cases of limited experience or lack of credible claims data, loss ratios are used to determine an appropriate IBNR liability. Claim and IBNR liabilities of a short-term nature are not discounted, but those claim liabilities resulting from disability income or LTC benefits include interest and mortality discounting. | |||||||||
(k) Reinsurance | |||||||||
The Company assumes and cedes business with other insurers. Reinsurance premium and benefits paid or provided are accounted for in a manner consistent with the basis used in accounting for original policies issued and the terms of the reinsurance contracts and are included in premiums and policy fees, ceded, and benefit recoveries, respectively, on the Consolidated Statements of Operations. Insurance liabilities are reported before the effects of reinsurance. Account balances and future policy benefit reserves, and policy and contract claims covered under reinsurance contracts are recorded in reinsurance recoverables and receivables on the Consolidated Balance Sheets. Amounts paid or deemed to have been paid for claims covered by reinsurance contracts are recorded as receivables on the Consolidated Balance Sheets. Reinsurance recoverables are recognized in a manner consistent with the liabilities related to the underlying reinsured contracts. Amounts due to other insurers on assumed business are recorded as a reinsurance payable, and are included in other liabilities on the Consolidated Balance Sheets. | |||||||||
A gain recognized when the Company enters into a coinsurance agreement with a third-party reinsurer is deferred and recorded in other liabilities on the Consolidated Balance Sheets. Such gains are amortized into operations over the revenue-producing period or the claims run-off period of the related reinsured policies. These amortized gains are recorded in other revenue on the Consolidated Statements of Operations. | |||||||||
(l) Investments | |||||||||
Fixed-Maturity and Equity Securities | |||||||||
The Company has portfolios of certain fixed-maturity and equity securities as “available-for-sale.” Accordingly, the securities are carried at fair value, and related unrealized gains and losses are credited or charged directly to accumulated other comprehensive income in stockholder’s equity, net of tax and related shadow adjustments. The adjustments to DAC, DSI, and VOBA represent the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. The adjustment to reserves represents the increase or decrease in the reserve balance that would have been required as a charge or credit to operations had such unrealized amounts been realized. | |||||||||
The Company has portfolios of certain fixed-maturity and equity securities classified as “trading,” and accordingly, the securities are carried at fair value, and related unrealized gains and losses are reflected in change in fair value of assets and liabilities, within the Consolidated Statements of Operations. The Company has portfolios of certain fixed-maturity securities classified as “held-to-maturity,” and accordingly, the securities are carried at amortized cost on the Consolidated Balance Sheets. The Company has the intent and ability to hold such securities to maturity. | |||||||||
Dividends are accrued on the date they are declared and interest is accrued as earned. Premiums or discounts on fixed-maturity securities are amortized using the constant yield method. Realized gains and losses are computed based on the average cost basis of all lots owned of each security. | |||||||||
Mortgage-backed securities and structured securities are amortized using, among other assumptions, anticipated prepayments. Prepayment assumptions for loan-backed securities are obtained from various external sources or internal estimates. The Company believes these assumptions are consistent with those a market participant would use. The Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. For all structured securities without expected credit deterioration, when estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments using the retrospective method. Any resulting adjustment is included in interest and similar income, net on the Consolidated Statements of Operations. For structured securities with expected credit deterioration, when adjustments are anticipated for prepayments and other expected changes in future cash flows, the effective yield is recalculated using the prospective method as required by the Beneficial Interests in Securitized Financial Assets Topic of the Codification. | |||||||||
The fair value of fixed-maturity securities and equity securities is obtained from third-party pricing sources whenever possible. Management completes its own Independent Price Verification (IPV) process, which ensures security pricing is obtained from a third-party source other than the sources used by the investment managers. The IPV process supports the reasonableness of price overrides and challenges by the investment managers and reviews pricing for appropriateness. Results of the IPV are reviewed by the Company’s Pricing Committee. | |||||||||
The Company reviews the available-for-sale and held-to-maturity investment portfolios to determine whether or not declines in fair value are other than temporary. The Company continues to evaluate factors in addition to average cost and fair value, including credit quality, the extent and duration of the decline, market analysis, current events, recent price declines, likelihood of recovery in a reasonable period of time, and management’s judgment, to determine whether fixed-income securities are considered other-than-temporarily impaired. In addition, the Investments – Debt and Equity Securities Topic of the Codification requires that the Company evaluate other-than-temporary impairments (OTTI) on available-for-sale and held-to-maturity fixed-maturity securities based on additional factors. Specifically, declines in value resulting from changes in risk-free interest rates must also be considered. | |||||||||
When the fair value of a fixed-maturity security is less than its amortized cost, the Company assesses whether or not (i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. The Company evaluates these factors to determine whether the Company or any of its investment managers have an intent to sell a security or a group of securities. Additionally, the Company performs a cash flow projection for several years into the future to determine whether cash needs would require the sale of any securities in an unrealized loss position. If either of these conditions is met, the Company must recognize an OTTI for the difference between the investment’s amortized cost basis and its fair value through earnings. For securities that do not meet the above criteria, and the Company does not expect to recover a security’s amortized cost basis, the security is consideredother-than-temporarily impaired. For these securities, the Company separates the total impairment into the credit loss component and the amount of the loss related to other factors. The amount of the total impairment related to credit loss is considered an OTTI and is recognized in realized investment gains, net on the Consolidated Statements of Operations. The amount of the total impairment related to other factors is recognized in other comprehensive income, net of impacts to DAC, DSI, VOBA, reserves, and deferred income taxes. For available-for-sale and held-to-maturity securities that have recognized an OTTI through earnings, if through subsequent evaluation there is a significant increase in the cash flow expected, the difference between the amortized cost basis and the discounted cash flows expected to be collected is accreted as interest income. Subsequent increases and decreases not related to additional credit losses in the fair value ofavailable-for-sale securities are included as a separate component in the Consolidated Statements of Comprehensive Income. | |||||||||
The Company evaluates whether a credit loss exists by considering primarily the following factors: (a) the length of time and extent to which the fair value has been less than the amortized cost of the security, (b) changes in the financial condition, credit rating, and near-term prospects of the issuer, (c) whether the issuer is current on contractually obligated interest and principal payments, (d) changes in the financial condition of the security’s underlying collateral, if any, and (e) the payment structure of the security. The Company uses a probability-weighted cash flow model for corporate bonds to determine the credit loss amount. This measurement is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and significant judgments regarding the future performance of the security. The Company’s probability-weighted cash flow model involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. For structured securities, the Company selects a probability-weighted or best estimate cash flow model depending on the specifics of the individual security and the information available to measure the expected cash flows of the underlying collateral. In the event that sufficient information is not available to measure the expected cash flows of a structured security in a timely manner due to a lack of available information on the valuation date, the entire decline in fair value is considered to be related to credit loss. | |||||||||
The Company provides a supplemental disclosure on its Consolidated Statements of Operations that presents the total OTTI losses recognized during the period less the portion of OTTI losses recognized in other comprehensive income to equal the credit-related portion of OTTI that was recognized in earnings during the period. The portion of OTTI losses recognized in other comprehensive income includes the portion of OTTI losses related to factors other than credit recognized during the period, offset by reclassifications of OTTI losses previously determined to be related to factors other than credit that are determined to be credit related in the current period. The amount presented in the supplemental disclosure on the Consolidated Statements of Operations represents the portion of OTTI losses recognized in other comprehensive income and excludes subsequent increases and decreases in the fair value of these securities. | |||||||||
The Company views equity securities that have a fair value of at least 20% below average cost at the end of a quarter or are in an unrealized loss position for nine consecutive months as other-than-temporarily impaired. However, other factors, including market analysis, current events, recent price declines, and management’s judgment related to the likelihood of recovery within a reasonable period of time, are also used to determine whether equity securities are considered other-than-temporarily impaired and may result in an equity security being impaired. All previously impaired equity securities will incur additional OTTI should the fair value fall below the book value. | |||||||||
Impairments in the value of securities held by the Company, considered to be other than temporary, are recorded as a reduction of the cost of the security, and a corresponding realized loss is recognized on the Consolidated Statements of Operations. The Company adjusts DAC, DSI, and VOBA for impairments on securities, as discussed in their respective sections of this note. | |||||||||
Mortgage Loans on Real Estate | |||||||||
Mortgage loans on real estate are reflected at unpaid principal balances adjusted for an allowance for uncollectible balances. Interest on mortgage loans is accrued on a monthly basis and recorded in interest and similar income, net on the Consolidated Statements of Operations. The Company analyzes loan impairment quarterly when assessing the adequacy of the allowance for uncollectible balances. The Company considers recent trends in the Company’s loan portfolio and information on current loans, such as loan-to-value ratios and debt service coverage, which could impact a loan’s credit quality. The Company also evaluates the mortgage loan reserve to ensure that the estimate is based on the most recent available industry default and loss studies and historical default rates for the Company. The Company does not accrue interest on defaulted loans. | |||||||||
Other Invested Assets | |||||||||
Other invested assets include short-term securities, policy loans, loans to affiliates, real estate, equity securities carried at cost, acquired loans, and partnership investments. Short-term securities are carried at amortized cost, which approximates fair value. Policy loans, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value. Loans to affiliates are carried at cost, and interest is accrued monthly, with payments received semiannually. Real estate consists of building and land and is carried at cost less accumulated depreciation. The buildings are amortized over 39 years at acquisition, and improvements and additions are depreciated using the straight-line method over the remaining life of the real estate. | |||||||||
The Company is a member of the Federal Home Loan Bank of Des Moines (FHLB), primarily for the purpose of participating in the Bank’s mortgage collateralized loan advance program with short-term and long-term funding facilities. Members are required to purchase and hold a minimum amount of FHLB capital stock plus additional stock based on outstanding advances. The investment is carried at cost, which approximates fair value, and is reported in other invested assets on the Consolidated Balance Sheets. The investment is evaluated for impairment based on the ultimate recoverability of its par value. | |||||||||
Acquired Loans | |||||||||
The Company acquired a portfolio of assets that have deteriorated credit quality and are recorded as acquired loans within other invested assets on the Consolidated Balance Sheets. Acquired loans are initially recorded at fair value, and changes in expected cash flows are recorded as adjustments to accretable yield, to the carrying amount, or both. Fair values are obtained using a combination of third-party vendors and cash flow modeling, which is reviewed by the Company Pricing Committee. Accretable yield refers to the amount of undiscounted cash flows expected in excess of the carrying amount. This amount is converted into a rate and accreted into interest and similar income, net on the Consolidated Statements of Operations. Interest is recorded as received on certain acquired loans that do not have reasonably estimable cash flows. | |||||||||
Repurchase Agreements | |||||||||
The Company has entered into a tri-party repurchase facility agreement with an unaffiliated bank, whereby the Company may sell securities with an agreement to repurchase at a later date for a specified price. The Company’s repurchase agreements are accounted for as collateralized borrowings, whereby the underlying securities sold by the Company under the repurchase agreement are considered collateral pledged against the cash borrowed and the assets pledged as collateral are reclassified and reported separately from other assets not so encumbered. | |||||||||
(m) Derivatives | |||||||||
The Company utilizes derivatives within certain actively managed investment portfolios. Within these portfolios, derivatives can be used for hedging, replication, and income generation only. The financial instruments are valued and carried at fair value and the unrealized gains and losses on the derivatives are reflected in change in fair value of assets and liabilities within the Consolidated Statements of Operations. | |||||||||
Hedge Accounting | |||||||||
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in cash flow of the hedged item. At hedge inception, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as cash flow hedges to specific assets or liabilities on the Consolidated Balance Sheets and defining the effectiveness and ineffectiveness testing methods to be used. The Company also formally assesses, at inception and on a quarterly basis, whether the derivatives used in hedging transactions have been and are expected to continue to be highly effective in offsetting changes in cash flows of hedged items. | |||||||||
Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include comparison of critical terms of the derivative to the hedged item. Quantitative methods include analysis of changes in fair value or cash flows associated with the hedge relationship. Hedge effectiveness is measured using the dollar offset method. The dollar offset method compares changes in cash flows of the hedging instrument with changes in the cash flows of the hedged item attributable to the hedged risk. Random changes in interest rate movements are assumed. Related changes in the cash flows of the hedging instrument are expected to offset the changes in the cash flows of the hedged item as the notional/par amounts, reset dates, interest rate indices, and business day conventions are the same for both the bond and the swap. The cumulative amount of unrealized gains and losses of the hedging instrument is recognized in accumulated other comprehensive income, net of tax on the Consolidated Balance Sheets. The ineffective portion of the change in the fair value of the hedging instrument is recognized in change in fair value of assets and liabilities in the Consolidated Statements of Operations. There has been no significant impact to the Consolidated Financial Statements as a result of applying hedge accounting. | |||||||||
Options and Futures Contracts | |||||||||
The Company provides additional benefits through certain life and annuity products, which are linked to the fluctuation of various United States and international stock market indices. In addition, certain variable annuity contracts provide minimum guaranteed benefits. The Company has analyzed the characteristics of these benefits and has entered into over-the-counter (OTC) option contracts, exchange-traded option (ETO) contracts, and exchange-traded futures contracts tied to an appropriate underlying index with similar characteristics with the objective to economically hedge these risks. The Company uses exchange-traded futures contracts with the objective to increase the effectiveness of the economic hedge. Management monitors in-force amounts and option and futures contract values to ensure satisfactory matching and to identify unsatisfactory mismatches. If persistency assumptions were to deviate significantly from anticipated rates, management would purchase or sell option and futures contracts as deemed appropriate or take other actions. | |||||||||
The OTC option contracts and ETO contracts are reported at fair value as derivatives on the Consolidated Balance Sheets. The fair value of the OTCs is derived internally and deemed by management to be reasonable via performing an IPV process. The process of deriving internal derivative prices requires the Company to calibrate Monte Carlo scenarios to actual market information. The calibrated scenarios are applied to derivative cash flow models to calculate fair value prices for the derivatives. The fair value of the ETOs is based on quoted market prices. Changes in unrealized gains and losses on the option contracts and incremental gains and losses from expiring options are recorded in change in fair value of assets and liabilities on the Consolidated Statements of Operations. The liability for the benefits is reported in account balances and future policy benefit reserves on the Consolidated Balance Sheets. Futures contracts do not require an initial cash outlay, and the Company has agreed to daily net settlement based on movements of the representative index. Therefore, no asset or liability is recorded on the Consolidated Balance Sheets. Gains and/or losses on futures contracts are included in change in fair value of assets and liabilities on the Consolidated Statements of Operations. | |||||||||
Interest Rate Swaps and Total Return Swaps | |||||||||
The Company utilizes interest rate swaps and total return swaps (TRS) to hedge cash flows and market risks embedded in certain annuities. The interest rate swaps and TRS are reported at fair value as derivatives on the Consolidated Balance Sheets. The fair value of the interest rate swaps is derived using a third-party vendor software program and deemed by management to be reasonable. The fair value of the TRS is based on counterparty pricing and deemed by management to be reasonable. Changes in unrealized gains and losses on the swaps are recorded in change in fair value of assets and liabilities on the Consolidated Statements of Operations. | |||||||||
(n) Securities Lending | |||||||||
The Company accounts for its securities lending transactions as secured borrowings, in which the collateral received and the related obligation to return the collateral are recorded on the Consolidated Balance Sheets as cash and cash equivalents, and other liabilities, respectively. Securities on loan remain on the Consolidated Balance Sheets, and interest and dividend income earned by the Company on loaned securities is recognized in interest and similar income, net on the Consolidated Statements of Operations. | |||||||||
The Company participates in restricted securities lending arrangements whereby specific securities are loaned to other institutions. The collateral is defined by the agreement to be cash and cash equivalents; is unrestricted and may be used for general purposes. Company policy requires a minimum of 102% of fair value of securities loaned under securities lending agreements to be maintained as collateral. | |||||||||
(o) Receivables | |||||||||
Receivable balances (contractual amount less allowance for doubtful accounts) are based on pertinent information available to management as of year-end, including the financial condition and creditworthiness of the parties underlying the receivables. Receivable balances are monitored and allowances for doubtful accounts are maintained based on the nature of the receivable, and the Company’s assessment of the ability to collect. The allowance is estimated by aging the balances due from individual parties and generally setting up an allowance for any balances that are more than 90 days old. | |||||||||
(p) Company-Owned Life Insurance | |||||||||
Company-owned life insurance (COLI) is recognized at the amount that could be realized assuming the surrender of an individual-life policy (or certificate in a group policy), otherwise known as the cash surrender value. Subsequent measurement of the contract is also at the cash surrender value with changes in cash surrender value recognized in Other Revenue on the Consolidated Statements of Operations. The COLI policies are reported in other assets on the Consolidated Balance Sheets. | |||||||||
(q) Home Office Property and Equipment | |||||||||
Home office property consists of buildings and land. Equipment consists of furniture, office equipment, leasehold improvements, and computer hardware. Both are reported at cost, net of accumulated depreciation, in other assets on the Consolidated Balance Sheets. Major upgrades and improvements are capitalized, while maintenance and repairs are expensed when incurred. Depreciation is computed over the estimated useful lives (3 – 7 years, depending on the asset) of depreciable assets using the straight-line method. The cost and accumulated depreciation for home office property and equipment sold, retired, or otherwise disposed of are relieved from the accounts, and resulting gains or losses are reflected in general and administrative expenses on the Consolidated Statements of Operations. The property and equipment balance was $146,242, net of accumulated depreciation of $110,880 as of December 31, 2013, and $151,661, net of accumulated depreciation of $104,281 as of December 31, 2012. | |||||||||
Preoperating and start-up costs incurred in connection with the construction of the Company’s headquarters were capitalized until the facility became operational. Interest was also capitalized in connection with the construction and recorded as part of the asset. These costs are being amortized, using the straight-line method, over a 39-year period. The amounts of capitalized costs amortized, including interest, during 2013, 2012, and 2011 were $2,275, $2,275, and $2,275, respectively. The expansion of the Company’s headquarters was put into operation in 2006, resulting in amortization of $2,104, $2,104, and $2,104 for the years ended December 31, 2013, 2012, and 2011, respectively. | |||||||||
(r) Income Taxes | |||||||||
The Company and its subsidiaries file a consolidated federal income tax return with AZOA and all of its wholly owned subsidiaries. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code and its related regulations and reimbursement will be in accordance with an intercompany tax reimbursement arrangement. The Company, and its insurance subsidiaries generally will be paid for the tax benefit on their losses and any other tax attributes to the extent they could have obtained a benefit against theirpost-1990 separate return tax liability. | |||||||||
The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded on the Consolidated Balance Sheets. Any such change could significantly affect the amounts reported on the Consolidated Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, management evaluates the appropriateness of such reserves based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service (IRS) or the tax courts. | |||||||||
The Company utilizes the asset and liability method of accounting for income tax. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized or that the related temporary differences will not reverse over time (see further discussion in note 16). | |||||||||
(s) Stockholder’s Equity, Loan to Parent Company | |||||||||
The Company entered into an agreement during 2002 to lend AZOA $250,000 (see further discussion in note 17). This agreement was executed in close proximity to a capital contribution from AZOA of $650,000 in the form of preferred stock of an affiliate. The unamortized loan balance is recorded as contra equity in accordance with the Equity Topic of the Codification. This loan was paid in full during 2012. | |||||||||
(t) Stockholder’s Equity, Accumulated Unrealized Foreign Currency | |||||||||
Foreign currency translation adjustments are related to the conversion of foreign currency upon the consolidation of a foreign subsidiary (see further discussion in note 22). The net assets of the Company’s foreign operations are translated into U.S. dollars using exchange rates in effect at each year-end. Translation adjustments arising from differences in exchange rates from period to period are included in the foreign currency translation adjustments, net of tax reported, as a separate component of comprehensive income on the Consolidated Statements of Comprehensive Income. | |||||||||
(u) Separate Accounts and Annuity Product Guarantees | |||||||||
The Company issues variable annuity and life contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company recognizes gains or losses on transfers from the general account to the separate accounts at fair value to the extent of contractholder interests in separate accounts, which are offset by changes in contractholder liabilities. The Company also issues variable annuity and life contracts through its separate accounts where the Company provides certain contractual guarantees to the contractholder. These guarantees are in the form of a guaranteed minimum death benefit (GMDB), a guaranteed minimum income benefit (GMIB), a guaranteed minimum accumulation benefit (GMAB), and a guaranteed minimum withdrawal benefit (GMWB). These guarantees provide for benefits that are payable to the contractholder in the event of death, annuitization, or at specified dates during the accumulation period. | |||||||||
Separate account assets supporting variable annuity contracts represent funds for which investment income and investment gains and losses accrue directly to contractholders. Each fund has specific investment objectives and the assets are carried at fair value. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company. Separate account assets and liabilities are reported as summary totals on the Consolidated Balance Sheets. Amounts charged to the contractholders for mortality and contract maintenance are included in policy fees on the Consolidated Statements of Operations. Administrative and other services are included in fee and commission revenue on the Consolidated Statements of Operations. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Changes in GMDB and GMIB are calculated in accordance with the Financial Services – Insurance Topic of the Codification and are included in policyholder benefits on the Consolidated Statements of Operations. GMAB and GMWB are considered to be embedded derivatives under the Derivatives and Hedging Topic of the Codification, and the changes in these embedded derivatives are included in change in fair value of annuity embedded derivatives on the Consolidated Statements of Operations. | |||||||||
The GMDB net amount at risk is defined as the guaranteed amount that would be paid upon death, less the current accumulated contractholder account value. The GMIB net amount at risk is defined as the current amount that would be needed to fund expected future guaranteed payments less the current contractholder account value, assuming that all benefit selections occur as of the valuation date. The GMAB net amount at risk is defined as the current guaranteed value amount that would be added to the contracts less the current contractholder account value. The GMWB net amount at risk is defined as the current accumulated benefit base amount less the current contractholder account value. | |||||||||
The GMDB provides a specified minimum return upon death. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract. The Company’s GMDB options have the following features: | |||||||||
• | Return of Premium – Provides the greater of account value or total deposits made to the contract, less any partial withdrawals and assessments. | ||||||||
• | Reset – Provides the greater of a return of premium death benefit or the most recent five-year anniversary account value (prior to age 81), adjusted for withdrawals. | ||||||||
• | Ratchet – Provides the greater of a return of premium death benefit or the highest specified anniversary account value (prior to age 81), adjusted for withdrawals. Currently, there are three versions of ratchet, with the difference based on the definition of anniversary: quarterly – evaluated quarterly, annual – evaluated annually, and six-year – evaluated every sixth year. | ||||||||
• | Rollup – Provides the greater of a return of premium death benefit or premiums adjusted for withdrawals accumulated with a compound interest rate. There are two variations of rollup interest rates: 5% with no cap and 3% with a cap of 150% of premium. This GMDB locks in at age 81. | ||||||||
• | Earnings Protection Rider – Provides the greater of a return of premium death benefit or a death benefit equal to the contract value plus a specified percentage of the earnings on the contract at the date of death. | ||||||||
The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB features are: | |||||||||
• | Return of Premium – Provides the greater of account value or total deposits made to the contract less any partial withdrawals and assessments. | ||||||||
• | Ratchet – Provides an annuitization value equal to the greater of account value, net premiums, or the highest one-year anniversary account value (prior to age 81), adjusted for withdrawals. | ||||||||
• | Rollup – Provides an annuitization value equal to the greater of account value and premiums adjusted for withdrawals accumulated with a compound interest rate, which is subject to a cap for certain interest rates and products. | ||||||||
The GMDB and GMIB liabilities are determined each period by estimating the expected future claims in excess of the associated account balances. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to policyholder benefits on the Consolidated Statements of Operations, if actual experience or other evidence suggests that earlier assumptions should be revised. | |||||||||
The following assumptions were used to determine the GMDB and GMIB liabilities as of December 31, 2013 and 2012: | |||||||||
• | 100 stochastically generated investment performance scenarios. | ||||||||
• | Mean investment performance assumption of 6.5% in 2013 and 2012. | ||||||||
• | Volatility assumption of 13.4% in 2013 and 2012. | ||||||||
• | Mortality assumption of 94.3% and 94.0% of the Annuity 2000 Mortality Table for all actively sold variable annuity products in 2013 and 2012, respectively, and 50.0% of the 1994 MGDB Mortality Table for all other products. | ||||||||
• | Lapse rates vary by contract type and duration. Spike rates could approach 40% with an ultimate rate around 15%. | ||||||||
• | Discount rates vary by contract type and equal an assumed long-term investment return (6.5%), less the applicable mortality and expense rate. | ||||||||
• | GMIB contracts only – dynamic lapse assumption. For example, if the contract is projected to have a large additional benefit, then it becomes less likely to lapse. | ||||||||
The GMAB is a living benefit that provides the contractholder with a guaranteed value that was established at least five years prior at each contract anniversary. This benefit is first available at the fifth contract anniversary, seventh contract anniversary, or tenth contract anniversary depending on the type of contract. Depending on the contractholder’s selection at issue, this value may be either a return of premium or may reflect market gains, adjusted at least proportionately for withdrawals. The contractholder also has the option to reset this benefit. | |||||||||
The GMWB is a living benefit that provides the contractholder with a guaranteed amount of income in the form of partial withdrawals. The benefit is payable provided the covered person is between the specified ages in the contract. The benefit is a fixed rate (depending on the age of the covered person) multiplied by the benefit base in the first year the benefit is taken and contract value in following years. The benefit does not decrease if the contract value decreases due to market losses. The benefit can decrease if the contract value is reduced by withdrawals. The benefit base used to calculate the initial benefit is the maximum of the contract value, the quarterly anniversary value, or the guaranteed annual increase of purchase payments (capped at twice the total purchase payments). Additionally, there is a GMWB living benefit where the benefit is an initial payment percentage established at issue, based on issue age. For each year there is a year-over-yearcontract value increase, the payment percentage will increase by 1.0% (up to age 91). This payment percentage is applied against total purchase payments instead of a benefit base value. | |||||||||
The GMAB and GMWB liabilities are determined each period as the difference between expected future claims and the expected future profits. One result of this calculation is that these liabilities can be negative (contra liability). The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to change in fair value of annuity embedded derivatives on the Consolidated Statements of Operations, if actual experience or other evidence suggests that earlier assumptions should be revised. Products featuring GMWB benefits were first issued in 2007. In the calendar year that a product launches, the reserves are set to zero, until the policy’s first anniversary date. | |||||||||
The following assumptions were used to determine the GMAB and GMWB liabilities as of December 31, 2013 and 2012: | |||||||||
• | 1000 stochastically generated investment performance scenarios. | ||||||||
• | Market volatility assumption varies by fund type and grades from a current volatility number to a long-term assumption over one year as shown below: | ||||||||
2013 | |||||||||
Fund index type | Current | Long-term | |||||||
volatility | forward | ||||||||
volatility | |||||||||
Large cap | 15.8 | % | 18.2 | % | |||||
Bond | 3.4 | 4 | |||||||
International | 17 | 24.5 | |||||||
Small cap | 19.8 | 21.1 | |||||||
Cash | — | — | |||||||
2012 | |||||||||
Fund index type | Current | Long-term | |||||||
volatility | forward | ||||||||
volatility | |||||||||
Large cap | 18.5 | % | 19.8 | % | |||||
Bond | 3.4 | 4.1 | |||||||
International | 21.5 | 25.2 | |||||||
Small cap | 23.1 | 21.4 | |||||||
Cash | — | — | |||||||
• | Mortality assumption 93.3% and 94.0% of the Annuity 2000 Mortality Table for all actively sold variable annuity products in 2013 and 2012, respectively, and 50.0% of the 1994 MGDB Mortality Table for all other products. | ||||||||
• | Lapse rates vary by contract type and duration. Spike rates could approach 40% with an ultimate rate around 15%. | ||||||||
Discount rates equal to current month’s London Interbank Offered Rate (LIBOR) plus a company specific spread. In 2012 and prior years, these cash flows were discounted using the U.S. Treasury rate plus a company specific spread. | |||||||||
The Company issues fixed-indexed annuities with a GMWB as an optional rider. The GMWB has a roll-up feature. The net amount at risk is partially limited, because the contractholder account value has an annual credit that is floored at zero. Since the account value cannot decrease, in contrast to a variable annuity, the difference between the withdrawal value and the account value will not diverge to the degree that is possible in a variable annuity. | |||||||||
(v) Permitted Statutory Accounting Practices | |||||||||
The Company is required to file annual statements with insurance regulatory authorities, which are prepared on an accounting basis prescribed or permitted by such authorities. Prescribed statutory accounting practices include state laws, regulations, and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company currently has a permitted practice in effect for one of its affiliates, which allows interest rate swaps to be accounted for using hedge accounting. This permitted practice does not significantly impact statutory capital and surplus or regulatory risk-based capital requirements. | |||||||||
(w) Recently Issued Accounting Pronouncements – Adopted | |||||||||
In July 2013, the FASB issued guidance that indefinitely defers the effective date of certain quantitative disclosure requirements for an employee benefit plan, other than those plans that are subject to the Securities and Exchange Commission (SEC) filing requirements, that holds investments in the plan sponsor’s own nonpublic entity equity securities, including equity securities of its plan sponsor’s nonpublic affiliated entities that are within the scope of the disclosure requirements in the fair value measurement and disclosure requirements issued in 2011. This guidance is effective immediately upon issue. However, the Company does not have employee benefit plans that invest in nonpublic equity of the Company or any of its affiliates. | |||||||||
In July 2013, the FASB issued guidance allowing the Fed Funds Effective Swap Rate (OIS) to be used as a benchmark interest rate for hedge accounting purposes, in addition to the U.S. Treasury rate and LIBOR. Additionally, this guidance removes a restriction that previously required similar hedges to use the same benchmark interest rate. As part of this guidance, the glossary of the Accounting Standard Codification was updated to define the OIS rate and define that it is considered a proxy for a risk-free interest rate. This guidance is effective for hedging relationships beginning on or after July 17, 2013. The Company adopted this guidance beginning July 17, 2013. The Company has not designated new hedging relationships using OIS in 2013. However, the Company began discounting its collateralized derivatives recorded at fair value using OIS as the discount rate in 2013. | |||||||||
In February 2013, the FASB issued guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective for fiscal years beginning after December 15, 2012. This guidance was adopted January 1, 2013. The Company elected to present the required information in note 24 to the Consolidated Financial Statements. | |||||||||
In December 2011, the FASB issued guidance that amended the Disclosures about Offsetting Assets and Liabilities Topic in the Codification. The guidance requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities will disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. Also, the guidance requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. In January 2013, the FASB issued a clarification to the scope of this amended guidance, which specifies that it applies only to derivative instruments, repurchase and reverse repurchase agreements, securities lending and securities borrowing transactions. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The disclosures should be applied retrospectively for all comparative periods presented. The guidance did not have a financial impact on the Company’s Consolidated Financial Statements as it applies only to disclosures. | |||||||||
In December 2011, the FASB issued guidance about the timing of derecognition when a parent ceases to have a controlling interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. Under this guidance, derecognition should not occur until the legal title has transferred, even if the parent no longer has a controlling financial interest. This guidance is effective for fiscal years beginning on or after June 15, 2012. The Company adopted this guidance on January 1, 2013. The guidance did not have a financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In October 2010, the FASB issued guidance that changes the accounting for costs associated with acquiring or renewing insurance contracts. Specifically, the guidance changes the definition of acquisition costs eligible for deferral. The new definition is meant to reduce diversity in practice regarding the types of expenses treated as DAC in the insurance industry. The new DAC definition states that acquisition costs include only those incremental costs that are directly related to the successful acquisition of insurance contracts. An entity may defer incremental direct costs of contract acquisition that are incurred in transactions sold by independent third parties and incremental direct costs of contract acquisition that are incurred in transactions sold by employees. Additionally, an entity may capitalize as DAC only those advertising costs meeting the capitalization criteria for direct-response advertising. All other acquisition costs are to be charged to expense as incurred. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The Company adopted this guidance beginning January 1, 2012. In 2012, the Company capitalized $737,390 of acquisition costs compared to $820,993 that would have been capitalized if the Company’s previous policy had continued to be applied. | |||||||||
(x) Recently Issued Accounting Pronouncements – To Be Adopted | |||||||||
In July 2013, the FASB issued guidance about the presentation of unrecognized tax benefits. This guidance requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective for fiscal years beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In April 2013, the FASB issued guidance that requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. This guidance does not apply to investment companies under the Investment Company Act of 1940. The guidance is effective for annual reporting periods beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In March 2013, the FASB issued guidance that applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. Changes are applied prospectively with early adoption permitted. The guidance is effective for fiscal years beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements that are not included in other guidance and for which the total amount of the obligation is fixed at the reporting date. Examples of such liabilities include debt arrangements, other contractual obligations, and settled legal and judicial rulings. The guidance is effective for fiscal years beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In July 2011, the FASB issued guidance that addresses how health insurers should recognize and classify, in their income statements, fees mandated by the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (the Acts). The Acts impose an annual fee (not tax deductible) on health insurers for each calendar year beginning on or after January 1, 2014. The liability for the fee should be estimated and recorded in full once the entity provides qualifying health insurance in the calendar year with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. The guidance is effective for calendar years beginning after December 31, 2013, when the fee initially becomes effective. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
(y) Accounting Changes | |||||||||
On September 30, 2012, the Company applied a prospective change to its method of grouping insurance policies for measuring amortization of DAC and DSI for its variable annuity policies. This was a change in estimate that is inseparable from the effect of a related change in accounting principle. The implementation of the new DAC and DSI groupings better reflects the way the Company examines the profitability of its variable business and results in more logical amortization rates, sensitivities, and other analyses. The implementation of this change resulted in additional income from operations before income taxes of $38,503 for the year ended December 31, 2012. | |||||||||
During 2012, the Company recorded a change in estimate related to the implementation of a new model for the valuation of policyholder reserves, deferred acquisition costs (DAC), deferred sales inducements (DSI), and value of business acquired (VOBA) for the Company’s fixed and fixed-indexed annuities. Reserve changes were primarily driven by more sophisticated modeling of newer product features such as lifetime income riders. In addition to DAC amortization related to these reserve changes, the Company’s DAC balances changed as a result of bringing the DAC projection model in line with the reserve model. Historically, the valuation and projection models were distinct in such cases as compression and product mapping. Now, valuation and projection are maintained within the same model, which provides greater consistency and a more refined estimate. This change in estimate resulted in a reserve decrease of $288,822, and caused additional DAC, DSI, and VOBA amortization of $710,549 for the year ended December 31, 2012. | |||||||||
(z) Reclassifications | |||||||||
Certain prior year balances have been reclassified to conform to the current year presentation. |
Risk_Disclosures
Risk Disclosures | 12 Months Ended |
Dec. 31, 2013 | |
Risk Disclosures | ' |
(3) Risk Disclosures | |
The following is a description of the significant risks facing the Company and how it attempts to mitigate those risks: | |
(a) Credit Risk | |
Credit risk is the risk that issuers of fixed-rate and variable rate income securities, mortgages on commercial real estate, or other parties with whom we have transactions, such as reinsurers and derivative counterparties, default on their contractual obligations, resulting in unexpected credit losses. | |
The Company mitigates this risk by adhering to investment policies and limits that provide portfolio diversification on an asset class, asset quality, creditor, and geographical basis, and by complying with investment limitations governed by state insurance laws and regulations, as applicable. The Company considers all relevant objective information available in estimating the cash flows related to structured securities. The Company actively monitors and manages exposures, and determines whether any securities are impaired. The aggregate credit risk taken in the investment portfolio is influenced by management’s risk/return preferences, the economic and credit environment, and the ability to manage this risk through liability portfolio management. | |
For derivative counterparties, the Company mitigates credit risk by tracking and limiting exposure to each counterparty through limits that are reported regularly and, once breached, restricts further trades; establishing relationships with counterparties rated A- and higher; and monitoring the credit default swap (CDS) of each counterparty as an early warning signal to cease trading when CDS spreads imply severe impairment in credit quality. | |
The Company has executed Credit Support Annexes (CSA) with all active counterparties and requires a CSA from all new counterparties added to the counterparty pool. The CSA agreement further limits credit risk by requiring counterparties to post collateral to a segregated account to cover any counterparty exposure. | |
(b) Credit Concentration Risk | |
Credit concentration risk is the risk of increased exposure to significant asset defaults (of a single security issuer or class of security issuers); economic conditions (if business is concentrated in a certain industry sector or geographic area); or adverse regulatory or court decisions (if concentrated in a single jurisdiction) affecting credit. Concentration risk exposure is monitored regularly. | |
The Company’s Finance Committee, responsible for asset/liability management issues (ALM), recommends an investment policy to the Company’s Board of Directors (BOD). The investment policy and accompanying investment mandates specify asset allocation among major asset classes and the degree of asset manager flexibility for each asset class. The investment policy complies, at a minimum, with state statutes. Compliance with the policy is monitored by the Finance Committee who is responsible for implementing internal controls and procedures. Deviations from the policy are monitored and addressed. The Finance Committee and, subsequently, the BOD review the policy and mandates at least annually. | |
To further mitigate this risk, internal concentration limits based on credit rating and sector have been established and are monitored regularly. Any ultimate obligor group exceeding these limits is placed on a restricted list to prevent further purchases, and the excess exposure may be actively sold down to comply with concentration limit guidelines. Further, the Company performs a quarterly concentration risk calculation to ensure compliance with certain state insurance regulations. | |
(c) Liquidity Risk | |
Liquidity risk is the risk that unexpected timing or amounts of cash needed will require liquidation of assets in a market that will result in a realized loss or an inability to sell certain classes of assets such that an insurer will be unable to meet its obligations and contractual guarantees. Liquidity risk also includes the risk that in the event of a company liquidity crisis refinancing is only possible at higher interest rates or by liquidating assets at a discount. Liquidity risk can be affected by the maturity of liabilities, the presence of withdrawal penalties, the breadth of funding sources, and terms of funding sources. It can also be affected by counterparty collateral triggers as well as whether anticipated liquidity sources such as credit agreements are cancelable. | |
The Company manages liquidity within four specific domains: (1) monitoring product development, product management, business operations, and the investment portfolio; (2) setting ALM strategies; (3) managing the cash requirements stemming from the Company’s derivative dynamic hedging activities; and (4) establishing liquidity facilities to provide additional liquidity. The Company has established liquidity risk limits, which are approved by the Company’s Risk Committee, and the Company monitors its liquidity risk regularly. The Company also sets target levels for the liquid securities in its investment portfolio. | |
(d) Interest Rate Risk | |
Interest rate risk is the risk that interest rates will change and cause a decrease in the value of an insurer’s assets relative to the value of its liabilities and/or an unfavorable change in prepayment activity resulting in compressed interest margins. The Company has an asset-liability management strategy to align cash flows and duration of the investment portfolio with policyholder liability cash flows and duration. The Company further limits interest rate risk on variable annuity guarantees through interest rate hedges. | |
(e) Equity Market Risk | |
Equity market risk is the risk that movements in equity prices will cause a decrease in the value of an insurer’s assets relative to the value of its liabilities. | |
The policy value of the fixed-indexed annuity and fixed-indexed universal life products is linked to equity market indices. The Company economically hedges this exposure with derivatives. | |
The variable annuity products provide a minimum guaranteed level of payments irrespective of market movements. The Company has adopted an economic hedging program to manage the equity risk of these products. | |
The Company monitors the economic and accounting impacts of equity stress scenarios on assets and liabilities regularly. | |
Basis risk is the risk that the variable annuity hedge asset value changes unexpectedly relative to the value of the underlying separate account funds of the variable annuity contracts. Basis risk may arise from the Company’s inability to directly hedge the underlying mutual funds of the variable annuity contracts. The Company mitigates this risk through regular review and synchronization of fund mappings, product design features, and hedge design. | |
(f) Legal/Regulatory Risk | |
Legal/regulatory risk is the risk that changes in the legal or regulatory environment in which the Company operates may result in reduced demand for its products or additional expenses not assumed in product pricing. Additionally, the Company is exposed to risk related to how the Company conducts itself in the market and the suitability of its product sales to contract holders. | |
The Company mitigates this risk by offering a broad range of annuity products and by operating throughout the United States. The Company actively monitors all market-related exposure and has members that participate in national and international discussions relating to legal, regulatory, and accounting changes that may impact the business. A formal process exists to assess the Company’s risk exposure to changes in regulation including monitoring by the Compliance and Legal departments and regular reporting to the BOD of all known compliance risks and the effectiveness of the approach used to mitigate such risks. | |
(g) Ratings Risk | |
Ratings risk is the risk that rating agencies change their outlook or rating of the Company or a subsidiary of the Company. The rating agencies generally utilize proprietary capital adequacy models in the process of establishing ratings for the Company. The Company is at risk of changes in these models and the impact that changes in the underlying business that it is engaged in can have on such models. To mitigate this risk, the Company maintains regular communications with the rating agencies and evaluates the impact of significant transactions on such capital adequacy models and considers the same in the design of transactions to minimize the adverse impact of this risk. Rating agency capital is calculated and analyzed regularly. Stress tests are performed regularly to assess how rating agency capital adequacy models would be impacted by severe economic events. | |
(h) Mortality Risk | |
Mortality risk is the risk that life expectancy assumptions used by the Company to price its products are too high (i.e., insureds live shorter than expected lives). Conversely, longevity risk is the risk that life expectancy assumptions used by the Company to price its products are too low (i.e., insureds live longer than expected lives). | |
The Company mitigates mortality risk primarily through reinsurance, whereby the Company cedes a significant portion of its new and existing mortality to third parties. The Company manages mortality risk through the underwriting process. The Company also manages both mortality and longevity risks by reviewing its mortality assumptions at least annually, and reviewing mortality experience periodically. | |
(i) Lapse Risk | |
Lapse risk is the risk that actual lapse experience evolves differently than the assumptions used for pricing and valuation exercises leading to a significant loss in Company value and/or income. | |
The Company mitigates this risk by performing sensitivity analysis at the time of pricing, asset/liability management and regular monitoring of policyholder experience. The Company quantifies lapse risk regularly. | |
(j) Reinsurance Risk | |
Reinsurance risk is the risk that reinsurance companies default on their obligation where the Company has ceded a portion of its insurance risk. The Company uses reinsurance to limit its risk exposure to certain business lines and to enable better capital management. | |
The Company mitigates this risk by requiring certain counterparties to meet thresholds related to the counterparty’s credit rating, exposure, or other factors. If the thresholds are not met by those counterparties, they are required to establish a trust or letter of credit backed by assets meeting certain quality criteria. All arrangements are regularly monitored to determine whether trusts or letters of credit are sufficient to support the ceded liabilities and that their terms are being met. Also, the Company reviews the financial standings and ratings of its reinsurance counterparties and monitors concentrations of credit risk to minimize its exposure to significant losses from reinsurer insolvencies regularly. | |
Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||
(4) Investments | |||||||||||||||||||||||||
Fixed-Maturity Securities | |||||||||||||||||||||||||
At December 31, 2013 and 2012, the amortized cost or cost, gross unrealized gains, gross unrealized losses, and fair values of available-for-sale and held-to-maturity securities are as shown in the following tables: | |||||||||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI in | |||||||||||||||||||||
cost | unrealized | unrealized | value | accumulated | |||||||||||||||||||||
or cost | gains | losses | other | ||||||||||||||||||||||
comprehensive | |||||||||||||||||||||||||
income (1) | |||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||
U.S. government | $ | 1,103,739 | 58,198 | 3,078 | 1,158,859 | — | |||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 480,981 | 30,861 | 13 | 511,829 | — | ||||||||||||||||||||
States and political subdivisions | 4,916,086 | 161,812 | 119,538 | 4,958,360 | — | ||||||||||||||||||||
Foreign government | 341,223 | 24,167 | 156 | 365,234 | — | ||||||||||||||||||||
Public utilities | 4,692,512 | 467,650 | 23,952 | 5,136,210 | 650 | ||||||||||||||||||||
Corporate securities | 39,446,124 | 2,700,886 | 470,158 | 41,676,852 | 1,429 | ||||||||||||||||||||
Mortgage-backed securities | 11,668,499 | 876,705 | 19,911 | 12,525,293 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 12,557 | 1,655 | — | 14,212 | — | ||||||||||||||||||||
Collateralized debt obligations | 44,687 | 12,291 | 105 | 56,873 | 11,480 | ||||||||||||||||||||
Total fixed-maturity securities, available-for-sale | 62,706,408 | 4,334,225 | 636,911 | 66,403,722 | 13,559 | ||||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI in | |||||||||||||||||||||
cost | unrealized | unrealized | value | accumulated | |||||||||||||||||||||
or cost | gains | losses | other | ||||||||||||||||||||||
comprehensive | |||||||||||||||||||||||||
income (1) | |||||||||||||||||||||||||
Fixed-maturity securities, held-to-maturity: | |||||||||||||||||||||||||
Corporate securities | $ | 110 | 19 | — | 129 | — | |||||||||||||||||||
Collateralized debt obligations | 220,642 | 1,100 | 2,355 | 219,387 | — | ||||||||||||||||||||
Total fixed-maturity securities, held-to-maturity | 220,752 | 1,119 | 2,355 | 219,516 | — | ||||||||||||||||||||
Total available-for- sale and held-to-maturity securities | $ | 62,927,160 | 4,335,344 | 639,266 | 66,623,238 | 13,559 | |||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI in | |||||||||||||||||||||
cost | unrealized | unrealized | value | accumulated | |||||||||||||||||||||
or cost | gains | losses | other | ||||||||||||||||||||||
comprehensive | |||||||||||||||||||||||||
income (1) | |||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||
U.S. government | $ | 880,251 | 131,250 | 2,054 | 1,009,447 | — | |||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 744,623 | 129,001 | — | 873,624 | — | ||||||||||||||||||||
States and political subdivisions | 3,891,615 | 587,357 | 5,339 | 4,473,633 | — | ||||||||||||||||||||
Foreign government | 460,615 | 63,379 | — | 523,994 | — | ||||||||||||||||||||
Public utilities | 4,512,465 | 882,652 | 738 | 5,394,379 | 975 | ||||||||||||||||||||
Corporate securities | 35,834,283 | 5,135,779 | 32,590 | 40,937,472 | 9,996 | ||||||||||||||||||||
Mortgage-backed securities | 13,263,966 | 1,629,977 | 246 | 14,893,697 | 979 | ||||||||||||||||||||
Collateralized mortgage obligations | 15,225 | 1,940 | 15 | 17,150 | — | ||||||||||||||||||||
Collateralized debt obligations | 48,993 | 5,867 | 94 | 54,766 | 5,454 | ||||||||||||||||||||
Total fixed-maturity securities, available-for-sale | 59,652,036 | 8,567,202 | 41,076 | 68,178,162 | 17,404 | ||||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI in | |||||||||||||||||||||
cost | unrealized | unrealized | value | accumulated | |||||||||||||||||||||
or cost | gains | losses | other | ||||||||||||||||||||||
comprehensive | |||||||||||||||||||||||||
income (1) | |||||||||||||||||||||||||
Fixed-maturity securities, held-to-maturity: | |||||||||||||||||||||||||
Corporate securities | $ | 138 | 24 | — | 162 | — | |||||||||||||||||||
Collateralized debt obligations | 474,936 | 11,617 | — | 486,553 | — | ||||||||||||||||||||
Total fixed-maturity securities, held-to-maturity | 475,074 | 11,641 | — | 486,715 | — | ||||||||||||||||||||
Total available-for-sale and held-to-maturity securities | $ | 60,127,110 | 8,578,843 | 41,076 | 68,664,877 | 17,404 | |||||||||||||||||||
-1 | The amount represents the net unrealized gain or loss on other-than-temporarily impaired securities. It includes the portion of OTTI losses in accumulated other comprehensive income, which was not included in earnings. | ||||||||||||||||||||||||
The net unrealized gains on available-for-sale securities and ineffective portion of cash flow hedges consist of the following at December 31: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||
Fixed maturity | $ | 3,697,314 | 8,526,126 | 5,877,872 | |||||||||||||||||||||
Equity | — | — | — | ||||||||||||||||||||||
Cash flow hedges | 1,570 | 2,251 | 4,964 | ||||||||||||||||||||||
Adjustments for: | |||||||||||||||||||||||||
Shadow adjustments | (2,174,866 | ) | (5,114,147 | ) | (3,001,532 | ) | |||||||||||||||||||
Deferred taxes | (533,407 | ) | (1,194,981 | ) | (1,002,627 | ) | |||||||||||||||||||
Net unrealized gains | $ | 990,611 | 2,219,249 | 1,878,677 | |||||||||||||||||||||
The amortized cost and fair value of available-for-sale fixed-maturity securities at December 31, 2013, by contractual maturity, are shown below: | |||||||||||||||||||||||||
Amortized | Fair value | ||||||||||||||||||||||||
cost | |||||||||||||||||||||||||
Available-for-sale fixed-maturity securities: | |||||||||||||||||||||||||
Due in one year or less | $ | 1,211,284 | 1,241,135 | ||||||||||||||||||||||
Due after one year through five years | 9,976,377 | 10,992,907 | |||||||||||||||||||||||
Due after five years through ten years | 18,583,011 | 19,365,467 | |||||||||||||||||||||||
Due after ten years | 21,254,680 | 22,264,708 | |||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | 11,681,056 | 12,539,505 | |||||||||||||||||||||||
Total available-for-sale fixed-maturity securities | $ | 62,706,408 | 66,403,722 | ||||||||||||||||||||||
The amortized cost and fair value of held-to-maturity fixed-maturity securities at December 31, 2013, by contractual maturity, are shown below: | |||||||||||||||||||||||||
Amortized | Fair value | ||||||||||||||||||||||||
cost | |||||||||||||||||||||||||
Held-to-maturity fixed-maturity securities: | |||||||||||||||||||||||||
Due after one year through five years | $ | 110 | 129 | ||||||||||||||||||||||
Due after ten years | 220,642 | 219,387 | |||||||||||||||||||||||
Total held-to-maturity fixed-maturity securities | $ | 220,752 | 219,516 | ||||||||||||||||||||||
Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost of fixed-maturity securities with rights to call or prepay without penalty is $18,866,913 as of December 31, 2013. | |||||||||||||||||||||||||
Proceeds from sales of available-for-sale and trading investments for the years ended December 31 are presented in the following table: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||
Proceeds from sales | $ | 2,503,974 | 3,156,402 | 3,652,020 | |||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Proceeds from sales | 134,400 | 348,635 | 4,884 | ||||||||||||||||||||||
Trading: | |||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||
Proceeds from sales | — | — | 127,704 | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Proceeds from sales | 46,109 | 17,180 | 2,026 | ||||||||||||||||||||||
As of December 31, 2013 and 2012, investments with a carrying value of $54,479 and $49,019, respectively, were held on deposit with various insurance departments and in other trusts as required by statutory regulations. | |||||||||||||||||||||||||
The Company’s available-for-sale and trading fixed-maturity security portfolios include mortgage-backed securities and collateralized mortgage obligations. Due to the high quality of these investments and the lack of subprime loans within the securities, the Company does not have a material exposure to subprime mortgages. | |||||||||||||||||||||||||
Unrealized Investment Losses | |||||||||||||||||||||||||
Unrealized losses on available-for-sale securities and the related fair value for the respective years ended December 31 are shown below: | |||||||||||||||||||||||||
12 months or less | Greater than 12 months | Total | |||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | |||||||||||||||||||||||
Fair value | losses | Fair value | losses | Fair value | losses | ||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available- for- sale: | |||||||||||||||||||||||||
U.S. government | $ | 406,462 | 2,334 | 4,404 | 744 | 410,866 | 3,078 | ||||||||||||||||||
U.S. government agency | 688 | 13 | — | — | 688 | 13 | |||||||||||||||||||
States and political subdivisions | 1,847,094 | 113,718 | 38,616 | 5,820 | 1,885,710 | 119,538 | |||||||||||||||||||
Foreign government | 2,244 | 156 | — | — | 2,244 | 156 | |||||||||||||||||||
Public utilities | 480,124 | 19,904 | 27,946 | 4,048 | 508,070 | 23,952 | |||||||||||||||||||
Corporate securities | 8,969,453 | 437,577 | 309,527 | 32,581 | 9,278,980 | 470,158 | |||||||||||||||||||
Mortgage-backed securities | 902,186 | 19,735 | 4,295 | 176 | 906,481 | 19,911 | |||||||||||||||||||
CMOs | — | — | — | — | — | — | |||||||||||||||||||
CDOs | 20,064 | 105 | — | — | 20,064 | 105 | |||||||||||||||||||
Total temporarily impaired securities | $ | 12,628,315 | 593,542 | 384,788 | 43,369 | 13,013,103 | 636,911 | ||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available- for- sale: | |||||||||||||||||||||||||
U.S. government | $ | 95,094 | 2,054 | — | — | 95,094 | 2,054 | ||||||||||||||||||
States and political subdivisions | 228,424 | 5,339 | — | — | 228,424 | 5,339 | |||||||||||||||||||
Public utilities | 16,817 | 253 | 8,266 | 485 | 25,083 | 738 | |||||||||||||||||||
Corporate securities | 764,119 | 15,946 | 220,463 | 16,644 | 984,582 | 32,590 | |||||||||||||||||||
Mortgage-backed securities | 27,618 | 246 | 20 | — | 27,638 | 246 | |||||||||||||||||||
CMOs | 607 | 15 | — | — | 607 | 15 | |||||||||||||||||||
CDOs | 4,613 | 94 | — | — | 4,613 | 94 | |||||||||||||||||||
Total temporarily impaired securities | $ | 1,137,292 | 23,947 | 228,749 | 17,129 | 1,366,041 | 41,076 | ||||||||||||||||||
All unrealized losses on held-to-maturity investments have existed for less than 12 months. | |||||||||||||||||||||||||
As of December 31, 2013 and 2012, there were 993 and 111 available-for-sale investment holdings that were in an unrealized loss position for fixed-maturity securities. | |||||||||||||||||||||||||
As of December 31, 2013 and 2012, of the total amount of unrealized losses, $587,100 or 92.2% and $23,413 or 57.0%, respectively, are related to unrealized losses on investment grade securities. Investment grade is defined as a security having a credit rating of Aaa, Aa, A, or Baa from Moody’s or a rating of AAA, AA, A, or BBB from Standards and Poor’s (S&P), or a NAIC rating of 1 or 2 if a Moody’s or S&P rating is not available. Unrealized losses on securities are principally related to changes in interest rates or changes in sector spreads from the date of purchase. As contractual payments continue to be met, management continues to expect all contractual cash flows to be received. As mentioned in note 2, the Company reviews these securities regularly to determine whether or not declines in fair value are other than temporary. Further, as the Company neither has an intention to sell, nor does it expect to be required to sell the securities outlined above, the Company did not consider these investments to be other-than-temporarily impaired. | |||||||||||||||||||||||||
OTTI Losses | |||||||||||||||||||||||||
The following table presents a rollforward of the Company’s cumulative credit impairments on fixed-maturity securities held at December 31: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Balance as of January 1 | $ | 60,128 | 60,620 | ||||||||||||||||||||||
Additions for credit impairments recognized on (1): | |||||||||||||||||||||||||
Securities not previously impaired | 1,870 | 28,768 | |||||||||||||||||||||||
Securities previously impaired | 91 | — | |||||||||||||||||||||||
Securities that the Company intends to sell or more likely than not be required to sell before recovery (interest) | 13,087 | — | |||||||||||||||||||||||
Reductions for credit impairments previously on: | |||||||||||||||||||||||||
Securities that matured, were sold, or were liquidated during the period | (29,454 | ) | (29,260 | ) | |||||||||||||||||||||
Securities due to an increase in expected cash flows | — | — | |||||||||||||||||||||||
Balance as of December 31 | $ | 45,722 | 60,128 | ||||||||||||||||||||||
-1 | There were $15,048 and $28,768 of additions included in the net OTTI losses recognized in realized investment gains, net in the Consolidated Statements of Operations for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||
Realized Investment Gains (Losses) | |||||||||||||||||||||||||
Gross and net realized investment gains (losses) for the years ended December 31, are summarized as follows: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||
Gross gains on sales and exchanges | $ | 160,091 | 294,642 | 179,387 | |||||||||||||||||||||
Gross losses on sales and exchanges | (36,798 | ) | (52,449 | ) | (65,414 | ) | |||||||||||||||||||
OTTI | (14,957 | ) | (10,506 | ) | (21,074 | ) | |||||||||||||||||||
Net gains on fixed-maturity securities | 108,336 | 231,687 | 92,899 | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Gross gains on sales | — | 11,972 | — | ||||||||||||||||||||||
Gross losses on sales | — | (562 | ) | (227 | ) | ||||||||||||||||||||
Net gains (losses) on equity securities | — | 11,410 | (227 | ) | |||||||||||||||||||||
Net gains on available-for-sale securities | 108,336 | 243,097 | 92,672 | ||||||||||||||||||||||
Held-to-maturity: | |||||||||||||||||||||||||
Gross gains on exchanges | 44,179 | 1,342 | 9,767 | ||||||||||||||||||||||
Gross losses on exchanges | (11 | ) | — | — | |||||||||||||||||||||
OTTI | (91 | ) | (18,262 | ) | (413 | ) | |||||||||||||||||||
Net gains (losses) on held-to-maturity securities | 44,077 | (16,920 | ) | 9,354 | |||||||||||||||||||||
Benefit (provision) for mortgage loans on real estate | 18,500 | (10,232 | ) | 32,325 | |||||||||||||||||||||
Gains (losses) for mortgage loans on real estate | 4,929 | — | (1,580 | ) | |||||||||||||||||||||
Investment in affiliates | 11,810 | — | — | ||||||||||||||||||||||
(Loss) gain on real estate sales | (29 | ) | — | (19,396 | ) | ||||||||||||||||||||
Impairments on real estate | — | (4,538 | ) | — | |||||||||||||||||||||
Net gains on sales of acquired loans | 674 | 5,154 | — | ||||||||||||||||||||||
Other | — | 11,140 | 18 | ||||||||||||||||||||||
Net realized investment gains | $ | 188,297 | 227,701 | 113,393 | |||||||||||||||||||||
The 2013 realized gain on investment in affiliates is related to the disposal of a subsidiary. The 2013 realized gain for mortgage loans on real estate is a result of the sale of certain loans to two subsidiary companies of AZOA. | |||||||||||||||||||||||||
Interest and Similar Income | |||||||||||||||||||||||||
Major categories of interest and similar income, net, for the respective years ended December 31 are shown below: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Interest and similar income: | |||||||||||||||||||||||||
Available-for-sale fixed-maturity securities | $ | 3,185,680 | 3,210,655 | 3,082,859 | |||||||||||||||||||||
Mortgage loans on real estate | 367,196 | 367,506 | 357,394 | ||||||||||||||||||||||
Investment income (loss) on trading securities | 9,735 | 4,624 | (606 | ) | |||||||||||||||||||||
Held-to-maturity fixed-maturity securities | 26,781 | 38,618 | 72,933 | ||||||||||||||||||||||
Rental income on real estate | 1,462 | 2,943 | 19,662 | ||||||||||||||||||||||
Interest on loans to affiliates | 1,549 | 2,614 | 8,435 | ||||||||||||||||||||||
Interest on acquired loans | 27,817 | 31,085 | 1,127 | ||||||||||||||||||||||
Interest rate swaps | 697 | 3,314 | 17,755 | ||||||||||||||||||||||
Other invested assets | 196 | 72 | 1,019 | ||||||||||||||||||||||
Policy loans | 10,461 | 10,177 | 11,005 | ||||||||||||||||||||||
Short-term securities | 5,575 | 4,872 | 4,380 | ||||||||||||||||||||||
Interest on assets held by reinsurers | 2,915 | 3,043 | 3,162 | ||||||||||||||||||||||
Total | 3,640,064 | 3,679,523 | 3,579,125 | ||||||||||||||||||||||
Less investment expenses | 47,947 | 47,117 | 59,109 | ||||||||||||||||||||||
Total interest and similar income, net | $ | 3,592,117 | 3,632,406 | 3,520,016 | |||||||||||||||||||||
Mortgage Loans | |||||||||||||||||||||||||
The Company’s investment in mortgage loans on real estate at December 31 is summarized as follows: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||
Commercial | $ | 6,200,697 | 6,129,542 | ||||||||||||||||||||||
Residential | 578 | 1,042 | |||||||||||||||||||||||
Valuation allowances | (66,750 | ) | (85,250 | ) | |||||||||||||||||||||
Total mortgage loans on real estate | $ | 6,134,525 | 6,045,334 | ||||||||||||||||||||||
At December 31, 2013, mortgage loans on real estate in California and Texas exceeded the 10% concentration level by state with concentrations of 30.8% or $1,910,426, and 12.2% or $755,664, respectively. At December 31, 2012, mortgage loans on real estate in California and Texas exceeded the 10% concentration level by state with concentrations of 34.8% or $2,118,998, and 13.0% or $791,739, respectively. | |||||||||||||||||||||||||
Interest rates on investments in new mortgage loans ranged from a minimum of 3.3% to a maximum of 5.7%. | |||||||||||||||||||||||||
The valuation allowances on mortgage loans on real estate at December 31 and the changes in the allowance for the years then ended are summarized as follows: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Balance, beginning of year | $ | 85,250 | 75,018 | 107,343 | |||||||||||||||||||||
(Benefit) provision charged to operations | (18,500 | ) | 10,232 | (32,325 | ) | ||||||||||||||||||||
Balance, end of year | $ | 66,750 | 85,250 | 75,018 | |||||||||||||||||||||
In 2013, the decrease to the valuation allowance on mortgage loans is a result of the Company reducing a specific reserve on one mortgage loan in the amount of $13,500 related to a change in the estimate of realizable value of the underlying collateral. The Company also reevaluated the allowance related to the remainder of the mortgage loan portfolio during 2013, which resulted in a reduction of the provision of $5,000. | |||||||||||||||||||||||||
In 2012, the increase to the valuation allowance on mortgage loans is a result of the Company establishing a specific reserve on one mortgage loan in the amount of $40,250. The Company also reevaluated the allowance related to the remainder of the mortgage loan portfolio during 2012, which resulted in a reduction of the provision of $30,018. | |||||||||||||||||||||||||
In 2011, the decrease in the valuation allowance on mortgage loans on real estate was a result of the Company reevaluating its mortgage loan portfolio. As indicated in note 2, Management assesses the valuation allowance on an annual basis. | |||||||||||||||||||||||||
During 2010, the Company closed on a deed in lieu of foreclosure for a mortgage loan on real estate. The Company sold the property in 2011, resulting in a gain of $7,078, which is reported within realized investment gains, net on the Consolidated Statements of Operations. | |||||||||||||||||||||||||
Securities Lending | |||||||||||||||||||||||||
The Company had fair value of securities on loan of $1,754,187 and $821,782, in fixed-maturity securities, on the Consolidated Balance Sheets, and held collateral in the amounts of $1,824,788 and $854,424, in cash and cash equivalents, on the Consolidated Balance Sheets as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Variable Interest Entities | |||||||||||||||||||||||||
In the normal course of business, the Company enters into relationships with various entities that are deemed to be variable interest entities (VIE). A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control activities of the entity, the obligation to absorb the entity’s expected losses, and the right to receive the entity’s expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE. | |||||||||||||||||||||||||
The Company’s held-to-maturity collateralized debt obligations (CDOs) were purchased in 2009 and represent interests in VIEs. The CDOs exist for the sole purpose of acquiring and managing a diversified portfolio of asset-backed and synthetic securities and are funded by the issuance of several tranches of funding notes. The CDOs, which are primarily the highest ranking debt tranches of each respective deal, contain similar features. There are several classes of notes, which include a structure that subordinates one note to another. Priorities of payment provide that the most senior classes of notes are paid first. Each CDO trust holds investments in eligible assets, which generally include credit asset-backed securities, mortgage-backed securities, default swaps/synthetic CDOs, other CDOs, and other asset-backed securities. These assets have a concentration in subprime mortgage-backed securities. Each CDO also contains tests, which, if failed, will result in cash payments that would normally be directed to a junior class of note holders, be redirected to the most senior class of note holders. The CDOs contain call features that may be exercised if requested by the appropriate class of note and if other criteria required by the CDO documents are met. | |||||||||||||||||||||||||
In addition, the Company invests in structured securities including VIEs. These structured securities typically invest in fixed-income investments managed by third parties and include mortgage-backed securities, collateralized mortgage obligations, and other CDOs. | |||||||||||||||||||||||||
The Company has carefully analyzed the VIEs to determine whether the Company is the primary beneficiary, taking into consideration whether the Company, or the Company together with its affiliates, has the power to direct the activities of the VIE, that most affect its economic performance and whether the Company has the right to benefits from the VIE. Based on that analysis, the Company has concluded that it is not the primary beneficiary and, as such, did not consolidate any VIEs in the Consolidated Financial Statements. The CDOs are classified as fixed-maturity securities, held-to-maturity on the Consolidated Balance Sheets and reported at amortized cost. The other structured securities are classified as fixed-maturity securities, available-for-sale on the Consolidated Balance Sheets and reported at fair value, or acquired loans and reported at amortized cost. The Company’s maximum exposure to loss from these entities is limited to their carrying value. The Company has not provided, and has no obligation to provide, material, financial, or other support that was not previously contractually required to these entities. The Company had no liabilities recorded as of December 31, 2013 or 2012 related to these entities. | |||||||||||||||||||||||||
During 2013, the Company issued an acceleration direction to the trustee of one of the Company’s CDOs. The trustee then issued a notice of acceleration to the noteholders and beneficial owners notifying them that the principal and all accrued and unpaid interest on the notes are immediately due and repayable. As a result of this acceleration the underlying collateral was sold at auction. The Company received cash of $253,125 for securities with a book value of $208,946 resulting in a realized gain of $44,179. | |||||||||||||||||||||||||
During 2011, the Company issued an acceleration direction to the trustee of one of the Company’s CDOs. The trustee then issued a notice of acceleration to the noteholders and beneficial owners notifying them that the principal and all accrued and unpaid interest on the notes are immediately due and repayable. As a result of this acceleration, the Company exchanged its interest in the CDO for a portion of the underlying collateral. The Company exchanged CDOs with a book value of $380,460 for collateral of $390,227 resulting in a realized gain of $9,767. | |||||||||||||||||||||||||
Prepaid Forward Agreement | |||||||||||||||||||||||||
In January 2007, the Company, in an effort to optimize investment returns, entered into an agreement with Dresdner Kleinwort Pfandbriefe Investments (DKPII), a wholly owned subsidiary of Allianz SE prior to January 12, 2009, to manage a portfolio of German Pfandbriefe (PFs) or other European covered bonds with a credit rating of at least “AA” by S&P or Moody’s. AZL PF Investments, Inc. (AZLPF), a wholly owned subsidiary of the Company, entered into a $500,000 prepaid forward agreement to purchase common stock of DKPII in five years from Dresdner Bank Luxembourg, a wholly owned subsidiary of Dresdner Bank Aktiengesellschaft (Dresdner Bank). On January 12, 2009, Allianz SE closed the sale of 100% of Dresdner Bank, including its subsidiaries, to Commerzbank AG. All financial activity with Dresdner Bank, including its subsidiaries, is recorded or disclosed in the Consolidated Financial Statements as nonaffiliated. | |||||||||||||||||||||||||
The effect of the forward agreement was a Reference Portfolio whereby DKPII designated a portfolio of assets in accordance with preestablished investment guidelines. The net value of this agreement was $629,127 as of December 31, 2011. In January 2012, Commerzbank AG delivered common stock of DKPII, to AZLPF, Inc. in fulfillment of its obligations under the prepaid forward contract. | |||||||||||||||||||||||||
A preferred stock liability of $32,195 was recorded at December 31, 2013 and 2012, representing Commerzbank AG’s share, and is reported in other liabilities on the Consolidated Balance Sheets. | |||||||||||||||||||||||||
At December 31, 2013, the remaining assets of DKPII, in addition to its investment in its subsidiary, Allianz Fund Investments (AFI), are primarily invested in tax-exempt municipal bonds, reported in fixed-maturity securities, available-for-sale on the Consolidated Balance Sheets. These securities are accounted for consistent with the Company’s other available-for-sale investments. |
Derivatives_and_Hedging_Instru
Derivatives and Hedging Instruments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Derivatives and Hedging Instruments | ' | ||||||||||||||||||||||||
(5) Derivatives and Hedging Instruments | |||||||||||||||||||||||||
The Company uses derivatives as a risk management strategy to hedge its exposure to various market risks associated with both its products and operations. Derivative assets and liabilities are recorded at fair value in the Consolidated Financial Statements using valuation techniques further discussed in note 6. | |||||||||||||||||||||||||
Each derivative is designated by the Company as either a cash flow hedging instrument (cash flow hedge) or not qualified as a hedging instrument (nonqualifying strategies). | |||||||||||||||||||||||||
Cash Flow Hedges | |||||||||||||||||||||||||
Interest rate swaps are used by the Company to hedge against the changes in cash flows associated with variable interest rates on certain underlying fixed-maturity securities. The interest rate swaps have notional amounts and maturity dates equal to the underlying fixed-maturity securities and are deemed to be 100% effective as of December 31, 2013 and 2012. The cumulative amount of unrealized gains and losses on the effective portion of the interest rate swaps is recorded as a component of total other comprehensive income in the Consolidated Statements of Comprehensive Income. | |||||||||||||||||||||||||
The following table presents the components of the gains or losses related to derivatives that qualify as cash flow hedges: | |||||||||||||||||||||||||
Derivatives designated as | Amount of (losses) gains | ||||||||||||||||||||||||
recognized at December 31 | |||||||||||||||||||||||||
cash flow hedging instruments | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Interest rate swaps, net of tax (benefit) expense of ($238), ($950), and | $ | (443 | ) | (1,763 | ) | (12,149 | ) | ||||||||||||||||||
($6, 542), at December 31, 2013, 2012, and 2011, respectively | |||||||||||||||||||||||||
At December 31, 2013, the Company does not expect to reclassify any pretax gains or losses on cash flow hedges into earnings during the next 12 months. Recurring interest income earned is recorded in interest and similar income, net in the Consolidated Statements of Operations. The Company has estimated $697 of interest income will be earned in 2014 from the interest rate swaps. In the event that cash flow hedge accounting is no longer applied because the derivative is no longer designated as a hedge or the hedge is not considered to be highly effective, the reclassification from accumulated other comprehensive income into earnings may be accelerated. | |||||||||||||||||||||||||
Nonqualifying Strategies | |||||||||||||||||||||||||
Option Contracts | |||||||||||||||||||||||||
The Company utilizes OTC options and ETOs with the objective to economically hedge certain fixed-indexed annuity and life products tied to certain indices as well as certain variable annuity guaranteed benefits. These options are not used for speculative or income generating purposes. The ETOs provide the Company flexibility to use instruments, which are exchange-cleared and allow the Company to mitigate counterparty credit risk. These options are cleared through the Options Clearing Corporation (OCC), which operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The credit rating on the OCC is currently AA+ from S&P. | |||||||||||||||||||||||||
As of December 31, the Company held options purchased (asset) and options sold (liability) with the following amortized cost basis, fair value, and notional amounts: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Options: | |||||||||||||||||||||||||
Purchased (asset): | |||||||||||||||||||||||||
Amortized cost | $ | 397,427 | 360,834 | ||||||||||||||||||||||
Fair value | 603,043 | 288,296 | |||||||||||||||||||||||
Notional | 29,396,102 | 19,359,512 | |||||||||||||||||||||||
Sold (liability): | |||||||||||||||||||||||||
Basis | $ | 305,781 | 126,873 | ||||||||||||||||||||||
Fair value | 415,813 | 78,060 | |||||||||||||||||||||||
Notional | 25,178,432 | 13,969,973 | |||||||||||||||||||||||
Futures | |||||||||||||||||||||||||
The Company utilizes futures to economically hedge fixed-indexed annuity, life, and variable annuity guarantees. The futures contracts do not require an initial investment except for the initial margin described below and the Company is required to settle cash daily based on movements of the representative index, therefore, no asset or liability is recorded as of December 31, 2013 and 2012. Futures contracts are also utilized to hedge the investment risk associated with seed money. | |||||||||||||||||||||||||
The Company is required to post collateral as initial margin for futures contracts by the Chicago Mercantile Exchange, Chicago Board of Trade, London International Financial Futures Exchange, and the Eurex. The Company retains ownership of the collateral, but the collateral resides in an account designated by the exchange. The collateral is subject to specific exchange rules regarding rehypothecation. Collateral posted at December 31, 2013 and 2012, had a fair value of $826,227 and $412,078, respectively, and is included in fixed-maturity securities on the Consolidated Balance Sheets. | |||||||||||||||||||||||||
Interest Rate Swaps | |||||||||||||||||||||||||
The Company utilizes interest rate swaps to economically hedge certain variable annuity guarantee benefits. The Company can receive the fixed or variable rate. The interest rate swaps are traded in 10-, 20-, and 30-year maturities. The Company will only enter into OTC interest rate swap contracts with counterparties rated A- or better. Typically, the Company transacts with the same counterparties the OTC options are traded. The interest rate swap exposure can be netted with the OTC option for settlement and is subject to the rules of the International Swaps and Derivatives Association, Inc. agreements. See the option contracts section of this note for collateral management. | |||||||||||||||||||||||||
Total Return Swaps | |||||||||||||||||||||||||
The Company engages in the use of OTC TRS, which allow the parties to exchange cash flows based on a variable reference rate such as the three-month LIBOR and the return of an underlying index. The Company uses the TRS with the intent to economically hedge fixed-indexed annuity and variable annuity guarantees. | |||||||||||||||||||||||||
Currency Swaps | |||||||||||||||||||||||||
The Company utilized currency swaps in an attempt to hedge the economic currency exposure of Euro-denominated German Pfandbriefe in connection with the prepaid forward agreement discussed previously. Pfandbriefe are covered bonds issued by European banks and collateralized by pools of German mortgages. The net effect is a credit exposure to German Pfandbriefe and an income stream of U.S. dollar. The Pfandbriefe were all sold during 2012 and the related swaps were settled. | |||||||||||||||||||||||||
Stock Appreciation Rights | |||||||||||||||||||||||||
The Company also enters into contracts with Allianz SE with the objective to economically hedge risk associated with the Allianz SE stock-based compensation plan, which awards certain employees stock appreciation rights (SARs). The contracts are recorded at fair value within derivatives on the Consolidated Balance Sheets with the change in fair value recorded in change in fair value of assets and liabilities on the Consolidated Statements of Operations. As of December 31, 2013 and 2012, the Company owned 193,249 and 183,889 contracts with a cost of $15,018 and $12,753, respectively. See further discussion of the stock-based compensation plan in note 18. | |||||||||||||||||||||||||
Embedded Derivatives | |||||||||||||||||||||||||
The Company issues certain variable annuity products with guaranteed minimum benefit riders, including GMWB and GMAB, which are measured at fair value separately from the host variable annuity contract, with changes in fair value reported in change in fair value of annuity embedded derivatives on the Consolidated Statements of Operations. These embedded derivatives are classified within account balances and future policy benefit reserves on the Consolidated Balance Sheets. | |||||||||||||||||||||||||
Certain fixed-indexed annuity products, variable annuity riders, and universal life policies include a market value liability option (MVLO), which is essentially an embedded derivative with equity-indexed features. This embedded derivative is reported within account balances and future policy benefit reserves on the Consolidated Balance Sheets with changes in fair value reported in change in fair value of annuity embedded derivatives on the Consolidated Statements of Operations. | |||||||||||||||||||||||||
The Company bifurcates and separately records an embedded derivative related to certain CDOs. This embedded derivative is recorded within derivatives on the Consolidated Balance Sheets, with changes in fair value reported in change in fair value of assets and liabilities on the Consolidated Statements of Operations. | |||||||||||||||||||||||||
Forward Commitments | |||||||||||||||||||||||||
The Company had previously utilized forward commitments, on a limited basis, for the generation of income through certain actively managed portfolios. Forward commitments of $0, $0, and $140,471 were settled by the Company during 2013, 2012, and 2011, respectively. There were no outstanding forward commitments reported within derivatives on the Consolidated Balance Sheets as of December 31, 2013 and 2012, respectively. Realized gains and losses on the sale of forward commitments and any change in fair value are reported within change in fair value of assets and liabilities on the Consolidated Statements of Operations. | |||||||||||||||||||||||||
The following table presents the balance sheet location and the fair value of the derivatives, including embedded derivatives, for both cash flow hedges and nonqualifying strategies as of December 31: | |||||||||||||||||||||||||
Fair value | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Derivatives designated as | |||||||||||||||||||||||||
cash flow hedging instruments | |||||||||||||||||||||||||
Interest rate swaps | $ | 1,570 | 2,251 | ||||||||||||||||||||||
Total cash flow hedging instruments | 1,570 | 2,251 | |||||||||||||||||||||||
Derivatives designated as nonqualifying | |||||||||||||||||||||||||
hedging instruments and certain hedged items, net | |||||||||||||||||||||||||
OTC | 184,313 | 211,032 | |||||||||||||||||||||||
ETO | 381 | (2,572 | ) | ||||||||||||||||||||||
SAR | 2,536 | 1,777 | |||||||||||||||||||||||
GMWB | (45,772 | ) | (957,865 | ) | |||||||||||||||||||||
GMAB | (107,973 | ) | (345,703 | ) | |||||||||||||||||||||
MVLO | (11,756,097 | ) | (9,657,994 | ) | |||||||||||||||||||||
CDO embedded derivative | 3,819 | 3,938 | |||||||||||||||||||||||
TRS | (24,405 | ) | (47,759 | ) | |||||||||||||||||||||
Other embedded derivative | 1,903 | 2,526 | |||||||||||||||||||||||
Interest rate swaps | (730,399 | ) | 39,131 | ||||||||||||||||||||||
Total nonqualifying hedging instruments | (12,471,694 | ) | (10,753,489 | ) | |||||||||||||||||||||
Total derivative instruments | $ | (12,470,124 | ) | (10,751,238 | ) | ||||||||||||||||||||
Location in Consolidated Balance Sheets | |||||||||||||||||||||||||
Derivatives | $ | 831,707 | 490,149 | ||||||||||||||||||||||
Account balances and future policy benefit reserves | (11,909,842 | ) | (10,961,562 | ) | |||||||||||||||||||||
Derivative liability | (1,391,989 | ) | (279,825 | ) | |||||||||||||||||||||
Total derivative instruments | $ | (12,470,124 | ) | (10,751,238 | ) | ||||||||||||||||||||
The following table presents the gains or losses recognized in income on the various nonqualifying strategies: | |||||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||||
designated as | Amount of (losses) gains on | ||||||||||||||||||||||||
nonqualifying hedging | derivatives recognized for the | ||||||||||||||||||||||||
instruments and | Location in Consolidated | years ended December 31 | |||||||||||||||||||||||
certain hedged item, net | Statements of Operations | 2013 | 2012 | 2011 | |||||||||||||||||||||
MVLO | Policy fees | $ | 568,744 | 518,420 | 408,196 | ||||||||||||||||||||
MVLO | Policyholder benefits | 10,191 | (38,024 | ) | (185,844 | ) | |||||||||||||||||||
MVLO | Change in fair value of annuity embedded derivatives | (2,677,038 | ) | (1,165,614 | ) | (798,291 | ) | ||||||||||||||||||
GMWB | Change in fair value of annuity embedded derivatives | 912,073 | 59,087 | (926,603 | ) | ||||||||||||||||||||
GMAB | Change in fair value of annuity embedded derivatives | 166,904 | (33,658 | ) | (259,744 | ) | |||||||||||||||||||
Total change in fair value of annuity embedded derivatives | (1,598,061 | ) | (1,140,185 | ) | (1,984,638 | ) | |||||||||||||||||||
OTC | Change in fair value of assets and liabilities | (479,713 | ) | (198,790 | ) | 213,500 | |||||||||||||||||||
ETO | Change in fair value of assets and liabilities | (11,538 | ) | (119,830 | ) | (148,046 | ) | ||||||||||||||||||
Futures | Change in fair value of assets and liabilities | 1,693,399 | (14,930 | ) | (600,321 | ) | |||||||||||||||||||
SAR | Change in fair value of assets and liabilities | 1,823 | 1,292 | (938 | ) | ||||||||||||||||||||
CDO embedded derivative | Change in fair value of assets and liabilities | (119 | ) | (33 | ) | (128 | ) | ||||||||||||||||||
Other embedded derivatives | Change in fair value of assets and liabilities | (623 | ) | (2,151 | ) | 1,965 | |||||||||||||||||||
Forward commitments | Change in fair value of assets and liabilities | — | — | (473 | ) | ||||||||||||||||||||
Interest rate swaps | Change in fair value of assets and liabilities | (684,511 | ) | 39,610 | 317,242 | ||||||||||||||||||||
TRS | Change in fair value of assets and liabilities | 391,726 | 152,174 | 38,346 | |||||||||||||||||||||
Currency swaps | Change in fair value of assets and liabilities | — | (16,829 | ) | (25,471 | ) | |||||||||||||||||||
Total change in fair value of freestanding and other derivatives | 910,444 | (159,487 | ) | (204,324 | ) | ||||||||||||||||||||
Total derivative loss, net | $ | (108,682 | ) | (819,276 | ) | (1,966,610 | ) | ||||||||||||||||||
Offsetting Assets and Liabilities | |||||||||||||||||||||||||
Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets under GAAP. The Company’s derivative instruments are subject to master netting arrangements and collateral arrangements. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. | |||||||||||||||||||||||||
The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis on the Consolidated Balance Sheets. | |||||||||||||||||||||||||
The following tables present additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated: | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Gross amounts not | |||||||||||||||||||||||||
offset in the Balance | |||||||||||||||||||||||||
Sheet | |||||||||||||||||||||||||
Gross | Net amounts | ||||||||||||||||||||||||
Gross | amounts | presented | Collateral | ||||||||||||||||||||||
amounts | offset in the | in the | Financial | pledged/ | Net | ||||||||||||||||||||
recognized | Balance Sheet | Balance Sheet | instruments (1) | received | amounts | ||||||||||||||||||||
Derivative assets | $ | 823,449 | — | 823,449 | (700,630 | ) | (103,612 | ) | 19,207 | ||||||||||||||||
Derivative liabilities | (1,391,989 | ) | — | (1,391,989 | ) | 700,630 | 690,015 | (1,344 | ) | ||||||||||||||||
Net derivatives | $ | (568,540 | ) | — | (568,540 | ) | — | 586,403 | 17,863 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Gross amounts not | |||||||||||||||||||||||||
offset in the Balance | |||||||||||||||||||||||||
Sheet | |||||||||||||||||||||||||
Gross | Net amounts | ||||||||||||||||||||||||
Gross | amounts | presented | Collateral | ||||||||||||||||||||||
amounts | offset in the | in the | Financial | pledged/ | Net | ||||||||||||||||||||
recognized | Balance Sheet | Balance Sheet | instruments (1) | received | amounts | ||||||||||||||||||||
Derivative assets | $ | 481,908 | — | 481,908 | (259,700 | ) | (220,433 | ) | 1,775 | ||||||||||||||||
Derivative liabilities | (279,825 | ) | — | (279,825 | ) | 259,700 | 16,072 | (4,053 | ) | ||||||||||||||||
Net derivatives | $ | 202,083 | — | 202,083 | — | (204,361 | ) | (2,278 | ) | ||||||||||||||||
-1 | Represents the amount of assets or liabilities that could be offset by liabilities or assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. | ||||||||||||||||||||||||
In the tables above, the gross amounts of assets or liabilities as presented in the Consolidated Balance Sheets are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||
(6) Fair Value Measurements | |||||||||||||||||||||||||||||||||
The following assets and liabilities are carried at fair value on a recurring basis in the Company’s Consolidated Financial Statements: available-for-sale and trading fixed-maturity securities, freestanding and embedded derivatives, equity securities, and separate account assets and liabilities. | |||||||||||||||||||||||||||||||||
The Fair Value Measurements and Disclosures Topic of the Codification establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value. | |||||||||||||||||||||||||||||||||
Level 1 – | Unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. | ||||||||||||||||||||||||||||||||
Level 2 – | Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level 1, which are observable for the asset or liability either directly or indirectly, such as: | ||||||||||||||||||||||||||||||||
(a) | Quoted prices for similar assets or liabilities in active markets | ||||||||||||||||||||||||||||||||
(b) | Quoted prices for identical or similar assets or liabilities in markets that are not active | ||||||||||||||||||||||||||||||||
(c) | Inputs other than quoted prices that are observable | ||||||||||||||||||||||||||||||||
(d) | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||||||||||||||||||||||||||
Level 3 – | Valuations derived from techniques in which the significant inputs are unobservable. Level 3 fair values reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). | ||||||||||||||||||||||||||||||||
The Company has analyzed the valuation techniques and related inputs, evaluated its assets and liabilities reported at fair value, and determined an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation and investment class analysis, each valuation was classified into Level 1, 2, or 3. Transfers of securities among the levels occur at the beginning of the reporting period. | |||||||||||||||||||||||||||||||||
The following tables present the assets and liabilities measured at fair value on a recurring basis and their corresponding level in the fair value hierarchy at December 31: | |||||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||
Assets accounted for at fair value: | |||||||||||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. government | $ | 1,158,859 | 1,158,859 | — | — | ||||||||||||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 511,829 | — | 511,829 | — | |||||||||||||||||||||||||||||
States and political subdivisions | 4,958,360 | — | 4,958,360 | — | |||||||||||||||||||||||||||||
Foreign government | 365,234 | — | 331,950 | 33,284 | |||||||||||||||||||||||||||||
Public utilities | 5,136,210 | — | 4,935,015 | 201,195 | |||||||||||||||||||||||||||||
Corporate securities | 41,676,852 | — | 37,949,049 | 3,727,803 | |||||||||||||||||||||||||||||
Mortgage-backed securities | 12,525,293 | — | 12,522,213 | 3,080 | |||||||||||||||||||||||||||||
CMOs | 14,212 | — | 14,212 | — | |||||||||||||||||||||||||||||
CDOs | 56,873 | — | — | 56,873 | |||||||||||||||||||||||||||||
Derivative investments | 831,707 | 1,151 | 821,890 | 8,666 | |||||||||||||||||||||||||||||
Equity securities, available for sale | 29,112 | 29,112 | — | — | |||||||||||||||||||||||||||||
Equity securities, trading | 227,822 | 206,500 | 21,322 | — | |||||||||||||||||||||||||||||
Corporate-owned life insurance | 290,752 | — | 290,752 | — | |||||||||||||||||||||||||||||
Separate account assets | 30,747,777 | 30,747,777 | — | — | |||||||||||||||||||||||||||||
Total assets accounted for at fair value | $ | 98,530,892 | 32,143,399 | 62,356,592 | 4,030,901 | ||||||||||||||||||||||||||||
Liabilities accounted for at fair value: | |||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 1,391,989 | 770 | 1,361,968 | 29,251 | ||||||||||||||||||||||||||||
Separate account liabilities | 30,747,777 | 30,747,777 | — | — | |||||||||||||||||||||||||||||
Reserves at fair value (1) | 11,943,461 | — | — | 11,943,461 | |||||||||||||||||||||||||||||
Total liabilities accounted for at fair value | $ | 44,083,227 | 30,748,547 | 1,361,968 | 11,972,712 | ||||||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||||||||||
Assets accounted for at fair value: | |||||||||||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. government | $ | 1,009,447 | 1,009,447 | — | — | ||||||||||||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 873,624 | — | 873,624 | — | |||||||||||||||||||||||||||||
States and political subdivisions | 4,473,633 | — | 4,473,633 | — | |||||||||||||||||||||||||||||
Foreign government | 523,994 | — | 489,088 | 34,906 | |||||||||||||||||||||||||||||
Public utilities | 5,394,379 | — | 5,201,217 | 193,162 | |||||||||||||||||||||||||||||
Corporate securities | 40,937,472 | — | 37,435,895 | 3,501,577 | |||||||||||||||||||||||||||||
Mortgage-backed securities | 14,893,697 | — | 14,888,908 | 4,789 | |||||||||||||||||||||||||||||
CMOs | 17,150 | — | 17,150 | — | |||||||||||||||||||||||||||||
CDOs | 54,766 | — | — | 54,766 | |||||||||||||||||||||||||||||
Derivative investments | 490,149 | 2,596 | 479,669 | 7,884 | |||||||||||||||||||||||||||||
Equity securities, trading | 31,837 | 18,979 | 12,858 | — | |||||||||||||||||||||||||||||
Separate account assets | 25,670,675 | 25,670,675 | — | — | |||||||||||||||||||||||||||||
Total assets accounted for at fair value | $ | 94,370,823 | 26,701,697 | 63,872,042 | 3,797,084 | ||||||||||||||||||||||||||||
Liabilities accounted for at fair value: | |||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 279,825 | 5,167 | 222,953 | 51,705 | ||||||||||||||||||||||||||||
Separate account liabilities | 25,670,675 | 25,670,675 | — | — | |||||||||||||||||||||||||||||
Reserves at fair value (1) | 10,961,562 | — | — | 10,961,562 | |||||||||||||||||||||||||||||
Total liabilities accounted for at fair value | $ | 36,912,062 | 25,675,842 | 222,953 | 11,013,267 | ||||||||||||||||||||||||||||
-1 | Reserves at fair value are reported in account balances and future policy benefit reserves on the Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||
The following is a discussion of the methodologies used to determine fair values for the assets and liabilities listed in the above table. These fair values represent an exit price (i.e., what a buyer in the marketplace would pay for an asset in a current sale or charge to transfer a liability). | |||||||||||||||||||||||||||||||||
(a) Valuation of Fixed-Maturity Securities and Equity Securities | |||||||||||||||||||||||||||||||||
The fair value of fixed-maturity securities and equity securities is based on quoted market prices in active markets when available. Based on the market data, the securities are categorized into asset class, and based on the asset class of the security, appropriate pricing applications, models and related methodology, and standard inputs are utilized to determine what a buyer in the marketplace would pay for the security in a current sale. When quoted prices are not readily available or in an inactive market, standard inputs used in the valuation models, listed in approximate order of priority, include, but are not limited to, benchmark yields, reported trades, Municipal Securities Rulemaking Board (MSRB) reported trades, Nationally Recognized Municipal Securities Information Repository (NRMSIR) material event notices, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. In some cases, including private placement securities and certain difficult-to-price securities, internal pricing models may be used that are based on market proxies. | |||||||||||||||||||||||||||||||||
Generally, Treasury securities and exchange-traded stocks are included in Level 1. Most bonds for which prices are provided by third-party pricing sources are included in Level 2, because the inputs used are market observable. Bonds for which prices were obtained from broker quotes and private placement securities that are internally priced are included in Level 3. | |||||||||||||||||||||||||||||||||
The Company is responsible for establishing and maintaining an adequate internal control structure to prevent or detect material misstatements related to fair value measurements and disclosures. This responsibility is especially important when using third parties to provide valuation services. | |||||||||||||||||||||||||||||||||
The Company’s control framework around third-party valuations begins with obtaining an understanding of the pricing vendor’s methodologies. A pricing committee is in place that meets quarterly to establish and review a pricing policy, which includes approving any changes to pricing sources, assessing reasonableness of pricing services, and addressing any ad hoc valuation issues that arise. The pricing methodologies used by the service providers and internal control reports provided by the service providers are reviewed by management. | |||||||||||||||||||||||||||||||||
In addition to monitoring the third-party vendor’s policies, the Company is also responsible for monitoring the valuation results. Controls are in place to monitor the reasonableness of the valuations received. These controls include price analytic reports that monitor significant fluctuations in price as well as an independent price verification process by which the Company obtains prices from vendors other than the primary source and compares them for reasonableness. Results of the independent price verification are also reviewed by the Pricing Committee. | |||||||||||||||||||||||||||||||||
There are limited instances in which the primary third-party vendor is not used to obtain prices for fixed maturity securities. These instances include private placement securities, a portfolio of securities received during 2011 as a result of the liquidation of a CDO, and certain other immaterial portfolios priced by a secondary external vendor. | |||||||||||||||||||||||||||||||||
At December 31, 2013 and 2012, private placement securities of $3,902,925 and $3,722,038, respectively, were included in Level 3. Internal pricing models based on market proxy securities and U.S. Treasury rates, which are monitored monthly by the investment manager for reasonableness, are used to value these holdings. This includes ensuring there are no significant credit events impacting the proxy security and that the spreads used are still reasonable under the circumstances. | |||||||||||||||||||||||||||||||||
The portfolio of securities received as a result of liquidating a CDO were priced using a combination of third-party vendors and cash flow modeling. The methodology used is dependent on the availability of observable inputs. Prices are reviewed for reasonableness by reviewing cash flow projections, related yields on similar securities, and comparison to auction prices and other expectations. The securities are reviewed by Management via the Company’s Pricing Committee. | |||||||||||||||||||||||||||||||||
(b) Valuation of Derivatives | |||||||||||||||||||||||||||||||||
The fair value of OTC option assets and liabilities is derived internally, by calculating their expected discounted cash flows, using a set of calibrated, risk-neutral stochastic scenarios, including a market data monitor, a market data model generator, a stochastic scenario calibrator, and the actual asset pricing calculator, because active markets do not exist. The valuation results are reviewed by Management via the Pricing Committee. Options that are internally priced and interest rate swaps are included in Level 2, because they use market observable inputs. TRS are included in Level 3 because they use valuation techniques in which significant inputs are unobservable. The fair value of ETOs and futures is based on quoted market prices and are generally included in Level 1. | |||||||||||||||||||||||||||||||||
Certain derivatives are priced using external third-party vendors. The Company has controls in place to monitor the valuations of these derivatives. Using market observable inputs, interest rate swap prices are derived from a third-party source and are independently recalculated internally and reviewed for reasonableness at the position level on a monthly basis. TRS prices are obtained from the respective counterparties. These prices are also internally recalculated and reviewed for reasonableness at the position level on a monthly basis. | |||||||||||||||||||||||||||||||||
(c) Valuation of Separate Account Assets and Liabilities | |||||||||||||||||||||||||||||||||
Separate account assets are carried at fair value, which is based on the fair value of the underlying assets. Funds in the separate accounts are primarily invested in mutual funds with the following investment types: bond, domestic equity, international equity, or specialty. The separate account funds also hold certain money market funds. Mutual fund investments are generally included in Level 1. The remaining investments are categorized similar to the investments held by the Company in the general account (e.g., if the separate account invested in corporate bonds or other fixed-maturity securities, that portion could be considered a Level 2 or Level 3). In accordance with the Financial Services – Insurance Topic of the Codification, the fair value of separate account liabilities is set to equal the fair value of separate account assets. | |||||||||||||||||||||||||||||||||
(d) Valuation of Reserves at Fair Value | |||||||||||||||||||||||||||||||||
Reserves at fair value principally include the equity-indexed features contained in fixed-indexed annuity products and certain variable annuity riders. Embedded derivatives are recorded in the Consolidated Financial Statements at fair value with changes in fair value adjusted through net income. | |||||||||||||||||||||||||||||||||
Fair values of the embedded derivative liabilities are calculated based on internally developed models, because active, observable markets do not exist for these liabilities. Fair value is derived from techniques in which one or more significant inputs are unobservable and are included in Level 3. These fair values represent the Company’s best estimate of an amount that could be realized in a current market exchange absent actual market exchanges. | |||||||||||||||||||||||||||||||||
The fair value of the embedded derivative contained in the fixed-indexed annuity products is the sum of the current year’s option value projected stochastically, the projection of future index growth at the option budget, and the historical interest/equity-indexed credits. The valuation of the embedded derivative includes an adjustment for the Company’s own credit standing and a risk margin for noncapital market inputs. The Company’s own credit adjustment is determined by taking into consideration publicly available information on industry default risk with considerations for the Company’s own credit profile. Risk margin is incorporated into the valuation model to capture the noncapital market risks of the instrument, which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of certain actuarial assumptions including surrenders, annuitization, and future equity index caps or participation rates. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility, changes in the Company’s own credit standing, and variations in actuarial assumptions regarding contractholder behavior and risk margin related to noncapital market inputs may result in significant fluctuations in the fair value of these embedded derivatives that could materially affect net income. | |||||||||||||||||||||||||||||||||
The Company issues certain variable annuity products with guaranteed minimum benefit riders, including GMWB and GMAB riders. GMWB and GMAB riders are embedded derivatives, which are measured at fair value separately from the host variable annuity contract with changes in fair value reported in change in reserves at fair value on the Consolidated Statements of Operations. These embedded derivatives are classified within account balances and future policy benefit reserves on the Consolidated Balance Sheets. The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable LIBOR. These cash flows are then discounted using the current month’s LIBOR plus a company specific spread. In 2012 and prior years, these cash flows were discounted using the U.S. Treasury rate plus a company specific spread. The valuation of these riders includes an adjustment for the Company’s own credit standing and a risk margin for noncapital market inputs. The Company’s own credit adjustment is determined taking into consideration publicly available information relating to the Company’s claims paying ability. Risk margin is established to capture the noncapital market risks of the instrument, which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of certain actuarial assumptions including surrenders, annuitization, and premium persistency. The establishment of the risk margin requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility, changes in the Company’s own credit standing, and variations in actuarial assumptions regarding contractholder behavior and risk margins related to noncapital market inputs may result in significant fluctuations in the fair value of the riders that could materially affect net income. | |||||||||||||||||||||||||||||||||
The Company elected the fair value option for certain insurance contracts related to the variable index annuity product. The fair value is calculated internally using the present value of future expected cash flows. Future expected cash flows are generated using contractual features, actuarial assumptions, and market emergence over a complete set of market consistent scenarios. Cash flows are then averaged over the scenario set and discounted back to the valuation date using the appropriate discount factors adjusted for nonperformance risk on the noncollateralized portions of the contract. | |||||||||||||||||||||||||||||||||
The Company also has an embedded derivative asset related to a modified coinsurance agreement with Transamerica, which is reported within derivatives on the Consolidated Balance Sheets. This agreement results in a credit derivative, with a fair value based on the difference between the LIBOR and Corporate A- spread as of an average portfolio purchase date. The asset is included in Level 2 as the valuation uses market observable inputs. This derivative is on a closed block of business and is not significant to the ongoing results of the Company. | |||||||||||||||||||||||||||||||||
(e) Level 3 Rollforward | |||||||||||||||||||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances for the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||
Realized | |||||||||||||||||||||||||||||||||
gains (losses) | |||||||||||||||||||||||||||||||||
included | |||||||||||||||||||||||||||||||||
in net | |||||||||||||||||||||||||||||||||
income | |||||||||||||||||||||||||||||||||
Total realized/unrealized | related to | ||||||||||||||||||||||||||||||||
gains (losses) included in | financial | ||||||||||||||||||||||||||||||||
Other | Purchases | Sales | Transfer into | instruments | |||||||||||||||||||||||||||||
Beginning | comprehensive | and | and | and/or out of | Ending | still held at | |||||||||||||||||||||||||||
balance | Net income | income (loss) | issuances | settlements | Level 3, net | balance | December 31 | ||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Foreign government | $ | 34,906 | — | (1,622 | ) | — | — | — | 33,284 | — | |||||||||||||||||||||||
Public utilities | 193,162 | — | (10,278 | ) | 68,300 | (679 | ) | (49,310 | ) | 201,195 | — | ||||||||||||||||||||||
Corporate securities | 3,501,577 | 3,344 | (237,236 | ) | 549,744 | (89,626 | ) | — | 3,727,803 | 140 | |||||||||||||||||||||||
CDOs | 54,766 | 2,009 | 6,413 | — | (6,316 | ) | — | 56,872 | 1,984 | ||||||||||||||||||||||||
Mortgage-backed securities | 4,789 | 91 | 68 | — | (1,868 | ) | — | 3,080 | 86 | ||||||||||||||||||||||||
Total fixed-maturity securities | $ | 3,789,200 | 5,444 | (242,655 | ) | 618,044 | (98,489 | ) | (49,310 | ) | 4,022,234 | 2,210 | |||||||||||||||||||||
Derivative assets | $ | 7,884 | 593,079 | — | — | (592,297 | ) | — | 8,666 | 782 | |||||||||||||||||||||||
Derivative liabilities | (51,705 | ) | (242,038 | ) | — | — | 264,492 | — | (29,251 | ) | 22,453 | ||||||||||||||||||||||
Reserves at fair value | (10,961,562 | ) | (1,015,824 | ) | — | (1,232,687 | ) | 1,266,612 | — | (11,943,461 | ) | (2,248,511 | ) | ||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Foreign government | $ | 32,382 | — | 2,524 | — | — | — | 34,906 | — | ||||||||||||||||||||||||
Public utilities | 58,796 | — | 11,366 | 123,000 | — | — | 193,162 | — | |||||||||||||||||||||||||
Corporate securities | 2,523,244 | 670 | 136,784 | 862,500 | (21,621 | ) | — | 3,501,577 | 341 | ||||||||||||||||||||||||
CDOs | 66,958 | 2,899 | 1,638 | — | (16,729 | ) | — | 54,766 | 2,268 | ||||||||||||||||||||||||
Mortgage-backed securities | 69,189 | 262 | (24 | ) | — | (1,749 | ) | (62,889 | ) | 4,789 | 262 | ||||||||||||||||||||||
Total fixed-maturity securities | $ | 2,750,569 | 3,381 | 152,288 | 985,500 | (40,099 | ) | (62,889 | ) | 3,789,200 | 2,871 | ||||||||||||||||||||||
Derivative assets | $ | 70,145 | 512,096 | — | — | (574,357 | — | 7,884 | (57,935 | ) | |||||||||||||||||||||||
Derivative liabilities | (7,059 | ) | (408,325 | ) | — | — | 363,679 | — | (51,705 | ) | (44,646 | ) | |||||||||||||||||||||
Reserves at fair value | (10,612,779 | ) | (793,258 | ) | — | (1,143,374 | ) | 1,587,849 | — | (10,961,562 | ) | 1,936,632 | |||||||||||||||||||||
(f) Transfers | |||||||||||||||||||||||||||||||||
The Company reviews its fair value hierarchy classifications annually. This review could reveal that previously observable inputs for specific assets or liabilities are no longer available or reliable. For example, the market for a Level 1 asset becomes inactive. In this case, the Company may need to adopt a valuation technique that relies on observable or unobservable components causing the asset to be transferred to Level 2 or Level 3. Alternatively, if the market for a Level 3 asset or liability becomes active, the Company will report a transfer out of Level 3. Transfers into and/or out of Levels 1, 2, and 3 are reported as of the beginning of the period in which the change occurs. | |||||||||||||||||||||||||||||||||
The net transfers out of Level 3 for the years ended December 31, 2013 and 2012, are a result of observable inputs being used for certain fixed-maturity securities There were no transfers between Level 1 and Level 2 for the year ended December 31, 2013. | |||||||||||||||||||||||||||||||||
(g) Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs | |||||||||||||||||||||||||||||||||
The following table provides a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities on a recurring basis at December 31: | |||||||||||||||||||||||||||||||||
Fair | Valuation | Unobservable | Range (weighted | ||||||||||||||||||||||||||||||
value | Technique | input | average) | ||||||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Foreign government | $ | 33,284 | Matrix pricing | Option adjusted spread | 160–164 (161) | ||||||||||||||||||||||||||||
Public utilities | 201,195 | Matrix pricing | Option adjusted spread | 72–311 (176) | |||||||||||||||||||||||||||||
Corporate securities | 3,727,803 | Matrix pricing | Option adjusted spread | 30–486 (177) | |||||||||||||||||||||||||||||
CDOs | 56,873 | Intex discounted | Constant prepayment rate | 0–25.0% (0.7%) | |||||||||||||||||||||||||||||
cash flows | Annual default rate | 0.5–62.5% (5.1%) | |||||||||||||||||||||||||||||||
Loss severity | 10–80.0% (56.1%) | ||||||||||||||||||||||||||||||||
Delinquencies | 0–32.0% (1.0%) | ||||||||||||||||||||||||||||||||
Discount Margin to LIBOR | 1.7–10.7% (5.4%) | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | 3,080 | Intex discounted | Constant prepayment rate | 1.5–2.0% (2.0%) | |||||||||||||||||||||||||||||
cash flows | Annual default rate | 15.0–90.0% (20.0%) | |||||||||||||||||||||||||||||||
Loss severity | 55.0–70.0% (57.6%) | ||||||||||||||||||||||||||||||||
Delinquencies | 5.0–30.0% (16.8%) | ||||||||||||||||||||||||||||||||
Discount Margin to LIBOR | 4.2–4.2% (4.2%) | ||||||||||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||||||||||
TRS | $ | 4,847 | Third-Party Vendor | Spread and discount rates | * | ||||||||||||||||||||||||||||
CDO embedded derivative | 3,819 | Discounted cash flow | Prepayment rates | * | |||||||||||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||||||||||
TRS | (29,251 | ) | Third-Party Vendor | Spread and discount rates | * | ||||||||||||||||||||||||||||
Fair | Valuation | Unobservable | Range | ||||||||||||||||||||||||||||||
(weighted | |||||||||||||||||||||||||||||||||
value | Technique | input | average) | ||||||||||||||||||||||||||||||
Reserves at Fair Value: | |||||||||||||||||||||||||||||||||
MVLO | $ | (11,756,097 | ) | Discounted cash flow | Annuitizations | 0–25% | |||||||||||||||||||||||||||
Surrenders | 0–25% | ||||||||||||||||||||||||||||||||
Mortality** | 0–100% | ||||||||||||||||||||||||||||||||
Withdrawal Benefit Election | 0–50% | ||||||||||||||||||||||||||||||||
GMWB and GMAB | (153,745 | ) | Discounted cash flow | Surrenders | 0.5–35% | ||||||||||||||||||||||||||||
Mortality** | 0–100% | ||||||||||||||||||||||||||||||||
* | Management does not have insight into the specific assumptions used. See narrative below for qualitative discussion. | ||||||||||||||||||||||||||||||||
** | Mortality assumptions are derived by applying management determined factors to the Annuity 2000 Mortality Table for MVLO and actively issued GMWB and GMAB and the 1994 MGDB Mortality Table for all other GMWB and GMAB. | ||||||||||||||||||||||||||||||||
(h) Sensitivity of Fair Value Measurements to Changes in Unobservable Inputs | |||||||||||||||||||||||||||||||||
Fixed-maturity securities matrix pricing: The primary unobservable input used in the matrix pricing model is a benchmark security option adjusted spread (OAS), which is applied to an OAS ratio. A significant yield increase of the benchmark security OAS in isolation could result in a decreased fair value, while a significant yield decrease in OAS could result in an increased fair value. | |||||||||||||||||||||||||||||||||
Fixed-maturity securities and CDO embedded derivative discounted cash flows: A significant increase (decrease) in the prepayment rates could result in an increase (decrease) in fair value. A significant decrease (increase) in default rates or loss severity could result in an increase (decrease) in fair value. A significant widening of the spread in isolation could result in a decreased fair value, while significant spread tightening could result in an increased fair value. | |||||||||||||||||||||||||||||||||
Derivative assets and liabilities: The TRS are priced by a third-party vendor and the Company internally reviews the valuation for reasonableness. The Company does not have insight into the specific inputs used; however, the key unobservable input would generally include the spread. For a long position, a significant increase (decrease) in the spread used in the fair value of the TRSs in isolation could result in higher (lower) fair value. For a short position, a significant increase (decrease) in the spread used in the fair value of the TRSs in isolation could result in lower (higher) fair value. | |||||||||||||||||||||||||||||||||
Reserves at fair value: A significant increase (decrease) in the utilization of annuitization benefits could result in a higher (lower) fair value. A significant decrease (increase) in mortality rates, surrender rates, or utilization of lifetime income benefits could result in a higher (lower) fair value. | |||||||||||||||||||||||||||||||||
(i) Nonrecurring Fair Value Measurements | |||||||||||||||||||||||||||||||||
Occasionally, certain assets and liabilities are measured at fair value on a nonrecurring basis. In 2013, no nonrecurring fair value adjustments were recorded. In 2012, an impairment of $4,538, was recorded on real estate held for sale. This real estate property was transferred from held for investment to held for sale on 2012 and is recorded within other assets on the Consolidated Balance Sheets. In 2011, an impairment of $413 was recorded on a CDO and an impairment of $1,580 was recorded on a mortgage loan on real estate. In 2010, an impairment of $5,000 was recorded associated with a mortgage loan on real estate, and an additional $2,167 loss was incurred upon its final disposition. The impairment was based on the appraisal value of the underlying property that is an input classified as Level 3 in the hierarchy. On February 12, 2010, the Company closed on a deed in lieu of foreclosure related to this mortgage loan on real estate and the impaired value of $50,500 was transferred to real estate. This real estate was sold during 2011 for a gain of $7,078. | |||||||||||||||||||||||||||||||||
(j) Fair Value of Financial Assets and Liabilities | |||||||||||||||||||||||||||||||||
The following table presents the carrying amounts and fair values of financial assets and liabilities at December 31: | |||||||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||
Carrying | Fair value | ||||||||||||||||||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||
Held-to-maturity fixed-maturity securities | $ | 220,752 | — | — | 219,516 | 219,516 | |||||||||||||||||||||||||||
Mortgage loans on real estate | 6,134,525 | — | 6,554,054 | 6,554,054 | |||||||||||||||||||||||||||||
Loans to affiliates | 1,191,170 | — | 1,191,170 | — | 1,191,170 | ||||||||||||||||||||||||||||
Policy loans | 158,217 | — | 158,217 | — | 158,217 | ||||||||||||||||||||||||||||
Acquired loans | 205,131 | — | 162,320 | 85,238 | 247,558 | ||||||||||||||||||||||||||||
Other invested assets | 50,046 | — | — | 50,046 | 50,046 | ||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||
Investment contracts | $ | 71,735,796 | — | — | 72,477,568 | 72,477,568 | |||||||||||||||||||||||||||
Mortgage notes payable | 99,210 | — | — | 112,884 | 112,884 | ||||||||||||||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||
Carrying | Fair value | ||||||||||||||||||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||
Held-to-maturity fixed-maturity securities | $ | 475,074 | — | — | 486,715 | 486,715 | |||||||||||||||||||||||||||
Mortgage loans on real estate | 6,045,334 | — | — | 6,773,362 | 6,773,362 | ||||||||||||||||||||||||||||
Loans to affiliates | 28,725 | — | — | 29,720 | 29,720 | ||||||||||||||||||||||||||||
Policy loans | 163,768 | — | 163,768 | — | 163,768 | ||||||||||||||||||||||||||||
Acquired loans | 216,062 | — | 204,632 | 35,365 | 239,997 | ||||||||||||||||||||||||||||
Real Estate—held for sale | 15,500 | — | 15,500 | — | 15,500 | ||||||||||||||||||||||||||||
Other invested assets | 23,262 | — | — | 23,262 | 23,262 | ||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||
Investment contracts | $ | 69,286,685 | — | — | 70,143,265 | 70,143,265 | |||||||||||||||||||||||||||
Mortgage notes payable | 105,858 | — | — | 129,065 | 129,065 | ||||||||||||||||||||||||||||
The Company has portfolios of certain fixed-maturity securities classified as “held-to-maturity,” and accordingly, the securities are carried at amortized cost on the Consolidated Balance Sheets. The fair value is calculated internally with cash flow models using unobservable inputs and is categorized as Level 3. | |||||||||||||||||||||||||||||||||
The fair value of mortgage loans on real estate is calculated by analyzing individual loans and assigning ratings to each loan based on a combination of loan-to-value ratios and debt service coverage ratios. Default rates and loss severities are then applied to each loan and a fair value is determined based on these factors as well as the contractual cash flows of each loan and the current market interest rates for similar loans. The inputs used are unobservable and the fair value is classified as Level 3. | |||||||||||||||||||||||||||||||||
In 2013, the fair value of loans to affiliates balance comprises investments in a cash pool managed by Allianz SE (Cash Pool). The Cash Pool does not carry a quoted market price and investment access is limited to entities within the Allianz SE holding company structure. However, the Cash Pool comprises various short term investments whose fair value is based on market observable inputs. Therefore, fair value is classified as Level 2. | |||||||||||||||||||||||||||||||||
In 2012 and prior years, the fair value of loans to affiliates was calculated by management using the market price of a financial instrument with similar characteristics. Prices for loans to affiliates were provided via an internal model, using observable inputs, including the treasury spot curve rate and corporate market spread data. The fair value was, therefore, classified as Level 3. Policy loans, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value. Therefore, fair value is classified as Level 2. | |||||||||||||||||||||||||||||||||
During 2011, the Company acquired a portfolio of assets as part of the liquidation of a CDO investment. A portion of these acquired assets have deteriorated credit quality and are recorded as acquired loans. Acquired loans are initially recorded at fair value, and changes in expected cash flows are recorded as adjustments to accretable yield, to the carrying amount, or both. Fair values are obtained using a combination of third-party vendors cash flow modeling, and matrix pricing with unobservable inputs. Prices obtained from third parties are Level 2, modeled and matrix priced are Level 3. | |||||||||||||||||||||||||||||||||
Real estate held for sale was transferred from held for investment in December 2012. The real estate has been adjusted to the lower of cost or fair value, less cost to sell. The real estate is classified as Level 2 because a purchase agreement from a third-party market participant exists for its sale. The purchase agreement is considered an observable market input. | |||||||||||||||||||||||||||||||||
Other invested assets relate to an investment in FHLB stock, certain loan receivables, and miscellaneous partnership investments. The loan receivables and partnership investments are carried at cost, and are classified as Level 3 because there is no active market and the fair value is not readily determinable. The FHLB investment is carried at cost, which approximates fair value and is classified as Level 3 due to transfer restrictions and lack of liquidity. The Company held FHLB stock of $30,000 and $10,000 at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Investment contracts include certain reserves related to deferred annuity products. These reserves are included in the account balances and future policy benefit on the Consolidated Balance Sheets. The fair values of the investment contracts, which include deferred annuities and other annuities without significant mortality risk, are determined by testing amounts payable on demand against discounted cash flows using market interest rates commensurate with the risks involved, including consideration of the Company’s own credit standing and a risk margin for noncapital market inputs. During 2013, the Company entered into a funding agreement with a balance of $500,000 and collateral of $598,671 at December 31, 2013. | |||||||||||||||||||||||||||||||||
The fair value of mortgage notes payable is the sum of the outstanding balance of the note payable plus the expected prepayment penalty due to the lender if the Company were to prepay the mortgage. The Company believes this approximates fair value, as the calculation of the prepayment penalty is based on current market interest rates and represents lost interest to the lender. The penalty is based on specific provisions provided by the lender, which is an unobservable input; therefore, the liability is classified as Level 3. | |||||||||||||||||||||||||||||||||
Changes in market conditions subsequent to year-end may cause fair values calculated subsequent to year-end to differ from the amounts presented herein. |
Financing_Receivables
Financing Receivables | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Financing Receivables | ' | ||||||||||||||||||||||||
(7) Financing Receivables | |||||||||||||||||||||||||
The Company’s financing receivables comprise mortgage loans, nontrade receivables, and loans to affiliates. Mortgage loans consist of the unpaid balance of mortgage loans on real estate. Nontrade receivables are amounts for policy or contract premiums due from the agents and broker-dealers, or amounts due from reinsurers. Loans to affiliates are loans that are intended to meet certain financial objectives of the Company, AZOA, and Allianz SE. The mortgage loans are evaluated on a collective basis for impairment unless circumstances arise that warrant individual evaluation. The nontrade receivables include some receivables evaluated on a collective basis, and some evaluated individually. The loans to affiliates are evaluated individually and do not require an allowance to be recorded as of December 31, 2013. For additional information, see note 2 for nontrade receivables, note 4 for mortgage loans, and note 17 for loans to affiliates. | |||||||||||||||||||||||||
Rollforward of Allowance for Credit Losses | |||||||||||||||||||||||||
The allowances for credit losses and recorded investment in financing receivables as of December 31 are shown below: | |||||||||||||||||||||||||
Mortgage | Nontrade | ||||||||||||||||||||||||
loans | receivables | Total | |||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||
Beginning balance | $ | 85,250 | 6,892 | 92,142 | |||||||||||||||||||||
Benefit | (18,500 | ) | (675 | ) | (19,175 | ) | |||||||||||||||||||
Ending balance | 66,750 | 6,217 | 72,967 | ||||||||||||||||||||||
Ending balance individually evaluated for impairment | 26,750 | 1,505 | 28,255 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 40,000 | 4,712 | 44,712 | |||||||||||||||||||||
Financing receivables: | |||||||||||||||||||||||||
Ending balance | $ | 6,201,275 | 28,789 | 6,230,064 | |||||||||||||||||||||
Ending balance individually evaluated for impairment | 116,750 | 1,505 | 118,255 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 6,084,525 | 27,284 | 6,111,809 | |||||||||||||||||||||
Mortgage | Nontrade | ||||||||||||||||||||||||
loans | receivables | Total | |||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||
Beginning balance | $ | 75,018 | 8,871 | 83,889 | |||||||||||||||||||||
Provision (benefit) | 10,232 | (1,979 | ) | 8,253 | |||||||||||||||||||||
Ending balance | 85,250 | 6,892 | 92,142 | ||||||||||||||||||||||
Ending balance individually evaluated for impairment | 40,250 | 1,361 | 41,611 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 45,000 | 5,531 | 50,531 | |||||||||||||||||||||
Financing receivables: | |||||||||||||||||||||||||
Ending balance | $ | 6,130,584 | 22,377 | 6,152,961 | |||||||||||||||||||||
Ending balance individually evaluated for impairment | 116,750 | 1,361 | 118,111 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 6,013,834 | 21,016 | 6,034,850 | |||||||||||||||||||||
Credit Quality Indicators | |||||||||||||||||||||||||
The Company analyzes certain financing receivables for credit risk by using specific credit quality indicators. | |||||||||||||||||||||||||
The Company has determined the loan-to-value ratio and the debt service coverage ratio are the most reliable indicators in analyzing the credit risk of its mortgage loan portfolio. The loan-to-value ratio is based on the Company’s internal valuation methodologies, including discounted cash flow analysis and comparative sales, depending on the characteristics of the property being evaluated. The debt service coverage ratio analysis is normalized to reflect a 25 year amortization schedule. | |||||||||||||||||||||||||
The loan-to-value analysis as of December 31 is shown below: | |||||||||||||||||||||||||
Commercial | Residential | Total | |||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Less than 50% | $ | 2,025,011 | 32.7 | % | $ | 578 | 100 | % | $ | 2,025,589 | 32.7 | % | |||||||||||||
50% – 60% | 1,668,987 | 26.9 | — | — | 1,668,987 | 26.9 | |||||||||||||||||||
60% – 70% | 1,622,171 | 26.2 | — | — | 1,622,171 | 26.2 | |||||||||||||||||||
70% – 80% | 477,096 | 7.7 | — | — | 477,096 | 7.7 | |||||||||||||||||||
80% – 90% | 168,964 | 2.7 | — | — | 168,964 | 2.7 | |||||||||||||||||||
90% – 100% | — | — | — | — | — | — | |||||||||||||||||||
Greater than 100% | 238,468 | 3.8 | — | — | 238,468 | 3.8 | |||||||||||||||||||
Total | $ | 6,200,697 | 100 | % | $ | 578 | 100 | % | $ | 6,201,275 | 100 | % | |||||||||||||
Commercial | Residential | Total | |||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Less than 50% | $ | 1,735,242 | 28.3 | % | $ | 1,042 | 100 | % | $ | 1,736,284 | 28.3 | % | |||||||||||||
50% – 60% | 1,859,780 | 30.3 | — | — | 1,859,780 | 30.3 | |||||||||||||||||||
60% – 70% | 1,124,262 | 18.3 | — | — | 1,124,262 | 18.3 | |||||||||||||||||||
70% – 80% | 960,158 | 15.7 | — | — | 960,158 | 15.7 | |||||||||||||||||||
80% – 90% | 205,356 | 3.4 | — | — | 205,356 | 3.3 | |||||||||||||||||||
90% – 100% | 95,890 | 1.6 | — | — | 95,890 | 1.6 | |||||||||||||||||||
Greater than 100% | 148,854 | 2.4 | — | — | 148,854 | 2.5 | |||||||||||||||||||
Total | $ | 6,129,542 | 100 | % | $ | 1,042 | 100 | % | $ | 6,130,584 | 100 | % | |||||||||||||
The debt service coverage ratio as of December 31 is shown below: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Debt service coverage ratio: | |||||||||||||||||||||||||
Greater than 1.4x | $ | 4,103,809 | 4,156,144 | ||||||||||||||||||||||
1.2x – 1.4x | 955,230 | 776,303 | |||||||||||||||||||||||
1.0x – 1.2x | 858,438 | 752,588 | |||||||||||||||||||||||
Less than 1.0x | 283,220 | 444,507 | |||||||||||||||||||||||
Total commercial mortgage loans | $ | 6,200,697 | 6,129,542 | ||||||||||||||||||||||
The Company’s nontrade receivables are analyzed for credit risk based upon the customer classification of agent or reinsurer. The nontrade receivable and allowance for credit losses by customer classification as of December 31 are shown below: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Agent | Reinsurer | Total | Agent | Reinsurer | Total | ||||||||||||||||||||
Nontrade receivables | $ | 9,681 | 19,108 | 28,789 | 9,008 | 13,369 | 22,377 | ||||||||||||||||||
Allowance for credit losses | (4,712 | ) | (1,505 | ) | (6,217 | ) | (5,531 | ) | (1,361 | ) | (6,892 | ) | |||||||||||||
Net nontrade receivables | $ | 4,969 | 17,603 | 22,572 | 3,477 | 12,008 | 15,485 | ||||||||||||||||||
Past-Due Aging Analysis | |||||||||||||||||||||||||
Aging analysis of past-due financing receivables as of December 31 is shown below: | |||||||||||||||||||||||||
Greater than | |||||||||||||||||||||||||
31–60 | 61–90 | 90 days | Total | ||||||||||||||||||||||
past due | past due | past due | past due | Current (1) | Total | ||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Mortgage loans | $ | — | — | — | — | 6,201,275 | 6,201,275 | ||||||||||||||||||
Nontrade receivables | 6,657 | 3,457 | 8,715 | 18,829 | 9,960 | 28,789 | |||||||||||||||||||
Total | $ | 6,657 | 3,457 | 8,715 | 18,829 | 6,211,235 | 6,230,064 | ||||||||||||||||||
-1 | Current amount includes all receivables 30 days or less past due. | ||||||||||||||||||||||||
Greater than | |||||||||||||||||||||||||
31–60 | 61–90 | 90 days | Total | ||||||||||||||||||||||
past due | past due | past due | past due | Current (1) | Total | ||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Mortgage loans | $ | — | — | — | — | 6,130,584 | 6,130,584 | ||||||||||||||||||
Nontrade receivables | 5,841 | 2,283 | 8,070 | 16,194 | 6,183 | 22,377 | |||||||||||||||||||
Total | $ | 5,841 | 2,283 | 8,070 | 16,194 | 6,136,767 | 6,152,961 | ||||||||||||||||||
-1 | Current amount includes all receivables 30 days or less past due. | ||||||||||||||||||||||||
As of December 31, 2013 and 2012, the Company’s financing receivables did not include any balances, which are on a nonaccrual status, classified as a troubled debt restructuring, or impaired without a corresponding allowance for credit loss. | |||||||||||||||||||||||||
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2013 | |
Goodwill | ' |
(8) Goodwill | |
There were no impairments to goodwill in 2013 or 2012. Goodwill is reviewed on an annual basis and impairment considerations are made depending on economic market conditions. |
Value_of_Business_Acquired_and
Value of Business Acquired and Other Intangible Assets | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Value of Business Acquired and Other Intangible Assets | ' | ||||||||||||
(9) Value of Business Acquired and Other Intangible Assets | |||||||||||||
VOBA at December 31 and the changes in the balance for the years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | — | — | 853 | |||||||||
Interest | 439 | 573 | 771 | ||||||||||
Amortization | (4,327 | ) | (5,218 | ) | (3,755 | ) | |||||||
Change in shadow VOBA | 3,888 | 4,645 | 2,131 | ||||||||||
Balance, end of year | $ | — | — | — | |||||||||
The net amortization of the VOBA in each of the next five years is expected to be as follows: | |||||||||||||
2014 | $ | 2,834 | |||||||||||
2015 | 2,251 | ||||||||||||
2016 | 1,703 | ||||||||||||
2017 | 803 | ||||||||||||
2018 | 830 | ||||||||||||
Intangible assets at December 31 and the changes in the balance for the years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 3,271 | 3,435 | 4,173 | |||||||||
Amortization | (1,151 | ) | (164 | ) | (738 | ) | |||||||
Balance, end of year | $ | 2,120 | 3,271 | 3,435 | |||||||||
Amortization of intangible assets in each of the next five years is expected to be as follows: | |||||||||||||
2014 | $ | 70 | |||||||||||
2015 and beyond | — | ||||||||||||
In 2013, the Company determined it is not likely to recover any value from a subsidiary trade name. Intangible amortization of $1,050 was recognized to fully impair this asset. During 2012 and 2011, there were no events or changes in circumstances that warranted recoverability testing for intangible assets. | |||||||||||||
Accumulated amortization of VOBA and other intangible assets are $249,210 and $243,732 as of December 31, 2013, and 2012, respectively. |
Deferred_Acquisition_Costs
Deferred Acquisition Costs | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Deferred Acquisition Costs | ' | ||||||||||||
(10) Deferred Acquisition Costs | |||||||||||||
DAC at December 31 and the changes in the balance for the years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 2,603,307 | 4,858,136 | 5,352,713 | |||||||||
Capitalization (1) | 812,006 | 737,390 | 952,734 | ||||||||||
Interest | 186,157 | 222,229 | 205,772 | ||||||||||
Amortization | (1,204,862 | ) | (1,643,969 | ) | (423,355 | ) | |||||||
Change in shadow DAC | 2,423,607 | (1,570,479 | ) | (1,229,728 | ) | ||||||||
Balance, end of year | $ | 4,820,215 | 2,603,307 | 4,858,136 | |||||||||
-1 | Reflects prospective adoption, in 2012, of new acquisition cost guidance. See note 2 for adoption impact. | ||||||||||||
The change in shadow DAC balances are impacted by movements in unrealized gains and losses as a result of market conditions. | |||||||||||||
The Company reviews its best estimate assumptions each year and records “unlocking” as appropriate. These reviews are based on recent changes in the organization and businesses of the Company and actual and expected performance of in-force policies. The reviews include all assumptions, including mortality, lapses, expenses, and separate account returns. The revised best estimate assumptions were applied to the current in-force policies to project future gross profits. | |||||||||||||
The pretax impact on the Company’s assets and liabilities as a result of the unlocking during 2013, 2012, and 2011 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Assets: | |||||||||||||
DAC | $ | (82,082 | ) | (63,616 | ) | 34,334 | |||||||
DSI | (20,860 | ) | (14,512 | ) | (23,621 | ) | |||||||
VOBA | 116 | (1,012 | ) | 4,651 | |||||||||
Total assets (decrease) increase | (102,826 | ) | (79,140 | ) | 15,364 | ||||||||
Liabilities: | |||||||||||||
Account balances and future policy benefit reserves | (224,074 | ) | 86,596 | (69,519 | ) | ||||||||
Unearned premiums | 2,439 | 96 | 22,885 | ||||||||||
Total liabilities (decrease) increase | (221,635 | ) | 86,692 | (46,634 | ) | ||||||||
Net increase (decrease) | 118,809 | (165,832 | ) | 61,998 | |||||||||
Deferred income tax expense (benefit) | 41,583 | (58,041 | ) | 21,700 | |||||||||
Net increase (decrease) | $ | 77,226 | (107,791 | ) | 40,298 | ||||||||
Deferred_Sales_Inducements
Deferred Sales Inducements | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Deferred Sales Inducements | ' | ||||||||||||
(11) Deferred Sales Inducements | |||||||||||||
DSI at December 31 and the changes in the balance for years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 673,944 | 1,167,736 | 1,161,568 | |||||||||
Capitalization | 131,127 | 161,828 | 299,368 | ||||||||||
Amortization | (242,605 | ) | (289,641 | ) | (93,621 | ) | |||||||
Interest | 38,936 | 43,279 | 38,892 | ||||||||||
Change in shadow DSI | 475,128 | (409,258 | ) | (238,471 | ) | ||||||||
Balance, end of year | $ | 1,076,530 | 673,944 | 1,167,736 | |||||||||
The change in shadow DSI balances are impacted by movements in unrealized gains and losses as a result of market conditions. |
Separate_Accounts_and_Annuity_
Separate Accounts and Annuity Product Guarantees | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Separate Accounts and Annuity Product Guarantees | ' | ||||||||||||||||||||||||
(12) Separate Accounts and Annuity Product Guarantees | |||||||||||||||||||||||||
Guaranteed minimums for the respective years ended December 31 are summarized as follows (note that the amounts listed are not mutually exclusive, as many products contain multiple guarantees): | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Account | Net amount | Weighted | Account | Net amount | Weighted | ||||||||||||||||||||
value | at risk | age (years) | value | at risk | age (years) | ||||||||||||||||||||
GMDB: | |||||||||||||||||||||||||
Return of premium | $ | 22,290,541 | 36,832 | 63 | $ | 19,474,339 | 101,609 | 63.3 | |||||||||||||||||
Ratchet and return of premium | 5,388,868 | 25,638 | 66.5 | 4,961,385 | 70,064 | 66.6 | |||||||||||||||||||
Ratchet and rollup | 4,861,539 | 397,864 | 69.2 | 4,675,427 | 706,453 | 69.1 | |||||||||||||||||||
Ratchet and earnings protection rider | 4,107 | 1,588 | 80.2 | 3,760 | 2,133 | 79.1 | |||||||||||||||||||
Reset | 109,406 | 616 | 76.1 | 104,916 | 1,257 | 76.1 | |||||||||||||||||||
Earnings protection rider | 308,789 | 29,115 | 67 | 293,886 | 19,861 | 65.9 | |||||||||||||||||||
Total | $ | 32,963,250 | 491,653 | $ | 29,513,713 | 901,377 | |||||||||||||||||||
GMIB: | |||||||||||||||||||||||||
Return of premium | $ | 141,847 | 506 | 71.3 | $ | 144,503 | 930 | 71.2 | |||||||||||||||||
Ratchet and return of premium | 3,110,426 | 8,818 | 68 | 3,837,990 | 59,369 | 67.2 | |||||||||||||||||||
Ratchet and rollup | 6,407,108 | 595,389 | 65.6 | 6,111,691 | 1,034,193 | 65.2 | |||||||||||||||||||
Total | $ | 9,659,381 | 604,713 | $ | 10,094,184 | 1,094,492 | |||||||||||||||||||
GMAB: | |||||||||||||||||||||||||
Five years | $ | 4,660,325 | 14,165 | 66.2 | $ | 5,550,209 | 85,207 | 65.3 | |||||||||||||||||
Ten years | 4,353 | 17 | 78.9 | 4,004 | 48 | 76.8 | |||||||||||||||||||
Target date retirement-7 year | 813,148 | 1,852 | 61.5 | 777,294 | 4,139 | 60.6 | |||||||||||||||||||
Target date retirement-10 year | 303,807 | 1,516 | 58 | 286,796 | 3,157 | 57.2 | |||||||||||||||||||
Target date with management levers | 3,402,746 | 6,573 | 59.6 | 2,467,417 | 5,411 | 59 | |||||||||||||||||||
Total | $ | 9,184,379 | 24,123 | $ | 9,085,720 | 97,962 | |||||||||||||||||||
GMWB: | |||||||||||||||||||||||||
No living benefit | $ | 546,725 | — | 68.9 | $ | 365,274 | 3,306 | 69.4 | |||||||||||||||||
Life benefit with optional reset | 1,145,784 | 103,611 | 66.6 | 1,080,566 | 166,027 | 65.9 | |||||||||||||||||||
Life benefit with automatic reset | 1,712,815 | 61,791 | 62.7 | 1,596,848 | 112,563 | 61.9 | |||||||||||||||||||
Life benefit with 8% rollup | 36,826 | 2,348 | 67.6 | 33,956 | 2,955 | 66.6 | |||||||||||||||||||
Life benefit with 10% rollup | 1,289,866 | 152,152 | 62.1 | 1,214,821 | 172,500 | 61.3 | |||||||||||||||||||
Life benefit with management levers | 10,128,398 | 455,998 | 59.7 | 7,656,036 | 463,131 | 59.3 | |||||||||||||||||||
Total | $ | 14,860,414 | 775,900 | $ | 11,947,501 | 920,482 | |||||||||||||||||||
The net amount at risk has decreased in 2013 due to an increase in market performance, which has caused decreases in certain guaranteed benefits. A significant portion of the reduction in GMAB net amount at risk is due to these benefits being paid in 2013. Account values have increased due to the growth in new business. Weighted age for GMAB and GMWB as of December 31, 2012 were adjusted to be consistent with the current year presentation. | |||||||||||||||||||||||||
At December 31, variable annuity account balances were invested in separate account funds with the following investment objectives. Balances are presented at fair value: | |||||||||||||||||||||||||
Investment type | 2013 | 2012 | |||||||||||||||||||||||
Mutual funds: | |||||||||||||||||||||||||
Bond | $ | 3,832,071 | 4,117,903 | ||||||||||||||||||||||
Domestic equity | 15,076,444 | 11,756,004 | |||||||||||||||||||||||
International equity | 2,125,261 | 1,812,473 | |||||||||||||||||||||||
Specialty | 8,814,913 | 7,025,112 | |||||||||||||||||||||||
Total mutual funds | 29,848,689 | 24,711,492 | |||||||||||||||||||||||
Money market funds | 800,839 | 868,706 | |||||||||||||||||||||||
Other | 98,249 | 90,477 | |||||||||||||||||||||||
Total | $ | 30,747,777 | 25,670,675 | ||||||||||||||||||||||
The following table summarizes the liabilities for variable contract guarantees that are reflected in the general account and shown in account balances and future policy benefit reserves on the Consolidated Balance Sheets: | |||||||||||||||||||||||||
GMDB | GMIB | GMAB | GMWB | Totals | |||||||||||||||||||||
Balance as of December 31, 2011 | $ | 80,537 | 277,775 | 623,016 | 1,016,987 | 1,998,315 | |||||||||||||||||||
Incurred guaranteed benefits | 14,880 | (25,017 | ) | 33,658 | (59,122 | ) | (35,601 | ) | |||||||||||||||||
Paid guaranteed benefits | (19,376 | ) | (6,366 | ) | (310,971 | ) | — | (336,713 | ) | ||||||||||||||||
Balance as of December 31, 2012 | 76,041 | 246,392 | 345,703 | 957,865 | 1,626,001 | ||||||||||||||||||||
Incurred guaranteed benefits | 4,608 | (75,489 | ) | (166,884 | ) | (912,093 | ) | (1,149,858 | ) | ||||||||||||||||
Paid guaranteed benefits | (12,712 | ) | (4,570 | ) | (70,846 | ) | — | (88,128 | ) | ||||||||||||||||
Balance as of December 31, 2013 | $ | 67,937 | 166,333 | 107,973 | 45,772 | 388,015 | |||||||||||||||||||
Mortgage_Notes_Payable
Mortgage Notes Payable | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Mortgage Notes Payable | ' | ||||
(13) Mortgage Notes Payable | |||||
In 2004, the Company obtained an $80,000 mortgage loan from Northwestern Mutual Life Insurance Company (Northwestern) for the Company’s headquarters. In 2005, the Company agreed to enter into a separate loan agreement with Northwestern in conjunction with the construction of an addition to the Company’s headquarters of $65,000. This loan was funded in 2006 and combined with the existing mortgage. As of December 31, 2013 and 2012, the combined loan had a balance of $99,210 and $105,858, respectively. This 20 year, fully amortizing loan has an interest rate of 5.52%, with a maturity date of August 1, 2024. The level principal and interest payments are made monthly. The loan allows for prepayment; however, it is accompanied by a make-whole provision. The proceeds of this mortgage were used to pay off a floating rate construction loan that the Company used to finance the acquisition of property for, and construction of, the Company’s headquarters. | |||||
Interest expense for all loans is $5,649, $6,007, and $6,346 in 2013, 2012, and 2011, respectively, and is presented in general and administrative expenses on the Consolidated Statements of Operations. | |||||
The future principal payments required under the Northwestern loan are as follows: | |||||
2014 | $ | 7,026 | |||
2015 | 7,424 | ||||
2016 | 7,844 | ||||
2017 | 8,288 | ||||
2018 | 8,758 | ||||
2019 and beyond | 59,870 | ||||
Total | $ | 99,210 | |||
Accident_and_Health_Claim_Rese
Accident and Health Claim Reserves | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accident and Health Claim Reserves | ' | ||||||||||||
(14) Accident and Health Claim Reserves | |||||||||||||
Accident and health claim reserves are based on estimates that are subject to uncertainty. Uncertainty regarding reserves of a given accident year is gradually reduced as new information emerges each succeeding year, thereby allowing more reliable reevaluations of such reserves. While management believes that reserves as of December 31, 2013, are appropriate, uncertainties in the reserving process could cause such reserves to develop favorably or unfavorably in the near term as new or additional information emerges. Any adjustments to reserves are reflected in the operating results of the periods in which they are made. Movements in reserves could significantly impact the Company’s future reported earnings. | |||||||||||||
Activity in the accident and health claim reserves is summarized as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at January 1, net of reinsurance recoverables of $221,718, $188,089, and $156,294, respectively | $ | 107,410 | 91,813 | 78,904 | |||||||||
Adjustment related to the reclassification of reserves from prior years | — | — | 417 | ||||||||||
Adjustment primarily related to commutation and assumption reinsurance on blocks of business | (70 | ) | (272 | ) | (216 | ) | |||||||
Incurred related to: | |||||||||||||
Current year | 54,096 | 42,876 | 32,157 | ||||||||||
Prior years | 5,359 | 8,119 | 5,752 | ||||||||||
Total incurred | 59,455 | 50,995 | 37,909 | ||||||||||
Paid related to: | |||||||||||||
Current year | 3,519 | 3,001 | 2,931 | ||||||||||
Prior years | 35,871 | 32,125 | 22,270 | ||||||||||
Total paid | 39,390 | 35,126 | 25,201 | ||||||||||
Balance at December 31, net of reinsurance recoverables of $259,829, $221,718, and $188,089, respectively | $ | 127,405 | 107,410 | 91,813 | |||||||||
Prior year incurred for 2013 reflects unfavorable claim development within the individual long-term care line of business, partially offset by favorable development within the group marketing line of business. The unfavorable development within long-term care is partially due to an update to claim continuance assumptions. Prior year incurreds for 2012 reflect unfavorable claim development in the Lloyd’s of London market (NALU) and the individual LTC line of business. Prior year incurreds for 2011 reflect unfavorable claim development primarily within the individual long-term care line of business. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2013 | |
Reinsurance | ' |
(15) Reinsurance | |
The Company primarily enters into reinsurance agreements to manage risk resulting from its life, annuity, and accident and health businesses, as well as businesses the Company has chosen to exit. | |
In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding risks under excess yearly renewal term (YRT) coverage. The Company may also enter into coinsurance agreements for the purpose of preserving capital. The Company generally retained between $1,000 and $5,000 coverage per individual life depending on the type of policy for the years ended December 31, 2013 and 2012, respectively. | |
The Company monitors the financial exposure to the reinsurers, as well as evaluates the financial strength of the reinsurers on an ongoing basis. The Company attempts to mitigate risk by arranging trust accounts or letters of credit with certain reinsurers. Reinsurance recoverables and receivables at December 31, 2013 and 2012 are covered by collateral of $3,441,677 and $3,703,239, respectively. | |
Reinsurance recoverables at December 31, 2013 and 2012 of $2,439,060 and $2,411,817, respectively, are due to reinsurance agreements the Company became party to during the 1999 acquisition of Life USA Holding, Inc. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
(16) Income Taxes | |||||||||||||
(a) Income Tax (Benefit) Expense | |||||||||||||
Total income tax (benefit) expense for the years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Income tax expense (benefit) attributable to operations: | |||||||||||||
Current tax expense (benefit) | $ | 42,854 | 280,018 | (63,316 | ) | ||||||||
Deferred tax expense (benefit) | 160,438 | (324,977 | ) | 5,441 | |||||||||
Total income tax expense (benefit) attributable to net income | 203,292 | (44,959 | ) | (57,875 | ) | ||||||||
Income tax effect on equity: | |||||||||||||
Income tax (benefit) expense allocated to stockholder’s equity: | |||||||||||||
Attributable to unrealized (losses) gains on investments | (661,574 | ) | 192,353 | 489,768 | |||||||||
Attributable to unrealized (losses) gains on postretirement obligation | (127 | ) | 95 | (19 | ) | ||||||||
Attributable to unrealized (losses) gains on foreign exchange | (889 | ) | 325 | (291 | ) | ||||||||
Total income tax effect on equity | $ | (459,298 | ) | 147,814 | 431,583 | ||||||||
(b) Components of Income Tax Expense (Benefit) | |||||||||||||
Income tax expense (benefit) computed at the statutory rate of 35% varies from income tax expense (benefit) reported on the Consolidated Statements of Operations for the respective years ended December 31 as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Income tax expense (benefit) computed at the statutory rate | $ | 260,567 | (30,570 | ) | (2,443 | ) | |||||||
Dividends-received deductions and tax-exempt interest | (32,037 | ) | (20,015 | ) | (21,415 | ) | |||||||
State income tax | (2,049 | ) | 6,559 | 4,128 | |||||||||
Release AZLPF tax | (5,829 | ) | — | (39,365 | ) | ||||||||
Accrual of tax contingency reserve | 2,571 | 2,223 | 2,573 | ||||||||||
Foreign tax, net | (12,209 | ) | (4,551 | ) | (268 | ) | |||||||
Corporate-owned life insurance | (12,933 | ) | (6,894 | ) | (790 | ) | |||||||
Penalties | 6,376 | 5,377 | — | ||||||||||
Other | (1,165 | ) | 2,912 | (295 | ) | ||||||||
Income tax expense (benefit) as reported | $ | 203,292 | (44,959 | ) | (57,875 | ) | |||||||
(c) Components of Deferred Tax Assets and Liabilities on the Consolidated Balance Sheets | |||||||||||||
Tax effects of temporary differences giving rise to the significant components of the net deferred tax asset (liability), which is included in other assets and other liabilities, respectively, on the Consolidated Balance Sheets, at December 31 are as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Policy reserves | $ | 1,995,228 | 2,441,364 | ||||||||||
Coinsurance deferred income | 1,935 | 3,906 | |||||||||||
Expense accruals | 143,170 | 141,817 | |||||||||||
Other-than-temporarily impaired assets | 16,468 | 37,186 | |||||||||||
Investment income | 236,478 | 4,270 | |||||||||||
Provision for postretirement benefits | 20,984 | 13,988 | |||||||||||
Other | 781 | 1,651 | |||||||||||
Total deferred tax assets | 2,415,044 | 2,644,182 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Deferred acquisition costs | (1,346,290 | ) | (391,805 | ) | |||||||||
Depreciation and amortization | (47,147 | ) | (41,130 | ) | |||||||||
Deferred intercompany gain | (3,710 | ) | (4,234 | ) | |||||||||
Net unrealized gains on investments and foreign exchange | (1,301,256 | ) | (2,992,467 | ) | |||||||||
Total deferred tax liabilities | (2,698,403 | ) | (3,429,636 | ) | |||||||||
Net deferred tax liabilities | $ | (283,359 | ) | (785,454 | ) | ||||||||
Although realization is not assured, the Company believes it is not necessary to establish a valuation allowance for ordinary deferred tax assets, as it is more likely than not the deferred tax assets will be realized principally through future reversals of existing ordinary taxable temporary differences and future ordinary taxable income. For deferred tax assets that are capital in nature, considering all objective evidence and the available tax planning strategy, it is more likely than not the deferred tax assets that are capital in nature will be realized and no valuation allowance is required. The amount of the ordinary and capital deferred tax assets considered realizable could be reduced in the near term if estimates of future reversals of existing taxable temporary differences and future ordinary and capital taxable income are reduced. | |||||||||||||
Income taxes paid (recovered) by the Company were $74,460, $287,491, and $(16,601) in 2013, 2012, and 2011, respectively. At December 31, 2013 and 2012, respectively, the Company had a tax payable to AZOA of $73,372 and $103,300, reported in other liabilities on the Consolidated Balance Sheets. | |||||||||||||
At December 31, 2013 and 2012, the Company had a tax receivable separate from the agreement with AZOA in the amount of $167 and $10, respectively. These amounts are for foreign taxes and taxes on a majority-owned subsidiary. | |||||||||||||
The Company’s federal income tax return is consolidated with its parent, AZOA. The Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years prior to 2007. The IRS recently conducted an examination of the consolidated returns filed by AZOA for the 2008 and 2009 tax years. The examination report was approved by the Joint Committee on Taxation in the fourth quarter of 2013, thus the examination has now concluded. There were no adjustments as a result of the examination that materially affected the Company. AZOA has not received notice from the IRS of its intent to examine any subsequent tax periods. | |||||||||||||
In accordance with the Income Taxes Topic of the Codification, the Company recognizes liabilities for certain unrecognized tax benefits. Reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Balance at January 1 | $ | 81,012 | 92,337 | ||||||||||
Additions based on tax positions related to the current year | 680 | 193 | |||||||||||
Amounts released related to tax positions taken in prior years | (11,518 | ) | (11,518 | ) | |||||||||
Balance at December 31 | $ | 70,174 | 81,012 | ||||||||||
The balance at December 31, 2013 consists of tax positions for which the deductibility is more likely than not; however, there is uncertainty with respect to the timing of the deduction. Due to the impact of deferred tax accounting, other than interest and penalty, the disallowance would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. | |||||||||||||
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in federal income tax expense. During the years ended December 31, 2013, 2012, and 2011, the Company recognized expenses of $2,571, $2,223, and $2,573, respectively, in interest and penalties. The Company had $9,952 and $7,381 for the payment of interest and penalties accrued at December 31, 2013 and 2012, respectively. |
RelatedParty_Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related-Party Transactions | ' |
(17) Related-Party Transactions | |
(a) Loans to Affiliates | |
The Company held related-party invested assets of $1,191,170 and $28,725 at December 31, 2013 and 2012, respectively, representing 1.58% and 0.04% of total invested assets for the respective years. The 2013 balance comprises the investment in the Cash Pool as discussed in note 6. The Company does not foresee a credit risk with these investments given the financial strength of Allianz SE, which currently has an A.M. Best rating of A+ and a S&P rating of AA. | |
In 2003, the Company entered into an agreement to lend Allianz SE $350,000. In 2004, the Company transferred, in the form of a dividend, a portion of the loan to AZOA with a carrying value of $90,000. In 2006, the Company transferred, in the form of a dividend, an additional portion of the loan to AZOA with a carrying amount of $130,000. The remaining loan balance was $0 and $28,725 at December 31, 2013 and 2012, respectively. Repayment of this loan started in 2009 with year-to-date principal payments received through December 31, 2013 and 2012, in the amount of $28,725 and $27,293, respectively. The interest rate is 5.18%. Interest of $1,029, $2,466, and $2,040 was earned during 2013, 2012, and 2011, respectively, and is included in interest and similar income, net on the Consolidated Statements of Operations. | |
(b) Real Estate | |
The Company has real estate investment properties leased to affiliates. The Company reported $1,462, $1,045, and $1,113 in 2013, 2012, and 2011, respectively, for rental income, which is included in interest and similar income, net on the Consolidated Statements of Operations. This property was sold in 2013. The Company has agreements to sublease office space to related parties, wholly owned by the same parent company, AZOA. The Company received rental income of $1,502, $881, and $865 in 2013, 2012, and 2011, respectively, which is included in other revenue on the Consolidated Statements of Operations. In addition, the Company leases office space from FFIC pursuant to a sublease agreement. In connection with this subleasing arrangement, the Company has incurred rent expense of $29, $26, and $26 in 2013, 2012, and 2011, respectively, which is included in general and administrative expenses on the Consolidated Statements of Operations. | |
(c) Service Fees | |
The Company incurred fees for services provided by affiliated companies of $40,096, $35,713, and $35,755 in 2013, 2012, and 2011, respectively. The Company’s liability for these expenses was $7,054 and $10,758 at December 31, 2013 and 2012, respectively, and is included in other liabilities on the Consolidated Balance Sheets. On a quarterly basis, the Company pays the amount due through cash settlement. | |
The Company earned revenues for various services provided to affiliated companies of $7,827, $5,666, and $6,410 in 2013, 2012, and 2011, respectively. The receivable (prepayment received) for these expenses was $(676) and $391 at December 31, 2013 and 2012, respectively, and is included in receivables on the Consolidated Balance Sheets. On a quarterly basis, the Company receives payment through cash settlement. | |
The Company has agreements with its affiliates Pacific Investment Management Company (PIMCO), Oppenheimer Capital LLC (OpCap), Allianz Global Distributors LLC (AGID), and with certain other related parties whereby (1) specific investment options managed by PIMCO and OpCap are made available through the Company’s separate accounts to holders of the Company’s variable annuity products, (2) the Company receives compensation for providing administrative and recordkeeping services relating to the investment options managed by PIMCO and OpCap, and (3) the Company compensates AGID for providing services in connection with the distribution of variable products that offer investment options managed by PIMCO. The agreement with AGID was terminated effective December 31, 2010. Income | |
recognized by the Company from these affiliates for distribution and in-force related costs as a result of providing investment options to the contractholders was $16,516, $15,233, and $11,341 during 2013, 2012, and 2011, respectively, which is included in fee and commission revenue on the Consolidated Statements of Operations. At December 31, 2013 and 2012, $2,780 and $2,684, respectively, were included for these fees in receivables on the Consolidated Balance Sheets. Expenses incurred to these affiliates for management of subadvised investment options were $1,060, $1,513, and $1,713 during 2013, 2012, and 2011, respectively, which are included in general and administrative expenses on the Consolidated Statements of Operations. The related payable to these affiliates was $69 and $131 at December 31, 2013 and 2012, respectively, which is included in other policyholder funds on the Consolidated Balance Sheets. | |
(d) Capital Contributions and Dividends | |
The Company paid cash dividends to AZOA of $650,000 and 150,000 in 2013 and 2012, respectively. The Company paid a dividend via forgiveness of debt to AZOA in 2011 of $50,000. | |
(e) Reinsurance | |
On October 1, 2010, the Company created a subsidiary named Allianz Annuity Company of Missouri (AAMO), a captive reinsurance entity domiciled in Missouri with a $250 capital contribution. On December 22, 2010, an additional capital contribution was made for $288,234 to AAMO. On December 31, 2010, the Company ceded to AAMO, on a combined funds withheld coinsurance basis and modified coinsurance basis, a 20% quota share of the Company’s net liability of certain variable annuity policies written directly by the Company. The impact of this reinsurance agreement is eliminated through consolidation. | |
On September 29, 2009, the Company created a subsidiary named Allianz Life of Missouri, LLC (AZLMO), a captive reinsurance entity domiciled in Missouri with a $250 capital contribution. On December 31, 2009, the Company ceded to AZLMO, on a coinsurance basis and modified coinsurance basis, a 100% quota share of the Company’s net liability of level term life insurance policies and certain universal life insurance policies written directly by the Company. A letter of credit was issued under an existing letter of credit facility in which Allianz SE is the applicant and the face amount of the letter of credit is in a qualifying trust established by AZLMO. On December 31, 2009, an additional capital contribution was made for $282,000 to AZLMO. The impact of this reinsurance agreement is eliminated through consolidation. During 2010, the Company created a subsidiary named Allianz Life Insurance Company of Missouri, which was merged with AZLMO. There was no financial impact to the Company’s consolidated financial statements as a result of the merger. | |
The Company has reinsurance recoverables and receivables due to reinsurance agreements with other affiliated entities. Total affiliated reinsurance recoverables and receivables were $233 and $311 as of December 31, 2013 and 2012, respectively, and are included in reinsurance recoverables and receivables on the Consolidated Balance Sheets. | |
(f) Line of Credit Agreement | |
In 2013, the Company entered into a line-of-credit agreement with its subsidiary, Allianz Life Insurance Company of New York, to provide liquidity, as needed. The Company’s lending capacity under the agreement is limited to 5% of the General Account admitted assets of Allianz Life Insurance Company of New York as of the preceding year-end. As of December 31, 2013, there are no amounts outstanding under the line of credit agreement. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2013 | |
Employee Benefit Plans | ' |
(18) Employee Benefit Plans | |
The Company participates in the Allianz Asset Accumulation Plan (AAAP), a defined contribution plan sponsored by Allianz of America Corporation (AZOAC). Eligible employees are immediately enrolled in the AAAP on their first day of employment. The AAAP will accept participants’ pretax, Roth 401(k), and/or after-tax contributions up to 80% of the participants’ eligible compensation, although contributions remain subject to annual limitations set by the IRS. In 2013, 2012, and 2011, the Company matched up to a maximum of 7.5% of the employees’ eligible compensation, respectively. Participants are 100% vested in the Company’s matching contribution after three years of service. | |
The AAAP administration expenses and the trust fund, including trustee fees, investment manager fees, and audit fees, are payable from the trust fund but may, at the Company’s discretion, be paid by the Company. Any legal fees are not paid from the trust fund, but are instead paid by the Company. It is the Company’s policy to fund the AAAP costs as incurred. The Company has expensed $11,657, $11,827, and $11,582 in 2013, 2012, and 2011, respectively, toward the AAAP matching contributions and administration expenses. | |
A defined group of highly compensated employees is eligible to participate in the AZOAC Deferred Compensation Plan. The purpose of the plan is to provide tax planning opportunities, as well as supplemental funds upon retirement. The plan is unfunded, meaning no assets of the Company have been segregated or defined to represent the liability for accrued assets under the plan. Employees are 100% vested upon enrollment in the plan for funds they have deferred. Employees’ funds are invested on a pay period basis and are immediately vested. Participants and the Company share the administrative fee. The accrued liability of $14,160 and $9,959 as of December 31, 2013 and 2012, respectively, is recorded in other liabilities on the Consolidated Balance Sheets. | |
The Company sponsors a nonqualified deferred compensation plan for a defined group of agents. The Company may decide to make discretionary contributions to the plan in the form and manner the Company determines. Discretionary contributions are currently determined based on production. The accrued liability of $19,822 and $12,798 as of December 31, 2013 and 2012, respectively, is recorded in other liabilities on the Consolidated Balance Sheets. | |
The Company participates in a stock-based compensation plan sponsored by Allianz SE, which awards certain employees SARs and restricted stock units (RSUs) that are tied to Allianz SE stock. Allianz SE determines the number of SARs and RSUs granted to each participant. The Company records expense equal to the change in fair value of the units during the reporting period. A change in value of $8,152, $5,653, and $1,107 was recorded in 2013, 2012, and 2011, respectively, and is included in general and administrative expenses on the Consolidated Statements of Operations. The related liability of $15,840 and $8,797 as of December 31, 2013 and 2012, respectively, is recorded in other liabilities on the Consolidated Balance Sheets. | |
The Company participates in the Employee Stock Purchase Plan sponsored by AZOAC that is designed to provide eligible employees with an opportunity to purchase American Depository Shares (ADSs) of Allianz SE at a discounted price. An aggregate amount of 250,000 Ordinary Shares is reserved for this plan. Allianz SE determines the purchase price of the share based on the closing price of an Ordinary Share of Allianz SE on the Frankfurt stock exchange on the date of each purchase. Employees are given the opportunity to purchase these shares quarterly on predetermined dates set by Allianz SE. Employees are not allowed to sell or transfer the shares for a one-yearperiod following the purchase settlement date. Effective October 26, 2009, the ADSs were delisted from the New York Stock Exchange and started trading on the U.S. over-the-counter market through the OTCQX (which is an online trading platform). The difference between the market price and the discount price, or the discount, is paid by the Company and amounted to $482, $426, and $379 in 2013, 2012, and 2011, respectively, and is recorded in other liabilities on the Consolidated Balance Sheets. The discount is reflected as taxable income in the year of purchase to employees. | |
The Company participates in the AZOAC Severance Allowance Plan. Under the AZOAC Severance Allowance Plan, all employees who are involuntarily terminated due to job elimination or reduction in force are eligible to receive benefits. The Company expensed $753, $3,571, and $601 in 2013, 2012, and 2011, respectively, toward severance payments. | |
The Company offers a life insurance benefit to eligible employees who retired on or before December 31, 1988, or who were hired before December 31, 1988, and who have at least 10 years of service when they reach age 55. The Company’s plan obligation at December 31, 2013 and 2012, was $1,054 and $1,034, respectively. This liability is included in other liabilities on the Consolidated Balance Sheets. | |
The Company’s plan assets, held in a Welfare Benefit Trust, at December 31, 2013 and 2012 were $537 and $3,711, respectively. The assets in this trust are used to prefund the Company’s self-insured medical plan. |
Statutory_Financial_Data_and_D
Statutory Financial Data and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2013 | |
Statutory Financial Data and Dividend Restrictions | ' |
(19) Statutory Financial Data and Dividend Restrictions | |
Statutory accounting practices prescribed or permitted by the Company’s state of domicile are directed toward insurer solvency and protection of policyholders. Accordingly, certain items recorded in financial statements prepared under GAAP are excluded or vary in calculation in determining statutory policyholders’ surplus and gain from operations. Currently, these items include, among others, DAC, furniture and fixtures, deferred taxes, and accident and health premiums receivable, which are more than 90 days past due, reinsurance, certain investments, and undeclared dividends to policyholders. Additionally, account balances and future policy benefit reserves calculated for statutory reporting do not include provisions for withdrawals. | |
The Company’s statutory capital and surplus reported in the statutory annual statement filed with the State of Minnesota as of December 31, 2013 and 2012, was $4,426,168 and $5,332,410, respectively. | |
The Company is required to meet minimum statutory capital and surplus requirements. The Company’s statutory capital and surplus as of December 31, 2013 and 2012 were significantly in excess of these requirements. The maximum amount of dividends that can be paid by Minnesota insurance companies to stockholders without prior approval of the Commissioner of Commerce is subject to restrictions relating to statutory earned surplus, also known as unassigned funds. Unassigned funds are determined in accordance with the accounting procedures and practices governing preparation of the statutory annual statement. In accordance with Minnesota Statutes, the Company may declare and pay from its surplus cash dividends of not more than the greater of 10% of its beginning-of-the-year statutory surplus, or the net gain from operations of the insurer, not including realized gains, for the 12-month period ending the 31st day of the next preceding year. Based on these limitations, ordinary dividends of $442,617 can be paid in 2014 without prior approval of the Commissioner of Commerce. | |
Regulatory Risk-Based Capital | |
An insurance enterprise’s state of domicile imposes minimum risk-based capital requirements that were developed by the NAIC. The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of an enterprise’s regulatory total adjusted capital to its authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. This ratio for the Company significantly exceeds required minimum thresholds as of December 31, 2013 and 2012. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
(20) Commitments and Contingencies | |||||
The Company and its subsidiaries are named as defendants in various pending or threatened legal proceedings on an ongoing basis, including four putative and certified class action proceedings, arising from the conduct of business. Two of the class action lawsuits, Negrete v. Allianz Life Insurance Company of North America (CV 05-6838CAS) and Healey v. Allianz Life Insurance Company of North America (CV 05-8908 CAS) have been certified as class actions, and have been consolidated in the United State District Court, Central District of California, Western Division. One of the other putative class action lawsuits, Jones v. Allianz Life Insurance Company of North America (CV00000145 SWW), is pending in the United States District Court, Eastern District of Arkansas, and has been stayed. The other putative class action lawsuit, Smith v. Questar Capital Corporation and Allianz Life Insurance Company of North America (12-CV-02669 SRN/TNL) is pending in the United States District Court for the District of Minnesota. The Company intends to vigorously contest the lawsuits, but is or may pursue settlement negotiations in some cases, if appropriate. The outcome of these cases is uncertain at this time, and there can be no assurance that such litigation, or any future litigation, will not have a material adverse effect on the Company and/or its subsidiaries The Company recognizes legal costs for defending itself as incurred. When evaluating litigation, claims, and assessments, management considers the nature of the litigation, progress of the case, opinions, or views of legal counsel, as well as prior experience in similar cases. Management uses this information to assess whether the amount of loss can be reasonably estimated prior to making any accruals. | |||||
The Company is contingently liable for possible future assessments under regulatory requirements pertaining to insolvencies and impairments of unaffiliated insurance companies. Provision has been made for assessments currently received and assessments anticipated for known insolvencies. | |||||
The financial services industry, including mutual funds, variable and fixed annuities, life insurance, distribution companies, and broker-dealers, is subject to close scrutiny by regulators, legislators, and the media. | |||||
Federal and state regulators, such as state insurance departments, state securities departments, the SEC, the Financial Industry Regulatory Authority (FINRA) and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning various selling practices, including suitability reviews, product exchanges, sales to seniors, and compliance with, among other things, insurance laws and securities laws. State regulators have also been investigating various practices relating to unclaimed property. In certain instances, these investigations have led to regulatory enforcement proceedings. The Company is subject to ongoing market conduct examinations and investigations by regulators, which may have a material adverse effect on the Company. Management assesses whether a loss is probable and if the amount can be reasonably estimated prior to making any accruals. | |||||
In December 2008, the SEC adopted a rule (Rule 151A) having the effect of categorizing most fixed-indexed annuity products as securities. This rule, if it had become fully operational, would subject issuers of fixed-indexed annuity products to SEC jurisdiction for purposes of registration and disclosure, advertising and marketing, suitability, and requirements as to the distribution of products through registered broker-dealers. In October 2010, several months after the Federal Court of Appeals for the District of Columbia Circuit vacated Rule 151A, the SEC withdrew the rule. As a result, issuers of fixed-indexed annuity products will not be under the SEC’s purview, rather they will remain subject to state insurance regulation as long as insurers comply with the provisions of the Harkin Amendment, passed as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It can be expected that annuity product design and sales practices will be an ongoing source of regulatory scrutiny and enforcement actions, litigation, and rulemaking. Similarly, private litigation regarding sales practices is ongoing against a number of insurance companies. | |||||
This could result in legal precedents and new industry-wide legislation, rules, and regulations that could significantly affect the financial services industry, including life insurance and annuity companies. It is unclear at this time whether any such litigation or regulatory actions will have a material adverse effect on the Company in the future. Management assesses whether the amount can be reasonably estimated prior to making any accruals. | |||||
The Company holds a minority equity interest in a certain field marketing organization. Certain provisions within the stockholder’s agreement require the Company to purchase all of the stock in the entity if and when principals of the field marketing organization choose to exercise certain available options. The exercise period for the put option is the first 120 days of each calendar year commencing on January 1, 2011, and expiring on April 30, 2014. If the put option was exercised, requiring the Company to purchase all of the stock in the entity, the total purchase price that would be paid by the Company based on current calculations would be $7,503. | |||||
The Company has private placement investments that may require a commitment of capital within the next year. The Company had capital commitments of $84,000 and $0 at December 31, 2013 and 2012, respectively. | |||||
The Company has commercial mortgage loan investments that require additional commitments of capital within the next year. The Company had capital commitments for new mortgage loans of $364,400 and $215,000 at December 31, 2013 and 2012, respectively. | |||||
The Company leases office space and certain furniture and equipment pursuant to operating leases with some leases containing renewal options and escalation clauses. Expense for all operating leases was $2,760, $2,569, and $3,065 in 2013, 2012, and 2011, respectively. The future minimum lease payments required under operating leases are as follows: | |||||
2014 | $ | 1,333 | |||
2015 | 924 | ||||
2016 | 684 | ||||
2017 | 565 | ||||
2018 | 580 | ||||
2019 and beyond | 1,116 | ||||
Total | $ | 5,202 | |||
The Company had capital leases to finance furniture and equipment for the Company’s headquarters. These leases were all terminated in 2010 and new leases were entered into in 2011. No new leases were entered into in 2012 or 2013. The cost and accumulated depreciation of the financed assets were $2,976 and $1,613 at December 31, 2013, and $2,976 and $868 at December 31, 2012, respectively, and are included in other assets. Depreciation on the financed assets was $745, $868, and $0 in 2013, 2012, and 2011, respectively. | |||||
The future minimum lease payments and present value of the net minimum lease payments are as follows: | |||||
2014 | $ | 939 | |||
2015 | 783 | ||||
2016 | — | ||||
2017 | — | ||||
2018 | — | ||||
2019 and beyond | — | ||||
Total | $ | 1,722 | |||
The Company has a service agreement (the agreement) with certain broker-dealers for a marketing support program related to the distribution of select variable insurance products. Under the agreement, the Company pays a base service fee of 0.10% on the amount of variable insurance products under management at the commencement of the agreement. An additional service fee of 0.15% is calculated on the total variable insurance products under management held in excess of this base amount. The fee is calculated on a monthly basis and is paid quarterly. Either party may terminate the agreement with a 90-day notice. Upon termination, the service fee continues to be paid from the date of termination for a period of ten years provided that the broker-dealer is not in material breach of the contract. In the event of termination, the Company has calculated its total commitment at December 31, 2013, to be $5,795 annually with a total commitment of $57,952. The calculation was based on the total variable insurance products under management as of December 31, 2013, due to the variability in estimating future assets under management (such as sales, lapse rate, and fund performance). Total expense under the agreement amounted to $5,980, $5,095, and $4,298 in 2013, 2012, and 2011, respectively. |
Capital_Structure
Capital Structure | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Capital Structure | ' | ||||||||||||
(21) Capital Structure | |||||||||||||
The Company is authorized to issue three types of capital stock, as outlined in the table below: | |||||||||||||
Authorized, | Voluntary or | ||||||||||||
issued, and | Par value, | involuntary | |||||||||||
outstanding | per share | Redemption rights | liquidation rights | ||||||||||
Common stock | 40,000,000 | $ | 1 | None | None | ||||||||
20,000,001 | |||||||||||||
20,000,001 | |||||||||||||
Preferred stock: | |||||||||||||
Class A | 200,000,000 | $ | 1 | Designated by Board | Designated by Board | ||||||||
18,903,484 | for each series issued | for each series issued | |||||||||||
18,903,484 | |||||||||||||
Class A, Series A | 8,909,195 | 1 | $35.02 per share plus | $35.02 per share plus | |||||||||
8,909,195 | an amount to yield a | an amount to yield a | |||||||||||
8,909,195 | compounded annual | compounded annual | |||||||||||
return of 6%, after | return of 6%, after | ||||||||||||
actual dividends paid | actual dividends paid | ||||||||||||
Class A, Series B | 10,000,000 | 1 | $35.02 per share plus | $35.02 per share plus | |||||||||
9,994,289 | an amount to yield a | an amount to yield a | |||||||||||
9,994,289 | compounded annual | compounded annual | |||||||||||
return of 6%, after | return of 6%, after | ||||||||||||
actual dividends paid | actual dividends paid | ||||||||||||
Class B | 400,000,000 | 1 | Designated by Board | Designated by Board | |||||||||
for each series issued | for each series issued | ||||||||||||
Holders of Class A preferred stock and of common stock are entitled to one vote per share with respect to all matters presented to or subject to the vote of shareholders. Holders of Class B preferred stock have no voting rights. All issued and outstanding shares are owned by AZOA. See note 1 for further discussion. | |||||||||||||
Each share of Class A preferred stock is convertible into one share of the Company’s common stock. The Company may redeem any or all of the Class A preferred stock at any time. Dividends will be paid to each class of stock only when declared by the BOD. In the event a dividend is declared, dividends must be paid to holders of Class A preferred stock, Class B preferred stock, and common stock, each in that order. | |||||||||||||
As discussed in notes 2 and 17, the Company carried out various capital transactions with related parties during 2013, 2012, and 2011. |
Foreign_Currency_Translation
Foreign Currency Translation | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Foreign Currency Translation | ' | ||||||||||||
(22) Foreign Currency Translation | |||||||||||||
An analysis of foreign currency translation, net of tax for the respective years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Beginning amount of cumulative translation adjustments | $ | 13,993 | 13,389 | 13,930 | |||||||||
Aggregate adjustment for the period resulting from translation adjustments | (2,539 | ) | 929 | (832 | ) | ||||||||
Amount of income tax expense (benefit) for the period related to aggregate adjustment | 889 | (325 | ) | 291 | |||||||||
Net aggregate translation included in equity | (1,650 | ) | 604 | (541 | ) | ||||||||
Ending amount of cumulative translation adjustments | $ | 12,343 | 13,993 | 13,389 | |||||||||
Canadian foreign exchange rate at end of year | 0.9412 | 1.00432 | 0.98208 |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||||||
(23) Segment Information | |||||||||||||||||||||||||
The Company has organized its principal operations into the following segments: Individual Annuities, Life, Questar, and Legacy products. | |||||||||||||||||||||||||
The Individual Annuities segment consists of fixed, fixed-indexed, and variable annuities that are provided through independent distribution channels made up of agents and registered representatives. Revenues for the Company’s fixed annuity products are primarily earned as net investment income on invested assets supporting fixed account balances, with profitability driven by the spread between net investment income earned and interest credited to account balances. Revenues for the Company’s variable annuity products are primarily earned as management and expense fees charged on underlying account balances. | |||||||||||||||||||||||||
The Life segment issues fixed-indexed universal life insurance products, as well as maintains term and whole life in-force blocks that the Company no longer sells or distributes. In 2013, the Company identified this segment as an emerging focus. The primary sources for revenue for this segment are premiums, fees, and charges that the Company receives to assume insurance related risk, in addition to earning a spread on net investment income on invested assets. | |||||||||||||||||||||||||
The Questar segment consists of two wholly owned subsidiaries, Questar Capital Corporation (Questar Capital) and Questar Asset Management, Inc. (QAM). Questar Capital is registered as a broker-dealer under the Securities Exchange Act of 1934 and operates as a retail broker-dealer. QAM provides portfolio management for clients and revenue is driven by fees received based on assets under management. Questar Capital distributes a full range of securities products, including mutual funds and variable life insurance and annuity contracts. Questar Capital also processes general securities transactions through a clearing arrangement with Pershing, LLC. | |||||||||||||||||||||||||
The Legacy business consists of closed blocks of LTC and Special Markets products. The Special Markets products include individual and group annuity and life products, including universal life and term life insurance. Although Legacy products are part of the consolidated results, the Company does not allocate additional resources to these areas other than to maintain the operational support to its current customers. | |||||||||||||||||||||||||
The Company does not maintain segregated investment portfolios for each segment. All interest and similar income, net and realized investment gains, net are allocated to the segments. Assets are only monitored at the total company level, and as such, asset disclosures by segment are not included herein. | |||||||||||||||||||||||||
Income and expense related to assets backing policyholder reserves are allocated to the segments based on policyholder reserve levels. The results of the Individual Annuity, Life, and Legacy segments also reflect allocation of income and expense related to assets backing surplus. Income and expense related to assets backing surplus are allocated to the segments based on required capital levels for each segment and are excluded from estimated gross profits used in reserve and DAC model projections. | |||||||||||||||||||||||||
Unconsolidated segment results are reconciled to consolidated statement of operations amounts in the tables below: | |||||||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Individual | Legacy | ||||||||||||||||||||||||
annuities | Life | Questar | products | Eliminations | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Net premiums and policy fees | $ | 1,050,072 | 104,715 | — | 133,586 | — | 1,288,373 | ||||||||||||||||||
Interest and similar income, net | 3,464,951 | 71,125 | (16 | ) | 56,057 | — | 3,592,117 | ||||||||||||||||||
Change in fair value of assets and liabilities | 843,121 | 77,920 | — | 224 | — | 921,265 | |||||||||||||||||||
Realized investment gains, net | 172,940 | 2,227 | 8 | 13,122 | — | 188,297 | |||||||||||||||||||
Fee, commission, and other revenue | 239,692 | 583 | 93,485 | 6,207 | (33,188 | ) | 306,779 | ||||||||||||||||||
Total revenue (loss) | 5,770,776 | 256,570 | 93,477 | 209,196 | (33,188 | ) | 6,296,831 | ||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||
Net benefits and expenses | 3,378,366 | 180,923 | — | 144,730 | — | 3,704,019 | |||||||||||||||||||
General and administrative and commission | 1,408,107 | 136,417 | 110,633 | 19,666 | (33,188 | ) | 1,641,635 | ||||||||||||||||||
Change in deferred acquisition costs, net | 264,068 | (71,632 | ) | — | 14,263 | — | 206,699 | ||||||||||||||||||
Total benefits and expenses | 5,050,541 | 245,708 | 110,633 | 178,659 | (33,188 | ) | 5,552,353 | ||||||||||||||||||
Pretax (loss) income | $ | 720,235 | 10,862 | (17,156 | ) | 30,537 | — | 744,478 | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Individual | Legacy | ||||||||||||||||||||||||
annuities | Life | Questar | products | Eliminations | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Net premiums and policy fees | $ | 821,192 | 93,795 | — | 134,170 | — | 1,049,157 | ||||||||||||||||||
Interest and similar income, net | 3,514,953 | 67,509 | (20 | ) | 49,964 | — | 3,632,406 | ||||||||||||||||||
Change in fair value of assets and liabilities | (169,234 | ) | 12,125 | — | (170 | ) | — | (157,279 | ) | ||||||||||||||||
Realized investment gains, net | 225,246 | 1,387 | — | 1,068 | — | 227,701 | |||||||||||||||||||
Fee, commission, and other revenue | 189,120 | 295 | 72,917 | 7,594 | (29,220 | ) | 240,706 | ||||||||||||||||||
Total revenue (loss) | 4,581,277 | 175,111 | 72,897 | 192,626 | (29,220 | ) | 4,992,691 | ||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||
Net benefits and expenses | 2,656,502 | 92,872 | — | 140,829 | — | 2,890,203 | |||||||||||||||||||
General and administrative and commission | 1,300,668 | 118,602 | 90,580 | 24,849 | (29,220 | ) | 1,505,479 | ||||||||||||||||||
Change in deferred acquisition costs, net | 729,277 | (58,368 | ) | — | 13,441 | — | 684,350 | ||||||||||||||||||
Total benefits and expenses | 4,686,447 | 153,106 | 90,580 | 179,119 | (29,220 | ) | 5,080,032 | ||||||||||||||||||
Pretax (loss) income | $ | (105,170 | ) | 22,005 | (17,683 | ) | 13,507 | — | (87,341 | ) | |||||||||||||||
Year ended December 31, 2011 | |||||||||||||||||||||||||
Individual | Legacy | ||||||||||||||||||||||||
annuities | Life | Questar | products | Eliminations | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Net premiums and policy fees | $ | 705,258 | 84,421 | — | 136,516 | — | 926,195 | ||||||||||||||||||
Interest and similar income, net | 3,418,279 | 58,941 | (39 | ) | 42,835 | — | 3,520,016 | ||||||||||||||||||
Change in fair value of assets and liabilities | (198,571 | ) | (6,490 | ) | — | (506 | ) | — | (205,567 | ) | |||||||||||||||
Realized investment gains, net | 110,814 | 1,537 | — | 1,042 | — | 113,393 | |||||||||||||||||||
Fee, commission, and other revenue | 149,516 | 55 | 69,951 | 8,215 | (5,552 | ) | 222,185 | ||||||||||||||||||
Total revenue (loss) | 4,185,296 | 138,464 | 69,912 | 188,102 | (5,552 | ) | 4,576,222 | ||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||
Net benefits and expenses | 3,535,771 | 74,599 | — | 114,422 | — | 3,724,792 | |||||||||||||||||||
General and administrative and commission | 1,418,280 | 74,851 | 87,050 | 18,934 | (5,552 | ) | 1,593,563 | ||||||||||||||||||
Change in deferred acquisition costs, net | (729,330 | ) | (22,646 | ) | — | 16,825 | — | (735,151 | ) | ||||||||||||||||
Total benefits and expenses | 4,224,721 | 126,804 | 87,050 | 150,181 | (5,552 | ) | 4,583,204 | ||||||||||||||||||
Pretax (loss) income | $ | (39,425 | ) | 11,660 | (17,138 | ) | 37,921 | — | (6,982 | ) | |||||||||||||||
Changes_in_and_Reclassificatio
Changes in and Reclassifications from Accumulated Other Comprehensive Income (AOCI) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Changes in and Reclassifications from Accumulated Other Comprehensive Income (AOCI) | ' | ||||||||||||||||||||||||
(24) Changes in and Reclassifications from Accumulated Other Comprehensive Income (AOCI) | |||||||||||||||||||||||||
Changes in AOCI by component consist of the following: | |||||||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Net gain | |||||||||||||||||||||||||
Net | (loss) | Foreign | Pension and | ||||||||||||||||||||||
unrealized | OTTI | on cash flow | currency | postretirement | |||||||||||||||||||||
gain on | losses in | hedging | translation | plan | |||||||||||||||||||||
securities | OCI | instruments | adjustments | adjustments | Total AOCI | ||||||||||||||||||||
Beginning balance | $ | 2,206,473 | 11,313 | 1,463 | 13,993 | (337 | ) | 2,232,905 | |||||||||||||||||
OCI before reclassifications | (1,151,346 | ) | (6,431 | ) | (443 | ) | (1,650 | ) | 189 | (1,159,681 | ) | ||||||||||||||
Amounts reclassified from AOCI | (74,350 | ) | 3,932 | — | — | (22 | ) | (70,440 | ) | ||||||||||||||||
Net OCI | (1,225,696 | ) | (2,499 | ) | (443 | ) | (1,650 | ) | 167 | (1,230,121 | ) | ||||||||||||||
Ending balance | $ | 980,777 | 8,814 | 1,020 | 12,343 | (170 | ) | 1,002,784 | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Net gain | |||||||||||||||||||||||||
Net | (loss) | Foreign | Pension and | ||||||||||||||||||||||
unrealized | OTTI | on cash flow | currency | postretirement | |||||||||||||||||||||
gain on | losses in | hedging | translation | plan | |||||||||||||||||||||
securities | OCI | instruments | adjustments | adjustments | Total AOCI | ||||||||||||||||||||
Beginning balance | $ | 1,871,918 | 3,533 | 3,226 | 13,389 | (111 | ) | 1,891,955 | |||||||||||||||||
OCI before reclassifications | 484,260 | 8,671 | (1,763 | ) | 604 | (210 | ) | 491,562 | |||||||||||||||||
Amounts reclassified from AOCI | (149,705 | ) | (891 | ) | — | — | (16 | ) | (150,612 | ) | |||||||||||||||
Net OCI | 334,555 | 7,780 | (1,763 | ) | 604 | (226 | ) | 340,950 | |||||||||||||||||
Ending balance | $ | 2,206,473 | 11,313 | 1,463 | 13,993 | (337 | ) | 2,232,905 | |||||||||||||||||
Reclassifications from AOCI consist of the following: | |||||||||||||||||||||||||
Amount Reclassified | Affected line item | ||||||||||||||||||||||||
from AOCI | |||||||||||||||||||||||||
December 31, | in the consolidated | ||||||||||||||||||||||||
AOCI | 2013 | 2012 | statement of operations | ||||||||||||||||||||||
Net unrealized gain on securities: | |||||||||||||||||||||||||
Available-for-sale securities | $ | 114,385 | 230,316 | Realized investment gains, net | |||||||||||||||||||||
(40,035 | ) | (80,611 | ) | Income tax expense (benefit) | |||||||||||||||||||||
74,350 | 149,705 | Net income (loss) | |||||||||||||||||||||||
OTTI Losses in OCI: | |||||||||||||||||||||||||
Other than temporary impairments | (6,049 | ) | 1,371 | Realized investment gains, net | |||||||||||||||||||||
2,117 | (480 | ) | Income tax expense (benefit) | ||||||||||||||||||||||
(3,932 | ) | 891 | Net income (loss) | ||||||||||||||||||||||
Pension and other postretirement plan adjustments | 34 | 25 | General and administrative expenses | ||||||||||||||||||||||
Amortization of actuarial gains (losses) | (12 | ) | (9 | ) | Income tax expense (benefit) | ||||||||||||||||||||
22 | 16 | Net income (loss) | |||||||||||||||||||||||
Total amounts reclassified from AOCI | $ | 70,440 | 150,612 | Total net income (loss) | |||||||||||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events | ' |
(25) Subsequent Events | |
No material subsequent events have occurred since December 31, 2013 through March 25, 2014 that require adjustment to the financial statements. |
Summary_of_Investments_Other_t
Summary of Investments - Other than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Investments - Other than Investments in Related Parties | ' | ||||||||||||
Schedule I | |||||||||||||
ALLIANZ LIFE INSURANCE COMPANY | |||||||||||||
OF NORTH AMERICA AND SUBSIDIARIES | |||||||||||||
Summary of Investments – Other than Investments in Related Parties | |||||||||||||
December 31, 2013 | |||||||||||||
(In thousands) | |||||||||||||
Type of investment | Cost (1) | Fair value | Amount at | ||||||||||
which shown | |||||||||||||
in the | |||||||||||||
consolidated | |||||||||||||
balance sheets | |||||||||||||
Fixed-maturity securities: | |||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||
U.S. government | $ | 1,103,739 | 1,158,859 | 1,158,859 | |||||||||
Agencies not backed by the full faith and credit of the U.S. government | 480,981 | 511,829 | 511,829 | ||||||||||
States and political subdivisions | 4,916,086 | 4,958,360 | 4,958,360 | ||||||||||
Foreign government | 341,223 | 365,234 | 365,234 | ||||||||||
Public utilities | 4,692,512 | 5,136,210 | 5,136,210 | ||||||||||
Corporate securities | 39,446,124 | 41,676,852 | 41,676,852 | ||||||||||
Mortgage-backed securities | 11,668,499 | 12,525,293 | 12,525,293 | ||||||||||
Collateralized mortgage obligations | 12,557 | 14,212 | 14,212 | ||||||||||
Collateralized debt obligations | 44,687 | 56,873 | 56,873 | ||||||||||
Securities held under forward commitments | — | — | — | ||||||||||
Total fixed-maturity securities, available-for-sale | 62,706,408 | 66,403,722 | 66,403,722 | ||||||||||
Fixed-maturity securities, trading: | |||||||||||||
U.S. government | — | — | — | ||||||||||
Agencies not backed by the full faith and credit of the U.S. government | — | — | — | ||||||||||
States and political subdivisions | — | — | — | ||||||||||
Foreign government | — | — | — | ||||||||||
Public utilities | — | — | — | ||||||||||
Corporate securities | — | — | — | ||||||||||
Mortgage-backed securities | — | — | — | ||||||||||
Total fixed-maturity securities, trading | — | — | — | ||||||||||
Fixed-maturity securities, held-to-maturity: | |||||||||||||
Collateralized debt obligations | 220,642 | 219,387 | 220,642 | ||||||||||
Corporate securities | 110 | 129 | 110 | ||||||||||
Total fixed-maturity securities, held-to-maturity | 220,752 | 219,516 | 220,752 | ||||||||||
Total fixed-maturity securities | 62,927,160 | 66,623,238 | 66,624,474 | ||||||||||
Equity securities: | |||||||||||||
Equity securities, available-for-sale: | |||||||||||||
Common stocks: | |||||||||||||
Industrial and miscellaneous | 29,112 | 29,112 | 29,112 | ||||||||||
Equity securities, trading: | |||||||||||||
Common stocks: | |||||||||||||
Industrial and miscellaneous | 209,978 | 227,822 | 227,822 | ||||||||||
Total equity securities | 239,090 | $ | 256,934 | 256,934 | |||||||||
Other investments: | |||||||||||||
Mortgage loans on real estate, net | 6,134,525 | 6,134,525 | |||||||||||
Short-term securities | 7,547 | 7,547 | |||||||||||
Derivatives | 831,707 | 831,707 | |||||||||||
Real estate | — | — | |||||||||||
Loans to affiliates | 1,191,170 | 1,191,170 | |||||||||||
Policy loans | 158,217 | 158,217 | |||||||||||
Acquired loans | 205,131 | 205,131 | |||||||||||
Other invested assets | 50,046 | 50,046 | |||||||||||
Total other investments | 8,578,343 | 8,578,343 | |||||||||||
Total investments | $ | 71,744,593 | $ | 75,459,751 | |||||||||
(1) | Original cost of equity securities and, as to fixed-maturities, original cost reduced by repayments and adjusted for amortization of premiums, accrual discounts, or impairments. |
Supplementary_Insurance_Inform
Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information | ' | ||||||||||||||||||||||||||||||||||||||||||||
Schedule II | |||||||||||||||||||||||||||||||||||||||||||||
ALLIANZ LIFE INSURANCE COMPANY | |||||||||||||||||||||||||||||||||||||||||||||
OF NORTH AMERICA AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information | |||||||||||||||||||||||||||||||||||||||||||||
As of and for the years ended December 31, 2013, 2012, and 2011 | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||
December 31 | Year ended December 31 | ||||||||||||||||||||||||||||||||||||||||||||
Deferred | Deferred | Account | Unearned | Policy and | Net premium | Interest and | Net | Net change | Net change | Other | |||||||||||||||||||||||||||||||||||
acquisition | sales | balances | premiums | contract | and policy fees | similar | benefits | in deferred | in policy | operating | |||||||||||||||||||||||||||||||||||
costs | inducements | and | claims | income, net | sales | acquisition | expenses | ||||||||||||||||||||||||||||||||||||||
future policy | inducements* | costs** | |||||||||||||||||||||||||||||||||||||||||||
benefit | |||||||||||||||||||||||||||||||||||||||||||||
reserves | |||||||||||||||||||||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||||||||||||||
Annuities | $ | 4,415,572 | 1,072,742 | 72,954,916 | 24,392 | — | 1,050,072 | 3,464,952 | 3,304,991 | 73,375 | 264,068 | 1,374,919 | |||||||||||||||||||||||||||||||||
Life | 345,008 | 3,788 | 1,843,616 | 57,647 | 3,220 | 104,715 | 71,125 | 181,756 | (833 | ) | (71,632 | ) | 136,417 | ||||||||||||||||||||||||||||||||
Questar | — | — | — | — | — | — | (16 | ) | — | — | — | 110,633 | |||||||||||||||||||||||||||||||||
Legacy | 59,635 | — | 3,326,680 | 53,600 | 412,889 | 133,586 | 56,056 | 144,730 | — | 14,263 | 19,666 | ||||||||||||||||||||||||||||||||||
$ | 4,820,215 | 1,076,530 | 78,125,212 | 135,639 | 416,109 | 1,288,373 | 3,592,117 | 3,631,477 | 72,542 | 206,699 | 1,641,635 | ||||||||||||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||||||||||||||||||||||
Annuities | $ | 2,289,260 | 670,988 | 70,534,455 | 294 | — | 821,192 | 3,514,953 | 2,571,623 | 84,879 | 729,277 | 1,278,880 | |||||||||||||||||||||||||||||||||
Life | 240,192 | 2,956 | 1,493,372 | 32,327 | 3,913 | 93,795 | 67,509 | 93,390 | (518 | ) | (58,368 | ) | 111,170 | ||||||||||||||||||||||||||||||||
Questar | — | — | — | — | — | — | (20 | ) | — | — | — | 90,580 | |||||||||||||||||||||||||||||||||
Legacy | 73,855 | — | 3,182,713 | 56,262 | 354,819 | 134,170 | 49,964 | 140,829 | — | 13,441 | 24,849 | ||||||||||||||||||||||||||||||||||
$ | 2,603,307 | 673,944 | 75,210,540 | 88,883 | 358,732 | 1,049,157 | 3,632,406 | 2,805,842 | 84,361 | 684,350 | 1,505,479 | ||||||||||||||||||||||||||||||||||
2011:00:00 | |||||||||||||||||||||||||||||||||||||||||||||
Annuities | $ | 4,559,208 | 1,165,125 | 70,651,879 | 872 | 682 | 705,258 | 3,418,279 | 3,778,871 | (243,100 | ) | (729,330 | ) | 1,418,231 | |||||||||||||||||||||||||||||||
Life | 211,633 | 2,611 | 1,289,507 | 27,569 | 3,886 | 84,421 | 58,941 | 76,137 | (1,538 | ) | (22,646 | ) | 69,361 | ||||||||||||||||||||||||||||||||
Questar | — | — | — | — | — | — | (39 | ) | — | — | — | 87,037 | |||||||||||||||||||||||||||||||||
Legacy | 87,295 | — | 3,056,520 | 57,586 | 289,441 | 136,516 | 42,835 | 114,422 | — | 16,825 | 18,934 | ||||||||||||||||||||||||||||||||||
$ | 4,858,136 | 1,167,736 | 74,997,906 | 86,027 | 294,009 | 926,195 | 3,520,016 | 3,969,430 | (244,638 | ) | (735,151 | ) | 1,593,563 | ||||||||||||||||||||||||||||||||
* | See note 10 for aggregate gross amortization of deferred sales inducements. | ||||||||||||||||||||||||||||||||||||||||||||
** | See note 9 for aggregate gross amortization of deferred acquisition costs. | ||||||||||||||||||||||||||||||||||||||||||||
See accompanying report of independent registered public accounting firm. |
Reinsurance1
Reinsurance | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Reinsurance | ' | ||||||||||||||||||||
Schedule III | |||||||||||||||||||||
ALLIANZ LIFE INSURANCE COMPANY | |||||||||||||||||||||
OF NORTH AMERICA AND SUBSIDIARIES | |||||||||||||||||||||
Reinsurance | |||||||||||||||||||||
Years ended December 31, 2013, 2012, and 2011 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Years ended | Direct | Ceded | Assumed | Net | Percentage | ||||||||||||||||
amount | to other | from other | amount | of amount | |||||||||||||||||
companies | companies | assumed | |||||||||||||||||||
to net | |||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||
Life insurance in force | $ | 26,107,972 | 17,815,125 | 80,931 | 8,373,778 | 1 | % | ||||||||||||||
Premiums and policy fees: | |||||||||||||||||||||
Life | $ | 149,803 | 42,857 | 606 | 107,552 | 0.6 | % | ||||||||||||||
Annuities | 1,046,313 | (1,966 | ) | (468 | ) | 1,047,811 | — | ||||||||||||||
Accident and health | 184,288 | 78,876 | 27,598 | 133,010 | 20.7 | ||||||||||||||||
Total premiums and policy fees | $ | 1,380,404 | 119,767 | 27,736 | 1,288,373 | 2.2 | % | ||||||||||||||
December 31, 2012: | |||||||||||||||||||||
Life insurance in force | $ | 24,257,515 | 16,420,252 | 91,346 | 7,928,609 | 1.2 | % | ||||||||||||||
Premiums and policy fees: | |||||||||||||||||||||
Life | $ | 138,180 | 42,900 | 851 | 96,131 | 0.9 | % | ||||||||||||||
Annuities | 819,359 | 27 | (318 | ) | 819,014 | — | |||||||||||||||
Accident and health | 189,659 | 81,257 | 25,610 | 134,012 | 19.1 | ||||||||||||||||
Total premiums and policy fees | $ | 1,147,198 | 124,184 | 26,143 | 1,049,157 | 2.5 | % | ||||||||||||||
December 31, 2011: | |||||||||||||||||||||
Life insurance in force | $ | 22,944,148 | 14,794,998 | 94,733 | 8,243,883 | 1.1 | % | ||||||||||||||
Premiums and policy fees: | |||||||||||||||||||||
Life | $ | 129,223 | 42,649 | 878 | 87,452 | 1 | % | ||||||||||||||
Annuities | 701,350 | (2,116 | ) | (442 | ) | 703,024 | (0.1 | ) | |||||||||||||
Accident and health | 204,838 | 91,457 | 22,338 | 135,719 | 16.5 | ||||||||||||||||
Total premiums and policy fees | $ | 1,035,411 | 131,990 | 22,774 | 926,195 | 2.5 | % | ||||||||||||||
The Life and Annuities categories above are prescribed splits based on product and will differ from the results of the Life and Individual Annuity segments. | |||||||||||||||||||||
See accompanying report of independent registered public accounting firm. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Basis of Presentation | ' | ||||||||
(a) Basis of Presentation | |||||||||
The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities. The accounts of the Company’s primary subsidiary, Allianz Life Insurance Company of New York, and all other subsidiaries have been consolidated. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||
Use of Estimates | ' | ||||||||
(b) Use of Estimates | |||||||||
The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital markets, and asset valuations could cause actual results to differ from the estimates used in the Consolidated Financial Statements. Such changes in estimates are recorded in the period they are determined. | |||||||||
Investment Products and Universal Life Business | ' | ||||||||
(c) Investment Products and Universal Life Business | |||||||||
Investment products consist primarily of fixed, variable, and deferred annuity products. Premium receipts are reported as deposits to the contractholders’ accounts. Policy fees on the Consolidated Statements of Operations represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products and universal life insurance. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Amounts assessed that represent compensation to the Company for services to be provided in future periods are not earned in the period assessed. Such amounts are reported as unearned premiums, which include unearned revenue reserves (URR), and are recognized in operations over the period benefited using the same assumptions and factors used to amortize capitalized acquisition costs. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Derivatives embedded in fixed-indexed, variable, and certain life products are recorded at fair value and changes in value are included in change in reserves at fair value on the Consolidated Statements of Operations. Benefits consist of interest credited to contractholders’ accounts and claims incurred in excess of the contractholders’ account balance and are included in net interest credited to account values and policyholder benefits, respectively, on the Consolidated Statements of Operations. | |||||||||
During 2013, the Company began offering a variable annuity product that combines a separate account option with a general account option that is similar to a fixed-indexed annuity. The Company has elected the fair value option to account for the entire insurance contract liability and the mutual fund assets backing the separate account. The insurance contracts’ reserves are reported in account balances and future policy benefit reserves and the mutual fund assets backing the separate account are reported in equity securities, trading on the Consolidated Balance Sheets. Electing the fair value option for an insurance contract liability requires that the Company account for that liability as a financial instrument and also requires that acquisition costs be recognized immediately in expense. | |||||||||
Life and Accident and Health Insurance | ' | ||||||||
(d) Life and Accident and Health Insurance | |||||||||
Premiums on traditional life products are recognized as earned when due. Benefits and expenses are associated with earned premiums so as to result in recognition of profits over the life of the contracts. This association is accomplished by establishing provisions for future policy benefits and deferral and amortization of related acquisition costs. | |||||||||
Accident and health premiums are recognized as earned on a pro rata basis over the risk coverage periods. Benefits and expenses are recognized as incurred. | |||||||||
Goodwill | ' | ||||||||
(e) Goodwill | |||||||||
Goodwill is the excess of the amount paid to acquire a company over the fair value of its tangible net assets, value of business acquired (VOBA), other identifiable intangible assets, and valuation adjustments (such as impairments), if any. Goodwill is reported in other assets on the Consolidated Balance Sheets. | |||||||||
Goodwill is evaluated annually for impairment at the reporting unit level, which is one level below an operating segment. Goodwill of a reporting unit is also tested for impairment on an interim basis if a triggering event occurs, such as a significant adverse change in the business climate or a decision to sell or dispose of a business unit. | |||||||||
Value of Business Acquired and Other Intangible Assets | ' | ||||||||
(f) Value of Business Acquired and Other Intangible Assets | |||||||||
The value of insurance in-force purchased is recorded as the VOBA and is reported in other assets on the Consolidated Balance Sheets. The initial value was determined by an actuarial study using the present value of future profits in calculating the value of the insurance purchased. An accrual of interest is added to the unamortized balance using the rates credited to the policyholder accounts. The balance is amortized in relation to the present value of expected future gross profits in the same manner as DAC. The amortization period is expected to be approximately 20 years from the date the business was acquired; however, the Company continually monitors this assumption. If estimated gross profits differ from expectations, the amortization of VOBA is adjusted on a retrospective or prospective basis, as appropriate. | |||||||||
Adjustments to VOBA are made to reflect the estimated corresponding impact on the present value of expected future gross profits from unrealized gains and losses on available-for-sale investments used to support policyholder liabilities (commonly known as shadow VOBA). These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. | |||||||||
The recoverability of VOBA is evaluated annually, or earlier if factors warrant, based on estimates of future earnings related to the insurance in-force purchased. If the existing insurance liabilities, together with the present value of future net cash flows from the blocks of business acquired, are not sufficient to recover VOBA, the difference, if any, is charged to expense through general and administrative expenses within the Consolidated Statements of Operations. | |||||||||
Intangible assets are identified by the Company in accordance with the Intangibles – Goodwill and Other Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification), which requires an identifiable intangible asset to be recognized apart from goodwill when it arises from contractual or legal rights or it is capable of being separated and valued when sold, transferred, licensed, rented, or exchanged. The Company determines the useful life and amortization period for each intangible asset identified at acquisition, and continually monitors these assumptions. An intangible asset with a determinable life is amortized over that period, while an intangible asset with an indefinite useful life is not amortized. | |||||||||
The Company’s intangible assets include trademarks, agent lists, and noncompete agreements that were acquired as a result of the Company’s ownership in field marketing organizations, and are reported in other assets on the Consolidated Balance Sheets. These intangible assets were assigned values using the present value of projected future cash flows and are generally amortized over five years using the straight-line method. Also included in the Company’s intangible assets are the trade name and service mark of a broker-dealer acquired during 2005, and state insurance licenses acquired in 2007. | |||||||||
Recoverability of the value of the amortizing intangible assets is assessed whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of the value of the nonamortizing intangible assets is assessed annually or earlier if events or changes in circumstances indicate the carrying amount may not be recoverable. | |||||||||
Deferred Acquisition Costs | ' | ||||||||
(g) Deferred Acquisition Costs | |||||||||
Acquisition costs consist of commissions and other incremental costs that are directly related to the successful acquisition of insurance contracts. Acquisition costs are deferred to the extent recoverable from future policy revenues and gross profits. However, acquisition costs associated with insurance contracts recorded under the fair value option are not deferred as guidance related to the fair value option requires that transaction costs are recorded immediately as an expense. For interest-sensitive products and variable annuity contracts, acquisition costs are amortized in relation to the present value of expected future gross profits from investment margins and mortality, morbidity, and expense charges. Acquisition costs for accident and health insurance policies are deferred and amortized over the lives of the policies in the same manner as premiums are earned. For traditional life and group life products, such costs are amortized over the projected earnings pattern of the related policies using the same actuarial assumptions used in computing future policy benefit reserves. DAC is reviewed for recoverability, at least annually, and adjusted when necessary. Recoverability is evaluated separately for fixed annuities, variable annuities, and life insurance products. Evaluating recoverability is a two-step process where current policy year issues are evaluated, and then in-force policies are evaluated. Before assessing recoverability, DAC is capped, if necessary, such that the balance cannot exceed the original capitalized costs plus interest. | |||||||||
Adjustments to DAC are made to reflect the corresponding impact on the present value of expected future gross profits from unrealized gains and losses on available-for-sale investments used to support policyholder liabilities (commonly known as shadow DAC). These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. | |||||||||
Changes in assumptions can have an impact on the amount of DAC reported for annuity and life insurance products and their related amortization patterns. In the event experience differs from assumptions or assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense, which is referred to as DAC unlocking. In general, increases in the estimated investment spreads and fees result in increased expected future profitability and may lower the rate of DAC amortization, while increases in costs of product guarantees, and lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization. | |||||||||
The Company formally evaluates the appropriateness of the best-estimate assumptions on an annual basis. If the economic environment or policyholder behavior changes quickly and substantially, assumptions will be reviewed more frequently to affirm best estimates. Any resulting DAC unlocking is reflected prospectively in change in DAC, net on the Consolidated Statements of Operations. | |||||||||
Adjustments may also be made to the estimated gross profits related to DAC that correspond to deferred annuities and universal life products for investment activity, such as write-downs on other-than-temporarily impaired fixed-maturity securities, and realized gains and losses. Management action may include assumption changes in the DAC models, such as adjustments to expected future gross profits used, as well as in-force management action such as crediting rate changes or index rate cap adjustments. This approach applies to fixed-maturity securities purchased at investment grade only and not noninvestment-grade items that were purchased with other yield considerations. See further discussion of DAC unlocking in note 10. | |||||||||
The Company assesses internal replacements on insurance contracts to determine whether such modifications significantly change the contract terms. An internal replacement represents a modification in product benefits, features, rights, or coverages that occurs by the exchange of an in-force insurance contract for a new insurance contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. If the modification substantially changes the contract, the remaining DAC on the original contract is immediately expensed and any new DAC on the replacement contract is deferred. If the contract modification does not substantially change the contract, DAC amortization on the original contract continues and any new acquisition costs associated with the modification are immediately expensed. | |||||||||
Deferred Sales Inducements | ' | ||||||||
(h) Deferred Sales Inducements | |||||||||
Sales inducements are product features that enhance the investment yield to the contractholder on the contract. The Company offers two types of sales inducements on certain universal life and annuity contracts. The first type, an immediate bonus, increases the account value at inception, and the second type, a persistency bonus, increases the account value at the end of a specified period. | |||||||||
Annuity sales inducements are deferred when credited to contractholders and life sales inducements are deferred and recognized as part of the liability for policy benefits. Deferred sales inducements DSI are reported in other assets in the Consolidated Balance Sheets. They are amortized over the expected life of the contract in a manner similar to DAC and are reviewed annually for recoverability. DSI capitalization and amortization are recorded in policyholder benefits on the Consolidated Statements of Operations. | |||||||||
Adjustments to DSI are made to reflect the estimated corresponding impact on the present value of expected future gross profits from unrealized gains and losses on available-for-sale investments used to support policyholder liabilities, commonly known as shadow DSI. These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. | |||||||||
Adjustments may also be made to DSI related to deferred annuities for investment activity, such as write-downs on other-than-temporarily impaired fixed-maturity securities, and realized gains and losses. Management action may include assumption changes in the DSI models, such as adjustments to expected future gross profits used, as well as policyholder changes, such as credited rate changes. This approach applies to fixed-maturity securities purchased at investment grade only and not noninvestment grade items that were purchased with other yield considerations. | |||||||||
Account Balances and Future Policy Benefit Reserves | ' | ||||||||
(i) Account Balances and Future Policy Benefit Reserves | |||||||||
Policy and contract account balances for interest-sensitive products, which include universal life and fixed deferred annuities, are generally carried at accumulated contract values. For fixed-indexed annuity products, the policyholder obligation is divided into two parts – one part representing the value of the underlying base contract (host contract) and the second part representing the fair value of the expected index benefit over the life of the contract. The host contract is valued using principles consistent with similar deferred annuity contracts without an index benefit. The index benefit is valued at fair value using current capital market assumptions, such as index and volatility, to estimate future index levels. The index benefit valuation is also dependent upon estimates of future policyholder behavior. The Company must include provisions for the Company’s own credit risk and for risk that the Company’s assumptions about policyholder activity could differ from actual experience. The fair value determination of the index benefit is sensitive to the economic market and interest rate environment, as it is discounted at current market interest rates. There is volatility in this liability due to these external market sensitivities. | |||||||||
Certain two-tier fixed annuity products provide additional benefits payable upon annuitization for period-certain and life-contingent payout options. An additional annuitization reserve is accrued using assumptions consistent with those used in estimating gross profits for purposes of amortizing DAC. | |||||||||
Policy and contract account balances for variable annuity products are carried at accumulated contract values. Future policy benefit reserves for any death and income benefits that may exceed the accumulated contract values are established using a range of economic scenarios and are accrued for using assumptions consistent with those used in estimating gross profits for purposes of amortizing DAC. Future policy benefit reserves for accumulation and withdrawal benefits that may exceed account values are established using capital market assumptions, such as index and volatility, along with estimates of future policyholder behavior. | |||||||||
Future policy benefit reserves on traditional life products are computed by the net level premium method based upon estimated future investment yield, mortality and withdrawal assumptions, commensurate with the Company’s experience, modified as necessary to reflect anticipated trends, including possible unfavorable deviations. Most life reserve interest assumptions range from 2.6% to 6.0%. | |||||||||
Future policy benefit reserves on LTC products are computed using a net level reserve method. Reserves are determined as the excess of the present value of future benefits over the present value of future net premiums and are based on best estimate assumptions at the time of issue for morbidity, mortality, lapse, and interest with provisions for adverse deviation. Most LTC reserve interest assumptions range from 5.0% to 6.0%. | |||||||||
An additional reserve has been established to provide for future expected losses that are anticipated to occur after a period of profits. The reserve accrual will be over the profit period and is based on best estimate assumptions as of the beginning of the accrual period without provisions for adverse deviation. | |||||||||
Policy and Contract Claims | ' | ||||||||
(j) Policy and Contract Claims | |||||||||
Policy and contract claims include the liability for claims reported but not yet paid, claims incurred but not yet reported (IBNR), and claim settlement expenses on the Company’s accident and health business. Actuarial reserve development methods are generally used in the determination of IBNR liabilities. In cases of limited experience or lack of credible claims data, loss ratios are used to determine an appropriate IBNR liability. Claim and IBNR liabilities of a short-term nature are not discounted, but those claim liabilities resulting from disability income or LTC benefits include interest and mortality discounting. | |||||||||
Reinsurance | ' | ||||||||
(k) Reinsurance | |||||||||
The Company assumes and cedes business with other insurers. Reinsurance premium and benefits paid or provided are accounted for in a manner consistent with the basis used in accounting for original policies issued and the terms of the reinsurance contracts and are included in premiums and policy fees, ceded, and benefit recoveries, respectively, on the Consolidated Statements of Operations. Insurance liabilities are reported before the effects of reinsurance. Account balances and future policy benefit reserves, and policy and contract claims covered under reinsurance contracts are recorded in reinsurance recoverables and receivables on the Consolidated Balance Sheets. Amounts paid or deemed to have been paid for claims covered by reinsurance contracts are recorded as receivables on the Consolidated Balance Sheets. Reinsurance recoverables are recognized in a manner consistent with the liabilities related to the underlying reinsured contracts. Amounts due to other insurers on assumed business are recorded as a reinsurance payable, and are included in other liabilities on the Consolidated Balance Sheets. | |||||||||
A gain recognized when the Company enters into a coinsurance agreement with a third-party reinsurer is deferred and recorded in other liabilities on the Consolidated Balance Sheets. Such gains are amortized into operations over the revenue-producing period or the claims run-off period of the related reinsured policies. These amortized gains are recorded in other revenue on the Consolidated Statements of Operations. | |||||||||
Investments | ' | ||||||||
(l) Investments | |||||||||
Fixed-Maturity and Equity Securities | |||||||||
The Company has portfolios of certain fixed-maturity and equity securities as “available-for-sale.” Accordingly, the securities are carried at fair value, and related unrealized gains and losses are credited or charged directly to accumulated other comprehensive income in stockholder’s equity, net of tax and related shadow adjustments. The adjustments to DAC, DSI, and VOBA represent the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. The adjustment to reserves represents the increase or decrease in the reserve balance that would have been required as a charge or credit to operations had such unrealized amounts been realized. | |||||||||
The Company has portfolios of certain fixed-maturity and equity securities classified as “trading,” and accordingly, the securities are carried at fair value, and related unrealized gains and losses are reflected in change in fair value of assets and liabilities, within the Consolidated Statements of Operations. The Company has portfolios of certain fixed-maturity securities classified as “held-to-maturity,” and accordingly, the securities are carried at amortized cost on the Consolidated Balance Sheets. The Company has the intent and ability to hold such securities to maturity. | |||||||||
Dividends are accrued on the date they are declared and interest is accrued as earned. Premiums or discounts on fixed-maturity securities are amortized using the constant yield method. Realized gains and losses are computed based on the average cost basis of all lots owned of each security. | |||||||||
Mortgage-backed securities and structured securities are amortized using, among other assumptions, anticipated prepayments. Prepayment assumptions for loan-backed securities are obtained from various external sources or internal estimates. The Company believes these assumptions are consistent with those a market participant would use. The Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. For all structured securities without expected credit deterioration, when estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments using the retrospective method. Any resulting adjustment is included in interest and similar income, net on the Consolidated Statements of Operations. For structured securities with expected credit deterioration, when adjustments are anticipated for prepayments and other expected changes in future cash flows, the effective yield is recalculated using the prospective method as required by the Beneficial Interests in Securitized Financial Assets Topic of the Codification. | |||||||||
The fair value of fixed-maturity securities and equity securities is obtained from third-party pricing sources whenever possible. Management completes its own Independent Price Verification (IPV) process, which ensures security pricing is obtained from a third-party source other than the sources used by the investment managers. The IPV process supports the reasonableness of price overrides and challenges by the investment managers and reviews pricing for appropriateness. Results of the IPV are reviewed by the Company’s Pricing Committee. | |||||||||
The Company reviews the available-for-sale and held-to-maturity investment portfolios to determine whether or not declines in fair value are other than temporary. The Company continues to evaluate factors in addition to average cost and fair value, including credit quality, the extent and duration of the decline, market analysis, current events, recent price declines, likelihood of recovery in a reasonable period of time, and management’s judgment, to determine whether fixed-income securities are considered other-than-temporarily impaired. In addition, the Investments – Debt and Equity Securities Topic of the Codification requires that the Company evaluate other-than-temporary impairments (OTTI) on available-for-sale and held-to-maturity fixed-maturity securities based on additional factors. Specifically, declines in value resulting from changes in risk-free interest rates must also be considered. | |||||||||
When the fair value of a fixed-maturity security is less than its amortized cost, the Company assesses whether or not (i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. The Company evaluates these factors to determine whether the Company or any of its investment managers have an intent to sell a security or a group of securities. Additionally, the Company performs a cash flow projection for several years into the future to determine whether cash needs would require the sale of any securities in an unrealized loss position. If either of these conditions is met, the Company must recognize an OTTI for the difference between the investment’s amortized cost basis and its fair value through earnings. For securities that do not meet the above criteria, and the Company does not expect to recover a security’s amortized cost basis, the security is consideredother-than-temporarily impaired. For these securities, the Company separates the total impairment into the credit loss component and the amount of the loss related to other factors. The amount of the total impairment related to credit loss is considered an OTTI and is recognized in realized investment gains, net on the Consolidated Statements of Operations. The amount of the total impairment related to other factors is recognized in other comprehensive income, net of impacts to DAC, DSI, VOBA, reserves, and deferred income taxes. For available-for-sale and held-to-maturity securities that have recognized an OTTI through earnings, if through subsequent evaluation there is a significant increase in the cash flow expected, the difference between the amortized cost basis and the discounted cash flows expected to be collected is accreted as interest income. Subsequent increases and decreases not related to additional credit losses in the fair value ofavailable-for-sale securities are included as a separate component in the Consolidated Statements of Comprehensive Income. | |||||||||
The Company evaluates whether a credit loss exists by considering primarily the following factors: (a) the length of time and extent to which the fair value has been less than the amortized cost of the security, (b) changes in the financial condition, credit rating, and near-term prospects of the issuer, (c) whether the issuer is current on contractually obligated interest and principal payments, (d) changes in the financial condition of the security’s underlying collateral, if any, and (e) the payment structure of the security. The Company uses a probability-weighted cash flow model for corporate bonds to determine the credit loss amount. This measurement is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and significant judgments regarding the future performance of the security. The Company’s probability-weighted cash flow model involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. For structured securities, the Company selects a probability-weighted or best estimate cash flow model depending on the specifics of the individual security and the information available to measure the expected cash flows of the underlying collateral. In the event that sufficient information is not available to measure the expected cash flows of a structured security in a timely manner due to a lack of available information on the valuation date, the entire decline in fair value is considered to be related to credit loss. | |||||||||
The Company provides a supplemental disclosure on its Consolidated Statements of Operations that presents the total OTTI losses recognized during the period less the portion of OTTI losses recognized in other comprehensive income to equal the credit-related portion of OTTI that was recognized in earnings during the period. The portion of OTTI losses recognized in other comprehensive income includes the portion of OTTI losses related to factors other than credit recognized during the period, offset by reclassifications of OTTI losses previously determined to be related to factors other than credit that are determined to be credit related in the current period. The amount presented in the supplemental disclosure on the Consolidated Statements of Operations represents the portion of OTTI losses recognized in other comprehensive income and excludes subsequent increases and decreases in the fair value of these securities. | |||||||||
The Company views equity securities that have a fair value of at least 20% below average cost at the end of a quarter or are in an unrealized loss position for nine consecutive months as other-than-temporarily impaired. However, other factors, including market analysis, current events, recent price declines, and management’s judgment related to the likelihood of recovery within a reasonable period of time, are also used to determine whether equity securities are considered other-than-temporarily impaired and may result in an equity security being impaired. All previously impaired equity securities will incur additional OTTI should the fair value fall below the book value. | |||||||||
Impairments in the value of securities held by the Company, considered to be other than temporary, are recorded as a reduction of the cost of the security, and a corresponding realized loss is recognized on the Consolidated Statements of Operations. The Company adjusts DAC, DSI, and VOBA for impairments on securities, as discussed in their respective sections of this note. | |||||||||
Mortgage Loans on Real Estate | |||||||||
Mortgage loans on real estate are reflected at unpaid principal balances adjusted for an allowance for uncollectible balances. Interest on mortgage loans is accrued on a monthly basis and recorded in interest and similar income, net on the Consolidated Statements of Operations. The Company analyzes loan impairment quarterly when assessing the adequacy of the allowance for uncollectible balances. The Company considers recent trends in the Company’s loan portfolio and information on current loans, such as loan-to-value ratios and debt service coverage, which could impact a loan’s credit quality. The Company also evaluates the mortgage loan reserve to ensure that the estimate is based on the most recent available industry default and loss studies and historical default rates for the Company. The Company does not accrue interest on defaulted loans. | |||||||||
Other Invested Assets | |||||||||
Other invested assets include short-term securities, policy loans, loans to affiliates, real estate, equity securities carried at cost, acquired loans, and partnership investments. Short-term securities are carried at amortized cost, which approximates fair value. Policy loans, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value. Loans to affiliates are carried at cost, and interest is accrued monthly, with payments received semiannually. Real estate consists of building and land and is carried at cost less accumulated depreciation. The buildings are amortized over 39 years at acquisition, and improvements and additions are depreciated using the straight-line method over the remaining life of the real estate. | |||||||||
The Company is a member of the Federal Home Loan Bank of Des Moines (FHLB), primarily for the purpose of participating in the Bank’s mortgage collateralized loan advance program with short-term and long-term funding facilities. Members are required to purchase and hold a minimum amount of FHLB capital stock plus additional stock based on outstanding advances. The investment is carried at cost, which approximates fair value, and is reported in other invested assets on the Consolidated Balance Sheets. The investment is evaluated for impairment based on the ultimate recoverability of its par value. | |||||||||
Acquired Loans | |||||||||
The Company acquired a portfolio of assets that have deteriorated credit quality and are recorded as acquired loans within other invested assets on the Consolidated Balance Sheets. Acquired loans are initially recorded at fair value, and changes in expected cash flows are recorded as adjustments to accretable yield, to the carrying amount, or both. Fair values are obtained using a combination of third-party vendors and cash flow modeling, which is reviewed by the Company Pricing Committee. Accretable yield refers to the amount of undiscounted cash flows expected in excess of the carrying amount. This amount is converted into a rate and accreted into interest and similar income, net on the Consolidated Statements of Operations. Interest is recorded as received on certain acquired loans that do not have reasonably estimable cash flows. | |||||||||
Repurchase Agreements | |||||||||
The Company has entered into a tri-party repurchase facility agreement with an unaffiliated bank, whereby the Company may sell securities with an agreement to repurchase at a later date for a specified price. The Company’s repurchase agreements are accounted for as collateralized borrowings, whereby the underlying securities sold by the Company under the repurchase agreement are considered collateral pledged against the cash borrowed and the assets pledged as collateral are reclassified and reported separately from other assets not so encumbered. | |||||||||
Derivatives | ' | ||||||||
(m) Derivatives | |||||||||
The Company utilizes derivatives within certain actively managed investment portfolios. Within these portfolios, derivatives can be used for hedging, replication, and income generation only. The financial instruments are valued and carried at fair value and the unrealized gains and losses on the derivatives are reflected in change in fair value of assets and liabilities within the Consolidated Statements of Operations. | |||||||||
Hedge Accounting | |||||||||
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in cash flow of the hedged item. At hedge inception, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as cash flow hedges to specific assets or liabilities on the Consolidated Balance Sheets and defining the effectiveness and ineffectiveness testing methods to be used. The Company also formally assesses, at inception and on a quarterly basis, whether the derivatives used in hedging transactions have been and are expected to continue to be highly effective in offsetting changes in cash flows of hedged items. | |||||||||
Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include comparison of critical terms of the derivative to the hedged item. Quantitative methods include analysis of changes in fair value or cash flows associated with the hedge relationship. Hedge effectiveness is measured using the dollar offset method. The dollar offset method compares changes in cash flows of the hedging instrument with changes in the cash flows of the hedged item attributable to the hedged risk. Random changes in interest rate movements are assumed. Related changes in the cash flows of the hedging instrument are expected to offset the changes in the cash flows of the hedged item as the notional/par amounts, reset dates, interest rate indices, and business day conventions are the same for both the bond and the swap. The cumulative amount of unrealized gains and losses of the hedging instrument is recognized in accumulated other comprehensive income, net of tax on the Consolidated Balance Sheets. The ineffective portion of the change in the fair value of the hedging instrument is recognized in change in fair value of assets and liabilities in the Consolidated Statements of Operations. There has been no significant impact to the Consolidated Financial Statements as a result of applying hedge accounting. | |||||||||
Options and Futures Contracts | |||||||||
The Company provides additional benefits through certain life and annuity products, which are linked to the fluctuation of various United States and international stock market indices. In addition, certain variable annuity contracts provide minimum guaranteed benefits. The Company has analyzed the characteristics of these benefits and has entered into over-the-counter (OTC) option contracts, exchange-traded option (ETO) contracts, and exchange-traded futures contracts tied to an appropriate underlying index with similar characteristics with the objective to economically hedge these risks. The Company uses exchange-traded futures contracts with the objective to increase the effectiveness of the economic hedge. Management monitors in-force amounts and option and futures contract values to ensure satisfactory matching and to identify unsatisfactory mismatches. If persistency assumptions were to deviate significantly from anticipated rates, management would purchase or sell option and futures contracts as deemed appropriate or take other actions. | |||||||||
The OTC option contracts and ETO contracts are reported at fair value as derivatives on the Consolidated Balance Sheets. The fair value of the OTCs is derived internally and deemed by management to be reasonable via performing an IPV process. The process of deriving internal derivative prices requires the Company to calibrate Monte Carlo scenarios to actual market information. The calibrated scenarios are applied to derivative cash flow models to calculate fair value prices for the derivatives. The fair value of the ETOs is based on quoted market prices. Changes in unrealized gains and losses on the option contracts and incremental gains and losses from expiring options are recorded in change in fair value of assets and liabilities on the Consolidated Statements of Operations. The liability for the benefits is reported in account balances and future policy benefit reserves on the Consolidated Balance Sheets. Futures contracts do not require an initial cash outlay, and the Company has agreed to daily net settlement based on movements of the representative index. Therefore, no asset or liability is recorded on the Consolidated Balance Sheets. Gains and/or losses on futures contracts are included in change in fair value of assets and liabilities on the Consolidated Statements of Operations. | |||||||||
Interest Rate Swaps and Total Return Swaps | |||||||||
The Company utilizes interest rate swaps and total return swaps (TRS) to hedge cash flows and market risks embedded in certain annuities. The interest rate swaps and TRS are reported at fair value as derivatives on the Consolidated Balance Sheets. The fair value of the interest rate swaps is derived using a third-party vendor software program and deemed by management to be reasonable. The fair value of the TRS is based on counterparty pricing and deemed by management to be reasonable. Changes in unrealized gains and losses on the swaps are recorded in change in fair value of assets and liabilities on the Consolidated Statements of Operations. | |||||||||
Securities Lending | ' | ||||||||
(n) Securities Lending | |||||||||
The Company accounts for its securities lending transactions as secured borrowings, in which the collateral received and the related obligation to return the collateral are recorded on the Consolidated Balance Sheets as cash and cash equivalents, and other liabilities, respectively. Securities on loan remain on the Consolidated Balance Sheets, and interest and dividend income earned by the Company on loaned securities is recognized in interest and similar income, net on the Consolidated Statements of Operations. | |||||||||
The Company participates in restricted securities lending arrangements whereby specific securities are loaned to other institutions. The collateral is defined by the agreement to be cash and cash equivalents; is unrestricted and may be used for general purposes. Company policy requires a minimum of 102% of fair value of securities loaned under securities lending agreements to be maintained as collateral. | |||||||||
Receivables | ' | ||||||||
(o) Receivables | |||||||||
Receivable balances (contractual amount less allowance for doubtful accounts) are based on pertinent information available to management as of year-end, including the financial condition and creditworthiness of the parties underlying the receivables. Receivable balances are monitored and allowances for doubtful accounts are maintained based on the nature of the receivable, and the Company’s assessment of the ability to collect. The allowance is estimated by aging the balances due from individual parties and generally setting up an allowance for any balances that are more than 90 days old. | |||||||||
Company Owned Life Insurance | ' | ||||||||
(p) Company-Owned Life Insurance | |||||||||
Company-owned life insurance (COLI) is recognized at the amount that could be realized assuming the surrender of an individual-life policy (or certificate in a group policy), otherwise known as the cash surrender value. Subsequent measurement of the contract is also at the cash surrender value with changes in cash surrender value recognized in Other Revenue on the Consolidated Statements of Operations. The COLI policies are reported in other assets on the Consolidated Balance Sheets. | |||||||||
Home Office Property and Equipment | ' | ||||||||
(q) Home Office Property and Equipment | |||||||||
Home office property consists of buildings and land. Equipment consists of furniture, office equipment, leasehold improvements, and computer hardware. Both are reported at cost, net of accumulated depreciation, in other assets on the Consolidated Balance Sheets. Major upgrades and improvements are capitalized, while maintenance and repairs are expensed when incurred. Depreciation is computed over the estimated useful lives (3 – 7 years, depending on the asset) of depreciable assets using the straight-line method. The cost and accumulated depreciation for home office property and equipment sold, retired, or otherwise disposed of are relieved from the accounts, and resulting gains or losses are reflected in general and administrative expenses on the Consolidated Statements of Operations. The property and equipment balance was $146,242, net of accumulated depreciation of $110,880 as of December 31, 2013, and $151,661, net of accumulated depreciation of $104,281 as of December 31, 2012. | |||||||||
Preoperating and start-up costs incurred in connection with the construction of the Company’s headquarters were capitalized until the facility became operational. Interest was also capitalized in connection with the construction and recorded as part of the asset. These costs are being amortized, using the straight-line method, over a 39-year period. The amounts of capitalized costs amortized, including interest, during 2013, 2012, and 2011 were $2,275, $2,275, and $2,275, respectively. The expansion of the Company’s headquarters was put into operation in 2006, resulting in amortization of $2,104, $2,104, and $2,104 for the years ended December 31, 2013, 2012, and 2011, respectively. | |||||||||
Income Taxes | ' | ||||||||
(r) Income Taxes | |||||||||
The Company and its subsidiaries file a consolidated federal income tax return with AZOA and all of its wholly owned subsidiaries. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code and its related regulations and reimbursement will be in accordance with an intercompany tax reimbursement arrangement. The Company, and its insurance subsidiaries generally will be paid for the tax benefit on their losses and any other tax attributes to the extent they could have obtained a benefit against theirpost-1990 separate return tax liability. | |||||||||
The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded on the Consolidated Balance Sheets. Any such change could significantly affect the amounts reported on the Consolidated Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, management evaluates the appropriateness of such reserves based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service (IRS) or the tax courts. | |||||||||
The Company utilizes the asset and liability method of accounting for income tax. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized or that the related temporary differences will not reverse over time (see further discussion in note 16). | |||||||||
Stockholder's Equity, Loan to Parent Company | ' | ||||||||
(s) Stockholder’s Equity, Loan to Parent Company | |||||||||
The Company entered into an agreement during 2002 to lend AZOA $250,000 (see further discussion in note 17). This agreement was executed in close proximity to a capital contribution from AZOA of $650,000 in the form of preferred stock of an affiliate. The unamortized loan balance is recorded as contra equity in accordance with the Equity Topic of the Codification. This loan was paid in full during 2012. | |||||||||
Stockholder's Equity, Accumulated Unrealized Foreign Currency | ' | ||||||||
(t) Stockholder’s Equity, Accumulated Unrealized Foreign Currency | |||||||||
Foreign currency translation adjustments are related to the conversion of foreign currency upon the consolidation of a foreign subsidiary (see further discussion in note 22). The net assets of the Company’s foreign operations are translated into U.S. dollars using exchange rates in effect at each year-end. Translation adjustments arising from differences in exchange rates from period to period are included in the foreign currency translation adjustments, net of tax reported, as a separate component of comprehensive income on the Consolidated Statements of Comprehensive Income. | |||||||||
Separate Accounts and Annuity Product Guarantees | ' | ||||||||
(u) Separate Accounts and Annuity Product Guarantees | |||||||||
The Company issues variable annuity and life contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company recognizes gains or losses on transfers from the general account to the separate accounts at fair value to the extent of contractholder interests in separate accounts, which are offset by changes in contractholder liabilities. The Company also issues variable annuity and life contracts through its separate accounts where the Company provides certain contractual guarantees to the contractholder. These guarantees are in the form of a guaranteed minimum death benefit (GMDB), a guaranteed minimum income benefit (GMIB), a guaranteed minimum accumulation benefit (GMAB), and a guaranteed minimum withdrawal benefit (GMWB). These guarantees provide for benefits that are payable to the contractholder in the event of death, annuitization, or at specified dates during the accumulation period. | |||||||||
Separate account assets supporting variable annuity contracts represent funds for which investment income and investment gains and losses accrue directly to contractholders. Each fund has specific investment objectives and the assets are carried at fair value. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company. Separate account assets and liabilities are reported as summary totals on the Consolidated Balance Sheets. Amounts charged to the contractholders for mortality and contract maintenance are included in policy fees on the Consolidated Statements of Operations. Administrative and other services are included in fee and commission revenue on the Consolidated Statements of Operations. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Changes in GMDB and GMIB are calculated in accordance with the Financial Services – Insurance Topic of the Codification and are included in policyholder benefits on the Consolidated Statements of Operations. GMAB and GMWB are considered to be embedded derivatives under the Derivatives and Hedging Topic of the Codification, and the changes in these embedded derivatives are included in change in fair value of annuity embedded derivatives on the Consolidated Statements of Operations. | |||||||||
The GMDB net amount at risk is defined as the guaranteed amount that would be paid upon death, less the current accumulated contractholder account value. The GMIB net amount at risk is defined as the current amount that would be needed to fund expected future guaranteed payments less the current contractholder account value, assuming that all benefit selections occur as of the valuation date. The GMAB net amount at risk is defined as the current guaranteed value amount that would be added to the contracts less the current contractholder account value. The GMWB net amount at risk is defined as the current accumulated benefit base amount less the current contractholder account value. | |||||||||
The GMDB provides a specified minimum return upon death. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract. The Company’s GMDB options have the following features: | |||||||||
• | Return of Premium – Provides the greater of account value or total deposits made to the contract, less any partial withdrawals and assessments. | ||||||||
• | Reset – Provides the greater of a return of premium death benefit or the most recent five-year anniversary account value (prior to age 81), adjusted for withdrawals. | ||||||||
• | Ratchet – Provides the greater of a return of premium death benefit or the highest specified anniversary account value (prior to age 81), adjusted for withdrawals. Currently, there are three versions of ratchet, with the difference based on the definition of anniversary: quarterly – evaluated quarterly, annual – evaluated annually, and six-year – evaluated every sixth year. | ||||||||
• | Rollup – Provides the greater of a return of premium death benefit or premiums adjusted for withdrawals accumulated with a compound interest rate. There are two variations of rollup interest rates: 5% with no cap and 3% with a cap of 150% of premium. This GMDB locks in at age 81. | ||||||||
• | Earnings Protection Rider – Provides the greater of a return of premium death benefit or a death benefit equal to the contract value plus a specified percentage of the earnings on the contract at the date of death. | ||||||||
The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB features are: | |||||||||
• | Return of Premium – Provides the greater of account value or total deposits made to the contract less any partial withdrawals and assessments. | ||||||||
• | Ratchet – Provides an annuitization value equal to the greater of account value, net premiums, or the highest one-year anniversary account value (prior to age 81), adjusted for withdrawals. | ||||||||
• | Rollup – Provides an annuitization value equal to the greater of account value and premiums adjusted for withdrawals accumulated with a compound interest rate, which is subject to a cap for certain interest rates and products. | ||||||||
The GMDB and GMIB liabilities are determined each period by estimating the expected future claims in excess of the associated account balances. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to policyholder benefits on the Consolidated Statements of Operations, if actual experience or other evidence suggests that earlier assumptions should be revised. | |||||||||
The following assumptions were used to determine the GMDB and GMIB liabilities as of December 31, 2013 and 2012: | |||||||||
• | 100 stochastically generated investment performance scenarios. | ||||||||
• | Mean investment performance assumption of 6.5% in 2013 and 2012. | ||||||||
• | Volatility assumption of 13.4% in 2013 and 2012. | ||||||||
• | Mortality assumption of 94.3% and 94.0% of the Annuity 2000 Mortality Table for all actively sold variable annuity products in 2013 and 2012, respectively, and 50.0% of the 1994 MGDB Mortality Table for all other products. | ||||||||
• | Lapse rates vary by contract type and duration. Spike rates could approach 40% with an ultimate rate around 15%. | ||||||||
• | Discount rates vary by contract type and equal an assumed long-term investment return (6.5%), less the applicable mortality and expense rate. | ||||||||
• | GMIB contracts only – dynamic lapse assumption. For example, if the contract is projected to have a large additional benefit, then it becomes less likely to lapse. | ||||||||
The GMAB is a living benefit that provides the contractholder with a guaranteed value that was established at least five years prior at each contract anniversary. This benefit is first available at the fifth contract anniversary, seventh contract anniversary, or tenth contract anniversary depending on the type of contract. Depending on the contractholder’s selection at issue, this value may be either a return of premium or may reflect market gains, adjusted at least proportionately for withdrawals. The contractholder also has the option to reset this benefit. | |||||||||
The GMWB is a living benefit that provides the contractholder with a guaranteed amount of income in the form of partial withdrawals. The benefit is payable provided the covered person is between the specified ages in the contract. The benefit is a fixed rate (depending on the age of the covered person) multiplied by the benefit base in the first year the benefit is taken and contract value in following years. The benefit does not decrease if the contract value decreases due to market losses. The benefit can decrease if the contract value is reduced by withdrawals. The benefit base used to calculate the initial benefit is the maximum of the contract value, the quarterly anniversary value, or the guaranteed annual increase of purchase payments (capped at twice the total purchase payments). Additionally, there is a GMWB living benefit where the benefit is an initial payment percentage established at issue, based on issue age. For each year there is a year-over-yearcontract value increase, the payment percentage will increase by 1.0% (up to age 91). This payment percentage is applied against total purchase payments instead of a benefit base value. | |||||||||
The GMAB and GMWB liabilities are determined each period as the difference between expected future claims and the expected future profits. One result of this calculation is that these liabilities can be negative (contra liability). The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to change in fair value of annuity embedded derivatives on the Consolidated Statements of Operations, if actual experience or other evidence suggests that earlier assumptions should be revised. Products featuring GMWB benefits were first issued in 2007. In the calendar year that a product launches, the reserves are set to zero, until the policy’s first anniversary date. | |||||||||
The following assumptions were used to determine the GMAB and GMWB liabilities as of December 31, 2013 and 2012: | |||||||||
• | 1000 stochastically generated investment performance scenarios. | ||||||||
• | Market volatility assumption varies by fund type and grades from a current volatility number to a long-term assumption over one year as shown below: | ||||||||
2013 | |||||||||
Fund index type | Current | Long-term | |||||||
volatility | forward | ||||||||
volatility | |||||||||
Large cap | 15.8 | % | 18.2 | % | |||||
Bond | 3.4 | 4 | |||||||
International | 17 | 24.5 | |||||||
Small cap | 19.8 | 21.1 | |||||||
Cash | — | — | |||||||
2012 | |||||||||
Fund index type | Current | Long-term | |||||||
volatility | forward | ||||||||
volatility | |||||||||
Large cap | 18.5 | % | 19.8 | % | |||||
Bond | 3.4 | 4.1 | |||||||
International | 21.5 | 25.2 | |||||||
Small cap | 23.1 | 21.4 | |||||||
Cash | — | — | |||||||
• | Mortality assumption 93.3% and 94.0% of the Annuity 2000 Mortality Table for all actively sold variable annuity products in 2013 and 2012, respectively, and 50.0% of the 1994 MGDB Mortality Table for all other products. | ||||||||
• | Lapse rates vary by contract type and duration. Spike rates could approach 40% with an ultimate rate around 15%. | ||||||||
Discount rates equal to current month’s London Interbank Offered Rate (LIBOR) plus a company specific spread. In 2012 and prior years, these cash flows were discounted using the U.S. Treasury rate plus a company specific spread. | |||||||||
The Company issues fixed-indexed annuities with a GMWB as an optional rider. The GMWB has a roll-up feature. The net amount at risk is partially limited, because the contractholder account value has an annual credit that is floored at zero. Since the account value cannot decrease, in contrast to a variable annuity, the difference between the withdrawal value and the account value will not diverge to the degree that is possible in a variable annuity. | |||||||||
Permitted Statutory Accounting Practices | ' | ||||||||
(v) Permitted Statutory Accounting Practices | |||||||||
The Company is required to file annual statements with insurance regulatory authorities, which are prepared on an accounting basis prescribed or permitted by such authorities. Prescribed statutory accounting practices include state laws, regulations, and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company currently has a permitted practice in effect for one of its affiliates, which allows interest rate swaps to be accounted for using hedge accounting. This permitted practice does not significantly impact statutory capital and surplus or regulatory risk-based capital requirements. | |||||||||
Recently Issued Accounting Pronouncements - Adopted | ' | ||||||||
(w) Recently Issued Accounting Pronouncements – Adopted | |||||||||
In July 2013, the FASB issued guidance that indefinitely defers the effective date of certain quantitative disclosure requirements for an employee benefit plan, other than those plans that are subject to the Securities and Exchange Commission (SEC) filing requirements, that holds investments in the plan sponsor’s own nonpublic entity equity securities, including equity securities of its plan sponsor’s nonpublic affiliated entities that are within the scope of the disclosure requirements in the fair value measurement and disclosure requirements issued in 2011. This guidance is effective immediately upon issue. However, the Company does not have employee benefit plans that invest in nonpublic equity of the Company or any of its affiliates. | |||||||||
In July 2013, the FASB issued guidance allowing the Fed Funds Effective Swap Rate (OIS) to be used as a benchmark interest rate for hedge accounting purposes, in addition to the U.S. Treasury rate and LIBOR. Additionally, this guidance removes a restriction that previously required similar hedges to use the same benchmark interest rate. As part of this guidance, the glossary of the Accounting Standard Codification was updated to define the OIS rate and define that it is considered a proxy for a risk-free interest rate. This guidance is effective for hedging relationships beginning on or after July 17, 2013. The Company adopted this guidance beginning July 17, 2013. The Company has not designated new hedging relationships using OIS in 2013. However, the Company began discounting its collateralized derivatives recorded at fair value using OIS as the discount rate in 2013. | |||||||||
In February 2013, the FASB issued guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective for fiscal years beginning after December 15, 2012. This guidance was adopted January 1, 2013. The Company elected to present the required information in note 24 to the Consolidated Financial Statements. | |||||||||
In December 2011, the FASB issued guidance that amended the Disclosures about Offsetting Assets and Liabilities Topic in the Codification. The guidance requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities will disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. Also, the guidance requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. In January 2013, the FASB issued a clarification to the scope of this amended guidance, which specifies that it applies only to derivative instruments, repurchase and reverse repurchase agreements, securities lending and securities borrowing transactions. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The disclosures should be applied retrospectively for all comparative periods presented. The guidance did not have a financial impact on the Company’s Consolidated Financial Statements as it applies only to disclosures. | |||||||||
In December 2011, the FASB issued guidance about the timing of derecognition when a parent ceases to have a controlling interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. Under this guidance, derecognition should not occur until the legal title has transferred, even if the parent no longer has a controlling financial interest. This guidance is effective for fiscal years beginning on or after June 15, 2012. The Company adopted this guidance on January 1, 2013. The guidance did not have a financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In October 2010, the FASB issued guidance that changes the accounting for costs associated with acquiring or renewing insurance contracts. Specifically, the guidance changes the definition of acquisition costs eligible for deferral. The new definition is meant to reduce diversity in practice regarding the types of expenses treated as DAC in the insurance industry. The new DAC definition states that acquisition costs include only those incremental costs that are directly related to the successful acquisition of insurance contracts. An entity may defer incremental direct costs of contract acquisition that are incurred in transactions sold by independent third parties and incremental direct costs of contract acquisition that are incurred in transactions sold by employees. Additionally, an entity may capitalize as DAC only those advertising costs meeting the capitalization criteria for direct-response advertising. All other acquisition costs are to be charged to expense as incurred. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The Company adopted this guidance beginning January 1, 2012. In 2012, the Company capitalized $737,390 of acquisition costs compared to $820,993 that would have been capitalized if the Company’s previous policy had continued to be applied. | |||||||||
Recently Issued Accounting Pronouncements - To Be Adopted | ' | ||||||||
(x) Recently Issued Accounting Pronouncements – To Be Adopted | |||||||||
In July 2013, the FASB issued guidance about the presentation of unrecognized tax benefits. This guidance requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective for fiscal years beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In April 2013, the FASB issued guidance that requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. This guidance does not apply to investment companies under the Investment Company Act of 1940. The guidance is effective for annual reporting periods beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In March 2013, the FASB issued guidance that applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. Changes are applied prospectively with early adoption permitted. The guidance is effective for fiscal years beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements that are not included in other guidance and for which the total amount of the obligation is fixed at the reporting date. Examples of such liabilities include debt arrangements, other contractual obligations, and settled legal and judicial rulings. The guidance is effective for fiscal years beginning after December 15, 2013. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
In July 2011, the FASB issued guidance that addresses how health insurers should recognize and classify, in their income statements, fees mandated by the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (the Acts). The Acts impose an annual fee (not tax deductible) on health insurers for each calendar year beginning on or after January 1, 2014. The liability for the fee should be estimated and recorded in full once the entity provides qualifying health insurance in the calendar year with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. The guidance is effective for calendar years beginning after December 31, 2013, when the fee initially becomes effective. The Company does not expect the guidance to have a material financial impact on the Company’s Consolidated Financial Statements. | |||||||||
Accounting Changes | ' | ||||||||
(y) Accounting Changes | |||||||||
On September 30, 2012, the Company applied a prospective change to its method of grouping insurance policies for measuring amortization of DAC and DSI for its variable annuity policies. This was a change in estimate that is inseparable from the effect of a related change in accounting principle. The implementation of the new DAC and DSI groupings better reflects the way the Company examines the profitability of its variable business and results in more logical amortization rates, sensitivities, and other analyses. The implementation of this change resulted in additional income from operations before income taxes of $38,503 for the year ended December 31, 2012. | |||||||||
During 2012, the Company recorded a change in estimate related to the implementation of a new model for the valuation of policyholder reserves, deferred acquisition costs (DAC), deferred sales inducements (DSI), and value of business acquired (VOBA) for the Company’s fixed and fixed-indexed annuities. Reserve changes were primarily driven by more sophisticated modeling of newer product features such as lifetime income riders. In addition to DAC amortization related to these reserve changes, the Company’s DAC balances changed as a result of bringing the DAC projection model in line with the reserve model. Historically, the valuation and projection models were distinct in such cases as compression and product mapping. Now, valuation and projection are maintained within the same model, which provides greater consistency and a more refined estimate. This change in estimate resulted in a reserve decrease of $288,822, and caused additional DAC, DSI, and VOBA amortization of $710,549 for the year ended December 31, 2012. | |||||||||
Reclassifications | ' | ||||||||
(z) Reclassifications | |||||||||
Certain prior year balances have been reclassified to conform to the current year presentation. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Market Volatility Assumptions | ' | ||||||||
• | Market volatility assumption varies by fund type and grades from a current volatility number to a long-term assumption over one year as shown below: | ||||||||
2013 | |||||||||
Fund index type | Current | Long-term | |||||||
volatility | forward | ||||||||
volatility | |||||||||
Large cap | 15.8 | % | 18.2 | % | |||||
Bond | 3.4 | 4 | |||||||
International | 17 | 24.5 | |||||||
Small cap | 19.8 | 21.1 | |||||||
Cash | — | — | |||||||
2012 | |||||||||
Fund index type | Current | Long-term | |||||||
volatility | forward | ||||||||
volatility | |||||||||
Large cap | 18.5 | % | 19.8 | % | |||||
Bond | 3.4 | 4.1 | |||||||
International | 21.5 | 25.2 | |||||||
Small cap | 23.1 | 21.4 | |||||||
Cash | — | — |
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Fair Value of Available-for-Sale and Held -to-maturity Securities | ' | ||||||||||||||||||||||||
At December 31, 2013 and 2012, the amortized cost or cost, gross unrealized gains, gross unrealized losses, and fair values of available-for-sale and held-to-maturity securities are as shown in the following tables: | |||||||||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI in | |||||||||||||||||||||
cost | unrealized | unrealized | value | accumulated | |||||||||||||||||||||
or cost | gains | losses | other | ||||||||||||||||||||||
comprehensive | |||||||||||||||||||||||||
income (1) | |||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||
U.S. government | $ | 1,103,739 | 58,198 | 3,078 | 1,158,859 | — | |||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 480,981 | 30,861 | 13 | 511,829 | — | ||||||||||||||||||||
States and political subdivisions | 4,916,086 | 161,812 | 119,538 | 4,958,360 | — | ||||||||||||||||||||
Foreign government | 341,223 | 24,167 | 156 | 365,234 | — | ||||||||||||||||||||
Public utilities | 4,692,512 | 467,650 | 23,952 | 5,136,210 | 650 | ||||||||||||||||||||
Corporate securities | 39,446,124 | 2,700,886 | 470,158 | 41,676,852 | 1,429 | ||||||||||||||||||||
Mortgage-backed securities | 11,668,499 | 876,705 | 19,911 | 12,525,293 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 12,557 | 1,655 | — | 14,212 | — | ||||||||||||||||||||
Collateralized debt obligations | 44,687 | 12,291 | 105 | 56,873 | 11,480 | ||||||||||||||||||||
Total fixed-maturity securities, available-for-sale | 62,706,408 | 4,334,225 | 636,911 | 66,403,722 | 13,559 | ||||||||||||||||||||
Fixed-maturity securities, held-to-maturity: | |||||||||||||||||||||||||
Corporate securities | $ | 110 | 19 | — | 129 | — | |||||||||||||||||||
Collateralized debt obligations | 220,642 | 1,100 | 2,355 | 219,387 | — | ||||||||||||||||||||
Total fixed-maturity securities, held-to-maturity | 220,752 | 1,119 | 2,355 | 219,516 | — | ||||||||||||||||||||
Total available-for-sale and held-to-maturity securities | $ | 62,927,160 | 4,335,344 | 639,266 | 66,623,238 | 13,559 | |||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI in | |||||||||||||||||||||
cost | unrealized | unrealized | value | accumulated | |||||||||||||||||||||
or cost | gains | losses | other | ||||||||||||||||||||||
comprehensive | |||||||||||||||||||||||||
income (1) | |||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||
U.S. government | $ | 880,251 | 131,250 | 2,054 | 1,009,447 | — | |||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 744,623 | 129,001 | — | 873,624 | — | ||||||||||||||||||||
States and political subdivisions | 3,891,615 | 587,357 | 5,339 | 4,473,633 | — | ||||||||||||||||||||
Foreign government | 460,615 | 63,379 | — | 523,994 | — | ||||||||||||||||||||
Public utilities | 4,512,465 | 882,652 | 738 | 5,394,379 | 975 | ||||||||||||||||||||
Corporate securities | 35,834,283 | 5,135,779 | 32,590 | 40,937,472 | 9,996 | ||||||||||||||||||||
Mortgage-backed securities | 13,263,966 | 1,629,977 | 246 | 14,893,697 | 979 | ||||||||||||||||||||
Collateralized mortgage obligations | 15,225 | 1,940 | 15 | 17,150 | — | ||||||||||||||||||||
Collateralized debt obligations | 48,993 | 5,867 | 94 | 54,766 | 5,454 | ||||||||||||||||||||
Total fixed-maturity securities, available-for-sale | 59,652,036 | 8,567,202 | 41,076 | 68,178,162 | 17,404 | ||||||||||||||||||||
Fixed-maturity securities, held-to-maturity: | |||||||||||||||||||||||||
Corporate securities | $ | 138 | 24 | — | 162 | — | |||||||||||||||||||
Collateralized debt obligations | 474,936 | 11,617 | — | 486,553 | — | ||||||||||||||||||||
Total fixed-maturity securities, held-to-maturity | 475,074 | 11,641 | — | 486,715 | — | ||||||||||||||||||||
Total available-for-sale and held-to-maturity securities | $ | 60,127,110 | 8,578,843 | 41,076 | 68,664,877 | 17,404 | |||||||||||||||||||
-1 | The amount represents the net unrealized gain or loss on other-than-temporarily impaired securities. It includes the portion of OTTI losses in accumulated other comprehensive income, which was not included in earnings. | ||||||||||||||||||||||||
Net Unrealized Gains on Available-for-Sale Securities and Ineffective Portion of Cash Flow Hedges | ' | ||||||||||||||||||||||||
The net unrealized gains on available-for-sale securities and ineffective portion of cash flow hedges consist of the following at December 31: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||
Fixed maturity | $ | 3,697,314 | 8,526,126 | 5,877,872 | |||||||||||||||||||||
Equity | — | — | — | ||||||||||||||||||||||
Cash flow hedges | 1,570 | 2,251 | 4,964 | ||||||||||||||||||||||
Adjustments for: | |||||||||||||||||||||||||
Shadow adjustments | (2,174,866 | ) | (5,114,147 | ) | (3,001,532 | ) | |||||||||||||||||||
Deferred taxes | (533,407 | ) | (1,194,981 | ) | (1,002,627 | ) | |||||||||||||||||||
Net unrealized gains | $ | 990,611 | 2,219,249 | 1,878,677 | |||||||||||||||||||||
Proceeds from Sale of Available-For-Sale and Trading Investments | ' | ||||||||||||||||||||||||
Proceeds from sales of available-for-sale and trading investments for the years ended December 31 are presented in the following table: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||
Proceeds from sales | $ | 2,503,974 | 3,156,402 | 3,652,020 | |||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Proceeds from sales | 134,400 | 348,635 | 4,884 | ||||||||||||||||||||||
Trading: | |||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||
Proceeds from sales | — | — | 127,704 | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Proceeds from sales | 46,109 | 17,180 | 2,026 | ||||||||||||||||||||||
Unrealized Losses on Available-For-Sale Securities and Related Fair Value | ' | ||||||||||||||||||||||||
Unrealized losses on available-for-sale securities and the related fair value for the respective years ended December 31 are shown below: | |||||||||||||||||||||||||
12 months or less | Greater than 12 months | Total | |||||||||||||||||||||||
Fair value | Unrealized | Fair value | Unrealized | Fair value | Unrealized | ||||||||||||||||||||
losses | losses | losses | |||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||
U.S. government | $ | 406,462 | 2,334 | 4,404 | 744 | 410,866 | 3,078 | ||||||||||||||||||
U.S. government agency | 688 | 13 | — | — | 688 | 13 | |||||||||||||||||||
States and political subdivisions | 1,847,094 | 113,718 | 38,616 | 5,820 | 1,885,710 | 119,538 | |||||||||||||||||||
Foreign government | 2,244 | 156 | — | — | 2,244 | 156 | |||||||||||||||||||
Public utilities | 480,124 | 19,904 | 27,946 | 4,048 | 508,070 | 23,952 | |||||||||||||||||||
Corporate securities | 8,969,453 | 437,577 | 309,527 | 32,581 | 9,278,980 | 470,158 | |||||||||||||||||||
Mortgage-backed securities | 902,186 | 19,735 | 4,295 | 176 | 906,481 | 19,911 | |||||||||||||||||||
CMOs | — | — | — | — | — | — | |||||||||||||||||||
CDOs | 20,064 | 105 | — | — | 20,064 | 105 | |||||||||||||||||||
Total temporarily impaired securities | $ | 12,628,315 | 593,542 | 384,788 | 43,369 | 13,013,103 | 636,911 | ||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||
U.S. government | $ | 95,094 | 2,054 | — | — | 95,094 | 2,054 | ||||||||||||||||||
States and political subdivisions | 228,424 | 5,339 | — | — | 228,424 | 5,339 | |||||||||||||||||||
Public utilities | 16,817 | 253 | 8,266 | 485 | 25,083 | 738 | |||||||||||||||||||
Corporate securities | 764,119 | 15,946 | 220,463 | 16,644 | 984,582 | 32,590 | |||||||||||||||||||
Mortgage-backed securities | 27,618 | 246 | 20 | — | 27,638 | 246 | |||||||||||||||||||
CMOs | 607 | 15 | — | — | 607 | 15 | |||||||||||||||||||
CDOs | 4,613 | 94 | — | — | 4,613 | 94 | |||||||||||||||||||
Total temporarily impaired securities | $ | 1,137,292 | 23,947 | 228,749 | 17,129 | 1,366,041 | 41,076 | ||||||||||||||||||
Cumulative Credit Impairments on Fixed-maturity Securities | ' | ||||||||||||||||||||||||
The following table presents a rollforward of the Company’s cumulative credit impairments on fixed-maturity securities held at December 31: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Balance as of January 1 | $ | 60,128 | 60,620 | ||||||||||||||||||||||
Additions for credit impairments recognized on (1): | |||||||||||||||||||||||||
Securities not previously impaired | 1,870 | 28,768 | |||||||||||||||||||||||
Securities previously impaired | 91 | — | |||||||||||||||||||||||
Securities that the Company intends to sell or more likely than not be required to sell before recovery (interest) | 13,087 | — | |||||||||||||||||||||||
Reductions for credit impairments previously on: | |||||||||||||||||||||||||
Securities that matured, were sold, or were liquidated during the period | (29,454 | ) | (29,260 | ) | |||||||||||||||||||||
Securities due to an increase in expected cash flows | — | — | |||||||||||||||||||||||
Balance as of December 31 | $ | 45,722 | 60,128 | ||||||||||||||||||||||
-1 | There were $15,048 and $28,768 of additions included in the net OTTI losses recognized in realized investment gains, net in the Consolidated Statements of Operations for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||
Gross and Net Realized Investment Gains (Losses) | ' | ||||||||||||||||||||||||
Gross and net realized investment gains (losses) for the years ended December 31, are summarized as follows: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||
Gross gains on sales and exchanges | $ | 160,091 | 294,642 | 179,387 | |||||||||||||||||||||
Gross losses on sales and exchanges | (36,798 | ) | (52,449 | ) | (65,414 | ) | |||||||||||||||||||
OTTI | (14,957 | ) | (10,506 | ) | (21,074 | ) | |||||||||||||||||||
Net gains on fixed-maturity securities | 108,336 | 231,687 | 92,899 | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Gross gains on sales | — | 11,972 | — | ||||||||||||||||||||||
Gross losses on sales | — | (562 | ) | (227 | ) | ||||||||||||||||||||
Net gains (losses) on equity securities | — | 11,410 | (227 | ) | |||||||||||||||||||||
Net gains on available-for-sale securities | 108,336 | 243,097 | 92,672 | ||||||||||||||||||||||
Held-to-maturity: | |||||||||||||||||||||||||
Gross gains on exchanges | 44,179 | 1,342 | 9,767 | ||||||||||||||||||||||
Gross losses on exchanges | (11 | ) | — | — | |||||||||||||||||||||
OTTI | (91 | ) | (18,262 | ) | (413 | ) | |||||||||||||||||||
Net gains (losses) on held-to-maturity securities | 44,077 | (16,920 | ) | 9,354 | |||||||||||||||||||||
Benefit (provision) for mortgage loans on real estate | 18,500 | (10,232 | ) | 32,325 | |||||||||||||||||||||
Gains (losses) for mortgage loans on real estate | 4,929 | — | (1,580 | ) | |||||||||||||||||||||
Investment in affiliates | 11,810 | — | — | ||||||||||||||||||||||
(Loss) gain on real estate sales | (29 | ) | — | (19,396 | ) | ||||||||||||||||||||
Impairments on real estate | — | (4,538 | ) | — | |||||||||||||||||||||
Net gains on sales of acquired loans | 674 | 5,154 | — | ||||||||||||||||||||||
Other | — | 11,140 | 18 | ||||||||||||||||||||||
Net realized investment gains | $ | 188,297 | 227,701 | 113,393 | |||||||||||||||||||||
Interest and Similar Income, Net | ' | ||||||||||||||||||||||||
Major categories of interest and similar income, net, for the respective years ended December 31 are shown below: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Interest and similar income: | |||||||||||||||||||||||||
Available-for-sale fixed-maturity securities | $ | 3,185,680 | 3,210,655 | 3,082,859 | |||||||||||||||||||||
Mortgage loans on real estate | 367,196 | 367,506 | 357,394 | ||||||||||||||||||||||
Investment income (loss) on trading securities | 9,735 | 4,624 | (606 | ) | |||||||||||||||||||||
Held-to-maturity fixed-maturity securities | 26,781 | 38,618 | 72,933 | ||||||||||||||||||||||
Rental income on real estate | 1,462 | 2,943 | 19,662 | ||||||||||||||||||||||
Interest on loans to affiliates | 1,549 | 2,614 | 8,435 | ||||||||||||||||||||||
Interest on acquired loans | 27,817 | 31,085 | 1,127 | ||||||||||||||||||||||
Interest rate swaps | 697 | 3,314 | 17,755 | ||||||||||||||||||||||
Other invested assets | 196 | 72 | 1,019 | ||||||||||||||||||||||
Policy loans | 10,461 | 10,177 | 11,005 | ||||||||||||||||||||||
Short-term securities | 5,575 | 4,872 | 4,380 | ||||||||||||||||||||||
Interest on assets held by reinsurers | 2,915 | 3,043 | 3,162 | ||||||||||||||||||||||
Total | 3,640,064 | 3,679,523 | 3,579,125 | ||||||||||||||||||||||
Less investment expenses | 47,947 | 47,117 | 59,109 | ||||||||||||||||||||||
Total interest and similar income, net | $ | 3,592,117 | 3,632,406 | 3,520,016 | |||||||||||||||||||||
Investment in Mortgage Loans on Real Estate | ' | ||||||||||||||||||||||||
The Company’s investment in mortgage loans on real estate at December 31 is summarized as follows: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||
Commercial | $ | 6,200,697 | 6,129,542 | ||||||||||||||||||||||
Residential | 578 | 1,042 | |||||||||||||||||||||||
Valuation allowances | (66,750 | ) | (85,250 | ) | |||||||||||||||||||||
Total mortgage loans on real estate | $ | 6,134,525 | 6,045,334 | ||||||||||||||||||||||
Valuation Allowances on Mortgage Loans on Real Estate | ' | ||||||||||||||||||||||||
The valuation allowances on mortgage loans on real estate at December 31 and the changes in the allowance for the years then ended are summarized as follows: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Balance, beginning of year | $ | 85,250 | 75,018 | 107,343 | |||||||||||||||||||||
(Benefit) provision charged to operations | (18,500 | ) | 10,232 | (32,325 | ) | ||||||||||||||||||||
Balance, end of year | $ | 66,750 | 85,250 | 75,018 | |||||||||||||||||||||
Available-for-sale Securities | ' | ||||||||||||||||||||||||
Amortized Cost and Fair Value of Fixed Maturity Securities, by Contractual Maturity | ' | ||||||||||||||||||||||||
The amortized cost and fair value of available-for-sale fixed-maturity securities at December 31, 2013, by contractual maturity, are shown below: | |||||||||||||||||||||||||
Amortized | Fair value | ||||||||||||||||||||||||
cost | |||||||||||||||||||||||||
Available-for-sale fixed-maturity securities: | |||||||||||||||||||||||||
Due in one year or less | $ | 1,211,284 | 1,241,135 | ||||||||||||||||||||||
Due after one year through five years | 9,976,377 | 10,992,907 | |||||||||||||||||||||||
Due after five years through ten years | 18,583,011 | 19,365,467 | |||||||||||||||||||||||
Due after ten years | 21,254,680 | 22,264,708 | |||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | 11,681,056 | 12,539,505 | |||||||||||||||||||||||
Total available-for-sale fixed-maturity securities | $ | 62,706,408 | 66,403,722 | ||||||||||||||||||||||
Held-to-maturity Securities | ' | ||||||||||||||||||||||||
Amortized Cost and Fair Value of Fixed Maturity Securities, by Contractual Maturity | ' | ||||||||||||||||||||||||
The amortized cost and fair value of held-to-maturity fixed-maturity securities at December 31, 2013, by contractual maturity, are shown below: | |||||||||||||||||||||||||
Amortized | Fair value | ||||||||||||||||||||||||
cost | |||||||||||||||||||||||||
Held-to-maturity fixed-maturity securities: | |||||||||||||||||||||||||
Due after one year through five years | $ | 110 | 129 | ||||||||||||||||||||||
Due after ten years | 220,642 | 219,387 | |||||||||||||||||||||||
Total held-to-maturity fixed-maturity securities | $ | 220,752 | 219,516 | ||||||||||||||||||||||
Derivatives_and_Hedging_Instru1
Derivatives and Hedging Instruments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Components of Gains or Losses Related to Derivatives that Qualify as Cash Flow Hedges | ' | ||||||||||||||||||||||||
The following table presents the components of the gains or losses related to derivatives that qualify as cash flow hedges: | |||||||||||||||||||||||||
Amount of (losses) gains | |||||||||||||||||||||||||
recognized at December 31 | |||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Interest rate swaps, net of tax (benefit) expense of ($238), ($950), and ($6,542), at December 31, 2013, 2012, and 2011, respectively | $ | (443 | ) | (1,763 | ) | (12,149 | ) | ||||||||||||||||||
Company Held Options Purchased (Asset) and Options Sold (Liability) with Amortized Cost Basis, Fair Value, and Notional Amounts | ' | ||||||||||||||||||||||||
As of December 31, the Company held options purchased (asset) and options sold (liability) with the following amortized cost basis, fair value, and notional amounts: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Options: | |||||||||||||||||||||||||
Purchased (asset): | |||||||||||||||||||||||||
Amortized cost | $ | 397,427 | 360,834 | ||||||||||||||||||||||
Fair value | 603,043 | 288,296 | |||||||||||||||||||||||
Notional | 29,396,102 | 19,359,512 | |||||||||||||||||||||||
Sold (liability): | |||||||||||||||||||||||||
Basis | $ | 305,781 | 126,873 | ||||||||||||||||||||||
Fair value | 415,813 | 78,060 | |||||||||||||||||||||||
Notional | 25,178,432 | 13,969,973 | |||||||||||||||||||||||
Balance Sheet Location and Fair Value of Derivatives | ' | ||||||||||||||||||||||||
The following table presents the balance sheet location and the fair value of the derivatives, including embedded derivatives, for both cash flow hedges and nonqualifying strategies as of December 31: | |||||||||||||||||||||||||
Fair value | |||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments | 2013 | 2012 | |||||||||||||||||||||||
Interest rate swaps | $ | 1,570 | 2,251 | ||||||||||||||||||||||
Total cash flow hedging instruments | 1,570 | 2,251 | |||||||||||||||||||||||
Derivatives designated as nonqualifying hedging instruments and certain hedged | |||||||||||||||||||||||||
items, net | |||||||||||||||||||||||||
OTC | 184,313 | 211,032 | |||||||||||||||||||||||
ETO | 381 | (2,572 | ) | ||||||||||||||||||||||
SAR | 2,536 | 1,777 | |||||||||||||||||||||||
GMWB | (45,772 | ) | (957,865 | ) | |||||||||||||||||||||
GMAB | (107,973 | ) | (345,703 | ) | |||||||||||||||||||||
MVLO | (11,756,097 | ) | (9,657,994 | ) | |||||||||||||||||||||
CDO embedded derivative | 3,819 | 3,938 | |||||||||||||||||||||||
TRS | (24,405 | ) | (47,759 | ) | |||||||||||||||||||||
Other embedded derivative | 1,903 | 2,526 | |||||||||||||||||||||||
Interest rate swaps | (730,399 | ) | 39,131 | ||||||||||||||||||||||
Total nonqualifying hedging instruments | (12,471,694 | ) | (10,753,489 | ) | |||||||||||||||||||||
Total derivative instruments | $ | (12,470,124 | ) | (10,751,238 | ) | ||||||||||||||||||||
Location in Consolidated Balance Sheets | |||||||||||||||||||||||||
Derivatives | $ | 831,707 | 490,149 | ||||||||||||||||||||||
Account balances and future policy benefit reserves | (11,909,842 | ) | (10,961,562 | ) | |||||||||||||||||||||
Derivative liability | (1,391,989 | ) | (279,825 | ) | |||||||||||||||||||||
Total derivative instruments | $ | (12,470,124 | ) | (10,751,238 | ) | ||||||||||||||||||||
Gains or Losses Recognized in Income | ' | ||||||||||||||||||||||||
The following table presents the gains or losses recognized in income on the various nonqualifying strategies: | |||||||||||||||||||||||||
Derivatives | Amount of (losses) gains on | ||||||||||||||||||||||||
designated as | derivatives recognized for the | ||||||||||||||||||||||||
nonqualifying hedging | years ended December 31 | ||||||||||||||||||||||||
instruments and | |||||||||||||||||||||||||
certain hedged item, net | Location in Consolidated Statements of Operations | 2013 | 2012 | 2011 | |||||||||||||||||||||
MVLO | Policy fees | $ | 568,744 | 518,420 | 408,196 | ||||||||||||||||||||
MVLO | Policyholder benefits | 10,191 | (38,024 | ) | (185,844 | ) | |||||||||||||||||||
MVLO | Change in fair value of annuity embedded derivatives | (2,677,038 | ) | (1,165,614 | ) | (798,291 | ) | ||||||||||||||||||
GMWB | Change in fair value of annuity embedded derivatives | 912,073 | 59,087 | (926,603 | ) | ||||||||||||||||||||
GMAB | Change in fair value of annuity embedded derivatives | 166,904 | (33,658 | ) | (259,744 | ) | |||||||||||||||||||
Total change in fair value of annuity embedded derivatives | (1,598,061 | ) | (1,140,185 | ) | (1,984,638 | ) | |||||||||||||||||||
OTC | Change in fair value of assets and liabilities | (479,713 | ) | (198,790 | ) | 213,500 | |||||||||||||||||||
ETO | Change in fair value of assets and liabilities | (11,538 | ) | (119,830 | ) | (148,046 | ) | ||||||||||||||||||
Futures | Change in fair value of assets and liabilities | 1,693,399 | (14,930 | ) | (600,321 | ) | |||||||||||||||||||
SAR | Change in fair value of assets and liabilities | 1,823 | 1,292 | (938 | ) | ||||||||||||||||||||
CDO embedded derivative | Change in fair value of assets and liabilities | (119 | ) | (33 | ) | (128 | ) | ||||||||||||||||||
Other embedded derivatives | Change in fair value of assets and liabilities | (623 | ) | (2,151 | ) | 1,965 | |||||||||||||||||||
Forward commitments | Change in fair value of assets and liabilities | — | — | (473 | ) | ||||||||||||||||||||
Interest rate swaps | Change in fair value of assets and liabilities | (684,511 | ) | 39,610 | 317,242 | ||||||||||||||||||||
TRS | Change in fair value of assets and liabilities | 391,726 | 152,174 | 38,346 | |||||||||||||||||||||
Currency swaps | Change in fair value of assets and liabilities | — | (16,829 | ) | (25,471 | ) | |||||||||||||||||||
Total change in fair value of freestanding and other derivatives | 910,444 | (159,487 | ) | (204,324 | ) | ||||||||||||||||||||
Total derivative loss, net | $ | (108,682 | ) | (819,276 | ) | (1,966,610 | ) | ||||||||||||||||||
Derivative Assets Subject to Master Netting Arrangement | ' | ||||||||||||||||||||||||
The following tables present additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated: | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Gross amounts not | |||||||||||||||||||||||||
offset in the Balance | |||||||||||||||||||||||||
Sheet | |||||||||||||||||||||||||
Gross | Gross | Net amounts | Financial | Collateral | Net | ||||||||||||||||||||
amounts | amounts | presented | instruments (1) | pledged/ | amounts | ||||||||||||||||||||
recognized | offset in the | in the | received | ||||||||||||||||||||||
Balance Sheet | Balance Sheet | ||||||||||||||||||||||||
Derivative assets | $ | 823,449 | — | 823,449 | (700,630 | ) | (103,612 | ) | 19,207 | ||||||||||||||||
Derivative liabilities | (1,391,989 | ) | — | (1,391,989 | ) | 700,630 | 690,015 | (1,344 | ) | ||||||||||||||||
Net derivatives | $ | (568,540 | ) | — | (568,540 | ) | — | 586,403 | 17,863 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Gross amounts not | |||||||||||||||||||||||||
offset in the Balance | |||||||||||||||||||||||||
Sheet | |||||||||||||||||||||||||
Gross | Gross | Net amounts | Financial | Collateral | Net | ||||||||||||||||||||
amounts | amounts | presented | instruments (1) | pledged/ | amounts | ||||||||||||||||||||
recognized | offset in the | in the | received | ||||||||||||||||||||||
Balance Sheet | Balance Sheet | ||||||||||||||||||||||||
Derivative assets | $ | 481,908 | — | 481,908 | (259,700 | ) | (220,433 | ) | 1,775 | ||||||||||||||||
Derivative liabilities | (279,825 | ) | — | (279,825 | ) | 259,700 | 16,072 | (4,053 | ) | ||||||||||||||||
Net derivatives | $ | 202,083 | — | 202,083 | — | (204,361 | ) | (2,278 | ) | ||||||||||||||||
-1 | Represents the amount of assets or liabilities that could be offset by liabilities or assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. | ||||||||||||||||||||||||
Derivative Liabilities Subject to Master Netting Arrangement | ' | ||||||||||||||||||||||||
The following tables present additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated: | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Gross amounts not | |||||||||||||||||||||||||
offset in the Balance | |||||||||||||||||||||||||
Sheet | |||||||||||||||||||||||||
Gross | Gross | Net amounts | Financial | Collateral | Net | ||||||||||||||||||||
amounts | amounts | presented | instruments (1) | pledged/ | amounts | ||||||||||||||||||||
recognized | offset in the | in the | received | ||||||||||||||||||||||
Balance Sheet | Balance Sheet | ||||||||||||||||||||||||
Derivative assets | $ | 823,449 | — | 823,449 | (700,630 | ) | (103,612 | ) | 19,207 | ||||||||||||||||
Derivative liabilities | (1,391,989 | ) | — | (1,391,989 | ) | 700,630 | 690,015 | (1,344 | ) | ||||||||||||||||
Net derivatives | $ | (568,540 | ) | — | (568,540 | ) | — | 586,403 | 17,863 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Gross amounts not | |||||||||||||||||||||||||
offset in the Balance | |||||||||||||||||||||||||
Sheet | |||||||||||||||||||||||||
Gross | Gross | Net amounts | Financial | Collateral | Net | ||||||||||||||||||||
amounts | amounts | presented | instruments (1) | pledged/ | amounts | ||||||||||||||||||||
recognized | offset in the | in the | received | ||||||||||||||||||||||
Balance Sheet | Balance Sheet | ||||||||||||||||||||||||
Derivative assets | $ | 481,908 | — | 481,908 | (259,700 | ) | (220,433 | ) | 1,775 | ||||||||||||||||
Derivative liabilities | (279,825 | ) | — | (279,825 | ) | 259,700 | 16,072 | (4,053 | ) | ||||||||||||||||
Net derivatives | $ | 202,083 | — | 202,083 | — | (204,361 | ) | (2,278 | ) | ||||||||||||||||
-1 | Represents the amount of assets or liabilities that could be offset by liabilities or assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||||||||||||||
The following tables present the assets and liabilities measured at fair value on a recurring basis and their corresponding level in the fair value hierarchy at December 31: | |||||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||
Assets accounted for at fair value: | |||||||||||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. government | $ | 1,158,859 | 1,158,859 | — | — | ||||||||||||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 511,829 | — | 511,829 | — | |||||||||||||||||||||||||||||
States and political subdivisions | 4,958,360 | — | 4,958,360 | — | |||||||||||||||||||||||||||||
Foreign government | 365,234 | — | 331,950 | 33,284 | |||||||||||||||||||||||||||||
Public utilities | 5,136,210 | — | 4,935,015 | 201,195 | |||||||||||||||||||||||||||||
Corporate securities | 41,676,852 | — | 37,949,049 | 3,727,803 | |||||||||||||||||||||||||||||
Mortgage-backed securities | 12,525,293 | — | 12,522,213 | 3,080 | |||||||||||||||||||||||||||||
CMOs | 14,212 | — | 14,212 | — | |||||||||||||||||||||||||||||
CDOs | 56,873 | — | — | 56,873 | |||||||||||||||||||||||||||||
Derivative investments | 831,707 | 1,151 | 821,890 | 8,666 | |||||||||||||||||||||||||||||
Equity securities, available for sale | 29,112 | 29,112 | — | — | |||||||||||||||||||||||||||||
Equity securities, trading | 227,822 | 206,500 | 21,322 | — | |||||||||||||||||||||||||||||
Corporate-owned life insurance | 290,752 | — | 290,752 | — | |||||||||||||||||||||||||||||
Separate account assets | 30,747,777 | 30,747,777 | — | — | |||||||||||||||||||||||||||||
Total assets accounted for at fair value | $ | 98,530,892 | 32,143,399 | 62,356,592 | 4,030,901 | ||||||||||||||||||||||||||||
Liabilities accounted for at fair value: | |||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 1,391,989 | 770 | 1,361,968 | 29,251 | ||||||||||||||||||||||||||||
Separate account liabilities | 30,747,777 | 30,747,777 | — | — | |||||||||||||||||||||||||||||
Reserves at fair value (1) | 11,943,461 | — | — | 11,943,461 | |||||||||||||||||||||||||||||
Total liabilities accounted for at fair value | $ | 44,083,227 | 30,748,547 | 1,361,968 | 11,972,712 | ||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||||||||||
Assets accounted for at fair value: | |||||||||||||||||||||||||||||||||
Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. government | $ | 1,009,447 | 1,009,447 | — | — | ||||||||||||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 873,624 | — | 873,624 | — | |||||||||||||||||||||||||||||
States and political subdivisions | 4,473,633 | — | 4,473,633 | — | |||||||||||||||||||||||||||||
Foreign government | 523,994 | — | 489,088 | 34,906 | |||||||||||||||||||||||||||||
Public utilities | 5,394,379 | — | 5,201,217 | 193,162 | |||||||||||||||||||||||||||||
Corporate securities | 40,937,472 | — | 37,435,895 | 3,501,577 | |||||||||||||||||||||||||||||
Mortgage-backed securities | 14,893,697 | — | 14,888,908 | 4,789 | |||||||||||||||||||||||||||||
CMOs | 17,150 | — | 17,150 | — | |||||||||||||||||||||||||||||
CDOs | 54,766 | — | — | 54,766 | |||||||||||||||||||||||||||||
Derivative investments | 490,149 | 2,596 | 479,669 | 7,884 | |||||||||||||||||||||||||||||
Equity securities, trading | 31,837 | 18,979 | 12,858 | — | |||||||||||||||||||||||||||||
Separate account assets | 25,670,675 | 25,670,675 | — | — | |||||||||||||||||||||||||||||
Total assets accounted for at fair value | $ | 94,370,823 | 26,701,697 | 63,872,042 | 3,797,084 | ||||||||||||||||||||||||||||
Liabilities accounted for at fair value: | |||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 279,825 | 5,167 | 222,953 | 51,705 | ||||||||||||||||||||||||||||
Separate account liabilities | 25,670,675 | 25,670,675 | — | — | |||||||||||||||||||||||||||||
Reserves at fair value (1) | 10,961,562 | — | — | 10,961,562 | |||||||||||||||||||||||||||||
Total liabilities accounted for at fair value | $ | 36,912,062 | 25,675,842 | 222,953 | 11,013,267 | ||||||||||||||||||||||||||||
-1 | Reserves at fair value are reported in account balances and future policy benefit reserves on the Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||
Reconciliation of the Beginning and Ending Balances for the Company's Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances for the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||
Realized | |||||||||||||||||||||||||||||||||
gains (losses) | |||||||||||||||||||||||||||||||||
included | |||||||||||||||||||||||||||||||||
in net | |||||||||||||||||||||||||||||||||
income | |||||||||||||||||||||||||||||||||
Total realized/unrealized | related to | ||||||||||||||||||||||||||||||||
gains (losses) included in | financial | ||||||||||||||||||||||||||||||||
Other | Purchases | Sales | Transfer into | instruments | |||||||||||||||||||||||||||||
Beginning | comprehensive | and | and | and/or out of | Ending | still held at | |||||||||||||||||||||||||||
balance | Net income | income (loss) | issuances | settlements | Level 3, net | balance | December 31 | ||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Foreign government | $ | 34,906 | — | (1,622 | ) | — | — | — | 33,284 | — | |||||||||||||||||||||||
Public utilities | 193,162 | — | (10,278 | ) | 68,300 | (679 | ) | (49,310 | ) | 201,195 | — | ||||||||||||||||||||||
Corporate securities | 3,501,577 | 3,344 | (237,236 | ) | 549,744 | (89,626 | ) | — | 3,727,803 | 140 | |||||||||||||||||||||||
CDOs | 54,766 | 2,009 | 6,413 | — | (6,316 | ) | — | 56,872 | 1,984 | ||||||||||||||||||||||||
Mortgage-backed securities | 4,789 | 91 | 68 | — | (1,868 | ) | — | 3,080 | 86 | ||||||||||||||||||||||||
Total fixed-maturity securities | $ | 3,789,200 | 5,444 | (242,655 | ) | 618,044 | (98,489 | ) | (49,310 | ) | 4,022,234 | 2,210 | |||||||||||||||||||||
Derivative assets | $ | 7,884 | 593,079 | — | — | (592,297 | ) | — | 8,666 | 782 | |||||||||||||||||||||||
Derivative liabilities | (51,705 | ) | (242,038 | ) | — | — | 264,492 | — | (29,251 | ) | 22,453 | ||||||||||||||||||||||
Reserves at fair value | (10,961,562 | ) | (1,015,824 | ) | — | (1,232,687 | ) | 1,266,612 | — | (11,943,461 | ) | (2,248,511 | ) | ||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Foreign government | $ | 32,382 | — | 2,524 | — | — | — | 34,906 | — | ||||||||||||||||||||||||
Public utilities | 58,796 | — | 11,366 | 123,000 | — | — | 193,162 | — | |||||||||||||||||||||||||
Corporate securities | 2,523,244 | 670 | 136,784 | 862,500 | (21,621 | ) | — | 3,501,577 | 341 | ||||||||||||||||||||||||
CDOs | 66,958 | 2,899 | 1,638 | — | (16,729 | ) | — | 54,766 | 2,268 | ||||||||||||||||||||||||
Mortgage-backed securities | 69,189 | 262 | (24 | ) | — | (1,749 | ) | (62,889 | ) | 4,789 | 262 | ||||||||||||||||||||||
Total fixed-maturity securities | $ | 2,750,569 | 3,381 | 152,288 | 985,500 | (40,099 | ) | (62,889 | ) | 3,789,200 | 2,871 | ||||||||||||||||||||||
Derivative assets | $ | 70,145 | 512,096 | — | — | (574,357 | — | 7,884 | (57,935 | ) | |||||||||||||||||||||||
Derivative liabilities | (7,059 | ) | (408,325 | ) | — | — | 363,679 | — | (51,705 | ) | (44,646 | ) | |||||||||||||||||||||
Reserves at fair value | (10,612,779 | ) | (793,258 | ) | — | (1,143,374 | ) | 1,587,849 | — | (10,961,562 | ) | 1,936,632 | |||||||||||||||||||||
Significant Unobservable Inputs Used in Fair Value Measurements for Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||||||||||||||
The following table provides a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities on a recurring basis at December 31: | |||||||||||||||||||||||||||||||||
Fair | Valuation Technique | Unobservable | Range (weighted | ||||||||||||||||||||||||||||||
value | input | average) | |||||||||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||||||||||
Fixed-maturity securities: | |||||||||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Foreign government | $ | 33,284 | Matrix pricing | Option adjusted spread | 160–164 (161) | ||||||||||||||||||||||||||||
Public utilities | 201,195 | Matrix pricing | Option adjusted spread | 72–311 (176) | |||||||||||||||||||||||||||||
Corporate securities | 3,727,803 | Matrix pricing | Option adjusted spread | 30–486 (177) | |||||||||||||||||||||||||||||
CDOs | 56,873 | Intex discounted cash flows | Constant prepayment rate | 0–25.0% (0.7%) | |||||||||||||||||||||||||||||
Annual default rate | 0.5–62.5% (5.1%) | ||||||||||||||||||||||||||||||||
Loss severity | 10–80.0% (56.1%) | ||||||||||||||||||||||||||||||||
Delinquencies | 0–32.0% (1.0%) | ||||||||||||||||||||||||||||||||
Discount Margin to LIBOR | 1.7–10.7% (5.4%) | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | 3,080 | Intex discounted cash flows | Constant prepayment rate | 1.5–2.0% (2.0%) | |||||||||||||||||||||||||||||
Annual default rate | 15.0-90.0% (20.0%) | ||||||||||||||||||||||||||||||||
Loss severity | 55.0–70.0% (57.6%) | ||||||||||||||||||||||||||||||||
Delinquencies | 5.0–30.0% (16.8%) | ||||||||||||||||||||||||||||||||
Discount Margin to LIBOR | 4.2–4.2% (4.2%) | ||||||||||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||||||||||
TRS | $ | 4,847 | Third-Party Vendor | Spread and discount rates | * | ||||||||||||||||||||||||||||
CDO embedded derivative | 3,819 | Discounted cash flow | Prepayment rates | * | |||||||||||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||||||||||
TRS | (29,251 | ) | Third-Party Vendor | Spread and discount rates | * | ||||||||||||||||||||||||||||
Reserves at Fair Value: | |||||||||||||||||||||||||||||||||
MVLO | $ | (11,756,097 | ) | Discounted cash flow | Annuitizations | 0–25% | |||||||||||||||||||||||||||
Surrenders | 0–25% | ||||||||||||||||||||||||||||||||
Mortality** | 0–100% | ||||||||||||||||||||||||||||||||
Withdrawal Benefit Election | 0–50% | ||||||||||||||||||||||||||||||||
GMWB and GMAB | (153,745 | ) | Discounted cash flow | Surrenders | 0.5–35% | ||||||||||||||||||||||||||||
Mortality** | 0–100% | ||||||||||||||||||||||||||||||||
* | Management does not have insight into the specific assumptions used. See narrative below for qualitative discussion. | ||||||||||||||||||||||||||||||||
** | Mortality assumptions are derived by applying management determined factors to the Annuity 2000 Mortality Table for MVLO and actively issued GMWB and GMAB and the 1994 MGDB Mortality Table for all other GMWB and GMAB. | ||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | ' | ||||||||||||||||||||||||||||||||
The following table presents the carrying amounts and fair values of financial assets and liabilities at December 31: | |||||||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||
Carrying | Fair value | ||||||||||||||||||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||
Held-to-maturity fixed-maturity securities | $ | 220,752 | — | — | 219,516 | 219,516 | |||||||||||||||||||||||||||
Mortgage loans on real estate | 6,134,525 | — | 6,554,054 | 6,554,054 | |||||||||||||||||||||||||||||
Loans to affiliates | 1,191,170 | — | 1,191,170 | — | 1,191,170 | ||||||||||||||||||||||||||||
Policy loans | 158,217 | — | 158,217 | — | 158,217 | ||||||||||||||||||||||||||||
Acquired loans | 205,131 | — | 162,320 | 85,238 | 247,558 | ||||||||||||||||||||||||||||
Other invested assets | 50,046 | — | — | 50,046 | 50,046 | ||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||
Investment contracts | $ | 71,735,796 | — | — | 72,477,568 | 72,477,568 | |||||||||||||||||||||||||||
Mortgage notes payable | 99,210 | — | — | 112,884 | 112,884 | ||||||||||||||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||
Carrying | Fair value | ||||||||||||||||||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||
Held-to-maturity fixed-maturity securities | $ | 475,074 | — | — | 486,715 | 486,715 | |||||||||||||||||||||||||||
Mortgage loans on real estate | 6,045,334 | — | — | 6,773,362 | 6,773,362 | ||||||||||||||||||||||||||||
Loans to affiliates | 28,725 | — | — | 29,720 | 29,720 | ||||||||||||||||||||||||||||
Policy loans | 163,768 | — | 163,768 | — | 163,768 | ||||||||||||||||||||||||||||
Acquired loans | 216,062 | — | 204,632 | 35,365 | 239,997 | ||||||||||||||||||||||||||||
Real Estate - held for sale | 15,500 | — | 15,500 | — | 15,500 | ||||||||||||||||||||||||||||
Other invested assets | 23,262 | — | — | 23,262 | 23,262 | ||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||
Investment contracts | $ | 69,286,685 | — | — | 70,143,265 | 70,143,265 | |||||||||||||||||||||||||||
Mortgage notes payable | 105,858 | — | — | 129,065 | 129,065 |
Financing_Receivables_Tables
Financing Receivables (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Allowances For Credit Losses And Investment in Financing Receivables | ' | ||||||||||||||||||||||||
The allowances for credit losses and recorded investment in financing receivables as of December 31 are shown below: | |||||||||||||||||||||||||
Mortgage | Nontrade | Total | |||||||||||||||||||||||
loans | receivables | ||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||
Beginning balance | $ | 85,250 | 6,892 | 92,142 | |||||||||||||||||||||
Benefit | (18,500 | ) | (675 | ) | (19,175 | ) | |||||||||||||||||||
Ending balance | 66,750 | 6,217 | 72,967 | ||||||||||||||||||||||
Ending balance individually evaluated for impairment | 26,750 | 1,505 | 28,255 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 40,000 | 4,712 | 44,712 | |||||||||||||||||||||
Financing receivables: | |||||||||||||||||||||||||
Ending balance | $ | 6,201,275 | 28,789 | 6,230,064 | |||||||||||||||||||||
Ending balance individually evaluated for impairment | 116,750 | 1,505 | 118,255 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 6,084,525 | 27,284 | 6,111,809 | |||||||||||||||||||||
Mortgage | Nontrade | Total | |||||||||||||||||||||||
loans | receivables | ||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||
Beginning balance | $ | 75,018 | 8,871 | 83,889 | |||||||||||||||||||||
Provision (benefit) | 10,232 | (1,979 | ) | 8,253 | |||||||||||||||||||||
Ending balance | 85,250 | 6,892 | 92,142 | ||||||||||||||||||||||
Ending balance individually evaluated for impairment | 40,250 | 1,361 | 41,611 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 45,000 | 5,531 | 50,531 | |||||||||||||||||||||
Financing receivables: | |||||||||||||||||||||||||
Ending balance | $ | 6,130,584 | 22,377 | 6,152,961 | |||||||||||||||||||||
Ending balance individually evaluated for impairment | 116,750 | 1,361 | 118,111 | ||||||||||||||||||||||
Ending balance collectively evaluated for impairment | $ | 6,013,834 | 21,016 | 6,034,850 | |||||||||||||||||||||
Loan-to-Value Analysis | ' | ||||||||||||||||||||||||
The loan-to-value analysis as of December 31 is shown below: | |||||||||||||||||||||||||
Commercial | Residential | Total | |||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Less than 50% | $ | 2,025,011 | 32.7 | % | $ | 578 | 100 | % | $ | 2,025,589 | 32.7 | % | |||||||||||||
50% – 60% | 1,668,987 | 26.9 | — | — | 1,668,987 | 26.9 | |||||||||||||||||||
60% – 70% | 1,622,171 | 26.2 | — | — | 1,622,171 | 26.2 | |||||||||||||||||||
70% – 80% | 477,096 | 7.7 | — | — | 477,096 | 7.7 | |||||||||||||||||||
80% – 90% | 168,964 | 2.7 | — | — | 168,964 | 2.7 | |||||||||||||||||||
90% – 100% | — | — | — | — | — | — | |||||||||||||||||||
Greater than 100% | 238,468 | 3.8 | — | — | 238,468 | 3.8 | |||||||||||||||||||
Total | $ | 6,200,697 | 100 | % | $ | 578 | 100 | % | $ | 6,201,275 | 100 | % | |||||||||||||
Commercial | Residential | Total | |||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Less than 50% | $ | 1,735,242 | 28.3 | % | $ | 1,042 | 100 | % | $ | 1,736,284 | 28.3 | % | |||||||||||||
50% – 60% | 1,859,780 | 30.3 | — | — | 1,859,780 | 30.3 | |||||||||||||||||||
60% – 70% | 1,124,262 | 18.3 | — | — | 1,124,262 | 18.3 | |||||||||||||||||||
70% – 80% | 960,158 | 15.7 | — | — | 960,158 | 15.7 | |||||||||||||||||||
80% – 90% | 205,356 | 3.4 | — | — | 205,356 | 3.3 | |||||||||||||||||||
90% – 100% | 95,890 | 1.6 | — | — | 95,890 | 1.6 | |||||||||||||||||||
Greater than 100% | 148,854 | 2.4 | — | — | 148,854 | 2.5 | |||||||||||||||||||
Total | $ | 6,129,542 | 100 | % | $ | 1,042 | 100 | % | $ | 6,130,584 | 100 | % | |||||||||||||
Debt Service Coverage Ratio | ' | ||||||||||||||||||||||||
The debt service coverage ratio as of December 31 is shown below: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Debt service coverage ratio: | |||||||||||||||||||||||||
Greater than 1.4x | $ | 4,103,809 | 4,156,144 | ||||||||||||||||||||||
1.2x – 1.4x | 955,230 | 776,303 | |||||||||||||||||||||||
1.0x – 1.2x | 858,438 | 752,588 | |||||||||||||||||||||||
Less than 1.0x | 283,220 | 444,507 | |||||||||||||||||||||||
Total commercial mortgage loans | $ | 6,200,697 | 6,129,542 | ||||||||||||||||||||||
Nontrade Receivables and Allowance for Credit Losses | ' | ||||||||||||||||||||||||
The nontrade receivable and allowance for credit losses by customer classification as of December 31 are shown below: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Agent | Reinsurer | Total | Agent | Reinsurer | Total | ||||||||||||||||||||
Nontrade receivables | $ | 9,681 | 19,108 | 28,789 | 9,008 | 13,369 | 22,377 | ||||||||||||||||||
Allowance for credit losses | (4,712 | ) | (1,505 | ) | (6,217 | ) | (5,531 | ) | (1,361 | ) | (6,892 | ) | |||||||||||||
Net nontrade receivables | $ | 4,969 | 17,603 | 22,572 | 3,477 | 12,008 | 15,485 | ||||||||||||||||||
Aging Analysis of Past Due Financing Receivables | ' | ||||||||||||||||||||||||
Aging analysis of past-due financing receivables as of December 31 is shown below: | |||||||||||||||||||||||||
31–60 | 61–90 | Greater than | Total | Current (1) | Total | ||||||||||||||||||||
past due | past due | 90 days | past due | ||||||||||||||||||||||
past due | |||||||||||||||||||||||||
2013:00:00 | |||||||||||||||||||||||||
Mortgage loans | $ | — | — | — | — | 6,201,275 | 6,201,275 | ||||||||||||||||||
Nontrade receivables | 6,657 | 3,457 | 8,715 | 18,829 | 9,960 | 28,789 | |||||||||||||||||||
Total | $ | 6,657 | 3,457 | 8,715 | 18,829 | 6,211,235 | 6,230,064 | ||||||||||||||||||
-1 | Current amount includes all receivables 30 days or less past due. | ||||||||||||||||||||||||
31–60 | 61–90 | Greater than | Total | Current (1) | Total | ||||||||||||||||||||
past due | past due | 90 days | past due | ||||||||||||||||||||||
past due | |||||||||||||||||||||||||
2012:00:00 | |||||||||||||||||||||||||
Mortgage loans | $ | — | — | — | — | 6,130,584 | 6,130,584 | ||||||||||||||||||
Nontrade receivables | 5,841 | 2,283 | 8,070 | 16,194 | 6,183 | 22,377 | |||||||||||||||||||
Total | $ | 5,841 | 2,283 | 8,070 | 16,194 | 6,136,767 | 6,152,961 | ||||||||||||||||||
-1 | Current amount includes all receivables 30 days or less past due. |
Value_of_Business_Acquired_and1
Value of Business Acquired and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Value of Business Acquired and Changes in the Balance | ' | ||||||||||||
VOBA at December 31 and the changes in the balance for the years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | — | — | 853 | |||||||||
Interest | 439 | 573 | 771 | ||||||||||
Amortization | (4,327 | ) | (5,218 | ) | (3,755 | ) | |||||||
Change in shadow VOBA | 3,888 | 4,645 | 2,131 | ||||||||||
Balance, end of year | $ | — | — | — | |||||||||
Net Amortization of Value of Business Acquired | ' | ||||||||||||
The net amortization of the VOBA in each of the next five years is expected to be as follows: | |||||||||||||
2014 | $ | 2,834 | |||||||||||
2015 | 2,251 | ||||||||||||
2016 | 1,703 | ||||||||||||
2017 | 803 | ||||||||||||
2018 | 830 | ||||||||||||
Intangible Assets | ' | ||||||||||||
Intangible assets at December 31 and the changes in the balance for the years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 3,271 | 3,435 | 4,173 | |||||||||
Amortization | (1,151 | ) | (164 | ) | (738 | ) | |||||||
Balance, end of year | $ | 2,120 | 3,271 | 3,435 | |||||||||
Amortization of Intangible Assets | ' | ||||||||||||
Amortization of intangible assets in each of the next five years is expected to be as follows: | |||||||||||||
2014 | $ | 70 | |||||||||||
2015 and beyond | — |
Deferred_Acquisition_Costs_Tab
Deferred Acquisition Costs (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Deferred Acquisition Costs | ' | ||||||||||||
DAC at December 31 and the changes in the balance for the years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 2,603,307 | 4,858,136 | 5,352,713 | |||||||||
Capitalization (1) | 812,006 | 737,390 | 952,734 | ||||||||||
Interest | 186,157 | 222,229 | 205,772 | ||||||||||
Amortization | (1,204,862 | ) | (1,643,969 | ) | (423,355 | ) | |||||||
Change in shadow DAC | 2,423,607 | (1,570,479 | ) | (1,229,728 | ) | ||||||||
Balance, end of year | $ | 4,820,215 | 2,603,307 | 4,858,136 | |||||||||
-1 | Reflects prospective adoption, in 2012, of new acquisition cost guidance. See note 2 for adoption impact. | ||||||||||||
Pretax Impact on Assets and Liabilities as Result of Unlocking | ' | ||||||||||||
The pretax impact on the Company’s assets and liabilities as a result of the unlocking during 2013, 2012, and 2011 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Assets: | |||||||||||||
DAC | $ | (82,082 | ) | (63,616 | ) | 34,334 | |||||||
DSI | (20,860 | ) | (14,512 | ) | (23,621 | ) | |||||||
VOBA | 116 | (1,012 | ) | 4,651 | |||||||||
Total assets (decrease) increase | (102,826 | ) | (79,140 | ) | 15,364 | ||||||||
Liabilities: | |||||||||||||
Account balances and future policy benefit reserves | (224,074 | ) | 86,596 | (69,519 | ) | ||||||||
Unearned premiums | 2,439 | 96 | 22,885 | ||||||||||
Total liabilities (decrease) increase | (221,635 | ) | 86,692 | (46,634 | ) | ||||||||
Net increase (decrease) | 118,809 | (165,832 | ) | 61,998 | |||||||||
Deferred income tax expense (benefit) | 41,583 | (58,041 | ) | 21,700 | |||||||||
Net increase (decrease) | $ | 77,226 | (107,791 | ) | 40,298 | ||||||||
Deferred_Sales_Inducements_Tab
Deferred Sales Inducements (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Deferred Sales Inducement | ' | ||||||||||||
DSI at December 31 and the changes in the balance for years then ended are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 673,944 | 1,167,736 | 1,161,568 | |||||||||
Capitalization | 131,127 | 161,828 | 299,368 | ||||||||||
Amortization | (242,605 | ) | (289,641 | ) | (93,621 | ) | |||||||
Interest | 38,936 | 43,279 | 38,892 | ||||||||||
Change in shadow DSI | 475,128 | (409,258 | ) | (238,471 | ) | ||||||||
Balance, end of year | $ | 1,076,530 | 673,944 | 1,167,736 | |||||||||
Separate_Accounts_and_Annuity_1
Separate Accounts and Annuity Product Guarantees (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Schedule of Guaranteed Minimums | ' | ||||||||||||||||||||||||
Guaranteed minimums for the respective years ended December 31 are summarized as follows (note that the amounts listed are not mutually exclusive, as many products contain multiple guarantees): | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Account value | Net amount | Weighted | Account value | Net amount | Weighted | ||||||||||||||||||||
at risk | age (years) | at risk | age (years) | ||||||||||||||||||||||
GMDB: | |||||||||||||||||||||||||
Return of premium | $ | 22,290,541 | 36,832 | 63 | $ | 19,474,339 | 101,609 | 63.3 | |||||||||||||||||
Ratchet and return of premium | 5,388,868 | 25,638 | 66.5 | 4,961,385 | 70,064 | 66.6 | |||||||||||||||||||
Ratchet and rollup | 4,861,539 | 397,864 | 69.2 | 4,675,427 | 706,453 | 69.1 | |||||||||||||||||||
Ratchet and earnings protection rider | 4,107 | 1,588 | 80.2 | 3,760 | 2,133 | 79.1 | |||||||||||||||||||
Reset | 109,406 | 616 | 76.1 | 104,916 | 1,257 | 76.1 | |||||||||||||||||||
Earnings protection rider | 308,789 | 29,115 | 67 | 293,886 | 19,861 | 65.9 | |||||||||||||||||||
Total | $ | 32,963,250 | 491,653 | $ | 29,513,713 | 901,377 | |||||||||||||||||||
GMIB: | |||||||||||||||||||||||||
Return of premium | $ | 141,847 | 506 | 71.3 | $ | 144,503 | 930 | 71.2 | |||||||||||||||||
Ratchet and return of premium | 3,110,426 | 8,818 | 68 | 3,837,990 | 59,369 | 67.2 | |||||||||||||||||||
Ratchet and rollup | 6,407,108 | 595,389 | 65.6 | 6,111,691 | 1,034,193 | 65.2 | |||||||||||||||||||
Total | $ | 9,659,381 | 604,713 | $ | 10,094,184 | 1,094,492 | |||||||||||||||||||
GMAB: | |||||||||||||||||||||||||
Five years | $ | 4,660,325 | 14,165 | 66.2 | $ | 5,550,209 | 85,207 | 65.3 | |||||||||||||||||
Ten years | 4,353 | 17 | 78.9 | 4,004 | 48 | 76.8 | |||||||||||||||||||
Target date retirement-7 year | 813,148 | 1,852 | 61.5 | 777,294 | 4,139 | 60.6 | |||||||||||||||||||
Target date retirement-10 year | 303,807 | 1,516 | 58 | 286,796 | 3,157 | 57.2 | |||||||||||||||||||
Target date with management levers | 3,402,746 | 6,573 | 59.6 | 2,467,417 | 5,411 | 59 | |||||||||||||||||||
Total | $ | 9,184,379 | 24,123 | $ | 9,085,720 | 97,962 | |||||||||||||||||||
GMWB: | |||||||||||||||||||||||||
No living benefit | $ | 546,725 | — | 68.9 | $ | 365,274 | 3,306 | 69.4 | |||||||||||||||||
Life benefit with optional reset | 1,145,784 | 103,611 | 66.6 | 1,080,566 | 166,027 | 65.9 | |||||||||||||||||||
Life benefit with automatic reset | 1,712,815 | 61,791 | 62.7 | 1,596,848 | 112,563 | 61.9 | |||||||||||||||||||
Life benefit with 8% rollup | 36,826 | 2,348 | 67.6 | 33,956 | 2,955 | 66.6 | |||||||||||||||||||
Life benefit with 10% rollup | 1,289,866 | 152,152 | 62.1 | 1,214,821 | 172,500 | 61.3 | |||||||||||||||||||
Life benefit with management levers | 10,128,398 | 455,998 | 59.7 | 7,656,036 | 463,131 | 59.3 | |||||||||||||||||||
Total | $ | 14,860,414 | 775,900 | $ | 11,947,501 | 920,482 | |||||||||||||||||||
Variable Annuity Account Balances Invested In Separate Account | ' | ||||||||||||||||||||||||
At December 31, variable annuity account balances were invested in separate account funds with the following investment objectives. Balances are presented at fair value: | |||||||||||||||||||||||||
Investment type | 2013 | 2012 | |||||||||||||||||||||||
Mutual funds: | |||||||||||||||||||||||||
Bond | $ | 3,832,071 | 4,117,903 | ||||||||||||||||||||||
Domestic equity | 15,076,444 | 11,756,004 | |||||||||||||||||||||||
International equity | 2,125,261 | 1,812,473 | |||||||||||||||||||||||
Specialty | 8,814,913 | 7,025,112 | |||||||||||||||||||||||
Total mutual funds | 29,848,689 | 24,711,492 | |||||||||||||||||||||||
Money market funds | 800,839 | 868,706 | |||||||||||||||||||||||
Other | 98,249 | 90,477 | |||||||||||||||||||||||
Total | $ | 30,747,777 | 25,670,675 | ||||||||||||||||||||||
Summary of Liabilities for Variable Contract Guarantees | ' | ||||||||||||||||||||||||
The following table summarizes the liabilities for variable contract guarantees that are reflected in the general account and shown in account balances and future policy benefit reserves on the Consolidated Balance Sheets: | |||||||||||||||||||||||||
GMDB | GMIB | GMAB | GMWB | Totals | |||||||||||||||||||||
Balance as of December 31, 2011 | $ | 80,537 | 277,775 | 623,016 | 1,016,987 | 1,998,315 | |||||||||||||||||||
Incurred guaranteed benefits | 14,880 | (25,017 | ) | 33,658 | (59,122 | ) | (35,601 | ) | |||||||||||||||||
Paid guaranteed benefits | (19,376 | ) | (6,366 | ) | (310,971 | ) | — | (336,713 | ) | ||||||||||||||||
Balance as of December 31, 2012 | 76,041 | 246,392 | 345,703 | 957,865 | 1,626,001 | ||||||||||||||||||||
Incurred guaranteed benefits | 4,608 | (75,489 | ) | (166,884 | ) | (912,093 | ) | (1,149,858 | ) | ||||||||||||||||
Paid guaranteed benefits | (12,712 | ) | (4,570 | ) | (70,846 | ) | — | (88,128 | ) | ||||||||||||||||
Balance as of December 31, 2013 | $ | 67,937 | 166,333 | 107,973 | 45,772 | 388,015 | |||||||||||||||||||
Mortgage_Notes_Payable_Tables
Mortgage Notes Payable (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Future Principal Payments | ' | ||||
The future principal payments required under the Northwestern loan are as follows: | |||||
2014 | $ | 7,026 | |||
2015 | 7,424 | ||||
2016 | 7,844 | ||||
2017 | 8,288 | ||||
2018 | 8,758 | ||||
2019 and beyond | 59,870 | ||||
Total | $ | 99,210 | |||
Accident_and_Health_Claim_Rese1
Accident and Health Claim Reserves (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Activity in Accident and Health Claim Reserves | ' | ||||||||||||
Activity in the accident and health claim reserves is summarized as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at January 1, net of reinsurance recoverables of $221,718, $188,089, and $156,294, respectively | $ | 107,410 | 91,813 | 78,904 | |||||||||
Adjustment related to the reclassification of reserves from prior years | — | — | 417 | ||||||||||
Adjustment primarily related to commutation and assumption reinsurance on blocks of business | (70 | ) | (272 | ) | (216 | ) | |||||||
Incurred related to: | |||||||||||||
Current year | 54,096 | 42,876 | 32,157 | ||||||||||
Prior years | 5,359 | 8,119 | 5,752 | ||||||||||
Total incurred | 59,455 | 50,995 | 37,909 | ||||||||||
Paid related to: | |||||||||||||
Current year | 3,519 | 3,001 | 2,931 | ||||||||||
Prior years | 35,871 | 32,125 | 22,270 | ||||||||||
Total paid | 39,390 | 35,126 | 25,201 | ||||||||||
Balance at December 31, net of reinsurance recoverables of $259,829, $221,718, and $188,089, respectively | $ | 127,405 | 107,410 | 91,813 | |||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax (Benefit) Expense | ' | ||||||||||||
Total income tax (benefit) expense for the years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Income tax expense (benefit) attributable to operations: | |||||||||||||
Current tax expense (benefit) | $ | 42,854 | 280,018 | (63,316 | ) | ||||||||
Deferred tax expense (benefit) | 160,438 | (324,977 | ) | 5,441 | |||||||||
Total income tax expense (benefit) attributable to net income | 203,292 | (44,959 | ) | (57,875 | ) | ||||||||
Income tax effect on equity: | |||||||||||||
Income tax (benefit) expense allocated to stockholder’s equity: | |||||||||||||
Attributable to unrealized (losses) gains on investments | (661,574 | ) | 192,353 | 489,768 | |||||||||
Attributable to unrealized (losses) gains on postretirement obligation | (127 | ) | 95 | (19 | ) | ||||||||
Attributable to unrealized (losses) gains on foreign exchange | (889 | ) | 325 | (291 | ) | ||||||||
Total income tax effect on equity | $ | (459,298 | ) | 147,814 | 431,583 | ||||||||
Income Tax (Benefit) Expense Computed at the Statutory Rate | ' | ||||||||||||
Income tax expense (benefit) computed at the statutory rate of 35% varies from income tax expense (benefit) reported on the Consolidated Statements of Operations for the respective years ended December 31 as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Income tax expense (benefit) computed at the statutory rate | $ | 260,567 | (30,570 | ) | (2,443 | ) | |||||||
Dividends-received deductions and tax-exempt interest | (32,037 | ) | (20,015 | ) | (21,415 | ) | |||||||
State income tax | (2,049 | ) | 6,559 | 4,128 | |||||||||
Release AZLPF tax | (5,829 | ) | — | (39,365 | ) | ||||||||
Accrual of tax contingency reserve | 2,571 | 2,223 | 2,573 | ||||||||||
Foreign tax, net | (12,209 | ) | (4,551 | ) | (268 | ) | |||||||
Corporate-owned life insurance | (12,933 | ) | (6,894 | ) | (790 | ) | |||||||
Penalties | 6,376 | 5,377 | — | ||||||||||
Other | (1,165 | ) | 2,912 | (295 | ) | ||||||||
Income tax expense (benefit) as reported | $ | 203,292 | (44,959 | ) | (57,875 | ) | |||||||
Significant Components of Net Deferred Tax Asset (Liability) | ' | ||||||||||||
Tax effects of temporary differences giving rise to the significant components of the net deferred tax asset (liability), which is included in other assets and other liabilities, respectively, on the Consolidated Balance Sheets, at December 31 are as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Policy reserves | $ | 1,995,228 | 2,441,364 | ||||||||||
Coinsurance deferred income | 1,935 | 3,906 | |||||||||||
Expense accruals | 143,170 | 141,817 | |||||||||||
Other-than-temporarily impaired assets | 16,468 | 37,186 | |||||||||||
Investment income | 236,478 | 4,270 | |||||||||||
Provision for postretirement benefits | 20,984 | 13,988 | |||||||||||
Other | 781 | 1,651 | |||||||||||
Total deferred tax assets | 2,415,044 | 2,644,182 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Deferred acquisition costs | (1,346,290 | ) | (391,805 | ) | |||||||||
Depreciation and amortization | (47,147 | ) | (41,130 | ) | |||||||||
Deferred intercompany gain | (3,710 | ) | (4,234 | ) | |||||||||
Net unrealized gains on investments and foreign exchange | (1,301,256 | ) | (2,992,467 | ) | |||||||||
Total deferred tax liabilities | (2,698,403 | ) | (3,429,636 | ) | |||||||||
Net deferred tax liabilities | $ | (283,359 | ) | (785,454 | ) | ||||||||
Reconciliation of Unrecognized Tax Benefits | ' | ||||||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Balance at January 1 | $ | 81,012 | 92,337 | ||||||||||
Additions based on tax positions related to the current year | 680 | 193 | |||||||||||
Amounts released related to tax positions taken in prior years | (11,518 | ) | (11,518 | ) | |||||||||
Balance at December 31 | $ | 70,174 | 81,012 | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Future Minimum Lease Payments Required under Operating Leases | ' | ||||
The future minimum lease payments required under operating leases are as follows: | |||||
2014 | $ | 1,333 | |||
2015 | 924 | ||||
2016 | 684 | ||||
2017 | 565 | ||||
2018 | 580 | ||||
2019 and beyond | 1,116 | ||||
Total | $ | 5,202 | |||
Future Minimum Lease Payments and Present Value of the Net Minimum Lease Payments | ' | ||||
The future minimum lease payments and present value of the net minimum lease payments are as follows: | |||||
2014 | $ | 939 | |||
2015 | 783 | ||||
2016 | — | ||||
2017 | — | ||||
2018 | — | ||||
2019 and beyond | — | ||||
Total | $ | 1,722 | |||
Capital_Structure_Tables
Capital Structure (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Catagory of Capital Stock Issued | ' | ||||||||||||
The Company is authorized to issue three types of capital stock, as outlined in the table below: | |||||||||||||
Authorized, | Par value, | Redemption rights | Voluntary or | ||||||||||
issued, and | per share | involuntary | |||||||||||
outstanding | liquidation rights | ||||||||||||
Common stock | 40,000,000 | $ | 1 | None | None | ||||||||
20,000,001 | |||||||||||||
20,000,001 | |||||||||||||
Preferred stock: | |||||||||||||
Class A | 200,000,000 | $ | 1 | Designated by Board for each series issued | Designated by Board for each series issued | ||||||||
18,903,484 | |||||||||||||
18,903,484 | |||||||||||||
Class A, Series A | 8,909,195 | 1 | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | |||||||||
8,909,195 | |||||||||||||
8,909,195 | |||||||||||||
Class A, Series B | 10,000,000 | 1 | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | |||||||||
9,994,289 | |||||||||||||
9,994,289 | |||||||||||||
Class B | 400,000,000 | 1 | Designated by Board for each series issued | Designated by Board for each series issued |
Foreign_Currency_Translation_T
Foreign Currency Translation (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Foreign Currency Translation, Net of Tax | ' | ||||||||||||
An analysis of foreign currency translation, net of tax for the respective years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Beginning amount of cumulative translation adjustments | $ | 13,993 | 13,389 | 13,930 | |||||||||
Aggregate adjustment for the period resulting from translation adjustments | (2,539 | ) | 929 | (832 | ) | ||||||||
Amount of income tax expense (benefit) for the period related to aggregate adjustment | 889 | (325 | ) | 291 | |||||||||
Net aggregate translation included in equity | (1,650 | ) | 604 | (541 | ) | ||||||||
Ending amount of cumulative translation adjustments | $ | 12,343 | 13,993 | 13,389 | |||||||||
Canadian foreign exchange rate at end of year | 0.9412 | 1.00432 | 0.98208 |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Reconciliation of Unconsolidated Segment Results to Consolidated Statement of Operations | ' | ||||||||||||||||||||||||
Unconsolidated segment results are reconciled to consolidated statement of operations amounts in the tables below: | |||||||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Individual | Life | Questar | Legacy | Eliminations | Consolidated | ||||||||||||||||||||
annuities | products | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Net premiums and policy fees | $ | 1,050,072 | 104,715 | — | 133,586 | — | 1,288,373 | ||||||||||||||||||
Interest and similar income, net | 3,464,951 | 71,125 | (16 | ) | 56,057 | — | 3,592,117 | ||||||||||||||||||
Change in fair value of assets and liabilities | 843,121 | 77,920 | — | 224 | — | 921,265 | |||||||||||||||||||
Realized investment gains, net | 172,940 | 2,227 | 8 | 13,122 | — | 188,297 | |||||||||||||||||||
Fee, commission, and other revenue | 239,692 | 583 | 93,485 | 6,207 | (33,188 | ) | 306,779 | ||||||||||||||||||
Total revenue (loss) | 5,770,776 | 256,570 | 93,477 | 209,196 | (33,188 | ) | 6,296,831 | ||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||
Net benefits and expenses | 3,378,366 | 180,923 | — | 144,730 | — | 3,704,019 | |||||||||||||||||||
General and administrative and commission | 1,408,107 | 136,417 | 110,633 | 19,666 | (33,188 | ) | 1,641,635 | ||||||||||||||||||
Change in deferred acquisition costs, net | 264,068 | (71,632 | ) | — | 14,263 | — | 206,699 | ||||||||||||||||||
Total benefits and expenses | 5,050,541 | 245,708 | 110,633 | 178,659 | (33,188 | ) | 5,552,353 | ||||||||||||||||||
Pretax (loss) income | $ | 720,235 | 10,862 | (17,156 | ) | 30,537 | — | 744,478 | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Individual | Life | Questar | Legacy | Eliminations | Consolidated | ||||||||||||||||||||
annuities | products | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Net premiums and policy fees | $ | 821,192 | 93,795 | — | 134,170 | — | 1,049,157 | ||||||||||||||||||
Interest and similar income, net | 3,514,953 | 67,509 | (20 | ) | 49,964 | — | 3,632,406 | ||||||||||||||||||
Change in fair value of assets and liabilities | (169,234 | ) | 12,125 | — | (170 | ) | — | (157,279 | ) | ||||||||||||||||
Realized investment gains, net | 225,246 | 1,387 | — | 1,068 | — | 227,701 | |||||||||||||||||||
Fee, commission, and other revenue | 189,120 | 295 | 72,917 | 7,594 | (29,220 | ) | 240,706 | ||||||||||||||||||
Total revenue (loss) | 4,581,277 | 175,111 | 72,897 | 192,626 | (29,220 | ) | 4,992,691 | ||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||
Net benefits and expenses | 2,656,502 | 92,872 | — | 140,829 | — | 2,890,203 | |||||||||||||||||||
General and administrative and commission | 1,300,668 | 118,602 | 90,580 | 24,849 | (29,220 | ) | 1,505,479 | ||||||||||||||||||
Change in deferred acquisition costs, net | 729,277 | (58,368 | ) | — | 13,441 | — | 684,350 | ||||||||||||||||||
Total benefits and expenses | 4,686,447 | 153,106 | 90,580 | 179,119 | (29,220 | ) | 5,080,032 | ||||||||||||||||||
Pretax (loss) income | $ | (105,170 | ) | 22,005 | (17,683 | ) | 13,507 | — | (87,341 | ) | |||||||||||||||
Year ended December 31, 2011 | |||||||||||||||||||||||||
Individual | Life | Questar | Legacy | Eliminations | Consolidated | ||||||||||||||||||||
annuities | products | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Net premiums and policy fees | $ | 705,258 | 84,421 | — | 136,516 | — | 926,195 | ||||||||||||||||||
Interest and similar income, net | 3,418,279 | 58,941 | (39 | ) | 42,835 | — | 3,520,016 | ||||||||||||||||||
Change in fair value of assets and liabilities | (198,571 | ) | (6,490 | ) | — | (506 | ) | — | (205,567 | ) | |||||||||||||||
Realized investment gains, net | 110,814 | 1,537 | — | 1,042 | — | 113,393 | |||||||||||||||||||
Fee, commission, and other revenue | 149,516 | 55 | 69,951 | 8,215 | (5,552 | ) | 222,185 | ||||||||||||||||||
Total revenue (loss) | 4,185,296 | 138,464 | 69,912 | 188,102 | (5,552 | ) | 4,576,222 | ||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||
Net benefits and expenses | 3,535,771 | 74,599 | — | 114,422 | — | 3,724,792 | |||||||||||||||||||
General and administrative and commission | 1,418,280 | 74,851 | 87,050 | 18,934 | (5,552 | ) | 1,593,563 | ||||||||||||||||||
Change in deferred acquisition costs, net | (729,330 | ) | (22,646 | ) | — | 16,825 | — | (735,151 | ) | ||||||||||||||||
Total benefits and expenses | 4,224,721 | 126,804 | 87,050 | 150,181 | (5,552 | ) | 4,583,204 | ||||||||||||||||||
Pretax (loss) income | $ | (39,425 | ) | 11,660 | (17,138 | ) | 37,921 | — | (6,982 | ) | |||||||||||||||
Changes_in_and_Reclassificatio1
Changes in and Reclassifications from Accumulated Other Comprehensive Income (AOCI) (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Changes In AOCI By Component | ' | ||||||||||||||||||||||||
hanges in AOCI by component consist of the following: | |||||||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Net gain | |||||||||||||||||||||||||
Net | (loss) | Foreign | Pension and | ||||||||||||||||||||||
unrealized | OTTI | on cash flow | currency | postretirement | |||||||||||||||||||||
gain on | losses in | hedging | translation | plan | |||||||||||||||||||||
securities | OCI | instruments | adjustments | adjustments | Total AOCI | ||||||||||||||||||||
Beginning balance | $ | 2,206,473 | 11,313 | 1,463 | 13,993 | (337 | ) | 2,232,905 | |||||||||||||||||
OCI before reclassifications | (1,151,346 | ) | (6,431 | ) | (443 | ) | (1,650 | ) | 189 | (1,159,681 | ) | ||||||||||||||
Amounts reclassified from AOCI | (74,350 | ) | 3,932 | — | — | (22 | ) | (70,440 | ) | ||||||||||||||||
Net OCI | (1,225,696 | ) | (2,499 | ) | (443 | ) | (1,650 | ) | 167 | (1,230,121 | ) | ||||||||||||||
Ending balance | $ | 980,777 | 8,814 | 1,020 | 12,343 | (170 | ) | 1,002,784 | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Net gain | |||||||||||||||||||||||||
Net | (loss) | Foreign | Pension and | ||||||||||||||||||||||
unrealized | OTTI | on cash flow | currency | postretirement | |||||||||||||||||||||
gain on | losses in | hedging | translation | plan | |||||||||||||||||||||
securities | OCI | instruments | adjustments | adjustments | Total AOCI | ||||||||||||||||||||
Beginning balance | $ | 1,871,918 | 3,533 | 3,226 | 13,389 | (111 | ) | 1,891,955 | |||||||||||||||||
OCI before reclassifications | 484,260 | 8,671 | (1,763 | ) | 604 | (210 | ) | 491,562 | |||||||||||||||||
Amounts reclassified from AOCI | (149,705 | ) | (891 | ) | — | — | (16 | ) | (150,612 | ) | |||||||||||||||
Net OCI | 334,555 | 7,780 | (1,763 | ) | 604 | (226 | ) | 340,950 | |||||||||||||||||
Ending balance | $ | 2,206,473 | 11,313 | 1,463 | 13,993 | (337 | ) | 2,232,905 | |||||||||||||||||
Reclassifications From AOCI | ' | ||||||||||||||||||||||||
Reclassifications from AOCI consist of the following: | |||||||||||||||||||||||||
Amount Reclassified from AOCI | Affected line item | ||||||||||||||||||||||||
December 31, | in the consolidated | ||||||||||||||||||||||||
AOCI | 2013 | 2012 | statement of operations | ||||||||||||||||||||||
Net unrealized gain on securities: | |||||||||||||||||||||||||
Available-for-sale securities | $ | 114,385 | 230,316 | Realized investment gains, net | |||||||||||||||||||||
(40,035 | ) | (80,611 | ) | Income tax expense (benefit) | |||||||||||||||||||||
74,350 | 149,705 | Net income (loss) | |||||||||||||||||||||||
OTTI Losses in OCI: | |||||||||||||||||||||||||
Other than temporary impairments | (6,049 | ) | 1,371 | Realized investment gains, net | |||||||||||||||||||||
2,117 | (480 | ) | Income tax expense (benefit) | ||||||||||||||||||||||
(3,932 | ) | 891 | Net income (loss) | ||||||||||||||||||||||
Pension and other postretirement plan adjustments | 34 | 25 | General and administrative expenses | ||||||||||||||||||||||
Amortization of actuarial gains (losses) | (12 | ) | (9 | ) | Income tax expense (benefit) | ||||||||||||||||||||
22 | 16 | Net income (loss) | |||||||||||||||||||||||
Total amounts reclassified from AOCI | $ | 70,440 | 150,612 | Total net income (loss) | |||||||||||||||||||||
Organization_Additional_Inform
Organization - Additional Information (Detail) (Sales [Member]) | 12 Months Ended |
Dec. 31, 2013 | |
Annuities | ' |
Organization and Nature of Operations [Line Items] | ' |
Percentage of net premium written | 95.00% |
Life | ' |
Organization and Nature of Operations [Line Items] | ' |
Percentage of net premium written | 4.00% |
Accident and health | ' |
Organization and Nature of Operations [Line Items] | ' |
Percentage of net premium written | 1.00% |
fixed-indexed annuities | Annuities | ' |
Organization and Nature of Operations [Line Items] | ' |
Percentage of net premium written | 66.00% |
Variable annuity | Annuities | ' |
Organization and Nature of Operations [Line Items] | ' |
Percentage of net premium written | 33.00% |
Fixed interest annuities | Annuities | ' |
Organization and Nature of Operations [Line Items] | ' |
Percentage of net premium written | 1.00% |
Recovered_Sheet1
Summary Of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2002 | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Deferred acquisition costs, amortization period | '20 years | ' | ' | ' | |||
Intangible assets, amortization period | '5 years | ' | ' | ' | |||
Traditional life products, life reserve interest assumptions range, minimum | 2.60% | ' | ' | ' | |||
Traditional life products, life reserve interest assumptions range, maximum | 6.00% | ' | ' | ' | |||
LTC reserve interest assumptions range | 5.00% | ' | ' | ' | |||
LTC reserve interest assumptions range | 6.00% | ' | ' | ' | |||
Fair value of equity securities, percentage below average cost at the end of quarter to be considered other-than-temporarily impaired | 20.00% | ' | ' | ' | |||
Property and equipment, net of accumulated depreciation | $146,242 | $151,661 | ' | ' | |||
Property and equipment, accumulated depreciation | 110,880 | 104,281 | ' | ' | |||
Loan to parent company | ' | ' | ' | 250,000 | |||
Capital contribution | ' | ' | ' | 650,000 | |||
Acquisition cost capitalized | 812,006 | [1] | 737,390 | [1] | 952,734 | [1] | ' |
Change in income from operation before income taxes | ' | 38,503 | ' | ' | |||
DAC, DSI, and VOBA amortization | ' | 710,549 | ' | ' | |||
Guaranteed Minimum Death Benefit | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Cap rate of premium | 150.00% | ' | ' | ' | |||
Guaranteed Minimum Death Benefit | With no cap | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Rollup interest rates | 5.00% | ' | ' | ' | |||
Guaranteed Minimum Death Benefit | With a cap of 150% of premium | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Rollup interest rates | 3.00% | ' | ' | ' | |||
Guaranteed Minimum Death Benefit and Guaranteed Minimum Income Benefit | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Stochastically generated investment performance scenarios | 100 | 100 | ' | ' | |||
Mean investment performance assumption | 6.50% | 6.50% | ' | ' | |||
Volatility assumption | 13.40% | 13.40% | ' | ' | |||
Mortality assumption | 94.30% | 94.00% | ' | ' | |||
Lapse rates, spike rates | 40.00% | 40.00% | ' | ' | |||
Lapse rates, ultimate rate | 15.00% | 15.00% | ' | ' | |||
Description of discount rates | 'Discount rates vary by contract type and equal an assumed long-term investment return (6.5%), less the applicable mortality and expense rate. | ' | ' | ' | |||
Other products | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Mortality assumption | 50.00% | 50.00% | ' | ' | |||
Guaranteed Minimum Accumulation And Withdrawal Benefit | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Stochastically generated investment performance scenarios | 1,000 | 1,000 | ' | ' | |||
Mortality assumption | 93.30% | 94.00% | ' | ' | |||
Lapse rates, spike rates | 40.00% | 40.00% | ' | ' | |||
Lapse rates, ultimate rate | 15.00% | 15.00% | ' | ' | |||
Volatility assumption period | '1 year | '1 year | ' | ' | |||
Minimum | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property and equipment, estimated useful life | '3 years | ' | ' | ' | |||
Fair value of securities loaned to be maintained as collateral | 102.00% | ' | ' | ' | |||
Maximum | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property and equipment, estimated useful life | '7 years | ' | ' | ' | |||
Preoperating and start-up costs | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Intangible assets, amortization period | '39 years | ' | ' | ' | |||
Amortization of capitalized cost | 2,275 | 2,275 | 2,275 | ' | |||
Amortization cost of company headquarter | 2,104 | 2,104 | 2,104 | ' | |||
Buildings | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property and equipment, estimated useful life | '39 years | ' | ' | ' | |||
Previous Policy | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Acquisition cost capitalized | ' | 820,993 | ' | ' | |||
Change in Accounting Method Accounted for as Change in Estimate | ' | ' | ' | ' | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Change in valuation reserves for DAC, DSI, and VOBA | ' | ($288,822) | ' | ' | |||
[1] | Reflects prospective adoption, in 2012, of new acquisition cost guidance. See note 2 for adoption impact. |
Market_Volatility_Assumption_V
Market Volatility Assumption Varies by Fund Type and Grades from a Current Volatility to Long-Term Assumption (Detail) (Guaranteed Minimum Accumulation And Withdrawal Benefit) | Dec. 31, 2013 | Dec. 31, 2012 |
Large Cap | ' | ' |
Long-Duration Contracts, Assumptions by Product and Guarantee [Line Items] | ' | ' |
Current volatility | 15.80% | 18.50% |
Long-term forward volatility | 18.20% | 19.80% |
Bonds | ' | ' |
Long-Duration Contracts, Assumptions by Product and Guarantee [Line Items] | ' | ' |
Current volatility | 3.40% | 3.40% |
Long-term forward volatility | 4.00% | 4.10% |
International | ' | ' |
Long-Duration Contracts, Assumptions by Product and Guarantee [Line Items] | ' | ' |
Current volatility | 17.00% | 21.50% |
Long-term forward volatility | 24.50% | 25.20% |
Small Cap | ' | ' |
Long-Duration Contracts, Assumptions by Product and Guarantee [Line Items] | ' | ' |
Current volatility | 19.80% | 23.10% |
Long-term forward volatility | 21.10% | 21.40% |
Amortized_Cost_or_Cost_Gross_U
Amortized Cost or Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Values of Available-For-Sale and Held-To-Maturity Securities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | $62,706,408 | $59,652,036 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 4,334,225 | 8,567,202 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 636,911 | 41,076 | ||
Total available-for-sale fixed-maturity securities, fair value | 66,403,722 | 68,178,162 | ||
Total fixed-maturity securities, available-for-sale, OTTI in accumulated other comprehensive income | 13,559 | [1] | 17,404 | [1] |
Total fixed-maturity securities, held-to-maturity, Amortized cost of cost | 220,752 | 475,074 | ||
Total fixed-maturity securities, held-to-maturity, Gross unrealized gains | 1,119 | 11,641 | ||
Total fixed-maturity securities, held-to-maturity, Gross unrealized losses | 2,355 | ' | ||
Total fixed-maturity securities, held-to-maturity, Fair value | 219,516 | 486,715 | ||
Total fixed-maturity securities, held-to-maturity, OTTI in accumulated other Comprehensive income | ' | [1] | ' | [1] |
Available for sale and held-to-maturity securities, Amortized cost or cost | 62,927,160 | 60,127,110 | ||
Available for sale and held-to-maturity securities, gross unrealized gains | 4,335,344 | 8,578,843 | ||
Available for sale and held-to-maturity securities, gross unrealized losses | 639,266 | 41,076 | ||
Available for sale and held-to-maturity securities, fair value | 66,623,238 | 68,664,877 | ||
Available for sale and held-to-maturity securities, OTTI in accumulated other comprehensive income | 13,559 | [1] | 17,404 | [1] |
U.S. government | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 1,103,739 | 880,251 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 58,198 | 131,250 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 3,078 | 2,054 | ||
Total available-for-sale fixed-maturity securities, fair value | 1,158,859 | 1,009,447 | ||
Agencies not backed by the full faith and credit of the U.S. government | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 480,981 | 744,623 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 30,861 | 129,001 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 13 | ' | ||
Total available-for-sale fixed-maturity securities, fair value | 511,829 | 873,624 | ||
States and political subdivisions | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 4,916,086 | 3,891,615 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 161,812 | 587,357 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 119,538 | 5,339 | ||
Total available-for-sale fixed-maturity securities, fair value | 4,958,360 | 4,473,633 | ||
Foreign government | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 341,223 | 460,615 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 24,167 | 63,379 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 156 | ' | ||
Total available-for-sale fixed-maturity securities, fair value | 365,234 | 523,994 | ||
Public utilities | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 4,692,512 | 4,512,465 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 467,650 | 882,652 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 23,952 | 738 | ||
Total available-for-sale fixed-maturity securities, fair value | 5,136,210 | 5,394,379 | ||
Total fixed-maturity securities, available-for-sale, OTTI in accumulated other comprehensive income | 650 | [1] | 975 | [1] |
Corporate securities | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 39,446,124 | 35,834,283 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 2,700,886 | 5,135,779 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 470,158 | 32,590 | ||
Total available-for-sale fixed-maturity securities, fair value | 41,676,852 | 40,937,472 | ||
Total fixed-maturity securities, available-for-sale, OTTI in accumulated other comprehensive income | 1,429 | [1] | 9,996 | [1] |
Mortgage-backed securities | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 11,668,499 | 13,263,966 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 876,705 | 1,629,977 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 19,911 | 246 | ||
Total available-for-sale fixed-maturity securities, fair value | 12,525,293 | 14,893,697 | ||
Total fixed-maturity securities, available-for-sale, OTTI in accumulated other comprehensive income | ' | 979 | [1] | |
Collateralized mortgage obligations | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 12,557 | 15,225 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 1,655 | 1,940 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | ' | 15 | ||
Total available-for-sale fixed-maturity securities, fair value | 14,212 | 17,150 | ||
Collateralized debt obligations | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, available-for-sale, Amortized cost or cost | 44,687 | 48,993 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized gains | 12,291 | 5,867 | ||
Total fixed-maturity securities, available-for-sale, Gross unrealized losses | 105 | 94 | ||
Total available-for-sale fixed-maturity securities, fair value | 56,873 | 54,766 | ||
Total fixed-maturity securities, available-for-sale, OTTI in accumulated other comprehensive income | 11,480 | [1] | 5,454 | [1] |
Total fixed-maturity securities, held-to-maturity, Amortized cost of cost | 220,642 | 474,936 | ||
Total fixed-maturity securities, held-to-maturity, Gross unrealized gains | 1,100 | 11,617 | ||
Total fixed-maturity securities, held-to-maturity, Gross unrealized losses | 2,355 | ' | ||
Total fixed-maturity securities, held-to-maturity, Fair value | 219,387 | 486,553 | ||
Total fixed-maturity securities, held-to-maturity, OTTI in accumulated other Comprehensive income | ' | [1] | ' | [1] |
Corporate Securities | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total fixed-maturity securities, held-to-maturity, Amortized cost of cost | 110 | 138 | ||
Total fixed-maturity securities, held-to-maturity, Gross unrealized gains | 19 | 24 | ||
Total fixed-maturity securities, held-to-maturity, Fair value | 129 | 162 | ||
Total fixed-maturity securities, held-to-maturity, OTTI in accumulated other Comprehensive income | ' | [1] | ' | [1] |
[1] | The amount represents the net unrealized gain or loss on other-than-temporarily impaired securities. It includes the portion of OTTI losses in accumulated other comprehensive income, which was not included in earnings. |
Net_Unrealized_Gains_On_Availa
Net Unrealized Gains On Available-For-Sale Securities and Ineffective Portion Of Cash Flow Hedges (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Available-for-sale securities, Net unrealized gains | $990,611 | $2,219,249 | $1,878,677 |
Fixed-maturity securities | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Available-for-sale securities, Net unrealized gains | 3,697,314 | 8,526,126 | 5,877,872 |
Cash flow hedges | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Available-for-sale securities, Net unrealized gains | 1,570 | 2,251 | 4,964 |
Shadow | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Available-for-sale securities, Net unrealized gains | -2,174,866 | -5,114,147 | -3,001,532 |
Deferred taxes | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Available-for-sale securities, Net unrealized gains | ($533,407) | ($1,194,981) | ($1,002,627) |
Amortized_Cost_and_Fair_Value_
Amortized Cost and Fair Value of Available for Sale Fixed Maturity Securities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Available-for-sale fixed-maturity securities, amortized cost | ' | ' |
Due in one year or less, amortized cost | $1,211,284 | ' |
Due after one year through five years, amortized cost | 9,976,377 | ' |
Due after five years through ten years, amortized cost | 18,583,011 | ' |
Due after ten years, amortized cost | 21,254,680 | ' |
Mortgage-backed securities and collateralized mortgage obligations, amortized cost | 11,681,056 | ' |
Total available-for-sale fixed-maturity securities, amortized cost | 62,706,408 | ' |
Available-for-sale fixed-maturity securities, fair value | ' | ' |
Due in one year or less, fair value | 1,241,135 | ' |
Due after one year through five years, fair value | 10,992,907 | ' |
Due after five years through ten years, fair value | 19,365,467 | ' |
Due after ten years, fair value | 22,264,708 | ' |
Mortgage-backed securities and collateralized mortgage obligations, fair value | 12,539,505 | ' |
Total available-for-sale fixed-maturity securities, fair value | $66,403,722 | $68,178,162 |
Amortized_Cost_and_Fair_Value_1
Amortized Cost and Fair Value of Held-to-Maturity Securities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Held-to-maturity fixed-maturity securities, amortized cost | ' | ' |
Due after one year through five years, amortized cost | $110 | ' |
Due after ten years, amortized cost | 220,642 | ' |
Total held-to-maturity fixed-maturity securities, amortized cost | 220,752 | 475,074 |
Held-to-maturity fixed-maturity securities, fair value | ' | ' |
Due after one year through five years, fair value | 129 | ' |
Due after ten years, fair value | 219,387 | ' |
Total fixed-maturity securities, held-to-maturity, Fair value | $219,516 | $486,715 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 12, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Investment | Investment | |||
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Amortized cost of fixed-maturity securities with rights to call or prepay without penalty | ' | $18,866,913 | ' | ' |
Carrying value of investments held on deposit with various insurance departments and in other trusts | ' | 54,479 | 49,019 | ' |
Available-for-sale investment holdings that were in an unrealized loss position for fixed-maturity securities | ' | 993 | 111 | ' |
Unrealized gain loss on investment grade securities | ' | 636,911 | 41,076 | ' |
Mortgage loan on real estate | ' | 6,134,525 | 6,045,334 | ' |
Interest rates on investments in new mortgage loans, minimum range | ' | 3.30% | ' | ' |
Interest rates on investments in new mortgage loans, maximum range | ' | 5.70% | ' | ' |
Increase (decrease) to valuation allowance as a result of establishing a specific reserve | ' | -13,500 | 40,250 | ' |
Reduction in valuation allowance on mortgage loans as a result of reevaluation | ' | 5,000 | 30,018 | ' |
Gain loss on sale of real estate property | ' | ' | ' | 7,078 |
Realized gain on exchanges | ' | 44,179 | 1,342 | 9,767 |
Prepaid forward agreement, amount | 500,000 | ' | ' | ' |
Sale of equity method investment ownership percentage | 100.00% | ' | ' | ' |
Other liabilities | ' | 2,840,304 | 2,333,383 | ' |
Preferred stock | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Other liabilities | ' | 32,195 | 32,195 | ' |
Fixed-maturity securities | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Fair value of securities on loan | ' | 1,754,187 | 821,782 | ' |
Cash and Cash Equivalents | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Collateral held | ' | 1,824,788 | 854,424 | ' |
Collateralized debt obligations | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Unrealized gain loss on investment grade securities | ' | 105 | 94 | ' |
Cash received for securities | ' | 253,125 | ' | ' |
Securities book value | ' | 208,946 | ' | ' |
Realized gain on exchanges | ' | 44,179 | ' | ' |
Debt instrument exchanged book value | ' | ' | ' | 380,460 |
Debt instrument collateral amount | ' | ' | ' | 390,227 |
Realized gain on exchanges of debt instrument | ' | ' | ' | 9,767 |
Prepaid forward contract | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Net value of agreement | ' | ' | ' | 629,127 |
CALIFORNIA | Mortgage Loans on Real Estate | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Mortgage loan on real estate, concentration level | ' | 30.80% | 34.80% | ' |
Mortgage loan on real estate | ' | 1,910,426 | 2,118,998 | ' |
TEXAS | Mortgage Loans on Real Estate | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Mortgage loan on real estate, concentration level | ' | 12.20% | 13.00% | ' |
Mortgage loan on real estate | ' | 755,664 | 791,739 | ' |
External Credit Rating, Investment Grade | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Unrealized gain loss on investment grade securities | ' | $587,100 | $23,413 | ' |
Percentage of unrealized loss | ' | 92.20% | 57.00% | ' |
Proceeds_from_Sale_of_Availabl
Proceeds from Sale of Available-for-Sale and Trading Investments (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fixed-maturity securities | ' | ' | ' |
Available-for-sale: | ' | ' | ' |
Proceeds from sales | $2,503,974 | $3,156,402 | $3,652,020 |
Trading: | ' | ' | ' |
Proceeds from sales | ' | ' | 127,704 |
Equity securities | ' | ' | ' |
Available-for-sale: | ' | ' | ' |
Proceeds from sales | 134,400 | 348,635 | 4,884 |
Trading: | ' | ' | ' |
Proceeds from sales | $46,109 | $17,180 | $2,026 |
Unrealized_Losses_on_Available
Unrealized Losses on Available-for-Sale Securities and Related Fair Value (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | $12,628,315 | $1,137,292 |
Unrealized losses, 12 months or less | 593,542 | 23,947 |
Fair value, greater than 12 months | 384,788 | 228,749 |
Unrealized losses, greater than 12 months | 43,369 | 17,129 |
Fair value, total | 13,013,103 | 1,366,041 |
Unrealized losses, total | 636,911 | 41,076 |
U.S. government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 406,462 | 95,094 |
Unrealized losses, 12 months or less | 2,334 | 2,054 |
Fair value, greater than 12 months | 4,404 | ' |
Unrealized losses, greater than 12 months | 744 | ' |
Fair value, total | 410,866 | 95,094 |
Unrealized losses, total | 3,078 | 2,054 |
US Government Agency | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 688 | ' |
Unrealized losses, 12 months or less | 13 | ' |
Fair value, total | 688 | ' |
Unrealized losses, total | 13 | ' |
States and political subdivisions | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 1,847,094 | 228,424 |
Unrealized losses, 12 months or less | 113,718 | 5,339 |
Fair value, greater than 12 months | 38,616 | ' |
Unrealized losses, greater than 12 months | 5,820 | ' |
Fair value, total | 1,885,710 | 228,424 |
Unrealized losses, total | 119,538 | 5,339 |
Foreign government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 2,244 | ' |
Unrealized losses, 12 months or less | 156 | ' |
Fair value, total | 2,244 | ' |
Unrealized losses, total | 156 | ' |
Public utilities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 480,124 | 16,817 |
Unrealized losses, 12 months or less | 19,904 | 253 |
Fair value, greater than 12 months | 27,946 | 8,266 |
Unrealized losses, greater than 12 months | 4,048 | 485 |
Fair value, total | 508,070 | 25,083 |
Unrealized losses, total | 23,952 | 738 |
Corporate securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 8,969,453 | 764,119 |
Unrealized losses, 12 months or less | 437,577 | 15,946 |
Fair value, greater than 12 months | 309,527 | 220,463 |
Unrealized losses, greater than 12 months | 32,581 | 16,644 |
Fair value, total | 9,278,980 | 984,582 |
Unrealized losses, total | 470,158 | 32,590 |
Mortgage-backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 902,186 | 27,618 |
Unrealized losses, 12 months or less | 19,735 | 246 |
Fair value, greater than 12 months | 4,295 | 20 |
Unrealized losses, greater than 12 months | 176 | ' |
Fair value, total | 906,481 | 27,638 |
Unrealized losses, total | 19,911 | 246 |
Collateralized mortgage obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | ' | 607 |
Unrealized losses, 12 months or less | ' | 15 |
Fair value, total | ' | 607 |
Unrealized losses, total | ' | 15 |
Collateralized debt obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value,12 months or less | 20,064 | 4,613 |
Unrealized losses, 12 months or less | 105 | 94 |
Fair value, total | 20,064 | 4,613 |
Unrealized losses, total | $105 | $94 |
Cumulative_Credit_Impairments_
Cumulative Credit Impairments on Fixed-maturity Securities (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Other Than Temporary Impairment Losses Recognized [Line Items] | ' | ' | ||
Beginning Balance | $60,128 | $60,620 | ||
Additions for credit impairments recognized on: | ' | ' | ||
Securities not previously impaired | 1,870 | [1] | 28,768 | [1] |
Securities previously impaired | 91 | [1] | ' | |
Securities that the Company intends to sell or more likely than not be required to sell before recovery (interest) | 13,087 | [1] | ' | |
Reductions for credit impairments previously on: | ' | ' | ||
Securities that matured, were sold, or were liquidated during the period | -29,454 | -29,260 | ||
Securities due to an increase in expected cash flows | ' | ' | ||
Ending Balance | $45,722 | $60,128 | ||
[1] | There were $15,048 and $28,768 of additions included in the net OTTI losses recognized in realized investment gains, net in the Consolidated Statements of Operations for the years ended December 31, 2013 and 2012, respectively. |
Cumulative_Credit_Impairments_1
Cumulative Credit Impairments on Fixed-maturity Securities (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Than Temporary Impairment Losses Recognized [Line Items] | ' | ' | ' |
Additions included in the net OTTI losses recognized in realized investment gains, net | $15,048 | $28,768 | $21,487 |
Gross_and_Net_Realized_Investm
Gross and Net Realized Investment Gains (Losses) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Investment gains/losses [Line Items] | ' | ' | ' |
Net gains on available-for-sale securities | $108,336 | $243,097 | $92,672 |
Gross gains on exchanges | 44,179 | 1,342 | 9,767 |
Gross losses on exchanges | -11 | ' | ' |
OTTI | -91 | -18,262 | -413 |
Net gains (losses) on held-to-maturity securities | 44,077 | -16,920 | 9,354 |
Benefit (provision) for mortgage loans on real estate | 18,500 | -10,232 | 32,325 |
Gains (losses) for mortgage loans on real estate | 4,929 | ' | -1,580 |
Investment in affiliates | 11,810 | ' | ' |
(Loss) gain on real estate sales | -29 | ' | -19,396 |
Impairments on real estate | ' | -4,538 | ' |
Net gains on sales of acquired loans | 674 | 5,154 | ' |
Other | ' | 11,140 | 18 |
Net realized investment gains | 188,297 | 227,701 | 113,393 |
Fixed-maturity securities | ' | ' | ' |
Investment gains/losses [Line Items] | ' | ' | ' |
Gross gains on sales | 160,091 | 294,642 | 179,387 |
Gross losses on sales | -36,798 | -52,449 | -65,414 |
OTTI | -14,957 | -10,506 | -21,074 |
Net gains (losses) on available for sale securities | 108,336 | 231,687 | 92,899 |
Equity securities | ' | ' | ' |
Investment gains/losses [Line Items] | ' | ' | ' |
Gross gains on sales | ' | 11,972 | ' |
Gross losses on sales | ' | -562 | -227 |
Net gains (losses) on available for sale securities | ' | $11,410 | ($227) |
Major_Categories_of_Interest_a
Major Categories of Interest and Similar Income, Net (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest and Other Income [Line Items] | ' | ' | ' |
Available-for-sale fixed-maturity securities | $3,185,680 | $3,210,655 | $3,082,859 |
Mortgage loans on real estate | 367,196 | 367,506 | 357,394 |
Investment income (loss) on trading securities | 9,735 | 4,624 | -606 |
Held-to-maturity fixed-maturity securities | 26,781 | 38,618 | 72,933 |
Rental income on real estate | 1,462 | 2,943 | 19,662 |
Interest on loans to affiliates | 1,549 | 2,614 | 8,435 |
Interest on acquired loans | 27,817 | 31,085 | 1,127 |
Interest rate swaps | 697 | 3,314 | 17,755 |
Other invested assets | 196 | 72 | 1,019 |
Policy loans | 10,461 | 10,177 | 11,005 |
Short-term securities | 5,575 | 4,872 | 4,380 |
Interest on assets held by reinsurers | 2,915 | 3,043 | 3,162 |
Total | 3,640,064 | 3,679,523 | 3,579,125 |
Less investment expenses | 47,947 | 47,117 | 59,109 |
Total interest and similar income, net | $3,592,117 | $3,632,406 | $3,520,016 |
Investment_in_Mortgage_Loans_o
Investment in Mortgage Loans on Real Estate (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Commercial | $6,200,697 | $6,129,542 |
Residential | 578 | 1,042 |
Valuation allowances | -66,750 | -85,250 |
Total mortgage loans on real estate | $6,134,525 | $6,045,334 |
Valuation_Allowances_on_Mortga
Valuation Allowances on Mortgage Loans on Real Estate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Valuation Allowance [Line Items] | ' | ' | ' |
(Benefit) provision charged to operations | ($13,500) | $40,250 | ' |
Mortgage Loans on Real Estate | ' | ' | ' |
Valuation Allowance [Line Items] | ' | ' | ' |
Balance, beginning of year | 85,250 | 75,018 | 107,343 |
(Benefit) provision charged to operations | -18,500 | 10,232 | -32,325 |
Balance, end of year | $66,750 | $85,250 | $75,018 |
Derivatives_and_Hedging_Instru2
Derivatives and Hedging Instruments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ' |
Percentage of interest rate swaps deemed effective | 100.00% | 100.00% | ' |
Cash flow hedge interest income to be earned in 2014 | $697 | ' | ' |
Forward commitment | 0 | 0 | 140,471 |
Stock Appreciation Rights (SARs) | ' | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ' |
Contracts owned | 193,249 | 183,889 | ' |
Contracts owned, cost | 15,018 | 12,753 | ' |
Future | ' | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ' |
Collateral securities, fair value | $826,227 | $412,078 | ' |
Components_of_Gains_or_Losses_
Components of Gains or Losses Related to Derivatives that Qualify as Cash Flow Hedges (Detail) (Interest Rate Swap, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest Rate Swap | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Interest rate swaps, net of tax (benefit) expense of ($238), ($950), and ($6,542), at December 31, 2013, 2012, and 2011, respectively | ($443) | ($1,763) | ($12,149) |
Components_of_Gains_or_Losses_1
Components of Gains or Losses Related to Derivatives that Qualify as Cash Flow Hedges (Parenthetical) (Detail) (Interest Rate Swap, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest Rate Swap | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Interest rate swaps, tax (benefit) expense | ($238) | ($950) | ($6,542) |
Company_Held_Options_Purchased
Company Held Options Purchased (Asset) and Options Sold (Liability) with Amortized Cost Basis, Fair Value, and Notional Amounts (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Purchased (asset), Amortized cost | $831,707 | $490,149 |
Sold (liability), Basis | 1,391,989 | 279,825 |
Options Held | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Purchased (asset), Amortized cost | 397,427 | 360,834 |
Purchased (asset), Fair value | 603,043 | 288,296 |
Purchased (asset), Notional | 29,396,102 | 19,359,512 |
Sold (liability), Basis | 305,781 | 126,873 |
Sold (liability), Fair value | 415,813 | 78,060 |
Sold (liability), Notional | $25,178,432 | $13,969,973 |
Balance_Sheet_Location_and_Fai
Balance Sheet Location and Fair Value of Derivatives (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | ($12,470,124) | ($10,751,238) |
Derivative Assets | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 831,707 | 490,149 |
Account balances and future policy benefit reserves | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -11,909,842 | -10,961,562 |
Derivative liability | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -1,391,989 | -279,825 |
Derivatives Designated As Cash Flow Hedges | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 1,570 | 2,251 |
Derivatives Designated As Cash Flow Hedges | Interest Rate Swap | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 1,570 | 2,251 |
Derivatives Not Designated As Cash Flow Hedges | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -12,471,694 | -10,753,489 |
Derivatives Not Designated As Cash Flow Hedges | Interest Rate Swap | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -730,399 | 39,131 |
Derivatives Not Designated As Cash Flow Hedges | Over the Counter | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 184,313 | 211,032 |
Derivatives Not Designated As Cash Flow Hedges | Exchange Traded Options | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 381 | -2,572 |
Derivatives Not Designated As Cash Flow Hedges | Stock Appreciation Rights (SARs) | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 2,536 | 1,777 |
Derivatives Not Designated As Cash Flow Hedges | Guaranteed Minimum Withdrawal Benefit | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -45,772 | -957,865 |
Derivatives Not Designated As Cash Flow Hedges | Guaranteed Minimum Accumulation Benefit | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -107,973 | -345,703 |
Derivatives Not Designated As Cash Flow Hedges | MVLO | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -11,756,097 | -9,657,994 |
Derivatives Not Designated As Cash Flow Hedges | Embedded Derivative | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | 3,819 | 3,938 |
Derivatives Not Designated As Cash Flow Hedges | Total Return Swap | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | -24,405 | -47,759 |
Derivatives Not Designated As Cash Flow Hedges | Other Embedded Derivative Financial Instruments | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivatives, Fair value | $1,903 | $2,526 |
Gains_or_Losses_Recognized_in_
Gains or Losses Recognized in Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Policy fees | $1,172,357 | $932,737 | $803,684 |
Policyholder benefits | -834,552 | -973,757 | -707,552 |
Change in fair value of annuity embedded derivatives | -1,598,061 | -1,140,185 | -1,984,638 |
Change in fair value of assets and liabilities | -108,682 | -819,276 | -1,966,610 |
Derivatives Not Designated As Cash Flow Hedges | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | 910,444 | -159,487 | -204,324 |
Derivatives Not Designated As Cash Flow Hedges | MVLO | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Policy fees | 568,744 | 518,420 | 408,196 |
Policyholder benefits | 10,191 | -38,024 | -185,844 |
Change in fair value of annuity embedded derivatives | -2,677,038 | -1,165,614 | -798,291 |
Derivatives Not Designated As Cash Flow Hedges | Over the Counter | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | -479,713 | -198,790 | 213,500 |
Derivatives Not Designated As Cash Flow Hedges | Exchange Traded Options | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | -11,538 | -119,830 | -148,046 |
Derivatives Not Designated As Cash Flow Hedges | Future | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | 1,693,399 | -14,930 | -600,321 |
Derivatives Not Designated As Cash Flow Hedges | Stock Appreciation Rights (SARs) | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | 1,823 | 1,292 | -938 |
Derivatives Not Designated As Cash Flow Hedges | Embedded Derivative | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | -119 | -33 | -128 |
Derivatives Not Designated As Cash Flow Hedges | Other Embedded Derivative Financial Instruments | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | -623 | -2,151 | 1,965 |
Derivatives Not Designated As Cash Flow Hedges | Forward Sales Commitments [Member] | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | ' | ' | -473 |
Derivatives Not Designated As Cash Flow Hedges | Interest Rate Swap | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | -684,511 | 39,610 | 317,242 |
Derivatives Not Designated As Cash Flow Hedges | Total Return Swap | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | 391,726 | 152,174 | 38,346 |
Derivatives Not Designated As Cash Flow Hedges | Currency Swap | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of assets and liabilities | ' | -16,829 | -25,471 |
Derivatives Not Designated As Cash Flow Hedges | Guaranteed Minimum Withdrawal Benefit | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of annuity embedded derivatives | 912,073 | 59,087 | -926,603 |
Derivatives Not Designated As Cash Flow Hedges | Guaranteed Minimum Accumulation Benefit | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Change in fair value of annuity embedded derivatives | $166,904 | ($33,658) | ($259,744) |
Derivative_Assets_And_Liabilit
Derivative Assets And Liabilities Subject To Enforceable Master Netting Arrangement (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ||
Net amounts presented in the balance sheet, derivatives assets | $831,707 | $490,149 | ||
Net amounts presented in the balance sheet, derivatives liabilities | -1,391,989 | -279,825 | ||
Net amounts presented in the balance sheet, net derivatives | -12,470,124 | -10,751,238 | ||
Derivative liability | ' | ' | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ||
Gross amounts recognized, derivatives liabilities | -1,391,989 | -279,825 | ||
Gross amounts offset in the balance sheet, derivatives liabilities | ' | ' | ||
Net amounts presented in the balance sheet, derivatives liabilities | -1,391,989 | -279,825 | ||
Gross amounts not offset in the balance sheet, financial instruments, derivative liabilities | 700,630 | [1] | 259,700 | [1] |
Gross amounts not offset in the balance sheet, collateral pledged/received | 690,015 | 16,072 | ||
Net amount, derivatives liabilities | -1,344 | -4,053 | ||
Derivative Assets | ' | ' | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ||
Gross amounts recognized, derivatives assets | 823,449 | 481,908 | ||
Gross amounts offset in the balance sheet, derivatives assets | ' | ' | ||
Net amounts presented in the balance sheet, derivatives assets | 823,449 | 481,908 | ||
Gross amounts not offset in the balance sheet, financial instruments, derivative assets | -700,630 | [1] | -259,700 | [1] |
Gross amounts not offset in the balance sheet, collateral pledged/received | -103,612 | -220,433 | ||
Net amount, derivatives assets | 19,207 | 1,775 | ||
Derivative | ' | ' | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' | ||
Gross amounts recognized, net derivatives | -568,540 | 202,083 | ||
Net amounts presented in the balance sheet, net derivatives | -568,540 | 202,083 | ||
Gross amounts not offset in the balance sheet, collateral pledged/received | 586,403 | -204,361 | ||
Net amount | $17,863 | ($2,278) | ||
[1] | Represents the amount of assets or liabilities that could be offset by liabilities or assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Assets_and_Liabilities_Measure
Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | $66,403,722 | $68,178,162 | ||
Derivative investments | 831,707 | 490,149 | ||
Equity securities, available for sale | 29,112 | ' | ||
Equity securities, trading | 227,822 | 31,837 | ||
Corporate-owned life insurance | 290,752 | ' | ||
Separate account assets | 30,747,777 | 25,670,675 | ||
Total assets accounted for at fair value | 98,530,892 | 94,370,823 | ||
Liabilities accounted for at fair value: | ' | ' | ||
Derivative liabilities | 1,391,989 | 279,825 | ||
Separate account liabilities | 30,747,777 | 25,670,675 | ||
Reserves at fair value | 11,943,461 | [1] | 10,961,562 | [1] |
Total liabilities accounted for at fair value | 44,083,227 | 36,912,062 | ||
U.S. government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 1,158,859 | 1,009,447 | ||
Agencies not backed by the full faith and credit of the U.S. government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 511,829 | 873,624 | ||
States and political subdivisions | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 4,958,360 | 4,473,633 | ||
Foreign government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 365,234 | 523,994 | ||
Public utilities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 5,136,210 | 5,394,379 | ||
Corporate securities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 41,676,852 | 40,937,472 | ||
Mortgage-backed securities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 12,525,293 | 14,893,697 | ||
Collateralized mortgage obligations | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 14,212 | 17,150 | ||
Collateralized debt obligations | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 56,873 | 54,766 | ||
Fair Value, Inputs, Level 1 | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Derivative investments | 1,151 | 2,596 | ||
Equity securities, available for sale | 29,112 | ' | ||
Equity securities, trading | 206,500 | 18,979 | ||
Separate account assets | 30,747,777 | 25,670,675 | ||
Total assets accounted for at fair value | 32,143,399 | 26,701,697 | ||
Liabilities accounted for at fair value: | ' | ' | ||
Derivative liabilities | 770 | 5,167 | ||
Separate account liabilities | 30,747,777 | 25,670,675 | ||
Total liabilities accounted for at fair value | 30,748,547 | 25,675,842 | ||
Fair Value, Inputs, Level 1 | U.S. government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 1,158,859 | 1,009,447 | ||
Fair Value, Inputs, Level 2 | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Derivative investments | 821,890 | 479,669 | ||
Equity securities, trading | 21,322 | 12,858 | ||
Corporate-owned life insurance | 290,752 | ' | ||
Total assets accounted for at fair value | 62,356,592 | 63,872,042 | ||
Liabilities accounted for at fair value: | ' | ' | ||
Derivative liabilities | 1,361,968 | 222,953 | ||
Total liabilities accounted for at fair value | 1,361,968 | 222,953 | ||
Fair Value, Inputs, Level 2 | Agencies not backed by the full faith and credit of the U.S. government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 511,829 | 873,624 | ||
Fair Value, Inputs, Level 2 | States and political subdivisions | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 4,958,360 | 4,473,633 | ||
Fair Value, Inputs, Level 2 | Foreign government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 331,950 | 489,088 | ||
Fair Value, Inputs, Level 2 | Public utilities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 4,935,015 | 5,201,217 | ||
Fair Value, Inputs, Level 2 | Corporate securities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 37,949,049 | 37,435,895 | ||
Fair Value, Inputs, Level 2 | Mortgage-backed securities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 12,522,213 | 14,888,908 | ||
Fair Value, Inputs, Level 2 | Collateralized mortgage obligations | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 14,212 | 17,150 | ||
Fair Value, Inputs, Level 3 | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Derivative investments | 8,666 | 7,884 | ||
Total assets accounted for at fair value | 4,030,901 | 3,797,084 | ||
Liabilities accounted for at fair value: | ' | ' | ||
Derivative liabilities | 29,251 | 51,705 | ||
Reserves at fair value | 11,943,461 | [1] | 10,961,562 | [1] |
Total liabilities accounted for at fair value | 11,972,712 | 11,013,267 | ||
Fair Value, Inputs, Level 3 | Foreign government | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 33,284 | 34,906 | ||
Fair Value, Inputs, Level 3 | Public utilities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 201,195 | 193,162 | ||
Fair Value, Inputs, Level 3 | Corporate securities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 3,727,803 | 3,501,577 | ||
Fair Value, Inputs, Level 3 | Mortgage-backed securities | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | 3,080 | 4,789 | ||
Fair Value, Inputs, Level 3 | Collateralized debt obligations | ' | ' | ||
Assets accounted for at fair value: | ' | ' | ||
Fixed-maturity securities, available-for-sale | $56,873 | $54,766 | ||
[1] | Reserves at fair value are reported in account balances and future policy benefit reserves on the Consolidated Balance Sheets. |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Feb. 12, 2010 | Dec. 31, 2010 | Dec. 31, 2013 |
Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Private placement | Private placement | Collateralized debt obligations | Mortgage Loans on Real Estate | Mortgage Loans on Real Estate | Mortgage Loans on Real Estate | Additional Impairment Charges | Account balances and future policy benefit reserves | ||||
Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Private placement securities | $23,262 | ' | $50,046 | $50,046 | $23,262 | $3,902,925 | $3,722,038 | ' | ' | ' | ' | ' | ' |
Impairment on real estate held for sale | 4,538 | ' | ' | ' | ' | ' | ' | 413 | 1,580 | 5,000 | ' | 2,167 | ' |
Impaired value of real estate acquired on deed in lieu of foreclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,500 | ' | ' |
Gain on sale of real estate | ' | 7,078 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FHLB stock held | 10,000 | ' | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Funding agreement, balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 |
Amount of collateral | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $598,671 |
Reconciliation_of_the_Beginnin
Reconciliation of the Beginning and Ending Balances for the Company's Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Available-for-sale Securities | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | $3,789,200 | $2,750,569 |
Net income | 5,444 | 3,831 |
Other comprehensive income (loss) | -242,655 | 152,288 |
Purchases and issuances | 618,044 | 985,500 |
Sales and settlements | -98,489 | -40,099 |
Transfer into and/or out of Level 3, net | -49,310 | -62,889 |
Ending balance | 4,022,234 | 3,789,200 |
Realized gains (losses) included in net Income related to financial instruments | 2,210 | 2,871 |
Available-for-sale Securities | Foreign government | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | 34,906 | 32,382 |
Other comprehensive income (loss) | -1,622 | 2,524 |
Ending balance | 33,284 | 34,906 |
Available-for-sale Securities | Public utilities | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | 193,162 | 58,796 |
Other comprehensive income (loss) | -10,278 | 11,366 |
Purchases and issuances | 68,300 | 123,000 |
Sales and settlements | -679 | ' |
Transfer into and/or out of Level 3, net | -49,310 | ' |
Ending balance | 201,195 | 193,162 |
Available-for-sale Securities | Corporate securities | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | 3,501,577 | 2,523,244 |
Net income | 3,344 | 670 |
Other comprehensive income (loss) | -237,236 | 136,784 |
Purchases and issuances | 549,744 | 862,500 |
Sales and settlements | -89,626 | -21,621 |
Ending balance | 3,727,803 | 3,501,577 |
Realized gains (losses) included in net Income related to financial instruments | 140 | 341 |
Available-for-sale Securities | Collateralized debt obligations | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | 54,766 | 66,958 |
Net income | 2,009 | 2,899 |
Other comprehensive income (loss) | 6,413 | 1,638 |
Sales and settlements | -6,316 | -16,729 |
Ending balance | 56,873 | 54,766 |
Realized gains (losses) included in net Income related to financial instruments | 1,984 | 2,268 |
Available-for-sale Securities | Collateralized debt obligations | Adjustments To Fair Value | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Ending balance | 56,872 | ' |
Available-for-sale Securities | Mortgage-backed securities | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | 4,789 | 69,189 |
Net income | 91 | 262 |
Other comprehensive income (loss) | 68 | -24 |
Sales and settlements | -1,868 | -1,749 |
Transfer into and/or out of Level 3, net | ' | -62,889 |
Ending balance | 3,080 | 4,789 |
Realized gains (losses) included in net Income related to financial instruments | 86 | 262 |
Derivative Assets | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | 7,884 | 70,145 |
Net income | 593,079 | 512,096 |
Sales and settlements | -592,297 | -574,357 |
Ending balance | 8,666 | 7,884 |
Realized gains (losses) included in net Income related to financial instruments | 782 | -57,935 |
Derivative Assets | Collateralized debt obligations | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Ending balance | 3,819 | ' |
Derivative liability | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | -51,705 | -7,059 |
Net income | -242,038 | -408,325 |
Sales and settlements | 264,492 | 363,679 |
Ending balance | -29,251 | -51,705 |
Realized gains (losses) included in net Income related to financial instruments | 22,453 | -44,646 |
Reserve at Fair Value | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning balance | -10,961,562 | -10,612,779 |
Net income | -1,015,824 | -793,258 |
Purchases and issuances | -1,232,687 | -1,143,374 |
Sales and settlements | 1,266,612 | 1,587,849 |
Ending balance | -11,943,461 | -10,961,562 |
Realized gains (losses) included in net Income related to financial instruments | ($2,248,511) | $1,936,632 |
Assets_and_Liabilities_Measure1
Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Annuitizations, minimum | 5.00% | ' | ' | |
Unobservable Input, Annuitizations, maximum | 6.00% | ' | ' | |
Available-for-sale Securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | $4,022,234 | $3,789,200 | $2,750,569 | |
Available-for-sale Securities | Foreign government | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 33,284 | 34,906 | 32,382 | |
Valuation Technique | 'Matrix pricing | ' | ' | |
Available-for-sale Securities | Public utilities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 201,195 | 193,162 | 58,796 | |
Valuation Technique | 'Matrix pricing | ' | ' | |
Available-for-sale Securities | Corporate securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 3,727,803 | 3,501,577 | 2,523,244 | |
Valuation Technique | 'Matrix pricing | ' | ' | |
Available-for-sale Securities | Collateralized debt obligations | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 56,873 | 54,766 | 66,958 | |
Valuation Technique | 'Intex discounted cash flows | ' | ' | |
Available-for-sale Securities | Mortgage-backed securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 3,080 | 4,789 | 69,189 | |
Valuation Technique | 'Intex discounted cash flows | ' | ' | |
Derivative Assets | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 8,666 | 7,884 | 70,145 | |
Derivative Assets | Collateralized debt obligations | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 3,819 | ' | ' | |
Valuation Technique | 'Discounted cash flow | ' | ' | |
Unobservable Input, Constant prepayment rate | ' | [1] | ' | ' |
Derivative Assets | Total Return Swap | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | 4,847 | ' | ' | |
Valuation Technique | 'Third-Party Vendor | ' | ' | |
Unobservable Input, Spread and discount rates | ' | [1] | ' | ' |
Derivative liability | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | -29,251 | -51,705 | -7,059 | |
Derivative liability | Total Return Swap | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | -29,251 | ' | ' | |
Valuation Technique | 'Third-Party Vendor | ' | ' | |
Unobservable Input, Spread and discount rates | ' | [1] | ' | ' |
Reserve at Fair Value | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | -11,943,461 | -10,961,562 | -10,612,779 | |
Reserve at Fair Value | MVLO | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | -11,756,097 | ' | ' | |
Valuation Technique | 'Discounted cash flow | ' | ' | |
Unobservable Input, Annuitizations, minimum | 0.00% | ' | ' | |
Unobservable Input, Annuitizations, maximum | 25.00% | ' | ' | |
Unobservable Input, Mortality, minimum | 0.00% | ' | ' | |
Unobservable Input, Mortality, maximum | 100.00% | ' | ' | |
Reserve at Fair Value | GMWB and GMAB | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Fair Value | ($153,745) | ' | ' | |
Valuation Technique | 'Discounted cash flow | ' | ' | |
Unobservable Input, Mortality, minimum | 0.00% | ' | ' | |
Unobservable Input, Mortality, maximum | 100.00% | ' | ' | |
Minimum | Available-for-sale Securities | Foreign government | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 160 | ' | ' | |
Minimum | Available-for-sale Securities | Public utilities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 72 | ' | ' | |
Minimum | Available-for-sale Securities | Corporate securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 30 | ' | ' | |
Minimum | Available-for-sale Securities | Collateralized debt obligations | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Constant prepayment rate | 0.00% | ' | ' | |
Unobservable Input, Annual default rate | 0.50% | ' | ' | |
Unobservable Input, Loss severity | 10.00% | ' | ' | |
Unobservable Input, Delinquencies | 0.00% | ' | ' | |
Unobservable Input, Discount Margin to LIBOR | 1.70% | ' | ' | |
Minimum | Available-for-sale Securities | Mortgage-backed securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Constant prepayment rate | 1.50% | ' | ' | |
Unobservable Input, Annual default rate | 15.00% | ' | ' | |
Unobservable Input, Loss severity | 55.00% | ' | ' | |
Unobservable Input, Delinquencies | 5.00% | ' | ' | |
Unobservable Input, Discount Margin to LIBOR | 4.20% | ' | ' | |
Minimum | Reserve at Fair Value | MVLO | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Surrenders | 0.00% | ' | ' | |
Unobservable Input, Withdrawal Benefit Election | 0.00% | ' | ' | |
Minimum | Reserve at Fair Value | GMWB and GMAB | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Surrenders | 0.50% | ' | ' | |
Maximum | Available-for-sale Securities | Foreign government | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 164 | ' | ' | |
Maximum | Available-for-sale Securities | Public utilities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 311 | ' | ' | |
Maximum | Available-for-sale Securities | Corporate securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 486 | ' | ' | |
Maximum | Available-for-sale Securities | Collateralized debt obligations | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Constant prepayment rate | 25.00% | ' | ' | |
Unobservable Input, Annual default rate | 62.50% | ' | ' | |
Unobservable Input, Loss severity | 80.00% | ' | ' | |
Unobservable Input, Delinquencies | 32.00% | ' | ' | |
Unobservable Input, Discount Margin to LIBOR | 10.70% | ' | ' | |
Maximum | Available-for-sale Securities | Mortgage-backed securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Constant prepayment rate | 2.00% | ' | ' | |
Unobservable Input, Annual default rate | 90.00% | ' | ' | |
Unobservable Input, Loss severity | 70.00% | ' | ' | |
Unobservable Input, Delinquencies | 30.00% | ' | ' | |
Unobservable Input, Discount Margin to LIBOR | 4.20% | ' | ' | |
Maximum | Reserve at Fair Value | MVLO | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Surrenders | 25.00% | ' | ' | |
Unobservable Input, Withdrawal Benefit Election | 50.00% | ' | ' | |
Maximum | Reserve at Fair Value | GMWB and GMAB | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Surrenders | 35.00% | ' | ' | |
Weighted Average | Available-for-sale Securities | Foreign government | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 161 | ' | ' | |
Weighted Average | Available-for-sale Securities | Public utilities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 176 | ' | ' | |
Weighted Average | Available-for-sale Securities | Corporate securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Option adjusted spread | 177 | ' | ' | |
Weighted Average | Available-for-sale Securities | Collateralized debt obligations | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Constant prepayment rate | 0.70% | ' | ' | |
Unobservable Input, Annual default rate | 5.10% | ' | ' | |
Unobservable Input, Loss severity | 56.10% | ' | ' | |
Unobservable Input, Delinquencies | 1.00% | ' | ' | |
Unobservable Input, Discount Margin to LIBOR | 5.40% | ' | ' | |
Weighted Average | Available-for-sale Securities | Mortgage-backed securities | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | |
Unobservable Input, Constant prepayment rate | 2.00% | ' | ' | |
Unobservable Input, Annual default rate | 20.00% | ' | ' | |
Unobservable Input, Loss severity | 57.60% | ' | ' | |
Unobservable Input, Delinquencies | 16.80% | ' | ' | |
Unobservable Input, Discount Margin to LIBOR | 4.20% | ' | ' | |
[1] | Management does not have insight into the specific assumptions used. See narrative below for qualitative discussion. |
Fair_Value_of_Financial_Assets
Fair Value of Financial Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financial assets, Carrying amount: | ' | ' |
Held-to-maturity fixed-maturity securities | $220,752 | $475,074 |
Mortgage loans on real estate | 6,134,525 | 6,045,334 |
Loans to affiliates | 1,191,170 | 28,725 |
Policy loans | 158,217 | 163,768 |
Acquired loans | 205,131 | 216,062 |
Real Estate - held for sale | ' | 15,500 |
Other invested assets | 50,046 | 23,262 |
Financial liabilities, Carrying amount : | ' | ' |
Investment contracts | 71,735,796 | 69,286,685 |
Mortgage notes payable | 99,210 | 105,858 |
Financial assets, Fair value: | ' | ' |
Held-to-maturity fixed-maturity securities | 219,516 | 486,715 |
Mortgage loans on real estate | 6,554,054 | 6,773,362 |
Loans to affiliates | 1,191,170 | 29,720 |
Policy loans | 158,217 | 163,768 |
Acquired loans | 247,558 | 239,997 |
Real Estate - held for sale | ' | 15,500 |
Other invested assets | 50,046 | 23,262 |
Financial liabilities, Fair value: | ' | ' |
Investment contracts | 72,477,568 | 70,143,265 |
Mortgage notes payable | 112,884 | 129,065 |
Fair Value, Inputs, Level 2 | ' | ' |
Financial assets, Fair value: | ' | ' |
Loans to affiliates | 1,191,170 | ' |
Policy loans | 158,217 | 163,768 |
Acquired loans | 162,320 | 204,632 |
Real Estate - held for sale | ' | 15,500 |
Fair Value, Inputs, Level 3 | ' | ' |
Financial assets, Fair value: | ' | ' |
Held-to-maturity fixed-maturity securities | 219,516 | 486,715 |
Mortgage loans on real estate | 6,554,054 | 6,773,362 |
Loans to affiliates | ' | 29,720 |
Acquired loans | 85,238 | 35,365 |
Other invested assets | 50,046 | 23,262 |
Financial liabilities, Fair value: | ' | ' |
Investment contracts | 72,477,568 | 70,143,265 |
Mortgage notes payable | $112,884 | $129,065 |
Allowances_For_Credit_Losses_A
Allowances For Credit Losses And Investment in Financing Receivables (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for credit losses: | ' | ' |
Beginning balance | $92,142 | $83,889 |
Provision (benefit) | -19,175 | 8,253 |
Ending balance | 72,967 | 92,142 |
Ending balance individually evaluated for impairment | 28,255 | 41,611 |
Ending balance collectively evaluated for impairment | 44,712 | 50,531 |
Financing receivables: | ' | ' |
Ending balance | 6,230,064 | 6,152,961 |
Ending balance individually evaluated for impairment | 118,255 | 118,111 |
Ending balance collectively evaluated for impairment | 6,111,809 | 6,034,850 |
Mortgage loans | ' | ' |
Allowance for credit losses: | ' | ' |
Beginning balance | 85,250 | 75,018 |
Provision (benefit) | -18,500 | 10,232 |
Ending balance | 66,750 | 85,250 |
Ending balance individually evaluated for impairment | 26,750 | 40,250 |
Ending balance collectively evaluated for impairment | 40,000 | 45,000 |
Financing receivables: | ' | ' |
Ending balance | 6,201,275 | 6,130,584 |
Ending balance individually evaluated for impairment | 116,750 | 116,750 |
Ending balance collectively evaluated for impairment | 6,084,525 | 6,013,834 |
Non Trade Receivable | ' | ' |
Allowance for credit losses: | ' | ' |
Beginning balance | 6,892 | 8,871 |
Provision (benefit) | -675 | -1,979 |
Ending balance | 6,217 | 6,892 |
Ending balance individually evaluated for impairment | 1,505 | 1,361 |
Ending balance collectively evaluated for impairment | 4,712 | 5,531 |
Financing receivables: | ' | ' |
Ending balance | 28,789 | 22,377 |
Ending balance individually evaluated for impairment | 1,505 | 1,361 |
Ending balance collectively evaluated for impairment | $27,284 | $21,016 |
LoantoValue_Analysis_Detail
Loan-to-Value Analysis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | $6,230,064 | $6,152,961 |
Mortgage Receivable | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 6,200,697 | 6,129,542 |
Mortgage loan, loan to value percentage | 100.00% | 100.00% |
Mortgage Receivable | Less than 50% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 2,025,011 | 1,735,242 |
Mortgage loan, loan to value percentage | 32.70% | 28.30% |
Mortgage Receivable | 50% To 60% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 1,668,987 | 1,859,780 |
Mortgage loan, loan to value percentage | 26.90% | 30.30% |
Mortgage Receivable | 60% To 70% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 1,622,171 | 1,124,262 |
Mortgage loan, loan to value percentage | 26.20% | 18.30% |
Mortgage Receivable | 70% To 80% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 477,096 | 960,158 |
Mortgage loan, loan to value percentage | 7.70% | 15.70% |
Mortgage Receivable | 80% To 90% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 168,964 | 205,356 |
Mortgage loan, loan to value percentage | 2.70% | 3.40% |
Mortgage Receivable | 90% To 100% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | ' | 95,890 |
Mortgage loan, loan to value percentage | ' | 1.60% |
Mortgage Receivable | Greater than 100% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 238,468 | 148,854 |
Mortgage loan, loan to value percentage | 3.80% | 2.40% |
Residential Mortgage | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 578 | 1,042 |
Mortgage loan, loan to value percentage | 100.00% | 100.00% |
Residential Mortgage | Less than 50% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 578 | 1,042 |
Mortgage loan, loan to value percentage | 100.00% | 100.00% |
Mortgage loans | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 6,201,275 | 6,130,584 |
Mortgage loan, loan to value percentage | 100.00% | 100.00% |
Mortgage loans | Less than 50% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 2,025,589 | 1,736,284 |
Mortgage loan, loan to value percentage | 32.70% | 28.30% |
Mortgage loans | 50% To 60% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 1,668,987 | 1,859,780 |
Mortgage loan, loan to value percentage | 26.90% | 30.30% |
Mortgage loans | 60% To 70% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 1,622,171 | 1,124,262 |
Mortgage loan, loan to value percentage | 26.20% | 18.30% |
Mortgage loans | 70% To 80% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 477,096 | 960,158 |
Mortgage loan, loan to value percentage | 7.70% | 15.70% |
Mortgage loans | 80% To 90% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | 168,964 | 205,356 |
Mortgage loan, loan to value percentage | 2.70% | 3.30% |
Mortgage loans | 90% To 100% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | ' | 95,890 |
Mortgage loan, loan to value percentage | ' | 1.60% |
Mortgage loans | Greater than 100% | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Mortgage loan | $238,468 | $148,854 |
Mortgage loan, loan to value percentage | 3.80% | 2.50% |
Debt_Service_Coverage_Ratio_De
Debt Service Coverage Ratio (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Commercial mortgage loans | $6,200,697 | $6,129,542 |
Greater than 1.4x | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Commercial mortgage loans | 4,103,809 | 4,156,144 |
1.2x To 1.4x | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Commercial mortgage loans | 955,230 | 776,303 |
1.0x To 1.2x | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Commercial mortgage loans | 858,438 | 752,588 |
Less than 1.0x | ' | ' |
Financing Receivable, Recorded Investment [Line Items] | ' | ' |
Commercial mortgage loans | $283,220 | $444,507 |
Nontrade_Receivables_and_Allow
Nontrade Receivables and Allowance for Credit Losses (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | ' | ' | ' |
Nontrade receivables | $6,230,064 | $6,152,961 | ' |
Allowance for credit losses | -72,967 | -92,142 | -83,889 |
Non Trade Receivable | ' | ' | ' |
Financing Receivable, Allowance for Credit Losses [Line Items] | ' | ' | ' |
Nontrade receivables | 28,789 | 22,377 | ' |
Allowance for credit losses | -6,217 | -6,892 | -8,871 |
Net nontrade receivables | 22,572 | 15,485 | ' |
Agents | Non Trade Receivable | ' | ' | ' |
Financing Receivable, Allowance for Credit Losses [Line Items] | ' | ' | ' |
Nontrade receivables | 9,681 | 9,008 | ' |
Allowance for credit losses | -4,712 | -5,531 | ' |
Net nontrade receivables | 4,969 | 3,477 | ' |
Reinsurer | Non Trade Receivable | ' | ' | ' |
Financing Receivable, Allowance for Credit Losses [Line Items] | ' | ' | ' |
Nontrade receivables | 19,108 | 13,369 | ' |
Allowance for credit losses | -1,505 | -1,361 | ' |
Net nontrade receivables | $17,603 | $12,008 | ' |
Aging_Analysis_of_Past_Due_Fin
Aging Analysis of Past Due Financing Receivables (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ' | ' | ||
31-60 past due | $6,657 | $5,841 | ||
61-90 past due | 3,457 | 2,283 | ||
Greater than 90 days past due | 8,715 | 8,070 | ||
Total past due | 18,829 | 16,194 | ||
Current | 6,211,235 | [1] | 6,136,767 | [1] |
Total | 6,230,064 | 6,152,961 | ||
Mortgage loans | ' | ' | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ' | ' | ||
Current | 6,201,275 | [1] | 6,130,584 | [1] |
Total | 6,201,275 | 6,130,584 | ||
Non Trade Receivable | ' | ' | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ' | ' | ||
31-60 past due | 6,657 | 5,841 | ||
61-90 past due | 3,457 | 2,283 | ||
Greater than 90 days past due | 8,715 | 8,070 | ||
Total past due | 18,829 | 16,194 | ||
Current | 9,960 | [1] | 6,183 | [1] |
Total | $28,789 | $22,377 | ||
[1] | Current amount includes all receivables 30 days or less past due. |
Goodwill_Additional_Informatio
Goodwill - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | ' | ' |
Goodwill impairment | $0 | $0 |
Value_of_Business_Acquired_and2
Value of Business Acquired and Changes in the Balances (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Business Acquisition [Line Items] | ' | ' | ' |
Balance, beginning of year | ' | ' | $853 |
Interest | 439 | 573 | 771 |
Amortization | -4,327 | -5,218 | -3,755 |
Change in shadow VOBA | 3,888 | 4,645 | 2,131 |
Balance, end of year | ' | ' | ' |
Net_Amortization_Of_VOBA_Detai
Net Amortization Of VOBA (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Schedule Of Estimated Future Amortization Expense [Line Items] | ' |
2014 | $2,834 |
2015 | 2,251 |
2016 | 1,703 |
2017 | 803 |
2018 | $830 |
Intangible_Assets_Detail
Intangible Assets (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule Of Estimated Future Amortization Expense [Line Items] | ' | ' | ' |
Balance, beginning of year | $3,271 | $3,435 | $4,173 |
Amortization | -1,151 | -164 | -738 |
Balance, end of year | $2,120 | $3,271 | $3,435 |
Amortization_of_Intangible_Ass
Amortization of Intangible Assets (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Schedule Of Estimated Future Amortization Expense [Line Items] | ' |
2014 | $70 |
2015 and beyond | ' |
Value_of_Business_Acquired_and3
Value of Business Acquired and Other Intangible Assets - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Trade Names | ||
Business Acquisition [Line Items] | ' | ' | ' |
Intangible amortization | ' | ' | $1,050 |
Accumulated amortization of VOBA and other intangible assets | $249,210 | $243,732 | ' |
Deferred_Acquisition_Costs_Det
Deferred Acquisition Costs (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Deferred Policy Acquisition Costs [Line Items] | ' | ' | ' | |||
Balance, beginning of year | $2,603,307 | $4,858,136 | $5,352,713 | |||
Capitalization | 812,006 | [1] | 737,390 | [1] | 952,734 | [1] |
Interest | 186,157 | 222,229 | 205,772 | |||
Amortization | -1,204,862 | -1,643,969 | -423,355 | |||
Change in shadow DAC | 2,423,607 | -1,570,479 | -1,229,728 | |||
Balance, end of year | $4,820,215 | $2,603,307 | $4,858,136 | |||
[1] | Reflects prospective adoption, in 2012, of new acquisition cost guidance. See note 2 for adoption impact. |
Pretax_Impact_on_Assets_and_Li
Pretax Impact on Assets and Liabilities as Result of Unlocking (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Assets: | ' | ' | ' |
Total assets (decrease) increase | ($102,826) | ($79,140) | $15,364 |
Liabilities: | ' | ' | ' |
Total liabilities increase (decrease) | -221,635 | 86,692 | -46,634 |
Net (decrease) increase | 118,809 | -165,832 | 61,998 |
Deferred income tax (benefit) expense | 41,583 | -58,041 | 21,700 |
Net (decrease) increase | 77,226 | -107,791 | 40,298 |
Account balances and future policy benefit reserves | ' | ' | ' |
Liabilities: | ' | ' | ' |
Total liabilities increase (decrease) | -224,074 | 86,596 | -69,519 |
Unearned premiums | ' | ' | ' |
Liabilities: | ' | ' | ' |
Total liabilities increase (decrease) | 2,439 | 96 | 22,885 |
DAC | ' | ' | ' |
Assets: | ' | ' | ' |
Total assets (decrease) increase | -82,082 | -63,616 | 34,334 |
DSI | ' | ' | ' |
Assets: | ' | ' | ' |
Total assets (decrease) increase | -20,860 | -14,512 | -23,621 |
VOBA | ' | ' | ' |
Assets: | ' | ' | ' |
Total assets (decrease) increase | $116 | ($1,012) | $4,651 |
Schedule_of_Deferred_Sales_Ind
Schedule of Deferred Sales Inducement Activity (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Movement in Deferred Sales Inducements [Roll Forward] | ' | ' | ' |
Balance, beginning of year | $673,944 | $1,167,736 | $1,161,568 |
Capitalization | 131,127 | 161,828 | 299,368 |
Amortization | -242,605 | -289,641 | -93,621 |
Interest | 38,936 | 43,279 | 38,892 |
Change in shadow DSI | 475,128 | -409,258 | -238,471 |
Balance, end of year | $1,076,530 | $673,944 | $1,167,736 |
Guaranteed_Minimums_Detail
Guaranteed Minimums (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Guaranteed Minimum Death Benefit | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | $32,963,250 | $29,513,713 |
Net amount at risk | 491,653 | 901,377 |
Guaranteed Minimum Death Benefit | Return of premium | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 22,290,541 | 19,474,339 |
Net amount at risk | 36,832 | 101,609 |
Weighted age (years) | '63 years | '63 years 3 months 18 days |
Guaranteed Minimum Death Benefit | Ratchet and return of premium | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 5,388,868 | 4,961,385 |
Net amount at risk | 25,638 | 70,064 |
Weighted age (years) | '66 years 6 months | '66 years 7 months 6 days |
Guaranteed Minimum Death Benefit | Ratchet and rollup | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 4,861,539 | 4,675,427 |
Net amount at risk | 397,864 | 706,453 |
Weighted age (years) | '69 years 2 months 12 days | '69 years 1 month 6 days |
Guaranteed Minimum Death Benefit | Ratchet and earnings protection rider | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 4,107 | 3,760 |
Net amount at risk | 1,588 | 2,133 |
Weighted age (years) | '80 years 2 months 12 days | '79 years 1 month 6 days |
Guaranteed Minimum Death Benefit | Reset | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 109,406 | 104,916 |
Net amount at risk | 616 | 1,257 |
Weighted age (years) | '76 years 1 month 6 days | '76 years 1 month 6 days |
Guaranteed Minimum Death Benefit | Earnings protection rider | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 308,789 | 293,886 |
Net amount at risk | 29,115 | 19,861 |
Weighted age (years) | '67 years | '65 years 10 months 24 days |
Guaranteed Minimum Income Benefit | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 9,659,381 | 10,094,184 |
Net amount at risk | 604,713 | 1,094,492 |
Guaranteed Minimum Income Benefit | Return of premium | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 141,847 | 144,503 |
Net amount at risk | 506 | 930 |
Weighted age (years) | '71 years 3 months 18 days | '71 years 2 months 12 days |
Guaranteed Minimum Income Benefit | Ratchet and return of premium | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 3,110,426 | 3,837,990 |
Net amount at risk | 8,818 | 59,369 |
Weighted age (years) | '68 years | '67 years 2 months 12 days |
Guaranteed Minimum Income Benefit | Ratchet and rollup | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 6,407,108 | 6,111,691 |
Net amount at risk | 595,389 | 1,034,193 |
Weighted age (years) | '65 years 7 months 6 days | '65 years 2 months 12 days |
Guaranteed Minimum Accumulation Benefit | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 9,184,379 | 9,085,720 |
Net amount at risk | 24,123 | 97,962 |
Guaranteed Minimum Accumulation Benefit | Five years | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 4,660,325 | 5,550,209 |
Net amount at risk | 14,165 | 85,207 |
Weighted age (years) | '66 years 2 months 12 days | '65 years 3 months 18 days |
Guaranteed Minimum Accumulation Benefit | Ten years | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 4,353 | 4,004 |
Net amount at risk | 17 | 48 |
Weighted age (years) | '78 years 10 months 24 days | '76 years 9 months 18 days |
Guaranteed Minimum Accumulation Benefit | Target date retirement - 7 year | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 813,148 | 777,294 |
Net amount at risk | 1,852 | 4,139 |
Weighted age (years) | '61 years 6 months | '60 years 7 months 6 days |
Guaranteed Minimum Accumulation Benefit | Target date retirement - 10 year | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 303,807 | 286,796 |
Net amount at risk | 1,516 | 3,157 |
Weighted age (years) | '58 years | '57 years 2 months 12 days |
Guaranteed Minimum Accumulation Benefit | Target date with management levers | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 3,402,746 | 2,467,417 |
Net amount at risk | 6,573 | 5,411 |
Weighted age (years) | '59 years 7 months 6 days | '59 years |
Guaranteed Lifetime Withdrawal Benefit | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 14,860,414 | 11,947,501 |
Net amount at risk | 775,900 | 920,482 |
Guaranteed Lifetime Withdrawal Benefit | No living benefit | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 546,725 | 365,274 |
Net amount at risk | ' | 3,306 |
Weighted age (years) | '68 years 10 months 24 days | '69 years 4 months 24 days |
Guaranteed Lifetime Withdrawal Benefit | Life benefit with optional reset | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 1,145,784 | 1,080,566 |
Net amount at risk | 103,611 | 166,027 |
Weighted age (years) | '66 years 7 months 6 days | '65 years 10 months 24 days |
Guaranteed Lifetime Withdrawal Benefit | Life benefit with automatic reset | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 1,712,815 | 1,596,848 |
Net amount at risk | 61,791 | 112,563 |
Weighted age (years) | '62 years 8 months 12 days | '61 years 10 months 24 days |
Guaranteed Lifetime Withdrawal Benefit | Life benefit with 8% rollup | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 36,826 | 33,956 |
Net amount at risk | 2,348 | 2,955 |
Weighted age (years) | '67 years 7 months 6 days | '66 years 7 months 6 days |
Guaranteed Lifetime Withdrawal Benefit | Life benefit with 10% rollup | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 1,289,866 | 1,214,821 |
Net amount at risk | 152,152 | 172,500 |
Weighted age (years) | '62 years 1 month 6 days | '61 years 3 months 18 days |
Guaranteed Lifetime Withdrawal Benefit | Life benefit with management levers | ' | ' |
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' |
Account value | 10,128,398 | 7,656,036 |
Net amount at risk | $455,998 | $463,131 |
Weighted age (years) | '59 years 8 months 12 days | '59 years 3 months 18 days |
Account_Balances_of_Variable_A
Account Balances of Variable Annuity Which are Invested in Separate Account (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | $30,747,777 | $25,670,675 |
Mutual Funds | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | 29,848,689 | 24,711,492 |
Mutual Funds | Bond Funds | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | 3,832,071 | 4,117,903 |
Mutual Funds | Domestic Equity Funds | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | 15,076,444 | 11,756,004 |
Mutual Funds | International Equity Funds | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | 2,125,261 | 1,812,473 |
Mutual Funds | Specialty | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | 8,814,913 | 7,025,112 |
Money Market Funds | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | 800,839 | 868,706 |
Other Funds | ' | ' |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ' | ' |
Separate account investment | $98,249 | $90,477 |
Summary_of_Liabilities_for_Var
Summary of Liabilities for Variable Contract Guarantees (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Beginning balance | $1,626,001 | $1,998,315 |
Incurred guaranteed benefits | -1,149,858 | -35,601 |
Paid guaranteed benefits | -88,128 | -336,713 |
Ending balance | 388,015 | 1,626,001 |
Guaranteed Minimum Death Benefit | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Beginning balance | 76,041 | 80,537 |
Incurred guaranteed benefits | 4,608 | 14,880 |
Paid guaranteed benefits | -12,712 | -19,376 |
Ending balance | 67,937 | 76,041 |
Guaranteed Minimum Income Benefit | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Beginning balance | 246,392 | 277,775 |
Incurred guaranteed benefits | -75,489 | -25,017 |
Paid guaranteed benefits | -4,570 | -6,366 |
Ending balance | 166,333 | 246,392 |
Guaranteed Minimum Accumulation Benefit | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Beginning balance | 345,703 | 623,016 |
Incurred guaranteed benefits | -166,884 | 33,658 |
Paid guaranteed benefits | -70,846 | -310,971 |
Ending balance | 107,973 | 345,703 |
Guaranteed Lifetime Withdrawal Benefit | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Beginning balance | 957,865 | 1,016,987 |
Incurred guaranteed benefits | -912,093 | -59,122 |
Ending balance | $45,772 | $957,865 |
Mortgage_Notes_Payable_Additio
Mortgage Notes Payable - Additional Information (Detail) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2005 | Dec. 31, 2004 |
Notes Payable [Line Items] | ' | ' | ' | ' | ' |
Mortgage Loans | ' | ' | ' | ' | $80,000 |
Construction loan | ' | ' | ' | 65,000 | ' |
Mortgage and construction notes payable | 99,210 | 105,858 | ' | ' | ' |
Debt instrument, interest rate | 5.52% | ' | ' | ' | ' |
Debt instrument, maturity date | 1-Aug-24 | ' | ' | ' | ' |
Debt instrument, term | '20 years | ' | ' | ' | ' |
Interest expense for loans | $5,649 | $6,007 | $6,346 | ' | ' |
Future_Principal_Payments_Requ
Future Principal Payments Required Under Northwestern Loan (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Scheduled Principal Payments For Borrowings [Line Items] | ' |
2014 | $7,026 |
2015 | 7,424 |
2016 | 7,844 |
2017 | 8,288 |
2018 | 8,758 |
2019 and beyond | 59,870 |
Total | $99,210 |
Activity_in_Accident_and_Healt
Activity in Accident and Health Claim Reserves (Detail) (Accident and health, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accident and health | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Balance at January 1, net of reinsurance recoverables of $221,718, $188,089, and $156,294, respectively | $107,410 | $91,813 | $78,904 |
Adjustment related to the reclassification of reserves from prior years | ' | ' | 417 |
Adjustment primarily related to commutation and assumption reinsurance on blocks of business | -70 | -272 | -216 |
Current year | 54,096 | 42,876 | 32,157 |
Prior years | 5,359 | 8,119 | 5,752 |
Total incurred | 59,455 | 50,995 | 37,909 |
Current year | 3,519 | 3,001 | 2,931 |
Prior years | 35,871 | 32,125 | 22,270 |
Total paid | 39,390 | 35,126 | 25,201 |
Balance at December 31, net of reinsurance recoverables of $259,829, $221,718, and $188,089, respectively | $127,405 | $107,410 | $91,813 |
Activity_in_Accident_and_Healt1
Activity in Accident and Health Claim Reserves (Parenthetical) (Detail) (Accident and health, USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Accident and health | ' | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' |
Reinsurance recoverable | $259,829 | $221,718 | $188,089 | $156,294 |
Reinsurance recoverable | $259,829 | $221,718 | $188,089 | $156,294 |
Reinsurance_Additional_Informa
Reinsurance - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance recoverables and receivables, collateral | $3,441,677 | $3,703,239 |
Reinsurance recoverables and receivables | 4,105,078 | 4,079,593 |
Reinsurance Agreements, during the 1999 acquisition of Life USA Holding, Inc. | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance recoverables and receivables | 2,439,060 | 2,411,817 |
Minimum | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance retained amount per individual | 1,000 | 1,000 |
Maximum | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance retained amount per individual | $5,000 | $5,000 |
Income_Tax_Benefit_Expense_Det
Income Tax (Benefit) Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income tax expense (benefit) attributable to operations: | ' | ' | ' |
Current tax expense (benefit) | $42,854 | $280,018 | ($63,316) |
Deferred tax expense (benefit) | 160,438 | -324,977 | 5,441 |
Total income tax expense (benefit) attributable to net income | 203,292 | -44,959 | -57,875 |
Income tax effect on equity: | ' | ' | ' |
Attributable to unrealized (losses) gains on investments | -661,574 | 192,353 | 489,768 |
Attributable to unrealized (losses) gains on postretirement obligation | -127 | 95 | -19 |
Attributable to unrealized (losses) gains on foreign exchange | -889 | 325 | -291 |
Total income tax effect on equity | ($459,298) | $147,814 | $431,583 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Line Items] | ' | ' | ' |
Statutory income tax rate | 35.00% | ' | ' |
Income taxes paid (recovered) | $74,460 | $287,491 | ($16,601) |
Tax receivable | 167 | 10 | ' |
Interest and penalties expense related to unrecognized tax benefits | 2,571 | 2,223 | 2,573 |
Accrued interest and penalties related to unrecognized tax benefits | 9,952 | 7,381 | ' |
AZOA | ' | ' | ' |
Income Tax Disclosure [Line Items] | ' | ' | ' |
Tax payable | $73,372 | $103,300 | ' |
Reconciliation_of_Income_Tax_E
Reconciliation of Income Tax Expense (Benefit) Computed at Statutory Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components Of Income Tax Expense Benefit [Line Items] | ' | ' | ' |
Income tax expense (benefit) computed at the statutory rate | $260,567 | ($30,570) | ($2,443) |
Dividends-received deductions and tax-exempt interest | -32,037 | -20,015 | -21,415 |
State income tax | -2,049 | 6,559 | 4,128 |
Release AZLPF tax | -5,829 | ' | -39,365 |
Accrual of tax contingency reserve | 2,571 | 2,223 | 2,573 |
Foreign tax, net | -12,209 | -4,551 | -268 |
Corporate-owned life insurance | -12,933 | -6,894 | -790 |
Penalties | 6,376 | 5,377 | ' |
Other | -1,165 | 2,912 | -295 |
Income tax expense (benefit) as reported | $203,292 | ($44,959) | ($57,875) |
Significant_Components_of_Net_
Significant Components of Net Deferred Tax Asset (Liability) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Policy reserves | $1,995,228 | $2,441,364 |
Coinsurance deferred income | 1,935 | 3,906 |
Expense accruals | 143,170 | 141,817 |
Other-than-temporarily impaired assets | 16,468 | 37,186 |
Investment income | 236,478 | 4,270 |
Provision for postretirement benefits | 20,984 | 13,988 |
Other | 781 | 1,651 |
Total deferred tax assets | 2,415,044 | 2,644,182 |
Deferred tax liabilities: | ' | ' |
Deferred acquisition costs | -1,346,290 | -391,805 |
Depreciation and amortization | -47,147 | -41,130 |
Deferred intercompany gain | -3,710 | -4,234 |
Net unrealized gains on investments and foreign exchange | -1,301,256 | -2,992,467 |
Total deferred tax liabilities | -2,698,403 | -3,429,636 |
Net deferred tax liabilities | ($283,359) | ($785,454) |
Reconciliation_of_Unrecognized
Reconciliation of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Contingency [Line Items] | ' | ' |
Beginning balance | $81,012 | $92,337 |
Additions based on tax positions related to the current year | 680 | 193 |
Amounts released related to tax positions taken in prior years | -11,518 | -11,518 |
Ending balance | $70,174 | $81,012 |
RelatedParty_Transactions_Addi
Related-Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 01, 2010 | Sep. 29, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 22, 2010 | Dec. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2006 | Dec. 31, 2004 | Dec. 31, 2003 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Affiliated companies | Affiliated companies | Affiliated companies | Related Party Transactions | Related Party Transactions | Related Party Transactions | Related Party Transactions | Related Party Transactions | Related Party Transactions | Related Party Transactions | Other affiliated entities | Other affiliated entities | Allianz SE | Allianz SE | Allianz SE | Allianz SE | Allianz SE | Allianz SE | Allianz SE | Allianz SE | Affiliates | Affiliates | Affiliates | Affiliates | Affiliates | Affiliates | AZOA | AZOA | AZOA | ||||
Principal Amount | Principal Amount | Property Available for Operating Lease | Property Available for Operating Lease | Property Available for Operating Lease | Office Space Leases | Office Space Leases | Office Space Leases | |||||||||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party transaction, loan balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,191,170 | $28,725 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party transaction, percentage of total invested asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.58% | 0.04% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party transaction, amount of loan agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends paid in cash | 650,000 | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 130,000 | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 650,000 | 150,000 | ' |
Related party transaction, loan balance | 1,191,170 | 28,725 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 28,725 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan payment received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28,725 | 27,293 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual interest rate on loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.18% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest earned | 1,549 | 2,614 | 8,435 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,029 | 2,466 | 2,040 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rental income | 1,462 | 2,943 | 19,662 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,462 | 1,045 | 1,113 | 1,502 | 881 | 865 | ' | ' | ' |
Rent expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29 | 26 | 26 | ' | ' | ' |
Service fee | ' | ' | ' | 40,096 | 35,713 | 35,755 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued service fee | ' | ' | ' | 7,054 | 10,758 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue earned | ' | ' | ' | 7,827 | 5,666 | 6,410 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivables for expenses | ' | ' | ' | -676 | 391 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income recognized | 261,926 | 212,458 | 210,687 | ' | ' | ' | ' | ' | 16,516 | 15,233 | 11,341 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees receivable | 142,028 | 158,588 | ' | ' | ' | ' | ' | ' | 2,780 | 2,684 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
General and administrative expenses | 663,319 | 645,656 | 629,654 | ' | ' | ' | ' | ' | 1,060 | 1,513 | 1,713 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payable to affiliates | ' | ' | ' | ' | ' | ' | ' | ' | 69 | 131 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transferred loan in the form of dividend | 650,000 | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 |
Capital Contribution To Insurance Subsidiary | ' | ' | ' | ' | ' | ' | 250 | 250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Capital Contributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 288,234 | 282,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quota Share Reinsurance Ceded, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurance Recoverables & Receivables | $4,105,078 | $4,079,593 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $233 | $311 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lending capacity under the agreement, Percentage | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Matching percentage of eligible employee pre tax contributions | 80.00% | ' | ' |
Defined contribution plan, employer matching contribution, percent of match | 7.50% | 7.50% | 7.50% |
Defined contribution plan, employers matching contribution, vesting percentage after three years of service | 100.00% | ' | ' |
Defined contribution plan, employers matching contribution, service period | 'P3Y | ' | ' |
Defined contribution plan employers matching contribution | $11,657 | $11,827 | $11,582 |
Severance expense | 753 | 3,571 | 601 |
Other Liabilities, life insurance benefit | 1,054 | 1,034 | ' |
Assets held by trust | 537 | 3,711 | ' |
Restricted Stock And Stock Appreciation Rights | ' | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Stock-based compensation | 8,152 | 5,653 | 1,107 |
Other liabilities, deferred compensation | 15,840 | 8,797 | ' |
Employee Stock | ' | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Other liabilities, deferred compensation | 482 | 426 | 379 |
Aggregate amount of ordinary shares reserved for plan | 250,000 | ' | ' |
Qualified Plan | ' | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Other liabilities, deferred compensation | 14,160 | 9,959 | ' |
Nonqualified Deferred Compensation Plan | ' | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Other liabilities, deferred compensation | $19,822 | $12,798 | ' |
Statutory_Financial_Data_and_D1
Statutory Financial Data and Dividend Restrictions - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Accounting Practices [Line Items] | ' | ' |
Statutory capital and surplus | $4,426,168 | $5,332,410 |
Statutory restrictions on dividend | 'In accordance with Minnesota Statutes, the Company may declare and pay from its surplus cash dividends of not more than the greater of 10% of its beginning-of-the-yearstatutory surplus, or the net gain from operations of the insurer, not including realized gains, for the 12-month period ending the 31st day of the next preceding year. | ' |
Ordinary dividend which can be paid without approval | $442,617 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claim | |||
Commitments and Contingencies [Line Items] | ' | ' | ' |
Number of putative and certified class action proceedings | 4 | ' | ' |
Class action lawsuits, pending | 1 | ' | ' |
Put option exercising period | '120 days | ' | ' |
Purchase price | $7,503 | ' | ' |
Temporary equity, contract terms | 'The exercise period for the put option is the first 120 days of each calendar year commencing on January 1, 2011, and expiring on April 30, 2014. | ' | ' |
Operating lease expenses | 2,760 | 2,569 | 3,065 |
Accumulated Depreciation | 110,880 | 104,281 | ' |
Total expense under the agreement | 978,316 | 859,823 | 963,909 |
Commercial Mortgage Backed Securities | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Capital commitments due within the next year | 364,400 | 215,000 | ' |
Service Agreements | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Service fee | 0.10% | ' | ' |
Additional service fee | 0.15% | ' | ' |
Agreement termination notice period | '90 days | ' | ' |
Termination period on which service fee continues to be paid | '10 years | ' | ' |
Total commitment in the event of termination | 57,952 | ' | ' |
Total expense under the agreement | 5,980 | 5,095 | 4,298 |
Service Agreements | Yearly | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Total commitment in the event of termination | 5,795 | ' | ' |
Furniture and Fixtures | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Cost of furniture and equipment | 2,976 | 2,976 | ' |
Accumulated Depreciation | 1,613 | 868 | ' |
Depreciation | 745 | 868 | 0 |
Private placement | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Capital commitments due within the next year | $84,000 | $0 | ' |
Future_Minimum_Lease_Payments_
Future Minimum Lease Payments Required under Operating Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | ' |
2014 | $1,333 |
2015 | 924 |
2016 | 684 |
2017 | 565 |
2018 | 580 |
2019 and beyond | 1,116 |
Total | $5,202 |
Future_Minimum_Lease_Payments_1
Future Minimum Lease Payments and Present Value of the Net Minimum Lease Payments (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items] | ' |
2014 | $939 |
2015 | 783 |
2016 | ' |
2017 | ' |
2018 | ' |
2019 and beyond | ' |
Total | $1,722 |
Capital_Stock_Detail
Capital Stock (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Capital Unit [Line Items] | ' | ' |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 20,000,001 | 20,000,001 |
Common stock, shares outstanding | 20,000,001 | 20,000,001 |
Common stock par value, per share | $1 | $1 |
Preferred Class A | ' | ' |
Capital Unit [Line Items] | ' | ' |
Preferred stock, shares authorized | 200,000,000 | ' |
Preferred stock, shares issued | 18,903,484 | ' |
Preferred stock, shares outstanding | 18,903,484 | ' |
Preferred stock, redemption rights description | 'Designated by Board for each series issued | ' |
Common stock par value, per share | $1 | ' |
Voluntary or involuntary liquidation rights | 'Designated by Board for each series issued | ' |
Class A, Series A preferred stock | ' | ' |
Capital Unit [Line Items] | ' | ' |
Preferred stock, shares authorized | 8,909,195 | 8,909,195 |
Preferred stock, shares issued | 8,909,195 | 8,909,195 |
Preferred stock, shares outstanding | 8,909,195 | 8,909,195 |
Preferred stock, redemption rights description | '$35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | ' |
Common stock par value, per share | $1 | $1 |
Preferred stock, redemption price per share | $35.02 | ' |
Percentage of redemption right | 6.00% | ' |
Voluntary or involuntary liquidation rights | '$35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | ' |
Voluntary or involuntary liquidation rights per share | $35.02 | ' |
Percentage of Voluntary or involuntary liquidation rights | 6.00% | ' |
Class A, Series B preferred stock | ' | ' |
Capital Unit [Line Items] | ' | ' |
Voluntary or involuntary liquidation rights | '$35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | ' |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 9,994,289 | 9,994,289 |
Preferred stock, shares outstanding | 9,994,289 | 9,994,289 |
Preferred stock, redemption rights description | '$35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | ' |
Common stock par value, per share | $1 | $1 |
Preferred stock, redemption price per share | $35.02 | ' |
Percentage of redemption right | 6.00% | ' |
Voluntary or involuntary liquidation rights per share | $35.02 | ' |
Preferred Class B | ' | ' |
Capital Unit [Line Items] | ' | ' |
Preferred stock, shares authorized | 400,000,000 | ' |
Preferred stock, redemption rights description | 'Designated by Board for each series issued | ' |
Common stock par value, per share | $1 | ' |
Voluntary or involuntary liquidation rights | 'Designated by Board for each series issued | ' |
Capital_Structure_Additional_I
Capital Structure - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Capital Unit [Line Items] | ' |
Voting rights | 'One vote per share |
Preferred Class A | ' |
Capital Unit [Line Items] | ' |
Voting rights | 'One vote per share |
Conversion basis of preferred stock to common stock | 'Each share of Class A preferred stock is convertible into one share of the Company's common stock |
Preferred Class B | ' |
Capital Unit [Line Items] | ' |
Voting rights | 'One vote per share |
Analysis_of_Foreign_Currency_T
Analysis of Foreign Currency Translation, Net of Tax (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cumulative Translation Adjustment Summary [Roll Forward] | ' | ' | ' |
Beginning amount of cumulative translation adjustments | $13,993 | $13,389 | $13,930 |
Aggregate adjustment for the period resulting from translation adjustments | -2,539 | 929 | -832 |
Amount of income tax expense (benefit) for the period related to aggregate adjustment | 889 | -325 | 291 |
Net aggregate translation included in equity | -1,650 | 604 | -541 |
Ending amount of cumulative translation adjustments | $12,343 | $13,993 | $13,389 |
Canadian foreign exchange rate at end of year | 0.9412 | 1.00432 | 0.98208 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Subsidiary | |
Number of Wholly owned subsidiaries owned by Questar segment | 2 |
Unconsolidated_Segment_Results
Unconsolidated Segment Results (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue: | ' | ' | ' |
Net premiums and policy fees | $1,288,373 | $1,049,157 | $926,195 |
Interest and similar income, net | 3,592,117 | 3,632,406 | 3,520,016 |
Change in fair value of assets and liabilities | 921,265 | -157,279 | -205,567 |
Realized investment gains, net | 188,297 | 227,701 | 113,393 |
Fee, commission, and other revenue | 306,779 | 240,706 | 222,185 |
Total revenue (loss) | 6,296,831 | 4,992,691 | 4,576,222 |
Benefits and expenses: | ' | ' | ' |
Net benefits and expenses | 3,704,019 | 2,890,203 | 3,724,792 |
General and administrative and commission | 1,641,635 | 1,505,479 | 1,593,563 |
Change in deferred acquisition costs, net | 206,699 | 684,350 | -735,151 |
Total benefits and expenses | 5,552,353 | 5,080,032 | 4,583,204 |
Pretax (loss) income | 744,478 | -87,341 | -6,982 |
Operating Segments | Annuities | ' | ' | ' |
Revenue: | ' | ' | ' |
Net premiums and policy fees | 1,050,072 | 821,192 | 705,258 |
Interest and similar income, net | 3,464,951 | 3,514,953 | 3,418,279 |
Change in fair value of assets and liabilities | 843,121 | -169,234 | -198,571 |
Realized investment gains, net | 172,940 | 225,246 | 110,814 |
Fee, commission, and other revenue | 239,692 | 189,120 | 149,516 |
Total revenue (loss) | 5,770,776 | 4,581,277 | 4,185,296 |
Benefits and expenses: | ' | ' | ' |
Net benefits and expenses | 3,378,366 | 2,656,502 | 3,535,771 |
General and administrative and commission | 1,408,107 | 1,300,668 | 1,418,280 |
Change in deferred acquisition costs, net | 264,068 | 729,277 | -729,330 |
Total benefits and expenses | 5,050,541 | 4,686,447 | 4,224,721 |
Pretax (loss) income | 720,235 | -105,170 | -39,425 |
Operating Segments | Life | ' | ' | ' |
Revenue: | ' | ' | ' |
Net premiums and policy fees | 104,715 | 93,795 | 84,421 |
Interest and similar income, net | 71,125 | 67,509 | 58,941 |
Change in fair value of assets and liabilities | 77,920 | 12,125 | -6,490 |
Realized investment gains, net | 2,227 | 1,387 | 1,537 |
Fee, commission, and other revenue | 583 | 295 | 55 |
Total revenue (loss) | 256,570 | 175,111 | 138,464 |
Benefits and expenses: | ' | ' | ' |
Net benefits and expenses | 180,923 | 92,872 | 74,599 |
General and administrative and commission | 136,417 | 118,602 | 74,851 |
Change in deferred acquisition costs, net | -71,632 | -58,368 | -22,646 |
Total benefits and expenses | 245,708 | 153,106 | 126,804 |
Pretax (loss) income | 10,862 | 22,005 | 11,660 |
Operating Segments | Questar | ' | ' | ' |
Revenue: | ' | ' | ' |
Interest and similar income, net | -16 | -20 | -39 |
Realized investment gains, net | 8 | ' | ' |
Fee, commission, and other revenue | 93,485 | 72,917 | 69,951 |
Total revenue (loss) | 93,477 | 72,897 | 69,912 |
Benefits and expenses: | ' | ' | ' |
General and administrative and commission | 110,633 | 90,580 | 87,050 |
Total benefits and expenses | 110,633 | 90,580 | 87,050 |
Pretax (loss) income | -17,156 | -17,683 | -17,138 |
Operating Segments | Legacy | ' | ' | ' |
Revenue: | ' | ' | ' |
Net premiums and policy fees | 133,586 | 134,170 | 136,516 |
Interest and similar income, net | 56,057 | 49,964 | 42,835 |
Change in fair value of assets and liabilities | 224 | -170 | -506 |
Realized investment gains, net | 13,122 | 1,068 | 1,042 |
Fee, commission, and other revenue | 6,207 | 7,594 | 8,215 |
Total revenue (loss) | 209,196 | 192,626 | 188,102 |
Benefits and expenses: | ' | ' | ' |
Net benefits and expenses | 144,730 | 140,829 | 114,422 |
General and administrative and commission | 19,666 | 24,849 | 18,934 |
Change in deferred acquisition costs, net | 14,263 | 13,441 | 16,825 |
Total benefits and expenses | 178,659 | 179,119 | 150,181 |
Pretax (loss) income | 30,537 | 13,507 | 37,921 |
Eliminations | ' | ' | ' |
Revenue: | ' | ' | ' |
Fee, commission, and other revenue | -33,188 | -29,220 | -5,552 |
Total revenue (loss) | -33,188 | -29,220 | -5,552 |
Benefits and expenses: | ' | ' | ' |
General and administrative and commission | -33,188 | -29,220 | -5,552 |
Total benefits and expenses | ($33,188) | ($29,220) | ($5,552) |
Components_Of_Accumulated_Othe
Components Of Accumulated Other Comprehensive Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance | $2,232,905 | $1,891,955 | ' |
OCI before reclassifications | -1,159,681 | 491,562 | ' |
Amounts reclassified from AOCI | -70,440 | -150,612 | ' |
Net OCI | -1,230,121 | 340,951 | 925,686 |
Net OCI | ' | 340,950 | ' |
Ending balance | 1,002,784 | 2,232,905 | 1,891,955 |
Net Unrealized Gain On Securities | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance | 2,206,473 | 1,871,918 | ' |
OCI before reclassifications | -1,151,346 | 484,260 | ' |
Amounts reclassified from AOCI | -74,350 | -149,705 | ' |
Net OCI | -1,225,696 | 334,555 | ' |
Ending balance | 980,777 | 2,206,473 | ' |
OTTI Losses In OCI | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance | 11,313 | 3,533 | ' |
OCI before reclassifications | -6,431 | 8,671 | ' |
Amounts reclassified from AOCI | 3,932 | -891 | ' |
Net OCI | -2,499 | 7,780 | ' |
Ending balance | 8,814 | 11,313 | ' |
Net Gain (loss) on Cash Flow Hedging Instruments | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance | 1,463 | 3,226 | ' |
OCI before reclassifications | -443 | -1,763 | ' |
Net OCI | -443 | -1,763 | ' |
Ending balance | 1,020 | 1,463 | ' |
Foreign Currency Translation Adjustments | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance | 13,993 | 13,389 | ' |
OCI before reclassifications | -1,650 | 604 | ' |
Net OCI | -1,650 | 604 | ' |
Ending balance | 12,343 | 13,993 | ' |
Pension And Postretirement Plan Adjustments | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance | -337 | -111 | ' |
OCI before reclassifications | 189 | -210 | ' |
Amounts reclassified from AOCI | -22 | -16 | ' |
Net OCI | 167 | -226 | ' |
Ending balance | ($170) | ($337) | ' |
Reclassifications_From_Accumul
Reclassifications From Accumulated Other Comprehensive Income (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' |
Total amounts reclassified from AOCI | $70,440 | $150,612 |
Realized investment gains, net | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' |
Amount Reclassified from AOCI, Net unrealized gain on securities, available-for-sale-securities | 114,385 | 230,316 |
Amount Reclassified from AOCI, OTTI Losses in OCI, Other than temporary impairments | -6,049 | 1,371 |
Income tax expense (benefit) | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' |
Amount Reclassified from AOCI, Net unrealized gain on securities, available-for-sale-securities, tax | -40,035 | -80,611 |
Amount Reclassified from AOCI, OTTI Losses in OCI, Other than temporary impairments, tax | 2,117 | -480 |
Amount Reclassified from AOCI, Amortization of actuarial gains (losses) | -12 | -9 |
Net income (loss) | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' |
Amount Reclassified from AOCI, Net unrealized gain on securities, available-for-sale-securities, net | 74,350 | 149,705 |
Amount Reclassified from AOCI, OTTI Losses in OCI, Other than temporary impairments, net | -3,932 | 891 |
Amount Reclassified from AOCI, pension and other postretirement plan adjustments, net | 22 | 16 |
Total amounts reclassified from AOCI | 70,440 | 150,612 |
General and administrative expenses | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' |
Amount Reclassified from AOCI, pension and other postretirement plan adjustments | $34 | $25 |
Schedule_I_Investments_Other_T
Schedule I Investments Other Than Investments in Related Parties (Detail) (USD $) | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | $71,744,593 | [1] |
Amount at which shown in the consolidated balance sheets | 75,459,751 | |
Fixed-maturity securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 62,927,160 | [1] |
Fair Value | 66,623,238 | |
Amount at which shown in the consolidated balance sheets | 66,624,474 | |
Fixed-maturity securities | Available-for-sale Securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 62,706,408 | [1] |
Fair Value | 66,403,722 | |
Amount at which shown in the consolidated balance sheets | 66,403,722 | |
Fixed-maturity securities | Available-for-sale Securities | US Government and Government Agencies and Authorities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 1,103,739 | [1] |
Fair Value | 1,158,859 | |
Amount at which shown in the consolidated balance sheets | 1,158,859 | |
Fixed-maturity securities | Available-for-sale Securities | Non Government backed Securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 480,981 | [1] |
Fair Value | 511,829 | |
Amount at which shown in the consolidated balance sheets | 511,829 | |
Fixed-maturity securities | Available-for-sale Securities | States and political subdivisions | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 4,916,086 | [1] |
Fair Value | 4,958,360 | |
Amount at which shown in the consolidated balance sheets | 4,958,360 | |
Fixed-maturity securities | Available-for-sale Securities | Foreign Government | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 341,223 | [1] |
Fair Value | 365,234 | |
Amount at which shown in the consolidated balance sheets | 365,234 | |
Fixed-maturity securities | Available-for-sale Securities | Public Utility, Bonds | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 4,692,512 | [1] |
Fair Value | 5,136,210 | |
Amount at which shown in the consolidated balance sheets | 5,136,210 | |
Fixed-maturity securities | Available-for-sale Securities | Corporate securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 39,446,124 | [1] |
Fair Value | 41,676,852 | |
Amount at which shown in the consolidated balance sheets | 41,676,852 | |
Fixed-maturity securities | Available-for-sale Securities | Mortgage-backed securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 11,668,499 | [1] |
Fair Value | 12,525,293 | |
Amount at which shown in the consolidated balance sheets | 12,525,293 | |
Fixed-maturity securities | Available-for-sale Securities | Collateralized mortgage obligations | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 12,557 | [1] |
Fair Value | 14,212 | |
Amount at which shown in the consolidated balance sheets | 14,212 | |
Fixed-maturity securities | Available-for-sale Securities | Collateralized debt obligations | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 44,687 | [1] |
Fair Value | 56,873 | |
Amount at which shown in the consolidated balance sheets | 56,873 | |
Fixed-maturity securities | Held-to-maturity Securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 220,752 | [1] |
Fair Value | 219,516 | |
Amount at which shown in the consolidated balance sheets | 220,752 | |
Fixed-maturity securities | Held-to-maturity Securities | Corporate securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 110 | [1] |
Fair Value | 129 | |
Amount at which shown in the consolidated balance sheets | 110 | |
Fixed-maturity securities | Held-to-maturity Securities | Collateralized debt obligations | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 220,642 | [1] |
Fair Value | 219,387 | |
Amount at which shown in the consolidated balance sheets | 220,642 | |
Equity securities | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 239,090 | [1] |
Fair Value | 256,934 | |
Amount at which shown in the consolidated balance sheets | 256,934 | |
Equity securities | Available-for-sale Securities | Common stocks, Industrial and miscellaneous | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 29,112 | [1] |
Fair Value | 29,112 | |
Amount at which shown in the consolidated balance sheets | 29,112 | |
Equity securities | Trading Securities [Member] | Common stocks, Industrial and miscellaneous | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 209,978 | [1] |
Fair Value | 227,822 | |
Amount at which shown in the consolidated balance sheets | 227,822 | |
Other Investments | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 8,578,343 | [1] |
Amount at which shown in the consolidated balance sheets | 8,578,343 | |
Other Investments | Mortgage Loans on Real Estate | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 6,134,525 | [1] |
Amount at which shown in the consolidated balance sheets | 6,134,525 | |
Other Investments | Short-term Investments | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 7,547 | [1] |
Amount at which shown in the consolidated balance sheets | 7,547 | |
Other Investments | Derivative | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 831,707 | [1] |
Amount at which shown in the consolidated balance sheets | 831,707 | |
Other Investments | Loans Related to Affiliated Companies and Other Companies | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 1,191,170 | [1] |
Amount at which shown in the consolidated balance sheets | 1,191,170 | |
Other Investments | Policy loans | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 158,217 | [1] |
Amount at which shown in the consolidated balance sheets | 158,217 | |
Other Investments | Acquired Loans | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 205,131 | [1] |
Amount at which shown in the consolidated balance sheets | 205,131 | |
Other Investments | Other invested assets | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | |
Cost | 50,046 | [1] |
Amount at which shown in the consolidated balance sheets | $50,046 | |
[1] | Original cost of equity securities and, as to fixed-maturities, original cost reduced by repayments and adjusted for amortization of premiums, accrual discounts, or impairments. |
Schedule_II_Supplementary_Insu
Schedule II Supplementary Insurance Information (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | ' |
Deferred acquisition costs | $4,820,215 | $2,603,307 | $4,858,136 | ' |
Deferred sales inducements | 1,076,530 | 673,944 | 1,167,736 | 1,161,568 |
Account balances and future policy benefit reserves | 78,125,212 | 75,210,540 | 74,997,906 | ' |
Unearned premiums | 135,639 | 88,883 | 86,027 | ' |
Policy and contract claims | 416,109 | 358,732 | 294,009 | ' |
Net premium and policy fees | 1,288,373 | 1,049,157 | 926,195 | ' |
Interest and similar income, net | 3,592,117 | 3,632,406 | 3,520,016 | ' |
Net benefits | 3,631,477 | 2,805,842 | 3,969,430 | ' |
Net change in deferred sales inducements | 72,542 | 84,361 | -244,638 | ' |
Net change in policy acquisition costs | 206,699 | 684,350 | -735,151 | ' |
Other operating expenses | 1,641,635 | 1,505,479 | 1,593,563 | ' |
Annuities | ' | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | ' |
Deferred acquisition costs | 4,415,572 | 2,289,260 | 4,559,208 | ' |
Deferred sales inducements | 1,072,742 | 670,988 | 1,165,125 | ' |
Account balances and future policy benefit reserves | 72,954,916 | 70,534,455 | 70,651,879 | ' |
Unearned premiums | 24,392 | 294 | 872 | ' |
Policy and contract claims | ' | ' | 682 | ' |
Net premium and policy fees | 1,050,072 | 821,192 | 705,258 | ' |
Interest and similar income, net | 3,464,952 | 3,514,953 | 3,418,279 | ' |
Net benefits | 3,304,991 | 2,571,623 | 3,778,871 | ' |
Net change in deferred sales inducements | 73,375 | 84,879 | -243,100 | ' |
Net change in policy acquisition costs | 264,068 | 729,277 | -729,330 | ' |
Other operating expenses | 1,374,919 | 1,278,880 | 1,418,231 | ' |
Life | ' | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | ' |
Deferred acquisition costs | 345,008 | 240,192 | 211,633 | ' |
Deferred sales inducements | 3,788 | 2,956 | 2,611 | ' |
Account balances and future policy benefit reserves | 1,843,616 | 1,493,372 | 1,289,507 | ' |
Unearned premiums | 57,647 | 32,327 | 27,569 | ' |
Policy and contract claims | 3,220 | 3,913 | 3,886 | ' |
Net premium and policy fees | 104,715 | 93,795 | 84,421 | ' |
Interest and similar income, net | 71,125 | 67,509 | 58,941 | ' |
Net benefits | 181,756 | 93,390 | 76,137 | ' |
Net change in deferred sales inducements | -833 | -518 | -1,538 | ' |
Net change in policy acquisition costs | -71,632 | -58,368 | -22,646 | ' |
Other operating expenses | 136,417 | 111,170 | 69,361 | ' |
Questar | ' | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | ' |
Interest and similar income, net | -16 | -20 | -39 | ' |
Other operating expenses | 110,633 | 90,580 | 87,037 | ' |
Legacy | ' | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | ' |
Deferred acquisition costs | 59,635 | 73,855 | 87,295 | ' |
Account balances and future policy benefit reserves | 3,326,680 | 3,182,713 | 3,056,520 | ' |
Unearned premiums | 53,600 | 56,262 | 57,586 | ' |
Policy and contract claims | 412,889 | 354,819 | 289,441 | ' |
Net premium and policy fees | 133,586 | 134,170 | 136,516 | ' |
Interest and similar income, net | 56,056 | 49,964 | 42,835 | ' |
Net benefits | 144,730 | 140,829 | 114,422 | ' |
Net change in policy acquisition costs | 14,263 | 13,441 | 16,825 | ' |
Other operating expenses | $19,666 | $24,849 | $18,934 | ' |
Scedule_III_Reinsurance_Detail
Scedule III Reinsurance (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Life insurance in force, Direct amount | $26,107,972 | $24,257,515 | $22,944,148 |
Life insurance in force, Ceded to other companies | 17,815,125 | 16,420,252 | 14,794,998 |
Life insurance in force, Assumed from other companies | 80,931 | 91,346 | 94,733 |
Life insurance in force, Net amount | 8,373,778 | 7,928,609 | 8,243,883 |
Life insurance in force, Percentage of amount assumed to net | 1.00% | 1.20% | 1.10% |
Premiums and policy fees, Direct amount | 1,380,404 | 1,147,198 | 1,035,411 |
Premiums and policy fees, Ceded to other companies | 119,767 | 124,184 | 131,990 |
Premiums and policy fees, Assumed from other companies | 27,736 | 26,143 | 22,774 |
Premiums and policy fees, Net amount | 1,288,373 | 1,049,157 | 926,195 |
Premiums and policy fees, Percentage of amount assumed to net | 2.20% | 2.50% | 2.50% |
Life | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Premiums and policy fees, Direct amount | 149,803 | 138,180 | 129,223 |
Premiums and policy fees, Ceded to other companies | 42,857 | 42,900 | 42,649 |
Premiums and policy fees, Assumed from other companies | 606 | 851 | 878 |
Premiums and policy fees, Net amount | 107,552 | 96,131 | 87,452 |
Premiums and policy fees, Percentage of amount assumed to net | 0.60% | 0.90% | 1.00% |
Annuities | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Premiums and policy fees, Direct amount | 1,046,313 | 819,359 | 701,350 |
Premiums and policy fees, Ceded to other companies | -1,966 | 27 | -2,116 |
Premiums and policy fees, Assumed from other companies | -468 | -318 | -442 |
Premiums and policy fees, Net amount | 1,047,811 | 819,014 | 703,024 |
Premiums and policy fees, Percentage of amount assumed to net | ' | ' | -0.10% |
Accident and health | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Premiums and policy fees, Direct amount | 184,288 | 189,659 | 204,838 |
Premiums and policy fees, Ceded to other companies | 78,876 | 81,257 | 91,457 |
Premiums and policy fees, Assumed from other companies | 27,598 | 25,610 | 22,338 |
Premiums and policy fees, Net amount | $133,010 | $134,012 | $135,719 |
Premiums and policy fees, Percentage of amount assumed to net | 20.70% | 19.10% | 16.50% |