Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015 | |
Document Information [Line Items] | |
Document Type | S1 |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2015 |
Entity Registrant Name | ALLSTATE LIFE INSURANCE CO OF NEW YORK |
Entity Central Index Key | 839,759 |
Entity Filer Category | Non-accelerated Filer |
Statements of Operations and Co
Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||
Premiums (net of reinsurance ceded of $12,362, $12,782 and $15,510) | $ 63,218 | $ 59,070 | $ 55,789 |
Contract charges (net of reinsurance ceded of $9,049, $10,971 and $11,591) | 74,948 | 73,446 | 73,138 |
Net investment income | 311,244 | 322,825 | 325,117 |
Realized capital gains and losses: | |||
Total other-than-temporary impairment ("OTTI") losses | (8,131) | 654 | (12,410) |
OTTI losses reclassified to (from) other comprehensive income | 342 | 3,464 | |
Net other-than-temporary impairment losses recognized in earnings | (7,789) | 654 | (8,946) |
Sales and other realized capital gains and losses | 34,907 | 117,640 | 23,857 |
Realized capital gains and losses | 27,118 | 118,294 | 14,911 |
Total Revenues | 476,528 | 573,635 | 468,955 |
Costs and expenses | |||
Contract benefits (net of reinsurance ceded of $23,918, $14,898 and $10,728) | 203,594 | 213,279 | 203,717 |
Interest credited to contractholder funds (net of reinsurance ceded of $4,545, $5,158 and $5,468) | 108,637 | 118,604 | 129,911 |
Amortization of deferred policy acquisition costs | 16,603 | 13,213 | 29,783 |
Operating costs and expenses | 33,357 | 33,588 | 42,788 |
Total costs and expenses | 362,191 | 378,684 | 406,199 |
Income from operations before income tax expense | 114,337 | 194,951 | 62,756 |
Income tax expense | 40,977 | 68,989 | 22,461 |
Net income | 73,360 | 125,962 | 40,295 |
Other comprehensive (loss) income, after-tax | |||
Change in unrealized net capital gains and losses | (12,496) | 18,293 | (91,316) |
Change in unrealized foreign currency translation adjustments | (1,172) | (934) | 853 |
Other comprehensive (loss) income, after-tax | (13,668) | 17,359 | (90,463) |
Comprehensive income (loss) | $ 59,692 | $ 143,321 | $ (50,168) |
Statements of Operations and C3
Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Premiums ceded | $ 12,362 | $ 12,782 | $ 15,510 |
Contract charges, reinsurance ceded | 9,049 | 10,971 | 11,591 |
Contract benefits ceded | 23,918 | 14,898 | 10,728 |
Interest credited ceded | $ 4,545 | $ 5,158 | $ 5,468 |
Statements of Financial Positio
Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments | ||
Fixed income securities, at fair value (amortized cost $4,695,151 and $4,959,541) | $ 4,991,203 | $ 5,491,047 |
Mortgage loans | 614,184 | 493,792 |
Equity securities, at fair value (cost $209,122 and $205,549) | 205,822 | 206,122 |
Limited partnership interests | 281,115 | 212,947 |
Short-term, at fair value (amortized cost $108,277 and $138,371) | 108,279 | 138,372 |
Policy loans | 40,462 | 39,993 |
Other | 983 | 600 |
Total investments | 6,242,048 | 6,582,873 |
Cash | 15,908 | 30,004 |
Deferred policy acquisition costs | 141,189 | 135,282 |
Reinsurance recoverable | 253,669 | 254,264 |
Accrued investment income | 54,333 | 56,120 |
Receivable from affiliates, net | 0 | 1,986 |
Reinsurance receivable from parent | 3,755 | |
Current income taxes receivable | 4,817 | |
Other assets | 105,982 | 107,393 |
Separate Accounts | 317,316 | 383,263 |
Total assets | 7,139,017 | 7,551,185 |
Liabilities | ||
Contractholder funds | 3,185,887 | 3,402,594 |
Reserve for life-contingent contract benefits | 2,095,316 | 2,280,356 |
Current income taxes payable | 0 | 17,976 |
Deferred income taxes | 215,504 | 212,949 |
Other liabilities and accrued expenses | 130,826 | 127,663 |
Payable to affiliates, net | 8,375 | |
Reinsurance payable to parent | 0 | 283 |
Separate Accounts | 317,316 | 383,263 |
Total liabilities | $ 5,953,224 | $ 6,425,084 |
Commitments and Contingent Liabilities (Note 11) | ||
Shareholder's equity | ||
Common stock, $25 par value, 100 thousand shares authorized, issued and outstanding | $ 2,500 | $ 2,500 |
Additional capital paid-in | 140,529 | 140,529 |
Retained income | 886,816 | 813,456 |
Unrealized net capital gains and losses: | ||
Unrealized net capital gains and losses on fixed income securities with OTTI | 522 | 386 |
Other unrealized net capital gains and losses | 189,731 | 345,466 |
Unrealized adjustment to DAC, DSI and insurance reserves | (32,465) | (175,568) |
Total unrealized net capital gains and losses | 157,788 | 170,284 |
Unrealized foreign currency translation adjustments | (1,840) | (668) |
Total accumulated other comprehensive income | 155,948 | 169,616 |
Total shareholder's equity | 1,185,793 | 1,126,101 |
Total liabilities and shareholder's equity | $ 7,139,017 | $ 7,551,185 |
Statements of Financial Positi5
Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fixed income securities, amortized cost | $ 4,695,151 | $ 4,959,541 |
Equity securities, at cost | 209,122 | 205,549 |
Short-term, amortized cost | $ 108,277 | $ 138,371 |
Common stock, par value | $ 25 | $ 25 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 100,000 | 100,000 |
Common stock, shares outstanding | 100,000 | 100,000 |
Statements of Shareholder's Equ
Statements of Shareholder's Equity - USD ($) $ in Thousands | Total | Common Stock | Additional capital paid-in | Retained income | Accumulated other comprehensive income |
Balance at Dec. 31, 2012 | $ 647,199 | $ 242,720 | |||
Change in unrealized net capital gains and losses | $ (91,316) | (91,316) | |||
Net income | 40,295 | 40,295 | |||
Change in unrealized foreign currency translation adjustments | 853 | 853 | |||
Balance at Dec. 31, 2013 | 982,780 | $ 2,500 | $ 140,529 | 687,494 | 152,257 |
Change in unrealized net capital gains and losses | 18,293 | 18,293 | |||
Net income | 125,962 | 125,962 | |||
Change in unrealized foreign currency translation adjustments | (934) | (934) | |||
Balance at Dec. 31, 2014 | 1,126,101 | 2,500 | 140,529 | 813,456 | 169,616 |
Change in unrealized net capital gains and losses | (12,496) | (12,496) | |||
Net income | 73,360 | 73,360 | |||
Change in unrealized foreign currency translation adjustments | (1,172) | (1,172) | |||
Balance at Dec. 31, 2015 | $ 1,185,793 | $ 2,500 | $ 140,529 | $ 886,816 | $ 155,948 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net income | $ 73,360 | $ 125,962 | $ 40,295 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization and other non-cash items | (34,681) | (47,044) | (42,741) |
Realized capital gains and losses | (27,118) | (118,294) | (14,911) |
Interest credited to contractholder funds | 108,637 | 118,604 | 129,911 |
Changes in: | |||
Policy benefits and other insurance reserves | (39,605) | (4,383) | (26,252) |
Deferred policy acquisition costs | 992 | (4,028) | 10,230 |
Income taxes | (12,877) | 47,846 | 10,673 |
Other operating assets and liabilities | (23,938) | (28,380) | (16,790) |
Net cash provided by operating activities | 44,770 | 90,283 | 90,415 |
Proceeds from sales | |||
Fixed income securities | 623,613 | 204,412 | 279,029 |
Equity securities | 1,557 | 233,363 | 86,400 |
Limited partnership interests | 41,037 | 24,574 | 23,009 |
Investment collections | |||
Fixed income securities | 419,502 | 346,951 | 374,968 |
Mortgage loans | 55,218 | 78,480 | 90,226 |
Investment purchases | |||
Fixed income securities | (701,779) | (237,781) | (427,674) |
Equity securities | (8,136) | (212,508) | (88,307) |
Limited partnership interests | (90,929) | (106,731) | (38,794) |
Mortgage loans | (175,218) | (64,754) | (35,475) |
Change in short-term investments, net | 28,915 | (961) | (33,563) |
Change in policy loans and other investments, net | (678) | 413 | 3,133 |
Net cash provided by investing activities | 193,102 | 265,458 | 232,952 |
Cash flows from financing activities | |||
Contractholder fund deposits | 95,437 | 96,851 | 98,601 |
Contractholder fund withdrawals | (347,405) | (424,858) | (436,580) |
Net cash used in financing activities | (251,968) | (328,007) | (337,979) |
Net (decrease) increase in cash | (14,096) | 27,734 | (14,612) |
Cash at beginning of year | 30,004 | 2,270 | 16,882 |
Cash at end of year | $ 15,908 | $ 30,004 | $ 2,270 |
General
General | 12 Months Ended |
Dec. 31, 2015 | |
General | 1. General Basis of presentation The accompanying financial statements include the accounts of Allstate Life Insurance Company of New York (the “Company”), a wholly owned subsidiary of Allstate Life Insurance Company (“ALIC”), which is wholly owned by Allstate Insurance Company (“AIC”). AIC is wholly owned by Allstate Insurance Holdings, LLC, a wholly owned subsidiary of The Allstate Corporation (the “Corporation”). These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). To conform to the current year presentation, certain amounts in the prior year notes to financial statements have been reclassified. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Nature of operations The Company sells traditional, interest-sensitive and variable life insurance and voluntary accident and health insurance products to customers in the State of New York. The Company distributes its products through Allstate exclusive agencies and exclusive financial specialists, and workplace enrolling independent agents. The Company previously offered and continues to have in force fixed annuities such as deferred and immediate annuities. The following table summarizes premiums and contract charges by product. ($ in thousands) 2015 2014 2013 Premiums Traditional life insurance $ 48,532 $ 44,222 $ 38,618 Immediate annuities with life contingencies 5 240 4,349 Accident and health insurance 14,681 14,608 12,822 Total premiums 63,218 59,070 55,789 Contract charges Interest-sensitive life insurance 74,829 73,151 72,740 Fixed annuities 119 295 398 Total contract charges 74,948 73,446 73,138 Total premiums and contract charges $ 138,166 $ 132,516 $ 128,927 The Company has exposure to market risk as a result of its investment portfolio. Market risk is the risk that the Company will incur realized and unrealized net capital losses due to adverse changes in interest rates, credit spreads, equity prices or currency exchange rates. The Company’s primary market risk exposures are to changes in interest rates, credit spreads and equity prices. Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of its interest bearing assets and liabilities. This risk arises from many of the Company’s primary activities, as it invests substantial funds in interest-sensitive assets and issues interest-sensitive liabilities. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key risk-free reference yields. Credit spread risk is the risk that the Company will incur a loss due to adverse changes in credit spreads. This risk arises from many of the Company’s primary activities, as the Company invests substantial funds in spread-sensitive fixed income assets. Equity price risk is the risk that the Company will incur losses due to adverse changes in the general levels of the equity markets. The Company monitors economic and regulatory developments that have the potential to impact its business. Federal and state laws and regulations affect the taxation of insurance companies and life insurance products. Congress and various state legislatures from time to time consider legislation that would reduce or eliminate the favorable policyholder tax treatment currently applicable to life insurance. Congress and various state legislatures also consider proposals to reduce the taxation of certain products or investments that may compete with life insurance. Legislation that increases the taxation on insurance products or reduces the taxation on competing products could lessen the advantage or create a disadvantage for certain of the Company’s products making them less competitive. Such proposals, if adopted, could have an adverse effect on the Company’s financial position or ability to sell such products and could result in the surrender of some existing contracts and policies. In addition, changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Investments Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), asset-backed securities (“ABS”) and redeemable preferred stocks. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes and related deferred policy acquisition costs (“DAC”), deferred sales inducement costs (“DSI”) and reserves for life-contingent contract benefits, is reflected as a component of accumulated other comprehensive income. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Statements of Cash Flows. Mortgage loans are carried at unpaid principal balances, net of unamortized premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. Equity securities primarily include common stocks, exchange traded funds, non-redeemable preferred stocks and real estate investment trust equity investments. Equity securities are designated as available for sale and are carried at fair value. The difference between cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. Investments in limited partnership interests include interests in private equity funds and co-investments, real estate funds, and other funds. Where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, investments in limited partnership interests are accounted for in accordance with the cost method of accounting; all other investments in limited partnership interests are accounted for in accordance with the equity method of accounting (“EMA”). Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value. Policy loans are carried at unpaid principal balances. Other investments consist of derivatives. Derivatives are carried at fair value. Investment income primarily consists of interest, dividends, income from limited partnership interests, and income from certain derivative transactions. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for RMBS, CMBS and ABS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS, CMBS and ABS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of carrying value. Income from cost method limited partnership interests is recognized upon receipt of amounts distributed by the partnerships. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ net income, including unrealized gains and losses, and is generally recognized on a three month delay due to the availability of the related financial statements. Realized capital gains and losses include gains and losses on investment sales, write-downs in value due to other-than-temporary declines in fair value, adjustments to valuation allowances on mortgage loans, and periodic changes in fair value and settlements of certain derivatives including hedge ineffectiveness. Realized capital gains and losses on investment sales are determined on a specific identification basis. Derivative and embedded derivative financial instruments Derivative financial instruments include options, interest rate caps, foreign currency forwards and a reinvestment related risk transfer reinsurance agreement with ALIC that meets the accounting definition of a derivative (see Note 4). Derivatives required to be separated from the host instrument and accounted for as derivative financial instruments (“subject to bifurcation”) are embedded in certain fixed income securities, equity-indexed life contracts and reinsured variable annuity contracts. All derivatives are accounted for on a fair value basis and reported as other investments, other assets, other liabilities and accrued expenses or contractholder funds. The income statement effects of derivatives, including fair value gains and losses and accrued periodic settlements, are reported in realized capital gains and losses or in a single line item together with the results of the associated liability for which risks are being managed. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. The change in fair value of derivatives embedded in certain fixed income securities and subject to bifurcation is reported in realized capital gains and losses. The change in fair value of derivatives embedded in life and annuity product contracts and subject to bifurcation is reported in contract benefits or interest credited to contractholder funds. Cash flows from embedded derivatives subject to bifurcation are reported consistently with the host contracts within the Statements of Cash Flows. Cash flows from other derivatives are reported in cash flows from investing activities within the Statements of Cash Flows. Securities loaned The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions are reinvested in short-term investments. These transactions are short-term in nature, usually 30 days or less. The Company receives cash collateral for securities loaned in an amount generally equal to 102% of the fair value of securities and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to repossess the securities loaned on short notice. Recognition of premium revenues and contract charges, and related benefits and interest credited Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Voluntary accident and health insurance products are expected to remain in force for an extended period and therefore are primarily classified as long-duration contracts. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy. Immediate annuities with life contingencies, including certain structured settlement annuities, provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract. Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life contracts are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index. Interest credited also includes amortization of DSI expenses. DSI is amortized into interest credited using the same method used to amortize DAC. Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. All of the Company’s variable annuity business is ceded through reinsurance agreements and the contract charges and contract benefits related thereto are reported net of reinsurance ceded. Deferred policy acquisition and sales inducement costs Costs that are related directly to the successful acquisition of new or renewal life insurance and investment contracts are deferred and recorded as DAC. These costs are principally agents’ and brokers’ remuneration and certain underwriting expenses. DSI costs, which are deferred and recorded as other assets, relate to sales inducements offered on sales to new customers, principally on fixed annuity and interest-sensitive life contracts. These sales inducements are primarily in the form of additional credits to the customer’s account balance or enhancements to interest credited for a specified period which are in excess of the rates currently being credited to similar contracts without sales inducements. All other acquisition costs are expensed as incurred and included in operating costs and expenses. Amortization of DAC is included in amortization of deferred policy acquisition costs and is described in more detail below. DSI is amortized into income using the same methodology and assumptions as DAC and is included in interest credited to contractholder funds. For traditional life insurance, DAC is amortized over the premium paying period of the related policies in proportion to the estimated revenues on such business. Assumptions used in the amortization of DAC and reserve calculations are established at the time the policy is issued and are generally not revised during the life of the policy. Any deviations from projected business in force resulting from actual policy terminations differing from expected levels and any estimated premium deficiencies may result in a change to the rate of amortization in the period such events occur. Generally, the amortization periods for these policies approximates the estimated lives of the policies. The Company periodically reviews the recoverability of DAC for these policies on an aggregate basis using actual experience. The Company aggregates all traditional life insurance products and immediate annuities with life contingencies in the analysis. If actual experience is significantly adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. For interest-sensitive life insurance and fixed annuities, DAC and DSI are amortized in proportion to the incidence of the total present value of gross profits, which includes both actual historical gross profits (“AGP”) and estimated future gross profits (“EGP”) expected to be earned over the estimated lives of the contracts. The amortization is net of interest on the prior period DAC balance using rates established at the inception of the contracts. Actual amortization periods generally range from 15-30 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life and 5-10 years for fixed annuities. The cumulative DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are persistency, mortality, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. For products whose supporting investments are exposed to capital losses in excess of the Company’s expectations which may cause periodic AGP to become temporarily negative, EGP and AGP utilized in DAC and DSI amortization may be modified to exclude the excess capital losses. The Company performs quarterly reviews of DAC and DSI recoverability for interest-sensitive life and fixed annuity contracts in the aggregate using current assumptions. If a change in the amount of EGP is significant, it could result in the unamortized DAC or DSI not being recoverable, resulting in a charge which is included as a component of amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. The DAC and DSI balances presented include adjustments to reflect the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized capital gains or losses in the respective product investment portfolios were actually realized. The adjustments are recorded net of tax in accumulated other comprehensive income. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in accumulated other comprehensive income recognize the impact on shareholder’s equity consistently with the amounts that would be recognized in the income statement on realized capital gains and losses. Customers of the Company may exchange one insurance policy or investment contract for another offered by the Company, or make modifications to an existing investment or life contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC and DSI related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For interest-sensitive life and investment contracts, the EGP of the replacement contracts are treated as a revision to the EGP of the replaced contracts in the determination of amortization of DAC and DSI. For traditional life insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions. Any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred. Internal replacement transactions determined to result in a substantial change to the replaced contracts are accounted for as an extinguishment of the replaced contracts, and any unamortized DAC and DSI related to the replaced contracts are eliminated with a corresponding charge to amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. Reinsurance In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to effect the disposition of certain blocks of business. The amounts reported as reinsurance recoverables include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities and contractholder funds that have not yet been paid. Reinsurance recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverables. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate. The Company has a reinsurance treaty with ALIC through which it primarily cedes reinvestment related risk on its structured settlement annuities. The terms of the treaty meet the accounting definition of a derivative. Accordingly, the treaty is recorded in the Statement of Financial Position at fair value. Changes in the fair value of the treaty and premiums paid to ALIC are recognized in realized capital gains and losses. Income taxes The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains and losses, differences in tax bases of invested assets, insurance reserves and DAC. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized. Reserve for life-contingent contract benefits The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance, life-contingent immediate annuities and voluntary accident and health insurance products, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. The assumptions are established at the time the policy is issued and are generally not changed during the life of the policy. The Company periodically reviews the adequacy of reserves for these policies on an aggregate basis using actual experience. If actual experience is significantly adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. To the extent that unrealized gains on fixed income securities would result in a premium deficiency if those gains were realized, the related increase in reserves for certain immediate annuities with life contingencies is recorded net of tax as a reduction of unrealized net capital gains included in accumulated other comprehensive income. Contractholder funds Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on reinsured variable annuity contracts. Separate accounts Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows. Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. All of the Company’s variable annuity business was reinsured beginning in 2006. Off-balance sheet financial instruments Commitments to invest, commitments to extend mortgage loans and financial guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Statements of Financial Position (see Note 7 and Note 11). Pending accounting standards Amendments to the Consolidation Analysis In February 2015, the Financial Accounting Standards Board (“FASB”) issued guidance affecting the consolidation evaluation for limited partnerships and similar entities, fees paid to a decision maker or service provider, and variable interests in a variable interest entity held by related parties of the reporting enterprise. The guidance is effective for annual reporting periods beginning after December 15, 2015. The Company is in the process of assessing the impact of adoption which is not expected to be material to the Company’s results of operations or financial position. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued guidance requiring equity investments, including equity securities and limited partnership interests, that are not accounted for under the equity method of accounting or result in consolidation to be measured at fair value with changes in fair value recognized in net income. Equity investments without readily determinable fair values may be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. When a qualitative assessment of equity investments without readily determinable fair values indicates that impairment exists, the carrying value is required to be adjusted to fair value, if lower. The guidance clarifies that an entity should evaluate the realizability of a deferred tax asset related to available-for-sale fixed income securities in combination with the entity’s other deferred tax assets. The guidance also changes certain disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2017, and is to be applied through a cumulative-effect adjustment to beginning retained income as of the beginning of the period of adoption. The new guidance related to equity investments without readily determinable fair values is to be applied prospectively as of the date of adoption. The Company is in the process of evaluating the impact of adoption. The most significant impact is expected to be the change in accounting for equity securities and cost method limited partnership interests. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information | 3. Supplemental Cash Flow Information Non-cash investing activities include $1.6 million, $22 thousand and $5.0 million related to modifications of certain mortgage loans and fixed income securities, as well as mergers completed with equity securities in 2015, 2014 and 2013, respectively, and a $4.7 million obligation to fund a limited partnership investment in 2015. Liabilities for collateral received in conjunction with the Company’s securities lending program were $99.7 million, $101.1 million and $62.6 million as of December 31, 2015, 2014 and 2013, respectively, and are reported in other liabilities and accrued expenses. The accompanying cash flows are included in cash flows from operating activities in the Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Net change in proceeds managed Net change in short-term investments $ 1,427 $ (38,485 ) $ (2,838 ) Operating cash flow provided (used) $ 1,427 $ (38,485 ) $ (2,838 ) Net change in liabilities Liabilities for collateral, beginning of year $ (101,095 ) $ (62,610 ) $ (59,772 ) Liabilities for collateral, end of year (99,668 ) (101,095 ) (62,610 ) Operating cash flow (used) provided $ (1,427 ) $ 38,485 $ 2,838 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | 4. Related Party Transactions Business operations The Company uses services performed by its affiliates, AIC, ALIC and Allstate Investments LLC, and business facilities owned or leased and operated by AIC in conducting its business activities. In addition, the Company shares the services of employees with AIC. The Company reimburses its affiliates for the operating expenses incurred on behalf of the Company. The Company is charged for the cost of these operating expenses based on the level of services provided. Operating expenses, including compensation, retirement and other benefit programs (see Note 14), allocated to the Company were $39.0 million, $44.1 million and $54.2 million in 2015, 2014 and 2013, respectively. A portion of these expenses relate to the acquisition of business, which are deferred and amortized into income as described in Note 2. Structured settlement annuities The Company issued $0.9 million of structured settlement annuities, a type of immediate annuity, in 2013 at prices determined using interest rates in effect at the time of purchase, to fund structured settlements in matters involving AIC. The Company had no amounts related to structured settlement annuities with life contingencies that were included in premium revenue for 2013. Effective March 22, 2013, the Company no longer offers structured settlement annuities. In most cases, these annuities were issued under a “qualified assignment” whereby Allstate Assignment Company and prior to July 1, 2001 Allstate Settlement Corporation (“ASC”), both wholly owned subsidiaries of ALIC, purchased annuities from the Company and assumed AIC’s obligation to make future payments. AIC issued surety bonds to guarantee the payment of structured settlement benefits assumed by ASC (from both AIC and non-related parties) and funded by certain annuity contracts issued by the Company through June 30, 2001. ASC entered into a General Indemnity Agreement pursuant to which it indemnified AIC for any liabilities associated with the surety bonds and gave AIC certain collateral security rights with respect to the annuities and certain other rights in the event of any defaults covered by the surety bonds. ALIC guaranteed the payment of structured settlement benefits on all contracts issued on or after July 1, 2001. Reserves recorded by the Company for annuities that are guaranteed by the surety bonds of AIC were $1.41 billion as of both December 31, 2015 and 2014, respectively. Reserves recorded by the Company for annuities that are guaranteed by ALIC were $624.5 million and $642.4 million as of December 31, 2015 and 2014, respectively. Broker-Dealer agreements The Company receives distribution services from Allstate Financial Services, LLC, an affiliated broker-dealer company, for certain annuity and variable life insurance contracts sold by Allstate exclusive agencies. For these services, the Company incurred commission and other distribution expenses of $233 thousand, $166 thousand and $246 thousand in 2015, 2014 and 2013, respectively. The Company has a service agreement with Allstate Distributors, LLC (“ADLLC”), a broker-dealer company owned by ALIC, whereby ADLLC promotes and markets products sold by the Company. In return for these services, the Company recorded expense of $23 thousand, $7 thousand and $14 thousand in 2015, 2014 and 2013, respectively. Reinsurance The Company has reinsurance agreements with ALIC whereby a portion of the Company’s premiums and policy benefits are ceded to ALIC (see Note 9). The Company has a reinsurance treaty through which it primarily cedes reinvestment related risk on its structured settlement annuities to ALIC. Under the terms of the treaty, the Company pays a premium to ALIC that varies with the aggregate structured settlement annuity statutory reserve balance. In return, ALIC guarantees that the yield on the portion of the Company’s investment portfolio that supports structured settlement annuity liabilities will not fall below contractually determined rates. The Company ceded premium related to structured settlement annuities to ALIC of $3.4 million, $3.4 million and $3.5 million in 2015, 2014 and 2013, respectively. As of December 31, 2015 and 2014, the carrying value of the structured settlement reinsurance treaty was $82.8 million and $84.6 million, respectively, which is recorded in other assets. The premiums ceded and changes in the fair value of the reinsurance treaty are reflected as a component of realized capital gains and losses as the treaty is recorded as a derivative instrument. Income taxes The Company is a party to a federal income tax allocation agreement with the Corporation (see Note 12). Intercompany loan agreement The Company has an intercompany loan agreement with the Corporation. The amount of intercompany loans available to the Company is at the discretion of the Corporation. The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings. The Company had no amounts outstanding under the intercompany loan agreement as of December 31, 2015 or 2014. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments | 5. Investments Fair values The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: ($ in thousands) Amortized Gross unrealized Fair cost Gains Losses value December 31, 2015 U.S. government and agencies $ 142,923 $ 23,774 $ 0 $ 166,697 Municipal 624,806 102,320 (555 ) 726,571 Corporate 3,492,973 203,606 (63,123 ) 3,633,456 Foreign government 191,388 25,363 0 216,751 RMBS 55,036 2,688 (15 ) 57,709 CMBS 86,704 967 (461 ) 87,210 ABS 92,434 704 (518 ) 92,620 Redeemable preferred stock 8,887 1,302 0 10,189 Total fixed income securities $ 4,695,151 $ 360,724 $ (64,672 ) $ 4,991,203 December 31, 2014 U.S. government and agencies $ 229,639 $ 50,328 $ — $ 279,967 Municipal 661,021 122,046 (110 ) 782,957 Corporate 3,424,181 307,887 (19,074 ) 3,712,994 Foreign government 338,199 58,652 (175 ) 396,676 RMBS 94,130 4,217 (22 ) 98,325 CMBS 129,490 5,402 — 134,892 ABS 73,922 1,153 (475 ) 74,600 Redeemable preferred stock 8,959 1,677 — 10,636 Total fixed income securities $ 4,959,541 $ 551,362 $ (19,856 ) $ 5,491,047 Scheduled maturities The scheduled maturities for fixed income securities are as follows as of December 31, 2015: ($ in thousands) Amortized cost Fair value Due in one year or less $ 233,685 $ 236,265 Due after one year through five years 1,393,700 1,471,802 Due after five years through ten years 1,626,246 1,665,102 Due after ten years 1,207,346 1,380,495 RMBS, CMBS and ABS 234,174 237,539 Total $ 4,695,151 $ 4,991,203 Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. RMBS, CMBS and ABS are shown separately because of the potential for prepayment of principal prior to contractual maturity dates. Net investment income Net investment income for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Fixed income securities $ 248,585 $ 276,035 $ 289,571 Mortgage loans 27,582 26,994 31,375 Equity securities 4,905 3,975 4,870 Limited partnership interests 34,177 22,824 8,862 Short-term investments 393 250 210 Policy loans 2,498 2,516 2,543 Other 0 — 65 Investment income, before expense 318,140 332,594 337,496 Investment expense (6,896 ) (9,769 ) (12,379 ) Net investment income $ 311,244 $ 322,825 $ 325,117 Realized capital gains and losses Realized capital gains and losses by asset type for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Fixed income securities $ 42,361 $ 1,759 $ (1,537 ) Mortgage loans 25 1,110 (1,507 ) Equity securities (3,260 ) 62,821 27,944 Limited partnership interests (6,948 ) (239 ) (40 ) Derivatives (4,923 ) 52,724 (9,949 ) Short-term investments (137 ) 119 — Realized capital gains and losses $ 27,118 $ 118,294 $ 14,911 Realized capital gains and losses by transaction type for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Impairment write-downs $ (7,709 ) $ 1,153 $ (3,431 ) Change in intent write-downs (80 ) (499 ) (5,515 ) Net other-than-temporary impairment losses recognized in earnings (7,789 ) 654 (8,946 ) Sales and other 39,830 64,916 33,806 Valuation and settlements of derivative instruments (4,923 ) 52,724 (9,949 ) Realized capital gains and losses $ 27,118 $ 118,294 $ 14,911 Gross gains of $53.2 million, $65.7 million and $36.0 million and gross losses of $9.3 million, $636 thousand and $2.5 million were realized on sales of fixed income and equity securities during 2015, 2014 and 2013, respectively. Other-than-temporary impairment losses by asset type for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Gross Included Net Gross Included in OCI Net Gross Included in OCI Net Fixed income securities: Municipal $ (9 ) $ 0 $ (9 ) $ (499 ) $ — $ (499 ) $ (1,727 ) $ — $ (1,727 ) Corporate (1,317 ) 342 (975 ) — — — — — — RMBS 84 0 84 43 — 43 28 — 28 CMBS (380 ) 0 (380 ) — — — (8,392 ) 3,464 (4,928 ) Total fixed income securities (1,622 ) 342 (1,280 ) (456 ) — (456 ) (10,091 ) 3,464 (6,627 ) Mortgage loans 0 0 0 1,110 — 1,110 (1,832 ) — (1,832 ) Equity securities (3,430 ) 0 (3,430 ) — — — (487 ) — (487 ) Limited partnership interests (3,079 ) 0 (3,079 ) — — — — — — Other-than-temporary impairment losses $ (8,131 ) $ 342 $ (7,789 ) $ 654 $ — $ 654 $ (12,410 ) $ 3,464 $ (8,946 ) The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amount excludes $849 thousand and $633 thousand as of December 31, 2015 and 2014, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date. ($ in thousands) December 31, 2015 December 31, Corporate $ (4 ) $ — RMBS (41 ) (40 ) CMBS (1 ) — Total $ (46 ) $ (40 ) Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of December 31 are as follows: ($ in thousands) 2015 2014 2013 Beginning balance $ (568 ) $ (696 ) $ (1,685 ) Additional credit loss for securities previously other-than-temporarily impaired 84 (71 ) 29 Additional credit loss for securities not previously other-than-temporarily impaired (1,283 ) — (1,628 ) Reduction in credit loss for securities disposed or collected 593 181 960 Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell 0 — 1,628 Change in credit loss due to accretion of increase in cash flows 1 18 — Ending balance $ (1,173 ) $ (568 ) $ (696 ) The Company uses its best estimate of future cash flows expected to be collected from the fixed income security, discounted at the security’s original or current effective rate, as appropriate, to calculate a recovery value and determine whether a credit loss exists. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, foreign exchange rates, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, vintage, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement. If the estimated recovery value is less than the amortized cost of the security, a credit loss exists and an other-than-temporary impairment for the difference between the estimated recovery value and amortized cost is recorded in earnings. The portion of the unrealized loss related to factors other than credit remains classified in accumulated other comprehensive income. If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings. Unrealized net capital gains and losses Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows: ($ in thousands) Fair Gross unrealized Unrealized net value Gains Losses gains (losses) December 31, 2015 Fixed income securities $ 4,991,203 $ 360,724 $ (64,672 ) $ 296,052 Equity securities 205,822 12,028 (15,328 ) (3,300 ) Short-term investments 108,279 2 0 2 EMA limited partnerships (1) 0 0 0 (58 ) Unrealized net capital gains and losses, pre-tax 0 0 0 292,696 Amounts recognized for: Insurance reserves (2) 0 0 0 (44,407 ) DAC and DSI (3) 0 0 0 (5,538 ) Amounts recognized 0 0 0 (49,945 ) Deferred income taxes 0 0 0 (84,963 ) Unrealized net capital gains and losses, after-tax 0 0 0 $ 157,788 (1) Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable. (2) The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. (3) The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. ($ in thousands) Fair Gross unrealized Unrealized net value Gains Losses gains (losses) December 31, 2014 Fixed income securities $ 5,491,047 $ 551,362 $ (19,856 ) $ 531,506 Equity securities 206,122 2,047 (1,474 ) 573 Short-term investments 138,372 2 (1 ) 1 EMA limited partnerships — Unrealized net capital gains and losses, pre-tax 532,080 Amounts recognized for: Insurance reserves (257,252 ) DAC and DSI (12,853 ) Amounts recognized (270,105 ) Deferred income taxes (91,691 ) Unrealized net capital gains and losses, after-tax $ 170,284 Change in unrealized net capital gains and losses The change in unrealized net capital gains and losses for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Fixed income securities $ (235,454 ) $ 154,469 $ (351,008 ) Equity securities (3,873 ) (38,400 ) 7,735 Short-term investments 1 1 (1 ) EMA limited partnerships (58 ) — (127 ) Total (239,384 ) 116,070 (343,401 ) Amounts recognized for: Insurance reserves 212,845 (88,985 ) 192,620 DAC and DSI 7,315 1,058 10,295 Amounts recognized 220,160 (87,927 ) 202,915 Deferred income taxes 6,728 (9,850 ) 49,170 (Decrease) increase in unrealized net capital gains and losses, after-tax $ (12,496 ) $ 18,293 $ (91,316 ) Portfolio monitoring The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income and equity security whose carrying value may be other-than-temporarily impaired. For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, the security’s decline in fair value is considered other than temporary and is recorded in earnings. If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value by discounting the best estimate of future cash flows at the security’s original or current effective rate, as appropriate, and compares this to the amortized cost of the security. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss related to other factors recognized in other comprehensive income. For equity securities, the Company considers various factors, including whether it has the intent and ability to hold the equity security for a period of time sufficient to recover its cost basis. Where the Company lacks the intent and ability to hold to recovery, or believes the recovery period is extended, the equity security’s decline in fair value is considered other than temporary and is recorded in earnings. For fixed income and equity securities managed by third parties, either the Company has contractually retained its decision making authority as it pertains to selling securities that are in an unrealized loss position or it recognizes any unrealized loss at the end of the period through a charge to earnings. The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost (for fixed income securities) or cost (for equity securities) is below established thresholds. The process also includes the monitoring of other impairment indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of other-than-temporary impairment for these fixed income and equity securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value is other than temporary are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the length of time and extent to which the fair value has been less than amortized cost or cost. The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position. ($ in thousands) Less than 12 months 12 months or more Total Number of issues Fair value Unrealized losses Number Fair value Unrealized losses unrealized losses December 31, 2015 Fixed income securities Municipal 3 $ 35,673 $ (555 ) 0 $ 0 $ 0 $ (555 ) Corporate 282 942,145 (49,563 ) 23 91,878 (13,560 ) (63,123 ) RMBS 30 506 (4 ) 3 1,743 (11 ) (15 ) CMBS 5 19,914 (461 ) 0 0 0 (461 ) ABS 7 67,266 (168 ) 1 9,650 (350 ) (518 ) Total fixed income securities 327 1,065,504 (50,751 ) 27 103,271 (13,921 ) (64,672 ) Equity securities 328 96,922 (13,433 ) 23 9,760 (1,895 ) (15,328 ) Total fixed income and equity securities 655 $ 1,162,426 $ (64,184 ) 50 $ 113,031 $ (15,816 ) $ (80,000 ) Investment grade fixed income securities 208 $ 951,843 $ (36,167 ) 10 $ 54,087 $ (3,586 ) $ (39,753 ) Below investment grade fixed income securities 119 113,661 (14,584 ) 17 49,184 (10,335 ) (24,919 ) Total fixed income securities 327 $ 1,065,504 $ (50,751 ) 27 $ 103,271 $ (13,921 ) $ (64,672 ) December 31, 2014 Fixed income securities Municipal — $ — $ — 2 $ 6,293 $ (110 ) $ (110 ) Corporate 126 318,039 (9,488 ) 45 181,573 (9,586 ) (19,074 ) Foreign government — — — 1 9,782 (175 ) (175 ) RMBS 5 358 — 2 2,804 (22 ) (22 ) CMBS 1 113 — — — — — ABS — — — 1 9,525 (475 ) (475 ) Total fixed income securities 132 318,510 (9,488 ) 51 209,977 (10,368 ) (19,856 ) Equity securities 278 83,548 (1,474 ) — — — (1,474 ) Total fixed income and equity securities 410 $ 402,058 $ (10,962 ) 51 $ 209,977 $ (10,368 ) $ (21,330 ) Investment grade fixed income securities 50 $ 215,548 $ (4,173 ) 32 $ 167,719 $ (5,222 ) $ (9,395 ) Below investment grade fixed income securities 82 102,962 (5,315 ) 19 42,258 (5,146 ) (10,461 ) Total fixed income securities 132 $ 318,510 $ (9,488 ) 51 $ 209,977 $ (10,368 ) $ (19,856 ) As of December 31, 2015, $52.6 million of the $80.0 million unrealized losses are related to securities with an unrealized loss position less than 20% of amortized cost or cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired. Of the $52.6 million, $30.3 million are related to unrealized losses on investment grade fixed income securities and $8.4 million are related to equity securities. Of the remaining $27.4 million, $20.3 million have been in an unrealized loss position for less than 12 months. Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P, Fitch, Dominion, Kroll or Realpoint, a rating of aaa, aa, a or bbb from A.M. Best, or a comparable internal rating if an externally provided rating is not available. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third party rating. Unrealized losses on investment grade securities are principally related to increasing risk-free interest rates or widening credit spreads since the time of initial purchase. As of December 31, 2015, the remaining $27.4 million of unrealized losses are related to securities in unrealized loss positions greater than or equal to 20% of amortized cost or cost. Investment grade fixed income securities comprising $9.5 million of these unrealized losses were evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations. Of the $27.4 million, $11.0 million are related to below investment grade fixed income securities and $6.9 million are related to equity securities. Of these amounts, $7.1 million are related to below investment grade fixed income securities that had been in an unrealized loss position greater than or equal to 20% of amortized cost for a period of twelve or more consecutive months as of December 31, 2015. RMBS, CMBS and ABS in an unrealized loss position were evaluated based on actual and projected collateral losses relative to the securities’ positions in the respective securitization trusts, security specific expectations of cash flows, and credit ratings. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread, and (iii) for RMBS and ABS in an unrealized loss position, credit enhancements from reliable bond insurers, where applicable. Municipal bonds in an unrealized loss position were evaluated based on the underlying credit quality of the primary obligor, obligation type and quality of the underlying assets. Unrealized losses on equity securities are primarily related to temporary equity market fluctuations of securities that are expected to recover. As of December 31, 2015, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis. As of December 31, 2015, the Company had the intent and ability to hold equity securities with unrealized losses for a period of time sufficient for them to recover. Limited partnerships As of December 31, 2015 and 2014, the carrying value of equity method limited partnerships totaled $216.6 million and $160.4 million, respectively. The Company recognizes an impairment loss for equity method limited partnerships when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. As of December 31, 2015 and 2014, the carrying value for cost method limited partnerships was $64.5 million and $52.5 million, respectively. To determine if an other-than-temporary impairment has occurred, the Company evaluates whether an impairment indicator has occurred in the period that may have a significant adverse effect on the carrying value of the investment. Impairment indicators may include: significantly reduced valuations of the investments held by the limited partnerships; actual recent cash flows received being significantly less than expected cash flows; reduced valuations based on financing completed at a lower value; completed sale of a material underlying investment at a price significantly lower than expected; or any other adverse events since the last financial statements received that might affect the fair value of the investee’s capital. Additionally, the Company’s portfolio monitoring process includes a quarterly review of all cost method limited partnerships to identify instances where the net asset value is below established thresholds for certain periods of time, as well as investments that are performing below expectations, for further impairment consideration. If a cost method limited partnership is other-than-temporarily impaired, the carrying value is written down to fair value, generally estimated to be equivalent to the reported net asset value. Mortgage loans The Company’s mortgage loans are commercial mortgage loans collateralized by a variety of commercial real estate property types located across the United States and totaled, net of valuation allowance, $614.2 million and $493.8 million as of December 31, 2015 and 2014, respectively. Substantially all of the commercial mortgage loans are non-recourse to the borrower. The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31. (% of mortgage loan portfolio carrying value) 2015 2014 California 21.5 % 24.6 % New Jersey 9.5 10.2 Texas 8.0 4.7 Illinois 7.6 11.2 Arizona 5.6 5.5 Florida 4.7 5.2 The types of properties collateralizing the mortgage loans as of December 31 are as follows: (% of mortgage loan portfolio carrying value) 2015 2014 Apartment complex 28.7 % 19.6 % Warehouse 21.7 24.7 Office buildings 20.0 21.2 Retail 19.2 24.0 Other 10.4 10.5 Total 100.0 % 100.0 % The contractual maturities of the mortgage loan portfolio as of December 31, 2015 are as follows: ($ in thousands) Number of loans Carrying Percent 2016 9 $ 40,775 6.7 % 2017 8 41,298 6.7 2018 9 45,010 7.3 2019 1 10,000 1.6 Thereafter 79 477,101 77.7 Total 106 $ 614,184 100.0 % Mortgage loans are evaluated for impairment on a specific loan basis through a quarterly credit monitoring process and review of key credit quality indicators. Mortgage loans are considered impaired when it is probable that the Company will not collect the contractual principal and interest. Valuation allowances are established for impaired loans to reduce the carrying value to the fair value of the collateral less costs to sell or the present value of the loan’s expected future repayment cash flows discounted at the loan’s original effective interest rate. Impaired mortgage loans may not have a valuation allowance when the fair value of the collateral less costs to sell is higher than the carrying value. Valuation allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell or present value of the loan’s expected future repayment cash flows. Mortgage loans are charged off against their corresponding valuation allowances when there is no reasonable expectation of recovery. The impairment evaluation is non-statistical in respect to the aggregate portfolio but considers facts and circumstances attributable to each loan. It is not considered probable that additional impairment losses, beyond those identified on a specific loan basis, have been incurred as of December 31, 2015. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Cash receipts on mortgage loans on nonaccrual status are generally recorded as a reduction of carrying value. Debt service coverage ratio is considered a key credit quality indicator when mortgage loans are evaluated for impairment. Debt service coverage ratio represents the amount of estimated cash flows from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process. The following table reflects the carrying value of non-impaired fixed rate mortgage loans summarized by debt service coverage ratio distribution as of December 31. There were no variable rate mortgage loans as of December 31, 2015 or 2014. ($ in thousands) 2015 2014 Debt service coverage ratio distribution Below 1.0 $ 14,408 $ 17,081 1.0 - 1.25 35,301 71,801 1.26 - 1.50 194,795 125,877 Above 1.50 369,680 279,033 Total non-impaired mortgage loans $ 614,184 $ 493,792 Mortgage loans with a debt service coverage ratio below 1.0 that are not considered impaired primarily relate to instances where the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered temporary, or there are other risk mitigating circumstances such as additional collateral, escrow balances or borrower guarantees. There were no impaired mortgage loans as of December 31, 2015 or 2014. The average balance of impaired loans was $2.4 million and $7.6 million during 2014 and 2013, respectively. The rollforward of the valuation allowance on impaired mortgage loans for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Beginning balance $ 0 $ 1,832 $ — Net (decrease) increase in valuation allowance 0 (1,110 ) 1,832 Charge offs 0 (722 ) — Ending balance $ 0 $ — $ 1,832 Payments on all mortgage loans were current as of December 31, 2015 and 2014. Municipal bonds The Company maintains a diversified portfolio of municipal bonds. The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio. (% of municipal bond portfolio carrying value) 2015 2014 California 25.9 % 24.2 % Texas 12.0 11.4 Oregon 6.2 5.5 Illinois 5.3 6.2 Concentration of credit risk As of December 31, 2015, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company’s shareholder’s equity. Securities loaned The Company’s business activities include securities lending programs with third parties, mostly large banks. As of December 31, 2015 and 2014, fixed income and equity securities with a carrying value of $96.5 million and $98.0 million, respectively, were on loan under these agreements. Interest income on collateral, net of fees, was $235 thousand in 2015 and zero in 2014 and 2013. Other investment information Included in fixed income securities are below investment grade assets totaling $269.8 million and $300.3 million as of December 31, 2015 and 2014, respectively. As of December 31, 2015, fixed income securities with a carrying value of $2.4 million were on deposit with regulatory authorities as required by law. As of December 31, 2015, there were no fixed income securities that were non-income producing. The Company has $4.7 million of investment-related debt that is reported in other liabilities and accrued expenses as of December 31, 2015 relating to a commitment to fund a limited partnership. The Company has an outstanding line of credit to fund the limited partnership. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value of Assets and Liabilities | 6. Fair Value of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows: Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access. Level 2: Assets and liabilities whose values are based on the following: (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; or (c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the assets and liabilities. The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions. The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy. The first is where specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs. The second situation where the Company classifies securities in Level 3 is where quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources. Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans, limited partnership interests and policy loans. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to remeasurement at fair value after initial recognition and the resulting remeasurement is reflected in the financial statements. In addition, derivatives embedded in fixed income securities are not disclosed in the hierarchy as free-standing derivatives since they are presented with the host contracts in fixed income securities. In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used. Summary of significant valuation techniques for assets and liabilities measured at fair value on a recurring basis Level 1 measurements • Fixed income securities: • Equity securities: • Short-term: • Separate account assets: Level 2 measurements • Fixed income securities: U.S. government and agencies: Municipal: Corporate - public: Corporate - privately placed: Foreign government: RMBS: CMBS: ABS - consumer and other: Redeemable preferred stock: • Equity securities • Short-term: • Other investments Over-the-counter (“OTC”) derivatives, including foreign exchange forward contracts and options, are valued using models that rely on inputs such as currency rates that are observable for substantially the full term of the contract. The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment. Level 3 measurements • Fixed income securities: Municipal: Corporate - public and Corporate - privately placed: ABS - collateralized debt obligations (“CDO”) and ABS - consumer and other: • Equity securities: • Other investments: • Other assets: • Contractholder funds: Assets and liabilities measured at fair value on a non-recurring basis Mortgage loans written-down to fair value in connection with recognizing impairments are valued based on the fair value of the underlying collateral less costs to sell. Limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments are generally valued using net asset values. The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring and non-recurring basis as of December 31, 2015. ($ in thousands) Quoted prices in active markets for identical assets Significant other observable Significant Counterparty Balance as of December 31, Assets Fixed income securities: U.S. government and agencies $ 14,146 $ 152,551 $ 0 0 $ 166,697 Municipal 0 694,285 32,286 0 726,571 Corporate - public 0 2,385,162 10,139 0 2,395,301 Corporate - private placed 0 1,026,297 211,858 0 1,238,155 Foreign government 0 216,751 0 0 216,751 RMBS 0 57,709 0 0 57,709 CMBS 0 87,210 0 0 87,210 ABS - CDO 0 0 9,650 0 9,650 ABS - consumer and other 0 67,266 15,704 0 82,970 Redeemable preferred stock 0 10,189 0 0 10,189 Total fixed income securities 14,146 4,697,420 279,637 0 4,991,203 Equity securities 198,433 454 6,935 0 205,822 Short-term investments 22,749 85,530 0 0 108,279 Other investments: Free-standing derivatives 0 662 329 $ (8 ) 983 Separate account assets 317,316 0 0 0 317,316 Other assets 0 0 82,774 0 82,774 Total recurring basis assets 552,644 4,784,066 369,675 (8 ) 5,706,377 Non-recurring basis (1) 0 0 477 0 477 Total assets at fair value $ 552,644 $ 4,784,066 $ 370,152 $ (8 ) $ 5,706,854 % of total assets at fair value 9.7 % 83.8 % 6.5 % 0 % 100.0 % Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ 0 $ 0 $ (7,900 ) 0 $ (7,900 ) Other liabilities: Free-standing derivatives 0 (148 ) 0 $ 8 (140 ) Total liabilities at fair value $ 0 $ (148 ) $ (7,900 ) $ 8 $ (8,040 ) % of total liabilities at fair value 0 % 1.8 % 98.3 % (0.1 )% 100.0 % (1) Includes $477 thousand of limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments. The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2014. There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2014. ($ in thousands) Quoted prices Significant Significant Balance as of December 31, Assets Fixed income securities: U.S. government and agencies $ 3,642 $ 276,325 $ — $ 279,967 Municipal — 740,535 42,422 782,957 Corporate - public — 2,456,330 16,035 2,472,365 Corporate - private placed — 1,004,099 236,530 1,240,629 Foreign government — 396,676 — 396,676 RMBS — 98,325 — 98,325 CMBS — 134,892 — 134,892 ABS - CDO — — 9,525 9,525 ABS - consumer and other — 49,255 15,820 65,075 Redeemable preferred stock — 10,636 — 10,636 Total fixed income securities 3,642 5,167,073 320,332 5,491,047 Equity securities 200,575 547 5,000 206,122 Short-term investments 2,003 136,369 — 138,372 Other investments: Free-standing derivatives — 46 554 600 Separate account assets 383,263 — — 383,263 Other assets — — 84,561 84,561 Total assets at fair value $ 589,483 $ 5,304,035 $ 410,447 $ 6,303,965 % of total assets at fair value 9.4 % 84.1 % 6.5 % 100.0 % Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (7,391 ) $ (7,391 ) Total liabilities at fair value $ — $ — $ (7,391 ) $ (7,391 ) % of total liabilities at fair value — % — % 100.0 % 100.0 % The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. ($ in thousands) Fair value Valuation technique Unobservable input Range Weighted average December 31, 2015 Other assets – Structured settlement annuity reinsurance agreement $82,774 Stochastic cash flow model Ultimate reinvestment spreads 130.7 - 256.0 162.3 basis points December 31, 2014 Other assets – Structured settlement annuity reinsurance agreement $84,561 Stochastic cash flow model Ultimate reinvestment spreads 130.9 - 198.4 basis points 155.6 basis points If the ultimate reinvestment spreads increased (decreased), it would result in a lower (higher) fair value. As of December 31, 2015 and 2014, Level 3 fair value measurements of fixed income securities total $279.6 million and $320.3 million, respectively, and include $258.7 million and $290.9 million, respectively, of fixed income securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. The Company does not develop the unobservable inputs used in measuring fair value; therefore, these are not included in the table above. However, an increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value. The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2015. ($ in thousands) Total gains (losses) Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 42,422 $ 336 $ (1,309 ) $ 0 $ 0 Corporate - public 16,035 0 (654 ) 0 (4,642 ) Corporate - privately placed 236,530 7,611 (5,368 ) 0 (14,772 ) ABS - CDO 9,525 0 125 0 0 ABS - consumer and other 15,820 0 (116 ) 0 0 Total fixed income securities 320,332 7,947 (7,322 ) 0 (19,414 ) Equity securities 5,000 14 (565 ) 190 0 Free-standing derivatives, net 554 (178 ) 0 0 0 Other assets 84,561 (1,787 ) 0 0 0 Total recurring Level 3 assets $ 410,447 $ 5,996 $ (7,887 ) $ 190 $ (19,414 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (7,391 ) $ (509 ) $ 0 $ 0 $ 0 Total recurring Level 3 liabilities $ (7,391 ) $ (509 ) $ 0 $ 0 $ 0 Purchases Sales Issues Settlements Balance as of 2015 Assets Fixed income securities: Municipal $ 0 $ (7,256 ) $ 0 $ (1,907 ) $ 32,286 Corporate - public 0 0 0 (600 ) 10,139 Corporate - privately placed 0 0 0 (12,143 ) 211,858 ABS - CDO 0 0 0 0 9,650 ABS - consumer and other 0 0 0 0 15,704 Total fixed income securities 0 (7,256 ) 0 (14,650 ) 279,637 Equity securities 2,569 (273 ) 0 0 6,935 Free-standing derivatives, net 62 0 0 (109 ) 329 Other assets 0 0 0 0 82,774 Total recurring Level 3 assets $ 2,631 $ (7,529 ) $ 0 $ (14,759 ) $ 369,675 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ 0 $ 0 $ 0 $ 0 $ (7,900 ) Total recurring Level 3 liabilities $ 0 $ 0 $ 0 $ 0 $ (7,900 ) (1) The effect to net income totals $5.5 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(1.7) million in realized capital gains and losses, $7.7 million in net investment income, $283 thousand in interest credited to contractholder funds and $(792) thousand in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2014. ($ in thousands) Total gains (losses) Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 51,315 $ (360 ) $ 2,874 $ — $ (4,940 ) Corporate 259,428 7,257 (741 ) 40,734 (34,409 ) ABS 24,799 — 546 — — Total fixed income securities 335,542 6,897 2,679 40,734 (39,349 ) Equity securities — — — — — Free-standing derivatives, net 1,076 (533 ) — — — Other assets 27,826 56,735 — — — Total recurring Level 3 assets $ 364,444 $ 63,099 $ 2,679 $ 40,734 $ (39,349 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (9,197 ) $ 1,806 $ — $ — $ — Total recurring Level 3 liabilities $ (9,197 ) $ 1,806 $ — $ — $ — Purchases Sales Issues Settlements Balance as of 2014 Assets Fixed income securities: Municipal $ — $ (4,559 ) $ — $ (1,908 ) $ 42,422 Corporate 1,500 (7,396 ) — (13,808 ) 252,565 ABS — — — — 25,345 Total fixed income securities 1,500 (11,955 ) — (15,716 ) 320,332 Equity securities 5,000 — — — 5,000 Free-standing derivatives, net 73 — — (62 ) 554 Other assets — — — — 84,561 Total recurring Level 3 assets $ 6,573 $ (11,955 ) $ — $ (15,778 ) $ 410,447 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (7,391 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (7,391 ) (1) The effect to net income totals $64.9 million and is reported in the Statements of Operations and Comprehensive Income as follows: $55.9 million in realized capital gains and losses, $7.2 million in net investment income, $(151) thousand in interest credited to contractholder funds and $2.0 million in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013. ($ in thousands) Total gains (losses) Balance as of Net income (1) OCI Transfers Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 67,672 $ (1,960 ) $ 2,614 $ — $ — Corporate 260,351 8,509 (8,214 ) 9,663 (4,160 ) ABS 26,970 — (951 ) — — Total fixed income securities 354,993 6,549 (6,551 ) 9,663 (4,160 ) Free-standing derivatives, net 306 431 — — — Other assets 34,655 (6,829 ) — — — Total recurring Level 3 assets $ 389,954 $ 151 $ (6,551 ) $ 9,663 $ (4,160 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (17,877 ) $ 8,680 $ — $ — $ — Total recurring Level 3 liabilities $ (17,877 ) $ 8,680 $ — $ — $ — Purchases Sales Issues Settlements Balance as of 2013 Assets Fixed income securities: Municipal $ — $ (15,067 ) $ — $ (1,944 ) $ 51,315 Corporate 6,910 (10,615 ) — (3,016 ) 259,428 ABS — — — (1,220 ) 24,799 Total fixed income securities 6,910 (25,682 ) — (6,180 ) 335,542 Free-standing derivatives, net 339 — — — 1,076 Other assets — — — — 27,826 Total recurring Level 3 assets $ 7,249 $ (25,682 ) $ — $ (6,180 ) $ 364,444 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (9,197 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (9,197 ) (1) The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. Transfers between level categorizations may occur due to changes in the availability of market observable inputs, which generally are caused by changes in market conditions such as liquidity, trading volume or bid-ask spreads. Transfers between level categorizations may also occur due to changes in the valuation source. For example, in situations where a fair value quote is not provided by the Company’s independent third-party valuation service provider and as a result the price is stale or has been replaced with a broker quote whose inputs have not been corroborated to be market observable, the security is transferred into Level 3. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred. Therefore, for all transfers into Level 3, all realized and changes in unrealized gains and losses in the quarter of transfer are reflected in the Level 3 rollforward table. There were no transfers between Level 1 and Level 2 during 2015, 2014 or 2013. Transfers into Level 3 during 2015, 2014 and 2013 included situations where a fair value quote was not provided by the Company’s independent third-party valuation service provider and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3. Transfers out of Level 3 during 2015, 2014 and 2013 included situations where a broker quote was used in the prior period and a fair value quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant. The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31. ($ in thousands) 2015 2014 2013 Assets Fixed income securities: Municipal $ 71 $ (395 ) $ (1,458 ) Corporate 7,611 7,099 6,633 Total fixed income securities 7,682 6,704 5,175 Free-standing derivatives, net (178 ) (533 ) 431 Other assets (1,787 ) 56,735 (6,829 ) Total recurring Level 3 assets $ 5,717 $ 62,906 $ (1,223 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (509 ) $ 1,806 $ 8,680 Total recurring Level 3 liabilities $ (509 ) $ 1,806 $ 8,680 The amounts in the table above represent the change in unrealized gains and losses included in net income for the period of time that the asset or liability was determined to be in Level 3. These gains and losses total $5.2 million in 2015 and are reported as follows: $(2.0) million in realized capital gains and losses, $7.7 million in net investment income, $283 thousand in interest credited to contractholder funds and $(792) thousand in contract benefits. These gains and losses total $64.7 million in 2014 and are reported as follows: $55.7 million in realized capital gains and losses, $7.2 million in net investment income, $(151) thousand in interest credited to contractholder funds and $2.0 million in contract benefits. These gains and losses total $7.5 million in 2013 and are reported as follows: $(7.9) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value. Financial assets ($ in thousands) December 31, 2015 December 31, 2014 Carrying Fair value Carrying Fair value Mortgage loans $ 614,814 $ 634,950 $ 493,792 $ 526,433 Cost method limited partnerships 64,490 72,142 52,543 59,330 The fair value of mortgage loans is based on discounted contractual cash flows or, if the loans are impaired due to credit reasons, the fair value of collateral less costs to sell. Risk adjusted discount rates are selected using current rates at which similar loans would be made to borrowers with similar characteristics, using similar types of properties as collateral. The fair value of cost method limited partnerships is determined using reported net asset values. The fair value measurements for mortgage loans and cost method limited partnerships are categorized as Level 3. Financial liabilities ($ in thousands) December 31, 2015 December 31, 2014 Carrying Fair value Carrying Fair value Contractholder funds on investment contracts $ 2,271,861 $ 2,355,015 $ 2,491,461 $ 2,615,231 Liability for collateral 99,668 99,668 101,095 101,095 The fair value of contractholder funds on investment contracts is based on the terms of the underlying contracts incorporating current market-based crediting rates for similar contracts that reflect the Company’s own credit risk. Deferred annuities classified in contractholder funds are valued based on discounted cash flow models that incorporate current market-based margins and reflect the Company’s own credit risk. Immediate annuities without life contingencies are valued based on discounted cash flow models that incorporate current market-based implied interest rates and reflect the Company’s own credit risk. The fair value measurement for contractholder funds on investment contracts is categorized as Level 3. The liability for collateral is valued at carrying value due to its short-term nature. The fair value measurement for liability for collateral is categorized as Level 2. |
Derivative Financial Instrument
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 7. Derivative Financial Instruments and Off-balance sheet Financial Instruments The Company uses derivatives for risk reduction focused on managing the risks with certain assets and liabilities arising from the potential adverse impacts from changes in risk-free interest rates, changes in equity market valuations and foreign currency fluctuations. Asset-liability management is a risk management strategy that is principally employed to balance the respective interest-rate sensitivities of the Company’s assets and liabilities. Depending upon the attributes of the assets acquired and liabilities issued, derivative instruments such as interest rate caps are utilized to change the interest rate characteristics of existing assets and liabilities to ensure the relationship is maintained within specified ranges and to reduce exposure to rising or falling interest rates. Options are used for hedging the equity exposure contained in the Company’s equity indexed life product contracts that offer equity returns to contractholders. Foreign currency forwards are primarily used by the Company to reduce the foreign currency risk associated with holding foreign currency denominated investments. The Company also has a reinsurance treaty that is recorded as a derivative instrument, under which it primarily cedes reinvestment related risk on its structured settlement annuities to ALIC. The Company also has derivatives embedded in non-derivative host contracts that are required to be separated from the host contracts and accounted for at fair value with changes in fair value of embedded derivatives reported in net income. The Company’s primary embedded derivatives are guaranteed minimum accumulation and withdrawal benefits in reinsured variable annuity contracts; equity options in life product contracts, which provide equity returns to contractholders; and conversion options in fixed income securities, which provide the Company with the right to convert the instrument into a predetermined number of shares of common stock. The notional amounts specified in the contracts are used to calculate the exchange of contractual payments under the agreements and are generally not representative of the potential for gain or loss on these agreements. Fair value, which is equal to the carrying value, is the estimated amount that the Company would receive or pay to terminate the derivative contracts at the reporting date. The carrying value amounts for OTC derivatives are further adjusted for the effects, if any, of enforceable master netting agreements and are presented on a net basis, by counterparty agreement, in the Statements of Financial Position. For certain exchange traded derivatives, margin deposits are required as well as daily cash settlements of margin accounts. As of December 31, 2015, the Company pledged $60 thousand of cash in the form of margin deposits. Non-hedge accounting is generally used for “portfolio” level hedging strategies where the terms of the individual hedged items do not meet the strict homogeneity requirements to permit the application of hedge accounting. For non-hedge derivatives, net income includes changes in fair value and accrued periodic settlements, when applicable. With the exception of non-hedge embedded derivatives, all of the Company’s derivatives are evaluated for their ongoing effectiveness as either accounting hedge or non-hedge derivative financial instruments on at least a quarterly basis. The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2015. None of these derivatives are designated as accounting hedging instruments. ($ in thousands, except number of contracts) Volume (1) Balance sheet location Notional Number Fair value, net Gross Gross Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 22,100 n/a $ 329 $ 329 $ 0 Equity and index contracts Options Other investments 0 77 592 592 0 Foreign currency contracts Foreign currency forwards Other investments 5,130 n/a 62 70 (8 ) Other contracts Structured settlement annuity reinsurance agreement Other assets 0 n/a 82,774 82,774 0 Total asset derivatives $ 27,230 77 $ 83,757 $ 83,765 $ (8 ) Liability derivatives Equity and index contracts Options Other liabilities & 0 77 (140 ) 0 (140 ) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds $ 87,221 n/a $ (6,769 ) $ 0 $ (6,769 ) Guaranteed withdrawal benefits Contractholder funds 20,774 n/a (668 ) 0 (668 ) Equity-indexed options in life product contracts Contractholder funds 17,379 n/a (463 ) 0 (463 ) Total liability derivatives 125,374 77 (8,040 ) $ 0 $ (8,040 ) Total derivatives $ 152,604 154 $ 75,717 (1) Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2014. None of these derivatives are designated as accounting hedging instruments. ($ in thousands) Balance sheet location Volume- notional Fair value, net Gross Gross Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 28,600 $ 554 $ 554 $ — Foreign currency contracts Foreign currency forwards Other investments 7,001 46 46 — Embedded derivative financial instruments Conversion options Fixed income securities 42 — — — Other contracts Structured settlement annuity reinsurance agreement Other assets — 84,561 84,561 — Total asset derivatives $ 35,643 $ 85,161 $ 85,161 $ — Liability derivatives Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds $ 115,611 $ (5,966 ) $ — $ (5,966 ) Guaranteed withdrawal benefits Contractholder funds 25,955 (679 ) — (679 ) Equity-indexed options in life product contracts Contractholder funds 13,325 (746 ) — (746 ) Total liability derivatives 154,891 (7,391 ) $ — $ (7,391 ) Total derivatives $ 190,534 $ 77,770 The following table provides gross and net amounts for the Company’s OTC derivatives, all of which are subject to enforceable master netting agreements. There were no offset amounts required to net the carrying values as of December 31, 2014. ($ in thousands) Offsets Gross Counter- Cash Net Securities Net December 31, 2015 Asset derivatives $ 399 $ (8 ) $ 0 $ 391 $ 0 $ 391 Liability derivatives (8 ) 8 0 0 0 0 The following tables present gains and losses from valuation and settlements reported on derivatives not designated as accounting hedging instruments in the Statements of Operations and Comprehensive Income. ($ in thousands) Realized Contract Interest credited to Total gain (loss) 2015 Interest rate contracts $ (178 ) $ 0 $ 0 $ (178 ) Equity and index contracts 0 0 (155 ) (155 ) Foreign currency contracts 427 0 0 427 Embedded derivative financial instruments 0 (792 ) 283 (509 ) Other contracts - structured settlement annuity reinsurance agreement (5,172 ) 0 0 (5,172 ) Total $ (4,923 ) $ (792 ) $ 128 $ (5,587 ) 2014 Interest rate contracts $ (533 ) $ — $ — $ (533 ) Foreign currency contracts (48 ) — — (48 ) Embedded derivative financial instruments 0 1,957 (151 ) 1,806 Other contracts - structured settlement annuity reinsurance agreement 53,305 — — 53,305 Total $ 52,724 $ 1,957 $ (151 ) $ 54,530 2013 Interest rate contracts $ 431 $ — $ — $ 431 Embedded derivative financial instruments (83 ) 8,977 (297 ) 8,597 Other contracts - structured settlement annuity reinsurance agreement (10,297 ) — — (10,297 ) Total $ (9,949 ) $ 8,977 $ (297 ) $ (1,269 ) The Company manages its exposure to credit risk by utilizing highly rated counterparties, establishing risk control limits, executing legally enforceable master netting agreements (“MNAs”) and obtaining collateral where appropriate. The Company uses MNAs for OTC derivative transactions that permit either party to net payments due for transactions and collateral is either pledged or obtained when certain predetermined exposure limits are exceeded. As of December 31, 2015, the Company did not have any collateral pledged to or from counterparties. The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance. Other derivatives, including option contracts, are traded on organized exchanges which require margin deposits and guarantee the execution of trades, thereby mitigating any potential credit risk. Counterparty credit exposure represents the Company’s potential loss if all of the counterparties concurrently fail to perform under the contractual terms of the contracts and all collateral, if any, becomes worthless. This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements. The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. ($ in thousands) 2015 2014 Rating (1) Number of counter- Notional Amount (2) Credit exposure (2) Exposure, net of collateral (2) Number of counter- Notional Amount (2) Credit exposure (2) Exposure, net of collateral (2) A+ 1 $ 11,800 $ 197 $ 197 1 $ 15,200 $ 310 $ 310 A 3 9,765 125 125 2 4,500 110 110 BBB+ 2 5,665 69 69 1 10,901 158 158 BBB 0 0 0 0 1 5,000 22 22 Total 6 $ 27,230 $ 391 $ 391 5 $ 35,601 $ 600 $ 600 (1) Rating is the lower of S&P or Moody’s ratings. (2) Only OTC derivatives with a net positive fair value are included for each counterparty. Market risk is the risk that the Company will incur losses due to adverse changes in market rates and prices. Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions. To limit this risk, the Company’s senior management has established risk control limits. In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions. Certain of the Company’s derivative instruments contain credit-risk-contingent termination events, cross-default provisions and credit support annex agreements. Credit-risk-contingent termination events allow the counterparties to terminate the derivative agreement or a specific trade on certain dates if the Company’s financial strength credit ratings by Moody’s or S&P fall below a certain level. Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative agreement if the Company defaults by pre-determined threshold amounts on certain debt instruments. Credit-risk-contingent credit support annex agreements specify the amount of collateral the Company must post to counterparties based on the Company’s financial strength credit ratings by Moody’s or S&P, or in the event the Company is no longer rated by either Moody’s or S&P. The Company had no derivative instruments with termination, cross-default or collateral credit-risk-contingent features that were in a liability position as of December 31, 2015 or 2014. Off-balance sheet financial instruments The contractual amounts of off-balance-sheet financial instruments relating to commitments to invest in limited partnership interests totaled $193.1 million and $190.7 million as of December 31, 2015 and 2014, respectively. The contractual amounts of off-balance-sheet financial instruments relating to commitments to extend mortgage loans totaled $9.0 million as of December 31, 2014. The contractual amounts represent the amount at risk if the contract is fully drawn upon, the counterparty defaults and the value of any underlying security becomes worthless. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk. Commitments to invest in limited partnership interests represent agreements to acquire new or additional participation in certain limited partnership investments. The Company enters into these agreements in the normal course of business. Because the investments in limited partnerships are not actively traded, it is not practical to estimate the fair value of these commitments. Commitments to extend mortgage loans are agreements to lend to a borrower provided there is no violation of any condition established in the contract. The Company enters into these agreements to commit to future loan fundings at a predetermined interest rate. Commitments generally have fixed expiration dates or other termination clauses. |
Reserve for Life-Contingent Con
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 12 Months Ended |
Dec. 31, 2015 | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 8. Reserve for Life-Contingent Contract Benefits and Contractholder Funds As of December 31, the reserve for life-contingent contract benefits consists of the following: ($ in thousands) 2015 2014 Immediate fixed annuities: Structured settlement annuities $ 1,807,651 $ 2,010,807 Other immediate fixed annuities 59,389 54,834 Traditional life insurance 215,216 201,661 Accident and health insurance 11,207 11,209 Other 1,853 1,845 Total reserve for life-contingent contract benefits $ 2,095,316 $ 2,280,356 The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits. Product Mortality Interest rate Estimation method Structured settlement annuities U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy Interest rate assumptions range from 2.9% to 9.0% Present value of contractually specified future benefits Other immediate fixed annuities 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table Interest rate assumptions range from 0% to 11.5% Present value of expected future benefits based on historical experience Traditional life insurance Actual company experience plus loading Interest rate assumptions range from 3.0% to 8.0% Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims Accident and health insurance Actual company experience plus loading Interest rate assumptions range from 3.5% to 6.0% Unearned premium; additional contract reserves for mortality risk and unpaid claims Other: Variable annuity guaranteed minimum death benefits (1) Annuity 2012 mortality table with internal modifications Interest rate assumptions range from 2.1% to 5.8% Projected benefit ratio applied to cumulative assessments (1) In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”). To the extent that unrealized gains on fixed income securities would result in a premium deficiency had those gains actually been realized, a premium deficiency reserve is recorded for certain immediate annuities with life contingencies. A liability of $44.4 million and $257.3 million is included in the reserve for life-contingent contract benefits with respect to this deficiency as of December 31, 2015 and 2014, respectively. The offset to this liability is recorded as a reduction of the unrealized net capital gains included in accumulated other comprehensive income. As of December 31, contractholder funds consist of the following: ($ in thousands) 2015 2014 Interest-sensitive life insurance $ 724,317 $ 718,126 Investment contracts: Fixed annuities 2,434,757 2,660,522 Other investment contracts 26,813 23,946 Total contractholder funds $ 3,185,887 $ 3,402,594 The following table highlights the key contract provisions relating to contractholder funds: Product Interest rate Withdrawal/surrender charges Interest-sensitive life insurance Interest rates credited range from 0% to 9.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.7% to 5.1% for all other products Either a percentage of account balance or dollar amount grading off generally over 20 years Fixed annuities Interest rates credited range from 0% to 9.0% for immediate annuities and 1.0% to 5.3% for other fixed annuities Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 12.5% of fixed annuities are subject to market value adjustment for discretionary withdrawals Other investment contracts: (1) Interest rates used in establishing reserves range from 1.7% to 10.3% Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract (1) In 2006, the Company disposed its variable annuity business through a reinsurance agreement with Prudential. Contractholder funds activity for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Balance, beginning of year $ 3,402,594 $ 3,670,557 $ 3,958,440 Deposits 103,041 105,626 109,282 Interest credited 108,730 118,957 129,687 Benefits (137,834 ) (145,889 ) (152,822 ) Surrenders and partial withdrawals (211,171 ) (279,835 ) (284,755 ) Contract charges (72,575 ) (71,332 ) (70,856 ) Net transfers from separate accounts 252 143 153 Other adjustments (7,150 ) 4,367 (18,572 ) Balance, end of year $ 3,185,887 $ 3,402,594 $ 3,670,557 The Company offered various guarantees to variable annuity contractholders. Liabilities for variable contract guarantees related to death benefits are included in the reserve for life-contingent contract benefits and the liabilities related to the income, withdrawal and accumulation benefits are included in contractholder funds. All liabilities for variable contract guarantees are reported on a gross basis on the balance sheet with a corresponding reinsurance recoverable asset. Absent any contract provision wherein the Company guarantees either a minimum return or account value upon death, a specified contract anniversary date, partial withdrawal or annuitization, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. The account balances of variable annuities contracts’ separate accounts with guarantees included $264.5 million and $322.1 million of equity, fixed income and balanced mutual funds and $36.8 million and $50.6 million of money market mutual funds as of December 31, 2015 and 2014, respectively. The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. ($ in millions) December 31, 2015 2014 In the event of death Separate account value $ 301.3 $ 372.7 Net amount at risk (1) $ 15.3 $ 10.1 Average attained age of contractholders 66 years 65 years At annuitization (includes income benefit guarantees) Separate account value $ 22.9 $ 26.2 Net amount at risk (2) $ 2.5 $ 1.9 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 19.6 $ 24.9 Net amount at risk (3) $ 0.3 $ 0.2 Accumulation at specified dates Separate account value $ 83.4 $ 112.8 Net amount at risk (4) $ 2.4 $ 1.7 Weighted average waiting period until guarantee date 3 years 3 years (1) Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. (2) Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. (3) Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. (4) Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. The liability for death and income benefit guarantees is equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest less contract excess guarantee benefit payments. The benefit ratio is calculated as the estimated present value of all expected contract excess guarantee benefits divided by the present value of all expected contract charges. The establishment of reserves for these guarantees requires the projection of future fund values, mortality, persistency and customer benefit utilization rates. These assumptions are periodically reviewed and updated. For guarantees related to death benefits, benefits represent the projected excess guaranteed minimum death benefit payments. For guarantees related to income benefits, benefits represent the present value of the minimum guaranteed annuitization benefits in excess of the projected account balance at the time of annuitization. Projected benefits and contract charges used in determining the liability for certain guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected gross profits. Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based on factors such as the extent of benefit to the potential annuitant, eligibility conditions and the annuitant’s attained age. The liability for guarantees is re-evaluated periodically, and adjustments are made to the liability balance through a charge or credit to contract benefits. Guarantees related to withdrawal and accumulation benefits are considered to be derivative financial instruments; therefore, the liability for these benefits is established based on its fair value. The following table summarizes the liabilities for guarantees: ($ in thousands) Liability for guarantees related to death benefits and interest-sensitive life products Liability for guarantees related to income benefits Liability for guarantees related to accumulation and withdrawal benefits Total Balance, December 31, 2014 (1) $ 16,853 $ 2,175 $ 6,645 $ 25,673 Less reinsurance recoverables 1,725 2,171 6,645 10,541 Net balance as of December 31, 2014 15,128 4 0 15,132 Incurred guarantee benefits 2,669 0 0 2,669 Paid guarantee benefits 0 0 0 0 Net change 2,669 0 0 2,669 Net balance as of December 31, 2015 17,797 4 0 17,801 Plus reinsurance recoverables 1,735 1,575 7,437 10,747 Balance, December 31, 2015 (2) $ 19,532 $ 1,579 $ 7,437 $ 28,548 Balance, December 31, 2013 (3) $ 11,619 $ 2,341 $ 8,602 $ 22,562 Less reinsurance recoverables 1,680 2,333 8,602 12,615 Net balance as of December 31, 2013 9,939 8 — 9,947 Incurred guarantee benefits 5,189 (4 ) — 5,185 Paid guarantee benefits — — — — Net change 5,189 (4 ) — 5,185 Net balance as of December 31, 2014 15,128 4 — 15,132 Plus reinsurance recoverables 1,725 2,171 6,645 10,541 Balance, December 31, 2014 (1) $ 16,853 $ 2,175 $ 6,645 $ 25,673 (1) Included in the total liability balance as of December 31, 2014 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.2 million, variable annuity accumulation benefits of $6.0 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $15.1 million. (2) Included in the total liability balance as of December 31, 2015 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $1.6 million, variable annuity accumulation benefits of $6.8 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $17.8 million. (3) Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $10.0 million. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance | 9. Reinsurance The Company reinsures certain of its risks to unaffiliated reinsurers and ALIC under yearly renewable term, coinsurance and modified coinsurance agreements. These agreements result in a passing of the agreed-upon percentage of risk to the reinsurer in exchange for negotiated reinsurance premium payments. Modified coinsurance is similar to coinsurance, except that the cash and investments that support the liability for contract benefits are not transferred to the assuming company and settlements are made on a net basis between the companies. As of December 31, 2015 and 2014, for certain term life insurance policies, the Company ceded up to 90% of the mortality risk depending on the year of policy issuance. Further, the Company cedes the mortality risk associated with coverage in excess of In addition, the Company has used reinsurance to effect the disposition of certain blocks of business. The Company had reinsurance recoverables of $185.4 million and $189.9 million as of December 31, 2015 and 2014, respectively, due from Prudential related to the disposal of its variable annuity business that was effected through reinsurance agreements. In 2015, premiums and contract charges of $7.1 million, contract benefits of $1.4 million, interest credited to contractholder funds of $4.5 million, and operating costs and expenses of $1.1 million were ceded to Prudential. In 2014, premiums and contract charges of $8.2 million, contract benefits of $1.4 million, interest credited to contractholder funds of $5.2 million, and operating costs and expenses of $1.3 million were ceded to Prudential. In 2013, premiums and contract charges of $9.0 million, contract benefits of $11.0 million, interest credited to contractholder funds of $5.5 million, and operating costs and expenses of $1.5 million were ceded to Prudential. In addition, as of December 31, 2015 and 2014 the Company had reinsurance recoverables of $114 thousand and $22 thousand, respectively, due from a subsidiary of Citigroup (Triton Insurance Company) in connection with the disposition of the direct response distribution business in 2003. As of December 31, 2015, the gross life insurance in force was $40.61 billion of which $572.7 million and $9.01 billion was ceded to affiliated and unaffiliated reinsurers, respectively. The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Direct $ 158,836 $ 155,439 $ 155,193 Assumed - non-affiliate 741 830 835 Ceded Affiliate (1,379 ) (2,238 ) (3,961 ) Non-affiliate (20,032 ) (21,515 ) (23,140 ) Premiums and contract charges, net of reinsurance $ 138,166 $ 132,516 $ 128,927 The effects of reinsurance on contract benefits for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Direct $ 226,424 $ 227,796 $ 213,437 Assumed - non-affiliate 1,088 381 1,008 Ceded Affiliate (7,998 ) (8,363 ) (6,440 ) Non-affiliate (15,920 ) (6,535 ) (4,288 ) Contract benefits, net of reinsurance $ 203,594 $ 213,279 $ 203,717 The effects of reinsurance on interest credited to contractholder funds for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Direct $ 113,166 $ 123,747 $ 135,354 Assumed - non-affiliate 16 15 25 Ceded Non-affiliate (4,545 ) (5,158 ) (5,468 ) Interest credited to contractholder funds, net of reinsurance $ 108,637 $ 118,604 $ 129,911 In addition to amounts included in the table above are reinsurance premiums ceded to ALIC of $3.4 million, $3.4 million and |
Deferred Policy Acquisition and
Deferred Policy Acquisition and Sales Inducement Costs | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Policy Acquisition and Sales Inducement Costs | 10. Deferred Policy Acquisition and Sales Inducement Costs Deferred policy acquisition costs for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Balance, beginning of year $ 135,282 $ 129,836 $ 130,201 Acquisition costs deferred 15,611 17,240 19,553 Amortization charged to income (16,603 ) (13,213 ) (29,783 ) Effect of unrealized gains and losses 6,899 1,419 9,865 Balance, end of year $ 141,189 $ 135,282 $ 129,836 DSI activity, which primarily relates to fixed annuities and interest-sensitive life contracts, for the years ended December 31 was as follows: ($ in thousands) 2015 2014 2013 Balance, beginning of year $ 2,059 $ 1,737 $ 1,717 Sales inducements deferred 285 242 381 Amortization charged to income (192 ) 112 (604 ) Effect of unrealized gains and losses 197 (32 ) 243 Balance, end of year $ 2,349 $ 2,059 $ 1,737 |
Guarantees and Contingent Liabi
Guarantees and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Guarantees and Contingent Liabilities | 11. Guarantees and Contingent Liabilities Guaranty funds Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. Amounts assessed to each company are typically related to its proportion of business written in each state. The Company’s policy is to accrue assessments when the entity for which the insolvency relates has met its state of domicile’s statutory definition of insolvency and the amount of the loss is reasonably estimable. In most states, the definition is met with a declaration of financial insolvency by a court of competent jurisdiction. In certain states there must also be a final order of liquidation. As of December 31, 2015 and 2014, the liability balance included in other liabilities and accrued expenses was $750 thousand and $742 thousand, respectively. The related premium tax offsets included in other assets were $3.6 million as of both December 31, 2015 and 2014. Guarantees Related to the disposal through reinsurance of our variable annuity business to Prudential in 2006, the Company, ALIC and the Corporation have agreed to indemnify Prudential for certain pre-closing contingent liabilities (including extra-contractual liabilities of the Company and liabilities specifically excluded from the transaction) that the Company and ALIC have agreed to retain. In addition, the Company, ALIC and the Corporation will each indemnify Prudential for certain post-closing liabilities that may arise from the acts of the Company and ALIC and their agents, including certain liabilities arising from the Company’s and ALIC’s provision of transition services. The reinsurance agreements contain no limitations or indemnifications with regard to insurance risk transfer, and transferred all of the future risks and responsibilities for performance on the underlying variable annuity contracts to Prudential, including those related to benefit guarantees. Management does not believe this agreement will have a material effect on results of operations, cash flows or financial position of the Company. In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations. The aggregate liability balance related to all guarantees was not material as of December 31, 2015. Regulation and Compliance The Company is subject to extensive laws, regulations and regulatory actions. From time to time, regulatory authorities or legislative bodies seek to impose additional regulations regarding agent and broker compensation, regulate the nature of and amount of investments, impose fines and penalties for unintended errors or mistakes, and otherwise expand overall regulation of insurance products and the insurance industry. In addition, the Company is subject to laws and regulations administered and enforced by federal agencies and other organizations, including but not limited to the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the U.S. Department of Justice. The Company has established procedures and policies to facilitate compliance with laws and regulations, to foster prudent business operations, and to support financial reporting. The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies. As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies. Such modifications, and the reviews that led to them, may be accompanied by payments being made and costs being incurred. The ultimate changes and eventual effects of these actions on the Company’s business, if any, are uncertain. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | 12. Income Taxes The Company joins with the Corporation and its other subsidiaries (the “Allstate Group”) in the filing of a consolidated federal income tax return and is party to a federal income tax allocation agreement (the “Allstate Tax Sharing Agreement”). Under the Allstate Tax Sharing Agreement, the Company pays to or receives from the Corporation the amount, if any, by which the Allstate Group’s federal income tax liability is affected by virtue of inclusion of the Company in the consolidated federal income tax return. Effectively, this results in the Company’s annual income tax provision being computed, with adjustments, as if the Company filed a separate return. The Internal Revenue Service (“IRS”) is currently examining the Allstate Group’s 2013 and 2014 federal income tax returns. The IRS completed the audit of the Allstate Group’s 2011 and 2012 federal income tax returns and issued a final Revenue Agent’s Report on June 10, 2015. The Allstate Group’s tax years prior to 2011 have been examined by the IRS and the statute of limitations has expired on those years. Any adjustments that may result from IRS examinations of the Allstate Group’s tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company. The Company had no liability for unrecognized tax benefits as of December 31, 2015, 2014 or 2013, and believes it is reasonably possible that the liability balance will not significantly increase within the next twelve months. No amounts have been accrued for interest or penalties. The components of the deferred income tax assets and liabilities as of December 31 are as follows: ($ in thousands) 2015 2014 Deferred assets Unrealized foreign currency translation adjustments $ 991 $ 359 Accrued liabilities 41 41 Other assets 8 115 Total deferred assets 1,040 515 Deferred liabilities Unrealized net capital gains (84,963 ) (91,691 ) Difference in tax bases of investments (63,767 ) (64,725 ) Life and annuity reserves (36,021 ) (25,871 ) DAC (29,090 ) (28,375 ) Other liabilities (2,703 ) (2,802 ) Total deferred liabilities (216,544 ) (213,464 ) Net deferred liability $ (215,504 ) $ (212,949 ) Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized based on the Company’s assessment that the deductions ultimately recognized for tax purposes will be fully utilized. The components of income tax expense for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Current $ 31,062 $ 38,729 $ 6,463 Deferred 9,915 30,260 15,998 Total income tax expense $ 40,977 $ 68,989 $ 22,461 The Company paid income taxes of $53.3 million, $21.1 million and $11.7 million in 2015, 2014 and 2013, respectively. A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows: 2015 2014 2013 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes 1.5 0.8 2.3 Other (0.7 ) (0.4 ) (1.5 ) Effective income tax rate 35.8 % 35.4 % 35.8 % |
Statutory Financial Information
Statutory Financial Information and Dividend Limitations | 12 Months Ended |
Dec. 31, 2015 | |
Statutory Financial Information and Dividend Limitations | 13. Statutory Financial Information and Dividend Limitations The Company prepares its statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of New York. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. The State of New York requires insurance companies domiciled in its state to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the State of New York Insurance Superintendent. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis. Statutory net (loss) income was $(63.9) million, $31.3 million and $25.9 million in 2015, 2014 and 2013, respectively. Statutory capital and surplus was $507.6 million and $562.1 million as of December 31, 2015 and 2014, respectively. Dividend Limitations The ability of the Company to pay dividends is dependent on business conditions, income, cash requirements and other relevant factors. The payment of shareholder dividends by the Company without the prior approval of the New York Department of Financial Services (“NYDFS”) is limited to formula amounts based on capital and surplus and net gain from operations excluding realized capital gains and losses, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. During 2016, the Company will not be able to pay dividends without prior NYDFS approval. Any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which totaled $341.6 million as of December 31, 2015, and cannot result in capital and surplus being less than the minimum amount required by law. Under state insurance laws, insurance companies are required to maintain paid up capital of not less than the minimum capital requirement applicable to the types of insurance they are authorized to write. Insurance companies are also subject to risk-based capital (“RBC”) requirements adopted by state insurance regulators. A company’s “authorized control level RBC” is calculated using various factors applied to certain financial balances and activity. Companies that do not maintain adjusted statutory capital and surplus at a level in excess of the company action level RBC, which is two times authorized control level RBC, are required to take specified actions. Company action level RBC is significantly in excess of the minimum capital requirements. Total adjusted statutory capital and surplus and authorized control level RBC of the Company were $602.3 million and $71.7 million, respectively, as of December 31, 2015. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Benefit Plans | 14. Benefit Plans Pension and other postretirement plans Defined benefit pension plans, sponsored by the Corporation, cover most full-time employees, certain part-time employees and employee-agents. Benefits under the pension plans are based upon the employee’s length of service and eligible annual compensation. The cost allocated to the Company for the pension plans was $804 thousand, $832 thousand and $5.3 million in 2015, 2014 and 2013, respectively. The Corporation has reserved the right to modify or terminate its benefit plans at any time and for any reason. Allstate 401(k) Savings Plan Employees of AIC are eligible to become members of the Allstate 401(k) Savings Plan (“Allstate Plan”). The Corporation’s contributions are based on the Corporation’s matching obligation and certain performance measures. The cost allocated to the Company for the Allstate Plan was $811 thousand, $998 thousand and $773 thousand in 2015, 2014 and 2013, respectively. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2015 | |
Other Comprehensive Income | 15. Other Comprehensive Income The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows: ($ in thousands) 2015 Pre-tax Tax After-tax Unrealized net holding gains arising during the period, net of related offsets $ 13,084 $ (4,580 ) $ 8,504 Less: reclassification adjustment of realized capital gains and losses 32,308 (11,308 ) 21,000 Unrealized net capital gains and losses (19,224 ) 6,728 (12,496 ) Unrealized foreign currency translation adjustments (1,803 ) 631 (1,172 ) Other comprehensive loss $ (21,027 ) $ 7,359 $ (13,668 ) 2014 Pre-tax Tax After-tax Unrealized net holding gains arising during the period, net of related offsets $ 92,340 $ (32,319 ) $ 60,021 Less: reclassification adjustment of realized capital gains and losses 64,197 (22,469 ) 41,728 Unrealized net capital gains and losses 28,143 (9,850 ) 18,293 Unrealized foreign currency translation adjustments (1,436 ) 502 (934 ) Other comprehensive income $ 26,707 $ (9,348 ) $ 17,359 2013 Pre-tax Tax After-tax Unrealized net holding losses arising during the period, net of related offsets $ (112,511 ) $ 39,379 $ (73,132 ) Less: reclassification adjustment of realized capital gains and losses 27,975 (9,791 ) 18,184 Unrealized net capital gains and losses (140,486 ) 49,170 (91,316 ) Unrealized foreign currency translation adjustments 1,312 (459 ) 853 Other comprehensive loss $ (139,174 ) $ 48,711 $ (90,463 ) ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK |
Summary of Investments Other Th
Summary of Investments Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Investments Other Than Investments in Related Parties | ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES DECEMBER 31, 2015 ($ in thousands) Cost/ amortized Fair value Amount at Type of investment Fixed maturities: Bonds: United States government, government agencies and authorities $ 142,923 $ 166,697 $ 166,697 States, municipalities and political subdivisions 624,806 726,571 726,571 Foreign governments 191,388 216,751 216,751 Public utilities 608,884 672,790 672,790 All other corporate bonds 2,884,089 2,960,666 2,960,666 Residential mortgage-backed securities 55,036 57,709 57,709 Commercial mortgage-backed securities 86,704 87,210 87,210 Asset-backed securities 92,434 92,620 92,620 Redeemable preferred stocks 8,887 10,189 10,189 Total fixed maturities 4,695,151 $ 4,991,203 4,991,203 Equity securities: Common stocks: Public utilities 6,211 $ 5,765 5,765 Banks, trusts and insurance companies 40,824 39,861 39,861 Industrial, miscellaneous and all other 156,644 155,309 155,309 Nonredeemable preferred stocks 5,443 4,887 4,887 Total equity securities 209,122 $ 205,822 205,822 Mortgage loans on real estate (none acquired in satisfaction of debt) 614,184 $ 634,950 614,184 Policy loans 40,462 40,462 Derivative instruments 983 $ 983 983 Limited partnership interests 281,115 281,115 Short-term investments 108,277 $ 108,279 108,279 Total investments $ 5,949,294 $ 6,242,048 |
Reinsurance24
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance | ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK SCHEDULE IV - REINSURANCE ($ in thousands) Gross amount Ceded to (1) Assumed Net amount Percentage to net Year ended December 31, 2015 Life insurance in force $ 40,103,353 $ 9,581,863 $ 511,360 $ 31,032,850 1.6 % Premiums and contract charges: Life insurance $ 142,994 $ 20,251 $ 741 $ 123,484 0.6 % Accident and health insurance 15,842 1,160 0 14,682 0 % Total premiums and contract charges $ 158,836 $ 21,411 $ 741 $ 138,166 0.5 % Year ended December 31, 2014 Life insurance in force $ 38,743,278 $ 9,927,519 $ 550,942 $ 29,366,701 1.9 % Premiums and contract charges: Life insurance $ 139,430 $ 22,352 $ 830 $ 117,908 0.7 % Accident and health insurance 16,009 1,401 — 14,608 — % Total premiums and contract charges $ 155,439 $ 23,753 $ 830 $ 132,516 0.6 % Year ended December 31, 2013 Life insurance in force $ 37,835,153 $ 10,303,425 $ 578,980 $ 28,110,708 2.1 % Premiums and contract charges: Life insurance $ 140,834 $ 25,564 $ 835 $ 116,105 0.7 % Accident and health insurance 14,359 1,537 — 12,822 — % Total premiums and contract charges $ 155,193 $ 27,101 $ 835 $ 128,927 0.6 % (1) No reinsurance or coinsurance income was netted against premiums ceded in 2015, 2014 or 2013. |
Valuation Allowances and Qualif
Valuation Allowances and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation Allowances and Qualifying Accounts | ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK SCHEDULE V - VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS ($ in thousands) Additions Description Balance as of beginning of Charged expenses Other additions Deductions Balance as of end of period Year ended December 31, 2015 Allowance for estimated losses on mortgage loans $ 0 $ 0 $ 0 $ 0 $ 0 Year ended December 31, 2014 Allowance for estimated losses on mortgage loans $ 1,832 $ (1,110 ) $ — $ 722 $ — Year ended December 31, 2013 Allowance for estimated losses on mortgage loans $ — $ 1,832 $ — $ — $ 1,832 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Investments | Investments Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), asset-backed securities (“ABS”) and redeemable preferred stocks. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes and related deferred policy acquisition costs (“DAC”), deferred sales inducement costs (“DSI”) and reserves for life-contingent contract benefits, is reflected as a component of accumulated other comprehensive income. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Statements of Cash Flows. Mortgage loans are carried at unpaid principal balances, net of unamortized premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. Equity securities primarily include common stocks, exchange traded funds, non-redeemable preferred stocks and real estate investment trust equity investments. Equity securities are designated as available for sale and are carried at fair value. The difference between cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. Investments in limited partnership interests include interests in private equity funds and co-investments, real estate funds, and other funds. Where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, investments in limited partnership interests are accounted for in accordance with the cost method of accounting; all other investments in limited partnership interests are accounted for in accordance with the equity method of accounting (“EMA”). Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value. Policy loans are carried at unpaid principal balances. Other investments consist of derivatives. Derivatives are carried at fair value. Investment income primarily consists of interest, dividends, income from limited partnership interests, and income from certain derivative transactions. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for RMBS, CMBS and ABS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS, CMBS and ABS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of carrying value. Income from cost method limited partnership interests is recognized upon receipt of amounts distributed by the partnerships. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ net income, including unrealized gains and losses, and is generally recognized on a three month delay due to the availability of the related financial statements. Realized capital gains and losses include gains and losses on investment sales, write-downs in value due to other-than-temporary declines in fair value, adjustments to valuation allowances on mortgage loans, and periodic changes in fair value and settlements of certain derivatives including hedge ineffectiveness. Realized capital gains and losses on investment sales are determined on a specific identification basis. |
Derivative and embedded derivative financial instruments | Derivative and embedded derivative financial instruments Derivative financial instruments include options, interest rate caps, foreign currency forwards and a reinvestment related risk transfer reinsurance agreement with ALIC that meets the accounting definition of a derivative (see Note 4). Derivatives required to be separated from the host instrument and accounted for as derivative financial instruments (“subject to bifurcation”) are embedded in certain fixed income securities, equity-indexed life contracts and reinsured variable annuity contracts. All derivatives are accounted for on a fair value basis and reported as other investments, other assets, other liabilities and accrued expenses or contractholder funds. The income statement effects of derivatives, including fair value gains and losses and accrued periodic settlements, are reported in realized capital gains and losses or in a single line item together with the results of the associated liability for which risks are being managed. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. The change in fair value of derivatives embedded in certain fixed income securities and subject to bifurcation is reported in realized capital gains and losses. The change in fair value of derivatives embedded in life and annuity product contracts and subject to bifurcation is reported in contract benefits or interest credited to contractholder funds. Cash flows from embedded derivatives subject to bifurcation are reported consistently with the host contracts within the Statements of Cash Flows. Cash flows from other derivatives are reported in cash flows from investing activities within the Statements of Cash Flows. |
Securities loaned | Securities loaned The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions are reinvested in short-term investments. These transactions are short-term in nature, usually 30 days or less. The Company receives cash collateral for securities loaned in an amount generally equal to 102% of the fair value of securities and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to repossess the securities loaned on short notice. |
Recognition of Premium Revenues and Contract Charges, and Related Benefits and Interest Credited | Recognition of premium revenues and contract charges, and related benefits and interest credited Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Voluntary accident and health insurance products are expected to remain in force for an extended period and therefore are primarily classified as long-duration contracts. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy. Immediate annuities with life contingencies, including certain structured settlement annuities, provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract. Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life contracts are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index. Interest credited also includes amortization of DSI expenses. DSI is amortized into interest credited using the same method used to amortize DAC. Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. All of the Company’s variable annuity business is ceded through reinsurance agreements and the contract charges and contract benefits related thereto are reported net of reinsurance ceded. |
Deferred Policy Acquisition and Sales Inducement Costs | Deferred policy acquisition and sales inducement costs Costs that are related directly to the successful acquisition of new or renewal life insurance and investment contracts are deferred and recorded as DAC. These costs are principally agents’ and brokers’ remuneration and certain underwriting expenses. DSI costs, which are deferred and recorded as other assets, relate to sales inducements offered on sales to new customers, principally on fixed annuity and interest-sensitive life contracts. These sales inducements are primarily in the form of additional credits to the customer’s account balance or enhancements to interest credited for a specified period which are in excess of the rates currently being credited to similar contracts without sales inducements. All other acquisition costs are expensed as incurred and included in operating costs and expenses. Amortization of DAC is included in amortization of deferred policy acquisition costs and is described in more detail below. DSI is amortized into income using the same methodology and assumptions as DAC and is included in interest credited to contractholder funds. For traditional life insurance, DAC is amortized over the premium paying period of the related policies in proportion to the estimated revenues on such business. Assumptions used in the amortization of DAC and reserve calculations are established at the time the policy is issued and are generally not revised during the life of the policy. Any deviations from projected business in force resulting from actual policy terminations differing from expected levels and any estimated premium deficiencies may result in a change to the rate of amortization in the period such events occur. Generally, the amortization periods for these policies approximates the estimated lives of the policies. The Company periodically reviews the recoverability of DAC for these policies on an aggregate basis using actual experience. The Company aggregates all traditional life insurance products and immediate annuities with life contingencies in the analysis. If actual experience is significantly adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. For interest-sensitive life insurance and fixed annuities, DAC and DSI are amortized in proportion to the incidence of the total present value of gross profits, which includes both actual historical gross profits (“AGP”) and estimated future gross profits (“EGP”) expected to be earned over the estimated lives of the contracts. The amortization is net of interest on the prior period DAC balance using rates established at the inception of the contracts. Actual amortization periods generally range from 15-30 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life and 5-10 years for fixed annuities. The cumulative DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are persistency, mortality, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. For products whose supporting investments are exposed to capital losses in excess of the Company’s expectations which may cause periodic AGP to become temporarily negative, EGP and AGP utilized in DAC and DSI amortization may be modified to exclude the excess capital losses. The Company performs quarterly reviews of DAC and DSI recoverability for interest-sensitive life and fixed annuity contracts in the aggregate using current assumptions. If a change in the amount of EGP is significant, it could result in the unamortized DAC or DSI not being recoverable, resulting in a charge which is included as a component of amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. The DAC and DSI balances presented include adjustments to reflect the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized capital gains or losses in the respective product investment portfolios were actually realized. The adjustments are recorded net of tax in accumulated other comprehensive income. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in accumulated other comprehensive income recognize the impact on shareholder’s equity consistently with the amounts that would be recognized in the income statement on realized capital gains and losses. Customers of the Company may exchange one insurance policy or investment contract for another offered by the Company, or make modifications to an existing investment or life contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC and DSI related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For interest-sensitive life and investment contracts, the EGP of the replacement contracts are treated as a revision to the EGP of the replaced contracts in the determination of amortization of DAC and DSI. For traditional life insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions. Any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred. Internal replacement transactions determined to result in a substantial change to the replaced contracts are accounted for as an extinguishment of the replaced contracts, and any unamortized DAC and DSI related to the replaced contracts are eliminated with a corresponding charge to amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. |
Reinsurance | Reinsurance In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to effect the disposition of certain blocks of business. The amounts reported as reinsurance recoverables include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities and contractholder funds that have not yet been paid. Reinsurance recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverables. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate. The Company has a reinsurance treaty with ALIC through which it primarily cedes reinvestment related risk on its structured settlement annuities. The terms of the treaty meet the accounting definition of a derivative. Accordingly, the treaty is recorded in the Statement of Financial Position at fair value. Changes in the fair value of the treaty and premiums paid to ALIC are recognized in realized capital gains and losses. |
Income taxes | Income taxes The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains and losses, differences in tax bases of invested assets, insurance reserves and DAC. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized. |
Reserve for life-contingent contract benefits | Reserve for life-contingent contract benefits The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance, life-contingent immediate annuities and voluntary accident and health insurance products, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. The assumptions are established at the time the policy is issued and are generally not changed during the life of the policy. The Company periodically reviews the adequacy of reserves for these policies on an aggregate basis using actual experience. If actual experience is significantly adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. To the extent that unrealized gains on fixed income securities would result in a premium deficiency if those gains were realized, the related increase in reserves for certain immediate annuities with life contingencies is recorded net of tax as a reduction of unrealized net capital gains included in accumulated other comprehensive income. |
Contractholder funds | Contractholder funds Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on reinsured variable annuity contracts. |
Separate accounts | Separate accounts Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows. Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. All of the Company’s variable annuity business was reinsured beginning in 2006. |
Off-balance sheet financial instruments | Off-balance sheet financial instruments Commitments to invest, commitments to extend mortgage loans and financial guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Statements of Financial Position (see Note 7 and Note 11). |
Amendments to the Consolidation Analysis | Pending accounting standards Amendments to the Consolidation Analysis In February 2015, the Financial Accounting Standards Board (“FASB”) issued guidance affecting the consolidation evaluation for limited partnerships and similar entities, fees paid to a decision maker or service provider, and variable interests in a variable interest entity held by related parties of the reporting enterprise. The guidance is effective for annual reporting periods beginning after December 15, 2015. The Company is in the process of assessing the impact of adoption which is not expected to be material to the Company’s results of operations or financial position. |
Recognition and Measurement of Financial Assets and Financial Liabilities | Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued guidance requiring equity investments, including equity securities and limited partnership interests, that are not accounted for under the equity method of accounting or result in consolidation to be measured at fair value with changes in fair value recognized in net income. Equity investments without readily determinable fair values may be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. When a qualitative assessment of equity investments without readily determinable fair values indicates that impairment exists, the carrying value is required to be adjusted to fair value, if lower. The guidance clarifies that an entity should evaluate the realizability of a deferred tax asset related to available-for-sale fixed income securities in combination with the entity’s other deferred tax assets. The guidance also changes certain disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2017, and is to be applied through a cumulative-effect adjustment to beginning retained income as of the beginning of the period of adoption. The new guidance related to equity investments without readily determinable fair values is to be applied prospectively as of the date of adoption. The Company is in the process of evaluating the impact of adoption. The most significant impact is expected to be the change in accounting for equity securities and cost method limited partnership interests. |
General (Tables)
General (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Premiums and Contract Charges by Product | The following table summarizes premiums and contract charges by product. ($ in thousands) 2015 2014 2013 Premiums Traditional life insurance $ 48,532 $ 44,222 $ 38,618 Immediate annuities with life contingencies 5 240 4,349 Accident and health insurance 14,681 14,608 12,822 Total premiums 63,218 59,070 55,789 Contract charges Interest-sensitive life insurance 74,829 73,151 72,740 Fixed annuities 119 295 398 Total contract charges 74,948 73,446 73,138 Total premiums and contract charges $ 138,166 $ 132,516 $ 128,927 |
Supplemental Cash Flow Inform28
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information | The accompanying cash flows are included in cash flows from operating activities in the Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Net change in proceeds managed Net change in short-term investments $ 1,427 $ (38,485 ) $ (2,838 ) Operating cash flow provided (used) $ 1,427 $ (38,485 ) $ (2,838 ) Net change in liabilities Liabilities for collateral, beginning of year $ (101,095 ) $ (62,610 ) $ (59,772 ) Liabilities for collateral, end of year (99,668 ) (101,095 ) (62,610 ) Operating cash flow (used) provided $ (1,427 ) $ 38,485 $ 2,838 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value | The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: ($ in thousands) Amortized Gross unrealized Fair cost Gains Losses value December 31, 2015 U.S. government and agencies $ 142,923 $ 23,774 $ 0 $ 166,697 Municipal 624,806 102,320 (555 ) 726,571 Corporate 3,492,973 203,606 (63,123 ) 3,633,456 Foreign government 191,388 25,363 0 216,751 RMBS 55,036 2,688 (15 ) 57,709 CMBS 86,704 967 (461 ) 87,210 ABS 92,434 704 (518 ) 92,620 Redeemable preferred stock 8,887 1,302 0 10,189 Total fixed income securities $ 4,695,151 $ 360,724 $ (64,672 ) $ 4,991,203 December 31, 2014 U.S. government and agencies $ 229,639 $ 50,328 $ — $ 279,967 Municipal 661,021 122,046 (110 ) 782,957 Corporate 3,424,181 307,887 (19,074 ) 3,712,994 Foreign government 338,199 58,652 (175 ) 396,676 RMBS 94,130 4,217 (22 ) 98,325 CMBS 129,490 5,402 — 134,892 ABS 73,922 1,153 (475 ) 74,600 Redeemable preferred stock 8,959 1,677 — 10,636 Total fixed income securities $ 4,959,541 $ 551,362 $ (19,856 ) $ 5,491,047 |
Schedule of Net Investment Income | Net investment income Net investment income for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Fixed income securities $ 248,585 $ 276,035 $ 289,571 Mortgage loans 27,582 26,994 31,375 Equity securities 4,905 3,975 4,870 Limited partnership interests 34,177 22,824 8,862 Short-term investments 393 250 210 Policy loans 2,498 2,516 2,543 Other 0 — 65 Investment income, before expense 318,140 332,594 337,496 Investment expense (6,896 ) (9,769 ) (12,379 ) Net investment income $ 311,244 $ 322,825 $ 325,117 |
Schedule of Realized Capital Gains and Losses by Asset Type | Realized capital gains and losses by asset type for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Fixed income securities $ 42,361 $ 1,759 $ (1,537 ) Mortgage loans 25 1,110 (1,507 ) Equity securities (3,260 ) 62,821 27,944 Limited partnership interests (6,948 ) (239 ) (40 ) Derivatives (4,923 ) 52,724 (9,949 ) Short-term investments (137 ) 119 — Realized capital gains and losses $ 27,118 $ 118,294 $ 14,911 |
Schedule of Realized Capital Gains and Losses by Transaction Type | Realized capital gains and losses by transaction type for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Impairment write-downs $ (7,709 ) $ 1,153 $ (3,431 ) Change in intent write-downs (80 ) (499 ) (5,515 ) Net other-than-temporary impairment losses recognized in earnings (7,789 ) 654 (8,946 ) Sales and other 39,830 64,916 33,806 Valuation and settlements of derivative instruments (4,923 ) 52,724 (9,949 ) Realized capital gains and losses $ 27,118 $ 118,294 $ 14,911 |
Schedule of Other-Than-Temporary Impairment Losses by Asset Type | Other-than-temporary impairment losses by asset type for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Gross Included Net Gross Included in OCI Net Gross Included in OCI Net Fixed income securities: Municipal $ (9 ) $ 0 $ (9 ) $ (499 ) $ — $ (499 ) $ (1,727 ) $ — $ (1,727 ) Corporate (1,317 ) 342 (975 ) — — — — — — RMBS 84 0 84 43 — 43 28 — 28 CMBS (380 ) 0 (380 ) — — — (8,392 ) 3,464 (4,928 ) Total fixed income securities (1,622 ) 342 (1,280 ) (456 ) — (456 ) (10,091 ) 3,464 (6,627 ) Mortgage loans 0 0 0 1,110 — 1,110 (1,832 ) — (1,832 ) Equity securities (3,430 ) 0 (3,430 ) — — — (487 ) — (487 ) Limited partnership interests (3,079 ) 0 (3,079 ) — — — — — — Other-than-temporary impairment losses $ (8,131 ) $ 342 $ (7,789 ) $ 654 $ — $ 654 $ (12,410 ) $ 3,464 $ (8,946 ) |
Schedule of other-than-temporary impairment losses on fixed income securities included in Accumulated Other Comprehensive Income | The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amount excludes $849 thousand and $633 thousand as of December 31, 2015 and 2014, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date. ($ in thousands) December 31, 2015 December 31, Corporate $ (4 ) $ — RMBS (41 ) (40 ) CMBS (1 ) — Total $ (46 ) $ (40 ) |
Schedule of Rollforwards of Cumulative Credit Losses Recognized in Earnings for Fixed Income Securities Held | Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of December 31 are as follows: ($ in thousands) 2015 2014 2013 Beginning balance $ (568 ) $ (696 ) $ (1,685 ) Additional credit loss for securities previously other-than-temporarily impaired 84 (71 ) 29 Additional credit loss for securities not previously other-than-temporarily impaired (1,283 ) — (1,628 ) Reduction in credit loss for securities disposed or collected 593 181 960 Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell 0 — 1,628 Change in credit loss due to accretion of increase in cash flows 1 18 — Ending balance $ (1,173 ) $ (568 ) $ (696 ) |
Schedule of Unrealized Net Capital Gains and Losses Included in Accumulated Other Comprehensive Income | Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows: ($ in thousands) Fair Gross unrealized Unrealized net value Gains Losses gains (losses) December 31, 2015 Fixed income securities $ 4,991,203 $ 360,724 $ (64,672 ) $ 296,052 Equity securities 205,822 12,028 (15,328 ) (3,300 ) Short-term investments 108,279 2 0 2 EMA limited partnerships (1) 0 0 0 (58 ) Unrealized net capital gains and losses, pre-tax 0 0 0 292,696 Amounts recognized for: Insurance reserves (2) 0 0 0 (44,407 ) DAC and DSI (3) 0 0 0 (5,538 ) Amounts recognized 0 0 0 (49,945 ) Deferred income taxes 0 0 0 (84,963 ) Unrealized net capital gains and losses, after-tax 0 0 0 $ 157,788 (1) Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable. (2) The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. (3) The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. ($ in thousands) Fair Gross unrealized Unrealized net value Gains Losses gains (losses) December 31, 2014 Fixed income securities $ 5,491,047 $ 551,362 $ (19,856 ) $ 531,506 Equity securities 206,122 2,047 (1,474 ) 573 Short-term investments 138,372 2 (1 ) 1 EMA limited partnerships — Unrealized net capital gains and losses, pre-tax 532,080 Amounts recognized for: Insurance reserves (257,252 ) DAC and DSI (12,853 ) Amounts recognized (270,105 ) Deferred income taxes (91,691 ) Unrealized net capital gains and losses, after-tax $ 170,284 |
Schedule of Change in Unrealized net Capital Gains and Losses | The change in unrealized net capital gains and losses for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Fixed income securities $ (235,454 ) $ 154,469 $ (351,008 ) Equity securities (3,873 ) (38,400 ) 7,735 Short-term investments 1 1 (1 ) EMA limited partnerships (58 ) — (127 ) Total (239,384 ) 116,070 (343,401 ) Amounts recognized for: Insurance reserves 212,845 (88,985 ) 192,620 DAC and DSI 7,315 1,058 10,295 Amounts recognized 220,160 (87,927 ) 202,915 Deferred income taxes 6,728 (9,850 ) 49,170 (Decrease) increase in unrealized net capital gains and losses, after-tax $ (12,496 ) $ 18,293 $ (91,316 ) |
Summary of Gross Unrealized Losses and Fair Value of Fixed Income and Equity Securities by Length of Time | The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position. ($ in thousands) Less than 12 months 12 months or more Total Number of issues Fair value Unrealized losses Number Fair value Unrealized losses unrealized losses December 31, 2015 Fixed income securities Municipal 3 $ 35,673 $ (555 ) 0 $ 0 $ 0 $ (555 ) Corporate 282 942,145 (49,563 ) 23 91,878 (13,560 ) (63,123 ) RMBS 30 506 (4 ) 3 1,743 (11 ) (15 ) CMBS 5 19,914 (461 ) 0 0 0 (461 ) ABS 7 67,266 (168 ) 1 9,650 (350 ) (518 ) Total fixed income securities 327 1,065,504 (50,751 ) 27 103,271 (13,921 ) (64,672 ) Equity securities 328 96,922 (13,433 ) 23 9,760 (1,895 ) (15,328 ) Total fixed income and equity securities 655 $ 1,162,426 $ (64,184 ) 50 $ 113,031 $ (15,816 ) $ (80,000 ) Investment grade fixed income securities 208 $ 951,843 $ (36,167 ) 10 $ 54,087 $ (3,586 ) $ (39,753 ) Below investment grade fixed income securities 119 113,661 (14,584 ) 17 49,184 (10,335 ) (24,919 ) Total fixed income securities 327 $ 1,065,504 $ (50,751 ) 27 $ 103,271 $ (13,921 ) $ (64,672 ) December 31, 2014 Fixed income securities Municipal — $ — $ — 2 $ 6,293 $ (110 ) $ (110 ) Corporate 126 318,039 (9,488 ) 45 181,573 (9,586 ) (19,074 ) Foreign government — — — 1 9,782 (175 ) (175 ) RMBS 5 358 — 2 2,804 (22 ) (22 ) CMBS 1 113 — — — — — ABS — — — 1 9,525 (475 ) (475 ) Total fixed income securities 132 318,510 (9,488 ) 51 209,977 (10,368 ) (19,856 ) Equity securities 278 83,548 (1,474 ) — — — (1,474 ) Total fixed income and equity securities 410 $ 402,058 $ (10,962 ) 51 $ 209,977 $ (10,368 ) $ (21,330 ) Investment grade fixed income securities 50 $ 215,548 $ (4,173 ) 32 $ 167,719 $ (5,222 ) $ (9,395 ) Below investment grade fixed income securities 82 102,962 (5,315 ) 19 42,258 (5,146 ) (10,461 ) Total fixed income securities 132 $ 318,510 $ (9,488 ) 51 $ 209,977 $ (10,368 ) $ (19,856 ) |
Schedule of Commercial Mortgage Loans by Geographic Distribution | The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31. (% of mortgage loan portfolio carrying value) 2015 2014 California 21.5 % 24.6 % New Jersey 9.5 10.2 Texas 8.0 4.7 Illinois 7.6 11.2 Arizona 5.6 5.5 Florida 4.7 5.2 |
Schedule of Types of Properties Collateralizing Commercial Mortgage Loans | The types of properties collateralizing the mortgage loans as of December 31 are as follows: (% of mortgage loan portfolio carrying value) 2015 2014 Apartment complex 28.7 % 19.6 % Warehouse 21.7 24.7 Office buildings 20.0 21.2 Retail 19.2 24.0 Other 10.4 10.5 Total 100.0 % 100.0 % |
Summary of Carrying Value of Non-Impaired Fixed and Variable Rate Mortgage Loans by Debt Service Coverage Ration Distribution | The following table reflects the carrying value of non-impaired fixed rate mortgage loans summarized by debt service coverage ratio distribution as of December 31. There were no variable rate mortgage loans as of December 31, 2015 or 2014. ($ in thousands) 2015 2014 Debt service coverage ratio distribution Below 1.0 $ 14,408 $ 17,081 1.0 - 1.25 35,301 71,801 1.26 - 1.50 194,795 125,877 Above 1.50 369,680 279,033 Total non-impaired mortgage loans $ 614,184 $ 493,792 |
Schedule of Rollforward of Valuation Allowance on Impaired Mortgage Loans | The rollforward of the valuation allowance on impaired mortgage loans for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Beginning balance $ 0 $ 1,832 $ — Net (decrease) increase in valuation allowance 0 (1,110 ) 1,832 Charge offs 0 (722 ) — Ending balance $ 0 $ — $ 1,832 |
Schedule of Municipal Bonds Held For Investment by Geographic Distribution | The Company maintains a diversified portfolio of municipal bonds. The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio. (% of municipal bond portfolio carrying value) 2015 2014 California 25.9 % 24.2 % Texas 12.0 11.4 Oregon 6.2 5.5 Illinois 5.3 6.2 |
Fixed income securities | |
Schedule of Securities Based on Contractual Maturities | Scheduled maturities The scheduled maturities for fixed income securities are as follows as of December 31, 2015: ($ in thousands) Amortized cost Fair value Due in one year or less $ 233,685 $ 236,265 Due after one year through five years 1,393,700 1,471,802 Due after five years through ten years 1,626,246 1,665,102 Due after ten years 1,207,346 1,380,495 RMBS, CMBS and ABS 234,174 237,539 Total $ 4,695,151 $ 4,991,203 |
Mortgage loans | |
Schedule of Securities Based on Contractual Maturities | The contractual maturities of the mortgage loan portfolio as of December 31, 2015 are as follows: ($ in thousands) Number of loans Carrying Percent 2016 9 $ 40,775 6.7 % 2017 8 41,298 6.7 2018 9 45,010 7.3 2019 1 10,000 1.6 Thereafter 79 477,101 77.7 Total 106 $ 614,184 100.0 % |
Fair Value of Assets and Liab30
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis | The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring and non-recurring basis as of December 31, 2015. ($ in thousands) Quoted prices in active markets for identical assets Significant other observable Significant Counterparty Balance as of December 31, Assets Fixed income securities: U.S. government and agencies $ 14,146 $ 152,551 $ 0 0 $ 166,697 Municipal 0 694,285 32,286 0 726,571 Corporate - public 0 2,385,162 10,139 0 2,395,301 Corporate - private placed 0 1,026,297 211,858 0 1,238,155 Foreign government 0 216,751 0 0 216,751 RMBS 0 57,709 0 0 57,709 CMBS 0 87,210 0 0 87,210 ABS - CDO 0 0 9,650 0 9,650 ABS - consumer and other 0 67,266 15,704 0 82,970 Redeemable preferred stock 0 10,189 0 0 10,189 Total fixed income securities 14,146 4,697,420 279,637 0 4,991,203 Equity securities 198,433 454 6,935 0 205,822 Short-term investments 22,749 85,530 0 0 108,279 Other investments: Free-standing derivatives 0 662 329 $ (8 ) 983 Separate account assets 317,316 0 0 0 317,316 Other assets 0 0 82,774 0 82,774 Total recurring basis assets 552,644 4,784,066 369,675 (8 ) 5,706,377 Non-recurring basis (1) 0 0 477 0 477 Total assets at fair value $ 552,644 $ 4,784,066 $ 370,152 $ (8 ) $ 5,706,854 % of total assets at fair value 9.7 % 83.8 % 6.5 % 0 % 100.0 % Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ 0 $ 0 $ (7,900 ) 0 $ (7,900 ) Other liabilities: Free-standing derivatives 0 (148 ) 0 $ 8 (140 ) Total liabilities at fair value $ 0 $ (148 ) $ (7,900 ) $ 8 $ (8,040 ) % of total liabilities at fair value 0 % 1.8 % 98.3 % (0.1 )% 100.0 % (1) Includes $477 thousand of limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments. The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2014. There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2014. ($ in thousands) Quoted prices Significant Significant Balance as of December 31, Assets Fixed income securities: U.S. government and agencies $ 3,642 $ 276,325 $ — $ 279,967 Municipal — 740,535 42,422 782,957 Corporate - public — 2,456,330 16,035 2,472,365 Corporate - private placed — 1,004,099 236,530 1,240,629 Foreign government — 396,676 — 396,676 RMBS — 98,325 — 98,325 CMBS — 134,892 — 134,892 ABS - CDO — — 9,525 9,525 ABS - consumer and other — 49,255 15,820 65,075 Redeemable preferred stock — 10,636 — 10,636 Total fixed income securities 3,642 5,167,073 320,332 5,491,047 Equity securities 200,575 547 5,000 206,122 Short-term investments 2,003 136,369 — 138,372 Other investments: Free-standing derivatives — 46 554 600 Separate account assets 383,263 — — 383,263 Other assets — — 84,561 84,561 Total assets at fair value $ 589,483 $ 5,304,035 $ 410,447 $ 6,303,965 % of total assets at fair value 9.4 % 84.1 % 6.5 % 100.0 % Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (7,391 ) $ (7,391 ) Total liabilities at fair value $ — $ — $ (7,391 ) $ (7,391 ) % of total liabilities at fair value — % — % 100.0 % 100.0 % |
Summary of Quantitative Information About Significant Unobservable Inputs Used in Level Three Fair Value Measurements | The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. ($ in thousands) Fair value Valuation technique Unobservable input Range Weighted average December 31, 2015 Other assets – Structured settlement annuity reinsurance agreement $82,774 Stochastic cash flow model Ultimate reinvestment spreads 130.7 - 256.0 162.3 basis points December 31, 2014 Other assets – Structured settlement annuity reinsurance agreement $84,561 Stochastic cash flow model Ultimate reinvestment spreads 130.9 - 198.4 basis points 155.6 basis points |
Schedule of Rollforward of Level Three Assets and Liabilities Held at Fair Value on Recurring Basis | The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2015. ($ in thousands) Total gains (losses) Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 42,422 $ 336 $ (1,309 ) $ 0 $ 0 Corporate - public 16,035 0 (654 ) 0 (4,642 ) Corporate - privately placed 236,530 7,611 (5,368 ) 0 (14,772 ) ABS - CDO 9,525 0 125 0 0 ABS - consumer and other 15,820 0 (116 ) 0 0 Total fixed income securities 320,332 7,947 (7,322 ) 0 (19,414 ) Equity securities 5,000 14 (565 ) 190 0 Free-standing derivatives, net 554 (178 ) 0 0 0 Other assets 84,561 (1,787 ) 0 0 0 Total recurring Level 3 assets $ 410,447 $ 5,996 $ (7,887 ) $ 190 $ (19,414 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (7,391 ) $ (509 ) $ 0 $ 0 $ 0 Total recurring Level 3 liabilities $ (7,391 ) $ (509 ) $ 0 $ 0 $ 0 Purchases Sales Issues Settlements Balance as of 2015 Assets Fixed income securities: Municipal $ 0 $ (7,256 ) $ 0 $ (1,907 ) $ 32,286 Corporate - public 0 0 0 (600 ) 10,139 Corporate - privately placed 0 0 0 (12,143 ) 211,858 ABS - CDO 0 0 0 0 9,650 ABS - consumer and other 0 0 0 0 15,704 Total fixed income securities 0 (7,256 ) 0 (14,650 ) 279,637 Equity securities 2,569 (273 ) 0 0 6,935 Free-standing derivatives, net 62 0 0 (109 ) 329 Other assets 0 0 0 0 82,774 Total recurring Level 3 assets $ 2,631 $ (7,529 ) $ 0 $ (14,759 ) $ 369,675 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ 0 $ 0 $ 0 $ 0 $ (7,900 ) Total recurring Level 3 liabilities $ 0 $ 0 $ 0 $ 0 $ (7,900 ) (1) The effect to net income totals $5.5 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(1.7) million in realized capital gains and losses, $7.7 million in net investment income, $283 thousand in interest credited to contractholder funds and $(792) thousand in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2014. ($ in thousands) Total gains (losses) Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 51,315 $ (360 ) $ 2,874 $ — $ (4,940 ) Corporate 259,428 7,257 (741 ) 40,734 (34,409 ) ABS 24,799 — 546 — — Total fixed income securities 335,542 6,897 2,679 40,734 (39,349 ) Equity securities — — — — — Free-standing derivatives, net 1,076 (533 ) — — — Other assets 27,826 56,735 — — — Total recurring Level 3 assets $ 364,444 $ 63,099 $ 2,679 $ 40,734 $ (39,349 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (9,197 ) $ 1,806 $ — $ — $ — Total recurring Level 3 liabilities $ (9,197 ) $ 1,806 $ — $ — $ — Purchases Sales Issues Settlements Balance as of 2014 Assets Fixed income securities: Municipal $ — $ (4,559 ) $ — $ (1,908 ) $ 42,422 Corporate 1,500 (7,396 ) — (13,808 ) 252,565 ABS — — — — 25,345 Total fixed income securities 1,500 (11,955 ) — (15,716 ) 320,332 Equity securities 5,000 — — — 5,000 Free-standing derivatives, net 73 — — (62 ) 554 Other assets — — — — 84,561 Total recurring Level 3 assets $ 6,573 $ (11,955 ) $ — $ (15,778 ) $ 410,447 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (7,391 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (7,391 ) (1) The effect to net income totals $64.9 million and is reported in the Statements of Operations and Comprehensive Income as follows: $55.9 million in realized capital gains and losses, $7.2 million in net investment income, $(151) thousand in interest credited to contractholder funds and $2.0 million in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013. ($ in thousands) Total gains (losses) Balance as of Net income (1) OCI Transfers Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 67,672 $ (1,960 ) $ 2,614 $ — $ — Corporate 260,351 8,509 (8,214 ) 9,663 (4,160 ) ABS 26,970 — (951 ) — — Total fixed income securities 354,993 6,549 (6,551 ) 9,663 (4,160 ) Free-standing derivatives, net 306 431 — — — Other assets 34,655 (6,829 ) — — — Total recurring Level 3 assets $ 389,954 $ 151 $ (6,551 ) $ 9,663 $ (4,160 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (17,877 ) $ 8,680 $ — $ — $ — Total recurring Level 3 liabilities $ (17,877 ) $ 8,680 $ — $ — $ — Purchases Sales Issues Settlements Balance as of 2013 Assets Fixed income securities: Municipal $ — $ (15,067 ) $ — $ (1,944 ) $ 51,315 Corporate 6,910 (10,615 ) — (3,016 ) 259,428 ABS — — — (1,220 ) 24,799 Total fixed income securities 6,910 (25,682 ) — (6,180 ) 335,542 Free-standing derivatives, net 339 — — — 1,076 Other assets — — — — 27,826 Total recurring Level 3 assets $ 7,249 $ (25,682 ) $ — $ (6,180 ) $ 364,444 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (9,197 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (9,197 ) (1) The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. |
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held | The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31. ($ in thousands) 2015 2014 2013 Assets Fixed income securities: Municipal $ 71 $ (395 ) $ (1,458 ) Corporate 7,611 7,099 6,633 Total fixed income securities 7,682 6,704 5,175 Free-standing derivatives, net (178 ) (533 ) 431 Other assets (1,787 ) 56,735 (6,829 ) Total recurring Level 3 assets $ 5,717 $ 62,906 $ (1,223 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (509 ) $ 1,806 $ 8,680 Total recurring Level 3 liabilities $ (509 ) $ 1,806 $ 8,680 |
Schedule of Carrying Values and Fair Value Estimates of Financial Instruments not Carried at Fair Value | Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value. Financial assets ($ in thousands) December 31, 2015 December 31, 2014 Carrying Fair value Carrying Fair value Mortgage loans $ 614,814 $ 634,950 $ 493,792 $ 526,433 Cost method limited partnerships 64,490 72,142 52,543 59,330 Financial liabilities ($ in thousands) December 31, 2015 December 31, 2014 Carrying Fair value Carrying Fair value Contractholder funds on investment contracts $ 2,271,861 $ 2,355,015 $ 2,491,461 $ 2,615,231 Liability for collateral 99,668 99,668 101,095 101,095 |
Derivative Financial Instrume31
Derivative Financial Instruments and Off-balance sheet Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Volume and Fair Value Positions of Derivative Instruments and Reporting Location in Statement of Financial Position | The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2015. None of these derivatives are designated as accounting hedging instruments. ($ in thousands, except number of contracts) Volume (1) Balance sheet location Notional Number Fair value, net Gross Gross Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 22,100 n/a $ 329 $ 329 $ 0 Equity and index contracts Options Other investments 0 77 592 592 0 Foreign currency contracts Foreign currency forwards Other investments 5,130 n/a 62 70 (8 ) Other contracts Structured settlement annuity reinsurance agreement Other assets 0 n/a 82,774 82,774 0 Total asset derivatives $ 27,230 77 $ 83,757 $ 83,765 $ (8 ) Liability derivatives Equity and index contracts Options Other liabilities & 0 77 (140 ) 0 (140 ) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds $ 87,221 n/a $ (6,769 ) $ 0 $ (6,769 ) Guaranteed withdrawal benefits Contractholder funds 20,774 n/a (668 ) 0 (668 ) Equity-indexed options in life product contracts Contractholder funds 17,379 n/a (463 ) 0 (463 ) Total liability derivatives 125,374 77 (8,040 ) $ 0 $ (8,040 ) Total derivatives $ 152,604 154 $ 75,717 (1) Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2014. None of these derivatives are designated as accounting hedging instruments. ($ in thousands) Balance sheet location Volume- notional Fair value, net Gross Gross Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 28,600 $ 554 $ 554 $ — Foreign currency contracts Foreign currency forwards Other investments 7,001 46 46 — Embedded derivative financial instruments Conversion options Fixed income securities 42 — — — Other contracts Structured settlement annuity reinsurance agreement Other assets — 84,561 84,561 — Total asset derivatives $ 35,643 $ 85,161 $ 85,161 $ — Liability derivatives Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds $ 115,611 $ (5,966 ) $ — $ (5,966 ) Guaranteed withdrawal benefits Contractholder funds 25,955 (679 ) — (679 ) Equity-indexed options in life product contracts Contractholder funds 13,325 (746 ) — (746 ) Total liability derivatives 154,891 (7,391 ) $ — $ (7,391 ) Total derivatives $ 190,534 $ 77,770 |
Schedule of gross and net amount for the Company's OTC derivatives subject to enforceable master netting arrangements | The following table provides gross and net amounts for the Company’s OTC derivatives, all of which are subject to enforceable master netting agreements. There were no offset amounts required to net the carrying values as of December 31, 2014. ($ in thousands) Offsets Gross Counter- Cash Net Securities Net December 31, 2015 Asset derivatives $ 399 $ (8 ) $ 0 $ 391 $ 0 $ 391 Liability derivatives (8 ) 8 0 0 0 0 |
Summary of Gains and Losses from Valuation and Settlements For Derivatives Not Designated As Hedges | The following tables present gains and losses from valuation and settlements reported on derivatives not designated as accounting hedging instruments in the Statements of Operations and Comprehensive Income. ($ in thousands) Realized Contract Interest credited to Total gain (loss) 2015 Interest rate contracts $ (178 ) $ 0 $ 0 $ (178 ) Equity and index contracts 0 0 (155 ) (155 ) Foreign currency contracts 427 0 0 427 Embedded derivative financial instruments 0 (792 ) 283 (509 ) Other contracts - structured settlement annuity reinsurance agreement (5,172 ) 0 0 (5,172 ) Total $ (4,923 ) $ (792 ) $ 128 $ (5,587 ) 2014 Interest rate contracts $ (533 ) $ — $ — $ (533 ) Foreign currency contracts (48 ) — — (48 ) Embedded derivative financial instruments 0 1,957 (151 ) 1,806 Other contracts - structured settlement annuity reinsurance agreement 53,305 — — 53,305 Total $ 52,724 $ 1,957 $ (151 ) $ 54,530 2013 Interest rate contracts $ 431 $ — $ — $ 431 Embedded derivative financial instruments (83 ) 8,977 (297 ) 8,597 Other contracts - structured settlement annuity reinsurance agreement (10,297 ) — — (10,297 ) Total $ (9,949 ) $ 8,977 $ (297 ) $ (1,269 ) |
Summary of Counterparty Credit Exposure by Counterparty Credit Rating | The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. ($ in thousands) 2015 2014 Rating (1) Number of counter- Notional Amount (2) Credit exposure (2) Exposure, net of collateral (2) Number of counter- Notional Amount (2) Credit exposure (2) Exposure, net of collateral (2) A+ 1 $ 11,800 $ 197 $ 197 1 $ 15,200 $ 310 $ 310 A 3 9,765 125 125 2 4,500 110 110 BBB+ 2 5,665 69 69 1 10,901 158 158 BBB 0 0 0 0 1 5,000 22 22 Total 6 $ 27,230 $ 391 $ 391 5 $ 35,601 $ 600 $ 600 (1) Rating is the lower of S&P or Moody’s ratings. (2) Only OTC derivatives with a net positive fair value are included for each counterparty. |
Reserve for Life-Contingent C32
Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Reserve for Life-Contingent Contract Benefits | As of December 31, the reserve for life-contingent contract benefits consists of the following: ($ in thousands) 2015 2014 Immediate fixed annuities: Structured settlement annuities $ 1,807,651 $ 2,010,807 Other immediate fixed annuities 59,389 54,834 Traditional life insurance 215,216 201,661 Accident and health insurance 11,207 11,209 Other 1,853 1,845 Total reserve for life-contingent contract benefits $ 2,095,316 $ 2,280,356 |
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits | The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits. Product Mortality Interest rate Estimation method Structured settlement annuities U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy Interest rate assumptions range from 2.9% to 9.0% Present value of contractually specified future benefits Other immediate fixed annuities 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table Interest rate assumptions range from 0% to 11.5% Present value of expected future benefits based on historical experience Traditional life insurance Actual company experience plus loading Interest rate assumptions range from 3.0% to 8.0% Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims Accident and health insurance Actual company experience plus loading Interest rate assumptions range from 3.5% to 6.0% Unearned premium; additional contract reserves for mortality risk and unpaid claims Other: Variable annuity guaranteed minimum death benefits (1) Annuity 2012 mortality table with internal modifications Interest rate assumptions range from 2.1% to 5.8% Projected benefit ratio applied to cumulative assessments (1) In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”). |
Schedule of Contractholder Funds | As of December 31, contractholder funds consist of the following: ($ in thousands) 2015 2014 Interest-sensitive life insurance $ 724,317 $ 718,126 Investment contracts: Fixed annuities 2,434,757 2,660,522 Other investment contracts 26,813 23,946 Total contractholder funds $ 3,185,887 $ 3,402,594 |
Schedule of Contract Provisions Related to Contractholder Funds | The following table highlights the key contract provisions relating to contractholder funds: Product Interest rate Withdrawal/surrender charges Interest-sensitive life insurance Interest rates credited range from 0% to 9.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.7% to 5.1% for all other products Either a percentage of account balance or dollar amount grading off generally over 20 years Fixed annuities Interest rates credited range from 0% to 9.0% for immediate annuities and 1.0% to 5.3% for other fixed annuities Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 12.5% of fixed annuities are subject to market value adjustment for discretionary withdrawals Other investment contracts: (1) Interest rates used in establishing reserves range from 1.7% to 10.3% Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract (1) In 2006, the Company disposed its variable annuity business through a reinsurance agreement with Prudential. |
Schedule of Contractholder Funds Activity | Contractholder funds activity for the years ended December 31 is as follows: ($ in thousands) 2015 2014 2013 Balance, beginning of year $ 3,402,594 $ 3,670,557 $ 3,958,440 Deposits 103,041 105,626 109,282 Interest credited 108,730 118,957 129,687 Benefits (137,834 ) (145,889 ) (152,822 ) Surrenders and partial withdrawals (211,171 ) (279,835 ) (284,755 ) Contract charges (72,575 ) (71,332 ) (70,856 ) Net transfers from separate accounts 252 143 153 Other adjustments (7,150 ) 4,367 (18,572 ) Balance, end of year $ 3,185,887 $ 3,402,594 $ 3,670,557 |
Summary of Variable Annuity Contracts with Guarantees | The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. ($ in millions) December 31, 2015 2014 In the event of death Separate account value $ 301.3 $ 372.7 Net amount at risk (1) $ 15.3 $ 10.1 Average attained age of contractholders 66 years 65 years At annuitization (includes income benefit guarantees) Separate account value $ 22.9 $ 26.2 Net amount at risk (2) $ 2.5 $ 1.9 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 19.6 $ 24.9 Net amount at risk (3) $ 0.3 $ 0.2 Accumulation at specified dates Separate account value $ 83.4 $ 112.8 Net amount at risk (4) $ 2.4 $ 1.7 Weighted average waiting period until guarantee date 3 years 3 years (1) Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. (2) Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. (3) Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. (4) Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. |
Summary of Liabilities for Guarantees | The following table summarizes the liabilities for guarantees: ($ in thousands) Liability for guarantees related to death benefits and interest-sensitive life products Liability for guarantees related to income benefits Liability for guarantees related to accumulation and withdrawal benefits Total Balance, December 31, 2014 (1) $ 16,853 $ 2,175 $ 6,645 $ 25,673 Less reinsurance recoverables 1,725 2,171 6,645 10,541 Net balance as of December 31, 2014 15,128 4 0 15,132 Incurred guarantee benefits 2,669 0 0 2,669 Paid guarantee benefits 0 0 0 0 Net change 2,669 0 0 2,669 Net balance as of December 31, 2015 17,797 4 0 17,801 Plus reinsurance recoverables 1,735 1,575 7,437 10,747 Balance, December 31, 2015 (2) $ 19,532 $ 1,579 $ 7,437 $ 28,548 Balance, December 31, 2013 (3) $ 11,619 $ 2,341 $ 8,602 $ 22,562 Less reinsurance recoverables 1,680 2,333 8,602 12,615 Net balance as of December 31, 2013 9,939 8 — 9,947 Incurred guarantee benefits 5,189 (4 ) — 5,185 Paid guarantee benefits — — — — Net change 5,189 (4 ) — 5,185 Net balance as of December 31, 2014 15,128 4 — 15,132 Plus reinsurance recoverables 1,725 2,171 6,645 10,541 Balance, December 31, 2014 (1) $ 16,853 $ 2,175 $ 6,645 $ 25,673 (1) Included in the total liability balance as of December 31, 2014 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.2 million, variable annuity accumulation benefits of $6.0 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $15.1 million. (2) Included in the total liability balance as of December 31, 2015 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $1.6 million, variable annuity accumulation benefits of $6.8 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $17.8 million. (3) Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $10.0 million. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Effects of Reinsurance on Premiums and Contract Charges | The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Direct $ 158,836 $ 155,439 $ 155,193 Assumed - non-affiliate 741 830 835 Ceded Affiliate (1,379 ) (2,238 ) (3,961 ) Non-affiliate (20,032 ) (21,515 ) (23,140 ) Premiums and contract charges, net of reinsurance $ 138,166 $ 132,516 $ 128,927 |
Schedule of Effects of Reinsurance on Contract Benefits | The effects of reinsurance on contract benefits for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Direct $ 226,424 $ 227,796 $ 213,437 Assumed - non-affiliate 1,088 381 1,008 Ceded Affiliate (7,998 ) (8,363 ) (6,440 ) Non-affiliate (15,920 ) (6,535 ) (4,288 ) Contract benefits, net of reinsurance $ 203,594 $ 213,279 $ 203,717 |
Schedule of Effect of Reinsurance on Interest Credited to Contractholder Funds | The effects of reinsurance on interest credited to contractholder funds for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Direct $ 113,166 $ 123,747 $ 135,354 Assumed - non-affiliate 16 15 25 Ceded Non-affiliate (4,545 ) (5,158 ) (5,468 ) Interest credited to contractholder funds, net of reinsurance $ 108,637 $ 118,604 $ 129,911 |
Deferred Policy Acquisition a34
Deferred Policy Acquisition and Sales Inducement Costs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Deferred Policy Acquisition Costs | Deferred policy acquisition costs for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Balance, beginning of year $ 135,282 $ 129,836 $ 130,201 Acquisition costs deferred 15,611 17,240 19,553 Amortization charged to income (16,603 ) (13,213 ) (29,783 ) Effect of unrealized gains and losses 6,899 1,419 9,865 Balance, end of year $ 141,189 $ 135,282 $ 129,836 |
Schedule of Deferred Sales Inducement Activity | DSI activity, which primarily relates to fixed annuities and interest-sensitive life contracts, for the years ended December 31 was as follows: ($ in thousands) 2015 2014 2013 Balance, beginning of year $ 2,059 $ 1,737 $ 1,717 Sales inducements deferred 285 242 381 Amortization charged to income (192 ) 112 (604 ) Effect of unrealized gains and losses 197 (32 ) 243 Balance, end of year $ 2,349 $ 2,059 $ 1,737 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Components of Deferred Income Tax Assets and Liabilities | The components of the deferred income tax assets and liabilities as of December 31 are as follows: ($ in thousands) 2015 2014 Deferred assets Unrealized foreign currency translation adjustments $ 991 $ 359 Accrued liabilities 41 41 Other assets 8 115 Total deferred assets 1,040 515 Deferred liabilities Unrealized net capital gains (84,963 ) (91,691 ) Difference in tax bases of investments (63,767 ) (64,725 ) Life and annuity reserves (36,021 ) (25,871 ) DAC (29,090 ) (28,375 ) Other liabilities (2,703 ) (2,802 ) Total deferred liabilities (216,544 ) (213,464 ) Net deferred liability $ (215,504 ) $ (212,949 ) |
Components of Income Tax Expense | The components of income tax expense for the years ended December 31 are as follows: ($ in thousands) 2015 2014 2013 Current $ 31,062 $ 38,729 $ 6,463 Deferred 9,915 30,260 15,998 Total income tax expense $ 40,977 $ 68,989 $ 22,461 |
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate | A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows: 2015 2014 2013 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes 1.5 0.8 2.3 Other (0.7 ) (0.4 ) (1.5 ) Effective income tax rate 35.8 % 35.4 % 35.8 % |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis | The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows: ($ in thousands) 2015 Pre-tax Tax After-tax Unrealized net holding gains arising during the period, net of related offsets $ 13,084 $ (4,580 ) $ 8,504 Less: reclassification adjustment of realized capital gains and losses 32,308 (11,308 ) 21,000 Unrealized net capital gains and losses (19,224 ) 6,728 (12,496 ) Unrealized foreign currency translation adjustments (1,803 ) 631 (1,172 ) Other comprehensive loss $ (21,027 ) $ 7,359 $ (13,668 ) 2014 Pre-tax Tax After-tax Unrealized net holding gains arising during the period, net of related offsets $ 92,340 $ (32,319 ) $ 60,021 Less: reclassification adjustment of realized capital gains and losses 64,197 (22,469 ) 41,728 Unrealized net capital gains and losses 28,143 (9,850 ) 18,293 Unrealized foreign currency translation adjustments (1,436 ) 502 (934 ) Other comprehensive income $ 26,707 $ (9,348 ) $ 17,359 2013 Pre-tax Tax After-tax Unrealized net holding losses arising during the period, net of related offsets $ (112,511 ) $ 39,379 $ (73,132 ) Less: reclassification adjustment of realized capital gains and losses 27,975 (9,791 ) 18,184 Unrealized net capital gains and losses (140,486 ) 49,170 (91,316 ) Unrealized foreign currency translation adjustments 1,312 (459 ) 853 Other comprehensive loss $ (139,174 ) $ 48,711 $ (90,463 ) |
Summary of Premiums and Contrac
Summary of Premiums and Contract Charges by Product (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Product Information [Line Items] | |||
Premiums | $ 63,218 | $ 59,070 | $ 55,789 |
Contract charges | 74,948 | 73,446 | 73,138 |
Total premiums and contract charges | 138,166 | 132,516 | 128,927 |
Traditional life insurance | |||
Product Information [Line Items] | |||
Premiums | 48,532 | 44,222 | 38,618 |
Immediate annuities with life contingencies | |||
Product Information [Line Items] | |||
Premiums | 5 | 240 | 4,349 |
Accident and health insurance | |||
Product Information [Line Items] | |||
Premiums | 14,681 | 14,608 | 12,822 |
Interest-sensitive life insurance | |||
Product Information [Line Items] | |||
Contract charges | 74,829 | 73,151 | 72,740 |
Fixed annuities | |||
Product Information [Line Items] | |||
Contract charges | $ 119 | $ 295 | $ 398 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cash collateral for securities loaned as percentage of fair value | 102.00% |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Amortization period of deferred acquisition costs | 15 years |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Amortization period of deferred acquisition costs | 30 years |
Interest-sensitive life insurance | Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Amortization period of deferred acquisition costs | 5 years |
Interest-sensitive life insurance | Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Amortization period of deferred acquisition costs | 10 years |
Fixed annuities | Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Amortization period of deferred acquisition costs | 10 years |
Fixed annuities | Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Amortization period of deferred acquisition costs | 20 years |
Supplemental Cash Flow Inform39
Supplemental Cash Flow Information - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Supplemental Cash Flow Information [Line Items] | ||||
Non-cash modifications of certain mortgage loans and fixed income securities | $ 1,600,000 | $ 22,000 | $ 5,000,000 | |
Non-cash Investing to limited partnership | 4,700,000 | |||
Liabilities for collateral received in conjunction with the securities lending program | $ 99,668,000 | $ 101,095,000 | $ 62,610,000 | $ 59,772,000 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net change in proceeds managed | |||
Net change in short-term investments | $ 1,427 | $ (38,485) | $ (2,838) |
Operating cash flow provided (used) | 1,427 | (38,485) | (2,838) |
Net change in liabilities | |||
Liabilities for collateral, beginning of year | (101,095) | (62,610) | (59,772) |
Liabilities for collateral, end of year | (99,668) | (101,095) | (62,610) |
Operating cash flow (used) provided | $ (1,427) | $ 38,485 | $ 2,838 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Operating expenses, including compensation, allocated by Allstate Insurance Company | $ 39,000 | $ 44,100 | $ 54,200 |
Reserve for annuities issued | 2,095,316 | 2,280,356 | |
Ceded premium related to structured settlement annuities | 12,362 | 12,782 | 15,510 |
Maximum amount of loans Corporation will have outstanding to all eligible subsidiaries at any given point in time | 1,000,000 | ||
Allstate Insurance Company ("AIC") | |||
Related Party Transaction [Line Items] | |||
Reserve for annuities issued | 1,410,000 | 1,410,000 | |
Allstate Insurance Company ("AIC") | Life contingent structured settlement | |||
Related Party Transaction [Line Items] | |||
Structured settlement annuities issued | 900 | ||
Allstate Distributors Services, LLC | |||
Related Party Transaction [Line Items] | |||
Broker-Dealer agreement, Promotion and marketing expense | 23 | 7 | 14 |
Allstate Financial Services, LLC | |||
Related Party Transaction [Line Items] | |||
Broker-Dealer agreement, Commission and other distribution expenses | 233 | 166 | 246 |
Allstate Life Insurance Company | |||
Related Party Transaction [Line Items] | |||
Reserve for annuities issued | 624,500 | 642,400 | |
Ceded premium related to structured settlement annuities | 3,400 | 3,400 | $ 3,500 |
Carrying value of structured settlement reinsurance treaty | $ 82,800 | $ 84,600 |
Schedule for Fixed Income Secur
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 4,695,151 | $ 4,959,541 |
Fair value | 4,991,203 | 5,491,047 |
U.S. government and agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 142,923 | 229,639 |
Gross unrealized gains | 23,774 | 50,328 |
Gross unrealized losses | 0 | |
Fair value | 166,697 | 279,967 |
Municipal | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 624,806 | 661,021 |
Gross unrealized gains | 102,320 | 122,046 |
Gross unrealized losses | (555) | (110) |
Fair value | 726,571 | 782,957 |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 3,492,973 | 3,424,181 |
Gross unrealized gains | 203,606 | 307,887 |
Gross unrealized losses | (63,123) | (19,074) |
Fair value | 3,633,456 | 3,712,994 |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 191,388 | 338,199 |
Gross unrealized gains | 25,363 | 58,652 |
Gross unrealized losses | 0 | (175) |
Fair value | 216,751 | 396,676 |
Residential mortgage-backed securities ("RMBS") | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 55,036 | 94,130 |
Gross unrealized gains | 2,688 | 4,217 |
Gross unrealized losses | (15) | (22) |
Fair value | 57,709 | 98,325 |
Commercial mortgage-backed securities ("CMBS") | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 86,704 | 129,490 |
Gross unrealized gains | 967 | 5,402 |
Gross unrealized losses | (461) | |
Fair value | 87,210 | 134,892 |
ABS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 92,434 | 73,922 |
Gross unrealized gains | 704 | 1,153 |
Gross unrealized losses | (518) | (475) |
Fair value | 92,620 | 74,600 |
Redeemable preferred stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8,887 | 8,959 |
Gross unrealized gains | 1,302 | 1,677 |
Gross unrealized losses | 0 | |
Fair value | 10,189 | 10,636 |
Fixed income securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,695,151 | 4,959,541 |
Gross unrealized gains | 360,724 | 551,362 |
Gross unrealized losses | (64,672) | (19,856) |
Fair value | $ 4,991,203 | $ 5,491,047 |
Schedule for Fixed Income Sec43
Schedule for Fixed Income Securities Based on Contractual Maturities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Amortized cost | ||
Due in one year or less | $ 233,685 | |
Due after one year through five years | 1,393,700 | |
Due after five years through ten years | 1,626,246 | |
Due after ten years | 1,207,346 | |
RMBS, CMBS and ABS | 234,174 | |
Total | 4,695,151 | $ 4,959,541 |
Fair value | ||
Due in one year or less | 236,265 | |
Due after one year through five years | 1,471,802 | |
Due after five years through ten years | 1,665,102 | |
Due after ten years | 1,380,495 | |
RMBS, CMBS and ABS | 237,539 | |
Total | $ 4,991,203 | $ 5,491,047 |
Schedule of Net Investment Inco
Schedule of Net Investment Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Investment Income [Line Items] | |||
Investment income, before expense | $ 318,140 | $ 332,594 | $ 337,496 |
Investment expense | (6,896) | (9,769) | (12,379) |
Net investment income | 311,244 | 322,825 | 325,117 |
Fixed income securities | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 248,585 | 276,035 | 289,571 |
Mortgage loans | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 27,582 | 26,994 | 31,375 |
Equity securities | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 4,905 | 3,975 | 4,870 |
Limited partnership interests | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 34,177 | 22,824 | 8,862 |
Short-term | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 393 | 250 | 210 |
Policy loans | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 2,498 | $ 2,516 | 2,543 |
Other | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | $ 0 | $ 65 |
Schedule of Realized Capital Ga
Schedule of Realized Capital Gains and Losses by Asset Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | $ 27,118 | $ 118,294 | $ 14,911 |
Fixed income securities | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | 42,361 | 1,759 | (1,537) |
Mortgage loans | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | 25 | 1,110 | (1,507) |
Equity securities | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | (3,260) | 62,821 | 27,944 |
Limited partnership interests | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | (6,948) | (239) | (40) |
Derivative instruments | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | (4,923) | 52,724 | $ (9,949) |
Short-term investments | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | $ (137) | $ 119 |
Schedule of Realized Capital 46
Schedule of Realized Capital Gains and Losses by Transaction Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain (Loss) on Investments [Line Items] | |||
Impairment write-downs | $ (7,709) | $ 1,153 | $ (3,431) |
Change in intent write-downs | (80) | (499) | (5,515) |
Net other-than-temporary impairment losses recognized in earnings | (7,789) | 654 | (8,946) |
Sales | 39,830 | 64,916 | 33,806 |
Valuation and settlements of derivative instruments | (4,923) | 52,724 | (9,949) |
Realized capital gains and losses | $ 27,118 | $ 118,294 | $ 14,911 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Investments [Line Items] | |||
Net unrealized gains related to changes in valuation of fixed income securities subsequent to impairment measurement date | $ 849 | $ 633 | |
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 52,600 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 80,000 | ||
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of cost or amortized cost | 27,400 | ||
Limited partnership interests | 281,115 | 212,947 | |
Mortgage loans | 614,184 | 493,792 | |
Total impaired mortgage loans | 0 | 0 | |
Average balance impaired mortgage loans | 2,400 | 7,600 | |
Interest income on collateral, net of fees | 235 | 0 | $ 0 |
Debt securities | 4,991,203 | 5,491,047 | |
Other liabilities and accrued expenses | |||
Schedule of Investments [Line Items] | |||
Investment-related debt | 4,700 | ||
Cost-method limited partnership interests | |||
Schedule of Investments [Line Items] | |||
Limited partnership interests | 64,500 | 52,500 | |
EMA limited partnerships | |||
Schedule of Investments [Line Items] | |||
Limited partnership interests | 216,600 | 160,400 | |
Fixed income securities | |||
Schedule of Investments [Line Items] | |||
Gross gains realized on sales of fixed income securities | 53,200 | 65,700 | 36,000 |
Gross losses realized on sales of fixed income securities | 9,300 | 636 | 2,500 |
Fixed income securities on loan | 96,500 | 98,000 | |
Debt securities | 4,991,203 | 5,491,047 | |
Fixed income securities | Non Income Producing Investments | |||
Schedule of Investments [Line Items] | |||
Debt securities | 0 | ||
Investment grade fixed income securities | |||
Schedule of Investments [Line Items] | |||
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 30,300 | ||
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of cost or amortized cost | 9,500 | ||
Below investment grade fixed income securities | |||
Schedule of Investments [Line Items] | |||
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 27,400 | ||
Available for sale Securities, Unrealized Losses Having Loss of Less than Twenty Percent, Less than 12 Months | 20,300 | ||
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of cost or amortized cost | 11,000 | ||
Unrealized losses related to securities with unrealized loss position greater than 20% of cost or amortized cost, unrealized loss position of 12 or more consecutive months | 7,100 | ||
Debt securities | 269,800 | 300,300 | |
Fixed income securities and short-term investments | |||
Schedule of Investments [Line Items] | |||
Assets on deposit with regulatory authorities | 2,400 | ||
Equity securities | |||
Schedule of Investments [Line Items] | |||
Gross gains realized on sales of fixed income securities | 53,200 | 65,700 | 36,000 |
Gross losses realized on sales of fixed income securities | 9,300 | $ 636 | $ 2,500 |
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 8,400 | ||
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of cost or amortized cost | $ 6,900 |
Schedule of Other-Than-Temporar
Schedule of Other-Than-Temporary Impairment Losses by Asset Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | $ (8,131) | $ 654 | $ (12,410) |
Included in OCI | 342 | 3,464 | |
Net | (7,789) | 654 | (8,946) |
Municipal | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | (9) | (499) | (1,727) |
Included in OCI | 0 | ||
Net | (9) | (499) | (1,727) |
Corporate | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | (1,317) | ||
Included in OCI | 342 | ||
Net | (975) | ||
Residential mortgage-backed securities ("RMBS") | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | 84 | 43 | 28 |
Included in OCI | 0 | ||
Net | 84 | 43 | 28 |
Commercial mortgage-backed securities ("CMBS") | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | (380) | (8,392) | |
Included in OCI | 0 | 3,464 | |
Net | (380) | (4,928) | |
Fixed income securities | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | (1,622) | (456) | (10,091) |
Included in OCI | 342 | 3,464 | |
Net | (1,280) | (456) | (6,627) |
Mortgage loans | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | 0 | 1,110 | (1,832) |
Included in OCI | 0 | ||
Net | 0 | $ 1,110 | (1,832) |
Equity securities | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | (3,430) | (487) | |
Included in OCI | 0 | ||
Net | (3,430) | $ (487) | |
Limited Partner Interest | |||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | |||
Gross | (3,079) | ||
Included in OCI | 0 | ||
Net | $ (3,079) |
Schedule of Other-Than-Tempor49
Schedule of Other-Than-Temporary Impairment Losses on Fixed Income Securities Iincluded in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Than Temporary Impairment Losses Included In Accumulated Other Comprehensive Income [Line Items] | ||
Amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities, not included in earnings | $ (46) | $ (40) |
Corporate | ||
Other Than Temporary Impairment Losses Included In Accumulated Other Comprehensive Income [Line Items] | ||
Amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities, not included in earnings | (4) | |
Residential mortgage-backed securities ("RMBS") | ||
Other Than Temporary Impairment Losses Included In Accumulated Other Comprehensive Income [Line Items] | ||
Amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities, not included in earnings | (41) | $ (40) |
Commercial mortgage-backed securities ("CMBS") | ||
Other Than Temporary Impairment Losses Included In Accumulated Other Comprehensive Income [Line Items] | ||
Amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities, not included in earnings | $ (1) |
Schedule of Rollforwards of Cum
Schedule of Rollforwards of Cumulative Credit Losses Recognized in Earnings for Fixed Income Securities Held (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Other than Temporary Impairments [Line Items] | |||
Beginning balance | $ (568) | $ (696) | $ (1,685) |
Additional credit loss for securities previously other-than-temporarily impaired | 84 | (71) | 29 |
Additional credit loss for securities not previously other-than-temporarily impaired | (1,283) | (1,628) | |
Reduction in credit loss for securities disposed or collected | 593 | 181 | 960 |
Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell | 0 | 1,628 | |
Change in credit loss due to accretion of increase in cash flows | 1 | 18 | |
Ending balance | $ (1,173) | $ (568) | $ (696) |
Schedule of Unrealized Net Capi
Schedule of Unrealized Net Capital Gains and Losses (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | ||
Fair value | ||||
Fixed income securities | $ 4,991,203 | $ 5,491,047 | ||
Equity securities | 205,822 | 206,122 | ||
Short-term investments | 108,279 | 138,372 | ||
Gross unrealized Gains | ||||
Fixed income securities | 360,724 | 551,362 | ||
Equity securities | 12,028 | 2,047 | ||
Short-term investments | 2 | 2 | ||
Gross unrealized Losses | ||||
Fixed income securities | (64,672) | (19,856) | ||
Equity securities | (15,328) | (1,474) | ||
Short-term investments | 0 | (1) | ||
Unrealized net gains (losses) | ||||
Fixed income securities | 296,052 | 531,506 | ||
Equity securities | (3,300) | 573 | ||
Short-term investments | 2 | 1 | ||
EMA limited partnerships | [1] | (58) | ||
Unrealized net capital gains and losses, pre-tax | 292,696 | 532,080 | ||
Amounts recognized for: | ||||
Insurance reserves | (44,407) | [2] | (257,252) | |
DAC and DSI | (5,538) | [3] | (12,853) | |
Amounts recognized | (49,945) | (270,105) | ||
Deferred income taxes | (84,963) | (91,691) | ||
Total unrealized net capital gains and losses | $ 157,788 | $ 170,284 | ||
[1] | Unrealized net capital gains and losses for limited partnership interests represent the Company's share of EMA limited partnerships' other comprehensive income. Fair value and gross unrealized gains and losses are not applicable. | |||
[2] | The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. | |||
[3] | The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. |
Schedule of Change in Unrealize
Schedule of Change in Unrealized net Capital Gains and Losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | |||
Change in unrealized net capital gains and losses | $ (239,384) | $ 116,070 | $ (343,401) |
Amounts recognized for: | |||
Insurance reserves | 212,845 | (88,985) | 192,620 |
DAC and DSI | 7,315 | 1,058 | 10,295 |
Amounts recognized | 220,160 | (87,927) | 202,915 |
Deferred income taxes | 6,728 | (9,850) | 49,170 |
Increase (decrease) in unrealized net capital gains and losses, after-tax | (12,496) | 18,293 | (91,316) |
EMA limited partnerships | |||
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | |||
Change in unrealized net capital gains and losses | (58) | (127) | |
Fixed income securities | |||
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | |||
Change in unrealized net capital gains and losses | (235,454) | 154,469 | (351,008) |
Equity securities | |||
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | |||
Change in unrealized net capital gains and losses | (3,873) | (38,400) | 7,735 |
Short-term investments | |||
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | |||
Change in unrealized net capital gains and losses | $ 1 | $ 1 | $ (1) |
Summary of Gross Unrealized Los
Summary of Gross Unrealized Losses and Fair Value of Fixed Income and Equity Securities by Length of Time (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)Securities | Dec. 31, 2014USD ($)Securities | |
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 655 | 410 |
Fair value, continuous unrealized loss position for less than 12 months | $ 1,162,426 | $ 402,058 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (64,184) | $ (10,962) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 50 | 51 |
Fair value, continuous unrealized loss position for 12 months or more | $ 113,031 | $ 209,977 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (15,816) | (10,368) |
Total unrealized losses | $ (80,000) | $ (21,330) |
Municipal | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 3 | |
Fair value, continuous unrealized loss position for less than 12 months | $ 35,673 | |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (555) | |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 0 | 2 |
Fair value, continuous unrealized loss position for 12 months or more | $ 0 | $ 6,293 |
Unrealized losses, continuous unrealized loss position for 12 months or more | 0 | (110) |
Total unrealized losses | $ (555) | $ (110) |
Corporate | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 282 | 126 |
Fair value, continuous unrealized loss position for less than 12 months | $ 942,145 | $ 318,039 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (49,563) | $ (9,488) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 23 | 45 |
Fair value, continuous unrealized loss position for 12 months or more | $ 91,878 | $ 181,573 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (13,560) | (9,586) |
Total unrealized losses | $ (63,123) | $ (19,074) |
Foreign government | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 1 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 9,782 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | (175) | |
Total unrealized losses | $ (175) | |
Residential mortgage-backed securities ("RMBS") | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 30 | 5 |
Fair value, continuous unrealized loss position for less than 12 months | $ 506 | $ 358 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (4) | |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 3 | 2 |
Fair value, continuous unrealized loss position for 12 months or more | $ 1,743 | $ 2,804 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (11) | (22) |
Total unrealized losses | $ (15) | $ (22) |
Commercial mortgage-backed securities ("CMBS") | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 5 | 1 |
Fair value, continuous unrealized loss position for less than 12 months | $ 19,914 | $ 113 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (461) | |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 0 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 0 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | 0 | |
Total unrealized losses | $ (461) | |
ABS | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 7 | |
Fair value, continuous unrealized loss position for less than 12 months | $ 67,266 | |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (168) | |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 1 | 1 |
Fair value, continuous unrealized loss position for 12 months or more | $ 9,650 | $ 9,525 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (350) | (475) |
Total unrealized losses | $ (518) | $ (475) |
Fixed income securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 327 | 132 |
Fair value, continuous unrealized loss position for less than 12 months | $ 1,065,504 | $ 318,510 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (50,751) | $ (9,488) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 27 | 51 |
Fair value, continuous unrealized loss position for 12 months or more | $ 103,271 | $ 209,977 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (13,921) | (10,368) |
Total unrealized losses | $ (64,672) | $ (19,856) |
Equity securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 328 | 278 |
Fair value, continuous unrealized loss position for less than 12 months | $ 96,922 | $ 83,548 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (13,433) | (1,474) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 23 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 9,760 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | (1,895) | |
Total unrealized losses | $ (15,328) | $ (1,474) |
Investment grade fixed income securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 208 | 50 |
Fair value, continuous unrealized loss position for less than 12 months | $ 951,843 | $ 215,548 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (36,167) | $ (4,173) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 10 | 32 |
Fair value, continuous unrealized loss position for 12 months or more | $ 54,087 | $ 167,719 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (3,586) | (5,222) |
Total unrealized losses | $ (39,753) | $ (9,395) |
Below investment grade fixed income securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 119 | 82 |
Fair value, continuous unrealized loss position for less than 12 months | $ 113,661 | $ 102,962 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (14,584) | $ (5,315) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 17 | 19 |
Fair value, continuous unrealized loss position for 12 months or more | $ 49,184 | $ 42,258 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (10,335) | (5,146) |
Total unrealized losses | $ (24,919) | $ (10,461) |
Schedule of Commercial Mortgage
Schedule of Commercial Mortgage Loans by Geographic Distribution (Detail) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
California | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 21.50% | 24.60% |
Illinois | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 7.60% | 11.20% |
New Jersey | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 9.50% | 10.20% |
Arizona | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 5.60% | 5.50% |
Florida | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 4.70% | 5.20% |
Texas | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 8.00% | 4.70% |
Schedule of Types of Properties
Schedule of Types of Properties Collateralizing Commercial Mortgage Loans (Detail) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
Warehouse | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 21.70% | 24.70% |
Retail | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 19.20% | 24.00% |
Office buildings | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 20.00% | 21.20% |
Apartment complex | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 28.70% | 19.60% |
Other | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 10.40% | 10.50% |
Schedule of Contractual Maturit
Schedule of Contractual Maturities of Mortgage Loans (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)Loan | Dec. 31, 2014USD ($) | |
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 106 | |
Carrying value, maturing in 2016 | $ | $ 40,775 | |
Carrying value, maturing in 2017 | $ | 41,298 | |
Carrying value, maturing in 2018 | $ | 45,010 | |
Carrying value, maturing in 2019 | $ | 10,000 | |
Carrying value, maturing thereafter | $ | 477,101 | |
Carrying value, total | $ | $ 614,184 | $ 493,792 |
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
2,016 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 9 | |
Percentage of mortgage loan portfolio carrying value | 6.70% | |
2,017 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 8 | |
Percentage of mortgage loan portfolio carrying value | 6.70% | |
2,018 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 9 | |
Percentage of mortgage loan portfolio carrying value | 7.30% | |
2,019 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 1 | |
Percentage of mortgage loan portfolio carrying value | 1.60% | |
Thereafter | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 79 | |
Percentage of mortgage loan portfolio carrying value | 77.70% |
Summary of Carrying Value of No
Summary of Carrying Value of Non-Impaired Fixed and Variable Rate Mortgage Loans by Debt Service Coverage Ration Distribution (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Mortgage Loans on Real Estate [Line Items] | ||
Total | $ 614,184 | $ 493,792 |
Non-impaired mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 614,184 | 493,792 |
Below 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 14,408 | 17,081 |
1.0 - 1.25 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 35,301 | 71,801 |
1.26 - 1.50 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 194,795 | 125,877 |
Above 1.50 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | $ 369,680 | $ 279,033 |
Schedule of Rollforward of Valu
Schedule of Rollforward of Valuation Allowance on Impaired Mortgage Loans (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning balance | $ 0 | $ 1,832 | |
Net (decrease) increase in valuation allowance | 0 | (1,110) | $ 1,832 |
Charge offs | 0 | (722) | |
Ending balance | $ 0 | $ 0 | $ 1,832 |
Schedule of Municipal Bonds Hel
Schedule of Municipal Bonds Held For Investment by Geographic Distribution (Detail) | Dec. 31, 2015 | Dec. 31, 2014 |
California | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 25.90% | 24.20% |
Texas | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 12.00% | 11.40% |
Illinois | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 5.30% | 6.20% |
Oregon | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 6.20% | 5.50% |
Summary of Assets and Liabiliti
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets | |||
Fixed income securities | $ 4,991,203 | $ 5,491,047 | |
Equity securities | 205,822 | 206,122 | |
Short-term investments | 108,279 | 138,372 | |
Other investments: | |||
Free-standing derivatives | 983 | 600 | |
Separate account assets | 317,316 | 383,263 | |
Other assets | 82,774 | 84,561 | |
Total recurring basis assets | 5,706,377 | ||
Non-recurring basis | [1] | 477 | |
Total assets at fair value | $ 5,706,854 | $ 6,303,965 | |
% of total assets at fair value | 100.00% | 100.00% | |
Contractholder funds: | |||
Derivatives embedded in life and annuity contracts | $ (7,900) | $ (7,391) | |
Other liabilities: | |||
Other liabilities: Free-standing derivatives | (140) | ||
Total liabilities at fair value | $ (8,040) | $ (7,391) | |
% of total liabilities at fair value | 100.00% | 100.00% | |
U.S. government and agencies | |||
Assets | |||
Fixed income securities | $ 166,697 | $ 279,967 | |
Municipal | |||
Assets | |||
Fixed income securities | 726,571 | 782,957 | |
Corporate - public | |||
Assets | |||
Fixed income securities | 2,395,301 | 2,472,365 | |
Corporate - privately placed | |||
Assets | |||
Fixed income securities | 1,238,155 | 1,240,629 | |
Foreign government | |||
Assets | |||
Fixed income securities | 216,751 | 396,676 | |
Residential mortgage-backed securities ("RMBS") | |||
Assets | |||
Fixed income securities | 57,709 | 98,325 | |
Commercial mortgage-backed securities ("CMBS") | |||
Assets | |||
Fixed income securities | 87,210 | 134,892 | |
Asset Backed Securities - CDO | |||
Assets | |||
Fixed income securities | 9,650 | 9,525 | |
Asset Backed Securities - consumer and other | |||
Assets | |||
Fixed income securities | 82,970 | 65,075 | |
Redeemable preferred stock | |||
Assets | |||
Fixed income securities | 10,189 | 10,636 | |
Counterparty and cash collateral netting | |||
Assets | |||
Fixed income securities | 0 | ||
Equity securities | 0 | ||
Short-term investments | 0 | ||
Other investments: | |||
Free-standing derivatives | (8) | ||
Separate account assets | 0 | ||
Other assets | 0 | ||
Total recurring basis assets | (8) | ||
Non-recurring basis | [1] | $ 0 | |
% of total assets at fair value | 0.00% | ||
Contractholder funds: | |||
Derivatives embedded in life and annuity contracts | $ 0 | ||
Other liabilities: | |||
Other liabilities: Free-standing derivatives | 8 | ||
Total liabilities at fair value | $ 8 | ||
% of total liabilities at fair value | (0.10%) | ||
Total assets at fair value | $ (8) | ||
Counterparty and cash collateral netting | U.S. government and agencies | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Municipal | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Corporate - public | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Corporate - privately placed | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Foreign government | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Residential mortgage-backed securities ("RMBS") | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Commercial mortgage-backed securities ("CMBS") | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Asset Backed Securities - CDO | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Asset Backed Securities - consumer and other | |||
Assets | |||
Fixed income securities | 0 | ||
Counterparty and cash collateral netting | Redeemable preferred stock | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | |||
Assets | |||
Fixed income securities | 14,146 | 3,642 | |
Equity securities | 198,433 | 200,575 | |
Short-term investments | 22,749 | 2,003 | |
Other investments: | |||
Free-standing derivatives | 0 | ||
Separate account assets | 317,316 | 383,263 | |
Other assets | 0 | ||
Total recurring basis assets | 552,644 | ||
Non-recurring basis | [1] | 0 | |
Total assets at fair value | $ 552,644 | $ 589,483 | |
% of total assets at fair value | 9.70% | 9.40% | |
Contractholder funds: | |||
Derivatives embedded in life and annuity contracts | $ 0 | ||
Other liabilities: | |||
Other liabilities: Free-standing derivatives | 0 | ||
Total liabilities at fair value | $ 0 | ||
% of total liabilities at fair value | 0.00% | ||
Quoted prices in active markets for identical assets (Level 1) | U.S. government and agencies | |||
Assets | |||
Fixed income securities | $ 14,146 | $ 3,642 | |
Quoted prices in active markets for identical assets (Level 1) | Municipal | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Corporate - public | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Corporate - privately placed | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Foreign government | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Residential mortgage-backed securities ("RMBS") | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Commercial mortgage-backed securities ("CMBS") | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Asset Backed Securities - CDO | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Asset Backed Securities - consumer and other | |||
Assets | |||
Fixed income securities | 0 | ||
Quoted prices in active markets for identical assets (Level 1) | Redeemable preferred stock | |||
Assets | |||
Fixed income securities | 0 | ||
Significant other observable inputs (Level 2) | |||
Assets | |||
Fixed income securities | 4,697,420 | 5,167,073 | |
Equity securities | 454 | 547 | |
Short-term investments | 85,530 | 136,369 | |
Other investments: | |||
Free-standing derivatives | 662 | 46 | |
Separate account assets | 0 | ||
Other assets | 0 | ||
Total recurring basis assets | 4,784,066 | ||
Non-recurring basis | [1] | 0 | |
Total assets at fair value | $ 4,784,066 | $ 5,304,035 | |
% of total assets at fair value | 83.80% | 84.10% | |
Contractholder funds: | |||
Derivatives embedded in life and annuity contracts | $ 0 | ||
Other liabilities: | |||
Other liabilities: Free-standing derivatives | (148) | ||
Total liabilities at fair value | $ (148) | ||
% of total liabilities at fair value | 1.80% | ||
Significant other observable inputs (Level 2) | U.S. government and agencies | |||
Assets | |||
Fixed income securities | $ 152,551 | $ 276,325 | |
Significant other observable inputs (Level 2) | Municipal | |||
Assets | |||
Fixed income securities | 694,285 | 740,535 | |
Significant other observable inputs (Level 2) | Corporate - public | |||
Assets | |||
Fixed income securities | 2,385,162 | 2,456,330 | |
Significant other observable inputs (Level 2) | Corporate - privately placed | |||
Assets | |||
Fixed income securities | 1,026,297 | 1,004,099 | |
Significant other observable inputs (Level 2) | Foreign government | |||
Assets | |||
Fixed income securities | 216,751 | 396,676 | |
Significant other observable inputs (Level 2) | Residential mortgage-backed securities ("RMBS") | |||
Assets | |||
Fixed income securities | 57,709 | 98,325 | |
Significant other observable inputs (Level 2) | Commercial mortgage-backed securities ("CMBS") | |||
Assets | |||
Fixed income securities | 87,210 | 134,892 | |
Significant other observable inputs (Level 2) | Asset Backed Securities - CDO | |||
Assets | |||
Fixed income securities | 0 | ||
Significant other observable inputs (Level 2) | Asset Backed Securities - consumer and other | |||
Assets | |||
Fixed income securities | 67,266 | 49,255 | |
Significant other observable inputs (Level 2) | Redeemable preferred stock | |||
Assets | |||
Fixed income securities | 10,189 | 10,636 | |
Significant unobservable inputs (Level 3) | |||
Assets | |||
Fixed income securities | 279,637 | 320,332 | |
Equity securities | 6,935 | 5,000 | |
Short-term investments | 0 | ||
Other investments: | |||
Free-standing derivatives | 329 | 554 | |
Separate account assets | 0 | ||
Other assets | 82,774 | 84,561 | |
Total recurring basis assets | 369,675 | ||
Non-recurring basis | [1] | 477 | |
Total assets at fair value | $ 370,152 | $ 410,447 | |
% of total assets at fair value | 6.50% | 6.50% | |
Contractholder funds: | |||
Derivatives embedded in life and annuity contracts | $ (7,900) | $ (7,391) | |
Other liabilities: | |||
Other liabilities: Free-standing derivatives | 0 | ||
Total liabilities at fair value | $ (7,900) | $ (7,391) | |
% of total liabilities at fair value | 98.30% | 100.00% | |
Significant unobservable inputs (Level 3) | U.S. government and agencies | |||
Assets | |||
Fixed income securities | $ 0 | ||
Significant unobservable inputs (Level 3) | Municipal | |||
Assets | |||
Fixed income securities | 32,286 | $ 42,422 | |
Significant unobservable inputs (Level 3) | Corporate - public | |||
Assets | |||
Fixed income securities | 10,139 | 16,035 | |
Significant unobservable inputs (Level 3) | Corporate - privately placed | |||
Assets | |||
Fixed income securities | 211,858 | 236,530 | |
Significant unobservable inputs (Level 3) | Foreign government | |||
Assets | |||
Fixed income securities | 0 | ||
Significant unobservable inputs (Level 3) | Residential mortgage-backed securities ("RMBS") | |||
Assets | |||
Fixed income securities | 0 | ||
Significant unobservable inputs (Level 3) | Commercial mortgage-backed securities ("CMBS") | |||
Assets | |||
Fixed income securities | 0 | ||
Significant unobservable inputs (Level 3) | Asset Backed Securities - CDO | |||
Assets | |||
Fixed income securities | 9,650 | 9,525 | |
Significant unobservable inputs (Level 3) | Asset Backed Securities - consumer and other | |||
Assets | |||
Fixed income securities | 15,704 | $ 15,820 | |
Significant unobservable inputs (Level 3) | Redeemable preferred stock | |||
Assets | |||
Fixed income securities | $ 0 | ||
[1] | Includes $477 thousand of limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments. |
Summary of Assets and Liabili61
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis (Parenthetical) (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Limited partnership interests | $ 477 |
Summary of Quantitative Informa
Summary of Quantitative Information About Significant Unobservable Inputs Used in Level Three Fair Value Measurements (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair value | $ 5,706,854 | $ 6,303,965 |
Structured settlement annuity reinsurance agreement | Stochastic cash flow model | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair value | $ 82,774 | $ 84,561 |
Structured settlement annuity reinsurance agreement | Weighted average | Stochastic cash flow model | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Ultimate reinvestment spreads | 1.623% | 1.556% |
Structured settlement annuity reinsurance agreement | Minimum | Stochastic cash flow model | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Ultimate reinvestment spreads | 1.307% | 1.309% |
Structured settlement annuity reinsurance agreement | Maximum | Stochastic cash flow model | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Ultimate reinvestment spreads | 2.56% | 1.984% |
Fair Value of Assets and Liab63
Fair Value of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fixed income securities | $ 4,991,203 | $ 5,491,047 | |
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date, included in earnings | 5,200 | 64,700 | $ 7,500 |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | 5,717 | 62,906 | (1,223) |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in interest credited to contract holder funds | 283 | (151) | (297) |
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in life and annuity contract benefits | (792) | 2,000 | 9,000 |
Capital Gain | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | (2,000) | 55,700 | (7,900) |
Investment Income | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | 7,700 | 7,200 | $ 6,700 |
Significant unobservable inputs (Level 3) | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fixed income securities | 279,637 | 320,332 | |
Significant unobservable inputs (Level 3) | Fixed income securities - non-binding broker quotes | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fixed income securities | $ 258,700 | $ 290,900 |
Schedule of Rollforward of Leve
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | $ 410,447 | $ 364,444 | $ 389,954 | ||||
Level 3 assets, Total gains (losses) included in net income | 5,996 | [1] | 63,099 | [2] | 151 | [3] | |
Level 3 assets, Total gains (losses) included in OCI | (7,887) | 2,679 | (6,551) | ||||
Level 3 assets, Transfers into Level 3 | 190 | 40,734 | 9,663 | ||||
Level 3 assets, Transfers out of Level 3 | (19,414) | (39,349) | (4,160) | ||||
Level 3 liabilities, Balance at beginning of period | (7,391) | (9,197) | (17,877) | ||||
Level 3 liabilities, Total gains (losses) included in net income | (509) | [1] | 1,806 | [2] | 8,680 | [3] | |
Level 3 liabilities, Total gains (losses) included in OCI | 0 | ||||||
Level 3 liabilities, Transfers into Level 3 | 0 | ||||||
Level 3 liabilities, Transfers out of Level 3 | 0 | ||||||
Level 3 assets, Purchases | 2,631 | 6,573 | 7,249 | ||||
Level 3 assets, Sales | (7,529) | (11,955) | (25,682) | ||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | (14,759) | (15,778) | (6,180) | ||||
Level 3 assets, Balance at end of period | 369,675 | 410,447 | 364,444 | ||||
Level 3 liabilities, Purchases | 0 | ||||||
Level 3 liabilities, Sales | 0 | ||||||
Level 3 liabilities, Issues | 0 | ||||||
Level 3 liabilities, Settlements | 0 | ||||||
Level 3 liabilities, Balance at end of period | (7,900) | (7,391) | (9,197) | ||||
Municipal | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 42,422 | 51,315 | 67,672 | ||||
Level 3 assets, Total gains (losses) included in net income | 336 | [1] | (360) | [2] | (1,960) | [3] | |
Level 3 assets, Total gains (losses) included in OCI | (1,309) | 2,874 | 2,614 | ||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | 0 | (4,940) | |||||
Level 3 assets, Purchases | 0 | ||||||
Level 3 assets, Sales | (7,256) | (4,559) | (15,067) | ||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | (1,907) | (1,908) | (1,944) | ||||
Level 3 assets, Balance at end of period | 32,286 | 42,422 | 51,315 | ||||
Corporate - public | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 16,035 | ||||||
Level 3 assets, Total gains (losses) included in net income | [1] | 0 | |||||
Level 3 assets, Total gains (losses) included in OCI | (654) | ||||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | (4,642) | ||||||
Level 3 assets, Purchases | 0 | ||||||
Level 3 assets, Sales | 0 | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | (600) | ||||||
Level 3 assets, Balance at end of period | 10,139 | 16,035 | |||||
Corporate - privately placed | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 236,530 | ||||||
Level 3 assets, Total gains (losses) included in net income | [1] | 7,611 | |||||
Level 3 assets, Total gains (losses) included in OCI | (5,368) | ||||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | (14,772) | ||||||
Level 3 assets, Purchases | 0 | ||||||
Level 3 assets, Sales | 0 | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | (12,143) | ||||||
Level 3 assets, Balance at end of period | 211,858 | 236,530 | |||||
Asset Backed Securities - CDO | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 9,525 | ||||||
Level 3 assets, Total gains (losses) included in net income | [1] | 0 | |||||
Level 3 assets, Total gains (losses) included in OCI | 125 | ||||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | 0 | ||||||
Level 3 assets, Purchases | 0 | ||||||
Level 3 assets, Sales | 0 | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | 0 | ||||||
Level 3 assets, Balance at end of period | 9,650 | 9,525 | |||||
Asset Backed Securities - consumer and other | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 15,820 | ||||||
Level 3 assets, Total gains (losses) included in net income | [1] | 0 | |||||
Level 3 assets, Total gains (losses) included in OCI | (116) | ||||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | 0 | ||||||
Level 3 assets, Purchases | 0 | ||||||
Level 3 assets, Sales | 0 | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | 0 | ||||||
Level 3 assets, Balance at end of period | 15,704 | 15,820 | |||||
Fixed income securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 320,332 | 335,542 | 354,993 | ||||
Level 3 assets, Total gains (losses) included in net income | 7,947 | [1] | 6,897 | [2] | 6,549 | [3] | |
Level 3 assets, Total gains (losses) included in OCI | (7,322) | 2,679 | (6,551) | ||||
Level 3 assets, Transfers into Level 3 | 0 | 40,734 | 9,663 | ||||
Level 3 assets, Transfers out of Level 3 | (19,414) | (39,349) | (4,160) | ||||
Level 3 assets, Purchases | 0 | 1,500 | 6,910 | ||||
Level 3 assets, Sales | (7,256) | (11,955) | (25,682) | ||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | (14,650) | (15,716) | (6,180) | ||||
Level 3 assets, Balance at end of period | 279,637 | 320,332 | 335,542 | ||||
Equity securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 5,000 | ||||||
Level 3 assets, Total gains (losses) included in net income | [1] | 14 | |||||
Level 3 assets, Total gains (losses) included in OCI | (565) | ||||||
Level 3 assets, Transfers into Level 3 | 190 | ||||||
Level 3 assets, Transfers out of Level 3 | 0 | ||||||
Level 3 assets, Purchases | 2,569 | 5,000 | |||||
Level 3 assets, Sales | (273) | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | 0 | ||||||
Level 3 assets, Balance at end of period | 6,935 | 5,000 | |||||
Free-standing derivatives, net | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 554 | 1,076 | 306 | ||||
Level 3 assets, Total gains (losses) included in net income | (178) | [1] | (533) | [2] | 431 | [3] | |
Level 3 assets, Total gains (losses) included in OCI | 0 | ||||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | 0 | ||||||
Level 3 assets, Purchases | 62 | 73 | 339 | ||||
Level 3 assets, Sales | 0 | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | (109) | (62) | |||||
Level 3 assets, Balance at end of period | 329 | 554 | 1,076 | ||||
Other assets | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 84,561 | 27,826 | 34,655 | ||||
Level 3 assets, Total gains (losses) included in net income | (1,787) | [1] | 56,735 | [2] | (6,829) | [3] | |
Level 3 assets, Total gains (losses) included in OCI | 0 | ||||||
Level 3 assets, Transfers into Level 3 | 0 | ||||||
Level 3 assets, Transfers out of Level 3 | 0 | ||||||
Level 3 assets, Purchases | 0 | ||||||
Level 3 assets, Sales | 0 | ||||||
Level 3 assets, Issues | 0 | ||||||
Level 3 assets, Settlements | 0 | ||||||
Level 3 assets, Balance at end of period | 82,774 | 84,561 | 27,826 | ||||
Corporate | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 252,565 | 259,428 | 260,351 | ||||
Level 3 assets, Total gains (losses) included in net income | 7,257 | [2] | 8,509 | [3] | |||
Level 3 assets, Total gains (losses) included in OCI | (741) | (8,214) | |||||
Level 3 assets, Transfers into Level 3 | 40,734 | 9,663 | |||||
Level 3 assets, Transfers out of Level 3 | (34,409) | (4,160) | |||||
Level 3 assets, Purchases | 1,500 | 6,910 | |||||
Level 3 assets, Sales | (7,396) | (10,615) | |||||
Level 3 assets, Settlements | (13,808) | (3,016) | |||||
Level 3 assets, Balance at end of period | 252,565 | 259,428 | |||||
ABS | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 25,345 | 24,799 | 26,970 | ||||
Level 3 assets, Total gains (losses) included in OCI | 546 | (951) | |||||
Level 3 assets, Settlements | (1,220) | ||||||
Level 3 assets, Balance at end of period | 25,345 | 24,799 | |||||
Derivatives embedded in life and annuity contracts | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 liabilities, Balance at beginning of period | (7,391) | (9,197) | (17,877) | ||||
Level 3 liabilities, Total gains (losses) included in net income | (509) | [1] | 1,806 | [2] | 8,680 | [3] | |
Level 3 liabilities, Total gains (losses) included in OCI | 0 | ||||||
Level 3 liabilities, Transfers into Level 3 | 0 | ||||||
Level 3 liabilities, Transfers out of Level 3 | 0 | ||||||
Level 3 liabilities, Purchases | 0 | ||||||
Level 3 liabilities, Sales | 0 | ||||||
Level 3 liabilities, Issues | 0 | ||||||
Level 3 liabilities, Settlements | 0 | ||||||
Level 3 liabilities, Balance at end of period | $ (7,900) | $ (7,391) | $ (9,197) | ||||
[1] | The effect to net income totals $5.5 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(1.7) million in realized capital gains and losses, $7.7 million in net investment income, $283 thousand in interest credited to contractholder funds and $(792) thousand in contract benefits. | ||||||
[2] | The effect to net income totals $64.9 million and is reported in the Statements of Operations and Comprehensive Income as follows: $55.9 million in realized capital gains and losses, $7.2 million in net investment income, $(151) thousand in interest credited to contractholder funds and $2.0 million in contract benefits. | ||||||
[3] | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. |
Schedule of Rollforward of Le65
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Total realized and unrealized gains (losses) included in net income, recurring Level 3 assets and liabilities | $ 5,500 | $ 64,900 | $ 8,800 | |||
Effect to net income included in investment income | 5,996 | [1] | 63,099 | [2] | 151 | [3] |
Effect to net income included in interest credited to contract holder funds | 283 | (151) | (297) | |||
Effect to net income included in contract benefits | (792) | 2,000 | 9,000 | |||
Capital Gain | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Effect to net income included in investment income | (1,700) | 55,900 | (6,600) | |||
Investment Income | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Effect to net income included in investment income | $ 7,700 | $ 7,200 | $ 6,700 | |||
[1] | The effect to net income totals $5.5 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(1.7) million in realized capital gains and losses, $7.7 million in net investment income, $283 thousand in interest credited to contractholder funds and $(792) thousand in contract benefits. | |||||
[2] | The effect to net income totals $64.9 million and is reported in the Statements of Operations and Comprehensive Income as follows: $55.9 million in realized capital gains and losses, $7.2 million in net investment income, $(151) thousand in interest credited to contractholder funds and $2.0 million in contract benefits. | |||||
[3] | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. |
Schedule of Change in Unreali66
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | $ 5,717 | $ 62,906 | $ (1,223) | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | (509) | [1] | 1,806 | [2] | 8,680 | [3] |
Municipal | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 71 | (395) | (1,458) | |||
Corporate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 7,611 | 7,099 | 6,633 | |||
Fixed income securities | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 7,682 | 6,704 | 5,175 | |||
Free-standing derivatives, net | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | (178) | (533) | 431 | |||
Other assets | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | (1,787) | 56,735 | (6,829) | |||
Derivatives embedded in life and annuity contracts | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ||||||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | $ (509) | $ 1,806 | $ 8,680 | |||
[1] | The effect to net income totals $5.5 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(1.7) million in realized capital gains and losses, $7.7 million in net investment income, $283 thousand in interest credited to contractholder funds and $(792) thousand in contract benefits. | |||||
[2] | The effect to net income totals $64.9 million and is reported in the Statements of Operations and Comprehensive Income as follows: $55.9 million in realized capital gains and losses, $7.2 million in net investment income, $(151) thousand in interest credited to contractholder funds and $2.0 million in contract benefits. | |||||
[3] | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. |
Schedule of Carrying Values and
Schedule of Carrying Values and Fair Value Estimates of Financial Instruments not Carried at Fair Value (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Financial assets | ||||
Mortgage loans | $ 614,184 | $ 493,792 | ||
Financial liabilities | ||||
Liability for collateral | 99,668 | 101,095 | $ 62,610 | $ 59,772 |
Carrying value | ||||
Financial assets | ||||
Mortgage loans | 614,814 | 493,792 | ||
Cost method limited partnerships | 64,490 | 52,543 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 2,271,861 | 2,491,461 | ||
Liability for collateral | 99,668 | 101,095 | ||
Fair value | ||||
Financial assets | ||||
Mortgage loans | 634,950 | 526,433 | ||
Cost method limited partnerships | 72,142 | 59,330 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 2,355,015 | 2,615,231 | ||
Liability for collateral | $ 99,668 | $ 101,095 |
Derivative Financial Instrume68
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Cash and securities pledged in the form of margin deposits | $ 60 | |
Limited partnership interests | ||
Derivative [Line Items] | ||
Contractual amounts of off-balance-sheet financial instruments | $ 193,100 | $ 190,700 |
Mortgage loans | ||
Derivative [Line Items] | ||
Contractual amounts of off-balance-sheet financial instruments | $ 9,000 |
Summary of Volume and Fair Valu
Summary of Volume and Fair Value Positions of Derivative Instruments and Reporting Location in Statement of Financial Position (Detail) $ in Thousands | Dec. 31, 2015USD ($)Contract | Dec. 31, 2014USD ($) |
Derivatives, Fair Value [Line Items] | ||
Total derivatives, Notional amount | $ 152,604 | $ 190,534 |
Total derivatives, Number of contracts | Contract | 154 | |
Total derivatives | $ 75,717 | 77,770 |
Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | $ 27,230 | 35,643 |
Total asset derivatives, Number of contracts | Contract | 77 | |
Total asset derivatives, Fair value, net | $ 83,757 | 85,161 |
Asset derivatives, Gross asset | 83,765 | 85,161 |
Asset derivatives, Gross liability | (8) | 0 |
Total liability derivatives, Notional amount | $ 125,374 | 154,891 |
Total liability derivatives, Number of contracts | Contract | 77 | |
Total liability derivatives, Fair value, net | $ (8,040) | (7,391) |
Liability derivatives, Gross asset | 0 | |
Liability derivatives, Gross liability | (8,040) | (7,391) |
Derivatives not designated as accounting hedging instruments | Interest rate cap agreement | Other investments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 22,100 | 28,600 |
Total asset derivatives, Fair value, net | 329 | 554 |
Asset derivatives, Gross asset | 329 | 554 |
Asset derivatives, Gross liability | 0 | 0 |
Derivatives not designated as accounting hedging instruments | Equity And Index Contracts Options | Other investments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | $ 0 | |
Total asset derivatives, Number of contracts | Contract | 77 | |
Total asset derivatives, Fair value, net | $ 592 | |
Asset derivatives, Gross asset | 592 | |
Asset derivatives, Gross liability | 0 | |
Derivatives not designated as accounting hedging instruments | Equity And Index Contracts Options | Other liabilities and accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | $ 0 | |
Total liability derivatives, Number of contracts | Contract | 77 | |
Total liability derivatives, Fair value, net | $ (140) | |
Liability derivatives, Gross asset | 0 | |
Liability derivatives, Gross liability | (140) | |
Derivatives not designated as accounting hedging instruments | Foreign currency forward | Other investments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 5,130 | 7,001 |
Total asset derivatives, Fair value, net | 62 | 46 |
Asset derivatives, Gross asset | 70 | 46 |
Asset derivatives, Gross liability | (8) | 0 |
Derivatives not designated as accounting hedging instruments | Structured settlement annuity reinsurance agreement | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 0 | |
Total asset derivatives, Fair value, net | 82,774 | 84,561 |
Asset derivatives, Gross asset | 82,774 | 84,561 |
Asset derivatives, Gross liability | 0 | 0 |
Derivatives not designated as accounting hedging instruments | Guaranteed accumulation benefits | Contractholder funds | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 87,221 | 115,611 |
Total liability derivatives, Fair value, net | (6,769) | (5,966) |
Liability derivatives, Gross asset | 0 | |
Liability derivatives, Gross liability | (6,769) | (5,966) |
Derivatives not designated as accounting hedging instruments | Withdrawal benefit | Contractholder funds | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 20,774 | 25,955 |
Total liability derivatives, Fair value, net | (668) | (679) |
Liability derivatives, Gross asset | 0 | |
Liability derivatives, Gross liability | (668) | (679) |
Derivatives not designated as accounting hedging instruments | Equity-indexed options in life product contracts | Contractholder funds | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 17,379 | 13,325 |
Total liability derivatives, Fair value, net | (463) | (746) |
Liability derivatives, Gross asset | 0 | |
Liability derivatives, Gross liability | $ (463) | (746) |
Derivatives not designated as accounting hedging instruments | Conversion options | Fixed income securities | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 42 | |
Asset derivatives, Gross liability | $ 0 |
Schedule of Gross and Net Amoun
Schedule of Gross and Net Amount for Company's OTC Derivatives Subject to Enforceable Master Netting Arrangements (Detail) - OTC derivatives $ in Thousands | Dec. 31, 2015USD ($) |
Offsetting Assets [Line Items] | |
Gross amount | $ 399 |
Derivative Asset,Counter-party netting | (8) |
Derivative asset, offset under cash collateral (received) pledged | 0 |
Derivative Asset, Net amount on balance sheet | 391 |
Derivative Asset, Securities collateral (received) pledged | 0 |
Derivative Asset, Net amount | 391 |
Gross amount | (8) |
Liability derivatives, Gross asset | 8 |
Derivative liability offsets under cash collateral pledged | 0 |
Net amount on balance sheet | 0 |
Securities collateral (received) pledged | 0 |
Net amount | $ 0 |
Summary of Gains and Losses fro
Summary of Gains and Losses from Valuation and Settlements For Derivatives Not Designated As Hedges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | $ (5,587) | $ 54,530 | $ (1,269) |
Interest rate contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (178) | (533) | 431 |
Equity and index contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (155) | ||
Foreign currency forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 427 | (48) | |
Embedded derivative financial instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (509) | 1,806 | 8,597 |
Structured settlement annuity reinsurance agreement | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (5,172) | 53,305 | (10,297) |
Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (4,923) | 52,724 | (9,949) |
Realized capital gains and losses | Interest rate contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (178) | (533) | 431 |
Realized capital gains and losses | Equity and index contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Realized capital gains and losses | Foreign currency forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 427 | (48) | |
Realized capital gains and losses | Embedded derivative financial instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | (83) |
Realized capital gains and losses | Structured settlement annuity reinsurance agreement | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (5,172) | 53,305 | (10,297) |
Contract benefits | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (792) | 1,957 | 8,977 |
Contract benefits | Interest rate contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Contract benefits | Equity and index contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Contract benefits | Foreign currency forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Contract benefits | Embedded derivative financial instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (792) | 1,957 | 8,977 |
Contract benefits | Structured settlement annuity reinsurance agreement | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 128 | (151) | (297) |
Interest credited to contractholder funds | Interest rate contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Interest credited to contractholder funds | Equity and index contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (155) | ||
Interest credited to contractholder funds | Foreign currency forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | ||
Interest credited to contractholder funds | Embedded derivative financial instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 283 | $ (151) | $ (297) |
Interest credited to contractholder funds | Structured settlement annuity reinsurance agreement | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | $ 0 |
Summary of Counterparty Credit
Summary of Counterparty Credit Exposure by Counterparty Credit Rating (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Entity | Dec. 31, 2014USD ($)Entity | ||
Counterparty Credit Concentration Risk [Line Items] | |||
Number of counter -parties | Entity | [1] | 6 | 5 |
Notional Amount | [1],[2] | $ 27,230 | $ 35,601 |
Credit exposure | [1],[2] | 391 | 600 |
Exposure, net of collateral | [1],[2] | $ 391 | $ 600 |
A+ | |||
Counterparty Credit Concentration Risk [Line Items] | |||
Number of counter -parties | Entity | [1] | 1 | 1 |
Notional Amount | [1],[2] | $ 11,800 | $ 15,200 |
Credit exposure | [1],[2] | 197 | 310 |
Exposure, net of collateral | [1],[2] | $ 197 | $ 310 |
A | |||
Counterparty Credit Concentration Risk [Line Items] | |||
Number of counter -parties | Entity | [1] | 3 | 2 |
Notional Amount | [1],[2] | $ 9,765 | $ 4,500 |
Credit exposure | [1],[2] | 125 | 110 |
Exposure, net of collateral | [1],[2] | $ 125 | $ 110 |
BBB+ | |||
Counterparty Credit Concentration Risk [Line Items] | |||
Number of counter -parties | Entity | [1] | 2 | 1 |
Notional Amount | [1],[2] | $ 5,665 | $ 10,901 |
Credit exposure | [1],[2] | 69 | 158 |
Exposure, net of collateral | [1],[2] | $ 69 | $ 158 |
BBB | |||
Counterparty Credit Concentration Risk [Line Items] | |||
Number of counter -parties | Entity | [1] | 0 | 1 |
Notional Amount | [1],[2] | $ 0 | $ 5,000 |
Credit exposure | [1],[2] | 0 | 22 |
Exposure, net of collateral | [1],[2] | $ 0 | $ 22 |
[1] | Rating is the lower of S&P or Moody's ratings. | ||
[2] | Only OTC derivatives with a net positive fair value are included for each counterparty. |
Schedule of Reserve for Life-Co
Schedule of Reserve for Life-Contingent Contract Benefits (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | $ 2,095,316 | $ 2,280,356 |
Structured settlement annuities | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 1,807,651 | 2,010,807 |
Other immediate fixed annuities | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 59,389 | 54,834 |
Traditional life insurance | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 215,216 | 201,661 |
Accident and health insurance | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 11,207 | 11,209 |
Other | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | $ 1,853 | $ 1,845 |
Schedule of Key Assumptions Use
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits (Detail) | 12 Months Ended | |
Dec. 31, 2015 | ||
Structured settlement annuities | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Mortality | U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy | |
Interest rate description | Interest rate assumptions range from 2.9% to 9.0% | |
Interest rate, low end | 2.90% | |
Interest rate, high end | 9.00% | |
Estimation method | Present value of contractually specified future benefits | |
Other immediate fixed annuities | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Mortality | 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table | |
Estimation method | Present value of expected future benefits based on historical experience | |
Interest rate description | Interest rate assumptions range from 0% to 11.5% | |
Interest rate, low end | 0.00% | |
Interest rate, high end | 11.50% | |
Traditional life insurance | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Mortality | Actual company experience plus loading | |
Estimation method | Net level premium reserve method using the Company's withdrawal experience rates; includes reserves for unpaid claims | |
Interest rate description | Interest rate assumptions range from 3.0% to 8.0% | |
Interest rate, low end | 3.00% | |
Interest rate, high end | 8.00% | |
Accident and health insurance | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Mortality | Actual company experience plus loading | |
Estimation method | Unearned premium; additional contract reserves for mortality risk and unpaid claims | |
Interest rate description | Interest rate assumptions range from 3.5% to 6.0% | |
Interest rate, low end | 3.50% | |
Interest rate, high end | 6.00% | |
Guaranteed death benefits | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Mortality | Annuity 2012 mortality table with internal modifications | [1] |
Estimation method | Projected benefit ratio applied to cumulative assessments | [1] |
Interest rate description | Interest rate assumptions range from 2.1% to 5.8% | [1] |
Interest rate, low end | 2.10% | [1] |
Interest rate, high end | 5.80% | [1] |
[1] | In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively "Prudential"). |
Reserve for Life-Contingent C75
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Insurance [Line Items] | |||
Premium deficiency reserve | $ 44,407 | [1] | $ 257,252 |
Variable annuities | |||
Insurance [Line Items] | |||
Account balances of separate accounts with guarantees, invested in equity, fixed income and balanced mutual funds | 264,500 | 322,100 | |
Account balances of separate accounts with guarantees, invested in money market mutual funds | $ 36,800 | $ 50,600 | |
[1] | The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. |
Schedule of Contractholder Fund
Schedule of Contractholder Funds (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | $ 3,185,887 | $ 3,402,594 | $ 3,670,557 | $ 3,958,440 |
Interest-sensitive life insurance | ||||
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | 724,317 | 718,126 | ||
Investment contracts | Fixed annuities | ||||
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | 2,434,757 | 2,660,522 | ||
Investment contracts | Other investment contracts | ||||
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | $ 26,813 | $ 23,946 |
Schedule of Contract Provisions
Schedule of Contract Provisions Related to Contractholder Funds (Detail) | 12 Months Ended | |
Dec. 31, 2015 | ||
Other investment contracts | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate description | Interest rates used in establishing reserves range from 1.7% to 10.3% | [1] |
Interest rate, low end | 1.70% | [1] |
Interest rate, high end | 10.30% | [1] |
Withdrawal/surrender charges | Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract | [1] |
Fixed annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate description | Interest rates credited range from 0% to 9.0% for immediate annuities and 1.0% to 5.3% for other fixed annuities | |
Withdrawal/surrender charges | Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 12.5% of fixed annuities are subject to market value adjustment for discretionary withdrawals | |
Term of withdrawal/surrender charges | 10 years | |
Percentage of fixed annuities subject to market value adjustment for discretionary withdrawals | 12.50% | |
Fixed annuities | Immediate annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate, low end | 0.00% | |
Interest rate, high end | 9.00% | |
Fixed annuities | Other fixed annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate, low end | 1.00% | |
Interest rate, high end | 5.30% | |
Interest-sensitive life insurance | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate description | Interest rates credited range from 0% to 9.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.7% to 5.1% for all other products | |
Withdrawal/surrender charges | Either a percentage of account balance or dollar amount grading off generally over 20 years | |
Term of withdrawal/surrender charges | 20 years | |
Interest-sensitive life insurance | Equity-indexed life | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate, low end | 0.00% | |
Interest rate, high end | 9.00% | |
Interest-sensitive life insurance | All other products | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Interest rate, low end | 2.70% | |
Interest rate, high end | 5.10% | |
[1] | In 2006, the Company disposed its variable annuity business through a reinsurance agreement with Prudential. |
Schedule of Contractholder Fu78
Schedule of Contractholder Funds Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Insurance [Line Items] | |||
Balance, beginning of year | $ 3,402,594 | $ 3,670,557 | $ 3,958,440 |
Deposits | 103,041 | 105,626 | 109,282 |
Interest credited | 108,730 | 118,957 | 129,687 |
Benefits | (137,834) | (145,889) | (152,822) |
Surrenders and partial withdrawals | (211,171) | (279,835) | (284,755) |
Contract charges | (72,575) | (71,332) | (70,856) |
Net transfers from separate accounts | 252 | 143 | 153 |
Other adjustments | (7,150) | 4,367 | (18,572) |
Balance, end of year | $ 3,185,887 | $ 3,402,594 | $ 3,670,557 |
Summary of Variable Annuity Con
Summary of Variable Annuity Contracts with Guarantees (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Guaranteed death benefits | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | $ 301.3 | $ 372.7 | |
Net amount at risk | [1] | $ 15.3 | $ 10.1 |
Average attained age of contractholders | 66 years | 65 years | |
Liability for guarantees related to income benefits | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | $ 22.9 | $ 26.2 | |
Net amount at risk | [2] | $ 2.5 | $ 1.9 |
Weighted average waiting period until annuitization or guarantee date | 0 years | 0 years | |
Withdrawal benefit | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | $ 19.6 | $ 24.9 | |
Net amount at risk | [3] | 0.3 | 0.2 |
Guaranteed accumulation benefits | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | 83.4 | 112.8 | |
Net amount at risk | [4] | $ 2.4 | $ 1.7 |
Weighted average waiting period until annuitization or guarantee date | 3 years | 3 years | |
[1] | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | ||
[2] | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | ||
[3] | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | ||
[4] | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. |
Summary of Liabilities for Guar
Summary of Liabilities for Guarantees (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | $ 25,673 | [1] | $ 22,562 | [2] |
Less reinsurance recoverables | 10,541 | 12,615 | ||
Net balance | 15,132 | 9,947 | ||
Incurred guarantee benefits | 2,669 | 5,185 | ||
Paid guarantee benefits | 0 | 0 | ||
Net change | 2,669 | 5,185 | ||
Net balance | 17,801 | 15,132 | ||
Plus reinsurance recoverables | 10,747 | 10,541 | ||
Gross balance | 28,548 | [3] | 25,673 | [1] |
Liability for guarantees related to death benefits and interest-sensitive life products | ||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | 16,853 | [1] | 11,619 | [2] |
Less reinsurance recoverables | 1,725 | 1,680 | ||
Net balance | 15,128 | 9,939 | ||
Incurred guarantee benefits | 2,669 | 5,189 | ||
Paid guarantee benefits | 0 | 0 | ||
Net change | 2,669 | 5,189 | ||
Net balance | 17,797 | 15,128 | ||
Plus reinsurance recoverables | 1,735 | 1,725 | ||
Gross balance | 19,532 | [3] | 16,853 | [1] |
Liability for guarantees related to income benefits | ||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | 2,175 | [1] | 2,341 | [2] |
Less reinsurance recoverables | 2,171 | 2,333 | ||
Net balance | 4 | 8 | ||
Incurred guarantee benefits | 0 | (4) | ||
Paid guarantee benefits | 0 | 0 | ||
Net change | 0 | (4) | ||
Net balance | 4 | 4 | ||
Plus reinsurance recoverables | 1,575 | 2,171 | ||
Gross balance | 1,579 | [3] | 2,175 | [1] |
Liability for guarantees related to accumulation and withdrawal benefits | ||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | 6,645 | [1] | 8,602 | [2] |
Less reinsurance recoverables | 6,645 | 8,602 | ||
Net balance | 0 | 0 | ||
Incurred guarantee benefits | 0 | 0 | ||
Paid guarantee benefits | 0 | 0 | ||
Net change | 0 | 0 | ||
Net balance | 0 | 0 | ||
Plus reinsurance recoverables | 7,437 | 6,645 | ||
Gross balance | $ 7,437 | [3] | $ 6,645 | [1] |
[1] | Included in the total liability balance as of December 31, 2014 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.2 million, variable annuity accumulation benefits of $6.0 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $15.1 million. | |||
[2] | Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $10.0 million. | |||
[3] | Included in the total liability balance as of December 31, 2015 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $1.6 million, variable annuity accumulation benefits of $6.8 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $17.8 million. |
Summary of Liabilities for Gu81
Summary of Liabilities for Guarantees (Parenthetical) (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | $ 28,548 | [1] | $ 25,673 | [2] | $ 22,562 | [3] |
Liability for guarantees related to income benefits | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 1,579 | [1] | 2,175 | [2] | 2,341 | [3] |
Variable annuities | Liability for guarantees related to income benefits | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 1,600 | 2,200 | 2,300 | |||
Variable annuities | Guaranteed death benefits | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 1,700 | 1,700 | 1,700 | |||
Variable annuities | Guaranteed accumulation benefits | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 6,800 | 6,000 | 7,900 | |||
Variable annuities | Withdrawal benefit | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 700 | 700 | 700 | |||
Variable annuities | Other guarantees | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | $ 17,800 | $ 15,100 | $ 10,000 | |||
[1] | Included in the total liability balance as of December 31, 2015 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $1.6 million, variable annuity accumulation benefits of $6.8 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $17.8 million. | |||||
[2] | Included in the total liability balance as of December 31, 2014 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.2 million, variable annuity accumulation benefits of $6.0 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $15.1 million. | |||||
[3] | Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $0.7 million and other guarantees of $10.0 million. |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Detail) $ / Person in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2013$ / Person | Dec. 31, 2015USD ($)$ / Person | Dec. 31, 2014USD ($)$ / Person | Dec. 31, 2013USD ($) | |
Effects of Reinsurance [Line Items] | ||||
Maximum percentage of mortality risk ceded | 90.00% | 90.00% | ||
Maximum coverage per life before ceded | $ / Person | 250 | 2,000 | 2,000 | |
Reinsurance recoverables | $ 253,669 | $ 254,264 | ||
Interest credited to contract holder funds ceded | 4,545 | 5,158 | $ 5,468 | |
Gross life insurance in force | 40,610,000 | |||
Life insurance in force ceded to affiliated reinsurers | 572,700 | |||
Life insurance in force ceded to unaffiliated reinsurers | 9,010,000 | |||
Ceded premium related to structured settlement annuities | 12,362 | 12,782 | 15,510 | |
Allstate Life Insurance Company | ||||
Effects of Reinsurance [Line Items] | ||||
Ceded premium related to structured settlement annuities | 3,400 | 3,400 | 3,500 | |
Prudential | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables | 185,400 | 189,900 | ||
Premiums and contract charges ceded | 7,100 | 8,200 | 9,000 | |
Contract benefits ceded | 1,400 | 1,400 | 11,000 | |
Interest credited to contract holder funds ceded | 4,500 | 5,200 | 5,500 | |
Operating costs and expenses ceded | 1,100 | 1,300 | $ 1,500 | |
Triton Insurance Company | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables | $ 114 | $ 22 |
Schedule of Effects of Reinsura
Schedule of Effects of Reinsurance on Premiums and Contract Charges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effects of Reinsurance [Line Items] | |||
Direct premiums and contract charges | $ 158,836 | $ 155,439 | $ 155,193 |
Total premiums and contract charges | 138,166 | 132,516 | 128,927 |
Non-affiliate | |||
Effects of Reinsurance [Line Items] | |||
Assumed premiums and contract charges | 741 | 830 | 835 |
Ceded premiums and contract charges | (20,032) | (21,515) | (23,140) |
Affiliate | |||
Effects of Reinsurance [Line Items] | |||
Ceded premiums and contract charges | $ (1,379) | $ (2,238) | $ (3,961) |
Schedule of Effects of Reinsu84
Schedule of Effects of Reinsurance on Contract Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effects of Reinsurance [Line Items] | |||
Direct contract benefits | $ 226,424 | $ 227,796 | $ 213,437 |
Contract benefits, net of reinsurance | 203,594 | 213,279 | 203,717 |
Non-affiliate | |||
Effects of Reinsurance [Line Items] | |||
Assumed contract benefits | 1,088 | 381 | 1,008 |
Ceded contract benefits | (15,920) | (6,535) | (4,288) |
Affiliate | |||
Effects of Reinsurance [Line Items] | |||
Ceded contract benefits | $ (7,998) | $ (8,363) | $ (6,440) |
Schedule of Effect of Reinsuran
Schedule of Effect of Reinsurance on Interest Credited to Contractholder Funds (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effects of Reinsurance [Line Items] | |||
Direct interest credited to contractholder funds | $ 113,166 | $ 123,747 | $ 135,354 |
Ceded interest credited to contractholder funds | (4,545) | (5,158) | (5,468) |
Interest credited to contractholder funds, net of reinsurance | 108,637 | 118,604 | 129,911 |
Non-affiliate | |||
Effects of Reinsurance [Line Items] | |||
Assumed interest credited to contractholder funds | 16 | 15 | 25 |
Ceded interest credited to contractholder funds | $ (4,545) | $ (5,158) | $ (5,468) |
Schedule of Deferred Policy Acq
Schedule of Deferred Policy Acquisition Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of year | $ 135,282 | $ 129,836 | $ 130,201 |
Acquisition costs deferred | 15,611 | 17,240 | 19,553 |
Amortization charged to income | (16,603) | (13,213) | (29,783) |
Effect of unrealized gains and losses | 6,899 | 1,419 | 9,865 |
Balance, end of year | $ 141,189 | $ 135,282 | $ 129,836 |
Schedule of Deferred Sales Indu
Schedule of Deferred Sales Inducement Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Deferred Sales Inducements | |||
Balance, beginning of year | $ 2,059 | $ 1,737 | $ 1,717 |
Sales inducements deferred | 285 | 242 | 381 |
Amortization charged to income | (192) | 112 | (604) |
Effect of unrealized gains and losses | 197 | (32) | 243 |
Balance, end of year | $ 2,349 | $ 2,059 | $ 1,737 |
Guarantees and Contingent Lia88
Guarantees and Contingent Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Guarantor Obligations [Line Items] | ||
Obligations of insolvent insurance companies | $ 750 | $ 742 |
Premium tax offsets | $ 3,600 | $ 3,600 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Income Taxes [Line Items] | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Unrecognized tax interest accrued | 0 | 0 | 0 |
Unrecognized tax penalties accrued | 0 | 0 | 0 |
Income taxes paid | $ 53,300,000 | $ 21,100,000 | $ 11,700,000 |
2011- 2012 | Minimum | |||
Schedule Of Income Taxes [Line Items] | |||
Income tax examination, year under examination | 2,013 | ||
2011- 2012 | Maximum | |||
Schedule Of Income Taxes [Line Items] | |||
Income tax examination, year under examination | 2,014 |
Components of Deferred Income T
Components of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred assets | ||
Unrealized foreign currency translation adjustments | $ 991 | $ 359 |
Accrued liabilities | 41 | 41 |
Other assets | 8 | 115 |
Total deferred assets | 1,040 | 515 |
Deferred liabilities | ||
Unrealized net capital gains | (84,963) | (91,691) |
Difference in tax bases of investments | (63,767) | (64,725) |
Life and annuity reserves | (36,021) | (25,871) |
DAC | (29,090) | (28,375) |
Other liabilities | (2,703) | (2,802) |
Total deferred liabilities | (216,544) | (213,464) |
Net deferred liability | $ (215,504) | $ (212,949) |
Components of Income Tax Expens
Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current | $ 31,062 | $ 38,729 | $ 6,463 |
Deferred | 9,915 | 30,260 | 15,998 |
Total income tax expense | $ 40,977 | $ 68,989 | $ 22,461 |
Reconciliation of Statutory Fed
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Rate Reconciliation [Line Items] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes | 1.50% | 0.80% | 2.30% |
Other | (0.70%) | (0.40%) | (1.50%) |
Effective income tax rate | 35.80% | 35.40% | 35.80% |
Statutory Financial Informati93
Statutory Financial Information - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income (loss) | $ (63.9) | $ 31.3 | $ 25.9 |
Statutory capital and surplus | 507.6 | $ 562.1 | |
Deficit position used to determine payment of dividends | 341.6 | ||
Authorized control level RBC | 71.7 | ||
Scenario, Adjustment [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | $ 602.3 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Pension plan costs | $ 804,000 | $ 832,000 | $ 5,300,000 |
Cost of Allstate Plan | $ 811,000 | $ 998,000 | $ 773,000 |
Schedule of Components of Other
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pre-tax | |||
Unrealized net holding gains (losses) arising during the period, net of related offsets | $ 13,084 | $ 92,340 | $ (112,511) |
Less: reclassification adjustment of realized capital gains and losses | 32,308 | 64,197 | 27,975 |
Unrealized net capital gains and losses | (19,224) | 28,143 | (140,486) |
Unrealized foreign currency translation adjustments | (1,803) | (1,436) | 1,312 |
Other comprehensive income | (21,027) | 26,707 | (139,174) |
Tax | |||
Unrealized net holding gains arising during the period, net of related offsets | (4,580) | (32,319) | 39,379 |
Less: reclassification adjustment of realized capital gains and losses | (11,308) | (22,469) | (9,791) |
Unrealized net capital gains and losses | 6,728 | (9,850) | 49,170 |
Unrealized foreign currency translation adjustments | 631 | 502 | (459) |
Other comprehensive income | 7,359 | (9,348) | 48,711 |
After-tax | |||
Unrealized net holding gains (losses) arising during the period, net of related offsets | 8,504 | 60,021 | (73,132) |
Less: reclassification adjustment of realized capital gains and losses | 21,000 | 41,728 | 18,184 |
Unrealized net capital gains and losses | (12,496) | 18,293 | (91,316) |
Unrealized foreign currency translation adjustments | (1,172) | (934) | 853 |
Other comprehensive income | $ (13,668) | $ 17,359 | $ (90,463) |
Schedule I - Summary of Investm
Schedule I - Summary of Investments Other Than Investments in Related Parties (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | $ 5,949,294 |
Amount at which shown in the Balance Sheet | 6,242,048 |
U.S. government and agencies | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 142,923 |
Fair value | 166,697 |
Amount at which shown in the Balance Sheet | 166,697 |
Municipal | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 624,806 |
Fair value | 726,571 |
Amount at which shown in the Balance Sheet | 726,571 |
Foreign government | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 191,388 |
Fair value | 216,751 |
Amount at which shown in the Balance Sheet | 216,751 |
Public utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 608,884 |
Fair value | 672,790 |
Amount at which shown in the Balance Sheet | 672,790 |
All other corporate bonds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 2,884,089 |
Fair value | 2,960,666 |
Amount at which shown in the Balance Sheet | 2,960,666 |
Residential mortgage-backed securities ("RMBS") | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 55,036 |
Fair value | 57,709 |
Amount at which shown in the Balance Sheet | 57,709 |
Commercial mortgage-backed securities ("CMBS") | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 86,704 |
Fair value | 87,210 |
Amount at which shown in the Balance Sheet | 87,210 |
ABS | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 92,434 |
Fair value | 92,620 |
Amount at which shown in the Balance Sheet | 92,620 |
Redeemable preferred stock | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 8,887 |
Fair value | 10,189 |
Amount at which shown in the Balance Sheet | 10,189 |
Fixed income securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 4,695,151 |
Fair value | 4,991,203 |
Amount at which shown in the Balance Sheet | 4,991,203 |
Public Utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 6,211 |
Fair value | 5,765 |
Amount at which shown in the Balance Sheet | 5,765 |
Banks, Trust and Insurance Companies | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 40,824 |
Fair value | 39,861 |
Amount at which shown in the Balance Sheet | 39,861 |
Industrial, miscellaneous and all other | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 156,644 |
Fair value | 155,309 |
Amount at which shown in the Balance Sheet | 155,309 |
Nonredeemable preferred stocks | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 5,443 |
Fair value | 4,887 |
Amount at which shown in the Balance Sheet | 4,887 |
Equity securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 209,122 |
Fair value | 205,822 |
Amount at which shown in the Balance Sheet | 205,822 |
Mortgage loans | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 614,184 |
Fair value | 634,950 |
Amount at which shown in the Balance Sheet | 614,184 |
Policy loans | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 40,462 |
Amount at which shown in the Balance Sheet | 40,462 |
Derivative instruments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 983 |
Fair value | 983 |
Amount at which shown in the Balance Sheet | 983 |
Limited partnership interests | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 281,115 |
Amount at which shown in the Balance Sheet | 281,115 |
Short-term investments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 108,277 |
Fair value | 108,279 |
Amount at which shown in the Balance Sheet | $ 108,279 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Life insurance in force, Gross amount | $ 40,610,000 | |||
Premiums and contract charges, Gross amount | 158,836 | $ 155,439 | $ 155,193 | |
Premiums and contract charges, Ceded to other companies | 21,411 | 23,753 | 27,101 | |
Premiums and contract charges, Assumed from other companies | 741 | 830 | 835 | |
Premiums and contract charges, Net amount | $ 138,166 | $ 132,516 | $ 128,927 | |
Premiums and contract charges, Percentage of amount assumed to net | 0.50% | 0.60% | 0.60% | |
Life insurance | ||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Premiums and contract charges, Gross amount | $ 142,994 | $ 139,430 | $ 140,834 | |
Premiums and contract charges, Ceded to other companies | 20,251 | 22,352 | 25,564 | |
Premiums and contract charges, Assumed from other companies | 741 | 830 | 835 | |
Premiums and contract charges, Net amount | $ 123,484 | $ 117,908 | $ 116,105 | |
Premiums and contract charges, Percentage of amount assumed to net | 0.60% | 0.70% | 0.70% | |
Accident and health insurance | ||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Premiums and contract charges, Gross amount | $ 15,842 | $ 16,009 | $ 14,359 | |
Premiums and contract charges, Ceded to other companies | 1,160 | 1,401 | 1,537 | |
Premiums and contract charges, Assumed from other companies | 0 | |||
Premiums and contract charges, Net amount | $ 14,682 | 14,608 | 12,822 | |
Premiums and contract charges, Percentage of amount assumed to net | 0.00% | |||
Life Insurances In Force | ||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Life insurance in force, Gross amount | $ 40,103,353 | 38,743,278 | 37,835,153 | |
Life insurance in force, Ceded to other companies | [1] | 9,581,863 | 9,927,519 | 10,303,425 |
Life insurance in force, Assumed from other companies | 511,360 | 550,942 | 578,980 | |
Life insurance in force, Net amount | $ 31,032,850 | $ 29,366,701 | $ 28,110,708 | |
Life insurance in force, Percentage of amount assumed to net | 1.60% | 1.90% | 2.10% | |
[1] | No reinsurance or coinsurance income was netted against premiums ceded in 2015, 2014 or 2013. |
Schedule V - Valuation Allowanc
Schedule V - Valuation Allowances and Qualifying Accounts (Detail) - Allowance for estimated losses on mortgage loans - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance as of beginning of period | $ 0 | $ 1,832 | |
Additions charged to costs and expenses | 0 | (1,110) | $ 1,832 |
Other additions | 0 | ||
Deductions | 0 | 722 | |
Balance as of end of period | $ 0 | $ 0 | $ 1,832 |