Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | HORACE MANN EDUCATORS CORP /DE/ | |
Entity Central Index Key | 850141 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | HMN | |
Entity Common Stock, Shares Outstanding | 41,141,003 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Investments | ||||
Fixed maturities, available for sale, at fair value (amortized cost 2015, $6,479,270; 2014, $6,375,237) | $7,065,799 | $6,893,090 | ||
Equity securities, available for sale, at fair value (cost 2015, $99,860; 2014, $99,904) | 105,066 | 110,655 | ||
Short-term and other investments | 450,347 | 399,722 | ||
Total investments | 7,621,212 | 7,403,467 | ||
Cash | 43,931 | 11,675 | ||
Deferred policy acquisition costs | 211,522 | 215,082 | ||
Goodwill | 47,396 | 47,396 | ||
Other assets | 285,118 | 277,350 | ||
Separate Account (variable annuity) assets | 1,865,240 | [1] | 1,813,557 | [1] |
Total assets | 10,074,419 | 9,768,527 | ||
Policy liabilities | ||||
Fixed annuity contract liabilities | 3,847,694 | 3,774,457 | ||
Interest-sensitive life contract liabilities | 794,600 | 792,039 | ||
Unpaid claims and claim expenses | 340,103 | 325,784 | ||
Future policy benefits | 239,225 | 235,775 | ||
Unearned premiums | 217,066 | 223,413 | ||
Total policy liabilities | 5,438,688 | 5,351,468 | ||
Other policyholder funds | 607,622 | 606,738 | ||
Other liabilities | 515,143 | 422,362 | ||
Short-term debt | 38,000 | 38,000 | ||
Long-term debt, current and noncurrent | 199,955 | 199,939 | ||
Separate Account (variable annuity) liabilities | 1,865,240 | 1,813,557 | ||
Total liabilities | 8,664,648 | 8,432,064 | ||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | ||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2015, 64,454,178; 2014, 64,245,048 | 64 | 64 | ||
Additional paid-in capital | 435,079 | 422,232 | ||
Retained earnings | 1,088,917 | 1,065,318 | ||
Accumulated other comprehensive income (loss), net of taxes: | ||||
Net unrealized gains on fixed maturities and equity securities | 335,132 | [2],[3] | 297,554 | [2],[3] |
Net funded status of pension and other postretirement benefit obligations | -12,953 | [2] | -12,953 | [2] |
Treasury stock, at cost, 2015, 23,331,930 shares; 2014, 23,308,430 shares | -436,468 | -435,752 | ||
Total shareholders’ equity | 1,409,771 | 1,336,463 | ||
Total liabilities and shareholders’ equity | $10,074,419 | $9,768,527 | ||
[1] | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. | |||
[2] | All amounts are net of tax. | |||
[3] | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Fixed maturities, available for sale, amortized cost | $6,479,270 | $6,375,237 |
Equity securities, available for sale, cost | $99,860 | $99,904 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 64,454,178 | 64,245,048 |
Treasury stock, shares | 23,331,930 | 23,308,430 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Insurance premiums and contract charges earned | $179,739 | $175,403 |
Net investment income | 83,313 | 83,044 |
Net realized investment gains | 6,068 | 1,699 |
Other income | 999 | 1,119 |
Total revenues | 270,119 | 261,265 |
Benefits, losses and expenses | ||
Benefits, claims and settlement expenses | 114,019 | 111,988 |
Interest credited | 44,537 | 43,087 |
Policy acquisition expenses amortized | 23,684 | 23,033 |
Operating expenses | 35,928 | 39,947 |
Interest expense | 3,552 | 3,546 |
Total benefits, losses and expenses | 221,720 | 221,601 |
Income before income taxes | 48,399 | 39,664 |
Income tax expense | 14,124 | 11,298 |
Net income | 34,275 | 28,366 |
Net income per share | ||
Basic | $0.82 | $0.69 |
Diluted | $0.81 | $0.67 |
Weighted average number of shares and equivalent shares (in thousands) | ||
Basic | 41,950 | 41,180 |
Diluted | 42,300 | 42,259 |
Net realized investment gains (losses) | ||
Total other-than-temporary impairment losses on securities | -2,289 | 0 |
Portion of losses recognized in other comprehensive income | 0 | 0 |
Net other-than-temporary impairment losses on securities recognized in earnings | -2,289 | 0 |
Realized gains, net | 8,357 | 1,699 |
Total | $6,068 | $1,699 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Comprehensive income | ||||
Net income | $34,275 | $28,366 | ||
Other comprehensive income, net of taxes: | ||||
Change in net unrealized gains and losses on fixed maturities and equity securities | 37,578 | [1],[2] | 77,408 | [1],[2] |
Change in net funded status of pension and other postretirement benefit obligations | 0 | [1] | 0 | [1] |
Other comprehensive income | 37,578 | [1] | 77,408 | [1] |
Total | $71,853 | $105,774 | ||
[1] | All amounts are net of tax. | |||
[2] | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (USD $) | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss), net of taxes | Treasury stock, at cost | |
In Thousands | |||||||
Beginning balance at Dec. 31, 2013 | $64 | $407,056 | $1,000,312 | $122,214 | ($430,341) | ||
Options exercised, 2015, 43,298 shares; 2014, 196,840 shares | 0 | ||||||
Conversion of common stock units, 2015, 8,293 shares; 2014, 10,834 shares | 0 | ||||||
Conversion of restricted stock units, 2015, 157,539 shares; 2014, 65,730 shares | 0 | ||||||
Options exercised and conversion of common stock units and restricted stock units | 6,065 | ||||||
Share-based compensation expense | 340 | ||||||
Net income | 28,366 | 28,366 | |||||
Cash dividends, 2015, $0.25 per share; 2014, $0.23 per share | -9,784 | ||||||
Change in net unrealized gains and losses on fixed maturities and equity securities | 77,408 | [1],[2] | 77,408 | ||||
Change in net funded status of pension and other postretirement benefit obligations | 0 | [1] | 0 | ||||
Acquisition of shares, 2015, 23,500 shares; 2014, 136,976 shares | -3,867 | ||||||
Ending balance at Mar. 31, 2014 | 1,197,833 | 64 | 413,461 | 1,018,894 | 199,622 | -434,208 | |
Beginning balance at Dec. 31, 2014 | 1,336,463 | 64 | 422,232 | 1,065,318 | 284,601 | -435,752 | |
Options exercised, 2015, 43,298 shares; 2014, 196,840 shares | 0 | ||||||
Conversion of common stock units, 2015, 8,293 shares; 2014, 10,834 shares | 0 | ||||||
Conversion of restricted stock units, 2015, 157,539 shares; 2014, 65,730 shares | 0 | ||||||
Options exercised and conversion of common stock units and restricted stock units | 10,882 | ||||||
Share-based compensation expense | 1,965 | ||||||
Net income | 34,275 | 34,275 | |||||
Cash dividends, 2015, $0.25 per share; 2014, $0.23 per share | -10,676 | ||||||
Change in net unrealized gains and losses on fixed maturities and equity securities | 37,578 | [1],[2] | 37,578 | ||||
Change in net funded status of pension and other postretirement benefit obligations | 0 | [1] | 0 | ||||
Acquisition of shares, 2015, 23,500 shares; 2014, 136,976 shares | -716 | ||||||
Ending balance at Mar. 31, 2015 | $1,409,771 | $64 | $435,079 | $1,088,917 | $322,179 | ($436,468) | |
[1] | All amounts are net of tax. | ||||||
[2] | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Common stock, par value beginning balance | $0.00 | $0.00 |
Conversion of common stock units, shares | 8,293 | 10,834 |
Conversion of restricted stock units, shares | 157,539 | 65,730 |
Cash dividends, per share | $0.25 | $0.23 |
Treasury stock, beginning balance, shares | 23,308,430 | 23,117,554 |
Treasury stock, acquisition of shares | 23,500 | 136,976 |
Treasury stock, ending balance, shares | 23,331,930 | 23,254,530 |
Options exercised, shares | 43,298 | 196,840 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows - operating activities | ||
Premiums collected | $168,558 | $167,568 |
Policyholder benefits paid | -112,404 | -114,113 |
Policy acquisition and other operating expenses paid | -73,560 | -76,090 |
Investment income collected | 82,486 | 77,459 |
Interest expense paid | -165 | -275 |
Other | 2,387 | -1,464 |
Net cash provided by operating activities | 67,302 | 53,085 |
Fixed maturities | ||
Purchases | -284,293 | -321,571 |
Sales | 81,320 | 52,940 |
Maturities, paydowns, calls and redemptions | 166,847 | 66,605 |
Purchase of other invested assets | -12,472 | 0 |
Net cash provided by (used in) short-term and other investments | -32,073 | 130,778 |
Net cash used in investing activities | -80,671 | -71,248 |
Cash flows - financing activities | ||
Dividends paid to shareholders | -10,676 | -9,784 |
Acquisition of treasury stock | -716 | -3,867 |
Exercise of stock options | 884 | 3,746 |
Annuity contracts: variable, fixed and FHLB funding agreements | ||
Deposits | 141,962 | 100,305 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | -91,449 | -78,746 |
Life policy accounts | ||
Deposits | 122 | 106 |
Withdrawals and surrenders | -1,044 | -983 |
Cash received related to repurchase agreements | 0 | 23,384 |
Change in bank overdrafts | 6,542 | 728 |
Net cash provided by financing activities | 45,625 | 34,889 |
Net increase in cash | 32,256 | 16,726 |
Cash at beginning of period | 11,675 | 18,189 |
Cash at end of period | $43,931 | $34,915 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Basis of Presentation | Note 1 - Basis of Presentation | |||||||||||||||
The accompanying unaudited consolidated financial statements of Horace Mann Educators Corporation (“HMEC”; and together with its subsidiaries, the “Company” or “Horace Mann”) have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”), specifically Regulation S-X and the instructions to Form 10-Q. Certain information and note disclosures which are normally included in annual financial statements prepared in accordance with GAAP but are not required for interim reporting purposes have been omitted. The Company believes that these consolidated financial statements contain all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to present fairly the Company’s consolidated financial position as of March 31, 2015 and the consolidated results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the three months ended March 31, 2015 and 2014. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||
The subsidiaries of HMEC market and underwrite personal lines of property and casualty (primarily personal lines automobile and homeowners) insurance, retirement annuities (primarily tax-qualified products) and life insurance, primarily to K-12 teachers, administrators and other employees of public schools and their families. HMEC’s principal operating subsidiaries are Horace Mann Life Insurance Company, Horace Mann Insurance Company, Teachers Insurance Company, Horace Mann Property & Casualty Insurance Company and Horace Mann Lloyds. | ||||||||||||||||
The Company has evaluated subsequent events through the date these consolidated financial statements were issued. | ||||||||||||||||
These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. | ||||||||||||||||
The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year. | ||||||||||||||||
In the three months ended March 31, 2015, the Company recorded a reduction in incentive compensation expense due to an immaterial out-of-period correction of an error related to the valuation of restricted stock units. The $3,012 after tax adjustment increased net income for each of the segments as follows: property and casualty, $2,056; annuity, $519; and life, $437. | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Accumulated other comprehensive income (loss) represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, accumulated other comprehensive income (loss) includes the after tax change in net unrealized gains and losses on fixed maturities and equity securities and the after tax change in net funded status of pension and other postretirement benefit obligations for the period as shown in the Consolidated Statement of Changes in Shareholders’ Equity. The following table reconciles these components. | ||||||||||||||||
Unrealized Gains | ||||||||||||||||
and Losses on | ||||||||||||||||
Fixed Maturities | ||||||||||||||||
and Equity | Defined | |||||||||||||||
Securities (1)(2) | Benefit Plans (1) | Total (1) | ||||||||||||||
Beginning balance, January 1, 2015 | $ | 297,554 | $ | (12,953 | ) | $ | 284,601 | |||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 41,370 | - | 41,370 | |||||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income (loss) | (3,792 | ) | - | (3,792 | ) | |||||||||||
Net current period other | ||||||||||||||||
comprehensive income (loss) | 37,578 | - | 37,578 | |||||||||||||
Ending balance, March 31, 2015 | $ | 335,132 | $ | (12,953 | ) | $ | 322,179 | |||||||||
Beginning balance, January 1, 2014 | $ | 133,990 | $ | (11,776 | ) | $ | 122,214 | |||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 78,512 | - | 78,512 | |||||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income (loss) | (1,104 | ) | - | (1,104 | ) | |||||||||||
Net current period other | ||||||||||||||||
comprehensive income (loss) | 77,408 | - | 77,408 | |||||||||||||
Ending balance, March 31, 2014 | $ | 211,398 | $ | (11,776 | ) | $ | 199,622 | |||||||||
_____________________________________ | ||||||||||||||||
-1 | All amounts are net of tax. | |||||||||||||||
-2 | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||
Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is located in “Note 2 — Investments — Unrealized Gains and Losses on Fixed Maturities and Equity Securities”. | ||||||||||||||||
Investments
Investments | 3 Months Ended | |||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||
Investments | Note 2 - Investments | |||||||||||||||||||||||||||||
The Company’s investment portfolio includes free-standing derivative financial instruments (currently over the counter (“OTC”) index options contracts) to economically hedge risk associated with its fixed indexed annuity product’s contingent liabilities. The Company’s fixed indexed annuity product includes embedded derivative features that are discussed in “Note 1 — Summary of Significant Accounting Policies — Policy Liabilities for Fixed Indexed Annuities” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company's investment portfolio includes no other free-standing derivative financial instruments (futures, forwards, swaps, option contracts or other financial instruments with similar characteristics), and there were no other embedded derivative features related to the Company’s insurance products during the three months ended March 31, 2015 and 2014. | ||||||||||||||||||||||||||||||
Fixed Maturities and Equity Securities | ||||||||||||||||||||||||||||||
The Company’s investment portfolio is comprised primarily of fixed maturity securities (“fixed maturities”) and equity securities. The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (loss) (“AOCI”) of all fixed maturities and equity securities in the portfolio were as follows: | ||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | OTTI in | ||||||||||||||||||||||||||
Cost/Cost | Gains | Losses | Value | AOCI (1) | ||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations (2): | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 481,801 | $ | 59,872 | $ | 313 | $ | 541,360 | $ | - | ||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||
U.S. Treasury securities | 544,912 | 32,538 | 981 | 576,469 | - | |||||||||||||||||||||||||
Municipal bonds | 1,489,255 | 201,160 | 5,329 | 1,685,086 | - | |||||||||||||||||||||||||
Foreign government bonds | 57,042 | 8,069 | 30 | 65,081 | - | |||||||||||||||||||||||||
Corporate bonds | 2,582,763 | 266,816 | 8,517 | 2,841,062 | - | |||||||||||||||||||||||||
Other mortgage-backed securities | 1,323,497 | 35,303 | 2,059 | 1,356,741 | 2,879 | |||||||||||||||||||||||||
Totals | $ | 6,479,270 | $ | 603,758 | $ | 17,229 | $ | 7,065,799 | $ | 2,879 | ||||||||||||||||||||
Equity securities (3) | $ | 99,860 | $ | 10,205 | $ | 4,999 | $ | 105,066 | $ | - | ||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations (2): | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 484,561 | $ | 52,555 | $ | 1,390 | $ | 535,726 | $ | - | ||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||
U.S. Treasury securities | 512,596 | 28,652 | 3,049 | 538,199 | - | |||||||||||||||||||||||||
Municipal bonds | 1,462,717 | 189,533 | 4,428 | 1,647,822 | - | |||||||||||||||||||||||||
Foreign government bonds | 52,552 | 6,984 | - | 59,536 | - | |||||||||||||||||||||||||
Corporate bonds | 2,608,633 | 237,372 | 11,256 | 2,834,749 | - | |||||||||||||||||||||||||
Other mortgage-backed securities | 1,254,178 | 28,772 | 5,892 | 1,277,058 | 2,879 | |||||||||||||||||||||||||
Totals | $ | 6,375,237 | $ | 543,868 | $ | 26,015 | $ | 6,893,090 | $ | 2,879 | ||||||||||||||||||||
Equity securities (3) | $ | 99,904 | $ | 14,159 | $ | 3,408 | $ | 110,655 | $ | - | ||||||||||||||||||||
-1 | Related to securities for which an unrealized loss was bifurcated to distinguish the credit related portion and the portion driven by other market factors. Represents the amount of other-than-temporary impairment losses in AOCI which was not included in earnings; amounts also include unrealized gains/(losses) on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date. | |||||||||||||||||||||||||||||
-2 | Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $265,066 and $302,222; Federal Home Loan Mortgage Corporation (“FHLMC”) of $444,117 and $432,432; and Government National Mortgage Association (“GNMA”) of $137,856 and $137,867 as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||||||||||||||
-3 | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. | |||||||||||||||||||||||||||||
Compared to December 31, 2014, the increase in net unrealized gains at March 31, 2015 was due to lower yields on U.S. Treasury securities and slightly narrower credit spreads across most asset classes, the combination of which resulted in an increase in net unrealized gains for virtually all classes of the Company’s fixed maturity securities holdings. | ||||||||||||||||||||||||||||||
The following table presents the fair value and gross unrealized losses of fixed maturities and equity securities in an unrealized loss position at March 31, 2015 and December 31, 2014, respectively. The Company views the decrease in value of all of the securities with unrealized losses at March 31, 2015 — which was driven largely by changes in interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. For fixed maturity securities, management does not have the intent to sell the securities and it is not more likely than not the Company will be required to sell the securities before the anticipated recovery of the amortized cost bases, and the present value of future cash flows exceeds the amortized cost bases. In addition, management expects to recover the entire cost bases of the fixed maturity securities. For equity securities, the Company has the ability and intent to hold the securities for the recovery of cost and recovery of cost is expected within a reasonable period of time. Therefore, no impairment of these securities was recorded at March 31, 2015. | ||||||||||||||||||||||||||||||
12 Months or Less | More than 12 Months | Total | ||||||||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 13,144 | $ | 160 | $ | 1,629 | $ | 153 | $ | 14,773 | $ | 313 | ||||||||||||||||||
Other | 111,579 | 935 | 1,952 | 46 | 113,531 | 981 | ||||||||||||||||||||||||
Municipal bonds | 39,258 | 622 | 24,774 | 4,707 | 64,032 | 5,329 | ||||||||||||||||||||||||
Foreign government bonds | 3,970 | 30 | - | - | 3,970 | 30 | ||||||||||||||||||||||||
Corporate bonds | 112,988 | 5,166 | 38,711 | 3,351 | 151,699 | 8,517 | ||||||||||||||||||||||||
Other mortgage-backed securities | 248,866 | 1,540 | 35,547 | 519 | 284,413 | 2,059 | ||||||||||||||||||||||||
Total fixed | ||||||||||||||||||||||||||||||
maturity securities | 529,805 | 8,453 | 102,613 | 8,776 | 632,418 | 17,229 | ||||||||||||||||||||||||
Equity securities (1) | 21,718 | 4,354 | 6,830 | 645 | 28,548 | 4,999 | ||||||||||||||||||||||||
Combined totals | $ | 551,523 | $ | 12,807 | $ | 109,443 | $ | 9,421 | $ | 660,966 | $ | 22,228 | ||||||||||||||||||
Number of positions with a | ||||||||||||||||||||||||||||||
gross unrealized loss | 203 | 48 | 251 | |||||||||||||||||||||||||||
Fair value as a percentage of | ||||||||||||||||||||||||||||||
total fixed maturities and | ||||||||||||||||||||||||||||||
equity securities fair value | 7.7 | % | 1.5 | % | 9.2 | % | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 2 | $ | - | $ | 39,809 | $ | 1,390 | $ | 39,811 | $ | 1,390 | ||||||||||||||||||
Other | 10,317 | 34 | 117,615 | 3,015 | 127,932 | 3,049 | ||||||||||||||||||||||||
Municipal bonds | 31,821 | 200 | 59,715 | 4,228 | 91,536 | 4,428 | ||||||||||||||||||||||||
Foreign government bonds | - | - | - | - | - | - | ||||||||||||||||||||||||
Corporate bonds | 213,612 | 6,883 | 76,099 | 4,373 | 289,711 | 11,256 | ||||||||||||||||||||||||
Other mortgage-backed securities | 477,877 | 4,797 | 88,663 | 1,095 | 566,540 | 5,892 | ||||||||||||||||||||||||
Total fixed | ||||||||||||||||||||||||||||||
maturity securities | 733,629 | 11,914 | 381,901 | 14,101 | 1,115,530 | 26,015 | ||||||||||||||||||||||||
Equity securities (1) | 12,955 | 2,568 | 6,635 | 840 | 19,590 | 3,408 | ||||||||||||||||||||||||
Combined totals | $ | 746,584 | $ | 14,482 | $ | 388,536 | $ | 14,941 | $ | 1,135,120 | $ | 29,423 | ||||||||||||||||||
Number of positions with a | ||||||||||||||||||||||||||||||
gross unrealized loss | 234 | 112 | 346 | |||||||||||||||||||||||||||
Fair value as a percentage of | ||||||||||||||||||||||||||||||
total fixed maturities and | ||||||||||||||||||||||||||||||
equity securities fair value | 10.7 | % | 5.5 | % | 16.2 | % | ||||||||||||||||||||||||
-1 | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. | |||||||||||||||||||||||||||||
Fixed maturities and equity securities with an investment grade rating represented 41% of the gross unrealized loss as of March 31, 2015. With respect to fixed income securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis. | ||||||||||||||||||||||||||||||
Credit Losses | ||||||||||||||||||||||||||||||
The following table summarizes the cumulative amounts related to the Company’s credit loss component of the other-than-temporary impairment losses on fixed maturity securities held as of March 31, 2015 and 2014 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of the other-than-temporary impairment losses were recognized in other comprehensive income (loss): | ||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||
Cumulative credit loss (1) | ||||||||||||||||||||||||||||||
Beginning of period | $ | 2,877 | $ | 4,097 | ||||||||||||||||||||||||||
New credit losses | - | - | ||||||||||||||||||||||||||||
Losses related to securities sold or paid down during the period | - | - | ||||||||||||||||||||||||||||
End of period | $ | 2,877 | $ | 4,097 | ||||||||||||||||||||||||||
-1 | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. | |||||||||||||||||||||||||||||
Maturities/Sales of Fixed Maturities and Equity Securities | ||||||||||||||||||||||||||||||
The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers’ utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. | ||||||||||||||||||||||||||||||
Percent of Total Fair Value | 31-Mar-15 | |||||||||||||||||||||||||||||
March 31, | December 31, | Fair | Amortized | |||||||||||||||||||||||||||
2015 | 2014 | Value | Cost | |||||||||||||||||||||||||||
Estimated expected maturity: | ||||||||||||||||||||||||||||||
Due in 1 year or less | 4 | % | 4 | % | $ | 285,424 | $ | 261,731 | ||||||||||||||||||||||
Due after 1 year through 5 years | 23.8 | 23.4 | 1,682,730 | 1,543,047 | ||||||||||||||||||||||||||
Due after 5 years through 10 years | 39.6 | 40.1 | 2,797,801 | 2,565,557 | ||||||||||||||||||||||||||
Due after 10 years | ||||||||||||||||||||||||||||||
through 20 years | 20.2 | 20.1 | 1,426,306 | 1,307,909 | ||||||||||||||||||||||||||
Due after 20 years | 12.4 | 12.4 | 873,538 | 801,026 | ||||||||||||||||||||||||||
Total | 100 | % | 100 | % | $ | 7,065,799 | $ | 6,479,270 | ||||||||||||||||||||||
Average option-adjusted duration, in years | 5.7 | 5.8 | ||||||||||||||||||||||||||||
Proceeds received from sales of fixed maturities and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were: | ||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
Proceeds received | $ | 81,320 | $ | 52,940 | ||||||||||||||||||||||||||
Gross gains realized | 1,654 | 1,527 | ||||||||||||||||||||||||||||
Gross losses realized | (463 | ) | (675 | ) | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||
Proceeds received | $ | 13,969 | $ | 3,648 | ||||||||||||||||||||||||||
Gross gains realized | 4,602 | 479 | ||||||||||||||||||||||||||||
Gross losses realized | (10 | ) | (117 | ) | ||||||||||||||||||||||||||
Unrealized Gains and Losses on Fixed Maturities and Equity Securities | ||||||||||||||||||||||||||||||
Net unrealized gains and losses are computed as the difference between fair value and amortized cost for fixed maturities or cost for equity securities. The following table reconciles the net unrealized investment gains and losses, net of tax, included in accumulated other comprehensive income (loss), before the impact on deferred policy acquisition costs: | ||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | ||||||||||||||||||||||||||||||
on fixed maturity securities, net of tax | ||||||||||||||||||||||||||||||
Beginning of period | $ | 336,604 | $ | 146,489 | ||||||||||||||||||||||||||
Change in unrealized investment gains and losses | 45,486 | 93,225 | ||||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | ||||||||||||||||||||||||||||||
losses to net income | (846 | ) | (860 | ) | ||||||||||||||||||||||||||
End of period | $ | 381,244 | $ | 238,854 | ||||||||||||||||||||||||||
Net unrealized investment gains (losses) | ||||||||||||||||||||||||||||||
on equity securities, net of tax | ||||||||||||||||||||||||||||||
Beginning of period | $ | 6,988 | $ | 4,618 | ||||||||||||||||||||||||||
Change in unrealized investment gains and losses | (658 | ) | 1,313 | |||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | ||||||||||||||||||||||||||||||
losses to net income | (2,946 | ) | (236 | ) | ||||||||||||||||||||||||||
End of period | $ | 3,384 | $ | 5,695 | ||||||||||||||||||||||||||
Offsetting of Assets and Liabilities | ||||||||||||||||||||||||||||||
The Company’s derivative instruments (call options) are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. | ||||||||||||||||||||||||||||||
The following table presents the instruments that were subject to a master netting arrangement for the Company. | ||||||||||||||||||||||||||||||
Net Amounts | ||||||||||||||||||||||||||||||
of Assets/ | ||||||||||||||||||||||||||||||
Gross | Liabilities | Gross Amounts Not Offset | ||||||||||||||||||||||||||||
Amounts | Presented | in the Consolidated | ||||||||||||||||||||||||||||
Offset in the | in the | Balance Sheet | ||||||||||||||||||||||||||||
Consolidated | Consolidated | Cash | ||||||||||||||||||||||||||||
Gross | Balance | Balance | Financial | Collateral | Net | |||||||||||||||||||||||||
Amounts | Sheet | Sheet | Instruments | Received | Amount | |||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||
Free-standing derivatives | $2,412 | $ - | $2,412 | $ - | $2,177 | $235 | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||
Free-standing derivatives | 2,458 | - | 2,458 | - | 1,955 | 503 | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||
At March 31, 2015 and December 31, 2014, securities with a fair value of $18,512 and $18,361, respectively, were on deposit with governmental agencies as required by law in various states in which the insurance subsidiaries of HMEC conduct business. In addition, at March 31, 2015 and December 31, 2014, securities with a fair value of $539,787 and $539,235, respectively, were on deposit with the Federal Home Loan Bank of Chicago (“FHLB”) as collateral for amounts subject to funding agreements which were equal to $500,000 at both of the respective dates. The deposited securities are included in fixed maturities on the Company’s Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | |||||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Note 3 - Fair Value of Financial Instruments | |||||||||||||||||||||||||||||||||
The Company is required under GAAP to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company’s insurance contracts other than annuity contracts are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. | ||||||||||||||||||||||||||||||||||
Information regarding the three-level hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at a point in time is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, specifically in “Note 3 — Fair Value of Financial Instruments”. | ||||||||||||||||||||||||||||||||||
Financial Instruments Measured and Carried at Fair Value | ||||||||||||||||||||||||||||||||||
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At March 31, 2015, these Level 3 invested assets comprised 2.1% of the Company’s total investment portfolio fair value. | ||||||||||||||||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 541,360 | $ | 541,360 | $ | - | $ | 541,360 | $ | - | ||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 576,469 | 576,469 | 17,995 | 558,474 | - | |||||||||||||||||||||||||||||
Municipal bonds | 1,685,086 | 1,685,086 | - | 1,671,201 | 13,885 | |||||||||||||||||||||||||||||
Foreign government bonds | 65,081 | 65,081 | - | 65,081 | - | |||||||||||||||||||||||||||||
Corporate bonds | 2,841,062 | 2,841,062 | 10,369 | 2,758,415 | 72,278 | |||||||||||||||||||||||||||||
Other mortgage-backed securities | 1,356,741 | 1,356,741 | - | 1,284,147 | 72,594 | |||||||||||||||||||||||||||||
Total fixed maturities | 7,065,799 | 7,065,799 | 28,364 | 6,878,678 | 158,757 | |||||||||||||||||||||||||||||
Equity securities | 105,066 | 105,066 | 90,347 | 14,713 | 6 | |||||||||||||||||||||||||||||
Short-term investments | 181,004 | 181,004 | 181,004 | - | - | |||||||||||||||||||||||||||||
Other investments | 12,412 | 12,412 | - | 12,412 | - | |||||||||||||||||||||||||||||
Totals | 7,364,281 | 7,364,281 | 299,715 | 6,905,803 | 158,763 | |||||||||||||||||||||||||||||
Separate Account | ||||||||||||||||||||||||||||||||||
(variable annuity) assets (1) | 1,865,240 | 1,865,240 | 1,865,240 | - | - | |||||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Other policyholder funds, | ||||||||||||||||||||||||||||||||||
embedded derivatives | 22,040 | 22,040 | - | - | 22,040 | |||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 535,726 | $ | 535,726 | $ | - | $ | 535,726 | $ | - | ||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 538,199 | 538,199 | 17,857 | 520,342 | - | |||||||||||||||||||||||||||||
Municipal bonds | 1,647,822 | 1,647,822 | - | 1,634,194 | 13,628 | |||||||||||||||||||||||||||||
Foreign government bonds | 59,536 | 59,536 | - | 59,536 | - | |||||||||||||||||||||||||||||
Corporate bonds | 2,834,749 | 2,834,749 | 10,524 | 2,749,508 | 74,717 | |||||||||||||||||||||||||||||
Other mortgage-backed securities | 1,277,058 | 1,277,058 | - | 1,194,109 | 82,949 | |||||||||||||||||||||||||||||
Total fixed maturities | 6,893,090 | 6,893,090 | 28,381 | 6,693,415 | 171,294 | |||||||||||||||||||||||||||||
Equity securities | 110,655 | 110,655 | 92,140 | 18,509 | 6 | |||||||||||||||||||||||||||||
Short-term investments | 142,039 | 142,039 | 142,039 | - | - | |||||||||||||||||||||||||||||
Other investments | 12,458 | 12,458 | - | 12,458 | - | |||||||||||||||||||||||||||||
Totals | 7,158,242 | 7,158,242 | 262,560 | 6,724,382 | 171,300 | |||||||||||||||||||||||||||||
Separate Account | ||||||||||||||||||||||||||||||||||
(variable annuity) assets (1) | 1,813,557 | 1,813,557 | 1,813,557 | - | - | |||||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Other policyholder funds, | ||||||||||||||||||||||||||||||||||
embedded derivatives | 20,049 | 20,049 | - | - | 20,049 | |||||||||||||||||||||||||||||
___________________________ | ||||||||||||||||||||||||||||||||||
-1 | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. | |||||||||||||||||||||||||||||||||
The Company did not have any transfers between Levels 1 and 2 during the three months ended March 31, 2015. The following table presents reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. | ||||||||||||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||||||||||||
Financial Assets | Liabilities(1) | |||||||||||||||||||||||||||||||||
Municipal | Corporate | Other | Total | Equity | ||||||||||||||||||||||||||||||
Bonds | Bonds | Mortgage- | Fixed | Securities | Total | |||||||||||||||||||||||||||||
Backed | Maturities | |||||||||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||||||||
Beginning balance, January 1, 2015 | $ | 13,628 | $ | 74,717 | $ | 82,949 | $ | 171,294 | $ | 6 | $ | 171,300 | $ | 20,049 | ||||||||||||||||||||
Transfers into Level 3 (2) | - | 1,895 | 461 | 2,356 | - | 2,356 | - | |||||||||||||||||||||||||||
Transfers out of Level 3 (2) | - | - | (9,664 | ) | (9,664 | ) | - | (9,664 | ) | - | ||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||||||||||||||||
included in net income | - | - | - | - | - | - | (439 | ) | ||||||||||||||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||||||||||||||||
included in other | ||||||||||||||||||||||||||||||||||
comprehensive income | 380 | 352 | 3 | 735 | - | 735 | - | |||||||||||||||||||||||||||
Purchases | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Issuances | - | - | - | - | - | - | 2,964 | |||||||||||||||||||||||||||
Sales | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Settlements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Paydowns, maturities | ||||||||||||||||||||||||||||||||||
and distributions | (123 | ) | (4,686 | ) | (1,155 | ) | (5,964 | ) | - | (5,964 | ) | (534 | ) | |||||||||||||||||||||
Ending balance, March 31, 2015 | $ | 13,885 | $ | 72,278 | $ | 72,594 | $ | 158,757 | $ | 6 | $ | 158,763 | $ | 22,040 | ||||||||||||||||||||
Beginning balance, January 1, 2014 | $ | 2,694 | $ | 60,826 | $ | 46,009 | $ | 109,529 | $ | 6 | $ | 109,535 | $ | - | ||||||||||||||||||||
Transfers into Level 3 (2) | 10,055 | - | 7,109 | 17,164 | - | 17,164 | - | |||||||||||||||||||||||||||
Transfers out of Level 3 (2) | - | - | (519 | ) | (519 | ) | - | (519 | ) | - | ||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||||||||||||||||
included in net income | - | - | - | - | - | - | 12 | |||||||||||||||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||||||||||||||||
included in other | ||||||||||||||||||||||||||||||||||
comprehensive income | 98 | 1,014 | 184 | 1,296 | - | 1,296 | - | |||||||||||||||||||||||||||
Purchases | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Issuances | - | - | - | - | - | - | 2,735 | |||||||||||||||||||||||||||
Sales | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Settlements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Paydowns, maturities | ||||||||||||||||||||||||||||||||||
and distributions | (68 | ) | (1,636 | ) | (232 | ) | (1,936 | ) | - | (1,936 | ) | - | ||||||||||||||||||||||
Ending balance, March 31, 2014 | $ | 12,779 | $ | 60,204 | $ | 52,551 | $ | 125,534 | $ | 6 | $ | 125,540 | $ | 2,747 | ||||||||||||||||||||
________________________________ | ||||||||||||||||||||||||||||||||||
-1 | Represents embedded derivatives, all related to the Company’s fixed indexed annuity (“FIA”) products, reported in Other Policyholder Funds in the Company’s Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||
-2 | Transfers into and out of Level 3 during the three months ended March 31, 2015 and 2014 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. | |||||||||||||||||||||||||||||||||
At March 31, 2015 and 2014, there were no realized gains or losses included in earnings that were attributable to changes in the fair value of Level 3 assets still held. For the three months ended March 31, 2015 and 2014, realized gains/(losses) of $439 and $(12), respectively, were included in earnings that were attributable to the changes in the fair value of Level 3 liabilities (embedded derivatives) still held. | ||||||||||||||||||||||||||||||||||
The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets classified as Level 3 are subject to the control processes as described in “Note 3 — Fair Value of Financial Instruments — Investments” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Generally, valuation for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as fixed maturities. | ||||||||||||||||||||||||||||||||||
The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturities and equity securities included in Level 3 generally relate to interest rate spreads, illiquidity premiums and default rates. Significant spread widening in isolation will adversely impact the overall valuation, while significant spread tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations. | ||||||||||||||||||||||||||||||||||
Financial Instruments Not Carried at Fair Value; Disclosure Required | ||||||||||||||||||||||||||||||||||
The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. | ||||||||||||||||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Other investments | $ | 145,574 | $ | 149,965 | $ | - | $ | - | $ | 149,965 | ||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Fixed annuity contract liabilities | 3,847,694 | 3,762,743 | - | - | 3,762,743 | |||||||||||||||||||||||||||||
Policyholder account balances on | ||||||||||||||||||||||||||||||||||
interest-sensitive life contracts | 77,051 | 81,079 | - | - | 81,079 | |||||||||||||||||||||||||||||
Other policyholder funds | 585,582 | 585,582 | - | 500,111 | 85,471 | |||||||||||||||||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||||||||||||||||
Long-term debt | 199,955 | 207,315 | 207,315 | - | - | |||||||||||||||||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||||||||||||||||
agreement obligations | - | - | - | - | - | |||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Other investments | $ | 145,409 | $ | 149,792 | $ | - | $ | - | $ | 149,792 | ||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Fixed annuity contract liabilities | 3,774,457 | 3,691,123 | - | - | 3,691,123 | |||||||||||||||||||||||||||||
Policyholder account balances on | ||||||||||||||||||||||||||||||||||
interest-sensitive life contracts | 77,415 | 81,461 | - | - | 81,461 | |||||||||||||||||||||||||||||
Other policyholder funds | 586,689 | 586,689 | - | 500,080 | 86,609 | |||||||||||||||||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||||||||||||||||
Long-term debt | 199,939 | 209,495 | 209,495 | - | - | |||||||||||||||||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||||||||||||||||
agreement obligations | - | - | - | - | - | |||||||||||||||||||||||||||||
Debt
Debt | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Debt | Note 4 - Debt | ||||||||||
Indebtedness outstanding was as follows: | |||||||||||
March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||
Short-term debt: | |||||||||||
Bank Credit Facility, expires July 30, 2019 | $ | 38,000 | $ | 38,000 | |||||||
Long-term debt, current and noncurrent (1): | |||||||||||
6.05% Senior Notes, due June 15, 2015. Aggregate | |||||||||||
principal amount of $75,000 less unaccrued discount | |||||||||||
of $5 and $11 (6.1% imputed rate) | 74,995 | 74,989 | |||||||||
6.85% Senior Notes, due April 15, 2016. Aggregate | |||||||||||
principal amount of $125,000 less unaccrued discount | |||||||||||
of $40 and $50 (6.9% imputed rate) | 124,960 | 124,950 | |||||||||
Total | $ | 237,955 | $ | 237,939 | |||||||
____________________________________ | |||||||||||
-1 | The Company designates debt obligations as “long-term” based on maturity date at issuance. | ||||||||||
The Credit Agreement with Financial Institutions (“Bank Credit Facility”), 6.05% Senior Notes due 2015 (“Senior Notes due 2015”) and 6.85% Senior Notes due 2016 (“Senior Notes due 2016”) are described in “Notes to Consolidated Financial Statements — Note 5 — Debt” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. | |||||||||||
Universal Shelf Registration | |||||||||||
To provide additional capital management flexibility, the Company filed a “universal shelf” registration on Form S-3 with the SEC on March 12, 2015. The registration statement, which registered the offer and sale by the Company from time to time of an indeterminate amount of various securities, which may include debt securities, common stock, preferred stock, depositary shares, warrants, delayed delivery contracts and/or units that include any of these securities, was automatically effective on March 12, 2015. Unless withdrawn by the Company earlier, this registration statement will remain effective through March 12, 2018. No securities associated with the registration statement have been issued as of the date of this Quarterly Report on Form 10-Q. In addition to the Form S-3 entry to the capital markets, HMEC met the requirements of a “well-known seasoned issuer”, as defined by the SEC, as of December 31, 2014. | |||||||||||
Reinsurance
Reinsurance | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||
Reinsurance | Note 5 - Reinsurance | |||||||||||||||||||||
The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, claims incurred but not yet reported and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: | ||||||||||||||||||||||
Ceded to | Assumed | |||||||||||||||||||||
Gross | Other | from Other | Net | |||||||||||||||||||
Amount | Companies | Companies | Amount | |||||||||||||||||||
Three months ended March 31, 2015 | ||||||||||||||||||||||
Premiums written and contract deposits | $ | 311,047 | $ | 6,124 | $ | 812 | $ | 305,735 | ||||||||||||||
Premiums and contract charges earned | 185,196 | 6,315 | 858 | 179,739 | ||||||||||||||||||
Benefits, claims and settlement expenses | 115,840 | 2,570 | 749 | 114,019 | ||||||||||||||||||
Three months ended March 31, 2014 | ||||||||||||||||||||||
Premiums written and contract deposits | $ | 266,437 | $ | 6,631 | $ | 469 | $ | 260,275 | ||||||||||||||
Premiums and contract charges earned | 181,733 | 6,893 | 563 | 175,403 | ||||||||||||||||||
Benefits, claims and settlement expenses | 114,877 | 3,445 | 556 | 111,988 | ||||||||||||||||||
Commitments
Commitments | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Commitments | Note 6 - Commitments | |||||||||||
Investment Commitments | ||||||||||||
From time to time, the Company has outstanding commitments to purchase investments and/or commitments to lend funds under bridge loans. Unfunded commitments were as follows: | ||||||||||||
March 31, | December 31, | |||||||||||
2015 | 2014 | |||||||||||
Outstanding commitments to: | ||||||||||||
Purchase investments | $ | 29,856 | $ | 39,689 | ||||||||
Lend funds under bridge loans | 10,381 | 10,567 | ||||||||||
Total | $ | 40,237 | $ | 50,256 | ||||||||
Segment_Information
Segment Information | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Segment Reporting [Abstract] | ||||||||||
Segment Information | Note 7 - Segment Information | |||||||||
The Company conducts and manages its business through four segments. The three operating segments, representing the major lines of insurance business, are: property and casualty insurance, primarily personal lines automobile and homeowners products; retirement annuity products, primarily tax-qualified fixed and variable deposits; and life insurance. The Company does not allocate the impact of corporate-level transactions to the insurance segments, consistent with the basis for management’s evaluation of the results of those segments, but classifies those items in the fourth segment, corporate and other. In addition to ongoing transactions such as corporate debt service, realized investment gains and losses and certain public company expenses, such items have also included corporate debt retirement costs/gains, when applicable. Summarized financial information for these segments is as follows: | ||||||||||
Three Months Ended | ||||||||||
March 31, | ||||||||||
2015 | 2014 | |||||||||
Insurance premiums and contract charges earned | ||||||||||
Property and casualty | $ | 146,749 | $ | 143,892 | ||||||
Annuity | 6,223 | 5,924 | ||||||||
Life | 26,767 | 25,587 | ||||||||
Total | $ | 179,739 | $ | 175,403 | ||||||
Net investment income | ||||||||||
Property and casualty | $ | 9,433 | $ | 9,285 | ||||||
Annuity | 56,392 | 55,857 | ||||||||
Life | 17,708 | 18,134 | ||||||||
Corporate and other | 6 | 2 | ||||||||
Intersegment eliminations | (226 | ) | (234 | ) | ||||||
Total | $ | 83,313 | $ | 83,044 | ||||||
Net income (loss) | ||||||||||
Property and casualty | $ | 17,623 | $ | 14,027 | ||||||
Annuity | 12,510 | 12,239 | ||||||||
Life | 3,385 | 3,882 | ||||||||
Corporate and other | 757 | (1,782 | ) | |||||||
Total | $ | 34,275 | $ | 28,366 | ||||||
March 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
Assets | ||||||||||
Property and casualty | $ | 1,144,361 | $ | 1,107,962 | ||||||
Annuity | 6,898,018 | 6,683,473 | ||||||||
Life | 1,918,822 | 1,858,150 | ||||||||
Corporate and other | 140,578 | 155,678 | ||||||||
Intersegment eliminations | (27,360 | ) | (36,736 | ) | ||||||
Total | $ | 10,074,419 | $ | 9,768,527 | ||||||
Derivative_Instruments
Derivative Instruments | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Derivative Instruments | NOTE 8 - Derivative Instruments | ||||||||||||||||||||||||
In February 2014, the Company began offering fixed indexed annuity (“FIA”) products, which are deferred fixed annuities that guarantee the return of principal to the contractholder and credit interest based on a percentage of the gain in a specified market index. When fixed indexed annuity deposits are received, a portion of the deposit is used to purchase derivatives consisting of call options on the applicable market indices to fund the index credits due to fixed indexed annuity contractholders. For the Company, substantially all such call options are one-year options purchased to match the funding requirements of the underlying contracts. The call options are carried at fair value with the change in fair value included in Net Realized Investment Gains (Losses), a component of revenues, in the Consolidated Statements of Operations. The change in fair value of derivatives includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open positions. On the respective anniversary dates of the indexed deposits, the index used to compute the annual index credit is reset and new one-year call options are purchased to fund the next annual index credit. The cost of these purchases is managed through the terms of the fixed indexed annuities, which permit changes to index return caps, participation rates and/or asset fees, subject to guaranteed minimums on each contract’s anniversary date. By adjusting the index return caps, participation rates or asset fees, crediting rates generally can be managed except in cases where the contractual features would prevent further modifications. | |||||||||||||||||||||||||
The Company carries all derivative instruments as assets or liabilities in the Consolidated Balance Sheets at fair value. The Company elected to not use hedge accounting for derivative transactions related to the FIA products. As a result, the Company records the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in the fair value of the derivatives recognized immediately in the Consolidated Statements of Operations. The fair values of derivative instruments, including derivative instruments embedded in fixed indexed annuity contracts, presented in the Consolidated Balance Sheets were as follows: | |||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Derivative instruments, included in Short-term | |||||||||||||||||||||||||
and Other Investments | $ | 2,412 | $ | 2,458 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Fixed indexed annuities - embedded derivatives, | |||||||||||||||||||||||||
included in Other Policyholder Funds | 22,040 | 20,049 | |||||||||||||||||||||||
The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: | |||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Change in fair value of derivatives (1): | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Net realized investment gains (losses) | $ | (205 | ) | $ | 14 | ||||||||||||||||||||
Change in fair value of embedded derivatives: | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Net realized investment gains (losses) | 439 | (12 | ) | ||||||||||||||||||||||
_________________________________ | |||||||||||||||||||||||||
-1 | Includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open options. | ||||||||||||||||||||||||
The Company’s strategy attempts to mitigate any potential risk of loss under these agreements through a regular monitoring process, which evaluates the program's effectiveness. The Company is exposed to risk of loss in the event of nonperformance by the counterparties and, accordingly, option contracts are purchased from multiple counterparties, which are evaluated for creditworthiness prior to purchase of the contracts. All of these options have been purchased from nationally recognized financial institutions with a Standard and Poor's/Moody’s long-term credit rating of “A-”/“A3” or higher at the time of purchase and the maximum credit exposure to any single counterparty is subject to concentration limits. The Company also obtains credit support agreements that allow it to request the counterparty to provide collateral when the fair value of the exposure to the counterparty exceeds specified amounts. | |||||||||||||||||||||||||
The notional amount and fair value of call options by counterparty and each counterparty's long-term credit ratings were as follows: | |||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
Credit Rating (1) | Notional | Fair | Notional | Fair | |||||||||||||||||||||
Counterparty | S&P | Moody’s | Amount | Value | Amount | Value | |||||||||||||||||||
Bank of America, N.A. | A | A2 | $ | 7,800 | $ | 203 | $ | 8,700 | $ | 439 | |||||||||||||||
Barclays Bank PLC | A | A2 | 5,000 | 73 | 5,000 | 70 | |||||||||||||||||||
Credit Suisse International | A | A1 | 31,200 | 1,090 | 27,500 | 1,193 | |||||||||||||||||||
Societe Generale | A | A2 | 38,400 | 1,046 | 25,400 | 756 | |||||||||||||||||||
Total | $ | 82,400 | $ | 2,412 | $ | 66,600 | $ | 2,458 | |||||||||||||||||
__________________________________ | |||||||||||||||||||||||||
-1 | As assigned by Standard & Poor’s Corporation (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”). | ||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, the Company held $2,177 and $1,955, respectively, of cash received from counterparties for derivative collateral, which is included in Other Liabilities on the Consolidated Balance Sheets. This derivative collateral limited the Company’s maximum amount of economic loss due to credit risk that would be incurred if parties to the call options failed completely to perform according to the terms of the contracts to $235 and $503 at March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||||||||||
The future annual index credits on fixed indexed annuities are treated as a "series of embedded derivatives" over the expected life of the applicable contract. Call options are not purchased to fund the index liabilities which may arise after the next annuity deposit anniversary date. Call options and the related forward embedded options in the annuity contracts are carried at fair value. | |||||||||||||||||||||||||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Accumulated other comprehensive income (loss) represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, accumulated other comprehensive income (loss) includes the after tax change in net unrealized gains and losses on fixed maturities and equity securities and the after tax change in net funded status of pension and other postretirement benefit obligations for the period as shown in the Consolidated Statement of Changes in Shareholders’ Equity. The following table reconciles these components. | ||||||||||||||||
Unrealized Gains | ||||||||||||||||
and Losses on | ||||||||||||||||
Fixed Maturities | ||||||||||||||||
and Equity | Defined | |||||||||||||||
Securities (1)(2) | Benefit Plans (1) | Total (1) | ||||||||||||||
Beginning balance, January 1, 2015 | $ | 297,554 | $ | (12,953 | ) | $ | 284,601 | |||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 41,370 | - | 41,370 | |||||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income (loss) | (3,792 | ) | - | (3,792 | ) | |||||||||||
Net current period other | ||||||||||||||||
comprehensive income (loss) | 37,578 | - | 37,578 | |||||||||||||
Ending balance, March 31, 2015 | $ | 335,132 | $ | (12,953 | ) | $ | 322,179 | |||||||||
Beginning balance, January 1, 2014 | $ | 133,990 | $ | (11,776 | ) | $ | 122,214 | |||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 78,512 | - | 78,512 | |||||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income (loss) | (1,104 | ) | - | (1,104 | ) | |||||||||||
Net current period other | ||||||||||||||||
comprehensive income (loss) | 77,408 | - | 77,408 | |||||||||||||
Ending balance, March 31, 2014 | $ | 211,398 | $ | (11,776 | ) | $ | 199,622 | |||||||||
_____________________________________ | ||||||||||||||||
-1 | All amounts are net of tax. | |||||||||||||||
-2 | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||
Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is located in “Note 2 — Investments — Unrealized Gains and Losses on Fixed Maturities and Equity Securities”. | ||||||||||||||||
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | The following table reconciles these components. | |||||||||||||||
Unrealized Gains | ||||||||||||||||
and Losses on | ||||||||||||||||
Fixed Maturities | ||||||||||||||||
and Equity | Defined | |||||||||||||||
Securities (1)(2) | Benefit Plans (1) | Total (1) | ||||||||||||||
Beginning balance, January 1, 2015 | $ | 297,554 | $ | (12,953 | ) | $ | 284,601 | |||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 41,370 | - | 41,370 | |||||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income (loss) | (3,792 | ) | - | (3,792 | ) | |||||||||||
Net current period other | ||||||||||||||||
comprehensive income (loss) | 37,578 | - | 37,578 | |||||||||||||
Ending balance, March 31, 2015 | $ | 335,132 | $ | (12,953 | ) | $ | 322,179 | |||||||||
Beginning balance, January 1, 2014 | $ | 133,990 | $ | (11,776 | ) | $ | 122,214 | |||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 78,512 | - | 78,512 | |||||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income (loss) | (1,104 | ) | - | (1,104 | ) | |||||||||||
Net current period other | ||||||||||||||||
comprehensive income (loss) | 77,408 | - | 77,408 | |||||||||||||
Ending balance, March 31, 2014 | $ | 211,398 | $ | (11,776 | ) | $ | 199,622 | |||||||||
_____________________________________ | ||||||||||||||||
-1 | All amounts are net of tax. | |||||||||||||||
-2 | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||
Investments_Tables
Investments (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||
Unrealized gains and losses on fixed maturities and equity securities | The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (loss) (“AOCI”) of all fixed maturities and equity securities in the portfolio were as follows: | |||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | OTTI in | ||||||||||||||||||||||||||
Cost/Cost | Gains | Losses | Value | AOCI (1) | ||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations (2): | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 481,801 | $ | 59,872 | $ | 313 | $ | 541,360 | $ | - | ||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||
U.S. Treasury securities | 544,912 | 32,538 | 981 | 576,469 | - | |||||||||||||||||||||||||
Municipal bonds | 1,489,255 | 201,160 | 5,329 | 1,685,086 | - | |||||||||||||||||||||||||
Foreign government bonds | 57,042 | 8,069 | 30 | 65,081 | - | |||||||||||||||||||||||||
Corporate bonds | 2,582,763 | 266,816 | 8,517 | 2,841,062 | - | |||||||||||||||||||||||||
Other mortgage-backed securities | 1,323,497 | 35,303 | 2,059 | 1,356,741 | 2,879 | |||||||||||||||||||||||||
Totals | $ | 6,479,270 | $ | 603,758 | $ | 17,229 | $ | 7,065,799 | $ | 2,879 | ||||||||||||||||||||
Equity securities (3) | $ | 99,860 | $ | 10,205 | $ | 4,999 | $ | 105,066 | $ | - | ||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations (2): | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 484,561 | $ | 52,555 | $ | 1,390 | $ | 535,726 | $ | - | ||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||
U.S. Treasury securities | 512,596 | 28,652 | 3,049 | 538,199 | - | |||||||||||||||||||||||||
Municipal bonds | 1,462,717 | 189,533 | 4,428 | 1,647,822 | - | |||||||||||||||||||||||||
Foreign government bonds | 52,552 | 6,984 | - | 59,536 | - | |||||||||||||||||||||||||
Corporate bonds | 2,608,633 | 237,372 | 11,256 | 2,834,749 | - | |||||||||||||||||||||||||
Other mortgage-backed securities | 1,254,178 | 28,772 | 5,892 | 1,277,058 | 2,879 | |||||||||||||||||||||||||
Totals | $ | 6,375,237 | $ | 543,868 | $ | 26,015 | $ | 6,893,090 | $ | 2,879 | ||||||||||||||||||||
Equity securities (3) | $ | 99,904 | $ | 14,159 | $ | 3,408 | $ | 110,655 | $ | - | ||||||||||||||||||||
-1 | Related to securities for which an unrealized loss was bifurcated to distinguish the credit related portion and the portion driven by other market factors. Represents the amount of other-than-temporary impairment losses in AOCI which was not included in earnings; amounts also include unrealized gains/(losses) on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date. | |||||||||||||||||||||||||||||
-2 | Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $265,066 and $302,222; Federal Home Loan Mortgage Corporation (“FHLMC”) of $444,117 and $432,432; and Government National Mortgage Association (“GNMA”) of $137,856 and $137,867 as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||||||||||||||
-3 | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. | |||||||||||||||||||||||||||||
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | 12 Months or Less | More than 12 Months | Total | |||||||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 13,144 | $ | 160 | $ | 1,629 | $ | 153 | $ | 14,773 | $ | 313 | ||||||||||||||||||
Other | 111,579 | 935 | 1,952 | 46 | 113,531 | 981 | ||||||||||||||||||||||||
Municipal bonds | 39,258 | 622 | 24,774 | 4,707 | 64,032 | 5,329 | ||||||||||||||||||||||||
Foreign government bonds | 3,970 | 30 | - | - | 3,970 | 30 | ||||||||||||||||||||||||
Corporate bonds | 112,988 | 5,166 | 38,711 | 3,351 | 151,699 | 8,517 | ||||||||||||||||||||||||
Other mortgage-backed securities | 248,866 | 1,540 | 35,547 | 519 | 284,413 | 2,059 | ||||||||||||||||||||||||
Total fixed | ||||||||||||||||||||||||||||||
maturity securities | 529,805 | 8,453 | 102,613 | 8,776 | 632,418 | 17,229 | ||||||||||||||||||||||||
Equity securities (1) | 21,718 | 4,354 | 6,830 | 645 | 28,548 | 4,999 | ||||||||||||||||||||||||
Combined totals | $ | 551,523 | $ | 12,807 | $ | 109,443 | $ | 9,421 | $ | 660,966 | $ | 22,228 | ||||||||||||||||||
Number of positions with a | ||||||||||||||||||||||||||||||
gross unrealized loss | 203 | 48 | 251 | |||||||||||||||||||||||||||
Fair value as a percentage of | ||||||||||||||||||||||||||||||
total fixed maturities and | ||||||||||||||||||||||||||||||
equity securities fair value | 7.7 | % | 1.5 | % | 9.2 | % | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 2 | $ | - | $ | 39,809 | $ | 1,390 | $ | 39,811 | $ | 1,390 | ||||||||||||||||||
Other | 10,317 | 34 | 117,615 | 3,015 | 127,932 | 3,049 | ||||||||||||||||||||||||
Municipal bonds | 31,821 | 200 | 59,715 | 4,228 | 91,536 | 4,428 | ||||||||||||||||||||||||
Foreign government bonds | - | - | - | - | - | - | ||||||||||||||||||||||||
Corporate bonds | 213,612 | 6,883 | 76,099 | 4,373 | 289,711 | 11,256 | ||||||||||||||||||||||||
Other mortgage-backed securities | 477,877 | 4,797 | 88,663 | 1,095 | 566,540 | 5,892 | ||||||||||||||||||||||||
Total fixed | ||||||||||||||||||||||||||||||
maturity securities | 733,629 | 11,914 | 381,901 | 14,101 | 1,115,530 | 26,015 | ||||||||||||||||||||||||
Equity securities (1) | 12,955 | 2,568 | 6,635 | 840 | 19,590 | 3,408 | ||||||||||||||||||||||||
Combined totals | $ | 746,584 | $ | 14,482 | $ | 388,536 | $ | 14,941 | $ | 1,135,120 | $ | 29,423 | ||||||||||||||||||
Number of positions with a | ||||||||||||||||||||||||||||||
gross unrealized loss | 234 | 112 | 346 | |||||||||||||||||||||||||||
Fair value as a percentage of | ||||||||||||||||||||||||||||||
total fixed maturities and | ||||||||||||||||||||||||||||||
equity securities fair value | 10.7 | % | 5.5 | % | 16.2 | % | ||||||||||||||||||||||||
-1 | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. | |||||||||||||||||||||||||||||
Summary of cumulative credit losses | The following table summarizes the cumulative amounts related to the Company’s credit loss component of the other-than-temporary impairment losses on fixed maturity securities held as of March 31, 2015 and 2014 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of the other-than-temporary impairment losses were recognized in other comprehensive income (loss): | |||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||
Cumulative credit loss (1) | ||||||||||||||||||||||||||||||
Beginning of period | $ | 2,877 | $ | 4,097 | ||||||||||||||||||||||||||
New credit losses | - | - | ||||||||||||||||||||||||||||
Losses related to securities sold or paid down during the period | - | - | ||||||||||||||||||||||||||||
End of period | $ | 2,877 | $ | 4,097 | ||||||||||||||||||||||||||
-1 | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. | |||||||||||||||||||||||||||||
Distribution of the Company's fixed maturity portfolio by estimated expected maturity | The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers’ utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. | |||||||||||||||||||||||||||||
Percent of Total Fair Value | 31-Mar-15 | |||||||||||||||||||||||||||||
March 31, | December 31, | Fair | Amortized | |||||||||||||||||||||||||||
2015 | 2014 | Value | Cost | |||||||||||||||||||||||||||
Estimated expected maturity: | ||||||||||||||||||||||||||||||
Due in 1 year or less | 4 | % | 4 | % | $ | 285,424 | $ | 261,731 | ||||||||||||||||||||||
Due after 1 year through 5 years | 23.8 | 23.4 | 1,682,730 | 1,543,047 | ||||||||||||||||||||||||||
Due after 5 years through 10 years | 39.6 | 40.1 | 2,797,801 | 2,565,557 | ||||||||||||||||||||||||||
Due after 10 years | ||||||||||||||||||||||||||||||
through 20 years | 20.2 | 20.1 | 1,426,306 | 1,307,909 | ||||||||||||||||||||||||||
Due after 20 years | 12.4 | 12.4 | 873,538 | 801,026 | ||||||||||||||||||||||||||
Total | 100 | % | 100 | % | $ | 7,065,799 | $ | 6,479,270 | ||||||||||||||||||||||
Average option-adjusted duration, in years | 5.7 | 5.8 | ||||||||||||||||||||||||||||
Proceeds received from sales of fixed maturities and equity securities | Proceeds received from sales of fixed maturities and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were: | |||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||
Proceeds received | $ | 81,320 | $ | 52,940 | ||||||||||||||||||||||||||
Gross gains realized | 1,654 | 1,527 | ||||||||||||||||||||||||||||
Gross losses realized | (463 | ) | (675 | ) | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||
Proceeds received | $ | 13,969 | $ | 3,648 | ||||||||||||||||||||||||||
Gross gains realized | 4,602 | 479 | ||||||||||||||||||||||||||||
Gross losses realized | (10 | ) | (117 | ) | ||||||||||||||||||||||||||
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles the net unrealized investment gains and losses, net of tax, included in accumulated other comprehensive income (loss), before the impact on deferred policy acquisition costs: | |||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | ||||||||||||||||||||||||||||||
on fixed maturity securities, net of tax | ||||||||||||||||||||||||||||||
Beginning of period | $ | 336,604 | $ | 146,489 | ||||||||||||||||||||||||||
Change in unrealized investment gains and losses | 45,486 | 93,225 | ||||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | ||||||||||||||||||||||||||||||
losses to net income | (846 | ) | (860 | ) | ||||||||||||||||||||||||||
End of period | $ | 381,244 | $ | 238,854 | ||||||||||||||||||||||||||
Net unrealized investment gains (losses) | ||||||||||||||||||||||||||||||
on equity securities, net of tax | ||||||||||||||||||||||||||||||
Beginning of period | $ | 6,988 | $ | 4,618 | ||||||||||||||||||||||||||
Change in unrealized investment gains and losses | (658 | ) | 1,313 | |||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | ||||||||||||||||||||||||||||||
losses to net income | (2,946 | ) | (236 | ) | ||||||||||||||||||||||||||
End of period | $ | 3,384 | $ | 5,695 | ||||||||||||||||||||||||||
Offsetting assets and liability | The following table presents the instruments that were subject to a master netting arrangement for the Company. | |||||||||||||||||||||||||||||
Net Amounts | ||||||||||||||||||||||||||||||
of Assets/ | ||||||||||||||||||||||||||||||
Gross | Liabilities | Gross Amounts Not Offset | ||||||||||||||||||||||||||||
Amounts | Presented | in the Consolidated | ||||||||||||||||||||||||||||
Offset in the | in the | Balance Sheet | ||||||||||||||||||||||||||||
Consolidated | Consolidated | Cash | ||||||||||||||||||||||||||||
Gross | Balance | Balance | Financial | Collateral | Net | |||||||||||||||||||||||||
Amounts | Sheet | Sheet | Instruments | Received | Amount | |||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||
Free-standing derivatives | $2,412 | $ - | $2,412 | $ - | $2,177 | $235 | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||
Free-standing derivatives | 2,458 | - | 2,458 | - | 1,955 | 503 | ||||||||||||||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||
Summary of Company's fair value hierarchy measured at recurring basis | The following table presents the Company’s fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At March 31, 2015, these Level 3 invested assets comprised 2.1% of the Company’s total investment portfolio fair value. | |||||||||||||||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 541,360 | $ | 541,360 | $ | - | $ | 541,360 | $ | - | ||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 576,469 | 576,469 | 17,995 | 558,474 | - | |||||||||||||||||||||||||||||
Municipal bonds | 1,685,086 | 1,685,086 | - | 1,671,201 | 13,885 | |||||||||||||||||||||||||||||
Foreign government bonds | 65,081 | 65,081 | - | 65,081 | - | |||||||||||||||||||||||||||||
Corporate bonds | 2,841,062 | 2,841,062 | 10,369 | 2,758,415 | 72,278 | |||||||||||||||||||||||||||||
Other mortgage-backed securities | 1,356,741 | 1,356,741 | - | 1,284,147 | 72,594 | |||||||||||||||||||||||||||||
Total fixed maturities | 7,065,799 | 7,065,799 | 28,364 | 6,878,678 | 158,757 | |||||||||||||||||||||||||||||
Equity securities | 105,066 | 105,066 | 90,347 | 14,713 | 6 | |||||||||||||||||||||||||||||
Short-term investments | 181,004 | 181,004 | 181,004 | - | - | |||||||||||||||||||||||||||||
Other investments | 12,412 | 12,412 | - | 12,412 | - | |||||||||||||||||||||||||||||
Totals | 7,364,281 | 7,364,281 | 299,715 | 6,905,803 | 158,763 | |||||||||||||||||||||||||||||
Separate Account | ||||||||||||||||||||||||||||||||||
(variable annuity) assets (1) | 1,865,240 | 1,865,240 | 1,865,240 | - | - | |||||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Other policyholder funds, | ||||||||||||||||||||||||||||||||||
embedded derivatives | 22,040 | 22,040 | - | - | 22,040 | |||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 535,726 | $ | 535,726 | $ | - | $ | 535,726 | $ | - | ||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 538,199 | 538,199 | 17,857 | 520,342 | - | |||||||||||||||||||||||||||||
Municipal bonds | 1,647,822 | 1,647,822 | - | 1,634,194 | 13,628 | |||||||||||||||||||||||||||||
Foreign government bonds | 59,536 | 59,536 | - | 59,536 | - | |||||||||||||||||||||||||||||
Corporate bonds | 2,834,749 | 2,834,749 | 10,524 | 2,749,508 | 74,717 | |||||||||||||||||||||||||||||
Other mortgage-backed securities | 1,277,058 | 1,277,058 | - | 1,194,109 | 82,949 | |||||||||||||||||||||||||||||
Total fixed maturities | 6,893,090 | 6,893,090 | 28,381 | 6,693,415 | 171,294 | |||||||||||||||||||||||||||||
Equity securities | 110,655 | 110,655 | 92,140 | 18,509 | 6 | |||||||||||||||||||||||||||||
Short-term investments | 142,039 | 142,039 | 142,039 | - | - | |||||||||||||||||||||||||||||
Other investments | 12,458 | 12,458 | - | 12,458 | - | |||||||||||||||||||||||||||||
Totals | 7,158,242 | 7,158,242 | 262,560 | 6,724,382 | 171,300 | |||||||||||||||||||||||||||||
Separate Account | ||||||||||||||||||||||||||||||||||
(variable annuity) assets (1) | 1,813,557 | 1,813,557 | 1,813,557 | - | - | |||||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Other policyholder funds, | ||||||||||||||||||||||||||||||||||
embedded derivatives | 20,049 | 20,049 | - | - | 20,049 | |||||||||||||||||||||||||||||
___________________________ | ||||||||||||||||||||||||||||||||||
-1 | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. | |||||||||||||||||||||||||||||||||
Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis | The following table presents reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. | |||||||||||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||||||||||||
Financial Assets | Liabilities(1) | |||||||||||||||||||||||||||||||||
Municipal | Corporate | Other | Total | Equity | ||||||||||||||||||||||||||||||
Bonds | Bonds | Mortgage- | Fixed | Securities | Total | |||||||||||||||||||||||||||||
Backed | Maturities | |||||||||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||||||||
Beginning balance, January 1, 2015 | $ | 13,628 | $ | 74,717 | $ | 82,949 | $ | 171,294 | $ | 6 | $ | 171,300 | $ | 20,049 | ||||||||||||||||||||
Transfers into Level 3 (2) | - | 1,895 | 461 | 2,356 | - | 2,356 | - | |||||||||||||||||||||||||||
Transfers out of Level 3 (2) | - | - | (9,664 | ) | (9,664 | ) | - | (9,664 | ) | - | ||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||||||||||||||||
included in net income | - | - | - | - | - | - | (439 | ) | ||||||||||||||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||||||||||||||||
included in other | ||||||||||||||||||||||||||||||||||
comprehensive income | 380 | 352 | 3 | 735 | - | 735 | - | |||||||||||||||||||||||||||
Purchases | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Issuances | - | - | - | - | - | - | 2,964 | |||||||||||||||||||||||||||
Sales | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Settlements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Paydowns, maturities | ||||||||||||||||||||||||||||||||||
and distributions | (123 | ) | (4,686 | ) | (1,155 | ) | (5,964 | ) | - | (5,964 | ) | (534 | ) | |||||||||||||||||||||
Ending balance, March 31, 2015 | $ | 13,885 | $ | 72,278 | $ | 72,594 | $ | 158,757 | $ | 6 | $ | 158,763 | $ | 22,040 | ||||||||||||||||||||
Beginning balance, January 1, 2014 | $ | 2,694 | $ | 60,826 | $ | 46,009 | $ | 109,529 | $ | 6 | $ | 109,535 | $ | - | ||||||||||||||||||||
Transfers into Level 3 (2) | 10,055 | - | 7,109 | 17,164 | - | 17,164 | - | |||||||||||||||||||||||||||
Transfers out of Level 3 (2) | - | - | (519 | ) | (519 | ) | - | (519 | ) | - | ||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||||||||||||||||
included in net income | - | - | - | - | - | - | 12 | |||||||||||||||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||||||||||||||||
included in other | ||||||||||||||||||||||||||||||||||
comprehensive income | 98 | 1,014 | 184 | 1,296 | - | 1,296 | - | |||||||||||||||||||||||||||
Purchases | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Issuances | - | - | - | - | - | - | 2,735 | |||||||||||||||||||||||||||
Sales | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Settlements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Paydowns, maturities | ||||||||||||||||||||||||||||||||||
and distributions | (68 | ) | (1,636 | ) | (232 | ) | (1,936 | ) | - | (1,936 | ) | - | ||||||||||||||||||||||
Ending balance, March 31, 2014 | $ | 12,779 | $ | 60,204 | $ | 52,551 | $ | 125,534 | $ | 6 | $ | 125,540 | $ | 2,747 | ||||||||||||||||||||
________________________________ | ||||||||||||||||||||||||||||||||||
-1 | Represents embedded derivatives, all related to the Company’s fixed indexed annuity (“FIA”) products, reported in Other Policyholder Funds in the Company’s Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||
-2 | Transfers into and out of Level 3 during the three months ended March 31, 2015 and 2014 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. | |||||||||||||||||||||||||||||||||
Carrying value, fair value and fair value hierarchy of financial assets and financial liabilities | The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. | |||||||||||||||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Other investments | $ | 145,574 | $ | 149,965 | $ | - | $ | - | $ | 149,965 | ||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Fixed annuity contract liabilities | 3,847,694 | 3,762,743 | - | - | 3,762,743 | |||||||||||||||||||||||||||||
Policyholder account balances on | ||||||||||||||||||||||||||||||||||
interest-sensitive life contracts | 77,051 | 81,079 | - | - | 81,079 | |||||||||||||||||||||||||||||
Other policyholder funds | 585,582 | 585,582 | - | 500,111 | 85,471 | |||||||||||||||||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||||||||||||||||
Long-term debt | 199,955 | 207,315 | 207,315 | - | - | |||||||||||||||||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||||||||||||||||
agreement obligations | - | - | - | - | - | |||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Other investments | $ | 145,409 | $ | 149,792 | $ | - | $ | - | $ | 149,792 | ||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||||
Fixed annuity contract liabilities | 3,774,457 | 3,691,123 | - | - | 3,691,123 | |||||||||||||||||||||||||||||
Policyholder account balances on | ||||||||||||||||||||||||||||||||||
interest-sensitive life contracts | 77,415 | 81,461 | - | - | 81,461 | |||||||||||||||||||||||||||||
Other policyholder funds | 586,689 | 586,689 | - | 500,080 | 86,609 | |||||||||||||||||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||||||||||||||||
Long-term debt | 199,939 | 209,495 | 209,495 | - | - | |||||||||||||||||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||||||||||||||||
agreement obligations | - | - | - | - | - | |||||||||||||||||||||||||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Summary of Indebtedness outstanding | Indebtedness outstanding was as follows: | ||||||||||
March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||
Short-term debt: | |||||||||||
Bank Credit Facility, expires July 30, 2019 | $ | 38,000 | $ | 38,000 | |||||||
Long-term debt, current and noncurrent (1): | |||||||||||
6.05% Senior Notes, due June 15, 2015. Aggregate | |||||||||||
principal amount of $75,000 less unaccrued discount | |||||||||||
of $5 and $11 (6.1% imputed rate) | 74,995 | 74,989 | |||||||||
6.85% Senior Notes, due April 15, 2016. Aggregate | |||||||||||
principal amount of $125,000 less unaccrued discount | |||||||||||
of $40 and $50 (6.9% imputed rate) | 124,960 | 124,950 | |||||||||
Total | $ | 237,955 | $ | 237,939 | |||||||
____________________________________ | |||||||||||
-1 | The Company designates debt obligations as “long-term” based on maturity date at issuance. | ||||||||||
Reinsurance_Tables
Reinsurance (Tables) | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||
Effects of reinsurance on premiums and benefits | The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: | |||||||||||||||||||||
Ceded to | Assumed | |||||||||||||||||||||
Gross | Other | from Other | Net | |||||||||||||||||||
Amount | Companies | Companies | Amount | |||||||||||||||||||
Three months ended March 31, 2015 | ||||||||||||||||||||||
Premiums written and contract deposits | $ | 311,047 | $ | 6,124 | $ | 812 | $ | 305,735 | ||||||||||||||
Premiums and contract charges earned | 185,196 | 6,315 | 858 | 179,739 | ||||||||||||||||||
Benefits, claims and settlement expenses | 115,840 | 2,570 | 749 | 114,019 | ||||||||||||||||||
Three months ended March 31, 2014 | ||||||||||||||||||||||
Premiums written and contract deposits | $ | 266,437 | $ | 6,631 | $ | 469 | $ | 260,275 | ||||||||||||||
Premiums and contract charges earned | 181,733 | 6,893 | 563 | 175,403 | ||||||||||||||||||
Benefits, claims and settlement expenses | 114,877 | 3,445 | 556 | 111,988 | ||||||||||||||||||
Commitments_Tables
Commitments (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Investment Commitments | From time to time, the Company has outstanding commitments to purchase investments and/or commitments to lend funds under bridge loans. Unfunded commitments were as follows: | |||||||||||
March 31, | December 31, | |||||||||||
2015 | 2014 | |||||||||||
Outstanding commitments to: | ||||||||||||
Purchase investments | $ | 29,856 | $ | 39,689 | ||||||||
Lend funds under bridge loans | 10,381 | 10,567 | ||||||||||
Total | $ | 40,237 | $ | 50,256 | ||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Segment Reporting [Abstract] | ||||||||||
Summarized financial information for these segments | Summarized financial information for these segments is as follows: | |||||||||
Three Months Ended | ||||||||||
March 31, | ||||||||||
2015 | 2014 | |||||||||
Insurance premiums and contract charges earned | ||||||||||
Property and casualty | $ | 146,749 | $ | 143,892 | ||||||
Annuity | 6,223 | 5,924 | ||||||||
Life | 26,767 | 25,587 | ||||||||
Total | $ | 179,739 | $ | 175,403 | ||||||
Net investment income | ||||||||||
Property and casualty | $ | 9,433 | $ | 9,285 | ||||||
Annuity | 56,392 | 55,857 | ||||||||
Life | 17,708 | 18,134 | ||||||||
Corporate and other | 6 | 2 | ||||||||
Intersegment eliminations | (226 | ) | (234 | ) | ||||||
Total | $ | 83,313 | $ | 83,044 | ||||||
Net income (loss) | ||||||||||
Property and casualty | $ | 17,623 | $ | 14,027 | ||||||
Annuity | 12,510 | 12,239 | ||||||||
Life | 3,385 | 3,882 | ||||||||
Corporate and other | 757 | (1,782 | ) | |||||||
Total | $ | 34,275 | $ | 28,366 | ||||||
March 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
Assets | ||||||||||
Property and casualty | $ | 1,144,361 | $ | 1,107,962 | ||||||
Annuity | 6,898,018 | 6,683,473 | ||||||||
Life | 1,918,822 | 1,858,150 | ||||||||
Corporate and other | 140,578 | 155,678 | ||||||||
Intersegment eliminations | (27,360 | ) | (36,736 | ) | ||||||
Total | $ | 10,074,419 | $ | 9,768,527 | ||||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivative instruments, including derivative instruments embedded in fixed indexed annuity contracts, presented in the Consolidated Balance Sheets were as follows: | ||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Derivative instruments, included in Short-term | |||||||||||||||||||||||||
and Other Investments | $ | 2,412 | $ | 2,458 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Fixed indexed annuities - embedded derivatives, | |||||||||||||||||||||||||
included in Other Policyholder Funds | 22,040 | 20,049 | |||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: | ||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Change in fair value of derivatives (1): | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Net realized investment gains (losses) | $ | (205 | ) | $ | 14 | ||||||||||||||||||||
Change in fair value of embedded derivatives: | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Net realized investment gains (losses) | 439 | (12 | ) | ||||||||||||||||||||||
_________________________________ | |||||||||||||||||||||||||
-1 | Includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open options. | ||||||||||||||||||||||||
Financing Receivable Credit Quality Indicators | The notional amount and fair value of call options by counterparty and each counterparty's long-term credit ratings were as follows: | ||||||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
Credit Rating (1) | Notional | Fair | Notional | Fair | |||||||||||||||||||||
Counterparty | S&P | Moody’s | Amount | Value | Amount | Value | |||||||||||||||||||
Bank of America, N.A. | A | A2 | $ | 7,800 | $ | 203 | $ | 8,700 | $ | 439 | |||||||||||||||
Barclays Bank PLC | A | A2 | 5,000 | 73 | 5,000 | 70 | |||||||||||||||||||
Credit Suisse International | A | A1 | 31,200 | 1,090 | 27,500 | 1,193 | |||||||||||||||||||
Societe Generale | A | A2 | 38,400 | 1,046 | 25,400 | 756 | |||||||||||||||||||
Total | $ | 82,400 | $ | 2,412 | $ | 66,600 | $ | 2,458 | |||||||||||||||||
__________________________________ | |||||||||||||||||||||||||
-1 | As assigned by Standard & Poor’s Corporation (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”). | ||||||||||||||||||||||||
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Beginning balance | $284,601 | [1] | $122,214 | [1] |
Other comprehensive income (loss) before reclassifications | 41,370 | [1] | 78,512 | [1] |
Amounts reclassified from accumulated other comprehensive income (loss) | -3,792 | [1] | -1,104 | [1] |
Net current-period other comprehensive income (loss) | 37,578 | [1] | 77,408 | [1] |
Ending balance | 322,179 | [1] | 199,622 | [1] |
Unrealized Gains and Losses on Fixed Maturities and Equity Securities | ||||
Beginning balance | 297,554 | [1],[2] | 133,990 | [1],[2] |
Other comprehensive income (loss) before reclassifications | 41,370 | [1],[2] | 78,512 | [1],[2] |
Amounts reclassified from accumulated other comprehensive income (loss) | -3,792 | [1],[2] | -1,104 | [1],[2] |
Net current-period other comprehensive income (loss) | 37,578 | [1],[2] | 77,408 | [1],[2] |
Ending balance | 335,132 | [1],[2] | 211,398 | [1],[2] |
Defined Benefit Plans | ||||
Beginning balance | -12,953 | [1] | -11,776 | [1] |
Other comprehensive income (loss) before reclassifications | 0 | [1] | 0 | [1] |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | [1] | 0 | [1] |
Net current-period other comprehensive income (loss) | 0 | [1] | 0 | [1] |
Ending balance | ($12,953) | [1] | ($11,776) | [1] |
[1] | All amounts are net of tax. | |||
[2] | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. |
Basis_of_Presentation_Details_
Basis of Presentation (Details Textual) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | $5,834 | $1,699 |
Other Tax Expense (Benefit) | 2,042 | 595 |
Quantifying Misstatement in Current Year Financial Statements, Amount | 3,012 | |
Property and casualty [Member] | ||
Quantifying Misstatement in Current Year Financial Statements, Amount | 2,056 | |
Annuity [Member] | ||
Quantifying Misstatement in Current Year Financial Statements, Amount | 519 | |
Life [Member] | ||
Quantifying Misstatement in Current Year Financial Statements, Amount | $437 |
Investments_Details
Investments (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | ||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | $6,479,270 | $6,375,237 | ||
Amortized Cost/Cost, Equity securities | 99,860 | 99,904 | ||
Unrealized Gains | 603,758 | 543,868 | ||
Unrealized Losses | 17,229 | 26,015 | ||
Fair Value | 7,065,799 | 6,893,090 | ||
Fair Value, Equity securities | 105,066 | 110,655 | ||
OTTI in AOCI | 2,879 | [1] | 2,879 | [1] |
Mortgage-backed securities [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | 481,801 | [2] | 484,561 | [2] |
Unrealized Gains | 59,872 | [2] | 52,555 | [2] |
Unrealized Losses | 313 | [2] | 1,390 | [2] |
Fair Value | 541,360 | [2] | 535,726 | [2] |
OTTI in AOCI | 0 | [1],[2] | 0 | [1],[2] |
Other, including U.S. Treasury Securities [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | 544,912 | [2] | 512,596 | [2] |
Unrealized Gains | 32,538 | [2] | 28,652 | [2] |
Unrealized Losses | 981 | [2] | 3,049 | [2] |
Fair Value | 576,469 | [2] | 538,199 | [2] |
OTTI in AOCI | 0 | [1],[2] | 0 | [1],[2] |
Municipal bonds [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | 1,489,255 | 1,462,717 | ||
Unrealized Gains | 201,160 | 189,533 | ||
Unrealized Losses | 5,329 | 4,428 | ||
Fair Value | 1,685,086 | 1,647,822 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Foreign government bonds [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | 57,042 | 52,552 | ||
Unrealized Gains | 8,069 | 6,984 | ||
Unrealized Losses | 30 | 0 | ||
Fair Value | 65,081 | 59,536 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Corporate bonds [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | 2,582,763 | 2,608,633 | ||
Unrealized Gains | 266,816 | 237,372 | ||
Unrealized Losses | 8,517 | 11,256 | ||
Fair Value | 2,841,062 | 2,834,749 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Other mortgage-backed securities [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost | 1,323,497 | 1,254,178 | ||
Unrealized Gains | 35,303 | 28,772 | ||
Unrealized Losses | 2,059 | 5,892 | ||
Fair Value | 1,356,741 | 1,277,058 | ||
OTTI in AOCI | 2,879 | [1] | 2,879 | [1] |
Equity securities [Member] | ||||
Unrealized gains and losses on fixed maturities and equity securities | ||||
Amortized Cost/Cost, Equity securities | 99,860 | [3] | 99,904 | [3] |
Unrealized Gains | 10,205 | [3] | 14,159 | [3] |
Unrealized Losses | 4,999 | [3] | 3,408 | [3] |
Fair Value, Equity securities | 105,066 | [3] | 110,655 | [3] |
OTTI in AOCI | $0 | [1],[3] | $0 | [1],[3] |
[1] | Related to securities for which an unrealized loss was bifurcated to distinguish the credit related portion and the portion driven by other market factors. Represents the amount of other-than-temporary impairment losses in AOCI which was not included in earnings; amounts also include unrealized gains/(losses) on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date. | |||
[2] | Fair value includes securities issued by Federal National Mortgage Association (“FNMAâ€) of $265,066 and $302,222; Federal Home Loan Mortgage Corporation (“FHLMCâ€) of $444,117 and $432,432; and Government National Mortgage Association (“GNMAâ€) of $137,856 and $137,867 as of March 31, 2015 and December 31, 2014, respectively. | |||
[3] | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. |
Investments_Details_1
Investments (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | ||
Number | Number | |||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | $551,523 | $746,584 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 109,443 | 388,536 | ||
Fixed maturity securities, Fair Value, Total | 660,966 | 1,135,120 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 12,807 | 14,482 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 9,421 | 14,941 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 22,228 | 29,423 | ||
Number of positions with a gross unrealized loss position, 12 Months or Less | 203 | 234 | ||
Number of position with a gross unrealized loss position, more than 12 months | 48 | 112 | ||
Number of position with a gross unrealized loss position, Total | 251 | 346 | ||
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less | 7.70% | 10.70% | ||
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months | 1.50% | 5.50% | ||
Fair value as a percentage of total fixed maturities and equity securities fair value, Total | 9.20% | 16.20% | ||
Mortgage-backed securities [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 13,144 | 2 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 1,629 | 39,809 | ||
Fixed maturity securities, Fair Value, Total | 14,773 | 39,811 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 160 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 153 | 1,390 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 313 | 1,390 | ||
Other [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 111,579 | 10,317 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 1,952 | 117,615 | ||
Fixed maturity securities, Fair Value, Total | 113,531 | 127,932 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 935 | 34 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 46 | 3,015 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 981 | 3,049 | ||
Municipal bonds [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 39,258 | 31,821 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 24,774 | 59,715 | ||
Fixed maturity securities, Fair Value, Total | 64,032 | 91,536 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 622 | 200 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 4,707 | 4,228 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 5,329 | 4,428 | ||
Foreign government bonds [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 3,970 | 0 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 | ||
Fixed maturity securities, Fair Value, Total | 3,970 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 30 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 30 | 0 | ||
Corporate bonds [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 112,988 | 213,612 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 38,711 | 76,099 | ||
Fixed maturity securities, Fair Value, Total | 151,699 | 289,711 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 5,166 | 6,883 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 3,351 | 4,373 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 8,517 | 11,256 | ||
Other mortgage-backed securities [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 248,866 | 477,877 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 35,547 | 88,663 | ||
Fixed maturity securities, Fair Value, Total | 284,413 | 566,540 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 1,540 | 4,797 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 519 | 1,095 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 2,059 | 5,892 | ||
Total fixed maturity securities [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 529,805 | 733,629 | ||
Fixed maturity securities, Fair Value, More than 12 Months | 102,613 | 381,901 | ||
Fixed maturity securities, Fair Value, Total | 632,418 | 1,115,530 | ||
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 8,453 | 11,914 | ||
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 8,776 | 14,101 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 17,229 | 26,015 | ||
Equity securities [Member] | ||||
Fixed maturity securities, Fair Value | ||||
Fixed maturity securities, Fair Value, 12 Months or Less | 21,718 | [1] | 12,955 | [1] |
Fixed maturity securities, Fair Value, More than 12 Months | 6,830 | [1] | 6,635 | [1] |
Fixed maturity securities, Fair Value, Total | 28,548 | [1] | 19,590 | [1] |
Fixed maturity securities, Gross Unrealized Losses | ||||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 4,354 | [1] | 2,568 | [1] |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 645 | [1] | 840 | [1] |
Fixed maturity securities, Gross Unrealized Losses, Total | $4,999 | [1] | $3,408 | [1] |
[1] | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. |
Investments_Details_2
Investments (Details 2) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Cumulative credit loss | ||||
Beginning of period | $2,877 | [1] | $4,097 | [1] |
New credit losses | 0 | [1] | 0 | [1] |
Losses related to securities sold or paid down during the period | 0 | [1] | 0 | [1] |
End of period | $2,877 | [1] | $4,097 | [1] |
[1] | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. |
Investments_Details_3
Investments (Details 3) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Estimated expected maturity: | ||
Due in 1 year or less, Amortized Cost | $261,731 | |
Due in 1 year or less, Fair Value | 285,424 | |
Due in 1 year or less, Percent of Total Fair Value | 4.00% | 4.00% |
Due after 1 year through 5 years, Amortized Cost | 1,543,047 | |
Due after 1 year through 5 years, Fair Value | 1,682,730 | |
Due after 1 year through 5 years, Percent of Total Fair Value | 23.80% | 23.40% |
Due after 5 years through 10 years, Amortized Cost | 2,565,557 | |
Due after 5 years through 10 years, Fair Value | 2,797,801 | |
Due after 5 years through 10 years, Percent of Total Fair Value | 39.60% | 40.10% |
Due after 10 years through 20 years, Amortized Cost | 1,307,909 | |
Due after 10 years through 20 years, Fair Value | 1,426,306 | |
Due after 10 years through 20 years, Percent of Total Fair Value | 20.20% | 20.10% |
Due after 20 years, Amortized Cost | 801,026 | |
Due after 20 years, Fair Value | 873,538 | |
Due after 20 years, Percent of Total Fair Value | 12.40% | 12.40% |
Total, Amortized Cost | 6,479,270 | 6,375,237 |
Fair Value | $7,065,799 | $6,893,090 |
Total, Percent of Total Fair Value | 100.00% | 100.00% |
Average option-adjusted duration, in years | 5 years 8 months 12 days | 5 years 9 months 18 days |
Investments_Details_4
Investments (Details 4) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Proceeds received from sales of fixed maturities and equity securities | ||
Proceeds received, Fixed maturity securities | $81,320 | $52,940 |
Proceeds received, Equity securities | 13,969 | 3,648 |
Fixed Maturity Securities [Member] | ||
Proceeds received from sales of fixed maturities and equity securities | ||
Gross gains realized | 1,654 | 1,527 |
Gross losses realized | -463 | -675 |
Equity Securities [Member] | ||
Proceeds received from sales of fixed maturities and equity securities | ||
Gross gains realized | 4,602 | 479 |
Gross losses realized | ($10) | ($117) |
Investments_Details_5
Investments (Details 5) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Net unrealized investment gains (losses) on fixed maturity securities, net of tax | ||||
Reclassification of net realized investment (gains) losses to net income | $3,792 | [1],[2] | $1,104 | [1],[2] |
Fixed Maturity Securities [Member] | ||||
Net unrealized investment gains (losses) on fixed maturity securities, net of tax | ||||
Beginning of period | 336,604 | 146,489 | ||
Change in unrealized investment gains and losses | 45,486 | 93,225 | ||
Reclassification of net realized investment (gains) losses to net income | -846 | -860 | ||
End of period | 381,244 | 238,854 | ||
Equity securities [Member] | ||||
Net unrealized investment gains (losses) on fixed maturity securities, net of tax | ||||
Beginning of period | 6,988 | 4,618 | ||
Change in unrealized investment gains and losses | -658 | 1,313 | ||
Reclassification of net realized investment (gains) losses to net income | -2,946 | -236 | ||
End of period | $3,384 | $5,695 | ||
[1] | All amounts are net of tax. | |||
[2] | The pretax amounts reclassified from accumulated other comprehensive income (loss), $5,834 and $1,699, are included in net realized investment gains and losses and the related tax expenses, $2,042 and $595, are included in income tax expense in the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, respectively. |
Investments_Details_6
Investments (Details 6) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Asset derivatives: | ||
Derivatives Asset, Net Amount | $2,412 | $2,458 |
Free-standing derivatives [Member] | ||
Asset derivatives: | ||
Derivatives Asset, Gross Amounts | 2,412 | 2,458 |
Derivatives Asset, Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Derivatives Asset, Net Amounts of Assets Presented in the Consolidated Balance Sheet | 2,412 | 2,458 |
Derivatives Asset, Gross Amounts Not Offset in the Consolidated Balance Sheet, Financial Instruments | 0 | 0 |
Derivatives Asset, Gross Amounts Not Offset in the Consolidated Balance Sheet, Cash Collateral Received | 2,177 | 1,955 |
Derivatives Asset, Net Amount | $235 | $503 |
Investments_Details_Textual
Investments (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Investments (Textual) [Abstract] | ||
Fair value of issued securities | $7,065,799 | $6,893,090 |
Investments (Additional Textual) [Abstract] | ||
Federal Home Loan Bank Funding Agreements | 500,000 | 500,000 |
Investment Grade Rate | 41.00% | |
Federal Home Loan Bank [Member] | Fixed Maturities [Member] | ||
Investments (Additional Textual) [Abstract] | ||
Securities Deposited Fair Value | 18,512 | 18,361 |
Securities Deposited As Collateral | 539,787 | 539,235 |
Federal National Mortgage Association Certificates and Obligations (FNMA) [Member] | ||
Investments (Textual) [Abstract] | ||
Fair value of issued securities | 265,066 | 302,222 |
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | ||
Investments (Textual) [Abstract] | ||
Fair value of issued securities | 444,117 | 432,432 |
Government National Mortgage Association Certificates and Obligations (GNMA) [Member] | ||
Investments (Textual) [Abstract] | ||
Fair value of issued securities | $137,856 | $137,867 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | $7,364,281 | $7,158,242 | ||
Fair Value | 7,364,281 | 7,158,242 | ||
Investments, Carrying Amount | 7,621,212 | 7,403,467 | ||
Investments, Fair Value | 149,965 | 149,792 | ||
Separate Account (variable annuity) assets | 1,865,240 | [1] | 1,813,557 | [1] |
Separate Account (variable annuity) assets, Fair Value | 1,865,240 | [1] | 1,813,557 | [1] |
Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 7,065,799 | 6,893,090 | ||
Fair Value | 7,065,799 | 6,893,090 | ||
Short-term investments [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Carrying Amount | 181,004 | 142,039 | ||
Investments, Fair Value | 181,004 | 142,039 | ||
Mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 541,360 | 535,726 | ||
Fair Value | 541,360 | 535,726 | ||
Other, including U.S. Treasury Securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 576,469 | 538,199 | ||
Fair Value | 576,469 | 538,199 | ||
Municipal bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 1,685,086 | 1,647,822 | ||
Fair Value | 1,685,086 | 1,647,822 | ||
Foreign government bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 65,081 | 59,536 | ||
Fair Value | 65,081 | 59,536 | ||
Corporate bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 2,841,062 | 2,834,749 | ||
Fair Value | 2,841,062 | 2,834,749 | ||
Other mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 1,356,741 | 1,277,058 | ||
Fair Value | 1,356,741 | 1,277,058 | ||
Equity securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Carrying Amount | 105,066 | 110,655 | ||
Fair Value | 105,066 | 110,655 | ||
Other Investment [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Carrying Amount | 12,412 | 12,458 | ||
Investments, Fair Value | 12,412 | 12,458 | ||
Other Policyholders Funds, embedded derivatives [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Financial Liabilities Other policyholders funds, embedded derivatives, Fair Value | 22,040 | 20,049 | ||
Financial Liabilities Other policyholders funds, embedded derivatives, Carrying Value | 22,040 | 20,049 | ||
Level 1 [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 299,715 | 262,560 | ||
Investments, Fair Value | 0 | 0 | ||
Separate Account (variable annuity) assets, Fair Value | 1,865,240 | [1] | 1,813,557 | [1] |
Level 1 [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 28,364 | 28,381 | ||
Level 1 [Member] | Short-term investments [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Fair Value | 181,004 | 142,039 | ||
Level 1 [Member] | Mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 1 [Member] | Other, including U.S. Treasury Securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 17,995 | 17,857 | ||
Level 1 [Member] | Municipal bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 1 [Member] | Foreign government bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 1 [Member] | Corporate bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 10,369 | 10,524 | ||
Level 1 [Member] | Other mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 1 [Member] | Equity securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 90,347 | 92,140 | ||
Level 1 [Member] | Other Investment [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Fair Value | 0 | 0 | ||
Level 1 [Member] | Other Policyholders Funds, embedded derivatives [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Financial Liabilities Other policyholders funds, embedded derivatives, Fair Value | 0 | 0 | ||
Level 2 [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 6,905,803 | 6,724,382 | ||
Investments, Fair Value | 0 | 0 | ||
Separate Account (variable annuity) assets, Fair Value | 0 | [1] | 0 | [1] |
Level 2 [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 6,878,678 | 6,693,415 | ||
Level 2 [Member] | Short-term investments [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Fair Value | 0 | 0 | ||
Level 2 [Member] | Mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 541,360 | 535,726 | ||
Level 2 [Member] | Other, including U.S. Treasury Securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 558,474 | 520,342 | ||
Level 2 [Member] | Municipal bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 1,671,201 | 1,634,194 | ||
Level 2 [Member] | Foreign government bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 65,081 | 59,536 | ||
Level 2 [Member] | Corporate bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 2,758,415 | 2,749,508 | ||
Level 2 [Member] | Other mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 1,284,147 | 1,194,109 | ||
Level 2 [Member] | Equity securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 14,713 | 18,509 | ||
Level 2 [Member] | Other Investment [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Fair Value | 12,412 | 12,458 | ||
Level 2 [Member] | Other Policyholders Funds, embedded derivatives [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Financial Liabilities Other policyholders funds, embedded derivatives, Fair Value | 0 | 0 | ||
Level 3 [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 158,763 | 171,300 | ||
Investments, Fair Value | 149,965 | 149,792 | ||
Separate Account (variable annuity) assets, Fair Value | 0 | [1] | 0 | [1] |
Level 3 [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 158,757 | 171,294 | ||
Level 3 [Member] | Short-term investments [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Fair Value | 0 | 0 | ||
Level 3 [Member] | Mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 3 [Member] | Other, including U.S. Treasury Securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 3 [Member] | Municipal bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 13,885 | 13,628 | ||
Level 3 [Member] | Foreign government bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 0 | 0 | ||
Level 3 [Member] | Corporate bonds [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 72,278 | 74,717 | ||
Level 3 [Member] | Other mortgage-backed securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 72,594 | 82,949 | ||
Level 3 [Member] | Equity securities [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Fair Value | 6 | 6 | ||
Level 3 [Member] | Other Investment [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Investments, Fair Value | 0 | 0 | ||
Level 3 [Member] | Other Policyholders Funds, embedded derivatives [Member] | Recurring [Member] | ||||
U.S. Government and federally sponsored agency obligations: | ||||
Financial Liabilities Other policyholders funds, embedded derivatives, Fair Value | $22,040 | $20,049 | ||
[1] | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 1) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Financial Assets | ||||
Beginning balance | $171,300 | $109,535 | ||
Transfers into Level 3 | 2,356 | [1] | 17,164 | [1] |
Transfers out of Level 3 | -9,664 | [1] | -519 | [1] |
Total gains or losses | ||||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 735 | 1,296 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -5,964 | -1,936 | ||
Ending balance | 158,763 | 125,540 | ||
Financial Liabilities | ||||
Beginning balance | 20,049 | [2] | 0 | [2] |
Transfers into Level 3 | 0 | [1],[2] | 0 | [1],[2] |
Transfers out of Level 3 | 0 | [1],[2] | 0 | [1],[2] |
Gain Or Losses Net [Abstract] | ||||
Net realized gains (losses) included in net income | -439 | [2] | 12 | [2] |
Net unrealized gains (losses) included in other comprehensive income | 0 | [2] | 0 | [2] |
Purchases | 0 | [2] | 0 | [2] |
Issuances | 2,964 | [2] | 2,735 | [2] |
Sales | 0 | [2] | 0 | [2] |
Settlements | 0 | [2] | 0 | [2] |
Paydowns, maturities and distributions | -534 | [2] | 0 | [2] |
Ending balance | 22,040 | [2] | 2,747 | [2] |
Municipal bonds [Member] | ||||
Financial Assets | ||||
Beginning balance | 13,628 | 2,694 | ||
Transfers into Level 3 | 0 | [1] | 10,055 | [1] |
Transfers out of Level 3 | 0 | [1] | 0 | [1] |
Total gains or losses | ||||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 380 | 98 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -123 | -68 | ||
Ending balance | 13,885 | 12,779 | ||
Corporate bonds [Member] | ||||
Financial Assets | ||||
Beginning balance | 74,717 | 60,826 | ||
Transfers into Level 3 | 1,895 | [1] | 0 | [1] |
Transfers out of Level 3 | 0 | [1] | 0 | [1] |
Total gains or losses | ||||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 352 | 1,014 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -4,686 | -1,636 | ||
Ending balance | 72,278 | 60,204 | ||
Other mortgage-backed securities [Member] | ||||
Financial Assets | ||||
Beginning balance | 82,949 | 46,009 | ||
Transfers into Level 3 | 461 | [1] | 7,109 | [1] |
Transfers out of Level 3 | -9,664 | [1] | -519 | [1] |
Total gains or losses | ||||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 3 | 184 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -1,155 | -232 | ||
Ending balance | 72,594 | 52,551 | ||
Total Fixed Maturities [Member] | ||||
Financial Assets | ||||
Beginning balance | 171,294 | 109,529 | ||
Transfers into Level 3 | 2,356 | [1] | 17,164 | [1] |
Transfers out of Level 3 | -9,664 | [1] | -519 | [1] |
Total gains or losses | ||||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 735 | 1,296 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -5,964 | -1,936 | ||
Ending balance | 158,757 | 125,534 | ||
Equity securities [Member] | ||||
Financial Assets | ||||
Beginning balance | 6 | 6 | ||
Transfers into Level 3 | 0 | [1] | 0 | [1] |
Transfers out of Level 3 | 0 | [1] | 0 | [1] |
Total gains or losses | ||||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 0 | 0 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | 0 | 0 | ||
Ending balance | $6 | $6 | ||
[1] | Transfers into and out of Level 3 during the three months ended March 31, 2015 and 2014 were attributable to [changes in the availability of observable market information for individual fixed maturity securities]. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. | |||
[2] | Represents embedded derivatives, all related to the Company’s fixed indexed annuity (“FIAâ€) products, reported in Other Policyholder Funds in the Company’s Consolidated Balance Sheets. |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Investments | ||
Other investments, Carrying Amount | $145,574 | $145,409 |
Other investments, Fair Value | 149,965 | 149,792 |
Financial Liabilities | ||
Fixed annuity contract liabilities, Carrying Amount | 3,847,694 | 3,774,457 |
Fixed annuity contract liabilities, Fair value | 3,762,743 | 3,691,123 |
Policyholder account balances on interest-sensitive life contracts, Carrying Amount | 77,051 | 77,415 |
Policyholder account balances on interest-sensitive life contracts, Fair value | 81,079 | 81,461 |
Other policyholder funds, Carrying Amount | 585,582 | 586,689 |
Other policyholder funds, Fair Value | 585,582 | 586,689 |
Short-term debt, Carrying Amount | 38,000 | 38,000 |
Short-term debt, Fair Value | 38,000 | 38,000 |
Long-term debt, Carrying Amount | 199,955 | 199,939 |
Long-term debt, Fair Value | 207,315 | 209,495 |
Other liabilities, repurchase agreement obligations, Carrying Amount | 0 | 0 |
Other liabilities, repurchase agreement obligations, Fair Value | 0 | 0 |
Level 1 [Member] | ||
Investments | ||
Other investments, Fair Value | 0 | 0 |
Financial Liabilities | ||
Fixed annuity contract liabilities, Fair value | 0 | 0 |
Policyholder account balances on interest-sensitive life contracts, Fair value | 0 | 0 |
Other policyholder funds, Fair Value | 0 | 0 |
Short-term debt, Fair Value | 0 | 0 |
Long-term debt, Fair Value | 207,315 | 209,495 |
Other liabilities, repurchase agreement obligations, Fair Value | 0 | 0 |
Level 2 [Member] | ||
Investments | ||
Other investments, Fair Value | 0 | 0 |
Financial Liabilities | ||
Fixed annuity contract liabilities, Fair value | 0 | 0 |
Policyholder account balances on interest-sensitive life contracts, Fair value | 0 | 0 |
Other policyholder funds, Fair Value | 500,111 | 500,080 |
Short-term debt, Fair Value | 38,000 | 38,000 |
Long-term debt, Fair Value | 0 | 0 |
Other liabilities, repurchase agreement obligations, Fair Value | 0 | 0 |
Level 3 [Member] | ||
Investments | ||
Other investments, Fair Value | 149,965 | 149,792 |
Financial Liabilities | ||
Fixed annuity contract liabilities, Fair value | 3,762,743 | 3,691,123 |
Policyholder account balances on interest-sensitive life contracts, Fair value | 81,079 | 81,461 |
Other policyholder funds, Fair Value | 85,471 | 86,609 |
Short-term debt, Fair Value | 0 | 0 |
Long-term debt, Fair Value | 0 | 0 |
Other liabilities, repurchase agreement obligations, Fair Value | $0 | $0 |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments (Details Textual) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Fair Value of Financial Instruments (Textual) [Abstract] | ||
Embedded Derivative, Gain (Loss) on Embedded Derivative Total | $439 | ($12) |
Level 3 [Member] | ||
Fair Value of Financial Instruments (Textual) [Abstract] | ||
Embedded Derivative, Gain (Loss) on Embedded Derivative Total | $439 | ($12) |
Percentage Of Invested Assets In Total Investment Portfolio Level3 Recurring | 2.10% |
Debt_Details
Debt (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Short-term debt: | ||||
Bank Credit Facility | $38,000 | $38,000 | ||
Long-term debt, current and noncurrent: | ||||
Long-term debt | 199,955 | 199,939 | ||
Total | 237,955 | [1] | 237,939 | [1] |
Senior Notes 2015 [Member] | Senior Note 6.05 % [Member] | ||||
Long-term debt, current and noncurrent: | ||||
Long-term debt | 74,995 | [1] | 74,989 | [1] |
Senior Notes 2016 [Member] | Senior Note 6.85 % [Member] | ||||
Long-term debt, current and noncurrent: | ||||
Long-term debt | $124,960 | [1] | $124,950 | [1] |
[1] | The Company designates debt obligations as “long-term†based on maturity date at issuance. |
Debt_Details_Textual
Debt (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Current Unsecured Bank Credit Facility [Member] | ||
Debt (Textual) [Abstract] | ||
Line of Credit Facility, Expiration Date | 30-Jul-19 | |
Senior Notes 2015 [Member] | Senior Note 6.05 % [Member] | ||
Debt (Textual) [Abstract] | ||
Unaccrued discount | $5 | $11 |
Senior Notes | 6.05% | |
Aggregate principal amount | 75,000 | 75,000 |
Maturity date of Senior note | 15-Jun-15 | 15-Jun-15 |
Imputed rate | 6.10% | 6.10% |
Senior Notes 2016 [Member] | Senior Note 6.85 % [Member] | ||
Debt (Textual) [Abstract] | ||
Unaccrued discount | 40 | 50 |
Senior Notes | 6.85% | |
Aggregate principal amount | $125,000 | $125,000 |
Maturity date of Senior note | 15-Apr-16 | 15-Apr-16 |
Imputed rate | 6.90% | 6.90% |
Reinsurance_Details
Reinsurance (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Effects of reinsurance on premiums and benefits | ||
Premiums written and contract deposits, Gross Amount | $311,047 | $266,437 |
Premiums written and contract deposits, Ceded to Other Companies | 6,124 | 6,631 |
Premiums written and contract deposits, Assumed from Other Companies | 812 | 469 |
Premiums written and contract deposits, Net Amount | 305,735 | 260,275 |
Premiums and contract charges earned, Gross Amount | 185,196 | 181,733 |
Premiums and contract charges earned, Ceded to Other Companies | 6,315 | 6,893 |
Premiums and contract charges earned, Assumed from Other Companies | 858 | 563 |
Premiums and contract charges earned, Net Amount | 179,739 | 175,403 |
Benefits, claims and settlement expenses, Gross Amount | 115,840 | 114,877 |
Benefits, claims and settlement expenses, Ceded to Other Companies | 2,570 | 3,445 |
Benefits, claims and settlement expenses, Assumed from Other Companies | 749 | 556 |
Benefits, claims and settlement expenses, Net Amount | $114,019 | $111,988 |
Commitments_Details
Commitments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Outstanding commitments to: | ||
Purchase Commitment, Remaining Minimum Amount Committed | $29,856 | $39,689 |
Lend funds under bridge loans | 10,381 | 10,567 |
Total | $40,237 | $50,256 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Summarized financial information for these segments | |||
Insurance premiums and contract charges earned | $179,739 | $175,403 | |
Net investment income | 83,313 | 83,044 | |
Net income (loss) | 34,275 | 28,366 | |
Assets | 10,074,419 | 9,768,527 | |
Property and casualty [Member] | |||
Summarized financial information for these segments | |||
Insurance premiums and contract charges earned | 146,749 | 143,892 | |
Net investment income | 9,433 | 9,285 | |
Net income (loss) | 17,623 | 14,027 | |
Assets | 1,144,361 | 1,107,962 | |
Annuity [Member] | |||
Summarized financial information for these segments | |||
Insurance premiums and contract charges earned | 6,223 | 5,924 | |
Net investment income | 56,392 | 55,857 | |
Net income (loss) | 12,510 | 12,239 | |
Assets | 6,898,018 | 6,683,473 | |
Life [Member] | |||
Summarized financial information for these segments | |||
Insurance premiums and contract charges earned | 26,767 | 25,587 | |
Net investment income | 17,708 | 18,134 | |
Net income (loss) | 3,385 | 3,882 | |
Assets | 1,918,822 | 1,858,150 | |
Corporate and other [Member] | |||
Summarized financial information for these segments | |||
Net investment income | 6 | 2 | |
Net income (loss) | 757 | -1,782 | |
Assets | 140,578 | 155,678 | |
Intersegment eliminations [Member] | |||
Summarized financial information for these segments | |||
Net investment income | -226 | -234 | |
Assets | ($27,360) | ($36,736) |
Derivative_Instruments_Details
Derivative Instruments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Derivative instruments, included in Short-term and Other Investments | $2,412 | $2,458 |
Liabilities | ||
Fixed indexed annuities - embedded derivatives, included in Other Policyholder Funds | $22,040 | $20,049 |
Derivative_Instruments_Details1
Derivative Instruments (Details 1) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Change in fair value of derivatives: | ||||
Net realized investment gains (losses) | ($205) | [1] | $14 | [1] |
Change in fair value of embedded derivatives: | ||||
Net realized investment gains (losses) | $439 | ($12) | ||
[1] | Includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open options. |
Derivative_Instruments_Details2
Derivative Instruments (Details 2) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | |||
Notional Amount | 82,400 | $66,600 | |
Fair Value | 2,412 | 2,458 | |
Bank of America, N.A. [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 7,800 | 8,700 | |
Fair Value | 203 | 439 | |
Credit Suisse International [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 31,200 | 27,500 | |
Fair Value | 1,090 | 1,193 | |
Societe Generale [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 38,400 | 25,400 | |
Fair Value | 1,046 | 756 | |
Barclays Bank PLC [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 5,000 | 5,000 | |
Fair Value | 73 | $70 | |
Moody's, A2 Rating [Member] | Bank of America, N.A. [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A2 | [1] | |
Moody's, A2 Rating [Member] | Societe Generale [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A2 | [1] | |
Moody's, A2 Rating [Member] | Barclays Bank PLC [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A2 | [1] | |
Moody's, A1 Rating [Member] | Credit Suisse International [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A1 | [1] | |
Standard & Poor's, A Rating [Member] | Bank of America, N.A. [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A | [1] | |
Standard & Poor's, A Rating [Member] | Credit Suisse International [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A | [1] | |
Standard & Poor's, A Rating [Member] | Societe Generale [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A | [1] | |
Standard & Poor's, A Rating [Member] | Barclays Bank PLC [Member] | |||
Derivative [Line Items] | |||
Credit Rating | A | [1] | |
[1] | As assigned by Standard & Poor’s Corporation (“S&Pâ€) and Moody’s Investors Service, Inc. (“Moody’sâ€). |
Derivative_Instruments_Details3
Derivative Instruments (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Maximum Exposure | $235 | $503 |
Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value of Collateral | $2,177 | $1,955 |