Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document Information [Line Items] | ' |
Document Type | 'POS AM |
Amendment Flag | 'false |
Document Period End Date | 31-Dec-13 |
Entity Registrant Name | 'LINCOLN BENEFIT LIFE CO |
Entity Central Index Key | '0000910739 |
Entity Filer Category | 'Non-accelerated Filer |
Statements_of_Operations_and_C
Statements of Operations and Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | ' | ' | ' |
Net investment income | $10,935 | $11,590 | $11,836 |
Realized capital gains and losses | 0 | 626 | 2,075 |
Income from operations before income tax expense | 10,935 | 12,216 | 13,911 |
Income tax expense | 3,825 | 4,273 | 4,861 |
Net income | 7,110 | 7,943 | 9,050 |
Other comprehensive (loss) income, after-tax | ' | ' | ' |
Change in unrealized net capital gains and losses | -9,933 | 247 | 3,411 |
Comprehensive (loss) income | ($2,823) | $8,190 | $12,461 |
Statements_of_Financial_Positi
Statements of Financial Position (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Investments | ' | ' |
Fixed income securities, at fair value (amortized cost $284,928 and $309,324) | $290,882 | $330,559 |
Short-term, at fair value (amortized cost $55,959 and $24,202) | 55,959 | 24,203 |
Total investments | 346,841 | 354,762 |
Cash | 5,100 | 13,073 |
Receivable from affiliates, net | 66 | ' |
Other assets | 83,669 | 87,044 |
Separate Accounts | 1,700,566 | 1,625,669 |
Total assets | 18,844,833 | 19,781,989 |
Liabilities | ' | ' |
Contractholder funds | 13,124,115 | 14,255,844 |
Reserve for life-contingent contract benefits | 3,557,411 | 3,424,679 |
Unearned premiums | 11,916 | 13,410 |
Deferred income taxes | 2,564 | 7,990 |
Payable to affiliates, net | ' | 17,189 |
Current income taxes payable | 3,906 | 4,158 |
Other liabilities and accrued expenses | 100,660 | 86,532 |
Separate Accounts | 1,700,566 | 1,625,669 |
Total liabilities | 18,501,138 | 19,435,471 |
Commitments and Contingent Liabilities (Note 9) | ' | ' |
Common stock, $100 par value, 30 thousand shares authorized, 25 thousand shares issued and outstanding | 2,500 | 2,500 |
Additional capital paid-in | 180,000 | 180,000 |
Retained income | 157,325 | 150,215 |
Accumulated other comprehensive income: | ' | ' |
Unrealized net capital gains and losses | 3,870 | 13,803 |
Total accumulated other comprehensive income | 3,870 | 13,803 |
Total shareholder's equity | 343,695 | 346,518 |
Total liabilities and shareholder's equity | 18,844,833 | 19,781,989 |
Allstate Life Insurance Company and affiliate | ' | ' |
Investments | ' | ' |
Reinsurance recoverable | 14,518,174 | 15,553,945 |
Non-affiliates | ' | ' |
Investments | ' | ' |
Reinsurance recoverable | $2,190,417 | $2,147,496 |
Statements_of_Financial_Positi1
Statements of Financial Position (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Fixed income securities, amortized cost | $284,928 | $309,324 |
Short-term, amortized cost | $55,959 | $24,202 |
Common stock, par value | $100 | $100 |
Common stock, shares authorized | 30 | 30 |
Common stock, shares issued | 25 | 25 |
Common stock, shares outstanding | 25 | 25 |
Statement_of_Shareholders_Equi
Statement of Shareholders' Equity (USD $) | Total | Common stock | Additional capital paid-in | Retained income | Accumulated other comprehensive income |
In Thousands | |||||
Balance at Dec. 31, 2010 | ' | ' | ' | $133,222 | $10,145 |
Net income | 9,050 | ' | ' | 9,050 | ' |
Change in unrealized net capital gains and losses | 3,411 | ' | ' | ' | 3,411 |
Balance at Dec. 31, 2011 | 338,328 | 2,500 | 180,000 | 142,272 | 13,556 |
Net income | 7,943 | ' | ' | 7,943 | ' |
Change in unrealized net capital gains and losses | 247 | ' | ' | ' | 247 |
Balance at Dec. 31, 2012 | 346,518 | 2,500 | 180,000 | 150,215 | 13,803 |
Net income | 7,110 | ' | ' | 7,110 | ' |
Change in unrealized net capital gains and losses | -9,933 | ' | ' | ' | -9,933 |
Balance at Dec. 31, 2013 | $343,695 | $2,500 | $180,000 | $157,325 | $3,870 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' |
Net income | $7,110 | $7,943 | $9,050 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Amortization and other non-cash items | 630 | 781 | 1,175 |
Realized capital gains and losses | 0 | -626 | -2,075 |
Changes in: | ' | ' | ' |
Policy benefits and other insurance reserves | -6,147 | 14,398 | -22,072 |
Income taxes | -329 | -516 | 476 |
Receivable from/payable to affiliates, net | -17,255 | 25,752 | -13,494 |
Other operating assets and liabilities | 16,007 | -32,761 | 37,802 |
Net cash provided by operating activities | 16 | 14,971 | 10,862 |
Cash flows from investing activities | ' | ' | ' |
Proceeds from sales of fixed income securities | 9,170 | 25,367 | 44,880 |
Collections on fixed income securities | 53,475 | 29,154 | 25,268 |
Purchases of fixed income securities | -38,896 | -51,209 | -77,175 |
Change in short-term investments, net | -31,738 | -11,216 | -1,379 |
Net cash used in investing activities | -7,989 | -7,904 | -8,406 |
Net (decrease) increase in cash | -7,973 | 7,067 | 2,456 |
Cash at beginning of year | 13,073 | 6,006 | 3,550 |
Cash at end of year | $5,100 | $13,073 | $6,006 |
General
General | 12 Months Ended |
Dec. 31, 2013 | |
General | ' |
1. General | |
Basis of presentation | |
The accompanying financial statements include the accounts of Lincoln Benefit Life Company (the “Company”), a wholly owned subsidiary of Allstate Life Insurance Company (“ALIC”), which is wholly owned by Allstate Insurance Company (“AIC”). All of the outstanding common stock of AIC is owned by Allstate Insurance Holdings, LLC, a wholly owned subsidiary of The Allstate Corporation (the “Corporation”). These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). | |
To conform to the current year presentation, certain amounts in the prior year notes to financial statements have been reclassified. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |
Pending change in ownership | |
On July 17, 2013, ALIC entered into a definitive agreement with Resolution Life Holdings, Inc. to sell the Company, the Company’s life insurance business generated through independent master brokerage agencies, and all of the Company’s deferred fixed annuity and long-term care insurance business. The transaction is subject to regulatory approvals and other customary closing conditions. The Company expects the closing to occur in April 2014. On or before closing, the Company also expects to recapture the business being sold that was ceded to ALIC, subject to regulatory approval. | |
Nature of operations | |
The Company sells interest-sensitive, traditional and variable life insurance products through Allstate exclusive agencies and exclusive financial specialists. Prior to July 18, 2013, the Company sold interest-sensitive, traditional and variable life insurance, and fixed annuities including deferred and immediate through independent master brokerage agencies. Effective January 1, 2014, the Company no longer offers fixed annuities such as deferred and immediate annuities. | |
The Company is authorized to sell life insurance and retirement products in all states except New York, as well as in the District of Columbia, the U.S. Virgin Islands and Guam. For 2013, the top geographic locations for statutory premiums and annuity considerations were California, Texas and Florida. No other jurisdiction accounted for more than 5% of statutory premiums and annuity considerations. All statutory premiums and annuity considerations are ceded under reinsurance agreements. | |
The Company has exposure to market risk as a result of its investment portfolio. Market risk is the risk that the Company will incur realized and unrealized net capital losses due to adverse changes in interest rates and credit spreads. The Company also has certain exposures to changes in equity prices in its equity-indexed annuities and separate accounts liabilities, which are transferred to ALIC in accordance with reinsurance agreements. Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of its interest bearing assets. This risk arises from the Company’s investment in interest-sensitive assets. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key risk-free reference yields. Credit spread risk is the risk that the Company will incur a loss due to adverse changes in credit spreads. This risk arises from the Company’s investment in spread-sensitive fixed income assets. | |
The Company monitors economic and regulatory developments that have the potential to impact its business. Federal and state laws and regulations affect the taxation of insurance companies and life insurance and annuity products. Congress and various state legislatures from time to time consider legislation that would reduce or eliminate the favorable policyholder tax treatment currently applicable to life insurance and annuities. Congress and various state legislatures also consider proposals to reduce the taxation of certain products or investments that may compete with life insurance or annuities. Legislation that increases the taxation on insurance products or reduces the taxation on competing products could lessen the advantage or create a disadvantage for certain of the Company’s products making them less competitive. Such proposals, if adopted, could have an adverse effect on the Company’s financial position or ability to sell such products and could result in the surrender of some existing contracts and policies. In addition, changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2013 | |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies | |
Investments | |
Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”). Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. Cash received from calls, principal payments and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs, including prepayments, is reflected as a component of investment collections within the Statements of Cash Flows. | |
Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value. | |
Investment income primarily consists of interest and is recognized on an accrual basis using the effective yield method. Interest income for RMBS and CMBS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS and CMBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. | |
Realized capital gains and losses include gains and losses on investment sales and write-downs in value due to other-than-temporary declines in fair value. Realized capital gains and losses on investment sales, including principal payments, are determined on a specific identification basis. | |
Recognition of premium revenues and contract charges, and related benefits and interest credited | |
The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, Lincoln Benefit Reinsurance Company (“LB Re”, an affiliate of the Company) and non-affiliated reinsurers (see Notes 3 and 8). Amounts reflected in the Statements of Operations and Comprehensive Income are presented net of reinsurance. | |
Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy. | |
Immediate annuities with life contingencies provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract. | |
Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. | |
Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities, equity-indexed annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. | |
Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life and annuities are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index. | |
Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. | |
Reinsurance | |
The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, LB Re and non-affiliated reinsurers (see Notes 3 and 8). Reinsurance recoverables and the related reserve for life-contingent contract benefits and contractholder funds are reported separately in the Statements of Financial Position. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate. | |
Investment income earned on the assets that support contractholder funds and the reserve for life-contingent contract benefits is not included in the Company’s financial statements as those assets are owned and managed by ALIC under the terms of the reinsurance agreements. | |
Income taxes | |
The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains and losses, accrued expenses and reinsurance recoverables. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized. | |
Reserve for life-contingent contract benefits | |
The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance and life-contingent immediate annuities, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. | |
Contractholder funds | |
Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on variable annuity contracts. | |
Separate accounts | |
Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows. | |
Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. The risk and associated cost of these contract guarantees are ceded to ALIC in accordance with the reinsurance agreements. | |
Adopted accounting standard | |
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income | |
In February 2013, the Financial Accounting Standards Board issued guidance requiring expanded disclosures about the amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by income statement line item but only if the amount reclassified is required under accounting principles generally accepted in the United States of America (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about those amounts is required. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Related Party Transactions | ' | ||||||||||||
3. Related Party Transactions | |||||||||||||
Business operations | |||||||||||||
The Company uses services performed by its affiliates, AIC, ALIC and Allstate Investments LLC, and business facilities owned or leased and operated by AIC in conducting its business activities. In addition, the Company shares the services of employees with AIC. The Company reimburses its affiliates for the operating expenses incurred on behalf of the Company. The Company is charged for the cost of these operating expenses based on the level of services provided. Operating expenses allocated to the Company were $249.7 million, $241.8 million and $204.8 million in 2013, 2012 and 2011, respectively. Of these costs, the Company retains investment related expenses on the invested assets that are not transferred under the reinsurance agreements. All other costs are ceded to ALIC under the reinsurance agreements. | |||||||||||||
Broker-Dealer agreements | |||||||||||||
The Company has a service agreement with Allstate Distributors, LLC (“ADLLC”), a broker-dealer company owned by ALIC, whereby ADLLC promotes and markets products sold by the Company. In return for these services, the Company recorded expense of $71 thousand, $80 thousand and $7.2 million in 2013, 2012 and 2011, respectively, that was ceded to ALIC under the terms of the reinsurance agreements. | |||||||||||||
The Company receives distribution services from Allstate Financial Services, LLC, an affiliated broker-dealer company, for certain annuity and variable life insurance contracts sold by Allstate exclusive agencies. For these services, the Company incurred commission and other distribution expenses of $7.7 million, $6.4 million and $7.5 million in 2013, 2012 and 2011, respectively, that were ceded to ALIC. | |||||||||||||
Reinsurance | |||||||||||||
The following table summarizes amounts that were ceded to ALIC under reinsurance agreements and reported net in the Statements of Operations and Comprehensive Income. | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Premiums and contract charges | $ | 962,576 | $ | 908,459 | $ | 833,149 | |||||||
Interest credited to contractholder funds, contract benefits and expenses | 1,505,010 | 1,369,305 | 1,408,953 | ||||||||||
Reinsurance recoverables due from ALIC totaled $14.52 billion and $15.55 billion as of December 31, 2013 and 2012, respectively. | |||||||||||||
In September 2012, the Company entered into a coinsurance reinsurance agreement with LB Re to cede certain interest-sensitive life insurance policies to LB Re. Reinsurance recoverables due from LB Re totaled $1.9 million and $2.0 million as of December 31, 2013 and 2012, respectively. | |||||||||||||
Income taxes | |||||||||||||
The Company is a party to a federal income tax allocation agreement with the Corporation (see Note 10). | |||||||||||||
Intercompany loan agreement | |||||||||||||
The Company has an intercompany loan agreement with the Corporation. The amount of intercompany loans available to the Company is at the discretion of the Corporation. The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings. The Company had no amounts outstanding under the intercompany loan agreement as of December 31, 2013 or 2012. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||
4. Investments | |||||||||||||||||||||||||||||
Fair values | |||||||||||||||||||||||||||||
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: | |||||||||||||||||||||||||||||
Amortized | Gross unrealized | Fair | |||||||||||||||||||||||||||
($ in thousands) | cost | Gains | Losses | value | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
U.S. government and agencies | $ | 70,790 | $ | 3,113 | $ | (57 | ) | $ | 73,846 | ||||||||||||||||||||
Municipal | 2,499 | 270 | — | 2,769 | |||||||||||||||||||||||||
Corporate | 190,186 | 5,784 | (3,993 | ) | 191,977 | ||||||||||||||||||||||||
Foreign government | 4,999 | 165 | — | 5,164 | |||||||||||||||||||||||||
RMBS | 13,866 | 584 | — | 14,450 | |||||||||||||||||||||||||
CMBS | 2,588 | 88 | — | 2,676 | |||||||||||||||||||||||||
Total fixed income securities | $ | 284,928 | $ | 10,004 | $ | (4,050 | ) | $ | 290,882 | ||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||
U.S. government and agencies | $ | 86,428 | $ | 5,659 | $ | — | $ | 92,087 | |||||||||||||||||||||
Municipal | 2,499 | 401 | — | 2,900 | |||||||||||||||||||||||||
Corporate | 178,824 | 13,173 | (29 | ) | 191,968 | ||||||||||||||||||||||||
Foreign government | 4,999 | 265 | — | 5,264 | |||||||||||||||||||||||||
RMBS | 28,239 | 1,498 | — | 29,737 | |||||||||||||||||||||||||
CMBS | 8,335 | 268 | — | 8,603 | |||||||||||||||||||||||||
Total fixed income securities | $ | 309,324 | $ | 21,264 | $ | (29 | ) | $ | 330,559 | ||||||||||||||||||||
Scheduled maturities | |||||||||||||||||||||||||||||
The scheduled maturities for fixed income securities are as follows as of December 31, 2013: | |||||||||||||||||||||||||||||
($ in thousands) | Amortized | Fair value | |||||||||||||||||||||||||||
cost | |||||||||||||||||||||||||||||
Due in one year or less | $ | 35,518 | $ | 35,883 | |||||||||||||||||||||||||
Due after one year through five years | 110,661 | 116,264 | |||||||||||||||||||||||||||
Due after five years through ten years | 111,316 | 111,036 | |||||||||||||||||||||||||||
Due after ten years | 10,979 | 10,573 | |||||||||||||||||||||||||||
268,474 | 273,756 | ||||||||||||||||||||||||||||
RMBS and CMBS | 16,454 | 17,126 | |||||||||||||||||||||||||||
Total | $ | 284,928 | $ | 290,882 | |||||||||||||||||||||||||
Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. RMBS and CMBS are shown separately because of the potential for prepayment of principal prior to contractual maturity dates. | |||||||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||||||
Net investment income for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||
Fixed income securities | $ | 11,545 | $ | 12,138 | $ | 12,133 | |||||||||||||||||||||||
Short-term investments | 23 | 20 | 11 | ||||||||||||||||||||||||||
Investment income, before expense | 11,568 | 12,158 | 12,144 | ||||||||||||||||||||||||||
Investment expense | (633 | ) | (568 | ) | (308 | ) | |||||||||||||||||||||||
Net investment income | $ | 10,935 | $ | 11,590 | $ | 11,836 | |||||||||||||||||||||||
Realized capital gains and losses | |||||||||||||||||||||||||||||
Realized capital gains and losses netted to zero in 2013 with gains from sales offsetting impairment write-downs. The Company recognized realized capital gains of $626 thousand and $2.1 million in 2012 and 2011, respectively. Realized capital gains and losses in 2013, 2012 and 2011 included $2 thousand, $19 thousand and $12 thousand, respectively, of other-than-temporary impairment losses related to RMBS, none of which were included in other comprehensive income. No other-than-temporary impairment losses were included in accumulated other comprehensive income as of December 31, 2013 or 2012. | |||||||||||||||||||||||||||||
Gross gains of $3 thousand, $645 thousand and $1.9 million and gross losses of $1 thousand, zero and $3 thousand were realized on sales of fixed income securities during 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
Unrealized net capital gains and losses | |||||||||||||||||||||||||||||
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows: | |||||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||
($ in thousands) | Value | Gains | Losses | gains | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
Fixed income securities | $ | 290,882 | $ | 10,004 | $ | (4,050 | ) | $ | 5,954 | ||||||||||||||||||||
Short-term investments | 55,959 | 1 | (1 | ) | — | ||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 5,954 | ||||||||||||||||||||||||||||
Deferred income taxes | (2,084 | ) | |||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 3,870 | |||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||
December 31, 2012 | value | Gains | Losses | gains | |||||||||||||||||||||||||
Fixed income securities | $ | 330,559 | $ | 21,264 | $ | (29 | ) | $ | 21,235 | ||||||||||||||||||||
Short-term investments | 24,203 | 1 | — | 1 | |||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 21,236 | ||||||||||||||||||||||||||||
Deferred income taxes | (7,433 | ) | |||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 13,803 | |||||||||||||||||||||||||||
Change in unrealized net capital gains and losses | |||||||||||||||||||||||||||||
The change in unrealized net capital gains and losses for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||
Fixed income securities | $ | (15,281 | ) | $ | 380 | $ | 5,247 | ||||||||||||||||||||||
Short-term investments | (1 | ) | 1 | — | |||||||||||||||||||||||||
Total | (15,282 | ) | 381 | 5,247 | |||||||||||||||||||||||||
Deferred income taxes | 5,349 | (134 | ) | (1,836 | ) | ||||||||||||||||||||||||
(Decrease) increase in unrealized net capital gains and losses, after-tax | $ | (9,933 | ) | $ | 247 | $ | 3,411 | ||||||||||||||||||||||
Portfolio monitoring | |||||||||||||||||||||||||||||
The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security whose carrying value may be other-than-temporarily impaired. | |||||||||||||||||||||||||||||
For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, the security’s decline in fair value is considered other than temporary and is recorded in earnings. | |||||||||||||||||||||||||||||
If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value by discounting the best estimate of future cash flows at the security’s original or current effective rate, as appropriate, and compares this to the amortized cost of the security. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss related to other factors recognized in other comprehensive income. | |||||||||||||||||||||||||||||
The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below established thresholds. The process also includes the monitoring of other impairment indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of other-than-temporary impairment for these fixed income securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value is other than temporary are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the length of time and extent to which the fair value has been less than amortized cost. | |||||||||||||||||||||||||||||
The following table summarizes the gross unrealized losses and fair value of fixed income securities by the length of time that individual securities have been in a continuous unrealized loss position. | |||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||
unrealized | |||||||||||||||||||||||||||||
($ in thousands) | Number | Fair | Unrealized | Number | Fair | Unrealized | losses | ||||||||||||||||||||||
of issues | value | losses | of issues | value | losses | ||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
U.S. government and agencies | 1 | $ | 4,942 | $ | (57 | ) | — | $ | — | $ | — | $ | (57 | ) | |||||||||||||||
Corporate | 23 | 75,754 | (3,795 | ) | 1 | 1,770 | (198 | ) | (3,993 | ) | |||||||||||||||||||
Total | 24 | $ | 80,696 | $ | (3,852 | ) | 1 | $ | 1,770 | $ | (198 | ) | $ | (4,050 | ) | ||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||
Corporate | 1 | $ | 1,936 | $ | (29 | ) | — | $ | — | $ | — | $ | (29 | ) | |||||||||||||||
Total | 1 | $ | 1,936 | $ | (29 | ) | — | $ | — | $ | — | $ | (29 | ) | |||||||||||||||
As of December 31, 2013, $4.1 million of unrealized losses are related to investment grade securities with an unrealized loss position less than 20% of amortized cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired. Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P, Fitch, Dominion, Kroll or Realpoint, a rating of aaa, aa, a or bbb from A.M. Best, or a comparable internal rating if an externally provided rating is not available. Unrealized losses on investment grade securities are principally related to increasing risk-free interest rates or widening credit spreads since the time of initial purchase. | |||||||||||||||||||||||||||||
As of December 31, 2013, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis. | |||||||||||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||||||
All of the municipal bond issuers represented in the Company’s municipal bond portfolio were in Washington as of both December 31, 2013 and 2012. | |||||||||||||||||||||||||||||
Concentration of credit risk | |||||||||||||||||||||||||||||
As of December 31, 2013, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company’s shareholder’s equity. | |||||||||||||||||||||||||||||
Other investment information | |||||||||||||||||||||||||||||
As of December 31, 2013, fixed income securities and short-term investments with a carrying value of $9.4 million were on deposit with regulatory authorities as required by law. |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Fair Value of Assets and Liabilities | ' | ||||||||||||||||||||
5. Fair Value of Assets and Liabilities | |||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows: | |||||||||||||||||||||
Level 1: | Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access. | ||||||||||||||||||||
Level 2: | Assets and liabilities whose values are based on the following: | ||||||||||||||||||||
(a) | Quoted prices for similar assets or liabilities in active markets; | ||||||||||||||||||||
(b) | Quoted prices for identical or similar assets or liabilities in markets that are not active; or | ||||||||||||||||||||
(c) | Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. | ||||||||||||||||||||
Level 3: | Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the assets and liabilities. | ||||||||||||||||||||
The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. | |||||||||||||||||||||
The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions. | |||||||||||||||||||||
The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy. The first is where quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources. | |||||||||||||||||||||
The second situation where the Company classifies securities in Level 3 is where specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs. | |||||||||||||||||||||
In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used. | |||||||||||||||||||||
Summary of significant valuation techniques for assets and liabilities measured at fair value on a recurring basis | |||||||||||||||||||||
Level 1 measurements | |||||||||||||||||||||
• | Fixed income securities: Comprise certain U.S. Treasuries. Valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access. | ||||||||||||||||||||
• | Short-term: Comprise actively traded money market funds that have daily quoted net asset values for identical assets that the Company can access. | ||||||||||||||||||||
• | Separate account assets: Comprise actively traded mutual funds that have daily quoted net asset values for identical assets that the Company can access. Net asset values for the actively traded mutual funds in which the separate account assets are invested are obtained daily from the fund managers. | ||||||||||||||||||||
Level 2 measurements | |||||||||||||||||||||
• | Fixed income securities: | ||||||||||||||||||||
U.S. government and agencies: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. | |||||||||||||||||||||
Municipal: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. | |||||||||||||||||||||
Corporate, including privately placed: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. Also included are privately placed securities valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer. | |||||||||||||||||||||
Foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. | |||||||||||||||||||||
RMBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads. | |||||||||||||||||||||
CMBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads. | |||||||||||||||||||||
• | Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. For certain short-term investments, amortized cost is used as the best estimate of fair value. | ||||||||||||||||||||
Level 3 measurements | |||||||||||||||||||||
• | Fixed income securities: | ||||||||||||||||||||
Corporate: Valued based on models that are widely accepted in the financial services industry with certain inputs to the valuation model that are significant to the valuation, but are not market observable. | |||||||||||||||||||||
• | Contractholder funds: Derivatives embedded in certain life and annuity contracts are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs. | ||||||||||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2013. There are no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2013. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance as of | |||||||||||||||||
in active | other | unobservable | December 31, | ||||||||||||||||||
markets for | observable | inputs | 2013 | ||||||||||||||||||
identical assets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 27,520 | $ | 46,326 | $ | — | $ | 73,846 | |||||||||||||
Municipal | — | 2,769 | — | 2,769 | |||||||||||||||||
Corporate | — | 191,977 | — | 191,977 | |||||||||||||||||
Foreign government | — | 5,164 | — | 5,164 | |||||||||||||||||
RMBS | — | 14,450 | — | 14,450 | |||||||||||||||||
CMBS | — | 2,676 | — | 2,676 | |||||||||||||||||
Total fixed income securities | 27,520 | 263,362 | — | 290,882 | |||||||||||||||||
Short-term investments | 20,764 | 35,195 | — | 55,959 | |||||||||||||||||
Separate account assets | 1,700,566 | — | — | 1,700,566 | |||||||||||||||||
Total assets at fair value | $ | 1,748,850 | $ | 298,557 | $ | — | $ | 2,047,407 | |||||||||||||
% of total assets at fair value | 85.4 | % | 14.6 | % | — | % | 100 | % | |||||||||||||
Liabilities: | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (267,859 | ) | $ | (267,859 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (267,859 | ) | $ | (267,859 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2012. There are no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2012. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance as of | |||||||||||||||||
in active | other | unobservable | December 31, | ||||||||||||||||||
markets for | observable | inputs | 2012 | ||||||||||||||||||
identical assets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 34,303 | $ | 57,784 | $ | — | $ | 92,087 | |||||||||||||
Municipal | — | 2,900 | — | 2,900 | |||||||||||||||||
Corporate | — | 191,656 | 312 | 191,968 | |||||||||||||||||
Foreign government | — | 5,264 | — | 5,264 | |||||||||||||||||
RMBS | — | 29,737 | — | 29,737 | |||||||||||||||||
CMBS | — | 8,603 | — | 8,603 | |||||||||||||||||
Total fixed income securities | 34,303 | 295,944 | 312 | 330,559 | |||||||||||||||||
Short-term investments | 18,793 | 5,410 | — | 24,203 | |||||||||||||||||
Separate account assets | 1,625,669 | — | — | 1,625,669 | |||||||||||||||||
Total assets at fair value | $ | 1,678,765 | $ | 301,354 | $ | 312 | $ | 1,980,431 | |||||||||||||
% of total assets at fair value | 84.7 | % | 15.2 | % | 0.1 | % | 100 | % | |||||||||||||
Liabilities: | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (314,926 | ) | $ | (314,926 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (314,926 | ) | $ | (314,926 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. | |||||||||||||||||||||
($ in thousands) | Fair value | Valuation | Unobservable | Range | Weighted | ||||||||||||||||
technique | input | average | |||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Derivatives embedded in life and annuity contracts—Equity-indexed and forward starting options | $ | (258,415 | ) | Stochastic cash | Projected option | 1.0 – 2.0 | % | 1.91 | % | ||||||||||||
flow model | cost | ||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||
Derivatives embedded in life and annuity contracts—Equity-indexed and forward starting options | $ | (295,305 | ) | Stochastic cash | Projected option | 1.0 – 2.0 | % | 1.96 | % | ||||||||||||
flow model | cost | ||||||||||||||||||||
If the projected option cost increased (decreased), it would result in a higher (lower) liability fair value. | |||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013. | |||||||||||||||||||||
($ in thousands) | Total gains (losses) | ||||||||||||||||||||
included in: | |||||||||||||||||||||
Balance as of | Net | OCI | Transfers | Transfers | |||||||||||||||||
December 31, | income(1) | into | out of | ||||||||||||||||||
2012 | Level 3 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 312 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Total recurring Level 3 assets | $ | 312 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (314,926 | ) | $ | 43,244 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (314,926 | ) | $ | 43,244 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | — | $ | — | $ | — | $ | (312 | ) | $ | — | ||||||||||
Total recurring Level 3 assets | $ | — | $ | — | $ | — | $ | (312 | ) | $ | — | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (6,621 | ) | $ | 10,444 | $ | (267,859 | ) | |||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | (6,621 | ) | $ | 10,444 | $ | (267,859 | ) | |||||||||
(1) | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $33.0 million in interest credited to contractholder funds and $10.2 million in contract benefits. These amounts are ceded in accordance with the Company’s reinsurance agreements. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012. | |||||||||||||||||||||
($ in thousands) | Total gains (losses) | ||||||||||||||||||||
included in: | |||||||||||||||||||||
Balance as of | Net | OCI | Transfers | Transfers | |||||||||||||||||
December 31, | income(1) | into | out of | ||||||||||||||||||
2011 | Level 3 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 598 | $ | — | $ | — | $ | — | $ | — | |||||||||||
RMBS | 2,321 | — | — | — | (2,321 | ) | |||||||||||||||
Total recurring Level 3 assets | $ | 2,919 | $ | — | $ | — | $ | — | $ | (2,321 | ) | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (506,678 | ) | $ | 131,054 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (506,678 | ) | $ | 131,054 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | — | $ | — | $ | — | $ | (286 | ) | $ | 312 | ||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
Total recurring Level 3 assets | $ | — | $ | — | $ | — | $ | (286 | ) | $ | 312 | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (11,024 | ) | $ | 71,722 | $ | (314,926 | ) | |||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | (11,024 | ) | $ | 71,722 | $ | (314,926 | ) | |||||||||
(2) | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $125.9 million in interest credited to contractholder funds and $5.1 million in contract benefits. These amounts are ceded in accordance with the Company’s reinsurance agreements. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2011. | |||||||||||||||||||||
($ in thousands) | Total gains (losses) | ||||||||||||||||||||
included in: | |||||||||||||||||||||
Balance as of | Net | OCI | Transfers | Transfers | |||||||||||||||||
December 31, | income(1) | into | out of | ||||||||||||||||||
2010 | Level 3 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 852 | $ | — | $ | 199 | $ | — | $ | (10,199 | ) | ||||||||||
RMBS | 6,880 | (4 | ) | (108 | ) | — | (3,577 | ) | |||||||||||||
CMBS | 1,916 | — | (49 | ) | — | (1,867 | ) | ||||||||||||||
Total recurring Level 3 assets | $ | 9,648 | $ | (4 | ) | $ | 42 | $ | — | $ | (15,643 | ) | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (494,149 | ) | $ | (110,951 | ) | $ | — | $ | — | $ | — | |||||||||
Total recurring Level 3 liabilities | $ | (494,149 | ) | $ | (110,951 | ) | $ | — | $ | — | $ | — | |||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 10,000 | $ | — | $ | — | $ | (254 | ) | $ | 598 | ||||||||||
RMBS | — | — | — | (870 | ) | 2,321 | |||||||||||||||
CMBS | — | — | — | — | — | ||||||||||||||||
Total recurring Level 3 assets | $ | 10,000 | $ | — | $ | — | $ | (1,124 | ) | $ | 2,919 | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (55,559 | ) | $ | 153,981 | $ | (506,678 | ) | |||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | (55,559 | ) | $ | 153,981 | $ | (506,678 | ) | |||||||||
(1) | The amount attributable to fixed income securities is reported in the Statements of Operations and Comprehensive Income as net investment income. The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $(106.6) million in interest credited to contractholder funds and $(4.3) million in contract benefits. These amounts are ceded in accordance with the Company’s reinsurance agreements. | ||||||||||||||||||||
Transfers between level categorizations may occur due to changes in the availability of market observable inputs, which generally are caused by changes in market conditions such as liquidity, trading volume or bid-ask spreads. Transfers between level categorizations may also occur due to changes in the valuation source. For example, in situations where a fair value quote is not provided by the Company’s independent third-party valuation service provider and as a result the price is stale or has been replaced with a broker quote whose inputs have not been corroborated to be market observable, the security is transferred into Level 3. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred. Therefore, for all transfers into Level 3, all realized and changes in unrealized gains and losses in the quarter of transfer are reflected in the Level 3 rollforward table. | |||||||||||||||||||||
There were no transfers between Level 1 and Level 2 during 2013, 2012 or 2011. | |||||||||||||||||||||
During 2011, certain RMBS and CMBS were transferred into Level 2 from Level 3 as a result of increased liquidity in the market and a sustained increase in market activity for these assets. | |||||||||||||||||||||
During 2011, a corporate fixed income security was transferred into Level 2 from Level 3 due to a change in the valuation model to use primarily market observable inputs. Transfers out of Level 3 during 2012 and 2011 included situations where a broker quote was used in the prior period and a fair value quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant. | |||||||||||||||||||||
The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31. | |||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | — | $ | — | $ | (2 | ) | ||||||||||||||
RMBS | — | — | (5 | ) | |||||||||||||||||
Total recurring Level 3 assets | $ | — | $ | — | $ | (7 | ) | ||||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: | |||||||||||||||||||||
Derivatives embedded in life and annuity contracts | $ | 43,244 | $ | 131,054 | $ | (110,951 | ) | ||||||||||||||
Total recurring Level 3 liabilities | $ | 43,244 | $ | 131,054 | $ | (110,951 | ) | ||||||||||||||
The amounts in the table above represent the change in unrealized gains and losses included in net income for the period of time that the asset or liability was determined to be in Level 3. The amounts attributable to fixed income securities are reported in net investment income. The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $33.0 million in interest credited to contractholder funds and $10.2 million in contract benefits in 2013, $125.9 million in interest credited to contractholder funds and $5.1 million in contract benefits in 2012 and $(106.6) million in interest credited to contractholder funds and $(4.3) million in contract benefits in 2011. These amounts are ceded in accordance with the Company’s reinsurance agreements. | |||||||||||||||||||||
As of December 31, 2013 and 2012, financial instruments not carried at fair value included contractholder funds on investment contracts. The carrying value and fair value of contractholder funds on investment contracts were $7.76 billion and $7.66 billion, respectively, as of December 31, 2013 and were $9.16 billion and $9.14 billion, respectively, as of December 31, 2012. The fair value of contractholder funds on investment contracts is based on the terms of the underlying contracts utilizing prevailing market rates for similar contracts adjusted for the Company’s own credit risk. Deferred annuities included in contractholder funds are valued using discounted cash flow models which incorporate market value margins, which are based on the cost of holding economic capital, and the Company’s own credit risk. Immediate annuities without life contingencies are valued at the present value of future benefits using market implied interest rates which include the Company’s own credit risk. The fair value measurements for contractholder funds on investment contracts are categorized as Level 3. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||||
6. Derivative Financial Instruments | |||||||||||||||||
The Company has derivatives embedded in non-derivative host contracts that are required to be separated from the host contracts and accounted for at fair value. The Company’s embedded derivatives are equity options in life and annuity product contracts, which provide equity returns to contractholders, and guaranteed minimum accumulation and withdrawal benefits in variable annuity contracts. The Company does not use derivatives for speculative purposes. | |||||||||||||||||
The following table provides a summary of the volume and fair value positions of embedded derivative financial instruments. None of these derivatives are designated as accounting hedging instruments and all are gross liabilities reported in contractholder funds. | |||||||||||||||||
($ in thousands) | December 31, 2013 | December 31, 2012 | |||||||||||||||
Volume - | Fair | Volume - | Fair | ||||||||||||||
Notional | value | Notional | value | ||||||||||||||
amount | amount | ||||||||||||||||
Equity-indexed and forward starting options in life and annuity product contracts | $ | 2,591,090 | $ | (258,415 | ) | $ | 3,098,496 | $ | (295,305 | ) | |||||||
Guaranteed accumulation benefits | 152,936 | (8,970 | ) | 174,791 | (18,047 | ) | |||||||||||
Guaranteed withdrawal benefits | 22,199 | (474 | ) | 25,186 | (1,574 | ) | |||||||||||
Total derivatives | $ | 2,766,225 | $ | (267,859 | ) | $ | 3,298,473 | $ | (314,926 | ) | |||||||
Gains and losses from valuation and settlements of embedded derivative financial instruments were reported as $36.9 million in interest credited to contractholder funds and $10.2 million in contract benefits in 2013, and $186.6 million in interest credited to contractholder funds and $5.1 million in contract benefits in 2012, which in turn were ceded to ALIC. | |||||||||||||||||
Off-balance-sheet financial instruments | |||||||||||||||||
There were no off-balance-sheet financial instruments as of December 31, 2013 or 2012. |
Reserve_for_LifeContingent_Con
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | ' | ||||||||||||
7. Reserve for Life-Contingent Contract Benefits and Contractholder Funds | |||||||||||||
As of December 31, the reserve for life-contingent contract benefits consists of the following: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Traditional life insurance | $ | 1,548,134 | $ | 1,519,650 | |||||||||
Immediate fixed annuities | 676,565 | 677,986 | |||||||||||
Accident and health insurance | 1,324,268 | 1,217,648 | |||||||||||
Other | 8,444 | 9,395 | |||||||||||
Total reserve for life-contingent contract benefits | $ | 3,557,411 | $ | 3,424,679 | |||||||||
The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits: | |||||||||||||
Product | Mortality | Interest rate | Estimation method | ||||||||||
Traditional life insurance | Actual company experience plus loading | Interest rate | Net level premium | ||||||||||
assumptions range | reserve method using | ||||||||||||
from 2.5% to 8.0% | the Company’s | ||||||||||||
withdrawal experience | |||||||||||||
rates; includes reserves | |||||||||||||
for unpaid claims | |||||||||||||
Immediate fixed annuities | 1983 individual annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications | Interest rate | Present value of | ||||||||||
assumptions range | expected future | ||||||||||||
from 0% to 8.8% | benefits based on | ||||||||||||
historical experience | |||||||||||||
Accident and health insurance | Actual company experience plus loading | Interest rate | Unearned premium; | ||||||||||
assumptions range | additional contract | ||||||||||||
from 4.0% to 5.3% | reserves for mortality | ||||||||||||
risk and unpaid claims | |||||||||||||
Other: | |||||||||||||
Annuity 2000 mortality table with internal modifications | Interest rate | Projected benefit ratio | |||||||||||
Variable annuity guaranteed minimum death benefits | assumptions range | applied to cumulative | |||||||||||
from 4.0% to 5.8% | assessments | ||||||||||||
As of December 31, contractholder funds consist of the following: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Interest-sensitive life insurance | $ | 5,020,265 | $ | 4,814,410 | |||||||||
Investment contracts: | |||||||||||||
Fixed annuities | 7,803,892 | 9,201,641 | |||||||||||
Other investment contracts | 299,958 | 239,793 | |||||||||||
Total contractholder funds | $ | 13,124,115 | $ | 14,255,844 | |||||||||
The following table highlights the key contract provisions relating to contractholder funds: | |||||||||||||
Product | Interest rate | Withdrawal/surrender charges | |||||||||||
Interest-sensitive life insurance | Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.6% to 6.0% for all other products | Either a percentage of account balance or dollar amount grading off generally over 20 years | |||||||||||
Fixed annuities | Interest rates credited range from 0% to 8.8% for immediate annuities; 0% to 7.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 1.0% to 6.0% for all other products | Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 18.7% of fixed annuities are subject to market value adjustment for discretionary withdrawals. | |||||||||||
Other investment contracts: | |||||||||||||
Guaranteed minimum income, accumulation and withdrawal benefits on variable and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities | Interest rates used in establishing reserves range from 1.7% to 10.3% | Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract | |||||||||||
Contractholder funds activity for the years ended December 31 is as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 14,255,844 | $ | 15,489,624 | $ | 17,247,071 | |||||||
Deposits | 1,109,108 | 1,070,374 | 1,007,316 | ||||||||||
Interest credited | 524,801 | 406,805 | 576,331 | ||||||||||
Benefits | (353,687 | ) | (473,329 | ) | (459,991 | ) | |||||||
Surrenders and partial withdrawals | (1,880,495 | ) | (1,703,966 | ) | (2,412,295 | ) | |||||||
Contract charges | (601,609 | ) | (558,519 | ) | (513,068 | ) | |||||||
Net transfers from separate accounts | 18,477 | 16,463 | 18,935 | ||||||||||
Other adjustments | 51,676 | 8,392 | 25,325 | ||||||||||
Balance, end of year | $ | 13,124,115 | $ | 14,255,844 | $ | 15,489,624 | |||||||
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. | |||||||||||||
December 31, | |||||||||||||
($ in millions) | 2013 | 2012 | |||||||||||
In the event of death | |||||||||||||
Separate account value | $ | 877 | $ | 926.1 | |||||||||
Net amount at risk(1) | $ | 63.2 | $ | 101.6 | |||||||||
Average attained age of contractholders | 59 years | 59 years | |||||||||||
At annuitization (includes income benefit guarantees) | |||||||||||||
Separate account value | $ | 170.5 | $ | 168.1 | |||||||||
Net amount at risk(2) | $ | 16.6 | $ | 29.6 | |||||||||
Weighted average waiting period until annuitization options available | None | 1 year | |||||||||||
For cumulative periodic withdrawals | |||||||||||||
Separate account value | $ | 21.8 | $ | 24.8 | |||||||||
Net amount at risk(3) | $ | 0.1 | $ | 0.2 | |||||||||
Accumulation at specified dates | |||||||||||||
Separate account value | $ | 151.1 | $ | 172 | |||||||||
Net amount at risk(4) | $ | 7.3 | $ | 13.7 | |||||||||
Weighted average waiting period until guarantee date | 6 years | 7 years | |||||||||||
(1) | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | ||||||||||||
(2) | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | ||||||||||||
(3) | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | ||||||||||||
(4) | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. | ||||||||||||
As of December 31, 2013, liabilities for guarantees included reserves for variable annuity death benefits of $8.4 million, variable annuity income benefits of $8.7 million, variable annuity accumulation benefits of $9.0 million, variable annuity withdrawal benefits of $0.5 million and interest-sensitive life and fixed annuity guarantees of $281.8 million. As of December 31, 2012, liabilities for guarantees included reserves for variable annuity death benefits of $9.4 million, variable annuity income benefits of $19.5 million, variable annuity accumulation benefits of $18.0 million, variable annuity withdrawal benefits of $1.6 million and interest-sensitive life and fixed annuity guarantees of $200.7 million. |
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reinsurance | ' | ||||||||||||
8. Reinsurance | |||||||||||||
The Company has reinsurance agreements under which it reinsures all of its business to ALIC, LB Re or non-affiliated reinsurers. Under the agreements, premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are reinsured. The Company purchases reinsurance to limit aggregate and single losses on large risks. The Company cedes a portion of the mortality risk on certain life policies under coinsurance agreements to a pool of twelve non-affiliated reinsurers. | |||||||||||||
As of December 31, 2013, 86.9% of the total reinsurance recoverables were related to ALIC and 13.1% were related to non-affiliated reinsurers. As of December 31, 2013 and 2012, 95% and 98%, respectively, of the Company’s non-affiliated reinsurance recoverables are due from companies rated A- or better by S&P. | |||||||||||||
The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 1,331,597 | $ | 1,298,864 | $ | 1,266,264 | |||||||
Assumed | 6,830 | 6,784 | 7,057 | ||||||||||
Ceded: | |||||||||||||
Affiliate | (962,576 | ) | (908,459 | ) | (833,149 | ) | |||||||
Non-affiliate | (375,851 | ) | (397,189 | ) | (440,172 | ) | |||||||
Premiums and contract charges, net of reinsurance | $ | — | $ | — | $ | — | |||||||
The effects of reinsurance on interest credited to contractholder funds, contract benefits and expenses for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 1,938,015 | $ | 1,882,714 | $ | 1,893,124 | |||||||
Assumed | 8,180 | 9,167 | 7,337 | ||||||||||
Ceded: | |||||||||||||
Affiliate | (1,505,010 | ) | (1,369,305 | ) | (1,408,953 | ) | |||||||
Non-affiliate | (441,185 | ) | (522,576 | ) | (491,508 | ) | |||||||
Interest credited to contractholder funds, contract benefits and expenses, net of reinsurance | $ | — | $ | — | $ | — | |||||||
Guarantees_and_Contingent_Liab
Guarantees and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2013 | |
Guarantees and Contingent Liabilities | ' |
9. Guarantees and Contingent Liabilities | |
Guarantees | |
In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations. | |
The aggregate liability balance related to all guarantees was not material as of December 31, 2013. | |
Regulation and Compliance | |
The Company is subject to changing social, economic and regulatory conditions. From time to time, regulatory authorities or legislative bodies seek to impose additional regulations regarding agent and broker compensation, regulate the nature of and amount of investments, and otherwise expand overall regulation of insurance products and the insurance industry. The Company has established procedures and policies to facilitate compliance with laws and regulations, to foster prudent business operations, and to support financial reporting. The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies. As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies. Such modifications, and the reviews that led to them, may be accompanied by payments being made and costs being incurred. The ultimate changes and eventual effects of these actions on the Company’s business, if any, are uncertain. | |
The Company is currently being examined by certain states for compliance with unclaimed property laws. It is possible that this examination may result in additional payments of abandoned funds to states and to changes in the Company’s practices and procedures for the identification of escheatable funds, which could impact benefit payments and reserves, among other consequences; however, it is not likely to have a material effect on the financial statements of the Company. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
10. Income Taxes | |||||||||||||
The Company joins the Corporation and its other subsidiaries (the “Allstate Group”) in the filing of a consolidated federal income tax return and is party to a federal income tax allocation agreement (the “Allstate Tax Sharing Agreement”). Under the Allstate Tax Sharing Agreement, the Company pays to or receives from the Corporation the amount, if any, by which the Allstate Group’s federal income tax liability is affected by virtue of inclusion of the Company in the consolidated federal income tax return. The Company also has a supplemental tax sharing agreement with respect to reinsurance ceded to ALIC to allocate the tax benefits and costs related to such reinsurance. Effectively, these agreements result in the Company’s annual income tax provision being computed, with adjustments, as if the Company filed a separate return, adjusted for the reinsurance ceded to ALIC. | |||||||||||||
The Internal Revenue Service (“IRS”) is currently examining the Allstate Group’s 2011 and 2012 federal income tax returns. The IRS has completed its examination of the Allstate Group’s 2009 and 2010 federal income tax returns and issued a Revenue Agent’s Report on April 15, 2013. The Allstate Group protested certain of the adjustments contained in the report and the case was forwarded to Appeals on June 13, 2013. The IRS has also completed its examinations of the Allstate Group’s federal income tax returns for the years 2005-2008 and a final settlement for those years has been approved by the Joint Committee on Taxation. The Allstate Group’s tax years prior to 2005 have been examined by the IRS and the statute of limitations has expired on those years. Any adjustments that may result from IRS examinations of tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company. | |||||||||||||
The Company had no liability for unrecognized tax benefits as of December 31, 2013, 2012 or 2011, and believes it is reasonably possible that the liability balance will not significantly increase within the next twelve months. No amounts have been accrued for interest or penalties. | |||||||||||||
The components of the deferred income tax assets and liabilities as of December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Deferred assets | |||||||||||||
Reinsurance recoverables | $ | 497 | $ | — | |||||||||
Other assets | 4 | — | |||||||||||
Total deferred assets | 501 | — | |||||||||||
Deferred liabilities | |||||||||||||
Unrealized net capital gains | (2,084 | ) | (7,433 | ) | |||||||||
Accrued expenses | (981 | ) | (524 | ) | |||||||||
Other liabilities | — | (33 | ) | ||||||||||
Total deferred liabilities | (3,065 | ) | (7,990 | ) | |||||||||
Net deferred liability | $ | (2,564 | ) | $ | (7,990 | ) | |||||||
The components of income tax expense for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Current | $ | 3,902 | $ | 4,145 | $ | 4,802 | |||||||
Deferred | (77 | ) | 128 | 59 | |||||||||
Total income tax expense | $ | 3,825 | $ | 4,273 | $ | 4,861 | |||||||
The Company paid income taxes of $4.2 million, $4.8 million and $4.4 million in 2013, 2012 and 2011, respectively. | |||||||||||||
A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
Other | — | — | (0.1 | ) | |||||||||
Effective income tax rate | 35 | % | 35 | % | 34.9 | % | |||||||
Statutory_Financial_Informatio
Statutory Financial Information and Dividend Limitations | 12 Months Ended |
Dec. 31, 2013 | |
Statutory Financial Information and Dividend Limitations | ' |
11. Statutory Financial Information and Dividend Limitations | |
The Company prepares its statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of Nebraska. Prescribed statutory accounting practices include a variety of publications of the National Association of Insurance Commissioners (“NAIC”), as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. | |
The State of Nebraska requires insurance companies domiciled in its state to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the State of Nebraska Insurance Commissioner. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis. | |
Statutory net income was $7.7 million, $8.5 million and $8.6 million in 2013, 2012 and 2011, respectively. Statutory capital and surplus was $332.5 million and $323.9 million as of December 31, 2013 and 2012, respectively. | |
Dividend Limitations | |
The ability of the Company to pay dividends is dependent on business conditions, income, cash requirements and other relevant factors. The payment of shareholder dividends by the Company without the prior approval of the Nebraska Department of Insurance (“NE DOI”) is limited to formula amounts based on net income and capital and surplus, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. The Company did not pay any dividends in 2013. The maximum amount of dividends the Company can pay without prior NE DOI approval during 2014 is $33.2 million. Any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which totaled $159.2 million as of December 31, 2013, and cannot result in capital and surplus being less than the minimum amount required by law. | |
Under state insurance laws, insurance companies are required to maintain paid up capital of not less than the minimum capital requirement applicable to the types of insurance they are authorized to write. Insurance companies are also subject to risk-based capital (“RBC”) requirements adopted by state insurance regulators. A company’s “authorized control level RBC” is calculated using various factors applied to certain financial balances and activity. Companies that do not maintain statutory capital and surplus at a level in excess of the company action level RBC, which is two times authorized control level RBC, are required to take specified actions. Company action level RBC is significantly in excess of the minimum capital requirements. Total statutory capital and surplus and authorized control level RBC of the Company were $332.5 million and $61.9 million, respectively, as of December 31, 2013. |
Other_Comprehensive_Income
Other Comprehensive Income | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Other Comprehensive Income | ' | ||||||||||||
12. Other Comprehensive Income | |||||||||||||
The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows: | |||||||||||||
2013 | |||||||||||||
($ in thousands) | Pre-tax | Tax | After-tax | ||||||||||
Unrealized net holding losses arising during the period | $ | (15,281 | ) | $ | 5,349 | $ | (9,932 | ) | |||||
Less: reclassification adjustment of realized capital gains and losses | 1 | — | 1 | ||||||||||
Unrealized net capital gains and losses | (15,282 | ) | 5,349 | (9,933 | ) | ||||||||
Other comprehensive loss | $ | (15,282 | ) | $ | 5,349 | $ | (9,933 | ) | |||||
2012 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period | $ | 977 | $ | (343 | ) | $ | 634 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 596 | (209 | ) | 387 | |||||||||
Unrealized net capital gains and losses | 381 | (134 | ) | 247 | |||||||||
Other comprehensive income | $ | 381 | $ | (134 | ) | $ | 247 | ||||||
2011 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period | $ | 7,322 | $ | (2,562 | ) | $ | 4,760 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 2,075 | (726 | ) | 1,349 | |||||||||
Unrealized net capital gains and losses | 5,247 | (1,836 | ) | 3,411 | |||||||||
Other comprehensive income | $ | 5,247 | $ | (1,836 | ) | $ | 3,411 | ||||||
Summary_of_Investments_Other_T
Summary of Investments Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Investments Other Than Investments in Related Parties | ' | ||||||||||||
LINCOLN BENEFIT LIFE COMPANY | |||||||||||||
SCHEDULE I—SUMMARY OF INVESTMENTS | |||||||||||||
OTHER THAN INVESTMENTS IN RELATED PARTIES | |||||||||||||
31-Dec-13 | |||||||||||||
($ in thousands) | Amortized | Fair | Amount at | ||||||||||
cost | value | which | |||||||||||
shown in | |||||||||||||
the Balance | |||||||||||||
Sheet | |||||||||||||
Type of investment | |||||||||||||
Fixed maturities: | |||||||||||||
Bonds: | |||||||||||||
United States government, government agencies and authorities | $ | 70,790 | $ | 73,846 | $ | 73,846 | |||||||
States, municipalities and political subdivisions | 2,499 | 2,769 | 2,769 | ||||||||||
Foreign governments | 4,999 | 5,164 | 5,164 | ||||||||||
Public utilities | 14,960 | 15,994 | 15,994 | ||||||||||
All other corporate bonds | 175,226 | 175,983 | 175,983 | ||||||||||
Residential mortgage-backed securities | 13,866 | 14,450 | 14,450 | ||||||||||
Commercial mortgage-backed securities | 2,588 | 2,676 | 2,676 | ||||||||||
Total fixed maturities | 284,928 | 290,882 | 290,882 | ||||||||||
Short-term investments | 55,959 | 55,959 | 55,959 | ||||||||||
Total investments | $ | 340,887 | $ | 346,841 | $ | 346,841 | |||||||
Reinsurance1
Reinsurance | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Reinsurance | ' | ||||||||||||||||||||
LINCOLN BENEFIT LIFE COMPANY | |||||||||||||||||||||
SCHEDULE IV - REINSURANCE | |||||||||||||||||||||
($ in thousands) | Gross | Ceded to | Assumed | Net | Percentage | ||||||||||||||||
amount | other | from other | amount | of amount | |||||||||||||||||
companies (1) | companies | assumed | |||||||||||||||||||
to net | |||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
Life insurance in force | $ | 389,941,404 | $ | 395,421,202 | $ | 5,479,798 | $ | — | — | % | |||||||||||
Premiums and contract charges: | |||||||||||||||||||||
Life and annuities | $ | 1,250,623 | $ | 1,257,453 | $ | 6,830 | $ | — | — | % | |||||||||||
Accident and health insurance | 80,974 | 80,974 | — | — | — | % | |||||||||||||||
$ | 1,331,597 | $ | 1,338,427 | $ | 6,830 | $ | — | — | % | ||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
Life insurance in force | $ | 378,467,115 | $ | 384,205,939 | $ | 5,738,824 | $ | — | — | % | |||||||||||
Premiums and contract charges: | |||||||||||||||||||||
Life and annuities | $ | 1,201,592 | $ | 1,208,376 | $ | 6,784 | $ | — | — | % | |||||||||||
Accident and health insurance | 97,272 | 97,272 | — | — | — | % | |||||||||||||||
$ | 1,298,864 | $ | 1,305,648 | $ | 6,784 | $ | — | — | % | ||||||||||||
Year ended December 31, 2011 | |||||||||||||||||||||
Life insurance in force | $ | 364,469,564 | $ | 370,439,179 | $ | 5,969,615 | $ | — | — | % | |||||||||||
Premiums and contract charges: | |||||||||||||||||||||
Life and annuities | $ | 1,156,434 | $ | 1,163,491 | $ | 7,057 | $ | — | — | % | |||||||||||
Accident and health insurance | 109,830 | 109,830 | — | — | — | % | |||||||||||||||
$ | 1,266,264 | $ | 1,273,321 | $ | 7,057 | $ | — | — | % | ||||||||||||
(1) | No reinsurance or coinsurance income was netted against premiums ceded in 2013, 2012 or 2011. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Investments | ' |
Investments | |
Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”). Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. Cash received from calls, principal payments and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs, including prepayments, is reflected as a component of investment collections within the Statements of Cash Flows. | |
Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value. | |
Investment income primarily consists of interest and is recognized on an accrual basis using the effective yield method. Interest income for RMBS and CMBS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS and CMBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. | |
Realized capital gains and losses include gains and losses on investment sales and write-downs in value due to other-than-temporary declines in fair value. Realized capital gains and losses on investment sales, including principal payments, are determined on a specific identification basis. | |
Recognition of Premium Revenues and Contract Charges, and Related Benefits and Interest Credited | ' |
Recognition of premium revenues and contract charges, and related benefits and interest credited | |
The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, Lincoln Benefit Reinsurance Company (“LB Re”, an affiliate of the Company) and non-affiliated reinsurers (see Notes 3 and 8). Amounts reflected in the Statements of Operations and Comprehensive Income are presented net of reinsurance. | |
Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy. | |
Immediate annuities with life contingencies provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract. | |
Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. | |
Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities, equity-indexed annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. | |
Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life and annuities are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index. | |
Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. | |
Reinsurance | ' |
Reinsurance | |
The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, LB Re and non-affiliated reinsurers (see Notes 3 and 8). Reinsurance recoverables and the related reserve for life-contingent contract benefits and contractholder funds are reported separately in the Statements of Financial Position. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate. | |
Investment income earned on the assets that support contractholder funds and the reserve for life-contingent contract benefits is not included in the Company’s financial statements as those assets are owned and managed by ALIC under the terms of the reinsurance agreements. | |
Income Taxes | ' |
Income taxes | |
The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains and losses, accrued expenses and reinsurance recoverables. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized. | |
Reserve for Life-Contingent Contract Benefits | ' |
Reserve for life-contingent contract benefits | |
The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance and life-contingent immediate annuities, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. | |
Contractholder Funds | ' |
Contractholder funds | |
Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on variable annuity contracts. | |
Separate Accounts | ' |
Separate accounts | |
Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows. | |
Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. The risk and associated cost of these contract guarantees are ceded to ALIC in accordance with the reinsurance agreements. | |
Adopted Accounting Standard | ' |
Adopted accounting standard | |
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income | |
In February 2013, the Financial Accounting Standards Board issued guidance requiring expanded disclosures about the amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by income statement line item but only if the amount reclassified is required under accounting principles generally accepted in the United States of America (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about those amounts is required. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Amounts Ceded to Allstate Life Insurance Company | ' | ||||||||||||
The following table summarizes amounts that were ceded to ALIC under reinsurance agreements and reported net in the Statements of Operations and Comprehensive Income. | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Premiums and contract charges | $ | 962,576 | $ | 908,459 | $ | 833,149 | |||||||
Interest credited to contractholder funds, contract benefits and expenses | 1,505,010 | 1,369,305 | 1,408,953 |
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value | ' | ||||||||||||||||||||||||||||
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: | |||||||||||||||||||||||||||||
Amortized | Gross unrealized | Fair | |||||||||||||||||||||||||||
($ in thousands) | cost | Gains | Losses | value | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
U.S. government and agencies | $ | 70,790 | $ | 3,113 | $ | (57 | ) | $ | 73,846 | ||||||||||||||||||||
Municipal | 2,499 | 270 | — | 2,769 | |||||||||||||||||||||||||
Corporate | 190,186 | 5,784 | (3,993 | ) | 191,977 | ||||||||||||||||||||||||
Foreign government | 4,999 | 165 | — | 5,164 | |||||||||||||||||||||||||
RMBS | 13,866 | 584 | — | 14,450 | |||||||||||||||||||||||||
CMBS | 2,588 | 88 | — | 2,676 | |||||||||||||||||||||||||
Total fixed income securities | $ | 284,928 | $ | 10,004 | $ | (4,050 | ) | $ | 290,882 | ||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||
U.S. government and agencies | $ | 86,428 | $ | 5,659 | $ | — | $ | 92,087 | |||||||||||||||||||||
Municipal | 2,499 | 401 | — | 2,900 | |||||||||||||||||||||||||
Corporate | 178,824 | 13,173 | (29 | ) | 191,968 | ||||||||||||||||||||||||
Foreign government | 4,999 | 265 | — | 5,264 | |||||||||||||||||||||||||
RMBS | 28,239 | 1,498 | — | 29,737 | |||||||||||||||||||||||||
CMBS | 8,335 | 268 | — | 8,603 | |||||||||||||||||||||||||
Total fixed income securities | $ | 309,324 | $ | 21,264 | $ | (29 | ) | $ | 330,559 | ||||||||||||||||||||
Schedule for Fixed Income Securities Based on Contractual Maturities | ' | ||||||||||||||||||||||||||||
The scheduled maturities for fixed income securities are as follows as of December 31, 2013: | |||||||||||||||||||||||||||||
($ in thousands) | Amortized | Fair | |||||||||||||||||||||||||||
cost | value | ||||||||||||||||||||||||||||
Due in one year or less | $ | 35,518 | $ | 35,883 | |||||||||||||||||||||||||
Due after one year through five years | 110,661 | 116,264 | |||||||||||||||||||||||||||
Due after five years through ten years | 111,316 | 111,036 | |||||||||||||||||||||||||||
Due after ten years | 10,979 | 10,573 | |||||||||||||||||||||||||||
268,474 | 273,756 | ||||||||||||||||||||||||||||
RMBS and CMBS | 16,454 | 17,126 | |||||||||||||||||||||||||||
Total | $ | 284,928 | $ | 290,882 | |||||||||||||||||||||||||
Schedule of Net Investment Income | ' | ||||||||||||||||||||||||||||
Net investment income for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||
Fixed income securities | $ | 11,545 | $ | 12,138 | $ | 12,133 | |||||||||||||||||||||||
Short-term investments | 23 | 20 | 11 | ||||||||||||||||||||||||||
Investment income, before expense | 11,568 | 12,158 | 12,144 | ||||||||||||||||||||||||||
Investment expense | (633 | ) | (568 | ) | (308 | ) | |||||||||||||||||||||||
Net investment income | $ | 10,935 | $ | 11,590 | $ | 11,836 | |||||||||||||||||||||||
Schedule of Unrealized Net Capital Gains and Losses Included in Accumulated Other Comprehensive Income | ' | ||||||||||||||||||||||||||||
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows: | |||||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||
($ in thousands) | Value | Gains | Losses | gains | |||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
Fixed income securities | $ | 290,882 | $ | 10,004 | $ | (4,050 | ) | $ | 5,954 | ||||||||||||||||||||
Short-term investments | 55,959 | 1 | (1 | ) | — | ||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 5,954 | ||||||||||||||||||||||||||||
Deferred income taxes | (2,084 | ) | |||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 3,870 | |||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||
December 31, 2012 | value | Gains | Losses | gains | |||||||||||||||||||||||||
Fixed income securities | $ | 330,559 | $ | 21,264 | $ | (29 | ) | $ | 21,235 | ||||||||||||||||||||
Short-term investments | 24,203 | 1 | — | 1 | |||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 21,236 | ||||||||||||||||||||||||||||
Deferred income taxes | (7,433 | ) | |||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 13,803 | |||||||||||||||||||||||||||
Schedule of Change in Unrealized net Capital Gains and Losses | ' | ||||||||||||||||||||||||||||
The change in unrealized net capital gains and losses for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||
Fixed income securities | $ | (15,281 | ) | $ | 380 | $ | 5,247 | ||||||||||||||||||||||
Short-term investments | (1 | ) | 1 | — | |||||||||||||||||||||||||
Total | (15,282 | ) | 381 | 5,247 | |||||||||||||||||||||||||
Deferred income taxes | 5,349 | (134 | ) | (1,836 | ) | ||||||||||||||||||||||||
(Decrease) increase in unrealized net capital gains and losses, after-tax | $ | (9,933 | ) | $ | 247 | $ | 3,411 | ||||||||||||||||||||||
Summary of Gross Unrealized Losses and Fair Value of Fixed Income by Length of Time | ' | ||||||||||||||||||||||||||||
The following table summarizes the gross unrealized losses and fair value of fixed income securities by the length of time that individual securities have been in a continuous unrealized loss position. | |||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||
unrealized | |||||||||||||||||||||||||||||
($ in thousands) | Number | Fair | Unrealized | Number | Fair | Unrealized | losses | ||||||||||||||||||||||
of issues | value | losses | of issues | value | losses | ||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
U.S. government and agencies | 1 | $ | 4,942 | $ | (57 | ) | — | $ | — | $ | — | $ | (57 | ) | |||||||||||||||
Corporate | 23 | 75,754 | (3,795 | ) | 1 | 1,770 | (198 | ) | (3,993 | ) | |||||||||||||||||||
Total | 24 | $ | 80,696 | $ | (3,852 | ) | 1 | $ | 1,770 | $ | (198 | ) | $ | (4,050 | ) | ||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||
Corporate | 1 | $ | 1,936 | $ | (29 | ) | — | $ | — | $ | — | $ | (29 | ) | |||||||||||||||
Total | 1 | $ | 1,936 | $ | (29 | ) | — | $ | — | $ | — | $ | (29 | ) | |||||||||||||||
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis | ' | ||||||||||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2013. There are no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2013. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance as of | |||||||||||||||||
in active | other | unobservable | December 31, | ||||||||||||||||||
markets for | observable | inputs | 2013 | ||||||||||||||||||
identical assets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 27,520 | $ | 46,326 | $ | — | $ | 73,846 | |||||||||||||
Municipal | — | 2,769 | — | 2,769 | |||||||||||||||||
Corporate | — | 191,977 | — | 191,977 | |||||||||||||||||
Foreign government | — | 5,164 | — | 5,164 | |||||||||||||||||
RMBS | — | 14,450 | — | 14,450 | |||||||||||||||||
CMBS | — | 2,676 | — | 2,676 | |||||||||||||||||
Total fixed income securities | 27,520 | 263,362 | — | 290,882 | |||||||||||||||||
Short-term investments | 20,764 | 35,195 | — | 55,959 | |||||||||||||||||
Separate account assets | 1,700,566 | — | — | 1,700,566 | |||||||||||||||||
Total assets at fair value | $ | 1,748,850 | $ | 298,557 | $ | — | $ | 2,047,407 | |||||||||||||
% of total assets at fair value | 85.4 | % | 14.6 | % | — | % | 100 | % | |||||||||||||
Liabilities: | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (267,859 | ) | $ | (267,859 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (267,859 | ) | $ | (267,859 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2012. There are no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2012. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance as of | |||||||||||||||||
in active | other | unobservable | December 31, | ||||||||||||||||||
markets for | observable | inputs | 2012 | ||||||||||||||||||
identical assets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 34,303 | $ | 57,784 | $ | — | $ | 92,087 | |||||||||||||
Municipal | — | 2,900 | — | 2,900 | |||||||||||||||||
Corporate | — | 191,656 | 312 | 191,968 | |||||||||||||||||
Foreign government | — | 5,264 | — | 5,264 | |||||||||||||||||
RMBS | — | 29,737 | — | 29,737 | |||||||||||||||||
CMBS | — | 8,603 | — | 8,603 | |||||||||||||||||
Total fixed income securities | 34,303 | 295,944 | 312 | 330,559 | |||||||||||||||||
Short-term investments | 18,793 | 5,410 | — | 24,203 | |||||||||||||||||
Separate account assets | 1,625,669 | — | — | 1,625,669 | |||||||||||||||||
Total assets at fair value | $ | 1,678,765 | $ | 301,354 | $ | 312 | $ | 1,980,431 | |||||||||||||
% of total assets at fair value | 84.7 | % | 15.2 | % | 0.1 | % | 100 | % | |||||||||||||
Liabilities: | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (314,926 | ) | $ | (314,926 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (314,926 | ) | $ | (314,926 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
Summary of Quantitative Information About the Significant Unobservable Inputs Used in Level 3 Fair Value Measurements | ' | ||||||||||||||||||||
The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. | |||||||||||||||||||||
($ in thousands) | Fair value | Valuation | Unobservable | Range | Weighted | ||||||||||||||||
technique | input | average | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | $ | (258,415 | ) | Stochastic | Projected | 1.0 - 2.0 | % | 1.91 | % | ||||||||||||
cash flow | option | ||||||||||||||||||||
model | cost | ||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | $ | (295,305 | ) | Stochastic | Projected | 1.0 - 2.0 | % | 1.96 | % | ||||||||||||
cash flow | option | ||||||||||||||||||||
model | cost | ||||||||||||||||||||
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013. | |||||||||||||||||||||
($ in thousands) | Total gains (losses) | ||||||||||||||||||||
included in: | |||||||||||||||||||||
Balance as of | Net | OCI | Transfers | Transfers | |||||||||||||||||
December 31, | income(1) | into | out of | ||||||||||||||||||
2012 | Level 3 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 312 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Total recurring Level 3 assets | $ | 312 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (314,926 | ) | $ | 43,244 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (314,926 | ) | $ | 43,244 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | — | $ | — | $ | — | $ | (312 | ) | $ | — | ||||||||||
Total recurring Level 3 assets | $ | — | $ | — | $ | — | $ | (312 | ) | $ | — | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (6,621 | ) | $ | 10,444 | $ | (267,859 | ) | |||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | (6,621 | ) | $ | 10,444 | $ | (267,859 | ) | |||||||||
(1) | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $33.0 million in interest credited to contractholder funds and $10.2 million in contract benefits. These amounts are ceded in accordance with the Company’s reinsurance agreements. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012. | |||||||||||||||||||||
($ in thousands) | Total gains (losses) | ||||||||||||||||||||
included in: | |||||||||||||||||||||
Balance as of | Net | OCI | Transfers | Transfers | |||||||||||||||||
December 31, | income(1) | into | out of | ||||||||||||||||||
2011 | Level 3 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 598 | $ | — | $ | — | $ | — | $ | — | |||||||||||
RMBS | 2,321 | — | — | — | (2,321 | ) | |||||||||||||||
Total recurring Level 3 assets | $ | 2,919 | $ | — | $ | — | $ | — | $ | (2,321 | ) | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (506,678 | ) | $ | 131,054 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (506,678 | ) | $ | 131,054 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | — | $ | — | $ | — | $ | (286 | ) | $ | 312 | ||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
Total recurring Level 3 assets | $ | — | $ | — | $ | — | $ | (286 | ) | $ | 312 | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (11,024 | ) | $ | 71,722 | $ | (314,926 | ) | |||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | (11,024 | ) | $ | 71,722 | $ | (314,926 | ) | |||||||||
(2) | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $125.9 million in interest credited to contractholder funds and $5.1 million in contract benefits. These amounts are ceded in accordance with the Company’s reinsurance agreements. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2011. | |||||||||||||||||||||
($ in thousands) | Total gains (losses) | ||||||||||||||||||||
included in: | |||||||||||||||||||||
Balance as of | Net | OCI | Transfers | Transfers | |||||||||||||||||
December 31, | income(1) | into | out of | ||||||||||||||||||
2010 | Level 3 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 852 | $ | — | $ | 199 | $ | — | $ | (10,199 | ) | ||||||||||
RMBS | 6,880 | (4 | ) | (108 | ) | — | (3,577 | ) | |||||||||||||
CMBS | 1,916 | — | (49 | ) | — | (1,867 | ) | ||||||||||||||
Total recurring Level 3 assets | $ | 9,648 | $ | (4 | ) | $ | 42 | $ | — | $ | (15,643 | ) | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (494,149 | ) | $ | (110,951 | ) | $ | — | $ | — | $ | — | |||||||||
Total recurring Level 3 liabilities | $ | (494,149 | ) | $ | (110,951 | ) | $ | — | $ | — | $ | — | |||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | 10,000 | $ | — | $ | — | $ | (254 | ) | $ | 598 | ||||||||||
RMBS | — | — | — | (870 | ) | 2,321 | |||||||||||||||
CMBS | — | — | — | — | — | ||||||||||||||||
Total recurring Level 3 assets | $ | 10,000 | $ | — | $ | — | $ | (1,124 | ) | $ | 2,919 | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (55,559 | ) | $ | 153,981 | $ | (506,678 | ) | |||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | (55,559 | ) | $ | 153,981 | $ | (506,678 | ) | |||||||||
(1) | The amount attributable to fixed income securities is reported in the Statements of Operations and Comprehensive Income as net investment income. The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $(106.6) million in interest credited to contractholder funds and $(4.3) million in contract benefits. These amounts are ceded in accordance with the Company’s reinsurance agreements. | ||||||||||||||||||||
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level 3 Assets and Liabilities Held | ' | ||||||||||||||||||||
The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31. | |||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Corporate | $ | — | $ | — | $ | (2 | ) | ||||||||||||||
RMBS | — | — | (5 | ) | |||||||||||||||||
Total recurring Level 3 assets | $ | — | $ | — | $ | (7 | ) | ||||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: | |||||||||||||||||||||
Derivatives embedded in life and annuity contracts | $ | 43,244 | $ | 131,054 | $ | (110,951 | ) | ||||||||||||||
Total recurring Level 3 liabilities | $ | 43,244 | $ | 131,054 | $ | (110,951 | ) | ||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Volume and Fair Value Positions of Derivative Instruments | ' | ||||||||||||||||
The following table provides a summary of the volume and fair value positions of embedded derivative financial instruments. None of these derivatives are designated as accounting hedging instruments and all are gross liabilities reported in contractholder funds. | |||||||||||||||||
($ in thousands) | December 31, 2013 | December 31, 2012 | |||||||||||||||
Volume - | Fair | Volume - | Fair | ||||||||||||||
Notional | value | Notional | value | ||||||||||||||
amount | amount | ||||||||||||||||
Equity-indexed and forward starting options in life and annuity product contracts | $ | 2,591,090 | $ | (258,415 | ) | $ | 3,098,496 | $ | (295,305 | ) | |||||||
Guaranteed accumulation benefits | 152,936 | (8,970 | ) | 174,791 | (18,047 | ) | |||||||||||
Guaranteed withdrawal benefits | 22,199 | (474 | ) | 25,186 | (1,574 | ) | |||||||||||
Total derivatives | $ | 2,766,225 | $ | (267,859 | ) | $ | 3,298,473 | $ | (314,926 | ) | |||||||
Reserve_for_LifeContingent_Con1
Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Reserve for Life-Contingent Contract Benefits | ' | ||||||||||||
As of December 31, the reserve for life-contingent contract benefits consists of the following: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Traditional life insurance | $ | 1,548,134 | $ | 1,519,650 | |||||||||
Immediate fixed annuities | 676,565 | 677,986 | |||||||||||
Accident and health insurance | 1,324,268 | 1,217,648 | |||||||||||
Other | 8,444 | 9,395 | |||||||||||
Total reserve for life-contingent contract benefits | $ | 3,557,411 | $ | 3,424,679 | |||||||||
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits | ' | ||||||||||||
The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits: | |||||||||||||
Product | Mortality | Interest rate | Estimation method | ||||||||||
Traditional life insurance | Actual company experience plus loading | Interest rate | Net level premium | ||||||||||
assumptions range | reserve method using | ||||||||||||
from 2.5% to 8.0% | the Company’s | ||||||||||||
withdrawal experience | |||||||||||||
rates; includes reserves | |||||||||||||
for unpaid claims | |||||||||||||
Immediate fixed annuities | 1983 individual annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications | Interest rate | Present value of | ||||||||||
assumptions range | expected future | ||||||||||||
from 0% to 8.8% | benefits based on | ||||||||||||
historical experience | |||||||||||||
Accident and health insurance | Actual company experience plus loading | Interest rate | Unearned premium; | ||||||||||
assumptions range | additional contract | ||||||||||||
from 4.0% to 5.3% | reserves for mortality | ||||||||||||
risk and unpaid claims | |||||||||||||
Other: | |||||||||||||
Annuity 2000 mortality table with internal modifications | Interest rate | Projected benefit ratio | |||||||||||
Variable annuity guaranteed minimum death benefits | assumptions range | applied to cumulative | |||||||||||
from 4.0% to 5.8% | assessments | ||||||||||||
Schedule of Contractholder Funds | ' | ||||||||||||
As of December 31, contractholder funds consist of the following: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Interest-sensitive life insurance | $ | 5,020,265 | $ | 4,814,410 | |||||||||
Investment contracts: | |||||||||||||
Fixed annuities | 7,803,892 | 9,201,641 | |||||||||||
Other investment contracts | 299,958 | 239,793 | |||||||||||
Total contractholder funds | $ | 13,124,115 | $ | 14,255,844 | |||||||||
Schedule of Contract Provisions Related to Contractholder Funds | ' | ||||||||||||
The following table highlights the key contract provisions relating to contractholder funds: | |||||||||||||
Product | Interest rate | Withdrawal/surrender charges | |||||||||||
Interest-sensitive life insurance | Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.6% to 6.0% for all other products | Either a percentage of account balance or dollar amount grading off generally over 20 years | |||||||||||
Fixed annuities | Interest rates credited range from 0% to 8.8% for immediate annuities; 0% to 7.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 1.0% to 6.0% for all other products | Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 18.7% of fixed annuities are subject to market value adjustment for discretionary withdrawals. | |||||||||||
Other investment contracts: | |||||||||||||
Guaranteed minimum income, accumulation and withdrawal benefits on variable and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities | Interest rates used in establishing reserves range from 1.7% to 10.3% | Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract | |||||||||||
Schedule of Contractholder Funds Activity | ' | ||||||||||||
Contractholder funds activity for the years ended December 31 is as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 14,255,844 | $ | 15,489,624 | $ | 17,247,071 | |||||||
Deposits | 1,109,108 | 1,070,374 | 1,007,316 | ||||||||||
Interest credited | 524,801 | 406,805 | 576,331 | ||||||||||
Benefits | (353,687 | ) | (473,329 | ) | (459,991 | ) | |||||||
Surrenders and partial withdrawals | (1,880,495 | ) | (1,703,966 | ) | (2,412,295 | ) | |||||||
Contract charges | (601,609 | ) | (558,519 | ) | (513,068 | ) | |||||||
Net transfers from separate accounts | 18,477 | 16,463 | 18,935 | ||||||||||
Other adjustments | 51,676 | 8,392 | 25,325 | ||||||||||
Balance, end of year | $ | 13,124,115 | $ | 14,255,844 | $ | 15,489,624 | |||||||
Summary of Variable Annuity Contracts with Guarantees | ' | ||||||||||||
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. | |||||||||||||
December 31, | |||||||||||||
($ in millions) | 2013 | 2012 | |||||||||||
In the event of death | |||||||||||||
Separate account value | $ | 877 | $ | 926.1 | |||||||||
Net amount at risk(1) | $ | 63.2 | $ | 101.6 | |||||||||
Average attained age of contractholders | 59 years | 59 years | |||||||||||
At annuitization (includes income benefit guarantees) | |||||||||||||
Separate account value | $ | 170.5 | $ | 168.1 | |||||||||
Net amount at risk(2) | $ | 16.6 | $ | 29.6 | |||||||||
Weighted average waiting period until annuitization options available | None | 1 year | |||||||||||
For cumulative periodic withdrawals | |||||||||||||
Separate account value | $ | 21.8 | $ | 24.8 | |||||||||
Net amount at risk(3) | $ | 0.1 | $ | 0.2 | |||||||||
Accumulation at specified dates | |||||||||||||
Separate account value | $ | 151.1 | $ | 172 | |||||||||
Net amount at risk(4) | $ | 7.3 | $ | 13.7 | |||||||||
Weighted average waiting period until guarantee date | 6 years | 7 years | |||||||||||
(1) | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | ||||||||||||
(2) | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | ||||||||||||
(3) | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | ||||||||||||
(4) | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Effects of Reinsurance on Premiums and Contract Charges | ' | ||||||||||||
The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 1,331,597 | $ | 1,298,864 | $ | 1,266,264 | |||||||
Assumed | 6,830 | 6,784 | 7,057 | ||||||||||
Ceded: | |||||||||||||
Affiliate | (962,576 | ) | (908,459 | ) | (833,149 | ) | |||||||
Non-affiliate | (375,851 | ) | (397,189 | ) | (440,172 | ) | |||||||
Premiums and contract charges, net of reinsurance | $ | — | $ | — | $ | — | |||||||
Schedule of Effects of Reinsurance on Interest Credited to Contractholder Funds, Contract Benefits and Expenses | ' | ||||||||||||
The effects of reinsurance on interest credited to contractholder funds, contract benefits and expenses for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 1,938,015 | $ | 1,882,714 | $ | 1,893,124 | |||||||
Assumed | 8,180 | 9,167 | 7,337 | ||||||||||
Ceded: | |||||||||||||
Affiliate | (1,505,010 | ) | (1,369,305 | ) | (1,408,953 | ) | |||||||
Non-affiliate | (441,185 | ) | (522,576 | ) | (491,508 | ) | |||||||
Interest credited to contractholder funds, contract benefits and expenses, net of reinsurance | $ | — | $ | — | $ | — | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Components of Deferred Income Tax Assets and Liabilities | ' | ||||||||||||
The components of the deferred income tax assets and liabilities as of December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Deferred assets | |||||||||||||
Reinsurance recoverables | $ | 497 | $ | — | |||||||||
Other assets | 4 | — | |||||||||||
Total deferred assets | 501 | — | |||||||||||
Deferred liabilities | |||||||||||||
Unrealized net capital gains | (2,084 | ) | (7,433 | ) | |||||||||
Accrued expenses | (981 | ) | (524 | ) | |||||||||
Other liabilities | — | (33 | ) | ||||||||||
Total deferred liabilities | (3,065 | ) | (7,990 | ) | |||||||||
Net deferred liability | $ | (2,564 | ) | $ | (7,990 | ) | |||||||
Components of Income Tax Expense | ' | ||||||||||||
The components of income tax expense for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Current | $ | 3,902 | $ | 4,145 | $ | 4,802 | |||||||
Deferred | (77 | ) | 128 | 59 | |||||||||
Total income tax expense | $ | 3,825 | $ | 4,273 | $ | 4,861 | |||||||
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate | ' | ||||||||||||
A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax rate | 35 | % | 35 | % | 35.0 | % | |||||||
Other | — | — | (0.1 | ) | |||||||||
Effective income tax rate | 35 | % | 35 | % | 34.9 | % | |||||||
Other_Comprehensive_Income_Tab
Other Comprehensive Income (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis | ' | ||||||||||||
The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows: | |||||||||||||
2013 | |||||||||||||
($ in thousands) | Pre-tax | Tax | After-tax | ||||||||||
Unrealized net holding losses arising during the period | $ | (15,281 | ) | $ | 5,349 | $ | (9,932 | ) | |||||
Less: reclassification adjustment of realized capital gains and losses | 1 | — | 1 | ||||||||||
Unrealized net capital gains and losses | (15,282 | ) | 5,349 | (9,933 | ) | ||||||||
Other comprehensive loss | $ | (15,282 | ) | $ | 5,349 | $ | (9,933 | ) | |||||
2012 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period | $ | 977 | $ | (343 | ) | $ | 634 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 596 | (209 | ) | 387 | |||||||||
Unrealized net capital gains and losses | 381 | (134 | ) | 247 | |||||||||
Other comprehensive income | $ | 381 | $ | (134 | ) | $ | 247 | ||||||
2011 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period | $ | 7,322 | $ | (2,562 | ) | $ | 4,760 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 2,075 | (726 | ) | 1,349 | |||||||||
Unrealized net capital gains and losses | 5,247 | (1,836 | ) | 3,411 | |||||||||
Other comprehensive income | $ | 5,247 | $ | (1,836 | ) | $ | 3,411 | ||||||
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Transaction [Line Items] | ' | ' | ' |
Operating expenses, including compensation, allocated by Allstate Insurance Company | $249,700,000 | $241,800,000 | $204,800,000 |
Maximum amount of loans Corporation will have outstanding to all eligible subsidiaries at any given point in time | 1,000,000,000 | ' | ' |
Allstate Life Insurance Company | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Reinsurance recoverables | 14,520,000,000 | 15,550,000,000 | ' |
Allstate Distributors Services, LLC | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Broker-Dealer agreement, Promotion and marketing expense | 71,000 | 80,000 | 7,200,000 |
Allstate Financial Services, LLC | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Broker-Dealer agreement, Commission and other distribution expenses | 7,700,000 | 6,400,000 | 7,500,000 |
Lincoln Benefit Reinsurance Company | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Reinsurance recoverables | $1,900,000 | $2,000,000 | ' |
Summary_of_Amounts_Ceded_to_Al
Summary of Amounts Ceded to Allstate Life Insurance Company (Detail) (Allstate Life Insurance Company, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allstate Life Insurance Company | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Premiums and contract charges | $962,576 | $908,459 | $833,149 |
Interest credited to contractholder funds, contract benefits and expenses | $1,505,010 | $1,369,305 | $1,408,953 |
Schedule_for_Fixed_Income_Secu
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | $284,928 | $309,324 |
Fair value | 290,882 | 330,559 |
U.S. government agencies and authorities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 70,790 | 86,428 |
Gross unrealized gains | 3,113 | 5,659 |
Gross unrealized losses | -57 | ' |
Fair value | 73,846 | 92,087 |
Municipal | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 2,499 | 2,499 |
Gross unrealized gains | 270 | 401 |
Fair value | 2,769 | 2,900 |
Corporate | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 190,186 | 178,824 |
Gross unrealized gains | 5,784 | 13,173 |
Gross unrealized losses | -3,993 | -29 |
Fair value | 191,977 | 191,968 |
Foreign government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 4,999 | 4,999 |
Gross unrealized gains | 165 | 265 |
Fair value | 5,164 | 5,264 |
Residential mortgage-backed securities ("RMBS") | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 13,866 | 28,239 |
Gross unrealized gains | 584 | 1,498 |
Fair value | 14,450 | 29,737 |
Commercial mortgage-backed securities ("CMBS") | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 2,588 | 8,335 |
Gross unrealized gains | 88 | 268 |
Fair value | 2,676 | 8,603 |
Fixed income securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 284,928 | 309,324 |
Gross unrealized gains | 10,004 | 21,264 |
Gross unrealized losses | -4,050 | -29 |
Fair value | $290,882 | $330,559 |
Schedule_for_Fixed_Income_Secu1
Schedule for Fixed Income Securities Based on Contractual Maturities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Amortized cost | ' | ' |
Due in one year or less | $35,518 | ' |
Due after one year through five years | 110,661 | ' |
Due after five years through ten years | 111,316 | ' |
Due after ten years | 10,979 | ' |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis, Total | 268,474 | ' |
RMBS and CMBS | 16,454 | ' |
Total | 284,928 | ' |
Fair value | ' | ' |
Due in one year or less | 35,883 | ' |
Due after one year through five years | 116,264 | ' |
Due after five years through ten years | 111,036 | ' |
Due after ten years | 10,573 | ' |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Total | 273,756 | ' |
RMBS and CMBS | 17,126 | ' |
Fair value | $290,882 | $330,559 |
Schedule_of_Net_Investment_Inc
Schedule of Net Investment Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' |
Investment income, before expense | $11,568 | $12,158 | $12,144 |
Investment expense | -633 | -568 | -308 |
Net investment income | 10,935 | 11,590 | 11,836 |
Fixed income securities | ' | ' | ' |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' |
Investment income, before expense | 11,545 | 12,138 | 12,133 |
Short-term investments | ' | ' | ' |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' |
Investment income, before expense | $23 | $20 | $11 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule of Investments [Line Items] | ' | ' | ' |
Net realized capital gains and losses | $0 | $626,000 | $2,075,000 |
Residential mortgage-backed securities ("RMBS") | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Other-than-temporary impairment losses | 2,000 | 19,000 | 12,000 |
Fixed income securities | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Gross gains realized on sales of fixed income securities | 3,000 | 645,000 | 1,900,000 |
Gross losses realized on sales of fixed income securities | 1,000 | 0 | 3,000 |
Investment Grade Securities | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Unrealized losses related to securities with unrealized loss position less than 20% of amortized cost or cost | 4,100,000 | ' | ' |
Fixed income and short-term securities | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Assets on deposit with regulatory authorities | $9,400,000 | ' | ' |
Schedule_of_Unrealized_Net_Cap
Schedule of Unrealized Net Capital Gains and Losses (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair value | ' | ' |
Fixed income securities | $290,882 | $330,559 |
Short-term investments | 55,959 | 24,203 |
Gross unrealized Gains | ' | ' |
Fixed income securities | 10,004 | 21,264 |
Short-term investments | 1 | 1 |
Gross unrealized Losses | ' | ' |
Fixed income securities | -4,050 | -29 |
Short-term investments | -1 | ' |
Unrealized net gains (losses) | ' | ' |
Fixed income securities | 5,954 | 21,235 |
Short-term investments | ' | 1 |
Unrealized net capital gains and losses, pre-tax | 5,954 | 21,236 |
Deferred income taxes | -2,084 | -7,433 |
Unrealized net capital gains and losses, after-tax | $3,870 | $13,803 |
Schedule_of_Change_in_Unrealiz
Schedule of Change in Unrealized net Capital Gains and Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | ($15,282) | $381 | $5,247 |
Deferred income taxes | 5,349 | -134 | -1,836 |
(Decrease) increase in unrealized net capital gains and losses, after-tax | -9,933 | 247 | 3,411 |
Fixed income securities | ' | ' | ' |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | -15,281 | 380 | 5,247 |
Short-term investments | ' | ' | ' |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | ($1) | $1 | ' |
Summary_of_Gross_Unrealized_Lo
Summary of Gross Unrealized Losses and Fair Value of Fixed Income by Length of Time (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Securities | Securities | |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 24 | 1 |
Fair value, continuous unrealized loss position for less than 12 months | $80,696 | $1,936 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -3,852 | -29 |
Number of issues, continuous unrealized loss position for 12 months or more | 1 | ' |
Fair value, continuous unrealized loss position for 12 months or more | 1,770 | ' |
Unrealized losses, continuous unrealized loss position for 12 months or more | -198 | ' |
Total unrealized losses | -4,050 | -29 |
U.S. government agencies and authorities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 1 | ' |
Fair value, continuous unrealized loss position for less than 12 months | 4,942 | ' |
Unrealized losses, continuous unrealized loss position for less than 12 months | -57 | ' |
Total unrealized losses | -57 | ' |
Corporate | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 23 | 1 |
Fair value, continuous unrealized loss position for less than 12 months | 75,754 | 1,936 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -3,795 | -29 |
Number of issues, continuous unrealized loss position for 12 months or more | 1 | ' |
Fair value, continuous unrealized loss position for 12 months or more | 1,770 | ' |
Unrealized losses, continuous unrealized loss position for 12 months or more | -198 | ' |
Total unrealized losses | ($3,993) | ($29) |
Summary_of_Assets_and_Liabilit
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets: | ' | ' |
Fixed income securities | $290,882 | $330,559 |
Short-term investments | 55,959 | 24,203 |
Separate account assets | 1,700,566 | 1,625,669 |
Total assets at fair value | 2,047,407 | 1,980,431 |
% of total assets at fair value | 100.00% | 100.00% |
Contractholder funds: | ' | ' |
Derivatives embedded in life and annuity contracts | -267,859 | -314,926 |
Total liabilities at fair value | -267,859 | -314,926 |
% of total liabilities at fair value | 100.00% | 100.00% |
U.S. government agencies and authorities | ' | ' |
Assets: | ' | ' |
Fixed income securities | 73,846 | 92,087 |
Municipal | ' | ' |
Assets: | ' | ' |
Fixed income securities | 2,769 | 2,900 |
Corporate | ' | ' |
Assets: | ' | ' |
Fixed income securities | 191,977 | 191,968 |
Foreign government | ' | ' |
Assets: | ' | ' |
Fixed income securities | 5,164 | 5,264 |
Residential mortgage-backed securities ("RMBS") | ' | ' |
Assets: | ' | ' |
Fixed income securities | 14,450 | 29,737 |
Commercial mortgage-backed securities ("CMBS") | ' | ' |
Assets: | ' | ' |
Fixed income securities | 2,676 | 8,603 |
Recurring basis | ' | ' |
Assets: | ' | ' |
Fixed income securities | 290,882 | 330,559 |
Short-term investments | 55,959 | 24,203 |
Separate account assets | 1,700,566 | 1,625,669 |
Recurring basis | U.S. government agencies and authorities | ' | ' |
Assets: | ' | ' |
Fixed income securities | 73,846 | 92,087 |
Recurring basis | Municipal | ' | ' |
Assets: | ' | ' |
Fixed income securities | 2,769 | 2,900 |
Recurring basis | Corporate | ' | ' |
Assets: | ' | ' |
Fixed income securities | 191,977 | 191,968 |
Recurring basis | Foreign government | ' | ' |
Assets: | ' | ' |
Fixed income securities | 5,164 | 5,264 |
Recurring basis | Residential mortgage-backed securities ("RMBS") | ' | ' |
Assets: | ' | ' |
Fixed income securities | 14,450 | 29,737 |
Recurring basis | Commercial mortgage-backed securities ("CMBS") | ' | ' |
Assets: | ' | ' |
Fixed income securities | 2,676 | 8,603 |
Quoted prices in active markets for identical assets (Level 1) | ' | ' |
Assets: | ' | ' |
Total assets at fair value | 1,748,850 | 1,678,765 |
% of total assets at fair value | 85.40% | 84.70% |
Quoted prices in active markets for identical assets (Level 1) | Recurring basis | ' | ' |
Assets: | ' | ' |
Fixed income securities | 27,520 | 34,303 |
Short-term investments | 20,764 | 18,793 |
Separate account assets | 1,700,566 | 1,625,669 |
Quoted prices in active markets for identical assets (Level 1) | Recurring basis | U.S. government agencies and authorities | ' | ' |
Assets: | ' | ' |
Fixed income securities | 27,520 | 34,303 |
Significant other observable inputs (Level 2) | ' | ' |
Assets: | ' | ' |
Total assets at fair value | 298,557 | 301,354 |
% of total assets at fair value | 14.60% | 15.20% |
Significant other observable inputs (Level 2) | Recurring basis | ' | ' |
Assets: | ' | ' |
Fixed income securities | 263,362 | 295,944 |
Short-term investments | 35,195 | 5,410 |
Significant other observable inputs (Level 2) | Recurring basis | U.S. government agencies and authorities | ' | ' |
Assets: | ' | ' |
Fixed income securities | 46,326 | 57,784 |
Significant other observable inputs (Level 2) | Recurring basis | Municipal | ' | ' |
Assets: | ' | ' |
Fixed income securities | 2,769 | 2,900 |
Significant other observable inputs (Level 2) | Recurring basis | Corporate | ' | ' |
Assets: | ' | ' |
Fixed income securities | 191,977 | 191,656 |
Significant other observable inputs (Level 2) | Recurring basis | Foreign government | ' | ' |
Assets: | ' | ' |
Fixed income securities | 5,164 | 5,264 |
Significant other observable inputs (Level 2) | Recurring basis | Residential mortgage-backed securities ("RMBS") | ' | ' |
Assets: | ' | ' |
Fixed income securities | 14,450 | 29,737 |
Significant other observable inputs (Level 2) | Recurring basis | Commercial mortgage-backed securities ("CMBS") | ' | ' |
Assets: | ' | ' |
Fixed income securities | 2,676 | 8,603 |
Significant unobservable inputs (Level 3) | ' | ' |
Assets: | ' | ' |
Total assets at fair value | ' | 312 |
% of total assets at fair value | ' | 0.10% |
Contractholder funds: | ' | ' |
Derivatives embedded in life and annuity contracts | -267,859 | -314,926 |
Total liabilities at fair value | -267,859 | -314,926 |
% of total liabilities at fair value | 100.00% | 100.00% |
Significant unobservable inputs (Level 3) | Recurring basis | ' | ' |
Assets: | ' | ' |
Fixed income securities | ' | 312 |
Significant unobservable inputs (Level 3) | Recurring basis | Corporate | ' | ' |
Assets: | ' | ' |
Fixed income securities | ' | $312 |
Summary_of_Quantitative_Inform
Summary of Quantitative Information About Significant Unobservable Inputs Used in Level Three Fair Value Measurements (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Fair value | -2,047,407 | -1,980,431 |
Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Fair value | -258,415 | -295,305 |
Minimum | Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Projected option cost (as a percent) | 1.00% | 1.00% |
Maximum | Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Projected option cost (as a percent) | 2.00% | 2.00% |
Weighted average | Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Projected option cost (as a percent) | 1.91% | 1.96% |
Schedule_of_Rollforward_of_Lev
Schedule of Rollforward of Level Three Assets and Liabilities Held at Fair Value on Recurring Basis (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | $312 | $2,919 | $9,648 | |||
Level 3 assets, Total gains (losses) included in net income | ' | ' | -4 | [1] | ||
Level 3 assets, Total gains (losses) included in OCI | ' | ' | 42 | |||
Level 3 assets, Transfers into Level 3 | ' | ' | ' | |||
Level 3 assets, Transfers out of Level 3 | ' | -2,321 | -15,643 | |||
Level 3 liabilities, Balance at beginning of period | -314,926 | -506,678 | -494,149 | |||
Level 3 liabilities, Total gains (losses) included in net income | 43,244 | [2] | 131,054 | [3] | -110,951 | [1] |
Level 3 liabilities, Total gains (losses) included in OCI | ' | ' | ' | |||
Level 3 liabilities, Transfers into Level 3 | ' | ' | ' | |||
Level 3 liabilities, Transfers out of Level 3 | ' | ' | ' | |||
Level 3 assets, Purchases | ' | ' | 10,000 | |||
Level 3 assets, Sales | ' | ' | ' | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -312 | -286 | -1,124 | |||
Level 3 assets, Balance at end of period | ' | 312 | 2,919 | |||
Level 3 liabilities, Purchases | ' | ' | ' | |||
Level 3 liabilities, Sales | ' | ' | ' | |||
Level 3 liabilities, Issues | -6,621 | -11,024 | -55,559 | |||
Level 3 liabilities, Settlements | 10,444 | 71,722 | 153,981 | |||
Level 3 liabilities, Balance at end of period | -267,859 | -314,926 | -506,678 | |||
Corporate | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 312 | 598 | 852 | |||
Level 3 assets, Total gains (losses) included in OCI | ' | ' | 199 | |||
Level 3 assets, Transfers into Level 3 | ' | ' | ' | |||
Level 3 assets, Transfers out of Level 3 | ' | ' | -10,199 | |||
Level 3 assets, Purchases | ' | ' | 10,000 | |||
Level 3 assets, Sales | ' | ' | ' | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -312 | -286 | -254 | |||
Level 3 assets, Balance at end of period | ' | 312 | 598 | |||
Residential mortgage-backed securities ("RMBS") | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | ' | 2,321 | 6,880 | |||
Level 3 assets, Total gains (losses) included in net income | ' | ' | -4 | [1] | ||
Level 3 assets, Total gains (losses) included in OCI | ' | ' | -108 | |||
Level 3 assets, Transfers into Level 3 | ' | ' | ' | |||
Level 3 assets, Transfers out of Level 3 | ' | -2,321 | -3,577 | |||
Level 3 assets, Sales | ' | ' | ' | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | ' | ' | -870 | |||
Level 3 assets, Balance at end of period | ' | ' | 2,321 | |||
Commercial mortgage-backed securities ("CMBS") | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | ' | ' | 1,916 | |||
Level 3 assets, Total gains (losses) included in OCI | ' | ' | -49 | |||
Level 3 assets, Transfers into Level 3 | ' | ' | ' | |||
Level 3 assets, Transfers out of Level 3 | ' | ' | -1,867 | |||
Level 3 assets, Sales | ' | ' | ' | |||
Level 3 assets, Issues | ' | ' | ' | |||
Derivatives embedded in life and annuity contracts | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 liabilities, Balance at beginning of period | -314,926 | -506,678 | -494,149 | |||
Level 3 liabilities, Total gains (losses) included in net income | 43,244 | [2] | 131,054 | [3] | -110,951 | [1] |
Level 3 liabilities, Total gains (losses) included in OCI | ' | ' | ' | |||
Level 3 liabilities, Transfers into Level 3 | ' | ' | ' | |||
Level 3 liabilities, Transfers out of Level 3 | ' | ' | ' | |||
Level 3 liabilities, Purchases | ' | ' | ' | |||
Level 3 liabilities, Sales | ' | ' | ' | |||
Level 3 liabilities, Issues | -6,621 | -11,024 | ' | |||
Level 3 liabilities, Settlements | 10,444 | 71,722 | ' | |||
Level 3 liabilities, Balance at end of period | ($267,859) | ($314,926) | ($506,678) | |||
[1] | The amount attributable to fixed income securities is reported in the Statements of Operations and Comprehensive Income as net investment income. The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $(106.6) million in interest credited to contractholder funds and $(4.3) million in contract benefits. These amounts are ceded in accordance with the Company's reinsurance agreements. | |||||
[2] | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $33.0 million in interest credited to contractholder funds and $10.2 million in contract benefits. These amounts are ceded in accordance with the Company's reinsurance agreements. | |||||
[3] | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $125.9 million in interest credited to contractholder funds and $5.1 million in contract benefits. These amounts are ceded in accordance with the Company's reinsurance agreements. |
Schedule_of_Rollforward_of_Lev1
Schedule of Rollforward of Level Three Assets and Liabilities Held at Fair Value on Recurring Basis (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' |
Effect to net income included in interest credited to contract holder funds | $33 | $125.90 | ($106.60) |
Effect to net income included in contract benefits | $10.20 | $5.10 | ($4.30) |
Schedule_of_Change_in_Unrealiz1
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Inputs Gain Loss [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | ' | ' | ($7) | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | 43,244 | [1] | 131,054 | [2] | -110,951 | [3] |
Corporate | ' | ' | ' | |||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Inputs Gain Loss [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | ' | ' | -2 | |||
Residential mortgage-backed securities ("RMBS") | ' | ' | ' | |||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Inputs Gain Loss [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | ' | ' | -5 | |||
Derivatives embedded in life and annuity contracts | ' | ' | ' | |||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Inputs Gain Loss [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | $43,244 | $131,054 | ($110,951) | |||
[1] | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $33.0 million in interest credited to contractholder funds and $10.2 million in contract benefits. These amounts are ceded in accordance with the Company's reinsurance agreements. | |||||
[2] | The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $125.9 million in interest credited to contractholder funds and $5.1 million in contract benefits. These amounts are ceded in accordance with the Company's reinsurance agreements. | |||||
[3] | The amount attributable to fixed income securities is reported in the Statements of Operations and Comprehensive Income as net investment income. The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $(106.6) million in interest credited to contractholder funds and $(4.3) million in contract benefits. These amounts are ceded in accordance with the Company's reinsurance agreements. |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fair Value Disclosures [Line Items] | ' | ' | ' |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in interest credited to contract holder funds | $33,000,000 | $125,900,000 | ($106,600,000) |
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in life and annuity contract benefits | 10,200,000 | 5,100,000 | -4,300,000 |
Carrying value | ' | ' | ' |
Fair Value Disclosures [Line Items] | ' | ' | ' |
Contractholder funds on investment contracts | 7,760,000,000 | 9,160,000,000 | ' |
Fair value | ' | ' | ' |
Fair Value Disclosures [Line Items] | ' | ' | ' |
Contractholder funds on investment contracts | $7,660,000,000 | $9,140,000,000 | ' |
Summary_of_Volume_and_Fair_Val
Summary of Volume and Fair Value Positions of Derivative Instruments and Reporting Location in Statement of Financial Position (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Total derivatives, Notional amount | $2,766,225 | $3,298,473 |
Total derivatives | -267,859 | -314,926 |
Derivatives not designated as accounting hedging instruments | Contractholder funds | Derivatives embedded in life and annuity contracts - Equity-indexed and forward starting options | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total liability derivatives, Notional amount | 2,591,090 | 3,098,496 |
Total liability derivatives, Fair value, net | -258,415 | -295,305 |
Derivatives not designated as accounting hedging instruments | Contractholder funds | Guaranteed accumulation benefits | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total liability derivatives, Notional amount | 152,936 | 174,791 |
Total liability derivatives, Fair value, net | -8,970 | -18,047 |
Derivatives not designated as accounting hedging instruments | Contractholder funds | Guaranteed withdrawal benefits | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total liability derivatives, Notional amount | 22,199 | 25,186 |
Total liability derivatives, Fair value, net | ($474) | ($1,574) |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) (Allstate Life Insurance Company, USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest credited to contractholder funds | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Gains (losses) from valuation and settlements on embedded derivative financial instruments | $36.90 | $186.60 |
Contract benefits | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Gains (losses) from valuation and settlements on embedded derivative financial instruments | $10.20 | $5.10 |
Schedule_of_Reserve_for_LifeCo
Schedule of Reserve for Life-Contingent Contract Benefits (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | $3,557,411 | $3,424,679 |
Traditional life insurance | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 1,548,134 | 1,519,650 |
Immediate fixed annuities | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 676,565 | 677,986 |
Accident And Health Insurance | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 1,324,268 | 1,217,648 |
Other Life Contingent Products | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | $8,444 | $9,395 |
Schedule_of_Key_Assumptions_Us
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Traditional life insurance | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' |
Mortality | 'Actual company experience plus loading |
Interest rate discription | 'Interest rate assumptions range from 2.5% to 8.0% |
Interest rate, low end | 2.50% |
Interest rate, high end | 8.00% |
Estimation method | 'Net level premium reserve method using the Company's withdrawal experience rates; includes reserves for unpaid claims |
Immediate fixed annuities | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' |
Mortality | '1983 individual annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications |
Estimation method | 'Present value of expected future benefits based on historical experience |
Interest rate discription | 'Interest rate assumptions range from 0% to 8.8% |
Interest rate, low end | 0.00% |
Interest rate, high end | 8.80% |
Accident And Health Insurance | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' |
Mortality | 'Actual company experience plus loading |
Estimation method | 'Unearned premium; additional contract reserves for mortality risk and unpaid claims |
Interest rate discription | 'Interest rate assumptions range from 4.0% to 5.8% |
Interest rate, low end | 4.00% |
Interest rate, high end | 5.80% |
Guaranteed death benefits | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' |
Mortality | 'Annuity 2000 mortality table with internal modifications |
Estimation method | 'Projected benefit ratio applied to cumulative assessments |
Interest rate discription | 'Interest rate assumptions range from 4.0% to 5.8% |
Interest rate, low end | 4.00% |
Interest rate, high end | 5.80% |
Schedule_of_Contractholder_Fun
Schedule of Contractholder Funds (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | $13,124,115 | $14,255,844 | $15,489,624 | $17,247,071 |
Interest-sensitive life insurance | ' | ' | ' | ' |
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | 5,020,265 | 4,814,410 | ' | ' |
Fixed annuities | ' | ' | ' | ' |
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | 7,803,892 | 9,201,641 | ' | ' |
Other investment contracts | ' | ' | ' | ' |
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | $299,958 | $239,793 | ' | ' |
Schedule_of_Contract_Provision
Schedule of Contract Provisions Related to Contractholder Funds (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Other investment contracts | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate discription | 'Interest rates used in establishing reserves range from 1.7% to 10.3% |
Interest rate, low end | 1.70% |
Interest rate, high end | 10.30% |
Withdrawal/surrender charges | 'Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract |
Fixed annuities | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate discription | 'Interest rates credited range from 0% to 8.8% fo immediate annuities; 0% to 7.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 1.0% to 6.0% for all other products |
Withdrawal/surrender charges | 'Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 18.7% of fixed annuities are subject to market value adjustment for discretionary withdrawals. |
Term of withdrawal/surrender charges | '10 years |
Percentage of fixed annuities subject to market value adjustment for discretionary withdrawals | 18.70% |
Fixed annuities | Immediate annuities | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate, low end | 0.00% |
Interest rate, high end | 8.80% |
Fixed annuities | Equity-indexed life | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate, low end | 0.00% |
Interest rate, high end | 7.00% |
Fixed annuities | All other products | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate, low end | 1.00% |
Interest rate, high end | 6.00% |
Interest-sensitive life insurance | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate discription | 'Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.6% to 6.0% for al other products |
Withdrawal/surrender charges | 'Either a percentage of account balance or dollar amount grading off generally over 20 years |
Term of withdrawal/surrender charges | '20 years |
Interest-sensitive life insurance | Equity-indexed life | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate, low end | 0.00% |
Interest rate, high end | 10.00% |
Interest-sensitive life insurance | All other products | ' |
Policyholder Contract Deposits [Line Items] | ' |
Interest rate, low end | 2.60% |
Interest rate, high end | 6.00% |
Schedule_of_Contractholder_Fun1
Schedule of Contractholder Funds Activity (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Insurance [Line Items] | ' | ' | ' |
Balance, beginning of year | $14,255,844 | $15,489,624 | $17,247,071 |
Deposits | 1,109,108 | 1,070,374 | 1,007,316 |
Interest credited | 524,801 | 406,805 | 576,331 |
Benefits | -353,687 | -473,329 | -459,991 |
Surrenders and partial withdrawals | -1,880,495 | -1,703,966 | -2,412,295 |
Contract charges | -601,609 | -558,519 | -513,068 |
Net transfers from separate accounts | 18,477 | 16,463 | 18,935 |
Other adjustments | 51,676 | 8,392 | 25,325 |
Balance, end of year | $13,124,115 | $14,255,844 | $15,489,624 |
Summary_of_Variable_Annuity_Co
Summary of Variable Annuity Contracts with Guarantees (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Guaranteed death benefits | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value in the event of death | $877 | $926.10 | ||
Net amount at risk in the event of death | 63.2 | [1] | 101.6 | [1] |
Average attained age of contractholders | '59 years | '59 years | ||
Guaranteed income benefits | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value at annuitization | 170.5 | 168.1 | ||
Net amount at risk at annuitization | 16.6 | [2] | 29.6 | [2] |
Weighted average waiting period until annuitization or guarantee date | '0 years | '1 year | ||
Guaranteed Lifetime, cumulative periodic withdrawals | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value | 21.8 | 24.8 | ||
Net amount at risk | 0.1 | [3] | 0.2 | [3] |
Guaranteed accumulation benefits | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value | 151.1 | 172 | ||
Net amount at risk | $7.30 | [4] | $13.70 | [4] |
Weighted average waiting period until annuitization or guarantee date | '6 years | '7 years | ||
[1] | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | |||
[2] | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | |||
[3] | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | |||
[4] | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. |
Reserve_for_LifeContingent_Con2
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Guaranteed interest-sensitive life and fixed annuity | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Liabilities for guarantees | $281.80 | $200.70 |
Variable annuity | Guaranteed death benefits | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Liabilities for guarantees | 8.4 | 9.4 |
Variable annuity | Guaranteed income benefits | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Liabilities for guarantees | 8.7 | 19.5 |
Variable annuity | Guaranteed accumulation benefits | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Liabilities for guarantees | 9 | 18 |
Variable annuity | Guaranteed Lifetime, cumulative periodic withdrawals | ' | ' |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' |
Liabilities for guarantees | $0.50 | $1.60 |
Reinsurance_Additional_Informa
Reinsurance - Additional Information (Detail) | Dec. 31, 2013 | Dec. 31, 2012 |
Allstate Life Insurance Company | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance recoverables | 86.90% | ' |
Non-affiliates | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance recoverables | 13.10% | ' |
Non-affiliates | Rated A- or better | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' |
Reinsurance recoverables | 95.00% | 98.00% |
Schedule_of_Effects_of_Reinsur
Schedule of Effects of Reinsurance on Premiums and Contract Charges (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Direct premiums and contract charges | $1,331,597 | $1,298,864 | $1,266,264 |
Assumed premiums and contract charges | 6,830 | 6,784 | 7,057 |
Total premiums and contract charges | ' | ' | ' |
Affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Ceded premiums and contract charges | -962,576 | -908,459 | -833,149 |
Non-affiliates | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Ceded premiums and contract charges | ($375,851) | ($397,189) | ($440,172) |
Schedule_of_Effects_of_Reinsur1
Schedule of Effects of Reinsurance on Interest Credited to Contractholder Funds, Contract Benefits and Expenses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Direct interest credited to contractholder funds, contract benefits and expenses | $1,938,015 | $1,882,714 | $1,893,124 |
Assumed interest credited to contractholder funds, contract benefits and expenses | 8,180 | 9,167 | 7,337 |
Interest credited to contractholder funds, contract benefits and expenses, net of reinsurance | ' | ' | ' |
Affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Ceded interest credited to contractholder funds, contract benefits and expenses | -1,505,010 | -1,369,305 | -1,408,953 |
Non-affiliates | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Ceded interest credited to contractholder funds, contract benefits and expenses | ($441,185) | ($522,576) | ($491,508) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income taxes paid | $4.20 | $4.80 | $4.40 |
Tax Year Twenty Eleven Through Twenty Twelve | Minimum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under examination | '2011 | ' | ' |
Tax Year Twenty Eleven Through Twenty Twelve | Maximum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under examination | '2012 | ' | ' |
2009 and 2010 | Minimum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under consideration at IRS Appeals Office | '2009 | ' | ' |
2009 and 2010 | Maximum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under consideration at IRS Appeals Office | '2010 | ' | ' |
Tax Years Twenty Zero Five Through Twenty Zero Eight | Minimum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under consideration at IRS Appeals Office | '2005 | ' | ' |
Tax Years Twenty Zero Five Through Twenty Zero Eight | Maximum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under consideration at IRS Appeals Office | '2008 | ' | ' |
Components_of_Deferred_Income_
Components of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred assets | ' | ' |
Reinsurance recoverables | $497 | ' |
Other assets | 4 | ' |
Total deferred assets | 501 | ' |
Deferred liabilities | ' | ' |
Unrealized net capital gains | -2,084 | -7,433 |
Accrued expenses | -981 | -524 |
Other liabilities | ' | -33 |
Total deferred liabilities | -3,065 | -7,990 |
Net deferred liability | ($2,564) | ($7,990) |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components Of Income Tax Expense Benefit [Line Items] | ' | ' | ' |
Current | $3,902 | $4,145 | $4,802 |
Deferred | -77 | 128 | 59 |
Total income tax expense | $3,825 | $4,273 | $4,861 |
Reconciliation_of_Statutory_Fe
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
Other | ' | ' | -0.10% |
Effective income tax rate | 35.00% | 35.00% | 34.90% |
Statutory_Financial_Informatio1
Statutory Financial Information and Dividend Limitations - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Statutory net income | $7.70 | $8.50 | $8.60 |
Statutory capital and surplus | 332.5 | 323.9 | ' |
Maximum dividends company can pay during 2014 without regulatory approval | 33.2 | ' | ' |
Unassigned surplus | 159.2 | ' | ' |
Total Statutory capital and surplus | 332.5 | ' | ' |
Risk based capital | $61.90 | ' | ' |
Schedule_of_Components_of_Othe
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Pre-tax | ' | ' | ' |
Unrealized net holding gains arising during the period | ($15,281) | $977 | $7,322 |
Less: reclassification adjustment of realized capital gains and losses | 1 | 596 | 2,075 |
Unrealized net capital gains and losses | -15,282 | 381 | 5,247 |
Other comprehensive income | -15,282 | 381 | 5,247 |
Tax | ' | ' | ' |
Unrealized net holding gains arising during the period | 5,349 | -343 | -2,562 |
Less: reclassification adjustment of realized capital gains and losses | ' | -209 | -726 |
Unrealized net capital gains and losses | 5,349 | -134 | -1,836 |
Other comprehensive income | 5,349 | -134 | -1,836 |
After-tax | ' | ' | ' |
Unrealized net holding gains arising during the period | -9,932 | 634 | 4,760 |
Less: reclassification adjustment of realized capital gains and losses | 1 | 387 | 1,349 |
Unrealized net capital gains and losses | -9,933 | 247 | 3,411 |
Other comprehensive income | ($9,933) | $247 | $3,411 |
Schedule_I_Summary_of_Investme
Schedule I - Summary of Investments Other Than Investments in Related Parties (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | $340,887 |
Fair value | 346,841 |
Amount at which shown in the Balance Sheet | 346,841 |
U.S. government agencies and authorities | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 70,790 |
Fair value | 73,846 |
Amount at which shown in the Balance Sheet | 73,846 |
States, municipalities and political subdivisions | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 2,499 |
Fair value | 2,769 |
Amount at which shown in the Balance Sheet | 2,769 |
Foreign government | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 4,999 |
Fair value | 5,164 |
Amount at which shown in the Balance Sheet | 5,164 |
Public utilities | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 14,960 |
Fair value | 15,994 |
Amount at which shown in the Balance Sheet | 15,994 |
All other corporate bonds | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 175,226 |
Fair value | 175,983 |
Amount at which shown in the Balance Sheet | 175,983 |
Residential mortgage-backed securities ("RMBS") | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 13,866 |
Fair value | 14,450 |
Amount at which shown in the Balance Sheet | 14,450 |
Commercial mortgage-backed securities ("CMBS") | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 2,588 |
Fair value | 2,676 |
Amount at which shown in the Balance Sheet | 2,676 |
Fixed income securities | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 284,928 |
Fair value | 290,882 |
Amount at which shown in the Balance Sheet | 290,882 |
Short-term investments | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Amortized cost | 55,959 |
Fair value | 55,959 |
Amount at which shown in the Balance Sheet | $55,959 |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | |||
Gross amount | $1,331,597 | $1,298,864 | $1,266,264 | |||
Ceded to other companies | 1,338,427 | [1] | 1,305,648 | [1] | 1,273,321 | [1] |
Assumed from other companies | 6,830 | 6,784 | 7,057 | |||
Net amount | ' | ' | ' | |||
Percentage of amount assumed to net | ' | ' | ' | |||
Gross amount | 389,941,404 | 378,467,115 | 364,469,564 | |||
Ceded to other companies | 395,421,202 | [1] | 384,205,939 | [1] | 370,439,179 | [1] |
Assumed from other companies | 5,479,798 | 5,738,824 | 5,969,615 | |||
Net amount | ' | ' | ' | |||
Percentage of amount assumed to net | ' | ' | ' | |||
Life and annuities | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | |||
Gross amount | 1,250,623 | 1,201,592 | 1,156,434 | |||
Ceded to other companies | 1,257,453 | [1] | 1,208,376 | [1] | 1,163,491 | [1] |
Assumed from other companies | 6,830 | 6,784 | 7,057 | |||
Net amount | ' | ' | ' | |||
Percentage of amount assumed to net | ' | ' | ' | |||
Accident And Health Insurance | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | |||
Gross amount | 80,974 | 97,272 | 109,830 | |||
Ceded to other companies | 80,974 | [1] | 97,272 | [1] | 109,830 | [1] |
Net amount | ' | ' | ' | |||
Percentage of amount assumed to net | ' | ' | ' | |||
[1] | No reinsurance or coinsurance income was netted against premiums ceded in 2013, 2012 or 2011. |