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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows:

		June 30, 2018
		Level 1				Level 2				Level 3				Total
		(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies		$	-			$	11,714			$	-			$	11,714
Foreign government			-				151,047				-				151,047
States and political subdivisions			-				55,631				-				55,631
Corporates			3,130				1,387,393				3				1,390,526
Residential mortgage-backed securities			-				161,063				319				161,382
Commercial mortgage-backed securities			-				136,143				-				136,143
Other asset-backed securities			-				79,447				-				79,447
Total available-for-sale fixed-maturity securities			3,130				1,982,438				322				1,985,890
Equity securities			37,350				2,298				194				39,842
Trading securities			-				23,079				-				23,079
Separate accounts			-				2,389,007				-				2,389,007
Total fair value assets		$	40,480			$	4,396,822			$	516			$	4,437,818
Fair value liabilities:
Separate accounts		$	-			$	2,389,007			$	-			$	2,389,007
Total fair value liabilities		$	-			$	2,389,007			$	-			$	2,389,007

		December 31, 2017
		Level 1				Level 2				Level 3				Total
		(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies		$	-			$	11,813			$	-			$	11,813
Foreign government			-				144,489				-				144,489
States and political subdivisions			-				56,127				-				56,127
Corporates			3,240				1,373,039				3				1,376,282
Residential mortgage-backed securities			-				122,544				414				122,958
Commercial mortgage-backed securities			-				135,392				-				135,392
Other asset-backed securities			-				80,781				-				80,781
Total available-for-sale fixed-maturity securities			3,240				1,924,185				417				1,927,842
Available-for-sale equity securities			39,026				1,931				150				41,107
Trading securities			1,428				4,800				-				6,228
Separate accounts			-				2,572,872				-				2,572,872
Total fair value assets		$	43,694			$	4,503,788			$	567			$	4,548,049
Fair value liabilities:
Separate accounts		$	-			$	2,572,872			$	-			$	2,572,872
Total fair value liabilities		$	-			$	2,572,872			$	-			$	2,572,872

Roll forward of Level 3 Assets Measured on Recurring Basis

The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows:

		Three months ended June 30, (1)								Six months ended June 30,
		2018				2017				2018				2017
		(In thousands)
Level 3 assets, beginning of period		$	535			$	9,788			$	567			$	8,162
Net unrealized gains (losses) included in other    comprehensive income			(4	)			236				(13	)			222
Realized gains (losses) and accretion (amortization)    recognized in earnings, including OTTI			27				3				45				10
Purchases			-				1,250				-				1,250
Settlements			(42	)			(213	)			(83	)			(441	)
Transfers into Level 3			-				4				-				2,439
Transfers out of Level 3 (2)			-				(9,207	)			-				(9,781	)
Level 3 assets, end of period		$	516			$	1,861			$	516			$	1,861

(1) Activities for investments that enter Level 3 in one quarter and exit Level 3 in another quarter within the same fiscal year are not eliminated until year-end when only the full year amounts are presented.

(2) During the three and six months ended June 30, 2017, transfers out of Level 3 assets primarily consisted of newly issued fixed-maturity securities in the previous quarter for which observable inputs, most notably quoted prices, used to derive valuations became readily available.

Carrying Values and Estimated Fair Values of Financial Instruments

The carrying values and estimated fair values of our financial instruments were as follows:

		June 30, 2018								December 31, 2017
		Carrying value				Estimated fair value				Carrying value				Estimated fair value
		(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)		$	1,985,890			$	1,985,890			$	1,927,842			$	1,927,842
Fixed-maturity security (held-to-maturity) (3)			843,810				838,637				737,150				779,472
Available-for-sale equity securities			-				-				41,107				41,107
Equity securities			39,842				39,842				-				-
Trading securities			23,079				23,079				6,228				6,228
Policy loans (3)			30,954				30,954				32,816				32,816
Deposit asset underlying 10% coinsurance agreement (3)			223,105				223,105				217,336				217,336
Separate accounts			2,389,007				2,389,007				2,572,872				2,572,872
Liabilities:
Notes payable (1)  (2)		$	373,474			$	384,401			$	373,288			$	400,628
Surplus note (1)  (3)			843,073				838,459				736,381				778,050
Separate accounts			2,389,007				2,389,007				2,572,872				2,572,872

(1) Carrying value amounts shown are net of issuance costs.

(2) Classified as a level 2 fair value measurement.

(3) Classified as a level 3 fair value measurement.

X

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19279-110258

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 11
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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
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