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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

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, 2022
		Level 1				Level 2				Level 3				Total
		(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies		$	-			$	32,252			$	-			$	32,252
Foreign government			-				149,832				-				149,832
States and political subdivisions			-				129,540				-				129,540
Corporates			5,049				1,511,924				-				1,516,973
Mortgage- and asset-backed securities:
Residential mortgage-backed securities			-				439,062				-				439,062
Commercial mortgage-backed securities			-				135,505				-				135,505
Other asset-backed securities			-				151,301				-				151,301
Total available-for-sale fixed-maturity securities			5,049				2,549,416				-				2,554,465
Short-term investments			-				3,311				-				3,311
Total available-for-sale securities			5,049				2,552,727				-				2,557,776
Equity securities			33,228				1,015				1,634				35,877
Trading securities			-				8,976				-				8,976
Cash and cash equivalents			398,823				1,296				-				400,119
Separate accounts			-				2,358,987				-				2,358,987
Total fair value assets		$	437,100			$	4,923,001			$	1,634			$	5,361,735
Fair value liabilities:
Separate accounts		$	-			$	2,358,987			$	-			$	2,358,987
Total fair value liabilities		$	-			$	2,358,987			$	-			$	2,358,987

		December 31, 2021
		Level 1				Level 2				Level 3				Total
		(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies		$	-			$	32,400			$	-			$	32,400
Foreign government			-				152,976				-				152,976
States and political subdivisions			-				153,527				-				153,527
Corporates			5,898				1,707,786				-				1,713,684
Mortgage-and asset-backed securities:
Residential mortgage-backed securities			-				375,604				27				375,631
Commercial mortgage-backed securities			-				145,525				-				145,525
Other asset-backed securities			-				128,824				-				128,824
Total available-for-sale fixed-maturity securities			5,898				2,696,642				27				2,702,567
Short-term investments			-				85,243				-				85,243
Total available-for-sale securities			5,898				2,781,885				27				2,787,810
Equity securities			37,912				1,070				3,569				42,551
Trading securities			-				24,355				-				24,355
Cash and cash equivalents			351,508				40,993				-				392,501
Separate accounts			-				2,799,992				-				2,799,992
Total fair value assets		$	395,318			$	5,648,295			$	3,596			$	6,047,209
Fair value liabilities:
Separate accounts		$	-			$	2,799,992			$	-			$	2,799,992
Total fair value liabilities		$	-			$	2,799,992			$	-			$	2,799,992

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,								Six months ended June 30, (1)
		2022				2021				2022				2021
		(In thousands)
Level 3 assets, beginning of period		$	10,689			$	4,177			$	3,596			$	2,047
Net unrealized gains (losses) included in other comprehensive income			108				-				106				-
Realized gains (losses) and accretion (amortization) recognized in earnings			7				(150	)			(200	)			(234	)
Purchases			1,588				999				7,491				999
Sales			-				-				-				-
Settlements			(1,400	)			(2,190	)			(1,400	)			(2,190	)
Transfers into Level 3			-				500				1,399				2,714
Transfers out of Level 3			(9,358	)			-				(9,358	)			-
Level 3 assets, end of period		$	1,634			$	3,336			$	1,634			$	3,336

⁽¹⁾ Activities for investments that enter and exit Level 3 in different quarters within the same fiscal year are not eliminated until the full year amounts are presented.

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, 2022								December 31, 2021
		Carrying value				Estimated fair value				Carrying value				Estimated fair value
		(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)		$	2,554,465			$	2,554,465			$	2,702,567			$	2,702,567
Fixed-maturity security (held-to-maturity) (3)			1,415,940				1,378,744				1,379,100				1,551,113
Short-term investments (available-for-sale)			3,311				3,311				85,243				85,243
Equity securities			35,877				35,877				42,551				42,551
Trading securities			8,976				8,976				24,355				24,355
Policy loans (3)			33,069				33,069				30,612				30,612
Deposit asset underlying 10% coinsurance agreement (3)			227,958				227,958				231,368				231,368
Separate accounts			2,358,987				2,358,987				2,799,992				2,799,992
Liabilities:
Notes payable - Long term (1)  (2)		$	592,504			$	505,791			$	592,102			$	605,667
Surplus note (1)  (3)			1,415,457				1,372,732				1,378,585				1,545,854
Separate accounts			2,358,987				2,358,987				2,799,992				2,799,992

(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

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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
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-Topic 820
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