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Investments (Tables) | 3 Months Ended
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Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract] |
Unrealized gains and losses on fixed maturities and equity securities | The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (loss) (“AOCI”) of all fixed maturities and equity securities in the portfolio were as follows:
|  | Amortized |  | Unrealized |  | Unrealized |  | Fair |  | OTTI in |
|  | Cost/Cost |  | Gains |  | Losses |  | Value |  | AOCI (1) |
March 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and federally sponsored agency obligations (2): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 441,038 |  | $ | 54,633 |  | $ | 471 |  | $ | 495,200 |  | $ | - |
Other, including |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  |  | 508,042 |  |  | 32,078 |  |  | - |  |  | 540,120 |  |  | - |
Municipal bonds |  |  | 1,536,111 |  |  | 198,416 |  |  | 7,199 |  |  | 1,727,328 |  |  | (2,724) |
Foreign government bonds |  |  | 67,422 |  |  | 6,665 |  |  | - |  |  | 74,087 |  |  | - |
Corporate bonds |  |  | 2,684,520 |  |  | 177,754 |  |  | 28,343 |  |  | 2,833,931 |  |  | - |
Other mortgage-backed securities |  |  | 1,554,168 |  |  | 20,255 |  |  | 28,587 |  |  | 1,545,836 |  |  | 1,264 |
Totals |  | $ | 6,791,301 |  | $ | 489,801 |  | $ | 64,600 |  | $ | 7,216,502 |  | $ | (1,460) |
Equity securities (3) |  | $ | 96,305 |  | $ | 10,837 |  | $ | 3,098 |  | $ | 104,044 |  | $ | - |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and federally sponsored agency obligations (2): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 461,862 |  | $ | 44,413 |  | $ | 1,861 |  | $ | 504,414 |  | $ | - |
Other, including |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  |  | 532,373 |  |  | 21,153 |  |  | 7,415 |  |  | 546,111 |  |  | - |
Municipal bonds |  |  | 1,553,603 |  |  | 165,680 |  |  | 10,340 |  |  | 1,708,943 |  |  | (4,140) |
Foreign government bonds |  |  | 67,441 |  |  | 6,288 |  |  | 112 |  |  | 73,617 |  |  | - |
Corporate bonds |  |  | 2,687,376 |  |  | 140,873 |  |  | 48,834 |  |  | 2,779,415 |  |  | - |
Other mortgage-backed securities |  |  | 1,482,971 |  |  | 16,830 |  |  | 20,961 |  |  | 1,478,840 |  |  | 1,382 |
Totals |  | $ | 6,785,626 |  | $ | 395,237 |  | $ | 89,523 |  | $ | 7,091,340 |  | $ | (2,758) |
Equity securities (3) |  | $ | 95,722 |  | $ | 8,405 |  | $ | 4,330 |  | $ | 99,797 |  | $ | - |
| (1) | Related to securities for which an unrealized loss was bifurcated to distinguish the credit-related portion and the portion driven by other market factors. Represents the amount of other-than-temporary impairment losses in AOCI which was not included in earnings; amounts also include unrealized gains/(losses) on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date.
| (2) | Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $234,668 and $231,294; Federal Home Loan Mortgage Corporation (“FHLMC”) of $342,877 and $363,957; and Government National Mortgage Association (“GNMA”) of $126,252 and $130,940 as of March 31, 2016 and December 31, 2015, respectively.
| (3) | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds.
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | For equity securities, the Company has the ability and intent to hold the securities for the recovery of cost and recovery of cost is expected within a reasonable period of time.
|  | 12 Months or Less |  | More than 12 Months |  | Total |
|  |  |  |  | Gross |  |  |  |  | Gross |  |  |  |  | Gross |
|  |  |  |  | Unrealized |  |  |  |  | Unrealized |  |  |  |  | Unrealized |
|  | Fair Value |  |  | Losses |  | Fair Value |  |  | Losses |  | Fair Value |  |  | Losses |
March 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and federally sponsored agency obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 3,919 |  |  | $ | 188 |  | $ | 2,918 |  |  | $ | 283 |  | $ | 6,837 |  |  | $ | 471 |
Other |  |  | 10,000 |  |  |  | - |  |  | - |  |  |  | - |  |  | 10,000 |  |  |  | - |
Municipal bonds |  |  | 37,752 |  |  |  | 4,056 |  |  | 12,324 |  |  |  | 3,143 |  |  | 50,076 |  |  |  | 7,199 |
Foreign government bonds |  |  | - |  |  |  | - |  |  | - |  |  |  | - |  |  | - |  |  |  | - |
Corporate bonds |  |  | 435,489 |  |  |  | 16,822 |  |  | 64,934 |  |  |  | 11,521 |  |  | 500,423 |  |  |  | 28,343 |
Other mortgage-backed securities |  |  | 884,292 |  |  |  | 24,692 |  |  | 174,345 |  |  |  | 3,895 |  |  | 1,058,637 |  |  |  | 28,587 |
Total fixed maturity securities |  |  | 1,371,452 |  |  |  | 45,758 |  |  | 254,521 |  |  |  | 18,842 |  |  | 1,625,973 |  |  |  | 64,600 |
Equity securities (1) |  |  | 11,789 |  |  |  | 1,875 |  |  | 9,325 |  |  |  | 1,223 |  |  | 21,114 |  |  |  | 3,098 |
Combined totals |  | $ | 1,383,241 |  |  | $ | 47,633 |  | $ | 263,846 |  |  | $ | 20,065 |  | $ | 1,647,087 |  |  | $ | 67,698 |
Number of positions with a gross unrealized loss |  |  | 421 |  |  |  |  |  |  | 93 |  |  |  |  |  |  | 514 |  |  |  |  |
Fair value as a percentage of total fixed maturities and equity securities fair value |  |  | 18.9 | % |  |  |  |  |  | 3.6 | % |  |  |  |  |  | 22.5 | % |  |  |  |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and federally sponsored agency obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 48,097 |  |  | $ | 1,748 |  | $ | 1,595 |  |  | $ | 113 |  | $ | 49,692 |  |  | $ | 1,861 |
Other |  |  | 248,478 |  |  |  | 7,338 |  |  | 1,921 |  |  |  | 77 |  |  | 250,399 |  |  |  | 7,415 |
Municipal bonds |  |  | 168,939 |  |  |  | 5,382 |  |  | 21,717 |  |  |  | 4,958 |  |  | 190,656 |  |  |  | 10,340 |
Foreign government bonds |  |  | 11,867 |  |  |  | 112 |  |  | - |  |  |  | - |  |  | 11,867 |  |  |  | 112 |
Corporate bonds |  |  | 858,647 |  |  |  | 37,244 |  |  | 50,340 |  |  |  | 11,590 |  |  | 908,987 |  |  |  | 48,834 |
Other mortgage-backed securities |  |  | 929,268 |  |  |  | 19,165 |  |  | 140,561 |  |  |  | 1,796 |  |  | 1,069,829 |  |  |  | 20,961 |
Total fixed maturity securities |  |  | 2,265,296 |  |  |  | 70,989 |  |  | 216,134 |  |  |  | 18,534 |  |  | 2,481,430 |  |  |  | 89,523 |
Equity securities (1) |  |  | 38,764 |  |  |  | 3,022 |  |  | 8,379 |  |  |  | 1,308 |  |  | 47,143 |  |  |  | 4,330 |
Combined totals |  | $ | 2,304,060 |  |  | $ | 74,011 |  | $ | 224,513 |  |  | $ | 19,842 |  | $ | 2,528,573 |  |  | $ | 93,853 |
Number of positions with a gross unrealized loss |  |  | 684 |  |  |  |  |  |  | 78 |  |  |  |  |  |  | 762 |  |  |  |  |
Fair value as a percentage of total fixed maturities and equity securities fair value |  |  | 32.0 | % |  |  |  |  |  | 3.1 | % |  |  |  |  |  | 35.1 | % |  |  |  |
| (1) | Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds.
Summary of cumulative credit losses | The following table summarizes the cumulative amounts related to the Company’s credit loss component of the other-than-temporary impairment losses on fixed maturity securities held as of March 31, 2016 and 2015 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of the other-than-temporary impairment losses were recognized in other comprehensive income (loss):
|  | Three Months Ended |
|  | March 31, |
|  | 2016 |  | 2015 |
Cumulative credit loss (1) |  |  |  |  |  |  |
Beginning of period |  | $ | 7,844 |  | $ | 2,877 |
New credit losses |  |  | 1,824 |  |  | - |
Losses related to securities sold or paid down during the period |  |  | - |  |  | - |
End of period |  | $ | 9,668 |  | $ | 2,877 |
| (1) | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis.
Distribution of the Company's fixed maturity portfolio by estimated expected maturity | The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers’ utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.
|  | Percent of Total Fair Value |  | March 31, 2016 |
|  | March 31, |  |  | December 31, |  | Fair |  | Amortized |
|  | 2016 |  |  | 2015 |  | Value |  | Cost |
Estimated expected maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due in 1 year or less |  |  | 3.6 | % |  |  | 3.1 | % | $ | 260,299 |  | $ | 244,935 |
Due after 1 year through 5 years |  |  | 26.3 |  |  |  | 24.2 |  |  | 1,900,899 |  |  | 1,788,903 |
Due after 5 years through 10 years |  |  | 37.9 |  |  |  | 39.6 |  |  | 2,728,632 |  |  | 2,567,871 |
Due after 10 years through 20 years |  |  | 20.4 |  |  |  | 20.9 |  |  | 1,474,836 |  |  | 1,387,922 |
Due after 20 years |  |  | 11.8 |  |  |  | 12.2 |  |  | 851,836 |  |  | 801,670 |
Total |  |  | 100.0 | % |  |  | 100.0 | % | $ | 7,216,502 |  | $ | 6,791,301 |
Average option-adjusted duration, in years |  |  | 5.7 |  |  |  | 5.8 |  |  |  |  |  |  |
Proceeds received from sales of fixed maturities and equity securities | Proceeds received from sales of fixed maturities and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were:
|  | Three Months Ended |
|  | March 31, |
|  | 2016 |  | 2015 |
Fixed maturity securities |  |  |  |  |  |  |
Proceeds received |  | $ | 82,090 |  | $ | 81,320 |
Gross gains realized |  |  | 2,476 |  |  | 1,654 |
Gross losses realized |  |  | (492) |  |  | (463) |
Equity securities |  |  |  |  |  |  |
Proceeds received |  | $ | 6,147 |  | $ | 13,969 |
Gross gains realized |  |  | 520 |  |  | 4,602 |
Gross losses realized |  |  | (646) |  |  | (10) |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles the net unrealized investment gains and losses, net of tax, included in accumulated other comprehensive income (loss), before the impact on deferred policy acquisition costs:
|  | Three Months Ended |
|  | March 31, |
|  | 2016 |  | 2015 |
Net unrealized investment gains (losses) on fixed maturity securities, net of tax |  |  |  |  |  |  |
Beginning of period |  | $ | 198,714 |  | $ | 336,604 |
Change in unrealized investment gains and losses |  |  | 78,341 |  |  | 45,486 |
Reclassification of net realized investment (gains) losses to net income |  |  | (674) |  |  | (846) |
End of period |  | $ | 276,381 |  | $ | 381,244 |
Net unrealized investment gains (losses) on equity securities, net of tax |  |  |  |  |  |  |
Beginning of period |  | $ | 2,649 |  | $ | 6,988 |
Change in unrealized investment gains and losses |  |  | 2,188 |  |  | (658) |
Reclassification of net realized investment (gains) losses to net income |  |  | 193 |  |  | (2,946) |
End of period |  | $ | 5,030 |  | $ | 3,384 |
Offsetting assets and liability | The following table presents the instruments that were subject to a master netting arrangement for the Company.
|  |  |  |  |  | Net Amounts |  |  |  |  |
|  |  |  |  |  | of Assets/ |  |  |  |  |
|  |  |  | Gross |  | Liabilities |  | Gross Amounts Not Offset |  |  |
|  |  |  | Amounts |  | Presented |  | in the Consolidated |  |  |
|  |  |  | Offset in the |  | in the |  | Balance Sheets |  |  |
|  |  |  | Consolidated |  | Consolidated |  |  |  | Cash |  |  |
|  | Gross |  | Balance |  | Balance |  | Financial |  | Collateral |  | Net |
|  | Amounts |  | Sheets |  | Sheets |  | Instruments |  | Received |  | Amount |
March 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Free-standing derivatives |  | $ | 3,140 |  |  | - |  | $ | 3,140 |  |  | - |  | $ | 2,197 |  | $ | 943 |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Free-standing derivatives |  |  | 2,501 |  |  | - |  |  | 2,501 |  |  | - |  |  | 2,617 |  |  | (116) |

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- Definition Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27340-111563 + Details
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