Investments (Tables)

3 Months Ended

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

Cash

Gross

Balance

Financial

Collateral

Net

Amounts

Sheets

Instruments

Received

Amount

March 31, 2016

Asset derivatives:

Free-standing derivatives

3,140

2,197

943

December 31, 2015

Asset derivatives:

Free-standing derivatives

2,501

2,617

(116)