XML 58 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Fair Values of Financial Instruments (Tables) | 6 Months Ended
--- | ---
Jun. 30, 2014
Fair Value Disclosures [Abstract] |
Carrying Amounts and Fair Values of Financial Instruments | The following sets forth a comparison of the carrying amounts and fair values of our financial instruments:
| June 30, 2014 |  | December 31, 2013
| Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
| (Dollars in thousands)
Assets |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |
Available for sale | $ | 29,317,572 |  |  | $ | 29,317,572 |  |  | $ | 26,610,447 |  |  | $ | 26,610,447 |
Held for investment | 76,342 |  |  | 66,571 |  |  | 76,255 |  |  | 60,840 |
Equity securities, available for sale | 7,762 |  |  | 7,762 |  |  | 7,778 |  |  | 7,778 |
Mortgage loans on real estate | 2,543,810 |  |  | 2,596,588 |  |  | 2,581,082 |  |  | 2,615,410 |
Derivative instruments | 905,688 |  |  | 905,688 |  |  | 856,050 |  |  | 856,050 |
Other investments | 196,853 |  |  | 198,293 |  |  | 192,198 |  |  | 193,343 |
Cash and cash equivalents | 1,464,533 |  |  | 1,464,533 |  |  | 897,529 |  |  | 897,529 |
Coinsurance deposits | 3,085,340 |  |  | 2,722,024 |  |  | 2,999,618 |  |  | 2,669,432 |
Interest rate caps | 3,788 |  |  | 3,788 |  |  | 6,103 |  |  | 6,103 |
Interest rate swap | — |  |  | — |  |  | 712 |  |  | 712 |
2015 notes hedges | 45,884 |  |  | 45,884 |  |  | 107,041 |  |  | 107,041 |
Counterparty collateral | 261,266 |  |  | 261,266 |  |  | 315,824 |  |  | 315,824 |
Liabilities |  |  |  |  |  |  |
Policy benefit reserves | 37,538,232 |  |  | 31,279,983 |  |  | 35,453,166 |  |  | 29,670,827 |
Single premium immediate annuity (SPIA) benefit reserves | 391,651 |  |  | 404,561 |  |  | 417,625 |  |  | 430,835 |
Notes payable | 474,361 |  |  | 564,118 |  |  | 549,958 |  |  | 699,435 |
Subordinated debentures | 246,145 |  |  | 240,767 |  |  | 246,050 |  |  | 234,959 |
2015 notes embedded conversion derivative | 45,884 |  |  | 45,884 |  |  | 107,041 |  |  | 107,041 |
Interest rate swap | 1,983 |  |  | 1,983 |  |  | — |  |  | — |
Assets and Liabilities Measured at Fair Value on a Recurring Basis, By Fair Value Hierarchy Level | Our assets and liabilities which are measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 are presented below based on the fair value hierarchy levels:
| Total Fair Value |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (Dollars in thousands)
June 30, 2014 |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |
Available for sale: |  |  |  |  |  |  |
United States Government full faith and credit | $ | 38,483 |  |  | $ | 4,074 |  |  | $ | 34,409 |  |  | $ | — |
United States Government sponsored agencies | 1,185,341 |  |  | — |  |  | 1,185,341 |  |  | — |
United States municipalities, states and territories | 3,506,198 |  |  | — |  |  | 3,506,198 |  |  | — |
Foreign government obligations | 192,963 |  |  | — |  |  | 192,963 |  |  | — |
Corporate securities | 19,187,375 |  |  | 27 |  |  | 19,187,348 |  |  | — |
Residential mortgage backed securities | 1,870,565 |  |  | — |  |  | 1,869,897 |  |  | 668 |
Commercial mortgage backed securities | 2,296,096 |  |  | — |  |  | 2,296,096 |  |  | — |
Other asset backed securities | 1,040,551 |  |  | — |  |  | 1,040,551 |  |  | — |
Equity securities, available for sale: finance, insurance and real estate | 7,762 |  |  | — |  |  | 7,762 |  |  | — |
Derivative instruments | 905,688 |  |  | — |  |  | 905,688 |  |  | — |
Cash and cash equivalents | 1,464,533 |  |  | 1,464,533 |  |  | — |  |  | — |
Interest rate caps | 3,788 |  |  | — |  |  | 3,788 |  |  | — |
2015 notes hedges | 45,884 |  |  | — |  |  | 45,884 |  |  | — |
Counterparty collateral | 261,266 |  |  | — |  |  | 261,266 |  |  | — |
| $ | 32,006,493 |  |  | $ | 1,468,634 |  |  | $ | 30,537,191 |  |  | $ | 668 |
Liabilities |  |  |  |  |  |  |
2015 notes embedded conversion derivative | $ | 45,884 |  |  | $ | — |  |  | $ | 45,884 |  |  | $ | — |
Interest rate swap | 1,983 |  |  | — |  |  | 1,983 |  |  | — |
Fixed index annuities - embedded derivatives | 5,119,823 |  |  | — |  |  | — |  |  | 5,119,823 |
| $ | 5,167,690 |  |  | $ | — |  |  | $ | 47,867 |  |  | $ | 5,119,823 |
December 31, 2013 |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |
Available for sale: |  |  |  |  |  |  |
United States Government full faith and credit | $ | 42,925 |  |  | $ | 4,805 |  |  | $ | 38,120 |  |  | $ | — |
United States Government sponsored agencies | 1,194,289 |  |  | — |  |  | 1,194,289 |  |  | — |
United States municipalities, states and territories | 3,306,743 |  |  | — |  |  | 3,306,743 |  |  | — |
Foreign government obligations | 91,557 |  |  | — |  |  | 91,557 |  |  | — |
Corporate securities | 17,233,037 |  |  | 20 |  |  | 17,233,017 |  |  | — |
Residential mortgage backed securities | 1,971,960 |  |  | — |  |  | 1,970,584 |  |  | 1,376 |
Commercial mortgage backed securities | 1,735,460 |  |  | — |  |  | 1,735,460 |  |  | — |
Other asset backed securities | 1,034,476 |  |  | 359 |  |  | 1,034,117 |  |  | — |
Equity securities, available for sale: finance, insurance and real estate | 7,778 |  |  | — |  |  | 7,778 |  |  | — |
Derivative instruments | 856,050 |  |  | — |  |  | 856,050 |  |  | — |
Cash and cash equivalents | 897,529 |  |  | 897,529 |  |  | — |  |  | — |
Interest rate caps | 6,103 |  |  | — |  |  | 6,103 |  |  | — |
Interest rate swap | 712 |  |  | — |  |  | 712 |  |  | — |
2015 notes hedges | 107,041 |  |  | — |  |  | 107,041 |  |  | — |
Counterparty collateral | 315,824 |  |  | — |  |  | 315,824 |  |  | — |
| $ | 28,801,484 |  |  | $ | 902,713 |  |  | $ | 27,897,395 |  |  | $ | 1,376 |
Liabilities |  |  |  |  |  |  |
2015 notes embedded conversion derivative | $ | 107,041 |  |  | $ | — |  |  | $ | 107,041 |  |  | $ | — |
Fixed index annuities - embedded derivatives | 4,406,163 |  |  | — |  |  | — |  |  | 4,406,163 |
| $ | 4,513,204 |  |  | $ | — |  |  | $ | 107,041 |  |  | $ | 4,406,163 |
Assets Measured at Fair Value on Recurring Basis, Level 3 Reconciliation |
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2014 |  | 2013 |  | 2014 |  | 2013
| (Dollars in thousands)
Available for sale securities |  |  |  |  |  |  |
Beginning balance | $ | 1,080 |  |  | $ | 1,724 |  |  | $ | 1,376 |  |  | $ | 1,812 |
Principal returned | (114 | ) |  | (193 | ) |  | (192 | ) |  | (561 | )
Amortization of premium/accretion of discount | (138 | ) |  | 5 |  |  | (165 | ) |  | 134 |
Total gains (losses) (realized/unrealized): |  |  |  |  |  |  |
Included in other comprehensive income (loss) | 45 |  |  | 5 |  |  | (146 | ) |  | 156 |
Included in operations | (205 | ) |  | — |  |  | (205 | ) |  | — |
Ending balance | $ | 668 |  |  | $ | 1,541 |  |  | $ | 668 |  |  | $ | 1,541 |
Liabilities Measured at Fair Value on Recurring Basis, Level 3 Reconciliation |
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2014 |  | 2013 |  | 2014 |  | 2013
| (Dollars in thousands)
Fixed index annuities - embedded derivatives |  |  |  |  |  |  |
Beginning balance | $ | 4,755,913 |  |  | $ | 3,848,902 |  |  | $ | 4,406,163 |  |  | $ | 3,337,556 |
Premiums less benefits | 425,776 |  |  | 425,671 |  |  | 797,729 |  |  | 672,393 |
Change in fair value, net | (61,866 | ) |  | (527,521 | ) |  | (84,069 | ) |  | (262,897 | )
Ending balance | $ | 5,119,823 |  |  | $ | 3,747,052 |  |  | $ | 5,119,823 |  |  | $ | 3,747,052 |

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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13467-108611 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13476-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610 + Details
Name: | us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes 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 liability. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueLiabilitiesMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19190-110258 + Details
Name: | us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration