XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1

Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

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:

	September 30, 2018								December 31, 2017
	Carrying Amount				Fair Value				Carrying Amount				Fair Value
	(Dollars in thousands)
Assets
Fixed maturity securities:
Available for sale	$	45,822,017			$	45,822,017			$	45,372,989			$	45,372,989
Held for investment	77,213				71,113				77,041				76,460
Mortgage loans on real estate	2,892,155				2,835,345				2,665,531				2,670,037
Derivative instruments	1,290,387				1,290,387				1,568,380				1,568,380
Other investments	536,594				528,867				616,764				605,894
Cash and cash equivalents	1,129,242				1,129,242				1,434,045				1,434,045
Coinsurance deposits	5,017,255				4,547,180				4,858,289				4,347,990
Interest rate caps	1,244				1,244				415				415
Interest rate swap	1,125				1,125				—				—
Counterparty collateral	179,512				179,512				186,108				186,108
Liabilities
Policy benefit reserves	57,633,261				48,792,935				55,786,011				46,344,931
Single premium immediate annuity (SPIA) benefit reserves	271,275				279,993				282,563				292,153
Notes payable	494,464				500,000				494,093				521,800
Subordinated debentures	242,875				238,703				242,565				244,117
Amounts due under repurchase agreements	116,399				116,399				—				—
Interest rate swap	—				—				789				789

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 September 30, 2018 and December 31, 2017 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)
September 30, 2018
Assets
Fixed maturity securities:
Available for sale:
United States Government full faith and credit	$	10,962			$	5,454			$	5,508			$	—
United States Government sponsored agencies	1,224,587				—				1,224,587				—
United States municipalities, states and territories	4,142,257				—				4,142,257				—
Foreign government obligations	226,500				—				226,500				—
Corporate securities	28,479,603				7				28,479,596				—
Residential mortgage backed securities	1,181,682				—				1,181,682				—
Commercial mortgage backed securities	5,337,368				—				5,337,368				—
Other asset backed securities	5,219,058				—				5,219,058				—
Other investments: equity securities	207,434				200,000				7,434				—
Derivative instruments	1,290,387				—				1,290,387				—
Cash and cash equivalents	1,129,242				1,129,242				—				—
Interest rate caps	1,244				—				1,244				—
Interest rate swap	1,125				—				1,125				—
Counterparty collateral	179,512				—				179,512				—
	$	48,630,961			$	1,334,703			$	47,296,258			$	—
Liabilities
Fixed index annuities - embedded derivatives	$	8,947,193			$	—			$	—			$	8,947,193
December 31, 2017
Assets
Fixed maturity securities:
Available for sale:
United States Government full faith and credit	$	11,876			$	5,640			$	6,236			$	—
United States Government sponsored agencies	1,305,017				—				1,305,017				—
United States municipalities, states and territories	4,166,812				—				4,166,812				—
Foreign government obligations	239,360				—				239,360				—
Corporate securities	29,878,971				5				29,878,966				—
Residential mortgage backed securities	1,105,567				—				1,105,567				—
Commercial mortgage backed securities	5,544,850				—				5,544,850				—
Other asset backed securities	3,120,536				—				3,120,536				—
Other investments: equity securities, available for sale	292,429				285,000				7,429				—
Derivative instruments	1,568,380				—				1,568,380				—
Cash and cash equivalents	1,434,045				1,434,045				—				—
Interest rate caps	415				—				415				—
Counterparty collateral	186,108				—				186,108				—
	$	48,854,366			$	1,724,690			$	47,129,676			$	—
Liabilities
Interest rate swap	$	789			$	—			$	789			$	—
Fixed index annuities - embedded derivatives	8,790,427				—				—				8,790,427
	$	8,791,216			$	—			$	789			$	8,790,427

Schedule of Assumptions Used in Estimating Fair Value

The following table presents average lapse rate and partial withdrawal rate assumptions, by contract duration, used in estimating the fair value of the embedded derivative component of our fixed index annuity policy benefit reserves at each reporting date:

		Average Lapse Rates				Average Partial Withdrawal Rates
Contract Duration (Years)		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
1 - 5		2.05%		1.83%		3.33%		3.32%
6 - 10		7.28%		7.01%		3.33%		3.32%
11 - 15		11.35%		11.31%		3.35%		3.34%
16 - 20		11.91%		11.96%		3.21%		3.20%
20+		11.58%		11.62%		3.21%		3.20%

Liabilities Measured at Fair Value on Recurring Basis, Level 3 Reconciliation

The following table provides a reconciliation of the beginning and ending balances for our Level 3 liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended   September 30,								Nine Months Ended   September 30,
	2018				2017				2018				2017
	(Dollars in thousands)
Fixed index annuities - embedded derivatives
Beginning balance	$	8,351,151			$	7,552,365			$	8,790,427			$	6,563,288
Premiums less benefits	399,234				475,600				1,354,881				1,384,791
Change in fair value, net	196,808				41,140				(1,198,115		)		121,026
Ending balance	$	8,947,193			$	8,069,105			$	8,947,193			$	8,069,105

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 825
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=77997519&loc=d3e13476-108611

Reference 2: 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=66048111&loc=d3e19207-110258

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=77997519&loc=d3e13467-108611

Reference 4: 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=75026489&loc=d3e13220-108610

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=75031198&loc=d3e14172-108612

Reference 6: 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=77997519&loc=d3e13433-108611

+ Details

Name:	us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- References

No definition available.

+ 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=66048111&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=66048111&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 the underlying assumptions and percentages or rates used in determining the fair value of guarantee obligations for each type of long-duration contract.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 40
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6482852&loc=d3e14931-158439

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 40
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6482852&loc=d3e14944-158439

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 40
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6482852&loc=d3e14937-158439

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6481800&loc=d3e11318-158416

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 80
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6484115&loc=d3e19393-158473

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 20
-Section 55
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6588021&loc=d3e7104-158389

+ Details

Name:	us-gaap_ScheduleOfAssumptionsForLongDurationContractsByProductAndGuaranteeTextBlock
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=66048111&loc=d3e19190-110258

+ Details

Name:	us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration