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Investments (Tables) | 3 Months Ended
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Mar. 31, 2020
Investments [Abstract] |
Schedule of Fixed Maturity Securities | At March 31, 2020 and December 31, 2019, the amortized cost and fair value of fixed maturity securities were as follows:
| Amortized Cost (1) |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
| (Dollars in thousands)
March 31, 2020 |  |  |  |  |  |  |  |  |
Fixed maturity securities, available for sale: |  |  |  |  |  |  |  |  |
United States Government full faith and credit | $ | 36,501 |  |  | $ | 2,747 |  |  | $ | — |  |  | $ | — |  |  | $ | 39,248 |
United States Government sponsored agencies | 293,722 |  |  | 44,839 |  |  | — |  |  | — |  |  | 338,561 |
United States municipalities, states and territories | 3,357,142 |  |  | 412,151 |  |  | (4,130 | ) |  | — |  |  | 3,765,163 |
Foreign government obligations | 187,007 |  |  | 15,854 |  |  | (4,465 | ) |  | — |  |  | 198,396 |
Corporate securities | 29,879,520 |  |  | 2,111,969 |  |  | (827,838 | ) |  | (28,332 | ) |  | 31,135,319 |
Residential mortgage backed securities | 1,671,466 |  |  | 118,172 |  |  | (24,605 | ) |  | — |  |  | 1,765,033 |
Commercial mortgage backed securities | 5,540,607 |  |  | 66,402 |  |  | (310,897 | ) |  | — |  |  | 5,296,112 |
Other asset backed securities | 6,288,098 |  |  | 71,952 |  |  | (1,193,015 | ) |  | — |  |  | 5,167,035 |
| $ | 47,254,063 |  |  | $ | 2,844,086 |  |  | $ | (2,364,950 | ) |  | $ | (28,332 | ) |  | $ | 47,704,867 |
December 31, 2019 |  |  |  |  |  |  |  |  |
Fixed maturity securities, available for sale: |  |  |  |  |  |  |  |  |
United States Government full faith and credit | $ | 161,492 |  |  | $ | 369 |  |  | $ | (96 | ) |  | $ | — |  |  | $ | 161,765 |
United States Government sponsored agencies | 601,672 |  |  | 28,133 |  |  | (4,785 | ) |  | — |  |  | 625,020 |
United States municipalities, states and territories | 4,147,343 |  |  | 388,578 |  |  | (8,250 | ) |  | — |  |  | 4,527,671 |
Foreign government obligations | 186,993 |  |  | 18,103 |  |  | — |  |  | — |  |  | 205,096 |
Corporate securities | 29,822,172 |  |  | 2,796,926 |  |  | (82,259 | ) |  | — |  |  | 32,536,839 |
Residential mortgage backed securities | 1,477,738 |  |  | 101,617 |  |  | (3,691 | ) |  | — |  |  | 1,575,664 |
Commercial mortgage backed securities | 5,591,167 |  |  | 208,895 |  |  | (13,783 | ) |  | — |  |  | 5,786,279 |
Other asset backed securities | 6,250,369 |  |  | 90,978 |  |  | (179,191 | ) |  | — |  |  | 6,162,156 |
| $ | 48,238,946 |  |  | $ | 3,633,599 |  |  | $ | (292,055 | ) |  | $ | — |  |  | $ | 51,580,490 |
(1) Amortized cost excludes accrued interest receivable of $456.1 million as of March 31, 2020.
Schedule of Fixed Maturity Securities by Contractual Maturity Date | The amortized cost and fair value of fixed maturity securities at March 31, 2020, by contractual maturity are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage and other asset backed securities provide for periodic payments throughout their lives and are shown below as separate lines.
| Available for sale
| Amortized Cost |  | Fair Value
| (Dollars in thousands)
Due in one year or less | $ | 387,348 |  |  | $ | 389,729 |
Due after one year through five years | 5,969,737 |  |  | 5,968,168 |
Due after five years through ten years | 9,922,493 |  |  | 10,073,950 |
Due after ten years through twenty years | 9,691,164 |  |  | 10,713,363 |
Due after twenty years | 7,783,150 |  |  | 8,331,477 |
| 33,753,892 |  |  | 35,476,687 |
Residential mortgage backed securities | 1,671,466 |  |  | 1,765,033 |
Commercial mortgage backed securities | 5,540,607 |  |  | 5,296,112 |
Other asset backed securities | 6,288,098 |  |  | 5,167,035 |
| $ | 47,254,063 |  |  | $ | 47,704,867 |
Schedule of Components of Net Unrealized Gains on Available for Sale Fixed Maturity Securities Reported as Separate Component of Stockholders' Equity | Net unrealized gains on available for sale fixed maturity securities reported as a separate component of stockholders' equity were comprised of the following:
| March 31, 2020 |  | December 31, 2019
| (Dollars in thousands)
Net unrealized gains on available for sale fixed maturity securities | $ | 479,136 |  |  | $ | 3,341,544 |
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements | (229,213 | ) |  | (1,473,966 | )
Deferred income tax valuation allowance reversal | 22,534 |  |  | 22,534 |
Deferred income tax expense | (52,483 | ) |  | (392,191 | )
Net unrealized gains reported as accumulated other comprehensive income | $ | 219,974 |  |  | $ | 1,497,921 |
Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation | The following table summarizes the credit quality, as determined by NAIC designation, of our fixed maturity portfolio as of the dates indicated:
|  | March 31, 2020 |  | December 31, 2019
NAIC Designation |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
|  | (Dollars in thousands)
1 |  | $ | 26,309,850 |  |  | $ | 27,739,779 |  |  | $ | 27,781,525 |  |  | $ | 30,122,657 |
2 |  | 19,582,082 |  |  | 18,999,760 |  |  | 19,278,355 |  |  | 20,316,911 |
3 |  | 1,167,772 |  |  | 838,628 |  |  | 1,001,087 |  |  | 977,191 |
4 |  | 128,826 |  |  | 104,090 |  |  | 114,497 |  |  | 112,534 |
5 |  | 60,550 |  |  | 18,433 |  |  | 57,952 |  |  | 45,205 |
6 |  | 4,983 |  |  | 4,177 |  |  | 5,530 |  |  | 5,992 |
|  | $ | 47,254,063 |  |  | $ | 47,704,867 |  |  | $ | 48,238,946 |  |  | $ | 51,580,490 |
Schedule of Gross Unrealized Losses on Investments, By Category and Length of Time | The following table shows our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities (consisting of 2,475 and 1,033 securities, respectively) have been in a continuous unrealized loss position, at March 31, 2020 and December 31, 2019:
| Less than 12 months |  | 12 months or more |  | Total
| Fair Value |  | Unrealized Losses (1) |  | Fair Value |  | Unrealized Losses (1) |  | Fair Value |  | Unrealized Losses (1)
| (Dollars in thousands)
March 31, 2020 |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities, available for sale: |  |  |  |  |  |  |  |  |  |  |
United States municipalities, states and territories | $ | 209,291 |  |  | $ | (4,130 | ) |  | $ | — |  |  | $ | — |  |  | $ | 209,291 |  |  | $ | (4,130 | )
Foreign government obligations | 60,079 |  |  | (4,465 | ) |  | — |  |  | — |  |  | 60,079 |  |  | (4,465 | )
Corporate securities: |  |  |  |  |  |  |  |  |  |  |
Finance, insurance and real estate | 1,970,305 |  |  | (109,704 | ) |  | 3,547 |  |  | (372 | ) |  | 1,973,852 |  |  | (110,076 | )
Manufacturing, construction and mining | 1,154,320 |  |  | (60,623 | ) |  | 24,866 |  |  | (6,705 | ) |  | 1,179,186 |  |  | (67,328 | )
Utilities and related sectors | 1,375,023 |  |  | (87,628 | ) |  | 43,307 |  |  | (10,413 | ) |  | 1,418,330 |  |  | (98,041 | )
Wholesale/retail trade | 643,529 |  |  | (63,887 | ) |  | 88,471 |  |  | (44,320 | ) |  | 732,000 |  |  | (108,207 | )
Services, media and other | 2,683,039 |  |  | (366,658 | ) |  | 183,159 |  |  | (105,860 | ) |  | 2,866,198 |  |  | (472,518 | )
Residential mortgage backed securities | 740,561 |  |  | (23,072 | ) |  | 10,375 |  |  | (1,533 | ) |  | 750,936 |  |  | (24,605 | )
Commercial mortgage backed securities | 3,979,173 |  |  | (296,598 | ) |  | 94,240 |  |  | (14,299 | ) |  | 4,073,413 |  |  | (310,897 | )
Other asset backed securities | 1,992,190 |  |  | (376,030 | ) |  | 2,193,650 |  |  | (816,985 | ) |  | 4,185,840 |  |  | (1,193,015 | )
| $ | 14,807,510 |  |  | $ | (1,392,795 | ) |  | $ | 2,641,615 |  |  | $ | (1,000,487 | ) |  | $ | 17,449,125 |  |  | $ | (2,393,282 | )
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities, available for sale: |  |  |  |  |  |  |  |  |  |  |
United States Government full faith and credit | $ | 144,582 |  |  | $ | (96 | ) |  | $ | — |  |  | $ | — |  |  | $ | 144,582 |  |  | $ | (96 | )
United States Government sponsored agencies | 168,732 |  |  | (1,229 | ) |  | 201,444 |  |  | (3,556 | ) |  | 370,176 |  |  | (4,785 | )
United States municipalities, states and territories | 285,481 |  |  | (8,173 | ) |  | 3,081 |  |  | (77 | ) |  | 288,562 |  |  | (8,250 | )
Corporate securities: |  |  |  |  |  |  |  |  |  |  |
Finance, insurance and real estate | 267,521 |  |  | (4,785 | ) |  | 121,993 |  |  | (4,744 | ) |  | 389,514 |  |  | (9,529 | )
Manufacturing, construction and mining | 161,633 |  |  | (6,039 | ) |  | 44,606 |  |  | (3,951 | ) |  | 206,239 |  |  | (9,990 | )
Utilities and related sectors | 334,635 |  |  | (7,730 | ) |  | 51,269 |  |  | (3,482 | ) |  | 385,904 |  |  | (11,212 | )
Wholesale/retail trade | 54,289 |  |  | (1,751 | ) |  | 129,364 |  |  | (9,411 | ) |  | 183,653 |  |  | (11,162 | )
Services, media and other | 275,135 |  |  | (6,135 | ) |  | 316,086 |  |  | (34,231 | ) |  | 591,221 |  |  | (40,366 | )
Residential mortgage backed securities | 212,404 |  |  | (2,686 | ) |  | 11,332 |  |  | (1,005 | ) |  | 223,736 |  |  | (3,691 | )
Commercial mortgage backed securities | 602,394 |  |  | (9,366 | ) |  | 194,328 |  |  | (4,417 | ) |  | 796,722 |  |  | (13,783 | )
Other asset backed securities | 752,413 |  |  | (11,709 | ) |  | 3,375,016 |  |  | (167,482 | ) |  | 4,127,429 |  |  | (179,191 | )
| $ | 3,259,219 |  |  | $ | (59,699 | ) |  | $ | 4,448,519 |  |  | $ | (232,356 | ) |  | $ | 7,707,738 |  |  | $ | (292,055 | )
(1) Unrealized losses have not been reduced to reflect the allowance for credit losses of $28.3 million as of March 31, 2020.
Schedule of Changes in Net Unrealized Gains/Losses on Investments | Changes in net unrealized gains/losses on investments for the three months ended March 31, 2020 and 2019 are as follows:
| Three Months Ended March 31,
| 2020 |  | 2019
| (Dollars in thousands)
Fixed maturity securities available for sale carried at fair value | $ | (2,862,408 | ) |  | $ | 1,517,520 |
Adjustment for effect on other balance sheet accounts: |  |  |
Deferred policy acquisition costs and deferred sales inducements | 1,244,753 |  |  | (800,901 | )
Deferred income tax asset/liability | 339,708 |  |  | (150,490 | )
| 1,584,461 |  |  | (951,391 | )
Change in net unrealized gains/losses on investments carried at fair value | $ | (1,277,947 | ) |  | $ | 566,129 |
Net Realized Gains (Losses) on Investments | Net realized gains (losses) on investments for the three months ended March 31, 2020 and 2019, are as follows:
| Three Months Ended March 31,
| 2020 |  | 2019
| (Dollars in thousands)
Available for sale fixed maturity securities: |  |  |
Gross realized gains | $ | 14,238 |  |  | $ | 1,171 |
Gross realized losses | (1,206 | ) |  | (1,794 | )
| 13,032 |  |  | (623 | )
Mortgage loans on real estate: |  |  |
Increase (decrease) in allowance for credit losses | (1,997 | ) |  | 60 |
| $ | 11,035 |  |  | $ | (563 | )
Rollforward of Allowance for Credit Loss | The following table provides a rollforward of the allowance for credit loss:
| Three Months Ended March 31, 2020
| Corporate Securities |  | Commercial Mortgage Backed Securities |  | Other Asset Backed Securities |  | Total
| (Dollars in thousands)
Beginning balance (1) | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Additions for credit losses not previously recorded | 28,332 |  |  | 2,491 |  |  | 548 |  |  | 31,371 |
Reduction for securities with credit losses due to intent to sell | — |  |  | (2,491 | ) |  | (548 | ) |  | (3,039 | )
Ending balance | $ | 28,332 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,332 |
(1) The allowance for credit loss associated with available for sale fixed maturity securities was applied prospectively upon adoption of authoritative guidance effective January 1, 2020. See Note 1 for further details.
Other Than Temporary Impairment, Credit Losses Recognized in Earnings | The cumulative portion of other than temporary impairments determined to be credit losses which have been recognized in operations for debt securities are summarized as follows:
| Three Months Ended March 31,
| 2019
| (Dollars in thousands)
Cumulative credit loss at beginning of period | $ | (175,398 | )
Additions for the amount related to credit losses for which OTTI has not previously been recognized | — |
Additional credit losses on securities for which OTTI has previously been recognized | — |
Accumulated losses on securities that were disposed of during the period | — |
Cumulative credit loss at end of period | $ | (175,398 | )
Schedule of Other Than Temporary Impairment Losses, Investments | The following table summarizes the cumulative noncredit portion of OTTI and the change in fair value since recognition of OTTI, both of which were recognized in other comprehensive income, by major type of security, for securities that are part of our investment portfolio at December 31, 2019:
| Amortized Cost |  | OTTI Recognized in Other Comprehensive Income (Loss) |  | Change in Fair Value Since OTTI was Recognized |  | Fair Value
| (Dollars in thousands)
December 31, 2019 |  |  |  |  |  |  |
Fixed maturity securities, available for sale: |  |  |  |  |  |  |
Corporate securities | $ | 50,755 |  |  | $ | (3,700 | ) |  | $ | 9,268 |  |  | $ | 56,323 |
Residential mortgage backed securities | 183,948 |  |  | (145,446 | ) |  | 172,577 |  |  | 211,079 |
Commercial mortgage backed securities | 12,776 |  |  | — |  |  | (401 | ) |  | 12,375 |
Other asset backed securities | 977 |  |  | — |  |  | 261 |  |  | 1,238 |
| $ | 248,456 |  |  | $ | (149,146 | ) |  | $ | 181,705 |  |  | $ | 281,015 |

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