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Investments (Tables)
 9 Months Ended
Sep. 30, 2016
Investments [Abstract]  
Schedule of Fixed Maturity and Equity Securities
At September 30, 2016 and December 31, 2015, the amortized cost and fair value of fixed maturity securities and equity securities were as follows:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
 
(Dollars in thousands)
September 30, 2016
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
United States Government full faith and credit
$
416,503

 
$
1,962

 
$
—

 
$
418,465

United States Government sponsored agencies
1,410,760

 
62,563

 
(419
)
 
1,472,904

United States municipalities, states and territories
3,548,586

 
503,992

 
(368
)
 
4,052,210

Foreign government obligations
233,825

 
24,420

 
(3,825
)
 
254,420

Corporate securities
25,751,501

 
2,298,306

 
(134,150
)
 
27,915,657

Residential mortgage backed securities
1,225,720

 
134,685

 
(2,231
)
 
1,358,174

Commercial mortgage backed securities
5,121,361

 
216,346

 
(27,551
)
 
5,310,156

Other asset backed securities
1,490,821

 
46,705

 
(15,102
)
 
1,522,424

 
$
39,199,077

 
$
3,288,979

 
$
(183,646
)
 
$
42,304,410

Held for investment:
 
 
 
 
 
 
 
Corporate security
$
76,773

 
$
—

 
$
(1,226
)
 
$
75,547

 
 
 
 
 
 
 
 
Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance, and real estate
$
7,520

 
$
323

 
$
—

 
$
7,843

 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
United States Government full faith and credit
$
470,567

 
$
988

 
$
(299
)
 
$
471,256

United States Government sponsored agencies
1,386,219

 
26,801

 
(14,409
)
 
1,398,611

United States municipalities, states and territories
3,422,667

 
341,328

 
(8,628
)
 
3,755,367

Foreign government obligations
210,953

 
12,547

 
(10,935
)
 
212,565

Corporate securities
23,597,530

 
887,288

 
(682,424
)
 
23,802,394

Residential mortgage backed securities
1,366,985

 
98,576

 
(3,489
)
 
1,462,072

Commercial mortgage backed securities
4,238,265

 
41,412

 
(105,281
)
 
4,174,396

Other asset backed securities
1,130,524

 
34,534

 
(19,880
)
 
1,145,178

 
$
35,823,710

 
$
1,443,474

 
$
(845,345
)
 
$
36,421,839

Held for investment:
 
 
 
 
 
 
 
Corporate security
$
76,622

 
$
—

 
$
(11,245
)
 
$
65,377

 
 
 
 
 
 
 
 
Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance, and real estate
$
7,515

 
$
313

 
$
—

 
$
7,828
Schedule of Fixed Maturity Securities by Contractual Maturity Date
The amortized cost and fair value of fixed maturity securities at September 30, 2016, 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
 
Held for investment
 
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
 
(Dollars in thousands)
Due in one year or less
$
585,813

 
$
591,574

 
$
—

 
$
—

Due after one year through five years
2,449,847

 
2,626,859

 
—

 
—

Due after five years through ten years
11,633,226

 
12,222,759

 
—

 
—

Due after ten years through twenty years
8,770,193

 
9,756,946

 
—

 
—

Due after twenty years
7,922,096

 
8,915,518

 
76,773

 
75,547

 
31,361,175

 
34,113,656

 
76,773

 
75,547

Residential mortgage backed securities
1,225,720

 
1,358,174

 
—

 
—

Commercial mortgage backed securities
5,121,361

 
5,310,156

 
—

 
—

Other asset backed securities
1,490,821

 
1,522,424

 
—

 
—

 
$
39,199,077

 
$
42,304,410

 
$
76,773

 
$
75,547
Schedule of Components of Net Unrealized Gains on Available for Sale Fixed Maturity and Equity Securities Reported as Separate Component of Stockholders' Equity
Net unrealized gains on available for sale fixed maturity securities and equity securities reported as a separate component of stockholders' equity were comprised of the following:
 
September 30, 2016
 
December 31, 2015
 
(Dollars in thousands)
Net unrealized gains on available for sale fixed maturity securities and equity securities
$
3,105,656

 
$
598,442

Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements
(1,657,561
)
 
(322,859
)
Deferred income tax valuation allowance reversal
22,534

 
22,534

Deferred income tax expense
(506,833
)
 
(96,454
)
Net unrealized gains reported as accumulated other comprehensive income
$
963,796

 
$
201,663
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:
 
 
September 30, 2016
 
December 31, 2015
NAIC
Designation
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
 
 
(Dollars in thousands)
1
 
$
25,136,784

 
$
27,489,043

 
$
23,363,259

 
$
24,207,801

2
 
12,859,996

 
13,679,587

 
11,709,730

 
11,589,325

3
 
1,107,948

 
1,062,620

 
758,531

 
643,293

4
 
147,237

 
124,317

 
60,480

 
44,312

5
 
12,794

 
18,839

 
—

 
—

6
 
11,091

 
5,551

 
8,332

 
2,485

 
 
$
39,275,850

 
$
42,379,957

 
$
35,900,332

 
$
36,487,216
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 364 and 1,246 securities, respectively) have been in a continuous unrealized loss position, at September 30, 2016 and December 31, 2015:
 
Less than 12 months
 
12 months or more
 
Total
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
(Dollars in thousands)
September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
United States Government sponsored agencies
$
76,581

 
$
(419
)
 
$
—

 
$
—

 
$
76,581

 
$
(419
)
United States municipalities, states and territories
68,084

 
(368
)
 
—

 
—

 
68,084

 
(368
)
Foreign government obligations
—

 
—

 
20,750

 
(3,825
)
 
20,750

 
(3,825
)
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
453,189

 
(5,447
)
 
100,261

 
(5,376
)
 
553,450

 
(10,823
)
Manufacturing, construction and mining
271,769

 
(5,102
)
 
764,319

 
(80,318
)
 
1,036,088

 
(85,420
)
Utilities and related sectors
157,473

 
(3,440
)
 
221,059

 
(17,989
)
 
378,532

 
(21,429
)
Wholesale/retail trade
16,064

 
(75
)
 
59,574

 
(3,914
)
 
75,638

 
(3,989
)
Services, media and other
136,667

 
(4,545
)
 
133,607

 
(7,944
)
 
270,274

 
(12,489
)
Residential mortgage backed securities
38,200

 
(2,144
)
 
1,976

 
(87
)
 
40,176

 
(2,231
)
Commercial mortgage backed securities
945,680

 
(27,518
)
 
937

 
(33
)
 
946,617

 
(27,551
)
Other asset backed securities
263,184

 
(9,224
)
 
98,048

 
(5,878
)
 
361,232

 
(15,102
)
 
$
2,426,891

 
$
(58,282
)
 
$
1,400,531

 
$
(125,364
)
 
$
3,827,422

 
$
(183,646
)
Held for investment:
 
 
 
 
 
 
 
 
 
 
 
Corporate security:
 
 
 
 
 
 
 
 
 
 
 
Insurance
$
—

 
$
—

 
$
75,547

 
$
(1,226
)
 
$
75,547

 
$
(1,226
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
United States Government full faith and credit
$
37,730

 
$
(299
)
 
$
—

 
$
—

 
$
37,730

 
$
(299
)
United States Government sponsored agencies
957,053

 
(14,409
)
 
—

 
—

 
957,053

 
(14,409
)
United States municipalities, states and territories
261,823

 
(8,474
)
 
2,846

 
(154
)
 
264,669

 
(8,628
)
Foreign government obligations
42,966

 
(1,762
)
 
15,463

 
(9,173
)
 
58,429

 
(10,935
)
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
2,077,223

 
(59,607
)
 
49,912

 
(14,855
)
 
2,127,135

 
(74,462
)
Manufacturing, construction and mining
3,517,967

 
(246,456
)
 
376,229

 
(131,003
)
 
3,894,196

 
(377,459
)
Utilities and related sectors
2,240,652

 
(138,940
)
 
97,184

 
(22,565
)
 
2,337,836

 
(161,505
)
Wholesale/retail trade
473,050

 
(17,863
)
 
38,682

 
(8,125
)
 
511,732

 
(25,988
)
Services, media and other
1,037,011

 
(39,937
)
 
32,050

 
(3,073
)
 
1,069,061

 
(43,010
)
Residential mortgage backed securities
162,770

 
(2,958
)
 
6,438

 
(531
)
 
169,208

 
(3,489
)
Commercial mortgage backed securities
2,679,510

 
(105,002
)
 
11,495

 
(279
)
 
2,691,005

 
(105,281
)
Other asset backed securities
457,055

 
(10,581
)
 
46,657

 
(9,299
)
 
503,712

 
(19,880
)
 
$
13,944,810

 
$
(646,288
)
 
$
676,956

 
$
(199,057
)
 
$
14,621,766

 
$
(845,345
)
Held for investment:
 
 
 
 
 
 
 
 
 
 
 
Corporate security:
 
 
 
 
 
 
 
 
 
 
 
Insurance
$
65,377

 
$
(11,245
)
 
$
—

 
$
—

 
$
65,377

 
$
(11,245
)
Schedule of Changes in Net Unrealized Gains/Losses on Investments
Changes in net unrealized gains on investments for the three and nine months ended September 30, 2016 and 2015 are as follows:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2016
 
2015
 
2016
 
2015
 
(Dollars in thousands)
Fixed maturity securities held for investment carried at amortized cost
$
6,954

 
$
(3,753
)
 
$
10,019

 
$
(13,980
)
Investments carried at fair value:
 
 
 
 
 
 
 
Fixed maturity securities, available for sale
$
224,258

 
$
118,345

 
$
2,507,204

 
$
(908,644
)
Equity securities, available for sale
28

 
(30
)
 
10

 
23

 
224,286

 
118,315

 
2,507,214

 
(908,621
)
Adjustment for effect on other balance sheet accounts:
 
 
 
 
 
 
 
Deferred policy acquisition costs and deferred sales inducements
(115,727
)
 
(60,198
)
 
(1,334,702
)
 
455,011

Deferred income tax asset/liability
(37,995
)
 
(20,341
)
 
(410,379
)
 
158,764

 
(153,722
)
 
(80,539
)
 
(1,745,081
)
 
613,775

Change in net unrealized gains on investments carried at fair value
$
70,564

 
$
37,776

 
$
762,133

 
$
(294,846
)
Net Realized Gains (Losses) on Investments
Net realized gains (losses) on investments, excluding net OTTI losses for the three and nine months ended September 30, 2016 and 2015, are as follows:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2016
 
2015
 
2016
 
2015
 
(Dollars in thousands)
Available for sale fixed maturity securities:
 
 
 
 
 
 
 
Gross realized gains
$
4,956

 
$
283

 
$
11,047

 
$
4,783

Gross realized losses
(79
)
 
(97
)
 
(2,678
)
 
(897
)
 
4,877

 
186

 
8,369

 
3,886

Other investments:
 
 
 
 
 
 
 
Gain on sale of real estate
31

 
2,245

 
867

 
3,278

Loss on sale of real estate
—

 
—

 
(93
)
 
(575
)
Impairment losses on real estate
—

 
(570
)
 
—

 
(1,199
)
 
31

 
1,675

 
774

 
1,504

Mortgage loans on real estate:
 
 
 
 
 
 
 
Decrease (increase) in allowance for credit losses
(113
)
 
(702
)
 
(3,946
)
 
597

Recovery of specific allowance
461

 
—

 
5,483

 
4,375

 
348

 
(702
)
 
1,537

 
4,972

 
$
5,256

 
$
1,159

 
$
10,680

 
$
10,362
Significant Assumptions Used to Determine the Credit Loss Component of Other Than Temporary Impairment on Residential Mortgage Backed Securities
The following table presents the range of significant assumptions used to determine the credit loss component of other than temporary impairments we have recognized on residential mortgage backed securities for the nine months ended September 30, 2016 and 2015, which are all senior level tranches within the structure of the securities:
 
 
 
 
Discount Rate
 
Default Rate
 
Loss Severity
Sector
 
Vintage
 
Min
 
Max
 
Min
 
Max
 
Min
 
Max
Nine months ended September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prime
 
2005
 
7.7
%
 
7.7
%
 
14
%
 
14
%
 
50
%
 
50
%
 
 
2006
 
7.3
%
 
7.3
%
 
13
%
 
13
%
 
50
%
 
50
%
 
 
2007
 
6.2
%
 
6.4
%
 
18
%
 
31
%
 
50
%
 
55
%
Alt-A
 
2005
 
7.4
%
 
7.4
%
 
11
%
 
11
%
 
60
%
 
60
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prime
 
2006
 
6.5
%
 
6.5
%
 
14
%
 
14
%
 
40
%
 
40
%
 
 
2007
 
5.8
%
 
7.0
%
 
15
%
 
21
%
 
45
%
 
55
%
Alt-A
 
2005
 
5.6
%
 
5.6
%
 
99
%
 
99
%
 
2
%
 
2
%
Other Than Temporary Impairment by Asset Type
The following table summarizes other than temporary impairments for the three and nine months ended September 30, 2016 and 2015, by asset type:
 
Number
of
Securities
 
Total OTTI
Losses
 
Portion of OTTI
Losses
Recognized
in (from) Other
Comprehensive
Income
 
Net OTTI
Losses
Recognized in
Operations
 
 
 
(Dollars in thousands)
Three months ended September 30, 2016
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities:
 
 
 
 
 
 
 
Materials
1
 
$
(4,554
)
 
$
1,575

 
$
(2,979
)
 
 
 
 
 
 
 
 
Three months ended September 30, 2015
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Residential mortgage backed securities
3
 
$
—

 
$
(354
)
 
$
(354
)
Other asset backed securities
1
 
(10,000
)
 
5,125

 
(4,875
)
 
4
 
$
(10,000
)
 
$
4,771

 
$
(5,229
)
 
 
 
 
 
 
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities:
 
 
 
 
 
 
 
Energy
2
 
$
(642
)
 
$
—

 
$
(642
)
Materials
1
 
(4,554
)
 
1,575

 
(2,979
)
Telecommunications
1
 
(4,462
)
 
562

 
(3,900
)
Utilities
1
 
(136
)
 
—

 
(136
)
Residential mortgage backed securities
6
 
—

 
(440
)
 
(440
)
Commercial mortgage backed securities
5
 
(1,540
)
 
—

 
(1,540
)
Other asset backed securities
1
 
—

 
(3,482
)
 
(3,482
)
 
17
 
$
(11,334
)
 
$
(1,785
)
 
$
(13,119
)
 
 
 
 
 
 
 
 
Nine months ended September 30, 2015
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Residential mortgage backed securities
7
 
$
(132
)
 
$
(1,182
)
 
$
(1,314
)
Other asset backed securities
1
 
(10,000
)
 
5,125

 
(4,875
)
 
8
 
$
(10,132
)
 
$
3,943

 
$
(6,189
)
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 
 September 30,
 
Nine Months Ended 
 September 30,
 
2016
 
2015
 
2016
 
2015
 
(Dollars in thousands)
Cumulative credit loss at beginning of period
$
(154,408
)
 
$
(128,010
)
 
$
(145,824
)
 
$
(127,050
)
Credit losses on securities for which OTTI has not previously been recognized
(2,979
)
 
(4,876
)
 
(9,197
)
 
(5,008
)
Additional credit losses on securities for which OTTI has previously been recognized
—

 
(353
)
 
(3,922
)
 
(1,181
)
Accumulated losses on securities that were disposed of during the period
573

 
761

 
2,129

 
761

Cumulative credit loss at end of period
$
(156,814
)
 
$
(132,478
)
 
$
(156,814
)
 
$
(132,478
)
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 (loss), by major type of security, for securities that are part of our investment portfolio at September 30, 2016 and December 31, 2015:
 
Amortized Cost
 
OTTI
Recognized in
Other
Comprehensive
Income
 
Change in Fair
Value Since
OTTI was
Recognized
 
Fair Value
 
(Dollars in thousands)
September 30, 2016
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$
12,930

 
$
(5,112
)
 
$
9,729

 
$
17,547

Residential mortgage backed securities
392,598

 
(170,284
)
 
206,943

 
429,257

Commercial mortgage backed securities
6,585

 
—

 
190

 
6,775

Other asset backed securities
4,854

 
(1,643
)
 
(1,566
)
 
1,645

 
$
416,967

 
$
(177,039
)
 
$
215,296

 
$
455,224

December 31, 2015
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$
6,396

 
$
(2,975
)
 
$
9

 
$
3,430

Residential mortgage backed securities
466,871

 
(170,724
)
 
199,149

 
495,296

Other asset backed securities
8,154

 
(5,125
)
 
(553
)
 
2,476

 
$
481,421

 
$
(178,824
)
 
$
198,605

 
$
501,202