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Investments (Tables)
 12 Months Ended
Dec. 31, 2017
Schedule of Investments Debt and Equity Securities [Line Items]  
Schedule of AFS Securities Reconciliation

The period-end cost or amortized cost, gross unrealized gains and losses, and fair value of AFS fixed-maturity and equity securities were as follows:

 

 

December 31, 2017

 

 

 

Cost or amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

11,577

 

 

$

283

 

 

$

(47

)

 

$

11,813

 

Foreign government

 

 

139,486

 

 

 

5,651

 

 

 

(648

)

 

 

144,489

 

States and political subdivisions

 

 

54,714

 

 

 

1,554

 

 

 

(141

)

 

 

56,127

 

Corporates

 

 

1,337,321

 

 

 

42,616

 

 

 

(3,655

)

 

 

1,376,282

 

Residential mortgage-backed securities

 

 

119,672

 

 

 

3,583

 

 

 

(297

)

 

 

122,958

 

Commercial mortgage-backed securities

 

 

134,003

 

 

 

2,299

 

 

 

(910

)

 

 

135,392

 

Other asset-backed securities

 

 

80,553

 

 

 

452

 

 

 

(224

)

 

 

80,781

 

Total fixed-maturity securities(1)

 

 

1,877,326

 

 

 

56,438

 

 

 

(5,922

)

 

 

1,927,842

 

Equity securities

 

 

31,331

 

 

 

9,796

 

 

 

(20

)

 

 

41,107

 

Total fixed-maturity and equity securities

 

$

1,908,657

 

 

$

66,234

 

 

$

(5,942

)

 

$

1,968,949

 

 

(1) 

Includes approximately $0.2 million of OTTI losses related to corporates and mortgage- and asset-backed securities recognized in accumulated other comprehensive income.

 

 

December 31, 2016

 

 

 

Cost or amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

10,148

 

 

$

350

 

 

$

(24

)

 

$

10,474

 

Foreign government

 

 

124,274

 

 

 

5,719

 

 

 

(687

)

 

 

129,306

 

States and political subdivisions

 

 

43,950

 

 

 

1,903

 

 

 

(129

)

 

 

45,724

 

Corporates

 

 

1,281,630

 

 

 

49,272

 

 

 

(5,529

)

 

 

1,325,373

 

Residential mortgage-backed securities

 

 

94,708

 

 

 

4,963

 

 

 

(120

)

 

 

99,551

 

Commercial mortgage-backed securities

 

 

107,201

 

 

 

2,712

 

 

 

(470

)

 

 

109,443

 

Other asset-backed securities

 

 

72,772

 

 

 

98

 

 

 

(303

)

 

 

72,567

 

Total fixed-maturity securities(1)

 

 

1,734,683

 

 

 

65,017

 

 

 

(7,262

)

 

 

1,792,438

 

Equity securities

 

 

36,818

 

 

 

8,589

 

 

 

(513

)

 

 

44,894

 

Total fixed-maturity and equity securities

 

$

1,771,501

 

 

$

73,606

 

 

$

(7,775

)

 

$

1,837,332

 

 

(1) 

Includes approximately $0.1 million of OTTI losses related to corporates and mortgage- and asset-backed securities recognized in accumulated other comprehensive income.
Fixed-maturity Securities Classified by Contractual Maturity Date

The scheduled maturity distribution of the AFS fixed-maturity portfolio at December 31, 2017 was as follows:

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Due in one year or less

 

$

145,260

 

 

$

147,078

 

Due after one year through five years

 

 

808,100

 

 

 

831,979

 

Due after five years through 10 years

 

 

537,979

 

 

 

552,982

 

Due after 10 years

 

 

51,759

 

 

 

56,672

 

 

 

 

1,543,098

 

 

 

1,588,711

 

Mortgage- and asset-backed securities

 

 

334,228

 

 

 

339,131

 

  Total fixed-maturity securities

 

$

1,877,326

 

 

$

1,927,842

 

 
Net Effect on Stockholders' Equity of Unrealized Gains and Losses on AFS Securities

The net effect on stockholders’ equity of unrealized gains and losses on AFS securities was as follows:

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

(In thousands)

 

Net unrealized investment gains including OTTI:

 

 

 

 

 

 

 

 

Fixed-maturity and equity securities

 

$

60,292

 

 

$

65,831

 

OTTI

 

 

174

 

 

 

95

 

Net unrealized investment gains excluding OTTI

 

 

60,466

 

 

 

65,926

 

Deferred income taxes

 

 

(20,780

)

 

 

(23,074

)

Net unrealized investment gains excluding OTTI, net of tax

 

$

39,686

 

 

$

42,852

 

 
Costs and Fair Values of Fixed-Maturity and Equity Securities Classified as Trading Securities

The costs and fair values of the fixed-maturity and equity securities classified as trading securities were as follows:

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

Cost

 

 

Fair value

 

 

Cost

 

 

Fair value

 

 

 

(In thousands)

 

Fixed-maturity securities

 

$

4,801

 

 

$

4,800

 

 

$

7,332

 

 

$

7,332

 

Equity securities

 

 

1,371

 

 

 

1,428

 

 

 

50

 

 

 

51

 

Total fixed-maturity and equity securities

 

$

6,172

 

 

$

6,228

 

 

$

7,382

 

 

$

7,383

 

 
Net Investment Income

Investment Income. The components of net investment income were as follows:

 

 

Year ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

 

 

(In thousands)

 

Fixed-maturity securities (available-for-sale)

 

$

76,877

 

 

$

74,673

 

 

$

77,271

 

Fixed-maturity security (held-to-maturity)

 

 

26,865

 

 

 

18,880

 

 

 

13,048

 

Equity securities

 

 

2,095

 

 

 

2,053

 

 

 

2,059

 

Policy loans and other invested assets

 

 

1,413

 

 

 

1,340

 

 

 

1,368

 

Cash and cash equivalents

 

 

1,123

 

 

 

632

 

 

 

228

 

Total return on deposit asset underlying

   10% coinsurance agreement

 

 

2,970

 

 

 

5,212

 

 

 

482

 

  Gross investment income

 

 

111,343

 

 

 

102,790

 

 

 

94,456

 

Investment expenses

 

 

(5,461

)

 

 

(4,885

)

 

 

(4,899

)

   Investment income net of investment expenses

 

 

105,882

 

 

 

97,905

 

 

 

89,557

 

Interest expense on surplus note

 

 

(26,865

)

 

 

(18,880

)

 

 

(13,048

)

    Net investment income

 

$

79,017

 

 

$

79,025

 

 

$

76,509

 

 
Schedule of Net Realized Investment Gains and Losses

The components of net realized investment gains (losses), as well as details on gross realized investment gains and (losses) and proceeds from sales or other redemptions were as follows:

 

 

Year ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

 

 

(In thousands)

 

Net realized investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Gross gains from sales

 

$

3,249

 

 

$

8,126

 

 

$

5,762

 

Gross losses from sales

 

 

(107

)

 

 

(751

)

 

 

(465

)

OTTI losses

 

 

(1,553

)

 

 

(3,420

)

 

 

(6,893

)

Gains (losses) from bifurcated options

 

 

(250

)

 

 

133

 

 

 

(142

)

Net realized investment gains (losses)

 

$

1,339

 

 

$

4,088

 

 

$

(1,738

)

 
Schedule of Securities in Unrealized Loss Position

The following tables summarize, for all AFS securities in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

 

 

December 31, 2017

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Number of securities

 

 

Fair value

 

 

Unrealized losses

 

 

Number of securities

 

 

 

(Dollars in thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

4,754

 

 

$

(34

)

 

 

5

 

 

$

2,975

 

 

$

(13

)

 

 

3

 

Foreign government

 

 

40,287

 

 

 

(465

)

 

 

45

 

 

 

7,102

 

 

 

(183

)

 

 

7

 

States and political subdivisions

 

 

7,369

 

 

 

(43

)

 

 

7

 

 

 

6,267

 

 

 

(98

)

 

 

7

 

Corporates

 

 

247,613

 

 

 

(2,323

)

 

 

216

 

 

 

39,767

 

 

 

(1,332

)

 

 

43

 

Residential mortgage-backed securities

 

 

33,610

 

 

 

(263

)

 

 

16

 

 

 

2,592

 

 

 

(34

)

 

 

8

 

Commercial mortgage-backed securities

 

 

60,116

 

 

 

(394

)

 

 

52

 

 

 

22,149

 

 

 

(516

)

 

 

25

 

Other asset-backed securities

 

 

32,605

 

 

 

(121

)

 

 

33

 

 

 

14,819

 

 

 

(103

)

 

 

19

 

Total fixed-maturity securities

 

 

426,354

 

 

 

(3,643

)

 

 

 

 

 

 

95,671

 

 

 

(2,279

)

 

 

 

 

Equity securities

 

 

1,076

 

 

 

(16

)

 

 

4

 

 

 

170

 

 

 

(4

)

 

 

2

 

Total fixed-maturity and equity

   securities

 

$

427,430

 

 

$

(3,659

)

 

 

 

 

 

$

95,841

 

 

$

(2,283

)

 

 

 

 

 

 

 

December 31, 2016

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Number of securities

 

 

Fair value

 

 

Unrealized losses

 

 

Number of securities

 

 

 

(Dollars in thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

3,668

 

 

$

(24

)

 

 

4

 

 

$

-

 

 

$

-

 

 

 

-

 

Foreign government

 

 

34,538

 

 

 

(526

)

 

 

36

 

 

 

3,048

 

 

 

(161

)

 

 

3

 

States and political subdivisions

 

 

8,902

 

 

 

(129

)

 

 

12

 

 

 

-

 

 

 

-

 

 

 

-

 

Corporates

 

 

232,070

 

 

 

(3,484

)

 

 

225

 

 

 

45,471

 

 

 

(2,045

)

 

 

51

 

Residential mortgage-backed securities

 

 

15,232

 

 

 

(92

)

 

 

9

 

 

 

3,606

 

 

 

(28

)

 

 

9

 

Commercial mortgage-backed securities

 

 

33,335

 

 

 

(423

)

 

 

33

 

 

 

7,663

 

 

 

(47

)

 

 

11

 

Other asset-backed securities

 

 

48,275

 

 

 

(260

)

 

 

45

 

 

 

1,315

 

 

 

(43

)

 

 

3

 

Total fixed-maturity securities

 

 

376,020

 

 

 

(4,938

)

 

 

 

 

 

 

61,103

 

 

 

(2,324

)

 

 

 

 

Equity securities

 

 

4,179

 

 

 

(269

)

 

 

12

 

 

 

1,852

 

 

 

(244

)

 

 

8

 

Total fixed-maturity and equity

   securities

 

$

380,199

 

 

$

(5,207

)

 

 

 

 

 

$

62,955

 

 

$

(2,568

)

 

 

 

 

 
Amortized Cost and Fair Value of AFS Fixed-maturity Securities in Default

The amortized cost and fair value of AFS fixed-maturity securities in default were as follows:

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

Amortized cost

 

 

Fair value

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Fixed-maturity securities in default

 

$

503

 

 

$

654

 

 

$

5

 

 

$

125

 

 
OTTI in Earnings on AFS Securities

OTTI recognized in earnings on AFS securities were as follows:

 

 

Year ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

 

 

(In thousands)

 

OTTI on fixed-maturity securities not in default

 

$

1,001

 

 

$

3,257

 

 

$

5,108

 

OTTI on fixed-maturity securities in default

 

 

267

 

 

 

121

 

 

 

29

 

OTTI on equity securities

 

 

285

 

 

 

42

 

 

 

1,756

 

Total OTTI recognized in earnings

 

$

1,553

 

 

$

3,420

 

 

$

6,893

 

 
Schedule of OTTI Recognized in Earnings for AFS Securities

The rollforward of the OTTI recognized in net income for all fixed-maturity securities still held was as follows:

 

 

Year ended December 31,

 

 

 

2017

 

 

2016

 

 

 

(In thousands)

 

Cumulative OTTI recognized in net income for securities still

     held, beginning of period

 

$

5,774

 

 

$

11,856

 

Additions for securities where no OTTI were recognized

     prior to the beginning of the period

 

 

351

 

 

 

1,694

 

Additions for securities where OTTI have been recognized

     prior to the beginning of the period

 

 

917

 

 

 

1,684

 

Reductions due to sales, maturities, calls, amortization or

     increases in cash flows expected to be collected over the

     remaining life of credit impaired securities

 

 

(1,513

)

 

 

(7,114

)

Reductions for exchanges of securities previously impaired

 

 

(1,183

)

 

 

(2,346

)

  Cumulative OTTI recognized in net income for securities

     still held, end of period

 

$

4,346

 

 

$

5,774

 

 
AFS [Member]  
Schedule of Investments Debt and Equity Securities [Line Items]  
Schedule of OTTI Recognized in Earnings for AFS Securities

OTTI recognized in earnings for AFS securities were as follows:

 

 

Year ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

 

 

(In thousands)

 

Total OTTI related to securities which the Company

   does not intend to sell or more-likely-than-not will not be

   required to sell:

 

 

 

 

 

 

 

 

 

 

 

 

Total OTTI losses recognized

 

$

1,476

 

 

$

1,486

 

 

$

706

 

Less portion of OTTI recognized in accumulated other

   comprehensive income (loss)

 

 

147

 

 

 

-

 

 

 

-

 

OTTI recognized in earnings for securities which the

   Company does not intend to sell  or more-likely

   than-not will not be required to sell

 

 

1,329

 

 

 

1,486

 

 

 

706

 

OTTI recognized in earnings for securities which the

   Company intends to sell or more-likely-than-not will be

   required to sell before recovery

 

 

224

 

 

 

1,934

 

 

 

6,187

 

OTTI recognized in earnings

 

$

1,553

 

 

$

3,420

 

 

$

6,893