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Fair Values of Financial Instruments
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Values of Financial Instruments FAIR VALUES OF FINANCIAL INSTRUMENTS
For financial instruments, the FASB provides guidance which defines fair value, establishes a framework for measuring fair value under GAAP, and requires additional disclosures about fair value measurements. In compliance with this GAAP guidance, the Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities ("Level 1") and the lowest priority to unobservable inputs ("Level 3"). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded at fair value on the Condensed Consolidated Balance Sheets are categorized as follows:

Level 1: Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. These generally provide the most reliable evidence and are used to measure fair value whenever available. The Company's Level 1 assets are equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets.

Level 2:  Fair value is based upon significant inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable for substantially the full term of the asset or liability through corroboration with observable market data as of the reporting date. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, model-derived valuations whose inputs are observable or whose significant value drivers are observable and other observable inputs. The Company’s Level 2 assets include fixed maturity debt securities (corporate and private bonds, government or agency securities, asset-backed and mortgage-backed securities). Valuations are generally obtained from third party pricing services for identical or comparable assets or determined through use of valuation methodologies using observable market inputs.

Level 3:  Fair value is based on significant unobservable inputs which reflect the entity’s or third party pricing service’s assumptions about the assumptions market participants would use in pricing an asset or liability. The Company’s Level 3 assets are over-the-counter derivative contracts. The Company’s Level 3 liabilities consist of share-based compensation obligations, certain product-related embedded derivatives, and contingent consideration in the acquisition of businesses. Valuations are estimated based on non-binding broker prices or internally developed valuation models or methodologies, discounted cash flow models and other similar techniques.
The following tables set forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of the date indicated:

 June 30, 2020
 TotalLevel 1Level 2Level 3
 (In thousands)
Debt securities, available for sale$3,373,113  —  3,373,113  —  
Equity securities17,918  17,918  —  —  
Derivatives, index options66,738  —  —  66,738  
Other invested assets2  2  —  —  
Total assets$3,457,771  17,920  3,373,113  66,738  
Policyholder account balances (a)$87,573  —  —  87,573  
Other liabilities (b)5,497  —  —  5,497  
Total liabilities$93,070  —  —  93,070  

During the three and six months ended June 30, 2020, the Company made no transfers into or out of Levels 1, 2 or 3.
 December 31, 2019
 TotalLevel 1Level 2Level 3
 (In thousands)
Debt securities, available for sale$3,356,945  —  3,356,945  —  
Equity securities23,594  23,594  —  —  
Derivatives, index options157,588  —  —  157,588  
Other invested assets2  2  —  —  
Total assets$3,538,129  23,596  3,356,945  157,588  
Policyholder account balances (a)$155,902  —  —  155,902  
Other liabilities (c)15,301  —  —  15,301  
Total liabilities$171,203  —  —  171,203  

(a)  Represents the fair value of certain product-related embedded derivatives that were recorded at fair value.
(b)  Represents the liability for share-based compensation.
(c)  Represents the liability for share-based compensation and the contingent consideration for businesses acquired.
The following tables present, by pricing source and fair value hierarchy level, the Company's assets that are measured at fair value on a recurring basis:

 June 30, 2020
 TotalLevel 1Level 2Level 3
 (In thousands)
Debt securities, available for sale:    
Priced by third-party vendors$3,373,113  —  3,373,113  —  
Priced internally—  —  —  —  
Subtotal3,373,113  —  3,373,113  —  
Equity securities, available for sale:    
Priced by third-party vendors17,918  17,918  —  —  
Priced internally—  —  —  —  
Subtotal17,918  17,918  —  —  
Derivatives, index options:    
Priced by third-party vendors66,738  —  —  66,738  
Priced internally—  —  —  —  
Subtotal66,738  —  —  66,738  
Other invested assets:
Priced by third-party vendors2  2  —  —  
Priced internally—  —  —  —  
Subtotal2  2  —  —  
Total$3,457,771  17,920  3,373,113  66,738  
Percent of total100.0 %0.5 %97.6 %1.9 %
 December 31, 2019
 TotalLevel 1Level 2Level 3
 (In thousands)
Debt securities, available for sale:    
Priced by third-party vendors$3,356,945  —  3,356,945  —  
Priced internally—  —  —  —  
Subtotal3,356,945  —  3,356,945  —  
Equity securities, available for sale:    
Priced by third-party vendors23,594  23,594  —  —  
Priced internally—  —  —  —  
Subtotal23,594  23,594  —  —  
Derivatives, index options:    
Priced by third-party vendors157,588  —  —  157,588  
Priced internally—  —  —  —  
Subtotal157,588  —  —  157,588  
Other invested assets:
Priced by third-party vendors2  2  —  —  
Priced internally—  —  —  —  
Subtotal2  2  —  —  
Total$3,538,129  23,596  3,356,945  157,588  
Percent of total100.0 %0.7 %94.8 %4.5 %
The following tables provide additional information about fair value measurements for which significant unobservable (Level 3) inputs were utilized to determine fair value.

For the Three Months Ended June 30, 2020
AssetsOther Liabilities
Derivatives, Index OptionsTotal AssetsPolicyholder Account BalancesStock OptionsContingent ConsiderationTotal Other Liabilities
 (In thousands)
Beginning balance, April 1, 2020$24,335  24,335  61,625  3,081  4,174  68,880  
Total realized and unrealized gains (losses):
Included in net earnings40,243  40,243  23,790  2,444  (4,174) 22,060  
Included in other comprehensive income—  —  —  —  —  —  
Purchases, sales, issuances and settlements, net:
Purchases16,458  16,458  16,458  —  —  16,458  
Sales—  —  —  —  —  —  
Issuances—  —  —  —  —  —  
Settlements(14,298) (14,298) (14,300) (28) —  (14,328) 
Transfers into (out of) Level 3—  —  —  —  —  —  
Balance at end of period$66,738  66,738  87,573  5,497  —  93,070  
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period:
Net investment income$62,328  62,328  —  —  —  —  
Benefits and expenses—  —  62,328  2,444  (4,174) 60,598  
Total$62,328  62,328  62,328  2,444  (4,174) 60,598  
For the Three Months Ended June 30, 2019
AssetsOther Liabilities
Derivatives, Index OptionsTotal AssetsPolicyholder Account BalancesStock OptionsContingent ConsiderationTotal Other Liabilities
 (In thousands)
Beginning balance, April 1, 2019$71,001  71,001  86,127  7,898  3,700  97,725  
Total realized and unrealized gains (losses):
Included in net earnings17,828  17,828  13,440  93  171  13,704  
Included in other comprehensive income—  —  —  —  —  —  
Purchases, sales, issuances and settlements, net:
Purchases19,030  19,030  19,030  —  —  19,030  
Sales—  —  —  —  —  —  
Issuances—  —  —  —  —  —  
Settlements(17,959) (17,959) (17,959) —  —  (17,959) 
Transfers into (out of) Level 3—  —  —  —  —  —  
Balance at end of period$89,900  89,900  100,638  7,991  3,871  112,500  
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period:
Net investment income$4,350  4,350  —  —  —  —  
Benefits and expenses—  —  4,350  93  171  4,614  
Total$4,350  4,350  4,350  93  171  4,614  
For the Six Months Ended June 30, 2020
AssetsOther Liabilities
Derivatives, Index OptionsTotal AssetsPolicyholder Account BalancesStock OptionsContingent ConsiderationTotal Other Liabilities
 (In thousands)
Beginning balance, January 1, 2020$157,588  157,588  155,902  11,225  4,076  171,203  
Total realized and unrealized gains (losses):
Included in net earnings(66,386) (66,386) (43,865) (3,849) (4,076) (51,790) 
Included in other comprehensive income—  —  —  —  —  —  
Purchases, sales, issuances and settlements, net:
Purchases38,861  38,861  38,861  —  —  38,861  
Sales—  —  —  —  —  —  
Issuances—  —  —  —  —  —  
Settlements(63,325) (63,325) (63,325) (1,879) —  (65,204) 
Transfers into (out of) Level 3—  —  —  —  —  —  
Balance at end of period$66,738  66,738  87,573  5,497  —  93,070  
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period:
Net investment income$(43,670) (43,670) —  —  —  —  
Benefits and expenses—  —  (43,670) (3,849) (4,076) (51,595) 
Total$(43,670) (43,670) (43,670) (3,849) (4,076) (51,595) 
For the Six Months Ended June 30, 2019
AssetsOther Liabilities
Derivatives, Index OptionsTotal AssetsPolicyholder Account BalancesStock OptionsContingent ConsiderationTotal Other Liabilities
 (In thousands)
Beginning balance, January 1, 2019$14,684  14,684  44,781  11,923  —  56,704  
Total realized and unrealized gains (losses):
Included in net earnings59,830  59,830  40,471  (1,410) 171  39,232  
Included in other comprehensive income—  —  —  —  —  —  
Purchases, sales, issuances and settlements, net:
Purchases36,622  36,622  36,622  —  —  36,622  
Sales—  —  —  —  —  —  
Issuances—  —  —  —  3,700  3,700  
Settlements(21,236) (21,236) (21,236) (2,522) —  (23,758) 
Transfers into (out of) Level 3—  —  —  —  —  —  
Balance at end of period$89,900  89,900  100,638  7,991  3,871  112,500  
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period:
Net investment income$44,814  44,814  —  —  —  —  
Benefits and expenses—  —  44,814  (1,410) 171  43,575  
Total$44,814  44,814  44,814  (1,410) 171  43,575  
The following table presents the valuation method for financial assets and liabilities categorized as level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

 June 30, 2020
 Fair ValueValuation TechniqueUnobservable InputRange (Weighted Average)
 (In thousands)
Assets:
Derivatives, index options$66,738  Broker pricesImplied volatility
12.96% - 53.69% (18.55%)
Total assets$66,738  
Liabilities:
Policyholder account balances$87,573  Deterministic cash flow modelProjected option cost
0.0% - 31.12% (4.56%)
Share based compensation5,497  Black-Scholes modelExpected term
1.5 to 9.4 years
Expected volatility31.72%
Total liabilities$93,070  

 December 31, 2019
 Fair ValueValuation TechniqueUnobservable InputRange (Weighted Average)
 (In thousands)
Assets:
Derivatives, index options$157,588  Broker pricesImplied volatility
13.10% - 19.90% (15.25%)
Total assets$157,588  
Liabilities:
Policyholder account balances$155,902  Deterministic cash flow modelProjected option cost
0.0% - 17.55% (3.14%)
Share based compensation11,225  Black-Scholes modelExpected term
1.9 to 10 years
Expected volatility22.19%
Contingent consideration on businesses acquired4,076  Probabilistic MethodDiscount rate10.0%
Projected renewal premium
$57.2 - $82.4 million ($71.9)
Total liabilities$171,203  
Realized gains (losses) on debt securities are reported in the Condensed Consolidated Statements of Earnings (Loss) as net investment gains (losses) with liabilities reported as expenses. Unrealized gains (losses) on available for sale debt securities are reported as other comprehensive income (loss) within the stockholders' equity section of the Condensed Consolidated Balance Sheet.

The fair value hierarchy classifications are reviewed each reporting period. Reclassification of certain financial assets and liabilities may result based on changes in the observability of valuation attributes. Reclassifications are reported as transfers into and out of Level 3 at the beginning fair value for the reporting period in which the changes occur.

The carrying amounts and fair values of the Company's financial instruments are as follows:

June 30, 2020
 Fair Value Hierarchy Level
Carrying
Values		Fair
Values		Level 1Level 2Level 3
 (In thousands)
ASSETS    
Debt securities held to maturity$6,898,842  7,432,702  —  7,432,702  —  
Debt securities available for sale3,373,113  3,373,113  —  3,373,113  —  
Cash and cash equivalents450,703  450,703  450,703  —  —  
Mortgage loans273,701  272,336  —  —  272,336  
Real estate34,298  48,547  —  —  48,547  
Policy loans76,811  132,257  —  —  132,257  
Other loans18,064  18,365  —  —  18,365  
Derivatives, index options66,738  66,738  —  —  66,738  
Equity securities17,918  17,918  17,918  —  —  
Life interest in Libbie Shearn Moody Trust9,230  12,775  —  —  12,775  
Other investments4,515  22,582  2  —  22,580  
LIABILITIES
Deferred annuity contracts$6,755,394  5,511,416  —  —  5,511,416  
Immediate annuity and supplemental contracts403,856  455,875  —  —  455,875  
Contingent consideration on businesses acquired—  —  —  —  —  
December 31, 2019
 Fair Value Hierarchy Level
Carrying
Values		Fair
Values		Level 1Level 2Level 3
 (In thousands)
ASSETS    
Debt securities held to maturity$7,106,245  7,407,703  —  7,407,703  —  
Debt securities available for sale3,356,945  3,356,945  —  3,356,945  —  
Cash and cash equivalents253,524  253,524  253,524  —  —  
Mortgage loans272,422  270,931  —  —  270,931  
Real estate34,588  57,204  —  —  57,204  
Policy loans80,008  123,650  —  —  123,650  
Other loans13,547  13,698  —  —  13,698  
Derivatives, index options157,588  157,588  —  —  157,588  
Equity securities23,594  23,594  23,594  —  —  
Life interest in Libbie Shearn Moody Trust9,230  12,775  —  —  12,775  
Other investments197  16,182  2  —  16,180  
LIABILITIES
Deferred annuity contracts (1)$7,014,833  5,931,352  —  —  5,931,352  
Immediate annuity and supplemental contracts400,465  422,931  —  —  422,931  
Contingent consideration on businesses acquired4,076  4,076  —  —  4,076  
(1) Revised to correct for an adjustment related to the understatement of reserve liabilities of $15.0 million. See Note 1.

Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.