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Investments (Tables)
 6 Months Ended
Jun. 30, 2016
Investments, Debt and Equity Securities [Abstract]  
Summary of Fixed Maturities and Equity Securities Available for Sale by Cost or Amortized Cost and Estimated Fair Value
A summary of fixed maturities available for sale by cost or amortized cost and estimated fair value at June 30, 2016 is as follows:
Portfolio Composition as of June 30, 2016
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value(1)
 
% of Total
Fixed
Maturities(2)
Bonds:
 
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
380,528


$
33,040


$
(432
)

$
413,136


3
States, municipalities, and political subdivisions
1,277,303


184,320


(199
)

1,461,424


10
Foreign governments
22,468


2,773


—


25,241


—
Corporates, by sector:













Financial
2,800,108


388,055


(48,336
)

3,139,827


20
Utilities
1,950,172


377,501


(7,370
)

2,320,303


15
Energy
1,566,871


114,956


(83,315
)

1,598,512


10
Other corporate sectors
5,250,898


701,948


(55,123
)

5,897,723


39
Total corporates
11,568,049


1,582,460


(194,144
)

12,956,365


84
Collateralized debt obligations
62,174


13,617


(11,728
)

64,063


—
Other asset-backed securities
56,914


1,989


—


58,903


—
Redeemable preferred stocks, by sector:













Financial
382,195


52,900


(4,754
)

430,341


3
Utilities
28,623


1,994


—


30,617


—
Total redeemable preferred stocks
410,818


54,894


(4,754
)

460,958


3
Total fixed maturities
$
13,778,254


$
1,873,093


$
(211,257
)

$
15,440,090


100
(1) Amounts reported on the balance sheet.
(2) At fair value.
Schedule of Fixed Maturities by Contractual Maturity Date
A schedule of fixed maturities available for sale by contractual maturity date at June 30, 2016 is shown below on an amortized cost basis and on a fair value basis. Actual maturity dates could differ from contractual maturities due to call or prepayment provisions.
 
Amortized
Cost
 
Fair Value
Fixed maturities available for sale:
 
 
 
Due in one year or less
$
48,012

 
$
48,366

Due from one to five years
612,267

 
666,057

Due from five to ten years
1,047,056

 
1,175,885

Due from ten to twenty years
4,027,521

 
4,622,554

Due after twenty years
7,922,723

 
8,802,523

Mortgage-backed and asset-backed securities
120,675

 
124,705

 
$
13,778,254

 
$
15,440,090
Schedule of Selected Information about Sales of Fixed Maturities
Selected information about sales of fixed maturities available for sale is as follows.
Six Months Ended June 30,
 
2016
 
2015
Proceeds from sales
$
51,299

 
$
14,287

Gross realized gains
3,556

 
82

Gross realized losses
(214
)
 
(104
)
Schedule of Assets Measured at Fair Value on Recurring Basis
The following table represents the fair value of fixed maturities available for sale measured on a recurring basis.
Fair Value Measurements at June 30, 2016 Using:
Description
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs (Level 2)
 
Significant
Unobservable
Inputs (Level 3)
 
Total Fair
Value
Bonds:
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
 
$
18


$
413,118


$
—


$
413,136

States, municipalities, and political subdivisions
 
—


1,461,424


—


1,461,424

Foreign governments
 
—


25,241


—


25,241

Corporates, by sector:
 











Financial
 
—


3,076,036


63,791


3,139,827

Utilities
 
12,008


2,168,991


139,304


2,320,303

Energy
 
—


1,569,212


29,300


1,598,512

Other corporate sectors
 
—


5,560,953


336,770


5,897,723

Total corporates
 
12,008


12,375,192


569,165


12,956,365

Collateralized debt obligations
 
—


—


64,063


64,063

Other asset-backed securities
 
—


58,903


—


58,903

Redeemable preferred stocks, by sector:
 











Financial
 
10,168


420,173


—


430,341

Utilities
 
—


30,617


—


30,617

Total redeemable preferred stocks
 
10,168


450,790


—


460,958

Total fixed maturities
 
$
22,194


$
14,784,668


$
633,228


$
15,440,090

Percent of total
 
0.1
%
 
95.8
%
 
4.1
%
 
100
%
Schedule of Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs
The following table represents an analysis of changes in fair value measurements using significant unobservable inputs (Level 3).
Analysis of Changes in Fair Value Measurements Using
Significant Unobservable Inputs (Level 3)
 
 
Six Months Ended June 30, 2016
 
Collateralized
Debt
Obligations
 
Corporates(1)
 
Total
Balance at January 1, 2016
$
70,382

 
$
530,806

 
$
601,188

Total gains or losses:
 
 
 
 
 
Included in realized gains/losses
—

 
—

 
—

Included in other comprehensive income
(4,831
)
 
24,291

 
19,460

Acquisitions
—

 
15,800

 
15,800

Sales
—

 
—

 
—

Amortization
2,639

 
8

 
2,647

Other(2)
(4,127
)
 
(1,740
)
 
(5,867
)
Transfers in and/or out of Level 3(3)
—

 
—

 
—

Balance at June 30, 2016
$
64,063

 
$
569,165

 
$
633,228

Percent of total fixed maturities
0.4
%
 
3.7
%
 
4.1
%
 
 
 
 
 
 
 
Six Months Ended June 30, 2015
 
Collateralized
Debt
Obligations
 
Corporates(1)
 
Total
Balance at January 1, 2015
$
63,232

 
$
512,714

 
$
575,946

Total gains or losses:
 
 
 
 
 
Included in realized gains/losses
—

 
—

 
—

Included in other comprehensive income
13,531

 
(8,426
)
 
5,105

Acquisitions
—

 
19,400

 
19,400

Sales
—

 
—

 
—

Amortization
2,810

 
7

 
2,817

Other(2)
(5,905
)
 
(1,666
)
 
(7,571
)
Transfers in and/or out of Level 3(3)
—

 
—

 
—

Balance at June 30, 2015
$
73,668

 
$
522,029

 
$
595,697

Percent of total fixed maturities
0.5
%
 
3.7
%
 
4.2
%
(1) Includes redeemable preferred stocks.
(2) Includes capitalized interest, foreign exchange adjustments, and principal repayments.
(3) Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.
Schedule of Information About Investments in Unrealized Loss Position
The following table discloses information about fixed maturities available for sale in an unrealized loss position.
 
 
Less than
Twelve
Months
 
Twelve
Months
or Longer
 
Total
Number of issues (CUSIP numbers) held:
 
 
 
 
 
 
As of June 30, 2016
 
43

 
126

 
169

As of December 31, 2015
 
480

 
75

 
555
Schedule of Unrealized Investment Losses by Class of Investment
The following table discloses unrealized investment losses by class and major sector of fixed maturities available for sale at June 30, 2016 for the period of time in a loss position. Torchmark considers these investments to be only temporarily impaired.
Analysis of Gross Unrealized Investment Losses
At June 30, 2016
 
 
 
Less than
Twelve Months
 
Twelve Months
or Longer
 
Total
Description of Securities
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
Investment grade securities:
 
 
 
 
 
 
 
 
 
 
 
 
Bonds:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
 
$
39


$
—


$
1,543


$
(432
)

$
1,582

 
$
(432
)
States, municipalities and political subdivisions
 
—


—


699


(9
)

699

 
(9
)
Corporates, by sector:
 












 
 
 
Financial
 
67,965


(6,462
)

80,657


(4,848
)

148,622

 
(11,310
)
Utilities
 
—


—


101,395


(7,370
)

101,395

 
(7,370
)
Energy
 
141,343


(4,750
)

336,085


(40,163
)

477,428

 
(44,913
)
Other corporate sectors
 
70,799


(3,130
)

194,464


(11,226
)

265,263

 
(14,356
)
Total corporates
 
280,107

 
(14,342
)
 
712,601

 
(63,607
)
 
992,708

 
(77,949
)
Redeemable preferred stocks, by sector:
 












 
 
 
Financial
 
3,995


(5
)

—


—


3,995

 
(5
)
Total redeemable preferred stocks
 
3,995

 
(5
)
 
—

 
—

 
3,995

 
(5
)
Total investment grade securities
 
284,141

 
(14,347
)
 
714,843

 
(64,048
)
 
998,984

 
(78,395
)
Below investment grade securities:
 












 
 
 
Bonds:
 












 
 
 
States, municipalities and political subdivisions
 
—


—


363


(190
)

363

 
(190
)
Corporates, by sector:
 












 
 
 
Financial
 
—


—


68,751


(37,026
)

68,751

 
(37,026
)
Energy
 
22,465


(1,337
)

98,134


(37,065
)

120,599

 
(38,402
)
Other corporate sectors
 
77,363


(11,922
)

159,670


(28,845
)

237,033

 
(40,767
)
Total corporates
 
99,828

 
(13,259
)
 
326,555

 
(102,936
)
 
426,383

 
(116,195
)
Collateralized debt obligations
 
—


—


8,272


(11,728
)

8,272

 
(11,728
)
Redeemable preferred stocks, by sector:
 












 
 
 
Financial
 
—


—


22,394


(4,749
)

22,394

 
(4,749
)
Total redeemable preferred stocks
 
—

 
—

 
22,394

 
(4,749
)
 
22,394

 
(4,749
)
Total below investment grade securities
 
99,828

 
(13,259
)
 
357,584

 
(119,603
)
 
457,412

 
(132,862
)
Total fixed maturities
 
$
383,969

 
$
(27,606
)
 
$
1,072,427

 
$
(183,651
)
 
$
1,456,396

 
$
(211,257
)