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Investments (Tables)
 9 Months Ended
Sep. 30, 2018
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 September 30, 2018 and December 31, 2017 is as follows:
 
September 30, 2018
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value(1)
 
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:
 
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
392,779

 
$
255

 
$
(11,643
)
 
$
381,391

 
3
States, municipalities, and political subdivisions
1,262,710

 
84,503

 
(4,853
)
 
1,342,360

 
8
Foreign governments
18,918

 
1,721

 
—

 
20,639

 
—
Corporates, by sector:
 
 
 
 
 
 
 
 
 
Financial
3,363,794

 
239,614

 
(62,445
)
 
3,540,963

 
21
Utilities
1,964,029

 
215,959

 
(21,005
)
 
2,158,983

 
13
Energy
1,635,710

 
136,144

 
(37,978
)
 
1,733,876

 
11
Other corporate sectors
6,242,246

 
329,169

 
(165,172
)
 
6,406,243

 
40
Total corporates
13,205,779

 
920,886

 
(286,600
)
 
13,840,065

 
85
Collateralized debt obligations
57,794

 
26,119

 
(4,997
)
 
78,916

 
—
Other asset-backed securities
150,218

 
1,845

 
(872
)
 
151,191

 
1
Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
 
 
Financial
345,651

 
46,022

 
(4,197
)
 
387,476

 
3
Utilities
28,515

 
1,332

 
(414
)
 
29,433

 
—
Total redeemable preferred stocks
374,166

 
47,354

 
(4,611
)
 
416,909

 
3
Total fixed maturities
$
15,462,364

 
$
1,082,683

 
$
(313,576
)
 
$
16,231,471

 
100
(1)
Amounts reported on the balance sheet.
(2)
At fair value.
 
December 31, 2017
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value(1)
 
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:
 
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
390,646

 
$
18,173

 
$
(1,373
)
 
$
407,446

 
2
States, municipalities, and political subdivisions
1,091,960

 
127,890

 
(135
)
 
1,219,715

 
7
Foreign governments
20,236

 
1,782

 
—

 
22,018

 
—
Corporates, by sector:
 
 
 
 
 
 


 
 
Financial
3,282,526

 
475,961

 
(23,392
)
 
3,735,095

 
22
Utilities
1,955,737

 
369,406

 
(1,298
)
 
2,323,845

 
14
Energy
1,619,349

 
226,140

 
(25,392
)
 
1,820,097

 
11
Other corporate sectors
6,065,803

 
747,612

 
(20,616
)
 
6,792,799

 
40
Total corporates
12,923,415

 
1,819,119

 
(70,698
)
 
14,671,836

 
87
Collateralized debt obligations
59,150

 
20,084

 
(7,653
)
 
71,581

 
—
Other asset-backed securities
144,520

 
4,835

 
—

 
149,355

 
1
Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
 
 
Financial
336,621

 
62,892

 
(2,727
)
 
396,786

 
3
Utilities
28,553

 
2,132

 
(97
)
 
30,588

 
—
Total redeemable preferred stocks
365,174

 
65,024

 
(2,824
)
 
427,374

 
3
Total fixed maturities
$
14,995,101

 
$
2,056,907

 
$
(82,683
)
 
$
16,969,325

 
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 September 30, 2018 is shown below on an amortized cost basis and on a fair value basis. Actual disposition dates could differ from contractual maturities due to call or prepayment provisions.
 
September 30, 2018
 
Amortized
Cost
 
Fair Value
Fixed maturities available for sale:
 
 
 
Due in one year or less
$
189,867

 
$
193,934

Due after one year through five years
611,511

 
632,417

Due after five years through ten years
1,686,348

 
1,820,952

Due after ten years through twenty years
5,023,824

 
5,505,111

Due after twenty years
7,742,061

 
7,848,163

Mortgage-backed and asset-backed securities
208,753

 
230,894

 
$
15,462,364

 
$
16,231,471
Schedule Of Selected Information About Sales Of Fixed Maturities Available for Sale
Selected information about sales of fixed maturities available for sale is as follows.
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Fixed maturities available for sale:
 
 
 
 
 
 
 
Proceeds from sales
$
12,162

 
$
52,951

 
$
12,162

 
$
52,951

Gross realized gains
66

 
4,851

 
66

 
4,851

Gross realized losses
—

 
—

 
—

 
—
Schedule of Assets Measured at Fair Value on Recurring Basis
The following tables represent the fair value of fixed maturities available for sale measured on a recurring basis at September 30, 2018 and December 31, 2017.
 
Fair Value Measurements at September 30, 2018 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
Fixed maturities available for sale:
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
—

 
$
381,391

 
$
—

 
$
381,391

States, municipalities, and political subdivisions
—

 
1,342,360

 
—

 
1,342,360

Foreign governments
—

 
20,639

 
—

 
20,639

Corporates, by sector:
 
 
 
 
 
 
 
Financial
—

 
3,497,807

 
43,156

 
3,540,963

Utilities
—

 
2,006,462

 
152,521

 
2,158,983

Energy
—

 
1,694,481

 
39,395

 
1,733,876

Other corporate sectors
—

 
6,085,281

 
320,962

 
6,406,243

Total corporates
—

 
13,284,031

 
556,034

 
13,840,065

Collateralized debt obligations
—

 
—

 
78,916

 
78,916

Other asset-backed securities
—

 
138,407

 
12,784

 
151,191

Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
Financial
—

 
387,476

 
—

 
387,476

Utilities
—

 
29,433

 
—

 
29,433

Total redeemable preferred stocks
—

 
416,909

 
—

 
416,909

Total fixed maturities
$
—

 
$
15,583,737

 
$
647,734

 
$
16,231,471

Percent of total
—
%
 
96.0
%
 
4.0
%
 
100.0
%

 
Fair Value Measurements at December 31, 2017 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
Fixed maturities available for sale:
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
—

 
$
407,446

 
$
—

 
$
407,446

States, municipalities, and political subdivisions
44

 
1,219,671

 
—

 
1,219,715

Foreign governments
—

 
22,018

 
—

 
22,018

Corporates, by sector:
 
 
 
 
 
 


Financial
—

 
3,673,089

 
62,006

 
3,735,095

Utilities
—

 
2,168,115

 
155,730

 
2,323,845

Energy
—

 
1,779,281

 
40,816

 
1,820,097

Other corporate sectors
—

 
6,468,541

 
324,258

 
6,792,799

Total corporates
—

 
14,089,026

 
582,810

 
14,671,836

Collateralized debt obligations
—

 
—

 
71,581

 
71,581

Other asset-backed securities
—

 
135,306

 
14,049

 
149,355

Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
Financial
—

 
396,786

 
—

 
396,786

Utilities
—

 
30,588

 
—

 
30,588

Total redeemable preferred stocks
—

 
427,374

 
—

 
427,374

Total fixed maturities
$
44

 
$
16,300,841

 
$
668,440

 
$
16,969,325

Percentage of total
—
%
 
96.1
%
 
3.9
%
 
100.0
%
Schedule of Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs
The following tables represent an analysis of changes in fair value measurements using significant unobservable inputs (Level 3) for the nine months ended September 30, 2018 and 2017.
Analysis of Changes in Fair Value Measurements Using
Significant Unobservable Inputs (Level 3)
 
Nine Months Ended September 30, 2018
 
Asset-
Backed
Securities
 
Collateralized
Debt
Obligations
 
Corporates(1)
 
Total
Balance at January 1, 2018
$
14,049

 
$
71,581

 
$
582,810

 
$
668,440

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

 
—

 
698

 
698

Included in other comprehensive income
(950
)
 
8,691

 
(21,854
)
 
(14,113
)
Acquisitions
—

 
—

 
27,453

 
27,453

Sales
—

 
—

 
—

 
—

Amortization
—

 
3,572

 
13

 
3,585

Other(2)
(315
)
 
(4,928
)
 
(37,619
)
 
(42,862
)
Transfers in and/or out of Level 3(3)
—

 
—

 
4,533

 
4,533

Balance at September 30, 2018
$
12,784

 
$
78,916

 
$
556,034

 
$
647,734

Percent of total fixed maturities
0.1
%
 
0.5
%
 
3.4
%
 
4.0
%
(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.

 
Nine Months Ended September 30, 2017
 
Asset-
Backed
Securities
 
Collateralized
Debt
Obligations
 
Corporates(1)
 
Total
Balance at January 1, 2017
$
—

 
$
63,503

 
$
559,600

 
$
623,103

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

 
—

 
—

 
—

Included in other comprehensive income
595

 
7,787

 
10,614

 
18,996

Acquisitions
14,000

 
—

 
21,666

 
35,666

Sales
—

 
—

 
—

 
—

Amortization
—

 
3,705

 
14

 
3,719

Other(2)
(212
)
 
(5,227
)
 
(7,411
)
 
(12,850
)
Transfers in and/or out of Level 3(3)
—

 
—

 
—

 
—

Balance at September 30, 2017
$
14,383

 
$
69,768

 
$
584,483

 
$
668,634

Percent of total fixed maturities
0.1
%
 
0.4
%
 
3.5
%
 
4.0
%
(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.
Transfers In And Out Of Each Of Valuation Levels Of Fair Values
The following table presents transfers in and out of each of the valuation levels of fair values.
 
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
 
In
 
Out
 
Net
 
In
 
Out
 
Net
Level 1
 
$
—

 
$
—

 
$
—

 
$
42,328

 
$
(597
)
 
$
41,731

Level 2
 
—

 
(4,533
)
 
(4,533
)
 
597

 
(42,328
)
 
(41,731
)
Level 3
 
4,533

 
—

 
4,533

 
—

 
—

 
—
Fair Value of Investments Elected for the Fair Value Option
The following table represents the fair value of investments elected for the fair value option method measured on a recurring basis at September 30, 2018, and the changes in fair value for the nine months ended September 30, 2018.
 
Fair Value Measurements at September 30, 2018
 
Changes in Fair Values for the Period for Items Measured at Fair Value Pursuant to Election of the Fair Value Option
 
 Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 Significant Other Observable Inputs (Level 2)
 
 Significant Unobservable Inputs
(Level 3)
 
 Total Fair Value
 
 Net Gains and Losses Recognized During the Period
 
 Less Net Gains and Losses Recognized due to Sales
 
 Total Changes in Fair Values Included in Current-Period Earnings
Limited partnerships
$
—

 
$
107,996

 
$
—

 
$
107,996

 
$
2,405

 
$
—

 
$
2,405
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 September 30, 2018
 
598

 
122

 
720

As of December 31, 2017
 
92

 
102

 
194
Schedule of Unrealized Investment Losses by Class of Investment
The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at September 30, 2018 and December 31, 2017, respectively. Torchmark considers these investments to be only temporarily impaired.
Analysis of Gross Unrealized Investment Losses
At September 30, 2018
 
 
Less than
Twelve Months
 
Twelve Months
or Longer
 
Total
Description of Securities
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
Fixed maturities available for sale:
 
 
 
 
 
 
 
 
 
 
 
Investment grade securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
291,797

 
$
(8,844
)
 
$
66,160

 
$
(2,799
)
 
$
357,957

 
$
(11,643
)
States, municipalities and political subdivisions
181,894

 
(4,832
)
 
1,632

 
(21
)
 
183,526

 
(4,853
)
Corporates, by sector:
 
 
 
 
 
 
 
 
 
 
 
Financial
934,194

 
(38,148
)
 
69,993

 
(5,518
)
 
1,004,187

 
(43,666
)
Utilities
420,921

 
(17,417
)
 
45,084

 
(3,540
)
 
466,005

 
(20,957
)
Energy
216,903

 
(8,981
)
 
49,052

 
(7,689
)
 
265,955

 
(16,670
)
Other corporate sectors
2,611,151

 
(122,430
)
 
235,655

 
(25,153
)
 
2,846,806

 
(147,583
)
Total corporates
4,183,169

 
(186,976
)
 
399,784

 
(41,900
)
 
4,582,953

 
(228,876
)
Other asset-backed securities
64,963

 
(872
)
 
—

 
—

 
64,963

 
(872
)
Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
 
 
 
 
Financial
10,050

 
(725
)
 
—

 
—

 
10,050

 
(725
)
Utilities
—

 
—

 
5,594

 
(414
)
 
5,594

 
(414
)
Total redeemable preferred stocks
10,050

 
(725
)
 
5,594

 
(414
)
 
15,644

 
(1,139
)
Total investment grade securities
4,731,873

 
(202,249
)
 
473,170

 
(45,134
)
 
5,205,043

 
(247,383
)
 
 
 
 
 
 
 
 
 
 
 
 
Below investment grade securities:
 
 
 
 
 
 
 
 
 
 
 
Corporates, by sector:


 


 


 


 
 
 
 
Financial
24,873

 
(5,895
)
 
62,073

 
(12,884
)
 
86,946

 
(18,779
)
Utilities
15,059

 
(48
)
 
—

 
—

 
15,059

 
(48
)
Energy
12,647

 
(533
)
 
68,890

 
(20,775
)
 
81,537

 
(21,308
)
Other corporate sectors
47,218

 
(1,713
)
 
68,813

 
(15,876
)
 
116,031

 
(17,589
)
Total corporates
99,797

 
(8,189
)
 
199,776

 
(49,535
)
 
299,573

 
(57,724
)
Collateralized debt obligations
—

 
—

 
15,003

 
(4,997
)
 
15,003

 
(4,997
)
Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
 
 
 
 
Financial
—

 
—

 
23,611

 
(3,472
)
 
23,611

 
(3,472
)
Total redeemable preferred stocks
—

 
—

 
23,611

 
(3,472
)
 
23,611

 
(3,472
)
Total below investment grade securities
99,797

 
(8,189
)
 
238,390

 
(58,004
)
 
338,187

 
(66,193
)
Total fixed maturities
$
4,831,670

 
$
(210,438
)
 
$
711,560

 
$
(103,138
)
 
$
5,543,230

 
$
(313,576
)


Analysis of Gross Unrealized Investment Losses
At December 31, 2017
 
Less than
Twelve Months
 
Twelve Months
or Longer
 
Total
Description of Securities
Fair
Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
Fixed maturities available for sale:
 
 
 
 
 
 
 
 
 
 
 
Investment grade securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Government direct, guaranteed, and government-sponsored enterprises
$
34,388

 
$
(422
)
 
$
47,514

 
$
(951
)
 
$
81,902

 
$
(1,373
)
States, municipalities and political subdivisions
4,561

 
(21
)
 
1,771

 
(9
)
 
6,332

 
(30
)
Corporates, by sector:
 
 
 
 
 
 
 
 
 
 
 
Financial
133,080

 
(652
)
 
35,302

 
(1,429
)
 
168,382

 
(2,081
)
Utilities
48,562

 
(569
)
 
32,345

 
(729
)
 
80,907

 
(1,298
)
Energy
23,463

 
(81
)
 
67,775

 
(3,682
)
 
91,238

 
(3,763
)
Other corporate sectors
220,661

 
(2,312
)
 
163,886

 
(4,257
)
 
384,547

 
(6,569
)
Total corporates
425,766

 
(3,614
)
 
299,308

 
(10,097
)
 
725,074

 
(13,711
)
Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
 
 
 
 
Utilities
—

 
—

 
5,953

 
(97
)
 
5,953

 
(97
)
Total redeemable preferred stocks
—

 
—

 
5,953

 
(97
)
 
5,953

 
(97
)
Total investment grade securities
464,715

 
(4,057
)
 
354,546

 
(11,154
)
 
819,261

 
(15,211
)
 
 
 
 
 
 
 
 
 
 
 
 
Below investment grade securities:
 
 
 
 
 
 
 
 
 
 
 
States, municipalities and political subdivisions
200

 
(105
)
 
—

 
—

 
200

 
(105
)
Corporates, by sector:
 
 
 
 
 
 
 
 
 
 
 
Financial
—

 
—

 
84,432

 
(21,311
)
 
84,432

 
(21,311
)
Energy
8,114

 
(104
)
 
75,204

 
(21,525
)
 
83,318

 
(21,629
)
Other corporate sectors
25,334

 
(5,066
)
 
54,383

 
(8,981
)
 
79,717

 
(14,047
)
Total corporates
33,448

 
(5,170
)
 
214,019

 
(51,817
)
 
247,467

 
(56,987
)
Collateralized debt obligations
—

 
—

 
12,347

 
(7,653
)
 
12,347

 
(7,653
)
Redeemable preferred stocks, by sector:
 
 
 
 
 
 
 
 
 
 
 
Financial
—

 
—

 
24,376

 
(2,727
)
 
24,376

 
(2,727
)
Total redeemable preferred stocks
—

 
—

 
24,376

 
(2,727
)
 
24,376

 
(2,727
)
Total below investment grade securities
33,648

 
(5,275
)
 
250,742

 
(62,197
)
 
284,390

 
(67,472
)
Total fixed maturities
$
498,363

 
$
(9,332
)
 
$
605,288

 
$
(73,351
)
 
$
1,103,651

 
$
(82,683
)