FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2018:

	Measurement Category	Level 1		Level 2		Level 3		Total
		(Dollars In Thousands)
Assets:
Fixed maturity securities—available-for-sale
Residential mortgage-backed securities	4	$	—	$	3,611,590	$	—	$	3,611,590
Commercial mortgage-backed securities	4	—		2,295,084		—		2,295,084
Other asset-backed securities	4	—		970,251		421,642		1,391,893
U.S. government-related securities	4	1,010,485		629,020		—		1,639,505
State, municipalities, and political subdivisions	4	—		3,588,841		—		3,588,841
Other government-related securities	4	—		515,964		—		515,964
Corporate securities	4	—		35,724,552		638,276		36,362,828
Redeemable preferred stock	4	65,536		17,266		—		82,802
Total fixed maturity securities—available-for-sale		1,076,021		47,352,568		1,059,918		49,488,507
Fixed maturity securities—trading
Residential mortgage-backed securities	3	—		241,836		—		241,836
Commercial mortgage-backed securities	3	—		188,925		—		188,925
Other asset-backed securities	3	—		133,851		26,056		159,907
U.S. government-related securities	3	27,453		32,341		—		59,794
State, municipalities, and political subdivisions	3	—		286,413		—		286,413
Other government-related securities	3	—		44,207		—		44,207
Corporate securities	3	—		1,417,591		6,242		1,423,833
Redeemable preferred stock	3	11,277		—		—		11,277
Total fixed maturity securities—trading		38,730		2,345,164		32,298		2,416,192
Total fixed maturity securities		1,114,751		49,697,732		1,092,216		51,904,699
Equity securities	3	531,523		36		64,325		595,884
Other long-term investments(1)	3&4	83,047		180,438		112,344		375,829
Short-term investments	3	730,067		77,216		—		807,283
Total investments		2,459,388		49,955,422		1,268,885		53,683,695
Cash	3	173,714		—		—		173,714
Other assets	3	29,257		—		—		29,257
Assets related to separate accounts
Variable annuity	3	12,288,919		—		—		12,288,919
Variable universal life	3	937,732		—		—		937,732
Total assets measured at fair value on a recurring basis		$	15,889,010	$	49,955,422	$	1,268,885	$	67,113,317
Liabilities:
Annuity account balances(2)	3	$	—	$	—	$	76,119	$	76,119
Other liabilities(1)	3&4	56,018		69,501		629,942		755,461
Total liabilities measured at fair value on a recurring basis		$	56,018	$	69,501	$	706,061	$	831,580

(1) Includes certain freestanding and embedded derivatives.

(2) Represents liabilities related to fixed indexed annuities.

(3) Fair Value through Net Income.

(4) Fair Value through Other Comprehensive Income.

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2017:

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities—available-for-sale
Residential mortgage-backed securities	$	—	$	2,327,212	$	—	$	2,327,212
Commercial mortgage-backed securities	—		1,889,822		—		1,889,822
Other asset-backed securities	—		745,184		504,365		1,249,549
U.S. government-related securities	958,775		264,477		—		1,223,252
State, municipalities, and political subdivisions	—		1,741,645		—		1,741,645
Other government-related securities	—		287,282		—		287,282
Corporate securities	—		29,075,109		626,901		29,702,010
Redeemable preferred stock	72,471		18,620		—		91,091
Total fixed maturity securities—available-for-sale	1,031,246		36,349,351		1,131,266		38,511,863
Fixed maturity securities—trading
Residential mortgage-backed securities	—		259,694		—		259,694
Commercial mortgage-backed securities	—		146,804		—		146,804
Other asset-backed securities	—		102,875		35,222		138,097
U.S. government-related securities	21,183		6,051		—		27,234
State, municipalities, and political subdivisions	—		326,925		—		326,925
Other government-related securities	—		63,925		—		63,925
Corporate securities	—		1,692,741		5,442		1,698,183
Redeemable preferred stock	3,327		—		—		3,327
Total fixed maturity securities—trading	24,510		2,599,015		40,664		2,664,189
Total fixed maturity securities	1,055,756		38,948,366		1,171,930		41,176,052
Equity securities	688,214		36		66,110		754,360
Other long-term investments(1)	51,102		417,969		136,004		605,075
Short-term investments	482,461		132,749		—		615,210
Total investments	2,277,533		39,499,120		1,374,044		43,150,697
Cash	252,310		—		—		252,310
Other assets	28,771		—		—		28,771
Assets related to separate accounts
Variable annuity	13,956,071		—		—		13,956,071
Variable universal life	1,035,202		—		—		1,035,202
Total assets measured at fair value on a recurring basis	$	17,549,887	$	39,499,120	$	1,374,044	$	58,423,051
Liabilities:
Annuity account balances(2)	$	—	$	—	$	83,472	$	83,472
Other liabilities(1)	5,755		240,927		760,890		1,007,572
Total liabilities measured at fair value on a recurring basis	$	5,755	$	240,927	$	844,362	$	1,091,044

(1) Includes certain freestanding and embedded derivatives.

(2) Represents liabilities related to fixed indexed annuities.

Schedule of the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of the financial instruments

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Fair Value As of December 31, 2017		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	504,228	Discounted cash flow	Liquidation value	$90 - $97 ($94.91)
			Discounted cash flow	Liquidity premium	0.06% - 1.17% (0.75%)
				Paydown rate	11.31% - 11.97% (11.54%)
Corporate securities	617,770		Discounted cash flow	Spread over treasury	0.81% - 3.95% (1.06%)
Liabilities:(1)
Embedded derivatives—GLWB(2)	$	111,760	Actuarial cash flow model	Mortality	91.1% to 106.6% of Ruark 2015 ALB table
				Lapse	1.0% - 30.0%, depending on product/duration/funded status of guarantee
				Utilization	99%. 10% of policies have a one-time over-utilization of 400%
				Nonperformance risk	0.11% - 0.79%
Embedded derivative—FIA	218,676		Actuarial cash flow model	Expenses	$146 per policy
				Withdrawal rate	1.5% prior to age 70, 100% of the RMD for ages 70+
				Mortality	1994 MGDB table with company experience
				Lapse	1.0% - 30.0%, depending on duration/surrender charge period
				Nonperformance risk	0.11% - 0.79%
Embedded derivative - IUL	80,212		Actuarial cash flow model	Mortality	34% - 152% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on duration/distribution channel and smoking class
				Nonperformance risk	0.11% - 0.79%

(1) Excludes modified coinsurance arrangements.

(2) The fair value for the GLWB embedded derivative is presented as a net liability.

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Fair Value As of December 31, 2018		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	421,458	Liquidation	Liquidation value	$85.75 - $99.99 ($95.36)
			Discounted cash flow	Liquidity premium	0.02% - 1.25% (0.64%)
				Paydown rate	10.96% - 13.11% (12.03%)
Corporate securities	631,068		Discounted cash flow	Spread over treasury	0.84% - 3.0% (1.84%)
Liabilities:(1)
Embedded derivatives—GLWB(2)	$	184,071	Actuarial cash flow model	Mortality	87% to 100% of Ruark 2015 ALB table
				Lapse	Ruark Predictive Model
				Utilization	99%. 10% of policies have a one-time over-utilization of 400%
				Nonperformance risk	0.21% - 1.16%
Embedded derivative—FIA	217,288		Actuarial cash flow model	Expenses	$145 per policy
				Withdrawal rate	1.5% prior to age 70, 100% of the RMD for ages 70+
				Mortality	87% to 100% of Ruark 2015 ALB table
				Lapse	1.0% - 30.0%, depending on duration/surrender charge period
				Nonperformance risk	0.21% - 1.16%
Embedded derivative—IUL	90,231		Actuarial cash flow model	Mortality	37% - 577% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on duration/distribution channel and smoking class
				Nonperformance risk	0.21% - 1.16%

(1) Excludes modified coinsurance arrangements.

(2) The fair value for the GLWB embedded derivative is presented as a net liability.

Schedule of reconciliation of the beginning and ending balances for fair value measurements, for which the Company has used significant unobservable inputs (Level 3)

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the year ended December 31, 2017, for which the Company has used significant unobservable inputs (Level 3):

																														Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date
			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	83	$	—		$	—		$	11,862	$	(3	)	$	—	$	—	$	(11,944	)	$	(1	)	$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	562,604		1,409		15,136		—			(10,931		)	100		(59,175		)	—		—		(6,643		)	1,865			504,365		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate securities	664,046		—		27,637		—			(13,089		)	131,822		(169,002		)	—		—		(10,353		)	(4,160		)	626,901		—
Total fixed maturity securities— available-for-sale	1,226,653		1,409		42,856		—			(24,020		)	143,784		(228,180		)	—		—		(28,940		)	(2,296		)	1,131,266		—
Fixed maturity securities—trading
Residential mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	84,563		3,768		—		(1,157		)	—			—		(52,835		)	—		—		—			883			35,222		3,483
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate securities	5,492		101		—		(58		)	—			—		—			—		—		—			(93		)	5,442		44
Total fixed maturity securities—trading	90,055		3,869		—		(1,215		)	—			—		(52,835		)	—		—		—			790			40,664		3,527
Total fixed maturity securities	1,316,708		5,278		42,856		(1,215		)	(24,020		)	143,784		(281,015		)	—		—		(28,940		)	(1,506		)	1,171,930		3,527
Equity securities	69,010		2		52		(2,630		)	(53		)	—		(274		)	—		—		3			—			66,110		3
Other long-term investments(1)	124,325		27,158		—		(15,479		)	—			—		—			—		—		—			—			136,004		11,679
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	1,510,043		32,438		42,908		(19,324		)	(24,073		)	143,784		(281,289		)	—		—		(28,937		)	(1,506		)	1,374,044		15,209
Total assets measured at fair value on a recurring basis	$	1,510,043	$	32,438	$	42,908	$	(19,324	)	$	(24,073	)	$	143,784	$	(281,289	)	$	—	$	—	$	(28,937	)	$	(1,506	)	$	1,374,044	$	15,209
Liabilities:
Annuity account balances(2)	$	87,616	$	—	$	—	$	(4,001	)	$	—		$	—	$	—		$	623	$	8,768	$	—		$	—		$	83,472	$	—
Other liabilities(1)	571,843		93,071		—		(282,118		)	—			—		—			—		—		—			—			760,890		(189,047		)
Total liabilities measured at fair value on a recurring basis	$	659,459	$	93,071	$	—	$	(286,119	)	$	—		$	—	$	—		$	623	$	8,768	$	—		$	—		$	844,362	$	(189,047	)

(1) Represents certain freestanding and embedded derivatives.

(2) Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the year ended December 31, 2018, for which the Company has used significant unobservable inputs (Level 3):

																														Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date
			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	—	$	—	$	—	$	—		$	(995	)	$	22,225	$	—		$	—	$	—	$	(21,281	)	$	51		$	—	$	—
Commercial mortgage-backed securities	—		—		50		—			(2,496		)	48,621		(293		)	—		—		(45,832		)	(50		)	—		—
Other asset-backed securities	504,365		3,716		16,503		(159		)	(25,577		)	—		(80,051		)	—		—		222			2,623			421,642		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate securities	626,901		—		12,537		—			(29,017		)	108,491		(97,676		)	—		—		20,721			(3,681		)	638,276		—
Total fixed maturity securities— available-for-sale	1,131,266		3,716		29,090		(159		)	(58,085		)	179,337		(178,020		)	—		—		(46,170		)	(1,057		)	1,059,918		—
Fixed maturity securities—trading
Residential mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	35,222		464		—		(3,798		)	—			8,728		(14,511		)	—		—		164			(213		)	26,056		(3,179		)
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate securities	5,442		45		—		(145		)	—			999		—			—		—		—			(99		)	6,242		(101		)
Total fixed maturity securities—trading	40,664		509		—		(3,943		)	—			9,727		(14,511		)	—		—		164			(312		)	32,298		(3,280		)
Total fixed maturity securities	1,171,930		4,225		29,090		(4,102		)	(58,085		)	189,064		(192,531		)	—		—		(46,006		)	(1,369		)	1,092,216		(3,280		)
Equity securities	66,110		375		—		(93		)	—			36		(2,103		)	—		—		—			—			64,325		282
Other long-term investments(1)	136,004		51,161		—		(74,821		)	—			—		—			—		—		—			—			112,344		(23,660		)
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	1,374,044		55,761		29,090		(79,016		)	(58,085		)	189,100		(194,634		)	—		—		(46,006		)	(1,369		)	1,268,885		(26,658		)
Total assets measured at fair value on a recurring basis	$	1,374,044	$	55,761	$	29,090	$	(79,016	)	$	(58,085	)	$	189,100	$	(194,634	)	$	—	$	—	$	(46,006	)	$	(1,369	)	$	1,268,885	$	(26,658	)
Liabilities:
Annuity account balances(2)	$	83,472	$	—	$	—	$	(3,505	)	$	—		$	—	$	—		$	623	$	11,481	$	—		$	—		$	76,119	$	—
Other liabilities(1)	760,890		401,350		—		(270,402		)	—			—		—			—		—		—			—			629,942		130,948
Total liabilities measured at fair value on a recurring basis	$	844,362	$	401,350	$	—	$	(273,907	)	$	—		$	—	$	—		$	623	$	11,481	$	—		$	—		$	706,061	$	130,948

(1) Represents certain freestanding and embedded derivatives.

(2) Represents liabilities related to fixed indexed annuities.

Schedule of the carrying amounts and estimated fair value of the Company's financial instruments

The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows:

		As of December 31,
		2018				2017
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)				(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	7,724,733	$	7,447,702	$	6,817,723	$	6,740,177
Policy loans	3	1,695,886		1,695,886		1,615,615		1,615,615
Fixed maturities, held-to-maturity(1)	3	2,633,474		2,547,210		2,718,904		2,776,327
Liabilities:
Stable value product account balances	3	$	5,234,731	$	5,200,723	$	4,698,371	$	4,698,868
Future policy benefits and claims(2)	3	1,671,414		1,671,434		220,498		220,498
Other policyholders’ funds(3)	3	131,150		131,782		133,508		134,253
Debt:(4)
Bank borrowings	3	$	—	$	—	$	—	$	—
Senior Notes	2	1,100,508		1,065,338		943,370		933,926
Subordinated debentures	2	495,426		494,265		495,289		501,215
Subordinated funding obligations	3	110,000		95,476		—		—
Non-recourse funding obligations(5)	3	2,632,497		2,550,237		2,747,477		2,804,983

Except as noted below, fair values were estimated using quoted market prices.

(1) Securities purchased from unconsolidated subsidiaries, Red Mountain LLC and Steel City LLC.

(2) Single premium immediate annuity without life contingencies.

(3) Supplementary contracts without life contingencies.

(4) Excludes capital lease obligations of $1.3 million and $1.7 million as of December 31, 2018 and 2017, respectively.

(5) As of December 31, 2018, carrying amount of $2.6 billion and a fair value of $2.5 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. As of December 31, 2017, carrying amount of $2.7 billion and a fair value of $2.8 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V.