10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

ý  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2019

or 

o  TransitionReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to       

 Commission File Number 001-11339

PROTECTIVE LIFE CORPORATION

(Exact name of registrant as specified in its charter) 

DELAWARE	95-2492236
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

2801 HIGHWAY 280 SOUTH

BIRMINGHAM, ALABAMA 35223

(Address of principal executive offices and zip code)

 Registrant’s telephone number, including area code (205) 268-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated Filer o
Non-accelerated filer x	Smaller Reporting Company o
	Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No ý

Number of shares of Common Stock, $0.01 Par Value, outstanding as of April 23, 2019:  1,000

PROTECTIVE LIFE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTERLY PERIOD ENDED MARCH 31, 2019

TABLE OF CONTENTS

PART I

		Page
Item 1.	Financial Statements (unaudited):
	Consolidated Condensed Statements of Income For The Three Months Ended March 31, 2019 and 2018	2
	Consolidated Condensed Statements of Comprehensive Income (Loss) For The Three Months Ended March 31, 2019 and 2018	3
	Consolidated Condensed Balance Sheets as of March 31, 2019 and December 31, 2018	4
	Consolidated Condensed Statements of Shareowner’s Equity For The Three Months Ended March 31, 2019 and 2018	6
	Consolidated Condensed Statements of Cash Flows For The Three Months Ended March 31, 2019 and 2018	7
	Notes to Consolidated Condensed Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	54
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	100
Item 4.	Controls and Procedures	100
PART II
Item 1A.	Risk Factors	101
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	102
Item 6.	Exhibits	103
	Signature	104

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Premiums and policy fees	$	930,328		$	889,166
Reinsurance ceded	(318,377		)	(345,423		)
Net of reinsurance ceded	611,951			543,743
Net investment income	685,924			520,863
Realized investment gains (losses)	9,919			(9,540		)
Other-than-temporary impairment losses	(1,295		)	(691		)
Portion recognized in other comprehensive income (before taxes)	(1,847		)	(2,954		)
Net impairment losses recognized in earnings	(3,142		)	(3,645		)
Other income	109,378			114,411
Total revenues	1,414,030			1,165,832
Benefits and expenses
Benefits and settlement expenses, net of reinsurance ceded: (2019 - $254,828; 2018 - $347,637)	972,766			786,802
Amortization of deferred policy acquisition costs and value of business acquired	30,400			57,981
Other operating expenses, net of reinsurance ceded: (2019 - $51,291; 2018 - $43,117)	235,949			229,251
Total benefits and expenses	1,239,115			1,074,034
Income before income tax	174,915			91,798
Income tax expense	36,631			17,686
Net income	$	138,284		$	74,112

See Notes to Consolidated Condensed Financial Statements

2

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Net income	$	138,284		$	74,112
Other comprehensive income (loss):
Change in net unrealized gains (losses) on investments, net of income tax: (2019 - $302,063; 2018 - $(153,379))	1,136,331			(577,712		)
Reclassification adjustment for investment amounts included in net income, net of income tax: (2019 - $(415); 2018 - $181)	(1,560		)	681
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (2019 - $2,337; 2018 - $3)	8,792			11
Change in accumulated (loss) gain - derivatives, net of income tax: (2019 - $(522) ; 2018 - $129)	(1,966		)	487
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2019 - $58 ; 2018 - $24)	220			89
Change in postretirement benefits liability adjustment, net of income tax: (2019 - $0; 2018 - $0)	—			—
Total other comprehensive income (loss)	1,141,817			(576,444		)
Total comprehensive income (loss)	$	1,280,101		$	(502,332	)

See Notes to Consolidated Condensed Financial Statements

3

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

	As of
	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
Assets
Fixed maturities, at fair value (amortized cost: 2019 - $54,367,022; 2018 - $54,466,305)	$	53,777,352	$	51,904,699
Fixed maturities, at amortized cost (fair value: 2019 - $2,594,441; 2018 - $2,547,210)	2,607,356		2,633,474
Equity securities, at fair value (cost: 2019 - $619,483; 2018 - $627,087)	619,440		595,884
Mortgage loans (related to securitizations: 2019 - $17; 2018 - $134)	7,701,465		7,724,733
Investment real estate, net of accumulated depreciation (2019 - $283; 2018 - $251)	6,478		6,816
Policy loans	1,677,442		1,695,886
Other long-term investments	853,117		759,354
Short-term investments	817,642		807,283
Total investments	68,060,292		66,128,129
Cash	280,250		173,714
Accrued investment income	646,996		634,921
Accounts and premiums receivable	153,833		113,507
Reinsurance receivables	4,660,567		4,764,743
Deferred policy acquisition costs and value of business acquired	2,986,686		3,023,154
Goodwill	825,511		825,511
Other intangibles, net of accumulated amortization (2019 - $211,899; 2018 - $197,583)	601,603		613,431
Property and equipment, net of accumulated depreciation (2019 - $37,450; 2018 - $33,199)	206,781		184,957
Other assets	261,136		250,036
Assets related to separate accounts:
Variable annuity	12,737,450		12,288,919
Variable universal life	1,041,397		937,732
Total assets	$	92,462,502	$	89,938,754

See Notes to Consolidated Condensed Financial Statements

4

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(continued)

	As of
	March 31, 2019			December 31, 2018
	(Dollars In Thousands)
Liabilities
Future policy benefits and claims	$	42,125,544		$	41,901,552
Unearned premiums	874,253			872,594
Total policy liabilities and accruals	42,999,797			42,774,146
Stable value product account balances	5,527,816			5,234,731
Annuity account balances	13,665,415			13,720,081
Other policyholders’ funds	1,166,378			1,128,379
Other liabilities	2,646,033			2,374,112
Income tax payable	131,817			38,547
Deferred income taxes	1,069,207			839,316
Non-recourse funding obligations	2,607,021			2,632,497
Secured financing liabilities	184,012			495,307
Debt	1,083,672			1,101,827
Subordinated debt	605,460			605,426
Liabilities related to separate accounts:
Variable annuity	12,737,450			12,288,919
Variable universal life	1,041,397			937,732
Total liabilities	85,465,475			84,171,020
Commitments and contingencies - Note 12
Shareowner’s equity
Common Stock: 2019 and 2018 - $0.01 par value; shares authorized: 5,000; shares issued: 1,000	—			—
Additional paid-in-capital	5,554,059			5,554,059
Retained earnings	1,726,917			1,639,441
Accumulated other comprehensive income (loss):
Net unrealized (losses) gains on investments, net of income tax: (2019 - $(67,182); 2018 - $(368,830))	(252,733		)	(1,387,504		)
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (2019 - $(3,717); 2018 - $(6,054))	(13,981		)	(22,773		)
Accumulated gain (loss) - derivatives, net of income tax: (2019 - $(466); 2018 - $(2))	(1,753		)	(7		)
Postretirement benefits liability adjustment, net of income tax: (2019 - $(4,112); 2018 - $(4,112))	(15,482		)	(15,482		)
Total shareowner’s equity	6,997,027			5,767,734
Total liabilities and shareowner’s equity	$	92,462,502		$	89,938,754

See Notes to Consolidated Condensed Financial Statements

5

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER’S EQUITY

(Unaudited)

	Common Stock		Additional Paid-In- Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareowner’s Equity
	(Dollars In Thousands)
Balance, December 31, 2018	$	—	$	5,554,059	$	1,639,441		$	(1,425,766	)	5,767,734
Net income for the three months ended March 31, 2019					138,284						138,284
Other comprehensive income								1,141,817			1,141,817
Comprehensive income for the three months ended March 31, 2019											1,280,101
Cumulative effect adjustments					(50,808		)				(50,808		)
Balance, March 31, 2019	$	—	$	5,554,059	$	1,726,917		$	(283,949	)	$	6,997,027

	Common Stock		Additional Paid-In- Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareowner’s Equity
	(Dollars In Thousands)
Balance, December 31, 2017	$	—	$	5,554,059	$	1,560,444		$	12,696		$	7,127,199
Net income for the three months ended March 31, 2018					74,112						74,112
Other comprehensive loss								(576,444		)	(576,444		)
Comprehensive loss for the three months ended March 31, 2018											(502,332		)
Cumulative effect adjustments					(81,973		)	(10,552		)	(92,525		)
Dividends to parent					(140,000		)				(140,000		)
Balance, March 31, 2018	$	—	$	5,554,059	$	1,412,583		$	(574,300	)	6,392,342

See Notes to Consolidated Condensed Financial Statements

6

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Cash flows from operating activities
Net income	$	138,284		$	74,112
Adjustments to reconcile net income to net cash used in operating activities:
Realized investment (gains) losses	(6,777		)	13,185
Amortization of DAC and VOBA	30,400			57,981
Capitalization of DAC	(95,994		)	(99,246		)
Depreciation and amortization expense	18,737			16,763
Deferred income tax	(59,652		)	20,965
Accrued income tax	93,270			69,790
Interest credited to universal life and investment products	285,588			197,458
Policy fees assessed on universal life and investment products	(407,380		)	(351,128		)
Change in reinsurance receivables	104,176			(14,874		)
Change in accrued investment income and other receivables	(10,902		)	(7,185		)
Change in policy liabilities and other policyholders’ funds of traditional life and health products	(200,148		)	(121,289		)
Trading securities:
Maturities and principal reductions of investments	30,111			53,420
Sale of investments	142,370			67,298
Cost of investments acquired	(149,133		)	(129,346		)
Other net change in trading securities	1,662			(10,901		)
Amortization of premiums and accretion of discounts on investments and mortgage loans	67,060			73,529
Change in other liabilities	17,380			27,947
Other, net	(10,511		)	(21,303		)
Net cash used in operating activities	$	(11,459	)	$	(82,824	)

See Notes to Consolidated Condensed Financial Statements

7

PROTECTIVE LIFE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(continued)

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Cash flows from investing activities
Maturities and principal reductions of investments, available-for-sale	$	400,015		$	151,227
Sale of investments, available-for-sale	994,633			436,969
Cost of investments acquired, available-for-sale	(1,332,657		)	(674,513		)
Change in investments, held-to-maturity	25,000			18,000
Mortgage loans:
New lendings	(155,798		)	(248,231		)
Repayments	170,322			206,111
Change in investment real estate, net	477			583
Change in policy loans, net	18,444			20,973
Change in other long-term investments, net	(8,652		)	(136,969		)
Change in short-term investments, net	(6,655		)	187,652
Net unsettled security transactions	(36,814		)	48,994
Purchase of property, equipment, and intangibles	(5,542		)	(2,244		)
Net cash provided by investing activities	$	62,773		$	8,552
Cash flows from financing activities
Borrowings under line of credit arrangement, debt, and subordinated debt	$	—		$	375,000
Principal payments on line of credit arrangement, debt, and subordinated debt	(9,325		)	(211,412		)
Issuance (repayment) of non-recourse funding obligations	(25,000		)	(18,000		)
Secured financing liabilities	(311,295		)	(238,802		)
Dividends to shareowner	—			(140,000		)
Investment product deposits and change in universal life deposits	1,380,615			892,365
Investment product withdrawals	(979,532		)	(529,368		)
Other financing activities, net	(241		)	(97		)
Net cash provided by financing activities	$	55,222		$	129,686
Change in cash	106,536			55,414
Cash at beginning of period	173,714			252,310
Cash at end of period	$	280,250		$	307,724

See Notes to Consolidated Condensed Financial Statements

8

PROTECTIVE LIFE CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1.BASIS OF PRESENTATION

Basis of Presentation

On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc., a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company (the “Merger”). Prior to February 1, 2015, the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors.

Certain reclassifications have been made in previously reported financial statements and accompanying notes to make prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity.

Entities Included

The consolidated condensed financial statements in this report include the accounts of Protective Life Corporation and subsidiaries and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

For a full description of significant accounting policies, see Note 2 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. There were no significant changes to the Company’s accounting policies during the three months ended March 31, 2019.

Accounting Pronouncements Recently Adopted

Accounting Standards Update (“ASU” or “Update”) No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change relates to the accounting model used by lessees. The Update requires all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The lease asset and liability are measured at the present value of the minimum lease payments less any upfront payments or fees. The amendments in the Update became effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company recorded a cumulative effect adjustment as of the date of adoption, January 1, 2019, establishing a right of use asset and lease liability of $21.5 million on its consolidated condensed balance sheet reflected in the property and equipment and other liabilities line items, respectively.

ASU No. 2017-08 - Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this Update require that premiums on callable debt securities be amortized to the first call date. This is a change from previous guidance, under which premiums are amortized to the maturity date of the security. The amendments became effective for annual and interim periods beginning after December 15, 2018. The Company recorded a cumulative effect adjustment as of the adoption date, January 1, 2019, resulting in a $50.8 million reduction to retained earnings, net of income tax.

ASU No. 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this Update are designed to permit hedge accounting to be applied to a broader range of hedging strategies as well as to more closely align hedge accounting and risk management objectives. Specific provisions include requiring

9

changes in the fair value of a hedging instrument be recorded in the same income statement line as the hedged item when it affects earnings. In addition, after a hedge has initially qualified as an effective hedge the Update permits the use of a qualitative hedge effectiveness test in subsequent periods. The amendments in this Update became effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. At adoption, January 1, 2019, this standard did not have an impact on the Company’s operations or financial results.

Accounting Pronouncements Not Yet Adopted

ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments.

The amendments in this Update introduce a new current expected credit loss (“CECL”) model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance against earnings its estimate of the contractual cash flows not expected to be collected on day one of the asset’s acquisition. The allowance may be reversed through earnings if a security recovers in value. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred and recognizes a security’s subsequent recovery in value in other comprehensive income. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. Similar to the CECL model, credit loss impairments will be recorded in an allowance against earnings that may be reversed for subsequent recoveries in value. The amendments in this Update, along with related amendments in ASU No. 2018-19 - Codification Improvements to Topic 326, Financial Instruments-Credit Losses, are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results.

ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally this Update requires new disclosures including liability rollforwards and information about significant inputs, judgements, assumptions, and methods used in the measurement. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently reviewing its policies, processes, and applicable systems to determine the impact this standard will have on its operations and financial results.

3.SIGNIFICANT TRANSACTIONS

The Lincoln National Life Insurance Company

On May 1, 2018, The Lincoln National Life Insurance Company (“Lincoln Life”) completed its previously announced acquisition (the “Closing”) of Liberty Mutual Group Inc.’s (“Liberty Mutual”) Group Benefits Business and Individual Life and Annuity Business (the “Life Business”) through the acquisition of all of the issued and outstanding capital stock of Liberty Life Assurance Company of Boston (“Liberty”). In connection with the Closing and  pursuant to the Master Transaction Agreement, dated January 18, 2018 (the “Master Transaction Agreement”), previously reported in our Current Report on Form 8-K filed on January 23, 2018, PLICO and Protective Life and Annuity Insurance Company (“PLAIC”), a wholly owned subsidiary of PLICO, entered into reinsurance agreements (the “Liberty Reinsurance Agreements”) and related ancillary documents (including administrative services agreements and transition services agreements) providing for the reinsurance and administration of the Life Business. 

Pursuant to the Liberty Reinsurance Agreements, Liberty ceded to PLICO and PLAIC the insurance policies related to the Life Business on a 100% coinsurance basis. The aggregate ceding commission for the reinsurance of the Life Business was $422.4 million, which is the purchase price.

All policies issued in states other than New York were ceded to PLICO under a reinsurance agreement between Liberty and PLICO, and all policies issued in New York were ceded to PLAIC under a reinsurance agreement between Liberty and PLAIC.  The aggregate statutory reserves of Liberty ceded to PLICO and PLAIC as of the closing of the Transaction were approximately $13.2 billion, which amount was based on initial estimates and is subject to adjustment following the Closing. Pursuant to the terms of the Liberty Reinsurance Agreements, each of PLICO and PLAIC are required to maintain assets in trust for the benefit of Liberty to secure their respective obligations to Liberty under the Liberty Reinsurance Agreements. The trust accounts were initially funded by each of PLICO and PLAIC principally with the investment assets that were received from Liberty. Additionally, PLICO and PLAIC have each agreed to provide, on behalf of Liberty, administration and policyholder servicing of the Life Business reinsured by it pursuant to administrative services agreements between Liberty and each of PLICO and PLAIC.

The terms of the Liberty Reinsurance Agreements resulted in an acquisition of the Life Business by the Company in accordance with ASC Topic 805, Business Combinations.

10

The following table details the purchase consideration and preliminary allocation of assets acquired and liabilities assumed from the Life Business reinsurance transaction as of the transaction date. These estimates remain preliminary and are subject to adjustment. While they are not expected to be materially different than those shown, any material adjustments to the estimates will be reflected, retroactively, as of the date of the acquisition.

	Fair Value as of May 1, 2018
	(Dollars In Thousands)
ASSETS
Fixed maturities	$	12,588,512
Mortgage loans	435,405
Policy loans	131,489
Total investments	13,155,406
Cash	38,456
Accrued investment income	152,030
Reinsurance receivables	272
Value of business acquired	338,303
Other assets	916
Total assets	13,685,383
LIABILITIES
Future policy benefits and claims	$	11,748,942
Unearned premiums	—
Total policy liabilities and accruals	11,748,942
Annuity account balances	1,823,444
Other policyholders’ funds	41,936
Other liabilities	71,061
Total liabilities	13,685,383
NET ASSETS ACQUIRED	$	—

The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Life Business were completed as of January 1, 2017. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated:

	Unaudited
	For The Three Months Ended March 31, 2018
	(Dollars In Thousands)
Revenue	$	1,416,320
Net income	$	112,869

Great-West Life & Annuity Insurance Company

On January 23, 2019, PLICO entered into a Master Transaction Agreement (the “GWL&A Master Transaction Agreement”) with Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (“GWL&A of NY”), The Canada Life Assurance Company (“CLAC”) and The Great-West Life Assurance Company (“GWL” and, together with GWL&A, GWL&A of NY and CLAC, the “Sellers”), pursuant to which PLICO will acquire via reinsurance (the “Transaction”) substantially all of the Sellers’ individual life insurance and annuity business (the “Individual Life Business”). Pursuant to the GWL&A Master Transaction Agreement, PLICO and PLAIC will enter into reinsurance agreements (the “GWL&A Reinsurance Agreements”) and related ancillary documents at the closing of the Transaction. On the terms and subject to the conditions of the GWL&A Reinsurance Agreements, the Sellers will cede to PLICO and PLAIC, effective as of the closing of the Transaction, substantially all of the insurance policies relating to the Individual Life Business. To support its obligations under the GWL&A Reinsurance Agreements, PLICO will establish trust accounts for the benefit of GWL&A, CLAC and GWL, and PLAIC will establish a trust account for the benefit of GWL&A of NY. The Sellers will retain a block of participating policies, which will be administered by the Company.

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The Transaction is subject to the satisfaction or waiver of customary closing conditions, including regulatory approvals and the execution of the GWL&A Reinsurance Agreements and related ancillary documents. The GWL&A Master Transaction Agreement and other transaction documents contain certain customary representations and warranties made by each of the parties, and certain customary covenants regarding the Sellers and the Individual Life Business, and provide for indemnification, among other things, for breaches of those representations, warranties and covenants.

4.MONY CLOSED BLOCK OF BUSINESS

In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013.

Assets allocated to the Closed Block inure solely to the benefit of each Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account.

The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in accumulated other comprehensive income (loss) “AOCI”) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life, this actuarial calculation of the expected timing of MONY’s Closed Block earnings was recalculated and reset as February 1, 2015, along with the establishment of a policyholder dividend obligation as of such date.

If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block.

Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block.

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Summarized financial information for the Closed Block as of March 31, 2019, and December 31, 2018, is as follows:

	As of
	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,643,484	$	5,679,732
Policyholder dividend obligation	11,803		—
Other liabilities	33,254		22,505
Total closed block liabilities	5,688,541		5,702,237
Closed block assets
Fixed maturities, available-for-sale, at fair value	$	4,404,945	$	4,257,437
Mortgage loans on real estate	75,062		75,838
Policy loans	666,270		672,213
Cash	115,204		116,225
Other assets	107,204		136,388
Total closed block assets	5,368,685		5,258,101
Excess of reported closed block liabilities over closed block assets	319,856		444,136
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation: $(118,670) and $(141,128); and net of income tax: $24,921 and $61,676	—		(120,528		)
Future earnings to be recognized from closed block assets and closed block liabilities	$	319,856	$	323,608

Reconciliation of the policyholder dividend obligation is as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Policyholder dividend obligation, beginning of period	$	—		$	160,712
Applicable to net revenue (losses)	(10,655		)	(11,712		)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation	22,458			(149,000		)
Policyholder dividend obligation, end of period	$	11,803		$	—

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Closed Block revenues and expenses were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Premiums and other income	$	37,444		$	39,612
Net investment income	51,128			50,543
Net investment gains	(454		)	(237		)
Total revenues	88,118			89,918
Benefits and other deductions
Benefits and settlement expenses	78,666			79,952
Other operating expenses	359			(319		)
Total benefits and other deductions	79,025			79,633
Net revenues before income taxes	9,093			10,285
Income tax expense	1,910			2,160
Net revenues	$	7,183		$	8,125

5.INVESTMENT OPERATIONS

Net realized gains (losses) are summarized as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Fixed maturities	$	5,117		$	2,783
Equity gains and losses	30,717			(8,786		)
Modco trading portfolio	94,902			(84,709		)
Other investments	(1,146		)	3,113
Realized gains (losses) - all other investments	129,590			(87,599		)
Realized gains (losses) - derivatives(1)	(119,671		)	78,059
Realized investment gains (losses)	$	9,919		$	(9,540	)
Net impairments losses recognized in earnings	$	(3,142	)	$	(3,645	)
(1) See Note 7, Derivative Financial Instruments

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Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities and short-term investments) are as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Gross realized gains	$	7,870		$	8,049
Gross realized losses:
Impairment losses	$	(3,142	)	$	(3,645	)
Other realized losses	$	(2,753	)	$	(5,267	)

The chart below summarizes the fair value (proceeds) and the gains (losses) realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position.

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Securities in an unrealized gain position:
Fair value (proceeds)	$	648,891		$	142,133
Gains realized	$	7,870		$	8,049
Securities in an unrealized loss position(1):
Fair value (proceeds)	$	178,004		$	56,984
Losses realized	$	(2,753	)	$	(5,267	)
(1) The Company made the decision to exit these holdings in conjunction with its overall asset/liability management process.

The chart below summarizes the realized gains (losses) on equity securities sold during the period and equity securities still held at the reporting date.

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Net gains (losses) recognized during the period on equity securities	$	30,717	$	(8,786	)
Less: net gains (losses) recognized on equity securities sold during the period	$	60	$	(1,702	)
Gains (losses) recognized during the period on equity securities still held	$	30,657	$	(7,084	)

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The amortized cost and fair value of the Company’s investments classified as available-for-sale are as follows:

As of March 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	3,880,305	$	57,389	$	(29,406	)	$	3,908,288	$	—
Commercial mortgage-backed securities	2,363,988		17,199		(27,843		)	2,353,344		—
Other asset-backed securities	1,359,813		18,421		(15,623		)	1,362,611		—
U.S. government-related securities	1,439,136		2,382		(30,412		)	1,411,106		—
Other government-related securities	523,701		12,343		(11,883		)	524,161		—
States, municipals, and political subdivisions	3,632,880		84,040		(25,256		)	3,691,664		1,021
Corporate securities	38,586,159		576,720		(1,213,985		)	37,948,894		(18,719		)
Redeemable preferred stocks	87,579		368		(4,124		)	83,823		—
	51,873,561		768,862		(1,358,532		)	51,283,891		(17,698		)
Short-term investments	783,011		—		—			783,011		—
	$	52,656,572	$	768,862	$	(1,358,532	)	$	52,066,902	$	(17,698	)
As of December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	3,650,539	$	23,247	$	(62,196	)	$	3,611,590	$	(18	)
Commercial mortgage-backed securities	2,349,274		3,911		(58,101		)	2,295,084		—
Other asset-backed securities	1,410,059		17,232		(35,398		)	1,391,893		—
U.S. government-related securities	1,683,432		1,795		(45,722		)	1,639,505		—
Other government-related securities	545,522		4,292		(33,850		)	515,964		—
States, municipals, and political subdivisions	3,682,037		25,706		(118,902		)	3,588,841		876
Corporate securities	38,634,888		112,992		(2,385,052		)	36,362,828		(29,685		)
Redeemable preferred stocks	94,362		—		(11,560		)	82,802		—
	52,050,113		189,175		(2,750,781		)	49,488,507		(28,827		)
Short-term investments	776,357		—		—			776,357		—
	$	52,826,470	$	189,175	$	(2,750,781	)	$	50,264,864	$	(28,827	)
(1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above.

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     The Company holds certain investments pursuant to certain modified coinsurance (“Modco”) arrangements. The fixed maturities held as part of these arrangements are classified as trading securities. The fair value of the investments held pursuant to these Modco arrangements are as follows:    

	As of March 31, 2019		As of December 31, 2018
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	213,259	$	241,836
Commercial mortgage-backed securities	209,482		188,925
Other asset-backed securities	149,541		159,907
U.S. government-related securities	59,627		59,794
Other government-related securities	23,640		44,207
States, municipals, and political subdivisions	292,796		286,413
Corporate securities	1,533,256		1,423,833
Redeemable preferred stocks	11,860		11,277
	2,493,461		2,416,192
Equity securities	9,207		9,892
Short-term investments	34,631		30,926
	$	2,537,299	$	2,457,010

The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of March 31, 2019, by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars In Thousands)
Due in one year or less	$	1,259,571	$	1,257,644	$	—	$	—
Due after one year through five years	8,954,924		8,938,604		—		—
Due after five years through ten years	8,979,403		9,034,109		—		—
Due after ten years	32,679,663		32,053,534		2,607,356		2,594,441
	$	51,873,561	$	51,283,891	$	2,607,356	$	2,594,441

The chart below summarizes the Company’s other-than-temporary impairments of investments. All of the impairments were related to fixed maturities.

	For The Three Months Ended March 31,
	2019			2018
	Fixed Maturities			Fixed Maturities
	(Dollars In Thousands)
Other-than-temporary impairments	$	(1,295	)	$	(691	)
Non-credit impairment losses recorded in other comprehensive income (loss)	(1,847		)	(2,954		)
Net impairment losses recognized in earnings	$	(3,142	)	$	(3,645	)

There were no other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell for the three months ended March 31, 2019 and 2018.

     The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss):

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	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Beginning balance	$	24,868		$	3,268
Additions for newly impaired securities	751			—
Additions for previously impaired securities	2,347			—
Reductions for previously impaired securities due to a change in expected cash flows	(632		)	(1,033		)
Reductions for previously impaired securities that were sold in the current period	(119		)	—
Ending balance	$	27,215		$	2,235

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2019:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	158,901	$	(1,772	)	$	1,242,286	$	(27,634	)	$	1,401,187	$	(29,406	)
Commercial mortgage-backed securities	52,747		(1,235		)	1,478,365		(26,608		)	1,531,112		(27,843		)
Other asset-backed securities	531,548		(11,905		)	192,201		(3,718		)	723,749		(15,623		)
U.S. government-related securities	43,977		(640		)	1,045,717		(29,772		)	1,089,694		(30,412		)
Other government-related securities	51,767		(1,279		)	198,112		(10,604		)	249,879		(11,883		)
States, municipals, and political subdivisions	60,555		(369		)	911,555		(24,887		)	972,110		(25,256		)
Corporate securities	3,340,636		(136,453		)	17,623,264		(1,077,532		)	20,963,900		(1,213,985		)
Redeemable preferred stocks	10,154		(3		)	68,291		(4,121		)	78,445		(4,124		)
	$	4,250,285	$	(153,656	)	$	22,759,791	$	(1,204,876	)	$	27,010,076	$	(1,358,532	)

Residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”) had gross unrealized losses greater than twelve months of $27.6 million and $26.6 million as of March 31, 2019. Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments.

The other asset-backed securities had a gross unrealized loss greater than twelve months of $3.7 million as of March 31, 2019. This category predominately includes student loan backed auction rate securities (“ARS”) whose underlying collateral is at least 97% guaranteed by the Federal Family Education Loan Program (“FFELP”). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary.

The U.S. government-related securities and the other government-related securities had gross unrealized losses greater than twelve months of $29.8 million and $10.6 million, respectively, as of March 31, 2019. These declines were related to changes in interest rates.

The states, municipals, and political subdivisions category had gross unrealized losses greater than twelve months of $24.9 million as of March 31, 2019. The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information.

The corporate securities category had gross unrealized losses greater than twelve months of $1.1 billion as of March 31, 2019. The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information.

     As of March 31, 2019, the Company had a total of 2,473 positions that were in an unrealized loss position, but the Company does not consider these unrealized loss positions to be other-than-temporary. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover,

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and the Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities.

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	1,485,009	$	(31,302	)	$	804,364	$	(30,894	)	$	2,289,373	$	(62,196	)
Commercial mortgage-backed securities	422,438		(7,442		)	1,429,384		(50,659		)	1,851,822		(58,101		)
Other asset-backed securities	687,271		(30,963		)	148,871		(4,435		)	836,142		(35,398		)
U.S. government-related securities	130,290		(4,668		)	1,085,654		(41,054		)	1,215,944		(45,722		)
Other government-related securities	226,201		(15,267		)	131,569		(18,583		)	357,770		(33,850		)
States, municipals, and political subdivisions	1,004,262		(27,180		)	1,129,152		(91,722		)	2,133,414		(118,902		)
Corporate securities	18,326,331		(970,553		)	12,859,732		(1,414,499		)	31,186,063		(2,385,052		)
Redeemable preferred stocks	41,147		(4,467		)	41,655		(7,093		)	82,802		(11,560		)
	$	22,322,949	$	(1,091,842	)	$	17,630,381	$	(1,658,939	)	$	39,953,330	$	(2,750,781	)

     As of March 31, 2019, the Company had securities in its available-for-sale portfolio which were rated below investment grade of $1.6 billion and had an amortized cost of $1.7 billion. In addition, included in the Company’s trading portfolio, the Company held $120.7 million of securities which were rated below investment grade. Approximately $264.2 million of the available-for-sale and trading securities that were below investment grade were not publicly traded.

The change in unrealized gains (losses), net of income tax, on fixed maturities, classified as available-for-sale is summarized as follows:

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Fixed maturities	$	1,557,829	$	(884,219	)

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The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of March 31, 2019 and December 31, 2018, are as follows:

As of March 31, 2019	Amortized Cost		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value		Total OTTI Recognized in OCI
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain, LLC	$	764,356	$	—	$	(56,483	)	$	707,873	$	—
Steel City, LLC	1,843,000		43,568		—			1,886,568		—
	$	2,607,356	$	43,568	$	(56,483	)	$	2,594,441	$	—
As of December 31, 2018	Amortized Cost		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value		Total OTTI Recognized in OCI
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain, LLC	$	750,474	$	—	$	(81,657	)	$	668,817	$	—
Steel City, LLC	1,883,000		—		(4,607		)	1,878,393		—
	$	2,633,474	$	—	$	(86,264	)	$	2,547,210	$	—

During the three months ended March 31, 2019 and 2018, the Company recorded no other-than-temporary impairments on held-to-maturity securities.

The Company’s held-to-maturity securities had $43.6 million of gross unrecognized holding gains and $56.5 million of gross unrecognized holding losses as of March 31, 2019. The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. These held-to-maturity securities are issued by affiliates of the Company which are considered variable interest entities (“VIEs”). The Company is not the primary beneficiary of these entities and thus the securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are affiliates of the Company.

The Company’s held-to-maturity securities had $86.3 million of gross unrecognized holding losses as of December 31, 2018. The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information.

Variable Interest Entities

The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a VIE. If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

Based on this analysis, the Company had an interest in two subsidiaries as of March 31, 2019 and December 31, 2018, Red Mountain, LLC (“Red Mountain”) and Steel City, LLC (“Steel City”), that were determined to be VIEs.

The activity most significant to Red Mountain is the issuance of a note in connection with a financing transaction involving Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”) in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued a note (the “Red Mountain Note”) to Golden Gate V. For details of this transaction, see Note 11, Debt and Other Obligations. The Company had the power, via its 100% ownership through an affiliate, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third party in its function as provider of credit enhancement on the Red Mountain Note. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment, through an affiliate, of $10,000. Additionally, the Company

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has guaranteed Red Mountain’s payment obligation for the credit enhancement fee to the unrelated third party provider. As of March 31, 2019, no payments have been made or required related to this guarantee.

Steel City, a wholly owned subsidiary of the Company, entered into a financing agreement on January 15, 2016 involving Golden Gate Captive Insurance Company ("Golden Gate"), in which Golden Gate issued non-recourse funding obligations to Steel City and Steel City issued three notes (the “Steel City Notes”) to Golden Gate. Credit enhancement on the Steel City Notes is provided by unrelated third parties. For details of the financing transaction, see Note 11, Debt and Other Obligations. The activity most significant to Steel City is the issuance of the Steel City Notes. The Company had the power, via its 100% ownership, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third parties in their function as providers of credit enhancement on the Steel City Notes. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment of $10,000. Additionally, the Company has guaranteed Steel City’s payment obligation for the credit enhancement fee to the unrelated third party providers. As of March 31, 2019, no payments have been made or required related to this guarantee.

6.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material.

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 consolidated balance sheets are categorized as follows:

•Level 1:  Unadjusted quoted prices for identical assets or liabilities in an active market.

• Level 2:  Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following:

a)    Quoted prices for similar assets or liabilities in active markets;

b)    Quoted prices for identical or similar assets or liabilities in non-active markets;

c)    Inputs other than quoted market prices that are observable; and

d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.

• Level 3:  Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.

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The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of March 31, 2019:

	Measurement Category	Level 1		Level 2		Level 3		Total
		(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	4	$	—	$	3,908,288	$	—	$	3,908,288
Commercial mortgage-backed securities	4	—		2,353,344		—		2,353,344
Other asset-backed securities	4	—		942,520		420,091		1,362,611
U.S. government-related securities	4	911,137		499,969		—		1,411,106
State, municipals, and political subdivisions	4	—		3,691,664		—		3,691,664
Other government-related securities	4	—		524,161		—		524,161
Corporate securities	4	—		37,300,286		648,608		37,948,894
Redeemable preferred stocks	4	66,650		17,173		—		83,823
Total fixed maturity securities - available-for-sale		977,787		49,237,405		1,068,699		51,283,891
Fixed maturity securities - trading
Residential mortgage-backed securities	3	—		213,259		—		213,259
Commercial mortgage-backed securities	3	—		209,482		—		209,482
Other asset-backed securities	3	—		83,057		66,484		149,541
U.S. government-related securities	3	26,880		32,747		—		59,627
State, municipals, and political subdivisions	3	—		292,796		—		292,796
Other government-related securities	3	—		23,640		—		23,640
Corporate securities	3	—		1,528,005		5,251		1,533,256
Redeemable preferred stocks	3	11,860		—		—		11,860
Total fixed maturity securities - trading		38,740		2,382,986		71,735		2,493,461
Total fixed maturity securities		1,016,527		51,620,391		1,140,434		53,777,352
Equity securities	3	555,009		37		64,394		619,440
Other long-term investments(1)	3 & 4	68,379		359,864		109,532		537,775
Short-term investments	3	722,906		94,736		—		817,642
Total investments		2,362,821		52,075,028		1,314,360		55,752,209
Cash	3	278,630		—		—		278,630
Other assets	3	32,510		—		—		32,510
Assets related to separate accounts
Variable annuity	3	12,737,450		—		—		12,737,450
Variable universal life	3	1,041,397		—		—		1,041,397
Total assets measured at fair value on a recurring basis		$	16,452,808	$	52,075,028	$	1,314,360	$	69,842,196
Liabilities:
Annuity account balances (2)	3	$	—	$	—	$	74,613	$	74,613
Other liabilities(1)	3 & 4	18,581		156,493		797,891		972,965
Total liabilities measured at fair value on a recurring basis		$	18,581	$	156,493	$	872,504	$	1,047,578
(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 (Loss)

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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, municipals, 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 stocks	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, municipals, 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 stocks	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 (Loss)

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Determination of fair values

The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table.

The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price 93.5% of the Company’s available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non-binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which we purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation.

The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies.

For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value through an analysis using internal and external cash flow models developed based on spreads and, when available, market indices. The Company uses a market-based cash flow analysis to validate the reasonableness of prices received from independent brokers. These analytics, which are updated daily, incorporate various metrics (yield curves, credit spreads, prepayment rates, etc.) to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the three months endedMarch 31, 2019.

The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3.

Asset-Backed Securities

This category mainly consists of residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). As of March 31, 2019, the Company held $7.7 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities.

After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

As of March 31, 2019, the Company held $486.6 million of Level 3 ABS, which included $420.1 million of other asset-backed securities classified as available-for-sale and $66.5 million of other asset-backed securities classified as trading. These securities are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation

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process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate. In periods where market activity increases and there are transactions at a price that is not the result of a distressed or forced sale we consider those prices as part of our valuation. If the market activity during a period is solely the result of the issuer redeeming positions we consider those transactions in our valuation, but still consider them to be Level 3 measurements due to the nature of the transaction.

Corporate Securities, Redeemable Preferred Stocks, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government-Related Securities

As of March 31, 2019, the Company classified approximately $43.9 billion of corporate securities, redeemable preferred stocks, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

The brokers and third party pricing service utilize valuation models that consist of a hybrid income and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market.

As of March 31, 2019, the Company classified approximately $653.9 million of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium.

Equities

As of March 31, 2019, the Company held approximately $64.4 million of equity securities classified as Level 2 and Level 3. Of this total, $63.4 million represents Federal Home Loan Bank (“FHLB”) stock. The Company believes that the cost of the FHLB stock approximates fair value.

Other Long-term Investments and Other Liabilities

Other long-term investments and other liabilities consist entirely of free-standing and embedded derivative financial instruments. Refer to Note 7, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of March 31, 2019, 100% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses.

Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets.

Derivative instruments classified as Level 2 primarily include swaps, options, and swaptions, which are traded over-the-counter. Level 2 also includes certain centrally cleared derivatives. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs.

Derivative instruments classified as Level 3 are embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities.

The embedded derivatives are carried at fair value in other long-term investments and other liabilities on the Company’s consolidated condensed balance sheet. The changes in fair value are recorded in earnings as Realized investment gains (losses). Refer to Note 7, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses.

The fair value of the guaranteed living withdrawal benefits (“GLWB”) embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near-term equity

25

market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the Ruark 2015 ALB table, with attained age factors varying from 87.0% - 100.0% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR plus a credit spread (to represent the Company’s non-performance risk). As a result of using significant unobservable inputs, the GLWB embedded derivative is categorized as Level 3. Policyholder assumptions are reviewed on an annual basis.

The balance of the fixed indexed annuity (“FIA”) embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 2015 Ruark ALB mortality table, with attained age factors varying from 87% - 100% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3.

The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the SOA 2015 VBT Primary Tables, with attained age factors varying from 37% - 577% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3.

The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. As a result, these agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in earnings. The investments supporting these agreements are designated as “trading securities”; therefore changes in their fair value are also reported in earnings. As of March 31, 2019, the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $2.3 billion and the statutory unrealized gain (loss) of the securities of $113.0 million. As a result, changes in the fair value of the embedded derivatives are largely offset by the changes in fair value of the related investments and each are reported in earnings. The fair value of the embedded derivative is considered a Level 3 valuation due to the unobservable nature of the policy liabilities.

Annuity Account Balances

The Company records a certain legacy block of FIA reserves at fair value. Based on the characteristics of these reserves, the Company believes that the fund value approximates fair value. The fair value measurement of these reserves is considered a Level 3 valuation due to the unobservable nature of the fund values. The Level 3 fair value as of March 31, 2019 is $74.6 million.

Separate Accounts

Separate account assets are invested in open-ended mutual funds and are included in Level 1.

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Valuation of Level 3 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 March 31, 2019		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	419,915	Liquidation	Liquidation value	$95.39 - $99.99 ($98.00)
			Discounted cash flow	Liquidity premium	0.04% - 1.27% (0.54%)
				Paydown rate	10.90% - 13.09% (11.97%)
Corporate securities	648,608		Discounted cash flow	Spread over treasury	0.92% - 3.87% (1.65%)
Liabilities:(1)
Embedded derivatives - GLWB(2)	$	203,696	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	0.23% - 1.01%
Embedded derivative - FIA	264,430		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
					Dynamically adjusted for WB moneyness and projected market rates vs credited rates
				Nonperformance risk	0.23% - 1.01%
Embedded derivative - IUL	112,814		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	0.23% - 1.01%
(1) Excludes modified coinsurance arrangements.
(2) The fair value for the GLWB embedded derivative is presented as a net liability.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value.

The Company has considered all reasonably available quantitative inputs as of March 31, 2019, but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $72.7 million of financial instruments being classified as Level 3 as of March 31, 2019. Of the $72.7 million, $66.7 million are other asset-backed securities, $5.2 million are corporate securities, and $0.8 million are equity securities.

In certain cases, the Company has determined that book value materially approximates fair value. As of March 31, 2019, the Company held $63.6 million of financial instruments where book value approximates fair value which was predominantly FHLB stock.

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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.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value.

The Company had considered all reasonably available quantitative inputs as of December 31, 2018, but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $40.4 million of financial instruments being classified as Level 3 as of December 31, 2018. Of the $40.4 million, $26.2 million are other asset-backed securities, $13.5 million are corporate securities, and $0.7 million are equity securities.

In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2018, the Company held $63.6 million of financial instruments where book value approximates fair value which was predominantly FHLB stock.

The asset-backed securities classified as Level 3 are predominantly ARS. A change in the paydown rate (the projected annual rate of principal reduction) of the ARS can significantly impact the fair value of these securities. A decrease in the paydown rate would increase the projected weighted average life of the ARS and increase the sensitivity of the ARS’ fair value to changes in interest rates. An increase in the liquidity premium would result in a decrease in the fair value of the securities, while a decrease in the liquidity premium would increase the fair value of these securities. The liquidation values for these securities are sensitive to the issuer’s available cash flows and ability to redeem the securities, as well as the current holders’ willingness to liquidate at the specified price.

The fair value of corporate bonds classified as Level 3 is sensitive to changes in the interest rate spread over the corresponding U.S. Treasury rate. This spread represents a risk premium that is impacted by company-specific and market factors. An increase in the spread can be caused by a perceived increase in credit risk of a specific issuer and/or an increase in the overall market risk premium associated with similar securities. The fair values of corporate bonds are sensitive to changes in spread. When

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holding the treasury rate constant, the fair value of corporate bonds increases when spreads decrease, and decreases when spreads increase.

The fair value of the GLWB embedded derivative is sensitive to changes in the discount rate which includes the Company’s nonperformance risk, volatility, lapse, and mortality assumptions. The volatility assumption is an observable input as it is based on market inputs. The Company’s nonperformance risk, lapse, and mortality are unobservable. An increase in the three unobservable assumptions would result in a decrease in the fair value of the liability and conversely, if there is a decrease in the assumptions the fair value would increase. The fair value is also dependent on the assumed policyholder utilization of the GLWB where an increase in assumed utilization would result in an increase in the fair value of the liability and conversely, if there is a decrease in the assumption, the fair value would decrease.

The fair value of the FIA embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the FIA embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and nonperformance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The fair value of the IUL embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the IUL embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and non-performance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

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The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended March 31, 2019, for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in Earnings related to Instruments still held at the  Reporting Date
	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	$	—	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	421,642		446		8,147		(20		)	(331		)	—		(10,008		)	—		—		—			215			420,091		—
Corporate securities	638,276		—		18,585		—			(3,012		)	34,000		(28,773		)	—		—		(10,095		)	(373		)	648,608		—
Total fixed maturity securities - available-for-sale	1,059,918		446		26,732		(20		)	(3,343		)	34,000		(38,781		)	—		—		(10,095		)	(158		)	1,068,699		—
Fixed maturity securities - trading
Other asset-backed securities	26,056		3,196		—		(116		)	—			15,463		(5,111		)	—		—		27,064			(68		)	66,484		5,330
Corporate securities	6,242		101		—		(31		)	—			—		(1,036		)	—		—		—			(25		)	5,251		34
Total fixed maturity securities - trading	32,298		3,297		—		(147		)	—			15,463		(6,147		)	—		—		27,064			(93		)	71,735		5,364
Total fixed maturity securities	1,092,216		3,743		26,732		(167		)	(3,343		)	49,463		(44,928		)	—		—		16,969			(251		)	1,140,434		5,364
Equity securities	64,325		82		—		(13		)	—			—		—			—		—		—			—			64,394		69
Other long-term investments(1)	112,344		13,222		—		(16,034		)	—			—		—			—		—		—			—			109,532		(2,812		)
Total investments	1,268,885		17,047		26,732		(16,214		)	(3,343		)	49,463		(44,928		)	—		—		16,969			(251		)	1,314,360		2,621
Total assets measured at fair value on a recurring basis	$	1,268,885	$	17,047	$	26,732	$	(16,214	)	$	(3,343	)	$	49,463	$	(44,928	)	$	—	$	—	$	16,969		$	(251	)	$	1,314,360	$	2,621
Liabilities:
Annuity account balances(2)	$	76,119	$	—	$	—	$	(326	)	$	—		$	—	$	—		$	11	$	1,843	$	—		$	—		$	74,613	$	—
Other liabilities(1)	629,942		11,670		—		(179,619		)	—			—		—			—		—		—			—			797,891		(167,949		)
Total liabilities measured at fair value on a recurring basis	$	706,061	$	11,670	$	—	$	(179,945	)	$	—		$	—	$	—		$	11	$	1,843	$	—		$	—		$	872,504	$	(167,949	)
(1) Represents certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.

For the three months ended March 31, 2019, there were $36.0 million of securities transferred into Level 3.

For the three months ended March 31, 2019, there were $19.0 million of securities transferred into Level 2 from Level 3.These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of March 31, 2019.

For the three months ended March 31, 2019, there were no transfers from Level 2 into Level 1.

For the three months ended March 31, 2019, there were no transfers from Level 1 into Level 2.

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

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																						Total Gains (losses) included in Earnings related to Instruments still held at the  Reporting Date
	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	$	—	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	504,365		—		514		—			(1,634		)	—		(14		)	—		—		—		558			503,789		—
Corporate securities	626,901		—		1,399		—			(12,101		)	35,000		(23,635		)	—		—		—		(1,155		)	626,409		—
Total fixed maturity securities - available-for-sale	1,131,266		—		1,913		—			(13,735		)	35,000		(23,649		)	—		—		—		(597		)	1,130,198		—
Fixed maturity securities - trading
Other asset-backed securities	35,222		194		—		(28		)	—			—		(396		)	—		—		—		(34		)	34,958		166
Corporate securities	5,442		—		—		(94		)	—			—		—			—		—		—		(24		)	5,324		(94		)
Total fixed maturity securities - trading	40,664		194		—		(122		)	—			—		(396		)	—		—		—		(58		)	40,282		72
Total fixed maturity securities	1,171,930		194		1,913		(122		)	(13,735		)	35,000		(24,045		)	—		—		—		(655		)	1,170,480		72
Equity securities	66,110		—		—		(49		)	—			—		—			—		—		—		—			66,061		(49		)
Other long-term investments(1)	136,004		8,864		—		(516		)	—			—		—			—		—		—		—			144,352		8,348
Total investments	1,374,044		9,058		1,913		(687		)	(13,735		)	35,000		(24,045		)	—		—		—		(655		)	1,380,893		8,371
Total assets measured at fair value on a recurring basis	$	1,374,044	$	9,058	$	1,913	$	(687	)	$	(13,735	)	$	35,000	$	(24,045	)	$	—	$	—	$	—	$	(655	)	$	1,380,893	$	8,371
Liabilities:
Annuity account balances(2)	$	83,472	$	—	$	—	$	(794	)	$	—		$	—	$	—		$	441	$	3,308	$	—	$	—		$	81,399	$	—
Other liabilities(1)	760,890		161,318		—		(21,530		)	—			—		—			—		—		—		—			621,102		139,788
Total liabilities measured at fair value on a recurring basis	$	844,362	$	161,318	$	—	$	(22,324	)	$	—		$	—	$	—		$	441	$	3,308	$	—	$	—		$	702,501	$	139,788
(1) Represents certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.

For the three months ended March 31, 2018, there were no securities transferred into Level 3.

For the three months ended March 31, 2018, there were no securities transferred into Level 2 from Level 3.

For the three months ended March 31, 2018, there were no transfers from Level 2 into Level 1.

For the three months ended March 31, 2018, there were no transfers from Level 1 into Level 2.

Total realized and unrealized gains (losses) on Level 3 assets and liabilities are primarily reported in either realized investment gains (losses) within the consolidated condensed statements of income (loss) or other comprehensive income (loss) within shareowner’s equity based on the appropriate accounting treatment for the item.

Purchases, sales, issuances, and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily relates to purchases and sales of fixed maturity securities and issuances and settlements of fixed indexed annuities.

The Company reviews the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. The asset transfers

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in the table(s) above primarily related to positions moved from Level 3 to Level 2 as the Company determined that certain inputs were observable.

The amount of total gains (losses) for assets and liabilities still held as of the reporting date primarily represents changes in fair value of trading securities and certain derivatives that exist as of the reporting date and the change in fair value of fixed indexed annuities.

Estimated Fair Value of 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
		March 31, 2019				December 31, 2018
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	7,701,465	$	7,624,622	$	7,724,733	$	7,447,702
Policy loans	3	1,677,442		1,677,442		1,695,886		1,695,886
Fixed maturities, held-to-maturity(1)	3	2,607,356		2,594,441		2,633,474		2,547,210
Liabilities:
Stable value product account balances	3	$	5,527,816	$	5,536,721	$	5,234,731	$	5,200,723
Future policy benefits and claims(2)	3	1,637,741		1,644,622		1,671,414		1,671,434
Other policyholders’ funds(3)	3	105,141		107,975		131,150		131,782
Debt:(4)
Bank borrowings	3	$	—	$	—	$	—	$	—
Senior Notes	2	1,080,878		1,076,623		1,100,508		1,065,338
Subordinated debentures	2	495,460		501,945		495,426		494,265
Subordinated funding obligations	3	110,000		99,026		110,000		95,476
Non-recourse funding obligations(5)	3	2,607,021		2,656,379		2,632,497		2,550,237
Except as noted below, fair values were estimated using quoted market prices.
(1) Securities purchased from unconsolidated affiliates, 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 $2.8 million and $1.3 million as of March 31, 2019 and December 31, 2018, respectively.
(5) As of March 31, 2019, carrying amount of $2.5 billion and a fair value of $2.6 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. 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.

Fair Value Measurements

Mortgage loans on real estate

The Company estimates the fair value of mortgage loans using an internally developed model. This model includes inputs derived by the Company based on assumed discount rates relative to the Company’s current mortgage loan lending rate and an expected cash flow analysis based on a review of the mortgage loan terms. The model also contains the Company’s determined representative risk adjustment assumptions related to credit and liquidity risks.

Policy loans

The Company believes the fair value of policy loans approximates book value. Policy loans are funds provided to policyholders in return for a claim on the policy. The funds provided are limited to the cash surrender value of the underlying policy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of repayments, the Company believes the carrying value of policy loans approximates fair value.

Fixed maturities, held-to-maturity

The Company estimates the fair value of its fixed maturity, held-to-maturity securities using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

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Stable value product and other investment contract balances

The Company estimates the fair value of stable value product account balances and other investment contract balances (included in Future policy benefits and claims as well as Other policyholders’ funds line items on our consolidated condensed balance sheet) using models based on discounted expected cash flows. The discount rates used in the models are based on a current market rate for similar financial instruments.

Debt

Bank borrowings

The Company believes the carrying value of its bank borrowings approximates fair value as the borrowings pay a floating interest rate plus a spread based on the rating of the Company’s senior debt which the Company believes approximates a market interest rate.

Senior notes and subordinated debt securities

The Company estimates the fair value of its Senior Notes and Subordinated debt securities using quoted market prices from third party pricing services, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate.

Funding obligations

The Company estimates the fair value of its subordinated and non-recourse funding obligations using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

7.DERIVATIVE FINANCIAL INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program.

Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department.

Derivatives Related to Interest Rate Risk Management

Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions.

Derivatives Related to Foreign Currency Exchange Risk Management

Derivative instruments that are used as part of the Company’s foreign currency exchange risk management strategy include foreign currency swaps, foreign currency futures, foreign equity futures, and foreign equity options.

Derivatives Related to Risk Mitigation of Certain Annuity Contracts

The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to variable annuity (“VA”) contracts, fixed indexed annuities, and indexed universal life contracts:

•Foreign Currency Futures

•Variance Swaps

•Interest Rate Futures

•Equity Options

•Equity Futures

•Credit Derivatives

•Interest Rate Swaps

•Interest Rate Swaptions

•Volatility Futures

•Volatility Options

•Total Return Swaps

Accounting for Derivative Instruments

The Company records its derivative financial instruments in the consolidated balance sheet in other long-term investments and other liabilities in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists.

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It is the Company's policy not to offset assets and liabilities associated with open derivative contracts. However, the Chicago Mercantile Exchange (“CME”) rules characterize variation margin transfers as settlement payments, as opposed to adjustments to collateral. As a result, derivative assets and liabilities associated with centrally cleared derivatives for which the CME serves as the central clearing party are presented as if these derivatives had been settled as of the reporting date.

For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the effective portion of their realized gain or loss is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis.

The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through earnings in the period of change. Changes in the fair value of derivatives that are recognized in current earnings are reported in realized investment gains (losses).

Derivative Instruments Designated and Qualifying as Hedging Instruments

Cash-Flow Hedges

• To hedge a fixed rate note denominated in a foreign currency, the Company entered into a fixed-to-fixed foreign currency swap in order to hedge the foreign currency exchange risk associated with the note. The cash flows received on the swap are identical to the cash flows paid on the note.

• To hedge a floating rate note, the Company entered into an interest rate swap to exchange the floating rate on the note for a fixed rate in order to hedge the interest rate risk associated with the note. The cash flows received on the swap are identical to the cash flow variability paid on the note.

Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments

The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in earnings during the period of change.

Derivatives Related to Variable Annuity Contracts

• The Company uses equity futures, equity options, total return swaps, interest rate futures, interest rate swaps, interest rate swaptions, currency futures, volatility futures, volatility options, and variance swaps to mitigate the risk related to certain guaranteed minimum benefits, including GLWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility.

• The Company markets certain VA products with a GLWB rider. The GLWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

Derivatives Related to Fixed Annuity Contracts

• The Company uses equity futures and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity markets and overall volatility.

• The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative as it is, not considered to be clearly and closely related to the host contract.

Derivatives Related to Indexed Universal Life Contracts

• The Company uses equity futures and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets.

• The Company markets certain IUL products. The IUL component is considered an embedded derivative as it is not considered to be clearly and closely related to the host contract.

Other Derivatives

• The Company uses various swaps and other types of derivatives to manage risk related to other exposures.

• The Company is involved in various modified coinsurance and funds withheld arrangements which contain embedded derivatives. Changes in their fair value are recorded in current period earnings. The investment portfolios that support the related modified coinsurance reserves and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives.

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The following table sets forth realized investments gains and losses for the periods shown:

Realized investment gains (losses) - derivative financial instruments

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures	$	(6,022	)	$	(16,892	)
Equity futures	29,738			(6,428		)
Currency futures	2,244			(7,583		)
Equity options	(71,695		)	12,016
Interest rate swaptions	—			(14		)
Interest rate swaps	74,861			(63,710		)
Total return swaps	(40,027		)	6,490
Embedded derivative - GLWB	(19,626		)	56,292
Total derivatives related to VA contracts	(30,527		)	(19,829		)
Derivatives related to FIA contracts:
Embedded derivative	(38,814		)	11,330
Equity futures	(429		)	(161		)
Equity options	42,050			(4,669		)
Total derivatives related to FIA contracts	2,807			6,500
Derivatives related to IUL contracts:
Embedded derivative	(13,370		)	9,884
Equity futures	171			136
Equity options	6,180			(1,250		)
Total derivatives related to IUL contracts	(7,019		)	8,770
Embedded derivative - Modco reinsurance treaties	(84,998		)	82,658
Other derivatives	66			(40		)
Total realized gains (losses) - derivatives	$	(119,671	)	$	78,059

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The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship.

Gain (Loss) on Derivatives in Cash Flow Hedging Relationship

	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives			Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)			Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)			(Effective Portion)			(Ineffective Portion)
				Benefits and settlement			Realized investment
				expenses			gains (losses)
				(Dollars In Thousands)
For The Three Months Ended March 31, 2019
Foreign currency swaps	$	(1,893	)	$	(207	)	$	—
Interest rate swaps	(595		)	(71		)	—
Total	$	(2,488	)	$	(278	)	$	—
For The Three Months Ended March 31, 2018
Foreign currency swaps	$	615		$	(113	)	$	—
Total	$	615		$	(113	)	$	—

Based on expected cash flows of the underlying hedged items, the Company expects to reclassify $1.0 million out of accumulated other comprehensive income (loss) into earnings during the next twelve months.

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The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below:

	As of
	March 31, 2019				December 31, 2018
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(Dollars In Thousands)
Other long-term investments
Derivatives not designated as hedging instruments:
Interest rate swaps	$	1,583,000	$	47,915	$	1,515,500	$	28,501
Total return swaps	562,658		2,292		138,070		3,971
Embedded derivative - Modco reinsurance treaties	39,878		38		585,294		7,072
Embedded derivative - GLWB	3,922,844		109,494		3,984,070		105,272
Interest rate futures	295,638		7,267		286,208		10,302
Equity futures	70,902		1,261		12,633		483
Currency futures	174,407		718		—		—
Equity options	6,061,873		368,624		5,624,081		220,092
Interest rate swaptions	—		—		—		—
Other	157		166		157		136
	$	12,711,357	$	537,775	$	12,146,013	$	375,829
Other liabilities
Cash flow hedges:
Interest rate swaps	$	350,000	$	—	$	350,000	$	—
Foreign currency swaps	117,178		1,996		117,178		904
Derivatives not designated as hedging instruments:
Interest rate swaps	525,000		2,591		775,000		11,367
Total return swaps	54,342		276		768,177		23,054
Embedded derivative - Modco reinsurance treaties	2,325,352		107,457		1,795,287		32,828
Embedded derivative - GLWB	6,276,475		313,190		8,466,019		289,343
Embedded derivative - FIA	2,639,780		263,445		2,576,033		217,288
Embedded derivative - IUL	247,241		112,814		233,550		90,231
Interest rate futures	870,669		13,231		863,706		20,100
Equity futures	172,853		3,512		659,357		33,753
Currency futures	57,073		8		202,747		2,163
Equity options	4,161,969		153,460		4,199,687		34,178
Other	8,498		985		3,288		252
	$	17,806,430	$	972,965	$	21,010,029	$	755,461

8.    OFFSETTING OF ASSETS AND LIABILITIES

Certain of the Company's derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company's repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 11, Debt and Other Obligations for details of the Company’s repurchase agreement programs.

Collateral received includes both cash and non-cash collateral.  Cash collateral received by the Company is recorded on the consolidated condensed balance sheet as “cash”, with a corresponding amount recorded in “other liabilities” to represent the Company’s obligation to return the collateral.  Non-cash collateral received by the Company is not recognized on the consolidated condensed balance sheet unless the Company exercises its right to sell or re-pledge the underlying asset. As of March 31, 2019, the fair value of non-cash collateral received was $31.0 million. As of December 31, 2018, the fair value of non-cash collateral received was $45.0 million.

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The tables below present the derivative instruments by assets and liabilities for the Company as of March 31, 2019:

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	428,077	$	—	$	428,077	$	165,785	$	152,924	$	109,368
Total derivatives, subject to a master netting arrangement or similar arrangement	428,077		—		428,077		165,785		152,924		109,368
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	38		—		38		—		—		38
Embedded derivative - GLWB	109,494		—		109,494		—		—		109,494
Other	166		—		166		—		—		166
Total derivatives, not subject to a master netting arrangement or similar arrangement	109,698		—		109,698		—		—		109,698
Total derivatives	537,775		—		537,775		165,785		152,924		219,066
Total Assets	$	537,775	$	—	$	537,775	$	165,785	$	152,924	$	219,066

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	175,074	$	—	$	175,074	$	165,785	$	9,289	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	175,074		—		175,074		165,785		9,289		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	107,457		—		107,457		—		—		107,457
Embedded derivative - GLWB	313,190		—		313,190		—		—		313,190
Embedded derivative - FIA	263,445		—		263,445		—		—		263,445
Embedded derivative - IUL	112,814		—		112,814		—		—		112,814
Other	985		—		985		—		—		985
Total derivatives, not subject to a master netting arrangement or similar arrangement	797,891		—		797,891		—		—		797,891
Total derivatives	972,965		—		972,965		165,785		9,289		797,891
Repurchase agreements(1)	89,275		—		89,275		—		—		89,275
Total Liabilities	$	1,062,240	$	—	$	1,062,240	$	165,785	$	9,289	$	887,166
(1) Borrowings under repurchase agreements are for a term less than 90 days.

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The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2018: 

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	263,349	$	—	$	263,349	$	70,322	$	99,199	$	93,828
Total derivatives, subject to a master netting arrangement or similar arrangement	263,349		—		263,349		70,322		99,199		93,828
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	7,072		—		7,072		—		—		7,072
Embedded derivative - GLWB	105,272		—		105,272		—		—		105,272
Other	136		—		136		—		—		136
Total derivatives, not subject to a master netting arrangement or similar arrangement	112,480		—		112,480		—		—		112,480
Total derivatives	375,829		—		375,829		70,322		99,199		206,308
Total Assets	$	375,829	$	—	$	375,829	$	70,322	$	99,199	$	206,308

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	125,519	$	—	$	125,519	$	70,322	$	47,856	$	7,341
Total derivatives, subject to a master netting arrangement or similar arrangement	125,519		—		125,519		70,322		47,856		7,341
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	32,828		—		32,828		—		—		32,828
Embedded derivative - GLWB	289,343		—		289,343		—		—		289,343
Embedded derivative - FIA	217,288		—		217,288		—		—		217,288
Embedded derivative - IUL	90,231		—		90,231		—		—		90,231
Other	252		—		252		—		—		252
Total derivatives, not subject to a master netting arrangement or similar arrangement	629,942		—		629,942		—		—		629,942
Total derivatives	755,461		—		755,461		70,322		47,856		637,283
Repurchase agreements(1)	418,090		—		418,090		—		—		418,090
Total Liabilities	$	1,173,551	$	—	$	1,173,551	$	70,322	$	47,856	$	1,055,373
(1) Borrowings under repurchase agreements are for a term less than 90 days.

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9.MORTGAGE LOANS

Mortgage Loans

The Company invests a portion of its investment portfolio in commercial mortgage loans. As of March 31, 2019, the Company’s mortgage loan holdings were approximately $7.7 billion. The Company has specialized in making loans on credit-oriented commercial properties, credit-anchored strip shopping centers, senior living facilities, and apartments. The Company’s underwriting procedures relative to its commercial loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company’s mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition.

The Company’s commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts and prepayment fees are reported in net investment income.

Certain of the mortgage loans have call options that occur within the next 10 years. However, if interest rates were to significantly increase, the Company may be unable to exercise the call options on its existing mortgage loans commensurate with the significantly increased market rates. As of March 31, 2019, assuming the loans are called at their next call dates, approximately $77.7 million of principal would become due for the remainder of 2019, $837.4 million in 2020 through 2024 and $60.6 million in 2025 through 2029.

The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of March 31, 2019 and December 31, 2018, approximately $727.8 million and $700.6 million, respectively, of the Company’s total mortgage loans principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three months ended March 31, 2019 and 2018, the Company recognized $2.2 million and $7.3 million, respectively, of participating mortgage loan income.

As of March 31, 2019, the Company’s invested assets consisted of an immaterial amount of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the three months ended March 31, 2019, two mortgage loan transactions occurred that were accounted for as troubled debt restructurings as a result of granting concessions to a borrower. These concessions were each the result of an agreement between the creditor and the debtor and resulted in the Company accepting an amount less than the outstanding principal balance of $2.7 million in satisfaction of the borrower’s obligation. During the three months ended March 31, 2019, the Company did not recognize any mortgage loans that were foreclosed and were converted to real estate properties. The Company did not identify any loans whose principal was permanently impaired during the three months ended March 31, 2019.

As of March 31, 2019 and December 31, 2018, the Company had an allowance for mortgage loan credit losses of $1.9 million and $1.3 million, respectively. Due to the Company’s loss experience and nature of the loan portfolio, the Company believes that a collectively evaluated allowance would be inappropriate. The Company believes an allowance calculated through an analysis of specific loans that are believed to have a higher risk of credit impairment provides a more accurate presentation of expected losses in the portfolio and is consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Since the Company uses the specific identification method for calculating the allowance, it is necessary to review the economic situation of each borrower to determine those that have higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assesses the risk of each loan. When issues are identified, the severity of the issues are assessed and reviewed for possible credit impairment. If a loss is probable, an expected loss calculation is performed and an allowance is established for that loan based on the expected loss. The expected loss is calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan may be subsequently charged off at such point that the Company no longer expects to receive cash payments, the present value of future expected payments of the renegotiated loan is less than the current principal balance, or at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan.

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A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property.

	As of March 31, 2019			As of December 31, 2018
	(Dollars In Thousands)
Beginning balance	$	1,296		$	—
Charge offs	(350		)	—
Recoveries	—			(209		)
Provision	1,000			1,505
Ending balance	$	1,946		$	1,296

It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company’s general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status. An analysis of the delinquent loans is shown in the following chart.

					Greater
	30-59 Days		60-89 Days		than 90 Days		Total
As of March 31, 2019	Delinquent		Delinquent		Delinquent		Delinquent
	(Dollars In Thousands)
Commercial mortgage loans	$	637	$	—	$	83	$	720
Number of delinquent commercial mortgage loans	2		—		1		3
As of December 31, 2018
Commercial mortgage loans	$	1,044	$	—	$	1,234	$	2,278
Number of delinquent commercial mortgage loans	4		—		1		5

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     The Company’s commercial mortgage loan portfolio consists of mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on impaired loans to 90 days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
	(Dollars In Thousands)
As of March 31, 2019
Commercial mortgage loans:
With no related allowance recorded	$	83	$	83	$	—	$	83	$	—	$	—
With an allowance recorded	$	8,331	$	8,196	$	1,946	$	4,165	$	128	$	156
As of December 31, 2018
Commercial mortgage loans:
With no related allowance recorded	$	—	$	—	$	—	$	—	$	—	$	—
With an allowance recorded	$	5,684	$	5,309	$	1,296	$	1,895	$	267	$	293

     Mortgage loans that were modified in a troubled debt restructuring as of March 31, 2019 and December 31, 2018 were as follows:

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(Dollars In Thousands)
As of March 31, 2019
Troubled debt restructuring:
Commercial mortgage loans	—	$	—	$	—
As of December 31, 2018
Troubled debt restructuring:
Commercial mortgage loans	1	$	2,688	$	1,742

10.GOODWILL

The balance of goodwill for the Company as of March 31, 2019 was $825.5 million. There has been no change to goodwill during the three months ended March 31, 2019.

Accounting for goodwill requires an estimate of the future profitability of the associated lines of business to assess the recoverability of the capitalized acquisition goodwill. The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If it is determined that it is more likely than not that impairment exists, the Company compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions.

The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. During the fourth quarter of 2018, the Company performed its annual qualitative evaluation of goodwill based on the circumstances that existed as of October 1, 2018 and determined that there was

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no indication that its segment goodwill was more likely than not impaired and no adjustment to impair goodwill was necessary. The Company has assessed whether events have occurred subsequent to October 1, 2018 that would impact the Company’s conclusion and no such events were identified. After consideration of applicable factors and circumstances noted as part of the annual assessment, the Company determined that no triggering events had occurred and it was more likely than not that the increase in the fair value of the reporting unit would exceed the increase in the carrying value of the reporting units.

During the three months ended March 31, 2019, the Company did not identify any events or circumstances which would indicate that the fair value of its operating segments would have declined below their book value, either individually or in the aggregate.

11.    DEBT AND OTHER OBLIGATIONS

Debt and Subordinated Debt

Debt and subordinated debt are summarized as follows:

	As of
	March 31, 2019				December 31, 2018
	Outstanding Principal		Carrying Amounts		Outstanding Principal		Carrying Amounts
	(Dollars In Thousands)
Debt (year of issue):
Credit Facility	$	—	$	—	$	—	$	—
Capital lease obligation	2,794		2,794		1,319		1,319
7.375% Senior Notes (2009), due 2019	400,000		411,562		400,000		416,469
8.45% Senior Notes (2009), due 2039	180,719		273,713		190,044		288,547
4.30% Senior Notes (2018), due 2028	400,000		395,603		400,000		395,492
	$	983,513	$	1,083,672	$	991,363	$	1,101,827
Subordinated debt (year of issue):
5.35% Subordinated Debentures (2017), due 2052	$	500,000	$	495,460	$	500,000	$	495,426
3.55% Subordinated Funding Obligations (2018), due 2038	55,000		55,000		55,000		55,000
3.55% Subordinated Funding Obligations (2018), due 2038	55,000		55,000		55,000		55,000
	$	610,000	$	605,460	$	610,000	$	605,426

During the three months ended March 31, 2019, the Company repurchased and subsequently extinguished $14.1 million (par value - $9.3 million) of the Company’s 8.45% Senior Notes due 2039. These repurchases resulted in a $1.1 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated condensed statements of income.

During 2018, PLICO issued $110.0 million of Subordinated Funding Obligations at a rate of 3.55% due 2038. These obligations are non-recourse to the Company.

During 2018, the Company issued $400.0 million of its Senior Notes at a rate of 4.30%, due 2028. These notes were issued net of a discount of $1.0 million. These notes are carried on the Company’s balance sheet net of the discount and the associated deferred issuance expenses of $3.7 million. The Company used the net proceeds from the offering for general corporate purposes, including the repayment of amounts outstanding under our Credit Facility.

Under a revolving line of credit arrangement that was in effect until May 3, 2018 (the “2015 Credit Facility”), the Company had the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company had the right in certain circumstances to request that the commitment under the 2015 Credit Facility be increased up to a maximum principal amount of $1.25 billion. Balances outstanding under the 2015 Credit Facility accrued interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of the Company’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s Prime rate, (y) 0.50% above the Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of the Company’s Senior Debt. The 2015 Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company’s Senior Debt and that is calculated on the aggregate amount of commitments under the 2015 Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The 2015 Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, under the 2015 Credit Facility. The maturity date of the 2015 Credit Facility was February 2, 2020.

On May 3, 2018, the Company amended the 2015 Credit Facility (as amended, the "Credit Facility"). Under the Credit Facility, the Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a

43

maximum principal amount of $1.5 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of the Company’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s Prime rate, (y) 0.50% above the Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of the Company’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, under the Credit Facility. The maturity date of the Credit Facility is May 3, 2023. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of March 31, 2019. There was no outstanding balance as of March 31, 2019.

Non-RecourseFunding Obligations

Non-recourse funding obligations outstanding as of March 31, 2019, on a consolidated basis, are shown in the following table:

Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,843,000	$	1,843,000	2039	4.75	%
Golden Gate II Captive Insurance Company	20,600		17,717		2052	5.60	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	685,000		743,981		2037	5.12	%
MONY Life Insurance Company(3)	1,091		2,323		2024	6.19	%
Total	$	2,549,691	$	2,607,021
(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO.
(3)  Fixed rate obligations

Non-recourse funding obligations outstanding as of December 31, 2018, on a consolidated basis, are shown in the following table:

Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,883,000	$	1,883,000	2039	4.75	%
Golden Gate II Captive Insurance Company	20,600		17,703		2052	4.99	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	670,000		729,454		2037	5.12	%
MONY Life Insurance Company(3)	1,091		2,340		2024	6.19	%
Total	$	2,574,691	$	2,632,497
(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO.
(3)  Fixed rate obligations

Secured Financing Transactions

Repurchase Program Borrowings

While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is

44

monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of March 31, 2019, the fair value of securities pledged under the repurchase program was $92.9 million, and the repurchase obligation of $89.3 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 254 basis points). During the three months ended March 31, 2019, the maximum balance outstanding at any one point in time related to these programs was $473.3 million. The average daily balance was $203.1 million (at an average borrowing rate of 249 basis points) during the three months ended March 31, 2019. As of December 31, 2018, the fair value of securities pledged under the repurchase program was $451.9 million, and the repurchase obligation of $418.1 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 245 basis points). During 2018, the maximum balance outstanding at any one point in time related to these programs was $885.0 million. The average daily balance was $511.4 million (at an average borrowing rate of 184 basis points) during the year ended December 31, 2018.

Securities Lending

The Company participates in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. The Company requires initial collateral of 102% of the fair value of the loaned securities to be separately maintained. The loaned securities’ fair value is monitored on a daily basis. As of March 31, 2019, securities with a fair value of $89.0 million were loaned under this program. As collateral for the loaned securities, the Company receives short-term investments, which are recorded in short-term investments with a corresponding liability recorded in secured financing liabilities to account for its obligation to return the collateral. As of March 31, 2019, the fair value of the collateral related to this program was $94.7 million and the Company has an obligation to return $94.7 million of collateral to the securities borrowers.

The following table provides the amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of March 31, 2019 and December 31, 2018:

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of March 31, 2019
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	83,512	$	9,360	$	—	$	—	$	92,872
Total repurchase agreements and repurchase-to-maturity transactions	83,512		9,360		—		—		92,872
Securities lending transactions
Corporate securities	87,234		—		—		—		87,234
Other government related securities	1,755		—		—		—		1,755
Total securities lending transactions	88,989		—		—		—		88,989
Total securities	$	172,501	$	9,360	$	—	$	—	$	181,861

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Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of December 31, 2018
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	433,182	$	18,713	$	—	$	—	$	451,895
Mortgage loans	—		—		—		—		—
Total securities	$	433,182	$	18,713	$	—	$	—	$	451,895
Securities lending transactions
Fixed maturity securities	$	71,285	$	—	$	—	$	—	$	71,285
Equity securities	891		—		—		—		891
Total securities lending transactions	72,176		—		—		—		72,176
Total securities	$	505,358	$	18,713	$	—	$	—	$	524,071

12.    COMMITMENTS AND CONTINGENCIES

The Company has entered into indemnity agreements with each of its current directors other than those that are employees of Dai-ichi Life that provide, among other things and subject to certain limitations, a contractual right to indemnification to the fullest extent permissible under the law. The Company has agreements with certain of its officers providing up to $10 million in indemnification. These obligations are in addition to the customary obligation to indemnify officers and directors contained in the Company’s governance documents.

The Company leases administrative and marketing office space in approximately 17 cities (excluding the home office building), as well as various office equipment. Most leases have terms ranging from one year to ten years. Leases with an initial term of 12 months or less are not recorded on the consolidated condensed balance sheet. The Company accounts for lease components separately from non-lease components (e.g., common area maintenance). Certain of the Company’s lease agreements include options to renew at its discretion. Management has concluded, the Company is not reasonably certain to elect any of these renewal options. The Company will use the interest rates received on its funding agreement backed notes as the collateralized discount rate when calculating the present value of remaining lease payments when the rate implicit in the lease is unavailable. Additionally, the Company previously leased a building contiguous to its home office. The lease was renewed in December 2013 and was extended to December 2018. At the end of the lease term in December 2018, the Company purchased the building for approximately $75 million. The building is recorded in property and equipment on the consolidated condensed balance sheet.

Under the insurance guaranty fund laws in most states, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. From time to time, companies may be asked to contribute amounts beyond prescribed limits. It is possible that the Company could be assessed with respect to product lines not offered by the Company. In addition, legislation may be introduced in various states with respect to guaranty fund assessment laws related to insurance products, including long term care insurance and other specialty products, that increases the cost of future assessments or alters future premium tax offsets received in connection with guaranty fund assessments. The Company cannot predict the amount, nature or timing of any future assessments or legislation, any of which could have a material and adverse impact on the Company’s financial condition or results of operations.

A number of civil jury verdicts have been returned against insurers, broker-dealers, and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive and non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. The financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters.

The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss

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or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures and estimates of reasonably possible losses or range of loss based on such reviews.

Certain of the Company’s insurance subsidiaries, as well as certain other insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including uncertainty as to the legal theory or theories that may give rise to liability, the early stages of the audits being conducted, and uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with certain co-insured policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits reasonably estimable.

Certain of the Company’s subsidiaries are under a targeted multi-state examination with respect to their claims paying practices and their use of the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”) to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed, and substantial legal authority exists to support the position that the prevailing industry practice was lawful. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements. The Company believes that insurance regulators could demand from the Company administrative and/or examination fees relating to the targeted multi-state examination. Based on publicly reported payments by other life insurers, the Company does not believe such fees, if assessed, would have a material effect on its financial statements.

Advance Trust & Life Escrow Services, LTA, as Securities Intermediary of Life Partners Position Holder Trust v. Protective Life Insurance Company, Case No. 2:18-CV-01290, is a putative class action that was filed on August 13, 2018 in the United States District Court for the Northern District of Alabama. Plaintiff alleges that PLICO required policyholders to pay unlawful and excessive cost of insurance charges. Plaintiff seeks to represent all owners of universal life and variable universal life policies issued or administered by PLICO or its predecessors that provide that cost of insurance rates are to be determined based on expectations of future mortality experience. The plaintiff seeks class certification, compensatory damages, pre-judgment and post-judgment interest, costs, and other unspecified relief. The Company is vigorously defending this matter and cannot predict the outcome of or reasonably estimate the possible loss or range of loss that might result from this litigation.

Scottish Re (U.S.), Inc. ("SRUS") was placed in rehabilitation on March 6, 2019 by the State of Delaware. Under the related order, the Insurance Commissioner of the State of Delaware has been appointed the receiver of SRUS and provided with authority to conduct and continue the business of SRUS in the interest of its cedents, creditors, and stockholder. The order was accompanied by an injunction requiring the continued payment of reinsurance premiums to SRUS and temporarily prohibiting cedents, including the Company, from offsetting premiums payable against receivables from SRUS.

As of March 31, 2019, the Company had outstanding claims receivable from SRUS of $13.4 million, and other exposures associated with reinsurance receivables of approximately $106.8 million and statutory reserve credit of approximately $127.2 million. The Company continues to monitor both the financial health of SRUS and the actions of the receiver through discussions with legal counsel and review of publicly available information. However, management does not have access to current information about the assets or capital position of SRUS. Additionally, it is unclear how the rehabilitation process will proceed or whether or to what extent the ultimate outcome of the rehabilitation process will be unfavorable to the Company.

The Company considered whether the accrual of a loss contingency under FASB ASC Topic 450, Contingencies, was appropriate with respect to amounts receivable from SRUS for ceded claims and reserves as of March 31, 2019. Due to the lack of sufficient information to support an analysis of SRUS's financial condition as of March 31, 2019 and uncertainty regarding whether and to what extent the ultimate outcome of the rehabilitation process will result in an outcome unfavorable to the Company, management concluded that any possible impairment of its reinsurance receivables balance could not be reasonably estimated.

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13.    EMPLOYEE BENEFIT PLANS

Components of the net periodic benefit cost for the three months ended March 31, 2019 and 2018, are as follows:

	For The Three Months Ended March 31,
	2019					2018
	Qualified Pension Plan			Nonqualified Excess Pension Plan		Qualified Pension Plan			Nonqualified Excess Pension Plan
	(Dollars In Thousands)
Service cost — benefits earned during the period	$	3,114		$	285	$	3,441		$	387
Interest cost on projected benefit obligation	2,778			371		2,397			359
Expected return on plan assets	(4,463		)	—		(4,026		)	—
Amortization of prior service cost	—					—			—
Amortization of actuarial loss	—			74		—			265
Total net periodic benefit costs	$	1,429		$	730	$	1,812		$	1,011

During the three months ended March 31, 2019, the Company did not make a contribution to its defined benefit pension plan. The Company will make contributions in future periods as necessary to at least satisfy minimum funding requirements, to maintain an adjusted funding target attainment percentage (“AFTAP”) of at least 80% and to avoid certain Pension Benefit Guaranty Corporation (“PBGC”) reporting triggers. The Company may also make additional discretionary contributions in excess of the contribution amounts established by the current funding policy.

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14.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of March 31, 2019 and December 31, 2018.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss  Derivatives			Minimum Pension Liability Adjustment			Total Accumulated Other Comprehensive  Income (Loss)
	(Dollars In Thousands, Net of Tax)
Balance, December 31, 2017	$	25,874		$	747		$	(13,925	)	$	12,696
Other comprehensive income (loss) before reclassifications	(1,420,499		)	(1,884		)	(3,546		)	(1,425,929		)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(20,751		)	—			—			(20,751		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	15,651			1,130			1,989			18,770
Cumulative effect adjustments	(10,552		)	—			—			(10,552		)
Balance, December 31, 2018	$	(1,410,277	)	$	(7	)	$	(15,482	)	$	(1,425,766	)
Other comprehensive income (loss) before reclassifications	1,136,331			(1,966		)	—			1,134,365
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	8,792			—			—			8,792
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(1,560		)	220			—			(1,340		)
Cumulative effect adjustments	—			—			—			—
Balance, March 31, 2019	$	(266,714	)	$	(1,753	)	$	(15,482	)	$	(283,949	)
(1)  See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details.
(2)  As of December 31, 2018 and March 31, 2019, net unrealized losses reported in AOCI were offset by $613.4 million and $199.1 million, respectively, due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

The following tables summarize the reclassifications amounts out of AOCI for the three months ended March 31, 2019 and 2018.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

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	Affected Line Item in the Condensed Consolidated
Gains/(losses) in net income:	Statements of Income	For The Three Months Ended March 31,
		2019			2018
		(Dollars In Thousands)
Derivative instruments	Benefits and settlement expenses, net of reinsurance ceded(1)	$	(278	)	$	(113	)
	Tax (expense) benefit	58			24
		$	(220	)	$	(89	)
Unrealized gains and losses on available-for-sale securities	Realized investment gains (losses): All other investments	$	5,117		$	2,783
	Net impairment losses recognized in earnings	(3,142		)	(3,645		)
	Tax (expense) benefit	(415		)	181
		$	1,560		$	(681	)
(1) See Note 7, Derivative Financial Instruments for additional information.

15.INCOME TAXES

The Company used its respective estimates for its annual 2019 and 2018 incomes in computing its effective income tax rates for the three months ended March 31, 2019 and 2018. The estimates of the annual 2019 and 2018 income excluded unrealized gains and losses on equity securities due to an inability to forecast future gains and losses. The effective tax rates for the three months ended March 31, 2019 and 2018, were 20.9% and 19.3% respectively.

There have been no material changes to the balance of unrecognized tax benefits, where the changes impact earnings, during the quarter ending March 31, 2019. The Company believes that in the next twelve months, none of the unrecognized tax benefits will be reduced.

In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2014. Due to IRS adjustments to the Company's pre-2014 taxable income, the Company has amended certain of its 2003 through 2013 state income tax returns. Such amendments will cause such years to remain open, pending the states' acceptances of the returns.

16.OPERATINGSEGMENTS

The Company has several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. The Company periodically evaluates its operating segments and makes adjustments to its segment reporting as needed. A brief description of each segment follows.

• The Life Marketing segment markets fixed universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”), bank-owned life insurance (“BOLI”), and level premium term insurance (“traditional”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent marketing organizations, and affinity groups.

• The Acquisitions segment focuses on acquiring, converting, and servicing policies and contracts acquired from other companies. The segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. The level of the segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed. Therefore earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made.

• The Annuities segment markets fixed and VA products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers.

• The Stable Value Products segment sells fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. This segment also issues funding agreements to the FHLB, and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. The Company also has an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors.

• The Asset Protection segment markets extended service contracts, guaranteed asset protection (“GAP”) products, credit life and disability insurance, and other specialized ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft, and powersports. GAP products are designed to cover the difference between the scheduled loan pay-off amount and an asset’s actual cash value in the case of a total loss.

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Each type of specialized ancillary product protects against damage or other loss to a particular aspect of the underlying asset.

• The Corporate and Other segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead and expenses not attributable to the segments above (including interest on corporate debt). This segment includes earnings from several non-strategic or runoff lines of business, various financing and investment related transactions, and the operations of several small subsidiaries.

The Company's management and Board of Directors analyzes and assesses the operating performance of each segment using "pre-tax adjusted operating income (loss)" and "after-tax adjusted operating income (loss)". Consistent with GAAP accounting guidance for segment reporting, pre-tax adjusted operating income (loss) is the Company's measure of segment performance. Pre-tax adjusted operating income (loss) is calculated by adjusting "income (loss) before income tax," by excluding the following items:

• realized gains and losses on investments and derivatives,

• changes in the GLWB embedded derivatives exclusive of the portion attributable to the economic cost of the GLWB,

• actual GLWB incurred claims, and

• the amortization of deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”), and certain policy liabilities that is impacted by the exclusion of these items.

The items excluded from adjusted operating income (loss) are important to understanding the overall results of operations. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) are not substitutes for income before income taxes or net income (loss), respectively. These measures may not be comparable to similarly titled measures reported by other companies. The Company believes that pre-tax and after-tax adjusted operating income (loss) enhances management’s and the Board of Directors’ understanding of the ongoing operations, the underlying profitability of each segment, and helps facilitate the allocation of resources.

After-tax adjusted operating income (loss) is derived from pre-tax adjusted operating income (loss) with the inclusion of income tax expense or benefits associated with pre-tax adjusted operating income. Income tax expense or benefits is allocated to the items excluded from pre-tax adjusted operating income (loss) at the statutory federal income tax rate for the associated period. Income tax expense or benefits allocated to after-tax adjusted operating income (loss) can vary period to period based on changes in the Company’s effective income tax rate.

In determining the components of the pre-tax adjusted operating income (loss) for each segment, premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC and VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized investment gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on statutory policy liabilities net of associated statutory policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable.

There were no significant intersegment transactions during the three months ended March 31, 2019 and 2018.

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The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Life Marketing	$	457,340		$	434,916
Acquisitions	609,942			379,094
Annuities	139,217			150,713
Stable Value Products	59,579			53,868
Asset Protection	76,198			76,375
Corporate and Other	71,754			70,866
Total revenues	$	1,414,030		$	1,165,832
Pre-tax Adjusted Operating Income (Loss)
Life Marketing	$	1,234		$	(17,849	)
Acquisitions	74,912			55,520
Annuities	54,216			40,531
Stable Value Products	22,239			29,080
Asset Protection	9,743			6,218
Corporate and Other	(19,674		)	(20,679		)
Pre-tax adjusted operating income	142,670			92,821
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income before income tax	174,915			91,798
Income tax expense	(36,631		)	(17,686		)
Net income	$	138,284		$	74,112
Pre-tax adjusted operating income	$	142,670		$	92,821
Adjusted operating income tax (expense) benefit	(29,859		)	(18,044		)
After-tax adjusted operating income	112,811			74,777
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income tax benefit (expense) on adjustments	(6,772		)	358
Net income	$	138,284		$	74,112
Realized investment (losses) gains:
Derivative financial instruments	$	(119,671	)	$	78,059
All other investments	129,590			(87,599		)
Net impairment losses recognized in earnings	(3,142		)	(3,645		)
Less: related amortization(1)	(4,361		)	9,156
Less: VA GLWB economic cost	(21,107		)	(21,318		)
Realized (losses) gains on investments and derivatives	$	32,245		$	(1,023	)
(1)  Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses).

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	Operating Segment Assets As of March 31, 2019
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	15,038,044	$	31,805,017	$	20,690,159	$	5,401,470
DAC and VOBA	1,496,282		431,788		885,926		5,249
Other intangibles	258,010		32,776		153,452		7,222
Goodwill	215,254		23,862		343,247		113,924
Total assets	$	17,007,590	$	32,293,443	$	22,072,784	$	5,527,865

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	1,025,637	$	14,088,375	$	88,048,702
DAC and VOBA	167,441		—		2,986,686
Other intangibles	120,046		30,097		601,603
Goodwill	129,224		—		825,511
Total assets	$	1,442,348	$	14,118,472	$	92,462,502

	Operating Segment Assets As of December 31, 2018
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	14,575,702	$	31,859,520	$	20,199,597	$	5,107,334
DAC and VOBA	1,499,386		458,977		889,697		6,121
Other intangibles	262,758		31,975		156,785		7,389
Goodwill	215,254		23,862		343,247		113,924
Total assets	$	16,553,100	$	32,374,334	$	21,589,326	$	5,234,768

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	1,019,297	$	12,715,208	$	85,476,658
DAC and VOBA	168,973		—		3,023,154
Other intangibles	122,590		31,934		613,431
Goodwill	129,224		—		825,511
Total assets	$	1,440,084	$	12,747,142	$	89,938,754

17.SUBSEQUENT EVENTS

The Company has evaluated the effects of events subsequent to March 31, 2019, and through the date we filed our consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated condensed financial statements.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our consolidated condensed financial statements included under Part I, Item 1, Financial Statements (Unaudited), of this Quarterly Report on Form 10-Q and our audited consolidated financial statements for the year ended December 31, 2018, included in our most recent Annual Report on Form 10-K.

For a more complete understanding of our business and current period results, please read the following MD&A in conjunction with our latest Annual Report on Form 10-K and other filings with the United States Securities and Exchange Commission (the “SEC”).

Certain reclassifications have been made in the previously reported financial statements and accompanying notes to make the prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity.

FORWARD-LOOKING STATEMENTS — CAUTIONARY LANGUAGE

This report reviews our financial condition and results of operations, including our liquidity and capital resources. Historical information is presented and discussed, and where appropriate, factors that may affect future financial performance are also identified and discussed. Certain statements made in this report include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that may predict, forecast, indicate, or imply future results, performance, or achievements instead of historical facts and may contain words like “believe,” “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “plan,” “will,” “shall,” “may,” and other words, phrases, or expressions with similar meaning. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the results contained in the forward-looking statements, and we cannot give assurances that such statements will prove to be correct. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. For more information about the risks, uncertainties, and other factors that could affect our future results, please refer to Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 1A, Risk Factors, of this report, as well as Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

IMPORTANT INVESTOR INFORMATION

We file reports with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports as required. We are an electronic filer and the SEC maintains an internet site at http://www.sec.gov that contains our annual quarterly and current reports and other information filed electronically by the Company.

We make available through our website, http://www.protective.com, our annual reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such materials are electronically filed with or furnished to the SEC. The information found on our website is not part of this or any other report filed with or furnished to the SEC. We will furnish such documents to anyone who requests such copies in writing. Requests for copies should be directed to: Financial Information, Protective Life Corporation, P. O. Box 2606, Birmingham, Alabama 35202, Telephone (205) 268-3912, Fax (205) 268-3642.

We also make available to the public current information, including financial information, regarding the Company and our affiliates on the Financial Information page of our website, www.protective.com. We encourage investors, the media and others interested in us and our affiliates to review the information we post on our website. The information found on our website is not part of this or any other report filed with or furnished to the SEC.

OVERVIEW

On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc., a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company (the “Merger”). Prior to February 1, 2015, our stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, we remain an SEC registrant for financial reporting purposes in the United States. The Company, which is headquartered in Birmingham, Alabama, operates as a holding company for its insurance and other subsidiaries that provide financial services primarily in the United States through the production, distribution, and administration of insurance and investment products. Founded in 1907, Protective Life Insurance Company (“PLICO”) is our largest operating subsidiary. Unless the context otherwise requires, the “Company,” “we,” “us,” or “our” refers to the consolidated group of Protective Life Corporation and our subsidiaries.

We have several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. We periodically evaluate our operating segments and make adjustments to our segment reporting as needed.

Our operating segments are Life Marketing, Acquisitions, Annuities, Stable Value Products, and Asset Protection. We have an additional reporting segment referred to as Corporate and Other.

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• Life Marketing—We market fixed universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”), bank-owned life insurance (“BOLI”), and level premium term insurance (“traditional”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent distribution organizations, and affinity groups.

• Acquisitions—We focus on acquiring, converting, and/or servicing policies and contracts from other companies. This segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. The level of the segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed. Therefore earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made.

• Annuities—We market fixed and variable annuity (“VA”) products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers.

• Stable Value Products—We sell fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. The segment also issues funding agreements to the Federal Home Loan Bank (“FHLB”), and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. We also have an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors.

• Asset Protection—We market extended service contracts, guaranteed asset protection (“GAP”) products, credit life and disability insurance, and other specialized ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft, and powersports. GAP products are designed to cover the difference between the scheduled loan pay-off amount and an asset’s actual cash value in the case of a total loss. Each type of specialized ancillary product protects against damage or other loss to a particular aspect of the underlying asset.

• Corporate and Other—This segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead, and expenses not attributable to the segments above (including interest on corporate debt). This segment includes earnings from several non-strategic or runoff lines of business, financing and investment related transactions, and the operations of several small subsidiaries.

RECENT SIGNIFICANT TRANSACTIONS

Great-West Life & Annuity Insurance Company

On January 23, 2019, PLICO entered into a Master Transaction Agreement (the “ GWL&A Master Transaction Agreement”) with Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (“GWL&A of NY”), The Canada Life Assurance Company (“CLAC”) and The Great-West Life Assurance Company (“GWL” and, together with GWL&A, GWL&A of NY and CLAC, the “Sellers”), pursuant to which PLICO will acquire via reinsurance (the “Transaction”) substantially all of the Sellers’ individual life insurance and annuity business (the “Individual Life Business”). Pursuant to the GWL&A Master Transaction Agreement, PLICO and Protective Life and Annuity Insurance Company (“PLAIC”), will enter into reinsurance agreements (the “GWL&A Reinsurance Agreements”) and related ancillary documents at the closing of the Transaction. On the terms and subject to the conditions of the GWL&A Reinsurance Agreements, the Sellers will cede to PLICO and PLAIC, effective as of the closing of the Transaction, substantially all of the insurance policies relating to the Individual Life Business. To support its obligations under the GWL&A Reinsurance Agreements, PLICO will establish trust accounts for the benefit of GWL&A, CLAC and GWL, and PLAIC will establish a trust account for the benefit of GWL&A of NY. The Sellers will retain a block of participating policies, which will be administered by the Company.

The Transaction is subject to the satisfaction or waiver of customary closing conditions, including regulatory approvals and the execution of the GWL&A Reinsurance Agreements and related ancillary documents. The GWL&A Master Transaction Agreement and other transaction documents contain certain customary representations and warranties made by each of the parties, and certain customary covenants regarding the Sellers and the Individual Life Business, and provide for indemnification, among other things, for breaches of those representations, warranties and covenants.

RISKS AND UNCERTAINTIES

The factors which could affect our future results include, but are not limited to, general economic conditions and the following risks and uncertainties:

General

• we are controlled by Dai-ichi Life, which has the ability to make important decisions affecting our business;

• exposure to risks related to natural and man-made disasters and catastrophes, such as diseases, epidemics, pandemics, malicious acts, cyber attacks, terrorist acts, and climate change, which could adversely affect our operations and results;

• a disruption or cyber attack affecting the electronic, communication and information technology systems or other technologies of the Company or those on whom the Company relies could adversely affect our business, financial condition, and results of operations;

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• confidential information maintained in the systems of the Company or other parties upon which we rely could be compromised or misappropriated as a result of security breaches or other related lapses or incidents, damaging our business and reputation and adversely affecting our financial condition and results of operations;

• our results and financial condition may be negatively affected should actual experience differ from management’s models, assumptions, or estimates;

• we may not realize our anticipated financial results from our acquisitions strategy;

• we may experience competition in our acquisition segment;

• assets allocated to the MONY Closed Block benefit only the holders of certain policies; adverse performance of Closed Block assets or adverse experience of Closed Block liabilities may negatively affect us;

• we are dependent on the performance of others;

• our risk management policies, practices, and procedures could leave us exposed to unidentified or unanticipated risks, which could negatively affect our business or result in losses;

• our strategies for mitigating risks arising from our day-to-day operations may prove ineffective resulting in a material adverse effect on our results of operations and financial condition;

• events that damage our reputation or the reputation of our industry could adversely impact our business, results of operations, or financial condition;

• we may not be able to protect our intellectual property and may be subject to infringement claims;

• developments in technology may impact our business;

Financial Environment

• interest rate fluctuations and sustained periods of low or high interest rates could negatively affect our interest earnings and spread income, or otherwise impact our business;

• our investments are subject to market and credit risks, which could be heightened during periods of extreme volatility or disruption in financial and credit markets;

• credit market volatility or disruption could adversely impact the Company’s financial condition or results from operations;

• disruption of the capital and credit markets could negatively affect the Company’s ability to meet its liquidity and financial needs;

• equity market volatility could negatively impact our business;

• our use of derivative financial instruments within our risk management strategy may not be effective or sufficient;

• our ability to grow depends in large part upon the continued availability of capital;

• we could be forced to sell investments at a loss to cover policyholder withdrawals;

• difficult general economic conditions could materially adversely affect our business and results of operations;

• we may be required to establish a valuation allowance against our deferred tax assets, which could have a material adverse effect on our results of operations, financial condition, and capital position;

• we could be adversely affected by an inability to access our credit facility;

• the amount of statutory capital or risk-based capital that we have and the amount of statutory capital or risk-based capital that we must hold to maintain our financial strength and credit ratings and meet other requirements can vary significantly from time to time and is sensitive to a number of factors outside of our control;

• we could be adversely affected by a ratings downgrade or other negative action by a rating organization;

• we operate as a holding company and depend on the ability of our subsidiaries to transfer funds to us to meet our obligations;

• we could be adversely affected by an inability to access FHLB lending;

• our securities lending program may subject us to liquidity and other risks;

• our financial condition or results of operations could be adversely impacted if our assumptions regarding the fair value and future performance of our investments differ from actual experience;

• adverse actions of certain funds or their advisers could have a detrimental impact on our ability to sell our variable life and annuity products, or maintain current levels of assets in those products;

Industry and Regulation

• the business of our company is highly regulated and is subject to routine audits, examinations, and actions by regulators, law enforcement agencies, and self-regulatory organizations;

• we may be subject to regulations of, or regulations influenced by, international regulatory authorities or initiatives;

• NAIC actions, pronouncements and initiatives may affect our product profitability, reserve and capital requirements, financial condition or results of operations;

• our use of captive reinsurance companies to finance statutory reserves related to our term and universal life products and to reduce volatility affecting our variable annuity products, may be limited or adversely affected by regulatory action, pronouncements and interpretations;

• laws, regulations and initiatives related to unreported deaths and unclaimed property and death benefits may result in operational burdens, fines, unexpected payments or escheatments;

• we are subject to insurance guaranty fund laws, rules and regulations that could adversely affect our financial condition or results of operations;

• we are subject to insurable interest laws, rules and regulations that could adversely affect our financial condition or results of operations;

• the Healthcare Act and related regulations could adversely affect our results of operations or financial condition;

• laws, rules and regulations promulgated in connection with the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act may adversely affect our results of operations or financial condition;

• new and amended regulations regarding the standard of care or standard of conduct applicable to investment professionals, insurance agencies, and financial institutions that recommend or sell annuities or life insurance products

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may have a material adverse impact on our ability to sell annuities and other products and to retain in-force business and on our financial condition or results of operations;

• we may be subject to regulation, investigations, enforcement actions, fines and penalties imposed by the SEC, FINRA and other federal and international regulators in connection with our business operations;

• changes to tax law, or interpretations of existing tax law could adversely affect our ability to compete with non-insurance products or reduce the demand for certain insurance products;

• financial services companies are frequently the targets of legal proceedings, including class action litigation, which could result in substantial judgments;

• the financial services and insurance industries are sometimes the target of law enforcement investigations and the focus of increased regulatory scrutiny;

• new accounting rules, changes to existing accounting rules, or the grant of permitted accounting practices to competitors could negatively impact us;

• if our business does not perform well, we may be required to recognize an impairment of our goodwill and indefinite lived intangible assets which could adversely affect our results of operations or financial condition;

• use of reinsurance introduces variability in our statements of income;

• our reinsurers could fail to meet assumed obligations, increase rates, terminate agreements or be subject to adverse developments that could affect us;

• our policy claims fluctuate from period to period resulting in earnings volatility;

• we operate in a mature, highly competitive industry, which could limit our ability to gain or maintain our position in the industry and negatively affect profitability; and

• our ability to maintain competitive unit costs is dependent upon the level of new sales and persistency of existing business.

For more information about the risks, uncertainties, and other factors that could affect our future results, please see Part II, Item 1A of this report and our Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES

Our accounting policies require the use of judgments relating to a variety of assumptions and estimates, including, but not limited to expectations of current and future mortality, morbidity, persistency, expenses, and interest rates, as well as expectations around the valuations of securities. Because of the inherent uncertainty when using the assumptions and estimates, the effect of certain accounting policies under different conditions or assumptions could be materially different from those reported in the consolidated condensed financial statements. For a complete listing of our critical accounting policies, refer to our Annual Report on Form 10-K for the year ended December 31, 2018.

RESULTS OF OPERATIONS

Our management and Board of Directors analyzes and assesses the operating performance of each segment using "pre-tax adjusted operating income (loss)" and "after-tax adjusted operating income (loss)". Consistent with GAAP accounting guidance for segment reporting, pre-tax adjusted operating income (loss) is our measure of segment performance. Pre-tax adjusted operating income (loss) is calculated by adjusting "income (loss) before income tax," by excluding the following items:

• realized gains and losses on investments and derivatives,

• changes in the guaranteed living withdrawal benefits (“GLWB”) embedded derivatives exclusive of the portion attributable to the economic cost of the GLWB,

• actual GLWB incurred claims, and

• the amortization of deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”), and certain policy liabilities that is impacted by the exclusion of these items.

After-tax adjusted operating income (loss) is derived from pre-tax adjusted operating income (loss) with the inclusion of income tax expense or benefits associated with pre-tax adjusted operating income. Income tax expense or benefits is allocated to the items excluded from pre-tax adjusted operating income (loss) at the statutory federal income tax rate for the associated period. Income tax expense or benefits allocated to after-tax adjusted operating income (loss) can vary period to period based on changes in our effective income tax rate.

The items excluded from adjusted operating income (loss) are important to understanding the overall results of operations. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) are not substitutes for income before income taxes or net income (loss), respectively. These measures may not be comparable to similarly titled measures reported by other companies. Our belief is that pre-tax and after-tax adjusted operating income (loss) enhances management’s and the Board of Directors’ understanding of the ongoing operations, the underlying profitability of each segment, and helps facilitate the allocation of resources.

In determining the components of the pre-tax adjusted operating income (loss) for each segment, premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC and VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized investment gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on policy liabilities net of associated policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable.

We periodically review and update as appropriate our key assumptions used to measure certain balances related to insurance products, including future mortality, expenses, lapses, premium persistency, benefit utilization, investment yields, interest

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rates, and separate account fund returns. Changes to these assumptions result in adjustments which increase or decrease DAC and VOBA amortization and/or benefits and expenses. Assumptions may be updated as part of our annual assumption review process, as well as during our quarterly update of historical business activity. This periodic review and updating of assumptions is collectively referred to as “unlocking.” When referring to unlocking the reference is to changes in all balance sheet components associated with these changes. The adjustments associated with unlocking can create significant variability from period to period in the profitability of certain of the Company’s operating segments.

The following table presents a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Pre-tax Adjusted Operating Income (Loss)
Life Marketing	$	1,234		$	(17,849	)
Acquisitions	74,912			55,520
Annuities	54,216			40,531
Stable Value Products	22,239			29,080
Asset Protection	9,743			6,218
Corporate and Other	(19,674		)	(20,679		)
Pre-tax adjusted operating income	142,670			92,821
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income before income tax	174,915			91,798
Income tax expense	(36,631		)	(17,686		)
Net income	$	138,284		$	74,112
Pre-tax adjusted operating income	$	142,670		$	92,821
Adjusted operating income tax (expense) benefit	(29,859		)	(18,044		)
After-tax adjusted operating income	112,811			74,777
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income tax benefit (expense) on adjustments	(6,772		)	358
Net income	$	138,284		$	74,112
Realized investment (losses) gains:
Derivative financial instruments	$	(119,671	)	$	78,059
All other investments	129,590			(87,599		)
Net impairment losses recognized in earnings	(3,142		)	(3,645		)
Less: related amortization(1)	(4,361		)	9,156
Less: VA GLWB economic cost	(21,107		)	(21,318		)
Realized (losses) gains on investments and derivatives	$	32,245		$	(1,023	)
(1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses).

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Net income for the three months ended March 31, 2019 was $138.3 million, an increase of $64.2 million. Pre-tax adjusted operating income was $142.7 million, an increase of $49.8 million. The increase consisted of a $19.1 million increase in the Life Marketing segment, a $19.4 million increase in the Acquisitions segment, a $13.7 million increase in the Annuities segment, a $3.5 million increase in the Asset Protection segment, and a $1.0 million increase in the Corporate and Other segment. These increases were partially offset by a $6.8 million decrease in the Stable Value Products segment.

Net realized gains on investments and derivatives for the three months ended March 31, 2019 was $32.2 million as compared to net realized losses of $1.0 million for the three months ended March 31, 2018.

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• Life Marketing segment pre-tax adjusted operating income was $1.2 million for the three months ended March 31, 2019, representing an increase of $19.1 million from the three months ended March 31, 2018. The increase was primarily due to lower claims and higher premiums in the traditional life block. Traditional life claims were approximately $5.9 million lower for the three months ended March 31, 2019 when compared to three months ended March 31, 2018.

• Acquisitions segment pre-tax adjusted operating income was $74.9 million for the three months ended March 31, 2019, an increase of $19.4 million as compared to the three months ended March 31, 2018, primarily due to the favorable impact of $19.8 million from the Liberty reinsurance transaction completed on May 1, 2018, partly offset by the expected runoff of the in-force blocks of business.

• Annuities segment pre-tax adjusted operating income was $54.2 million for the three months ended March 31, 2019, as compared to $40.5 million for the three months ended March 31, 2018, an increase of $13.7 million, or 33.8%. This variance was primarily the result of favorable unlocking, increased interest spreads, and a favorable change in guaranteed benefit reserves, partially offset by a decline in variable annuity (“VA”) fee income. Segment results were positively impacted by $7.7 million of favorable unlocking for the three months ended March 31, 2019, as compared to $5.2 million of unfavorable unlocking for the three months ended March 31, 2018.

• Stable Value segment pre-tax adjusted operating income was $22.2 million and decreased $6.8 million, or 23.5%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The decrease in pre-tax adjusted operating income primarily resulted from lower participating mortgage income in addition to lower interest spreads driven by higher credited rates on newly issued contracts. Participating mortgage income for the three months ended March 31, 2019, was $0.8 million as compared to $6.9 million for the three months ended March 31, 2018. The adjusted operating spread, which excludes participating income, decreased by 30 basis points for the three months ended March 31, 2019, from the prior year, due primarily to an increase in credited interest.

• Asset Protection segment pre-tax adjusted operating income was $9.7 million, representing an increase of $3.5 million, or 56.7%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. Earnings from the GAP product line increased $2.7 million due to lower loss ratios. Service contract earnings increased $0.5 million primarily due to higher investment income. The credit insurance product line increased $0.3 million primarily due to lower expenses.

• The Corporate and Other segment pre-tax adjusted operating loss was $19.7 million for the three months ended March 31, 2019, as compared to a pre-tax adjusted operating loss of $20.7 million for the three months ended March 31, 2018. The decreased operating loss was primarily due to an increase in investment income due to higher invested asset balances, partially offset by increased interest expense.

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Life Marketing

Segment Results of Operations

Segment results were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	488,105		$	487,950
Reinsurance ceded	(208,409		)	(220,022		)
Net premiums and policy fees	279,696			267,928
Net investment income	141,219			135,356
Other income	30,980			31,909
Total operating revenues	451,895			435,193
Realized investment gains (losses)	5,445			(277		)
Total revenues	457,340			434,916
BENEFITS AND EXPENSES
Benefits and settlement expenses	369,096			361,151
Amortization of DAC/VOBA	32,019			31,654
Other operating expenses	49,546			60,237
Operating benefits and settlement expenses	450,661			453,042
Amortization related to benefits and settlement expenses	172			3,418
Amortization of DAC/VOBA related to realized gains (losses) - investments	1,348			(94		)
Total benefits and expenses	452,181			456,366
INCOME (LOSS) BEFORE INCOME TAX	5,159			(21,450		)
Less: realized gains (losses)	5,445			(277		)
Less: amortization related to benefits and settlement expenses	(172		)	(3,418		)
Less: related amortization of DAC/VOBA	(1,348		)	94
PRE-TAX ADJUSTED OPERATING INCOME (LOSS)	$	1,234		$	(17,849	)

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The following table summarizes key data for the Life Marketing segment:

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Sales By Product(1)
Traditional life	$	14,145	$	12,592
Universal life	28,097		29,759
	$	42,242	$	42,351
Sales By Distribution Channel
Traditional brokerage	$	27,279	$	33,810
Institutional	12,865		6,310
Direct	2,098		2,231
	$	42,242	$	42,351
Average Life Insurance In-force(2)
Traditional	$	357,069,540	$	345,308,377
Universal life	285,422,652		272,872,804
	$	642,492,192	$	618,181,181
Average Account Values
Universal life	$	7,794,474	$	7,716,915
Variable universal life	743,377		767,121
	$	8,537,851	$	8,484,036
(1) Sales data for traditional life insurance is based on annualized premiums. Universal life sales are based on annualized planned premiums, or “target” premiums if lesser, plus 6% of amounts received in excess of target premiums and 10% of single premiums. “Target” premiums for universal life are those premiums upon which full first year commissions are paid.
(2) Amounts are not adjusted for reinsurance ceded.

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Operating expenses detail

Other operating expenses for the segment were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Insurance companies:
First year commissions	$	44,072		$	48,352
Renewal commissions	9,928			9,829
First year ceding allowances	(171		)	(132		)
Renewal ceding allowances	(44,957		)	(34,775		)
General & administrative	55,484			55,865
Taxes, licenses, and fees	9,838			10,546
Other operating expenses incurred	74,194			89,685
Less: commissions, allowances & expenses capitalized	(57,582		)	(63,163		)
Other insurance company operating expenses	16,612			26,522
Distribution companies:
Commissions	23,713			23,353
Other operating expenses	9,221			10,362
Other distribution company operating expenses	32,934			33,715
Other operating expenses	$	49,546		$	60,237

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Pre-tax adjusted operating income (loss)

Pre-tax adjusted operating income was $1.2 million for the three months ended March 31, 2019, representing an increase of $19.1 million from the three months ended March 31, 2018. The increase was primarily due to lower claims and higher premiums in the traditional life block. Traditional life claims were approximately $5.9 million lower for the three months ended March 31, 2019 when compared to the three months ended March 31, 2018.

Operating revenues

Total operating revenues for the three months ended March 31, 2019, increased $16.7 million, or 3.8%, as compared to the three months ended March 31, 2018. This increase was driven by higher traditional life premiums for the three months ended March 31, 2019 when compared to the three months ended March 31, 2018. Additionally, investment income increased $5.9 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, driven by higher universal life investment income of $3.7 million, due to growth in reserves in the block, and higher distribution company investment income of $2.1 million.

Net premiums and policy fees

Net premiums and policy fees increased by $11.8 million, or 4.4%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, due to higher traditional life net premium for the three months ended March 31, 2019 when compared to the three months ended March 31, 2018.

Net investment income

Net investment income in the segment increased $5.9 million, or 4.3%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, driven by higher universal life investment income of $3.7 million, due to growth in reserves in the block, and higher distribution company investment income of $2.1 million.

Other income

Other income decreased $0.9 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018 due to lower revenue in the segment’s non-insurance operations.

Benefits and settlement expenses

Benefits and settlement expenses increased by $7.9 million, or 2.2%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, driven by an increase in universal life reserves, partly offset by unlocking.

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For the three months ended March 31, 2019, universal life unlocking decreased policy benefits and settlement expenses $3.1 million, as compared to an increase of $3.8 million for the three months ended March 31, 2018.

Amortization of DAC/VOBA

DAC/VOBA amortization increased $0.4 million, or 1.2%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, due to higher amortization mostly offset by unlocking in the universal life block. For the three months ended March 31, 2019, universal life unlocking decreased amortization $1.5 million, as compared to an increase of $4.2 million for the three months ended March 31, 2018.

Other operating expenses

Other operating expenses decreased $10.7 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. This decrease was primarily driven by higher ceding allowances and lower commissions, offset by higher new business costs after capitalization.

Sales

Sales for the segment decreased $0.1 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to lower sales in the universal life block, offset by higher traditional life sales. The change between products was due to a shift in sales focus from a product within the universal life block to a new term life product.

Reinsurance

Currently, the Life Marketing segment reinsures significant amounts of its life insurance in-force. Pursuant to the underlying reinsurance contracts, reinsurers pay allowances to the segment as a percentage of both first year and renewal premiums. Reinsurance allowances represent the amount the reinsurer is willing to pay for reimbursement of acquisition costs incurred by the direct writer of the business. A portion of reinsurance allowances received is deferred as part of DAC and a portion is recognized immediately as a reduction of other operating expenses. As the non-deferred portion of allowances reduces operating expenses in the period received, these amounts represent a net increase to adjusted operating income during that period.

Reinsurance allowances do not affect the methodology used to amortize DAC or the period over which such DAC is amortized. However, they do affect the amounts recognized as DAC amortization. DAC on universal life-type, limited-payment long duration, and investment contracts business is amortized based on the estimated gross profits of the policies in-force. Reinsurance allowances are considered in the determination of estimated gross profits, and therefore, impact DAC amortization on these lines of business. Deferred reinsurance allowances on level term business are recorded as ceded DAC, which is amortized over estimated ceded premiums of the policies in-force. Thus, deferred reinsurance allowances may impact DAC amortization. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

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Impact of reinsurance

Reinsurance impacted the Life Marketing segment line items as shown in the following table:

Life Marketing Segment

Line Item Impact of Reinsurance

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(208,409	)	$	(220,022	)
BENEFITS AND EXPENSES
Benefits and settlement expenses	(168,095		)	(233,138		)
Amortization of DAC/VOBA	(1,165		)	(1,323		)
Other operating expenses(1)	(43,418		)	(33,476		)
Total benefits and expenses	(212,678		)	(267,937		)
NET IMPACT OF REINSURANCE	$	4,269		$	47,915
Allowances received	$	(45,128	)	$	(34,908	)
Less: Amount deferred	1,710			1,432
Allowances recognized (ceded other operating expenses)(1)	$	(43,418	)	$	(33,476	)
(1)  Other operating expenses ceded per the income statement are equal to reinsurance allowances recognized after capitalization.

The table above does not reflect the impact of reinsurance on our net investment income. By ceding business to the assuming companies, we forgo investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed, which will increase the assuming companies’ profitability on the business that we cede. The net investment income impact to us and the assuming companies has not been quantified. The impact of including foregone investment income would be to substantially reduce the favorable net impact of reinsurance reflected above. We estimate that the impact of foregone investment income would be to reduce the net impact of reinsurance presented in the table above by 265% to 308%. The Life Marketing segment’s reinsurance programs do not materially impact the other income line of our income statement.

As shown above, reinsurance generally has a favorable impact on the Life Marketing segment’s operating income results. The impact of reinsurance is largely due to our quota share coinsurance program in place prior to mid-2005. Under that program, generally 90% of the segment’s traditional new business was ceded to reinsurers. Since mid-2005, a much smaller percentage of overall term business has been ceded due to a change in reinsurance strategy on traditional business. In addition, since 2012, a much smaller percentage of the segment’s new universal life business has been ceded. As a result of that change, the relative impact of reinsurance on the Life Marketing segment’s overall results is expected to decrease over time. While the significance of reinsurance is expected to decline over time, the overall impact of reinsurance for a given period may fluctuate due to variations in mortality and the unlocking of balances.

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

The lower ceded premium and policy fees for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, was caused primarily by lower ceded traditional life premiums of $25.2 million, partially offset by higher universal life policy fees of $13.6 million.

Ceded benefits and settlement expenses were lower for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to lower ceded claims. Universal life and traditional life ceded claims were $5.4 million lower and $57.0 million lower, respectively, as compared to the three months ended March 31, 2018.

Ceded amortization of DAC and VOBA decreased slightly for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018.

Ceded other operating expenses increased for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to a settlement in the prior year that reduced ceding allowances by approximately $6.2 million. Ceded other operating expenses reflect the impact of reinsurance allowances, net of amounts deferred.

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Acquisitions

Segment Results of Operations

Segment results were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	323,372		$	276,789
Reinsurance ceded	(60,932		)	(77,652		)
Net premiums and policy fees	262,440			199,137
Net investment income	324,511			183,597
Other income	3,768			3,589
Total operating revenues	590,719			386,323
Realized investment gains (losses)	19,223			(7,229		)
Total revenues	609,942			379,094
BENEFITS AND EXPENSES
Benefits and settlement expenses	476,657			306,094
Amortization of VOBA	(1,470		)	(1,174		)
Other operating expenses	40,620			25,883
Operating benefits and expenses	515,807			330,803
Amortization related to benefits and settlement expenses	2,163			1,164
Amortization of VOBA related to realized gains (losses) - investments	394			(457		)
Total benefits and expenses	518,364			331,510
INCOME BEFORE INCOME TAX	91,578			47,584
Less: realized gains (losses)	19,223			(7,229		)
Less: amortization related to benefits and settlement expenses	(2,163		)	(1,164		)
Less: related amortization of VOBA	(394		)	457
PRE-TAX ADJUSTED OPERATING INCOME	$	74,912		$	55,520

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The following table summarizes key data for the Acquisitions segment:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Average Life Insurance In-Force(1)
Traditional	$	224,558,834		$	218,130,008
Universal life	31,826,162			26,216,455
	$	256,384,996		$	244,346,463
Average Account Values
Universal life	$	8,009,880		$	4,160,089
Fixed annuity(2)	11,650,096			3,545,506
Variable annuity	1,067,411			1,205,383
	$	20,727,387		$	8,910,978
Interest Spread - Fixed Annuities
Net investment income yield	4.28		%	4.14		%
Interest credited to policyholders	3.55		%	3.24		%
Interest spread(3)	0.73		%	0.90		%
(1)  Amounts are not adjusted for reinsurance ceded.
(2)  Includes general account balances held within variable annuity products and is net of coinsurance ceded.
(3)  Earned rates exclude portfolios supporting modified coinsurance and crediting rates exclude 100% cessions.

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Pre-tax adjusted operating income

Pre-tax adjusted operating income was $74.9 million for the three months ended March 31, 2019, an increase of $19.4 million as compared to the three months ended March 31, 2018, primarily due to the favorable impact of $19.8 million from the Liberty reinsurance transaction completed on May 1, 2018, partly offset by the expected runoff of the in-force blocks of business.

Operating revenues

Net premiums and policy fees increased $63.3 million, or 31.8%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to the premiums associated with the Liberty reinsurance transaction more than offsetting the expected runoff of the in-force blocks of business. Net investment income increased $140.9 million, or 76.8%, for the three months ended March 31, 2019, primarily due to the $144.3 million impact of the Liberty reinsurance transaction, partly offset by the expected runoff of the in-force blocks of business.

Total benefits and expenses

Total benefits and expenses increased $186.9 million, or 56.4%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The increase was primarily due to the Liberty reinsurance transaction, which increased benefits and expenses $200.5 million. This was partly offset by the expected runoff of the in-force blocks of business.

Reinsurance

The Acquisitions segment currently reinsures portions of both its life and annuity in-force. The cost of reinsurance to the segment is reflected in the chart shown below. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

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Impact of reinsurance

Reinsurance impacted the Acquisitions segment line items as shown in the following table:

Acquisitions Segment

Line Item Impact of Reinsurance

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(60,932	)	$	(77,652	)
BENEFITS AND EXPENSES
Benefits and settlement expenses	(59,469		)	(83,031		)
Amortization of VOBA	(124		)	(201		)
Other operating expenses	(7,552		)	(8,814		)
Total benefits and expenses	(67,145		)	(92,046		)
NET IMPACT OF REINSURANCE(1)	$	6,213		$	14,394
(1) Assumes no investment income on reinsurance. Foregone investment income would substantially reduce the favorable impact of reinsurance.

The segment’s reinsurance programs do not materially impact the other income line of our income statement. In addition, net investment income generally has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, we forgo investment income on the reserves ceded to the assuming companies. Conversely, the assuming companies will receive investment income on the reserves assumed which will increase the assuming companies’ profitability on business assumed from the Company. For business ceded under modified coinsurance arrangements, the amount of investment income attributable to the assuming company is included as part of the overall change in policy reserves and, as such, is reflected in benefit and settlement expenses. The net investment income impact to us and the assuming companies has not been quantified as it is not fully reflected in our consolidated financial statements.

The net impact of reinsurance was less favorable by $8.2 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to lower ceded benefits and expenses partly offset by lower ceded revenue. For the three months ended March 31, 2019, ceded revenues decreased by $16.7 million, while ceded benefits and expenses decreased by $24.9 million.

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Annuities

Segment Results of Operations

Segment results were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	33,430		$	38,644
Reinsurance ceded	—			—
Net premiums and policy fees	33,430			38,644
Net investment income	93,202			82,009
Realized investment gains (losses)	(21,107		)	(21,318		)
Other income	38,728			43,430
Total operating revenues	144,253			142,765
Realized investment gains (losses)	(5,036		)	7,948
Total revenues	139,217			150,713
BENEFITS AND EXPENSES
Benefits and settlement expenses	57,946			57,370
Amortization of DAC/VOBA	(6,197		)	6,367
Other operating expenses	38,288			38,497
Operating benefits and expenses	90,037			102,234
Amortization related to benefits and settlement expenses	3,784			(77		)
Amortization of DAC/VOBA related to realized gains (losses) - investments	(12,222		)	5,202
Total benefits and expenses	81,599			107,359
INCOME BEFORE INCOME TAX	57,618			43,354
Less: realized investment gains (losses)	(5,036		)	7,948
Less: amortization related to benefits and settlement expenses	(3,784		)	77
Less: related amortization of DAC/VOBA	12,222			(5,202		)
PRE-TAX ADJUSTED OPERATING INCOME	$	54,216		$	40,531

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The following tables summarize key data for the Annuities segment:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Sales(1)
Fixed annuity	$	332,578		$	418,642
Variable annuity	45,333			88,886
	$	377,911		$	507,528
Average Account Values				.
Fixed annuity(2)	$	9,531,961		$	8,580,851
Variable annuity	11,963,395			13,153,489
	$	21,495,356		$	21,734,340
Interest Spread - Fixed Annuities(3)
Net investment income yield	3.78		%	3.65		%
Interest credited to policyholders	2.46			2.51
Interest spread	1.32		%	1.14		%
(1) Sales are measured based on the amount of purchase payments received less surrenders occurring within twelve months of the purchase payments.
(2)  Includes general account balances held within VA products.
(3)  Interest spread on average general account values.

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	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures	$	(6,022	)	$	(16,892	)
Equity futures	29,738			(6,428		)
Currency futures	2,244			(7,583		)
Equity options	(71,695		)	12,016
Interest rate swaptions	—			(14		)
Interest rate swaps	74,861			(63,710		)
Total return swaps	(40,027		)	6,490
Embedded derivative - GLWB(1)	(19,626		)	56,292
Total derivatives related to VA contracts	(30,527		)	(19,829		)
Derivatives related to FIA contracts:
Embedded derivative	(38,814		)	11,330
Equity futures	(429		)	(161		)
Equity options	42,050			(4,669		)
Total derivatives related to FIA contracts	2,807			6,500
Other	35			—
VA GLWB economic cost(2)	21,107			21,318
Realized gains (losses) - derivatives, net of economic cost	$	(6,578	)	$	7,989
(1) Includes impact of nonperformance risk of $17.1 million and $19.5 million for the three months ended March 31, 2019 and 2018, respectively.
(2) Economic cost is the long-term expected average cost of providing the product benefit over the life of the policy based on product pricing assumptions. These include assumptions about the economic/market environment, and elective and non-elective policy owner behavior (e.g. lapses, withdrawal timing, mortality, etc.).

	As of
	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
GMDB - Net amount at risk(1)	$	107,875	$	274,399
GMDB Reserves	35,865		39,240
GLWB and GMAB Reserves	203,696		184,071
Account value subject to GLWB rider	8,634,151		8,399,300
GLWB Benefit Base	10,198,754		10,265,545
GMAB Benefit Base	566		1,238
S&P 500® Index	2,834		2,507
(1) Guaranteed benefits in excess of contract holder account balance.

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Pre-tax adjusted operating income

Pre-tax adjusted operating income was $54.2 million for the three months ended March 31, 2019, as compared to $40.5 million for the three months ended March 31, 2018, an increase of $13.7 million, or 33.8%. This variance was primarily the result of favorable unlocking, increased interest spreads, and a favorable change in guaranteed benefit reserves, partially offset by a decline in VA fee income. Segment results were positively impacted by $7.7 million of favorable unlocking for the three months ended March 31, 2019, as compared to $5.2 million of unfavorable unlocking for the three months ended March 31, 2018.

Operating revenues

Segment operating revenues increased $1.5 million, or 1.0%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to higher investment income, partially offset by lower VA fee income. The higher investment income related to growth in fixed account value and lower VA fee income related to a decline in variable

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account value. Average fixed account balances increased 11.1% and average variable account balances decreased 9.0% for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018.

Benefits and settlement expenses

Benefits and settlement expenses increased $0.6 million, or 1.0%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. This increase was primarily the result of higher credited interest and unfavorable unlocking, partially offset by a favorable change in guaranteed benefit reserves. Included in benefits and settlement expenses was $1.4 million of unfavorable unlocking for the three months ended March 31, 2019, as compared to $0.1 million of unfavorable unlocking for the three months ended March 31, 2018.

Amortization of DAC and VOBA

DAC and VOBA amortization favorably changed by $12.6 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The favorable change was primarily due to favorable unlocking. DAC and VOBA unlocking for the three months ended March 31, 2019, was $9.1 million favorable as compared to $5.1 million unfavorable for the three months ended March 31, 2018.

Other operating expenses

Other operating expenses decreased $0.2 million, or 0.5%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. Lower non-deferred commission expenses were partially offset by higher non-deferred acquisition expense and maintenance and overhead expense.

Sales

Total sales decreased $129.6 million, or 25.5%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. Sales of variable annuities decreased $43.6 million, or 49.0% for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to the relative competitiveness of our product within the market. Sales of fixed annuities decreased by $86.1 million, or 20.6%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to a decrease in single premium deferred annuities (“SPDA”) sales.

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Stable Value Products

Segment Results of Operations

Segment results were as follows:

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
REVENUES
Net investment income	$	57,621	$	53,893
Other income	—		178
Total operating revenues	57,621		54,071
Realized investment gains (losses)	1,958		(203		)
Total revenues	59,579		53,868
BENEFITS AND EXPENSES
Benefits and settlement expenses	33,840		23,643
Amortization of DAC	873		730
Other operating expenses	669		618
Total benefits and expenses	35,382		24,991
INCOME BEFORE INCOME TAX	24,197		28,877
Less: realized gains (losses)	1,958		(203		)
PRE-TAX ADJUSTED OPERATING INCOME	$	22,239	$	29,080

The following table summarizes key data for the Stable Value Products segment: 

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Sales(1)
GIC	$	—		$	10,000
GFA	650,000			—
	$	650,000		$	10,000
Average Account Values	$	5,453,739		$	4,710,531
Ending Account Values	$	5,527,816		$	4,699,614
Operating Spread
Net investment income yield	4.22		%	4.58		%
Other income yield	—			0.02
Interest credited	2.48			2.01
Operating expenses	0.11			0.12
Operating spread	1.63		%	2.47		%
Adjusted operating spread(2)	1.57		%	1.87		%
(1) Sales are measured at the time the purchase payments are received.
(2)  Excludes participating mortgage loan income.

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For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Pre-tax adjusted operating income

Pre-tax adjusted operating income was $22.2 million and decreased $6.8 million, or 23.5%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The decrease in pre-tax adjusted operating income primarily resulted from lower participating mortgage income in addition to lower interest spreads driven by higher credited rates on newly issued contracts. Participating mortgage income for the three months ended March 31, 2019, was $0.8 million as compared to $6.9 million for the three months ended March 31, 2018. The adjusted operating spread, which excludes participating income, decreased by 30 basis points for the three months ended March 31, 2019, from the prior year, due primarily to an increase in credited interest.

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Asset Protection

Segment Results of Operations

Segment results were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	82,177		$	82,600
Reinsurance ceded	(48,920		)	(47,744		)
Net premiums and policy fees	33,257			34,856
Net investment income	8,206			6,969
Other income	34,735			34,550
Total operating revenues	76,198			76,375
BENEFITS AND EXPENSES
Benefits and settlement expenses	23,946			29,109
Amortization of DAC/VOBA	15,655			15,753
Other operating expenses	26,854			25,295
Total benefits and expenses	66,455			70,157
INCOME BEFORE INCOME TAX	9,743			6,218
Less: realized gains (losses)	—			—
PRE-TAX ADJUSTED OPERATING INCOME	$	9,743		$	6,218

The following table summarizes key data for the Asset Protection segment: 

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Sales(1)
Credit insurance	$	2,280		$	3,166
Service contracts	92,582			96,503
GAP	16,726			15,596
	$	111,588		$	115,265
Loss Ratios(2)
Credit insurance	26.2		%	29.8		%
Service contracts	56.2			54.4
GAP	120.2			139.2
(1) Sales are based on the amount of single premiums and fees received
(2) Incurred claims as a percentage of earned premiums

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Pre-tax adjusted operating income

Pre-tax adjusted operating income was $9.7 million, representing an increase of $3.5 million, or 56.7%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. Earnings from the GAP product line increased $2.7 million due to lower loss ratios. Service contract earnings increased $0.5 million primarily due to higher investment income. Earnings from the credit insurance product line increased $0.3 million primarily due to lower expenses.

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Net premiums and policy fees

Net premiums and policy fees decreased $1.6 million, or 4.6%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. GAP premiums decreased $3.5 million and credit insurance premiums decreased $0.3 million as a result of lower sales. This was partly offset by an increase in service contract premiums of $2.2 million.

Other income

Other income increased $0.2 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. Other income from the service contract line increased $0.7 million. Other income from the GAP product line decreased $0.5 million.

Benefits and settlement expenses

Benefits and settlement expenses decreased $5.2 million, or 17.7%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. GAP claims decreased $6.6 million due to lower volume and lower loss ratios. Credit insurance claims decreased $0.2 million due to lower loss ratios. Service contract claims increased $1.6 million due to higher volume and higher loss ratios.

Amortization of DAC and VOBA and Other operating expenses

Amortization of DAC and VOBA decreased $0.1 million and other operating expenses increased $1.6 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018.

Sales

Total segment sales decreased $3.7 million, or 3.2%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. Service contract sales decreased $3.9 million primarily due to lower volume resulting from the impact of previous price increases. Credit insurance sales decreased $0.9 million due to decreasing demand for the product. GAP sales increased $1.1 million.

Reinsurance

The majority of the Asset Protection segment’s reinsurance activity relates to the cession of single premium credit life and credit accident and health insurance, vehicle service contracts, and guaranteed asset protection insurance to producer affiliated reinsurance companies (“PARCs”). These arrangements are coinsurance contracts ceding the business on a first dollar quota share basis at 100% to limit the segment’s exposure and allow the PARCs to share in the underwriting income of the product. Reinsurance contracts do not relieve the Asset Protection segment from obligations to policyholders. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies, to the Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Impact of Reinsurance

Reinsurance impacted the Asset Protection segment line items as shown in the following table:

Asset Protection Segment

Line Item Impact of Reinsurance

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(48,920	)	$	(47,744	)
BENEFITS AND EXPENSES
Benefits and settlement expenses	(21,139		)	(19,990		)
Amortization of DAC/VOBA	(981		)	(1,032		)
Other operating expenses	(299		)	(799		)
Total benefits and expenses	(22,419		)	(21,821		)
NET IMPACT OF REINSURANCE(1)	$	(26,501	)	$	(25,923	)
(1)  Assumes no investment income on reinsurance. Foregone investment income would substantially change the impact of reinsurance.

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For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Reinsurance premiums ceded increased $1.2 million, or 2.5%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The increase was primarily due to an increase in ceded service contract premiums somewhat offset by a decrease in ceded credit insurance premiums.

Benefits and settlement expenses ceded increased $1.1 million, or 5.7%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The increase was primarily due to higher ceded losses in the service contract product line.

Amortization of DAC and VOBA ceded decreased $0.1 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, as the result of changes in ceded activity in all product lines. Other operating expenses ceded decreased $0.5 million for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, as a result of changes in ceded activity in all product lines.

Net investment income has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, the Asset Protection segment forgoes investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed which generally will increase the assuming companies’ profitability on business ceded. The net investment income impact has not been quantified as it is not reflected in the consolidated financial statements.

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Corporate and Other

Segment Results of Operations

Segment results were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	3,244		$	3,183
Reinsurance ceded	(116		)	(5		)
Net premiums and policy fees	3,128			3,178
Net investment income	61,165			59,039
Other income	1,167			755
Total operating revenues	65,460			62,972
Realized investment gains (losses)	6,294			7,894
Total revenues	71,754			70,866
BENEFITS AND EXPENSES
Benefits and settlement expenses	5,162			4,930
Amortization of DAC/VOBA	—			—
Other operating expenses	79,972			78,721
Total benefits and expenses	85,134			83,651
INCOME (LOSS) BEFORE INCOME TAX	(13,380		)	(12,785		)
Less: realized investment gains (losses)	6,294			7,894
PRE-TAX ADJUSTED OPERATING INCOME (LOSS)	$	(19,674	)	$	(20,679	)

For The Three Months Ended March 31, 2019, as compared to The Three Months Ended March 31, 2018

Pre-tax adjusted operating income (loss)

Pre-tax adjusted operating loss was $19.7 million for the three months ended March 31, 2019, as compared to a pre-tax adjusted operating loss of $20.7 million for the three months ended March 31, 2018. The decreased operating loss was primarily due to an increase in investment income due to higher invested asset balances, partially offset by increased interest expense.

Operating revenues

Net investment income for the segment increased $2.1 million, or 3.6%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. The increase was primarily due to an increase in invested asset balances.

Total benefits and expenses

Total benefits and expenses increased $1.5 million or 1.8%, for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to increases in interest expense and corporate overhead expenses.

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CONSOLIDATED INVESTMENTS

As of March 31, 2019, our investment portfolio was approximately $68.1 billion. The types of assets in which we may invest are influenced by various state insurance laws which prescribe qualified investment assets. Within the parameters of these laws, we invest in assets giving consideration to such factors as liquidity and capital needs, investment quality, investment return, matching of assets and liabilities, and the overall composition of the investment portfolio by asset type and credit exposure.

Within our fixed maturity investments, we maintain portfolios classified as “available-for-sale”, “trading”, and “held-to-maturity”. We purchase our available-for-sale investments with the intent to hold to maturity by purchasing investments that match future cash flow needs. However, we may sell any of our available-for-sale and trading investments to maintain proper matching of assets and liabilities. Accordingly, we classified $51.3 billion, or 91.0%, of our fixed maturities as “available-for-sale” as of March 31, 2019. These securities are carried at fair value on our consolidated condensed balance sheets. Changes in fair value for our available-for-sale portfolio, net of tax and the related impact on certain insurance assets and liabilities are recorded directly to shareowner’s equity. Declines in fair value that are other-than-temporary are recorded as realized losses in the consolidated condensed statements of income, net of any applicable non-credit component of the loss, which is recorded as an adjustment to other comprehensive income (loss).

Trading securities are carried at fair value and changes in fair value are recorded on the income statement as they occur. Our trading portfolio accounted for $2.5 billion, or 4.4%, of our fixed maturities and $34.6 million of short-term investments as of March 31, 2019. Changes in fair value on the Modco trading portfolios, including gains and losses from sales, are passed to third party reinsurers through the contractual terms of the related reinsurance arrangements. Partially offsetting these amounts are corresponding changes in the fair value of the embedded derivative associated with the underlying reinsurance arrangement.

Fixed maturities with respect to which we have both the positive intent and ability to hold to maturity are classified as “held-to-maturity”. We classified $2.6 billion, or 4.6%, of our fixed maturities as “held-to-maturity” as of March 31, 2019. These securities are carried at amortized cost on our consolidated condensed balance sheets.

Fair values for private, non-traded securities are determined as follows: 1) we obtain estimates from independent pricing services and 2) we estimate fair value based upon a comparison to quoted issues of the same issuer or issues of other issuers with similar terms and risk characteristics. We analyze the independent pricing services valuation methodologies and related inputs, including an assessment of the observability of market inputs. Upon obtaining this information related to fair value, management makes a determination as to the appropriate valuation amount. For more information about the fair values of our investments please refer to Note 6, Fair Value of Financial Instruments, to the financial statements.

The following table presents the reported values of our invested assets:

	As of
	March 31, 2019				December 31, 2018
	(Dollars In Thousands)
Publicly issued bonds (amortized cost: 2019 - $39,844,482; 2018 - $40,496,617)	$	39,262,915	57.7	%	$	38,346,708	58.1	%
Privately issued bonds (amortized cost: 2019 - $17,030,458; 2018 - $16,497,523)	17,026,110		25.0		16,097,386		24.3
Redeemable preferred stocks (amortized cost: 2019 - $99,438; 2018 - $105,639)	95,683		0.1		94,079		0.1
Fixed maturities	56,384,708		82.8	%	54,538,173		82.5	%
Equity securities (cost: 2019 - $619,483; 2018 - $627,087)	619,440		0.9		595,884		0.9
Mortgage loans	7,701,465		11.3		7,724,733		11.7
Investment real estate	6,478		—		6,816		—
Policy loans	1,677,442		2.5		1,695,886		2.6
Other long-term investments	853,117		1.3		759,354		1.1
Short-term investments	817,642		1.2		807,283		1.2
Total investments	$	68,060,292	100.0	%	$	66,128,129	100.0	%

Included in the preceding table are $2.5 billion and $2.4 billion of fixed maturities and $34.6 million and $30.9 million of short-term investments classified as trading securities as of March 31, 2019 and December 31, 2018, respectively. All of the fixed maturities in the trading portfolio are invested assets that are held pursuant to Modco arrangements under which the economic risks and benefits of the investments are passed to third party reinsurers. Also included above are $2.6 billion and $2.6 billion of securities classified as held-to-maturity as of March 31, 2019 and December 31, 2018, respectively.

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Fixed Maturity Investments

As of March 31, 2019, our fixed maturity investment holdings were approximately $56.4 billion. The approximate percentage distribution of our fixed maturity investments by quality rating is as follows: 

	As of
Rating	March 31, 2019				December 31, 2018
	(Dollars In Thousands)
AAA	$	7,134,040	12.7	%	$	6,822,118	12.5	%
AA	6,281,009		11.1		6,219,579		11.4
A	18,622,551		33.0		17,694,697		32.4
BBB	20,004,167		35.5		19,455,634		35.7
Below investment grade	1,735,585		3.1		1,712,671		3.2
Not rated(1)	2,607,356		4.6		2,633,474		4.8
	$	56,384,708	100.0	%	$	54,538,173	100.0	%
(1) Our “not rated” securities are $2.6 billion or 4.6% of our fixed maturity investments, of held-to-maturity securities issued by affiliates of the Company which are considered variable interest entities (“VIEs”) and are discussed in Note 5, Investment Operations, to the consolidated condensed financial statements. We are not the primary beneficiary of these entities and thus these securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are wholly owned subsidiaries of the Company.

We use various Nationally Recognized Statistical Rating Organizations’ (“NRSRO”) ratings when classifying securities by quality ratings. When the various NRSRO ratings are not consistent for a security, we use the second-highest convention in assigning the rating. When there are no such published ratings, we assign a rating based on the statutory accounting rating system if such ratings are available.

The distribution of our fixed maturity investments by type is as follows:

	As of
Type	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
Corporate securities	$	39,482,150	$	37,786,661
Residential mortgage-backed securities	4,121,547		3,853,426
Commercial mortgage-backed securities	2,562,826		2,484,009
Other asset-backed securities	1,512,152		1,551,800
U.S. government-related securities	1,470,733		1,699,299
Other government-related securities	547,801		560,171
States, municipals, and political subdivisions	3,984,460		3,875,254
Redeemable preferred stocks	95,683		94,079
Securities issued by affiliates	2,607,356		2,633,474
Total fixed income portfolio	$	56,384,708	$	54,538,173

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We periodically update our industry segmentation based on an industry accepted index. Updates to this index can result in a change in segmentation for certain securities between periods.

The industry segment composition of our fixed maturity securities is presented in the following table: 

	As of March 31, 2019		% Fair Value		As of December 31, 2018		% Fair Value
	(Dollars In Thousands)
Banking	$	5,644,232	9.9	%	$	5,260,725	9.6	%
Other finance	258,291		0.5		255,445		0.5
Electric utility	4,575,169		8.1		4,550,917		8.3
Energy	4,216,909		7.5		4,064,340		7.5
Natural gas	868,404		1.5		829,685		1.5
Insurance	4,157,172		7.4		3,916,905		7.2
Communications	2,144,609		3.8		2,086,592		3.8
Basic industrial	1,834,718		3.3		1,744,853		3.2
Consumer noncyclical	5,425,813		9.6		5,217,111		9.6
Consumer cyclical	1,948,226		3.5		1,850,868		3.4
Finance companies	200,977		0.4		192,074		0.4
Capital goods	2,796,061		5.0		2,711,728		5.0
Transportation	1,738,054		3.1		1,669,627		3.1
Other industrial	419,027		0.7		382,138		0.7
Brokerage	1,119,106		2.0		999,554		1.8
Technology	1,998,238		3.5		1,908,823		3.5
Real estate	199,169		0.4		206,795		0.4
Other utility	33,658		—		32,560		0.1
Commercial mortgage-backed securities	2,562,826		4.5		2,484,009		4.6
Other asset-backed securities	1,512,152		2.7		1,551,800		2.8
Residential mortgage-backed non-agency securities	3,297,336		5.8		3,017,064		5.5
Residential mortgage-backed agency securities	824,211		1.5		836,362		1.5
U.S. government-related securities	1,470,733		2.6		1,699,299		3.1
Other government-related securities	547,801		1.0		560,171		1.0
State, municipals, and political divisions	3,984,460		7.1		3,875,254		7.1
Securities issued by affiliates	2,607,356		4.6		2,633,474		4.8
Total	$	56,384,708	100.0	%	$	54,538,173	100.0	%

The total Modco trading portfolio fixed maturities by rating is as follows: 

	As of
Rating	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
AAA	$	289,694	$	301,155
AA	283,482		299,438
A	844,782		798,691
BBB	954,762		872,613
Below investment grade	120,741		144,295
	$	2,493,461	$	2,416,192

A portion of our bond portfolio is invested in residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). ABS are securities that are backed by a pool of assets. These holdings as of March 31, 2019, were approximately $8.2 billion. Mortgage-

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backed securities (“MBS”) are constructed from pools of mortgages and may have cash flow volatility as a result of changes in the rate at which prepayments of principal occur with respect to the underlying loans. Excluding limitations on access to lending and other extraordinary economic conditions, prepayments of principal on the underlying loans can be expected to accelerate with decreases in market interest rates and diminish with increases in interest rates.

The following tables include the percentage of our collateral grouped by rating category and categorizes the estimated fair value by year of security origination for our Prime, Non-Prime, Commercial, and Other asset-backed securities as of March 31, 2019 and December 31, 2018.

	As of March 31, 2019
	Prime(1)						Non-Prime(1)						Commercial						Other asset-backed						Total
	Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized
	Value			Cost			Value			Cost			Value			Cost			Value			Cost			Value			Cost
	(Dollars In Millions)
Rating $
AAA	$	3,216.8		$	3,187.8		$	—		$	—		$	1,451.4		$	1,456.0		$	513.2		$	507.4		$	5,181.4		$	5,151.2
AA	2.7			2.7			0.2			0.2			541.1			548.7			170.1			166.4			714.1			718.0
A	826.1			827.3			11.2			11.2			513.5			512.0			686.0			692.0			2,036.8			2,042.5
BBB	3.1			3.1			3.0			3.0			56.8			56.8			103.1			102.9			166.0			165.8
Below	17.2			17.2			41.2			41.2			—			—			39.8			40.6			98.2			99.0
	$	4,065.9		$	4,038.1		$	55.6		$	55.6		$	2,562.8		$	2,573.5		$	1,512.2		$	1,509.3		$	8,196.5		$	8,176.5
Rating %
AAA	79.1		%	78.9		%	—		%	—		%	56.7		%	56.6		%	33.9		%	33.6		%	63.2		%	63.0		%
AA	0.1			0.1			0.4			0.4			21.1			21.3			11.3			11.0			8.7			8.8
A	20.3			20.5			20.0			20.0			20.0			19.9			45.4			45.9			24.9			25.0
BBB	0.1			0.1			5.4			5.4			2.2			2.2			6.8			6.8			2.0			2.0
Below	0.4			0.4			74.2			74.2			—			—			2.6			2.7			1.2			1.2
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%
Estimated Fair Value of Security by Year of Security Origination
2015 and prior	$	1,719.4		$	1,712.1		$	55.6		$	55.6		$	1,818.6		$	1,824.4		$	776.9		$	769.8		$	4,370.5		$	4,361.9
2016	346.2			346.8			—			—			451.8			460.2			184.0			184.8			982.0			991.8
2017	691.3			698.1			—			—			127.0			127.8			416.1			418.7			1,234.4			1,244.6
2018	1,079.6			1,055.7			—			—			142.7			138.7			126.3			127.1			1,348.6			1,321.5
2019	229.4			225.4			—			—			22.7			22.4			8.9			8.9			261.0			256.7
Total	$	4,065.9		$	4,038.1		$	55.6		$	55.6		$	2,562.8		$	2,573.5		$	1,512.2		$	1,509.3		$	8,196.5		$	8,176.5
(1) Included in Residential Mortgage-Backed securities.

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	As of December 31, 2018
	Prime(1)						Non-Prime(1)						Commercial						Other asset-backed						Total
	Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized
	Value			Cost			Value			Cost			Value			Cost			Value			Cost			Value			Cost
	(Dollars In Millions)
Rating $
AAA	$	2,900.5		$	2,930.7		$	—		$	—		$	1,398.8		$	1,427.2		$	533.3		$	536.3		$	4,832.6		$	4,894.2
AA	2.9			2.9			0.2			0.2			543.1			562.7			209.8			207.2			756.0			773.0
A	837.9			846.6			19.0			19.0			503.5			509.9			671.1			687.5			2,031.5			2,063.0
BBB	3.7			3.7			3.1			3.1			38.6			38.5			99.5			100.4			144.9			145.7
Below	22.4			22.4			63.7			63.7			—			—			38.1			38.6			124.2			124.7
	$	3,767.4		$	3,806.3		$	86.0		$	86.0		$	2,484.0		$	2,538.3		$	1,551.8		$	1,570.0		$	7,889.2		$	8,000.6
Rating %
AAA	77.0		%	77.0		%	—		%	—		%	56.2		%	56.2		%	34.4		%	34.1		%	61.3		%	61.1		%
AA	0.1			0.1			0.3			0.3			21.9			22.2			13.5			13.2			9.6			9.7
A	22.2			22.2			22.1			22.1			20.3			20.1			43.2			43.8			25.7			25.8
BBB	0.1			0.1			3.6			3.6			1.6			1.5			6.4			6.4			1.8			1.8
Below	0.6			0.6			74.0			74.0			—			—			2.5			2.5			1.6			1.6
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%
Estimated Fair Value of Security by Year of Security Origination
2014 and prior	$	1,114.3		$	1,121.7		$	86.0		$	86.0		$	1,510.6		$	1,538.9		$	729.0		$	730.7		$	3,439.9		$	3,477.3
2015	579.1			586.5			—			—			298.7			303.1			64.4			66.2			942.2			955.8
2016	340.6			348.2			—			—			441.0			460.1			227.5			230.0			1,009.1			1,038.3
2017	666.6			689.1			—			—			123.0			126.4			406.1			415.5			1,195.7			1,231.0
2018	1,066.8			1,060.8			—			—			110.7			109.8			124.8			127.6			1,302.3			1,298.2
Total	$	3,767.4		$	3,806.3		$	86.0		$	86.0		$	2,484.0		$	2,538.3		$	1,551.8		$	1,570.0		$	7,889.2		$	8,000.6
(1) Included in Residential Mortgage-Backed securities

The majority of our RMBS holdings as of March 31, 2019, were super senior or senior bonds in the capital structure. Our total non-agency portfolio has a weighted-average life of 13.91 years. The following table categorizes the weighted-average life for our non-agency portfolio, by category of material holdings, as of March 31, 2019: 

	Weighted-Average
Non-agency portfolio	Life
Prime	13.94
Alt-A	3.64
Sub-prime	1.77

Mortgage Loans

We invest a portion of our investment portfolio in commercial mortgage loans. As of March 31, 2019, our mortgage loan holdings were approximately $7.7 billion. We have specialized in making loans on either credit-oriented commercial properties or credit-anchored strip shopping centers and apartments. Our underwriting procedures relative to our commercial loan portfolio are based, in our view, on a conservative and disciplined approach. We concentrate on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). We believe that these asset types tend to weather economic downturns better than other commercial asset classes in which we have chosen not to participate. We believe this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout our history. The majority of our mortgage loans portfolio was underwritten and funded by us. From time to time, we may acquire loans in conjunction with an acquisition.

Our commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of an allowance for loan losses. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts, and prepayment fees are reported in net investment income.

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Certain of the mortgage loans have call options that occur within the next 10 years. However, if interest rates were to significantly increase, we may be unable to exercise the call options on our existing mortgage loans commensurate with the significantly increased market rates. As of March 31, 2019, assuming the loans are called at their next call dates, approximately $77.7 million of principal would become due for the remainder of 2019, $837.4 million in 2020 through 2024, and $60.6 million in 2025 through 2029.

We offer a type of commercial mortgage loan under which we will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of March 31, 2019 and December 31, 2018, approximately $727.8 million and $700.6 million, respectively, of our total mortgage loans principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three months ended March 31, 2019 and 2018, we recognized $2.2 million, and $7.3 million, respectively, of participating mortgage loan income.

The following table includes a breakdown of our commercial mortgage loan portfolio:

Commercial Mortgage Loan Portfolio Profile
	As of March 31, 2019		As of December 31, 2018
	(Dollars In Thousands)
Total number of loans	1,709		1,732
Total amortized cost	7,701,465		7,724,733
Total unpaid principal balance	7,588,296		7,602,389
Current allowance for loan losses	(1,946	)	(1,296	)
Average loan size	4,440		4,389
Weighted-average amortization	22.5 years		22.5 years
Weighted-average coupon	4.60	%	4.60	%
Weighted-average LTV	55.39	%	55.39	%
Weighted-average debt coverage ratio	1.55		1.55

We record mortgage loans net of an allowance for credit losses. This allowance is calculated through analysis of specific loans that have indicators of potential impairment based on current information and events. As of March 31, 2019 and December 31, 2018, there were allowance for mortgage loan credit losses of $1.9 million and $1.3 million, respectively.

While our mortgage loans do not have quoted market values, as of March 31, 2019, we estimated the fair value of our mortgage loans to be $7.6 billion (using an internal fair value model which calculates the value of most loans by using the loan’s discounted cash flows to the loan’s call or maturity date), which was approximately 1.0% less than the amortized cost, less any related loan loss reserve.

At the time of origination, our mortgage lending criteria targets that the loan-to-value ratio on each mortgage is 75% or less. We target projected rental payments from credit anchors (i.e., excluding rental payments from smaller local tenants) of 70% of the property’s projected operating expenses and debt service.

As of March 31, 2019, our invested assets consisted of an immaterial amount of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. We do not expect these investments to adversely affect our liquidity or ability to maintain proper matching of assets and liabilities. During the three months ended March 31, 2019, two mortgage loan transactions occurred that were accounted for as troubled debt restructurings as a result of granting concessions to a borrower. These concessions were each the result of an agreement between the creditor and the debtor and resulted in the company accepting an amount less than the outstanding principal balance of $2.7 million in satisfaction of the borrowers’ obligation. During the three months ended March 31, 2019, we did not recognize any mortgage loans that were foreclosed and were converted to real estate properties. We did not identify any loans whose principal was permanently impaired during the three months ended March 31, 2019.

It is our policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place.

Unrealized Gains and Losses — Available-for-Sale Securities

The information presented below relates to investments at a certain point in time and is not necessarily indicative of the status of the portfolio at any time after March 31, 2019, the balance sheet date. Information about unrealized gains and losses is subject to rapidly changing conditions, including volatility of financial markets and changes in interest rates. Management considers a number of factors in determining if an unrealized loss is other-than-temporary, including the expected cash to be collected and the intent, likelihood, and/or ability to hold the security until recovery. Consistent with our long-standing practice, we do not utilize a “bright line test” to determine other-than-temporary impairments. On a quarterly basis, we perform an analysis on every security with an unrealized loss to determine if an other-than-temporary impairment has occurred. This analysis includes reviewing several

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metrics including collateral, expected cash flows, ratings, and liquidity. Furthermore, since the timing of recognizing realized gains and losses is largely based on management’s decisions as to the timing and selection of investments to be sold, the tables and information provided below should be considered within the context of the overall unrealized gain/(loss) position of the portfolio. We had an overall net unrealized loss of $589.7 million, prior to tax and the related impact of certain insurance assets and liabilities offsets, as of March 31, 2019, and an overall net unrealized loss of $2.6 billion as of December 31, 2018.

For fixed maturity securities held that are in an unrealized loss position as of March 31, 2019, the fair value, amortized cost, unrealized loss, and total time period that the security has been in an unrealized loss position are presented in the table below: 

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
<= 90 days	$	582,337	2.2	%	$	591,639	2.2	%	$	(9,302	)	0.8	%
>90 days but <= 180 days	873,608		3.2		895,513		3.2		(21,905		)	1.6
>180 days but <= 270 days	1,282,406		4.7		1,345,343		4.7		(62,937		)	4.6
>270 days but <= 1 year	1,511,935		5.6		1,571,445		5.5		(59,510		)	4.4
>1 year but <= 2 years	10,575,701		39.2		10,864,140		38.3		(288,439		)	21.2
>2 years but <= 3 years	5,634,974		20.9		5,900,356		20.8		(265,382		)	19.5
>3 years but <= 4 years	409,129		1.5		463,363		1.6		(54,234		)	4.0
>4 years but <= 5 years	6,139,986		22.7		6,736,809		23.7		(596,823		)	43.9
>5 years	—		—		—		—		—			—
Total	$	27,010,076	100.0	%	$	28,368,608	100.0	%	$	(1,358,532	)	100.0	%

The range of maturity dates for securities in an unrealized loss position as of March 31, 2019, varies, with 23.6% maturing in less than 5 years, 12.7% maturing between 5 and 10 years, and 63.7% maturing after 10 years. The following table shows the credit rating of securities in an unrealized loss position as of March 31, 2019:

S&P or Equivalent	Fair		% Fair		Amortized		% Amortized		Unrealized			% Unrealized
Designation	Value		Value		Cost		Cost		Loss			Loss
	(Dollars In Thousands)
AAA/AA/A	$	14,878,062	55.0	%	$	15,376,778	54.2	%	$	(498,716	)	36.7	%
BBB	11,168,913		41.4		11,883,517		41.9		(714,604		)	52.6
Investment grade	26,046,975		96.4	%	27,260,295		96.1	%	(1,213,320		)	89.3	%
BB	561,208		2.1		616,946		2.2		(55,738		)	4.1
B	181,623		0.7		225,106		0.8		(43,483		)	3.2
CCC or lower	220,270		0.8		266,261		0.9		(45,991		)	3.4
Below investment grade	963,101		3.6	%	1,108,313		3.9	%	(145,212		)	10.7	%
Total	$	27,010,076	100.0	%	$	28,368,608	100.0	%	$	(1,358,532	)	100.0	%

As of March 31, 2019, the Barclays Investment Grade Index was priced at 113.6 bps versus a 10 year average of 145.6 bps. Similarly, the Barclays High Yield Index was priced at 414.4 bps versus a 10 year average of 556.7 bps. As of March 31, 2019, the five, ten, and thirty-year U.S. Treasury obligations were trading at levels of 2.2%, 2.4%, and 2.8%, as compared to 10 year averages of 1.7%, 2.5%, and 3.3, respectively.

As of March 31, 2019, 89.3% of the unrealized loss was associated with securities that were rated investment grade. We have examined the performance of the underlying collateral and cash flows and expect that our investments will continue to perform in accordance with their contractual terms. Factors such as credit enhancements within the deal structures and the underlying collateral performance/characteristics support the recoverability of the investments. Based on the factors discussed, we do not consider these unrealized loss positions to be other-than-temporary. However, from time to time, we may sell securities in the ordinary course of managing our portfolio to meet diversification, credit quality, yield enhancement, asset/liability management, and liquidity requirements.

Expectations that investments in mortgage-backed and asset-backed securities will continue to perform in accordance with their contractual terms are based on assumptions that a market participant would use in determining the current fair value. It is reasonably possible that the underlying collateral of these investments will perform worse than current market expectations and that such an event may lead to adverse changes in the cash flows on our holdings of these types of securities. This could lead to potential future write-downs within our portfolio of mortgage-backed and asset-backed securities. Expectations that our investments in corporate securities and/or debt obligations will continue to perform in accordance with their contractual terms are based on evidence gathered through our normal credit surveillance process. Although we do not anticipate such events, it is reasonably possible that issuers of our investments in corporate securities will perform worse than current expectations. Such events may lead us to recognize potential future write-downs within our portfolio of corporate securities. It is also possible that such unanticipated

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events would lead us to dispose of those certain holdings and recognize the effects of any such market movements in our financial statements.

As of March 31, 2019, we held a total of 2,473 positions that were in an unrealized loss position. Included in that amount were 124 positions of below investment grade securities with a fair value of $963.1 million that were in an unrealized loss position. Total unrealized losses related to below investment grade securities were $145.2 million, $135.1 million of which had been in an unrealized loss position for more than twelve months. Below investment grade securities in an unrealized loss position were 1.4% of invested assets.

As of March 31, 2019, securities in an unrealized loss position that were rated as below investment grade represented 3.6% of the total fair value and 10.7% of the total unrealized loss. We have the ability and intent to hold these securities to maturity. After a review of each security and its expected cash flows, we believe the decline in fair value to be temporary.

The following table includes the fair value, amortized cost, unrealized loss, and total time period that the security has been in an unrealized loss position for all below investment grade securities as of March 31, 2019:

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
<= 90 days	$	38,364	4.0	%	$	39,849	3.5	%	$	(1,485	)	0.9	%
>90 days but <= 180 days	36,015		3.7		37,136		3.4		(1,121		)	0.8
>180 days but <= 270 days	22,708		2.4		25,223		2.3		(2,515		)	1.7
>270 days but <= 1 year	102,273		10.6		107,299		9.7		(5,026		)	3.5
>1 year but <= 2 years	292,485		30.4		317,745		28.7		(25,260		)	17.4
>2 years but <= 3 years	116,937		12.1		132,155		11.9		(15,218		)	10.5
>3 years but <= 4 years	135,805		14.1		169,294		15.3		(33,489		)	23.1
>4 years but <= 5 years	218,514		22.7		279,612		25.2		(61,098		)	42.1
>5 years	—				—				—			—
Total	$	963,101	100.0	%	$	1,108,313	100.0	%	$	(145,212	)	100.0	%

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We have no material concentrations of issuers or guarantors of fixed maturity securities. The industry segment composition of all securities in an unrealized loss position held as of March 31, 2019, is presented in the following table:

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
Banking	$	2,521,199	9.3	%	$	2,574,714	9.2	%	$	(53,515	)	4.1	%
Other finance	42,713		0.2		46,607		0.2		(3,894		)	0.3
Electric utility	3,249,579		12.0		3,469,184		12.2		(219,605		)	16.2
Energy	1,915,476		7.1		2,042,988		7.2		(127,512		)	9.4
Natural gas	599,048		2.2		633,563		2.2		(34,515		)	2.5
Insurance	2,731,458		10.1		2,874,364		10.1		(142,906		)	10.5
Communications	1,275,030		4.7		1,380,615		4.9		(105,585		)	7.8
Basic industrial	800,044		3.0		856,303		3.0		(56,259		)	4.1
Consumer noncyclical	2,849,123		10.5		3,076,653		10.8		(227,530		)	16.7
Consumer cyclical	952,356		3.5		1,009,022		3.6		(56,666		)	4.2
Finance companies	52,618		0.2		57,018		0.2		(4,400		)	0.3
Capital goods	1,564,445		5.8		1,636,488		5.8		(72,043		)	5.3
Transportation	933,789		3.5		985,418		3.5		(51,629		)	3.8
Other industrial	171,689		0.6		177,479		0.6		(5,790		)	0.4
Brokerage	587,578		2.2		607,885		2.1		(20,307		)	1.5
Technology	757,863		2.8		792,719		2.8		(34,856		)	2.6
Real estate	23,753		0.1		23,868		0.1		(115		)	—
Other utility	14,583		0.1		15,565		0.1		(982		)	0.1
Commercial mortgage-backed securities	1,531,112		5.7		1,558,955		5.5		(27,843		)	2.0
Other asset-backed securities	723,749		2.7		739,372		2.6		(15,623		)	1.1
Residential mortgage-backed non-agency securities	969,284		3.6		991,514		3.5		(22,230		)	1.6
Residential mortgage-backed agency securities	431,904		1.6		439,080		1.5		(7,176		)	0.5
U.S. government-related securities	1,089,694		4.0		1,120,106		3.9		(30,412		)	2.2
Other government-related securities	249,879		0.9		261,762		0.9		(11,883		)	0.9
States, municipals, and political divisions	972,110		3.6		997,366		3.5		(25,256		)	1.9
Total	$	27,010,076	100.0	%	$	28,368,608	100.0	%	$	(1,358,532	)	100.0	%

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We have no material concentrations of issuers or guarantors of fixed maturity securities. The industry segment composition of all securities in an unrealized loss position held as of December 31, 2018, is presented in the following table:

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
Banking	$	4,446,658	10.9	%	$	4,653,309	10.8	%	$	(206,651	)	7.5	%
Other finance	106,041		0.3		111,260		0.3		(5,219		)	0.2
Electric utility	4,070,115		10.2		4,426,609		10.4		(356,494		)	13.0
Energy	3,380,552		8.5		3,679,048		8.6		(298,496		)	10.9
Natural gas	723,330		1.8		782,418		1.8		(59,088		)	2.1
Insurance	3,420,321		8.6		3,699,793		8.7		(279,472		)	10.2
Communications	1,834,029		4.6		2,030,590		4.8		(196,561		)	7.1
Basic industrial	1,393,953		3.5		1,509,059		3.5		(115,106		)	4.2
Consumer noncyclical	4,256,258		10.7		4,629,877		10.8		(373,619		)	13.6
Consumer cyclical	1,391,705		3.5		1,496,425		3.5		(104,720		)	3.8
Finance companies	143,679		0.4		154,974		0.4		(11,295		)	0.4
Capital goods	2,258,807		5.7		2,406,722		5.6		(147,915		)	5.4
Transportation	1,394,137		3.5		1,489,670		3.5		(95,533		)	3.5
Other industrial	191,055		0.5		203,221		0.5		(12,166		)	0.4
Brokerage	807,667		2.0		848,231		2.0		(40,564		)	1.5
Technology	1,359,020		3.4		1,449,903		3.4		(90,883		)	3.3
Real estate	73,098		0.2		74,323		0.2		(1,225		)	—
Other utility	18,442		—		20,047		—		(1,605		)	—
Commercial mortgage-backed securities	1,851,821		4.6		1,909,922		4.5		(58,101		)	2.1
Other asset-backed securities	836,141		2.1		871,539		2.0		(35,398		)	1.3
Residential mortgage-backed non-agency securities	1,749,478		4.4		1,798,817		4.2		(49,339		)	1.8
Residential mortgage-backed agency securities	539,896		1.4		552,753		1.3		(12,857		)	0.5
U.S. government-related securities	1,215,944		3.0		1,261,666		3.0		(45,722		)	1.7
Other government-related securities	357,770		0.9		391,620		0.9		(33,850		)	1.2
States, municipals, and political divisions	2,133,413		5.3		2,252,315		5.3		(118,902		)	4.3
Total	$	39,953,330	100.0	%	$	42,704,111	100.0	%	$	(2,750,781	)	100.0	%

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Risk Management and Impairment Review

We monitor the overall credit quality of our portfolio within established guidelines. The following table includes our available-for-sale fixed maturities by credit rating as of March 31, 2019: 

			Percent of
Rating	Fair Value		Fair Value
	(Dollars In Thousands)
AAA	$	6,844,345	13.3	%
AA	5,997,527		11.7
A	17,777,769		34.7
BBB	19,049,406		37.1
Investment grade	49,669,047		96.8
BB	1,088,982		2.1
B	257,388		0.5
CCC or lower	268,474		0.6
Below investment grade	1,614,844		3.2
Total	$	51,283,891	100.0	%

Not included in the table above are $2.4 billion of investment grade and $120.7 million of below investment grade fixed maturities classified as trading securities and $2.6 billion of fixed maturities classified as held-to-maturity.

Limiting bond exposure to any creditor group is another way we manage credit risk. We held no credit default swaps on the positions listed below as of March 31, 2019. The following table summarizes our ten largest fixed maturity exposures to an individual creditor group as of March 31, 2019: 

	Fair Value of
	Funded		Unfunded		Total
Creditor	Securities		Exposures		Fair Value
	(Dollars In Millions)
Federal Home Loan Bank	$	327.3	$	—	$	327.3
Berkshire Hathaway Inc	249.3		—		249.3
AT&T Inc	248.4		—		248.4
Comcast Corp	232.6		—		232.6
Duke Energy Corp	230.0		—		230.0
UnitedHealth Group Inc	229.0		—		229.0
Wells Fargo & Co	220.3		—		220.3
JPMorgan Chase & Co	215.7		1.6		217.3
HSBC Holdings Plc	216.8		0.5		217.3
Exelon Corp	215.7		—		215.7
Total	$	2,385.1	$	2.1	$	2,387.2

Determining whether a decline in the current fair value of invested assets is an other-than-temporary decline in value is both objective and subjective, and can involve a variety of assumptions and estimates, particularly for investments that are not actively traded in established markets. We review our positions on a monthly basis for possible credit concerns and review our current exposure, credit enhancement, and delinquency experience.

Management considers a number of factors when determining the impairment status of individual securities. These include the economic condition of various industry segments and geographic locations and other areas of identified risks. Since it is possible for the impairment of one investment to affect other investments, we engage in ongoing risk management to safeguard against and limit any further risk to our investment portfolio. Special attention is given to correlative risks within specific industries, related parties, and business markets.

For certain securitized financial assets with contractual cash flows, including RMBS, CMBS, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”), GAAP requires us to periodically update our best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is less than its cost or amortized cost and there has been a decrease in the present value of the expected cash flows since the last revised estimate, considering both timing and amount, an other-than-temporary impairment charge is recognized. Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral. Projections of expected future cash flows may change based upon

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new information regarding the performance of the underlying collateral. In addition, we consider our intent and ability to retain a temporarily depressed security until recovery.

Securities in an unrealized loss position are reviewed at least quarterly to determine if an other-than-temporary impairment is present based on certain quantitative and qualitative factors. We consider a number of factors in determining whether the impairment is other-than-temporary. These include, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline, 4) an assessment of our intent to sell the security (including a more likely than not assessment of whether we will be required to sell the security) before recovering the security’s amortized cost, 5) the time period during which the decline has occurred, 6) an economic analysis of the issuer’s industry, and 7) the financial strength, liquidity, and recoverability of the issuer. Management performs a security-by-security review each quarter in evaluating the need for any other-than-temporary impairments. Although no set formula is used in this process, the investment performance, collateral position, and continued viability of the issuer are significant measures considered, along with an analysis regarding our expectations for recovery of the security’s entire amortized cost basis through the receipt of future cash flows. Based on our analysis, for the three months ended March 31, 2019, we recognized approximately $3.1 million of credit related impairments on investment securities in an unrealized loss position that were other-than-temporarily impaired resulting in a charge to earnings.

There are certain risks and uncertainties associated with determining whether declines in fair values are other-than-temporary. These include significant changes in general economic conditions and business markets, trends in certain industry segments, interest rate fluctuations, rating agency actions, changes in significant accounting estimates and assumptions, commission of fraud, and legislative actions. We continuously monitor these factors as they relate to the investment portfolio in determining the status of each investment.

We have deposits with certain financial institutions which exceed federally insured limits. We have reviewed the creditworthiness of these financial institutions and believe that there is minimal risk of a material loss.

Certain European countries have experienced varying degrees of financial stress, which could have a detrimental impact on regional or global economic conditions and on sovereign and non-sovereign obligations. The chart shown below includes our non-sovereign fair value exposures in these countries as of March 31, 2019. As of March 31, 2019, we had no material unfunded exposure and had no material direct sovereign exposure. 

					Total Gross
	Non-sovereign Debt				Funded
Financial Instrument and Country	Financial		Non-financial		Exposure
	(Dollars In Millions)
Securities:
United Kingdom	$	862.3	$	1,033.3	$	1,895.6
France	358.8		412.8		771.6
Netherlands	304.0		294.8		598.8
Germany	117.8		467.2		585.0
Switzerland	345.7		196.9		542.6
Spain	82.5		308.4		390.9
Belgium	—		176.2		176.2
Norway	4.1		145.1		149.2
Finland	146.5		—		146.5
Ireland	44.6		87.5		132.1
Italy	10.7		117.7		128.4
Luxembourg	—		68.4		68.4
Sweden	39.8		20.1		59.9
Denmark	38.4		—		38.4
Portugal	—		23.1		23.1
Total securities	2,355.2		3,351.5		5,706.7
Derivatives:
Germany	23.8		—		23.8
United Kingdom	17.9		—		17.9
Switzerland	7.3		—		7.3
France	1.1		—		1.1
Total derivatives	50.1		—		50.1
Total securities	$	2,405.3	$	3,351.5	$	5,756.8

89

Realized Gains and Losses

The following table sets forth realized investment gains and losses for the periods shown: 

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Fixed maturity gains - sales	$	7,870		$	8,049
Fixed maturity losses - sales	(2,753		)	(5,266		)
Equity gains and losses	30,717			(8,786		)
Impairments on fixed maturity securities	(3,142		)	(3,645		)
Impairments on equity securities	—			—
Modco trading portfolio	94,902			(84,709		)
Other	(1,146		)	3,113
Total realized gains (losses) - investments	126,448			(91,244		)
Derivatives related to VA contracts:
Interest rate futures	(6,022		)	(16,892		)
Equity futures	29,738			(6,428		)
Currency futures	2,244			(7,583		)
Equity options	(71,695		)	12,016
Interest rate swaptions	—			(14		)
Interest rate swaps	74,861			(63,710		)
Total return swaps	(40,027		)	6,490
Embedded derivative - GLWB	(19,626		)	56,292
Total derivatives related to VA contracts	(30,527		)	(19,829		)
Derivatives related to FIA contracts:
Embedded derivative	(38,814		)	11,330
Equity futures	(429		)	(161		)
Equity options	42,050			(4,669		)
Total derivatives related to FIA contracts	2,807			6,500
Derivatives related to IUL contracts:
Embedded derivative	(13,370		)	9,884
Equity futures	171			136
Equity options	6,180			(1,250		)
Total derivatives related to IUL contracts	(7,019		)	8,770
Embedded derivative - Modco reinsurance treaties	(84,998		)	82,658
Other derivatives	66			(40		)
Total realized gains (losses) - derivatives	(119,671		)	78,059
Total realized investment gains (losses)	$	6,777		$	(13,185	)

Realized gains and losses on investments reflect portfolio management activities designed to maintain proper matching of assets and liabilities and to enhance long-term investment portfolio performance. The change in net realized investment gains (losses), excluding impairments and Modco trading portfolio activity during the three months ended March 31, 2019, primarily reflects the normal operation of our asset/liability program within the context of the changing interest rate and spread environment.

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Realized losses are comprised of other-than-temporary impairments and actual sales of investments. These other-than-temporary impairments resulted from our analysis of circumstances and our belief that credit events, loss severity, changes in credit enhancement, and/or other adverse conditions of the respective issuers have caused, or will lead to, a deficiency in the contractual cash flows related to these investments. These other-than-temporary impairments are presented in the chart below: 

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Other MBS	$	(43	)	$	(31	)
Corporate securities	(3,099		)	(3,614		)
Equities	—			—
Other	—			—
Total	$	(3,142	)	$	(3,645	)

As previously discussed, management considers several factors when determining other-than-temporary impairments. Although we purchase securities with the intent to hold them until maturity, we may change our position as a result of a change in circumstances. Any such decision is consistent with our classification of all but a specific portion of our investment portfolio as available-for-sale. For the three months ended March 31, 2019, we sold securities in an unrealized loss position with a fair value of $178.0 million. For such securities, the proceeds, realized loss, and total time period that the security had been in an unrealized loss position are presented in the table below:

	Proceeds		% Proceeds		Realized Loss			% Realized Loss
	(Dollars In Thousands)
<= 90 days	$	160,870	90.4	%	$	(1,920	)	69.7	%
>90 days but <= 180 days	—		—		—			—
>180 days but <= 270 days	—		—		—			—
>270 days but <= 1 year	—		—		—			—
>1 year	17,134		9.6		(833		)	30.3
Total	$	178,004	100.0	%	$	(2,753	)	100.0	%

     For the three months ended March 31, 2019, we sold securities in an unrealized loss position with a fair value (proceeds) of $178.0 million. The loss realized on the sale of these securities was $2.8 million. We made the decision to exit these holdings in conjunction with our overall asset liability management process.

For the three months ended March 31, 2019, we sold securities in an unrealized gain position with a fair value of $648.9 million. The gain realized on the sale of these securities was $7.9 million.

For the three months ended March 31, 2019, net gains of $94.9 million related to changes in fair value on our Modco trading portfolios were included in realized gains and losses. Of this amount, approximately $1.4 million of gains were realized through the sale of certain securities, which will be reimbursed by our reinsurance partners over time through the reinsurance settlement process for this block of business. The Modco embedded derivative associated with the trading portfolios had realized pre-tax losses of $85.0 million during the three months ended March 31, 2019. The losses on the embedded derivative were due to treasury yields decreasing and credit spreads tightening.

Realized investment gains and losses related to equity securities is primarily driven by changes in fair value due to market fluctuations as changes in fair value of equity securities are recorded in net income.

Realized investment gains and losses related to derivatives represent changes in their fair value during the period and termination gains/(losses) on those derivatives that were closed during the period.

We use various derivative instruments to manage risks related to certain life insurance and annuity products. We can use these derivatives as economic hedges against risks inherent in the products. These risks have a direct impact on the cost of these products and are correlated with the equity markets, interest rates, foreign currency levels, and overall volatility. The hedged risks are recorded through the recognition of embedded derivatives associated with the products. These products include the GLWB rider associated with the variable annuity, fixed indexed annuity products as well as indexed universal life products. During the three months ended March 31, 2019, we experienced net realized losses on derivatives related to VA contracts of approximately $30.5 million. These net losses on derivatives related to VA contracts were affected by capital market impacts, changes in the Company’s non-performance risk, and variations in actual sub-account fund performance from the indices included in our hedging program during the three months ended March 31, 2019.

We also use various swaps and other types of derivatives to mitigate risk related to other exposures. These contracts generated gains of $0.1 millionfor the threemonths endedMarch 31, 2019.

91

LIQUIDITY AND CAPITAL RESOURCES

The Holding Company

Overview

Our primary sources of funding are dividends from our operating subsidiaries; revenues from investment management, data processing, legal, and management services rendered to subsidiaries; investment income; and external financing. These sources of cash support our general corporate needs including our common stock dividends and debt service.We did not pay a dividend for the three months ended March 31, 2019.

The states in which our insurance subsidiaries are domiciled impose certain restrictions on the insurance subsidiaries’ ability to pay us dividends. These restrictions are based in part on the prior year’s statutory income and/or surplus. Generally, these restrictions pose no short-term liquidity concerns. We plan to retain portions of the earnings of our insurance subsidiaries in those companies primarily to support their future growth.

Debt and other capital resources

Our primary sources of capital are through retained income from our operating subsidiaries, capital infusions from our parent, Dai-ichi Life, as well as our ability to access debt financing markets. Additionally, we have access to the Credit Facility discussed below.

On May 3, 2018, we amended the Credit Facility (as amended the “Credit Facility”). We have the ability to borrow under the Credit Facility on an unsecured basis up to an aggregate principal amount of $1.0 billion. We have the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.5 billion. We are not aware of any non-compliance with the financial debt covenants of the Credit Facility as of March 31, 2019. There was no outstanding balance as of March 31, 2019.

Liquidity

Liquidity refers to a company’s ability to generate adequate amounts of cash to meet its needs. We meet our liquidity requirements primarily through positive cash flows from our operating subsidiaries. Primary sources of cash from the operating subsidiaries are premiums, deposits for policyholder accounts, investment sales and maturities, and investment income. Primary uses of cash include benefit payments, withdrawals from policyholder accounts, investment purchases, policy acquisition costs, interest payments, and other operating expenses. We believe that we have sufficient liquidity to fund our cash needs under normal operating scenarios.

In the event of significant unanticipated cash requirements beyond our normal liquidity needs, we have additional sources of liquidity available depending on market conditions and the amount and timing of the liquidity need. These additional sources of liquidity include cash flows from operations, the sale of liquid assets, accessing our credit facility, and other sources described herein. Our decision to sell investment assets could be impacted by accounting rules, including rules relating to the likelihood of a requirement to sell securities before recovery of our cost basis. Under stressful market and economic conditions, liquidity may broadly deteriorate, which could negatively impact our ability to sell investment assets. If we require on short notice significant amounts of cash in excess of normal requirements, we may have difficulty selling investment assets in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both.

The liquidity requirements of our regulated insurance subsidiaries primarily relate to the liabilities associated with their various insurance and investment products, operating expenses, and income taxes. Liabilities arising from insurance and investment products include the payment of policyholder benefits, as well as cash payments in connection with policy surrenders and withdrawals, policy loans, and obligations to redeem funding agreements.

Our insurance subsidiaries maintain investment strategies intended to provide adequate funds to pay benefits and expected surrenders, withdrawals, loans, and redemption obligations without forced sales of investments. In addition, our insurance subsidiaries hold highly liquid, high-quality short-term investment securities and other liquid investment grade fixed maturity securities to fund our expected operating expenses, surrenders, and withdrawals. As of March 31, 2019, our total cash and invested assets were $68.3 billion. The life insurance subsidiaries were committed as of March 31, 2019, to fund mortgage loans in the amount of $871.6 million.

Our cash flows are used to fund an investment portfolio that provides for future benefit payments. We employ a formal asset/liability program to manage the cash flows of our investment portfolio relative to our long-term benefit obligations. The holding company held $116.7 million of cash and short-term investments, and our subsidiaries held approximately $859.2 million in cash and short-term investments as of March 31, 2019.

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The following chart includes the cash flows provided by or used in operating, investing, and financing activities for the following periods:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Net cash used in operating activities	$	(11,459	)	$	(82,824	)
Net cash provided by investing activities	62,773			8,552
Net cash provided by financing activities	55,222			129,686
Total	$	106,536		$	55,414

For The Three Months Ended March 31, 2019 as compared to the Three Months Ended March 31, 2018

Net cash provided by (used in) operating activities-Cash flows from operating activities are affected by the timing of premiums received, investment income, and benefits and expenses paid. Principal sources of cash inflows from operating activities include sales of our products and services as well as income from investments. Due to the nature of our business and the fact that many of the products we sell produce financing and investing cash flows it is important to consider cash flows generated by investing and financing activities in conjunction with those generated by operating activities.

Net cash provided by investing activities - Changes in cash from investing activities primarily related to our investment portfolio.

Net cash provided by financing activities - Changes in cash from financing activities included $311.3 million of outflows from secured financing liabilities for the three months ended March 31, 2019, as compared to the $238.8 million of outflows for the three months ended March 31, 2018 and $401.1 million inflows of investment product and universal life net activity as compared to $363.0 million in the prior year. Net activity related to the Credit Facility resulted in outflows of $9.3 million for the three months ended March 31, 2019, as compared to $163.6 million of inflows for three months ended March 31, 2018. Net repayment of non-recourse funding obligations equaled $25.0 million during the three months ended March 31, 2019, as compared to $18.0 million during the three months ended March 31, 2018. The Company did not pay a dividend during the three month period ended March 31, 2019, as compared to a dividend of $140.0 million during the three months ended March 31, 2018.

Through our subsidiaries, we are members of the FHLB of Cincinnati and the FHLB of New York. FHLB advances provide an attractive funding source for short-term borrowing and for the sale of funding agreements. Membership in the FHLB requires that we purchase FHLB capital stock based on a minimum requirement and a percentage of the dollar amount of advances outstanding. Our borrowing capacity is determined by criteria established by each respective bank. In addition, our obligations under the advances must be collateralized. We maintain control over any such pledged assets, including the right of substitution. As of March 31, 2019, we had $1.2 billion of funding agreement-related advances and accrued interest outstanding under the FHLB program.

While we anticipate that the cash flows of our operating subsidiaries will be sufficient to meet our investment commitments and operating cash needs in a normal credit market environment, we recognize that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, we have established repurchase agreement programs for certain of our insurance subsidiaries to provide liquidity when needed. We expect that the rate received on its investments will equal or exceed its borrowing rate. Under this program, we may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The fair value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provide for net settlement in the event of default or on termination of the agreements. As of March 31, 2019, the fair value of securities pledged under the repurchase program was $92.9 million and the repurchase obligation of $89.3 million was included in our consolidated condensed balance sheets (at an average borrowing rate of 254 basis points). During the three months ended March 31, 2019, the maximum balance outstanding at any one point in time related to these programs was $473.3 million. The average daily balance was $203.1 million (at an average borrowing rate of 249 basis points) during the three months ended March 31, 2019. As of December 31, 2018, the fair value of securities pledged under the repurchase program was $451.9 million and the repurchase obligation of $418.1 million was included in our consolidated condensed balance sheets (at an average borrowing rate of 245 basis points). During the year ended December 31, 2018, the maximum balance outstanding at any one point in time related to these programs was $885.0 million. The average daily balance was $511.4 million (at an average borrowing rate of 184 basis points) during the year ended December 31, 2018.

We participate in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. We require initial collateral of 102% of the market value of the loaned securities to be separately maintained. The loaned securities’ fair value is monitored on a daily basis. As of March 31, 2019, securities with a market value of $89.0 million were loaned under this program. As collateral for the loaned securities, we receive short-term investments, which are recorded in short-term investments with a corresponding liability recorded in other liabilities to account for its obligation to return the collateral. As of March 31, 2019, the fair value of the collateral related to this program was $94.7 million and we have an obligation to return $94.7 million of collateral to the securities borrowers.

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Statutory Capital

A life insurance company’s statutory capital is computed according to rules prescribed by the NAIC, as modified by state law. Generally speaking, other states in which a company does business defer to the interpretation of the domiciliary state with respect to NAIC rules, unless inconsistent with the other state’s regulations. Statutory accounting rules are different from GAAP and are intended to reflect a more conservative view, for example, requiring immediate expensing of policy acquisition costs. The NAIC’s risk-based capital requirements require insurance companies to calculate and report information under a risk-based capital formula. The achievement of long-term growth will require growth in the statutory capital of our insurance subsidiaries. The subsidiaries may secure additional statutory capital through various sources, such as retained statutory earnings or our equity contributions. In general, dividends up to specified levels are considered ordinary and may be paid without prior approval of the insurance commissioner of the state of domicile. Dividends in larger amounts are considered extraordinary and are subject to affirmative prior approval by such commissioner. The maximum amount that would qualify as an ordinary dividend to us from our insurance subsidiaries in 2019 is approximately $434.0 million.

State insurance regulators and the NAIC have adopted risk-based capital (“RBC”) requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. A company’s risk-based statutory surplus is calculated by applying factors and performing calculations relating to various asset, premium, claim, expense, and reserve items. Regulators can then measure the adequacy of a company’s statutory surplus by comparing it to RBC. We manage our capital consumption by using the ratio of our total adjusted capital, as defined by the insurance regulators, to our company action level RBC (known as the RBC ratio), also as defined by insurance regulators.

Statutory reserves established for VA contracts are sensitive to changes in the equity markets and are affected by the level of account values relative to the level of any guarantees and product design. As a result, the relationship between reserve changes and equity market performance may be non-linear during any given reporting period. Market conditions greatly influence the capital required due to their impact on the valuation of reserves and derivative investments mitigating the risk in these reserves. Risk mitigation activities may result in material and sometimes counterintuitive impacts on statutory surplus and RBC ratio. Notably, as changes in these market and non-market factors occur, both our potential obligation and the related statutory reserves and/or required capital can vary at a non-linear rate.

Our statutory surplus is impacted by credit spreads as a result of accounting for the assets and liabilities on our fixed market value adjusted (“MVA”) annuities. Statutory separate account assets supporting the fixed MVA annuities are recorded at fair value. In determining the statutory reserve for the fixed MVA annuities, we are required to use current crediting rates based on U.S. Treasuries. In many capital market scenarios, current crediting rates based on U.S. Treasuries are highly correlated with market rates implicit in the fair value of statutory separate account assets. As a result, the change in the statutory reserve from period to period will likely substantially offset the change in the fair value of the statutory separate account assets. However, in periods of volatile credit markets, actual credit spreads on investment assets may increase or decrease sharply for certain sub-sectors of the overall credit market, resulting in statutory separate account asset market value gains or losses. As actual credit spreads are not fully reflected in current crediting rates based on U.S. Treasuries, the calculation of statutory reserves will not substantially offset the change in fair value of the statutory separate account assets resulting in a change in statutory surplus.

We cede material amounts of insurance and transfer related assets to other insurance companies through reinsurance. However, notwithstanding the transfer of related assets, we remain liable with respect to ceded insurance should any reinsurer fail to meet the obligations that it assumed. We evaluate the financial condition of our reinsurers and monitor the associated concentration of credit risk. For the three months ended March 31, 2019, we ceded premiums to third party reinsurers amounting to $318.4 million. In addition, we had receivables from reinsurers amounting to $4.7 billion as of March 31, 2019. We review reinsurance receivable amounts for collectability and establish bad debt reserves if deemed appropriate.

Scottish Re (U.S.), Inc. ("SRUS") was placed in rehabilitation on March 6, 2019 by the State of Delaware. Under the related order, the Insurance Commissioner of the State of Delaware has been appointed the receiver of SRUS and provided with authority to conduct and continue the business of SRUS in the interest of its cedents, creditors, and stockholder. The order was accompanied by an injunction requiring the continued payment of reinsurance premiums to SRUS and temporarily prohibiting cedents, including the Company, from offsetting premiums payable against receivables from SRUS.

As of March 31, 2019, we had outstanding claims receivable from SRUS of $13.4 million, and other exposures associated with GAAP reinsurance receivables of approximately $106.8 million, and statutory reserve credit of approximately $127.2 million. We continue to monitor both the financial health of SRUS and the actions of the receiver through discussions with legal counsel and review of publicly available information. We have considered the possible impact of an adverse outcome of the rehabilitation process and believes an adverse outcome would not have a material adverse impact on our operations, liquidity or financial condition.

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Captive Reinsurance Companies

Our life insurance subsidiaries are subject to a regulation entitled “Valuation of Life Insurance Policies Model Regulation,” commonly known as “Regulation XXX,” and a supporting guideline entitled “The Application of the Valuation of Life Insurance Policies Model Regulation,” commonly known as “Guideline AXXX.” The regulation and supporting guideline require insurers to establish statutory reserves for term and universal life insurance policies with long-term premium guarantees that are consistent with the statutory reserves required for other individual life insurance policies with similar guarantees. Many market participants believe that these levels of reserves are non-economic. We use captive reinsurance companies to implement reinsurance and capital management actions to satisfy these reserve requirements by financing the non-economic reserves either through the issuance of non-recourse funding obligations by the captives or obtaining letters of credit from third-party financial institutions.

Our captive reinsurance companies assume business from affiliates only. Our captives are capitalized to a level we believe is sufficient to support the contractual risks and other general obligations of the respective captive entity. All of our captive reinsurance companies are wholly owned subsidiaries and are located domestically. The captive insurance companies are subject to regulations in the state of domicile.

The National Association of Insurance Commissioners (“NAIC”), through various committees, subgroups and dedicated task forces, is reviewing the use of captives and special purpose vehicles used to transfer insurance risk in relation to existing state laws and regulations, and several committees have adopted or exposed for comment white papers and reports that, if or when implemented, could impose additional requirements on the use of captives and other reinsurers. The Financial Condition (E) Committee of the NAIC established a Variable Annuity Issues Working Group to examine company use of variable annuity captives. The Committee has proposed changes in the regulation of variable annuities and variable annuity captives, which could adversely affect our future financial condition and results of operations if adopted.

The NAIC has adopted Actuarial Guideline XLVIII (“AG48”) and the substantially similar “Term and Universal Life Insurance Reserve Financing Model Regulation” (the “Reserve Model”) which establish national standards for new reserve financing arrangements for term life insurance and universal life insurance with secondary guarantees. AG48 and the Reserve Model govern collateral requirements for captive reinsurance arrangements. In order to obtain reserve credit, AG48 and the Reserve Model require a minimum level of funds, consisting of primary and other securities, to be held by or on behalf of ceding insurers as security under each captive life reinsurance treaty. As a result of AG48 and the Reserve Model, the implementation of new captive structures in the future may be less capital efficient, lead to lower product returns and/or increased product pricing or result in reduced sales of certain products. In some circumstances, AG48 and the Reserve Model could impact the Company’s ability to engage in certain reinsurance transactions with non-affiliates.

We also use a captive reinsurance company to reinsure risks associated with GLWB and guaranteed minimum death benefits (“GMDB”) riders which helps us to manage those risks on an economic basis. In an effort to mitigate the equity market risks relative to our RBC ratio, in the fourth quarter of 2012, we established an insurance subsidiary, Shades Creek Captive Insurance Company (“Shades Creek”), to which PLICO has reinsured GLWB and GMDB riders related to its VA contracts. The purpose of Shades Creek is to reduce the volatility in RBC due to non-economic variables included within the RBC calculation.

We maintain an intercompany capital support agreement with Shades Creek that provides through a guarantee that we will contribute assets or purchase surplus notes (or cause an affiliate or third party to contribute assets or purchase surplus notes) in amounts necessary for Shades Creek’s regulatory capital levels to equal or exceed minimum thresholds as defined by the agreement. As of March 31, 2019, Shades Creek maintained capital levels in excess of the required minimum thresholds. The maximum potential future payment amount which could be required under the capital support agreement will be dependent on numerous factors, including the performance of equity markets, the level of interest rates, performance of associated hedges, and related policyholder behavior.

Ratings

Various Nationally Recognized Statistical Rating Organizations (“rating organizations”) review the financial performance and condition of insurers, including our insurance subsidiaries, and publish their financial strength ratings as indicators of an insurer’s ability to meet policyholder and contract holder obligations. These ratings are important to maintaining public confidence in an insurer’s products, its ability to market its products and its competitive position. The following table summarizes the current financial strength ratings of our significant member companies from the major independent rating organizations:

			Standard &
Ratings	A.M. Best	Fitch	Poor’s	Moody’s
Insurance company financial strength rating:
Protective Life Insurance Company	A+	A+	AA-	A1
West Coast Life Insurance Company	A+	A+	AA-	A1
Protective Life and Annuity Insurance Company	A+	A+	AA-	—
Protective Property & Casualty Insurance Company	A	—	—	—
MONY Life Insurance Company	A+	A+	A+	A1

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Our ratings are subject to review and change by the rating organizations at any time and without notice. A downgrade or other negative action by a rating organization with respect to the financial strength ratings of our insurance subsidiaries could adversely affect sales, relationships with distributors, the level of policy surrenders and withdrawals, competitive position in the marketplace, and the cost or availability of reinsurance. The rating agencies may take various actions, positive or negative, with respect to the financial strength ratings of our insurance subsidiaries, including as a result of our status as a subsidiary of Dai-ichi Life.

Rating organizations also publish credit ratings for the issuers of debt securities, including the Company. Credit ratings are indicators of a debt issuer’s ability to meet the terms of debt obligations in a timely manner. These ratings are important in the debt issuer’s overall ability to access credit markets and other types of liquidity. Ratings are not recommendations to buy our securities or products. A downgrade or other negative action by a rating organization with respect to our credit rating could limit our access to capital markets, increase the cost of issuing debt, and a downgrade of sufficient magnitude, combined with other negative factors, could require us to post collateral. The rating organizations may take various actions, positive or negative, with respect to our debt ratings, including as a result of our status as a subsidiary of Dai-ichi Life.

LIABILITIES

Many of our products contain surrender charges and other features that are designed to reward persistency and penalize the early withdrawal of funds. Certain stable value and annuity contracts have market-value adjustments that protect us against investment losses if interest rates are higher at the time of surrender than at the time of issue.

As of March 31, 2019, we had policy liabilities and accruals of approximately $43.0 billion. Our interest-sensitive life insurance policies have a weighted average minimum credited interest rate of approximately 3.46%.

Contractual Obligations

We enter into various obligations to third parties in the ordinary course of our operations. However, we do not believe that our cash flow requirements can be assessed solely based upon an analysis of these obligations. The most significant factors affecting our future cash flows are our ability to earn and collect cash from our customers, and the cash flows arising from our investment program. Future cash outflows, whether they are contractual obligations or not, will also vary based upon our future needs. Although some outflows are fixed, others depend on future events. Examples of fixed obligations include our obligations to pay principal and interest on fixed-rate borrowings. Examples of obligations that will vary include obligations to pay interest on variable-rate borrowings and insurance liabilities that depend on future interest rates, market performance, or surrender provisions. Many of our obligations are linked to cash-generating contracts. In addition, our operations involve significant expenditures that are not based upon contractual obligations. These include expenditures for income taxes and payroll.

As of March 31, 2019, we carried a $7.4 million liability for uncertain tax positions, including interest on unrecognized tax benefits. These amounts are not included in the long-term contractual obligations table because of the difficulty in making reasonably reliable estimates of the occurrence or timing of cash settlements with the respective taxing authorities.

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The table below sets forth future maturities of our contractual obligations: 

			Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(Dollars In Thousands)
Debt(1)	$	1,473,785	$	448,450	$	64,942	$	64,942	$	895,451
Non-recourse funding obligations(2)	4,257,260		295,486		670,623		598,238		2,692,913
Subordinated debt(3)	1,576,930		30,655		61,310		61,310		1,423,655
Stable value products(4)	5,857,459		1,010,189		3,506,367		1,206,750		134,153
Leases(5)	24,646		5,501		8,040		6,499		4,606
Mortgage loan and investment commitments	981,164		765,406		215,758		—		—
Secured financing liabilities(6)	184,036		184,036		—		—		—
Policyholder obligations(7)	56,665,212		3,099,775		7,580,450		6,100,213		39,884,774
Total(8)	$	71,020,492	$	5,839,498	$	12,107,490	$	8,037,952	$	45,035,552
(1) Debt includes all principal amounts owed on note agreements and expected interest payments due over the term of the notes.
(2) Non-recourse funding obligations include all undiscounted principal amounts owed and expected future interest payments due over the term of the notes. Of the total undiscounted cash flows, $1.7 billion relates to the Golden Gate V transaction. These cash outflows are matched and predominantly offset by the cash inflows Golden Gate V receives from notes issued by a nonconsolidated variable interest entity. Additionally, $2.5 billion relates to the Golden Gate transaction. These cash outflows are matched and predominantly offset by the cash inflows Golden Gate receives from notes issued by a nonconsolidated variable interest entity. The remaining amounts are associated with the Golden Gate II notes held by third parties as well as certain obligations assumed with the acquisition of MONY Life Insurance Company.
(3) Subordinated debt includes all principal amounts and interest payments due over the term of the obligations.
(4) Anticipated stable value products includes cash flows including interest.
(5) Includes all lease payments required under operating and finance lease agreements.
(6) Represents secured borrowings and accrued interest as part of our repurchase program as well as liabilities associated with securities lending transactions.
(7) Estimated contractual policyholder obligations are based on mortality, morbidity, and lapse assumptions comparable to our historical experience, modified for recent observed trends. These obligations are based on current balance sheet values and include expected interest crediting, but do not incorporate an expectation of future market growth, or future deposits. Due to the significance of the assumptions used, the amounts presented could materially differ from actual results. As variable separate account obligations are legally insulated from general account obligations, the variable separate account obligations will be fully funded by cash flows from variable separate account assets. We expect to fully fund the general account obligations from cash flows from general account investments.
(8) Excluded from this table are certain pension obligations.

OFF-BALANCE SHEET ARRANGEMENTS

We have entered into indemnity agreements with each of our directors as well as operating leases that do not result in an obligation being recorded on the balance sheet. Refer to Note 12, Commitments and Contingencies, of the consolidated condensed financial statements for more information on our indemnity agreements.

MARKET RISK EXPOSURES

Our financial position and earnings are subject to various market risks including changes in interest rates, the yield curve, spreads between risk-adjusted and risk-free interest rates, foreign currency rates, used vehicle prices, equity price risks and issuer defaults. We analyze and manage the risks arising from market exposures of financial instruments, as well as other risks, through an integrated asset/liability management process. The primary focus of our asset/liability program is the management of interest rate risk within the insurance operations. Our asset/liability management programs and procedures involve the monitoring of asset and liability durations for various product lines; cash flow testing under various interest rate scenarios; and the continuous rebalancing of assets and liabilities with respect to yield, credit and market risk, and cash flow characteristics to maintain an appropriate balance between risk and profitability for each product category, and for us as a whole.

It is our policy to maintain asset and liability durations within one year of one another, although, from time to time, a broader interval may be allowed.

We are exposed to credit risk within our investment portfolio and through derivative counterparties. Credit risk relates to the uncertainty of an obligor’s continued ability to make timely payments in accordance with the contractual terms of the instrument or contract. We manage credit risk through established investment policies which attempt to address quality of obligors and counterparties, credit concentration limits, diversification requirements, and acceptable risk levels under expected and stressed scenarios. Derivative counterparty credit risk is measured as the amount owed to us, net of collateral held, based upon current market conditions. In addition, we periodically assess exposure related to potential payment obligations between us and our counterparties. We minimize the credit risk in derivative financial instruments by entering into transactions with high quality

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counterparties (A-rated or higher at the time we enter into the contract), and we maintain credit support annexes with certain of those counterparties.

We utilize a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through our analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into our risk management program. See Note 7, Derivative Financial Instruments, to the consolidated financial statements included in this report for additional information on our financial instruments.

Derivative instruments expose us to credit and market risk and could result in material changes from period to period. We attempt to minimize our credit risk by entering into transactions with highly rated counterparties. We manage the market risk by establishing and monitoring limits as to the types and degrees of risk that may be undertaken. We monitor our use of derivatives in connection with our overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department.

Derivative instruments that are used as part of our interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions.

Derivative instruments that are used as part of the Company’s foreign currency exchange risk management strategy include foreign currency swaps, foreign currency futures, foreign equity futures, and foreign equity options.

We may use the following types of derivative contracts to mitigate our exposure to certain guaranteed benefits related to VA contracts, fixed indexed annuities, and indexed universal life:

•Foreign Currency Futures

•Variance Swaps

•Interest Rate Futures

•Equity Options

•Equity Futures

•Credit Derivatives

•Interest Rate Swaps

•Interest Rate Swaptions

•Volatility Futures

•Volatility Options

•Total Return Swaps

We believe that our asset/liability management programs and procedures and certain product features provide protection against the effects of changes in interest rates under various scenarios. Additionally, we believe our asset/liability management programs and procedures provide sufficient liquidity to enable us to fulfill our obligation to pay benefits under our various insurance and deposit contracts. However, our asset/liability management programs and procedures incorporate assumptions about the relationship between short-term and long-term interest rates (i.e., the slope of the yield curve), relationships between risk-adjusted and risk-free interest rates, market liquidity, spread movements, implied volatility, policyholder behavior, and other factors, and the effectiveness of our asset/liability management programs and procedures may be negatively affected whenever actual results differ from those assumptions.

     In the ordinary course of our commercial mortgage lending operations, we may commit to provide a mortgage loan before the property to be mortgaged has been built or acquired. The mortgage loan commitment is a contractual obligation to fund a mortgage loan when called upon by the borrower. The commitment is not recognized in our financial statements until the commitment is actually funded. The mortgage loan commitment contains terms, including the rate of interest, which may be different than prevailing interest rates. As of March 31, 2019, we had outstanding mortgage loan commitments of $871.6 million at an average rate of 5.31%.

Impact of Continued Low Interest Rate Environment

Significant changes in interest rates expose us to the risk of not realizing anticipated spreads between the interest rate earned on investments and the interest rate credited to in-force policies and contracts. In addition, certain of our insurance and investment products guarantee a minimum guaranteed interest rate (“MGIR”). In periods of prolonged low interest rates, the interest spread earned may be negatively impacted to the extent our ability to reduce policyholder crediting rates is limited by the guaranteed minimum credited interest rates. Additionally, those policies without account values may exhibit lower profitability in periods of prolonged low interest rates due to reduced investment income.

The tables below present account values by range of current minimum guaranteed interest rates and current crediting rates for our universal life and deferred fixed annuity products as of March 31, 2019, and December 31, 2018: 

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Credited Rate Summary

As of March 31, 2019

				1-50 bps			More than
Minimum Guaranteed Interest Rate	At			above			50 bps
Account Value	MGIR			MGIR			above MGIR			Total
	(Dollars In Millions)
Universal Life Insurance
>2% - 3%	$	2,386		$	1,366		$	1,989		$	5,741
>3% - 4%	4,516			884			491			5,891
>4% - 5%	2,425			437			1			2,863
>5% - 6%	186			—			—			186
Subtotal	9,513			2,687			2,481			14,681
Fixed Annuities
1%	$	262		$	598		$	2,212		$	3,072
>1% - 2%	349			152			1,299			1,800
>2% - 3%	1,634			106			2			1,742
>3% - 4%	257			4			—			261
>4% - 5%	259			—			—			259
>5% - 6%	2			—			—			2
Subtotal	2,763			860			3,513			7,136
Total	$	12,276		$	3,547		$	5,994		$	21,817
Percentage of Total	56		%	16		%	28		%	100		%

Credited Rate Summary

As of December 31, 2018

				1-50 bps			More than
Minimum Guaranteed Interest Rate	At			above			50 bps
Account Value	MGIR			MGIR			above MGIR			Total
	(Dollars In Millions)
Universal Life Insurance
>2% - 3%	$	2,392		$	1,322		$	2,031		$	5,745
>3% - 4%	4,512			924			499			5,935
>4% - 5%	2,445			435			1			2,881
>5% - 6%	188			—			—			188
Subtotal	9,537			2,681			2,531			14,749
Fixed Annuities
1%	$	341		$	584		$	2,278		$	3,203
>1% - 2%	370			165			1,145			1,680
>2% - 3%	1,686			102			3			1,791
>3% - 4%	261			4			—			265
>4% - 5%	260			—			—			260
>5% - 6%	2			—			—			2
Subtotal	2,920			855			3,426			7,201
Total	$	12,457		$	3,536		$	5,957		$	21,950
Percentage of Total	57		%	16		%	27		%	100		%

We are active in mitigating the impact of a continued low interest rate environment through product design, as well as adjusting crediting rates on current in-force policies and contracts. We also manage interest rate and reinvestment risks through our asset/liability management process. Our asset/liability management programs and procedures involve the monitoring of asset and liability durations; cash flow testing under various interest rate scenarios; and the regular rebalancing of assets and liabilities

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with respect to yield, credit and market risk, and cash flow characteristics. These programs also incorporate the use of derivative financial instruments primarily to reduce our exposure to interest rate risk, inflation risk, currency exchange risk, volatility risk, and equity market risk.

IMPACT OF INFLATION

Inflation increases the need for life insurance. Many policyholders who once had adequate insurance programs may increase their life insurance coverage to provide the same relative financial benefit and protection. Higher interest rates may result in higher sales of certain of our investment products.

The higher interest rates that have traditionally accompanied inflation could also affect our operations. Policy loans increase as policy loan interest rates become relatively more attractive. As interest rates increase, disintermediation of stable value and annuity account balances and individual life policy cash values may increase. The market value of our fixed-rate, long-term investments may decrease, we may be unable to implement fully the interest rate reset and call provisions of our mortgage loans, and our ability to make attractive mortgage loans, including participating mortgage loans, may decrease. In addition, participating mortgage loan income may decrease. The difference between the interest rate earned on investments and the interest rate credited to life insurance and investment products may also be adversely affected by rising interest rates. During the periods covered by this report, we believe inflation has not had a material impact on our business.

RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 2, Summary of Significant Accounting Policies, to the consolidated condensed financial statements for information regarding recently issued accounting standards.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

See Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations,  “Liquidity and Capital Resources”.

Item 4.    Controls and Procedures

(a)    Disclosure controls and procedures

In order to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized, and reported on a timely basis, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as such term is defined in Rule 13a -15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), except as otherwise noted below. Based on their evaluation as of the end of the period covered by this Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective. It should be noted that any system of controls, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of any control system is based in part upon certain judgments, including the costs and benefits of controls and the likelihood of future events. Because of these and other inherent limitations of control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within the Company have been detected.

In conducting our evaluation of the effectiveness of internal control over financial reporting as of March 31, 2019, the Company has excluded those controls at Liberty Life Assurance Company of Boston (“Liberty Life”) that relate to systems and processes for assets and liabilities of the acquired business that were not integrated into our existing systems and internal control over financial reporting. The portion of the business not integrated into our existing systems and controls represents approximately $472.8 million of consolidated assets, approximately $80.1 million of consolidated revenue, approximately $182.7 million of consolidated benefits and expenses, and approximately $13.6 million of liabilities on the related consolidated financial statements.

(b)    Changes in internal control over financial reporting

During the second quarter of 2018, the Company began the conversion and integration of administrative processing into its internal controls over financial reporting for the Liberty block of business. The conversion to the Company’s operating environment was in process as of March 31, 2019.    

There were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2019, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s internal controls exist within a dynamic environment and the Company continually strives to improve its internal controls and procedures to enhance the quality of its financial reporting.

PART II

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Item 1A.    Risk Factors

The operating results of companies in the insurance industry have historically been subject to significant fluctuations. The factors which could affect the Company’s future results include, but are not limited to, general economic conditions and known trends and uncertainties. In addition to other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A, Risk Factors, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which could materially affect the Company’s business, financial condition, or future results of operations which are discussed more fully below.

Risks Related to the Financial Environment

The Company may be required to establish a valuation allowance against its deferred tax assets, which could have a material adverse effect on the Company’s results of operations, financial condition, and capital position.

Deferred tax assets are attributable to certain differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets represent future financial statement tax expense which will not be paid in cash. In general, the realization of deferred tax assets is dependent upon the generation of sufficient future ordinary and capital taxable income. Realization may also be limited for other reasons, including but not limited to changes in the tax law. If it is determined that a certain deferred tax asset cannot be realized, then a deferred tax valuation allowance is established, with a corresponding charge to either adjusted operating income or other comprehensive income (depending on the nature of the deferred tax asset).

Based on the Company’s current assessment of future taxable income, including available tax planning opportunities, it is more likely than not that the Company will generate sufficient taxable income to realize its material deferred tax assets net of any existing valuation allowance. The Company has recognized valuation allowances of $7.3 million and $6.4 million as of March 31, 2019 and December 31, 2018, respectively, related to certain deferred tax assets which are more likely than not to expire unutilized. These assets are state income tax-related. If future events differ from the Company’s current expectations, an additional valuation allowance to be established, which could have a material adverse effect on the Company’s results of operations, financial condition, or capital position.

Laws, regulations, and initiatives related to unreported deaths and unclaimed property and death benefits may result in operational burdens, fines, unexpected payments, or escheatments.

Since 2012, various states have enacted laws that require life insurers to search for unreported deaths. The National Conference of Insurance Legislators (“NCOIL”) has adopted the Model Unclaimed Life Insurance Benefits Act (the “Unclaimed Benefits Act”) and legislation or regulations have been enacted in numerous states that are similar to the Unclaimed Benefits Act, although each state’s version differs in some respects. The Unclaimed Benefits Act, if adopted by any state, imposes requirements on insurers to periodically compare their life insurance and annuity contracts and retained asset accounts against the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”), investigate any potential matches to confirm the death and determine whether benefits are due, and to attempt to locate the beneficiaries of any benefits that are due or, if no beneficiary can be located, escheat the benefit to the state as unclaimed property. Other states in which the Company does business may also consider adopting legislation similar to the Unclaimed Benefits Act. The Company cannot predict whether such legislation will be proposed or enacted in additional states.

The Uniform Laws Commission has adopted revisions to the Uniform Unclaimed Property Act in a manner likely to impact state unclaimed property laws and requirements, though it is not clear at this time to what extent or whether requirements will conflict with otherwise imposed search requirements. Other life insurance industry associations and regulatory associations are also considering these matters. Certain states have amended or may amend their unclaimed property laws in a manner which creates additional obligations for life insurance companies. The enactment or amendment of such unclaimed property laws may require the Company to incur significant expenses, including benefits with respect to terminated policies for which no reserves are currently held and unanticipated operational expenses. Any of the foregoing could have a material adverse effect on the Company’s financial condition and results of operations.

A number of state treasury departments and administrators of unclaimed property have audited life insurance companies for compliance with unclaimed property laws, and state insurance regulators have initiated targeted multi-state examinations of life insurance companies with respect to the companies’ claims paying practices and use of a Death Database to identify unreported deaths in their life insurance policies, annuity contracts, and retained asset accounts. There is no clear basis in previously existing law for treating an unreported death as giving rise to a policy benefit that would be subject to unclaimed property procedures. However, a number of life insurers have entered into resolution agreements with state treasury departments and administrators of unclaimed property or settlement or consent agreements with state insurance regulators. The amounts publicly reported to have been paid to beneficiaries, escheated to the states, and/or paid as administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements have been substantial.

Certain of the Company’s subsidiaries as well as certain other insurance companies from whom the Company has coinsured blocks of life insurance and annuity policies are subject to unclaimed property audits and/or targeted multi-state examinations by insurance regulators similar to those described above. It is possible that the audits, examinations, and/or the enactment of state laws similar to the Unclaimed Benefits Act could result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, payment of administrative penalties and/or examination fees to state authorities, and changes to the Company’s procedures for identifying unreported deaths and escheatment of abandoned property. It is possible any such additional payments and any costs related to changes in Company procedures could materially impact the Company’s financial condition and/or results of operations. It is also possible that life insurers, including the Company, may be subject to claims,

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regulatory actions, law enforcement actions, and civil litigation arising from their prior business practices, unclaimed property practices, or related audits and examinations. Any resulting liabilities, payments, or costs, including initial and ongoing costs of changes to the Company’s procedures or systems, could be significant and could have a material adverse effect on the Company’s financial condition and/or results of operations.

The Company has been subject to litigation regarding compliance with the West Virginia Uniform Unclaimed Property Act, but the Company does not believe that losses arising from the litigation will be material. The Company cannot, however, predict whether other jurisdictions will pursue similar actions or if they do, whether such actions will have a material impact on the Company’s financial condition and/or results of operations.

The Company is subject to insurance guaranty fund laws, rules and regulations that could adversely affect the Company’s financial condition or results of operations.

Under insurance guaranty fund laws in most states, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. From time to time, companies may be asked to contribute amounts beyond prescribed limits. It is possible that the Company could be assessed with respect to product lines not offered by the Company. In 2017, the NAIC adopted revisions to the Life and Health Insurance Guaranty Association Model Act that, if adopted by states, would result in an increase to the percentage of liabilities attributable to any future long term care provider insolvency that can be assessed to life insurers. Legislation may be introduced in various states with respect to guaranty fund assessment laws related to insurance products, including long term care insurance and other specialty products, that differs from the revised Model Act and which increases the cost of future assessments and/or alters future premium tax offsets received in connection with guaranty fund assessments. Additionally, judicial review may affect liquidation orders against insolvent companies, which could impact the guaranty fund system. The Company cannot predict the amount, nature or timing of any future assessments or legislation, any of which could have a material and adverse impact on the Company’s financial condition or results of operations.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter ended March 31, 2019, the Company sold no equity securities in transactions which were not registered under the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer

During the quarter ended March 31, 2019, 100% of the Company’s common stock was owned by Dai-ichi Life Holdings, Inc., and was not available for repurchase by the Company.

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Item 6.    Exhibits

Exhibit
Number
2.1*±	Master Transaction Agreement, dated as of January 23, 2019, by and among Protective Life Insurance Company, Great-West Life & Annuity Insurance Company, Great-West Life & Annuity Insurance Company of New York, The Canada Life Assurance Company and The Great-West Life Assurance Company, incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed January 25, 2019 (No. 001-11339).
3.1*	Certificate of Incorporation of the Company effective as of February 1, 2015, incorporated by reference to Exhibit 3(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed February 26, 2015 (No. 001-11339).
3.2*	Amended and Restated Bylaws of the Company, effective as of February 25, 2019, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed March 1, 2019 (No. 001-11339).
10.1†	The Company’s Deferred Compensation Plan, as Amended and Restated as of January 1, 2019, filed herewith.
10.2†	2019 Parent-Based Award Letter of the Company, filed herewith.
10.3†	2019 Parent-Based Award Provisions of the Company, filed herewith.
10.4†	2019 Performance Units Award Letter (for key officers) of the Company, filed herewith.
10.5†	2019 Performance Units Provisions (for key officers) of the Company, filed herewith.
10.6†	2019 Performance Units Award Letter of the Company, filed herewith.
10.7†	2019 Performance Units Provisions of the Company, filed herewith.
10.8†	2019 Restricted Units Award Letter (for key officers) of the Company, filed herewith.
10.9†	2019 Restricted Units Award Letter of the Company, filed herewith.
10.10†	2019 Restricted Units Provisions of the Company, filed herewith.
10.11†	2019 Long-Term Incentive Plan Awards Acceptance Form, filed herewith.
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the quarterly report on Form 10-Q of Protective Life Corporation for the quarter ended March 31, 2019, filed on May 7, 2019, formatted in XBRL: (i) the Consolidated Condensed Statements of Income, (ii) the Consolidated Condensed Statements of Comprehensive Income (Loss), (iii) the Consolidated Condensed Balance Sheets, (iv) the Consolidated Condensed Statement of Shareowner’s Equity, (v) the Consolidated Condensed Statements of Cash Flows, and (iv) the Notes to Consolidated Condensed Financial Statements.
*	Incorporated by Reference
†	Management contract or compensatory plan or arrangement
±	Pursuant to Item 601(b)(2) of Regulation S-K, the schedules have been omitted and will be furnished to the SEC supplementally upon request.

103

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PROTECTIVE LIFE CORPORATION
Date: May 7, 2019	By:	/s/ PAUL R. WELLS
		Paul R. Wells
		Senior Vice President, Chief Accounting Officer, and
		Controller

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EX-10.1

PROTECTIVE LIFE CORPORATION

DEFERRED COMPENSATION PLAN

(Amended and Restated as of

January 1, 2019)

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Protective Life Corporation Deferred Compensation Plan

Article I1

Establishment and Purpose1

Article II    1

Definitions1

Article III5

Eligibility and Participation5

3.1Eligibility and Participation    6

3.2Duration    6

3.3Rehires    6

Article IV6

Deferrals6

4.1Deferral Elections, Generally.    6

4.2Timing Requirements for Compensation Deferral Agreements.    7

4.3Allocation of Deferrals.    9

4.4Deductions from Pay    9

4.5Vesting    9

4.6Cancellation of Deferrals    9

Article V10

Company Contributions10

5.1Contributions.    10

5.2Vesting    11

Article VI11

Payments from Accounts11

6.1General Rules    11

6.2Specified Date Accounts    11

6.3Termination Accounts.    11

6.4Death    12

6.5Disability    13

6.6Unforeseeable Emergency    13

6.7Administrative Cash-Out of Small Balances    13

6.8Acceleration of or Delay in Payments    13

6.9Rules Applicable to Installment Payments    13

6.10Modifications to Payment Schedules    14

Article VII14

Valuation of Account Balances; Investments14

7.1Valuation    14

7.2Earnings Credit    14

7.3Investment Options    14

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Protective Life Corporation Deferred Compensation Plan

7.4Investment Allocations    15

7.5Unallocated Deferrals and Accounts    15

7.6Valuations Final After 180 Days    15

Article VIII15

Administration15

8.1Plan Administration    15

8.2Administration Upon Change in Control    15

8.3Withholding    16

8.4Immunity from Liability    16

8.5Delegation of Authority    16

8.6Binding Decisions or Actions    16

Article IX16

Amendment and Termination16

9.1Amendment and Termination    16

9.2Amendments    16

9.3Termination    17

9.4Accounts Taxable Under Code Section 409A    17

Article X17

Informal Funding17

10.1General Assets    17

Article XI17

Claims17

11.1Filing a Claim    17

11.2Appeal of Denied Claims    19

11.3Claims Appeals Upon Change in Control    20

11.4Discretion of Appeals Committee    20

11.5Arbitration    20

Article XII21

Arbitration Agreement and Class Action Waiver    21

12.1Arbitration Agreement    21

12.2Class Action Waiver    23

Article XIII24

General Provisions    24

13.1Assignment    24

13.2No Legal or Equitable Rights or Interest    24

13.3No Employment Contract    25

13.4Notice    25

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Protective Life Corporation Deferred Compensation Plan

13.5Headings    25

13.6Invalid or Unenforceable Provisions    25

13.7Lost Participants or Beneficiaries    25

13.8Facility of Payment to a Minor    25

13.9Governing Law    26

13.10Compliance With Code Section 409A; No Guarantee    26

Exhibit APre-2005 Plan Documents

Exhibit BParticipating Employers

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Protective Life Corporation Deferred Compensation Plan

ARTICLE I

Establishment and Purpose

Protective Life Corporation (the “Company”) has adopted this Protective Life Corporation Deferred Compensation Plan, which subject to the following sentence and except as otherwise provided herein is applicable to all Compensation deferred under Compensation Deferral Agreements. Nothing in this Plan document is intended to modify the amount of deferrals, earnings or the time or form of payment under any other nonqualified deferred compensation plan. Amounts that were deferred and vested as of December 31, 2004 under the terms of the Protective Life Corporation Deferred Compensation Plan for Officers, effective as of November 4, 2002 and amended through October 3, 2004, including the Summary Plan Description for said plan (together, the “Pre-2005 Plan” and each attached hereto as Exhibit A), shall continue to be administered and paid under the terms of the Pre-2005 Plan.

The purpose of the Plan is to attract and retain Eligible Employees by providing them with an opportunity to defer receipt of a portion of their salary, bonus, and other specified compensation. The Plan is not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and interpreted consistent with that intent.

The Plan constitutes an unsecured promise by each Participating Employer to pay benefits in the future. Participants in the Plan shall have the status of general unsecured creditors of the Company or the Participating Employer, as applicable. Unless the Company or other Affiliate determines to fund a benefit on behalf of Participating Employer, each Participating Employer shall be solely responsible for payment of the benefits attributable to services performed for it. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement for Eligible Employees. Any amounts set aside to defray the liabilities assumed by the Company or an Participating Employer will remain the general assets of the Company or the Participating Employer and shall remain subject to the claims of the Company’s or the Participating Employer's creditors until such amounts are distributed to the Participants.

ARTICLE II

Definitions

2.1 Account. Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

2.2 Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date.

2.3 Affiliate. Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).

2.4    Appeals Committee. Appeals Committee shall be as defined in Section 11.2.

2.5 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant in accordance with Section 6.4 hereof to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan.

2.6 Board of Directors. Board of Directors means, for a Participating Employer organized as a corporation, its board of directors and for a Participating Employer organized as a limited liability company, its board of managers.

2.7 Business Day. Business Day means each day on which the New York Stock Exchange is open for business.

2.8 Claimant. Claimant means a Participant or Beneficiary filing a claim under Article XI of this Plan.

2.9 Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

2.10 Code Section 409A. Code Section 409A means Section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.11 Committee. Committee means the Company or a committee appointed by the Company to administer the Plan, which as of the Effective Date is the Compensation and Management Succession Committee.

2.12 Company. Company means Protective Life Corporation.

2.13 Company Contribution. Company Contribution means a credit by a Participating Employer to a Participant’s Account(s) in accordance with the provisions of Article V of the Plan. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution.

2.14 Compensation. Compensation means a Participant’s salary, bonus, commission, and such other cash or equity-based compensation approved by the Committee as Compensation that may be deferred under Section 4.2 of this Plan, excluding any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A and excluding any compensation that is not U.S. source income.

2.15 Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies: (i) the amount of each

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component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts.

2.16 Deferral. Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.

2.17 Earnings. Earnings means an adjustment to the value of an Account in accordance with Article VII.

2.18 Effective Date. Effective Date means the amended and restated effective date of January 1, 2019. The original effective date of the Plan was November 4, 2002.

2.19 Eligible Employee. Eligible Employee means an Employee who is a member of a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA or an independent contractor who has been notified during an applicable enrollment of his or her status as an Eligible Employee. The Committee has the discretion to determine which Employees and independent contractors are Eligible Employees for each enrollment.

2.20 Employee. Employee means a common-law employee of an Employer.

2.21 Employer. Employer means the Company and each Affiliate.

2.22 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

2.23 Participant. Participant means an individual described in Article III.

2.24 Participating Employer. Participating Employer means the Company and each Affiliate who has adopted the Plan with the consent of the Company. Each Participating Employer shall be identified on Exhibit B attached hereto.

2.25 Payment Schedule. Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made.

2.26 Performance-Based Compensation. Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than 90 days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established.

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Performance-Based Compensation shall not include any Compensation actually paidupon the Participant’s death without regard to the satisfaction of the performance criteria.

2.27 Plan. Plan means this “Protective Life Corporation Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter (previously known as the “Protective Life Corporation Deferred Compensation Plan for Officers”). However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.

2.28 Plan Year. Plan Year means January 1 through December 31.

2.29 Separation from Service or Separates from Service. Separation from Service or Separates from Service means an Employee’s termination of employment with the Employer and all Affiliates.

Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months), disregarding periods during which the Employee was on a bona fide leave of absence.

An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of: (i) the six month anniversary of the commencement of the leave, or (ii) the expiration of the Employee’s right, if any, to reemployment under statute or contract.

If a Participant ceases to provide services as an Employee and begins providing services as an independent contractor for the Employer, a Separation from Service shall occur only if the parties anticipate that the level of services to be provided as an independent contractor are such that a Separation from Service would have occurred if the Employee had continued to provide services at that level as an Employee. If, in accordance with the preceding sentence, no Separation from Service occurs as of the date the individual’s employment status changes, a Separation from Service shall occur thereafter only upon the 12-month anniversary of the date all contracts with the Employer have expired, provided the Participant does not perform services for the Employer during that time.

For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.21 of the Plan, except that in applying Code Sections 1563(a)(1), (2) and (3) for purposes of determining whether another organization is an Affiliate of the Company under Code Section 414(b), and in applying Treas. Reg. Section 1.414(c)-2 for purposes of determining whether another organization is an Affiliate

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of the Company under Code Section 414(c), “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in those sections.

The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction. Such determination shall be made in accordance with the requirements of Code Section 409A.

2.30 Specified Date Account. Specified Date Account means an Account established by the Committee to record the amounts payable in a future year as specified in the Participant’s Compensation Deferral Agreement. The Committee may limit the number of Specified Date Accounts that may be maintained at any one time by a Participant, as set forth in the Plan’s enrollment materials.

2.31 Substantial Risk of Forfeiture. Substantial Risk of Forfeiture has the meaning specified in Treas. Reg. Section 1.409A-1(d).

2.32 Supplemental Matching Contributions. Supplemental Matching Contributions means matching contributions made pursuant to Section 5.1(a).

2.33 Termination Account. Termination Account means an Account established by the Committee to record (i) Company Contributions and (ii) Deferrals allocated to such Account by the Participant in accordance with a Participant’s Compensation Deferral Agreement, which Account is payable upon the Participant’s Separation from Service as set forth in Section 6.3. The Committee may limit the number of Termination Accounts that may be maintained at any one time by a Participant, as set forth in the Plan’s enrollment materials.

2.34 Unforeseeable Emergency. Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code Section 152, without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); unreimbursed medical expenses; imminent eviction from or foreclosure on the Participant’s primary residence; payment of funeral or burial expenses of the Participant’s spouse, the Participant’s dependent, or a Beneficiary; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. A determination of Unforeseeable Emergency and payment relating thereto will be determined in accordance with Treas. Reg. Section 1.409A-3(i)(3). The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee. The Committee may establish procedures for the administration of Unforeseeable Emergencies.

2.35 Valuation Date. Valuation Date means each Business Day.

ARTICLE III

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Eligibility and Participation

3.1 Eligibility and Participation. All Eligible Employees may enroll in the Plan. Eligible Employees become Participants on the first to occur of (i) the date on which the first Compensation Deferral Agreement becomes irrevocable under Article IV, or (ii) the date Company Contributions are credited to an Account on behalf of such Eligible Employee.

3.2 Duration. Only Eligible Employees may submit Compensation Deferral Agreements during an enrollment and receive Company Contributions, if any, during the Plan Year. A Participant who is no longer an Eligible Employee but has not incurred a Separation from Service will not be allowed to submit Compensation Deferral Agreements but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero (0). All Participants, regardless of employment status, will continue to be credited with Earnings and during such time may continue to make allocation elections as provided in Section 7.4. An individual shall cease being a Participant in the Plan when his or her Account has been reduced to zero (0).

3.3 Rehires. An Eligible Employee who Separates from Service and who subsequently resumes performing services for an Employer in the same calendar year (regardless of eligibility) will have his or her Compensation Deferral Agreement for such year, if any, reinstated, but his or her eligibility to participate in the Plan in years subsequent to the year of rehire shall be governed by the provisions of Section 3.1.

ARTICLE IV

Deferrals

4.1 Deferral Elections, Generally.    

(a) A Participant may make an initial election to defer Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. Unless an earlier date is specified in the Compensation Deferral Agreement, deferral elections with respect to a Compensation source (such as salary, bonus or other Compensation) become irrevocable on the latest date applicable to such Compensation source under Section 4.2.

(b) A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation, or that is submitted by a Participant who Separates from Service prior to the latest date such agreement would become irrevocable under Code Section 409A, shall be considered null and void and shall not take effect with respect to such item of Compensation. The Committee may modify or revoke any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.

(c) The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each

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such component. Effective with respect to Deferrals on and after January 1, 2019, unless otherwise specified by the Committee in the Compensation Deferral Agreement, (i) Participants may defer up to (75%) of their base compensation and up to (85%) of bonus, commissions, or other Compensation earned during a Plan Year and (ii) the minimum shall be (2%). For the deferral of certain awards, to the extent needed to comply with Code Section 409A, the amount eligible for deferral will be pro-rated if the Participant is or will become eligible for early or normal retirement (as defined in such award documents) within 13 months following the date of grant of said award. Additionally, the Committee may place limits on the amounts that may be deferred under this Plan, which limits may be different for different Participants.

(d) Deferrals of cash Compensation shall be calculated with respect to the gross cash Compensation payable to the Participant prior to any deductions or withholdings, but shall be reduced by the Committee as necessary so as not to exceed 100% of the cash Compensation of the Participant remaining after deduction of all required income and employment taxes, required employee benefit deductions, deferrals to 401(k) plans and other deductions required by law. Changes to payroll withholdings that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A.

(e) The Participant shall specify on his or her Compensation Deferral Agreement the amount of Deferrals and whether to allocate Deferrals to a Termination Account or a Specified Date Account. If no designation is made, Deferrals shall be allocated to a Termination Account payable in a lump sum.

4.2    Timing Requirements for Compensation Deferral Agreements.    

(a) Initial Eligibility. Unless otherwise determined by the Committee, an Eligible Employee may defer his or her base salary, but no other components of Compensation earned in the first year of eligibility may be deferred. The Compensation Deferral Agreement must be filed within 30 days after attaining Eligible Employee status and becomes irrevocable not later than the 30^th day.

A Compensation Deferral Agreement filed under this paragraph applies to Compensation earned after the date that the Compensation Deferral Agreement becomes irrevocable.

(b) Prior Year Election. Except as otherwise provided in this Section 4.2, the Committee may permit an Eligible Employee to defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement filed under this paragraph shall become irrevocable with respect to such Compensation not later than the December 31 filing deadline.

(c) Performance-Based Compensation. The Committee may permit an Eligible Employee to defer Compensation which qualifies as Performance-Based

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Compensation by filing a Compensation Deferral Agreement no later than the date that is six months before the end of the applicable performance period, provided that:

(i) the Participant performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Compensation Deferral Agreement is submitted; and

(ii) the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.

Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participant’s death prior to the satisfaction of the performance criteria, will be void unless it would be considered timely under another rule described in this Section.

(d) Short-Term Deferrals. The Committee may permit Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A-1(b)(4) to be deferred in accordance with the rules of Section 6.10, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 6.10(b) shall not apply to payments attributable to a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5)). A Compensation Deferral Agreement submitted in accordance with this paragraph becomes irrevocable on the latest date it could be submitted under Section 6.10.

(e) Certain Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, the Committee may permit an Eligible Employee to defer such Compensation by filing a Compensation Deferral Agreement on or before the 30^th day after the legally binding right to the Compensation accrues, provided that the Compensation Deferral Agreement is submitted at least 12 months in advance of the earliest date on which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable not later than such 30^th day. If the forfeiture condition applicable to the payment lapses before the end of such 12-month period as a result of the Participant’s death, the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section.

(f) “Evergreen” Deferral Elections. The Committee, in its discretion, may provide that Compensation Deferral Agreements will continue in effect for subsequent years or performance periods by communicating that intention to Participants in writing prior to the date Compensation Deferral Agreements become irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be revoked or modified in writing prospectively by the Participant or the Committee with respect to Compensation for which such election remains revocable under this Section 4.2.

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A Compensation Deferral Agreement is deemed to be revoked for subsequent years if the Participant is not an Eligible Employee as of the last permissible date for making elections under this Section 4.2 or if the Compensation Deferral Agreement is cancelled in accordance with Section 4.6.

4.3 Allocation of Deferrals. A Compensation Deferral Agreement, with respect to each component of Compensation that is deferred, may allocate such Deferral to either a Termination Account or a Specified Date Account. The Committee may, in its discretion, establish in a written communication during enrollment, a minimum deferral period for the establishment of a Specified Date Account (for example, the second Plan Year following the year Compensation is first allocated to such Accounts) and the month in which Specified Date Accounts will be paid, which unless otherwise communicated in such written enrollment communication will be February. In the event a Participant’s Compensation Deferral Agreement allocates a component of Compensation to a Specified Date Account that commences payment in the year such Compensation is earned, the Compensation Deferral Agreement shall be deemed to allocate the Deferral to the Participant’s Specified Date Account having the next earliest payment year. If the Participant has no other Specified Date Accounts, the Committee will allocate the Deferral to a Termination Account payable in a lump sum. Unless otherwise determined by the Committee, any allocation to a Specified Date Account must commence payment before the Participant’s 70^th birthday.

4.4 Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Compensation.

4.5 Vesting. Participant Deferrals of cash Compensation shall be 100% vested at all times. Deferrals of vesting awards of Compensation shall become vested in accordance with the provisions of the underlying award.

4.6 Cancellation of Deferrals. The Committee will cancel a Participant’s Deferrals: (i) for the balance of the Plan Year in which an Unforeseeable Emergency withdrawal under this Plan occurs and the immediately following Plan Year and (ii) for the balance of the Plan Year in which a hardship withdrawal from the Company’s or a Participating Employer’s 401(k) plan occurs and the immediately following Plan Year. The Committee may cancel a Participant’s Deferrals during a period of “disability” (as defined below), provided cancellation occurs by the later of the end of the taxable year of the Participant or the 15^th day of the third month following the date the Participant incurs the disability. “Disability” means the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months.

ARTICLE V

Company Contributions

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5.1 Company Contributions. Company Contributions are credited to a Termination Account. If no form of payment is designated by the Participant, Company Contributions will be payable in a lump sum.

(a) Supplemental Matching Contribution. “Supplemental” matching contributions (“Supplemental Matching Contribution(s)”) will be allocated by the Company to a Participant’s Termination Account, who (i) during all or a portion of a Plan Year, was eligible to participate in the Company’s 401(k) Plan and (ii) either (A) is employed by the Employer on the allocation date, which shall be no later than March 31 following the year that the services to which they are attributable are performed, or (B) who Separates from Service due to death or “disability” or while eligible for a Normal or Early Retirement Benefit under the Company’s qualified pension plan, in which case the allocation date shall be no later than the distribution date for such Termination Account, as specified in Sections 6.3 or 6.4, as applicable. For purposes of this Section, the term “disability” shall mean that the Participant satisfies the definition in Treas. Reg. Section 1.409A-3(i)(4) or has been determined to be totally disabled by the Social Security Administration. Such contributions and any related earnings will be 100% vested.

(b) Supplemental Matching Contributions equal:

(i) the lesser of:

a. the matching contribution percentage, if any, set forth in the Company’s 401(k) Plan times the Participant’s gross cash compensation payable during the year, yet including deferrals under the Company’s 401(k) Plan, this Plan (other than any Supplemental Matching Contribution received during the Plan Year), and Code Section 125 and excluding any awards received under the Company’s Long-Term Incentive Plan during the Plan Year; and

b. the total amount that the Participant deferred or contributed during the Plan Year under the Company’s 401(k) Plan and deferrals of base salary and cash bonus under this Plan, yet excluding any Supplemental Matching Contribution received during the Plan Year.

(ii) minus: the actual matching contribution the Participant received under the Company’s 401(k) Plan for such Plan Year, as determined while applying the restrictions imposed by the Code.

(c) Discretionary Contributions. A Participating Employer may, from time to time in its sole and absolute discretion, credit discretionary Company Contributions in the form of matching, profit sharing or other contributions to any Participant in any amount determined by the Participating Employer. Discretionary Company Contributions may be credited at the sole discretion of the Participating Employer and the fact that a discretionary Company Contribution is credited in one year shall

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not obligate the Participating Employer to continue to make such Company Contributions in subsequent years.

5.2 Vesting. Company Contributions vest according to the schedule specified by the Committee on or before the time the contributions are made. If no schedule is specified, Company Contributions are 100% vested. As stated in Section 5.1(a), Supplemental Matching Contributions are 100% vested.

ARTICLE VI

Payments from Accounts

6.1 General Rules. A Participant’s Accounts become payable upon the first to occur of the payment events applicable to such Account under (i) Sections 6.2 or 6.3 (as elected) and (ii) Sections 6.4 through 6.7.

Payment events and Payment Schedules elected by the Participant shall be set forth in a valid Compensation Deferral Agreement that establishes the Account to which such elections apply in accordance with Article IV or in a valid modification election applicable to such Account as described in Section 6.10. Payment amounts are based on Account Balances as of the last Valuation Date established by the Committee’s administrative practice.

6.2    Specified Date Accounts.

Commencement. As stated in Section 4.3, the Committee may, in its discretion, establish in a written communication during enrollment, the month in which Specified Date Accounts will be paid, which unless otherwise communicated in such written enrollment communication, (i) will be February of the year designated by the Participant and (ii) must be before the Participant’s 70^th birthday. A Participant may not elect to change a Specified Date Account to a Termination Account once his or her election has become irrevocable.

Form of Payment. A Participant may elect to receive a Specified Date Account in either a lump sum or in annual installments up to 10 years. In the event no form of payment is elected or an invalid form of payment is elected, payment will be made in a lump sum.

The time and form of payment of Specified Date Accounts is unaffected by an earlier Separation from Service described in Section 6.3.

6.3 Termination Accounts. Upon a Participant’s Separation from Service other than death, the Participant is entitled to receive his or her vested Termination Accounts. A Participant’s election to receive his or her vested Termination Accounts at Separation from Service other than death may not be modified with respect to the time or the form of payment once it becomes irrevocable.

Commencement. Distribution of Termination Accounts shall be made:

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(a) If the Participant’s Separation from Service occurred before December 10, 2010, on the twentieth business day after the date of the Participant’s Separation from Service; or

(b) If the Participant’s Separation from Service occurred on or between December 10, 2010 and December 31, 2018, on the last business day of the calendar month next following the month in which the Participant has a Separation from Service.

(c) If the Participant’s Separation from Service occurred on or after January 1, 2019, in the calendar month next following the month in which the Participant has a Separation from Service; provided, however, in the case of a Participant who Separates from Service due to “disability” (as defined in Section 5.1) or while eligible for a Normal or Early Retirement Benefit under the Company’s qualified pension plan and whose final Supplemental Matching Contribution allocation is not yet calculable, such Termination Account shall be distributed as soon as administratively practicable following such allocation in accordance with Code Section 409A, including but not limited to the provisions of Treas. Reg. Section 1.409A-3(d).

Form of Payment. A Participant may elect to receive a Termination Account in either a lump sum or in annual installments up to 10 years. In the event that no form of payment is elected or an invalid form of payment is elected, payment will be made in a lump sum. The form of payment for a Termination Account may not be modified after it becomes irrevocable.

Notwithstanding any other provision of this Plan, payment to a Participant who is a “specified employee” as defined in Code Section 409A(a)(2)(B) may not be made before the date that is six months after the date of the Separation from Service (or, if earlier, the date of death of the specified employee).

6.4 Death. Notwithstanding anything to the contrary in this Article VI, upon the death of the Participant (regardless of whether such Participant is an Employee at the time of death), all remaining vested Account Balances shall be paid to his or her Beneficiary in a single lump sum no later than December 31 of the calendar year following the year of the Participant’s death.

(a) Designation of Beneficiary in General. The Participant shall designate a Beneficiary in the manner and on such terms and conditions as the Committee may prescribe. No such designation shall become effective unless filed with the Committee during the Participant’s lifetime. Any designation shall remain in effect until a new designation is filed with the Committee. A Participant may from time to time change his or her designated Beneficiary without the consent of a previously-designated Beneficiary by filing a new designation with the Committee.

(b) No Beneficiary. If a designated Beneficiary does not survive the Participant, or if there is no valid Beneficiary designation, amounts payable under the Plan upon the

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death of the Participant shall be paid to the duly appointed and currently acting personal representative of the Participant’s estate.

6.5 Disability. Notwithstanding anything herein to the contrary and except as provided under the Pre-2005 Plan, if prior to January 1, 2020, a Participant incurs a “Disability” as defined in the Protective Life Corporation Deferred Compensation Plan for Officers, effective as of August 1, 2016 (the “2016 Plan”), the terms of the 2016 Plan shall control and shall be supplemented by the Company’s stand-alone Claims Procedures for Top Hat ERISA Arrangements, effective as of April 1, 2018.

6.6 Unforeseeable Emergency. A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Deferrals. If the emergency need cannot be relieved by cessation of Deferrals to the Plan, the Committee may approve an emergency payment therefrom not to exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be deducted pro rata based on account balance for Termination Accounts and Specified Date Accounts. Unforeseeable Emergency payments shall be paid in a single lump sum in the calendar month in which the Company makes such determination (or, if such determination is made after the twentieth day of a calendar month, in the following calendar month).

6.7 Administrative Cash-Out of Small Balances. Notwithstanding anything to the contrary in this Article VI, the Committee may at any time and without regard to whether a payment event has occurred, direct in writing an immediate lump sum payment of the Participant’s Accounts if the balance of such Accounts, combined with any other amounts required to be treated as deferred under a single plan pursuant to Code Section 409A, does not exceed the applicable dollar amount under Code Section 402(g)(1)(B), provided any other such aggregated amounts are also distributed in a lump sum at the same time.

6.8 Acceleration of or Delay in Payments. Notwithstanding anything to the contrary in this Article VI, the Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of an Account, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of an Account, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7), including, without limiting the foregoing, for purposes of preserving a deduction under Code Section 162(m).

6.9 Rules Applicable to Installment Payments. If a Payment Schedule specifies installment payments, payments will be made beginning as of the payment commencement date for such installments and shall continue to be made in each subsequent payment period until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the last Valuation Date in the month preceding the month of payment and (b) equals the remaining number of installment payments. For purposes of

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Section 6.10, installment payments will be treated as a single form of payment. If an Account is payable in installments, the Account will continue to be credited with Earnings in accordance with Article VII hereof until the Account is completely distributed. Installment distributions will be paid on a pro rata basis from each investment option that the Participant has chosen pursuant to Section 7.4.

6.10 Modifications to Payment Schedules. A Participant may modify the Payment Schedule elected by him or her with respect to a Specified Date Account, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Section 6.10 and the Participant does not elect to change a Specified Date Account to a Termination Account.

(a) Time of Election. The modification election must be submitted to the Committee not less than 12 months prior to the date payments would have commenced under the Payment Schedule in effect prior to modification (the “Prior Election”).

(b) Date of Payment under Modified Payment Schedule. The date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the Prior Election. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A. If the Participant modifies only the form, and not the commencement date for payment, payments shall commence on the fifth anniversary of the date payment would have commenced under the Prior Election.

(c) Irrevocability; Effective Date. A modification election is irrevocable when filed and becomes effective 12 months after the filing date.

(d) Effect on Accounts. An election to modify a Payment Schedule is specific to the Specified Date Account to which it applies, and shall not be construed to affect the Payment Schedules or payment events of any other Accounts.

ARTICLE VII

Valuation of Account Balances; Investments

7.1 Valuation. Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Valuation of Accounts shall be performed under procedures approved by the Committee.

7.2 Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VII (“investment allocation”).

7.3 Investment Options. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options

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from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.

7.4 Investment Allocations. A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.

A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee. Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation will become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day.

A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day, and shall be applied prospectively.

7.5 Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee.

7.6 Valuations Final After 180 Days. The Participant shall have 180 days following the Valuation Date on which the Participant failed to receive the full amount of Earnings and to file a claim under Article XI for the correction of such error.

ARTICLE VIII

Administration

8.1 Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XI.

8.2 Administration Upon Change in Control. Upon a change in control (as defined below) affecting the Company, the Committee, as constituted immediately prior to such change in control, shall continue to act as the Committee. The Committee, by a vote of a majority of

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its members, shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee. For purposes of this Section 8.2, a “change in control” means a change in control as defined under Code Section 409A.

Upon such change in control, the Company may not remove the Committee or its members, unless a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement of the Committee.

The Participating Employers shall, with respect to the Committee identified under this Section: (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Committee’s duties hereunder, except with respect to matters resulting from the Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Committee on all matters related to the Plan, Participants, Beneficiaries and Accounts as the Committee may reasonably require

8.3 Withholding. The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan.

8.4 Immunity from Liability. Neither the Company nor any person acting for the Company or the Committee in the administration of the Plan shall incur any liability for anything done or omitted to be done in administering the Plan or making any determination required by the Plan, except in the case of willful misconduct or gross negligence.

8.5 Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company.

8.6 Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

ARTICLE IX

Amendment and Termination

9.1 Amendment and Termination. The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article IX. Each Participating Employer may also terminate its participation in the Plan.

9.2 Amendments. Subject to compliance with Code Section 409A, the Company may amend and/or restate the Plan at any time and for any reason, provided that no such action shall

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reduce the amounts credited to a Participant’s Accounts immediately prior to such action, or change the time, method, or manner in which the Participant’s Account is then being distributed. No amendment is needed to revise the list of Participating Employers set forth on Exhibit B attached hereto.

9.3 Termination. The Company may terminate or discontinue the Plan at any time, provided that no such action shall reduce the amounts credited to a Participant’s Accounts immediately prior to such action, or change the time, method or manner in which the Participant’s Account is then distributed.

9.4 Accounts Taxable Under Code Section 409A    . The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A. Neither the Company, nor any of its employees, officers, directors or agents, shall be liable for any taxes, interest or penalties that may arise in the event of a violation of Code Section 409A or otherwise.

ARTICLE X

Informal Funding

10.1 General Assets    . Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article X. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer.

ARTICLE XI

Claims

11.1 Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”). Notice of a claim for payments shall be delivered to the Committee within 90 days of the latest date upon which the payment could have been timely made in accordance with the terms of the Plan and Code Section 409A, and if not paid, the Participant or Beneficiary must file a claim under this Article XI not later than 180 days after such latest date. If the Participant or Beneficiary fails to file a timely claim, the Participant forfeits any amounts to which he or she may have been entitled to receive under the claim.

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(a) In General. Notice of a denial of benefits (other than claims based on disability) will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.

(b) Disability Benefits. Notice of denial of claims based on disability will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for disability benefits. If the Committee determines that it needs additional time to review the disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 45-day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional 30 days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial 30-day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of 45 days to submit any necessary additional information to the Committee. In the event that a 30-day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline.

(c) Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). The notice of denial shall set forth the specific reasons for denial in plain language. The notice shall: (i) cite the pertinent provisions of the Plan document, and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including the right to appeal the decision, the deadline by which such appeal must be filed and a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on appeal and the specific date by which such a civil action must commence under Section 11.5.

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In the case of a complete or partial denial of a disability benefit claim, the notice shall provide such information and shall be communicated in the manner required under applicable Department of Labor regulations.

11.2 Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relating to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information: (i) was relied upon in making a benefits determination, (ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The review shall take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal.

(a) In General. Appeal of a denied benefits claim (other than a disability benefits claim) must be filed in writing with the Appeals Committee no later than 60 days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within 60 days following receipt of the appeal (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.

(b) Disability Benefits. Appeal of a denied disability benefits claim must be filed in writing with the Appeals Committee no later than 180 days after receipt of the written notification of such claim denial. The review shall be conducted in accordance with applicable Department of Labor regulations. The Appeals Committee shall make its decision regarding the merits of the denied claim within 45 days following receipt of the appeal (or within 90 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special

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circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.

(c) Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). Such notice shall set forth the reasons for denial in plain language.

The decision on review shall set forth: (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA, following an adverse decision on review and the specific date by which such a civil action must commence under Section 11.5.

For the denial of a disability benefit, the notice will also include such additional information and be communicated in the manner required under applicable Department of Labor regulations.

11.3 Claims Appeals Upon Change in Control. Upon a change in control, the Appeals Committee, as constituted immediately prior to such change in control, shall continue to act as the Appeals Committee. The Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement. For purposes of this Section 11.3, a “change in control” means a change in control as defined under Code Section 409A.

The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.

Each Participating Employer shall, with respect to the Committee identified under this Section: (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require.

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11.4 Discretion of Appeals Committee. All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.

11.5 Arbitration.

(a) Prior to Change in Control. If, prior to a change in control as defined in Section 11.3, any claim, dispute or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in this Article XI, such claim, dispute or controversy shall be submitted to and resolved exclusively by expedited binding arbitration on an individual basis by a single arbitrator, as set forth in and governed by Article XII, rather than by a jury trial or Class Action. Arbitration cannot be commenced until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under Sections 11.1 and 11.2. No such arbitration may be brought more than twelve (12) months following the notice of denial of benefits under Section 11.2, in which case the conclusions reached by the Appeals Committee under Section 11.2 are final, binding, and conclusive. If no appeal is filed by the applicable appeals deadline under Section 11.2, no such arbitration may be brought more than twelve (12) months following the appeals deadline, in which case the conclusions reached by the Committee under Section 11.1 are final, binding, and conclusive.

(b) Upon Change in Control. Upon a change in control as defined in Section 11.3, Section 11.5(a) shall not apply and any legal action initiated by a Participant or Beneficiary to enforce his or her rights under the Plan may be brought in any court of competent jurisdiction. Notwithstanding the Appeals Committee’s discretion under Sections 11.3 and 11.4, the court shall apply a de novo standard of review to any prior claims decision under Sections 11.1 through 11.3 or any other determination made by the Company, its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee .

If the Participant or Beneficiary prevails in the legal proceeding brought under this section, the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Participating Employer’s trust funding obligation under Section 10.2.

ARTICLE XII

Arbitration Agreement and Class Action Waiver

12.1 Arbitration Agreement. Any claim, dispute or controversy arising out of or relating to this Plan, including but not limited to a claim for benefits under the Plan, brought by current or former Plan Participants or Beneficiaries shall be resolved by final and binding arbitration on an individual basis, rather than by a trial or Class Action. The right to have any such claim, dispute or controversy decided by a court, judge and/or jury is irrevocably waived.

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The Plan affects interstate commerce. This Arbitration Agreement (“Arbitration Agreement”) and the Class Action Waiver below (“Class Action Waiver”) (collectively, the “Arbitration Agreement and Class Action Waiver”) set forth the terms and conditions of this agreement to binding arbitration. Except as expressly stated herein and expressly excluding any issue related to the Class Action Waiver below, the arbitrator shall have exclusive authority to decide all issues related to the enforcement, applicability, scope, validity, and interpretation of this Arbitration Agreement, including but not limited to any unconscionability challenge or any other challenge that the Arbitration Agreement is void, voidable or otherwise invalid. Notwithstanding this Arbitration Agreement, remedies may be sought in small claims court on an individual basis to resolve any claim, dispute or controversy that is within the jurisdiction of the small claims court.

All issues relating to the Arbitration Agreement and Class Action Waiver, including their enforcement, applicability, scope, validity, interpretation, and implementation, will be determined pursuant to federal substantive law and the substantive and procedural provisions of the Federal Arbitration Act, 9 U.S.C. §§1-16. If federal substantive law holds that state law should apply to any issue relating to the Arbitration Agreement and Class Action Waiver, then to the extent not preempted by ERISA, the law of the State of Delaware shall govern. This Arbitration Agreement and Class Action Waiver survives: (1) the termination of the Plan; (2) the termination of the Participant’s participation in the Plan; and (3) the termination of the Participant’s employment.

Arbitration shall be conducted pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, and in accordance with the following procedures:

The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within 21 days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or a recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Association (“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

Unless the parties agree otherwise, within 60 days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after

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consultation with the parties. Within 30 days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award.

In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.

The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.

This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, former Participant, former Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.

If any of the provisions of this Arbitration Agreement are determined to be unlawful or otherwise unenforceable, such provision shall be severed and such determination shall not affect the validity of the remainder of this Arbitration Agreement. The remainder of this Arbitration Agreement shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all individual (not Class Action) conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Arbitration Agreement are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law.

12.2 Class Action Waiver. All claims arising out of or related to the Plan, including but not limited to any claims for benefits under the Plan, shall be brought in an individual capacity, and not as a plaintiff or class member in any purported class action, collective action, representative action, mass action, private attorney general action or action on behalf of the general public (all such actions are each referred to as a “Class Action”). The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.

NO CLAIM ARISING OUT OF OR RELATED TO THE PLAN WILL BE ARBITRATED ON A CLASS ACTION BASIS. The right or ability to bring, assert, maintain, or participate in any Class Action in court, arbitration, or any other forum is expressly waived. The

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arbitrator may not consolidate more than one person or entity’s claims, and may not otherwise preside over any Class Action. The enforcement, applicability, scope, validity, and/or interpretation of this Class Action Waiver shall be decided by a court of competent jurisdiction and not by an arbitrator. If this Class Action Waiver is ruled unenforceable or is interpreted not to prevent a Class Action as to a particular claim, then the Arbitration Agreement is null and void as to that claim only, and such claim shall proceed in a court of law and not in arbitration, but, if the claim arises from or is related to a claim for benefits under Article XI, then it shall proceed in a court of law only after the administrative review process set forth in Article XI is concluded. If an arbitrator renders a decision regarding the enforceability, applicability, scope, validity, and/or interpretation of this Class Action Waiver, or determines that a Class Action may proceed in arbitration, then (1) the arbitrator has exceeded his powers, pursuant to 9 U.S.C. §10 of the Federal Arbitration Act, by taking such action; (2) any party may seek immediate review of that decision by a court of competent jurisdiction; and (3) a court of competent jurisdiction shall apply a “de novo” standard of review of that decision if such standard of review is allowed by the common law or statutes of that state. Any Beneficiary seeking the benefits of this Plan shall be bound by the Arbitration Agreement and Class Action Waiver in this Plan.

If any of the provisions of this Class Action Waiver are determined to be unlawful or otherwise unenforceable, in the whole part, such provision shall be severed and such determination shall not affect the validity of the remainder of this Class Action Waiver; provided, however that the remainder of this Class Action Waiver shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all individual (not Class Action) conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If any provision in the Class Action Waiver above is found to be unlawful or otherwise unenforceable such that the arbitration of a Class Action would be allowed as to any claim(s), then the Arbitration Agreement is null, void and unenforceable as to that claim(s) and no arbitration of a Class Action will be allowed as to that claim(s).

ARTICLE XIII

General Provisions

13.1 Assignment. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Additionally, the Committee will not make payments to an alternate payee under the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).

The Company may assign any or all of its liabilities under this Plan in connection with any restructuring, recapitalization, sale of assets or other similar transactions affecting a Participating Employer without the consent of the Participant.

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13.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.

13.3 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer.

13.4 Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan pursuant to Article XII of this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:

PROTECTIVE LIFE CORPORATION

2801 HIGHWAY 280 SOUTH
BIRMINGHAM, AL  35223

ATTN: HUMAN RESOURCES

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of the Participant.

13.5 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

13.6 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.

13.7 Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored. If the Committee is unable to locate the Participant or Beneficiary after five years of the date payment is scheduled to be made, provided that a Participant’s Account shall not be credited with Earnings following the first anniversary of such date on which payment is to be made and further provided, however,

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that such benefit shall be reinstated, without further adjustment for interest, if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit.

13.8 Facility of Payment to a Minor. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its discretion, make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or committee or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, and the Plan from further liability on account thereof.

13.9 Governing Law. To the extent not preempted by ERISA, the laws of the State of Delaware shall govern the construction and administration of the Plan.

13.10 Compliance With Code Section 409A; No Guarantee. This Plan is intended to be administered in compliance with Code Section 409A and each provision of the Plan shall be interpreted consistent with Code Section 409A. Although intended to comply with Code Section 409A, this Plan shall not constitute a guarantee to any Participant or Beneficiary that the Plan in form or in operation will result in the deferral of federal or state income tax liabilities or that the Participant or Beneficiary will not be subject to the additional taxes imposed under Code Section 409A. No Employer shall have any legal obligation to a Participant with respect to taxes imposed under Code Section 409A.

IN WITNESS WHEREOF, the undersigned executed this Plan as of the 7^th day of February, 2019, to be effective as of the Effective Date.

Protective Life Corporation

_____________________________________________ (Signature)

By: Richard J. Bielen

Its: President & Chief Executive Officer

Exhibit A

Pre-2005 Plan Documents

Protective Life Corporation Deferred Compensation Plan for Officers

(effective as of November 4, 2002 and amended through October 3, 2004)

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and the

Summary of the Deferred Compensation Plan for Officers

(effective as of November 29, 2004)

(each attached)

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A-1

Exhibit B

Participating Employers

Protective Life Insurance Company

First Protective Insurance Group, Inc.

ProEquities, Inc.

Western Diversified Services, Inc.

Protective Property & Casualty Insurance Company

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B-1

EX-10.2

[NAME]

MARCH 15, 2019

PARENT-BASED
AWARD LETTER

The Compensation and Management Succession Committee of the Company's Board of Directors has awarded you:

Parent-Based Award Valued at _______Date of Grant: March 15, 2019

This Parent-Based Award was awarded pursuant to the Protective Life Corporation Long-Term Incentive Plan (the “Plan”), and is subject to the terms and conditions contained in the 2019 Parent-Based Award Provisions (“Provisions”), as set forth in Appendix A to this Award Letter, and the Plan. The Plan and the Provisions contain terms and conditions regarding the vesting of this Parent-Based Award, termination of employment, tax withholding, non-solicitation of Company employees and customers, regulatory compliance, and other matters, and I encourage you to read the Provisions carefully.

Please retain these documents in your personal records.

Richard J. Bielen

President and Chief Executive Officer of Protective Life Corporation

EX-10.3

2019 PARENT-BASED AWARD PROVISIONS

As of March 15, 2019, the Board of Directors of Protective Life Corporation (the “Company”) granted you a cash denominated award (“Parent-Based Award”) under the Protective Life Corporation Long-Term Incentive Plan (the “Plan”) that, subject to the satisfaction of the applicable terms and conditions related to such Parent-Based Award, including, but not limited to, the satisfaction of the applicable service vesting conditions specified below, will entitle you to receive a cash amount determined in the manner described below. You have also received a Parent-Based Award Letter (“Award Letter”), which together with these 2019 Parent-Based Award Provisions (“Provisions”) and the Plan, constitutes your full award.

1.    Award.

(a)General Provisions. The Initial Value and the Date of Grant of the Parent-Based Award are set forth in your Award Letter.

(b)Definitions. Capitalized terms that are used but not defined herein shall have the meaning ascribed to them in the Plan.

2.Vesting and Payment of Parent-Based Award.

(a)General Vesting Rule. Unless vested on an earlier date as provided in these Provisions or the Plan, your Parent-Based Award will vest on December 31, 2021 (collectively, the “Regular Vesting Schedule”), subject to your continued employment through such date.

(b)Payment of Parent-Based Award.

(i)Regular Vesting. If your Parent-Based Award becomes vested in accordance with Section 2(a), it will be settled in cash following (but not later than the March 15 immediately following) the date as of which such Parent-Based Award becomes vested. Such amount payable will be calculated in accordance with Section 2(b)(iii) below.

(ii)Early Vesting. Any Parent-Based Award that becomes vested under Section 4 by reason of your termination of employment prior to the date such Parent-Based Award would otherwise have become vested pursuant to Section 2(a) (“Early Vesting”) shall nonetheless be settled in cash following (but not later than the March 15 immediately following) the date as of which such Parent-Based Award would have become vested (but for such Early Vesting) if you had remained in the Company's employment through the applicable date specified in Section 2(a). Such amount payable will be calculated in accordance with Section 2(b)(iii) below.

(iii)The aggregate amount payable in respect of any vested Parent-Based Award under Section 2(b)(i) or (ii) shall be equal to the percentage of such Parent-Based Award that has become vested multiplied by the product of the Initial Value and Parent Stock Percentage.

3.Change in Control.

(i)In the event of a Company Change in Control, all of your Parent-Based Award will immediately vest and shall be settled in cash, based on the Parent Stock Percentage, but the Final Parent Stock Value shall be determined based on the average of the closing prices of the Parent common stock on all trading days during the 30-calendar day period ended on the date on which the Company Change in Control occurs. Payment of the amount so determined will be paid within 60 days following the date on which the Company Change in Control occurs.

(ii)In the event of a Parent Change in Control that results in the common stock of Parent no longer being actively traded on a public securities exchange, all of your Parent-Based Awards shall be converted to Restricted Units as of the date of the Parent Change in Control. Such conversion to Restricted Units shall be effected in the manner described below. First, the dollar value of your Parent-Based Awards shall be determined as of the Parent Change in Control, with the Final Parent Stock Value used to determine the Parent Stock Percentage determined using the average of the closing prices of the Parent common stock on all trading days during the 30-calendar day period ended on the date on which the Parent Change in Control occurs. The resulting dollar value of the Parent-Based Awards shall then be converted into Restricted Units by dividing such dollar value by the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet preceding the Parent Change in Control. Notwithstanding the foregoing, all terms and provisions of the Parent-Based Award Agreement shall otherwise be maintained, including, but not limited to, the vesting schedule and payment timing provisions of such agreement.

4.Termination of Employment.

(a)Death, Disability or Normal Retirement. If your employment is terminated by death, Disability or Normal Retirement, your Parent-Based Award will immediately vest in full.

(b)Early Retirement. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment with the Company and its Subsidiaries terminates due to Early Retirement, a pro-rated portion of your Parent-Based Award will immediately vest based on a fraction, the numerator of which is the number of complete and partial calendar months between January 1, 2019 and your Early Retirement date, and the denominator of which is 36. Any portion of your Parent-Based Award that does not vest upon your Early Retirement pursuant to the preceding sentence will be forfeited.

(c)Special Termination. If your employment is terminated by reason of (1) the divestiture of a business segment or a significant portion of the assets of the Company, or (2) a significant reduction by the Company in its salaried work force, the determination of whether, to what extent, and on what conditions any payment shall be made with respect to any unvested portion of your Parent-Based Award shall be at the discretion of the Committee. Any portion of your Parent-Based Award that the Committee determines is not eligible for payment under this Section 4(c) shall be forfeited as of the date your employment terminates.

(d)Other Termination. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for any reason not set forth in Sections 4(a), (b) or (c) prior to the applicable vesting dates specified in Section 2(a), the unvested portion of your Parent-Based Award will be forfeited.

(e)Termination for Cause. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for Cause prior to the date your Parent-Based Award is paid pursuant to Section 2(b), all of the vested and unvested portions of your Parent-Based Award will be forfeited.

5.    Federal Income Tax Consequences.

(a)General. The following description of the federal income tax consequences of the Parent-Based Award is based on currently applicable provisions of the Code, and is only a general summary. The summary does not discuss state and local tax laws, which may differ from the federal tax law, or federal estate, gift and employment tax laws. You are urged to consult with your own tax advisor regarding the application of the tax laws to your particular situation.

(b)Grant of Parent-Based Award. This Parent-Based Award grant will not subject you to federal income tax.

(c)Payment of Parent-Based Award. You will recognize ordinary income for federal income tax purposes on the payment date. The amount of income recognized will be equal to the aggregate amount of cash paid. Notwithstanding the foregoing, if you have made an effective election under the Company's Deferred Compensation Plan for Officers (“Deferred Compensation Plan”), the taxation of such deferred amount will be handled as discussed in Section 5(d).

(d)Deferred Compensation Plan. You may elect to defer payment in respect of your vested Parent-Based Award, and the recognition of taxable income with respect to such payment, by making deferral elections under the Deferred Compensation Plan. If you make effective deferral elections, you will recognize ordinary income when the amount derived from the deferred portion of your Parent-Based Award payment is paid from the Deferred Compensation Plan, in an amount equal to the amount of cash paid.

You will be provided with more information about this deferral opportunity and the Deferred Compensation Plan.

(e)ERISA. Neither the Plan nor this Parent-Based Award is qualified under Section 401(a) of the Code and neither is subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

6.    Tax Withholding. The Company will withhold an amount in cash sufficient to satisfy any applicable federal, state and/or local tax withholding obligations attributable to your Parent-Based Award, whether under this Plan or under the Deferred Compensation Plan, if you have made deferral elections under that plan in respect to your Parent-Based Award.

7.Non-transferability of Parent-Based Award. Your Parent-Based Award may not be assigned, pledged, or otherwise transferred, except upon your death by the laws of intestacy or descent and distribution.

8.Beneficiary Designations. You may name a beneficiary or beneficiaries (who must be members of your family and who may be named contingently or successively) with respect to your rights under the Plan and this Parent-Based Award (including the right to receive any payment in respect of your Parent-Based Award after your death) by submitting a written beneficiary designation in a form acceptable to the Company. Any such designation will be effective only when filed with the Company's Chief Financial Officer and Controller (or such other person as the Company may designate) before your date of death, and will (unless specifically set forth therein) revoke all prior designations. If there is no beneficiary designation in effect on the date of your death, your beneficiary will be your surviving spouse or, if you have no surviving spouse, your estate.

9.Administration of the Plan. The Committee has full power to administer and interpret the Plan and these Provisions and to adopt such rules and regulations consistent with the terms of the Plan as the Committee deems necessary or advisable in order to carry out the provisions of the Plan. Except as otherwise provided in the Plan, the Committee’s interpretation and construction of the Plan and these Provisions and its determination of any conditions applicable to Awards or the granting of Awards to specific Participants is conclusive and binding on all Participants.

10.Amendment. By action of the Board or the Committee, the Company may from time to time amend, terminate or discontinue the Plan and/or these Provisions in accordance with the terms of the Plan in effect at the time of the amendment, but no amendment, termination or discontinuance of these Provisions or the Plan will unfavorably affect any Parent-Based Award previously granted.

11.Effect on Employment and Other Benefits. Receipt of a Parent-Based Award under the Plan does not give any Participant any right to receive awards in the future or to continue in the employ of the Company and its subsidiaries, and Parent-Based Award recipients are subject to discipline and discharge in the same manner as any other employee. Subject to the terms of the applicable plans, income recognized as a result of any payment in respect of Parent-Based Awards will not be included in the formula for calculating benefits under the Company's Pension Plan, 401(k), and disability plans.

12.Cooperation in Litigation. By accepting a Parent-Based Award subject to the Plan, you agree that after your employment terminates (regardless of the reason), you will cooperate fully with the Company in connection with any current or future claims, lawsuits, arbitrations, proceedings, examinations, inquiries or investigations involving the Company that relate to your service with the Company. This includes being available on reasonable notice for interviews and other communications with the Company's counsel in connection with any such matter and appearing at the Company's request (and without a subpoena) to be deposed or to give testimony.

13.Non-Solicitation of Company Employees. The Company has expended and continues to expend significant time and expense in recruiting and training its employees and the loss of employees would cause significant and irreparable harm to the Company. Accordingly, by accepting a Parent-Based Award subject to the Plan and these Provisions, you agree that for one year beginning on the date your employment terminates (regardless of the reason) (the “Restricted Period”), you will not (directly or indirectly) hire, solicit for hire, or assist others in hiring or soliciting for hire, any employee of the Company or its subsidiaries (“Company Employees”). This provision shall not prohibit you or a future employer of yours from hiring, soliciting for hire, or assisting others in hiring or soliciting for hire, any Company Employee who: (1) responds to a general solicitation or advertisement that is not directed to Company Employees or (2) is referred to your future employer by a search firm, employment agency, or similar organization without any assistance, input, or involvement by you.

14.Non-Solicitation of Company Customers, Distributors, or Agents. The Company has expended and continues to expend significant time and expense in developing relationships and related goodwill with its customers, distributors, and agents; and the loss of these relationships (or any associated business) would cause significant and irreparable harm to the Company. Accordingly, by accepting a Parent-Based Award subject to the Plan and these provisions, you agree that, during the Restricted Period, you will not — whether on your own behalf or on behalf of or in conjunction with any person or entity — directly or indirectly solicit or accept any business of the type conducted by the Company as of your termination date from any person or entity that was either (1) a customer, distributor, or agent of the Company as of that date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date, or induce, promote, facilitate, or otherwise contribute to the solicitation of such customers, distributors, or agents or prospective customers, distributors, or agents. You further agree that, during the Restricted Period, you will not communicate for business purposes with any person or entity that was either (1) a customer, distributor, or agent of the Company as of your termination date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date. This Section 14 shall not apply if you worked in, or were a resident of, the state of California when your employment terminated.

15.Confidential Information. The Company has expended and continues to expend considerable time and resources developing its Confidential Information; and this information is of great competitive importance and commercial value to the Company. The improper use or disclosure of the Company’s Confidential Information would cause significant and irreparable harm to the Company. Accordingly, by accepting a Parent-Based Award subject to the Plan and these provisions, you agree to permanently maintain the confidentiality of the Company’s “Confidential Information.” Confidential Information includes, but is not limited to, all information not generally known to the public (in spoken, printed, electronic, or any other form or medium) relating to the Company’s: business (including without limitation, business plans and strategies, financial information, customer or prospective customer information, agent or prospective agent information, distributor or prospective distributor information, marketing plans, terms of agreements, etc.), technologies (including without limitation, computer software, databases, web design, technical drawings, designs, schematics, algorithms, technical data, research plans, systems, etc.), products (including without limitation, product design, pricing, and development information), transactions or potential transactions, services, trade secrets, know-how, formulas, processes, ideas, inventions (whether or not patentable), training materials, personnel information, attorney-client communications, and third-party relationships. The above list is not exhaustive and Confidential Information includes any other information that should be reasonably understood as the confidential or proprietary information of the Company.Confidential Information includes not only information disclosed by the Company to you, but also information developed or learned by you during the course of your employment with the Company. Information is not confidential, however, if it is available in the public domain through no fault of your own.

16.Recovery of Damages by the Company. You agree that if you were to violate any of Sections 12, 13, 14, and 15 the amount of damages suffered by the Company would be difficult to determine. Therefore, you agree that the Company will be entitled to recover liquidated damages from you equal to the amount of income that you realize under this Parent-Based Award (including all legally required withholdings) (or, if less, the portion thereof determined by the Committee) if the Committee reasonably determines in good faith that you violated any of Sections 12, 13, 14, or 15. All determinations under this Section shall be made by the Committee, acting reasonably and in good faith, and its determinations shall be final, binding and conclusive on you, the Company, and any other person or entity affected thereby. This liquidated damages provision does not relinquish any equitable remedies and other claims for damages that the Company may have. The Company will be entitled to recover costs and expenses, including attorneys’ fees, incurred in enforcing or bringing any action to protect its rights under Sections 12, 13, 14, or 15.

17.Parent-Based Award Subject to the Plan. These Provisions are subject to the Plan as approved by the Board. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

18.Acceptance of Award. If you wish to accept your Parent-Based Award, you must execute a 2019 Long-Term Incentive Plan Awards Acceptance Form, in the manner specified by the Company, which may be in the form of an electronic signature, no later than March 27, 2019.

19.Communications with Government Agencies. Nothing in these Provisions, including, without limitation, Section 12, 15 or 16 hereof, (i) is intended to or will be used in any way to limit your rights to communicate with a government agency, as provided for, protected under or warranted by applicable law or (ii) limits your right to receive an award from the government for information provided to any government agency. You may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

Questions regarding a Parent-Based Award subject to the Plan and requests for additional information about these Provisions, the Plan or the Committee should be directed to Rachel Goodson and Casey Hardeman, Protective Life Corporation, P.O. Box 2606, Birmingham, Alabama 35202 (e-mail: Rachel.Goodson@Protective.comand Casey.Hardeman@Protective.com). The Plan, these Provisions and your Award Letter contain the formal terms and conditions of your Award, and you should retain them for future reference. You may obtain a copy of the Plan by written or email request to Rachel Goodson and Casey Hardeman.

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EX-10.4

[NAME]

MARCH 15, 2019

PERFORMANCE UNITS
AWARD LETTER

The Compensation and Management Succession Committee of the Company's Board of Directors has awarded you:

_______ Performance Units
Award Period: January 1, 2019 – December 31, 2021Grant Date: March 15, 2019

These Performance Units were awarded pursuant to the Protective Life Corporation Long-Term Incentive Plan (the “Plan”), and are subject to the terms and conditions contained in the 2019 Performance Units Award Provisions (“Provisions”), as set forth in Appendix A to this Award Letter, and the Plan. The Plan and the Provisions contain terms and conditions regarding the payment of these Performance Units, termination of employment, tax withholding, non-solicitation of Company employees and customers, regulatory compliance, and other matters, and I encourage you to read the Provisions carefully.

Please retain these documents in your personal records.

Richard J. Bielen

President and Chief Executive Officer of Protective Life Corporation

EX-10.5

2019 PERFORMANCE UNITS PROVISIONS

As of March 15, 2019, the Board of Directors of Protective Life Corporation (the “Company”) granted you performance units (“Performance Units”) under the Protective Life Corporation Long-Term Incentive Plan (the “Plan”) that, subject to the satisfaction of the applicable terms and conditions related to such Performance Units, including, but not limited to, the satisfaction of the applicable performance vesting conditions specified below, will entitle you to receive a cash amount based on the PL Tangible Book Value of the Company. You have also received a Performance Unit Award Letter (“Award Letter”), which together with these 2019 Performance Units Provisions (“Provisions”) and the Plan, constitutes your “Performance Unit Award.”

1.General Provisions. The number of Performance Units that you have been awarded, the Award Period of the Performance Units, and the Date of Grant of the Performance Units are set forth in your Award Letter.

2.Earn-Out of Performance Units.

(a)General. Whether you will receive any cash payment in respect of your Performance Unit Award will be determined based upon the extent to which the applicable performance objectives have been satisfied and, except as otherwise provided in Section 5 below, your continued employment until the date the Performance Units are paid. Your right to vest in, and the amount payable in respect of, one-half (1/2) of your Performance Units is dependent on the Company's Cumulative After-tax Adjusted Operating Income during the Award Period, and on Average Return on Equity over the Award Period with regard to the remaining one-half (1/2) of the Performance Units, in each case as specified below.

(b)Cumulative After-tax Adjusted Operating Income. Payment with respect to one-half of your Performance Units will be based on the Company's Cumulative After-tax Adjusted Operating Income during the Award Period, as determined in accordance with the following schedule:

Cumulative After-tax Adjusted Operating Income (dollars in millions)	Percentage of Performance Units Earned
Less than $1,302	0%
$1,375	80%
$1,447	100%
$1,519	120%
$1,542	145%
$1,592 or more	200%

There will be straight-line interpolation between Cumulative After-tax Adjusted Operating Income between $1,302 and $1,375 to determine the exact percentage to be paid between 0% and 80%; between $1,375 and $1,447 to determine the exact percentage to be paid between 80% and 100%; between $1,447 and $1,519 to determine the exact percentage to be paid between 100% and 120%; between $1,519 and $1,542 to determine the exact percentage to be paid between 120% and 145%; and between $1,542 and $1,592 to determine the exact percentage between 145% and 200%.

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(c)    Average Return on Equity. Payment with respect to one-half of your Performance Units will be based on the Company's Average Return on Equity during the Award Period, as determined in accordance with the following schedule:

Average Return on Equity	Percentage of Performance Units Earned
Less than 5.44%	0%
5.71%	80%
5.87%	100%
6.03%	120%
6.11%	145%
6.28% or more	200%

There will be straight-line interpolation between Average Return on Equity between 5.44% and 5.71% to determine the exact percentage to be paid between 0% and 80%; between 5.71% and 5.87% to determine the exact percentage to be paid between 80% and 100%; between 5.87% and 6.03% to determine the exact percentage to be paid between 100% and 120%; between 6.03% and 6.11% to determine the exact percentage to be paid between 120% and 145%; and between 6.11% and 6.28% to determine the exact percentage between 145% and 200%.

3.    Definitions. Capitalized terms that are used but not defined herein shall have the meaning ascribed to them in the Plan. For purposes of these Provisions, the following terms shall have the following meanings:

“Average Return on Equity” shall mean annualized Cumulative After-tax Adjusted Operating Income during the Award Period divided by the Average Total Shareowner’s Equity and excluding the cumulative after-tax adjustments that are excluded from Cumulative After-tax Adjusted Operating Income during the Award Period.

“Average Total Shareowner’s Equity” shall mean the average of the Total Shareowner’s Equity as reported in the Company’s GAAP financial statements, excluding accumulated other comprehensive income, using the Total Shareowner’s Equity as of the beginning of the Award Period and as of the end of each fiscal quarter during the Award Period (or, if applicable, the number of calendar quarters completed through the date of a Change in Control).

“Cumulative After-tax Adjusted Operating Income” is defined as the Company's total income earned after taxes during the Award Period, excluding the impact of realized gains or losses on investments and derivatives, any impairment losses recorded on goodwill and other intangible assets created by the Merger, any expense borne by the Company that was the result of actions or requirements of the Company's Parent and were not included in the business plan, and unplanned changes to income resulting from new accounting pronouncements. Any lost income due to dividends paid in excess of planned amounts will be added back to determine after tax operating income.

4.Time and Form of Payment. As soon as practicable, but not later than 60 days, after the end of the Award Period, the Committee will determine the extent to which any Performance Unit Award

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has been earned. Except as otherwise set forth herein, the value of each earned Performance Unit shall equal the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet date last preceding the date of payment and shall be paid not later than the March 15 following the end of the Award Period.

5.Termination of Employment.

(a)Death, Disability or Retirement. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated by death, Disability or by Early Retirement or Normal Retirement, you (or, as applicable, your legal representative or beneficiary) will receive a payment with respect to a pro-rata portion of your Performance Units, determined based on a fraction, the numerator of which is your period of employment during the Award Period and the denominator of which is the total number of days in the Award Period. The amount in respect of your pro-rated Performance Units will be determined by applying the performance achieved through the end of the Award Period (or the date of a Change in Control, if applicable) against the schedules set forth in Sections 2(b) and 2(c) above. The remaining portion of your Performance Units (i.e., the excess over the pro-rated portion) shall be forfeited as of the date your employment terminates.

(b)Special Termination. If your employment is terminated by reason of (1) the divestiture of a business segment or a significant portion of the assets of the Company, or (2) a significant reduction by the Company in its salaried work force, the determination of whether, to what extent, and on what conditions any payment shall be made with respect to any unvested portion of your Performance Unit Award shall be at the discretion of the Committee. Any portion of your Performance Units which the Committee determines is not eligible for payment under this Section 5(b) shall be forfeited as of the date your employment terminates.

(c)Other Termination. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for any reason not set forth in Sections 5(a) or (b), any unvested portion of your Performance Unit Award will be forfeited.

(d)Termination for Cause. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for Cause prior to the date your Performance Units are paid pursuant to Section 4, all of your vested and unvested Performance Units will be forfeited.

6.    Company Change in Control. In the event of a Company Change in Control, the Award Period shall be deemed to have ended on the date of the Company Change in Control and you shall be deemed to have earned the greater of (i) 100% of the Performance Units, or (ii) the percentage of such Performance Units that would derive from applying the schedule in Section 2(b) to Cumulative After-tax Adjusted Operating Income through the date of the Company Change in Control (instead of over the Award Period). Any earned Performance Units shall be paid shall be paid within 45 days following the date on which the Company Change in Control occurs, based on the Company Change in Control Book Value Per Unit, if available within 10days before such payment date; or, if the Company Change in Control Book Value Per Unit is not then available, then 90% of the value of each Performance Unit, based on the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet preceding such Company Change in Control, shall be paid within 45 days of the Company Change in Control, followed by an additional payment in respect of each such Performance Unit within 75 days of such Company Change in Control equal to the excess, if any, of (i) the Change in Control Book Value Per Unit over (ii) 90% of the PL Tangible Book

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Value Per Unit determined as of the most recently reported quarterly balance sheet preceding such Company Change in Control.

7.    Federal Income Tax Consequences.

(a)General. The following description of the federal income tax consequences of the Performance Units is based on currently applicable provisions of the Code and regulations, and is only a general summary. The summary does not discuss state and local tax laws, which may differ from the federal tax law, or federal estate, gift and employment tax laws. You are urged to consult with your own tax advisor regarding the application of the tax laws to your particular situation.

(b)Grant of Performance Units. This grant of Performance Units will not cause you to be subject to federal income tax.

(c)Payment of Performance Units. You will recognize ordinary income for federal income tax purposes on the payment date. The amount of income recognized will be equal to the aggregate amount of cash paid. Notwithstanding the foregoing, if you have made an effective election under the Company's Deferred Compensation Plan for Officers (“Deferred Compensation Plan”), the taxation of such deferred amount will be handled as discussed in Section 7(d).

(d)Deferred Compensation Plan. You may elect to defer payment in respect of your earned Performance Units, and the recognition of taxable income with respect to such payment, by making deferral elections under the Deferred Compensation Plan. If you make effective deferral elections, you will recognize ordinary income when the deferred portion of the amount payable on your Performance Units is paid from the Deferred Compensation Plan, in an amount equal to the amount of cash paid.

You will be provided with more information about this deferral opportunity, and the Deferred Compensation Plan, before your Performance Units become payable.

(e)ERISA. Neither the Plan nor this Performance Unit Award is qualified under Section 401(a) of the Code and neither is subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

8.    Tax Withholding. The Company will withhold an amount in cash sufficient to satisfy any applicable federal, state and/or local tax withholding obligations attributable to your Performance Units, whether under this Plan or under the Deferred Compensation Plan, if you have made deferral elections under that plan in respect to your Performance Units.

9.Non-transferability of Performance Units. Your Performance Units may not be assigned, pledged, or otherwise transferred, except upon your death by the laws of intestacy or descent and distribution.

10.Beneficiary Designations. You may name a beneficiary or beneficiaries (who must be members of your family and who may be named contingently or successively) with respect to your rights under the Plan and this Performance Unit Award (including the right to receive payment in respect of your Performance Units after your death) by submitting a written beneficiary designation in a form acceptable to the Company. Any such designation will be effective only when filed with the Company's Chief Financial Officer or Controller (or such other person as the Company may designate) before your date of death, and will (unless specifically set forth therein) revoke all prior designations. If there is no beneficiary designation in effect on the date of your death, your beneficiary will be your surviving spouse or, if you have no surviving spouse, your estate.

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11.Administration of the Plan. The Committee has full power to administer and interpret the Plan and these Provisions and to adopt such rules and regulations consistent with the terms of the Plan as the Committee deems necessary or advisable in order to carry out the provisions of the Plan. Except as otherwise provided in the Plan, the Committee’s interpretation and construction of the Plan and these Provisions and its determination of any conditions applicable to Awards or the granting of Awards to specific Participants is conclusive and binding on all Participants.

12.Amendment. By action of the Board or the Committee, the Company may from time to time amend, terminate or discontinue the Plan and/or these Provisions in accordance with the terms of the Plan in effect at the time of the amendment, but no amendment, termination or discontinuance of these Provisions or the Plan will unfavorably affect any Performance Unit Award previously granted.

13.Effect on Employment and Other Benefits. Receipt of a Performance Unit Award under the Plan does not give any Participant any right to receive awards in the future or to continue in the employ of the Company and its subsidiaries, and Performance Unit Award recipients are subject to discipline and discharge in the same manner as any other employee. Subject to the terms of the applicable plan, income recognized as a result of any payment in respect of Performance Units will not be included in the formula for calculating benefits under the Company's Pension Plan, 401(k), and disability plans.

14.Cooperation in Litigation. By accepting a Performance Unit Award subject to the Plan, you agree that after your employment terminates (regardless of the reason), you will cooperate fully with the Company in connection with any current or future claims, lawsuits, arbitrations, proceedings, examinations, inquiries or investigations involving the Company that relate to your service with the Company. This includes being available on reasonable notice for interviews and other communications with the Company's counsel in connection with any such matter and appearing at the Company's request (and without a subpoena) to be deposed or to give testimony.

15.Non-Solicitation of Company Employees. The Company has expended and continues to expend significant time and expense in recruiting and training its employees and the loss of employees would cause significant and irreparable harm to the Company. Accordingly, by accepting a Performance Unit Award subject to the Plan and these Provisions, you agree that for one year beginning on the date your employment terminates (regardless of the reason) (the “Restricted Period”), you will not (directly or indirectly) hire, solicit for hire, or assist others in hiring or soliciting for hire, any employee of the Company or its subsidiaries (“Company Employees”). This provision shall not prohibit you or a future employer of yours from hiring, soliciting for hire, or assisting others in hiring or soliciting for hire, any Company Employee who: (1) responds to a general solicitation or advertisement that is not directed to Company Employees or (2) is referred to your future employer by a search firm, employment agency, or similar organization without any assistance, input, or involvement by you.

16.Non-Solicitation of Company Customers, Distributors, or Agents. The Company has expended and continues to expend significant time and expense in developing relationships and related goodwill with its customers, distributors, and agents; and the loss of these relationships (or any associated business) would cause significant and irreparable harm to the Company. Accordingly, by accepting a Performance Unit Award subject to the Plan and these provisions, you agree that, during the Restricted Period, you will not — whether on your own behalf or on behalf of or in conjunction with any person or entity — directly or indirectly solicit or accept any business of the type conducted by the Company as of your termination date from any person or entity that was either (1) a customer, distributor, or agent of the Company as of that date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date, or induce, promote, facilitate, or otherwise

Page 5 of 7

contribute to the solicitation of such customers, distributors, or agents or prospective customers, distributors, or agents. You further agree that, during the Restricted Period, you will not communicate for business purposes with any person or entity that was either (1) a customer, distributor, or agent of the Company as of your termination date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date. This Section 16 shall not apply if you worked in, or were a resident of, the state of California when your employment terminated.

17.Confidential Information. The Company has expended and continues to expend considerable time and resources developing its Confidential Information; and this information is of great competitive importance and commercial value to the Company. The improper use or disclosure of the Company’s Confidential Information would cause significant and irreparable harm to the Company. Accordingly, by accepting a Performance Unit Award subject to the Plan and these provisions, you agree to permanently maintain the confidentiality of the Company’s “Confidential Information.” Confidential Information includes, but is not limited to, all information not generally known to the public (in spoken, printed, electronic, or any other form or medium) relating to the Company’s: business (including without limitation, business plans and strategies, financial information, customer or prospective customer information, agent or prospective agent information, distributor or prospective distributor information, marketing plans, terms of agreements, etc.), technologies (including without limitation, computer software, databases, web design, technical drawings, designs, schematics, algorithms, technical data, research plans, systems, etc.), products (including without limitation, product design, pricing, and development information), transactions or potential transactions, services, trade secrets, know-how, formulas, processes, ideas, inventions (whether or not patentable), training materials, personnel information, attorney-client communications, and third-party relationships. The above list is not exhaustive and Confidential Information includes any other information that should be reasonably understood as the confidential or proprietary information of the Company. Confidential Information includes not only information disclosed by the Company to you, but also information developed or learned by you during the course of your employment with the Company. Information is not confidential, however, if it is available in the public domain through no fault of your own.

18.Recovery of Damages by the Company. You agree that if you were to violate any of Sections 14, 15, 16 and 17 the amount of damages suffered by the Company would be difficult to determine. Therefore, you agree that the Company will be entitled to recover liquidated damages from you equal to the amount of income that you realize under this Performance Unit Award (including all legally required withholdings) (or, if less, the portion thereof determined by the Committee) if the Committee reasonably determines in good faith that you violated any of Sections 14, 15, 16, or 17. All determinations under this Section shall be made by the Committee, acting reasonably and in good faith, and its determinations shall be final, binding and conclusive on you, the Company, and any other person or entity affected thereby. This liquidated damages provision does not relinquish any equitable remedies and other claims for damages that the Company may have. The Company will be entitled to recover costs and expenses, including attorneys’ fees, incurred in enforcing or bringing any action to protect its rights under Sections 14, 15, 16, or 17.

19.Performance Units Subject to the Plan. These Provisions are subject to the Plan as approved by the Board. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

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20.Acceptance of Award. If you wish to accept your Performance Unit Award, you must execute a 2019 Long-Term Incentive Plan Awards Acceptance Form, in the manner specified by the Company, which may be in the form of an electronic signature, no later than March 27, 2019.

21.Communications with Government Agencies. Nothing in these Provisions, including, without limitation, Section 14, 17 or 18 hereof, (i) is intended to or will be used in any way to limit your rights to communicate with a government agency, as provided for, protected under or warranted by applicable law or (ii) limits your right to receive an award from the government for information provided to any government agency. You may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

Questions regarding a Performance Unit Award subject to the Plan and requests for additional information about these Provisions, the Plan or the Committee should be directed to Rachel Goodson and Casey Hardeman, Protective Life Corporation, P.O. Box 2606, Birmingham, Alabama 35202 (e-mail: Rachel.Goodson@Protective.comand Casey.Hardeman@Protective.com). The Plan, these Provisions and your Award Letter contain the formal terms and conditions of your Award, and you should retain them for future reference. You may obtain a copy of the Plan by written or email request to Rachel Goodson and Casey Hardeman.

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EX-10.6

[NAME]

MARCH 15, 2019

PERFORMANCE UNITS
AWARD LETTER

Protective Life Corporation has awarded you:

_______ Performance Units
Award Period: January 1, 2019 – December 31, 2021Date of Grant: March 15, 2019

These Performance Units were awarded pursuant to the Protective Life Corporation Long-Term Incentive Plan (the “Plan”), and are subject to the terms and conditions contained in the 2019 Performance Units Award Provisions (“Provisions”), as set forth in Appendix A to this Award Letter, and the Plan. The Plan and the Provisions contain terms and conditions regarding the payment of these Performance Units, termination of employment, tax withholding, non-solicitation of Company employees and customers, regulatory compliance, and other matters, and I encourage you to read the Provisions carefully.

Please retain these documents in your personal records.

Richard J. Bielen

President and Chief Executive Officer of Protective Life Corporation

EX-10.7

2019 PERFORMANCE UNITS PROVISIONS

As of March 15, 2019, the Board of Directors of Protective Life Corporation (the “Company”) granted you performance units (“Performance Units”) under the Protective Life Corporation Long-Term Incentive Plan (the “Plan”) that, subject to the satisfaction of the applicable terms and conditions related to such Performance Units, including, but not limited to, the satisfaction of the applicable performance vesting conditions specified below, will entitle you to receive a cash amount based on the PL Tangible Book Value of the Company. You have also received a Performance Unit Award Letter (“Award Letter”), which together with these 2019 Performance Units Provisions (“Provisions”) and the Plan, constitutes your “Performance Unit Award.”

1.General Provisions. The number of Performance Units that you have been awarded, the Award Period of the Performance Units, and the Date of Grant of the Performance Units are set forth in your Award Letter.

2.Earn-Out of Performance Units.

(a)General. Whether you will receive any cash payment in respect of your Performance Unit Award will be determined based upon the extent to which the applicable performance objective has been satisfied and, except as otherwise provided in Section 5 below, your continued employment until the date the Performance Units are paid.

(b)Cumulative After-tax Adjusted Operating Income. Payment with respect to your Performance Units will be based on the Company's Cumulative After-tax Adjusted Operating Income during the Award Period, as determined in accordance with the following schedule:

Cumulative After-tax Adjusted Operating Income (dollars in millions)	Percentage of Performance Units Earned
Less than $1,302	0%
$1,375	80%
$1,447	100%
$1,519	120%
$1,542	145%
$1,592 or more	200%

There will be straight-line interpolation between Cumulative After-tax Adjusted Operating Income between $1,302 and $1,375 to determine the exact percentage to be paid between 0% and 80%; between $1,375 and $1,447 to determine the exact percentage to be paid between 80% and 100%; between $1,447 and $1,519 to determine the exact percentage to be paid between 100% and 120%; between $1,519 and $1,542 to determine the exact percentage to be paid between 120% and 145%; and between $1,542 and $1,592 to determine the exact percentage between 145% and 200%.

3.    Definitions. Capitalized terms that are used but not defined herein shall have the meaning ascribed to them in the Plan. For purposes of these Provisions, the following terms shall have the following meanings:

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“Cumulative After-tax Adjusted Operating Income” is defined as the Company's total income earned after taxes during the Award Period, excluding the impact of realized gains or losses on investments and derivatives, any impairment losses recorded on goodwill and other intangible assets created by the Merger, any expense borne by the Company that was the result of actions or requirements of the Company's Parent and were not included in the business plan, and unplanned changes to income resulting from new accounting pronouncements. Any lost income due to dividends paid in excess of planned amounts will be added back to determine after tax operating income.

4.Time and Form of Payment. As soon as practicable, but not later than 60 days, after the end of the Award Period, the Committee will determine the extent to which any Performance Unit Award has been earned. Except as otherwise set forth herein, the value of each earned Performance Unit shall equal the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet date last preceding the date of payment and shall be paid not later than the March 15 following the end of the Award Period.

5.Termination of Employment.

(a)Death, Disability or Retirement. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated by death, Disability or by Early Retirement or Normal Retirement, you (or, as applicable, your legal representative or beneficiary) will receive a payment with respect to a pro-rata portion of your Performance Units, determined based on a fraction, the numerator of which is your period of employment during the Award Period and the denominator of which is the total number of days in the Award Period. The amount in respect of your pro-rated Performance Units will be determined by applying the performance achieved through the end of the Award Period (or the date of a Company Change in Control, if applicable) against the schedule set forth in Section 2(b) above. The remaining portion of your Performance Units (i.e., the excess over the pro-rated portion) shall be forfeited as of the date your employment terminates.

(b)Special Termination. If your employment is terminated by reason of (1) the divestiture of a business segment or a significant portion of the assets of the Company, or (2) a significant reduction by the Company in its salaried work force, the determination of whether, to what extent, and on what conditions any payment shall be made with respect to any unvested portion of your Performance Unit Award shall be at the discretion of the Committee. Any portion of your Performance Units which the Committee determines is not eligible for payment under this Section 5(b) shall be forfeited as of the date your employment terminates.

(c)Other Termination. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for any reason not set forth in Sections 5(a) or (b), any unvested portion of your Performance Unit Award will be forfeited.

(d)Termination for Cause. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for Cause prior to the date your Performance Units are paid pursuant to Section 4, all of your vested and unvested Performance Units will be forfeited.

6.    Company Change in Control. In the event of a Company Change in Control, the Award Period shall be deemed to have ended on the date of the Company Change in Control and you shall be deemed to have earned the greater of (i) 100% of the Performance Units, or (ii) the percentage of such Performance Units that would derive from applying the schedule in Section 2(b) to Cumulative After-tax Adjusted

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Operating Income through the date of the Company Change in Control (instead of over the Award Period). Any earned Performance Units shall be paid shall be paid within 45 days following the date on which the Company Change in Control occurs, based on the Company Change in Control Book Value Per Unit, if available within 10days before such payment date; or, if the Company Change in Control Book Value Per Unit is not then available, then 90% of the value of each Performance Unit, based on the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet preceding such Company Change in Control, shall be paid within 45 days of the Company Change in Control, followed by an additional payment in respect of each such Performance Unit within 75 days of such Company Change in Control equal to the excess, if any, of (i) the Change in Control Book Value Per Unit over (ii) 90% of the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet preceding such Company Change in Control.

7.    Federal Income Tax Consequences.

(a)General. The following description of the federal income tax consequences of the Performance Units is based on currently applicable provisions of the Code and regulations, and is only a general summary. The summary does not discuss state and local tax laws, which may differ from the federal tax law, or federal estate, gift and employment tax laws. You are urged to consult with your own tax advisor regarding the application of the tax laws to your particular situation.

(b)Grant of Performance Units. This grant of Performance Units will not cause you to be subject to federal income tax.

(c)Payment of Performance Units. You will recognize ordinary income for federal income tax purposes on the payment date. The amount of income recognized will be equal to the aggregate amount of cash paid. Notwithstanding the foregoing, if you have made an effective election under the Company's Deferred Compensation Plan for Officers (“Deferred Compensation Plan”), the taxation of such deferred amount will be handled as discussed in Section 7(d).

(d)Deferred Compensation Plan. You may elect to defer payment in respect of your earned Performance Units, and the recognition of taxable income with respect to such payment, by making deferral elections under the Deferred Compensation Plan. If you make effective deferral elections, you will recognize ordinary income when the deferred portion of the amount payable on your Performance Units is paid from the Deferred Compensation Plan, in an amount equal to the amount of cash paid.

You will be provided with more information about this deferral opportunity, and the Deferred Compensation Plan, before your Performance Units become payable.

(e)ERISA. Neither the Plan nor this Performance Unit Award is qualified under Section 401(a) of the Code and neither is subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

8.    Tax Withholding. The Company will withhold an amount in cash sufficient to satisfy any applicable federal, state and/or local tax withholding obligations attributable to your Performance Units, whether under this Plan or under the Deferred Compensation Plan, if you have made deferral elections under that plan in respect to your Performance Units.

9.Non-transferability of Performance Units. Your Performance Units may not be assigned, pledged, or otherwise transferred, except upon your death by the laws of intestacy or descent and distribution.

Page 3 of 6

10.Beneficiary Designations. You may name a beneficiary or beneficiaries (who must be members of your family and who may be named contingently or successively) with respect to your rights under the Plan and this Performance Unit Award (including the right to receive payment in respect of your Performance Units after your death) by submitting a written beneficiary designation in a form acceptable to the Company. Any such designation will be effective only when filed with the Company's Chief Financial Officer or Controller (or such other person as the Company may designate) before your date of death, and will (unless specifically set forth therein) revoke all prior designations. If there is no beneficiary designation in effect on the date of your death, your beneficiary will be your surviving spouse or, if you have no surviving spouse, your estate.

11.Administration of the Plan. The Committee has full power to administer and interpret the Plan and these Provisions and to adopt such rules and regulations consistent with the terms of the Plan as the Committee deems necessary or advisable in order to carry out the provisions of the Plan. Except as otherwise provided in the Plan, the Committee’s interpretation and construction of the Plan and these Provisions and its determination of any conditions applicable to Awards or the granting of Awards to specific Participants is conclusive and binding on all Participants.

12.Amendment. By action of the Board or the Committee, the Company may from time to time amend, terminate or discontinue the Plan and/or these Provisions in accordance with the terms of the Plan in effect at the time of the amendment, but no amendment, termination or discontinuance of these Provisions or the Plan will unfavorably affect any Performance Unit Award previously granted.

13.Effect on Employment and Other Benefits. Receipt of a Performance Unit Award under the Plan does not give any Participant any right to receive awards in the future or to continue in the employ of the Company and its subsidiaries, and Performance Unit Award recipients are subject to discipline and discharge in the same manner as any other employee. Subject to the terms of the applicable plan, income recognized as a result of any payment in respect of Performance Units will not be included in the formula for calculating benefits under the Company's Pension Plan, 401(k), and disability plans.

14.Cooperation in Litigation. By accepting a Performance Unit Award subject to the Plan, you agree that after your employment terminates (regardless of the reason), you will cooperate fully with the Company in connection with any current or future claims, lawsuits, arbitrations, proceedings, examinations, inquiries or investigations involving the Company that relate to your service with the Company. This includes being available on reasonable notice for interviews and other communications with the Company's counsel in connection with any such matter and appearing at the Company's request (and without a subpoena) to be deposed or to give testimony.

15.Non-Solicitation of Company Employees. The Company has expended and continues to expend significant time and expense in recruiting and training its employees and the loss of employees would cause significant and irreparable harm to the Company. Accordingly, by accepting a Performance Unit Award subject to the Plan and these Provisions, you agree that for one year beginning on the date your employment terminates (regardless of the reason) (the “Restricted Period”), you will not (directly or indirectly) hire, solicit for hire, or assist others in hiring or soliciting for hire, any employee of the Company or its subsidiaries (“Company Employees”). This provision shall not prohibit you or a future employer of yours from hiring, soliciting for hire, or assisting others in hiring or soliciting for hire, any Company Employee who: (1) responds to a general solicitation or advertisement that is not directed to Company Employees or (2) is referred to your future employer by a search firm, employment agency, or similar organization without any assistance, input, or involvement by you.

Page 4 of 6

16.Non-Solicitation of Company Customers, Distributors, or Agents. The Company has expended and continues to expend significant time and expense in developing relationships and related goodwill with its customers, distributors, and agents; and the loss of these relationships (or any associated business) would cause significant and irreparable harm to the Company. Accordingly, by accepting a Performance Unit Award subject to the Plan and these provisions, you agree that, during the Restricted Period, you will not — whether on your own behalf or on behalf of or in conjunction with any person or entity — directly or indirectly solicit or accept any business of the type conducted by the Company as of your termination date from any person or entity that was either (1) a customer, distributor, or agent of the Company as of that date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date, or induce, promote, facilitate, or otherwise contribute to the solicitation of such customers, distributors, or agents or prospective customers, distributors, or agents. You further agree that, during the Restricted Period, you will not communicate for business purposes with any person or entity that was either (1) a customer, distributor, or agent of the Company as of your termination date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date. This Section 16 shall not apply if you worked in, or were a resident of, the state of California when your employment terminated.

17.Confidential Information. The Company has expended and continues to expend considerable time and resources developing its Confidential Information; and this information is of great competitive importance and commercial value to the Company. The improper use or disclosure of the Company’s Confidential Information would cause significant and irreparable harm to the Company. Accordingly, by accepting a Performance Unit Award subject to the Plan and these provisions, you agree to permanently maintain the confidentiality of the Company’s “Confidential Information.” Confidential Information includes, but is not limited to, all information not generally known to the public (in spoken, printed, electronic, or any other form or medium) relating to the Company’s: business (including without limitation, business plans and strategies, financial information, customer or prospective customer information, agent or prospective agent information, distributor or prospective distributor information, marketing plans, terms of agreements, etc.), technologies (including without limitation, computer software, databases, web design, technical drawings, designs, schematics, algorithms, technical data, research plans, systems, etc.), products (including without limitation, product design, pricing, and development information), transactions or potential transactions, services, trade secrets, know-how, formulas, processes, ideas, inventions (whether or not patentable), training materials, personnel information, attorney-client communications, and third-party relationships. The above list is not exhaustive and Confidential Information includes any other information that should be reasonably understood as the confidential or proprietary information of the Company. Confidential Information includes not only information disclosed by the Company to you, but also information developed or learned by you during the course of your employment with the Company. Information is not confidential, however, if it is available in the public domain through no fault of your own.

18.Recovery of Damages by the Company. You agree that if you were to violate any of Sections 14, 15, 16 and 17 the amount of damages suffered by the Company would be difficult to determine. Therefore, you agree that the Company will be entitled to recover liquidated damages from you equal to the amount of income that you realize under this Performance Unit Award (including all legally required withholdings) (or, if less, the portion thereof determined by the Committee) if the Committee reasonably determines in good faith that you violated any of Sections 14, 15, 16, or 17. All determinations under this Section shall be made by the Committee, acting reasonably and in good faith, and its determinations shall be final, binding and conclusive on you, the Company, and any other person or entity affected thereby. This liquidated damages provision does not relinquish any equitable remedies and other claims for damages that

Page 5 of 6

the Company may have. The Company will be entitled to recover costs and expenses, including attorneys’ fees, incurred in enforcing or bringing any action to protect its rights under Sections 14, 15, 16, or 17.

19.Performance Units Subject to the Plan. These Provisions are subject to the Plan as approved by the Board. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

20.Acceptance of Award. If you wish to accept your Performance Unit Award, you must execute a 2019 Long-Term Incentive Plan Awards Acceptance Form, in the manner specified by the Company, which may be in the form of an electronic signature, no later than March 27, 2019.

21.Communications with Government Agencies. Nothing in these Provisions, including, without limitation, Section 14, 17 or 18 hereof, (i) is intended to or will be used in any way to limit your rights to communicate with a government agency, as provided for, protected under or warranted by applicable law or (ii) limits your right to receive an award from the government for information provided to any government agency. You may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

Questions regarding a Performance Unit Award subject to the Plan and requests for additional information about these Provisions, the Plan or the Committee should be directed to Rachel Goodson and Casey Hardeman, Protective Life Corporation, P.O. Box 2606, Birmingham, Alabama 35202 (e-mail: Rachel.Goodson@Protective.comand Casey.Hardeman@Protective.com). The Plan, these Provisions and your Award Letter contain the formal terms and conditions of your Award, and you should retain them for future reference. You may obtain a copy of the Plan by written or email request to Rachel Goodson and Casey Hardeman.

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EX-10.8

[NAME]

MARCH 15, 2019

RESTRICTED UNITS
AWARD LETTER

The Compensation and Management Succession Committee of the Company's Board of Directors has awarded you:

______ Restricted UnitsDate of Grant: March 15, 2019

These Restricted Units were awarded pursuant to the Protective Life Corporation Long-Term Incentive Plan (the “Plan”), and are subject to the terms and conditions contained in the 2019 Restricted Units Award Provisions (“Provisions”), as set forth in Appendix A to this Award Letter, and the Plan. The Plan and the Provisions contain terms and conditions regarding the vesting of these Restricted Units, termination of employment, tax withholding, non-solicitation of Company employees and customers, regulatory compliance, and other matters, and I encourage you to read the Provisions carefully.

Please retain these documents in your personal records.

Richard J. Bielen

President and Chief Executive Officer of Protective Life Corporation

EX-10.9

[NAME]

MARCH 15, 2019

RESTRICTED UNITS
AWARD LETTER

Protective Life Corporation has awarded you:

______ Restricted UnitsDate of Grant: March 15, 2019

These Restricted Units were awarded pursuant to the Protective Life Corporation Long-Term Incentive Plan (the “Plan”), and are subject to the terms and conditions contained in the 2019 Restricted Units Award Provisions (“Provisions”), as set forth in Appendix A to this Award Letter, and the Plan. The Plan and the Provisions contain terms and conditions regarding the vesting of these Restricted Units, termination of employment, tax withholding, non-solicitation of Company employees and customers, regulatory compliance, and other matters, and I encourage you to read the Provisions carefully.

Please retain these documents in your personal records.

Richard J. Bielen

President and Chief Executive Officer of Protective Life Corporation

EX-10.10

2019 RESTRICTED UNITS PROVISIONS

As of March 15, 2019, you were granted restricted units (“Restricted Units”) under the Protective Life Corporation Long-Term Incentive Plan (the “Plan”) that, subject to the satisfaction of the applicable terms and conditions related to such Restricted Units, including, but not limited to, the satisfaction of the applicable service vesting conditions specified below, will entitle you to receive a cash amount based on the Tangible Book Value of Protective Life Corporation (the “Company”). You have also received a Restricted Unit Award Letter (“Award Letter”), which together with these 2019 Restricted Units Provisions (“Provisions”) and the Plan, constitutes your “Restricted Unit Award.”

1.    Award.

(a)General Provisions. The number of Restricted Units that you have been awarded (subject to adjustment as provided in these Provisions and the Plan), and the Date of Grant of the Restricted Units, are set forth in your Award Letter.

(b)Definitions. Capitalized terms that are used but not defined herein shall have the meaning ascribed to them in the Plan.

2.    Vesting and Payment of Restricted Units.

(a)General Vesting Rule. Unless vested on an earlier date as provided in these Provisions or the Plan, 50% of your Restricted Units will vest on December 31, 2021, and the remaining 50% of your Restricted Units will vest on December 31, 2022 (collectively, the “Regular Vesting Schedule”), subject in each case to your continued employment through such date (except as otherwise provided in Section 4 below).

(b)Payment of Restricted Units.

(i)Regular Vesting. Restricted Units that become vested in accordance with Section 2(a) shall be settled in cash following (but not later than the March 15 immediately following) the date as of which such Restricted Units become vested based on the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet date last preceding the date of payment.

(ii)Early Vesting. Any Restricted Units that become vested under Section 4 by reason of your termination of employment prior to the date such Restricted Units would otherwise have become vested pursuant to Section 2(a) (“Early Vesting”) shall nonetheless be settled in cash following (but not later than the March 15 immediately following) the date as of which such Restricted Units would have become vested (but for such Early Vesting) if you had remained in the Company's employment through each of the applicable dates specified in Section 2(a), based on the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet date last preceding the date of payment.

3.Company Change in Control. In the event of a Company Change in Control, all of your Restricted Units will immediately vest and shall be settled in cash within 45 days following the date on which the Company Change in Control occurs, based on the Company Change in Control Book Value Per Unit, if available within 10 days before such payment date; or, if the Company Change in Control Book Value Per Unit is not then available, then 90% of the value of each Restricted Unit based on the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet preceding such Company Change in Control, shall be paid within 45 days of the Company Change in Control, followed by an additional payment within 75 days of such Company Change in Control equal to the excess, if any, of (i) the Change in Control Book Value Per Unit over (ii) 90% of the PL Tangible Book Value Per Unit determined as of the most recently reported quarterly balance sheet preceding such Company Change in Control.

4.Termination of Employment.

(a)Death, Disability or Normal Retirement. If your employment is terminated by death, Disability or Normal Retirement, your Restricted Units will immediately vest in full.

(b)Early Retirement. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment with the Company and its Subsidiaries terminates due to Early Retirement, a pro-rated portion of your Restricted Units will immediately vest. The portion of your Restricted Units that would otherwise have become vested based on employment through each of December 31, 2021 and December 31, 2022 will be separately calculated by multiplying (1) the number of unvested Restricted Units that would become vested at the applicable date by (2) a fraction, the numerator of which is the number of complete and partial calendar months between January 1, 2019 and your Early Retirement date, and the denominator of which is (x) 36, in the case of the portion of the Restricted Units that would become vested at December 31, 2021, and (y) 48, in the case of the portion of the Restricted Units that would become vested at December 31, 2022. Any Restricted Units that do not vest upon your Early Retirement pursuant to the preceding sentence will be forfeited.

(c)Special Termination. If your employment is terminated by reason of (1) the divestiture of a business segment or a significant portion of the assets of the Company, or (2) a significant reduction by the Company in its salaried work force, the determination of whether, to what extent, and on what conditions any payment shall be made with respect to any unvested portion of your Restricted Unit Award shall be at the discretion of the Committee. Any portion of your Restricted Units that the Committee determines is not eligible for payment under this Section 4(c) shall be forfeited as of the date your employment terminates.

(d)Other Termination. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for any reason not set forth in Sections 4(a), (b) or (c) prior to the applicable vesting dates specified in Section 2(a), your unvested Restricted Units will be forfeited.

(e)Termination for Cause. Unless the Committee determines to provide for treatment that is more favorable to you on such terms and conditions as the Committee may determine, if your employment is terminated for Cause prior to the date your Restricted Units are paid pursuant to Section 2(b), all of your vested and unvested Restricted Units will be forfeited.

5.    Federal Income Tax Consequences.

(a)General. The following description of the federal income tax consequences of the Restricted Units is based on currently applicable provisions of the Code, and is only a general summary. The summary does not discuss state and local tax laws, which may differ from the federal tax law, or federal estate, gift and employment tax laws. You are urged to consult with your own tax advisor regarding the application of the tax laws to your particular situation.

(b)Grant of Restricted Units. This grant of Restricted Units will not subject you to federal income tax.

(c)Payment of Restricted Units. You will recognize ordinary income for federal income tax purposes on the payment date. The amount of income recognized will be equal to the aggregate amount of cash paid. Notwithstanding the foregoing, if you have made an effective election under the Company's Deferred Compensation Plan for Officers (“Deferred Compensation Plan”), the taxation of such deferred amount will be handled as discussed in Section 5(d).

(d)Deferred Compensation Plan. You may elect to defer payment in respect of your vested Restricted Units, and the recognition of taxable income with respect to such payment, by making deferral elections under the Deferred Compensation Plan. If you make effective deferral elections, you will recognize ordinary income when the amount derived from the deferred portion of your Restricted Units payment is paid from the Deferred Compensation Plan, in an amount equal to the amount of cash paid. You will be provided with more information about this deferral opportunity and the Deferred Compensation Plan.

(e)ERISA. Neither the Plan nor this Restricted Unit Award is qualified under Section 401(a) of the Code and neither is subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

6.    Tax Withholding. The Company will withhold an amount in cash sufficient to satisfy any applicable federal, state and/or local tax withholding obligations attributable to your Restricted Units, whether under this Plan or under the Deferred Compensation Plan, if you have made deferral elections under that plan in respect to your Restricted Units.

7.    Non-transferability of Restricted Units. Your Restricted Units may not be assigned, pledged, or otherwise transferred, except upon your death by the laws of intestacy or descent and distribution.

8.    Beneficiary Designations. You may name a beneficiary or beneficiaries (who must be members of your family and who may be named contingently or successively) with respect to your rights under the Plan and this Restricted Unit Award (including the right to receive any payment in respect of your Restricted Units after your death) by submitting a written beneficiary designation in a form acceptable to the Company. Any such designation will be effective only when filed with the Company's Chief Financial Officer and Controller (or such other person as the Company may designate) before your date of death, and will (unless specifically set forth therein) revoke all prior designations. If there is no beneficiary designation in effect on the date of your death, your beneficiary will be your surviving spouse or, if you have no surviving spouse, your estate.

9.Administration of the Plan. The Committee has full power to administer and interpret the Plan and these Provisions and to adopt such rules and regulations consistent with the terms of the Plan as the Committee deems necessary or advisable in order to carry out the provisions of the Plan. Except as otherwise provided in the Plan, the Committee’s interpretation and construction of the Plan and these Provisions and its determination of any conditions applicable to Awards or the granting of Awards to specific Participants is conclusive and binding on all Participants.

10.Amendment. By action of the Board or the Committee, the Company may from time to time amend, terminate or discontinue the Plan and/or these Provisions in accordance with the terms of the Plan in effect at the time of the amendment, but no amendment, termination or discontinuance of these Provisions or the Plan will unfavorably affect any Restricted Unit Award previously granted.

11.Effect on Employment and Other Benefits. Receipt of a Restricted Unit Award under the Plan does not give any Participant any right to receive awards in the future or to continue in the employ of the Company and its subsidiaries, and Restricted Unit Award recipients are subject to discipline and discharge in the same manner as any other employee. Subject to the terms of the applicable plans, income recognized as a result of any payment in respect of Restricted Units will not be included in the formula for calculating benefits under the Company's Pension Plan, 401(k), and disability plans.

12.Cooperation in Litigation. By accepting a Restricted Unit Award subject to the Plan, you agree that after your employment terminates (regardless of the reason), you will cooperate fully with the Company in connection with any current or future claims, lawsuits, arbitrations, proceedings, examinations, inquiries or investigations involving the Company that relate to your service with the Company. This includes being available on reasonable notice for interviews and other communications with the Company's counsel in connection with any such matter and appearing at the Company's request (and without a subpoena) to be deposed or to give testimony.

13.Non-Solicitation of Company Employees. The Company has expended and continues to expend significant time and expense in recruiting and training its employees and the loss of employees would cause significant and irreparable harm to the Company. Accordingly, by accepting a Restricted Unit Award subject to the Plan and these Provisions, you agree that for one year beginning on the date your employment terminates (regardless of the reason) (the “Restricted Period”), you will not (directly or indirectly) hire, solicit for hire, or assist others in hiring or soliciting for hire, any employee of the Company or its subsidiaries (“Company Employees”). This provision shall not prohibit you or a future employer of yours from hiring, soliciting for hire, or assisting others in hiring or soliciting for hire, any Company Employee who: (1) responds to a general solicitation or advertisement that is not directed to Company Employees or (2) is referred to your future employer by a search firm, employment agency, or similar organization without any assistance, input, or involvement by you.

14.Non-Solicitation of Company Customers, Distributors, or Agents. The Company has expended and continues to expend significant time and expense in developing relationships and related goodwill with its customers, distributors, and agents; and the loss of these relationships (or any associated business) would cause significant and irreparable harm to the Company. Accordingly, by accepting a Restricted Unit Award subject to the Plan and these provisions, you agree that, during the Restricted Period, you will not — whether on your own behalf or on behalf of or in conjunction with any person or entity — directly or indirectly solicit or accept any business of the type conducted by the Company as of your termination date from any person or entity that was either (1) a customer, distributor, or agent of the Company as of that date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date, or induce, promote, facilitate, or otherwise contribute to the solicitation of such customers, distributors, or agents or prospective customers, distributors, or agents. You further agree that, during the Restricted Period, you will not communicate for business purposes with any person or entity that was either (1) a customer, distributor, or agent of the Company as of your termination date or (2) a prospective customer, distributor, or agent contacted, called upon, or serviced by the Company during the twelve months before your termination date. This Section 14 shall not apply if you worked in, or were a resident of, the state of California when your employment terminated.

15.Confidential Information. The Company has expended and continues to expend considerable time and resources developing its Confidential Information; and this information is of great competitive importance and commercial value to the Company. The improper use or disclosure of the Company’s Confidential Information would cause significant and irreparable harm to the Company. Accordingly, by accepting a Restricted Unit Award subject to the Plan and these provisions, you agree to permanently maintain the confidentiality of the Company’s “Confidential Information.” Confidential Information includes, but is not limited to, all information not generally known to the public (in spoken, printed, electronic, or any other form or medium) relating to the Company’s: business (including without limitation, business plans and strategies, financial information, customer or prospective customer information, agent or prospective agent information, distributor or prospective distributor information, marketing plans, terms of agreements, etc.), technologies (including without limitation, computer software, databases, web design, technical drawings, designs, schematics, algorithms, technical data, research plans, systems, etc.), products (including without limitation, product design, pricing, and development information), transactions or potential transactions, services, trade secrets, know-how, formulas, processes, ideas, inventions (whether or not patentable), training materials, personnel information, attorney-client communications, and third-party relationships. The above list is not exhaustive and Confidential Information includes any other information that should be reasonably understood as the confidential or proprietary information of the Company.Confidential Information includes not only information disclosed by the Company to you, but also information developed or learned by you during the course of your employment with the Company. Information is not confidential, however, if it is available in the public domain through no fault of your own.

16.Recovery of Damages by the Company. You agree that if you were to violate any of Sections 12, 13, 14, and 15 the amount of damages suffered by the Company would be difficult to determine. Therefore, you agree that the Company will be entitled to recover liquidated damages from you equal to the amount of income that you realize under this Restricted Unit Award (including all legally required withholdings) (or, if less, the portion thereof determined by the Committee) if the Committee reasonably determines in good faith that you violated any of Sections 12, 13, 14, or 15. All determinations under this Section shall be made by the Committee, acting reasonably and in good faith, and its determinations shall be final, binding and conclusive on you, the Company, and any other person or entity affected thereby. This liquidated damages provision does not relinquish any equitable remedies and other claims for damages that the Company may have. The Company will be entitled to recover costs and expenses, including attorneys’ fees, incurred in enforcing or bringing any action to protect its rights under Sections 12, 13, 14, or 15.

17.Restricted Units Subject to Plan. These Provisions are subject to the Plan as approved by the Board. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

18.Acceptance of Award. If you wish to accept your Restricted Unit Award, you must execute a 2019 Long-Term Incentive Plan Awards Acceptance Form, in the manner specified by the Company, which may be in the form of an electronic signature, no later than March 27, 2019.

19.Communications with Government Agencies. Nothing in these Provisions, including, without limitation, Section 12, 15 or 16 hereof, (i) is intended to or will be used in any way to limit your rights to communicate with a government agency, as provided for, protected under or warranted by applicable law or (ii) limits your right to receive an award from the government for information provided to any government agency. You may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

Questions regarding a Restricted Unit Award subject to the Plan and requests for additional information about these Provisions, the Plan or the Committee should be directed to Rachel Goodson and Casey Hardeman, Protective Life Corporation, P.O. Box 2606, Birmingham, Alabama 35202 (e-mail: Rachel.Goodson@Protective.comand Casey.Hardeman@Protective.com). The Plan, these Provisions and your Award Letter contain the formal terms and conditions of your Award, and you should retain them for future reference. You may obtain a copy of the Plan by written or email request to Rachel Goodson and Casey Hardeman.

Page 1 of 6

EX-10.11

2019 Long-Term Incentive Plan Awards

Acceptance Form

As of March 15, 2019, you were granted long-term incentive awards under the Protective Life Corporation Long-Term Incentive Plan (the “Plan”). In conjunction with these awards, you have been provided with Award Letters and the applicable provision documents (“Provisions”). The Award Letters, Provisions, and the Plan govern your respective 2019 Awards. The 2019 Awards contain terms and conditions regarding the vesting and payment of the Awards, termination of employment, tax withholding, confidentiality, non-solicitation of Company employees and customers, regulatory compliance, and other important matters. If you agree to and accept the terms of the 2019 Awards, please sign where indicated below by March 27, 2019.

Rich Bielen

President and Chief Executive Officer

of Protective Life Corporation

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard J. Bielen, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q for the period ended March 31, 2019, of Protective Life Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2019

/s/ Richard J. Bielen

President and

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven G. Walker, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q for the period ended March 31, 2019, of Protective Life Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2019

/s/ Steven G. Walker

Executive Vice President and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Protective Life Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Bielen, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard J. Bielen

President

and Chief Executive Officer

May 7, 2019

This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Protective Life Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven G. Walker, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven G. Walker

Executive Vice President and

Chief Financial Officer

May 7, 2019

This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 23, 2019
Document and Entity Information
Entity Registrant Name	PROTECTIVE LIFE CORPORATION
Entity Central Index Key	0000355429
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		1,000
Entity Emerging Growth Company	false
Entity Small Business	false

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CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Premiums and policy fees	$ 930,328	$ 889,166
Reinsurance ceded	(318,377)	(345,423)
Net of reinsurance ceded	611,951	543,743
Net investment income	685,924	520,863
Realized investment gains (losses)	9,919	(9,540)
Other-than-temporary impairment losses	(1,295)	(691)
Portion recognized in other comprehensive income (before taxes)	(1,847)	(2,954)
Net impairment losses recognized in earnings	(3,142)	(3,645)
Other income	109,378	114,411
Total revenues	1,414,030	1,165,832
Benefits and expenses
Benefits and settlement expenses, net of reinsurance ceded: (2019 - $254,828; 2018 - $347,637)	972,766	786,802
Amortization of deferred policy acquisition costs and value of business acquired	30,400	57,981
Other operating expenses, net of reinsurance ceded: (2019 - $51,291; 2018 - $43,117)	235,949	229,251
Total benefits and expenses	1,239,115	1,074,034
Income before income tax	174,915	91,798
Income tax expense	36,631	17,686
Net income	$ 138,284	$ 74,112

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CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Benefits and settlement expenses, reinsurance ceded	$ 254,828	$ 347,637
Other operating expenses, reinsurance ceded	$ 51,291	$ 43,117

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 138,284	$ 74,112
Other comprehensive income (loss):
Change in net unrealized gains (losses) on investments, net of income tax: (2019 - $302,063; 2018 - $(153,379))	1,136,331	(577,712)
Reclassification adjustment for investment amounts included in net income, net of income tax: (2019 - $(415); 2018 - $181)	(1,560)	681
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (2019 - $2,337; 2018 - $3)	8,792	11
Change in accumulated (loss) gain - derivatives, net of income tax: (2019 - $(522) ; 2018 - $129)	(1,966)
Change in accumulated (loss) gain - derivatives, net of income tax: (2019 - $(522) ; 2018 - $129)		487
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2019 - $58 ; 2018 - $24)	(220)
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2019 - $58 ; 2018 - $24)		89
Change in postretirement benefits liability adjustment, net of income tax: (2019 - $0; 2018 - $0)	0	0
Total other comprehensive income (loss)	1,141,817	(576,444)
Total comprehensive income (loss)	$ 1,280,101	$ (502,332)

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Change in net unrealized gains (losses) on investments, income tax	$ 302,063	$ (153,379)
Reclassification adjustment for investment amounts included in net income, income tax	(415)	181
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax	2,337	3
Change in accumulated (loss) gain - derivatives, income tax	(522)
Change in accumulated (loss) gain - derivatives, income tax		129
Reclassification adjustment for derivative amounts included in net income, income tax	58
Reclassification adjustment for derivative amounts included in net income, income tax		24
Change in postretirement benefits liability adjustment, income tax	$ 0	$ 0

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CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Fixed maturities, at fair value (amortized cost: 2019 - $54,367,022; 2018 - $54,466,305)	$ 53,777,352	$ 51,904,699
Fixed maturities, at amortized cost (fair value: 2019 - $2,594,441; 2018 - $2,547,210)	2,607,356	2,633,474
Equity securities, at fair value (cost: 2019 - $619,483; 2018 - $627,087)	619,440	595,884
Mortgage loans (related to securitizations: 2019 - $17; 2018 - $134)	7,701,465	7,724,733
Investment real estate, net of accumulated depreciation (2019 - $283; 2018 - $251)	6,478	6,816
Policy loans	1,677,442	1,695,886
Other long-term investments	853,117	759,354
Short-term investments	817,642	807,283
Total investments	68,060,292	66,128,129
Cash	280,250	173,714
Accrued investment income	646,996	634,921
Accounts and premiums receivable	153,833	113,507
Reinsurance receivables	4,660,567	4,764,743
Deferred policy acquisition costs and value of business acquired	2,986,686	3,023,154
Goodwill	825,511	825,511
Other intangibles, net of accumulated amortization (2019 - $211,899; 2018 - $197,583)	601,603	613,431
Property and equipment, net of accumulated depreciation (2019 - $37,450; 2018 - $33,199)	206,781	184,957
Other assets	261,136	250,036
Assets related to separate accounts:
Variable annuity	12,737,450	12,288,919
Variable universal life	1,041,397	937,732
Total assets	92,462,502	89,938,754
Liabilities
Future policy benefits and claims	42,125,544	41,901,552
Unearned premiums	874,253	872,594
Total policy liabilities and accruals	42,999,797	42,774,146
Stable value product account balances	5,527,816	5,234,731
Annuity account balances	13,665,415	13,720,081
Other policyholders’ funds	1,166,378	1,128,379
Other liabilities	2,646,033	2,374,112
Income tax payable	131,817	38,547
Deferred income taxes	1,069,207	839,316
Non-recourse funding obligations	2,607,021	2,632,497
Secured financing liabilities	184,012	495,307
Debt	1,083,672	1,101,827
Subordinated debt	605,460	605,426
Liabilities related to separate accounts:
Variable annuity	12,737,450	12,288,919
Variable universal life	1,041,397	937,732
Total liabilities	85,465,475	84,171,020
Commitments and contingencies - Note 12
Shareowner’s equity
Common Stock: 2019 and 2018 - $0.01 par value; shares authorized: 5,000; shares issued: 1,000	0	0
Additional paid-in-capital	5,554,059	5,554,059
Retained earnings	1,726,917	1,639,441
Accumulated other comprehensive income (loss):
Net unrealized (losses) gains on investments, net of income tax: (2019 - $(67,182); 2018 - $(368,830))	(252,733)	(1,387,504)
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (2019 - $(3,717); 2018 - $(6,054))	(13,981)	(22,773)
Accumulated gain (loss) - derivatives, net of income tax: (2019 - $(466); 2018 - $(2))	(1,753)	(7)
Postretirement benefits liability adjustment, net of income tax: (2019 - $(4,112); 2018 - $(4,112))	(15,482)	(15,482)
Total shareowner’s equity	6,997,027	5,767,734
Total liabilities and shareowner’s equity	$ 92,462,502	$ 89,938,754

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CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Fixed maturities at fair value, amortized cost	$ 54,367,022	$ 54,466,305
Fixed maturities at amortized cost, fair value	2,594,441	2,547,210
Equity securities, cost	619,483	627,087
Mortgage loans, related to securitizations	17	134
Investment real estate, accumulated depreciation	283	251
Other intangibles, accumulated amortization	211,899	197,583
Property and equipment, accumulated depreciation	$ 37,450	$ 33,199
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized (in shares)	5,000	5,000
Common Stock, shares issued (in shares)	1,000	1,000
Net unrealized gains (losses) on investments, income tax	$ (67,182)	$ (368,830)
Net unrealized (losses) gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax	(3,717)	(6,054)
Accumulated loss - derivatives, income tax	(466)	(2)
Postretirement benefits liability adjustment, income tax	$ (4,112)	$ (4,112)

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CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER'S EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In- Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2017	$ 7,127,199	$ 0	$ 5,554,059	$ 1,560,444	$ 12,696
Increase (decrease) in shareowners' equity
Net income	74,112			74,112
Other comprehensive income	(576,444)				(576,444)
Comprehensive income (loss)	(502,332)
Dividends to parent	(140,000)			(140,000)
Ending Balance at Mar. 31, 2018	6,392,342	0	5,554,059	1,412,583	(574,300)
Beginning Balance at Dec. 31, 2018	5,767,734	0	5,554,059	1,639,441	(1,425,766)
Increase (decrease) in shareowners' equity
Net income	138,284			138,284
Other comprehensive income	1,141,817				1,141,817
Comprehensive income (loss)	1,280,101
Ending Balance at Mar. 31, 2019	$ 6,997,027	$ 0	$ 5,554,059	$ 1,726,917	$ (283,949)

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net income	$ 138,284	$ 74,112
Adjustments to reconcile net income to net cash used in operating activities:
Realized investment (gains) losses	(6,777)	13,185
Amortization of DAC and VOBA	30,400	57,981
Capitalization of DAC	(95,994)	(99,246)
Depreciation and amortization expense	18,737	16,763
Deferred income tax	(59,652)	20,965
Accrued income tax	93,270	69,790
Interest credited to universal life and investment products	285,588	197,458
Policy fees assessed on universal life and investment products	(407,380)	(351,128)
Change in reinsurance receivables	104,176	(14,874)
Change in accrued investment income and other receivables	(10,902)	(7,185)
Change in policy liabilities and other policyholders’ funds of traditional life and health products	(200,148)	(121,289)
Trading securities:
Maturities and principal reductions of investments	30,111	53,420
Sale of investments	142,370	67,298
Cost of investments acquired	(149,133)	(129,346)
Other net change in trading securities	1,662	(10,901)
Amortization of premiums and accretion of discounts on investments and mortgage loans	67,060	73,529
Change in other liabilities	17,380	27,947
Other, net	(10,511)	(21,303)
Net cash used in operating activities	(11,459)	(82,824)
Cash flows from investing activities
Maturities and principal reductions of investments, available-for-sale	400,015	151,227
Sale of investments, available-for-sale	994,633	436,969
Cost of investments acquired, available-for-sale	(1,332,657)	(674,513)
Change in investments, held-to-maturity	25,000	18,000
Mortgage loans:
New lendings	(155,798)	(248,231)
Repayments	170,322	206,111
Change in investment real estate, net	477	583
Change in policy loans, net	18,444	20,973
Change in other long-term investments, net	(8,652)	(136,969)
Change in short-term investments, net	(6,655)	187,652
Net unsettled security transactions	(36,814)	48,994
Purchase of property, equipment, and intangibles	(5,542)	(2,244)
Net cash provided by investing activities	62,773	8,552
Cash flows from financing activities
Borrowings under line of credit arrangement, debt, and subordinated debt	0	375,000
Principal payments on line of credit arrangement, debt, and subordinated debt	(9,325)	(211,412)
Issuance (repayment) of non-recourse funding obligations	(25,000)	(18,000)
Secured financing liabilities	(311,295)	(238,802)
Dividends to shareowner	0	(140,000)
Investment product deposits and change in universal life deposits	1,380,615	892,365
Investment product withdrawals	(979,532)	(529,368)
Other financing activities, net	(241)	(97)
Net cash provided by financing activities	55,222	129,686
Change in cash	106,536	55,414
Cash at beginning of period	173,714	252,310
Cash at end of period	$ 280,250	$ 307,724

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

Basis of Presentation

On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc., a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company (the “Merger”). Prior to February 1, 2015, the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors.

Certain reclassifications have been made in previously reported financial statements and accompanying notes to make prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity.

Entities Included

The consolidated condensed financial statements in this report include the accounts of Protective Life Corporation and subsidiaries and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

For a full description of significant accounting policies, see Note 2 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. There were no significant changes to the Company’s accounting policies during the three months ended March 31, 2019.

Accounting Pronouncements Recently Adopted

Accounting Standards Update (“ASU” or “Update”) No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change relates to the accounting model used by lessees. The Update requires all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The lease asset and liability are measured at the present value of the minimum lease payments less any upfront payments or fees. The amendments in the Update became effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company recorded a cumulative effect adjustment as of the date of adoption, January 1, 2019, establishing a right of use asset and lease liability of $21.5 million on its consolidated condensed balance sheet reflected in the property and equipment and other liabilities line items, respectively.

ASU No. 2017-08 - Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this Update require that premiums on callable debt securities be amortized to the first call date. This is a change from previous guidance, under which premiums are amortized to the maturity date of the security. The amendments became effective for annual and interim periods beginning after December 15, 2018. The Company recorded a cumulative effect adjustment as of the adoption date, January 1, 2019, resulting in a $50.8 million reduction to retained earnings, net of income tax.

ASU No. 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this Update are designed to permit hedge accounting to be applied to a broader range of hedging strategies as well as to more closely align hedge accounting and risk management objectives. Specific provisions include requiring changes in the fair value of a hedging instrument be recorded in the same income statement line as the hedged item when it affects earnings. In addition, after a hedge has initially qualified as an effective hedge the Update permits the use of a qualitative hedge effectiveness test in subsequent periods. The amendments in this Update became effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. At adoption, January 1, 2019, this standard did not have an impact on the Company’s operations or financial results.

Accounting Pronouncements Not Yet Adopted

ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments.

The amendments in this Update introduce a new current expected credit loss (“CECL”) model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance against earnings its estimate of the contractual cash flows not expected to be collected on day one of the asset’s acquisition. The allowance may be reversed through earnings if a security recovers in value. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred and recognizes a security’s subsequent recovery in value in other comprehensive income. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. Similar to the CECL model, credit loss impairments will be recorded in an allowance against earnings that may be reversed for subsequent recoveries in value. The amendments in this Update, along with related amendments in ASU No. 2018-19 - Codification Improvements to Topic 326, Financial Instruments-Credit Losses, are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results.

ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally this Update requires new disclosures including liability rollforwards and information about significant inputs, judgements, assumptions, and methods used in the measurement. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently reviewing its policies, processes, and applicable systems to determine the impact this standard will have on its operations and financial results.

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SIGNIFICANT TRANSACTIONS

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

SIGNIFICANT TRANSACTIONS

SIGNIFICANT TRANSACTIONS

The Lincoln National Life Insurance Company

On May 1, 2018, The Lincoln National Life Insurance Company (“Lincoln Life”) completed its previously announced acquisition (the “Closing”) of Liberty Mutual Group Inc.’s (“Liberty Mutual”) Group Benefits Business and Individual Life and Annuity Business (the “Life Business”) through the acquisition of all of the issued and outstanding capital stock of Liberty Life Assurance Company of Boston (“Liberty”). In connection with the Closing and  pursuant to the Master Transaction Agreement, dated January 18, 2018 (the “Master Transaction Agreement”), previously reported in our Current Report on Form 8-K filed on January 23, 2018, PLICO and Protective Life and Annuity Insurance Company (“PLAIC”), a wholly owned subsidiary of PLICO, entered into reinsurance agreements (the “Liberty Reinsurance Agreements”) and related ancillary documents (including administrative services agreements and transition services agreements) providing for the reinsurance and administration of the Life Business. 

Pursuant to the Liberty Reinsurance Agreements, Liberty ceded to PLICO and PLAIC the insurance policies related to the Life Business on a 100% coinsurance basis. The aggregate ceding commission for the reinsurance of the Life Business was $422.4 million, which is the purchase price.

All policies issued in states other than New York were ceded to PLICO under a reinsurance agreement between Liberty and PLICO, and all policies issued in New York were ceded to PLAIC under a reinsurance agreement between Liberty and PLAIC.  The aggregate statutory reserves of Liberty ceded to PLICO and PLAIC as of the closing of the Transaction were approximately $13.2 billion, which amount was based on initial estimates and is subject to adjustment following the Closing. Pursuant to the terms of the Liberty Reinsurance Agreements, each of PLICO and PLAIC are required to maintain assets in trust for the benefit of Liberty to secure their respective obligations to Liberty under the Liberty Reinsurance Agreements. The trust accounts were initially funded by each of PLICO and PLAIC principally with the investment assets that were received from Liberty. Additionally, PLICO and PLAIC have each agreed to provide, on behalf of Liberty, administration and policyholder servicing of the Life Business reinsured by it pursuant to administrative services agreements between Liberty and each of PLICO and PLAIC.

The terms of the Liberty Reinsurance Agreements resulted in an acquisition of the Life Business by the Company in accordance with ASC Topic 805, Business Combinations.

The following table details the purchase consideration and preliminary allocation of assets acquired and liabilities assumed from the Life Business reinsurance transaction as of the transaction date. These estimates remain preliminary and are subject to adjustment. While they are not expected to be materially different than those shown, any material adjustments to the estimates will be reflected, retroactively, as of the date of the acquisition.

	Fair Value as of May 1, 2018
	(Dollars In Thousands)
ASSETS
Fixed maturities	$	12,588,512
Mortgage loans	435,405
Policy loans	131,489
Total investments	13,155,406
Cash	38,456
Accrued investment income	152,030
Reinsurance receivables	272
Value of business acquired	338,303
Other assets	916
Total assets	13,685,383
LIABILITIES
Future policy benefits and claims	$	11,748,942
Unearned premiums	—
Total policy liabilities and accruals	11,748,942
Annuity account balances	1,823,444
Other policyholders’ funds	41,936
Other liabilities	71,061
Total liabilities	13,685,383
NET ASSETS ACQUIRED	$	—

The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Life Business were completed as of January 1, 2017. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated:

	Unaudited
	For The Three Months Ended March 31, 2018
	(Dollars In Thousands)
Revenue	$	1,416,320
Net income	$	112,869

Great-West Life & Annuity Insurance Company

On January 23, 2019, PLICO entered into a Master Transaction Agreement (the “GWL&A Master Transaction Agreement”) with Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (“GWL&A of NY”), The Canada Life Assurance Company (“CLAC”) and The Great-West Life Assurance Company (“GWL” and, together with GWL&A, GWL&A of NY and CLAC, the “Sellers”), pursuant to which PLICO will acquire via reinsurance (the “Transaction”) substantially all of the Sellers’ individual life insurance and annuity business (the “Individual Life Business”). Pursuant to the GWL&A Master Transaction Agreement, PLICO and PLAIC will enter into reinsurance agreements (the “GWL&A Reinsurance Agreements”) and related ancillary documents at the closing of the Transaction. On the terms and subject to the conditions of the GWL&A Reinsurance Agreements, the Sellers will cede to PLICO and PLAIC, effective as of the closing of the Transaction, substantially all of the insurance policies relating to the Individual Life Business. To support its obligations under the GWL&A Reinsurance Agreements, PLICO will establish trust accounts for the benefit of GWL&A, CLAC and GWL, and PLAIC will establish a trust account for the benefit of GWL&A of NY. The Sellers will retain a block of participating policies, which will be administered by the Company.

The Transaction is subject to the satisfaction or waiver of customary closing conditions, including regulatory approvals and the execution of the GWL&A Reinsurance Agreements and related ancillary documents. The GWL&A Master Transaction Agreement and other transaction documents contain certain customary representations and warranties made by each of the parties, and certain customary covenants regarding the Sellers and the Individual Life Business, and provide for indemnification, among other things, for breaches of those representations, warranties and covenants.

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MONY CLOSED BLOCK OF BUSINESS

3 Months Ended

Mar. 31, 2019

Closed Block Disclosure [Abstract]

MONY CLOSED BLOCK OF BUSINESS

MONY CLOSED BLOCK OF BUSINESS

In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013.

Assets allocated to the Closed Block inure solely to the benefit of each Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account.

The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in accumulated other comprehensive income (loss) “AOCI”) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life, this actuarial calculation of the expected timing of MONY’s Closed Block earnings was recalculated and reset as February 1, 2015, along with the establishment of a policyholder dividend obligation as of such date.

If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block.

Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block.

Summarized financial information for the Closed Block as of March 31, 2019, and December 31, 2018, is as follows:

	As of
	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,643,484	$	5,679,732
Policyholder dividend obligation	11,803		—
Other liabilities	33,254		22,505
Total closed block liabilities	5,688,541		5,702,237
Closed block assets
Fixed maturities, available-for-sale, at fair value	$	4,404,945	$	4,257,437
Mortgage loans on real estate	75,062		75,838
Policy loans	666,270		672,213
Cash	115,204		116,225
Other assets	107,204		136,388
Total closed block assets	5,368,685		5,258,101
Excess of reported closed block liabilities over closed block assets	319,856		444,136
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation: $(118,670) and $(141,128); and net of income tax: $24,921 and $61,676	—		(120,528		)
Future earnings to be recognized from closed block assets and closed block liabilities	$	319,856	$	323,608

Reconciliation of the policyholder dividend obligation is as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Policyholder dividend obligation, beginning of period	$	—		$	160,712
Applicable to net revenue (losses)	(10,655		)	(11,712		)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation	22,458			(149,000		)
Policyholder dividend obligation, end of period	$	11,803		$	—

Closed Block revenues and expenses were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Premiums and other income	$	37,444		$	39,612
Net investment income	51,128			50,543
Net investment gains	(454		)	(237		)
Total revenues	88,118			89,918
Benefits and other deductions
Benefits and settlement expenses	78,666			79,952
Other operating expenses	359			(319		)
Total benefits and other deductions	79,025			79,633
Net revenues before income taxes	9,093			10,285
Income tax expense	1,910			2,160
Net revenues	$	7,183		$	8,125

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INVESTMENT OPERATIONS

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

INVESTMENT OPERATIONS

INVESTMENT OPERATIONS

Net realized gains (losses) are summarized as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Fixed maturities	$	5,117		$	2,783
Equity gains and losses	30,717			(8,786		)
Modco trading portfolio	94,902			(84,709		)
Other investments	(1,146		)	3,113
Realized gains (losses) - all other investments	129,590			(87,599		)
Realized gains (losses) - derivatives(1)	(119,671		)	78,059
Realized investment gains (losses)	$	9,919		$	(9,540	)
Net impairments losses recognized in earnings	$	(3,142	)	$	(3,645	)
(1) See Note 7, Derivative Financial Instruments

Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities and short-term investments) are as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Gross realized gains	$	7,870		$	8,049
Gross realized losses:
Impairment losses	$	(3,142	)	$	(3,645	)
Other realized losses	$	(2,753	)	$	(5,267	)

The chart below summarizes the fair value (proceeds) and the gains (losses) realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position.

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Securities in an unrealized gain position:
Fair value (proceeds)	$	648,891		$	142,133
Gains realized	$	7,870		$	8,049
Securities in an unrealized loss position(1):
Fair value (proceeds)	$	178,004		$	56,984
Losses realized	$	(2,753	)	$	(5,267	)
(1) The Company made the decision to exit these holdings in conjunction with its overall asset/liability management process.

The chart below summarizes the realized gains (losses) on equity securities sold during the period and equity securities still held at the reporting date.

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Net gains (losses) recognized during the period on equity securities	$	30,717	$	(8,786	)
Less: net gains (losses) recognized on equity securities sold during the period	$	60	$	(1,702	)
Gains (losses) recognized during the period on equity securities still held	$	30,657	$	(7,084	)

The amortized cost and fair value of the Company’s investments classified as available-for-sale are as follows:

As of March 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	3,880,305	$	57,389	$	(29,406	)	$	3,908,288	$	—
Commercial mortgage-backed securities	2,363,988		17,199		(27,843		)	2,353,344		—
Other asset-backed securities	1,359,813		18,421		(15,623		)	1,362,611		—
U.S. government-related securities	1,439,136		2,382		(30,412		)	1,411,106		—
Other government-related securities	523,701		12,343		(11,883		)	524,161		—
States, municipals, and political subdivisions	3,632,880		84,040		(25,256		)	3,691,664		1,021
Corporate securities	38,586,159		576,720		(1,213,985		)	37,948,894		(18,719		)
Redeemable preferred stocks	87,579		368		(4,124		)	83,823		—
	51,873,561		768,862		(1,358,532		)	51,283,891		(17,698		)
Short-term investments	783,011		—		—			783,011		—
	$	52,656,572	$	768,862	$	(1,358,532	)	$	52,066,902	$	(17,698	)
As of December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	3,650,539	$	23,247	$	(62,196	)	$	3,611,590	$	(18	)
Commercial mortgage-backed securities	2,349,274		3,911		(58,101		)	2,295,084		—
Other asset-backed securities	1,410,059		17,232		(35,398		)	1,391,893		—
U.S. government-related securities	1,683,432		1,795		(45,722		)	1,639,505		—
Other government-related securities	545,522		4,292		(33,850		)	515,964		—
States, municipals, and political subdivisions	3,682,037		25,706		(118,902		)	3,588,841		876
Corporate securities	38,634,888		112,992		(2,385,052		)	36,362,828		(29,685		)
Redeemable preferred stocks	94,362		—		(11,560		)	82,802		—
	52,050,113		189,175		(2,750,781		)	49,488,507		(28,827		)
Short-term investments	776,357		—		—			776,357		—
	$	52,826,470	$	189,175	$	(2,750,781	)	$	50,264,864	$	(28,827	)
(1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above.

     The Company holds certain investments pursuant to certain modified coinsurance (“Modco”) arrangements. The fixed maturities held as part of these arrangements are classified as trading securities. The fair value of the investments held pursuant to these Modco arrangements are as follows:    

	As of March 31, 2019		As of December 31, 2018
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	213,259	$	241,836
Commercial mortgage-backed securities	209,482		188,925
Other asset-backed securities	149,541		159,907
U.S. government-related securities	59,627		59,794
Other government-related securities	23,640		44,207
States, municipals, and political subdivisions	292,796		286,413
Corporate securities	1,533,256		1,423,833
Redeemable preferred stocks	11,860		11,277
	2,493,461		2,416,192
Equity securities	9,207		9,892
Short-term investments	34,631		30,926
	$	2,537,299	$	2,457,010

The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of March 31, 2019, by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars In Thousands)
Due in one year or less	$	1,259,571	$	1,257,644	$	—	$	—
Due after one year through five years	8,954,924		8,938,604		—		—
Due after five years through ten years	8,979,403		9,034,109		—		—
Due after ten years	32,679,663		32,053,534		2,607,356		2,594,441
	$	51,873,561	$	51,283,891	$	2,607,356	$	2,594,441

The chart below summarizes the Company’s other-than-temporary impairments of investments. All of the impairments were related to fixed maturities.

	For The Three Months Ended March 31,
	2019			2018
	Fixed Maturities			Fixed Maturities
	(Dollars In Thousands)
Other-than-temporary impairments	$	(1,295	)	$	(691	)
Non-credit impairment losses recorded in other comprehensive income (loss)	(1,847		)	(2,954		)
Net impairment losses recognized in earnings	$	(3,142	)	$	(3,645	)

There were no other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell for the three months ended March 31, 2019 and 2018.

     The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss):

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Beginning balance	$	24,868		$	3,268
Additions for newly impaired securities	751			—
Additions for previously impaired securities	2,347			—
Reductions for previously impaired securities due to a change in expected cash flows	(632		)	(1,033		)
Reductions for previously impaired securities that were sold in the current period	(119		)	—
Ending balance	$	27,215		$	2,235

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2019:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	158,901	$	(1,772	)	$	1,242,286	$	(27,634	)	$	1,401,187	$	(29,406	)
Commercial mortgage-backed securities	52,747		(1,235		)	1,478,365		(26,608		)	1,531,112		(27,843		)
Other asset-backed securities	531,548		(11,905		)	192,201		(3,718		)	723,749		(15,623		)
U.S. government-related securities	43,977		(640		)	1,045,717		(29,772		)	1,089,694		(30,412		)
Other government-related securities	51,767		(1,279		)	198,112		(10,604		)	249,879		(11,883		)
States, municipals, and political subdivisions	60,555		(369		)	911,555		(24,887		)	972,110		(25,256		)
Corporate securities	3,340,636		(136,453		)	17,623,264		(1,077,532		)	20,963,900		(1,213,985		)
Redeemable preferred stocks	10,154		(3		)	68,291		(4,121		)	78,445		(4,124		)
	$	4,250,285	$	(153,656	)	$	22,759,791	$	(1,204,876	)	$	27,010,076	$	(1,358,532	)

Residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”) had gross unrealized losses greater than twelve months of $27.6 million and $26.6 million as of March 31, 2019. Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments.

The other asset-backed securities had a gross unrealized loss greater than twelve months of $3.7 million as of March 31, 2019. This category predominately includes student loan backed auction rate securities (“ARS”) whose underlying collateral is at least 97% guaranteed by the Federal Family Education Loan Program (“FFELP”). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary.

The U.S. government-related securities and the other government-related securities had gross unrealized losses greater than twelve months of $29.8 million and $10.6 million, respectively, as of March 31, 2019. These declines were related to changes in interest rates.

The states, municipals, and political subdivisions category had gross unrealized losses greater than twelve months of $24.9 million as of March 31, 2019. The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information.

The corporate securities category had gross unrealized losses greater than twelve months of $1.1 billion as of March 31, 2019. The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information.

     As of March 31, 2019, the Company had a total of 2,473 positions that were in an unrealized loss position, but the Company does not consider these unrealized loss positions to be other-than-temporary. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and the Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities.

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	1,485,009	$	(31,302	)	$	804,364	$	(30,894	)	$	2,289,373	$	(62,196	)
Commercial mortgage-backed securities	422,438		(7,442		)	1,429,384		(50,659		)	1,851,822		(58,101		)
Other asset-backed securities	687,271		(30,963		)	148,871		(4,435		)	836,142		(35,398		)
U.S. government-related securities	130,290		(4,668		)	1,085,654		(41,054		)	1,215,944		(45,722		)
Other government-related securities	226,201		(15,267		)	131,569		(18,583		)	357,770		(33,850		)
States, municipals, and political subdivisions	1,004,262		(27,180		)	1,129,152		(91,722		)	2,133,414		(118,902		)
Corporate securities	18,326,331		(970,553		)	12,859,732		(1,414,499		)	31,186,063		(2,385,052		)
Redeemable preferred stocks	41,147		(4,467		)	41,655		(7,093		)	82,802		(11,560		)
	$	22,322,949	$	(1,091,842	)	$	17,630,381	$	(1,658,939	)	$	39,953,330	$	(2,750,781	)

     As of March 31, 2019, the Company had securities in its available-for-sale portfolio which were rated below investment grade of $1.6 billion and had an amortized cost of $1.7 billion. In addition, included in the Company’s trading portfolio, the Company held $120.7 million of securities which were rated below investment grade. Approximately $264.2 million of the available-for-sale and trading securities that were below investment grade were not publicly traded.

The change in unrealized gains (losses), net of income tax, on fixed maturities, classified as available-for-sale is summarized as follows:

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Fixed maturities	$	1,557,829	$	(884,219	)

The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of March 31, 2019 and December 31, 2018, are as follows:

As of March 31, 2019	Amortized Cost		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value		Total OTTI Recognized in OCI
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain, LLC	$	764,356	$	—	$	(56,483	)	$	707,873	$	—
Steel City, LLC	1,843,000		43,568		—			1,886,568		—
	$	2,607,356	$	43,568	$	(56,483	)	$	2,594,441	$	—
As of December 31, 2018	Amortized Cost		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value		Total OTTI Recognized in OCI
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain, LLC	$	750,474	$	—	$	(81,657	)	$	668,817	$	—
Steel City, LLC	1,883,000		—		(4,607		)	1,878,393		—
	$	2,633,474	$	—	$	(86,264	)	$	2,547,210	$	—

During the three months ended March 31, 2019 and 2018, the Company recorded no other-than-temporary impairments on held-to-maturity securities.

The Company’s held-to-maturity securities had $43.6 million of gross unrecognized holding gains and $56.5 million of gross unrecognized holding losses as of March 31, 2019. The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. These held-to-maturity securities are issued by affiliates of the Company which are considered variable interest entities (“VIEs”). The Company is not the primary beneficiary of these entities and thus the securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are affiliates of the Company.

The Company’s held-to-maturity securities had $86.3 million of gross unrecognized holding losses as of December 31, 2018. The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information.

Variable Interest Entities

The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a VIE. If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

Based on this analysis, the Company had an interest in two subsidiaries as of March 31, 2019 and December 31, 2018, Red Mountain, LLC (“Red Mountain”) and Steel City, LLC (“Steel City”), that were determined to be VIEs.

The activity most significant to Red Mountain is the issuance of a note in connection with a financing transaction involving Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”) in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued a note (the “Red Mountain Note”) to Golden Gate V. For details of this transaction, see Note 11, Debt and Other Obligations. The Company had the power, via its 100% ownership through an affiliate, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third party in its function as provider of credit enhancement on the Red Mountain Note. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment, through an affiliate, of $10,000. Additionally, the Company has guaranteed Red Mountain’s payment obligation for the credit enhancement fee to the unrelated third party provider. As of March 31, 2019, no payments have been made or required related to this guarantee.

Steel City, a wholly owned subsidiary of the Company, entered into a financing agreement on January 15, 2016 involving Golden Gate Captive Insurance Company ("Golden Gate"), in which Golden Gate issued non-recourse funding obligations to Steel City and Steel City issued three notes (the “Steel City Notes”) to Golden Gate. Credit enhancement on the Steel City Notes is provided by unrelated third parties. For details of the financing transaction, see Note 11, Debt and Other Obligations. The activity most significant to Steel City is the issuance of the Steel City Notes. The Company had the power, via its 100% ownership, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third parties in their function as providers of credit enhancement on the Steel City Notes. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment of $10,000. Additionally, the Company has guaranteed Steel City’s payment obligation for the credit enhancement fee to the unrelated third party providers. As of March 31, 2019, no payments have been made or required related to this guarantee.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material.

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 consolidated balance sheets are categorized as follows:

•Level 1:  Unadjusted quoted prices for identical assets or liabilities in an active market.

• Level 2:  Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following:

a)    Quoted prices for similar assets or liabilities in active markets;

b)    Quoted prices for identical or similar assets or liabilities in non-active markets;

c)    Inputs other than quoted market prices that are observable; and

d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.

• Level 3:  Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of March 31, 2019:

	Measurement Category	Level 1		Level 2		Level 3		Total
		(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	4	$	—	$	3,908,288	$	—	$	3,908,288
Commercial mortgage-backed securities	4	—		2,353,344		—		2,353,344
Other asset-backed securities	4	—		942,520		420,091		1,362,611
U.S. government-related securities	4	911,137		499,969		—		1,411,106
State, municipals, and political subdivisions	4	—		3,691,664		—		3,691,664
Other government-related securities	4	—		524,161		—		524,161
Corporate securities	4	—		37,300,286		648,608		37,948,894
Redeemable preferred stocks	4	66,650		17,173		—		83,823
Total fixed maturity securities - available-for-sale		977,787		49,237,405		1,068,699		51,283,891
Fixed maturity securities - trading
Residential mortgage-backed securities	3	—		213,259		—		213,259
Commercial mortgage-backed securities	3	—		209,482		—		209,482
Other asset-backed securities	3	—		83,057		66,484		149,541
U.S. government-related securities	3	26,880		32,747		—		59,627
State, municipals, and political subdivisions	3	—		292,796		—		292,796
Other government-related securities	3	—		23,640		—		23,640
Corporate securities	3	—		1,528,005		5,251		1,533,256
Redeemable preferred stocks	3	11,860		—		—		11,860
Total fixed maturity securities - trading		38,740		2,382,986		71,735		2,493,461
Total fixed maturity securities		1,016,527		51,620,391		1,140,434		53,777,352
Equity securities	3	555,009		37		64,394		619,440
Other long-term investments(1)	3 & 4	68,379		359,864		109,532		537,775
Short-term investments	3	722,906		94,736		—		817,642
Total investments		2,362,821		52,075,028		1,314,360		55,752,209
Cash	3	278,630		—		—		278,630
Other assets	3	32,510		—		—		32,510
Assets related to separate accounts
Variable annuity	3	12,737,450		—		—		12,737,450
Variable universal life	3	1,041,397		—		—		1,041,397
Total assets measured at fair value on a recurring basis		$	16,452,808	$	52,075,028	$	1,314,360	$	69,842,196
Liabilities:
Annuity account balances (2)	3	$	—	$	—	$	74,613	$	74,613
Other liabilities(1)	3 & 4	18,581		156,493		797,891		972,965
Total liabilities measured at fair value on a recurring basis		$	18,581	$	156,493	$	872,504	$	1,047,578
(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 (Loss)

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, municipals, 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 stocks	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, municipals, 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 stocks	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 (Loss)

Determination of fair values

The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table.

The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price 93.5% of the Company’s available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non-binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which we purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation.

The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies.

For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value through an analysis using internal and external cash flow models developed based on spreads and, when available, market indices. The Company uses a market-based cash flow analysis to validate the reasonableness of prices received from independent brokers. These analytics, which are updated daily, incorporate various metrics (yield curves, credit spreads, prepayment rates, etc.) to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the three months endedMarch 31, 2019.

The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3.

Asset-Backed Securities

This category mainly consists of residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). As of March 31, 2019, the Company held $7.7 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities.

After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

As of March 31, 2019, the Company held $486.6 million of Level 3 ABS, which included $420.1 million of other asset-backed securities classified as available-for-sale and $66.5 million of other asset-backed securities classified as trading. These securities are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate. In periods where market activity increases and there are transactions at a price that is not the result of a distressed or forced sale we consider those prices as part of our valuation. If the market activity during a period is solely the result of the issuer redeeming positions we consider those transactions in our valuation, but still consider them to be Level 3 measurements due to the nature of the transaction.

Corporate Securities, Redeemable Preferred Stocks, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government-Related Securities

As of March 31, 2019, the Company classified approximately $43.9 billion of corporate securities, redeemable preferred stocks, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

The brokers and third party pricing service utilize valuation models that consist of a hybrid income and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market.

As of March 31, 2019, the Company classified approximately $653.9 million of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium.

Equities

As of March 31, 2019, the Company held approximately $64.4 million of equity securities classified as Level 2 and Level 3. Of this total, $63.4 million represents Federal Home Loan Bank (“FHLB”) stock. The Company believes that the cost of the FHLB stock approximates fair value.

Other Long-term Investments and Other Liabilities

Other long-term investments and other liabilities consist entirely of free-standing and embedded derivative financial instruments. Refer to Note 7, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of March 31, 2019, 100% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses.

Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets.

Derivative instruments classified as Level 2 primarily include swaps, options, and swaptions, which are traded over-the-counter. Level 2 also includes certain centrally cleared derivatives. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs.

Derivative instruments classified as Level 3 are embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities.

The embedded derivatives are carried at fair value in other long-term investments and other liabilities on the Company’s consolidated condensed balance sheet. The changes in fair value are recorded in earnings as Realized investment gains (losses). Refer to Note 7, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses.

The fair value of the guaranteed living withdrawal benefits (“GLWB”) embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near-term equity market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the Ruark 2015 ALB table, with attained age factors varying from 87.0% - 100.0% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR plus a credit spread (to represent the Company’s non-performance risk). As a result of using significant unobservable inputs, the GLWB embedded derivative is categorized as Level 3. Policyholder assumptions are reviewed on an annual basis.

The balance of the fixed indexed annuity (“FIA”) embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 2015 Ruark ALB mortality table, with attained age factors varying from 87% - 100% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3.

The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the SOA 2015 VBT Primary Tables, with attained age factors varying from 37% - 577% based on company experience. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3.

The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. As a result, these agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in earnings. The investments supporting these agreements are designated as “trading securities”; therefore changes in their fair value are also reported in earnings. As of March 31, 2019, the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $2.3 billion and the statutory unrealized gain (loss) of the securities of $113.0 million. As a result, changes in the fair value of the embedded derivatives are largely offset by the changes in fair value of the related investments and each are reported in earnings. The fair value of the embedded derivative is considered a Level 3 valuation due to the unobservable nature of the policy liabilities.

Annuity Account Balances

The Company records a certain legacy block of FIA reserves at fair value. Based on the characteristics of these reserves, the Company believes that the fund value approximates fair value. The fair value measurement of these reserves is considered a Level 3 valuation due to the unobservable nature of the fund values. The Level 3 fair value as of March 31, 2019 is $74.6 million.

Separate Accounts

Separate account assets are invested in open-ended mutual funds and are included in Level 1.

Valuation of Level 3 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 March 31, 2019		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	419,915	Liquidation	Liquidation value	$95.39 - $99.99 ($98.00)
			Discounted cash flow	Liquidity premium	0.04% - 1.27% (0.54%)
				Paydown rate	10.90% - 13.09% (11.97%)
Corporate securities	648,608		Discounted cash flow	Spread over treasury	0.92% - 3.87% (1.65%)
Liabilities:(1)
Embedded derivatives - GLWB(2)	$	203,696	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	0.23% - 1.01%
Embedded derivative - FIA	264,430		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
					Dynamically adjusted for WB moneyness and projected market rates vs credited rates
				Nonperformance risk	0.23% - 1.01%
Embedded derivative - IUL	112,814		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	0.23% - 1.01%
(1) Excludes modified coinsurance arrangements.
(2) The fair value for the GLWB embedded derivative is presented as a net liability.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value.

The Company has considered all reasonably available quantitative inputs as of March 31, 2019, but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $72.7 million of financial instruments being classified as Level 3 as of March 31, 2019. Of the $72.7 million, $66.7 million are other asset-backed securities, $5.2 million are corporate securities, and $0.8 million are equity securities.

In certain cases, the Company has determined that book value materially approximates fair value. As of March 31, 2019, the Company held $63.6 million of financial instruments where book value approximates fair value which was predominantly FHLB stock.

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.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value.

The Company had considered all reasonably available quantitative inputs as of December 31, 2018, but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $40.4 million of financial instruments being classified as Level 3 as of December 31, 2018. Of the $40.4 million, $26.2 million are other asset-backed securities, $13.5 million are corporate securities, and $0.7 million are equity securities.

In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2018, the Company held $63.6 million of financial instruments where book value approximates fair value which was predominantly FHLB stock.

The asset-backed securities classified as Level 3 are predominantly ARS. A change in the paydown rate (the projected annual rate of principal reduction) of the ARS can significantly impact the fair value of these securities. A decrease in the paydown rate would increase the projected weighted average life of the ARS and increase the sensitivity of the ARS’ fair value to changes in interest rates. An increase in the liquidity premium would result in a decrease in the fair value of the securities, while a decrease in the liquidity premium would increase the fair value of these securities. The liquidation values for these securities are sensitive to the issuer’s available cash flows and ability to redeem the securities, as well as the current holders’ willingness to liquidate at the specified price.

The fair value of corporate bonds classified as Level 3 is sensitive to changes in the interest rate spread over the corresponding U.S. Treasury rate. This spread represents a risk premium that is impacted by company-specific and market factors. An increase in the spread can be caused by a perceived increase in credit risk of a specific issuer and/or an increase in the overall market risk premium associated with similar securities. The fair values of corporate bonds are sensitive to changes in spread. When holding the treasury rate constant, the fair value of corporate bonds increases when spreads decrease, and decreases when spreads increase.

The fair value of the GLWB embedded derivative is sensitive to changes in the discount rate which includes the Company’s nonperformance risk, volatility, lapse, and mortality assumptions. The volatility assumption is an observable input as it is based on market inputs. The Company’s nonperformance risk, lapse, and mortality are unobservable. An increase in the three unobservable assumptions would result in a decrease in the fair value of the liability and conversely, if there is a decrease in the assumptions the fair value would increase. The fair value is also dependent on the assumed policyholder utilization of the GLWB where an increase in assumed utilization would result in an increase in the fair value of the liability and conversely, if there is a decrease in the assumption, the fair value would decrease.

The fair value of the FIA embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the FIA embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and nonperformance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The fair value of the IUL embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the IUL embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and non-performance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended March 31, 2019, for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in Earnings related to Instruments still held at the  Reporting Date
	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	$	—	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	421,642		446		8,147		(20		)	(331		)	—		(10,008		)	—		—		—			215			420,091		—
Corporate securities	638,276		—		18,585		—			(3,012		)	34,000		(28,773		)	—		—		(10,095		)	(373		)	648,608		—
Total fixed maturity securities - available-for-sale	1,059,918		446		26,732		(20		)	(3,343		)	34,000		(38,781		)	—		—		(10,095		)	(158		)	1,068,699		—
Fixed maturity securities - trading
Other asset-backed securities	26,056		3,196		—		(116		)	—			15,463		(5,111		)	—		—		27,064			(68		)	66,484		5,330
Corporate securities	6,242		101		—		(31		)	—			—		(1,036		)	—		—		—			(25		)	5,251		34
Total fixed maturity securities - trading	32,298		3,297		—		(147		)	—			15,463		(6,147		)	—		—		27,064			(93		)	71,735		5,364
Total fixed maturity securities	1,092,216		3,743		26,732		(167		)	(3,343		)	49,463		(44,928		)	—		—		16,969			(251		)	1,140,434		5,364
Equity securities	64,325		82		—		(13		)	—			—		—			—		—		—			—			64,394		69
Other long-term investments(1)	112,344		13,222		—		(16,034		)	—			—		—			—		—		—			—			109,532		(2,812		)
Total investments	1,268,885		17,047		26,732		(16,214		)	(3,343		)	49,463		(44,928		)	—		—		16,969			(251		)	1,314,360		2,621
Total assets measured at fair value on a recurring basis	$	1,268,885	$	17,047	$	26,732	$	(16,214	)	$	(3,343	)	$	49,463	$	(44,928	)	$	—	$	—	$	16,969		$	(251	)	$	1,314,360	$	2,621
Liabilities:
Annuity account balances(2)	$	76,119	$	—	$	—	$	(326	)	$	—		$	—	$	—		$	11	$	1,843	$	—		$	—		$	74,613	$	—
Other liabilities(1)	629,942		11,670		—		(179,619		)	—			—		—			—		—		—			—			797,891		(167,949		)
Total liabilities measured at fair value on a recurring basis	$	706,061	$	11,670	$	—	$	(179,945	)	$	—		$	—	$	—		$	11	$	1,843	$	—		$	—		$	872,504	$	(167,949	)
(1) Represents certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.

For the three months ended March 31, 2019, there were $36.0 million of securities transferred into Level 3.

For the three months ended March 31, 2019, there were $19.0 million of securities transferred into Level 2 from Level 3.These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of March 31, 2019.

For the three months ended March 31, 2019, there were no transfers from Level 2 into Level 1.

For the three months ended March 31, 2019, there were no transfers from Level 1 into Level 2.

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

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																						Total Gains (losses) included in Earnings related to Instruments still held at the  Reporting Date
	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	$	—	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	504,365		—		514		—			(1,634		)	—		(14		)	—		—		—		558			503,789		—
Corporate securities	626,901		—		1,399		—			(12,101		)	35,000		(23,635		)	—		—		—		(1,155		)	626,409		—
Total fixed maturity securities - available-for-sale	1,131,266		—		1,913		—			(13,735		)	35,000		(23,649		)	—		—		—		(597		)	1,130,198		—
Fixed maturity securities - trading
Other asset-backed securities	35,222		194		—		(28		)	—			—		(396		)	—		—		—		(34		)	34,958		166
Corporate securities	5,442		—		—		(94		)	—			—		—			—		—		—		(24		)	5,324		(94		)
Total fixed maturity securities - trading	40,664		194		—		(122		)	—			—		(396		)	—		—		—		(58		)	40,282		72
Total fixed maturity securities	1,171,930		194		1,913		(122		)	(13,735		)	35,000		(24,045		)	—		—		—		(655		)	1,170,480		72
Equity securities	66,110		—		—		(49		)	—			—		—			—		—		—		—			66,061		(49		)
Other long-term investments(1)	136,004		8,864		—		(516		)	—			—		—			—		—		—		—			144,352		8,348
Total investments	1,374,044		9,058		1,913		(687		)	(13,735		)	35,000		(24,045		)	—		—		—		(655		)	1,380,893		8,371
Total assets measured at fair value on a recurring basis	$	1,374,044	$	9,058	$	1,913	$	(687	)	$	(13,735	)	$	35,000	$	(24,045	)	$	—	$	—	$	—	$	(655	)	$	1,380,893	$	8,371
Liabilities:
Annuity account balances(2)	$	83,472	$	—	$	—	$	(794	)	$	—		$	—	$	—		$	441	$	3,308	$	—	$	—		$	81,399	$	—
Other liabilities(1)	760,890		161,318		—		(21,530		)	—			—		—			—		—		—		—			621,102		139,788
Total liabilities measured at fair value on a recurring basis	$	844,362	$	161,318	$	—	$	(22,324	)	$	—		$	—	$	—		$	441	$	3,308	$	—	$	—		$	702,501	$	139,788
(1) Represents certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.

For the three months ended March 31, 2018, there were no securities transferred into Level 3.

For the three months ended March 31, 2018, there were no securities transferred into Level 2 from Level 3.

For the three months ended March 31, 2018, there were no transfers from Level 2 into Level 1.

For the three months ended March 31, 2018, there were no transfers from Level 1 into Level 2.

Total realized and unrealized gains (losses) on Level 3 assets and liabilities are primarily reported in either realized investment gains (losses) within the consolidated condensed statements of income (loss) or other comprehensive income (loss) within shareowner’s equity based on the appropriate accounting treatment for the item.

Purchases, sales, issuances, and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily relates to purchases and sales of fixed maturity securities and issuances and settlements of fixed indexed annuities.

The Company reviews the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. The asset transfers in the table(s) above primarily related to positions moved from Level 3 to Level 2 as the Company determined that certain inputs were observable.

The amount of total gains (losses) for assets and liabilities still held as of the reporting date primarily represents changes in fair value of trading securities and certain derivatives that exist as of the reporting date and the change in fair value of fixed indexed annuities.

Estimated Fair Value of 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
		March 31, 2019				December 31, 2018
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	7,701,465	$	7,624,622	$	7,724,733	$	7,447,702
Policy loans	3	1,677,442		1,677,442		1,695,886		1,695,886
Fixed maturities, held-to-maturity(1)	3	2,607,356		2,594,441		2,633,474		2,547,210
Liabilities:
Stable value product account balances	3	$	5,527,816	$	5,536,721	$	5,234,731	$	5,200,723
Future policy benefits and claims(2)	3	1,637,741		1,644,622		1,671,414		1,671,434
Other policyholders’ funds(3)	3	105,141		107,975		131,150		131,782
Debt:(4)
Bank borrowings	3	$	—	$	—	$	—	$	—
Senior Notes	2	1,080,878		1,076,623		1,100,508		1,065,338
Subordinated debentures	2	495,460		501,945		495,426		494,265
Subordinated funding obligations	3	110,000		99,026		110,000		95,476
Non-recourse funding obligations(5)	3	2,607,021		2,656,379		2,632,497		2,550,237
Except as noted below, fair values were estimated using quoted market prices.
(1) Securities purchased from unconsolidated affiliates, 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 $2.8 million and $1.3 million as of March 31, 2019 and December 31, 2018, respectively.
(5) As of March 31, 2019, carrying amount of $2.5 billion and a fair value of $2.6 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. 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.

Fair Value Measurements

Mortgage loans on real estate

The Company estimates the fair value of mortgage loans using an internally developed model. This model includes inputs derived by the Company based on assumed discount rates relative to the Company’s current mortgage loan lending rate and an expected cash flow analysis based on a review of the mortgage loan terms. The model also contains the Company’s determined representative risk adjustment assumptions related to credit and liquidity risks.

Policy loans

The Company believes the fair value of policy loans approximates book value. Policy loans are funds provided to policyholders in return for a claim on the policy. The funds provided are limited to the cash surrender value of the underlying policy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of repayments, the Company believes the carrying value of policy loans approximates fair value.

Fixed maturities, held-to-maturity

The Company estimates the fair value of its fixed maturity, held-to-maturity securities using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

Stable value product and other investment contract balances

The Company estimates the fair value of stable value product account balances and other investment contract balances (included in Future policy benefits and claims as well as Other policyholders’ funds line items on our consolidated condensed balance sheet) using models based on discounted expected cash flows. The discount rates used in the models are based on a current market rate for similar financial instruments.

Debt

Bank borrowings

The Company believes the carrying value of its bank borrowings approximates fair value as the borrowings pay a floating interest rate plus a spread based on the rating of the Company’s senior debt which the Company believes approximates a market interest rate.

Senior notes and subordinated debt securities

The Company estimates the fair value of its Senior Notes and Subordinated debt securities using quoted market prices from third party pricing services, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate.

Funding obligations

The Company estimates the fair value of its subordinated and non-recourse funding obligations using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

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DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program.

Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department.

Derivatives Related to Interest Rate Risk Management

Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions.

Derivatives Related to Foreign Currency Exchange Risk Management

Derivative instruments that are used as part of the Company’s foreign currency exchange risk management strategy include foreign currency swaps, foreign currency futures, foreign equity futures, and foreign equity options.

Derivatives Related to Risk Mitigation of Certain Annuity Contracts

The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to variable annuity (“VA”) contracts, fixed indexed annuities, and indexed universal life contracts:

•Foreign Currency Futures

•Variance Swaps

•Interest Rate Futures

•Equity Options

•Equity Futures

•Credit Derivatives

•Interest Rate Swaps

•Interest Rate Swaptions

•Volatility Futures

•Volatility Options

•Total Return Swaps

Accounting for Derivative Instruments

The Company records its derivative financial instruments in the consolidated balance sheet in other long-term investments and other liabilities in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists.

It is the Company's policy not to offset assets and liabilities associated with open derivative contracts. However, the Chicago Mercantile Exchange (“CME”) rules characterize variation margin transfers as settlement payments, as opposed to adjustments to collateral. As a result, derivative assets and liabilities associated with centrally cleared derivatives for which the CME serves as the central clearing party are presented as if these derivatives had been settled as of the reporting date.

For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the effective portion of their realized gain or loss is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis.

The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through earnings in the period of change. Changes in the fair value of derivatives that are recognized in current earnings are reported in realized investment gains (losses).

Derivative Instruments Designated and Qualifying as Hedging Instruments

Cash-Flow Hedges

• To hedge a fixed rate note denominated in a foreign currency, the Company entered into a fixed-to-fixed foreign currency swap in order to hedge the foreign currency exchange risk associated with the note. The cash flows received on the swap are identical to the cash flows paid on the note.

• To hedge a floating rate note, the Company entered into an interest rate swap to exchange the floating rate on the note for a fixed rate in order to hedge the interest rate risk associated with the note. The cash flows received on the swap are identical to the cash flow variability paid on the note.

Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments

The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in earnings during the period of change.

Derivatives Related to Variable Annuity Contracts

• The Company uses equity futures, equity options, total return swaps, interest rate futures, interest rate swaps, interest rate swaptions, currency futures, volatility futures, volatility options, and variance swaps to mitigate the risk related to certain guaranteed minimum benefits, including GLWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility.

• The Company markets certain VA products with a GLWB rider. The GLWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

Derivatives Related to Fixed Annuity Contracts

• The Company uses equity futures and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity markets and overall volatility.

• The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative as it is, not considered to be clearly and closely related to the host contract.

Derivatives Related to Indexed Universal Life Contracts

• The Company uses equity futures and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets.

• The Company markets certain IUL products. The IUL component is considered an embedded derivative as it is not considered to be clearly and closely related to the host contract.

Other Derivatives

• The Company uses various swaps and other types of derivatives to manage risk related to other exposures.

• The Company is involved in various modified coinsurance and funds withheld arrangements which contain embedded derivatives. Changes in their fair value are recorded in current period earnings. The investment portfolios that support the related modified coinsurance reserves and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives.

The following table sets forth realized investments gains and losses for the periods shown:

Realized investment gains (losses) - derivative financial instruments

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures	$	(6,022	)	$	(16,892	)
Equity futures	29,738			(6,428		)
Currency futures	2,244			(7,583		)
Equity options	(71,695		)	12,016
Interest rate swaptions	—			(14		)
Interest rate swaps	74,861			(63,710		)
Total return swaps	(40,027		)	6,490
Embedded derivative - GLWB	(19,626		)	56,292
Total derivatives related to VA contracts	(30,527		)	(19,829		)
Derivatives related to FIA contracts:
Embedded derivative	(38,814		)	11,330
Equity futures	(429		)	(161		)
Equity options	42,050			(4,669		)
Total derivatives related to FIA contracts	2,807			6,500
Derivatives related to IUL contracts:
Embedded derivative	(13,370		)	9,884
Equity futures	171			136
Equity options	6,180			(1,250		)
Total derivatives related to IUL contracts	(7,019		)	8,770
Embedded derivative - Modco reinsurance treaties	(84,998		)	82,658
Other derivatives	66			(40		)
Total realized gains (losses) - derivatives	$	(119,671	)	$	78,059

The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship.

Gain (Loss) on Derivatives in Cash Flow Hedging Relationship

	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives			Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)			Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)			(Effective Portion)			(Ineffective Portion)
				Benefits and settlement			Realized investment
				expenses			gains (losses)
				(Dollars In Thousands)
For The Three Months Ended March 31, 2019
Foreign currency swaps	$	(1,893	)	$	(207	)	$	—
Interest rate swaps	(595		)	(71		)	—
Total	$	(2,488	)	$	(278	)	$	—
For The Three Months Ended March 31, 2018
Foreign currency swaps	$	615		$	(113	)	$	—
Total	$	615		$	(113	)	$	—

Based on expected cash flows of the underlying hedged items, the Company expects to reclassify $1.0 million out of accumulated other comprehensive income (loss) into earnings during the next twelve months.

The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below:

	As of
	March 31, 2019				December 31, 2018
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(Dollars In Thousands)
Other long-term investments
Derivatives not designated as hedging instruments:
Interest rate swaps	$	1,583,000	$	47,915	$	1,515,500	$	28,501
Total return swaps	562,658		2,292		138,070		3,971
Embedded derivative - Modco reinsurance treaties	39,878		38		585,294		7,072
Embedded derivative - GLWB	3,922,844		109,494		3,984,070		105,272
Interest rate futures	295,638		7,267		286,208		10,302
Equity futures	70,902		1,261		12,633		483
Currency futures	174,407		718		—		—
Equity options	6,061,873		368,624		5,624,081		220,092
Interest rate swaptions	—		—		—		—
Other	157		166		157		136
	$	12,711,357	$	537,775	$	12,146,013	$	375,829
Other liabilities
Cash flow hedges:
Interest rate swaps	$	350,000	$	—	$	350,000	$	—
Foreign currency swaps	117,178		1,996		117,178		904
Derivatives not designated as hedging instruments:
Interest rate swaps	525,000		2,591		775,000		11,367
Total return swaps	54,342		276		768,177		23,054
Embedded derivative - Modco reinsurance treaties	2,325,352		107,457		1,795,287		32,828
Embedded derivative - GLWB	6,276,475		313,190		8,466,019		289,343
Embedded derivative - FIA	2,639,780		263,445		2,576,033		217,288
Embedded derivative - IUL	247,241		112,814		233,550		90,231
Interest rate futures	870,669		13,231		863,706		20,100
Equity futures	172,853		3,512		659,357		33,753
Currency futures	57,073		8		202,747		2,163
Equity options	4,161,969		153,460		4,199,687		34,178
Other	8,498		985		3,288		252
	$	17,806,430	$	972,965	$	21,010,029	$	755,461

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OFFSETTING OF ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2019

Offsetting [Abstract]

OFFSETTING OF ASSETS AND LIABILITIES

OFFSETTING OF ASSETS AND LIABILITIES

Certain of the Company's derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company's repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 11, Debt and Other Obligations for details of the Company’s repurchase agreement programs.

Collateral received includes both cash and non-cash collateral.  Cash collateral received by the Company is recorded on the consolidated condensed balance sheet as “cash”, with a corresponding amount recorded in “other liabilities” to represent the Company’s obligation to return the collateral.  Non-cash collateral received by the Company is not recognized on the consolidated condensed balance sheet unless the Company exercises its right to sell or re-pledge the underlying asset. As of March 31, 2019, the fair value of non-cash collateral received was $31.0 million. As of December 31, 2018, the fair value of non-cash collateral received was $45.0 million.

The tables below present the derivative instruments by assets and liabilities for the Company as of March 31, 2019:

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	428,077	$	—	$	428,077	$	165,785	$	152,924	$	109,368
Total derivatives, subject to a master netting arrangement or similar arrangement	428,077		—		428,077		165,785		152,924		109,368
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	38		—		38		—		—		38
Embedded derivative - GLWB	109,494		—		109,494		—		—		109,494
Other	166		—		166		—		—		166
Total derivatives, not subject to a master netting arrangement or similar arrangement	109,698		—		109,698		—		—		109,698
Total derivatives	537,775		—		537,775		165,785		152,924		219,066
Total Assets	$	537,775	$	—	$	537,775	$	165,785	$	152,924	$	219,066

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	175,074	$	—	$	175,074	$	165,785	$	9,289	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	175,074		—		175,074		165,785		9,289		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	107,457		—		107,457		—		—		107,457
Embedded derivative - GLWB	313,190		—		313,190		—		—		313,190
Embedded derivative - FIA	263,445		—		263,445		—		—		263,445
Embedded derivative - IUL	112,814		—		112,814		—		—		112,814
Other	985		—		985		—		—		985
Total derivatives, not subject to a master netting arrangement or similar arrangement	797,891		—		797,891		—		—		797,891
Total derivatives	972,965		—		972,965		165,785		9,289		797,891
Repurchase agreements(1)	89,275		—		89,275		—		—		89,275
Total Liabilities	$	1,062,240	$	—	$	1,062,240	$	165,785	$	9,289	$	887,166
(1) Borrowings under repurchase agreements are for a term less than 90 days.

The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2018: 

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	263,349	$	—	$	263,349	$	70,322	$	99,199	$	93,828
Total derivatives, subject to a master netting arrangement or similar arrangement	263,349		—		263,349		70,322		99,199		93,828
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	7,072		—		7,072		—		—		7,072
Embedded derivative - GLWB	105,272		—		105,272		—		—		105,272
Other	136		—		136		—		—		136
Total derivatives, not subject to a master netting arrangement or similar arrangement	112,480		—		112,480		—		—		112,480
Total derivatives	375,829		—		375,829		70,322		99,199		206,308
Total Assets	$	375,829	$	—	$	375,829	$	70,322	$	99,199	$	206,308

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	125,519	$	—	$	125,519	$	70,322	$	47,856	$	7,341
Total derivatives, subject to a master netting arrangement or similar arrangement	125,519		—		125,519		70,322		47,856		7,341
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	32,828		—		32,828		—		—		32,828
Embedded derivative - GLWB	289,343		—		289,343		—		—		289,343
Embedded derivative - FIA	217,288		—		217,288		—		—		217,288
Embedded derivative - IUL	90,231		—		90,231		—		—		90,231
Other	252		—		252		—		—		252
Total derivatives, not subject to a master netting arrangement or similar arrangement	629,942		—		629,942		—		—		629,942
Total derivatives	755,461		—		755,461		70,322		47,856		637,283
Repurchase agreements(1)	418,090		—		418,090		—		—		418,090
Total Liabilities	$	1,173,551	$	—	$	1,173,551	$	70,322	$	47,856	$	1,055,373
(1) Borrowings under repurchase agreements are for a term less than 90 days.

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MORTGAGE LOANS

3 Months Ended

Mar. 31, 2019

Mortgage Loans [Abstract]

MORTGAGE LOANS

MORTGAGE LOANS

Mortgage Loans

The Company invests a portion of its investment portfolio in commercial mortgage loans. As of March 31, 2019, the Company’s mortgage loan holdings were approximately $7.7 billion. The Company has specialized in making loans on credit-oriented commercial properties, credit-anchored strip shopping centers, senior living facilities, and apartments. The Company’s underwriting procedures relative to its commercial loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company’s mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition.

The Company’s commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts and prepayment fees are reported in net investment income.

Certain of the mortgage loans have call options that occur within the next 10 years. However, if interest rates were to significantly increase, the Company may be unable to exercise the call options on its existing mortgage loans commensurate with the significantly increased market rates. As of March 31, 2019, assuming the loans are called at their next call dates, approximately $77.7 million of principal would become due for the remainder of 2019, $837.4 million in 2020 through 2024 and $60.6 million in 2025 through 2029.

The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of March 31, 2019 and December 31, 2018, approximately $727.8 million and $700.6 million, respectively, of the Company’s total mortgage loans principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three months ended March 31, 2019 and 2018, the Company recognized $2.2 million and $7.3 million, respectively, of participating mortgage loan income.

As of March 31, 2019, the Company’s invested assets consisted of an immaterial amount of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the three months ended March 31, 2019, two mortgage loan transactions occurred that were accounted for as troubled debt restructurings as a result of granting concessions to a borrower. These concessions were each the result of an agreement between the creditor and the debtor and resulted in the Company accepting an amount less than the outstanding principal balance of $2.7 million in satisfaction of the borrower’s obligation. During the three months ended March 31, 2019, the Company did not recognize any mortgage loans that were foreclosed and were converted to real estate properties. The Company did not identify any loans whose principal was permanently impaired during the three months ended March 31, 2019.

As of March 31, 2019 and December 31, 2018, the Company had an allowance for mortgage loan credit losses of $1.9 million and $1.3 million, respectively. Due to the Company’s loss experience and nature of the loan portfolio, the Company believes that a collectively evaluated allowance would be inappropriate. The Company believes an allowance calculated through an analysis of specific loans that are believed to have a higher risk of credit impairment provides a more accurate presentation of expected losses in the portfolio and is consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Since the Company uses the specific identification method for calculating the allowance, it is necessary to review the economic situation of each borrower to determine those that have higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assesses the risk of each loan. When issues are identified, the severity of the issues are assessed and reviewed for possible credit impairment. If a loss is probable, an expected loss calculation is performed and an allowance is established for that loan based on the expected loss. The expected loss is calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan may be subsequently charged off at such point that the Company no longer expects to receive cash payments, the present value of future expected payments of the renegotiated loan is less than the current principal balance, or at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan.

A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property.

	As of March 31, 2019			As of December 31, 2018
	(Dollars In Thousands)
Beginning balance	$	1,296		$	—
Charge offs	(350		)	—
Recoveries	—			(209		)
Provision	1,000			1,505
Ending balance	$	1,946		$	1,296

It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company’s general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status. An analysis of the delinquent loans is shown in the following chart.

					Greater
	30-59 Days		60-89 Days		than 90 Days		Total
As of March 31, 2019	Delinquent		Delinquent		Delinquent		Delinquent
	(Dollars In Thousands)
Commercial mortgage loans	$	637	$	—	$	83	$	720
Number of delinquent commercial mortgage loans	2		—		1		3
As of December 31, 2018
Commercial mortgage loans	$	1,044	$	—	$	1,234	$	2,278
Number of delinquent commercial mortgage loans	4		—		1		5

     The Company’s commercial mortgage loan portfolio consists of mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on impaired loans to 90 days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
	(Dollars In Thousands)
As of March 31, 2019
Commercial mortgage loans:
With no related allowance recorded	$	83	$	83	$	—	$	83	$	—	$	—
With an allowance recorded	$	8,331	$	8,196	$	1,946	$	4,165	$	128	$	156
As of December 31, 2018
Commercial mortgage loans:
With no related allowance recorded	$	—	$	—	$	—	$	—	$	—	$	—
With an allowance recorded	$	5,684	$	5,309	$	1,296	$	1,895	$	267	$	293

     Mortgage loans that were modified in a troubled debt restructuring as of March 31, 2019 and December 31, 2018 were as follows:

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(Dollars In Thousands)
As of March 31, 2019
Troubled debt restructuring:
Commercial mortgage loans	—	$	—	$	—
As of December 31, 2018
Troubled debt restructuring:
Commercial mortgage loans	1	$	2,688	$	1,742

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GOODWILL

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

The balance of goodwill for the Company as of March 31, 2019 was $825.5 million. There has been no change to goodwill during the three months ended March 31, 2019.

Accounting for goodwill requires an estimate of the future profitability of the associated lines of business to assess the recoverability of the capitalized acquisition goodwill. The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If it is determined that it is more likely than not that impairment exists, the Company compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions.

The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. During the fourth quarter of 2018, the Company performed its annual qualitative evaluation of goodwill based on the circumstances that existed as of October 1, 2018 and determined that there was no indication that its segment goodwill was more likely than not impaired and no adjustment to impair goodwill was necessary. The Company has assessed whether events have occurred subsequent to October 1, 2018 that would impact the Company’s conclusion and no such events were identified. After consideration of applicable factors and circumstances noted as part of the annual assessment, the Company determined that no triggering events had occurred and it was more likely than not that the increase in the fair value of the reporting unit would exceed the increase in the carrying value of the reporting units.

During the three months ended March 31, 2019, the Company did not identify any events or circumstances which would indicate that the fair value of its operating segments would have declined below their book value, either individually or in the aggregate.

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DEBT AND OTHER OBLIGATIONS

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

DEBT AND OTHER OBLIGATIONS

DEBT AND OTHER OBLIGATIONS

Debt and Subordinated Debt

Debt and subordinated debt are summarized as follows:

	As of
	March 31, 2019				December 31, 2018
	Outstanding Principal		Carrying Amounts		Outstanding Principal		Carrying Amounts
	(Dollars In Thousands)
Debt (year of issue):
Credit Facility	$	—	$	—	$	—	$	—
Capital lease obligation	2,794		2,794		1,319		1,319
7.375% Senior Notes (2009), due 2019	400,000		411,562		400,000		416,469
8.45% Senior Notes (2009), due 2039	180,719		273,713		190,044		288,547
4.30% Senior Notes (2018), due 2028	400,000		395,603		400,000		395,492
	$	983,513	$	1,083,672	$	991,363	$	1,101,827
Subordinated debt (year of issue):
5.35% Subordinated Debentures (2017), due 2052	$	500,000	$	495,460	$	500,000	$	495,426
3.55% Subordinated Funding Obligations (2018), due 2038	55,000		55,000		55,000		55,000
3.55% Subordinated Funding Obligations (2018), due 2038	55,000		55,000		55,000		55,000
	$	610,000	$	605,460	$	610,000	$	605,426

During the three months ended March 31, 2019, the Company repurchased and subsequently extinguished $14.1 million (par value - $9.3 million) of the Company’s 8.45% Senior Notes due 2039. These repurchases resulted in a $1.1 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated condensed statements of income.

During 2018, PLICO issued $110.0 million of Subordinated Funding Obligations at a rate of 3.55% due 2038. These obligations are non-recourse to the Company.

During 2018, the Company issued $400.0 million of its Senior Notes at a rate of 4.30%, due 2028. These notes were issued net of a discount of $1.0 million. These notes are carried on the Company’s balance sheet net of the discount and the associated deferred issuance expenses of $3.7 million. The Company used the net proceeds from the offering for general corporate purposes, including the repayment of amounts outstanding under our Credit Facility.

Under a revolving line of credit arrangement that was in effect until May 3, 2018 (the “2015 Credit Facility”), the Company had the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company had the right in certain circumstances to request that the commitment under the 2015 Credit Facility be increased up to a maximum principal amount of $1.25 billion. Balances outstanding under the 2015 Credit Facility accrued interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of the Company’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s Prime rate, (y) 0.50% above the Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of the Company’s Senior Debt. The 2015 Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company’s Senior Debt and that is calculated on the aggregate amount of commitments under the 2015 Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The 2015 Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, under the 2015 Credit Facility. The maturity date of the 2015 Credit Facility was February 2, 2020.

On May 3, 2018, the Company amended the 2015 Credit Facility (as amended, the "Credit Facility"). Under the Credit Facility, the Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.5 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of the Company’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s Prime rate, (y) 0.50% above the Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of the Company’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, under the Credit Facility. The maturity date of the Credit Facility is May 3, 2023. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of March 31, 2019. There was no outstanding balance as of March 31, 2019.

Non-RecourseFunding Obligations

Non-recourse funding obligations outstanding as of March 31, 2019, on a consolidated basis, are shown in the following table:

Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,843,000	$	1,843,000	2039	4.75	%
Golden Gate II Captive Insurance Company	20,600		17,717		2052	5.60	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	685,000		743,981		2037	5.12	%
MONY Life Insurance Company(3)	1,091		2,323		2024	6.19	%
Total	$	2,549,691	$	2,607,021
(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO.
(3)  Fixed rate obligations

Non-recourse funding obligations outstanding as of December 31, 2018, on a consolidated basis, are shown in the following table:

Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,883,000	$	1,883,000	2039	4.75	%
Golden Gate II Captive Insurance Company	20,600		17,703		2052	4.99	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	670,000		729,454		2037	5.12	%
MONY Life Insurance Company(3)	1,091		2,340		2024	6.19	%
Total	$	2,574,691	$	2,632,497
(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO.
(3)  Fixed rate obligations

Secured Financing Transactions

Repurchase Program Borrowings

While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of March 31, 2019, the fair value of securities pledged under the repurchase program was $92.9 million, and the repurchase obligation of $89.3 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 254 basis points). During the three months ended March 31, 2019, the maximum balance outstanding at any one point in time related to these programs was $473.3 million. The average daily balance was $203.1 million (at an average borrowing rate of 249 basis points) during the three months ended March 31, 2019. As of December 31, 2018, the fair value of securities pledged under the repurchase program was $451.9 million, and the repurchase obligation of $418.1 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 245 basis points). During 2018, the maximum balance outstanding at any one point in time related to these programs was $885.0 million. The average daily balance was $511.4 million (at an average borrowing rate of 184 basis points) during the year ended December 31, 2018.

Securities Lending

The Company participates in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. The Company requires initial collateral of 102% of the fair value of the loaned securities to be separately maintained. The loaned securities’ fair value is monitored on a daily basis. As of March 31, 2019, securities with a fair value of $89.0 million were loaned under this program. As collateral for the loaned securities, the Company receives short-term investments, which are recorded in short-term investments with a corresponding liability recorded in secured financing liabilities to account for its obligation to return the collateral. As of March 31, 2019, the fair value of the collateral related to this program was $94.7 million and the Company has an obligation to return $94.7 million of collateral to the securities borrowers.

The following table provides the amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of March 31, 2019 and December 31, 2018:

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of March 31, 2019
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	83,512	$	9,360	$	—	$	—	$	92,872
Total repurchase agreements and repurchase-to-maturity transactions	83,512		9,360		—		—		92,872
Securities lending transactions
Corporate securities	87,234		—		—		—		87,234
Other government related securities	1,755		—		—		—		1,755
Total securities lending transactions	88,989		—		—		—		88,989
Total securities	$	172,501	$	9,360	$	—	$	—	$	181,861

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of December 31, 2018
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	433,182	$	18,713	$	—	$	—	$	451,895
Mortgage loans	—		—		—		—		—
Total securities	$	433,182	$	18,713	$	—	$	—	$	451,895
Securities lending transactions
Fixed maturity securities	$	71,285	$	—	$	—	$	—	$	71,285
Equity securities	891		—		—		—		891
Total securities lending transactions	72,176		—		—		—		72,176
Total securities	$	505,358	$	18,713	$	—	$	—	$	524,071

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The Company has entered into indemnity agreements with each of its current directors other than those that are employees of Dai-ichi Life that provide, among other things and subject to certain limitations, a contractual right to indemnification to the fullest extent permissible under the law. The Company has agreements with certain of its officers providing up to $10 million in indemnification. These obligations are in addition to the customary obligation to indemnify officers and directors contained in the Company’s governance documents.

The Company leases administrative and marketing office space in approximately 17 cities (excluding the home office building), as well as various office equipment. Most leases have terms ranging from one year to ten years. Leases with an initial term of 12 months or less are not recorded on the consolidated condensed balance sheet. The Company accounts for lease components separately from non-lease components (e.g., common area maintenance). Certain of the Company’s lease agreements include options to renew at its discretion. Management has concluded, the Company is not reasonably certain to elect any of these renewal options. The Company will use the interest rates received on its funding agreement backed notes as the collateralized discount rate when calculating the present value of remaining lease payments when the rate implicit in the lease is unavailable. Additionally, the Company previously leased a building contiguous to its home office. The lease was renewed in December 2013 and was extended to December 2018. At the end of the lease term in December 2018, the Company purchased the building for approximately $75 million. The building is recorded in property and equipment on the consolidated condensed balance sheet.

Under the insurance guaranty fund laws in most states, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. From time to time, companies may be asked to contribute amounts beyond prescribed limits. It is possible that the Company could be assessed with respect to product lines not offered by the Company. In addition, legislation may be introduced in various states with respect to guaranty fund assessment laws related to insurance products, including long term care insurance and other specialty products, that increases the cost of future assessments or alters future premium tax offsets received in connection with guaranty fund assessments. The Company cannot predict the amount, nature or timing of any future assessments or legislation, any of which could have a material and adverse impact on the Company’s financial condition or results of operations.

A number of civil jury verdicts have been returned against insurers, broker-dealers, and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive and non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. The financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters.

The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures and estimates of reasonably possible losses or range of loss based on such reviews.

Certain of the Company’s insurance subsidiaries, as well as certain other insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including uncertainty as to the legal theory or theories that may give rise to liability, the early stages of the audits being conducted, and uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with certain co-insured policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits reasonably estimable.

Certain of the Company’s subsidiaries are under a targeted multi-state examination with respect to their claims paying practices and their use of the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”) to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed, and substantial legal authority exists to support the position that the prevailing industry practice was lawful. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements. The Company believes that insurance regulators could demand from the Company administrative and/or examination fees relating to the targeted multi-state examination. Based on publicly reported payments by other life insurers, the Company does not believe such fees, if assessed, would have a material effect on its financial statements.

Advance Trust & Life Escrow Services, LTA, as Securities Intermediary of Life Partners Position Holder Trust v. Protective Life Insurance Company, Case No. 2:18-CV-01290, is a putative class action that was filed on August 13, 2018 in the United States District Court for the Northern District of Alabama. Plaintiff alleges that PLICO required policyholders to pay unlawful and excessive cost of insurance charges. Plaintiff seeks to represent all owners of universal life and variable universal life policies issued or administered by PLICO or its predecessors that provide that cost of insurance rates are to be determined based on expectations of future mortality experience. The plaintiff seeks class certification, compensatory damages, pre-judgment and post-judgment interest, costs, and other unspecified relief. The Company is vigorously defending this matter and cannot predict the outcome of or reasonably estimate the possible loss or range of loss that might result from this litigation.

Scottish Re (U.S.), Inc. ("SRUS") was placed in rehabilitation on March 6, 2019 by the State of Delaware. Under the related order, the Insurance Commissioner of the State of Delaware has been appointed the receiver of SRUS and provided with authority to conduct and continue the business of SRUS in the interest of its cedents, creditors, and stockholder. The order was accompanied by an injunction requiring the continued payment of reinsurance premiums to SRUS and temporarily prohibiting cedents, including the Company, from offsetting premiums payable against receivables from SRUS.

As of March 31, 2019, the Company had outstanding claims receivable from SRUS of $13.4 million, and other exposures associated with reinsurance receivables of approximately $106.8 million and statutory reserve credit of approximately $127.2 million. The Company continues to monitor both the financial health of SRUS and the actions of the receiver through discussions with legal counsel and review of publicly available information. However, management does not have access to current information about the assets or capital position of SRUS. Additionally, it is unclear how the rehabilitation process will proceed or whether or to what extent the ultimate outcome of the rehabilitation process will be unfavorable to the Company.

The Company considered whether the accrual of a loss contingency under FASB ASC Topic 450, Contingencies, was appropriate with respect to amounts receivable from SRUS for ceded claims and reserves as of March 31, 2019. Due to the lack of sufficient information to support an analysis of SRUS's financial condition as of March 31, 2019 and uncertainty regarding whether and to what extent the ultimate outcome of the rehabilitation process will result in an outcome unfavorable to the Company, management concluded that any possible impairment of its reinsurance receivables balance could not be reasonably estimated.

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EMPLOYEE BENEFIT PLANS

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Components of the net periodic benefit cost for the three months ended March 31, 2019 and 2018, are as follows:

	For The Three Months Ended March 31,
	2019					2018
	Qualified Pension Plan			Nonqualified Excess Pension Plan		Qualified Pension Plan			Nonqualified Excess Pension Plan
	(Dollars In Thousands)
Service cost — benefits earned during the period	$	3,114		$	285	$	3,441		$	387
Interest cost on projected benefit obligation	2,778			371		2,397			359
Expected return on plan assets	(4,463		)	—		(4,026		)	—
Amortization of prior service cost	—					—			—
Amortization of actuarial loss	—			74		—			265
Total net periodic benefit costs	$	1,429		$	730	$	1,812		$	1,011

During the three months ended March 31, 2019, the Company did not make a contribution to its defined benefit pension plan. The Company will make contributions in future periods as necessary to at least satisfy minimum funding requirements, to maintain an adjusted funding target attainment percentage (“AFTAP”) of at least 80% and to avoid certain Pension Benefit Guaranty Corporation (“PBGC”) reporting triggers. The Company may also make additional discretionary contributions in excess of the contribution amounts established by the current funding policy.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of March 31, 2019 and December 31, 2018.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss  Derivatives			Minimum Pension Liability Adjustment			Total Accumulated Other Comprehensive  Income (Loss)
	(Dollars In Thousands, Net of Tax)
Balance, December 31, 2017	$	25,874		$	747		$	(13,925	)	$	12,696
Other comprehensive income (loss) before reclassifications	(1,420,499		)	(1,884		)	(3,546		)	(1,425,929		)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(20,751		)	—			—			(20,751		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	15,651			1,130			1,989			18,770
Cumulative effect adjustments	(10,552		)	—			—			(10,552		)
Balance, December 31, 2018	$	(1,410,277	)	$	(7	)	$	(15,482	)	$	(1,425,766	)
Other comprehensive income (loss) before reclassifications	1,136,331			(1,966		)	—			1,134,365
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	8,792			—			—			8,792
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(1,560		)	220			—			(1,340		)
Cumulative effect adjustments	—			—			—			—
Balance, March 31, 2019	$	(266,714	)	$	(1,753	)	$	(15,482	)	$	(283,949	)
(1)  See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details.
(2)  As of December 31, 2018 and March 31, 2019, net unrealized losses reported in AOCI were offset by $613.4 million and $199.1 million, respectively, due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

The following tables summarize the reclassifications amounts out of AOCI for the three months ended March 31, 2019 and 2018.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

	Affected Line Item in the Condensed Consolidated
Gains/(losses) in net income:	Statements of Income	For The Three Months Ended March 31,
		2019			2018
		(Dollars In Thousands)
Derivative instruments	Benefits and settlement expenses, net of reinsurance ceded(1)	$	(278	)	$	(113	)
	Tax (expense) benefit	58			24
		$	(220	)	$	(89	)
Unrealized gains and losses on available-for-sale securities	Realized investment gains (losses): All other investments	$	5,117		$	2,783
	Net impairment losses recognized in earnings	(3,142		)	(3,645		)
	Tax (expense) benefit	(415		)	181
		$	1,560		$	(681	)
(1) See Note 7, Derivative Financial Instruments for additional information.

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INCOME TAXES

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company used its respective estimates for its annual 2019 and 2018 incomes in computing its effective income tax rates for the three months ended March 31, 2019 and 2018. The estimates of the annual 2019 and 2018 income excluded unrealized gains and losses on equity securities due to an inability to forecast future gains and losses. The effective tax rates for the three months ended March 31, 2019 and 2018, were 20.9% and 19.3% respectively.

There have been no material changes to the balance of unrecognized tax benefits, where the changes impact earnings, during the quarter ending March 31, 2019. The Company believes that in the next twelve months, none of the unrecognized tax benefits will be reduced.

In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2014. Due to IRS adjustments to the Company's pre-2014 taxable income, the Company has amended certain of its 2003 through 2013 state income tax returns. Such amendments will cause such years to remain open, pending the states' acceptances of the returns.

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OPERATING SEGMENTS

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

OPERATING SEGMENTS

OPERATINGSEGMENTS

The Company has several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. The Company periodically evaluates its operating segments and makes adjustments to its segment reporting as needed. A brief description of each segment follows.

• The Life Marketing segment markets fixed universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”), bank-owned life insurance (“BOLI”), and level premium term insurance (“traditional”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent marketing organizations, and affinity groups.

• The Acquisitions segment focuses on acquiring, converting, and servicing policies and contracts acquired from other companies. The segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. The level of the segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed. Therefore earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made.

• The Annuities segment markets fixed and VA products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers.

• The Stable Value Products segment sells fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. This segment also issues funding agreements to the FHLB, and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. The Company also has an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors.

• The Asset Protection segment markets extended service contracts, guaranteed asset protection (“GAP”) products, credit life and disability insurance, and other specialized ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft, and powersports. GAP products are designed to cover the difference between the scheduled loan pay-off amount and an asset’s actual cash value in the case of a total loss. Each type of specialized ancillary product protects against damage or other loss to a particular aspect of the underlying asset.

• The Corporate and Other segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead and expenses not attributable to the segments above (including interest on corporate debt). This segment includes earnings from several non-strategic or runoff lines of business, various financing and investment related transactions, and the operations of several small subsidiaries.

The Company's management and Board of Directors analyzes and assesses the operating performance of each segment using "pre-tax adjusted operating income (loss)" and "after-tax adjusted operating income (loss)". Consistent with GAAP accounting guidance for segment reporting, pre-tax adjusted operating income (loss) is the Company's measure of segment performance. Pre-tax adjusted operating income (loss) is calculated by adjusting "income (loss) before income tax," by excluding the following items:

• realized gains and losses on investments and derivatives,

• changes in the GLWB embedded derivatives exclusive of the portion attributable to the economic cost of the GLWB,

• actual GLWB incurred claims, and

• the amortization of deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”), and certain policy liabilities that is impacted by the exclusion of these items.

The items excluded from adjusted operating income (loss) are important to understanding the overall results of operations. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) are not substitutes for income before income taxes or net income (loss), respectively. These measures may not be comparable to similarly titled measures reported by other companies. The Company believes that pre-tax and after-tax adjusted operating income (loss) enhances management’s and the Board of Directors’ understanding of the ongoing operations, the underlying profitability of each segment, and helps facilitate the allocation of resources.

After-tax adjusted operating income (loss) is derived from pre-tax adjusted operating income (loss) with the inclusion of income tax expense or benefits associated with pre-tax adjusted operating income. Income tax expense or benefits is allocated to the items excluded from pre-tax adjusted operating income (loss) at the statutory federal income tax rate for the associated period. Income tax expense or benefits allocated to after-tax adjusted operating income (loss) can vary period to period based on changes in the Company’s effective income tax rate.

In determining the components of the pre-tax adjusted operating income (loss) for each segment, premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC and VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized investment gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on statutory policy liabilities net of associated statutory policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable.

There were no significant intersegment transactions during the three months ended March 31, 2019 and 2018.

The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Life Marketing	$	457,340		$	434,916
Acquisitions	609,942			379,094
Annuities	139,217			150,713
Stable Value Products	59,579			53,868
Asset Protection	76,198			76,375
Corporate and Other	71,754			70,866
Total revenues	$	1,414,030		$	1,165,832
Pre-tax Adjusted Operating Income (Loss)
Life Marketing	$	1,234		$	(17,849	)
Acquisitions	74,912			55,520
Annuities	54,216			40,531
Stable Value Products	22,239			29,080
Asset Protection	9,743			6,218
Corporate and Other	(19,674		)	(20,679		)
Pre-tax adjusted operating income	142,670			92,821
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income before income tax	174,915			91,798
Income tax expense	(36,631		)	(17,686		)
Net income	$	138,284		$	74,112
Pre-tax adjusted operating income	$	142,670		$	92,821
Adjusted operating income tax (expense) benefit	(29,859		)	(18,044		)
After-tax adjusted operating income	112,811			74,777
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income tax benefit (expense) on adjustments	(6,772		)	358
Net income	$	138,284		$	74,112
Realized investment (losses) gains:
Derivative financial instruments	$	(119,671	)	$	78,059
All other investments	129,590			(87,599		)
Net impairment losses recognized in earnings	(3,142		)	(3,645		)
Less: related amortization(1)	(4,361		)	9,156
Less: VA GLWB economic cost	(21,107		)	(21,318		)
Realized (losses) gains on investments and derivatives	$	32,245		$	(1,023	)
(1)  Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses).

	Operating Segment Assets As of March 31, 2019
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	15,038,044	$	31,805,017	$	20,690,159	$	5,401,470
DAC and VOBA	1,496,282		431,788		885,926		5,249
Other intangibles	258,010		32,776		153,452		7,222
Goodwill	215,254		23,862		343,247		113,924
Total assets	$	17,007,590	$	32,293,443	$	22,072,784	$	5,527,865

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	1,025,637	$	14,088,375	$	88,048,702
DAC and VOBA	167,441		—		2,986,686
Other intangibles	120,046		30,097		601,603
Goodwill	129,224		—		825,511
Total assets	$	1,442,348	$	14,118,472	$	92,462,502

	Operating Segment Assets As of December 31, 2018
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	14,575,702	$	31,859,520	$	20,199,597	$	5,107,334
DAC and VOBA	1,499,386		458,977		889,697		6,121
Other intangibles	262,758		31,975		156,785		7,389
Goodwill	215,254		23,862		343,247		113,924
Total assets	$	16,553,100	$	32,374,334	$	21,589,326	$	5,234,768

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	1,019,297	$	12,715,208	$	85,476,658
DAC and VOBA	168,973		—		3,023,154
Other intangibles	122,590		31,934		613,431
Goodwill	129,224		—		825,511
Total assets	$	1,440,084	$	12,747,142	$	89,938,754

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Company has evaluated the effects of events subsequent to March 31, 2019, and through the date we filed our consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated condensed financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc., a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company (the “Merger”). Prior to February 1, 2015, the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors.

Reclassifications

Certain reclassifications have been made in previously reported financial statements and accompanying notes to make prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity.

Entities Included

Entities Included

The consolidated condensed financial statements in this report include the accounts of Protective Life Corporation and subsidiaries and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated.

Accounting Pronouncements Recently Adopted and Not Yet Adopted

Accounting Pronouncements Recently Adopted

Accounting Standards Update (“ASU” or “Update”) No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change relates to the accounting model used by lessees. The Update requires all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The lease asset and liability are measured at the present value of the minimum lease payments less any upfront payments or fees. The amendments in the Update became effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company recorded a cumulative effect adjustment as of the date of adoption, January 1, 2019, establishing a right of use asset and lease liability of $21.5 million on its consolidated condensed balance sheet reflected in the property and equipment and other liabilities line items, respectively.

ASU No. 2017-08 - Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this Update require that premiums on callable debt securities be amortized to the first call date. This is a change from previous guidance, under which premiums are amortized to the maturity date of the security. The amendments became effective for annual and interim periods beginning after December 15, 2018. The Company recorded a cumulative effect adjustment as of the adoption date, January 1, 2019, resulting in a $50.8 million reduction to retained earnings, net of income tax.

ASU No. 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this Update are designed to permit hedge accounting to be applied to a broader range of hedging strategies as well as to more closely align hedge accounting and risk management objectives. Specific provisions include requiring changes in the fair value of a hedging instrument be recorded in the same income statement line as the hedged item when it affects earnings. In addition, after a hedge has initially qualified as an effective hedge the Update permits the use of a qualitative hedge effectiveness test in subsequent periods. The amendments in this Update became effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. At adoption, January 1, 2019, this standard did not have an impact on the Company’s operations or financial results.

Accounting Pronouncements Not Yet Adopted

ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments.

The amendments in this Update introduce a new current expected credit loss (“CECL”) model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance against earnings its estimate of the contractual cash flows not expected to be collected on day one of the asset’s acquisition. The allowance may be reversed through earnings if a security recovers in value. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred and recognizes a security’s subsequent recovery in value in other comprehensive income. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. Similar to the CECL model, credit loss impairments will be recorded in an allowance against earnings that may be reversed for subsequent recoveries in value. The amendments in this Update, along with related amendments in ASU No. 2018-19 - Codification Improvements to Topic 326, Financial Instruments-Credit Losses, are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results.

ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally this Update requires new disclosures including liability rollforwards and information about significant inputs, judgements, assumptions, and methods used in the measurement. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently reviewing its policies, processes, and applicable systems to determine the impact this standard will have on its operations and financial results.

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SIGNIFICANT TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Summary of Consideration Paid and Fair Value of Assets Acquired and Liabilities Assumed

The following table details the purchase consideration and preliminary allocation of assets acquired and liabilities assumed from the Life Business reinsurance transaction as of the transaction date. These estimates remain preliminary and are subject to adjustment. While they are not expected to be materially different than those shown, any material adjustments to the estimates will be reflected, retroactively, as of the date of the acquisition.

	Fair Value as of May 1, 2018
	(Dollars In Thousands)
ASSETS
Fixed maturities	$	12,588,512
Mortgage loans	435,405
Policy loans	131,489
Total investments	13,155,406
Cash	38,456
Accrued investment income	152,030
Reinsurance receivables	272
Value of business acquired	338,303
Other assets	916
Total assets	13,685,383
LIABILITIES
Future policy benefits and claims	$	11,748,942
Unearned premiums	—
Total policy liabilities and accruals	11,748,942
Annuity account balances	1,823,444
Other policyholders’ funds	41,936
Other liabilities	71,061
Total liabilities	13,685,383
NET ASSETS ACQUIRED	$	—

Pro Forma Information

The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Life Business were completed as of January 1, 2017. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated:

	Unaudited
	For The Three Months Ended March 31, 2018
	(Dollars In Thousands)
Revenue	$	1,416,320
Net income	$	112,869

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MONY CLOSED BLOCK OF BUSINESS (Tables)

3 Months Ended

Mar. 31, 2019

Closed Block Disclosure [Abstract]

Summary of Financial Information for the Closed Block

Summarized financial information for the Closed Block as of March 31, 2019, and December 31, 2018, is as follows:

	As of
	March 31, 2019		December 31, 2018
	(Dollars In Thousands)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,643,484	$	5,679,732
Policyholder dividend obligation	11,803		—
Other liabilities	33,254		22,505
Total closed block liabilities	5,688,541		5,702,237
Closed block assets
Fixed maturities, available-for-sale, at fair value	$	4,404,945	$	4,257,437
Mortgage loans on real estate	75,062		75,838
Policy loans	666,270		672,213
Cash	115,204		116,225
Other assets	107,204		136,388
Total closed block assets	5,368,685		5,258,101
Excess of reported closed block liabilities over closed block assets	319,856		444,136
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation: $(118,670) and $(141,128); and net of income tax: $24,921 and $61,676	—		(120,528		)
Future earnings to be recognized from closed block assets and closed block liabilities	$	319,856	$	323,608

Schedule of Reconciliation of the Policyholder Dividend Obligation

Reconciliation of the policyholder dividend obligation is as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Policyholder dividend obligation, beginning of period	$	—		$	160,712
Applicable to net revenue (losses)	(10,655		)	(11,712		)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation	22,458			(149,000		)
Policyholder dividend obligation, end of period	$	11,803		$	—

Schedule of Closed Block Revenues and Expenses

Closed Block revenues and expenses were as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Premiums and other income	$	37,444		$	39,612
Net investment income	51,128			50,543
Net investment gains	(454		)	(237		)
Total revenues	88,118			89,918
Benefits and other deductions
Benefits and settlement expenses	78,666			79,952
Other operating expenses	359			(319		)
Total benefits and other deductions	79,025			79,633
Net revenues before income taxes	9,093			10,285
Income tax expense	1,910			2,160
Net revenues	$	7,183		$	8,125

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INVESTMENT OPERATIONS (Tables)

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Realized Gain (Loss) on Investments

Net realized gains (losses) are summarized as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Fixed maturities	$	5,117		$	2,783
Equity gains and losses	30,717			(8,786		)
Modco trading portfolio	94,902			(84,709		)
Other investments	(1,146		)	3,113
Realized gains (losses) - all other investments	129,590			(87,599		)
Realized gains (losses) - derivatives(1)	(119,671		)	78,059
Realized investment gains (losses)	$	9,919		$	(9,540	)
Net impairments losses recognized in earnings	$	(3,142	)	$	(3,645	)
(1) See Note 7, Derivative Financial Instruments

Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities and short-term investments) are as follows:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Gross realized gains	$	7,870		$	8,049
Gross realized losses:
Impairment losses	$	(3,142	)	$	(3,645	)
Other realized losses	$	(2,753	)	$	(5,267	)

Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	1,485,009	$	(31,302	)	$	804,364	$	(30,894	)	$	2,289,373	$	(62,196	)
Commercial mortgage-backed securities	422,438		(7,442		)	1,429,384		(50,659		)	1,851,822		(58,101		)
Other asset-backed securities	687,271		(30,963		)	148,871		(4,435		)	836,142		(35,398		)
U.S. government-related securities	130,290		(4,668		)	1,085,654		(41,054		)	1,215,944		(45,722		)
Other government-related securities	226,201		(15,267		)	131,569		(18,583		)	357,770		(33,850		)
States, municipals, and political subdivisions	1,004,262		(27,180		)	1,129,152		(91,722		)	2,133,414		(118,902		)
Corporate securities	18,326,331		(970,553		)	12,859,732		(1,414,499		)	31,186,063		(2,385,052		)
Redeemable preferred stocks	41,147		(4,467		)	41,655		(7,093		)	82,802		(11,560		)
	$	22,322,949	$	(1,091,842	)	$	17,630,381	$	(1,658,939	)	$	39,953,330	$	(2,750,781	)

The chart below summarizes the fair value (proceeds) and the gains (losses) realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position.

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Securities in an unrealized gain position:
Fair value (proceeds)	$	648,891		$	142,133
Gains realized	$	7,870		$	8,049
Securities in an unrealized loss position(1):
Fair value (proceeds)	$	178,004		$	56,984
Losses realized	$	(2,753	)	$	(5,267	)
(1) The Company made the decision to exit these holdings in conjunction with its overall asset/liability management process.

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2019:

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	158,901	$	(1,772	)	$	1,242,286	$	(27,634	)	$	1,401,187	$	(29,406	)
Commercial mortgage-backed securities	52,747		(1,235		)	1,478,365		(26,608		)	1,531,112		(27,843		)
Other asset-backed securities	531,548		(11,905		)	192,201		(3,718		)	723,749		(15,623		)
U.S. government-related securities	43,977		(640		)	1,045,717		(29,772		)	1,089,694		(30,412		)
Other government-related securities	51,767		(1,279		)	198,112		(10,604		)	249,879		(11,883		)
States, municipals, and political subdivisions	60,555		(369		)	911,555		(24,887		)	972,110		(25,256		)
Corporate securities	3,340,636		(136,453		)	17,623,264		(1,077,532		)	20,963,900		(1,213,985		)
Redeemable preferred stocks	10,154		(3		)	68,291		(4,121		)	78,445		(4,124		)
	$	4,250,285	$	(153,656	)	$	22,759,791	$	(1,204,876	)	$	27,010,076	$	(1,358,532	)

Realized Gain (Loss) on Equity Securities

The chart below summarizes the realized gains (losses) on equity securities sold during the period and equity securities still held at the reporting date.

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Net gains (losses) recognized during the period on equity securities	$	30,717	$	(8,786	)
Less: net gains (losses) recognized on equity securities sold during the period	$	60	$	(1,702	)
Gains (losses) recognized during the period on equity securities still held	$	30,657	$	(7,084	)

Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale

The amortized cost and fair value of the Company’s investments classified as available-for-sale are as follows:

As of March 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	3,880,305	$	57,389	$	(29,406	)	$	3,908,288	$	—
Commercial mortgage-backed securities	2,363,988		17,199		(27,843		)	2,353,344		—
Other asset-backed securities	1,359,813		18,421		(15,623		)	1,362,611		—
U.S. government-related securities	1,439,136		2,382		(30,412		)	1,411,106		—
Other government-related securities	523,701		12,343		(11,883		)	524,161		—
States, municipals, and political subdivisions	3,632,880		84,040		(25,256		)	3,691,664		1,021
Corporate securities	38,586,159		576,720		(1,213,985		)	37,948,894		(18,719		)
Redeemable preferred stocks	87,579		368		(4,124		)	83,823		—
	51,873,561		768,862		(1,358,532		)	51,283,891		(17,698		)
Short-term investments	783,011		—		—			783,011		—
	$	52,656,572	$	768,862	$	(1,358,532	)	$	52,066,902	$	(17,698	)
As of December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	3,650,539	$	23,247	$	(62,196	)	$	3,611,590	$	(18	)
Commercial mortgage-backed securities	2,349,274		3,911		(58,101		)	2,295,084		—
Other asset-backed securities	1,410,059		17,232		(35,398		)	1,391,893		—
U.S. government-related securities	1,683,432		1,795		(45,722		)	1,639,505		—
Other government-related securities	545,522		4,292		(33,850		)	515,964		—
States, municipals, and political subdivisions	3,682,037		25,706		(118,902		)	3,588,841		876
Corporate securities	38,634,888		112,992		(2,385,052		)	36,362,828		(29,685		)
Redeemable preferred stocks	94,362		—		(11,560		)	82,802		—
	52,050,113		189,175		(2,750,781		)	49,488,507		(28,827		)
Short-term investments	776,357		—		—			776,357		—
	$	52,826,470	$	189,175	$	(2,750,781	)	$	50,264,864	$	(28,827	)
(1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above.

Schedule of Fair Value of Trading Securities

The fair value of the investments held pursuant to these Modco arrangements are as follows:    

	As of March 31, 2019		As of December 31, 2018
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	213,259	$	241,836
Commercial mortgage-backed securities	209,482		188,925
Other asset-backed securities	149,541		159,907
U.S. government-related securities	59,627		59,794
Other government-related securities	23,640		44,207
States, municipals, and political subdivisions	292,796		286,413
Corporate securities	1,533,256		1,423,833
Redeemable preferred stocks	11,860		11,277
	2,493,461		2,416,192
Equity securities	9,207		9,892
Short-term investments	34,631		30,926
	$	2,537,299	$	2,457,010

Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity

The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of March 31, 2019, by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars In Thousands)
Due in one year or less	$	1,259,571	$	1,257,644	$	—	$	—
Due after one year through five years	8,954,924		8,938,604		—		—
Due after five years through ten years	8,979,403		9,034,109		—		—
Due after ten years	32,679,663		32,053,534		2,607,356		2,594,441
	$	51,873,561	$	51,283,891	$	2,607,356	$	2,594,441

Gain (Loss) on Investments

The chart below summarizes the Company’s other-than-temporary impairments of investments. All of the impairments were related to fixed maturities.

	For The Three Months Ended March 31,
	2019			2018
	Fixed Maturities			Fixed Maturities
	(Dollars In Thousands)
Other-than-temporary impairments	$	(1,295	)	$	(691	)
Non-credit impairment losses recorded in other comprehensive income (loss)	(1,847		)	(2,954		)
Net impairment losses recognized in earnings	$	(3,142	)	$	(3,645	)

Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Loss)

The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss):

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Beginning balance	$	24,868		$	3,268
Additions for newly impaired securities	751			—
Additions for previously impaired securities	2,347			—
Reductions for previously impaired securities due to a change in expected cash flows	(632		)	(1,033		)
Reductions for previously impaired securities that were sold in the current period	(119		)	—
Ending balance	$	27,215		$	2,235

Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale

The change in unrealized gains (losses), net of income tax, on fixed maturities, classified as available-for-sale is summarized as follows:

	For The Three Months Ended March 31,
	2019		2018
	(Dollars In Thousands)
Fixed maturities	$	1,557,829	$	(884,219	)

Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity

The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of March 31, 2019 and December 31, 2018, are as follows:

As of March 31, 2019	Amortized Cost		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value		Total OTTI Recognized in OCI
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain, LLC	$	764,356	$	—	$	(56,483	)	$	707,873	$	—
Steel City, LLC	1,843,000		43,568		—			1,886,568		—
	$	2,607,356	$	43,568	$	(56,483	)	$	2,594,441	$	—
As of December 31, 2018	Amortized Cost		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value		Total OTTI Recognized in OCI
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain, LLC	$	750,474	$	—	$	(81,657	)	$	668,817	$	—
Steel City, LLC	1,883,000		—		(4,607		)	1,878,393		—
	$	2,633,474	$	—	$	(86,264	)	$	2,547,210	$	—

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2019

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 March 31, 2019:

	Measurement Category	Level 1		Level 2		Level 3		Total
		(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	4	$	—	$	3,908,288	$	—	$	3,908,288
Commercial mortgage-backed securities	4	—		2,353,344		—		2,353,344
Other asset-backed securities	4	—		942,520		420,091		1,362,611
U.S. government-related securities	4	911,137		499,969		—		1,411,106
State, municipals, and political subdivisions	4	—		3,691,664		—		3,691,664
Other government-related securities	4	—		524,161		—		524,161
Corporate securities	4	—		37,300,286		648,608		37,948,894
Redeemable preferred stocks	4	66,650		17,173		—		83,823
Total fixed maturity securities - available-for-sale		977,787		49,237,405		1,068,699		51,283,891
Fixed maturity securities - trading
Residential mortgage-backed securities	3	—		213,259		—		213,259
Commercial mortgage-backed securities	3	—		209,482		—		209,482
Other asset-backed securities	3	—		83,057		66,484		149,541
U.S. government-related securities	3	26,880		32,747		—		59,627
State, municipals, and political subdivisions	3	—		292,796		—		292,796
Other government-related securities	3	—		23,640		—		23,640
Corporate securities	3	—		1,528,005		5,251		1,533,256
Redeemable preferred stocks	3	11,860		—		—		11,860
Total fixed maturity securities - trading		38,740		2,382,986		71,735		2,493,461
Total fixed maturity securities		1,016,527		51,620,391		1,140,434		53,777,352
Equity securities	3	555,009		37		64,394		619,440
Other long-term investments(1)	3 & 4	68,379		359,864		109,532		537,775
Short-term investments	3	722,906		94,736		—		817,642
Total investments		2,362,821		52,075,028		1,314,360		55,752,209
Cash	3	278,630		—		—		278,630
Other assets	3	32,510		—		—		32,510
Assets related to separate accounts
Variable annuity	3	12,737,450		—		—		12,737,450
Variable universal life	3	1,041,397		—		—		1,041,397
Total assets measured at fair value on a recurring basis		$	16,452,808	$	52,075,028	$	1,314,360	$	69,842,196
Liabilities:
Annuity account balances (2)	3	$	—	$	—	$	74,613	$	74,613
Other liabilities(1)	3 & 4	18,581		156,493		797,891		972,965
Total liabilities measured at fair value on a recurring basis		$	18,581	$	156,493	$	872,504	$	1,047,578
(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 (Loss)

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, municipals, 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 stocks	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, municipals, 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 stocks	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 (Loss)

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 March 31, 2019		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	419,915	Liquidation	Liquidation value	$95.39 - $99.99 ($98.00)
			Discounted cash flow	Liquidity premium	0.04% - 1.27% (0.54%)
				Paydown rate	10.90% - 13.09% (11.97%)
Corporate securities	648,608		Discounted cash flow	Spread over treasury	0.92% - 3.87% (1.65%)
Liabilities:(1)
Embedded derivatives - GLWB(2)	$	203,696	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	0.23% - 1.01%
Embedded derivative - FIA	264,430		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
					Dynamically adjusted for WB moneyness and projected market rates vs credited rates
				Nonperformance risk	0.23% - 1.01%
Embedded derivative - IUL	112,814		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	0.23% - 1.01%
(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 three months ended March 31, 2018, for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																						Total Gains (losses) included in Earnings related to Instruments still held at the  Reporting Date
	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	$	—	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	504,365		—		514		—			(1,634		)	—		(14		)	—		—		—		558			503,789		—
Corporate securities	626,901		—		1,399		—			(12,101		)	35,000		(23,635		)	—		—		—		(1,155		)	626,409		—
Total fixed maturity securities - available-for-sale	1,131,266		—		1,913		—			(13,735		)	35,000		(23,649		)	—		—		—		(597		)	1,130,198		—
Fixed maturity securities - trading
Other asset-backed securities	35,222		194		—		(28		)	—			—		(396		)	—		—		—		(34		)	34,958		166
Corporate securities	5,442		—		—		(94		)	—			—		—			—		—		—		(24		)	5,324		(94		)
Total fixed maturity securities - trading	40,664		194		—		(122		)	—			—		(396		)	—		—		—		(58		)	40,282		72
Total fixed maturity securities	1,171,930		194		1,913		(122		)	(13,735		)	35,000		(24,045		)	—		—		—		(655		)	1,170,480		72
Equity securities	66,110		—		—		(49		)	—			—		—			—		—		—		—			66,061		(49		)
Other long-term investments(1)	136,004		8,864		—		(516		)	—			—		—			—		—		—		—			144,352		8,348
Total investments	1,374,044		9,058		1,913		(687		)	(13,735		)	35,000		(24,045		)	—		—		—		(655		)	1,380,893		8,371
Total assets measured at fair value on a recurring basis	$	1,374,044	$	9,058	$	1,913	$	(687	)	$	(13,735	)	$	35,000	$	(24,045	)	$	—	$	—	$	—	$	(655	)	$	1,380,893	$	8,371
Liabilities:
Annuity account balances(2)	$	83,472	$	—	$	—	$	(794	)	$	—		$	—	$	—		$	441	$	3,308	$	—	$	—		$	81,399	$	—
Other liabilities(1)	760,890		161,318		—		(21,530		)	—			—		—			—		—		—		—			621,102		139,788
Total liabilities measured at fair value on a recurring basis	$	844,362	$	161,318	$	—	$	(22,324	)	$	—		$	—	$	—		$	441	$	3,308	$	—	$	—		$	702,501	$	139,788
(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 three months ended March 31, 2019, for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in Earnings related to Instruments still held at the  Reporting Date
	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	$	—	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	—	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	421,642		446		8,147		(20		)	(331		)	—		(10,008		)	—		—		—			215			420,091		—
Corporate securities	638,276		—		18,585		—			(3,012		)	34,000		(28,773		)	—		—		(10,095		)	(373		)	648,608		—
Total fixed maturity securities - available-for-sale	1,059,918		446		26,732		(20		)	(3,343		)	34,000		(38,781		)	—		—		(10,095		)	(158		)	1,068,699		—
Fixed maturity securities - trading
Other asset-backed securities	26,056		3,196		—		(116		)	—			15,463		(5,111		)	—		—		27,064			(68		)	66,484		5,330
Corporate securities	6,242		101		—		(31		)	—			—		(1,036		)	—		—		—			(25		)	5,251		34
Total fixed maturity securities - trading	32,298		3,297		—		(147		)	—			15,463		(6,147		)	—		—		27,064			(93		)	71,735		5,364
Total fixed maturity securities	1,092,216		3,743		26,732		(167		)	(3,343		)	49,463		(44,928		)	—		—		16,969			(251		)	1,140,434		5,364
Equity securities	64,325		82		—		(13		)	—			—		—			—		—		—			—			64,394		69
Other long-term investments(1)	112,344		13,222		—		(16,034		)	—			—		—			—		—		—			—			109,532		(2,812		)
Total investments	1,268,885		17,047		26,732		(16,214		)	(3,343		)	49,463		(44,928		)	—		—		16,969			(251		)	1,314,360		2,621
Total assets measured at fair value on a recurring basis	$	1,268,885	$	17,047	$	26,732	$	(16,214	)	$	(3,343	)	$	49,463	$	(44,928	)	$	—	$	—	$	16,969		$	(251	)	$	1,314,360	$	2,621
Liabilities:
Annuity account balances(2)	$	76,119	$	—	$	—	$	(326	)	$	—		$	—	$	—		$	11	$	1,843	$	—		$	—		$	74,613	$	—
Other liabilities(1)	629,942		11,670		—		(179,619		)	—			—		—			—		—		—			—			797,891		(167,949		)
Total liabilities measured at fair value on a recurring basis	$	706,061	$	11,670	$	—	$	(179,945	)	$	—		$	—	$	—		$	11	$	1,843	$	—		$	—		$	872,504	$	(167,949	)
(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
		March 31, 2019				December 31, 2018
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	7,701,465	$	7,624,622	$	7,724,733	$	7,447,702
Policy loans	3	1,677,442		1,677,442		1,695,886		1,695,886
Fixed maturities, held-to-maturity(1)	3	2,607,356		2,594,441		2,633,474		2,547,210
Liabilities:
Stable value product account balances	3	$	5,527,816	$	5,536,721	$	5,234,731	$	5,200,723
Future policy benefits and claims(2)	3	1,637,741		1,644,622		1,671,414		1,671,434
Other policyholders’ funds(3)	3	105,141		107,975		131,150		131,782
Debt:(4)
Bank borrowings	3	$	—	$	—	$	—	$	—
Senior Notes	2	1,080,878		1,076,623		1,100,508		1,065,338
Subordinated debentures	2	495,460		501,945		495,426		494,265
Subordinated funding obligations	3	110,000		99,026		110,000		95,476
Non-recourse funding obligations(5)	3	2,607,021		2,656,379		2,632,497		2,550,237
Except as noted below, fair values were estimated using quoted market prices.
(1) Securities purchased from unconsolidated affiliates, 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 $2.8 million and $1.3 million as of March 31, 2019 and December 31, 2018, respectively.
(5) As of March 31, 2019, carrying amount of $2.5 billion and a fair value of $2.6 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. 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.

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Realized Investments Gains and Losses

The following table sets forth realized investments gains and losses for the periods shown:

Realized investment gains (losses) - derivative financial instruments

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures	$	(6,022	)	$	(16,892	)
Equity futures	29,738			(6,428		)
Currency futures	2,244			(7,583		)
Equity options	(71,695		)	12,016
Interest rate swaptions	—			(14		)
Interest rate swaps	74,861			(63,710		)
Total return swaps	(40,027		)	6,490
Embedded derivative - GLWB	(19,626		)	56,292
Total derivatives related to VA contracts	(30,527		)	(19,829		)
Derivatives related to FIA contracts:
Embedded derivative	(38,814		)	11,330
Equity futures	(429		)	(161		)
Equity options	42,050			(4,669		)
Total derivatives related to FIA contracts	2,807			6,500
Derivatives related to IUL contracts:
Embedded derivative	(13,370		)	9,884
Equity futures	171			136
Equity options	6,180			(1,250		)
Total derivatives related to IUL contracts	(7,019		)	8,770
Embedded derivative - Modco reinsurance treaties	(84,998		)	82,658
Other derivatives	66			(40		)
Total realized gains (losses) - derivatives	$	(119,671	)	$	78,059

Components of the Gain or Loss on Derivatives that Qualify as a Cash Flow Hedging Relationship

The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship.

Gain (Loss) on Derivatives in Cash Flow Hedging Relationship

	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives			Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)			Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)			(Effective Portion)			(Ineffective Portion)
				Benefits and settlement			Realized investment
				expenses			gains (losses)
				(Dollars In Thousands)
For The Three Months Ended March 31, 2019
Foreign currency swaps	$	(1,893	)	$	(207	)	$	—
Interest rate swaps	(595		)	(71		)	—
Total	$	(2,488	)	$	(278	)	$	—
For The Three Months Ended March 31, 2018
Foreign currency swaps	$	615		$	(113	)	$	—
Total	$	615		$	(113	)	$	—

Information about the Nature and Accounting Treatment of the Company's Primary Derivative Financial Instruments and Location in and Effect on the Financial Statements

The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below:

	As of
	March 31, 2019				December 31, 2018
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(Dollars In Thousands)
Other long-term investments
Derivatives not designated as hedging instruments:
Interest rate swaps	$	1,583,000	$	47,915	$	1,515,500	$	28,501
Total return swaps	562,658		2,292		138,070		3,971
Embedded derivative - Modco reinsurance treaties	39,878		38		585,294		7,072
Embedded derivative - GLWB	3,922,844		109,494		3,984,070		105,272
Interest rate futures	295,638		7,267		286,208		10,302
Equity futures	70,902		1,261		12,633		483
Currency futures	174,407		718		—		—
Equity options	6,061,873		368,624		5,624,081		220,092
Interest rate swaptions	—		—		—		—
Other	157		166		157		136
	$	12,711,357	$	537,775	$	12,146,013	$	375,829
Other liabilities
Cash flow hedges:
Interest rate swaps	$	350,000	$	—	$	350,000	$	—
Foreign currency swaps	117,178		1,996		117,178		904
Derivatives not designated as hedging instruments:
Interest rate swaps	525,000		2,591		775,000		11,367
Total return swaps	54,342		276		768,177		23,054
Embedded derivative - Modco reinsurance treaties	2,325,352		107,457		1,795,287		32,828
Embedded derivative - GLWB	6,276,475		313,190		8,466,019		289,343
Embedded derivative - FIA	2,639,780		263,445		2,576,033		217,288
Embedded derivative - IUL	247,241		112,814		233,550		90,231
Interest rate futures	870,669		13,231		863,706		20,100
Equity futures	172,853		3,512		659,357		33,753
Currency futures	57,073		8		202,747		2,163
Equity options	4,161,969		153,460		4,199,687		34,178
Other	8,498		985		3,288		252
	$	17,806,430	$	972,965	$	21,010,029	$	755,461

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OFFSETTING OF ASSETS AND LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2019

Offsetting [Abstract]

Schedule of Derivative Instruments by Assets

The tables below present the derivative instruments by assets and liabilities for the Company as of March 31, 2019:

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	428,077	$	—	$	428,077	$	165,785	$	152,924	$	109,368
Total derivatives, subject to a master netting arrangement or similar arrangement	428,077		—		428,077		165,785		152,924		109,368
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	38		—		38		—		—		38
Embedded derivative - GLWB	109,494		—		109,494		—		—		109,494
Other	166		—		166		—		—		166
Total derivatives, not subject to a master netting arrangement or similar arrangement	109,698		—		109,698		—		—		109,698
Total derivatives	537,775		—		537,775		165,785		152,924		219,066
Total Assets	$	537,775	$	—	$	537,775	$	165,785	$	152,924	$	219,066

The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2018: 

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	263,349	$	—	$	263,349	$	70,322	$	99,199	$	93,828
Total derivatives, subject to a master netting arrangement or similar arrangement	263,349		—		263,349		70,322		99,199		93,828
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	7,072		—		7,072		—		—		7,072
Embedded derivative - GLWB	105,272		—		105,272		—		—		105,272
Other	136		—		136		—		—		136
Total derivatives, not subject to a master netting arrangement or similar arrangement	112,480		—		112,480		—		—		112,480
Total derivatives	375,829		—		375,829		70,322		99,199		206,308
Total Assets	$	375,829	$	—	$	375,829	$	70,322	$	99,199	$	206,308

Schedule of Derivative Instruments by Liabilities

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	125,519	$	—	$	125,519	$	70,322	$	47,856	$	7,341
Total derivatives, subject to a master netting arrangement or similar arrangement	125,519		—		125,519		70,322		47,856		7,341
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	32,828		—		32,828		—		—		32,828
Embedded derivative - GLWB	289,343		—		289,343		—		—		289,343
Embedded derivative - FIA	217,288		—		217,288		—		—		217,288
Embedded derivative - IUL	90,231		—		90,231		—		—		90,231
Other	252		—		252		—		—		252
Total derivatives, not subject to a master netting arrangement or similar arrangement	629,942		—		629,942		—		—		629,942
Total derivatives	755,461		—		755,461		70,322		47,856		637,283
Repurchase agreements(1)	418,090		—		418,090		—		—		418,090
Total Liabilities	$	1,173,551	$	—	$	1,173,551	$	70,322	$	47,856	$	1,055,373
(1) Borrowings under repurchase agreements are for a term less than 90 days.

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
							Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	175,074	$	—	$	175,074	$	165,785	$	9,289	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	175,074		—		175,074		165,785		9,289		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	107,457		—		107,457		—		—		107,457
Embedded derivative - GLWB	313,190		—		313,190		—		—		313,190
Embedded derivative - FIA	263,445		—		263,445		—		—		263,445
Embedded derivative - IUL	112,814		—		112,814		—		—		112,814
Other	985		—		985		—		—		985
Total derivatives, not subject to a master netting arrangement or similar arrangement	797,891		—		797,891		—		—		797,891
Total derivatives	972,965		—		972,965		165,785		9,289		797,891
Repurchase agreements(1)	89,275		—		89,275		—		—		89,275
Total Liabilities	$	1,062,240	$	—	$	1,062,240	$	165,785	$	9,289	$	887,166
(1) Borrowings under repurchase agreements are for a term less than 90 days.

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MORTGAGE LOANS (Tables)

3 Months Ended

Mar. 31, 2019

Mortgage Loans [Abstract]

Allowance for Credit Losses on Financing Receivables

A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property.

	As of March 31, 2019			As of December 31, 2018
	(Dollars In Thousands)
Beginning balance	$	1,296		$	—
Charge offs	(350		)	—
Recoveries	—			(209		)
Provision	1,000			1,505
Ending balance	$	1,946		$	1,296

Schedule of an Analysis of the Delinquent Loans

An analysis of the delinquent loans is shown in the following chart.

					Greater
	30-59 Days		60-89 Days		than 90 Days		Total
As of March 31, 2019	Delinquent		Delinquent		Delinquent		Delinquent
	(Dollars In Thousands)
Commercial mortgage loans	$	637	$	—	$	83	$	720
Number of delinquent commercial mortgage loans	2		—		1		3
As of December 31, 2018
Commercial mortgage loans	$	1,044	$	—	$	1,234	$	2,278
Number of delinquent commercial mortgage loans	4		—		1		5

Impaired Financing Receivables

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
	(Dollars In Thousands)
As of March 31, 2019
Commercial mortgage loans:
With no related allowance recorded	$	83	$	83	$	—	$	83	$	—	$	—
With an allowance recorded	$	8,331	$	8,196	$	1,946	$	4,165	$	128	$	156
As of December 31, 2018
Commercial mortgage loans:
With no related allowance recorded	$	—	$	—	$	—	$	—	$	—	$	—
With an allowance recorded	$	5,684	$	5,309	$	1,296	$	1,895	$	267	$	293

Schedule of Loans in Troubled Debt Restructuring

Mortgage loans that were modified in a troubled debt restructuring as of March 31, 2019 and December 31, 2018 were as follows:

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(Dollars In Thousands)
As of March 31, 2019
Troubled debt restructuring:
Commercial mortgage loans	—	$	—	$	—
As of December 31, 2018
Troubled debt restructuring:
Commercial mortgage loans	1	$	2,688	$	1,742

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DEBT AND OTHER OBLIGATIONS (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Summary of Debt and Subordinated Debt Securities

Debt and subordinated debt are summarized as follows:

	As of
	March 31, 2019				December 31, 2018
	Outstanding Principal		Carrying Amounts		Outstanding Principal		Carrying Amounts
	(Dollars In Thousands)
Debt (year of issue):
Credit Facility	$	—	$	—	$	—	$	—
Capital lease obligation	2,794		2,794		1,319		1,319
7.375% Senior Notes (2009), due 2019	400,000		411,562		400,000		416,469
8.45% Senior Notes (2009), due 2039	180,719		273,713		190,044		288,547
4.30% Senior Notes (2018), due 2028	400,000		395,603		400,000		395,492
	$	983,513	$	1,083,672	$	991,363	$	1,101,827
Subordinated debt (year of issue):
5.35% Subordinated Debentures (2017), due 2052	$	500,000	$	495,460	$	500,000	$	495,426
3.55% Subordinated Funding Obligations (2018), due 2038	55,000		55,000		55,000		55,000
3.55% Subordinated Funding Obligations (2018), due 2038	55,000		55,000		55,000		55,000
	$	610,000	$	605,460	$	610,000	$	605,426

Non-recourse Funding Obligations Outstanding

Non-recourse funding obligations outstanding as of March 31, 2019, on a consolidated basis, are shown in the following table:

Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,843,000	$	1,843,000	2039	4.75	%
Golden Gate II Captive Insurance Company	20,600		17,717		2052	5.60	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	685,000		743,981		2037	5.12	%
MONY Life Insurance Company(3)	1,091		2,323		2024	6.19	%
Total	$	2,549,691	$	2,607,021
(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO.
(3)  Fixed rate obligations

Non-recourse funding obligations outstanding as of December 31, 2018, on a consolidated basis, are shown in the following table:

Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,883,000	$	1,883,000	2039	4.75	%
Golden Gate II Captive Insurance Company	20,600		17,703		2052	4.99	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	670,000		729,454		2037	5.12	%
MONY Life Insurance Company(3)	1,091		2,340		2024	6.19	%
Total	$	2,574,691	$	2,632,497
(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO.
(3)  Fixed rate obligations

Schedule of Collateral Pledged for Repurchase Agreements

The following table provides the amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of March 31, 2019 and December 31, 2018:

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of March 31, 2019
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	83,512	$	9,360	$	—	$	—	$	92,872
Total repurchase agreements and repurchase-to-maturity transactions	83,512		9,360		—		—		92,872
Securities lending transactions
Corporate securities	87,234		—		—		—		87,234
Other government related securities	1,755		—		—		—		1,755
Total securities lending transactions	88,989		—		—		—		88,989
Total securities	$	172,501	$	9,360	$	—	$	—	$	181,861

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of December 31, 2018
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	433,182	$	18,713	$	—	$	—	$	451,895
Mortgage loans	—		—		—		—		—
Total securities	$	433,182	$	18,713	$	—	$	—	$	451,895
Securities lending transactions
Fixed maturity securities	$	71,285	$	—	$	—	$	—	$	71,285
Equity securities	891		—		—		—		891
Total securities lending transactions	72,176		—		—		—		72,176
Total securities	$	505,358	$	18,713	$	—	$	—	$	524,071

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EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Components of the Net Periodic Benefit Cost of the Company's Defined Benefit Pension Plan and Unfunded Excess Benefit Plan

Components of the net periodic benefit cost for the three months ended March 31, 2019 and 2018, are as follows:

	For The Three Months Ended March 31,
	2019					2018
	Qualified Pension Plan			Nonqualified Excess Pension Plan		Qualified Pension Plan			Nonqualified Excess Pension Plan
	(Dollars In Thousands)
Service cost — benefits earned during the period	$	3,114		$	285	$	3,441		$	387
Interest cost on projected benefit obligation	2,778			371		2,397			359
Expected return on plan assets	(4,463		)	—		(4,026		)	—
Amortization of prior service cost	—					—			—
Amortization of actuarial loss	—			74		—			265
Total net periodic benefit costs	$	1,429		$	730	$	1,812		$	1,011

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Summary of Changes in the Accumulated Balances for Each Component of AOCI

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of March 31, 2019 and December 31, 2018.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss  Derivatives			Minimum Pension Liability Adjustment			Total Accumulated Other Comprehensive  Income (Loss)
	(Dollars In Thousands, Net of Tax)
Balance, December 31, 2017	$	25,874		$	747		$	(13,925	)	$	12,696
Other comprehensive income (loss) before reclassifications	(1,420,499		)	(1,884		)	(3,546		)	(1,425,929		)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(20,751		)	—			—			(20,751		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	15,651			1,130			1,989			18,770
Cumulative effect adjustments	(10,552		)	—			—			(10,552		)
Balance, December 31, 2018	$	(1,410,277	)	$	(7	)	$	(15,482	)	$	(1,425,766	)
Other comprehensive income (loss) before reclassifications	1,136,331			(1,966		)	—			1,134,365
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	8,792			—			—			8,792
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(1,560		)	220			—			(1,340		)
Cumulative effect adjustments	—			—			—			—
Balance, March 31, 2019	$	(266,714	)	$	(1,753	)	$	(15,482	)	$	(283,949	)
(1)  See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details.
(2)  As of December 31, 2018 and March 31, 2019, net unrealized losses reported in AOCI were offset by $613.4 million and $199.1 million, respectively, due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Schedule of Reclassifications Amounts Out of AOCI

The following tables summarize the reclassifications amounts out of AOCI for the three months ended March 31, 2019 and 2018.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

	Affected Line Item in the Condensed Consolidated
Gains/(losses) in net income:	Statements of Income	For The Three Months Ended March 31,
		2019			2018
		(Dollars In Thousands)
Derivative instruments	Benefits and settlement expenses, net of reinsurance ceded(1)	$	(278	)	$	(113	)
	Tax (expense) benefit	58			24
		$	(220	)	$	(89	)
Unrealized gains and losses on available-for-sale securities	Realized investment gains (losses): All other investments	$	5,117		$	2,783
	Net impairment losses recognized in earnings	(3,142		)	(3,645		)
	Tax (expense) benefit	(415		)	181
		$	1,560		$	(681	)
(1) See Note 7, Derivative Financial Instruments for additional information.

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OPERATING SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Summary of Financial Information for the Company's Segments

The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income:

	For The Three Months Ended March 31,
	2019			2018
	(Dollars In Thousands)
Revenues
Life Marketing	$	457,340		$	434,916
Acquisitions	609,942			379,094
Annuities	139,217			150,713
Stable Value Products	59,579			53,868
Asset Protection	76,198			76,375
Corporate and Other	71,754			70,866
Total revenues	$	1,414,030		$	1,165,832
Pre-tax Adjusted Operating Income (Loss)
Life Marketing	$	1,234		$	(17,849	)
Acquisitions	74,912			55,520
Annuities	54,216			40,531
Stable Value Products	22,239			29,080
Asset Protection	9,743			6,218
Corporate and Other	(19,674		)	(20,679		)
Pre-tax adjusted operating income	142,670			92,821
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income before income tax	174,915			91,798
Income tax expense	(36,631		)	(17,686		)
Net income	$	138,284		$	74,112
Pre-tax adjusted operating income	$	142,670		$	92,821
Adjusted operating income tax (expense) benefit	(29,859		)	(18,044		)
After-tax adjusted operating income	112,811			74,777
Realized (losses) gains on investments and derivatives	32,245			(1,023		)
Income tax benefit (expense) on adjustments	(6,772		)	358
Net income	$	138,284		$	74,112
Realized investment (losses) gains:
Derivative financial instruments	$	(119,671	)	$	78,059
All other investments	129,590			(87,599		)
Net impairment losses recognized in earnings	(3,142		)	(3,645		)
Less: related amortization(1)	(4,361		)	9,156
Less: VA GLWB economic cost	(21,107		)	(21,318		)
Realized (losses) gains on investments and derivatives	$	32,245		$	(1,023	)
(1)  Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses).

	Operating Segment Assets As of March 31, 2019
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	15,038,044	$	31,805,017	$	20,690,159	$	5,401,470
DAC and VOBA	1,496,282		431,788		885,926		5,249
Other intangibles	258,010		32,776		153,452		7,222
Goodwill	215,254		23,862		343,247		113,924
Total assets	$	17,007,590	$	32,293,443	$	22,072,784	$	5,527,865

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	1,025,637	$	14,088,375	$	88,048,702
DAC and VOBA	167,441		—		2,986,686
Other intangibles	120,046		30,097		601,603
Goodwill	129,224		—		825,511
Total assets	$	1,442,348	$	14,118,472	$	92,462,502

	Operating Segment Assets As of December 31, 2018
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	14,575,702	$	31,859,520	$	20,199,597	$	5,107,334
DAC and VOBA	1,499,386		458,977		889,697		6,121
Other intangibles	262,758		31,975		156,785		7,389
Goodwill	215,254		23,862		343,247		113,924
Total assets	$	16,553,100	$	32,374,334	$	21,589,326	$	5,234,768

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	1,019,297	$	12,715,208	$	85,476,658
DAC and VOBA	168,973		—		3,023,154
Other intangibles	122,590		31,934		613,431
Goodwill	129,224		—		825,511
Total assets	$	1,440,084	$	12,747,142	$	89,938,754

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Jan. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect adjustments	$ (50,808)	$ (92,525)
Accounting Standards Update 2016-02
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Right-of-use asset	21,500
Operating lease liability	21,500
Retained Earnings
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect adjustments	(50,808)	$ (81,973)
Retained Earnings | Accounting Standards Update 2017-08
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect adjustments	$ (50,800)

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SIGNIFICANT TRANSACTIONS - Narrative (Details) - P L I C O $ in Millions	May 01, 2018 USD ($)
Business Combination Segment Allocation [Line Items]
Coinsurance basis percentage	100.00%
Ceded commissions for reinsurance	$ 422.4
Statutory reserves resulting from reinsurance, business acquired	$ 13,200.0

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SIGNIFICANT TRANSACTIONS - Purchase Consideration (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	May 01, 2018
Life Business
Pro Forma [Abstract]
Revenue	$ 1,416,320
Net income	$ 112,869
P L I C O
ASSETS
Fixed maturities		$ 12,588,512
Mortgage loans		435,405
Policy loans		131,489
Total investments		13,155,406
Cash		38,456
Accrued investment income		152,030
Reinsurance receivables		272
Value of business acquired		338,303
Other assets		916
Total assets		13,685,383
LIABILITIES
Future policy benefits and claims		11,748,942
Unearned premiums		0
Total policy liabilities and accruals		11,748,942
Annuity account balances		1,823,444
Other policyholders’ funds		41,936
Other liabilities		71,061
Total liabilities		13,685,383
NET ASSETS ACQUIRED		$ 0

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MONY CLOSED BLOCK OF BUSINESS - Summary of Financial Information for the Closed Block (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$ 5,643,484	$ 5,679,732
Policyholder dividend obligation	11,803	0	$ 0	$ 160,712
Other liabilities	33,254	22,505
Total closed block liabilities	5,688,541	5,702,237
Closed block assets
Fixed maturities, available-for-sale, at fair value	4,404,945	4,257,437
Mortgage loans on real estate	75,062	75,838
Policy loans	666,270	672,213
Cash	115,204	116,225
Other assets	107,204	136,388
Total closed block assets	5,368,685	5,258,101
Excess of reported closed block liabilities over closed block assets	319,856	444,136
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation: $(118,670) and $(141,128); and net of income tax: $24,921 and $61,676	0	(120,528)
Future earnings to be recognized from closed block assets and closed block liabilities	319,856	323,608
Policyholder dividend obligations	(118,670)	(141,128)
Deferred income tax expense (benefit)	$ 24,921	$ 61,676

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MONY CLOSED BLOCK OF BUSINESS - Schedule of Reconciliation of the Policyholder Dividend Obligation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Movement in Closed Block Dividend Obligation [Roll Forward]
Policyholder dividend obligation, beginning of period	$ 0	$ 160,712
Applicable to net revenue (losses)	(10,655)	(11,712)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation	22,458	(149,000)
Policyholder dividend obligation, end of period	$ 11,803	$ 0

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MONY CLOSED BLOCK OF BUSINESS - Schedule of Closed Block Revenues and Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Premiums and other income	$ 37,444	$ 39,612
Net investment income	51,128	50,543
Net investment gains	(454)	(237)
Total revenues	88,118	89,918
Benefits and other deductions
Benefits and settlement expenses	78,666	79,952
Other operating expenses	359	(319)
Total benefits and other deductions	79,025	79,633
Net revenues before income taxes	9,093	10,285
Income tax expense	1,910	2,160
Net revenues	$ 7,183	$ 8,125

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INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for all Other Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Fixed maturities	$ 5,117	$ 2,783
Equity gains and losses	30,717	(8,786)
Modco trading portfolio	94,902	(84,709)
Other investments	(1,146)	3,113
Realized gains (losses) - all other investments	129,590	(87,599)
Realized gains (losses) - derivatives	(119,671)	78,059
Realized investment gains (losses)	9,919	(9,540)
Net impairments losses recognized in earnings	$ 3,142	$ 3,645

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INVESTMENT OPERATIONS - Schedule of Gross Realized Gains (Losses) on Investments Available-for-Sale (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Gross realized gains	$ 7,870	$ 8,049
Gross realized losses:
Impairment losses	(3,142)	(3,645)
Other realized losses	$ (2,753)	$ (5,267)

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INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains (Losses) Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Securities in an unrealized gain position:
Fair value (proceeds)	$ 648,891	$ 142,133
Gains realized	7,870	8,049
Securities in an unrealized loss position:
Fair value (proceeds)	178,004	56,984
Losses realized	$ (2,753)	$ (5,267)

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INVESTMENT OPERATIONS - Schedule of Realized Gain(Losses) on Equity Securities Sold (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Net gains (losses) recognized during the period on equity securities	$ 30,717	$ (8,786)
Less: net gains (losses) recognized on equity securities sold during the period	60	(1,702)
Gains (losses) recognized during the period on equity securities still held	$ 30,657	$ (7,084)

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INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Amortized Cost	$ 52,656,572	$ 52,826,470
Gross Unrealized Gains	768,862	189,175
Gross Unrealized Losses	(1,358,532)	(2,750,781)
Fair Value	52,066,902	50,264,864
Total OTTI Recognized in OCI	(17,698)	(28,827)
Residential mortgage-backed securities
Investment [Line Items]
Amortized Cost	3,880,305	3,650,539
Gross Unrealized Gains	57,389	23,247
Gross Unrealized Losses	(29,406)	(62,196)
Fair Value	3,908,288	3,611,590
Total OTTI Recognized in OCI	0	(18)
Commercial mortgage-backed securities
Investment [Line Items]
Amortized Cost	2,363,988	2,349,274
Gross Unrealized Gains	17,199	3,911
Gross Unrealized Losses	(27,843)	(58,101)
Fair Value	2,353,344	2,295,084
Total OTTI Recognized in OCI	0	0
Other asset-backed securities
Investment [Line Items]
Amortized Cost	1,359,813	1,410,059
Gross Unrealized Gains	18,421	17,232
Gross Unrealized Losses	(15,623)	(35,398)
Fair Value	1,362,611	1,391,893
Total OTTI Recognized in OCI	0	0
U.S. government-related securities
Investment [Line Items]
Amortized Cost	1,439,136	1,683,432
Gross Unrealized Gains	2,382	1,795
Gross Unrealized Losses	(30,412)	(45,722)
Fair Value	1,411,106	1,639,505
Total OTTI Recognized in OCI	0	0
Other government-related securities
Investment [Line Items]
Amortized Cost	523,701	545,522
Gross Unrealized Gains	12,343	4,292
Gross Unrealized Losses	(11,883)	(33,850)
Fair Value	524,161	515,964
Total OTTI Recognized in OCI	0	0
States, municipals, and political subdivisions
Investment [Line Items]
Amortized Cost	3,632,880	3,682,037
Gross Unrealized Gains	84,040	25,706
Gross Unrealized Losses	(25,256)	(118,902)
Fair Value	3,691,664	3,588,841
Total OTTI Recognized in OCI	1,021	876
Corporate securities
Investment [Line Items]
Amortized Cost	38,586,159	38,634,888
Gross Unrealized Gains	576,720	112,992
Gross Unrealized Losses	(1,213,985)	(2,385,052)
Fair Value	37,948,894	36,362,828
Total OTTI Recognized in OCI	(18,719)	(29,685)
Redeemable preferred stocks
Investment [Line Items]
Amortized Cost	87,579	94,362
Gross Unrealized Gains	368	0
Gross Unrealized Losses	(4,124)	(11,560)
Fair Value	83,823	82,802
Total OTTI Recognized in OCI	0	0
Fixed maturities
Investment [Line Items]
Amortized Cost	51,873,561	52,050,113
Gross Unrealized Gains	768,862	189,175
Gross Unrealized Losses	(1,358,532)	(2,750,781)
Fair Value	51,283,891	49,488,507
Total OTTI Recognized in OCI	(17,698)	(28,827)
Short-term investments
Investment [Line Items]
Amortized Cost	783,011	776,357
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	783,011	776,357
Total OTTI Recognized in OCI	$ 0	$ 0

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INVESTMENT OPERATIONS - Schedule of Fair Value of Trading Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Trading Securities [Line Items]
Trading securities	$ 2,537,299	$ 2,457,010
Residential mortgage-backed securities
Trading Securities [Line Items]
Trading securities	213,259	241,836
Commercial mortgage-backed securities
Trading Securities [Line Items]
Trading securities	209,482	188,925
Other asset-backed securities
Trading Securities [Line Items]
Trading securities	149,541	159,907
U.S. government-related securities
Trading Securities [Line Items]
Trading securities	59,627	59,794
Other government-related securities
Trading Securities [Line Items]
Trading securities	23,640	44,207
States, municipals, and political subdivisions
Trading Securities [Line Items]
Trading securities	292,796	286,413
Corporate securities
Trading Securities [Line Items]
Trading securities	1,533,256	1,423,833
Redeemable preferred stocks
Trading Securities [Line Items]
Trading securities	11,860	11,277
Fixed maturities
Trading Securities [Line Items]
Trading securities	2,493,461	2,416,192
Equity securities
Trading Securities [Line Items]
Trading securities	9,207	9,892
Short-term investments
Trading Securities [Line Items]
Trading securities	$ 34,631	$ 30,926

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INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Available-for-sale, Amortized Cost
Amortized Cost	$ 52,656,572	$ 52,826,470
Available-for-sale, Fair Value
Fair Value	52,066,902	50,264,864
Held-to-maturity, Fair Value
Fair Value	2,594,441	2,547,210
Fixed maturities
Available-for-sale, Amortized Cost
Due in one year or less	1,259,571
Due after one year through five years	8,954,924
Due after five years through ten years	8,979,403
Due after ten years	32,679,663
Amortized Cost	51,873,561
Available-for-sale, Fair Value
Due in one year or less	1,257,644
Due after one year through five years	8,938,604
Due after five years through ten years	9,034,109
Due after ten years	32,053,534
Fair Value	51,283,891
Held-to-maturity, Amortized Cost
Due in one year or less	0
Due after one year through five years	0
Due after five years through ten years	0
Due after ten years	2,607,356
Amortized Cost	2,607,356	2,633,474
Held-to-maturity, Fair Value
Due in one year or less	0
Due after one year through five years	0
Due after five years through ten years	0
Due after ten years	2,594,441
Fair Value	$ 2,594,441	$ 2,547,210

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INVESTMENT OPERATIONS - Schedule of Other-than-Temporary Impairments of Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investment [Line Items]
Other-than-temporary impairments	$ (1,295)	$ (691)
Net impairment losses recognized in earnings	(3,142)	(3,645)
Fixed maturities
Investment [Line Items]
Other-than-temporary impairments	(1,295)	(691)
Non-credit impairment losses recorded in other comprehensive income (loss)	(1,847)	(2,954)
Net impairment losses recognized in earnings	$ (3,142)	$ (3,645)

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INVESTMENT OPERATIONS - Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Loss) (Details) - Fixed maturities - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance	$ 24,868	$ 3,268
Additions for newly impaired securities	751	0
Additions for previously impaired securities	2,347	0
Reductions for previously impaired securities due to a change in expected cash flows	(632)	(1,033)
Reductions for previously impaired securities that were sold in the current period	(119)	0
Ending balance	$ 27,215	$ 2,235

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INVESTMENT OPERATIONS - Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value
Less Than 12 Months	$ 4,250,285	$ 22,322,949
12 Months or More	22,759,791	17,630,381
Total	27,010,076	39,953,330
Unrealized Loss
Less Than 12 Months	(153,656)	(1,091,842)
12 Months or More	(1,204,876)	(1,658,939)
Total	(1,358,532)	(2,750,781)
Residential mortgage-backed securities
Fair Value
Less Than 12 Months	158,901	1,485,009
12 Months or More	1,242,286	804,364
Total	1,401,187	2,289,373
Unrealized Loss
Less Than 12 Months	(1,772)	(31,302)
12 Months or More	(27,634)	(30,894)
Total	(29,406)	(62,196)
Commercial mortgage-backed securities
Fair Value
Less Than 12 Months	52,747	422,438
12 Months or More	1,478,365	1,429,384
Total	1,531,112	1,851,822
Unrealized Loss
Less Than 12 Months	(1,235)	(7,442)
12 Months or More	(26,608)	(50,659)
Total	(27,843)	(58,101)
Other asset-backed securities
Fair Value
Less Than 12 Months	531,548	687,271
12 Months or More	192,201	148,871
Total	723,749	836,142
Unrealized Loss
Less Than 12 Months	(11,905)	(30,963)
12 Months or More	(3,718)	(4,435)
Total	(15,623)	(35,398)
U.S. government-related securities
Fair Value
Less Than 12 Months	43,977	130,290
12 Months or More	1,045,717	1,085,654
Total	1,089,694	1,215,944
Unrealized Loss
Less Than 12 Months	(640)	(4,668)
12 Months or More	(29,772)	(41,054)
Total	(30,412)	(45,722)
Other government-related securities
Fair Value
Less Than 12 Months	51,767	226,201
12 Months or More	198,112	131,569
Total	249,879	357,770
Unrealized Loss
Less Than 12 Months	(1,279)	(15,267)
12 Months or More	(10,604)	(18,583)
Total	(11,883)	(33,850)
States, municipals, and political subdivisions
Fair Value
Less Than 12 Months	60,555	1,004,262
12 Months or More	911,555	1,129,152
Total	972,110	2,133,414
Unrealized Loss
Less Than 12 Months	(369)	(27,180)
12 Months or More	(24,887)	(91,722)
Total	(25,256)	(118,902)
Corporate securities
Fair Value
Less Than 12 Months	3,340,636	18,326,331
12 Months or More	17,623,264	12,859,732
Total	20,963,900	31,186,063
Unrealized Loss
Less Than 12 Months	(136,453)	(970,553)
12 Months or More	(1,077,532)	(1,414,499)
Total	(1,213,985)	(2,385,052)
Redeemable preferred stocks
Fair Value
Less Than 12 Months	10,154	41,147
12 Months or More	68,291	41,655
Total	78,445	82,802
Unrealized Loss
Less Than 12 Months	(3)	(4,467)
12 Months or More	(4,121)	(7,093)
Total	$ (4,124)	$ (11,560)

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INVESTMENT OPERATIONS - Additional Information (Details)		3 Months Ended
	Jan. 15, 2016 note	Mar. 31, 2019 USD ($) position subsidiary	Dec. 31, 2018 USD ($) subsidiary
Investment [Line Items]
Gross unrealized loss greater than twelve months		$ 1,204,876,000	$ 1,658,939,000
Total positions that were in an unrealized loss position | position		2,473
Fair Value		$ 52,066,902,000	50,264,864,000
Available-for-sale securities, amortized cost		52,656,572,000	52,826,470,000
Trading securities		$ 2,537,299,000	$ 2,457,010,000
Red Mountain and Steel City
Investment [Line Items]
Number of wholly owned subsidiaries that were determined to be VIEs | subsidiary		2	2
Red Mountain, LLC
Investment [Line Items]
Ownership through an affiliate (as a percent)		100.00%
Risk of loss related to the VIE limited to the entity's investment		$ 10,000
Payments made		$ 0
Steel City, LLC
Investment [Line Items]
Ownership through an affiliate (as a percent)		100.00%
Risk of loss related to the VIE limited to the entity's investment		$ 10,000
Payments made		0
Number of notes issued | note	3
Below investment grade
Investment [Line Items]
Fair Value		1,600,000,000
Available-for-sale securities, amortized cost		1,700,000,000
Trading securities		120,700,000
Securities not publicly traded		264,200,000
Residential mortgage-backed securities
Investment [Line Items]
Gross unrealized loss greater than twelve months		27,634,000	$ 30,894,000
Trading securities		213,259,000	241,836,000
Commercial mortgage-backed securities
Investment [Line Items]
Gross unrealized loss greater than twelve months		26,608,000	50,659,000
Trading securities		209,482,000	188,925,000
Other asset-backed securities
Investment [Line Items]
Gross unrealized loss greater than twelve months		$ 3,718,000	4,435,000
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum		97.00%
Trading securities		$ 149,541,000	159,907,000
U.S. government-related securities
Investment [Line Items]
Gross unrealized loss greater than twelve months		29,772,000	41,054,000
Trading securities		59,627,000	59,794,000
Other government-related securities
Investment [Line Items]
Gross unrealized loss greater than twelve months		10,604,000	18,583,000
Trading securities		23,640,000	44,207,000
States, municipals, and political subdivisions
Investment [Line Items]
Gross unrealized loss greater than twelve months		24,887,000	91,722,000
Trading securities		292,796,000	286,413,000
Corporate securities
Investment [Line Items]
Gross unrealized loss greater than twelve months		1,077,532,000	1,414,499,000
Trading securities		1,533,256,000	1,423,833,000
Fixed maturities
Investment [Line Items]
Fair Value		51,283,891,000
Available-for-sale securities, amortized cost		51,873,561,000
Trading securities		2,493,461,000	2,416,192,000
Gross unrecognized holding gains		43,568,000	0
Gross unrecognized holding losses		$ 56,483,000	$ 86,264,000

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INVESTMENT OPERATIONS - Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Fixed maturities
Investment Holdings [Line Items]
Change in unrealized gains (losses), net of income tax	$ 1,557,829	$ (884,219)

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INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Fair Value	$ 2,594,441	$ 2,547,210
Fixed maturities
Investment [Line Items]
Amortized Cost	2,607,356	2,633,474
Gross Unrecognized Holding Gains	43,568	0
Gross Unrecognized Holding Losses	(56,483)	(86,264)
Fair Value	2,594,441	2,547,210
Total OTTI Recognized in OCI	0	0
Fixed maturities | Red Mountain, LLC
Investment [Line Items]
Amortized Cost	764,356	750,474
Gross Unrecognized Holding Gains	0	0
Gross Unrecognized Holding Losses	(56,483)	(81,657)
Fair Value	707,873	668,817
Total OTTI Recognized in OCI	0	0
Fixed maturities | Steel City, LLC
Investment [Line Items]
Amortized Cost	1,843,000	1,883,000
Gross Unrecognized Holding Gains	43,568	0
Gross Unrecognized Holding Losses	0	(4,607)
Fair Value	1,886,568	1,878,393
Total OTTI Recognized in OCI	$ 0	$ 0

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets:
Fixed maturity securities - available-for-sale	$ 52,066,902	$ 50,264,864
Fixed maturity securities - trading	2,537,299	2,457,010
Total fixed maturity securities	53,777,352	51,904,699
Equity securities	619,440	595,884
Other long-term investments	537,775	375,829
Short-term investments	817,642	807,283
Assets related to separate accounts:
Variable annuity	12,737,450	12,288,919
Variable universal life	1,041,397	937,732
Fixed maturities
Assets:
Fixed maturity securities - available-for-sale	51,283,891
Fixed maturity securities - trading	2,493,461	2,416,192
Residential mortgage-backed securities
Assets:
Fixed maturity securities - trading	213,259	241,836
Commercial mortgage-backed securities
Assets:
Fixed maturity securities - trading	209,482	188,925
Other asset-backed securities
Assets:
Fixed maturity securities - trading	149,541	159,907
States, municipals, and political subdivisions
Assets:
Fixed maturity securities - trading	292,796	286,413
Other government-related securities
Assets:
Fixed maturity securities - trading	23,640	44,207
Corporate securities
Assets:
Fixed maturity securities - trading	1,533,256	1,423,833
Level 3 | Other asset-backed securities
Assets:
Total investments	419,915	421,458
Level 3 | Corporate securities
Assets:
Total investments	648,608	631,068
Measured at fair value on a recurring basis
Assets:
Total fixed maturity securities	53,777,352	51,904,699
Equity securities	619,440	595,884
Other long-term investments	537,775	375,829
Short-term investments	817,642	807,283
Total investments	55,752,209	53,683,695
Cash	278,630	173,714
Other assets	32,510	29,257
Assets related to separate accounts:
Variable annuity	12,737,450	12,288,919
Variable universal life	1,041,397	937,732
Total assets measured at fair value on a recurring basis	69,842,196	67,113,317
Liabilities:
Annuity account balances	74,613	76,119
Other liabilities	972,965	755,461
Total liabilities measured at fair value on a recurring basis	1,047,578	831,580
Measured at fair value on a recurring basis | Fixed maturities
Assets:
Fixed maturity securities - available-for-sale	51,283,891	49,488,507
Fixed maturity securities - trading	2,493,461	2,416,192
Measured at fair value on a recurring basis | Residential mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	3,908,288	3,611,590
Fixed maturity securities - trading	213,259	241,836
Measured at fair value on a recurring basis | Commercial mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	2,353,344	2,295,084
Fixed maturity securities - trading	209,482	188,925
Measured at fair value on a recurring basis | Other asset-backed securities
Assets:
Fixed maturity securities - available-for-sale	1,362,611	1,391,893
Fixed maturity securities - trading	149,541	159,907
Measured at fair value on a recurring basis | U.S. government-related securities
Assets:
Fixed maturity securities - available-for-sale	1,411,106	1,639,505
Fixed maturity securities - trading	59,627	59,794
Measured at fair value on a recurring basis | States, municipals, and political subdivisions
Assets:
Fixed maturity securities - available-for-sale	3,691,664	3,588,841
Fixed maturity securities - trading	292,796	286,413
Measured at fair value on a recurring basis | Other government-related securities
Assets:
Fixed maturity securities - available-for-sale	524,161	515,964
Fixed maturity securities - trading	23,640	44,207
Measured at fair value on a recurring basis | Corporate securities
Assets:
Fixed maturity securities - available-for-sale	37,948,894	36,362,828
Fixed maturity securities - trading	1,533,256	1,423,833
Measured at fair value on a recurring basis | Redeemable preferred stocks
Assets:
Fixed maturity securities - available-for-sale	83,823	82,802
Fixed maturity securities - trading	11,860	11,277
Measured at fair value on a recurring basis | Level 1
Assets:
Total fixed maturity securities	1,016,527	1,114,751
Equity securities	555,009	531,523
Other long-term investments	68,379	83,047
Short-term investments	722,906	730,067
Total investments	2,362,821	2,459,388
Cash	278,630	173,714
Other assets	32,510	29,257
Assets related to separate accounts:
Variable annuity	12,737,450	12,288,919
Variable universal life	1,041,397	937,732
Total assets measured at fair value on a recurring basis	16,452,808	15,889,010
Liabilities:
Annuity account balances	0	0
Other liabilities	18,581	56,018
Total liabilities measured at fair value on a recurring basis	18,581	56,018
Measured at fair value on a recurring basis | Level 1 | Fixed maturities
Assets:
Fixed maturity securities - available-for-sale	977,787	1,076,021
Fixed maturity securities - trading	38,740	38,730
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities
Assets:
Fixed maturity securities - available-for-sale	911,137	1,010,485
Fixed maturity securities - trading	26,880	27,453
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 1 | Other government-related securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 1 | Corporate securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 1 | Redeemable preferred stocks
Assets:
Fixed maturity securities - available-for-sale	66,650	65,536
Fixed maturity securities - trading	11,860	11,277
Measured at fair value on a recurring basis | Level 2
Assets:
Total fixed maturity securities	51,620,391	49,697,732
Equity securities	37	36
Other long-term investments	359,864	180,438
Short-term investments	94,736	77,216
Total investments	52,075,028	49,955,422
Cash	0	0
Other assets	0	0
Assets related to separate accounts:
Variable annuity	0	0
Variable universal life	0	0
Total assets measured at fair value on a recurring basis	52,075,028	49,955,422
Liabilities:
Annuity account balances	0	0
Other liabilities	156,493	69,501
Total liabilities measured at fair value on a recurring basis	156,493	69,501
Measured at fair value on a recurring basis | Level 2 | Fixed maturities
Assets:
Fixed maturity securities - available-for-sale	49,237,405	47,352,568
Fixed maturity securities - trading	2,382,986	2,345,164
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	3,908,288	3,611,590
Fixed maturity securities - trading	213,259	241,836
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	2,353,344	2,295,084
Fixed maturity securities - trading	209,482	188,925
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities
Assets:
Fixed maturity securities - available-for-sale	942,520	970,251
Fixed maturity securities - trading	83,057	133,851
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities
Assets:
Fixed maturity securities - available-for-sale	499,969	629,020
Fixed maturity securities - trading	32,747	32,341
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions
Assets:
Fixed maturity securities - available-for-sale	3,691,664	3,588,841
Fixed maturity securities - trading	292,796	286,413
Measured at fair value on a recurring basis | Level 2 | Other government-related securities
Assets:
Fixed maturity securities - available-for-sale	524,161	515,964
Fixed maturity securities - trading	23,640	44,207
Measured at fair value on a recurring basis | Level 2 | Corporate securities
Assets:
Fixed maturity securities - available-for-sale	37,300,286	35,724,552
Fixed maturity securities - trading	1,528,005	1,417,591
Measured at fair value on a recurring basis | Level 2 | Redeemable preferred stocks
Assets:
Fixed maturity securities - available-for-sale	17,173	17,266
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 3
Assets:
Total fixed maturity securities	1,140,434	1,092,216
Equity securities	64,394	64,325
Other long-term investments	109,532	112,344
Short-term investments	0	0
Total investments	1,314,360	1,268,885
Cash	0	0
Other assets	0	0
Assets related to separate accounts:
Variable annuity	0	0
Variable universal life	0	0
Total assets measured at fair value on a recurring basis	1,314,360	1,268,885
Liabilities:
Annuity account balances	74,613	76,119
Other liabilities	797,891	629,942
Total liabilities measured at fair value on a recurring basis	872,504	706,061
Measured at fair value on a recurring basis | Level 3 | Fixed maturities
Assets:
Fixed maturity securities - available-for-sale	1,068,699	1,059,918
Fixed maturity securities - trading	71,735	32,298
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities
Assets:
Fixed maturity securities - available-for-sale	420,091	421,642
Fixed maturity securities - trading	66,484	26,056
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 3 | Other government-related securities
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	0	0
Measured at fair value on a recurring basis | Level 3 | Corporate securities
Assets:
Fixed maturity securities - available-for-sale	648,608	638,276
Fixed maturity securities - trading	5,251	6,242
Measured at fair value on a recurring basis | Level 3 | Redeemable preferred stocks
Assets:
Fixed maturity securities - available-for-sale	0	0
Fixed maturity securities - trading	$ 0	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details)	3 Months Ended
	Mar. 31, 2019 USD ($) quote primary_source input_method	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Assets and liabilities measured at fair value on a recurring basis
Number of sources of information considered | primary_source	1
Number of sources of information | input_method	3
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services	93.50%
Number of broker quotes obtained per security | quote	1
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations	100.00%
Financial instruments with book value approximating fair value	$ 63,600,000		$ 63,600,000
Transfers into Level 3	36,000,000	$ 0
Securities transferred from level 3 to level 2	19,000,000	0
Transfers from Level 2 to Level 1	0	0
Transfers from Level 1	0	0
Level 3
Assets and liabilities measured at fair value on a recurring basis
Level 3 fair value	872,504,000	702,501,000	706,061,000	$ 844,362,000
Financial instruments that are valued using broker quotes	72,700,000		40,400,000
Level 3 | Annuity account
Assets and liabilities measured at fair value on a recurring basis
Level 3 fair value	74,613,000	$ 81,399,000	76,119,000	$ 83,472,000
Asset-backed securities | Level 2
Assets and liabilities measured at fair value on a recurring basis
Fair value	7,700,000,000
Asset-backed securities | Level 3
Assets and liabilities measured at fair value on a recurring basis
Fair value	$ 486,600,000
Other asset-backed securities
Assets and liabilities measured at fair value on a recurring basis
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum	97.00%
Other asset-backed securities | Level 3
Assets and liabilities measured at fair value on a recurring basis
Fair value	$ 419,915,000		421,458,000
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum	97.00%
Financial instruments that are valued using broker quotes	$ 66,700,000		26,200,000
Other asset-backed securities | Level 3 | Available-for-sale securities
Assets and liabilities measured at fair value on a recurring basis
Fair value	420,100,000
Other asset-backed securities | Level 3 | Trading securities
Assets and liabilities measured at fair value on a recurring basis
Fair value	66,500,000
Corporate bonds and securities | Level 2
Assets and liabilities measured at fair value on a recurring basis
Fair value	43,900,000,000
Corporate bonds and securities | Level 3
Assets and liabilities measured at fair value on a recurring basis
Fair value	653,900,000
Equity securities
Assets and liabilities measured at fair value on a recurring basis
Fair value	64,400,000
Federal Home Loan Bank (FHLB) stock	63,400,000
Equity securities | Level 3
Assets and liabilities measured at fair value on a recurring basis
Financial instruments that are valued using broker quotes	$ 800,000		700,000
Embedded derivative - GLWB | Minimum
Assets and liabilities measured at fair value on a recurring basis
Mortality (as a percent)	87.00%
Embedded derivative - GLWB | Maximum
Assets and liabilities measured at fair value on a recurring basis
Mortality (as a percent)	100.00%
Embedded derivative - FIA | Minimum
Assets and liabilities measured at fair value on a recurring basis
Mortality (as a percent)	87.00%
Embedded derivative - FIA | Maximum
Assets and liabilities measured at fair value on a recurring basis
Mortality (as a percent)	100.00%
Embedded derivative - IUL | Minimum
Assets and liabilities measured at fair value on a recurring basis
Mortality (as a percent)	37.00%
Embedded derivative - IUL | Maximum
Assets and liabilities measured at fair value on a recurring basis
Mortality (as a percent)	577.00%
Embedded derivative - Modified coinsurance agreements
Assets and liabilities measured at fair value on a recurring basis
Statutory policy liabilities (net of policy loans)	$ 2,300,000,000
Embedded derivative - Modified coinsurance agreements | Trading securities
Assets and liabilities measured at fair value on a recurring basis
Fair value	113,000,000
Corporate securities | Level 3
Assets and liabilities measured at fair value on a recurring basis
Fair value	648,608,000		631,068,000
Financial instruments that are valued using broker quotes	$ 5,200,000		$ 13,500,000

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of Level 3 Financial Instruments (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) usd_per_policy	Dec. 31, 2018 USD ($) usd_per_policy
Liabilities:
Fair Value	$ 972,965,000	$ 755,461,000
Level 3 | Other asset-backed securities
Assets:
Fair value	419,915,000	421,458,000
Level 3 | Corporate securities
Assets:
Fair value	648,608,000	631,068,000
Level 3 | Embedded derivative - GLWB
Liabilities:
Fair Value	203,696,000	184,071,000
Level 3 | Embedded derivative - FIA
Liabilities:
Fair Value	264,430,000	217,288,000
Level 3 | Embedded derivative - IUL
Liabilities:
Fair Value	$ 112,814,000	$ 90,231,000
Level 3 | Discounted cash flow | Corporate securities | Minimum
Liabilities:
Debt securities, measurement input	0.0092	0.0084
Level 3 | Discounted cash flow | Corporate securities | Maximum
Liabilities:
Debt securities, measurement input	0.0387	0.0300
Level 3 | Discounted cash flow | Corporate securities | Weighted average
Liabilities:
Debt securities, measurement input	0.0165	0.0184
Level 3 | Actuarial cash flow model | Embedded derivative - FIA
Liabilities:
Embedded derivative, measurement input	145	145
Liquidation value | Level 3 | Liquidation Technique | Other asset-backed securities | Minimum
Liabilities:
Debt securities, measurement input, value	$ 95.39	$ 85.75
Liquidation value | Level 3 | Liquidation Technique | Other asset-backed securities | Maximum
Liabilities:
Debt securities, measurement input, value	99.99	99.99
Liquidation value | Level 3 | Liquidation Technique | Other asset-backed securities | Weighted average
Liabilities:
Debt securities, measurement input, value	$ 98.00	$ 95.36
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Minimum
Liabilities:
Debt securities, measurement input	0.0004	0.0002
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Maximum
Liabilities:
Debt securities, measurement input	0.0127	0.0125
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Weighted average
Liabilities:
Debt securities, measurement input	0.0054	0.0064
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Minimum
Liabilities:
Debt securities, measurement input	0.1090	0.1096
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Maximum
Liabilities:
Debt securities, measurement input	0.1309	0.1311
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Weighted average
Liabilities:
Debt securities, measurement input	0.1197	0.1203
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum
Liabilities:
Embedded derivative, measurement input	0.87	0.87
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum
Liabilities:
Embedded derivative, measurement input	1.00	1.00
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - FIA
Liabilities:
Embedded derivative, measurement input		1.00
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum
Liabilities:
Embedded derivative, measurement input	0.37	0.0037
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum
Liabilities:
Embedded derivative, measurement input	5.77	0.0577
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum
Liabilities:
Embedded derivative, measurement input	0.010	0.010
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum
Liabilities:
Embedded derivative, measurement input	0.300	0.300
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum
Liabilities:
Embedded derivative, measurement input	0.005	0.005
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum
Liabilities:
Embedded derivative, measurement input	0.100	0.100
Utilization | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB
Liabilities:
Embedded derivative, measurement input	0.99	0.99
Policies that have a one-time over-utilization rate of a specified amount	10.00%	10.00%
Specified level of one-time over-utilization	400.00%	400.00%
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum
Liabilities:
Embedded derivative, measurement input	0.0023	0.0021
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum
Liabilities:
Embedded derivative, measurement input	0.0101	0.0116
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum
Liabilities:
Embedded derivative, measurement input	0.0023	0.0021
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum
Liabilities:
Embedded derivative, measurement input	0.0101	0.0116
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum
Liabilities:
Embedded derivative, measurement input	0.0023	0.0021
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum
Liabilities:
Embedded derivative, measurement input	0.0101	0.0116
Withdrawal rate, prior to age 70 | Level 3 | Actuarial cash flow model | Embedded derivative - FIA
Liabilities:
Embedded derivative, measurement input	0.015	0.015
Withdrawal rate | Level 3 | Actuarial cash flow model | Embedded derivative - FIA
Liabilities:
Embedded derivative, measurement input	1.000	1.00

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Reconciliation of Beginning and Ending Balances for Fair Value Measurements (Details) - Level 3 - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Assets:
Beginning Balance	$ 1,268,885	$ 1,374,044
Total Realized and Unrealized Gains, Included in Earnings, Assets	17,047	9,058
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	26,732	1,913
Total Realized and Unrealized Losses, Included in Earnings, Assets	(16,214)	(687)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	(3,343)	(13,735)
Purchases	49,463	35,000
Sales	(44,928)	(24,045)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	16,969	0
Other	(251)	(655)
Ending Balance	1,314,360	1,380,893
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	2,621	8,371
Liabilities:
Beginning Balance	706,061	844,362
Total Realized and Unrealized Gains, Included in Earnings, Liabilities	11,670	161,318
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Liabilities	0	0
Total Realized and Unrealized Losses, Included in Earnings, Liabilities	(179,945)	(22,324)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Liabilities	0	0
Purchases	0	0
Sales	0	0
Issuances	11	441
Settlements	1,843	3,308
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	872,504	702,501
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	(167,949)	139,788
Annuity account
Liabilities:
Beginning Balance	76,119	83,472
Total Realized and Unrealized Gains, Included in Earnings, Liabilities	0	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Liabilities	0	0
Total Realized and Unrealized Losses, Included in Earnings, Liabilities	(326)	(794)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Liabilities	0	0
Purchases	0	0
Sales	0	0
Issuances	11	441
Settlements	1,843	3,308
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	74,613	81,399
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	0	0
Other liabilities
Liabilities:
Beginning Balance	629,942	760,890
Total Realized and Unrealized Gains, Included in Earnings, Liabilities	11,670	161,318
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Liabilities	0	0
Total Realized and Unrealized Losses, Included in Earnings, Liabilities	(179,619)	(21,530)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Liabilities	0	0
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	797,891	621,102
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	(167,949)	139,788
Total investments
Assets:
Beginning Balance	1,268,885	1,374,044
Total Realized and Unrealized Gains, Included in Earnings, Assets	17,047	9,058
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	26,732	1,913
Total Realized and Unrealized Losses, Included in Earnings, Assets	(16,214)	(687)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	(3,343)	(13,735)
Purchases	49,463	35,000
Sales	(44,928)	(24,045)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	16,969	0
Other	(251)	(655)
Ending Balance	1,314,360	1,380,893
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	2,621	8,371
Fixed maturities
Assets:
Beginning Balance	1,092,216	1,171,930
Total Realized and Unrealized Gains, Included in Earnings, Assets	3,743	194
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	26,732	1,913
Total Realized and Unrealized Losses, Included in Earnings, Assets	(167)	(122)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	(3,343)	(13,735)
Purchases	49,463	35,000
Sales	(44,928)	(24,045)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	16,969	0
Other	(251)	(655)
Ending Balance	1,140,434	1,170,480
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	5,364	72
Equity securities
Assets:
Beginning Balance	64,325	66,110
Total Realized and Unrealized Gains, Included in Earnings, Assets	82	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	(13)	(49)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	64,394	66,061
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	69	(49)
Other long-term investments
Assets:
Beginning Balance	112,344	136,004
Total Realized and Unrealized Gains, Included in Earnings, Assets	13,222	8,864
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	(16,034)	(516)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	109,532	144,352
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	(2,812)	8,348
Available-for-sale securities | Fixed maturities
Assets:
Beginning Balance	1,059,918	1,131,266
Total Realized and Unrealized Gains, Included in Earnings, Assets	446	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	26,732	1,913
Total Realized and Unrealized Losses, Included in Earnings, Assets	(20)	0
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	(3,343)	(13,735)
Purchases	34,000	35,000
Sales	(38,781)	(23,649)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	(10,095)	0
Other	(158)	(597)
Ending Balance	1,068,699	1,130,198
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	0	0
Available-for-sale securities | Residential mortgage-backed securities
Assets:
Beginning Balance	0	0
Total Realized and Unrealized Gains, Included in Earnings, Assets	0	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	0	0
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	0	0
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	0	0
Available-for-sale securities | Commercial mortgage-backed securities
Assets:
Beginning Balance	0	0
Total Realized and Unrealized Gains, Included in Earnings, Assets	0	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	0	0
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	0	0
Ending Balance	0	0
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	0	0
Available-for-sale securities | Other asset-backed securities
Assets:
Beginning Balance	421,642	504,365
Total Realized and Unrealized Gains, Included in Earnings, Assets	446	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	8,147	514
Total Realized and Unrealized Losses, Included in Earnings, Assets	(20)	0
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	(331)	(1,634)
Purchases	0	0
Sales	(10,008)	(14)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	215	558
Ending Balance	420,091	503,789
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	0	0
Available-for-sale securities | Corporate securities
Assets:
Beginning Balance	638,276	626,901
Total Realized and Unrealized Gains, Included in Earnings, Assets	0	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	18,585	1,399
Total Realized and Unrealized Losses, Included in Earnings, Assets	0	0
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	(3,012)	(12,101)
Purchases	34,000	35,000
Sales	(28,773)	(23,635)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	(10,095)	0
Other	(373)	(1,155)
Ending Balance	648,608	626,409
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	0	0
Trading securities | Fixed maturities
Assets:
Beginning Balance	32,298	40,664
Total Realized and Unrealized Gains, Included in Earnings, Assets	3,297	194
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	(147)	(122)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	15,463	0
Sales	(6,147)	(396)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	27,064	0
Other	(93)	(58)
Ending Balance	71,735	40,282
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	5,364	72
Trading securities | Other asset-backed securities
Assets:
Beginning Balance	26,056	35,222
Total Realized and Unrealized Gains, Included in Earnings, Assets	3,196	194
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	(116)	(28)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	15,463	0
Sales	(5,111)	(396)
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	27,064	0
Other	(68)	(34)
Ending Balance	66,484	34,958
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	5,330	166
Trading securities | Corporate securities
Assets:
Beginning Balance	6,242	5,442
Total Realized and Unrealized Gains, Included in Earnings, Assets	101	0
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets	0	0
Total Realized and Unrealized Losses, Included in Earnings, Assets	(31)	(94)
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets	0	0
Purchases	0	0
Sales	(1,036)	0
Issuances	0	0
Settlements	0	0
Transfers in/out of Level 3	0	0
Other	(25)	(24)
Ending Balance	5,251	5,324
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	$ 34	$ (94)

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets:
Mortgage loans on real estate	$ 7,701,465	$ 7,724,733
Policy loans	1,677,442	1,695,886
Fixed maturities, held-to-maturity	2,607,356	2,633,474
Liabilities:
Stable value product account balances	5,527,816	5,234,731
Future policy benefits and claims	13,665,415	13,720,081
Other policyholders’ funds	1,166,378	1,128,379
Debt:
Subordinated debt	605,460	605,426
Non-recourse funding obligations	2,607,021	2,632,497
Capital lease obligation	2,800	0
Golden Gate V
Debt:
Non-recourse funding obligations	743,981	729,454
Level 3 | Carrying Amounts
Assets:
Mortgage loans on real estate	7,701,465	7,724,733
Policy loans	1,677,442	1,695,886
Fixed maturities, held-to-maturity	2,607,356	2,633,474
Liabilities:
Stable value product account balances	5,527,816	5,234,731
Future policy benefits and claims	1,637,741	1,671,414
Other policyholders’ funds	105,141	131,150
Debt:
Bank borrowings	0	0
Subordinated funding obligations	110,000	110,000
Non-recourse funding obligations	2,607,021	2,632,497
Level 3 | Carrying Amounts | Golden Gate V
Debt:
Non-recourse funding obligations	2,500,000	2,600,000
Level 3 | Fair Values
Assets:
Mortgage loans on real estate	7,624,622	7,447,702
Policy loans	1,677,442	1,695,886
Fixed maturities, held-to-maturity	2,594,441	2,547,210
Liabilities:
Stable value product account balances	5,536,721	5,200,723
Future policy benefits and claims	1,644,622	1,671,434
Other policyholders’ funds	107,975	131,782
Debt:
Bank borrowings	0	0
Subordinated funding obligations	99,026	95,476
Non-recourse funding obligations	2,656,379	2,550,237
Level 3 | Fair Values | Golden Gate V
Debt:
Non-recourse funding obligations	2,600,000	2,500,000
Level 2 | Carrying Amounts
Debt:
Senior Notes	1,080,878	1,100,508
Subordinated debt	495,460	495,426
Level 2 | Fair Values
Debt:
Senior Notes	1,076,623	1,065,338
Subordinated debt	$ 501,945	$ 494,265

XML

DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	$ (119,671)	$ 78,059
Derivatives not designated as hedging instruments
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(119,671)	78,059
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(84,998)	82,658
Derivatives not designated as hedging instruments | Other derivatives
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	66	(40)
Derivatives not designated as hedging instruments | VA
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(30,527)	(19,829)
Derivatives not designated as hedging instruments | VA | Interest rate futures
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(6,022)	(16,892)
Derivatives not designated as hedging instruments | VA | Equity futures
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	29,738	(6,428)
Derivatives not designated as hedging instruments | VA | Currency futures
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	2,244	(7,583)
Derivatives not designated as hedging instruments | VA | Equity options
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(71,695)	12,016
Derivatives not designated as hedging instruments | VA | Interest rate swaptions
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	0	(14)
Derivatives not designated as hedging instruments | VA | Interest rate swaps
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	74,861	(63,710)
Derivatives not designated as hedging instruments | VA | Total return swaps
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(40,027)	6,490
Derivatives not designated as hedging instruments | VA | Embedded derivative - GLWB
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(19,626)	56,292
Derivatives not designated as hedging instruments | FIA
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	2,807	6,500
Derivatives not designated as hedging instruments | FIA | Equity futures
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(429)	(161)
Derivatives not designated as hedging instruments | FIA | Equity options
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	42,050	(4,669)
Derivatives not designated as hedging instruments | FIA | Embedded derivative - FIA
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(38,814)	11,330
Derivatives not designated as hedging instruments | IUL
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	(7,019)	8,770
Derivatives not designated as hedging instruments | IUL | Equity futures
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	171	136
Derivatives not designated as hedging instruments | IUL | Equity options
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	6,180	(1,250)
Derivatives not designated as hedging instruments | IUL | Embedded derivative - IUL
Notional amount and fair value of the entity's derivative financial instruments
Total realized gains (losses) - derivatives	$ (13,370)	$ 9,884

XML

DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivatives in Cash Flow Hedging Relationship (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of gains (losses) reclassified from accumulated other comprehensive income (loss) into income (loss) next 12 months	$ 1,000
Cash flow hedges
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives	(2,488)
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives		$ 615
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	(278)
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)		(113)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives	0
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives		0
Cash flow hedges | Foreign currency swaps
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives	(1,893)
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives		615
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	(207)
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)		(113)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives	0
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives		$ 0
Cash flow hedges | Interest rate swaps
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives	(595)
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	(71)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives	$ 0

XML

DERIVATIVE FINANCIAL INSTRUMENTS - Nature and Accounting Treatment of Derivative Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Other long-term investments, Fair Value	$ 537,775	$ 375,829
Embedded derivative - Modco reinsurance treaties
Derivative [Line Items]
Other long-term investments, Fair Value	38	7,072
Embedded derivative - GLWB
Derivative [Line Items]
Other long-term investments, Fair Value	109,494	105,272
Derivatives not designated as hedging instruments
Derivative [Line Items]
Other long-term investments, Notional Amount	12,711,357	12,146,013
Other long-term investments, Fair Value	537,775	375,829
Other liabilities, Notional Amount	17,806,430	21,010,029
Other liabilities, Fair Value	972,965	755,461
Derivatives not designated as hedging instruments | Interest rate swaps
Derivative [Line Items]
Other long-term investments, Notional Amount	1,583,000	1,515,500
Other long-term investments, Fair Value	47,915	28,501
Other liabilities, Notional Amount	525,000	775,000
Other liabilities, Fair Value	2,591	11,367
Derivatives not designated as hedging instruments | Total return swaps
Derivative [Line Items]
Other long-term investments, Notional Amount	562,658	138,070
Other long-term investments, Fair Value	2,292	3,971
Other liabilities, Notional Amount	54,342	768,177
Other liabilities, Fair Value	276	23,054
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties
Derivative [Line Items]
Other long-term investments, Notional Amount	39,878	585,294
Other long-term investments, Fair Value	38	7,072
Other liabilities, Notional Amount	2,325,352	1,795,287
Other liabilities, Fair Value	107,457	32,828
Derivatives not designated as hedging instruments | Embedded derivative - GLWB
Derivative [Line Items]
Other long-term investments, Notional Amount	3,922,844	3,984,070
Other long-term investments, Fair Value	109,494	105,272
Other liabilities, Notional Amount	6,276,475	8,466,019
Other liabilities, Fair Value	313,190	289,343
Derivatives not designated as hedging instruments | Interest rate futures
Derivative [Line Items]
Other long-term investments, Notional Amount	295,638	286,208
Other long-term investments, Fair Value	7,267	10,302
Other liabilities, Notional Amount	870,669	863,706
Other liabilities, Fair Value	13,231	20,100
Derivatives not designated as hedging instruments | Equity futures
Derivative [Line Items]
Other long-term investments, Notional Amount	70,902	12,633
Other long-term investments, Fair Value	1,261	483
Other liabilities, Notional Amount	172,853	659,357
Other liabilities, Fair Value	3,512	33,753
Derivatives not designated as hedging instruments | Currency futures
Derivative [Line Items]
Other long-term investments, Notional Amount	174,407	0
Other long-term investments, Fair Value	718	0
Other liabilities, Notional Amount	57,073	202,747
Other liabilities, Fair Value	8	2,163
Derivatives not designated as hedging instruments | Equity options
Derivative [Line Items]
Other long-term investments, Notional Amount	6,061,873	5,624,081
Other long-term investments, Fair Value	368,624	220,092
Other liabilities, Notional Amount	4,161,969	4,199,687
Other liabilities, Fair Value	153,460	34,178
Derivatives not designated as hedging instruments | Interest rate swaptions
Derivative [Line Items]
Other long-term investments, Notional Amount	0	0
Other long-term investments, Fair Value	0	0
Derivatives not designated as hedging instruments | Other
Derivative [Line Items]
Other long-term investments, Notional Amount	157	157
Other long-term investments, Fair Value	166	136
Other liabilities, Notional Amount	8,498	3,288
Other liabilities, Fair Value	985	252
Derivatives not designated as hedging instruments | Embedded derivative - FIA
Derivative [Line Items]
Other liabilities, Notional Amount	2,639,780	2,576,033
Other liabilities, Fair Value	263,445	217,288
Derivatives not designated as hedging instruments | Embedded derivative - IUL
Derivative [Line Items]
Other liabilities, Notional Amount	247,241	233,550
Other liabilities, Fair Value	112,814	90,231
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate swaps
Derivative [Line Items]
Other liabilities, Notional Amount	350,000	350,000
Other liabilities, Fair Value	0	0
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency swaps
Derivative [Line Items]
Other liabilities, Notional Amount	117,178	117,178
Other liabilities, Fair Value	$ 1,996	$ 904

XML

OFFSETTING OF ASSETS AND LIABILITIES - Narrative (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Offsetting [Abstract]
Fair value of non-cash collateral received	$ 31,000,000	$ 45,000,000.0

XML

OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement	$ 537,775	$ 375,829
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	537,775	375,829
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	152,924	99,199
Net Amount	219,066	206,308
Free-Standing derivatives
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives subject to a master netting arrangement	428,077	263,349
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	428,077	263,349
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	152,924	99,199
Net Amount	109,368	93,828
Total derivatives, subject to a master netting arrangement or similar arrangement
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives subject to a master netting arrangement	428,077	263,349
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	428,077	263,349
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	152,924	99,199
Net Amount	109,368	93,828
Embedded derivative - Modco reinsurance treaties
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement	38	7,072
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	38	7,072
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	0	0
Net Amount	38	7,072
Embedded derivative - GLWB
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement	109,494	105,272
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	109,494	105,272
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	0	0
Net Amount	109,494	105,272
Other
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement	166	136
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	166	136
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	0	0
Net Amount	166	136
Total derivatives, not subject to a master netting arrangement or similar arrangement
Offsetting of Assets
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement	109,698	112,480
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	109,698	112,480
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received	0	0
Net Amount	$ 109,698	$ 112,480

XML

OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	$ 972,965	$ 755,461
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	972,965	755,461
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	9,289	47,856
Net Amount	797,891	637,283
Repurchase agreements
Gross Amounts of Recognized Liabilities	89,275	418,090
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	89,275	418,090
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	89,275	418,090
Total Liabilities
Gross Amounts of Recognized Liabilities	1,062,240	1,173,551
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	1,062,240	1,173,551
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	9,289	47,856
Net Amount	887,166	1,055,373
Free-Standing derivatives
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, subject to a master netting arrangement	175,074	125,519
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	175,074	125,519
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	9,289	47,856
Net Amount	0	7,341
Total derivatives, subject to a master netting arrangement or similar arrangement
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, subject to a master netting arrangement	175,074	125,519
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	175,074	125,519
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement	165,785	70,322
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	9,289	47,856
Net Amount	0	7,341
Embedded derivative - Modco reinsurance treaties
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	107,457	32,828
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	107,457	32,828
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	0	0
Net Amount	107,457	32,828
Embedded derivative - GLWB
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	313,190	289,343
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	313,190	289,343
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	0	0
Net Amount	313,190	289,343
Embedded derivative - FIA
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	263,445	217,288
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	263,445	217,288
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	0	0
Net Amount	263,445	217,288
Embedded derivative - IUL
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	112,814	90,231
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	112,814	90,231
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	0	0
Net Amount	112,814	90,231
Other
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	985	252
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	985	252
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	0	0
Net Amount	985	252
Total derivatives, not subject to a master netting arrangement or similar arrangement
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement	797,891	629,942
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	797,891	629,942
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted	0	0
Net Amount	$ 797,891	$ 629,942

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MORTGAGE LOANS - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Mortgage loans holdings	$ 7,701,465,000		$ 7,724,733,000
Mortgage loan call option period	10 years
Amount that would become due in remainder of 2019, if loans are called at their next call dates	$ 77,700,000
Amount that would become due in 2020 through 2024, if loans are called at their next call dates	837,400,000
Amount that would become due in 2025 through 2029, if loans are called at their next call dates	60,600,000
Commercial mortgage loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Mortgage loans having participation feature	727,800,000		700,600,000
Income recognized on participating mortgage loans	2,200,000	$ 7,300,000
Loans not subject to a pooling and servicing agreement which are either nonperforming or restructured	2,700,000.0
Allowance for mortgage loan credit losses	$ 1,946,000		$ 1,296,000	$ 0
Past due period at which to cease carrying accrued interest on delinquent loans	90 days
Number of days accrued interest on impaired loans (less than)	90 days
Past due period at which to initiate foreclosure proceedings (more than)	90 days
Commercial mortgage loans | Maximum
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan-to-value ratio with participating interest (as a percent)	85.00%

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MORTGAGE LOANS - Change in Allowance for Credit Losses (Details) - Commercial mortgage loans - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 1,296	$ 0
Charge offs	(350)	0
Recoveries	0	(209)
Provision	1,000	1,505
Ending balance	$ 1,946	$ 1,296

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MORTGAGE LOANS - Delinquent Loans (Details) - Commercial mortgage loans $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) loan
Delinquent loans
Commercial mortgage loans | $	$ 720	$ 2,278
Number of delinquent commercial mortgage loans | loan	3	5
30 to 59 Days Delinquent
Delinquent loans
Commercial mortgage loans | $	$ 637	$ 1,044
Number of delinquent commercial mortgage loans | loan	2	4
60 to 89 Days Delinquent
Delinquent loans
Commercial mortgage loans | $	$ 0	$ 0
Number of delinquent commercial mortgage loans | loan	0	0
Greater than 90 Days Delinquent
Delinquent loans
Commercial mortgage loans | $	$ 83	$ 1,234
Number of delinquent commercial mortgage loans | loan	1	1

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MORTGAGE LOANS - Impaired Loans (Details) - Commercial mortgage loans - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Recorded Investment
With no related allowance recorded, recorded investment	$ 83	$ 0
With an allowance recorded, recorded investment	8,331	5,684
Unpaid Principal Balance
With no related allowance recorded, unpaid principal balance	83	0
With an allowance recorded, unpaid principal balance	8,196	5,309
Related Allowance
With an allowance recorded, related allowance	1,946	1,296
Average Recorded Investment
With no related allowance recorded, average recorded investment	83	0
With an allowance recorded, average recorded investment	4,165	1,895
Interest Income Recognized
With no related allowance recorded, interest income recognized	0	0
With an allowance recorded, interest income recognized	128	267
Cash Basis Interest Income
With no related allowance recorded, cash basis interest income	0	0
With an allowance recorded, cash basis interest income	$ 156	$ 293

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MORTGAGE LOANS - Troubled Debt Restructuring (Details) - Commercial mortgage loans $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) contract	Dec. 31, 2018 USD ($) contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	0	1
Pre-Modification Outstanding Recorded Investment	$ 0	$ 2,688
Post-Modification Outstanding Recorded Investment	$ 0	$ 1,742

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GOODWILL (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 825,511,000	$ 825,511,000
Change in goodwill	$ 0

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DEBT AND OTHER OBLIGATIONS - Summary of Debt and Subordinated Debt Securities (Details) - USD ($)		3 Months Ended
	May 03, 2018	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Outstanding Principal		$ 983,513,000	$ 991,363,000
Carrying Amounts, Debt		1,083,672,000	1,101,827,000
Carrying Amounts, Subordinated debt securities		605,460,000	605,426,000
Credit Facility
Debt Instrument [Line Items]
Outstanding Principal		0	0
Carrying Amounts, Debt		0	0
Capital lease obligation
Debt Instrument [Line Items]
Outstanding Principal		2,794,000	1,319,000
Carrying Amounts, Debt		2,794,000	1,319,000
Subordinated debt securities
Debt Instrument [Line Items]
Outstanding Principal		610,000,000	610,000,000
Carrying Amounts, Subordinated debt securities		605,460,000	605,426,000
7.375% Senior Notes (2009), due 2019
Debt Instrument [Line Items]
Outstanding Principal		400,000,000	400,000,000
Carrying Amounts, Debt		$ 411,562,000	416,469,000
Stated interest rate (as a percent)		7.375%
8.45% Senior Notes (2009), due 2039
Debt Instrument [Line Items]
Outstanding Principal		$ 180,719,000	190,044,000
Carrying Amounts, Debt		273,713,000	288,547,000
Debt repurchased and subsequently extinguished		14,100,000
Par value of extinguished debt		$ 9,300,000
Stated interest rate (as a percent)		8.45%
Pre-tax gain (loss) on extinguishment of debt		$ 1,100,000
4.30% Senior Notes (2018), due 2028
Debt Instrument [Line Items]
Outstanding Principal		400,000,000	400,000,000
Carrying Amounts, Debt		$ 395,603,000	$ 395,492,000
Stated interest rate (as a percent)		4.30%	4.30%
Debt issued discount, amount			$ 1,000,000
5.35% Subordinated Debentures (2017), due 2052
Debt Instrument [Line Items]
Stated interest rate (as a percent)		5.35%
5.35% Subordinated Debentures (2017), due 2052 | Subordinated debt securities
Debt Instrument [Line Items]
Outstanding Principal		$ 500,000,000	500,000,000
Carrying Amounts, Subordinated debt securities		495,460,000	495,426,000
Deferred issuance expenses			3,700,000
3.55% Subordinated Funding Obligations (2018), due 2038 (One) | Subordinated debt securities
Debt Instrument [Line Items]
Outstanding Principal		55,000,000	55,000,000
Carrying Amounts, Subordinated debt securities		$ 55,000,000	55,000,000
Stated interest rate (as a percent)		3.55%
3.55% Subordinated Funding Obligations (2018), due 2038 (Two) | Subordinated debt securities
Debt Instrument [Line Items]
Outstanding Principal		$ 55,000,000	55,000,000
Carrying Amounts, Subordinated debt securities		$ 55,000,000	$ 55,000,000
Stated interest rate (as a percent)		3.55%
3.55% Subordinated Funding Obligations (2018), due 2038
Debt Instrument [Line Items]
Stated interest rate (as a percent)			3.55%
3.55% Subordinated Funding Obligations (2018), due 2038 | Subordinated debt securities
Debt Instrument [Line Items]
Outstanding Principal			$ 110,000,000
2015 Credit Facility
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity	$ 1,000,000,000.0
Line of credit, maximum borrowing capacity to be granted upon entity's request	$ 1,250,000,000.00
Facility fee percentage	0.125%
2015 Credit Facility | Federal Funds Rate
Debt Instrument [Line Items]
Interest rate added to the base rate (as a percent)	0.50%
2015 Credit Facility | One-Month LIBOR
Debt Instrument [Line Items]
Interest rate added to the base rate (as a percent)	1.00%
Credit Facility
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity	$ 1,000,000,000.0
Line of credit, maximum borrowing capacity to be granted upon entity's request	$ 1,500,000,000.0
Facility fee percentage	0.125%
Credit Facility | Federal Funds Rate
Debt Instrument [Line Items]
Interest rate added to the base rate (as a percent)	0.50%
Credit Facility | One-Month LIBOR
Debt Instrument [Line Items]
Interest rate added to the base rate (as a percent)	1.00%

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DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Outstanding Principal	$ 2,549,691	$ 2,574,691
Carrying Value	2,607,021	2,632,497
Golden Gate Captive Insurance Company
Debt Instrument [Line Items]
Outstanding Principal	1,843,000	1,883,000
Carrying Value	$ 1,843,000	$ 1,883,000
Year-to-Date Weighted-Avg Interest Rate	4.75%	4.75%
Golden Gate II Captive Insurance Company
Debt Instrument [Line Items]
Outstanding Principal	$ 20,600	$ 20,600
Carrying Value	$ 17,717	$ 17,703
Year-to-Date Weighted-Avg Interest Rate	5.60%	4.99%
Golden Gate V Vermont Captive Insurance Company
Debt Instrument [Line Items]
Outstanding Principal	$ 685,000	$ 670,000
Carrying Value	$ 743,981	$ 729,454
Year-to-Date Weighted-Avg Interest Rate	5.12%	5.12%
MONY Life Insurance Company
Debt Instrument [Line Items]
Outstanding Principal	$ 1,091	$ 1,091
Carrying Value	$ 2,323	$ 2,340
Year-to-Date Weighted-Avg Interest Rate	6.19%	6.19%

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DEBT AND OTHER OBLIGATIONS - Repurchase Program Borrowings (Details) - Repurchase Program Borrowings - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Fair value of securities pledged under the repurchase program	$ 92.9	$ 451.9
Secured financing liabilities	$ 89.3	$ 418.1
Average borrowing rate (as a percent)	2.54%	0.00%
Maximum balance outstanding	$ 473.3	$ 885.0
Average daily balance	$ 203.1	$ 511.4
Average daily balance, average borrowing rate (as a percent)	2.49%	1.84%
Maximum
Debt Instrument [Line Items]
Term of financing agreement	90 days

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DEBT AND OTHER OBLIGATIONS - Amount of Collateral Pledged for Repurchase Agreements and Securities Lending Transactions, Grouped by Asset Class (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Initial collateral (as a percent)	102.00%
Securities lending transactions	$ 88,989	$ 72,176
Fair value of collateral	94,700
Obligation to return securities	94,700
Repurchase agreements and repurchase-to-maturity transactions	92,872	451,895
Total securities	181,861	524,071
Overnight and Continuous
Debt Instrument [Line Items]
Securities lending transactions	88,989	72,176
Repurchase agreements and repurchase-to-maturity transactions	83,512	433,182
Total securities	172,501	505,358
Up to 30 days
Debt Instrument [Line Items]
Securities lending transactions	0	0
Repurchase agreements and repurchase-to-maturity transactions	9,360	18,713
Total securities	9,360	18,713
30-90 days
Debt Instrument [Line Items]
Securities lending transactions	0	0
Repurchase agreements and repurchase-to-maturity transactions	0	0
Total securities	0	0
Greater Than 90 days
Debt Instrument [Line Items]
Securities lending transactions	0	0
Repurchase agreements and repurchase-to-maturity transactions	0	0
Total securities	0	0
U.S. Treasury and agency securities
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions	92,872	451,895
U.S. Treasury and agency securities | Overnight and Continuous
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions	83,512	433,182
U.S. Treasury and agency securities | Up to 30 days
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions	9,360	18,713
U.S. Treasury and agency securities | 30-90 days
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions	0	0
U.S. Treasury and agency securities | Greater Than 90 days
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions	0	0
Mortgage loans
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions		0
Mortgage loans | Overnight and Continuous
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions		0
Mortgage loans | Up to 30 days
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions		0
Mortgage loans | 30-90 days
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions		0
Mortgage loans | Greater Than 90 days
Debt Instrument [Line Items]
Repurchase agreements and repurchase-to-maturity transactions		0
Corporate securities
Debt Instrument [Line Items]
Securities lending transactions	87,234
Corporate securities | Overnight and Continuous
Debt Instrument [Line Items]
Securities lending transactions	87,234
Corporate securities | Up to 30 days
Debt Instrument [Line Items]
Securities lending transactions	0
Corporate securities | 30-90 days
Debt Instrument [Line Items]
Securities lending transactions	0
Corporate securities | Greater Than 90 days
Debt Instrument [Line Items]
Securities lending transactions	0
Fixed maturities
Debt Instrument [Line Items]
Securities lending transactions		71,285
Fixed maturities | Overnight and Continuous
Debt Instrument [Line Items]
Securities lending transactions		71,285
Fixed maturities | Up to 30 days
Debt Instrument [Line Items]
Securities lending transactions		0
Fixed maturities | 30-90 days
Debt Instrument [Line Items]
Securities lending transactions		0
Fixed maturities | Greater Than 90 days
Debt Instrument [Line Items]
Securities lending transactions		0
Equity securities
Debt Instrument [Line Items]
Securities lending transactions		891
Equity securities | Overnight and Continuous
Debt Instrument [Line Items]
Securities lending transactions		891
Equity securities | Up to 30 days
Debt Instrument [Line Items]
Securities lending transactions		0
Equity securities | 30-90 days
Debt Instrument [Line Items]
Securities lending transactions		0
Equity securities | Greater Than 90 days
Debt Instrument [Line Items]
Securities lending transactions		$ 0
Other government related securities
Debt Instrument [Line Items]
Securities lending transactions	1,755
Other government related securities | Overnight and Continuous
Debt Instrument [Line Items]
Securities lending transactions	1,755
Other government related securities | Up to 30 days
Debt Instrument [Line Items]
Securities lending transactions	0
Other government related securities | 30-90 days
Debt Instrument [Line Items]
Securities lending transactions	0
Other government related securities | Greater Than 90 days
Debt Instrument [Line Items]
Securities lending transactions	$ 0

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COMMITMENTS AND CONTINGENCIES (Details)	Mar. 31, 2019 USD ($) city	Dec. 31, 2013 USD ($)
Commitments and contingencies
Outstanding caims receivable	$ 13,400,000
Reinsurance receivable	106,800,000
Statutory reserve credit	127,200,000
Indemnification Agreement
Commitments and contingencies
Indemnification agreement with certain officers, maximum	$ 10,000,000
Administrative and marketing office space
Commitments and contingencies
Number of cities in which properties are leased | city	17
Building contiguous to home office
Commitments and contingencies
Approximate purchase price of property		$ 75,000,000
Minimum | Administrative and marketing office space
Commitments and contingencies
Operating lease term	1 year
Maximum | Administrative and marketing office space
Commitments and contingencies
Operating lease term	10 years

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EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Qualified Pension Plan | Minimum
EMPLOYEE BENEFIT PLANS
Adjusted funding target percentage to be maintained	80.00%
Qualified Pension Plan | Pension Plan
EMPLOYEE BENEFIT PLANS
Service cost — benefits earned during the period	$ 3,114	$ 3,441
Interest cost on projected benefit obligation	2,778	2,397
Expected return on plan assets	(4,463)	(4,026)
Amortization of prior service cost	0	0
Amortization of actuarial loss	0	0
Total net periodic benefit costs	1,429	1,812
Nonqualified Excess Pension Plan | Pension Plan
EMPLOYEE BENEFIT PLANS
Service cost — benefits earned during the period	285	387
Interest cost on projected benefit obligation	371	359
Expected return on plan assets	0	0
Amortization of prior service cost		0
Amortization of actuarial loss	74	265
Total net periodic benefit costs	$ 730	$ 1,011

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 5,767,734	$ 7,127,199	$ 7,127,199
Ending Balance	6,997,027	6,392,342	5,767,734
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(1,425,766)	12,696	12,696
Other comprehensive income (loss) before reclassifications	1,134,365	(1,425,929)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	8,792	(20,751)
Amounts reclassified from accumulated other comprehensive income (loss)	(1,340)	18,770
Cumulative effect adjustments	0	(10,552)
Ending Balance	(283,949)	(574,300)	(1,425,766)
Unrealized Gains and Losses on Investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(1,410,277)	25,874	25,874
Other comprehensive income (loss) before reclassifications	1,136,331	(1,420,499)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	8,792	(20,751)
Amounts reclassified from accumulated other comprehensive income (loss)	(1,560)	15,651
Cumulative effect adjustments	0	(10,552)
Ending Balance	(266,714)		(1,410,277)
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income	199,100		613,400
Accumulated Gain and Loss Derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(7)	747	747
Other comprehensive income (loss) before reclassifications		(1,884)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings		0
Amounts reclassified from accumulated other comprehensive income (loss)		1,130
Cumulative effect adjustments		0
Ending Balance			(7)
Accumulated Gain and Loss Derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss) before reclassifications	(1,966)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	0
Amounts reclassified from accumulated other comprehensive income (loss)	220
Cumulative effect adjustments	0
Ending Balance	(1,753)
Minimum Pension Liability Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(15,482)	(13,925)	(13,925)
Other comprehensive income (loss) before reclassifications	0	(3,546)
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	0	0
Amounts reclassified from accumulated other comprehensive income (loss)	0	1,989
Cumulative effect adjustments	0	$ 0
Ending Balance	$ (15,482)		$ (15,482)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reclassifications out of accumulated other comprehensive income (loss)
Benefits and settlement expenses, net of reinsurance ceded(1)	$ (972,766)	$ (786,802)
Net impairment losses recognized in earnings	(3,142)	(3,645)
Tax (expense) benefit	(36,631)	(17,686)
Net income	138,284	74,112
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains and losses on derivative instruments
Reclassifications out of accumulated other comprehensive income (loss)
Benefits and settlement expenses, net of reinsurance ceded(1)	(278)
Tax (expense) benefit	58
Net income	(220)
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains and losses on derivative instruments
Reclassifications out of accumulated other comprehensive income (loss)
Benefits and settlement expenses, net of reinsurance ceded(1)		(113)
Tax (expense) benefit		24
Net income		(89)
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains and losses on available-for-sale securities
Reclassifications out of accumulated other comprehensive income (loss)
Realized investment gains (losses): All other investments	5,117	2,783
Net impairment losses recognized in earnings	(3,142)	(3,645)
Tax (expense) benefit	(415)	181
Net income	$ 1,560	$ (681)

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INCOME TAXES - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate	20.90%	19.30%
Reduction in unrecognized tax benefits	$ 0

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OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Summarized financial information for the company's segments
Total revenues	$ 1,414,030	$ 1,165,832
Pre-tax Adjusted Operating Income (Loss)	142,670	92,821
Realized (losses) gains on investments and derivatives	32,245	(1,023)
Income before income tax	174,915	91,798
Income tax expense	(36,631)	(17,686)
Net income	138,284	74,112
Adjusted operating income tax (expense) benefit	(29,859)	(18,044)
After-tax adjusted operating income	112,811	74,777
Income tax benefit (expense) on adjustments	(6,772)	358
Realized investment (losses) gains:
Derivative financial instruments	(119,671)	78,059
All other investments	129,590	(87,599)
Net impairment losses recognized in earnings	(3,142)	(3,645)
Less: related amortization	(4,361)	9,156
Less: VA GLWB economic cost	(21,107)	(21,318)
Operating Segment Assets
Investments and other assets	88,048,702		$ 85,476,658
DAC and VOBA	2,986,686		3,023,154
Other intangibles	601,603		613,431
Goodwill	825,511		825,511
Total assets	92,462,502		89,938,754
Life Marketing
Summarized financial information for the company's segments
Total revenues	457,340	434,916
Pre-tax Adjusted Operating Income (Loss)	1,234	(17,849)
Operating Segment Assets
Investments and other assets	15,038,044		14,575,702
DAC and VOBA	1,496,282		1,499,386
Other intangibles	258,010		262,758
Goodwill	215,254		215,254
Total assets	17,007,590		16,553,100
Acquisitions
Summarized financial information for the company's segments
Total revenues	609,942	379,094
Pre-tax Adjusted Operating Income (Loss)	74,912	55,520
Operating Segment Assets
Investments and other assets	31,805,017		31,859,520
DAC and VOBA	431,788		458,977
Other intangibles	32,776		31,975
Goodwill	23,862		23,862
Total assets	32,293,443		32,374,334
Annuities
Summarized financial information for the company's segments
Total revenues	139,217	150,713
Pre-tax Adjusted Operating Income (Loss)	54,216	40,531
Operating Segment Assets
Investments and other assets	20,690,159		20,199,597
DAC and VOBA	885,926		889,697
Other intangibles	153,452		156,785
Goodwill	343,247		343,247
Total assets	22,072,784		21,589,326
Stable Value Products
Summarized financial information for the company's segments
Total revenues	59,579	53,868
Pre-tax Adjusted Operating Income (Loss)	22,239	29,080
Operating Segment Assets
Investments and other assets	5,401,470		5,107,334
DAC and VOBA	5,249		6,121
Other intangibles	7,222		7,389
Goodwill	113,924		113,924
Total assets	5,527,865		5,234,768
Asset Protection
Summarized financial information for the company's segments
Total revenues	76,198	76,375
Pre-tax Adjusted Operating Income (Loss)	9,743	6,218
Operating Segment Assets
Investments and other assets	1,025,637		1,019,297
DAC and VOBA	167,441		168,973
Other intangibles	120,046		122,590
Goodwill	129,224		129,224
Total assets	1,442,348		1,440,084
Corporate and Other
Summarized financial information for the company's segments
Total revenues	71,754	70,866
Pre-tax Adjusted Operating Income (Loss)	(19,674)	$ (20,679)
Operating Segment Assets
Investments and other assets	14,088,375		12,715,208
DAC and VOBA	0		0
Other intangibles	30,097		31,934
Goodwill	0		0
Total assets	$ 14,118,472		$ 12,747,142

XML

Label	Element	Value
AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (10,552,000)