FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2013

FAIR VALUE OF FINANCIAL INSTRUMENTS

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 September 30, 2013:

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,463,989	$	38	$	1,464,027
Commercial mortgage-backed securities	—		911,607		—		911,607
Other asset-backed securities	—		328,393		548,771		877,164
U.S. government-related securities	1,063,584		149,852		—		1,213,436
State, municipalities, and political subdivisions	—		1,296,047		4,330		1,300,377
Other government-related securities	—		41,128		—		41,128
Corporate bonds	107		19,545,102		187,488		19,732,697
Total fixed maturity securities - available-for-sale	1,063,691		23,736,118		740,627		25,540,436
Fixed maturity securities - trading
Residential mortgage-backed securities	—		308,356		—		308,356
Commercial mortgage-backed securities	—		169,046		—		169,046
Other asset-backed securities	—		90,726		170,967		261,693
U.S. government-related securities	198,717		5,147		—		203,864
State, municipalities, and political subdivisions	—		262,036		—		262,036
Other government-related securities	—		57,525		—		57,525
Corporate bonds	—		1,515,167		5,092		1,520,259
Total fixed maturity securities - trading	198,717		2,408,003		176,059		2,782,779
Total fixed maturity securities	1,262,408		26,144,121		916,686		28,323,215
Equity securities	348,472		43,341		69,418		461,231
Other long-term investments(1)	58,567		54,600		153,563		266,730
Short-term investments	213,924		2,300		—		216,224
Total investments	1,883,371		26,244,362		1,139,667		29,267,400
Cash	354,449		—		—		354,449
Other assets	10,086		—		—		10,086
Assets related to separate accounts
Variable annuity	11,921,925		—		—		11,921,925
Variable universal life	663,380		—		—		663,380
Total assets measured at fair value on a recurring basis	$	14,833,211	$	26,244,362	$	1,139,667	$	42,217,240
Liabilities:
Annuity account balances(2)	$	—	$	—	$	110,590	$	110,590
Other liabilities (1)	11,304		136,398		286,530		434,232
Total liabilities measured at fair value on a recurring basis	$	11,304	$	136,398	$	397,120	$	544,822

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

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, 2012:

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,839,326	$	4	$	1,839,330
Commercial mortgage-backed securities	—		869,823		—		869,823
Other asset-backed securities	—		378,870		596,143		975,013
U.S. government-related securities	909,988		259,955		—		1,169,943
State, municipalities, and political subdivisions	—		1,439,378		4,335		1,443,713
Other government-related securities	—		80,767		20,011		100,778
Corporate bonds	207		20,213,952		167,892		20,382,051
Total fixed maturity securities - available-for-sale	910,195		25,082,071		788,385		26,780,651
Fixed maturity securities - trading
Residential mortgage-backed securities	—		357,803		—		357,803
Commercial mortgage-backed securities	—		171,073		—		171,073
Other asset-backed securities	—		87,395		70,535		157,930
U.S. government-related securities	304,704		1,169		—		305,873
State, municipalities, and political subdivisions	—		278,898		—		278,898
Other government-related securities	—		63,444		—		63,444
Corporate bonds	—		1,672,172		115		1,672,287
Total fixed maturity securities - trading	304,704		2,631,954		70,650		3,007,308
Total fixed maturity securities	1,214,899		27,714,025		859,035		29,787,959
Equity securities	307,252		35,116		69,418		411,786
Other long-term investments (1)	23,639		58,134		31,591		113,364
Short-term investments	215,320		2,492		—		217,812
Total investments	1,761,110		27,809,767		960,044		30,530,921
Cash	368,801		—		—		368,801
Other assets	8,239		—		—		8,239
Assets related to separate accounts
Variable annuity	9,601,417		—		—		9,601,417
Variable universal life	562,817		—		—		562,817
Total assets measured at fair value on a recurring basis	$	12,302,384	$	27,809,767	$	960,044	$	41,072,195
Liabilities:
Annuity account balances (2)	$	—	$	—	$	129,468	$	129,468
Other liabilities (1)	19,187		27,250		611,437		657,874
Total liabilities measured at fair value on a recurring basis	$	19,187	$	27,250	$	740,905	$	787,342

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

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

	Fair Value
	As of		Valuation	Unobservable	Range
	September 30, 2013		Technique	Input	(Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	548,771	Discounted cash flow	Liquidity premium	0.69% - 1.32% (0.80%)
				Paydown rate	8.37% - 17.50% (12.45%)
Corporate bonds	192,580		Discounted cash flow	Spread over treasury	0.32% - 6.75% (2.89%)
Embedded derivatives - GMWB(1)		95,058	Actuarial cash flow model	Mortality	49% to 80% of 1994 MGDB table
				Lapse	0% - 24%, depending on product/duration/funded status of guarantee
				Utilization	97% - 103%
				Nonperformance risk	0.19% - 1.31%
Liabilities:
Annuity account balances(2)	$	110,590	Actuarial cash flow model	Asset earned rate	5.37%
				Expenses	$88 - $102 per policy
				Withdrawal rate	2.20%
				Mortality	49% to 80% of 1994 MGDB table
				Lapse	2.2% - 33.0%, depending on duration/surrender charge period
				Return on assets	1.50% - 1.85% depending on surrender charge period
				Nonperformance risk	0.19% - 1.31%
Embedded derivative - FIA	9,199		Actuarial cash flow model	Expenses	$83 - $97 per policy
				Withdrawal rate	1.1% - 4.5% depending on duration
					and tax qualification
				Mortality	49% to 80% of 1994 MGDB table
				Lapse	2.5% - 40.0%, depending on duration/surrender charge period
				Nonperformance risk	0.19% - 1.31%

(1)The fair value for the GMWB embedded derivative is presented as a net asset for the purposes of this chart. Excludes modified coinsurance arrangements.

(2)Represents account balance liabilities related to fixed indexed annuities.

	Fair Value
	As of		Valuation	Unobservable	Range
	December 31, 2012		Technique	Input	(Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	596,143	Discounted cash flow	Liquidity premium	0.72% - 1.68% (1.29%)
				Paydown rate	8.51% - 18.10% (11.40%)
Other government-related securities	20,011		Discounted cash flow	Spread over treasury	(0.30)%
Corporate bonds	168,007		Discounted cash flow	Spread over treasury	0.92% - 7.75% (3.34%)
Liabilities:
Embedded derivatives - GMWB(1)	$	169,041	Actuarial cash flow model	Mortality	57% of 1994 MGDB table
				Lapse	0% - 24%, depending on product/duration/funded status of guarantee
				Utilization	93% - 100%
				Nonperformance risk	0.09% - 1.34%
Annuity account balances(2)	129,468		Actuarial cash flow model	Asset earned rate	5.81%
				Expenses	$88 - $108 per policy
				Withdrawal rate	2.20%
				Mortality	57% of 1994 MGDB table
				Lapse	2.2% - 45.0%, depending on duration/surrender charge period
				Return on assets	1.50% - 1.85% depending on surrender charge period
				Nonperformance risk	0.09% - 1.34%

(1)The fair value for the GMWB embedded derivative is presented as a net liability for the purposes of this chart. Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

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 September 30, 2013, for which the Company has used significant unobservable inputs (Level 3):

																														Total
																														Gains (losses)
			Total				Total																							included in
			Realized and Unrealized				Realized and Unrealized																							Earnings
			Gains				Losses																							related to
					Included in					Included in																				Instruments
					Other					Other												Transfers								still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of						Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3			Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	14,062	$	—	$	1,310	$	—		$	—		$	—	$	(12	)	$	—	$	—	$	(15,333	)	$	11		$	38	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	576,396		—		52		—			(26,969		)	11,769		(12,085		)	—		—		—			(392		)	548,771		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	4,330		—		—		—			—			—		—			—		—		—			—			4,330		—
Other government-related securities	20,000		—		1		—			—			—		(20,000		)	—		—		—			(1		)	—		—
Corporate bonds	194,895		—		1,662		—			(3,513		)	11,002		(13,558		)	—		—		(3,385		)	385			187,488		—
Total fixed maturity securities - available-for-sale	809,683		—		3,025		—			(30,482		)	22,771		(45,655		)	—		—		(18,718		)	3			740,627		—
Fixed maturity securities - trading
Residential mortgage-backed securities	1,582		—		—		(1		)	—			—		(72		)	—		—		(1,494		)	(15		)	—		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	168,851		3,167		—		(1,080		)	—			16,394		(16,568		)	—		—		—			203			170,967		1,596
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	3,500		—		—		(123		)	—			—		—			—		—		(3,377		)	—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	5,092		—		—		(4		)	—			—		—			—		—		—			4			5,092		(4		)
Total fixed maturity securities - trading	179,025		3,167		—		(1,208		)	—			16,394		(16,640		)	—		—		(4,871		)	192			176,059		1,592
Total fixed maturity securities	988,708		3,167		3,025		(1,208		)	(30,482		)	39,165		(62,295		)	—		—		(23,589		)	195			916,686		1,592
Equity securities	69,418		—		—		—			—			—		—			—		—		—			—			69,418		—
Other long-term investments(1)	100,072		53,791		—		(300		)	—			—		—			—		—		—			—			153,563		53,491
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	1,158,198		56,958		3,025		(1,508		)	(30,482		)	39,165		(62,295		)	—		—		(23,589		)	195			1,139,667		55,083
Total assets measured at fair value on a recurring basis	$	1,158,198	$	56,958	$	3,025	$	(1,508	)	$	(30,482	)	$	39,165	$	(62,295	)	$	—	$	—	$	(23,589	)	$	195		$	1,139,667	$	55,083
Liabilities:
Annuity account balances(2)	$	114,614	$	—	$	—	$	(2,472	)	$	—		$	—	$	—		$	46	$	6,542	$	—		$	—		$	110,590	$	—
Other liabilities(1)	335,581		72,905		—		(23,854		)	—			—		—			—		—		—			—			286,530		49,051
Total liabilities measured at fair value on a recurring basis	$	450,195	$	72,905	$	—	$	(26,326	)	$	—		$	—	$	—		$	46	$	6,542	$	—		$	—		$	397,120	$	49,051

(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 September 30, 2012, for which the Company has used significant unobservable inputs (Level 3):

																														Total
																														Gains (losses)
			Total				Total																							included in
			Realized and Unrealized				Realized and Unrealized																							Earnings
			Gains				Losses																							related to
					Included in					Included in																				Instruments
					Other					Other												Transfers								still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of						Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3			Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	4	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	4	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	584,641		45		11,462		—			(1,157		)	—		(5,200		)	—		—		—			(153		)	589,638		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	4,340		—		—		—			—			—		—			—		—		—			—			4,340		—
Other government-related securities	20,020		—		—		—			(11		)	—		—			—		—		—			(4		)	20,005		—
Corporate bonds	172,181		—		5,349		—			(221		)	—		(2,090		)	—		—		(26,802		)	122			148,539		—
Total fixed maturity securities - available-for-sale	781,186		45		16,811		—			(1,389		)	—		(7,290		)	—		—		(26,802		)	(35		)	762,526		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	65,059		2,972		—		(148		)	—			7,208		(1,442		)	—		—		—			413			74,062		2,823
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	114		1		—		—			—			—		—			—		—		—			—			115		2
Total fixed maturity securities - trading	65,173		2,973		—		(148		)	—			7,208		(1,442		)	—		—		—			413			74,177		2,825
Total fixed maturity securities	846,359		3,018		16,811		(148		)	(1,389		)	7,208		(8,732		)	—		—		(26,802		)	378			836,703		2,825
Equity securities	73,651		8		—		—			(147		)	—		(4,295		)	—		—		—			—			69,217		—
Other long-term investments(1)	18,415		2,719		—		(34		)	—			—		—			—		—		—			—			21,100		2,685
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	938,425		5,745		16,811		(182		)	(1,536		)	7,208		(13,027		)	—		—		(26,802		)	378			927,020		5,510
Total assets measured at fair value on a recurring basis	$	938,425	$	5,745	$	16,811	$	(182	)	$	(1,536	)	$	7,208	$	(13,027	)	$	—	$	—	$	(26,802	)	$	378		$	927,020	$	5,510
Liabilities:
Annuity account balances(2)	$	134,597	$	—	$	—	$	(5,766	)	$	—		$	—	$	—		$	217	$	6,011	$	—		$	—		$	134,569	$	—
Other liabilities(1)	516,587		11,016		—		(112,779		)	—			—		—			—		—		—			—			618,350		(101,763		)
Total liabilities measured at fair value on a recurring basis	$	651,184	$	11,016	$	—	$	(118,545	)	$	—		$	—	$	—		$	217	$	6,011	$	—		$	—		$	752,919	$	(101,763	)

(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 nine months ended September 30, 2013, for which the Company has used significant unobservable inputs (Level 3):

																														Total
																														Gains (losses)
			Total				Total																							included in
			Realized and Unrealized				Realized and Unrealized																							Earnings
			Gains				Losses																							related to
					Included in					Included in																				Instruments
					Other					Other												Transfers								still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of						Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3			Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	4	$	—	$	1,310	$	—		$	(337	)	$	14,349	$	(12	)	$	—	$	—	$	(15,287	)	$	11		$	38	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	596,143		—		43,808		—			(54,517		)	24,931		(62,471		)	—		—		1,227			(350		)	548,771		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	4,335		—		—		—			—			—		(5		)	—		—		—			—			4,330		—
Other government-related securities	20,011		—		2		—			(3		)	—		(20,000		)	—		—		—			(10		)	—		—
Corporate bonds	167,892		116		2,673		—			(13,559		)	29,277		(58,742		)	—		—		58,945			886			187,488		—
Total fixed maturity securities - available-for-sale	788,385		116		47,793		—			(68,416		)	68,557		(141,230		)	—		—		44,885			537			740,627		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		(1		)	—			1,582		(72		)	—		—		(1,494		)	(15		)	—		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	70,535		7,964		—		(3,949		)	—			122,224		(29,344		)	—		—		2,210			1,327			170,967		4,814
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	—		—		—		(123		)	—			3,500		—			—		—		(3,377		)	—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	115		1		—		(27		)	—			—		(17		)	—		—		5,013			7			5,092		(4		)
Total fixed maturity securities - trading	70,650		7,965		—		(4,100		)	—			127,306		(29,433		)	—		—		2,352			1,319			176,059		4,810
Total fixed maturity securities	859,035		8,081		47,793		(4,100		)	(68,416		)	195,863		(170,663		)	—		—		47,237			1,856			916,686		4,810
Equity securities	69,418		—		—		—			—			—		—			—		—		—			—			69,418		—
Other long-term investments(1)	31,591		122,643		—		(671		)	—			—		—			—		—		—			—			153,563		121,972
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	960,044		130,724		47,793		(4,771		)	(68,416		)	195,863		(170,663		)	—		—		47,237			1,856			1,139,667		126,782
Total assets measured at fair value on a recurring basis	$	960,044	$	130,724	$	47,793	$	(4,771	)	$	(68,416	)	$	195,863	$	(170,663	)	$	—	$	—	$	47,237		$	1,856		$	1,139,667	$	126,782
Liabilities:
Annuity account balances(2)	$	129,468	$	—	$	—	$	(6,159	)	$	—		$	—	$	—		$	247	$	25,284	$	—		$	—		$	110,590	$	—
Other liabilities(1)	611,437		377,398		—		(52,491		)	—			—		—			—		—		—			—			286,530		324,907
Total liabilities measured at fair value on a recurring basis	$	740,905	$	377,398	$	—	$	(58,650	)	$	—		$	—	$	—		$	247	$	25,284	$	—		$	—		$	397,120	$	324,907

(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 nine months ended September 30, 2012, for which the Company has used significant unobservable inputs (Level 3):

																													Total
																													Gains (losses)
			Total				Total																						included in
			Realized and Unrealized				Realized and Unrealized																						Earnings
			Gains				Losses																						related to
					Included in					Included in																			Instruments
					Other					Other												Transfers							still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of					Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3		Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	7	$	—	$	—	$	—		$	—		$	—	$	(3	)	$	—	$	—	$	—	$	—		$	4	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	614,813		339		15,981		—			(22,055		)	—		(19,050		)	—		—		—		(390		)	589,638		—
U.S. government-related securities	15,000		—		—		—			(1		)	—		(15,000		)	—		—		—		1			—		—
States, municipals, and political subdivisions	69		—		—		—			—			4,275		(4		)	—		—		—		—			4,340		—
Other government-related securities	—		—		18		—			(27		)	20,023		—			—		—		—		(9		)	20,005		—
Corporate bonds	119,601				7,198		—			(2,131		)	4		(4,185		)	—		—		27,810		242			148,539		—
Total fixed maturity securities - available-for-sale	749,490		339		23,197		—			(24,214		)	24,302		(38,242		)	—		—		27,810		(156		)	762,526		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	28,343		3,450		—		(905		)	—			48,255		(6,516		)	—		—		—		1,435			74,062		2,545
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
States, municipals and political subdivisions	—		—		—		—			—			—		—			—		—		—		—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Corporate bonds	—		1		—		—			—			1		—			—		—		113		—			115		10
Total fixed maturity securities - trading	28,343		3,451		—		(905		)	—			48,256		(6,516		)	—		—		113		1,435			74,177		2,555
Total fixed maturity securities	777,833		3,790		23,197		(905		)	(24,214		)	72,558		(44,758		)	—		—		27,923		1,279			836,703		2,555
Equity securities	80,586		8		660		—			(1,096		)	4		(4,295		)	—		—		—		(6,650		)	69,217		—
Other long-term investments(1)	12,703		15,792		—		(7,395		)	—			—		—			—		—		—		—			21,100		8,397
Short-term investments	—		—		—		—			—			—		—			—		—		—		—			—		—
Total investments	871,122		19,590		23,857		(8,300		)	(25,310		)	72,562		(49,053		)	—		—		27,923		(5,371		)	927,020		10,952
Total assets measured at fair value on a recurring basis	$	871,122	$	19,590	$	23,857	$	(8,300	)	$	(25,310	)	$	72,562	$	(49,053	)	$	—	$	—	$	27,923	$	(5,371	)	$	927,020	$	10,952
Liabilities:
Annuity account balances(2)	$	136,462	$	—	$	—	$	(9,983	)	$	—		$	—	$	—		$	645	$	12,521	$	—	$	—		$	134,569	$	—
Other liabilities(1)	437,613		67,565		—		(248,302		)	—			—		—			—		—		—		—			618,350		(180,737		)
Total liabilities measured at fair value on a recurring basis	$	574,075	$	67,565	$	—	$	(258,285	)	$	—		$	—	$	—		$	645	$	12,521	$	—	$	—		$	752,919	$	(180,737	)

(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

		As of
		September 30, 2013				December 31, 2012
	Fair Value	Carrying				Carrying
	Level	Amounts		Fair Values		Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	4,794,924	$	5,287,854	$	4,950,201	$	5,725,382
Policy loans	3	856,333		856,333		865,391		865,391
Fixed maturities, held-to-maturity(1)	3	350,000		341,797		300,000		319,163
Liabilities:
Stable value product account balances	3	$	2,531,262	$	2,535,865	$	2,510,559	$	2,534,094
Annuity account balances	3	10,431,938		10,074,996		10,658,463		10,525,702
Debt:
Bank borrowings	3	$	350,000	$	350,000	$	50,000	$	50,000
Senior Notes	2	1,100,000		1,292,066		1,350,000		1,584,438
Subordinated debt securities	2	540,593		502,628		540,593		556,524
Non-recourse funding obligations(2)	3	619,900		517,180		586,000		481,056

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

(1) Security purchased from unconsolidated subsidiary, Red Mountain LLC.

(2) Of this carrying amount, $350 million, fair value of $325.1 million, as of September 30, 2013, and $300 million, fair value of $297.6 million, as of December 31, 2012, relates to non-recourse funding obligations issued by Golden Gate V.