INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:



	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(3)
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	138,696	$	8,087	$	407	$	146,376	$	0
Obligations of U.S. states and their political subdivisions	547,351		51,186		132		598,405		0
Foreign government bonds	103,613		8,071		204		111,480		0
Public utilities	701,194		73,852		3,103		771,943		0
Redeemable preferred stock	4,836		1,097		221		5,712		0
All other U.S. public corporate securities	1,728,113		150,646		5,967		1,872,792		(241		)
All other U.S. private corporate securities	681,011		33,870		2,853		712,028		(236		)
All other foreign public corporate securities	202,192		13,617		1,144		214,665		0
All other foreign private corporate securities	574,993		19,242		15,815		578,420		0
Asset-backed securities(1)	189,769		4,896		618		194,047		(2,535		)
Commercial mortgage-backed securities	321,990		16,143		28		338,105		0
Residential mortgage-backed securities(2)	82,020		5,445		22		87,443		(284		)
Total fixed maturities, available-for-sale	$	5,275,778	$	386,152	$	30,514	$	5,631,416	$	(3,296	)
Equity securities, available-for-sale
Common stocks:
Public utilities	$	66	$	2	$	31	$	37
Industrial, miscellaneous & other	0		121		0		121
Mutual funds	19,318		778		152		19,944
Non-redeemable preferred stocks	0		0		0		0
Total equity securities, available-for-sale	$	19,384	$	901	$	183	$	20,102


(1)	Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.


(2)	Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.


(3)	Represents the amount of OTTI losses in Accumulated Other Comprehensive Income ("AOCI"), which were not included in earnings. Amount excludes $8 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.



	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(3)
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	87,107	$	7,170	$	228	$	94,049	$	0
Obligations of U.S. states and their political subdivisions	602,508		24,219		1,958		624,769		0
Foreign government bonds	70,107		3,094		2,791		70,410		0
Public utilities	790,038		30,862		18,402		802,498		0
Redeemable preferred stock	5,316		1,530		145		6,701		0
All other U.S. public corporate securities	2,138,358		81,905		61,142		2,159,121		(217		)
All other U.S. private corporate securities	1,085,345		26,299		13,963		1,097,681		0
All other foreign public corporate securities	270,063		8,230		6,508		271,785		0
All other foreign private corporate securities	784,283		9,933		42,528		751,688		0
Asset-backed securities(1)	431,578		6,203		2,650		435,131		(3,056		)
Commercial mortgage-backed securities	396,160		10,614		2,429		404,345		0
Residential mortgage-backed securities(2)	114,943		7,876		65		122,754		(690		)
Total fixed maturities, available-for-sale	$	6,775,806	$	217,935	$	152,809	$	6,840,932	$	(3,963	)
Equity securities, available-for-sale
Common stocks:
Public utilities	$	66	$	2	$	29	$	39
Industrial, miscellaneous & other	0		165		0		165
Mutual funds	54,543		256		3,030		51,769
Non-redeemable preferred stocks	0		0		0		0
Total equity securities, available-for-sale	$	54,609	$	423	$	3,059	$	51,973


(1)	Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.


(2)	Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.


(3)	Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $9 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

The following tables show the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:



	September 30, 2016
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	47,375	$	407	$	0	$	0	$	47,375	$	407
Obligations of U.S. states and their political subdivisions	11,621		132		0		0		11,621		132
Foreign government bonds	13,702		73		1,891		131		15,593		204
Public utilities	59,792		456		22,198		2,647		81,990		3,103
Redeemable preferred stock	651		65		0		156		651		221
All other U.S. public corporate securities	82,559		798		79,597		5,169		162,156		5,967
All other U.S. private corporate securities	30,771		2,316		17,297		537		48,068		2,853
All other foreign public corporate securities	20,145		499		7,903		645		28,048		1,144
All other foreign private corporate securities	85,683		5,551		84,746		10,264		170,429		15,815
Asset-backed securities	21,514		428		54,378		190		75,892		618
Commercial mortgage-backed securities	10,088		10		2,350		18		12,438		28
Residential mortgage-backed securities	0		0		1,671		22		1,671		22
Total	$	383,901	$	10,735	$	272,031	$	19,779	$	655,932	$	30,514
Equity securities, available-for-sale	$	0	$	0	$	2,934	$	183	$	2,934	$	183



	December 31, 2015
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	5,985	$	228	$	0	$	0	$	5,985	$	228
Obligations of U.S. states and their political subdivisions	77,756		1,958		0		0		77,756		1,958
Foreign government bonds	44,854		1,940		1,813		851		46,667		2,791
Public utilities	323,086		13,151		26,094		5,251		349,180		18,402
Redeemable preferred stock	0		145		0		0		0		145
All other U.S. public corporate securities	802,158		49,343		61,110		11,799		863,268		61,142
All other U.S. private corporate securities	323,218		12,476		17,103		1,487		340,321		13,963
All other foreign public corporate securities	121,662		5,098		6,079		1,410		127,741		6,508
All other foreign private corporate securities	284,191		14,089		154,791		28,439		438,982		42,528
Asset-backed securities	249,084		1,565		93,675		1,085		342,759		2,650
Commercial mortgage-backed securities	129,765		2,350		4,221		79		133,986		2,429
Residential mortgage-backed securities	18,435		59		1,519		6		19,954		65
Total	$	2,380,194	$	102,402	$	366,405	$	50,407	$	2,746,599	$	152,809
Equity securities, available-for-sale	$	35,869	$	2,339	$	9,281	$	720	$	45,150	$	3,059

The gross unrealized losses on fixed maturity securities as of September 30, 2016 and December 31, 2015 were composed of $22.6 million and $133.6 million, respectively, related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $7.9 million and $19.2 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of September 30, 2016, the $19.8 million of gross unrealized losses of twelve months or more were concentrated in the energy, utility and communication sectors of the Company's corporate securities. As of December 31, 2015, the $50.4 million of gross unrealized losses of twelve months or more were concentrated in the energy, consumer non-cyclical, utility and finance sectors of the Company's corporate securities. In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, the Company concluded that an adjustment to earnings for OTTI for these securities was not warranted at September 30, 2016 or December 31, 2015. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to general credit spread widening and foreign currency exchange rate movements. As of September 30, 2016, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis.

As of September 30, 2016, $0.0 million of the gross unrealized losses related to equity securities represented declines in value of greater than 20%, none of which had been in that position for less than six months. As of December 31, 2015, none of the gross unrealized losses related to equity securities represented declines in value of greater than 20%. In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, the Company concluded that an adjustment for OTTI for these equity securities was not warranted at September 30, 2016 or December 31, 2015.

The amortized cost and fair value of fixed maturities by contractual maturities at September 30, 2016, are as follows:



	Available-for-Sale
	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	271,210	$	271,737
Due after one year through five years	694,209		725,882
Due after five years through ten years	965,153		994,940
Due after ten years	2,751,427		3,019,262
Asset-backed securities	189,769		194,047
Commercial mortgage-backed securities	321,990		338,105
Residential mortgage-backed securities	82,020		87,443
Total	$	5,275,778	$	5,631,416

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity and equity security proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(in thousands)
Fixed maturities, available-for-sale
Proceeds from sales (1)	$	35,296		$	20,079		$	534,917		$	155,013
Proceeds from maturities/repayments (1)	102,545			186,612			400,781			488,780
Gross investment gains from sales, prepayments and maturities	(1,519		)	6,226			94,228			11,289
Gross investment losses from sales and maturities	(124		)	(420		)	(4,217		)	(1,054		)
Equity securities, available-for-sale
Proceeds from sales	$	3,150		$	687		$	31,602		$	687
Gross investment gains from sales	125			345			341			345
Gross investment losses from sales	1			0			(1,933		)	0
Fixed maturity and equity security impairments
Net writedowns for OTTI losses on fixed maturities recognized in earnings(2)	$	0		$	(1,080	)	$	(16,259	)	$	(1,463	)
Writedowns for impairments on equity securities	0			0			0			(2		)


(1)	Includes $4.9 million and $4.3 million of non-cash related proceeds for the nine months ended September 30, 2016 and 2015, respectively.


(2)	Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of the impairment.

As discussed in Note 2 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, a portion of certain OTTI losses on fixed maturity securities is recognized in “Other comprehensive income (loss)” (“OCI”). For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following tables set forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts.



	Three Months Ended			Nine Months Ended
	September 30, 2016			September 30, 2016
	(in thousands)
Balance, beginning of period	$	5,550		$	7,041
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(37		)	(1,173		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	0			0
Credit loss impairments recognized in the current period on securities not previously impaired	0			522
Additional credit loss impairments recognized in the current period on securities previously impaired	0			6
Increases due to the passage of time on previously recorded credit losses	139			224
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(11		)	(321		)
Assets transferred to parent and affiliates	0			(658		)
Balance, end of period	$	5,641		$	5,641



	Three Months Ended			Nine Months Ended
	September 30, 2015			September 30, 2015
	(in thousands)
Balance, beginning of period	$	8,556		$	8,729
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(1,022		)	(1,155		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	0			0
Credit loss impairments recognized in the current period on securities not previously impaired	0			0
Additional credit loss impairments recognized in the current period on securities previously impaired	44			71
Increases due to the passage of time on previously recorded credit losses	78			155
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(60		)	(204		)
Balance, end of period	$	7,596		$	7,596


(1)	Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security's amortized cost.

Trading Account Assets

The following table sets forth the composition of “Trading account assets” as of the dates indicated:



	September 30, 2016				December 31, 2015
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)
Fixed maturities	$	23,552	$	20,444	$	50,565	$	46,364
Equity securities	12,047		17,966		14,761		18,248
Total trading account assets	$	35,599	$	38,410	$	65,326	$	64,612

The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Other income,” was $1.4 million and $(2.8) million for the three months ended September 30, 2016 and 2015, respectively, and $3.5 million and $(2.2) million for the nine months ended September 30, 2016 and 2015, respectively.

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated:



	September 30, 2016					December 31, 2015
	Amount (in thousands)			% of Total		Amount (in thousands)			% of Total
Commercial mortgage and agricultural property loans by property type:
Retail	$	244,537		22.6	%	$	440,767		26.7	%
Apartments/Multi-Family	312,484			28.9		445,379			27.0
Industrial	151,155			14.0		254,884			15.4
Office	142,692			13.2		226,332			13.6
Other	115,626			10.7		92,581			5.6
Hospitality	50,581			4.7		85,910			5.2
Total commercial mortgage loans	1,017,075			94.1		1,545,853			93.5
Agricultural property loans	63,789			5.9		106,623			6.5
Total commercial mortgage and agricultural property loans by property type	1,080,864			100.0	%	1,652,476			100.0	%
Valuation allowance	(1,225		)			(2,651		)
Total net commercial mortgage and agricultural property loans by property type	1,079,639					1,649,825
Other Loans
Uncollateralized loans	0					8,410
Valuation allowance	0					0
Total other loans	0					8,410
Total commercial mortgage and other loans	$	1,079,639				$	1,658,235

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States (with the largest concentrations in California (21%), Texas (16%) and Illinois (7%)) and include loans secured by properties in Australia and Europe at September 30, 2016.

Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:



	September 30, 2016
	Commercial Mortgage Loans			Agricultural Property Loans			Uncollateralized Loans		Total
	(in thousands)
Allowance for credit losses, beginning of year	$	2,587		$	64		$	0	$	2,651
Addition to (release of) allowance for losses	(1,407		)	(19		)	0		(1,426		)
Charge-offs, net of recoveries	0			0			0		0
Total ending balance	$	1,180		$	45		$	0	$	1,225



	December 31, 2015
	Commercial Mortgage Loans			Agricultural Property Loans			Uncollateralized Loans		Total
	(in thousands)
Allowance for credit losses, beginning of year	$	4,071		$	83		$	0	$	4,154
Addition to (release of) allowance for losses	(1,484		)	(19		)	0		(1,503		)
Charge-offs, net of recoveries	0			0			0		0
Total ending balance	$	2,587		$	64		$	0	$	2,651

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:



	September 30, 2016
	Commercial Mortgage Loans		Agricultural Property Loans		Uncollateralized Loans		Total
	(in thousands)
Allowance for Credit Losses:
Individually evaluated for impairment	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	1,180		45		0		1,225
Loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance	$	1,180	$	45	$	0	$	1,225



Recorded Investment(1):
Gross of reserves: individually evaluated for impairment	$	2,579	$	0	$	0	$	2,579
Gross of reserves: collectively evaluated for impairment	1,014,496		63,789		0		1,078,285
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance, gross of reserves	$	1,017,075	$	63,789	$	0	$	1,080,864


(1)	Recorded investment reflects the carrying value gross of related allowance.



	December 31, 2015
	Commercial Mortgage Loans		Agricultural Property Loans		Uncollateralized Loans		Total
	(in thousands)
Allowance for Credit Losses:
Individually evaluated for impairment	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	2,587		64		0		2,651
Loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance	$	2,587	$	64	$	0	$	2,651



Recorded Investment(1):
Gross of reserves: individually evaluated for impairment	$	0	$	287	$	0	$	287
Gross of reserves: collectively evaluated for impairment	1,545,853		106,336		8,410		1,660,599
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance, gross of reserves	$	1,545,853	$	106,623	$	8,410	$	1,660,886


(1)	Recorded investment reflects the carrying value gross of related allowance.

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. Impaired commercial mortgage and other loans identified in management's specific review of probable loan losses and the related allowance for losses, as of the dates indicated, are as follows:



	September 30, 2016
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in thousands)
With no related allowance recorded	$	0	$	0	$	0	$	0	$	0
With an allowance recorded	0		0		0		0		0
Total	$	0	$	0	$	0	$	0	$	0


(1)	Recorded investment reflects the carrying value gross of related allowance.


(2)	Average recorded investment represents the average of the beginning-of-period and all subsequent quarterly end-of-period balances.


(3)	The interest income recognized is for the year-to-date income regardless of when the impairments occurred.



	December 31, 2015
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in thousands)
With no related allowance recorded	$	0	$	0	$	0	$	0	$	0
With an allowance recorded	0		0		0		12,700		769
Total	$	0	$	0	$	0	$	12,700	$	769


(1)	Recorded investment reflects the carrying value gross of related allowance.


(2)	Average recorded investment represents the average of the beginning-of-period and all subsequent quarterly end-of-period balances.


(3)	The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses as of the dates indicated:



	Debt Service Coverage Ratio - September 30, 2016
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in thousands)
Loan-to-Value Ratio
0%-59.99%	$	663,425	$	11,944	$	4,119	$	679,488
60%-69.99%	284,545		7,990		0		292,535
70%-79.99%	94,080		12,319		0		106,399
Greater than 80%	2,203		0		239		2,442
Total commercial mortgage and agricultural property loans	$	1,044,253	$	32,253	$	4,358	$	1,080,864



	Debt Service Coverage Ratio - December 31, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in thousands)
Loan-to-Value Ratio
0%-59.99%	$	1,004,751	$	35,579	$	6,762	$	1,047,092
60%-69.99%	378,799		4,969		4,016		387,784
70%-79.99%	197,208		12,471		0		209,679
Greater than 80%	0		2,938		4,983		7,921
Total commercial mortgage and agricultural property loans	$	1,580,758	$	55,957	$	15,761	$	1,652,476

The following tables provide an aging of past due commercial mortgage and other loans as of the dates indicated, based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage loans on nonaccrual status as of the dates indicated.



	September 30, 2016
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Commercial Mortgage and Other Loans		NonAccrual Status
	(in thousands)
Commercial mortgage loans	$	1,017,075	$	0	$	0	$	0	$	1,017,075	$	0
Agricultural property loans	63,789		0		0		0		63,789		0
Uncollateralized loans	0		0		0		0		0		0
Total	$	1,080,864	$	0	$	0	$	0	$	1,080,864	$	0



	December 31, 2015
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Commercial Mortgage and Other Loans		NonAccrual Status
	(in thousands)
Commercial mortgage loans	$	1,545,853	$	0	$	0	$	0	$	1,545,853	$	0
Agricultural property loans	106,336		287		0		0		106,623		0
Uncollateralized loans	8,410		0		0		0		8,410		0
Total	$	1,660,599	$	287	$	0	$	0	$	1,660,886	$	0

See Note 2 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion regarding nonaccrual status loans.

For the three and nine months ended September 30, 2016 and 2015, there were no commercial mortgage and other loans acquired, other than those through direct origination, nor were there any commercial mortgage and other loans sold. For the three months ended September 30, 2016, there were no transfers of commercial mortgage and other loans to related parties. For the nine months ended September 30, 2016, the Company transferred $631 million of commercial mortgage and other loans to related parties. See Note 1 for additional information.

The Company’s commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of both September 30, 2016 and December 31, 2015, the Company had no significant commitments to borrowers that have been involved in a troubled debt restructuring. For the three and nine months ended September 30, 2016 and 2015, there were no new troubled debt restructurings related to commercial mortgage and other loans and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the twelve months preceding. For additional information relating to the accounting for troubled debt restructurings, see Note 2 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

As of both September 30, 2016 and December 31, 2015, the Company did not have any foreclosed residential real estate property.

Net Investment Income

Net investment income for the three and nine months ended September 30, 2016 and 2015, was from the following sources:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(in thousands)
Fixed maturities, available-for-sale	$	56,901		$	68,428		$	186,654		$	198,912
Equity securities, available-for-sale	0			0			1			1
Trading account assets	424			774			1,628			2,021
Commercial mortgage and other loans	11,792			21,891			46,369			64,427
Policy loans	16,034			16,155			46,813			46,641
Short-term investments and cash equivalents	351			203			1,550			662
Other long-term investments	23,062			578			21,508			11,332
Gross investment income	108,564			108,029			304,523			323,996
Less: investment expenses	(4,821		)	(5,814		)	(16,709		)	(16,875		)
Net investment income	$	103,743		$	102,215		$	287,814		$	307,121

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for the three and nine months ended September 30, 2016 and 2015, were from the following sources:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(in thousands)
Fixed maturities	$	(1,643	)	$	4,726		$	73,752		$	8,772
Equity securities	126			345			(1,592		)	343
Commercial mortgage and other loans	(74		)	76			29,917			355
Joint ventures and limited partnerships	(173		)	23			(240		)	188
Derivatives	(7,907		)	(8,156		)	804,087			(124,318		)
Short-term investments and cash	3			2			21			45
Realized investment gains (losses), net	$	(9,668	)	$	(2,984	)	$	905,945		$	(114,615	)

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the nine months ended September 30, 2016 and 2015, are as follows:



	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2015	$	(397	)	$	65,202		$	64,805
Change in OCI before reclassifications	153			356,594			356,747
Amounts reclassified from AOCI	0			(72,160		)	(72,160		)
Income tax benefit (expense)	(54		)	(99,551		)	(99,605		)
Balance, September 30, 2016	$	(298	)	$	250,085		$	249,787



	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2014	$	(67	)	$	178,758		$	178,691
Change in OCI before reclassifications	(391		)	(97,212		)	(97,603		)
Amounts reclassified from AOCI	0			(9,115		)	(9,115		)
Income tax benefit (expense)	137			37,214			37,351
Balance, September 30, 2015	$	(321	)	$	109,645		$	109,324


(1)	Includes cash flow hedges of $31 million and $48 million as of September 30, 2016 and December 31, 2015, respectively, and $40 million and $12 million as of September 30, 2015 and December 31, 2014, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
	(in thousands)
Amounts reclassified from AOCI (1)(2):
Net unrealized investment gains (losses):
Cash flow hedges - Currency/Interest rate(3)	$	1,213		$	2,981	$	3,985	$	4,259
Net unrealized investment gains (losses) on available-for-sale securities(4)	(2,730		)	2,090		68,175		4,856
Total net unrealized investment gains (losses)	(1,517		)	5,071		72,160		9,115
Total reclassifications for the period	$	(1,517	)	$	5,071	$	72,160	$	9,115


(1)	All amounts are shown before tax.


(2)	Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.


(3)	See Note 5 for additional information on cash flow hedges.


(4)	See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition costs and other costs, future policy benefits and policyholders’ account balances.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from OCI those items that are included as part of “Net income” for a period that had been part of OCI in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized



	Net Unrealized Gains (Losses) on Investments			Deferred Policy Acquisition Costs and Other Costs			Future Policy Benefits and Policyholders’ Account Balances(2)		Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2015	$	5,196		$	(1,350	)	$	1,114	$	(1,767	)	$	3,193
Net investment gains (losses) on investments arising during the period	1,004			0			0		(351		)	653
Reclassification adjustment for (gains) losses included in net income	(1,219		)	0			0		427			(792		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(512		)	0			0		179			(333		)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs	0			(78		)	0		27			(51		)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	0			0			38		(13		)	25
Balance, September 30, 2016	$	4,469		$	(1,428	)	$	1,152	$	(1,498	)	$	2,695


(1)	Represents "transfers in" related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.


(2)	Balances are net of reinsurance.

All Other Net Unrealized Investment Gains and Losses in AOCI



	Net Unrealized Gains (Losses) on Investments(2)			Deferred Policy Acquisition Costs and Other Costs			Future Policy Benefits and Policyholders’ Account Balances(3)		Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2015	$	111,837		$	(19,252	)	$	2,647	$	(33,223	)	$	62,009
Net investment gains (losses) on investments arising during the period	353,495			0			0		(123,722		)	229,773
Reclassification adjustment for (gains) losses included in net income	(70,941		)	0			0		24,829			(46,112		)
Reclassification adjustment for OTTI losses excluded from net income(1)	512			0			0		(179		)	333
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs	0			(76,187		)	0		26,665			(49,522		)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	0			0			78,322		(27,413		)	50,909
Balance, September 30, 2016	$	394,903		$	(95,439	)	$	80,969	$	(133,043	)	$	247,390


(1)	Represents "transfers out" related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.


(2)	Includes cash flow hedges. See Note 5 for information on cash flow hedges.


(3)	Balances are net of reinsurance.

Net Unrealized Gains (Losses) on Investments by Asset Class

The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated:



	September 30, 2016		December 31, 2015
	(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized	$	4,469	$	5,196
Fixed maturity securities, available-for-sale - all other	351,169		59,930
Equity securities, available-for-sale	718		(2,636		)
Derivatives designated as cash flow hedges(1)	31,295		48,271
Other investments	11,721		6,272
Net unrealized gains (losses) on investments	$	399,372	$	117,033


(1)	See Note 5 for more information on cash flow hedges.

Securities Lending and Repurchase Agreements

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of September 30, 2016, the Company had $134 million of securities lending transactions recorded as "Cash collateral for loaned securities," comprised of $85 million in corporate securities and $49 million in U.S. Treasury securities. Of the $134 million of securities lending transactions, all had a remaining contractual maturity that was overnight and continuous. As of December 31, 2015, the Company had $40 million of securities lending transactions recorded as "Cash collateral for loaned securities," comprised of $33 million in corporate securities and $7 million in foreign government bonds. Of the $40 million of securities lending transactions, $38 million had a remaining contractual maturity that was overnight and continuous, while the other $2 million had a remaining contractual maturity of up to thirty days. As of both September 30, 2016 and December 31, 2015, the Company had no repurchase agreement transactions.