Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Company's fair value hierarchy measured at recurring basis

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At December 31, 2015, these Level 3 invested assets comprised approximately 2.3% of the Company’s total investment portfolio fair value.

					Fair Value Measurements at
	Carrying		Fair		Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
December 31, 2015
Financial Assets
Investments
Fixed maturities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	504,414	$	504,414	$	-	$	504,414	$	-
Other, including
U.S. Treasury securities		546,111		546,111		14,258		531,853		-
Municipal bonds		1,708,943		1,708,943		-		1,678,564		30,379
Foreign government bonds		73,617		73,617		-		73,617		-
Corporate bonds		2,779,415		2,779,415		10,195		2,701,645		67,575
Other mortgage-backed securities		1,478,840		1,478,840		-		1,403,374		75,466
Total fixed maturities		7,091,340		7,091,340		24,453		6,893,467		173,420
Equity securities		99,797		99,797		86,088		13,703		6
Short-term investments		174,152		174,152		169,764		4,388		-
Other investments		14,001		14,001		-		14,001		-
Totals		7,379,290		7,379,290		280,305		6,925,559		173,426
Separate Account (variable annuity) assets (1)		1,800,722		1,800,722		1,800,722		-		-
Financial Liabilities
Investment contract and life policy reserves, embedded derivatives		14		14		-		14		-
Other policyholder funds, embedded derivatives		39,021		39,021		-		-		39,021

December 31, 2014
Financial Assets
Investments
Fixed maturities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	535,726	$	535,726	$	-	$	535,726	$	-
Other, including
U.S. Treasury securities		538,199		538,199		17,857		520,342		-
Municipal bonds		1,647,822		1,647,822		-		1,634,194		13,628
Foreign government bonds		59,536		59,536		-		59,536		-
Corporate bonds		2,834,749		2,834,749		10,524		2,749,508		74,717
Other mortgage-backed securities		1,277,058		1,277,058		-		1,194,109		82,949
Total fixed maturities		6,893,090		6,893,090		28,381		6,693,415		171,294
Equity securities		110,655		110,655		92,140		18,509		6
Short-term investments		142,039		142,039		142,039		-		-
Other investments		12,458		12,458		-		12,458		-
Totals		7,158,242		7,158,242		262,560		6,724,382		171,300
Separate Account (variable annuity) assets (1)		1,813,557		1,813,557		1,813,557		-		-
Financial Liabilities
Investment contract and life policy reserves, embedded derivatives		-		-		-		-		-
Other policyholder funds, embedded derivatives		20,049		20,049		-		-		20,049

(1)

Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets.

Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis

The following tables present reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis.

																									Financial
	Financial Assets																								Liabilities(1)
	Municipal Bonds				Corporate Bonds				Other Mortgage- Backed Securities				Total Fixed Maturities				Equity Securities				Total

Beginning balance, January 1, 2015		$	13,628			$	74,717			$	82,949			$	171,294			$	6			$	171,300		$	20,049
Transfers into Level 3 (2)			16,326				5,729				15,685				37,740				-				37,740			-
Transfers out of Level 3 (2)			-				(1,351	)			(9,663	)			(11,014	)			-				(11,014	)		-
Total gains or losses
Net realized gains (losses) included in net income related to financial assets			-				1,087				-				1,087				(3	)			1,084			-
Net realized (gains) losses included in net income related to financial liabilities			-				-				-				-				-				-			(2,528	)
Net unrealized gains (losses) included in other comprehensive income			782				(1,935	)			(854	)			(2,007	)			4				(2,003	)		-
Purchases			-				-				-				-				-				-			-
Issuances			-				-				-				-				-				-			23,595
Sales			-				(476	)			-				(476	)			(1	)			(477	)		-
Settlements			-				-				-				-				-				-			-
Paydowns, maturities and distributions			(357	)			(10,196	)			(12,651	)			(23,204	)			-				(23,204	)		(2,095	)
Ending balance, December 31, 2015		$	30,379			$	67,575			$	75,466			$	173,420			$	6			$	173,426		$	39,021

Beginning balance, January 1, 2014		$	2,694			$	60,826			$	46,009			$	109,529			$	6			$	109,535		$	-
Transfers into Level 3 (2)			10,056				20,649				42,108				72,813				-				72,813			-
Transfers out of Level 3 (2)			-				(3,510	)			(519	)			(4,029	)			-				(4,029	)		-
Total gains or losses
Net realized gains (losses) included in net income related to financial assets			-				-				(26	)			(26	)			-				(26	)		-
Net realized (gains) losses included in net income related to financial liabilities			-				-				-				-				-				-			1,157
Net unrealized gains (losses) included in other comprehensive income			1,191				3,611				118				4,920				-				4,920			-
Purchases			-				-				-				-				-				-			-
Issuances			-				-				-				-				-				-			19,338
Sales			-				-				-				-				-				-			-
Settlements			-				-				-				-				-				-			-
Paydowns, maturities and distributions			(313	)			(6,859	)			(4,741	)			(11,913	)			-				(11,913	)		(446	)
Ending balance, December 31, 2014		$	13,628			$	74,717			$	82,949			$	171,294			$	6			$	171,300		$	20,049

(1)

Represents embedded derivatives, all related to the Company’s FIA products, reported in Other Policyholder Funds in the Company’s Consolidated Balance Sheets.

(2)

Transfers into and out of Level 3 during the years ended December 31, 2015 and 2014 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

Carrying value, fair value and fair value hierarchy of financial assets and financial liabilities

The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities.

					Fair Value Measurements at
	Carrying		Fair		Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
December 31, 2015
Financial Assets
Investments
Other investments	$	148,759	$	153,228	$	-	$	-	$	153,228
Financial Liabilities
Investment contract and life policy reserves, fixed annuity contracts		4,072,102		4,049,840		-		-		4,049,840
Investment contract and life policy reserves, account values on life contracts		77,429		81,360		-		-		81,360
Other policyholder funds		653,631		653,631		-		575,104		78,527
Short-term debt		-		-		-		-		-
Long-term debt		249,346		252,700		252,700		-		-

December 31, 2014
Financial Assets
Investments
Other investments	$	145,409	$	149,792	$	-	$	-	$	149,792
Financial Liabilities
Investment contract and life policy reserves, fixed annuity contracts		3,774,457		3,691,123		-		-		3,691,123
Investment contract and life policy reserves, account values on life contracts		77,415		81,461		-		-		81,461
Other policyholder funds		586,689		586,689		-		500,080		86,609
Short-term debt		38,000		38,000		-		38,000		-
Long-term debt		199,939		209,495		209,495		-		-