Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

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 June 30, 2017, Level 3 invested assets comprised 3.1% of the Company’s total investment portfolio fair value.

($ in thousands)					Fair Value Measurements at
	Carrying		Fair		Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
June 30, 2017
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	623,064	$	623,064	$	—	$	619,479	$	3,585
Other, including
U.S. Treasury securities	606,350		606,350		14,341		592,009		—
Municipal bonds	1,817,220		1,817,220		—		1,768,097		49,123
Foreign government bonds	100,046		100,046		—		100,046		—
Corporate bonds	2,827,608		2,827,608		14,976		2,735,580		77,052
Other mortgage-backed securities	1,604,297		1,604,297		—		1,487,558		116,739
Total fixed maturity securities	7,578,585		7,578,585		29,317		7,302,769		246,499
Equity securities	156,909		156,909		101,847		55,056		6
Short-term investments	104,087		104,087		104,087		—		—
Other investments	21,482		21,482		—		21,482		—
Totals	$	7,861,063	$	7,861,063	$	235,251	$	7,379,307	$	246,505
Financial Liabilities
Investment contract and life policy    reserves, embedded derivatives	$	286	$	286	$	—	$	286	$	—
Other policyholder funds,   embedded derivatives	67,995		67,995		—		—		67,995
December 31, 2016
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	614,891	$	614,891	$	—	$	611,476	$	3,415
Other, including
U.S. Treasury securities	467,143		467,143		13,631		453,512		—
Municipal bonds	1,769,397		1,769,397		—		1,722,900		46,497
Foreign government bonds	98,669		98,669		—		98,669		—
Corporate bonds	2,810,221		2,810,221		13,532		2,736,498		60,191
Other mortgage-backed securities	1,696,387		1,696,387		—		1,595,143		101,244
Total fixed maturity securities	7,456,708		7,456,708		27,163		7,218,198		211,347
Equity securities	141,649		141,649		98,632		43,011		6
Short-term investments	44,918		44,918		44,167		—		751
Other investments	20,194		20,194		—		20,194		—
Totals	$	7,663,469	$	7,663,469	$	169,962	$	7,281,403	$	212,104
Financial Liabilities
Investment contract and life policy    reserves, embedded derivatives	$	158	$	158	$	—	$	158	$	—
Other policyholder funds,   embedded derivatives	59,393		59,393		—		—		59,393

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

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

($ in thousands)	Financial Assets																				Financial Liabilities(1)
	Municipal Bonds			Corporate Bonds			Mortgage- Backed Securities (2)			Total Fixed Maturity Securities			Equity Securities		Short-term Investments			Total
Beginning balance, April 1, 2017	$	53,462		$	82,495		$	112,794		$	248,751		$	6	$	—		$	248,757		$	64,261
Transfers into Level 3 (3)	—			2,001			9,482			11,483			—		—			11,483			—
Transfers out of Level 3 (3)	(5,557		)	(5,853		)	—			(11,410		)	—		—			(11,410		)	—
Total gains or losses
Net realized investment gains (losses) included in net income related to financial assets	—			—			(1,714		)	(1,714		)	—		—			(1,714		)	—
Net realized (gains) losses included in net income related to financial liabilities	—			—			—			—			—		—			—			1,238
Net unrealized investment gains (losses) included in other comprehensive income	1,287			359			3,093			4,739			—		—			4,739			—
Purchases	—			—			—			—			—		—			—			—
Issuances	—			—			—			—			—		—			—			3,397
Sales	—			—			—			—			—		—			—			—
Settlements	—			—			—			—			—		—			—			—
Paydowns, maturities and distributions	(69		)	(1,950		)	(3,331		)	(5,350		)	—		—			(5,350		)	(901		)
Ending balance, June 30, 2017	$	49,123		$	77,052		$	120,324		$	246,499		$	6	$	—		$	246,505		$	67,995
Beginning balance, January 1, 2017	$	46,497		$	60,191		$	104,659		$	211,347		$	6	$	751		$	212,104		$	59,393
Transfers into Level 3 (3)	5,214			31,919			24,521			61,654			—		—			61,654			—
Transfers out of Level 3 (3)	(5,557		)	(11,963		)	—			(17,520		)	—		(751		)	(18,271		)	—
Total gains or losses
Net realized investment gains (losses) included in net income related to financial assets	—			—			(1,714		)	(1,714		)	—		—			(1,714		)	—
Net realized (gains) losses included in net income related to financial liabilities	—			—			—			—			—		—			—			3,546
Net unrealized investment gains (losses) included in other comprehensive income	3,158			455			2,322			5,935			—		—			5,935			—
Purchases	—			—			—			—			—		—			—			—
Issuances	—			—			—			—			—		—			—			6,786
Sales	—			—			—			—			—		—			—			—
Settlements	—			—			—			—			—		—			—			—
Paydowns, maturities and distributions	(189		)	(3,550		)	(9,464		)	(13,203		)	—		—			(13,203		)	(1,730		)
Ending balance, June 30, 2017	$	49,123		$	77,052		$	120,324		$	246,499		$	6	$	—		$	246,505		$	67,995

(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) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities.

(3) Transfers into and out of Level 3 during the three and six months ended June 30, 2017 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. 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.

($ in thousands)	Financial Assets																			Financial Liabilities(1)
	Municipal Bonds			Corporate Bonds			Mortgage- Backed Securities (2)			Total Fixed Maturity Securities			Equity Securities		Short-term Investments		Total
Beginning balance, April 1, 2016	$	46,493		$	70,071		$	83,821		$	200,385		$	6	$	—	$	200,391		$	42,085
Transfers into Level 3 (3)	—			5,017			12,984			18,001			—		—		18,001			—
Transfers out of Level 3 (3)	—			—			—			—			—		—		—			—
Total gains or losses
Net realized investment gains (losses) included in net income related to financial assets	—			(657		)	—			(657		)	—		—		(657		)	—
Net realized (gains) losses included in net income related to financial liabilities	—			—			—			—			—		—		—			1,324
Net unrealized investment gains (losses) included in other comprehensive income	1,297			1,393			229			2,919			—		—		2,919			—
Purchases	—			—			—			—			—		—		—			—
Issuances	—			—			—			—			—		—		—			4,993
Sales	—			—			—			—			—		—		—			—
Settlements	—			—			—			—			—		—		—			—
Paydowns, maturities and distributions	(143		)	(2,416		)	(453		)	(3,012		)	—		—		(3,012		)	(696		)
Ending balance, June 30, 2016	$	47,647		$	73,408		$	96,581		$	217,636		$	6	$	—	$	217,642		$	47,706
Beginning balance, January 1, 2016	$	30,379		$	67,575		$	75,466		$	173,420		$	6	$	—	$	173,426		$	39,021
Transfers into Level 3 (3)	14,751			11,076			24,626			50,453			—		—		50,453			—
Transfers out of Level 3 (3)	—			—			—			—			—		—		—			—
Total gains or losses
Net realized investment gains (losses) included in net income related to financial assets	—			(657		)	—			(657		)	—		—		(657		)	—
Net realized (gains) losses included in net income related to financial liabilities	—			—			—			—			—		—		—			1,998
Net unrealized investment gains (losses) included in other comprehensive income	2,781			1,781			222			4,784			—		—		4,784			—
Purchases	—			—			—			—			—		—		—			—
Issuances	—			—			—			—			—		—		—			8,484
Sales	—			—			—			—			—		—		—			—
Settlements	—			—			—			—			—		—		—			—
Paydowns, maturities and distributions	(264		)	(6,367		)	(3,733		)	(10,364		)	—		—		(10,364		)	(1,797		)
Ending balance, June 30, 2016	$	47,647		$	73,408		$	96,581		$	217,636		$	6	$	—	$	217,642		$	47,706

(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) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities.

(3) Transfers into and out of Level 3 during the three and six months ended June 30, 2016 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.

Summary of fair value assets and liabilities measured on nonrecurring basis

The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities.

($ in thousands)					Fair Value Measurements at
	Carrying		Fair		Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
June 30, 2017
Financial Assets
Investments
Other investments	$	152,970	$	157,530	$	—	$	—	$	157,530
Financial Liabilities
Investment contract and life policy reserves, fixed annuity contracts	4,377,759		4,288,095		—		—		4,288,095
Investment contract and life policy reserves, account values on life contracts	80,768		86,175		—		—		86,175
Other policyholder funds	645,009		645,009		—		575,475		69,534
Long-term debt	247,337		257,929		257,929		—		—
December 31, 2016
Financial Assets
Investments
Other investments	$	151,965	$	156,536	$	—	$	—	$	156,536
Financial Liabilities
Investment contract and life policy reserves, fixed annuity contracts	4,360,456		4,280,528		—		—		4,280,528
Investment contract and life policy    reserves, account values on life contracts	79,591		85,066		—		—		85,066
Other policyholder funds	649,557		649,557		—		575,253		74,304
Long-term debt	247,209		248,191		248,191		—		—