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Fair Value of Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2018
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, 2018, Level 3 invested assets comprised 3.3% of the Company’s total investment portfolio at fair value.
($ in thousands)
 
 
 
Fair Value Measurements at
 
 
Carrying
 
Fair
 
Reporting Date Using
 
 
Amount
 
Value
 
Level 1
 
Level 2
 
Level 3
June 30, 2018
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities
 
 
 
 
 
 
 
 
 
 
U.S. Government and federally
sponsored agency obligations:
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
$
707,324

 
$
707,324

 
$
—

 
$
703,543

 
$
3,781

Other, including U.S. Treasury securities
 
782,223

 
782,223

 
13,201

 
769,022

 
—

Municipal bonds
 
1,827,511

 
1,827,511

 
—

 
1,777,590

 
49,921

Foreign government bonds
 
95,505

 
95,505

 
—

 
95,505

 
—

Corporate bonds
 
2,397,724

 
2,397,724

 
13,397

 
2,291,664

 
92,663

Other mortgage-backed securities
 
1,665,278

 
1,665,278

 
—

 
1,539,998

 
125,280

Total fixed maturity securities
 
7,475,565

 
7,475,565

 
26,598

 
7,177,322

 
271,645

Equity securities
 
130,780

 
130,780

 
80,236

—

50,538

—

6

Short-term investments
 
176,497

 
176,497

 
176,497

 
—

 
—

Other investments
 
21,876

 
21,876

 
—

 
21,876

 
—

Totals
 
$
7,804,718

 
$
7,804,718

 
$
283,331

 
$
7,249,736

 
$
271,651

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
Investment contract and life policy
reserves, embedded derivatives
 
$
486

 
$
486

 
$
—

 
$
486

 
$
—

Other policyholder funds, embedded derivatives
 
77,788

 
77,788

 
—

 
—

 
77,788

 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities
 
 
 
 
 
 
 
 
 
 
U.S. Government and federally
sponsored agency obligations:
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
$
696,725

 
$
696,725

 
$
—

 
$
693,375

 
$
3,350

Other, including U.S. Treasury securities
 
735,408

 
735,408

 
13,393

 
722,015

 
—

Municipal bonds
 
1,893,253

 
1,893,253

 
—

 
1,843,925

 
49,328

Foreign government bonds
 
102,738

 
102,738

 
—

 
102,738

 
—

Corporate bonds
 
2,578,954

 
2,578,954

 
14,345

 
2,491,630

 
72,979

Other mortgage-backed securities
 
1,716,997

 
1,716,997

 
—

 
1,612,403

 
104,594

Total fixed maturity securities
 
7,724,075

 
7,724,075

 
27,738

 
7,466,086

 
230,251

Equity securities
 
135,466

 
135,466

 
82,208

 
53,252

 
6

Short-term investments
 
62,593

 
62,593

 
62,593

 
—

 
—

Other investments
 
28,050

 
28,050

 
—

 
28,050

 
—

Totals
 
$
7,950,184

 
$
7,950,184

 
$
172,539

 
$
7,547,388

 
$
230,257

Financial Liabilities
 
 

 
 

 
 

 
 

 
 

Investment contract and life policy
reserves, embedded derivatives
 
$
594

 
$
594

 
$
—

 
$
594

 
$
—

Other policyholder funds, embedded derivatives
 
80,733

 
80,733

 
—

 
—

 
80,733
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
 
Other
Mortgage-
Backed
Securities (2)
 
Total
Fixed
Maturity
Securities
 
Equity
Securities
 
Short-term
Investments
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance, April, 1, 2018
 
$
49,748

 
$
78,780

 
$
115,334

 
$
243,862

 
$
6

 
$
—

 
$
243,868

 
$
78,486

Transfers into Level 3 (3)
 
—

 
29,709

 
18,322

 
48,031

 
—

 
—

 
48,031

 
—

Transfers out of Level 3 (3)
 
—

 
(11,279
)
 
(4,230
)
 
(15,509
)
 
—

 
—

 
(15,509
)
 
—

Total gains or losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment gains (losses) included in net income
related to financial assets
 
—

 
(246
)
 
—

 
(246
)
 
—

 
—

 
(246
)
 
—

Net (gains) losses included
in net income related
to financial liabilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,291
)
Net unrealized investment gains
(losses) included in OCI
 
397

 
(700
)
 
1,659

 
1,356

 
—

 
—

 
1,356

 
—

Purchases
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Issuances
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,107

Sales
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Paydowns, maturities
and distributions
 
(224
)
 
(3,601
)
 
(2,024
)
 
(5,849
)
 
—

 
—

 
(5,849
)
 
(1,514
)
Ending balance, June 30, 2018
 
$
49,921

 
$
92,663

 
$
129,061

 
$
271,645

 
$
6

 
$
—

 
$
271,651

 
$
77,788

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance, January 1, 2018
 
$
49,328

 
$
72,979

 
$
107,944

 
$
230,251

 
$
6

 
$
—

 
$
230,257

 
$
80,733

Transfers into Level 3 (3)
 
—

 
40,487

 
33,144

 
73,631

 
—

 
—

 
73,631

 
—

Transfers out of Level 3 (3)
 
—

 
(11,279
)
 
(4,230
)
 
(15,509
)
 
—

 
—

 
(15,509
)
 
—

Total gains or losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment gains (losses) included in net income related to financial assets
 
—

 
(246
)
 
—

 
(246
)
 
3

 
—

 
(243
)
 
—

Net (gains) losses included
in net income related
to financial liabilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(3,513
)
Net unrealized investment gains
(losses) included in OCI
 
840

 
(1,587
)
 
637

 
(110
)
 
—

 
—

 
(110
)
 
—

Purchases
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Issuances
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
3,439

Sales
 
—

 
—

 
—

 
—

 
(3
)
 
—

 
(3
)
 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Paydowns, maturities
and distributions
 
(247
)
 
(7,691
)
 
(8,434
)
 
(16,372
)
 
—

 
—

 
(16,372
)
 
(2,871
)
Ending balance, June 30, 2018
 
$
49,921

 
$
92,663

 
$
129,061

 
$
271,645

 
$
6

 
$
—

 
$
271,651

 
$
77,788

________________
(1)
Represents embedded derivatives, all related to 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 month periods ended June 30, 2018 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, 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 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 month periods 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.
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, 2018
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Other investments
 
$
154,327

 
$
159,019

 
$
—

 
$
—

 
$
159,019

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
Investment contract and life policy reserves,
fixed annuity contracts
 
4,498,302

 
4,399,614

 
—

 
—

 
4,399,614

Investment contract and life policy reserves,
account values on life contracts
 
84,163

 
89,761

 
—

 
—

 
89,761

Other policyholder funds
 
640,722

 
640,722

 
—

 
575,928

 
64,794

Long-term debt
 
297,603

 
302,695

 
—

 
302,695

 
—

 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Other investments
 
$
154,898

 
$
159,575

 
$
—

 
$
—

 
$
159,575

Financial Liabilities
 
 

 
 

 
 

 
 

 
 

Investment contract and life policy reserves,
fixed annuity contracts
 
4,452,972

 
4,366,334

 
—

 
—

 
4,366,334

Investment contract and life policy reserves,
account values on life contracts
 
82,911

 
88,620

 
—

 
—

 
88,620

Other policyholder funds
 
643,528

 
643,528

 
—

 
575,622

 
67,906

Long-term debt
 
297,469

 
311,315

 
—

 
311,315

 
—