2.2.0.25falsefalse0203 - Disclosure - Fair Value Measurementstruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011
USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note C — Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company measures its assets and liabilities recorded at fair value in the consolidated balance
sheet based on the framework set forth in the GAAP fair value accounting guidance. This framework
establishes a fair value hierarchy of three levels based upon the transparency and availability of
information used in measuring the fair value of assets or liabilities as of the measurement date.
The levels are categorized as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Level 1 — Valuation is based upon quoted prices for identical assets or liabilities in active
markets. Level 1 fair value is not subject to valuation adjustments or block discounts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Level 2 — Valuation is based upon quoted prices for similar assets or liabilities in active markets
or quoted prices for identical or similar instruments in markets that are not active. In addition,
a company may use various valuation techniques or pricing models that use observable inputs to
measure fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Level 3 — Valuation is generated from techniques in which one or more of the significant inputs for
valuing such assets or liabilities are not observable. These inputs may reflect the Company’s best
estimates of the various assumptions that market participants would use in valuing the financial
assets and financial liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For these purposes, the Company determines the existence of an active market for an asset or
liability based on its judgment as to whether transactions for the asset or liability occur in such
market with sufficient frequency and volume to provide reliable pricing information. If the
Company concludes that there has been a significant decrease in the volume and level of activity
for an investment in relation to normal market activity for such investment, adjustments to
transactions and quoted prices are made to estimate fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s investments in fixed maturity securities available for sale, equity securities
available for sale, trading account securities, assets held in the separate account and its
liabilities for securities sold, not yet purchased are carried at fair value. The methodologies
and valuation techniques used by the Company to value its assets and liabilities measured at fair
value are described below.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Instruments included in fixed maturity securities available for sale include mortgage-backed and
corporate securities, U.S. Treasury and other U.S. government guaranteed securities, securities
issued by U.S. government-sponsored enterprises, and obligations of U.S. states, municipalities and
political subdivisions. The market liquidity of each security is taken into consideration in the
valuation technique used to value such security. For securities where market transactions
involving identical or comparable assets generate sufficient relevant information, the Company
employs a market approach to valuation. If sufficient information is not generated from market
transactions involving identical or comparable assets, the Company uses an income approach to
valuation. The majority of the instruments included in fixed maturity securities available for sale
are
valued utilizing observable inputs; accordingly, they are categorized in either Level l or Level 2
of the fair value hierarchy described above. However, in instances where significant inputs
utilized are unobservable, the securities are categorized in Level 3 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The inputs used in the valuation techniques employed by the Company are provided by nationally
recognized pricing services, external investment managers and internal resources. To assess these
inputs, the Company’s review process includes, but is not limited to, quantitative analysis
including benchmarking, initial and ongoing evaluations of methodologies used by external parties
to calculate fair value, and ongoing evaluations of fair value estimates based on the Company’s
knowledge and monitoring of market conditions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company uses various valuation techniques and pricing models to measure the fair value of its
investments in residential mortgage-backed securities and commercial mortgage-backed securities,
including option-adjusted spread models, volatility-driven multi-dimensional single cash flow
stream models and matrix correlation to comparable securities. Residential mortgage-backed
securities include U.S. agency securities and collateralized mortgage obligations. Inputs utilized
in connection with the valuation techniques relating to this class of securities include monthly
payment and performance information with respect to the underlying loans, including prepayments,
default severity, delinquencies, market indices and the amounts of the tranches in the particular
structure which are senior or subordinate, as applicable, to the tranche represented by the
Company’s investment. A portion of the Company’s investments in mortgage-backed securities are
valued using observable inputs and therefore categorized in Level 2 of the fair value hierarchy.
The remaining mortgage-backed securities are valued using non-binding broker quotes. These
methodologies rely on unobservable inputs and thus these securities are categorized in Level 3 of
the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Corporate securities primarily include fixed rate corporate bonds, floating and variable rate notes
and securities acquired through private placements. Inputs utilized in connection with the
Company’s valuation techniques relating to this class of securities include recently executed
transactions, market price quotations, benchmark yields, issuer spreads and, in the case of private
placement corporate securities, cash flow models. These cash flow models utilize yield curves,
issuer-provided information and material events as key inputs. Corporate securities are categorized
in Level 2 of the fair value hierarchy, other than securities acquired through private placements,
which are categorized in Level 3 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Collateralized debt obligations consist of collateralized loan obligations. The Company’s
valuation techniques relating to this class of securities utilize non-binding broker quotes as the
key input. As this input is generally unobservable, collateralized debt obligations are
categorized in Level 3 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">U.S. Treasury and other U.S. government guaranteed securities include U.S. Treasury bonds and
notes, Treasury Inflation Protected Securities (“TIPS”) and other U.S. government guaranteed
securities. The fair values of the U.S. Treasury securities and TIPS are based on quoted prices in
active markets and are generally categorized in Level 1 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Inputs utilized in connection with the Company’s valuation techniques relating to its investments
in other U.S. government guaranteed securities, as well as its investments in U.S.
government-sponsored enterprise securities, which consist of medium term notes issued by these
enterprises, include recently executed transactions, interest rate yield curves, maturity dates,
market price quotations and credit spreads relating to similar instruments. These inputs are
generally observable and accordingly, these securities are generally categorized in Level 2 of the
fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Obligations of U.S. states, municipalities and political subdivisions primarily include bonds or
notes issued by U.S municipalities. Inputs utilized in connection with the Company’s valuation
techniques relating to this class of securities include recently executed transactions and other
market data, spreads, benchmark curves including treasury and other benchmarks, trustee reports,
material event notices, new issue data, and issuer financial statements. These inputs are
generally observable and these securities are generally categorized in Level 2 of the fair value
hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Other investments held at fair value primarily consist of equity securities available for sale and
trading account securities. These investments are primarily valued at quoted active market prices
and are therefore categorized in Level 1 of the fair value hierarchy. For private equity
investments, since quoted market prices are not available, the transaction price is used as the
best estimate of fair value at inception. When evidence is believed to support a change to the
carrying value from the transaction price, adjustments are made to reflect expected exit values.
Ongoing reviews by Company management are based on assessments of each underlying investment and
the inputs utilized in these reviews include, among other things, the evaluation of financing and
sale transactions with third parties, expected cash flows, material events and market-based
information. These
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">investments are included in Level 3 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Assets held in the separate account represent funds invested in a separately administered variable
life insurance product for which the policyholder, rather than the Company, bears the investment
risk. These assets are invested in interests in a limited liability company that invests in funds
which trade in various financial instruments. This limited liability company, all of whose
interests are owned by the Company’s separate account, utilizes the financial statements furnished
by the funds to
determine the values of its investments in such funds and the carrying value of each such investment, which
is based on its proportionate interest in the relevant fund as of the balance sheet date. As such,
these funds’ financial statements constitute the key input in the Company’s valuation of its
investment in this limited liability company. The Company concluded that the value calculated
using the equity method of accounting on its investment in this limited liability company was
reflective of the fair market value of such investments. The investment portfolios of the funds in
which the fund investments are maintained vary from fund to fund, but are generally comprised of
liquid, publicly traded securities that have readily determinable market values and which are
carried at fair value on the financial statements of such funds, substantially all of which are
audited annually. The amount that an investor is entitled to receive upon the redemption of its
investment from the applicable fund is determined by reference to such security values. These
investments are included in Level 3 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Other liabilities measured at fair value consist of securities sold, not yet purchased. These
securities are valued using the quoted active market prices of the securities sold and are
categorized in Level 1 of the fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Assets and liabilities measured at fair value in the consolidated balance sheet on a recurring
basis are summarized below:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">March 31, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fixed maturity securities, available for sale:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Agency residential mortgage-backed
securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">683,773</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">673,574</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,199</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Non-agency residential mortgage-backed
securities
</div></td>
<td> </td>
<td> </td>
<td align="right">815,958</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">775,893</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40,065</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Commercial mortgage-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">36,917</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,745</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,172</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">1,643,270</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">907</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,569,339</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73,024</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Collateralized debt obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">181,832</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">181,832</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. Treasury and other U.S. Government
guaranteed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">177,846</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,126</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">43,605</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,115</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. Government-sponsored enterprise
securities
</div></td>
<td> </td>
<td> </td>
<td align="right">111,451</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">82,133</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,318</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Obligations of U.S. states, municipalities
and political subdivisions
</div></td>
<td> </td>
<td> </td>
<td align="right">2,214,335</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,343</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,212,992</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other investments
</div></td>
<td> </td>
<td> </td>
<td align="right">154,738</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149,174</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,564</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets held in separate account
</div></td>
<td> </td>
<td> </td>
<td align="right">129,428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">129,428</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,149,548</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">277,550</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,393,281</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">478,717</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other liabilities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">85,598</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">85,598</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides reconciliations for Level 3 assets measured at fair value on a
recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in
which they occur.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="19%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="34" style="border-bottom: 1px solid #000000">Three Months Ended March 31, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total Gains</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" colspan="2">(Losses)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total Gains</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Included in</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance at</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Losses)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other Com-</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Transfers</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Transfers</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Beginning</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Included in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">prehensive</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Into</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Out of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">End of the</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">of Year</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Earnings</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Income</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Purchases</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Issuances</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Settlements</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Period</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Agency residential mortgage-
backed securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,266</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(19</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(60</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(988</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,199</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-agency residential mortgage-
backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">37,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">139</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(283</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,871</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,182</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40,065</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Commercial mortgage-backed
securities
</div></td>
<td> </td>
<td> </td>
<td align="right">1,327</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,172</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">60,968</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,063</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">18,576</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,573</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,645</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,503</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">73,024</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Collateralized debt obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">175,184</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,201</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,144</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,697</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">181,832</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. Treasury and other U.S.
Government guaranteed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">9,015</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(791</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(106</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,115</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. Government-sponsored
enterprise securities
</div></td>
<td> </td>
<td> </td>
<td align="right">4,020</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">23,269</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,033</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,318</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Obligations of U.S. states, municipalities
and political subdivisions
</div></td>
<td> </td>
<td> </td>
<td align="right">2,855</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(63</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,792</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other investments
</div></td>
<td> </td>
<td> </td>
<td align="right">6,449</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">65</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(953</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5,564</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets held in separate account
</div></td>
<td> </td>
<td> </td>
<td align="right">123,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,754</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">129,428</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">432,278</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,298</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,925</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">51,473</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,687</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">3,678</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7,248</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">478,717</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying values and estimated fair values of certain of the Company’s financial
instruments not recorded at fair value in the consolidated balance sheets are shown below. Because
fair values for all balance sheet items are not required to be disclosed, the aggregate fair value
amounts presented below are not reflective of the underlying value of the Company.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Short-term investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">267,389</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">267,389</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">334,215</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">334,215</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other investments
</div></td>
<td> </td>
<td> </td>
<td align="right">458,605</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">458,605</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">351,678</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">351,678</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Policyholder account balances
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,667,250</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,767,406</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,662,932</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,761,795</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt
</div></td>
<td> </td>
<td> </td>
<td align="right">375,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">408,450</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">375,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">402,618</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Junior subordinated debentures
</div></td>
<td> </td>
<td> </td>
<td align="right">175,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">167,491</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">175,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">161,541</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Advances from Federal Home Loan Bank
</div></td>
<td> </td>
<td> </td>
<td align="right">55,342</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,006</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">55,342</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,046</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Liabilities related to separate account
</div></td>
<td> </td>
<td> </td>
<td align="right">129,428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">129,428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">123,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">123,674</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying values for short-term investments approximate fair values based on the nature of the
investments. Other investments primarily include investment funds organized as limited
partnerships and limited liability companies and real estate investments held by limited liability
companies, which are reflected in the Company’s financial statements under the equity method of
accounting. In determining the fair values of such investments for purposes of this footnote
disclosure, the Company concluded that the values calculated using the equity method of accounting
was reflective of the fair market values of such investments. The investment portfolios of the
funds in which the fund investments are maintained vary from fund to fund, but are generally
comprised of liquid, publicly traded securities that have readily determinable market values and
are carried at fair value on the financial statements of such funds, substantially all of which are
audited annually. The amount that an investor is entitled to receive upon the redemption of its investment from the
applicable fund is determined by reference to such
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">security values. The Company utilizes the
financial statements furnished by the funds to determine the values of its investments in such
funds and the carrying value of each such investment, which is based on its proportionate interest
in the relevant fund as of the balance sheet date. The carrying values of all other invested
assets and separate account liabilities approximate their fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values of policyholder account balances are net of reinsurance receivables and the
carrying values have been decreased for related acquisition costs of $80.0 million and $82.1
million at March 31, 2011 and December 31, 2010, respectively. Fair values for policyholder
account balances were determined by estimating future cash flows discounted at a current market
rate.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes that the fair value of its variable rate long-term debt is equal to its
carrying value, since the variable rates of interest on this debt are reflective of market
conditions in effect from time to time. The fair values of the 7.875% Senior Notes due 2020, the
outstanding borrowings under the Company’s Credit Agreement with Bank of America, N.A., as
administrative agent, and a group of lenders and the 7.376% fixed-to-floating rate junior
subordinated debentures due 2067 are based on the expected cash flows discounted to net present
value. The fair values for fixed rate advances from the FHLB were calculated using discounted cash
flow analyses based on the interest rates for the advances at the balance sheet date.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
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