Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of financial instruments are shown below (in thousands):

	September 30, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Fixed maturity securities, bonds held-to-maturity	$	7,689,551	$	7,993,004	$	8,225,050	$	8,652,913
Fixed maturity securities, bonds available-for-sale		5,334,656		5,334,656		4,921,807		4,921,807
Equity securities		1,410,636		1,410,636		1,516,978		1,516,978
Equity-indexed options		141,385		141,385		189,449		189,449
Mortgage loans on real estate, net of allowance		3,444,403		3,670,607		3,359,586		3,618,944
Policy loans		406,728		406,728		405,979		405,979
Short-term investments		494,496		494,496		431,000		431,000
Separate account assets		894,890		894,890		1,001,515		1,001,515
Total financial assets	$	19,816,745	$	20,346,402	$	20,051,364	$	20,738,585
Financial liabilities
Investment contracts	$	8,711,223	$	8,711,223	$	8,894,747	$	8,894,747
Embedded derivative liability for equity-indexed contracts		207,302		207,302		208,187		208,187
Notes payable		126,145		126,145		108,177		108,177
Separate account liabilities		894,890		894,890		1,001,515		1,001,515
Total financial liabilities	$	9,939,560	$	9,939,560	$	10,212,626	$	10,212,626

Quantitative Disclosures Regarding Fair Value Hierarchy Measurements

The fair value hierarchy measurements of the financial instruments are shown below (in thousands):

	Fair Value Measurement as of September 30, 2015
	Total Fair Value		Level 1		Level 2		Level 3
Financial assets
Fixed maturity securities, bonds held-to-maturity
U.S. states and political subdivisions	$	350,259	$	—	$	350,259	$	—
Foreign governments		5,086		—		5,086		—
Corporate debt securities		7,309,672		—		7,261,358		48,314
Residential mortgage-backed securities		309,546		—		308,605		941
Collateralized debt securities		2,055		—		2,055		—
Other debt securities		16,386		—		12,530		3,856
Total bonds held-to-maturity		7,993,004		—		7,939,893		53,111
Fixed maturity securities, bonds available-for-sale
U.S. treasury and government		24,839		—		24,839		—
U.S. states and political subdivisions		958,320		—		955,825		2,495
Foreign governments		6,929		—		6,929		—
Corporate debt securities		4,305,059		—		4,298,265		6,794
Residential mortgage-backed securities		29,841		—		28,038		1,803
Collateralized debt securities		9,668		—		7,769		1,899
Total bonds available-for-sale		5,334,656		—		5,321,665		12,991
Equity securities
Common stock		1,387,049		1,387,049		—		—
Preferred stock		23,587		23,587		—		—
Total equity securities		1,410,636		1,410,636		—		—
Options		141,385		—		—		141,385
Mortgage loans on real estate		3,670,607		—		3,670,607		—
Policy loans		406,728		—		—		406,728
Short-term investments		494,496		—		494,496		—
Separate account assets		894,890		—		894,890		—
Total financial assets	$	20,346,402	$	1,410,636	$	18,321,551	$	614,215
Financial liabilities
Investment contracts	$	8,711,223	$	—	$	—	$	8,711,223
Embedded derivative liability for equity-indexed contracts		207,302		—		—		207,302
Notes payable		126,145		—		—		126,145
Separate account liabilities		894,890		—		894,890		—
Total financial liabilities	$	9,939,560	$	—	$	894,890	$	9,044,670

	Fair Value Measurement as of December 31, 2014
	Total Fair Value		Level 1		Level 2		Level 3
Financial assets
Fixed maturity securities, bonds held-to-maturity
U.S. states and political subdivisions	$	349,760	$	—	$	349,760	$	—
Foreign governments		30,423		—		30,423		—
Corporate debt securities		7,894,725		—		7,833,564		61,161
Residential mortgage-backed securities		357,635		—		356,670		965
Collateralized debt securities		2,470		—		—		2,470
Other debt securities		17,900		—		12,975		4,925
Total bonds held-to-maturity		8,652,913		—		8,583,392		69,521
Fixed maturity securities, bonds available-for-sale
U.S. treasury and government		23,233		—		23,233		—
U.S. states and political subdivisions		837,616		—		835,106		2,510
Foreign governments		7,021		—		7,021		—
Corporate debt securities		4,000,049		—		3,941,925		58,124
Residential mortgage-backed securities		42,399		—		40,473		1,926
Collateralized debt securities		11,489		—		9,616		1,873
Total bonds available-for-sale		4,921,807		—		4,857,374		64,433
Equity securities
Common stock		1,487,125		1,487,125		—		—
Preferred stock		29,853		29,853		—		—
Total equity securities		1,516,978		1,516,978		—		—
Options		189,449		—		—		189,449
Mortgage loans on real estate		3,618,944		—		3,618,944		—
Policy loans		405,979		—		—		405,979
Short-term investments		431,000		—		431,000		—
Separate account assets		1,001,515		—		1,001,515		—
Total financial assets	$	20,738,585	$	1,516,978	$	18,492,225	$	729,382
Financial liabilities
Investment contracts	$	8,894,747	$	—	$	—	$	8,894,747
Embedded derivative liability for equity-indexed contracts		208,187		—		—		208,187
Notes payable		108,177		—		—		108,177
Separate account liabilities		1,001,515		—		1,001,515		—
Total financial liabilities	$	10,212,626	$	—	$	1,001,515	$	9,211,111

Financial Instruments Measured at Fair Value on Recurring Basis Using (Level 3) Inputs

For financial instruments measured at fair value on a recurring basis using Level 3 inputs during the period, a reconciliation of the beginning and ending balances is shown below (in thousands):

	Level 3
	Three months ended September 30,									Nine months ended September 30,
	Assets						Liability			Assets						Liability
				Equity-									Equity-
	Investment			Indexed			Embedded			Investment			Indexed			Embedded
	Securities			Options			Derivative			Securities			Options			Derivative
Beginning balance, 2015	$	67,200		$	183,963		$	208,827		$	64,433		$	189,449		$	208,187
Total realized and unrealized investment gains (losses) included in other comprehensive income		150			—			—			(18	)		—			—
Net fair value change included in realized gains (losses)		—			—			—			—			—			—
Net gain (loss) for derivatives included in net investment income		—			(34,643	)		—			—			(39,266	)		—
Net change included in interest credited		—			—			(16,780	)		—			—			(19,997	)
Purchases, sales and settlements or maturities
Purchases		—			5,725			—			—			15,313			—
Sales		120			(11,160	)		—			(1	)		(11,160	)		—
Settlements or maturities		(1	)		(2,500	)		—			(343	)		(12,951	)		—
Premiums less benefits		—			—			15,255			—			—			19,112
Gross transfers into Level 3		—			—			—			3,398			—			—
Gross transfers out of Level 3		(54,478	)		—			—			(54,478	)		—			—
Ending balance September 30, 2015	$	12,991		$	141,385		$	207,302		$	12,991		$	141,385		$	207,302
Beginning balance, 2014	$	11,932		$	163,861		$	186,261		$	48,304		$	164,753		$	148,435
Total realized and unrealized investment gains (losses) included in other comprehensive income		138			—			—			(11,735	)		—			—
Net fair value change included in realized gains (losses)		—			—			—			13,056			—			—
Net gain (loss) for derivatives included in net investment income		—			4,998			—			—			23,788			—
Net change included in interest credited		—			—			1,762			—			—			16,484
Purchases, sales and settlements or maturities
Purchases		—			3,655			—			—			12,345			—
Sales		(120	)		—			—			(37,670	)		—			—
Settlements or maturities		(5	)		(2,171	)		—			(10	)		(30,543	)		—
Premiums less benefits		—			—			3,737			—			—			26,841
Gross transfers into Level 3		30,199			—			—			30,199			—			—
Gross transfers out of Level 3		—			—			—			—			—			—
Ending balance September 30, 2014	$	42,144		$	170,343		$	191,760		$	42,144		$	170,343		$	191,760