Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 12, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 333-18053 | |
Entity Registrant Name | PRUCO LIFE INSURANCE OF NEW JERSEY | |
Entity Central Index Key | 0001038509 | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 22-2426091 | |
Entity Address, Address Line One | 213 Washington Street | |
Entity Address, City or Town | Newark | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07102 | |
City Area Code | 973 | |
Local Phone Number | 802-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 400,000 |
Unaudited Interim Statements of
Unaudited Interim Statements of Financial Position - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
ASSETS | |||
Fixed maturities available for sale, at fair value (amortized cost: 2020 - $1,599,264; 2019–$1,437,796) | $ 1,808,546 | $ 1,550,096 | |
Fixed maturities, trading, at fair value (amortized cost: 2020 - $17,718; 2019–$14,221) | 17,857 | 13,700 | |
Equity securities, at fair value (cost: 2020 - $5,065; 2019–$5,139) | 8,438 | 7,512 | |
Policy loans | 212,519 | 211,986 | |
Commercial mortgage and other loans (net of $448 and $165 allowance for credit losses at September 30, 2020 and December 31, 2019, respectively) | 136,705 | [1] | 143,098 |
Other invested assets (includes $29,122 and $24,726 of assets measured at fair value at September 30, 2020 and December 31, 2019, respectively) | 103,429 | 89,536 | |
Total investments | 2,287,494 | 2,015,928 | |
Cash and cash equivalents | 68,360 | 55,924 | |
Deferred policy acquisition costs | 213,072 | 178,813 | |
Accrued investment income | 21,027 | 19,539 | |
Reinsurance recoverables | 4,116,435 | 3,200,642 | |
Receivables from parent and affiliates | 32,775 | 32,820 | |
Income taxes receivable | 0 | 6,268 | |
Other assets | 20,042 | 21,203 | |
Separate account assets | 15,887,732 | 15,904,208 | |
TOTAL ASSETS | 22,646,937 | 21,435,345 | |
LIABILITIES | |||
Future policy benefits | 3,235,868 | 2,302,959 | |
Policyholders’ account balances | 2,508,775 | 2,424,120 | |
Cash collateral for loaned securities | 2,731 | 2,481 | |
Income taxes payable | 2,528 | [1] | 0 |
Short-term debt to affiliates | 0 | 89 | |
Payables to parent and affiliates | 13,661 | 24,958 | |
Other liabilities | 163,252 | [1] | 140,628 |
Separate account liabilities | 15,887,732 | 15,904,208 | |
Total liabilities | 21,814,547 | 20,799,443 | |
EQUITY | |||
Common stock ($5 par value; 400,000 shares authorized, issued and outstanding) | 2,000 | 2,000 | |
Additional paid-in capital | 348,735 | 268,021 | |
Retained earnings | 323,986 | 280,246 | |
Accumulated other comprehensive income (loss) | 157,669 | 85,635 | |
Total equity | 832,390 | 635,902 | |
TOTAL LIABILITIES AND EQUITY | $ 22,646,937 | $ 21,435,345 | |
[1] | September 30, 2020 amounts include the impacts of the January 1, 2020 adoption of ASU 2016-13. See Note 2 for details. |
Unaudited Interim Statements _2
Unaudited Interim Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available-for-sale, amortized cost | $ 1,599,264 | $ 1,437,796 |
Fixed maturities, trading, amortized cost | 17,718 | 14,221 |
Equity securities, at cost | 5,065 | 5,139 |
Commercial mortgage and other loans, allowance for credit losses | 448 | 165 |
Other invested assets, at fair value | $ 29,122 | $ 24,726 |
Common stock, par value (in dollars per share) | $ 5 | $ 5 |
Common stock, shares authorized | 400,000 | 400,000 |
Common stock, shares issued | 400,000 | 400,000 |
Common stock, shares outstanding | 400,000 | 400,000 |
Unaudited Interim Statements _3
Unaudited Interim Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUES | ||||
Premiums | $ 5,586 | $ 3,099 | $ 15,909 | $ 9,718 |
Policy charges and fee income | 14,623 | 10,344 | 56,835 | 52,798 |
Net investment income | 23,260 | 18,059 | 60,908 | 56,272 |
Asset administration fees | 1,756 | 1,500 | 4,867 | 4,292 |
Other income | 3,371 | 452 | 3,062 | 3,095 |
Realized investment gains (losses), net | 2,535 | 2,719 | 8,088 | (8,447) |
TOTAL REVENUES | 51,131 | 36,173 | 149,669 | 117,728 |
BENEFITS AND EXPENSES | ||||
Policyholders’ benefits | 1,227 | 2,397 | 31,356 | 22,725 |
Interest credited to policyholders’ account balances | 10,836 | 13,759 | 33,014 | 32,817 |
Amortization of deferred policy acquisition costs | 6,297 | 3,519 | 13,576 | 10,918 |
General, administrative and other expenses | 12,488 | 7,885 | 33,257 | 21,841 |
TOTAL BENEFITS AND EXPENSES | 30,848 | 27,560 | 111,203 | 88,301 |
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES | 20,283 | 8,613 | 38,466 | 29,427 |
Income tax expense (benefit) | 1,283 | 247 | (5,441) | 19 |
NET INCOME (LOSS) | 19,000 | 8,366 | 43,907 | 29,408 |
Other comprehensive income (loss), before tax: | ||||
Foreign currency translation adjustments | 92 | (64) | 133 | (60) |
Net unrealized investment gains (losses) | 14,591 | 40,681 | 91,050 | 133,542 |
Total | 14,683 | 40,617 | 91,183 | 133,482 |
Less: Income tax expense (benefit) related to other comprehensive income (loss) | 3,083 | 8,530 | 19,149 | 28,031 |
Other comprehensive income (loss), net of taxes | 11,600 | 32,087 | 72,034 | 105,451 |
Comprehensive income (loss) | $ 30,600 | $ 40,453 | $ 115,941 | $ 134,859 |
Unaudited Interim Statements _4
Unaudited Interim Statements of Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative effect of adoption of accounting changes | Cumulative effect of adoption of accounting changesRetained Earnings | ||
Beginning balance at Dec. 31, 2018 | $ 444,721,000 | $ 2,000,000 | $ 213,261,000 | $ 243,827,000 | $ (14,367,000) | $ (336,000) | [1] | $ (336,000) | [1] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | 0 | |||||||
Contributed (distributed) capital-parent/child asset transfers | 0 | 0 | |||||||
Net income (loss) | 10,545,000 | 10,545,000 | |||||||
Other comprehensive income (loss), net of tax | 36,812,000 | 36,812,000 | |||||||
Total comprehensive income (loss) | 47,357,000 | ||||||||
Ending balance at Mar. 31, 2019 | 491,742,000 | 2,000,000 | 213,261,000 | 254,036,000 | 22,445,000 | ||||
Beginning balance at Dec. 31, 2018 | 444,721,000 | 2,000,000 | 213,261,000 | 243,827,000 | (14,367,000) | (336,000) | [1] | (336,000) | [1] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 29,408,000 | ||||||||
Other comprehensive income (loss), net of tax | 105,451,000 | ||||||||
Ending balance at Sep. 30, 2019 | 579,244,000 | 2,000,000 | 213,261,000 | 272,899,000 | 91,084,000 | ||||
Beginning balance at Mar. 31, 2019 | 491,742,000 | 2,000,000 | 213,261,000 | 254,036,000 | 22,445,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | 0 | |||||||
Contributed (distributed) capital-parent/child asset transfers | 0 | 0 | |||||||
Net income (loss) | 10,497,000 | 10,497,000 | |||||||
Other comprehensive income (loss), net of tax | 36,552,000 | 36,552,000 | |||||||
Total comprehensive income (loss) | 47,049,000 | ||||||||
Ending balance at Jun. 30, 2019 | 538,791,000 | 2,000,000 | 213,261,000 | 264,533,000 | 58,997,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | 0 | |||||||
Contributed (distributed) capital-parent/child asset transfers | 0 | 0 | |||||||
Net income (loss) | 8,366,000 | 8,366,000 | |||||||
Other comprehensive income (loss), net of tax | 32,087,000 | 32,087,000 | |||||||
Total comprehensive income (loss) | 40,453,000 | ||||||||
Ending balance at Sep. 30, 2019 | 579,244,000 | 2,000,000 | 213,261,000 | 272,899,000 | 91,084,000 | ||||
Beginning balance at Dec. 31, 2019 | 635,902,000 | 2,000,000 | 268,021,000 | 280,246,000 | 85,635,000 | (167,000) | [2] | (167,000) | [2] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 85,112,000 | 85,112,000 | |||||||
Contributed (distributed) capital-parent/child asset transfers | (4,268,000) | (4,268,000) | |||||||
Net income (loss) | 14,545,000 | 14,545,000 | |||||||
Other comprehensive income (loss), net of tax | (16,565,000) | (16,565,000) | |||||||
Total comprehensive income (loss) | (2,020,000) | ||||||||
Ending balance at Mar. 31, 2020 | 714,559,000 | 2,000,000 | 348,865,000 | 294,624,000 | 69,070,000 | ||||
Beginning balance at Dec. 31, 2019 | 635,902,000 | 2,000,000 | 268,021,000 | 280,246,000 | 85,635,000 | $ (167,000) | [2] | $ (167,000) | [2] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 43,907,000 | ||||||||
Other comprehensive income (loss), net of tax | 72,034,000 | ||||||||
Ending balance at Sep. 30, 2020 | 832,390,000 | 2,000,000 | 348,735,000 | 323,986,000 | 157,669,000 | ||||
Beginning balance at Mar. 31, 2020 | 714,559,000 | 2,000,000 | 348,865,000 | 294,624,000 | 69,070,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | 0 | |||||||
Contributed (distributed) capital-parent/child asset transfers | (130,000) | (130,000) | |||||||
Net income (loss) | 10,362,000 | 10,362,000 | |||||||
Other comprehensive income (loss), net of tax | 76,999,000 | 76,999,000 | |||||||
Total comprehensive income (loss) | 87,361,000 | ||||||||
Ending balance at Jun. 30, 2020 | 801,790,000 | 2,000,000 | 348,735,000 | 304,986,000 | 146,069,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | 0 | |||||||
Contributed (distributed) capital-parent/child asset transfers | 0 | 0 | |||||||
Net income (loss) | 19,000,000 | 19,000,000 | |||||||
Other comprehensive income (loss), net of tax | 11,600,000 | 11,600,000 | |||||||
Total comprehensive income (loss) | 30,600,000 | ||||||||
Ending balance at Sep. 30, 2020 | $ 832,390,000 | $ 2,000,000 | $ 348,735,000 | $ 323,986,000 | $ 157,669,000 | ||||
[1] | Includes the impact from the adoption of ASU 2017-08 and 2017-12. See Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information. | ||||||||
[2] | Includes the impact from the adoption of ASU 2016-13. See Note 2. |
Unaudited Interim Statements _5
Unaudited Interim Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 43,907 | $ 29,408 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Policy charges and fee income | (19,045) | (13,874) | [1] |
Interest credited to policyholders’ account balances | 33,014 | 32,817 | |
Realized investment (gains) losses, net | (8,088) | 8,447 | |
Amortization and other non-cash items | (4,695) | (9,565) | |
Change in: | |||
Future policy benefits | 208,507 | 209,451 | |
Reinsurance recoverables | (187,085) | (197,372) | |
Accrued investment income | (1,488) | (588) | |
Net payables to/receivables from parent and affiliates | (12,876) | (1,497) | |
Deferred policy acquisition costs | (42,715) | (16,068) | |
Income taxes | (9,139) | (9,256) | |
Derivatives, net | 1,605 | (1,548) | |
Other, net | 882 | (13,181) | |
Cash flows from (used in) operating activities | 2,784 | 17,174 | |
Proceeds from the sale/maturity/prepayment of: | |||
Fixed maturities, available-for-sale | 35,035 | 45,863 | |
Equity securities | 84 | 3,298 | |
Policy loans | 20,129 | 19,997 | |
Ceded policy loans | (1,185) | (967) | |
Commercial mortgage and other loans | 9,737 | 9,163 | |
Other invested assets | 1,542 | 1,451 | |
Payments for the purchase/origination of: | |||
Fixed maturities, available-for-sale | (117,524) | (139,109) | |
Fixed maturities, trading | (3,497) | (6,776) | |
Equity securities | 0 | (50) | |
Policy loans | (16,249) | (17,942) | |
Ceded policy loans | 3,381 | 1,749 | |
Commercial mortgage and other loans | (3,616) | (25,088) | |
Other invested assets | (7,923) | (11,821) | |
Notes receivable from parent and affiliates, net | 1,398 | 6,254 | |
Derivatives, net | 315 | (173) | |
Other, net | 93 | (246) | |
Cash flows from (used in) investing activities | (78,280) | (114,397) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Policyholders’ account deposits | 403,557 | 425,091 | |
Ceded policyholders’ account deposits | (265,304) | (259,621) | |
Policyholders’ account withdrawals | (247,216) | (263,941) | [1] |
Ceded policyholders’ account withdrawals | 189,038 | 169,411 | |
Net change in securities sold under agreement to repurchase and cash collateral for loaned securities | 250 | (174) | |
Contributed (distributed) capital - parent/child asset transfers | (5,567) | 0 | |
Net change in all other financing arrangements (maturities 90 days or less) | (89) | 0 | |
Drafts outstanding | 6,046 | (5,652) | |
Other, net | 7,217 | (7,606) | [1] |
Cash flows from (used in) financing activities | 87,932 | 57,508 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 12,436 | (39,715) | |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 55,924 | 70,441 | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 68,360 | 30,726 | |
Significant Non-Cash Transactions | |||
Non-cash assets received | $ 85,000 | $ 0 | |
[1] | Prior period amounts have been revised to correct an error. See Note 11 for details. |
Business and Basis of Presentat
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | BUSINESS AND BASIS OF PRESENTATION Pruco Life Insurance Company of New Jersey ("PLNJ") is a wholly-owned subsidiary of Pruco Life Insurance Company (“Pruco Life”), which in turn is a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential Insurance”). Prudential Insurance is a direct wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). PLNJ is a stock life insurance company organized in 1982 under the laws of the State of New Jersey. It is licensed to sell life insurance and annuities in New Jersey and New York only, and sells such products primarily through affiliated and unaffiliated distributors. Basis of Presentation The Unaudited Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs ("DAC") and related amortization; policyholders' account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life products; valuation of investments including derivatives, measurement of allowance for credit losses, and recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; reinsurance recoverables; provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters. COVID-19 Beginning in the first quarter of 2020, the outbreak of the novel coronavirus (“COVID-19”) has resulted in extreme stress and disruption in the global economy and financial markets, and has adversely impacted, and may continue to adversely impact, our results of operations, financial condition and cash flows. Due to the highly uncertain nature of these conditions, it is not possible to estimate the ultimate impacts at this time. The risks may have manifested, and may continue to manifest, in our financial statements in the areas of, among others, i) investments: increased risk of loss on our investments due to default or deterioration in credit quality or value; and ii) insurance liabilities and related balances: potential changes to assumptions regarding investment returns, mortality and policyholder behavior which are reflected in our insurance liabilities and certain related balances (e.g., DAC, etc.). We cannot predict what impact the COVID-19 pandemic will ultimately have on the global economy, markets or our businesses. Revision to Prior Period Financial Statements The Company identified an error in the presentation of certain cash flow activity related to policyholders' account balances that impacted several line items within previously issued Statements of Cash Flows. Prior period amounts have been revised in the financial statements to correct this error. Management evaluated these adjustments and concluded they were not material to any previously reported quarterly or annual financial statements. See Note 11 for a more detailed description of the revision and for comparisons of amounts previously reported to the revised amounts. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Significant Accounting Policies
Significant Accounting Policies and Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Pronouncements | SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of Accounting Standards Updates ("ASUs") to the FASB Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of September 30, 2020, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material. Adoption of ASU 2016-13 The Company adopted ASU 2016-13, and related ASUs, effective January 1, 2020 using the modified retrospective method for certain financial assets carried at amortized cost and certain off-balance sheet exposures. The modified retrospective method results in a cumulative effect adjustment to opening retained earnings. The Company adopted the guidance related to fixed maturities, available-for-sale on a prospective basis. This ASU requires the use of a new current expected credit loss (“CECL”) model to account for expected credit losses on certain financial assets reported at amortized cost (e.g., loans held for investment, reinsurance receivables, etc.) and certain off-balance sheet credit exposures (e.g., indemnification of serviced mortgage loans and certain loan commitments). The guidance requires an entity to estimate lifetime credit losses related to such financial assets and credit exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that may affect the collectability of the reported amounts. The standard also modifies the OTTI guidance for fixed maturities, available-for-sale requiring the use of an allowance rather than a direct write-down of the investment. The impacts of this ASU on the Company’s Financial Statements primarily include (1) A Cumulative Effect Adjustment Upon Adoption; (2) Changes to the Presentation of the Statements of Financial Position and Statements of Operations; and (3) Changes to Accounting Policies. Each of these impacts is described below. This section is meant to serve as an update to, and should be read in conjunction with, Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. (1) Cumulative Effect Adjustment Upon Adoption Adoption of the standard resulted in a cumulative effect adjustment to opening retained earnings in the amount of $0.2 million, primarily related to commercial mortgage and other loans. The impact of adoption is not material to the following financial statement line items: income taxes payable and other liabilities. The prospective adoption of the portions of the standard related to fixed maturities, available-for-sale resulted in no impact to opening retained earnings. (2) Changes to the Presentation of the Statements of Financial Position and Statements of Operations The allowance for credit losses is presented parenthetically on relevant line items in the Statements of Financial Position. In the Statements of Operations, realized investment gains (losses), net are presented on one line item and will no longer reflect the breakout of OTTI on fixed maturity securities; OTTI on fixed maturity securities transferred to other comprehensive income (“OCI”); and other realized investment gains (losses), net. The presentation of this detail in prior periods is immaterial. (3) Changes to Accounting Policies This section has been updated to include the following changes in our accounting policies resulting from the adoption of ASU 2016-13. Fixed maturities, available-for-sale Fixed maturities, available-for-sale (“AFS debt securities”) are reported at fair value in the Statements of Financial Position. Interest income, and amortization of premium and accretion of discount are included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also vary based on other assumptions relating to the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of impairments recognized in earnings and OCI. For mortgage-backed and asset-backed securities rated below AA, the effective yield is adjusted prospectively for any changes in the estimated timing and amount of cash flows unless the investment is impaired or purchased with credit deterioration. For impaired mortgage-backed and asset-backed securities rated below AA, the effective yield is adjusted prospectively only if subsequent favorable or adverse changes in expected cash flows are not reflected in the allowance for credit losses. Prior to the adoption of this standard, the effective yield was adjusted prospectively regardless of whether the investment was impaired or not. AFS debt securities with unrealized losses are reviewed quarterly to determine whether the amortized cost basis of the security is recoverable. In evaluating whether the amortized cost basis is recoverable, the Company considers several factors including, but not limited to the extent of the decline and the reasons for the decline in value (credit events, currency or interest-rate related, including general credit spread widening), and the financial condition of the issuer. When an AFS debt security is in an unrealized loss position and (1) the Company has the intent to sell the AFS debt security, or (2) it is more likely than not the Company will be required to sell the AFS debt security before its anticipated recovery, or (3) the Company has deemed the AFS debt security to be uncollectable, the amortized cost basis of the AFS debt security is written down to fair value and any previously recognized allowance is reversed. The impairment is reported in “Realized investment gains (losses), net.” The new cost basis is not adjusted for subsequent increases in estimated fair value. For an AFS debt security in an unrealized loss position that does not meet these conditions, the Company analyzes its ability to recover the amortized cost by comparing the net present value of projected future cash flows (the “net present value”) with the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the AFS debt security at the date of acquisition. The Company may use the estimated fair value of collateral, if any, as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment, an allowance for losses is recognized in earnings for the difference between amortized cost and the net present value and is limited to the difference between amortized cost and fair value of the AFS debt security. Any difference between the fair value and the net present value of the debt security at the impairment measurement date remains in “Other comprehensive income (loss).” Changes in the allowance for losses are reported in “Realized investment gains (losses), net.” Prior to the adoption of this standard, any impairments on AFS debt securities were reported as an adjustment to the amortized cost basis of the security. Subsequent to the impairment, the AFS debt security was treated as if it were newly acquired at the date of impairment, and any increases in cash flows expected to be collected were accreted into net investment income over the life of the investment. Commercial mortgage and other loans Commercial mortgage and other loans are reported in the Statements of Financial Position at amortized cost net of the CECL allowance. Additionally, certain off-balance sheet credit exposures (e.g., indemnification of serviced mortgage loans, and certain unfunded mortgage loan commitments where the Company cannot unconditionally cancel the commitment) are also subject to a CECL allowance. The CECL allowance represents the Company’s best estimate of expected credit losses over the remaining life of the assets or off-balance sheet credit exposures. The determination of the allowance considers historical credit loss experience, current conditions, and reasonable and supportable forecasts. The allowance is calculated separately for commercial mortgage loans, agricultural mortgage loans, and other collateralized and uncollateralized loans. For commercial mortgage and agricultural mortgage loans (and related unfunded commitments where the Company cannot unconditionally cancel the commitment), the allowance is calculated using an internally developed CECL model. Key inputs to the CECL model include unpaid principal balances, internal credit ratings, annual expected loss factors, average lives of the loans adjusted for prepayment considerations, current and historical interest rate assumptions, and other factors influencing the Company’s view of the current stage of the economic cycle and future economic conditions. Subjective considerations include a review of whether historical loss experience is representative of current market conditions and the Company’s view of the credit cycle. Model assumptions and factors are reviewed and updated as appropriate. Information about certain key inputs is detailed below. Key factors in determining the internal credit ratings for commercial mortgage and agricultural mortgage loans include loan-to-value and debt-service-coverage ratios. Other factors include amortization, loan term, and estimated market value growth rate and volatility for the property type and region. The loan-to-value ratio compares the carrying amount of the loan to the fair value of the underlying property or properties collateralizing the loan and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the carrying amount of the loan exceeds the collateral value. A loan-to-value ratio less than 100% indicates an excess of collateral value over the carrying amount of the loan. The debt-service-coverage ratio is a property’s net operating income as a percentage of its debt service payments. Debt-service-coverage ratios less than 1.0 times indicate that a property’s operations do not generate enough income to cover the loan’s current debt payments. A debt-service-coverage ratio greater than 1.0 times indicates an excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company’s periodic review of the commercial mortgage and agricultural mortgage loan portfolios, which includes an internal appraisal of the underlying collateral value. The Company’s periodic review also includes a credit re-rating process, whereby the internal credit rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary credit quality rating system. See Note 3 for additional information related to the loan-to-value ratios and debt-service-coverage ratios related to the Company’s commercial mortgage and agricultural mortgage loan portfolios. Generally, every loan is re-rated at least annually. Annual expected loss rates are based on historical default and loss experience factors. Using average lives, the annual expected loss rates are converted into life-of-loan loss expectations. When individual loans no longer have the credit risk characteristics of the commercial or agricultural mortgage loan pools, they are removed from the pools and are evaluated individually for an allowance. The allowance is determined based on the outstanding loan balance less the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. The CECL allowance on commercial mortgage and other loans can increase or decrease from period to period based on the factors noted above. The change in allowance is reported in “Realized investment gains (losses), net.” As it relates to unfunded commitments that are in scope of this guidance, the CECL allowance is reported in “Other liabilities”, and the change in the allowance is reported in “Realized investment gains (losses), net.” When a commercial mortgage or other loan is deemed to be uncollectible, any allowance is reversed and a direct write-down of the carrying amount of the loan is recorded through "Realized investment gains (losses), net." The carrying amount of the loan is not adjusted for subsequent recoveries in value. The CECL allowance for other collateralized and uncollateralized loans carried at amortized cost is determined based on probability of default and loss given default assumptions by sector, credit quality and average lives of the loans. Additions to or releases of the allowance are reported in “Realized investment gains (losses), net.” Prior to the adoption of this standard, the impairments on commercial mortgage and other loans were collectively reviewed at a portfolio level for impairment based on probable incurred but not specifically identified losses with any such losses reflected in an allowance for credit losses. When a loan was individually identified to be impaired, the loan was individually evaluated for an allowance. Changes in these allowances were reported in “Realized investment gains (losses), net.” Additionally, an allowance for credit losses was not required on unfunded loan commitments. Reinsurance Recoverables Reinsurance recoverables are reported on the Statements of Financial Position net of the CECL allowance. The CECL allowance considers the credit quality of the reinsurance counterparty and is generally determined based on the probability of default and loss given default assumptions, after considering any applicable collateral arrangements. The CECL allowance does not apply to reinsurance recoverables with affiliated counterparties under common control. Additions to or releases of the allowance are reported in “Policyholders’ benefits.” Prior to the adoption of this standard, an allowance for credit losses for reinsurance recoverables was established only when it was deemed probable that a reinsurer may fail to make payments to us in a timely manner. Other ASUs adopted during the nine months ended September 30, 2020. Standard Description Effective date and method of adoption Effect on the financial statements or other significant matters ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU provides optional relief for certain contracts impacted by reference rate reform. The standard permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. The ASU also temporarily (until December 31, 2022) allows hedge relationships to continue without de-designation upon changes due to reference rate reform. March 12, 2020 to December 31, 2022 using the prospective method. This ASU did not have a significant impact on the Company’s Financial Statements and Notes to the Financial Statements. ASU issued but not yet adopted as of September 30, 2020 — ASU 2018-12 ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Company’s Financial Statements and Notes to the Financial Statements. In October 2019, the FASB issued ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date to affirm its decision to defer the effective date of ASU 2018-12 to January 1, 2022 (with early adoption permitted), representing a one year extension from the original effective date of January 1, 2021. As a result of the COVID-19 pandemic, in November 2020 the FASB issued ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application to defer for an additional one year the effective date of ASU 2018-12 from January 1, 2022 to January 1, 2023, and to provide transition relief to facilitate the early adoption of the ASU. The transition relief would allow large calendar-year public companies that early adopt ASU 2018-12 to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in the 2022 financial statements. Companies that do not early adopt ASU 2018-12 would apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements. ASU 2018-12 will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to how earnings emerge thereafter. ASU 2018-12 Amended Topic Description Method of adoption Effect on the financial statements or other significant matters Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Statements of Operations. An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in Accumulated other comprehensive income (loss) ("AOCI") or (2) a full retrospective transition method. The options for method of adoption and the impacts of such methods are under assessment. Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield, which will be updated each quarter with the impact recorded through OCI. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the discount rate assumptions. As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of either the beginning of the prior year (if early adoption is elected) or the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI. Upon adoption, under either transition method, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between discount rates locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed. Amortization of DAC and other balances Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements ("DSI"), to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability. An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its liability for future policy benefits, as described above, it is required to also use a full retrospective transition method for DAC and other balances. The options for method of adoption and the impacts of such methods are under assessment. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI. Market Risk Benefits (MRB) Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value, and record MRB assets and liabilities separately on the Statements of Financial Position. Changes in fair value of market risk benefits are recorded in net income, except for the portion of the change in MRB liabilities attributable to changes in an entity’s non-performance risk ("NPR"), which is recognized in OCI. An entity shall adopt the guidance for market risk benefits using the retrospective transition method which includes a cumulative-effect adjustment on the balance sheet as of either the beginning of prior year (if early adoption is elected) or the beginning of the earliest period presented. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the balance of the market risk benefits upon adoption. Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments [Abstract] | |
Investments | 1.2X 1.0X to <1.2X < 1.0X Total (in thousands) Loan-to-Value Ratio: 0%-59.99% $ 89,855 $ 1,131 $ 0 $ 90,986 60%-69.99% 42,726 1,877 0 44,603 70%-79.99% 2,695 1,519 0 4,214 80% or greater 0 0 0 0 Total commercial mortgage loans $ 135,276 $ 4,527 $ 0 $ 139,803 Agricultural property loans December 31, 2019 Debt Service Coverage Ratio >1.2X 1.0X to <1.2X < 1.0X Total (in thousands) Loan-to-Value Ratio: 0%-59.99% $ 3,460 $ 0 $ 0 $ 3,460 60%-69.99% 0 0 0 0 70%-79.99% 0 0 0 0 80% or greater 0 0 0 0 Total agricultural property loans $ 3,460 $ 0 $ 0 $ 3,460 See Note 2 for additional information about the Company's commercial mortgage and other loans credit quality monitoring process. The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated: September 30, 2020 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 134,718 $ 0 $ 0 $ 0 $ 134,718 $ 0 Agricultural property loans 2,435 0 0 0 2,435 0 Total $ 137,153 $ 0 $ 0 $ 0 $ 137,153 $ 0 (1) As of September 30, 2020, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. December 31, 2019 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 139,803 $ 0 $ 0 $ 0 $ 139,803 $ 0 Agricultural property loans 3,460 0 0 0 3,460 0 Total $ 143,263 $ 0 $ 0 $ 0 $ 143,263 $ 0 (1) As of December 31, 2019, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There were no loans on non-accrual status with a related allowance for credit losses which recognized interest income for both the three and nine months ended September 30, 2020. The Company did not have any commercial mortgage and other loans purchased with credit deterioration, as of September 30, 2020. For both the three and nine months ended September 30, 2020 and 2019, there were no commercial mortgage and other loans acquired, other than those through direct origination, and there were no commercial mortgage and other loans sold. Other Invested Assets The following table sets forth the composition of “Other invested assets,” as of the dates indicated: September 30, 2020 December 31, 2019 (in thousands) Company’s investment in separate accounts $ 3,325 $ 3,418 LPs/LLCs: Equity method: Private equity 34,157 26,609 Hedge funds 32,375 30,629 Real estate-related 4,450 4,154 Subtotal equity method 70,982 61,392 Fair value: Private equity 586 774 Hedge funds 69 78 Real estate-related 2,320 2,490 Subtotal fair value 2,975 3,342 Total LPs/LLCs 73,957 64,734 Derivative instruments 26,147 21,384 Total other invested assets $ 103,429 $ 89,536 Accrued Investment Income The following table sets forth the composition of “Accrued investment income,” as of the date indicated: September 30, 2020 (in thousands) Fixed maturities $ 14,807 Equity securities 92 Commercial mortgage and other loans 380 Policy loans 5,735 Short-term investments and cash equivalents 13 Total accrued investment income $ 21,027 There were no write-downs on accrued investment income for both the three and nine months ended September 30, 2020. Net Investment Income The following table sets forth “Net investment income” by investment type, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities, available-for-sale $ 15,531 $ 13,858 $ 45,374 $ 41,664 Fixed maturities, trading 144 95 386 258 Equity securities 91 91 273 273 Commercial mortgage and other loans 1,331 1,283 4,175 3,784 Policy loans 2,899 2,967 8,660 8,547 Other invested assets 4,300 506 4,625 3,602 Short-term investments and cash equivalents 40 143 399 745 Gross investment income 24,336 18,943 63,892 58,873 Less: investment expenses (1,076) (884) (2,984) (2,601) Net investment income $ 23,260 $ 18,059 $ 60,908 $ 56,272 Realized Investment Gains (Losses), Net The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities(1) $ 137 $ (2,290) $ (506) $ (5,769) Commercial mortgage and other loans 9 (47) (79) (14) Other invested assets 4 0 (55) 11 Derivatives 2,393 5,053 8,771 (2,680) Short term investments and cash equivalents (8) 3 (43) 5 Realized investment gains (losses), net $ 2,535 $ 2,719 $ 8,088 $ (8,447) (1) Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading. Net Unrealized Gains (Losses) on Investments within AOCI The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated: September 30, 2020 December 31, 2019 (in thousands) Fixed maturity securities, available-for-sale — with OTTI(1) $ N/A $ 51 Fixed maturity securities, available-for-sale — all other(1) N/A 112,249 Fixed maturity securities, available-for-sale with an allowance 0 N/A Fixed maturity securities, available-for-sale without an allowance 209,282 N/A Derivatives designated as cash flow hedges(2) 6,634 3,193 Affiliated notes 253 480 Other investments 52 66 Net unrealized gains (losses) on investments $ 216,221 $ 116,039 (1) Effective January 1, 2020, per ASU 2016-13, fixed maturity securities, available-for-sale are no longer required to be disclosed “with OTTI” and “all other.” (2) For more information on cash flow hedges, see Note 4. Repurchase Agreements and Securities Lending In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of September 30, 2020 and December 31, 2019, the Company had no repurchase agreements. The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated: September 30, 2020 December 31, 2019 Remaining Contractual Maturities of the Agreements Remaining Contractual Maturities of the Agreements Overnight & Continuous Up to 30 Days Total Overnight & Continuous Up to 30 Days Total (in thousands) Foreign public corporate securities $ 2,731 $ 0 $ 2,731 $ 2,481 $ 0 $ 2,481 Total cash collateral for loaned securities(1) $ 2,731 $ 0 $ 2,731 $ 2,481 $ 0 $ 2,481 (1) The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated." id="sjs-B4">3. INVESTMENTS Fixed Maturity Securities The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated: September 30, 2020 Amortized Gross Gross Allowance for Credit Losses Fair (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 10,694 $ 1,144 $ 0 $ 0 $ 11,838 Obligations of U.S. states and their political subdivisions 162,327 18,590 0 0 180,917 Foreign government bonds 75,345 11,069 98 0 86,316 U.S. public corporate securities 743,982 132,179 1,045 0 875,116 U.S. private corporate securities 223,616 19,538 560 0 242,594 Foreign public corporate securities 61,164 8,119 624 0 68,659 Foreign private corporate securities 157,423 9,466 2,502 0 164,387 Asset-backed securities(1) 18,027 632 47 0 18,612 Commercial mortgage-backed securities 143,234 12,821 0 0 156,055 Residential mortgage-backed securities(2) 3,452 600 0 0 4,052 Total fixed maturities, available-for-sale $ 1,599,264 $ 214,158 $ 4,876 $ 0 $ 1,808,546 (1) Includes credit-tranched securities collateralized by loan obligations and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. December 31, 2019 Amortized Gross Gross Fair OTTI (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 14,983 $ 1,032 $ 0 $ 16,015 $ 0 Obligations of U.S. states and their political subdivisions 123,505 10,172 0 133,677 0 Foreign government bonds 70,287 6,993 0 77,280 0 U.S. public corporate securities 627,880 70,167 527 697,520 0 U.S. private corporate securities 222,952 10,416 153 233,215 0 Foreign public corporate securities 53,115 4,958 80 57,993 0 Foreign private corporate securities 161,597 4,505 2,210 163,892 0 Asset-backed securities(1) 17,816 753 27 18,542 0 Commercial mortgage-backed securities 141,593 5,796 0 147,389 0 Residential mortgage-backed securities(2) 4,068 509 4 4,573 (50) Total fixed maturities, available-for-sale $ 1,437,796 $ 115,301 $ 3,001 $ 1,550,096 $ (50) (1) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $0.1 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date. The following table sets forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the date indicated: September 30, 2020 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 5,707 $ 98 $ 0 $ 0 $ 5,707 $ 98 U.S. public corporate securities 28,363 1,045 0 0 28,363 1,045 U.S. private corporate securities 10,349 560 0 0 10,349 560 Foreign public corporate securities 12,339 624 0 0 12,339 624 Foreign private corporate securities 5,819 149 35,064 2,353 40,883 2,502 Asset-backed securities 2,490 10 3,917 37 6,407 47 Residential mortgage-backed securities 0 0 0 0 0 0 Total fixed maturities, available-for-sale $ 65,067 $ 2,486 $ 38,981 $ 2,390 $ 104,048 $ 4,876 The following table sets forth the fair value and gross unrealized losses on fixed maturity securities aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the date indicated: December 31, 2019 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 0 $ 0 $ 400 $ 0 $ 400 $ 0 U.S. public corporate securities 16,892 190 1,073 337 17,965 527 U.S. private corporate securities 7,350 140 4,757 13 12,107 153 Foreign public corporate securities 2,054 23 2,427 57 4,481 80 Foreign private corporate securities 10,659 281 27,048 1,929 37,707 2,210 Asset-backed securities 1,488 12 2,985 15 4,473 27 Residential mortgage-backed securities 91 4 0 0 91 4 Total fixed maturities, available-for-sale $ 38,534 $ 650 $ 38,690 $ 2,351 $ 77,224 $ 3,001 As of September 30, 2020, the gross unrealized losses on fixed maturity available-for-sale securities without an allowance were composed of $3.8 million related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $1.1 million related to other than high or highest quality securities based on NAIC or equivalent rating. As of September 30, 2020, the $2.4 million of gross unrealized losses of twelve months or more were concentrated in the Company’s corporate securities within the finance, consumer non-cyclical, and transportation sectors. As of December 31, 2019, the gross unrealized losses on fixed maturity securities were composed of $2.4 million related to “1” highest quality or “2” high quality securities based on the NAIC or equivalent rating and $0.6 million related to other than high or highest quality securities based on NAIC or equivalent rating. As of December 31, 2019, the $2.4 million of gross unrealized losses of twelve months or more were concentrated in the Company’s corporate securities within the finance, consumer non-cyclical and energy sectors. In accordance with its policy described in Note 2, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at September 30, 2020. These conclusions were based on a detailed analysis of the underlying credit and cash flows on each security. Gross unrealized losses are primarily attributable to general credit spread widening, increases in interest rates, foreign currency exchange rate movements and the financial condition or near-term prospects of the issuer. As of September 30, 2020, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated: September 30, 2020 Amortized Cost Fair Value (in thousands) Fixed maturities, available-for-sale: Due in one year or less $ 38,528 $ 38,910 Due after one year through five years 203,196 213,078 Due after five years through ten years 206,436 221,643 Due after ten years 986,391 1,156,196 Asset-backed securities 18,027 18,612 Commercial mortgage-backed securities 143,234 156,055 Residential mortgage-backed securities 3,452 4,052 Total fixed maturities, available-for-sale $ 1,599,264 $ 1,808,546 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they do not have a single maturity date. The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs, impairments and the allowance for credit losses of fixed maturities, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities, available-for-sale: Proceeds from sales(1) $ 810 $ 482 $ 3,105 $ 12,121 Proceeds from maturities/prepayments 14,331 11,536 31,946 33,742 Gross investment gains from sales and maturities 136 7 162 150 Gross investment losses from sales and maturities 1 (2) (43) (461) OTTI recognized in earnings(2) N/A (2,295) N/A (5,458) Write-downs recognized in earnings(3) 0 N/A (625) N/A (Addition to) release of allowance for credit losses(4) 0 N/A 0 N/A (1) Includes $0.0 million and $0.0 million of non-cash related proceeds due to the timing of trade settlements for the nine months ended September 30, 2020 and 2019, respectively. (2) For the three and nine months ended September 30, 2019, amounts exclude the portion of OTTI amounts remaining in OCI, representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment. (3) For the three and nine months ended September 30, 2020, amounts represent write-downs on securities approaching maturity related to foreign exchange movements and securities actively marketed for sale. (4) Effective January 1, 2020, credit losses on available-for-sale fixed maturity securities are recorded within the "allowance for credit losses." For both the three and nine months ended September 30, 2020, there was no activity in the allowance for credit losses for fixed maturity securities. See Note 2 for additional information about the Company's methodology for developing our allowance and expected losses. The Company did not have any fixed maturity securities purchased with credit deterioration, as of September 30, 2020. Equity Securities The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income,” was $1.1 million and $0.0 million during the three months ended September 30, 2020 and 2019, respectively, and $1.0 million and $0.5 million during the nine months ended September 30, 2020 and 2019, respectively. Commercial Mortgage and Other Loans The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated: September 30, 2020 December 31, 2019 Amount % of Total Amount % of Total Commercial mortgage and agricultural property loans by property type: Apartments/Multi-Family $ 46,969 34.2 % $ 47,568 33.2 % Hospitality 14,160 10.3 14,266 10.0 Industrial 17,656 12.9 18,907 13.2 Office 23,143 16.9 24,035 16.7 Other 16,845 12.3 18,853 13.2 Retail 15,945 11.6 16,174 11.3 Total commercial mortgage loans 134,718 98.2 139,803 97.6 Agricultural property loans 2,435 1.8 3,460 2.4 Total commercial mortgage and agricultural property loans 137,153 100.0 % 143,263 100.0 % Allowance for credit losses (448) (165) Total net commercial mortgage and other loans $ 136,705 $ 143,098 As of September 30, 2020, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in New York (13%), Texas (11%) and Illinois (9%) and included loans secured by properties in Europe (10%). The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated: Three Months Ended September 30, 2020 Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Balance, beginning of period $ 457 $ 0 $ 457 Addition to (release of) allowance for expected losses (9) 0 (9) Balance, end of period $ 448 $ 0 $ 448 Nine Months Ended September 30, 2020 Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Balance at December 31, 2019 $ 164 $ 1 $ 165 Cumulative effect of adoption of ASU 2016-13 204 0 204 Addition to (release of) allowance for expected losses 80 (1) 79 Balance at September 30, 2020 $ 448 $ 0 $ 448 See Note 2 for additional information about the Company's methodology for developing our allowance and expected losses. For the nine months ended September 30, 2020, the increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to the cumulative effect of adoption of ASU 2016-13. The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated: September 30, 2020 Amortized Cost by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Total (in thousands) Commercial Mortgage Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 10,359 $ 0 $ 8,440 $ 9,751 $ 58,431 $ 0 $ 86,981 60%-69.99% 2,198 20,944 1,488 4,005 3,192 11,798 0 43,625 70%-79.99% 0 4,112 0 0 0 0 0 4,112 80% or greater 0 0 0 0 0 0 0 0 Total $ 2,198 $ 35,415 $ 1,488 $ 12,445 $ 12,943 $ 70,229 $ 0 $ 134,718 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 2,198 $ 32,042 $ 0 $ 12,445 $ 11,872 $ 68,406 $ 0 $ 126,963 1.0 - 1.2x 0 3,373 1,488 0 1,071 1,823 0 7,755 Less than 1.0x 0 0 0 0 0 0 0 0 Total $ 2,198 $ 35,415 $ 1,488 $ 12,445 $ 12,943 $ 70,229 $ 0 $ 134,718 Agricultural Property Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 60%-69.99% 0 0 0 0 0 0 0 0 70%-79.99% 0 0 0 0 0 0 0 0 80% or greater 0 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 1.0 - 1.2x 0 0 0 0 0 0 0 0 Less than 1.0x 0 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 Commercial mortgage loans December 31, 2019 Debt Service Coverage Ratio >1.2X 1.0X to <1.2X < 1.0X Total (in thousands) Loan-to-Value Ratio: 0%-59.99% $ 89,855 $ 1,131 $ 0 $ 90,986 60%-69.99% 42,726 1,877 0 44,603 70%-79.99% 2,695 1,519 0 4,214 80% or greater 0 0 0 0 Total commercial mortgage loans $ 135,276 $ 4,527 $ 0 $ 139,803 Agricultural property loans December 31, 2019 Debt Service Coverage Ratio >1.2X 1.0X to <1.2X < 1.0X Total (in thousands) Loan-to-Value Ratio: 0%-59.99% $ 3,460 $ 0 $ 0 $ 3,460 60%-69.99% 0 0 0 0 70%-79.99% 0 0 0 0 80% or greater 0 0 0 0 Total agricultural property loans $ 3,460 $ 0 $ 0 $ 3,460 See Note 2 for additional information about the Company's commercial mortgage and other loans credit quality monitoring process. The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated: September 30, 2020 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 134,718 $ 0 $ 0 $ 0 $ 134,718 $ 0 Agricultural property loans 2,435 0 0 0 2,435 0 Total $ 137,153 $ 0 $ 0 $ 0 $ 137,153 $ 0 (1) As of September 30, 2020, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. December 31, 2019 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 139,803 $ 0 $ 0 $ 0 $ 139,803 $ 0 Agricultural property loans 3,460 0 0 0 3,460 0 Total $ 143,263 $ 0 $ 0 $ 0 $ 143,263 $ 0 (1) As of December 31, 2019, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There were no loans on non-accrual status with a related allowance for credit losses which recognized interest income for both the three and nine months ended September 30, 2020. The Company did not have any commercial mortgage and other loans purchased with credit deterioration, as of September 30, 2020. For both the three and nine months ended September 30, 2020 and 2019, there were no commercial mortgage and other loans acquired, other than those through direct origination, and there were no commercial mortgage and other loans sold. Other Invested Assets The following table sets forth the composition of “Other invested assets,” as of the dates indicated: September 30, 2020 December 31, 2019 (in thousands) Company’s investment in separate accounts $ 3,325 $ 3,418 LPs/LLCs: Equity method: Private equity 34,157 26,609 Hedge funds 32,375 30,629 Real estate-related 4,450 4,154 Subtotal equity method 70,982 61,392 Fair value: Private equity 586 774 Hedge funds 69 78 Real estate-related 2,320 2,490 Subtotal fair value 2,975 3,342 Total LPs/LLCs 73,957 64,734 Derivative instruments 26,147 21,384 Total other invested assets $ 103,429 $ 89,536 Accrued Investment Income The following table sets forth the composition of “Accrued investment income,” as of the date indicated: September 30, 2020 (in thousands) Fixed maturities $ 14,807 Equity securities 92 Commercial mortgage and other loans 380 Policy loans 5,735 Short-term investments and cash equivalents 13 Total accrued investment income $ 21,027 There were no write-downs on accrued investment income for both the three and nine months ended September 30, 2020. Net Investment Income The following table sets forth “Net investment income” by investment type, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities, available-for-sale $ 15,531 $ 13,858 $ 45,374 $ 41,664 Fixed maturities, trading 144 95 386 258 Equity securities 91 91 273 273 Commercial mortgage and other loans 1,331 1,283 4,175 3,784 Policy loans 2,899 2,967 8,660 8,547 Other invested assets 4,300 506 4,625 3,602 Short-term investments and cash equivalents 40 143 399 745 Gross investment income 24,336 18,943 63,892 58,873 Less: investment expenses (1,076) (884) (2,984) (2,601) Net investment income $ 23,260 $ 18,059 $ 60,908 $ 56,272 Realized Investment Gains (Losses), Net The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities(1) $ 137 $ (2,290) $ (506) $ (5,769) Commercial mortgage and other loans 9 (47) (79) (14) Other invested assets 4 0 (55) 11 Derivatives 2,393 5,053 8,771 (2,680) Short term investments and cash equivalents (8) 3 (43) 5 Realized investment gains (losses), net $ 2,535 $ 2,719 $ 8,088 $ (8,447) (1) Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading. Net Unrealized Gains (Losses) on Investments within AOCI The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated: September 30, 2020 December 31, 2019 (in thousands) Fixed maturity securities, available-for-sale — with OTTI(1) $ N/A $ 51 Fixed maturity securities, available-for-sale — all other(1) N/A 112,249 Fixed maturity securities, available-for-sale with an allowance 0 N/A Fixed maturity securities, available-for-sale without an allowance 209,282 N/A Derivatives designated as cash flow hedges(2) 6,634 3,193 Affiliated notes 253 480 Other investments 52 66 Net unrealized gains (losses) on investments $ 216,221 $ 116,039 (1) Effective January 1, 2020, per ASU 2016-13, fixed maturity securities, available-for-sale are no longer required to be disclosed “with OTTI” and “all other.” (2) For more information on cash flow hedges, see Note 4. Repurchase Agreements and Securities Lending In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of September 30, 2020 and December 31, 2019, the Company had no repurchase agreements. The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated: September 30, 2020 December 31, 2019 Remaining Contractual Maturities of the Agreements Remaining Contractual Maturities of the Agreements Overnight & Continuous Up to 30 Days Total Overnight & Continuous Up to 30 Days Total (in thousands) Foreign public corporate securities $ 2,731 $ 0 $ 2,731 $ 2,481 $ 0 $ 2,481 Total cash collateral for loaned securities(1) $ 2,731 $ 0 $ 2,731 $ 2,481 $ 0 $ 2,481 (1) The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 4. DERIVATIVE INSTRUMENTS Types of Derivative Instruments and Derivative Strategies The Company utilizes various derivative instruments and strategies to manage its risk. Commonly used derivative instruments include, but are not necessarily limited to: • Interest rate contracts: futures, swaps, options, caps and floors • Equity contracts: futures, options and total return swaps • Foreign exchange contracts: futures, options, forwards and swaps • Credit contracts: single and index reference credit default swaps Other types of financial contracts that the Company accounts for as derivatives include: • Embedded derivatives For detailed information on these contracts and the related strategies, see Note 4 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Primary Risks Managed by Derivatives The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. September 30, 2020 December 31, 2019 Primary Underlying Risk/Instrument Type Fair Value Fair Value Gross Notional Assets Liabilities Gross Notional Assets Liabilities (in thousands) Derivatives Designated as Hedge Accounting Instruments: Currency/Interest Rate Foreign Currency Swaps $ 128,688 $ 6,257 $ (469) $ 131,212 $ 4,653 $ (1,504) Total Derivatives Designated as Hedge Accounting Instruments: $ 128,688 $ 6,257 $ (469) $ 131,212 $ 4,653 $ (1,504) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate Interest Rate Swaps $ 30,200 $ 4,851 $ 0 $ 32,075 $ 3,005 $ (5) Credit Credit Default Swaps 713 9 0 0 0 0 Currency/Interest Rate Foreign Currency Swaps 33,224 3,626 (69) 33,224 2,691 (579) Foreign Currency Foreign Currency Forwards 2,690 33 (1) 1,858 0 (36) Equity Equity Options 429,925 27,273 (15,355) 379,350 24,064 (10,919) Total Derivatives Not Qualifying as Hedge Accounting Instruments: $ 496,752 $ 35,792 $ (15,425) $ 446,507 $ 29,760 $ (11,539) Total Derivatives(1)(2) $ 625,440 $ 42,049 $ (15,894) $ 577,719 $ 34,413 $ (13,043) (1) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $1,522 million and $761 million as of September 30, 2020 and December 31, 2019, respectively included in “Future policy benefits” and $145 million and $134 million as of September 30, 2020 and December 31, 2019, respectively included in “Policyholders’ account balances". The fair value of the related reinsurance, included in "Reinsurance recoverables" or "Other liabilities" was an asset of $1,522 million and $761 million as of September 30, 2020 and December 31, 2019, respectively. (2) Recorded in "Other invested assets" and "Payables to parent and affiliates" on the Unaudited Interim Statements of Financial Position. Offsetting Assets and Liabilities The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Statements of Financial Position. September 30, 2020 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives(1) $ 42,049 $ (15,902) $ 26,147 $ (26,147) $ 0 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 42,049 $ (15,902) $ 26,147 $ (26,147) $ 0 Offsetting of Financial Liabilities: Derivatives(1) $ 15,894 $ (15,894) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 15,894 $ (15,894) $ 0 $ 0 $ 0 December 31, 2019 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives(1) $ 34,413 $ (13,029) $ 21,384 $ (21,384) $ 0 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 34,413 $ (13,029) $ 21,384 $ (21,384) $ 0 Offsetting of Financial Liabilities: Derivatives(1) $ 13,043 $ (13,043) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 13,043 $ (13,043) $ 0 $ 0 $ 0 (1) Amounts exclude the excess of collateral received/pledged from/to the counterparty. For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below and Note 9. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Cash Flow Hedges The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit or equity derivatives in any of its cash flow hedge accounting relationships. The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship. Three Months Ended September 30, 2020 Realized Net Other Income AOCI (1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ (92) $ 470 $ (763) $ (6,962) Total cash flow hedges (92) 470 (763) (6,962) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate (31) 0 0 0 Currency (96) 0 0 0 Currency/Interest Rate (1,733) 0 (16) 0 Credit (1) 0 0 0 Equity 4,281 0 0 0 Embedded Derivatives 65 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 2,485 0 (16) 0 Total $ 2,393 $ 470 $ (779) $ (6,962) Nine Months Ended September 30, 2020 Realized Net Other Income AOCI (1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ (65) $ 1,436 $ (82) $ 3,441 Total cash flow hedges (65) 1,436 (82) 3,441 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 2,063 0 0 0 Currency (65) 0 0 0 Currency/Interest Rate 1,830 0 4 0 Credit (71) 0 0 0 Equity (376) 0 0 0 Embedded Derivatives 5,455 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 8,836 0 4 0 Total $ 8,771 $ 1,436 $ (78) $ 3,441 Three Months Ended September 30, 2019 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 597 $ 432 $ 376 $ 4,525 Total cash flow hedges 597 432 376 4,525 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 432 0 0 0 Currency 83 0 0 0 Currency/Interest Rate 1,215 0 7 0 Credit 0 0 0 0 Equity 604 0 0 0 Embedded Derivatives 2,122 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 4,456 0 7 0 Total $ 5,053 $ 432 $ 383 $ 4,525 Nine Months Ended September 30, 2019 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 587 $ 1,241 $ 402 $ 5,851 Total cash flow hedges 587 1,241 402 5,851 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 1,791 0 0 0 Currency 97 0 0 0 Currency/Interest Rate 1,817 0 8 0 Credit (1) 0 0 0 Equity 6,583 0 0 0 Embedded Derivatives (13,554) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (3,267) 0 8 0 Total $ (2,680) $ 1,241 $ 410 $ 5,851 (1) Net change in AOCI. Presented below is a rollforward of current period cash flow hedges in AOCI before taxes: (in thousands) Balance, December 31, 2019 $ 3,193 Amount recorded in AOCI Currency/Interest Rate 4,730 Total amount recorded in AOCI 4,730 Amount reclassified from AOCI to income Currency/Interest Rate (1,289) Total amount reclassified from AOCI to income (1,289) Balance, September 30, 2020 $ 6,634 . The changes in fair value of cash flow hedges are deferred in AOCI and are included in "Net unrealized investment gains (losses)" in the Unaudited Interim Statements of Operations and Comprehensive Income (Loss); these amounts are then reclassified to earnings when the hedged item affects earnings. Using September 30, 2020 values, it is estimated that a pre-tax gain of $1.6 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending September 30, 2021. The exposures the Company is hedging with these qualifying cash flow hedges include the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. Credit Derivatives The Company has no exposure from credit derivative positions where it has written credit protection as of September 30, 2020 and December 31, 2019. The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. The Company has outstanding notional amounts of $0.7 million and $0 million reported as of September 30, 2020 and December 31, 2019, respectively with a fair value of $0 million for both periods. Credit Risk The Company is exposed to losses in the event of non-performance by a counterparty to financial derivative transactions with a positive fair value. The Company manages credit risk by entering into derivative transactions with its affiliate, Prudential Global Funding LLC (“PGF”), related to its over-the-counter ("OTC") derivatives. PGF, in turn, manages its credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreement, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single-party credit exposures which are subject to periodic management review. Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | FAIR VALUE OF ASSETS AND LIABILITIES Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. Level 3 - Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. For a discussion of the Company's valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 5 to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated. As of September 30, 2020 Level 1 Level 2 Level 3 Netting(1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 0 $ 11,838 $ 0 $ 0 $ 11,838 Obligations of U.S. states and their political subdivisions 0 180,917 0 0 180,917 Foreign government bonds 0 86,316 0 0 86,316 U.S. corporate public securities 0 875,116 0 0 875,116 U.S. corporate private securities 0 242,181 413 0 242,594 Foreign corporate public securities 0 68,659 0 0 68,659 Foreign corporate private securities 0 143,672 20,715 0 164,387 Asset-backed securities(2) 0 18,612 0 0 18,612 Commercial mortgage-backed securities 0 156,055 0 0 156,055 Residential mortgage-backed securities 0 4,052 0 0 4,052 Subtotal 0 1,787,418 21,128 0 1,808,546 Fixed maturities, trading 0 17,857 0 0 17,857 Equity securities 0 126 8,312 0 8,438 Cash equivalents 0 61,000 0 0 61,000 Other invested assets(3) 0 42,049 0 (15,902) 26,147 Reinsurance recoverables 0 0 1,521,833 0 1,521,833 Receivables from parent and affiliates 0 808 0 0 808 Subtotal excluding separate account assets 0 1,909,258 1,551,273 (15,902) 3,444,629 Separate account assets(4)(5) 0 13,926,414 0 0 13,926,414 Total assets $ 0 $ 15,835,672 $ 1,551,273 $ (15,902) $ 17,371,043 Future policy benefits(6) $ 0 $ 0 $ 1,521,833 $ 0 $ 1,521,833 Policyholders' account balances 0 0 145,272 0 145,272 Payables to parent and affiliates 0 15,894 0 (15,894) 0 Total liabilities $ 0 $ 15,894 $ 1,667,105 $ (15,894) $ 1,667,105 As of December 31, 2019 Level 1 Level 2 Level 3 Netting(1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 0 $ 16,015 $ 0 $ 0 $ 16,015 Obligations of U.S. states and their political subdivisions 0 133,677 0 0 133,677 Foreign government bonds 0 77,280 0 0 77,280 U.S. corporate public securities 0 697,520 0 0 697,520 U.S. corporate private securities 0 232,903 312 0 233,215 Foreign corporate public securities 0 57,993 0 0 57,993 Foreign corporate private securities 0 163,026 866 0 163,892 Asset-backed securities(2) 0 18,542 0 0 18,542 Commercial mortgage-backed securities 0 147,389 0 0 147,389 Residential mortgage-backed securities 0 4,573 0 0 4,573 Subtotal 0 1,548,918 1,178 0 1,550,096 Fixed maturities, trading 0 13,700 0 0 13,700 Equity securities 0 207 7,305 0 7,512 Cash equivalents 0 55,896 0 0 55,896 Other invested assets(3) 0 34,413 0 (13,029) 21,384 Reinsurance recoverables 0 0 760,558 0 760,558 Receivables from parent and affiliates 0 2,433 0 0 2,433 Subtotal excluding separate account assets 0 1,655,567 769,041 (13,029) 2,411,579 Separate account assets(4)(5) 0 13,927,275 0 0 13,927,275 Total assets $ 0 $ 15,582,842 $ 769,041 $ (13,029) $ 16,338,854 Future policy benefits(6) $ 0 $ 0 $ 760,558 $ 0 $ 760,558 Policyholders' account balances 0 0 133,793 0 133,793 Payables to parent and affiliates 0 13,043 0 (13,043) 0 Total liabilities $ 0 $ 13,043 $ 894,351 $ (13,043) $ 894,351 (1) “Netting” amounts represent cash collateral of $0.0 million as of both September 30, 2020 and December 31, 2019. (2) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types. (3) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. As of September 30, 2020 and December 31, 2019, the fair values of such investments were $3.0 million and $3.3 million, respectively. (4) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and a corporate owned life insurance fund, for which fair value is measured at NAV per share (or its equivalent). At September 30, 2020 and December 31, 2019, the fair value of such investments was $1,961 million and $1,977 million, respectively. (5) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company's Unaudited Interim Statements of Financial Position. (6) As of September 30, 2020, the net embedded derivative liability position of $1,522 million includes $31 million of embedded derivatives in an asset position and $1,553 million of embedded derivatives in a liability position. As of December 31, 2019, the net embedded derivative liability position of $761 million includes $60 million of embedded derivatives in an asset position and $821 million of embedded derivatives in a liability position. Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities. As of September 30, 2020 Fair Value Valuation Unobservable Minimum Maximum Weighted Impact of Increase in Input on Fair (in thousands) Assets: Corporate securities(2) $ 21,128 Discounted cash flow Discount rate 2.36 % 2.54 % 2.47 % Decrease Reinsurance recoverables $ 1,521,833 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 1,521,833 Discounted cash flow Lapse rate(5) 1 % 20 % Decrease Spread over LIBOR(6) 0.09 % 1.59 % Decrease Utilization rate(7) 39 % 96 % Increase Withdrawal rate See table footnote (8) below. Mortality rate (9) 0 % 15 % Decrease Equity volatility curve 18 % 26 % Increase Policyholders' account balances(4) $ 145,272 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.09 % 1.59 % Decrease Mortality rate (9) 0 % 24 % Decrease Equity volatility curve 19 % 35 % Increase As of December 31, 2019 Fair Value Valuation Unobservable Inputs Minimum Maximum Weighted Impact of Increase (in thousands) Assets: Reinsurance recoverables $ 760,558 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 760,558 Discounted cash flow Lapse rate(5) 1 % 18 % Decrease Spread over LIBOR(6) 0.10 % 1.23 % Decrease Utilization rate(7) 43 % 97 % Increase Withdrawal rate See table footnote(8) below. Mortality rate(9) 0 % 15 % Decrease Equity volatility curve 13 % 23 % Increase Policyholders' account balances(4) $ 133,793 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.10 % 1.23 % Decrease Mortality rate (9) 0 % 24 % Decrease Equity volatility curve 10 % 23 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table. (2) Includes assets classified as fixed maturities available-for-sale. (3) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (4) Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (5) Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives. (6) The spread over the London Inter-Bank Offered Rate ("LIBOR") swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt. (7) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits. (8) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of September 30, 2020 and December 31, 2019, the minimum withdrawal rate assumption is 76% and 78% respectively. As of September 30, 2020 and December 31, 2019, the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%. (9) The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. A mortality improvement assumption is also incorporated into the overall mortality table. Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows: Corporate Securities - The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increases, credit spreads widen, which results in a decrease in fair value. Future Policy Benefits – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money. Changes in Level 3 Assets and Liabilities – The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate. Three Months Ended September 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 20,232 $ 895 $ 0 $ 1 $ 0 $ 0 $ 0 $ 0 $ 0 $ 21,128 $ 895 Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,187 1,125 0 0 0 0 0 0 0 8,312 1,125 Reinsurance recoverables 1,741,924 (247,857) 27,766 0 0 0 0 0 0 1,521,833 (236,111) Liabilities: Future policy benefits (1,741,924) 247,857 0 0 (27,766) 0 0 0 0 (1,521,833) 236,111 Policyholders' account balances(5) (143,242) (232) 0 0 (1,798) 0 0 0 0 (145,272) 1,809 Three Months Ended September 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss)(6) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 895 $ 0 $ 0 $ 0 $ 895 Other assets: Equity securities 0 1,125 0 0 0 1,125 0 Reinsurance recoverables (247,857) 0 0 0 (236,111) 0 0 Liabilities: Future policy benefits 247,857 0 0 0 236,111 0 0 Policyholders' account balances (232) 0 0 0 1,809 0 0 Nine Months Ended September 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 1,178 $ 1,080 $ 0 $ (860) $ 0 $ 0 $ 0 $ 19,730 $ 0 $ 21,128 $ 1,085 Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,305 1,007 0 0 0 0 0 0 0 8,312 1,007 Reinsurance recoverables 760,558 680,424 80,851 0 0 0 0 0 0 1,521,833 697,223 Liabilities: Future policy benefits (760,558) (680,424) 0 0 (80,851) 0 0 0 0 (1,521,833) (697,223) Policyholders' account balances(5) (133,793) 5,017 0 0 (16,496) 0 0 0 0 (145,272) 6,849 Nine Months Ended September 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss)(6) (in thousands) Fixed maturities, available-for-sale $ 32 $ 0 $ 1,040 $ 8 $ 0 $ 0 $ 1,085 Other assets: Equity securities 0 1,007 0 0 0 1,007 0 Reinsurance recoverables 680,424 0 0 0 697,223 0 0 Liabilities: Future policy benefits (680,424) 0 0 0 (697,223) 0 0 Policyholders' account balances 5,017 0 0 0 6,849 0 0 Three Months Ended September 30, 2019 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 2,035 $ (1,017) $ 180 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,198 $ (1,731) Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,206 (73) 0 0 0 0 0 0 0 7,133 (72) Reinsurance recoverables 757,236 236,174 24,883 0 0 0 0 0 0 1,018,293 244,163 Liabilities: Future policy benefits (757,236) (236,174) 0 0 (24,883) 0 0 0 0 (1,018,293) (244,163) Policyholders' account balances(5) (112,417) 3,796 0 0 (14,467) 0 0 0 0 (123,088) 5,346 Three Months Ended September 30, 2019 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) (in thousands) Fixed maturities, available-for-sale $ (1,730) $ 0 $ 688 $ 25 $ (1,731) $ 0 Other assets: Equity securities 0 (73) 0 0 0 (72) Reinsurance recoverables 236,174 0 0 0 244,163 0 Liabilities: Future policy benefits (236,174) 0 0 0 (244,163) 0 Policyholders' account balances 3,796 0 0 0 5,346 0 Nine Months Ended September 30, 2019 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 2,882 $ (2,113) $ 428 $ 0 $ 0 $ (638) $ 0 $ 639 $ 0 $ 1,198 $ (4,893) Structured securities(4) 0 432 0 0 0 (68) 0 24,960 (25,324) 0 0 Other assets: Equity securities 6,622 511 0 0 0 0 0 0 0 7,133 511 Reinsurance recoverables 488,825 458,557 70,911 0 0 0 0 0 0 1,018,293 470,731 Liabilities: Future policy benefits (488,825) (458,557) 0 0 (70,911) 0 0 0 0 (1,018,293) (470,731) Policyholders' account balances(5) (1,949) (99,712) 0 0 (21,427) 0 0 0 0 (123,088) (98,158) Nine Months Ended September 30, 2019 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) (in thousands) Fixed maturities, available-for-sale $ (4,893) $ 0 $ 3,041 $ 171 $ (4,893) $ 0 Other assets: Equity securities 0 511 0 0 0 511 Reinsurance recoverables 458,557 0 0 0 470,731 0 Liabilities: Future policy benefits (458,557) 0 0 0 (470,731) 0 Policyholders' account balances (99,712) 0 0 0 (98,158) 0 (1) Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts. (2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts. (3) Includes U.S. corporate private and foreign corporate private securities. (4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities. (5) Issuances and settlements for Policyholders' account balances are presented net in the rollforward. (6) Effective January 1, 2020, the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period were added prospectively due to adoption of ASU 2018-13. Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . Fair Value of Financial Instruments The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value. September 30, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 144,666 $ 144,666 $ 136,705 Policy loans 0 0 212,519 212,519 212,519 Cash and cash equivalents 7,360 0 0 7,360 7,360 Accrued investment income 0 21,027 0 21,027 21,027 Reinsurance recoverables 0 0 28,806 28,806 26,975 Receivables from parent and affiliates 0 31,967 0 31,967 31,967 Other assets 0 3,205 0 3,205 3,205 Total assets $ 7,360 $ 56,199 $ 385,991 $ 449,550 $ 439,758 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 214,695 $ 41,800 $ 256,495 $ 254,662 Cash collateral for loaned securities 0 2,731 0 2,731 2,731 Short-term debt to affiliates 0 0 0 0 0 Payables to parent and affiliates 0 13,661 0 13,661 13,661 Other liabilities 0 44,052 0 44,052 44,052 Total liabilities $ 0 $ 275,139 $ 41,800 $ 316,939 $ 315,106 December 31, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 148,855 $ 148,855 $ 143,098 Policy loans 0 0 211,986 211,986 211,986 Cash and cash equivalents 28 0 0 28 28 Accrued investment income 0 19,539 0 19,539 19,539 Reinsurance recoverables 0 0 26,400 26,400 26,286 Receivables from parent and affiliates 0 30,387 0 30,387 30,387 Other assets 0 3,071 0 3,071 3,071 Total assets $ 28 $ 52,997 $ 387,241 $ 440,266 $ 434,395 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 192,239 $ 40,475 $ 232,714 $ 232,600 Cash collateral for loaned securities 0 2,481 0 2,481 2,481 Short-term debt to affiliates 0 89 0 89 89 Payables to parent and affiliates 0 24,958 0 24,958 24,958 Other liabilities 0 41,310 0 41,310 41,310 Total liabilities $ 0 $ 261,077 $ 40,475 $ 301,552 $ 301,438 (1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company uses a full-year projected effective tax rate approach to calculate year-to-date taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Income tax expense (benefit)” divided by projected “Income (loss) from operations before income taxes". The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year. The Company's income tax provision amounted to an income tax benefit of $(5.4) million, or (14.15)% of income (loss) from operations before income taxes in the first nine months of 2020, compared to an income tax expense of $0.0 million, or 0.06%, in the first nine months of 2019. The Company’s current and prior effective tax rates differed from the U.S. statutory tax rate of 21% primarily due to non-taxable investment income, tax credits, and the item discussed below. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted into law. One provision of the CARES Act amends the Tax Cuts and Jobs Act (“TCJA”) and allows companies with net operating losses (“NOLs”) originating in 2018, 2019 or 2020 to carry back those losses for five years. The Company has incorporated into the full year projected effective tax rate an income tax benefit of $5 million that would result from carrying the estimated 2020 NOL back to tax years that have a 35% tax rate. This amount is an estimate and will change if the amount of, and sources of, 2020 net taxable income are different from forecast. |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | REINSURANCE The Company participates in reinsurance with its affiliates Prudential Arizona Reinsurance Captive Company (“PARCC”), Prudential Arizona Reinsurance Term Company (“PAR Term”), Prudential Arizona Reinsurance Universal Company (“PAR U”), Prudential Term Reinsurance Company (“Term Re”) and Dryden Arizona Reinsurance Term Company (“DART”), its parent companies, Pruco Life and Prudential Insurance, as well as third parties. The reinsurance agreements provide risk diversification and additional capacity for future growth, limit the maximum net loss potential, manage statutory capital, and facilitate the Company's capital market hedging program. Life reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term and coinsurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely. Reserves related to reinsured long-duration contracts are accounted for using assumptions consistent with those used to account for the underlying contracts. Amounts recoverable from reinsurers for long-duration reinsurance arrangements are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. Reinsurance policy charges and fee income ceded for universal life and variable annuity products are accounted for as a reduction of policy charges and fee income. Reinsurance premiums ceded for term insurance products are accounted for as a reduction of premiums. Realized investment gains and losses include the impact of reinsurance agreements, particularly reinsurance agreements involving living benefit guarantees. The Company has entered into a reinsurance agreement to transfer the risk related to living benefit guarantees on variable annuities to Prudential Insurance. These reinsurance agreements are derivatives and have been accounted for in the same manner as embedded derivatives and the changes in the fair value of these derivatives are recognized through “Realized investment gains (losses), net”. See Note 4 for additional information related to the accounting for embedded derivatives. Reinsurance amounts included in the Company’s Unaudited Interim Statements of Financial Position as of September 30, 2020 and December 31, 2019 were as follows: September 30, 2020 December 31, 2019 (in thousands) Reinsurance recoverables(1) $ 4,116,435 $ 3,200,642 Policy loans (21,317) (18,627) Deferred policy acquisition costs (665,414) (736,575) Deferred sales inducements (40,283) (47,423) Other assets 15,195 16,540 Other liabilities 112,754 93,557 (1) Includes $4 million of unaffiliated activity for both September 30, 2020 and December 31, 2019. Reinsurance recoverables by counterparty are broken out below: September 30, 2020 December 31, 2019 (in thousands) Prudential Insurance $ 2,044,812 $ 1,245,450 PAR U 1,100,831 1,027,304 PARCC 438,289 458,441 PAR Term 235,103 219,757 Term Re 214,421 190,633 DART 59,500 38,651 Pruco Life 19,523 16,428 Unaffiliated 3,956 3,978 Total reinsurance recoverables $ 4,116,435 $ 3,200,642 Reinsurance amounts, included in the Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Premiums: Direct $ 59,724 $ 62,203 $ 187,332 $ 187,147 Ceded (54,138) (59,104) (171,423) (177,429) Net premiums 5,586 3,099 15,909 9,718 Policy charges and fee income: Direct 101,644 96,550 305,653 309,054 Ceded(1) (87,021) (86,206) (248,818) (256,256) Net policy charges and fee income 14,623 10,344 56,835 52,798 Net investment income: Direct 23,433 18,232 61,499 56,775 Ceded (173) (173) (591) (503) Net investment income 23,260 18,059 60,908 56,272 Asset administration fees: Direct 10,196 9,761 29,211 28,034 Ceded (8,440) (8,261) (24,344) (23,742) Net asset administration fees 1,756 1,500 4,867 4,292 Realized investment gains (losses), net: Direct 250,085 (231,963) (672,787) (459,863) Ceded (247,550) 234,682 680,875 451,416 Realized investment gains (losses), net 2,535 2,719 8,088 (8,447) Policyholders’ benefits (including change in reserves): Direct 91,346 157,537 348,921 360,844 Ceded(2) (90,119) (155,140) (317,565) (338,119) Net policyholders’ benefits (including change in reserves) 1,227 2,397 31,356 22,725 Interest credited to policyholders’ account balances: Direct 20,388 22,351 58,707 54,839 Ceded (9,552) (8,592) (25,693) (22,022) Net interest credited to policyholders’ account balances 10,836 13,759 33,014 32,817 Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization (50,216) (48,298) (149,912) (145,971) (1) Includes $(4.0) million and $0 million of unaffiliated activity for the three months ended September 30, 2020 and 2019, respectively, and $(4.0) million and $(4) million for the nine months ended September 30, 2020 and 2019, respectively. (2) Includes $(3.4) million and $(3.0) million of unaffiliated activity for the three months ended September 30, 2020 and 2019, respectively, and $(1.9) million and $(1.0) million for the nine months ended September 30, 2020 and 2019, respectively. The gross and net amounts of life insurance face amount in force as of September 30, 2020 and 2019 were as follows: 2020 2019 (in thousands) Direct gross life insurance face amount in force $ 152,707,454 $ 146,659,725 Reinsurance ceded (138,917,401) (133,731,588) Net life insurance face amount in force $ 13,790,053 $ 12,928,137 Information regarding significant affiliated reinsurance agreements is described below. Prudential Insurance The Company has a yearly renewable term reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. Effective July 1, 2017, this agreement was terminated for certain new business, primarily Universal Life business, and such business was reinsured to Pruco Life under a yearly renewable term reinsurance agreement. As of January 1, 2020, the remaining portions of new business (specifically Term policies) ceased being reinsured by the Company to Prudential Insurance, and a separate yearly renewable term reinsurance agreement was established with Pruco Life for Term policies. Effective April 1, 2016, the Company entered into a reinsurance agreement with Prudential Insurance to reinsure its variable annuity base contracts, along with the living benefit guarantees. PAR U Effective July 1, 2012, the Company reinsures an amount equal to 95% of all risks associated with Universal Protector policies having no-lapse guarantees as well as certain of its universal policies, excluding those policies that are subject to principle-based reserving. PARCC The Company reinsures 90% of the risks under its term life insurance policies with effective dates prior to January 1, 2010 through an automatic coinsurance agreement with PARCC. PAR Term The Company reinsures 95% of the risks under its term life insurance policies, with effective dates January 1, 2010 through December 31, 2013, through an automatic coinsurance agreement with PAR Term. Term Re The Company reinsures 95% of the risks under its term life insurance policies with effective dates on or after January 1, 2014 through December 31, 2017, through an automatic coinsurance agreement with Term Re. Pruco Life Effective July 1, 2017, the Company entered into a yearly renewable term reinsurance agreement with Pruco Life for new business, primarily covering Universal Life policies. Effective January 1, 2020, the Company entered in a similar yearly renewable term reinsurance agreement with Pruco Life for new business relating to Term policies. Under these agreements the majority of all mortality risk is ceded to Pruco Life. The Company also reinsures certain Corporate Owned Life Insurance (“COLI”) policies with Pruco Life. Through March 31, 2016, the Company reinsured Prudential Defined Income ("PDI") living benefit guarantees with Pruco Life. Effective April 1, 2016, the Company recaptured PDI living benefit guarantees from Pruco Life and reinsured them, together with the related variable annuity base contracts, with Prudential Insurance. DART |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | EQUITY Accumulated Other Comprehensive Income (Loss) AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the nine months ended September 30, 2020 and 2019, are as follows: Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2019 $ (981) $ 86,616 $ 85,635 Change in OCI before reclassifications 133 91,833 91,966 Amounts reclassified from AOCI 0 (783) (783) Income tax benefit (expense) (28) (19,121) (19,149) Balance, September 30, 2020 $ (876) $ 158,545 $ 157,669 Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2018 $ (989) $ (13,378) $ (14,367) Change in OCI before reclassifications (60) 125,543 125,483 Amounts reclassified from AOCI 0 7,999 7,999 Income tax benefit (expense) 13 (28,044) (28,031) Balance, September 30, 2019 $ (1,036) $ 92,120 $ 91,084 (1) Includes cash flow hedges of $7 million and $3 million as of September 30, 2020 and December 31, 2019, respectively, and $8 million and $2 million as of September 30, 2019 and December 31, 2018, respectively . Reclassifications out of Accumulated Other Comprehensive Income (Loss) Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Amounts reclassified from AOCI (1)(2): Net unrealized investment gains (losses): Cash flow hedges - Currency/ Interest rate(3) $ (384) $ (1,405) $ 1,289 $ (2,230) Net unrealized investment gains (losses) on available-for-sale securities 137 (2,290) (506) (5,769) Total net unrealized investment gains (losses)(4) (247) (3,695) 783 (7,999) Total reclassifications for the period $ (247) $ (3,695) $ 783 $ (7,999) (1) All amounts are shown before tax. (2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI. (3) See Note 4 for additional information on cash flow hedges. (4) See table below for additional information on unrealized investment gains (losses), including the impact on DAC and other costs, future policy benefits, policyholders’ account balances and other liabilities. Net Unrealized Investment Gains (Losses) Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets are included in the Company’s Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from OCI those items that are included as part of “Net income” for a period that had been part of OCI in earlier periods. There are no amounts related to available-for-sale fixed maturity securities on which an allowance for credit losses has been recognized as of September 30, 2020. The amounts for the periods indicated below represent all other net unrealized investment gains (losses): All Other Net Unrealized Investment Gains (Losses) in AOCI Net Unrealized Gains (Losses) on DAC and Other Costs(3) Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(4) Deferred Accumulated Other Comprehensive (in thousands) Balance, December 31, 2019(2) $ 116,039 $ 8,973 $ (15,373) $ (23,023) $ 86,616 Net investment gains (losses) on investments arising during the period 100,965 0 0 (21,203) 79,762 Reclassification adjustment for (gains) losses included in net income (783) 0 0 164 (619) Impact of net unrealized investment (gains) losses on DAC and other costs 0 18,403 0 (3,865) 14,538 Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities 0 0 (27,535) 5,783 (21,752) Balance, September 30, 2020 $ 216,221 $ 27,376 $ (42,908) $ (42,144) $ 158,545 (1) Includes cash flow hedges. See Note 4 for information on cash flow hedges. (2) Includes net unrealized gains (losses) for which an OTTI loss had been previously recognized. (3) "Other costs" primarily includes reinsurance recoverables and deferred reinsurance losses. (4) "Other liabilities" primarily includes reinsurance payables. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties. Expense Charges and Allocations The majority of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses. The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses include allocations of stock compensation expenses related to a stock-based awards program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock-based awards program was $0.0 million for both the three months ended September 30, 2020 and 2019, and $0.1 million for both the nine months ended September 30, 2020 and 2019. The expense charged to the Company for the deferred compensation program was $0.2 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $0.5 million for both the nine months ended September 30, 2020 and 2019. The Company is charged for its share of employee benefit expenses. These expenses include costs for funded and non-funded, non-contributory defined benefit pension plans. Some of these benefits are based on final earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during a career. The Company’s share of net expense for the pension plans was $0.5 million and $0.6 million for the three months ended September 30, 2020 and 2019, respectively, and $1.5 million and $1.7 million for the nine months ended September 30, 2020 and 2019, respectively. The Company is also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses include costs related to medical, dental, life insurance and disability. The Company's share of net expense for the welfare plans was $0.5 million and $0.7 million for the three months ended September 30, 2020 and 2019, respectively, and $1.6 million and $2.1 million for the nine months ended September 30, 2020 and 2019, respectively. Prudential Insurance sponsors voluntary savings plans for its employee 401(k) plans. The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company’s expense for its share of the voluntary savings plan was $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $0.6 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively. The Company is charged distribution expenses from Prudential Insurance’s agency network for both its domestic life and annuity products through a transfer pricing agreement, which is intended to reflect a market-based pricing arrangement. The Company pays commissions and certain other fees to Prudential Annuities Distributors, Inc. (“PAD”) in consideration for PAD’s marketing and underwriting of the Company’s annuity products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s annuity products. Commissions and fees paid by the Company to PAD were $12 million and $21 million for the three months ended September 30, 2020 and 2019, respectively, and $41 million and $60 million for the nine months ended September 30, 2020 and 2019, respectively. The Company is charged for its share of corporate expenses incurred by Prudential Financial to benefit its businesses, such as advertising, executive oversight, external affairs and philanthropic activity. The Company’s share of corporate expenses was $2 million for both the three months ended September 30, 2020 and 2019, and $5 million and $6 million for the nine months ended September 30, 2020 and 2019, respectively. Corporate-Owned Life Insurance The Company has sold three Corporate-Owned Life Insurance ("COLI") policies to Prudential Insurance and one to Prudential Financial. The cash surrender value included in separate accounts for these COLI policies was $2,852 million at September 30, 2020 and $2,743 million at December 31, 2019. Fees related to these COLI policies were $7 million and $6 million for the three months ended September 30, 2020 and 2019, respectively, and $21 million and $20 million for the nine months ended September 30, 2020 and 2019, respectively. The Company retains 10% of the mortality risk associated with these COLI policies up to $0.1 million per individual policy. Affiliated Investment Management Expenses In accordance with an agreement with PGIM, Inc. (“PGIM”), the Company pays investment management expenses to PGIM who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $0.8 million and $0.6 million for the three months ended September 30, 2020 and 2019, respectively, and $2.1 million and $1.7 million for the nine months ended September 30, 2020 and 2019, respectively. These expenses are recorded as “Net investment income” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss). Derivative Trades In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF has a substantially equal and offsetting position with an external counterparty. See Note 4 for additional information. Joint Ventures The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $39 million and $37 million as of September 30, 2020 and December 31, 2019, respectively. "Net investment income" related to these ventures includes a gain of $2.1 million and $0.0 million for the three months ended September 30, 2020 and 2019, respectively, and a gain of $2.4 million and $2.2 million for the nine months ended September 30, 2020 and 2019, respectively. Affiliated Asset Administration Fee Income The Company has a revenue sharing agreement with AST Investment Services, Inc. ("ASTISI") and PGIM Investments LLC ("PGIM Investments") whereby the Company receives fee income based on policyholders' separate account balances invested in the Advanced Series Trust. Income received from ASTISI and PGIM Investments related to this agreement was $8 million for both the three months ended September 30, 2020 and 2019, and $24 million for both the nine months ended September 30, 2020 and 2019. These revenues are recorded as “Asset administration fees” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss). The Company has a revenue sharing agreement with PGIM Investments, whereby the Company receives fee income based on policyholders' separate account balances invested in The Prudential Series Fund. Income received from PGIM Investments related to this agreement was $2 million and $1 million for the three months ended September 30, 2020 and 2019, respectively, and $5 million and $4 million for the nine months ended September 30, 2020 and 2019, respectively. These revenues are recorded as “Asset administration fees” in the Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss). Affiliated Notes Receivable Affiliated notes receivable included in “Receivables from parent and affiliates” at September 30, 2020 and December 31, 2019 were as follows: Maturity Date Interest Rates September 30, 2020 December 31, 2019 (in thousands) U.S. dollar fixed rate notes 2027 0.00% - 14.85 % $ 808 $ 2,433 Total notes receivable - affiliated(1) $ 808 $ 2,433 (1) All notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances. The affiliated notes receivable shown above are classified as available-for-sale securities and other trading assets carried at fair value. The Company monitors the internal and external credit ratings of these loans and loan performance. The Company also considers any guarantees made by Prudential Insurance for loans due from affiliates. Affiliated Asset Transfers The Company participates in affiliated asset trades with parent and sister companies. Book and market value differences for trades with a parent and sister are recognized within "Additional paid-in capital" (“APIC”) and "Realized investment gains (losses), net", respectively. The table below shows affiliated asset trades for the nine months ended September 30, 2020 and for the year ended December 31, 2019. Affiliate Date Transaction Security Type Fair Value Book Value APIC, Net of Tax Increase/(Decrease) Realized (in thousands) Prudential Annuities Life Assurance Corporation April 2019 Sale Equity Securities $ 3,293 $ 2,995 $ 0 $ 298 Prudential Insurance April 2020 Purchase Fixed Maturities $ 3,485 $ 3,320 $ (130) $ 0 Debt Agreements The Company is authorized to borrow funds up to $200 million from affiliates to meet its capital and other funding needs. As of September 30, 2020 there was no debt outstanding. The short-term debt was $0.1 million as of December 31, 2019. The total interest expense to the Company related to loans payable to affiliates was $0.0 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $0.0 million and $0.1 million for the nine months ended September 30, 2020 and 2019, respectively. Contributed Capital and Dividends In March 2020, the Company received a capital contribution in the amount of $85 million from Pruco Life. In December 2019, the Company received a capital contribution in the amount of $60 million from Pruco Life. Through September 2020, the Company did not pay any dividends. In 2019, the Company did not pay any dividends to Pruco Life. Reinsurance with Affiliates As discussed in Note 6, the Company participates in reinsurance transactions with certain affiliates. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | COMMITMENTS AND CONTINGENT LIABILITIES Commitments The Company has made commitments to fund commercial mortgage loans. As of September 30, 2020 and December 31, 2019, the outstanding balances on these commitments were $0.4 million and $4 million, respectively. The above amount includes unfunded commitments that are not unconditionally cancellable. For related credit exposure, there was an allowance for credit losses of $0.0 million as of September 30, 2020, which is a chan ge of $0.0 million for the three and nine months ended September 30, 2020. The Company has made commitments to purchase or fund investments, mostly private fixed maturities. As of September 30, 2020 and December 31, 2019, $70 million and $48 million, respectively, of these commitments were outstanding. The above amount includes unfunded commitments that are not unconditionally cancellable. There were no related charges for credit losses for both the three and nine months ended September 30, 2020. Contingent Liabilities On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines. The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below. It is possible that the results of operations or the cash flows of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flows for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position. Litigation and Regulatory Matters The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed. The Company estimates that as of September 30, 2020, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less th an $10 million. This estimate is not an indication of expected loss, if any, or the Company's maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews. The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 14 to the Company's Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, and should be read in conjunction with the complete descriptions provided in the Form 10-K. Behfarin v. Pruco Life In June 2020, the court issued an order: (i) granting plaintiffs’ motion for certification of the settlement class; (ii) approving the proposed nationwide class settlement agreement; (iii) approving the class notice; (iv) awarding attorneys’ fees and costs to plaintiffs and a reduced incentive award to Behfarin; and (v) dismissing the action with prejudice, but maintaining jurisdiction over the settlement. Summary The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flows in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flows for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position. |
Revision to Prior Year Informat
Revision to Prior Year Information | 9 Months Ended |
Sep. 30, 2020 | |
Prior Period Adjustment [Abstract] | |
Revision to Prior Year Information | REVISION TO PRIOR YEAR INFORMATION Revision to 2019 Financial Statements The Company identified an error in the presentation of certain cash flow activity related to policyholders' account balances that impacted several line items within previously issued Statements of Cash Flows. While these items affect the cash flows from operating and financing activities, they had no impact on the net increase (decrease) in cash and cash equivalents for the previously reported periods. Prior period amounts have been revised in the financial statements to correct this error as shown below. Management assessed the materiality of the misstatement described above on prior period financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality, codified in ASC 250-10, Accounting Changes and Error Corrections ("ASC 250"), and concluded that these misstatements were not material to any prior annual or interim periods. Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the financial statements for the nine months ended September 30, 2019, which are presented herein, have been revised. Similarly, impacted prior periods presented within the Annual Report on Form 10-K for the year ended December 31, 2020 will be revised. The following are selected line items from the financial statements illustrating the effects of these revisions: Statements of Cash Flows Nine Months Ended September 30, 2019 As Previously Reported Revision As Revised (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Policy charges and fee income $ (37,295) $ 23,421 $ (13,874) Cash flows from (used in) operating activities (6,247) 23,421 17,174 CASH FLOWS FROM FINANCING ACTIVITIES: Policyholders' account withdrawals (248,126) (15,815) (263,941) Other, net 0 (7,606) (7,606) Cash flows from (used in) financing activities 80,929 (23,421) 57,508 |
Significant Accounting Polici_2
Significant Accounting Policies and Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs ("DAC") and related amortization; policyholders' account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life products; valuation of investments including derivatives, measurement of allowance for credit losses, and recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; reinsurance recoverables; provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Adoption of New Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of Accounting Standards Updates ("ASUs") to the FASB Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of September 30, 2020, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material. Adoption of ASU 2016-13 The Company adopted ASU 2016-13, and related ASUs, effective January 1, 2020 using the modified retrospective method for certain financial assets carried at amortized cost and certain off-balance sheet exposures. The modified retrospective method results in a cumulative effect adjustment to opening retained earnings. The Company adopted the guidance related to fixed maturities, available-for-sale on a prospective basis. This ASU requires the use of a new current expected credit loss (“CECL”) model to account for expected credit losses on certain financial assets reported at amortized cost (e.g., loans held for investment, reinsurance receivables, etc.) and certain off-balance sheet credit exposures (e.g., indemnification of serviced mortgage loans and certain loan commitments). The guidance requires an entity to estimate lifetime credit losses related to such financial assets and credit exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that may affect the collectability of the reported amounts. The standard also modifies the OTTI guidance for fixed maturities, available-for-sale requiring the use of an allowance rather than a direct write-down of the investment. The impacts of this ASU on the Company’s Financial Statements primarily include (1) A Cumulative Effect Adjustment Upon Adoption; (2) Changes to the Presentation of the Statements of Financial Position and Statements of Operations; and (3) Changes to Accounting Policies. Each of these impacts is described below. This section is meant to serve as an update to, and should be read in conjunction with, Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. (1) Cumulative Effect Adjustment Upon Adoption Adoption of the standard resulted in a cumulative effect adjustment to opening retained earnings in the amount of $0.2 million, primarily related to commercial mortgage and other loans. The impact of adoption is not material to the following financial statement line items: income taxes payable and other liabilities. The prospective adoption of the portions of the standard related to fixed maturities, available-for-sale resulted in no impact to opening retained earnings. (2) Changes to the Presentation of the Statements of Financial Position and Statements of Operations The allowance for credit losses is presented parenthetically on relevant line items in the Statements of Financial Position. In the Statements of Operations, realized investment gains (losses), net are presented on one line item and will no longer reflect the breakout of OTTI on fixed maturity securities; OTTI on fixed maturity securities transferred to other comprehensive income (“OCI”); and other realized investment gains (losses), net. The presentation of this detail in prior periods is immaterial. (3) Changes to Accounting Policies This section has been updated to include the following changes in our accounting policies resulting from the adoption of ASU 2016-13. Fixed maturities, available-for-sale Fixed maturities, available-for-sale (“AFS debt securities”) are reported at fair value in the Statements of Financial Position. Interest income, and amortization of premium and accretion of discount are included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also vary based on other assumptions relating to the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of impairments recognized in earnings and OCI. For mortgage-backed and asset-backed securities rated below AA, the effective yield is adjusted prospectively for any changes in the estimated timing and amount of cash flows unless the investment is impaired or purchased with credit deterioration. For impaired mortgage-backed and asset-backed securities rated below AA, the effective yield is adjusted prospectively only if subsequent favorable or adverse changes in expected cash flows are not reflected in the allowance for credit losses. Prior to the adoption of this standard, the effective yield was adjusted prospectively regardless of whether the investment was impaired or not. AFS debt securities with unrealized losses are reviewed quarterly to determine whether the amortized cost basis of the security is recoverable. In evaluating whether the amortized cost basis is recoverable, the Company considers several factors including, but not limited to the extent of the decline and the reasons for the decline in value (credit events, currency or interest-rate related, including general credit spread widening), and the financial condition of the issuer. When an AFS debt security is in an unrealized loss position and (1) the Company has the intent to sell the AFS debt security, or (2) it is more likely than not the Company will be required to sell the AFS debt security before its anticipated recovery, or (3) the Company has deemed the AFS debt security to be uncollectable, the amortized cost basis of the AFS debt security is written down to fair value and any previously recognized allowance is reversed. The impairment is reported in “Realized investment gains (losses), net.” The new cost basis is not adjusted for subsequent increases in estimated fair value. For an AFS debt security in an unrealized loss position that does not meet these conditions, the Company analyzes its ability to recover the amortized cost by comparing the net present value of projected future cash flows (the “net present value”) with the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the AFS debt security at the date of acquisition. The Company may use the estimated fair value of collateral, if any, as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment, an allowance for losses is recognized in earnings for the difference between amortized cost and the net present value and is limited to the difference between amortized cost and fair value of the AFS debt security. Any difference between the fair value and the net present value of the debt security at the impairment measurement date remains in “Other comprehensive income (loss).” Changes in the allowance for losses are reported in “Realized investment gains (losses), net.” Prior to the adoption of this standard, any impairments on AFS debt securities were reported as an adjustment to the amortized cost basis of the security. Subsequent to the impairment, the AFS debt security was treated as if it were newly acquired at the date of impairment, and any increases in cash flows expected to be collected were accreted into net investment income over the life of the investment. Commercial mortgage and other loans Commercial mortgage and other loans are reported in the Statements of Financial Position at amortized cost net of the CECL allowance. Additionally, certain off-balance sheet credit exposures (e.g., indemnification of serviced mortgage loans, and certain unfunded mortgage loan commitments where the Company cannot unconditionally cancel the commitment) are also subject to a CECL allowance. The CECL allowance represents the Company’s best estimate of expected credit losses over the remaining life of the assets or off-balance sheet credit exposures. The determination of the allowance considers historical credit loss experience, current conditions, and reasonable and supportable forecasts. The allowance is calculated separately for commercial mortgage loans, agricultural mortgage loans, and other collateralized and uncollateralized loans. For commercial mortgage and agricultural mortgage loans (and related unfunded commitments where the Company cannot unconditionally cancel the commitment), the allowance is calculated using an internally developed CECL model. Key inputs to the CECL model include unpaid principal balances, internal credit ratings, annual expected loss factors, average lives of the loans adjusted for prepayment considerations, current and historical interest rate assumptions, and other factors influencing the Company’s view of the current stage of the economic cycle and future economic conditions. Subjective considerations include a review of whether historical loss experience is representative of current market conditions and the Company’s view of the credit cycle. Model assumptions and factors are reviewed and updated as appropriate. Information about certain key inputs is detailed below. Key factors in determining the internal credit ratings for commercial mortgage and agricultural mortgage loans include loan-to-value and debt-service-coverage ratios. Other factors include amortization, loan term, and estimated market value growth rate and volatility for the property type and region. The loan-to-value ratio compares the carrying amount of the loan to the fair value of the underlying property or properties collateralizing the loan and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the carrying amount of the loan exceeds the collateral value. A loan-to-value ratio less than 100% indicates an excess of collateral value over the carrying amount of the loan. The debt-service-coverage ratio is a property’s net operating income as a percentage of its debt service payments. Debt-service-coverage ratios less than 1.0 times indicate that a property’s operations do not generate enough income to cover the loan’s current debt payments. A debt-service-coverage ratio greater than 1.0 times indicates an excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company’s periodic review of the commercial mortgage and agricultural mortgage loan portfolios, which includes an internal appraisal of the underlying collateral value. The Company’s periodic review also includes a credit re-rating process, whereby the internal credit rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary credit quality rating system. See Note 3 for additional information related to the loan-to-value ratios and debt-service-coverage ratios related to the Company’s commercial mortgage and agricultural mortgage loan portfolios. Generally, every loan is re-rated at least annually. Annual expected loss rates are based on historical default and loss experience factors. Using average lives, the annual expected loss rates are converted into life-of-loan loss expectations. When individual loans no longer have the credit risk characteristics of the commercial or agricultural mortgage loan pools, they are removed from the pools and are evaluated individually for an allowance. The allowance is determined based on the outstanding loan balance less the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. The CECL allowance on commercial mortgage and other loans can increase or decrease from period to period based on the factors noted above. The change in allowance is reported in “Realized investment gains (losses), net.” As it relates to unfunded commitments that are in scope of this guidance, the CECL allowance is reported in “Other liabilities”, and the change in the allowance is reported in “Realized investment gains (losses), net.” When a commercial mortgage or other loan is deemed to be uncollectible, any allowance is reversed and a direct write-down of the carrying amount of the loan is recorded through "Realized investment gains (losses), net." The carrying amount of the loan is not adjusted for subsequent recoveries in value. The CECL allowance for other collateralized and uncollateralized loans carried at amortized cost is determined based on probability of default and loss given default assumptions by sector, credit quality and average lives of the loans. Additions to or releases of the allowance are reported in “Realized investment gains (losses), net.” Prior to the adoption of this standard, the impairments on commercial mortgage and other loans were collectively reviewed at a portfolio level for impairment based on probable incurred but not specifically identified losses with any such losses reflected in an allowance for credit losses. When a loan was individually identified to be impaired, the loan was individually evaluated for an allowance. Changes in these allowances were reported in “Realized investment gains (losses), net.” Additionally, an allowance for credit losses was not required on unfunded loan commitments. Reinsurance Recoverables Reinsurance recoverables are reported on the Statements of Financial Position net of the CECL allowance. The CECL allowance considers the credit quality of the reinsurance counterparty and is generally determined based on the probability of default and loss given default assumptions, after considering any applicable collateral arrangements. The CECL allowance does not apply to reinsurance recoverables with affiliated counterparties under common control. Additions to or releases of the allowance are reported in “Policyholders’ benefits.” Prior to the adoption of this standard, an allowance for credit losses for reinsurance recoverables was established only when it was deemed probable that a reinsurer may fail to make payments to us in a timely manner. Other ASUs adopted during the nine months ended September 30, 2020. Standard Description Effective date and method of adoption Effect on the financial statements or other significant matters ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU provides optional relief for certain contracts impacted by reference rate reform. The standard permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. The ASU also temporarily (until December 31, 2022) allows hedge relationships to continue without de-designation upon changes due to reference rate reform. March 12, 2020 to December 31, 2022 using the prospective method. This ASU did not have a significant impact on the Company’s Financial Statements and Notes to the Financial Statements. |
Future Adoption Of New Accounting Pronouncements | ASU issued but not yet adopted as of September 30, 2020 — ASU 2018-12 ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Company’s Financial Statements and Notes to the Financial Statements. In October 2019, the FASB issued ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date to affirm its decision to defer the effective date of ASU 2018-12 to January 1, 2022 (with early adoption permitted), representing a one year extension from the original effective date of January 1, 2021. As a result of the COVID-19 pandemic, in November 2020 the FASB issued ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application to defer for an additional one year the effective date of ASU 2018-12 from January 1, 2022 to January 1, 2023, and to provide transition relief to facilitate the early adoption of the ASU. The transition relief would allow large calendar-year public companies that early adopt ASU 2018-12 to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in the 2022 financial statements. Companies that do not early adopt ASU 2018-12 would apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements. ASU 2018-12 will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to how earnings emerge thereafter. ASU 2018-12 Amended Topic Description Method of adoption Effect on the financial statements or other significant matters Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Statements of Operations. An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in Accumulated other comprehensive income (loss) ("AOCI") or (2) a full retrospective transition method. The options for method of adoption and the impacts of such methods are under assessment. Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield, which will be updated each quarter with the impact recorded through OCI. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the discount rate assumptions. As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of either the beginning of the prior year (if early adoption is elected) or the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI. Upon adoption, under either transition method, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between discount rates locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed. Amortization of DAC and other balances Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements ("DSI"), to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability. An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its liability for future policy benefits, as described above, it is required to also use a full retrospective transition method for DAC and other balances. The options for method of adoption and the impacts of such methods are under assessment. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI. Market Risk Benefits (MRB) Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value, and record MRB assets and liabilities separately on the Statements of Financial Position. Changes in fair value of market risk benefits are recorded in net income, except for the portion of the change in MRB liabilities attributable to changes in an entity’s non-performance risk ("NPR"), which is recognized in OCI. An entity shall adopt the guidance for market risk benefits using the retrospective transition method which includes a cumulative-effect adjustment on the balance sheet as of either the beginning of prior year (if early adoption is elected) or the beginning of the earliest period presented. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the balance of the market risk benefits upon adoption. Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments [Abstract] | |
Fixed Maturities, Available-for-sale Securities | The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated: September 30, 2020 Amortized Gross Gross Allowance for Credit Losses Fair (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 10,694 $ 1,144 $ 0 $ 0 $ 11,838 Obligations of U.S. states and their political subdivisions 162,327 18,590 0 0 180,917 Foreign government bonds 75,345 11,069 98 0 86,316 U.S. public corporate securities 743,982 132,179 1,045 0 875,116 U.S. private corporate securities 223,616 19,538 560 0 242,594 Foreign public corporate securities 61,164 8,119 624 0 68,659 Foreign private corporate securities 157,423 9,466 2,502 0 164,387 Asset-backed securities(1) 18,027 632 47 0 18,612 Commercial mortgage-backed securities 143,234 12,821 0 0 156,055 Residential mortgage-backed securities(2) 3,452 600 0 0 4,052 Total fixed maturities, available-for-sale $ 1,599,264 $ 214,158 $ 4,876 $ 0 $ 1,808,546 (1) Includes credit-tranched securities collateralized by loan obligations and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. December 31, 2019 Amortized Gross Gross Fair OTTI (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 14,983 $ 1,032 $ 0 $ 16,015 $ 0 Obligations of U.S. states and their political subdivisions 123,505 10,172 0 133,677 0 Foreign government bonds 70,287 6,993 0 77,280 0 U.S. public corporate securities 627,880 70,167 527 697,520 0 U.S. private corporate securities 222,952 10,416 153 233,215 0 Foreign public corporate securities 53,115 4,958 80 57,993 0 Foreign private corporate securities 161,597 4,505 2,210 163,892 0 Asset-backed securities(1) 17,816 753 27 18,542 0 Commercial mortgage-backed securities 141,593 5,796 0 147,389 0 Residential mortgage-backed securities(2) 4,068 509 4 4,573 (50) Total fixed maturities, available-for-sale $ 1,437,796 $ 115,301 $ 3,001 $ 1,550,096 $ (50) (1) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $0.1 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date. |
Duration Of Gross Unrealized Losses On Fixed Maturity Securities | The following table sets forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the date indicated: September 30, 2020 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 5,707 $ 98 $ 0 $ 0 $ 5,707 $ 98 U.S. public corporate securities 28,363 1,045 0 0 28,363 1,045 U.S. private corporate securities 10,349 560 0 0 10,349 560 Foreign public corporate securities 12,339 624 0 0 12,339 624 Foreign private corporate securities 5,819 149 35,064 2,353 40,883 2,502 Asset-backed securities 2,490 10 3,917 37 6,407 47 Residential mortgage-backed securities 0 0 0 0 0 0 Total fixed maturities, available-for-sale $ 65,067 $ 2,486 $ 38,981 $ 2,390 $ 104,048 $ 4,876 The following table sets forth the fair value and gross unrealized losses on fixed maturity securities aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the date indicated: December 31, 2019 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 0 $ 0 $ 400 $ 0 $ 400 $ 0 U.S. public corporate securities 16,892 190 1,073 337 17,965 527 U.S. private corporate securities 7,350 140 4,757 13 12,107 153 Foreign public corporate securities 2,054 23 2,427 57 4,481 80 Foreign private corporate securities 10,659 281 27,048 1,929 37,707 2,210 Asset-backed securities 1,488 12 2,985 15 4,473 27 Residential mortgage-backed securities 91 4 0 0 91 4 Total fixed maturities, available-for-sale $ 38,534 $ 650 $ 38,690 $ 2,351 $ 77,224 $ 3,001 |
Fixed Maturities Classified by Contractual Maturity Date | The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated: September 30, 2020 Amortized Cost Fair Value (in thousands) Fixed maturities, available-for-sale: Due in one year or less $ 38,528 $ 38,910 Due after one year through five years 203,196 213,078 Due after five years through ten years 206,436 221,643 Due after ten years 986,391 1,156,196 Asset-backed securities 18,027 18,612 Commercial mortgage-backed securities 143,234 156,055 Residential mortgage-backed securities 3,452 4,052 Total fixed maturities, available-for-sale $ 1,599,264 $ 1,808,546 |
Sources of Fixed Maturity Proceeds, Realized Investment Gains (Losses), and Losses on Impairments | The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs, impairments and the allowance for credit losses of fixed maturities, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities, available-for-sale: Proceeds from sales(1) $ 810 $ 482 $ 3,105 $ 12,121 Proceeds from maturities/prepayments 14,331 11,536 31,946 33,742 Gross investment gains from sales and maturities 136 7 162 150 Gross investment losses from sales and maturities 1 (2) (43) (461) OTTI recognized in earnings(2) N/A (2,295) N/A (5,458) Write-downs recognized in earnings(3) 0 N/A (625) N/A (Addition to) release of allowance for credit losses(4) 0 N/A 0 N/A (1) Includes $0.0 million and $0.0 million of non-cash related proceeds due to the timing of trade settlements for the nine months ended September 30, 2020 and 2019, respectively. (2) For the three and nine months ended September 30, 2019, amounts exclude the portion of OTTI amounts remaining in OCI, representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment. (3) For the three and nine months ended September 30, 2020, amounts represent write-downs on securities approaching maturity related to foreign exchange movements and securities actively marketed for sale. (4) Effective January 1, 2020, credit losses on available-for-sale fixed maturity securities are recorded within the "allowance for credit losses." |
Commercial Mortgage and Other Loans | The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated: September 30, 2020 December 31, 2019 Amount % of Total Amount % of Total Commercial mortgage and agricultural property loans by property type: Apartments/Multi-Family $ 46,969 34.2 % $ 47,568 33.2 % Hospitality 14,160 10.3 14,266 10.0 Industrial 17,656 12.9 18,907 13.2 Office 23,143 16.9 24,035 16.7 Other 16,845 12.3 18,853 13.2 Retail 15,945 11.6 16,174 11.3 Total commercial mortgage loans 134,718 98.2 139,803 97.6 Agricultural property loans 2,435 1.8 3,460 2.4 Total commercial mortgage and agricultural property loans 137,153 100.0 % 143,263 100.0 % Allowance for credit losses (448) (165) Total net commercial mortgage and other loans $ 136,705 $ 143,098 |
Allowance for Credit Losses | The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated: Three Months Ended September 30, 2020 Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Balance, beginning of period $ 457 $ 0 $ 457 Addition to (release of) allowance for expected losses (9) 0 (9) Balance, end of period $ 448 $ 0 $ 448 Nine Months Ended September 30, 2020 Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Balance at December 31, 2019 $ 164 $ 1 $ 165 Cumulative effect of adoption of ASU 2016-13 204 0 204 Addition to (release of) allowance for expected losses 80 (1) 79 Balance at September 30, 2020 $ 448 $ 0 $ 448 |
Financing Receivable Credit Quality Indicators | The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated: September 30, 2020 Amortized Cost by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Total (in thousands) Commercial Mortgage Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 10,359 $ 0 $ 8,440 $ 9,751 $ 58,431 $ 0 $ 86,981 60%-69.99% 2,198 20,944 1,488 4,005 3,192 11,798 0 43,625 70%-79.99% 0 4,112 0 0 0 0 0 4,112 80% or greater 0 0 0 0 0 0 0 0 Total $ 2,198 $ 35,415 $ 1,488 $ 12,445 $ 12,943 $ 70,229 $ 0 $ 134,718 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 2,198 $ 32,042 $ 0 $ 12,445 $ 11,872 $ 68,406 $ 0 $ 126,963 1.0 - 1.2x 0 3,373 1,488 0 1,071 1,823 0 7,755 Less than 1.0x 0 0 0 0 0 0 0 0 Total $ 2,198 $ 35,415 $ 1,488 $ 12,445 $ 12,943 $ 70,229 $ 0 $ 134,718 Agricultural Property Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 60%-69.99% 0 0 0 0 0 0 0 0 70%-79.99% 0 0 0 0 0 0 0 0 80% or greater 0 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 1.0 - 1.2x 0 0 0 0 0 0 0 0 Less than 1.0x 0 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,435 $ 0 $ 2,435 Commercial mortgage loans December 31, 2019 Debt Service Coverage Ratio >1.2X 1.0X to <1.2X < 1.0X Total (in thousands) Loan-to-Value Ratio: 0%-59.99% $ 89,855 $ 1,131 $ 0 $ 90,986 60%-69.99% 42,726 1,877 0 44,603 70%-79.99% 2,695 1,519 0 4,214 80% or greater 0 0 0 0 Total commercial mortgage loans $ 135,276 $ 4,527 $ 0 $ 139,803 Agricultural property loans December 31, 2019 Debt Service Coverage Ratio >1.2X 1.0X to <1.2X < 1.0X Total (in thousands) Loan-to-Value Ratio: 0%-59.99% $ 3,460 $ 0 $ 0 $ 3,460 60%-69.99% 0 0 0 0 70%-79.99% 0 0 0 0 80% or greater 0 0 0 0 Total agricultural property loans $ 3,460 $ 0 $ 0 $ 3,460 |
Aging of Past Due Commercial Mortgage and Other Loans and Nonaccrual Status | The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated: September 30, 2020 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 134,718 $ 0 $ 0 $ 0 $ 134,718 $ 0 Agricultural property loans 2,435 0 0 0 2,435 0 Total $ 137,153 $ 0 $ 0 $ 0 $ 137,153 $ 0 (1) As of September 30, 2020, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. December 31, 2019 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 139,803 $ 0 $ 0 $ 0 $ 139,803 $ 0 Agricultural property loans 3,460 0 0 0 3,460 0 Total $ 143,263 $ 0 $ 0 $ 0 $ 143,263 $ 0 (1) As of December 31, 2019, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Other Invested Assets | The following table sets forth the composition of “Other invested assets,” as of the dates indicated: September 30, 2020 December 31, 2019 (in thousands) Company’s investment in separate accounts $ 3,325 $ 3,418 LPs/LLCs: Equity method: Private equity 34,157 26,609 Hedge funds 32,375 30,629 Real estate-related 4,450 4,154 Subtotal equity method 70,982 61,392 Fair value: Private equity 586 774 Hedge funds 69 78 Real estate-related 2,320 2,490 Subtotal fair value 2,975 3,342 Total LPs/LLCs 73,957 64,734 Derivative instruments 26,147 21,384 Total other invested assets $ 103,429 $ 89,536 |
Accrued Investment Income | The following table sets forth the composition of “Accrued investment income,” as of the date indicated: September 30, 2020 (in thousands) Fixed maturities $ 14,807 Equity securities 92 Commercial mortgage and other loans 380 Policy loans 5,735 Short-term investments and cash equivalents 13 Total accrued investment income $ 21,027 |
Net Investment Income | The following table sets forth “Net investment income” by investment type, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities, available-for-sale $ 15,531 $ 13,858 $ 45,374 $ 41,664 Fixed maturities, trading 144 95 386 258 Equity securities 91 91 273 273 Commercial mortgage and other loans 1,331 1,283 4,175 3,784 Policy loans 2,899 2,967 8,660 8,547 Other invested assets 4,300 506 4,625 3,602 Short-term investments and cash equivalents 40 143 399 745 Gross investment income 24,336 18,943 63,892 58,873 Less: investment expenses (1,076) (884) (2,984) (2,601) Net investment income $ 23,260 $ 18,059 $ 60,908 $ 56,272 |
Realized Investment Gains (Losses), Net | The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed maturities(1) $ 137 $ (2,290) $ (506) $ (5,769) Commercial mortgage and other loans 9 (47) (79) (14) Other invested assets 4 0 (55) 11 Derivatives 2,393 5,053 8,771 (2,680) Short term investments and cash equivalents (8) 3 (43) 5 Realized investment gains (losses), net $ 2,535 $ 2,719 $ 8,088 $ (8,447) (1) Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading. |
Unrealized Gains and (Losses) on Investments | The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated: September 30, 2020 December 31, 2019 (in thousands) Fixed maturity securities, available-for-sale — with OTTI(1) $ N/A $ 51 Fixed maturity securities, available-for-sale — all other(1) N/A 112,249 Fixed maturity securities, available-for-sale with an allowance 0 N/A Fixed maturity securities, available-for-sale without an allowance 209,282 N/A Derivatives designated as cash flow hedges(2) 6,634 3,193 Affiliated notes 253 480 Other investments 52 66 Net unrealized gains (losses) on investments $ 216,221 $ 116,039 (1) Effective January 1, 2020, per ASU 2016-13, fixed maturity securities, available-for-sale are no longer required to be disclosed “with OTTI” and “all other.” (2) For more information on cash flow hedges, see Note 4. |
Repurchase Agreements and Securities Lending | The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated: September 30, 2020 December 31, 2019 Remaining Contractual Maturities of the Agreements Remaining Contractual Maturities of the Agreements Overnight & Continuous Up to 30 Days Total Overnight & Continuous Up to 30 Days Total (in thousands) Foreign public corporate securities $ 2,731 $ 0 $ 2,731 $ 2,481 $ 0 $ 2,481 Total cash collateral for loaned securities(1) $ 2,731 $ 0 $ 2,731 $ 2,481 $ 0 $ 2,481 (1) The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. September 30, 2020 December 31, 2019 Primary Underlying Risk/Instrument Type Fair Value Fair Value Gross Notional Assets Liabilities Gross Notional Assets Liabilities (in thousands) Derivatives Designated as Hedge Accounting Instruments: Currency/Interest Rate Foreign Currency Swaps $ 128,688 $ 6,257 $ (469) $ 131,212 $ 4,653 $ (1,504) Total Derivatives Designated as Hedge Accounting Instruments: $ 128,688 $ 6,257 $ (469) $ 131,212 $ 4,653 $ (1,504) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate Interest Rate Swaps $ 30,200 $ 4,851 $ 0 $ 32,075 $ 3,005 $ (5) Credit Credit Default Swaps 713 9 0 0 0 0 Currency/Interest Rate Foreign Currency Swaps 33,224 3,626 (69) 33,224 2,691 (579) Foreign Currency Foreign Currency Forwards 2,690 33 (1) 1,858 0 (36) Equity Equity Options 429,925 27,273 (15,355) 379,350 24,064 (10,919) Total Derivatives Not Qualifying as Hedge Accounting Instruments: $ 496,752 $ 35,792 $ (15,425) $ 446,507 $ 29,760 $ (11,539) Total Derivatives(1)(2) $ 625,440 $ 42,049 $ (15,894) $ 577,719 $ 34,413 $ (13,043) (1) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $1,522 million and $761 million as of September 30, 2020 and December 31, 2019, respectively included in “Future policy benefits” and $145 million and $134 million as of September 30, 2020 and December 31, 2019, respectively included in “Policyholders’ account balances". The fair value of the related reinsurance, included in "Reinsurance recoverables" or "Other liabilities" was an asset of $1,522 million and $761 million as of September 30, 2020 and December 31, 2019, respectively. (2) Recorded in "Other invested assets" and "Payables to parent and affiliates" on the Unaudited Interim Statements of Financial Position. |
Offsetting of Financial Assets | The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Statements of Financial Position. September 30, 2020 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives(1) $ 42,049 $ (15,902) $ 26,147 $ (26,147) $ 0 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 42,049 $ (15,902) $ 26,147 $ (26,147) $ 0 Offsetting of Financial Liabilities: Derivatives(1) $ 15,894 $ (15,894) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 15,894 $ (15,894) $ 0 $ 0 $ 0 December 31, 2019 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives(1) $ 34,413 $ (13,029) $ 21,384 $ (21,384) $ 0 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 34,413 $ (13,029) $ 21,384 $ (21,384) $ 0 Offsetting of Financial Liabilities: Derivatives(1) $ 13,043 $ (13,043) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 13,043 $ (13,043) $ 0 $ 0 $ 0 (1) Amounts exclude the excess of collateral received/pledged from/to the counterparty. |
Offsetting of Financial Liabilities | The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Statements of Financial Position. September 30, 2020 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives(1) $ 42,049 $ (15,902) $ 26,147 $ (26,147) $ 0 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 42,049 $ (15,902) $ 26,147 $ (26,147) $ 0 Offsetting of Financial Liabilities: Derivatives(1) $ 15,894 $ (15,894) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 15,894 $ (15,894) $ 0 $ 0 $ 0 December 31, 2019 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives(1) $ 34,413 $ (13,029) $ 21,384 $ (21,384) $ 0 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 34,413 $ (13,029) $ 21,384 $ (21,384) $ 0 Offsetting of Financial Liabilities: Derivatives(1) $ 13,043 $ (13,043) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 13,043 $ (13,043) $ 0 $ 0 $ 0 (1) Amounts exclude the excess of collateral received/pledged from/to the counterparty. |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship. Three Months Ended September 30, 2020 Realized Net Other Income AOCI (1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ (92) $ 470 $ (763) $ (6,962) Total cash flow hedges (92) 470 (763) (6,962) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate (31) 0 0 0 Currency (96) 0 0 0 Currency/Interest Rate (1,733) 0 (16) 0 Credit (1) 0 0 0 Equity 4,281 0 0 0 Embedded Derivatives 65 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 2,485 0 (16) 0 Total $ 2,393 $ 470 $ (779) $ (6,962) Nine Months Ended September 30, 2020 Realized Net Other Income AOCI (1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ (65) $ 1,436 $ (82) $ 3,441 Total cash flow hedges (65) 1,436 (82) 3,441 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 2,063 0 0 0 Currency (65) 0 0 0 Currency/Interest Rate 1,830 0 4 0 Credit (71) 0 0 0 Equity (376) 0 0 0 Embedded Derivatives 5,455 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 8,836 0 4 0 Total $ 8,771 $ 1,436 $ (78) $ 3,441 Three Months Ended September 30, 2019 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 597 $ 432 $ 376 $ 4,525 Total cash flow hedges 597 432 376 4,525 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 432 0 0 0 Currency 83 0 0 0 Currency/Interest Rate 1,215 0 7 0 Credit 0 0 0 0 Equity 604 0 0 0 Embedded Derivatives 2,122 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 4,456 0 7 0 Total $ 5,053 $ 432 $ 383 $ 4,525 Nine Months Ended September 30, 2019 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 587 $ 1,241 $ 402 $ 5,851 Total cash flow hedges 587 1,241 402 5,851 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 1,791 0 0 0 Currency 97 0 0 0 Currency/Interest Rate 1,817 0 8 0 Credit (1) 0 0 0 Equity 6,583 0 0 0 Embedded Derivatives (13,554) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (3,267) 0 8 0 Total $ (2,680) $ 1,241 $ 410 $ 5,851 |
Schedule of Derivative Instruments Recognized in Accumulated Other Comprehensive Income (Loss) Before Taxes | Presented below is a rollforward of current period cash flow hedges in AOCI before taxes: (in thousands) Balance, December 31, 2019 $ 3,193 Amount recorded in AOCI Currency/Interest Rate 4,730 Total amount recorded in AOCI 4,730 Amount reclassified from AOCI to income Currency/Interest Rate (1,289) Total amount reclassified from AOCI to income (1,289) Balance, September 30, 2020 $ 6,634 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated. As of September 30, 2020 Level 1 Level 2 Level 3 Netting(1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 0 $ 11,838 $ 0 $ 0 $ 11,838 Obligations of U.S. states and their political subdivisions 0 180,917 0 0 180,917 Foreign government bonds 0 86,316 0 0 86,316 U.S. corporate public securities 0 875,116 0 0 875,116 U.S. corporate private securities 0 242,181 413 0 242,594 Foreign corporate public securities 0 68,659 0 0 68,659 Foreign corporate private securities 0 143,672 20,715 0 164,387 Asset-backed securities(2) 0 18,612 0 0 18,612 Commercial mortgage-backed securities 0 156,055 0 0 156,055 Residential mortgage-backed securities 0 4,052 0 0 4,052 Subtotal 0 1,787,418 21,128 0 1,808,546 Fixed maturities, trading 0 17,857 0 0 17,857 Equity securities 0 126 8,312 0 8,438 Cash equivalents 0 61,000 0 0 61,000 Other invested assets(3) 0 42,049 0 (15,902) 26,147 Reinsurance recoverables 0 0 1,521,833 0 1,521,833 Receivables from parent and affiliates 0 808 0 0 808 Subtotal excluding separate account assets 0 1,909,258 1,551,273 (15,902) 3,444,629 Separate account assets(4)(5) 0 13,926,414 0 0 13,926,414 Total assets $ 0 $ 15,835,672 $ 1,551,273 $ (15,902) $ 17,371,043 Future policy benefits(6) $ 0 $ 0 $ 1,521,833 $ 0 $ 1,521,833 Policyholders' account balances 0 0 145,272 0 145,272 Payables to parent and affiliates 0 15,894 0 (15,894) 0 Total liabilities $ 0 $ 15,894 $ 1,667,105 $ (15,894) $ 1,667,105 As of December 31, 2019 Level 1 Level 2 Level 3 Netting(1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 0 $ 16,015 $ 0 $ 0 $ 16,015 Obligations of U.S. states and their political subdivisions 0 133,677 0 0 133,677 Foreign government bonds 0 77,280 0 0 77,280 U.S. corporate public securities 0 697,520 0 0 697,520 U.S. corporate private securities 0 232,903 312 0 233,215 Foreign corporate public securities 0 57,993 0 0 57,993 Foreign corporate private securities 0 163,026 866 0 163,892 Asset-backed securities(2) 0 18,542 0 0 18,542 Commercial mortgage-backed securities 0 147,389 0 0 147,389 Residential mortgage-backed securities 0 4,573 0 0 4,573 Subtotal 0 1,548,918 1,178 0 1,550,096 Fixed maturities, trading 0 13,700 0 0 13,700 Equity securities 0 207 7,305 0 7,512 Cash equivalents 0 55,896 0 0 55,896 Other invested assets(3) 0 34,413 0 (13,029) 21,384 Reinsurance recoverables 0 0 760,558 0 760,558 Receivables from parent and affiliates 0 2,433 0 0 2,433 Subtotal excluding separate account assets 0 1,655,567 769,041 (13,029) 2,411,579 Separate account assets(4)(5) 0 13,927,275 0 0 13,927,275 Total assets $ 0 $ 15,582,842 $ 769,041 $ (13,029) $ 16,338,854 Future policy benefits(6) $ 0 $ 0 $ 760,558 $ 0 $ 760,558 Policyholders' account balances 0 0 133,793 0 133,793 Payables to parent and affiliates 0 13,043 0 (13,043) 0 Total liabilities $ 0 $ 13,043 $ 894,351 $ (13,043) $ 894,351 (1) “Netting” amounts represent cash collateral of $0.0 million as of both September 30, 2020 and December 31, 2019. (2) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types. (3) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. As of September 30, 2020 and December 31, 2019, the fair values of such investments were $3.0 million and $3.3 million, respectively. (4) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and a corporate owned life insurance fund, for which fair value is measured at NAV per share (or its equivalent). At September 30, 2020 and December 31, 2019, the fair value of such investments was $1,961 million and $1,977 million, respectively. (5) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company's Unaudited Interim Statements of Financial Position. (6) As of September 30, 2020, the net embedded derivative liability position of $1,522 million includes $31 million of embedded derivatives in an asset position and $1,553 million of embedded derivatives in a liability position. As of December 31, 2019, the net embedded derivative liability position of $761 million includes $60 million of embedded derivatives in an asset position and $821 million of embedded derivatives in a liability position. |
Fair Value Inputs, Assets and Liabilities, Quantitative Information | The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities. As of September 30, 2020 Fair Value Valuation Unobservable Minimum Maximum Weighted Impact of Increase in Input on Fair (in thousands) Assets: Corporate securities(2) $ 21,128 Discounted cash flow Discount rate 2.36 % 2.54 % 2.47 % Decrease Reinsurance recoverables $ 1,521,833 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 1,521,833 Discounted cash flow Lapse rate(5) 1 % 20 % Decrease Spread over LIBOR(6) 0.09 % 1.59 % Decrease Utilization rate(7) 39 % 96 % Increase Withdrawal rate See table footnote (8) below. Mortality rate (9) 0 % 15 % Decrease Equity volatility curve 18 % 26 % Increase Policyholders' account balances(4) $ 145,272 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.09 % 1.59 % Decrease Mortality rate (9) 0 % 24 % Decrease Equity volatility curve 19 % 35 % Increase As of December 31, 2019 Fair Value Valuation Unobservable Inputs Minimum Maximum Weighted Impact of Increase (in thousands) Assets: Reinsurance recoverables $ 760,558 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 760,558 Discounted cash flow Lapse rate(5) 1 % 18 % Decrease Spread over LIBOR(6) 0.10 % 1.23 % Decrease Utilization rate(7) 43 % 97 % Increase Withdrawal rate See table footnote(8) below. Mortality rate(9) 0 % 15 % Decrease Equity volatility curve 13 % 23 % Increase Policyholders' account balances(4) $ 133,793 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.10 % 1.23 % Decrease Mortality rate (9) 0 % 24 % Decrease Equity volatility curve 10 % 23 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table. (2) Includes assets classified as fixed maturities available-for-sale. (3) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (4) Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (5) Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives. (6) The spread over the London Inter-Bank Offered Rate ("LIBOR") swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt. (7) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits. (8) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of September 30, 2020 and December 31, 2019, the minimum withdrawal rate assumption is 76% and 78% respectively. As of September 30, 2020 and December 31, 2019, the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%. (9) The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. A mortality improvement assumption is also incorporated into the overall mortality table. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate. Three Months Ended September 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 20,232 $ 895 $ 0 $ 1 $ 0 $ 0 $ 0 $ 0 $ 0 $ 21,128 $ 895 Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,187 1,125 0 0 0 0 0 0 0 8,312 1,125 Reinsurance recoverables 1,741,924 (247,857) 27,766 0 0 0 0 0 0 1,521,833 (236,111) Liabilities: Future policy benefits (1,741,924) 247,857 0 0 (27,766) 0 0 0 0 (1,521,833) 236,111 Policyholders' account balances(5) (143,242) (232) 0 0 (1,798) 0 0 0 0 (145,272) 1,809 Three Months Ended September 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss)(6) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 895 $ 0 $ 0 $ 0 $ 895 Other assets: Equity securities 0 1,125 0 0 0 1,125 0 Reinsurance recoverables (247,857) 0 0 0 (236,111) 0 0 Liabilities: Future policy benefits 247,857 0 0 0 236,111 0 0 Policyholders' account balances (232) 0 0 0 1,809 0 0 Nine Months Ended September 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 1,178 $ 1,080 $ 0 $ (860) $ 0 $ 0 $ 0 $ 19,730 $ 0 $ 21,128 $ 1,085 Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,305 1,007 0 0 0 0 0 0 0 8,312 1,007 Reinsurance recoverables 760,558 680,424 80,851 0 0 0 0 0 0 1,521,833 697,223 Liabilities: Future policy benefits (760,558) (680,424) 0 0 (80,851) 0 0 0 0 (1,521,833) (697,223) Policyholders' account balances(5) (133,793) 5,017 0 0 (16,496) 0 0 0 0 (145,272) 6,849 Nine Months Ended September 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss)(6) (in thousands) Fixed maturities, available-for-sale $ 32 $ 0 $ 1,040 $ 8 $ 0 $ 0 $ 1,085 Other assets: Equity securities 0 1,007 0 0 0 1,007 0 Reinsurance recoverables 680,424 0 0 0 697,223 0 0 Liabilities: Future policy benefits (680,424) 0 0 0 (697,223) 0 0 Policyholders' account balances 5,017 0 0 0 6,849 0 0 Three Months Ended September 30, 2019 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 2,035 $ (1,017) $ 180 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,198 $ (1,731) Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,206 (73) 0 0 0 0 0 0 0 7,133 (72) Reinsurance recoverables 757,236 236,174 24,883 0 0 0 0 0 0 1,018,293 244,163 Liabilities: Future policy benefits (757,236) (236,174) 0 0 (24,883) 0 0 0 0 (1,018,293) (244,163) Policyholders' account balances(5) (112,417) 3,796 0 0 (14,467) 0 0 0 0 (123,088) 5,346 Three Months Ended September 30, 2019 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) (in thousands) Fixed maturities, available-for-sale $ (1,730) $ 0 $ 688 $ 25 $ (1,731) $ 0 Other assets: Equity securities 0 (73) 0 0 0 (72) Reinsurance recoverables 236,174 0 0 0 244,163 0 Liabilities: Future policy benefits (236,174) 0 0 0 (244,163) 0 Policyholders' account balances 3,796 0 0 0 5,346 0 Nine Months Ended September 30, 2019 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 2,882 $ (2,113) $ 428 $ 0 $ 0 $ (638) $ 0 $ 639 $ 0 $ 1,198 $ (4,893) Structured securities(4) 0 432 0 0 0 (68) 0 24,960 (25,324) 0 0 Other assets: Equity securities 6,622 511 0 0 0 0 0 0 0 7,133 511 Reinsurance recoverables 488,825 458,557 70,911 0 0 0 0 0 0 1,018,293 470,731 Liabilities: Future policy benefits (488,825) (458,557) 0 0 (70,911) 0 0 0 0 (1,018,293) (470,731) Policyholders' account balances(5) (1,949) (99,712) 0 0 (21,427) 0 0 0 0 (123,088) (98,158) Nine Months Ended September 30, 2019 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) (in thousands) Fixed maturities, available-for-sale $ (4,893) $ 0 $ 3,041 $ 171 $ (4,893) $ 0 Other assets: Equity securities 0 511 0 0 0 511 Reinsurance recoverables 458,557 0 0 0 470,731 0 Liabilities: Future policy benefits (458,557) 0 0 0 (470,731) 0 Policyholders' account balances (99,712) 0 0 0 (98,158) 0 (1) Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts. (2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts. (3) Includes U.S. corporate private and foreign corporate private securities. (4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities. (5) Issuances and settlements for Policyholders' account balances are presented net in the rollforward. (6) Effective January 1, 2020, the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period were added prospectively due to adoption of ASU 2018-13. Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate. Three Months Ended September 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 20,232 $ 895 $ 0 $ 1 $ 0 $ 0 $ 0 $ 0 $ 0 $ 21,128 $ 895 Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,187 1,125 0 0 0 0 0 0 0 8,312 1,125 Reinsurance recoverables 1,741,924 (247,857) 27,766 0 0 0 0 0 0 1,521,833 (236,111) Liabilities: Future policy benefits (1,741,924) 247,857 0 0 (27,766) 0 0 0 0 (1,521,833) 236,111 Policyholders' account balances(5) (143,242) (232) 0 0 (1,798) 0 0 0 0 (145,272) 1,809 Three Months Ended September 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss)(6) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 895 $ 0 $ 0 $ 0 $ 895 Other assets: Equity securities 0 1,125 0 0 0 1,125 0 Reinsurance recoverables (247,857) 0 0 0 (236,111) 0 0 Liabilities: Future policy benefits 247,857 0 0 0 236,111 0 0 Policyholders' account balances (232) 0 0 0 1,809 0 0 Nine Months Ended September 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 1,178 $ 1,080 $ 0 $ (860) $ 0 $ 0 $ 0 $ 19,730 $ 0 $ 21,128 $ 1,085 Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,305 1,007 0 0 0 0 0 0 0 8,312 1,007 Reinsurance recoverables 760,558 680,424 80,851 0 0 0 0 0 0 1,521,833 697,223 Liabilities: Future policy benefits (760,558) (680,424) 0 0 (80,851) 0 0 0 0 (1,521,833) (697,223) Policyholders' account balances(5) (133,793) 5,017 0 0 (16,496) 0 0 0 0 (145,272) 6,849 Nine Months Ended September 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss)(6) (in thousands) Fixed maturities, available-for-sale $ 32 $ 0 $ 1,040 $ 8 $ 0 $ 0 $ 1,085 Other assets: Equity securities 0 1,007 0 0 0 1,007 0 Reinsurance recoverables 680,424 0 0 0 697,223 0 0 Liabilities: Future policy benefits (680,424) 0 0 0 (697,223) 0 0 Policyholders' account balances 5,017 0 0 0 6,849 0 0 Three Months Ended September 30, 2019 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 2,035 $ (1,017) $ 180 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,198 $ (1,731) Structured securities(4) 0 0 0 0 0 0 0 0 0 0 0 Other assets: Equity securities 7,206 (73) 0 0 0 0 0 0 0 7,133 (72) Reinsurance recoverables 757,236 236,174 24,883 0 0 0 0 0 0 1,018,293 244,163 Liabilities: Future policy benefits (757,236) (236,174) 0 0 (24,883) 0 0 0 0 (1,018,293) (244,163) Policyholders' account balances(5) (112,417) 3,796 0 0 (14,467) 0 0 0 0 (123,088) 5,346 Three Months Ended September 30, 2019 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) (in thousands) Fixed maturities, available-for-sale $ (1,730) $ 0 $ 688 $ 25 $ (1,731) $ 0 Other assets: Equity securities 0 (73) 0 0 0 (72) Reinsurance recoverables 236,174 0 0 0 244,163 0 Liabilities: Future policy benefits (236,174) 0 0 0 (244,163) 0 Policyholders' account balances 3,796 0 0 0 5,346 0 Nine Months Ended September 30, 2019 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 2,882 $ (2,113) $ 428 $ 0 $ 0 $ (638) $ 0 $ 639 $ 0 $ 1,198 $ (4,893) Structured securities(4) 0 432 0 0 0 (68) 0 24,960 (25,324) 0 0 Other assets: Equity securities 6,622 511 0 0 0 0 0 0 0 7,133 511 Reinsurance recoverables 488,825 458,557 70,911 0 0 0 0 0 0 1,018,293 470,731 Liabilities: Future policy benefits (488,825) (458,557) 0 0 (70,911) 0 0 0 0 (1,018,293) (470,731) Policyholders' account balances(5) (1,949) (99,712) 0 0 (21,427) 0 0 0 0 (123,088) (98,158) Nine Months Ended September 30, 2019 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) (in thousands) Fixed maturities, available-for-sale $ (4,893) $ 0 $ 3,041 $ 171 $ (4,893) $ 0 Other assets: Equity securities 0 511 0 0 0 511 Reinsurance recoverables 458,557 0 0 0 470,731 0 Liabilities: Future policy benefits (458,557) 0 0 0 (470,731) 0 Policyholders' account balances (99,712) 0 0 0 (98,158) 0 (1) Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts. (2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts. (3) Includes U.S. corporate private and foreign corporate private securities. (4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities. (5) Issuances and settlements for Policyholders' account balances are presented net in the rollforward. (6) Effective January 1, 2020, the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period were added prospectively due to adoption of ASU 2018-13. Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . |
Fair Value Disclosure Financial Instruments Not Carried at Fair Value | The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value. September 30, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 144,666 $ 144,666 $ 136,705 Policy loans 0 0 212,519 212,519 212,519 Cash and cash equivalents 7,360 0 0 7,360 7,360 Accrued investment income 0 21,027 0 21,027 21,027 Reinsurance recoverables 0 0 28,806 28,806 26,975 Receivables from parent and affiliates 0 31,967 0 31,967 31,967 Other assets 0 3,205 0 3,205 3,205 Total assets $ 7,360 $ 56,199 $ 385,991 $ 449,550 $ 439,758 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 214,695 $ 41,800 $ 256,495 $ 254,662 Cash collateral for loaned securities 0 2,731 0 2,731 2,731 Short-term debt to affiliates 0 0 0 0 0 Payables to parent and affiliates 0 13,661 0 13,661 13,661 Other liabilities 0 44,052 0 44,052 44,052 Total liabilities $ 0 $ 275,139 $ 41,800 $ 316,939 $ 315,106 December 31, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 148,855 $ 148,855 $ 143,098 Policy loans 0 0 211,986 211,986 211,986 Cash and cash equivalents 28 0 0 28 28 Accrued investment income 0 19,539 0 19,539 19,539 Reinsurance recoverables 0 0 26,400 26,400 26,286 Receivables from parent and affiliates 0 30,387 0 30,387 30,387 Other assets 0 3,071 0 3,071 3,071 Total assets $ 28 $ 52,997 $ 387,241 $ 440,266 $ 434,395 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 192,239 $ 40,475 $ 232,714 $ 232,600 Cash collateral for loaned securities 0 2,481 0 2,481 2,481 Short-term debt to affiliates 0 89 0 89 89 Payables to parent and affiliates 0 24,958 0 24,958 24,958 Other liabilities 0 41,310 0 41,310 41,310 Total liabilities $ 0 $ 261,077 $ 40,475 $ 301,552 $ 301,438 (1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance Impact on Statement of Financial Position | Reinsurance amounts included in the Company’s Unaudited Interim Statements of Financial Position as of September 30, 2020 and December 31, 2019 were as follows: September 30, 2020 December 31, 2019 (in thousands) Reinsurance recoverables(1) $ 4,116,435 $ 3,200,642 Policy loans (21,317) (18,627) Deferred policy acquisition costs (665,414) (736,575) Deferred sales inducements (40,283) (47,423) Other assets 15,195 16,540 Other liabilities 112,754 93,557 |
Reinsurance Recoverable by Counterparty | Reinsurance recoverables by counterparty are broken out below: September 30, 2020 December 31, 2019 (in thousands) Prudential Insurance $ 2,044,812 $ 1,245,450 PAR U 1,100,831 1,027,304 PARCC 438,289 458,441 PAR Term 235,103 219,757 Term Re 214,421 190,633 DART 59,500 38,651 Pruco Life 19,523 16,428 Unaffiliated 3,956 3,978 Total reinsurance recoverables $ 4,116,435 $ 3,200,642 |
Reinsurance Impact on Statements of Operations and Comprehensive Income (Loss) | Reinsurance amounts, included in the Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Premiums: Direct $ 59,724 $ 62,203 $ 187,332 $ 187,147 Ceded (54,138) (59,104) (171,423) (177,429) Net premiums 5,586 3,099 15,909 9,718 Policy charges and fee income: Direct 101,644 96,550 305,653 309,054 Ceded(1) (87,021) (86,206) (248,818) (256,256) Net policy charges and fee income 14,623 10,344 56,835 52,798 Net investment income: Direct 23,433 18,232 61,499 56,775 Ceded (173) (173) (591) (503) Net investment income 23,260 18,059 60,908 56,272 Asset administration fees: Direct 10,196 9,761 29,211 28,034 Ceded (8,440) (8,261) (24,344) (23,742) Net asset administration fees 1,756 1,500 4,867 4,292 Realized investment gains (losses), net: Direct 250,085 (231,963) (672,787) (459,863) Ceded (247,550) 234,682 680,875 451,416 Realized investment gains (losses), net 2,535 2,719 8,088 (8,447) Policyholders’ benefits (including change in reserves): Direct 91,346 157,537 348,921 360,844 Ceded(2) (90,119) (155,140) (317,565) (338,119) Net policyholders’ benefits (including change in reserves) 1,227 2,397 31,356 22,725 Interest credited to policyholders’ account balances: Direct 20,388 22,351 58,707 54,839 Ceded (9,552) (8,592) (25,693) (22,022) Net interest credited to policyholders’ account balances 10,836 13,759 33,014 32,817 Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization (50,216) (48,298) (149,912) (145,971) (1) Includes $(4.0) million and $0 million of unaffiliated activity for the three months ended September 30, 2020 and 2019, respectively, and $(4.0) million and $(4) million for the nine months ended September 30, 2020 and 2019, respectively. (2) Includes $(3.4) million and $(3.0) million of unaffiliated activity for the three months ended September 30, 2020 and 2019, respectively, and $(1.9) million and $(1.0) million for the nine months ended September 30, 2020 and 2019, respectively. |
Gross and Net Life Insurance in Force | The gross and net amounts of life insurance face amount in force as of September 30, 2020 and 2019 were as follows: 2020 2019 (in thousands) Direct gross life insurance face amount in force $ 152,707,454 $ 146,659,725 Reinsurance ceded (138,917,401) (133,731,588) Net life insurance face amount in force $ 13,790,053 $ 12,928,137 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | The balance of and changes in each component of AOCI as of and for the nine months ended September 30, 2020 and 2019, are as follows: Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2019 $ (981) $ 86,616 $ 85,635 Change in OCI before reclassifications 133 91,833 91,966 Amounts reclassified from AOCI 0 (783) (783) Income tax benefit (expense) (28) (19,121) (19,149) Balance, September 30, 2020 $ (876) $ 158,545 $ 157,669 Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2018 $ (989) $ (13,378) $ (14,367) Change in OCI before reclassifications (60) 125,543 125,483 Amounts reclassified from AOCI 0 7,999 7,999 Income tax benefit (expense) 13 (28,044) (28,031) Balance, September 30, 2019 $ (1,036) $ 92,120 $ 91,084 (1) Includes cash flow hedges of $7 million and $3 million as of September 30, 2020 and December 31, 2019, respectively, and $8 million and $2 million as of September 30, 2019 and December 31, 2018, respectively . |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of Accumulated Other Comprehensive Income (Loss) Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Amounts reclassified from AOCI (1)(2): Net unrealized investment gains (losses): Cash flow hedges - Currency/ Interest rate(3) $ (384) $ (1,405) $ 1,289 $ (2,230) Net unrealized investment gains (losses) on available-for-sale securities 137 (2,290) (506) (5,769) Total net unrealized investment gains (losses)(4) (247) (3,695) 783 (7,999) Total reclassifications for the period $ (247) $ (3,695) $ 783 $ (7,999) (1) All amounts are shown before tax. (2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI. (3) See Note 4 for additional information on cash flow hedges. (4) See table below for additional information on unrealized investment gains (losses), including the impact on DAC and other costs, future policy benefits, policyholders’ account balances and other liabilities. |
All Other Net Unrealized Investment Gain Loss AOCI Rollforward | All Other Net Unrealized Investment Gains (Losses) in AOCI Net Unrealized Gains (Losses) on DAC and Other Costs(3) Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(4) Deferred Accumulated Other Comprehensive (in thousands) Balance, December 31, 2019(2) $ 116,039 $ 8,973 $ (15,373) $ (23,023) $ 86,616 Net investment gains (losses) on investments arising during the period 100,965 0 0 (21,203) 79,762 Reclassification adjustment for (gains) losses included in net income (783) 0 0 164 (619) Impact of net unrealized investment (gains) losses on DAC and other costs 0 18,403 0 (3,865) 14,538 Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities 0 0 (27,535) 5,783 (21,752) Balance, September 30, 2020 $ 216,221 $ 27,376 $ (42,908) $ (42,144) $ 158,545 (1) Includes cash flow hedges. See Note 4 for information on cash flow hedges. (2) Includes net unrealized gains (losses) for which an OTTI loss had been previously recognized. (3) "Other costs" primarily includes reinsurance recoverables and deferred reinsurance losses. (4) "Other liabilities" primarily includes reinsurance payables. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transaction [Line Items] | |
Affiliated Asset Transfers | The table below shows affiliated asset trades for the nine months ended September 30, 2020 and for the year ended December 31, 2019. Affiliate Date Transaction Security Type Fair Value Book Value APIC, Net of Tax Increase/(Decrease) Realized (in thousands) Prudential Annuities Life Assurance Corporation April 2019 Sale Equity Securities $ 3,293 $ 2,995 $ 0 $ 298 Prudential Insurance April 2020 Purchase Fixed Maturities $ 3,485 $ 3,320 $ (130) $ 0 |
Affiliated Entity | |
Related Party Transaction [Line Items] | |
Affiliated Notes Receivable | Affiliated notes receivable included in “Receivables from parent and affiliates” at September 30, 2020 and December 31, 2019 were as follows: Maturity Date Interest Rates September 30, 2020 December 31, 2019 (in thousands) U.S. dollar fixed rate notes 2027 0.00% - 14.85 % $ 808 $ 2,433 Total notes receivable - affiliated(1) $ 808 $ 2,433 (1) All notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances. |
Revision to Prior Year Inform_2
Revision to Prior Year Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Prior Period Adjustment [Abstract] | |
Revisions to 2019 Financial Statements | The following are selected line items from the financial statements illustrating the effects of these revisions: Statements of Cash Flows Nine Months Ended September 30, 2019 As Previously Reported Revision As Revised (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Policy charges and fee income $ (37,295) $ 23,421 $ (13,874) Cash flows from (used in) operating activities (6,247) 23,421 17,174 CASH FLOWS FROM FINANCING ACTIVITIES: Policyholders' account withdrawals (248,126) (15,815) (263,941) Other, net 0 (7,606) (7,606) Cash flows from (used in) financing activities 80,929 (23,421) 57,508 |
Significant Accounting Polici_3
Significant Accounting Policies and Pronouncements Significant Accounting Policies and Pronouncements (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 323,986 | $ 280,246 | |
Cumulative Effect Adjustment Upon Adoption | ASU 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 200 |
Investments (Fixed Maturities S
Investments (Fixed Maturities Securities Excluding Investments Classified as Trading) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,599,264 | $ 1,437,796 |
Fair Value | 1,808,546 | 1,550,096 |
Fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,599,264 | 1,437,796 |
Gross Unrealized Gains | 214,158 | 115,301 |
Gross Unrealized Losses | 4,876 | 3,001 |
Allowance for Credit Losses | 0 | |
Fair Value | 1,808,546 | 1,550,096 |
Fixed maturities | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,694 | 14,983 |
Gross Unrealized Gains | 1,144 | 1,032 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Losses | 0 | |
Fair Value | 11,838 | 16,015 |
Fixed maturities | Obligations of U.S. states and their political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 162,327 | 123,505 |
Gross Unrealized Gains | 18,590 | 10,172 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Losses | 0 | |
Fair Value | 180,917 | 133,677 |
Fixed maturities | Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 75,345 | 70,287 |
Gross Unrealized Gains | 11,069 | 6,993 |
Gross Unrealized Losses | 98 | 0 |
Allowance for Credit Losses | 0 | |
Fair Value | 86,316 | 77,280 |
Fixed maturities | U.S. public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 743,982 | 627,880 |
Gross Unrealized Gains | 132,179 | 70,167 |
Gross Unrealized Losses | 1,045 | 527 |
Allowance for Credit Losses | 0 | |
Fair Value | 875,116 | 697,520 |
Fixed maturities | U.S. private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 223,616 | 222,952 |
Gross Unrealized Gains | 19,538 | 10,416 |
Gross Unrealized Losses | 560 | 153 |
Allowance for Credit Losses | 0 | |
Fair Value | 242,594 | 233,215 |
Fixed maturities | Foreign public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 61,164 | 53,115 |
Gross Unrealized Gains | 8,119 | 4,958 |
Gross Unrealized Losses | 624 | 80 |
Allowance for Credit Losses | 0 | |
Fair Value | 68,659 | 57,993 |
Fixed maturities | Foreign private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 157,423 | 161,597 |
Gross Unrealized Gains | 9,466 | 4,505 |
Gross Unrealized Losses | 2,502 | 2,210 |
Allowance for Credit Losses | 0 | |
Fair Value | 164,387 | 163,892 |
Fixed maturities | Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 18,027 | 17,816 |
Gross Unrealized Gains | 632 | 753 |
Gross Unrealized Losses | 47 | 27 |
Allowance for Credit Losses | 0 | |
Fair Value | 18,612 | 18,542 |
Fixed maturities | Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 143,234 | 141,593 |
Gross Unrealized Gains | 12,821 | 5,796 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Losses | 0 | |
Fair Value | 156,055 | 147,389 |
Fixed maturities | Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,452 | 4,068 |
Gross Unrealized Gains | 600 | 509 |
Gross Unrealized Losses | 0 | 4 |
Allowance for Credit Losses | 0 | |
Fair Value | $ 4,052 | 4,573 |
OTTI | Fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | (50) | |
Net Unrealized Gain (Loss) | 100 | |
OTTI | Fixed maturities | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Obligations of U.S. states and their political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | U.S. public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | U.S. private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Foreign public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Foreign private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
OTTI | Fixed maturities | Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | $ (50) |
Investments (Fair Value and Los
Investments (Fair Value and Losses by Investment Category and Length of Time in a Loss Position) (Details) - Fixed maturities - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | $ 65,067 | $ 38,534 |
Less than Twelve Months, Gross Unrealized Losses | 2,486 | 650 |
Twelve Months or More, Fair Value | 38,981 | 38,690 |
Twelve Months or More, Gross Unrealized Losses | 2,390 | 2,351 |
Total, Fair Value | 104,048 | 77,224 |
Total, Gross Unrealized Losses | 4,876 | 3,001 |
Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 5,707 | 0 |
Less than Twelve Months, Gross Unrealized Losses | 98 | 0 |
Twelve Months or More, Fair Value | 0 | 400 |
Twelve Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 5,707 | 400 |
Total, Gross Unrealized Losses | 98 | 0 |
U.S. public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 28,363 | 16,892 |
Less than Twelve Months, Gross Unrealized Losses | 1,045 | 190 |
Twelve Months or More, Fair Value | 0 | 1,073 |
Twelve Months or More, Gross Unrealized Losses | 0 | 337 |
Total, Fair Value | 28,363 | 17,965 |
Total, Gross Unrealized Losses | 1,045 | 527 |
U.S. private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 10,349 | 7,350 |
Less than Twelve Months, Gross Unrealized Losses | 560 | 140 |
Twelve Months or More, Fair Value | 0 | 4,757 |
Twelve Months or More, Gross Unrealized Losses | 0 | 13 |
Total, Fair Value | 10,349 | 12,107 |
Total, Gross Unrealized Losses | 560 | 153 |
Foreign public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 12,339 | 2,054 |
Less than Twelve Months, Gross Unrealized Losses | 624 | 23 |
Twelve Months or More, Fair Value | 0 | 2,427 |
Twelve Months or More, Gross Unrealized Losses | 0 | 57 |
Total, Fair Value | 12,339 | 4,481 |
Total, Gross Unrealized Losses | 624 | 80 |
Foreign private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 5,819 | 10,659 |
Less than Twelve Months, Gross Unrealized Losses | 149 | 281 |
Twelve Months or More, Fair Value | 35,064 | 27,048 |
Twelve Months or More, Gross Unrealized Losses | 2,353 | 1,929 |
Total, Fair Value | 40,883 | 37,707 |
Total, Gross Unrealized Losses | 2,502 | 2,210 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 2,490 | 1,488 |
Less than Twelve Months, Gross Unrealized Losses | 10 | 12 |
Twelve Months or More, Fair Value | 3,917 | 2,985 |
Twelve Months or More, Gross Unrealized Losses | 37 | 15 |
Total, Fair Value | 6,407 | 4,473 |
Total, Gross Unrealized Losses | 47 | 27 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 0 | 91 |
Less than Twelve Months, Gross Unrealized Losses | 0 | 4 |
Twelve Months or More, Fair Value | 0 | 0 |
Twelve Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 0 | 91 |
Total, Gross Unrealized Losses | $ 0 | $ 4 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Schedule of Investments [Line Items] | |||||
Loans acquired | $ 0 | $ 0 | $ 0 | $ 0 | |
Loans sold | 0 | 0 | 0 | 0 | |
Fixed Maturities purchased with Credit Deterioration | 0 | ||||
Accrued Investment Income Write Down | 0 | 0 | |||
Allowance for credit losses for fixed maturity securities | 0 | 0 | |||
Securities Sold under Agreements to Repurchase | $ 0 | $ 0 | $ 0 | ||
Commercial mortgage loans, Percentage | 100.00% | 100.00% | 100.00% | ||
Loans on non-accrual status, recognized in interest income | $ 0 | $ 0 | |||
Commercial mortgage and others loans Purchased with Credit Deterioration | 0 | ||||
Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | 4,876 | 4,876 | $ 3,001 | ||
Gross unrealized losses of twelve months or more concentrated in various sectors | 2,390 | 2,390 | 2,351 | ||
NAIC High or Highest Quality Rating | Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | 3,800 | 3,800 | 2,400 | ||
NAIC Other Than High or Highest Quality Rating | Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | $ 1,100 | $ 1,100 | 600 | ||
New York | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 13.00% | 13.00% | |||
Texas | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 11.00% | 11.00% | |||
Illinois | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 9.00% | 9.00% | |||
Europe | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 10.00% | 10.00% | |||
Other Income | Equity securities | |||||
Schedule of Investments [Line Items] | |||||
Unrealized Gain (Loss) on Investments | $ 1,100 | $ 0 | $ 1,000 | $ 500 | |
Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses of twelve months or more concentrated in various sectors | $ 2,400 | $ 2,400 | $ 2,400 |
Investments (Amortized Cost and
Investments (Amortized Cost and Fair Value of Fixed Maturities by Contractual Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Amortized Cost: | ||
Due in one year or less | $ 38,528 | |
Due after one year through five years | 203,196 | |
Due after five years through ten years | 206,436 | |
Due after ten years | 986,391 | |
Amortized Cost | 1,599,264 | $ 1,437,796 |
Fair value: | ||
Due in one year or less | 38,910 | |
Due after one year through five years | 213,078 | |
Due after five years through ten years | 221,643 | |
Due after ten years | 1,156,196 | |
Fair Value | 1,808,546 | 1,550,096 |
Asset-backed securities | ||
Amortized Cost: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost | 18,027 | |
Fair value: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 18,612 | |
Commercial mortgage-backed securities | ||
Amortized Cost: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost | 143,234 | |
Fair value: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 156,055 | |
Residential mortgage-backed securities | ||
Amortized Cost: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost | 3,452 | |
Fair value: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 4,052 | |
Fixed maturities | ||
Amortized Cost: | ||
Amortized Cost | 1,599,264 | 1,437,796 |
Fair value: | ||
Fair Value | 1,808,546 | 1,550,096 |
Fixed maturities | Asset-backed securities | ||
Amortized Cost: | ||
Amortized Cost | 18,027 | 17,816 |
Fair value: | ||
Fair Value | 18,612 | 18,542 |
Fixed maturities | Commercial mortgage-backed securities | ||
Amortized Cost: | ||
Amortized Cost | 143,234 | 141,593 |
Fair value: | ||
Fair Value | 156,055 | 147,389 |
Fixed maturities | Residential mortgage-backed securities | ||
Amortized Cost: | ||
Amortized Cost | 3,452 | 4,068 |
Fair value: | ||
Fair Value | $ 4,052 | $ 4,573 |
Investments (Fixed Maturities_2
Investments (Fixed Maturities Securities Proceeds) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Proceeds from maturities/prepayments | $ 35,035 | $ 45,863 | ||
Fixed maturities | Available-for-sale | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Proceeds from sales | $ 810 | $ 482 | 3,105 | 12,121 |
Proceeds from maturities/prepayments | 14,331 | 11,536 | 31,946 | 33,742 |
Gross investment gains from sales and maturities | 136 | 7 | 162 | 150 |
Gross investment losses from sales and maturities | 1 | (2) | (43) | (461) |
OTTI recognized in earnings | $ (2,295) | (5,458) | ||
Write-downs recognized in earnings | 0 | (625) | ||
(Addition to) release of allowance for credit losses | $ 0 | 0 | ||
Non-cash related proceeds | $ 0 | $ 0 |
Investments (Commercial Mortgag
Investments (Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 137,153 | $ 143,263 |
Commercial mortgage loans, Percentage | 100.00% | 100.00% |
Allowance for Credit Losses | $ (448) | $ (165) |
Total net commercial mortgage and other loans | 136,705 | 143,098 |
Apartments and multi-family | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 46,969 | $ 47,568 |
Commercial mortgage loans, Percentage | 34.20% | 33.20% |
Hospitality | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 14,160 | $ 14,266 |
Commercial mortgage loans, Percentage | 10.30% | 10.00% |
Industrial | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 17,656 | $ 18,907 |
Commercial mortgage loans, Percentage | 12.90% | 13.20% |
Office | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 23,143 | $ 24,035 |
Commercial mortgage loans, Percentage | 16.90% | 16.70% |
Other | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 16,845 | $ 18,853 |
Commercial mortgage loans, Percentage | 12.30% | 13.20% |
Retail | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 15,945 | $ 16,174 |
Commercial mortgage loans, Percentage | 11.60% | 11.30% |
Commercial Mortgage Loans | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 134,718 | $ 139,803 |
Commercial mortgage loans, Percentage | 98.20% | 97.60% |
Agricultural property loans | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 2,435 | $ 3,460 |
Commercial mortgage loans, Percentage | 1.80% | 2.40% |
Investments (Allowance for Cred
Investments (Allowance for Credit Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | $ 457 | $ 165 |
Cumulative effect of adoption of ASU 2016-13 | 204 | |
Addition to (release of) allowance for expected losses | (9) | 79 |
Total ending balance | 448 | 448 |
Commercial Mortgage Loans | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 457 | 164 |
Cumulative effect of adoption of ASU 2016-13 | 204 | |
Addition to (release of) allowance for expected losses | (9) | 80 |
Total ending balance | 448 | 448 |
Agricultural Property Loans | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | 0 | 1 |
Cumulative effect of adoption of ASU 2016-13 | 0 | |
Addition to (release of) allowance for expected losses | 0 | (1) |
Total ending balance | $ 0 | $ 0 |
Investments (Loan-to-value rati
Investments (Loan-to-value ratios) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 2,198 | |
2019 | 35,415 | |
2018 | 1,488 | |
2017 | 12,445 | |
2016 | 12,943 | |
Prior | 70,229 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 134,718 | $ 139,803 |
Commercial Mortgage Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2,198 | |
2019 | 32,042 | |
2018 | 0 | |
2017 | 12,445 | |
2016 | 11,872 | |
Prior | 68,406 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 126,963 | 135,276 |
Commercial Mortgage Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 3,373 | |
2018 | 1,488 | |
2017 | 0 | |
2016 | 1,071 | |
Prior | 1,823 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 7,755 | 4,527 |
Commercial Mortgage Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 0 | 0 |
Agricultural Property Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 2,435 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 2,435 | 3,460 |
Agricultural Property Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 2,435 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 2,435 | 3,460 |
Agricultural Property Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 0 | 0 |
Agricultural Property Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 0 | 0 |
0% to 59.99% | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 10,359 | |
2018 | 0 | |
2017 | 8,440 | |
2016 | 9,751 | |
Prior | 58,431 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 86,981 | 90,986 |
0% to 59.99% | Commercial Mortgage Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 89,855 | |
0% to 59.99% | Commercial Mortgage Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 1,131 | |
0% to 59.99% | Commercial Mortgage Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
0% to 59.99% | Agricultural Property Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 2,435 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 2,435 | 3,460 |
0% to 59.99% | Agricultural Property Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 3,460 | |
0% to 59.99% | Agricultural Property Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
0% to 59.99% | Agricultural Property Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
60% to 69.99% | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2,198 | |
2019 | 20,944 | |
2018 | 1,488 | |
2017 | 4,005 | |
2016 | 3,192 | |
Prior | 11,798 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 43,625 | 44,603 |
60% to 69.99% | Commercial Mortgage Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 42,726 | |
60% to 69.99% | Commercial Mortgage Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 1,877 | |
60% to 69.99% | Commercial Mortgage Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
60% to 69.99% | Agricultural Property Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 0 | 0 |
60% to 69.99% | Agricultural Property Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
60% to 69.99% | Agricultural Property Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
60% to 69.99% | Agricultural Property Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
70% to 79.99% | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 4,112 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 4,112 | 4,214 |
70% to 79.99% | Commercial Mortgage Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 2,695 | |
70% to 79.99% | Commercial Mortgage Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 1,519 | |
70% to 79.99% | Commercial Mortgage Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
70% to 79.99% | Agricultural Property Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 0 | 0 |
70% to 79.99% | Agricultural Property Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
70% to 79.99% | Agricultural Property Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
70% to 79.99% | Agricultural Property Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
80% or greater | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | 0 | 0 |
80% or greater | Commercial Mortgage Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
80% or greater | Commercial Mortgage Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
80% or greater | Commercial Mortgage Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
80% or greater | Agricultural Property Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Recording investment gross of allowance for credit losses | $ 0 | 0 |
80% or greater | Agricultural Property Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
80% or greater | Agricultural Property Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | |
80% or greater | Agricultural Property Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | $ 0 |
Investments (Analysis of Past D
Investments (Analysis of Past Due Commercial Mortgage, Agricultural and Other Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Current | $ 137,153 | $ 143,263 |
Total Loans | 137,153 | 143,263 |
Non-Accrual Status | 0 | 0 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Mortgage Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 134,718 | 139,803 |
Total Loans | 134,718 | 139,803 |
Non-Accrual Status | 0 | 0 |
Commercial Mortgage Loans | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Mortgage Loans | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Mortgage Loans | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Agricultural property loans | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 2,435 | 3,460 |
Total Loans | 2,435 | 3,460 |
Non-Accrual Status | 0 | 0 |
Agricultural property loans | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Agricultural property loans | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Agricultural property loans | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Loans | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Accruing Interest | $ 0 | $ 0 |
Investments (Other Invested Ass
Investments (Other Invested Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Invested Assets [Line Items] | ||
Other invested assets | $ 103,429 | $ 89,536 |
LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 73,957 | 64,734 |
Company’s investment in separate accounts | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 3,325 | 3,418 |
Derivative instruments | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 26,147 | 21,384 |
Equity method | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 70,982 | 61,392 |
Equity method | Private equity | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 34,157 | 26,609 |
Equity method | Hedge funds | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 32,375 | 30,629 |
Equity method | Real estate-related | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 4,450 | 4,154 |
Fair Value | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 2,975 | 3,342 |
Fair Value | Private equity | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 586 | 774 |
Fair Value | Hedge funds | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 69 | 78 |
Fair Value | Real estate-related | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | $ 2,320 | $ 2,490 |
Investments (Accrued Investment
Investments (Accrued Investment Income) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Net Investment Income [Line Items] | ||
Accrued investment income | $ 21,027 | $ 19,539 |
Equity securities | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 92 | |
Commercial mortgage and other loans | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 380 | |
Policy loans | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 5,735 | |
Short-term investments and cash equivalents | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 13 | |
Available-for-sale | Fixed maturities | ||
Net Investment Income [Line Items] | ||
Accrued investment income | $ 14,807 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 24,336 | $ 18,943 | $ 63,892 | $ 58,873 |
Less: investment expenses | (1,076) | (884) | (2,984) | (2,601) |
Net investment income | 23,260 | 18,059 | 60,908 | 56,272 |
Equity securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 91 | 91 | 273 | 273 |
Commercial mortgage and other loans | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 1,331 | 1,283 | 4,175 | 3,784 |
Policy loans | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 2,899 | 2,967 | 8,660 | 8,547 |
Other invested assets | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 4,300 | 506 | 4,625 | 3,602 |
Short-term investments and cash equivalents | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 40 | 143 | 399 | 745 |
Available-for-sale | Fixed maturities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 15,531 | 13,858 | 45,374 | 41,664 |
Trading | Fixed maturities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 144 | $ 95 | $ 386 | $ 258 |
Investments (Realized Investmen
Investments (Realized Investment Gains Losses, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | $ 2,535 | $ 2,719 | $ 8,088 | $ (8,447) |
Fixed maturities | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | 137 | (2,290) | (506) | (5,769) |
Commercial mortgage and other loans | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | 9 | (47) | (79) | (14) |
Other invested assets | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | 4 | 0 | (55) | 11 |
Derivatives | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | 2,393 | 5,053 | 8,771 | (2,680) |
Short-term investments and cash equivalents | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | $ (8) | $ 3 | $ (43) | $ 5 |
Investments (Net Unrealized Gai
Investments (Net Unrealized Gains Losses on Investments by Asset Class) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | $ 216,221 | $ 116,039 |
Fixed maturities | Available-for-sale | OTTI | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 51 | |
Fixed maturities | Available-for-sale | All Other | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 112,249 | |
Fixed maturities | Available-for-sale | With an allowance | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 0 | |
Fixed maturities | Available-for-sale | Without an allowance | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 209,282 | |
Derivatives designated as cash flow hedges | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 6,634 | 3,193 |
Affiliated notes | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 253 | 480 |
Other investments | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | $ 52 | $ 66 |
Investments (Repurchase Agreeme
Investments (Repurchase Agreement and Securities Lending) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | $ 2,731 | $ 2,481 |
Overnight & Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 2,731 | 2,481 |
Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 0 | 0 |
30 Days or Greater | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 0 | 0 |
Foreign public corporate securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 2,731 | 2,481 |
Foreign public corporate securities | Overnight & Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 2,731 | 2,481 |
Foreign public corporate securities | Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | $ 0 | $ 0 |
Derivative Instruments (Gross N
Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Assets | $ 42,049 | $ 34,413 |
Liabilities | (15,894) | (13,043) |
Derivative, Notional Amount | 625,440 | 577,719 |
Derivatives Designated as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Assets | 6,257 | 4,653 |
Liabilities | (469) | (1,504) |
Derivative, Notional Amount | 128,688 | 131,212 |
Derivatives Designated as Hedge Accounting Instruments: | Foreign Currency Swaps | ||
Derivative [Line Items] | ||
Assets | 6,257 | 4,653 |
Liabilities | (469) | (1,504) |
Derivative, Notional Amount | 128,688 | 131,212 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Assets | 35,792 | 29,760 |
Liabilities | (15,425) | (11,539) |
Derivative, Notional Amount | 496,752 | 446,507 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate Swaps | ||
Derivative [Line Items] | ||
Assets | 4,851 | 3,005 |
Liabilities | 0 | (5) |
Derivative, Notional Amount | 30,200 | 32,075 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit Default Swaps | ||
Derivative [Line Items] | ||
Assets | 9 | 0 |
Liabilities | 0 | 0 |
Derivative, Notional Amount | 713 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Swaps | ||
Derivative [Line Items] | ||
Assets | 3,626 | 2,691 |
Liabilities | (69) | (579) |
Derivative, Notional Amount | 33,224 | 33,224 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Forward | ||
Derivative [Line Items] | ||
Assets | 33 | 0 |
Liabilities | (1) | (36) |
Derivative, Notional Amount | 2,690 | 1,858 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity Options | ||
Derivative [Line Items] | ||
Assets | 27,273 | 24,064 |
Liabilities | (15,355) | (10,919) |
Derivative, Notional Amount | $ 429,925 | $ 379,350 |
Derivative Instruments (Offsett
Derivative Instruments (Offsetting Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives Assets | ||
Gross Amounts of Recognized Financial Instruments | $ 42,049 | $ 34,413 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (15,902) | (13,029) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 26,147 | 21,384 |
Financial Instruments/ Collateral | (26,147) | (21,384) |
Net Amount | 0 | 0 |
Securities purchased under agreements to resell | ||
Gross Amounts of Recognized Financial Instruments | 0 | 0 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Total Assets | ||
Gross Amounts of Recognized Financial Instruments | 42,049 | 34,413 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (15,902) | (13,029) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 26,147 | 21,384 |
Financial Instruments/ Collateral | (26,147) | (21,384) |
Net Amount | 0 | 0 |
Derivatives Liabilities | ||
Gross Amounts of Recognized Financial Instruments | 15,894 | 13,043 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (15,894) | (13,043) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Securities sold under agreements to repurchase | ||
Gross Amounts of Recognized Financial Instruments | 0 | 0 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Total Liabilities | ||
Gross Amounts of Recognized Financial Instruments | 15,894 | 13,043 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (15,894) | (13,043) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | $ 0 | $ 0 |
Derivative Instruments (Financi
Derivative Instruments (Financial Statement Classification and Impact of Derivatives Used in Qualifying and Non-qualifying Hedge Relationships) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | $ 2,393 | $ 5,053 | $ 8,771 | $ (2,680) |
Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 470 | 432 | 1,436 | 1,241 |
Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (779) | 383 | (78) | 410 |
AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (6,962) | 4,525 | 3,441 | 5,851 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (92) | 597 | (65) | 587 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 470 | 432 | 1,436 | 1,241 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (763) | 376 | (82) | 402 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (6,962) | 4,525 | 3,441 | 5,851 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (92) | 597 | (65) | 587 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 470 | 432 | 1,436 | 1,241 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (763) | 376 | (82) | 402 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (6,962) | 4,525 | 3,441 | 5,851 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 2,485 | 4,456 | 8,836 | (3,267) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (16) | 7 | 4 | 8 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (31) | 432 | 2,063 | 1,791 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (96) | 83 | (65) | 97 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (1,733) | 1,215 | 1,830 | 1,817 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (16) | 7 | 4 | 8 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (1) | 0 | (71) | (1) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 4,281 | 604 | (376) | 6,583 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 65 | 2,122 | 5,455 | (13,554) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Instruments (Current
Derivative Instruments (Current Period Cash Flow Hedges in AOCI (loss) before Taxes) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Cash flow hedges in AOCI | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |
Balance, beginning | $ 3,193 |
Amount recorded in AOCI | 4,730 |
Amounts reclassified into current period earnings | (1,289) |
Balance, ending | 6,634 |
Currency/Interest Rate | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |
Amount recorded in AOCI | 4,730 |
Amounts reclassified into current period earnings | $ (1,289) |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 1.6 | |
Credit Derivative Protection Purchased Fair Value Asset (Liability) | 0 | $ 0 |
Credit Derivative, Maximum Exposure, Undiscounted | 0.7 | 0 |
Derivative [Line Items] | ||
Credit Risk Derivatives, at Fair Value, Net | 0 | 0 |
Future Policy Benefits | ||
Derivative [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative Asset (Liability), Net | (1,522) | (761) |
Reinsurance recoverables | ||
Derivative [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative Asset (Liability), Net | 1,522 | 761 |
Policyholders' Account Balances | ||
Derivative [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative Asset (Liability), Net | $ (145) | $ (134) |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities (Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | $ 1,808,546 | $ 1,550,096 |
Fixed maturities, trading | 17,857 | 13,700 |
Equity securities | 8,438 | 7,512 |
Other invested assets | 103,429 | 89,536 |
Reinsurance recoverables | 4,116,435 | 3,200,642 |
Receivables from parent and affiliates | 32,775 | 32,820 |
Separate account assets | 15,887,732 | 15,904,208 |
TOTAL ASSETS | 22,646,937 | 21,435,345 |
Future policy benefits | 3,235,868 | 2,302,959 |
Policyholders’ account balances | 2,508,775 | 2,424,120 |
Payables to parent and affiliates | 13,661 | 24,958 |
Total liabilities | 21,814,547 | 20,799,443 |
Future policy benefits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative, Net Liability | 1,522,000 | 761,000 |
Embedded Derivative, Fair Value of Embedded Derivative Gross Asset | 31,000 | 60,000 |
Embedded Derivative, Fair Value of Embedded Derivative Gross Liability | 1,553,000 | 821,000 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 1,808,546 | 1,550,096 |
Fixed maturities, trading | 17,857 | 13,700 |
Equity securities | 8,438 | 7,512 |
Cash equivalents | 61,000 | 55,896 |
Other invested assets | 26,147 | 21,384 |
Reinsurance recoverables | 1,521,833 | 760,558 |
Receivables from parent and affiliates | 808 | 2,433 |
Subtotal excluding separate account assets | 3,444,629 | 2,411,579 |
Separate account assets | 13,926,414 | 13,927,275 |
TOTAL ASSETS | 17,371,043 | 16,338,854 |
Future policy benefits | 1,521,833 | 760,558 |
Policyholders’ account balances | 145,272 | 133,793 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 1,667,105 | 894,351 |
Assets Netting | (15,902) | (13,029) |
Liabilities Netting | (15,894) | (13,043) |
Netting | 0 | 0 |
Fair Value, Measurements, Recurring | Other invested assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Netting | (15,902) | (13,029) |
Fair Value, Measurements, Recurring | Payables to parent and affiliates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities Netting | (15,894) | (13,043) |
Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 11,838 | 16,015 |
Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 180,917 | 133,677 |
Fair Value, Measurements, Recurring | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 86,316 | 77,280 |
Fair Value, Measurements, Recurring | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 875,116 | 697,520 |
Fair Value, Measurements, Recurring | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 242,594 | 233,215 |
Fair Value, Measurements, Recurring | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 68,659 | 57,993 |
Fair Value, Measurements, Recurring | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 164,387 | 163,892 |
Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 18,612 | 18,542 |
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 156,055 | 147,389 |
Fair Value, Measurements, Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 4,052 | 4,573 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fixed maturities, trading | 0 | 0 |
Equity securities | 0 | 0 |
Cash equivalents | 0 | 0 |
Other invested assets | 0 | 0 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Subtotal excluding separate account assets | 0 | 0 |
Separate account assets | 0 | 0 |
TOTAL ASSETS | 0 | 0 |
Future policy benefits | 0 | 0 |
Policyholders’ account balances | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 1,787,418 | 1,548,918 |
Fixed maturities, trading | 17,857 | 13,700 |
Equity securities | 126 | 207 |
Cash equivalents | 61,000 | 55,896 |
Other invested assets | 42,049 | 34,413 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 808 | 2,433 |
Subtotal excluding separate account assets | 1,909,258 | 1,655,567 |
Separate account assets | 13,926,414 | 13,927,275 |
TOTAL ASSETS | 15,835,672 | 15,582,842 |
Future policy benefits | 0 | 0 |
Policyholders’ account balances | 0 | 0 |
Payables to parent and affiliates | 15,894 | 13,043 |
Total liabilities | 15,894 | 13,043 |
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 11,838 | 16,015 |
Fair Value, Measurements, Recurring | Level 2 | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 180,917 | 133,677 |
Fair Value, Measurements, Recurring | Level 2 | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 86,316 | 77,280 |
Fair Value, Measurements, Recurring | Level 2 | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 875,116 | 697,520 |
Fair Value, Measurements, Recurring | Level 2 | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 242,181 | 232,903 |
Fair Value, Measurements, Recurring | Level 2 | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 68,659 | 57,993 |
Fair Value, Measurements, Recurring | Level 2 | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 143,672 | 163,026 |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 18,612 | 18,542 |
Fair Value, Measurements, Recurring | Level 2 | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 156,055 | 147,389 |
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 4,052 | 4,573 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 21,128 | 1,178 |
Fixed maturities, trading | 0 | 0 |
Equity securities | 8,312 | 7,305 |
Cash equivalents | 0 | 0 |
Other invested assets | 0 | 0 |
Reinsurance recoverables | 1,521,833 | 760,558 |
Receivables from parent and affiliates | 0 | 0 |
Subtotal excluding separate account assets | 1,551,273 | 769,041 |
Separate account assets | 0 | 0 |
TOTAL ASSETS | 1,551,273 | 769,041 |
Future policy benefits | 1,521,833 | 760,558 |
Policyholders’ account balances | 145,272 | 133,793 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 1,667,105 | 894,351 |
Fair Value, Measurements, Recurring | Level 3 | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 413 | 312 |
Fair Value, Measurements, Recurring | Level 3 | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 20,715 | 866 |
Fair Value, Measurements, Recurring | Level 3 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Other invested assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investment measured at NAV per share | 3,000 | 3,300 |
Separate account assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investment measured at NAV per share | $ 1,961,000 | $ 1,977,000 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities (Quantitative Info for Level 3 Inputs) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Corporate securities | $ 5,065 | $ 5,139 |
Future policy benefits | 3,235,868 | 2,302,959 |
Policyholders’ account balances | 2,508,775 | 2,424,120 |
Fair Value, Measurements, Recurring | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Future policy benefits | 1,521,833 | 760,558 |
Policyholders’ account balances | 145,272 | 133,793 |
Derivative Asset, Collateral, Obligation to Return Cash, Offset | $ 0 | 0 |
Level 3 | Minimum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs, Policyholder Age | 45 years | |
Level 3 | Minimum | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Mortality rate | 0.00% | |
Level 3 | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs, Policyholder Age | 90 years | |
Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Future policy benefits | $ 1,521,833 | 760,558 |
Policyholders’ account balances | $ 145,272 | $ 133,793 |
Level 3 | Internal | Minimum | Discounted cash flow | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 1.00% | 1.00% |
Spread over LIBOR | 0.09% | 0.10% |
Utilization rate | 39.00% | 43.00% |
Withdrawal rate (greater than maximum) | 76.00% | 78.00% |
Mortality rate | 0.00% | 0.00% |
Equity volatility curve | 18.00% | 13.00% |
Level 3 | Internal | Minimum | Discounted cash flow | Policyholders' account balances | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 1.00% | 1.00% |
Spread over LIBOR | 0.09% | 0.10% |
Mortality rate | 0.00% | 0.00% |
Equity volatility curve | 19.00% | 10.00% |
Level 3 | Internal | Minimum | Discounted cash flow | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 2.36% | |
Level 3 | Internal | Maximum | Discounted cash flow | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 20.00% | 18.00% |
Spread over LIBOR | 1.59% | 1.23% |
Utilization rate | 96.00% | 97.00% |
Withdrawal rate (greater than maximum) | 100.00% | 100.00% |
Mortality rate | 15.00% | 15.00% |
Equity volatility curve | 26.00% | 23.00% |
Level 3 | Internal | Maximum | Discounted cash flow | Policyholders' account balances | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 6.00% | 6.00% |
Spread over LIBOR | 1.59% | 1.23% |
Mortality rate | 24.00% | 24.00% |
Equity volatility curve | 35.00% | 23.00% |
Level 3 | Internal | Maximum | Discounted cash flow | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 2.54% | |
Level 3 | Internal | Weighted Average | Discounted cash flow | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 2.47% | |
Level 3 | Internal | Fair Value, Measurements, Recurring | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Future policy benefits | $ 1,521,833 | $ 760,558 |
Level 3 | Internal | Fair Value, Measurements, Recurring | Policyholders' account balances | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Policyholders’ account balances | 145,272 | 133,793 |
Level 3 | Internal | Fair Value, Measurements, Recurring | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Corporate securities | 21,128 | |
Level 3 | Internal | Fair Value, Measurements, Recurring | Reinsurance recoverables | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Reinsurance recoverables | $ 1,521,833 | $ 760,558 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities (Changes in Level 3 Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | $ 7,187 | $ 7,206 | $ 7,305 | $ 6,622 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | 8,312 | 7,133 | 8,312 | 7,133 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 1,125 | (73) | 1,007 | 511 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 1,125 | (72) | 1,007 | 511 |
Equity securities | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Equity securities | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 1,125 | (73) | 1,007 | 511 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 1,125 | (72) | 1,007 | 511 |
Equity securities | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | ||
Equity securities | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Reinsurance recoverables | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | 1,741,924 | 757,236 | 760,558 | 488,825 |
Purchases | 27,766 | 24,883 | 80,851 | 70,911 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | 1,521,833 | 1,018,293 | 1,521,833 | 1,018,293 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (247,857) | 236,174 | 680,424 | 458,557 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | (236,111) | 244,163 | 697,223 | 470,731 |
Reinsurance recoverables | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (247,857) | 236,174 | 680,424 | 458,557 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | (236,111) | 244,163 | 697,223 | 470,731 |
Reinsurance recoverables | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Reinsurance recoverables | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | ||
Reinsurance recoverables | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Future policy benefits | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | (1,741,924) | (757,236) | (760,558) | (488,825) |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | (27,766) | (24,883) | (80,851) | (70,911) |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | (1,521,833) | (1,018,293) | (1,521,833) | (1,018,293) |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 247,857 | (236,174) | (680,424) | (458,557) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 236,111 | (244,163) | (697,223) | (470,731) |
Future policy benefits | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 247,857 | (236,174) | (680,424) | (458,557) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 236,111 | (244,163) | (697,223) | (470,731) |
Future policy benefits | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Future policy benefits | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | ||
Future policy benefits | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Policyholders' account balances | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | (143,242) | (112,417) | (133,793) | (1,949) |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | (1,798) | (14,467) | (16,496) | (21,427) |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | (145,272) | (123,088) | (145,272) | (123,088) |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (232) | 3,796 | 5,017 | (99,712) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 1,809 | 5,346 | 6,849 | (98,158) |
Policyholders' account balances | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (232) | 3,796 | 5,017 | (99,712) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 1,809 | 5,346 | 6,849 | (98,158) |
Policyholders' account balances | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Policyholders' account balances | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | ||
Policyholders' account balances | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Available-for-sale | Fixed maturities | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | (1,730) | 32 | (4,893) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | (1,731) | 0 | (4,893) |
Available-for-sale | Fixed maturities | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Available-for-sale | Fixed maturities | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 895 | 688 | 1,040 | 3,041 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 895 | 1,085 | ||
Available-for-sale | Fixed maturities | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 25 | 8 | 171 |
Available-for-sale | Fixed maturities | Corporate securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | 20,232 | 2,035 | 1,178 | 2,882 |
Purchases | 0 | 180 | 0 | 428 |
Sales | 1 | 0 | (860) | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | (638) |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 19,730 | 639 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | 21,128 | 1,198 | 21,128 | 1,198 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 895 | (1,017) | 1,080 | (2,113) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 895 | (1,731) | 1,085 | (4,893) |
Available-for-sale | Fixed maturities | Structured securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | (68) |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 24,960 |
Transfers out of Level 3 | 0 | 0 | 0 | (25,324) |
Fair Value, end of period | 0 | 0 | 0 | 0 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 432 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities (Financial Instruments where Carrying Amounts and Fair Values May Differ) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Policy loans | $ 212,519 | $ 211,986 |
Cash and cash equivalents | 68,360 | 55,924 |
Accrued investment income | 21,027 | 19,539 |
Reinsurance recoverables | 4,116,435 | 3,200,642 |
Receivables from parent and affiliates | 32,775 | 32,820 |
Liabilities: | ||
Cash collateral for loaned securities | 2,731 | 2,481 |
Short-term debt | 0 | |
Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 144,666 | 148,855 |
Policy loans | 212,519 | 211,986 |
Cash and cash equivalents | 7,360 | 28 |
Accrued investment income | 21,027 | 19,539 |
Reinsurance recoverables | 28,806 | 26,400 |
Receivables from parent and affiliates | 31,967 | 30,387 |
Other assets | 3,205 | 3,071 |
Total assets | 449,550 | 440,266 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 256,495 | 232,714 |
Cash collateral for loaned securities | 2,731 | 2,481 |
Short-term debt | 0 | 89 |
Payables to parent and affiliates | 13,661 | 24,958 |
Other liabilities | 44,052 | 41,310 |
Total liabilities | 316,939 | 301,552 |
Carrying Amount | ||
Assets: | ||
Commercial mortgage and other loans | 136,705 | 143,098 |
Policy loans | 212,519 | 211,986 |
Cash and cash equivalents | 7,360 | 28 |
Accrued investment income | 21,027 | 19,539 |
Reinsurance recoverables | 26,975 | 26,286 |
Receivables from parent and affiliates | 31,967 | 30,387 |
Other assets | 3,205 | 3,071 |
Total assets | 439,758 | 434,395 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 254,662 | 232,600 |
Cash collateral for loaned securities | 2,731 | 2,481 |
Short-term debt | 0 | 89 |
Payables to parent and affiliates | 13,661 | 24,958 |
Other liabilities | 44,052 | 41,310 |
Total liabilities | 315,106 | 301,438 |
Level 1 | Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 0 | 0 |
Policy loans | 0 | 0 |
Cash and cash equivalents | 7,360 | 28 |
Accrued investment income | 0 | 0 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 7,360 | 28 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 0 | 0 |
Cash collateral for loaned securities | 0 | 0 |
Short-term debt | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 0 | 0 |
Policy loans | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Accrued investment income | 21,027 | 19,539 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 31,967 | 30,387 |
Other assets | 3,205 | 3,071 |
Total assets | 56,199 | 52,997 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 214,695 | 192,239 |
Cash collateral for loaned securities | 2,731 | 2,481 |
Short-term debt | 0 | 89 |
Payables to parent and affiliates | 13,661 | 24,958 |
Other liabilities | 44,052 | 41,310 |
Total liabilities | 275,139 | 261,077 |
Level 3 | Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 144,666 | 148,855 |
Policy loans | 212,519 | 211,986 |
Cash and cash equivalents | 0 | 0 |
Accrued investment income | 0 | 0 |
Reinsurance recoverables | 28,806 | 26,400 |
Receivables from parent and affiliates | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 385,991 | 387,241 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 41,800 | 40,475 |
Cash collateral for loaned securities | 0 | 0 |
Short-term debt | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | $ 41,800 | $ 40,475 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 1,283 | $ 247 | $ (5,441) | $ 19 | |
Effective income tax rate, percent | (14.15%) | 0.06% | |||
Federal Statutory income tax rate, percent | 21.00% | 35.00% | |||
CARES Act NOL Carryback | $ 5,000 |
Reinsurance (Reinsurance amount
Reinsurance (Reinsurance amounts included in the Statement of Financial Position) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | $ 4,116,435 | $ 3,200,642 | |
Policy loans | (212,519) | (211,986) | |
Deferred policy acquisition costs | (213,072) | (178,813) | |
Other assets | 20,042 | 21,203 | |
Other liabilities | 163,252 | [1] | 140,628 |
Impacts of Reinsurance | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | 4,116,435 | 3,200,642 | |
Policy loans | (21,317) | (18,627) | |
Deferred policy acquisition costs | (665,414) | (736,575) | |
Deferred sales inducements | (40,283) | (47,423) | |
Other assets | 15,195 | 16,540 | |
Other liabilities | 112,754 | 93,557 | |
Unaffiliated activity | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | $ 4,000 | $ 4,000 | |
[1] | September 30, 2020 amounts include the impacts of the January 1, 2020 adoption of ASU 2016-13. See Note 2 for details. |
Reinsurance (Reinsurance Recove
Reinsurance (Reinsurance Recoverable by Counterparty) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | $ 4,116,435 | $ 3,200,642 |
Prudential Insurance | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 2,044,812 | 1,245,450 |
PAR U | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 1,100,831 | 1,027,304 |
PARCC | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 438,289 | 458,441 |
PAR Term | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 235,103 | 219,757 |
Term Re | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 214,421 | 190,633 |
DART | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 59,500 | 38,651 |
Pruco Life | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 19,523 | 16,428 |
Unaffiliated | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | $ 3,956 | $ 3,978 |
Reinsurance (Reinsurance amou_2
Reinsurance (Reinsurance amounts included in the Statements of Operations and Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Premiums: | ||||
Direct | $ 59,724 | $ 62,203 | $ 187,332 | $ 187,147 |
Ceded | (54,138) | (59,104) | (171,423) | (177,429) |
Net premiums | 5,586 | 3,099 | 15,909 | 9,718 |
Policy charges and fee income: | ||||
Direct | 101,644 | 96,550 | 305,653 | 309,054 |
Ceded | (87,021) | (86,206) | (248,818) | (256,256) |
Net policy charges and fee income | 14,623 | 10,344 | 56,835 | 52,798 |
Net investment income: | ||||
Direct | 23,433 | 18,232 | 61,499 | 56,775 |
Ceded | (173) | (173) | (591) | (503) |
Net investment income | 23,260 | 18,059 | 60,908 | 56,272 |
Asset administration fees: | ||||
Direct | 10,196 | 9,761 | 29,211 | 28,034 |
Ceded | (8,440) | (8,261) | (24,344) | (23,742) |
Net asset administration fees | 1,756 | 1,500 | 4,867 | 4,292 |
Realized investment gains (losses), net: | ||||
Direct | 250,085 | (231,963) | (672,787) | (459,863) |
Ceded | (247,550) | 234,682 | 680,875 | 451,416 |
Realized investment gains (losses), net | 2,535 | 2,719 | 8,088 | (8,447) |
Policyholders’ benefits (including change in reserves): | ||||
Direct | 91,346 | 157,537 | 348,921 | 360,844 |
Ceded | (90,119) | (155,140) | (317,565) | (338,119) |
Net policyholders’ benefits (including change in reserves) | 1,227 | 2,397 | 31,356 | 22,725 |
Interest credited to policyholders’ account balances: | ||||
Direct | 20,388 | 22,351 | 58,707 | 54,839 |
Ceded | (9,552) | (8,592) | (25,693) | (22,022) |
Net interest credited to policyholders’ account balances | 10,836 | 13,759 | 33,014 | 32,817 |
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization | (50,216) | (48,298) | (149,912) | (145,971) |
Unaffiliated activity | ||||
Policy charges and fee income: | ||||
Ceded | (4,000) | 0 | (4,000) | (4,000) |
Policyholders’ benefits (including change in reserves): | ||||
Ceded | $ (3,400) | $ (3,000) | $ (1,900) | $ (1,000) |
Reinsurance (Life Insurance In
Reinsurance (Life Insurance In Force) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Reinsurance Disclosures [Abstract] | ||
Direct gross life insurance face amount in force | $ 152,707,454 | $ 146,659,725 |
Reinsurance ceded | (138,917,401) | (133,731,588) |
Net life insurance face amount in force | $ 13,790,053 | $ 12,928,137 |
Reinsurance (Narratives) (Detai
Reinsurance (Narratives) (Details) - Affiliated Entity | Jul. 01, 2012 | Dec. 31, 2009 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2013 |
PAR U | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% | ||||
PARCC | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 90.00% | ||||
PAR Term | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% | ||||
Term Re | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% | ||||
DART | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% |
Equity (Accumulated Other Compr
Equity (Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 85,635 | |||
Income tax benefit (expense) | $ (3,083) | $ (8,530) | (19,149) | $ (28,031) |
Ending Balance | 157,669 | 157,669 | ||
Foreign Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (981) | (989) | ||
Change in OCI before reclassifications | 133 | (60) | ||
Amounts reclassified from AOCI | 0 | 0 | ||
Income tax benefit (expense) | (28) | 13 | ||
Ending Balance | (876) | (1,036) | (876) | (1,036) |
Net Unrealized Investment Gains (Losses) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 86,616 | (13,378) | ||
Change in OCI before reclassifications | 91,833 | 125,543 | ||
Amounts reclassified from AOCI | (783) | 7,999 | ||
Income tax benefit (expense) | (19,121) | (28,044) | ||
Ending Balance | 158,545 | 92,120 | 158,545 | 92,120 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 85,635 | (14,367) | ||
Change in OCI before reclassifications | 91,966 | 125,483 | ||
Amounts reclassified from AOCI | (783) | 7,999 | ||
Income tax benefit (expense) | (19,149) | (28,031) | ||
Ending Balance | 157,669 | 91,084 | 157,669 | 91,084 |
Cash flow hedges | Net Unrealized Investment Gains (Losses) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 3,000 | 2,000 | ||
Ending Balance | $ 7,000 | $ 8,000 | $ 7,000 | $ 8,000 |
Equity (Reclassification out of
Equity (Reclassification out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Unrealized Investment Gains (Losses) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | $ (783) | $ 7,999 | ||
Total reclassifications for the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | (783) | 7,999 | ||
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Investment Gains (Losses) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | $ (247) | $ (3,695) | 783 | (7,999) |
Reclassification out of Accumulated Other Comprehensive Income | Total reclassifications for the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | (247) | (3,695) | 783 | (7,999) |
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized investment gains (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net unrealized investment gains (losses) | 137 | (2,290) | (506) | (5,769) |
Reclassification out of Accumulated Other Comprehensive Income | Currency/Interest Rate | Cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net unrealized investment gains (losses) | $ (384) | $ (1,405) | $ 1,289 | $ (2,230) |
Equity (All Other Net Unrealize
Equity (All Other Net Unrealized Investment Gains (Losses) in AOCI) (Details) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | $ 85,635 |
Ending Balance | 157,669 |
Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 86,616 |
Ending Balance | 158,545 |
All Other | Net Unrealized Gains (Losses) on Investments | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 116,039 |
Net investment gains (losses) on investments arising during the period | 100,965 |
Reclassification adjustment for (gains) losses included in net income | (783) |
Impact of net unrealized investment (gains) losses on DAC and other costs | 0 |
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities | 0 |
Ending Balance | 216,221 |
All Other | Deferred Policy Acquisition Costs and Other Costs | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 8,973 |
Net investment gains (losses) on investments arising during the period | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 |
Impact of net unrealized investment (gains) losses on DAC and other costs | 18,403 |
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities | 0 |
Ending Balance | 27,376 |
All Other | Future Policy Benefits and Policyholders' Account Balances | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (15,373) |
Net investment gains (losses) on investments arising during the period | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 |
Impact of net unrealized investment (gains) losses on DAC and other costs | 0 |
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities | (27,535) |
Ending Balance | (42,908) |
All Other | Deferred Income Tax (Liability) Benefit | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (23,023) |
Net investment gains (losses) on investments arising during the period | (21,203) |
Reclassification adjustment for (gains) losses included in net income | 164 |
Impact of net unrealized investment (gains) losses on DAC and other costs | (3,865) |
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities | 5,783 |
Ending Balance | (42,144) |
All Other | Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 86,616 |
Net investment gains (losses) on investments arising during the period | 79,762 |
Reclassification adjustment for (gains) losses included in net income | (619) |
Impact of net unrealized investment (gains) losses on DAC and other costs | 14,538 |
Impact of net unrealized investment (gains) losses on future policy benefits, policyholders' account balances and other liabilities | (21,752) |
Ending Balance | $ 158,545 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)policy | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||||||
Asset administration fees | $ 1,756,000 | $ 1,500,000 | $ 4,867,000 | $ 4,292,000 | |||
Commissions and fees | 14,623,000 | 10,344,000 | 56,835,000 | 52,798,000 | |||
Other invested assets | 103,429,000 | $ 89,536,000 | 103,429,000 | $ 89,536,000 | |||
Net investment income | 23,260,000 | 18,059,000 | 60,908,000 | 56,272,000 | |||
Debt Outstanding | 0 | 0 | |||||
Short-term debt to affiliates | 0 | 89,000 | 0 | 89,000 | |||
Contributed capital | $ 85,000,000 | 60,000,000 | |||||
Dividends | 0 | ||||||
Pruco Life | |||||||
Related Party Transaction [Line Items] | |||||||
Dividends | 0 | ||||||
Prudential Insurance | |||||||
Related Party Transaction [Line Items] | |||||||
Stock option program plan expense | 0 | 0 | 100,000 | 100,000 | |||
Deferred compensation program expense | 200,000 | 100,000 | 500,000 | 500,000 | |||
Pension plan expense | 500,000 | 600,000 | 1,500,000 | 1,700,000 | |||
Welfare plan expense | 500,000 | 700,000 | $ 1,600,000 | 2,100,000 | |||
Defined contribution plan employer matching contribution percent | 4.00% | ||||||
Defined contribution plan, cost recognized | 200,000 | 300,000 | $ 600,000 | 800,000 | |||
Number of Corporate Owned Life Insurance policies sold | policy | 3 | ||||||
Prudential Financial | |||||||
Related Party Transaction [Line Items] | |||||||
Company’s share of corporate expenses | 2,000,000 | 2,000,000 | $ 5,000,000 | 6,000,000 | |||
Number of Corporate Owned Life Insurance policies sold | policy | 1 | ||||||
Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Accrued interest receivable related to long-term notes receivable | 0 | $ 0 | |||||
Revenue related to long-term notes receivables | 0 | 100,000 | 100,000 | ||||
Line of credit facility, maximum borrowing capacity | 200,000,000 | 200,000,000 | |||||
Short-term debt to affiliates | 100,000 | 100,000 | |||||
Interest expense related to loans payable | 0 | 100,000 | 0 | 100,000 | |||
Affiliated Entity | PAD | |||||||
Related Party Transaction [Line Items] | |||||||
Commissions and fees | 12,000,000 | 21,000,000 | 41,000,000 | 60,000,000 | |||
Affiliated Entity | ASTISI and PGIM Investments | |||||||
Related Party Transaction [Line Items] | |||||||
Asset administration fees | 8,000,000 | 8,000,000 | 24,000,000 | 24,000,000 | |||
Affiliated Entity | PGIM | |||||||
Related Party Transaction [Line Items] | |||||||
Net investment income | 800,000 | 600,000 | 2,100,000 | 1,700,000 | |||
Affiliated Entity | PGIM Investments, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Asset administration fees | 2,000,000 | 1,000,000 | 5,000,000 | 4,000,000 | |||
Prudential Financial Joint Ventures | |||||||
Related Party Transaction [Line Items] | |||||||
Other invested assets | 39,000,000 | 37,000,000 | 39,000,000 | 37,000,000 | |||
Net investment income | 2,100,000 | 0 | 2,400,000 | 2,200,000 | |||
Prudential Insurance and Prudential Financial | |||||||
Related Party Transaction [Line Items] | |||||||
Life Insurance, Corporate or Bank Owned, amount | 2,852,000,000 | $ 2,743,000,000 | 2,852,000,000 | $ 2,743,000,000 | |||
Fees related to Life Insurance, Corporate or Bank Owned, amount | 7,000,000 | $ 6,000,000 | $ 21,000,000 | $ 20,000,000 | |||
Concentration Risk, Percentage | 10.00% | ||||||
Maximum COLI Mortality Risk | $ 100,000 | $ 100,000 |
Related Party Transactions (Aff
Related Party Transactions (Affiliated Notes Receivable) (Details) - Affiliated Entity - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||
Total long-term notes receivable - affiliated | $ 808 | $ 2,433 |
U.S. Dollar fixed rate notes | ||
Related Party Transaction [Line Items] | ||
Total long-term notes receivable - affiliated | $ 808 | $ 2,433 |
U.S. Dollar fixed rate notes | Minimum | ||
Related Party Transaction [Line Items] | ||
Interest Rates | 0.00% | |
U.S. Dollar fixed rate notes | Maximum | ||
Related Party Transaction [Line Items] | ||
Interest Rates | 14.85% |
Related Party Transactions (A_2
Related Party Transactions (Affiliated Asset Transfer) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Transaction [Line Items] | ||||
Realized investment gains (losses), net | $ 2,535 | $ 2,719 | $ 8,088 | $ (8,447) |
Affiliated Entity | Prudential Annuities Life Assurance Corporation April 2019 Sale | ||||
Related Party Transaction [Line Items] | ||||
Fair Value | 3,293 | 3,293 | ||
Book Value | 2,995 | 2,995 | ||
APIC, Net of Tax Increase/(Decrease) | 0 | 0 | ||
Realized investment gains (losses), net | 298 | |||
Affiliated Entity | Prudential Insurance April 2020 Purchase | ||||
Related Party Transaction [Line Items] | ||||
Fair Value | 3,485 | 3,485 | ||
Book Value | 3,320 | 3,320 | ||
APIC, Net of Tax Increase/(Decrease) | $ (130) | (130) | ||
Realized investment gains (losses), net | $ 0 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingent Liabilities [Line Items] | |||
Litigation and regulatory matters loss contingency, range of possible loss, maximum (less than) | $ 10 | $ 10 | |
Commitments | Commercial Mortgage Loans | |||
Commitments and Contingent Liabilities [Line Items] | |||
Total outstanding mortgage loan commitments | 0.4 | 0.4 | $ 4 |
Allowance for credit losses | 0 | 0 | |
Change in allowance for credit losses | 0 | 0 | |
Commitments | Investments | |||
Commitments and Contingent Liabilities [Line Items] | |||
Commitments to Purchase Investment (excluding Commercial Mortgage Loans) | 70 | 70 | $ 48 |
Purchase Commitment | |||
Commitments and Contingent Liabilities [Line Items] | |||
Change in allowance for credit losses | $ 0 | $ 0 |
Revision to Prior Year Inform_3
Revision to Prior Year Information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Policy charges and fee income | $ (19,045) | $ (13,874) | [1] |
Cash flows from (used in) operating activities | 2,784 | 17,174 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Policyholders’ account withdrawals | (247,216) | (263,941) | [1] |
Other, net | 7,217 | (7,606) | [1] |
Cash flows from (used in) financing activities | $ 87,932 | 57,508 | |
As Previously Reported | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Policy charges and fee income | (37,295) | ||
Cash flows from (used in) operating activities | (6,247) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Policyholders’ account withdrawals | (248,126) | ||
Other, net | 0 | ||
Cash flows from (used in) financing activities | 80,929 | ||
Revision | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Policy charges and fee income | 23,421 | ||
Cash flows from (used in) operating activities | 23,421 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Policyholders’ account withdrawals | (15,815) | ||
Other, net | (7,606) | ||
Cash flows from (used in) financing activities | $ (23,421) | ||
[1] | Prior period amounts have been revised to correct an error. See Note 11 for details. |