Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 01, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | PROTECTIVE LIFE CORP | ||
Entity Central Index Key | 355,429 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 1,000 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | ||||
Premiums and policy fees | $ 3,008,050 | $ 3,477,419 | $ 3,407,931 | |
Reinsurance ceded | (1,154,978) | (1,360,735) | (1,314,716) | |
Net of reinsurance ceded | 1,853,072 | 2,116,684 | 2,093,215 | |
Net investment income | 1,632,948 | 2,051,588 | 1,942,456 | |
Realized investment gains (losses): | ||||
Derivative financial instruments | 29,997 | (305,828) | (40,288) | |
All other investments | (166,886) | 121,428 | 90,659 | |
Other-than-temporary impairment losses | (28,659) | (3,962) | (32,075) | |
Portion recognized in other comprehensive income (before taxes) | 1,666 | (7,780) | 14,327 | |
Net impairment losses recognized in earnings | (26,993) | (11,742) | (17,748) | |
Other income | 388,531 | 446,662 | 415,653 | |
Total revenues | 3,710,669 | 4,418,792 | 4,483,947 | |
Benefits and expenses | ||||
Benefits and settlement expenses, net of reinsurance ceded: (Successor 2017 - $1,242,797; Successor 2016 - $1,181,960; 2015 - $1,025,596); (Predecessor 2015 - $87,674) | 2,539,943 | 2,957,270 | 2,880,435 | |
Amortization of deferred policy acquisition costs and value of business acquired | 94,056 | 78,221 | 149,064 | |
Other operating expenses, net of reinsurance ceded: (Successor 2017 - $222,963; Successor 2016 - $207,197; 2015 - $191,346); (Predecessor 2015 - $35,036) | 676,828 | 948,244 | 860,451 | |
Total benefits and expenses | 3,310,827 | 3,983,735 | 3,889,950 | |
Income before income tax | $ 1,182 | 399,842 | 435,057 | 593,997 |
Income tax (benefit) expense | ||||
Current | 1,471 | 26,252 | (46,719) | |
Deferred | 130,072 | (697,727) | 247,687 | |
Total income tax (benefit) expense | 131,543 | (671,475) | 200,968 | |
Net income | $ 268,299 | $ 1,106,532 | $ 393,029 | |
Predecessor | ||||
Revenues | ||||
Premiums and policy fees | 261,866 | |||
Reinsurance ceded | (89,956) | |||
Net of reinsurance ceded | 171,910 | |||
Net investment income | 175,180 | |||
Realized investment gains (losses): | ||||
Derivative financial instruments | (123,274) | |||
All other investments | 81,153 | |||
Other-than-temporary impairment losses | (636) | |||
Portion recognized in other comprehensive income (before taxes) | 155 | |||
Net impairment losses recognized in earnings | (481) | |||
Other income | 36,421 | |||
Total revenues | 340,909 | |||
Benefits and expenses | ||||
Benefits and settlement expenses, net of reinsurance ceded: (Successor 2017 - $1,242,797; Successor 2016 - $1,181,960; 2015 - $1,025,596); (Predecessor 2015 - $87,674) | 267,287 | |||
Amortization of deferred policy acquisition costs and value of business acquired | 4,072 | |||
Other operating expenses, net of reinsurance ceded: (Successor 2017 - $222,963; Successor 2016 - $207,197; 2015 - $191,346); (Predecessor 2015 - $35,036) | 68,368 | |||
Total benefits and expenses | 339,727 | |||
Income before income tax | 1,182 | |||
Income tax (benefit) expense | ||||
Current | (31,118) | |||
Deferred | 30,791 | |||
Total income tax (benefit) expense | (327) | |||
Net income | $ 1,509 | |||
Net income - basic (in dollars per share) | $ 0.02 | |||
Net income - diluted (in dollars per share) | 0.02 | |||
Cash dividends paid per share (in dollars per share) | $ 0 | |||
Average shares outstanding - basic (in shares) | 80,452,848 | |||
Average shares outstanding - diluted (in shares) | 81,759,287 |
CONSOLIDATED STATEMENTS OF INC3
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Benefits and settlement expenses, reinsurance ceded | $ 1,025,596 | $ 1,242,797 | $ 1,181,960 | |
Other operating expenses, reinsurance ceded | $ 191,346 | $ 222,963 | $ 207,197 | |
Predecessor | ||||
Benefits and settlement expenses, reinsurance ceded | $ 87,674 | |||
Other operating expenses, reinsurance ceded | $ 35,036 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income | $ 268,299 | $ 1,106,532 | $ 393,029 | |
Other comprehensive income (loss): | ||||
Change in net unrealized gains (losses) on investments, net of income tax: (Successor 2017 - $329,801; 2016 - $326,838; 2015 - $(680,634)); (Predecessor 2015 - $259,738) | (1,264,034) | 700,536 | 606,985 | |
Reclassification adjustment for investment amounts included in net income, net of income tax: (Successor 2017 - $489; 2016 - $(5,094); 2015 - $9,349); (Predecessor 2015 - $(2,244)) | 17,362 | 642 | (9,460) | |
Change in net unrealized (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2017 - $3,858; 2016 - $(3,652); 2015 - $(212)); (Predecessor 2015 - $(131)) | (393) | 7,153 | (6,782) | |
Change in accumulated (loss) gain—derivatives, net of income tax: (Successor 2017 - $(303); 2016 - $370; 2015 - $(45)); (Predecessor 2015 - $5) | (86) | (563) | 688 | |
Reclassification adjustment for derivative amounts included in net income, net of income tax: (Successor 2017 - $243; 2016 - $21; 2015 - $45); (Predecessor 2015 - $13) | 86 | 451 | 39 | |
Change in postretirement benefits liability adjustment, net of income tax: (Successor 2017 - $(4,047); 2016 - $(2,616); 2015 - $3,194); (Predecessor 2015 - $(6,475)) | 5,931 | (15,225) | (4,859) | |
Total other comprehensive income (loss) | (1,241,134) | 692,994 | 586,611 | |
Total comprehensive income (loss) | $ (972,835) | $ 1,799,526 | $ 979,640 | |
Predecessor | ||||
Net income | $ 1,509 | |||
Other comprehensive income (loss): | ||||
Change in net unrealized gains (losses) on investments, net of income tax: (Successor 2017 - $329,801; 2016 - $326,838; 2015 - $(680,634)); (Predecessor 2015 - $259,738) | 482,370 | |||
Reclassification adjustment for investment amounts included in net income, net of income tax: (Successor 2017 - $489; 2016 - $(5,094); 2015 - $9,349); (Predecessor 2015 - $(2,244)) | (4,166) | |||
Change in net unrealized (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2017 - $3,858; 2016 - $(3,652); 2015 - $(212)); (Predecessor 2015 - $(131)) | (243) | |||
Change in accumulated (loss) gain—derivatives, net of income tax: (Successor 2017 - $(303); 2016 - $370; 2015 - $(45)); (Predecessor 2015 - $5) | 9 | |||
Reclassification adjustment for derivative amounts included in net income, net of income tax: (Successor 2017 - $243; 2016 - $21; 2015 - $45); (Predecessor 2015 - $13) | 23 | |||
Change in postretirement benefits liability adjustment, net of income tax: (Successor 2017 - $(4,047); 2016 - $(2,616); 2015 - $3,194); (Predecessor 2015 - $(6,475)) | (12,025) | |||
Total other comprehensive income (loss) | 465,968 | |||
Total comprehensive income (loss) | $ 467,477 |
CONSOLIDATED STATEMENTS OF COM5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in net unrealized gains (losses) on investments, income tax | $ (680,634) | $ 329,801 | $ 326,838 | |
Reclassification adjustment for investment amounts included in net income, income tax | 9,349 | 489 | (5,094) | |
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (212) | 3,858 | (3,652) | |
Change in accumulated (loss) gain - derivatives, income tax | (45) | (303) | 370 | |
Reclassification adjustment for derivative amounts included in net income, income tax | 45 | 243 | 21 | |
Change in postretirement benefits liability adjustment, income tax | $ 3,194 | $ (4,047) | $ (2,616) | |
Predecessor | ||||
Change in net unrealized gains (losses) on investments, income tax | $ 259,738 | |||
Reclassification adjustment for investment amounts included in net income, income tax | (2,244) | |||
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (131) | |||
Change in accumulated (loss) gain - derivatives, income tax | 5 | |||
Reclassification adjustment for derivative amounts included in net income, income tax | 13 | |||
Change in postretirement benefits liability adjustment, income tax | $ (6,475) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Fixed maturities, at fair value (amortized cost: Successor 2017 - $41,153,551; 2016 - $39,832,724) | $ 41,176,052 | $ 38,183,337 |
Fixed maturities, at amortized cost (fair value: Successor 2017 - $2,776,327; 2016 - $2,733,340) | 2,718,904 | 2,770,177 |
Equity securities, at fair value (cost: Successor 2017 - $740,813; 2016 - $768,423) | 754,360 | 754,489 |
Mortgage loans (related to securitizations: Successor 2017 - $226,409; 2016 - $277,964) | 6,817,723 | 6,132,125 |
Investment real estate, net of accumulated depreciation (Successor 2017 - $132; 2016 - $252) | 8,355 | 8,060 |
Policy loans | 1,615,615 | 1,650,240 |
Other long-term investments | 915,595 | 865,304 |
Short-term investments | 615,210 | 332,431 |
Total investments | 54,621,814 | 50,696,163 |
Cash | 252,310 | 348,182 |
Accrued investment income | 491,802 | 482,388 |
Accounts and premiums receivable | 124,934 | 118,303 |
Reinsurance receivables | 5,075,698 | 5,323,846 |
Deferred policy acquisition costs and value of business acquired | 2,199,577 | 2,019,829 |
Goodwill | 793,470 | 793,470 |
Other intangibles, net of accumulated amortization (Successor 2017 - $140,368; 2016 - $79,226) | 663,572 | 688,083 |
Property and equipment, net of accumulated depreciation (Successor 2017 - $22,926; 2016 - $17,450) | 111,417 | 106,111 |
Other assets | 227,357 | 170,004 |
Income tax receivable | 76,543 | 116,823 |
Assets related to separate accounts | ||
Variable annuity | 13,956,071 | 13,244,252 |
Variable universal life | 1,035,202 | 895,925 |
Total assets | 79,629,767 | 75,003,379 |
Liabilities | ||
Future policy benefits and claims | 30,957,592 | 30,511,085 |
Unearned premiums | 875,405 | 848,495 |
Total policy liabilities and accruals | 31,832,997 | 31,359,580 |
Stable value product account balances | 4,698,371 | 3,501,636 |
Annuity account balances | 10,921,190 | 10,642,115 |
Other policyholders' funds | 1,267,198 | 1,165,749 |
Other liabilities | 2,353,565 | 1,924,155 |
Deferred income taxes | 1,232,407 | 1,599,764 |
Non-recourse funding obligations | 2,747,477 | 2,796,474 |
Secured financing liabilities | 1,017,749 | 797,721 |
Debt | 945,052 | 1,163,285 |
Subordinated debt securities | 495,289 | 441,202 |
Liabilities related to separate accounts | ||
Variable annuity | 13,956,071 | 13,244,252 |
Variable universal life | 1,035,202 | 895,925 |
Total liabilities | 72,502,568 | 69,531,858 |
Commitments and contingencies—Note 15 | ||
Shareowner's equity | ||
Common Stock, Successor 2017 and 2016 - $.01 par value; shares authorized: 5,000; shares issued: 1,000 | 0 | 0 |
Additional paid-in-capital | 5,554,059 | 5,554,059 |
Retained earnings | 1,560,444 | 571,985 |
Accumulated other comprehensive income (loss): | ||
Net unrealized gains (losses) on investments, net of income tax: (Successor 2017 - $6,883; 2016 - $(349,541)) | 25,896 | (649,147) |
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2017 - $(6); 2016 - $(3,864)) | (22) | (7,175) |
Accumulated loss - derivatives, net of income tax: (Successor 2017 - $198; 2016 - $391) | 747 | 727 |
Postretirement benefits liability adjustment, net of income tax: (Successor 2017 - $(3,469); 2016 - $578) | (13,925) | 1,072 |
Total shareowner's equity | 7,127,199 | 5,471,521 |
Total liabilities and shareowner's equity | $ 79,629,767 | $ 75,003,379 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 41,153,551 | $ 39,832,724 |
Fixed maturities at amortized cost, fair value | 2,776,327 | 2,733,340 |
Equity securities, cost | 740,813 | 768,423 |
Mortgage loans, related to securitizations | 226,409 | 277,964 |
Investment real estate, accumulated depreciation | 132 | 252 |
Other intangibles, accumulated depreciation | 140,368 | 79,226 |
Property and equipment, accumulated depreciation | $ 22,926 | $ 17,450 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 5,000 | 5,000 |
Common Stock, shares issued (in shares) | 1,000 | 1,000 |
Net unrealized gains (losses) on investments, income tax | $ 6,883 | $ (349,541) |
Net unrealized (losses) gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (6) | (3,864) |
Accumulated loss - derivatives, income tax | 198 | 391 |
Postretirement benefits liability adjustment, income tax | $ (3,469) | $ 578 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREOWNER'S EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In- Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total shareowners' equity |
Balance (Predecessor) at Dec. 31, 2014 | $ 44,388 | $ 606,125 | $ (185,705) | $ 3,082,000 | $ 1,418,076 | $ 4,964,884 | |
Increase (decrease) in shareowners' equity | |||||||
Net income | Predecessor | $ 1,509 | 1,509 | 1,509 | ||||
Other comprehensive income (loss) | Predecessor | 465,968 | 465,968 | 465,968 | ||||
Total comprehensive income (loss) | Predecessor | 467,477 | 467,477 | |||||
Stock-based compensation | Predecessor | 1,550 | 1,550 | 1,550 | ||||
Balance (Predecessor) at Jan. 31, 2015 | 44,388 | 607,675 | (185,705) | 3,083,509 | 1,884,044 | $ 5,433,911 | |
Balance at Jan. 31, 2015 | 5,554,059 | 0 | 5,554,059 | 0 | 0 | 0 | |
Increase (decrease) in shareowners' equity | |||||||
Net income | 268,299 | 268,299 | |||||
Other comprehensive income (loss) | (1,241,134) | (1,241,134) | |||||
Total comprehensive income (loss) | (972,835) | ||||||
Stock-based compensation | 0 | ||||||
Balance at Dec. 31, 2015 | 4,581,224 | 0 | 5,554,059 | 0 | 268,299 | (1,241,134) | |
Increase (decrease) in shareowners' equity | |||||||
Net income | 393,029 | 393,029 | |||||
Other comprehensive income (loss) | 586,611 | 586,611 | |||||
Total comprehensive income (loss) | 979,640 | ||||||
Stock-based compensation | 0 | ||||||
Dividends to parent | (89,343) | (89,343) | |||||
Balance at Dec. 31, 2016 | 5,471,521 | 0 | 5,554,059 | 0 | 571,985 | (654,523) | |
Increase (decrease) in shareowners' equity | |||||||
Net income | 1,106,532 | 1,106,532 | |||||
Other comprehensive income (loss) | 692,994 | 692,994 | |||||
Total comprehensive income (loss) | 1,799,526 | ||||||
Cumulative effect adjustments | 0 | 25,775 | (25,775) | ||||
Stock-based compensation | 0 | ||||||
Dividends to parent | (143,848) | (143,848) | |||||
Balance at Dec. 31, 2017 | $ 7,127,199 | $ 0 | $ 5,554,059 | $ 0 | $ 1,560,444 | $ 12,696 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | ||||
Net income | $ 268,299 | $ 1,106,532 | $ 393,029 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Realized investment (gains) losses | 163,882 | 196,142 | (32,623) | |
Amortization of deferred policy acquisition costs and value of business acquired | 94,056 | 78,221 | 149,064 | |
Capitalization of deferred policy acquisition costs | (296,795) | (333,252) | (327,938) | |
Depreciation and amortization expense | 49,741 | 62,609 | 37,504 | |
Deferred income tax | 130,072 | (697,727) | 247,687 | |
Accrued income tax | 65,415 | 40,280 | (162,619) | |
Interest credited to universal life and investment products | 682,836 | 692,993 | 699,227 | |
Policy fees assessed on universal life and investment products | (1,056,092) | (1,354,685) | (1,262,166) | |
Change in reinsurance receivables | 187,269 | 248,148 | 222,302 | |
Change in accrued investment income and other receivables | 24,202 | (6,643) | (36,360) | |
Change in policy liabilities and other policyholders' funds of traditional life and health products | (164,232) | (294,205) | (208,075) | |
Trading securities: | ||||
Maturities and principal reductions of investments | 114,501 | 165,575 | 154,633 | |
Sale of investments | 135,465 | 281,441 | 459,802 | |
Cost of investments acquired | (220,094) | (355,410) | (532,429) | |
Other net change in trading securities | 73,376 | 9,151 | 22,427 | |
Amortization of premiums and accretion of discounts on investments and mortgage loans | 373,636 | 319,582 | 375,044 | |
Change in other liabilities | (206,765) | 138,304 | 132,220 | |
Other, net | (63,144) | (101,784) | (81,091) | |
Net cash provided by operating activities | 355,628 | 195,272 | 249,638 | |
Cash flows from investing activities | ||||
Maturities and principal reductions of investments, available-for-sale | 1,052,198 | 696,574 | 1,299,753 | |
Sale of investments, available-for-sale | 1,336,350 | 1,802,215 | 1,956,302 | |
Cost of investments acquired, available-for-sale | (3,546,474) | (4,029,233) | (4,982,907) | |
Change in investments, held-to-maturity | 65,000 | (47,000) | 2,181,000 | |
Mortgage loans: | ||||
New lendings | (1,466,020) | (1,671,929) | (1,396,283) | |
Repayments | 1,306,034 | 923,347 | 863,873 | |
Change in investment real estate, net | (3,662) | (104) | 2,851 | |
Change in policy loans, net | 52,364 | 34,625 | 49,268 | |
Change in other long-term investments, net | (73,907) | (91,518) | (250,557) | |
Change in short-term investments, net | (11,221) | (279,191) | (72,810) | |
Net unsettled security transactions | (64,615) | (19,023) | 28,853 | |
Purchase of property and equipment | (8,862) | (37,533) | (5,295) | |
Cash received from or paid for acquisitions, net of cash acquired | 0 | 0 | 320,967 | |
Net cash (used in) provided by investing activities | (1,492,815) | (2,624,770) | (4,366,985) | |
Cash flows from financing activities | ||||
Borrowings under line of credit arrangements and debt | 330,000 | 1,035,000 | 265,000 | |
Principal payments on line of credit arrangement and debt | (338,093) | (1,156,498) | (633,074) | |
Issuance (repayment) of non-recourse funding obligations | 65,000 | (47,000) | 2,094,700 | |
Proceeds from (Repayments of) Secured Debt | 388,185 | 220,028 | 359,536 | |
Dividends to shareowners | 0 | (143,848) | (89,343) | |
Investment product and universal life deposits | 3,064,373 | 4,683,121 | 4,393,596 | |
Investment product and universal life withdrawals | (2,438,916) | (2,256,981) | (2,320,958) | |
Other financing activities, net | 0 | (196) | 0 | |
Net cash provided by (used in) financing activities | 1,070,549 | 2,333,626 | 4,069,457 | |
Change in cash | (66,638) | (95,872) | (47,890) | |
Cash at beginning of period | 462,710 | 348,182 | 396,072 | |
Cash at end of period | $ 462,710 | 396,072 | $ 252,310 | $ 348,182 |
Predecessor | ||||
Cash flows from operating activities | ||||
Net income | 1,509 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Realized investment (gains) losses | 42,602 | |||
Amortization of deferred policy acquisition costs and value of business acquired | 4,072 | |||
Capitalization of deferred policy acquisition costs | (22,489) | |||
Depreciation and amortization expense | 820 | |||
Deferred income tax | 30,791 | |||
Accrued income tax | (32,803) | |||
Interest credited to universal life and investment products | 79,088 | |||
Policy fees assessed on universal life and investment products | (90,288) | |||
Change in reinsurance receivables | (85,081) | |||
Change in accrued investment income and other receivables | (5,789) | |||
Change in policy liabilities and other policyholders' funds of traditional life and health products | 176,980 | |||
Trading securities: | ||||
Maturities and principal reductions of investments | 17,946 | |||
Sale of investments | 26,422 | |||
Cost of investments acquired | (27,289) | |||
Other net change in trading securities | (26,901) | |||
Amortization of premiums and accretion of discounts on investments and mortgage loans | 12,930 | |||
Change in other liabilities | 238,592 | |||
Other, net | (149,889) | |||
Net cash provided by operating activities | 191,223 | |||
Cash flows from investing activities | ||||
Maturities and principal reductions of investments, available-for-sale | 59,028 | |||
Sale of investments, available-for-sale | 191,062 | |||
Cost of investments acquired, available-for-sale | (149,887) | |||
Change in investments, held-to-maturity | 0 | |||
Mortgage loans: | ||||
New lendings | (100,530) | |||
Repayments | 45,741 | |||
Change in investment real estate, net | 7 | |||
Change in policy loans, net | 6,365 | |||
Change in other long-term investments, net | (25,339) | |||
Change in short-term investments, net | (40,314) | |||
Net unsettled security transactions | 37,510 | |||
Purchase of property and equipment | (649) | |||
Cash received from or paid for acquisitions, net of cash acquired | 0 | |||
Net cash (used in) provided by investing activities | 22,994 | |||
Cash flows from financing activities | ||||
Borrowings under line of credit arrangements and debt | 0 | |||
Principal payments on line of credit arrangement and debt | (60,000) | |||
Issuance (repayment) of non-recourse funding obligations | 0 | |||
Proceeds from (Repayments of) Secured Debt | 0 | |||
Dividends to shareowners | 0 | |||
Investment product and universal life deposits | 169,233 | |||
Investment product and universal life withdrawals | (240,147) | |||
Other financing activities, net | (4) | |||
Net cash provided by (used in) financing activities | (130,918) | |||
Change in cash | 83,299 | |||
Cash at beginning of period | 379,411 | $ 462,710 | ||
Cash at end of period | $ 462,710 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company. Prior to February 1, 2015, and for the periods reported as "predecessor", the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities (see also Note 21, Statutory Reporting Practices and Other Regulatory Matters ). The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors. Entities Included The consolidated financial statements include the accounts of Protective Life Corporation and subsidiaries and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at 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 periods, goodwill recoverability, value of business acquired ("VOBA"), investment and certain derivatives fair values, other-than-temporary impairments, future policy benefits, pension and other postretirement benefits, provisions for income taxes, reserves for contingent liabilities, reinsurance risk transfer assessments, and reserves for losses in connection with unresolved legal matters. Earnings Per Share - Predecessor Company As of February 1, 2015, the Company became a wholly owned subsidiary of Dai-ichi Life, and on that date the Company's outstanding common stock was delisted from public exchanges, and there was no market for the Company's common stock, which is held entirely by Dai-ichi Life. Therefore, the Company will no longer disclose earnings per share information subsequent to the presentation for the predecessor company period. Significant Accounting Policies Valuation of Investment Securities The Company determines the appropriate classification of investment securities at the time of purchase and periodically re-evaluates such designations. Investment securities are classified as either trading, available-for-sale, or held-to-maturity securities. Investment securities classified as trading are recorded at fair value with changes in fair value recorded in realized gains (losses). Investment securities purchased for long term investment purposes are classified as available-for-sale and are recorded at fair value with changes in unrealized gains and losses, net of taxes, reported as a component of other comprehensive income (loss). Investment securities are classified as held-to-maturity when the Company has the intent and ability to hold the securities to maturity and are reported at amortized cost. Interest income on available-for-sale and held-to-maturity securities includes the amortization of premiums and accretion of discounts and are recorded in investment income. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a "waterfall" approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non-binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which the Company purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party service or an independent broker quotation. Included in the pricing of other asset-backed securities, collateralized mortgage obligations ("CMOs"), and mortgage-backed securities ("MBS") are estimates of the rate of future prepayments of principal and underlying collateral support over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and rates of prepayments previously experienced at the interest rate levels projected for the underlying collateral. The basis for the cost of securities sold was determined at the Committee on Uniform Securities Identification Procedures ("CUSIP") level on a first in first out basis. The committee supplies a unique nine-character identification, called a CUSIP number, for each class of security approved for trading in the U.S., to facilitate clearing and settlement. These numbers are used when any buy and sell orders are recorded. Each quarter the Company reviews investments with unrealized losses and tests for other-than-temporary impairments. The Company analyzes various factors to determine if any specific other-than-temporary asset impairments exist. These include, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline, 4) an assessment of the Company's intent to sell the security (including a more likely than not assessment of whether the Company will be required to sell the security) before recovering the security's amortized cost, 5) the duration of the decline, 6) an economic analysis of the issuer's industry, and 7) the financial strength, liquidity, and recoverability of the issuer. Management performs a security by security review each quarter in evaluating the need for any other-than-temporary impairments. Although no set formula is used in this process, the investment performance, collateral position, and continued viability of the issuer are significant measures considered, and in some cases, an analysis regarding the Company's expectations for recovery of the security's entire amortized cost basis through the receipt of future cash flows is performed. Once a determination has been made that a specific other-than-temporary impairment exists, the security's basis is adjusted and an other-than-temporary impairment is recognized. Equity securities that are other-than-temporarily impaired are written down to fair value with a realized loss recognized in earnings. Other-than-temporary impairments to debt securities that the Company does not intend to sell and does not expect to be required to sell before recovering the security's amortized cost are written down to discounted expected future cash flows ("post impairment cost") and credit losses are recorded in earnings. The difference between the securities' discounted expected future cash flows and the fair value of the securities on the impairment date is recognized in other comprehensive income (loss) as a non-credit portion impairment. When calculating the post impairment cost for residential mortgage-backed securities ("RMBS"), commercial mortgage-backed securities ("CMBS"), and other asset-backed securities (collectively referred to as asset-backed securities or "ABS"), the Company considers all known market data related to cash flows to estimate future cash flows. When calculating the post impairment cost for corporate debt securities, the Company considers all contractual cash flows to estimate expected future cash flows. To calculate the post impairment cost, the expected future cash flows are discounted at the original purchase yield. Debt securities that the Company intends to sell or expects to be required to sell before recovery are written down to fair value with the change recognized in earnings. Cash Cash includes all demand deposits reduced by the amount of outstanding checks and drafts. As a result of the Company's cash management system, checks issued from a particular bank but not yet presented for payment may create negative book cash balances with the bank at certain reporting dates. Such negative balances are included in other liabilities and were $132.7 million as of December 31, 2017 (Successor Company) and $79.2 million as of December 31, 2016 (Successor Company), respectively. The Company has deposits with certain financial institutions which exceed federally insured limits. The Company has reviewed the creditworthiness of these financial institutions and believes there is minimal risk of a material loss. Deferred Policy Acquisition Costs The incremental direct costs associated with successfully acquired insurance policies, are deferred to the extent such costs are deemed recoverable from future profits. Such costs include commissions and other costs of acquiring traditional life and health insurance, credit insurance, universal life insurance, and investment products. DAC are subject to recoverability testing at the end of each accounting period. Traditional life and health insurance acquisition costs are amortized over the premium-payment period of the related policies in proportion to the ratio of annual premium income to the present value of the total anticipated premium income. Credit insurance acquisition costs are being amortized in proportion to earned premium. Acquisition costs for universal life and investment products are amortized over the lives of the policies in relation to the present value of estimated gross profits before amortization. The Company makes certain assumptions regarding the mortality, persistency, expenses, and interest rates (equal to the rate used to compute liabilities for future policy benefits, currently 1.0% to 7.8% ) the Company expects to experience in future periods when determining the present value of estimated gross profits. These assumptions are best estimates and are periodically updated whenever actual experience and/or expectations for the future change from that assumed. Additionally, these costs have been adjusted by an amount equal to the amortization that would have been recorded if unrealized gains or losses on investments associated with our universal life and investment products had been realized. Acquisition costs for stable value contracts are amortized over the term of the contracts using the effective yield method. Value of Businesses Acquired In conjunction with the Merger and the acquisition of insurance policies or investment contracts, a portion of the purchase price is allocated to the right to receive future gross profits from cash flows and earnings of associated insurance policies and investment contracts. This intangible asset, called VOBA, is based on the actuarially estimated present value of future cash flows from associated insurance policies and investment contracts acquired. The estimated present value of future cash flows used in the calculation of the VOBA is based on certain assumptions, including mortality, persistency, expenses, and interest rates that the Company expects to experience in future years. The Company amortizes VOBA in proportion to gross premiums for traditional life products, or estimated gross margins ("EGMs") for participating traditional life products within the MONY Life Insurance Company ("MONY") block. For interest sensitive products, the Company uses various amortization bases including expected gross profits ("EGPs"), revenues, or insurance in-force. VOBA is subject to annual recoverability testing. Intangible Assets Intangible assets with definite lives are amortized over the estimated useful life of the asset and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Amortizable intangible assets primarily consist of distribution relationships, trade names, technology, and software. Intangible assets with indefinite lives, primarily insurance licenses, are not amortized, but are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Software is generally amortized over a three year useful life. Intangible assets recognized by the Company included the following (excluding goodwill): Successor Company As of December 31, Estimated 2017 2016 Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 402,975 $ 428,499 14-22 Trade names 85,340 92,049 13-17 Technology 107,343 121,253 7-14 Other 35,914 14,282 Total intangible assets subject to amortization 631,572 656,083 Insurance licenses 32,000 32,000 Indefinite Total intangible assets $ 663,572 $ 688,083 Identified intangible assets were valued using the excess earnings method, relief from royalty method or cost approach, as appropriate. Amortizable intangible assets will be amortized straight line over their assigned useful lives. The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Thousands) 2018 $ 56,011 2019 52,898 2020 49,897 2021 48,105 2022 45,771 Property and Equipment In conjunction with the Merger, property and equipment was recorded at fair value as of the Merger date and will be depreciated from this basis in future periods based on the respective estimated useful lives. Real estate assets were recorded at appraised values as of the acquisition date. The Company has estimated the remaining useful life of the home office building to be 25 years. Land is not depreciated. The Company depreciates its assets using the straight-line method over the estimated useful lives of the assets. The Company's furniture is depreciated over a ten year useful life, office equipment and machines are depreciated over a five year useful life, and computers are depreciated over a three year useful life. Major repairs or improvements are capitalized and depreciated over the estimated useful lives of the assets. Other repairs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or retired are removed from the accounts, and resulting gains or losses are included in income. Property and equipment consisted of the following: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Home office building $ 68,123 $ 67,279 Data processing equipment 24,102 21,750 Other, principally furniture and equipment 17,198 9,612 Total property and equipment subject to depreciation 109,423 98,641 Accumulated depreciation (22,926 ) (17,450 ) Land 24,920 24,920 Total property and equipment $ 111,417 $ 106,111 Separate Accounts The separate account assets represent funds for which the Company does not bear the investment risk. These assets are carried at fair value and are equal to the separate account liabilities, which represent the policyholder's equity in those assets. The investment income and investment gains and losses on the separate account assets accrue directly to the policyholder. These amounts are reported separately as assets and liabilities related to separate accounts in the accompanying consolidated financial statements. Amounts assessed against policy account balances for the costs of insurance, policy administration, and other services are included in premiums and policy fees in the accompanying consolidated statements of income. Stable Value Product Account Balances The Stable Value Products segment sells fixed and floating rate funding agreements directly to qualified institutional investors. The segment also issues funding agreements to the Federal Home Loan Bank ("FHLB"), and markets guaranteed investment contracts ("GICs") to 401(k) and other qualified retirement savings plans. GICs are contracts which specify a return on deposits for a specified period and often provide flexibility for withdrawals at book value in keeping with the benefits provided by the plan. The Company records its stable value contract liabilities in the consolidated balance sheets in “stable value product account balances” at the deposit amount plus accrued interest, adjusted for any unamortized premium or discount. Interest on the contracts is accrued based upon contract terms. Any premium or discount is amortized using the effective yield method. The segment's products complement the Company's overall asset/liability management in that the terms may be tailored to the needs of PLICO as the seller of the contracts. Stable value product account balances include GICs and funding agreements the Company has issued. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company had $3,337.9 million and $1,872.5 million , respectively, of stable value product account balances marketed through structured programs. Most GICs and funding agreements the Company has written have maturities of one to twelve years . As of December 31, 2017 (Successor Company), future maturities of stable value products were as follows: Year of Maturity Amount (Dollars In Millions) 2018 $ 888.0 2019 - 2020 2,479.5 2021 - 2022 1,201.0 Thereafter 124.8 Derivative Financial Instruments The Company records its derivative financial instruments in the consolidated balance sheet in "other long-term investments" and "other liabilities" in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in the statement of other comprehensive income (loss), depending upon whether the derivative instrument qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists. For cash flow hedges, the effective portion of their gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Effectiveness of the Company's hedge relationships is assessed on a quarterly basis. The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship in earnings. Changes in the fair value of derivatives that are recognized in current earnings are reported in "Realized investment gains (losses)—Derivative financial instruments". For additional information, see Note 7, Derivative Financial Instruments . Insurance Liabilities and Reserves Establishing an adequate liability for the Company's obligations to policyholders requires the use of certain assumptions. Estimating liabilities for future policy benefits on life and health insurance products requires the use of assumptions relative to future investment yields, mortality, morbidity, persistency, and other assumptions based on the Company's historical experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Determining liabilities for the Company's property and casualty insurance products also requires the use of assumptions, including the projected levels of used vehicle prices, the frequency and severity of claims, and the effectiveness of internal processes designed to reduce the level of claims. The Company's results depend significantly upon the extent to which its actual claims experience is consistent with the assumptions the Company used in determining its reserves and pricing its products. The Company's reserve assumptions and estimates require significant judgment and, therefore, are inherently uncertain. The Company cannot determine with precision the ultimate amounts that it will pay for actual claims or the timing of those payments. Guaranteed Living Withdrawal Benefits The Company also establishes reserves for guaranteed living withdrawal benefits (“GLWB”) on its variable annuity (“VA”) products. The GLWB is valued in accordance with FASB guidance under the ASC Derivatives and Hedging Topic which utilizes the valuation technique prescribed by the ASC Fair Value Measurements and Disclosures Topic, which requires the embedded derivative to be recorded at fair value using current implied volatilities for the equity indices. The fair value of the GLWB is impacted by equity market conditions and can result in the GLWB embedded derivative being in an overall net asset or net liability position. In times of favorable equity market conditions the likelihood and severity of claims is reduced and expected fee income increases. Since claims are generally expected later than fees, these favorable equity market conditions can result in the present value of fees being greater than the present value of claims, which results in a net GLWB embedded derivative asset. In times of unfavorable equity market conditions the likelihood and severity of claims is increased and expected fee income decreases and can result in the present value of claims exceeding the present value of fees resulting in a net GLWB embedded derivative liability. The methods used to estimate the embedded derivatives employ assumptions about mortality, lapses, policyholder behavior, equity market returns, interest rates, and market volatility. The Company assumes age-based mortality from the Ruark 2015 ALB adjusted table for company experience. Differences between the actual experience and the assumptions used result in variances in profit and could result in losses. As of December 31, 2017 (Successor Company), our net GLWB liability held was $111.8 million . Goodwill The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. Accounting for goodwill requires an estimate of the future profitability of the associated lines of business within the Company's operating segments to assess the recoverability of the capitalized acquisition goodwill. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If the qualitative analysis does not indicate that an impairment of segment goodwill is more likely than not then no other specific quantitative impairment testing is required. If it is determined that it is more likely than not that impairment exists, the Company performs a quantitative assessment and compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions. Income Taxes The Company and its subsidiaries file a consolidated federal income tax return that includes both life insurance companies and non-life insurance companies. The Company has one life insurance subsidiary that is not eligible to be included in the consolidated federal income tax return and files a separate corporate tax return. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Tax Reform Act"). Further information on the tax impacts of the Tax Reform Act is included in Note 18, Income Taxes . The Company uses the asset and liability method of accounting for income taxes. Generally, most items in pretax book income are also included in taxable income in the same year. However, some items are recognized for book purposes and for tax purposes in different years or are never recognized for either book or tax purposes. Those differences that will never be recognized for either book or tax purposes are permanent differences (e.g., the dividends-received deduction). As a result, the effective tax rate reflected in the financial statements may differ from the statutory rate reflected in the tax return. Those differences that are reported in different years for book and tax purposes are temporary and will reverse over time (e.g., the valuation of future policy benefits). These temporary differences are accounted for in the intervening periods as deferred tax assets and liabilities. Deferred tax assets generally represent revenue that is taxable before it is recognized in financial income and expenses that are deductible after they are recognized in financial income. Deferred tax liabilities generally represent revenues that are taxable after they are recognized in financial income or expenses or losses that are deductible before they are recognized in financial income. Components of accumulated other comprehensive income (loss) ("AOCI") are presented net of tax, and it is the Company's policy to use the aggregate portfolio approach to clear the disproportionate tax effects that remain in AOCI as a result of tax rate changes and certain other events. Under the aggregate portfolio approach, disproportionate tax effects are cleared only when the portfolio of investments that gave rise to the deferred tax item is sold or otherwise disposed of in its entirety. The application of GAAP requires the Company to evaluate the recoverability of the Company’s deferred tax assets and establish a valuation allowance, if necessary, to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company may consider many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. GAAP prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on tax returns. The application of this guidance is a two-step process, the first step being recognition. The Company determines whether it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. The Company measures the tax position as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority that has full knowledge of all relevant information. This measurement considers the amounts and probabilities of the outcomes that could be realized upon ultimate settlement using the facts, circumstances, and information available at the reporting date. The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations expires. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards, the statute of limitations does not close until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. See Note 18, Income Taxes, for additional information regarding income taxes. Variable Interest Entities The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the FASB ASC (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a Variable Interest Entity ("VIE"). If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. For more information on the Company's investment in a VIE refer to Note 5, Investment Operations, to the consolidated financial statements. Policyholder Liabilities, Revenues, and Benefits Expense Future Policy Benefits and Claims Future policy benefit liabilities for the year indicated are as follows: Successor Company As of December 31, As of December 31, 2017 2016 2017 2016 Total Policy Liabilities and Accruals Reinsurance Receivable (Dollars In Thousands) (Dollars In Thousands) Life and annuity benefit reserves $ 29,972,938 $ 29,574,479 $ 3,898,079 $ 4,191,845 Unpaid life claim liabilities 595,188 517,257 362,827 323,630 Life and annuity future policy benefits 30,568,126 30,091,736 4,260,906 4,515,475 Other policy benefits reserves 157,101 170,519 92,330 103,746 Other policy benefits unpaid claim liabilities 232,365 248,830 185,826 200,655 Future policy benefits and claims and associated reinsurance receivable $ 30,957,592 $ 30,511,085 $ 4,539,062 $ 4,819,876 Unearned premiums 875,405 848,495 536,636 503 |
SIGNIFICANT TRANSACTIONS
SIGNIFICANT TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
SIGNIFICANT TRANSACTIONS | SIGNIFICANT TRANSACTIONS Reinsurance and Financing Transaction On January 15, 2016, PLICO completed the transaction contemplated by the Master Agreement, dated September 30, 2015 (the “Master Agreement”), with Genworth Life and Annuity Insurance Company (“GLAIC”). Pursuant to the Master Agreement, effective January 1, 2016, PLICO entered into a reinsurance agreement (the “Reinsurance Agreement”) under the terms of which PLICO coinsures certain term life insurance business of GLAIC (the “GLAIC Block”). In connection with the reinsurance transaction, on January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a wholly owned subsidiary of PLICO, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of the Company, entered into an 18 -year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by PLICO and West Coast Life Insurance Company ("WCL"), a direct wholly owned subsidiary of PLICO. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion . Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City notes for the 18 -year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLICO, WCL and the Company, meaning that none of these companies are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. In connection with the transaction, the Company has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. As a result of the financing transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by the Company were contributed to PLICO and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. Also on January 15, 2016, Golden Gate paid an extraordinary dividend of $300 million to PLICO as approved by the Vermont Department of Financial Regulation. The transactions described above resulted in an increase to total assets and total liabilities of approximately $2.8 billion . Of the approximate $2.8 billion increase in total assets, $0.6 billion was the result of the reinsurance transaction with GLAIC which included a $280 million increase in VOBA. The remaining $2.2 billion increase to total assets and liabilities is associated with the financing transaction between Golden Gate and Steel City. The Company considered whether the Reinsurance Agreement constituted the purchase of a business for accounting and reporting purposes pursuant to ASC 805, Business Combinations . While the transaction included a continuation of the certain revenue-producing activities associated with the reinsured policies, it did not result in the acquisition of a market distribution system, sales force or production techniques. Based on Management’s decision not to pursue distribution opportunities or future sales related to the reinsured policies, the Company accounted for the transaction as a reinsurance agreement under ASC 944, Insurance Contracts and asset acquisition under ASC 805. Accordingly, the Company recorded the assets and liabilities acquired under the reinsurance agreement at fair value and recognized an intangible asset, VOBA, equal to the excess of the fair value of assets acquired over liabilities assumed, measured in accordance with the Company's accounting policies for insurance and reinsurance contracts that it issues or holds pursuant to ASC 944. USWC Holding Company Acquisition On December 1, 2016, PLICO completed the acquisition of the Pompano Beach, Florida-based USWC Holding Company (“US Warranty”) pursuant to a Stock Purchase Agreement. US Warranty's primary operating subsidiary is United States Warranty Corp., which currently markets vehicle service contracts, GAP coverage, and a suite of ancillary automotive maintenance and protection products nationwide. This acquisition has provided the Company's Asset Protection segment and USWC with expanded market reach, enhanced product and operational capabilities, and higher collective growth potential. The transaction was accounted for under the acquisition method of accounting under ASC Topic 805. In accordance with ASC Topic 805-20-30, all identifiable assets acquired and liabilities assumed were measured at fair value as of the acquisition date. On the acquisition date, goodwill of $61.0 million represented the cost in excess of the fair value of net assets acquired (including identifiable intangibles), and reflected the US Warranty's assembled workforce, future growth potential and other sources of value not associated with identifiable assets. The Company acquired 100% of voting equity interests. The aggregate purchase price for US Warranty was $136.1 million . The amount recorded as the value of business acquired at December 1, 2016, represents the actuarially estimated present value of after-tax future cash flows, adjusted for statutory reserve differences and cost of capital, from the policies acquired through the US Warranty acquisition. This amount will be amortized in proportion with the gross premiums or estimated net profits of the acquired insurance contracts. The following table summarizes the fair values of the net assets acquired as of the acquisition date: Fair Value As of December 1, 2016 (Dollars in Thousands) Assets Fixed maturities $ 10,592 Other long-term investments 2,340 Cash 122,167 Accrued investment income 52 Accounts and premiums receivables 18,536 Reinsurance receivable 9,397 Value of businesses acquired 5,079 Goodwill 61,027 Other intangibles 70,400 Property and equipment 390 Accrued income taxes 4,161 Other assets 40 Total assets 304,181 Liabilities Unearned premiums $ 82,757 Other policyholders' funds 21,483 Other liabilities 24,951 Deferred income taxes 38,929 Total liabilities 168,120 Net assets acquired $ 136,061 Intangible assets recognized by the Company included the following (excluding goodwill): Estimated Fair Value on Estimated Acquisition Date Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 65,000 13-21 Trade names 1,400 5-6 Technology 4,000 8-11 Total intangible assets $ 70,400 Identified intangible assets were valued using the excess earnings method, relief from royalty method or cost approach, as appropriate. Amortizable intangible assets will be amortized straight line over their assigned useful lives. The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Thousands) 2017 $ 4,843 2018 4,843 2019 4,843 2020 4,843 2021 4,843 The following (unaudited) pro forma condensed consolidated results of operations assumes that the acquisition of US Warranty was completed as of January 1, 2015: Successor Company For The Year Ended December 31, 2016 February 1, 2015 to December 31, 2015 (Dollars In Thousands) Revenue (1) $ 4,532,292 $ 3,753,700 Net income (2) 393,277 268,479 (1) Includes $4.7 million of revenue recognized in the Company's net income for year ended December 31, 2016 (Successor Company). (2) Includes $0.2 million of net income recognized in the Company's net income for the year ended December 31, 2016 (Successor Company). The pro forma information above is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, not is it intended to be a projection of future results. |
MONY CLOSED BLOCK OF BUSINESS
MONY CLOSED BLOCK OF BUSINESS | 12 Months Ended |
Dec. 31, 2017 | |
Closed Block Disclosure [Abstract] | |
MONY CLOSED BLOCK OF BUSINESS | MONY CLOSED BLOCK OF BUSINESS In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013. Assets allocated to the Closed Block inure solely to the benefit of each Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account. The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in AOCI) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life, this actuarial calculation of the expected timing of MONY's Closed Block earnings was recalculated and reset as February 1, 2015, along with the establishment of a policyholder dividend obligation as of such date. If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero ). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block. Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block. Summarized financial information for the Closed Block as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company) and is as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders' account balances and other policyholder liabilities $ 5,791,867 $ 5,896,355 Policyholder dividend obligation 160,712 31,932 Other liabilities 30,764 40,007 Total closed block liabilities 5,983,343 5,968,294 Closed block assets Fixed maturities, available-for-sale, at fair value 4,669,856 4,440,105 Mortgage loans on real estate 108,934 201,088 Policy loans 700,769 712,959 Cash and other invested assets 31,182 108,270 Other assets 122,637 135,794 Total closed block assets 5,633,378 5,598,216 Excess of reported closed block liabilities over closed block assets 349,965 370,078 Portion of above representing accumulated other comprehensive income: Net unrealized investments gains (losses) net of policyholder dividend obligation: $(13,429) and $(197,450); and net of income tax: $2,820 and $69,107 — — Future earnings to be recognized from closed block assets and closed block liabilities $ 349,965 $ 370,078 Reconciliation of the policyholder dividend obligation is as follows: Successor Company For The Year Ended For The Year Ended December 31, 2016 (Dollars In Thousands) Policyholder dividend obligation, beginning balance $ 31,932 $ — Applicable to net revenue (losses) (55,241 ) (46,557 ) Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation 184,021 78,489 Policyholder dividend obligation, ending balance $ 160,712 $ 31,932 Closed Block revenues and expenses were as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 to January 31, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Premiums and other income $ 180,097 $ 189,700 $ 185,562 $ 15,065 Net investment income 203,964 211,175 193,203 19,107 Net investment gains 910 1,524 3,333 568 Total revenues 384,971 402,399 382,098 34,740 Benefits and other deductions Benefits and settlement expenses 335,200 353,488 336,629 31,152 Other operating expenses 1,940 2,804 1,001 — Total benefits and other deductions 337,140 356,292 337,630 31,152 Net revenues before income taxes 47,831 46,107 44,468 3,588 Income tax expense 27,718 16,137 14,920 1,256 Net revenues $ 20,113 $ 29,970 $ 29,548 $ 2,332 |
INVESTMENT OPERATIONS
INVESTMENT OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
INVESTMENT OPERATIONS [Abstract] | |
INVESTMENT OPERATIONS | INVESTMENT OPERATIONS Major categories of net investment income are summarized as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 1,631,565 $ 1,552,999 $ 1,267,900 $ 140,104 Equity securities 39,806 38,838 40,907 2,572 Mortgage loans 298,387 270,749 252,577 24,977 Investment real estate 2,481 2,153 2,528 112 Short-term investments 108,476 106,828 93,982 9,713 2,080,715 1,971,567 1,657,894 177,478 Other investment expenses 29,127 29,111 24,946 2,298 Net investment income $ 2,051,588 $ 1,942,456 $ 1,632,948 $ 175,180 Net realized investment gains (losses) for all other investments are summarized as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 12,941 $ 32,210 $ 1,282 $ 6,891 Equity securities (2,330 ) 92 (1,001 ) — Impairments on securities (11,742 ) (17,748 ) (26,993 ) (481 ) Modco trading portfolio 119,206 67,583 (167,359 ) 73,062 Other investments (8,389 ) (9,226 ) 192 1,200 Total realized gains (losses)—investments $ 109,686 $ 72,911 $ (193,879 ) $ 80,672 Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Gross realized gains $ 18,868 $ 42,085 $ 8,745 $ 6,920 Gross realized losses: Impairments losses $ (11,742 ) $ (17,748 ) $ (26,993 ) $ (481 ) Other realized losses $ (8,257 ) $ (9,783 ) $ (8,463 ) $ 12 The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position. Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 879,181 $ 1,198,333 $ 950,874 $ 172,551 Gains realized $ 18,868 $ 42,085 $ 8,745 $ 6,920 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 185,157 $ 85,835 $ 178,415 $ 435 Losses realized $ (8,257 ) $ (9,783 ) $ (8,463 ) $ (29 ) (1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process. The amortized cost and fair value of the Company's investments classified as available-for-sale are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Successor Company As of December 31, 2017 Fixed maturities: Residential mortgage-backed securities $ 2,330,832 $ 19,413 $ (23,033 ) $ 2,327,212 $ 10 Commercial mortgage-backed securities 1,914,998 5,010 (30,186 ) 1,889,822 — Other asset-backed securities 1,234,376 20,936 (5,763 ) 1,249,549 — U.S. government-related securities 1,255,244 185 (32,177 ) 1,223,252 — Other government-related securities 282,767 9,463 (4,948 ) 287,282 — States, municipals, and political subdivisions 1,770,299 16,959 (45,613 ) 1,741,645 (37 ) Corporate securities 29,606,484 623,713 (528,187 ) 29,702,010 (1 ) Redeemable preferred stock 94,362 232 (3,503 ) 91,091 — 38,489,362 695,911 (673,410 ) 38,511,863 (28 ) Equity securities 735,569 22,318 (8,771 ) 749,116 — Short-term investments 558,949 — — 558,949 — $ 39,783,880 $ 718,229 $ (682,181 ) $ 39,819,928 $ (28 ) As of December 31, 2016 Fixed maturities: Residential mortgage-backed securities $ 1,913,413 $ 10,737 $ (25,667 ) $ 1,898,483 $ (9 ) Commercial mortgage-backed securities 1,850,620 2,528 (41,678 ) 1,811,470 — Other asset-backed securities 1,210,490 21,741 (20,698 ) 1,211,533 — U.S. government-related securities 1,308,192 422 (40,455 ) 1,268,159 — Other government-related securities 253,182 1,536 (14,797 ) 239,921 — States, municipals, and political subdivisions 1,760,837 1,224 (105,558 ) 1,656,503 — Corporate securities 28,801,768 153,715 (1,583,918 ) 27,371,565 (11,030 ) Redeemable preferred stock 94,362 — (8,519 ) 85,843 — 37,192,864 191,903 (1,841,290 ) 35,543,477 (11,039 ) Equity securities 761,340 7,751 (21,685 ) 747,406 — Short-term investments 279,782 — — 279,782 — $ 38,233,986 $ 199,654 $ (1,862,975 ) $ 36,570,665 $ (11,039 ) (1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above. The fair value of the Company's investments classified as trading are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Fixed maturities - trading: Residential mortgage-backed securities $ 259,694 $ 255,027 Commercial mortgage-backed securities 146,804 149,683 Other asset-backed securities 138,097 200,084 U.S. government-related securities 27,234 26,961 Other government-related securities 63,925 63,012 States, municipals, and political subdivisions 326,925 316,519 Corporate securities 1,698,183 1,624,589 Redeemable preferred stock 3,327 3,985 2,664,189 2,639,860 Equity securities 5,244 7,083 Short-term investments 56,261 52,648 $ 2,725,694 $ 2,699,591 The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of December 31, 2017 (Successor Company), by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment. Available-for-sale Held-to-maturity Amortized Cost Fair Value Amortized Cost Fair Value (Dollars In Thousands) (Dollars In Thousands) Due in one year or less $ 723,923 $ 723,435 $ — $ — Due after one year through five years 6,657,059 6,639,380 — — Due after five years through ten years 7,475,095 7,481,482 — — Due after ten years 23,633,285 23,667,566 2,718,904 2,776,327 $ 38,489,362 $ 38,511,863 $ 2,718,904 $ 2,776,327 The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities or equity securities. Fixed Maturities Equity Securities Total Securities (Dollars In Thousands) For The Year Ended December 31, 2017 (Successor Company) Other-than-temporary impairments $ (1,332 ) $ (2,630 ) $ (3,962 ) Non-credit impairment losses recorded in other comprehensive income (7,780 ) — (7,780 ) Net impairment losses recognized in earnings $ (9,112 ) $ (2,630 ) $ (11,742 ) For The Year Ended December 31, 2016 (Successor Company) Other-than-temporary impairments $ (32,075 ) $ — $ (32,075 ) Non-credit impairment losses recorded in other comprehensive income 14,327 — 14,327 Net impairment losses recognized in earnings $ (17,748 ) $ — $ (17,748 ) For The Period of February 1, 2015 to December 31, 2015 (Successor Company) Other-than-temporary impairments $ (28,659 ) $ — $ (28,659 ) Non-credit impairment losses recorded in other comprehensive income 1,666 — 1,666 Net impairment losses recognized in earnings $ (26,993 ) $ — $ (26,993 ) For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company) Other-than-temporary impairments $ (636 ) $ — $ (636 ) Non-credit impairment losses recorded in other comprehensive income 155 — 155 Net impairment losses recognized in earnings $ (481 ) $ — $ (481 ) There were no other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), for the period of February 1, 2015 to December 31, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company). The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ 12,685 $ 22,761 $ — $ 15,478 Additions for newly impaired securities 734 14,876 22,761 — Additions for previously impaired securities 3,175 2,063 — 221 Reductions for previously impaired securities due to a change in expected cash flows (12,726 ) (24,396 ) — — Reductions for previously impaired securities that were sold in the current period (600 ) (2,619 ) — — Other — — — — Ending balance $ 3,268 $ 12,685 $ 22,761 $ 15,699 The following table includes the gross unrealized losses and fair value of the Company's investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2017 (Successor Company): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 766,599 $ (9,671 ) $ 416,221 $ (13,362 ) $ 1,182,820 $ (23,033 ) Commercial mortgage-backed securities 757,471 (8,592 ) 796,456 (21,594 ) 1,553,927 (30,186 ) Other asset-backed securities 86,506 (322 ) 134,316 (5,441 ) 220,822 (5,763 ) U.S. government-related securities 94,110 (688 ) 1,072,232 (31,489 ) 1,166,342 (32,177 ) Other government-related securities 24,830 (169 ) 115,294 (4,778 ) 140,124 (4,947 ) States, municipalities, and political subdivisions 170,268 (1,738 ) 1,027,747 (43,874 ) 1,198,015 (45,612 ) Corporate securities 5,054,316 (55,795 ) 10,962,689 (472,394 ) 16,017,005 (528,189 ) Redeemable preferred stock 22,048 (1,120 ) 23,197 (2,383 ) 45,245 (3,503 ) Equities 86,586 (1,401 ) 91,195 (7,370 ) 177,781 (8,771 ) $ 7,062,734 $ (79,496 ) $ 14,639,347 $ (602,685 ) $ 21,702,081 $ (682,181 ) RMBS and CMBS had gross unrealized losses greater than twelve months of $13.4 million and $21.6 million as of December 31, 2017 (Successor Company), respectively. Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments. The other asset-backed securities have a gross unrealized loss greater than twelve months of $5.4 million as of December 31, 2017 (Successor Company). This category predominately includes student-loan backed auction rate securities, the underlying collateral, of which is at least 97% guaranteed by the Federal Family Education Loan Program ("FFELP"). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary. The U.S. government-related securities and the other government-related securities had gross unrealized losses greater than twelve months of $31.5 million and $4.8 million as of December 31, 2017 (Successor Company), respectively. These declines were related to changes in interest rates. The states, municipalities, and political subdivisions categories had gross unrealized losses greater than twelve months of $43.9 million as of December 31, 2017 (Successor Company). These declines were related to changes in interest rates. The corporate securities category has gross unrealized losses greater than twelve months of $472.4 million as of December 31, 2017 (Successor Company). The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information. As of December 31, 2017 (Successor Company), the Company had a total of 1,845 positions that were in an unrealized loss position, but the Company does not consider these unrealized loss positions to be other-than-temporary. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and the Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities. The following table includes the gross unrealized losses and fair value of the Company's investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2016 (Successor Company): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 1,060,569 $ (21,550 ) $ 170,826 $ (4,117 ) $ 1,231,395 $ (25,667 ) Commercial mortgage-backed securities 1,452,146 (37,665 ) 100,475 (4,013 ) 1,552,621 (41,678 ) Other asset-backed securities 323,706 (9,291 ) 176,792 (11,407 ) 500,498 (20,698 ) U.S. government-related securities 1,237,942 (40,454 ) 3 (1 ) 1,237,945 (40,455 ) Other government-related securities 98,412 (2,907 ) 79,393 (11,890 ) 177,805 (14,797 ) States, municipalities, and political subdivisions 1,062,368 (63,809 ) 548,254 (41,749 ) 1,610,622 (105,558 ) Corporate securities 12,553,514 (469,189 ) 9,793,579 (1,114,729 ) 22,347,093 (1,583,918 ) Redeemable preferred Stock 66,781 (6,642 ) 19,062 (1,877 ) 85,843 (8,519 ) Equities 411,845 (15,273 ) 69,497 (6,412 ) 481,342 (21,685 ) $ 18,267,283 $ (666,780 ) $ 10,957,881 $ (1,196,195 ) $ 29,225,164 $ (1,862,975 ) RMBS and CMBS had gross unrealized losses greater than twelve months of $4.1 million and $4.0 million , respectively, as of December 31, 2016 (Successor Company). Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments. The other asset-backed securities have a gross unrealized loss greater than twelve months of $11.4 million as of December 31, 2016 (Successor Company). This category predominately includes student-loan backed auction rate securities, the underlying collateral, of which is at least 97% guaranteed by the Federal Family Education Loan Program ("FFELP"). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary. The other government-related securities had gross unrealized losses greater than twelve months of $11.9 million as of December 31, 2016 (Successor Company). These declines were related to changes in interest rates. The states, municipalities, and political subdivisions categories had gross unrealized losses greater than twelve months of $41.7 million as of December 31, 2016 (Successor Company). These declines were related to changes in interest rates. The corporate securities category has gross unrealized losses greater than twelve months of $1.1 billion as of December 31, 2016 (Successor Company). The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information. As of December 31, 2017 (Successor Company), the Company had securities in its available-for-sale portfolio which were rated below investment grade with a fair value of $1.9 billion and had an amortized cost of $1.9 billion . In addition, included in the Company's trading portfolio, the Company held $229.0 million of securities which were rated below investment grade. Approximately $311.8 million of the below investment grade securities held by the Company were not publicly traded. The change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale is summarized as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 1,086,727 $ 802,368 $ (1,874,469 ) $ 670,229 Equity securities 17,863 (13,463 ) 4,406 10,226 The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of December 31, 2017 ( Successor Company ) and December 31, 2016 ( Successor Company ), are as follows: Successor Company Amortized Gross Unrecognized Holding Gains Gross Unrecognized Holding Losses Fair Value Total OTTI Recognized in OCI As of December 31, 2017 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 704,904 $ — $ (19,163 ) $ 685,741 $ — Steel City LLC 2,014,000 76,586 — 2,090,586 — $ 2,718,904 $ 76,586 $ (19,163 ) $ 2,776,327 $ — Successor Company Amortized Gross Gross Fair Value Total OTTI Recognized in OCI As of December 31, 2016 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 654,177 $ — $ (67,222 ) $ 586,955 $ — Steel City LLC 2,116,000 30,385 — 2,146,385 — $ 2,770,177 $ 30,385 $ (67,222 ) $ 2,733,340 $ — During the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not record any other-than-temporary impairments on held-to-maturity securities. The Company’s held-to-maturity securities had $76.6 million of gross unrecognized holding gains and $19.2 million of gross unrecognized holding losses by maturity as of December 31, 2017 (Successor Company). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. These held-to-maturity securities are issued by affiliates of the Company which are considered VIE's. The Company is not the primary beneficiary of these entities and thus the securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are affiliates of the Company. The Company’s held-to-maturity securities had $30.4 million of gross unrecognized holding gains and $67.2 million of gross unrecognized holding losses by maturity as of December 31, 2016 (Successor Company). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. The Company held $17.5 million of non-income producing securities for the year ended December 31, 2017 (Successor Company). Included in the Company's invested assets are $1.6 billion of policy loans as of December 31, 2017 (Successor Company). The interest rates on standard policy loans range from 3.0% to 8.0% . The collateral loans on life insurance policies have an interest rate of 13.64% . Variable Interest Entities The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a VIE. If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Based on this analysis, the Company had an interest in two subsidiaries as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), Red Mountain LLC ("Red Mountain") and Steel City LLC ("Steel City"), that were determined to be VIEs. The activity most significant to Red Mountain is the issuance of a note in connection with a financing transaction involving Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”) in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued a note (the "Red Mountain Note") to Golden Gate V. For details of this transaction, see Note 14, Debt and Other Obligations . The Company has the power, via its 100% ownership through an affiliate, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third party in its function as provider of credit enhancement on the Red Mountain Note. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment, through an affiliate, of $10,000 . Additionally, the Company has guaranteed Red Mountain’s payment obligation for the credit enhancement fee to the unrelated third party provider. As of December 31, 2017 (Successor Company), no payments have been made or required related to this guarantee. Steel City, a newly formed wholly owned subsidiary of the Company, entered into a financing agreement on January 15, 2016 involving Golden Gate Captive Insurance Company, in which Golden Gate issued non-recourse funding obligations to Steel City and Steel City issued three notes (the “Steel City Notes”) to Golden Gate. Credit enhancement on the Steel City Notes is provided by unrelated third parties. For details of the financing transaction, see Note 14, Debt and Other Obligations . The activity most significant to Steel City is the issuance of the Steel City Notes. The Company had the power, via its 100% ownership, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third parties in their function as providers of credit enhancement on the Steel City Notes. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment of $10,000 . Additionally, the Company has guaranteed Steel City’s payment obligation for the credit enhancement fee to the unrelated third party providers. As of December 31, 2017 (Successor Company), no payments have been made or required related to this guarantee. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company's periodic fair value measurements for non-financial assets and liabilities was not material. The Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized as follows: • Level 1: Unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2: Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following: a) Quoted prices for similar assets or liabilities in active markets b) Quoted prices for identical or similar assets or liabilities in non-active markets c) Inputs other than quoted market prices that are observable d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means. • Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability. The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities—available-for-sale Residential mortgage-backed securities $ — $ 2,327,212 $ — $ 2,327,212 Commercial mortgage-backed securities — 1,889,822 — 1,889,822 Other asset-backed securities — 745,184 504,365 1,249,549 U.S. government-related securities 958,775 264,477 — 1,223,252 State, municipalities, and political subdivisions — 1,741,645 — 1,741,645 Other government-related securities — 287,282 — 287,282 Corporate securities — 29,075,109 626,901 29,702,010 Redeemable preferred stock 72,471 18,620 — 91,091 Total fixed maturity securities—available-for-sale 1,031,246 36,349,351 1,131,266 38,511,863 Fixed maturity securities—trading Residential mortgage-backed securities — 259,694 — 259,694 Commercial mortgage-backed securities — 146,804 — 146,804 Other asset-backed securities — 102,875 35,222 138,097 U.S. government-related securities 21,183 6,051 — 27,234 State, municipalities, and political subdivisions — 326,925 — 326,925 Other government-related securities — 63,925 — 63,925 Corporate securities — 1,692,741 5,442 1,698,183 Redeemable preferred stock 3,327 — — 3,327 Total fixed maturity securities—trading 24,510 2,599,015 40,664 2,664,189 Total fixed maturity securities 1,055,756 38,948,366 1,171,930 41,176,052 Equity securities 688,214 36 66,110 754,360 Other long-term investments (1) 51,102 417,969 136,004 605,075 Short-term investments 482,461 132,749 — 615,210 Total investments 2,277,533 39,499,120 1,374,044 43,150,697 Cash 252,310 — — 252,310 Other assets 28,771 — — 28,771 Assets related to separate accounts Variable annuity 13,956,071 — — 13,956,071 Variable universal life 1,035,202 — — 1,035,202 Total assets measured at fair value on a recurring basis $ 17,549,887 $ 39,499,120 $ 1,374,044 $ 58,423,051 Liabilities: Annuity account balances (2) $ — $ — $ 83,472 $ 83,472 Other liabilities (1) 5,755 240,927 760,890 1,007,572 Total liabilities measured at fair value on a recurring basis $ 5,755 $ 240,927 $ 844,362 $ 1,091,044 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 (Predecessor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities—available-for-sale Residential mortgage-backed securities $ — $ 1,898,480 $ 3 $ 1,898,483 Commercial mortgage-backed securities — 1,811,470 — 1,811,470 Other asset-backed securities — 648,929 562,604 1,211,533 U.S. government-related securities 1,002,020 266,139 — 1,268,159 State, municipalities, and political subdivisions — 1,656,503 — 1,656,503 Other government-related securities — 239,921 — 239,921 Corporate securities — 26,707,519 664,046 27,371,565 Redeemable preferred stock 66,781 19,062 — 85,843 Total fixed maturity securities—available-for-sale 1,068,801 33,248,023 1,226,653 35,543,477 Fixed maturity securities—trading Residential mortgage-backed securities — 255,027 — 255,027 Commercial mortgage-backed securities — 149,683 — 149,683 Other asset-backed securities — 115,521 84,563 200,084 U.S. government-related securities 22,424 4,537 — 26,961 State, municipalities, and political subdivisions — 316,519 — 316,519 Other government-related securities — 63,012 — 63,012 Corporate securities — 1,619,097 5,492 1,624,589 Redeemable preferred stock 3,985 — — 3,985 Total fixed maturity securities—trading 26,409 2,523,396 90,055 2,639,860 Total fixed maturity securities 1,095,210 35,771,419 1,316,708 38,183,337 Equity securities 685,443 36 69,010 754,489 Other long-term investments (1) 82,420 335,498 124,325 542,243 Short-term investments 328,829 3,602 — 332,431 Total investments 2,191,902 36,110,555 1,510,043 39,812,500 Cash 348,182 — — 348,182 Other assets 23,830 — — 23,830 Assets related to separate accounts Variable annuity 13,244,252 — — 13,244,252 Variable universal life 895,925 — — 895,925 Total assets measured at fair value on a recurring basis $ 16,704,091 $ 36,110,555 $ 1,510,043 $ 54,324,689 Liabilities: Annuity account balances (2) $ — $ — $ 87,616 $ 87,616 Other liabilities (1) 13,004 163,974 571,843 748,821 Total liabilities measured at fair value on a recurring basis $ 13,004 $ 163,974 $ 659,459 $ 836,437 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. Determination of Fair Values The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a "waterfall" approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two -sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price approximately 92.7% of the Company's available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non-binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which we purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation. The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies. For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value through an analysis using internal and external cash flow models developed based on spreads and, when available, market indices. The Company uses a market-based cash flow analysis to validate the reasonableness of prices received from independent brokers. These analytics, which are updated daily, incorporate various metrics (yield curves, credit spreads, prepayment rates, etc.) to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the year ended December 31, 2017 (Successor Company). The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3. Asset-Backed Securities This category mainly consists of residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities (collectively referred to as asset-backed securities or "ABS"). As of December 31, 2017 (Successor Company), the Company held $5.5 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities. After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation. As of December 31, 2017 (Successor Company), the Company held $539.6 million of Level 3 ABS, which included $504.4 million of other asset-backed securities classified as available-for-sale and $35.2 million of other asset-backed securities classified as trading. These securities within the available-for-sale portfolio are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate. In periods where market activity increases and there are transactions at a price that is not the result of a distressed or forced sale we consider those prices as part of our valuation. If the market activity during a period is solely the result of the issuer redeeming positions we consider those transactions in our valuation, but still consider them to be level three measurements due to the nature of the transaction. Corporate Securities, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities As of December 31, 2017 (Successor Company), the Company classified approximately $33.5 billion of corporate securities, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted- average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation. The brokers and third party pricing service utilize valuation models that consist of a hybrid income and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market. As of December 31, 2017 (Successor Company), the Company classified approximately $632.3 million of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium. Equities As of December 31, 2017 (Successor Company), the Company held approximately $66.1 million of equity securities classified as Level 2 and Level 3. Of this total, $65.5 million represents FHLB stock. The Company believes that the cost of the FHLB stock approximates fair value. Other Long-Term Investments and Other Liabilities Other long-term investments and other liabilities consist entirely of free-standing and embedded derivative financial instruments. Refer to Note 7, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of December 31, 2017 (Successor Company), 100% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses. Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets. Derivative instruments classified as Level 2 primarily include swaps, options, and swaptions, which are traded over-the-counter. Level 2 also includes certain centrally cleared derivatives. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs. Derivative instruments classified as Level 3 were embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input. The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities. The embedded derivatives are carried at fair value in other long-term investments and other liabilities on the Company's consolidated balance sheet. The changes in fair value are recorded in earnings as "Realized investment gains (losses)—Derivative financial instruments". Refer to Note 7, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses. The fair value of the GLWB embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near- term equity market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the Ruark 2015 ALB table with attained age factors varying from 91.1% - 106.6% . The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR plus a credit spread (to represent the Company's non-performance risk). As a result of using significant unobservable inputs, the GLWB embedded derivative is categorized as Level 3. These assumptions are reviewed on a quarterly basis. The balance of the FIA embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 1994 Variable Annuity MGDB mortality table modified with company experience, with attained age factors varying from 46% - 113% . The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company's non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3. The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the SOA 2015 VBT Primary Tables modified with company experience, with attained age factors varying from 34% - 152% . The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company's non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3. The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. As a result, these agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in earnings. The investments supporting these agreements are designated as "trading securities"; therefore changes in their fair value are also reported in earnings. As of December 31, 2017 (Successor Company), the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $2.4 billion and the statutory unrealized gain (loss) of the securities of $226.6 million . As a result, changes in the fair value of the embedded derivatives are largely offset by the changes in fair value of the related investments and each are reported in earnings. The fair value of the embedded derivative is considered a Level 3 valuation due to the unobservable nature of the policy liabilities. Annuity Account Balances The Company records a certain legacy block of FIA reserves at fair value. Based on the characteristics of these reserves, the Company believes that the fund value approximates fair value. The fair value measurement of these reserves is considered a Level 3 valuation due to the unobservable nature of the fund values. The Level 3 fair value as of December 31, 2017 (Successor Company) is $83.5 million . Separate Accounts Separate account assets are invested in open-ended mutual funds and are included in Level 1. Valuation of Level 3 Financial Instruments The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 504,228 Liquidation Liquidation value $90 - $97 ($94.91) Discounted cash flow Liquidity premium 0.06% - 1.17% (0.75%) Paydown rate 11.31% - 11.97% (11.54%) Corporate securities 617,770 Discounted cash flow Spread over treasury 0.81% - 3.95% (1.06%) Liabilities: (1) Embedded derivatives—GLWB (2) $ 111,760 Actuarial cash flow model Mortality 91.1% to 106.6% of Ruark 2015 ALB table Lapse 1.0% - 30.0%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.11% - 0.79% Embedded derivative—FIA 218,676 Actuarial cash flow model Expenses $146 per policy Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 1.0% - 30.0%, depending on duration/surrender charge period Nonperformance risk 0.11% - 0.79% Embedded derivative—IUL 80,212 Actuarial cash flow model Mortality 34% - 152% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.11% - 0.79% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value. The Company has considered all reasonably available quantitative inputs as of December 31, 2017 (Successor Company), but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $50.4 million of financial instruments being classified as Level 3 as of December 31, 2017 (Successor Company). Of the $50.4 million , $35.4 million are other asset-backed securities, $14.6 million are corporate securities, and $0.4 million are equity securities. In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2017 (Successor Company), the Company held $65.7 million of financial instruments where book value approximates fair value which was predominantly FHLB stock. The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 553,308 Discounted cash flow Liquidation value $88 - $97.25 ($95.04) Corporate securities 638,279 Discounted cash flow Spread over treasury 0.31% - 4.50% (2.04%) Liabilities: (1) Embedded derivatives—GLWB (2) $ 115,370 Actuarial cash flow model Mortality 91.1% to 106.6% of Ruark 2015 ALB table Lapse 0.3% - 15%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.18% - 1.09% Embedded derivative—FIA 147,368 Actuarial cash flow model Expenses $126 per policy Asset Earned Rate 4.08% - 4.66% Withdrawal rate 1% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 2.0% - 40.0%, depending on duration/surrender charge period Nonperformance risk 0.18% - 1.09% Embedded derivative - IUL 46,051 Actuarial cash flow model Mortality 38% - 153% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.18% - 1.09% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value. The Company has considered all reasonably available quantitative inputs as of December 31, 2016 (Successor Company), but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $128.2 million of financial instruments being classified as Level 3 as of December 31, 2016 (Successor Company). Of the $128.2 million , $93.9 million are other asset-backed securities, $31.3 million are corporate securities, and $3.1 million are equity securities. In certain cases the Company determined that book value materially approximates fair value. As of December 31, 2016 (Successor Company), the Company held $65.9 million of financial instruments where book value approximates fair value, which was predominantly FHLB stock. The asset-backed securities classified as Level 3 are predominantly ARS. A change in the paydown rate (the projected annual rate of principal reduction) of the ARS can significantly impact the fair value of these securities. A decrease in the paydown rate would increase the projected weighted average life of the ARS and increase the sensitivity of the ARS’ fair value to changes in interest rates. An increase in the liquidity premium would result in a decrease in the fair value of the securities, while a decrease in the liquidity premium would increase the fair value of these securities. The liquidation value for these securities are sensitive to the issuer's available cash flows and ability to redeem the securities, as well as the current holders' willingness to liquidate at the specified price. The fair value of corporate bonds classified as Level 3 is sensitive to changes in the interest rate spread over the corresponding U.S. Treasury rate. This spread represents a risk premium that is impacted by company specific and market factors. An increase in the spread can be caused by a perceived increase in credit risk of a specific issuer and/or an increase in the overall market risk premium associated with similar securities. The fair values of corporate bonds are sensitive to changes in spread. When holding the treasury rate constant, the fair value of corporate bonds increases when spreads decrease, and decreases when spreads increase. The fair value of the GLWB embedded derivative is sensitive to changes in the discount rate which includes the Company’s nonperformance risk, volatility, lapse, and mortality assumptions. The volatility assumption is an observable inpu |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Types of Derivative Instruments and Derivative Strategies The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program. Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit risk by entering into transactions with highly rated counterparties. The Company manages the market risk by establishing and monitoring limits as to the types and degrees of risk that may be undertaken. The Company monitors its use of derivatives in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department. Derivatives Related to Interest Rate Risk Management Derivative instruments that are used as part of the Company's interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions. Derivatives Related to Foreign Currency Exchange Risk Management Derivative instruments that are used as part of the Company’s foreign currency exchange risk management strategy include foreign currency swaps, foreign currency futures, foreign equity futures, and foreign equity options. Derivatives Related to Risk Mitigation of Certain Annuity Contracts The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to VA contracts and fixed indexed annuities: • Foreign Currency Futures • Variance Swaps • Interest Rate Futures • Equity Options • Equity Futures • Credit Derivatives • Interest Rate Swaps • Interest Rate Swaptions • Volatility Futures • Volatility Options • Total Return Swaps Accounting for Derivative Instruments The Company records its derivative financial instruments in the consolidated balance sheet in “other long-term investments” and “other liabilities” in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists. For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the effective portion of their realized gain or loss is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis. The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through earnings in the period of change. Changes in the fair value of derivatives that are recognized in current earnings are reported in “Realized investment gains (losses)-Derivative financial instruments.” Derivative Instruments Designated and Qualifying as Hedging Instruments Cash-Flow Hedges • To hedge a fixed rate note denominated in a foreign currency, the Company entered into a fixed-to-fixed foreign currency swap in order to hedge the foreign currency exchange risk associated with the note. The cash flows received on the swap are identical to the cash flow paid on the note. Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in earnings during the period of change. Derivatives Related to Variable Annuity Contracts • The Company uses equity futures, equity options, total return swaps, interest rate futures, interest rate swaps, interest rate swaptions, currency futures, volatility futures, volatility options, and variance swaps to mitigate the risk related to certain guaranteed minimum benefits, including GLWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility. • The Company markets certain VA products with a GLWB rider. The GLWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. Derivatives Related to Fixed Annuity Contracts • The Company uses equity futures and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity and overall volatility. • The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. Derivatives Related to Indexed Universal Life Contracts • The Company uses equity futures and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets. • The Company markets certain IUL products. The IUL component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. Other Derivatives • The Company uses various swaps and other types of derivatives to manage risk related to other exposures. • The Company is involved in various modified coinsurance arrangements which contain embedded derivatives. Changes in their fair value are recorded in current period earnings. The investment portfolios that support the related modified coinsurance reserves had fair value changes which substantially offset the gains or losses on these embedded derivatives. The following table sets forth realized investment gains and losses for the periods shown: Realized investment gains (losses)—derivative financial instruments Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures - VA $ 26,015 $ (3,450 ) $ (14,818 ) $ 1,413 Equity futures - VA (91,776 ) (106,431 ) (5,033 ) 9,221 Currency futures - VA (23,176 ) 33,836 7,169 7,778 Equity options - VA (94,791 ) (60,962 ) (27,733 ) 3,047 Interest rate swaptions - VA (2,490 ) (1,161 ) (13,354 ) 9,268 Interest rate swaps - VA 27,981 20,420 (85,942 ) 122,710 Total return swaps - VA (32,240 ) — — — Embedded derivative - GLWB 3,614 68,056 4,412 (207,018 ) Total derivatives related to VA contracts (186,863 ) (49,692 ) (135,299 ) (53,581 ) Derivatives related to FIA contracts: Embedded derivative - FIA (55,878 ) (16,494 ) (738 ) 1,769 Equity futures - FIA 642 4,248 (355 ) (184 ) Volatility futures - FIA — — 5 — Equity options - FIA 44,585 8,149 1,211 (2,617 ) Total derivatives related to FIA contracts (10,651 ) (4,097 ) 123 (1,032 ) Derivatives related to IUL contracts: Embedded derivative - IUL (14,117 ) 9,529 (614 ) (486 ) Equity futures - IUL (818 ) 129 144 3 Equity options - IUL 9,580 3,477 (540 ) (115 ) Total derivatives related to IUL contracts (5,355 ) 13,135 (1,010 ) (598 ) Embedded derivative - Modco reinsurance treaties (103,009 ) 390 166,092 (68,026 ) Other derivatives 50 (24 ) 91 (37 ) Total realized gains (losses)—derivatives $ (305,828 ) $ (40,288 ) $ 29,997 $ (123,274 ) The following tables present the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship: Gain (Loss) on Derivatives in Cash Flow Relationship Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Effective Portion) (Effective Portion) (Ineffective Portion) Benefits and settlement expenses Realized investment gains (losses) (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017 Foreign currency swaps $ (867 ) $ (694 ) $ — Total $ (867 ) $ (694 ) $ — Successor Company For The Year Ended December 31, 2016 Foreign currency swaps $ 1,058 $ (60 ) $ — Total $ 1,058 $ (60 ) $ — February 1, 2015 to December 31, 2015 Inflation $ (131 ) $ (131 ) $ 73 Total $ (131 ) $ (131 ) $ 73 Predecessor Company January 1, 2015 to January 31, 2015 Inflation $ 13 $ (36 ) $ (7 ) Total $ 13 $ (36 ) $ (7 ) Based on expected cash flows of the underlying hedged items, the Company expects to reclassify $0.6 million out of accumulated other comprehensive income into earnings during the next twelve months. The tables below present information about the nature and accounting treatment of the Company's primary derivative financial instruments and the location in and effect on the consolidated financial statements for the periods presented below: Successor Company As of December 31, 2017 2016 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) Other long-term investments Cash flow hedges: Foreign currency swaps $ 117,178 $ 6,016 $ 117,178 $ 132 Derivatives not designated as hedging instruments: Interest rate swaps 1,265,000 55,411 1,135,000 71,644 Total return swaps 190,938 135 — — Embedded derivative - Modco reinsurance treaties 64,472 1,009 64,123 2,573 Embedded derivative - GLWB 4,897,069 134,995 4,601,633 121,752 Interest rate futures 1,071,870 3,178 102,587 894 Equity futures 62,266 154 654,113 5,805 Currency futures 1,117 2 340,058 7,883 Equity options 4,436,467 403,961 3,944,444 328,908 Interest rate swaptions 225,000 14 225,000 2,503 Other 157 200 212 149 $ 12,331,534 $ 605,075 $ 11,184,348 $ 542,243 Other liabilities Derivatives not designated as hedging instruments: Interest rate swaps $ 597,500 $ 2,960 $ 575,000 $ 10,208 Total return swaps 243,388 318 — — Embedded derivative - Modco reinsurance treaties 2,390,539 215,247 2,450,692 141,301 Embedded derivative - GLWB 4,718,311 246,755 5,962,044 237,122 Embedded derivative - FIA 1,951,650 218,676 1,496,346 147,368 Embedded derivative - IUL 168,349 80,212 103,838 46,051 Interest rate futures 230,404 917 993,842 6,611 Equity futures 318,795 2,593 102,667 2,907 Currency futures 255,248 2,087 — — Equity options 3,112,812 237,807 2,590,160 157,253 $ 13,986,996 $ 1,007,572 $ 14,274,589 $ 748,821 |
OFFSETTING OF ASSETS AND LIABIL
OFFSETTING OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Offsetting [Abstract] | |
OFFSETTING OF ASSETS AND LIABILITIES | OFFSETTING OF ASSETS AND LIABILITIES Certain of the Company's derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company's repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 14, Debt and Other Obligations for details of the Company's repurchase agreement programs. The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2017 (Successor Company): Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Assets Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 468,871 $ — $ 468,871 $ 242,105 $ 108,830 $ 117,936 Total derivatives, subject to a master netting arrangement or similar arrangement 468,871 — 468,871 242,105 108,830 117,936 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 1,009 — 1,009 — — 1,009 Embedded derivative - GLWB 134,995 — 134,995 — — 134,995 Other 200 — 200 — — 200 Total derivatives, not subject to a master netting arrangement or similar arrangement 136,204 — 136,204 — — 136,204 Total derivatives 605,075 — 605,075 242,105 108,830 254,140 Total Assets $ 605,075 $ — $ 605,075 $ 242,105 $ 108,830 $ 254,140 Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Liabilities Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 246,682 $ — $ 246,682 $ 242,105 $ 4,577 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 246,682 — 246,682 242,105 4,577 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 215,247 — 215,247 — — 215,247 Embedded derivative - GLWB 246,755 — 246,755 — — 246,755 Embedded derivative - FIA 218,676 — 218,676 — — 218,676 Embedded derivative - IUL 80,212 — 80,212 — — 80,212 Total derivatives, not subject to a master netting arrangement or similar arrangement 760,890 — 760,890 — — 760,890 Total derivatives 1,007,572 — 1,007,572 242,105 4,577 760,890 Repurchase agreements (1) 885,000 — 885,000 — — 885,000 Total Liabilities $ 1,892,572 $ — $ 1,892,572 $ 242,105 $ 4,577 $ 1,645,890 (1) Borrowings under repurchase agreements are for a term less than 90 days. The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2016 (Successor Company): Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Assets Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 417,769 $ — $ 417,769 $ 171,384 $ 100,890 $ 145,495 Total derivatives, subject to a master netting arrangement or similar arrangement 417,769 — 417,769 171,384 100,890 145,495 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 2,573 — 2,573 — — 2,573 Embedded derivative - GLWB 121,752 — 121,752 — — 121,752 Other 149 — 149 — — 149 Total derivatives, not subject to a master netting arrangement or similar arrangement 124,474 — 124,474 — — 124,474 Total derivatives 542,243 — 542,243 171,384 100,890 269,969 Total Assets $ 542,243 $ — $ 542,243 $ 171,384 $ 100,890 $ 269,969 Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Liabilities Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 176,979 $ — $ 176,979 $ 171,384 $ 5,595 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 176,979 — 176,979 171,384 5,595 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 141,301 — 141,301 — — 141,301 Embedded derivative - GLWB 237,122 — 237,122 — — 237,122 Embedded derivative - FIA 147,368 — 147,368 — — 147,368 Embedded derivative - IUL 46,051 — 46,051 — — 46,051 Total derivatives, not subject to a master netting arrangement or similar arrangement 571,842 — 571,842 — — 571,842 Total derivatives 748,821 — 748,821 171,384 5,595 571,842 Repurchase agreements (1) 797,721 — 797,721 — — 797,721 Total Liabilities $ 1,546,542 $ — $ 1,546,542 $ 171,384 $ 5,595 $ 1,369,563 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
MORTGAGE LOANS
MORTGAGE LOANS | 12 Months Ended |
Dec. 31, 2017 | |
MORTGAGE LOANS | |
MORTGAGE LOANS | MORTGAGE LOANS Mortgage Loans The Company invests a portion of its investment portfolio in commercial mortgage loans. As of December 31, 2017 (Successor Company), the Company's mortgage loan holdings were approximately $6.8 billion . The Company has specialized in making loans on credit-oriented commercial properties, credit-anchored strip shopping centers, senior living facilities, and apartments. The Company’s underwriting procedures relative to its commercial loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company's mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition. The Company's commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts and prepayment fees are reported in net investment income. As of February 1, 2015, all mortgage loans were measured at fair value. Each mortgage loan was individually analyzed to determine the fair value. Each loan was either analyzed and assigned a discount rate or given an impairment, based on whether facts and circumstances which, as of the acquisition date, indicated less than full projected collections of contractual principal and interest payments. Various market factors were considered in determining the net present value of the expected cash flow stream or underlying real estate collateral, including the characteristics of the borrower, the underlying collateral, underlying credit worthiness of the tenants, and tenant payment history. Known events and risks, such as refinancing risks, were also considered in the fair value determination. In certain cases, fair value was based on the NPV of the expected cash flow stream or the underlying value of the real estate collateral. The following table includes a breakdown of the Company's commercial mortgage loan portfolio by property type as of December 31, 2017 (Successor Company): Type Percentage of Mortgage Loans on Real Estate Retail 52.1 % Office Buildings 10.9 Apartments 8.8 Warehouses 10.4 Senior housing 13.7 Other 4.1 100.0 % The Company specializes in originating mortgage loans on either credit-oriented or credit-anchored commercial properties. No single tenant's exposure represents more than 1.5% of mortgage loans. Approximately 64.4% of the mortgage loans are on properties located in the following states: State Percentage of Mortgage Loans on Real Estate Alabama 9.6 % Florida 9.4 Texas 8.4 Georgia 7.9 Ohio 5.5 Tennessee 5.3 California 5.2 South Carolina 3.3 North Carolina 4.9 Utah 4.9 64.4 % During the year ended December 31, 2017 (Successor Company), the Company funded approximately $1.6 billion of new loans, with an average loan size of $8.8 million . The average size mortgage loan in the portfolio as of December 31, 2017 (Successor Company), was $4.0 million and the weighted-average interest rate was 4.8% . The largest single mortgage loan at December 31, 2017 (Successor Company) was $61.1 million . Certain of the mortgage loans have call options that occur within the next 11 years . However, if interest rates were to significantly increase, we may be unable to exercise the call options on our existing mortgage loans commensurate with the significantly increased market rates. Assuming the loans are called at their next call dates, approximately $161.2 million would become due in 2018 , $858.6 million in 2019 through 2023 , $105.8 million in 2024 through 2028 , and $2.0 million thereafter. The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), approximately $669.3 million and $595.2 million , respectively, of the Company's mortgage loans have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income when received. During the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015, (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company recognized $37.2 million , $16.7 million , $29.8 million , and $0.1 million of participating mortgage loan income, respectively. As of December 31, 2017 (Successor Company), approximately $6.5 million of invested assets consisted of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the year ended December 31, 2017 (Successor Company), certain mortgage loan transactions occurred that were accounted for as troubled debt restructurings. For all mortgage loans, the impact of troubled debt restructurings is generally reflected in our investment balance and in the allowance for mortgage loan credit losses. During the year ended December 31, 2017 (Successor Company), the Company recognized two troubled debt restructuring transactions as a result of the Company granting a concession to a borrower which included loans terms unavailable from other lenders. These concessions were the result of agreements between the creditor and the debtor. The Company did not identify any loans whose principal was permanently impaired during the year ended December 31, 2017 (Successor Company). As of December 31, 2016 (Successor Company), approximately $1.5 million of invested assets consisted of nonperforming, restructured, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the year ended December 31, 2016 (Successor Company), certain mortgage loan transactions occurred that were accounted for as troubled debt restructurings. For all mortgage loans, the impact of troubled debt restructurings is generally reflected in our investment balance and in the allowance for mortgage loan credit losses. During the year ended December 31, 2016 (Successor Company), the Company recognized a troubled debt restructuring as a result of the Company granting a concession to a borrower which included loans terms unavailable from other lenders and reduced the expected cash flows on the loan. This concession was the result of agreements between the creditor and the debtor. The Company did not identify any loans whose principal was permanently impaired during the year ended December 31, 2016 (Successor Company). As of December 31, 2015 (Successor Company), approximately $4.7 million of invested assets consisted of non performing, restructured, or mortgage loans that were foreclosed and were converted to real estate properties since February 1, 2015 (Successor Company). The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the period February 1, 2015 to December 31, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company entered into certain mortgage loan transactions that were accounted for as troubled debt restructurings. For all mortgage loans, the impact of troubled debt restructurings is generally reflected in the Company's investment balance and in the allowance for mortgage loan credit losses. Transactions accounted for as troubled debt restructurings during the period of February 1, 2015 to December 31, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company) included either the acceptance of assets in satisfaction of principal during the respective periods or at a future date and were the result of agreements between the creditor and the debtor. During the period of February 1, 2015 to December 31, 2015 (Successor Company), the Company accepted or agreed to accept assets of $15.8 million in satisfaction of $21.1 million of principal and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company accepted or agreed to accept assets of $11.3 million in satisfaction of $13.8 million of principal. Of the amounts accepted or agreed to accept in satisfaction of principal during the period of February 1, 2015 to December 31, 2015 (Successor Company), $3.7 million related to foreclosures. These transactions resulted in no material realized losses in the Company's investment in mortgage loans net of existing discounts for mortgage loan losses for the period of February 1, 2015 to December 31, 2015 (Successor Company). The Company's mortgage loan portfolio consists of two categories of loans: 1) those not subject to a pooling and servicing agreement and 2) those subject to a contractual pooling and servicing agreement. As of December 31, 2017 (Successor Company), $6.5 million of mortgage loans not subject to a pooling and servicing agreement were nonperforming, restructured, or mortgage loans that were foreclosed and were converted to real estate. None of the restructured loans were nonperforming during the year ended December 31, 2017 (Successor Company). The Company foreclosed on $6.1 million nonperforming loans during the year ended December 31, 2017 (Successor Company). As of December 31, 2017 (Successor Company), none of the loans subject to a pooling and servicing agreement were nonperforming or restructured. The Company did not foreclose on any nonperforming loans subject to a pooling and servicing agreement during the year ended December 31, 2017 (Successor Company). As of December 31, 2017 (Successor Company), there were no allowances for mortgage loan credit losses and as of December 31, 2016 (Successor Company), there was a $0.7 million allowance for mortgage loan credit losses. Due to the Company’s loss experience and nature of the loan portfolio, the Company believes that a collectively evaluated allowance would be inappropriate. The Company believes an allowance calculated through an analysis of specific loans that are believed to have a higher risk of credit impairment provides a more accurate presentation of expected losses in the portfolio and is consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Since the Company uses the specific identification method for calculating the allowance, it is necessary to review the economic situation of each borrower to determine those that have higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assesses the risk of each loan. When issues are identified, the severity of the issues are assessed and reviewed for possible credit impairment. If a loss is probable, an expected loss calculation is performed and an allowance is established for that loan based on the expected loss. The expected loss is calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan may be subsequently charged off at such point that the Company no longer expects to receive cash payments, the present value of future expected payments of the renegotiated loan is less than the current principal balance, or at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan. A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property: Successor Company As of As of December 31, 2016 (Dollars In Thousands) Beginning balance $ 724 $ — Charge offs (6,708 ) (4,682 ) Recoveries (731 ) — Provision 6,715 5,406 Ending balance $ — $ 724 It is the Company's policy to cease accruing interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company's general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status. An analysis of the delinquent loans is shown in the following chart: 30 - 59 Days Delinquent 60 - 89 Days Delinquent Greater than 90 Days Delinquent Total Delinquent (Dollars In Thousands) Successor Company As of December 31, 2017 Commercial mortgage loans $ 1,817 $ — $ — $ 1,817 Number of delinquent commercial mortgage loans 2 — — 2 As of December 31, 2016 Commercial mortgage loans $ 3,669 $ — $ — $ 3,669 Number of delinquent commercial mortgage loans 4 — — 4 The Company's commercial mortgage loan portfolio consists of mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on impaired loans to ninety days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis. For information regarding impaired loans, please refer to the following chart: Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Cash Basis Interest Income (Dollars In Thousands) Successor Company As of December 31, 2017 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded — — — — — — As of December 31, 2016 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 1,819 1,819 724 1,819 96 96 As of December 31, 2016 (Successor Company), the Company did not carry any mortgage loans that have been modified in a troubled debt restructuring. Mortgage loans that were modified in a troubled debt restructuring as of December 31, 2017 (Successor Company) were as follows: Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars In Thousands) Successor Company As of December 31, 2017 Troubled debt restructuring: Commercial mortgage loans 1 $ 418 $ 418 |
DEFERRED POLICY ACQUISITION COS
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED | 12 Months Ended |
Dec. 31, 2017 | |
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED | |
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED | DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED Deferred Policy Acquisition Costs The balances and changes in DAC are as follows: Successor Company As of As of December 31, 2016 (Dollars In Thousands) Balance, beginning of period $ 572,328 $ 288,611 Capitalization of commissions, sales, and issue expenses 333,250 327,938 Amortization (52,559 ) (48,286 ) Change due to unrealized investment gains and losses (15,234 ) 4,065 Balance, end of period $ 837,785 $ 572,328 Value of Business Acquired The balances and changes in VOBA are as follows: Successor Company As of As of December 31, 2016 (Dollars In Thousands) Balance, beginning of period $ 1,447,501 $ 1,270,197 Acquisitions — 285,092 Amortization (25,662 ) (100,778 ) Change due to unrealized investment gains and losses (60,047 ) (7,010 ) Balance, end of period $ 1,361,792 $ 1,447,501 Based on the balance recorded as of December 31, 2017 (Successor Company), the expected amortization of VOBA for the next five years is as follows: Expected Years Amortization (Dollars In Thousands) 2018 $ 122,802 2019 118,196 2020 103,120 2021 90,544 2022 83,333 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL During the fourth quarter of 2017, the Company performed its annual qualitative evaluation of goodwill based on the circumstances that existed as of October 1, 2017 (Successor Company) and determined that there was no indication that its segment goodwill was more likely than not impaired, thus no quantitative assessment was performed and no adjustment to impair goodwill was necessary. The Company has assessed whether events have occurred subsequent to October 1, 2017 that would impact the Company's conclusion and no such events were identified. As part of the Company's ongoing assessment of goodwill recoverability, the impact of The Tax Reform Act and the impact that the lower corporate tax rate would have on the carrying value of the reporting units and their associated fair values was assessed in response to potential considerations as outlined under ASC 350-20-35-3C. After consideration of applicable factors and circumstances noted as part of a qualitative assessment, the Company determined that it was more likely than not that the increase in the fair value of the reporting unit would exceed the increase in the carrying value of the reporting units and thus did not consider this to be a triggering event that would require a quantitative assessment of impairment. As of December 31, 2016 (Successor Company), the Company increased its goodwill balance by approximately $61.0 million in the Asset Protection segment, which was attributed to the US Warranty acquisition. Refer to Note 3, Significant Transactions . The balance of goodwill for the Company as of December 31, 2017 (Successor Company) was $793.5 million . |
CERTAIN NONTRADITIONAL LONG-DUR
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | 12 Months Ended |
Dec. 31, 2017 | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS The Company issues variable universal life and VA products through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder. The Company also offers, for our VA products, certain GMDB. The most significant of these guarantees involve 1) return of the highest anniversary date account value, or 2) return of the greater of the highest anniversary date account value or the last anniversary date account value compounded at 5% interest or 3) return of premium. The GLWB rider provides the contract holder with protection against certain adverse market impacts on the amount they can withdraw and is classified as an embedded derivative and is carried at fair value on the Company's balance sheet. The VA separate account balances subject to GLWB were $9.7 billion as of December 31, 2017 (Successor Company). For more information regarding the valuation of and income impact of GLWB, please refer to Note 2, Summary of Significant Accounting Policies , Note 6, Fair Value of Financial Instruments , and Note 7, Derivative Financial Instruments . The GMDB reserve is calculated by applying a benefit ratio, equal to the present value of total expected GMDB claims divided by the present value of total expected contract assessments, to cumulative contract assessments. This amount is then adjusted by the amount of cumulative GMDB claims paid and accrued interest. Assumptions used in the calculation of the GMDB reserve were as follows: mean investment performance of 7.01% , age-based mortality from the Ruark 2015 ALB table adjusted for company and industry experience, lapse rates determined by a dynamic formula, and an average discount rate of 4.9% . Changes in the GMDB reserve are included in benefits and settlement expenses in the accompanying consolidated statements of income. The VA separate account balances subject to GMDB were $13.1 billion as of December 31, 2017 (Successor Company). The total GMDB amount payable based on VA account balances as of December 31, 2017 (Successor Company), was $90.5 million (including $72.8 million in the Annuities segment and $17.7 million in the Acquisitions segment) with a GMDB reserve of $30.9 million and $3.1 million in the Annuities and Acquisitions segment, respectively. The average attained age of contract holders as of December 31, 2017 (Successor Company) for the Company was 73 years . These amounts exclude certain VA business which has been 100% reinsured to Commonwealth Annuity and Life Insurance Company (formerly known as Allmerica Financial Life Insurance and Annuity Company) ("CALIC"), under a Modco agreement. The guaranteed amount payable associated with the annuities reinsured to CALIC was $8.4 million and is included in the Acquisitions segment. The average attained age of contract holders as of December 31, 2017 , was 67 years . Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) is as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ 34,796 $ 36,427 $ 29,010 $ 26,251 Incurred guarantee benefits 849 678 10,175 3,073 Less: Paid guarantee benefits 1,615 2,309 2,758 449 Ending balance $ 34,030 $ 34,796 $ 36,427 $ 28,875 Account balances of variable annuities with guarantees invested in VA separate accounts are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Equity mutual funds $ 8,798,847 $ 8,071,204 Fixed income mutual funds 5,005,663 5,085,864 Total $ 13,804,510 $ 13,157,068 Certain of the Company's fixed annuities and universal life products have a sales inducement in the form of a retroactive interest credit ("RIC"). In addition, certain annuity contracts provide a sales inducement in the form of a bonus interest credit. The Company maintains a reserve for all interest credits earned to date. The Company defers the expense associated with the RIC and bonus interest credits each period and amortizes these costs in a manner similar to that used for DAC. Activity in the Company's deferred sales inducement asset was as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Deferred asset, beginning of period $ 22,497 $ 11,756 $ — $ 155,150 Amounts deferred 14,246 16,212 14,557 82 Amortization (5,787 ) (5,471 ) (2,801 ) (1,139 ) Deferred asset, end of period $ 30,956 $ 22,497 $ 11,756 $ 154,093 |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | REINSURANCE The Company reinsures certain of its risks with (cedes), and assumes risks from, other insurers under yearly renewable term, coinsurance, and modified coinsurance agreements. Under yearly renewable term agreements, the Company reinsures only the mortality risk, while under coinsurance the Company reinsures a proportionate share of all risks arising under the reinsured policy. Under coinsurance, the reinsurer receives a proportionate share of the premiums less commissions and is liable for a corresponding share of all benefit payments. Modified coinsurance is accounted for in a manner similar to coinsurance except that the liability for future policy benefits is held by the ceding company, and settlements are made on a net basis between the companies. 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 us under the terms of the reinsurance agreements. The Company monitors the concentration of credit risk the Company has with any reinsurer, as well as the financial condition of its reinsurers. As of December 31, 2017 (Successor Company), the Company had reinsured approximately 38% of the face value of its life insurance in-force. The Company has reinsured approximately 16% of the face value of its life insurance in-force with the following three reinsurers: • Security Life of Denver Insurance Co. (currently administered by Hannover Re) • Swiss Re Life & Health America Inc. • The Lincoln National Life Insurance Co. (currently administered by Swiss Re Life & Health America Inc.) The Company has not experienced any credit losses for the years ended December 31, 2017 (Successor Company), December 31, 2016 (Successor Company), or December 31, 2015 (Successor Company) related to these reinsurers. The Company has set limits on the amount of insurance retained on the life of any one person. The amount of insurance retained by the Company on any one life on traditional life insurance was $500,000 in years prior to mid-2005. In 2005, this retention amount was increased to $1,000,000 for certain policies, and during 2008 it was increased to $2,000,000 for certain policies. During 2016, the retention amount was increased to $5,000,000 . Reinsurance premiums, commissions, expense reimbursements, benefits, and reserves related to reinsured long-duration contracts are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts. The cost of reinsurance related to short-duration contracts is accounted for over the reinsurance contract period. Amounts recoverable from reinsurers, for both short-and long-duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with reinsured policies. The following table presents the net life insurance in-force: Successor Company As of December 31, 2017 2016 (Dollars In Millions) Direct life insurance in-force $ 751,512 $ 739,249 Amounts assumed from other companies 110,205 116,265 Amounts ceded to other companies (328,377 ) (348,995 ) Net life insurance in-force $ 533,340 $ 506,519 Percentage of amount assumed to net 21 % 23 % The following table reflects the effect of reinsurance on life, accident/health, and property and liability insurance premiums written and earned: Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017: Premiums and policy fees: Life insurance $ 2,655,846 $ (1,151,175 ) $ 435,113 $ 1,939,784 (1) Accident/health insurance 51,991 (33,051 ) 14,945 33,885 Property and liability insurance 309,848 (176,509 ) 9,676 143,015 Total $ 3,017,685 $ (1,360,735 ) $ 459,734 $ 2,116,684 December 31, 2016: Premiums and policy fees: Life insurance $ 2,610,682 $ (1,126,915 ) $ 454,999 $ 1,938,766 (1) Accident/health insurance 58,076 (36,935 ) 17,439 38,580 Property and liability insurance 261,009 (150,866 ) 5,726 115,869 Total $ 2,929,767 $ (1,314,716 ) $ 478,164 $ 2,093,215 February 1, 2015 to December 31, 2015 Premiums and policy fees: Life insurance $ 2,360,643 $ (983,143 ) $ 308,280 $ 1,685,780 (1) Accident/health insurance 70,243 (36,871 ) 18,252 51,624 Property and liability insurance 243,728 (134,964 ) 6,904 115,668 Total $ 2,674,614 $ (1,154,978 ) $ 333,436 $ 1,853,072 Gross Amount Ceded to Assumed Net (Dollars In Thousands) Predecessor Company January 1, 2015 to January 31, 2015: Premiums and policy fees: Life insurance $ 204,185 $ (74,539 ) $ 28,601 $ 158,247 (1) Accident/health insurance 6,846 (4,621 ) 1,809 4,034 Property and liability insurance 19,759 (10,796 ) 666 9,629 Total $ 230,790 $ (89,956 ) $ 31,076 $ 171,910 (1) Includes annuity policy fees of $173.5 million , $160.4 million , $152.8 million , and $13.9 million for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), for the periods of February 1, 2015 to December 31, 2015 (Successor Company) and January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), policy and claim reserves relating to insurance ceded of $5.1 billion and $5.3 billion , respectively, are included in reinsurance receivables. Should any of the reinsurers be unable to meet its obligation at the time of the claim, the Company would be obligated to pay such claims. As of December 31, 2017 (Successor Company) and December 31, 2016 (Predecessor Company), the Company had paid $96.6 million and $87.9 million , respectively, of ceded benefits which are recoverable from reinsurers. In addition, as of December 31, 2017 (Successor Company) and December 31, 2016 (Predecessor Company), the Company had receivables of $65.1 million and $64.5 million , respectively, related to insurance assumed. The Company's third party reinsurance receivables amounted to $5.1 billion and $5.3 billion as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), respectively. These amounts include ceded reserve balances and ceded benefit payments. The ceded benefit payments are recoverable from reinsurers. The following table sets forth the receivables attributable to our more significant reinsurance partners: Successor Company As of December 31, 2017 2016 Reinsurance Receivable A.M. Best Rating Reinsurance Receivable A.M. Best Rating (Dollars In Millions) Security Life of Denver Insurance Company $ 740.8 A $ 762.2 A Swiss Re Life & Health America, Inc. 614.8 A+ 682.6 A+ Lincoln National Life Insurance Co. 489.1 A+ 530.9 A+ Transamerica Life Insurance Co. 335.6 A+ 367.8 A+ SCOR Global Life (1) 331.8 A+ 354.8 A RGA Reinsurance Company 278.3 A+ 269.0 A+ American United Life Insurance Company 266.7 A+ 285.6 A+ Scottish Re (U.S.) Inc. 249.5 NR 232.8 NR Centre Reinsurance (Bermuda) Ltd 212.2 NR 243.6 NR Employers Reassurance Corporation 193.9 A- 201.7 A- (1) Includes SCOR Global Life Americas Reinsurance Company, SCOR Global Life USA Reinsurance Co, and SCOR Global Life Reinsurance Co of Delaware The Company's reinsurance contracts typically do not have a fixed term. In general, the reinsurers' ability to terminate coverage for existing cessions is limited to such circumstances as material breach of contract or non-payment of premiums by the ceding company. The reinsurance contracts generally contain provisions intended to provide the ceding company with the ability to cede future business on a basis consistent with historical terms. However, either party may terminate any of the contracts with respect to future business upon appropriate notice to the other party. Generally, the reinsurance contracts do not limit the overall amount of the loss that can be incurred by the reinsurer. The amount of liabilities ceded under contracts that provide for the payment of experience refunds is immaterial. |
DEBT AND OTHER OBLIGATIONS
DEBT AND OTHER OBLIGATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER OBLIGATIONS | DEBT AND OTHER OBLIGATIONS Debt and Subordinated Debt Securities Debt and subordinated debt securities are summarized as follows: Successor Company As of December 31, 2017 2016 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Credit Facility $ — $ — $ 170,000 $ 170,000 Capital lease obligation 1,682 1,682 — — 6.40% Senior Notes (2007), due 2018 150,000 150,518 150,000 156,663 7.375% Senior Notes (2009), due 2019 400,000 435,806 400,000 454,688 8.45% Senior Notes (2009), due 2039 232,928 357,046 246,926 381,934 $ 784,610 $ 945,052 $ 966,926 $ 1,163,285 Subordinated debt securities (year of issue): 6.25% Subordinated Debentures (2012), due 2042, callable 2017 $ — $ — $ 287,500 $ 290,002 6.00% Subordinated Debentures (2012), due 2042, callable 2017 — — 150,000 151,200 5.35% Subordinated Debentures (2017), due 2052 500,000 495,289 — — $ 500,000 $ 495,289 $ 437,500 $ 441,202 The Company's future maturities of debt, excluding notes payable to banks and subordinated debt securities, are $150.5 million in 2018, $435.8 million in 2019, and $357.0 million thereafter. During the year ended December 31, 2017 (Successor Company), the Company repurchased and subsequently extinguished $21.6 million (par value - $14.0 million ) of the Company's 8.45% Senior Notes due 2039. These repurchases resulted in a $2.0 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated statements of income. During 2017, the Company issued $500.0 million of its Subordinated Debentures due 2052. These Subordinated Debentures are carried on the Company's balance sheet net of the associated deferred issuance expenses of $4.8 million . The Company used the net proceeds from the offering to call and redeem, at par, the entire $150.0 million of 6.00% Subordinated Debentures due 2042 and $287.5 million of 6.25% Subordinated Debentures due 2042. During the year ended December 31, 2016 (Successor Company), the Company repurchased and subsequently extinguished $82.7 million (par value - $53.1 million ) of the Company's 8.45% Senior Notes due 2039. These repurchases resulted in a $9.8 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated statements of income. The Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion under a Credit Facility. The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.25 billion . Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of the Company’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s prime rate , (y) 0.50% above the Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of the Company's Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, under the Credit Facility. The maturity date of the Credit Facility is February 2, 2020. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of December 31, 2017 (Successor Company). The Company did not have an outstanding balance on the Credit Facility as of December 31, 2017 (Successor Company). The following is a summary of the Company's estimated debt covenant calculations as of December 31, 2017 (Successor Company): Requirement Actual Results Consolidated net worth margin greater than or equal to $0 greater than $1 billion Debt to total capital ratio less than 40% less than 22% On August 10, 2017, the Company called for redemption $287.5 million of its 6.25% Subordinated Debentures due in 2042 and $150.0 million of its 6.00% Subordinated Debentures due in 2042. Non-Recourse Funding Obligations Golden Gate Captive Insurance Company On January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of PLICO, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of the Company, entered into an 18 -year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by PLICO and WCL, a direct wholly owned subsidiary of PLICO. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion . Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City Notes for the 18 -year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLICO, WCL and the Company, meaning that none of these companies, other than Golden Gate, are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. As of December 31, 2017 (Successor Company), the aggregate principal balance of the Steel City Notes was $2.014 billion . In connection with this transaction, the Company has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. The support agreements provide that amounts would become payable by the Company if Golden Gate’s annual general corporate expenses were higher than modeled amounts, certain reinsurance rates applicable to the subject business increase beyond modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, the Company has entered into a separate agreement to guarantee payment of certain fee amounts in connection with the credit enhancement of the Steel City Notes. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. In connection with the transaction outlined above, Golden Gate had a $2.014 billion outstanding non-recourse funding obligation as of December 31, 2017 (Successor Company). This non-recourse funding obligation matures in 2039 and accrues interest at a fixed annual rate of 4.75% . Golden Gate II Captive Insurance Company Golden Gate II Captive Insurance Company (“Golden Gate II”), a South Carolina special purpose financial captive insurance company and a wholly owned by PLICO, had $575 million of outstanding non-recourse funding obligations as of December 31, 2017 (Successor Company). These outstanding non-recourse funding obligations were issued to special purpose trusts, which in turn issued securities to third parties. Certain of our affiliates own a portion of these securities. As of December 31, 2017 (Successor Company), securities related to $58.6 million of the outstanding balance of the non-recourse funding obligations were held by external parties and securities related to $516.4 million of the non-recourse funding obligations were held by the Company and its affiliates. The Company has entered into certain support agreements with Golden Gate II obligating the Company to make capital contributions or provide support related to certain of Golden Gate II's expenses and in certain circumstances, to collateralize certain of the Company's obligations to Golden Gate II. These support agreements provide that amounts would become payable by the Company to Golden Gate II if its annual general corporate expenses were higher than modeled amounts or if Golden Gate II's investment income on certain investments or premium income was below certain actuarially determined amounts. As of December 31, 2017 (Successor Company), no payments have been made under these agreements, however, certain support agreement obligations to Golden Gate II of approximately $2.8 million have been collateralized by the Company. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreements. During the year ended December 31, 2017 (Successor Company), the Company and its affiliates did no t repurchase any of its outstanding non-recourse funding obligations. During the year ended December 31, 2016 the Company and its affiliates repurchased $86.3 million of its outstanding non-recourse funding obligations, at a discount. Golden Gate V Vermont Captive Insurance Company On October 10, 2012, Golden Gate V Vermont Captive Insurance Company ("Golden Gate V"), a Vermont special purpose financial insurance company, and Red Mountain, LLC ("Red Mountain"), both wholly owned subsidiaries of PLICO, entered into a 20 -year transaction to finance up to $945 million of "AXXX" reserves related to a block of universal life insurance policies with secondary guarantees issued by our direct wholly owned subsidiary PLICO and indirect wholly owned subsidiary, West Coast Life Insurance Company ("WCL"). Golden Gate V issued non-recourse funding obligations to Red Mountain, and Red Mountain issued a note with an initial principal amount of $275 million , increasing to a maximum of $945 million in 2027, to Golden Gate V for deposit to a reinsurance trust supporting Golden Gate V's obligations under a reinsurance agreement with WCL, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of PLICO. Through the structure, Hannover Life Reassurance Company of America ("Hannover Re"), the ultimate risk taker in the transaction, provides credit enhancement to the Red Mountain note for the 20 -year term in exchange for a fee. The transaction is "non-recourse" to Golden Gate V, Red Mountain, WCL, PLICO and the Company, meaning that none of these companies are liable for the reimbursement of any credit enhancement payments required to be made. As of December 31, 2017 (Successor Company), the principal balance of the Red Mountain note was $620 million . Future scheduled capital contributions to prefund credit enhancement fees amount to approximately $121.8 million and will be paid in annual installments through 2031. In connection with the transaction, the Company has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate V or Red Mountain. The support agreements provide that amounts would become payable by the Company if Golden Gate V's annual general corporate expenses were higher than modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, the Company has entered into separate agreements to indemnify Golden Gate V with respect to material adverse changes in non-guaranteed elements of insurance policies reinsured by Golden Gate V, and to guarantee payment of certain fee amounts in connection with the credit enhancement of the Red Mountain note. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. In connection with the transaction outlined above, Golden Gate V had a $620 million outstanding non-recourse funding obligation as of December 31, 2017 (Successor Company). This non-recourse funding obligation matures in 2037, has scheduled increases in principal to a maximum of $945 million , and accrues interest at a fixed annual rate of 6.25% . Non-recourse funding obligations outstanding as of December 31, 2017 (Successor Company), on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year Year-to-Date Weighted-Avg Interest Rate (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,014,000 $ 2,014,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 49,787 2052 3.88 % Golden Gate V Vermont Captive Insurance Company (2)(3) 620,000 681,285 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,405 2024 6.19 % Total $ 2,693,691 $ 2,747,477 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations Non-recourse funding obligations outstanding as of December 31, 2016 (Successor Company), on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year Year-to-Date Golden Gate Captive Insurance Company (2)(3) $ 2,116,000 $ 2,116,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 49,983 2052 2.52 % Golden Gate V Vermont Captive Insurance Company (2)(3) 565,000 628,025 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,466 2024 6.19 % Total $ 2,740,691 $ 2,796,474 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations Letters of Credit Golden Gate III Vermont Captive Insurance Company On April 23, 2010, Golden Gate III Vermont Captive Insurance Company ("Golden Gate III"), a Vermont special purpose financial insurance company and wholly owned subsidiary of PLICO, entered into a Reimbursement Agreement (the "Reimbursement Agreement") with UBS AG, Stamford Branch ("UBS"), as issuing lender. Under the Reimbursement Agreement, UBS issued a letter of credit (the "LOC") to a trust for the benefit of WCL. The Reimbursement Agreement has undergone three separate amendments and restatements. The Reimbursement Agreement's current effective date is June 25, 2014. The LOC balance reached its scheduled peak of $935 million in 2015. As of December 31, 2017 (Successor Company), the LOC balance was $885 million . The term of the LOC is expected to be approximately 15 years from the original issuance date. This transaction is "non-recourse" to WCL, PLICO, and the Company, meaning that none of these companies other than Golden Gate III are liable for reimbursement on a draw of the LOC. The Company has entered into certain support agreements with Golden Gate III obligating the Company to make capital contributions or provide support related to certain of Golden Gate III's expenses and in certain circumstances, to collateralize certain of the Company's obligations to Golden Gate III. Future scheduled capital contributions amount to approximately $70.0 million and will be paid in two installments with the last payment occurring in 2021. These contributions may be subject to potential offset against dividend payments as permitted under the terms of the Reimbursement Agreement. The support agreements provide that amounts would become payable by the Company to Golden Gate III if its annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate III. Pursuant to the terms of an amended and restated letter agreement with UBS, the Company has continued to guarantee the payment of fees to UBS as specified in the Reimbursement Agreement. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. Golden Gate IV Vermont Captive Insurance Company Golden Gate IV Vermont Captive Insurance Company (“Golden Gate IV”), a Vermont special purpose financial insurance company and wholly owned subsidiary of PLICO, is party to a Reimbursement Agreement with UBS AG, Stamford Branch, as issuing lender. Under the Reimbursement Agreement, dated December 10, 2010, UBS issued an LOC in the initial amount of $270 million to a trust for the benefit of WCL. Pursuant to the terms of the Reimbursement Agreement, the LOC reached its scheduled peak amount of $790 million in 2016. As of December 31, 2017 (Successor Company), the LOC balance was $ 785 million . The term of the LOC is expected to be 12 years from the original issuance date (stated maturity of December 30, 2022). The LOC was issued to support certain obligations of Golden Gate IV to WCL under an indemnity reinsurance agreement, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of PLICO. This transaction is “non-recourse” to WCL, PLICO, and the Company, meaning that none of these companies other than Golden Gate IV are liable for reimbursement on a draw of the LOC. The Company has entered into certain support agreements with Golden Gate IV obligating the Company to make capital contributions or provide support related to certain of Golden Gate IV’s expenses and in certain circumstances, to collateralize certain of the Company’s obligations to Golden Gate IV. The support agreements provide that amounts would become payable by the Company to Golden Gate IV if its annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate IV. The Company has also entered into a separate agreement to guarantee the payments of LOC fees under the terms of the Reimbursement Agreement. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. Secured Financing Transactions Repurchase Program Borrowings While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days . The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of December 31, 2017 (Successor Company), the fair value of securities pledged under the repurchase program was $1,006.6 million and the repurchase obligation of $885.0 million was included in the Company's consolidated balance sheets (at an average borrowing rate of 142 basis points). During the year ended December 31, 2017 (Successor Company), the maximum balance outstanding at any one point in time related to these programs was $988.5 million . The average daily balance was $624.7 million (at an average borrowing rate of 101 basis points, respectively) during the year ended December 31, 2017 (Successor Company). During the year ended December 31, 2016 (Successor Company), the maximum balance outstanding at any one point in time related to these programs was $1,065.8 million . The average daily balance was $505.4 million (at an average borrowing rate of 44 basis points) during the year ended December 31, 2016 (Successor Company). Securities Lending The Company participates in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. The Company requires initial collateral of 102% of the market value of the loaned securities to be separately maintained. The loaned securities’ market value is monitored on a daily basis. As of December 31, 2017 (Successor Company), securities with a market value of $125.3 million were loaned under this program. As collateral for the loaned securities, the Company receives short-term investments, which are recorded in “short-term investments” with a corresponding liability recorded in “secured financing liabilities” to account for its obligation to return the collateral. As of December 31, 2017 (Successor Company), the fair value of the collateral related to this program was $132.7 million and the Company has an obligation to return $132.7 million of collateral to the securities borrowers. The following table provides the fair value of collateral pledged for repurchase agreements, grouped by asset class, as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company): Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2017 (Successor Company) (Dollars In Thousands) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 307,633 $ — $ — $ — $ 307,633 Mortgage loans 698,974 — — — 698,974 Total repurchase agreements and repurchase-to-maturity transactions 1,006,607 — — — 1,006,607 Securities lending transactions Corporate securities 118,817 — — — 118,817 Equity securities 5,699 — — — 5,699 Redeemable preferred stock 755 — — — 755 Total securities lending transactions 125,271 — — — 125,271 Total securities $ 1,131,878 $ — $ — $ — $ 1,131,878 Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2016 (Successor Company) (Dollars In Thousands) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 357,705 $ 23,758 $ — $ — $ 381,463 Mortgage loans 480,269 — — — 480,269 Total securities $ 837,974 $ 23,758 $ — $ — $ 861,732 Interest Expense Interest expense is summarized as follows: Successor Company Predecessor Company For The Year Ended December 31, 2017 For The Year Ended December 31, 2016 February 1, 2015 to December 31, 2015 January 1, 2015 to January 31, 2015 (Dollars In Millions) (Dollars In Millions) Debt and subordinated debt securities $ 61.3 $ 62.1 $ 58.6 $ 8.9 Non-recourse funding obligations, other obligations, and repurchase agreements 171.9 163.7 54.1 4.9 Total interest expense $ 233.2 $ 225.8 $ 112.7 $ 13.8 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company has entered into indemnity agreements with each of its current directors other than those that are employees of Dai-ichi Life that provide, among other things and subject to certain limitations, a contractual right to indemnification to the fullest extent permissible under the law. The Company has agreements with certain of its officers providing up to $10 million in indemnification. These obligations are in addition to the customary obligation to indemnify officers and directors contained in the Company's governance documents. The Company leases administrative and marketing office space in approximately 16 cities (excluding the home office building), with most leases being for periods of three to ten years . The Company had rental expense of $7.8 million , $6.7 million , $6.3 million , and $0.6 million for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), for the period of February 1, 2015 to December 31, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. The aggregate annualized rent was approximately $7.8 million for the year ended December 31, 2017 (Successor Company). The following is a schedule by year of future minimum rental payments required under these leases: Year Amount (Dollars In Thousands) 2018 $ 4,562 2019 4,320 2020 4,044 2021 3,778 2022 3,520 Thereafter 8,945 Additionally, the Company leases a building contiguous to its home office. The lease was renewed in December 2013 and was extended to December 2018. At the end of the lease term the Company may purchase the building for approximately $75 million . Monthly rental payments are based on the current LIBOR rate plus a spread. The following is a schedule by year of future minimum rental payments required under this lease: Year Amount (Dollars In Thousands) 2018 $ 77,219 The following is a summary of the Company's estimated synthetic lease covenant calculations as of December 31, 2017 (Successor Company): Requirement Actual Results Consolidated net worth margin greater than or equal to $0 greater than $4 billion Debt to total capital ratio less than 40% less than 19% Total adjusted capital ratio greater than or equal to $0 greater than $3 billion Interest cash inflow available compared to adjusted consolidated interest expense greater than 2.0 to 1 greater than 9.0 to 1 As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company had outstanding mortgage loan commitments of $572.3 million at an average rate of 4.14% and $855.3 million at an average rate of 4.17% , respectively. Under the insurance guaranty fund laws in most states, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. From time to time, companies may be asked to contribute amounts beyond prescribed limits. It is possible that the Company could be assessed with respect to product lines not offered by the Company. In addition, legislation may be introduced in various states with respect to guaranty fund assessment laws related to insurance products, including long term care insurance and other specialty products, that increases the cost of future assessments or alters future premium tax offsets received in connection with guaranty fund assessments. The Company cannot predict the amount, nature or timing of any future assessments or legislation, any of which could have a material and adverse impact on the Company's financial condition or results of operations. A number of civil jury verdicts have been returned against insurers, broker-dealers, and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive and non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. The financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters. The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures and estimates of reasonably possible losses or range of loss based on such reviews. Certain of the Company’s insurance subsidiaries, as well as certain other insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including uncertainty as to the legal theory or theories that may give rise to liability, the early stages of the audits being conducted, and uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with certain co-insured policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits reasonably estimable. Certain of the Company’s subsidiaries are under a targeted multi-state examination with respect to their claims paying practices and their use of the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”) to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed, and substantial legal authority exists to support the position that the prevailing industry practice was lawful. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements. The Company believes that insurance regulators could demand from the Company administrative and/or examination fees relating to the targeted multi-state examination. Based on publicly reported payments by other life insurers, the Company does not believe such fees, if assessed, would have a material effect on its financial statements. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Beginning with the December 31, 2015 measurement, the Company changed its method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefits by applying a spot rate approach. Historically, the Company utilized a single weighted average discount rate derived from a selected yield curve used to measure the benefit obligation as of the measurement date. Under the new spot rate approach, the actual calculation of service and interest cost will reflect an array of spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot rates from the selected yield curve. This new approach does not affect the measurement of the total benefit obligation. Qualified Pension Plan and Nonqualified Excess Pension Plan The Company sponsors a the Qualified Pension Plan covering substantially all of its employees. Benefits are based on years of service and the employee's compensation. Effective January 1, 2008, the Company made the following changes to its Qualified Pension Plan. These changes have been reflected in the computations within this note. • Employees hired after December 31, 2007 and any former employee hired after that date, will receive a cash balance benefit. • Employees active on December 31, 2007, with age plus years of vesting service less than 55 years will receive a final pay-based pension benefit for service through December 31, 2007, plus a cash balance benefit for service after December 31, 2007. • Employees active on December 31, 2007, with age plus years of vesting service equaling or exceeding 55 years , will receive a final pay-based pension benefit for service both before and after December 31, 2007, with a modest reduction in the formula for benefits earned after December 31, 2007. • All participants terminating employment on or after December of 2007 may elect to receive a lump sum benefit. In 2016, the Company amended its Qualified Pension Plan to offer a limited-time opportunity of benefit payouts to eligible, terminated-vested participants (“lump sum window”). The lump sum window provided eligible, terminated-vested participants with an option to elect to receive a lump sum settlement of his or her pension benefit in December 2016 or to elect receipt of monthly pension benefits commencing in December 2016. This event triggered settlement accounting for the Company and resulted in the recognition of $0.9 million of settlement income for the twelve months ended December 31, 2016. The Company also sponsors the Nonqualified Excess Pension Plan, which is an unfunded nonqualified plan that provides defined pension benefits in excess of limits imposed on the Qualified Pension Plan by federal tax law. In 2016, the Board of Directors of Protective Life Corporation approved the conversion of the accrued benefit payable under the Nonqualified Excess Pension Plan as of March 31, 2016 to John D. Johns, the Company's Chairman and Chief Executive Officer at the time, into a lump sum amount. The lump sum amount is allocated to a book entry that will be treated as though it were a pay deferral account under the Company’s deferred compensation plan for officers. Mr. Johns will continue to accrue benefits as though he were accruing benefits under the Nonqualified Excess Pension Plan with respect to this continued service as an employee of the Company after March 31, 2016. The conversion event required the Company to re-measure the Nonqualified Excess Pension Plan as of May 31, 2016 and resulted in the recognition of $2.1 million in settlement expense during the twelve months ended December 31, 2016. The following table presents the benefit obligation, fair value of plan assets, funded status, and amounts not yet recognized as components of net periodic pension costs for the Company's defined benefit pension plan and unfunded excess benefit plan as of December 31, 2017 and 2016 (Successor Company): Successor Company December 31, 2017 December 31, 2016 Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Benefit Plan (Dollars In Thousands) Accumulated benefit obligation, end of year $ 278,084 $ 50,149 $ 247,595 $ 45,594 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 265,848 $ 47,802 $ 268,221 $ 56,985 Service cost 12,011 1,350 12,791 1,413 Interest cost 9,846 1,480 9,751 1,353 Amendments — — — — Actuarial (gain)/loss 26,539 7,861 5,988 4,124 Benefits paid (13,821 ) (3,903 ) (30,903 ) (16,073 ) Projected benefit obligation at end of year 300,423 54,590 265,848 47,802 Change in plan assets: Fair value of plan assets at beginning of year 201,843 — 196,042 — Actual return on plan assets 29,404 — 15,815 — Employer contributions (1) 43,500 3,903 20,889 16,073 Benefits paid (2) (13,821 ) (3,903 ) (30,903 ) (16,073 ) Fair value of plan assets at end of year 260,926 — 201,843 — After reflecting FASB guidance: Funded status (39,497 ) (54,590 ) (64,005 ) (47,802 ) Amounts recognized in the balance sheet: Other liabilities (39,497 ) (54,590 ) (64,005 ) (47,802 ) Amounts recognized in accumulated other comprehensive income: Net actuarial (gain)/loss 2,850 13,521 (7,855 ) 6,294 Prior service cost/(credit) — — — — Total amounts recognized in AOCI $ 2,850 $ 13,521 $ (7,855 ) $ 6,294 (1) Employer contributions disclosed are based on the Company's fiscal filing year (2) Includes amount related to Mr. Johns' conversion of his benefit under the Nonqualified Excess Pension Plan to a Retirement Pay Deferral Account as discussed above in Nonqualified Excess Pension Plan. Weighted-average assumptions used to determine benefit obligations as of December 31 are as follows: Successor Company Qualified Pension Plan Nonqualified Excess Pension Plan 2017 2016 2017 2016 Discount rate 3.55 % 4.04 % 3.26 % 3.60 % Rate of compensation increase 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above Weighted-average assumptions used to determine the net periodic benefit cost for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), and for the period of February 1, 2015 to December 31, 2015 (Successor Company) are as follows: Successor Company For The Year Ended December 31, 2017 2016 2015 2017 2016 2015 Qualified Pension Plan Nonqualified Excess Pension Plan Discount rate 4.04 % 4.29 % 3.95 % 3.60 % 3.63 % 3.65 % Rate of compensation increase 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above Expected long-term return on plan assets 7.00 % 7.25 % 7.50 % N/A N/A N/A The assumed discount rates used to determine the benefit obligations were based on an analysis of future benefits expected to be paid under the plans. The assumed discount rate reflects the interest rate at which an amount that is invested in a portfolio of high-quality debt instruments on the measurement date would provide the future cash flows necessary to pay benefits when they come due. To determine an appropriate long-term rate of return assumption, the Company obtained a 25 year annualized return for each of the represented asset classes. In addition, the Company received evaluations of market performance based on the Company's asset allocation as provided by external consultants. A combination of these statistical analytics provided results that the Company utilized to determine an appropriate long-term rate of return assumption. Components of the net periodic benefit cost for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016, for the period of February 1, 2015 to December 31, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company) are as follows: Successor Company Predecessor Company For The Year Ended December 31, February 1, 2015 January 1, 2015 2017 2017 2016 2016 Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan (Dollars In Thousands) (Dollars In Thousands) Service cost—benefits earned during the period $ 12,011 $ 1,350 $ 12,791 $ 1,413 $ 11,220 $ 1,229 $ 974 $ 95 Interest cost on projected benefit obligation 9,846 1,480 9,751 1,353 9,072 1,499 1,002 140 Expected return on plan assets (13,570 ) — (13,780 ) — (13,214 ) — (1,293 ) — Amortization of prior service cost/(credit) — — — — — — (33 ) 1 Amortization of actuarial loss/(gain) (1) — 634 — 178 — — 668 138 Preliminary net periodic benefit cost 8,287 3,464 8,762 2,944 7,078 2,728 1,318 374 Settlement/curtailment expense (2) — — (964 ) 2,135 — — — — Total net periodic benefit cost $ 8,287 $ 3,464 $ 7,798 $ 5,079 $ 7,078 $ 2,728 $ 1,318 $ 374 (1) 2017 average remaining service period used is 9.24 years and 8.23 years for the Qualified Pension Plan and Nonqualified Excess Pension Plan, respectively. (2) The Nonqualified Excess Pension Plan triggered settlement accounting for the year ended December 31, 2016 since the total lump sum payments exceeded the settlement threshold of service cost plus interest cost. For the Qualified Pension Plan, the Company does not expect to amortize any net actuarial loss/(gain) from other comprehensive income into net periodic benefit cost during 2018 since the net actuarial loss/(gain) subject to amortization is less than 10% of the greater of the smooth value of assets or the projected benefit obligation. For the unfunded excess benefit plan, the Company expects to amortize approximately $1.0 million of net actuarial loss from other comprehensive income into net periodic benefit cost during 2018. Estimated future benefit payments under the Qualified Pension Plan and Nonqualified Excess Pension Plan are as follows: Years Qualified Pension Plan Nonqualified Excess Pension Plan (Dollars In Thousands) 2018 $ 19,479 $ 3,542 2019 20,719 7,242 2020 21,062 6,087 2021 21,351 5,709 2022 23,537 6,267 2023 - 2027 116,400 23,324 Qualified Pension Plan Assets Allocation of plan assets of the Qualified Pension Plan by category as of December 31 are as follows: Successor Company Asset Category Target Allocation for 2018 2017 (1) 2016 Cash and cash equivalents 2 % 15 % 2 % Equity securities 60 55 61 Fixed income 38 30 37 Total 100 % 100 % 100 % (1) During 2017, the Company made a $43.5 million contribution to the defined benefit pension plan and allocated the contribution to cash and cash equivalents pending further analysis of its investment strategy. The plan's investment policy was amended to allow for an actual asset allocation outside of the current target allocation until the investment strategy analysis is complete. The Company anticipates completing this analysis during the first quarter of 2018. The Company's target asset allocation is designed to provide an acceptable level of risk and balance between equity assets and fixed income assets. The weighting towards equity securities is designed to help provide for an increased level of asset growth potential and liquidity. Prior to the amendment for the $43.5 million contribution made in 2017, the defined benefit pension plan had a target asset allocation of 60% domestic equities, 38% fixed income, and 2% cash. The Company's investment policy includes various guidelines and procedures designed to ensure assets are invested in a manner necessary to meet expected future benefits earned by participants. The investment guidelines consider a broad range of economic conditions. Central to the policy are target allocation ranges (shown above) by major asset categories. The objectives of the target allocations are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the plans' actuarial assumptions, and achieve asset returns that are competitive with like institutions employing similar investment strategies. The Company is currently performing an asset and liability study of its defined benefit pension plan and the associated investment portfolio to ensure that the current investment policy is appropriate for the plan. We anticipate this analysis being complete in the first quarter of 2018. The Qualified Pension Plan's equity assets are in a Russell 3000 index fund that invests in a domestic equity index collective trust managed by Northern Trust Corporation and in a Spartan 500 index fund managed by Fidelity. The Plan's cash is invested in a collective trust managed by Northern Trust Corporation. The plan's fixed income assets are invested in a group deposit administration annuity contract with PLICO. Plan assets of the Qualified Pension Plan by category as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Asset Category Cash and cash equivalents $ 39,897 $ 4,175 Equity securities: Collective Russell 3000 equity index fund 74,511 67,627 Fidelity Spartan 500 index fund 71,632 58,815 Fixed income 74,886 71,226 Total investments 260,926 201,843 Employer contribution receivable — — Total $ 260,926 $ 201,843 The valuation methodologies used to determine the fair values reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value. The Qualified Pension Plan's group deposit administration annuity contract with PLICO is recorded at contract value, which the Company believes approximates fair value. Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to purchase annuities (the plan has not purchased annuities on behalf of participants under this contract during the periods presented). Units in collective short-term and collective investment funds are valued at the unit value, which approximates fair value, as reported by the trustee of the collective short-term and collective investment funds on each valuation date. These methods of valuation may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value could result in a different fair value measurement at the reporting date. The following table sets forth by level, within the fair value hierarchy, the Qualified Pension Plan's assets at fair value as of December 31, 2017 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Collective short-term investment fund $ 39,897 $ — $ — $ 39,897 Collective investment funds: Equity index funds 71,632 74,511 — 146,143 Group deposit administration annuity contract — — 74,886 74,886 Total investments $ 111,529 $ 74,511 $ 74,886 $ 260,926 The following table sets forth by level, within the fair value hierarchy, the Qualified Pension Plan's assets at fair value as of December 31, 2016 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Collective short-term investment fund $ 4,175 $ — $ — $ 4,175 Collective investment funds: Equity index funds 58,815 67,627 — 126,442 Group deposit administration annuity contract — — 71,226 71,226 Total investments $ 62,990 $ 67,627 $ 71,226 $ 201,843 For the year ended December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), there were no transfers between levels. The following table summarizes the Qualified Pension Plan investments measured at fair value based on NAV per share as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), respectively: Name Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period (Dollars In Thousands) Successor Company As of December 31, 2017: Collective short-term investment fund $ 39,897 Not Applicable Daily 1 day Collective Russell 3000 index fund (1) 74,511 Not Applicable Daily 1 day Fidelity Spartan 500 index fund 71,632 Not Applicable Daily 1 day As of December 31, 2016: Collective short-term investment fund $ 4,175 Not Applicable Daily 1 day Collective Russell 3000 index fund (1) 67,627 Not Applicable Daily 1 day Fidelity Spartan 500 index fund 58,815 Not Applicable Daily 1 day (1) Non-lending collective trust that does not publish a daily NAV but tracks the Russell 3000 index and provides a daily NAV to the Plan. The following table presents a reconciliation of the beginning and ending balances for the fair value measurements for the year ended December 31, 2017 (Successor Company) and for the year ended December 31, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3): Successor Company December 31, 2017 December 31, 2016 (Dollars In Thousands) Balance, beginning of year $ 71,226 $ 67,707 Interest income 3,660 3,519 Transfers from collective short-term investments fund — — Transfers to collective short-term investments fund — — Balance, end of year $ 74,886 $ 71,226 The following table represents the Plan's Level 3 financial instrument, the valuation technique used, and the significant unobservable input and the ranges of values for that input as of December 31, 2017 (Successor Company): Instrument Fair Value Principal Valuation Technique Significant Unobservable Inputs Range of Significant Input Values (Dollars In Thousands) Group deposit administration annuity contract $ 74,886 Contract Value Contract Rate 5.10% - 5.19% Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term could materially affect the amounts reported. Qualified Pension Plan Funding Policy The Company's funding policy is to contribute amounts to the Qualified Pension Plan sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act ("ERISA") plus such additional amounts as the Company may determine to be appropriate from time to time. Contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. Under the Pension Protection Act of 2006 ("PPA"), a plan could be subject to certain benefit restrictions if the plan's adjusted funding target attainment percentage ("AFTAP") drops below 80% . Therefore, the Company may make additional contributions in future periods to maintain an AFTAP of at least 80% . In general, the AFTAP is a measure of how well a plan is funded and is obtained by dividing a plan's assets by its funding liabilities. AFTAP is based on participant data, plan provisions, plan methods and assumptions, funding credit balances, and plan assets as of the plan valuation date. Some of the assumptions and methods used to determine a plan's AFTAP may be different from the assumptions and methods used to measure a plan's funded status on a GAAP basis. In July of 2012, the Moving Ahead for Progress in the 21st Century Act ("MAP-21"), which includes pension funding stabilization provisions, was signed into law. These provisions establish an interest rate corridor which is designed to stabilize the segment rates used to determine funding requirements from the effects of interest rate volatility. In August of 2014, the Highway and Transportation Funding Act of 2014 ("HATFA") was signed into law. HAFTA extends the funding relief provided by MAP-21 by delaying the interest rate corridor expansion. The funding stabilization provisions of MAP-21 and HATFA reduced the Company's minimum required Qualified Pension Plan contributions for the 2013 and 2014 plan years. Since the funding stabilization provisions of MAP-21 and HATFA do not apply for Pension Benefit Guaranty Corporation ("PBGC") reporting purposes, the Company may also make additional contributions in future periods to avoid certain PBGC reporting triggers. During the twelve months ended December 31, 2017 (Successor Company), the Company contributed $43.5 million to the Qualified pension plan for the 2016 plan year. The Company has not yet determined what amount it will fund during 2018, but may contribute an amount that would eliminate the PGBC variable-rate premiums payable in 2018. The Company currently estimates that amount will be between $10 million and $20 million . Other Postretirement Benefits In addition to pension benefits, the Company provides limited healthcare benefits to eligible retired employees until age 65 . This postretirement benefit is provided by an unfunded plan. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the accumulated postretirement benefit obligation and projected benefit obligation were immaterial. For a closed group of retirees over age 65 , the Company provides a prescription drug benefit. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company's liability related to this benefit was immaterial. The Company also offers life insurance benefits for retirees from $10,000 up to a maximum of $75,000 which are provided through the payment of premiums under a group life insurance policy. This plan is partially funded at a maximum of $50,000 face amount of insurance. The benefit obligation associated with these benefits is as follows: Successor Company Postretirement Life Insurance Plan As of December 31, 2017 As of December 31, 2016 (Dollars In Thousands) Change in Benefit Obligation Benefit obligation, beginning of year $ 9,634 $ 9,063 Service cost 122 102 Interest cost 354 338 Actuarial (gain)/loss 1,347 604 Benefits paid (479 ) (473 ) Benefit obligation, end of year $ 10,978 $ 9,634 For the postretirement life insurance plan, the Company's discount rate assumption used to determine the benefit obligation and the net periodic benefit cost as of December 31, 2017 (Successor Company), is 3.74% and 4.35% , respectively. The Company's expected long-term rate of return assumption used to determine the net periodic benefit cost as of December 31, 2017 (Successor Company), is 2.75% . To determine an appropriate long-term rate of return assumption, the Company utilized 25 year average and annualized return results on the Barclay's short treasury index. Investments of the Company's group life insurance plan are held by Wells Fargo Bank, N.A. Plan assets held by the Custodian are invested in a money market fund. The fair value of each major category of plan assets for the Company's postretirement life insurance plan is as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Category of Investment Money market fund $ 5,104 $ 5,362 Investments are stated at fair value and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The money market funds are valued based on historical cost, which represents fair value, at year end. This method of valuation may produce a fair value calculation that may not be reflective of future fair values. Furthermore, while the Company believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value could result in a different fair value measurement at the reporting date. The following table sets forth by level, within the fair value hierarchy, the life insurance plan's assets at fair value as of December 31, 2017 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Money market fund $ 5,104 $ — $ — $ 5,104 The following table sets forth by level, within the fair value hierarchy, the life insurance plan's assets at fair value as of December 31, 2016 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Money market fund $ 5,362 $ — $ — $ 5,362 For the year ended December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), there were no transfers between levels. Investments are exposed to various risks, such as interest rate and credit risks. Due to the level of risk associated with investments and the level of uncertainty related to credit risks, it is at least reasonably possible that changes in risk in the near term could materially affect the amounts reported. 401(k) Plan The Company sponsors a tax-qualified 401(k) Plan ("401 (k) Plan") which covers substantially all employees. Employee contributions are made on a before-tax basis as provided by Section 401(k) of the Internal Revenue Code or as after-tax "Roth" contributions. Employees may contribute up to 25% of their eligible annual compensation to the 401(k) Plan, limited to a maximum annual contribution amount as set periodically by the Internal Revenue Service ( $18,000 for 2017 ). The Plan also provides a "catch-up" contribution provision which permits eligible participants (age 50 or over at the end of the calendar year), to make additional contributions that exceed the regular annual contribution limits up to a limit periodically set by the Internal Revenue Service ( $6,000 for 2017 ). The Company matches the sum of all employee contributions dollar for dollar up to a maximum of 4% of an employee's pay per year per person. All matching contributions vest immediately. For the year ended December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company recorded an expense of $8.2 million and $7.5 million associated with 401(k) Plan matching contributions, respectively. The Company also has a supplemental matching contribution program, which is a nonqualified plan that provides supplemental matching contributions in excess of the limits imposed on qualified defined contribution plans by federal tax law. The expense recorded by the Company for this employee benefit was $1.1 million , $0.6 million , and $0.5 million , respectively, in 2017 , 2016 , and 2015 . Deferred Compensation Plan On February 1, 2015, the Company became a wholly owned subsidiary of Dai-ichi Life and the Company stock ceased to be publicly traded. Thus, any common stock equivalents within the plans converted into rights to receive the merger consideration of $70.00 per common stock equivalent. As of February 1, 2015, the Company has continued the deferred compensation plans for officers and others. Compensation deferred was credited to the participants in cash, mutual funds, or a combination thereof. As of December 31, 2017 (Successor Company), the Company's obligations related to its deferred compensation plans are reported in other liabilities. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables summarize the changes in the accumulated balances for each component of AOCI as of December 31, 2017 (Successor Company), December 31, 2016 (Successor Company), December 31, 2015 (Successor Company), and January 31, 2015 (Predecessor Company). Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Pension Benefits Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) Other comprehensive income (loss) before reclassifications 700,536 (563 ) (15,726 ) 684,247 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings 7,153 — — 7,153 Amounts reclassified from accumulated other comprehensive income (loss) (1) 642 451 501 1,594 Net current-period other comprehensive income (loss) 708,331 (112 ) (15,225 ) 692,994 Cumulative effect adjustments (26,135 ) 132 228 (25,775 ) Ending Balance, December 31, 2017 $ 25,874 $ 747 $ (13,925 ) $ 12,696 (1) See Reclassification table below for details. (2) As of December 31, 2016 (Successor Company) and December 31, 2017 (Successor Company), net unrealized losses reported in AOCI were offset by $424.1 million and $(6.3) million , respectively, due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Pension Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2015 $ (1,247,065 ) $ — $ 5,931 $ (1,241,134 ) Other comprehensive income (loss) before reclassifications 606,985 688 (5,659 ) 602,014 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (6,782 ) — — (6,782 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (9,460 ) 39 800 (8,621 ) Net current-period other comprehensive income (loss) 590,743 727 (4,859 ) 586,611 Ending Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 (Successor Company) and December 31, 2016 (Successor Company), net unrealized losses reported in AOCI were offset by $623.0 million and $424.1 million , respectively, due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Postretirement Benefits Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, February 1, 2015 $ — $ — $ — $ — Other comprehensive income (loss) before reclassifications (1,264,034 ) (86 ) 5,931 (1,258,189 ) Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (393 ) — — (393 ) Amounts reclassified from accumulated other comprehensive income (loss)(1) 17,362 86 — 17,448 Net current-period other comprehensive income (loss) (1,247,065 ) — 5,931 (1,241,134 ) Ending Balance, December 31, 2015 $ (1,247,065 ) $ — $ 5,931 $ (1,241,134 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 , net unrealized losses reported in AOCI were offset by $623.0 million , due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Predecessor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Postretirement Benefits Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2014 $ 1,484,169 $ (82 ) $ (66,011 ) $ 1,418,076 Other comprehensive income (loss) before reclassifications 482,370 9 (12,527 ) 469,852 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (243 ) — — (243 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (4,166 ) 23 502 (3,641 ) Net current-period other comprehensive income (loss) 477,961 32 (12,025 ) 465,968 Ending Balance, January 31, 2015 $ 1,962,130 $ (50 ) $ (78,036 ) $ 1,884,044 (1) See Reclassification table below for details. (2) As of January 31, 2015 and December 31, 2014, net unrealized losses reported in AOCI were offset by $(492.6) million and $(504.4) million , respectively, due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. The following tables summarize the reclassifications amounts out of AOCI for the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company). Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (694 ) Benefits and settlement expenses, net of reinsurance ceded (694 ) Total before tax 243 Tax (expense) or benefit $ (451 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 10,611 Realized investment gains (losses): All other investments Impairments recognized in earnings (11,742 ) Net impairment losses recognized in earnings (1,131 ) Total before tax 489 Tax (expense) or benefit $ (642 ) Net of tax Pension benefits liability adjustment Amortization of net actuarial gain/(loss) $ (634 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (634 ) Total before tax 133 Tax (expense) or benefit $ (501 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Successor Company For The Year ended December 31, 2016 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (60 ) Benefits and settlement expenses, net of reinsurance ceded (60 ) Total before tax 21 Tax (expense) or benefit $ (39 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 32,302 Realized investment gains (losses): All other investments Impairments recognized in earnings (17,748 ) Net impairment losses recognized in earnings 14,554 Total before tax (5,094 ) Tax (expense) or benefit $ 9,460 Net of tax Postretirement benefits liability adjustment Amortization of net actuarial gain/(loss) $ (1,231 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (1,231 ) Total before tax 431 Tax (expense) or benefit $ (800 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Successor Company February 1, 2015 to December 31, 2015 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (131 ) Benefits and settlement expenses, net of reinsurance ceded (131 ) Total before tax 45 Tax (expense) or benefit $ (86 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 281 Realized investment gains (losses): All other investments Impairments recognized in earnings (26,992 ) Net impairment losses recognized in earnings (26,711 ) Total before tax 9,349 Tax (expense) or benefit $ (17,362 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Predecessor Company January 1, 2015 to January 31, 2015 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (36 ) Benefits and settlement expenses, net of reinsurance ceded (36 ) Total before tax 13 Tax (expense) or benefit $ (23 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 6,891 Realized investment gains (losses): All other investments Impairments recognized in earnings (481 ) Net impairment losses recognized in earnings 6,410 Total before tax (2,244 ) Tax (expense) or benefit $ 4,166 Net of tax Pension benefits liability adjustment Amortization of net actuarial gain/(loss) $ (808 ) Other operating expenses Amortization of prior service credit/(cost) 31 Other operating expenses Amortization of transition asset/(obligation) 5 Other operating expenses (772 ) Total before tax 270 Tax (expense) or benefit $ (502 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rate related to continuing operations varied from the maximum federal income tax rate as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 Statutory federal income tax rate applied to pre-tax income 35.0 % 35.0 % 35.0 % 35.0 % State income taxes 0.6 0.8 2.0 0.8 Investment income not subject to tax (5.0 ) (2.7 ) (4.3 ) (3.2 ) Uncertain tax positions (0.2 ) (0.3 ) 0.2 (0.1 ) Federal Tax law changes (183.3 ) — — — Other (1.4 ) 1.0 — (0.1 ) (154.3 )% 33.8 % 32.9 % 32.4 % The annual provision for federal income tax in these financial statements differs from the annual amounts of income tax expense reported in the Company's income tax returns. Certain significant revenues and expenses are appropriately reported in different years with respect to the financial statements and the tax returns. The components of the Company's income tax are as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Current income tax expense: Federal $ 21,853 $ (50,638 ) $ 5,715 $ (32,803 ) State 4,399 3,919 (4,244 ) 1,685 Total current $ 26,252 $ (46,719 ) $ 1,471 $ (31,118 ) Deferred income tax expense: Federal $ (693,860 ) $ 240,127 $ 118,338 $ 30,858 State (3,867 ) 7,560 11,734 (67 ) Total deferred $ (697,727 ) $ 247,687 $ 130,072 $ 30,791 The components of the Company's net deferred income tax liability are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Deferred income tax assets: Loss and credit carryforwards $ 209,401 $ 453,880 Deferred compensation 138,945 209,979 Deferred policy acquisition costs 23,876 156,012 Premium on corporate debt 57,402 104,839 Net unrealized loss on investments — 353,448 Other 28,179 44,956 Valuation allowance (3,951 ) (6,007 ) 453,852 1,317,107 Deferred income tax liabilities: Premium receivables and policy liabilities 573,469 884,255 VOBA and other intangibles 433,321 720,750 Invested assets (other than unrealized gains (losses)) 672,549 1,311,866 Net unrealized gains on investments 6,920 — 1,686,259 2,916,871 Net deferred income tax liability $ (1,232,407 ) $ (1,599,764 ) The deferred tax assets reported above include certain deferred tax assets related to nonqualified deferred compensation and other employee benefit liabilities that were assumed by AXA and they were not acquired by the Company in connection with the acquisition of MONY. The future tax deductions stemming from these liabilities will be claimed by the Company on MONY's tax returns in its post-acquisition periods. These deferred tax assets have been estimated as of the MONY Acquisition date (and through the December 31, 2017 reporting date) based on all available information. However, it is possible that these estimates may be adjusted in future reporting periods based on actuarial changes to the projected future payments associated with these liabilities. Any such adjustments will be recognized by the Company as an adjustment to income tax expense during the period in which they are realized. On December 22, 2017, the President of the United States signed into law the Tax Reform Act. The legislation significantly changes U.S. tax law by, among other things, lowering the corporate income tax rate. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% and changes to tax law related to the deductibility of certain deferred tax assets under the Tax Reform Act, we revalued our ending net deferred tax liabilities at December 31, 2017, and recognized a provisional $797.6 million tax benefit in our consolidated statement of income for the year ended December 31, 2017. Also on December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impacts based on reasonable estimates made by the Company as to the effects of tax reform on deferred assets as discussed below and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional regulatory guidance that may be issued, additional analysis, and resulting changes in interpretations and assumptions the Company has made. Any adjustments to these provisional amounts will be reported as a component of income tax expense (benefit) in the reporting period in which any such adjustments are determined. The Company will not extend the measurement period beyond December 22, 2018. As a result of the Tax Reform Act, compensation paid to our covered employees in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain written binding arrangements that were in place as of November 2, 2017 and that have not been materially modified after such date. Because of ambiguities and uncertainties as to the application and interpretation of Section 162(m), including the uncertain application of transition relief to companies that had not been subject to Section 162(m) prior to the effectiveness of the Tax Reform Act, it is unclear whether or to what extent the deferred tax assets related to amounts paid or payable by the Company to covered employees after January 1, 2018 pursuant to written binding arrangements that were in place on November 2, 2017 will be subject to the $1 million dollar deduction limit of Section 162(m). In management's judgment, the gross deferred income tax asset as of December 31, 2017 (Successor Company) will more likely than not be fully realized. The Company has recognized a valuation allowance of $5.0 million and $9.2 million as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), respectively, related to state-based loss carryforwards that it has determined are more likely than not to expire unutilized. This resulting favorable change of $4.2 million , before federal income taxes, decreased state income tax expense in 2017 by the same amount. At December 31, 2017 (Successor Company), the Company has non-life net operating loss carryforwards for federal income tax purposes of $259.6 million , which are available to offset future non-life group federal taxable income (and life group taxable income with limitations) and begin to expire in 2035. The Company also has life net operating loss carryforwards for federal income tax purposes of $578.3 million which are available to offset both future life group taxable income and non-life group taxable income through 2031. Alternative minimum tax credits of $8.9 million are available to offset regular tax beginning in 2018, as a result of The Tax Reform Act, with any remaining credits being fully refundable beginning in 2021. Foreign tax credits of $7.2 million are available to offset both future life group income tax and non-life group income tax and will begin to expire in 2024. Research and Development credits of $1.2 million are available to offset both future life group income tax and non-life group income tax and will begin to expire in 2036. In addition, included in the deferred income tax assets above are approximately $22.8 million in state net operating loss carryforwards attributable to certain jurisdictions, which are available to offset future tax in the respective state jurisdictions, expiring between 2018 and 2036. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), some of the Company's fixed maturities were reported at an unrealized loss, although the net amount is an unrealized gain at December 31, 2017 (Successor Company). If the Company were to realize a tax-basis net capital loss for a year, then such loss could not be deducted against that year's other taxable income. However, such a loss could be carried back and forward against any prior year or future year tax-basis net capital gains. Therefore, the Company has relied upon a prudent and feasible tax-planning strategy regarding its fixed maturities that were reported at an unrealized loss. The Company has the ability and the intent to either hold such fixed maturities to maturity, thereby avoiding a realized loss, or to generate an offsetting realized gain from unrealized gain fixed maturities if such unrealized loss fixed maturities are sold at a loss prior to maturity. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Successor Company Predecessor Company As of As of December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Balance, beginning of period $ 9,856 $ 13,138 $ 137,593 $ 193,244 Additions for tax positions of the current year 1,857 2,122 2,213 (5,010 ) Additions for tax positions of prior years 70 1,318 1,811 7,724 Reductions of tax positions of prior years: Changes in judgment (430 ) (975 ) (16,416 ) (58,365 ) Settlements during the period — (5,747 ) (112,063 ) — Lapses of applicable statute of limitations — — — — Balance, end of period $ 11,353 $ 9,856 $ 13,138 $ 137,593 Included in the end of period balance above, as of December 31, 2017 (Successor Company), December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), are approximately $0.7 million , $0.7 million , $5.6 million , and $126.0 million of unrecognized tax benefits, respectively, for which the ultimate deductibility is certain but for which there is uncertainty about the timing of such deductions. Other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective income tax rate but would accelerate to an earlier period the payment of cash to the taxing authority. The total amount of unrecognized tax benefits, if recognized, that would affect the effective income tax rate is approximately $10.7 million , $9.2 million , $7.5 million , and $11.5 million for the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. Any accrued interest related to the unrecognized tax benefits and other accrued income taxes have been included in income tax expense. These amounts were a $2.4 million benefit, a $3.1 million benefit, a $1.6 million detriment, and a $0.9 million benefit for the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. The Company has approximately $1.1 million , $2.8 million , $15.4 million , and $12.7 million of accrued interest associated with unrecognized tax benefits as of December 31, 2017 (Successor Company), as of December 31, 2016 (Successor Company), as of December 31, 2015 (Successor company), and as of January 31, 2015 (Predecessor Company), respectively (before taking into consideration the related income tax benefit that is associated with such an expense). In June 2012, the IRS proposed favorable and unfavorable adjustments to the Company’s 2003 through 2007 reported taxable incomes. The Company protested certain unfavorable adjustments and sought resolution at the IRS’ Appeals Division. In October 2015, Appeals accepted the Company’s earlier proposed settlement offer. In September 2015, the IRS proposed favorable and unfavorable adjustments to the Company’s 2008 through 2011 reported taxable income. The Company agreed to these adjustments. In April 2017, a routine review by Congress' Joint Committee on Taxation was finalized without change and the Company received an approximate $6.2 million net refund in the fourth quarter of 2017. The resulting net adjustment to the Company’s current income taxes for the years 2003 through 2011 did not materially affect the Company or its effective tax rate. In July 2016, the IRS proposed favorable and unfavorable adjustments to the Company's 2012 and 2013 reported taxable income. The Company agreed to these adjustments. The resulting settlement paid in September 2016 did not materially impact the Company or its effective tax rate. These agreements with the IRS are the primary cause for the reductions of unrecognized tax benefits shown in the above chart. The Company believes that in the next 12 months, $0.7 million of the unrecognized tax benefits will be reduced due to recent changes in tax law. In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2014. Due to the aforementioned IRS adjustments to the Company's pre-2014 taxable income, the Company is amending certain of its 2003 through 2013 state income tax returns. Such amendments will cause such years to remain open, pending the states' acceptances of the returns. During the year ended December 31, 2016 (Successor Company), the Company filed a non-automatic tax accounting method change related to income recognition for unearned premium reserve and discounted loss reserve for claims incurred. The IRS accepted the Company's request for the non-automatic tax accounting method. This change did not materially impact the Company or its effective tax rate. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table sets forth supplemental cash flow information: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Cash paid / (received) during the year: Interest on debt $ 253,708 $ 234,928 $ 124,829 $ 22,802 Income taxes (14,163 ) 112,886 (53,486 ) (1 ) Noncash investing and financing activities: Stock-based compensation — — — 1,550 Total cash interest paid on debt for the year ended December 31, 2017 (Successor Company), was $253.7 million . Of this amount, $58.7 million related to interest on debt, $20.2 million related to interest on subordinated debt, $6.3 million on repurchase agreements, and $168.5 million related to non-recourse funding obligations and other obligations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Certain corporations with which the Company's directors were affiliated paid us premiums and policy fees or other amounts for various types of insurance and investment products, interest on bonds we own and commissions on securities underwriting in which our affiliates participated. Such amounts totaled $6.8 million , $7.2 million , $45.3 million , and $2.6 million , for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. The Company paid commissions, interest on debt and investment products, and fees to these same corporations totaling $6.5 million , $8.6 million , $10 million , and $0.8 million for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. Prior to the Merger, the Company had no related party transactions with Dai-ichi Life. During the periods ending December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company paid a management fee to Dai-ichi Life of $10.9 million and $6.4 million for certain services provided to the Company, respectively. The Company paid $143.8 million and $89.3 million of dividends during the year ended December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), respectively, to its parent, Dai-ichi Life. The Company has guaranteed PLICO's obligations for borrowings or letters of credit under the revolving line of credit arrangement to which the Company is also a party. The Company has also issued guarantees, entered into support agreements and/or assumed a duty to indemnify its indirect wholly owned captive insurance companies in certain respects. The Company guarantees the obligations of PLICO under a synthetic lease entered into by PLICO, as lessee, with a non-affiliated third party, as lessor. Under the terms of the synthetic lease, financing of $75 million was available to PLICO for construction of an office building and parking deck which was completed on February 1, 2000. The synthetic lease was amended and restated as of December 19, 2013, wherein as of December 31, 2017 , the Company continues to guarantee the obligations of PLICO thereunder. The Company has agreements with certain of its subsidiaries under which it supplies investment, legal and data processing services on a fee basis and provides other managerial and administrative services on a shared cost basis. Such other managerial and administrative services include but are not limited to accounting, financial reporting, compliance services, reinsurance administration, tax reporting, reserve computation, and projections. The Company has an intercompany capital support agreement with Shades Creek Captive Insurance Company ("Shades Creek"), a direct wholly owned subsidiary. The agreement provides through a guarantee that the Company will contribute assets or purchase surplus notes (or cause an affiliate or third party to contribute assets or purchase surplus notes) in amounts necessary for Shades Creek's regulatory capital levels to equal or exceed minimum thresholds as defined by the agreement. As of December 31, 2017 (Successor Company), Shades Creek maintained capital levels in excess of the required minimum thresholds. The maximum potential future payment amount which could be required under the capital support agreement will be dependent on numerous factors, including the performance of equity markets, the level of interest rates, performance of associated hedges, and related policyholder behavior. |
STATUTORY REPORTING PRACTICES A
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2017 | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS The Company's insurance subsidiaries prepare statutory financial statements for regulatory purposes in accordance with accounting practices prescribed by the NAIC and the applicable state insurance department laws and regulations. These financial statements vary materially from GAAP. Statutory accounting practices include publications of the NAIC, state laws, regulations, general administrative rules as well as certain permitted accounting practices granted by the respective state insurance department. Generally, the most significant differences are that statutory financial statements do not reflect 1) deferred acquisition costs and VOBA, 2) benefit liabilities that are calculated using Company estimates of expected mortality, interest, and withdrawals, 3) deferred income taxes that are not subject to statutory limits, 4) recognition of realized gains and losses on the sale of securities in the period they are sold, and 5) fixed maturities recorded at fair values, but instead at amortized cost. Statutory net income (loss) for PLICO was $731.2 million , $(391.6) million , and $440 million for the year ended December 31, 2017 , 2016 and 2015 , respectively. Statutory capital and surplus for PLICO was $4.3 billion and $4.2 billion as of December 31, 2017 and 2016 , respectively. The Statutory net loss incurred by PLICO for the year ended December 31, 2016 was caused by the required Statutory accounting treatment of the initial gain recognized on the retrocession of the term business assumed from Genworth Life and Annuity Insurance Company to Golden Gate Captive Insurance Company, which resulted in approximately a $1.2 billion gain being included as a component of surplus, rather than reflected in Statutory net income as of the January 15, 2016 cession date. The Company's insurance subsidiaries are subject to various state statutory and regulatory restrictions on the insurance subsidiaries' ability to pay dividends to Protective Life Corporation. In general, dividends up to specified levels are considered ordinary and may be paid without prior approval of the insurance commissions of the state of domicile. Dividends in larger amounts are considered extraordinary and are subject to prior approval by such commissioner. The maximum amount that would qualify as ordinary dividends to the Company from our insurance subsidiaries, and which would consequently be free from restriction and available for the payment of dividends to the Company's shareowner in 2018 is approximately $853.2 million . This results in approximately $6.3 billion of the Company's net assets being restricted from transfer to PLC without prior approval from the respective state insurance department. State insurance regulators and the National Association of Insurance Commissioners ("NAIC") have adopted risk-based capital ("RBC") requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. A company's risk-based statutory surplus is calculated by applying factors and performing calculations relating to various asset, premium, claim, expense and reserve items. Regulators can then measure the adequacy of a company's statutory surplus by comparing it to the RBC. Under specific RBC requirements, regulatory compliance is determined by the ratio of a company's total adjusted capital, as defined by the insurance regulators, to its company action level of RBC (known as the RBC ratio), also as defined by insurance regulators. As of December 31, 2017 , the Company's total adjusted capital and company action level RBC were approximately $4.7 billion and $759.3 million , respectively, providing an RBC ratio of approximately 614% . Additionally, the Company has certain assets that are on deposit with state regulatory authorities and restricted from use. As of December 31, 2017 , the Company's insurance subsidiaries had on deposit with regulatory authorities, fixed maturity and short-term investments with a fair value of approximately $42.4 million . The states of domicile of the Company's insurance subsidiaries have adopted prescribed accounting practices that differ from the required accounting outlined in NAIC Statutory Accounting Principles ("SAP"). The insurance subsidiaries also have certain accounting practices permitted by the states of domicile that differ from those found in NAIC SAP. Certain prescribed practices impact the statutory surplus of PLICO, the Company's primary operating subsidiary. These practices include the non-admission of goodwill as an asset for statutory reporting. The favorable (unfavorable) effects of PLICO's statutory surplus, compared to NAIC statutory surplus, from the use of this prescribed practices was as follows: As of December 31, 2017 2016 (Dollars In Millions) Non-admission of goodwill $ (219 ) $ (257 ) Total (net) $ (219 ) $ (257 ) The Company also has certain prescribed and permitted practices which are applied at the subsidiary level and do not have a direct impact on the statutory surplus of PLICO. These practices include permission to follow the actuarial guidelines of the domiciliary state of the ceding insurer for certain captive reinsurers, accounting for the face amount of all issued, and outstanding letters of credit and a note issued by an affiliate as assets in the statutory financial statements of certain wholly owned subsidiaries that are considered "Special Purpose Financial Captives", and a reserve difference related to a captive insurance company. The favorable (unfavorable) effects on the statutory surplus of the Company's insurance subsidiaries, compared to NAIC statutory surplus, from the use of these prescribed and permitted practices were as follows: As of December 31, 2017 2016 (Dollars In Millions) Accounting for Letters of Credit as admitted assets $ 1,670 $ 1,720 Accounting for certain notes as admitted assets $ 2,634 $ 2,681 Reserving based on state specific actuarial practices $ 122 $ 120 Reserving difference related to a captive insurance company $ (37 ) $ (109 ) |
OPERATING SEGMENTS
OPERATING SEGMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The Company has several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. The Company periodically evaluates its operating segments and makes adjustments to its segment reporting as needed. A brief description of each segment follows. • The Life Marketing segment markets fixed UL, IUL, VUL, BOLI, and level premium term insurance (“traditional”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent distribution organizations, and affinity groups. • The Acquisitions segment focuses on acquiring, converting, and servicing policies and contracts acquired from other companies. The segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. The level of the segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed. Therefore earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made. • The Annuities segment markets fixed and VA products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers. • The Stable Value Products segment sells fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. This segment also issues funding agreements to the FHLB, and markets GICs to 401(k) and other qualified retirement savings plans. The Company also has an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors. • The Asset Protection segment markets extended service contracts, GAP products, credit life and disability insurance, and other specialized ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft, and powersports. GAP covers the difference between the loan pay-off amount and an asset’s actual cash value in the case of a total loss. Each type of specialized ancillary product protects against damage or other loss to a particular aspect of the underlying asset. • The Corporate and Other segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead and expenses not attributable to the segments above (including interest on corporate debt). This segment includes earnings from several non-strategic or runoff lines of business, various financing and investment related transactions, and the operations of several small subsidiaries. The Company's management and Board of Directors analyzes and assesses the operating performance of each segment using "pre-tax adjusted operating income (loss)" and "after-tax adjusted operating income (loss)". Consistent with GAAP accounting guidance for segment reporting, pre-tax adjusted operating income (loss) is the Company's measure of segment performance. Pre-tax adjusted operating income (loss) is calculated by adjusting "income (loss) before income tax," by excluding the following items: • realized gains and losses on investments and derivatives, • changes in the GLWB embedded derivatives exclusive of the portion attributable to the economic cost of the GLWB, • actual GLWB incurred claims, and • the amortization of DAC, VOBA, and certain policy liabilities that is impacted by the exclusion of these items. The items excluded from adjusted operating income (loss) are important to understanding the overall results of operations. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) are not substitutes for income before income taxes or net income (loss), respectively. These measures may not be comparable to similarly titled measures reported by other companies. The Company believes that pre-tax and after-tax adjusted operating income (loss) enhances management's and the Board of Directors' understanding of the ongoing operations, the underlying profitability of each segment, and helps facilitate the allocation of resources. After-tax adjusted operating income (loss) is derived from pre-tax adjusted operating income (loss) with the inclusion of income tax expense or benefits associated with pre-tax adjusted operating income. Income tax expense or benefits is allocated to the items excluded from pre-tax adjusted operating income (loss) at the statutory federal income tax rate for the associated period. For periods ending on and prior to December 31, 2017, a rate of 35% was used. Beginning in 2018, a statutory federal income tax rate of 21% will be used to allocate income tax expense or benefits to items excluded from pre-tax adjusted operating income (loss). Income tax expense or benefits allocated to after-tax adjusted operating income (loss) can vary period to period based on changes in the Company's effective income tax rate. In determining the components of the pre-tax adjusted operating income (loss) for each segment, premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC and VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized investment gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on statutory policy liabilities net of associated statutory policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable. During 2016, the Company modified its labeling of its non-GAAP measures presented herein as "Adjusted operating income (loss)" or "Pre-tax adjusted operating income (loss)". In previous filings, the Company referred to "Pre-tax adjusted operating income (loss)" as "Pre-tax operating income, "Operating income before tax", or "Segment operating income". In addition, the Company referred to "After-tax adjusted operating income (loss)" as "After-tax operating income" or "Operating earnings". The definition of these labels remains unchanged, but the Company has modified the labels to provide further clarity that these measures are non-GAAP. There were no significant intersegment transactions during the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company). The following tables presents a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income (Predecessor and Successor periods are not comparable): Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Life Marketing $ 1,667,118 $ 1,627,848 $ 1,426,090 $ 145,595 Acquisitions 1,569,083 1,676,017 1,333,430 139,761 Annuities 450,306 574,934 443,419 7,884 Stable Value Products 190,006 114,580 79,670 8,181 Asset Protection 327,573 269,145 261,693 21,953 Corporate and Other 214,706 221,423 166,367 17,535 Total revenues $ 4,418,792 $ 4,483,947 $ 3,710,669 $ 340,909 Pre-tax Adjusted Operating Income (Loss) Life Marketing $ 50,778 $ 39,745 $ 57,414 $ (1,618 ) Acquisitions 249,749 260,511 194,654 20,134 Annuities 213,080 213,293 180,231 13,164 Stable Value Products 105,261 61,294 56,581 4,529 Asset Protection 24,356 16,487 20,627 2,420 Corporate and Other (136,332 ) (87,961 ) (25,067 ) (10,144 ) Pre-tax adjusted operating income 506,892 503,369 484,440 28,485 Realized gains (losses) on investments and derivatives (71,835 ) 90,628 (84,598 ) (27,303 ) Income before income tax 435,057 593,997 399,842 1,182 Income tax (benefit) expense (671,475 ) 200,968 131,543 (327 ) Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 Pre-tax adjusted operating income $ 506,892 $ 503,369 $ 484,440 $ 28,485 Adjusted operating income tax benefit (expense) 646,333 (169,247 ) (161,153 ) (9,228 ) After-tax adjusted operating income 1,153,225 334,122 323,287 19,257 Realized gains (losses) on investments and derivatives (71,835 ) 90,628 (84,598 ) (27,303 ) Income tax (expense) benefit on adjustments 25,142 (31,721 ) 29,610 9,555 Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 Realized investment (losses) gains: Derivative financial instruments $ (305,828 ) $ (40,288 ) $ 29,997 $ (123,274 ) All other investments 121,428 90,659 (166,886 ) 81,153 Net impairment losses recognized in earnings (11,742 ) (17,748 ) (26,993 ) (481 ) Less: related amortization (1) (39,480 ) 24,360 (8,726 ) (9,143 ) Less: VA GLWB economic cost (84,827 ) (82,365 ) (70,558 ) (6,156 ) Realized (losses) gains on investments and derivatives $ (71,835 ) $ 90,628 $ (84,598 ) $ (27,303 ) (1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Net investment income Life Marketing $ 553,999 $ 525,495 $ 446,439 $ 47,460 Acquisitions 752,520 764,571 639,422 71,088 Annuities 321,844 322,608 297,114 37,189 Stable Value Products 186,576 107,010 78,459 6,888 Asset Protection 27,325 22,082 17,459 1,878 Corporate and Other 209,324 200,690 154,055 10,677 Total net investment income $ 2,051,588 $ 1,942,456 $ 1,632,948 $ 175,180 Amortization of DAC and VOBA Life Marketing $ 120,753 $ 130,708 $ 107,811 $ 4,813 Acquisitions (6,939 ) 8,178 2,035 5,033 Annuities (54,471 ) (11,031 ) (41,071 ) (7,706 ) Stable Value Products 2,354 1,176 43 25 Asset Protection 16,524 20,033 25,211 1,820 Corporate and Other — — 27 87 Total amortization of DAC and VOBA $ 78,221 $ 149,064 $ 94,056 $ 4,072 Successor Company Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,914,418 $ 19,588,133 $ 20,938,409 $ 4,569,639 DAC and VOBA 1,320,776 74,862 772,634 6,864 Other intangibles 282,361 34,548 170,117 8,056 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 16,717,829 $ 19,712,067 $ 22,217,837 $ 4,698,372 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 918,952 $ 15,043,597 $ 75,973,148 DAC and VOBA 24,441 — 2,199,577 Other intangibles 133,234 35,256 663,572 Goodwill 128,182 — 793,470 Total assets $ 1,204,809 $ 15,078,853 $ 79,629,767 Successor Company Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,050,170 $ 19,679,690 $ 20,243,333 $ 3,373,646 DAC and VOBA 1,218,944 106,532 655,618 5,455 Other intangibles 301,399 37,103 183,449 8,722 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 15,770,787 $ 19,837,849 $ 21,419,077 $ 3,501,636 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,013,399 $ 13,141,759 $ 71,501,997 DAC and VOBA 33,280 — 2,019,829 Other intangibles 143,865 13,545 688,083 Goodwill 128,182 — 793,470 Total assets $ 1,318,726 $ 13,155,304 $ 75,003,379 |
CONSOLIDATED QUARTERLY RESULTS
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED | CONSOLIDATED QUARTERLY RESULTS—UNAUDITED The Company's unaudited consolidated quarterly operating data for the year ended December 31, 2017 (Successor Company) and for the year ended December 31, 2016 (Successor Company) is presented below. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair statement of quarterly results have been reflected in the following data. It is also management's opinion, however, that quarterly operating data for insurance enterprises are not necessarily indicative of results that may be expected in succeeding quarters or years. In order to obtain a more accurate indication of performance, there should be a review of operating results, changes in shareowner's equity, and cash flows for a period of several quarters. First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017 Premiums and policy fees $ 860,586 $ 868,139 $ 855,088 $ 893,606 Reinsurance ceded (316,076 ) (342,898 ) (325,120 ) (376,641 ) Net of reinsurance ceded 544,510 525,241 529,968 516,965 Net investment income 506,413 507,771 507,914 529,490 Realized investment gains (losses) (47,037 ) (54,471 ) (64,191 ) (18,701 ) Net impairment losses recognized in earnings (7,831 ) (2,785 ) (273 ) (853 ) Other income 109,242 111,311 110,970 115,139 Total revenues 1,105,297 1,087,067 1,084,388 1,142,040 Total benefits and expenses 992,948 961,299 973,538 1,055,950 Income before income tax 112,349 125,768 110,850 86,090 Income tax expense (benefit) 36,935 41,500 28,308 (778,218 ) Net income $ 75,414 $ 84,268 $ 82,542 $ 864,308 First Second Quarter Third Quarter Fourth Quarter (Dollars In Thousands) Successor Company For The Year Ended December 31, 2016 Premiums and policy fees $ 852,795 $ 857,948 $ 834,544 $ 862,644 Reinsurance ceded (310,327 ) (336,605 ) (322,229 ) (345,555 ) Net of reinsurance ceded 542,468 521,343 512,315 517,089 Net investment income 475,117 488,460 482,729 496,150 Realized investment gains (losses) 8,229 5,417 24,268 12,457 Net impairment losses recognized in earnings (2,617 ) (967 ) (3,308 ) (10,856 ) Other income 103,716 102,148 107,642 102,147 Total revenues 1,126,913 1,116,401 1,123,646 1,116,987 Total benefits and expenses 955,071 947,740 990,567 996,572 Income before income tax 171,842 168,661 133,079 120,415 Income tax expense 56,494 56,541 39,785 48,148 Net income $ 115,348 $ 112,120 $ 93,294 $ 72,267 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated the effects of events subsequent to December 31, 2017 (Successor Company), and through the date we filed our consolidated financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated financial statements. On January 18, 2018, PLICO and for the limited purposes set forth therein, the Company, entered into a Master Transaction Agreement (the "Master Transaction Agreement") with Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company, for the limited purposes set forth therein, Liberty Mutual Group Inc. ("Liberty Mutual"), The Lincoln National Life Insurance Company ("Lincoln Life"), and for the limited purposes set forth therein, Lincoln National Corporation, pursuant to which Lincoln Life will acquire Liberty Mutual's Group Benefits Business and Individual Life and Annuity Business (the "Life Business") through the acquisition of all of the issued and outstanding capital stock of Liberty Life Assurance Company of Boston ("Liberty") (the "Transaction"). Pursuant to the Master Transaction Agreement, the Company, PLICO and Protective Life and Annuity Insurance Company ("PLAIC"), a wholly owned subsidiary of PLICO, agreed to enter into reinsurance agreements and related ancillary documents at the closing of the Transaction. On the terms and subject to the conditions of the reinsurance agreements, Liberty will cede to PLICO and PLAIC, effective as of the closing of the Transaction, substantially all of the insurance policies relating to the Life Business. The aggregate statutory reserves of Liberty to be ceded to PLICO and PLAIC as of the closing of the Transaction are expected to be approximately $13.0 billion . To support its obligations under the reinsurance agreements, PLICO and PLAIC will each establish a trust account for the benefit of Lincoln Life. Entry into the reinsurance agreements represents an estimated capital investment by PLICO of approximately $1.17 billion . The transaction is expected to be completed in the second quarter of 2018, pending regulatory approvals and other customary closing conditions. |
SCHEDULE II - CONDENSED FINANCI
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF INCOME PROTECTIVE LIFE CORPORATION (Parent Company) Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Dividends from subsidiaries* $ 261,090 $ 541,762 $ 32,365 $ 16 Service fees from subsidiaries* 276,325 250,668 220,105 19,530 Net investment income 9,457 8,607 49,925 4,809 Realized investment gains (losses) (45,091 ) (29,289 ) 3,817 (15,863 ) Other income 2,049 9,828 44 — Total revenues 503,830 781,576 306,256 8,492 Expenses Operating and administrative 172,871 143,941 121,433 8,549 Interest—subordinated debt 25,411 19,408 17,191 2,823 Interest—other 35,852 40,729 40,596 6,113 Total expenses 234,134 204,078 179,220 17,485 Income (loss) before income tax and other items below 269,696 577,498 127,036 (8,993 ) Income tax (benefit) expense Current (9,441 ) 334 (58,547 ) 6,376 Deferred 46,020 20,715 99,146 (11,123 ) Total income tax expense (benefit) 36,579 21,049 40,599 (4,747 ) Income (loss) before equity in undistributed income from subsidiaries* 233,117 556,449 86,437 (4,246 ) Equity in undistributed income of subsidiaries 873,415 (163,420 ) 181,862 5,755 Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 * Eliminated in Consolidation SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF COMPREHENSIVE INCOME (LOSS) PROTECTIVE LIFE CORPORATION (Parent Company) Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 Total other comprehensive income (loss) $ 692,994 $ 586,611 $ (1,241,134 ) $ 465,968 Total comprehensive income (loss) $ 1,799,526 $ 979,640 $ (972,835 ) $ 467,477 * Eliminated in Consolidation SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS PROTECTIVE LIFE CORPORATION (Parent Company) Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Assets Fixed maturities $ 140,102 $ 112,498 Equity securities 38,861 38,472 Other long-term investments 10 10 Short-term investments 79,818 — Investments in subsidiaries (equity method)* 8,563,201 7,019,618 Total investments 8,821,992 7,170,598 Cash 3,760 78,936 Receivables from subsidiaries* 38,394 9,600 Property and equipment, net 1,692 2,331 Income tax receivable 513 11,061 Deferred income tax 103,716 142,531 Other assets 38,487 29,851 Total assets $ 9,008,554 $ 7,444,908 Liabilities Accrued expenses and other liabilities $ 442,696 $ 368,900 Debt 943,370 1,163,285 Subordinated debt securities 495,289 441,202 Total liabilities 1,881,355 1,973,387 Commitments and contingencies—Note 3 Shareowner's equity Common stock — — Additional paid-in-capital 5,554,059 5,554,059 Treasury stock — — Retained earnings, including undistributed income of subsidiaries: (Successor 2017 - $891,860; 2016 - $18,442) 1,560,444 571,985 Accumulated other comprehensive income (loss): Net unrealized gains on investments, all from subsidiaries, net of income tax: (Successor 2017 - $6,883; 2016 - $(349,541)) 25,896 (649,147 ) Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2017 - $(6); 2016 - $(3,864)) (22 ) (7,175 ) Accumulated gain (loss)—derivatives, net of income tax: (Successor 2017 - $198; 2016 - $391) 747 727 Postretirement benefits liability adjustment, net of income tax: (Successor 2017 - $(3,469); 2016 - $578) (13,925 ) 1,072 Total shareowner's equity 7,127,199 5,471,521 Total liabilities and shareowner's equity $ 9,008,554 $ 7,444,908 * Eliminated in Consolidation SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS PROTECTIVE LIFE CORPORATION (Parent Company) Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Cash flows from operating activities Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 Adjustments to reconcile net income to net cash provided by operating activities: Realized investment (gains) losses 45,091 29,289 (3,817 ) 15,863 Equity in undistributed net income of subsidiaries* (873,415 ) 163,420 (181,862 ) (5,755 ) Depreciation expense 739 506 363 23 Receivables from subsidiaries* (28,794 ) 15,181 (13,759 ) (4,076 ) Income tax receivable 10,548 2,109 (13,170 ) — Deferred income taxes 46,020 20,715 99,146 (11,123 ) Accrued income taxes — — (23,246 ) 5,875 Accrued expenses and other liabilities (52,846 ) (33,639 ) (192,234 ) 18,329 Other, net 4,226 (16,426 ) 5,419 (2,334 ) Net cash provided by (used in) operating activities 258,101 574,184 (54,861 ) 18,311 Cash flows from investing activities Maturities and principal reductions of investments, available-for-sale — — — — Sale of investments, available-for-sale — — — — Cost of investments acquired, available-for-sale (26,423 ) (59,025 ) — — Return of and/or (additional) capital investments in subsidiaries 38,410 (45,762 ) 110,793 — Change in other long-term investments — (10 ) — — Change in short-term investments (79,818 ) — — — Purchase of property and equipment — (1,649 ) — — Sales of property and equipment (100 ) — — — Net cash (used in) provided by investing activities (67,931 ) (106,446 ) 110,793 — Cash flows from financing activities Borrowings under line of credit arrangements and debt 1,035,000 265,000 330,000 — Principal payments on line of credit arrangements and debt (1,156,498 ) (633,074 ) (338,093 ) (60,000 ) Dividends to shareowner (143,848 ) (89,343 ) — — Net cash used in financing activities (265,346 ) (457,417 ) (8,093 ) (60,000 ) Change in cash (75,176 ) 10,321 47,839 (41,689 ) Cash at beginning of year 78,936 68,615 20,776 62,465 Cash at end of year $ 3,760 $ 78,936 $ 68,615 $ 20,776 *Eliminated in Consolidation SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT PROTECTIVE LIFE CORPORATION (Parent Company) NOTES TO CONDENSED FINANCIAL INFORMATION The Company publishes consolidated financial statements that are its primary financial statements. Therefore, this parent company condensed financial information is not intended to be the primary financial statements of the Company, and should be read in conjunction with the consolidated financial statements and notes, including the discussion of significant accounting policies, thereto of Protective Life Corporation and subsidiaries. BASIS OF PRESENTATION Nature of Operations On February 1, 2015, Protective Life Corporation (the "Company") became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., "Dai-ichi Life"), when Dai-ichi Life purchased all outstanding shares of the Company's stock. Prior to February 1, 2015, and for the periods this report presents, the Company's stock was publicly traded on the New York Stock Exchange. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company ("PLICO") is the Company's largest operating subsidiary. The accompanying condensed financial statements of the Company should be read in conjunction with the consolidated financial statements and notes thereto of Protective Life Corporation and subsidiaries included in this Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. DEBT AND OTHER OBLIGATIONS Debt and Subordinated Debt Securities Debt and subordinated debt securities are summarized as follows: Successor Company As of December 31, 2017 2016 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Revolving Line Of Credit $ — $ — $ 170,000 $ 170,000 6.40% Senior Notes (2007), due 2018 150,000 150,518 150,000 156,663 7.375% Senior Notes (2009), due 2019 400,000 435,806 400,000 454,688 8.45% Senior Notes (2009), due 2039 232,928 357,046 246,926 381,934 $ 782,928 $ 943,370 $ 966,926 $ 1,163,285 Subordinated debt securities (year of issue): 6.25% Subordinated Debentures (2012), due 2042, callable 2017 $ — $ — $ 287,500 $ 290,002 6.00% Subordinated Debentures (2012), due 2042, callable 2017 — — 150,000 151,200 5.35% Subordinated Debentures (2017), due 2052 500,000 495,289 — — $ 500,000 $ 495,289 $ 437,500 $ 441,202 The Company's future maturities of debt, excluding notes payable to banks and subordinated debt securities, are $150.5 million in 2018, $435.8 million in 2019, and $357.0 million thereafter. During the year ended December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company repurchased and subsequently extinguished $21.6 million and $82.7 million (par value - $14.0 million and $53.1 million ) of the Company's 8.45% Senior Notes due 2039, respectively. These repurchases resulted in a $2.0 million and $9.8 million pre-tax gains for the Company, respectively. The gain is recorded in other income in the consolidated condensed statements of income. During 2017, the Company issued $500.0 million of its Subordinated Debentures due 2052. These Subordinated Debentures are carried on the Company's balance sheet net of the associated deferred issuance expenses of $4.8 million . The Company used the net proceeds from the offering to call and redeem, at par, the entire $150.0 million of its 6.00% Subordinated Debentures due 2042 and $287.5 million of its 6.25% Subordinated Debentures due 2042. On August 10, 2017, the Company called for redemption $287.5 million of its 6.25% Subordinated Debentures due in 2042 and $150.0 million of its 6.00% Subordinated Debentures due in 2042. The Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion . The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.25 billion . Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of the Company's Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent's prime rate , (y) 0.50% above the Federal Funds rate , or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of our Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company's Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, under the Credit Facility. The maturity date of the Credit Facility is February 2, 2020. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of December 31, 2017 (Successor Company). The Company did not have an outstanding balance on the Credit Facility as of December 31, 2017 (Successor Company). Interest Expense Interest expense on debt and subordinated debt securities totaled $61.3 million , $60.1 million , $57.8 million , and $8.9 million for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016, the periods of February 1, 2015 to December 31, 2015 (Successor Company), and January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. COMMITMENTS AND CONTINGENCIES The Company leases a building contiguous to its home office. The lease was renewed in December 2013 and was extended to December 2018. At the end of the lease term, the Company may purchase the building for approximately $75 million . Monthly rental payments are based on the current LIBOR rate plus a spread. The following is a schedule by year of future minimum rental payments required under this lease: Year Amount (Dollars In Thousands) 2018 $ 77,219 Golden Gate Captive Insurance Company On January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of Protective Life Insurance Company (“PLICO”), and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of the Company, entered into an 18 -year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by PLICO and West Coast Life (“WCL”), a direct wholly owned subsidiary of PLICO. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion . Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City Notes for the 18 -year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLICO, WCL and the Company, meaning that none of these companies, other than Golden Gate, are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. As of December 31, 2017 (Successor Company), the aggregate principal balance of the Steel City Notes was $2.014 billion . In connection with this transaction, the Company has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. The support agreements provide that amounts would become payable by the Company if Golden Gate’s annual general corporate expenses were higher than modeled amounts, certain reinsurance rates applicable to the subject business increase beyond modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, the Company has entered into a separate agreement to guarantee payment of certain fee amounts in connection with the credit enhancement of the Steel City Notes. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. In connection with the transaction outlined above, Golden Gate had a $2.014 billion outstanding non-recourse funding obligation as of December 31, 2017 (Successor Company). This non-recourse funding obligation matures in 2039 and accrues interest at a fixed annual rate of 4.75% . Prior to this transaction, Golden Gate had three series of non-recourse funding obligations with a total outstanding balance of $800 million . The Company held the entire outstanding balance of non-recourse funding obligations. Series A1 non-recourse funding obligations had a balance of $400 million and accrued interest at 7.375% , the Series A2 non-recourse funding obligations had a balance of $100 million and accrued interest at 8.00% , and the Series A3 non-recourse funding obligations had a balance of $300 million and accrued interest at 8.45% . As a result of the transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by the Company were contributed to PLICO and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. Golden Gate II Captive Insurance Company Golden Gate II Captive Insurance Company ("Golden Gate II"), a South Carolina special purpose financial captive insurance company wholly owned by PLICO, had $575 million of outstanding non-recourse funding obligations as of December 31, 2017 (Successor Company). These outstanding non-recourse funding obligations were issued to special purpose trusts, which in turn issued securities to third parties. Certain of our affiliates own a portion of these securities. As of December 31, 2017 (Successor Company), securities related to $58.6 million of the outstanding balance of the non-recourse funding obligations were held by external parties, and securities related to $516.4 million of the non-recourse funding obligations were held by the Company and our affiliates. The Company has entered into certain support agreements with Golden Gate II obligating the Company to make capital contributions or provide support related to certain of Golden Gate II's expenses and in certain circumstances, to collateralize certain of the Company's obligations to Golden Gate II. These support agreements provide that amounts would become payable by the Company to Golden Gate II if its annual general corporate expenses were higher than modeled amounts or if Golden Gate II's investment income on certain investments or premium income was below certain actuarially determined amounts. As of December 31, 2017 (Successor Company), no payments have been made under these agreements, however, certain support agreement obligations to Golden Gate II of approximately $2.8 million have been collateralized by the Company. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreements. During the year ended December 31, 2017 (Successor Company), the Company and its affiliates did no t repurchase from unrelated third parties any of its outstanding non-recourse funding obligations, at a discount. PLC purchased $26.4 million of non-recourse funding obligations from certain subsidiaries during the period ended December 31, 2017 that have been eliminated in consolidation. During the year ended December 31, 2016 (Successor Company), the Company and its affiliates repurchased $86.3 million of its outstanding non-recourse funding obligations, at a discount. These repurchases did not result in a material gain or loss for the Company. The balance of the Company's fixed maturity investments are the result of market transactions in which the Company purchased securities issued by the special purpose trusts that are collateralized by non-recourse funding obligations of Golden Gate II. Golden Gate III Vermont Captive Insurance Company On April 23, 2010, Golden Gate III Vermont Captive Insurance Company ("Golden Gate III"), a Vermont special purpose financial insurance company and wholly owned subsidiary of PLICO, entered into a Reimbursement Agreement (the "Reimbursement Agreement") with UBS AG, Stamford Branch ("UBS"), as issuing lender. Under the Reimbursement Agreement, UBS issued a letter of credit (the "LOC") to a trust for the benefit of WCL. The Reimbursement Agreement has undergone three separate amendments and restatements. The Reimbursement Agreement's current effective date is June 25, 2014. The LOC balance reached its scheduled peak amount of $935 million in 2015. As of December 31, 2017 (Successor Company), the LOC balance was $885 million . The term of the LOC is expected to be approximately 15 years from the original issuance date. This transaction is "non-recourse" to WCL, PLICO, and the Company, meaning that none of these companies other than Golden Gate III are liable for reimbursement on a draw of the LOC. The Company has entered into certain support agreements with Golden Gate III obligating the Company to make capital contributions or provide support related to certain of Golden Gate III's expenses and in certain circumstances, to collateralize certain of the Company's obligations to Golden Gate III. Future scheduled capital contributions amount to approximately $70 million and will be paid in two installments with the last payment occurring in 2021. These contributions may be subject to potential offset against dividend payments as permitted under the terms of the Reimbursement Agreement. The support agreements provide that amounts would become payable by the Company to Golden Gate III if its annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate III. Pursuant to the terms of an amended and restated letter agreement with UBS, the Company has continued to guarantee the payment of fees to UBS as specified in the Reimbursement Agreement. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. Golden Gate IV Vermont Captive Insurance Company Golden Gate IV Vermont Captive Insurance Company ("Golden Gate IV"), a Vermont special purpose financial insurance company and wholly owned subsidiary of PLICO, is party to a Reimbursement Agreement with UBS AG, Stamford Branch, as issuing lender. Under the Reimbursement Agreement, dated December 10, 2010, UBS issued an LOC in the initial amount of $270 million to a trust for the benefit of WCL. In accordance with the terms of the terms of the Reimbursement Agreement, the LOC balance reached its scheduled peak amount of $790 million in 2016. As of December 31, 2017 (Successor Company), the LOC balance was $785 million . The term of the LOC is expected to be 12 years from the original issuance date (stated maturity of December 30, 2022). The LOC was issued to support certain obligations of Golden Gate IV to WCL under an indemnity reinsurance agreement, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of PLICO. This transaction is "non-recourse" to WCL, PLICO, and the Company, meaning that none of these companies other than Golden Gate IV are liable for reimbursement on a draw of the LOC. The Company has entered into certain support agreements with Golden Gate IV obligating the Company to make capital contributions or provide support related to certain of Golden Gate IV's expenses and in certain circumstances, to collateralize certain of the Company's obligations to Golden Gate IV. The support agreements provide that amounts would become payable by the Company to Golden Gate IV if its annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate IV. The Company has also entered into a separate agreement to guarantee the payments of LOC fees under the terms of the Reimbursement Agreement. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. Golden Gate V Vermont Captive Insurance Company On October 10, 2012, Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”), a Vermont special purpose financial insurance company, and Red Mountain, LLC (“Red Mountain”), both wholly owned subsidiaries of PLICO, entered into a 20 -year transaction to finance up to $945 million of "AXXX" reserves related to a block of universal life insurance policies with secondary guarantees issued by our direct wholly owned subsidiary PLICO and indirect wholly owned subsidiary, WCL. Golden Gate V issued non-recourse funding obligations to Red Mountain, and Red Mountain issued a note with an initial principal amount of $275 million , increasing to a maximum of $945 million in 2027, to Golden Gate V for deposit to a reinsurance trust supporting Golden Gate V's obligations under a reinsurance agreement with WCL, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of PLICO. Through the structure, Hannover Life Reassurance Company of America ("Hannover Re"), the ultimate risk taker in the transaction, provides credit enhancement to the Red Mountain note for the 20 -year term in exchange for a fee. The transaction is "non-recourse" to Golden Gate V, Red Mountain, WCL, PLICO and the Company, meaning that none of these companies are liable for the reimbursement of any credit enhancement payments required to be made. As of December 31, 2017 (Successor Company), the principal balance of the Red Mountain note was $620 million . Future scheduled capital contributions to prefund credit enhancement fees amount to approximately $121.8 million and will be paid in annual installments through 2031. In connection with the transaction, the Company has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate V or Red Mountain. The support agreements provide that amounts would become payable by the Company if Golden Gate V's annual general corporate expenses were higher than modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, the Company has entered into separate agreements to indemnify Golden Gate V with respect to material adverse changes in non-guaranteed elements of insurance policies reinsured by Golden Gate V, and to guarantee payment of certain fee amounts in connection with the credit enhancement of the Red Mountain note. As of December 31, 2017 (Successor Company), no payments have been made under these agreements. In connection with the transaction outlined above, Golden Gate V had a $620 million outstanding non-recourse funding obligation as of December 31, 2017 (Successor Company). This non-recourse funding obligation matures in 2037, has scheduled increases in principal to a maximum of $945 million , and accrues interest at a fixed annual rate of 6.25% . The Company is party to an intercompany capital support agreement with Shades Creek Captive Insurance Company ("Shades Creek"), a direct wholly owned insurance subsidiary. The agreement provides through a guarantee that the Company will contribute assets or purchase surplus notes (or cause an affiliate or third party to contribute assets or purchase surplus notes) in amounts necessary for Shades Creek's regulatory capital levels to equal or exceed minimum thresholds as defined by the agreement. Under this support agreement, PLICO issued a $55 million Letter of Credit. As of December 31, 2015 (Successor Company), the $55.0 million Letter of Credit executed by PLICO was no longer issued and outstanding. Also in accordance with this agreement, $120 million of additional capital was provided to Shades Creek by the Company through cash capital contributions during the period February 1, 2015 to December 31, 2015 (Successor Company). As of December 31, 2017 (Successor Company), Shades Creek maintained capital levels in excess of the required minimum thresholds. The maximum potential future payment amount which could be required under the capital support agreement will be dependent on numerous factors, including the performance of equity markets, the level of interest rates, performance of associated hedges, and related policyholder behavior. SHAREOWNER'S EQUITY On February 1, 2015, Dai-ichi Life acquired 100% of the Company's outstanding shares of common stock through the Merger of DL Investment (Delaware), Inc., a wholly owned subsidiaries of Dai-ichi Life, with and into the Company, with the Company continuing as the surviving entity. SUPPLEMENTAL CASH FLOW INFORMATION Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Cash paid (received) during the year for: Interest paid on debt $ 78,944 $ 95,095 $ 75,322 $ 5,411 Income taxes (reduced by amounts received from affiliates under a tax sharing agreement) (23,110 ) (2,596 ) (15,669 ) (10 ) Noncash investing and financing activities: Stock-based compensation — — — 1,550 DERIVATIVE FINANCIAL INSTRUMENTS In connection with the issuance of non-recourse funding obligations by Golden Gate II, the Company has entered into certain support agreements with Golden Gate II obligating it to provide support payments to Golden Gate II under certain adverse interest rate conditions and to the extent of any reduction in the reinsurance premiums received by Golden Gate II due to an increase in the premium rates charged to PLICO under its third party yearly renewable term reinsurance agreements. Each of these agreements expires on July 10, 2052. In connection with the Golden Gate V financing transaction, the Company entered into separate Portfolio Maintenance Agreements with Golden Gate V and WCL. The agreements obligate the Company to reimburse Golden Gate V and West Coast Life for other-than-temporary impairment losses on certain asset portfolios above a specified amount. Each of these agreements expires on October 10, 2032. In connection with the Golden Gate financing transaction, the Company entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate. The agreements obligate the Company to reimburse Golden Gate for other-than-temporary impairment losses on certain asset portfolios above a specified amount and to the extent of any reduction in the reinsurance premiums received by Golden Gate due to an increase in the premium rates charged to PLICO under its third party yearly renewable term reinsurance agreements. Each of these agreements expires on January 15, 2034. As of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), the Company included in its balance sheets a combined liability for these agreements of $91.6 million and $48.9 million , respectively. During the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016, the period of February 1, 2015 to December 31, 2015 (Successor Company), and January 1, 2015 to January 31, 2015 (Predecessor Company), the Company included in its statements of income unrealized losses of $42.7 million , $ 29.3 million , unrealized gains of $3.8 million , and unrealized losses of $15.9 million , respectively. |
SCHEDULE III - SUPPLEMENTARY IN
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Supplementary Insurance Information [Abstract] | |
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION | SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES Segment Deferred Policy Acquisition Costs and Value of Businesses Acquired Future Policy Benefits and Claims Unearned Premiums Stable Value Products, Annuity Contracts and Other Policyholders' Funds Net Premiums and Policy Fees Net Investment Income (1) Benefits and Settlement Expenses Amortization of Deferred Policy Acquisitions Costs and Value of Businesses Acquired Other Operating Expenses (1) Premiums Written (2) (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017: Life Marketing $ 1,320,776 $ 15,438,739 $ 107 $ 424,204 $ 1,011,911 $ 553,999 $ 1,319,138 $ 120,753 $ 178,792 $ 111 Acquisitions 74,862 14,323,713 2,423 4,377,020 785,188 752,520 1,204,084 (6,939 ) 110,607 15,964 Annuities 772,633 1,080,629 — 7,308,354 152,701 321,844 216,629 (54,471 ) 149,181 — Stable Value Products 6,864 — — 4,698,371 — 186,576 74,578 2,354 4,407 — Asset Protection 24,442 55,847 872,600 — 154,166 27,325 126,459 16,524 160,235 148,093 Corporate and Other — 58,664 275 78,810 12,718 209,324 16,382 — 345,022 12,732 Total $ 2,199,577 $ 30,957,592 $ 875,405 $ 16,886,759 $ 2,116,684 $ 2,051,588 $ 2,957,270 $ 78,221 $ 948,244 $ 176,900 For The Year Ended December 31, 2016: Life Marketing $ 1,218,944 $ 14,595,370 $ 119 $ 426,422 $ 972,247 $ 525,495 $ 1,267,844 $ 130,708 $ 177,498 $ 122 Acquisitions 106,532 14,693,744 2,734 4,247,081 832,083 764,571 1,232,141 8,178 118,056 18,818 Annuities 655,618 1,097,973 — 7,059,060 146,458 322,608 214,100 (11,031 ) 140,409 — Stable Value Products 5,455 — — 3,501,636 — 107,010 41,736 1,176 3,033 — Asset Protection 33,280 60,790 844,919 — 128,687 22,082 106,668 20,033 125,957 121,821 Corporate and Other — 63,208 723 75,301 13,740 200,690 17,946 — 295,498 13,689 Total $ 2,019,829 $ 30,511,085 $ 848,495 $ 15,309,500 $ 2,093,215 $ 1,942,456 $ 2,880,435 $ 149,064 $ 860,451 $ 154,450 February 1, 2015 to December 31, 2015 Life Marketing $ 1,119,515 $ 13,869,102 $ 135 $ 371,618 $ 882,171 $ 446,439 $ 1,109,840 $ 107,811 $ 165,317 $ 148 Acquisitions (178,662 ) 14,508,877 3,082 4,254,579 690,741 639,422 1,067,482 2,035 89,960 32,134 Annuities 578,742 1,196,131 — 7,090,171 138,146 297,114 226,824 (41,071 ) 125,946 — Stable Value Products 2,357 — — 2,131,822 — 78,459 19,348 43 2,620 — Asset Protection 36,856 61,291 719,516 — 128,338 17,459 101,881 25,211 113,974 121,427 Corporate and Other — 68,496 803 73,066 13,676 154,055 14,568 27 179,011 13,583 Total $ 1,558,808 $ 29,703,897 $ 723,536 $ 13,921,256 $ 1,853,072 $ 1,632,948 $ 2,539,943 $ 94,056 $ 676,828 $ 167,292 (1) Allocations of Net Investment Income and Other Operating Expenses are based on a number of assumptions and estimates and results would change if different methods were applied. (2) Excludes Life Insurance SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES (continued) Segment Net Premiums and Policy Fees Net Investment Income (1) Benefits and Settlement Expenses Amortization of Deferred Policy Acquisitions Costs and Value of Businesses Acquired Other Operating Expenses (1) Premiums Written (2) (Dollars In Thousands) Predecessor Company January 1, 2015 to January 31, 2015 Life Marketing $ 84,926 $ 47,460 $ 123,179 $ 4,813 $ 18,705 $ 12 Acquisitions 62,343 71,088 101,926 5,033 9,041 2,133 Annuities 12,473 37,189 30,613 (7,706 ) 9,926 — Stable Value Products — 6,888 2,255 25 79 — Asset Protection 10,825 1,878 7,592 1,820 10,121 10,172 Corporate and Other 1,343 10,677 1,722 87 20,496 1,346 Total $ 171,910 $ 175,180 $ 267,287 $ 4,072 $ 68,368 $ 13,663 (1) Allocations of Net Investment Income and Other Operating Expenses are based on a number of assumptions and estimates and results would change if different methods were applied. (2) Excludes Life Insurance |
SCHEDULE IV - REINSURANCE
SCHEDULE IV - REINSURANCE | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
SCHEDULE IV - REINSURANCE | SCHEDULE IV—REINSURANCE PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES Successor Company Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net (Dollars In Thousands) For The Year Ended December 31, 2017: Life insurance in-force $ 751,512,468 $ (328,377,398 ) $ 110,205,190 $ 533,340,260 21.0 % Premiums and policy fees: Life insurance 2,655,846 (1,151,175 ) 435,113 1,939,784 (1) 22.5 % Accident/health insurance 51,991 (33,051 ) 14,945 33,885 44.1 Property and liability insurance 309,848 (176,509 ) 9,676 143,015 6.8 Total $ 3,017,685 $ (1,360,735 ) $ 459,734 $ 2,116,684 For The Year Ended December 31, 2016: Life insurance in-force $ 739,248,680 $ (348,994,650 ) $ 116,265,430 $ 506,519,460 23.0 % Premiums and policy fees: Life insurance 2,610,682 (1,126,915 ) 454,999 1,938,766 (1) 23.5 % Accident/health insurance 58,076 (36,935 ) 17,439 38,580 45.2 Property and liability insurance 261,009 (150,866 ) 5,726 115,869 4.9 Total $ 2,929,767 $ (1,314,716 ) $ 478,164 $ 2,093,215 February 1, 2015 to December 31, 2015: Life insurance in-force $ 727,705,256 $ (368,142,294 ) $ 39,546,742 $ 399,109,704 9.9 % Premiums and policy fees: Life insurance 2,360,643 (983,143 ) 308,280 1,685,780 (1) 18.3 % Accident/health insurance 70,243 (36,871 ) 18,252 51,624 35.4 Property and liability insurance 243,728 (134,964 ) 6,904 115,668 6.0 Total $ 2,674,614 $ (1,154,978 ) $ 333,436 $ 1,853,072 Predecessor Company Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net (Dollars In Thousands) January 1, 2015 to January 31, 2015 (2) Life insurance in-force $ — $ — $ — $ — — % Premiums and policy fees: Life insurance 204,185 (74,539 ) 28,601 158,247 (1) 18.1 % Accident/health insurance 6,846 (4,621 ) 1,809 4,034 44.8 Property and liability insurance 19,759 (10,796 ) 666 9,629 6.9 Total $ 230,790 $ (89,956 ) $ 31,076 $ 171,910 (1) Includes annuity policy fees of $173.5 million , $160.4 million $152.8 million , and $13.9 million for the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. (2) January 31, 2015 (Predecessor Company) balance sheet information is not presented in our consolidated financial statements, therefore January 31, 2015 Life Insurance In-Force has been omitted from this schedule. |
SCHEDULE V - VALUATION AND QUAL
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE V—VALUATION AND QUALIFYING ACCOUNTS PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES Successor Company Additions Description Balance at beginning of period Charged to costs and expenses Charges to other accounts Deductions Balance at end of period (Dollars In Thousands) As of December 31, 2017 Allowance for losses on commercial mortgage loans $ 724 $ (7,439 ) $ — $ 6,715 $ — As of December 31, 2016 Allowance for losses on commercial mortgage loans $ — $ (4,682 ) $ — $ 5,406 $ 724 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company. Prior to February 1, 2015, and for the periods reported as "predecessor", the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities (see also Note 21, Statutory Reporting Practices and Other Regulatory Matters ). The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors. |
Entities Included | Entities Included The consolidated financial statements include the accounts of Protective Life Corporation and subsidiaries and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at 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 periods, goodwill recoverability, value of business acquired ("VOBA"), investment and certain derivatives fair values, other-than-temporary impairments, future policy benefits, pension and other postretirement benefits, provisions for income taxes, reserves for contingent liabilities, reinsurance risk transfer assessments, and reserves for losses in connection with unresolved legal matters. |
Valuation of Investment Securities | Valuation of Investment Securities The Company determines the appropriate classification of investment securities at the time of purchase and periodically re-evaluates such designations. Investment securities are classified as either trading, available-for-sale, or held-to-maturity securities. Investment securities classified as trading are recorded at fair value with changes in fair value recorded in realized gains (losses). Investment securities purchased for long term investment purposes are classified as available-for-sale and are recorded at fair value with changes in unrealized gains and losses, net of taxes, reported as a component of other comprehensive income (loss). Investment securities are classified as held-to-maturity when the Company has the intent and ability to hold the securities to maturity and are reported at amortized cost. Interest income on available-for-sale and held-to-maturity securities includes the amortization of premiums and accretion of discounts and are recorded in investment income. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a "waterfall" approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non-binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which the Company purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party service or an independent broker quotation. Included in the pricing of other asset-backed securities, collateralized mortgage obligations ("CMOs"), and mortgage-backed securities ("MBS") are estimates of the rate of future prepayments of principal and underlying collateral support over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and rates of prepayments previously experienced at the interest rate levels projected for the underlying collateral. The basis for the cost of securities sold was determined at the Committee on Uniform Securities Identification Procedures ("CUSIP") level on a first in first out basis. The committee supplies a unique nine-character identification, called a CUSIP number, for each class of security approved for trading in the U.S., to facilitate clearing and settlement. These numbers are used when any buy and sell orders are recorded. Each quarter the Company reviews investments with unrealized losses and tests for other-than-temporary impairments. The Company analyzes various factors to determine if any specific other-than-temporary asset impairments exist. These include, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline, 4) an assessment of the Company's intent to sell the security (including a more likely than not assessment of whether the Company will be required to sell the security) before recovering the security's amortized cost, 5) the duration of the decline, 6) an economic analysis of the issuer's industry, and 7) the financial strength, liquidity, and recoverability of the issuer. Management performs a security by security review each quarter in evaluating the need for any other-than-temporary impairments. Although no set formula is used in this process, the investment performance, collateral position, and continued viability of the issuer are significant measures considered, and in some cases, an analysis regarding the Company's expectations for recovery of the security's entire amortized cost basis through the receipt of future cash flows is performed. Once a determination has been made that a specific other-than-temporary impairment exists, the security's basis is adjusted and an other-than-temporary impairment is recognized. Equity securities that are other-than-temporarily impaired are written down to fair value with a realized loss recognized in earnings. Other-than-temporary impairments to debt securities that the Company does not intend to sell and does not expect to be required to sell before recovering the security's amortized cost are written down to discounted expected future cash flows ("post impairment cost") and credit losses are recorded in earnings. The difference between the securities' discounted expected future cash flows and the fair value of the securities on the impairment date is recognized in other comprehensive income (loss) as a non-credit portion impairment. When calculating the post impairment cost for residential mortgage-backed securities ("RMBS"), commercial mortgage-backed securities ("CMBS"), and other asset-backed securities (collectively referred to as asset-backed securities or "ABS"), the Company considers all known market data related to cash flows to estimate future cash flows. When calculating the post impairment cost for corporate debt securities, the Company considers all contractual cash flows to estimate expected future cash flows. To calculate the post impairment cost, the expected future cash flows are discounted at the original purchase yield. Debt securities that the Company intends to sell or expects to be required to sell before recovery are written down to fair value with the change recognized in earnings. |
Cash | Cash Cash includes all demand deposits reduced by the amount of outstanding checks and drafts. As a result of the Company's cash management system, checks issued from a particular bank but not yet presented for payment may create negative book cash balances with the bank at certain reporting dates. Such negative balances are included in other liabilities and were $132.7 million as of December 31, 2017 (Successor Company) and $79.2 million as of December 31, 2016 (Successor Company), respectively. The Company has deposits with certain financial institutions which exceed federally insured limits. The Company has reviewed the creditworthiness of these financial institutions and believes there is minimal risk of a material loss. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The incremental direct costs associated with successfully acquired insurance policies, are deferred to the extent such costs are deemed recoverable from future profits. Such costs include commissions and other costs of acquiring traditional life and health insurance, credit insurance, universal life insurance, and investment products. DAC are subject to recoverability testing at the end of each accounting period. Traditional life and health insurance acquisition costs are amortized over the premium-payment period of the related policies in proportion to the ratio of annual premium income to the present value of the total anticipated premium income. Credit insurance acquisition costs are being amortized in proportion to earned premium. Acquisition costs for universal life and investment products are amortized over the lives of the policies in relation to the present value of estimated gross profits before amortization. The Company makes certain assumptions regarding the mortality, persistency, expenses, and interest rates (equal to the rate used to compute liabilities for future policy benefits, currently 1.0% to 7.8% ) the Company expects to experience in future periods when determining the present value of estimated gross profits. These assumptions are best estimates and are periodically updated whenever actual experience and/or expectations for the future change from that assumed. Additionally, these costs have been adjusted by an amount equal to the amortization that would have been recorded if unrealized gains or losses on investments associated with our universal life and investment products had been realized. Acquisition costs for stable value contracts are amortized over the term of the contracts using the effective yield method. |
Value of Businesses Acquired | Value of Businesses Acquired In conjunction with the Merger and the acquisition of insurance policies or investment contracts, a portion of the purchase price is allocated to the right to receive future gross profits from cash flows and earnings of associated insurance policies and investment contracts. This intangible asset, called VOBA, is based on the actuarially estimated present value of future cash flows from associated insurance policies and investment contracts acquired. The estimated present value of future cash flows used in the calculation of the VOBA is based on certain assumptions, including mortality, persistency, expenses, and interest rates that the Company expects to experience in future years. The Company amortizes VOBA in proportion to gross premiums for traditional life products, or estimated gross margins ("EGMs") for participating traditional life products within the MONY Life Insurance Company ("MONY") block. For interest sensitive products, the Company uses various amortization bases including expected gross profits ("EGPs"), revenues, or insurance in-force. VOBA is subject to annual recoverability testing. |
Intangible Assets | Intangible Assets Intangible assets with definite lives are amortized over the estimated useful life of the asset and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Amortizable intangible assets primarily consist of distribution relationships, trade names, technology, and software. Intangible assets with indefinite lives, primarily insurance licenses, are not amortized, but are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Software is generally amortized over a three year useful life. |
Property and Equipment | Property and Equipment In conjunction with the Merger, property and equipment was recorded at fair value as of the Merger date and will be depreciated from this basis in future periods based on the respective estimated useful lives. Real estate assets were recorded at appraised values as of the acquisition date. The Company has estimated the remaining useful life of the home office building to be 25 years. Land is not depreciated. The Company depreciates its assets using the straight-line method over the estimated useful lives of the assets. The Company's furniture is depreciated over a ten year useful life, office equipment and machines are depreciated over a five year useful life, and computers are depreciated over a three year useful life. Major repairs or improvements are capitalized and depreciated over the estimated useful lives of the assets. Other repairs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or retired are removed from the accounts, and resulting gains or losses are included in income. |
Separate Accounts | Separate Accounts The separate account assets represent funds for which the Company does not bear the investment risk. These assets are carried at fair value and are equal to the separate account liabilities, which represent the policyholder's equity in those assets. The investment income and investment gains and losses on the separate account assets accrue directly to the policyholder. These amounts are reported separately as assets and liabilities related to separate accounts in the accompanying consolidated financial statements. Amounts assessed against policy account balances for the costs of insurance, policy administration, and other services are included in premiums and policy fees in the accompanying consolidated statements of income. |
Stable Value Product Account Balances | Stable Value Product Account Balances The Stable Value Products segment sells fixed and floating rate funding agreements directly to qualified institutional investors. The segment also issues funding agreements to the Federal Home Loan Bank ("FHLB"), and markets guaranteed investment contracts ("GICs") to 401(k) and other qualified retirement savings plans. GICs are contracts which specify a return on deposits for a specified period and often provide flexibility for withdrawals at book value in keeping with the benefits provided by the plan. The Company records its stable value contract liabilities in the consolidated balance sheets in “stable value product account balances” at the deposit amount plus accrued interest, adjusted for any unamortized premium or discount. Interest on the contracts is accrued based upon contract terms. Any premium or discount is amortized using the effective yield method. The segment's products complement the Company's overall asset/liability management in that the terms may be tailored to the needs of PLICO as the seller of the contracts. Stable value product account balances include GICs and funding agreements the Company has issued. |
Derivative Financial Instruments | Derivative Financial Instruments The Company records its derivative financial instruments in the consolidated balance sheet in "other long-term investments" and "other liabilities" in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in the statement of other comprehensive income (loss), depending upon whether the derivative instrument qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists. For cash flow hedges, the effective portion of their gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Effectiveness of the Company's hedge relationships is assessed on a quarterly basis. The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship in earnings. Changes in the fair value of derivatives that are recognized in current earnings are reported in "Realized investment gains (losses)—Derivative financial instruments". |
Insurance Liabilities and Reserves | Insurance Liabilities and Reserves Establishing an adequate liability for the Company's obligations to policyholders requires the use of certain assumptions. Estimating liabilities for future policy benefits on life and health insurance products requires the use of assumptions relative to future investment yields, mortality, morbidity, persistency, and other assumptions based on the Company's historical experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Determining liabilities for the Company's property and casualty insurance products also requires the use of assumptions, including the projected levels of used vehicle prices, the frequency and severity of claims, and the effectiveness of internal processes designed to reduce the level of claims. The Company's results depend significantly upon the extent to which its actual claims experience is consistent with the assumptions the Company used in determining its reserves and pricing its products. The Company's reserve assumptions and estimates require significant judgment and, therefore, are inherently uncertain. The Company cannot determine with precision the ultimate amounts that it will pay for actual claims or the timing of those payments. |
Guaranteed Minimum Withdrawal Benefits | Guaranteed Living Withdrawal Benefits The Company also establishes reserves for guaranteed living withdrawal benefits (“GLWB”) on its variable annuity (“VA”) products. The GLWB is valued in accordance with FASB guidance under the ASC Derivatives and Hedging Topic which utilizes the valuation technique prescribed by the ASC Fair Value Measurements and Disclosures Topic, which requires the embedded derivative to be recorded at fair value using current implied volatilities for the equity indices. The fair value of the GLWB is impacted by equity market conditions and can result in the GLWB embedded derivative being in an overall net asset or net liability position. In times of favorable equity market conditions the likelihood and severity of claims is reduced and expected fee income increases. Since claims are generally expected later than fees, these favorable equity market conditions can result in the present value of fees being greater than the present value of claims, which results in a net GLWB embedded derivative asset. In times of unfavorable equity market conditions the likelihood and severity of claims is increased and expected fee income decreases and can result in the present value of claims exceeding the present value of fees resulting in a net GLWB embedded derivative liability. The methods used to estimate the embedded derivatives employ assumptions about mortality, lapses, policyholder behavior, equity market returns, interest rates, and market volatility. The Company assumes age-based mortality from the Ruark 2015 ALB adjusted table for company experience. Differences between the actual experience and the assumptions used result in variances in profit and could result in losses. |
Goodwill | Goodwill The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. Accounting for goodwill requires an estimate of the future profitability of the associated lines of business within the Company's operating segments to assess the recoverability of the capitalized acquisition goodwill. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If the qualitative analysis does not indicate that an impairment of segment goodwill is more likely than not then no other specific quantitative impairment testing is required. If it is determined that it is more likely than not that impairment exists, the Company performs a quantitative assessment and compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions. |
Income Taxes | Income Taxes The Company and its subsidiaries file a consolidated federal income tax return that includes both life insurance companies and non-life insurance companies. The Company has one life insurance subsidiary that is not eligible to be included in the consolidated federal income tax return and files a separate corporate tax return. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Tax Reform Act"). Further information on the tax impacts of the Tax Reform Act is included in Note 18, Income Taxes . The Company uses the asset and liability method of accounting for income taxes. Generally, most items in pretax book income are also included in taxable income in the same year. However, some items are recognized for book purposes and for tax purposes in different years or are never recognized for either book or tax purposes. Those differences that will never be recognized for either book or tax purposes are permanent differences (e.g., the dividends-received deduction). As a result, the effective tax rate reflected in the financial statements may differ from the statutory rate reflected in the tax return. Those differences that are reported in different years for book and tax purposes are temporary and will reverse over time (e.g., the valuation of future policy benefits). These temporary differences are accounted for in the intervening periods as deferred tax assets and liabilities. Deferred tax assets generally represent revenue that is taxable before it is recognized in financial income and expenses that are deductible after they are recognized in financial income. Deferred tax liabilities generally represent revenues that are taxable after they are recognized in financial income or expenses or losses that are deductible before they are recognized in financial income. Components of accumulated other comprehensive income (loss) ("AOCI") are presented net of tax, and it is the Company's policy to use the aggregate portfolio approach to clear the disproportionate tax effects that remain in AOCI as a result of tax rate changes and certain other events. Under the aggregate portfolio approach, disproportionate tax effects are cleared only when the portfolio of investments that gave rise to the deferred tax item is sold or otherwise disposed of in its entirety. The application of GAAP requires the Company to evaluate the recoverability of the Company’s deferred tax assets and establish a valuation allowance, if necessary, to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company may consider many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. GAAP prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on tax returns. The application of this guidance is a two-step process, the first step being recognition. The Company determines whether it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. The Company measures the tax position as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority that has full knowledge of all relevant information. This measurement considers the amounts and probabilities of the outcomes that could be realized upon ultimate settlement using the facts, circumstances, and information available at the reporting date. The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations expires. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards, the statute of limitations does not close until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. |
Variable Interest Entities | Variable Interest Entities The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the FASB ASC (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a Variable Interest Entity ("VIE"). If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. |
Policyholder Liabilities, Revenues and Benefits Expense | Liabilities for life and annuity benefit reserves consist of liabilities for traditional life insurance, cash values associated with universal life insurance, immediate annuity benefit reserves, and other benefits associated with life and annuity benefits. The unpaid life claim liabilities consist of current pending claims as well as an estimate of incurred but not reported life insurance claims. Other policy benefit reserves consist of certain health insurance policies that are in runoff. The unpaid claim liabilities associated with other policy benefits includes current pending claims, the present value of estimated future claim payments for policies currently receiving benefits and an estimate of claims incurred but not yet reported. Traditional Life, Health, and Credit Insurance Products Traditional life insurance products consist principally of those products with fixed and guaranteed premiums and benefits, and they include whole life insurance policies, term and term-like life insurance policies, limited payment life insurance policies, and certain annuities with life contingencies. In accordance with ASC 805, the liabilities for future policy benefits on traditional life insurance products, when combined with the associated VOBA, were recorded at fair value on the date of the Merger. These values were computed using assumptions that include interest rates, mortality, lapse rates, expense estimates, and other assumptions based on the Company's experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Liabilities for future policy benefits on traditional life insurance products have been computed using a net level method including assumptions as to investment yields, mortality, persistency, and other assumptions based on the Company's experience, modified as necessary to reflect anticipated trends and to include provisions for possible adverse deviation. Reserve investment yield assumptions on December 31, 2017 (Successor Company), range from approximately 2.75% to 4.50% . The liability for future policy benefits and claims on traditional life, health, and credit insurance products includes estimated unpaid claims that have been reported to us and claims incurred but not yet reported. Policy claims are charged to expense in the period in which the claims are incurred. Traditional life insurance premiums are recognized as revenue when due. Health and credit insurance premiums are recognized as revenue over the terms of the policies. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contracts. This is accomplished by means of the provision for liabilities for future policy benefits and the amortization of DAC and VOBA. Gross premiums in excess of net premiums related to immediate annuities are deferred and recognized over the life of the policy. Universal Life and Investment Products Universal life and investment products include universal life insurance, guaranteed investment contracts, guaranteed funding agreements, deferred annuities, and annuities without life contingencies. Premiums and policy fees for universal life and investment products consist of fees that have been assessed against policy account balances for the costs of insurance, policy administration, and surrenders. Such fees are recognized when assessed and earned. Benefit reserves for universal life and investment products represent policy account balances before applicable surrender charges plus certain deferred policy initiation fees that are recognized in income over the term of the policies. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances and interest credited to policy account balances. Interest rates credited to universal life products ranged from 1.0% to 8.75% and investment products ranged from 0.5% to 11.3% in 2017 . The Company establishes liabilities for fixed indexed annuity ("FIA") products. These products are deferred fixed annuities with a guaranteed minimum interest rate plus a contingent return based on equity market performance. The FIA product is considered a hybrid financial instrument under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC" or "Codification") Topic 815 - Derivatives and Hedging which allows the Company to make the election to value the liabilities of these FIA products at fair value. This election was made for the FIA products issued prior to 2010 as the policies were issued. These products are no longer being marketed. The future changes in the fair value of the liability for these FIA products are recorded in Benefit and settlement expenses with the liability being recorded in Annuity account balances . For more information regarding the determination of fair value of annuity account balances please refer to Note 6, Fair Value of Financial Instruments . Premiums and policy fees for these FIA products consist of fees that have been assessed against the policy account balances for surrenders. Such fees are recognized when assessed and earned. The Company currently markets a deferred fixed annuity with a guaranteed minimum interest rate plus a contingent return based on equity market performance and the products are considered hybrid financial instruments under the FASB's ASC Topic 815 - Derivatives and Hedging . The Company did not elect to value these FIA products at fair value. As a result, the Company accounts for the provision that provides for a contingent return based on equity market performance as an embedded derivative. The embedded derivative is bifurcated from the host contract and recorded at fair value in Other liabilities . Changes in the fair value of the embedded derivative are recorded in Realized investment gains (losses) - Derivative financial instruments . For more information regarding the determination of fair value of the FIA embedded derivative refer to Note 6, Fair Value of Financial Instruments . The host contract is accounted for as a debt instrument in accordance with ASC Topic 944 - Financial Services—Insurance and is recorded in Annuity account balances with any discount to the minimum account value being accreted using the effective yield method. Benefits and settlement expenses include accreted interest and benefit claims incurred during the period. The Company markets universal life products with a guaranteed minimum interest rate plus a contingent return based on equity market performance and the products are considered hybrid financial instruments under the FASB's ASC Topic 815 - Derivatives and Hedging . The Company did not elect to value these indexed universal life ("IUL") products at fair value prior to the Merger date. As a result, the Company accounts for the provision that provides for a contingent return based on equity market performance as an embedded derivative. The embedded derivative is bifurcated from the host contract and recorded at fair value in Other liabilities . Changes in the fair value of the embedded derivative are recorded in Realized investment gains (losses) - Derivative financial instruments . For more information regarding the determination of fair value of the IUL embedded derivative refer to Note 6, Fair Value of Financial Instruments . The host contract is accounted for as a debt instrument in accordance with ASC Topic 944 - Financial Services - Insurance and is recorded in Future policy benefits and claims with any discount to the minimum account value being accreted using the effective yield method. Benefits and settlement expenses include accreted interest and benefit claims incurred during the period. The Company's accounting policies with respect to variable universal life ("VUL") and VA are identical except that policy account balances (excluding account balances that earn a fixed rate) are valued at fair value and reported as components of assets and liabilities related to separate accounts. The Company establishes liabilities for guaranteed minimum death benefits ("GMDB") on its VA products. The methods used to estimate the liabilities employ assumptions about mortality and the performance of equity markets. The Company assumes age-based mortality from the Ruark 2015 ALB table adjusted for company experience. Future declines in the equity market would increase the Company's GMDB liability. Differences between the actual experience and the assumptions used result in variances in profit and could result in losses. Our GMDB, as of December 31, 2017 (Successor Company), are subject to a dollar-for-dollar reduction upon withdrawal of related annuity deposits on contracts issued prior to January 1, 2003. As of December 31, 2017 (Successor Company), the GMDB reserve was $34.0 million . Property and Casualty Insurance Products Property and casualty insurance products include service contract business, surety bonds, and guaranteed asset protection ("GAP"). Premiums for service contracts and GAP products are recognized based on expected claim patterns. For all other products, premiums are generally recognized over the terms of the contract on a pro-rata basis. Fee income from providing administrative services is recognized as earned when the related services are performed. Unearned premium reserves are maintained for the portion of the premiums that is related to the unexpired period of the policy. Benefit reserves are recorded when insured events occur. Benefit reserves include case basis reserves for known but unpaid claims as of the balance sheet date as well as incurred but not reported ("IBNR") reserves for claims where the insured event has occurred but has not been reported to the Company as of the balance sheet date. The case basis reserves and IBNR are calculated based on historical experience and on assumptions relating to claim severity and frequency, the level of used vehicle prices, and other factors. These assumptions are modified as necessary to reflect anticipated trends. |
Reinsurance | Reinsurance The Company uses reinsurance extensively in certain of its segments and accounts for reinsurance and the recognition of the impact of reinsurance costs in accordance with the ASC Financial Services - Insurance Topic. The following summarizes some of the key aspects of the Company's accounting policies for reinsurance. Reinsurance Accounting Methodology —Ceded premiums of the Company's traditional life insurance products are treated as an offset to direct premium and policy fee revenue and are recognized when due to the assuming company. Ceded claims are treated as an offset to direct benefits and settlement expenses and are recognized when the claim is incurred on a direct basis. Ceded policy reserve changes are also treated as an offset to benefits and settlement expenses and are recognized during the applicable financial reporting period. Expense allowances paid by the assuming companies which are allocable to the current period are treated as an offset to other operating expenses. Since reinsurance treaties typically provide for allowance percentages that decrease over the lifetime of a policy, allowances in excess of the "ultimate" or final level allowance are capitalized. Amortization of capitalized reinsurance expense allowances representing recovery of acquisition costs is treated as an offset to direct amortization of DAC or VOBA. Amortization of deferred expense allowances is calculated as a level percentage of expected premiums in all durations given expected future lapses and mortality and accretion due to interest. The Company utilizes reinsurance on certain short duration insurance contracts (primarily issued through the Asset Protection segment). As part of these reinsurance transactions the Company receives reinsurance allowances which reimburse the Company for acquisition costs such as commissions and premium taxes. A ceding fee is also collected to cover other administrative costs and profits for the Company. As a component of reinsurance costs, reinsurance allowances are accounted for in accordance with the relevant provisions of ASC Financial Services—Insurance Topic, which state that reinsurance costs should be amortized over the contract period of the reinsurance if the contract is short-duration. Accordingly, reinsurance allowances received related to short-duration contracts are capitalized and charged to expense in proportion to premiums earned. Ceded unamortized acquisition costs are netted with direct unamortized acquisition costs in the balance sheet. Ceded premiums and policy fees on the Company's fixed universal life ("UL"), VUL, bank-owned life insurance ("BOLI"), and annuity products reduce premiums and policy fees recognized by the Company. Ceded claims are treated as an offset to direct benefits and settlement expenses and are recognized when the claim is incurred on a direct basis. Ceded policy reserve changes are also treated as an offset to benefits and settlement expenses and are recognized during the applicable valuation period. Since reinsurance treaties typically provide for allowance percentages that decrease over the lifetime of a policy, allowances in excess of the "ultimate" or final level allowance are capitalized. Amortization of capitalized reinsurance expense allowances are amortized based on future expected gross profits. Assumptions regarding mortality, lapses, and interest rates are continuously reviewed and may be periodically changed. These changes will result in "unlocking" that changes the balance in the ceded deferred acquisition cost and can affect the amortization of DAC and VOBA. Ceded unearned revenue liabilities are also amortized based on expected gross profits. Assumptions are based on the best current estimate of expected mortality, lapses and interest spread. The Company has also assumed certain policy risks written by other insurance companies through reinsurance agreements. Premiums and policy fees as well as Benefits and settlement expenses include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Assumed reinsurance is accounted for in accordance with ASC Financial Services—Insurance Topic. Reinsurance Allowances—Long-Duration Contracts —Reinsurance allowances are intended to reimburse the ceding company for some portion of the ceding company's commissions, expenses, and taxes. The amount and timing of reinsurance allowances (both first year and renewal allowances) are contractually determined by the applicable reinsurance contract and do not necessarily bear a relationship to the amount and incidence of expenses actually paid by the ceding company in any given year. Ultimate reinsurance allowances are defined as the lowest allowance percentage paid by the reinsurer in any policy duration over the lifetime of a universal life policy (or through the end of the level term period for a traditional life policy). Ultimate reinsurance allowances are determined during the negotiation of each reinsurance agreement and will differ between agreements. The Company determines its "cost of reinsurance" to include amounts paid to the reinsurer (ceded premiums) net of amounts reimbursed by the reinsurer (in the form of allowances). As noted within ASC Financial Services—Insurance Topic, "The difference, if any, between amounts paid for a reinsurance contract and the amount of the liabilities for policy benefits relating to the underlying reinsured contracts is part of the estimated cost to be amortized." The Company's policy is to amortize the cost of reinsurance over the life of the underlying reinsured contracts (for long-duration policies) in a manner consistent with the way in which benefits and expenses on the underlying contracts are recognized. For the Company's long-duration contracts, it is the Company's practice to defer reinsurance allowances as a component of the cost of reinsurance and recognize the portion related to the recovery of acquisition costs as a reduction of applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense in proportion to net revenue recognized. The remaining balance of reinsurance allowances are included as a component of the cost of reinsurance and those allowances which are allocable to the current period are recorded as an offset to operating expenses in the current period consistent with the recognition of benefits and expenses on the underlying reinsured contracts. This practice is consistent with the Company's practice of capitalizing direct expenses (e.g. commissions), and results in the recognition of reinsurance allowances on a systematic basis over the life of the reinsured policies on a basis consistent with the way in which acquisition costs on the underlying reinsured contracts would be recognized. In some cases reinsurance allowances allocable to the current period may exceed non-deferred direct costs, which may cause net other operating expenses (related to specific contracts) to be negative. Amortization of Reinsurance Allowances —Reinsurance allowances do not affect the methodology used to amortize DAC and VOBA, or the period over which such DAC and VOBA are amortized. Reinsurance allowances offset the direct expenses capitalized, reducing the net amount that is capitalized. DAC and VOBA on traditional life policies are amortized based on the pattern of estimated gross premiums of the policies in force. Reinsurance allowances do not affect the gross premiums, so therefore they do not impact traditional life amortization patterns. DAC and VOBA on universal life products are amortized based on the pattern of estimated gross profits of the policies in force. Reinsurance allowances are considered in the determination of estimated gross profits, and therefore do impact amortization patterns. Reinsurance Assets and Liabilities —Claim liabilities and policy benefits are calculated consistently for all policies, regardless of whether or not the policy is reinsured. Once the claim liabilities and policy benefits for the underlying policies are estimated, the amounts recoverable from the reinsurers are estimated based on a number of factors including the terms of the reinsurance contracts, historical payment patterns of reinsurance partners, and the financial strength and credit worthiness of reinsurance partners and recorded as Reinsurance receivables on the balance sheet. The reinsurance receivables as of the Merger date, were recorded in the balance sheet using current accounting policies and the most current assumptions. As of the Merger date, the Company also calculated the ceded VOBA associated with the reinsured policies. The reinsurance receivables combined with the associated ceded VOBA represent the fair value of the reinsurance assets as of the Merger date. Liabilities for unpaid reinsurance claims are produced from claims and reinsurance system records, which contain the relevant terms of the individual reinsurance contracts. The Company monitors claims due from reinsurers to ensure that balances are settled on a timely basis. Incurred but not reported claims are reviewed to ensure that appropriate amounts are ceded. The Company analyzes and monitors the credit worthiness of each of its reinsurance partners to minimize collection issues. For newly executed reinsurance contracts with reinsurance companies that do not meet predetermined standards, the Company requires collateral such as assets held in trusts or letters of credit. Components of Reinsurance Cost —The following income statement lines are affected by reinsurance cost: Premiums and policy fees ("reinsurance ceded" on the Company's financial statements) represent consideration paid to the assuming company for accepting the ceding company's risks. Ceded premiums and policy fees increase reinsurance cost. Benefits and settlement expenses include incurred claim amounts ceded and changes in ceded policy reserves. Ceded benefits and settlement expenses decrease reinsurance cost. Amortization of deferred policy acquisition cost and VOBA reflects the amortization of capitalized reinsurance allowances representing recovery of acquisition costs. Ceded amortization decreases reinsurance cost. Other expenses include reinsurance allowances paid by assuming companies to the Company less amounts representing recovery of acquisition costs. Reinsurance allowances decrease reinsurance cost. The Company's reinsurance programs do not materially impact the other income line of the Company's income statement. In addition, net investment income generally has no direct impact on the Company's reinsurance cost. However, it should be noted that by ceding business to the assuming companies, the Company forgoes investment income on the reserves ceded to the assuming companies. Conversely, the assuming companies will receive investment income on the reserves assumed which will increase the assuming companies' profitability on business assumed from the Company. |
Accounting Pronouncements Recently and Not Yet Adopted | Accounting Pronouncements Recently Adopted Accounting Standards Update ("ASU") 2018-02: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This Update addresses an accounting issue in which previously recorded tax effects are stranded in accumulated other comprehensive income as a result of the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act ("Tax Reform Act"). The Update allows reclassification from accumulated other comprehensive income to retained earnings of such stranded tax effects. The amount of the reclassification is equal to the difference between the historical corporate income tax rate and the newly enacted corporate income tax rate. The Update is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company elected to adopt the amendments in this Update on a retrospective basis, upon issuance, and recorded an entry as of December 31, 2017 to reclassify stranded tax effects from accumulated other comprehensive income to retained earnings in the amount of $25.8 million . ASU No. 2017-04-Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This Update simplifies the goodwill impairment test by re-defining the concept of goodwill impairment as the condition that exists when the carrying amount of a reporting unit exceeds its fair value. The Update eliminates “Step 2” of the current goodwill impairment test, which requires entities to determine goodwill impairment by calculating the implied fair value of goodwill by remeasuring to fair value the assets and liabilities of a reporting unit as if that reporting unit had been acquired in a business combination. The Company elected to adopt the amendments in the Update in the first quarter of 2017, and applied the revised guidance to impairment tests conducted after January 1, 2017. Application of the revised guidance did not impact the Company’s financial position or results of operations. For more details regarding the Company’s goodwill assessment process, please refer to Note 11, Goodwill . ASU No. 2015-09 - Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts. The amendments in this Update require additional disclosures for short-duration contracts issued by insurance entities. The additional disclosures focus on the liability for unpaid claims and claim adjustment expenses and include incurred and paid claims development information by accident year in tabular form, along with a reconciliation of this information to the statement of financial position. For accident years included in the development tables, the amendments also require disclosure of the total incurred-but-not-reported liabilities and expected development on reported claims, along with claims frequency information unless impracticable. Finally, the amendments require disclosure of the historical average annual percentage payout of incurred claims. With the exception of the current reporting period, claims development information may be presented as supplementary information. The Update is effective for annual periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The additional disclosures introduced in this Update have not been provided, as the short-duration lines of business to which they apply are not material to the Company’s financial statements. Accounting Pronouncements Not Yet Adopted ASU No. 2014-09 - Revenue from Contracts with Customers (Topic 606). This Update provides for significant revisions to the recognition of revenue from contracts with customers across various industries. Under the new guidance, entities are required to apply a prescribed 5-step process to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting for revenues associated with insurance products is not within the scope of this Update. The Update was originally effective for annual and interim periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU No. 2015-14 - Revenues from Contracts with Customers: Deferral of the Effective Date , to defer the effective date of ASU No. 2014-09 by one year to annual and interim periods beginning after December 15, 2017. The Company will adopt this Update using the modified retrospective approach via a cumulative effect adjustment to retained earnings as of January 1, 2018. The amendments in the Update, along with clarifying updates issued subsequent to ASU 2014-09, will impact some of the Company's smaller lines of business, specifically revenues at the Company's affiliated broker dealers and insurance agency, and certain revenues associated with the Company's Asset Protection products. However, the cumulative effect adjustment related to the Company's adoption of the revised guidance is limited to the Company's Asset Protection segment. Specifically, the Company will revise its pattern of recognition of administrative fees associated with certain vehicle service and GAP products. Previously, these fees were recognized based on the work effort involved in satisfying the Company’s contract obligations. In consideration of the amendments in ASU 2014-09, the Company will recognize these fees based on expected claim patterns. The cumulative effect adjustment as of January 1, 2018 will result in a decrease in retained earnings of $92.5 million . The pre-tax cumulative effect adjustment was consistent with the Company's previous estimates, as disclosed in its Form 10-Q for the period ended September 30, 2017. However, the reduction in the federal corporate income tax rate due to the enactment of the Tax Reform Act resulted in an increase in the net impact to retained earnings. The Company will also implement minor changes to its accounting and disclosures with respect to the lines of business referenced above to ensure compliance with the revised guidance. ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, the Update requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The Update also introduces a single-step impairment model for equity investments without a readily determinable fair value. Additionally, the Update requires changes in instrument-specific credit risk for fair value option liabilities to be recorded in other comprehensive income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017 and will be applied on a modified retrospective basis. The Company recorded a cumulative-effect adjustment as of the date of adoption, January 1, 2018, transferring unrealized gains and losses on available-for-sale equity securities to retained earnings from accumulated other comprehensive income. The impact of this adjustment, net of income tax, resulted in a $10.7 million increase to retained earnings. The Company will make updates to its disclosures in the first quarter in order to comply with the new guidance. ASU No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change will relate to the accounting model used by lessees. The Update will require all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The lease asset and liability will be measured at the present value of the minimum lease payments less any upfront payments or fees. The Update also requires numerous disclosure changes for which the Company is assessing the impact. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company has completed an inventory of all leases in the organization and is currently assessing the impact of the Update and updating internal processes to ensure compliance with the revised guidance. ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this Update introduce a new current expected credit loss (“CECL”) model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance against earnings its estimate of the contractual cash flows not expected to be collected on day one of the asset’s acquisition. The allowance may be reversed through earnings if a security recovers in value. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred and recognizes a security’s subsequent recovery in value in other comprehensive income. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. Similar to the CECL model, credit loss impairments will be recorded in an allowance against earnings that may be reversed for subsequent recoveries in value. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results. ASU No. 2016-15 - Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update are intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Specific transactions addressed in the new guidance include: Debt prepayment/extinguishment costs, contingent consideration payments, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investments. The Update does not introduce any new accounting or financial reporting requirements, and is effective for annual and interim periods beginning after December 15, 2017 using the retrospective method. There will be no financial impact on adoption while the Company expects a minor operational impact to cash flow statement reporting. ASU No. 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Task Force). The amendments in this update provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing diversity in practice related to the presentation of these amounts. The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Update is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. There will be no impact to the Company on adoption. ASU No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business. The purpose of this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in the Update provide a specific test by which an entity may determine whether an acquisition involves a set of assets or a business. The amendments in the Update are to be applied prospectively for periods beginning after December 15, 2017. The Company has reviewed the revised requirements, and does not anticipate that the changes will impact its policies or recent conclusions related to its acquisition activities. ASU No. 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require entities to disaggregate the current-service-cost component from other components of net benefit cost and present it with other current compensation costs in the income statement. The other components of net benefit cost must be presented outside of income from operations if that subtotal is presented. In addition, the Update requires entities to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. The amendments in this update are effective for interim and annual periods beginning after December 15, 2017. As provided for in the ASU, the Company expects to apply the provisions of the statement retrospectively for components of net periodic pension costs and prospectively for capitalization of the service costs component of net periodic costs and net periodic postretirement benefits. The Update will not impact the Company’s financial position, results of operations, or current disclosures. ASU No. 2017-08 - Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this update require that premiums on callable debt securities be amortized to the first call date. This is a change from current guidance, under which premiums are amortized to the maturity date of the security. The amendments are effective for annual and interim periods beginning after December 31, 2018, and early adoption is permitted. Transition will be through a modified retrospective approach in which the cumulative effect of application is recorded to retained earnings at the beginning of the annual period in which an entity adopts the revised guidance. The Company is currently reviewing its systems and processes to determine the financial and operational impact of implementing the Update, as well as to determine whether early adoption of the revised guidance is practicable. ASU No. 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this update are designed to permit hedge accounting to be applied to a broader range of hedging strategies as well as to more closely align hedge accounting and risk management objectives. Specific provisions include requiring changes in the fair value of a hedging instrument be recorded in the same income statement line as the hedged item when it affects earnings. In addition, after a hedge has initially qualified as an effective hedge the Update permits the use of a qualitative hedge effectiveness test in subsequent periods. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact this standard will have on its operations and financial results. |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of indefinite-lived intangible assets | Intangible assets recognized by the Company included the following (excluding goodwill): Successor Company As of December 31, Estimated 2017 2016 Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 402,975 $ 428,499 14-22 Trade names 85,340 92,049 13-17 Technology 107,343 121,253 7-14 Other 35,914 14,282 Total intangible assets subject to amortization 631,572 656,083 Insurance licenses 32,000 32,000 Indefinite Total intangible assets $ 663,572 $ 688,083 |
Schedule of finite-lived intangible assets | Intangible assets recognized by the Company included the following (excluding goodwill): Successor Company As of December 31, Estimated 2017 2016 Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 402,975 $ 428,499 14-22 Trade names 85,340 92,049 13-17 Technology 107,343 121,253 7-14 Other 35,914 14,282 Total intangible assets subject to amortization 631,572 656,083 Insurance licenses 32,000 32,000 Indefinite Total intangible assets $ 663,572 $ 688,083 |
Schedule of future estimated aggregate amortization expense | The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Thousands) 2018 $ 56,011 2019 52,898 2020 49,897 2021 48,105 2022 45,771 Amortizable intangible assets will be amortized straight line over their assigned useful lives. The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Thousands) 2017 $ 4,843 2018 4,843 2019 4,843 2020 4,843 2021 4,843 |
Schedule of property and equipment | Property and equipment consisted of the following: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Home office building $ 68,123 $ 67,279 Data processing equipment 24,102 21,750 Other, principally furniture and equipment 17,198 9,612 Total property and equipment subject to depreciation 109,423 98,641 Accumulated depreciation (22,926 ) (17,450 ) Land 24,920 24,920 Total property and equipment $ 111,417 $ 106,111 |
Schedule of future maturities of stable value products | As of December 31, 2017 (Successor Company), future maturities of stable value products were as follows: Year of Maturity Amount (Dollars In Millions) 2018 $ 888.0 2019 - 2020 2,479.5 2021 - 2022 1,201.0 Thereafter 124.8 |
Schedule of future policy benefit liabilities | Future policy benefit liabilities for the year indicated are as follows: Successor Company As of December 31, As of December 31, 2017 2016 2017 2016 Total Policy Liabilities and Accruals Reinsurance Receivable (Dollars In Thousands) (Dollars In Thousands) Life and annuity benefit reserves $ 29,972,938 $ 29,574,479 $ 3,898,079 $ 4,191,845 Unpaid life claim liabilities 595,188 517,257 362,827 323,630 Life and annuity future policy benefits 30,568,126 30,091,736 4,260,906 4,515,475 Other policy benefits reserves 157,101 170,519 92,330 103,746 Other policy benefits unpaid claim liabilities 232,365 248,830 185,826 200,655 Future policy benefits and claims and associated reinsurance receivable $ 30,957,592 $ 30,511,085 $ 4,539,062 $ 4,819,876 Unearned premiums 875,405 848,495 536,636 503,970 Total policy liabilities and accruals and associated reinsurance receivable $ 31,832,997 $ 31,359,580 $ 5,075,698 $ 5,323,846 |
Reinsurance receivable | Future policy benefit liabilities for the year indicated are as follows: Successor Company As of December 31, As of December 31, 2017 2016 2017 2016 Total Policy Liabilities and Accruals Reinsurance Receivable (Dollars In Thousands) (Dollars In Thousands) Life and annuity benefit reserves $ 29,972,938 $ 29,574,479 $ 3,898,079 $ 4,191,845 Unpaid life claim liabilities 595,188 517,257 362,827 323,630 Life and annuity future policy benefits 30,568,126 30,091,736 4,260,906 4,515,475 Other policy benefits reserves 157,101 170,519 92,330 103,746 Other policy benefits unpaid claim liabilities 232,365 248,830 185,826 200,655 Future policy benefits and claims and associated reinsurance receivable $ 30,957,592 $ 30,511,085 $ 4,539,062 $ 4,819,876 Unearned premiums 875,405 848,495 536,636 503,970 Total policy liabilities and accruals and associated reinsurance receivable $ 31,832,997 $ 31,359,580 $ 5,075,698 $ 5,323,846 The following table reflects the effect of reinsurance on life, accident/health, and property and liability insurance premiums written and earned: Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017: Premiums and policy fees: Life insurance $ 2,655,846 $ (1,151,175 ) $ 435,113 $ 1,939,784 (1) Accident/health insurance 51,991 (33,051 ) 14,945 33,885 Property and liability insurance 309,848 (176,509 ) 9,676 143,015 Total $ 3,017,685 $ (1,360,735 ) $ 459,734 $ 2,116,684 December 31, 2016: Premiums and policy fees: Life insurance $ 2,610,682 $ (1,126,915 ) $ 454,999 $ 1,938,766 (1) Accident/health insurance 58,076 (36,935 ) 17,439 38,580 Property and liability insurance 261,009 (150,866 ) 5,726 115,869 Total $ 2,929,767 $ (1,314,716 ) $ 478,164 $ 2,093,215 February 1, 2015 to December 31, 2015 Premiums and policy fees: Life insurance $ 2,360,643 $ (983,143 ) $ 308,280 $ 1,685,780 (1) Accident/health insurance 70,243 (36,871 ) 18,252 51,624 Property and liability insurance 243,728 (134,964 ) 6,904 115,668 Total $ 2,674,614 $ (1,154,978 ) $ 333,436 $ 1,853,072 Gross Amount Ceded to Assumed Net (Dollars In Thousands) Predecessor Company January 1, 2015 to January 31, 2015: Premiums and policy fees: Life insurance $ 204,185 $ (74,539 ) $ 28,601 $ 158,247 (1) Accident/health insurance 6,846 (4,621 ) 1,809 4,034 Property and liability insurance 19,759 (10,796 ) 666 9,629 Total $ 230,790 $ (89,956 ) $ 31,076 $ 171,910 (1) Includes annuity policy fees of $173.5 million , $160.4 million , $152.8 million , and $13.9 million for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), for the periods of February 1, 2015 to December 31, 2015 (Successor Company) and January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. |
SIGNIFICANT TRANSACTIONS (Table
SIGNIFICANT TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Summary of fair values of the net assets acquired | The following table summarizes the fair values of the net assets acquired as of the acquisition date: Fair Value As of December 1, 2016 (Dollars in Thousands) Assets Fixed maturities $ 10,592 Other long-term investments 2,340 Cash 122,167 Accrued investment income 52 Accounts and premiums receivables 18,536 Reinsurance receivable 9,397 Value of businesses acquired 5,079 Goodwill 61,027 Other intangibles 70,400 Property and equipment 390 Accrued income taxes 4,161 Other assets 40 Total assets 304,181 Liabilities Unearned premiums $ 82,757 Other policyholders' funds 21,483 Other liabilities 24,951 Deferred income taxes 38,929 Total liabilities 168,120 Net assets acquired $ 136,061 |
Schedule of intangible assets recognized | Intangible assets recognized by the Company included the following (excluding goodwill): Estimated Fair Value on Estimated Acquisition Date Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 65,000 13-21 Trade names 1,400 5-6 Technology 4,000 8-11 Total intangible assets $ 70,400 |
Schedule of future estimated aggregate amortization expense | The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Thousands) 2018 $ 56,011 2019 52,898 2020 49,897 2021 48,105 2022 45,771 Amortizable intangible assets will be amortized straight line over their assigned useful lives. The following is a schedule of future estimated aggregate amortization expense: Year Amount (Dollars In Thousands) 2017 $ 4,843 2018 4,843 2019 4,843 2020 4,843 2021 4,843 |
Pro forma information | The following (unaudited) pro forma condensed consolidated results of operations assumes that the acquisition of US Warranty was completed as of January 1, 2015: Successor Company For The Year Ended December 31, 2016 February 1, 2015 to December 31, 2015 (Dollars In Thousands) Revenue (1) $ 4,532,292 $ 3,753,700 Net income (2) 393,277 268,479 (1) Includes $4.7 million of revenue recognized in the Company's net income for year ended December 31, 2016 (Successor Company). (2) Includes $0.2 million of net income recognized in the Company's net income for the year ended December 31, 2016 (Successor Company). |
MONY CLOSED BLOCK OF BUSINESS (
MONY CLOSED BLOCK OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Closed Block Disclosure [Abstract] | |
Summary of financial information for the Closed Block | Summarized financial information for the Closed Block as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company) and is as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders' account balances and other policyholder liabilities $ 5,791,867 $ 5,896,355 Policyholder dividend obligation 160,712 31,932 Other liabilities 30,764 40,007 Total closed block liabilities 5,983,343 5,968,294 Closed block assets Fixed maturities, available-for-sale, at fair value 4,669,856 4,440,105 Mortgage loans on real estate 108,934 201,088 Policy loans 700,769 712,959 Cash and other invested assets 31,182 108,270 Other assets 122,637 135,794 Total closed block assets 5,633,378 5,598,216 Excess of reported closed block liabilities over closed block assets 349,965 370,078 Portion of above representing accumulated other comprehensive income: Net unrealized investments gains (losses) net of policyholder dividend obligation: $(13,429) and $(197,450); and net of income tax: $2,820 and $69,107 — — Future earnings to be recognized from closed block assets and closed block liabilities $ 349,965 $ 370,078 |
Schedule of reconciliation of the policyholder dividend obligation | Reconciliation of the policyholder dividend obligation is as follows: Successor Company For The Year Ended For The Year Ended December 31, 2016 (Dollars In Thousands) Policyholder dividend obligation, beginning balance $ 31,932 $ — Applicable to net revenue (losses) (55,241 ) (46,557 ) Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation 184,021 78,489 Policyholder dividend obligation, ending balance $ 160,712 $ 31,932 |
Schedule of Closed Block revenues and expenses | Closed Block revenues and expenses were as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 to January 31, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Premiums and other income $ 180,097 $ 189,700 $ 185,562 $ 15,065 Net investment income 203,964 211,175 193,203 19,107 Net investment gains 910 1,524 3,333 568 Total revenues 384,971 402,399 382,098 34,740 Benefits and other deductions Benefits and settlement expenses 335,200 353,488 336,629 31,152 Other operating expenses 1,940 2,804 1,001 — Total benefits and other deductions 337,140 356,292 337,630 31,152 Net revenues before income taxes 47,831 46,107 44,468 3,588 Income tax expense 27,718 16,137 14,920 1,256 Net revenues $ 20,113 $ 29,970 $ 29,548 $ 2,332 |
INVESTMENT OPERATIONS (Tables)
INVESTMENT OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INVESTMENT OPERATIONS [Abstract] | |
Summary of major categories of net investment income | Major categories of net investment income are summarized as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 1,631,565 $ 1,552,999 $ 1,267,900 $ 140,104 Equity securities 39,806 38,838 40,907 2,572 Mortgage loans 298,387 270,749 252,577 24,977 Investment real estate 2,481 2,153 2,528 112 Short-term investments 108,476 106,828 93,982 9,713 2,080,715 1,971,567 1,657,894 177,478 Other investment expenses 29,127 29,111 24,946 2,298 Net investment income $ 2,051,588 $ 1,942,456 $ 1,632,948 $ 175,180 |
Summary of net realized investment gains (losses) for all other investments | Net realized investment gains (losses) for all other investments are summarized as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 12,941 $ 32,210 $ 1,282 $ 6,891 Equity securities (2,330 ) 92 (1,001 ) — Impairments on securities (11,742 ) (17,748 ) (26,993 ) (481 ) Modco trading portfolio 119,206 67,583 (167,359 ) 73,062 Other investments (8,389 ) (9,226 ) 192 1,200 Total realized gains (losses)—investments $ 109,686 $ 72,911 $ (193,879 ) $ 80,672 Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Gross realized gains $ 18,868 $ 42,085 $ 8,745 $ 6,920 Gross realized losses: Impairments losses $ (11,742 ) $ (17,748 ) $ (26,993 ) $ (481 ) Other realized losses $ (8,257 ) $ (9,783 ) $ (8,463 ) $ 12 |
Schedule of investments' gross unrealized losses and fair value of the Company's investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position. Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 879,181 $ 1,198,333 $ 950,874 $ 172,551 Gains realized $ 18,868 $ 42,085 $ 8,745 $ 6,920 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 185,157 $ 85,835 $ 178,415 $ 435 Losses realized $ (8,257 ) $ (9,783 ) $ (8,463 ) $ (29 ) (1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process. The following table includes the gross unrealized losses and fair value of the Company's investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2017 (Successor Company): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 766,599 $ (9,671 ) $ 416,221 $ (13,362 ) $ 1,182,820 $ (23,033 ) Commercial mortgage-backed securities 757,471 (8,592 ) 796,456 (21,594 ) 1,553,927 (30,186 ) Other asset-backed securities 86,506 (322 ) 134,316 (5,441 ) 220,822 (5,763 ) U.S. government-related securities 94,110 (688 ) 1,072,232 (31,489 ) 1,166,342 (32,177 ) Other government-related securities 24,830 (169 ) 115,294 (4,778 ) 140,124 (4,947 ) States, municipalities, and political subdivisions 170,268 (1,738 ) 1,027,747 (43,874 ) 1,198,015 (45,612 ) Corporate securities 5,054,316 (55,795 ) 10,962,689 (472,394 ) 16,017,005 (528,189 ) Redeemable preferred stock 22,048 (1,120 ) 23,197 (2,383 ) 45,245 (3,503 ) Equities 86,586 (1,401 ) 91,195 (7,370 ) 177,781 (8,771 ) $ 7,062,734 $ (79,496 ) $ 14,639,347 $ (602,685 ) $ 21,702,081 $ (682,181 ) The following table includes the gross unrealized losses and fair value of the Company's investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2016 (Successor Company): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 1,060,569 $ (21,550 ) $ 170,826 $ (4,117 ) $ 1,231,395 $ (25,667 ) Commercial mortgage-backed securities 1,452,146 (37,665 ) 100,475 (4,013 ) 1,552,621 (41,678 ) Other asset-backed securities 323,706 (9,291 ) 176,792 (11,407 ) 500,498 (20,698 ) U.S. government-related securities 1,237,942 (40,454 ) 3 (1 ) 1,237,945 (40,455 ) Other government-related securities 98,412 (2,907 ) 79,393 (11,890 ) 177,805 (14,797 ) States, municipalities, and political subdivisions 1,062,368 (63,809 ) 548,254 (41,749 ) 1,610,622 (105,558 ) Corporate securities 12,553,514 (469,189 ) 9,793,579 (1,114,729 ) 22,347,093 (1,583,918 ) Redeemable preferred Stock 66,781 (6,642 ) 19,062 (1,877 ) 85,843 (8,519 ) Equities 411,845 (15,273 ) 69,497 (6,412 ) 481,342 (21,685 ) $ 18,267,283 $ (666,780 ) $ 10,957,881 $ (1,196,195 ) $ 29,225,164 $ (1,862,975 ) |
Schedule of amortized cost and fair value of the Company's investments classified as available-for-sale | The amortized cost and fair value of the Company's investments classified as available-for-sale are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Successor Company As of December 31, 2017 Fixed maturities: Residential mortgage-backed securities $ 2,330,832 $ 19,413 $ (23,033 ) $ 2,327,212 $ 10 Commercial mortgage-backed securities 1,914,998 5,010 (30,186 ) 1,889,822 — Other asset-backed securities 1,234,376 20,936 (5,763 ) 1,249,549 — U.S. government-related securities 1,255,244 185 (32,177 ) 1,223,252 — Other government-related securities 282,767 9,463 (4,948 ) 287,282 — States, municipals, and political subdivisions 1,770,299 16,959 (45,613 ) 1,741,645 (37 ) Corporate securities 29,606,484 623,713 (528,187 ) 29,702,010 (1 ) Redeemable preferred stock 94,362 232 (3,503 ) 91,091 — 38,489,362 695,911 (673,410 ) 38,511,863 (28 ) Equity securities 735,569 22,318 (8,771 ) 749,116 — Short-term investments 558,949 — — 558,949 — $ 39,783,880 $ 718,229 $ (682,181 ) $ 39,819,928 $ (28 ) As of December 31, 2016 Fixed maturities: Residential mortgage-backed securities $ 1,913,413 $ 10,737 $ (25,667 ) $ 1,898,483 $ (9 ) Commercial mortgage-backed securities 1,850,620 2,528 (41,678 ) 1,811,470 — Other asset-backed securities 1,210,490 21,741 (20,698 ) 1,211,533 — U.S. government-related securities 1,308,192 422 (40,455 ) 1,268,159 — Other government-related securities 253,182 1,536 (14,797 ) 239,921 — States, municipals, and political subdivisions 1,760,837 1,224 (105,558 ) 1,656,503 — Corporate securities 28,801,768 153,715 (1,583,918 ) 27,371,565 (11,030 ) Redeemable preferred stock 94,362 — (8,519 ) 85,843 — 37,192,864 191,903 (1,841,290 ) 35,543,477 (11,039 ) Equity securities 761,340 7,751 (21,685 ) 747,406 — Short-term investments 279,782 — — 279,782 — $ 38,233,986 $ 199,654 $ (1,862,975 ) $ 36,570,665 $ (11,039 ) (1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above. |
Schedule of Fair Value of Trading Securities | The fair value of the Company's investments classified as trading are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Fixed maturities - trading: Residential mortgage-backed securities $ 259,694 $ 255,027 Commercial mortgage-backed securities 146,804 149,683 Other asset-backed securities 138,097 200,084 U.S. government-related securities 27,234 26,961 Other government-related securities 63,925 63,012 States, municipals, and political subdivisions 326,925 316,519 Corporate securities 1,698,183 1,624,589 Redeemable preferred stock 3,327 3,985 2,664,189 2,639,860 Equity securities 5,244 7,083 Short-term investments 56,261 52,648 $ 2,725,694 $ 2,699,591 |
Schedule of amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities, by expected maturity | The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of December 31, 2017 (Successor Company), by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment. Available-for-sale Held-to-maturity Amortized Cost Fair Value Amortized Cost Fair Value (Dollars In Thousands) (Dollars In Thousands) Due in one year or less $ 723,923 $ 723,435 $ — $ — Due after one year through five years 6,657,059 6,639,380 — — Due after five years through ten years 7,475,095 7,481,482 — — Due after ten years 23,633,285 23,667,566 2,718,904 2,776,327 $ 38,489,362 $ 38,511,863 $ 2,718,904 $ 2,776,327 |
Gain (Loss) on Investments | The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities or equity securities. Fixed Maturities Equity Securities Total Securities (Dollars In Thousands) For The Year Ended December 31, 2017 (Successor Company) Other-than-temporary impairments $ (1,332 ) $ (2,630 ) $ (3,962 ) Non-credit impairment losses recorded in other comprehensive income (7,780 ) — (7,780 ) Net impairment losses recognized in earnings $ (9,112 ) $ (2,630 ) $ (11,742 ) For The Year Ended December 31, 2016 (Successor Company) Other-than-temporary impairments $ (32,075 ) $ — $ (32,075 ) Non-credit impairment losses recorded in other comprehensive income 14,327 — 14,327 Net impairment losses recognized in earnings $ (17,748 ) $ — $ (17,748 ) For The Period of February 1, 2015 to December 31, 2015 (Successor Company) Other-than-temporary impairments $ (28,659 ) $ — $ (28,659 ) Non-credit impairment losses recorded in other comprehensive income 1,666 — 1,666 Net impairment losses recognized in earnings $ (26,993 ) $ — $ (26,993 ) For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company) Other-than-temporary impairments $ (636 ) $ — $ (636 ) Non-credit impairment losses recorded in other comprehensive income 155 — 155 Net impairment losses recognized in earnings $ (481 ) $ — $ (481 ) |
Schedule of available-for-sale credit losses on fixed maturities held by the Company for which a portion of other-than-temporary impairments were recognized in other comprehensive income (loss) | The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ 12,685 $ 22,761 $ — $ 15,478 Additions for newly impaired securities 734 14,876 22,761 — Additions for previously impaired securities 3,175 2,063 — 221 Reductions for previously impaired securities due to a change in expected cash flows (12,726 ) (24,396 ) — — Reductions for previously impaired securities that were sold in the current period (600 ) (2,619 ) — — Other — — — — Ending balance $ 3,268 $ 12,685 $ 22,761 $ 15,699 |
Summary of change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale | The change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale is summarized as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 1,086,727 $ 802,368 $ (1,874,469 ) $ 670,229 Equity securities 17,863 (13,463 ) 4,406 10,226 |
Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity | The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of December 31, 2017 ( Successor Company ) and December 31, 2016 ( Successor Company ), are as follows: Successor Company Amortized Gross Unrecognized Holding Gains Gross Unrecognized Holding Losses Fair Value Total OTTI Recognized in OCI As of December 31, 2017 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 704,904 $ — $ (19,163 ) $ 685,741 $ — Steel City LLC 2,014,000 76,586 — 2,090,586 — $ 2,718,904 $ 76,586 $ (19,163 ) $ 2,776,327 $ — Successor Company Amortized Gross Gross Fair Value Total OTTI Recognized in OCI As of December 31, 2016 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 654,177 $ — $ (67,222 ) $ 586,955 $ — Steel City LLC 2,116,000 30,385 — 2,146,385 — $ 2,770,177 $ 30,385 $ (67,222 ) $ 2,733,340 $ — |
FAIR VALUE OF FINANCIAL INSTR43
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities—available-for-sale Residential mortgage-backed securities $ — $ 2,327,212 $ — $ 2,327,212 Commercial mortgage-backed securities — 1,889,822 — 1,889,822 Other asset-backed securities — 745,184 504,365 1,249,549 U.S. government-related securities 958,775 264,477 — 1,223,252 State, municipalities, and political subdivisions — 1,741,645 — 1,741,645 Other government-related securities — 287,282 — 287,282 Corporate securities — 29,075,109 626,901 29,702,010 Redeemable preferred stock 72,471 18,620 — 91,091 Total fixed maturity securities—available-for-sale 1,031,246 36,349,351 1,131,266 38,511,863 Fixed maturity securities—trading Residential mortgage-backed securities — 259,694 — 259,694 Commercial mortgage-backed securities — 146,804 — 146,804 Other asset-backed securities — 102,875 35,222 138,097 U.S. government-related securities 21,183 6,051 — 27,234 State, municipalities, and political subdivisions — 326,925 — 326,925 Other government-related securities — 63,925 — 63,925 Corporate securities — 1,692,741 5,442 1,698,183 Redeemable preferred stock 3,327 — — 3,327 Total fixed maturity securities—trading 24,510 2,599,015 40,664 2,664,189 Total fixed maturity securities 1,055,756 38,948,366 1,171,930 41,176,052 Equity securities 688,214 36 66,110 754,360 Other long-term investments (1) 51,102 417,969 136,004 605,075 Short-term investments 482,461 132,749 — 615,210 Total investments 2,277,533 39,499,120 1,374,044 43,150,697 Cash 252,310 — — 252,310 Other assets 28,771 — — 28,771 Assets related to separate accounts Variable annuity 13,956,071 — — 13,956,071 Variable universal life 1,035,202 — — 1,035,202 Total assets measured at fair value on a recurring basis $ 17,549,887 $ 39,499,120 $ 1,374,044 $ 58,423,051 Liabilities: Annuity account balances (2) $ — $ — $ 83,472 $ 83,472 Other liabilities (1) 5,755 240,927 760,890 1,007,572 Total liabilities measured at fair value on a recurring basis $ 5,755 $ 240,927 $ 844,362 $ 1,091,044 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 (Predecessor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities—available-for-sale Residential mortgage-backed securities $ — $ 1,898,480 $ 3 $ 1,898,483 Commercial mortgage-backed securities — 1,811,470 — 1,811,470 Other asset-backed securities — 648,929 562,604 1,211,533 U.S. government-related securities 1,002,020 266,139 — 1,268,159 State, municipalities, and political subdivisions — 1,656,503 — 1,656,503 Other government-related securities — 239,921 — 239,921 Corporate securities — 26,707,519 664,046 27,371,565 Redeemable preferred stock 66,781 19,062 — 85,843 Total fixed maturity securities—available-for-sale 1,068,801 33,248,023 1,226,653 35,543,477 Fixed maturity securities—trading Residential mortgage-backed securities — 255,027 — 255,027 Commercial mortgage-backed securities — 149,683 — 149,683 Other asset-backed securities — 115,521 84,563 200,084 U.S. government-related securities 22,424 4,537 — 26,961 State, municipalities, and political subdivisions — 316,519 — 316,519 Other government-related securities — 63,012 — 63,012 Corporate securities — 1,619,097 5,492 1,624,589 Redeemable preferred stock 3,985 — — 3,985 Total fixed maturity securities—trading 26,409 2,523,396 90,055 2,639,860 Total fixed maturity securities 1,095,210 35,771,419 1,316,708 38,183,337 Equity securities 685,443 36 69,010 754,489 Other long-term investments (1) 82,420 335,498 124,325 542,243 Short-term investments 328,829 3,602 — 332,431 Total investments 2,191,902 36,110,555 1,510,043 39,812,500 Cash 348,182 — — 348,182 Other assets 23,830 — — 23,830 Assets related to separate accounts Variable annuity 13,244,252 — — 13,244,252 Variable universal life 895,925 — — 895,925 Total assets measured at fair value on a recurring basis $ 16,704,091 $ 36,110,555 $ 1,510,043 $ 54,324,689 Liabilities: Annuity account balances (2) $ — $ — $ 87,616 $ 87,616 Other liabilities (1) 13,004 163,974 571,843 748,821 Total liabilities measured at fair value on a recurring basis $ 13,004 $ 163,974 $ 659,459 $ 836,437 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. |
Schedule of the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of the financial instruments | The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 504,228 Liquidation Liquidation value $90 - $97 ($94.91) Discounted cash flow Liquidity premium 0.06% - 1.17% (0.75%) Paydown rate 11.31% - 11.97% (11.54%) Corporate securities 617,770 Discounted cash flow Spread over treasury 0.81% - 3.95% (1.06%) Liabilities: (1) Embedded derivatives—GLWB (2) $ 111,760 Actuarial cash flow model Mortality 91.1% to 106.6% of Ruark 2015 ALB table Lapse 1.0% - 30.0%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.11% - 0.79% Embedded derivative—FIA 218,676 Actuarial cash flow model Expenses $146 per policy Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 1.0% - 30.0%, depending on duration/surrender charge period Nonperformance risk 0.11% - 0.79% Embedded derivative—IUL 80,212 Actuarial cash flow model Mortality 34% - 152% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.11% - 0.79% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 553,308 Discounted cash flow Liquidation value $88 - $97.25 ($95.04) Corporate securities 638,279 Discounted cash flow Spread over treasury 0.31% - 4.50% (2.04%) Liabilities: (1) Embedded derivatives—GLWB (2) $ 115,370 Actuarial cash flow model Mortality 91.1% to 106.6% of Ruark 2015 ALB table Lapse 0.3% - 15%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.18% - 1.09% Embedded derivative—FIA 147,368 Actuarial cash flow model Expenses $126 per policy Asset Earned Rate 4.08% - 4.66% Withdrawal rate 1% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 2.0% - 40.0%, depending on duration/surrender charge period Nonperformance risk 0.18% - 1.09% Embedded derivative - IUL 46,051 Actuarial cash flow model Mortality 38% - 153% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.18% - 1.09% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. |
Schedule of reconciliation of the beginning and ending balances for fair value measurements, for which the Company has used significant unobservable inputs (Level 3) | The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the year ended December 31, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3): Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date Total Realized and Unrealized Gains Total Realized and Unrealized Losses Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Commercial mortgage-backed securities — — 7 — (1,750 ) 25,607 — — — (23,844 ) (20 ) — — Other asset-backed securities 587,031 6,859 42,865 — (29,673 ) 30,441 (79,314 ) — — 7,457 (3,062 ) 562,604 — U.S. government-related securities — — — — — — — — — — — — — States, municipals, and political subdivisions — — — — — — — — — — — — — Other government-related securities — — — — — — — — — — — — — Corporate securities 902,119 925 40,574 (4,135 ) (33,151 ) 102,426 (225,557 ) — — (109,792 ) (9,363 ) 664,046 — Total fixed maturity securities— available-for-sale 1,489,153 7,784 83,446 (4,135 ) (64,574 ) 158,474 (304,871 ) — — (126,179 ) (12,445 ) 1,226,653 — Fixed maturity securities—trading Residential mortgage-backed securities — — — — — — — — — — — — — Commercial mortgage-backed securities — — — — — — — — — — — — — Other asset-backed securities 152,912 5,386 — (4,790 ) — — (70,270 ) — — 172 1,153 84,563 594 U.S. government-related securities — — — — — — — — — — — — — States, municipals and political subdivisions — — — — — — — — — — — — — Other government-related securities — — — — — — — — — — — — — Corporate securities 18,225 713 — (442 ) — 10,906 (4,071 ) — — (19,722 ) (117 ) 5,492 101 Total fixed maturity securities—trading 171,137 6,099 — (5,232 ) — 10,906 (74,341 ) — — (19,550 ) 1,036 90,055 695 Total fixed maturity securities 1,660,290 13,883 83,446 (9,367 ) (64,574 ) 169,380 (379,212 ) — — (145,729 ) (11,409 ) 1,316,708 695 Equity securities 69,763 — — (740 ) — 23 — — — (36 ) — 69,010 — Other long-term investments (1) 96,830 77,108 — (49,613 ) — — — — — — — 124,325 27,495 Short-term investments — — — — — — — — — — — — — Total investments 1,826,883 90,991 83,446 (59,720 ) (64,574 ) 169,403 (379,212 ) — — (145,765 ) (11,409 ) 1,510,043 28,190 Total assets measured at fair value on a recurring basis $ 1,826,883 $ 90,991 $ 83,446 $ (59,720 ) $ (64,574 ) $ 169,403 $ (379,212 ) $ — $ — $ (145,765 ) $ (11,409 ) $ 1,510,043 $ 28,190 Liabilities: Annuity account balances (2) $ 92,512 $ — $ — $ (3,144 ) $ — $ — $ — $ 555 $ 9,844 $ — $ 1,249 $ 87,616 $ — Other liabilities (1) 585,556 499,894 — (486,181 ) — — — — — — — 571,843 13,713 Total liabilities measured at fair value on a recurring basis $ 678,068 $ 499,894 $ — $ (489,325 ) $ — $ — $ — $ 555 $ 9,844 $ — $ 1,249 $ 659,459 $ 13,713 (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the year ended December 31, 2017 (Successor Company), for which the Company has used significant unobservable inputs (Level 3): Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date Total Realized and Unrealized Gains Total Realized and Unrealized Losses Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ 83 $ — $ — $ 11,862 $ (3 ) $ — $ — $ (11,944 ) $ (1 ) $ — $ — Commercial mortgage-backed securities — — — — — — — — — — — — — Other asset-backed securities 562,604 1,409 15,136 — (10,931 ) 100 (59,175 ) — — (6,643 ) 1,865 504,365 — U.S. government-related securities — — — — — — — — — — — — — States, municipals, and political subdivisions — — — — — — — — — — — — — Other government-related securities — — — — — — — — — — — — — Corporate securities 664,046 — 27,637 — (13,089 ) 131,822 (169,002 ) — — (10,353 ) (4,160 ) 626,901 — Total fixed maturity securities— available-for-sale 1,226,653 1,409 42,856 — (24,020 ) 143,784 (228,180 ) — — (28,940 ) (2,296 ) 1,131,266 — Fixed maturity securities—trading Residential mortgage-backed securities — — — — — — — — — — — — — Commercial mortgage-backed securities — — — — — — — — — — — — — Other asset-backed securities 84,563 3,768 — (1,157 ) — — (52,835 ) — — — 883 35,222 3,483 U.S. government-related securities — — — — — — — — — — — — — States, municipals and political subdivisions — — — — — — — — — — — — — Other government-related securities — — — — — — — — — — — — — Corporate securities 5,492 101 — (58 ) — — — — — — (93 ) 5,442 44 Total fixed maturity securities—trading 90,055 3,869 — (1,215 ) — — (52,835 ) — — — 790 40,664 3,527 Total fixed maturity securities 1,316,708 5,278 42,856 (1,215 ) (24,020 ) 143,784 (281,015 ) — — (28,940 ) (1,506 ) 1,171,930 3,527 Equity securities 69,010 2 52 (2,630 ) (53 ) — (274 ) — — 3 — 66,110 3 Other long-term investments (1) 124,325 27,158 — (15,479 ) — — — — — — — 136,004 11,679 Short-term investments — — — — — — — — — — — — — Total investments 1,510,043 32,438 42,908 (19,324 ) (24,073 ) 143,784 (281,289 ) — — (28,937 ) (1,506 ) 1,374,044 15,209 Total assets measured at fair value on a recurring basis $ 1,510,043 $ 32,438 $ 42,908 $ (19,324 ) $ (24,073 ) $ 143,784 $ (281,289 ) $ — $ — $ (28,937 ) $ (1,506 ) $ 1,374,044 $ 15,209 Liabilities: Annuity account balances (2) $ 87,616 $ — $ — $ (4,001 ) $ — $ — $ — $ 623 $ 8,768 $ — $ — $ 83,472 $ — Other liabilities (1) 571,843 93,071 — (282,118 ) — — — — — — — 760,890 (189,047 ) Total liabilities measured at fair value on a recurring basis $ 659,459 $ 93,071 $ — $ (286,119 ) $ — $ — $ — $ 623 $ 8,768 $ — $ — $ 844,362 $ (189,047 ) (1) Represents certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. |
Schedule of the carrying amounts and estimated fair value of the Company's financial instruments | The carrying amounts and estimated fair values of the Company's financial instruments as of the periods shown below are as follows: Successor Company As of December 31, 2017 2016 Fair Value Level Carrying Amounts Fair Values Carrying Amounts Fair Values (Dollars In Thousands) (Dollars In Thousands) Assets: Mortgage loans on real estate 3 $ 6,817,723 $ 6,740,177 $ 6,132,125 $ 5,930,992 Policy loans 3 1,615,615 1,615,615 1,650,240 1,650,240 Fixed maturities, held-to-maturity (1) 3 2,718,904 2,776,327 2,770,177 2,733,340 Liabilities: Stable value product account balances 3 $ 4,698,371 $ 4,698,868 $ 3,501,636 $ 3,488,877 Future policy benefits and claims (2) 3 220,498 220,498 221,634 221,658 Other policyholders' funds (3) 3 133,508 134,253 135,367 136,127 Debt: (4) Bank borrowings 3 $ — $ — $ 170,000 $ 170,000 Senior Notes 2 943,370 933,926 993,285 937,074 Subordinated debt securities 2 495,289 501,215 441,202 443,355 Non-recourse funding obligations (5) 3 2,747,477 2,804,983 2,796,474 2,765,558 Except as noted below, fair values were estimated using quoted market prices. (1) Securities purchased from unconsolidated subsidiaries, Red Mountain LLC and Steel City LLC. (2) Single premium immediate annuity without life contingencies. (3) Supplementary contracts without life contingencies. (4) Excludes capital lease obligations of $1.7 million . (5) As of December 31, 2017 (Successor Company), carrying amount of $2.7 billion and a fair value of $2.8 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. As of December 31, 2016 (Successor Company), $2.7 billion in carrying amount and fair value related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. |
DERIVATIVE FINANCIAL INSTRUME44
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of realized investments gains and losses | The following table sets forth realized investment gains and losses for the periods shown: Realized investment gains (losses)—derivative financial instruments Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures - VA $ 26,015 $ (3,450 ) $ (14,818 ) $ 1,413 Equity futures - VA (91,776 ) (106,431 ) (5,033 ) 9,221 Currency futures - VA (23,176 ) 33,836 7,169 7,778 Equity options - VA (94,791 ) (60,962 ) (27,733 ) 3,047 Interest rate swaptions - VA (2,490 ) (1,161 ) (13,354 ) 9,268 Interest rate swaps - VA 27,981 20,420 (85,942 ) 122,710 Total return swaps - VA (32,240 ) — — — Embedded derivative - GLWB 3,614 68,056 4,412 (207,018 ) Total derivatives related to VA contracts (186,863 ) (49,692 ) (135,299 ) (53,581 ) Derivatives related to FIA contracts: Embedded derivative - FIA (55,878 ) (16,494 ) (738 ) 1,769 Equity futures - FIA 642 4,248 (355 ) (184 ) Volatility futures - FIA — — 5 — Equity options - FIA 44,585 8,149 1,211 (2,617 ) Total derivatives related to FIA contracts (10,651 ) (4,097 ) 123 (1,032 ) Derivatives related to IUL contracts: Embedded derivative - IUL (14,117 ) 9,529 (614 ) (486 ) Equity futures - IUL (818 ) 129 144 3 Equity options - IUL 9,580 3,477 (540 ) (115 ) Total derivatives related to IUL contracts (5,355 ) 13,135 (1,010 ) (598 ) Embedded derivative - Modco reinsurance treaties (103,009 ) 390 166,092 (68,026 ) Other derivatives 50 (24 ) 91 (37 ) Total realized gains (losses)—derivatives $ (305,828 ) $ (40,288 ) $ 29,997 $ (123,274 ) |
Schedule of components of the gain or loss on derivatives that qualify as a cash flow hedging relationship | The following tables present the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship: Gain (Loss) on Derivatives in Cash Flow Relationship Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Effective Portion) (Effective Portion) (Ineffective Portion) Benefits and settlement expenses Realized investment gains (losses) (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017 Foreign currency swaps $ (867 ) $ (694 ) $ — Total $ (867 ) $ (694 ) $ — Successor Company For The Year Ended December 31, 2016 Foreign currency swaps $ 1,058 $ (60 ) $ — Total $ 1,058 $ (60 ) $ — February 1, 2015 to December 31, 2015 Inflation $ (131 ) $ (131 ) $ 73 Total $ (131 ) $ (131 ) $ 73 Predecessor Company January 1, 2015 to January 31, 2015 Inflation $ 13 $ (36 ) $ (7 ) Total $ 13 $ (36 ) $ (7 ) |
Schedule of information about the nature and accounting treatment of the Company's primary derivative financial instruments and the location in and effect on the consolidated financial statements | The tables below present information about the nature and accounting treatment of the Company's primary derivative financial instruments and the location in and effect on the consolidated financial statements for the periods presented below: Successor Company As of December 31, 2017 2016 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) Other long-term investments Cash flow hedges: Foreign currency swaps $ 117,178 $ 6,016 $ 117,178 $ 132 Derivatives not designated as hedging instruments: Interest rate swaps 1,265,000 55,411 1,135,000 71,644 Total return swaps 190,938 135 — — Embedded derivative - Modco reinsurance treaties 64,472 1,009 64,123 2,573 Embedded derivative - GLWB 4,897,069 134,995 4,601,633 121,752 Interest rate futures 1,071,870 3,178 102,587 894 Equity futures 62,266 154 654,113 5,805 Currency futures 1,117 2 340,058 7,883 Equity options 4,436,467 403,961 3,944,444 328,908 Interest rate swaptions 225,000 14 225,000 2,503 Other 157 200 212 149 $ 12,331,534 $ 605,075 $ 11,184,348 $ 542,243 Other liabilities Derivatives not designated as hedging instruments: Interest rate swaps $ 597,500 $ 2,960 $ 575,000 $ 10,208 Total return swaps 243,388 318 — — Embedded derivative - Modco reinsurance treaties 2,390,539 215,247 2,450,692 141,301 Embedded derivative - GLWB 4,718,311 246,755 5,962,044 237,122 Embedded derivative - FIA 1,951,650 218,676 1,496,346 147,368 Embedded derivative - IUL 168,349 80,212 103,838 46,051 Interest rate futures 230,404 917 993,842 6,611 Equity futures 318,795 2,593 102,667 2,907 Currency futures 255,248 2,087 — — Equity options 3,112,812 237,807 2,590,160 157,253 $ 13,986,996 $ 1,007,572 $ 14,274,589 $ 748,821 |
OFFSETTING OF ASSETS AND LIAB45
OFFSETTING OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Offsetting [Abstract] | |
Schedule of derivative instruments by assets | The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2017 (Successor Company): Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Assets Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 468,871 $ — $ 468,871 $ 242,105 $ 108,830 $ 117,936 Total derivatives, subject to a master netting arrangement or similar arrangement 468,871 — 468,871 242,105 108,830 117,936 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 1,009 — 1,009 — — 1,009 Embedded derivative - GLWB 134,995 — 134,995 — — 134,995 Other 200 — 200 — — 200 Total derivatives, not subject to a master netting arrangement or similar arrangement 136,204 — 136,204 — — 136,204 Total derivatives 605,075 — 605,075 242,105 108,830 254,140 Total Assets $ 605,075 $ — $ 605,075 $ 242,105 $ 108,830 $ 254,140 The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2016 (Successor Company): Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Assets Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 417,769 $ — $ 417,769 $ 171,384 $ 100,890 $ 145,495 Total derivatives, subject to a master netting arrangement or similar arrangement 417,769 — 417,769 171,384 100,890 145,495 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 2,573 — 2,573 — — 2,573 Embedded derivative - GLWB 121,752 — 121,752 — — 121,752 Other 149 — 149 — — 149 Total derivatives, not subject to a master netting arrangement or similar arrangement 124,474 — 124,474 — — 124,474 Total derivatives 542,243 — 542,243 171,384 100,890 269,969 Total Assets $ 542,243 $ — $ 542,243 $ 171,384 $ 100,890 $ 269,969 |
Schedule of derivative instruments by liabilities | Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Liabilities Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 246,682 $ — $ 246,682 $ 242,105 $ 4,577 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 246,682 — 246,682 242,105 4,577 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 215,247 — 215,247 — — 215,247 Embedded derivative - GLWB 246,755 — 246,755 — — 246,755 Embedded derivative - FIA 218,676 — 218,676 — — 218,676 Embedded derivative - IUL 80,212 — 80,212 — — 80,212 Total derivatives, not subject to a master netting arrangement or similar arrangement 760,890 — 760,890 — — 760,890 Total derivatives 1,007,572 — 1,007,572 242,105 4,577 760,890 Repurchase agreements (1) 885,000 — 885,000 — — 885,000 Total Liabilities $ 1,892,572 $ — $ 1,892,572 $ 242,105 $ 4,577 $ 1,645,890 (1) Borrowings under repurchase agreements are for a term less than 90 days. Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amounts Offset in the Statement of Financial Position Gross Amounts of Recognized Liabilities Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 176,979 $ — $ 176,979 $ 171,384 $ 5,595 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 176,979 — 176,979 171,384 5,595 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 141,301 — 141,301 — — 141,301 Embedded derivative - GLWB 237,122 — 237,122 — — 237,122 Embedded derivative - FIA 147,368 — 147,368 — — 147,368 Embedded derivative - IUL 46,051 — 46,051 — — 46,051 Total derivatives, not subject to a master netting arrangement or similar arrangement 571,842 — 571,842 — — 571,842 Total derivatives 748,821 — 748,821 171,384 5,595 571,842 Repurchase agreements (1) 797,721 — 797,721 — — 797,721 Total Liabilities $ 1,546,542 $ — $ 1,546,542 $ 171,384 $ 5,595 $ 1,369,563 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
MORTGAGE LOANS (Tables)
MORTGAGE LOANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
MORTGAGE LOANS | |
Schedule of the breakdown of the commercial mortgage loan portfolio by property type | The following table includes a breakdown of the Company's commercial mortgage loan portfolio by property type as of December 31, 2017 (Successor Company): Type Percentage of Mortgage Loans on Real Estate Retail 52.1 % Office Buildings 10.9 Apartments 8.8 Warehouses 10.4 Senior housing 13.7 Other 4.1 100.0 % |
Schedule of mortgage loans by location of properties | Approximately 64.4% of the mortgage loans are on properties located in the following states: State Percentage of Mortgage Loans on Real Estate Alabama 9.6 % Florida 9.4 Texas 8.4 Georgia 7.9 Ohio 5.5 Tennessee 5.3 California 5.2 South Carolina 3.3 North Carolina 4.9 Utah 4.9 64.4 % |
Schedule of changes in the allowance for mortgage loan credit losses | A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property: Successor Company As of As of December 31, 2016 (Dollars In Thousands) Beginning balance $ 724 $ — Charge offs (6,708 ) (4,682 ) Recoveries (731 ) — Provision 6,715 5,406 Ending balance $ — $ 724 |
Schedule of an analysis of the delinquent loans | An analysis of the delinquent loans is shown in the following chart: 30 - 59 Days Delinquent 60 - 89 Days Delinquent Greater than 90 Days Delinquent Total Delinquent (Dollars In Thousands) Successor Company As of December 31, 2017 Commercial mortgage loans $ 1,817 $ — $ — $ 1,817 Number of delinquent commercial mortgage loans 2 — — 2 As of December 31, 2016 Commercial mortgage loans $ 3,669 $ — $ — $ 3,669 Number of delinquent commercial mortgage loans 4 — — 4 |
Schedule of information regarding impaired loans | For information regarding impaired loans, please refer to the following chart: Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Cash Basis Interest Income (Dollars In Thousands) Successor Company As of December 31, 2017 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded — — — — — — As of December 31, 2016 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 1,819 1,819 724 1,819 96 96 |
Schedule of mortgage loans that were modified in a troubled debt restructuring | Mortgage loans that were modified in a troubled debt restructuring as of December 31, 2017 (Successor Company) were as follows: Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars In Thousands) Successor Company As of December 31, 2017 Troubled debt restructuring: Commercial mortgage loans 1 $ 418 $ 418 |
DEFERRED POLICY ACQUISITION C47
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED | |
Schedule of balances and changes in DAC | The balances and changes in DAC are as follows: Successor Company As of As of December 31, 2016 (Dollars In Thousands) Balance, beginning of period $ 572,328 $ 288,611 Capitalization of commissions, sales, and issue expenses 333,250 327,938 Amortization (52,559 ) (48,286 ) Change due to unrealized investment gains and losses (15,234 ) 4,065 Balance, end of period $ 837,785 $ 572,328 |
Schedule of balances and changes in VOBA | The balances and changes in VOBA are as follows: Successor Company As of As of December 31, 2016 (Dollars In Thousands) Balance, beginning of period $ 1,447,501 $ 1,270,197 Acquisitions — 285,092 Amortization (25,662 ) (100,778 ) Change due to unrealized investment gains and losses (60,047 ) (7,010 ) Balance, end of period $ 1,361,792 $ 1,447,501 |
Schedule of expected amortization of VOBA for the next five years | Based on the balance recorded as of December 31, 2017 (Successor Company), the expected amortization of VOBA for the next five years is as follows: Expected Years Amortization (Dollars In Thousands) 2018 $ 122,802 2019 118,196 2020 103,120 2021 90,544 2022 83,333 |
CERTAIN NONTRADITIONAL LONG-D48
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | |
Schedule of activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) is as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ 34,796 $ 36,427 $ 29,010 $ 26,251 Incurred guarantee benefits 849 678 10,175 3,073 Less: Paid guarantee benefits 1,615 2,309 2,758 449 Ending balance $ 34,030 $ 34,796 $ 36,427 $ 28,875 |
Schedule of account balances of variable annuities with guarantees invested in VA separate accounts | Account balances of variable annuities with guarantees invested in VA separate accounts are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Equity mutual funds $ 8,798,847 $ 8,071,204 Fixed income mutual funds 5,005,663 5,085,864 Total $ 13,804,510 $ 13,157,068 |
Schedule of activity in the Company's deferred sales inducement asset | Activity in the Company's deferred sales inducement asset was as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Deferred asset, beginning of period $ 22,497 $ 11,756 $ — $ 155,150 Amounts deferred 14,246 16,212 14,557 82 Amortization (5,787 ) (5,471 ) (2,801 ) (1,139 ) Deferred asset, end of period $ 30,956 $ 22,497 $ 11,756 $ 154,093 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance Disclosures [Abstract] | |
Schedule of net life insurance in-force | The following table presents the net life insurance in-force: Successor Company As of December 31, 2017 2016 (Dollars In Millions) Direct life insurance in-force $ 751,512 $ 739,249 Amounts assumed from other companies 110,205 116,265 Amounts ceded to other companies (328,377 ) (348,995 ) Net life insurance in-force $ 533,340 $ 506,519 Percentage of amount assumed to net 21 % 23 % |
Schedule of effect of reinsurance on life insurance premiums written and earned | Future policy benefit liabilities for the year indicated are as follows: Successor Company As of December 31, As of December 31, 2017 2016 2017 2016 Total Policy Liabilities and Accruals Reinsurance Receivable (Dollars In Thousands) (Dollars In Thousands) Life and annuity benefit reserves $ 29,972,938 $ 29,574,479 $ 3,898,079 $ 4,191,845 Unpaid life claim liabilities 595,188 517,257 362,827 323,630 Life and annuity future policy benefits 30,568,126 30,091,736 4,260,906 4,515,475 Other policy benefits reserves 157,101 170,519 92,330 103,746 Other policy benefits unpaid claim liabilities 232,365 248,830 185,826 200,655 Future policy benefits and claims and associated reinsurance receivable $ 30,957,592 $ 30,511,085 $ 4,539,062 $ 4,819,876 Unearned premiums 875,405 848,495 536,636 503,970 Total policy liabilities and accruals and associated reinsurance receivable $ 31,832,997 $ 31,359,580 $ 5,075,698 $ 5,323,846 The following table reflects the effect of reinsurance on life, accident/health, and property and liability insurance premiums written and earned: Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017: Premiums and policy fees: Life insurance $ 2,655,846 $ (1,151,175 ) $ 435,113 $ 1,939,784 (1) Accident/health insurance 51,991 (33,051 ) 14,945 33,885 Property and liability insurance 309,848 (176,509 ) 9,676 143,015 Total $ 3,017,685 $ (1,360,735 ) $ 459,734 $ 2,116,684 December 31, 2016: Premiums and policy fees: Life insurance $ 2,610,682 $ (1,126,915 ) $ 454,999 $ 1,938,766 (1) Accident/health insurance 58,076 (36,935 ) 17,439 38,580 Property and liability insurance 261,009 (150,866 ) 5,726 115,869 Total $ 2,929,767 $ (1,314,716 ) $ 478,164 $ 2,093,215 February 1, 2015 to December 31, 2015 Premiums and policy fees: Life insurance $ 2,360,643 $ (983,143 ) $ 308,280 $ 1,685,780 (1) Accident/health insurance 70,243 (36,871 ) 18,252 51,624 Property and liability insurance 243,728 (134,964 ) 6,904 115,668 Total $ 2,674,614 $ (1,154,978 ) $ 333,436 $ 1,853,072 Gross Amount Ceded to Assumed Net (Dollars In Thousands) Predecessor Company January 1, 2015 to January 31, 2015: Premiums and policy fees: Life insurance $ 204,185 $ (74,539 ) $ 28,601 $ 158,247 (1) Accident/health insurance 6,846 (4,621 ) 1,809 4,034 Property and liability insurance 19,759 (10,796 ) 666 9,629 Total $ 230,790 $ (89,956 ) $ 31,076 $ 171,910 (1) Includes annuity policy fees of $173.5 million , $160.4 million , $152.8 million , and $13.9 million for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), for the periods of February 1, 2015 to December 31, 2015 (Successor Company) and January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. |
Schedule of receivables attributable to more significant reinsurance partners | The following table sets forth the receivables attributable to our more significant reinsurance partners: Successor Company As of December 31, 2017 2016 Reinsurance Receivable A.M. Best Rating Reinsurance Receivable A.M. Best Rating (Dollars In Millions) Security Life of Denver Insurance Company $ 740.8 A $ 762.2 A Swiss Re Life & Health America, Inc. 614.8 A+ 682.6 A+ Lincoln National Life Insurance Co. 489.1 A+ 530.9 A+ Transamerica Life Insurance Co. 335.6 A+ 367.8 A+ SCOR Global Life (1) 331.8 A+ 354.8 A RGA Reinsurance Company 278.3 A+ 269.0 A+ American United Life Insurance Company 266.7 A+ 285.6 A+ Scottish Re (U.S.) Inc. 249.5 NR 232.8 NR Centre Reinsurance (Bermuda) Ltd 212.2 NR 243.6 NR Employers Reassurance Corporation 193.9 A- 201.7 A- (1) Includes SCOR Global Life Americas Reinsurance Company, SCOR Global Life USA Reinsurance Co, and SCOR Global Life Reinsurance Co of Delaware |
DEBT AND OTHER OBLIGATIONS (Tab
DEBT AND OTHER OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of debt and subordinated debt securities | Debt and subordinated debt securities are summarized as follows: Successor Company As of December 31, 2017 2016 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Credit Facility $ — $ — $ 170,000 $ 170,000 Capital lease obligation 1,682 1,682 — — 6.40% Senior Notes (2007), due 2018 150,000 150,518 150,000 156,663 7.375% Senior Notes (2009), due 2019 400,000 435,806 400,000 454,688 8.45% Senior Notes (2009), due 2039 232,928 357,046 246,926 381,934 $ 784,610 $ 945,052 $ 966,926 $ 1,163,285 Subordinated debt securities (year of issue): 6.25% Subordinated Debentures (2012), due 2042, callable 2017 $ — $ — $ 287,500 $ 290,002 6.00% Subordinated Debentures (2012), due 2042, callable 2017 — — 150,000 151,200 5.35% Subordinated Debentures (2017), due 2052 500,000 495,289 — — $ 500,000 $ 495,289 $ 437,500 $ 441,202 |
Summary of estimated debt covenant calculations | The following is a summary of the Company's estimated debt covenant calculations as of December 31, 2017 (Successor Company): Requirement Actual Results Consolidated net worth margin greater than or equal to $0 greater than $1 billion Debt to total capital ratio less than 40% less than 22% The following is a summary of the Company's estimated synthetic lease covenant calculations as of December 31, 2017 (Successor Company): Requirement Actual Results Consolidated net worth margin greater than or equal to $0 greater than $4 billion Debt to total capital ratio less than 40% less than 19% Total adjusted capital ratio greater than or equal to $0 greater than $3 billion Interest cash inflow available compared to adjusted consolidated interest expense greater than 2.0 to 1 greater than 9.0 to 1 |
Non-recourse funding obligations outstanding | Non-recourse funding obligations outstanding as of December 31, 2017 (Successor Company), on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year Year-to-Date Weighted-Avg Interest Rate (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,014,000 $ 2,014,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 49,787 2052 3.88 % Golden Gate V Vermont Captive Insurance Company (2)(3) 620,000 681,285 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,405 2024 6.19 % Total $ 2,693,691 $ 2,747,477 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations Non-recourse funding obligations outstanding as of December 31, 2016 (Successor Company), on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year Year-to-Date Golden Gate Captive Insurance Company (2)(3) $ 2,116,000 $ 2,116,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 49,983 2052 2.52 % Golden Gate V Vermont Captive Insurance Company (2)(3) 565,000 628,025 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,466 2024 6.19 % Total $ 2,740,691 $ 2,796,474 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations |
Schedule of collateral pledged for repurchase agreements | The following table provides the fair value of collateral pledged for repurchase agreements, grouped by asset class, as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company): Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2017 (Successor Company) (Dollars In Thousands) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 307,633 $ — $ — $ — $ 307,633 Mortgage loans 698,974 — — — 698,974 Total repurchase agreements and repurchase-to-maturity transactions 1,006,607 — — — 1,006,607 Securities lending transactions Corporate securities 118,817 — — — 118,817 Equity securities 5,699 — — — 5,699 Redeemable preferred stock 755 — — — 755 Total securities lending transactions 125,271 — — — 125,271 Total securities $ 1,131,878 $ — $ — $ — $ 1,131,878 Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2016 (Successor Company) (Dollars In Thousands) Overnight and Greater Than Continuous Up to 30 days 30 - 90 days 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 357,705 $ 23,758 $ — $ — $ 381,463 Mortgage loans 480,269 — — — 480,269 Total securities $ 837,974 $ 23,758 $ — $ — $ 861,732 |
Interest Income and Interest Expense Disclosure | Interest expense is summarized as follows: Successor Company Predecessor Company For The Year Ended December 31, 2017 For The Year Ended December 31, 2016 February 1, 2015 to December 31, 2015 January 1, 2015 to January 31, 2015 (Dollars In Millions) (Dollars In Millions) Debt and subordinated debt securities $ 61.3 $ 62.1 $ 58.6 $ 8.9 Non-recourse funding obligations, other obligations, and repurchase agreements 171.9 163.7 54.1 4.9 Total interest expense $ 233.2 $ 225.8 $ 112.7 $ 13.8 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Operating leased assets | |
Estimated Synthetic Lease Covenant Calculation | The following is a summary of the Company's estimated debt covenant calculations as of December 31, 2017 (Successor Company): Requirement Actual Results Consolidated net worth margin greater than or equal to $0 greater than $1 billion Debt to total capital ratio less than 40% less than 22% The following is a summary of the Company's estimated synthetic lease covenant calculations as of December 31, 2017 (Successor Company): Requirement Actual Results Consolidated net worth margin greater than or equal to $0 greater than $4 billion Debt to total capital ratio less than 40% less than 19% Total adjusted capital ratio greater than or equal to $0 greater than $3 billion Interest cash inflow available compared to adjusted consolidated interest expense greater than 2.0 to 1 greater than 9.0 to 1 |
Administrative and marketing office space | |
Operating leased assets | |
Schedule of future minimum rental payments required under operating leases | The following is a schedule by year of future minimum rental payments required under these leases: Year Amount (Dollars In Thousands) 2018 $ 4,562 2019 4,320 2020 4,044 2021 3,778 2022 3,520 Thereafter 8,945 |
Building contiguous to home office | |
Operating leased assets | |
Schedule of future minimum rental payments required under operating leases | The following is a schedule by year of future minimum rental payments required under this lease: Year Amount (Dollars In Thousands) 2018 $ 77,219 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Schedule of benefit obligation, fair value of plan assets and the funded status of the Company's defined benefit pension plan and unfunded excess benefit plan | The following table presents the benefit obligation, fair value of plan assets, funded status, and amounts not yet recognized as components of net periodic pension costs for the Company's defined benefit pension plan and unfunded excess benefit plan as of December 31, 2017 and 2016 (Successor Company): Successor Company December 31, 2017 December 31, 2016 Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Benefit Plan (Dollars In Thousands) Accumulated benefit obligation, end of year $ 278,084 $ 50,149 $ 247,595 $ 45,594 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 265,848 $ 47,802 $ 268,221 $ 56,985 Service cost 12,011 1,350 12,791 1,413 Interest cost 9,846 1,480 9,751 1,353 Amendments — — — — Actuarial (gain)/loss 26,539 7,861 5,988 4,124 Benefits paid (13,821 ) (3,903 ) (30,903 ) (16,073 ) Projected benefit obligation at end of year 300,423 54,590 265,848 47,802 Change in plan assets: Fair value of plan assets at beginning of year 201,843 — 196,042 — Actual return on plan assets 29,404 — 15,815 — Employer contributions (1) 43,500 3,903 20,889 16,073 Benefits paid (2) (13,821 ) (3,903 ) (30,903 ) (16,073 ) Fair value of plan assets at end of year 260,926 — 201,843 — After reflecting FASB guidance: Funded status (39,497 ) (54,590 ) (64,005 ) (47,802 ) Amounts recognized in the balance sheet: Other liabilities (39,497 ) (54,590 ) (64,005 ) (47,802 ) Amounts recognized in accumulated other comprehensive income: Net actuarial (gain)/loss 2,850 13,521 (7,855 ) 6,294 Prior service cost/(credit) — — — — Total amounts recognized in AOCI $ 2,850 $ 13,521 $ (7,855 ) $ 6,294 (1) Employer contributions disclosed are based on the Company's fiscal filing year (2) Includes amount related to Mr. Johns' conversion of his benefit under the Nonqualified Excess Pension Plan to a Retirement Pay Deferral Account as discussed above in Nonqualified Excess Pension Plan |
Schedule of weighted-average assumptions used to determine benefit obligations | Weighted-average assumptions used to determine benefit obligations as of December 31 are as follows: Successor Company Qualified Pension Plan Nonqualified Excess Pension Plan 2017 2016 2017 2016 Discount rate 3.55 % 4.04 % 3.26 % 3.60 % Rate of compensation increase 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above |
Schedule of weighted-average assumptions used to determine the net periodic benefit cost | Weighted-average assumptions used to determine the net periodic benefit cost for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016 (Successor Company), and for the period of February 1, 2015 to December 31, 2015 (Successor Company) are as follows: Successor Company For The Year Ended December 31, 2017 2016 2015 2017 2016 2015 Qualified Pension Plan Nonqualified Excess Pension Plan Discount rate 4.04 % 4.29 % 3.95 % 3.60 % 3.63 % 3.65 % Rate of compensation increase 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above 4.75% prior to age 40/ 3.75% for age 40 and above Expected long-term return on plan assets 7.00 % 7.25 % 7.50 % N/A N/A N/A |
Components of the net periodic benefit cost of the Company's defined benefit pension plan and unfunded excess benefit plan | Components of the net periodic benefit cost for the year ended December 31, 2017 (Successor Company), for the year ended December 31, 2016, for the period of February 1, 2015 to December 31, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company) are as follows: Successor Company Predecessor Company For The Year Ended December 31, February 1, 2015 January 1, 2015 2017 2017 2016 2016 Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan (Dollars In Thousands) (Dollars In Thousands) Service cost—benefits earned during the period $ 12,011 $ 1,350 $ 12,791 $ 1,413 $ 11,220 $ 1,229 $ 974 $ 95 Interest cost on projected benefit obligation 9,846 1,480 9,751 1,353 9,072 1,499 1,002 140 Expected return on plan assets (13,570 ) — (13,780 ) — (13,214 ) — (1,293 ) — Amortization of prior service cost/(credit) — — — — — — (33 ) 1 Amortization of actuarial loss/(gain) (1) — 634 — 178 — — 668 138 Preliminary net periodic benefit cost 8,287 3,464 8,762 2,944 7,078 2,728 1,318 374 Settlement/curtailment expense (2) — — (964 ) 2,135 — — — — Total net periodic benefit cost $ 8,287 $ 3,464 $ 7,798 $ 5,079 $ 7,078 $ 2,728 $ 1,318 $ 374 (1) 2017 average remaining service period used is 9.24 years and 8.23 years for the Qualified Pension Plan and Nonqualified Excess Pension Plan, respectively. (2) The Nonqualified Excess Pension Plan triggered settlement accounting for the year ended December 31, 2016 since the total lump sum payments exceeded the settlement threshold of service cost plus interest cost. |
Schedule of estimated future benefit payments under defined benefit pension plan | Estimated future benefit payments under the Qualified Pension Plan and Nonqualified Excess Pension Plan are as follows: Years Qualified Pension Plan Nonqualified Excess Pension Plan (Dollars In Thousands) 2018 $ 19,479 $ 3,542 2019 20,719 7,242 2020 21,062 6,087 2021 21,351 5,709 2022 23,537 6,267 2023 - 2027 116,400 23,324 |
Schedule of allocation of plan assets by category | Allocation of plan assets of the Qualified Pension Plan by category as of December 31 are as follows: Successor Company Asset Category Target Allocation for 2018 2017 (1) 2016 Cash and cash equivalents 2 % 15 % 2 % Equity securities 60 55 61 Fixed income 38 30 37 Total 100 % 100 % 100 % (1) During 2017, the Company made a $43.5 million contribution to the defined benefit pension plan and allocated the contribution to cash and cash equivalents pending further analysis of its investment strategy. The plan's investment policy was amended to allow for an actual asset allocation outside of the current target allocation until the investment strategy analysis is complete. The Company anticipates completing this analysis during the first quarter of 2018. |
Schedule of fair value of plan assets by category | The fair value of each major category of plan assets for the Company's postretirement life insurance plan is as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Category of Investment Money market fund $ 5,104 $ 5,362 Plan assets of the Qualified Pension Plan by category as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Asset Category Cash and cash equivalents $ 39,897 $ 4,175 Equity securities: Collective Russell 3000 equity index fund 74,511 67,627 Fidelity Spartan 500 index fund 71,632 58,815 Fixed income 74,886 71,226 Total investments 260,926 201,843 Employer contribution receivable — — Total $ 260,926 $ 201,843 |
Schedule of fair value of plan assets, set forth by level, within the fair value hierarchy | The following table sets forth by level, within the fair value hierarchy, the life insurance plan's assets at fair value as of December 31, 2017 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Money market fund $ 5,104 $ — $ — $ 5,104 The following table sets forth by level, within the fair value hierarchy, the life insurance plan's assets at fair value as of December 31, 2016 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Money market fund $ 5,362 $ — $ — $ 5,362 The following table sets forth by level, within the fair value hierarchy, the Qualified Pension Plan's assets at fair value as of December 31, 2017 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Collective short-term investment fund $ 39,897 $ — $ — $ 39,897 Collective investment funds: Equity index funds 71,632 74,511 — 146,143 Group deposit administration annuity contract — — 74,886 74,886 Total investments $ 111,529 $ 74,511 $ 74,886 $ 260,926 The following table sets forth by level, within the fair value hierarchy, the Qualified Pension Plan's assets at fair value as of December 31, 2016 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Collective short-term investment fund $ 4,175 $ — $ — $ 4,175 Collective investment funds: Equity index funds 58,815 67,627 — 126,442 Group deposit administration annuity contract — — 71,226 71,226 Total investments $ 62,990 $ 67,627 $ 71,226 $ 201,843 |
Summary of plan investments measured at a fair value based on NAV per share | The following table summarizes the Qualified Pension Plan investments measured at fair value based on NAV per share as of December 31, 2017 (Successor Company) and December 31, 2016 (Successor Company), respectively: Name Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period (Dollars In Thousands) Successor Company As of December 31, 2017: Collective short-term investment fund $ 39,897 Not Applicable Daily 1 day Collective Russell 3000 index fund (1) 74,511 Not Applicable Daily 1 day Fidelity Spartan 500 index fund 71,632 Not Applicable Daily 1 day As of December 31, 2016: Collective short-term investment fund $ 4,175 Not Applicable Daily 1 day Collective Russell 3000 index fund (1) 67,627 Not Applicable Daily 1 day Fidelity Spartan 500 index fund 58,815 Not Applicable Daily 1 day (1) Non-lending collective trust that does not publish a daily NAV but tracks the Russell 3000 index and provides a daily NAV to the Plan. |
Reconciliation of the beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) have been used | The following table presents a reconciliation of the beginning and ending balances for the fair value measurements for the year ended December 31, 2017 (Successor Company) and for the year ended December 31, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3): Successor Company December 31, 2017 December 31, 2016 (Dollars In Thousands) Balance, beginning of year $ 71,226 $ 67,707 Interest income 3,660 3,519 Transfers from collective short-term investments fund — — Transfers to collective short-term investments fund — — Balance, end of year $ 74,886 $ 71,226 |
Schedule of Plan's Level 3 financial instrument, the valuation technique used, and the significant unobservable input and the ranges of values for that input | The following table represents the Plan's Level 3 financial instrument, the valuation technique used, and the significant unobservable input and the ranges of values for that input as of December 31, 2017 (Successor Company): Instrument Fair Value Principal Valuation Technique Significant Unobservable Inputs Range of Significant Input Values (Dollars In Thousands) Group deposit administration annuity contract $ 74,886 Contract Value Contract Rate 5.10% - 5.19% |
Schedule of accumulated postretirement benefit obligation | The benefit obligation associated with these benefits is as follows: Successor Company Postretirement Life Insurance Plan As of December 31, 2017 As of December 31, 2016 (Dollars In Thousands) Change in Benefit Obligation Benefit obligation, beginning of year $ 9,634 $ 9,063 Service cost 122 102 Interest cost 354 338 Actuarial (gain)/loss 1,347 604 Benefits paid (479 ) (473 ) Benefit obligation, end of year $ 10,978 $ 9,634 |
ACCUMULATED OTHER COMPREHENSI53
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Summary of the changes in the accumulated balances for each component of AOCI | The following tables summarize the changes in the accumulated balances for each component of AOCI as of December 31, 2017 (Successor Company), December 31, 2016 (Successor Company), December 31, 2015 (Successor Company), and January 31, 2015 (Predecessor Company). Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Pension Benefits Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) Other comprehensive income (loss) before reclassifications 700,536 (563 ) (15,726 ) 684,247 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings 7,153 — — 7,153 Amounts reclassified from accumulated other comprehensive income (loss) (1) 642 451 501 1,594 Net current-period other comprehensive income (loss) 708,331 (112 ) (15,225 ) 692,994 Cumulative effect adjustments (26,135 ) 132 228 (25,775 ) Ending Balance, December 31, 2017 $ 25,874 $ 747 $ (13,925 ) $ 12,696 (1) See Reclassification table below for details. (2) As of December 31, 2016 (Successor Company) and December 31, 2017 (Successor Company), net unrealized losses reported in AOCI were offset by $424.1 million and $(6.3) million , respectively, due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Pension Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2015 $ (1,247,065 ) $ — $ 5,931 $ (1,241,134 ) Other comprehensive income (loss) before reclassifications 606,985 688 (5,659 ) 602,014 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (6,782 ) — — (6,782 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (9,460 ) 39 800 (8,621 ) Net current-period other comprehensive income (loss) 590,743 727 (4,859 ) 586,611 Ending Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 (Successor Company) and December 31, 2016 (Successor Company), net unrealized losses reported in AOCI were offset by $623.0 million and $424.1 million , respectively, due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Postretirement Benefits Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, February 1, 2015 $ — $ — $ — $ — Other comprehensive income (loss) before reclassifications (1,264,034 ) (86 ) 5,931 (1,258,189 ) Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (393 ) — — (393 ) Amounts reclassified from accumulated other comprehensive income (loss)(1) 17,362 86 — 17,448 Net current-period other comprehensive income (loss) (1,247,065 ) — 5,931 (1,241,134 ) Ending Balance, December 31, 2015 $ (1,247,065 ) $ — $ 5,931 $ (1,241,134 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 , net unrealized losses reported in AOCI were offset by $623.0 million , due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Predecessor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Minimum Postretirement Benefits Liability Adjustment Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2014 $ 1,484,169 $ (82 ) $ (66,011 ) $ 1,418,076 Other comprehensive income (loss) before reclassifications 482,370 9 (12,527 ) 469,852 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (243 ) — — (243 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (4,166 ) 23 502 (3,641 ) Net current-period other comprehensive income (loss) 477,961 32 (12,025 ) 465,968 Ending Balance, January 31, 2015 $ 1,962,130 $ (50 ) $ (78,036 ) $ 1,884,044 (1) See Reclassification table below for details. (2) As of January 31, 2015 and December 31, 2014, net unrealized losses reported in AOCI were offset by $(492.6) million and $(504.4) million , respectively, due to the impact those net unrealized losses would have had on certain of the Company's insurance assets and liabilities if the net unrealized losses had been recognized in net income. |
Summary of the reclassifications amounts out of AOCI | The following tables summarize the reclassifications amounts out of AOCI for the year ended December 31, 2017 (Successor Company), the year ended December 31, 2016 (Successor Company), the period of February 1, 2015 to December 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company). Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (694 ) Benefits and settlement expenses, net of reinsurance ceded (694 ) Total before tax 243 Tax (expense) or benefit $ (451 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 10,611 Realized investment gains (losses): All other investments Impairments recognized in earnings (11,742 ) Net impairment losses recognized in earnings (1,131 ) Total before tax 489 Tax (expense) or benefit $ (642 ) Net of tax Pension benefits liability adjustment Amortization of net actuarial gain/(loss) $ (634 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (634 ) Total before tax 133 Tax (expense) or benefit $ (501 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Successor Company For The Year ended December 31, 2016 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (60 ) Benefits and settlement expenses, net of reinsurance ceded (60 ) Total before tax 21 Tax (expense) or benefit $ (39 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 32,302 Realized investment gains (losses): All other investments Impairments recognized in earnings (17,748 ) Net impairment losses recognized in earnings 14,554 Total before tax (5,094 ) Tax (expense) or benefit $ 9,460 Net of tax Postretirement benefits liability adjustment Amortization of net actuarial gain/(loss) $ (1,231 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (1,231 ) Total before tax 431 Tax (expense) or benefit $ (800 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Successor Company February 1, 2015 to December 31, 2015 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (131 ) Benefits and settlement expenses, net of reinsurance ceded (131 ) Total before tax 45 Tax (expense) or benefit $ (86 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 281 Realized investment gains (losses): All other investments Impairments recognized in earnings (26,992 ) Net impairment losses recognized in earnings (26,711 ) Total before tax 9,349 Tax (expense) or benefit $ (17,362 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Statements of Income (Dollars In Thousands) Predecessor Company January 1, 2015 to January 31, 2015 Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (36 ) Benefits and settlement expenses, net of reinsurance ceded (36 ) Total before tax 13 Tax (expense) or benefit $ (23 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains/losses $ 6,891 Realized investment gains (losses): All other investments Impairments recognized in earnings (481 ) Net impairment losses recognized in earnings 6,410 Total before tax (2,244 ) Tax (expense) or benefit $ 4,166 Net of tax Pension benefits liability adjustment Amortization of net actuarial gain/(loss) $ (808 ) Other operating expenses Amortization of prior service credit/(cost) 31 Other operating expenses Amortization of transition asset/(obligation) 5 Other operating expenses (772 ) Total before tax 270 Tax (expense) or benefit $ (502 ) Net of tax (1) See Note 7, Derivative Financial Instruments for additional information. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of effective income tax rate related to continuing operations | The Company's effective income tax rate related to continuing operations varied from the maximum federal income tax rate as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 Statutory federal income tax rate applied to pre-tax income 35.0 % 35.0 % 35.0 % 35.0 % State income taxes 0.6 0.8 2.0 0.8 Investment income not subject to tax (5.0 ) (2.7 ) (4.3 ) (3.2 ) Uncertain tax positions (0.2 ) (0.3 ) 0.2 (0.1 ) Federal Tax law changes (183.3 ) — — — Other (1.4 ) 1.0 — (0.1 ) (154.3 )% 33.8 % 32.9 % 32.4 % |
Schedule of components of income tax | The components of the Company's income tax are as follows: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Current income tax expense: Federal $ 21,853 $ (50,638 ) $ 5,715 $ (32,803 ) State 4,399 3,919 (4,244 ) 1,685 Total current $ 26,252 $ (46,719 ) $ 1,471 $ (31,118 ) Deferred income tax expense: Federal $ (693,860 ) $ 240,127 $ 118,338 $ 30,858 State (3,867 ) 7,560 11,734 (67 ) Total deferred $ (697,727 ) $ 247,687 $ 130,072 $ 30,791 |
Schedule of components of the Company's net deferred income tax liability | The components of the Company's net deferred income tax liability are as follows: Successor Company As of December 31, 2017 2016 (Dollars In Thousands) Deferred income tax assets: Loss and credit carryforwards $ 209,401 $ 453,880 Deferred compensation 138,945 209,979 Deferred policy acquisition costs 23,876 156,012 Premium on corporate debt 57,402 104,839 Net unrealized loss on investments — 353,448 Other 28,179 44,956 Valuation allowance (3,951 ) (6,007 ) 453,852 1,317,107 Deferred income tax liabilities: Premium receivables and policy liabilities 573,469 884,255 VOBA and other intangibles 433,321 720,750 Invested assets (other than unrealized gains (losses)) 672,549 1,311,866 Net unrealized gains on investments 6,920 — 1,686,259 2,916,871 Net deferred income tax liability $ (1,232,407 ) $ (1,599,764 ) |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Successor Company Predecessor Company As of As of December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Balance, beginning of period $ 9,856 $ 13,138 $ 137,593 $ 193,244 Additions for tax positions of the current year 1,857 2,122 2,213 (5,010 ) Additions for tax positions of prior years 70 1,318 1,811 7,724 Reductions of tax positions of prior years: Changes in judgment (430 ) (975 ) (16,416 ) (58,365 ) Settlements during the period — (5,747 ) (112,063 ) — Lapses of applicable statute of limitations — — — — Balance, end of period $ 11,353 $ 9,856 $ 13,138 $ 137,593 |
SUPPLEMENTAL CASH FLOW INFORM55
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | The following table sets forth supplemental cash flow information: Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Cash paid / (received) during the year: Interest on debt $ 253,708 $ 234,928 $ 124,829 $ 22,802 Income taxes (14,163 ) 112,886 (53,486 ) (1 ) Noncash investing and financing activities: Stock-based compensation — — — 1,550 |
STATUTORY REPORTING PRACTICES56
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | |
Schedule of favorable (unfavorable) effects of PLICO's statutory surplus, compared to NAIC statutory surplus, from the use of prescribed and permitted practices | The favorable (unfavorable) effects of PLICO's statutory surplus, compared to NAIC statutory surplus, from the use of this prescribed practices was as follows: As of December 31, 2017 2016 (Dollars In Millions) Non-admission of goodwill $ (219 ) $ (257 ) Total (net) $ (219 ) $ (257 ) |
Schedule of favorable (unfavorable) effects on the statutory surplus of the Company's insurance subsidiaries, compared to NAIC statutory surplus, from the use of prescribed and permitted practices | The favorable (unfavorable) effects on the statutory surplus of the Company's insurance subsidiaries, compared to NAIC statutory surplus, from the use of these prescribed and permitted practices were as follows: As of December 31, 2017 2016 (Dollars In Millions) Accounting for Letters of Credit as admitted assets $ 1,670 $ 1,720 Accounting for certain notes as admitted assets $ 2,634 $ 2,681 Reserving based on state specific actuarial practices $ 122 $ 120 Reserving difference related to a captive insurance company $ (37 ) $ (109 ) |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of financial information for the Company's segments | The following tables presents a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income (Predecessor and Successor periods are not comparable): Successor Company Predecessor Company For The Year Ended For The Year Ended December 31, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Life Marketing $ 1,667,118 $ 1,627,848 $ 1,426,090 $ 145,595 Acquisitions 1,569,083 1,676,017 1,333,430 139,761 Annuities 450,306 574,934 443,419 7,884 Stable Value Products 190,006 114,580 79,670 8,181 Asset Protection 327,573 269,145 261,693 21,953 Corporate and Other 214,706 221,423 166,367 17,535 Total revenues $ 4,418,792 $ 4,483,947 $ 3,710,669 $ 340,909 Pre-tax Adjusted Operating Income (Loss) Life Marketing $ 50,778 $ 39,745 $ 57,414 $ (1,618 ) Acquisitions 249,749 260,511 194,654 20,134 Annuities 213,080 213,293 180,231 13,164 Stable Value Products 105,261 61,294 56,581 4,529 Asset Protection 24,356 16,487 20,627 2,420 Corporate and Other (136,332 ) (87,961 ) (25,067 ) (10,144 ) Pre-tax adjusted operating income 506,892 503,369 484,440 28,485 Realized gains (losses) on investments and derivatives (71,835 ) 90,628 (84,598 ) (27,303 ) Income before income tax 435,057 593,997 399,842 1,182 Income tax (benefit) expense (671,475 ) 200,968 131,543 (327 ) Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 Pre-tax adjusted operating income $ 506,892 $ 503,369 $ 484,440 $ 28,485 Adjusted operating income tax benefit (expense) 646,333 (169,247 ) (161,153 ) (9,228 ) After-tax adjusted operating income 1,153,225 334,122 323,287 19,257 Realized gains (losses) on investments and derivatives (71,835 ) 90,628 (84,598 ) (27,303 ) Income tax (expense) benefit on adjustments 25,142 (31,721 ) 29,610 9,555 Net income $ 1,106,532 $ 393,029 $ 268,299 $ 1,509 Realized investment (losses) gains: Derivative financial instruments $ (305,828 ) $ (40,288 ) $ 29,997 $ (123,274 ) All other investments 121,428 90,659 (166,886 ) 81,153 Net impairment losses recognized in earnings (11,742 ) (17,748 ) (26,993 ) (481 ) Less: related amortization (1) (39,480 ) 24,360 (8,726 ) (9,143 ) Less: VA GLWB economic cost (84,827 ) (82,365 ) (70,558 ) (6,156 ) Realized (losses) gains on investments and derivatives $ (71,835 ) $ 90,628 $ (84,598 ) $ (27,303 ) (1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). Successor Company Predecessor Company For The Year Ended For The Year Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Net investment income Life Marketing $ 553,999 $ 525,495 $ 446,439 $ 47,460 Acquisitions 752,520 764,571 639,422 71,088 Annuities 321,844 322,608 297,114 37,189 Stable Value Products 186,576 107,010 78,459 6,888 Asset Protection 27,325 22,082 17,459 1,878 Corporate and Other 209,324 200,690 154,055 10,677 Total net investment income $ 2,051,588 $ 1,942,456 $ 1,632,948 $ 175,180 Amortization of DAC and VOBA Life Marketing $ 120,753 $ 130,708 $ 107,811 $ 4,813 Acquisitions (6,939 ) 8,178 2,035 5,033 Annuities (54,471 ) (11,031 ) (41,071 ) (7,706 ) Stable Value Products 2,354 1,176 43 25 Asset Protection 16,524 20,033 25,211 1,820 Corporate and Other — — 27 87 Total amortization of DAC and VOBA $ 78,221 $ 149,064 $ 94,056 $ 4,072 Successor Company Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,914,418 $ 19,588,133 $ 20,938,409 $ 4,569,639 DAC and VOBA 1,320,776 74,862 772,634 6,864 Other intangibles 282,361 34,548 170,117 8,056 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 16,717,829 $ 19,712,067 $ 22,217,837 $ 4,698,372 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 918,952 $ 15,043,597 $ 75,973,148 DAC and VOBA 24,441 — 2,199,577 Other intangibles 133,234 35,256 663,572 Goodwill 128,182 — 793,470 Total assets $ 1,204,809 $ 15,078,853 $ 79,629,767 Successor Company Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,050,170 $ 19,679,690 $ 20,243,333 $ 3,373,646 DAC and VOBA 1,218,944 106,532 655,618 5,455 Other intangibles 301,399 37,103 183,449 8,722 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 15,770,787 $ 19,837,849 $ 21,419,077 $ 3,501,636 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,013,399 $ 13,141,759 $ 71,501,997 DAC and VOBA 33,280 — 2,019,829 Other intangibles 143,865 13,545 688,083 Goodwill 128,182 — 793,470 Total assets $ 1,318,726 $ 13,155,304 $ 75,003,379 |
CONSOLIDATED QUARTERLY RESULT58
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited consolidated quarterly operating data | The Company's unaudited consolidated quarterly operating data for the year ended December 31, 2017 (Successor Company) and for the year ended December 31, 2016 (Successor Company) is presented below. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair statement of quarterly results have been reflected in the following data. It is also management's opinion, however, that quarterly operating data for insurance enterprises are not necessarily indicative of results that may be expected in succeeding quarters or years. In order to obtain a more accurate indication of performance, there should be a review of operating results, changes in shareowner's equity, and cash flows for a period of several quarters. First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars In Thousands) Successor Company For The Year Ended December 31, 2017 Premiums and policy fees $ 860,586 $ 868,139 $ 855,088 $ 893,606 Reinsurance ceded (316,076 ) (342,898 ) (325,120 ) (376,641 ) Net of reinsurance ceded 544,510 525,241 529,968 516,965 Net investment income 506,413 507,771 507,914 529,490 Realized investment gains (losses) (47,037 ) (54,471 ) (64,191 ) (18,701 ) Net impairment losses recognized in earnings (7,831 ) (2,785 ) (273 ) (853 ) Other income 109,242 111,311 110,970 115,139 Total revenues 1,105,297 1,087,067 1,084,388 1,142,040 Total benefits and expenses 992,948 961,299 973,538 1,055,950 Income before income tax 112,349 125,768 110,850 86,090 Income tax expense (benefit) 36,935 41,500 28,308 (778,218 ) Net income $ 75,414 $ 84,268 $ 82,542 $ 864,308 First Second Quarter Third Quarter Fourth Quarter (Dollars In Thousands) Successor Company For The Year Ended December 31, 2016 Premiums and policy fees $ 852,795 $ 857,948 $ 834,544 $ 862,644 Reinsurance ceded (310,327 ) (336,605 ) (322,229 ) (345,555 ) Net of reinsurance ceded 542,468 521,343 512,315 517,089 Net investment income 475,117 488,460 482,729 496,150 Realized investment gains (losses) 8,229 5,417 24,268 12,457 Net impairment losses recognized in earnings (2,617 ) (967 ) (3,308 ) (10,856 ) Other income 103,716 102,148 107,642 102,147 Total revenues 1,126,913 1,116,401 1,123,646 1,116,987 Total benefits and expenses 955,071 947,740 990,567 996,572 Income before income tax 171,842 168,661 133,079 120,415 Income tax expense 56,494 56,541 39,785 48,148 Net income $ 115,348 $ 112,120 $ 93,294 $ 72,267 |
SUMMARY OF SIGNIFICANT ACCOUN59
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Valuation of Investment Securities, Cash, and Deferred Policy Acquisition Costs (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)primary_source | Dec. 31, 2017USD ($)input_method | Dec. 31, 2016USD ($) | |
Valuation of investment securities | |||
Number of primary sources of information used for determining fair value | primary_source | 1 | ||
Total number of primary sources of information available for determining fair value | 3 | 3 | |
Cash | |||
Negative balances due to outstanding checks and drafts | $ | $ 132.7 | $ 132.7 | $ 79.2 |
Minimum | |||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||
Interest rate assumptions to compute liabilities for future policy benefits | 1.00% | 1.00% | |
Maximum | |||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||
Interest rate assumptions to compute liabilities for future policy benefits | 7.80% | 7.80% |
SUMMARY OF SIGNIFICANT ACCOUN60
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 631,572 | $ 656,083 |
Intangible assets | $ 663,572 | 688,083 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 3 years | |
Distribution Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 402,975 | 428,499 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 85,340 | 92,049 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 107,343 | 121,253 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 35,914 | 14,282 |
Minimum | Distribution Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 14 years | |
Minimum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 13 years | |
Minimum | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 7 years | |
Maximum | Distribution Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 22 years | |
Maximum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 17 years | |
Maximum | Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 14 years | |
Insurance Licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 32,000 | $ 32,000 |
SUMMARY OF SIGNIFICANT ACCOUN61
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Future Estimated Aggregate Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Accounting Policies [Abstract] | |
2,018 | $ 56,011 |
2,019 | 52,898 |
2,020 | 49,897 |
2,021 | 48,105 |
2,022 | $ 45,771 |
SUMMARY OF SIGNIFICANT ACCOUN62
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment | ||
Total property and equipment, gross | $ 109,423 | $ 98,641 |
Accumulated depreciation | (22,926) | (17,450) |
Land | 24,920 | 24,920 |
Total property and equipment | $ 111,417 | 106,111 |
Home office building | ||
Property and equipment | ||
Useful life | 25 years | |
Total property and equipment, gross | $ 68,123 | 67,279 |
Furniture | ||
Property and equipment | ||
Useful life | 10 years | |
Office equipment and machines | ||
Property and equipment | ||
Useful life | 5 years | |
Software and computers | ||
Property and equipment | ||
Useful life | 3 years | |
Data processing equipment | ||
Property and equipment | ||
Total property and equipment, gross | $ 24,102 | 21,750 |
Other, principally furniture and equipment | ||
Property and equipment | ||
Total property and equipment, gross | $ 17,198 | $ 9,612 |
SUMMARY OF SIGNIFICANT ACCOUN63
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stable Value Product Account Balances (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summarized financial information for the company's segments | ||
Stable value product account balances marketed through structured programs | $ 3,337.9 | $ 1,872.5 |
Future maturities of stable value products | ||
2,018 | 888 | |
2019 - 2020 | 2,479.5 | |
2021 - 2022 | 1,201 | |
Thereafter | $ 124.8 | |
Minimum | ||
Summarized financial information for the company's segments | ||
Maturities of GICs and funding agreements | 1 year | |
Maximum | ||
Summarized financial information for the company's segments | ||
Maturities of GICs and funding agreements | 12 years |
SUMMARY OF SIGNIFICANT ACCOUN64
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Guaranteed Living Withdrawal Benefits and Income Taxes (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)subsidiary | |
Income Taxes | |
Number of subsidiaries not included in federal tax return | subsidiary | 1 |
Guaranteed minimum withdrawal benefits (GMWB) | Annuity account | |
Guaranteed Minimum Withdrawal Benefits | |
Net GMWB liability | $ | $ 111.8 |
SUMMARY OF SIGNIFICANT ACCOUN65
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Future Policy Benefit Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Reinsurance Recoverables, Including Reinsurance Premium Paid [Abstract] | ||
Future policy benefits | $ 4,539,062 | $ 4,819,876 |
Unearned premiums | 536,636 | 503,970 |
Total policy liabilities and accruals and associated reinsurance receivable | 5,075,698 | 5,323,846 |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Future policy benefits | 30,957,592 | 30,511,085 |
Unearned premiums | 875,405 | 848,495 |
Total policy liabilities and accruals | 31,832,997 | 31,359,580 |
Life and Annuity Insurance | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid [Abstract] | ||
Benefit reserves | 3,898,079 | 4,191,845 |
Future policy benefits | 4,260,906 | 4,515,475 |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Benefit reserves | 29,972,938 | 29,574,479 |
Future policy benefits | 30,568,126 | 30,091,736 |
Life insurance | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid [Abstract] | ||
Unpaid claim liabilities | 362,827 | 323,630 |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Unpaid claim liabilities | 595,188 | 517,257 |
Other Insurance | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid [Abstract] | ||
Benefit reserves | 92,330 | 103,746 |
Unpaid claim liabilities | 185,826 | 200,655 |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Benefit reserves | 157,101 | 170,519 |
Unpaid claim liabilities | $ 232,365 | $ 248,830 |
SUMMARY OF SIGNIFICANT ACCOUN66
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Traditional Life, Health, and Credit Insurance Products (Details) | Dec. 31, 2017 |
Minimum | |
Liability for unpaid claims and claims adjustment expense | |
Reserve investment yield assumptions | 1.00% |
Minimum | Traditional Life Insurance | |
Liability for unpaid claims and claims adjustment expense | |
Reserve investment yield assumptions | 2.75% |
Maximum | |
Liability for unpaid claims and claims adjustment expense | |
Reserve investment yield assumptions | 7.80% |
Maximum | Traditional Life Insurance | |
Liability for unpaid claims and claims adjustment expense | |
Reserve investment yield assumptions | 4.50% |
SUMMARY OF SIGNIFICANT ACCOUN67
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Universal Life and Investment Products (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2015 |
Universal Life | Minimum | ||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||
Interest rate credited to policy account balances | 1.00% | |||
Universal Life | Maximum | ||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||
Interest rate credited to policy account balances | 8.75% | |||
Investments Product Line | Minimum | ||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||
Interest rate credited to policy account balances | 0.50% | |||
Investments Product Line | Maximum | ||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||
Interest rate credited to policy account balances | 11.30% | |||
Annuity account | Guaranteed minimum death benefits (GMDB) | ||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||
Guaranteed benefit liability | $ 34,030 | $ 34,796 | $ 36,427 | $ 29,010 |
SUMMARY OF SIGNIFICANT ACCOUN68
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGINIFICANT ACCOUTNING POLICIES - Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustments | $ 0 | |
Accumulated Other Comprehensive Income (Loss) | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustments | (25,775) | |
Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustments | 25,775 | |
Retained Earnings | Accounting Standards Update 2014-09 | Scenario, Forecast | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ (92,500) | |
Retained Earnings | Accounting Standards Update 2016-01 | Scenario, Forecast | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ 10,700 | |
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income (Loss) | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustments | (25,800) | |
Accounting Standards Update 2018-02 | Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustments | $ 25,800 |
SIGNIFICANT TRANSACTIONS - Rein
SIGNIFICANT TRANSACTIONS - Reinsurance and Financing Transaction (Details) - USD ($) | Jan. 15, 2016 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Increase in total assets | $ 2,800,000,000 | |
Increase in total liabilities | 2,800,000,000 | |
Increase in assets resulting from reinsurance transaction | 600,000,000 | |
Increase in value of business acquired | 280,000,000 | |
Increase in assets associated with financing transaction | 2,200,000,000 | |
Financing Agreement With Golden Gate And Syndicate ff Risk Takers | ||
Debt Instrument [Line Items] | ||
Term of financing agreement | 18 years | |
Financing capacity under the agreement | $ 2,188,000,000 | |
Golden Gate | ||
Debt Instrument [Line Items] | ||
Extraordinary dividend | 300,000,000 | |
Golden Gate | Non-recourse Funding Obligations Series | ||
Debt Instrument [Line Items] | ||
Outstanding non-recourse funding obligations | 800,000,000 | |
Golden Gate | Surplus Notes | Steel City Notes | ||
Debt Instrument [Line Items] | ||
Amount of debt issued | 2,188,000,000 | $ 2,014,000,000 |
Steel City | Surplus Notes | Golden Gate Surplus Notes | ||
Debt Instrument [Line Items] | ||
Amount of debt issued | $ 2,188,000,000 |
SIGNIFICANT TRANSACTIONS - USWC
SIGNIFICANT TRANSACTIONS - USWC Holding Company Acquisition (Details) - USD ($) $ in Thousands | Dec. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2017 |
Assets | ||||
Goodwill | $ 793,470 | $ 793,470 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Intangible assets subject to amortization | $ 70,400 | |||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
2,017 | 56,011 | |||
2,018 | 52,898 | |||
2,019 | 49,897 | |||
2,020 | 48,105 | |||
2,021 | $ 45,771 | |||
Distribution Relationships | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Intangible assets subject to amortization | 65,000 | |||
Trade names | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Intangible assets subject to amortization | 1,400 | |||
Technology | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Intangible assets subject to amortization | $ 4,000 | |||
USWC | ||||
Business Acquisition [Line Items] | ||||
Percent of outstanding shares acquired | 100.00% | |||
Purchase price | $ 136,100 | |||
Assets | ||||
Fixed maturities | 10,592 | |||
Other long-term investments | 2,340 | |||
Cash | 122,167 | |||
Accrued investment income | 52 | |||
Accounts and premiums receivable | 18,536 | |||
Reinsurance receivables | 9,397 | |||
Value of businesses acquired | 5,079 | |||
Goodwill | 61,027 | |||
Other intangibles | 70,400 | |||
Property and equipment | 390 | |||
Accrued income taxes | 4,161 | |||
Other assets | 40 | |||
Total assets | 304,181 | |||
Liabilities | ||||
Unearned premiums | 82,757 | |||
Other policyholders' funds | 21,483 | |||
Other liabilities | 24,951 | |||
Deferred income taxes | 38,929 | |||
Total liabilities | 168,120 | |||
Net assets acquired | 136,061 | |||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
2,017 | 4,843 | |||
2,018 | 4,843 | |||
2,019 | 4,843 | |||
2,020 | 4,843 | |||
2,021 | $ 4,843 | |||
Pro forma condensed consolidated results of operations | ||||
Revenue | $ 3,753,700 | 4,532,292 | ||
Net income | $ 268,479 | 393,277 | ||
Revenue recognized in earnings | 4,700 | |||
Net income recognized in earnings | $ 200 | |||
USWC | Minimum | Distribution Relationships | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Weighted-average useful life of intangible assets acquired | 13 years | |||
USWC | Minimum | Trade names | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Weighted-average useful life of intangible assets acquired | 5 years | |||
USWC | Minimum | Technology | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Weighted-average useful life of intangible assets acquired | 8 years | |||
USWC | Maximum | Distribution Relationships | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Weighted-average useful life of intangible assets acquired | 21 years | |||
USWC | Maximum | Trade names | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Weighted-average useful life of intangible assets acquired | 6 years | |||
USWC | Maximum | Technology | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||||
Weighted-average useful life of intangible assets acquired | 11 years |
MONY CLOSED BLOCK OF BUSINESS71
MONY CLOSED BLOCK OF BUSINESS (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |||
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Entity Information [Line Items] | ||||||
Policyholder dividend obligation | $ 13,429 | $ 197,450 | ||||
Deferred tax benefit | 2,820 | 69,107 | ||||
Closed block liabilities | ||||||
Future policy benefits, policyholders' account balances and other policyholder liabilities | $ 5,791,867 | $ 5,896,355 | ||||
Policyholder dividend obligation | $ 0 | 31,932 | 0 | 160,712 | 31,932 | |
Other liabilities | 30,764 | 40,007 | ||||
Total closed block liabilities | 5,983,343 | 5,968,294 | ||||
Closed block assets | ||||||
Fixed maturities, available-for-sale, at fair value | 4,669,856 | 4,440,105 | ||||
Mortgage loans on real estate | 108,934 | 201,088 | ||||
Policy loans | 700,769 | 712,959 | ||||
Cash and other invested assets | 31,182 | 108,270 | ||||
Other assets | 122,637 | 135,794 | ||||
Total closed block assets | 5,633,378 | 5,598,216 | ||||
Excess of reported closed block liabilities over closed block assets | 349,965 | 370,078 | ||||
Portion of above representing accumulated other comprehensive income: | ||||||
Net unrealized investments gains (losses) net of policyholder dividend obligation: $(13,429) and $(197,450); and net of income tax: $2,820 and $69,107 | 0 | |||||
Future earnings to be recognized from closed block assets and closed block liabilities | $ 349,965 | $ 370,078 | ||||
Reconciliation of the policyholder dividend obligation | ||||||
Policyholder dividend obligation, beginning balance | 31,932 | 0 | ||||
Applicable to net revenue (losses) | (55,241) | (46,557) | ||||
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation | 184,021 | 78,489 | ||||
Policyholder dividend obligation, ending balance | 0 | 160,712 | 31,932 | |||
Revenues | ||||||
Premiums and other income | 185,562 | 180,097 | 189,700 | |||
Net investment income | 193,203 | 203,964 | 211,175 | |||
Net investment gains | 3,333 | 910 | 1,524 | |||
Total revenues | 382,098 | 384,971 | 402,399 | |||
Benefits and other deductions | ||||||
Benefits and settlement expenses | 336,629 | 335,200 | 353,488 | |||
Other operating expenses | 1,001 | 1,940 | 2,804 | |||
Total benefits and other deductions | 337,630 | 337,140 | 356,292 | |||
Net revenues before income taxes | 44,468 | 47,831 | 46,107 | |||
Income tax expense | 14,920 | 27,718 | 16,137 | |||
Net revenues | $ 29,548 | $ 20,113 | $ 29,970 | |||
Predecessor | ||||||
Revenues | ||||||
Premiums and other income | $ 15,065 | |||||
Net investment income | 19,107 | |||||
Net investment gains | 568 | |||||
Total revenues | 34,740 | |||||
Benefits and other deductions | ||||||
Benefits and settlement expenses | 31,152 | |||||
Other operating expenses | 0 | |||||
Total benefits and other deductions | 31,152 | |||||
Net revenues before income taxes | 3,588 | |||||
Income tax expense | 1,256 | |||||
Net revenues | $ 2,332 |
INVESTMENT OPERATIONS - Summary
INVESTMENT OPERATIONS - Summary of Major Categories of Net Investment Income (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | $ 1,657,894 | $ 2,080,715 | $ 1,971,567 | |||||||||
Other investment expenses | 24,946 | 29,127 | 29,111 | |||||||||
Net investment income | $ 529,490 | $ 507,914 | $ 507,771 | $ 506,413 | $ 496,150 | $ 482,729 | $ 488,460 | $ 475,117 | 1,632,948 | 2,051,588 | 1,942,456 | |
Fixed maturities | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 1,267,900 | 1,631,565 | 1,552,999 | |||||||||
Equity securities | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 40,907 | 39,806 | 38,838 | |||||||||
Mortgage loans | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 252,577 | 298,387 | 270,749 | |||||||||
Investment real estate | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 2,528 | 2,481 | 2,153 | |||||||||
Short-term investments | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | $ 93,982 | $ 108,476 | $ 106,828 | |||||||||
Predecessor | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | $ 177,478 | |||||||||||
Other investment expenses | 2,298 | |||||||||||
Net investment income | 175,180 | |||||||||||
Predecessor | Fixed maturities | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 140,104 | |||||||||||
Predecessor | Equity securities | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 2,572 | |||||||||||
Predecessor | Mortgage loans | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 24,977 | |||||||||||
Predecessor | Investment real estate | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | 112 | |||||||||||
Predecessor | Short-term investments | ||||||||||||
Investment [Line Items] | ||||||||||||
Investment income before other investment expenses | $ 9,713 |
INVESTMENT OPERATIONS - Summa73
INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for all Other Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||
Jan. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||||||||
Fixed maturities | $ 1,282 | $ 12,941 | $ 32,210 | |||||
Equity securities | (1,001) | (2,330) | 92 | |||||
Impairments on securities | (26,993) | (11,742) | (17,748) | |||||
Modco trading portfolio | (167,359) | 119,206 | 67,583 | |||||
Other investments | $ 192 | $ (8,389) | $ (9,226) | |||||
Realized Investment Gains (Losses), All Other Investments Net of Other than Temporary Impairments | $ 109,686 | $ 72,911 | $ (193,879) | $ 80,672 | ||||
Predecessor | ||||||||
Investment [Line Items] | ||||||||
Fixed maturities | $ 6,891 | |||||||
Equity securities | 0 | |||||||
Impairments on securities | (481) | |||||||
Modco trading portfolio | 73,062 | |||||||
Other investments | $ 1,200 |
INVESTMENT OPERATIONS - Schedul
INVESTMENT OPERATIONS - Schedule of Gross Realized Gains (Losses) on Investments Available-for-Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||||
Gross realized gains | $ 8,745 | $ 18,868 | $ 42,085 | |
Impairments losses | (26,993) | (11,742) | (17,748) | |
Other realized losses | $ (8,463) | $ (8,257) | $ (9,783) | |
Predecessor | ||||
Investment [Line Items] | ||||
Gross realized gains | $ 6,920 | |||
Impairments losses | (481) | |||
Other realized losses | $ 12 |
INVESTMENT OPERATIONS - Sched75
INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains/Losses Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||||
Fair value (proceeds) | $ 950,874 | $ 879,181 | $ 1,198,333 | |
Gains realized | 8,745 | 18,868 | 42,085 | |
Fair value (proceeds) | 178,415 | 185,157 | 85,835 | |
Losses realized | $ (8,463) | $ (8,257) | $ (9,783) | |
Predecessor | ||||
Investment [Line Items] | ||||
Fair value (proceeds) | $ 172,551 | |||
Gains realized | 6,920 | |||
Fair value (proceeds) | 435 | |||
Losses realized | $ (29) |
INVESTMENT OPERATIONS - Sched76
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Investments classified as available-for-sale | ||
Amortized Cost | $ 39,783,880 | $ 38,233,986 |
Gross Unrealized Gains | 718,229 | 199,654 |
Gross Unrealized Losses | (682,181) | (1,862,975) |
Fair Value | 39,819,928 | 36,570,665 |
Total OTTI Recognized in OCI | (28) | (11,039) |
Fixed maturities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 38,489,362 | 37,192,864 |
Gross Unrealized Gains | 695,911 | 191,903 |
Gross Unrealized Losses | (673,410) | (1,841,290) |
Fair Value | 38,511,863 | 35,543,477 |
Total OTTI Recognized in OCI | (28) | (11,039) |
Residential mortgage-backed securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 2,330,832 | 1,913,413 |
Gross Unrealized Gains | 19,413 | 10,737 |
Gross Unrealized Losses | (23,033) | (25,667) |
Fair Value | 2,327,212 | 1,898,483 |
Total OTTI Recognized in OCI | 10 | (9) |
Commercial mortgage-backed securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 1,914,998 | 1,850,620 |
Gross Unrealized Gains | 5,010 | 2,528 |
Gross Unrealized Losses | (30,186) | (41,678) |
Fair Value | 1,889,822 | 1,811,470 |
Other asset-backed securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 1,234,376 | 1,210,490 |
Gross Unrealized Gains | 20,936 | 21,741 |
Gross Unrealized Losses | (5,763) | (20,698) |
Fair Value | 1,249,549 | 1,211,533 |
U.S. government-related securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 1,255,244 | 1,308,192 |
Gross Unrealized Gains | 185 | 422 |
Gross Unrealized Losses | (32,177) | (40,455) |
Fair Value | 1,223,252 | 1,268,159 |
Other government-related securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 282,767 | 253,182 |
Gross Unrealized Gains | 9,463 | 1,536 |
Gross Unrealized Losses | (4,948) | (14,797) |
Fair Value | 287,282 | 239,921 |
States, municipals, and political subdivisions | ||
Investments classified as available-for-sale | ||
Amortized Cost | 1,770,299 | 1,760,837 |
Gross Unrealized Gains | 16,959 | 1,224 |
Gross Unrealized Losses | (45,613) | (105,558) |
Fair Value | 1,741,645 | 1,656,503 |
Total OTTI Recognized in OCI | (37) | |
Corporate securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 29,606,484 | 28,801,768 |
Gross Unrealized Gains | 623,713 | 153,715 |
Gross Unrealized Losses | (528,187) | (1,583,918) |
Fair Value | 29,702,010 | 27,371,565 |
Total OTTI Recognized in OCI | (1) | (11,030) |
Redeemable preferred stock | ||
Investments classified as available-for-sale | ||
Amortized Cost | 94,362 | 94,362 |
Gross Unrealized Gains | 232 | 0 |
Gross Unrealized Losses | (3,503) | (8,519) |
Fair Value | 91,091 | 85,843 |
Equity securities | ||
Investments classified as available-for-sale | ||
Amortized Cost | 735,569 | 761,340 |
Gross Unrealized Gains | 22,318 | 7,751 |
Gross Unrealized Losses | (8,771) | (21,685) |
Fair Value | 749,116 | 747,406 |
Short-term investments | ||
Investments classified as available-for-sale | ||
Amortized Cost | 558,949 | 279,782 |
Fair Value | $ 558,949 | $ 279,782 |
INVESTMENT OPERATIONS INVESTMEN
INVESTMENT OPERATIONS INVESTMENT OPERATIONS - Schedule of Fair Value of Trading Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | $ 2,725,694 | $ 2,699,591 |
Fixed maturities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 2,664,189 | 2,639,860 |
Residential mortgage-backed securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 259,694 | 255,027 |
Commercial mortgage-backed securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 146,804 | 149,683 |
Other asset-backed securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 138,097 | 200,084 |
U.S. government-related securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 27,234 | 26,961 |
Other government-related securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 63,925 | 63,012 |
States, municipals, and political subdivisions | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 326,925 | 316,519 |
Corporate securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 1,698,183 | 1,624,589 |
Redeemable preferred stock | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 3,327 | 3,985 |
Equity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 5,244 | 7,083 |
Short-term investments | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | $ 56,261 | $ 52,648 |
INVESTMENT OPERATIONS - Sched78
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Held-to-maturity Securities, Fair Value | ||
Fair Value | $ 2,776,327 | $ 2,733,340 |
Fixed maturities | ||
Available-for-sale, Amortized Cost | ||
Due in one year or less | 723,923 | |
Due after one year through five years | 6,657,059 | |
Due after five years through ten years | 7,475,095 | |
Due after ten years | 23,633,285 | |
Total | 38,489,362 | |
Available-for-sale Fair Value | ||
Due in one year or less | 723,435 | |
Due after one year through five years | 6,639,380 | |
Due after five years through ten years | 7,481,482 | |
Due after ten years | 23,667,566 | |
Total | 38,511,863 | |
Held-to-maturity Securities, Amortized Cost | ||
Due in one year or less | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 2,718,904 | |
Amortized Cost | 2,718,904 | 2,770,177 |
Held-to-maturity Securities, Fair Value | ||
Due in one year or less | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 2,776,327 | |
Fair Value | $ 2,776,327 | $ 2,733,340 |
INVESTMENT OPERATIONS - Sched79
INVESTMENT OPERATIONS - Schedule of Other-than-Temporary Impairments of Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||||||||||||
Other-than-temporary impairments | $ (28,659) | $ (3,962) | $ (32,075) | |||||||||
Non-credit impairment losses recorded in other comprehensive income | 1,666 | (7,780) | 14,327 | |||||||||
Net impairment losses recognized in earnings | $ (853) | $ (273) | $ (2,785) | $ (7,831) | $ (10,856) | $ (3,308) | $ (967) | $ (2,617) | (26,993) | (11,742) | (17,748) | |
Predecessor | ||||||||||||
Investment [Line Items] | ||||||||||||
Other-than-temporary impairments | $ (636) | |||||||||||
Non-credit impairment losses recorded in other comprehensive income | 155 | |||||||||||
Net impairment losses recognized in earnings | (481) | |||||||||||
Fixed maturities | ||||||||||||
Investment [Line Items] | ||||||||||||
Other-than-temporary impairments | (28,659) | (1,332) | (32,075) | |||||||||
Non-credit impairment losses recorded in other comprehensive income | 1,666 | (7,780) | 14,327 | |||||||||
Net impairment losses recognized in earnings | (26,993) | (9,112) | (17,748) | |||||||||
Fixed maturities | Predecessor | ||||||||||||
Investment [Line Items] | ||||||||||||
Other-than-temporary impairments | (636) | |||||||||||
Non-credit impairment losses recorded in other comprehensive income | 155 | |||||||||||
Net impairment losses recognized in earnings | (481) | |||||||||||
Equity securities | ||||||||||||
Investment [Line Items] | ||||||||||||
Other-than-temporary impairments | 0 | (2,630) | 0 | |||||||||
Non-credit impairment losses recorded in other comprehensive income | 0 | 0 | 0 | |||||||||
Net impairment losses recognized in earnings | $ 0 | $ (2,630) | $ 0 | |||||||||
Equity securities | Predecessor | ||||||||||||
Investment [Line Items] | ||||||||||||
Other-than-temporary impairments | 0 | |||||||||||
Non-credit impairment losses recorded in other comprehensive income | 0 | |||||||||||
Net impairment losses recognized in earnings | $ 0 |
INVESTMENT OPERATIONS - Sched80
INVESTMENT OPERATIONS - Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Details) - Fixed maturities - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Credit losses on fixed maturities | ||||
Beginning balance | $ 0 | $ 12,685 | $ 22,761 | |
Additions for newly impaired securities | 22,761 | 734 | 14,876 | |
Additions for previously impaired securities | 0 | 3,175 | 2,063 | |
Reductions for previously impaired securities due to a change in expected cash flows | 0 | (12,726) | (24,396) | |
Reductions for previously impaired securities that were sold in the current period | 0 | (600) | (2,619) | |
Other | 0 | 0 | 0 | |
Ending balance | $ 0 | 22,761 | $ 3,268 | $ 12,685 |
Predecessor | ||||
Credit losses on fixed maturities | ||||
Beginning balance | 15,478 | $ 15,699 | ||
Additions for newly impaired securities | 0 | |||
Additions for previously impaired securities | 221 | |||
Reductions for previously impaired securities due to a change in expected cash flows | 0 | |||
Reductions for previously impaired securities that were sold in the current period | 0 | |||
Other | 0 | |||
Ending balance | $ 15,699 |
INVESTMENT OPERATIONS - Sched81
INVESTMENT OPERATIONS - Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value | ||
Less Than 12 Months | $ 7,062,734 | $ 18,267,283 |
12 Months or More | 14,639,347 | 10,957,881 |
Total | 21,702,081 | 29,225,164 |
Unrealized Loss | ||
Less Than 12 Months | (79,496) | (666,780) |
12 Months or More | (602,685) | (1,196,195) |
Total | (682,181) | (1,862,975) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 766,599 | 1,060,569 |
12 Months or More | 416,221 | 170,826 |
Total | 1,182,820 | 1,231,395 |
Unrealized Loss | ||
Less Than 12 Months | (9,671) | (21,550) |
12 Months or More | (13,362) | (4,117) |
Total | (23,033) | (25,667) |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 757,471 | 1,452,146 |
12 Months or More | 796,456 | 100,475 |
Total | 1,553,927 | 1,552,621 |
Unrealized Loss | ||
Less Than 12 Months | (8,592) | (37,665) |
12 Months or More | (21,594) | (4,013) |
Total | (30,186) | (41,678) |
Other asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 86,506 | 323,706 |
12 Months or More | 134,316 | 176,792 |
Total | 220,822 | 500,498 |
Unrealized Loss | ||
Less Than 12 Months | (322) | (9,291) |
12 Months or More | (5,441) | (11,407) |
Total | (5,763) | (20,698) |
U.S. government-related securities | ||
Fair Value | ||
Less Than 12 Months | 94,110 | 1,237,942 |
12 Months or More | 1,072,232 | 3 |
Total | 1,166,342 | 1,237,945 |
Unrealized Loss | ||
Less Than 12 Months | (688) | (40,454) |
12 Months or More | (31,489) | (1) |
Total | (32,177) | (40,455) |
Other government-related securities | ||
Fair Value | ||
Less Than 12 Months | 24,830 | 98,412 |
12 Months or More | 115,294 | 79,393 |
Total | 140,124 | 177,805 |
Unrealized Loss | ||
Less Than 12 Months | (169) | (2,907) |
12 Months or More | (4,778) | (11,890) |
Total | (4,947) | (14,797) |
States, municipals, and political subdivisions | ||
Fair Value | ||
Less Than 12 Months | 170,268 | 1,062,368 |
12 Months or More | 1,027,747 | 548,254 |
Total | 1,198,015 | 1,610,622 |
Unrealized Loss | ||
Less Than 12 Months | (1,738) | (63,809) |
12 Months or More | (43,874) | (41,749) |
Total | (45,612) | (105,558) |
Corporate securities | ||
Fair Value | ||
Less Than 12 Months | 5,054,316 | 12,553,514 |
12 Months or More | 10,962,689 | 9,793,579 |
Total | 16,017,005 | 22,347,093 |
Unrealized Loss | ||
Less Than 12 Months | (55,795) | (469,189) |
12 Months or More | (472,394) | (1,114,729) |
Total | (528,189) | (1,583,918) |
Redeemable preferred stock | ||
Fair Value | ||
Less Than 12 Months | 22,048 | 66,781 |
12 Months or More | 23,197 | 19,062 |
Total | 45,245 | 85,843 |
Unrealized Loss | ||
Less Than 12 Months | (1,120) | (6,642) |
12 Months or More | (2,383) | (1,877) |
Total | (3,503) | (8,519) |
Equity securities | ||
Fair Value | ||
Less Than 12 Months | 86,586 | 411,845 |
12 Months or More | 91,195 | 69,497 |
Total | 177,781 | 481,342 |
Unrealized Loss | ||
Less Than 12 Months | (1,401) | (15,273) |
12 Months or More | (7,370) | (6,412) |
Total | $ (8,771) | $ (21,685) |
INVESTMENT OPERATIONS - Summa82
INVESTMENT OPERATIONS - Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities Classified as Available-for-Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fixed maturities | ||||
Investment [Line Items] | ||||
Change in unrealized gains (losses) net of income tax | $ (1,874,469) | $ 1,086,727 | $ 802,368 | |
Equity securities | ||||
Investment [Line Items] | ||||
Change in unrealized gains (losses) net of income tax | $ 4,406 | $ 17,863 | $ (13,463) | |
Predecessor | Fixed maturities | ||||
Investment [Line Items] | ||||
Change in unrealized gains (losses) net of income tax | $ 670,229 | |||
Predecessor | Equity securities | ||||
Investment [Line Items] | ||||
Change in unrealized gains (losses) net of income tax | $ 10,226 |
INVESTMENT OPERATIONS - Sched83
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||
Fair Value | $ 2,776,327 | $ 2,733,340 |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 2,718,904 | 2,770,177 |
Gross Unrecognized Holding Gains | 76,586 | 30,385 |
Gross Unrecognized Holding Losses | (19,163) | (67,222) |
Fair Value | 2,776,327 | 2,733,340 |
Total OTTI Recognized in OCI | 0 | 0 |
Fixed maturities | Red Mountain | ||
Investment [Line Items] | ||
Amortized Cost | 704,904 | 654,177 |
Gross Unrecognized Holding Gains | 0 | 0 |
Gross Unrecognized Holding Losses | (19,163) | (67,222) |
Fair Value | 685,741 | 586,955 |
Total OTTI Recognized in OCI | 0 | 0 |
Fixed maturities | Steel City | ||
Investment [Line Items] | ||
Amortized Cost | 2,014,000 | 2,116,000 |
Gross Unrecognized Holding Gains | 76,586 | 30,385 |
Gross Unrecognized Holding Losses | 0 | 0 |
Fair Value | 2,090,586 | $ 2,146,385 |
Total OTTI Recognized in OCI | $ 0 |
INVESTMENT OPERATIONS - Additio
INVESTMENT OPERATIONS - Additional Information (Details) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)subsidiaryposition | Dec. 31, 2016USD ($)subsidiary | |
Variable Interest Entities | ||||
Trading securities | $ 2,725,694,000 | $ 2,699,591,000 | ||
Gross unrealized losses, 12 Months or More | $ 602,685,000 | 1,196,195,000 | ||
Number of positions in unrealized loss position | position | 1,845 | |||
Available-for-sale securities, fair value | $ 39,819,928,000 | 36,570,665,000 | ||
Available-for-sale securities, amortized cost | 39,783,880,000 | 38,233,986,000 | ||
Held-to-maturity securities, unrecognized holding gain | 76,600,000 | |||
Held-to-maturity securities, unrecognized holding losses | 19,200,000 | |||
Non-income producing securities | 17,500,000 | |||
Policy loans | $ 1,615,615,000 | $ 1,650,240,000 | ||
Interest rate on collateral loans on life insurance policies | 13.64% | |||
Number of wholly owned subsidiaries that were determined to be VIEs | subsidiary | 2 | |||
Red Mountain | ||||
Variable Interest Entities | ||||
Number of wholly owned subsidiaries that were determined to be VIEs | subsidiary | 2 | |||
Ownership through an affiliate (as a percent) | 100.00% | |||
Risk of loss related to the VIE limited to the entity's investment | $ 10,000 | |||
Payments made | $ 0 | |||
Steel City | ||||
Variable Interest Entities | ||||
Ownership through an affiliate (as a percent) | 100.00% | |||
Risk of loss related to the VIE limited to the entity's investment | $ 10,000 | |||
Payments made | 0 | |||
Fixed maturities | ||||
Variable Interest Entities | ||||
Trading securities | 2,664,189,000 | $ 2,639,860,000 | ||
Other-than-temporary impairments | $ 0 | 0 | 0 | |
Available-for-sale securities, fair value | 38,511,863,000 | 35,543,477,000 | ||
Available-for-sale securities, amortized cost | 38,489,362,000 | 37,192,864,000 | ||
Held-to-maturity securities, accumulated unrecognized holding gain | 76,586,000 | 30,385,000 | ||
Held-to-maturity securities, accumulated unrecognized holding loss | 19,163,000 | 67,222,000 | ||
Fixed maturities | Predecessor | ||||
Variable Interest Entities | ||||
Other-than-temporary impairments | $ 0 | |||
Equity securities | ||||
Variable Interest Entities | ||||
Trading securities | 5,244,000 | 7,083,000 | ||
Other-than-temporary impairments | $ 0 | 0 | 0 | |
Gross unrealized losses, 12 Months or More | 7,370,000 | 6,412,000 | ||
Available-for-sale securities, fair value | 749,116,000 | 747,406,000 | ||
Available-for-sale securities, amortized cost | 735,569,000 | 761,340,000 | ||
Equity securities | Predecessor | ||||
Variable Interest Entities | ||||
Other-than-temporary impairments | $ 0 | |||
Short-term investments | ||||
Variable Interest Entities | ||||
Trading securities | 56,261,000 | 52,648,000 | ||
Available-for-sale securities, fair value | 558,949,000 | 279,782,000 | ||
Available-for-sale securities, amortized cost | 558,949,000 | 279,782,000 | ||
Residential mortgage-backed securities | ||||
Variable Interest Entities | ||||
Trading securities | 259,694,000 | 255,027,000 | ||
Gross unrealized losses, 12 Months or More | 13,362,000 | 4,117,000 | ||
Available-for-sale securities, fair value | 2,327,212,000 | 1,898,483,000 | ||
Available-for-sale securities, amortized cost | 2,330,832,000 | 1,913,413,000 | ||
Commercial mortgage-backed securities | ||||
Variable Interest Entities | ||||
Trading securities | 146,804,000 | 149,683,000 | ||
Gross unrealized losses, 12 Months or More | 21,594,000 | 4,013,000 | ||
Available-for-sale securities, fair value | 1,889,822,000 | 1,811,470,000 | ||
Available-for-sale securities, amortized cost | 1,914,998,000 | 1,850,620,000 | ||
Other asset-backed securities | ||||
Variable Interest Entities | ||||
Trading securities | 138,097,000 | 200,084,000 | ||
Gross unrealized losses, 12 Months or More | $ 5,441,000 | $ 11,407,000 | ||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (at least) | 97.00% | 97.00% | ||
Available-for-sale securities, fair value | $ 1,249,549,000 | $ 1,211,533,000 | ||
Available-for-sale securities, amortized cost | 1,234,376,000 | 1,210,490,000 | ||
Other government-related securities | ||||
Variable Interest Entities | ||||
Trading securities | 63,925,000 | 63,012,000 | ||
Gross unrealized losses, 12 Months or More | 4,778,000 | 11,890,000 | ||
Available-for-sale securities, fair value | 287,282,000 | 239,921,000 | ||
Available-for-sale securities, amortized cost | 282,767,000 | 253,182,000 | ||
States, municipals, and political subdivisions | ||||
Variable Interest Entities | ||||
Trading securities | 326,925,000 | 316,519,000 | ||
Gross unrealized losses, 12 Months or More | 43,874,000 | 41,749,000 | ||
Available-for-sale securities, fair value | 1,741,645,000 | 1,656,503,000 | ||
Available-for-sale securities, amortized cost | 1,770,299,000 | 1,760,837,000 | ||
Corporate securities | ||||
Variable Interest Entities | ||||
Trading securities | 1,698,183,000 | 1,624,589,000 | ||
Gross unrealized losses, 12 Months or More | 472,394,000 | 1,114,729,000 | ||
Available-for-sale securities, fair value | 29,702,010,000 | 27,371,565,000 | ||
Available-for-sale securities, amortized cost | 29,606,484,000 | $ 28,801,768,000 | ||
Below investment grade | ||||
Variable Interest Entities | ||||
Trading securities | 229,000,000 | |||
Available-for-sale securities, fair value | 1,900,000,000 | |||
Available-for-sale securities, amortized cost | 1,900,000,000 | |||
Securities not publicly traded | $ 311,800,000 | |||
Minimum | ||||
Variable Interest Entities | ||||
Interest rate on standard policy loans | 3.00% | |||
Maximum | ||||
Variable Interest Entities | ||||
Interest rate on standard policy loans | 8.00% |
FAIR VALUE OF FINANCIAL INSTR85
FAIR VALUE OF FINANCIAL INSTRUMENTS - Hierarchy for Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Trading securities | $ 2,725,694 | $ 2,699,591 |
Total fixed maturity securities | 41,176,052 | 38,183,337 |
Equity securities | 754,360 | 754,489 |
Other long-term investments | 605,075 | 542,243 |
Short-term investments | 615,210 | 332,431 |
Assets related to separate accounts | ||
Variable annuity | 13,956,071 | 13,244,252 |
Variable universal life | 1,035,202 | 895,925 |
Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 38,511,863 | |
Trading securities | 2,664,189 | 2,639,860 |
Residential mortgage-backed securities | ||
Assets: | ||
Trading securities | 259,694 | 255,027 |
Commercial mortgage-backed securities | ||
Assets: | ||
Trading securities | 146,804 | 149,683 |
Other asset-backed securities | ||
Assets: | ||
Trading securities | 138,097 | 200,084 |
States, municipals, and political subdivisions | ||
Assets: | ||
Trading securities | 326,925 | 316,519 |
Other government-related securities | ||
Assets: | ||
Trading securities | 63,925 | 63,012 |
Corporate securities | ||
Assets: | ||
Trading securities | 1,698,183 | 1,624,589 |
Redeemable preferred stock | ||
Assets: | ||
Trading securities | 3,327 | 3,985 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Total investments | 504,228 | 553,308 |
Level 3 | Corporate securities | ||
Assets: | ||
Total investments | 617,770 | 638,279 |
Measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total fixed maturity securities | 1,055,756 | 1,095,210 |
Equity securities | 688,214 | 685,443 |
Other long-term investments | 51,102 | 82,420 |
Short-term investments | 482,461 | 328,829 |
Total investments | 2,277,533 | 2,191,902 |
Cash | 252,310 | 348,182 |
Other assets | 28,771 | 23,830 |
Assets related to separate accounts | ||
Variable annuity | 13,956,071 | 13,244,252 |
Variable universal life | 1,035,202 | 895,925 |
Total assets measured at fair value on a recurring basis | 17,549,887 | 16,704,091 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 5,755 | 13,004 |
Total liabilities measured at fair value on a recurring basis | 5,755 | 13,004 |
Measured at fair value on a recurring basis | Level 1 | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,031,246 | 1,068,801 |
Trading securities | 24,510 | 26,409 |
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 958,775 | 1,002,020 |
Trading securities | 21,183 | 22,424 |
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Redeemable preferred stock | ||
Assets: | ||
Available-for-sale securities, fair value | 72,471 | 66,781 |
Trading securities | 3,327 | 3,985 |
Measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total fixed maturity securities | 38,948,366 | 35,771,419 |
Equity securities | 36 | 36 |
Other long-term investments | 417,969 | 335,498 |
Short-term investments | 132,749 | 3,602 |
Total investments | 39,499,120 | 36,110,555 |
Cash | 0 | 0 |
Other assets | 0 | 0 |
Assets related to separate accounts | ||
Variable annuity | 0 | 0 |
Variable universal life | 0 | 0 |
Total assets measured at fair value on a recurring basis | 39,499,120 | 36,110,555 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 240,927 | 163,974 |
Total liabilities measured at fair value on a recurring basis | 240,927 | 163,974 |
Measured at fair value on a recurring basis | Level 2 | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 36,349,351 | 33,248,023 |
Trading securities | 2,599,015 | 2,523,396 |
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 2,327,212 | 1,898,480 |
Trading securities | 259,694 | 255,027 |
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,889,822 | 1,811,470 |
Trading securities | 146,804 | 149,683 |
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 745,184 | 648,929 |
Trading securities | 102,875 | 115,521 |
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 264,477 | 266,139 |
Trading securities | 6,051 | 4,537 |
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 1,741,645 | 1,656,503 |
Trading securities | 326,925 | 316,519 |
Measured at fair value on a recurring basis | Level 2 | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 287,282 | 239,921 |
Trading securities | 63,925 | 63,012 |
Measured at fair value on a recurring basis | Level 2 | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 29,075,109 | 26,707,519 |
Trading securities | 1,692,741 | 1,619,097 |
Measured at fair value on a recurring basis | Level 2 | Redeemable preferred stock | ||
Assets: | ||
Available-for-sale securities, fair value | 18,620 | 19,062 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Total fixed maturity securities | 1,171,930 | 1,316,708 |
Equity securities | 66,110 | 69,010 |
Other long-term investments | 136,004 | 124,325 |
Short-term investments | 0 | 0 |
Total investments | 1,374,044 | 1,510,043 |
Cash | 0 | 0 |
Other assets | 0 | 0 |
Assets related to separate accounts | ||
Variable annuity | 0 | 0 |
Variable universal life | 0 | 0 |
Total assets measured at fair value on a recurring basis | 1,374,044 | 1,510,043 |
Liabilities: | ||
Annuity account balances | 83,472 | 87,616 |
Other liabilities | 760,890 | 571,843 |
Total liabilities measured at fair value on a recurring basis | 844,362 | 659,459 |
Measured at fair value on a recurring basis | Level 3 | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,131,266 | 1,226,653 |
Trading securities | 40,664 | 90,055 |
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 3 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 504,365 | 562,604 |
Trading securities | 35,222 | 84,563 |
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 626,901 | 664,046 |
Trading securities | 5,442 | 5,492 |
Measured at fair value on a recurring basis | Level 3 | Redeemable preferred stock | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Fair Values | ||
Assets: | ||
Total fixed maturity securities | 41,176,052 | 38,183,337 |
Equity securities | 754,360 | 754,489 |
Other long-term investments | 605,075 | 542,243 |
Short-term investments | 615,210 | 332,431 |
Total investments | 43,150,697 | 39,812,500 |
Cash | 252,310 | 348,182 |
Other assets | 28,771 | 23,830 |
Assets related to separate accounts | ||
Variable annuity | 13,956,071 | 13,244,252 |
Variable universal life | 1,035,202 | 895,925 |
Total assets measured at fair value on a recurring basis | 58,423,051 | 54,324,689 |
Liabilities: | ||
Annuity account balances | 83,472 | 87,616 |
Other liabilities | 1,007,572 | 748,821 |
Total liabilities measured at fair value on a recurring basis | 1,091,044 | 836,437 |
Measured at fair value on a recurring basis | Fair Values | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 38,511,863 | 35,543,477 |
Trading securities | 2,664,189 | 2,639,860 |
Measured at fair value on a recurring basis | Fair Values | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 2,327,212 | 1,898,483 |
Trading securities | 259,694 | 255,027 |
Measured at fair value on a recurring basis | Fair Values | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,889,822 | 1,811,470 |
Trading securities | 146,804 | 149,683 |
Measured at fair value on a recurring basis | Fair Values | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,249,549 | 1,211,533 |
Trading securities | 138,097 | 200,084 |
Measured at fair value on a recurring basis | Fair Values | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,223,252 | 1,268,159 |
Trading securities | 27,234 | 26,961 |
Measured at fair value on a recurring basis | Fair Values | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 1,741,645 | 1,656,503 |
Trading securities | 326,925 | 316,519 |
Measured at fair value on a recurring basis | Fair Values | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 287,282 | 239,921 |
Trading securities | 63,925 | 63,012 |
Measured at fair value on a recurring basis | Fair Values | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 29,702,010 | 27,371,565 |
Trading securities | 1,698,183 | 1,624,589 |
Measured at fair value on a recurring basis | Fair Values | Redeemable preferred stock | ||
Assets: | ||
Available-for-sale securities, fair value | 91,091 | 85,843 |
Trading securities | $ 3,327 | $ 3,985 |
FAIR VALUE OF FINANCIAL INSTR86
FAIR VALUE OF FINANCIAL INSTRUMENTS - Determination of Fair Values Additional Information (Details) | 12 Months Ended | ||||||
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($)primary_source | Dec. 31, 2017USD ($)quote | Dec. 31, 2017USD ($)input_method | Dec. 31, 2016USD ($) | |
Determination of fair values | |||||||
Transferred out of Level 3 | $ 28,900,000 | $ 221,500,000 | |||||
Number of primary sources of information used for determining fair value | primary_source | 1 | ||||||
Total number of primary sources of information available for determining fair value | 3 | 3 | |||||
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services | 92.70% | ||||||
Number of independent non-binding broker quotes obtained per security | quote | 1 | ||||||
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations | 100.00% | ||||||
Fair value, liabilities | $ 1,007,572,000 | $ 1,007,572,000 | 1,007,572,000 | $ 1,007,572,000 | $ 1,007,572,000 | $ 1,007,572,000 | 748,821,000 |
Transfers from Level 2 to Level 1 | 0 | 0 | 0 | 0 | 0 | 0 | 12,200,000 |
Transfers from Level 1 to Level 2 | 0 | 0 | 0 | 0 | 0 | 0 | 100,000 |
Level 3 | |||||||
Determination of fair values | |||||||
Financial instruments that are valued using broker quotes | 50,400,000 | 50,400,000 | 50,400,000 | 50,400,000 | 50,400,000 | 50,400,000 | 128,200,000 |
Financial instruments with book value approximating fair value | 65,700,000 | 65,700,000 | 65,700,000 | 65,700,000 | 65,700,000 | 65,700,000 | $ 65,900,000 |
Asset-backed securities | Level 2 | |||||||
Determination of fair values | |||||||
Fair value, assets | 5,500,000,000 | 5,500,000,000 | 5,500,000,000 | 5,500,000,000 | 5,500,000,000 | 5,500,000,000 | |
Asset-backed securities | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | 539,600,000 | $ 539,600,000 | 539,600,000 | 539,600,000 | 539,600,000 | 539,600,000 | |
Other asset-backed securities | |||||||
Determination of fair values | |||||||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (at least) | 97.00% | 97.00% | |||||
Other asset-backed securities | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | 504,228,000 | $ 504,228,000 | 504,228,000 | 504,228,000 | 504,228,000 | 504,228,000 | $ 553,308,000 |
Financial instruments that are valued using broker quotes | 35,400,000 | 35,400,000 | 35,400,000 | 35,400,000 | 35,400,000 | 35,400,000 | 93,900,000 |
Other asset-backed securities | Level 3 | Available-for-sale securities | |||||||
Determination of fair values | |||||||
Fair value, assets | 504,400,000 | $ 504,400,000 | 504,400,000 | 504,400,000 | 504,400,000 | 504,400,000 | |
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (at least) | 97.00% | ||||||
Other asset-backed securities | Level 3 | Trading securities | |||||||
Determination of fair values | |||||||
Fair value, assets | 35,200,000 | $ 35,200,000 | 35,200,000 | 35,200,000 | 35,200,000 | 35,200,000 | |
Corporate securities | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | 617,770,000 | 617,770,000 | 617,770,000 | 617,770,000 | 617,770,000 | 617,770,000 | 638,279,000 |
Financial instruments that are valued using broker quotes | 14,600,000 | 14,600,000 | 14,600,000 | 14,600,000 | 14,600,000 | 14,600,000 | 31,300,000 |
Corporate Bonds, U.S. Government-Related Securities, and Other Government Related Securities | Level 2 | |||||||
Determination of fair values | |||||||
Fair value, assets | 33,500,000,000 | 33,500,000,000 | 33,500,000,000 | 33,500,000,000 | 33,500,000,000 | 33,500,000,000 | |
Corporate Bonds, U.S. Government-Related Securities, and Other Government Related Securities | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | $ 632,300,000 | 632,300,000 | 632,300,000 | 632,300,000 | 632,300,000 | 632,300,000 | |
Embedded derivative - GLWB | |||||||
Determination of fair values | |||||||
Discount rate curve, base rate | LIBOR | ||||||
Fair value, liabilities | $ 2,400,000,000 | $ 2,400,000,000 | 2,400,000,000 | 2,400,000,000 | 2,400,000,000 | 2,400,000,000 | |
Unrealized gain (loss) of securities | 226,600,000 | ||||||
Embedded derivative - GLWB | Minimum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 91.10% | ||||||
Embedded derivative - GLWB | Maximum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 106.60% | ||||||
Embedded derivative - GLWB | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | $ 115,370,000 | ||||||
Fair value, liabilities | 111,760,000 | $ 111,760,000 | 111,760,000 | 111,760,000 | 111,760,000 | 111,760,000 | |
Embedded derivative - GLWB | Level 3 | Actuarial cash flow model | Minimum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 91.10% | 91.10% | |||||
Embedded derivative - GLWB | Level 3 | Actuarial cash flow model | Maximum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 1.00% | 106.60% | |||||
Equity securities | Level 2 and Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | 66,100,000 | $ 66,100,000 | 66,100,000 | 66,100,000 | 66,100,000 | 66,100,000 | |
Federal home loan bank stock | 65,500,000 | 65,500,000 | 65,500,000 | 65,500,000 | 65,500,000 | 65,500,000 | |
Equity securities | Level 3 | |||||||
Determination of fair values | |||||||
Financial instruments that are valued using broker quotes | $ 400,000 | 400,000 | 400,000 | 400,000 | 400,000 | 400,000 | $ 3,100,000 |
Embedded derivative—FIA | |||||||
Determination of fair values | |||||||
Discount rate curve, base rate | LIBOR | ||||||
Embedded derivative—FIA | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, liabilities | $ 218,676,000 | $ 218,676,000 | 218,676,000 | 218,676,000 | 218,676,000 | 218,676,000 | 147,368,000 |
Embedded derivative—FIA | Level 3 | Annuity account | Actuarial cash flow model | Minimum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 46.00% | ||||||
Embedded derivative—FIA | Level 3 | Annuity account | Actuarial cash flow model | Maximum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 113.00% | ||||||
Embedded derivative—IUL | Annuity account | |||||||
Determination of fair values | |||||||
Discount rate curve, base rate | LIBOR | ||||||
Embedded derivative—IUL | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, liabilities | $ 80,212,000 | $ 80,212,000 | 80,212,000 | 80,212,000 | 80,212,000 | 80,212,000 | $ 46,051,000 |
Embedded derivative—IUL | Level 3 | Actuarial cash flow model | Minimum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 34.00% | 38.00% | |||||
Embedded derivative—IUL | Level 3 | Actuarial cash flow model | Maximum | |||||||
Determination of fair values | |||||||
Mortality (as a percent) | 152.00% | 153.00% | |||||
Measured at fair value on a recurring basis | Level 2 | |||||||
Determination of fair values | |||||||
Fair value, assets | 39,499,120,000 | $ 39,499,120,000 | 39,499,120,000 | 39,499,120,000 | 39,499,120,000 | 39,499,120,000 | $ 36,110,555,000 |
Annuity account balances | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | |||||||
Determination of fair values | |||||||
Fair value, assets | 1,374,044,000 | 1,374,044,000 | 1,374,044,000 | 1,374,044,000 | 1,374,044,000 | 1,374,044,000 | 1,510,043,000 |
Annuity account balances | $ 83,472,000 | $ 83,472,000 | $ 83,472,000 | $ 83,472,000 | $ 83,472,000 | $ 83,472,000 | $ 87,616,000 |
FAIR VALUE OF FINANCIAL INSTR87
FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of Level 3 Financial Instruments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets and liabilities measured at fair value on a recurring basis | ||
Transfers from Level 1 to Level 2 | $ 0 | $ 100,000 |
Fair value, liabilities | 1,007,572,000 | 748,821,000 |
Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 504,228,000 | 553,308,000 |
Corporate securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 617,770,000 | 638,279,000 |
Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, liabilities | 2,400,000,000 | |
Embedded derivative - GLWB | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, assets | 115,370,000 | |
Fair value, liabilities | 111,760,000 | |
Embedded derivative—FIA | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, liabilities | 218,676,000 | 147,368,000 |
Embedded derivative—IUL | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value, liabilities | $ 80,212,000 | $ 46,051,000 |
Actuarial cash flow model | Embedded derivative - GLWB | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Specified one-time over-utilization rate (as a percent) | 400.00% | |
Utilization (as a percent) | 99.00% | 99.00% |
Policies that have a one-time over-utilization rate of a specified amount (as a percent) | 10.00% | 10.00% |
Actuarial cash flow model | Embedded derivative—FIA | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Expenses per policy | $ 146 | $ 126 |
Withdrawal rate prior to age 70 (as a percent) | 1.50% | |
Withdrawal rate for ages 70 or more (as a percent) | 100.00% | |
Minimum | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Paydown rate (as a percent) | 11.31% | |
Minimum | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 91.10% | |
Minimum | Liquidation technique | Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liquidation value | $ 90 | $ 88 |
Minimum | Discounted Cash Flow | Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liquidity Premium | 0.06% | |
Minimum | Discounted Cash Flow | Corporate securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Spread over treasury (as a percent) | 0.81% | 0.31% |
Minimum | Actuarial cash flow model | Embedded derivative - GLWB | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 91.10% | 91.10% |
Fair value inputs, lapse rate | 1.00% | 0.30% |
Nonperformance risk (as a percent) | 0.11% | 0.18% |
Minimum | Actuarial cash flow model | Embedded derivative—FIA | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value inputs, lapse rate | 1.00% | 2.00% |
Nonperformance risk (as a percent) | 0.11% | 0.18% |
Asset earned rate (as a percent) | 4.08% | |
Withdrawal rate (as a percent) | 1.00% | |
Minimum | Actuarial cash flow model | Embedded derivative—IUL | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 34.00% | 38.00% |
Fair value inputs, lapse rate | 0.50% | 0.50% |
Nonperformance risk (as a percent) | 0.11% | 0.18% |
Maximum | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Paydown rate (as a percent) | 11.97% | |
Maximum | Embedded derivative - GLWB | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 106.60% | |
Maximum | Liquidation technique | Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liquidation value | $ 97 | $ 97.25 |
Maximum | Discounted Cash Flow | Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liquidity Premium | 1.17% | |
Maximum | Discounted Cash Flow | Corporate securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Spread over treasury (as a percent) | 3.95% | 4.50% |
Maximum | Actuarial cash flow model | Embedded derivative - GLWB | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 1.00% | 106.60% |
Fair value inputs, lapse rate | 30.00% | 15.00% |
Nonperformance risk (as a percent) | 0.79% | 1.09% |
Maximum | Actuarial cash flow model | Embedded derivative—FIA | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value inputs, lapse rate | 30.00% | 40.00% |
Nonperformance risk (as a percent) | 0.79% | 1.09% |
Asset earned rate (as a percent) | 4.66% | |
Withdrawal rate (as a percent) | 100.00% | |
Maximum | Actuarial cash flow model | Embedded derivative—IUL | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 152.00% | 153.00% |
Fair value inputs, lapse rate | 10.00% | 10.00% |
Nonperformance risk (as a percent) | 0.79% | 1.09% |
Weighted Average | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Paydown rate (as a percent) | 11.54% | |
Weighted Average | Liquidation technique | Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liquidation value | $ 94.91 | $ 95.04 |
Weighted Average | Discounted Cash Flow | Other asset-backed securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liquidity Premium | 0.75% | |
Weighted Average | Discounted Cash Flow | Corporate securities | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Spread over treasury (as a percent) | 1.06% | 2.04% |
Annuity account | Minimum | Actuarial cash flow model | Embedded derivative—FIA | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 46.00% | |
Annuity account | Maximum | Actuarial cash flow model | Embedded derivative—FIA | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Mortality (as a percent) | 113.00% |
FAIR VALUE OF FINANCIAL INSTR88
FAIR VALUE OF FINANCIAL INSTRUMENTS - Reconciliation of Fair Value Measurements for Level 3 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Transfers | ||
Securities transferred into Level 3 | $ 75,700,000 | |
Transferred out of Level 3 | $ 28,900,000 | 221,500,000 |
Transfers from Level 2 to Level 1 | 0 | 12,200,000 |
Transfers from Level 1 to Level 2 | 0 | 100,000 |
Transfers from Level 1 to Level 2, Liabilities | 120,000,000 | |
Other long-term investments | ||
Transfers | ||
Transfers from Level 1 to Level 2 | 169,400,000 | |
Level 3 | ||
Assets: | ||
Beginning Balance | 1,510,043,000 | |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Ending Balance | 1,374,044,000 | 1,510,043,000 |
Liabilities: | ||
Beginning Balance | 659,459,000 | 678,068,000 |
Total Realized and Unrealized Gains Included in Earnings | 93,071,000 | 499,894,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (286,119,000) | (489,325,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 623,000 | 555,000 |
Settlements | 8,768,000 | 9,844,000 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 1,249,000 |
Ending Balance | 844,362,000 | 659,459,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (189,047,000) | 13,713,000 |
Level 3 | Annuity account | ||
Liabilities: | ||
Beginning Balance | 87,616,000 | 92,512,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (4,001,000) | (3,144,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 623,000 | 555,000 |
Settlements | 8,768,000 | 9,844,000 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 1,249,000 |
Ending Balance | 83,472,000 | 87,616,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other liabilities | ||
Liabilities: | ||
Beginning Balance | 571,843,000 | 585,556,000 |
Total Realized and Unrealized Gains Included in Earnings | 93,071,000 | 499,894,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (282,118,000) | (486,181,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 760,890,000 | 571,843,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (189,047,000) | 13,713,000 |
Level 3 | Total investments | ||
Assets: | ||
Beginning Balance | 1,510,043,000 | 1,826,883,000 |
Total Realized and Unrealized Gains Included in Earnings | 32,438,000 | 90,991,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 42,908,000 | 83,446,000 |
Total Realized and Unrealized Losses Included in Earnings | (19,324,000) | (59,720,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (24,073,000) | (64,574,000) |
Purchases | 143,784,000 | 169,403,000 |
Sales | (281,289,000) | (379,212,000) |
Transfers in/out of Level 3 | (28,937,000) | (145,765,000) |
Other | (1,506,000) | (11,409,000) |
Ending Balance | 1,374,044,000 | 1,510,043,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 15,209,000 | 28,190,000 |
Level 3 | Residential mortgage-backed securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 3,000 | 3,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 83,000 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 11,862,000 | 0 |
Sales | (3,000) | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (11,944,000) | 0 |
Other | (1,000) | 0 |
Ending Balance | 0 | 3,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Residential mortgage-backed securities | Trading securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Commercial mortgage-backed securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 7,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | (1,750,000) |
Purchases | 0 | 25,607,000 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | (23,844,000) |
Other | 0 | (20,000) |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Commercial mortgage-backed securities | Trading securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other asset-backed securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 562,604,000 | 587,031,000 |
Total Realized and Unrealized Gains Included in Earnings | 1,409,000 | 6,859,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 15,136,000 | 42,865,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (10,931,000) | (29,673,000) |
Purchases | 100,000 | 30,441,000 |
Sales | (59,175,000) | (79,314,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (6,643,000) | 7,457,000 |
Other | 1,865,000 | (3,062,000) |
Ending Balance | 504,365,000 | 562,604,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other asset-backed securities | Trading securities | ||
Assets: | ||
Beginning Balance | 84,563,000 | 152,912,000 |
Total Realized and Unrealized Gains Included in Earnings | 3,768,000 | 5,386,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (1,157,000) | (4,790,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | (52,835,000) | (70,270,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 172,000 |
Other | 883,000 | 1,153,000 |
Ending Balance | 35,222,000 | 84,563,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,483,000 | 594,000 |
Level 3 | U.S. government-related securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | U.S. government-related securities | Trading securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | States, municipals, and political subdivisions | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | States, municipals, and political subdivisions | Trading securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other government-related securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Other government-related securities | Trading securities | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Corporate securities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 664,046,000 | 902,119,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 925,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 27,637,000 | 40,574,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | (4,135,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (13,089,000) | (33,151,000) |
Purchases | 131,822,000 | 102,426,000 |
Sales | (169,002,000) | (225,557,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (10,353,000) | (109,792,000) |
Other | (4,160,000) | (9,363,000) |
Ending Balance | 626,901,000 | 664,046,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Corporate securities | Trading securities | ||
Assets: | ||
Beginning Balance | 5,492,000 | 18,225,000 |
Total Realized and Unrealized Gains Included in Earnings | 101,000 | 713,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (58,000) | (442,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 10,906,000 |
Sales | 0 | (4,071,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | (19,722,000) |
Other | (93,000) | (117,000) |
Ending Balance | 5,442,000 | 5,492,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 44,000 | 101,000 |
Level 3 | Fixed maturities | ||
Assets: | ||
Beginning Balance | 1,316,708,000 | 1,660,290,000 |
Total Realized and Unrealized Gains Included in Earnings | 5,278,000 | 13,883,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 42,856,000 | 83,446,000 |
Total Realized and Unrealized Losses Included in Earnings | (1,215,000) | (9,367,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (24,020,000) | (64,574,000) |
Purchases | 143,784,000 | 169,380,000 |
Sales | (281,015,000) | (379,212,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (28,940,000) | (145,729,000) |
Other | (1,506,000) | (11,409,000) |
Ending Balance | 1,171,930,000 | 1,316,708,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,527,000 | 695,000 |
Level 3 | Fixed maturities | Available-for-sale securities | ||
Assets: | ||
Beginning Balance | 1,226,653,000 | 1,489,153,000 |
Total Realized and Unrealized Gains Included in Earnings | 1,409,000 | 7,784,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 42,856,000 | 83,446,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | (4,135,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (24,020,000) | (64,574,000) |
Purchases | 143,784,000 | 158,474,000 |
Sales | (228,180,000) | (304,871,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | (28,940,000) | (126,179,000) |
Other | (2,296,000) | (12,445,000) |
Ending Balance | 1,131,266,000 | 1,226,653,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 |
Level 3 | Fixed maturities | Trading securities | ||
Assets: | ||
Beginning Balance | 90,055,000 | 171,137,000 |
Total Realized and Unrealized Gains Included in Earnings | 3,869,000 | 6,099,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (1,215,000) | (5,232,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 10,906,000 |
Sales | (52,835,000) | (74,341,000) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | (19,550,000) |
Other | 790,000 | 1,036,000 |
Ending Balance | 40,664,000 | 90,055,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,527,000 | 695,000 |
Level 3 | Equity securities | ||
Assets: | ||
Beginning Balance | 69,010,000 | 69,763,000 |
Total Realized and Unrealized Gains Included in Earnings | 2,000 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 52,000 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (2,630,000) | (740,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (53,000) | 0 |
Purchases | 0 | 23,000 |
Sales | (274,000) | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 3,000 | (36,000) |
Other | 0 | 0 |
Ending Balance | 66,110,000 | 69,010,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,000 | 0 |
Level 3 | Other long-term investments | ||
Assets: | ||
Beginning Balance | 124,325,000 | 96,830,000 |
Total Realized and Unrealized Gains Included in Earnings | 27,158,000 | 77,108,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (15,479,000) | (49,613,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 136,004,000 | 124,325,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 11,679,000 | 27,495,000 |
Level 3 | Short-term investments | ||
Assets: | ||
Beginning Balance | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 0 | 0 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR89
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying amounts and estimated fair values of the Company's financial instruments | ||
Capital Lease Obligations | $ 1,700 | |
Assets: | ||
Mortgage loans on real estate | 6,817,723 | $ 6,132,125 |
Policy loans | 1,615,615 | 1,650,240 |
Fixed maturities, held-to-maturity | 2,718,904 | 2,770,177 |
Liabilities: | ||
Stable value product account balances | 4,698,371 | 3,501,636 |
Annuity account balances | 10,921,190 | 10,642,115 |
Other policyholders' funds | 1,267,198 | 1,165,749 |
Debt: | ||
Subordinated debt securities | 495,289 | 441,202 |
Non-recourse funding obligations | 2,747,477 | 2,796,474 |
Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 681,285 | 628,025 |
Carrying Amounts | ||
Assets: | ||
Mortgage loans on real estate | 6,817,723 | 6,132,125 |
Policy loans | 1,615,615 | 1,650,240 |
Fixed maturities, held-to-maturity | 2,718,904 | 2,770,177 |
Liabilities: | ||
Stable value product account balances | 4,698,371 | 3,501,636 |
Annuity account balances | 220,498 | 221,634 |
Other policyholders' funds | 133,508 | 135,367 |
Debt: | ||
Bank borrowings | 0 | 170,000 |
Senior Notes | 943,370 | 993,285 |
Subordinated debt securities | 495,289 | 441,202 |
Non-recourse funding obligations | 2,747,477 | 2,796,474 |
Carrying Amounts | Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 2,700,000 | 2,700,000 |
Fair Values | Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 2,800,000 | 2,700,000 |
Fair Values | Level 3 | ||
Assets: | ||
Mortgage loans on real estate | 6,740,177 | 5,930,992 |
Policy loans | 1,615,615 | 1,650,240 |
Fixed maturities, held-to-maturity | 2,776,327 | 2,733,340 |
Liabilities: | ||
Stable value product account balances | 4,698,868 | 3,488,877 |
Annuity account balances | 220,498 | 221,658 |
Other policyholders' funds | 134,253 | 136,127 |
Debt: | ||
Bank borrowings | 0 | 170,000 |
Non-recourse funding obligations | 2,804,983 | 2,765,558 |
Fair Values | Level 2 | ||
Debt: | ||
Senior Notes | 933,926 | 937,074 |
Subordinated debt securities | $ 501,215 | $ 443,355 |
DERIVATIVE FINANCIAL INSTRUME90
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains (Losses), Derivative Instruments (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | $ 29,997 | $ (305,828) | $ (40,288) | |
Derivatives not designated as hedging instruments | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 29,997 | (305,828) | (40,288) | |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 166,092 | (103,009) | 390 | |
Derivatives not designated as hedging instruments | Other derivatives | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 91 | 50 | (24) | |
Derivatives not designated as hedging instruments | Annuity account | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (135,299) | (186,863) | (49,692) | |
Derivatives not designated as hedging instruments | Annuity account | Interest rate futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (14,818) | 26,015 | (3,450) | |
Derivatives not designated as hedging instruments | Annuity account | Equity futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (5,033) | (91,776) | (106,431) | |
Derivatives not designated as hedging instruments | Annuity account | Currency futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 7,169 | (23,176) | 33,836 | |
Derivatives not designated as hedging instruments | Annuity account | Equity options | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (27,733) | (94,791) | (60,962) | |
Derivatives not designated as hedging instruments | Annuity account | Interest rate swaptions | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (13,354) | (2,490) | (1,161) | |
Derivatives not designated as hedging instruments | Annuity account | Interest rate swaps | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (85,942) | 27,981 | 20,420 | |
Derivatives not designated as hedging instruments | Annuity account | Total Return Swap | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 0 | (32,240) | 0 | |
Derivatives not designated as hedging instruments | Annuity account | Embedded derivative - GLWB | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 4,412 | 3,614 | 68,056 | |
Derivatives not designated as hedging instruments | FIA | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 123 | (10,651) | (4,097) | |
Derivatives not designated as hedging instruments | FIA | Equity futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (355) | 642 | 4,248 | |
Derivatives not designated as hedging instruments | FIA | Equity options | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 1,211 | 44,585 | 8,149 | |
Derivatives not designated as hedging instruments | FIA | Embedded derivative—FIA | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (738) | (55,878) | (16,494) | |
Derivatives not designated as hedging instruments | FIA | Volatility futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 5 | 0 | 0 | |
Derivatives not designated as hedging instruments | IUL | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (1,010) | (5,355) | 13,135 | |
Derivatives not designated as hedging instruments | IUL | Equity futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 144 | (818) | 129 | |
Derivatives not designated as hedging instruments | IUL | Equity options | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (540) | 9,580 | 3,477 | |
Derivatives not designated as hedging instruments | IUL | Embedded derivative—IUL | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | $ (614) | $ (14,117) | $ 9,529 | |
Predecessor | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | $ (123,274) | |||
Predecessor | Derivatives not designated as hedging instruments | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (123,274) | |||
Predecessor | Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (68,026) | |||
Predecessor | Derivatives not designated as hedging instruments | Other derivatives | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (37) | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (53,581) | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Interest rate futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 1,413 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Equity futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 9,221 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Currency futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 7,778 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Equity options | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 3,047 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Interest rate swaptions | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 9,268 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Interest rate swaps | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 122,710 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Total Return Swap | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 0 | |||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Embedded derivative - GLWB | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (207,018) | |||
Predecessor | Derivatives not designated as hedging instruments | FIA | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (1,032) | |||
Predecessor | Derivatives not designated as hedging instruments | FIA | Equity futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (184) | |||
Predecessor | Derivatives not designated as hedging instruments | FIA | Equity options | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (2,617) | |||
Predecessor | Derivatives not designated as hedging instruments | FIA | Embedded derivative—FIA | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 1,769 | |||
Predecessor | Derivatives not designated as hedging instruments | FIA | Volatility futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 0 | |||
Predecessor | Derivatives not designated as hedging instruments | IUL | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (598) | |||
Predecessor | Derivatives not designated as hedging instruments | IUL | Equity futures | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | 3 | |||
Predecessor | Derivatives not designated as hedging instruments | IUL | Equity options | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | (115) | |||
Predecessor | Derivatives not designated as hedging instruments | IUL | Embedded derivative—IUL | ||||
Realized investment gains (losses) - derivative instruments | ||||
Realized investment gains (losses) - derivatives, gross | $ (486) |
DERIVATIVE FINANCIAL INSTRUME91
DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivatives in Cash Flow Relationship (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) Next 12 Months | $ 600 | |||
Cash flow hedges | ||||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives, Effective Portion | $ (131) | (867) | $ 1,058 | |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss), Effective Portion | (131) | (694) | (60) | |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives, Effective Portion | 73 | 0 | 0 | |
Cash flow hedges | Foreign currency swaps | ||||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives, Effective Portion | (867) | 1,058 | ||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss), Effective Portion | (694) | (60) | ||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives, Effective Portion | $ 0 | $ 0 | ||
Cash flow hedges | Inflation | ||||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives, Effective Portion | (131) | |||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss), Effective Portion | (131) | |||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives, Effective Portion | $ 73 | |||
Predecessor | Cash flow hedges | ||||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives, Effective Portion | $ 13 | |||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss), Effective Portion | (36) | |||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives, Effective Portion | (7) | |||
Predecessor | Cash flow hedges | Inflation | ||||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives, Effective Portion | 13 | |||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss), Effective Portion | (36) | |||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives, Effective Portion | $ (7) |
DERIVATIVE FINANCIAL INSTRUME92
DERIVATIVE FINANCIAL INSTRUMENTS - Nature and Accounting Treatment of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | $ 12,331,534 | $ 11,184,348 |
Fair Value, Other long-term investments | 605,075 | 542,243 |
Notional Amount, Other liabilities | 13,986,996 | 14,274,589 |
Fair value, liabilities | 1,007,572 | 748,821 |
Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Fair Value, Other long-term investments | 1,009 | 2,573 |
Fair value, liabilities | 215,247 | 141,301 |
Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Fair Value, Other long-term investments | 134,995 | 121,752 |
Fair value, liabilities | 246,755 | 237,122 |
Embedded derivative—FIA | ||
Derivative [Line Items] | ||
Fair value, liabilities | 218,676 | 147,368 |
Embedded derivative—IUL | ||
Derivative [Line Items] | ||
Fair value, liabilities | 80,212 | 46,051 |
Cash flow hedges | Foreign currency swaps | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 117,178 | 117,178 |
Fair Value, Other long-term investments | 6,016 | 132 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 1,265,000 | 1,135,000 |
Fair Value, Other long-term investments | 55,411 | 71,644 |
Notional Amount, Other liabilities | 597,500 | 575,000 |
Fair value, liabilities | 2,960 | 10,208 |
Derivatives not designated as hedging instruments | Total Return Swap | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 190,938 | 0 |
Fair Value, Other long-term investments | 135 | 0 |
Notional Amount, Other liabilities | 243,388 | 0 |
Fair value, liabilities | 318 | 0 |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 64,472 | 64,123 |
Fair Value, Other long-term investments | 1,009 | 2,573 |
Notional Amount, Other liabilities | 2,390,539 | 2,450,692 |
Fair value, liabilities | 215,247 | 141,301 |
Derivatives not designated as hedging instruments | Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 4,897,069 | 4,601,633 |
Fair Value, Other long-term investments | 134,995 | 121,752 |
Notional Amount, Other liabilities | 4,718,311 | 5,962,044 |
Fair value, liabilities | 246,755 | 237,122 |
Derivatives not designated as hedging instruments | Interest rate futures | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 1,071,870 | 102,587 |
Fair Value, Other long-term investments | 3,178 | 894 |
Derivatives not designated as hedging instruments | Equity futures | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 62,266 | 654,113 |
Fair Value, Other long-term investments | 154 | 5,805 |
Notional Amount, Other liabilities | 318,795 | 102,667 |
Fair value, liabilities | 2,593 | 2,907 |
Derivatives not designated as hedging instruments | Currency futures | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 1,117 | 340,058 |
Fair Value, Other long-term investments | 2 | 7,883 |
Notional Amount, Other liabilities | 255,248 | 0 |
Fair value, liabilities | 2,087 | 0 |
Derivatives not designated as hedging instruments | Equity options | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 4,436,467 | 3,944,444 |
Fair Value, Other long-term investments | 403,961 | 328,908 |
Notional Amount, Other liabilities | 3,112,812 | 2,590,160 |
Fair value, liabilities | 237,807 | 157,253 |
Derivatives not designated as hedging instruments | Interest rate swaptions | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 225,000 | 225,000 |
Fair Value, Other long-term investments | 14 | 2,503 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivative [Line Items] | ||
Notional Amount, Other long-term investments | 157 | 212 |
Fair Value, Other long-term investments | 200 | 149 |
Derivatives not designated as hedging instruments | Embedded derivative—FIA | ||
Derivative [Line Items] | ||
Notional Amount, Other liabilities | 1,951,650 | 1,496,346 |
Fair value, liabilities | 218,676 | 147,368 |
Derivatives not designated as hedging instruments | Embedded derivative—IUL | ||
Derivative [Line Items] | ||
Notional Amount, Other liabilities | 168,349 | 103,838 |
Fair value, liabilities | 80,212 | 46,051 |
Derivatives not designated as hedging instruments | Interest rate futures | ||
Derivative [Line Items] | ||
Notional Amount, Other liabilities | 230,404 | 993,842 |
Fair value, liabilities | $ 917 | $ 6,611 |
OFFSETTING OF ASSETS AND LIAB93
OFFSETTING OF ASSETS AND LIABILITIES - Offsetting of Derivative Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | $ 605,075 | $ 542,243 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 605,075 | 542,243 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 108,830 | 100,890 |
Net Amount | 254,140 | 269,969 |
Derivatives not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 468,871 | 417,769 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 468,871 | 417,769 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 108,830 | 100,890 |
Net Amount | 117,936 | 145,495 |
Free-Standing derivatives | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 468,871 | 417,769 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 468,871 | 417,769 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 108,830 | 100,890 |
Net Amount | 117,936 | 145,495 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 136,204 | 124,474 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 136,204 | 124,474 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | 136,204 | 124,474 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 1,009 | 2,573 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 1,009 | 2,573 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | 1,009 | 2,573 |
Embedded derivative - GLWB | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 134,995 | 121,752 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 134,995 | 121,752 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | 134,995 | 121,752 |
Other | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 200 | 149 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 200 | 149 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | $ 200 | $ 149 |
OFFSETTING OF ASSETS AND LIAB94
OFFSETTING OF ASSETS AND LIABILITIES - Offsetting of Derivative Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | $ 1,007,572 | $ 748,821 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,007,572 | 748,821 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 4,577 | 5,595 |
Net Amount | 760,890 | 571,842 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 885,000 | 797,721 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 885,000 | 797,721 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 885,000 | 797,721 |
Total Liabilities | ||
Gross Amounts of Recognized Liabilities | 1,892,572 | 1,546,542 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,892,572 | 1,546,542 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 4,577 | 5,595 |
Net Amount | 1,645,890 | 1,369,563 |
Derivatives not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 246,682 | 176,979 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 246,682 | 176,979 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 4,577 | 5,595 |
Net Amount | 0 | 0 |
Free-Standing derivatives | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 246,682 | 176,979 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 246,682 | 176,979 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 242,105 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 4,577 | 5,595 |
Net Amount | 0 | 0 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 760,890 | 571,842 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 760,890 | 571,842 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 0 | 0 |
Net Amount | 760,890 | 571,842 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 215,247 | 141,301 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 215,247 | 141,301 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 0 | 0 |
Net Amount | 215,247 | 141,301 |
Embedded derivative - GLWB | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 246,755 | 237,122 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 246,755 | 237,122 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 0 | 0 |
Net Amount | 246,755 | 237,122 |
Embedded derivative—FIA | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 218,676 | 147,368 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 218,676 | 147,368 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 0 | 0 |
Net Amount | 218,676 | 147,368 |
Embedded derivative—IUL | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 80,212 | 46,051 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 80,212 | 46,051 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Paid | 0 | 0 |
Net Amount | $ 80,212 | $ 46,051 |
MORTGAGE LOANS - Loan Portfolio
MORTGAGE LOANS - Loan Portfolio (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Mortgage loans | ||
Mortgage loans holdings | $ 6,817,723 | $ 6,132,125 |
Percentage of Mortgage Loans on Real Estate | 100.00% | |
Amount of new loans funded | $ 1,600,000 | |
Average loan size of new loans funded | 8,800 | |
Average loan size of portfolio | $ 4,000 | |
Weighted-average interest rate on mortgage loans (as a percent) | 4.80% | |
Largest single mortgage loan | $ 61,100 | |
Amount that would become due in 2018, if loans are called at their next call dates | 161,200 | |
Amount that would become due in 2019 through 2023, if loans are called at their next call dates | 858,600 | |
Amount that would become due in 2024 through 2028, if loans are called at their next call dates | 105,800 | |
Amount that would become due after 2028, if loans are called at their next call dates | $ 2,000 | |
Alabama | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 9.60% | |
Florida | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 9.40% | |
Texas | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 8.40% | |
Georgia | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 7.90% | |
Ohio | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 5.50% | |
Tennessee | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 5.30% | |
California | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 5.20% | |
South Carolina | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 3.30% | |
North Carolina | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 4.90% | |
Utah | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 4.90% | |
All identified states | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 64.40% | |
Retail | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 52.10% | |
Office Buildings | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 10.90% | |
Apartments | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 8.80% | |
Warehouses | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 10.40% | |
Senior housing | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 13.70% | |
Other | ||
Mortgage loans | ||
Percentage of Mortgage Loans on Real Estate | 4.10% | |
Maximum | ||
Mortgage loans | ||
Single tenant's exposure as a percentage of mortgage loans (more than) | 1.50% | |
Period for exercise of call options or interest rate reset options | 11 years |
MORTGAGE LOANS - Additional Inf
MORTGAGE LOANS - Additional Information (Details) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Jan. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)loan_categoryloan | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Mortgage loans | |||||||
Number of nonperforming loans which have been restructured | loan | 0 | ||||||
Nonperforming loans which have been foreclosed | $ 6,100,000 | ||||||
Maximum | |||||||
Mortgage loans | |||||||
Loan-to-value ratio with participating interest (as a percent) (up to) | 85.00% | ||||||
Commercial mortgage loans | |||||||
Mortgage loans | |||||||
Mortgage loans having participation feature | $ 669,300,000 | $ 595,200,000 | |||||
Income recognized on participating mortgage loans | $ 29,800,000 | $ 37,200,000 | $ 16,700,000 | ||||
Nonperforming mortgage loans, foreclosed properties and restructured loans pursuant to pooling and servicing agreements | 6,500,000 | 1,500,000 | $ 4,700,000 | ||||
Assets accepted or agreed to be accepted on mortgage loans accounted for as troubled debt restructurings | 15,800,000 | ||||||
Principal amount of loans accounted for as troubled debt restructurings satisfied by acceptance of assets | 21,100,000 | ||||||
Assets accepted or agreed to be accepted on mortgage loans accounted for as troubled debt restructurings, amount related foreclosures | 3,700,000 | ||||||
Number of loan categories | loan_category | 2 | ||||||
Loans not subject to a pooling and servicing agreement which are either nonperforming or restructured | $ 6,500,000 | ||||||
Loans subject to a pooling and servicing agreement which are either nonperforming or restructured | loan | 0 | ||||||
Allowance for credit losses | 0 | $ 724,000 | 0 | $ 0 | $ 724,000 | $ 0 | |
Change in the allowance for credit losses | |||||||
Beginning balance | 724,000 | 0 | |||||
Charge offs | (6,708,000) | (4,682,000) | |||||
Recoveries | (731,000) | 0 | |||||
Provision | 6,715,000 | 5,406,000 | |||||
Ending balance | $ 0 | $ 0 | $ 724,000 | ||||
Predecessor | Commercial mortgage loans | |||||||
Mortgage loans | |||||||
Income recognized on participating mortgage loans | $ 100,000 | ||||||
Assets accepted or agreed to be accepted on mortgage loans accounted for as troubled debt restructurings | 11,300,000 | ||||||
Principal amount of loans accounted for as troubled debt restructurings satisfied by acceptance of assets | $ 13,800,000 |
MORTGAGE LOANS - Delinquent Loa
MORTGAGE LOANS - Delinquent Loans (Details) - Commercial mortgage loans $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Delinquent loans | ||
Past due period at which to cease carrying accrued interest on delinquent loans | 90 days | |
Number of days accrued interest on impaired loans (less than) | 90 days | |
Past due period at which to initiate foreclosure proceedings (more than) | 90 days | |
Delinquent commercial mortgage loans | $ | $ 1,817 | $ 3,669 |
Number of loans, total delinquent | loan | 2 | 4 |
30 - 59 Days Delinquent | ||
Delinquent loans | ||
Delinquent commercial mortgage loans | $ | $ 1,817 | $ 3,669 |
Number of loans, 30 to 59 days delinquent | loan | 2 | 4 |
60 - 89 Days Delinquent | ||
Delinquent loans | ||
Delinquent commercial mortgage loans | $ | $ 0 | $ 0 |
Number of loans, 60 to 89 days delinquent | loan | 0 | 0 |
Greater than 90 Days Delinquent | ||
Delinquent loans | ||
Delinquent commercial mortgage loans | $ | $ 0 | $ 0 |
Number of loans, greater than 90 days delinquent | loan | 0 | 0 |
MORTGAGE LOANS - Impaired Loans
MORTGAGE LOANS - Impaired Loans (Details) - Commercial mortgage loans - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Recorded Investment | ||
With no related allowance recorded, recorded investment | $ 0 | $ 0 |
With an allowance recorded, recorded investment | 0 | 1,819 |
Unpaid Principal Balance | ||
With no related allowance recorded, unpaid principal balance | 0 | 0 |
With an allowance recorded, unpaid principal balance | 0 | 1,819 |
Related Allowance | ||
With an allowance recorded, related allowance | 0 | 724 |
Average Recorded Investment | ||
With no related allowance recorded, average recorded investment | 0 | 0 |
With an allowance recorded, average recorded investment | 0 | 1,819 |
Interest Income Recognized | ||
With no related allowance recorded, interest income recognized | 0 | 0 |
With an allowance recorded, interest income recognized | 0 | 96 |
Cash Basis Interest Income | ||
With no related allowance recorded, cash basis interest income | 0 | 0 |
With an allowance recorded, cash basis interest income | $ 0 | $ 96 |
MORTGAGE LOANS - Troubled Debt
MORTGAGE LOANS - Troubled Debt Restructuring (Details) - Commercial mortgage loans $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)contract | |
Troubled debt restructuring: | |
Number of Contracts | contract | 1 |
Pre-Modification Outstanding Recorded Investment | $ 418 |
Post-Modification Outstanding Recorded Investment | $ 418 |
DEFERRED POLICY ACQUISITION 100
DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Balances and changes in DAC | ||
Balance, beginning of period | $ 572,328 | $ 288,611 |
Capitalization of commissions, sales, and issue expenses | 333,250 | 327,938 |
Amortization | (52,559) | (48,286) |
Change due to unrealized investment gains and losses | (15,234) | 4,065 |
Balance, end of period | 837,785 | 572,328 |
Balances and changes in VOBA | ||
Balance, beginning of period | 1,447,501 | 1,270,197 |
Acquisitions | 0 | 285,092 |
Amortization | (25,662) | (100,778) |
Change due to unrealized investment gains and losses | (60,047) | (7,010) |
Balance, end of period | 1,361,792 | $ 1,447,501 |
Expected amortization of VOBA for the next five years | ||
2,018 | 122,802 | |
2,019 | 118,196 | |
2,020 | 103,120 | |
2,021 | 90,544 | |
2,022 | $ 83,333 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 01, 2016 | |
GOODWILL | |||
Goodwill | $ 793,470 | $ 793,470 | |
USWC | |||
GOODWILL | |||
Goodwill | $ 61,027 | ||
USWC | Asset Protection | |||
GOODWILL | |||
Increase in goodwill | $ 61,000 |
CERTAIN NONTRADITIONAL LONG-102
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS - Activity During Period (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |||
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Separate account balances | $ 13,956,071 | $ 13,244,252 | ||||
Annuity account | CALIC | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Average attained age of contract holders | 67 years | |||||
Percentage of variable annuity business reinsured | 100.00% | |||||
Annuity account | Acquisitions | CALIC | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Guaranteed amount payable | 8,400 | |||||
Guaranteed minimum death benefits (GMDB) | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Separate account balances | $ 9,700,000 | |||||
Guaranteed minimum death benefits (GMDB) | Annuity account | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Interest rate at which last anniversary date account value is compounded (as a percent) | 5.00% | |||||
Separate account balances | $ 13,100,000 | |||||
Mean investment performance (as a percent) | 7.01% | |||||
Average discount rate (as a percent) | 4.90% | |||||
Guaranteed amount payable | $ 90,500 | |||||
Guaranteed amount payable with GMDB reserve | $ 29,010 | $ 36,427 | $ 34,796 | $ 36,427 | 34,030 | $ 34,796 |
Average attained age of contract holders | 73 years | |||||
Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | ||||||
Balance at the beginning of the period | 29,010 | $ 34,796 | 36,427 | |||
Incurred guarantee benefits | 10,175 | 849 | 678 | |||
Less: Paid guarantee benefits | 2,758 | 1,615 | 2,309 | |||
Balance at the end of the period | 29,010 | 36,427 | 34,030 | $ 34,796 | ||
Guaranteed minimum death benefits (GMDB) | Annuity account | Annuities | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Guaranteed amount payable | 72,800 | |||||
Guaranteed amount payable with GMDB reserve | 30,900 | 30,900 | ||||
Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | ||||||
Balance at the end of the period | 30,900 | |||||
Guaranteed minimum death benefits (GMDB) | Annuity account | Acquisitions | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Guaranteed amount payable | 17,700 | |||||
Guaranteed amount payable with GMDB reserve | 3,100 | $ 3,100 | ||||
Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | ||||||
Balance at the end of the period | $ 3,100 | |||||
Predecessor | Guaranteed minimum death benefits (GMDB) | Annuity account | ||||||
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS | ||||||
Guaranteed amount payable with GMDB reserve | 26,251 | 28,875 | ||||
Activity relating to GMDB reserves (excluding those 100% reinsured under the Modco agreement) | ||||||
Balance at the beginning of the period | 26,251 | $ 28,875 | ||||
Incurred guarantee benefits | 3,073 | |||||
Less: Paid guarantee benefits | 449 | |||||
Balance at the end of the period | $ 28,875 |
CERTAIN NONTRADITIONAL LONG-103
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS - Account Balances and Deferred Sales Inducement Asset (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Activity in the Company's deferred sales inducement asset | ||||
Deferred asset, beginning of period | $ 0 | $ 22,497 | $ 11,756 | |
Amounts deferred | 14,557 | 14,246 | 16,212 | |
Amortization | (2,801) | (5,787) | (5,471) | |
Deferred asset, end of period | $ 0 | 11,756 | 30,956 | 22,497 |
Annuity account | ||||
Certain Nontraditional Long-duration Contracts | ||||
Account balances of variable annuities with guarantees invested in variable annuity separate accounts | 13,804,510 | 13,157,068 | ||
Equity mutual funds | Annuity account | ||||
Certain Nontraditional Long-duration Contracts | ||||
Account balances of variable annuities with guarantees invested in variable annuity separate accounts | 8,798,847 | 8,071,204 | ||
Fixed income mutual funds | Annuity account | ||||
Certain Nontraditional Long-duration Contracts | ||||
Account balances of variable annuities with guarantees invested in variable annuity separate accounts | $ 5,005,663 | $ 5,085,864 | ||
Predecessor | ||||
Activity in the Company's deferred sales inducement asset | ||||
Deferred asset, beginning of period | 155,150 | $ 154,093 | ||
Amounts deferred | 82 | |||
Amortization | (1,139) | |||
Deferred asset, end of period | $ 154,093 |
REINSURANCE - Additional Inform
REINSURANCE - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2017insurer | Dec. 31, 2016USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2005USD ($) | |
REINSURANCE | ||||
Percentage of the face value of life insurance in-force reinsured | 38.00% | |||
Single insured life | ||||
REINSURANCE | ||||
Amount of insurance retained before revision - certain newly issued traditional life products | $ 500,000 | |||
Amount of insurance retained - certain newly issued traditional life products | $ 2,000,000 | $ 1,000,000 | ||
Amount of insurance retained - certain traditional and universal life products | $ 5,000,000 | |||
Reinsurer Concentration Risk | ||||
REINSURANCE | ||||
Percentage of the face value of life insurance in-force reinsured | 16.00% | |||
Life insurance in-force reinsured, concentrated number of reinsurers | insurer | 3 |
REINSURANCE - Life Insurance In
REINSURANCE - Life Insurance In-Force and Effect of Reinsurance on Premiums Written and Earned (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Life insurance in-force | ||||
Direct life insurance in-force | $ 0 | $ 727,705,256 | $ 751,512,468 | $ 739,248,680 |
Amounts assumed from other companies | 0 | 39,546,742 | 110,205,190 | 116,265,430 |
Amounts ceded to other companies | 0 | (368,142,294) | (328,377,398) | (348,994,650) |
Net life insurance in-force | $ 0 | $ 399,109,704 | $ 533,340,260 | $ 506,519,460 |
Percentage of amount assumed to net | 0.00% | 9.90% | 21.00% | 23.00% |
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | $ 2,674,614 | $ 3,017,685 | $ 2,929,767 | |
Ceded to Other Companies | (1,154,978) | (1,360,735) | (1,314,716) | |
Assumed from Other Companies | 333,436 | 459,734 | 478,164 | |
Net Amount | 1,853,072 | 2,116,684 | 2,093,215 | |
Reinsurance receivables | 5,100,000 | 5,300,000 | ||
Ceded benefits which are recoverable from reinsurers | 96,600 | 87,900 | ||
Receivables related to insurance assumed | 65,100 | 64,500 | ||
Life insurance | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 2,360,643 | 2,655,846 | 2,610,682 | |
Ceded to Other Companies | (983,143) | (1,151,175) | (1,126,915) | |
Assumed from Other Companies | 308,280 | 435,113 | 454,999 | |
Net Amount | 1,685,780 | 1,939,784 | 1,938,766 | |
Annuity policy fees | $ 13,900 | 152,800 | 173,500 | 160,400 |
Accident/health insurance | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 70,243 | 51,991 | 58,076 | |
Ceded to Other Companies | (36,871) | (33,051) | (36,935) | |
Assumed from Other Companies | 18,252 | 14,945 | 17,439 | |
Net Amount | 51,624 | 33,885 | 38,580 | |
Property and liability insurance | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 243,728 | 309,848 | 261,009 | |
Ceded to Other Companies | (134,964) | (176,509) | (150,866) | |
Assumed from Other Companies | 6,904 | 9,676 | 5,726 | |
Net Amount | $ 115,668 | $ 143,015 | 115,869 | |
Predecessor | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 230,790 | |||
Ceded to Other Companies | (89,956) | |||
Assumed from Other Companies | 31,076 | |||
Net Amount | 171,910 | |||
Predecessor | Life insurance | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 204,185 | |||
Ceded to Other Companies | (74,539) | |||
Assumed from Other Companies | 28,601 | |||
Net Amount | 158,247 | |||
Annuity policy fees | 13,900 | $ 160,400 | ||
Predecessor | Accident/health insurance | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 6,846 | |||
Ceded to Other Companies | (4,621) | |||
Assumed from Other Companies | 1,809 | |||
Net Amount | 4,034 | |||
Predecessor | Property and liability insurance | ||||
Effect of reinsurance on premiums written and earned | ||||
Gross Amount | 19,759 | |||
Ceded to Other Companies | (10,796) | |||
Assumed from Other Companies | 666 | |||
Net Amount | $ 9,629 |
REINSURANCE - Receivables (Deta
REINSURANCE - Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Reinsurance | ||
Reinsurance receivables | $ 5,075,698 | $ 5,323,846 |
Reinsurer Concentration Risk | Security Life of Denver Insurance Company | A | ||
Reinsurance | ||
Reinsurance receivables | 740,800 | 762,200 |
Reinsurer Concentration Risk | Swiss Re Life & Health America, Inc. | A plus | ||
Reinsurance | ||
Reinsurance receivables | 614,800 | 682,600 |
Reinsurer Concentration Risk | Lincoln National Life Insurance Co. | A plus | ||
Reinsurance | ||
Reinsurance receivables | 489,100 | 530,900 |
Reinsurer Concentration Risk | Transamerica Life Insurance Co. | A plus | ||
Reinsurance | ||
Reinsurance receivables | 335,600 | 367,800 |
Reinsurer Concentration Risk | SCOR Global Life | A | ||
Reinsurance | ||
Reinsurance receivables | 331,800 | 354,800 |
Reinsurer Concentration Risk | RGA Reinsurance Company | A plus | ||
Reinsurance | ||
Reinsurance receivables | 278,300 | 269,000 |
Reinsurer Concentration Risk | American United Life Insurance Company | A plus | ||
Reinsurance | ||
Reinsurance receivables | 266,700 | 285,600 |
Reinsurer Concentration Risk | Scottish Re (U.S.) Inc. | ||
Reinsurance | ||
Reinsurance receivables | 249,500 | 232,800 |
Reinsurer Concentration Risk | Centre Reinsurance (Bermuda) Ltd | ||
Reinsurance | ||
Reinsurance receivables | 212,200 | 243,600 |
Reinsurer Concentration Risk | Employers Reassurance Corporation | A plus | ||
Reinsurance | ||
Reinsurance receivables | $ 193,900 | $ 201,700 |
DEBT AND OTHER OBLIGATIONS - Su
DEBT AND OTHER OBLIGATIONS - Summary of Debt and Subordinated Debt Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 784,610 | $ 966,926 |
Total debt | 945,052 | 1,163,285 |
Subordinated debt securities | 495,289 | 441,202 |
6.40% Senior Notes (2007), due 2018 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 150,000 | 150,000 |
Total debt | $ 150,518 | 156,663 |
Stated interest rate (as a percent) | 6.40% | |
7.375% Senior Notes (2009), due 2019 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 400,000 | 400,000 |
Total debt | $ 435,806 | 454,688 |
Stated interest rate (as a percent) | 7.375% | |
8.45% Senior Notes (2009), due 2039 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 232,928 | 246,926 |
Total debt | $ 357,046 | $ 381,934 |
Stated interest rate (as a percent) | 8.45% | 8.45% |
6.25% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Debt Instrument [Line Items] | ||
Subordinated debt securities | $ 0 | $ 290,002 |
Stated interest rate (as a percent) | 6.25% | |
6.00% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Debt Instrument [Line Items] | ||
Subordinated debt securities | $ 0 | 151,200 |
Stated interest rate (as a percent) | 6.00% | |
5.35% Subordinated Debentures (2017), due 2052 | ||
Debt Instrument [Line Items] | ||
Subordinated debt securities | $ 495,289 | 0 |
Stated interest rate (as a percent) | 5.35% | |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 0 | 170,000 |
Total debt | 0 | 170,000 |
Capital lease obligation | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 1,682 | 0 |
Total debt | 1,682 | 0 |
Subordinated debentures | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 500,000 | 437,500 |
Subordinated debentures | 6.25% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 0 | 287,500 |
Subordinated debentures | 6.00% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 0 | 150,000 |
Subordinated debentures | 5.35% Subordinated Debentures (2017), due 2052 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 500,000 | $ 0 |
DEBT AND OTHER OBLIGATIONS - De
DEBT AND OTHER OBLIGATIONS - Debt and Subordinated Debt Securities Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Debt maturities due in 2018 | $ 150,500,000 | |
Debt maturities due in 2019 | 435,800,000 | |
Debt maturities due thereafter | 357,000,000 | |
Total debt | 945,052,000 | $ 1,163,285,000 |
Credit Facility | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Total debt | $ 0 | 170,000,000 |
6.40% Senior Notes (2007), due 2018 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Stated interest rate (as a percent) | 6.40% | |
Total debt | $ 150,518,000 | 156,663,000 |
7.375% Senior Notes (2009), due 2019 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Stated interest rate (as a percent) | 7.375% | |
Total debt | $ 435,806,000 | 454,688,000 |
8.45% Senior Notes (2009), due 2039 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Redemption of subordinated debt | 21,600,000 | |
Par value of extinguished debt | $ 14,000,000 | $ 53,100,000 |
Stated interest rate (as a percent) | 8.45% | 8.45% |
Pre-tax gain on extinguishment | $ 2,000,000 | $ 9,800,000 |
Total debt | $ 357,046,000 | 381,934,000 |
5.35% Subordinated Debentures (2017), due 2052 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Stated interest rate (as a percent) | 5.35% | |
5.35% Subordinated Debentures (2017), due 2052 | Subordinated debentures | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Debt issuance costs | $ 4,800,000 | |
Amount of debt issued | $ 500,000,000 | |
6.125% Subordinated Debentures (2004), due 2034, callable 2009 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Repayment of debt | 82,700,000 | |
6.00% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Stated interest rate (as a percent) | 6.00% | |
6.00% Subordinated Debentures (2012), due 2042, callable 2017 | Subordinated debentures | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Repayment of debt | 150,000,000 | |
6.25% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Stated interest rate (as a percent) | 6.25% | |
6.25% Subordinated Debentures (2012), due 2042, callable 2017 | Subordinated debentures | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Repayment of debt | $ 287,500,000 | |
Credit Facility | Federal Funds Rate | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Interest rate added to the base rate (as a percent) | 0.50% | |
Credit Facility | LIBOR One-Month Rate | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Interest rate added to the base rate (as a percent) | 1.00% | |
2015 Credit Facility | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Line of credit, maximum borrowing capacity | $ 1,000,000,000 | |
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,250,000,000 | |
Facility fee percentage | 0.125% | |
2015 Credit Facility | Prime Rate | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Base of floating rate interest rate payments | prime rate | |
2015 Credit Facility | LIBOR One-Month Rate | ||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | ||
Base of floating rate interest rate payments | one-month LIBOR |
DEBT AND OTHER OBLIGATIONS DEBT
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS - Summary of Debt Covenant Calculations (Details) | Dec. 31, 2017USD ($) |
Minimum | |
Debt Instrument [Line Items] | |
Consolidated net worth margin, requirement | $ 0 |
Consolidated net worth margin, actual results | $ 1,000,000,000 |
Maximum | |
Debt Instrument [Line Items] | |
Debt to total capital ratio, requirement | 40.00% |
Debt to total capital ratio, actual results | 22.00% |
DEBT AND OTHER OBLIGATIONS - No
DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations (Details) - USD ($) | Jan. 15, 2016 | Oct. 10, 2012 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
Non-recourse funding obligations | $ 2,747,477,000 | $ 2,796,474,000 | |||
Non-recourse funding obligations held by affiliates | 516,400,000 | ||||
Issuance (repayment) of non-recourse funding obligations | $ 65,000,000 | (47,000,000) | 2,094,700,000 | ||
Amount collateralized | 1,017,749,000 | 797,721,000 | |||
Outstanding nonrecourse funding obligations repurchased at discount | 0 | 86,300,000 | |||
Financing Agreement With Golden Gate And Syndicate ff Risk Takers | |||||
Debt Instrument [Line Items] | |||||
Term of financing agreement | 18 years | ||||
Financing capacity under the agreement | $ 2,188,000,000 | ||||
Golden Gate V and Red Mountain | |||||
Debt Instrument [Line Items] | |||||
Term of transaction | 20 years | ||||
Maximum financing capacity under transaction | $ 945,000,000 | ||||
Golden Gate | Non-recourse Funding Obligations Series | |||||
Debt Instrument [Line Items] | |||||
Outstanding non-recourse funding obligations | 800,000,000 | ||||
Golden Gate Captive Insurance Company | |||||
Debt Instrument [Line Items] | |||||
Non-recourse funding obligations | $ 2,014,000,000 | $ 2,116,000,000 | |||
Fixed annual rate | 4.75% | 4.75% | |||
Golden Gate II | |||||
Debt Instrument [Line Items] | |||||
Non-recourse funding obligations | $ 49,787,000 | $ 49,983,000 | |||
Fixed annual rate | 3.88% | 2.52% | |||
Outstanding non-recourse funding obligations | $ 575,000,000 | ||||
Non-recourse funding obligations held by external parties | 58,600,000 | ||||
Issuance (repayment) of non-recourse funding obligations | 0 | ||||
Amount collateralized | 2,800,000 | ||||
Red Mountain | |||||
Debt Instrument [Line Items] | |||||
Issuance (repayment) of non-recourse funding obligations | 0 | ||||
Principal amount of note issued | $ 275,000,000 | 620,000,000 | |||
Golden Gate V | |||||
Debt Instrument [Line Items] | |||||
Non-recourse funding obligations | $ 681,285,000 | $ 628,025,000 | |||
Fixed annual rate | 5.12% | 5.12% | |||
Stated interest rate (as a percent) | 6.25% | ||||
Maximum financing capacity under transaction | $ 945,000,000 | ||||
Principal amount of note issued | 620,000,000 | ||||
Future scheduled capital contributions | 121,800,000 | ||||
Surplus Notes | Golden Gate | Steel City Notes | |||||
Debt Instrument [Line Items] | |||||
Amount of debt issued | 2,188,000,000 | $ 2,014,000,000 | |||
Surplus Notes | Steel City | Golden Gate Surplus Notes | |||||
Debt Instrument [Line Items] | |||||
Amount of debt issued | $ 2,188,000,000 |
DEBT AND OTHER OBLIGATIONS -111
DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 2,693,691 | $ 2,740,691 |
Carrying Value | 2,747,477 | 2,796,474 |
Golden Gate Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 2,014,000 | 2,116,000 |
Carrying Value | $ 2,014,000 | $ 2,116,000 |
Year-to-Date Weighted-Avg Interest Rate | 4.75% | 4.75% |
Golden Gate II | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 58,600 | $ 58,600 |
Carrying Value | $ 49,787 | $ 49,983 |
Year-to-Date Weighted-Avg Interest Rate | 3.88% | 2.52% |
Golden Gate V | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 620,000 | $ 565,000 |
Carrying Value | $ 681,285 | $ 628,025 |
Year-to-Date Weighted-Avg Interest Rate | 5.12% | 5.12% |
MONY | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 1,091 | $ 1,091 |
Carrying Value | $ 2,405 | $ 2,466 |
Year-to-Date Weighted-Avg Interest Rate | 6.19% | 6.19% |
DEBT AND OTHER OBLIGATIONS - Le
DEBT AND OTHER OBLIGATIONS - Letters of Credit, Repurchase Program Borrowings and Interest Expense (Details) | 11 Months Ended | 12 Months Ended | |||
Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)installment | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | Dec. 10, 2010USD ($) | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 58,600,000 | $ 61,300,000 | $ 62,100,000 | ||
Secured borrowings, percent of initial collateral required | 102.00% | ||||
Securities lending transactions | $ 125,271,000 | $ 125,300,000 | |||
Securities loaned, fair value of collateral | $ 132,700,000 | ||||
Repurchase Program Borrowings | |||||
Debt Instrument [Line Items] | |||||
Repurchase Average Daily Balance At Average Interest Rate | 1.42% | ||||
Fair value of securities pledged under the repurchase program | $ 1,006,600,000 | ||||
Secured financing liabilities | $ 885,000,000 | ||||
Average borrowing rate (as a percent) | 1.01% | 0.44% | |||
Maximum balance outstanding | $ 988,500,000 | $ 1,065,800,000 | |||
Average daily balance | 624,700,000 | 505,400,000 | |||
Golden Gate III | Letter of Credit | Reimbursement Agreement | |||||
Debt Instrument [Line Items] | |||||
Repayment of debt | 0 | ||||
Golden Gate III | Letter of Credit | Third Amended and Restated Reimbursement Agreement | |||||
Debt Instrument [Line Items] | |||||
Maximum amount up to which LOC will be periodically increased | $ 935,000,000 | ||||
Outstanding letters of credit (LOC) | $ 885,000,000 | ||||
Letter of credit term | 15 years | ||||
Future scheduled capital contributions | $ 70,000,000 | ||||
Number of installments in which future scheduled capital contributions payable | installment | 2 | ||||
Golden Gate IV | Letter of Credit | Reimbursement Agreement | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity under letter of credit | $ 270,000,000 | ||||
Maximum amount up to which LOC will be periodically increased | $ 790,000,000 | ||||
Outstanding letters of credit (LOC) | $ 785,000,000 | ||||
Letter of credit term | 12 years | ||||
Repayment of debt | $ 0 | ||||
Maximum | Repurchase Program Borrowings | |||||
Debt Instrument [Line Items] | |||||
Term of debt | 90 days |
DEBT AND OTHER OBLIGATIONS - Re
DEBT AND OTHER OBLIGATIONS - Remaining Contractual Maturity of the Agreements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | $ 1,006,607 | $ 861,732 | |
Securities lending transactions | 125,271 | $ 125,300 | |
Total securities | 1,131,878 | ||
Overnight and Continuous | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 1,006,607 | 837,974 | |
Securities lending transactions | 125,271 | ||
Total securities | 1,131,878 | ||
Up to 30 days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 23,758 | |
Securities lending transactions | 0 | ||
Total securities | 0 | ||
30 - 90 days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 | |
Securities lending transactions | 0 | ||
Total securities | 0 | ||
Greater than 90 Days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 | |
Securities lending transactions | 0 | ||
Total securities | 0 | ||
U.S. Treasury and agency securities | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 307,633 | 381,463 | |
U.S. Treasury and agency securities | Overnight and Continuous | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 307,633 | 357,705 | |
U.S. Treasury and agency securities | Up to 30 days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 23,758 | |
U.S. Treasury and agency securities | 30 - 90 days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 | |
U.S. Treasury and agency securities | Greater than 90 Days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 | |
Mortgage loans | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 698,974 | 480,269 | |
Mortgage loans | Overnight and Continuous | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 698,974 | 480,269 | |
Mortgage loans | Up to 30 days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 | |
Mortgage loans | 30 - 90 days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 | |
Mortgage loans | Greater than 90 Days | |||
Debt Instrument [Line Items] | |||
Repurchase agreements and repurchase-to-maturity transactions | 0 | $ 0 | |
Corporate Debt Securities | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 118,817 | ||
Corporate Debt Securities | Overnight and Continuous | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 118,817 | ||
Corporate Debt Securities | Up to 30 days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Corporate Debt Securities | 30 - 90 days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Corporate Debt Securities | Greater than 90 Days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Equity securities | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 5,699 | ||
Equity securities | Overnight and Continuous | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 5,699 | ||
Equity securities | Up to 30 days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Equity securities | 30 - 90 days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Equity securities | Greater than 90 Days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Redeemable preferred stock | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 755 | ||
Redeemable preferred stock | Overnight and Continuous | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 755 | ||
Redeemable preferred stock | Up to 30 days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Redeemable preferred stock | 30 - 90 days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | 0 | ||
Redeemable preferred stock | Greater than 90 Days | |||
Debt Instrument [Line Items] | |||
Securities lending transactions | $ 0 |
DEBT AND OTHER OBLIGATIONS - Sc
DEBT AND OTHER OBLIGATIONS - Schedule of Interest Expense (Details) - USD ($) $ in Millions | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Debt and subordinated debt securities | $ 58.6 | $ 61.3 | $ 62.1 | |
Non-recourse funding obligations, other obligations, and repurchase agreements | 54.1 | 171.9 | 163.7 | |
Total interest expense | $ 112.7 | $ 233.2 | $ 225.8 | |
Predecessor | ||||
Debt Instrument [Line Items] | ||||
Debt and subordinated debt securities | $ 8.9 | |||
Non-recourse funding obligations, other obligations, and repurchase agreements | 4.9 | |||
Total interest expense | $ 13.8 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Indemnification Agreement (Details) | Dec. 31, 2017USD ($) |
Indemnification Agreement | |
Commitments and contingencies | |
Indemnification agreement with certain officers, maximum (up to) | $ 10,000,000 |
COMMITMENTS AND CONTINGENCIE116
COMMITMENTS AND CONTINGENCIES - Administrative and Marketing Office Space and Building (Details) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Jan. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)city | Dec. 31, 2016USD ($) | Dec. 31, 2013USD ($) | |
Future minimum rental payments required under operating leases | |||||
Outstanding mortgage loan commitments | $ 572,300 | $ 855,300 | |||
Average rate (as a percent) | 4.14% | 4.17% | |||
Administrative and marketing office space | |||||
Operating leased assets | |||||
Number of cities in which the company leases properties | city | 16 | ||||
Rental expense | $ 6,300 | $ 7,800 | $ 6,700 | ||
Aggregate annualized rent | 7,800 | ||||
Future minimum rental payments required under operating leases | |||||
2,018 | 4,562 | ||||
2,019 | 4,320 | ||||
2,020 | 4,044 | ||||
2,021 | 3,778 | ||||
2,022 | 3,520 | ||||
Thereafter | $ 8,945 | ||||
Administrative and marketing office space | Predecessor | |||||
Operating leased assets | |||||
Rental expense | $ 600 | ||||
Administrative and marketing office space | Minimum | |||||
Operating leased assets | |||||
Lease period (in years) | 3 years | ||||
Administrative and marketing office space | Maximum | |||||
Operating leased assets | |||||
Lease period (in years) | 10 years | ||||
Building contiguous to home office | |||||
Future minimum rental payments required under operating leases | |||||
2,018 | $ 77,219 | ||||
Approximate price for which the company may purchase building at the end of lease term | $ 75,000 | ||||
Base rate | LIBOR |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - Summary of Estimated Synthetic Lease Covenant Calculations (Details) | Dec. 31, 2017USD ($) |
Minimum | |
Debt Instrument [Line Items] | |
Consolidated net worth margin, requirement | $ 0 |
Consolidated net worth margin, actual results | 4,000,000,000 |
Total adjusted capital margin, requirement | 0 |
Total adjusted capital margin, actual results | $ 3,000,000,000 |
Interest cash inflow available compared to adjusted consolidated interest expense, requirement | 2 |
Interest cash inflow available compared to adjusted consolidated interest expense, actual results | 9 |
Maximum | |
Debt Instrument [Line Items] | |
Debt to total capital ratio, requirement | 40.00% |
Debt to total capital ratio, actual results | 19.00% |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Benefit Pension Plan and Unfunded Excess Benefit Plan (Details) - Qualified Pension Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Qualified Plan | ||
EMPLOYEE BENEFIT PLANS | ||
Threshold age plus vesting period of active employees to determine type of benefit eligibility | 55 years | |
Settlement income | $ 0.9 | |
Nonqualified Plan | ||
EMPLOYEE BENEFIT PLANS | ||
Settlement expense | $ 2.1 |
EMPLOYEE BENEFIT PLANS - Change
EMPLOYEE BENEFIT PLANS - Change in Projected Benefit Obligation, Fair Value of Plan Assets, Funded Status, and Amounts Not Yet Recognized (Details) - USD ($) $ in Thousands | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Group life insurance plan | |||
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | $ 9,634 | $ 9,063 | |
Service cost | 122 | 102 | |
Interest cost | 354 | 338 | |
Actuarial (gain)/loss | 1,347 | 604 | |
Projected benefit obligation at end of year | $ 9,063 | 10,978 | 9,634 |
Change in plan assets: | |||
Benefits paid | (479) | (473) | |
Qualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Accumulated benefit obligation, end of year | 278,084 | 247,595 | |
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | 265,848 | 268,221 | |
Service cost | 11,220 | 12,011 | 12,791 |
Interest cost | 9,072 | 9,846 | 9,751 |
Amendments | 0 | 0 | |
Actuarial (gain)/loss | 26,539 | 5,988 | |
Benefits paid | (13,821) | (30,903) | |
Projected benefit obligation at end of year | 268,221 | 300,423 | 265,848 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 201,843 | 196,042 | |
Actual return on plan assets | 29,404 | 15,815 | |
Employer contributions | 43,500 | 20,889 | |
Benefits paid | (13,821) | (30,903) | |
Fair value of plan assets at end of year | 196,042 | 260,926 | 201,843 |
After reflecting FASB guidance: | |||
Funded status | (39,497) | (64,005) | |
Amounts recognized in the balance sheet: | |||
Other liabilities | (39,497) | (64,005) | |
Amounts recognized in accumulated other comprehensive income: | |||
Net actuarial (gain)/loss | 2,850 | (7,855) | |
Prior service cost/(credit) | 0 | 0 | |
Total amounts recognized in AOCI | 2,850 | (7,855) | |
Nonqualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Accumulated benefit obligation, end of year | 50,149 | 45,594 | |
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | 47,802 | 56,985 | |
Service cost | 1,229 | 1,350 | 1,413 |
Interest cost | 1,499 | 1,480 | 1,353 |
Amendments | 0 | 0 | |
Actuarial (gain)/loss | 7,861 | 4,124 | |
Benefits paid | (3,903) | (16,073) | |
Projected benefit obligation at end of year | 56,985 | 54,590 | 47,802 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 3,903 | 16,073 | |
Benefits paid | (3,903) | (16,073) | |
Fair value of plan assets at end of year | $ 0 | 0 | 0 |
After reflecting FASB guidance: | |||
Funded status | (54,590) | (47,802) | |
Amounts recognized in the balance sheet: | |||
Other liabilities | (54,590) | (47,802) | |
Amounts recognized in accumulated other comprehensive income: | |||
Net actuarial (gain)/loss | 13,521 | 6,294 | |
Prior service cost/(credit) | 0 | 0 | |
Total amounts recognized in AOCI | $ 13,521 | $ 6,294 |
EMPLOYEE BENEFIT PLANS - Weight
EMPLOYEE BENEFIT PLANS - Weighted-Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit Cost (Details) - Qualified Pension Plan | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Annualized returns obtained period | 25 years | ||
Qualified Plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 3.55% | 4.04% | |
Rate of compensation increase prior to age 40 (as a percent) | 4.75% | 4.75% | |
Rate of compensation increase age 40 and above (as a percent) | 3.75% | 3.75% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 4.04% | 4.29% | 3.95% |
Rate of compensation increase prior to age 40 (as a percent) | 4.75% | 4.75% | 4.75% |
Rate of compensation increase age 40 and above (as a percent) | 3.75% | 3.75% | 3.75% |
Expected long-term return on plan assets (as a percent) | 7.00% | 7.25% | 7.50% |
Nonqualified Plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 3.26% | 3.60% | |
Rate of compensation increase prior to age 40 (as a percent) | 4.75% | 4.75% | |
Rate of compensation increase age 40 and above (as a percent) | 3.75% | 3.75% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 3.60% | 3.63% | 3.65% |
Rate of compensation increase prior to age 40 (as a percent) | 4.75% | 4.75% | 4.75% |
Rate of compensation increase age 40 and above (as a percent) | 3.75% | 3.75% | 3.75% |
EMPLOYEE BENEFIT PLANS - Compon
EMPLOYEE BENEFIT PLANS - Components of Net Periodic Benefit Cost (Details) - Qualified Pension Plan - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Qualified Plan | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost—benefits earned during the period | $ 11,220 | $ 12,011 | $ 12,791 | |
Interest cost on projected benefit obligation | 9,072 | 9,846 | 9,751 | |
Expected return on plan assets | (13,214) | (13,570) | (13,780) | |
Amortization of prior service cost/(credit) | 0 | 0 | 0 | |
Amortization of actuarial loss/(gain) | 0 | 0 | 0 | |
Preliminary net periodic benefit cost | 7,078 | 8,287 | 8,762 | |
Settlement/curtailment expense | 0 | 0 | (964) | |
Total net periodic benefit cost | 7,078 | $ 8,287 | 7,798 | |
Average remaining service period used | 9 years 2 months 27 days | |||
Qualified Plan | Predecessor | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost—benefits earned during the period | $ 974 | |||
Interest cost on projected benefit obligation | 1,002 | |||
Expected return on plan assets | (1,293) | |||
Amortization of prior service cost/(credit) | (33) | |||
Amortization of actuarial loss/(gain) | 668 | |||
Preliminary net periodic benefit cost | 1,318 | |||
Settlement/curtailment expense | 0 | |||
Total net periodic benefit cost | 1,318 | |||
Nonqualified Plan | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost—benefits earned during the period | 1,229 | $ 1,350 | 1,413 | |
Interest cost on projected benefit obligation | 1,499 | 1,480 | 1,353 | |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service cost/(credit) | 0 | 0 | 0 | |
Amortization of actuarial loss/(gain) | 0 | 634 | 178 | |
Preliminary net periodic benefit cost | 2,728 | 3,464 | 2,944 | |
Settlement/curtailment expense | 0 | 0 | 2,135 | |
Total net periodic benefit cost | $ 2,728 | $ 3,464 | $ 5,079 | |
Average remaining service period used | 8 years 2 months 23 days | |||
Nonqualified Plan | Predecessor | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost—benefits earned during the period | 95 | |||
Interest cost on projected benefit obligation | 140 | |||
Expected return on plan assets | 0 | |||
Amortization of prior service cost/(credit) | 1 | |||
Amortization of actuarial loss/(gain) | 138 | |||
Preliminary net periodic benefit cost | 374 | |||
Settlement/curtailment expense | 0 | |||
Total net periodic benefit cost | $ 374 |
EMPLOYEE BENEFIT PLANS - Estima
EMPLOYEE BENEFIT PLANS - Estimated Future Benefit Payments Under the Defined Benefit Pension Plan and Unfunded Excess Benefit Plan (Details) - Qualified Pension Plan $ in Thousands | Dec. 31, 2017USD ($) |
Qualified Plan | |
Estimated future benefit payments under defined benefit pension plan | |
2,018 | $ 19,479 |
2,019 | 20,719 |
2,020 | 21,062 |
2,021 | 21,351 |
2,022 | 23,537 |
2023 - 2027 | 116,400 |
Nonqualified Plan | |
Estimated future benefit payments under defined benefit pension plan | |
2,018 | 3,542 |
2,019 | 7,242 |
2,020 | 6,087 |
2,021 | 5,709 |
2,022 | 6,267 |
2023 - 2027 | $ 23,324 |
EMPLOYEE BENEFIT PLANS - Alloca
EMPLOYEE BENEFIT PLANS - Allocation of Plan Assets of the Defined Benefit Pension Plan By Category (Details) - Qualified Plan - Qualified Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Target Allocation for 2018 | ||
Target allocation (as a percent) | 100.00% | |
Allocation of plan assets of defined benefit pension plan by category | ||
Total (as a percent) | 100.00% | 100.00% |
Employer contributions | $ 43,500 | $ 20,889 |
Cash and cash equivalents | ||
Target Allocation for 2018 | ||
Target allocation (as a percent) | 2.00% | |
Allocation of plan assets of defined benefit pension plan by category | ||
Total (as a percent) | 15.00% | 2.00% |
Equity securities | ||
Target Allocation for 2018 | ||
Target allocation (as a percent) | 60.00% | |
Allocation of plan assets of defined benefit pension plan by category | ||
Total (as a percent) | 55.00% | 61.00% |
Fixed income | ||
Target Allocation for 2018 | ||
Target allocation (as a percent) | 38.00% | |
Allocation of plan assets of defined benefit pension plan by category | ||
Total (as a percent) | 30.00% | 37.00% |
EMPLOYEE BENEFIT PLANS - Plan A
EMPLOYEE BENEFIT PLANS - Plan Assets of the Defined Benefit Pension Plan By Category (Details) - Qualified Plan - Qualified Pension Plan - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
EMPLOYEE BENEFIT PLANS | |||
Total investments | $ 260,926 | $ 201,843 | $ 196,042 |
Employer contribution receivable | 0 | 0 | |
Total | 260,926 | 201,843 | |
Cash and cash equivalents | |||
EMPLOYEE BENEFIT PLANS | |||
Total investments | 39,897 | 4,175 | |
Equity securities: Collective Russell 3000 index fund | |||
EMPLOYEE BENEFIT PLANS | |||
Total investments | 74,511 | 67,627 | |
Equity securities: Fidelity Spartan 500 index fund | |||
EMPLOYEE BENEFIT PLANS | |||
Total investments | 71,632 | 58,815 | |
Fixed income | |||
EMPLOYEE BENEFIT PLANS | |||
Total investments | $ 74,886 | $ 71,226 |
EMPLOYEE BENEFIT PLANS - Pla125
EMPLOYEE BENEFIT PLANS - Plan Assets at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Group life insurance plan | Money Market Funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | $ 5,362 | $ 5,362 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 5,362 | |
Fair value of plan assets at end of year | 5,104 | 5,362 |
Group life insurance plan | Level 1 | Money Market Funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 5,362 | 5,362 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 5,362 | |
Fair value of plan assets at end of year | 5,104 | 5,362 |
Group life insurance plan | Level 2 | Money Market Funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Group life insurance plan | Level 3 | Money Market Funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Qualified Plan | Qualified Pension Plan | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 201,843 | 196,042 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 201,843 | 196,042 |
Fair value of plan assets at end of year | 260,926 | 201,843 |
Qualified Plan | Qualified Pension Plan | Collective short-term investment fund | ||
Fair value hierarchy of Plan's assets | ||
Total investments | $ 4,175 | $ 4,175 |
Redemption Notice Period | 1 day | 1 day |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | $ 4,175 | |
Fair value of plan assets at end of year | 39,897 | $ 4,175 |
Qualified Plan | Qualified Pension Plan | Equity index funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 126,442 | 126,442 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 126,442 | |
Fair value of plan assets at end of year | 146,143 | 126,442 |
Qualified Plan | Qualified Pension Plan | Group deposit administration annuity contract | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 71,226 | 71,226 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 71,226 | |
Fair value of plan assets at end of year | 74,886 | 71,226 |
Qualified Plan | Qualified Pension Plan | Equity securities: Collective Russell 3000 index fund | ||
Fair value hierarchy of Plan's assets | ||
Total investments | $ 67,627 | $ 67,627 |
Redemption Notice Period | 1 day | 1 day |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | $ 67,627 | |
Fair value of plan assets at end of year | 74,511 | $ 67,627 |
Qualified Plan | Qualified Pension Plan | Equity securities: Fidelity Spartan 500 index fund | ||
Fair value hierarchy of Plan's assets | ||
Total investments | $ 58,815 | $ 58,815 |
Redemption Notice Period | 1 day | 1 day |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | $ 58,815 | |
Fair value of plan assets at end of year | 71,632 | $ 58,815 |
Qualified Plan | Qualified Pension Plan | Level 1 | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 62,990 | 62,990 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 62,990 | |
Fair value of plan assets at end of year | 111,529 | 62,990 |
Qualified Plan | Qualified Pension Plan | Level 1 | Collective short-term investment fund | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 4,175 | 4,175 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 4,175 | |
Fair value of plan assets at end of year | 39,897 | 4,175 |
Qualified Plan | Qualified Pension Plan | Level 1 | Equity index funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 58,815 | 58,815 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 58,815 | |
Fair value of plan assets at end of year | 71,632 | 58,815 |
Qualified Plan | Qualified Pension Plan | Level 1 | Group deposit administration annuity contract | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Qualified Plan | Qualified Pension Plan | Level 2 | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 67,627 | 67,627 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 67,627 | |
Fair value of plan assets at end of year | 74,511 | 67,627 |
Qualified Plan | Qualified Pension Plan | Level 2 | Collective short-term investment fund | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Qualified Plan | Qualified Pension Plan | Level 2 | Equity index funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 67,627 | 67,627 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 67,627 | |
Fair value of plan assets at end of year | 74,511 | 67,627 |
Qualified Plan | Qualified Pension Plan | Level 2 | Group deposit administration annuity contract | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Qualified Plan | Qualified Pension Plan | Level 3 | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 71,226 | 67,707 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 71,226 | 67,707 |
Interest income | 3,660 | 3,519 |
Transfers from collective short-term investments fund | 0 | 0 |
Transfers to collective short-term investments fund | 0 | 0 |
Fair value of plan assets at end of year | 74,886 | 71,226 |
Qualified Plan | Qualified Pension Plan | Level 3 | Collective short-term investment fund | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Qualified Plan | Qualified Pension Plan | Level 3 | Equity index funds | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 0 | 0 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 0 | |
Fair value of plan assets at end of year | 0 | 0 |
Qualified Plan | Qualified Pension Plan | Level 3 | Group deposit administration annuity contract | ||
Fair value hierarchy of Plan's assets | ||
Total investments | 71,226 | 71,226 |
Reconciliation of beginning and ending balances for fair value measurements for which significant unobservable inputs (level 3) are used | ||
Fair value of plan assets at beginning of year | 71,226 | |
Fair value of plan assets at end of year | $ 74,886 | $ 71,226 |
EMPLOYEE BENEFIT PLANS - Level
EMPLOYEE BENEFIT PLANS - Level 3 Financial Instrument (Details) - Qualified Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Level 3 | Group deposit administration annuity contract | Contract Value | Minimum | |||
Employee benefit plans | |||
Contract rate (as a percent) | 5.10% | ||
Level 3 | Group deposit administration annuity contract | Contract Value | Maximum | |||
Employee benefit plans | |||
Contract rate (as a percent) | 5.19% | ||
Qualified Pension Plan | |||
Employee benefit plans | |||
Fair Value | $ 260,926 | $ 201,843 | $ 196,042 |
Qualified Pension Plan | Level 3 | |||
Employee benefit plans | |||
Fair Value | 74,886 | 71,226 | $ 67,707 |
Group deposit administration annuity contract | Qualified Pension Plan | |||
Employee benefit plans | |||
Fair Value | 74,886 | 71,226 | |
Group deposit administration annuity contract | Qualified Pension Plan | Level 3 | |||
Employee benefit plans | |||
Fair Value | $ 74,886 | $ 71,226 |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
EMPLOYEE BENEFIT PLANS | |||
Period for which the average and annualized return on Barclay's short treasury index is considered for assessment of reasonableness of long term rate of return assumption | 25 years | ||
Other Postretirement Benefits | Maximum | |||
EMPLOYEE BENEFIT PLANS | |||
Age of eligibility for limited healthcare benefits | 65 years | ||
Retiree medical plan | Minimum | |||
EMPLOYEE BENEFIT PLANS | |||
Age of eligibility for prescription drug benefit | 65 years | ||
Group life insurance plan | |||
EMPLOYEE BENEFIT PLANS | |||
Face amount of life insurance benefits funded | $ 50,000 | ||
Discount rate (as a percent) | 3.74% | ||
Discount rate (as a percent) | 4.35% | ||
Expected long-term return on plan assets (as a percent) | 2.75% | ||
Group life insurance plan | Minimum | |||
EMPLOYEE BENEFIT PLANS | |||
Life insurance benefits | $ 10,000 | ||
Group life insurance plan | Maximum | |||
EMPLOYEE BENEFIT PLANS | |||
Life insurance benefits | 75,000 | ||
Nonqualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Amortized loss from other comprehensive income into net periodic benefit | 1,000,000 | ||
Employer contributions | $ 3,903,000 | $ 16,073,000 | |
Discount rate (as a percent) | 3.26% | 3.60% | |
Discount rate (as a percent) | 3.60% | 3.63% | 3.65% |
Accumulated benefit obligation, end of year | $ 50,149,000 | $ 45,594,000 | |
Qualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Employer contributions | $ 43,500,000 | $ 20,889,000 | |
Target allocation (as a percent) | 100.00% | ||
Adjusted funding target percentage subject to benefit restrictions, maximum | 80.00% | ||
Adjusted funding target percentage to be maintained (at least) | 80.00% | ||
Contribution made by the company to its defined benefit pension plan year 2016 | $ 43,500,000 | ||
Discount rate (as a percent) | 3.55% | 4.04% | |
Discount rate (as a percent) | 4.04% | 4.29% | 3.95% |
Expected long-term return on plan assets (as a percent) | 7.00% | 7.25% | 7.50% |
Accumulated benefit obligation, end of year | $ 278,084,000 | $ 247,595,000 | |
Qualified Plan | Qualified Pension Plan | Minimum | |||
EMPLOYEE BENEFIT PLANS | |||
Estimated contribution by employer | 10,000,000 | ||
Qualified Plan | Qualified Pension Plan | Maximum | |||
EMPLOYEE BENEFIT PLANS | |||
Estimated contribution by employer | $ 20,000,000 | ||
Equity securities | Qualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Target allocation (as a percent) | 60.00% | ||
Fixed maturities | Qualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Target allocation (as a percent) | 38.00% | ||
Cash and cash equivalents | Qualified Plan | Qualified Pension Plan | |||
EMPLOYEE BENEFIT PLANS | |||
Target allocation (as a percent) | 2.00% |
EMPLOYEE BENEFIT PLANS - 401(k)
EMPLOYEE BENEFIT PLANS - 401(k) Plan (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 01, 2015 | |
401 (k) Plan | ||||
Employee contribution, maximum percentage of eligible annual compensation (up to) | 25.00% | |||
Maximum annual contribution by employee | $ 18,000 | |||
Minimum age required to be eligible to make catch-up contribution | 50 years | |||
Maximum additional contribution over and above regular annual contribution limits | $ 6,000 | |||
Maximum employer matching contribution (as a percent) | 4.00% | |||
Expenses recorded due to adopting a cash match for employee contributions to the 401(k) plan | $ 8,200,000 | $ 7,500,000 | ||
Amount of expenses recorded under a plan that provides supplemental matching contributions in excess of limits imposed | $ 1,100,000 | $ 600,000 | $ 500,000 | |
Deferred Compensation Plan | ||||
Per share merger consideration (in dollars per share) | $ 70 |
ACCUMULATED OTHER COMPREHENS129
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | $ 5,554,059 | $ 5,471,521 | $ 4,581,224 | ||
Cumulative effect adjustments | 0 | ||||
Balance | $ 5,554,059 | 4,581,224 | 7,127,199 | 5,471,521 | |
Unrealized gains and losses on available-for-sale securities | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 0 | (656,322) | (1,247,065) | ||
Other comprehensive income (loss) before reclassifications | (1,264,034) | 700,536 | 606,985 | ||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (393) | 7,153 | (6,782) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 17,362 | 642 | (9,460) | ||
Net current-period other comprehensive income (loss) | (1,247,065) | 708,331 | 590,743 | ||
Cumulative effect adjustments | (26,135) | ||||
Balance | 0 | (1,247,065) | 25,874 | (656,322) | |
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income | 623,000 | (6,300) | 424,100 | ||
Unrealized gains and losses on available-for-sale securities | Predecessor | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 1,484,169 | 1,962,130 | |||
Other comprehensive income (loss) before reclassifications | 482,370 | ||||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (243) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (4,166) | ||||
Net current-period other comprehensive income (loss) | 477,961 | ||||
Balance | 1,962,130 | $ 1,484,169 | |||
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income | (492,600) | (504,400) | |||
Accumulated Gain and Loss Derivatives | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 0 | 727 | 0 | ||
Other comprehensive income (loss) before reclassifications | (86) | (563) | 688 | ||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 86 | 451 | 39 | ||
Net current-period other comprehensive income (loss) | 0 | (112) | 727 | ||
Cumulative effect adjustments | 132 | ||||
Balance | 0 | 0 | 747 | 727 | |
Accumulated Gain and Loss Derivatives | Predecessor | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | (82) | (50) | |||
Other comprehensive income (loss) before reclassifications | 9 | ||||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 23 | ||||
Net current-period other comprehensive income (loss) | 32 | ||||
Balance | (50) | (82) | |||
Minimum Pension Benefits Liability Adjustment | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 0 | 1,072 | 5,931 | ||
Other comprehensive income (loss) before reclassifications | 5,931 | (15,726) | (5,659) | ||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 501 | 800 | ||
Net current-period other comprehensive income (loss) | 5,931 | (15,225) | (4,859) | ||
Cumulative effect adjustments | 228 | ||||
Balance | 0 | 5,931 | (13,925) | 1,072 | |
Minimum Pension Benefits Liability Adjustment | Predecessor | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | (66,011) | (78,036) | |||
Other comprehensive income (loss) before reclassifications | (12,527) | ||||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 502 | ||||
Net current-period other comprehensive income (loss) | (12,025) | ||||
Balance | (78,036) | (66,011) | |||
AOCI Attributable to Parent | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 0 | (654,523) | (1,241,134) | ||
Other comprehensive income (loss) before reclassifications | (1,258,189) | 684,247 | 602,014 | ||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (393) | 7,153 | (6,782) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 17,448 | 1,594 | (8,621) | ||
Net current-period other comprehensive income (loss) | (1,241,134) | 692,994 | 586,611 | ||
Cumulative effect adjustments | (25,775) | ||||
Balance | 0 | (1,241,134) | $ 12,696 | $ (654,523) | |
AOCI Attributable to Parent | Predecessor | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 1,418,076 | $ 1,884,044 | |||
Other comprehensive income (loss) before reclassifications | 469,852 | ||||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (243) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (3,641) | ||||
Net current-period other comprehensive income (loss) | 465,968 | ||||
Balance | $ 1,884,044 | $ 1,418,076 |
ACCUMULATED OTHER COMPREHENS130
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Benefits and settlement expenses, net of reinsurance ceded | $ (2,539,943) | $ (2,957,270) | $ (2,880,435) | |||||||||
Realized investment gains (losses): All other investments | (166,886) | 121,428 | 90,659 | |||||||||
Net impairment losses recognized in earnings | $ (853) | $ (273) | $ (2,785) | $ (7,831) | $ (10,856) | $ (3,308) | $ (967) | $ (2,617) | (26,993) | (11,742) | (17,748) | |
Income before income tax | $ 1,182 | 86,090 | 110,850 | 125,768 | 112,349 | 120,415 | 133,079 | 168,661 | 171,842 | 399,842 | 435,057 | 593,997 |
Tax (expense) or benefit | 778,218 | (28,308) | (41,500) | (36,935) | (48,148) | (39,785) | (56,541) | (56,494) | (131,543) | 671,475 | (200,968) | |
Net income | $ 864,308 | $ 82,542 | $ 84,268 | $ 75,414 | $ 72,267 | $ 93,294 | $ 112,120 | $ 115,348 | 268,299 | 1,106,532 | 393,029 | |
Accumulated Gain and Loss Derivatives | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Benefits and settlement expenses, net of reinsurance ceded | (131) | (694) | (60) | |||||||||
Income before income tax | (131) | (694) | (60) | |||||||||
Tax (expense) or benefit | 45 | 243 | 21 | |||||||||
Net income | (86) | (451) | (39) | |||||||||
Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Realized investment gains (losses): All other investments | 281 | 10,611 | 32,302 | |||||||||
Net impairment losses recognized in earnings | (26,992) | (11,742) | (17,748) | |||||||||
Income before income tax | (26,711) | (1,131) | 14,554 | |||||||||
Tax (expense) or benefit | 9,349 | 489 | (5,094) | |||||||||
Net income | $ (17,362) | (642) | 9,460 | |||||||||
Pension benefits liability adjustment | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | (634) | (1,231) | ||||||||||
Reclassification from AOCI, tax | 133 | 431 | ||||||||||
Reclassification from AOCI, net of tax | (501) | (800) | ||||||||||
Amortization of net actuarial gain/(loss) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | (634) | (1,231) | ||||||||||
Amortization of prior service credit/(cost) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | 0 | 0 | ||||||||||
Amortization of transition asset/(obligation) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | $ 0 | $ 0 | ||||||||||
Predecessor | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Benefits and settlement expenses, net of reinsurance ceded | (267,287) | |||||||||||
Realized investment gains (losses): All other investments | 81,153 | |||||||||||
Net impairment losses recognized in earnings | (481) | |||||||||||
Income before income tax | 1,182 | |||||||||||
Tax (expense) or benefit | 327 | |||||||||||
Net income | 1,509 | |||||||||||
Predecessor | Accumulated Gain and Loss Derivatives | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Benefits and settlement expenses, net of reinsurance ceded | (36) | |||||||||||
Income before income tax | (36) | |||||||||||
Tax (expense) or benefit | 13 | |||||||||||
Net income | (23) | |||||||||||
Predecessor | Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Realized investment gains (losses): All other investments | 6,891 | |||||||||||
Net impairment losses recognized in earnings | (481) | |||||||||||
Income before income tax | 6,410 | |||||||||||
Tax (expense) or benefit | (2,244) | |||||||||||
Net income | 4,166 | |||||||||||
Predecessor | Pension benefits liability adjustment | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | (772) | |||||||||||
Reclassification from AOCI, tax | 270 | |||||||||||
Reclassification from AOCI, net of tax | (502) | |||||||||||
Predecessor | Amortization of net actuarial gain/(loss) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | (808) | |||||||||||
Predecessor | Amortization of prior service credit/(cost) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | 31 | |||||||||||
Predecessor | Amortization of transition asset/(obligation) | ||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||||||||
Reclassification from AOCI, before tax | $ 5 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate and Components of Income Tax and Deferred Liability (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||
Provisional tax benefit | $ 797,600 | |||
Effective income tax rate related to continuing operations | ||||
Statutory federal income tax rate applied to pre-tax income | 35.00% | 35.00% | 35.00% | |
State income taxes | 2.00% | 0.60% | 0.80% | |
Investment income not subject to tax | (4.30%) | (5.00%) | (2.70%) | |
Uncertain tax positions | 0.20% | (0.20%) | (0.30%) | |
Federal Tax law changes | 0.00% | (183.30%) | 0.00% | |
Other | 0.00% | (1.40%) | 1.00% | |
Effective tax rate (as a percent) | 32.90% | (154.30%) | 33.80% | |
Current income tax expense: | ||||
Federal | $ 5,715 | $ 21,853 | $ (50,638) | |
State | (4,244) | 4,399 | 3,919 | |
Total current | 1,471 | 26,252 | (46,719) | |
Deferred income tax expense: | ||||
Federal | 118,338 | (693,860) | 240,127 | |
State | 11,734 | (3,867) | 7,560 | |
Total deferred | $ 130,072 | (697,727) | 247,687 | |
Deferred income tax assets: | ||||
Loss and credit carryforwards | 209,401 | 453,880 | ||
Deferred compensation | 138,945 | 209,979 | ||
Deferred policy acquisition costs | 23,876 | 156,012 | ||
Premium on corporate debt | 57,402 | 104,839 | ||
Net unrealized loss on investments | 0 | 353,448 | ||
Other | 28,179 | 44,956 | ||
Valuation allowance | (3,951) | (6,007) | ||
Deferred income tax assets | 453,852 | 1,317,107 | ||
Deferred income tax liabilities: | ||||
Premium receivables and policy liabilities | 573,469 | 884,255 | ||
VOBA and other intangibles | 433,321 | 720,750 | ||
Invested assets (other than unrealized gains (losses)) | 672,549 | 1,311,866 | ||
Net unrealized gains on investments | 6,920 | 0 | ||
Deferred income tax liabilities | 1,686,259 | 2,916,871 | ||
Net deferred income tax liability | (1,232,407) | (1,599,764) | ||
State based operating loss carryforwards, valuation allowance | 5,000 | $ 9,200 | ||
Change in valuation allowance, before federal income taxes | 4,200 | |||
Alternative minimum tax credit | 8,900 | |||
Research and development credits | 1,200 | |||
State net operating loss carryforwards | 22,800 | |||
Predecessor | ||||
Effective income tax rate related to continuing operations | ||||
Statutory federal income tax rate applied to pre-tax income | 35.00% | |||
State income taxes | 0.80% | |||
Investment income not subject to tax | (3.20%) | |||
Uncertain tax positions | (0.10%) | |||
Federal Tax law changes | 0.00% | |||
Other | (0.10%) | |||
Effective tax rate (as a percent) | 32.40% | |||
Current income tax expense: | ||||
Federal | $ (32,803) | |||
State | 1,685 | |||
Total current | (31,118) | |||
Deferred income tax expense: | ||||
Federal | 30,858 | |||
State | (67) | |||
Total deferred | $ 30,791 | |||
2,035 | ||||
Deferred income tax liabilities: | ||||
Net operating loss carryforwards | 259,600 | |||
2,031 | ||||
Deferred income tax liabilities: | ||||
Net operating loss carryforwards | 578,300 | |||
Foreign Tax Authority | ||||
Deferred income tax liabilities: | ||||
Foreign tax credits | $ 7,200 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||
Balance, beginning of period | $ 137,593 | $ 9,856 | $ 13,138 | |
Additions for tax positions of the current year | 2,213 | 1,857 | 2,122 | |
Additions for tax positions of prior years | 1,811 | 70 | 1,318 | |
Reductions of tax positions of prior years: | ||||
Changes in judgment | (16,416) | (430) | (975) | |
Settlements during the period | (112,063) | 0 | (5,747) | |
Lapses of applicable statute of limitations | 0 | 0 | 0 | |
Balance, end of period | $ 137,593 | 13,138 | 11,353 | 9,856 |
Unrecognized tax benefits with certainty of deductibility but with uncertainty about the timing of deductions | 5,600 | 700 | 700 | |
Amount of unrecognized tax benefits that would affect the effective income tax rate if recognized | 7,500 | 10,700 | 9,200 | |
Accrued interest related to the unrecognized tax benefits included in income tax expense (benefit) | (1,600) | 2,400 | 3,100 | |
Accrued interest associated with unrecognized tax benefits | 15,400 | 1,100 | $ 2,800 | |
Net refund in future period | 6,200 | |||
Decrease in unrecognized tax benefits | $ 700 | |||
Predecessor | ||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||
Balance, beginning of period | 193,244 | $ 137,593 | ||
Decrease for tax positions of the current year | (5,010) | |||
Additions for tax positions of prior years | 7,724 | |||
Reductions of tax positions of prior years: | ||||
Changes in judgment | (58,365) | |||
Settlements during the period | 0 | |||
Lapses of applicable statute of limitations | 0 | |||
Balance, end of period | 137,593 | |||
Unrecognized tax benefits with certainty of deductibility but with uncertainty about the timing of deductions | 126,000 | |||
Amount of unrecognized tax benefits that would affect the effective income tax rate if recognized | 11,500 | |||
Accrued interest related to the unrecognized tax benefits included in income tax expense (benefit) | 900 | |||
Accrued interest associated with unrecognized tax benefits | $ 12,700 |
SUPPLEMENTAL CASH FLOW INFOR133
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash paid / (received) during the year: | ||||
Interest on debt | $ 124,829 | $ 253,708 | $ 234,928 | |
Income taxes | (53,486) | (14,163) | 112,886 | |
Noncash investing and financing activities: | ||||
Stock-based compensation | $ 0 | 0 | $ 0 | |
Predecessor | ||||
Cash paid / (received) during the year: | ||||
Interest on debt | $ 22,802 | |||
Income taxes | (1) | |||
Noncash investing and financing activities: | ||||
Stock-based compensation | $ 1,550 | |||
Debt Securities | ||||
Cash paid / (received) during the year: | ||||
Interest on debt | 58,700 | |||
Subordinated debentures | ||||
Cash paid / (received) during the year: | ||||
Interest on debt | 20,200 | |||
Repurchase Agreements | ||||
Cash paid / (received) during the year: | ||||
Interest on debt | 6,300 | |||
Other Obligations Nonrecourse Funding Obligations and Other Borrowings | ||||
Cash paid / (received) during the year: | ||||
Interest on debt | $ 168,500 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Certain corporations with which the Company's directors were affiliated | ||||
Related party transactions | ||||
Premiums and policy fees or other amounts for insurance and investment products, interest on bonds and commissions on securities underwriting | $ 45.3 | $ 6.8 | $ 7.2 | |
Commission, interest on debt and investment products and fees | $ 10 | 6.5 | 8.6 | |
Dai-ichi Life | ||||
Related party transactions | ||||
Dividends paid to parent company | 143.8 | 89.3 | ||
PLICO | ||||
Related party transactions | ||||
Guarantee of synthetic lease financing | 75 | |||
Predecessor | Certain corporations with which the Company's directors were affiliated | ||||
Related party transactions | ||||
Premiums and policy fees or other amounts for insurance and investment products, interest on bonds and commissions on securities underwriting | $ 2.6 | |||
Commission, interest on debt and investment products and fees | $ 0.8 | |||
Payment of Management Fee | Dai-ichi Life | ||||
Related party transactions | ||||
Management fee | $ 10.9 | $ 6.4 |
STATUTORY REPORTING PRACTICE135
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2018 | |
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | ||||
Net assets of the company's insurance subsidiaries that are restricted from transfer (in dollars) | $ 6,300 | |||
Total adjusted capital | 4,700 | |||
Action level RBC | $ 759.3 | |||
RBC ratio (as a percent) | 614.00% | |||
Fair value of fixed maturity and short-term investments of the company's subsidiaries deposited with regulatory authorities | $ 42.4 | |||
Favorable (unfavorable) effects on the statutory surplus of the Company's insurance subsidiaries, compared to NAIC statutory surplus, from the use of prescribed and permitted practices | ||||
Accounting for Letters of Credit as admitted assets | 1,670 | $ 1,720 | ||
Accounting for certain notes as admitted assets | 2,634 | 2,681 | ||
Reserving based on state specific actuarial practices | 122 | 120 | ||
Reserving difference related to a captive insurance company | (37) | (109) | ||
PLICO | ||||
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | ||||
Statutory net income | 731.2 | (391.6) | $ 440 | |
Statutory capital and surplus | 4,300 | 4,200 | ||
Gain on retrocession | 1,200 | |||
Favorable (unfavorable) effects of PLICO's statutory surplus, compared to NAIC statutory surplus, from the use of prescribed and permitted practices | ||||
Non-admission of goodwill | (219) | (257) | ||
Total (net) | $ (219) | $ (257) | ||
Scenario, Forecast | ||||
STATUTORY REPORTING PRACTICES AND OTHER REGULATORY MATTERS | ||||
Estimated Ordinary Dividend from Insurance Subsidiaries, Maximum | $ 853.2 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summarized financial information for the company's segments | ||||||||||||
Revenues | $ 1,142,040 | $ 1,084,388 | $ 1,087,067 | $ 1,105,297 | $ 1,116,987 | $ 1,123,646 | $ 1,116,401 | $ 1,126,913 | $ 3,710,669 | $ 4,418,792 | $ 4,483,947 | |
Pre-tax Adjusted Operating Income (Loss) | 484,440 | 506,892 | 503,369 | |||||||||
Nonoperating Gains (Losses) | (84,598) | (71,835) | 90,628 | |||||||||
Income before income tax | $ 1,182 | 86,090 | 110,850 | 125,768 | 112,349 | 120,415 | 133,079 | 168,661 | 171,842 | 399,842 | 435,057 | 593,997 |
Income tax (benefit) expense | 778,218 | (28,308) | (41,500) | (36,935) | (48,148) | (39,785) | (56,541) | (56,494) | (131,543) | 671,475 | (200,968) | |
Net income | 864,308 | 82,542 | 84,268 | 75,414 | 72,267 | 93,294 | 112,120 | 115,348 | 268,299 | 1,106,532 | 393,029 | |
Adjusted operating income tax benefit (expense) | (161,153) | 646,333 | (169,247) | |||||||||
After-tax adjusted operating income | 323,287 | 1,153,225 | 334,122 | |||||||||
Income tax (expense) benefit on adjustments | 29,610 | 25,142 | (31,721) | |||||||||
Realized investment (losses) gains: | ||||||||||||
Derivative financial instruments | 29,997 | (305,828) | (40,288) | |||||||||
Realized gains (losses) on investments and derivatives | (166,886) | 121,428 | 90,659 | |||||||||
Net impairment losses recognized in earnings | (853) | (273) | (2,785) | (7,831) | (10,856) | (3,308) | (967) | (2,617) | (26,993) | (11,742) | (17,748) | |
Less: related amortization | (8,726) | (39,480) | 24,360 | |||||||||
Less: VA GLWB economic cost | (70,558) | (84,827) | (82,365) | |||||||||
Net investment income | 529,490 | $ 507,914 | $ 507,771 | $ 506,413 | 496,150 | $ 482,729 | $ 488,460 | $ 475,117 | 1,632,948 | 2,051,588 | 1,942,456 | |
Amortization of deferred policy acquisition costs and value of business acquired | 94,056 | 78,221 | 149,064 | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 75,973,148 | 71,501,997 | 75,973,148 | 71,501,997 | ||||||||
Deferred policy acquisition costs and value of business acquired | 2,199,577 | 2,019,829 | 1,558,808 | 2,199,577 | 2,019,829 | |||||||
Other intangibles | 663,572 | 688,083 | 663,572 | 688,083 | ||||||||
Goodwill | 793,470 | 793,470 | 793,470 | 793,470 | ||||||||
Total assets | 79,629,767 | 75,003,379 | 79,629,767 | 75,003,379 | ||||||||
Life Marketing | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 107,811 | 120,753 | 130,708 | |||||||||
Operating Segment Assets | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 1,320,776 | 1,218,944 | 1,119,515 | 1,320,776 | 1,218,944 | |||||||
Acquisitions | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 2,035 | (6,939) | 8,178 | |||||||||
Operating Segment Assets | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 74,862 | 106,532 | (178,662) | 74,862 | 106,532 | |||||||
Annuities | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | (41,071) | (54,471) | (11,031) | |||||||||
Operating Segment Assets | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 772,633 | 655,618 | 578,742 | 772,633 | 655,618 | |||||||
Stable Value Products | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 43 | 2,354 | 1,176 | |||||||||
Operating Segment Assets | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 6,864 | 5,455 | 2,357 | 6,864 | 5,455 | |||||||
Asset Protection | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 25,211 | 16,524 | 20,033 | |||||||||
Operating Segment Assets | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 24,442 | 33,280 | 36,856 | 24,442 | 33,280 | |||||||
Corporate and Other | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 27 | 0 | 0 | |||||||||
Operating Segment Assets | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 0 | 0 | 0 | 0 | 0 | |||||||
Operating | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 3,710,669 | 4,418,792 | 4,483,947 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | 484,440 | 506,892 | 503,369 | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 1,632,948 | 2,051,588 | 1,942,456 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 94,056 | 78,221 | 149,064 | |||||||||
Operating | Life Marketing | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 1,426,090 | 1,667,118 | 1,627,848 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | 57,414 | 50,778 | 39,745 | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 446,439 | 553,999 | 525,495 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 107,811 | 120,753 | 130,708 | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 14,914,418 | 14,050,170 | 14,914,418 | 14,050,170 | ||||||||
Deferred policy acquisition costs and value of business acquired | 1,320,776 | 1,218,944 | 1,320,776 | 1,218,944 | ||||||||
Other intangibles | 282,361 | 301,399 | 282,361 | 301,399 | ||||||||
Goodwill | 200,274 | 200,274 | 200,274 | 200,274 | ||||||||
Total assets | 16,717,829 | 15,770,787 | 16,717,829 | 15,770,787 | ||||||||
Operating | Acquisitions | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 1,333,430 | 1,569,083 | 1,676,017 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | 194,654 | 249,749 | 260,511 | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 639,422 | 752,520 | 764,571 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 2,035 | (6,939) | 8,178 | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 19,588,133 | 19,679,690 | 19,588,133 | 19,679,690 | ||||||||
Deferred policy acquisition costs and value of business acquired | 74,862 | 106,532 | 74,862 | 106,532 | ||||||||
Other intangibles | 34,548 | 37,103 | 34,548 | 37,103 | ||||||||
Goodwill | 14,524 | 14,524 | 14,524 | 14,524 | ||||||||
Total assets | 19,712,067 | 19,837,849 | 19,712,067 | 19,837,849 | ||||||||
Operating | Annuities | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 443,419 | 450,306 | 574,934 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | 180,231 | 213,080 | 213,293 | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 297,114 | 321,844 | 322,608 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | (41,071) | (54,471) | (11,031) | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 20,938,409 | 20,243,333 | 20,938,409 | 20,243,333 | ||||||||
Deferred policy acquisition costs and value of business acquired | 772,634 | 655,618 | 772,634 | 655,618 | ||||||||
Other intangibles | 170,117 | 183,449 | 170,117 | 183,449 | ||||||||
Goodwill | 336,677 | 336,677 | 336,677 | 336,677 | ||||||||
Total assets | 22,217,837 | 21,419,077 | 22,217,837 | 21,419,077 | ||||||||
Operating | Stable Value Products | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 79,670 | 190,006 | 114,580 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | 56,581 | 105,261 | 61,294 | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 78,459 | 186,576 | 107,010 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 43 | 2,354 | 1,176 | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 4,569,639 | 3,373,646 | 4,569,639 | 3,373,646 | ||||||||
Deferred policy acquisition costs and value of business acquired | 6,864 | 5,455 | 6,864 | 5,455 | ||||||||
Other intangibles | 8,056 | 8,722 | 8,056 | 8,722 | ||||||||
Goodwill | 113,813 | 113,813 | 113,813 | 113,813 | ||||||||
Total assets | 4,698,372 | 3,501,636 | 4,698,372 | 3,501,636 | ||||||||
Operating | Asset Protection | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 261,693 | 327,573 | 269,145 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | 20,627 | 24,356 | 16,487 | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 17,459 | 27,325 | 22,082 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 25,211 | 16,524 | 20,033 | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 918,952 | 1,013,399 | 918,952 | 1,013,399 | ||||||||
Deferred policy acquisition costs and value of business acquired | 24,441 | 33,280 | 24,441 | 33,280 | ||||||||
Other intangibles | 133,234 | 143,865 | 133,234 | 143,865 | ||||||||
Goodwill | 128,182 | 128,182 | 128,182 | 128,182 | ||||||||
Total assets | 1,204,809 | 1,318,726 | 1,204,809 | 1,318,726 | ||||||||
Operating | Corporate and Other | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 166,367 | 214,706 | 221,423 | |||||||||
Pre-tax Adjusted Operating Income (Loss) | (25,067) | (136,332) | (87,961) | |||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 154,055 | 209,324 | 200,690 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | $ 27 | 0 | 0 | |||||||||
Operating Segment Assets | ||||||||||||
Investments and other assets | 15,043,597 | 13,141,759 | 15,043,597 | 13,141,759 | ||||||||
Deferred policy acquisition costs and value of business acquired | 0 | 0 | 0 | 0 | ||||||||
Other intangibles | 35,256 | 13,545 | 35,256 | 13,545 | ||||||||
Goodwill | 0 | 0 | 0 | 0 | ||||||||
Total assets | $ 15,078,853 | $ 13,155,304 | $ 15,078,853 | $ 13,155,304 | ||||||||
Predecessor | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 340,909 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | 28,485 | |||||||||||
Nonoperating Gains (Losses) | (27,303) | |||||||||||
Income before income tax | 1,182 | |||||||||||
Income tax (benefit) expense | 327 | |||||||||||
Net income | 1,509 | |||||||||||
Adjusted operating income tax benefit (expense) | (9,228) | |||||||||||
After-tax adjusted operating income | 19,257 | |||||||||||
Income tax (expense) benefit on adjustments | 9,555 | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Derivative financial instruments | (123,274) | |||||||||||
Realized gains (losses) on investments and derivatives | 81,153 | |||||||||||
Net impairment losses recognized in earnings | (481) | |||||||||||
Less: related amortization | (9,143) | |||||||||||
Less: VA GLWB economic cost | (6,156) | |||||||||||
Net investment income | 175,180 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,072 | |||||||||||
Predecessor | Life Marketing | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,813 | |||||||||||
Predecessor | Acquisitions | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 5,033 | |||||||||||
Predecessor | Annuities | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | (7,706) | |||||||||||
Predecessor | Stable Value Products | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 25 | |||||||||||
Predecessor | Asset Protection | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 1,820 | |||||||||||
Predecessor | Corporate and Other | ||||||||||||
Realized investment (losses) gains: | ||||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 87 | |||||||||||
Predecessor | Operating | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 340,909 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | 28,485 | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 175,180 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,072 | |||||||||||
Predecessor | Operating | Life Marketing | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 145,595 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | (1,618) | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 47,460 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,813 | |||||||||||
Predecessor | Operating | Acquisitions | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 139,761 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | 20,134 | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 71,088 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 5,033 | |||||||||||
Predecessor | Operating | Annuities | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 7,884 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | 13,164 | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 37,189 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | (7,706) | |||||||||||
Predecessor | Operating | Stable Value Products | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 8,181 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | 4,529 | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 6,888 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 25 | |||||||||||
Predecessor | Operating | Asset Protection | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 21,953 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | 2,420 | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 1,878 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 1,820 | |||||||||||
Predecessor | Operating | Corporate and Other | ||||||||||||
Summarized financial information for the company's segments | ||||||||||||
Revenues | 17,535 | |||||||||||
Pre-tax Adjusted Operating Income (Loss) | (10,144) | |||||||||||
Realized investment (losses) gains: | ||||||||||||
Net investment income | 10,677 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | $ 87 |
CONSOLIDATED QUARTERLY RESUL137
CONSOLIDATED QUARTERLY RESULTS - UNAUDITED (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Premiums and policy fees | $ 893,606 | $ 855,088 | $ 868,139 | $ 860,586 | $ 862,644 | $ 834,544 | $ 857,948 | $ 852,795 | $ 3,008,050 | $ 3,477,419 | $ 3,407,931 | |
Reinsurance ceded | (376,641) | (325,120) | (342,898) | (316,076) | (345,555) | (322,229) | (336,605) | (310,327) | (1,154,978) | (1,360,735) | (1,314,716) | |
Net of reinsurance ceded | 516,965 | 529,968 | 525,241 | 544,510 | 517,089 | 512,315 | 521,343 | 542,468 | 1,853,072 | 2,116,684 | 2,093,215 | |
Net investment income | 529,490 | 507,914 | 507,771 | 506,413 | 496,150 | 482,729 | 488,460 | 475,117 | 1,632,948 | 2,051,588 | 1,942,456 | |
Realized investment gains (losses) | (18,701) | (64,191) | (54,471) | (47,037) | 12,457 | 24,268 | 5,417 | 8,229 | (163,882) | (196,142) | 32,623 | |
Net impairment losses recognized in earnings | (853) | (273) | (2,785) | (7,831) | (10,856) | (3,308) | (967) | (2,617) | (26,993) | (11,742) | (17,748) | |
Other income | 115,139 | 110,970 | 111,311 | 109,242 | 102,147 | 107,642 | 102,148 | 103,716 | 388,531 | 446,662 | 415,653 | |
Total revenues | 1,142,040 | 1,084,388 | 1,087,067 | 1,105,297 | 1,116,987 | 1,123,646 | 1,116,401 | 1,126,913 | 3,710,669 | 4,418,792 | 4,483,947 | |
Total benefits and expenses | 1,055,950 | 973,538 | 961,299 | 992,948 | 996,572 | 990,567 | 947,740 | 955,071 | 3,310,827 | 3,983,735 | 3,889,950 | |
Income before income tax | $ 1,182 | 86,090 | 110,850 | 125,768 | 112,349 | 120,415 | 133,079 | 168,661 | 171,842 | 399,842 | 435,057 | 593,997 |
Income tax expense (benefit) | (778,218) | 28,308 | 41,500 | 36,935 | 48,148 | 39,785 | 56,541 | 56,494 | 131,543 | (671,475) | 200,968 | |
Net income | $ 864,308 | $ 82,542 | $ 84,268 | $ 75,414 | $ 72,267 | $ 93,294 | $ 112,120 | $ 115,348 | $ 268,299 | $ 1,106,532 | $ 393,029 |
SUBSEQUENT EVENTS Narrative (De
SUBSEQUENT EVENTS Narrative (Details) - PLICO - Subsequent Event $ in Millions | Jan. 18, 2018USD ($) |
Subsequent Event [Line Items] | |
Aggregate statutory reserves for reinsurance agreement | $ 13,000 |
Capital investment by PLICO of reinsurance recoverables | $ 1,170 |
SCHEDULE II - CONDENSED FINA139
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Statements of Income (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | ||||||||||||
Net investment income | $ 529,490 | $ 507,914 | $ 507,771 | $ 506,413 | $ 496,150 | $ 482,729 | $ 488,460 | $ 475,117 | $ 1,632,948 | $ 2,051,588 | $ 1,942,456 | |
Realized investment gains (losses) | (18,701) | (64,191) | (54,471) | (47,037) | 12,457 | 24,268 | 5,417 | 8,229 | (163,882) | (196,142) | 32,623 | |
Other income | 115,139 | 110,970 | 111,311 | 109,242 | 102,147 | 107,642 | 102,148 | 103,716 | 388,531 | 446,662 | 415,653 | |
Total revenues | 1,142,040 | 1,084,388 | 1,087,067 | 1,105,297 | 1,116,987 | 1,123,646 | 1,116,401 | 1,126,913 | 3,710,669 | 4,418,792 | 4,483,947 | |
Expenses: | ||||||||||||
Total benefits and expenses | 1,055,950 | 973,538 | 961,299 | 992,948 | 996,572 | 990,567 | 947,740 | 955,071 | 3,310,827 | 3,983,735 | 3,889,950 | |
Income before income tax | $ 1,182 | 86,090 | 110,850 | 125,768 | 112,349 | 120,415 | 133,079 | 168,661 | 171,842 | 399,842 | 435,057 | 593,997 |
Income tax (benefit) expense | ||||||||||||
Current | 1,471 | 26,252 | (46,719) | |||||||||
Deferred | 130,072 | (697,727) | 247,687 | |||||||||
Total income tax (benefit) expense | (778,218) | 28,308 | 41,500 | 36,935 | 48,148 | 39,785 | 56,541 | 56,494 | 131,543 | (671,475) | 200,968 | |
Net income | $ 864,308 | $ 82,542 | $ 84,268 | $ 75,414 | $ 72,267 | $ 93,294 | $ 112,120 | $ 115,348 | 268,299 | 1,106,532 | 393,029 | |
PROTECTIVE LIFE CORPORATION | ||||||||||||
Revenues: | ||||||||||||
Dividends from subsidiaries | 32,365 | 261,090 | 541,762 | |||||||||
Service fees from subsidiaries | 220,105 | 276,325 | 250,668 | |||||||||
Net investment income | 49,925 | 9,457 | 8,607 | |||||||||
Realized investment gains (losses) | 3,817 | (45,091) | (29,289) | |||||||||
Other income | 44 | 2,049 | 9,828 | |||||||||
Total revenues | 306,256 | 503,830 | 781,576 | |||||||||
Expenses: | ||||||||||||
Operating and administrative | 121,433 | 172,871 | 143,941 | |||||||||
Interest—subordinated debt | 17,191 | 25,411 | 19,408 | |||||||||
Interest—other | 40,596 | 35,852 | 40,729 | |||||||||
Total benefits and expenses | 179,220 | 234,134 | 204,078 | |||||||||
Income before income tax | 127,036 | 269,696 | 577,498 | |||||||||
Income tax (benefit) expense | ||||||||||||
Current | (58,547) | (9,441) | 334 | |||||||||
Deferred | 99,146 | 46,020 | 20,715 | |||||||||
Total income tax (benefit) expense | 40,599 | 36,579 | 21,049 | |||||||||
Income before equity in undistributed income from subsidiaries | 86,437 | 233,117 | 556,449 | |||||||||
Equity in undistributed income of subsidiaries | 181,862 | 873,415 | (163,420) | |||||||||
Net income | 268,299 | $ 1,106,532 | $ 393,029 | |||||||||
Predecessor | ||||||||||||
Revenues: | ||||||||||||
Net investment income | 175,180 | |||||||||||
Realized investment gains (losses) | (42,602) | |||||||||||
Other income | 36,421 | |||||||||||
Total revenues | 340,909 | |||||||||||
Expenses: | ||||||||||||
Total benefits and expenses | 339,727 | |||||||||||
Income before income tax | 1,182 | |||||||||||
Income tax (benefit) expense | ||||||||||||
Current | (31,118) | |||||||||||
Deferred | 30,791 | |||||||||||
Total income tax (benefit) expense | (327) | |||||||||||
Net income | 1,509 | |||||||||||
Predecessor | PROTECTIVE LIFE CORPORATION | ||||||||||||
Revenues: | ||||||||||||
Dividends from subsidiaries | 16 | |||||||||||
Service fees from subsidiaries | 19,530 | |||||||||||
Net investment income | 4,809 | |||||||||||
Realized investment gains (losses) | (15,863) | |||||||||||
Total revenues | 8,492 | |||||||||||
Expenses: | ||||||||||||
Operating and administrative | 8,549 | |||||||||||
Interest—subordinated debt | 2,823 | |||||||||||
Interest—other | 6,113 | |||||||||||
Total benefits and expenses | 17,485 | |||||||||||
Income before income tax | (8,993) | |||||||||||
Income tax (benefit) expense | ||||||||||||
Current | 6,376 | |||||||||||
Deferred | (11,123) | |||||||||||
Total income tax (benefit) expense | (4,747) | |||||||||||
Income before equity in undistributed income from subsidiaries | (4,246) | |||||||||||
Equity in undistributed income of subsidiaries | 5,755 | |||||||||||
Net income | $ 1,509 | $ 268,299 |
SCHEDULE II - CONDENSED FINA140
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Statements Of Comprehensive Income (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Statement of Income Captions [Line Items] | ||||||||||||
Net income | $ 864,308 | $ 82,542 | $ 84,268 | $ 75,414 | $ 72,267 | $ 93,294 | $ 112,120 | $ 115,348 | $ 268,299 | $ 1,106,532 | $ 393,029 | |
Total other comprehensive income (loss) | (1,241,134) | 692,994 | 586,611 | |||||||||
Total comprehensive income (loss) | (972,835) | 1,799,526 | 979,640 | |||||||||
PROTECTIVE LIFE CORPORATION | ||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||
Net income | 268,299 | 1,106,532 | 393,029 | |||||||||
Total other comprehensive income (loss) | 692,994 | 586,611 | ||||||||||
Total comprehensive income (loss) | (972,835) | $ 1,799,526 | $ 979,640 | |||||||||
Predecessor | ||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||
Net income | $ 1,509 | |||||||||||
Total other comprehensive income (loss) | 465,968 | |||||||||||
Total comprehensive income (loss) | 467,477 | |||||||||||
Predecessor | PROTECTIVE LIFE CORPORATION | ||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||
Net income | 1,509 | 268,299 | ||||||||||
Total other comprehensive income (loss) | 465,968 | $ (1,241,134) | ||||||||||
Total comprehensive income (loss) | $ 467,477 |
SCHEDULE II - CONDENSED FINA141
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2015 |
Assets | ||||
Fixed maturities | $ 41,176,052 | $ 38,183,337 | ||
Equity securities | 754,360 | 754,489 | ||
Other long-term investments | 915,595 | 865,304 | ||
Total investments | 54,621,814 | 50,696,163 | ||
Cash | 252,310 | 348,182 | $ 396,072 | $ 462,710 |
Property and equipment, net | 111,417 | 106,111 | ||
Income tax receivable | 76,543 | 116,823 | ||
Deferred income tax | 453,852 | 1,317,107 | ||
Other assets | 227,357 | 170,004 | ||
Total assets | 79,629,767 | 75,003,379 | ||
Liabilities | ||||
Debt | 945,052 | 1,163,285 | ||
Subordinated debt securities | 495,289 | 441,202 | ||
Total liabilities | 72,502,568 | 69,531,858 | ||
Commitments and contingencies—Note 3 | ||||
Shareowners' equity | ||||
Common stock | 0 | 0 | ||
Additional paid-in-capital | 5,554,059 | 5,554,059 | ||
Retained earnings, including undistributed income of subsidiaries: (Successor 2017 - $891,860; 2016 - $18,442) | 1,560,444 | 571,985 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Net unrealized gains on investments, all from subsidiaries, net of income tax: (Successor 2017 - $6,883; 2016 - $(349,541)) | 25,896 | (649,147) | ||
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2017 - $(6); 2016 - $(3,864)) | (22) | (7,175) | ||
Accumulated gain (loss)—derivatives, net of income tax: (Successor 2017 - $198; 2016 - $391) | 747 | 727 | ||
Postretirement benefits liability adjustment, net of income tax: (Successor 2017 - $(3,469); 2016 - $578) | (13,925) | 1,072 | ||
Total shareowner's equity | 7,127,199 | 5,471,521 | 4,581,224 | 5,554,059 |
Total liabilities and shareowner's equity | 79,629,767 | 75,003,379 | ||
PROTECTIVE LIFE CORPORATION | ||||
Assets | ||||
Fixed maturities | 140,102 | 112,498 | ||
Equity securities | 38,861 | 38,472 | ||
Other long-term investments | 10 | 10 | ||
Short-term investments | 79,818 | 0 | ||
Investments in subsidiaries (equity method) | 8,563,201 | 7,019,618 | ||
Total investments | 8,821,992 | 7,170,598 | ||
Cash | 3,760 | 78,936 | $ 68,615 | $ 20,776 |
Receivables from subsidiaries | 38,394 | 9,600 | ||
Property and equipment, net | 1,692 | 2,331 | ||
Income tax receivable | 513 | 11,061 | ||
Deferred income tax | 103,716 | 142,531 | ||
Other assets | 38,487 | 29,851 | ||
Total assets | 9,008,554 | 7,444,908 | ||
Liabilities | ||||
Accrued expenses and other liabilities | 442,696 | 368,900 | ||
Debt | 943,370 | 1,163,285 | ||
Subordinated debt securities | 495,289 | 441,202 | ||
Total liabilities | 1,881,355 | 1,973,387 | ||
Commitments and contingencies—Note 3 | ||||
Shareowners' equity | ||||
Common stock | 0 | 0 | ||
Additional paid-in-capital | 5,554,059 | 5,554,059 | ||
Treasury stock | 0 | 0 | ||
Retained earnings, including undistributed income of subsidiaries: (Successor 2017 - $891,860; 2016 - $18,442) | 1,560,444 | 571,985 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Net unrealized gains on investments, all from subsidiaries, net of income tax: (Successor 2017 - $6,883; 2016 - $(349,541)) | 25,896 | (649,147) | ||
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2017 - $(6); 2016 - $(3,864)) | (22) | (7,175) | ||
Accumulated gain (loss)—derivatives, net of income tax: (Successor 2017 - $198; 2016 - $391) | 747 | 727 | ||
Postretirement benefits liability adjustment, net of income tax: (Successor 2017 - $(3,469); 2016 - $578) | (13,925) | 1,072 | ||
Total shareowner's equity | 7,127,199 | 5,471,521 | ||
Total liabilities and shareowner's equity | $ 9,008,554 | $ 7,444,908 |
SCHEDULE II - CONDENSED FINA142
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheets Parenthetical (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Information of Registrant | ||
Net unrealized gains (losses) on investments, income tax | $ 6,883 | $ (349,541) |
Net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (6) | (3,864) |
Accumulated gain (loss) - derivatives, income tax | 198 | 391 |
Postretirement benefits liability adjustment, income tax | (3,469) | 578 |
PROTECTIVE LIFE CORPORATION | ||
Condensed Financial Information of Registrant | ||
Undistributed income of subsidiaries | 891,860 | 18,442 |
Net unrealized gains (losses) on investments, income tax | 6,883 | (349,541) |
Net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (6) | (3,864) |
Accumulated gain (loss) - derivatives, income tax | 198 | 391 |
Postretirement benefits liability adjustment, income tax | $ (3,469) | $ 578 |
SCHEDULE II - CONDENSED FINA143
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | ||||||||||||
Net income | $ 864,308 | $ 82,542 | $ 84,268 | $ 75,414 | $ 72,267 | $ 93,294 | $ 112,120 | $ 115,348 | $ 268,299 | $ 1,106,532 | $ 393,029 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Realized investment (gains) losses | 18,701 | $ 64,191 | $ 54,471 | 47,037 | (12,457) | $ (24,268) | $ (5,417) | (8,229) | 163,882 | 196,142 | (32,623) | |
Deferred income tax | 130,072 | (697,727) | 247,687 | |||||||||
Accrued income tax | 65,415 | 40,280 | (162,619) | |||||||||
Other, net | (63,144) | (101,784) | (81,091) | |||||||||
Net cash provided by operating activities | 355,628 | 195,272 | 249,638 | |||||||||
Cash flows from investing activities | ||||||||||||
Maturities and principal reductions of investments, available-for-sale | 1,052,198 | 696,574 | 1,299,753 | |||||||||
Sale of investments, available-for-sale | 1,336,350 | 1,802,215 | 1,956,302 | |||||||||
Cost of investments acquired, available-for-sale | (3,546,474) | (4,029,233) | (4,982,907) | |||||||||
Change in other long-term investments | (73,907) | (91,518) | (250,557) | |||||||||
Change in short-term investments | (11,221) | (279,191) | (72,810) | |||||||||
Purchase of property and equipment | (8,862) | (37,533) | (5,295) | |||||||||
Net cash (used in) provided by investing activities | (1,492,815) | (2,624,770) | (4,366,985) | |||||||||
Cash flows from financing activities | ||||||||||||
Principal payments on line of credit arrangement and debt | (338,093) | (1,156,498) | (633,074) | |||||||||
Dividends to shareowners | 0 | (143,848) | (89,343) | |||||||||
Net cash provided by (used in) financing activities | 1,070,549 | 2,333,626 | 4,069,457 | |||||||||
Change in cash | (66,638) | (95,872) | (47,890) | |||||||||
Cash at beginning of period | 348,182 | 396,072 | 462,710 | 348,182 | 396,072 | |||||||
Cash at end of period | $ 462,710 | 252,310 | 348,182 | 396,072 | 252,310 | 348,182 | ||||||
PROTECTIVE LIFE CORPORATION | ||||||||||||
Cash flows from operating activities | ||||||||||||
Net income | 268,299 | 1,106,532 | 393,029 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Realized investment (gains) losses | (3,817) | 45,091 | 29,289 | |||||||||
Equity in undistributed net income of subsidiaries | (181,862) | (873,415) | 163,420 | |||||||||
Depreciation expense | 363 | 739 | 506 | |||||||||
Receivables from subsidiaries | (13,759) | (28,794) | 15,181 | |||||||||
Income tax receivable | (13,170) | 10,548 | 2,109 | |||||||||
Deferred income tax | 99,146 | 46,020 | 20,715 | |||||||||
Accrued income tax | (23,246) | 0 | 0 | |||||||||
Accrued expenses and other liabilities | (192,234) | (52,846) | (33,639) | |||||||||
Other, net | 5,419 | 4,226 | (16,426) | |||||||||
Net cash provided by operating activities | (54,861) | 258,101 | 574,184 | |||||||||
Cash flows from investing activities | ||||||||||||
Maturities and principal reductions of investments, available-for-sale | 0 | 0 | ||||||||||
Sale of investments, available-for-sale | 0 | 0 | ||||||||||
Cost of investments acquired, available-for-sale | 0 | (26,423) | (59,025) | |||||||||
Return of and/or (additional) capital investments in subsidiaries | 110,793 | 38,410 | (45,762) | |||||||||
Change in other long-term investments | 0 | 0 | (10) | |||||||||
Change in short-term investments | 0 | (79,818) | 0 | |||||||||
Purchase of property and equipment | 0 | 0 | (1,649) | |||||||||
Sales of property and equipment | 0 | (100) | 0 | |||||||||
Net cash (used in) provided by investing activities | 110,793 | (67,931) | (106,446) | |||||||||
Cash flows from financing activities | ||||||||||||
Borrowings under line of credit arrangements and debt | 330,000 | 1,035,000 | 265,000 | |||||||||
Principal payments on line of credit arrangement and debt | (338,093) | (1,156,498) | (633,074) | |||||||||
Dividends to shareowners | 0 | (143,848) | (89,343) | |||||||||
Net cash provided by (used in) financing activities | (8,093) | (265,346) | (457,417) | |||||||||
Change in cash | 47,839 | (75,176) | 10,321 | |||||||||
Cash at beginning of period | $ 78,936 | $ 68,615 | 20,776 | 78,936 | 68,615 | |||||||
Cash at end of period | 20,776 | $ 3,760 | $ 78,936 | 68,615 | $ 3,760 | $ 78,936 | ||||||
Predecessor | ||||||||||||
Cash flows from operating activities | ||||||||||||
Net income | 1,509 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Realized investment (gains) losses | 42,602 | |||||||||||
Deferred income tax | 30,791 | |||||||||||
Accrued income tax | (32,803) | |||||||||||
Other, net | (149,889) | |||||||||||
Net cash provided by operating activities | 191,223 | |||||||||||
Cash flows from investing activities | ||||||||||||
Maturities and principal reductions of investments, available-for-sale | 59,028 | |||||||||||
Sale of investments, available-for-sale | 191,062 | |||||||||||
Cost of investments acquired, available-for-sale | (149,887) | |||||||||||
Change in other long-term investments | (25,339) | |||||||||||
Change in short-term investments | (40,314) | |||||||||||
Purchase of property and equipment | (649) | |||||||||||
Net cash (used in) provided by investing activities | 22,994 | |||||||||||
Cash flows from financing activities | ||||||||||||
Principal payments on line of credit arrangement and debt | (60,000) | |||||||||||
Dividends to shareowners | 0 | |||||||||||
Net cash provided by (used in) financing activities | (130,918) | |||||||||||
Change in cash | 83,299 | |||||||||||
Cash at beginning of period | 379,411 | 462,710 | ||||||||||
Cash at end of period | 462,710 | |||||||||||
Predecessor | PROTECTIVE LIFE CORPORATION | ||||||||||||
Cash flows from operating activities | ||||||||||||
Net income | 1,509 | 268,299 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Realized investment (gains) losses | 15,863 | |||||||||||
Equity in undistributed net income of subsidiaries | (5,755) | |||||||||||
Depreciation expense | 23 | |||||||||||
Receivables from subsidiaries | (4,076) | |||||||||||
Income tax receivable | 0 | |||||||||||
Deferred income tax | (11,123) | |||||||||||
Accrued income tax | 5,875 | |||||||||||
Accrued expenses and other liabilities | 18,329 | |||||||||||
Other, net | (2,334) | |||||||||||
Net cash provided by operating activities | 18,311 | |||||||||||
Cash flows from investing activities | ||||||||||||
Maturities and principal reductions of investments, available-for-sale | 0 | |||||||||||
Sale of investments, available-for-sale | 0 | |||||||||||
Cost of investments acquired, available-for-sale | 0 | |||||||||||
Return of and/or (additional) capital investments in subsidiaries | 0 | |||||||||||
Change in other long-term investments | 0 | |||||||||||
Change in short-term investments | 0 | |||||||||||
Purchase of property and equipment | 0 | |||||||||||
Sales of property and equipment | 0 | |||||||||||
Net cash (used in) provided by investing activities | 0 | |||||||||||
Cash flows from financing activities | ||||||||||||
Borrowings under line of credit arrangements and debt | 0 | |||||||||||
Principal payments on line of credit arrangement and debt | (60,000) | |||||||||||
Dividends to shareowners | 0 | |||||||||||
Net cash provided by (used in) financing activities | (60,000) | |||||||||||
Change in cash | (41,689) | |||||||||||
Cash at beginning of period | 62,465 | $ 20,776 | ||||||||||
Cash at end of period | $ 20,776 |
SCHEDULE II - CONDENSED FINA144
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Debt and Other Obligations (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 10, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | $ 784,610,000 | $ 966,926,000 | |||
Total debt | 945,052,000 | 1,163,285,000 | |||
Total subordinated debt securities | 495,289,000 | 441,202,000 | |||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Debt maturities due in 2018 | 150,500,000 | ||||
Debt maturities due in 2019 | 435,800,000 | ||||
Debt maturities due thereafter | 357,000,000 | ||||
Interest Expense | |||||
Interest expense | $ 58,600,000 | 61,300,000 | 62,100,000 | ||
6.40% Senior Notes (2007), due 2018 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 150,000,000 | 150,000,000 | |||
Total debt | $ 150,518,000 | 156,663,000 | |||
Stated interest rate (as a percent) | 6.40% | ||||
7.375% Senior Notes (2009), due 2019 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | $ 400,000,000 | 400,000,000 | |||
Total debt | $ 435,806,000 | 454,688,000 | |||
Stated interest rate (as a percent) | 7.375% | ||||
8.45% Senior Notes (2009), due 2039 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | $ 232,928,000 | 246,926,000 | |||
Total debt | $ 357,046,000 | $ 381,934,000 | |||
Stated interest rate (as a percent) | 8.45% | 8.45% | |||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Redemption of subordinated debt | $ 21,600,000 | ||||
Par value of extinguished debt | 14,000,000 | $ 53,100,000 | |||
Pre-tax gain on extinguishment | 2,000,000 | 9,800,000 | |||
6.25% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Total subordinated debt securities | $ 0 | 290,002,000 | |||
Stated interest rate (as a percent) | 6.25% | ||||
6.00% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Total subordinated debt securities | $ 0 | 151,200,000 | |||
Stated interest rate (as a percent) | 6.00% | ||||
5.35% Subordinated Debentures (2017), due 2052 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Total subordinated debt securities | $ 495,289,000 | 0 | |||
Stated interest rate (as a percent) | 5.35% | ||||
2015 Credit Facility | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Line of credit, maximum borrowing capacity | $ 1,000,000,000 | ||||
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,250,000,000 | ||||
Facility fee percentage | 0.125% | ||||
2015 Credit Facility | Prime Rate | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Base of floating rate interest rate payments | prime rate | ||||
2015 Credit Facility | LIBOR One-Month Rate | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Base of floating rate interest rate payments | one-month LIBOR | ||||
PROTECTIVE LIFE CORPORATION | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | $ 782,928,000 | 966,926,000 | |||
Total debt | 943,370,000 | 1,163,285,000 | |||
Total subordinated debt securities | 495,289,000 | 441,202,000 | |||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Debt maturities due in 2018 | 150,500,000 | ||||
Debt maturities due in 2019 | 435,800,000 | ||||
Debt maturities due thereafter | 357,000,000 | ||||
PROTECTIVE LIFE CORPORATION | 6.40% Senior Notes (2007), due 2018 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 150,000,000 | 150,000,000 | |||
Total debt | $ 150,518,000 | 156,663,000 | |||
Stated interest rate (as a percent) | 6.40% | ||||
PROTECTIVE LIFE CORPORATION | 7.375% Senior Notes (2009), due 2019 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | $ 400,000,000 | 400,000,000 | |||
Total debt | $ 435,806,000 | 454,688,000 | |||
Stated interest rate (as a percent) | 7.375% | ||||
PROTECTIVE LIFE CORPORATION | 8.45% Senior Notes (2009), due 2039 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | $ 232,928,000 | 246,926,000 | |||
Total debt | $ 357,046,000 | 381,934,000 | |||
Stated interest rate (as a percent) | 8.45% | ||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Redemption of subordinated debt | $ 21,600,000 | 82,700,000 | |||
Par value of extinguished debt | 14,000,000 | 53,100,000 | |||
Pre-tax gain on extinguishment | $ 2,000,000 | 9,800,000 | |||
PROTECTIVE LIFE CORPORATION | 6.25% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Stated interest rate (as a percent) | 6.25% | 6.25% | |||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Amount of debt issued | $ 287,500,000 | ||||
PROTECTIVE LIFE CORPORATION | 6.00% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Stated interest rate (as a percent) | 6.00% | 6.00% | |||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Amount of debt issued | $ 150,000,000 | ||||
PROTECTIVE LIFE CORPORATION | 5.35% Subordinated Debentures (2017), due 2052 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Stated interest rate (as a percent) | 5.35% | ||||
PROTECTIVE LIFE CORPORATION | 6.125% Subordinated Debentures (2004), due 2034, callable 2009 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Stated interest rate (as a percent) | 8.45% | ||||
PROTECTIVE LIFE CORPORATION | 2015 Credit Facility | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Line of credit, maximum borrowing capacity | $ 1,000,000,000 | ||||
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,250,000,000 | ||||
Base of floating rate interest rate payments | LIBOR | ||||
Facility fee percentage | 0.125% | ||||
PROTECTIVE LIFE CORPORATION | 2015 Credit Facility | Prime Rate | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Base of floating rate interest rate payments | prime rate | ||||
PROTECTIVE LIFE CORPORATION | 2015 Credit Facility | Federal Funds Rate | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Base of floating rate interest rate payments | Federal Funds rate | ||||
Interest rate added to the base rate (as a percent) | 0.50% | ||||
PROTECTIVE LIFE CORPORATION | 2015 Credit Facility | LIBOR One-Month Rate | |||||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Base of floating rate interest rate payments | one-month LIBOR | ||||
Interest rate added to the base rate (as a percent) | 1.00% | ||||
PROTECTIVE LIFE CORPORATION | Long-term debt and subordinated debt securities | |||||
Interest Expense | |||||
Interest expense | $ 57,800,000 | $ 61,300,000 | 60,100,000 | ||
Predecessor | |||||
Interest Expense | |||||
Interest expense | $ 8,900,000 | ||||
Predecessor | PROTECTIVE LIFE CORPORATION | Long-term debt and subordinated debt securities | |||||
Interest Expense | |||||
Interest expense | $ 8,900,000 | ||||
Credit Facility | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 0 | 170,000,000 | |||
Total debt | 0 | 170,000,000 | |||
Credit Facility | PROTECTIVE LIFE CORPORATION | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 0 | 170,000,000 | |||
Total debt | 0 | 170,000,000 | |||
Subordinated debentures | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 500,000,000 | 437,500,000 | |||
Subordinated debentures | 6.25% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 0 | 287,500,000 | |||
Subordinated debentures | 6.00% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 0 | 150,000,000 | |||
Subordinated debentures | 5.35% Subordinated Debentures (2017), due 2052 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 500,000,000 | 0 | |||
Future maturities of debt, excluding notes payable to banks, and subordinated debt securities, for the next five years | |||||
Debt issuance costs | 4,800,000 | ||||
Amount of debt issued | 500,000,000 | ||||
Subordinated debentures | PROTECTIVE LIFE CORPORATION | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 500,000,000 | 437,500,000 | |||
Total subordinated debt securities | 495,289,000 | 441,202,000 | |||
Subordinated debentures | PROTECTIVE LIFE CORPORATION | 6.25% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 0 | 287,500,000 | |||
Total subordinated debt securities | 0 | 290,002,000 | |||
Subordinated debentures | PROTECTIVE LIFE CORPORATION | 6.00% Subordinated Debentures (2012), due 2042, callable 2017 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 0 | 150,000,000 | |||
Total subordinated debt securities | 0 | 151,200,000 | |||
Subordinated debentures | PROTECTIVE LIFE CORPORATION | 5.35% Subordinated Debentures (2017), due 2052 | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Outstanding Principal | 500,000,000 | 0 | |||
Total subordinated debt securities | $ 495,289,000 | $ 0 |
SCHEDULE II - CONDENSED FINA145
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Commitments and Contingencies (Details) | Jan. 15, 2016USD ($)series | Oct. 10, 2012USD ($) | Jan. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)installment | Dec. 31, 2016USD ($) | Jan. 14, 2016USD ($) | Dec. 31, 2013USD ($) | Dec. 10, 2010USD ($) |
Future minimum rental payments required under capital lease | |||||||||
Outstanding Principal | $ 2,693,691,000 | $ 2,740,691,000 | |||||||
Non-recourse funding obligations | 2,747,477,000 | 2,796,474,000 | |||||||
Non-recourse funding obligations held by affiliates | 516,400,000 | ||||||||
Amount collateralized | 1,017,749,000 | 797,721,000 | |||||||
Outstanding nonrecourse funding obligations repurchased at discount | 0 | 86,300,000 | |||||||
Additional capital provided to affiliate | $ 0 | 0 | (320,967,000) | ||||||
Financing Agreement With Golden Gate And Syndicate ff Risk Takers | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Term of debt | 18 years | ||||||||
Financing capacity under the agreement | $ 2,188,000,000 | ||||||||
Building contiguous to home office | |||||||||
Commitments and contingencies | |||||||||
Approximate price for which the company may purchase building at the end of lease term | $ 75,000,000 | ||||||||
Future minimum rental payments required under capital lease | |||||||||
2,018 | 77,219,000 | ||||||||
Predecessor | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Additional capital provided to affiliate | $ 0 | ||||||||
PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Non-recourse funding obligations held by affiliates | 516,400,000 | ||||||||
Outstanding nonrecourse funding obligations repurchased at discount | 0 | $ 86,300,000 | |||||||
PROTECTIVE LIFE CORPORATION | Financing Agreement With Golden Gate And Syndicate ff Risk Takers | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Term of debt | 18 years | ||||||||
Financing capacity under the agreement | $ 2,188,000,000 | ||||||||
PROTECTIVE LIFE CORPORATION | Building contiguous to home office | |||||||||
Commitments and contingencies | |||||||||
Approximate price for which the company may purchase building at the end of lease term | $ 75,000,000 | ||||||||
Future minimum rental payments required under capital lease | |||||||||
2,018 | $ 77,219,000 | ||||||||
Golden Gate | Non-recourse Funding Obligations Series | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding non-recourse funding obligations | $ 800,000,000 | ||||||||
Golden Gate | PROTECTIVE LIFE CORPORATION | Non-recourse Funding Obligations Series | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Number of series of non-recourse funding obligations | series | 3 | ||||||||
Outstanding non-recourse funding obligations | $ 800,000,000 | ||||||||
Extinguishment of debt | $ 800,000,000 | ||||||||
Golden Gate | PROTECTIVE LIFE CORPORATION | Series A1 Non-recourse Funding Obligation | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding non-recourse funding obligations | $ 400,000,000 | ||||||||
Stated interest rate (as a percent) | 7.375% | ||||||||
Golden Gate | PROTECTIVE LIFE CORPORATION | Series A2 Non-recourse Funding Obligation | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding non-recourse funding obligations | $ 100,000,000 | ||||||||
Stated interest rate (as a percent) | 8.00% | ||||||||
Golden Gate | PROTECTIVE LIFE CORPORATION | Series A3 Non-recourse Funding Obligation | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding non-recourse funding obligations | $ 300,000,000 | ||||||||
Stated interest rate (as a percent) | 8.45% | ||||||||
Golden Gate Captive Insurance Company | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Fixed annual rate | 4.75% | 4.75% | |||||||
Outstanding Principal | $ 2,014,000,000 | $ 2,116,000,000 | |||||||
Non-recourse funding obligations | $ 2,014,000,000 | $ 2,116,000,000 | |||||||
Golden Gate Captive Insurance Company | PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Fixed annual rate | 4.75% | ||||||||
Non-recourse funding obligations | $ 2,014,000,000 | ||||||||
Golden Gate II | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Fixed annual rate | 3.88% | 2.52% | |||||||
Outstanding non-recourse funding obligations | $ 575,000,000 | ||||||||
Outstanding Principal | 58,600,000 | $ 58,600,000 | |||||||
Non-recourse funding obligations | 49,787,000 | $ 49,983,000 | |||||||
Amount collateralized | 2,800,000 | ||||||||
Golden Gate II | PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding non-recourse funding obligations | 575,000,000 | ||||||||
Outstanding Principal | 58,600,000 | ||||||||
Expected payments under support agreement obligation | 0 | ||||||||
Amount collateralized | 2,800,000 | ||||||||
Golden Gate V and Red Mountain | PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Term of transaction | 20 years | ||||||||
Maximum financing capacity under transaction | $ 945,000,000 | ||||||||
Red Mountain | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Principal amount of note issued | 275,000,000 | 620,000,000 | |||||||
Red Mountain | PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Maximum financing capacity under transaction | 945,000,000 | ||||||||
Principal amount of note issued | $ 275,000,000 | $ 620,000,000 | |||||||
Golden Gate V | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Fixed annual rate | 5.12% | 5.12% | |||||||
Outstanding Principal | $ 620,000,000 | $ 565,000,000 | |||||||
Stated interest rate (as a percent) | 6.25% | ||||||||
Non-recourse funding obligations | $ 681,285,000 | 628,025,000 | |||||||
Future scheduled capital contributions | 121,800,000 | ||||||||
Maximum financing capacity under transaction | 945,000,000 | ||||||||
Principal amount of note issued | $ 620,000,000 | ||||||||
Golden Gate V | PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Stated interest rate (as a percent) | 6.25% | ||||||||
Expected payments under support agreement obligation | $ 0 | ||||||||
Future scheduled capital contributions | 121,800,000 | ||||||||
Maximum financing capacity under transaction | 945,000,000 | ||||||||
PLICO | PROTECTIVE LIFE CORPORATION | Letter of Credit | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding letters of credit (LOC) | 55,000,000 | ||||||||
Shades Creek Captive Insurance Company | PROTECTIVE LIFE CORPORATION | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Additional capital provided to affiliate | 120,000,000 | ||||||||
Surplus notes | Golden Gate | Steel City Notes | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Amount of debt issued | 2,188,000,000 | 2,014,000,000 | |||||||
Surplus notes | Golden Gate | PROTECTIVE LIFE CORPORATION | Steel City Notes | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Amount of debt issued | 2,188,000,000 | 2,014,000,000 | |||||||
Surplus notes | Steel City | Golden Gate Surplus Notes | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Amount of debt issued | 2,188,000,000 | ||||||||
Surplus notes | Steel City | PROTECTIVE LIFE CORPORATION | Golden Gate Surplus Notes | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Amount of debt issued | $ 2,188,000,000 | ||||||||
Letter of Credit | Golden Gate III | Third Amended and Restated Reimbursement Agreement | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Maximum amount up to which LOC will be periodically increased | 935,000,000 | ||||||||
Outstanding letters of credit (LOC) | $ 885,000,000 | ||||||||
Letter of credit term | 15 years | ||||||||
Future scheduled capital contributions | $ 70,000,000 | ||||||||
Letter of Credit | Golden Gate III | PROTECTIVE LIFE CORPORATION | Reimbursement Agreement | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Expected payments under support agreement obligation | 0 | ||||||||
Letter of Credit | Golden Gate III | PROTECTIVE LIFE CORPORATION | Third Amended and Restated Reimbursement Agreement | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Maximum amount up to which LOC will be periodically increased | $ 935,000,000 | ||||||||
Outstanding letters of credit (LOC) | $ 885,000,000 | ||||||||
Letter of credit term | 15 years | ||||||||
Future scheduled capital contributions | $ 70,000,000 | ||||||||
Number of installments for future scheduled capital contributions | installment | 2 | ||||||||
Letter of Credit | Golden Gate IV | Reimbursement Agreement | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Maximum amount up to which LOC will be periodically increased | 790,000,000 | ||||||||
Outstanding letters of credit (LOC) | $ 785,000,000 | ||||||||
Letter of credit term | 12 years | ||||||||
Maximum borrowing capacity | $ 270,000,000 | ||||||||
Letter of Credit | Golden Gate IV | PROTECTIVE LIFE CORPORATION | Reimbursement Agreement | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Expected payments under support agreement obligation | $ 0 | ||||||||
Letter of credit term | 12 years | ||||||||
Maximum borrowing capacity | $ 790,000,000 | $ 270,000,000 | |||||||
Letter of Credit | Golden Gate IV | PROTECTIVE LIFE CORPORATION | Third Amended and Restated Reimbursement Agreement | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Outstanding letters of credit (LOC) | $ 785,000,000 | ||||||||
Consolidation, Eliminations | |||||||||
Future minimum rental payments required under capital lease | |||||||||
Purchase of non recourse funding obligations, eliminated in consolidation | $ 26,400,000 |
SCHEDULE II - CONDENSED FINA146
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Shareowners' Equity (Details) | Feb. 01, 2015 |
Protective Life Corporation | Dai-ichi Life | |
Condensed Financial Statements, Captions [Line Items] | |
Percent of outstanding shares acquired | 100.00% |
SCHEDULE II - CONDENSED FINA147
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash paid during the year for: | ||||
Interest paid on debt | $ 124,829 | $ 253,708 | $ 234,928 | |
Income taxes (reduced by amounts received from affiliates under a tax sharing agreement) | (53,486) | (14,163) | 112,886 | |
Noncash investing and financing activities: | ||||
Stock-based compensation | 0 | 0 | 0 | |
PROTECTIVE LIFE CORPORATION | ||||
Cash paid during the year for: | ||||
Interest paid on debt | 75,322 | 78,944 | 95,095 | |
Income taxes (reduced by amounts received from affiliates under a tax sharing agreement) | (15,669) | (23,110) | (2,596) | |
Noncash investing and financing activities: | ||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | |
Predecessor | ||||
Cash paid during the year for: | ||||
Interest paid on debt | $ 22,802 | |||
Income taxes (reduced by amounts received from affiliates under a tax sharing agreement) | (1) | |||
Noncash investing and financing activities: | ||||
Stock-based compensation | 1,550 | |||
Predecessor | PROTECTIVE LIFE CORPORATION | ||||
Cash paid during the year for: | ||||
Interest paid on debt | 5,411 | |||
Income taxes (reduced by amounts received from affiliates under a tax sharing agreement) | (10) | |||
Noncash investing and financing activities: | ||||
Stock-based compensation | $ 1,550 |
SCHEDULE II - CONDENSED FINA148
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Derivative Financial Instruments (Details) - USD ($) $ in Millions | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest rate floor and reinsurance rate cap agreements | ||||
Combined liability for interest rate floor and reinsurance rate cap agreements | $ 91.6 | $ 48.9 | ||
Unrealized gains (losses) on interest rate floor and reinsurance rate cap agreements | $ 3.8 | $ (42.7) | $ (29.3) | |
Predecessor | ||||
Interest rate floor and reinsurance rate cap agreements | ||||
Unrealized gains (losses) on interest rate floor and reinsurance rate cap agreements | $ (15.9) |
SCHEDULE III - SUPPLEMENTARY149
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | $ 2,199,577 | $ 2,019,829 | $ 1,558,808 | $ 2,199,577 | $ 2,019,829 | |||||||
Future Policy Benefits and Claims | 30,957,592 | 30,511,085 | 29,703,897 | 30,957,592 | 30,511,085 | |||||||
Unearned Premiums | 875,405 | 848,495 | 723,536 | 875,405 | 848,495 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | 16,886,759 | 15,309,500 | 13,921,256 | 16,886,759 | 15,309,500 | |||||||
Net Premiums and Policy Fees | 516,965 | $ 529,968 | $ 525,241 | $ 544,510 | 517,089 | $ 512,315 | $ 521,343 | $ 542,468 | 1,853,072 | 2,116,684 | 2,093,215 | |
Net Investment Income | 1,632,948 | 2,051,588 | 1,942,456 | |||||||||
Benefits and Settlement Expenses | 2,539,943 | 2,957,270 | 2,880,435 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 94,056 | 78,221 | 149,064 | |||||||||
Other Operating Expenses | 676,828 | 948,244 | 860,451 | |||||||||
Premiums Written | 167,292 | 176,900 | 154,450 | |||||||||
Life Marketing | ||||||||||||
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 1,320,776 | 1,218,944 | 1,119,515 | 1,320,776 | 1,218,944 | |||||||
Future Policy Benefits and Claims | 15,438,739 | 14,595,370 | 13,869,102 | 15,438,739 | 14,595,370 | |||||||
Unearned Premiums | 107 | 119 | 135 | 107 | 119 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | 424,204 | 426,422 | 371,618 | 424,204 | 426,422 | |||||||
Net Premiums and Policy Fees | 882,171 | 1,011,911 | 972,247 | |||||||||
Net Investment Income | 446,439 | 553,999 | 525,495 | |||||||||
Benefits and Settlement Expenses | 1,109,840 | 1,319,138 | 1,267,844 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 107,811 | 120,753 | 130,708 | |||||||||
Other Operating Expenses | 165,317 | 178,792 | 177,498 | |||||||||
Premiums Written | 148 | 111 | 122 | |||||||||
Acquisitions | ||||||||||||
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 74,862 | 106,532 | (178,662) | 74,862 | 106,532 | |||||||
Future Policy Benefits and Claims | 14,323,713 | 14,693,744 | 14,508,877 | 14,323,713 | 14,693,744 | |||||||
Unearned Premiums | 2,423 | 2,734 | 3,082 | 2,423 | 2,734 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | 4,377,020 | 4,247,081 | 4,254,579 | 4,377,020 | 4,247,081 | |||||||
Net Premiums and Policy Fees | 690,741 | 785,188 | 832,083 | |||||||||
Net Investment Income | 639,422 | 752,520 | 764,571 | |||||||||
Benefits and Settlement Expenses | 1,067,482 | 1,204,084 | 1,232,141 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 2,035 | (6,939) | 8,178 | |||||||||
Other Operating Expenses | 89,960 | 110,607 | 118,056 | |||||||||
Premiums Written | 32,134 | 15,964 | 18,818 | |||||||||
Annuities | ||||||||||||
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 772,633 | 655,618 | 578,742 | 772,633 | 655,618 | |||||||
Future Policy Benefits and Claims | 1,080,629 | 1,097,973 | 1,196,131 | 1,080,629 | 1,097,973 | |||||||
Unearned Premiums | 0 | 0 | 0 | 0 | 0 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | 7,308,354 | 7,059,060 | 7,090,171 | 7,308,354 | 7,059,060 | |||||||
Net Premiums and Policy Fees | 138,146 | 152,701 | 146,458 | |||||||||
Net Investment Income | 297,114 | 321,844 | 322,608 | |||||||||
Benefits and Settlement Expenses | 226,824 | 216,629 | 214,100 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | (41,071) | (54,471) | (11,031) | |||||||||
Other Operating Expenses | 125,946 | 149,181 | 140,409 | |||||||||
Premiums Written | 0 | 0 | 0 | |||||||||
Stable Value Products | ||||||||||||
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 6,864 | 5,455 | 2,357 | 6,864 | 5,455 | |||||||
Future Policy Benefits and Claims | 0 | 0 | 0 | 0 | 0 | |||||||
Unearned Premiums | 0 | 0 | 0 | 0 | 0 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | 4,698,371 | 3,501,636 | 2,131,822 | 4,698,371 | 3,501,636 | |||||||
Net Premiums and Policy Fees | 0 | 0 | 0 | |||||||||
Net Investment Income | 78,459 | 186,576 | 107,010 | |||||||||
Benefits and Settlement Expenses | 19,348 | 74,578 | 41,736 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 43 | 2,354 | 1,176 | |||||||||
Other Operating Expenses | 2,620 | 4,407 | 3,033 | |||||||||
Premiums Written | 0 | 0 | 0 | |||||||||
Asset Protection | ||||||||||||
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 24,442 | 33,280 | 36,856 | 24,442 | 33,280 | |||||||
Future Policy Benefits and Claims | 55,847 | 60,790 | 61,291 | 55,847 | 60,790 | |||||||
Unearned Premiums | 872,600 | 844,919 | 719,516 | 872,600 | 844,919 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | 0 | 0 | 0 | 0 | 0 | |||||||
Net Premiums and Policy Fees | 128,338 | 154,166 | 128,687 | |||||||||
Net Investment Income | 17,459 | 27,325 | 22,082 | |||||||||
Benefits and Settlement Expenses | 101,881 | 126,459 | 106,668 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 25,211 | 16,524 | 20,033 | |||||||||
Other Operating Expenses | 113,974 | 160,235 | 125,957 | |||||||||
Premiums Written | 121,427 | 148,093 | 121,821 | |||||||||
Corporate and Other | ||||||||||||
Supplementary insurance information | ||||||||||||
Deferred Policy Acquisition Costs and Value of Businesses Acquired | 0 | 0 | 0 | 0 | 0 | |||||||
Future Policy Benefits and Claims | 58,664 | 63,208 | 68,496 | 58,664 | 63,208 | |||||||
Unearned Premiums | 275 | 723 | 803 | 275 | 723 | |||||||
Stable Value Products, Annuity Contracts and Other Policyholders' Funds | $ 78,810 | $ 75,301 | 73,066 | 78,810 | 75,301 | |||||||
Net Premiums and Policy Fees | 13,676 | 12,718 | 13,740 | |||||||||
Net Investment Income | 154,055 | 209,324 | 200,690 | |||||||||
Benefits and Settlement Expenses | 14,568 | 16,382 | 17,946 | |||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 27 | 0 | 0 | |||||||||
Other Operating Expenses | 179,011 | 345,022 | 295,498 | |||||||||
Premiums Written | $ 13,583 | $ 12,732 | $ 13,689 | |||||||||
Predecessor | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | $ 171,910 | |||||||||||
Net Investment Income | 175,180 | |||||||||||
Benefits and Settlement Expenses | 267,287 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,072 | |||||||||||
Other Operating Expenses | 68,368 | |||||||||||
Premiums Written | 13,663 | |||||||||||
Predecessor | Life Marketing | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | 84,926 | |||||||||||
Net Investment Income | 47,460 | |||||||||||
Benefits and Settlement Expenses | 123,179 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,813 | |||||||||||
Other Operating Expenses | 18,705 | |||||||||||
Premiums Written | 12 | |||||||||||
Predecessor | Acquisitions | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | 62,343 | |||||||||||
Net Investment Income | 71,088 | |||||||||||
Benefits and Settlement Expenses | 101,926 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 5,033 | |||||||||||
Other Operating Expenses | 9,041 | |||||||||||
Premiums Written | 2,133 | |||||||||||
Predecessor | Annuities | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | 12,473 | |||||||||||
Net Investment Income | 37,189 | |||||||||||
Benefits and Settlement Expenses | 30,613 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | (7,706) | |||||||||||
Other Operating Expenses | 9,926 | |||||||||||
Premiums Written | 0 | |||||||||||
Predecessor | Stable Value Products | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | 0 | |||||||||||
Net Investment Income | 6,888 | |||||||||||
Benefits and Settlement Expenses | 2,255 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 25 | |||||||||||
Other Operating Expenses | 79 | |||||||||||
Premiums Written | 0 | |||||||||||
Predecessor | Asset Protection | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | 10,825 | |||||||||||
Net Investment Income | 1,878 | |||||||||||
Benefits and Settlement Expenses | 7,592 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 1,820 | |||||||||||
Other Operating Expenses | 10,121 | |||||||||||
Premiums Written | 10,172 | |||||||||||
Predecessor | Corporate and Other | ||||||||||||
Supplementary insurance information | ||||||||||||
Net Premiums and Policy Fees | 1,343 | |||||||||||
Net Investment Income | 10,677 | |||||||||||
Benefits and Settlement Expenses | 1,722 | |||||||||||
Amortization of deferred policy acquisition costs and value of business acquired | 87 | |||||||||||
Other Operating Expenses | 20,496 | |||||||||||
Premiums Written | $ 1,346 |
SCHEDULE IV - REINSURANCE (Deta
SCHEDULE IV - REINSURANCE (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Life insurance in-force | ||||
Gross Amount | $ 0 | $ 727,705,256 | $ 751,512,468 | $ 739,248,680 |
Amounts ceded to other companies | 0 | (368,142,294) | (328,377,398) | (348,994,650) |
Assumed from Other Companies | 0 | 39,546,742 | 110,205,190 | 116,265,430 |
Net life insurance in-force | $ 0 | $ 399,109,704 | $ 533,340,260 | $ 506,519,460 |
Percentage of Amount Assumed to Net | 0.00% | 9.90% | 21.00% | 23.00% |
Premiums and policy fees: | ||||
Gross Amount | $ 2,674,614 | $ 3,017,685 | $ 2,929,767 | |
Ceded to Other Companies | (1,154,978) | (1,360,735) | (1,314,716) | |
Assumed from Other Companies | 333,436 | 459,734 | 478,164 | |
Net Amount | 1,853,072 | 2,116,684 | 2,093,215 | |
Life insurance | ||||
Premiums and policy fees: | ||||
Gross Amount | 2,360,643 | 2,655,846 | 2,610,682 | |
Ceded to Other Companies | (983,143) | (1,151,175) | (1,126,915) | |
Assumed from Other Companies | 308,280 | 435,113 | 454,999 | |
Net Amount | $ 1,685,780 | $ 1,939,784 | $ 1,938,766 | |
Percentage of Amount Assumed to Net | 18.30% | 22.50% | 23.50% | |
Annuity policy fees | $ 13,900 | $ 152,800 | $ 173,500 | $ 160,400 |
Accident/health insurance | ||||
Premiums and policy fees: | ||||
Gross Amount | 70,243 | 51,991 | 58,076 | |
Ceded to Other Companies | (36,871) | (33,051) | (36,935) | |
Assumed from Other Companies | 18,252 | 14,945 | 17,439 | |
Net Amount | $ 51,624 | $ 33,885 | $ 38,580 | |
Percentage of Amount Assumed to Net | 35.40% | 44.10% | 45.20% | |
Property and liability insurance | ||||
Premiums and policy fees: | ||||
Gross Amount | $ 243,728 | $ 309,848 | $ 261,009 | |
Ceded to Other Companies | (134,964) | (176,509) | (150,866) | |
Assumed from Other Companies | 6,904 | 9,676 | 5,726 | |
Net Amount | $ 115,668 | $ 143,015 | $ 115,869 | |
Percentage of Amount Assumed to Net | 6.00% | 6.80% | 4.90% | |
Predecessor | ||||
Premiums and policy fees: | ||||
Gross Amount | 230,790 | |||
Ceded to Other Companies | (89,956) | |||
Assumed from Other Companies | 31,076 | |||
Net Amount | 171,910 | |||
Predecessor | Life insurance | ||||
Premiums and policy fees: | ||||
Gross Amount | 204,185 | |||
Ceded to Other Companies | (74,539) | |||
Assumed from Other Companies | 28,601 | |||
Net Amount | $ 158,247 | |||
Percentage of Amount Assumed to Net | 18.10% | |||
Annuity policy fees | $ 13,900 | $ 160,400 | ||
Predecessor | Accident/health insurance | ||||
Premiums and policy fees: | ||||
Gross Amount | 6,846 | |||
Ceded to Other Companies | (4,621) | |||
Assumed from Other Companies | 1,809 | |||
Net Amount | $ 4,034 | |||
Percentage of Amount Assumed to Net | 44.80% | |||
Predecessor | Property and liability insurance | ||||
Premiums and policy fees: | ||||
Gross Amount | $ 19,759 | |||
Ceded to Other Companies | (10,796) | |||
Assumed from Other Companies | 666 | |||
Net Amount | $ 9,629 | |||
Percentage of Amount Assumed to Net | 6.90% |
SCHEDULE V - VALUATION AND Q151
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for losses on commercial mortgage loans - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in valuation and qualifying accounts | ||
Balance at beginning of period | $ 724 | $ 0 |
Additions, Charged to costs and expenses | (7,439) | (4,682) |
Additions, Charged to other accounts | 0 | 0 |
Deductions | 6,715 | 5,406 |
Balance at end of period | $ 0 | $ 724 |