Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 23, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | PROTECTIVE LIFE CORPORATION | |
Entity Central Index Key | 0000355429 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 1,000 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Premiums and policy fees | $ 945,883 | $ 941,868 | $ 1,876,211 | $ 1,831,034 |
Reinsurance ceded | (339,996) | (390,941) | (658,373) | (736,364) |
Net of reinsurance ceded | 605,887 | 550,927 | 1,217,838 | 1,094,670 |
Net investment income | 725,811 | 616,462 | 1,411,735 | 1,137,325 |
Realized investment gains (losses) | (48,547) | (37,337) | (38,628) | (46,877) |
Other-than-temporary impairment losses | (198) | (10) | (1,493) | (701) |
Portion recognized in other comprehensive income (before taxes) | (500) | 5 | (2,347) | (2,949) |
Net impairment losses recognized in earnings | (698) | (5) | (3,840) | (3,650) |
Other income | 136,322 | 113,861 | 245,700 | 228,272 |
Total revenues | 1,418,775 | 1,243,908 | 2,832,805 | 2,409,740 |
Benefits and expenses | ||||
Benefits and settlement expenses, net of reinsurance ceded: (three and six months 2019 - $260,358 and $515,186; three and six months 2018 - $298,016 and $645,653) | 1,003,987 | 861,548 | 1,976,753 | 1,648,350 |
Amortization of deferred policy acquisition costs and value of business acquired | 33,783 | 52,517 | 64,183 | 110,498 |
Other operating expenses, net of reinsurance ceded: (three and six months 2019 - $55,124 and $106,415; three and six months 2018 - $51,559 and $94,676) | 250,931 | 231,071 | 486,880 | 460,322 |
Total benefits and expenses | 1,288,701 | 1,145,136 | 2,527,816 | 2,219,170 |
Income before income tax | 130,074 | 98,772 | 304,989 | 190,570 |
Income tax expense | 21,963 | 17,277 | 58,594 | 34,963 |
Net income | $ 108,111 | $ 81,495 | $ 246,395 | $ 155,607 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Benefits and settlement expense, reinsurance ceded | $ 260,358 | $ 298,016 | $ 515,186 | $ 645,653 |
Other operating expenses, reinsurance ceded | $ 55,124 | $ 51,559 | $ 106,415 | $ 94,676 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 108,111 | $ 81,495 | $ 246,395 | $ 155,607 |
Other comprehensive income (loss): | ||||
Change in net unrealized gains (losses) on investments, net of income tax: (three and six months 2019 - $264,523 and $566,586; three and six months 2018 - $(113,653) and $(267,032)) | 995,112 | (427,550) | 2,131,443 | (1,005,262) |
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and six months 2019 - $(84) and $(499); three and six months 2018 - $(1,162) and $(981)) | (316) | (4,372) | (1,876) | (3,691) |
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (three and six months 2019 - $4,127 and $6,464; three and six months 2018 - $3 and $6) | 15,524 | 11 | 24,316 | 22 |
Change in accumulated (loss) gain - derivatives, net of income tax: (three and six months 2019 - $(742) and $(1,264); three and six months 2018 - $623 and $752) | (2,788) | (4,754) | ||
Change in accumulated (loss) gain - derivatives, net of income tax: (three and six months 2019 - $(742) and $(1,264); three and six months 2018 - $623 and $752) | 2,344 | 2,831 | ||
Reclassification adjustment for derivative amounts included in net income, net of income tax: (three and six months 2019 - $70 and $128; three and six months 2018 - $43 and $67) | 266 | 486 | ||
Reclassification adjustment for derivative amounts included in net income, net of income tax: (three and six months 2019 - $70 and $128; three and six months 2018 - $43 and $67) | 162 | 251 | ||
Total other comprehensive income (loss) | 1,007,798 | (429,405) | 2,149,615 | (1,005,849) |
Total comprehensive income (loss) | $ 1,115,909 | $ (347,910) | $ 2,396,010 | $ (850,242) |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in net unrealized gains (losses) on investments, income tax | $ 264,523 | $ (113,653) | $ 566,586 | $ (267,032) |
Reclassification adjustment for investment amounts included in net income, income tax | (84) | (1,162) | (499) | (981) |
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | 4,127 | 3 | 6,464 | 6 |
Change in accumulated (loss) gain - derivatives, income tax | (742) | (1,264) | ||
Change in accumulated (loss) gain - derivatives, income tax | 623 | 752 | ||
Reclassification adjustment for derivative amounts included in net income, income tax | $ 70 | $ 128 | ||
Reclassification adjustment for derivative amounts included in net income, income tax | $ 43 | $ 67 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Fixed maturities, at fair value (amortized cost: 2019 - $63,349,246; 2018 - $54,466,305) | $ 64,710,656 | $ 51,904,699 |
Fixed maturities, at amortized cost (fair value: 2019 - $2,640,827; 2018 - $2,547,210) | 2,576,216 | 2,633,474 |
Equity securities, at fair value (cost: 2019 - $622,178; 2018 - $627,087) | 629,965 | 595,884 |
Mortgage loans (related to securitizations: 2019 - $0; 2018 - $134) | 9,053,400 | 7,724,733 |
Investment real estate, net of accumulated depreciation (2019 - $315; 2018 - $251) | 6,777 | 6,816 |
Policy loans | 1,709,110 | 1,695,886 |
Other long-term investments | 934,770 | 759,354 |
Short-term investments | 1,220,840 | 807,283 |
Total investments | 80,841,734 | 66,128,129 |
Cash | 243,291 | 173,714 |
Accrued investment income | 730,149 | 634,921 |
Accounts and premiums receivable | 262,163 | 113,507 |
Reinsurance receivables | 4,558,158 | 4,764,743 |
Deferred policy acquisition costs and value of business acquired | 3,474,557 | 3,023,154 |
Goodwill | 825,511 | 825,511 |
Other intangibles, net of accumulated amortization (2019 - $225,912; 2018 - $197,583) | 616,931 | 613,431 |
Property and equipment, net of accumulated depreciation (2019 - $40,620; 2018 - $33,199) | 212,905 | 184,957 |
Other assets | 1,972,083 | 250,036 |
Assets related to separate accounts: | ||
Variable annuity | 12,790,474 | 12,288,919 |
Variable universal life | 1,073,020 | 937,732 |
Reinsurance assumed | 9,844,996 | 0 |
Total assets | 117,445,972 | 89,938,754 |
Liabilities | ||
Future policy benefits and claims | 53,470,312 | 41,901,552 |
Unearned premiums | 887,691 | 872,594 |
Total policy liabilities and accruals | 54,358,003 | 42,774,146 |
Stable value product account balances | 5,816,503 | 5,234,731 |
Annuity account balances | 14,179,277 | 13,720,081 |
Other policyholders’ funds | 1,542,296 | 1,128,379 |
Other liabilities | 3,246,982 | 2,374,112 |
Income tax payable | 67,837 | 38,547 |
Deferred income taxes | 1,177,197 | 839,316 |
Non-recourse funding obligations | 2,576,538 | 2,632,497 |
Secured financing liabilities | 126,862 | 495,307 |
Debt | 1,677,557 | 1,101,827 |
Subordinated debt | 605,494 | 605,426 |
Liabilities related to separate accounts: | ||
Variable annuity | 12,790,474 | 12,288,919 |
Variable universal life | 1,073,020 | 937,732 |
Reinsurance assumed | 9,844,996 | 0 |
Total liabilities | 109,083,036 | 84,171,020 |
Commitments and contingencies | ||
Shareowner’s equity | ||
Common Stock: 2019 and 2018 - $0.01 par value; shares authorized: 5,000; shares issued: 1,000 | 0 | 0 |
Additional paid-in-capital | 5,804,059 | 5,554,059 |
Retained earnings | 1,835,028 | 1,639,441 |
Accumulated other comprehensive income (loss): | ||
Net unrealized (losses) gains on investments, net of income tax: (2019 - $197,257; 2018 - $(368,830)) | 742,063 | (1,387,504) |
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (2019 - $410; 2018 - $(6,054)) | 1,543 | (22,773) |
Accumulated gain (loss) - derivatives, net of income tax: (2019 - $(1,136); 2018 - $(2)) | (4,275) | (7) |
Postretirement benefits liability adjustment, net of income tax: (2019 - $(4,112); 2018 - $(4,112)) | (15,482) | (15,482) |
Total shareowner’s equity | 8,362,936 | 5,767,734 |
Total liabilities and shareowner’s equity | $ 117,445,972 | $ 89,938,754 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, at fair value, amortized cost | $ 63,349,246 | $ 54,466,305 |
Fixed maturities, at amortized cost, fair value | 2,640,827 | 2,547,210 |
Equity securities, cost | 622,178 | 627,087 |
Mortgage loans, related to securitizations | 0 | 134 |
Investment real estate, net of accumulated depreciation | 315 | 251 |
Other intangibles, net of accumulated amortization | 225,912 | 197,583 |
Property and equipment, net of accumulated depreciation | $ 40,620 | $ 33,199 |
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, net of income tax | $ 197,257 | $ (368,830) |
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | 410 | (6,054) |
Accumulated gain (loss) - derivatives, income tax | (1,136) | (2) |
Postretirement benefits liability adjustment, income tax | $ (4,112) | $ (4,112) |
CONSOLIDATED CONDENSED STATEM_5
CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER'S EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In- Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2017 | $ 7,127,199 | $ 0 | $ 5,554,059 | $ 1,560,444 | $ 12,696 |
Increase (decrease) in shareowners' equity | |||||
Net income | 74,112 | 74,112 | |||
Other comprehensive income (loss) | (576,444) | (576,444) | |||
Comprehensive income (loss) | (502,332) | ||||
Dividends to parent | (140,000) | (140,000) | |||
Ending Balance at Mar. 31, 2018 | 6,392,342 | 0 | 5,554,059 | 1,412,583 | (574,300) |
Beginning Balance at Dec. 31, 2017 | 7,127,199 | 0 | 5,554,059 | 1,560,444 | 12,696 |
Increase (decrease) in shareowners' equity | |||||
Net income | 155,607 | ||||
Other comprehensive income (loss) | (1,005,849) | ||||
Comprehensive income (loss) | (850,242) | ||||
Ending Balance at Jun. 30, 2018 | 6,044,432 | 0 | 5,554,059 | 1,494,078 | (1,003,705) |
Beginning Balance at Mar. 31, 2018 | 6,392,342 | 0 | 5,554,059 | 1,412,583 | (574,300) |
Increase (decrease) in shareowners' equity | |||||
Net income | 81,495 | 81,495 | |||
Other comprehensive income (loss) | (429,405) | (429,405) | |||
Comprehensive income (loss) | (347,910) | ||||
Ending Balance at Jun. 30, 2018 | 6,044,432 | 0 | 5,554,059 | 1,494,078 | (1,003,705) |
Beginning Balance at Dec. 31, 2018 | 5,767,734 | 0 | 5,554,059 | 1,639,441 | (1,425,766) |
Increase (decrease) in shareowners' equity | |||||
Net income | 138,284 | 138,284 | |||
Other comprehensive income (loss) | 1,141,817 | 1,141,817 | |||
Comprehensive income (loss) | 1,280,101 | ||||
Ending Balance at Mar. 31, 2019 | 6,997,027 | 0 | 5,554,059 | 1,726,917 | (283,949) |
Beginning Balance at Dec. 31, 2018 | 5,767,734 | 0 | 5,554,059 | 1,639,441 | (1,425,766) |
Increase (decrease) in shareowners' equity | |||||
Net income | 246,395 | ||||
Other comprehensive income (loss) | 2,149,615 | ||||
Comprehensive income (loss) | 2,396,010 | ||||
Ending Balance at Jun. 30, 2019 | 8,362,936 | 0 | 5,804,059 | 1,835,028 | 723,849 |
Beginning Balance at Mar. 31, 2019 | 6,997,027 | 0 | 5,554,059 | 1,726,917 | (283,949) |
Increase (decrease) in shareowners' equity | |||||
Net income | 108,111 | 108,111 | |||
Other comprehensive income (loss) | 1,007,798 | 1,007,798 | |||
Comprehensive income (loss) | 1,115,909 | ||||
Capital contributions from parent | 250,000 | 250,000 | |||
Ending Balance at Jun. 30, 2019 | $ 8,362,936 | $ 0 | $ 5,804,059 | $ 1,835,028 | $ 723,849 |
CONSOLIDATED CONDENSED STATEM_6
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 246,395 | $ 155,607 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Realized investment (gains) losses | 42,468 | 50,527 |
Amortization of DAC and VOBA | 64,183 | 110,498 |
Capitalization of DAC | (237,622) | (223,686) |
Depreciation and amortization expense | 37,428 | 33,785 |
Deferred income tax | (219,558) | 3,065 |
Accrued income tax | 29,290 | 103,092 |
Interest credited to universal life and investment products | 593,993 | 389,009 |
Policy fees assessed on universal life and investment products | (829,697) | (748,474) |
Change in reinsurance receivables | 206,585 | 111,242 |
Change in accrued investment income and other receivables | 41,677 | (34,198) |
Change in policy liabilities and other policyholders’ funds of traditional life and health products | (352,132) | (246,397) |
Trading securities: | ||
Maturities and principal reductions of investments | 54,501 | 117,994 |
Sale of investments | 254,573 | 118,370 |
Cost of investments acquired | (204,187) | (206,741) |
Other net change in trading securities | (43,145) | 13,791 |
Amortization of premiums and accretion of discounts on investments and mortgage loans | 147,485 | 150,402 |
Change in other liabilities | 241,895 | 37,809 |
Other, net | (107,562) | 8,256 |
Net cash used in operating activities | (33,430) | (56,049) |
Cash flows from investing activities | ||
Maturities and principal reductions of investments, available-for-sale | 923,494 | 592,514 |
Sale of investments, available-for-sale | 2,033,618 | 1,417,304 |
Cost of investments acquired, available-for-sale | (3,246,486) | (2,126,627) |
Change in investments, held-to-maturity | 55,000 | 39,000 |
Mortgage loans: | ||
New lendings | (476,310) | (811,103) |
Repayments | 518,663 | 494,729 |
Change in investment real estate, net | 178 | 615 |
Change in policy loans, net | 30,778 | 25,361 |
Change in other long-term investments, net | 62,301 | (225,809) |
Change in short-term investments, net | (362,608) | (101,662) |
Net unsettled security transactions | (263,560) | 141,791 |
Purchase of property, equipment, and intangibles | (17,262) | (6,956) |
Cash received from reinsurance transaction | 0 | 20,669 |
Payment for business acquisition, net of cash acquired | (731,457) | 0 |
Net cash used in investing activities | (1,473,651) | (540,174) |
Cash flows from financing activities | ||
Borrowings under line of credit arrangement, debt, and subordinated debt | 600,000 | 655,000 |
Principal payments on line of credit arrangement, debt, and subordinated debt | (9,325) | (348,684) |
Issuance (repayment) of non-recourse funding obligations | (55,000) | (77,000) |
Secured financing liabilities | (368,445) | (913,210) |
Dividends to shareowner | 0 | (140,000) |
Capital contributions from parent | 250,000 | 0 |
Deposits to universal life and investment contracts | 3,309,880 | 2,959,133 |
Withdrawals from universal life and investment contracts | (2,149,967) | (1,600,400) |
Other financing activities, net | (485) | (194) |
Net cash provided by financing activities | 1,576,658 | 534,645 |
Change in cash | 69,577 | (61,578) |
Cash at beginning of period | 173,714 | 252,310 |
Cash at end of period | $ 243,291 | $ 190,732 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
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 (the “Merger”). Prior to February 1, 2015 , the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, 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”) for the interim periods presented herein. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the results for the interim periods presented. Operating results for the three and six months ended June 30, 2019 , are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019 . The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . 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. Certain reclassifications have been made in previously reported financial statements and accompanying notes to make prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity. Entities Included The consolidated condensed financial statements in this report 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. During the second quarter of 2019, the Company recorded an adjustment related to prior periods to correct an error pertaining to the deferred policy acquisition costs (“DAC”) tax reimbursements paid under reinsurance agreements the Company entered in previous years. The adjustment resulted in an $8.96 million increase to accounts and premiums receivable on the Company’s consolidated balance sheet, with a corresponding increase to income. The Company concluded that the adjustment was not quantitatively or qualitatively material to previously reported periods or the current interim period. As a result, this adjustment was recorded by the Company within the consolidated financial statements as of and for the period ended June 30, 2019. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies For a full description of significant accounting policies, see Note 2 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . There were no significant changes to the Company’s accounting policies during the six months ended June 30, 2019 . Accounting Pronouncements Recently Adopted Accounting Standards Update (“ASU” or “Update”) No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change relates to the accounting model used by lessees. The Update requires 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 are measured at the present value of the minimum lease payments less any upfront payments or fees. The amendments in the Update became effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company recorded a cumulative effect adjustment as of the date of adoption, January 1, 2019, establishing a right of use asset and lease liability of $21.5 million on its consolidated condensed balance sheet reflected in the property and equipment and other liabilities line items, respectively. 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 previous guidance, under which premiums are amortized to the maturity date of the security. The amendments became effective for annual and interim periods beginning after December 15, 2018. The Company recorded a cumulative effect adjustment as of the adoption date, January 1, 2019, resulting in a $50.8 million redu ction to retained earnings, net of income tax. 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 became effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. At adoption, January 1, 2019, this standard did not have an impact on the Company’s operations or financial results. Accounting Pronouncements Not Yet Adopted 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, along with related amendments in ASU No. 2018-19 - Codification Improvements to Topic 326, Financial Instruments-Credit Losses, are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. The Company has completed its scoping and gap analysis with respect to the implementation of the new standard. Based on the results of this analysis, the Company’s implementation efforts are primarily focused on the application of the CECL model to a) its portfolio of commercial mortgage loans and b) amounts recoverable from reinsurers. The Company is currently engaged in a project to implement new processes with respect to the measurement and recognition of the CECL allowance for these assets, along with the additional disclosures required by the Update. The impact of this standard on the Company’s financial results cannot yet be reasonably estimated. ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally this Update requires new disclosures including liability rollforwards and information about significant inputs, judgments, assumptions, and methods used in the measurement. The amendments in this Update are currently effective for annual and interim periods beginning after December 31, 2020 with early adoption permitted. However, in July 2019, the Financial Accountings Standards Board (the “FASB”) voted to expose an Accounting Standards Update for public comment which would extend the implementation deadline for public business entities by one year to periods beginning after December 15, 2021. The Company is currently reviewing its policies, processes, and applicable systems to determine the impact this standard will have on its operations and financial results. |
SIGNIFICANT TRANSACTIONS
SIGNIFICANT TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
SIGNIFICANT TRANSACTIONS | SIGNIFICANT TRANSACTIONS The Lincoln National Life Insurance Company On May 1, 2018, The Lincoln National Life Insurance Company (“Lincoln Life”) completed its previously announced acquisition (the “Closing”) of Liberty Mutual Group Inc.’s (“Liberty Mutual”) 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”). In connection with the Closing and pursuant to the Master Transaction Agreement, dated January 18, 2018 (the “Master Transaction Agreement”), previously reported in our Current Report on Form 8-K filed on January 23, 2018, PLICO and Protective Life and Annuity Insurance Company (“PLAIC”), a wholly owned subsidiary of PLICO, entered into reinsurance agreements (the “Liberty Reinsurance Agreements”) and related ancillary documents (including administrative services agreements and transition services agreements) providing for the reinsurance and administration of the Life Business. Pursuant to the Liberty Reinsurance Agreements, Liberty ceded to PLICO and PLAIC the insurance policies related to the Life Business on a 100% coinsurance basis. The aggregate ceding commission for the reinsurance of the Life Business was $422.4 million , which is the purchase price and remains subject to adjustment. All policies issued in states other than New York were ceded to PLICO under a reinsurance agreement between Liberty and PLICO, and all policies issued in New York were ceded to PLAIC under a reinsurance agreement between Liberty and PLAIC. The aggregate statutory reserves of Liberty ceded to PLICO and PLAIC as of the closing of the Transaction were approximately $13.2 billion , which amount was based on initial estimates. The final reserve amount determined, as adjusted during the measurement period, is $13.7 billion . In addition, there are certain pending items which remain subject to adjustment in accordance with the Master Transaction Agreement and could result in a gain in future periods. Pursuant to the terms of the Liberty Reinsurance Agreements, each of PLICO and PLAIC are required to maintain assets in trust for the benefit of Liberty to secure their respective obligations to Liberty under the Liberty Reinsurance Agreements. The trust accounts were initially funded by each of PLICO and PLAIC principally with the investment assets that were received from Liberty. Additionally, PLICO and PLAIC have each agreed to provide, on behalf of Liberty, administration and policyholder servicing of the Life Business reinsured by it pursuant to administrative services agreements between Liberty and each of PLICO and PLAIC. The terms of the Liberty Reinsurance Agreements resulted in an acquisition of the Life Business by the Company in accordance with ASC Topic 805, Business Combinations . The following table details the purchase consideration and final allocation of assets acquired and liabilities from the Life Business reinsurance transaction as of the transaction date. Fair Value as of May 1, 2018 (Dollars In Thousands) ASSETS Fixed maturities $ 12,588,512 Mortgage loans 435,405 Policy loans 131,489 Total investments 13,155,406 Cash 35,179 Accrued investment income 152,030 Reinsurance receivables 272 Value of business acquired 379,717 Other assets 916 Total assets 13,723,520 LIABILITIES Future policy benefits and claims $ 11,751,895 Unearned premiums — Total policy liabilities and accruals 11,751,895 Annuity account balances 1,864,141 Other policyholders’ funds 41,936 Other liabilities 65,548 Total liabilities 13,723,520 NET ASSETS ACQUIRED $ — The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Life Business were completed as of January 1, 2017. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated: Unaudited For The Three Months Ended June 30, 2018 For The Six Months Ended June 30, 2018 (Dollars In Thousands) Revenue $ 1,317,159 $ 2,733,479 Net income $ 88,883 $ 201,751 Great-West Life & Annuity Insurance Company On January 23, 2019, PLICO entered into a Master Transaction Agreement (the “GWL&A Master Transaction Agreement”) with Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (“GWL&A of NY”), The Canada Life Assurance Company (“CLAC”) and The Great-West Life Assurance Company (“GWL” and, together with GWL&A, GWL&A of NY and CLAC, the “Sellers”), pursuant to which PLICO will acquire via reinsurance (the “Transaction”) substantially all of the Sellers’ individual life insurance and annuity business (the “Individual Life Business”). On June 3, 2019, PLICO and PLAIC completed the Transaction (the “Closing”). Pursuant to the GWL&A Master Transaction Agreement, previously reported in our Current Report on Form 8-K filed on January 25, 2019, PLICO and PLAIC entered into reinsurance agreements (the “GWL&A Reinsurance Agreements”) and related ancillary documents at the Closing. On the terms and subject to the conditions of the GWL&A Reinsurance Agreements, the Sellers ceded to PLICO and PLAIC, effective as of the closing of the Transaction, substantially all of the insurance policies related to the Individual Life Business on a 100% indemnity basis net of reinsurance recoveries. The aggregate ceding commission for the reinsurance of the Individual Life Business paid at the Closing was $767.1 million , which amount is subject to adjustment in accordance with the GWL&A Master Transaction Agreement. All policies issued in states other than New York were ceded to PLICO under reinsurance agreements between the applicable Seller and the Company, and all policies issued in New York were ceded to PLAIC under a reinsurance agreement between GWL&A of NY and PLAIC. The aggregate statutory reserves of the Sellers ceded to PLICO and PLAIC as of the Closing were approximately $20.4 billion , which amount was based on initial estimates and is subject to adjustment following the Closing. To support its obligations under the GWL&A Reinsurance Agreements, PLICO established trust accounts for the benefit of GWL&A, CLAC and GWL, and PLAIC established a trust account for the benefit of GWL&A of NY. The Sellers retained a block of participating policies, which will be administered by the Company. As of the purchase date, the Company has recorded an estimate in the amount of $51.9 million related to contingent consideration. The final ceding commission is subject to adjustment based on these amounts. These amounts are accrued within other liabilities in the Company’s consolidated condensed balance sheet. The contingent consideration is comprised of a holdback provision and a post-closing sales adjustment. The holdback amount is related to the performance of certain blocks of business for a specified period of time after the close of the transaction. The range of amounts payable to Great West under this provision is $0 - $40 million . The Company’s best estimate as of June 30, 2019 was $40 million . Great West is also entitled to a payment for certain post-closing sales occurring between June 1, 2019 and December 31, 2019. At this time, a range for this payment cannot be estimated and the Company established a liability of $11.9 million on the transaction date, which represents the Company's best estimate of the present value of future payments as of the transaction date. The GWL&A Master Transaction Agreement and other transaction documents contain certain customary representations and warranties made by each of the parties, and certain customary covenants regarding the Sellers and the Individual Life Business, and provide for indemnification, among other things, for breaches of those representations, warranties, and covenants. The terms of the GWL&A Reinsurance Agreements resulted in an acquisition of the Individual Life Business by the Company in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . The following table details the preliminary allocation of assets acquired and liabilities assumed from the Individual Life Business reinsurance transaction as of the transaction date. The Company has not completed the process of determining the fair value of assets acquired and liabilities assumed, but will do so in the twelve month measurement period subsequent to the transaction date. These estimates are provisional subject to adjustment. Any adjustments to these fair value estimates will be reflected, retroactively, as of the date of the acquisition, and may result in adjustments to the value of business acquired. Fair Value as of June 1, 2019 (Dollars In Thousands) ASSETS Fixed maturities $ 8,697,533 Mortgage loans 1,386,228 Policy loans 44,002 Other long-term investments 1,579 Total investments 10,129,342 Cash 35,607 Accrued investment income 101,306 Accounts and premiums receivable 62 Premium due and deferred 1,657 Value of business acquired 491,493 Other intangibles 28,600 Other assets 1,537,848 Assets related to separate accounts 9,583,217 Total assets 21,909,132 LIABILITIES Future policy benefits and claims $ 10,993,716 Annuity account balances 253,748 Other policyholders’ funds 220,117 Other liabilities 39,370 Liabilities related to separate accounts 9,583,217 Total liabilities 21,090,168 NET ASSETS ACQUIRED $ 818,964 Assets related to separate accounts and liabilities related to separate accounts represent amounts receivable and payable for variable annuity and variable universal life products reinsured on a modified co-insurance basis. The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Individual Life Business were completed as of January 1, 2018. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated: Unaudited Unaudited For The Three Months Ended June 30, For The Six Months Ended June 30, 2019 2018 2019 2018 (Dollars In Thousands) Revenue $ 1,548,668 $ 1,461,832 $ 3,203,698 $ 2,828,369 Net income $ 124,161 $ 122,977 $ 263,490 $ 182,034 The amount of revenue and income before income tax of the Individual Life Business since the transaction date, June 1, 2019, included in the consolidated statements of income for the six months ended June 30, 2019, amounted to $77.7 million and $7.7 million . The Company incurred approximately $12.2 million of non-recurring transaction costs for the six months ended June 30, 2019. Intangible assets recognized by the Company included the following (excluding goodwill): Estimated Fair Value on Acquisition Date Estimated Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 15,000 18 Technology 13,600 10 Total intangible assets $ 28,600 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) Remainder of 2019 $ 1,279 2020 2,193 2021 2,193 2022 2,193 2023 2,193 Based on the balance recorded as of June 1, 2019, the expected amortization of VOBA for the next five years is as follows: Year Amount (Dollars In Thousands) Remainder of 2019 $ (4,966 ) 2020 (12,292 ) 2021 (6,807 ) 2022 (1,010 ) 2023 3,259 VOBA is calculated at a product level and can either be positive or negative depending on the underlying fair values of the associated product lines. VOBA is amortized in accordance with ASC 944-805-35-1, which requires that the amortization should be on a basis consistent with the related reinsurance liability. As such, the net amortization related to a specific transaction in a given year can be either positive or negative as amortization patterns differ between the product lines. |
MONY CLOSED BLOCK OF BUSINESS
MONY CLOSED BLOCK OF BUSINESS | 6 Months Ended |
Jun. 30, 2019 | |
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 accumulated other comprehensive income (loss) “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 June 30, 2019 , and December 31, 2018 , is as follows: As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,611,917 $ 5,679,732 Policyholder dividend obligation 173,147 — Other liabilities 11,043 22,505 Total closed block liabilities 5,796,107 5,702,237 Closed block assets Fixed maturities, available-for-sale, at fair value $ 4,583,161 $ 4,257,437 Mortgage loans on real estate 74,290 75,838 Policy loans 658,971 672,213 Cash 55,960 116,225 Other assets 107,306 136,388 Total closed block assets 5,479,688 5,258,101 Excess of reported closed block liabilities over closed block assets 316,419 444,136 Portion of above representing accumulated other comprehensive income: Net unrealized investment gains (losses) net of policyholder dividend obligation: $47,972 and $(141,128); and net of income tax: $(10,074) and $61,676 — (120,528 ) Future earnings to be recognized from closed block assets and closed block liabilities $ 316,419 $ 323,608 Reconciliation of the policyholder dividend obligation is as follows: For The 2019 2018 (Dollars In Thousands) Policyholder dividend obligation, beginning of period $ — $ 160,712 Applicable to net revenue (losses) (15,953 ) (19,536 ) Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation 189,100 (141,176 ) Policyholder dividend obligation, end of period $ 173,147 $ — Closed Block revenues and expenses were as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Revenues Premiums and other income $ 40,105 $ 42,465 $ 77,549 $ 82,077 Net investment income 51,663 50,872 102,791 101,415 Net investment gains (losses) 43 263 (411 ) 26 Total revenues 91,811 93,600 179,929 183,518 Benefits and other deductions Benefits and settlement expenses 87,213 87,940 165,879 167,892 Other operating expenses 247 337 606 20 Total benefits and other deductions 87,460 88,277 166,485 167,912 Net revenues before income taxes 4,351 5,323 13,444 15,606 Income tax expense 913 1,118 2,823 3,277 Net revenues $ 3,438 $ 4,205 $ 10,621 $ 12,329 |
INVESTMENT OPERATIONS
INVESTMENT OPERATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT OPERATIONS | INVESTMENT OPERATIONS Net realized gains (losses) are summarized as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Fixed maturities $ 1,098 $ 5,539 $ 6,215 $ 8,322 Equity gains and losses 7,696 (1,044 ) 38,413 (9,830 ) Modco trading portfolio 89,571 (52,817 ) 184,473 (137,525 ) Other investments 1,137 (1,280 ) (9 ) 1,832 Realized gains (losses) - all other investments 99,502 (49,602 ) 229,092 (137,201 ) Realized gains (losses) - derivatives (1) (148,049 ) 12,265 (267,720 ) 90,324 Realized investment gains (losses) $ (48,547 ) $ (37,337 ) $ (38,628 ) $ (46,877 ) Net impairments losses recognized in earnings $ (698 ) $ (5 ) $ (3,840 ) $ (3,650 ) (1) See Note 7, Derivative Financial Instruments Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities and short-term investments) are as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Gross realized gains $ 6,812 $ 10,137 $ 14,682 $ 18,187 Gross realized losses: Impairment losses $ (698 ) $ (5 ) $ (3,840 ) $ (3,650 ) Other realized losses $ (5,714 ) $ (4,598 ) $ (8,467 ) $ (9,865 ) 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. For The For The 2019 2018 2019 2018 (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 491,121 $ 466,153 $ 1,140,012 $ 608,286 Gains realized $ 6,812 $ 10,137 $ 14,682 $ 18,187 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 160,125 $ 201,191 $ 338,129 $ 258,175 Losses realized $ (5,714 ) $ (4,598 ) $ (8,467 ) $ (9,865 ) (1) The Company made the decision to exit these holdings in conjunction with its overall asset/liability management process. The chart below summarizes the realized gains (losses) on equity securities sold during the period and equity securities still held at the reporting date. For The For The 2019 2018 2019 2018 (Dollars In Thousands) Net gains (losses) recognized during the period on equity securities $ 7,696 $ (1,044 ) $ 38,413 $ (9,830 ) Less: net gains (losses) recognized on equity securities sold during the period $ 193 $ (680 ) $ 253 $ (2,381 ) Gains (losses) recognized during the period on equity securities still held $ 7,503 $ (364 ) $ 38,160 $ (7,449 ) The amortized cost and fair value of the Company’s investments classified as available-for-sale are as follows: As of June 30, 2019 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 4,482,547 $ 132,602 $ (8,901 ) $ 4,606,248 Commercial mortgage-backed securities 2,648,121 51,634 (3,894 ) 2,695,861 Other asset-backed securities 1,848,061 22,063 (8,526 ) 1,861,598 (3 ) U.S. government-related securities 1,304,382 5,179 (9,004 ) 1,300,557 Other government-related securities 555,767 31,550 (4,168 ) 583,149 States, municipals, and political subdivisions 4,652,897 183,920 (5,851 ) 4,830,966 1,193 Corporate securities 45,267,764 1,549,526 (572,173 ) 46,245,117 764 Redeemable preferred stocks 87,459 1,211 (3,758 ) 84,912 60,846,998 1,977,685 (616,275 ) 62,208,408 1,954 Short-term investments 1,138,931 — — 1,138,931 — $ 61,985,929 $ 1,977,685 $ (616,275 ) $ 63,347,339 $ 1,954 As of December 31, 2018 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 3,650,539 $ 23,247 $ (62,196 ) $ 3,611,590 $ (18 ) Commercial mortgage-backed securities 2,349,274 3,911 (58,101 ) 2,295,084 — Other asset-backed securities 1,410,059 17,232 (35,398 ) 1,391,893 — U.S. government-related securities 1,683,432 1,795 (45,722 ) 1,639,505 — Other government-related securities 545,522 4,292 (33,850 ) 515,964 — States, municipals, and political subdivisions 3,682,037 25,706 (118,902 ) 3,588,841 876 Corporate securities 38,634,888 112,992 (2,385,052 ) 36,362,828 (29,685 ) Redeemable preferred stocks 94,362 — (11,560 ) 82,802 — 52,050,113 189,175 (2,750,781 ) 49,488,507 (28,827 ) Short-term investments 776,357 — — 776,357 — $ 52,826,470 $ 189,175 $ (2,750,781 ) $ 50,264,864 $ (28,827 ) (1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above. The Company holds certain investments pursuant to certain modified coinsurance (“Modco”) arrangements. The fixed maturities held as part of these arrangements are classified as trading securities. The fair value of the investments held pursuant to these Modco arrangements are as follows: As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 203,455 $ 241,836 Commercial mortgage-backed securities 204,445 188,925 Other asset-backed securities 147,997 159,907 U.S. government-related securities 51,080 59,794 Other government-related securities 24,342 44,207 States, municipals, and political subdivisions 293,560 286,413 Corporate securities 1,565,561 1,423,833 Redeemable preferred stocks 11,808 11,277 2,502,248 2,416,192 Equity securities 8,488 9,892 Short-term investments 81,909 30,926 $ 2,592,645 $ 2,457,010 The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of June 30, 2019 , 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) Due in one year or less $ 1,440,860 $ 1,438,699 $ — $ — Due after one year through five years 10,103,874 10,229,353 — — Due after five years through ten years 13,210,907 13,623,029 — — Due after ten years 36,091,357 36,917,327 2,576,216 2,640,827 $ 60,846,998 $ 62,208,408 $ 2,576,216 $ 2,640,827 The chart below summarizes the Company’s other-than-temporary impairments of investments. All of the impairments were related to fixed maturities. For The For The 2019 2018 2019 2018 Fixed Maturities Fixed Maturities Fixed Maturities Fixed Maturities (Dollars In Thousands) Other-than-temporary impairments $ (198 ) $ (10 ) $ (1,493 ) $ (701 ) Non-credit impairment losses recorded in other comprehensive income (loss) (500 ) 5 (2,347 ) (2,949 ) Net impairment losses recognized in earnings $ (698 ) $ (5 ) $ (3,840 ) $ (3,650 ) 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 three and six months ended June 30, 2019 and 2018 . 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): For The For The 2019 2018 2019 2018 (Dollars In Thousands) Beginning balance $ 27,215 $ 2,235 $ 24,868 $ 3,268 Additions for newly impaired securities — — 751 — Additions for previously impaired securities 660 2 3,007 2 Reductions for previously impaired securities due to a change in expected cash flows (8,202 ) — (8,834 ) — Reductions for previously impaired securities that were sold in the current period (7,175 ) (2,235 ) (7,294 ) (3,268 ) Ending balance $ 12,498 $ 2 $ 12,498 $ 2 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 June 30, 2019 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 118,932 $ (427 ) $ 576,350 $ (8,474 ) $ 695,282 $ (8,901 ) Commercial mortgage-backed securities 3,609 (6 ) 574,967 (3,888 ) 578,576 (3,894 ) Other asset-backed securities 409,753 (5,931 ) 134,156 (2,595 ) 543,909 (8,526 ) U.S. government-related securities 32,421 (314 ) 902,249 (8,690 ) 934,670 (9,004 ) Other government-related securities 5,509 (198 ) 93,790 (3,970 ) 99,299 (4,168 ) States, municipals, and political subdivisions 13,242 (13 ) 145,668 (5,838 ) 158,910 (5,851 ) Corporate securities 1,244,536 (52,639 ) 10,318,328 (519,534 ) 11,562,864 (572,173 ) Redeemable preferred stocks — — 17,180 (3,758 ) 17,180 (3,758 ) $ 1,828,002 $ (59,528 ) $ 12,762,688 $ (556,747 ) $ 14,590,690 $ (616,275 ) Residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”) had gross unrealized losses greater than twelve months of $8.5 million and $3.9 million as of June 30, 2019 . 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 had a gross unrealized loss greater than twelve months of $2.6 million as of June 30, 2019 . This category predominately includes student loan backed auction rate securities (“ARS”) whose underlying collateral 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 $8.7 million and $4.0 million , respectively, as of June 30, 2019 . These declines were related to changes in interest rates. The states, municipals, and political subdivisions category had gross unrealized losses greater than twelve months of $5.8 million as of June 30, 2019 . The aggregate decline in fair 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. The corporate securities category had gross unrealized losses greater than twelve months of $519.5 million as of June 30, 2019 . The aggregate decline in fair 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, interest rate movement, and other pertinent information. As of June 30, 2019 , the Company had a total of 1,322 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, 2018 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 1,485,009 $ (31,302 ) $ 804,364 $ (30,894 ) $ 2,289,373 $ (62,196 ) Commercial mortgage-backed securities 422,438 (7,442 ) 1,429,384 (50,659 ) 1,851,822 (58,101 ) Other asset-backed securities 687,271 (30,963 ) 148,871 (4,435 ) 836,142 (35,398 ) U.S. government-related securities 130,290 (4,668 ) 1,085,654 (41,054 ) 1,215,944 (45,722 ) Other government-related securities 226,201 (15,267 ) 131,569 (18,583 ) 357,770 (33,850 ) States, municipals, and political subdivisions 1,004,262 (27,180 ) 1,129,152 (91,722 ) 2,133,414 (118,902 ) Corporate securities 18,326,331 (970,553 ) 12,859,732 (1,414,499 ) 31,186,063 (2,385,052 ) Redeemable preferred stocks 41,147 (4,467 ) 41,655 (7,093 ) 82,802 (11,560 ) $ 22,322,949 $ (1,091,842 ) $ 17,630,381 $ (1,658,939 ) $ 39,953,330 $ (2,750,781 ) As of June 30, 2019 , the Company had securities in its available-for-sale portfolio which were rated below investment grade of $1.6 billion and had an amortized cost of $1.7 billion . In addition, included in the Company’s trading portfolio, the Company held $119.9 million of securities which were rated below investment grade. Approximately $275.6 million of the available-for-sale and trading securities that were below investment grade were not publicly traded. The change in unrealized gains (losses), net of income tax, on fixed maturities, classified as available-for-sale is summarized as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Fixed maturities $ 1,541,352 $ (585,527 ) $ 3,099,183 $ (1,505,298 ) The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of June 30, 2019 and December 31, 2018 , are as follows: As of June 30, 2019 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain, LLC $ 773,216 $ — $ (14,249 ) $ 758,967 $ — Steel City, LLC 1,803,000 78,860 — 1,881,860 — $ 2,576,216 $ 78,860 $ (14,249 ) $ 2,640,827 $ — As of December 31, 2018 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain, LLC $ 750,474 $ — $ (81,657 ) $ 668,817 $ — Steel City, LLC 1,883,000 — (4,607 ) 1,878,393 — $ 2,633,474 $ — $ (86,264 ) $ 2,547,210 $ — During the three and six months ended June 30, 2019 and 2018 , the Company recorded no other-than-temporary impairments on held-to-maturity securities. The Company’s held-to-maturity securities had $78.9 million of gross unrecognized holding gains and $14.2 million of gross unrecognized holding losses as of June 30, 2019 . 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 variable interest entities (“VIEs”). 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 $86.3 million of gross unrecognized holding losses as of December 31, 2018 . 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. 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 June 30, 2019 and December 31, 2018 , 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 10, Debt and Other Obligations . The Company had 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 June 30, 2019 , no payments have been made or required related to this guarantee. Steel City, a wholly owned subsidiary of the Company, entered into a financing agreement on January 15, 2016 involving Golden Gate Captive Insurance Company ("Golden Gate"), 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 10, 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 June 30, 2019 , no payments have been made or required related to this guarantee. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
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; and 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 estimates 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 June 30, 2019 : Measurement Category Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities 4 $ — $ 4,606,248 $ — $ 4,606,248 Commercial mortgage-backed securities 4 — 2,686,495 9,366 2,695,861 Other asset-backed securities 4 — 1,443,288 418,310 1,861,598 U.S. government-related securities 4 884,053 416,504 — 1,300,557 Other government-related securities 4 — 583,149 — 583,149 States, municipals, and political subdivisions 4 — 4,830,966 — 4,830,966 Corporate securities 4 — 44,916,626 1,328,491 46,245,117 Redeemable preferred stocks 4 67,732 17,180 — 84,912 Total fixed maturity securities - available-for-sale 951,785 59,500,456 1,756,167 62,208,408 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 203,455 — 203,455 Commercial mortgage-backed securities 3 — 204,445 — 204,445 Other asset-backed securities 3 — 85,817 62,180 147,997 U.S. government-related securities 3 25,929 25,151 — 51,080 Other government-related securities 3 — 24,342 — 24,342 States, municipals, and political subdivisions 3 — 293,560 — 293,560 Corporate securities 3 — 1,560,267 5,294 1,565,561 Redeemable preferred stocks 3 11,808 — — 11,808 Total fixed maturity securities - trading 37,737 2,397,037 67,474 2,502,248 Total fixed maturity securities 989,522 61,897,493 1,823,641 64,710,656 Equity securities 3 560,302 36 69,627 629,965 Other long-term investments (1) 3 & 4 65,231 467,642 110,923 643,796 Short-term investments 3 1,153,978 66,862 — 1,220,840 Total investments 2,769,033 62,432,033 2,004,191 67,205,257 Cash 3 240,157 — — 240,157 Other assets 3 34,335 — — 34,335 Assets related to separate accounts Variable annuity 3 12,790,474 — — 12,790,474 Variable universal life 3 1,073,020 — — 1,073,020 Total assets measured at fair value on a recurring basis $ 16,907,019 $ 62,432,033 $ 2,004,191 $ 81,343,243 Liabilities: Annuity account balances (2) 3 $ — $ — $ 72,585 $ 72,585 Other liabilities (1) 3 & 4 23,552 198,564 1,097,077 1,319,193 Total liabilities measured at fair value on a recurring basis $ 23,552 $ 198,564 $ 1,169,662 $ 1,391,778 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. (3) Fair Value through Net Income (4) Fair Value through Other Comprehensive Income (Loss) 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, 2018 : Measurement Category Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities 4 $ — $ 3,611,590 $ — $ 3,611,590 Commercial mortgage-backed securities 4 — 2,295,084 — 2,295,084 Other asset-backed securities 4 — 970,251 421,642 1,391,893 U.S. government-related securities 4 1,010,485 629,020 — 1,639,505 Other government-related securities 4 — 515,964 — 515,964 State, municipals, and political subdivisions 4 — 3,588,841 — 3,588,841 Corporate securities 4 — 35,724,552 638,276 36,362,828 Redeemable preferred stocks 4 65,536 17,266 — 82,802 Total fixed maturity securities - available-for-sale 1,076,021 47,352,568 1,059,918 49,488,507 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 241,836 — 241,836 Commercial mortgage-backed securities 3 — 188,925 — 188,925 Other asset-backed securities 3 — 133,851 26,056 159,907 U.S. government-related securities 3 27,453 32,341 — 59,794 Other government-related securities 3 — 44,207 — 44,207 State, municipals, and political subdivisions 3 — 286,413 — 286,413 Corporate securities 3 — 1,417,591 6,242 1,423,833 Redeemable preferred stocks 3 11,277 — — 11,277 Total fixed maturity securities - trading 38,730 2,345,164 32,298 2,416,192 Total fixed maturity securities 1,114,751 49,697,732 1,092,216 51,904,699 Equity securities 3 531,523 36 64,325 595,884 Other long-term investments (1) 3&4 83,047 180,438 112,344 375,829 Short-term investments 3 730,067 77,216 — 807,283 Total investments 2,459,388 49,955,422 1,268,885 53,683,695 Cash 3 173,714 — — 173,714 Other assets 3 29,257 — — 29,257 Assets related to separate accounts Variable annuity 3 12,288,919 — — 12,288,919 Variable universal life 3 937,732 — — 937,732 Total assets measured at fair value on a recurring basis $ 15,889,010 $ 49,955,422 $ 1,268,885 $ 67,113,317 Liabilities: Annuity account balances (2) 3 $ — $ — $ 76,119 $ 76,119 Other liabilities (1) 3&4 56,018 69,501 629,942 755,461 Total liabilities measured at fair value on a recurring basis $ 56,018 $ 69,501 $ 706,061 $ 831,580 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. (3) Fair Value through Net Income (4) Fair Value through Other Comprehensive Income (Loss) 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 91.8% 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, when available the Company obtains two quotes per security. Where multiple broker quotes are obtained, the Company reviews the quotes and selects the quote that provides the best estimate of the price a market participant would pay for these specific assets in an arm’s length transaction. 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. The Company’s assessment incorporates various metrics (yield curves, credit spreads, prepayment rates, etc.) along with other information available to the Company from both internal and external sources 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 six months ended June 30, 2019 . 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 June 30, 2019 , the Company held $9.2 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 June 30, 2019 , the Company held $489.9 million of Level 3 ABS, which included $427.7 million of other asset-backed securities classified as available-for-sale and $62.2 million of other asset-backed securities classified as trading. These securities 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 3 measurements due to the nature of the transaction. Corporate Securities, Redeemable Preferred Stocks, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government-Related Securities As of June 30, 2019 , the Company classified approximately $52.7 billion of corporate securities, redeemable preferred stocks, 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 June 30, 2019 , the Company classified approximately $1.3 billion 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 June 30, 2019 , the Company held approximately $69.7 million of equity securities classified as Level 2 and Level 3. Of this total, $68.5 million represents Federal Home Loan Bank (“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 June 30, 2019 , 100.0% 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 are 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 condensed balance sheet. The changes in fair value are recorded in earnings as Realized investment gains (losses) . Refer to Note 7, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses. The fair value of the guaranteed living withdrawal benefits (“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 87.0% - 100.0% based on company experience. 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. Policyholder assumptions are reviewed on an annual basis. The balance of the fixed indexed annuity (“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 2015 Ruark ALB mortality table, with attained age factors varying from 87.0% - 100.0% based on company experience. 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, with attained age factors varying from 37% - 577% based on company experience. 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 the agreements where the Company has ceded certain blocks of policies are designated as “trading securities”; therefore changes in their fair value are also reported in earnings. As of June 30, 2019 , the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $3.5 billion and the statutory unrealized gain (loss) of the securities of $210.5 million . As a result, changes in the fair value of the embedded derivatives where the Company has ceded certain blocks of policies 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 June 30, 2019 is $72.6 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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 418,178 Liquidation Liquidation value $95.39 - $97.00 ($96.48) Discounted cash flow Liquidity premium 0.11% - 1.50% (0.73%) Paydown rate 10.84% - 12.88% (11.98%) Corporate securities 1,328,490 Discounted cash flow Spread over treasury 0.87% - 4.10% (1.75%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 338,648 Actuarial cash flow model Mortality 87% to 100% of Ruark 2015 ALB table Lapse Ruark Predictive Model Utilization 99%. 10% of policies have a one- time over-utilization of 400% Nonperformance risk 0.17% - 0.88% Embedded derivative - FIA 300,364 Actuarial cash flow model Expenses $145 per policy Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 87% to 100% of Ruark 2015 ALB table Lapse 1.0% - 30.0%, depending on duration/surrender charge period Dynamically adjusted for WB moneyness and projected market rates vs credited rates Nonperformance risk 0.17% - 0.88% Embedded derivative - IUL 136,660 Actuarial cash flow model Mortality 37% - 577% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.17% - 0.88% (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 for which book value approximates fair value. The Company has considered all reasonably available quantitative inputs as of June 30, 2019 , but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $77.9 million of financial instruments being classified as Level 3 as of June 30, 2019 . Of the $77.9 million , $71.7 million are other asset-backed securities, $5.3 million are corporate securities, and $0.9 million are equity securities. In certain cases, the Company has determined that book value materially approximates fair value. As of June 30, 2019 , the Company held $68.7 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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 421,458 Liquidation Liquidation value $85.75 - $99.99 ($95.36) Discounted Cash Flow Liquidity premium 0.02% - 1.25% (0.64%) Paydown rate 10.96% - 13.11% (12.03%) Corporate securities 631,068 Discounted cash flow Spread over treasury 0.84% - 3.0% (1.84%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 184,071 Actuarial cash flow model Mortality 87% to 100% of Ruark 2015 ALB table Lapse Ruark Predictive Model Utilization 99%. 10% of policies have a one- time over-utilization of 400% Nonperformance risk 0.21% - 1.16% Embedded derivative - FIA 217,288 Actuarial cash flow model Expenses $145 per policy Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 87% to 100% of Ruark 2015 ALB table Lapse 1.0% - 30.0%, depending on duration/surrender charge period Nonperformance risk 0.21% - 1.16% Embedded derivative - IUL 90,231 Actuarial cash flow model Mortality 37% - 577% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.21% - 1.16% (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 for which book value approximates fair value. The Company had considered all reasonably available quantitative inputs as of December 31, 2018 , but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $40.4 million of financial instruments being classified as Level 3 as of December 31, 2018 . Of the $40.4 million , $26.2 million are other asset-backed securities, $13.5 million are corporate securities, and $0.7 million are equity securities. In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2018 , the Company held $63.6 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 values 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 embed |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
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 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 variable annuity (“VA”) contracts, fixed indexed annuities, and indexed universal life contracts: • 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. It is the Company's policy not to offset assets and liabilities associated with open derivative contracts. However, the Chicago Mercantile Exchange (“CME”) rules characterize variation margin transfers as settlement payments, as opposed to adjustments to collateral. As a result, derivative assets and liabilities associated with centrally cleared derivatives for which the CME serves as the central clearing party are presented as if these derivatives had been settled as of the reporting date. 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 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 flows paid on the note. • To hedge a floating rate note, the Company entered into an interest rate swap to exchange the floating rate on the note for a fixed rate in order to hedge the interest rate risk associated with the note. The cash flows received on the swap are identical to the cash flow variability 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 markets and overall volatility. • The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative as it is, 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 as it is 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 and funds withheld 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 and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives. The following table sets forth realized investments gains and losses for the periods shown: Realized investment gains (losses) - derivative financial instruments For The For The 2019 2018 2019 2018 (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures $ (11,280 ) $ 1,552 $ (17,302 ) $ (15,340 ) Equity futures 2,559 (10,864 ) 32,297 (17,292 ) Currency futures (397 ) 12,063 1,847 4,480 Equity options (21,702 ) (38,216 ) (93,397 ) (26,200 ) Interest rate swaptions — — — (14 ) Interest rate swaps 117,934 (26,149 ) 192,795 (89,859 ) Total return swaps (8,545 ) (10,055 ) (48,572 ) (3,565 ) Embedded derivative - GLWB (134,692 ) 35,554 (154,318 ) 91,846 Total derivatives related to VA contracts (56,123 ) (36,115 ) (86,650 ) (55,944 ) Derivatives related to FIA contracts: Embedded derivative (24,819 ) (4,927 ) (63,633 ) 6,403 Equity futures 431 (167 ) 2 (328 ) Equity options 13,191 7,398 55,241 2,729 Total derivatives related to FIA contracts (11,197 ) 2,304 (8,390 ) 8,804 Derivatives related to IUL contracts: Embedded derivative (11,286 ) (1,226 ) (24,656 ) 8,658 Equity futures 85 — 256 136 Equity options 2,606 2,086 8,786 836 Total derivatives related to IUL contracts (8,595 ) 860 (15,614 ) 9,630 Embedded derivative - Modco reinsurance treaties (70,679 ) 45,183 (155,677 ) 127,841 Other derivatives (1,455 ) 33 (1,389 ) (7 ) Total realized gains (losses) - derivatives $ (148,049 ) $ 12,265 $ (267,720 ) $ 90,324 The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship. Gain (Loss) on Derivatives in Cash Flow Hedging 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 Realized investment expenses gains (losses) (Dollars In Thousands) For The Three Months Ended June 30, 2019 Foreign currency swaps $ (1,733 ) $ (188 ) $ — Interest rate swaps (1,796 ) (148 ) — Total $ (3,529 ) $ (336 ) $ — For The Six Months Ended June 30, 2019 Foreign currency swaps $ (3,626 ) $ (394 ) $ — Interest rate swaps (2,391 ) (220 ) — Total $ (6,017 ) $ (614 ) $ — For The Three Months Ended June 30, 2018 Foreign currency swaps $ 2,967 $ (205 ) $ — Total $ 2,967 $ (205 ) $ — For The Six Months Ended June 30, 2018 Foreign currency swaps $ 3,582 $ (318 ) $ — Total $ 3,582 $ (318 ) $ — Based on expected cash flows of the underlying hedged items, the Company expects to reclassify $2.9 million out of accumulated other comprehensive income (loss) into earnings during the next twelve months. The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below: As of June 30, 2019 December 31, 2018 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 2,188,000 $ 90,599 $ 1,515,500 $ 28,501 Total return swaps 132,044 1,065 138,070 3,971 Embedded derivative - Modco reinsurance treaties 1,248,634 13,738 585,294 7,072 Embedded derivative - GLWB 3,153,016 97,185 3,984,070 105,272 Interest rate futures 393,518 8,703 286,208 10,302 Equity futures 101,064 639 12,633 483 Equity options 6,176,649 431,694 5,624,081 220,092 Other 157 173 157 136 $ 13,393,082 $ 643,796 $ 12,146,013 $ 375,829 Other liabilities Cash flow hedges: Interest rate swaps $ 350,000 $ — $ 350,000 $ — Foreign currency swaps 117,178 2,309 117,178 904 Derivatives not designated as hedging instruments: Interest rate swaps 70,000 — 775,000 11,367 Total return swaps 361,607 1,112 768,177 23,054 Embedded derivative - Modco reinsurance treaties 2,287,547 188,853 1,795,287 32,828 Embedded derivative - GLWB 6,943,853 471,199 6,282,712 289,343 Embedded derivative - FIA 2,739,208 298,721 2,576,033 217,288 Embedded derivative - IUL 262,828 136,660 233,550 90,231 Interest rate futures 901,165 16,464 863,706 20,100 Equity futures 225,125 2,967 659,357 33,753 Currency futures 256,513 1,105 202,747 2,163 Equity options 4,008,015 198,159 4,199,687 34,178 Other 13,109 1,644 3,288 252 $ 18,536,148 $ 1,319,193 $ 18,826,722 $ 755,461 |
OFFSETTING OF ASSETS AND LIABIL
OFFSETTING OF ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2019 | |
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 10, Debt and Other Obligations for details of the Company’s repurchase agreement programs. Collateral received includes both cash and non-cash collateral. Cash collateral received by the Company is recorded on the consolidated condensed balance sheet as “cash”, with a corresponding amount recorded in “other liabilities” to represent the Company’s obligation to return the collateral. Non-cash collateral received by the Company is not recognized on the consolidated condensed balance sheet unless the Company exercises its right to sell or re-pledge the underlying asset. As of June 30, 2019 , the fair value of non-cash collateral received was $30.4 million . As of December 31, 2018 , the fair value of non-cash collateral received was $45.0 million . The tables below present the derivative instruments by assets and liabilities for the Company as of June 30, 2019 : Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 532,700 $ — $ 532,700 $ 210,744 $ 214,952 $ 107,004 Total derivatives, subject to a master netting arrangement or similar arrangement 532,700 — 532,700 210,744 214,952 107,004 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 13,738 — 13,738 — — 13,738 Embedded derivative - GLWB 97,185 — 97,185 — — 97,185 Other 173 — 173 — — 173 Total derivatives, not subject to a master netting arrangement or similar arrangement 111,096 — 111,096 — — 111,096 Total derivatives 643,796 — 643,796 210,744 214,952 218,100 Total Assets $ 643,796 $ — $ 643,796 $ 210,744 $ 214,952 $ 218,100 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 222,116 $ — $ 222,116 $ 210,744 $ 11,215 $ 157 Total derivatives, subject to a master netting arrangement or similar arrangement 222,116 — 222,116 210,744 11,215 157 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 188,853 — 188,853 — — 188,853 Embedded derivative - GLWB 471,199 — 471,199 — — 471,199 Embedded derivative - FIA 298,721 — 298,721 — — 298,721 Embedded derivative - IUL 136,660 — 136,660 — — 136,660 Other 1,644 — 1,644 — — 1,644 Total derivatives, not subject to a master netting arrangement or similar arrangement 1,097,077 — 1,097,077 — — 1,097,077 Total derivatives 1,319,193 — 1,319,193 210,744 11,215 1,097,234 Repurchase agreements (1) 60,000 — 60,000 — — 60,000 Total Liabilities $ 1,379,193 $ — $ 1,379,193 $ 210,744 $ 11,215 $ 1,157,234 (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, 2018 : Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 263,349 $ — $ 263,349 $ 70,322 $ 99,199 $ 93,828 Total derivatives, subject to a master netting arrangement or similar arrangement 263,349 — 263,349 70,322 99,199 93,828 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 7,072 — 7,072 — — 7,072 Embedded derivative - GLWB 105,272 — 105,272 — — 105,272 Other 136 — 136 — — 136 Total derivatives, not subject to a master netting arrangement or similar arrangement 112,480 — 112,480 — — 112,480 Total derivatives 375,829 — 375,829 70,322 99,199 206,308 Total Assets $ 375,829 $ — $ 375,829 $ 70,322 $ 99,199 $ 206,308 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 125,519 $ — $ 125,519 $ 70,322 $ 47,856 $ 7,341 Total derivatives, subject to a master netting arrangement or similar arrangement 125,519 — 125,519 70,322 47,856 7,341 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 32,828 — 32,828 — — 32,828 Embedded derivative - GLWB 289,343 — 289,343 — — 289,343 Embedded derivative - FIA 217,288 — 217,288 — — 217,288 Embedded derivative - IUL 90,231 — 90,231 — — 90,231 Other 252 — 252 — — 252 Total derivatives, not subject to a master netting arrangement or similar arrangement 629,942 — 629,942 — — 629,942 Total derivatives 755,461 — 755,461 70,322 47,856 637,283 Repurchase agreements (1) 418,090 — 418,090 — — 418,090 Total Liabilities $ 1,173,551 $ — $ 1,173,551 $ 70,322 $ 47,856 $ 1,055,373 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
MORTGAGE LOANS
MORTGAGE LOANS | 6 Months Ended |
Jun. 30, 2019 | |
Mortgage Loans [Abstract] | |
MORTGAGE LOANS | MORTGAGE LOANS Mortgage Loans The Company invests a portion of its investment portfolio in commercial mortgage loans. As of June 30, 2019 , the Company’s mortgage loan holdings were approximately $9.1 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. Certain of the mortgage loans have call options that occur within the next 10 years. However, if interest rates were to significantly increase, the Company may be unable to exercise the call options on its existing mortgage loans commensurate with the significantly increased market rates. As of June 30, 2019 , assuming the loans are called at their next call dates, approximately $70.3 million of principal would become due for the remainder of 2019 , $789.6 million in 2020 through 2024 and $60.0 million in 2025 through 2029 . 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 June 30, 2019 and December 31, 2018 , approximately $669.5 million and $700.6 million , respectively, of the Company’s total mortgage loans principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three and six months ended June 30, 2019 and 2018 , the Company recognized $12.0 million and $14.2 million , and $5.1 million and $12.4 million , respectively, of participating mortgage loan income. As of June 30, 2019 , $0.8 million of the Company’s 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 six months ended June 30, 2019 , the Company recognized three troubled debt restructurings as a result of granting concessions to borrowers which included loan terms unavailable from other lenders. During the three and six months ended June 30, 2019 , the Company did not recognize any mortgage loans that were foreclosed and were converted to real estate properties. The Company did not identify any loans whose principal was permanently impaired during the three and six months ended June 30, 2019 . As of June 30, 2019 and December 31, 2018 , the Company had an allowance for mortgage loan credit losses of $2.5 million and $1.3 million , respectively. 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. As of June 30, 2019 and December 31, 2018 , the Company had an allowance for mortgage loan credit losses of $2.5 million and $1.3 million , respectively, which is shown in the chart below. As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Beginning balance $ 1,296 $ — Charge offs (350 ) — Recoveries — (209 ) Provision 1,535 1,505 Ending balance $ 2,481 $ 1,296 It is the Company’s policy to cease to carry accrued 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. The carrying value of the delinquent loans is shown in the following chart. Greater 30-59 Days 60-89 Days than 90 Days Total As of June 30, 2019 Delinquent Delinquent Delinquent Delinquent (Dollars In Thousands) Commercial mortgage loans $ 8,405 $ — $ 83 $ 8,488 Number of delinquent commercial mortgage loans 2 — 1 3 As of December 31, 2018 Commercial mortgage loans $ 1,044 $ — $ 1,234 $ 2,278 Number of delinquent commercial mortgage loans 4 — 1 5 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 90 days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis. The following table includes the recorded investment, unpaid principal balance, related allowance, average recorded investment, interest income recognized, and cash basis interest income of commercial loan portfolio as of June 30, 2019 and December 31, 2018: Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Cash Basis Interest Income (Dollars In Thousands) As of June 30, 2019 Commercial mortgage loans: With no related allowance recorded $ 83 $ 83 $ — $ 83 $ — $ — With an allowance recorded $ 9,445 $ 9,305 $ 2,481 $ 3,148 $ 184 $ 217 As of December 31, 2018 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded $ 5,684 $ 5,309 $ 1,296 $ 1,895 $ 267 $ 293 Mortgage loans that were modified in a troubled debt restructuring as of June 30, 2019 and December 31, 2018 were as follows: Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars In Thousands) As of June 30, 2019 Troubled debt restructuring: Commercial mortgage loans 1 $ 1,114 $ 759 As of December 31, 2018 Troubled debt restructuring: Commercial mortgage loans 1 $ 2,688 $ 1,742 |
DEBT AND OTHER OBLIGATIONS
DEBT AND OTHER OBLIGATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER OBLIGATIONS | DEBT AND OTHER OBLIGATIONS Debt and Subordinated Debt Debt and subordinated debt are summarized as follows: As of June 30, 2019 December 31, 2018 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Credit Facility $ — $ — $ — $ — Term Loan Credit Agreement 600,000 599,627 — — Capital lease obligation 2,560 2,560 1,319 1,319 7.375% Senior Notes (2009), due 2019 400,000 406,627 400,000 416,469 8.45% Senior Notes (2009), due 2039 180,719 273,029 190,044 288,547 4.30% Senior Notes (2018), due 2028 400,000 395,714 400,000 395,492 $ 1,583,279 $ 1,677,557 $ 991,363 $ 1,101,827 Subordinated debt (year of issue): 5.35% Subordinated Debentures (2017), due 2052 $ 500,000 $ 495,494 $ 500,000 $ 495,426 3.55% Subordinated Funding Obligations (2018), due 2038 55,000 55,000 55,000 55,000 3.55% Subordinated Funding Obligations (2018), due 2038 55,000 55,000 55,000 55,000 $ 610,000 $ 605,494 $ 610,000 $ 605,426 During the six months ended June 30, 2019 , the Company repurchased and subsequently extinguished $14.1 million (par value - $9.3 million ) of the Company’s 8.45% Senior Notes due 2039 . These repurchases resulted in a $1.1 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated condensed statements of income. During 2019, the Company entered into a $600.0 million Term Loan Credit Agreement, due 2024 . The loan is classified as debt on the Company’s balance sheet and is carried net of the associated deferred issuance expenses of $0.4 million . The loan pays interest at a rate equal to the one-month LIBOR plus 100 bps . The Company used the net loan proceeds to assist with funding the GWL&A transaction. During 2018 , PLICO issued $110.0 million of Subordinated Funding Obligations at a rate of 3.55% due 2038 . These obligations are non-recourse to the Company. During 2018 , the Company issued $400.0 million of its Senior Notes at a rate of 4.30% , due 2028 . These notes were issued net of a discount of $1.0 million . These notes are carried on the Company’s balance sheet net of the discount and the associated deferred issuance expenses of $3.7 million . The Company used the net proceeds from the offering for general corporate purposes, including the repayment of amounts outstanding under our Credit Facility. Under a revolving line of credit arrangement that was in effect until May 3, 2018 (the “2015 Credit Facility”), the Company had the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion . The Company had the right in certain circumstances to request that the commitment under the 2015 Credit Facility be increased up to a maximum principal amount of $1.25 billion . Balances outstanding under the 2015 Credit Facility accrued 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 2015 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 2015 Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The 2015 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 2015 Credit Facility. The maturity date of the 2015 Credit Facility was February 2, 2020 . On May 3, 2018 , the Company amended the 2015 Credit Facility (as amended, the "Credit Facility"). Under the Credit Facility, 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 $1.5 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 May 3, 2023 . The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of June 30, 2019 . There was no outstanding balance as of June 30, 2019 . Non-Recourse Funding Obligations Non-recourse funding obligations outstanding as of June 30, 2019 , on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year-to-Date (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 1,803,000 $ 1,803,000 2039 4.75 % Golden Gate II Captive Insurance Company 20,600 17,729 2052 5.60 % Golden Gate V Vermont Captive Insurance Company (2)(3) 695,000 753,503 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,306 2024 6.19 % Total $ 2,519,691 $ 2,576,538 (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, 2018 , 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) $ 1,883,000 $ 1,883,000 2039 4.75 % Golden Gate II Captive Insurance Company 20,600 17,703 2052 4.99 % Golden Gate V Vermont Captive Insurance Company (2)(3) 670,000 729,454 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,340 2024 6.19 % Total $ 2,574,691 $ 2,632,497 (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 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 June 30, 2019 , the fair value of securities pledged under the repurchase program was $62.6 million , and the repurchase obligation of $60.0 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 246 basis points). During the six months ended June 30, 2019 , the maximum balance outstanding at any one point in time related to these programs was $540.0 million . The average daily balance was $104.8 million (at an average borrowing rate of 247 basis points) during the six months ended June 30, 2019 . As of December 31, 2018 , the fair value of securities pledged under the repurchase program was $451.9 million , and the repurchase obligation of $418.1 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 245 basis points). During 2018 , the maximum balance outstanding at any one point in time related to these programs was $885.0 million . The average daily balance was $511.4 million (at an average borrowing rate of 184 basis points) during the year ended December 31, 2018 . 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 fair value of the loaned securities to be separately maintained. The loaned securities’ fair value is monitored on a daily basis. As of June 30, 2019 , securities with a fair value of $75.1 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 June 30, 2019 , the fair value of the collateral related to this program was $66.9 million and the Company has an obligation to return $66.9 million of collateral to the securities borrowers. The following table provides the amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of June 30, 2019 and December 31, 2018 : Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of June 30, 2019 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 62,611 $ — $ — $ — $ 62,611 Total repurchase agreements and repurchase-to-maturity transactions 62,611 — — — 62,611 Securities lending transactions Corporate securities 57,941 — — — 57,941 Equity securities 14,642 — — — 14,642 Other government related securities 2,488 — — — 2,488 Total securities lending transactions 75,071 — — — 75,071 Total securities $ 137,682 $ — $ — $ — $ 137,682 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, 2018 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 433,182 $ 18,713 $ — $ — $ 451,895 Total repurchase agreements and repurchase-to-maturity transactions $ 433,182 $ 18,713 $ — $ — $ 451,895 Securities lending transactions Fixed maturity securities $ 71,285 $ — $ — $ — $ 71,285 Equity securities 891 — — — 891 Total securities lending transactions 72,176 — — — 72,176 Total securities $ 505,358 $ 18,713 $ — $ — $ 524,071 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
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 $10.0 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 19 cities (excluding the home office building), as well as various office equipment. Most leases have terms ranging from 1 to 10 . Leases with an initial term of 12 months or less are not recorded on the consolidated condensed balance sheet. The Company accounts for lease components separately from non-lease components (e.g., common area maintenance). Certain of the Company’s lease agreements include options to renew at its discretion. Management has concluded that the Company is not reasonably certain to elect any of these renewal options. The Company will use the interest rates received on its funding agreement backed notes as the collateralized discount rate when calculating the present value of remaining lease payments when the rate implicit in the lease is unavailable. Additionally, the Company previously leased 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 in December 2018, the Company purchased the building for approximately $75.0 million . The building is recorded in property and equipment on the consolidated condensed balance sheet. 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 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. Advance Trust & Life Escrow Services, LTA, as Securities Intermediary of Life Partners Position Holder Trust v. Protective Life Insurance Company, Case No. 2:18-CV-01290, is a putative class action that was filed on August 13, 2018 in the United States District Court for the Northern District of Alabama. Plaintiff alleges that PLICO required policyholders to pay unlawful and excessive cost of insurance charges. Plaintiff seeks to represent all owners of universal life and variable universal life policies issued or administered by PLICO or its predecessors that provide that cost of insurance rates are to be determined based on expectations of future mortality experience. The plaintiff seeks class certification, compensatory damages, pre-judgment and post-judgment interest, costs, and other unspecified relief. The Company is vigorously defending this matter and cannot predict the outcome of or reasonably estimate the possible loss or range of loss that might result from this litigation. Scottish Re (U.S.), Inc. ("SRUS") was placed in rehabilitation on March 6, 2019 by the State of Delaware. Under the related order, the Insurance Commissioner of the State of Delaware has been appointed the receiver of SRUS and provided with authority to conduct and continue the business of SRUS in the interest of its cedents, creditors, and stockholder. The order was accompanied by an injunction requiring the continued payment of reinsurance premiums to SRUS and temporarily prohibiting cedents, including the Company, from offsetting premiums payable against receivables from SRUS. On June 20, 2019, the Delaware Court of Chancery entered an order approving a Revised Offset Plan, which allows cedents, including the Company, to offset premiums under certain circumstances. As of June 30, 2019 , the Company had outstanding claims receivable from SRUS of $20.5 million , and other exposures associated with reinsurance receivables of approximately $102.3 million and statutory reserve credit of approximately $118.2 million . The Company continues to monitor SRUS and the actions of the receiver through discussions with legal counsel and review of publicly available information. However, management does not have access to current information about the assets or capital position of SRUS. Additionally, it is unclear how the rehabilitation process will proceed or whether or to what extent the ultimate outcome of the rehabilitation process will be unfavorable to the Company. The Company considered whether the accrual of a loss contingency under FASB ASC Topic 450, Contingencies, was appropriate with respect to amounts receivable from SRUS for ceded claims and reserves as of June 30, 2019 . Due to the lack of sufficient information to support an analysis of SRUS's financial condition as of June 30, 2019 and uncertainty regarding whether and to what extent the ultimate outcome of the rehabilitation process will result in an outcome unfavorable to the Company, management concluded that any possible impairment of its reinsurance receivables balance could not be reasonably estimated. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Components of the net periodic benefit cost for the three and six months ended June 30, 2019 and 2018 , are as follows: For The For The 2019 2018 2019 2018 Qualified Nonqualified Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Nonqualified (Dollars In Thousands) Service cost — benefits earned during the period $ 3,114 $ 285 $ 3,441 $ 387 $ 6,228 $ 570 $ 6,882 $ 774 Interest cost on projected benefit obligation 2,778 371 2,397 359 5,556 742 4,794 718 Expected return on plan assets (4,463 ) — (4,026 ) — (8,926 ) — (8,052 ) — Amortization of actuarial loss — 74 — 265 — 148 — 530 Preliminary net periodic benefit cost 1,429 730 1,812 1,011 2,858 1,460 3,624 2,022 Settlement/curtailment expense — — — — — — — Total net periodic benefit costs $ 1,429 $ 730 $ 1,812 $ 1,011 $ 2,858 $ 1,460 $ 3,624 $ 2,022 During the six months ended June 30, 2019 , the Company did not make a contribution to its defined benefit pension plan. The Company will make contributions in future periods as necessary to at least satisfy minimum funding requirements, to maintain an adjusted funding target attainment percentage (“AFTAP”) of at least 80% and to avoid certain Pension Benefit Guaranty Corporation (“PBGC”) reporting triggers. The Company may also make additional discretionary contributions in excess of the contribution amounts established by the current funding policy. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [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 accumulated other comprehensive income (loss) (“AOCI”) as of June 30, 2019 and December 31, 2018 . Changes in Accumulated Other Comprehensive Income (Loss) by Component 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) Balance, December 31, 2017 $ 25,874 $ 747 $ (13,925 ) $ 12,696 Other comprehensive income (loss) before reclassifications (1,420,499 ) (1,884 ) (3,546 ) (1,425,929 ) Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (20,751 ) — — (20,751 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 15,651 1,130 1,989 18,770 Cumulative effect adjustments (10,552 ) — — (10,552 ) Balance, December 31, 2018 $ (1,410,277 ) $ (7 ) $ (15,482 ) $ (1,425,766 ) Other comprehensive income (loss) before reclassifications 2,131,443 (4,754 ) — 2,126,689 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings 24,316 — — 24,316 Amounts reclassified from accumulated other comprehensive income (loss) (1) (1,876 ) 486 — (1,390 ) Cumulative effect adjustments — — — — Balance, June 30, 2019 $ 743,606 $ (4,275 ) $ (15,482 ) $ 723,849 (1) See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details. (2) As of December 31, 2018 and June 30, 2019, net unrealized losses reported in AOCI were offset by $613.4 million and $(343.1) 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. The following tables summarize the reclassifications amounts out of AOCI for the three and six months ended June 30, 2019 and 2018 . Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Condensed Consolidated Gains/(losses) in net income: Statements of Income For The For The 2019 2018 2019 2018 (Dollars In Thousands) Derivative instruments Benefits and settlement expenses, net of reinsurance ceded (1) $ (336 ) $ (205 ) $ (614 ) $ (318 ) Tax (expense) benefit 70 43 128 67 $ (266 ) $ (162 ) $ (486 ) $ (251 ) Unrealized gains and losses on available-for-sale securities Realized investment gains (losses): All other investments $ 1,098 $ 5,539 $ 6,215 $ 8,322 Net impairment losses recognized in earnings (698 ) (5 ) (3,840 ) (3,650 ) Tax (expense) benefit (84 ) (1,162 ) (499 ) (981 ) $ 316 $ 4,372 $ 1,876 $ 3,691 (1) See Note 7, Derivative Financial Instruments for additional information. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company used its respective estimates for its annual 2019 and 2018 incomes in computing its effective income tax rates for the three and six months ended June 30, 2019 and 2018 . The effective tax rates for the three and six months ended June 30, 2019 and 2018 , were 16.9% and 19.2% and 17.5% and 18.4% , respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Balance, beginning of period $ 7,134 $ 11,353 Additions for tax positions of the current year — — Additions for tax positions of prior years — — Reductions of tax positions of prior years: Changes in judgment — (4,219 ) Settlements during the period (5,343 ) — Lapses of applicable statute of limitations — — Balance, end of period $ 1,791 $ 7,134 Included in the end of period balance above, as of June 30, 2019 and December 31, 2018 there were no unrecognized tax benefits for which the ultimate deductibility is certain but for which there is uncertainty about the timing of such deductions. As of December 31, 2017, there were approximately $0.7 million of such unrecognized tax benefits. 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 $1.8 million , $7.1 million , and $11.4 million for the period ending June 30, 2019 and the years ending December 31, 2018 and 2017, 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 $0.6 million detriment, $0.04 million detriment, and a $2.4 million benefit for the period ending June 30, 2019 and the years ending December 31, 2018 and 2017, respectively (before taking into account the related income tax benefit associated with such an expense). In April, 2019, the IRS proposed favorable and unfavorable adjustments to the Company’s 2014 through 2016 reported taxable income. The Company agreed to these adjustments. The resulting taxes have not yet been settled but settlement will not materially impact the Company or its effective tax rate. This agreement with the IRS is the primary cause for the reductions of unrecognized tax benefits shown in the chart above. The Company believes that in the next twelve months, none of the unrecognized tax benefits will be reduced. Statute of limitations for years before 2017 are still open but, in general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2017. Due to IRS adjustments to the Company's pre-2014 taxable income, the Company has amended 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. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 6 Months Ended |
Jun. 30, 2019 | |
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 universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”), bank-owned life insurance (“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 marketing 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, however, some recent acquisitions have included ongoing new business activities. Ongoing new product sales written by the Company from these acquisitions are included in the Life Marketing and/or Annuities segment. As a result, 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 guaranteed investment contracts (“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, guaranteed asset protection (“GAP”) products, credit life and disability insurance, and other specialized ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft, and powersports. GAP products are designed to cover the difference between the scheduled 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, value of business acquired (“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. 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. There were no significant intersegment transactions during the three and six months ended June 30, 2019 and 2018 . The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Revenues Life Marketing $ 441,559 $ 414,954 $ 898,899 $ 849,870 Acquisitions 667,031 509,639 1,276,973 888,733 Annuities 100,407 133,177 239,624 283,890 Stable Value Products 67,585 45,748 127,164 99,616 Asset Protection 76,014 77,814 152,212 154,189 Corporate and Other 66,179 62,576 137,933 133,442 Total revenues $ 1,418,775 $ 1,243,908 $ 2,832,805 $ 2,409,740 Pre-tax Adjusted Operating Income (Loss) Life Marketing $ (462 ) $ (7,737 ) $ 772 $ (25,586 ) Acquisitions 69,810 59,038 144,722 114,558 Annuities 45,271 55,934 99,487 96,465 Stable Value Products 28,106 19,992 50,345 49,072 Asset Protection 9,211 7,166 18,954 13,384 Corporate and Other (20,445 ) (17,797 ) (40,119 ) (38,476 ) Pre-tax adjusted operating income 131,491 116,596 274,161 209,417 Realized (losses) gains on investments and derivatives (1,417 ) (17,824 ) 30,828 (18,847 ) Income before income tax 130,074 98,772 304,989 190,570 Income tax expense (21,963 ) (17,277 ) (58,594 ) (34,963 ) Net income $ 108,111 $ 81,495 $ 246,395 $ 155,607 Pre-tax adjusted operating income $ 131,491 $ 116,596 $ 274,161 $ 209,417 Adjusted operating income tax (expense) benefit (22,261 ) (20,877 ) (52,120 ) (38,920 ) After-tax adjusted operating income 109,230 95,719 222,041 170,497 Realized (losses) gains on investments and derivatives (1,417 ) (17,824 ) 30,828 (18,847 ) Income tax benefit (expense) on adjustments 298 3,600 (6,474 ) 3,957 Net income $ 108,111 $ 81,495 $ 246,395 $ 155,607 Realized investment (losses) gains: Derivative financial instruments $ (148,049 ) $ 12,265 $ (267,720 ) $ 90,324 All other investments 99,502 (49,602 ) 229,092 (137,201 ) Net impairment losses recognized in earnings (698 ) (5 ) (3,840 ) (3,650 ) Less: related amortization (1) (26,840 ) 1,763 (31,201 ) 10,919 Less: VA GLWB economic cost (20,988 ) (21,281 ) (42,095 ) (42,599 ) Realized (losses) gains on investments and derivatives $ (1,417 ) $ (17,824 ) $ 30,828 $ (18,847 ) (1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 15,433,940 $ 52,753,065 $ 21,206,967 $ 5,688,707 DAC and VOBA 1,494,118 914,610 890,214 6,877 Other intangibles 253,243 38,291 172,420 7,056 Goodwill 215,254 23,862 343,247 113,924 Total assets $ 17,396,555 $ 53,729,828 $ 22,612,848 $ 5,816,564 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,055,887 $ 16,390,407 $ 112,528,973 DAC and VOBA 168,738 — 3,474,557 Other intangibles 117,374 28,547 616,931 Goodwill 129,224 — 825,511 Total assets $ 1,471,223 $ 16,418,954 $ 117,445,972 Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,575,702 $ 31,859,520 $ 20,199,597 $ 5,107,334 DAC and VOBA 1,499,386 458,977 889,697 6,121 Other intangibles 262,758 31,975 156,785 7,389 Goodwill 215,254 23,862 343,247 113,924 Total assets $ 16,553,100 $ 32,374,334 $ 21,589,326 $ 5,234,768 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,019,297 $ 12,715,208 $ 85,476,658 DAC and VOBA 168,973 — 3,023,154 Other intangibles 122,590 31,934 613,431 Goodwill 129,224 — 825,511 Total assets $ 1,440,084 $ 12,747,142 $ 89,938,754 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated the effects of events subsequent to June 30, 2019 , and through the date we filed our consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated condensed financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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 (the “Merger”). Prior to February 1, 2015 , the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, 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”) for the interim periods presented herein. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the results for the interim periods presented. Operating results for the three and six months ended June 30, 2019 , are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019 . The year-end consolidated condensed financial data included herein was derived from audited financial statements but this report does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . 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. |
Reclassifications | Certain reclassifications have been made in previously reported financial statements and accompanying notes to make prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity. |
Entities Included | Entities Included The consolidated condensed financial statements in this report 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. |
Accounting Pronouncements Recently Adopted and Not Yet Adopted | Accounting Pronouncements Recently Adopted Accounting Standards Update (“ASU” or “Update”) No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change relates to the accounting model used by lessees. The Update requires 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 are measured at the present value of the minimum lease payments less any upfront payments or fees. The amendments in the Update became effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company recorded a cumulative effect adjustment as of the date of adoption, January 1, 2019, establishing a right of use asset and lease liability of $21.5 million on its consolidated condensed balance sheet reflected in the property and equipment and other liabilities line items, respectively. 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 previous guidance, under which premiums are amortized to the maturity date of the security. The amendments became effective for annual and interim periods beginning after December 15, 2018. The Company recorded a cumulative effect adjustment as of the adoption date, January 1, 2019, resulting in a $50.8 million redu ction to retained earnings, net of income tax. 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 became effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. At adoption, January 1, 2019, this standard did not have an impact on the Company’s operations or financial results. Accounting Pronouncements Not Yet Adopted 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, along with related amendments in ASU No. 2018-19 - Codification Improvements to Topic 326, Financial Instruments-Credit Losses, are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. The Company has completed its scoping and gap analysis with respect to the implementation of the new standard. Based on the results of this analysis, the Company’s implementation efforts are primarily focused on the application of the CECL model to a) its portfolio of commercial mortgage loans and b) amounts recoverable from reinsurers. The Company is currently engaged in a project to implement new processes with respect to the measurement and recognition of the CECL allowance for these assets, along with the additional disclosures required by the Update. The impact of this standard on the Company’s financial results cannot yet be reasonably estimated. ASU No. 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to Accounting for Long-Duration Contracts. The amendments in this Update are designed to make improvements to the existing recognition, measurement, presentation, and disclosure requirements for certain long-duration contracts issued by an insurance company. The new amendments require insurance entities to provide a more current measure of the liability for future policy benefits for traditional and limited-payment contracts by regularly refining the liability for actual past experience and updated future assumptions. This differs from current requirements where assumptions are locked-in at contract issuance for these contract types. In addition, the updated liability will be discounted using an upper-medium grade (low-credit-risk) fixed income instrument yield that reflects the characteristics of the liability which differs from currently used rates based on the invested assets supporting the liability. In addition, the amendments introduce new requirements to assess market-based insurance contract options and guarantees for Market Risk Benefits and measure them at fair value. This Update also requires insurance entities to amortize deferred acquisition costs on a constant-level basis over the expected life of the contract. Finally this Update requires new disclosures including liability rollforwards and information about significant inputs, judgments, assumptions, and methods used in the measurement. The amendments in this Update are currently effective for annual and interim periods beginning after December 31, 2020 with early adoption permitted. However, in July 2019, the Financial Accountings Standards Board (the “FASB”) voted to expose an Accounting Standards Update for public comment which would extend the implementation deadline for public business entities by one year to periods beginning after December 15, 2021. The Company is currently reviewing its policies, processes, and applicable systems to determine the impact this standard will have on its operations and financial results. |
SIGNIFICANT TRANSACTIONS (Table
SIGNIFICANT TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Summary of Consideration Paid and Fair Value of Assets Acquired and Liabilities Assumed | The following table details the purchase consideration and final allocation of assets acquired and liabilities from the Life Business reinsurance transaction as of the transaction date. Fair Value as of May 1, 2018 (Dollars In Thousands) ASSETS Fixed maturities $ 12,588,512 Mortgage loans 435,405 Policy loans 131,489 Total investments 13,155,406 Cash 35,179 Accrued investment income 152,030 Reinsurance receivables 272 Value of business acquired 379,717 Other assets 916 Total assets 13,723,520 LIABILITIES Future policy benefits and claims $ 11,751,895 Unearned premiums — Total policy liabilities and accruals 11,751,895 Annuity account balances 1,864,141 Other policyholders’ funds 41,936 Other liabilities 65,548 Total liabilities 13,723,520 NET ASSETS ACQUIRED $ — The following table details the preliminary allocation of assets acquired and liabilities assumed from the Individual Life Business reinsurance transaction as of the transaction date. The Company has not completed the process of determining the fair value of assets acquired and liabilities assumed, but will do so in the twelve month measurement period subsequent to the transaction date. These estimates are provisional subject to adjustment. Any adjustments to these fair value estimates will be reflected, retroactively, as of the date of the acquisition, and may result in adjustments to the value of business acquired. Fair Value as of June 1, 2019 (Dollars In Thousands) ASSETS Fixed maturities $ 8,697,533 Mortgage loans 1,386,228 Policy loans 44,002 Other long-term investments 1,579 Total investments 10,129,342 Cash 35,607 Accrued investment income 101,306 Accounts and premiums receivable 62 Premium due and deferred 1,657 Value of business acquired 491,493 Other intangibles 28,600 Other assets 1,537,848 Assets related to separate accounts 9,583,217 Total assets 21,909,132 LIABILITIES Future policy benefits and claims $ 10,993,716 Annuity account balances 253,748 Other policyholders’ funds 220,117 Other liabilities 39,370 Liabilities related to separate accounts 9,583,217 Total liabilities 21,090,168 NET ASSETS ACQUIRED $ 818,964 |
Pro Forma Information | The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Individual Life Business were completed as of January 1, 2018. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated: Unaudited Unaudited For The Three Months Ended June 30, For The Six Months Ended June 30, 2019 2018 2019 2018 (Dollars In Thousands) Revenue $ 1,548,668 $ 1,461,832 $ 3,203,698 $ 2,828,369 Net income $ 124,161 $ 122,977 $ 263,490 $ 182,034 The following unaudited pro forma condensed consolidated results of operations assumes that the aforementioned transactions of the Life Business were completed as of January 1, 2017. The unaudited pro forma condensed results of operations are presented solely for information purposes and are not necessarily indicative of the consolidated condensed results of operations that might have been achieved had the transaction been completed as of the date indicated: Unaudited For The Three Months Ended June 30, 2018 For The Six Months Ended June 30, 2018 (Dollars In Thousands) Revenue $ 1,317,159 $ 2,733,479 Net income $ 88,883 $ 201,751 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Intangible assets recognized by the Company included the following (excluding goodwill): Estimated Fair Value on Acquisition Date Estimated Useful Life (Dollars In Thousands) (In Years) Distribution relationships $ 15,000 18 Technology 13,600 10 Total intangible assets $ 28,600 |
Future Estimated Aggregate Amortization Expense | 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) Remainder of 2019 $ 1,279 2020 2,193 2021 2,193 2022 2,193 2023 2,193 |
Schedule of Expected Amortization Expense of (VOBA) | Based on the balance recorded as of June 1, 2019, the expected amortization of VOBA for the next five years is as follows: Year Amount (Dollars In Thousands) Remainder of 2019 $ (4,966 ) 2020 (12,292 ) 2021 (6,807 ) 2022 (1,010 ) 2023 3,259 |
MONY CLOSED BLOCK OF BUSINESS (
MONY CLOSED BLOCK OF BUSINESS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Closed Block Disclosure [Abstract] | |
Summary of Financial Information for the Closed Block | Summarized financial information for the Closed Block as of June 30, 2019 , and December 31, 2018 , is as follows: As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,611,917 $ 5,679,732 Policyholder dividend obligation 173,147 — Other liabilities 11,043 22,505 Total closed block liabilities 5,796,107 5,702,237 Closed block assets Fixed maturities, available-for-sale, at fair value $ 4,583,161 $ 4,257,437 Mortgage loans on real estate 74,290 75,838 Policy loans 658,971 672,213 Cash 55,960 116,225 Other assets 107,306 136,388 Total closed block assets 5,479,688 5,258,101 Excess of reported closed block liabilities over closed block assets 316,419 444,136 Portion of above representing accumulated other comprehensive income: Net unrealized investment gains (losses) net of policyholder dividend obligation: $47,972 and $(141,128); and net of income tax: $(10,074) and $61,676 — (120,528 ) Future earnings to be recognized from closed block assets and closed block liabilities $ 316,419 $ 323,608 |
Schedule of Reconciliation of the Policyholder Dividend Obligation | Reconciliation of the policyholder dividend obligation is as follows: For The 2019 2018 (Dollars In Thousands) Policyholder dividend obligation, beginning of period $ — $ 160,712 Applicable to net revenue (losses) (15,953 ) (19,536 ) Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation 189,100 (141,176 ) Policyholder dividend obligation, end of period $ 173,147 $ — |
Schedule of Closed Block Revenues and Expenses | Closed Block revenues and expenses were as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Revenues Premiums and other income $ 40,105 $ 42,465 $ 77,549 $ 82,077 Net investment income 51,663 50,872 102,791 101,415 Net investment gains (losses) 43 263 (411 ) 26 Total revenues 91,811 93,600 179,929 183,518 Benefits and other deductions Benefits and settlement expenses 87,213 87,940 165,879 167,892 Other operating expenses 247 337 606 20 Total benefits and other deductions 87,460 88,277 166,485 167,912 Net revenues before income taxes 4,351 5,323 13,444 15,606 Income tax expense 913 1,118 2,823 3,277 Net revenues $ 3,438 $ 4,205 $ 10,621 $ 12,329 |
INVESTMENT OPERATIONS (Tables)
INVESTMENT OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Realized Gain (Loss) on Investments | Net realized gains (losses) are summarized as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Fixed maturities $ 1,098 $ 5,539 $ 6,215 $ 8,322 Equity gains and losses 7,696 (1,044 ) 38,413 (9,830 ) Modco trading portfolio 89,571 (52,817 ) 184,473 (137,525 ) Other investments 1,137 (1,280 ) (9 ) 1,832 Realized gains (losses) - all other investments 99,502 (49,602 ) 229,092 (137,201 ) Realized gains (losses) - derivatives (1) (148,049 ) 12,265 (267,720 ) 90,324 Realized investment gains (losses) $ (48,547 ) $ (37,337 ) $ (38,628 ) $ (46,877 ) Net impairments losses recognized in earnings $ (698 ) $ (5 ) $ (3,840 ) $ (3,650 ) (1) See Note 7, Derivative Financial Instruments Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities and short-term investments) are as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Gross realized gains $ 6,812 $ 10,137 $ 14,682 $ 18,187 Gross realized losses: Impairment losses $ (698 ) $ (5 ) $ (3,840 ) $ (3,650 ) Other realized losses $ (5,714 ) $ (4,598 ) $ (8,467 ) $ (9,865 ) |
Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired | 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 June 30, 2019 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 118,932 $ (427 ) $ 576,350 $ (8,474 ) $ 695,282 $ (8,901 ) Commercial mortgage-backed securities 3,609 (6 ) 574,967 (3,888 ) 578,576 (3,894 ) Other asset-backed securities 409,753 (5,931 ) 134,156 (2,595 ) 543,909 (8,526 ) U.S. government-related securities 32,421 (314 ) 902,249 (8,690 ) 934,670 (9,004 ) Other government-related securities 5,509 (198 ) 93,790 (3,970 ) 99,299 (4,168 ) States, municipals, and political subdivisions 13,242 (13 ) 145,668 (5,838 ) 158,910 (5,851 ) Corporate securities 1,244,536 (52,639 ) 10,318,328 (519,534 ) 11,562,864 (572,173 ) Redeemable preferred stocks — — 17,180 (3,758 ) 17,180 (3,758 ) $ 1,828,002 $ (59,528 ) $ 12,762,688 $ (556,747 ) $ 14,590,690 $ (616,275 ) 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, 2018 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 1,485,009 $ (31,302 ) $ 804,364 $ (30,894 ) $ 2,289,373 $ (62,196 ) Commercial mortgage-backed securities 422,438 (7,442 ) 1,429,384 (50,659 ) 1,851,822 (58,101 ) Other asset-backed securities 687,271 (30,963 ) 148,871 (4,435 ) 836,142 (35,398 ) U.S. government-related securities 130,290 (4,668 ) 1,085,654 (41,054 ) 1,215,944 (45,722 ) Other government-related securities 226,201 (15,267 ) 131,569 (18,583 ) 357,770 (33,850 ) States, municipals, and political subdivisions 1,004,262 (27,180 ) 1,129,152 (91,722 ) 2,133,414 (118,902 ) Corporate securities 18,326,331 (970,553 ) 12,859,732 (1,414,499 ) 31,186,063 (2,385,052 ) Redeemable preferred stocks 41,147 (4,467 ) 41,655 (7,093 ) 82,802 (11,560 ) $ 22,322,949 $ (1,091,842 ) $ 17,630,381 $ (1,658,939 ) $ 39,953,330 $ (2,750,781 ) 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. For The For The 2019 2018 2019 2018 (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 491,121 $ 466,153 $ 1,140,012 $ 608,286 Gains realized $ 6,812 $ 10,137 $ 14,682 $ 18,187 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 160,125 $ 201,191 $ 338,129 $ 258,175 Losses realized $ (5,714 ) $ (4,598 ) $ (8,467 ) $ (9,865 ) (1) The Company made the decision to exit these holdings in conjunction with its overall asset/liability management process. |
Realized Gain (Loss) on Equity Securities | The chart below summarizes the realized gains (losses) on equity securities sold during the period and equity securities still held at the reporting date. For The For The 2019 2018 2019 2018 (Dollars In Thousands) Net gains (losses) recognized during the period on equity securities $ 7,696 $ (1,044 ) $ 38,413 $ (9,830 ) Less: net gains (losses) recognized on equity securities sold during the period $ 193 $ (680 ) $ 253 $ (2,381 ) Gains (losses) recognized during the period on equity securities still held $ 7,503 $ (364 ) $ 38,160 $ (7,449 ) |
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: As of June 30, 2019 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 4,482,547 $ 132,602 $ (8,901 ) $ 4,606,248 Commercial mortgage-backed securities 2,648,121 51,634 (3,894 ) 2,695,861 Other asset-backed securities 1,848,061 22,063 (8,526 ) 1,861,598 (3 ) U.S. government-related securities 1,304,382 5,179 (9,004 ) 1,300,557 Other government-related securities 555,767 31,550 (4,168 ) 583,149 States, municipals, and political subdivisions 4,652,897 183,920 (5,851 ) 4,830,966 1,193 Corporate securities 45,267,764 1,549,526 (572,173 ) 46,245,117 764 Redeemable preferred stocks 87,459 1,211 (3,758 ) 84,912 60,846,998 1,977,685 (616,275 ) 62,208,408 1,954 Short-term investments 1,138,931 — — 1,138,931 — $ 61,985,929 $ 1,977,685 $ (616,275 ) $ 63,347,339 $ 1,954 As of December 31, 2018 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 3,650,539 $ 23,247 $ (62,196 ) $ 3,611,590 $ (18 ) Commercial mortgage-backed securities 2,349,274 3,911 (58,101 ) 2,295,084 — Other asset-backed securities 1,410,059 17,232 (35,398 ) 1,391,893 — U.S. government-related securities 1,683,432 1,795 (45,722 ) 1,639,505 — Other government-related securities 545,522 4,292 (33,850 ) 515,964 — States, municipals, and political subdivisions 3,682,037 25,706 (118,902 ) 3,588,841 876 Corporate securities 38,634,888 112,992 (2,385,052 ) 36,362,828 (29,685 ) Redeemable preferred stocks 94,362 — (11,560 ) 82,802 — 52,050,113 189,175 (2,750,781 ) 49,488,507 (28,827 ) Short-term investments 776,357 — — 776,357 — $ 52,826,470 $ 189,175 $ (2,750,781 ) $ 50,264,864 $ (28,827 ) (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 investments held pursuant to these Modco arrangements are as follows: As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 203,455 $ 241,836 Commercial mortgage-backed securities 204,445 188,925 Other asset-backed securities 147,997 159,907 U.S. government-related securities 51,080 59,794 Other government-related securities 24,342 44,207 States, municipals, and political subdivisions 293,560 286,413 Corporate securities 1,565,561 1,423,833 Redeemable preferred stocks 11,808 11,277 2,502,248 2,416,192 Equity securities 8,488 9,892 Short-term investments 81,909 30,926 $ 2,592,645 $ 2,457,010 |
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 June 30, 2019 , 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) Due in one year or less $ 1,440,860 $ 1,438,699 $ — $ — Due after one year through five years 10,103,874 10,229,353 — — Due after five years through ten years 13,210,907 13,623,029 — — Due after ten years 36,091,357 36,917,327 2,576,216 2,640,827 $ 60,846,998 $ 62,208,408 $ 2,576,216 $ 2,640,827 |
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. For The For The 2019 2018 2019 2018 Fixed Maturities Fixed Maturities Fixed Maturities Fixed Maturities (Dollars In Thousands) Other-than-temporary impairments $ (198 ) $ (10 ) $ (1,493 ) $ (701 ) Non-credit impairment losses recorded in other comprehensive income (loss) (500 ) 5 (2,347 ) (2,949 ) Net impairment losses recognized in earnings $ (698 ) $ (5 ) $ (3,840 ) $ (3,650 ) |
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): For The For The 2019 2018 2019 2018 (Dollars In Thousands) Beginning balance $ 27,215 $ 2,235 $ 24,868 $ 3,268 Additions for newly impaired securities — — 751 — Additions for previously impaired securities 660 2 3,007 2 Reductions for previously impaired securities due to a change in expected cash flows (8,202 ) — (8,834 ) — Reductions for previously impaired securities that were sold in the current period (7,175 ) (2,235 ) (7,294 ) (3,268 ) Ending balance $ 12,498 $ 2 $ 12,498 $ 2 |
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 maturities, classified as available-for-sale is summarized as follows: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Fixed maturities $ 1,541,352 $ (585,527 ) $ 3,099,183 $ (1,505,298 ) |
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 June 30, 2019 and December 31, 2018 , are as follows: As of June 30, 2019 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain, LLC $ 773,216 $ — $ (14,249 ) $ 758,967 $ — Steel City, LLC 1,803,000 78,860 — 1,881,860 — $ 2,576,216 $ 78,860 $ (14,249 ) $ 2,640,827 $ — As of December 31, 2018 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain, LLC $ 750,474 $ — $ (81,657 ) $ 668,817 $ — Steel City, LLC 1,883,000 — (4,607 ) 1,878,393 — $ 2,633,474 $ — $ (86,264 ) $ 2,547,210 $ — |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 : Measurement Category Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities 4 $ — $ 4,606,248 $ — $ 4,606,248 Commercial mortgage-backed securities 4 — 2,686,495 9,366 2,695,861 Other asset-backed securities 4 — 1,443,288 418,310 1,861,598 U.S. government-related securities 4 884,053 416,504 — 1,300,557 Other government-related securities 4 — 583,149 — 583,149 States, municipals, and political subdivisions 4 — 4,830,966 — 4,830,966 Corporate securities 4 — 44,916,626 1,328,491 46,245,117 Redeemable preferred stocks 4 67,732 17,180 — 84,912 Total fixed maturity securities - available-for-sale 951,785 59,500,456 1,756,167 62,208,408 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 203,455 — 203,455 Commercial mortgage-backed securities 3 — 204,445 — 204,445 Other asset-backed securities 3 — 85,817 62,180 147,997 U.S. government-related securities 3 25,929 25,151 — 51,080 Other government-related securities 3 — 24,342 — 24,342 States, municipals, and political subdivisions 3 — 293,560 — 293,560 Corporate securities 3 — 1,560,267 5,294 1,565,561 Redeemable preferred stocks 3 11,808 — — 11,808 Total fixed maturity securities - trading 37,737 2,397,037 67,474 2,502,248 Total fixed maturity securities 989,522 61,897,493 1,823,641 64,710,656 Equity securities 3 560,302 36 69,627 629,965 Other long-term investments (1) 3 & 4 65,231 467,642 110,923 643,796 Short-term investments 3 1,153,978 66,862 — 1,220,840 Total investments 2,769,033 62,432,033 2,004,191 67,205,257 Cash 3 240,157 — — 240,157 Other assets 3 34,335 — — 34,335 Assets related to separate accounts Variable annuity 3 12,790,474 — — 12,790,474 Variable universal life 3 1,073,020 — — 1,073,020 Total assets measured at fair value on a recurring basis $ 16,907,019 $ 62,432,033 $ 2,004,191 $ 81,343,243 Liabilities: Annuity account balances (2) 3 $ — $ — $ 72,585 $ 72,585 Other liabilities (1) 3 & 4 23,552 198,564 1,097,077 1,319,193 Total liabilities measured at fair value on a recurring basis $ 23,552 $ 198,564 $ 1,169,662 $ 1,391,778 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. (3) Fair Value through Net Income (4) Fair Value through Other Comprehensive Income (Loss) 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, 2018 : Measurement Category Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities 4 $ — $ 3,611,590 $ — $ 3,611,590 Commercial mortgage-backed securities 4 — 2,295,084 — 2,295,084 Other asset-backed securities 4 — 970,251 421,642 1,391,893 U.S. government-related securities 4 1,010,485 629,020 — 1,639,505 Other government-related securities 4 — 515,964 — 515,964 State, municipals, and political subdivisions 4 — 3,588,841 — 3,588,841 Corporate securities 4 — 35,724,552 638,276 36,362,828 Redeemable preferred stocks 4 65,536 17,266 — 82,802 Total fixed maturity securities - available-for-sale 1,076,021 47,352,568 1,059,918 49,488,507 Fixed maturity securities - trading Residential mortgage-backed securities 3 — 241,836 — 241,836 Commercial mortgage-backed securities 3 — 188,925 — 188,925 Other asset-backed securities 3 — 133,851 26,056 159,907 U.S. government-related securities 3 27,453 32,341 — 59,794 Other government-related securities 3 — 44,207 — 44,207 State, municipals, and political subdivisions 3 — 286,413 — 286,413 Corporate securities 3 — 1,417,591 6,242 1,423,833 Redeemable preferred stocks 3 11,277 — — 11,277 Total fixed maturity securities - trading 38,730 2,345,164 32,298 2,416,192 Total fixed maturity securities 1,114,751 49,697,732 1,092,216 51,904,699 Equity securities 3 531,523 36 64,325 595,884 Other long-term investments (1) 3&4 83,047 180,438 112,344 375,829 Short-term investments 3 730,067 77,216 — 807,283 Total investments 2,459,388 49,955,422 1,268,885 53,683,695 Cash 3 173,714 — — 173,714 Other assets 3 29,257 — — 29,257 Assets related to separate accounts Variable annuity 3 12,288,919 — — 12,288,919 Variable universal life 3 937,732 — — 937,732 Total assets measured at fair value on a recurring basis $ 15,889,010 $ 49,955,422 $ 1,268,885 $ 67,113,317 Liabilities: Annuity account balances (2) 3 $ — $ — $ 76,119 $ 76,119 Other liabilities (1) 3&4 56,018 69,501 629,942 755,461 Total liabilities measured at fair value on a recurring basis $ 56,018 $ 69,501 $ 706,061 $ 831,580 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. (3) Fair Value through Net Income (4) Fair Value through Other Comprehensive Income (Loss) |
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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 421,458 Liquidation Liquidation value $85.75 - $99.99 ($95.36) Discounted Cash Flow Liquidity premium 0.02% - 1.25% (0.64%) Paydown rate 10.96% - 13.11% (12.03%) Corporate securities 631,068 Discounted cash flow Spread over treasury 0.84% - 3.0% (1.84%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 184,071 Actuarial cash flow model Mortality 87% to 100% of Ruark 2015 ALB table Lapse Ruark Predictive Model Utilization 99%. 10% of policies have a one- time over-utilization of 400% Nonperformance risk 0.21% - 1.16% Embedded derivative - FIA 217,288 Actuarial cash flow model Expenses $145 per policy Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 87% to 100% of Ruark 2015 ALB table Lapse 1.0% - 30.0%, depending on duration/surrender charge period Nonperformance risk 0.21% - 1.16% Embedded derivative - IUL 90,231 Actuarial cash flow model Mortality 37% - 577% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.21% - 1.16% (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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 418,178 Liquidation Liquidation value $95.39 - $97.00 ($96.48) Discounted cash flow Liquidity premium 0.11% - 1.50% (0.73%) Paydown rate 10.84% - 12.88% (11.98%) Corporate securities 1,328,490 Discounted cash flow Spread over treasury 0.87% - 4.10% (1.75%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 338,648 Actuarial cash flow model Mortality 87% to 100% of Ruark 2015 ALB table Lapse Ruark Predictive Model Utilization 99%. 10% of policies have a one- time over-utilization of 400% Nonperformance risk 0.17% - 0.88% Embedded derivative - FIA 300,364 Actuarial cash flow model Expenses $145 per policy Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 87% to 100% of Ruark 2015 ALB table Lapse 1.0% - 30.0%, depending on duration/surrender charge period Dynamically adjusted for WB moneyness and projected market rates vs credited rates Nonperformance risk 0.17% - 0.88% Embedded derivative - IUL 136,660 Actuarial cash flow model Mortality 37% - 577% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.17% - 0.88% (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 three months ended June 30, 2018 , for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Earnings related to Instruments still held at 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 $ — $ — $ — $ — $ (457 ) $ 22,225 $ — $ — $ — $ — $ 12 $ 21,780 $ — Commercial mortgage-backed securities — — — — (1,284 ) 48,621 (94 ) — — — (16 ) 47,227 — Other asset-backed securities 503,789 — 11,353 — (13 ) — (9 ) — — 222 359 515,701 — Corporate securities 626,409 — 5,662 — (6,828 ) 43,491 (14,818 ) — — (7,894 ) (1,211 ) 644,811 — Total fixed maturity securities - available-for-sale 1,130,198 — 17,015 — (8,582 ) 114,337 (14,921 ) — — (7,672 ) (856 ) 1,229,519 — Fixed maturity securities - trading Other asset-backed securities 34,958 — — (3,570 ) — 4,600 (11,273 ) — — 164 (27 ) 24,852 (3,570 ) Corporate securities 5,324 — — (45 ) — — — — — — (25 ) 5,254 (45 ) Total fixed maturity securities - trading 40,282 — — (3,615 ) — 4,600 (11,273 ) — — 164 (52 ) 30,106 (3,615 ) Total fixed maturity securities 1,170,480 — 17,015 (3,615 ) (8,582 ) 118,937 (26,194 ) — — (7,508 ) (908 ) 1,259,625 (3,615 ) Equity securities 66,061 1 — (15 ) — 36 — — — — — 66,083 (14 ) Other long-term investments (1) 144,352 12,821 — (499 ) — — — — — — — 156,674 12,322 Total investments 1,380,893 12,822 17,015 (4,129 ) (8,582 ) 118,973 (26,194 ) — — (7,508 ) (908 ) 1,482,382 8,693 Total assets measured at fair value on a recurring basis $ 1,380,893 $ 12,822 $ 17,015 $ (4,129 ) $ (8,582 ) $ 118,973 $ (26,194 ) $ — $ — $ (7,508 ) $ (908 ) $ 1,482,382 $ 8,693 Liabilities: Annuity account balances (2) $ 81,399 $ — $ — $ (1,059 ) $ — $ — $ — $ 89 $ 2,449 $ — $ — $ 80,098 $ — Other liabilities (1) 621,102 96,138 — (47,952 ) — — — — — — — 572,916 48,186 Total liabilities measured at fair value on a recurring basis $ 702,501 $ 96,138 $ — $ (49,011 ) $ — $ — $ — $ 89 $ 2,449 $ — $ — $ 653,014 $ 48,186 (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 three months ended June 30, 2019 , for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Earnings related to Instruments still held at 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 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial mortgage-backed securities — — 16 — — 9,359 (7 ) — — — (2 ) 9,366 — Other asset-backed securities 420,091 — 2,513 (37 ) (4,468 ) — (7 ) — — — 218 418,310 — Corporate securities 648,608 82 25,371 — (497 ) 661,627 (56,183 ) — — 49,350 133 1,328,491 — Total fixed maturity securities - available-for-sale 1,068,699 82 27,900 (37 ) (4,965 ) 670,986 (56,197 ) — — 49,350 349 1,756,167 — Fixed maturity securities - trading Other asset-backed securities 66,484 810 — (3,468 ) — — (781 ) — — (797 ) (68 ) 62,180 (2,717 ) Corporate securities 5,251 68 — — — — 1 — — — (26 ) 5,294 68 Total fixed maturity securities - trading 71,735 878 — (3,468 ) — — (780 ) — — (797 ) (94 ) 67,474 (2,649 ) Total fixed maturity securities 1,140,434 960 27,900 (3,505 ) (4,965 ) 670,986 (56,977 ) — — 48,553 255 1,823,641 (2,649 ) Equity securities 64,394 157 — (3 ) — 5,079 — — — — — 69,627 153 Other long-term investments (1) 109,532 13,700 — (13,888 ) — 1,579 — — — — — 110,923 (188 ) Total investments 1,314,360 14,817 27,900 (17,396 ) (4,965 ) 677,644 (56,977 ) — — 48,553 255 2,004,191 (2,684 ) Total assets measured at fair value on a recurring basis $ 1,314,360 $ 14,817 $ 27,900 $ (17,396 ) $ (4,965 ) $ 677,644 $ (56,977 ) $ — $ — $ 48,553 $ 255 $ 2,004,191 $ (2,684 ) Liabilities: Annuity account balances (2) $ 74,613 $ — $ — $ (825 ) $ — $ — $ — $ 56 $ 2,909 $ — $ — $ 72,585 $ — Other liabilities (1) 797,891 364 — (262,346 ) — 37,204 — — — — — 1,097,077 (261,982 ) Total liabilities measured at fair value on a recurring basis $ 872,504 $ 364 $ — $ (263,171 ) $ — $ 37,204 $ — $ 56 $ 2,909 $ — $ — $ 1,169,662 $ (261,982 ) (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 six months ended June 30, 2018 , for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Earnings related to Instruments still held at 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 $ — $ — $ — $ — $ (457 ) $ 22,225 $ — $ — $ — $ — $ 12 $ 21,780 $ — Commercial mortgage-backed securities — — — — (1,284 ) 48,621 (94 ) — — — (16 ) 47,227 — Other asset-backed securities 504,365 — 11,867 — (1,647 ) — (23 ) — — 222 917 515,701 — Corporate securities 626,901 — 7,061 — (18,929 ) 78,491 (38,453 ) — — (7,894 ) (2,366 ) 644,811 — Total fixed maturity securities - available-for-sale 1,131,266 — 18,928 — (22,317 ) 149,337 (38,570 ) — — (7,672 ) (1,453 ) 1,229,519 — Fixed maturity securities - trading Other asset-backed securities 35,222 194 — (3,598 ) — 4,600 (11,669 ) — — 164 (61 ) 24,852 (3,405 ) Corporate securities 5,442 — — (139 ) — — — — — — (49 ) 5,254 (139 ) Total fixed maturity securities - trading 40,664 194 — (3,737 ) — 4,600 (11,669 ) — — 164 (110 ) 30,106 (3,544 ) Total fixed maturity securities 1,171,930 194 18,928 (3,737 ) (22,317 ) 153,937 (50,239 ) — — (7,508 ) (1,563 ) 1,259,625 (3,544 ) Equity securities 66,110 1 — (64 ) — 36 — — — — — 66,083 (63 ) Other long-term investments (1) 136,004 21,685 — (1,015 ) — — — — — — — 156,674 20,670 Short-term investments — — — — — — — — — — — — — Total investments 1,374,044 21,880 18,928 (4,816 ) (22,317 ) 153,973 (50,239 ) — — (7,508 ) (1,563 ) 1,482,382 17,063 Total assets measured at fair value on a recurring basis $ 1,374,044 $ 21,880 $ 18,928 $ (4,816 ) $ (22,317 ) $ 153,973 $ (50,239 ) $ — $ — $ (7,508 ) $ (1,563 ) $ 1,482,382 $ 17,063 Liabilities: Annuity account balances (2) $ 83,472 $ — $ — $ (1,853 ) $ — $ — $ — $ 530 $ 5,757 $ — $ — $ 80,098 $ — Other liabilities (1) 760,890 257,456 — (69,482 ) — — — — — — — 572,916 187,974 Total liabilities measured at fair value on a recurring basis $ 844,362 $ 257,456 $ — $ (71,335 ) $ — $ — $ — $ 530 $ 5,757 $ — $ — $ 653,014 $ 187,974 (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 six months ended June 30, 2019 , for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Earnings related to Instruments still held at 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 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial mortgage-backed securities — — 16 — — 9,359 (7 ) — — — (2 ) 9,366 — Other asset-backed securities 421,642 446 10,660 (57 ) (4,799 ) — (10,015 ) — — — 433 418,310 — Corporate securities 638,276 82 43,956 — (3,509 ) 695,627 (84,956 ) — — 39,255 (240 ) 1,328,491 — Total fixed maturity securities - available-for-sale 1,059,918 528 54,632 (57 ) (8,308 ) 704,986 (94,978 ) — — 39,255 191 1,756,167 — Fixed maturity securities - trading Other asset-backed securities 26,056 4,006 — (3,584 ) — 15,463 (5,892 ) — — 26,267 (136 ) 62,180 1,068 Corporate securities 6,242 169 — (31 ) — — (1,035 ) — — — (51 ) 5,294 134 Total fixed maturity securities - trading 32,298 4,175 — (3,615 ) — 15,463 (6,927 ) — — 26,267 (187 ) 67,474 1,202 Total fixed maturity securities 1,092,216 4,703 54,632 (3,672 ) (8,308 ) 720,449 (101,905 ) — — 65,522 4 1,823,641 1,202 Equity securities 64,325 239 — (16 ) — 5,079 — — — — — 69,627 222 Other long-term investments (1) 112,344 26,922 — (29,922 ) — 1,579 — — — — — 110,923 (3,000 ) Total investments 1,268,885 31,864 54,632 (33,610 ) (8,308 ) 727,107 (101,905 ) — — 65,522 4 2,004,191 (1,576 ) Total assets measured at fair value on a recurring basis $ 1,268,885 $ 31,864 $ 54,632 $ (33,610 ) $ (8,308 ) $ 727,107 $ (101,905 ) $ — $ — $ 65,522 $ 4 $ 2,004,191 $ (1,576 ) Liabilities: Annuity account balances (2) $ 76,119 $ — $ — $ (1,152 ) $ — $ — $ — $ 67 $ 4,753 $ — $ — $ 72,585 $ — Other liabilities (1) 629,942 12,034 — (441,965 ) — 37,204 — — — — — 1,097,077 (429,931 ) Total liabilities measured at fair value on a recurring basis $ 706,061 $ 12,034 $ — $ (443,117 ) $ — $ 37,204 $ — $ 67 $ 4,753 $ — $ — $ 1,169,662 $ (429,931 ) (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: As of June 30, 2019 December 31, 2018 Fair Value Level Carrying Amounts Fair Values Carrying Amounts Fair Values (Dollars In Thousands) Assets: Mortgage loans on real estate 3 $ 9,053,400 $ 9,123,182 $ 7,724,733 $ 7,447,702 Policy loans 3 1,709,110 1,709,110 1,695,886 1,695,886 Fixed maturities, held-to-maturity (1) 3 2,576,216 2,640,827 2,633,474 2,547,210 Liabilities: Stable value product account balances 3 $ 5,816,503 $ 5,885,528 $ 5,234,731 $ 5,200,723 Future policy benefits and claims (2) 3 1,725,194 1,729,081 1,671,414 1,671,434 Other policyholders’ funds (3) 3 105,136 107,702 131,150 131,782 Debt: (4) Bank borrowings (5) 3 $ 599,627 $ 600,000 $ — $ — Senior Notes 2 1,075,370 1,095,907 1,100,508 1,065,338 Subordinated debentures 2 495,494 506,720 495,426 494,265 Subordinated funding obligations 3 110,000 108,455 110,000 95,476 Non-recourse funding obligations (6) 3 2,576,538 2,701,194 2,632,497 2,550,237 Except as noted below, fair values were estimated using quoted market prices. (1) Securities purchased from unconsolidated affiliates, 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 $2.6 million and $1.3 million as of June 30, 2019 and December 31, 2018, respectively. (5) As June 30, 2019, includes the Term Loan Credit Agreement. (6) As of June 30, 2019, carrying amount of $2.6 billion and a fair value of $2.7 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. As of December 31, 2018, carrying amount of $2.6 billion and a fair value of $2.5 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Realized Investments Gains and Losses | The following table sets forth realized investments gains and losses for the periods shown: Realized investment gains (losses) - derivative financial instruments For The For The 2019 2018 2019 2018 (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures $ (11,280 ) $ 1,552 $ (17,302 ) $ (15,340 ) Equity futures 2,559 (10,864 ) 32,297 (17,292 ) Currency futures (397 ) 12,063 1,847 4,480 Equity options (21,702 ) (38,216 ) (93,397 ) (26,200 ) Interest rate swaptions — — — (14 ) Interest rate swaps 117,934 (26,149 ) 192,795 (89,859 ) Total return swaps (8,545 ) (10,055 ) (48,572 ) (3,565 ) Embedded derivative - GLWB (134,692 ) 35,554 (154,318 ) 91,846 Total derivatives related to VA contracts (56,123 ) (36,115 ) (86,650 ) (55,944 ) Derivatives related to FIA contracts: Embedded derivative (24,819 ) (4,927 ) (63,633 ) 6,403 Equity futures 431 (167 ) 2 (328 ) Equity options 13,191 7,398 55,241 2,729 Total derivatives related to FIA contracts (11,197 ) 2,304 (8,390 ) 8,804 Derivatives related to IUL contracts: Embedded derivative (11,286 ) (1,226 ) (24,656 ) 8,658 Equity futures 85 — 256 136 Equity options 2,606 2,086 8,786 836 Total derivatives related to IUL contracts (8,595 ) 860 (15,614 ) 9,630 Embedded derivative - Modco reinsurance treaties (70,679 ) 45,183 (155,677 ) 127,841 Other derivatives (1,455 ) 33 (1,389 ) (7 ) Total realized gains (losses) - derivatives $ (148,049 ) $ 12,265 $ (267,720 ) $ 90,324 |
Components of the Gain or Loss on Derivatives that Qualify as a Cash Flow Hedging Relationship | The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship. Gain (Loss) on Derivatives in Cash Flow Hedging 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 Realized investment expenses gains (losses) (Dollars In Thousands) For The Three Months Ended June 30, 2019 Foreign currency swaps $ (1,733 ) $ (188 ) $ — Interest rate swaps (1,796 ) (148 ) — Total $ (3,529 ) $ (336 ) $ — For The Six Months Ended June 30, 2019 Foreign currency swaps $ (3,626 ) $ (394 ) $ — Interest rate swaps (2,391 ) (220 ) — Total $ (6,017 ) $ (614 ) $ — For The Three Months Ended June 30, 2018 Foreign currency swaps $ 2,967 $ (205 ) $ — Total $ 2,967 $ (205 ) $ — For The Six Months Ended June 30, 2018 Foreign currency swaps $ 3,582 $ (318 ) $ — Total $ 3,582 $ (318 ) $ — |
Information about the Nature and Accounting Treatment of the Company's Primary Derivative Financial Instruments and Location in and Effect on the Financial Statements | The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below: As of June 30, 2019 December 31, 2018 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 2,188,000 $ 90,599 $ 1,515,500 $ 28,501 Total return swaps 132,044 1,065 138,070 3,971 Embedded derivative - Modco reinsurance treaties 1,248,634 13,738 585,294 7,072 Embedded derivative - GLWB 3,153,016 97,185 3,984,070 105,272 Interest rate futures 393,518 8,703 286,208 10,302 Equity futures 101,064 639 12,633 483 Equity options 6,176,649 431,694 5,624,081 220,092 Other 157 173 157 136 $ 13,393,082 $ 643,796 $ 12,146,013 $ 375,829 Other liabilities Cash flow hedges: Interest rate swaps $ 350,000 $ — $ 350,000 $ — Foreign currency swaps 117,178 2,309 117,178 904 Derivatives not designated as hedging instruments: Interest rate swaps 70,000 — 775,000 11,367 Total return swaps 361,607 1,112 768,177 23,054 Embedded derivative - Modco reinsurance treaties 2,287,547 188,853 1,795,287 32,828 Embedded derivative - GLWB 6,943,853 471,199 6,282,712 289,343 Embedded derivative - FIA 2,739,208 298,721 2,576,033 217,288 Embedded derivative - IUL 262,828 136,660 233,550 90,231 Interest rate futures 901,165 16,464 863,706 20,100 Equity futures 225,125 2,967 659,357 33,753 Currency futures 256,513 1,105 202,747 2,163 Equity options 4,008,015 198,159 4,199,687 34,178 Other 13,109 1,644 3,288 252 $ 18,536,148 $ 1,319,193 $ 18,826,722 $ 755,461 |
OFFSETTING OF ASSETS AND LIAB_2
OFFSETTING OF ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018 : Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 263,349 $ — $ 263,349 $ 70,322 $ 99,199 $ 93,828 Total derivatives, subject to a master netting arrangement or similar arrangement 263,349 — 263,349 70,322 99,199 93,828 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 7,072 — 7,072 — — 7,072 Embedded derivative - GLWB 105,272 — 105,272 — — 105,272 Other 136 — 136 — — 136 Total derivatives, not subject to a master netting arrangement or similar arrangement 112,480 — 112,480 — — 112,480 Total derivatives 375,829 — 375,829 70,322 99,199 206,308 Total Assets $ 375,829 $ — $ 375,829 $ 70,322 $ 99,199 $ 206,308 The tables below present the derivative instruments by assets and liabilities for the Company as of June 30, 2019 : Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 532,700 $ — $ 532,700 $ 210,744 $ 214,952 $ 107,004 Total derivatives, subject to a master netting arrangement or similar arrangement 532,700 — 532,700 210,744 214,952 107,004 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 13,738 — 13,738 — — 13,738 Embedded derivative - GLWB 97,185 — 97,185 — — 97,185 Other 173 — 173 — — 173 Total derivatives, not subject to a master netting arrangement or similar arrangement 111,096 — 111,096 — — 111,096 Total derivatives 643,796 — 643,796 210,744 214,952 218,100 Total Assets $ 643,796 $ — $ 643,796 $ 210,744 $ 214,952 $ 218,100 |
Schedule of Derivative Instruments by Liabilities | Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 125,519 $ — $ 125,519 $ 70,322 $ 47,856 $ 7,341 Total derivatives, subject to a master netting arrangement or similar arrangement 125,519 — 125,519 70,322 47,856 7,341 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 32,828 — 32,828 — — 32,828 Embedded derivative - GLWB 289,343 — 289,343 — — 289,343 Embedded derivative - FIA 217,288 — 217,288 — — 217,288 Embedded derivative - IUL 90,231 — 90,231 — — 90,231 Other 252 — 252 — — 252 Total derivatives, not subject to a master netting arrangement or similar arrangement 629,942 — 629,942 — — 629,942 Total derivatives 755,461 — 755,461 70,322 47,856 637,283 Repurchase agreements (1) 418,090 — 418,090 — — 418,090 Total Liabilities $ 1,173,551 $ — $ 1,173,551 $ 70,322 $ 47,856 $ 1,055,373 (1) Borrowings under repurchase agreements are for a term less than 90 days. Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 222,116 $ — $ 222,116 $ 210,744 $ 11,215 $ 157 Total derivatives, subject to a master netting arrangement or similar arrangement 222,116 — 222,116 210,744 11,215 157 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 188,853 — 188,853 — — 188,853 Embedded derivative - GLWB 471,199 — 471,199 — — 471,199 Embedded derivative - FIA 298,721 — 298,721 — — 298,721 Embedded derivative - IUL 136,660 — 136,660 — — 136,660 Other 1,644 — 1,644 — — 1,644 Total derivatives, not subject to a master netting arrangement or similar arrangement 1,097,077 — 1,097,077 — — 1,097,077 Total derivatives 1,319,193 — 1,319,193 210,744 11,215 1,097,234 Repurchase agreements (1) 60,000 — 60,000 — — 60,000 Total Liabilities $ 1,379,193 $ — $ 1,379,193 $ 210,744 $ 11,215 $ 1,157,234 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
MORTGAGE LOANS (Tables)
MORTGAGE LOANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Mortgage Loans [Abstract] | |
Allowance for Credit Losses on Financing Receivables | As of June 30, 2019 and December 31, 2018 , the Company had an allowance for mortgage loan credit losses of $2.5 million and $1.3 million , respectively, which is shown in the chart below. As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Beginning balance $ 1,296 $ — Charge offs (350 ) — Recoveries — (209 ) Provision 1,535 1,505 Ending balance $ 2,481 $ 1,296 |
Schedule of an Analysis of the Delinquent Loans | The carrying value of the delinquent loans is shown in the following chart. Greater 30-59 Days 60-89 Days than 90 Days Total As of June 30, 2019 Delinquent Delinquent Delinquent Delinquent (Dollars In Thousands) Commercial mortgage loans $ 8,405 $ — $ 83 $ 8,488 Number of delinquent commercial mortgage loans 2 — 1 3 As of December 31, 2018 Commercial mortgage loans $ 1,044 $ — $ 1,234 $ 2,278 Number of delinquent commercial mortgage loans 4 — 1 5 |
Impaired Financing Receivables | The following table includes the recorded investment, unpaid principal balance, related allowance, average recorded investment, interest income recognized, and cash basis interest income of commercial loan portfolio as of June 30, 2019 and December 31, 2018: Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Cash Basis Interest Income (Dollars In Thousands) As of June 30, 2019 Commercial mortgage loans: With no related allowance recorded $ 83 $ 83 $ — $ 83 $ — $ — With an allowance recorded $ 9,445 $ 9,305 $ 2,481 $ 3,148 $ 184 $ 217 As of December 31, 2018 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded $ 5,684 $ 5,309 $ 1,296 $ 1,895 $ 267 $ 293 |
Schedule of Loans in Troubled Debt Restructuring | Mortgage loans that were modified in a troubled debt restructuring as of June 30, 2019 and December 31, 2018 were as follows: Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars In Thousands) As of June 30, 2019 Troubled debt restructuring: Commercial mortgage loans 1 $ 1,114 $ 759 As of December 31, 2018 Troubled debt restructuring: Commercial mortgage loans 1 $ 2,688 $ 1,742 |
DEBT AND OTHER OBLIGATIONS (Tab
DEBT AND OTHER OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt and Subordinated Debt Securities | Debt and subordinated debt are summarized as follows: As of June 30, 2019 December 31, 2018 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Credit Facility $ — $ — $ — $ — Term Loan Credit Agreement 600,000 599,627 — — Capital lease obligation 2,560 2,560 1,319 1,319 7.375% Senior Notes (2009), due 2019 400,000 406,627 400,000 416,469 8.45% Senior Notes (2009), due 2039 180,719 273,029 190,044 288,547 4.30% Senior Notes (2018), due 2028 400,000 395,714 400,000 395,492 $ 1,583,279 $ 1,677,557 $ 991,363 $ 1,101,827 Subordinated debt (year of issue): 5.35% Subordinated Debentures (2017), due 2052 $ 500,000 $ 495,494 $ 500,000 $ 495,426 3.55% Subordinated Funding Obligations (2018), due 2038 55,000 55,000 55,000 55,000 3.55% Subordinated Funding Obligations (2018), due 2038 55,000 55,000 55,000 55,000 $ 610,000 $ 605,494 $ 610,000 $ 605,426 |
Non-recourse Funding Obligations Outstanding | Non-recourse funding obligations outstanding as of June 30, 2019 , on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year-to-Date (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 1,803,000 $ 1,803,000 2039 4.75 % Golden Gate II Captive Insurance Company 20,600 17,729 2052 5.60 % Golden Gate V Vermont Captive Insurance Company (2)(3) 695,000 753,503 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,306 2024 6.19 % Total $ 2,519,691 $ 2,576,538 (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, 2018 , 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) $ 1,883,000 $ 1,883,000 2039 4.75 % Golden Gate II Captive Insurance Company 20,600 17,703 2052 4.99 % Golden Gate V Vermont Captive Insurance Company (2)(3) 670,000 729,454 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,340 2024 6.19 % Total $ 2,574,691 $ 2,632,497 (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 amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of June 30, 2019 and December 31, 2018 : Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of June 30, 2019 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 62,611 $ — $ — $ — $ 62,611 Total repurchase agreements and repurchase-to-maturity transactions 62,611 — — — 62,611 Securities lending transactions Corporate securities 57,941 — — — 57,941 Equity securities 14,642 — — — 14,642 Other government related securities 2,488 — — — 2,488 Total securities lending transactions 75,071 — — — 75,071 Total securities $ 137,682 $ — $ — $ — $ 137,682 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, 2018 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 433,182 $ 18,713 $ — $ — $ 451,895 Total repurchase agreements and repurchase-to-maturity transactions $ 433,182 $ 18,713 $ — $ — $ 451,895 Securities lending transactions Fixed maturity securities $ 71,285 $ — $ — $ — $ 71,285 Equity securities 891 — — — 891 Total securities lending transactions 72,176 — — — 72,176 Total securities $ 505,358 $ 18,713 $ — $ — $ 524,071 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
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 three and six months ended June 30, 2019 and 2018 , are as follows: For The For The 2019 2018 2019 2018 Qualified Nonqualified Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Pension Plan Nonqualified Excess Pension Plan Qualified Nonqualified (Dollars In Thousands) Service cost — benefits earned during the period $ 3,114 $ 285 $ 3,441 $ 387 $ 6,228 $ 570 $ 6,882 $ 774 Interest cost on projected benefit obligation 2,778 371 2,397 359 5,556 742 4,794 718 Expected return on plan assets (4,463 ) — (4,026 ) — (8,926 ) — (8,052 ) — Amortization of actuarial loss — 74 — 265 — 148 — 530 Preliminary net periodic benefit cost 1,429 730 1,812 1,011 2,858 1,460 3,624 2,022 Settlement/curtailment expense — — — — — — — Total net periodic benefit costs $ 1,429 $ 730 $ 1,812 $ 1,011 $ 2,858 $ 1,460 $ 3,624 $ 2,022 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Changes in the Accumulated Balances for Each Component of AOCI | The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of June 30, 2019 and December 31, 2018 . Changes in Accumulated Other Comprehensive Income (Loss) by Component 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) Balance, December 31, 2017 $ 25,874 $ 747 $ (13,925 ) $ 12,696 Other comprehensive income (loss) before reclassifications (1,420,499 ) (1,884 ) (3,546 ) (1,425,929 ) Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (20,751 ) — — (20,751 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 15,651 1,130 1,989 18,770 Cumulative effect adjustments (10,552 ) — — (10,552 ) Balance, December 31, 2018 $ (1,410,277 ) $ (7 ) $ (15,482 ) $ (1,425,766 ) Other comprehensive income (loss) before reclassifications 2,131,443 (4,754 ) — 2,126,689 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings 24,316 — — 24,316 Amounts reclassified from accumulated other comprehensive income (loss) (1) (1,876 ) 486 — (1,390 ) Cumulative effect adjustments — — — — Balance, June 30, 2019 $ 743,606 $ (4,275 ) $ (15,482 ) $ 723,849 (1) See Reclassifications Out of Accumulated Other Comprehensive Income (Loss) table below for details. (2) As of December 31, 2018 and June 30, 2019, net unrealized losses reported in AOCI were offset by $613.4 million and $(343.1) 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. |
Schedule of Reclassifications Amounts Out of AOCI | The following tables summarize the reclassifications amounts out of AOCI for the three and six months ended June 30, 2019 and 2018 . Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Condensed Consolidated Gains/(losses) in net income: Statements of Income For The For The 2019 2018 2019 2018 (Dollars In Thousands) Derivative instruments Benefits and settlement expenses, net of reinsurance ceded (1) $ (336 ) $ (205 ) $ (614 ) $ (318 ) Tax (expense) benefit 70 43 128 67 $ (266 ) $ (162 ) $ (486 ) $ (251 ) Unrealized gains and losses on available-for-sale securities Realized investment gains (losses): All other investments $ 1,098 $ 5,539 $ 6,215 $ 8,322 Net impairment losses recognized in earnings (698 ) (5 ) (3,840 ) (3,650 ) Tax (expense) benefit (84 ) (1,162 ) (499 ) (981 ) $ 316 $ 4,372 $ 1,876 $ 3,691 (1) See Note 7, Derivative Financial Instruments for additional information. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: As of June 30, 2019 December 31, 2018 (Dollars In Thousands) Balance, beginning of period $ 7,134 $ 11,353 Additions for tax positions of the current year — — Additions for tax positions of prior years — — Reductions of tax positions of prior years: Changes in judgment — (4,219 ) Settlements during the period (5,343 ) — Lapses of applicable statute of limitations — — Balance, end of period $ 1,791 $ 7,134 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for the Company's Segments | The following tables present a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income: For The For The 2019 2018 2019 2018 (Dollars In Thousands) Revenues Life Marketing $ 441,559 $ 414,954 $ 898,899 $ 849,870 Acquisitions 667,031 509,639 1,276,973 888,733 Annuities 100,407 133,177 239,624 283,890 Stable Value Products 67,585 45,748 127,164 99,616 Asset Protection 76,014 77,814 152,212 154,189 Corporate and Other 66,179 62,576 137,933 133,442 Total revenues $ 1,418,775 $ 1,243,908 $ 2,832,805 $ 2,409,740 Pre-tax Adjusted Operating Income (Loss) Life Marketing $ (462 ) $ (7,737 ) $ 772 $ (25,586 ) Acquisitions 69,810 59,038 144,722 114,558 Annuities 45,271 55,934 99,487 96,465 Stable Value Products 28,106 19,992 50,345 49,072 Asset Protection 9,211 7,166 18,954 13,384 Corporate and Other (20,445 ) (17,797 ) (40,119 ) (38,476 ) Pre-tax adjusted operating income 131,491 116,596 274,161 209,417 Realized (losses) gains on investments and derivatives (1,417 ) (17,824 ) 30,828 (18,847 ) Income before income tax 130,074 98,772 304,989 190,570 Income tax expense (21,963 ) (17,277 ) (58,594 ) (34,963 ) Net income $ 108,111 $ 81,495 $ 246,395 $ 155,607 Pre-tax adjusted operating income $ 131,491 $ 116,596 $ 274,161 $ 209,417 Adjusted operating income tax (expense) benefit (22,261 ) (20,877 ) (52,120 ) (38,920 ) After-tax adjusted operating income 109,230 95,719 222,041 170,497 Realized (losses) gains on investments and derivatives (1,417 ) (17,824 ) 30,828 (18,847 ) Income tax benefit (expense) on adjustments 298 3,600 (6,474 ) 3,957 Net income $ 108,111 $ 81,495 $ 246,395 $ 155,607 Realized investment (losses) gains: Derivative financial instruments $ (148,049 ) $ 12,265 $ (267,720 ) $ 90,324 All other investments 99,502 (49,602 ) 229,092 (137,201 ) Net impairment losses recognized in earnings (698 ) (5 ) (3,840 ) (3,650 ) Less: related amortization (1) (26,840 ) 1,763 (31,201 ) 10,919 Less: VA GLWB economic cost (20,988 ) (21,281 ) (42,095 ) (42,599 ) Realized (losses) gains on investments and derivatives $ (1,417 ) $ (17,824 ) $ 30,828 $ (18,847 ) (1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 15,433,940 $ 52,753,065 $ 21,206,967 $ 5,688,707 DAC and VOBA 1,494,118 914,610 890,214 6,877 Other intangibles 253,243 38,291 172,420 7,056 Goodwill 215,254 23,862 343,247 113,924 Total assets $ 17,396,555 $ 53,729,828 $ 22,612,848 $ 5,816,564 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,055,887 $ 16,390,407 $ 112,528,973 DAC and VOBA 168,738 — 3,474,557 Other intangibles 117,374 28,547 616,931 Goodwill 129,224 — 825,511 Total assets $ 1,471,223 $ 16,418,954 $ 117,445,972 Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,575,702 $ 31,859,520 $ 20,199,597 $ 5,107,334 DAC and VOBA 1,499,386 458,977 889,697 6,121 Other intangibles 262,758 31,975 156,785 7,389 Goodwill 215,254 23,862 343,247 113,924 Total assets $ 16,553,100 $ 32,374,334 $ 21,589,326 $ 5,234,768 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,019,297 $ 12,715,208 $ 85,476,658 DAC and VOBA 168,973 — 3,023,154 Other intangibles 122,590 31,934 613,431 Goodwill 129,224 — 825,511 Total assets $ 1,440,084 $ 12,747,142 $ 89,938,754 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2019USD ($) | |
Deferred Policy Acquisition Costs Tax Reimbursements | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Accounts and premiums receivable | $ 8,960 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jan. 01, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Cumulative effect adjustments | $ (50,808) | $ (92,525) |
Accounting Standards Update 2016-02 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Right-of-use asset | 21,500 | |
Operating lease liability | 21,500 | |
Retained Earnings | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Cumulative effect adjustments | (50,808) | $ (81,973) |
Retained Earnings | Accounting Standards Update 2017-08 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Cumulative effect adjustments | $ 50,800 |
SIGNIFICANT TRANSACTIONS - Narr
SIGNIFICANT TRANSACTIONS - Narrative (Details) - P L I C O - USD ($) | Jun. 03, 2019 | Jun. 01, 2019 | May 01, 2018 |
Life Business | |||
Business Combination Segment Allocation [Line Items] | |||
Coinsurance basis percentage | 100.00% | ||
Ceded commissions for reinsurance | $ 422,400,000 | ||
Statutory reserves resulting from reinsurance, business acquired, estimate | 13,200,000,000 | ||
Statutory reserves resulting from reinsurance business acquired, final amount | $ 13,700,000,000 | ||
Individual Life Business | |||
Business Combination Segment Allocation [Line Items] | |||
Coinsurance basis percentage | 100.00% | ||
Ceded commissions for reinsurance | $ 767,100,000 | ||
Statutory reserves resulting from reinsurance, business acquired, estimate | $ 20,400,000,000 | ||
Contingent consideration | $ 51,900,000 | ||
Range of outcomes, for contingent consideration liability. low | 0 | ||
Range of outcomes for contingent consideration liability, high | 40,000,000 | ||
Contingent consideration liability, estimate | 40,000,000 | ||
Estimate of present value of future payments | $ 11,900,000 |
SIGNIFICANT TRANSACTIONS - Purc
SIGNIFICANT TRANSACTIONS - Purchase Consideration (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 01, 2019 | May 01, 2018 | |
Life Business | |||||||
Pro Forma [Abstract] | |||||||
Revenue | $ 1,317,159 | $ 2,733,479 | |||||
Net income | 88,883 | 201,751 | |||||
Individual Life Business | |||||||
Pro Forma [Abstract] | |||||||
Revenue | $ 1,548,668 | 1,461,832 | $ 3,203,698 | 2,828,369 | |||
Net income | $ 124,161 | $ 122,977 | 263,490 | $ 182,034 | |||
Revenue since acquisition date | $ 77,700 | ||||||
Net income since acquisition date | $ 7,700 | ||||||
P L I C O | Life Business | |||||||
ASSETS | |||||||
Fixed maturities | $ 12,588,512 | ||||||
Mortgage loans | 435,405 | ||||||
Policy loans | 131,489 | ||||||
Total investments | 13,155,406 | ||||||
Cash | 35,179 | ||||||
Accrued investment income | 152,030 | ||||||
Reinsurance receivables | 272 | ||||||
Value of business acquired | 379,717 | ||||||
Other assets | 916 | ||||||
Total assets | 13,723,520 | ||||||
LIABILITIES | |||||||
Future policy benefits and claims | 11,751,895 | ||||||
Unearned premiums | 0 | ||||||
Total policy liabilities and accruals | 11,751,895 | ||||||
Annuity account balances | 1,864,141 | ||||||
Other policyholders’ funds | 41,936 | ||||||
Other liabilities | 65,548 | ||||||
Total liabilities | 13,723,520 | ||||||
NET ASSETS ACQUIRED | $ 0 | ||||||
P L I C O | Individual Life Business | |||||||
ASSETS | |||||||
Fixed maturities | $ 8,697,533 | ||||||
Mortgage loans | 1,386,228 | ||||||
Policy loans | 44,002 | ||||||
Other long-term investments | 1,579 | ||||||
Total investments | 10,129,342 | ||||||
Cash | 35,607 | ||||||
Accrued investment income | 101,306 | ||||||
Accounts and premiums receivable | 62 | ||||||
Reinsurance receivables | 1,657 | ||||||
Value of business acquired | 491,493 | ||||||
Other intangibles | 28,600 | ||||||
Other assets | 1,537,848 | ||||||
Assets related to separate accounts | 9,583,217 | ||||||
Total assets | 21,909,132 | ||||||
LIABILITIES | |||||||
Future policy benefits and claims | 10,993,716 | ||||||
Annuity account balances | 253,748 | ||||||
Other policyholders’ funds | 220,117 | ||||||
Other liabilities | 39,370 | ||||||
Liabilities related to separate accounts | 9,583,217 | ||||||
Total liabilities | 21,090,168 | ||||||
NET ASSETS ACQUIRED | $ 818,964 | ||||||
Transaction costs | Individual Life Business | |||||||
Pro Forma [Abstract] | |||||||
Net income | $ 12,200 |
SIGNIFICANT TRANSACTIONS - Inta
SIGNIFICANT TRANSACTIONS - Intangible Assets and VOBA (Details) - Individual Life Business - USD ($) $ in Thousands | Jun. 01, 2019 | Jun. 30, 2019 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2019 | $ 1,279 | |
2020 | 2,193 | |
2021 | 2,193 | |
2022 | 2,193 | |
2023 | 2,193 | |
Expected Amortization Expense VOBA [Abstract] | ||
Remainder of 2019 | (4,966) | |
2020 | (12,292) | |
2021 | (6,807) | |
2022 | (1,010) | |
2023 | $ 3,259 | |
Distribution relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 18 years | |
Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | |
P L I C O | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | $ 28,600 | |
P L I C O | Distribution relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | 15,000 | |
P L I C O | Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | $ 13,600 |
MONY CLOSED BLOCK OF BUSINESS -
MONY CLOSED BLOCK OF BUSINESS - Summary of Financial Information for the Closed Block (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Closed block liabilities | ||||
Future policy benefits, policyholders’ account balances and other policyholder liabilities | $ 5,611,917 | $ 5,679,732 | ||
Policyholder dividend obligation | 173,147 | 0 | $ 0 | $ 160,712 |
Other liabilities | 11,043 | 22,505 | ||
Total closed block liabilities | 5,796,107 | 5,702,237 | ||
Closed block assets | ||||
Fixed maturities, available-for-sale, at fair value | 4,583,161 | 4,257,437 | ||
Mortgage loans on real estate | 74,290 | 75,838 | ||
Policy loans | 658,971 | 672,213 | ||
Cash | 55,960 | 116,225 | ||
Other assets | 107,306 | 136,388 | ||
Total closed block assets | 5,479,688 | 5,258,101 | ||
Excess of reported closed block liabilities over closed block assets | 316,419 | 444,136 | ||
Portion of above representing accumulated other comprehensive income: | ||||
Net unrealized investment gains (losses) net of policyholder dividend obligation: $47,972 and $(141,128); and net of income tax: $(10,074) and $61,676 | 0 | (120,528) | ||
Future earnings to be recognized from closed block assets and closed block liabilities | 316,419 | 323,608 | ||
Policyholder dividend obligation | 47,972 | (141,128) | ||
Deferred income tax expense (benefit) | $ (10,074) | $ 61,676 |
MONY CLOSED BLOCK OF BUSINESS_2
MONY CLOSED BLOCK OF BUSINESS - Schedule of Reconciliation of the Policyholder Dividend Obligation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Movement in Closed Block Dividend Obligation [Roll Forward] | ||
Policyholder dividend obligation, beginning of period | $ 0 | $ 160,712 |
Applicable to net revenue (losses) | (15,953) | (19,536) |
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation | 189,100 | (141,176) |
Policyholder dividend obligation, end of period | $ 173,147 | $ 0 |
MONY CLOSED BLOCK OF BUSINESS_3
MONY CLOSED BLOCK OF BUSINESS - Schedule of Closed Block Revenues and Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Premiums and other income | $ 40,105 | $ 42,465 | $ 77,549 | $ 82,077 |
Net investment income | 51,663 | 50,872 | 102,791 | 101,415 |
Net investment gains (losses) | 43 | 263 | (411) | 26 |
Total revenues | 91,811 | 93,600 | 179,929 | 183,518 |
Benefits and other deductions | ||||
Benefits and settlement expenses | 87,213 | 87,940 | 165,879 | 167,892 |
Other operating expenses | 247 | 337 | 606 | 20 |
Total benefits and other deductions | 87,460 | 88,277 | 166,485 | 167,912 |
Net revenues before income taxes | 4,351 | 5,323 | 13,444 | 15,606 |
Income tax expense | 913 | 1,118 | 2,823 | 3,277 |
Net revenues | $ 3,438 | $ 4,205 | $ 10,621 | $ 12,329 |
INVESTMENT OPERATIONS - Summary
INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for all Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Fixed maturities | $ 1,098 | $ 5,539 | $ 6,215 | $ 8,322 |
Equity gains and losses | 7,696 | (1,044) | 38,413 | (9,830) |
Modco trading portfolio | 89,571 | (52,817) | 184,473 | (137,525) |
Other investments | 1,137 | (1,280) | (9) | 1,832 |
Realized gains (losses) - all other investments | 99,502 | (49,602) | 229,092 | (137,201) |
Derivative financial instruments | (148,049) | 12,265 | (267,720) | 90,324 |
Realized investment gains (losses) | (48,547) | (37,337) | (38,628) | (46,877) |
Net impairments losses recognized in earnings | $ (698) | $ (5) | $ (3,840) | $ (3,650) |
INVESTMENT OPERATIONS - Schedul
INVESTMENT OPERATIONS - Schedule of Gross Realized Gains (Losses) on Investments Available-for-Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 6,812 | $ 10,137 | $ 14,682 | $ 18,187 |
Gross realized losses: | ||||
Impairment losses | (698) | (5) | (3,840) | (3,650) |
Other realized losses | $ (5,714) | $ (4,598) | $ (8,467) | $ (9,865) |
INVESTMENT OPERATIONS - Sched_2
INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains (Losses) Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Securities in an unrealized gain position: | ||||
Fair value (proceeds) | $ 491,121 | $ 466,153 | $ 1,140,012 | $ 608,286 |
Gains realized | 6,812 | 10,137 | 14,682 | 18,187 |
Securities in an unrealized loss position: | ||||
Fair value (proceeds) | 160,125 | 201,191 | 338,129 | 258,175 |
Losses realized | $ (5,714) | $ (4,598) | $ (8,467) | $ (9,865) |
INVESTMENT OPERATIONS - Sched_3
INVESTMENT OPERATIONS - Schedule of Realized Gain(Losses) on Equity Securities Sold (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Net gains (losses) recognized during the period on equity securities | $ 7,696 | $ (1,044) | $ 38,413 | $ (9,830) |
Less: net gains (losses) recognized on equity securities sold during the period | 193 | (680) | 253 | (2,381) |
Gains (losses) recognized during the period on equity securities still held | $ 7,503 | $ (364) | $ 38,160 | $ (7,449) |
INVESTMENT OPERATIONS - Sched_4
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Investment [Line Items] | ||
Amortized Cost | $ 61,985,929 | $ 52,826,470 |
Gross Unrealized Gains | 1,977,685 | 189,175 |
Gross Unrealized Losses | (616,275) | (2,750,781) |
Fair Value | 63,347,339 | 50,264,864 |
Total OTTI Recognized in OCI | 1,954 | (28,827) |
Residential mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 4,482,547 | 3,650,539 |
Gross Unrealized Gains | 132,602 | 23,247 |
Gross Unrealized Losses | (8,901) | (62,196) |
Fair Value | 4,606,248 | 3,611,590 |
Total OTTI Recognized in OCI | (18) | |
Commercial mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 2,648,121 | 2,349,274 |
Gross Unrealized Gains | 51,634 | 3,911 |
Gross Unrealized Losses | (3,894) | (58,101) |
Fair Value | 2,695,861 | 2,295,084 |
Total OTTI Recognized in OCI | 0 | |
Other asset-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,848,061 | 1,410,059 |
Gross Unrealized Gains | 22,063 | 17,232 |
Gross Unrealized Losses | (8,526) | (35,398) |
Fair Value | 1,861,598 | 1,391,893 |
Total OTTI Recognized in OCI | (3) | 0 |
U.S. government-related securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,304,382 | 1,683,432 |
Gross Unrealized Gains | 5,179 | 1,795 |
Gross Unrealized Losses | (9,004) | (45,722) |
Fair Value | 1,300,557 | 1,639,505 |
Total OTTI Recognized in OCI | 0 | |
Other government-related securities | ||
Investment [Line Items] | ||
Amortized Cost | 555,767 | 545,522 |
Gross Unrealized Gains | 31,550 | 4,292 |
Gross Unrealized Losses | (4,168) | (33,850) |
Fair Value | 583,149 | 515,964 |
Total OTTI Recognized in OCI | 0 | |
States, municipals, and political subdivisions | ||
Investment [Line Items] | ||
Amortized Cost | 4,652,897 | 3,682,037 |
Gross Unrealized Gains | 183,920 | 25,706 |
Gross Unrealized Losses | (5,851) | (118,902) |
Fair Value | 4,830,966 | 3,588,841 |
Total OTTI Recognized in OCI | 1,193 | 876 |
Corporate securities | ||
Investment [Line Items] | ||
Amortized Cost | 45,267,764 | 38,634,888 |
Gross Unrealized Gains | 1,549,526 | 112,992 |
Gross Unrealized Losses | (572,173) | (2,385,052) |
Fair Value | 46,245,117 | 36,362,828 |
Total OTTI Recognized in OCI | 764 | (29,685) |
Redeemable preferred stocks | ||
Investment [Line Items] | ||
Amortized Cost | 87,459 | 94,362 |
Gross Unrealized Gains | 1,211 | 0 |
Gross Unrealized Losses | (3,758) | (11,560) |
Fair Value | 84,912 | 82,802 |
Total OTTI Recognized in OCI | 0 | |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 60,846,998 | 52,050,113 |
Gross Unrealized Gains | 1,977,685 | 189,175 |
Gross Unrealized Losses | (616,275) | (2,750,781) |
Fair Value | 62,208,408 | 49,488,507 |
Total OTTI Recognized in OCI | 1,954 | (28,827) |
Short-term investments | ||
Investment [Line Items] | ||
Amortized Cost | 1,138,931 | 776,357 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,138,931 | 776,357 |
Total OTTI Recognized in OCI | $ 0 | $ 0 |
INVESTMENT OPERATIONS - Sched_5
INVESTMENT OPERATIONS - Schedule of Fair Value of Trading Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Trading Securities [Line Items] | ||
Trading securities | $ 2,592,645 | $ 2,457,010 |
Residential mortgage-backed securities | ||
Trading Securities [Line Items] | ||
Trading securities | 203,455 | 241,836 |
Commercial mortgage-backed securities | ||
Trading Securities [Line Items] | ||
Trading securities | 204,445 | 188,925 |
Other asset-backed securities | ||
Trading Securities [Line Items] | ||
Trading securities | 147,997 | 159,907 |
U.S. government-related securities | ||
Trading Securities [Line Items] | ||
Trading securities | 51,080 | 59,794 |
Other government-related securities | ||
Trading Securities [Line Items] | ||
Trading securities | 24,342 | 44,207 |
States, municipals, and political subdivisions | ||
Trading Securities [Line Items] | ||
Trading securities | 293,560 | 286,413 |
Corporate securities | ||
Trading Securities [Line Items] | ||
Trading securities | 1,565,561 | 1,423,833 |
Redeemable preferred stocks | ||
Trading Securities [Line Items] | ||
Trading securities | 11,808 | 11,277 |
Fixed maturities | ||
Trading Securities [Line Items] | ||
Trading securities | 2,502,248 | 2,416,192 |
Equity securities | ||
Trading Securities [Line Items] | ||
Trading securities | 8,488 | 9,892 |
Short-term investments | ||
Trading Securities [Line Items] | ||
Trading securities | $ 81,909 | $ 30,926 |
INVESTMENT OPERATIONS - Sched_6
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 | Jun. 30, 2019 | Dec. 31, 2018 |
Available-for-sale, Amortized Cost | ||
Amortized Cost | $ 61,985,929 | $ 52,826,470 |
Available-for-sale, Fair Value | ||
Fair Value | 63,347,339 | 50,264,864 |
Held-to-maturity, Fair Value | ||
Fair Value | 2,640,827 | 2,547,210 |
Fixed maturities | ||
Available-for-sale, Amortized Cost | ||
Due in one year or less | 1,440,860 | |
Due after one year through five years | 10,103,874 | |
Due after five years through ten years | 13,210,907 | |
Due after ten years | 36,091,357 | |
Amortized Cost | 60,846,998 | |
Available-for-sale, Fair Value | ||
Due in one year or less | 1,438,699 | |
Due after one year through five years | 10,229,353 | |
Due after five years through ten years | 13,623,029 | |
Due after ten years | 36,917,327 | |
Fair Value | 62,208,408 | |
Held-to-maturity, 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 | 2,576,216 | |
Amortized Cost | 2,576,216 | 2,633,474 |
Held-to-maturity, 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 | 2,640,827 | |
Fair Value | $ 2,640,827 | $ 2,547,210 |
INVESTMENT OPERATIONS - Sched_7
INVESTMENT OPERATIONS - Schedule of Other-than-Temporary Impairments of Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investment [Line Items] | ||||
Other-than-temporary impairments | $ 198 | $ 10 | $ 1,493 | $ 701 |
Net impairment losses recognized in earnings | (698) | (5) | (3,840) | (3,650) |
Fixed maturities | ||||
Investment [Line Items] | ||||
Other-than-temporary impairments | (198) | (10) | (1,493) | (701) |
Non-credit impairment losses recorded in other comprehensive income (loss) | (500) | 5 | (2,347) | (2,949) |
Net impairment losses recognized in earnings | $ (698) | $ (5) | $ (3,840) | $ (3,650) |
INVESTMENT OPERATIONS - Sched_8
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 (Loss) (Details) - Fixed maturities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||||
Beginning balance | $ 27,215 | $ 2,235 | $ 24,868 | $ 3,268 |
Additions for newly impaired securities | 0 | 0 | 751 | 0 |
Additions for previously impaired securities | 660 | 2 | 3,007 | 2 |
Reductions for previously impaired securities due to a change in expected cash flows | (8,202) | 0 | (8,834) | 0 |
Reductions for previously impaired securities that were sold in the current period | (7,175) | (2,235) | (7,294) | (3,268) |
Ending balance | $ 12,498 | $ 2 | $ 12,498 | $ 2 |
INVESTMENT OPERATIONS - Sched_9
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 | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value | ||
Less Than 12 Months | $ 1,828,002 | $ 22,322,949 |
12 Months or More | 12,762,688 | 17,630,381 |
Total | 14,590,690 | 39,953,330 |
Unrealized Loss | ||
Less Than 12 Months | (59,528) | (1,091,842) |
12 Months or More | (556,747) | (1,658,939) |
Total | (616,275) | (2,750,781) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 118,932 | 1,485,009 |
12 Months or More | 576,350 | 804,364 |
Total | 695,282 | 2,289,373 |
Unrealized Loss | ||
Less Than 12 Months | (427) | (31,302) |
12 Months or More | (8,474) | (30,894) |
Total | (8,901) | (62,196) |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 3,609 | 422,438 |
12 Months or More | 574,967 | 1,429,384 |
Total | 578,576 | 1,851,822 |
Unrealized Loss | ||
Less Than 12 Months | (6) | (7,442) |
12 Months or More | (3,888) | (50,659) |
Total | (3,894) | (58,101) |
Other asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 409,753 | 687,271 |
12 Months or More | 134,156 | 148,871 |
Total | 543,909 | 836,142 |
Unrealized Loss | ||
Less Than 12 Months | (5,931) | (30,963) |
12 Months or More | (2,595) | (4,435) |
Total | (8,526) | (35,398) |
U.S. government-related securities | ||
Fair Value | ||
Less Than 12 Months | 32,421 | 130,290 |
12 Months or More | 902,249 | 1,085,654 |
Total | 934,670 | 1,215,944 |
Unrealized Loss | ||
Less Than 12 Months | (314) | (4,668) |
12 Months or More | (8,690) | (41,054) |
Total | (9,004) | (45,722) |
Other government-related securities | ||
Fair Value | ||
Less Than 12 Months | 5,509 | 226,201 |
12 Months or More | 93,790 | 131,569 |
Total | 99,299 | 357,770 |
Unrealized Loss | ||
Less Than 12 Months | (198) | (15,267) |
12 Months or More | (3,970) | (18,583) |
Total | (4,168) | (33,850) |
States, municipals, and political subdivisions | ||
Fair Value | ||
Less Than 12 Months | 13,242 | 1,004,262 |
12 Months or More | 145,668 | 1,129,152 |
Total | 158,910 | 2,133,414 |
Unrealized Loss | ||
Less Than 12 Months | (13) | (27,180) |
12 Months or More | (5,838) | (91,722) |
Total | (5,851) | (118,902) |
Corporate securities | ||
Fair Value | ||
Less Than 12 Months | 1,244,536 | 18,326,331 |
12 Months or More | 10,318,328 | 12,859,732 |
Total | 11,562,864 | 31,186,063 |
Unrealized Loss | ||
Less Than 12 Months | (52,639) | (970,553) |
12 Months or More | (519,534) | (1,414,499) |
Total | (572,173) | (2,385,052) |
Redeemable preferred stocks | ||
Fair Value | ||
Less Than 12 Months | 0 | 41,147 |
12 Months or More | 17,180 | 41,655 |
Total | 17,180 | 82,802 |
Unrealized Loss | ||
Less Than 12 Months | 0 | (4,467) |
12 Months or More | (3,758) | (7,093) |
Total | $ (3,758) | $ (11,560) |
INVESTMENT OPERATIONS - Additio
INVESTMENT OPERATIONS - Additional Information (Details) | Jan. 15, 2016 | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($)subsidiary |
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | $ 556,747,000 | $ 1,658,939,000 | |
Total positions that were in an unrealized loss position | 1,322 | ||
Fair Value | $ 63,347,339,000 | 50,264,864,000 | |
Available-for-sale securities, amortized cost | 61,985,929,000 | 52,826,470,000 | |
Trading securities | $ 2,592,645,000 | $ 2,457,010,000 | |
Red Mountain and Steel City | |||
Investment [Line Items] | |||
Number of wholly owned subsidiaries that were determined to be VIEs | 2 | 2 | |
Red Mountain, LLC | |||
Investment [Line Items] | |||
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, LLC | |||
Investment [Line Items] | |||
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 | ||
Number of notes issued | 3 | ||
Below investment grade | |||
Investment [Line Items] | |||
Fair Value | 1,600,000,000 | ||
Available-for-sale securities, amortized cost | 1,700,000,000 | ||
Trading securities | 119,900,000 | ||
Securities not publicly traded | 275,600,000 | ||
Residential mortgage-backed securities | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | 8,474,000 | $ 30,894,000 | |
Trading securities | 203,455,000 | 241,836,000 | |
Commercial mortgage-backed securities | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | 3,888,000 | 50,659,000 | |
Trading securities | 204,445,000 | 188,925,000 | |
Other asset-backed securities | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | $ 2,595,000 | 4,435,000 | |
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum | 97.00% | ||
Trading securities | $ 147,997,000 | 159,907,000 | |
U.S. government-related securities | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | 8,690,000 | 41,054,000 | |
Trading securities | 51,080,000 | 59,794,000 | |
Other government-related securities | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | 3,970,000 | 18,583,000 | |
Trading securities | 24,342,000 | 44,207,000 | |
States, municipals, and political subdivisions | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | 5,838,000 | 91,722,000 | |
Trading securities | 293,560,000 | 286,413,000 | |
Corporate securities | |||
Investment [Line Items] | |||
Gross unrealized loss greater than twelve months | 519,534,000 | 1,414,499,000 | |
Trading securities | 1,565,561,000 | 1,423,833,000 | |
Fixed maturities | |||
Investment [Line Items] | |||
Fair Value | 62,208,408,000 | ||
Available-for-sale securities, amortized cost | 60,846,998,000 | ||
Trading securities | 2,502,248,000 | 2,416,192,000 | |
Gross unrecognized holding gains | 78,860,000 | 0 | |
Gross unrecognized holding losses | $ 14,249,000 | $ 86,264,000 |
INVESTMENT OPERATIONS - Summa_2
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Fixed maturities | ||||
Investment Holdings [Line Items] | ||||
Change in unrealized gains (losses), net of income tax | $ 1,541,352 | $ (585,527) | $ 3,099,183 | $ (1,505,298) |
INVESTMENT OPERATIONS - Sche_10
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Investment [Line Items] | ||
Fair Value | $ 2,640,827 | $ 2,547,210 |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 2,576,216 | 2,633,474 |
Gross Unrecognized Holding Gains | 78,860 | 0 |
Gross Unrecognized Holding Losses | (14,249) | (86,264) |
Fair Value | 2,640,827 | 2,547,210 |
Total OTTI Recognized in OCI | 0 | 0 |
Fixed maturities | Red Mountain, LLC | ||
Investment [Line Items] | ||
Amortized Cost | 773,216 | 750,474 |
Gross Unrecognized Holding Gains | 0 | 0 |
Gross Unrecognized Holding Losses | (14,249) | (81,657) |
Fair Value | 758,967 | 668,817 |
Total OTTI Recognized in OCI | 0 | 0 |
Fixed maturities | Steel City, LLC | ||
Investment [Line Items] | ||
Amortized Cost | 1,803,000 | 1,883,000 |
Gross Unrecognized Holding Gains | 78,860 | 0 |
Gross Unrecognized Holding Losses | 0 | (4,607) |
Fair Value | 1,881,860 | 1,878,393 |
Total OTTI Recognized in OCI | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Fixed maturity securities - available-for-sale | $ 63,347,339 | $ 50,264,864 |
Fixed maturity securities - trading | 2,592,645 | 2,457,010 |
Total fixed maturity securities | 64,710,656 | 51,904,699 |
Equity securities | 629,965 | 595,884 |
Other long-term investments | 643,796 | 375,829 |
Short-term investments | 1,220,840 | 807,283 |
Assets related to separate accounts: | ||
Variable annuity | 12,790,474 | 12,288,919 |
Variable universal life | 1,073,020 | 937,732 |
Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 62,208,408 | |
Fixed maturity securities - trading | 2,502,248 | 2,416,192 |
Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - trading | 203,455 | 241,836 |
Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - trading | 204,445 | 188,925 |
Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - trading | 147,997 | 159,907 |
Other government-related securities | ||
Assets: | ||
Fixed maturity securities - trading | 24,342 | 44,207 |
States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - trading | 293,560 | 286,413 |
Corporate securities | ||
Assets: | ||
Fixed maturity securities - trading | 1,565,561 | 1,423,833 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Total investments | 418,178 | 421,458 |
Level 3 | Corporate securities | ||
Assets: | ||
Total investments | 1,328,490 | 631,068 |
Measured at fair value on a recurring basis | ||
Assets: | ||
Total fixed maturity securities | 64,710,656 | 51,904,699 |
Equity securities | 629,965 | 595,884 |
Other long-term investments | 643,796 | 375,829 |
Short-term investments | 1,220,840 | 807,283 |
Total investments | 67,205,257 | 53,683,695 |
Cash | 240,157 | 173,714 |
Other assets | 34,335 | 29,257 |
Assets related to separate accounts: | ||
Variable annuity | 12,790,474 | 12,288,919 |
Variable universal life | 1,073,020 | 937,732 |
Total assets measured at fair value on a recurring basis | 81,343,243 | 67,113,317 |
Liabilities: | ||
Annuity account balances | 72,585 | 76,119 |
Other liabilities | 1,319,193 | 755,461 |
Total liabilities measured at fair value on a recurring basis | 1,391,778 | 831,580 |
Measured at fair value on a recurring basis | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 62,208,408 | 49,488,507 |
Fixed maturity securities - trading | 2,502,248 | 2,416,192 |
Measured at fair value on a recurring basis | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 4,606,248 | 3,611,590 |
Fixed maturity securities - trading | 203,455 | 241,836 |
Measured at fair value on a recurring basis | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 2,695,861 | 2,295,084 |
Fixed maturity securities - trading | 204,445 | 188,925 |
Measured at fair value on a recurring basis | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,861,598 | 1,391,893 |
Fixed maturity securities - trading | 147,997 | 159,907 |
Measured at fair value on a recurring basis | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,300,557 | 1,639,505 |
Fixed maturity securities - trading | 51,080 | 59,794 |
Measured at fair value on a recurring basis | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 583,149 | 515,964 |
Fixed maturity securities - trading | 24,342 | 44,207 |
Measured at fair value on a recurring basis | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 4,830,966 | 3,588,841 |
Fixed maturity securities - trading | 293,560 | 286,413 |
Measured at fair value on a recurring basis | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 46,245,117 | 36,362,828 |
Fixed maturity securities - trading | 1,565,561 | 1,423,833 |
Measured at fair value on a recurring basis | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 84,912 | 82,802 |
Fixed maturity securities - trading | 11,808 | 11,277 |
Measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total fixed maturity securities | 989,522 | 1,114,751 |
Equity securities | 560,302 | 531,523 |
Other long-term investments | 65,231 | 83,047 |
Short-term investments | 1,153,978 | 730,067 |
Total investments | 2,769,033 | 2,459,388 |
Cash | 240,157 | 173,714 |
Other assets | 34,335 | 29,257 |
Assets related to separate accounts: | ||
Variable annuity | 12,790,474 | 12,288,919 |
Variable universal life | 1,073,020 | 937,732 |
Total assets measured at fair value on a recurring basis | 16,907,019 | 15,889,010 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 23,552 | 56,018 |
Total liabilities measured at fair value on a recurring basis | 23,552 | 56,018 |
Measured at fair value on a recurring basis | Level 1 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 951,785 | 1,076,021 |
Fixed maturity securities - trading | 37,737 | 38,730 |
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 884,053 | 1,010,485 |
Fixed maturity securities - trading | 25,929 | 27,453 |
Measured at fair value on a recurring basis | Level 1 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 67,732 | 65,536 |
Fixed maturity securities - trading | 11,808 | 11,277 |
Measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total fixed maturity securities | 61,897,493 | 49,697,732 |
Equity securities | 36 | 36 |
Other long-term investments | 467,642 | 180,438 |
Short-term investments | 66,862 | 77,216 |
Total investments | 62,432,033 | 49,955,422 |
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 | 62,432,033 | 49,955,422 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 198,564 | 69,501 |
Total liabilities measured at fair value on a recurring basis | 198,564 | 69,501 |
Measured at fair value on a recurring basis | Level 2 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 59,500,456 | 47,352,568 |
Fixed maturity securities - trading | 2,397,037 | 2,345,164 |
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 4,606,248 | 3,611,590 |
Fixed maturity securities - trading | 203,455 | 241,836 |
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 2,686,495 | 2,295,084 |
Fixed maturity securities - trading | 204,445 | 188,925 |
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,443,288 | 970,251 |
Fixed maturity securities - trading | 85,817 | 133,851 |
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 416,504 | 629,020 |
Fixed maturity securities - trading | 25,151 | 32,341 |
Measured at fair value on a recurring basis | Level 2 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 583,149 | 515,964 |
Fixed maturity securities - trading | 24,342 | 44,207 |
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 4,830,966 | 3,588,841 |
Fixed maturity securities - trading | 293,560 | 286,413 |
Measured at fair value on a recurring basis | Level 2 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 44,916,626 | 35,724,552 |
Fixed maturity securities - trading | 1,560,267 | 1,417,591 |
Measured at fair value on a recurring basis | Level 2 | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 17,180 | 17,266 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Total fixed maturity securities | 1,823,641 | 1,092,216 |
Equity securities | 69,627 | 64,325 |
Other long-term investments | 110,923 | 112,344 |
Short-term investments | 0 | 0 |
Total investments | 2,004,191 | 1,268,885 |
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 | 2,004,191 | 1,268,885 |
Liabilities: | ||
Annuity account balances | 72,585 | 76,119 |
Other liabilities | 1,097,077 | 629,942 |
Total liabilities measured at fair value on a recurring basis | 1,169,662 | 706,061 |
Measured at fair value on a recurring basis | Level 3 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,756,167 | 1,059,918 |
Fixed maturity securities - trading | 67,474 | 32,298 |
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 9,366 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 418,310 | 421,642 |
Fixed maturity securities - trading | 62,180 | 26,056 |
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,328,491 | 638,276 |
Fixed maturity securities - trading | 5,294 | 6,242 |
Measured at fair value on a recurring basis | Level 3 | Redeemable preferred stocks | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Number of sources of information considered | 1 | |||||||
Number of sources of information | 3 | |||||||
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services | 91.80% | |||||||
Number of broker quotes obtained per security | 2 | |||||||
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations | 100.00% | |||||||
Financial instruments with book value approximating fair value | $ 68,700,000 | $ 68,700,000 | $ 63,600,000 | |||||
Transfers into Level 3 | 50,100,000 | $ 11,100,000 | 86,100,000 | $ 11,100,000 | ||||
Securities transferred from level 3 to level 2 | 1,600,000 | 18,600,000 | 20,600,000 | 18,600,000 | ||||
Transfers from Level 2 to Level 1 | 0 | 0 | 0 | 0 | ||||
Transfers from Level 1 | 0 | 0 | 0 | 0 | ||||
Level 3 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Level 3 fair value | 1,169,662,000 | 653,014,000 | 1,169,662,000 | 653,014,000 | $ 872,504,000 | 706,061,000 | $ 702,501,000 | $ 844,362,000 |
Financial instruments that are valued using broker quotes | 77,900,000 | 77,900,000 | 40,400,000 | |||||
Level 3 | Annuity account | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Level 3 fair value | 72,585,000 | $ 80,098,000 | 72,585,000 | $ 80,098,000 | $ 74,613,000 | 76,119,000 | $ 81,399,000 | $ 83,472,000 |
Asset-backed securities | Level 2 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 9,200,000,000 | 9,200,000,000 | ||||||
Asset-backed securities | Level 3 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 489,900,000 | $ 489,900,000 | ||||||
Other asset-backed securities | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum | 97.00% | |||||||
Other asset-backed securities | Level 3 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 418,178,000 | $ 418,178,000 | 421,458,000 | |||||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum | 97.00% | |||||||
Financial instruments that are valued using broker quotes | 71,700,000 | $ 71,700,000 | 26,200,000 | |||||
Other asset-backed securities | Level 3 | Available-for-sale securities | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 427,700,000 | 427,700,000 | ||||||
Other asset-backed securities | Level 3 | Trading securities | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 62,200,000 | 62,200,000 | ||||||
Corporate bonds and securities | Level 2 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 52,700,000,000 | 52,700,000,000 | ||||||
Corporate bonds and securities | Level 3 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 1,300,000,000 | 1,300,000,000 | ||||||
Equity securities | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 69,700,000 | 69,700,000 | ||||||
Federal Home Loan Bank (FHLB) stock | 68,500,000 | 68,500,000 | ||||||
Equity securities | Level 3 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Financial instruments that are valued using broker quotes | 900,000 | $ 900,000 | 700,000 | |||||
Embedded derivative - GLWB | Minimum | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Mortality (as a percent) | 87.00% | |||||||
Embedded derivative - GLWB | Maximum | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Mortality (as a percent) | 100.00% | |||||||
Embedded derivative - FIA | Minimum | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Mortality (as a percent) | 87.00% | |||||||
Embedded derivative - FIA | Maximum | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Mortality (as a percent) | 100.00% | |||||||
Embedded derivative - IUL | Minimum | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Mortality (as a percent) | 37.00% | |||||||
Embedded derivative - IUL | Maximum | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Mortality (as a percent) | 577.00% | |||||||
Embedded derivative - Modified coinsurance agreements | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Statutory policy liabilities (net of policy loans) | 3,500,000,000 | $ 3,500,000,000 | ||||||
Embedded derivative - Modified coinsurance agreements | Trading securities | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 210,500,000 | 210,500,000 | ||||||
Corporate securities | Level 3 | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||
Fair value | 1,328,490,000 | 1,328,490,000 | 631,068,000 | |||||
Financial instruments that are valued using broker quotes | $ 5,300,000 | $ 5,300,000 | $ 13,500,000 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of Level 3 Financial Instruments (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)usd_per_policy | Dec. 31, 2018USD ($)usd_per_policy | |
Liabilities: | ||
Fair Value | $ 1,319,193,000 | $ 755,461,000 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Fair value | 418,178,000 | 421,458,000 |
Level 3 | Corporate securities | ||
Assets: | ||
Fair value | 1,328,490,000 | 631,068,000 |
Level 3 | Embedded derivative - GLWB | ||
Liabilities: | ||
Fair Value | 338,648,000 | 184,071,000 |
Level 3 | Embedded derivative - FIA | ||
Liabilities: | ||
Fair Value | 300,364,000 | 217,288,000 |
Level 3 | Embedded derivative - IUL | ||
Liabilities: | ||
Fair Value | $ 136,660,000 | $ 90,231,000 |
Level 3 | Discounted cash flow | Corporate securities | Minimum | ||
Liabilities: | ||
Debt securities, measurement input | 0.0087 | 0.0084 |
Level 3 | Discounted cash flow | Corporate securities | Maximum | ||
Liabilities: | ||
Debt securities, measurement input | 0.0410 | 0.0300 |
Level 3 | Discounted cash flow | Corporate securities | Weighted average | ||
Liabilities: | ||
Debt securities, measurement input | 0.0175 | 0.0184 |
Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities: | ||
Embedded derivative, measurement input | 145 | 145 |
Liquidation value | Level 3 | Liquidation Technique | Other asset-backed securities | Minimum | ||
Liabilities: | ||
Debt securities, measurement input, value | $ 95.39 | $ 85.75 |
Liquidation value | Level 3 | Liquidation Technique | Other asset-backed securities | Maximum | ||
Liabilities: | ||
Debt securities, measurement input, value | 97 | 99.99 |
Liquidation value | Level 3 | Liquidation Technique | Other asset-backed securities | Weighted average | ||
Liabilities: | ||
Debt securities, measurement input, value | $ 96.48 | $ 95.36 |
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Minimum | ||
Liabilities: | ||
Debt securities, measurement input | 0.0011 | 0.0002 |
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Maximum | ||
Liabilities: | ||
Debt securities, measurement input | 0.0150 | 0.0125 |
Liquidity premium | Level 3 | Discounted cash flow | Other asset-backed securities | Weighted average | ||
Liabilities: | ||
Debt securities, measurement input | 0.0073 | 0.0064 |
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Minimum | ||
Liabilities: | ||
Debt securities, measurement input | 0.1084 | 0.1096 |
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Maximum | ||
Liabilities: | ||
Debt securities, measurement input | 0.1288 | 0.1311 |
Paydown rate | Level 3 | Discounted cash flow | Other asset-backed securities | Weighted average | ||
Liabilities: | ||
Debt securities, measurement input | 0.1198 | 0.1203 |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.87 | 0.87 |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 1 | 1 |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities: | ||
Embedded derivative, measurement input | 1 | |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.87 | |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.01 | |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.37 | 0.0037 |
Mortality | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 5.77 | 0.0577 |
Utilization | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.99 | 0.99 |
Policies that have a one-time over-utilization rate of a specified amount | 10.00% | 10.00% |
Specified level of one-time over-utilization | 400.00% | 400.00% |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.0017 | 0.0021 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.0088 | 0.0116 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.0017 | 0.0021 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.0088 | 0.0116 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.0017 | 0.0021 |
Nonperformance risk | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.0088 | 0.0116 |
Withdrawal rate, prior to age 70 | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.015 | 0.015 |
Withdrawal rate | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Liabilities: | ||
Embedded derivative, measurement input | 1 | 1 |
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.010 | 0.010 |
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.300 | 0.300 |
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.005 | 0.005 |
Lapse | Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Liabilities: | ||
Embedded derivative, measurement input | 0.100 | 0.100 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Reconciliation of Beginning and Ending Balances for Fair Value Measurements (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Assets: | ||||
Beginning Balance | $ 1,314,360 | $ 1,380,893 | $ 1,268,885 | $ 1,374,044 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 14,817 | 12,822 | 31,864 | 21,880 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 27,900 | 17,015 | 54,632 | 18,928 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (17,396) | (4,129) | (33,610) | (4,816) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | (4,965) | (8,582) | (8,308) | (22,317) |
Purchases | 677,644 | 118,973 | 727,107 | 153,973 |
Sales | (56,977) | (26,194) | (101,905) | (50,239) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 48,553 | (7,508) | 65,522 | (7,508) |
Other | 255 | (908) | 4 | (1,563) |
Ending Balance | 2,004,191 | 1,482,382 | 2,004,191 | 1,482,382 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (2,684) | 8,693 | (1,576) | 17,063 |
Liabilities: | ||||
Beginning Balance | 872,504 | 702,501 | 706,061 | 844,362 |
Total Realized and Unrealized Gains, Included in Earnings, Liabilities | 364 | 96,138 | 12,034 | 257,456 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Liabilities | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Liabilities | (263,171) | (49,011) | (443,117) | (71,335) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Liabilities | 0 | 0 | 0 | 0 |
Purchases | 37,204 | 0 | 37,204 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 56 | 89 | 67 | 530 |
Settlements | 2,909 | 2,449 | 4,753 | 5,757 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 1,169,662 | 653,014 | 1,169,662 | 653,014 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (261,982) | 48,186 | (429,931) | 187,974 |
Annuity account | ||||
Liabilities: | ||||
Beginning Balance | 74,613 | 81,399 | 76,119 | 83,472 |
Total Realized and Unrealized Gains, Included in Earnings, Liabilities | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Liabilities | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Liabilities | (825) | (1,059) | (1,152) | (1,853) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Liabilities | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 56 | 89 | 67 | 530 |
Settlements | 2,909 | 2,449 | 4,753 | 5,757 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 72,585 | 80,098 | 72,585 | 80,098 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Other liabilities | ||||
Liabilities: | ||||
Beginning Balance | 797,891 | 621,102 | 629,942 | 760,890 |
Total Realized and Unrealized Gains, Included in Earnings, Liabilities | 364 | 96,138 | 12,034 | 257,456 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Liabilities | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Liabilities | (262,346) | (47,952) | (441,965) | (69,482) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Liabilities | 0 | 0 | 0 | 0 |
Purchases | 37,204 | 0 | 37,204 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 1,097,077 | 572,916 | 1,097,077 | 572,916 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (261,982) | 48,186 | (429,931) | 187,974 |
Total investments | ||||
Assets: | ||||
Beginning Balance | 1,314,360 | 1,380,893 | 1,268,885 | 1,374,044 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 14,817 | 12,822 | 31,864 | 21,880 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 27,900 | 17,015 | 54,632 | 18,928 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (17,396) | (4,129) | (33,610) | (4,816) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | (4,965) | (8,582) | (8,308) | (22,317) |
Purchases | 677,644 | 118,973 | 727,107 | 153,973 |
Sales | (56,977) | (26,194) | (101,905) | (50,239) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 48,553 | (7,508) | 65,522 | (7,508) |
Other | 255 | (908) | 4 | (1,563) |
Ending Balance | 2,004,191 | 1,482,382 | 2,004,191 | 1,482,382 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (2,684) | 8,693 | (1,576) | 17,063 |
Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 1,140,434 | 1,170,480 | 1,092,216 | 1,171,930 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 960 | 0 | 4,703 | 194 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 27,900 | 17,015 | 54,632 | 18,928 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (3,505) | (3,615) | (3,672) | (3,737) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | (4,965) | (8,582) | (8,308) | (22,317) |
Purchases | 670,986 | 118,937 | 720,449 | 153,937 |
Sales | (56,977) | (26,194) | (101,905) | (50,239) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 48,553 | (7,508) | 65,522 | (7,508) |
Other | 255 | (908) | 4 | (1,563) |
Ending Balance | 1,823,641 | 1,259,625 | 1,823,641 | 1,259,625 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (2,649) | (3,615) | 1,202 | (3,544) |
Equity securities | ||||
Assets: | ||||
Beginning Balance | 64,394 | 66,061 | 64,325 | 66,110 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 157 | 1 | 239 | 1 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (3) | (15) | (16) | (64) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Purchases | 5,079 | 36 | 5,079 | 36 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 69,627 | 66,083 | 69,627 | 66,083 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 153 | (14) | 222 | (63) |
Other long-term investments | ||||
Assets: | ||||
Beginning Balance | 109,532 | 144,352 | 112,344 | 136,004 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 13,700 | 12,821 | 26,922 | 21,685 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (13,888) | (499) | (29,922) | (1,015) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Purchases | 1,579 | 0 | 1,579 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 110,923 | 156,674 | 110,923 | 156,674 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (188) | 12,322 | (3,000) | 20,670 |
Available-for-sale securities | Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 1,068,699 | 1,130,198 | 1,059,918 | 1,131,266 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 82 | 0 | 528 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 27,900 | 17,015 | 54,632 | 18,928 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (37) | 0 | (57) | 0 |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | (4,965) | (8,582) | (8,308) | (22,317) |
Purchases | 670,986 | 114,337 | 704,986 | 149,337 |
Sales | (56,197) | (14,921) | (94,978) | (38,570) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 49,350 | (7,672) | 39,255 | (7,672) |
Other | 349 | (856) | 191 | (1,453) |
Ending Balance | 1,756,167 | 1,229,519 | 1,756,167 | 1,229,519 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Available-for-sale securities | Residential mortgage-backed securities | ||||
Assets: | ||||
Beginning Balance | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | (457) | 0 | (457) |
Purchases | 0 | 22,225 | 0 | 22,225 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 12 | 0 | 12 |
Ending Balance | 0 | 21,780 | 0 | 21,780 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Available-for-sale securities | Commercial mortgage-backed securities | ||||
Assets: | ||||
Beginning Balance | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 16 | 0 | 16 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | (1,284) | 0 | (1,284) |
Purchases | 9,359 | 48,621 | 9,359 | 48,621 |
Sales | (7) | (94) | (7) | (94) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | (2) | (16) | (2) | (16) |
Ending Balance | 9,366 | 47,227 | 9,366 | 47,227 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Available-for-sale securities | Other asset-backed securities | ||||
Assets: | ||||
Beginning Balance | 420,091 | 503,789 | 421,642 | 504,365 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 0 | 0 | 446 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 2,513 | 11,353 | 10,660 | 11,867 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (37) | 0 | (57) | 0 |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | (4,468) | (13) | (4,799) | (1,647) |
Purchases | 0 | 0 | 0 | 0 |
Sales | (7) | (9) | (10,015) | (23) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 222 | 0 | 222 |
Other | 218 | 359 | 433 | 917 |
Ending Balance | 418,310 | 515,701 | 418,310 | 515,701 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Available-for-sale securities | Corporate securities | ||||
Assets: | ||||
Beginning Balance | 648,608 | 626,409 | 638,276 | 626,901 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 82 | 0 | 82 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 25,371 | 5,662 | 43,956 | 7,061 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | (497) | (6,828) | (3,509) | (18,929) |
Purchases | 661,627 | 43,491 | 695,627 | 78,491 |
Sales | (56,183) | (14,818) | (84,956) | (38,453) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 49,350 | (7,894) | 39,255 | (7,894) |
Other | 133 | (1,211) | (240) | (2,366) |
Ending Balance | 1,328,491 | 644,811 | 1,328,491 | 644,811 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Trading securities | Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 71,735 | 40,282 | 32,298 | 40,664 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 878 | 0 | 4,175 | 194 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (3,468) | (3,615) | (3,615) | (3,737) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Purchases | 0 | 4,600 | 15,463 | 4,600 |
Sales | (780) | (11,273) | (6,927) | (11,669) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (797) | 164 | 26,267 | 164 |
Other | (94) | (52) | (187) | (110) |
Ending Balance | 67,474 | 30,106 | 67,474 | 30,106 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (2,649) | (3,615) | 1,202 | (3,544) |
Trading securities | Other asset-backed securities | ||||
Assets: | ||||
Beginning Balance | 66,484 | 34,958 | 26,056 | 35,222 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 810 | 0 | 4,006 | 194 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | (3,468) | (3,570) | (3,584) | (3,598) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Purchases | 0 | 4,600 | 15,463 | 4,600 |
Sales | (781) | (11,273) | (5,892) | (11,669) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (797) | 164 | 26,267 | 164 |
Other | (68) | (27) | (136) | (61) |
Ending Balance | 62,180 | 24,852 | 62,180 | 24,852 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (2,717) | (3,570) | 1,068 | (3,405) |
Trading securities | Corporate securities | ||||
Assets: | ||||
Beginning Balance | 5,251 | 5,324 | 6,242 | 5,442 |
Total Realized and Unrealized Gains, Included in Earnings, Assets | 68 | 0 | 169 | 0 |
Total Realized and Unrealized Gains, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses, Included in Earnings, Assets | 0 | (45) | (31) | (139) |
Total Realized and Unrealized Losses, Included in Other Comprehensive Income, Assets | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 1 | 0 | (1,035) | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | (26) | (25) | (51) | (49) |
Ending Balance | 5,294 | 5,254 | 5,294 | 5,254 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | $ 68 | $ (45) | $ 134 | $ (139) |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Mortgage loans on real estate | $ 9,053,400 | $ 7,724,733 |
Policy loans | 1,709,110 | 1,695,886 |
Fixed maturities, held-to-maturity | 2,576,216 | 2,633,474 |
Liabilities: | ||
Stable value product account balances | 5,816,503 | 5,234,731 |
Future policy benefits and claims | 14,179,277 | 13,720,081 |
Other policyholders’ funds | 1,542,296 | 1,128,379 |
Debt: | ||
Subordinated debt | 605,494 | 605,426 |
Non-recourse funding obligations | 2,576,538 | 2,632,497 |
Capital lease obligation | 2,600 | 1,300 |
Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 753,503 | 729,454 |
Level 3 | Carrying Amounts | ||
Assets: | ||
Mortgage loans on real estate | 9,053,400 | 7,724,733 |
Policy loans | 1,709,110 | 1,695,886 |
Fixed maturities, held-to-maturity | 2,576,216 | 2,633,474 |
Liabilities: | ||
Stable value product account balances | 5,816,503 | 5,234,731 |
Future policy benefits and claims | 1,725,194 | 1,671,414 |
Other policyholders’ funds | 105,136 | 131,150 |
Debt: | ||
Bank borrowings(5) | 599,627 | 0 |
Subordinated funding obligations | 110,000 | 110,000 |
Non-recourse funding obligations | 2,576,538 | 2,632,497 |
Level 3 | Carrying Amounts | Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 2,600,000 | 2,600,000 |
Level 3 | Fair Values | ||
Assets: | ||
Mortgage loans on real estate | 9,123,182 | 7,447,702 |
Policy loans | 1,709,110 | 1,695,886 |
Fixed maturities, held-to-maturity | 2,640,827 | 2,547,210 |
Liabilities: | ||
Stable value product account balances | 5,885,528 | 5,200,723 |
Future policy benefits and claims | 1,729,081 | 1,671,434 |
Other policyholders’ funds | 107,702 | 131,782 |
Debt: | ||
Bank borrowings(5) | 600,000 | 0 |
Subordinated funding obligations | 108,455 | 95,476 |
Non-recourse funding obligations | 2,701,194 | 2,550,237 |
Level 3 | Fair Values | Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 2,700,000 | 2,500,000 |
Level 2 | Carrying Amounts | ||
Debt: | ||
Senior Notes | 1,075,370 | 1,100,508 |
Subordinated debt | 495,494 | 495,426 |
Level 2 | Fair Values | ||
Debt: | ||
Senior Notes | 1,095,907 | 1,065,338 |
Subordinated debt | $ 506,720 | $ 494,265 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | $ (148,049) | $ 12,265 | $ (267,720) | $ 90,324 |
Derivatives not designated as hedging instruments | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (148,049) | 12,265 | (267,720) | 90,324 |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (70,679) | 45,183 | (155,677) | 127,841 |
Derivatives not designated as hedging instruments | Other derivatives | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (1,455) | 33 | (1,389) | (7) |
Derivatives not designated as hedging instruments | VA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (56,123) | (36,115) | (86,650) | (55,944) |
Derivatives not designated as hedging instruments | VA | Interest rate futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (11,280) | 1,552 | (17,302) | (15,340) |
Derivatives not designated as hedging instruments | VA | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 2,559 | (10,864) | 32,297 | (17,292) |
Derivatives not designated as hedging instruments | VA | Currency futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (397) | 12,063 | 1,847 | 4,480 |
Derivatives not designated as hedging instruments | VA | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (21,702) | (38,216) | (93,397) | (26,200) |
Derivatives not designated as hedging instruments | VA | Interest rate swaptions | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 0 | 0 | (14) |
Derivatives not designated as hedging instruments | VA | Interest rate swaps | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 117,934 | (26,149) | 192,795 | (89,859) |
Derivatives not designated as hedging instruments | VA | Total return swaps | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (8,545) | (10,055) | (48,572) | (3,565) |
Derivatives not designated as hedging instruments | VA | Embedded derivative - GLWB | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (134,692) | 35,554 | (154,318) | 91,846 |
Derivatives not designated as hedging instruments | FIA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (11,197) | 2,304 | (8,390) | 8,804 |
Derivatives not designated as hedging instruments | FIA | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 431 | (167) | 2 | (328) |
Derivatives not designated as hedging instruments | FIA | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 13,191 | 7,398 | 55,241 | 2,729 |
Derivatives not designated as hedging instruments | FIA | Embedded derivative - FIA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (24,819) | (4,927) | (63,633) | 6,403 |
Derivatives not designated as hedging instruments | IUL | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (8,595) | 860 | (15,614) | 9,630 |
Derivatives not designated as hedging instruments | IUL | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 85 | 0 | 256 | 136 |
Derivatives not designated as hedging instruments | IUL | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 2,606 | 2,086 | 8,786 | 836 |
Derivatives not designated as hedging instruments | IUL | Embedded derivative - IUL | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | $ (11,286) | $ (1,226) | $ (24,656) | $ 8,658 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivatives in Cash Flow Hedging Relationship (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
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 | $ 2,900 | |||
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 | $ (3,529) | (6,017) | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives | $ 2,967 | $ 3,582 | ||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) | (336) | (614) | ||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) | (205) | (318) | ||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives | 0 | 0 | ||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives | 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 | (1,733) | (3,626) | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives | 2,967 | 3,582 | ||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) | (188) | (394) | ||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) | (205) | (318) | ||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives | 0 | 0 | ||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives | $ 0 | $ 0 | ||
Cash flow hedges | Interest rate swaps | ||||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives | (1,796) | (2,391) | ||
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) | (148) | (220) | ||
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Nature and Accounting Treatment of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Other long-term investments, Fair Value | $ 643,796 | $ 375,829 |
Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Other long-term investments, Fair Value | 13,738 | 7,072 |
Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Other long-term investments, Fair Value | 97,185 | 105,272 |
Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 13,393,082 | 12,146,013 |
Other long-term investments, Fair Value | 643,796 | 375,829 |
Other liabilities, Notional Amount | 18,536,148 | 18,826,722 |
Other liabilities, Fair Value | 1,319,193 | 755,461 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 2,188,000 | 1,515,500 |
Other long-term investments, Fair Value | 90,599 | 28,501 |
Other liabilities, Notional Amount | 70,000 | 775,000 |
Other liabilities, Fair Value | 0 | 11,367 |
Derivatives not designated as hedging instruments | Total return swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 132,044 | 138,070 |
Other long-term investments, Fair Value | 1,065 | 3,971 |
Other liabilities, Notional Amount | 361,607 | 768,177 |
Other liabilities, Fair Value | 1,112 | 23,054 |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 1,248,634 | 585,294 |
Other long-term investments, Fair Value | 13,738 | 7,072 |
Other liabilities, Notional Amount | 2,287,547 | 1,795,287 |
Other liabilities, Fair Value | 188,853 | 32,828 |
Derivatives not designated as hedging instruments | Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 3,153,016 | 3,984,070 |
Other long-term investments, Fair Value | 97,185 | 105,272 |
Other liabilities, Notional Amount | 6,943,853 | 6,282,712 |
Other liabilities, Fair Value | 471,199 | 289,343 |
Derivatives not designated as hedging instruments | Embedded derivative - FIA | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 2,739,208 | 2,576,033 |
Other liabilities, Fair Value | 298,721 | 217,288 |
Derivatives not designated as hedging instruments | Embedded derivative - IUL | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 262,828 | 233,550 |
Other liabilities, Fair Value | 136,660 | 90,231 |
Derivatives not designated as hedging instruments | Interest rate futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 393,518 | 286,208 |
Other long-term investments, Fair Value | 8,703 | 10,302 |
Other liabilities, Notional Amount | 901,165 | 863,706 |
Other liabilities, Fair Value | 16,464 | 20,100 |
Derivatives not designated as hedging instruments | Equity futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 101,064 | 12,633 |
Other long-term investments, Fair Value | 639 | 483 |
Other liabilities, Notional Amount | 225,125 | 659,357 |
Other liabilities, Fair Value | 2,967 | 33,753 |
Derivatives not designated as hedging instruments | Currency futures | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 256,513 | 202,747 |
Other liabilities, Fair Value | 1,105 | 2,163 |
Derivatives not designated as hedging instruments | Equity options | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 6,176,649 | 5,624,081 |
Other long-term investments, Fair Value | 431,694 | 220,092 |
Other liabilities, Notional Amount | 4,008,015 | 4,199,687 |
Other liabilities, Fair Value | 198,159 | 34,178 |
Derivatives not designated as hedging instruments | Other | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 157 | 157 |
Other long-term investments, Fair Value | 173 | 136 |
Other liabilities, Notional Amount | 13,109 | 3,288 |
Other liabilities, Fair Value | 1,644 | 252 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate swaps | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 350,000 | 350,000 |
Other liabilities, Fair Value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency swaps | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 117,178 | 117,178 |
Other liabilities, Fair Value | $ 2,309 | $ 904 |
OFFSETTING OF ASSETS AND LIAB_3
OFFSETTING OF ASSETS AND LIABILITIES - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Offsetting [Abstract] | ||
Fair value of non-cash collateral received | $ 30.4 | $ 45 |
OFFSETTING OF ASSETS AND LIAB_4
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement | $ 643,796 | $ 375,829 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 643,796 | 375,829 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 214,952 | 99,199 |
Net Amount | 218,100 | 206,308 |
Free-Standing derivatives | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives subject to a master netting arrangement | 532,700 | 263,349 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 532,700 | 263,349 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 214,952 | 99,199 |
Net Amount | 107,004 | 93,828 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives subject to a master netting arrangement | 532,700 | 263,349 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 532,700 | 263,349 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 214,952 | 99,199 |
Net Amount | 107,004 | 93,828 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement | 13,738 | 7,072 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 13,738 | 7,072 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | 13,738 | 7,072 |
Embedded derivative - GLWB | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement | 97,185 | 105,272 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 97,185 | 105,272 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | 97,185 | 105,272 |
Other | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement | 173 | 136 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 173 | 136 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | 173 | 136 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Derivatives not subject to a master netting arrangement | 111,096 | 112,480 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 111,096 | 112,480 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Received | 0 | 0 |
Net Amount | $ 111,096 | $ 112,480 |
OFFSETTING OF ASSETS AND LIAB_5
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | $ 1,319,193 | $ 755,461 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,319,193 | 755,461 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 11,215 | 47,856 |
Net Amount | 1,097,234 | 637,283 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 60,000 | 418,090 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 60,000 | 418,090 |
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 | 60,000 | 418,090 |
Total Liabilities | ||
Gross Amounts of Recognized Liabilities | 1,379,193 | 1,173,551 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,379,193 | 1,173,551 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 11,215 | 47,856 |
Net Amount | 1,157,234 | 1,055,373 |
Free-Standing derivatives | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, subject to a master netting arrangement | 222,116 | 125,519 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 222,116 | 125,519 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 11,215 | 47,856 |
Net Amount | 157 | 7,341 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, subject to a master netting arrangement | 222,116 | 125,519 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 222,116 | 125,519 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, subject to a master netting arrangement | 210,744 | 70,322 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 11,215 | 47,856 |
Net Amount | 157 | 7,341 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 188,853 | 32,828 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 188,853 | 32,828 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Net Amount | 188,853 | 32,828 |
Embedded derivative - GLWB | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 471,199 | 289,343 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 471,199 | 289,343 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Net Amount | 471,199 | 289,343 |
Embedded derivative - FIA | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 298,721 | 217,288 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 298,721 | 217,288 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Net Amount | 298,721 | 217,288 |
Embedded derivative - IUL | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 136,660 | 90,231 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 136,660 | 90,231 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Net Amount | 136,660 | 90,231 |
Other | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 1,644 | 252 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,644 | 252 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Net Amount | 1,644 | 252 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, not subject to a master netting arrangement | 1,097,077 | 629,942 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,097,077 | 629,942 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments, not subject to a master netting arrangement | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Net Amount | $ 1,097,077 | $ 629,942 |
MORTGAGE LOANS - Narrative (Det
MORTGAGE LOANS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Mortgage loans holdings | $ 9,053,400 | $ 9,053,400 | $ 7,724,733 | |||
Mortgage loan call option period | 10 years | |||||
Amount that would become due in remainder of 2019, if loans are called at their next call dates | 70,300 | $ 70,300 | ||||
Amount that would become due in 2020 through 2024, if loans are called at their next call dates | 789,600 | 789,600 | ||||
Amount that would become due in 2025 through 2029, if loans are called at their next call dates | 60,000 | 60,000 | ||||
Commercial mortgage loans | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Mortgage loans having participation feature | 669,500 | 669,500 | 700,600 | |||
Income recognized on participating mortgage loans | 12,000 | $ 5,100 | 14,200 | $ 12,400 | ||
Loans not subject to a pooling and servicing agreement which are either nonperforming or restructured | 800 | 800 | ||||
Allowance for mortgage loan credit losses | $ 2,481 | $ 2,481 | $ 1,296 | $ 0 | ||
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 | |||||
Commercial mortgage loans | Maximum | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Loan-to-value ratio with participating interest (as a percent) | 85.00% | 85.00% |
MORTGAGE LOANS - Change in Allo
MORTGAGE LOANS - Change in Allowance for Credit Losses (Details) - Commercial mortgage loans - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 1,296 | $ 0 |
Charge offs | (350) | 0 |
Recoveries | 0 | (209) |
Provision | 1,535 | 1,505 |
Ending balance | $ 2,481 | $ 1,296 |
MORTGAGE LOANS - Delinquent Loa
MORTGAGE LOANS - Delinquent Loans (Details) - Commercial mortgage loans $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Delinquent loans | ||
Commercial mortgage loans | $ | $ 8,488 | $ 2,278 |
Number of delinquent commercial mortgage loans | loan | 3 | 5 |
30 to 59 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 8,405 | $ 1,044 |
Number of delinquent commercial mortgage loans | loan | 2 | 4 |
60 to 89 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 0 | $ 0 |
Number of delinquent commercial mortgage loans | loan | 0 | 0 |
Greater than 90 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 83 | $ 1,234 |
Number of delinquent commercial mortgage loans | loan | 1 | 1 |
MORTGAGE LOANS - Impaired Loans
MORTGAGE LOANS - Impaired Loans (Details) - Commercial mortgage loans - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Recorded Investment | ||
With no related allowance recorded, recorded investment | $ 83 | $ 0 |
With an allowance recorded, recorded investment | 9,445 | 5,684 |
Unpaid Principal Balance | ||
With no related allowance recorded, unpaid principal balance | 83 | 0 |
With an allowance recorded, unpaid principal balance | 9,305 | 5,309 |
Related Allowance | ||
With an allowance recorded, related allowance | 2,481 | 1,296 |
Average Recorded Investment | ||
With no related allowance recorded, average recorded investment | 83 | 0 |
With an allowance recorded, average recorded investment | 3,148 | 1,895 |
Interest Income Recognized | ||
With no related allowance recorded, interest income recognized | 0 | 0 |
With an allowance recorded, interest income recognized | 184 | 267 |
Cash Basis Interest Income | ||
With no related allowance recorded, cash basis interest income | 0 | 0 |
With an allowance recorded, cash basis interest income | $ 217 | $ 293 |
MORTGAGE LOANS - Troubled Debt
MORTGAGE LOANS - Troubled Debt Restructuring (Details) - Commercial mortgage loans $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)contract | Dec. 31, 2018USD ($)contract | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Contracts | contract | 1 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 1,114 | $ 2,688 |
Post-Modification Outstanding Recorded Investment | $ 759 | $ 1,742 |
DEBT AND OTHER OBLIGATIONS - Su
DEBT AND OTHER OBLIGATIONS - Summary of Debt and Subordinated Debt Securities (Details) - USD ($) | May 03, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 1,583,279,000 | $ 991,363,000 | |
Carrying Amounts, Debt | 1,677,557,000 | 1,101,827,000 | |
Carrying Amounts, Subordinated debt securities | 605,494,000 | 605,426,000 | |
Credit Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | 0 | 0 | |
Carrying Amounts, Debt | 0 | 0 | |
Term Loan Credit Agreement | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | 600,000,000 | 0 | |
Carrying Amounts, Debt | 599,627,000 | 0 | |
Deferred issuance expenses | $ 400,000 | ||
Interest rate added to the base rate (as a percent) | 100.00% | ||
Capital lease obligation | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 2,560,000 | 1,319,000 | |
Carrying Amounts, Debt | 2,560,000 | 1,319,000 | |
Subordinated debt securities | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | 610,000,000 | 610,000,000 | |
Carrying Amounts, Subordinated debt securities | 605,494,000 | 605,426,000 | |
7.375% Senior Notes (2009), due 2019 | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | 400,000,000 | 400,000,000 | |
Carrying Amounts, Debt | $ 406,627,000 | $ 416,469,000 | |
Stated interest rate (as a percent) | 7.375% | 7.375% | |
8.45% Senior Notes (2009), due 2039 | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 180,719,000 | $ 190,044,000 | |
Carrying Amounts, Debt | 273,029,000 | $ 288,547,000 | |
Debt repurchased and subsequently extinguished | 14,100,000 | ||
Par value of extinguished debt | $ 9,300,000 | ||
Stated interest rate (as a percent) | 8.45% | 8.45% | |
Pre-tax gain (loss) on extinguishment of debt | $ 1,100,000 | ||
4.30% Senior Notes (2018), due 2028 | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | 400,000,000 | $ 400,000,000 | |
Carrying Amounts, Debt | $ 395,714,000 | $ 395,492,000 | |
Stated interest rate (as a percent) | 4.30% | 4.30% | |
Debt issued discount, amount | $ 1,000,000 | ||
5.35% Subordinated Debentures (2017), due 2052 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 5.35% | 5.35% | |
5.35% Subordinated Debentures (2017), due 2052 | Subordinated debt securities | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 500,000,000 | $ 500,000,000 | |
Carrying Amounts, Subordinated debt securities | $ 495,494,000 | 495,426,000 | |
Deferred issuance expenses | $ 3,700,000 | ||
3.55% Subordinated Funding Obligations (2018), due 2038 (One) | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 3.55% | 3.55% | |
3.55% Subordinated Funding Obligations (2018), due 2038 (One) | Subordinated debt securities | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 55,000,000 | $ 55,000,000 | |
Carrying Amounts, Subordinated debt securities | $ 55,000,000 | 55,000,000 | |
3.55% Subordinated Funding Obligations (2018), due 2038 (Two) | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 3.55% | ||
3.55% Subordinated Funding Obligations (2018), due 2038 (Two) | Subordinated debt securities | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 55,000,000 | 55,000,000 | |
Carrying Amounts, Subordinated debt securities | $ 55,000,000 | $ 55,000,000 | |
3.55% Subordinated Funding Obligations (2018), due 2038 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 3.55% | ||
3.55% Subordinated Funding Obligations (2018), due 2038 | Subordinated debt securities | |||
Debt Instrument [Line Items] | |||
Outstanding Principal | $ 110,000,000 | ||
2015 Credit Facility | |||
Debt Instrument [Line Items] | |||
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 | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Interest rate added to the base rate (as a percent) | 0.50% | ||
2015 Credit Facility | One-Month LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate added to the base rate (as a percent) | 1.00% | ||
Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 1,000,000,000 | ||
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,500,000,000 | ||
Facility fee percentage | 0.125% | ||
Credit Facility | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Interest rate added to the base rate (as a percent) | 0.50% | ||
Credit Facility | One-Month LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate added to the base rate (as a percent) | 1.00% |
DEBT AND OTHER OBLIGATIONS - No
DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 2,519,691 | $ 2,574,691 |
Carrying Value | 2,576,538 | 2,632,497 |
Golden Gate Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 1,803,000 | 1,883,000 |
Carrying Value | $ 1,803,000 | $ 1,883,000 |
Year-to-Date Weighted-Avg Interest Rate | 4.75% | 4.75% |
Golden Gate II Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 20,600 | $ 20,600 |
Carrying Value | $ 17,729 | $ 17,703 |
Year-to-Date Weighted-Avg Interest Rate | 5.60% | 4.99% |
Golden Gate V Vermont Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 695,000 | $ 670,000 |
Carrying Value | $ 753,503 | $ 729,454 |
Year-to-Date Weighted-Avg Interest Rate | 5.12% | 5.12% |
MONY Life Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 1,091 | $ 1,091 |
Carrying Value | $ 2,306 | $ 2,340 |
Year-to-Date Weighted-Avg Interest Rate | 6.19% | 6.19% |
DEBT AND OTHER OBLIGATIONS - Re
DEBT AND OTHER OBLIGATIONS - Repurchase Program Borrowings (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Percent of initial collateral | 102.00% | |
Securities lending transactions | $ 75,071 | $ 72,176 |
Fair value of collateral | 66,900 | |
Obligation to return securities | 66,900 | |
Repurchase Program Borrowings | ||
Debt Instrument [Line Items] | ||
Fair value of securities pledged under the repurchase program | 62,600 | 451,900 |
Secured financing liabilities | $ 60,000 | $ 418,100 |
Average interest rate | 2.46% | 2.45% |
Average daily balance at average interest rate | 2.47% | 1.84% |
Maximum balance outstanding | $ 540,000 | $ 885,000 |
Average borrowing rate | $ 104,800 | $ 511,400 |
Repurchase Program Borrowings | Maximum | ||
Debt Instrument [Line Items] | ||
Term of financing agreement | 90 days |
DEBT AND OTHER OBLIGATIONS - Am
DEBT AND OTHER OBLIGATIONS - Amount of Collateral Pledged for Repurchase Agreements and Securities Lending Transactions, Grouped by Asset Class (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | $ 62,611 | $ 451,895 |
Securities lending transactions | 75,071 | 72,176 |
Total securities | 137,682 | 524,071 |
Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 62,611 | 433,182 |
Securities lending transactions | 75,071 | 72,176 |
Total securities | 137,682 | 505,358 |
Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 18,713 |
Securities lending transactions | 0 | 0 |
Total securities | 0 | 18,713 |
30-90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Securities lending transactions | 0 | 0 |
Total securities | 0 | 0 |
Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Securities lending transactions | 0 | 0 |
Total securities | 0 | 0 |
U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 62,611 | 451,895 |
U.S. Treasury and agency securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 62,611 | 433,182 |
U.S. Treasury and agency securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 18,713 |
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 |
Corporate securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 57,941 | |
Corporate securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 57,941 | |
Corporate securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Corporate securities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Corporate securities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Fixed maturities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 71,285 | |
Fixed maturities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 71,285 | |
Fixed maturities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Fixed maturities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Fixed maturities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 14,642 | 891 |
Equity securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 14,642 | 891 |
Equity securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 0 |
Equity securities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | 0 |
Equity securities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | $ 0 |
Other government related securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 2,488 | |
Other government related securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 2,488 | |
Other government related securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Other government related securities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Other government related securities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2019USD ($)city | Dec. 31, 2018USD ($) |
Commitments and contingencies | ||
Outstanding caims receivable | $ 20,500,000 | |
Reinsurance receivable | 102,300,000 | |
Statutory reserve credit | $ 118,200,000 | |
Administrative and marketing office space | ||
Commitments and contingencies | ||
Number of cities in which properties are leased | city | 19 | |
Building contiguous to home office | ||
Commitments and contingencies | ||
Approximate purchase price of property | $ 75,000,000 | |
Minimum | Administrative and marketing office space | ||
Commitments and contingencies | ||
Operating lease term | 1 year | |
Maximum | Administrative and marketing office space | ||
Commitments and contingencies | ||
Operating lease term | 10 years | |
Indemnification Agreement | ||
Commitments and contingencies | ||
Indemnification agreement with certain officers, maximum | $ 10,000,000 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Qualified Pension Plan | Minimum | ||||
EMPLOYEE BENEFIT PLANS | ||||
Adjusted funding target percentage to be maintained | 80.00% | |||
Qualified Pension Plan | Pension Plan | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost — benefits earned during the period | $ 3,114 | $ 3,441 | $ 6,228 | $ 6,882 |
Interest cost on projected benefit obligation | 2,778 | 2,397 | 5,556 | 4,794 |
Expected return on plan assets | (4,463) | (4,026) | (8,926) | (8,052) |
Amortization of actuarial loss | 0 | 0 | 0 | 0 |
Preliminary net periodic benefit cost | 1,429 | 1,812 | 2,858 | 3,624 |
Settlement/curtailment expense | 0 | 0 | 0 | 0 |
Total net periodic benefit costs | 1,429 | 1,812 | 2,858 | 3,624 |
Nonqualified Excess Pension Plan | Pension Plan | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost — benefits earned during the period | 285 | 387 | 570 | 774 |
Interest cost on projected benefit obligation | 371 | 359 | 742 | 718 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of actuarial loss | 74 | 265 | 148 | 530 |
Preliminary net periodic benefit cost | 730 | 1,011 | 1,460 | 2,022 |
Settlement/curtailment expense | 0 | 0 | 0 | |
Total net periodic benefit costs | $ 730 | $ 1,011 | $ 1,460 | $ 2,022 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 5,767,734 | $ 7,127,199 |
Ending Balance | 8,362,936 | 5,767,734 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (1,425,766) | 12,696 |
Other comprehensive income (loss) before reclassifications | 2,126,689 | (1,425,929) |
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 24,316 | (20,751) |
Amounts reclassified from accumulated other comprehensive income (loss) | (1,390) | 18,770 |
Cumulative effect adjustments | 0 | (10,552) |
Ending Balance | 723,849 | (1,425,766) |
Unrealized Gains and Losses on Investments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (1,410,277) | 25,874 |
Other comprehensive income (loss) before reclassifications | 2,131,443 | (1,420,499) |
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 24,316 | (20,751) |
Amounts reclassified from accumulated other comprehensive income (loss) | (1,876) | 15,651 |
Cumulative effect adjustments | 0 | (10,552) |
Ending Balance | 743,606 | (1,410,277) |
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 | (343,100) | 613,400 |
Accumulated Gain and Loss Derivatives | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (7) | 747 |
Other comprehensive income (loss) before reclassifications | (1,884) | |
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) | 1,130 | |
Cumulative effect adjustments | 0 | |
Ending Balance | (7) | |
Accumulated Gain and Loss Derivatives | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Other comprehensive income (loss) before reclassifications | (4,754) | |
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) | 486 | |
Cumulative effect adjustments | 0 | |
Ending Balance | (4,275) | |
Minimum Pension Liability Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (15,482) | (13,925) |
Other comprehensive income (loss) before reclassifications | 0 | (3,546) |
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 1,989 |
Cumulative effect adjustments | 0 | 0 |
Ending Balance | $ (15,482) | $ (15,482) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reclassifications out of accumulated other comprehensive income (loss) | ||||||
Benefits and settlement expenses, net of reinsurance ceded | $ (1,003,987) | $ (861,548) | $ (1,976,753) | $ (1,648,350) | ||
Net impairment losses recognized in earnings | (698) | (5) | (3,840) | (3,650) | ||
Tax (expense) benefit | (21,963) | (17,277) | (58,594) | (34,963) | ||
Net income | 108,111 | $ 138,284 | 81,495 | $ 74,112 | 246,395 | 155,607 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains and losses on derivative instruments | ||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||
Benefits and settlement expenses, net of reinsurance ceded | (336) | (614) | ||||
Tax (expense) benefit | 70 | 128 | ||||
Net income | (266) | (486) | ||||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains and losses on derivative instruments | ||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||
Benefits and settlement expenses, net of reinsurance ceded | (205) | (318) | ||||
Tax (expense) benefit | 43 | 67 | ||||
Net income | (162) | (251) | ||||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains and losses on available-for-sale securities | ||||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||||
Realized investment gains (losses): All other investments | 1,098 | 5,539 | 6,215 | 8,322 | ||
Net impairment losses recognized in earnings | (698) | (5) | (3,840) | (3,650) | ||
Tax (expense) benefit | (84) | (1,162) | (499) | (981) | ||
Net income | $ 316 | $ 4,372 | $ 1,876 | $ 3,691 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||||
Effective income tax rate | 16.90% | 17.50% | 19.20% | 18.40% | ||
Unrecognized tax benefits with certainty of deductibility but with uncertainty about the timing of deductions | $ 0 | $ 0 | $ 0 | $ 700 | ||
Unrecognized tax benefits | $ 1,800 | 1,800 | 7,100 | 11,400 | ||
Accrued interest related to unrecognized tax benefits | $ 600 | $ 40 | $ 2,400 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of period | $ 7,134 | $ 11,353 |
Additions for tax positions of the current year | 0 | 0 |
Additions for tax positions of prior years | 0 | 0 |
Changes in judgment | 0 | (4,219) |
Settlements during the period | (5,343) | 0 |
Lapses of applicable statute of limitations | 0 | 0 |
Balance, end of period | $ 1,791 | $ 7,134 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Summarized financial information for the company's segments | |||||||
Total revenues | $ 1,418,775 | $ 1,243,908 | $ 2,832,805 | $ 2,409,740 | |||
Pre-tax Adjusted Operating Income (Loss) | 131,491 | 116,596 | 274,161 | 209,417 | |||
Realized (losses) gains on investments and derivatives | (1,417) | (17,824) | 30,828 | (18,847) | |||
Income before income tax | 130,074 | 98,772 | 304,989 | 190,570 | |||
Income tax expense | (21,963) | (17,277) | (58,594) | (34,963) | |||
Net income | 108,111 | $ 138,284 | 81,495 | $ 74,112 | 246,395 | 155,607 | |
Adjusted operating income tax (expense) benefit | (22,261) | (20,877) | (52,120) | (38,920) | |||
After-tax adjusted operating income | 109,230 | 95,719 | 222,041 | 170,497 | |||
Income tax benefit (expense) on adjustments | 298 | 3,600 | (6,474) | 3,957 | |||
Realized investment (losses) gains: | |||||||
Derivative financial instruments | (148,049) | 12,265 | (267,720) | 90,324 | |||
All other investments | 99,502 | (49,602) | 229,092 | (137,201) | |||
Net impairment losses recognized in earnings | (698) | (5) | (3,840) | (3,650) | |||
Less: related amortization | (26,840) | 1,763 | (31,201) | 10,919 | |||
Less: VA GLWB economic cost | (20,988) | (21,281) | (42,095) | (42,599) | |||
Operating Segment Assets | |||||||
Investments and other assets | 112,528,973 | 112,528,973 | $ 85,476,658 | ||||
DAC and VOBA | 3,474,557 | 3,474,557 | 3,023,154 | ||||
Other intangibles | 616,931 | 616,931 | 613,431 | ||||
Goodwill | 825,511 | 825,511 | 825,511 | ||||
Total assets | 117,445,972 | 117,445,972 | 89,938,754 | ||||
Life Marketing | |||||||
Summarized financial information for the company's segments | |||||||
Total revenues | 441,559 | 414,954 | 898,899 | 849,870 | |||
Pre-tax Adjusted Operating Income (Loss) | (462) | (7,737) | 772 | (25,586) | |||
Operating Segment Assets | |||||||
Investments and other assets | 15,433,940 | 15,433,940 | 14,575,702 | ||||
DAC and VOBA | 1,494,118 | 1,494,118 | 1,499,386 | ||||
Other intangibles | 253,243 | 253,243 | 262,758 | ||||
Goodwill | 215,254 | 215,254 | 215,254 | ||||
Total assets | 17,396,555 | 17,396,555 | 16,553,100 | ||||
Acquisitions | |||||||
Summarized financial information for the company's segments | |||||||
Total revenues | 667,031 | 509,639 | 1,276,973 | 888,733 | |||
Pre-tax Adjusted Operating Income (Loss) | 69,810 | 59,038 | 144,722 | 114,558 | |||
Operating Segment Assets | |||||||
Investments and other assets | 52,753,065 | 52,753,065 | 31,859,520 | ||||
DAC and VOBA | 914,610 | 914,610 | 458,977 | ||||
Other intangibles | 38,291 | 38,291 | 31,975 | ||||
Goodwill | 23,862 | 23,862 | 23,862 | ||||
Total assets | 53,729,828 | 53,729,828 | 32,374,334 | ||||
Annuities | |||||||
Summarized financial information for the company's segments | |||||||
Total revenues | 100,407 | 133,177 | 239,624 | 283,890 | |||
Pre-tax Adjusted Operating Income (Loss) | 45,271 | 55,934 | 99,487 | 96,465 | |||
Operating Segment Assets | |||||||
Investments and other assets | 21,206,967 | 21,206,967 | 20,199,597 | ||||
DAC and VOBA | 890,214 | 890,214 | 889,697 | ||||
Other intangibles | 172,420 | 172,420 | 156,785 | ||||
Goodwill | 343,247 | 343,247 | 343,247 | ||||
Total assets | 22,612,848 | 22,612,848 | 21,589,326 | ||||
Stable Value Products | |||||||
Summarized financial information for the company's segments | |||||||
Total revenues | 67,585 | 45,748 | 127,164 | 99,616 | |||
Pre-tax Adjusted Operating Income (Loss) | 28,106 | 19,992 | 50,345 | 49,072 | |||
Operating Segment Assets | |||||||
Investments and other assets | 5,688,707 | 5,688,707 | 5,107,334 | ||||
DAC and VOBA | 6,877 | 6,877 | 6,121 | ||||
Other intangibles | 7,056 | 7,056 | 7,389 | ||||
Goodwill | 113,924 | 113,924 | 113,924 | ||||
Total assets | 5,816,564 | 5,816,564 | 5,234,768 | ||||
Asset Protection | |||||||
Summarized financial information for the company's segments | |||||||
Total revenues | 76,014 | 77,814 | 152,212 | 154,189 | |||
Pre-tax Adjusted Operating Income (Loss) | 9,211 | 7,166 | 18,954 | 13,384 | |||
Operating Segment Assets | |||||||
Investments and other assets | 1,055,887 | 1,055,887 | 1,019,297 | ||||
DAC and VOBA | 168,738 | 168,738 | 168,973 | ||||
Other intangibles | 117,374 | 117,374 | 122,590 | ||||
Goodwill | 129,224 | 129,224 | 129,224 | ||||
Total assets | 1,471,223 | 1,471,223 | 1,440,084 | ||||
Corporate and Other | |||||||
Summarized financial information for the company's segments | |||||||
Total revenues | 66,179 | 62,576 | 137,933 | 133,442 | |||
Pre-tax Adjusted Operating Income (Loss) | (20,445) | $ (17,797) | (40,119) | $ (38,476) | |||
Operating Segment Assets | |||||||
Investments and other assets | 16,390,407 | 16,390,407 | 12,715,208 | ||||
DAC and VOBA | 0 | 0 | 0 | ||||
Other intangibles | 28,547 | 28,547 | 31,934 | ||||
Goodwill | 0 | 0 | 0 | ||||
Total assets | $ 16,418,954 | $ 16,418,954 | $ 12,747,142 |
Uncategorized Items - pl-201906
Label | Element | Value |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (10,552,000) |