Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document Information [Line Items] | ' |
Document Type | 'POS AM |
Amendment Flag | 'false |
Document Period End Date | 31-Dec-13 |
Entity Registrant Name | 'ALLSTATE LIFE INSURANCE CO OF NEW YORK |
Entity Central Index Key | '0000839759 |
Entity Filer Category | 'Non-accelerated Filer |
Statements_of_Operations_and_C
Statements of Operations and Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | ' | ' | ' |
Premiums (net of reinsurance ceded of $15,510, $32,920 and $30,271) | $55,789 | $38,037 | $43,806 |
Contract charges (net of reinsurance ceded of $11,591, $26,401 and $28,097) | 73,138 | 55,688 | 54,845 |
Net investment income | 325,117 | 346,195 | 356,269 |
Realized capital gains and losses: | ' | ' | ' |
Total other-than-temporary impairment losses | -12,410 | -2,195 | -21,804 |
Portion of loss recognized in other comprehensive income | 3,464 | -3,259 | 2,226 |
Net other-than-temporary impairment losses recognized in earnings | -8,946 | -5,454 | -19,578 |
Sales and other realized capital gains and losses | 23,857 | 23,197 | 62,485 |
Realized capital gains and losses | 14,911 | 17,743 | 42,907 |
Total Revenues | 468,955 | 457,663 | 497,827 |
Costs and expenses | ' | ' | ' |
Contract benefits (net of reinsurance ceded of $10,728, $16,258 and $24,285) | 203,717 | 180,914 | 184,166 |
Interest credited to contractholder funds (net of reinsurance ceded of $5,468, $6,032 and $6,855) | 129,911 | 144,340 | 154,447 |
Amortization of deferred policy acquisition costs | 29,783 | 13,145 | 11,102 |
Operating costs and expenses | 42,788 | 41,564 | 41,880 |
Total costs and expenses | 406,199 | 379,963 | 391,595 |
Income from operations before income tax expense | 62,756 | 77,700 | 106,232 |
Income tax expense | 22,461 | 27,546 | 37,362 |
Net income | 40,295 | 50,154 | 68,870 |
Other comprehensive (loss) income, after-tax | ' | ' | ' |
Change in unrealized net capital gains and losses | -91,316 | 48,626 | 53,507 |
Change in unrealized foreign currency translation adjustments | 853 | -417 | -170 |
Other comprehensive (loss) income, after-tax | -90,463 | 48,209 | 53,337 |
Comprehensive (loss) income | ($50,168) | $98,363 | $122,207 |
Statements_of_Operations_and_C1
Statements of Operations and Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Premiums ceded | $15,510 | $32,920 | $30,271 |
Contract charges, reinsurance ceded | 11,591 | 26,401 | 28,097 |
Contract benefits ceded | 10,728 | 16,258 | 24,285 |
Interest credited ceded | $5,468 | $6,032 | $6,855 |
Statements_of_Financial_Positi
Statements of Financial Position (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Investments | ' | ' |
Fixed income securities, at fair value (amortized cost $5,225,701 and $5,411,880) | $5,602,738 | $6,139,925 |
Mortgage loans | 514,489 | 570,365 |
Equity securities, at fair value (cost $163,649 and $133,733) | 202,622 | 164,971 |
Limited partnership interests | 116,480 | 99,820 |
Short-term, at fair value (amortized cost $98,553 and $61,947) | 98,553 | 61,948 |
Policy loans | 40,511 | 41,150 |
Other | 1,076 | 3,139 |
Total investments | 6,576,469 | 7,081,318 |
Cash | 2,270 | 16,882 |
Deferred policy acquisition costs | 129,836 | 130,201 |
Reinsurance recoverable | 259,733 | 279,220 |
Accrued investment income | 60,515 | 62,745 |
Reinsurance receivable from parent | 285 | ' |
Other assets | 54,523 | 60,791 |
Separate Accounts | 435,446 | 436,380 |
Total assets | 7,519,077 | 8,067,537 |
Liabilities | ' | ' |
Contractholder funds | 3,670,557 | 3,958,440 |
Reserve for life-contingent contract benefits | 2,151,316 | 2,310,881 |
Current income taxes payable | 390 | 5,714 |
Deferred income taxes | 173,341 | 206,055 |
Other liabilities and accrued expenses | 99,234 | 107,158 |
Payable to affiliates, net | 6,013 | 5,083 |
Reinsurance payable to parent | ' | 4,878 |
Separate Accounts | 435,446 | 436,380 |
Total liabilities | 6,536,297 | 7,034,589 |
Commitments and Contingent Liabilities (Note 11) | ' | ' |
Shareholder's equity | ' | ' |
Common stock, $25 par value, 100 thousand shares authorized, issued and outstanding | 2,500 | 2,500 |
Additional capital paid-in | 140,529 | 140,529 |
Retained income | 687,494 | 647,199 |
Unrealized net capital gains and losses: | ' | ' |
Unrealized net capital gains and losses on fixed income securities with OTTI | 168 | 136 |
Other unrealized net capital gains and losses | 270,238 | 493,481 |
Unrealized adjustment to DAC, DSI and insurance reserves | -118,415 | -250,310 |
Total unrealized net capital gains and losses | 151,991 | 243,307 |
Unrealized foreign currency translation adjustments | 266 | -587 |
Total accumulated other comprehensive income | 152,257 | 242,720 |
Total shareholder's equity | 982,780 | 1,032,948 |
Total liabilities and shareholder's equity | $7,519,077 | $8,067,537 |
Statements_of_Financial_Positi1
Statements of Financial Position (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Fixed income securities, amortized cost | $5,225,701 | $5,411,880 |
Equity securities, at cost | 163,649 | 133,733 |
Short-term, amortized cost | $98,553 | $61,947 |
Common stock, par value | $25 | $25 |
Common stock, shares authorized | 100 | 100 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Statements_of_Shareholders_Equ
Statements of Shareholder's Equity (USD $) | Total | Common Stock | Additional capital paid-in | Retained income | Accumulated other comprehensive income |
In Thousands | |||||
Balance at Dec. 31, 2010 | ' | ' | ' | $527,824 | $141,174 |
Net income | 68,870 | ' | ' | 68,870 | ' |
Change in unrealized net capital gains and losses | 53,507 | ' | ' | ' | 53,507 |
Forgiveness of payable due to an affiliate (see Note 4) | ' | ' | ' | 351 | ' |
Change in unrealized foreign currency translation adjustments | -170 | ' | ' | ' | -170 |
Balance at Dec. 31, 2011 | 934,585 | 2,500 | 140,529 | 597,045 | 194,511 |
Net income | 50,154 | ' | ' | 50,154 | ' |
Change in unrealized net capital gains and losses | 48,626 | ' | ' | ' | 48,626 |
Change in unrealized foreign currency translation adjustments | -417 | ' | ' | ' | -417 |
Balance at Dec. 31, 2012 | 1,032,948 | 2,500 | 140,529 | 647,199 | 242,720 |
Net income | 40,295 | ' | ' | 40,295 | ' |
Change in unrealized net capital gains and losses | -91,316 | ' | ' | ' | -91,316 |
Change in unrealized foreign currency translation adjustments | 853 | ' | ' | ' | 853 |
Balance at Dec. 31, 2013 | $982,780 | $2,500 | $140,529 | $687,494 | $152,257 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' |
Net income | $40,295 | $50,154 | $68,870 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Amortization and other non-cash items | -42,741 | -38,127 | -36,228 |
Realized capital gains and losses | -14,911 | -17,743 | -42,907 |
Interest credited to contractholder funds | 129,911 | 144,340 | 154,447 |
Changes in: | ' | ' | ' |
Policy benefits and other insurance reserves | -26,252 | -29,081 | -22,697 |
Deferred policy acquisition costs | 10,230 | -6,278 | -6,740 |
Income taxes | 10,673 | 33,391 | 43,297 |
Other operating assets and liabilities | -16,790 | -2,664 | 1,199 |
Net cash provided by operating activities | 90,415 | 133,992 | 159,241 |
Proceeds from sales | ' | ' | ' |
Fixed income securities | 279,029 | 641,599 | 676,468 |
Equity securities | 86,400 | ' | 25,121 |
Limited partnership interests | 23,009 | 6,131 | 5,684 |
Investment collections | ' | ' | ' |
Fixed income securities | 374,968 | 451,878 | 349,578 |
Mortgage loans | 90,226 | 83,394 | 28,155 |
Investment purchases | ' | ' | ' |
Fixed income securities | -427,674 | -775,407 | -668,237 |
Equity securities | -88,307 | -49,931 | ' |
Limited partnership interests | -38,794 | -33,970 | -63,732 |
Mortgage loans | -35,475 | -87,011 | -98,131 |
Change in short-term investments, net | -33,563 | 85,850 | -16,744 |
Change in policy loans and other investments, net | 3,133 | 342 | 15,000 |
Net cash provided by investing activities | 232,952 | 322,875 | 253,162 |
Cash flows from financing activities | ' | ' | ' |
Contractholder fund deposits | 98,601 | 115,184 | 121,937 |
Contractholder fund withdrawals | -436,580 | -558,751 | -537,292 |
Net cash used in financing activities | -337,979 | -443,567 | -415,355 |
Net (decrease)increase in cash | -14,612 | 13,300 | -2,952 |
Cash at beginning of year | 16,882 | 3,582 | 6,534 |
Cash at end of year | $2,270 | $16,882 | $3,582 |
General
General | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
General | ' | ||||||||||||
1 | General | ||||||||||||
Basis of presentation | |||||||||||||
The accompanying financial statements include the accounts of Allstate Life Insurance Company of New York (the “Company”), a wholly owned subsidiary of Allstate Life Insurance Company (“ALIC”), which is wholly owned by Allstate Insurance Company (“AIC”). All of the outstanding stock of AIC is owned by Allstate Insurance Holdings, LLC, a wholly owned subsidiary of The Allstate Corporation (the “Corporation”). These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). | |||||||||||||
To conform to the current year presentation, certain amounts in the prior year notes to financial statements have been reclassified. | |||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||||||
Nature of operations | |||||||||||||
The Company sells interest-sensitive, traditional and variable life insurance and voluntary accident and health insurance products to customers in the State of New York. Effective January 1, 2014, the Company no longer offers fixed annuities such as deferred and immediate annuities. The following table summarizes premiums and contract charges by product. | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Premiums | |||||||||||||
Traditional life insurance | $ | 38,618 | $ | 19,828 | $ | 20,728 | |||||||
Immediate annuities with life contingencies | 4,349 | 6,653 | 12,434 | ||||||||||
Accident and health insurance | 12,822 | 11,556 | 10,644 | ||||||||||
Total premiums | 55,789 | 38,037 | 43,806 | ||||||||||
Contract charges | |||||||||||||
Interest-sensitive life insurance | 72,740 | 54,357 | 52,228 | ||||||||||
Fixed annuities | 398 | 1,331 | 2,617 | ||||||||||
Total contract charges | 73,138 | 55,688 | 54,845 | ||||||||||
Total premiums and contract charges | $ | 128,927 | $ | 93,725 | $ | 98,651 | |||||||
The Company distributes its products through Allstate exclusive agencies and exclusive financial specialists, and workplace enrolling independent agents. | |||||||||||||
The Company has exposure to market risk as a result of its investment portfolio. Market risk is the risk that the Company will incur realized and unrealized net capital losses due to adverse changes in interest rates, credit spreads, equity prices or currency exchange rates. The Company’s primary market risk exposures are to changes in interest rates, credit spreads and equity prices. Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of its interest bearing assets and liabilities. This risk arises from many of the Company’s primary activities, as it invests substantial funds in interest-sensitive assets and issues interest-sensitive liabilities. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key risk-free reference yields. Credit spread risk is the risk that the Company will incur a loss due to adverse changes in credit spreads. This risk arises from many of the Company’s primary activities, as the Company invests substantial funds in spread-sensitive fixed income assets. Equity price risk is the risk that the Company will incur losses due to adverse changes in the general levels of the equity markets. | |||||||||||||
The Company monitors economic and regulatory developments that have the potential to impact its business. Federal and state laws and regulations affect the taxation of insurance companies and life insurance and annuity products. Congress and various state legislatures from time to time consider legislation that would reduce or eliminate the favorable policyholder tax treatment currently applicable to life insurance and annuities. Congress and various state legislatures also consider proposals to reduce the taxation of certain products or investments that may compete with life insurance or annuities. Legislation that increases the taxation on insurance products or reduces the taxation on competing products could lessen the advantage or create a disadvantage for certain of the Company’s products making them less competitive. Such proposals, if adopted, could have an adverse effect on the Company’s financial position or ability to sell such products and could result in the surrender of some existing contracts and policies. In addition, changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning. | |||||||||||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary of Significant Accounting Policies | ' | |
2 | Summary of Significant Accounting Policies | |
Investments | ||
Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), asset-backed securities (“ABS”) and redeemable preferred stocks. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes, certain deferred policy acquisition costs (“DAC”), certain deferred sales inducement costs (“DSI”) and certain reserves for life-contingent contract benefits, is reflected as a component of accumulated other comprehensive income. Cash received from calls, principal payments and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs, including prepayments, is reflected as a component of investment collections within the Statements of Cash Flows. | ||
Mortgage loans are carried at unpaid principal balances, net of unamortized premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. | ||
Equity securities primarily include common stocks and exchange traded funds. Equity securities are designated as available for sale and are carried at fair value. The difference between cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. | ||
Investments in limited partnership interests, including interests in private equity/debt funds, where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies are accounted for in accordance with the cost method of accounting; all other investments in limited partnership interests are accounted for in accordance with the equity method of accounting (“EMA”). | ||
Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value. Policy loans are carried at unpaid principal balances. Other investments consist of notes due from related party and derivatives. Notes due from related party are carried at outstanding principal balances. Derivatives are carried at fair value. | ||
Investment income primarily consists of interest, dividends, income from certain derivative transactions, income from cost method limited partnership interests, and, in 2013 and 2012, income from EMA limited partnership interests. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for RMBS, CMBS and ABS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS, CMBS and ABS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of carrying value. Income from cost method limited partnership interests is recognized upon receipt of amounts distributed by the partnerships. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ net income, including unrealized gains and losses, and is recognized on a delay due to the availability of the related financial statements. Income recognition on private equity/debt funds is generally on a three month delay. | ||
Realized capital gains and losses include gains and losses on investment sales, write-downs in value due to other-than-temporary declines in fair value, adjustments to valuation allowances on mortgage loans, periodic changes in fair value and settlements of certain derivatives including hedge ineffectiveness, and, in 2011, income from EMA limited partnership interests. Realized capital gains and losses on investment sales, including principal payments, are determined on a specific identification basis. | ||
Derivative and embedded derivative financial instruments | ||
Derivative financial instruments include interest rate caps and a reinvestment related risk transfer reinsurance agreement with ALIC that meets the accounting definition of a derivative (see Note 4). Derivatives required to be separated from the host instrument and accounted for as derivative financial instruments (“subject to bifurcation”) are embedded in certain fixed income securities, equity-indexed life contracts and reinsured variable annuity contracts. | ||
All derivatives are accounted for on a fair value basis and reported as other investments, other assets or contractholder funds. The income statement effects of derivatives, including fair value gains and losses and accrued periodic settlements, are reported in realized capital gains and losses. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. The change in fair value of derivatives embedded in certain fixed income securities and subject to bifurcation is reported in realized capital gains and losses. The change in fair value of derivatives embedded in life and annuity product contracts and subject to bifurcation is reported in contract benefits or interest credited to contractholder funds. Cash flows from embedded derivatives subject to bifurcation are reported consistently with the host contracts within the Statements of Cash Flows. Cash flows from other derivatives are reported in cash flows from investing activities within the Statements of Cash Flows. | ||
Securities loaned | ||
The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions are reinvested in short-term investments. These transactions are short-term in nature, usually 30 days or less. | ||
The Company receives cash collateral for securities loaned in an amount generally equal to 102% of the fair value of securities and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to repossess the securities loaned on short notice. | ||
Recognition of premium revenues and contract charges, and related benefits and interest credited | ||
Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Voluntary accident and health insurance products are expected to remain in force for an extended period. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy. | ||
Immediate annuities with life contingencies, including certain structured settlement annuities, provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract. | ||
Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. | ||
Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. | ||
Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life contracts are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index. Interest credited also includes amortization of DSI expenses. DSI is amortized into interest credited using the same method used to amortize DAC. | ||
Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. All of the Company’s variable annuity business is ceded through reinsurance agreements and the contract charges and contract benefits related thereto are reported net of reinsurance ceded. | ||
Deferred policy acquisition and sales inducement costs | ||
Costs that are related directly to the successful acquisition of new or renewal life insurance and investment contracts are deferred and recorded as DAC. These costs are principally agents’ and brokers’ remuneration and certain underwriting expenses. DSI costs, which are deferred and recorded as other assets, relate to sales inducements offered on sales to new customers, principally on annuity and interest-sensitive life contracts. These sales inducements are primarily in the form of additional credits to the customer’s account balance or enhancements to interest credited for a specified period which are in excess of the rates currently being credited to similar contracts without sales inducements. All other acquisition costs are expensed as incurred and included in operating costs and expenses. Amortization of DAC is included in amortization of deferred policy acquisition costs and is described in more detail below. DSI is amortized into income using the same methodology and assumptions as DAC and is included in interest credited to contractholder funds. DAC and DSI are periodically reviewed for recoverability and adjusted if necessary. | ||
For traditional life insurance, DAC is amortized over the premium paying period of the related policies in proportion to the estimated revenues on such business. Assumptions used in the amortization of DAC and reserve calculations are established at the time the policy is issued and are generally not revised during the life of the policy. Any deviations from projected business in force resulting from actual policy terminations differing from expected levels and any estimated premium deficiencies may result in a change to the rate of amortization in the period such events occur. Generally, the amortization periods for these policies approximates the estimated lives of the policies. | ||
For interest-sensitive life, fixed annuities and other investment contracts, DAC and DSI are amortized in proportion to the incidence of the total present value of gross profits, which includes both actual historical gross profits (“AGP”) and estimated future gross profits (“EGP”) expected to be earned over the estimated lives of the contracts. The amortization is net of interest on the prior period DAC balance using rates established at the inception of the contracts. Actual amortization periods generally range from 15-30 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life and 5-10 years for fixed annuities. The cumulative DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. | ||
AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are persistency, mortality, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. For products whose supporting investments are exposed to capital losses in excess of the Company’s expectations which may cause periodic AGP to become temporarily negative, EGP and AGP utilized in DAC and DSI amortization may be modified to exclude the excess capital losses. | ||
The Company performs quarterly reviews of DAC and DSI recoverability for interest-sensitive life, fixed annuities and other investment contracts in the aggregate using current assumptions. If a change in the amount of EGP is significant, it could result in the unamortized DAC or DSI not being recoverable, resulting in a charge which is included as a component of amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. | ||
The DAC and DSI balances presented include adjustments to reflect the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized capital gains or losses in the respective product investment portfolios were actually realized. The adjustments are recorded net of tax in accumulated other comprehensive income. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in accumulated other comprehensive income recognize the impact on shareholder’s equity consistently with the amounts that would be recognized in the income statement on realized capital gains and losses. | ||
Customers of the Company may exchange one insurance policy or investment contract for another offered by the Company, or make modifications to an existing investment or life contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC and DSI related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For interest-sensitive life and investment contracts, the EGP of the replacement contracts are treated as a revision to the EGP of the replaced contracts in the determination of amortization of DAC and DSI. For traditional life insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions. Any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred. Internal replacement transactions determined to result in a substantial change to the replaced contracts are accounted for as an extinguishment of the replaced contracts, and any unamortized DAC and DSI related to the replaced contracts are eliminated with a corresponding charge to amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. | ||
Reinsurance | ||
In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to effect the disposition of certain blocks of business. The amounts reported as reinsurance recoverables include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities and contractholder funds that have not yet been paid. Reinsurance recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverables. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate. | ||
The Company has a reinsurance treaty with ALIC through which it primarily cedes reinvestment related risk on its structured settlement annuities. The terms of the treaty meet the accounting definition of a derivative. Accordingly, the treaty is recorded in the Statement of Financial Position at fair value. Changes in the fair value of the treaty and premiums paid to ALIC are recognized in realized capital gains and losses. | ||
Income taxes | ||
The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains and losses, differences in tax bases of invested assets, DAC and insurance reserves. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized. | ||
Reserve for life-contingent contract benefits | ||
The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance, life-contingent immediate annuities and voluntary accident and health insurance products, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. To the extent that unrealized gains on fixed income securities would result in a premium deficiency if those gains were realized, the related increase in reserves for certain immediate annuities with life contingencies is recorded net of tax as a reduction of unrealized net capital gains included in accumulated other comprehensive income. | ||
Contractholder funds | ||
Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on reinsured variable annuity contracts. | ||
Separate accounts | ||
Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows. | ||
Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. All of the Company’s variable annuity business was reinsured beginning in 2006. | ||
Off-balance sheet financial instruments | ||
Commitments to invest, commitments to extend mortgage loans and financial guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Statements of Financial Position (see Note 7 and Note 11). | ||
Adopted accounting standards | ||
Disclosures about Offsetting Assets and Liabilities | ||
In December 2011 and January 2013, the Financial Accounting Standards Board (“FASB”) issued guidance requiring expanded disclosures, including both gross and net information, for derivatives, repurchase and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in the reporting entity’s financial statements or those that are subject to an enforceable master netting arrangement or similar agreement. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position. | ||
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income | ||
In February 2013, the FASB issued guidance requiring expanded disclosures about the amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by income statement line item but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about those amounts is required. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position. | ||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Supplemental Cash Flow Information | ' | ||||||||||||
3 | Supplemental Cash Flow Information | ||||||||||||
Non-cash modifications of certain mortgage loans and fixed income securities totaled $5.0 million, $12.0 million and $20.7 million in 2013, 2012 and 2011, respectively. | |||||||||||||
Liabilities for collateral received in conjunction with the Company’s securities lending program were $62.6 million, $59.8 million and $61.1 million as of December 31, 2013, 2012 and 2011, respectively, and are reported in other liabilities and accrued expenses. The accompanying cash flows are included in cash flows from operating activities in the Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Net change in proceeds managed | |||||||||||||
Net change in short-term investments | $ | (2,838 | ) | $ | 1,325 | $ | 66,886 | ||||||
Operating cash flow (used) provided | $ | (2,838 | ) | $ | 1,325 | $ | 66,886 | ||||||
Net change in liabilities | |||||||||||||
Liabilities for collateral, beginning of year | $ | (59,772 | ) | $ | (61,097 | ) | $ | (127,983 | ) | ||||
Liabilities for collateral, end of year | (62,610 | ) | (59,772 | ) | (61,097 | ) | |||||||
Operating cash flow provided (used) | $ | 2,838 | $ | (1,325 | ) | $ | (66,886 | ) | |||||
In 2011, the Company sold mortgage loans with carrying values of $5.9 million, respectively, to an affiliate in exchange for notes receivable with a principal sum equal to the mortgage loans (see Note 4). | |||||||||||||
In 2011, a payable associated with the pension benefit obligations due to AIC totaling $351 thousand was forgiven. The forgiveness of the payable reflects a non-cash financing activity. | |||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2013 | ||
Related Party Transactions | ' | |
4 | Related Party Transactions | |
Business operations | ||
The Company uses services performed by its affiliates, AIC, ALIC and Allstate Investments LLC, and business facilities owned or leased and operated by AIC in conducting its business activities. In addition, the Company shares the services of employees with AIC. The Company reimburses its affiliates for the operating expenses incurred on behalf of the Company. The Company is charged for the cost of these operating expenses based on the level of services provided. Operating expenses, including compensation, retirement and other benefit programs (see Note 14), allocated to the Company were $54.2 million, $51.4 million and $46.5 million in 2013, 2012 and 2011, respectively. A portion of these expenses relate to the acquisition of business, which are deferred and amortized into income as described in Note 2. | ||
Structured settlement annuities | ||
The Company issued $0.9 million, $5.9 million and $8.0 million of structured settlement annuities, a type of immediate annuity, in 2013, 2012 and 2011, respectively, at prices determined using interest rates in effect at the time of purchase, to fund structured settlements in matters involving AIC. Of these amounts, $89 thousand and $1.3 million relate to structured settlement annuities with life contingencies and are included in premium revenue for 2012 and 2011, respectively. The Company had no amounts related to structured settlement annuities with life contingencies that were included in premium revenue for 2013. Effective March 22, 2013, the Company no longer offers structured settlement annuities. | ||
In most cases, these annuities were issued under a “qualified assignment” whereby Allstate Assignment Corporation (“AAC”) and prior to July 1, 2001 Allstate Settlement Corporation (“ASC”), both wholly owned subsidiaries of ALIC, purchased annuities from the Company and assumed AIC’s obligation to make future payments. | ||
AIC issued surety bonds to guarantee the payment of structured settlement benefits assumed by ASC (from both AIC and non-related parties) and funded by certain annuity contracts issued by the Company through June 30, 2001. ASC entered into a General Indemnity Agreement pursuant to which it indemnified AIC for any liabilities associated with the surety bonds and gave AIC certain collateral security rights with respect to the annuities and certain other rights in the event of any defaults covered by the surety bonds. For contracts written on or after July 1, 2001, AIC no longer issues surety bonds to guarantee the payment of structured settlement benefits. Alternatively, ALIC guarantees the payment of structured settlement benefits on all contracts issued on or after July 1, 2001. Reserves recorded by the Company for annuities that are guaranteed by ALIC or the surety bonds of AIC were $2.08 billion and $2.10 billion as of December 31, 2013 and 2012, respectively. | ||
Broker-Dealer agreements | ||
The Company receives distribution services from Allstate Financial Services, LLC, an affiliated broker-dealer company, for certain annuity and variable life insurance contracts sold by Allstate exclusive agencies. For these services, the Company incurred commission and other distribution expenses of $246 thousand, $316 thousand and $277 thousand in 2013, 2012 and 2011, respectively. | ||
The Company has a service agreement with Allstate Distributors, LLC (“ADLLC”), a broker-dealer company owned by ALIC, whereby ADLLC promotes and markets products sold by the Company. In return for these services, the Company recorded expense of $14 thousand, $27 thousand and $1.1 million in 2013, 2012 and 2011, respectively. | ||
Reinsurance | ||
The Company has reinsurance agreements with ALIC whereby a portion of the Company’s premiums and policy benefits are ceded to ALIC (see Note 9). | ||
The Company has a reinsurance treaty through which it primarily cedes reinvestment related risk on its structured settlement annuities to ALIC. Under the terms of the treaty, the Company pays a premium to ALIC that varies with the aggregate structured settlement annuity statutory reserve balance. In return, ALIC guarantees that the yield on the portion of the Company’s investment portfolio that supports structured settlement annuity liabilities will not fall below contractually determined rates. The Company ceded premium related to structured settlement annuities to ALIC of $3.5 million in each of 2013, 2012 and 2011. As of December 31, 2013 and 2012, the carrying value of the structured settlement reinsurance treaty was $27.8 million and $34.7 million, respectively, which is recorded in other assets. The premiums ceded and changes in the fair value of the reinsurance treaty are reflected as a component of realized capital gains and losses as the treaty is recorded as a derivative instrument. | ||
Income taxes | ||
The Company is a party to a federal income tax allocation agreement with the Corporation (see Note 12). | ||
Intercompany loan agreement | ||
The Company has an intercompany loan agreement with the Corporation. The amount of intercompany loans available to the Company is at the discretion of the Corporation. The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings. The Company had no amounts outstanding under the intercompany loan agreement as of December 31, 2013 or 2012. | ||
Notes receivable-investment sales | ||
In 2009, the Company entered into an asset purchase agreement with Road Bay Investments, LLC (“RBI”), a subsidiary of ALIC, which allows RBI to purchase from the Company mortgage loans or participations in mortgage loans with an aggregate fair value of up to $50 million. As consideration for the purchase of the assets, RBI issues notes to the Company. As security for the performance of RBI’s obligations under the agreement and notes, RBI granted a pledge of and security interest in RBI’s right, title and interest in the mortgage loans and their proceeds. The Company had no balance due on notes from RBI as of December 31, 2013. The balance of notes due from RBI was $2.8 million as of December 31, 2012. The notes due from RBI are classified as other investments in the Statements of Financial Position. | ||
In March 2011, the Company sold to RBI mortgage loans with a fair value of $2.8 million on the date of sale and RBI issued the Company a 5.80% note due March 9, 2018 for the same amount. In July 2013, RBI repaid the entire principal of this note. In April 2011, the Company sold to RBI mortgage loans with a fair value of $3.0 million on the date of sale and RBI issued the Company a 5.75% note due April 19, 2018 for the same amount. In June 2011, RBI repaid the entire principal of this note. | ||
In March 2010, the Company sold to RBI mortgage loans with a fair value of $13.7 million on the date of sale and RBI issued the Company a 7.00% note due March 26, 2017 for the same amount. In 2012, 2011 and 2010, RBI repaid $2.8 million and $1.1 million and $9.8 million, respectively, of this note. In November 2010, the Company sold to RBI mortgage loans with a fair value of $2.7 million on the date of sale and RBI issued the Company a 7.50% note due November 18, 2017 for the same amount. In June 2011, RBI repaid the entire principal of this note. In December 2010, the Company sold to RBI mortgage loans with a fair value of $3.5 million on the date of sale and RBI issued the Company a 6.50% note due December 14, 2017 for the same amount. In June 2011, RBI repaid the entire principal of this note. | ||
In September 2009, the Company sold to RBI mortgage loans with a fair value of $8.3 million on the date of sale and RBI issued the Company a 7.00% note due September 25, 2016 for the same amount. In February 2011, RBI repaid the entire principal of this note. | ||
In 2013, 2012 and 2011, the Company recorded net investment income on the notes due from RBI of $65 thousand, $220 thousand and $679 thousand, respectively. | ||
Pension benefit plans | ||
Effective November 30, 2011, the Corporation became the sponsor of the defined benefit pension plans that cover most full-time employees, certain part-time employees and employee-agents. Prior to November 30, 2011, AIC was the sponsor of these plans. In connection with the change in sponsorship, amounts payable by the Company to the previous plan sponsor, AIC, totaling $351 thousand were forgiven which was recorded as an increase to retained income. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||||||||
5 | Investments | ||||||||||||||||||||||||||||||||||||
Fair values | |||||||||||||||||||||||||||||||||||||
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: | |||||||||||||||||||||||||||||||||||||
Amortized | Gross unrealized | Fair | |||||||||||||||||||||||||||||||||||
($ in thousands) | cost | Gains | Losses | value | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
U.S. government and agencies | $ | 237,510 | $ | 57,321 | $ | — | $ | 294,831 | |||||||||||||||||||||||||||||
Municipal | 677,780 | 58,068 | (9,864 | ) | 725,984 | ||||||||||||||||||||||||||||||||
Corporate | 3,572,713 | 236,627 | (43,751 | ) | 3,765,589 | ||||||||||||||||||||||||||||||||
Foreign government | 320,327 | 62,266 | (977 | ) | 381,616 | ||||||||||||||||||||||||||||||||
RMBS | 154,242 | 5,817 | (140 | ) | 159,919 | ||||||||||||||||||||||||||||||||
CMBS | 166,927 | 9,091 | (38 | ) | 175,980 | ||||||||||||||||||||||||||||||||
ABS | 87,176 | 2,260 | (929 | ) | 88,507 | ||||||||||||||||||||||||||||||||
Redeemable preferred stock | 9,026 | 1,286 | — | 10,312 | |||||||||||||||||||||||||||||||||
Total fixed income securities | $ | 5,225,701 | $ | 432,736 | $ | (55,699 | ) | $ | 5,602,738 | ||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
U.S. government and agencies | $ | 333,787 | $ | 83,260 | $ | — | $ | 417,047 | |||||||||||||||||||||||||||||
Municipal | 704,032 | 123,669 | (9,040 | ) | 818,661 | ||||||||||||||||||||||||||||||||
Corporate | 3,482,420 | 423,330 | (7,224 | ) | 3,898,526 | ||||||||||||||||||||||||||||||||
Foreign government | 303,649 | 92,986 | (94 | ) | 396,541 | ||||||||||||||||||||||||||||||||
RMBS | 284,885 | 11,708 | (915 | ) | 295,678 | ||||||||||||||||||||||||||||||||
CMBS | 195,605 | 11,871 | (6,760 | ) | 200,716 | ||||||||||||||||||||||||||||||||
ABS | 98,415 | 4,652 | (941 | ) | 102,126 | ||||||||||||||||||||||||||||||||
Redeemable preferred stock | 9,087 | 1,543 | — | 10,630 | |||||||||||||||||||||||||||||||||
Total fixed income securities | $ | 5,411,880 | $ | 753,019 | $ | (24,974 | ) | $ | 6,139,925 | ||||||||||||||||||||||||||||
Scheduled maturities | |||||||||||||||||||||||||||||||||||||
The scheduled maturities for fixed income securities are as follows as of December 31, 2013: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized | Fair | |||||||||||||||||||||||||||||||||||
cost | value | ||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 237,779 | $ | 243,799 | |||||||||||||||||||||||||||||||||
Due after one year through five years | 1,231,218 | 1,354,142 | |||||||||||||||||||||||||||||||||||
Due after five years through ten years | 1,886,134 | 1,986,043 | |||||||||||||||||||||||||||||||||||
Due after ten years | 1,462,225 | 1,594,348 | |||||||||||||||||||||||||||||||||||
4,817,356 | 5,178,332 | ||||||||||||||||||||||||||||||||||||
RMBS, CMBS and ABS | 408,345 | 424,406 | |||||||||||||||||||||||||||||||||||
Total | $ | 5,225,701 | $ | 5,602,738 | |||||||||||||||||||||||||||||||||
Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. RMBS, CMBS and ABS are shown separately because of the potential for prepayment of principal prior to contractual maturity dates. | |||||||||||||||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||||||||||||||
Net investment income for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed income securities | $ | 289,571 | $ | 305,849 | $ | 326,000 | |||||||||||||||||||||||||||||||
Mortgage loans | 31,375 | 32,882 | 30,726 | ||||||||||||||||||||||||||||||||||
Equity securities | 4,870 | 3,589 | 2,818 | ||||||||||||||||||||||||||||||||||
Limited partnership interests(1) | 8,862 | 13,316 | 3,157 | ||||||||||||||||||||||||||||||||||
Short-term investments | 210 | 355 | 525 | ||||||||||||||||||||||||||||||||||
Policy loans | 2,543 | 2,600 | 2,628 | ||||||||||||||||||||||||||||||||||
Other | 65 | 220 | 679 | ||||||||||||||||||||||||||||||||||
Investment income, before expense | 337,496 | 358,811 | 366,533 | ||||||||||||||||||||||||||||||||||
Investment expense | (12,379 | ) | (12,616 | ) | (10,264 | ) | |||||||||||||||||||||||||||||||
Net investment income | $ | 325,117 | $ | 346,195 | $ | 356,269 | |||||||||||||||||||||||||||||||
(1) | Income from EMA limited partnerships is reported in net investment income in 2013 and 2012 and realized capital gains and losses in 2011. | ||||||||||||||||||||||||||||||||||||
Realized capital gains and losses | |||||||||||||||||||||||||||||||||||||
Realized capital gains and losses by asset type for the years ended December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed income securities | $ | (1,537 | ) | $ | 2,545 | $ | 10,600 | ||||||||||||||||||||||||||||||
Mortgage loans | (1,507 | ) | 1,452 | (1,119 | ) | ||||||||||||||||||||||||||||||||
Equity securities | 27,944 | — | 9,575 | ||||||||||||||||||||||||||||||||||
Limited partnership interests(1) | (40 | ) | (221 | ) | 8,752 | ||||||||||||||||||||||||||||||||
Derivatives | (9,949 | ) | 13,967 | 15,096 | |||||||||||||||||||||||||||||||||
Short-term investments | — | — | 3 | ||||||||||||||||||||||||||||||||||
Realized capital gains and losses | $ | 14,911 | $ | 17,743 | $ | 42,907 | |||||||||||||||||||||||||||||||
(1) | Income from EMA limited partnerships is reported in net investment income in 2013 and 2012 and realized capital gains and losses in 2011. | ||||||||||||||||||||||||||||||||||||
Realized capital gains and losses by transaction type for the years ended December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Impairment write-downs | $ | (3,431 | ) | $ | (5,144 | ) | $ | (18,129 | ) | ||||||||||||||||||||||||||||
Change in intent write-downs | (5,515 | ) | (310 | ) | (1,449 | ) | |||||||||||||||||||||||||||||||
Net other-than-temporary impairment losses recognized in earnings | (8,946 | ) | (5,454 | ) | (19,578 | ) | |||||||||||||||||||||||||||||||
Sales | 33,806 | 9,230 | 38,631 | ||||||||||||||||||||||||||||||||||
Valuation of derivative instruments | (9,965 | ) | 13,966 | 16,552 | |||||||||||||||||||||||||||||||||
Settlements of derivative instruments | 16 | 1 | (1,456 | ) | |||||||||||||||||||||||||||||||||
EMA limited partnership income | — | — | 8,758 | ||||||||||||||||||||||||||||||||||
Realized capital gains and losses | $ | 14,911 | $ | 17,743 | $ | 42,907 | |||||||||||||||||||||||||||||||
Gross gains of $7.6 million, $22.1 million and $29.9 million and gross losses of $2.5 million, $16.0 million and $10.7 million were realized on sales of fixed income securities during 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses by asset type for the years ended December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||
($ in thousands) | Gross | Included | Net | Gross | Included | Net | Gross | Included | Net | ||||||||||||||||||||||||||||
in OCI | in OCI | in OCI | |||||||||||||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||||||||
Municipal | $ | (1,727 | ) | $ | — | $ | (1,727 | ) | $ | — | $ | — | $ | — | $ | (406 | ) | $ | — | $ | (406 | ) | |||||||||||||||
Corporate | — | — | — | (2,301 | ) | (476 | ) | (2,777 | ) | (5,259 | ) | 1,567 | (3,692 | ) | |||||||||||||||||||||||
RMBS | 28 | — | 28 | (531 | ) | (360 | ) | (891 | ) | (2,210 | ) | 91 | (2,119 | ) | |||||||||||||||||||||||
CMBS | (8,392 | ) | 3,464 | (4,928 | ) | — | (2,423 | ) | (2,423 | ) | (12,287 | ) | 568 | (11,719 | ) | ||||||||||||||||||||||
Total fixed income securities | (10,091 | ) | 3,464 | (6,627 | ) | (2,832 | ) | (3,259 | ) | (6,091 | ) | (20,162 | ) | 2,226 | (17,936 | ) | |||||||||||||||||||||
Mortgage loans | (1,832 | ) | — | (1,832 | ) | 637 | — | 637 | (1,642 | ) | — | (1,642 | ) | ||||||||||||||||||||||||
Equity securities | (487 | ) | — | (487 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other-than-temporary impairment losses | $ | (12,410 | ) | $ | 3,464 | $ | (8,946 | ) | $ | (2,195 | ) | $ | (3,259 | ) | $ | (5,454 | ) | $ | (21,804 | ) | $ | 2,226 | $ | (19,578 | ) | ||||||||||||
The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, were $41 thousand and $58 thousand as of December 31, 2013 and 2012, respectively, and all related to RMBS. The amount excludes $299 thousand and $268 thousand as of December 31, 2013 and 2012, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date. | |||||||||||||||||||||||||||||||||||||
Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | (1,685 | ) | $ | (11,503 | ) | $ | (24,172 | ) | ||||||||||||||||||||||||||||
Additional credit loss for securities previously other-than-temporarily impaired | 29 | (4,796 | ) | (4,387 | ) | ||||||||||||||||||||||||||||||||
Additional credit loss for securities not previously other-than-temporarily impaired | (1,628 | ) | (985 | ) | (12,100 | ) | |||||||||||||||||||||||||||||||
Reduction in credit loss for securities disposed or collected | 960 | 15,599 | 28,304 | ||||||||||||||||||||||||||||||||||
Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell | 1,628 | — | 7 | ||||||||||||||||||||||||||||||||||
Change in credit loss due to accretion of increase in cash flows | — | — | 845 | ||||||||||||||||||||||||||||||||||
Ending balance | $ | (696 | ) | $ | (1,685 | ) | $ | (11,503 | ) | ||||||||||||||||||||||||||||
The Company uses its best estimate of future cash flows expected to be collected from the fixed income security, discounted at the security’s original or current effective rate, as appropriate, to calculate a recovery value and determine whether a credit loss exists. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, foreign exchange rates, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, vintage, geographic concentration, available reserves or escrows, current subordination levels, third party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement. If the estimated recovery value is less than the amortized cost of the security, a credit loss exists and an other-than-temporary impairment for the difference between the estimated recovery value and amortized cost is recorded in earnings. The portion of the unrealized loss related to factors other than credit remains classified in accumulated other comprehensive income. If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings. | |||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses | |||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows: | |||||||||||||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||||||||||
($ in thousands) | value | Gains | Losses | gains (losses) | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | $ | 5,602,738 | $ | 432,736 | $ | (55,699 | ) | $ | 377,037 | ||||||||||||||||||||||||||||
Equity securities | 202,622 | 38,978 | (5 | ) | 38,973 | ||||||||||||||||||||||||||||||||
Short-term investments | 98,553 | 1 | (1 | ) | — | ||||||||||||||||||||||||||||||||
EMA limited partnerships(1) | — | ||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 416,010 | ||||||||||||||||||||||||||||||||||||
Amounts recognized for: | |||||||||||||||||||||||||||||||||||||
Insurance reserves(2) | (168,267 | ) | |||||||||||||||||||||||||||||||||||
DAC and DSI(3) | (13,911 | ) | |||||||||||||||||||||||||||||||||||
Amounts recognized | (182,178 | ) | |||||||||||||||||||||||||||||||||||
Deferred income taxes | (81,841 | ) | |||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 151,991 | |||||||||||||||||||||||||||||||||||
(1) | Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross gains and losses are not applicable. | ||||||||||||||||||||||||||||||||||||
(2) | The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. | ||||||||||||||||||||||||||||||||||||
(3) | The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. | ||||||||||||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||||||||||
value | Gains | Losses | gains (losses) | ||||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | $ | 6,139,925 | $ | 753,019 | $ | (24,974 | ) | $ | 728,045 | ||||||||||||||||||||||||||||
Equity securities | 164,971 | 31,555 | (317 | ) | 31,238 | ||||||||||||||||||||||||||||||||
Short-term investments | 61,948 | 1 | — | 1 | |||||||||||||||||||||||||||||||||
EMA limited partnerships | 127 | ||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 759,411 | ||||||||||||||||||||||||||||||||||||
Amounts recognized for: | |||||||||||||||||||||||||||||||||||||
Insurance reserves | (360,887 | ) | |||||||||||||||||||||||||||||||||||
DAC and DSI | (24,206 | ) | |||||||||||||||||||||||||||||||||||
Amounts recognized | (385,093 | ) | |||||||||||||||||||||||||||||||||||
Deferred income taxes | (131,011 | ) | |||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 243,307 | |||||||||||||||||||||||||||||||||||
Change in unrealized net capital gains and losses | |||||||||||||||||||||||||||||||||||||
The change in unrealized net capital gains and losses for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed income securities | $ | (351,008 | ) | $ | 163,066 | $ | 265,163 | ||||||||||||||||||||||||||||||
Equity securities | 7,735 | 10,861 | (4,834 | ) | |||||||||||||||||||||||||||||||||
Short-term investments | (1 | ) | 4 | (3 | ) | ||||||||||||||||||||||||||||||||
EMA limited partnerships | (127 | ) | 97 | 30 | |||||||||||||||||||||||||||||||||
Total | (343,401 | ) | 174,028 | 260,356 | |||||||||||||||||||||||||||||||||
Amounts recognized for: | |||||||||||||||||||||||||||||||||||||
Insurance reserves | 192,620 | (90,058 | ) | (167,226 | ) | ||||||||||||||||||||||||||||||||
DAC and DSI | 10,295 | (9,162 | ) | (10,811 | ) | ||||||||||||||||||||||||||||||||
Amounts recognized | 202,915 | (99,220 | ) | (178,037 | ) | ||||||||||||||||||||||||||||||||
Deferred income taxes | 49,170 | (26,182 | ) | (28,812 | ) | ||||||||||||||||||||||||||||||||
(Decrease) increase in unrealized net capital gains and losses, after-tax | $ | (91,316 | ) | $ | 48,626 | $ | 53,507 | ||||||||||||||||||||||||||||||
Portfolio monitoring | |||||||||||||||||||||||||||||||||||||
The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income and equity security whose carrying value may be other-than-temporarily impaired. | |||||||||||||||||||||||||||||||||||||
For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, the security’s decline in fair value is considered other than temporary and is recorded in earnings. | |||||||||||||||||||||||||||||||||||||
If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value by discounting the best estimate of future cash flows at the security’s original or current effective rate, as appropriate, and compares this to the amortized cost of the security. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss related to other factors recognized in other comprehensive income. | |||||||||||||||||||||||||||||||||||||
For equity securities, the Company considers various factors, including whether it has the intent and ability to hold the equity security for a period of time sufficient to recover its cost basis. Where the Company lacks the intent and ability to hold to recovery, or believes the recovery period is extended, the equity security’s decline in fair value is considered other than temporary and is recorded in earnings. | |||||||||||||||||||||||||||||||||||||
For fixed income and equity securities managed by third parties, either the Company has contractually retained its decision making authority as it pertains to selling securities that are in an unrealized loss position or it recognizes any unrealized loss at the end of the period through a charge to earnings. | |||||||||||||||||||||||||||||||||||||
The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost (for fixed income securities) or cost (for equity securities) is below established thresholds. The process also includes the monitoring of other impairment indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of other-than-temporary impairment for these fixed income and equity securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value is other than temporary are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the length of time and extent to which the fair value has been less than amortized cost or cost. | |||||||||||||||||||||||||||||||||||||
The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position. | |||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||
unrealized | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Number | Fair | Unrealized | Number | Fair | Unrealized | losses | ||||||||||||||||||||||||||||||
of issues | value | losses | of issues | value | losses | ||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||||||||||||||
Municipal | 15 | $ | 74,713 | $ | (5,180 | ) | 1 | $ | 14,663 | $ | (4,684 | ) | $ | (9,864 | ) | ||||||||||||||||||||||
Corporate | 209 | 805,236 | (35,258 | ) | 16 | 72,904 | (8,493 | ) | (43,751 | ) | |||||||||||||||||||||||||||
Foreign government | — | — | — | 1 | 8,976 | (977 | ) | (977 | ) | ||||||||||||||||||||||||||||
RMBS | — | — | — | 5 | 15,742 | (140 | ) | (140 | ) | ||||||||||||||||||||||||||||
CMBS | 3 | 5,533 | (38 | ) | — | — | — | (38 | ) | ||||||||||||||||||||||||||||
ABS | 1 | 5,076 | (4 | ) | 1 | 9,075 | (925 | ) | (929 | ) | |||||||||||||||||||||||||||
Total fixed income securities | 228 | 890,558 | (40,480 | ) | 24 | 121,360 | (15,219 | ) | (55,699 | ) | |||||||||||||||||||||||||||
Equity securities | 5 | 637 | (5 | ) | — | — | — | (5 | ) | ||||||||||||||||||||||||||||
Total fixed income and equity securities | 233 | $ | 891,195 | $ | (40,485 | ) | 24 | $ | 121,360 | $ | (15,219 | ) | $ | (55,704 | ) | ||||||||||||||||||||||
Investment grade fixed income securities | 175 | $ | 851,728 | $ | (37,398 | ) | 10 | $ | 66,380 | $ | (9,785 | ) | $ | (47,183 | ) | ||||||||||||||||||||||
Below investment grade fixed income securities | 53 | 38,830 | (3,082 | ) | 14 | 54,980 | (5,434 | ) | (8,516 | ) | |||||||||||||||||||||||||||
Total fixed income securities | 228 | $ | 890,558 | $ | (40,480 | ) | 24 | $ | 121,360 | $ | (15,219 | ) | $ | (55,699 | ) | ||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||||||||||||||
Municipal | — | $ | — | $ | — | 6 | $ | 45,374 | $ | (9,040 | ) | $ | (9,040 | ) | |||||||||||||||||||||||
Corporate | 27 | 116,512 | (2,068 | ) | 13 | 54,442 | (5,156 | ) | (7,224 | ) | |||||||||||||||||||||||||||
Foreign government | 1 | 9,854 | (94 | ) | — | — | — | (94 | ) | ||||||||||||||||||||||||||||
RMBS | 2 | 33 | — | 4 | 19,497 | (915 | ) | (915 | ) | ||||||||||||||||||||||||||||
CMBS | 1 | 1,995 | (6 | ) | 5 | 21,115 | (6,754 | ) | (6,760 | ) | |||||||||||||||||||||||||||
ABS | — | — | — | 2 | 12,838 | (941 | ) | (941 | ) | ||||||||||||||||||||||||||||
Total fixed income securities | 31 | $ | 128,394 | $ | (2,168 | ) | 30 | $ | 153,266 | $ | (22,806 | ) | $ | (24,974 | ) | ||||||||||||||||||||||
Equity securities | 2 | 24,954 | (317 | ) | — | — | — | (317 | ) | ||||||||||||||||||||||||||||
Total fixed income and equity securities | 33 | $ | 153,348 | $ | (2,485 | ) | 30 | $ | 153,266 | $ | (22,806 | ) | $ | (25,291 | ) | ||||||||||||||||||||||
Investment grade fixed income securities | 23 | $ | 107,042 | $ | (1,359 | ) | 17 | $ | 99,235 | $ | (11,525 | ) | $ | (12,884 | ) | ||||||||||||||||||||||
Below investment grade fixed income securities | 8 | 21,352 | (809 | ) | 13 | 54,031 | (11,281 | ) | (12,090 | ) | |||||||||||||||||||||||||||
Total fixed income securities | 31 | $ | 128,394 | $ | (2,168 | ) | 30 | $ | 153,266 | $ | (22,806 | ) | $ | (24,974 | ) | ||||||||||||||||||||||
As of December 31, 2013, $49.6 million of unrealized losses are related to securities with an unrealized loss position less than 20% of amortized cost or cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired. Of the $49.6 million, $42.5 million are related to unrealized losses on investment grade fixed income securities. Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P, Fitch, Dominion, Kroll or Realpoint, a rating of aaa, aa, a or bbb from A.M. Best, or a comparable internal rating if an externally provided rating is not available. Unrealized losses on investment grade securities are principally related to increasing risk-free interest rates or widening credit spreads since the time of initial purchase. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013, the remaining $6.1 million of unrealized losses are related to securities in unrealized loss positions greater than or equal to 20% of amortized cost. Investment grade fixed income securities comprising $4.7 million of these unrealized losses were evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations. Of the $6.1 million, $1.4 million are related to below investment grade fixed income securities. | |||||||||||||||||||||||||||||||||||||
RMBS, CMBS and ABS in an unrealized loss position were evaluated based on actual and projected collateral losses relative to the securities’ positions in the respective securitization trusts, security specific expectations of cash flows, and credit ratings. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread, and (iii) for RMBS and ABS in an unrealized loss position, credit enhancements from reliable bond insurers, where applicable. Municipal bonds in an unrealized loss position were evaluated based on the quality of the underlying securities. Unrealized losses on equity securities are primarily related to temporary equity market fluctuations of securities that are expected to recover. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis. As of December 31, 2013, the Company had the intent and ability to hold equity securities with unrealized losses for a period of time sufficient for them to recover. | |||||||||||||||||||||||||||||||||||||
Limited partnerships | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013 and 2012, the carrying value of equity method limited partnerships totaled $75.1 million and $70.1 million, respectively. The Company recognizes an impairment loss for equity method limited partnerships when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. The Company had no write-downs related to equity method limited partnerships in 2013, 2012 or 2011. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013 and 2012, the carrying value for cost method limited partnerships was $41.4 million and $29.7 million, respectively. To determine if an other-than-temporary impairment has occurred, the Company evaluates whether an impairment indicator has occurred in the period that may have a significant adverse effect on the carrying value of the investment. Impairment indicators may include: significantly reduced valuations of the investments held by the limited partnerships; actual recent cash flows received being significantly less than expected cash flows; reduced valuations based on financing completed at a lower value; completed sale of a material underlying investment at a price significantly lower than expected; or any other adverse events since the last financial statements received that might affect the fair value of the investee’s capital. Additionally, the Company’s portfolio monitoring process includes a quarterly review of all cost method limited partnerships to identify instances where the net asset value is below established thresholds for certain periods of time, as well as investments that are performing below expectations, for further impairment consideration. If a cost method limited partnership is other-than-temporarily impaired, the carrying value is written down to fair value, generally estimated to be equivalent to the reported net asset value of the underlying funds. In 2013, 2012 and 2011, the Company had no write-downs related to cost method limited partnerships. | |||||||||||||||||||||||||||||||||||||
Mortgage loans | |||||||||||||||||||||||||||||||||||||
The Company’s mortgage loans are commercial mortgage loans collateralized by a variety of commercial real estate property types located throughout the United States and totaled, net of valuation allowance, $514.5 million and $570.4 million as of December 31, 2013 and 2012, respectively. Substantially all of the commercial mortgage loans are non-recourse to the borrower. The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31. | |||||||||||||||||||||||||||||||||||||
(% of mortgage loan portfolio carrying value) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
California | 25.6 | % | 24.3 | % | |||||||||||||||||||||||||||||||||
Illinois | 13 | 11.5 | |||||||||||||||||||||||||||||||||||
New Jersey | 8.8 | 7.4 | |||||||||||||||||||||||||||||||||||
Texas | 5.5 | 8.9 | |||||||||||||||||||||||||||||||||||
Arizona | 5.3 | 5.7 | |||||||||||||||||||||||||||||||||||
Ohio | 4.9 | 5.6 | |||||||||||||||||||||||||||||||||||
Florida | 4.5 | 5.3 | |||||||||||||||||||||||||||||||||||
The types of properties collateralizing the mortgage loans as of December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
(% of mortgage loan portfolio carrying value) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Warehouse | 26.6 | % | 28.3 | % | |||||||||||||||||||||||||||||||||
Retail | 23.3 | 19.9 | |||||||||||||||||||||||||||||||||||
Office buildings | 20.2 | 22.6 | |||||||||||||||||||||||||||||||||||
Apartment complex | 20.1 | 21.4 | |||||||||||||||||||||||||||||||||||
Other | 9.8 | 7.8 | |||||||||||||||||||||||||||||||||||
Total | 100 | % | 100 | % | |||||||||||||||||||||||||||||||||
The contractual maturities of the mortgage loan portfolio as of December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Number | Carrying | Percent | ||||||||||||||||||||||||||||||||||
of loans | value | ||||||||||||||||||||||||||||||||||||
2014 | 5 | $ | 21,756 | 4.2 | % | ||||||||||||||||||||||||||||||||
2015 | 16 | 90,513 | 17.6 | ||||||||||||||||||||||||||||||||||
2016 | 12 | 58,694 | 11.4 | ||||||||||||||||||||||||||||||||||
2017 | 8 | 42,992 | 8.4 | ||||||||||||||||||||||||||||||||||
Thereafter | 54 | 300,534 | 58.4 | ||||||||||||||||||||||||||||||||||
Total | 95 | $ | 514,489 | 100 | % | ||||||||||||||||||||||||||||||||
Mortgage loans are evaluated for impairment on a specific loan basis through a quarterly credit monitoring process and review of key credit quality indicators. Mortgage loans are considered impaired when it is probable that the Company will not collect the contractual principal and interest. Valuation allowances are established for impaired loans to reduce the carrying value to the fair value of the collateral less costs to sell or the present value of the loan’s expected future repayment cash flows discounted at the loan’s original effective interest rate. Impaired mortgage loans may not have a valuation allowance when the fair value of the collateral less costs to sell is higher than the carrying value. Valuation allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell. Mortgage loans are charged off against their corresponding valuation allowances when there is no reasonable expectation of recovery. The impairment evaluation is non-statistical in respect to the aggregate portfolio but considers facts and circumstances attributable to each loan. It is not considered probable that additional impairment losses, beyond those identified on a specific loan basis, have been incurred as of December 31, 2013. | |||||||||||||||||||||||||||||||||||||
Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Cash receipts on mortgage loans on nonaccrual status are generally recorded as a reduction of carrying value. | |||||||||||||||||||||||||||||||||||||
Debt service coverage ratio is considered a key credit quality indicator when mortgage loans are evaluated for impairment. Debt service coverage ratio represents the amount of estimated cash flows from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process. | |||||||||||||||||||||||||||||||||||||
The following table reflects the carrying value of non-impaired fixed rate mortgage loans summarized by debt service coverage ratio distribution as of December 31. There were no variable rate mortgage loans as of December 31, 2013 or 2012. | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Debt service coverage ratio distribution | |||||||||||||||||||||||||||||||||||||
Below 1.0 | $ | 25,086 | $ | 27,383 | |||||||||||||||||||||||||||||||||
1.0 - 1.25 | 68,687 | 99,713 | |||||||||||||||||||||||||||||||||||
1.26 - 1.50 | 155,452 | 150,877 | |||||||||||||||||||||||||||||||||||
Above 1.50 | 253,039 | 292,392 | |||||||||||||||||||||||||||||||||||
Total non-impaired mortgage loans | $ | 502,264 | $ | 570,365 | |||||||||||||||||||||||||||||||||
Mortgage loans with a debt service coverage ratio below 1.0 that are not considered impaired primarily relate to instances where the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered temporary, or there are other risk mitigating circumstances such as additional collateral, escrow balances or borrower guarantees. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013, there were $12.2 million of impaired mortgage loans with a valuation allowance of $1.8 million. There were no impaired mortgage loans as of December 31, 2012. The average balance of impaired loans was $7.6 million, $1.2 million and $4.4 million during 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
The rollforward of the valuation allowance on impaired mortgage loans for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | — | $ | 637 | $ | 1,670 | |||||||||||||||||||||||||||||||
Net increase (decrease) in valuation allowance | 1,832 | (637 | ) | 1,642 | |||||||||||||||||||||||||||||||||
Charge offs | — | — | (2,675 | ) | |||||||||||||||||||||||||||||||||
Ending balance | $ | 1,832 | $ | — | $ | 637 | |||||||||||||||||||||||||||||||
There were no past due mortgage loans as of December 31, 2013 or 2012. | |||||||||||||||||||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||||||||||||||
The Company maintains a diversified portfolio of municipal bonds. The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio. | |||||||||||||||||||||||||||||||||||||
(% of municipal bond portfolio carrying value) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
California | 22.9 | % | 21.3 | % | |||||||||||||||||||||||||||||||||
Texas | 11.1 | 12 | |||||||||||||||||||||||||||||||||||
Illinois | 5.9 | 6 | |||||||||||||||||||||||||||||||||||
Oregon | 5.2 | 4.9 | |||||||||||||||||||||||||||||||||||
Concentration of credit risk | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company’s shareholder’s equity. | |||||||||||||||||||||||||||||||||||||
Securities loaned | |||||||||||||||||||||||||||||||||||||
The Company’s business activities include securities lending programs with third parties, mostly large banks. As of December 31, 2013 and 2012, fixed income securities with a carrying value of $60.7 million and $57.9 million, respectively, were on loan under these agreements. Interest income on collateral, net of fees, was zero in 2013, 2012 and 2011. | |||||||||||||||||||||||||||||||||||||
Other investment information | |||||||||||||||||||||||||||||||||||||
Included in fixed income securities are below investment grade assets totaling $285.7 million and $288.1 million as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013, fixed income securities and short-term investments with a carrying value of $2.6 million were on deposit with regulatory authorities as required by law. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013, there were no fixed income securities that were non-income producing. |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Fair Value of Assets and Liabilities | ' | ||||||||||||||||||||
6 | Fair Value of Assets and Liabilities | ||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows: | |||||||||||||||||||||
Level 1: | Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access. | ||||||||||||||||||||
Level 2: | Assets and liabilities whose values are based on the following: | ||||||||||||||||||||
(a) | Quoted prices for similar assets or liabilities in active markets; | ||||||||||||||||||||
(b) | Quoted prices for identical or similar assets or liabilities in markets that are not active; or | ||||||||||||||||||||
(c) | Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. | ||||||||||||||||||||
Level 3: | Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the assets and liabilities. | ||||||||||||||||||||
The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. | |||||||||||||||||||||
The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions. | |||||||||||||||||||||
The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy. The first is where quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources. | |||||||||||||||||||||
The second situation where the Company classifies securities in Level 3 is where specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs. | |||||||||||||||||||||
Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans, limited partnership interests and policy loans. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to remeasurement at fair value after initial recognition and the resulting remeasurement is reflected in the financial statements. In addition, derivatives embedded in fixed income securities are not disclosed in the hierarchy as free-standing derivatives since they are presented with the host contracts in fixed income securities. | |||||||||||||||||||||
In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used. | |||||||||||||||||||||
Summary of significant valuation techniques for assets and liabilities measured at fair value on a recurring basis | |||||||||||||||||||||
Level 1 measurements | |||||||||||||||||||||
• | Fixed income securities: Comprise certain U.S. Treasuries. Valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access. | ||||||||||||||||||||
• | Equity securities: Comprise actively traded, exchange-listed equity securities. Valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access. | ||||||||||||||||||||
• | Short-term: Comprise actively traded money market funds that have daily quoted net asset values for identical assets that the Company can access. | ||||||||||||||||||||
• | Separate account assets: Comprise actively traded mutual funds that have daily quoted net asset values for identical assets that the Company can access. Net asset values for the actively traded mutual funds in which the separate account assets are invested are obtained daily from the fund managers. | ||||||||||||||||||||
Level 2 measurements | |||||||||||||||||||||
• | Fixed income securities: | ||||||||||||||||||||
U.S. government and agencies: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. | |||||||||||||||||||||
Municipal: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. | |||||||||||||||||||||
Corporate, including privately placed: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. Also included are privately placed securities valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer. | |||||||||||||||||||||
Foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. | |||||||||||||||||||||
RMBS and ABS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads. Certain ABS are valued based on non-binding broker quotes whose inputs have been corroborated to be market observable. | |||||||||||||||||||||
CMBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads. | |||||||||||||||||||||
Redeemable preferred stock: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, underlying stock prices and credit spreads. | |||||||||||||||||||||
• | Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. For certain short-term investments, amortized cost is used as the best estimate of fair value. | ||||||||||||||||||||
Level 3 measurements | |||||||||||||||||||||
• | Fixed income securities: | ||||||||||||||||||||
Municipal: Municipal bonds that are not rated by third party credit rating agencies but are rated by the National Association of Insurance Commissioners (“NAIC”). The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements, contractual cash flows, benchmark yields and credit spreads. Also includes auction rate securities (“ARS”) primarily backed by student loans that have become illiquid due to failures in the auction market are valued using a discounted cash flow model that is widely accepted in the financial services industry and uses significant non-market observable inputs, including the anticipated date liquidity will return to the market. | |||||||||||||||||||||
Corporate, including privately placed: Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. | |||||||||||||||||||||
ABS: Valued based on non-binding broker quotes received from brokers who are familiar with the investments and where the inputs have not been corroborated to be market observable. | |||||||||||||||||||||
• | Other investments: Certain over-the-counter (“OTC”) derivatives, such as interest rate caps, are valued using models that are widely accepted in the financial services industry. These are categorized as Level 3 as a result of the significance of non-market observable inputs such as volatility. Other primary inputs include interest rate yield curves. | ||||||||||||||||||||
• | Other assets: Includes a structured settlement annuity reinsurance agreement accounted for as a derivative instrument that is valued internally. The model primarily uses stochastically determined cash flows, ultimate reinvestment spreads and applicable market data, such as interest rate and volatility assumptions. This item is categorized as Level 3 as a result of the significance of non-market observable inputs. | ||||||||||||||||||||
• | Contractholder funds: Derivatives embedded in certain life and annuity contracts are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs. | ||||||||||||||||||||
Assets and liabilities measured at fair value on a non-recurring basis | |||||||||||||||||||||
Mortgage loans written-down to fair value in connection with recognizing impairments are valued based on the fair value of the underlying collateral less costs to sell. Limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments are valued using net asset values. | |||||||||||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2013. There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2013. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance | |||||||||||||||||
in active | other | unobservable | as of | ||||||||||||||||||
markets for | observable | inputs | December 31, | ||||||||||||||||||
identical | inputs | (Level 3) | 2013 | ||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 3,678 | $ | 291,153 | $ | — | $ | 294,831 | |||||||||||||
Municipal | — | 674,669 | 51,315 | 725,984 | |||||||||||||||||
Corporate | — | 3,506,161 | 259,428 | 3,765,589 | |||||||||||||||||
Foreign government | — | 381,616 | — | 381,616 | |||||||||||||||||
RMBS | — | 159,919 | — | 159,919 | |||||||||||||||||
CMBS | — | 175,980 | — | 175,980 | |||||||||||||||||
ABS | — | 63,708 | 24,799 | 88,507 | |||||||||||||||||
Redeemable preferred stock | — | 10,312 | — | 10,312 | |||||||||||||||||
Total fixed income securities | 3,678 | 5,263,518 | 335,542 | 5,602,738 | |||||||||||||||||
Equity securities | 202,622 | — | — | 202,622 | |||||||||||||||||
Short-term investments | 3,157 | 95,396 | — | 98,553 | |||||||||||||||||
Other investments: Free-standing derivatives | — | — | 1,076 | 1,076 | |||||||||||||||||
Separate account assets | 435,446 | — | — | 435,446 | |||||||||||||||||
Other assets | — | — | 27,826 | 27,826 | |||||||||||||||||
Total assets at fair value | $ | 644,903 | $ | 5,358,914 | $ | 364,444 | $ | 6,368,261 | |||||||||||||
% of total assets at fair value | 10.1 | % | 84.2 | % | 5.7 | % | 100 | % | |||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (9,197 | ) | $ | (9,197 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (9,197 | ) | $ | (9,197 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2012. There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2012. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance | |||||||||||||||||
in active | other | unobservable | as of | ||||||||||||||||||
markets for | observable | inputs | December 31, | ||||||||||||||||||
identical | inputs | (Level 3) | 2012 | ||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 111,133 | $ | 305,914 | $ | — | $ | 417,047 | |||||||||||||
Municipal | — | 750,989 | 67,672 | 818,661 | |||||||||||||||||
Corporate | — | 3,638,175 | 260,351 | 3,898,526 | |||||||||||||||||
Foreign government | — | 396,541 | — | 396,541 | |||||||||||||||||
RMBS | — | 295,678 | — | 295,678 | |||||||||||||||||
CMBS | — | 200,716 | — | 200,716 | |||||||||||||||||
ABS | — | 75,156 | 26,970 | 102,126 | |||||||||||||||||
Redeemable preferred stock | — | 10,630 | — | 10,630 | |||||||||||||||||
Total fixed income securities | 111,133 | 5,673,799 | 354,993 | 6,139,925 | |||||||||||||||||
Equity securities | 164,971 | — | — | 164,971 | |||||||||||||||||
Short-term investments | 7,675 | 54,273 | — | 61,948 | |||||||||||||||||
Other investments: Free-standing derivatives | — | — | 306 | 306 | |||||||||||||||||
Separate account assets | 436,380 | — | — | 436,380 | |||||||||||||||||
Other assets | — | — | 34,655 | 34,655 | |||||||||||||||||
Total assets at fair value | $ | 720,159 | $ | 5,728,072 | $ | 389,954 | $ | 6,838,185 | |||||||||||||
% of total assets at fair value | 10.5 | % | 83.8 | % | 5.7 | % | 100 | % | |||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (17,877 | ) | $ | (17,877 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (17,877 | ) | $ | (17,877 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. | |||||||||||||||||||||
($ in thousands) | Fair | Valuation | Unobservable | Range | Weighted | ||||||||||||||||
value | technique | input | average | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
ARS backed by student loans | $ | 19,149 | Discounted | Anticipated date | 36 - 54 months | 39 - 51 months | |||||||||||||||
cash flow | liquidity will | ||||||||||||||||||||
model | return to the | ||||||||||||||||||||
market | |||||||||||||||||||||
Other assets – Structured settlement annuity reinsurance agreement | Stochastic | Ultimate | 133.9 - 198.4 | 157.5 basis | |||||||||||||||||
$ | 27,826 | cash flow | reinvestment | basis points | points | ||||||||||||||||
model | spreads | ||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||
ARS backed by student loans | $ | 31,429 | Discounted | Anticipated date | 36 - 60 months | 38 - 50 months | |||||||||||||||
cash flow | liquidity will | ||||||||||||||||||||
model | return to the | ||||||||||||||||||||
market | |||||||||||||||||||||
Other assets – Structured settlement annuity reinsurance agreement | Stochastic | Ultimate | 133.8 - 196.0 | 156.4 basis | |||||||||||||||||
$ | 34,655 | cash flow | reinvestment | basis points | points | ||||||||||||||||
model | spreads | ||||||||||||||||||||
If the anticipated date liquidity will return to the market is sooner (later), it would result in a higher (lower) fair value. If the ultimate reinvestment spreads increased (decreased), it would result in a lower (higher) fair value. | |||||||||||||||||||||
As of December 31, 2013 and 2012, Level 3 fair value measurements include $308.9 million and $310.1 million of fixed income securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. The Company does not develop the unobservable inputs used in measuring fair value; therefore, these are not included in the table above. However, an increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value. | |||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013. | |||||||||||||||||||||
Balance as of | Total gains (losses) | Transfers | Transfers | ||||||||||||||||||
December 31, | included in: | into | out of | ||||||||||||||||||
($ in thousands) | 2012 | Net | OCI | Level 3 | Level 3 | ||||||||||||||||
income(1) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | 67,672 | $ | (1,960 | ) | $ | 2,614 | $ | — | $ | — | ||||||||||
Corporate | 260,351 | 8,509 | (8,214 | ) | 9,663 | (4,160 | ) | ||||||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
ABS | 26,970 | — | (951 | ) | — | — | |||||||||||||||
Total fixed income securities | 354,993 | 6,549 | (6,551 | ) | 9,663 | (4,160 | ) | ||||||||||||||
Free-standing derivatives, net | 306 | 431 | — | — | — | ||||||||||||||||
Other assets | 34,655 | (6,829 | ) | — | — | — | |||||||||||||||
Total recurring Level 3 assets | $ | 389,954 | $ | 151 | $ | (6,551 | ) | $ | 9,663 | $ | (4,160 | ) | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (17,877 | ) | $ | 8,680 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (17,877 | ) | $ | 8,680 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | — | $ | (15,067 | ) | $ | — | $ | (1,944 | ) | $ | 51,315 | |||||||||
Corporate | 6,910 | (10,615 | ) | — | (3,016 | ) | 259,428 | ||||||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
ABS | — | — | — | (1,220 | ) | 24,799 | |||||||||||||||
Total fixed income securities | 6,910 | (25,682 | ) | — | (6,180 | ) | 335,542 | ||||||||||||||
Free-standing derivatives, net | 339 | — | — | — | 1,076 | ||||||||||||||||
Other assets | — | — | — | — | 27,826 | ||||||||||||||||
Total recurring Level 3 assets | $ | 7,249 | $ | (25,682 | ) | $ | — | $ | (6,180 | ) | $ | 364,444 | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | — | $ | — | $ | (9,197 | ) | ||||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | — | $ | — | $ | (9,197 | ) | ||||||||||
(1) | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012. | |||||||||||||||||||||
Balance as of | Total gains (losses) | ||||||||||||||||||||
December 31, | included in: | ||||||||||||||||||||
($ in thousands) | 2011 | Net | OCI | Transfers | Transfers | ||||||||||||||||
income(1) | into | out of | |||||||||||||||||||
Level 3 | Level 3 | ||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | 50,422 | $ | 50 | $ | 3,082 | $ | 18,576 | $ | — | |||||||||||
Corporate | 223,643 | 3,854 | 11,224 | 52,629 | — | ||||||||||||||||
RMBS | 2,730 | — | — | — | (2,730 | ) | |||||||||||||||
ABS | 26,425 | — | 3,668 | — | — | ||||||||||||||||
Total fixed income securities | 303,220 | 3,904 | 17,974 | 71,205 | (2,730 | ) | |||||||||||||||
Free-standing derivatives, net | (2,867 | ) | (296 | ) | — | — | — | ||||||||||||||
Other assets | 16,869 | 17,786 | — | — | — | ||||||||||||||||
Total recurring Level 3 assets | $ | 317,222 | $ | 21,394 | $ | 17,974 | $ | 71,205 | $ | (2,730 | ) | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (21,854 | ) | $ | 3,977 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (21,854 | ) | $ | 3,977 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | — | $ | (2,251 | ) | $ | — | $ | (2,207 | ) | $ | 67,672 | |||||||||
Corporate | 18,029 | (18,812 | ) | — | (30,216 | ) | 260,351 | ||||||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
ABS | — | (1,866 | ) | — | (1,257 | ) | 26,970 | ||||||||||||||
Total fixed income securities | 18,029 | (22,929 | ) | — | (33,680 | ) | 354,993 | ||||||||||||||
Free-standing derivatives, net | 3,471 | — | — | (2 | ) | 306 | |||||||||||||||
Other assets | — | — | — | — | 34,655 | ||||||||||||||||
Total recurring Level 3 assets | $ | 21,500 | $ | (22,929 | ) | $ | — | $ | (33,682 | ) | $ | 389,954 | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | — | $ | — | $ | (17,877 | ) | ||||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | — | $ | — | $ | (17,877 | ) | ||||||||||
(1) | The effect to net income totals $25.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $14.3 million in realized capital gains and losses, $7.1 million in net investment income, $(142) thousand in interest credited to contractholder funds and $4.1 million in contract benefits. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2011. | |||||||||||||||||||||
Balance as of | Total gains (losses) | ||||||||||||||||||||
December 31, | included in: | ||||||||||||||||||||
($ in thousands) | 2010 | Net | OCI | Transfers | Transfers | ||||||||||||||||
income(1) | into | out of | |||||||||||||||||||
Level 3 | Level 3 | ||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | 103,369 | $ | 43 | $ | 1,054 | $ | 5,378 | $ | (7,892 | ) | ||||||||||
Corporate | 225,207 | 8,719 | 4,191 | 10,882 | (37,097 | ) | |||||||||||||||
RMBS | 80,063 | (1,066 | ) | 1,743 | — | (56,510 | ) | ||||||||||||||
CMBS | 141,869 | (4,698 | ) | 15,987 | — | (133,918 | ) | ||||||||||||||
ABS | 40,851 | 149 | 252 | — | (23,013 | ) | |||||||||||||||
Total fixed income securities | 591,359 | 3,147 | 23,227 | 16,260 | (258,430 | ) | |||||||||||||||
Free-standing derivatives, net | (3,011 | ) | (3,153 | ) | — | — | — | ||||||||||||||
Other assets | (4,870 | ) | 21,739 | — | — | — | |||||||||||||||
Total recurring Level 3 assets | $ | 583,478 | $ | 21,733 | $ | 23,227 | $ | 16,260 | $ | (258,430 | ) | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (17,544 | ) | $ | (4,310 | ) | $ | — | $ | — | $ | — | |||||||||
Total recurring Level 3 liabilities | $ | (17,544 | ) | $ | (4,310 | ) | $ | — | $ | — | $ | — | |||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | — | $ | (49,623 | ) | $ | — | $ | (1,907 | ) | $ | 50,422 | |||||||||
Corporate | 24,978 | (11,680 | ) | — | (1,557 | ) | 223,643 | ||||||||||||||
RMBS | — | (8,582 | ) | — | (12,918 | ) | 2,730 | ||||||||||||||
CMBS | — | (19,240 | ) | — | — | — | |||||||||||||||
ABS | 14,999 | (3,856 | ) | — | (2,957 | ) | 26,425 | ||||||||||||||
Total fixed income securities | 39,977 | (92,981 | ) | — | (19,339 | ) | 303,220 | ||||||||||||||
Free-standing derivatives, net | 1,867 | — | — | 1,430 | (2,867 | )(2) | |||||||||||||||
Other assets | — | — | — | — | 16,869 | ||||||||||||||||
Total recurring Level 3 assets | $ | 41,844 | $ | (92,981 | ) | $ | — | $ | (17,909 | ) | $ | 317,222 | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | — | $ | — | $ | (21,854 | ) | ||||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | — | $ | — | $ | (21,854 | ) | ||||||||||
(1) | The effect to net income totals $17.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $13.4 million in realized capital gains and losses, $8.3 million in net investment income, $(156) thousand in interest credited to contractholder funds and $(4.2) million in contract benefits. | ||||||||||||||||||||
(2) | Comprises $38 thousand of assets and $2.9 million of liabilities. | ||||||||||||||||||||
Transfers between level categorizations may occur due to changes in the availability of market observable inputs, which generally are caused by changes in market conditions such as liquidity, trading volume or bid-ask spreads. Transfers between level categorizations may also occur due to changes in the valuation source. For example, in situations where a fair value quote is not provided by the Company’s independent third-party valuation service provider and as a result the price is stale or has been replaced with a broker quote whose inputs have not been corroborated to be market observable, the security is transferred into Level 3. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred. Therefore, for all transfers into Level 3, all realized and changes in unrealized gains and losses in the quarter of transfer are reflected in the Level 3 rollforward table. | |||||||||||||||||||||
There were no transfers between Level 1 and Level 2 during 2013, 2012 or 2011. | |||||||||||||||||||||
During 2011, certain RMBS, CMBS and ABS were transferred into Level 2 from Level 3 as a result of increased liquidity in the market and a sustained increase in the market activity for these assets. Additionally, in 2011 certain ABS that were valued based on non-binding broker quotes were transferred into Level 2 from Level 3 since the inputs were corroborated to be market observable. | |||||||||||||||||||||
Transfers into Level 3 during 2013, 2012 and 2011 included situations where a fair value quote was not provided by the Company’s independent third-party valuation service provider and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3. Transfers out of Level 3 during 2013, 2012 and 2011 included situations where a broker quote was used in the prior period and a fair value quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant. | |||||||||||||||||||||
The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31. | |||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | (1,458 | ) | $ | 54 | $ | 151 | ||||||||||||||
Corporate | 6,633 | 4,912 | 8,193 | ||||||||||||||||||
Total fixed income securities | 5,175 | 4,966 | 8,344 | ||||||||||||||||||
Free-standing derivatives, net | 431 | (279 | ) | (1,714 | ) | ||||||||||||||||
Other assets | (6,829 | ) | 17,786 | 21,739 | |||||||||||||||||
Total recurring Level 3 assets | $ | (1,223 | ) | $ | 22,473 | $ | 28,369 | ||||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | 8,680 | $ | 3,977 | $ | (4,310 | ) | ||||||||||||||
Total recurring Level 3 liabilities | $ | 8,680 | $ | 3,977 | $ | (4,310 | ) | ||||||||||||||
The amounts in the table above represent the change in unrealized gains and losses included in net income for the period of time that the asset or liability was determined to be in Level 3. These gains and losses total $7.5 million in 2013 and are reported as follows: $(7.9) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. These gains and losses total $26.5 million in 2012 and are reported as follows: $16.3 million in realized capital gains and losses, $6.2 million in net investment income, $(142) thousand in interest credited to contractholder funds and $4.1 million in contract benefits. These gains and losses total $24.1 million in 2011 and are reported as follows: $16.5 million in realized capital gains and losses, $11.9 million in net investment income, $(156) thousand in interest credited to contractholder funds and $(4.2) million in contract benefits. | |||||||||||||||||||||
Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value. | |||||||||||||||||||||
Financial assets | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||
($ in thousands) | Carrying | Fair value | Carrying | Fair value | |||||||||||||||||
value | value | ||||||||||||||||||||
Mortgage loans | $ | 514,489 | $ | 534,241 | $ | 570,365 | $ | 602,516 | |||||||||||||
Cost method limited partnerships | 41,419 | 44,401 | 29,746 | 30,920 | |||||||||||||||||
Notes due from related party | — | — | 2,833 | 2,833 | |||||||||||||||||
The fair value of mortgage loans is based on discounted contractual cash flows or, if the loans are impaired due to credit reasons, the fair value of collateral less costs to sell. Risk adjusted discount rates are selected using current rates at which similar loans would be made to borrowers with similar characteristics, using similar types of properties as collateral. The fair value of cost method limited partnerships is determined using reported net asset values of the underlying funds. The fair value of notes due from related party, which are reported in other investments, is based on discounted cash flow calculations using current interest rates for instruments with comparable terms. The fair value measurements for mortgage loans, cost method limited partnerships and notes due from related party are categorized as Level 3. | |||||||||||||||||||||
Financial liabilities | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||
($ in thousands) | Carrying | Fair value | Carrying | Fair value | |||||||||||||||||
value | value | ||||||||||||||||||||
Contractholder funds on investment contracts | $ | 2,771,149 | $ | 2,912,758 | $ | 3,050,538 | $ | 3,222,131 | |||||||||||||
Liability for collateral | 62,610 | 62,610 | 59,772 | 59,772 | |||||||||||||||||
The fair value of contractholder funds on investment contracts is based on the terms of the underlying contracts utilizing prevailing market rates for similar contracts adjusted for the Company’s own credit risk. Deferred annuities included in contractholder funds are valued using discounted cash flow models which incorporate market value margins, which are based on the cost of holding economic capital, and the Company’s own credit risk. Immediate annuities without life contingencies are valued at the present value of future benefits using market implied interest rates which include the Company’s own credit risk. The liability for collateral is valued at carrying value due to its short-term nature. The fair value measurements for contractholder funds on investment contracts are categorized as Level 3. The fair value measurements for liability for collateral are categorized as Level 2. |
Derivative_Financial_Instrumen
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Derivative Financial Instruments and Off-balance sheet Financial Instruments | ' | ||||||||||||||||||||||||||||||||
7 | Derivative Financial Instruments and Off-balance sheet Financial Instruments | ||||||||||||||||||||||||||||||||
The Company uses derivatives to manage risks with certain assets and liabilities arising from the potential adverse impacts from changes in risk-free interest rates. The Company does not use derivatives for speculative purposes. | |||||||||||||||||||||||||||||||||
Asset-liability management is a risk management strategy that is principally employed to balance the respective interest-rate sensitivities of the Company’s assets and liabilities. Depending upon the attributes of the assets acquired and liabilities issued, derivative instruments such as interest rate caps are utilized to change the interest rate characteristics of existing assets and liabilities to ensure the relationship is maintained within specified ranges and to reduce exposure to rising or falling interest rates. The Company also has a reinsurance treaty that is recorded as a derivative instrument, under which it primarily cedes reinvestment related risk on its structured settlement annuities to ALIC. | |||||||||||||||||||||||||||||||||
The Company also has derivatives embedded in non-derivative host contracts that are required to be separated from the host contracts and accounted for at fair value with changes in fair value of embedded derivatives reported in net income. The Company’s primary embedded derivatives are guaranteed minimum accumulation and withdrawal benefits in reinsured variable annuity contracts; equity options in life product contracts, which provide equity returns to contractholders; and conversion options in fixed income securities, which provide the Company with the right to convert the instrument into a predetermined number of shares of common stock. | |||||||||||||||||||||||||||||||||
The notional amounts specified in the contracts are used to calculate the exchange of contractual payments under the agreements and are generally not representative of the potential for gain or loss on these agreements. Fair value, which is equal to the carrying value, is the estimated amount that the Company would receive or pay to terminate the derivative contracts at the reporting date. The carrying value amounts for OTC derivatives are further adjusted for the effects, if any, of enforceable master netting agreements and are presented on a net basis, by counterparty agreement, in the Statements of Financial Position. The Company’s interest rate cap agreements are subject to enforceable master netting agreements; however, no offset amounts were required to net the carrying values as of December 31, 2013 or 2012. | |||||||||||||||||||||||||||||||||
Non-hedge accounting is generally used for “portfolio” level hedging strategies where the terms of the individual hedged items do not meet the strict homogeneity requirements to permit the application of hedge accounting. For non-hedge derivatives, net income includes changes in fair value and accrued periodic settlements, when applicable. With the exception of non-hedge embedded derivatives, all of the Company’s derivatives are evaluated for their ongoing effectiveness as either accounting hedge or non-hedge derivative financial instruments on at least a quarterly basis. | |||||||||||||||||||||||||||||||||
The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2013. None of these derivatives are designated as accounting hedging instruments. | |||||||||||||||||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||||||||||||
($ in thousands) | Balance sheet location | Volume- | Fair | Gross | Gross | ||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||||||||||
Interest rate cap agreements | Other investments | $ | 40,100 | $ | 1,076 | $ | 1,076 | $ | — | ||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Conversion options | Fixed income securities | 42 | — | — | — | ||||||||||||||||||||||||||||
Other contracts | |||||||||||||||||||||||||||||||||
Structured settlement annuity reinsurance agreement | Other assets | — | 27,826 | 27,826 | — | ||||||||||||||||||||||||||||
Total asset derivatives | $ | 40,142 | $ | 28,902 | $ | 28,902 | $ | — | |||||||||||||||||||||||||
Liability derivatives | |||||||||||||||||||||||||||||||||
Balance sheet location | Volume- | Fair | Gross | Gross | |||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Guaranteed accumulation benefits | Contractholder funds | $ | 136,770 | $ | (7,925 | ) | $ | — | $ | (7,925 | ) | ||||||||||||||||||||||
Guaranteed withdrawal benefits | Contractholder funds | 28,924 | (677 | ) | — | (677 | ) | ||||||||||||||||||||||||||
Equity-indexed options in life product contracts | Contractholder funds | 9,581 | (595 | ) | — | (595 | ) | ||||||||||||||||||||||||||
Total liability derivatives | $ | 175,275 | $ | (9,197 | ) | $ | — | $ | (9,197 | ) | |||||||||||||||||||||||
Total derivatives | $ | 215,417 | $ | 19,705 | |||||||||||||||||||||||||||||
The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2012. None of these derivatives are designated as accounting hedging instruments. | |||||||||||||||||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||||||||||||
($ in thousands) | Balance sheet location | Volume- | Fair | Gross | Gross | ||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||||||||||
Interest rate cap agreements | Other investments | $ | 152,400 | $ | 306 | $ | 306 | $ | — | ||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Conversion options | Fixed income securities | 1,000 | 83 | 83 | — | ||||||||||||||||||||||||||||
Other contracts | |||||||||||||||||||||||||||||||||
Structured settlement annuity reinsurance agreement | Other assets | — | 34,655 | 34,655 | — | ||||||||||||||||||||||||||||
Total asset derivatives | $ | 153,400 | $ | 35,044 | $ | 35,044 | $ | — | |||||||||||||||||||||||||
Liability derivatives | |||||||||||||||||||||||||||||||||
Balance sheet location | Volume- | Fair | Gross | Gross | |||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Guaranteed accumulation benefits | Contractholder funds | $ | 148,926 | $ | (15,508 | ) | $ | — | $ | (15,508 | ) | ||||||||||||||||||||||
Guaranteed withdrawal benefits | Contractholder funds | 29,800 | (2,071 | ) | — | (2,071 | ) | ||||||||||||||||||||||||||
Equity-indexed options in life product contracts | Contractholder funds | 6,589 | (298 | ) | — | (298 | ) | ||||||||||||||||||||||||||
Total liability derivatives | $ | 185,315 | $ | (17,877 | ) | $ | — | $ | (17,877 | ) | |||||||||||||||||||||||
Total derivatives | $ | 338,715 | $ | 17,167 | |||||||||||||||||||||||||||||
The following tables present gains and losses from valuation and settlements reported on derivatives not designated as accounting hedging instruments in the Statements of Operations and Comprehensive Income for the years ended December 31. | |||||||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||
($ in thousands) | Realized | Contract | Interest | Total gain (loss) | |||||||||||||||||||||||||||||
capital | benefits | credited to | recognized in | ||||||||||||||||||||||||||||||
gains and | contractholder | net income on | |||||||||||||||||||||||||||||||
losses | funds | derivatives | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | 431 | $ | — | $ | — | $ | 431 | |||||||||||||||||||||||||
Embedded derivative financial instruments | (83 | ) | 8,977 | (297 | ) | 8,597 | |||||||||||||||||||||||||||
Other contracts-structured settlement annuity reinsurance agreement | (10,297 | ) | — | — | (10,297 | ) | |||||||||||||||||||||||||||
Total | $ | (9,949 | ) | $ | 8,977 | $ | (297 | ) | $ | (1,269 | ) | ||||||||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||
Realized | Contract | Interest | Total gain (loss) | ||||||||||||||||||||||||||||||
capital | benefits | credited to | recognized in | ||||||||||||||||||||||||||||||
gains and | contractholder | net income on | |||||||||||||||||||||||||||||||
losses | funds | derivatives | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | (296 | ) | $ | — | $ | — | $ | (296 | ) | |||||||||||||||||||||||
Embedded derivative financial instruments | (13 | ) | 4,119 | (142 | ) | 3,964 | |||||||||||||||||||||||||||
Other contracts-structured settlement annuity reinsurance agreement | 14,276 | — | — | 14,276 | |||||||||||||||||||||||||||||
Total | $ | 13,967 | $ | 4,119 | $ | (142 | ) | $ | 17,944 | ||||||||||||||||||||||||
2011 | |||||||||||||||||||||||||||||||||
Realized | Contract | Interest | Total gain (loss) | ||||||||||||||||||||||||||||||
capital | benefits | credited to | recognized in | ||||||||||||||||||||||||||||||
gains and | contractholder | net income on | |||||||||||||||||||||||||||||||
losses | funds | derivatives | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | (3,153 | ) | $ | — | $ | — | $ | (3,153 | ) | |||||||||||||||||||||||
Embedded derivative financial instruments | 3 | (4,154 | ) | (156 | ) | (4,307 | ) | ||||||||||||||||||||||||||
Other contracts-structured settlement annuity reinsurance agreement | 18,246 | — | — | 18,246 | |||||||||||||||||||||||||||||
Total | $ | 15,096 | $ | (4,154 | ) | $ | (156 | ) | $ | 10,786 | |||||||||||||||||||||||
The Company manages its exposure to credit risk by utilizing highly rated counterparties, establishing risk control limits, executing legally enforceable master netting agreements (“MNAs”) and obtaining collateral where appropriate. The Company uses MNAs for OTC derivative transactions that permit either party to net payments due for transactions and collateral is either pledged or obtained when certain predetermined exposure limits are exceeded. As of December 31, 2013, the Company did not have any collateral pledged to or from counterparties. The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance. | |||||||||||||||||||||||||||||||||
Counterparty credit exposure represents the Company’s potential loss if all of the counterparties concurrently fail to perform under the contractual terms of the contracts and all collateral, if any, becomes worthless. This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements. | |||||||||||||||||||||||||||||||||
The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. | |||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||||||||||||||||||
Rating(1) | Number of | Notional | Credit | Exposure, | Number of | Notional | Credit | Exposure, | |||||||||||||||||||||||||
counter- | Amount(2) | exposure(2) | net of | counter- | Amount(2) | exposure(2) | net of | ||||||||||||||||||||||||||
parties | collateral(2) | parties | collateral(2) | ||||||||||||||||||||||||||||||
A+ | 1 | $ | 21,700 | $ | 624 | $ | 624 | 1 | $ | 18,800 | $ | 209 | $ | 209 | |||||||||||||||||||
A | 2 | 10,700 | 227 | 227 | 1 | 7,900 | 45 | 45 | |||||||||||||||||||||||||
A- | — | — | — | — | 2 | 68,700 | 21 | 21 | |||||||||||||||||||||||||
BBB+ | 1 | 2,700 | 156 | 156 | 1 | 5,000 | 31 | 31 | |||||||||||||||||||||||||
BBB | 1 | 5,000 | 69 | 69 | — | — | — | — | |||||||||||||||||||||||||
Total | 5 | $ | 40,100 | $ | 1,076 | $ | 1,076 | 5 | $ | 100,400 | $ | 306 | $ | 306 | |||||||||||||||||||
(1) | Rating is the lower of S&P or Moody’s ratings. | ||||||||||||||||||||||||||||||||
(2) | Only OTC derivatives with a net positive fair value are included for each counterparty. | ||||||||||||||||||||||||||||||||
Market risk is the risk that the Company will incur losses due to adverse changes in market rates and prices. Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions. To limit this risk, the Company’s senior management has established risk control limits. In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions. | |||||||||||||||||||||||||||||||||
Certain of the Company’s derivative instruments contain credit-risk-contingent termination events, cross-default provisions and credit support annex agreements. Credit-risk-contingent termination events allow the counterparties to terminate the derivative on certain dates if the Company’s financial strength credit ratings by Moody’s or S&P fall below a certain level or in the event the Company is no longer rated by either Moody’s or S&P. Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative instruments if the Company defaults by pre-determined threshold amounts on certain debt instruments. Credit-risk-contingent credit support annex agreements specify the amount of collateral the Company must post to counterparties based on the Company’s financial strength credit ratings by Moody’s or S&P, or in the event the Company is no longer rated by either Moody’s or S&P. The Company had no derivative instruments with termination, cross-default or collateral credit-risk-contingent features that were in a liability position as of December 31, 2013 or 2012. | |||||||||||||||||||||||||||||||||
Off-balance sheet financial instruments | |||||||||||||||||||||||||||||||||
The contractual amounts of off-balance-sheet financial instruments relating to commitments to invest in limited partnership interests and commitments to extend mortgage loans totaled $198.2 million and zero, respectively, as of December 31, 2013 and $118.6 million and $4.0 million, respectively, as of December 31, 2012. The contractual amounts represent the amount at risk if the contract is fully drawn upon, the counterparty defaults and the value of any underlying security becomes worthless. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk. | |||||||||||||||||||||||||||||||||
Commitments to invest in limited partnership interests represent agreements to acquire new or additional participation in certain limited partnership investments. The Company enters into these agreements in the normal course of business. Because the investments in limited partnerships are not actively traded, it is not practical to estimate the fair value of these commitments. | |||||||||||||||||||||||||||||||||
Commitments to extend mortgage loans are agreements to lend to a borrower provided there is no violation of any condition established in the contract. The Company enters into these agreements to commit to future loan fundings at a predetermined interest rate. Commitments generally have fixed expiration dates or other termination clauses. |
Reserve_for_LifeContingent_Con
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | ' | ||||||||||||||||
8 | Reserve for Life-Contingent Contract Benefits and Contractholder Funds | ||||||||||||||||
As of December 31, the reserve for life-contingent contract benefits consists of the following: | |||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||
Immediate fixed annuities: | |||||||||||||||||
Structured settlement annuities | $ | 1,903,194 | $ | 2,080,767 | |||||||||||||
Other immediate fixed annuities | 43,775 | 34,068 | |||||||||||||||
Traditional life insurance | 192,114 | 185,534 | |||||||||||||||
Accident and health insurance | 10,396 | 8,188 | |||||||||||||||
Other | 1,837 | 2,324 | |||||||||||||||
Total reserve for life-contingent contract benefits | $ | 2,151,316 | $ | 2,310,881 | |||||||||||||
The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits. | |||||||||||||||||
Product | Mortality | Interest rate | Estimation method | ||||||||||||||
Structured settlement annuities | U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy | Interest rate | Present value of | ||||||||||||||
assumptions range | contractually specified | ||||||||||||||||
from 2.9% to 9.0% | future benefits | ||||||||||||||||
Other immediate fixed annuities | 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table | Interest rate | Present value of | ||||||||||||||
assumptions range | expected future | ||||||||||||||||
from 0% to 11.5% | benefits based on | ||||||||||||||||
historical experience | |||||||||||||||||
Traditional life insurance | Actual company experience plus loading | Interest rate | Net level premium | ||||||||||||||
assumptions range | reserve method using | ||||||||||||||||
from 4.0% to 8.0% | the Company’s | ||||||||||||||||
withdrawal experience | |||||||||||||||||
rates; includes reserves | |||||||||||||||||
for unpaid claims | |||||||||||||||||
Accident and health insurance | Actual company experience plus loading | Interest rate | Unearned premium; | ||||||||||||||
assumptions range | additional contract | ||||||||||||||||
from 5.0% to 6.0% | reserves for mortality | ||||||||||||||||
risk and unpaid claims | |||||||||||||||||
Other: | |||||||||||||||||
Variable annuity guaranteed minimum death benefits(1) | Annuity 2000 mortality table with internal modifications | Interest rate | Projected benefit ratio | ||||||||||||||
assumptions range | applied to cumulative | ||||||||||||||||
from 4.0% to 5.8% | assessments | ||||||||||||||||
(1) | In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”). | ||||||||||||||||
To the extent that unrealized gains on fixed income securities would result in a premium deficiency had those gains actually been realized, a premium deficiency reserve is recorded for certain immediate annuities with life contingencies. A liability of $168.3 million and $360.9 million is included in the reserve for life-contingent contract benefits with respect to this deficiency as of December 31, 2013 and 2012, respectively. The offset to this liability is recorded as a reduction of the unrealized net capital gains included in accumulated other comprehensive income. | |||||||||||||||||
As of December 31, contractholder funds consist of the following: | |||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||
Interest-sensitive life insurance | $ | 696,878 | $ | 684,584 | |||||||||||||
Investment contracts: | |||||||||||||||||
Fixed annuities | 2,952,798 | 3,242,717 | |||||||||||||||
Other investment contracts | 20,881 | 31,139 | |||||||||||||||
Total contractholder funds | $ | 3,670,557 | $ | 3,958,440 | |||||||||||||
The following table highlights the key contract provisions relating to contractholder funds: | |||||||||||||||||
Product | Interest rate | Withdrawal/surrender charges | |||||||||||||||
Interest-sensitive life insurance | Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.7% to 5.1% for all other products | Either a percentage of account | |||||||||||||||
balance or dollar amount | |||||||||||||||||
grading off generally over 20 | |||||||||||||||||
years | |||||||||||||||||
Fixed annuities | Interest rates credited range from 0% to 9.0% for immediate annuities and 1.0% to 5.4% for other fixed annuities | Either a declining or a level | |||||||||||||||
percentage charge generally | |||||||||||||||||
over ten years or less. | |||||||||||||||||
Additionally, approximately | |||||||||||||||||
13.4% of fixed annuities are | |||||||||||||||||
subject to market value | |||||||||||||||||
adjustment for discretionary | |||||||||||||||||
withdrawals | |||||||||||||||||
Other investment contracts: | |||||||||||||||||
Guaranteed minimum income, accumulation and withdrawal benefits on variable annuities(1) and secondary guarantees on interest-sensitive life insurance and fixed annuities | Interest rates used in establishing reserves range from 1.7% to 10.3% | Withdrawal and surrender | |||||||||||||||
charges are based on the terms | |||||||||||||||||
of the related interest-sensitive | |||||||||||||||||
life insurance or fixed annuity | |||||||||||||||||
contract | |||||||||||||||||
(1) | In 2006, the Company disposed its variable annuity business through a reinsurance agreement with Prudential. | ||||||||||||||||
Contractholder funds activity for the years ended December 31 is as follows: | |||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||
Balance, beginning of year | $ | 3,958,440 | $ | 4,344,897 | $ | 4,688,791 | |||||||||||
Deposits | 109,282 | 115,708 | 121,999 | ||||||||||||||
Interest credited | 129,687 | 144,284 | 154,657 | ||||||||||||||
Benefits | (152,822 | ) | (149,800 | ) | (155,403 | ) | |||||||||||
Surrenders and partial withdrawals | (284,755 | ) | (409,575 | ) | (381,834 | ) | |||||||||||
Contract charges | (70,856 | ) | (67,695 | ) | (65,034 | ) | |||||||||||
Net transfers from (to) separate accounts | 153 | 38 | (55 | ) | |||||||||||||
Other adjustments | (18,572 | ) | (19,417 | ) | (18,224 | ) | |||||||||||
Balance, end of year | $ | 3,670,557 | $ | 3,958,440 | $ | 4,344,897 | |||||||||||
The Company offered various guarantees to variable annuity contractholders. Liabilities for variable contract guarantees related to death benefits are included in the reserve for life-contingent contract benefits and the liabilities related to the income, withdrawal and accumulation benefits are included in contractholder funds. All liabilities for variable contract guarantees are reported on a gross basis on the balance sheet with a corresponding reinsurance recoverable asset. | |||||||||||||||||
Absent any contract provision wherein the Company guarantees either a minimum return or account value upon death, a specified contract anniversary date, partial withdrawal or annuitization, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. The account balances of variable annuities contracts’ separate accounts with guarantees included $362.5 million and $380.7 million of equity, fixed income and balanced mutual funds and $65.0 million and $51.3 million of money market mutual funds as of December 31, 2013 and 2012, respectively. | |||||||||||||||||
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. | |||||||||||||||||
December 31, | |||||||||||||||||
($ in millions) | 2013 | 2012 | |||||||||||||||
In the event of death | |||||||||||||||||
Separate account value | $ | 427.4 | $ | 432 | |||||||||||||
Net amount at risk(1) | $ | 12.2 | $ | 27.8 | |||||||||||||
Average attained age of contractholders | 65 years | 64 years | |||||||||||||||
At annuitization (includes income benefit guarantees) | |||||||||||||||||
Separate account value | $ | 29.9 | $ | 30.5 | |||||||||||||
Net amount at risk(2) | $ | 2 | $ | 4.5 | |||||||||||||
Weighted average waiting period until annuitization options available | None | 1 year | |||||||||||||||
For cumulative periodic withdrawals | |||||||||||||||||
Separate account value | $ | 28.6 | $ | 29.1 | |||||||||||||
Net amount at risk(3) | $ | 0.2 | $ | 0.5 | |||||||||||||
Accumulation at specified dates | |||||||||||||||||
Separate account value | $ | 135.8 | $ | 148 | |||||||||||||
Net amount at risk(4) | $ | 1.7 | $ | 5.1 | |||||||||||||
Weighted average waiting period until guarantee date | 4 years | 5 years | |||||||||||||||
(1) | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | ||||||||||||||||
(2) | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | ||||||||||||||||
(3) | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | ||||||||||||||||
(4) | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. | ||||||||||||||||
The liability for death and income benefit guarantees is equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest less contract excess guarantee benefit payments. The benefit ratio is calculated as the estimated present value of all expected contract excess guarantee benefits divided by the present value of all expected contract charges. The establishment of reserves for these guarantees requires the projection of future fund values, mortality, persistency and customer benefit utilization rates. These assumptions are periodically reviewed and updated. For guarantees related to death benefits, benefits represent the projected excess guaranteed minimum death benefit payments. For guarantees related to income benefits, benefits represent the present value of the minimum guaranteed annuitization benefits in excess of the projected account balance at the time of annuitization. | |||||||||||||||||
Projected benefits and contract charges used in determining the liability for certain guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected gross profits. Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based on factors such as the extent of benefit to the potential annuitant, eligibility conditions and the annuitant’s attained age. The liability for guarantees is re-evaluated periodically, and adjustments are made to the liability balance through a charge or credit to contract benefits. | |||||||||||||||||
Guarantees related to withdrawal and accumulation benefits are considered to be derivative financial instruments; therefore, the liability for these benefits is established based on its fair value. | |||||||||||||||||
The following table summarizes the liabilities for guarantees: | |||||||||||||||||
($ in thousands) | Liability for | Liability for | Liability for | Total | |||||||||||||
guarantees | guarantees | guarantees | |||||||||||||||
related to death | related to | related to | |||||||||||||||
benefits and | income | accumulation | |||||||||||||||
interest-sensitive | benefits | and | |||||||||||||||
life products | withdrawal | ||||||||||||||||
benefits | |||||||||||||||||
Balance, December 31, 2012(1) | $ | 10,463 | $ | 5,174 | $ | 17,579 | $ | 33,216 | |||||||||
Less reinsurance recoverables | 2,077 | 5,166 | 17,579 | 24,822 | |||||||||||||
Net balance as of December 31, 2012 | 8,386 | 8 | — | 8,394 | |||||||||||||
Incurred guarantee benefits | 1,553 | — | — | 1,553 | |||||||||||||
Paid guarantee benefits | — | — | — | — | |||||||||||||
Net change | 1,553 | — | — | 1,553 | |||||||||||||
Net balance as of December 31, 2013 | 9,939 | 8 | — | 9,947 | |||||||||||||
Plus reinsurance recoverables | 1,680 | 2,333 | 8,602 | 12,615 | |||||||||||||
Balance, December 31, 2013(2) | $ | 11,619 | $ | 2,341 | $ | 8,602 | $ | 22,562 | |||||||||
Balance, December 31, 2011(3) | $ | 7,572 | $ | 3,971 | $ | 21,698 | $ | 33,241 | |||||||||
Less reinsurance recoverables | 2,336 | 3,963 | 21,698 | 27,997 | |||||||||||||
Net balance as of December 31, 2011 | 5,236 | 8 | — | 5,244 | |||||||||||||
Incurred guarantee benefits | 3,150 | — | — | 3,150 | |||||||||||||
Paid guarantee benefits | — | — | — | — | |||||||||||||
Net change | 3,150 | — | — | 3,150 | |||||||||||||
Net balance as of December 31, 2012 | 8,386 | 8 | — | 8,394 | |||||||||||||
Plus reinsurance recoverables | 2,077 | 5,166 | 17,579 | 24,822 | |||||||||||||
Balance, December 31, 2012(2) | $ | 10,463 | $ | 5,174 | $ | 17,579 | $ | 33,216 | |||||||||
-1 | Included in the total liability balance as of December 31, 2012 are reserves for variable annuity death benefits of $2.1 million, variable annuity income benefits of $5.2 million, variable annuity accumulation benefits of $15.5 million, variable annuity withdrawal benefits of $2.1 million and other guarantees of $8.4 million. | ||||||||||||||||
-2 | Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $1.0 million and other guarantees of $9.9 million. | ||||||||||||||||
-3 | Included in the total liability balance as of December 31, 2011 are reserves for variable annuity death benefits of $2.3 million, variable annuity income benefits of $4.0 million, variable annuity accumulation benefits of $18.7 million, variable annuity withdrawal benefits of $3.0 million and other guarantees of $5.2 million. |
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reinsurance | ' | ||||||||||||
9 | Reinsurance | ||||||||||||
The Company reinsures certain of its risks to unaffiliated reinsurers and ALIC under yearly renewable term, coinsurance and modified coinsurance agreements. These agreements result in a passing of the agreed-upon percentage of risk to the reinsurer in exchange for negotiated reinsurance premium payments. Modified coinsurance is similar to coinsurance, except that the cash and investments that support the liability for contract benefits are not transferred to the assuming company and settlements are made on a net basis between the companies. | |||||||||||||
As of December 31, 2013 and 2012, for certain term life insurance policies, the Company ceded up to 90% of the mortality risk depending on the year of policy issuance. Further, the Company cedes the mortality risk associated with coverage in excess of $2 million per life to ALIC. Prior to July 1, 2013, the Company ceded mortality risk in excess of $250 thousand per life to ALIC. | |||||||||||||
In addition, the Company has used reinsurance to effect the disposition of certain blocks of business. The Company had reinsurance recoverables of $203.3 million and $224.5 million as of December 31, 2013 and 2012, respectively, due from Prudential related to the disposal of its variable annuity business that was effected through reinsurance agreements. In 2013, premiums and contract charges of $9.0 million, contract benefits of $11.0 million, interest credited to contractholder funds of $5.5 million, and operating costs and expenses of $1.5 million were ceded to Prudential. In 2012, premiums and contract charges of $8.4 million, contract benefits of $1.9 million, interest credited to contractholder funds of $6.0 million, and operating costs and expenses of $1.4 million were ceded to Prudential. In 2011, premiums and contract charges of $11.4 million, contract benefits of $5.4 million, interest credited to contractholder funds of $6.8 million, and operating costs and expenses of $1.7 million were ceded to Prudential. In addition, as of December 31, 2013 and 2012 the Company had reinsurance recoverables of $228 thousand and $325 thousand, respectively, due from a subsidiary of Citigroup (Triton Insurance Company) in connection with the disposition of the direct response distribution business in 2003. | |||||||||||||
As of December 31, 2013, the gross life insurance in force was $38.41 billion of which $535.3 million and $9.77 billion was ceded to affiliated and unaffiliated reinsurers, respectively. | |||||||||||||
The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 155,193 | $ | 152,197 | $ | 156,130 | |||||||
Assumed — non-affiliate | 835 | 849 | 889 | ||||||||||
Ceded | |||||||||||||
Affiliate | (3,961 | ) | (35,904 | ) | (31,505 | ) | |||||||
Non-affiliate | (23,140 | ) | (23,417 | ) | (26,863 | ) | |||||||
Premiums and contract charges, net of reinsurance | $ | 128,927 | $ | 93,725 | $ | 98,651 | |||||||
The effects of reinsurance on contract benefits for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 213,437 | $ | 196,463 | $ | 207,769 | |||||||
Assumed — non-affiliate | 1,008 | 709 | 682 | ||||||||||
Ceded | |||||||||||||
Affiliate | (6,440 | ) | (4,865 | ) | (6,570 | ) | |||||||
Non-affiliate | (4,288 | ) | (11,393 | ) | (17,715 | ) | |||||||
Contract benefits, net of reinsurance | $ | 203,717 | $ | 180,914 | $ | 184,166 | |||||||
The effects of reinsurance on interest credited to contractholder funds for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 135,354 | $ | 150,355 | $ | 161,283 | |||||||
Assumed — non-affiliate | 25 | 17 | 19 | ||||||||||
Ceded | |||||||||||||
Non-affiliate | (5,468 | ) | (6,032 | ) | (6,855 | ) | |||||||
Interest credited to contractholder funds, net of reinsurance | $ | 129,911 | $ | 144,340 | $ | 154,447 | |||||||
In addition to amounts included in the table above are reinsurance premiums ceded to ALIC of $3.5 million in each of 2013, 2012 and 2011 under the terms of the structured settlement annuity reinsurance agreement (see Note 4). | |||||||||||||
Deferred_Policy_Acquisition_an
Deferred Policy Acquisition and Sales Inducement Costs | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Deferred Policy Acquisition and Sales Inducement Costs | ' | ||||||||||||
10 | Deferred Policy Acquisition and Sales Inducement Costs | ||||||||||||
Deferred policy acquisition costs for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 130,201 | $ | 132,614 | $ | 136,377 | |||||||
Acquisition costs deferred | 19,553 | 19,423 | 17,842 | ||||||||||
Amortization charged to income | (29,783 | ) | (13,145 | ) | (11,102 | ) | |||||||
Effect of unrealized gains and losses | 9,865 | (8,691 | ) | (10,503 | ) | ||||||||
Balance, end of year | $ | 129,836 | $ | 130,201 | $ | 132,614 | |||||||
DSI activity, which primarily relates to fixed annuities and interest-sensitive life contracts, for the years ended December 31 was as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 1,717 | $ | 2,019 | $ | 2,024 | |||||||
Sales inducements deferred | 381 | 409 | 526 | ||||||||||
Amortization charged to income | (604 | ) | (465 | ) | (316 | ) | |||||||
Effect of unrealized gains and losses | 243 | (246 | ) | (215 | ) | ||||||||
Balance, end of year | $ | 1,737 | $ | 1,717 | $ | 2,019 | |||||||
Guarantees_and_Contingent_Liab
Guarantees and Contingent Liabilities | 12 Months Ended | |
Dec. 31, 2013 | ||
Guarantees and Contingent Liabilities | ' | |
11 | Guarantees and Contingent Liabilities | |
Guaranty funds | ||
Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. Amounts assessed to each company are typically related to its proportion of business written in each state. The Company’s policy is to accrue assessments when the entity for which the insolvency relates has met its state of domicile’s statutory definition of insolvency and the amount of the loss is reasonably estimable. In most states, the definition is met with a declaration of financial insolvency by a court of competent jurisdiction. In certain states there must also be a final order of liquidation. As of December 31, 2013 and 2012, the liability balance included in other liabilities and accrued expenses was $8.9 million and $12.4 million, respectively. The related premium tax offsets included in other assets were $8.3 million and $8.3 million as of December 31, 2013 and 2012, respectively. | ||
Guarantees | ||
Related to the disposal through reinsurance of our variable annuity business to Prudential in 2006, the Company, ALIC and the Corporation have agreed to indemnify Prudential for certain pre-closing contingent liabilities (including extra-contractual liabilities of the Company and liabilities specifically excluded from the transaction) that the Company and ALIC have agreed to retain. In addition, the Company, ALIC and the Corporation will each indemnify Prudential for certain post-closing liabilities that may arise from the acts of the Company and ALIC and their agents, including in connection with the Company’s and ALIC’s provision of transition services. The reinsurance agreements contain no limitations or indemnifications with regard to insurance risk transfer, and transferred all of the future risks and responsibilities for performance on the underlying variable annuity contracts to Prudential, including those related to benefit guarantees. Management does not believe this agreement will have a material effect on results of operations, cash flows or financial position of the Company. | ||
In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations. | ||
The aggregate liability balance related to all guarantees was not material as of December 31, 2013. | ||
Regulation and Compliance | ||
The Company is subject to changing social, economic and regulatory conditions. From time to time, regulatory authorities or legislative bodies seek to impose additional regulations regarding agent and broker compensation, regulate the nature of and amount of investments, and otherwise expand overall regulation of insurance products and the insurance industry. The Company has established procedures and policies to facilitate compliance with laws and regulations, to foster prudent business operations, and to support financial reporting. The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies. As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies. Such modifications, and the reviews that led to them, may be accompanied by payments being made and costs being incurred. The ultimate changes and eventual effects of these actions on the Company’s business, if any, are uncertain. | ||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
12 | Income Taxes | ||||||||||||
The Company joins with the Corporation and its other subsidiaries (the “Allstate Group”) in the filing of a consolidated federal income tax return and is party to a federal income tax allocation agreement (the “Allstate Tax Sharing Agreement”). Under the Allstate Tax Sharing Agreement, the Company pays to or receives from the Corporation the amount, if any, by which the Allstate Group’s federal income tax liability is affected by virtue of inclusion of the Company in the consolidated federal income tax return. Effectively, this results in the Company’s annual income tax provision being computed, with adjustments, as if the Company filed a separate return. | |||||||||||||
The Internal Revenue Service (“IRS”) is currently examining the Allstate Group’s 2011 and 2012 federal income tax returns. The IRS has completed its examination of the Allstate Group’s 2009 and 2010 federal income tax returns and issued a Revenue Agent’s Report on April 15, 2013. The Allstate Group protested certain of the adjustments contained in the report and the case was forwarded to Appeals on June 13, 2013. The IRS has also completed its examination of the Allstate Group’s federal income tax returns for the years 2005-2008 and a final settlement for those years has been approved by the Joint Committee on Taxation. The Allstate Group’s tax years prior to 2005 have been examined by the IRS and the statute of limitations has expired on those years. Any adjustments that may result from IRS examinations of tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company. | |||||||||||||
The Company had no liability for unrecognized tax benefits as of December 31, 2013, 2012 or 2011, and believes it is reasonably possible that the liability balance will not significantly increase within the next twelve months. No amounts have been accrued for interest or penalties. | |||||||||||||
The components of the deferred income tax assets and liabilities as of December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Deferred assets | |||||||||||||
Accrued liabilities | $ | 41 | $ | 181 | |||||||||
Unrealized foreign currency translation adjustments | — | 316 | |||||||||||
Life and annuity reserves | — | — | |||||||||||
Other assets | — | 106 | |||||||||||
Total deferred assets | 41 | 603 | |||||||||||
Deferred liabilities | |||||||||||||
Unrealized net capital gains | (81,841 | ) | (131,011 | ) | |||||||||
Difference in tax bases of investments | (40,544 | ) | (39,939 | ) | |||||||||
DAC | (25,395 | ) | (26,185 | ) | |||||||||
Life and annuity reserves | (21,051 | ) | (4,445 | ) | |||||||||
Cumulative translation adjustment | (143 | ) | — | ||||||||||
Other liabilities | (4,408 | ) | (5,078 | ) | |||||||||
Total deferred liabilities | (173,382 | ) | (206,658 | ) | |||||||||
Net deferred liability | $ | (173,341 | ) | $ | (206,055 | ) | |||||||
Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized based on the Company’s assessment that the deductions ultimately recognized for tax purposes will be fully utilized. | |||||||||||||
The components of income tax expense for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Current | $ | 6,463 | $ | 7,286 | $ | 1,036 | |||||||
Deferred | 15,998 | 20,260 | 36,326 | ||||||||||
Total income tax expense | $ | 22,461 | $ | 27,546 | $ | 37,362 | |||||||
The Company paid income taxes of $11.7 million in 2013 and received refunds of $5.9 million and $6.0 million in 2012 and 2011, respectively. | |||||||||||||
A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State income tax expense | 2.3 | 1.7 | 1.2 | ||||||||||
Other | (1.5 | ) | (1.2 | ) | (1.0 | ) | |||||||
Effective income tax rate | 35.8 | % | 35.5 | % | 35.2 | % | |||||||
Statutory_Financial_Informatio
Statutory Financial Information and Dividend Limitations | 12 Months Ended | |
Dec. 31, 2013 | ||
Statutory Financial Information and Dividend Limitations | ' | |
13 | Statutory Financial Information and Dividend Limitations | |
The Company prepares its statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of New York. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. | ||
The State of New York requires insurance companies domiciled in its state to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the State of New York Insurance Superintendent. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis. | ||
Statutory net income was $25.9 million, $18.8 million and $46.0 million in 2013, 2012 and 2011, respectively. Statutory capital and surplus was $553.9 million and $540.0 million as of December 31, 2013 and 2012, respectively. | ||
Dividend Limitations | ||
The ability of the Company to pay dividends is dependent on business conditions, income, cash requirements and other relevant factors. The payment of shareholder dividends by the Company without the prior approval of the New York State Insurance Department (“NYSID”) is limited to formula amounts based on net income and capital and surplus, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. The Company did not pay dividends in 2013. The maximum amount of dividends that the Company can pay without prior NYSID approval during 2014 is $13.8 million. Any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which totaled $377.4 million as of December 31, 2013, and cannot result in capital and surplus being less than the minimum amount required by law. | ||
Under state insurance laws, insurance companies are required to maintain paid up capital of not less than the minimum capital requirement applicable to the types of insurance they are authorized to write. Insurance companies are also subject to risk-based capital (“RBC”) requirements adopted by state insurance regulators. A company’s “authorized control level RBC” is calculated using various factors applied to certain financial balances and activity. Companies that do not maintain statutory capital and surplus at a level in excess of the company action level RBC, which is two times authorized control level RBC, are required to take specified actions. Company action level RBC is significantly in excess of the minimum capital requirements. Total statutory capital and surplus and authorized control level RBC of the Company were $553.9 million and $60.3 million, respectively, as of December 31, 2013. | ||
Benefit_Plans
Benefit Plans | 12 Months Ended | |
Dec. 31, 2013 | ||
Benefit Plans | ' | |
14 | Benefit Plans | |
Pension and other postretirement plans | ||
Defined benefit pension plans, sponsored by the Corporation, cover most full-time employees, certain part-time employees and employee-agents. Benefits under the pension plans are based upon the employee’s length of service and eligible annual compensation. The cost allocated to the Company for the pension plans was $5.3 million, $3.6 million and $2.3 million in 2013, 2012 and 2011, respectively. | ||
The Corporation has reserved the right to modify or terminate its benefit plans at any time and for any reason. | ||
Allstate 401(k) Savings Plan | ||
Employees of AIC are eligible to become members of the Allstate 401(k) Savings Plan (“Allstate Plan”). The Corporation’s contributions are based on the Corporation’s matching obligation and certain performance measures. The cost allocated to the Company for the Allstate Plan was $773 thousand, $717 thousand and $700 thousand in 2013, 2012 and 2011, respectively. | ||
Other_Comprehensive_Income
Other Comprehensive Income | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Other Comprehensive Income | ' | ||||||||||||
15 | Other Comprehensive Income | ||||||||||||
The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows: | |||||||||||||
2013 | |||||||||||||
($ in thousands) | Pre-tax | Tax | After-tax | ||||||||||
Unrealized net holding losses arising during the period, net of related offsets | $ | (112,511 | ) | $ | 39,379 | $ | (73,132 | ) | |||||
Less: reclassification adjustment of realized capital gains and losses | 27,975 | (9,791 | ) | 18,184 | |||||||||
Unrealized net capital gains and losses | (140,486 | ) | 49,170 | (91,316 | ) | ||||||||
Unrealized foreign currency translation adjustments | 1,312 | (459 | ) | 853 | |||||||||
Other comprehensive loss | $ | (139,174 | ) | $ | 48,711 | $ | (90,463 | ) | |||||
2012 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period, net of related offsets | $ | 75,239 | $ | (26,333 | ) | $ | 48,906 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 431 | (151 | ) | 280 | |||||||||
Unrealized net capital gains and losses | 74,808 | (26,182 | ) | 48,626 | |||||||||
Unrealized foreign currency translation adjustments | (642 | ) | 225 | (417 | ) | ||||||||
Other comprehensive income | $ | 74,166 | $ | (25,957 | ) | $ | 48,209 | ||||||
2011 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period, net of related offsets | $ | 110,583 | $ | (38,704 | ) | $ | 71,879 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 28,264 | (9,892 | ) | 18,372 | |||||||||
Unrealized net capital gains and losses | 82,319 | (28,812 | ) | 53,507 | |||||||||
Unrealized foreign currency translation adjustments | (262 | ) | 92 | (170 | ) | ||||||||
Other comprehensive income | $ | 82,057 | $ | (28,720 | ) | $ | 53,337 | ||||||
Summary_of_Investments_Other_T
Summary of Investments Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Investments Other Than Investments in Related Parties | ' | ||||||||||||
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK | |||||||||||||
SCHEDULE I—SUMMARY OF INVESTMENTS | |||||||||||||
OTHER THAN INVESTMENTS IN RELATED PARTIES | |||||||||||||
31-Dec-13 | |||||||||||||
($ in thousands) | Cost/ | Fair | Amount at | ||||||||||
amortized | value | which | |||||||||||
cost | shown in | ||||||||||||
the Balance | |||||||||||||
Sheet | |||||||||||||
Type of investment | |||||||||||||
Fixed maturities: | |||||||||||||
Bonds: | |||||||||||||
United States government, government agencies and authorities | $ | 237,510 | $ | 294,831 | $ | 294,831 | |||||||
States, municipalities and political subdivisions | 677,780 | 725,984 | 725,984 | ||||||||||
Foreign governments | 320,327 | 381,616 | 381,616 | ||||||||||
Public utilities | 818,055 | 886,685 | 886,685 | ||||||||||
Convertibles and bonds with warrants attached | — | — | — | ||||||||||
All other corporate bonds | 2,754,658 | 2,878,904 | 2,878,904 | ||||||||||
Residential mortgage-backed securities | 154,242 | 159,919 | 159,919 | ||||||||||
Commercial mortgage-backed securities | 166,927 | 175,980 | 175,980 | ||||||||||
Asset-backed securities | 87,176 | 88,507 | 88,507 | ||||||||||
Redeemable preferred stocks | 9,026 | 10,312 | 10,312 | ||||||||||
Total fixed maturities | 5,225,701 | $ | 5,602,738 | 5,602,738 | |||||||||
Equity securities: | |||||||||||||
Common stocks: | |||||||||||||
Banks, trusts and insurance companies | 1,392 | $ | 1,438 | 1,438 | |||||||||
Industrial, miscellaneous and all other | 162,257 | 201,184 | 201,184 | ||||||||||
Total equity securities | 202,622 | ||||||||||||
Mortgage loans on real estate (none acquired in satisfaction of debt) | 514,489 | $ | 534,241 | 514,489 | |||||||||
Policy loans | 40,511 | 40,511 | |||||||||||
Derivative instruments | 1,076 | $ | 1,076 | 1,076 | |||||||||
Limited partnership interests | 116,480 | 116,480 | |||||||||||
Other long-term investments | — | — | |||||||||||
Short-term investments | 98,553 | $ | 98,553 | 98,553 | |||||||||
Total investments | $ | 6,160,459 | $ | 6,576,469 | |||||||||
Reinsurance1
Reinsurance | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Reinsurance | ' | ||||||||||||||||||||
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK | |||||||||||||||||||||
SCHEDULE IV—REINSURANCE | |||||||||||||||||||||
($ in thousands) | Gross | Ceded to | Assumed | Net | Percentage | ||||||||||||||||
amount | other | from other | amount | of amount | |||||||||||||||||
companies(1) | companies | assumed | |||||||||||||||||||
to net | |||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
Life insurance in force | $ | 37,835,153 | $ | 10,303,425 | $ | 578,980 | $ | 28,110,708 | 2.1 | % | |||||||||||
Premiums and contract charges: | |||||||||||||||||||||
Life insurance | $ | 140,834 | $ | 25,564 | $ | 835 | $ | 116,105 | 0.7 | % | |||||||||||
Accident and health insurance | 14,359 | 1,537 | — | 12,822 | — | % | |||||||||||||||
Total premiums and contract charges | $ | 155,193 | $ | 27,101 | $ | 835 | $ | 128,927 | 0.6 | % | |||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
Life insurance in force | $ | 36,532,268 | $ | 16,858,998 | $ | 602,378 | $ | 20,275,648 | 3 | % | |||||||||||
Premiums and contract charges: | |||||||||||||||||||||
Life insurance | $ | 138,973 | $ | 57,654 | $ | 849 | $ | 82,168 | 1 | % | |||||||||||
Accident and health insurance | 13,224 | 1,667 | — | 11,557 | — | % | |||||||||||||||
Total premiums and contract charges | $ | 152,197 | $ | 59,321 | $ | 849 | $ | 93,725 | 0.9 | % | |||||||||||
Year ended December 31, 2011 | |||||||||||||||||||||
Life insurance in force | $ | 35,166,813 | $ | 16,567,759 | $ | 623,979 | $ | 19,223,033 | 3.2 | % | |||||||||||
Premiums and contract charges: | |||||||||||||||||||||
Life insurance | $ | 143,652 | $ | 56,534 | $ | 889 | $ | 88,007 | 1 | % | |||||||||||
Accident and health insurance | 12,478 | 1,834 | — | 10,644 | — | % | |||||||||||||||
Total premiums and contract charges | $ | 156,130 | $ | 58,368 | $ | 889 | $ | 98,651 | 0.9 | % | |||||||||||
(1) | No reinsurance or coinsurance income was netted against premiums ceded in 2013, 2012 or 2011. |
Valuation_Allowances_and_Quali
Valuation Allowances and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Valuation Allowances and Qualifying Accounts | ' | ||||||||||||||||||||
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK | |||||||||||||||||||||
SCHEDULE V—VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS | |||||||||||||||||||||
($ in thousands) | Additions | ||||||||||||||||||||
Description | Balance as of | Charged to | Other | Deductions | Balance as of | ||||||||||||||||
beginning | costs and | additions | end of | ||||||||||||||||||
of period | expenses | period | |||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
Allowance for estimated losses on mortgage loans | $ | — | $ | 1,832 | $ | — | $ | — | $ | 1,832 | |||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
Allowance for estimated losses on mortgage loans | $ | 637 | $ | (637 | ) | $ | — | $ | — | $ | — | ||||||||||
Year ended December 31, 2011 | |||||||||||||||||||||
Allowance for estimated losses on mortgage loans | $ | 1,670 | $ | 1,642 | $ | — | $ | 2,675 | $ | 637 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Investments | ' |
Investments | |
Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), asset-backed securities (“ABS”) and redeemable preferred stocks. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes, certain deferred policy acquisition costs (“DAC”), certain deferred sales inducement costs (“DSI”) and certain reserves for life-contingent contract benefits, is reflected as a component of accumulated other comprehensive income. Cash received from calls, principal payments and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs, including prepayments, is reflected as a component of investment collections within the Statements of Cash Flows. | |
Mortgage loans are carried at unpaid principal balances, net of unamortized premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. | |
Equity securities primarily include common stocks and exchange traded funds. Equity securities are designated as available for sale and are carried at fair value. The difference between cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. | |
Investments in limited partnership interests, including interests in private equity/debt funds, where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies are accounted for in accordance with the cost method of accounting; all other investments in limited partnership interests are accounted for in accordance with the equity method of accounting (“EMA”). | |
Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value. Policy loans are carried at unpaid principal balances. Other investments consist of notes due from related party and derivatives. Notes due from related party are carried at outstanding principal balances. Derivatives are carried at fair value. | |
Investment income primarily consists of interest, dividends, income from certain derivative transactions, income from cost method limited partnership interests, and, in 2013 and 2012, income from EMA limited partnership interests. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for RMBS, CMBS and ABS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS, CMBS and ABS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of carrying value. Income from cost method limited partnership interests is recognized upon receipt of amounts distributed by the partnerships. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ net income, including unrealized gains and losses, and is recognized on a delay due to the availability of the related financial statements. Income recognition on private equity/debt funds is generally on a three month delay. | |
Realized capital gains and losses include gains and losses on investment sales, write-downs in value due to other-than-temporary declines in fair value, adjustments to valuation allowances on mortgage loans, periodic changes in fair value and settlements of certain derivatives including hedge ineffectiveness, and, in 2011, income from EMA limited partnership interests. Realized capital gains and losses on investment sales, including principal payments, are determined on a specific identification basis. | |
Derivative and Embedded Derivative Financial Instruments | ' |
Derivative and embedded derivative financial instruments | |
Derivative financial instruments include interest rate caps and a reinvestment related risk transfer reinsurance agreement with ALIC that meets the accounting definition of a derivative (see Note 4). Derivatives required to be separated from the host instrument and accounted for as derivative financial instruments (“subject to bifurcation”) are embedded in certain fixed income securities, equity-indexed life contracts and reinsured variable annuity contracts. | |
All derivatives are accounted for on a fair value basis and reported as other investments, other assets or contractholder funds. The income statement effects of derivatives, including fair value gains and losses and accrued periodic settlements, are reported in realized capital gains and losses. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. The change in fair value of derivatives embedded in certain fixed income securities and subject to bifurcation is reported in realized capital gains and losses. The change in fair value of derivatives embedded in life and annuity product contracts and subject to bifurcation is reported in contract benefits or interest credited to contractholder funds. Cash flows from embedded derivatives subject to bifurcation are reported consistently with the host contracts within the Statements of Cash Flows. Cash flows from other derivatives are reported in cash flows from investing activities within the Statements of Cash Flows. | |
Securities Loaned | ' |
Securities loaned | |
The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions are reinvested in short-term investments. These transactions are short-term in nature, usually 30 days or less. | |
The Company receives cash collateral for securities loaned in an amount generally equal to 102% of the fair value of securities and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to repossess the securities loaned on short notice. | |
Recognition of Premium Revenues and Contract Charges, and Related Benefits and Interest Credited | ' |
Recognition of premium revenues and contract charges, and related benefits and interest credited | |
Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Voluntary accident and health insurance products are expected to remain in force for an extended period. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy. | |
Immediate annuities with life contingencies, including certain structured settlement annuities, provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract. | |
Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. | |
Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. | |
Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life contracts are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index. Interest credited also includes amortization of DSI expenses. DSI is amortized into interest credited using the same method used to amortize DAC. | |
Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. All of the Company’s variable annuity business is ceded through reinsurance agreements and the contract charges and contract benefits related thereto are reported net of reinsurance ceded. | |
Deferred Policy Acquisition and Sales Inducement Costs | ' |
Deferred policy acquisition and sales inducement costs | |
Costs that are related directly to the successful acquisition of new or renewal life insurance and investment contracts are deferred and recorded as DAC. These costs are principally agents’ and brokers’ remuneration and certain underwriting expenses. DSI costs, which are deferred and recorded as other assets, relate to sales inducements offered on sales to new customers, principally on annuity and interest-sensitive life contracts. These sales inducements are primarily in the form of additional credits to the customer’s account balance or enhancements to interest credited for a specified period which are in excess of the rates currently being credited to similar contracts without sales inducements. All other acquisition costs are expensed as incurred and included in operating costs and expenses. Amortization of DAC is included in amortization of deferred policy acquisition costs and is described in more detail below. DSI is amortized into income using the same methodology and assumptions as DAC and is included in interest credited to contractholder funds. DAC and DSI are periodically reviewed for recoverability and adjusted if necessary. | |
For traditional life insurance, DAC is amortized over the premium paying period of the related policies in proportion to the estimated revenues on such business. Assumptions used in the amortization of DAC and reserve calculations are established at the time the policy is issued and are generally not revised during the life of the policy. Any deviations from projected business in force resulting from actual policy terminations differing from expected levels and any estimated premium deficiencies may result in a change to the rate of amortization in the period such events occur. Generally, the amortization periods for these policies approximates the estimated lives of the policies. | |
For interest-sensitive life, fixed annuities and other investment contracts, DAC and DSI are amortized in proportion to the incidence of the total present value of gross profits, which includes both actual historical gross profits (“AGP”) and estimated future gross profits (“EGP”) expected to be earned over the estimated lives of the contracts. The amortization is net of interest on the prior period DAC balance using rates established at the inception of the contracts. Actual amortization periods generally range from 15-30 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life and 5-10 years for fixed annuities. The cumulative DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. | |
AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are persistency, mortality, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. For products whose supporting investments are exposed to capital losses in excess of the Company’s expectations which may cause periodic AGP to become temporarily negative, EGP and AGP utilized in DAC and DSI amortization may be modified to exclude the excess capital losses. | |
The Company performs quarterly reviews of DAC and DSI recoverability for interest-sensitive life, fixed annuities and other investment contracts in the aggregate using current assumptions. If a change in the amount of EGP is significant, it could result in the unamortized DAC or DSI not being recoverable, resulting in a charge which is included as a component of amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. | |
The DAC and DSI balances presented include adjustments to reflect the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized capital gains or losses in the respective product investment portfolios were actually realized. The adjustments are recorded net of tax in accumulated other comprehensive income. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in accumulated other comprehensive income recognize the impact on shareholder’s equity consistently with the amounts that would be recognized in the income statement on realized capital gains and losses. | |
Customers of the Company may exchange one insurance policy or investment contract for another offered by the Company, or make modifications to an existing investment or life contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC and DSI related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For interest-sensitive life and investment contracts, the EGP of the replacement contracts are treated as a revision to the EGP of the replaced contracts in the determination of amortization of DAC and DSI. For traditional life insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions. Any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred. Internal replacement transactions determined to result in a substantial change to the replaced contracts are accounted for as an extinguishment of the replaced contracts, and any unamortized DAC and DSI related to the replaced contracts are eliminated with a corresponding charge to amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. | |
Reinsurance | ' |
Reinsurance | |
In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to effect the disposition of certain blocks of business. The amounts reported as reinsurance recoverables include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities and contractholder funds that have not yet been paid. Reinsurance recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverables. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate. | |
The Company has a reinsurance treaty with ALIC through which it primarily cedes reinvestment related risk on its structured settlement annuities. The terms of the treaty meet the accounting definition of a derivative. Accordingly, the treaty is recorded in the Statement of Financial Position at fair value. Changes in the fair value of the treaty and premiums paid to ALIC are recognized in realized capital gains and losses. | |
Income Taxes | ' |
Income taxes | |
The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains and losses, differences in tax bases of invested assets, DAC and insurance reserves. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized. | |
Reserve for Life-Contingent Contract Benefits | ' |
Reserve for life-contingent contract benefits | |
The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance, life-contingent immediate annuities and voluntary accident and health insurance products, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. To the extent that unrealized gains on fixed income securities would result in a premium deficiency if those gains were realized, the related increase in reserves for certain immediate annuities with life contingencies is recorded net of tax as a reduction of unrealized net capital gains included in accumulated other comprehensive income. | |
Contractholder Funds | ' |
Contractholder funds | |
Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on reinsured variable annuity contracts. | |
Separate Accounts | ' |
Separate accounts | |
Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows. | |
Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. All of the Company’s variable annuity business was reinsured beginning in 2006. | |
Off-Balance-Sheet Financial Instruments | ' |
Off-balance sheet financial instruments | |
Commitments to invest, commitments to extend mortgage loans and financial guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Statements of Financial Position (see Note 7 and Note 11). | |
Adopted Accounting Standards | ' |
Adopted accounting standards | |
Disclosures about Offsetting Assets and Liabilities | |
In December 2011 and January 2013, the Financial Accounting Standards Board (“FASB”) issued guidance requiring expanded disclosures, including both gross and net information, for derivatives, repurchase and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in the reporting entity’s financial statements or those that are subject to an enforceable master netting arrangement or similar agreement. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position. | |
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income | |
In February 2013, the FASB issued guidance requiring expanded disclosures about the amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by income statement line item but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about those amounts is required. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position. |
General_Tables
General (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Premiums and Contract Charges by Product | ' | ||||||||||||
The following table summarizes premiums and contract charges by product. | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Premiums | |||||||||||||
Traditional life insurance | $ | 38,618 | $ | 19,828 | $ | 20,728 | |||||||
Immediate annuities with life contingencies | 4,349 | 6,653 | 12,434 | ||||||||||
Accident and health insurance | 12,822 | 11,556 | 10,644 | ||||||||||
Total premiums | 55,789 | 38,037 | 43,806 | ||||||||||
Contract charges | |||||||||||||
Interest-sensitive life insurance | 72,740 | 54,357 | 52,228 | ||||||||||
Fixed annuities | 398 | 1,331 | 2,617 | ||||||||||
Total contract charges | 73,138 | 55,688 | 54,845 | ||||||||||
Total premiums and contract charges | $ | 128,927 | $ | 93,725 | $ | 98,651 | |||||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Supplemental Cash Flow Information | ' | ||||||||||||
The accompanying cash flows are included in cash flows from operating activities in the Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Net change in proceeds managed | |||||||||||||
Net change in short-term investments | $ | (2,838 | ) | $ | 1,325 | $ | 66,886 | ||||||
Operating cash flow (used) provided | $ | (2,838 | ) | $ | 1,325 | $ | 66,886 | ||||||
Net change in liabilities | |||||||||||||
Liabilities for collateral, beginning of year | $ | (59,772 | ) | $ | (61,097 | ) | $ | (127,983 | ) | ||||
Liabilities for collateral, end of year | (62,610 | ) | (59,772 | ) | (61,097 | ) | |||||||
Operating cash flow provided (used) | $ | 2,838 | $ | (1,325 | ) | $ | (66,886 | ) | |||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value | ' | ||||||||||||||||||||||||||||||||||||
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: | |||||||||||||||||||||||||||||||||||||
Amortized | Gross unrealized | Fair | |||||||||||||||||||||||||||||||||||
($ in thousands) | cost | Gains | Losses | value | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
U.S. government and agencies | $ | 237,510 | $ | 57,321 | $ | — | $ | 294,831 | |||||||||||||||||||||||||||||
Municipal | 677,780 | 58,068 | (9,864 | ) | 725,984 | ||||||||||||||||||||||||||||||||
Corporate | 3,572,713 | 236,627 | (43,751 | ) | 3,765,589 | ||||||||||||||||||||||||||||||||
Foreign government | 320,327 | 62,266 | (977 | ) | 381,616 | ||||||||||||||||||||||||||||||||
RMBS | 154,242 | 5,817 | (140 | ) | 159,919 | ||||||||||||||||||||||||||||||||
CMBS | 166,927 | 9,091 | (38 | ) | 175,980 | ||||||||||||||||||||||||||||||||
ABS | 87,176 | 2,260 | (929 | ) | 88,507 | ||||||||||||||||||||||||||||||||
Redeemable preferred stock | 9,026 | 1,286 | — | 10,312 | |||||||||||||||||||||||||||||||||
Total fixed income securities | $ | 5,225,701 | $ | 432,736 | $ | (55,699 | ) | $ | 5,602,738 | ||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
U.S. government and agencies | $ | 333,787 | $ | 83,260 | $ | — | $ | 417,047 | |||||||||||||||||||||||||||||
Municipal | 704,032 | 123,669 | (9,040 | ) | 818,661 | ||||||||||||||||||||||||||||||||
Corporate | 3,482,420 | 423,330 | (7,224 | ) | 3,898,526 | ||||||||||||||||||||||||||||||||
Foreign government | 303,649 | 92,986 | (94 | ) | 396,541 | ||||||||||||||||||||||||||||||||
RMBS | 284,885 | 11,708 | (915 | ) | 295,678 | ||||||||||||||||||||||||||||||||
CMBS | 195,605 | 11,871 | (6,760 | ) | 200,716 | ||||||||||||||||||||||||||||||||
ABS | 98,415 | 4,652 | (941 | ) | 102,126 | ||||||||||||||||||||||||||||||||
Redeemable preferred stock | 9,087 | 1,543 | — | 10,630 | |||||||||||||||||||||||||||||||||
Total fixed income securities | $ | 5,411,880 | $ | 753,019 | $ | (24,974 | ) | $ | 6,139,925 | ||||||||||||||||||||||||||||
Schedule of Net Investment Income | ' | ||||||||||||||||||||||||||||||||||||
Net investment income for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed income securities | $ | 289,571 | $ | 305,849 | $ | 326,000 | |||||||||||||||||||||||||||||||
Mortgage loans | 31,375 | 32,882 | 30,726 | ||||||||||||||||||||||||||||||||||
Equity securities | 4,870 | 3,589 | 2,818 | ||||||||||||||||||||||||||||||||||
Limited partnership interests(1) | 8,862 | 13,316 | 3,157 | ||||||||||||||||||||||||||||||||||
Short-term investments | 210 | 355 | 525 | ||||||||||||||||||||||||||||||||||
Policy loans | 2,543 | 2,600 | 2,628 | ||||||||||||||||||||||||||||||||||
Other | 65 | 220 | 679 | ||||||||||||||||||||||||||||||||||
Investment income, before expense | 337,496 | 358,811 | 366,533 | ||||||||||||||||||||||||||||||||||
Investment expense | (12,379 | ) | (12,616 | ) | (10,264 | ) | |||||||||||||||||||||||||||||||
Net investment income | $ | 325,117 | $ | 346,195 | $ | 356,269 | |||||||||||||||||||||||||||||||
(1) | Income from EMA limited partnerships is reported in net investment income in 2013 and 2012 and realized capital gains and losses in 2011. | ||||||||||||||||||||||||||||||||||||
Schedule of Realized Capital Gains and Losses by Asset Type | ' | ||||||||||||||||||||||||||||||||||||
Realized capital gains and losses by asset type for the years ended December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed income securities | $ | (1,537 | ) | $ | 2,545 | $ | 10,600 | ||||||||||||||||||||||||||||||
Mortgage loans | (1,507 | ) | 1,452 | (1,119 | ) | ||||||||||||||||||||||||||||||||
Equity securities | 27,944 | — | 9,575 | ||||||||||||||||||||||||||||||||||
Limited partnership interests(1) | (40 | ) | (221 | ) | 8,752 | ||||||||||||||||||||||||||||||||
Derivatives | (9,949 | ) | 13,967 | 15,096 | |||||||||||||||||||||||||||||||||
Short-term investments | — | — | 3 | ||||||||||||||||||||||||||||||||||
Realized capital gains and losses | $ | 14,911 | $ | 17,743 | $ | 42,907 | |||||||||||||||||||||||||||||||
(1) | Income from EMA limited partnerships is reported in net investment income in 2013 and 2012 and realized capital gains and losses in 2011. | ||||||||||||||||||||||||||||||||||||
Schedule of Realized Capital Gains and Losses by Transaction Type | ' | ||||||||||||||||||||||||||||||||||||
Realized capital gains and losses by transaction type for the years ended December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Impairment write-downs | $ | (3,431 | ) | $ | (5,144 | ) | $ | (18,129 | ) | ||||||||||||||||||||||||||||
Change in intent write-downs | (5,515 | ) | (310 | ) | (1,449 | ) | |||||||||||||||||||||||||||||||
Net other-than-temporary impairment losses recognized in earnings | (8,946 | ) | (5,454 | ) | (19,578 | ) | |||||||||||||||||||||||||||||||
Sales | 33,806 | 9,230 | 38,631 | ||||||||||||||||||||||||||||||||||
Valuation of derivative instruments | (9,965 | ) | 13,966 | 16,552 | |||||||||||||||||||||||||||||||||
Settlements of derivative instruments | 16 | 1 | (1,456 | ) | |||||||||||||||||||||||||||||||||
EMA limited partnership income | — | — | 8,758 | ||||||||||||||||||||||||||||||||||
Realized capital gains and losses | $ | 14,911 | $ | 17,743 | $ | 42,907 | |||||||||||||||||||||||||||||||
Schedule of Other-Than-Temporary Impairment Losses by Asset Type | ' | ||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses by asset type for the years ended December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||
($ in thousands) | Gross | Included | Net | Gross | Included | Net | Gross | Included | Net | ||||||||||||||||||||||||||||
in OCI | in OCI | in OCI | |||||||||||||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||||||||
Municipal | $ | (1,727 | ) | $ | — | $ | (1,727 | ) | $ | — | $ | — | $ | — | $ | (406 | ) | $ | — | $ | (406 | ) | |||||||||||||||
Corporate | — | — | — | (2,301 | ) | (476 | ) | (2,777 | ) | (5,259 | ) | 1,567 | (3,692 | ) | |||||||||||||||||||||||
RMBS | 28 | — | 28 | (531 | ) | (360 | ) | (891 | ) | (2,210 | ) | 91 | (2,119 | ) | |||||||||||||||||||||||
CMBS | (8,392 | ) | 3,464 | (4,928 | ) | — | (2,423 | ) | (2,423 | ) | (12,287 | ) | 568 | (11,719 | ) | ||||||||||||||||||||||
Total fixed income securities | (10,091 | ) | 3,464 | (6,627 | ) | (2,832 | ) | (3,259 | ) | (6,091 | ) | (20,162 | ) | 2,226 | (17,936 | ) | |||||||||||||||||||||
Mortgage loans | (1,832 | ) | — | (1,832 | ) | 637 | — | 637 | (1,642 | ) | — | (1,642 | ) | ||||||||||||||||||||||||
Equity securities | (487 | ) | — | (487 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other-than-temporary impairment losses | $ | (12,410 | ) | $ | 3,464 | $ | (8,946 | ) | $ | (2,195 | ) | $ | (3,259 | ) | $ | (5,454 | ) | $ | (21,804 | ) | $ | 2,226 | $ | (19,578 | ) | ||||||||||||
Schedule of Rollforwards of Cumulative Credit Losses Recognized in Earnings for Fixed Income Securities Held | ' | ||||||||||||||||||||||||||||||||||||
Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | (1,685 | ) | $ | (11,503 | ) | $ | (24,172 | ) | ||||||||||||||||||||||||||||
Additional credit loss for securities previously other-than-temporarily impaired | 29 | (4,796 | ) | (4,387 | ) | ||||||||||||||||||||||||||||||||
Additional credit loss for securities not previously other-than-temporarily impaired | (1,628 | ) | (985 | ) | (12,100 | ) | |||||||||||||||||||||||||||||||
Reduction in credit loss for securities disposed or collected | 960 | 15,599 | 28,304 | ||||||||||||||||||||||||||||||||||
Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell | 1,628 | — | 7 | ||||||||||||||||||||||||||||||||||
Change in credit loss due to accretion of increase in cash flows | — | — | 845 | ||||||||||||||||||||||||||||||||||
Ending balance | $ | (696 | ) | $ | (1,685 | ) | $ | (11,503 | ) | ||||||||||||||||||||||||||||
Schedule of Unrealized Net Capital Gains and Losses Included in Accumulated Other Comprehensive Income | ' | ||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows: | |||||||||||||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||||||||||
($ in thousands) | value | Gains | Losses | gains (losses) | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | $ | 5,602,738 | $ | 432,736 | $ | (55,699 | ) | $ | 377,037 | ||||||||||||||||||||||||||||
Equity securities | 202,622 | 38,978 | (5 | ) | 38,973 | ||||||||||||||||||||||||||||||||
Short-term investments | 98,553 | 1 | (1 | ) | — | ||||||||||||||||||||||||||||||||
EMA limited partnerships(1) | — | ||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 416,010 | ||||||||||||||||||||||||||||||||||||
Amounts recognized for: | |||||||||||||||||||||||||||||||||||||
Insurance reserves(2) | (168,267 | ) | |||||||||||||||||||||||||||||||||||
DAC and DSI(3) | (13,911 | ) | |||||||||||||||||||||||||||||||||||
Amounts recognized | (182,178 | ) | |||||||||||||||||||||||||||||||||||
Deferred income taxes | (81,841 | ) | |||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 151,991 | |||||||||||||||||||||||||||||||||||
(1) | Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross gains and losses are not applicable. | ||||||||||||||||||||||||||||||||||||
(2) | The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. | ||||||||||||||||||||||||||||||||||||
(3) | The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. | ||||||||||||||||||||||||||||||||||||
Fair | Gross unrealized | Unrealized net | |||||||||||||||||||||||||||||||||||
value | Gains | Losses | gains (losses) | ||||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | $ | 6,139,925 | $ | 753,019 | $ | (24,974 | ) | $ | 728,045 | ||||||||||||||||||||||||||||
Equity securities | 164,971 | 31,555 | (317 | ) | 31,238 | ||||||||||||||||||||||||||||||||
Short-term investments | 61,948 | 1 | — | 1 | |||||||||||||||||||||||||||||||||
EMA limited partnerships | 127 | ||||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | 759,411 | ||||||||||||||||||||||||||||||||||||
Amounts recognized for: | |||||||||||||||||||||||||||||||||||||
Insurance reserves | (360,887 | ) | |||||||||||||||||||||||||||||||||||
DAC and DSI | (24,206 | ) | |||||||||||||||||||||||||||||||||||
Amounts recognized | (385,093 | ) | |||||||||||||||||||||||||||||||||||
Deferred income taxes | (131,011 | ) | |||||||||||||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | 243,307 | |||||||||||||||||||||||||||||||||||
Schedule of Change in Unrealized net Capital Gains and Losses | ' | ||||||||||||||||||||||||||||||||||||
The change in unrealized net capital gains and losses for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed income securities | $ | (351,008 | ) | $ | 163,066 | $ | 265,163 | ||||||||||||||||||||||||||||||
Equity securities | 7,735 | 10,861 | (4,834 | ) | |||||||||||||||||||||||||||||||||
Short-term investments | (1 | ) | 4 | (3 | ) | ||||||||||||||||||||||||||||||||
EMA limited partnerships | (127 | ) | 97 | 30 | |||||||||||||||||||||||||||||||||
Total | (343,401 | ) | 174,028 | 260,356 | |||||||||||||||||||||||||||||||||
Amounts recognized for: | |||||||||||||||||||||||||||||||||||||
Insurance reserves | 192,620 | (90,058 | ) | (167,226 | ) | ||||||||||||||||||||||||||||||||
DAC and DSI | 10,295 | (9,162 | ) | (10,811 | ) | ||||||||||||||||||||||||||||||||
Amounts recognized | 202,915 | (99,220 | ) | (178,037 | ) | ||||||||||||||||||||||||||||||||
Deferred income taxes | 49,170 | (26,182 | ) | (28,812 | ) | ||||||||||||||||||||||||||||||||
(Decrease) increase in unrealized net capital gains and losses, after-tax | $ | (91,316 | ) | $ | 48,626 | $ | 53,507 | ||||||||||||||||||||||||||||||
Summary of Gross Unrealized Losses and Fair Value of Fixed Income and Equity Securities by Length of Time | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position. | |||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||
unrealized | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Number | Fair | Unrealized | Number | Fair | Unrealized | losses | ||||||||||||||||||||||||||||||
of issues | value | losses | of issues | value | losses | ||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||||||||||||||
Municipal | 15 | $ | 74,713 | $ | (5,180 | ) | 1 | $ | 14,663 | $ | (4,684 | ) | $ | (9,864 | ) | ||||||||||||||||||||||
Corporate | 209 | 805,236 | (35,258 | ) | 16 | 72,904 | (8,493 | ) | (43,751 | ) | |||||||||||||||||||||||||||
Foreign government | — | — | — | 1 | 8,976 | (977 | ) | (977 | ) | ||||||||||||||||||||||||||||
RMBS | — | — | — | 5 | 15,742 | (140 | ) | (140 | ) | ||||||||||||||||||||||||||||
CMBS | 3 | 5,533 | (38 | ) | — | — | — | (38 | ) | ||||||||||||||||||||||||||||
ABS | 1 | 5,076 | (4 | ) | 1 | 9,075 | (925 | ) | (929 | ) | |||||||||||||||||||||||||||
Total fixed income securities | 228 | 890,558 | (40,480 | ) | 24 | 121,360 | (15,219 | ) | (55,699 | ) | |||||||||||||||||||||||||||
Equity securities | 5 | 637 | (5 | ) | — | — | — | (5 | ) | ||||||||||||||||||||||||||||
Total fixed income and equity securities | 233 | $ | 891,195 | $ | (40,485 | ) | 24 | $ | 121,360 | $ | (15,219 | ) | $ | (55,704 | ) | ||||||||||||||||||||||
Investment grade fixed income securities | 175 | $ | 851,728 | $ | (37,398 | ) | 10 | $ | 66,380 | $ | (9,785 | ) | $ | (47,183 | ) | ||||||||||||||||||||||
Below investment grade fixed income securities | 53 | 38,830 | (3,082 | ) | 14 | 54,980 | (5,434 | ) | (8,516 | ) | |||||||||||||||||||||||||||
Total fixed income securities | 228 | $ | 890,558 | $ | (40,480 | ) | 24 | $ | 121,360 | $ | (15,219 | ) | $ | (55,699 | ) | ||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||||||||||||||
Municipal | — | $ | — | $ | — | 6 | $ | 45,374 | $ | (9,040 | ) | $ | (9,040 | ) | |||||||||||||||||||||||
Corporate | 27 | 116,512 | (2,068 | ) | 13 | 54,442 | (5,156 | ) | (7,224 | ) | |||||||||||||||||||||||||||
Foreign government | 1 | 9,854 | (94 | ) | — | — | — | (94 | ) | ||||||||||||||||||||||||||||
RMBS | 2 | 33 | — | 4 | 19,497 | (915 | ) | (915 | ) | ||||||||||||||||||||||||||||
CMBS | 1 | 1,995 | (6 | ) | 5 | 21,115 | (6,754 | ) | (6,760 | ) | |||||||||||||||||||||||||||
ABS | — | — | — | 2 | 12,838 | (941 | ) | (941 | ) | ||||||||||||||||||||||||||||
Total fixed income securities | 31 | $ | 128,394 | $ | (2,168 | ) | 30 | $ | 153,266 | $ | (22,806 | ) | $ | (24,974 | ) | ||||||||||||||||||||||
Equity securities | 2 | 24,954 | (317 | ) | — | — | — | (317 | ) | ||||||||||||||||||||||||||||
Total fixed income and equity securities | 33 | $ | 153,348 | $ | (2,485 | ) | 30 | $ | 153,266 | $ | (22,806 | ) | $ | (25,291 | ) | ||||||||||||||||||||||
Investment grade fixed income securities | 23 | $ | 107,042 | $ | (1,359 | ) | 17 | $ | 99,235 | $ | (11,525 | ) | $ | (12,884 | ) | ||||||||||||||||||||||
Below investment grade fixed income securities | 8 | 21,352 | (809 | ) | 13 | 54,031 | (11,281 | ) | (12,090 | ) | |||||||||||||||||||||||||||
Total fixed income securities | 31 | $ | 128,394 | $ | (2,168 | ) | 30 | $ | 153,266 | $ | (22,806 | ) | $ | (24,974 | ) | ||||||||||||||||||||||
Schedule of Commercial Mortgage Loans by Geographic Distribution | ' | ||||||||||||||||||||||||||||||||||||
The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31. | |||||||||||||||||||||||||||||||||||||
(% of mortgage loan portfolio carrying value) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
California | 25.6 | % | 24.3 | % | |||||||||||||||||||||||||||||||||
Illinois | 13 | 11.5 | |||||||||||||||||||||||||||||||||||
New Jersey | 8.8 | 7.4 | |||||||||||||||||||||||||||||||||||
Texas | 5.5 | 8.9 | |||||||||||||||||||||||||||||||||||
Arizona | 5.3 | 5.7 | |||||||||||||||||||||||||||||||||||
Ohio | 4.9 | 5.6 | |||||||||||||||||||||||||||||||||||
Florida | 4.5 | 5.3 | |||||||||||||||||||||||||||||||||||
Schedule of Types of Properties Collateralizing Commercial Mortgage Loans | ' | ||||||||||||||||||||||||||||||||||||
The types of properties collateralizing the mortgage loans as of December 31 are as follows: | |||||||||||||||||||||||||||||||||||||
(% of mortgage loan portfolio carrying value) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Warehouse | 26.6 | % | 28.3 | % | |||||||||||||||||||||||||||||||||
Retail | 23.3 | 19.9 | |||||||||||||||||||||||||||||||||||
Office buildings | 20.2 | 22.6 | |||||||||||||||||||||||||||||||||||
Apartment complex | 20.1 | 21.4 | |||||||||||||||||||||||||||||||||||
Other | 9.8 | 7.8 | |||||||||||||||||||||||||||||||||||
Total | 100 | % | 100 | % | |||||||||||||||||||||||||||||||||
Summary of Carrying Value of Non-Impaired Fixed and Variable Rate Mortgage Loans by Debt Service Coverage Ration Distribution | ' | ||||||||||||||||||||||||||||||||||||
The following table reflects the carrying value of non-impaired fixed rate mortgage loans summarized by debt service coverage ratio distribution as of December 31. There were no variable rate mortgage loans as of December 31, 2013 or 2012. | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Debt service coverage ratio distribution | |||||||||||||||||||||||||||||||||||||
Below 1.0 | $ | 25,086 | $ | 27,383 | |||||||||||||||||||||||||||||||||
1.0 - 1.25 | 68,687 | 99,713 | |||||||||||||||||||||||||||||||||||
1.26 - 1.50 | 155,452 | 150,877 | |||||||||||||||||||||||||||||||||||
Above 1.50 | 253,039 | 292,392 | |||||||||||||||||||||||||||||||||||
Total non-impaired mortgage loans | $ | 502,264 | $ | 570,365 | |||||||||||||||||||||||||||||||||
Schedule of Rollforward of Valuation Allowance on Impaired Mortgage Loans | ' | ||||||||||||||||||||||||||||||||||||
The rollforward of the valuation allowance on impaired mortgage loans for the years ended December 31 is as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | — | $ | 637 | $ | 1,670 | |||||||||||||||||||||||||||||||
Net increase (decrease) in valuation allowance | 1,832 | (637 | ) | 1,642 | |||||||||||||||||||||||||||||||||
Charge offs | — | — | (2,675 | ) | |||||||||||||||||||||||||||||||||
Ending balance | $ | 1,832 | $ | — | $ | 637 | |||||||||||||||||||||||||||||||
Schedule of Municipal Bonds Held For Investment by Geographic Distribution | ' | ||||||||||||||||||||||||||||||||||||
The Company maintains a diversified portfolio of municipal bonds. The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio. | |||||||||||||||||||||||||||||||||||||
(% of municipal bond portfolio carrying value) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
California | 22.9 | % | 21.3 | % | |||||||||||||||||||||||||||||||||
Texas | 11.1 | 12 | |||||||||||||||||||||||||||||||||||
Illinois | 5.9 | 6 | |||||||||||||||||||||||||||||||||||
Oregon | 5.2 | 4.9 | |||||||||||||||||||||||||||||||||||
Fixed income securities | ' | ||||||||||||||||||||||||||||||||||||
Schedule of Securities Based on Contractual Maturities | ' | ||||||||||||||||||||||||||||||||||||
Scheduled maturities | |||||||||||||||||||||||||||||||||||||
The scheduled maturities for fixed income securities are as follows as of December 31, 2013: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized | Fair | |||||||||||||||||||||||||||||||||||
cost | value | ||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 237,779 | $ | 243,799 | |||||||||||||||||||||||||||||||||
Due after one year through five years | 1,231,218 | 1,354,142 | |||||||||||||||||||||||||||||||||||
Due after five years through ten years | 1,886,134 | 1,986,043 | |||||||||||||||||||||||||||||||||||
Due after ten years | 1,462,225 | 1,594,348 | |||||||||||||||||||||||||||||||||||
4,817,356 | 5,178,332 | ||||||||||||||||||||||||||||||||||||
RMBS, CMBS and ABS | 408,345 | 424,406 | |||||||||||||||||||||||||||||||||||
Total | $ | 5,225,701 | $ | 5,602,738 | |||||||||||||||||||||||||||||||||
Mortgage loans | ' | ||||||||||||||||||||||||||||||||||||
Schedule of Securities Based on Contractual Maturities | ' | ||||||||||||||||||||||||||||||||||||
The contractual maturities of the mortgage loan portfolio as of December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Number | Carrying | Percent | ||||||||||||||||||||||||||||||||||
of loans | value | ||||||||||||||||||||||||||||||||||||
2014 | 5 | $ | 21,756 | 4.2 | % | ||||||||||||||||||||||||||||||||
2015 | 16 | 90,513 | 17.6 | ||||||||||||||||||||||||||||||||||
2016 | 12 | 58,694 | 11.4 | ||||||||||||||||||||||||||||||||||
2017 | 8 | 42,992 | 8.4 | ||||||||||||||||||||||||||||||||||
Thereafter | 54 | 300,534 | 58.4 | ||||||||||||||||||||||||||||||||||
Total | 95 | $ | 514,489 | 100 | % | ||||||||||||||||||||||||||||||||
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis | ' | ||||||||||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2013. There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2013. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance | |||||||||||||||||
in active | other | unobservable | as of | ||||||||||||||||||
markets for | observable | inputs | December 31, | ||||||||||||||||||
identical | inputs | (Level 3) | 2013 | ||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 3,678 | $ | 291,153 | $ | — | $ | 294,831 | |||||||||||||
Municipal | — | 674,669 | 51,315 | 725,984 | |||||||||||||||||
Corporate | — | 3,506,161 | 259,428 | 3,765,589 | |||||||||||||||||
Foreign government | — | 381,616 | — | 381,616 | |||||||||||||||||
RMBS | — | 159,919 | — | 159,919 | |||||||||||||||||
CMBS | — | 175,980 | — | 175,980 | |||||||||||||||||
ABS | — | 63,708 | 24,799 | 88,507 | |||||||||||||||||
Redeemable preferred stock | — | 10,312 | — | 10,312 | |||||||||||||||||
Total fixed income securities | 3,678 | 5,263,518 | 335,542 | 5,602,738 | |||||||||||||||||
Equity securities | 202,622 | — | — | 202,622 | |||||||||||||||||
Short-term investments | 3,157 | 95,396 | — | 98,553 | |||||||||||||||||
Other investments: Free-standing derivatives | — | — | 1,076 | 1,076 | |||||||||||||||||
Separate account assets | 435,446 | — | — | 435,446 | |||||||||||||||||
Other assets | — | — | 27,826 | 27,826 | |||||||||||||||||
Total assets at fair value | $ | 644,903 | $ | 5,358,914 | $ | 364,444 | $ | 6,368,261 | |||||||||||||
% of total assets at fair value | 10.1 | % | 84.2 | % | 5.7 | % | 100 | % | |||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (9,197 | ) | $ | (9,197 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (9,197 | ) | $ | (9,197 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2012. There were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2012. | |||||||||||||||||||||
($ in thousands) | Quoted prices | Significant | Significant | Balance | |||||||||||||||||
in active | other | unobservable | as of | ||||||||||||||||||
markets for | observable | inputs | December 31, | ||||||||||||||||||
identical | inputs | (Level 3) | 2012 | ||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. government and agencies | $ | 111,133 | $ | 305,914 | $ | — | $ | 417,047 | |||||||||||||
Municipal | — | 750,989 | 67,672 | 818,661 | |||||||||||||||||
Corporate | — | 3,638,175 | 260,351 | 3,898,526 | |||||||||||||||||
Foreign government | — | 396,541 | — | 396,541 | |||||||||||||||||
RMBS | — | 295,678 | — | 295,678 | |||||||||||||||||
CMBS | — | 200,716 | — | 200,716 | |||||||||||||||||
ABS | — | 75,156 | 26,970 | 102,126 | |||||||||||||||||
Redeemable preferred stock | — | 10,630 | — | 10,630 | |||||||||||||||||
Total fixed income securities | 111,133 | 5,673,799 | 354,993 | 6,139,925 | |||||||||||||||||
Equity securities | 164,971 | — | — | 164,971 | |||||||||||||||||
Short-term investments | 7,675 | 54,273 | — | 61,948 | |||||||||||||||||
Other investments: Free-standing derivatives | — | — | 306 | 306 | |||||||||||||||||
Separate account assets | 436,380 | — | — | 436,380 | |||||||||||||||||
Other assets | — | — | 34,655 | 34,655 | |||||||||||||||||
Total assets at fair value | $ | 720,159 | $ | 5,728,072 | $ | 389,954 | $ | 6,838,185 | |||||||||||||
% of total assets at fair value | 10.5 | % | 83.8 | % | 5.7 | % | 100 | % | |||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | (17,877 | ) | $ | (17,877 | ) | |||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | (17,877 | ) | $ | (17,877 | ) | |||||||||||
% of total liabilities at fair value | — | % | — | % | 100 | % | 100 | % | |||||||||||||
Summary of Quantitative Information About Significant Unobservable Inputs Used in Level Three Fair Value Measurements | ' | ||||||||||||||||||||
The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. | |||||||||||||||||||||
($ in thousands) | Fair | Valuation | Unobservable | Range | Weighted | ||||||||||||||||
value | technique | input | average | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
ARS backed by student loans | $ | 19,149 | Discounted cash flow model | Anticipated date liquidity will return to the market | 36 - 54 months | 39 - 51 months | |||||||||||||||
Other assets – Structured settlement annuity reinsurance agreement | $ | 27,826 | Stochastic cash flow model | Ultimate reinvestment spreads | 133.9 - 198.4 basis points | 157.5 basis points | |||||||||||||||
December 31, 2012 | |||||||||||||||||||||
ARS backed by student loans | $ | 31,429 | Discounted cash flow model | Anticipated date liquidity will return to the market | 36 - 60 months | 38 - 50 months | |||||||||||||||
Other assets – Structured settlement annuity reinsurance agreement | $ | 34,655 | Stochastic cash flow model | Ultimate reinvestment spreads | 133.8 - 196.0 basis points | 156.4 basis points | |||||||||||||||
Schedule of Rollforward of Level Three Assets and Liabilities Held at Fair Value on Recurring Basis | ' | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013. | |||||||||||||||||||||
Balance as of | Total gains (losses) | Transfers | Transfers | ||||||||||||||||||
December 31, | included in: | into | out of | ||||||||||||||||||
($ in thousands) | 2012 | Net | OCI | Level 3 | Level 3 | ||||||||||||||||
income(1) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | 67,672 | $ | (1,960 | ) | $ | 2,614 | $ | — | $ | — | ||||||||||
Corporate | 260,351 | 8,509 | (8,214 | ) | 9,663 | (4,160 | ) | ||||||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
ABS | 26,970 | — | (951 | ) | — | — | |||||||||||||||
Total fixed income securities | 354,993 | 6,549 | (6,551 | ) | 9,663 | (4,160 | ) | ||||||||||||||
Free-standing derivatives, net | 306 | 431 | — | — | — | ||||||||||||||||
Other assets | 34,655 | (6,829 | ) | — | — | — | |||||||||||||||
Total recurring Level 3 assets | $ | 389,954 | $ | 151 | $ | (6,551 | ) | $ | 9,663 | $ | (4,160 | ) | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (17,877 | ) | $ | 8,680 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (17,877 | ) | $ | 8,680 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | — | $ | (15,067 | ) | $ | — | $ | (1,944 | ) | $ | 51,315 | |||||||||
Corporate | 6,910 | (10,615 | ) | — | (3,016 | ) | 259,428 | ||||||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
ABS | — | — | — | (1,220 | ) | 24,799 | |||||||||||||||
Total fixed income securities | 6,910 | (25,682 | ) | — | (6,180 | ) | 335,542 | ||||||||||||||
Free-standing derivatives, net | 339 | — | — | — | 1,076 | ||||||||||||||||
Other assets | — | — | — | — | 27,826 | ||||||||||||||||
Total recurring Level 3 assets | $ | 7,249 | $ | (25,682 | ) | $ | — | $ | (6,180 | ) | $ | 364,444 | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | — | $ | — | $ | (9,197 | ) | ||||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | — | $ | — | $ | (9,197 | ) | ||||||||||
(1) | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012. | |||||||||||||||||||||
Balance as of | Total gains (losses) | ||||||||||||||||||||
December 31, | included in: | ||||||||||||||||||||
($ in thousands) | 2011 | Net | OCI | Transfers | Transfers | ||||||||||||||||
income(1) | into | out of | |||||||||||||||||||
Level 3 | Level 3 | ||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | 50,422 | $ | 50 | $ | 3,082 | $ | 18,576 | $ | — | |||||||||||
Corporate | 223,643 | 3,854 | 11,224 | 52,629 | — | ||||||||||||||||
RMBS | 2,730 | — | — | — | (2,730 | ) | |||||||||||||||
ABS | 26,425 | — | 3,668 | — | — | ||||||||||||||||
Total fixed income securities | 303,220 | 3,904 | 17,974 | 71,205 | (2,730 | ) | |||||||||||||||
Free-standing derivatives, net | (2,867 | ) | (296 | ) | — | — | — | ||||||||||||||
Other assets | 16,869 | 17,786 | — | — | — | ||||||||||||||||
Total recurring Level 3 assets | $ | 317,222 | $ | 21,394 | $ | 17,974 | $ | 71,205 | $ | (2,730 | ) | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (21,854 | ) | $ | 3,977 | $ | — | $ | — | $ | — | ||||||||||
Total recurring Level 3 liabilities | $ | (21,854 | ) | $ | 3,977 | $ | — | $ | — | $ | — | ||||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | — | $ | (2,251 | ) | $ | — | $ | (2,207 | ) | $ | 67,672 | |||||||||
Corporate | 18,029 | (18,812 | ) | — | (30,216 | ) | 260,351 | ||||||||||||||
RMBS | — | — | — | — | — | ||||||||||||||||
ABS | — | (1,866 | ) | — | (1,257 | ) | 26,970 | ||||||||||||||
Total fixed income securities | 18,029 | (22,929 | ) | — | (33,680 | ) | 354,993 | ||||||||||||||
Free-standing derivatives, net | 3,471 | — | — | (2 | ) | 306 | |||||||||||||||
Other assets | — | — | — | — | 34,655 | ||||||||||||||||
Total recurring Level 3 assets | $ | 21,500 | $ | (22,929 | ) | $ | — | $ | (33,682 | ) | $ | 389,954 | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | — | $ | — | $ | (17,877 | ) | ||||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | — | $ | — | $ | (17,877 | ) | ||||||||||
(1) | The effect to net income totals $25.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $14.3 million in realized capital gains and losses, $7.1 million in net investment income, $(142) thousand in interest credited to contractholder funds and $4.1 million in contract benefits. | ||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2011. | |||||||||||||||||||||
Balance as of | Total gains (losses) | ||||||||||||||||||||
December 31, | included in: | ||||||||||||||||||||
($ in thousands) | 2010 | Net | OCI | Transfers | Transfers | ||||||||||||||||
income(1) | into | out of | |||||||||||||||||||
Level 3 | Level 3 | ||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | 103,369 | $ | 43 | $ | 1,054 | $ | 5,378 | $ | (7,892 | ) | ||||||||||
Corporate | 225,207 | 8,719 | 4,191 | 10,882 | (37,097 | ) | |||||||||||||||
RMBS | 80,063 | (1,066 | ) | 1,743 | — | (56,510 | ) | ||||||||||||||
CMBS | 141,869 | (4,698 | ) | 15,987 | — | (133,918 | ) | ||||||||||||||
ABS | 40,851 | 149 | 252 | — | (23,013 | ) | |||||||||||||||
Total fixed income securities | 591,359 | 3,147 | 23,227 | 16,260 | (258,430 | ) | |||||||||||||||
Free-standing derivatives, net | (3,011 | ) | (3,153 | ) | — | — | — | ||||||||||||||
Other assets | (4,870 | ) | 21,739 | — | — | — | |||||||||||||||
Total recurring Level 3 assets | $ | 583,478 | $ | 21,733 | $ | 23,227 | $ | 16,260 | $ | (258,430 | ) | ||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | (17,544 | ) | $ | (4,310 | ) | $ | — | $ | — | $ | — | |||||||||
Total recurring Level 3 liabilities | $ | (17,544 | ) | $ | (4,310 | ) | $ | — | $ | — | $ | — | |||||||||
Purchases | Sales | Issues | Settlements | Balance as of | |||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | — | $ | (49,623 | ) | $ | — | $ | (1,907 | ) | $ | 50,422 | |||||||||
Corporate | 24,978 | (11,680 | ) | — | (1,557 | ) | 223,643 | ||||||||||||||
RMBS | — | (8,582 | ) | — | (12,918 | ) | 2,730 | ||||||||||||||
CMBS | — | (19,240 | ) | — | — | — | |||||||||||||||
ABS | 14,999 | (3,856 | ) | — | (2,957 | ) | 26,425 | ||||||||||||||
Total fixed income securities | 39,977 | (92,981 | ) | — | (19,339 | ) | 303,220 | ||||||||||||||
Free-standing derivatives, net | 1,867 | — | — | 1,430 | (2,867 | )(2) | |||||||||||||||
Other assets | — | — | — | — | 16,869 | ||||||||||||||||
Total recurring Level 3 assets | $ | 41,844 | $ | (92,981 | ) | $ | — | $ | (17,909 | ) | $ | 317,222 | |||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | — | $ | — | $ | — | $ | — | $ | (21,854 | ) | ||||||||||
Total recurring Level 3 liabilities | $ | — | $ | — | $ | — | $ | — | $ | (21,854 | ) | ||||||||||
(1) | The effect to net income totals $17.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $13.4 million in realized capital gains and losses, $8.3 million in net investment income, $(156) thousand in interest credited to contractholder funds and $(4.2) million in contract benefits. | ||||||||||||||||||||
(2) | Comprises $38 thousand of assets and $2.9 million of liabilities. | ||||||||||||||||||||
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held | ' | ||||||||||||||||||||
The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31. | |||||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||
Assets | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
Municipal | $ | (1,458 | ) | $ | 54 | $ | 151 | ||||||||||||||
Corporate | 6,633 | 4,912 | 8,193 | ||||||||||||||||||
Total fixed income securities | 5,175 | 4,966 | 8,344 | ||||||||||||||||||
Free-standing derivatives, net | 431 | (279 | ) | (1,714 | ) | ||||||||||||||||
Other assets | (6,829 | ) | 17,786 | 21,739 | |||||||||||||||||
Total recurring Level 3 assets | $ | (1,223 | ) | $ | 22,473 | $ | 28,369 | ||||||||||||||
Liabilities | |||||||||||||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ | 8,680 | $ | 3,977 | $ | (4,310 | ) | ||||||||||||||
Total recurring Level 3 liabilities | $ | 8,680 | $ | 3,977 | $ | (4,310 | ) | ||||||||||||||
Schedule of Carrying Values and Fair Value Estimates of Financial Instruments not Carried at Fair Value | ' | ||||||||||||||||||||
Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value. | |||||||||||||||||||||
Financial assets | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||
($ in thousands) | Carrying | Fair value | Carrying | Fair value | |||||||||||||||||
value | value | ||||||||||||||||||||
Mortgage loans | $ | 514,489 | $ | 534,241 | $ | 570,365 | $ | 602,516 | |||||||||||||
Cost method limited partnerships | 41,419 | 44,401 | 29,746 | 30,920 | |||||||||||||||||
Notes due from related party | — | — | 2,833 | 2,833 | |||||||||||||||||
Financial liabilities | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||
($ in thousands) | Carrying | Fair value | Carrying | Fair value | |||||||||||||||||
value | value | ||||||||||||||||||||
Contractholder funds on investment contracts | $ | 2,771,149 | $ | 2,912,758 | $ | 3,050,538 | $ | 3,222,131 | |||||||||||||
Liability for collateral | 62,610 | 62,610 | 59,772 | 59,772 |
Derivative_Financial_Instrumen1
Derivative Financial Instruments and Off-balance sheet Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Summary of Volume and Fair Value Positions of Derivative Instruments and Reporting Location in Statement of Financial Position | ' | ||||||||||||||||||||||||||||||||
The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2013. None of these derivatives are designated as accounting hedging instruments. | |||||||||||||||||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||||||||||||
($ in thousands) | Balance sheet location | Volume- | Fair | Gross | Gross | ||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||||||||||
Interest rate cap agreements | Other investments | $ | 40,100 | $ | 1,076 | $ | 1,076 | $ | — | ||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Conversion options | Fixed income securities | 42 | — | — | — | ||||||||||||||||||||||||||||
Other contracts | |||||||||||||||||||||||||||||||||
Structured settlement annuity reinsurance agreement | Other assets | — | 27,826 | 27,826 | — | ||||||||||||||||||||||||||||
Total asset derivatives | $ | 40,142 | $ | 28,902 | $ | 28,902 | $ | — | |||||||||||||||||||||||||
Liability derivatives | |||||||||||||||||||||||||||||||||
Balance sheet location | Volume- | Fair | Gross | Gross | |||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Guaranteed accumulation benefits | Contractholder funds | $ | 136,770 | $ | (7,925 | ) | $ | — | $ | (7,925 | ) | ||||||||||||||||||||||
Guaranteed withdrawal benefits | Contractholder funds | 28,924 | (677 | ) | — | (677 | ) | ||||||||||||||||||||||||||
Equity-indexed options in life product contracts | Contractholder funds | 9,581 | (595 | ) | — | (595 | ) | ||||||||||||||||||||||||||
Total liability derivatives | 175,275 | (9,197 | ) | $ | — | $ | (9,197 | ) | |||||||||||||||||||||||||
Total derivatives | $ | 215,417 | $ | 19,705 | |||||||||||||||||||||||||||||
The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2012. None of these derivatives are designated as accounting hedging instruments. | |||||||||||||||||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||||||||||||
($ in thousands) | Balance sheet location | Volume- | Fair | Gross | Gross | ||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||||||||||
Interest rate cap agreements | Other investments | $ | 152,400 | $ | 306 | $ | 306 | $ | — | ||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Conversion options | Fixed income securities | 1,000 | 83 | 83 | — | ||||||||||||||||||||||||||||
Other contracts | |||||||||||||||||||||||||||||||||
Structured settlement annuity reinsurance agreement | Other assets | — | 34,655 | 34,655 | — | ||||||||||||||||||||||||||||
Total asset derivatives | $ | 153,400 | $ | 35,044 | $ | 35,044 | $ | — | |||||||||||||||||||||||||
Liability derivatives | |||||||||||||||||||||||||||||||||
Balance sheet location | Volume- | Fair | Gross | Gross | |||||||||||||||||||||||||||||
notional | value, | asset | liability | ||||||||||||||||||||||||||||||
amount | net | ||||||||||||||||||||||||||||||||
Embedded derivative financial instruments | |||||||||||||||||||||||||||||||||
Guaranteed accumulation benefits | Contractholder funds | $ | 148,926 | $ | (15,508 | ) | $ | — | $ | (15,508 | ) | ||||||||||||||||||||||
Guaranteed withdrawal benefits | Contractholder funds | 29,800 | (2,071 | ) | — | (2,071 | ) | ||||||||||||||||||||||||||
Equity-indexed options in life product contracts | Contractholder funds | 6,589 | (298 | ) | — | (298 | ) | ||||||||||||||||||||||||||
Total liability derivatives | 185,315 | (17,877 | ) | $ | — | $ | (17,877 | ) | |||||||||||||||||||||||||
Total derivatives | $ | 338,715 | $ | 17,167 | |||||||||||||||||||||||||||||
Summary of Gains and Losses from Valuation and Settlements For Derivatives Not Designated As Hedges | ' | ||||||||||||||||||||||||||||||||
The following tables present gains and losses from valuation and settlements reported on derivatives not designated as accounting hedging instruments in the Statements of Operations and Comprehensive Income for the years ended December 31. | |||||||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||
($ in thousands) | Realized | Contract | Interest | Total gain (loss) | |||||||||||||||||||||||||||||
capital | benefits | credited to | recognized in net | ||||||||||||||||||||||||||||||
gains and | contractholder | income on | |||||||||||||||||||||||||||||||
losses | funds | derivatives | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | 431 | $ | — | $ | — | $ | 431 | |||||||||||||||||||||||||
Embedded derivative financial instruments | (83 | ) | 8,977 | (297 | ) | 8,597 | |||||||||||||||||||||||||||
Other contracts - structured settlement annuity reinsurance agreement | (10,297 | ) | — | — | (10,297 | ) | |||||||||||||||||||||||||||
Total | $ | (9,949 | ) | $ | 8,977 | $ | (297 | ) | $ | (1,269 | ) | ||||||||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||
Realized | Contract | Interest | Total gain (loss) | ||||||||||||||||||||||||||||||
capital | benefits | credited to | recognized in net | ||||||||||||||||||||||||||||||
gains and | contractholder | income on | |||||||||||||||||||||||||||||||
losses | funds | derivatives | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | (296 | ) | $ | — | $ | — | $ | (296 | ) | |||||||||||||||||||||||
Embedded derivative financial instruments | (13 | ) | 4,119 | (142 | ) | 3,964 | |||||||||||||||||||||||||||
Other contracts - structured settlement annuity reinsurance agreement | 14,276 | — | — | 14,276 | |||||||||||||||||||||||||||||
Total | $ | 13,967 | $ | 4,119 | $ | (142 | ) | $ | 17,944 | ||||||||||||||||||||||||
2011 | |||||||||||||||||||||||||||||||||
Realized | Contract | Interest | Total gain (loss) | ||||||||||||||||||||||||||||||
capital | benefits | credited to | recognized in net | ||||||||||||||||||||||||||||||
gains and | contractholder | income on | |||||||||||||||||||||||||||||||
losses | funds | derivatives | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | (3,153 | ) | $ | — | $ | — | $ | (3,153 | ) | |||||||||||||||||||||||
Embedded derivative financial instruments | 3 | (4,154 | ) | (156 | ) | (4,307 | ) | ||||||||||||||||||||||||||
Other contracts - structured settlement annuity reinsurance agreement | 18,246 | — | — | 18,246 | |||||||||||||||||||||||||||||
Total | $ | 15,096 | $ | (4,154 | ) | $ | (156 | ) | $ | 10,786 | |||||||||||||||||||||||
Summary of Counterparty Credit Exposure by Counterparty Credit Rating | ' | ||||||||||||||||||||||||||||||||
The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. | |||||||||||||||||||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||||||||||||||||||
Rating(1) | Number of | Notional | Credit | Exposure, | Number of | Notional | Credit | Exposure, | |||||||||||||||||||||||||
counter- | Amount(2) | exposure(2) | net of | counter- | Amount(2) | exposure(2) | net of | ||||||||||||||||||||||||||
parties | collateral(2) | parties | collateral(2) | ||||||||||||||||||||||||||||||
A+ | 1 | $ | 21,700 | $ | 624 | $ | 624 | 1 | $ | 18,800 | $ | 209 | $ | 209 | |||||||||||||||||||
A | 2 | 10,700 | 227 | 227 | 1 | 7,900 | 45 | 45 | |||||||||||||||||||||||||
A- | — | — | — | — | 2 | 68,700 | 21 | 21 | |||||||||||||||||||||||||
BBB+ | 1 | 2,700 | 156 | 156 | 1 | 5,000 | 31 | 31 | |||||||||||||||||||||||||
BBB | 1 | 5,000 | 69 | 69 | — | — | — | — | |||||||||||||||||||||||||
Total | 5 | $ | 40,100 | $ | 1,076 | $ | 1,076 | 5 | $ | 100,400 | $ | 306 | $ | 306 | |||||||||||||||||||
(1) | Rating is the lower of S&P or Moody’s ratings. | ||||||||||||||||||||||||||||||||
(2) | Only OTC derivatives with a net positive fair value are included for each counterparty. |
Reserve_for_LifeContingent_Con1
Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Schedule of Reserve for Life-Contingent Contract Benefits | ' | ||||||||||||||||
As of December 31, the reserve for life-contingent contract benefits consists of the following: | |||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||
Immediate fixed annuities: | |||||||||||||||||
Structured settlement annuities | $ | 1,903,194 | $ | 2,080,767 | |||||||||||||
Other immediate fixed annuities | 43,775 | 34,068 | |||||||||||||||
Traditional life insurance | 192,114 | 185,534 | |||||||||||||||
Accident and health insurance | 10,396 | 8,188 | |||||||||||||||
Other | 1,837 | 2,324 | |||||||||||||||
Total reserve for life-contingent contract benefits | $ | 2,151,316 | $ | 2,310,881 | |||||||||||||
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits | ' | ||||||||||||||||
The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits. | |||||||||||||||||
Product | Mortality | Interest rate | Estimation method | ||||||||||||||
Structured settlement annuities | U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy | Interest rate | Present value of | ||||||||||||||
assumptions range | contractually specified | ||||||||||||||||
from 2.9% to 9.0% | future benefits | ||||||||||||||||
Other immediate fixed annuities | 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table | Interest rate | Present value of | ||||||||||||||
assumptions range | expected future | ||||||||||||||||
from 0% to 11.5% | benefits based on | ||||||||||||||||
historical experience | |||||||||||||||||
Traditional life insurance | Actual company experience plus loading | Interest rate | Net level premium | ||||||||||||||
assumptions range | reserve method using | ||||||||||||||||
from 4.0% to 8.0% | the Company’s | ||||||||||||||||
withdrawal experience | |||||||||||||||||
rates; includes reserves | |||||||||||||||||
for unpaid claims | |||||||||||||||||
Accident and health insurance | Actual company experience plus loading | Interest rate | Unearned premium; | ||||||||||||||
assumptions range | additional contract | ||||||||||||||||
from 5.0% to 6.0% | reserves for mortality | ||||||||||||||||
risk and unpaid claims | |||||||||||||||||
Other: | |||||||||||||||||
Variable annuity guaranteed minimum death benefits(1) | Annuity 2000 mortality table with internal modifications | Interest rate | Projected benefit ratio | ||||||||||||||
assumptions range | applied to cumulative | ||||||||||||||||
from 4.0% to 5.8% | assessments | ||||||||||||||||
(1) | In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”). | ||||||||||||||||
Schedule of Contractholder Funds | ' | ||||||||||||||||
As of December 31, contractholder funds consist of the following: | |||||||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||||||
Interest-sensitive life insurance | $ | 696,878 | $ | 684,584 | |||||||||||||
Investment contracts: | |||||||||||||||||
Fixed annuities | 2,952,798 | 3,242,717 | |||||||||||||||
Other investment contracts | 20,881 | 31,139 | |||||||||||||||
Total contractholder funds | $ | 3,670,557 | $ | 3,958,440 | |||||||||||||
Schedule of Contract Provisions Related to Contractholder Funds | ' | ||||||||||||||||
The following table highlights the key contract provisions relating to contractholder funds: | |||||||||||||||||
Product | Interest rate | Withdrawal/surrender charges | |||||||||||||||
Interest-sensitive life insurance | Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.7% to 5.1% for all other products | Either a percentage of account | |||||||||||||||
balance or dollar amount | |||||||||||||||||
grading off generally over 20 | |||||||||||||||||
years | |||||||||||||||||
Fixed annuities | Interest rates credited range from 0% to 9.0% for immediate annuities and 1.0% to 5.4% for other fixed annuities | Either a declining or a level | |||||||||||||||
percentage charge generally | |||||||||||||||||
over ten years or less. | |||||||||||||||||
Additionally, approximately | |||||||||||||||||
13.4% of fixed annuities are | |||||||||||||||||
subject to market value | |||||||||||||||||
adjustment for discretionary | |||||||||||||||||
withdrawals | |||||||||||||||||
Other investment contracts: | |||||||||||||||||
Guaranteed minimum income, accumulation and withdrawal benefits on variable annuities(1) and secondary guarantees on interest-sensitive life insurance and fixed annuities | Interest rates used in establishing reserves range from 1.7% to 10.3% | Withdrawal and surrender | |||||||||||||||
charges are based on the terms | |||||||||||||||||
of the related interest-sensitive | |||||||||||||||||
life insurance or fixed annuity | |||||||||||||||||
contract | |||||||||||||||||
(1) | In 2006, the Company disposed its variable annuity business through a reinsurance agreement with Prudential. | ||||||||||||||||
Schedule of Contractholder Funds Activity | ' | ||||||||||||||||
Contractholder funds activity for the years ended December 31 is as follows: | |||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||
Balance, beginning of year | $ | 3,958,440 | $ | 4,344,897 | $ | 4,688,791 | |||||||||||
Deposits | 109,282 | 115,708 | 121,999 | ||||||||||||||
Interest credited | 129,687 | 144,284 | 154,657 | ||||||||||||||
Benefits | (152,822 | ) | (149,800 | ) | (155,403 | ) | |||||||||||
Surrenders and partial withdrawals | (284,755 | ) | (409,575 | ) | (381,834 | ) | |||||||||||
Contract charges | (70,856 | ) | (67,695 | ) | (65,034 | ) | |||||||||||
Net transfers from separate accounts | 153 | 38 | (55 | ) | |||||||||||||
Other adjustments | (18,572 | ) | (19,417 | ) | (18,224 | ) | |||||||||||
Balance, end of year | $ | 3,670,557 | $ | 3,958,440 | $ | 4,344,897 | |||||||||||
Summary of Variable Annuity Contracts with Guarantees | ' | ||||||||||||||||
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. | |||||||||||||||||
December 31, | |||||||||||||||||
($ in millions) | 2013 | 2012 | |||||||||||||||
In the event of death | |||||||||||||||||
Separate account value | $ | 427.4 | $ | 432 | |||||||||||||
Net amount at risk(1) | $ | 12.2 | $ | 27.8 | |||||||||||||
Average attained age of contractholders | 65 years | 64 years | |||||||||||||||
At annuitization (includes income benefit guarantees) | |||||||||||||||||
Separate account value | $ | 29.9 | $ | 30.5 | |||||||||||||
Net amount at risk(2) | $ | 2 | $ | 4.5 | |||||||||||||
Weighted average waiting period until annuitization options available | None | 1 year | |||||||||||||||
For cumulative periodic withdrawals | |||||||||||||||||
Separate account value | $ | 28.6 | $ | 29.1 | |||||||||||||
Net amount at risk(3) | $ | 0.2 | $ | 0.5 | |||||||||||||
Accumulation at specified dates | |||||||||||||||||
Separate account value | $ | 135.8 | $ | 148 | |||||||||||||
Net amount at risk(4) | $ | 1.7 | $ | 5.1 | |||||||||||||
Weighted average waiting period until guarantee date | 4 years | 5 years | |||||||||||||||
(1) | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | ||||||||||||||||
(2) | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | ||||||||||||||||
(3) | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | ||||||||||||||||
(4) | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. | ||||||||||||||||
Summary of Liabilities for Guarantees | ' | ||||||||||||||||
The following table summarizes the liabilities for guarantees: | |||||||||||||||||
($ in thousands) | Liability for | Liability for | Liability for | Total | |||||||||||||
guarantees | guarantees | guarantees | |||||||||||||||
related to death | related to | related to | |||||||||||||||
benefits and | income | accumulation | |||||||||||||||
interest-sensitive | benefits | and | |||||||||||||||
life products | withdrawal | ||||||||||||||||
benefits | |||||||||||||||||
Balance, December 31, 2012(1) | $ | 10,463 | $ | 5,174 | $ | 17,579 | $ | 33,216 | |||||||||
Less reinsurance recoverables | 2,077 | 5,166 | 17,579 | 24,822 | |||||||||||||
Net balance as of December 31, 2012 | 8,386 | 8 | — | 8,394 | |||||||||||||
Incurred guarantee benefits | 1,553 | — | — | 1,553 | |||||||||||||
Paid guarantee benefits | — | — | — | — | |||||||||||||
Net change | 1,553 | — | — | 1,553 | |||||||||||||
Net balance as of December 31, 2013 | 9,939 | 8 | — | 9,947 | |||||||||||||
Plus reinsurance recoverables | 1,680 | 2,333 | 8,602 | 12,615 | |||||||||||||
Balance, December 31, 2013(2) | $ | 11,619 | $ | 2,341 | $ | 8,602 | $ | 22,562 | |||||||||
Balance, December 31, 2011(3) | $ | 7,572 | $ | 3,971 | $ | 21,698 | $ | 33,241 | |||||||||
Less reinsurance recoverables | 2,336 | 3,963 | 21,698 | 27,997 | |||||||||||||
Net balance as of December 31, 2011 | 5,236 | 8 | — | 5,244 | |||||||||||||
Incurred guarantee benefits | 3,150 | — | — | 3,150 | |||||||||||||
Paid guarantee benefits | — | — | — | — | |||||||||||||
Net change | 3,150 | — | — | 3,150 | |||||||||||||
Net balance as of December 31, 2012 | 8,386 | 8 | — | 8,394 | |||||||||||||
Plus reinsurance recoverables | 2,077 | 5,166 | 17,579 | 24,822 | |||||||||||||
Balance, December 31, 2012(2) | $ | 10,463 | $ | 5,174 | $ | 17,579 | $ | 33,216 | |||||||||
-1 | Included in the total liability balance as of December 31, 2012 are reserves for variable annuity death benefits of $2.1 million, variable annuity income benefits of $5.2 million, variable annuity accumulation benefits of $15.5 million, variable annuity withdrawal benefits of $2.1 million and other guarantees of $8.4 million. | ||||||||||||||||
-2 | Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $1.0 million and other guarantees of $9.9 million. | ||||||||||||||||
-3 | Included in the total liability balance as of December 31, 2011 are reserves for variable annuity death benefits of $2.3 million, variable annuity income benefits of $4.0 million, variable annuity accumulation benefits of $18.7 million, variable annuity withdrawal benefits of $3.0 million and other guarantees of $5.2 million. |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Effects of Reinsurance on Premiums and Contract Charges | ' | ||||||||||||
The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 155,193 | $ | 152,197 | $ | 156,130 | |||||||
Assumed - non-affiliate | 835 | 849 | 889 | ||||||||||
Ceded | |||||||||||||
Affiliate | (3,961 | ) | (35,904 | ) | (31,505 | ) | |||||||
Non-affiliate | (23,140 | ) | (23,417 | ) | (26,863 | ) | |||||||
Premiums and contract charges, net of reinsurance | $ | 128,927 | $ | 93,725 | $ | 98,651 | |||||||
Schedule of Effects of Reinsurance on Contract Benefits | ' | ||||||||||||
The effects of reinsurance on contract benefits for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 213,437 | $ | 196,463 | $ | 207,769 | |||||||
Assumed - non-affiliate | 1,008 | 709 | 682 | ||||||||||
Ceded | |||||||||||||
Affiliate | (6,440 | ) | (4,865 | ) | (6,570 | ) | |||||||
Non-affiliate | (4,288 | ) | (11,393 | ) | (17,715 | ) | |||||||
Contract benefits, net of reinsurance | $ | 203,717 | $ | 180,914 | $ | 184,166 | |||||||
Schedule of Effect of Reinsurance on Interest Credited to Contractholder Funds | ' | ||||||||||||
The effects of reinsurance on interest credited to contractholder funds for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Direct | $ | 135,354 | $ | 150,355 | $ | 161,283 | |||||||
Assumed - non-affiliate | 25 | 17 | 19 | ||||||||||
Ceded | |||||||||||||
Non-affiliate | (5,468 | ) | (6,032 | ) | (6,855 | ) | |||||||
Interest credited to contractholder funds, net of reinsurance | $ | 129,911 | $ | 144,340 | $ | 154,447 | |||||||
Deferred_Policy_Acquisition_an1
Deferred Policy Acquisition and Sales Inducement Costs (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Deferred Policy Acquisition Costs | ' | ||||||||||||
Deferred policy acquisition costs for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 130,201 | $ | 132,614 | $ | 136,377 | |||||||
Acquisition costs deferred | 19,553 | 19,423 | 17,842 | ||||||||||
Amortization charged to income | (29,783 | ) | (13,145 | ) | (11,102 | ) | |||||||
Effect of unrealized gains and losses | 9,865 | (8,691 | ) | (10,503 | ) | ||||||||
Balance, end of year | $ | 129,836 | $ | 130,201 | $ | 132,614 | |||||||
Schedule of Deferred Sales Inducement Activity | ' | ||||||||||||
DSI activity, which primarily relates to fixed annuities and interest-sensitive life contracts, for the years ended December 31 was as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 1,717 | $ | 2,019 | $ | 2,024 | |||||||
Sales inducements deferred | 381 | 409 | 526 | ||||||||||
Amortization charged to income | (604 | ) | (465 | ) | (316 | ) | |||||||
Effect of unrealized gains and losses | 243 | (246 | ) | (215 | ) | ||||||||
Balance, end of year | $ | 1,737 | $ | 1,717 | $ | 2,019 | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Components of Deferred Income Tax Assets and Liabilities | ' | ||||||||||||
The components of the deferred income tax assets and liabilities as of December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | |||||||||||
Deferred assets | |||||||||||||
Accrued liabilities | $ | 41 | $ | 181 | |||||||||
Unrealized foreign currency translation adjustments | — | 316 | |||||||||||
Life and annuity reserves | — | — | |||||||||||
Other assets | — | 106 | |||||||||||
Total deferred assets | 41 | 603 | |||||||||||
Deferred liabilities | |||||||||||||
Unrealized net capital gains | (81,841 | ) | (131,011 | ) | |||||||||
Difference in tax bases of investments | (40,544 | ) | (39,939 | ) | |||||||||
DAC | (25,395 | ) | (26,185 | ) | |||||||||
Life and annuity reserves | (21,051 | ) | (4,445 | ) | |||||||||
Cumulative translation adjustment | (143 | ) | — | ||||||||||
Other liabilities | (4,408 | ) | (5,078 | ) | |||||||||
Total deferred liabilities | (173,382 | ) | (206,658 | ) | |||||||||
Net deferred liability | $ | (173,341 | ) | $ | (206,055 | ) | |||||||
Components of Income Tax Expense | ' | ||||||||||||
The components of income tax expense for the years ended December 31 are as follows: | |||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | ||||||||||
Current | $ | 6,463 | $ | 7,286 | $ | 1,036 | |||||||
Deferred | 15,998 | 20,260 | 36,326 | ||||||||||
Total income tax expense | $ | 22,461 | $ | 27,546 | $ | 37,362 | |||||||
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate | ' | ||||||||||||
A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State income tax expense | 2.3 | 1.7 | 1.2 | ||||||||||
Other | (1.5 | ) | (1.2 | ) | (1.0 | ) | |||||||
Effective income tax rate | 35.8 | % | 35.5 | % | 35.2 | % | |||||||
Other_Comprehensive_Income_Tab
Other Comprehensive Income (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis | ' | ||||||||||||
The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows: | |||||||||||||
2013 | |||||||||||||
($ in thousands) | Pre-tax | Tax | After-tax | ||||||||||
Unrealized net holding losses arising during the period, net of related offsets | $ | (112,511 | ) | $ | 39,379 | $ | (73,132 | ) | |||||
Less: reclassification adjustment of realized capital gains and losses | 27,975 | (9,791 | ) | 18,184 | |||||||||
Unrealized net capital gains and losses | (140,486 | ) | 49,170 | (91,316 | ) | ||||||||
Unrealized foreign currency translation adjustments | 1,312 | (459 | ) | 853 | |||||||||
Other comprehensive loss | $ | (139,174 | ) | $ | 48,711 | $ | (90,463 | ) | |||||
2012 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period, net of related offsets | $ | 75,239 | $ | (26,333 | ) | $ | 48,906 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 431 | (151 | ) | 280 | |||||||||
Unrealized net capital gains and losses | 74,808 | (26,182 | ) | 48,626 | |||||||||
Unrealized foreign currency translation adjustments | (642 | ) | 225 | (417 | ) | ||||||||
Other comprehensive income | $ | 74,166 | $ | (25,957 | ) | $ | 48,209 | ||||||
2011 | |||||||||||||
Pre-tax | Tax | After-tax | |||||||||||
Unrealized net holding gains arising during the period, net of related offsets | $ | 110,583 | $ | (38,704 | ) | $ | 71,879 | ||||||
Less: reclassification adjustment of realized capital gains and losses | 28,264 | (9,892 | ) | 18,372 | |||||||||
Unrealized net capital gains and losses | 82,319 | (28,812 | ) | 53,507 | |||||||||
Unrealized foreign currency translation adjustments | (262 | ) | 92 | (170 | ) | ||||||||
Other comprehensive income | $ | 82,057 | $ | (28,720 | ) | $ | 53,337 | ||||||
Summary_of_Premiums_and_Contra
Summary of Premiums and Contract Charges by Product (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Product Information [Line Items] | ' | ' | ' |
Premiums | $55,789 | $38,037 | $43,806 |
Contract charges | 73,138 | 55,688 | 54,845 |
Total premiums and contract charges | 128,927 | 93,725 | 98,651 |
Traditional life insurance | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' |
Premiums | 38,618 | 19,828 | 20,728 |
Immediate annuities with life contingencies | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' |
Premiums | 4,349 | 6,653 | 12,434 |
Accident and health insurance | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' |
Premiums | 12,822 | 11,556 | 10,644 |
Interest-sensitive life insurance | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' |
Contract charges | 72,740 | 54,357 | 52,228 |
Fixed annuities | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' |
Contract charges | $398 | $1,331 | $2,617 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Cash collateral for securities loaned as percentage of fair value | 102.00% |
Minimum | ' |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Amortization period of deferred acquisition costs | '15 years |
Maximum | ' |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Amortization period of deferred acquisition costs | '30 years |
Interest-sensitive life insurance | Minimum | ' |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Amortization period of deferred acquisition costs | '10 years |
Interest-sensitive life insurance | Maximum | ' |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Amortization period of deferred acquisition costs | '20 years |
Fixed annuities | Minimum | ' |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Amortization period of deferred acquisition costs | '5 years |
Fixed annuities | Maximum | ' |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' |
Amortization period of deferred acquisition costs | '10 years |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Supplemental Cash Flow Information [Line Items] | ' | ' | ' | ' |
Non-cash modifications of certain mortgage loans and fixed income securities | $5,000,000 | $12,000,000 | $20,700,000 | ' |
Liabilities for collateral received in conjunction with the securities lending program | 62,610,000 | 59,772,000 | 61,097,000 | 127,983,000 |
Mortgage loans sold to affiliate for notes receivable | ' | ' | 5,900,000 | ' |
Retained income | ' | ' | ' | ' |
Supplemental Cash Flow Information [Line Items] | ' | ' | ' | ' |
Forgiveness of payable due to an affiliate | ' | ' | $351,000 | ' |
Schedule_of_Supplemental_Cash_
Schedule of Supplemental Cash Flow Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net change in proceeds managed | ' | ' | ' |
Net change in short-term investments | ($2,838) | $1,325 | $66,886 |
Operating cash flow (used) provided | -2,838 | 1,325 | 66,886 |
Net change in liabilities | ' | ' | ' |
Liabilities for collateral, beginning of year | -59,772 | -61,097 | -127,983 |
Liabilities for collateral, end of year | -62,610 | -59,772 | -61,097 |
Operating cash flow provided (used) | $2,838 | ($1,325) | ($66,886) |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | Nov. 30, 2010 | Mar. 31, 2010 | Sep. 30, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating expenses, including compensation, allocated by Allstate Insurance Company | ' | ' | ' | ' | ' | ' | $54,200,000 | $51,400,000 | $46,500,000 | ' | ' |
Premium revenue | ' | ' | ' | ' | ' | ' | 55,789,000 | 38,037,000 | 43,806,000 | ' | ' |
Reserve for annuities issued | ' | ' | ' | ' | ' | ' | 2,151,316,000 | 2,310,881,000 | ' | ' | ' |
Ceded premium related to structured settlement annuities | ' | ' | ' | ' | ' | ' | 15,510,000 | 32,920,000 | 30,271,000 | ' | ' |
Carrying value of structured settlement reinsurance treaty | ' | ' | ' | ' | ' | ' | 514,500,000 | 570,400,000 | ' | ' | ' |
Maximum amount of loans Corporation will have outstanding to all eligible subsidiaries at any given point in time | ' | ' | ' | ' | ' | ' | 1,000,000,000 | ' | ' | ' | ' |
Net investment income from notes receivables | ' | ' | ' | ' | ' | ' | 337,496,000 | 358,811,000 | 366,533,000 | ' | ' |
Retained income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forgiveness of payable due to an affiliate | ' | ' | ' | ' | ' | ' | ' | ' | 351,000 | ' | ' |
Allstate Insurance Company ("AIC") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserve for annuities issued | ' | ' | ' | ' | ' | ' | 2,080,000,000 | 2,100,000,000 | ' | ' | ' |
Allstate Insurance Company ("AIC") | Life contingent structured settlement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Structured settlement annuities issued | ' | ' | ' | ' | ' | ' | 900,000 | 5,900,000 | 8,000,000 | ' | ' |
Premium revenue | ' | ' | ' | ' | ' | ' | 89,000 | 1,300,000 | ' | ' | ' |
Allstate Distributors Services, LLC | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Broker-Dealer agreement, Promotion and marketing expense | ' | ' | ' | ' | ' | ' | 14,000 | 27,000 | 1,100,000 | ' | ' |
Allstate Financial Services, LLC | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Broker-Dealer agreement, Commission and other distribution expenses | ' | ' | ' | ' | ' | ' | 246,000 | 316,000 | 277,000 | ' | ' |
Allstate Life Insurance Company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ceded premium related to structured settlement annuities | ' | ' | ' | ' | ' | ' | 3,500,000 | 3,500,000 | 3,500,000 | ' | ' |
Carrying value of structured settlement reinsurance treaty | ' | ' | ' | ' | ' | ' | 27,800,000 | 34,700,000 | ' | ' | ' |
Road Bay Investments , LLC ("RBI") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum amount of mortgage loans to be sold to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 |
Note receivable related to mortgage loan sold | 3,000,000 | 2,800,000 | 3,500,000 | 2,700,000 | 13,700,000 | 8,300,000 | 0 | 2,800,000 | ' | 3,500,000 | ' |
Mortgage loans fair value on date of sale | 3,000,000 | 2,800,000 | 3,500,000 | 2,700,000 | 13,700,000 | 8,300,000 | ' | ' | ' | 3,500,000 | ' |
Related party transaction , interest rate | 5.75% | 5.80% | 6.50% | 7.50% | 7.00% | 7.00% | ' | ' | ' | ' | ' |
Related party transaction ,note due date | 19-Apr-18 | 9-Mar-18 | 14-Dec-17 | 18-Nov-17 | 26-Mar-17 | 25-Sep-16 | ' | ' | ' | ' | ' |
Proceed from note receivable | ' | ' | ' | ' | ' | ' | ' | 2,800,000 | 1,100,000 | 9,800,000 | ' |
Net investment income from notes receivables | ' | ' | ' | ' | ' | ' | $65,000 | $220,000 | $679,000 | ' | ' |
Schedule_for_Fixed_Income_Secu
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | $5,225,701 | $5,411,880 |
Fair value | 5,602,738 | 6,139,925 |
U.S. government and agencies | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 237,510 | 333,787 |
Gross unrealized gains | 57,321 | 83,260 |
Fair value | 294,831 | 417,047 |
Municipal | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 677,780 | 704,032 |
Gross unrealized gains | 58,068 | 123,669 |
Gross unrealized losses | -9,864 | -9,040 |
Fair value | 725,984 | 818,661 |
Corporate | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 3,572,713 | 3,482,420 |
Gross unrealized gains | 236,627 | 423,330 |
Gross unrealized losses | -43,751 | -7,224 |
Fair value | 3,765,589 | 3,898,526 |
Foreign government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 320,327 | 303,649 |
Gross unrealized gains | 62,266 | 92,986 |
Gross unrealized losses | -977 | -94 |
Fair value | 381,616 | 396,541 |
Residential mortgage-backed securities ("RMBS") | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 154,242 | 284,885 |
Gross unrealized gains | 5,817 | 11,708 |
Gross unrealized losses | -140 | -915 |
Fair value | 159,919 | 295,678 |
Commercial mortgage-backed securities ("CMBS") | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 166,927 | 195,605 |
Gross unrealized gains | 9,091 | 11,871 |
Gross unrealized losses | -38 | -6,760 |
Fair value | 175,980 | 200,716 |
Asset-backed securities ("ABS") | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 87,176 | 98,415 |
Gross unrealized gains | 2,260 | 4,652 |
Gross unrealized losses | -929 | -941 |
Fair value | 88,507 | 102,126 |
Redeemable preferred stock | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 9,026 | 9,087 |
Gross unrealized gains | 1,286 | 1,543 |
Fair value | 10,312 | 10,630 |
Fixed income securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized cost | 5,225,701 | 5,411,880 |
Gross unrealized gains | 432,736 | 753,019 |
Gross unrealized losses | -55,699 | -24,974 |
Fair value | $5,602,738 | $6,139,925 |
Schedule_for_Fixed_Income_Secu1
Schedule for Fixed Income Securities Based on Contractual Maturities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Amortized cost | ' | ' |
Due in one year or less | $237,779 | ' |
Due after one year through five years | 1,231,218 | ' |
Due after five years through ten years | 1,886,134 | ' |
Due after ten years | 1,462,225 | ' |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis, Total | 4,817,356 | ' |
RMBS, CMBS and ABS | 408,345 | ' |
Total | 5,225,701 | ' |
Fair value | ' | ' |
Due in one year or less | 243,799 | ' |
Due after one year through five years | 1,354,142 | ' |
Due after five years through ten years | 1,986,043 | ' |
Due after ten years | 1,594,348 | ' |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Total | 5,178,332 | ' |
ABS, RMBS and CMBS | 424,406 | ' |
Fair value | $5,602,738 | $6,139,925 |
Schedule_of_Net_Investment_Inc
Schedule of Net Investment Income (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | $337,496 | $358,811 | $366,533 | |||
Investment expense | -12,379 | -12,616 | -10,264 | |||
Net investment income | 325,117 | 346,195 | 356,269 | |||
Fixed income securities | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | 289,571 | 305,849 | 326,000 | |||
Mortgage loans | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | 31,375 | 32,882 | 30,726 | |||
Equity securities | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | 4,870 | 3,589 | 2,818 | |||
Limited partnership interests | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | 8,862 | [1] | 13,316 | [1] | 3,157 | [1] |
Short-term | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | 210 | 355 | 525 | |||
Policy loans | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | 2,543 | 2,600 | 2,628 | |||
Other | ' | ' | ' | |||
Net Investment Income [Line Items] | ' | ' | ' | |||
Investment income, before expense | $65 | $220 | $679 | |||
[1] | Income from EMA limited partnerships is reported in net investment income in 2013 and 2012 and realized capital gains and losses in 2011. |
Schedule_of_Realized_Capital_G
Schedule of Realized Capital Gains and Losses by Asset Type (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | $14,911 | $17,743 | $42,907 | |||
Fixed income securities | ' | ' | ' | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | -1,537 | 2,545 | 10,600 | |||
Mortgage loans | ' | ' | ' | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | -1,507 | 1,452 | -1,119 | |||
Equity securities | ' | ' | ' | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | 27,944 | ' | 9,575 | |||
Limited partnership interests | ' | ' | ' | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | -40 | [1] | -221 | [1] | 8,752 | [1] |
Derivative instruments | ' | ' | ' | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | -9,949 | 13,967 | 15,096 | |||
Short-term investments | ' | ' | ' | |||
Gain (Loss) on Investments [Line Items] | ' | ' | ' | |||
Realized capital gains and losses | ' | ' | $3 | |||
[1] | Income from EMA limited partnerships is reported in net investment income in 2013 and 2012 and realized capital gains and losses in 2011. |
Schedule_of_Realized_Capital_G1
Schedule of Realized Capital Gains and Losses by Transaction Type (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Impairment write-downs | ($3,431) | ($5,144) | ($18,129) |
Change in intent write-downs | -5,515 | -310 | -1,449 |
Net other-than-temporary impairment losses recognized in earnings | -8,946 | -5,454 | -19,578 |
Sales | 33,806 | 9,230 | 38,631 |
Valuation of derivative instruments | -9,965 | 13,966 | 16,552 |
Settlements of derivative instruments | 16 | 1 | -1,456 |
EMA limited partnership income | ' | ' | 8,758 |
Realized capital gains and losses | $14,911 | $17,743 | $42,907 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Net unrealized gains related to changes in valuation of fixed income securities subsequent to impairment measurement date | $299,000 | $268,000 | ' | ' |
Unrealized losses related to securities with unrealized loss position less than 20% of amortized cost or cost | 49,600,000 | ' | ' | ' |
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of amortized cost or cost | 6,100,000 | ' | ' | ' |
Limited partnership interests | 116,480,000 | 99,820,000 | ' | ' |
Write-downs of limited partnership | 12,410,000 | 2,195,000 | 21,804,000 | ' |
Commercial mortgage loans, net of valuation allowance | 514,500,000 | 570,400,000 | ' | ' |
Total impaired mortgage loans | 12,200,000 | ' | ' | ' |
Valuation allowance on impaired mortgage loans | 1,832,000 | ' | 637,000 | 1,670,000 |
Average balance impaired mortgage loans | 7,600,000 | 1,200,000 | 4,400,000 | ' |
Interest income on collateral, net of fees | 0 | 0 | 0 | ' |
Debt securities | 5,602,738,000 | 6,139,925,000 | ' | ' |
Cost-method limited partnership interests | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Limited partnership interests | 41,400,000 | 29,700,000 | ' | ' |
Write-downs of limited partnership | ' | ' | ' | ' |
EMA limited partnerships | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Limited partnership interests | 75,100,000 | 70,100,000 | ' | ' |
Write-downs of limited partnership | ' | ' | ' | ' |
Fixed income securities | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gross gains realized on sales of fixed income securities | 7,600,000 | 22,100,000 | 29,900,000 | ' |
Gross losses realized on sales of fixed income securities | 2,500,000 | 16,000,000 | 10,700,000 | ' |
Write-downs of limited partnership | 10,091,000 | 2,832,000 | 20,162,000 | ' |
Fixed income securities on loan | 60,700,000 | 57,900,000 | ' | ' |
Debt securities | 5,602,738,000 | 6,139,925,000 | ' | ' |
Fixed income securities | Non Income Producing Investments | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Debt securities | ' | ' | ' | ' |
Investment grade fixed income securities | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Unrealized losses related to securities with unrealized loss position less than 20% of amortized cost or cost | 42,500,000 | ' | ' | ' |
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of amortized cost or cost | 4,700,000 | ' | ' | ' |
Below investment grade fixed income securities | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of amortized cost or cost | 1,400,000 | ' | ' | ' |
Debt securities | 285,700,000 | 288,100,000 | ' | ' |
Fixed income securities and short-term investments | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Assets on deposit with regulatory authorities | 2,600,000 | ' | ' | ' |
Residential mortgage-backed securities ("RMBS") | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities, not included in earnings | 41,000 | 58,000 | ' | ' |
Write-downs of limited partnership | -28,000 | 531,000 | 2,210,000 | ' |
Debt securities | $159,919,000 | $295,678,000 | ' | ' |
Schedule_of_OtherThanTemporary
Schedule of Other-Than-Temporary Impairment Losses by Asset Type (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | ($12,410) | ($2,195) | ($21,804) |
Included in OCI | 3,464 | -3,259 | 2,226 |
Net | -8,946 | -5,454 | -19,578 |
Municipal | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | -1,727 | ' | -406 |
Net | -1,727 | ' | -406 |
Corporate | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | ' | -2,301 | -5,259 |
Included in OCI | ' | -476 | 1,567 |
Net | ' | -2,777 | -3,692 |
Residential mortgage-backed securities ("RMBS") | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | 28 | -531 | -2,210 |
Included in OCI | ' | -360 | 91 |
Net | 28 | -891 | -2,119 |
Commercial mortgage-backed securities ("CMBS") | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | -8,392 | ' | -12,287 |
Included in OCI | 3,464 | -2,423 | 568 |
Net | -4,928 | -2,423 | -11,719 |
Fixed income securities | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | -10,091 | -2,832 | -20,162 |
Included in OCI | 3,464 | -3,259 | 2,226 |
Net | -6,627 | -6,091 | -17,936 |
Mortgage loans | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | -1,832 | 637 | -1,642 |
Net | -1,832 | 637 | -1,642 |
Equity securities | ' | ' | ' |
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ' | ' | ' |
Gross | -487 | ' | ' |
Net | ($487) | ' | ' |
Schedule_of_Rollforwards_of_Cu
Schedule of Rollforwards of Cumulative Credit Losses Recognized in Earnings for Fixed Income Securities Held (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Other than Temporary Impairments [Line Items] | ' | ' | ' |
Beginning balance | ($1,685) | ($11,503) | ($24,172) |
Additional credit loss for securities previously other-than-temporarily impaired | 29 | -4,796 | -4,387 |
Additional credit loss for securities not previously other-than-temporarily impaired | -1,628 | -985 | -12,100 |
Reduction in credit loss for securities disposed or collected | 960 | 15,599 | 28,304 |
Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell | 1,628 | ' | 7 |
Change in credit loss due to accretion of increase in cash flows | ' | ' | 845 |
Ending balance | ($696) | ($1,685) | ($11,503) |
Schedule_of_Unrealized_Net_Cap
Schedule of Unrealized Net Capital Gains and Losses (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Fair value | ' | ' | |
Fixed income securities | $5,602,738 | $6,139,925 | |
Equity securities | 202,622 | 164,971 | |
Short-term investments | 98,553 | 61,948 | |
Gross unrealized Gains | ' | ' | |
Fixed income securities | 432,736 | 753,019 | |
Equity securities | 38,978 | 31,555 | |
Short-term investments | 1 | 1 | |
Gross unrealized Losses | ' | ' | |
Fixed income securities | -55,699 | -24,974 | |
Equity securities | -5 | -317 | |
Short-term investments | -1 | ' | |
Unrealized net gains (losses) | ' | ' | |
Fixed income securities | 377,037 | 728,045 | |
Equity securities | 38,973 | 31,238 | |
Short-term investments | ' | 1 | |
EMA limited partnerships | ' | 127 | |
Unrealized net capital gains and losses, pre-tax | 416,010 | 759,411 | |
Amounts recognized for: | ' | ' | |
Insurance reserves | -168,267 | [1] | -360,887 |
DAC and DSI | -13,911 | [2] | -24,206 |
Amounts recognized | -182,178 | -385,093 | |
Deferred income taxes | -81,841 | -131,011 | |
Total unrealized net capital gains and losses | $151,991 | $243,307 | |
[1] | The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. | ||
[2] | The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. |
Schedule_of_Change_in_Unrealiz
Schedule of Change in Unrealized net Capital Gains and Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | ($343,401) | $174,028 | $260,356 |
Amounts recognized for: | ' | ' | ' |
Insurance reserves | 192,620 | -90,058 | -167,226 |
DAC and DSI | 10,295 | -9,162 | -10,811 |
Amounts recognized | 202,915 | -99,220 | -178,037 |
Deferred income taxes | 49,170 | -26,182 | -28,812 |
(Decrease) increase in unrealized net capital gains and losses, after-tax | -91,316 | 48,626 | 53,507 |
EMA limited partnerships | ' | ' | ' |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | -127 | 97 | 30 |
Fixed income securities | ' | ' | ' |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | -351,008 | 163,066 | 265,163 |
Equity securities | ' | ' | ' |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | 7,735 | 10,861 | -4,834 |
Short-term investments | ' | ' | ' |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Change in unrealized net capital gains and losses | ($1) | $4 | ($3) |
Summary_of_Gross_Unrealized_Lo
Summary of Gross Unrealized Losses and Fair Value of Fixed Income and Equity Securities by Length of Time (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Securities | Securities | |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 233 | 33 |
Fair value, continuous unrealized loss position for less than 12 months | $891,195 | $153,348 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -40,485 | -2,485 |
Number of issues, continuous unrealized loss position for 12 months or more | 24 | 30 |
Fair value, continuous unrealized loss position for 12 months or more | 121,360 | 153,266 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -15,219 | -22,806 |
Total unrealized losses | -55,704 | -25,291 |
Municipal | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 15 | ' |
Fair value, continuous unrealized loss position for less than 12 months | 74,713 | ' |
Unrealized losses, continuous unrealized loss position for less than 12 months | -5,180 | ' |
Number of issues, continuous unrealized loss position for 12 months or more | 1 | 6 |
Fair value, continuous unrealized loss position for 12 months or more | 14,663 | 45,374 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -4,684 | -9,040 |
Total unrealized losses | -9,864 | -9,040 |
Corporate | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 209 | 27 |
Fair value, continuous unrealized loss position for less than 12 months | 805,236 | 116,512 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -35,258 | -2,068 |
Number of issues, continuous unrealized loss position for 12 months or more | 16 | 13 |
Fair value, continuous unrealized loss position for 12 months or more | 72,904 | 54,442 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -8,493 | -5,156 |
Total unrealized losses | -43,751 | -7,224 |
Foreign government | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | ' | 1 |
Fair value, continuous unrealized loss position for less than 12 months | ' | 9,854 |
Unrealized losses, continuous unrealized loss position for less than 12 months | ' | -94 |
Number of issues, continuous unrealized loss position for 12 months or more | 1 | ' |
Fair value, continuous unrealized loss position for 12 months or more | 8,976 | ' |
Unrealized losses, continuous unrealized loss position for 12 months or more | -977 | ' |
Total unrealized losses | -977 | -94 |
Residential mortgage-backed securities ("RMBS") | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | ' | 2 |
Fair value, continuous unrealized loss position for less than 12 months | ' | 33 |
Number of issues, continuous unrealized loss position for 12 months or more | 5 | 4 |
Fair value, continuous unrealized loss position for 12 months or more | 15,742 | 19,497 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -140 | -915 |
Total unrealized losses | -140 | -915 |
Commercial mortgage-backed securities ("CMBS") | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 3 | 1 |
Fair value, continuous unrealized loss position for less than 12 months | 5,533 | 1,995 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -38 | -6 |
Number of issues, continuous unrealized loss position for 12 months or more | ' | 5 |
Fair value, continuous unrealized loss position for 12 months or more | ' | 21,115 |
Unrealized losses, continuous unrealized loss position for 12 months or more | ' | -6,754 |
Total unrealized losses | -38 | -6,760 |
Asset-backed securities ("ABS") | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 1 | ' |
Fair value, continuous unrealized loss position for less than 12 months | 5,076 | ' |
Unrealized losses, continuous unrealized loss position for less than 12 months | -4 | ' |
Number of issues, continuous unrealized loss position for 12 months or more | 1 | 2 |
Fair value, continuous unrealized loss position for 12 months or more | 9,075 | 12,838 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -925 | -941 |
Total unrealized losses | -929 | -941 |
Fixed income securities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 228 | 31 |
Fair value, continuous unrealized loss position for less than 12 months | 890,558 | 128,394 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -40,480 | -2,168 |
Number of issues, continuous unrealized loss position for 12 months or more | 24 | 30 |
Fair value, continuous unrealized loss position for 12 months or more | 121,360 | 153,266 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -15,219 | -22,806 |
Total unrealized losses | -55,699 | -24,974 |
Equity securities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 5 | 2 |
Fair value, continuous unrealized loss position for less than 12 months | 637 | 24,954 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -5 | -317 |
Total unrealized losses | -5 | -317 |
Investment grade fixed income securities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 175 | 23 |
Fair value, continuous unrealized loss position for less than 12 months | 851,728 | 107,042 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -37,398 | -1,359 |
Number of issues, continuous unrealized loss position for 12 months or more | 10 | 17 |
Fair value, continuous unrealized loss position for 12 months or more | 66,380 | 99,235 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -9,785 | -11,525 |
Total unrealized losses | -47,183 | -12,884 |
Below investment grade fixed income securities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Number of issues, continuous unrealized loss position for less than 12 months | 53 | 8 |
Fair value, continuous unrealized loss position for less than 12 months | 38,830 | 21,352 |
Unrealized losses, continuous unrealized loss position for less than 12 months | -3,082 | -809 |
Number of issues, continuous unrealized loss position for 12 months or more | 14 | 13 |
Fair value, continuous unrealized loss position for 12 months or more | 54,980 | 54,031 |
Unrealized losses, continuous unrealized loss position for 12 months or more | -5,434 | -11,281 |
Total unrealized losses | ($8,516) | ($12,090) |
Schedule_of_Commercial_Mortgag
Schedule of Commercial Mortgage Loans by Geographic Distribution (Detail) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
California | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 25.60% | 24.30% |
Illinois | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 13.00% | 11.50% |
New Jersey | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 8.80% | 7.40% |
Texas | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 5.50% | 8.90% |
Arizona | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 5.30% | 5.70% |
Ohio | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 4.90% | 5.60% |
Florida | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 4.50% | 5.30% |
Schedule_of_Types_of_Propertie
Schedule of Types of Properties Collateralizing Commercial Mortgage Loans (Detail) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
Warehouse | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 26.60% | 28.30% |
Retail | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 23.30% | 19.90% |
Office buildings | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 20.20% | 22.60% |
Apartment complex | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 20.10% | 21.40% |
Other | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Percentage of mortgage loan portfolio carrying value | 9.80% | 7.80% |
Schedule_of_Contractual_Maturi
Schedule of Contractual Maturities of Mortgage Loans (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Loan | ||
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Number of loans | 95 | ' |
Carrying value, maturing in 2013 | $21,756 | ' |
Carrying value, maturing in 2014 | 90,513 | ' |
Carrying value, maturing in 2015 | 58,694 | ' |
Carrying value, maturing in 2016 | 42,992 | ' |
Carrying value, maturing thereafter | 300,534 | ' |
Carrying value, total | $514,489 | $570,365 |
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
2014 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Number of loans | 5 | ' |
Percentage of mortgage loan portfolio carrying value | 4.20% | ' |
2015 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Number of loans | 16 | ' |
Percentage of mortgage loan portfolio carrying value | 17.60% | ' |
2016 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Number of loans | 12 | ' |
Percentage of mortgage loan portfolio carrying value | 11.40% | ' |
2017 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Number of loans | 8 | ' |
Percentage of mortgage loan portfolio carrying value | 8.40% | ' |
Thereafter | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Number of loans | 54 | ' |
Percentage of mortgage loan portfolio carrying value | 58.40% | ' |
Summary_of_Carrying_Value_of_N
Summary of Carrying Value of Non-Impaired Fixed and Variable Rate Mortgage Loans by Debt Service Coverage Ration Distribution (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Total | $514,489 | $570,365 |
Non-impaired mortgage loans | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Total | 502,264 | 570,365 |
Below 1.0 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Total | 25,086 | 27,383 |
1.0 - 1.25 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Total | 68,687 | 99,713 |
1.26 - 1.50 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Total | 155,452 | 150,877 |
Above 1.50 | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Total | $253,039 | $292,392 |
Schedule_of_Rollforward_of_Val
Schedule of Rollforward of Valuation Allowance on Impaired Mortgage Loans (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ' | ' | ' |
Beginning balance | ' | $637 | $1,670 |
Net (decrease) increase in valuation allowance | 1,832 | -637 | 1,642 |
Charge offs | ' | ' | -2,675 |
Ending balance | $1,832 | ' | $637 |
Schedule_of_Municipal_Bonds_He
Schedule of Municipal Bonds Held For Investment by Geographic Distribution (Detail) | Dec. 31, 2013 | Dec. 31, 2012 |
California | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Percentage of municipal bond portfolio carrying value | 22.90% | 21.30% |
Texas | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Percentage of municipal bond portfolio carrying value | 11.10% | 12.00% |
Illinois | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Percentage of municipal bond portfolio carrying value | 5.90% | 6.00% |
OREGON | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Percentage of municipal bond portfolio carrying value | 5.20% | 4.90% |
Summary_of_Assets_and_Liabilit
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | ' |
Fixed income securities | $5,602,738 | $6,139,925 | ' |
Equity securities | 202,622 | 164,971 | ' |
Short-term investments | 98,553 | 61,948 | ' |
Other investments: | ' | ' | ' |
Free-standing derivatives | 1,076 | 306 | ' |
Separate account assets | 435,446 | 436,380 | ' |
Other assets | 27,826 | 34,655 | ' |
Total assets at fair value | 6,368,261 | 6,838,185 | ' |
% of total assets at fair value | 100.00% | 100.00% | ' |
Contractholder funds: | ' | ' | ' |
Derivatives embedded in life and annuity contracts | -9,197 | -17,877 | ' |
Total liabilities at fair value | -9,197 | -17,877 | ' |
% of total liabilities at fair value | 100.00% | 100.00% | ' |
U.S. government and agencies | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 294,831 | 417,047 | ' |
Municipal | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 725,984 | 818,661 | ' |
Corporate | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 3,765,589 | 3,898,526 | ' |
Foreign government | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 381,616 | 396,541 | ' |
Residential mortgage-backed securities ("RMBS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 159,919 | 295,678 | ' |
Commercial mortgage-backed securities ("CMBS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 175,980 | 200,716 | ' |
Asset-backed securities ("ABS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 88,507 | 102,126 | ' |
Redeemable preferred stock | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 10,312 | 10,630 | ' |
Quoted prices in active markets for identical assets (Level 1) | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 3,678 | 111,133 | ' |
Equity securities | 202,622 | 164,971 | ' |
Short-term investments | 3,157 | 7,675 | ' |
Other investments: | ' | ' | ' |
Separate account assets | 435,446 | 436,380 | ' |
Total assets at fair value | 644,903 | 720,159 | ' |
% of total assets at fair value | 10.10% | 10.50% | ' |
Quoted prices in active markets for identical assets (Level 1) | U.S. government and agencies | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 3,678 | 111,133 | ' |
Significant other observable inputs (Level 2) | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 5,263,518 | 5,673,799 | ' |
Short-term investments | 95,396 | 54,273 | ' |
Other investments: | ' | ' | ' |
Total assets at fair value | 5,358,914 | 5,728,072 | ' |
% of total assets at fair value | 84.20% | 83.80% | ' |
Significant other observable inputs (Level 2) | U.S. government and agencies | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 291,153 | 305,914 | ' |
Significant other observable inputs (Level 2) | Municipal | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 674,669 | 750,989 | ' |
Significant other observable inputs (Level 2) | Corporate | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 3,506,161 | 3,638,175 | ' |
Significant other observable inputs (Level 2) | Foreign government | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 381,616 | 396,541 | ' |
Significant other observable inputs (Level 2) | Residential mortgage-backed securities ("RMBS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 159,919 | 295,678 | ' |
Significant other observable inputs (Level 2) | Commercial mortgage-backed securities ("CMBS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 175,980 | 200,716 | ' |
Significant other observable inputs (Level 2) | Asset-backed securities ("ABS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 63,708 | 75,156 | ' |
Significant other observable inputs (Level 2) | Redeemable preferred stock | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 10,312 | 10,630 | ' |
Significant unobservable inputs (Level 3) | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 335,542 | 354,993 | ' |
Other investments: | ' | ' | ' |
Free-standing derivatives | 1,076 | 306 | 38 |
Other assets | 27,826 | 34,655 | ' |
Total assets at fair value | 364,444 | 389,954 | ' |
% of total assets at fair value | 5.70% | 5.70% | ' |
Contractholder funds: | ' | ' | ' |
Derivatives embedded in life and annuity contracts | -9,197 | -17,877 | ' |
Total liabilities at fair value | -9,197 | -17,877 | ' |
% of total liabilities at fair value | 100.00% | 100.00% | ' |
Significant unobservable inputs (Level 3) | Municipal | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 51,315 | 67,672 | ' |
Significant unobservable inputs (Level 3) | Corporate | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | 259,428 | 260,351 | ' |
Significant unobservable inputs (Level 3) | Asset-backed securities ("ABS") | ' | ' | ' |
Assets | ' | ' | ' |
Fixed income securities | $24,799 | $26,970 | ' |
Summary_of_Quantitative_Inform
Summary of Quantitative Information About Significant Unobservable Inputs Used in Level Three Fair Value Measurements (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Fair value | 6,368,261 | 6,838,185 |
Structured settlement annuity reinsurance agreement | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Fair value | 27,826 | 34,655 |
Structured settlement annuity reinsurance agreement | Weighted average | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Ultimate reinvestment spreads | 1.58% | 1.56% |
Structured settlement annuity reinsurance agreement | Minimum | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Ultimate reinvestment spreads | 1.34% | 1.34% |
Structured settlement annuity reinsurance agreement | Maximum | Stochastic cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Ultimate reinvestment spreads | 1.98% | 1.96% |
ARS backed by student loans | Discounted cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Fair value | 19,149 | 31,429 |
ARS backed by student loans | Minimum | Discounted cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Anticipated date liquidity will return to the market (in months) | '36 months | '36 months |
ARS backed by student loans | Minimum | Weighted average | Discounted cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Anticipated date liquidity will return to the market (in months) | '39 months | '38 months |
ARS backed by student loans | Maximum | Discounted cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Anticipated date liquidity will return to the market (in months) | '54 months | '60 months |
ARS backed by student loans | Maximum | Weighted average | Discounted cash flow model | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Anticipated date liquidity will return to the market (in months) | '51 months | '50 months |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' | ' |
Fixed income securities | $5,602,738,000 | $6,139,925,000 | ' |
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date, included in earnings | 7,500,000 | 26,500,000 | 24,100,000 |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | -1,223,000 | 22,473,000 | 28,369,000 |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in interest credited to contract holder funds | -297,000 | -142,000 | -156,000 |
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in life and annuity contract benefits | 9,000,000 | 4,100,000 | -4,200,000 |
Capital Gain [Member] | ' | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' | ' |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | -7,900,000 | 16,300,000 | 16,500,000 |
Investment Income [Member] | ' | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' | ' |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | 6,700,000 | 6,200,000 | 11,900,000 |
Fixed income securities - non-binding broker quotes | ' | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' | ' |
Fixed income securities | $308,900,000 | $310,100,000 | ' |
Schedule_of_Rollforward_of_Lev
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on Recurring Basis (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | $389,954 | $317,222 | $583,478 | |||
Level 3 assets, Total gains (losses) included in net income | 151 | [1] | 21,394 | [2] | 21,733 | [3] |
Level 3 assets, Total gains (losses) included in OCI | -6,551 | 17,974 | 23,227 | |||
Level 3 assets, Transfers into Level 3 | 9,663 | 71,205 | 16,260 | |||
Level 3 assets, Transfers out of Level 3 | -4,160 | -2,730 | -258,430 | |||
Level 3 liabilities, Balance at beginning of period | -17,877 | -21,854 | -17,544 | |||
Level 3 liabilities, Total gains (losses) included in net income | 8,680 | [1] | 3,977 | [2] | -4,310 | [3] |
Level 3 liabilities, Total gains (losses) included in OCI | ' | ' | ' | |||
Level 3 liabilities, Transfers into Level 3 | ' | ' | ' | |||
Level 3 liabilities, Transfers out of Level 3 | ' | ' | ' | |||
Level 3 assets, Purchases | 7,249 | 21,500 | 41,844 | |||
Level 3 assets, Sales | -25,682 | -22,929 | -92,981 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -6,180 | -33,682 | -17,909 | |||
Level 3 assets, Balance at end of period | 364,444 | 389,954 | 317,222 | |||
Level 3 liabilities, Purchases | ' | ' | ' | |||
Level 3 liabilities, Sales | ' | ' | ' | |||
Level 3 liabilities, Issues | ' | ' | ' | |||
Level 3 liabilities, Settlements | ' | ' | ' | |||
Level 3 liabilities, Balance at end of period | -9,197 | -17,877 | -21,854 | |||
Municipal | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 67,672 | 50,422 | 103,369 | |||
Level 3 assets, Total gains (losses) included in net income | -1,960 | [1] | 50 | [2] | 43 | [3] |
Level 3 assets, Total gains (losses) included in OCI | 2,614 | 3,082 | 1,054 | |||
Level 3 assets, Transfers into Level 3 | ' | 18,576 | 5,378 | |||
Level 3 assets, Transfers out of Level 3 | ' | ' | -7,892 | |||
Level 3 assets, Sales | -15,067 | -2,251 | -49,623 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -1,944 | -2,207 | -1,907 | |||
Level 3 assets, Balance at end of period | 51,315 | 67,672 | 50,422 | |||
Corporate | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 260,351 | 223,643 | 225,207 | |||
Level 3 assets, Total gains (losses) included in net income | 8,509 | [1] | 3,854 | [2] | 8,719 | [3] |
Level 3 assets, Total gains (losses) included in OCI | -8,214 | 11,224 | 4,191 | |||
Level 3 assets, Transfers into Level 3 | 9,663 | 52,629 | 10,882 | |||
Level 3 assets, Transfers out of Level 3 | -4,160 | ' | -37,097 | |||
Level 3 assets, Purchases | 6,910 | 18,029 | 24,978 | |||
Level 3 assets, Sales | -10,615 | -18,812 | -11,680 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -3,016 | -30,216 | -1,557 | |||
Level 3 assets, Balance at end of period | 259,428 | 260,351 | 223,643 | |||
Residential mortgage-backed securities ("RMBS") | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | ' | 2,730 | 80,063 | |||
Level 3 assets, Total gains (losses) included in net income | ' | ' | -1,066 | [3] | ||
Level 3 assets, Total gains (losses) included in OCI | ' | ' | 1,743 | |||
Level 3 assets, Transfers out of Level 3 | ' | -2,730 | -56,510 | |||
Level 3 assets, Sales | ' | ' | -8,582 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | ' | ' | -12,918 | |||
Level 3 assets, Balance at end of period | ' | ' | 2,730 | |||
Asset-backed securities ("ABS") | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 26,970 | 26,425 | 40,851 | |||
Level 3 assets, Total gains (losses) included in net income | ' | ' | 149 | [3] | ||
Level 3 assets, Total gains (losses) included in OCI | -951 | 3,668 | 252 | |||
Level 3 assets, Transfers out of Level 3 | ' | ' | -23,013 | |||
Level 3 assets, Purchases | ' | ' | 14,999 | |||
Level 3 assets, Sales | ' | -1,866 | -3,856 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -1,220 | -1,257 | -2,957 | |||
Level 3 assets, Balance at end of period | 24,799 | 26,970 | 26,425 | |||
Fixed income securities | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 354,993 | 303,220 | 591,359 | |||
Level 3 assets, Total gains (losses) included in net income | 6,549 | [1] | 3,904 | [2] | 3,147 | [3] |
Level 3 assets, Total gains (losses) included in OCI | -6,551 | 17,974 | 23,227 | |||
Level 3 assets, Transfers into Level 3 | 9,663 | 71,205 | 16,260 | |||
Level 3 assets, Transfers out of Level 3 | -4,160 | -2,730 | -258,430 | |||
Level 3 assets, Purchases | 6,910 | 18,029 | 39,977 | |||
Level 3 assets, Sales | -25,682 | -22,929 | -92,981 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | -6,180 | -33,680 | -19,339 | |||
Level 3 assets, Balance at end of period | 335,542 | 354,993 | 303,220 | |||
Free-standing derivatives, net | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 306 | -2,867 | [3] | -3,011 | ||
Level 3 assets, Total gains (losses) included in net income | 431 | [1] | -296 | [2] | -3,153 | [3] |
Level 3 assets, Purchases | 339 | 3,471 | 1,867 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Settlements | ' | -2 | 1,430 | |||
Level 3 assets, Balance at end of period | 1,076 | 306 | -2,867 | [3] | ||
Other assets | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | 34,655 | 16,869 | -4,870 | |||
Level 3 assets, Total gains (losses) included in net income | -6,829 | [1] | 17,786 | [2] | 21,739 | [3] |
Level 3 assets, Issues | ' | ' | ' | |||
Level 3 assets, Balance at end of period | 27,826 | 34,655 | 16,869 | |||
Commercial mortgage-backed securities ("CMBS") | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 assets, Balance at beginning of period | ' | ' | 141,869 | |||
Level 3 assets, Total gains (losses) included in net income | ' | ' | -4,698 | [3] | ||
Level 3 assets, Total gains (losses) included in OCI | ' | ' | 15,987 | |||
Level 3 assets, Transfers out of Level 3 | ' | ' | -133,918 | |||
Level 3 assets, Sales | ' | ' | -19,240 | |||
Level 3 assets, Issues | ' | ' | ' | |||
Derivatives embedded in life and annuity contracts | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Level 3 liabilities, Balance at beginning of period | -17,877 | -21,854 | -17,544 | |||
Level 3 liabilities, Total gains (losses) included in net income | 8,680 | [1] | 3,977 | [2] | -4,310 | [3] |
Level 3 liabilities, Total gains (losses) included in OCI | ' | ' | ' | |||
Level 3 liabilities, Transfers into Level 3 | ' | ' | ' | |||
Level 3 liabilities, Transfers out of Level 3 | ' | ' | ' | |||
Level 3 liabilities, Purchases | ' | ' | ' | |||
Level 3 liabilities, Sales | ' | ' | ' | |||
Level 3 liabilities, Issues | ' | ' | ' | |||
Level 3 liabilities, Settlements | ' | ' | ' | |||
Level 3 liabilities, Balance at end of period | ($9,197) | ($17,877) | ($21,854) | |||
[1] | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. | |||||
[2] | The effect to net income totals $25.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $14.3 million in realized capital gains and losses, $7.1 million in net investment income, $(142) thousand in interest credited to contractholder funds and $4.1 million in contract benefits. | |||||
[3] | The effect to net income totals $17.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $13.4 million in realized capital gains and losses, $8.3 million in net investment income, $(156) thousand in interest credited to contractholder funds and $(4.2) million in contract benefits. |
Schedule_of_Rollforward_of_Lev1
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on Recurring Basis (Parenthetical) (Detail) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Total realized and unrealized gains (losses) included in net income, recurring Level 3 assets and liabilities | $8,800,000 | $25,400,000 | $17,400,000 | |||
Effect to net income included in investment income | 151,000 | [1] | 21,394,000 | [2] | 21,733,000 | [3] |
Effect to net income included in interest credited to contract holder funds | -297,000 | -142,000 | -156,000 | |||
Effect to net income included in contract benefits | 9,000,000 | 4,100,000 | -4,200,000 | |||
Free-standing derivatives, assets | 1,076,000 | 306,000 | ' | |||
Significant unobservable inputs (Level 3) | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Free-standing derivatives, assets | 1,076,000 | 306,000 | 38,000 | |||
Free-standing derivatives, liabilities | ' | ' | 2,905,000 | |||
Capital Gain [Member] | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Effect to net income included in investment income | -6,600,000 | 14,300,000 | 13,400,000 | |||
Investment Income [Member] | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | |||
Effect to net income included in investment income | $6,700,000 | $7,100,000 | $8,300,000 | |||
[1] | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. | |||||
[2] | The effect to net income totals $25.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $14.3 million in realized capital gains and losses, $7.1 million in net investment income, $(142) thousand in interest credited to contractholder funds and $4.1 million in contract benefits. | |||||
[3] | The effect to net income totals $17.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $13.4 million in realized capital gains and losses, $8.3 million in net investment income, $(156) thousand in interest credited to contractholder funds and $(4.2) million in contract benefits. |
Schedule_of_Change_in_Unrealiz1
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | ($1,223) | $22,473 | $28,369 | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | 8,680 | [1] | 3,977 | [2] | -4,310 | [3] |
Municipal | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | -1,458 | 54 | 151 | |||
Corporate | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 6,633 | 4,912 | 8,193 | |||
Fixed income securities | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 5,175 | 4,966 | 8,344 | |||
Free-standing derivatives, net | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 431 | -279 | -1,714 | |||
Other assets | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | -6,829 | 17,786 | 21,739 | |||
Derivatives embedded in life and annuity contracts | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Unrealized Gains (Losses) [Line Items] | ' | ' | ' | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | $8,680 | $3,977 | ($4,310) | |||
[1] | The effect to net income totals $8.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $(6.6) million in realized capital gains and losses, $6.7 million in net investment income, $(297) thousand in interest credited to contractholder funds and $9.0 million in contract benefits. | |||||
[2] | The effect to net income totals $25.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $14.3 million in realized capital gains and losses, $7.1 million in net investment income, $(142) thousand in interest credited to contractholder funds and $4.1 million in contract benefits. | |||||
[3] | The effect to net income totals $17.4 million and is reported in the Statements of Operations and Comprehensive Income as follows: $13.4 million in realized capital gains and losses, $8.3 million in net investment income, $(156) thousand in interest credited to contractholder funds and $(4.2) million in contract benefits. |
Schedule_of_Carrying_Values_an
Schedule of Carrying Values and Fair Value Estimates of Financial Instruments not Carried at Fair Value (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Financial assets | ' | ' | ' | ' |
Mortgage loans | $514,489 | $570,365 | ' | ' |
Financial liabilities | ' | ' | ' | ' |
Liability for collateral | 62,610 | 59,772 | 61,097 | 127,983 |
Carrying value | ' | ' | ' | ' |
Financial assets | ' | ' | ' | ' |
Mortgage loans | 514,489 | 570,365 | ' | ' |
Cost method limited partnerships | 41,419 | 29,746 | ' | ' |
Notes due from related party | ' | 2,833 | ' | ' |
Financial liabilities | ' | ' | ' | ' |
Contractholder funds on investment contracts | 2,771,149 | 3,050,538 | ' | ' |
Liability for collateral | 62,610 | 59,772 | ' | ' |
Fair value | ' | ' | ' | ' |
Financial assets | ' | ' | ' | ' |
Mortgage loans | 534,241 | 602,516 | ' | ' |
Cost method limited partnerships | 44,401 | 30,920 | ' | ' |
Notes due from related party | ' | 2,833 | ' | ' |
Financial liabilities | ' | ' | ' | ' |
Contractholder funds on investment contracts | 2,912,758 | 3,222,131 | ' | ' |
Liability for collateral | $62,610 | $59,772 | ' | ' |
Summary_of_Volume_and_Fair_Val
Summary of Volume and Fair Value Positions of Derivative Instruments and Reporting Location in Statement of Financial Position (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Total asset derivatives, Fair value, net | $514,500 | $570,400 |
Total derivatives, Notional amount | 215,417 | 338,715 |
Total derivatives | 19,705 | 17,167 |
Derivatives not designated as accounting hedging instruments | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total asset derivatives, Notional amount | 40,142 | 153,400 |
Total asset derivatives, Fair value, net | 28,902 | 35,044 |
Asset derivatives, Gross asset | 28,902 | 35,044 |
Asset derivatives, Gross liability | ' | ' |
Total liability derivatives, Notional amount | 175,275 | 185,315 |
Total liability derivatives, Fair value, net | -9,197 | -17,877 |
Liability derivatives, Gross asset | ' | ' |
Liability derivatives, Gross liability | -9,197 | -17,877 |
Derivatives not designated as accounting hedging instruments | Interest rate cap agreement | Other investments | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total asset derivatives, Notional amount | 40,100 | 152,400 |
Total asset derivatives, Fair value, net | 1,076 | 306 |
Asset derivatives, Gross asset | 1,076 | 306 |
Asset derivatives, Gross liability | ' | ' |
Derivatives not designated as accounting hedging instruments | Conversion options | Fixed income securities | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total asset derivatives, Notional amount | 42 | 1,000 |
Total asset derivatives, Fair value, net | ' | 83 |
Asset derivatives, Gross asset | ' | 83 |
Asset derivatives, Gross liability | ' | ' |
Derivatives not designated as accounting hedging instruments | Structured settlement annuity reinsurance agreement | Other assets | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total asset derivatives, Fair value, net | 27,826 | 34,655 |
Asset derivatives, Gross asset | 27,826 | 34,655 |
Asset derivatives, Gross liability | ' | ' |
Derivatives not designated as accounting hedging instruments | Guaranteed accumulation benefits | Contractholder funds | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total liability derivatives, Notional amount | 136,770 | 148,926 |
Total liability derivatives, Fair value, net | -7,925 | -15,508 |
Liability derivatives, Gross asset | ' | ' |
Liability derivatives, Gross liability | -7,925 | -15,508 |
Derivatives not designated as accounting hedging instruments | Withdrawal benefit | Contractholder funds | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total liability derivatives, Notional amount | 28,924 | 29,800 |
Total liability derivatives, Fair value, net | -677 | -2,071 |
Liability derivatives, Gross asset | ' | ' |
Liability derivatives, Gross liability | -677 | -2,071 |
Derivatives not designated as accounting hedging instruments | Equity-indexed options in life product contracts | Contractholder funds | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total liability derivatives, Notional amount | 9,581 | 6,589 |
Total liability derivatives, Fair value, net | -595 | -298 |
Liability derivatives, Gross asset | ' | ' |
Liability derivatives, Gross liability | ($595) | ($298) |
Summary_of_Gains_and_Losses_fr
Summary of Gains and Losses from Valuation and Settlements For Derivatives Not Designated As Hedges (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | ($1,269) | $17,944 | $10,786 |
Interest rate contract | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 431 | -296 | -3,153 |
Embedded derivative financial instruments | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 8,597 | 3,964 | -4,307 |
Structured settlement annuity reinsurance agreement | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | -10,297 | 14,276 | 18,246 |
Realized capital gains and losses | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | -9,949 | 13,967 | 15,096 |
Realized capital gains and losses | Interest rate contract | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 431 | -296 | -3,153 |
Realized capital gains and losses | Embedded derivative financial instruments | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | -83 | -13 | 3 |
Realized capital gains and losses | Structured settlement annuity reinsurance agreement | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | -10,297 | 14,276 | 18,246 |
Contract benefits | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 8,977 | 4,119 | -4,154 |
Contract benefits | Embedded derivative financial instruments | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 8,977 | 4,119 | -4,154 |
Interest credited to contractholder funds | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | -297 | -142 | -156 |
Interest credited to contractholder funds | Embedded derivative financial instruments | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | ($297) | ($142) | ($156) |
Summary_of_Counterparty_Credit
Summary of Counterparty Credit Exposure by Counterparty Credit Rating (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Entity | Entity | |||
Counterparty Credit Concentration Risk [Line Items] | ' | ' | ||
Number of counter -parties | 5 | 5 | ||
Notional Amount | $40,100 | [1] | $100,400 | [1] |
Credit exposure | 1,076 | [1] | 306 | [1] |
Exposure, net of collateral | 1,076 | [1] | 306 | [1] |
A+ | ' | ' | ||
Counterparty Credit Concentration Risk [Line Items] | ' | ' | ||
Number of counter -parties | 1 | [2] | 1 | [2] |
Notional Amount | 21,700 | [1],[2] | 18,800 | [1],[2] |
Credit exposure | 624 | [1],[2] | 209 | [1],[2] |
Exposure, net of collateral | 624 | [1],[2] | 209 | [1],[2] |
A | ' | ' | ||
Counterparty Credit Concentration Risk [Line Items] | ' | ' | ||
Number of counter -parties | 2 | [2] | 1 | [2] |
Notional Amount | 10,700 | [1],[2] | 7,900 | [1],[2] |
Credit exposure | 227 | [1],[2] | 45 | [1],[2] |
Exposure, net of collateral | 227 | [1],[2] | 45 | [1],[2] |
A- | ' | ' | ||
Counterparty Credit Concentration Risk [Line Items] | ' | ' | ||
Number of counter -parties | ' | 2 | [2] | |
Notional Amount | ' | 68,700 | [1],[2] | |
Credit exposure | ' | 21 | [1],[2] | |
Exposure, net of collateral | ' | 21 | [1],[2] | |
BBB+ | ' | ' | ||
Counterparty Credit Concentration Risk [Line Items] | ' | ' | ||
Number of counter -parties | 1 | [2] | 1 | [2] |
Notional Amount | 2,700 | [1],[2] | 5,000 | [1],[2] |
Credit exposure | 156 | [1],[2] | 31 | [1],[2] |
Exposure, net of collateral | 156 | [1],[2] | 31 | [1],[2] |
BBB | ' | ' | ||
Counterparty Credit Concentration Risk [Line Items] | ' | ' | ||
Number of counter -parties | 1 | [2] | ' | |
Notional Amount | 5,000 | [1],[2] | ' | |
Credit exposure | 69 | [1],[2] | ' | |
Exposure, net of collateral | $69 | [1],[2] | ' | |
[1] | Only OTC derivatives with a net positive fair value are included for each counterparty. | |||
[2] | Rating is the lower of S&P or Moody's ratings. |
Derivative_Financial_Instrumen2
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Limited partnership interests | ' | ' |
Derivative [Line Items] | ' | ' |
Contractual amounts of off-balance-sheet financial instruments | $198.20 | $118.60 |
Mortgage loans | ' | ' |
Derivative [Line Items] | ' | ' |
Contractual amounts of off-balance-sheet financial instruments | $0 | $4 |
Schedule_of_Reserve_for_LifeCo
Schedule of Reserve for Life-Contingent Contract Benefits (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | $2,151,316 | $2,310,881 |
Structured settlement annuities | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 1,903,194 | 2,080,767 |
Other immediate fixed annuities | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 43,775 | 34,068 |
Traditional life insurance | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 192,114 | 185,534 |
Accident and health insurance | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | 10,396 | 8,188 |
Other | ' | ' |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | ' |
Reserve for life-contingent contract benefits | $1,837 | $2,324 |
Schedule_of_Key_Assumptions_Us
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits (Detail) | 12 Months Ended | |
Dec. 31, 2013 | ||
Structured settlement annuities | ' | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | |
Mortality | 'U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy | |
Interest rate description | 'Interest rate assumptions range from 2.9% to 9.0% | |
Interest rate, low end | 2.90% | |
Interest rate, high end | 9.00% | |
Estimation method | 'Present value of contractually specified future benefits | |
Other immediate fixed annuities | ' | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | |
Mortality | '1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table | |
Estimation method | 'Present value of expected future benefits based on historical experience | |
Interest rate description | 'Interest rate assumptions range from 0% to 11.5% | |
Interest rate, low end | 0.00% | |
Interest rate, high end | 11.50% | |
Traditional life insurance | ' | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | |
Mortality | 'Actual company experience plus loading | |
Estimation method | 'Net level premium reserve method using the Company's withdrawal experience rates; includes reserves for unpaid claims | |
Interest rate description | 'Interest rate assumptions range from 4.0% to 8.0% | |
Interest rate, low end | 4.00% | |
Interest rate, high end | 8.00% | |
Accident and health insurance | ' | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | |
Mortality | 'Actual company experience plus loading | |
Estimation method | 'Unearned premium; additional contract reserves for mortality risk and unpaid claims | |
Interest rate description | 'Interest rate assumptions range from 5.0% to 6.0% | |
Interest rate, low end | 5.00% | |
Interest rate, high end | 6.00% | |
Guaranteed death benefits | ' | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ' | |
Mortality | 'Annuity 2000 mortality table with internal modifications | [1] |
Estimation method | 'Projected benefit ratio applied to cumulative assessments | [1] |
Interest rate description | 'Interest rate assumptions range from 4.0% to 5.8% | [1] |
Interest rate, low end | 4.00% | [1] |
Interest rate, high end | 5.80% | [1] |
[1] | In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively "Prudential"). |
Reserve_for_LifeContingent_Con2
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Insurance [Line Items] | ' | ' | |
Premium deficiency reserve | $168,267,000 | [1] | $360,887,000 |
Variable annuities | ' | ' | |
Insurance [Line Items] | ' | ' | |
Account balances of separate accounts with guarantees, invested in equity, fixed income and balanced mutual funds | 362,500,000 | 380,700,000 | |
Account balances of separate accounts with guarantees, invested in money market mutual funds | $65,000,000 | $51,300,000 | |
[1] | The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to certain payout annuities with life contingencies. |
Schedule_of_Contractholder_Fun
Schedule of Contractholder Funds (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | $3,670,557 | $3,958,440 | $4,344,897 | $4,688,791 |
Interest-sensitive life insurance | ' | ' | ' | ' |
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | 696,878 | 684,584 | ' | ' |
Investment contracts | Fixed annuities | ' | ' | ' | ' |
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | 2,952,798 | 3,242,717 | ' | ' |
Investment contracts | Other investment contracts | ' | ' | ' | ' |
Policyholder Contract Deposits By Product [Line Items] | ' | ' | ' | ' |
Contractholder funds | $20,881 | $31,139 | ' | ' |
Schedule_of_Contract_Provision
Schedule of Contract Provisions Related to Contractholder Funds (Detail) | 12 Months Ended | |
Dec. 31, 2013 | ||
Other investment contracts | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate discription | 'Interest rates used in establishing reserves range from 1.7% to 10.3% | [1] |
Interest rate, low end | 1.70% | [1] |
Interest rate, high end | 10.30% | [1] |
Withdrawal/surrender charges | 'Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract | [1] |
Fixed annuities | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate discription | 'Interest rates credited range from 0% to 9.0% for immediate annuities and 1.0% to 5.4% for other fixed annuities | |
Withdrawal/surrender charges | 'Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 13.4% of fixed annuities are subject to market value adjustment for discretionary withdrawals | |
Term of withdrawal/surrender charges | '10 years | |
Percentage of fixed annuities subject to market value adjustment for discretionary withdrawals | 13.40% | |
Fixed annuities | Immediate annuities | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate, low end | 0.00% | |
Interest rate, high end | 9.00% | |
Fixed annuities | Other fixed annuities | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate, low end | 1.00% | |
Interest rate, high end | 5.40% | |
Interest-sensitive life insurance | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate discription | 'Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.7% to 5.1% for all other products | |
Withdrawal/surrender charges | 'Either a percentage of account balance or dollar amount grading off generally over 20 years | |
Term of withdrawal/surrender charges | '20 years | |
Interest-sensitive life insurance | Equity-indexed life | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate, low end | 0.00% | |
Interest rate, high end | 10.00% | |
Interest-sensitive life insurance | All other products | ' | |
Policyholder Contract Deposits By Product [Line Items] | ' | |
Interest rate, low end | 2.70% | |
Interest rate, high end | 5.10% | |
[1] | In 2006, the Company disposed its variable annuity business through a reinsurance agreement with Prudential. |
Schedule_of_Contractholder_Fun1
Schedule of Contractholder Funds Activity (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Insurance [Line Items] | ' | ' | ' |
Balance, beginning of year | $3,958,440 | $4,344,897 | $4,688,791 |
Deposits | 109,282 | 115,708 | 121,999 |
Interest credited | 129,687 | 144,284 | 154,657 |
Benefits | -152,822 | -149,800 | -155,403 |
Surrenders and partial withdrawals | -284,755 | -409,575 | -381,834 |
Contract charges | -70,856 | -67,695 | -65,034 |
Net transfers from (to) separate accounts | 153 | 38 | -55 |
Other adjustments | -18,572 | -19,417 | -18,224 |
Balance, end of year | $3,670,557 | $3,958,440 | $4,344,897 |
Summary_of_Variable_Annuity_Co
Summary of Variable Annuity Contracts with Guarantees (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Guaranteed death benefits | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value in the event of death | $427.40 | $432 | ||
Net amount at risk in the event of death | 12.2 | [1] | 27.8 | [1] |
Average attained age of contractholders | '65 years | '64 years | ||
Liability for guarantees related to income benefits | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value at annuitization | 29.9 | 30.5 | ||
Net amount at risk at annuitization | 2 | [2] | 4.5 | [2] |
Weighted average waiting period until annuitization or guarantee date | '0 years | '1 year | ||
Withdrawal benefit | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value | 28.6 | 29.1 | ||
Net amount at risk | 0.2 | [3] | 0.5 | [3] |
Guaranteed accumulation benefits | ' | ' | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ' | ' | ||
Separate account value | 135.8 | 148 | ||
Net amount at risk | $1.70 | [4] | $5.10 | [4] |
Weighted average waiting period until annuitization or guarantee date | '4 years | '5 years | ||
[1] | Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. | |||
[2] | Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. | |||
[3] | Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. | |||
[4] | Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. |
Summary_of_Liabilities_for_Gua
Summary of Liabilities for Guarantees (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ||
Gross balance | $33,216 | [1],[2] | $33,241 | [3] |
Less reinsurance recoverables | 24,822 | 27,997 | ||
Net balance | 8,394 | 5,244 | ||
Incurred guarantee benefits | 1,553 | 3,150 | ||
Paid guarantee benefits | ' | ' | ||
Net change | 1,553 | 3,150 | ||
Net balance | 9,947 | 8,394 | ||
Plus reinsurance recoverables | 12,615 | 24,822 | ||
Gross balance | 22,562 | [2] | 33,216 | [1],[2] |
Liability for guarantees related to death benefits and interest-sensitive life products | ' | ' | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ||
Gross balance | 10,463 | [1],[2] | 7,572 | [3] |
Less reinsurance recoverables | 2,077 | 2,336 | ||
Net balance | 8,386 | 5,236 | ||
Incurred guarantee benefits | 1,553 | 3,150 | ||
Paid guarantee benefits | ' | ' | ||
Net change | 1,553 | 3,150 | ||
Net balance | 9,939 | 8,386 | ||
Plus reinsurance recoverables | 1,680 | 2,077 | ||
Gross balance | 11,619 | [2] | 10,463 | [1],[2] |
Liability for guarantees related to income benefits | ' | ' | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ||
Gross balance | 5,174 | [1],[2] | 3,971 | [3] |
Less reinsurance recoverables | 5,166 | 3,963 | ||
Net balance | 8 | 8 | ||
Paid guarantee benefits | ' | ' | ||
Net balance | 8 | 8 | ||
Plus reinsurance recoverables | 2,333 | 5,166 | ||
Gross balance | 2,341 | [2] | 5,174 | [1],[2] |
Liability for guarantees related to accumulation and withdrawal benefits | ' | ' | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ||
Gross balance | 17,579 | [1],[2] | 21,698 | [3] |
Less reinsurance recoverables | 17,579 | 21,698 | ||
Paid guarantee benefits | ' | ' | ||
Plus reinsurance recoverables | 8,602 | 17,579 | ||
Gross balance | $8,602 | [2] | $17,579 | [1],[2] |
[1] | Included in the total liability balance as of December 31, 2012 are reserves for variable annuity death benefits of $2.1 million, variable annuity income benefits of $5.2 million, variable annuity accumulation benefits of $15.5 million, variable annuity withdrawal benefits of $2.1 million and other guarantees of $8.4 million. | |||
[2] | Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $1.0 million and other guarantees of $9.9 million. | |||
[3] | Included in the total liability balance as of December 31, 2011 are reserves for variable annuity death benefits of $2.3 million, variable annuity income benefits of $4.0 million, variable annuity accumulation benefits of $18.7 million, variable annuity withdrawal benefits of $3.0 million and other guarantees of $5.2 million. |
Summary_of_Liabilities_for_Gua1
Summary of Liabilities for Guarantees (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
In Thousands, unless otherwise specified | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | $22,562 | [1] | $33,216 | [1],[2] | $33,241 | [3] |
Liability for guarantees related to income benefits | ' | ' | ' | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | 2,341 | [1] | 5,174 | [1],[2] | 3,971 | [3] |
Variable annuities | Liability for guarantees related to income benefits | ' | ' | ' | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | 2,300 | 5,200 | 4,000 | |||
Variable annuities | Guaranteed death benefits | ' | ' | ' | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | 1,700 | 2,100 | 2,300 | |||
Variable annuities | Guaranteed accumulation benefits | ' | ' | ' | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | 7,900 | 15,500 | 18,700 | |||
Variable annuities | Withdrawal benefit | ' | ' | ' | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | 1,000 | 2,100 | 3,000 | |||
Variable annuities | Other guarantees | ' | ' | ' | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ' | ' | ' | |||
Gross balance | $9,900 | $8,400 | $5,200 | |||
[1] | Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $1.7 million, variable annuity income benefits of $2.3 million, variable annuity accumulation benefits of $7.9 million, variable annuity withdrawal benefits of $1.0 million and other guarantees of $9.9 million. | |||||
[2] | Included in the total liability balance as of December 31, 2012 are reserves for variable annuity death benefits of $2.1 million, variable annuity income benefits of $5.2 million, variable annuity accumulation benefits of $15.5 million, variable annuity withdrawal benefits of $2.1 million and other guarantees of $8.4 million. | |||||
[3] | Included in the total liability balance as of December 31, 2011 are reserves for variable annuity death benefits of $2.3 million, variable annuity income benefits of $4.0 million, variable annuity accumulation benefits of $18.7 million, variable annuity withdrawal benefits of $3.0 million and other guarantees of $5.2 million. |
Reinsurance_Additional_Informa
Reinsurance - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Effects of Reinsurance [Line Items] | ' | ' | ' | ' |
Maximum percentage of mortality risk ceded | ' | 90.00% | 90.00% | ' |
Maximum coverage per life before ceded | 250,000 | 2,000,000 | 2,000,000 | ' |
Reinsurance recoverables | ' | $259,733,000 | $279,220,000 | ' |
Interest credited to contract holder funds ceded | ' | 5,468,000 | 6,032,000 | 6,855,000 |
Gross life insurance in force | ' | 37,835,153,000 | 36,532,268,000 | 35,166,813,000 |
Life insurance in force ceded to affiliated reinsurers | ' | 535,300,000 | ' | ' |
Life insurance in force ceded to unaffiliated reinsurers | ' | 9,770,000,000 | ' | ' |
Allstate Life Insurance Company | ' | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' | ' |
Ceded premium related to structured settlement annuities | ' | 3,500,000 | 3,500,000 | 3,500,000 |
Prudential | ' | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' | ' |
Reinsurance recoverables | ' | 203,300,000 | 224,500,000 | ' |
Premiums and contract charges ceded | ' | 9,000,000 | 8,400,000 | 11,400,000 |
Contract benefits ceded | ' | 11,000,000 | 1,900,000 | 5,400,000 |
Interest credited to contract holder funds ceded | ' | 5,500,000 | 6,000,000 | 6,800,000 |
Operating costs and expenses ceded | ' | 1,500,000 | 1,400,000 | 1,700,000 |
Triton Insurance Company | ' | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' | ' |
Reinsurance recoverables | ' | $228,000 | $325,000 | ' |
Schedule_of_Effects_of_Reinsur
Schedule of Effects of Reinsurance on Premiums and Contract Charges (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Direct premiums and contract charges | $155,193 | $152,197 | $156,130 |
Total premiums and contract charges | 128,927 | 93,725 | 98,651 |
Non-affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Assumed premiums and contract charges | 835 | 849 | 889 |
Ceded premiums and contract charges | -23,140 | -23,417 | -26,863 |
Affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Ceded premiums and contract charges | ($3,961) | ($35,904) | ($31,505) |
Schedule_of_Effects_of_Reinsur1
Schedule of Effects of Reinsurance on Contract Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Direct contract benefits | $213,437 | $196,463 | $207,769 |
Contract benefits, net of reinsurance | 203,717 | 180,914 | 184,166 |
Non-affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Assumed contract benefits | 1,008 | 709 | 682 |
Ceded contract benefits | -4,288 | -11,393 | -17,715 |
Affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Ceded contract benefits | ($6,440) | ($4,865) | ($6,570) |
Schedule_of_Effect_of_Reinsura
Schedule of Effect of Reinsurance on Interest Credited to Contractholder Funds (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Direct interest credited to contractholder funds | $135,354 | $150,355 | $161,283 |
Ceded interest credited to contractholder funds | -5,468 | -6,032 | -6,855 |
Interest credited to contractholder funds, net of reinsurance | 129,911 | 144,340 | 154,447 |
Non-affiliate | ' | ' | ' |
Effects of Reinsurance [Line Items] | ' | ' | ' |
Assumed interest credited to contractholder funds | 25 | 17 | 19 |
Ceded interest credited to contractholder funds | ($5,468) | ($6,032) | ($6,855) |
Schedule_of_Deferred_Policy_Ac
Schedule of Deferred Policy Acquisition Costs (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Movement Analysis of Deferred Policy Acquisition Costs | ' | ' | ' |
Balance, beginning of year | $130,201 | $132,614 | $136,377 |
Acquisition costs deferred | 19,553 | 19,423 | 17,842 |
Amortization charged to income | -29,783 | -13,145 | -11,102 |
Effect of unrealized gains and losses | 9,865 | -8,691 | -10,503 |
Balance, end of year | $129,836 | $130,201 | $132,614 |
Schedule_of_Deferred_Sales_Ind
Schedule of Deferred Sales Inducement Activity (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Movement in Deferred Sales Inducements | ' | ' | ' |
Balance, beginning of year | $1,717 | $2,019 | $2,024 |
Sales inducements deferred | 381 | 409 | 526 |
Amortization charged to income | -604 | -465 | -316 |
Effect of unrealized gains and losses | 243 | -246 | -215 |
Balance, end of year | $1,737 | $1,717 | $2,019 |
Guarantees_and_Contingent_Liab1
Guarantees and Contingent Liabilities - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Guarantor Obligations [Line Items] | ' | ' |
Obligations of insolvent insurance companies | $8.90 | $12.40 |
Premium tax offsets | $8.30 | $8.30 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Tax refunds | ' | $5.90 | $6 |
Income taxes paid | $11.70 | ' | ' |
2011- 2012 | Minimum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under examination | '2011 | ' | ' |
2011- 2012 | Maximum | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Income tax examination, year under examination | '2012 | ' | ' |
Components_of_Deferred_Income_
Components of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred assets | ' | ' |
Accrued liabilities | $41 | $181 |
Unrealized foreign currency translation adjustments | ' | 316 |
Life and annuity reserves | ' | ' |
Other assets | ' | 106 |
Total deferred assets | 41 | 603 |
Deferred liabilities | ' | ' |
Unrealized net capital gains | -81,841 | -131,011 |
Difference in tax bases of investments | -40,544 | -39,939 |
DAC | -25,395 | -26,185 |
Life and annuity reserves | -21,051 | -4,445 |
Cumulative translation adjustment | -143 | ' |
Other liabilities | -4,408 | -5,078 |
Total deferred liabilities | -173,382 | -206,658 |
Net deferred liability | ($173,341) | ($206,055) |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components Of Income Tax Expense Benefit [Line Items] | ' | ' | ' |
Current | $6,463 | $7,286 | $1,036 |
Deferred | 15,998 | 20,260 | 36,326 |
Total income tax expense | $22,461 | $27,546 | $37,362 |
Reconciliation_of_Statutory_Fe
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
State income tax expense | 2.30% | 1.70% | 1.20% |
Other | -1.50% | -1.20% | -1.00% |
Effective income tax rate | 35.80% | 35.50% | 35.20% |
Statutory_Financial_Informatio1
Statutory Financial Information - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Statutory net income (loss) | $25.90 | $18.80 | $46 |
Statutory capital and surplus | 553.9 | 540 | ' |
Maximum dividends company can pay during 2013 without regulatory approval | 13.8 | ' | ' |
Deficit position used to determine payment of dividends | 377.4 | ' | ' |
Authorized control level RBC | $60.30 | ' | ' |
Benefit_Plans_Additional_Infor
Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Pension plan costs | $5,300,000 | $3,600,000 | $2,300,000 |
Cost of Allstate Plan | $773,000 | $717,000 | $700,000 |
Schedule_of_Components_of_Othe
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Pre-tax | ' | ' | ' |
Unrealized net holding gains (losses) arising during the period, net of related offsets | ($112,511) | $75,239 | $110,583 |
Less: reclassification adjustment of realized capital gains and losses | 27,975 | 431 | 28,264 |
Unrealized net capital gains and losses | -140,486 | 74,808 | 82,319 |
Unrealized foreign currency translation adjustments | 1,312 | -642 | -262 |
Other comprehensive income | -139,174 | 74,166 | 82,057 |
Tax | ' | ' | ' |
Unrealized net holding gains (losses) arising during the period, net of related offsets | 39,379 | -26,333 | -38,704 |
Less: reclassification adjustment of realized capital gains and losses | -9,791 | -151 | -9,892 |
Unrealized net capital gains and losses | 49,170 | -26,182 | -28,812 |
Unrealized foreign currency translation adjustments | -459 | 225 | 92 |
Other comprehensive income | 48,711 | -25,957 | -28,720 |
After-tax | ' | ' | ' |
Unrealized net holding gains (losses) arising during the period, net of related offsets | -73,132 | 48,906 | 71,879 |
Less: reclassification adjustment of realized capital gains and losses | 18,184 | 280 | 18,372 |
Unrealized net capital gains and losses | -91,316 | 48,626 | 53,507 |
Unrealized foreign currency translation adjustments | 853 | -417 | -170 |
Other comprehensive income | ($90,463) | $48,209 | $53,337 |
Schedule_I_Summary_of_Investme
Schedule I - Summary of Investments Other Than Investments in Related Parties (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | $6,160,459 |
Amount at which shown in the Balance Sheet | 6,576,469 |
U.S. government and agencies | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 237,510 |
Fair value | 294,831 |
Amount at which shown in the Balance Sheet | 294,831 |
States, municipalities and political subdivisions | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 677,780 |
Fair value | 725,984 |
Amount at which shown in the Balance Sheet | 725,984 |
Foreign government | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 320,327 |
Fair value | 381,616 |
Amount at which shown in the Balance Sheet | 381,616 |
Public utilities | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 818,055 |
Fair value | 886,685 |
Amount at which shown in the Balance Sheet | 886,685 |
All other corporate bonds | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 2,754,658 |
Fair value | 2,878,904 |
Amount at which shown in the Balance Sheet | 2,878,904 |
Residential mortgage-backed securities ("RMBS") | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 154,242 |
Fair value | 159,919 |
Amount at which shown in the Balance Sheet | 159,919 |
Commercial mortgage-backed securities ("CMBS") | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 166,927 |
Fair value | 175,980 |
Amount at which shown in the Balance Sheet | 175,980 |
Asset-backed securities ("ABS") | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 87,176 |
Fair value | 88,507 |
Amount at which shown in the Balance Sheet | 88,507 |
Redeemable preferred stock | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 9,026 |
Fair value | 10,312 |
Amount at which shown in the Balance Sheet | 10,312 |
Fixed income securities | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 5,225,701 |
Fair value | 5,602,738 |
Amount at which shown in the Balance Sheet | 5,602,738 |
Banks, Trust and Insurance Companies | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 1,392 |
Fair value | 1,438 |
Amount at which shown in the Balance Sheet | 1,438 |
Industrial, miscellaneous and all other | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 162,257 |
Fair value | 201,184 |
Amount at which shown in the Balance Sheet | 201,184 |
Equity securities | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Fair value | 202,622 |
Mortgage loans | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 514,489 |
Fair value | 534,241 |
Amount at which shown in the Balance Sheet | 514,489 |
Policy loans | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 40,511 |
Amount at which shown in the Balance Sheet | 40,511 |
Derivative instruments | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 1,076 |
Fair value | 1,076 |
Amount at which shown in the Balance Sheet | 1,076 |
Limited partnership interests | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 116,480 |
Amount at which shown in the Balance Sheet | 116,480 |
Short-term investments | ' |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' |
Cost/amortized cost | 98,553 |
Fair value | 98,553 |
Amount at which shown in the Balance Sheet | $98,553 |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | |||
Life insurance in force, Gross amount | $37,835,153 | $36,532,268 | $35,166,813 | |||
Life insurance in force, Ceded to other companies | 10,303,425 | [1] | 16,858,998 | [1] | 16,567,759 | [1] |
Life insurance in force, Assumed from other companies | 578,980 | 602,378 | 623,979 | |||
Life insurance in force, Net amount | 28,110,708 | 20,275,648 | 19,223,033 | |||
Life insurance in force, Percentage of amount assumed to net | 2.10% | 3.00% | 3.20% | |||
Premiums and contract charges, Gross amount | 155,193 | 152,197 | 156,130 | |||
Premiums and contract charges, Ceded to other companies | 27,101 | 59,321 | 58,368 | |||
Premiums and contract charges, Assumed from other companies | 835 | 849 | 889 | |||
Premiums and contract charges, Net amount | 128,927 | 93,725 | 98,651 | |||
Premiums and contract charges, Percentage of amount assumed to net | 0.60% | 0.90% | 0.90% | |||
Life insurance | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | |||
Premiums and contract charges, Gross amount | 140,834 | 138,973 | 143,652 | |||
Premiums and contract charges, Ceded to other companies | 25,564 | 57,654 | 56,534 | |||
Premiums and contract charges, Assumed from other companies | 835 | 849 | 889 | |||
Premiums and contract charges, Net amount | 116,105 | 82,168 | 88,007 | |||
Premiums and contract charges, Percentage of amount assumed to net | 0.70% | 1.00% | 1.00% | |||
Accident and health insurance | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | |||
Premiums and contract charges, Gross amount | 14,359 | 13,224 | 12,478 | |||
Premiums and contract charges, Ceded to other companies | 1,537 | 1,667 | 1,834 | |||
Premiums and contract charges, Net amount | $12,822 | $11,557 | $10,644 | |||
[1] | No reinsurance or coinsurance income was netted against premiums ceded in 2013, 2012 or 2011. |
Schedule_V_Valuation_Allowance
Schedule V - Valuation Allowances and Qualifying Accounts (Detail) (Allowance for estimated losses on mortgage loans, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for estimated losses on mortgage loans | ' | ' | ' |
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' |
Balance as of beginning of period | ' | $637 | $1,670 |
Additions charged to costs and expenses | 1,832 | -637 | 1,642 |
Other additions | ' | ' | ' |
Deductions | ' | ' | 2,675 |
Balance as of end of period | $1,832 | ' | $637 |