Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018 | |
Document Information [Line Items] | |
Document Type | POS AM |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
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 Co
Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Premiums (net of reinsurance ceded of $11,054, $11,481, and $11,788) | $ 103,447 | $ 90,941 | $ 68,581 |
Contract charges (net of reinsurance ceded of $8,279, $7,954, and $8,019) | 77,194 | 76,171 | 76,009 |
Other revenue | 1,414 | 924 | 814 |
Net investment income | 287,883 | 310,695 | 295,845 |
Realized capital gains and losses: | |||
Total other-than-temporary impairment ("OTTI") losses | (68) | (6,263) | (20,613) |
OTTI losses reclassified (from) to other comprehensive income | (217) | 893 | 4,656 |
Net OTTI losses recognized in earnings | (285) | (5,370) | (15,957) |
Sales and valuation changes on equity investments and derivatives | (20,269) | 71,702 | 17,596 |
Realized capital gains (losses) | (20,554) | 66,332 | 1,639 |
Total revenues | 449,384 | 545,063 | 442,888 |
Costs and expenses | |||
Contract benefits (net of reinsurance ceded of $11,016, $8,055, and $12,024) | 237,578 | 230,493 | 208,403 |
Interest credited to contractholder funds (net of reinsurance ceded of $4,533, $4,805, and $4,770) | 91,482 | 97,377 | 102,761 |
Amortization of deferred policy acquisition costs | 16,299 | 16,992 | 16,127 |
Operating costs and expenses | 45,964 | 42,753 | 36,188 |
Total costs and expenses | 391,323 | 387,615 | 363,479 |
Income from operations before income tax expense (benefit) | 58,061 | 157,448 | 79,409 |
Income tax expense (benefit) | 12,827 | (46,735) | 28,008 |
Net income | 45,234 | 204,183 | 51,401 |
Other comprehensive (loss) income, after-tax | |||
Change in unrealized net capital gains and losses | (50,575) | (66,210) | 24,554 |
Change in unrealized foreign currency translation adjustments | 98 | 2,409 | 1,138 |
Other comprehensive (loss) income, after-tax | (50,477) | (63,801) | 25,692 |
Comprehensive (loss) income | $ (5,243) | $ 140,382 | $ 77,093 |
Statements of Operations and _2
Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Premiums ceded | $ 11,054 | $ 11,481 | $ 11,788 |
Contract charges, reinsurance ceded | 8,279 | 7,954 | 8,019 |
Contract benefits ceded | 11,016 | 8,055 | 12,024 |
Interest credited ceded | $ 4,533 | $ 4,805 | $ 4,770 |
Statements of Financial Positio
Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments | ||
Fixed income securities, at fair value (amortized cost $4,375,110 and $4,550,008) | $ 4,530,344 | $ 4,917,725 |
Mortgage loans | 696,062 | 629,142 |
Equity securities, at fair value (cost $177,229 and $152,163) | 184,970 | 194,533 |
Limited partnership interests | 382,853 | 363,237 |
Short-term, at fair value (amortized cost $88,552 and $88,799) | 88,548 | 88,786 |
Policy loans | 39,374 | 39,589 |
Other | 653 | 3,106 |
Total investments | 5,922,804 | 6,236,118 |
Cash | 8,479 | 4,863 |
Deferred policy acquisition costs | 155,887 | 146,333 |
Reinsurance recoverable | 234,733 | 243,644 |
Accrued investment income | 50,219 | 52,577 |
Current income taxes receivable | 3,944 | |
Other assets | 191,373 | 196,121 |
Separate Accounts | 241,710 | 293,836 |
Total assets | 6,809,149 | 7,173,492 |
Liabilities | ||
Contractholder funds | 2,681,300 | 2,874,884 |
Reserve for life-contingent contract benefits | 2,232,136 | 2,348,966 |
Current income taxes payable | 0 | 1,050 |
Deferred income taxes | 143,606 | 153,726 |
Other liabilities and accrued expenses | 99,387 | 92,684 |
Payable to affiliates, net | 6,312 | 4,944 |
Reinsurance payable to parent | 156 | 134 |
Separate Accounts | 241,710 | 293,836 |
Total liabilities | 5,404,607 | 5,770,224 |
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 | 1,202,244 | 1,117,020 |
Unrealized net capital gains and losses: | ||
Unrealized net capital gains and losses on fixed income securities with OTTI | 1,185 | 256 |
Other unrealized net capital gains and losses | 121,407 | 323,694 |
Unrealized adjustment to DAC, DSI and insurance reserves | (65,495) | (182,805) |
Total unrealized net capital gains and losses | 57,097 | 141,145 |
Unrealized foreign currency translation adjustments | 2,172 | 2,074 |
Total accumulated other comprehensive income ("AOCI") | 59,269 | 143,219 |
Total shareholder's equity | 1,404,542 | 1,403,268 |
Total liabilities and shareholder's equity | $ 6,809,149 | $ 7,173,492 |
Statements of Financial Posit_2
Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed income securities, amortized cost | $ 4,375,110 | $ 4,550,008 |
Equity securities, at cost | 177,229 | 152,163 |
Short-term, amortized cost | $ 88,552 | $ 88,799 |
Common stock, par value | $ 25 | $ 25 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 100,000 | 100,000 |
Common stock, shares outstanding | 100,000 | 100,000 |
Statements of Shareholder's Equ
Statements of Shareholder's Equity - USD ($) $ in Thousands | Total | Common Stock | Additional capital paid-in | Retained income | Accumulated other comprehensive income |
Balance at Dec. 31, 2015 | $ 886,816 | $ 155,948 | |||
Change in unrealized net capital gains and losses | $ 24,554 | 24,554 | |||
Net income | 51,401 | 51,401 | |||
Change in unrealized foreign currency translation adjustments | 1,138 | 1,138 | |||
Balance at Dec. 31, 2016 | 1,262,886 | $ 2,500 | $ 140,529 | 938,217 | 181,640 |
Change in unrealized net capital gains and losses | (66,210) | (66,210) | |||
Net income | 204,183 | 204,183 | |||
Change in unrealized foreign currency translation adjustments | 2,409 | 2,409 | |||
Reclassification of tax effects due to change in accounting principle | (25,380) | 25,380 | |||
Balance at Dec. 31, 2017 | 1,403,268 | 2,500 | 140,529 | 1,117,020 | 143,219 |
Change in unrealized net capital gains and losses | (50,575) | (50,575) | |||
Net income | 45,234 | 45,234 | |||
Change in unrealized foreign currency translation adjustments | 98 | 98 | |||
Balance at Dec. 31, 2018 | $ 1,404,542 | $ 2,500 | $ 140,529 | 1,202,244 | 59,269 |
Cumulative effect of change in accounting principle | $ 39,990 | $ (33,473) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 45,234 | $ 204,183 | $ 51,401 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization and other non-cash items | (27,152) | (30,014) | (30,801) |
Realized capital gains and losses | 20,554 | (66,332) | (1,639) |
Interest credited to contractholder funds | 91,482 | 97,377 | 102,761 |
Changes in: | |||
Policy benefits and other insurance reserves | (46,890) | (17,780) | (35,690) |
Deferred policy acquisition costs | (3,278) | (7,530) | (812) |
Income taxes | (3,424) | (53,734) | 18,344 |
Other operating assets and liabilities | 15,481 | (28,736) | (32,899) |
Net cash provided by operating activities | 92,007 | 97,434 | 70,665 |
Proceeds from sales | |||
Fixed income securities | 292,026 | 192,227 | 388,051 |
Equity securities | 165,147 | 125,416 | 72,776 |
Limited partnership interests | 31,337 | 77,017 | 52,235 |
Investment collections | |||
Fixed income securities | 334,019 | 298,852 | 389,627 |
Mortgage loans | 50,627 | 65,183 | 76,008 |
Investment purchases | |||
Fixed income securities | (421,643) | (477,765) | (603,782) |
Equity securities | (171,271) | (68,002) | (77,719) |
Limited partnership interests | (56,986) | (67,015) | (73,942) |
Mortgage loans | (116,996) | (78,783) | (75,979) |
Change in short-term investments, net | 12,231 | 3,104 | (22,399) |
Change in policy loans and other investments, net | 576 | 1,440 | (758) |
Net cash provided by investing activities | 119,067 | 71,674 | 124,118 |
Cash flows from financing activities | |||
Contractholder fund deposits | 96,954 | 97,287 | 99,341 |
Contractholder fund withdrawals | (304,412) | (274,887) | (294,277) |
Other | (2,400) | ||
Net cash used in financing activities | (207,458) | (180,000) | (194,936) |
Net increase (decrease) in cash | 3,616 | (10,892) | (153) |
Cash at beginning of year | 4,863 | 15,755 | 15,908 |
Cash at end of year | $ 8,479 | $ 4,863 | $ 15,755 |
General
General | 12 Months Ended |
Dec. 31, 2018 | |
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”). AIC is wholly 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”). 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. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Legislation”) became effective, permanently reducing the U.S. corporate income tax rate from 35% to 21% beginning January 1, 2018. As a result, the corporate tax rate is not comparable between periods. Nature of operations The Company offers traditional, interest-sensitive and variable life insurance and voluntary accident and health insurance products to customers in the State of New York. The Company distributes its products through Allstate exclusive agencies and exclusive financial specialists, and workplace enrolling independent agents. The Company previously offered and continues to have in force fixed annuities such as deferred and immediate annuities. The Company also previously offered variable annuities and all of this business is reinsured. The following table summarizes premiums and contract charges by product. ($ in thousands) 2018 2017 2016 Premiums Traditional life insurance $ 59,185 $ 55,996 $ 52,333 Accident and health insurance 44,262 34,945 16,248 Total premiums 103,447 90,941 68,581 Contract charges Interest-sensitive life insurance 76,931 76,103 75,940 Fixed annuities 263 68 69 Total contract charges 77,194 76,171 76,009 Total premiums and contract charges $ 180,641 $ 167,112 $ 144,590 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Investments Fixed income securities include bonds, asset-backed securities (“ABS”), residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and redeemable preferred stocks. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale pay-downs 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, exchange traded funds, non-redeemable Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include private equity funds, real estate funds and other funds. Investments in limited partnership interests purchased prior to January 1, 2018 where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies are accounted for at fair value primarily utilizing the net asset value (“NAV”) as a practical expedient to determine fair value. Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Policy loans are carried at unpaid principal balances. Other investments consist of derivatives. Derivatives are carried at fair value. Investment income primarily consists of interest, dividends, income from limited partnership interests, and income from certain derivative transactions. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend pay-downs, 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, valuation changes of equity investments, including equity securities and certain limited partnerships where the underlying assets are predominately public equity securities, and periodic changes in fair value and settlements of certain derivatives including hedge ineffectiveness. Realized capital gains and losses on investment sales are determined on a specific identification basis. Derivative and embedded derivative financial instruments Derivative financial instruments include equity futures, options, interest rate caps, foreign currency forwards 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 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, other liabilities and accrued expenses or contractholder funds. The income statement effects of derivatives, including fair value gains and losses and accrued periodic settlements, are reported either in realized capital gains and losses or in a single line item together with the results of the associated asset or liability for which risks are being managed. 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 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 and therefore are primarily classified as long-duration contracts. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized over the life of the policy in relation to premiums. Immediate annuities with life contingencies, including certain structured settlement annuities, provide benefits 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 primarily 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 500 Index (“S&P 500”). 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. Other revenue presentation The Company revised the presentation of total revenue to include other revenue. Previously, components of other revenue were presented within operating costs and expenses and primarily represent gross dealer concessions received in connection with Allstate exclusive agencies and exclusive financial specialists sales of non-proprietary Deferred policy acquisition and sales inducement costs Costs that are related directly to the successful acquisition of new or renewal life insurance policies are deferred and recorded as DAC. These costs are principally agency’s 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 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. For traditional life and voluntary accident and health 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. The Company periodically reviews the recoverability of DAC for these policies using actual experience and current assumptions. Prior to fourth quarter 2017, the Company evaluated traditional life insurance products and immediate annuities with life contingencies on an aggregate basis. Beginning in fourth quarter 2017, traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance products are reviewed individually, consistent with the review of these products performed by The Allstate Corporation. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. For interest-sensitive life insurance, 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 10-20 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 mortality, persistency, 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 contracts 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 AOCI. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in AOCI 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 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 Income taxes are accounted for using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are investments (including unrealized capital gains and losses), insurance reserves and DAC. A deferred tax asset valuation allowance is established when it is more likely than not such assets will not be realized. The Company recognizes interest expense related to income tax matters in income tax expense and penalties in operating costs and expenses. 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. The assumptions are established at the time the policy is issued and are generally not changed during the life of the policy. The Company periodically reviews the adequacy of reserves for these policies using actual experience and current assumptions. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. Prior to fourth quarter 2017, the Company evaluated traditional life insurance products and immediate annuities with life contingencies on an aggregate basis. Beginning in fourth quarter 2017, traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance are reviewed individually, consistent with the review of these products performed by The Allstate Corporation. The Company also reviews these policies for circumstances where projected profits would be recognized in early years followed by projected losses in later years. If this circumstance exists, the Company will accrue a liability, during the period of profits, to offset the losses at such time as the future losses are expected to commence using a method updated prospectively over time. 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 AOCI. 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 accounts 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 Commitments to invest, commitments to purchase private placement securities, commitments to extend mortgage loans and financial guarantees have off-balance Adopted accounting standard Recognition and Measurement of Financial Assets and Financial Liabilities Effective January 1, 2018, the Company adopted new Financial Accounting Standards Board (“FASB”) guidance requiring equity investments, including equity securities and limited partnership interests not accounted for under the equity method of accounting or that do not result in consolidation to be measured at fair value with changes in fair value recognized in net income. The guidance clarifies that an entity should evaluate the realizability of deferred tax assets related to available-for-sale Upon adoption of the new guidance on January 1, 2018, $42 million of pre-tax after-tax Upon adoption of the new guidance on January 1, 2018, the carrying value of cost method limited partnership interests increased $8 million, pre-tax, after-tax Pending accounting standards Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance which revises the credit loss recognition criteria for certain financial assets measured at amortized cost, including reinsurance recoverables. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model. The objective of the expected credit loss model is for the reporting entity to recognize its estimate of expected credit losses for affected financial assets in a valuation allowance deducted from the amortized cost basis of the related financial assets that results in presenting the net carrying value of the financial assets at the amount expected to be collected. The reporting entity must consider all relevant information available when estimating expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts over the life of an asset. Financial assets may be evaluated individually or on a pooled basis when they share similar risk characteristics. The measurement of credit losses for available-for-sale Accounting for Hedging Activities In August 2017, the FASB issued amendments intended to better align hedge accounting with an organization’s risk management activities. The amendments expand hedge accounting for nonfinancial and financial risk components and revise the measurement methodologies to better align with an organization’s risk management activities. Separate presentation of hedge ineffectiveness is eliminated to provide greater transparency of the full impact of hedging by requiring presentation of the results of the hedged item and hedging instrument in a single financial statement line item. In addition, the amendments are designed to reduce complexity by simplifying the manner in which assessments of hedge effectiveness may be performed. The guidance is effective for reporting periods beginning after December 15, 2018. The presentation and disclosure guidance is effective on a prospective basis. The impact of adoption is not expected to be material to the Company’s results of operations or financial position. Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued guidance revising the accounting for certain long-duration insurance contracts. The new guidance changes the measurement of the Company’s reserves for traditional life, life-contingent immediate annuities and certain voluntary accident and health insurance products. Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy terminations, will be required to be reviewed and updated at least annually. The effect of updating measurement assumptions other than the discount rate are required to be determined on a retrospective basis and reported in net income. In addition, cash flows under the new guidance are required to be discounted using an upper medium grade fixed income instrument yield that is updated through OCI at each reporting date. These changes will replace current GAAP, which utilizes assumptions set at policy issuance until such time as the assumptions result in reserves that are deficient when compared to reserves computed using current assumptions. Under current GAAP, premium deficiency reserves are recognized in the amount of the deficiency, if any, computed using current assumptions. The new guidance requires DAC and other capitalized balances currently amortized in proportion to premiums or gross profits to be amortized on a constant level basis over the expected term for all long-duration insurance contracts. DAC will not be subject to loss recognition testing but will be reduced when actual experience exceeds expected experience (i.e. as a result of unexpected contract terminations). The new guidance will no longer require adjustments to DAC and DSI related to unrealized gains and losses on investment securities supporting the related business. Market risk benefit product features are required to be measured at fair value with changes in fair value recorded in net income with the exception of changes in the fair value attributable to changes in the Company’s own credit risk, which are required to be recognized in OCI. Substantially all of the Company’s market risk benefits are reinsured and therefore these impacts are not expected to be material to the Company. The new guidance is to be included in the comparable financial statements issued in reporting periods beginning after December 15, 2020, thereby requiring restatement of prior periods presented. Early adoption is permitted. The new guidance will be applied to affected contracts and DAC on the basis of existing carrying amounts at the earliest period presented or it may be applied retrospectively using actual historical experience as of contract inception. The new guidance for market risk benefits is required to be adopted retrospectively. The Company is evaluating the anticipated impacts of applying the new guidance to both retained income and AOCI. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of the business and related cash flows are unchanged. The Company has not completed its evaluation of the specific impacts of adopting the new guidance, but anticipates the financial statement impact of migrating from existing GAAP to that required by the new guidance to be material, largely attributed to the impact of transitioning from an original investment-based discount rate to one based on an upper-medium grade fixed income investment yield and updates to mortality assumptions that had previously been locked in at issuance. The Company expects the most significant impacts will occur within the life-contingent immediate annuity products. The revised accounting for DAC will be applied prospectively using the new model and any DAC effects existing in AOCI as a result of applying existing GAAP at the date of adoption will be reversed. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information | 3. Supplemental Cash Flow Information Non-cash Liabilities for collateral received in conjunction with the Company’s securities lending program were $69.8 million, $59.1 million and $61.0 million as of December 31, 2018, 2017 and 2016, respectively, and are reported in other liabilities and accrued expenses. The accompanying cash flows are included in cash flows from operating activities in the Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Net change in proceeds managed Net change in short-term investments $ (10,721 ) $ 1,864 $ 38,737 Operating cash flow (used) provided $ (10,721 ) $ 1,864 $ 38,737 Net change in liabilities Liabilities for collateral, beginning of year $ (59,067 ) $ (60,931 ) $ (99,668 ) Liabilities for collateral, end of year (69,788 ) (59,067 ) (60,931 ) Operating cash flow provided (used) $ 10,721 $ (1,864 ) $ (38,737 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | 4. Related Party Transactions Business operations The Company uses services performed by AIC, ALIC and other affiliates, 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 $46.2 million, $46.3 million and $40.0 million in 2018, 2017 and 2016, 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 previously issued structured settlement annuities, a type of immediate annuity, to fund structured settlements in matters involving AIC. In most cases, these annuities were issued under a “qualified assignment” whereby Allstate Assignment Company 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 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 and exclusive financial specialists. For these services, the Company incurred commission and other distribution expenses of $215 thousand, $259 thousand and $450 thousand in 2018, 2017 and 2016, 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 $5 thousand, $6 thousand and $4 thousand in 2018, 2017 and 2016, 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 (the “structured settlement annuity reinsurance agreement”) 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 $3.4 million, $3.5 million and $3.4 million in 2018, 2017 and 2016, respectively. As of December 31, 2018 and 2017, the carrying value of the structured settlement reinsurance treaty was $169.4 million and $166.3 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 $1 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings. The Company had no amounts outstanding under the intercompany loan agreement as of December 31, 2018 or 2017. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments | 5. Investments Fair values The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: Amortized Gross unrealized Fair value ($ in thousands) Gains Losses December 31, 2018 U.S. government and agencies $ 76,070 $ 9,394 $ — $ 85,464 Municipal 615,511 88,530 (118 ) 703,923 Corporate 3,505,786 118,034 (69,959 ) 3,553,861 Foreign government 128,926 7,896 — 136,822 ABS 19,906 — (18 ) 19,888 RMBS 14,134 969 (24 ) 15,079 CMBS 6,142 197 (2 ) 6,337 Redeemable preferred stock 8,635 335 — 8,970 Total fixed income securities $ 4,375,110 $ 225,355 $ (70,121 ) $ 4,530,344 December 31, 2017 U.S. government and agencies $ 115,747 $ 12,310 $ (5 ) $ 128,052 Municipal 615,231 114,177 (75 ) 729,333 Corporate 3,570,015 236,659 (10,943 ) 3,795,731 Foreign government 166,043 13,722 — 179,765 ABS 41,725 210 (127 ) 41,808 RMBS 20,666 1,303 (14 ) 21,955 CMBS 11,855 25 (472 ) 11,408 Redeemable preferred stock 8,726 947 — 9,673 Total fixed income securities $ 4,550,008 $ 379,353 $ (11,636 ) $ 4,917,725 Scheduled maturities The scheduled maturities for fixed income securities are as follows as of December 31, 2018: ($ in thousands) Amortized cost Fair value Due in one year or less $ 310,224 $ 315,802 Due after one year through five years 1,495,331 1,516,902 Due after five years through ten years 1,502,982 1,498,622 Due after ten years 1,026,391 1,157,714 4,334,928 4,489,040 ABS, RMBS and CMBS 40,182 41,304 Total $ 4,375,110 $ 4,530,344 Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. ABS, RMBS and CMBS 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) 2018 2017 2016 Fixed income securities $ 214,039 $ 228,507 $ 226,894 Mortgage loans 30,920 28,263 28,577 Equity securities 5,565 5,465 5,868 Limited partnership interests (1)(2) 43,365 53,917 38,485 Short-term investments 2,966 1,200 826 Policy loans 2,339 2,443 2,456 Investment income, before expense 299,194 319,795 303,106 Investment expense (11,311 ) (9,100 ) (7,261 ) Net investment income $ 287,883 $ 310,695 $ 295,845 (1) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net investment income. (2) Includes net investment income of $26.4 million for EMA limited partnership interests and $17.0 million for limited partnership interests carried at fair value for 2018. Realized capital gains and losses Realized capital gains (losses) by asset type for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Fixed income securities $ (1,306 ) $ 5,436 $ (17,145 ) Mortgage loans 466 1,128 — Equity securities (16,364 ) 799 (5,570 ) Limited partnership interests (3,895 ) 6,451 590 Derivatives 638 52,506 23,781 Short-term investments (93 ) 12 (17 ) Realized capital gains (losses) $ (20,554 ) $ 66,332 $ 1,639 Realized capital gains (losses) by transaction type for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Impairment write-downs (1) $ (285 ) $ (5,370 ) $ (15,303 ) Change in intent write-downs (1) — — (654 ) Net OTTI losses recognized in earnings (285 ) (5,370 ) (15,957 ) Sales (1) (1,548 ) 19,196 (6,185 ) Valuation of equity investments (1)(2) (19,359 ) — — Valuation and settlements of derivative instruments 638 52,506 23,781 Realized capital gains (losses) $ (20,554 ) $ 66,332 $ 1,639 (1) Due to the adoption of the recognition and measurement accounting standard, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments and are no longer included in impairment write-downs, change in intent write-downs and sales. (2) Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities. Gross gains of $4.4 million and gross losses of $5.4 million were realized on sales of fixed income securities during 2018. Gross gains of $19.8 million and $14.5 million and gross losses of $8.2 million and $21.7 million were realized on sales of fixed income and equity securities during 2017 and 2016, respectively. The following table presents the net pre-tax ($ in thousands) For the Equity securities $ (12,897 ) Limited partnership interests carried at fair value 16,968 Total $ 4,071 OTTI losses by asset type for the years ended December 31 are as follows: 2018 2017 2016 ($ in thousands) Gross Included Net Gross Included Net Gross Included Net Fixed income securities: Corporate $ — $ — $ — $ (1,481 ) $ — $ (1,481 ) $ (8,306 ) $ 4,205 $ (4,101 ) RMBS — — — — — — 1 (1 ) — CMBS (68 ) (217 ) (285 ) (2,338 ) 893 (1,445 ) (785 ) 452 (333 ) Total fixed income securities (68 ) (217 ) (285 ) (3,819 ) 893 (2,926 ) (9,090 ) 4,656 (4,434 ) Equity securities (1) — — — (2,422 ) — (2,422 ) (11,103 ) — (11,103 ) Limited partnership interests (1) — — — (22 ) — (22 ) (420 ) — (420 ) OTTI losses $ (68 ) $ (217 ) $ (285 ) $ (6,263 ) $ 893 $ (5,370 ) $ (20,613 ) $ 4,656 $ (15,957 ) (1) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities and limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net income and are no longer included in the table above. The total amount of OTTI losses included in AOCI at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amounts exclude $1.9 million and $1.3 million as of December 31, 2018 and 2017, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date. ($ in thousands) December 31, December 31, CMBS $ (358 ) $ (975 ) Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of December 31 are as follows: ($ in thousands) 2018 2017 2016 Beginning balance $ (3,192 ) $ (4,594 ) $ (1,173 ) Additional credit loss for securities previously other-than-temporarily impaired (285 ) (128 ) (357 ) Additional credit loss for securities not previously other-than-temporarily impaired — (2,798 ) (4,077 ) Reduction in credit loss for securities disposed or collected 793 4,328 1,013 Ending balance $ (2,684 ) $ (3,192 ) $ (4,594 ) 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 of underlying collateral, 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 OTTI 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 AOCI. 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 AOCI are as follows: ($ in thousands) Fair value Gross unrealized Unrealized net December 31, 2018 Gains Losses Fixed income securities $ 4,530,344 $ 225,355 $ (70,121 ) $ 155,234 Short-term investments 88,548 — (4 ) (4 ) EMA limited partnerships (1) (50 ) Unrealized net capital gains and losses, pre-tax 155,180 Amounts recognized for: Insurance reserves (2) (80,628 ) DAC and DSI (3) (2,277 ) Amounts recognized (82,905 ) Deferred income taxes (15,178 ) Unrealized net capital gains and losses, after-tax $ 57,097 (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 unrealized 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 lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate 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. ($ in thousands) Fair value Gross unrealized Unrealized net December 31, 2017 Gains Losses Fixed income securities $ 4,917,725 $ 379,353 $ (11,636 ) $ 367,717 Equity securities 194,533 42,758 (388 ) 42,370 Short-term investments 88,786 — (13 ) (13 ) EMA limited partnerships (10 ) Unrealized net capital gains and losses, pre-tax 410,064 Amounts recognized for: Insurance reserves (222,342 ) DAC and DSI (9,057 ) Amounts recognized (231,399 ) Deferred income taxes (37,520 ) Unrealized net capital gains and losses, after-tax $ 141,145 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) 2018 2017 2016 Fixed income securities $ (212,483 ) $ 29,700 $ 41,965 Equity securities (1) — 32,927 12,743 Short-term investments 9 (12 ) (3 ) EMA limited partnerships (40 ) 51 (3 ) Total (212,514 ) 62,666 54,702 Amounts recognized for: Insurance reserves 141,714 (165,992 ) (11,943 ) DAC and DSI 6,780 1,465 (4,984 ) Amounts recognized 148,494 (164,527 ) (16,927 ) Deferred income taxes 13,445 60,664 (13,221 ) (Decrease) increase in unrealized net capital gains and losses, after-tax $ (50,575 ) $ (41,197 ) $ 24,554 (1) Upon adoption of the recognition and measurement accounting standard on January 1, 2018, $42.4 million of pre-tax Portfolio monitoring The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income 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 authorityhas 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. 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 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 OTTI using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of OTTI for these 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. 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 ($ in thousands) Number of issues Fair value Unrealized Number Fair Unrealized December 31, 2018 Fixed income securities Municipal 1 $ 9,371 $ (11 ) 1 $ 4,893 $ (107 ) $ (118 ) Corporate 451 1,308,566 (40,510 ) 123 480,729 (29,449 ) (69,959 ) ABS 1 10,010 (9 ) 1 9,878 (9 ) (18 ) RMBS 90 1,086 (5 ) 19 826 (19 ) (24 ) CMBS — — — 1 113 (2 ) (2 ) Total fixed income securities 543 $ 1,329,033 $ (40,535 ) 145 $ 496,439 $ (29,586 ) $ (70,121 ) Investment grade fixed income securities 309 $ 1,111,745 $ (27,375 ) 122 $ 470,388 $ (26,471 ) $ (53,846 ) Below investment grade fixed income securities 234 217,288 (13,160 ) 23 26,051 (3,115 ) (16,275 ) Total fixed income securities 543 $ 1,329,033 $ (40,535 ) 145 $ 496,439 $ (29,586 ) $ (70,121 ) December 31, 2017 Fixed income securities U.S. government and agencies 2 $ 39,867 $ (5 ) — $ — $ — $ (5 ) Municipal 1 4,925 (75 ) — — — (75 ) Corporate 147 527,594 (4,216 ) 47 191,534 (6,727 ) (10,943 ) ABS 4 24,836 (127 ) — — — (127 ) RMBS 47 1,720 (10 ) 24 216 (4 ) (14 ) CMBS — — — 2 8,325 (472 ) (472 ) Redeemable preferred stock 1 1 — — — — — Total fixed income securities 202 598,943 (4,433 ) 73 200,075 (7,203 ) (11,636 ) Equity securities 63 7,294 (330 ) 3 759 (58 ) (388 ) Total fixed income and equity securities 265 $ 606,237 $ (4,763 ) 76 $ 200,834 $ (7,261 ) $ (12,024 ) Investment grade fixed income securities 137 $ 532,387 $ (3,093 ) 64 $ 185,093 $ (6,447 ) $ (9,540 ) Below investment grade fixed income securities 65 66,556 (1,340 ) 9 14,982 (756 ) (2,096 ) Total fixed income securities 202 $ 598,943 $ (4,433 ) 73 $ 200,075 $ (7,203 ) $ (11,636 ) As of December 31, 2018, $68.7 million of the $70.1 million unrealized losses are related to securities with an unrealized loss position less than 20% of amortized cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired. Of the $68.7 million, $53.9 million are related to unrealized losses on investment grade fixed income securities. Of the remaining $14.8 million, $12.8 million have been in an unrealized loss position for less than 12 months. 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 Global Ratings (“S&P”), a comparable rating from another nationally recognized rating agency, or a comparable internal rating if an externally provided rating is not available. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third party rating. Unrealized losses on investment grade securities are principally related to an increase in market yields which may include increased risk-free interest rates and/or wider credit spreads since the time of initial purchase. The unrealized losses are expected to reverse as the securities approach maturity. As of December 31, 2018, the remaining $1.5 million of unrealized losses are related to securities in unrealized loss positions greater than or equal to 20% of amortized cost and are related to below investment grade fixed income securities. ABS, RMBS and CMBS 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, and (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. Municipal bonds in an unrealized loss position were evaluated based on the underlying credit quality of the primary obligor, obligation type and quality of the underlying assets. As of December 31, 2018, 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. Limited partnerships Investments in limited partnership interests include interests in private equity funds, real estate funds and other funds. As of December 31, 2018 and 2017, the carrying value of EMA limited partnerships totaled $278.1 million and $282.8 million, respectively, and the limited partnerships carried at fair value as of December 31, 2018, while at cost method as of December 2017, totaled $104.8 million and $80.5 million, respectively. Principal factors influencing carrying value appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. For EMA limited partnerships, the Company recognizes an impairment loss 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. Changes in fair value limited partnerships are recorded through net investment income and therefore are not tested for impairment. Mortgage loans The Company’s mortgage loans are commercial mortgage loans collateralized by a variety of commercial real estate property types located across the United States and totaled, net of valuation allowance, $696.1 million and $629.1 million as of December 31, 2018 and 2017, respectively. Substantially all of the commercial mortgage loans are non-recourse The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31. (% of mortgage loan portfolio carrying value) 2018 2017 California 18.4 % 19.4 % Texas 16.1 14.5 North Carolina 8.8 5.0 New Jersey 6.6 8.5 Nevada 6.3 3.8 Illinois 6.1 5.7 The types of properties collateralizing the mortgage loans as of December 31 are as follows: (% of mortgage loan portfolio carrying value) 2018 2017 Apartment complex 31.3 % 26.3 % Office buildings 27.2 28.2 Retail 17.3 19.3 Warehouse 15.7 16.5 Other 8.5 9.7 Total 100.0 % 100.0 % The contractual maturities of the mortgage loan portfolio as of December 31, 2018 are as follows: ($ in thousands) Number of loans Carrying value Percent 2019 1 $ 10,000 1.4 % 2020 6 27,402 3.9 2021 11 69,528 10.0 2022 13 84,178 12.1 Thereafter 68 504,954 72.6 Total 99 $ 696,062 100.0 % 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 or present value of the loan’s expected future repayment cash flows. Mortgage loans are charged off against their corresponding valuation allowances when there is no reasonable expectation of recovery. The impairment evaluation is non-statistical 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 2018 2017 ($ in thousands) Debt service coverage ratio distribution Fixed rate Variable Total Fixed rate Variable Total Below 1.0 $ — $ — $ — $ — $ — $ — 1.0 - 1.25 25,447 — 25,447 50,411 — 50,411 1.26 - 1.50 189,063 — 189,063 172,800 — 172,800 Above 1.50 453,153 28,399 481,552 405,931 — 405,931 Total non-impaired $ 667,663 $ 28,399 $ 696,062 $ 629,142 $ — $ 629,142 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. There were no impaired mortgage loans and no valuation allowances as of December 31, 2018 or 2017. Payments on all mortgage loans were current as of December 31, 2018, 2017 and 2016. Municipal bonds The Company maintains a diversified portfolio of municipal bonds which totaled $703.9 million and $729.3 million as of December 31, 2018 and 2017, respectively. The municipal bond portfolio includes general obligations of state and local issuers and revenue bonds (including pre refunded bonds, which are bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest). 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) 2018 2017 California 28.1 % 27.7 % Texas 12.2 11.9 Oregon 7.6 7.2 Illinois 5.9 5.8 Short-term investments Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. As of December 31, 2018 and 2017, the fair value of short-term investments totaled $88.5 million and $88.8 million, respectively. Policy loans Policy loans are carried at unpaid principal balances. As of December 31, 2018 and 2017, the carrying value of policy loans totaled $39.4 million and $39.6 million, respectively. Other investments Other investments consist of derivatives. Derivatives are carried at fair value. As of December 31, 2018 and 2017, the fair value of derivatives totaled $653 thousand and $3.1 million, respectively. Concentration of credit risk As of December 31, 2018, 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, other than the U.S. government and its agencies. Securities loaned The Company’s business activities include securities lending programs with third parties, mostly large banks. As of December 31, 2018 and 2017, fixed income and equity securities with a carrying value of $66.6 million and $57.4 million, respectively, were on loan under these agreements. Interest income on collateral, net of fees, was $286 thousand, $235 thousand and $306 thousand in 2018, 2017 and 2016, respectively. Other investment information Included in fixed income securities are below investment grade assets totaling $279.2 million and $311.3 million as of December 31, 2018 and 2017, respectively. As of December 31, 2018, fixed income securities with a carrying value of $2.2 million were on deposit with regulatory authorities as required by law. As of December 31, 2018, there were no fixed income securities or other investments that were non-income |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
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 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 The second situation where the Company classifies securities in Level 3 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 Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans 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 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: • Equity securities: • Short-term: • Separate account assets: Level 2 measurements • Fixed income securities: U.S. government and agencies: Municipal: Corporate - public: Corporate - privately placed: Foreign government: ABS - consumer and other: non-binding RMBS: CMBS: Redeemable preferred stock: • Equity securities • Short-term: • Other investments Over-the-counter Level 3 measurements • Fixed income securities: Municipal: non-binding Corporate - public and Corporate - privately placed: non-binding ABS - consumer and other: non-binding • Equity securities: • Other investments: non-market • Other assets: non-market • Contractholder funds: non-market Assets and liabilities measured at fair value on a non-recurring 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. Investments excluded from the fair value hierarchy Limited partnerships carried at fair value, which do not have readily determinable fair values, use NAV provided by the investees and are excluded from the fair value hierarchy. These investments are generally not redeemable by the investees and generally cannot be sold without approval of the general partner. The Company receives distributions of income and proceeds from the liquidation of the underlying assets of the investees, which usually takes place in years 4-9 10-12 The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2018. ($ in thousands) Quoted prices (Level 1) Significant (Level 2) Significant (Level 3) Counterparty Balance Assets Fixed income securities: U.S. government and agencies $ 36,299 $ 49,165 $ — $ 85,464 Municipal — 683,102 20,821 703,923 Corporate - public — 2,437,942 6,761 2,444,703 Corporate - privately placed — 1,097,968 11,190 1,109,158 Foreign government — 136,822 — 136,822 ABS - consumer and other — 19,888 — 19,888 RMBS — 15,079 — 15,079 CMBS — 6,337 — 6,337 Redeemable preferred stock — 8,970 — 8,970 Total fixed income securities 36,299 4,455,273 38,772 4,530,344 Equity securities 172,077 731 12,162 184,970 Short-term investments 50,353 38,195 — 88,548 Other investments: Free-standing derivatives — 1,240 394 $ (981 ) 653 Separate account assets 241,710 — — 241,710 Other assets 1 — 169,386 169,387 Total recurring basis assets $ 500,440 $ 4,495,439 $ 220,714 $ (981 ) $ 5,215,612 % of total assets at fair value 9.6 % 86.2 % 4.2 % — % 100.0 % Investments reported at NAV 104,778 Total $ 5,320,390 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (3,801 ) $ (3,801 ) Other liabilities: Free-standing derivatives — (192 ) — $ 11 (181 ) Total recurring basis liabilities $ — $ (192 ) $ (3,801 ) $ 11 $ (3,982 ) % of total liabilities at fair value — % 4.8 % 95.5 % (0.3 )% 100.0 % The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2017. ($ in thousands) Quoted prices (Level 1) Significant (Level 2) Significant (Level 3) Counterparty Balance Assets Fixed income securities: U.S. government and agencies $ 42,427 $ 85,625 $ — $ 128,052 Municipal — 708,155 21,178 729,333 Corporate - public — 2,565,223 7,312 2,572,535 Corporate - privately placed — 1,167,218 55,978 1,223,196 Foreign government — 179,765 — 179,765 ABS - consumer and other — 26,603 15,205 41,808 RMBS — 21,955 — 21,955 CMBS — 11,408 — 11,408 Redeemable preferred stock — 9,672 1 9,673 Total fixed income securities 42,427 4,775,624 99,674 4,917,725 Equity securities 186,446 928 7,159 194,533 Short-term investments 20,594 68,192 — 88,786 Other investments: Free-standing derivatives — 2,885 336 $ (115 ) 3,106 Separate account assets 293,836 — — 293,836 Other assets — — 166,290 166,290 Total recurring basis assets $ 543,303 $ 4,847,629 $ 273,459 $ (115 ) $ 5,664,276 % of total assets at fair value 9.6 % 85.6 % 4.8 % — % 100.0 % Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (4,796 ) $ (4,796 ) Other liabilities: Free-standing derivatives — (1,601 ) — $ 345 (1,256 ) Total recurring basis liabilities $ — $ (1,601 ) $ (4,796 ) $ 345 $ (6,052 ) % of total liabilities at fair value — % 26.5 % 79.2 % (5.7 )% 100.0 % The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. ($ in thousands) Fair value Valuation technique Unobservable input Range Weighted average December 31, 2018 Other assets - Structured settlement annuity reinsurance agreement $169,386 Stochastic cash flow model Ultimate reinvestment spreads 129.8 - 218.6 169.3 basis points December 31, 2017 Other assets - Structured settlement annuity reinsurance agreement $166,290 Stochastic cash flow model Ultimate reinvestment spreads 129.8 - 218.6 basis points 169.3 basis points If the ultimate reinvestment spreads increased (decreased), it would result in a lower (higher) fair value. As of December 31, 2018 and 2017, Level 3 fair value measurements of fixed income securities total $38.8 million and $99.7 million, respectively, and include $33.4 million and $94.0 million, respectively, of securities valued based on non-binding non-binding The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018. Total gains (losses) included in: ($ in thousands) Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 21,178 $ — $ (357 ) $ — $ — Corporate - public 7,312 1 (383 ) — — Corporate - privately placed 55,978 4 (639 ) — (22,956 ) ABS - consumer and other 15,205 — (205 ) — — Redeemable preferred stock 1 — — — (1 ) Total fixed income securities 99,674 5 (1,584 ) — (22,957 ) Equity securities 7,159 2,600 (5 ) — — Free-standing derivatives, net 336 65 — — — Other assets 166,290 3,096 — — — Total recurring Level 3 assets $ 273,459 $ 5,766 $ (1,589 ) $ — $ (22,957 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (4,796 ) $ 995 $ — $ — $ — Total recurring Level 3 liabilities $ (4,796 ) $ 995 $ — $ — $ — Purchases Sales Issues Settlements Balance as of Assets Fixed income securities: Municipal $ — $ — $ — $ — $ 20,821 Corporate - public — — — (169 ) 6,761 Corporate - privately placed — — — (21,197 ) 11,190 ABS - consumer and other — — — (15,000 ) — Redeemable preferred stock — — — — — Total fixed income securities — — — (36,366 ) 38,772 Equity securities 3,723 (1,315 ) — — 12,162 Free-standing derivatives, net 66 — — (73 ) 394 Other assets — — — — 169,386 Total recurring Level 3 assets $ 3,789 $ (1,315 ) $ — $ (36,439 ) $ 220,714 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (3,801 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (3,801 ) (1) The effect to net income totals $6.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $5.8 million in realized capital gains and losses, $3 thousand in net investment income, $1.3 million in interest credited to contractholder funds and $(326) thousand in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2017. ($ in thousands) Total gains (losses) included in: Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 22,723 $ 15 $ 347 $ — $ — Corporate - public 4,091 — (64 ) — (1,565 ) Corporate - privately placed 75,713 4,080 (4,520 ) — — ABS - consumer and other 14,803 — 402 — — Redeemable preferred stock — — — — — Total fixed income securities 117,330 4,095 (3,835 ) — (1,565 ) Equity securities 5,920 585 492 — (275 ) Free-standing derivatives, net 311 (54 ) — — — Other assets 109,578 56,712 — — — Total recurring Level 3 assets $ 233,139 $ 61,338 $ (3,343 ) $ — $ (1,840 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (7,177 ) $ 2,381 $ — $ — $ — Total recurring Level 3 liabilities $ (7,177 ) $ 2,381 $ — $ — $ — Purchases Sales Issues Settlements Balance as of Assets Fixed income securities: Municipal $ — $ — $ — $ (1,907 ) $ 21,178 Corporate - public 4,989 — — (139 ) 7,312 Corporate - privately placed — (18,000 ) — (1,295 ) 55,978 ABS - consumer and other — — — — 15,205 Redeemable preferred stock 1 — — — 1 Total fixed income securities 4,990 (18,000 ) — (3,341 ) 99,674 Equity securities 1,018 (581 ) — — 7,159 Free-standing derivatives, net 127 — — (48 ) 336 Other assets — — — — 166,290 Total recurring Level 3 assets $ 6,135 $ (18,581 ) $ — $ (3,389 ) $ 273,459 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (4,796 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (4,796 ) (1) The effect to net income totals $63.7 million and is reported in the Statements of Operations and Comprehensive Income as follows: $60.7 million in realized capital gains and losses, $606 thousand in net investment income, $(556) thousand in interest credited to contractholder funds and $2.9 million in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2016. ($ in thousands) Total gains (losses) included in: Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 32,286 $ 355 $ (495 ) $ — $ — Corporate - public 10,139 (2 ) (14 ) 1,655 (7,479 ) Corporate - privately placed 211,858 (4,074 ) 7,947 — (131,723 ) ABS - CDO 9,650 — 350 — — ABS - consumer and other 15,704 — (901 ) — — Total fixed income securities 279,637 (3,721 ) 6,887 1,655 (139,202 ) Equity securities 6,935 (4,463 ) 1,001 — — Free-standing derivatives, net 329 (30 ) — — — Other assets 82,774 26,804 — — — Total recurring Level 3 assets $ 369,675 $ 18,590 $ 7,888 $ 1,655 $ (139,202 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (7,900 ) $ 723 $ — $ — $ — Total recurring Level 3 liabilities $ (7,900 ) $ 723 $ — $ — $ — Purchases Sales Issues Settlements Balance as of Assets Fixed income securities: Municipal $ — $ (7,515 ) $ — $ (1,908 ) $ 22,723 Corporate - public — — — (208 ) 4,091 Corporate - privately placed 697 — — (8,992 ) 75,713 ABS - CDO — — — (10,000 ) — ABS - consumer and other — — — — 14,803 Total fixed income securities 697 (7,515 ) — (21,108 ) 117,330 Equity securities 2,987 (540 ) — — 5,920 Free-standing derivatives, net 103 — — (91 ) 311 Other assets — — — — 109,578 Total recurring Level 3 assets $ 3,787 $ (8,055 ) $ — $ (21,199 ) $ 233,139 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (7,177 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (7,177 ) (1) The effect to net income totals $19.3 million and is reported in the Statements of Operations and Comprehensive Income as follows: $18.6 million in realized capital gains and losses, $44 thousand in net investment income, $(702) thousand in interest credited to contractholder funds and $1.4 million in contract benefits. Transfers between level categorizations may occur due to changes in the availability of market observable inputs, which generally are caused by changes in market conditions such as liquidity, trading volume or bid-ask There were no transfers between Level 1 and Level 2 during 2018, 2017 or 2016. Transfers into Level 3 during 2016 included situations where a fair value quote was not provided by the Company’s independent third-party valuation service provider and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3. Transfers out of Level 3 during 2018, 2017 and 2016 included situations where a broker quote was used in the prior period and a fair value quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant. The table below provides valuation changes included in net income for Level 3 assets and liabilities held as of December 31. ($ in thousands) 2018 2017 2016 Assets Fixed income securities: Municipal $ — $ 15 $ 16 Corporate 3 5 (4,079 ) Total fixed income securities 3 20 (4,063 ) Free-standing derivatives, net 65 (55 ) (30 ) Equity securities 2,594 586 — Other assets 3,096 56,712 26,804 Total recurring Level 3 assets $ 5,758 $ 57,263 $ 22,711 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ 995 $ 2,381 $ 723 Total recurring Level 3 liabilities $ 995 $ 2,381 $ 723 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 held and determined to be in Level 3. These gains and losses total $6.8 million in 2018 and are reported as follows: $5.8 million in realized capital gains and losses, $3 thousand in net investment income, $1.3 million in interest credited to contractholder funds and $(326) thousand in contract benefits. These gains and losses total $59.6 million in 2017 and are reported as follows: $56.7 million in realized capital gains and losses, $606 thousand in net investment income, $(556) thousand in interest credited to contractholder funds and $2.9 million in contract benefits. These gains and losses total $23.4 million in 2016 and are reported as follows: $22.7 million in realized capital gains and losses, $14 thousand in net investment income, $(702) thousand in interest credited to contractholder funds and $1.4 million in contract benefits. Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value. Financial assets December 31, 2018 December 31, 2017 ($ in thousands) Fair value Carrying value Fair value Carrying value Fair value Mortgage loans Level 3 $ 696,062 $ 699,936 $ 629,142 $ 655,601 Financial liabilities December 31, 2018 December 31, 2017 ($ in thousands) Fair value Carrying value Fair value Carrying value Fair value Contractholder funds on investment contracts Level 3 $ 1,755,866 $ 1,821,641 $ 1,944,244 $ 2,062,405 Liability for collateral Level 2 69,788 69,788 59,067 59,067 |
Derivative Financial Instrument
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 7. Derivative Financial Instruments and Off-balance The Company uses derivatives for risk reduction focused on managing the risks with certain assets and liabilities arising from the potential adverse impacts from changes in risk-free interest rates, changes in equity market valuations and foreign currency fluctuations. 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. Futures and options are used for hedging the equity exposure contained in the Company’s equity indexed life product contracts that offer equity returns to contractholders. Foreign currency forwards are primarily used by the Company to reduce the foreign currency risk associated with holding foreign currency denominated investments. 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 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. Non-hedge non-hedge non-hedge non-hedge 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, 2018. None of these derivatives are designated as accounting hedging instruments. Volume (1) ($ in thousands, except number of contracts) Balance sheet location Notional amount Number contracts Fair net Gross asset Gross liability Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 1,500 n/a $ 17 $ 17 $ — Equity and index contracts Options Other investments — 122 556 556 — Futures Other assets — 1 1 1 — Foreign currency contracts Foreign currency forwards Other investments 16,091 n/a 670 684 (14 ) Total asset derivatives $ 17,591 123 $ 1,244 $ 1,258 $ (14 ) Liability derivatives Interest rate contracts Interest rate cap agreements Other liabilities & $ 12,600 n/a $ 377 $ 377 $ — Equity and index contracts Options Other liabilities & — 121 (178 ) — (178 ) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 25,381 n/a (3,003 ) — (3,003 ) Guaranteed withdrawal benefits Contractholder funds 14,507 n/a (398 ) — (398 ) Equity-indexed options in life product contracts Contractholder funds 36,265 n/a (400 ) — (400 ) Total liability derivatives 88,753 121 (3,602 ) $ 377 $ (3,979 ) Total derivatives $ 106,344 244 $ (2,358 ) (1) Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) 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, 2017. None of these derivatives are designated as accounting hedging instruments. Volume (1) ($ in thousands, except number of contracts) Balance sheet location Notional amount Number contracts Fair value, net Gross asset Gross liability Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 13,500 n/a $ 318 $ 318 $ — Equity and index contracts Options Other investments — 105 2,800 2,800 — Foreign currency contracts Foreign currency forwards Other investments 140 n/a (12 ) — (12 ) Other contracts Structured settlement annuity reinsurance agreement Other assets — n/a 166,290 166,290 — Total asset derivatives $ 13,640 105 $ 169,396 $ 169,408 $ (12 ) Liability derivatives Interest rate contracts Interest rate cap agreements Other liabilities & $ 2,300 n/a $ 18 $ 18 $ — Equity and index contracts Options and futures Other liabilities & — 106 (1,149 ) — (1,149 ) Foreign currency contracts Foreign currency forwards Other liabilities & 24,622 (355 ) 85 (440 ) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 32,447 n/a (2,754 ) — (2,754 ) Guaranteed withdrawal benefits Contractholder funds 17,774 n/a (321 ) — (321 ) Equity-indexed options in life product contracts Contractholder funds 28,833 n/a (1,721 ) — (1,721 ) Total liability derivatives 105,976 106 (6,282 ) $ 103 $ (6,385 ) Total derivatives $ 119,616 211 $ 163,114 (1) Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) The following table provides gross and net amounts for the Company’s OTC derivatives, all of which are subject to enforceable master netting agreements. Offsets ($ in thousands) Gross amount Counter- party netting Cash collateral (received) pledged Net amount balance sheet Securities collateral (received) pledged Net amount December 31, 2018 Asset derivatives $ 1,078 $ (391 ) $ (590 ) $ 97 $ — $ 97 Liability derivatives (14 ) 391 (380 ) (3 ) — (3 ) December 31, 2017 Asset derivatives $ 421 $ (115 ) $ — $ 306 $ — $ 306 Liability derivatives (452 ) 115 230 (107 ) — (107 ) The following tables present gains and losses from valuation and settlements reported on derivatives in the Statements of Operations and Comprehensive Income. ($ in thousands) Realized Contract benefits Interest Total gain (loss) 2018 Interest rate contracts $ 65 $ — $ — $ 65 Equity and index contracts — — (768 ) (768 ) Embedded derivative financial instruments — (326 ) 1,321 995 Foreign currency contracts 887 — — 887 Other contracts - structured settlement annuity reinsurance agreement (314 ) — — (314 ) Total $ 638 $ (326 ) $ 553 $ 865 2017 Interest rate contracts $ (54 ) $ — $ — $ (54 ) Equity and index contracts — — 1,289 1,289 Embedded derivative financial instruments — 2,937 (556 ) 2,381 Foreign currency contracts (697 ) — — (697 ) Other contracts - structured settlement annuity reinsurance agreement 53,257 — — 53,257 Total $ 52,506 $ 2,937 $ 733 $ 56,176 2016 Interest rate contracts $ (30 ) $ — $ — $ (30 ) Equity and index contracts — — 405 405 Embedded derivative financial instruments — 1,425 (702 ) 723 Foreign currency contracts 431 — — 431 Other contracts - structured settlement annuity reinsurance agreement 23,380 — — 23,380 Total $ 23,781 $ 1,425 $ (297 ) $ 24,909 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, 2018, counterparties pledged $970 thousand in collateral posted under the MNA’s for contracts without credit-risk contingent features. The Company did not pledge any collateral under MNA’s. The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance. Other derivatives, including futures and option contracts, are traded on organized exchanges which require margin deposits and guarantee the execution of trades, thereby mitigating any potential credit risk. Counterparty credit exposure represents the Company’s potential loss if all of the counterparties concurrently fail to perform under the contractual terms of the contracts and all collateral, if any, becomes worthless. This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements. The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. 2018 2017 ($ in thousands) (1) Number Notional (2) Credit (2) Exposure, (2) Number Notional (2) Credit (2) Exposure, (2) A+ 2 $ 30,191 $ 1,064 $ 97 2 $ 13,640 $ 305 $ 305 (1) The lower of S&P or Moody’s long-term debt issuer ratings. (2) Only OTC derivatives with a net positive fair value are included for each counterparty. For certain exchange traded derivatives, margin deposits are required as well as daily cash settlements of margin accounts. As of December 31, 2018, the Company pledged $61 thousand in the form of margin deposits. Market risk is the risk that the Company will incur losses due to adverse changes in market rates and prices. Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions. To limit this risk, the Company’s senior management has established risk control limits. In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions. Certain of the Company’s derivative instruments contain credit-risk-contingent termination events, cross-default provisions and credit support annex agreements. Credit-risk-contingent termination events allow the counterparties to terminate the derivative agreement or a specific trade on certain dates if the Company’s financial strength credit ratings by Moody’s or S&P fall below a certain level. Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative agreement if the Company defaults by pre-determined The following summarizes the fair value of derivative instruments with termination, cross-default or collateral credit-risk-contingent features that are in a liability position as of December 31, as well as the fair value of assets that are netted against the liability in accordance with provisions within legally enforceable MNAs. ($ in thousands) 2018 2017 Gross liability fair value of contracts containing credit-risk-contingent features $ — $ 12 Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs — (12 ) Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently $ — $ — Off-balance The contractual amounts of off-balance ($ in thousands) 2018 2017 Commitments to invest in limited partnership interests $ 153,719 $ 174,520 Commitments to extend mortgage loans 10,000 — Private placement commitments — 75 In the preceding table, 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 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 predetermined interest rates. Commitments generally have fixed expiration dates or other termination clauses. The fair value of these commitments is insignificant. Private placement commitments represent commitments to purchase private placement private equity securities at a future date. The Company enters into these agreements in the normal course of business. The fair value of these commitments generally cannot be estimated on the date the commitment is made as the terms and conditions of the underlying private placement securities are not yet final. Because the private equity securities are not actively traded, it is not practical to estimate fair value of the commitments. |
Reserve for Life-Contingent Con
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 Immediate fixed annuities: Structured settlement annuities $ 1,882,914 $ 2,023,451 Other immediate fixed annuities 63,774 61,756 Traditional life insurance 258,336 242,197 Accident and health insurance 25,360 20,222 Other 1,752 1,340 Total reserve for life-contingent contract benefits $ 2,232,136 $ 2,348,966 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 assumptions range from 3.3% to 9.0% Present value of contractually specified future benefits Other immediate fixed annuities 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table Interest rate assumptions range from 0% to 11.5% Present value of expected future benefits based on historical experience Traditional life insurance Actual company experience plus loading Interest rate assumptions range from 3.0% to 8.0% Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims Accident and health insurance Actual company experience plus loading Interest rate assumptions range from 3.5% to 6.0% Unearned premium; additional contract reserves for mortality risk and unpaid claims Other: Variable annuity guaranteed minimum death benefits (1) Annuity 2012 mortality table with internal modifications Interest rate assumptions range from 2.0% to 5.8% Projected benefit ratio applied to cumulative 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 $80.6 million and $222.3 million is included in the reserve for life-contingent contract benefits with respect to this deficiency as of December 31, 2018 and 2017, respectively. The offset to this liability is recorded as a reduction of the unrealized net capital gains included in AOCI. As of December 31, contractholder funds consist of the following: ($ in thousands) 2018 2017 Interest-sensitive life insurance $ 740,694 $ 744,610 Investment contracts: Fixed annuities 1,896,222 2,091,214 Other investment contracts 44,384 39,060 Total contractholder funds $ 2,681,300 $ 2,874,884 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 0.0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.3% 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 0.0% to 9.0% for immediate annuities and 1.0% to 5.0% for other fixed annuities Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 11.9% 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) 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 of its variable annuity business through a reinsurance agreement with Prudential. Contractholder funds activity for the years ended December 31 is as follows: ($ in thousands) 2018 2017 2016 Balance, beginning of year $ 2,874,884 $ 3,018,733 $ 3,185,887 Deposits 107,606 103,107 105,671 Interest credited 91,430 97,355 102,805 Benefits (114,006 ) (108,819 ) (122,109 ) Surrenders and partial withdrawals (190,873 ) (166,388 ) (172,856 ) Contract charges (75,483 ) (74,733 ) (73,866 ) Net transfers from separate accounts 256 54 133 Other adjustments (12,514 ) 5,575 (6,932 ) Balance, end of year $ 2,681,300 $ 2,874,884 $ 3,018,733 The Company offered various guarantees to variable annuity contractholders. In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with Prudential. 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 annuity contracts’ separate accounts with guarantees included $202.2 million and $243.7 million of equity, fixed income and balanced mutual funds and $21.5 million and $30.6 million of money market mutual funds as of December 31, 2018 and 2017, respectively. The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. December 31, ($ in millions) 2018 2017 In the event of death Separate account value $ 223.7 $ 274.3 Net amount at risk (1) $ 16.1 $ 6.9 Average attained age of contractholders 67 years 67 years At annuitization (includes income benefit guarantees) Separate account value $ 16.9 $ 20.5 Net amount at risk (2) $ 2.9 $ 2.1 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 14.0 $ 17.4 Net amount at risk (3) $ 0.5 $ 0.4 Accumulation at specified dates Separate account value $ 25.3 $ 32.3 Net amount at risk (4) $ 0.8 $ 0.4 Weighted average waiting period until guarantee date 3 years 4 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 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 interest-sensitive Liability for Liability for Total Balance, December 31, 2017 (1) $ 27,927 $ 462 $ 3,075 $ 31,464 Less reinsurance recoverables 1,340 457 3,075 4,872 Net balance as of December 31, 2017 26,587 5 — 26,592 Incurred guarantee benefits 2,585 (1 ) — 2,584 Paid guarantee benefits (250 ) — — (250 ) Net change 2,335 (1 ) — 2,334 Net balance as of December 31, 2018 28,922 4 — 28,926 Plus reinsurance recoverables 1,752 568 3,401 5,721 Balance, December 31, 2018 (2) $ 30,674 $ 572 $ 3,401 $ 34,647 Balance, December 31, 2016 (3) $ 23,256 $ 961 $ 6,012 $ 30,229 Less reinsurance recoverables 1,574 956 6,012 8,542 Net balance as of December 31, 2016 21,682 5 — 21,687 Incurred guarantee benefits 4,905 — — 4,905 Paid guarantee benefits — — — — Net change 4,905 — — 4,905 Net balance as of December 31, 2017 26,587 5 — 26,592 Plus reinsurance recoverables 1,340 457 3,075 4,872 Balance, December 31, 2017 (1) $ 27,927 $ 462 $ 3,075 $ 31,464 (1) Included in the total liability balance as of December 31, 2017 are reserves for variable annuity death benefits of $1.3 million, variable annuity income benefits of $0.5 million, variable annuity accumulation benefits of $2.8 million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $26.6 million. (2) Included in the total liability balance as of December 31, 2018 are reserves for variable annuity death benefits of $1.8 million, variable annuity income benefits of $0.6 million, variable annuity accumulation benefits of $3.0 million, variable annuity withdrawal benefits of $0.4 million and other guarantees of $28.8 million. (3) Included in the total liability balance as of December 31, 2016 are reserves for variable annuity death benefits of $1.6 million, variable annuity income benefits of $0.9 million, variable annuity accumulation benefits of $5.7. million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $21.7 million. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017, 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 $170.6 million and $174.6 million as of December 31, 2018 and 2017, respectively, due from Prudential related to the disposal of its variable annuity business that was effected through reinsurance agreements. In 2018, premiums and contract charges of $5.2 million, contract benefits of $1.5 million, interest credited to contractholder funds of $4.5 million, and operating costs and expenses of $868 thousand were ceded to Prudential. In 2017, premiums and contract charges of $5.4 million, contract benefits of $(3.3) million, interest credited to contractholder funds of $4.8 million, and operating costs and expenses of $0.9 million were ceded to Prudential. In 2016, premiums and contract charges of $5.8 million, contract benefits of $(0.4) million, interest credited to contractholder funds of $4.8 million, and operating costs and expenses of $1.1 million were ceded to Prudential. In addition, as of December 31, 2018 and 2017 the Company had reinsurance recoverables of $722 thousand and $390 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, 2018, the gross life insurance in force was $42.96 billion of which $509.1 million and $8.41 billion were ceded to affiliated and unaffiliated reinsurers, respectively. The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Direct $ 199,289 $ 185,875 $ 163,745 Assumed - non-affiliate 685 672 652 Ceded Affiliate (1,972 ) (1,730 ) (1,607 ) Non-affiliate (17,361 ) (17,705 ) (18,200 ) Premiums and contract charges, net of reinsurance $ 180,641 $ 167,112 $ 144,590 The effects of reinsurance on contract benefits for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Direct $ 248,008 $ 237,998 $ 219,527 Assumed - non-affiliate 586 550 900 Ceded Affiliate (55 ) (882 ) 1,331 Non-affiliate (10,961 ) (7,173 ) (13,355 ) Contract benefits, net of reinsurance $ 237,578 $ 230,493 $ 208,403 The effects of reinsurance on interest credited to contractholder funds for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Direct $ 96,002 $ 102,164 $ 107,522 Assumed - non-affiliate 13 18 9 Ceded Non-affiliate (4,533 ) (4,805 ) (4,770 ) Interest credited to contractholder funds, net of reinsurance $ 91,482 $ 97,377 $ 102,761 In addition to amounts included in the table above are reinsurance premiums ceded to ALIC of $3.4 million, $3.5 million and $3.4 million in 2018, 2017 and 2016, respectively, under the terms of the structured settlement annuity reinsurance agreement (see Note 4). |
Deferred Policy Acquisition and
Deferred Policy Acquisition and Sales Inducement Costs | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Policy Acquisition and Sales Inducement Costs | 10. Deferred Policy Acquisition and Sales Inducement Costs Deferred policy acquisition costs for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Balance, beginning of year $ 146,333 $ 137,358 $ 141,189 Acquisition costs deferred 19,577 24,522 16,939 Amortization charged to income (16,299 ) (16,992 ) (16,127 ) Effect of unrealized gains and losses 6,276 1,445 (4,643 ) Balance, end of year $ 155,887 $ 146,333 $ 137,358 DSI activity, which primarily relates to interest-sensitive life contracts, for the years ended December 31 was as follows: ($ in thousands) 2018 2017 2016 Balance, beginning of year $ 2,278 $ 2,265 $ 2,349 Sales inducements deferred 128 167 170 Amortization charged to income (181 ) (188 ) (126 ) Effect of unrealized gains and losses 166 34 (128 ) Balance, end of year $ 2,391 $ 2,278 $ 2,265 |
Guarantees and Contingent Liabi
Guarantees and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
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. Since most states allow a credit against premium or other state related taxes for assessments, an asset is recorded based on paid and accrued assessments for the amount the Company expects to recover on the respective state’s tax return and is realized over the period allocated by each state. As of December 31, 2018 and 2017, the liability balance included in other liabilities and accrued expenses was $759 thousand and $760 thousand, respectively. The related premium tax offsets included in other assets were $1.1 million and $3.6 million as of December 31, 2018 and 2017, respectively. Guarantees Related to the disposal through reinsurance of the Company’s variable annuity business to Prudential in 2006, the Company, ALIC and the Corporation have agreed to indemnify Prudential for certain pre-closing The aggregate liability balance related to all guarantees was not material as of December 31, 2018. 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. Regulation and compliance The Company is subject to extensive laws, regulations and regulatory actions. From time to time, regulatory authorities or legislative bodies seek to impose additional regulations regarding agency and broker compensation, regulate the nature of and amount of investments, impose fines and penalties for unintended errors or mistakes, impose additional regulations regarding cybersecurity and privacy, and otherwise expand overall regulation of insurance products and the insurance industry. In addition, the Company is subject to laws and regulations administered and enforced by federal agencies, international agencies, and other organizations, including but not limited to the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the U.S. Department of Justice. 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, 2018 | |
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. Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted through income tax expense as changes in tax laws or rates are enacted. Tax Legislation On December 22, 2017, the Tax Legislation became effective and impacted the Company generally in three areas: 1. Amended the U.S. Internal Revenue Code of 1986, as amended, which among other items, permanently reduced the corporate income tax rate from a maximum of 35% to 21% beginning January 1, 2018. As a result, the corporate tax rate is not comparable between periods. 2. Contained several other provisions, such as limitations of deductibility of meals and entertainment and lobbying expenses and changes to the dividends received deduction. 3. Affected the timing of certain tax deductions for reserves and deferred acquisition costs, but does not impact the Company’s overall income tax expense. The Company recorded a net tax benefit of $102.5 million, recognized as a reduction to income tax expense in the Company’s Statements of Operations and Comprehensive Income for the year ended December 31, 2017. The net benefit was primarily due to re-measurement one-time During 2018, the impact of the Tax Legislation was adjusted from the Company’s preliminary estimates due to, among other things, changes in interpretations and assumptions the Company previously made and guidance that was issued resulting in a net tax benefit of $2.2 million, recognized as a reduction to income tax expense in the Company’s Statements of Operations and Comprehensive Income. The accounting for income tax effects of the Tax Legislation has been completed. The Internal Revenue Service (“IRS”) is currently examining the Allstate Group’s 2015 and 2016 federal income tax returns, with the 2017 tax year exam scheduled to begin mid-2019. The Company recognizes tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. The Company had no liability for unrecognized tax benefits as of December 31, 2018, 2017 or 2016, and believes it is reasonably possible that the liability balance will not significantly increase within the next twelve months. No amounts have been accrued for interest or penalties. The components of the deferred income tax assets and liabilities as of December 31 are as follows: ($ in thousands) 2018 2017 Deferred tax assets Accrued liabilities $ 25 $ 25 Other assets 5 5 Total deferred tax assets 30 30 Deferred tax liabilities Investments (75,864 ) (66,807 ) Life and annuity reserves (32,450 ) (28,526 ) DAC (18,713 ) (19,240 ) Unrealized net capital gains (15,178 ) (37,520 ) Unrealized foreign currency translation adjustments on limited partnerships (573 ) (552 ) Other liabilities (858 ) (1,111 ) Total deferred tax liabilities (143,636 ) (153,756 ) Net deferred tax liability $ (143,606 ) $ (153,726 ) 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 (benefit) for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Current $ 11,257 $ 12,837 $ 9,694 Deferred 1,570 (59,572 ) 18,314 Total income tax expense (benefit) $ 12,827 $ (46,735 ) $ 28,008 The Company paid income taxes of $16.0 million, $6.8 million and $9.6 million in 2018, 2017 and 2016, 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: 2018 2017 2016 Statutory federal income tax rate - expense 21.0 % 35.0 % 35.0 % State income taxes 5.4 0.7 1.2 Tax Legislation benefit (3.9 ) (65.1 ) — Other (0.4 ) (0.3 ) (0.9 ) Effective income tax rate - expense (benefit) 22.1 % (29.7 )% 35.3 % |
Statutory Financial Information
Statutory Financial Information and Dividend Limitations | 12 Months Ended |
Dec. 31, 2018 | |
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 National Association of Insurance Commissioners (“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 (loss) was $68.0 million, $50.8 million and $(12.6) million in 2018, 2017 and 2016, respectively. Statutory capital and surplus was $644.5 million and $603.1 million as of December 31, 2018 and 2017, 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 Department of Financial Services (“NYDFS”) is limited to formula amounts based on capital and surplus and net gain from operations excluding realized capital gains and losses, 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 any dividends in 2018. The maximum amount of dividends the Company will be able to pay without prior NYDFS approval at a given point in time during 2019 is $64.4 million. Any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which totaled $416.8 million as of December 31, 2018, 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 adjusted 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 adjusted statutory capital and surplus and authorized control level RBC of the Company were $661.8 million and $84.1 million, respectively, as of December 31, 2018. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
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 $0.4 million, $1.2 million and $1.0 million in 2018, 2017 and 2016, 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 $1.0 million, $895 thousand and $842 thousand in 2018, 2017 and 2016, respectively. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2018 | |
Other Comprehensive Income | 15. Other Comprehensive Income The components of other comprehensive (loss) income on a pre-tax after-tax 2018 2017 2016 ($ in thousands) Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-tax Unrealized net holding gains and losses arising during the period, net of related offsets $ (65,379 ) $ 13,730 $ (51,649 ) $ (89,152 ) $ 31,203 $ (57,949 ) $ 15,344 $ (5,370 ) $ 9,974 Less: reclassification adjustment of realized capital gains and losses (1,359 ) 285 (1,074 ) 12,710 (4,449 ) 8,261 (22,431 ) 7,851 (14,580 ) Unrealized net capital gains and losses (64,020 ) 13,445 (50,575 ) (101,862 ) 35,652 (66,210 ) 37,775 (13,221 ) 24,554 Unrealized foreign currency translation adjustments 124 (26 ) 98 3,706 (1,297 ) 2,409 1,751 (613 ) 1,138 Other comprehensive (loss) income $ (63,896 ) $ 13,419 $ (50,477 ) $ (98,156 ) $ 34,355 $ (63,801 ) $ 39,526 $ (13,834 ) $ 25,692 |
Summary of Investments Other Th
Summary of Investments Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
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 DECEMBER 31, 2018 ($ in thousands) Cost/ amortized cost Fair value Amount at which Type of investment Fixed maturities: Bonds: United States government, government agencies and authorities $ 76,070 $ 85,464 $ 85,464 States, municipalities and political subdivisions 615,511 703,923 703,923 Foreign governments 128,926 136,822 136,822 Public utilities 630,966 668,672 668,672 All other corporate bonds 2,874,820 2,885,189 2,885,189 Asset-backed securities 19,906 19,888 19,888 Residential mortgage-backed securities 14,134 15,079 15,079 Commercial mortgage-backed securities 6,142 6,337 6,337 Redeemable preferred stocks 8,635 8,970 8,970 Total fixed maturities 4,375,110 $ 4,530,344 4,530,344 Equity securities: Common stocks: Public utilities 2,243 $ 2,645 2,645 Banks, trusts and insurance companies 11,431 12,850 12,850 Industrial, miscellaneous and all other 161,600 167,474 167,474 Nonredeemable preferred stocks 1,955 2,001 2,001 Total equity securities 177,229 $ 184,970 184,970 Mortgage loans on real estate (none acquired in satisfaction of debt) 696,062 $ 699,936 696,062 Policy loans 39,374 39,374 Derivative instruments 653 $ 653 653 Limited partnership interests 382,853 382,853 Short-term investments 88,552 $ 88,548 88,548 Total investments $ 5,759,833 $ 5,922,804 |
Reinsurance_2
Reinsurance | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance | ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK SCHEDULE IV - REINSURANCE ($ in thousands) Gross amount Ceded to other companies (1) Assumed from other companies Net amount Percentage of amount assumed to net Year ended December 31, 2018 Life insurance in force $ 42,502,450 $ 8,914,558 $ 455,594 $ 34,043,486 1.3 % Premiums and contract charges: Life insurance $ 154,016 $ 18,322 $ 685 $ 136,379 0.5 % Accident and health insurance 45,273 1,011 — 44,262 — % Total premiums and contract charges $ 199,289 $ 19,333 $ 685 $ 180,641 0.4 % Year ended December 31, 2017 Life insurance in force $ 41,866,862 $ 9,142,525 $ 467,937 $ 33,192,274 1.4 % Premiums and contract charges: Life insurance $ 149,811 $ 18,316 $ 672 $ 132,167 0.5 % Accident and health insurance 36,064 1,119 — 34,945 — % Total premiums and contract charges $ 185,875 $ 19,435 $ 672 $ 167,112 0.4 % Year ended December 31, 2016 Life insurance in force $ 41,053,412 $ 9,300,738 $ 480,632 $ 32,233,306 1.5 % Premiums and contract charges: Life insurance $ 146,274 $ 18,584 $ 652 $ 128,342 0.5 % Accident and health insurance 17,471 1,223 — 16,248 — % Total premiums and contract charges $ 163,745 $ 19,807 $ 652 $ 144,590 0.5 % (1) No reinsurance or coinsurance income was netted against premiums ceded in 2018, 2017 or 2016. |
Valuation Allowances and Qualif
Valuation Allowances and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Valuation Allowances and Qualifying Accounts | ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK SCHEDULE V - VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS Additions ($ in thousands) Description Balance beginning of period Charged expenses Other additions Deductions Balance end of period Year ended December 31, 2018 Allowance for estimated losses on mortgage loans $ — $ — $ — $ — $ — Year ended December 31, 2017 Allowance for estimated losses on mortgage loans $ — $ — $ — $ — $ — Year ended December 31, 2016 Allowance for estimated losses on mortgage loans $ — $ — $ — $ — $ — |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Investments | Investments Fixed income securities include bonds, asset-backed securities (“ABS”), residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and redeemable preferred stocks. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale pay-downs 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, exchange traded funds, non-redeemable Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include private equity funds, real estate funds and other funds. Investments in limited partnership interests purchased prior to January 1, 2018 where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies are accounted for at fair value primarily utilizing the net asset value (“NAV”) as a practical expedient to determine fair value. Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Policy loans are carried at unpaid principal balances. Other investments consist of derivatives. Derivatives are carried at fair value. Investment income primarily consists of interest, dividends, income from limited partnership interests, and income from certain derivative transactions. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend pay-downs, 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, valuation changes of equity investments, including equity securities and certain limited partnerships where the underlying assets are predominately public equity securities, and periodic changes in fair value and settlements of certain derivatives including hedge ineffectiveness. Realized capital gains and losses on investment sales are determined on a specific identification basis. |
Derivative and embedded derivative financial instruments | Derivative and embedded derivative financial instruments Derivative financial instruments include equity futures, options, interest rate caps, foreign currency forwards 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 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, other liabilities and accrued expenses or contractholder funds. The income statement effects of derivatives, including fair value gains and losses and accrued periodic settlements, are reported either in realized capital gains and losses or in a single line item together with the results of the associated asset or liability for which risks are being managed. 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 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 and therefore are primarily classified as long-duration contracts. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized over the life of the policy in relation to premiums. Immediate annuities with life contingencies, including certain structured settlement annuities, provide benefits 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 primarily 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 500 Index (“S&P 500”). 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. |
Other revenue presentation | Other revenue presentation The Company revised the presentation of total revenue to include other revenue. Previously, components of other revenue were presented within operating costs and expenses and primarily represent gross dealer concessions received in connection with Allstate exclusive agencies and exclusive financial specialists sales of non-proprietary |
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 policies are deferred and recorded as DAC. These costs are principally agency’s 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 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. For traditional life and voluntary accident and health 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. The Company periodically reviews the recoverability of DAC for these policies using actual experience and current assumptions. Prior to fourth quarter 2017, the Company evaluated traditional life insurance products and immediate annuities with life contingencies on an aggregate basis. Beginning in fourth quarter 2017, traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance products are reviewed individually, consistent with the review of these products performed by The Allstate Corporation. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. For interest-sensitive life insurance, 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 10-20 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 mortality, persistency, 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 contracts 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 AOCI. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in AOCI 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 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 Income taxes are accounted for using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are investments (including unrealized capital gains and losses), insurance reserves and DAC. A deferred tax asset valuation allowance is established when it is more likely than not such assets will not be realized. The Company recognizes interest expense related to income tax matters in income tax expense and penalties in operating costs and expenses. |
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. The assumptions are established at the time the policy is issued and are generally not changed during the life of the policy. The Company periodically reviews the adequacy of reserves for these policies using actual experience and current assumptions. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. Prior to fourth quarter 2017, the Company evaluated traditional life insurance products and immediate annuities with life contingencies on an aggregate basis. Beginning in fourth quarter 2017, traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance are reviewed individually, consistent with the review of these products performed by The Allstate Corporation. The Company also reviews these policies for circumstances where projected profits would be recognized in early years followed by projected losses in later years. If this circumstance exists, the Company will accrue a liability, during the period of profits, to offset the losses at such time as the future losses are expected to commence using a method updated prospectively over time. 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 AOCI. |
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 accounts 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 Commitments to invest, commitments to purchase private placement securities, commitments to extend mortgage loans and financial guarantees have off-balance |
Adopted and pending accounting standards | Adopted accounting standard Recognition and Measurement of Financial Assets and Financial Liabilities Effective January 1, 2018, the Company adopted new Financial Accounting Standards Board (“FASB”) guidance requiring equity investments, including equity securities and limited partnership interests not accounted for under the equity method of accounting or that do not result in consolidation to be measured at fair value with changes in fair value recognized in net income. The guidance clarifies that an entity should evaluate the realizability of deferred tax assets related to available-for-sale Upon adoption of the new guidance on January 1, 2018, $42 million of pre-tax after-tax Upon adoption of the new guidance on January 1, 2018, the carrying value of cost method limited partnership interests increased $8 million, pre-tax, after-tax Pending accounting standards Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance which revises the credit loss recognition criteria for certain financial assets measured at amortized cost, including reinsurance recoverables. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model. The objective of the expected credit loss model is for the reporting entity to recognize its estimate of expected credit losses for affected financial assets in a valuation allowance deducted from the amortized cost basis of the related financial assets that results in presenting the net carrying value of the financial assets at the amount expected to be collected. The reporting entity must consider all relevant information available when estimating expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts over the life of an asset. Financial assets may be evaluated individually or on a pooled basis when they share similar risk characteristics. The measurement of credit losses for available-for-sale Accounting for Hedging Activities In August 2017, the FASB issued amendments intended to better align hedge accounting with an organization’s risk management activities. The amendments expand hedge accounting for nonfinancial and financial risk components and revise the measurement methodologies to better align with an organization’s risk management activities. Separate presentation of hedge ineffectiveness is eliminated to provide greater transparency of the full impact of hedging by requiring presentation of the results of the hedged item and hedging instrument in a single financial statement line item. In addition, the amendments are designed to reduce complexity by simplifying the manner in which assessments of hedge effectiveness may be performed. The guidance is effective for reporting periods beginning after December 15, 2018. The presentation and disclosure guidance is effective on a prospective basis. The impact of adoption is not expected to be material to the Company’s results of operations or financial position. Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued guidance revising the accounting for certain long-duration insurance contracts. The new guidance changes the measurement of the Company’s reserves for traditional life, life-contingent immediate annuities and certain voluntary accident and health insurance products. Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy terminations, will be required to be reviewed and updated at least annually. The effect of updating measurement assumptions other than the discount rate are required to be determined on a retrospective basis and reported in net income. In addition, cash flows under the new guidance are required to be discounted using an upper medium grade fixed income instrument yield that is updated through OCI at each reporting date. These changes will replace current GAAP, which utilizes assumptions set at policy issuance until such time as the assumptions result in reserves that are deficient when compared to reserves computed using current assumptions. Under current GAAP, premium deficiency reserves are recognized in the amount of the deficiency, if any, computed using current assumptions. The new guidance requires DAC and other capitalized balances currently amortized in proportion to premiums or gross profits to be amortized on a constant level basis over the expected term for all long-duration insurance contracts. DAC will not be subject to loss recognition testing but will be reduced when actual experience exceeds expected experience (i.e. as a result of unexpected contract terminations). The new guidance will no longer require adjustments to DAC and DSI related to unrealized gains and losses on investment securities supporting the related business. Market risk benefit product features are required to be measured at fair value with changes in fair value recorded in net income with the exception of changes in the fair value attributable to changes in the Company’s own credit risk, which are required to be recognized in OCI. Substantially all of the Company’s market risk benefits are reinsured and therefore these impacts are not expected to be material to the Company. The new guidance is to be included in the comparable financial statements issued in reporting periods beginning after December 15, 2020, thereby requiring restatement of prior periods presented. Early adoption is permitted. The new guidance will be applied to affected contracts and DAC on the basis of existing carrying amounts at the earliest period presented or it may be applied retrospectively using actual historical experience as of contract inception. The new guidance for market risk benefits is required to be adopted retrospectively. The Company is evaluating the anticipated impacts of applying the new guidance to both retained income and AOCI. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of the business and related cash flows are unchanged. The Company has not completed its evaluation of the specific impacts of adopting the new guidance, but anticipates the financial statement impact of migrating from existing GAAP to that required by the new guidance to be material, largely attributed to the impact of transitioning from an original investment-based discount rate to one based on an upper-medium grade fixed income investment yield and updates to mortality assumptions that had previously been locked in at issuance. The Company expects the most significant impacts will occur within the life-contingent immediate annuity products. The revised accounting for DAC will be applied prospectively using the new model and any DAC effects existing in AOCI as a result of applying existing GAAP at the date of adoption will be reversed. |
General (Tables)
General (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Premiums and Contract Charges by Product | The following table summarizes premiums and contract charges by product. ($ in thousands) 2018 2017 2016 Premiums Traditional life insurance $ 59,185 $ 55,996 $ 52,333 Accident and health insurance 44,262 34,945 16,248 Total premiums 103,447 90,941 68,581 Contract charges Interest-sensitive life insurance 76,931 76,103 75,940 Fixed annuities 263 68 69 Total contract charges 77,194 76,171 76,009 Total premiums and contract charges $ 180,641 $ 167,112 $ 144,590 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 2016 Net change in proceeds managed Net change in short-term investments $ (10,721 ) $ 1,864 $ 38,737 Operating cash flow (used) provided $ (10,721 ) $ 1,864 $ 38,737 Net change in liabilities Liabilities for collateral, beginning of year $ (59,067 ) $ (60,931 ) $ (99,668 ) Liabilities for collateral, end of year (69,788 ) (59,067 ) (60,931 ) Operating cash flow provided (used) $ 10,721 $ (1,864 ) $ (38,737 ) |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 value ($ in thousands) Gains Losses December 31, 2018 U.S. government and agencies $ 76,070 $ 9,394 $ — $ 85,464 Municipal 615,511 88,530 (118 ) 703,923 Corporate 3,505,786 118,034 (69,959 ) 3,553,861 Foreign government 128,926 7,896 — 136,822 ABS 19,906 — (18 ) 19,888 RMBS 14,134 969 (24 ) 15,079 CMBS 6,142 197 (2 ) 6,337 Redeemable preferred stock 8,635 335 — 8,970 Total fixed income securities $ 4,375,110 $ 225,355 $ (70,121 ) $ 4,530,344 December 31, 2017 U.S. government and agencies $ 115,747 $ 12,310 $ (5 ) $ 128,052 Municipal 615,231 114,177 (75 ) 729,333 Corporate 3,570,015 236,659 (10,943 ) 3,795,731 Foreign government 166,043 13,722 — 179,765 ABS 41,725 210 (127 ) 41,808 RMBS 20,666 1,303 (14 ) 21,955 CMBS 11,855 25 (472 ) 11,408 Redeemable preferred stock 8,726 947 — 9,673 Total fixed income securities $ 4,550,008 $ 379,353 $ (11,636 ) $ 4,917,725 |
Schedule of Net Investment Income | Net investment income Net investment income for the years ended December 31 is as follows: ($ in thousands) 2018 2017 2016 Fixed income securities $ 214,039 $ 228,507 $ 226,894 Mortgage loans 30,920 28,263 28,577 Equity securities 5,565 5,465 5,868 Limited partnership interests (1)(2) 43,365 53,917 38,485 Short-term investments 2,966 1,200 826 Policy loans 2,339 2,443 2,456 Investment income, before expense 299,194 319,795 303,106 Investment expense (11,311 ) (9,100 ) (7,261 ) Net investment income $ 287,883 $ 310,695 $ 295,845 (1) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net investment income. (2) Includes net investment income of $26.4 million for EMA limited partnership interests and $17.0 million for limited partnership interests carried at fair value for 2018. |
Schedule of Realized Capital Gains (Losses) by Asset Type | Realized capital gains (losses) by asset type for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Fixed income securities $ (1,306 ) $ 5,436 $ (17,145 ) Mortgage loans 466 1,128 — Equity securities (16,364 ) 799 (5,570 ) Limited partnership interests (3,895 ) 6,451 590 Derivatives 638 52,506 23,781 Short-term investments (93 ) 12 (17 ) Realized capital gains (losses) $ (20,554 ) $ 66,332 $ 1,639 |
Schedule of Realized Capital Gains (Losses) by Transaction Type | Realized capital gains (losses) by transaction type for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Impairment write-downs (1) $ (285 ) $ (5,370 ) $ (15,303 ) Change in intent write-downs (1) — — (654 ) Net OTTI losses recognized in earnings (285 ) (5,370 ) (15,957 ) Sales (1) (1,548 ) 19,196 (6,185 ) Valuation of equity investments (1)(2) (19,359 ) — — Valuation and settlements of derivative instruments 638 52,506 23,781 Realized capital gains (losses) $ (20,554 ) $ 66,332 $ 1,639 (1) Due to the adoption of the recognition and measurement accounting standard, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments and are no longer included in impairment write-downs, change in intent write-downs and sales. (2) Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities. |
Schedule of Net Pre-Tax Appreciation (Decline) of Equity Securities and Limited Partnership Interests Carried at Fair Value Recognized in Net Income | The following table presents the net pre-tax ($ in thousands) For the Equity securities $ (12,897 ) Limited partnership interests carried at fair value 16,968 Total $ 4,071 |
Schedule of Other-Than-Temporary Impairment Losses by Asset Type | OTTI losses by asset type for the years ended December 31 are as follows: 2018 2017 2016 ($ in thousands) Gross Included Net Gross Included Net Gross Included Net Fixed income securities: Corporate $ — $ — $ — $ (1,481 ) $ — $ (1,481 ) $ (8,306 ) $ 4,205 $ (4,101 ) RMBS — — — — — — 1 (1 ) — CMBS (68 ) (217 ) (285 ) (2,338 ) 893 (1,445 ) (785 ) 452 (333 ) Total fixed income securities (68 ) (217 ) (285 ) (3,819 ) 893 (2,926 ) (9,090 ) 4,656 (4,434 ) Equity securities (1) — — — (2,422 ) — (2,422 ) (11,103 ) — (11,103 ) Limited partnership interests (1) — — — (22 ) — (22 ) (420 ) — (420 ) OTTI losses $ (68 ) $ (217 ) $ (285 ) $ (6,263 ) $ 893 $ (5,370 ) $ (20,613 ) $ 4,656 $ (15,957 ) (1) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities and limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net income and are no longer included in the table above. |
Schedule of other-than-temporary impairment losses on fixed income securities included in Accumulated Other Comprehensive Income | The total amount of OTTI losses included in AOCI at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amounts exclude $1.9 million and $1.3 million as of December 31, 2018 and 2017, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date. ($ in thousands) December 31, December 31, CMBS $ (358 ) $ (975 ) |
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) 2018 2017 2016 Beginning balance $ (3,192 ) $ (4,594 ) $ (1,173 ) Additional credit loss for securities previously other-than-temporarily impaired (285 ) (128 ) (357 ) Additional credit loss for securities not previously other-than-temporarily impaired — (2,798 ) (4,077 ) Reduction in credit loss for securities disposed or collected 793 4,328 1,013 Ending balance $ (2,684 ) $ (3,192 ) $ (4,594 ) |
Schedule of Unrealized Net Capital Gains and Losses Included in Accumulated Other Comprehensive Income | Unrealized net capital gains and losses included in AOCI are as follows: ($ in thousands) Fair value Gross unrealized Unrealized net December 31, 2018 Gains Losses Fixed income securities $ 4,530,344 $ 225,355 $ (70,121 ) $ 155,234 Short-term investments 88,548 — (4 ) (4 ) EMA limited partnerships (1) (50 ) Unrealized net capital gains and losses, pre-tax 155,180 Amounts recognized for: Insurance reserves (2) (80,628 ) DAC and DSI (3) (2,277 ) Amounts recognized (82,905 ) Deferred income taxes (15,178 ) Unrealized net capital gains and losses, after-tax $ 57,097 (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 unrealized 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 lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate 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. ($ in thousands) Fair value Gross unrealized Unrealized net December 31, 2017 Gains Losses Fixed income securities $ 4,917,725 $ 379,353 $ (11,636 ) $ 367,717 Equity securities 194,533 42,758 (388 ) 42,370 Short-term investments 88,786 — (13 ) (13 ) EMA limited partnerships (10 ) Unrealized net capital gains and losses, pre-tax 410,064 Amounts recognized for: Insurance reserves (222,342 ) DAC and DSI (9,057 ) Amounts recognized (231,399 ) Deferred income taxes (37,520 ) Unrealized net capital gains and losses, after-tax $ 141,145 |
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) 2018 2017 2016 Fixed income securities $ (212,483 ) $ 29,700 $ 41,965 Equity securities (1) — 32,927 12,743 Short-term investments 9 (12 ) (3 ) EMA limited partnerships (40 ) 51 (3 ) Total (212,514 ) 62,666 54,702 Amounts recognized for: Insurance reserves 141,714 (165,992 ) (11,943 ) DAC and DSI 6,780 1,465 (4,984 ) Amounts recognized 148,494 (164,527 ) (16,927 ) Deferred income taxes 13,445 60,664 (13,221 ) (Decrease) increase in unrealized net capital gains and losses, after-tax $ (50,575 ) $ (41,197 ) $ 24,554 (1) Upon adoption of the recognition and measurement accounting standard on January 1, 2018, $42.4 million of pre-tax |
Summary of Gross Unrealized Losses and Fair Value of Fixed Income and Equity Securities by Length of Time | The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position. Less than 12 months 12 months or more Total ($ in thousands) Number of issues Fair value Unrealized Number Fair Unrealized December 31, 2018 Fixed income securities Municipal 1 $ 9,371 $ (11 ) 1 $ 4,893 $ (107 ) $ (118 ) Corporate 451 1,308,566 (40,510 ) 123 480,729 (29,449 ) (69,959 ) ABS 1 10,010 (9 ) 1 9,878 (9 ) (18 ) RMBS 90 1,086 (5 ) 19 826 (19 ) (24 ) CMBS — — — 1 113 (2 ) (2 ) Total fixed income securities 543 $ 1,329,033 $ (40,535 ) 145 $ 496,439 $ (29,586 ) $ (70,121 ) Investment grade fixed income securities 309 $ 1,111,745 $ (27,375 ) 122 $ 470,388 $ (26,471 ) $ (53,846 ) Below investment grade fixed income securities 234 217,288 (13,160 ) 23 26,051 (3,115 ) (16,275 ) Total fixed income securities 543 $ 1,329,033 $ (40,535 ) 145 $ 496,439 $ (29,586 ) $ (70,121 ) December 31, 2017 Fixed income securities U.S. government and agencies 2 $ 39,867 $ (5 ) — $ — $ — $ (5 ) Municipal 1 4,925 (75 ) — — — (75 ) Corporate 147 527,594 (4,216 ) 47 191,534 (6,727 ) (10,943 ) ABS 4 24,836 (127 ) — — — (127 ) RMBS 47 1,720 (10 ) 24 216 (4 ) (14 ) CMBS — — — 2 8,325 (472 ) (472 ) Redeemable preferred stock 1 1 — — — — — Total fixed income securities 202 598,943 (4,433 ) 73 200,075 (7,203 ) (11,636 ) Equity securities 63 7,294 (330 ) 3 759 (58 ) (388 ) Total fixed income and equity securities 265 $ 606,237 $ (4,763 ) 76 $ 200,834 $ (7,261 ) $ (12,024 ) Investment grade fixed income securities 137 $ 532,387 $ (3,093 ) 64 $ 185,093 $ (6,447 ) $ (9,540 ) Below investment grade fixed income securities 65 66,556 (1,340 ) 9 14,982 (756 ) (2,096 ) Total fixed income securities 202 $ 598,943 $ (4,433 ) 73 $ 200,075 $ (7,203 ) $ (11,636 ) |
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) 2018 2017 California 18.4 % 19.4 % Texas 16.1 14.5 North Carolina 8.8 5.0 New Jersey 6.6 8.5 Nevada 6.3 3.8 Illinois 6.1 5.7 |
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) 2018 2017 Apartment complex 31.3 % 26.3 % Office buildings 27.2 28.2 Retail 17.3 19.3 Warehouse 15.7 16.5 Other 8.5 9.7 Total 100.0 % 100.0 % |
Summary of Carrying Value of Non-Impaired Mortgage Loans by Debt Service Coverage Ration Distribution | The following table reflects the carrying value of non-impaired 2018 2017 ($ in thousands) Debt service coverage ratio distribution Fixed rate Variable Total Fixed rate Variable Total Below 1.0 $ — $ — $ — $ — $ — $ — 1.0 - 1.25 25,447 — 25,447 50,411 — 50,411 1.26 - 1.50 189,063 — 189,063 172,800 — 172,800 Above 1.50 453,153 28,399 481,552 405,931 — 405,931 Total non-impaired $ 667,663 $ 28,399 $ 696,062 $ 629,142 $ — $ 629,142 |
Schedule of Municipal Bonds Held For Investment by Geographic Distribution | The Company maintains a diversified portfolio of municipal bonds which totaled $703.9 million and $729.3 million as of December 31, 2018 and 2017, respectively. The municipal bond portfolio includes general obligations of state and local issuers and revenue bonds (including pre refunded bonds, which are bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest). The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio. (% of municipal bond portfolio carrying value) 2018 2017 California 28.1 % 27.7 % Texas 12.2 11.9 Oregon 7.6 7.2 Illinois 5.9 5.8 |
Mortgage loans | |
Schedule of Securities Based on Contractual Maturities | The contractual maturities of the mortgage loan portfolio as of December 31, 2018 are as follows: ($ in thousands) Number of loans Carrying value Percent 2019 1 $ 10,000 1.4 % 2020 6 27,402 3.9 2021 11 69,528 10.0 2022 13 84,178 12.1 Thereafter 68 504,954 72.6 Total 99 $ 696,062 100.0 % |
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, 2018: ($ in thousands) Amortized cost Fair value Due in one year or less $ 310,224 $ 315,802 Due after one year through five years 1,495,331 1,516,902 Due after five years through ten years 1,502,982 1,498,622 Due after ten years 1,026,391 1,157,714 4,334,928 4,489,040 ABS, RMBS and CMBS 40,182 41,304 Total $ 4,375,110 $ 4,530,344 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 as of December 31, 2018. ($ in thousands) Quoted prices (Level 1) Significant (Level 2) Significant (Level 3) Counterparty Balance Assets Fixed income securities: U.S. government and agencies $ 36,299 $ 49,165 $ — $ 85,464 Municipal — 683,102 20,821 703,923 Corporate - public — 2,437,942 6,761 2,444,703 Corporate - privately placed — 1,097,968 11,190 1,109,158 Foreign government — 136,822 — 136,822 ABS - consumer and other — 19,888 — 19,888 RMBS — 15,079 — 15,079 CMBS — 6,337 — 6,337 Redeemable preferred stock — 8,970 — 8,970 Total fixed income securities 36,299 4,455,273 38,772 4,530,344 Equity securities 172,077 731 12,162 184,970 Short-term investments 50,353 38,195 — 88,548 Other investments: Free-standing derivatives — 1,240 394 $ (981 ) 653 Separate account assets 241,710 — — 241,710 Other assets 1 — 169,386 169,387 Total recurring basis assets $ 500,440 $ 4,495,439 $ 220,714 $ (981 ) $ 5,215,612 % of total assets at fair value 9.6 % 86.2 % 4.2 % — % 100.0 % Investments reported at NAV 104,778 Total $ 5,320,390 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (3,801 ) $ (3,801 ) Other liabilities: Free-standing derivatives — (192 ) — $ 11 (181 ) Total recurring basis liabilities $ — $ (192 ) $ (3,801 ) $ 11 $ (3,982 ) % of total liabilities at fair value — % 4.8 % 95.5 % (0.3 )% 100.0 % The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2017. ($ in thousands) Quoted prices (Level 1) Significant (Level 2) Significant (Level 3) Counterparty Balance Assets Fixed income securities: U.S. government and agencies $ 42,427 $ 85,625 $ — $ 128,052 Municipal — 708,155 21,178 729,333 Corporate - public — 2,565,223 7,312 2,572,535 Corporate - privately placed — 1,167,218 55,978 1,223,196 Foreign government — 179,765 — 179,765 ABS - consumer and other — 26,603 15,205 41,808 RMBS — 21,955 — 21,955 CMBS — 11,408 — 11,408 Redeemable preferred stock — 9,672 1 9,673 Total fixed income securities 42,427 4,775,624 99,674 4,917,725 Equity securities 186,446 928 7,159 194,533 Short-term investments 20,594 68,192 — 88,786 Other investments: Free-standing derivatives — 2,885 336 $ (115 ) 3,106 Separate account assets 293,836 — — 293,836 Other assets — — 166,290 166,290 Total recurring basis assets $ 543,303 $ 4,847,629 $ 273,459 $ (115 ) $ 5,664,276 % of total assets at fair value 9.6 % 85.6 % 4.8 % — % 100.0 % Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (4,796 ) $ (4,796 ) Other liabilities: Free-standing derivatives — (1,601 ) — $ 345 (1,256 ) Total recurring basis liabilities $ — $ (1,601 ) $ (4,796 ) $ 345 $ (6,052 ) % of total liabilities at fair value — % 26.5 % 79.2 % (5.7 )% 100.0 % |
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 value Valuation technique Unobservable input Range Weighted average December 31, 2018 Other assets - Structured settlement annuity reinsurance agreement $169,386 Stochastic cash flow model Ultimate reinvestment spreads 129.8 - 218.6 169.3 basis points December 31, 2017 Other assets - Structured settlement annuity reinsurance agreement $166,290 Stochastic cash flow model Ultimate reinvestment spreads 129.8 - 218.6 basis points 169.3 basis points |
Schedule of Rollforward of Level Three Assets and Liabilities Held at Fair Value on Recurring Basis | The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018. Total gains (losses) included in: ($ in thousands) Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 21,178 $ — $ (357 ) $ — $ — Corporate - public 7,312 1 (383 ) — — Corporate - privately placed 55,978 4 (639 ) — (22,956 ) ABS - consumer and other 15,205 — (205 ) — — Redeemable preferred stock 1 — — — (1 ) Total fixed income securities 99,674 5 (1,584 ) — (22,957 ) Equity securities 7,159 2,600 (5 ) — — Free-standing derivatives, net 336 65 — — — Other assets 166,290 3,096 — — — Total recurring Level 3 assets $ 273,459 $ 5,766 $ (1,589 ) $ — $ (22,957 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (4,796 ) $ 995 $ — $ — $ — Total recurring Level 3 liabilities $ (4,796 ) $ 995 $ — $ — $ — Purchases Sales Issues Settlements Balance as of Assets Fixed income securities: Municipal $ — $ — $ — $ — $ 20,821 Corporate - public — — — (169 ) 6,761 Corporate - privately placed — — — (21,197 ) 11,190 ABS - consumer and other — — — (15,000 ) — Redeemable preferred stock — — — — — Total fixed income securities — — — (36,366 ) 38,772 Equity securities 3,723 (1,315 ) — — 12,162 Free-standing derivatives, net 66 — — (73 ) 394 Other assets — — — — 169,386 Total recurring Level 3 assets $ 3,789 $ (1,315 ) $ — $ (36,439 ) $ 220,714 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (3,801 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (3,801 ) (1) The effect to net income totals $6.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $5.8 million in realized capital gains and losses, $3 thousand in net investment income, $1.3 million in interest credited to contractholder funds and $(326) thousand in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2017. ($ in thousands) Total gains (losses) included in: Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 22,723 $ 15 $ 347 $ — $ — Corporate - public 4,091 — (64 ) — (1,565 ) Corporate - privately placed 75,713 4,080 (4,520 ) — — ABS - consumer and other 14,803 — 402 — — Redeemable preferred stock — — — — — Total fixed income securities 117,330 4,095 (3,835 ) — (1,565 ) Equity securities 5,920 585 492 — (275 ) Free-standing derivatives, net 311 (54 ) — — — Other assets 109,578 56,712 — — — Total recurring Level 3 assets $ 233,139 $ 61,338 $ (3,343 ) $ — $ (1,840 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (7,177 ) $ 2,381 $ — $ — $ — Total recurring Level 3 liabilities $ (7,177 ) $ 2,381 $ — $ — $ — Purchases Sales Issues Settlements Balance as of Assets Fixed income securities: Municipal $ — $ — $ — $ (1,907 ) $ 21,178 Corporate - public 4,989 — — (139 ) 7,312 Corporate - privately placed — (18,000 ) — (1,295 ) 55,978 ABS - consumer and other — — — — 15,205 Redeemable preferred stock 1 — — — 1 Total fixed income securities 4,990 (18,000 ) — (3,341 ) 99,674 Equity securities 1,018 (581 ) — — 7,159 Free-standing derivatives, net 127 — — (48 ) 336 Other assets — — — — 166,290 Total recurring Level 3 assets $ 6,135 $ (18,581 ) $ — $ (3,389 ) $ 273,459 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (4,796 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (4,796 ) (1) The effect to net income totals $63.7 million and is reported in the Statements of Operations and Comprehensive Income as follows: $60.7 million in realized capital gains and losses, $606 thousand in net investment income, $(556) thousand in interest credited to contractholder funds and $2.9 million in contract benefits. The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2016. ($ in thousands) Total gains (losses) included in: Balance as of Net income (1) OCI Transfers into Level 3 Transfers out of Level 3 Assets Fixed income securities: Municipal $ 32,286 $ 355 $ (495 ) $ — $ — Corporate - public 10,139 (2 ) (14 ) 1,655 (7,479 ) Corporate - privately placed 211,858 (4,074 ) 7,947 — (131,723 ) ABS - CDO 9,650 — 350 — — ABS - consumer and other 15,704 — (901 ) — — Total fixed income securities 279,637 (3,721 ) 6,887 1,655 (139,202 ) Equity securities 6,935 (4,463 ) 1,001 — — Free-standing derivatives, net 329 (30 ) — — — Other assets 82,774 26,804 — — — Total recurring Level 3 assets $ 369,675 $ 18,590 $ 7,888 $ 1,655 $ (139,202 ) Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (7,900 ) $ 723 $ — $ — $ — Total recurring Level 3 liabilities $ (7,900 ) $ 723 $ — $ — $ — Purchases Sales Issues Settlements Balance as of Assets Fixed income securities: Municipal $ — $ (7,515 ) $ — $ (1,908 ) $ 22,723 Corporate - public — — — (208 ) 4,091 Corporate - privately placed 697 — — (8,992 ) 75,713 ABS - CDO — — — (10,000 ) — ABS - consumer and other — — — — 14,803 Total fixed income securities 697 (7,515 ) — (21,108 ) 117,330 Equity securities 2,987 (540 ) — — 5,920 Free-standing derivatives, net 103 — — (91 ) 311 Other assets — — — — 109,578 Total recurring Level 3 assets $ 3,787 $ (8,055 ) $ — $ (21,199 ) $ 233,139 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ — $ — $ (7,177 ) Total recurring Level 3 liabilities $ — $ — $ — $ — $ (7,177 ) (1) The effect to net income totals $19.3 million and is reported in the Statements of Operations and Comprehensive Income as follows: $18.6 million in realized capital gains and losses, $44 thousand in net investment income, $(702) thousand in interest credited to contractholder funds and $1.4 million in contract benefits. |
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held | The table below provides valuation changes included in net income for Level 3 assets and liabilities held as of December 31. ($ in thousands) 2018 2017 2016 Assets Fixed income securities: Municipal $ — $ 15 $ 16 Corporate 3 5 (4,079 ) Total fixed income securities 3 20 (4,063 ) Free-standing derivatives, net 65 (55 ) (30 ) Equity securities 2,594 586 — Other assets 3,096 56,712 26,804 Total recurring Level 3 assets $ 5,758 $ 57,263 $ 22,711 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ 995 $ 2,381 $ 723 Total recurring Level 3 liabilities $ 995 $ 2,381 $ 723 |
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, 2018 December 31, 2017 ($ in thousands) Fair value Carrying value Fair value Carrying value Fair value Mortgage loans Level 3 $ 696,062 $ 699,936 $ 629,142 $ 655,601 Financial liabilities December 31, 2018 December 31, 2017 ($ in thousands) Fair value Carrying value Fair value Carrying value Fair value Contractholder funds on investment contracts Level 3 $ 1,755,866 $ 1,821,641 $ 1,944,244 $ 2,062,405 Liability for collateral Level 2 69,788 69,788 59,067 59,067 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Off-balance sheet Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018. None of these derivatives are designated as accounting hedging instruments. Volume (1) ($ in thousands, except number of contracts) Balance sheet location Notional amount Number contracts Fair net Gross asset Gross liability Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 1,500 n/a $ 17 $ 17 $ — Equity and index contracts Options Other investments — 122 556 556 — Futures Other assets — 1 1 1 — Foreign currency contracts Foreign currency forwards Other investments 16,091 n/a 670 684 (14 ) Total asset derivatives $ 17,591 123 $ 1,244 $ 1,258 $ (14 ) Liability derivatives Interest rate contracts Interest rate cap agreements Other liabilities & $ 12,600 n/a $ 377 $ 377 $ — Equity and index contracts Options Other liabilities & — 121 (178 ) — (178 ) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 25,381 n/a (3,003 ) — (3,003 ) Guaranteed withdrawal benefits Contractholder funds 14,507 n/a (398 ) — (398 ) Equity-indexed options in life product contracts Contractholder funds 36,265 n/a (400 ) — (400 ) Total liability derivatives 88,753 121 (3,602 ) $ 377 $ (3,979 ) Total derivatives $ 106,344 244 $ (2,358 ) (1) Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) 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, 2017. None of these derivatives are designated as accounting hedging instruments. Volume (1) ($ in thousands, except number of contracts) Balance sheet location Notional amount Number contracts Fair value, net Gross asset Gross liability Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 13,500 n/a $ 318 $ 318 $ — Equity and index contracts Options Other investments — 105 2,800 2,800 — Foreign currency contracts Foreign currency forwards Other investments 140 n/a (12 ) — (12 ) Other contracts Structured settlement annuity reinsurance agreement Other assets — n/a 166,290 166,290 — Total asset derivatives $ 13,640 105 $ 169,396 $ 169,408 $ (12 ) Liability derivatives Interest rate contracts Interest rate cap agreements Other liabilities & $ 2,300 n/a $ 18 $ 18 $ — Equity and index contracts Options and futures Other liabilities & — 106 (1,149 ) — (1,149 ) Foreign currency contracts Foreign currency forwards Other liabilities & 24,622 (355 ) 85 (440 ) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 32,447 n/a (2,754 ) — (2,754 ) Guaranteed withdrawal benefits Contractholder funds 17,774 n/a (321 ) — (321 ) Equity-indexed options in life product contracts Contractholder funds 28,833 n/a (1,721 ) — (1,721 ) Total liability derivatives 105,976 106 (6,282 ) $ 103 $ (6,385 ) Total derivatives $ 119,616 211 $ 163,114 (1) Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) |
Schedule of gross and net amount for the Company's OTC derivatives subject to enforceable master netting arrangements | The following table provides gross and net amounts for the Company’s OTC derivatives, all of which are subject to enforceable master netting agreements. Offsets ($ in thousands) Gross amount Counter- party netting Cash collateral (received) pledged Net amount balance sheet Securities collateral (received) pledged Net amount December 31, 2018 Asset derivatives $ 1,078 $ (391 ) $ (590 ) $ 97 $ — $ 97 Liability derivatives (14 ) 391 (380 ) (3 ) — (3 ) December 31, 2017 Asset derivatives $ 421 $ (115 ) $ — $ 306 $ — $ 306 Liability derivatives (452 ) 115 230 (107 ) — (107 ) |
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 in the Statements of Operations and Comprehensive Income. ($ in thousands) Realized Contract benefits Interest Total gain (loss) 2018 Interest rate contracts $ 65 $ — $ — $ 65 Equity and index contracts — — (768 ) (768 ) Embedded derivative financial instruments — (326 ) 1,321 995 Foreign currency contracts 887 — — 887 Other contracts - structured settlement annuity reinsurance agreement (314 ) — — (314 ) Total $ 638 $ (326 ) $ 553 $ 865 2017 Interest rate contracts $ (54 ) $ — $ — $ (54 ) Equity and index contracts — — 1,289 1,289 Embedded derivative financial instruments — 2,937 (556 ) 2,381 Foreign currency contracts (697 ) — — (697 ) Other contracts - structured settlement annuity reinsurance agreement 53,257 — — 53,257 Total $ 52,506 $ 2,937 $ 733 $ 56,176 2016 Interest rate contracts $ (30 ) $ — $ — $ (30 ) Equity and index contracts — — 405 405 Embedded derivative financial instruments — 1,425 (702 ) 723 Foreign currency contracts 431 — — 431 Other contracts - structured settlement annuity reinsurance agreement 23,380 — — 23,380 Total $ 23,781 $ 1,425 $ (297 ) $ 24,909 |
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. 2018 2017 ($ in thousands) (1) Number Notional (2) Credit (2) Exposure, (2) Number Notional (2) Credit (2) Exposure, (2) A+ 2 $ 30,191 $ 1,064 $ 97 2 $ 13,640 $ 305 $ 305 (1) The lower of S&P or Moody’s long-term debt issuer ratings. (2) Only OTC derivatives with a net positive fair value are included for each counterparty. |
Summary of Fair Value of Derivative Instruments with Termination, Cross-Default Or Collateral Credit-Risk-Contingent Features | The following summarizes the fair value of derivative instruments with termination, cross-default or collateral credit-risk-contingent features that are in a liability position as of December 31, as well as the fair value of assets that are netted against the liability in accordance with provisions within legally enforceable MNAs. ($ in thousands) 2018 2017 Gross liability fair value of contracts containing credit-risk-contingent features $ — $ 12 Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs — (12 ) Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently $ — $ — |
Schedule of Contractual Amounts of Off Balance Sheet Financial instruments | The contractual amounts of off-balance ($ in thousands) 2018 2017 Commitments to invest in limited partnership interests $ 153,719 $ 174,520 Commitments to extend mortgage loans 10,000 — Private placement commitments — 75 |
Reserve for Life-Contingent C_2
Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 Immediate fixed annuities: Structured settlement annuities $ 1,882,914 $ 2,023,451 Other immediate fixed annuities 63,774 61,756 Traditional life insurance 258,336 242,197 Accident and health insurance 25,360 20,222 Other 1,752 1,340 Total reserve for life-contingent contract benefits $ 2,232,136 $ 2,348,966 |
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 assumptions range from 3.3% to 9.0% Present value of contractually specified future benefits Other immediate fixed annuities 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table Interest rate assumptions range from 0% to 11.5% Present value of expected future benefits based on historical experience Traditional life insurance Actual company experience plus loading Interest rate assumptions range from 3.0% to 8.0% Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims Accident and health insurance Actual company experience plus loading Interest rate assumptions range from 3.5% to 6.0% Unearned premium; additional contract reserves for mortality risk and unpaid claims Other: Variable annuity guaranteed minimum death benefits (1) Annuity 2012 mortality table with internal modifications Interest rate assumptions range from 2.0% to 5.8% Projected benefit ratio applied to cumulative 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) 2018 2017 Interest-sensitive life insurance $ 740,694 $ 744,610 Investment contracts: Fixed annuities 1,896,222 2,091,214 Other investment contracts 44,384 39,060 Total contractholder funds $ 2,681,300 $ 2,874,884 |
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 0.0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.3% 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 0.0% to 9.0% for immediate annuities and 1.0% to 5.0% for other fixed annuities Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 11.9% 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) 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 of 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) 2018 2017 2016 Balance, beginning of year $ 2,874,884 $ 3,018,733 $ 3,185,887 Deposits 107,606 103,107 105,671 Interest credited 91,430 97,355 102,805 Benefits (114,006 ) (108,819 ) (122,109 ) Surrenders and partial withdrawals (190,873 ) (166,388 ) (172,856 ) Contract charges (75,483 ) (74,733 ) (73,866 ) Net transfers from separate accounts 256 54 133 Other adjustments (12,514 ) 5,575 (6,932 ) Balance, end of year $ 2,681,300 $ 2,874,884 $ 3,018,733 |
Summary of 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) 2018 2017 In the event of death Separate account value $ 223.7 $ 274.3 Net amount at risk (1) $ 16.1 $ 6.9 Average attained age of contractholders 67 years 67 years At annuitization (includes income benefit guarantees) Separate account value $ 16.9 $ 20.5 Net amount at risk (2) $ 2.9 $ 2.1 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 14.0 $ 17.4 Net amount at risk (3) $ 0.5 $ 0.4 Accumulation at specified dates Separate account value $ 25.3 $ 32.3 Net amount at risk (4) $ 0.8 $ 0.4 Weighted average waiting period until guarantee date 3 years 4 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 interest-sensitive Liability for Liability for Total Balance, December 31, 2017 (1) $ 27,927 $ 462 $ 3,075 $ 31,464 Less reinsurance recoverables 1,340 457 3,075 4,872 Net balance as of December 31, 2017 26,587 5 — 26,592 Incurred guarantee benefits 2,585 (1 ) — 2,584 Paid guarantee benefits (250 ) — — (250 ) Net change 2,335 (1 ) — 2,334 Net balance as of December 31, 2018 28,922 4 — 28,926 Plus reinsurance recoverables 1,752 568 3,401 5,721 Balance, December 31, 2018 (2) $ 30,674 $ 572 $ 3,401 $ 34,647 Balance, December 31, 2016 (3) $ 23,256 $ 961 $ 6,012 $ 30,229 Less reinsurance recoverables 1,574 956 6,012 8,542 Net balance as of December 31, 2016 21,682 5 — 21,687 Incurred guarantee benefits 4,905 — — 4,905 Paid guarantee benefits — — — — Net change 4,905 — — 4,905 Net balance as of December 31, 2017 26,587 5 — 26,592 Plus reinsurance recoverables 1,340 457 3,075 4,872 Balance, December 31, 2017 (1) $ 27,927 $ 462 $ 3,075 $ 31,464 (1) Included in the total liability balance as of December 31, 2017 are reserves for variable annuity death benefits of $1.3 million, variable annuity income benefits of $0.5 million, variable annuity accumulation benefits of $2.8 million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $26.6 million. (2) Included in the total liability balance as of December 31, 2018 are reserves for variable annuity death benefits of $1.8 million, variable annuity income benefits of $0.6 million, variable annuity accumulation benefits of $3.0 million, variable annuity withdrawal benefits of $0.4 million and other guarantees of $28.8 million. (3) Included in the total liability balance as of December 31, 2016 are reserves for variable annuity death benefits of $1.6 million, variable annuity income benefits of $0.9 million, variable annuity accumulation benefits of $5.7. million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $21.7 million. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Effects of Reinsurance on Premiums and Contract Charges | The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Direct $ 199,289 $ 185,875 $ 163,745 Assumed - non-affiliate 685 672 652 Ceded Affiliate (1,972 ) (1,730 ) (1,607 ) Non-affiliate (17,361 ) (17,705 ) (18,200 ) Premiums and contract charges, net of reinsurance $ 180,641 $ 167,112 $ 144,590 |
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) 2018 2017 2016 Direct $ 248,008 $ 237,998 $ 219,527 Assumed - non-affiliate 586 550 900 Ceded Affiliate (55 ) (882 ) 1,331 Non-affiliate (10,961 ) (7,173 ) (13,355 ) Contract benefits, net of reinsurance $ 237,578 $ 230,493 $ 208,403 |
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) 2018 2017 2016 Direct $ 96,002 $ 102,164 $ 107,522 Assumed - non-affiliate 13 18 9 Ceded Non-affiliate (4,533 ) (4,805 ) (4,770 ) Interest credited to contractholder funds, net of reinsurance $ 91,482 $ 97,377 $ 102,761 |
Deferred Policy Acquisition a_2
Deferred Policy Acquisition and Sales Inducement Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Deferred Policy Acquisition Costs | Deferred policy acquisition costs for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Balance, beginning of year $ 146,333 $ 137,358 $ 141,189 Acquisition costs deferred 19,577 24,522 16,939 Amortization charged to income (16,299 ) (16,992 ) (16,127 ) Effect of unrealized gains and losses 6,276 1,445 (4,643 ) Balance, end of year $ 155,887 $ 146,333 $ 137,358 |
Schedule of Deferred Sales Inducement Activity | DSI activity, which primarily relates to interest-sensitive life contracts, for the years ended December 31 was as follows: ($ in thousands) 2018 2017 2016 Balance, beginning of year $ 2,278 $ 2,265 $ 2,349 Sales inducements deferred 128 167 170 Amortization charged to income (181 ) (188 ) (126 ) Effect of unrealized gains and losses 166 34 (128 ) Balance, end of year $ 2,391 $ 2,278 $ 2,265 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 Deferred tax assets Accrued liabilities $ 25 $ 25 Other assets 5 5 Total deferred tax assets 30 30 Deferred tax liabilities Investments (75,864 ) (66,807 ) Life and annuity reserves (32,450 ) (28,526 ) DAC (18,713 ) (19,240 ) Unrealized net capital gains (15,178 ) (37,520 ) Unrealized foreign currency translation adjustments on limited partnerships (573 ) (552 ) Other liabilities (858 ) (1,111 ) Total deferred tax liabilities (143,636 ) (153,756 ) Net deferred tax liability $ (143,606 ) $ (153,726 ) |
Components of Income Tax Expense | The components of income tax expense (benefit) for the years ended December 31 are as follows: ($ in thousands) 2018 2017 2016 Current $ 11,257 $ 12,837 $ 9,694 Deferred 1,570 (59,572 ) 18,314 Total income tax expense (benefit) $ 12,827 $ (46,735 ) $ 28,008 |
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: 2018 2017 2016 Statutory federal income tax rate - expense 21.0 % 35.0 % 35.0 % State income taxes 5.4 0.7 1.2 Tax Legislation benefit (3.9 ) (65.1 ) — Other (0.4 ) (0.3 ) (0.9 ) Effective income tax rate - expense (benefit) 22.1 % (29.7 )% 35.3 % |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 after-tax 2018 2017 2016 ($ in thousands) Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-tax Unrealized net holding gains and losses arising during the period, net of related offsets $ (65,379 ) $ 13,730 $ (51,649 ) $ (89,152 ) $ 31,203 $ (57,949 ) $ 15,344 $ (5,370 ) $ 9,974 Less: reclassification adjustment of realized capital gains and losses (1,359 ) 285 (1,074 ) 12,710 (4,449 ) 8,261 (22,431 ) 7,851 (14,580 ) Unrealized net capital gains and losses (64,020 ) 13,445 (50,575 ) (101,862 ) 35,652 (66,210 ) 37,775 (13,221 ) 24,554 Unrealized foreign currency translation adjustments 124 (26 ) 98 3,706 (1,297 ) 2,409 1,751 (613 ) 1,138 Other comprehensive (loss) income $ (63,896 ) $ 13,419 $ (50,477 ) $ (98,156 ) $ 34,355 $ (63,801 ) $ 39,526 $ (13,834 ) $ 25,692 |
General - Additional Informatio
General - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% |
Summary of Premiums and Contrac
Summary of Premiums and Contract Charges by Product (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product Information [Line Items] | |||
Premiums | $ 103,447 | $ 90,941 | $ 68,581 |
Contract charges | 77,194 | 76,171 | 76,009 |
Total premiums and contract charges | 180,641 | 167,112 | 144,590 |
Traditional life insurance | |||
Product Information [Line Items] | |||
Premiums | 59,185 | 55,996 | 52,333 |
Accident and health insurance | |||
Product Information [Line Items] | |||
Premiums | 44,262 | 34,945 | 16,248 |
Interest-sensitive life insurance | |||
Product Information [Line Items] | |||
Contract charges | 76,931 | 76,103 | 75,940 |
Fixed annuities | |||
Product Information [Line Items] | |||
Contract charges | $ 263 | $ 68 | $ 69 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cash collateral for securities loaned as percentage of fair value | 102.00% | |
New Accounting Pronouncement For Equity Securities | Accumulated other comprehensive income | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Significant impact of adoption of new accounting guidance | $ (42) | |
New Accounting Pronouncement For Equity Securities | Retained income | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Significant impact of adoption of new accounting guidance | 42 | |
New Accounting Pronouncement For Equity Securities | Retained income | Not To Be Recognized [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Significant impact of adoption of new accounting guidance | 33 | |
New Accounting Pronouncement For Limited Partnership Interests | Limited partnership interests | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Significant impact of adoption of new accounting guidance | 8 | |
New Accounting Pronouncement For Limited Partnership Interests | Retained income | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Significant impact of adoption of new accounting guidance | (8) | |
New Accounting Pronouncement For Limited Partnership Interests | Retained income | Not To Be Recognized [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Significant impact of adoption of new accounting guidance | $ 7 | |
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 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Cash Flow Information [Line Items] | ||||
Non-cash modifications of certain mortgage loans and fixed income securities | $ 8,200 | $ 1,500 | $ 5,400 | |
Liabilities for collateral received in conjunction with the securities lending program | $ 69,788 | $ 59,067 | $ 60,931 | $ 99,668 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net change in proceeds managed | |||
Net change in short-term investments | $ (10,721) | $ 1,864 | $ 38,737 |
Operating cash flow (used) provided | (10,721) | 1,864 | 38,737 |
Net change in liabilities | |||
Liabilities for collateral, beginning of year | (59,067) | (60,931) | (99,668) |
Liabilities for collateral, end of year | (69,788) | (59,067) | (60,931) |
Operating cash flow provided (used) | $ 10,721 | $ (1,864) | $ (38,737) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Operating expenses, including compensation, allocated by Allstate Insurance Company | $ 46,200 | $ 46,300 | $ 40,000 |
Reserve for annuities issued | 2,232,136 | 2,348,966 | |
Ceded premium related to structured settlement annuities | 11,054 | 11,481 | 11,788 |
Maximum amount of loans Corporation will have outstanding to all eligible subsidiaries at any given point in time | 1,000,000 | ||
Allstate Insurance Company ("AIC") | |||
Related Party Transaction [Line Items] | |||
Reserve for annuities issued | 1,420,000 | 1,420,000 | |
Allstate Distributors Services, LLC | |||
Related Party Transaction [Line Items] | |||
Broker-Dealer agreement, Promotion and marketing expense | 5 | 6 | 4 |
Allstate Financial Services, LLC | |||
Related Party Transaction [Line Items] | |||
Broker-Dealer agreement, Commission and other distribution expenses | 215 | 259 | 450 |
Allstate Life Insurance Company | |||
Related Party Transaction [Line Items] | |||
Reserve for annuities issued | 574,900 | 591,100 | |
Ceded premium related to structured settlement annuities | 3,400 | 3,500 | $ 3,400 |
Carrying value of structured settlement reinsurance treaty | $ 169,400 | $ 166,300 |
Schedule for Fixed Income Secur
Schedule for Fixed Income Securities at Amortized Cost, Gross Unrealized Gains and Losses and Fair Value (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 4,375,110 | $ 4,550,008 |
Fair value | 4,530,344 | 4,917,725 |
U.S. government and agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 76,070 | 115,747 |
Gross unrealized gains | 9,394 | 12,310 |
Gross unrealized losses | (5) | |
Fair value | 85,464 | 128,052 |
Municipal | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 615,511 | 615,231 |
Gross unrealized gains | 88,530 | 114,177 |
Gross unrealized losses | (118) | (75) |
Fair value | 703,923 | 729,333 |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 3,505,786 | 3,570,015 |
Gross unrealized gains | 118,034 | 236,659 |
Gross unrealized losses | (69,959) | (10,943) |
Fair value | 3,553,861 | 3,795,731 |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 128,926 | 166,043 |
Gross unrealized gains | 7,896 | 13,722 |
Fair value | 136,822 | 179,765 |
Residential mortgage-backed securities ("RMBS") | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 14,134 | 20,666 |
Gross unrealized gains | 969 | 1,303 |
Gross unrealized losses | (24) | (14) |
Fair value | 15,079 | 21,955 |
Commercial mortgage-backed securities ("CMBS") | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 6,142 | 11,855 |
Gross unrealized gains | 197 | 25 |
Gross unrealized losses | (2) | (472) |
Fair value | 6,337 | 11,408 |
ABS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 19,906 | 41,725 |
Gross unrealized gains | 210 | |
Gross unrealized losses | (18) | (127) |
Fair value | 19,888 | 41,808 |
Redeemable preferred stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8,635 | 8,726 |
Gross unrealized gains | 335 | 947 |
Fair value | 8,970 | 9,673 |
Fixed income securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,375,110 | 4,550,008 |
Gross unrealized gains | 225,355 | 379,353 |
Gross unrealized losses | (70,121) | (11,636) |
Fair value | $ 4,530,344 | $ 4,917,725 |
Schedule for Fixed Income Sec_2
Schedule for Fixed Income Securities Based on Contractual Maturities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized cost | ||
Due in one year or less | $ 310,224 | |
Due after one year through five years | 1,495,331 | |
Due after five years through ten years | 1,502,982 | |
Due after ten years | 1,026,391 | |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis, Total | 4,334,928 | |
ABS, RMBS and CMBS | 40,182 | |
Total | 4,375,110 | $ 4,550,008 |
Fair value | ||
Due in one year or less | 315,802 | |
Due after one year through five years | 1,516,902 | |
Due after five years through ten years | 1,498,622 | |
Due after ten years | 1,157,714 | |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Total | 4,489,040 | |
ABS, RMBS and CMBS | 41,304 | |
Total | $ 4,530,344 | $ 4,917,725 |
Schedule of Net Investment Inco
Schedule of Net Investment Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Net Investment Income [Line Items] | ||||
Investment income, before expense | $ 299,194 | $ 319,795 | $ 303,106 | |
Investment expense | (11,311) | (9,100) | (7,261) | |
Net investment income | 287,883 | 310,695 | 295,845 | |
Fixed income securities | ||||
Net Investment Income [Line Items] | ||||
Investment income, before expense | 214,039 | 228,507 | 226,894 | |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Investment income, before expense | 5,565 | 5,465 | 5,868 | |
Short-term | ||||
Net Investment Income [Line Items] | ||||
Investment income, before expense | 2,966 | 1,200 | 826 | |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Investment income, before expense | 30,920 | 28,263 | 28,577 | |
Limited partnership interests | ||||
Net Investment Income [Line Items] | ||||
Investment income, before expense | [1],[2] | 43,365 | 53,917 | 38,485 |
Net investment income | 17,000 | |||
Policy loans | ||||
Net Investment Income [Line Items] | ||||
Investment income, before expense | $ 2,339 | $ 2,443 | $ 2,456 | |
[1] | Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net investment income. | |||
[2] | Includes net investment income of $26.4 million for EMA limited partnership interests and $17.0 million for limited partnership interests carried at fair value for 2018. |
Schedule of Net Investment In_2
Schedule of Net Investment Income (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Investment Income [Line Items] | |||
Net investment income | $ 287,883 | $ 310,695 | $ 295,845 |
Limited partnership interests | |||
Net Investment Income [Line Items] | |||
Net investment income | 17,000 | ||
EMA Limited Partnership Interest | |||
Net Investment Income [Line Items] | |||
Net investment income | $ 26,400 |
Schedule of Realized Capital Ga
Schedule of Realized Capital Gains (Losses) by Asset Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | $ (20,554) | $ 66,332 | $ 1,639 |
Fixed income securities | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | (1,306) | 5,436 | (17,145) |
Equity securities | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | (16,364) | 799 | (5,570) |
Mortgage loans | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | 466 | 1,128 | |
Limited partnership interests | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | (3,895) | 6,451 | 590 |
Derivative instruments | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | 638 | 52,506 | 23,781 |
Short-term investments | |||
Gain (Loss) on Investments [Line Items] | |||
Realized capital gains and losses | $ (93) | $ 12 | $ (17) |
Schedule of Realized Capital _2
Schedule of Realized Capital Gains (Losses) by Transaction Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Gain (Loss) on Investments [Line Items] | ||||
Impairment write-downs | [1] | $ (285) | $ (5,370) | $ (15,303) |
Change in intent write-downs | [1] | (654) | ||
Net OTTI losses recognized in earnings | (285) | (5,370) | (15,957) | |
Sales | (1,548) | 19,196 | (6,185) | |
Valuation of equity investments | [1],[2] | (19,359) | ||
Valuation and settlements of derivative instruments | 638 | 52,506 | 23,781 | |
Realized capital gains (losses) | $ (20,554) | $ 66,332 | $ 1,639 | |
[1] | Due to the adoption of the recognition and measurement accounting standard, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments and are no longer included in impairment write-downs, change in intent write-downs and sales. | |||
[2] | Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities. |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Investments [Line Items] | |||
Net unrealized gains related to changes in valuation of fixed income securities subsequent to impairment measurement date | $ 1,900 | $ 1,300 | |
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 68,700 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 12,024 | ||
Unrealized losses related to securities with unrealized loss position greater than or equal to 20% of cost or amortized cost | 1,500 | ||
Limited partnership interests | 382,853 | 363,237 | |
Mortgage loans | 696,062 | 629,142 | |
Total impaired mortgage loans | 0 | 0 | |
Valuation allowances | 0 | 0 | |
Municipal debt carrying value | 703,900 | 729,300 | |
Short-term, at fair value | 88,548 | 88,786 | |
Policy loans | 39,374 | 39,589 | |
Other investments | 653 | 3,106 | |
Interest income on collateral, net of fees | 286 | 235 | $ 306 |
Debt securities | 4,530,344 | 4,917,725 | |
EMA limited partnerships | |||
Schedule of Investments [Line Items] | |||
Limited partnership interests | 278,100 | 282,800 | |
Fixed income securities | |||
Schedule of Investments [Line Items] | |||
Gross gains realized on sales of fixed income securities | 4,400 | 19,800 | 14,500 |
Gross losses realized on sales of fixed income securities | 5,400 | 8,200 | 21,700 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 70,121 | 11,636 | |
Fixed income securities on loan | 66,600 | 57,400 | |
Debt securities | 4,530,344 | 4,917,725 | |
Fixed income securities | Non Income Producing Investments | |||
Schedule of Investments [Line Items] | |||
Debt securities | 0 | ||
Equity securities | |||
Schedule of Investments [Line Items] | |||
Gross gains realized on sales of fixed income securities | 19,800 | 14,500 | |
Gross losses realized on sales of fixed income securities | 8,200 | $ 21,700 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 388 | ||
Investment grade fixed income securities | |||
Schedule of Investments [Line Items] | |||
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 53,900 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 53,846 | 9,540 | |
Below investment grade fixed income securities | |||
Schedule of Investments [Line Items] | |||
Unrealized losses related to securities with unrealized loss position less than 20% of cost or amortized cost | 14,800 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 16,275 | 2,096 | |
Available for sale Securities, Unrealized Losses Having Loss of Less than Twenty Percent, Less than 12 Months | 12,800 | ||
Debt securities | 279,200 | 311,300 | |
Fixed income securities and short-term investments | |||
Schedule of Investments [Line Items] | |||
Assets on deposit with regulatory authorities | 2,200 | ||
Cost-method limited partnership interests | |||
Schedule of Investments [Line Items] | |||
Limited partnership interests | 104,800 | $ 80,500 | |
Available-for-sale Securities [Member] | |||
Schedule of Investments [Line Items] | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 70,100 |
Schedule of Net Pre-Tax Appreci
Schedule of Net Pre-Tax Appreciation (Decline) of Equity Securities and Limited Partnership Interests Carried at Fair Value Recognized in Net Income (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Gain (Loss) on Investments [Line Items] | |
Net pre tax appreciation decline at fair value | $ 4,071 |
Equity securities | |
Gain (Loss) on Investments [Line Items] | |
Net pre tax appreciation decline at fair value | (12,897) |
Limited partnership interests | |
Gain (Loss) on Investments [Line Items] | |
Net pre tax appreciation decline at fair value | $ 16,968 |
Schedule of Other-Than-Temporar
Schedule of Other-Than-Temporary Impairment Losses by Asset Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | $ (68) | $ (6,263) | $ (20,613) | |
Included in OCI | (217) | 893 | 4,656 | |
Net | (285) | (5,370) | (15,957) | |
Corporate | ||||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | (1,481) | (8,306) | ||
Included in OCI | 4,205 | |||
Net | (1,481) | (4,101) | ||
Residential mortgage-backed securities ("RMBS") | ||||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | 1 | |||
Included in OCI | (1) | |||
Commercial mortgage-backed securities ("CMBS") | ||||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | (68) | (2,338) | (785) | |
Included in OCI | (217) | 893 | 452 | |
Net | (285) | (1,445) | (333) | |
Fixed income securities | ||||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | (68) | (3,819) | (9,090) | |
Included in OCI | (217) | 893 | 4,656 | |
Net | $ (285) | (2,926) | (4,434) | |
Equity securities | ||||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | [1] | (2,422) | (11,103) | |
Net | [1] | (2,422) | (11,103) | |
Limited Partner Interest | ||||
Other Than Temporary Impairment Losses By Asset Type [Line Items] | ||||
Gross | [1] | (22) | (420) | |
Net | [1] | $ (22) | $ (420) | |
[1] | Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities and limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net income and are no longer included in the table above. |
Schedule of Other-Than-Tempor_2
Schedule of Other-Than-Temporary Impairment Losses on Fixed Income Securities included in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commercial mortgage-backed securities ("CMBS") | ||
Other Than Temporary Impairment Losses Included In Accumulated Other Comprehensive Income [Line Items] | ||
Amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities, not included in earnings | $ (358) | $ (975) |
Schedule of Rollforwards of Cum
Schedule of Rollforwards of Cumulative Credit Losses Recognized in Earnings for Fixed Income Securities Held (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Other than Temporary Impairments [Line Items] | |||
Beginning balance | $ (3,192) | $ (4,594) | $ (1,173) |
Additional credit loss for securities previously other-than-temporarily impaired | (285) | (128) | (357) |
Additional credit loss for securities not previously other-than-temporarily impaired | (2,798) | (4,077) | |
Reduction in credit loss for securities disposed or collected | 793 | 4,328 | 1,013 |
Ending balance | $ (2,684) | $ (3,192) | $ (4,594) |
Schedule of Unrealized Net Capi
Schedule of Unrealized Net Capital Gains and Losses (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair value | |||
Fixed income securities | $ 4,530,344 | $ 4,917,725 | |
Equity securities | 194,533 | ||
Short-term investments | 88,548 | 88,786 | |
Gross unrealized Gains | |||
Fixed income securities | 225,355 | 379,353 | |
Equity securities | 42,758 | ||
Short-term investments | 0 | 0 | |
Gross unrealized Losses | |||
Fixed income securities | (70,121) | (11,636) | |
Equity securities | (388) | ||
Short-term investments | (4) | (13) | |
Unrealized net gains (losses) | |||
Fixed income securities | 155,234 | 367,717 | |
Equity securities | 42,370 | ||
Short-term investments | (4) | (13) | |
EMA limited partnerships | (50) | [1] | (10) |
Unrealized net capital gains and losses, pre-tax | 155,180 | 410,064 | |
Amounts recognized for: | |||
Insurance reserves | (80,628) | [2] | (222,342) |
DAC and DSI | (2,277) | [3] | (9,057) |
Amounts recognized | (82,905) | (231,399) | |
Deferred income taxes | (15,178) | (37,520) | |
Total unrealized net capital gains and losses | $ 57,097 | $ 141,145 | |
[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 unrealized 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 lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate 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. |
Schedule of Change in Unrealize
Schedule of Change in Unrealized net Capital Gains and Losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Change in unrealized net capital gains and losses | $ (212,514) | $ 62,666 | $ 54,702 | |
Amounts recognized for: | ||||
Insurance reserves | 141,714 | (165,992) | (11,943) | |
DAC and DSI | 6,780 | 1,465 | (4,984) | |
Amounts recognized | 148,494 | (164,527) | (16,927) | |
Deferred income taxes | 13,445 | 60,664 | (13,221) | |
(Decrease) increase in unrealized net capital gains and losses, after-tax | (50,575) | (41,197) | 24,554 | |
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 | (40) | 51 | (3) | |
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 | 9 | (12) | (3) | |
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 | $ (212,483) | 29,700 | 41,965 | |
Equity securities | ||||
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Change in unrealized net capital gains and losses | [1] | $ 32,927 | $ 12,743 | |
[1] | Upon adoption of the recognition and measurement accounting standard on January 1, 2018, $42.4 million of pre-tax unrealized net capital gains for equity securities were reclassified from AOCI to retained income. See Note 2 for further details. |
Schedule of Change in Unreali_2
Schedule of Change in Unrealized net Capital Gains and Losses (Parenthetical) (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Change In Unrealized Gain Loss Recognized In Accumulated Other Comprehensive Income Loss [Line Items] | |
Equity securities | $ 42,370 |
Summary of Gross Unrealized Los
Summary of Gross Unrealized Losses and Fair Value of Fixed Income and Equity Securities by Length of Time (Detail) $ in Thousands | Dec. 31, 2018USD ($)Securities | Dec. 31, 2017USD ($)Securities |
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 265 | |
Fair value, continuous unrealized loss position for less than 12 months | $ 606,237 | |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (4,763) | |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 76 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 200,834 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | (7,261) | |
Total unrealized losses | $ (12,024) | |
Municipal | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 1 | 1 |
Fair value, continuous unrealized loss position for less than 12 months | $ 9,371 | $ 4,925 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (11) | (75) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 1 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 4,893 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | (107) | |
Total unrealized losses | $ (118) | $ (75) |
Corporate | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 451 | 147 |
Fair value, continuous unrealized loss position for less than 12 months | $ 1,308,566 | $ 527,594 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (40,510) | $ (4,216) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 123 | 47 |
Fair value, continuous unrealized loss position for 12 months or more | $ 480,729 | $ 191,534 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (29,449) | (6,727) |
Total unrealized losses | $ (69,959) | $ (10,943) |
ABS | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 1 | 4 |
Fair value, continuous unrealized loss position for less than 12 months | $ 10,010 | $ 24,836 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (9) | (127) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 1 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 9,878 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | (9) | |
Total unrealized losses | $ (18) | $ (127) |
Residential mortgage-backed securities ("RMBS") | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 90 | 47 |
Fair value, continuous unrealized loss position for less than 12 months | $ 1,086 | $ 1,720 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (5) | $ (10) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 19 | 24 |
Fair value, continuous unrealized loss position for 12 months or more | $ 826 | $ 216 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (19) | (4) |
Total unrealized losses | $ (24) | $ (14) |
Commercial mortgage-backed securities ("CMBS") | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 1 | 2 |
Fair value, continuous unrealized loss position for 12 months or more | $ 113 | $ 8,325 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (2) | (472) |
Total unrealized losses | $ (2) | $ (472) |
Fixed income securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 543 | 202 |
Fair value, continuous unrealized loss position for less than 12 months | $ 1,329,033 | $ 598,943 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (40,535) | $ (4,433) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 145 | 73 |
Fair value, continuous unrealized loss position for 12 months or more | $ 496,439 | $ 200,075 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (29,586) | (7,203) |
Total unrealized losses | $ (70,121) | $ (11,636) |
Investment grade fixed income securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 309 | 137 |
Fair value, continuous unrealized loss position for less than 12 months | $ 1,111,745 | $ 532,387 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (27,375) | $ (3,093) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 122 | 64 |
Fair value, continuous unrealized loss position for 12 months or more | $ 470,388 | $ 185,093 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (26,471) | (6,447) |
Total unrealized losses | $ (53,846) | $ (9,540) |
Below investment grade fixed income securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 234 | 65 |
Fair value, continuous unrealized loss position for less than 12 months | $ 217,288 | $ 66,556 |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (13,160) | $ (1,340) |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 23 | 9 |
Fair value, continuous unrealized loss position for 12 months or more | $ 26,051 | $ 14,982 |
Unrealized losses, continuous unrealized loss position for 12 months or more | (3,115) | (756) |
Total unrealized losses | $ (16,275) | $ (2,096) |
US Government Agencies Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 2 | |
Fair value, continuous unrealized loss position for less than 12 months | $ 39,867 | |
Unrealized losses, continuous unrealized loss position for less than 12 months | (5) | |
Total unrealized losses | $ (5) | |
Redeemable preferred stock | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 1 | |
Fair value, continuous unrealized loss position for less than 12 months | $ 1 | |
Equity securities | ||
Schedule of Investments [Line Items] | ||
Number of issues, continuous unrealized loss position for less than 12 months | Securities | 63 | |
Fair value, continuous unrealized loss position for less than 12 months | $ 7,294 | |
Unrealized losses, continuous unrealized loss position for less than 12 months | $ (330) | |
Number of issues, continuous unrealized loss position for 12 months or more | Securities | 3 | |
Fair value, continuous unrealized loss position for 12 months or more | $ 759 | |
Unrealized losses, continuous unrealized loss position for 12 months or more | (58) | |
Total unrealized losses | $ (388) |
Schedule of Commercial Mortgage
Schedule of Commercial Mortgage Loans by Geographic Distribution (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
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 | 18.40% | 19.40% |
Illinois | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 6.10% | 5.70% |
New Jersey | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 6.60% | 8.50% |
Texas | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 16.10% | 14.50% |
North Carolina | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 8.80% | 5.00% |
Nevada | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 6.30% | 3.80% |
Schedule of Types of Properties
Schedule of Types of Properties Collateralizing Commercial Mortgage Loans (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
Apartment complex | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 31.30% | 26.30% |
Office buildings | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 27.20% | 28.20% |
Retail | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 17.30% | 19.30% |
Warehouse | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 15.70% | 16.50% |
Other | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of mortgage loan portfolio carrying value | 8.50% | 9.70% |
Schedule of Contractual Maturit
Schedule of Contractual Maturities of Mortgage Loans (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Loan | Dec. 31, 2017USD ($) | |
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 99 | |
Carrying value, maturing in 2019 | $ | $ 10,000 | |
Carrying value, maturing in 2020 | $ | 27,402 | |
Carrying value, maturing in 2021 | $ | 69,528 | |
Carrying value, maturing in 2022 | $ | 84,178 | |
Carrying value, maturing in Thereafter | $ | 504,954 | |
Carrying value, Total | $ | $ 696,062 | $ 629,142 |
Percentage of mortgage loan portfolio carrying value | 100.00% | 100.00% |
2019 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 1 | |
Percentage of mortgage loan portfolio carrying value | 1.40% | |
2020 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 6 | |
Percentage of mortgage loan portfolio carrying value | 3.90% | |
2021 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 11 | |
Percentage of mortgage loan portfolio carrying value | 10.00% | |
2022 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 13 | |
Percentage of mortgage loan portfolio carrying value | 12.10% | |
Thereafter | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | Loan | 68 | |
Percentage of mortgage loan portfolio carrying value | 72.60% |
Summary of Carrying Value of No
Summary of Carrying Value of Non-Impaired Mortgage Loans by Debt Service Coverage Ration Distribution (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Mortgage Loans on Real Estate [Line Items] | ||
Total | $ 696,062 | $ 629,142 |
Non-impaired mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 696,062 | 629,142 |
Fixed rate mortgage loans | Non-impaired mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 667,663 | 629,142 |
Variable rate mortage loans | Non-impaired mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 28,399 | |
1.0 - 1.25 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 25,447 | 50,411 |
1.0 - 1.25 | Fixed rate mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 25,447 | 50,411 |
1.26 - 1.50 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 189,063 | 172,800 |
1.26 - 1.50 | Fixed rate mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 189,063 | 172,800 |
Above 1.50 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 481,552 | 405,931 |
Above 1.50 | Fixed rate mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | 453,153 | $ 405,931 |
Above 1.50 | Variable rate mortage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Total | $ 28,399 |
Schedule of Municipal Bonds Hel
Schedule of Municipal Bonds Held For Investment by Geographic Distribution (Detail) | Dec. 31, 2018 | Dec. 31, 2017 |
California | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 28.10% | 27.70% |
Texas | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 12.20% | 11.90% |
Oregon | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 7.60% | 7.20% |
Illinois | ||
Schedule of Investments [Line Items] | ||
Percentage of municipal bond portfolio carrying value | 5.90% | 5.80% |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Commitments to invest in limited partnership interests | $ 40,000 | ||
Fixed income securities | 4,530,344 | $ 4,917,725 | |
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date, included in earnings | 6,800 | 59,600 | $ 23,400 |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | 5,758 | 57,263 | 22,711 |
Gains (losses) for Level 3 assets still held at the balance sheet date, included in interest credited to contract holder funds | 1,300 | (556) | (702) |
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in life and annuity contract benefits | (326) | 2,900 | 1,400 |
Capital Gain | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | 5,800 | 56,700 | 22,700 |
Investment Income | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in investment income | 3 | 606 | $ 14 |
Significant unobservable inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fixed income securities | 38,772 | 99,674 | |
Significant unobservable inputs (Level 3) | Fixed income securities - non-binding broker quotes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fixed income securities | $ 33,400 | $ 94,000 | |
Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liquidation period of underlying assets of the investees | 4 years | ||
Contractual obligations maturity term | 10 years | ||
Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liquidation period of underlying assets of the investees | 9 years | ||
Contractual obligations maturity term | 12 years |
Summary of Assets and Liabiliti
Summary of Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Fixed income securities | $ 4,530,344 | $ 4,917,725 |
Equity securities | 184,970 | 194,533 |
Short-term investments | 88,548 | 88,786 |
Other investments: | ||
Free-standing derivatives | 653 | 3,106 |
Separate account assets | 241,710 | 293,836 |
Other assets | 169,387 | 166,290 |
Total assets at fair value | $ 5,215,612 | $ 5,664,276 |
% of total assets at fair value | 100.00% | 100.00% |
Investments reported at NAV | $ 104,778 | |
Total | 5,320,390 | |
Contractholder funds: | ||
Derivatives embedded in life and annuity contracts | (3,801) | $ (4,796) |
Other liabilities: | ||
Other liabilities: Free-standing derivatives | (181) | (1,256) |
Total liabilities at fair value | $ (3,982) | $ (6,052) |
% of total liabilities at fair value | 100.00% | 100.00% |
U.S. government and agencies | ||
Assets | ||
Fixed income securities | $ 85,464 | $ 128,052 |
Municipal | ||
Assets | ||
Fixed income securities | 703,923 | 729,333 |
Corporate - public | ||
Assets | ||
Fixed income securities | 2,444,703 | 2,572,535 |
Corporate - privately placed | ||
Assets | ||
Fixed income securities | 1,109,158 | 1,223,196 |
Foreign government | ||
Assets | ||
Fixed income securities | 136,822 | 179,765 |
Residential mortgage-backed securities ("RMBS") | ||
Assets | ||
Fixed income securities | 15,079 | 21,955 |
Commercial mortgage-backed securities ("CMBS") | ||
Assets | ||
Fixed income securities | 6,337 | 11,408 |
Asset Backed Securities - consumer and other | ||
Assets | ||
Fixed income securities | 19,888 | 41,808 |
Redeemable preferred stock | ||
Assets | ||
Fixed income securities | 8,970 | 9,673 |
Counterparty and cash collateral netting | ||
Other investments: | ||
Free-standing derivatives | (981) | (115) |
Total assets at fair value | (981) | (115) |
Other liabilities: | ||
Other liabilities: Free-standing derivatives | 11 | 345 |
Total liabilities at fair value | $ 11 | $ 345 |
% of total liabilities at fair value | (0.30%) | (5.70%) |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Fixed income securities | $ 36,299 | $ 42,427 |
Equity securities | 172,077 | 186,446 |
Short-term investments | 50,353 | 20,594 |
Other investments: | ||
Separate account assets | 241,710 | 293,836 |
Other assets | 1 | |
Total assets at fair value | $ 500,440 | $ 543,303 |
% of total assets at fair value | 9.60% | 9.60% |
Quoted prices in active markets for identical assets (Level 1) | U.S. government and agencies | ||
Assets | ||
Fixed income securities | $ 36,299 | $ 42,427 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Fixed income securities | 4,455,273 | 4,775,624 |
Equity securities | 731 | 928 |
Short-term investments | 38,195 | 68,192 |
Other investments: | ||
Free-standing derivatives | 1,240 | 2,885 |
Total assets at fair value | $ 4,495,439 | $ 4,847,629 |
% of total assets at fair value | 86.20% | 85.60% |
Other liabilities: | ||
Other liabilities: Free-standing derivatives | $ (192) | $ (1,601) |
Total liabilities at fair value | $ (192) | $ (1,601) |
% of total liabilities at fair value | 4.80% | 26.50% |
Significant other observable inputs (Level 2) | U.S. government and agencies | ||
Assets | ||
Fixed income securities | $ 49,165 | $ 85,625 |
Significant other observable inputs (Level 2) | Municipal | ||
Assets | ||
Fixed income securities | 683,102 | 708,155 |
Significant other observable inputs (Level 2) | Corporate - public | ||
Assets | ||
Fixed income securities | 2,437,942 | 2,565,223 |
Significant other observable inputs (Level 2) | Corporate - privately placed | ||
Assets | ||
Fixed income securities | 1,097,968 | 1,167,218 |
Significant other observable inputs (Level 2) | Foreign government | ||
Assets | ||
Fixed income securities | 136,822 | 179,765 |
Significant other observable inputs (Level 2) | Residential mortgage-backed securities ("RMBS") | ||
Assets | ||
Fixed income securities | 15,079 | 21,955 |
Significant other observable inputs (Level 2) | Commercial mortgage-backed securities ("CMBS") | ||
Assets | ||
Fixed income securities | 6,337 | 11,408 |
Significant other observable inputs (Level 2) | Asset Backed Securities - consumer and other | ||
Assets | ||
Fixed income securities | 19,888 | 26,603 |
Significant other observable inputs (Level 2) | Redeemable preferred stock | ||
Assets | ||
Fixed income securities | 8,970 | 9,672 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Fixed income securities | 38,772 | 99,674 |
Equity securities | 12,162 | 7,159 |
Other investments: | ||
Free-standing derivatives | 394 | 336 |
Other assets | 169,386 | 166,290 |
Total assets at fair value | $ 220,714 | $ 273,459 |
% of total assets at fair value | 4.20% | 4.80% |
Contractholder funds: | ||
Derivatives embedded in life and annuity contracts | $ (3,801) | $ (4,796) |
Other liabilities: | ||
Total liabilities at fair value | $ (3,801) | $ (4,796) |
% of total liabilities at fair value | 95.50% | 79.20% |
Significant unobservable inputs (Level 3) | Municipal | ||
Assets | ||
Fixed income securities | $ 20,821 | $ 21,178 |
Significant unobservable inputs (Level 3) | Corporate - public | ||
Assets | ||
Fixed income securities | 6,761 | 7,312 |
Significant unobservable inputs (Level 3) | Corporate - privately placed | ||
Assets | ||
Fixed income securities | $ 11,190 | 55,978 |
Significant unobservable inputs (Level 3) | Asset Backed Securities - consumer and other | ||
Assets | ||
Fixed income securities | 15,205 | |
Significant unobservable inputs (Level 3) | Redeemable preferred stock | ||
Assets | ||
Fixed income securities | $ 1 |
Summary of Quantitative Informa
Summary of Quantitative Information About Significant Unobservable Inputs Used in Level Three Fair Value Measurements (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value | $ 5,215,612 | $ 5,664,276 |
Structured settlement annuities | Stochastic cash flow model | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value | $ 169,386 | $ 166,290 |
Structured settlement annuities | Minimum | Stochastic cash flow model | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Ultimate reinvestment spreads | 1.298% | 1.298% |
Structured settlement annuities | Maximum | Stochastic cash flow model | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Ultimate reinvestment spreads | 2.186% | 2.186% |
Structured settlement annuities | Weighted average | Stochastic cash flow model | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Ultimate reinvestment spreads | 1.693% | 1.693% |
Schedule of Rollforward of Leve
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | $ 273,459 | $ 233,139 | $ 369,675 | ||||
Level 3 assets, Total gains (losses) included in net income | 5,766 | [1] | 61,338 | [2] | 18,590 | [2] | |
Level 3 assets, Total gains (losses) included in OCI | (1,589) | (3,343) | 7,888 | ||||
Level 3 assets, Transfers into Level 3 | 1,655 | ||||||
Level 3 assets, Transfers out of Level 3 | (22,957) | (1,840) | (139,202) | ||||
Level 3 liabilities, Balance at beginning of period | (4,796) | (7,177) | (7,900) | ||||
Level 3 liabilities, Total gains (losses) included in net income | 995 | [1] | 2,381 | [2] | 723 | ||
Level 3 liabilities, Total gains (losses) included in OCI | 0 | 0 | 0 | ||||
Level 3 liabilities, Transfers into Level 3 | 0 | 0 | 0 | ||||
Level 3 liabilities, Transfers out of Level 3 | 0 | 0 | 0 | ||||
Level 3 assets, Purchases | 3,789 | 6,135 | 3,787 | ||||
Level 3 assets, Sales | (1,315) | (18,581) | (8,055) | ||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (36,439) | (3,389) | (21,199) | ||||
Level 3 assets, Balance at end of period | 220,714 | 273,459 | 233,139 | ||||
Level 3 liabilities, Purchases | 0 | 0 | 0 | ||||
Level 3 liabilities, Sales | 0 | 0 | 0 | ||||
Level 3 liabilities, Issues | 0 | 0 | 0 | ||||
Level 3 liabilities, Settlements | 0 | 0 | 0 | ||||
Level 3 liabilities, Balance at end of period | (3,801) | (4,796) | (7,177) | ||||
Municipal | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 21,178 | 22,723 | 32,286 | ||||
Level 3 assets, Total gains (losses) included in net income | [2] | 15 | 355 | ||||
Level 3 assets, Total gains (losses) included in OCI | (357) | 347 | (495) | ||||
Level 3 assets, Sales | (7,515) | ||||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (1,907) | (1,908) | |||||
Level 3 assets, Balance at end of period | 20,821 | 21,178 | 22,723 | ||||
Corporate - public | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 7,312 | 4,091 | 10,139 | ||||
Level 3 assets, Total gains (losses) included in net income | 1 | [1] | (2) | [2] | |||
Level 3 assets, Total gains (losses) included in OCI | (383) | (64) | (14) | ||||
Level 3 assets, Transfers into Level 3 | 1,655 | ||||||
Level 3 assets, Transfers out of Level 3 | (1,565) | (7,479) | |||||
Level 3 assets, Purchases | 4,989 | ||||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (169) | (139) | (208) | ||||
Level 3 assets, Balance at end of period | 6,761 | 7,312 | 4,091 | ||||
Corporate - privately placed | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 55,978 | 75,713 | 211,858 | ||||
Level 3 assets, Total gains (losses) included in net income | 4 | [1] | 4,080 | [2] | (4,074) | [2] | |
Level 3 assets, Total gains (losses) included in OCI | (639) | (4,520) | 7,947 | ||||
Level 3 assets, Transfers out of Level 3 | (22,956) | (131,723) | |||||
Level 3 assets, Purchases | 697 | ||||||
Level 3 assets, Sales | (18,000) | ||||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (21,197) | (1,295) | (8,992) | ||||
Level 3 assets, Balance at end of period | 11,190 | 55,978 | 75,713 | ||||
Asset Backed Securities - CDO | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 15,205 | 14,803 | 9,650 | ||||
Level 3 assets, Total gains (losses) included in OCI | (205) | 402 | 350 | ||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (15,000) | (10,000) | |||||
Level 3 assets, Balance at end of period | 15,205 | 14,803 | |||||
Asset Backed Securities - consumer and other | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 1 | 14,803 | 15,704 | ||||
Level 3 assets, Total gains (losses) included in OCI | (901) | ||||||
Level 3 assets, Transfers out of Level 3 | (1) | ||||||
Level 3 assets, Purchases | 1 | ||||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Balance at end of period | 1 | 14,803 | |||||
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 | 99,674 | 117,330 | 279,637 | ||||
Level 3 assets, Total gains (losses) included in net income | 5 | [1] | 4,095 | [2] | (3,721) | [2] | |
Level 3 assets, Total gains (losses) included in OCI | (1,584) | (3,835) | 6,887 | ||||
Level 3 assets, Transfers into Level 3 | 1,655 | ||||||
Level 3 assets, Transfers out of Level 3 | (22,957) | (1,565) | (139,202) | ||||
Level 3 assets, Purchases | 4,990 | 697 | |||||
Level 3 assets, Sales | (18,000) | (7,515) | |||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (36,366) | (3,341) | (21,108) | ||||
Level 3 assets, Balance at end of period | 38,772 | 99,674 | 117,330 | ||||
Equity securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 7,159 | 5,920 | 6,935 | ||||
Level 3 assets, Total gains (losses) included in net income | 2,600 | [1] | 585 | [2] | (4,463) | [2] | |
Level 3 assets, Total gains (losses) included in OCI | (5) | 492 | 1,001 | ||||
Level 3 assets, Transfers out of Level 3 | (275) | ||||||
Level 3 assets, Purchases | 3,723 | 1,018 | 2,987 | ||||
Level 3 assets, Sales | (1,315) | (581) | (540) | ||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Balance at end of period | 12,162 | 7,159 | 5,920 | ||||
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 | 336 | 311 | 329 | ||||
Level 3 assets, Total gains (losses) included in net income | 65 | [1] | (54) | [2] | (30) | [2] | |
Level 3 assets, Purchases | 66 | 127 | 103 | ||||
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Settlements | (73) | (48) | (91) | ||||
Level 3 assets, Balance at end of period | 394 | 336 | 311 | ||||
Other assets | |||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Level 3 assets, Balance at beginning of period | 166,290 | 109,578 | 82,774 | ||||
Level 3 assets, Total gains (losses) included in net income | 3,096 | [1] | 56,712 | [2] | 26,804 | [2] | |
Level 3 assets, Issues | 0 | 0 | 0 | ||||
Level 3 assets, Balance at end of period | 169,386 | 166,290 | 109,578 | ||||
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 | (4,796) | (7,177) | (7,900) | ||||
Level 3 liabilities, Total gains (losses) included in net income | 995 | [1] | 2,381 | [2] | 723 | ||
Level 3 liabilities, Total gains (losses) included in OCI | 0 | 0 | 0 | ||||
Level 3 liabilities, Transfers into Level 3 | 0 | 0 | 0 | ||||
Level 3 liabilities, Transfers out of Level 3 | 0 | 0 | 0 | ||||
Level 3 liabilities, Purchases | 0 | 0 | 0 | ||||
Level 3 liabilities, Sales | 0 | 0 | 0 | ||||
Level 3 liabilities, Issues | 0 | 0 | 0 | ||||
Level 3 liabilities, Settlements | 0 | 0 | 0 | ||||
Level 3 liabilities, Balance at end of period | $ (3,801) | $ (4,796) | $ (7,177) | ||||
[1] | The effect to net income totals $6.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $5.8 million in realized capital gains and losses, $3 thousand in net investment income, $1.3 million in interest credited to contractholder funds and $(326) thousand in contract benefits. | ||||||
[2] | The effect to net income totals $63.7 million and is reported in the Statements of Operations and Comprehensive Income as follows: $60.7 million in realized capital gains and losses, $606 thousand in net investment income, $(556) thousand in interest credited to contractholder funds and $2.9 million in contract benefits. |
Schedule of Rollforward of Le_2
Schedule of Rollforward of Level 3 Assets and Liabilities Held at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
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 | $ 6,800 | $ 63,700 | $ 19,300 | |||
Effect to net income included in investment income | 5,766 | [1] | 61,338 | [2] | 18,590 | [2] |
Effect to net income included in interest credited to contract holder funds | 1,300 | (556) | (702) | |||
Effect to net income included in contract benefits | (326) | 2,900 | 1,400 | |||
Capital Gain | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Effect to net income included in investment income | 5,800 | 60,700 | 18,600 | |||
Investment Income | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Effect to net income included in investment income | $ 3 | $ 606 | $ 44 | |||
[1] | The effect to net income totals $6.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $5.8 million in realized capital gains and losses, $3 thousand in net investment income, $1.3 million in interest credited to contractholder funds and $(326) thousand in contract benefits. | |||||
[2] | The effect to net income totals $63.7 million and is reported in the Statements of Operations and Comprehensive Income as follows: $60.7 million in realized capital gains and losses, $606 thousand in net investment income, $(556) thousand in interest credited to contractholder funds and $2.9 million in contract benefits. |
Schedule of Change in Unreali_3
Schedule of Change in Unrealized Gains and Losses Included in Net Income for Level Three Assets and Liabilities Held (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
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 | $ 5,758 | $ 57,263 | $ 22,711 | ||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 995 | [1] | 2,381 | [2] | 723 |
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 | 3 | 5 | (4,079) | ||
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 | 3 | 20 | (4,063) | ||
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 | 65 | (55) | (30) | ||
Equity 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 | 2,594 | 586 | |||
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 | 3,096 | 56,712 | 26,804 | ||
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 assets still held at the balance sheet date, included in earnings | $ 995 | 2,381 | 723 | ||
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 | $ 15 | $ 16 | |||
[1] | The effect to net income totals $6.8 million and is reported in the Statements of Operations and Comprehensive Income as follows: $5.8 million in realized capital gains and losses, $3 thousand in net investment income, $1.3 million in interest credited to contractholder funds and $(326) thousand in contract benefits. | ||||
[2] | The effect to net income totals $63.7 million and is reported in the Statements of Operations and Comprehensive Income as follows: $60.7 million in realized capital gains and losses, $606 thousand in net investment income, $(556) thousand in interest credited to contractholder funds and $2.9 million in contract benefits. |
Schedule of Carrying Values and
Schedule of Carrying Values and Fair Value Estimates of Financial Instruments not Carried at Fair Value (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial assets | ||||
Mortgage loans | $ 696,062 | $ 629,142 | ||
Financial liabilities | ||||
Liability for collateral | 69,788 | 59,067 | $ 60,931 | $ 99,668 |
Carrying value | ||||
Financial assets | ||||
Mortgage loans | 696,062 | 629,142 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 1,755,866 | 1,944,244 | ||
Liability for collateral | 69,788 | 59,067 | ||
Fair value | ||||
Financial assets | ||||
Mortgage loans | 699,936 | 655,601 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 1,821,641 | 2,062,405 | ||
Liability for collateral | $ 69,788 | $ 59,067 |
Summary of Volume and Fair Valu
Summary of Volume and Fair Value Positions of Derivative Instruments and Reporting Location in Statement of Financial Position (Detail) $ in Thousands | Dec. 31, 2018USD ($)Contract | Dec. 31, 2017USD ($)Contract |
Derivatives, Fair Value [Line Items] | ||
Total derivatives, Notional amount | $ 106,344 | $ 119,616 |
Total derivatives, Number of contracts | Contract | 244 | 211 |
Total derivatives | $ (2,358) | $ 163,114 |
Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | $ 17,591 | $ 13,640 |
Total asset derivatives, Number of contracts | Contract | 123 | 105 |
Total asset derivatives, Fair value, net | $ 1,244 | $ 169,396 |
Asset derivatives, Gross asset | 1,258 | 169,408 |
Asset derivatives, Gross liability | (14) | (12) |
Total liability derivatives, Notional amount | $ 88,753 | $ 105,976 |
Total liability derivatives, Number of contracts | Contract | 121 | 106 |
Total liability derivatives, Fair value, net | $ (3,602) | $ (6,282) |
Liability derivatives, Gross asset | 377 | 103 |
Liability derivatives, Gross liability | (3,979) | (6,385) |
Derivatives not designated as accounting hedging instruments | Contractholder funds | Guaranteed accumulation benefits | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 25,381 | 32,447 |
Total liability derivatives, Fair value, net | (3,003) | (2,754) |
Liability derivatives, Gross asset | 0 | 0 |
Liability derivatives, Gross liability | (3,003) | (2,754) |
Derivatives not designated as accounting hedging instruments | Contractholder funds | Withdrawal benefit | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 14,507 | 17,774 |
Total liability derivatives, Fair value, net | (398) | (321) |
Liability derivatives, Gross asset | 0 | 0 |
Liability derivatives, Gross liability | (398) | (321) |
Derivatives not designated as accounting hedging instruments | Interest rate cap agreement | Other investments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 1,500 | 13,500 |
Total asset derivatives, Fair value, net | 17 | 318 |
Asset derivatives, Gross asset | 17 | 318 |
Asset derivatives, Gross liability | 0 | 0 |
Derivatives not designated as accounting hedging instruments | Interest rate cap agreement | Other liabilities and accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 12,600 | 2,300 |
Total liability derivatives, Fair value, net | 377 | 18 |
Liability derivatives, Gross asset | 377 | 18 |
Liability derivatives, Gross liability | 0 | 0 |
Derivatives not designated as accounting hedging instruments | Equity And Index Contracts Options | Other investments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | $ 0 | $ 0 |
Total asset derivatives, Number of contracts | Contract | 122 | 105 |
Total asset derivatives, Fair value, net | $ 556 | $ 2,800 |
Asset derivatives, Gross asset | 556 | 2,800 |
Asset derivatives, Gross liability | 0 | 0 |
Derivatives not designated as accounting hedging instruments | Equity And Index Contracts Options | Other liabilities and accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | $ 0 | $ 0 |
Total liability derivatives, Number of contracts | Contract | 121 | 106 |
Total liability derivatives, Fair value, net | $ (178) | $ (1,149) |
Liability derivatives, Gross asset | 0 | 0 |
Liability derivatives, Gross liability | (178) | (1,149) |
Derivatives not designated as accounting hedging instruments | Equity And Index Contracts Futures [Member] | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | $ 0 | |
Total asset derivatives, Number of contracts | Contract | 1 | |
Total asset derivatives, Fair value, net | $ 1 | |
Asset derivatives, Gross asset | 1 | |
Asset derivatives, Gross liability | 0 | |
Derivatives not designated as accounting hedging instruments | Foreign currency forward | Other investments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 16,091 | 140 |
Total asset derivatives, Fair value, net | 670 | (12) |
Asset derivatives, Gross asset | 684 | 0 |
Asset derivatives, Gross liability | (14) | (12) |
Derivatives not designated as accounting hedging instruments | Foreign currency forward | Other liabilities and accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives, Notional amount | 24,622 | |
Total liability derivatives, Fair value, net | (355) | |
Liability derivatives, Gross asset | 85 | |
Liability derivatives, Gross liability | (440) | |
Derivatives not designated as accounting hedging instruments | Structured settlement annuities | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives, Notional amount | 0 | |
Total asset derivatives, Fair value, net | 166,290 | |
Asset derivatives, Gross asset | 166,290 | |
Asset derivatives, Gross liability | 0 | |
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 | 36,265 | 28,833 |
Total liability derivatives, Fair value, net | (400) | (1,721) |
Liability derivatives, Gross asset | 0 | 0 |
Liability derivatives, Gross liability | $ (400) | $ (1,721) |
Schedule of Gross and Net Amoun
Schedule of Gross and Net Amount for Company's OTC Derivatives Subject to Enforceable Master Netting Arrangements (Detail) - OTC derivatives - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Offsetting Assets [Line Items] | ||
Gross amount | $ 1,078 | $ 421 |
Derivative Asset,Counter-party netting | (391) | (115) |
Derivative asset, offset under cash collateral (received) pledged | (590) | 0 |
Derivative Asset, Net amount on balance sheet | 97 | 306 |
Derivative Asset, Securities collateral (received) pledged | 0 | 0 |
Derivative Asset, Net amount | 97 | 306 |
Gross amount | (14) | (452) |
Liability derivatives, Gross asset | 391 | 115 |
Derivative liability offsets under cash collateral pledged | (380) | 230 |
Net amount on balance sheet | (3) | (107) |
Securities collateral (received) pledged | 0 | 0 |
Net amount | $ (3) | $ (107) |
Summary of Gains and Losses fro
Summary of Gains and Losses from Valuation and Settlements For Derivatives Not Designated As Hedges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | $ 865 | $ 56,176 | $ 24,909 |
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 | 65 | (54) | (30) |
Equity and index contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (768) | 1,289 | 405 |
Foreign currency forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 887 | (697) | 431 |
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 | 995 | 2,381 | 723 |
Structured settlement annuities | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (314) | 53,257 | 23,380 |
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 | 638 | 52,506 | 23,781 |
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 | 65 | (54) | (30) |
Realized capital gains and losses | Foreign currency forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 887 | (697) | 431 |
Realized capital gains and losses | Structured settlement annuities | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (314) | 53,257 | 23,380 |
Contract benefits | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (326) | 2,937 | 1,425 |
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 | (326) | 2,937 | 1,425 |
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 | 553 | 733 | (297) |
Interest credited to contractholder funds | Equity and index contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (768) | 1,289 | 405 |
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 | $ 1,321 | $ (556) | $ (702) |
Derivative Financial Instrume_3
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Additional Information (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Derivative [Line Items] | |
Pledged cash to counterparties as collateral | $ 970 |
Cash and securities pledged in the form of margin deposits | $ 61 |
Summary of Counterparty Credit
Summary of Counterparty Credit Exposure by Counterparty Credit Rating (Detail) - A+ $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Entity | Dec. 31, 2017USD ($)Entity | ||
Counterparty Credit Concentration Risk [Line Items] | |||
Number of counter -parties | Entity | [1] | 2 | 2 |
Notional Amount | [1],[2] | $ 30,191 | $ 13,640 |
Credit exposure | [1],[2] | 1,064 | 305 |
Exposure, net of collateral | [1],[2] | $ 97 | $ 305 |
[1] | The lower of S&P or Moody's long-term debt issuer ratings. | ||
[2] | Only OTC derivatives with a net positive fair value are included for each counterparty. |
Derivatives Financial Instrumen
Derivatives Financial Instruments and Off Balance Sheet Financial Instruments -Summary of Fair Value of Derivatives (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Gross liability fair value of contracts containing credit-risk-contingent features | $ 0 | $ 12 |
Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs | 0 | (12) |
Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently | $ 0 | $ 0 |
Derivatives Financial Instrum_2
Derivatives Financial Instruments and Off Balance Sheet Financial Instruments - Schedule of Contractual Amounts of Off Balance Sheet Financial instruments (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Limited partnership interests | ||
Derivative [Line Items] | ||
Contractual amounts of off-balance-sheet financial instruments | $ 153,719 | $ 174,520 |
Mortgage loans | ||
Derivative [Line Items] | ||
Contractual amounts of off-balance-sheet financial instruments | 10,000 | 0 |
Private Placement [Member] | ||
Derivative [Line Items] | ||
Contractual amounts of off-balance-sheet financial instruments | $ 0 | $ 75 |
Schedule of Reserve for Life-Co
Schedule of Reserve for Life-Contingent Contract Benefits (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | $ 2,232,136 | $ 2,348,966 |
Structured settlement annuities | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 1,882,914 | 2,023,451 |
Other immediate fixed annuities | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 63,774 | 61,756 |
Traditional life insurance | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 258,336 | 242,197 |
Accident and health insurance | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | 25,360 | 20,222 |
Other | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Reserve for life-contingent contract benefits | $ 1,752 | $ 1,340 |
Schedule of Key Assumptions Use
Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits (Detail) | 12 Months Ended | |
Dec. 31, 2018 | ||
Other | Minimum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 2.00% | [1] |
Other | Maximum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 5.80% | [1] |
Structured settlement annuities | Minimum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 3.30% | |
Structured settlement annuities | Maximum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 9.00% | |
Other immediate fixed annuities | Minimum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 0.00% | |
Other immediate fixed annuities | Maximum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 11.50% | |
Traditional life insurance | Minimum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 3.00% | |
Traditional life insurance | Maximum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 8.00% | |
Accident and health insurance | Minimum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 3.50% | |
Accident and health insurance | Maximum | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Life contingent contract benefits, interest rate assumptions (as a percent) | 6.00% | |
[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 Life-Contingent C_3
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Insurance [Line Items] | |||
Premium deficiency reserve | $ 80,628 | [1] | $ 222,342 |
Variable annuities | |||
Insurance [Line Items] | |||
Account balances of separate accounts with guarantees, invested in equity, fixed income and balanced mutual funds | 202,200 | 243,700 | |
Account balances of separate accounts with guarantees, invested in money market mutual funds | $ 21,500 | $ 30,600 | |
[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 lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate annuities with life contingencies). |
Schedule of Contractholder Fund
Schedule of Contractholder Funds (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | $ 2,681,300 | $ 2,874,884 | $ 3,018,733 | $ 3,185,887 |
Interest-sensitive life insurance | ||||
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | 740,694 | 744,610 | ||
Investment contracts | Fixed annuities | ||||
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | 1,896,222 | 2,091,214 | ||
Investment contracts | Other investment contracts | ||||
Policyholder Contract Deposits By Product [Line Items] | ||||
Contractholder funds | $ 44,384 | $ 39,060 |
Schedule of Contract Provisions
Schedule of Contract Provisions Related to Contractholder Funds (Detail) | 12 Months Ended | |
Dec. 31, 2018 | ||
Immediate annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Percentage of fixed annuities subject to market value adjustment for discretionary withdrawals | 0.00% | |
Other fixed annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Percentage of fixed annuities subject to market value adjustment for discretionary withdrawals | 0.00% | |
Minimum | Other investment contracts | ||
Policyholder Contract Deposits By Product [Line Items] | ||
PolicyholderContractDepositsInterestRateAssumptions | 1.70% | [1] |
Minimum | Immediate annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 0.00% | |
Minimum | Other fixed annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 1.00% | |
Minimum | Equity-indexed life | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 0.00% | |
Minimum | Other Life Insurance [Member] | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 2.30% | |
Maximum | Other investment contracts | ||
Policyholder Contract Deposits By Product [Line Items] | ||
PolicyholderContractDepositsInterestRateAssumptions | 10.30% | [1] |
Maximum | Immediate annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 9.00% | |
Maximum | Other fixed annuities | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 5.00% | |
Maximum | Equity-indexed life | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 10.00% | |
Maximum | Other Life Insurance [Member] | ||
Policyholder Contract Deposits By Product [Line Items] | ||
Contractholder funds, interest rate assumptions (as a percent) | 5.10% | |
[1] | In 2006, the Company disposed of its variable annuity business through a reinsurance agreement with Prudential. |
Schedule of Contractholder Fu_2
Schedule of Contractholder Funds Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Insurance [Line Items] | |||
Balance, beginning of year | $ 2,874,884 | $ 3,018,733 | $ 3,185,887 |
Deposits | 107,606 | 103,107 | 105,671 |
Interest credited | 91,430 | 97,355 | 102,805 |
Benefits | (114,006) | (108,819) | (122,109) |
Surrenders and partial withdrawals | (190,873) | (166,388) | (172,856) |
Contract charges | (75,483) | (74,733) | (73,866) |
Net transfers from separate accounts | 256 | 54 | 133 |
Other adjustments | (12,514) | 5,575 | (6,932) |
Balance, end of year | $ 2,681,300 | $ 2,874,884 | $ 3,018,733 |
Summary of Variable Annuity Con
Summary of Variable Annuity Contracts with Guarantees (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Guaranteed death benefits | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | $ 223.7 | $ 274.3 | |
Net amount at risk | [1] | $ 16.1 | $ 6.9 |
Average attained age of contract holders | 67 years | 67 years | |
Liability for guarantees related to income benefits | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | $ 16.9 | $ 20.5 | |
Net amount at risk | [2] | $ 2.9 | $ 2.1 |
Weighted average waiting period until annuitization or guarantee date | 0 years | 0 years | |
Withdrawal benefit | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | $ 14 | $ 17.4 | |
Net amount at risk | [3] | 0.5 | 0.4 |
Guaranteed accumulation benefits | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Separate account value | 25.3 | 32.3 | |
Net amount at risk | [4] | $ 0.8 | $ 0.4 |
Weighted average waiting period until annuitization or guarantee date | 3 years | 4 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 Guar
Summary of Liabilities for Guarantees (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | $ 31,464 | [1] | $ 30,229 | [2] |
Less reinsurance recoverables | 4,872 | 8,542 | ||
Net balance | 26,592 | 21,687 | ||
Incurred guarantee benefits | 2,584 | 4,905 | ||
Paid guarantee benefits | (250) | 0 | ||
Net change | 2,334 | 4,905 | ||
Net balance | 28,926 | 26,592 | ||
Plus reinsurance recoverables | 5,721 | 4,872 | ||
Gross balance | 34,647 | [3] | 31,464 | [1] |
Liability for guarantees related to death benefits and interest-sensitive life products | ||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | 27,927 | [1] | 23,256 | [2] |
Less reinsurance recoverables | 1,340 | 1,574 | ||
Net balance | 26,587 | 21,682 | ||
Incurred guarantee benefits | 2,585 | 4,905 | ||
Paid guarantee benefits | (250) | 0 | ||
Net change | 2,335 | 4,905 | ||
Net balance | 28,922 | 26,587 | ||
Plus reinsurance recoverables | 1,752 | 1,340 | ||
Gross balance | 30,674 | [3] | 27,927 | [1] |
Liability for guarantees related to income benefits | ||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | 462 | [1] | 961 | [2] |
Less reinsurance recoverables | 457 | 956 | ||
Net balance | 5 | 5 | ||
Incurred guarantee benefits | (1) | 0 | ||
Net change | (1) | 0 | ||
Net balance | 4 | 5 | ||
Plus reinsurance recoverables | 568 | 457 | ||
Gross balance | 572 | [3] | 462 | [1] |
Liability for guarantees related to accumulation and withdrawal benefits | ||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||
Gross balance | 3,075 | [1] | 6,012 | [2] |
Less reinsurance recoverables | 3,075 | 6,012 | ||
Plus reinsurance recoverables | 3,401 | 3,075 | ||
Gross balance | $ 3,401 | [3] | $ 3,075 | [1] |
[1] | Included in the total liability balance as of December 31, 2017 are reserves for variable annuity death benefits of $1.3 million, variable annuity income benefits of $0.5 million, variable annuity accumulation benefits of $2.8 million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $26.6 million. | |||
[2] | Included in the total liability balance as of December 31, 2016 are reserves for variable annuity death benefits of $1.6 million, variable annuity income benefits of $0.9 million, variable annuity accumulation benefits of $5.7. million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $21.7 million. | |||
[3] | Included in the total liability balance as of December 31, 2018 are reserves for variable annuity death benefits of $1.8 million, variable annuity income benefits of $0.6 million, variable annuity accumulation benefits of $3.0 million, variable annuity withdrawal benefits of $0.4 million and other guarantees of $28.8 million. |
Summary of Liabilities for Gu_2
Summary of Liabilities for Guarantees (Parenthetical) (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | $ 34,647 | [1] | $ 31,464 | [2] | $ 30,229 | [3] |
Liability for guarantees related to income benefits | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 572 | [1] | 462 | [2] | 961 | [3] |
Liability for guarantees related to income benefits | Variable annuities | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 600 | 500 | 900 | |||
Guaranteed death benefits | Variable annuities | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 1,800 | 1,300 | 1,600 | |||
Guaranteed accumulation benefits | Variable annuities | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 3,000 | 2,800 | 5,700 | |||
Withdrawal benefit | Variable annuities | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | 400 | 300 | 300 | |||
Other guarantees | Variable annuities | ||||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||||||
Gross balance | $ 28,800 | $ 26,600 | $ 21,700 | |||
[1] | Included in the total liability balance as of December 31, 2018 are reserves for variable annuity death benefits of $1.8 million, variable annuity income benefits of $0.6 million, variable annuity accumulation benefits of $3.0 million, variable annuity withdrawal benefits of $0.4 million and other guarantees of $28.8 million. | |||||
[2] | Included in the total liability balance as of December 31, 2017 are reserves for variable annuity death benefits of $1.3 million, variable annuity income benefits of $0.5 million, variable annuity accumulation benefits of $2.8 million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $26.6 million. | |||||
[3] | Included in the total liability balance as of December 31, 2016 are reserves for variable annuity death benefits of $1.6 million, variable annuity income benefits of $0.9 million, variable annuity accumulation benefits of $5.7. million, variable annuity withdrawal benefits of $0.3 million and other guarantees of $21.7 million. |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Detail) $ / Person in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2013$ / Person | Dec. 31, 2018USD ($)$ / Person | Dec. 31, 2017USD ($)$ / Person | Dec. 31, 2016USD ($) | |
Effects of Reinsurance [Line Items] | ||||
Maximum percentage of mortality risk ceded | 90.00% | 90.00% | ||
Maximum coverage per life before ceded | $ / Person | 250 | 2,000 | 2,000 | |
Reinsurance recoverables | $ 234,733 | $ 243,644 | ||
Interest credited to contract holder funds ceded | 4,533 | 4,805 | $ 4,770 | |
Gross life insurance in force | 42,960,000 | |||
Life insurance in force ceded to affiliated reinsurers | 509,100 | |||
Life insurance in force ceded to unaffiliated reinsurers | 8,410,000 | |||
Ceded premium related to structured settlement annuities | 11,054 | 11,481 | 11,788 | |
Allstate Life Insurance Company | ||||
Effects of Reinsurance [Line Items] | ||||
Ceded premium related to structured settlement annuities | 3,400 | 3,500 | 3,400 | |
Prudential | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables | 170,600 | 174,600 | ||
Premiums and contract charges ceded | 5,200 | 5,400 | 5,800 | |
Contract benefits ceded | 1,500 | (3,300) | (400) | |
Interest credited to contract holder funds ceded | 4,500 | 4,800 | 4,800 | |
Operating costs and expenses ceded | 868 | 900 | $ 1,100 | |
Triton Insurance Company | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables | $ 722 | $ 390 |
Schedule of Effects of Reinsura
Schedule of Effects of Reinsurance on Premiums and Contract Charges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of Reinsurance [Line Items] | |||
Direct premiums and contract charges | $ 199,289 | $ 185,875 | $ 163,745 |
Total premiums and contract charges | 180,641 | 167,112 | 144,590 |
Non-affiliate | |||
Effects of Reinsurance [Line Items] | |||
Assumed premiums and contract charges | 685 | 672 | 652 |
Ceded premiums and contract charges | (17,361) | (17,705) | (18,200) |
Affiliate | |||
Effects of Reinsurance [Line Items] | |||
Ceded premiums and contract charges | $ (1,972) | $ (1,730) | $ (1,607) |
Schedule of Effects of Reinsu_2
Schedule of Effects of Reinsurance on Contract Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of Reinsurance [Line Items] | |||
Direct contract benefits | $ 248,008 | $ 237,998 | $ 219,527 |
Contract benefits, net of reinsurance | 237,578 | 230,493 | 208,403 |
Non-affiliate | |||
Effects of Reinsurance [Line Items] | |||
Assumed contract benefits | 586 | 550 | 900 |
Ceded contract benefits | (10,961) | (7,173) | (13,355) |
Affiliate | |||
Effects of Reinsurance [Line Items] | |||
Ceded contract benefits | $ (55) | $ (882) | $ 1,331 |
Schedule of Effect of Reinsuran
Schedule of Effect of Reinsurance on Interest Credited to Contractholder Funds (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of Reinsurance [Line Items] | |||
Direct interest credited to contractholder funds | $ 96,002 | $ 102,164 | $ 107,522 |
Ceded interest credited to contractholder funds | (4,533) | (4,805) | (4,770) |
Interest credited to contractholder funds, net of reinsurance | 91,482 | 97,377 | 102,761 |
Non-affiliate | |||
Effects of Reinsurance [Line Items] | |||
Assumed interest credited to contractholder funds | 13 | 18 | 9 |
Ceded interest credited to contractholder funds | $ (4,533) | $ (4,805) | $ (4,770) |
Schedule of Deferred Policy Acq
Schedule of Deferred Policy Acquisition Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of year | $ 146,333 | $ 137,358 | $ 141,189 |
Acquisition costs deferred | 19,577 | 24,522 | 16,939 |
Amortization charged to income | (16,299) | (16,992) | (16,127) |
Effect of unrealized gains and losses | 6,276 | 1,445 | (4,643) |
Balance, end of year | $ 155,887 | $ 146,333 | $ 137,358 |
Schedule of Deferred Sales Indu
Schedule of Deferred Sales Inducement Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Deferred Sales Inducements | |||
Balance, beginning of year | $ 2,278 | $ 2,265 | $ 2,349 |
Sales inducements deferred | 128 | 167 | 170 |
Amortization charged to income | (181) | (188) | (126) |
Effect of unrealized gains and losses | 166 | 34 | (128) |
Balance, end of year | $ 2,391 | $ 2,278 | $ 2,265 |
Guarantees and Contingent Lia_2
Guarantees and Contingent Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Guarantor Obligations [Line Items] | ||
Obligations of insolvent insurance companies | $ 759 | $ 760 |
Premium tax offsets | $ 1,100 | $ 3,600 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Income Taxes [Line Items] | |||
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% |
Tax Cuts And Jobs Act Of 2017, Deferred tax asset, provisional income tax benefit | $ 102,500,000 | ||
Effective income tax rate expense (benefit) | (22.10%) | 29.70% | (35.30%) |
Tax Legislation benefit | 3.90% | 65.10% | |
Tax Legislation adjustment, Income tax benefit | $ (2,200,000) | ||
Unrecognized tax benefits | 0 | $ 0 | $ 0 |
Unrecognized tax interest accrued | 0 | 0 | 0 |
Unrecognized tax penalties accrued | 0 | 0 | 0 |
Income taxes paid | $ 16,000,000 | $ 6,800,000 | $ 9,600,000 |
Components of Deferred Income T
Components of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | ||
Accrued liabilities | $ 25 | $ 25 |
Other assets | 5 | 5 |
Total deferred tax assets | 30 | 30 |
Deferred tax liabilities | ||
Investments | (75,864) | (66,807) |
Life and annuity reserves | (32,450) | (28,526) |
DAC | (18,713) | (19,240) |
Unrealized net capital gains | (15,178) | (37,520) |
Unrealized foreign currency translation adjustments on limited partnerships | (573) | (552) |
Other liabilities | (858) | (1,111) |
Total deferred tax liabilities | (143,636) | (153,756) |
Net deferred tax liability | $ (143,606) | $ (153,726) |
Components of Income Tax Benefi
Components of Income Tax Benefit Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current | $ 11,257 | $ 12,837 | $ 9,694 |
Deferred | 1,570 | (59,572) | 18,314 |
Total income tax expense (benefit) | $ 12,827 | $ (46,735) | $ 28,008 |
Reconciliation of Statutory Fed
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Rate Reconciliation [Line Items] | |||
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% |
State income taxes | 5.40% | 0.70% | 1.20% |
Tax Legislation benefit | (3.90%) | (65.10%) | |
Other | (0.40%) | (0.30%) | (0.90%) |
Effective income tax rate - expense (benefit) | 22.10% | (29.70%) | 35.30% |
Statutory Financial Informati_2
Statutory Financial Information and Dividend Limitations - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income (loss) | $ 68 | $ 50.8 | $ (12.6) |
Statutory capital and surplus | 644.5 | $ 603.1 | |
Deficit position used to determine payment of dividends | 416.8 | ||
Maximum dividends company can pay during 2019 without regulatory approval | 64.4 | ||
Adjusted Statutory capital and surplus | 661.8 | ||
Authorized control level RBC | $ 84.1 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Allocated Cost (Credit) | $ 400,000 | $ 1,200,000 | $ 1,000,000 |
Cost of Allstate Plan | $ 1,000,000 | $ 895,000 | $ 842,000 |
Schedule of Components of Other
Schedule of Components of Other Comprehensive Income on Pre-Tax and After-Tax Basis (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pre-tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | $ (65,379) | $ (89,152) | $ 15,344 |
Less: reclassification adjustment of realized capital gains and losses | (1,359) | 12,710 | (22,431) |
Unrealized net capital gains and losses | (64,020) | (101,862) | 37,775 |
Unrealized foreign currency translation adjustments | 124 | 3,706 | 1,751 |
Other comprehensive (loss) income | (63,896) | (98,156) | 39,526 |
Tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | 13,730 | 31,203 | (5,370) |
Less: reclassification adjustment of realized capital gains and losses | 285 | (4,449) | 7,851 |
Unrealized net capital gains and losses | 13,445 | 35,652 | (13,221) |
Unrealized foreign currency translation adjustments | (26) | (1,297) | (613) |
Other comprehensive (loss) income | 13,419 | 34,355 | (13,834) |
After-tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | (51,649) | (57,949) | 9,974 |
Less: reclassification adjustment of realized capital gains and losses | (1,074) | 8,261 | (14,580) |
Unrealized net capital gains and losses | (50,575) | (66,210) | 24,554 |
Unrealized foreign currency translation adjustments | 98 | 2,409 | 1,138 |
Other comprehensive (loss) income | $ (50,477) | $ (63,801) | $ 25,692 |
Schedule I - Summary of Investm
Schedule I - Summary of Investments Other Than Investments in Related Parties (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | $ 5,759,833 |
Amount at which shown in the Balance Sheet | 5,922,804 |
U.S. government and agencies | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 76,070 |
Fair value | 85,464 |
Amount at which shown in the Balance Sheet | 85,464 |
Municipal | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 615,511 |
Fair value | 703,923 |
Amount at which shown in the Balance Sheet | 703,923 |
Foreign government | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 128,926 |
Fair value | 136,822 |
Amount at which shown in the Balance Sheet | 136,822 |
Public utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 630,966 |
Fair value | 668,672 |
Amount at which shown in the Balance Sheet | 668,672 |
All other corporate bonds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 2,874,820 |
Fair value | 2,885,189 |
Amount at which shown in the Balance Sheet | 2,885,189 |
Residential mortgage-backed securities ("RMBS") | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 14,134 |
Fair value | 15,079 |
Amount at which shown in the Balance Sheet | 15,079 |
Commercial mortgage-backed securities ("CMBS") | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 6,142 |
Fair value | 6,337 |
Amount at which shown in the Balance Sheet | 6,337 |
ABS | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 19,906 |
Fair value | 19,888 |
Amount at which shown in the Balance Sheet | 19,888 |
Redeemable preferred stock | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 8,635 |
Fair value | 8,970 |
Amount at which shown in the Balance Sheet | 8,970 |
Fixed income securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 4,375,110 |
Fair value | 4,530,344 |
Amount at which shown in the Balance Sheet | 4,530,344 |
Public Utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 2,243 |
Fair value | 2,645 |
Amount at which shown in the Balance Sheet | 2,645 |
Banks, Trust and Insurance Companies | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 11,431 |
Fair value | 12,850 |
Amount at which shown in the Balance Sheet | 12,850 |
Industrial, miscellaneous and all other | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 161,600 |
Fair value | 167,474 |
Amount at which shown in the Balance Sheet | 167,474 |
Nonredeemable preferred stocks | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 1,955 |
Fair value | 2,001 |
Amount at which shown in the Balance Sheet | 2,001 |
Equity securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 177,229 |
Fair value | 184,970 |
Amount at which shown in the Balance Sheet | 184,970 |
Mortgage loans | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 696,062 |
Fair value | 699,936 |
Amount at which shown in the Balance Sheet | 696,062 |
Policy loans | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 39,374 |
Amount at which shown in the Balance Sheet | 39,374 |
Derivative instruments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 653 |
Fair value | 653 |
Amount at which shown in the Balance Sheet | 653 |
Limited partnership interests | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 382,853 |
Amount at which shown in the Balance Sheet | 382,853 |
Short-term investments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost/amortized cost | 88,552 |
Fair value | 88,548 |
Amount at which shown in the Balance Sheet | $ 88,548 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Premiums and contract charges, Gross amount | $ 199,289 | $ 185,875 | $ 163,745 | |
Premiums and contract charges, Ceded to other companies | [1] | 19,333 | 19,435 | 19,807 |
Premiums and contract charges, Assumed from other companies | 685 | 672 | 652 | |
Premiums and contract charges, Net amount | $ 180,641 | $ 167,112 | $ 144,590 | |
Premiums and contract charges, Percentage of amount assumed to net | 0.40% | 0.40% | 0.50% | |
Life insurance in force, Gross amount | $ 42,502,450 | $ 41,866,862 | $ 41,053,412 | |
Life insurance in force, Ceded to other companies | [1] | 8,914,558 | 9,142,525 | 9,300,738 |
Life insurance in force, Assumed from other companies | 455,594 | 467,937 | 480,632 | |
Life insurance in force, Net amount | $ 34,043,486 | $ 33,192,274 | $ 32,233,306 | |
Life insurance in force, Percentage of amount assumed to net | 1.30% | 1.40% | 1.50% | |
Life insurance | ||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Premiums and contract charges, Gross amount | $ 154,016 | $ 149,811 | $ 146,274 | |
Premiums and contract charges, Ceded to other companies | [1] | 18,322 | 18,316 | 18,584 |
Premiums and contract charges, Assumed from other companies | 685 | 672 | 652 | |
Premiums and contract charges, Net amount | $ 136,379 | $ 132,167 | $ 128,342 | |
Premiums and contract charges, Percentage of amount assumed to net | 0.50% | 0.50% | 0.50% | |
Accident and health insurance | ||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||
Premiums and contract charges, Gross amount | $ 45,273 | $ 36,064 | $ 17,471 | |
Premiums and contract charges, Ceded to other companies | [1] | 1,011 | 1,119 | 1,223 |
Premiums and contract charges, Net amount | $ 44,262 | $ 34,945 | $ 16,248 | |
[1] | No reinsurance or coinsurance income was netted against premiums ceded in 2018, 2017 or 2016. |
Schedule V - Valuation Allowanc
Schedule V - Valuation Allowances and Qualifying Accounts (Detail) - Allowance for estimated losses on mortgage loans - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance as of beginning of period | $ 0 | $ 0 | $ 0 |
Additions charged to costs and expenses | 0 | 0 | 0 |
Other additions | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance as of end of period | $ 0 | $ 0 | $ 0 |