Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020 | |
Document and Entity Information | |
Document Type | S-1 |
Entity Registrant Name | ALLSTATE LIFE INSURANCE CO OF NEW YORK |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000839759 |
Amendment Flag | false |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Premiums, net of reinsurance | $ 79,942 | $ 108,452 | $ 103,447 |
Contract charges, net of reinsurance | 77,476 | 77,314 | 77,194 |
Net investment income | 222,087 | 256,006 | 287,883 |
Realized capital gains and losses | 128,265 | 106,627 | (20,554) |
Total revenues | 508,414 | 549,585 | 449,384 |
Costs and expenses | |||
Contract benefits, net of reinsurance | 434,641 | 259,013 | 237,578 |
Interest credited to contractholder funds, net of reinsurance | 84,324 | 86,464 | 91,482 |
Amortization of deferred policy acquisition costs | 20,346 | 30,396 | 16,299 |
Operating costs and expenses | 32,975 | 45,162 | 45,964 |
Total costs and expenses | 572,286 | 421,035 | 391,323 |
(Loss) income from operations before income tax (benefit) expense | (63,872) | 128,550 | 58,061 |
Income tax (benefit) expense | (11,993) | 30,926 | 12,827 |
Net (loss) income | (51,879) | 97,624 | 45,234 |
Other comprehensive income (loss), after-tax | |||
Change in unrealized net capital gains and losses | 86,101 | 67,612 | (50,575) |
Change in unrealized foreign currency translation adjustments | 1,519 | (3,131) | 98 |
Other comprehensive income (loss), after-tax | 87,620 | 64,481 | (50,477) |
Comprehensive income (loss) | 35,741 | 162,105 | (5,243) |
Other revenue | |||
Revenues | |||
Contract charges, net of reinsurance | $ 644 | $ 1,186 | $ 1,414 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Ceded premiums earned | $ 10,004 | $ 10,600 | $ 11,054 |
Contract charges, reinsurance ceded | 7,978 | 7,945 | 8,279 |
Policyholder benefits and claims incurred, ceded | (11,666) | (13,687) | (11,016) |
Interest credited to contractholder funds | $ (4,503) | $ (4,307) | $ (4,533) |
STATEMENTS OF FINANCIAL POSITIO
STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Fixed income securities, at fair value (amortized cost, net $4,293,492 and $4,023,107) | $ 4,918,874 | $ 4,434,362 |
Mortgage loans, net | 621,702 | 733,258 |
Equity securities, at fair value (cost $182,261 and $233,118) | 251,437 | 274,133 |
Limited partnership interests | 343,251 | 386,310 |
Short-term, at fair value (amortized cost $132,970 and $224,111) | 133,045 | 224,098 |
Policy loans | 37,294 | 38,583 |
Other | 8,097 | 5,237 |
Total investments | 6,313,700 | 6,095,981 |
Cash | 10,840 | 9,273 |
Deferred policy acquisition costs | 101,212 | 124,118 |
Reinsurance recoverable | 223,349 | 229,759 |
Accrued investment income | 45,790 | 46,846 |
Current income taxes receivable | 7,654 | 0 |
Other assets, net | 332,338 | 399,126 |
Reinsurance receivable from parent | 4,919 | 1,218 |
Separate Accounts | 286,751 | 265,546 |
Total assets | 7,326,553 | 7,171,867 |
Liabilities | ||
Contractholder funds | 2,464,770 | 2,547,968 |
Reserve for life-contingent contract benefits | 2,698,383 | 2,411,809 |
Current income taxes payable | 0 | 31,713 |
Deferred income taxes | 166,881 | 154,849 |
Other liabilities and accrued expenses | 108,440 | 188,362 |
Payable to affiliates, net | 4,349 | 4,973 |
Separate Accounts | 286,751 | 265,546 |
Total liabilities | 5,729,574 | 5,605,220 |
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 | 1,242,580 | 1,299,868 |
Unrealized net capital gains and losses [Abstract] | ||
Unrealized net capital gains and losses on fixed income securities with credit losses | 0 | 664 |
Other unrealized net capital gains and losses | 493,834 | 324,055 |
Unrealized adjustment to DAC, DSI and insurance reserves | (283,024) | (200,010) |
Total unrealized net capital gains and losses | 210,810 | 124,709 |
Unrealized foreign currency translation adjustments | 560 | (959) |
Total accumulated other comprehensive income (“AOCI”) | 211,370 | 123,750 |
Total shareholder’s equity | 1,596,979 | 1,566,647 |
Total liabilities and shareholder’s equity | $ 7,326,553 | $ 7,171,867 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Fixed income securities, at fair value, amortized cost | $ 4,293,492 | $ 4,023,107 |
Equity securities, at fair value, cost | 182,261 | 233,118 |
Short-term, at fair value, amortized cost | $ 132,970 | $ 224,111 |
Common stock, par value (in dollars per share) | $ 25 | $ 25 |
Common stock, authorized (in shares) | 100,000 | 100,000 |
Common Stock, issued (in shares) | 100,000 | 100,000 |
Common stock, outstanding (in shares) | 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 |
Increase (decrease) in equity | |||||
Cumulative effect of change in accounting principle | Adjustments for New Accounting Pronouncement | $ 39,990 | $ (33,473) | |||
Balance, beginning of year at Dec. 31, 2017 | 1,117,020 | 143,219 | |||
Increase (decrease) in equity | |||||
Net (loss) income | $ 45,234 | 45,234 | |||
Change in unrealized net capital gains and losses | (50,575) | (50,575) | |||
Change in unrealized foreign currency translation adjustments | 98 | 98 | |||
Balance, end of year at Dec. 31, 2018 | 1,404,542 | $ 2,500 | $ 140,529 | 1,202,244 | 59,269 |
Increase (decrease) in equity | |||||
Net (loss) income | 97,624 | 97,624 | |||
Change in unrealized net capital gains and losses | 67,612 | 67,612 | |||
Change in unrealized foreign currency translation adjustments | (3,131) | (3,131) | |||
Balance, end of year at Dec. 31, 2019 | 1,566,647 | 2,500 | 140,529 | 1,299,868 | 123,750 |
Increase (decrease) in equity | |||||
Cumulative effect of change in accounting principle | 621 | ||||
Cumulative effect of change in accounting principle | Adjustments for New Accounting Pronouncement | (5,409) | ||||
Net (loss) income | (51,879) | (51,879) | |||
Change in unrealized net capital gains and losses | 86,101 | 86,101 | |||
Change in unrealized foreign currency translation adjustments | 1,519 | 1,519 | |||
Balance, end of year at Dec. 31, 2020 | $ 1,596,979 | $ 2,500 | $ 140,529 | $ 1,242,580 | $ 211,370 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net (loss) income | $ (51,879) | $ 97,624 | $ 45,234 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization and other non-cash items | (15,343) | (27,136) | (27,152) |
Realized capital gains and losses | (128,265) | (106,627) | 20,554 |
Interest credited to contractholder funds | 84,324 | 86,464 | 91,482 |
Changes in: | |||
Policy benefits and other insurance reserves | 136,304 | (29,174) | (46,890) |
Deferred policy acquisition costs | 9,171 | 13,625 | (3,278) |
Income taxes | (49,282) | 29,817 | (3,424) |
Other operating assets and liabilities | 60,431 | 14,996 | 15,481 |
Net cash provided by operating activities | 45,461 | 79,589 | 92,007 |
Proceeds from sales | |||
Fixed income securities | 439,542 | 295,930 | 292,026 |
Equity securities | 430,217 | 141,893 | 165,147 |
Limited partnership interests | 31,418 | 25,195 | 31,337 |
Mortgage loans | 50,364 | 0 | 0 |
Investment collections | |||
Fixed income securities | 298,583 | 345,540 | 334,019 |
Mortgage loans | 72,725 | 76,582 | 50,627 |
Investment purchases | |||
Fixed income securities | (850,671) | (411,139) | (421,643) |
Equity securities | (371,576) | (190,441) | (171,271) |
Limited partnership interests | (27,847) | (41,881) | (56,986) |
Mortgage loans | (26,800) | (113,712) | (116,996) |
Change in short-term investments, net | 13,890 | (46,116) | 12,231 |
Change in policy loans and other investments, net | 2,288 | 1,228 | 576 |
Net cash provided by investing activities | 62,133 | 83,079 | 119,067 |
Cash flows from financing activities | |||
Contractholder fund deposits | 96,917 | 95,390 | 96,954 |
Contractholder fund withdrawals | (202,944) | (257,264) | (304,412) |
Net cash used in financing activities | (106,027) | (161,874) | (207,458) |
Net increase in cash | 1,567 | 794 | 3,616 |
Cash at beginning of year | 9,273 | 8,479 | 4,863 |
Cash at end of year | $ 10,840 | $ 9,273 | $ 8,479 |
General
General | 12 Months Ended |
Dec. 31, 2020 | |
General | |
General | 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. The Company operates as a single segment entity based on the manner in which the Company uses financial information to evaluate business performance and to determine the allocation of resources. 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 and benefits brokers. 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 Company expects to discontinue sales of proprietary life and voluntary accident and health insurance products during the second quarter of 2021. The following table summarizes premiums and contract charges by product. ($ in thousands) 2020 2019 2018 Premiums Traditional life insurance $ 62,575 $ 61,980 $ 59,185 Accident and health insurance 17,367 46,472 44,262 Total premiums 79,942 108,452 103,447 Contract charges Interest-sensitive life insurance 77,557 77,324 76,931 Fixed annuities (81) (10) 263 Total contract charges 77,476 77,314 77,194 Total premiums and contract charges $ 157,418 $ 185,766 $ 180,641 Subsequent event |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Investments Fixed income securities include bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”). MBS includes residential and commercial mortgage-backed securities. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale (“AFS”) and are carried at fair value. The difference between amortized cost, net of credit loss allowances (“amortized cost, net”) and fair value, net of deferred income taxes and related deferred policy acquisition costs (“DAC”), deferred sales inducement costs (“DSI”) and reserves for life-contingent contract benefits, is reflected as a component of AOCI. The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed income securities. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Statements of Cash Flows. Mortgage loans are carried at amortized cost, net which represent the amount expected to be collected. The Company excludes accrued interest receivable from the amortized cost basis of its mortgage loans. Credit loss allowances are estimates of expected credit losses established for loans upon origination or purchase, and are established considering all relevant information available, including past events, current conditions, and reasonable and supportable forecasts over the life of the loans. Loans are evaluated on a pooled basis when they share similar risk characteristics; otherwise, they are evaluated individually. Equity securities primarily include common stocks, exchange traded funds, non-redeemable preferred stocks and real estate investment trust equity investments. Certain exchange traded funds have fixed income securities as their underlying investments. Equity securities are carried at fair value. Equity securities without readily determinable or estimable fair values are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include interests in 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 date. Interest income for ABS and MBS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS and MBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed income securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of amortized cost. Income from limited partnership interests carried at fair value is recognized based upon the changes in fair value of the investee’s equity primarily determined using NAV. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ earnings. Income from EMA limited partnership interests is generally recognized on a three Realized capital gains and losses include gains and losses on investment sales, changes in the credit loss allowances related to fixed income securities and mortgage loans, impairments, 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 and are net of credit losses already recognized through an allowance. 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 can be reinvested in short-term investments or fixed income securities. 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% and 105% of the fair value of domestic and foreign securities, respectively, 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, net of any credit loss allowance for uncollectible premiums. 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 are recognized in relation to premiums with the establishment of a reserve. The change in reserve over time is recorded in contract benefits and primarily relates to accumulation at the discount rate and annuitant mortality. 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 Other revenue represents gross dealer concessions received in connection with sales of non-proprietary products by Allstate exclusive agents and exclusive financial specialists. Other revenue is recognized when performance obligations are fulfilled. 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 agent and broker 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 using actual experience and current assumptions. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance products are reviewed individually. 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 any remaining deficiency. 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 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life. The rate of DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are 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 reserves 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 reserves 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 evaluates reinsurer counterparty credit risk and records reinsurance recoverables net of credit loss allowances. The Company assesses counterparty credit risk for individual reinsurers separately when more relevant or on a pooled basis when shared risk characteristics exist. The evaluation considers the credit quality of the reinsurer and the period over which the recoverable balances are expected to be collected. The Company considers factors including past events, current conditions and reasonable and supportable forecasts in the development of the estimate of credit loss allowances. The Company uses a probability of default and loss given default model developed independently of the Company to estimate current expected credit losses. The model utilizes factors including historical industry factors based on the probability of liquidation, and incorporates current loss given default factors reflective of the industry. The Company monitors the credit ratings of reinsurer counterparties and evaluates the circumstances surrounding credit rating changes as inputs into its credit loss assessments. Uncollectible reinsurance recoverable balances are written off against the allowances when there is no reasonable expectation of recovery. The changes in the allowance are reported in contract benefits. The Company has a reinsurance treaty with ALIC through which it 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, premiums paid to ALIC and settlements received from 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 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 for any remaining deficiency. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance are reviewed individually. 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. Measurement of credit losses The Company carries an allowance for expected credit losses for all financial assets measured at amortized cost on the Statements of Financial Position. The Company considers past events, current conditions and reasonable and supportable forecasts in estimating an allowance for credit losses. The Company also carries a credit loss allowance for fixed income securities where applicable and, when amortized cost is reported, it is net of credit loss allowances. For additional information, refer to the Investments or Reinsurance topics of this section. The Company also estimates a credit loss allowance for commitments to fund mortgage loans unless they are unconditionally cancellable by the Company. The related allowance is reported in other liabilities and accrued expenses. The Company’s allowance for credit losses is presented in the following table. ($ in millions) December 31, 2020 January 1, 2020 Mortgage loans $ 11,093 $ 6,129 Investments 11,093 6,129 Reinsurance recoverables 624 655 Other assets 4,130 4,259 Assets 15,847 11,043 Commitments to fund mortgage loans — 97 Liabilities — 97 Total $ 15,847 $ 11,140 Off-balance sheet financial instruments Commitments to invest, commitments to purchase private placement securities, commitments to fund mortgage loans and financial guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Statements of Financial Position (see Note 7 and Note 11). Adopted accounting standard Measurement of Credit Losses on Financial Instruments Effective January 1, 2020 the Company adopted new Financial Accounting Standards Board (“FASB”) guidance related to the measurement of credit losses on financial instruments that primarily affected mortgage loans and reinsurance recoverables. Upon adoption of the guidance, the Company recorded a total allowance for expected credit losses of $11.1 million, pre-tax. After consideration of existing valuation allowances maintained prior to adopting the new guidance, the Company increased its valuation allowances for credit losses to conform to the new requirements which resulted in recognizing a cumulative effect decrease in retained income of $5.4 million, after-tax, at the date of adoption. The measurement of credit losses for AFS fixed income securities measured at fair value is not affected except that credit losses recognized are limited to the amount by which fair value is below amortized cost and the credit loss adjustment is recognized through a valuation allowance which may change over time but once recorded cannot subsequently be reduced to an amount below zero. Previously these credit loss adjustments were recorded as other than temporary impairments and were not reversed once recorded. Pending accounting standards 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 introduces material changes to 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 measured on a retrospective basis and reported in net income. In addition, reserves 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. Current GAAP requires the measurement of reserves to utilize assumptions set at policy issuance unless updated current assumptions indicate that recorded reserves are deficient. The new guidance also 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 lapse experience exceeds expected experience. 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. All market risk benefit product features will 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 reporting entity’s own credit risk, which are required to be recognized in OCI. Substantially all of the Company’s market risk benefits relate to variable annuities that are reinsured and therefore these impacts are not expected to be material to the Company. The new guidance is effective for financial statements issued for reporting periods beginning after December 15, 2022, and restatement of prior periods presented is required. Early adoption is permitted and if elected, restatement of only one prior period is required. The new guidance will be applied to affected contracts and DAC on the basis of existing carrying amounts at the earliest period presented or retrospectively using actual historical experience as of contract inception. The new guidance for market risk benefits is required to be adopted retrospectively. Th |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Non-cash investing activities include $412 thousand, $8.0 million and $8.2 million related to mergers and exchanges completed with equity securities, fixed income securities and modifications of certain mortgage loans in 2020, 2019 and 2018, respectively. Liabilities for collateral received in conjunction with the Company’s securities lending program were $76.4 million, $158.1 million and $69.8 million as of December 31, 2020, 2019 and 2018, respectively, and are reported in other liabilities and accrued expenses. The accompanying cash flows are included in cash flows from operating activities in the Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Net change in proceeds managed Net change in short-term investments $ 81,718 $ (88,323) $ (10,721) Operating cash flow provided (used) $ 81,718 $ (88,323) $ (10,721) Net change in liabilities Liabilities for collateral, beginning of year $ (158,111) $ (69,788) $ (59,067) Liabilities for collateral, end of year (76,393) (158,111) (69,788) Operating cash flow (used) provided $ (81,718) $ 88,323 $ 10,721 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 $38.0 million, $45.0 million and $46.2 million in 2020, 2019 and 2018, 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 parties) and funded by certain annuity contracts issued by the Company through June 30, 2001. ASC entered into a General Indemnity Agreement pursuant to which it indemnified AIC for any liabilities associated with the surety bonds and gave AIC certain collateral security rights with respect to the annuities and certain other rights in the event of any defaults covered by the surety bonds. ALIC guaranteed the payment of structured settlement benefits on all contracts issued on or after July 1, 2001. Reserves recorded by the Company for annuities that are guaranteed by the surety bonds of AIC were $1.58 billion and $1.42 billion as of December 31, 2020 and 2019, respectively. Reserves recorded by the Company for annuities that are guaranteed by ALIC were $557.2 million and $559.5 million as of December 31, 2020 and 2019, respectively. Broker-Dealer agreements The Company receives distribution services from Allstate Financial Services, LLC, an affiliated broker-dealer company, for certain annuity and variable life insurance contracts sold by Allstate exclusive agencies and exclusive financial specialists. For these services, the Company incurred commission and other distribution expenses of $380 thousand, $317 thousand and $215 thousand in 2020, 2019 and 2018, 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 $9 thousand, $3 thousand and $5 thousand in 2020, 2019 and 2018, 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 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 $3.3 million, $4.2 million and $3.4 million in 2020, 2019 and 2018, respectively. The Company received settlements from ALIC of $21.7 million, $1.0 million and zero in 2020, 2019 and 2018, respectively. As of December 31, 2020 and 2019, the carrying value of the structured settlement reinsurance treaty was $313.9 million and $231.5 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. In 2019, ALIC established a trust for the benefit of the Company and maintains it with assets equal to or greater than the Company’s statutory-basis cession. As of December 31, 2020 and 2019, the trust held $1.56 billion and $1.45 billion of investments, respectively. 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 $1.00 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings. The Company had no amounts outstanding under the intercompany loan agreement as of December 31, 2020 or 2019. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Investments | Investments Portfolio composition The composition of the investment portfolio is presented as follows: As of December 31, ($ in thousands) 2020 2019 Fixed income securities, at fair value $ 4,918,874 $ 4,434,362 Mortgage loans, net 621,702 733,258 Equity securities, at fair value 251,437 274,133 Limited partnership interests 343,251 386,310 Short-term investments, at fair value 133,045 224,098 Policy loans 37,294 38,583 Other 8,097 5,237 Total $ 6,313,700 $ 6,095,981 Fair values The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows: ($ in thousands) Amortized cost, net Gross unrealized Fair value Gains Losses December 31, 2020 U.S. government and agencies $ 134,490 $ 10,415 $ — $ 144,905 Municipal 402,728 141,825 — 544,553 Corporate 3,685,510 471,999 (3,782) 4,153,727 Foreign government 67,435 4,652 — 72,087 MBS 3,329 273 — 3,602 Total fixed income securities $ 4,293,492 $ 629,164 $ (3,782) $ 4,918,874 December 31, 2019 U.S. government and agencies $ 43,280 $ 9,534 $ — $ 52,814 Municipal 433,038 119,242 — 552,280 Corporate 3,400,471 277,338 (2,564) 3,675,245 Foreign government 133,635 6,531 — 140,166 MBS 12,683 1,174 — 13,857 Total fixed income securities $ 4,023,107 $ 413,819 $ (2,564) $ 4,434,362 Scheduled maturities The scheduled maturities for fixed income securities are as follows: ($ in thousands) As of December 31, 2020 Amortized Fair Due in one year or less $ 236,261 $ 241,561 Due after one year through five years 1,259,325 1,348,880 Due after five years through ten years 1,686,785 1,900,883 Due after ten years 1,107,792 1,423,948 4,290,163 4,915,272 MBS 3,329 3,602 Total $ 4,293,492 $ 4,918,874 Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. MBS is shown separately because of potential 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) 2020 2019 2018 Fixed income securities $ 188,432 $ 208,816 $ 214,039 Mortgage loans 34,510 32,566 30,920 Equity securities 3,267 4,283 5,565 Limited partnership interests 817 15,348 43,365 Short-term investments 1,600 4,393 2,966 Policy loans 2,272 2,343 2,339 Investment income, before expense 230,898 267,749 299,194 Investment expense (8,811) (11,743) (11,311) Net investment income $ 222,087 $ 256,006 $ 287,883 Realized capital gains and losses Realized capital gains (losses) by asset type for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Fixed income securities $ (2,190) $ 1,389 $ (1,306) Mortgage loans (9,390) — 466 Equity securities 36,110 40,780 (16,364) Limited partnership interests 3,520 5,383 (3,895) Derivatives 100,412 59,087 638 Short-term investments (197) (12) (93) Realized capital gains (losses) $ 128,265 $ 106,627 $ (20,554) Realized capital gains (losses) by transaction type for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Sales $ (1,861) $ 4,698 $ (1,548) Credit losses (1) (10,388) (169) (285) Valuation of equity investments (2) 40,102 43,011 (19,359) Valuation and settlements of derivative instruments 100,412 59,087 638 Realized capital gains (losses) $ 128,265 $ 106,627 $ (20,554) ____________________ (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior period other-than-temporary impairment write-downs are now presented as credit losses. (2) Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities. Gross realized gains (losses) on sales of fixed income securities for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Gross realized gains $ 3,165 $ 4,863 $ 4,397 Gross realized losses (5,099) (3,305) (5,418) The following table presents the net pre-tax appreciation (decline) recognized in net income of equity securities and limited partnership interests carried at fair value that are still held as of December 31, 2020 and 2019, respectively. For the years ended December 31, ($ in thousands) 2020 2019 Equity securities $ 39,830 $ 29,558 Limited partnership interests carried at fair value 13,787 9,165 Total $ 53,617 $ 38,723 Credit losses recognized in net income (1) for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Fixed income securities: MBS $ (255) $ (169) $ (285) Total fixed income securities (255) (169) (285) Mortgage loans (9,691) — — Limited partnership interests (538) — — Total credit losses by asset type (10,484) (169) (285) Liabilities Commitments to fund commercial mortgage loans 97 — — Total $ (10,387) $ (169) $ (285) _______________ (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, realized capital losses previously reported as other-than-temporary impairment write-downs are now presented as credit losses. 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 gains (losses) December 31, 2020 Gains Losses Fixed income securities $ 4,918,874 $ 629,164 $ (3,782) $ 625,382 Short-term investments 133,045 76 (1) 75 EMA limited partnerships (1) (350) Unrealized net capital gains and losses, pre-tax 625,107 Amounts recognized for: Insurance reserves (2) (321,591) DAC and DSI (3) (36,668) Amounts recognized (358,259) Deferred income taxes (56,038) Unrealized net capital gains and losses, after-tax $ 210,810 December 31, 2019 Fixed income securities $ 4,434,362 $ 413,819 $ (2,564) $ 411,255 Short-term investments 224,098 4 (17) (13) EMA limited partnerships (205) Unrealized net capital gains and losses, pre-tax 411,037 Amounts recognized for: Insurance reserves (231,357) DAC and DSI (21,820) Amounts recognized (253,177) Deferred income taxes (33,151) Unrealized net capital gains and losses, after-tax $ 124,709 ____________________ (1) Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. 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 annuity 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. 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) 2020 2019 2018 Fixed income securities $ 214,127 $ 256,021 $ (212,483) Short-term investments 88 (9) 9 EMA limited partnerships (145) (155) (40) Total 214,070 255,857 (212,514) Amounts recognized for: Insurance reserves (90,234) (150,729) 141,714 DAC and DSI (14,848) (19,543) 6,780 Amounts recognized (105,082) (170,272) 148,494 Deferred income taxes (22,887) (17,973) 13,445 Increase (decrease) in unrealized net capital gains and losses, after-tax $ 86,101 $ 67,612 $ (50,575) 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 $621.7 million and $733.3 million, net of credit loss allowance, as of December 31, 2020 and 2019, respectively. Substantially all of the commercial mortgage loans are non-recourse to the borrower. The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31. (% of mortgage loan portfolio carrying value) 2020 2019 Texas 23.9 % 19.9 % California 15.8 16.7 North Carolina 9.3 8.2 Utah 6.7 5.9 New Jersey 4.2 5.6 Nevada 2.9 5.8 Illinois 2.0 5.5 The types of properties collateralizing the mortgage loans as of December 31 are as follows: (% of mortgage loan portfolio carrying value) 2020 2019 Apartment complex 30.6 % 32.6 % Office buildings 28.4 27.4 Retail 16.6 15.6 Warehouse 13.2 16.5 Other 11.2 7.9 Total 100.0 % 100.0 % The contractual maturities of the mortgage loan portfolio as of December 31, 2020 are as follows: ($ in thousands) Number Amortized cost, net Percent 2021 6 $ 44,345 7.1 % 2022 8 46,326 7.5 2023 11 82,043 13.2 2024 12 97,143 15.6 Thereafter 46 351,845 56.6 Total 83 $ 621,702 100.0 % Limited partnerships Investments in limited partnership interests include interests in private equity funds, real estate funds and other funds. Principal factors influencing carrying value appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. For equity method 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. The carrying value for limited partnership interest as of December 31 is as follows: 2020 2019 ($ in thousands) EMA Fair Value Total EMA Fair Value Total Private equity $ 204,573 $ 107,500 $ 312,073 $ 251,154 $ 107,500 $ 358,654 Real estate 15,814 987 16,801 15,357 1,566 16,923 Other (1) 14,377 — 14,377 10,733 — 10,733 Total $ 234,764 $ 108,487 $ 343,251 $ 277,244 $ 109,066 $ 386,310 ____________ (1) Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities. Municipal bonds The Company maintains a diversified portfolio of municipal bonds which totaled $544.6 million and $552.3 million as of December 31, 2020 and 2019, 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) 2020 2019 California 35.2 % 33.3 % Oregon 11.6 10.6 Texas 10.9 10.8 Illinois 8.7 8.0 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, 2020 and 2019, the fair value of short-term investments totaled $133.0 million and $224.1 million, respectively. Policy loans Policy loans are carried at unpaid principal balances. As of December 31, 2020 and 2019, the carrying value of policy loans totaled $37.3 million and $38.6 million, respectively. Other investments Other investments consist of derivatives. Derivatives are carried at fair value. As of December 31, 2020 and 2019, the fair value of derivatives totaled $8.1 million and $5.2 million, respectively. Concentration of credit risk As of December 31, 2020, 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, 2020 and 2019, fixed income and equity securities with a carrying value of $73.8 million and $152.3 million, respectively, were on loan under these agreements. Interest income on collateral, net of fees, was $235 thousand, $342 thousand and $286 thousand in 2020, 2019 and 2018, respectively. Other investment information Included in fixed income securities are below investment grade assets totaling $471.8 million and $406.0 million as of December 31, 2020 and 2019, respectively. As of December 31, 2020, fixed income securities with a carrying value of $2.1 million were on deposit with regulatory authorities as required by law. As of December 31, 2020, there were no fixed income securities or other investments that were non-income producing. Portfolio monitoring and credit losses Fixed income securities The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security that may require a credit loss allowance. For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses 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 based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and is compared to the amortized cost of the security. 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 is 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, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, 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, 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 Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, a credit loss allowance is recorded in earnings for the shortfall in expected cash flows; however, the amortized cost, net of the credit loss allowance, may not be lower than the fair value of the security. 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. When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance. Recoveries after write-offs are recognized when received. Accrued interest excluded from the amortized cost of fixed income securities totaled $42.5 million as of December 31, 2020 and is reported within the accrued investment income line of the Statements of Financial Position. The Company monitors accrued interest and writes off amounts when they are not expected to be received. The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. The process also includes the monitoring of other credit loss indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential credit losses using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of credit losses for these securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value requires a credit loss allowance are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the extent to which the fair value has been less than amortized cost. Rollforward of credit loss allowance for fixed income securities for the year ended December 31, 2020 is as follows: ($ in thousands) 2020 Beginning balance $ — Credit losses on securities for which credit losses not previously reported (255) Reduction of allowance related to sales 255 Write-offs — Ending balance $ — The following table summarizes the gross unrealized losses and fair value of securities by the length of time that individual securities have been in a continuous unrealized loss position. ($ in thousands) Less than 12 months 12 months or more Total unrealized losses Number Fair Unrealized losses Number Fair Unrealized losses December 31, 2020 Fixed income securities Corporate 46 $ 154,414 $ (2,984) 9 $ 15,133 $ (798) $ (3,782) MBS 1 — — — — — — Total fixed income securities 47 $ 154,414 $ (2,984) 9 $ 15,133 $ (798) $ (3,782) Investment grade fixed income securities 20 $ 111,172 $ (1,883) — $ — $ — $ (1,883) Below investment grade fixed income securities 27 43,242 (1,101) 9 15,133 (798) (1,899) Total fixed income securities 47 $ 154,414 $ (2,984) 9 $ 15,133 $ (798) $ (3,782) December 31, 2019 Fixed income securities 3 Corporate 44 104,484 (815) 17 31,900 (1,749) (2,564) MBS 2 38 — 2 1 — — Total fixed income securities 46 $ 104,522 $ (815) 19 $ 31,901 $ (1,749) $ (2,564) Investment grade fixed income securities 22 $ 82,142 $ (347) 3 $ 9,845 $ (130) $ (477) Below investment grade fixed income securities 24 22,380 (468) 16 22,056 (1,619) (2,087) Total fixed income securities 46 $ 104,522 $ (815) 19 $ 31,901 $ (1,749) $ (2,564) The following table summarizes gross unrealized losses by unrealized loss position and credit quality as of December 31, 2020. ($ in thousands) Investment Below investment grade Total Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2) $ (1,883) $ (1,635) $ (3,518) Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4) — (264) (264) Total unrealized losses $ (1,883) $ (1,899) $ (3,782) _______________ (1) Below investment grade fixed income securities include $1.1 million that have been in an unrealized loss position for less than twelve months. (2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses. (3) No below investment grade fixed income securities have been in an unrealized loss position for a period of twelve or more consecutive months. (4) Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations. 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 or wider credit spreads since the time of initial purchase. The unrealized losses are expected to reverse as the securities approach maturity. MBS 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, 2020, 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. Mortgage loans The Company establishes a credit loss allowance for mortgage loans when they are originated, and for unfunded commitments unless they are unconditionally cancellable by the Company. The Company uses a probability of default and loss given default model to estimate current expected credit losses that considers all relevant information available including past events, current conditions, and reasonable and supportable forecasts over the life of an asset. The Company also considers such factors as historical losses, expected prepayments and various economic factors, origination vintage year and property level information such as debt service coverage, property type, property location and collateral value. Mortgage loans are evaluated on a pooled basis when they share similar risk characteristics. The Company monitors these loans through a quarterly credit monitoring process to determine when they no longer share similar risk characteristics and are to be evaluated individually when estimating credit losses. Mortgage loans are written off against their corresponding allowances when there is no reasonable expectation of recovery. If a loan recovers after a write-off, the estimate of expected credit losses includes the expected recovery. 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. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on mortgage loans on non-accrual status are generally recorded as a reduction of amortized cost. Accrued interest is excluded from the amortized cost of loans and is reported within the accrued investment income line of the Statements of Financial Position. As of December 31, 2020, accrued interest totaled $2.0 million for mortgage loans. When it is determined a mortgage loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as using collateral value less estimated costs to sell where applicable, including when foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. When collateral value is used, the mortgage loans may not have a credit loss allowance when the fair value of the collateral exceeds the loan’s amortized cost. An alternative approach may be utilized to estimate credit losses using the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate. Individual loan credit loss allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows. Debt service coverage ratio is considered a key credit quality indicator when mortgage loan credit loss allowances are estimated. Debt service coverage ratio represents the amount of estimated cash flow from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process. The following table reflects mortgage loans amortized cost by debt service coverage ratio distribution and year of origination as of December 31. ($ in thousands) 2020 2019 2015 and prior 2016 2017 2018 2019 Current Total Total Below 1.0 $ — $ — $ — $ — $ — $ — $ — $ — 1.0 - 1.25 31,451 — 16,187 5,000 14,078 13,800 80,516 48,780 1.26 - 1.50 79,681 6,290 27,786 12,009 52,456 — 178,222 221,384 Above 1.50 171,774 60,568 13,216 61,913 53,586 13,000 374,057 463,094 Amortized cost before allowance $ 282,906 $ 66,858 $ 57,189 $ 78,922 $ 120,120 $ 26,800 $ 632,795 $ 733,258 Allowance (1) (11,093) — Amortized cost, net $ 621,702 $ 733,258 _______________ (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses. Payments on all mortgage loans were current as of December 31, 2020, 2019 and 2018. During the fourth quarter of 2020, the Company sold $50.1 million of mortgage loans, net of a $4.7 million credit loss allowance, resulting in a net realized capital gain of $238 thousand. The rollforward of credit loss allowance for mortgage loans for the years ended December 31 is as follows: ($ in thousands) 2020 Beginning balance $ — Cumulative effect of change in accounting principle (6,129) Net increases related to credit losses (9,691) Reduction of allowance related to sales 4,727 Write-offs — Ending balance $ (11,093) |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | 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: (1) Specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs. (2) Quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources. Certain assets are not carried at fair value on a recurring basis, including mortgage loans and policy loans, and these are only included in the fair value hierarchy disclosure when the individual investment is reported at fair value. 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 inputs and valuation techniques for Level 2 and Level 3 assets and liabilities measured at fair value on a recurring basis Level 2 measurements • Fixed income securities: U.S. government and agencies, municipal, corporate - public and foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. Corporate - privately placed: Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer. Corporate - privately placed also includes redeemable preferred stock that are valued using quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, underlying stock prices and credit spreads. MBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads. Residential MBS includes prepayment speeds as a primary input for valuation. • Equity securities : The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that are not active. • Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. • Other investments : Free-standing exchange listed derivatives that are not actively traded are valued based on quoted prices for identical instruments in markets that are not active. Over-the-counter (“OTC”) derivatives, including foreign exchange forward contracts and options, are valued using models that rely on inputs such as currency rates that are observable for substantially the full term of the contract. The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment. Level 3 measurements • Fixed income securities: Municipal: Comprise municipal bonds that are not rated by third-party credit rating agencies. The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements, contractual cash flows, benchmark yields and credit spreads. Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Corporate - public and privately placed and ABS: Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Other inputs for corporate fixed income securities include an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer. • Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements. • Other investments: Certain OTC derivatives, such as interest rate caps, are valued using models that are widely accepted in the financial services industry. These are categorized as Level 3 as a result of the significance of non-market observable inputs such as volatility. Other primary inputs include interest rate yield curves. • Other assets: Includes a structured settlement annuity reinsurance agreement accounted for as a derivative instrument that is valued internally. The model primarily uses stochastically determined cash flows, ultimate reinvestment spreads and applicable market data, such as interest rate and volatility assumptions. This item is categorized as Level 3 as a result of the significance of non-market observable inputs. • Contractholder funds: Derivatives embedded in certain life and annuity contracts are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs. 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 of the typical contractual life of 10-12 years. As of December 31, 2020, the Company has commitments to invest $23.9 million in these limited partnership interests. The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2020. ($ in thousands) Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 102,167 $ 42,738 $ — $ 144,905 Municipal — 528,272 16,281 544,553 Corporate - public — 3,122,120 5,560 3,127,680 Corporate - privately placed — 1,021,072 4,975 1,026,047 Foreign government — 72,087 — 72,087 MBS — 3,602 — 3,602 Total fixed income securities 102,167 4,789,891 26,816 4,918,874 Equity securities 243,076 590 7,771 251,437 Short-term investments 112,293 20,752 — 133,045 Other investments: Free-standing derivatives — 8,451 23 $ (377) 8,097 Separate account assets 286,751 — — 286,751 Other assets — — 313,900 313,900 Total recurring basis assets $ 744,287 $ 4,819,684 $ 348,510 $ (377) $ 5,912,104 % of total assets at fair value 12.6 % 81.5 % 5.9 % — % 100.0 % Investments reported at NAV 108,487 Total $ 6,020,591 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (20,193) $ (20,193) Other liabilities: Free-standing derivatives — (5,808) — $ 287 (5,521) Total recurring basis liabilities $ — $ (5,808) $ (20,193) $ 287 $ (25,714) % of total liabilities at fair value — % 22.6 % 78.5 % (1.1) % 100.0 % The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2019. ($ in thousands) Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 2,250 $ 50,564 $ — $ 52,814 Municipal — 530,584 21,696 552,280 Corporate - public — 2,688,680 5,221 2,693,901 Corporate - privately placed — 962,072 19,272 981,344 Foreign government — 140,166 — 140,166 MBS — 13,857 — 13,857 Total fixed income securities 2,250 4,385,923 46,189 4,434,362 Equity securities 265,195 858 8,080 274,133 Short-term investments 124,763 99,335 — 224,098 Other investments: Free-standing derivatives — 6,008 75 $ (846) 5,237 Separate account assets 265,546 — — 265,546 Other assets — — 231,491 231,491 Total recurring basis assets $ 657,754 $ 4,492,124 $ 285,835 $ (846) $ 5,434,867 % of total assets at fair value 12.1 % 82.6 % 5.3 % — % 100.0 % Investments reported at NAV 109,066 Total $ 5,543,933 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (16,653) $ (16,653) Other liabilities: Free-standing derivatives — (2,920) — $ 15 (2,905) Total recurring basis liabilities $ — $ (2,920) $ (16,653) $ 15 $ (19,558) % of total liabilities at fair value — % 15.0 % 85.1 % (0.1) % 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 Unobservable Range Weighted December 31, 2020 Other assets – Structured settlement annuity reinsurance agreement $ 313,900 Stochastic cash flow model Ultimate reinvestment spreads 119.0 - 226.0 basis points 170.3 basis points Derivatives embedded in life contracts – equity-indexed and forward starting options $ (19,478) Stochastic cash flow model Projected option cost 3.9 - 4.2% 4.01% December 31, 2019 Other assets – Structured settlement annuity reinsurance agreement $ 231,491 Stochastic cash flow model Ultimate reinvestment spreads 129.8 - 203.6 basis points 165.7 basis points Derivatives embedded in life contracts - equity indexed and forward starting options $ (14,239) Stochastic cash flow model Projected option cost 3.9 - 4.2% 4.00% If the ultimate reinvestment spreads increased (decreased), it would result in a lower (higher) fair value for the structured settlement annuity reinsurance agreement. The embedded derivatives are equity-indexed and forward starting options in certain life products that provide customers with interest crediting rates based on the performance of the S&P 500. If the projected option cost increased (decreased), it would result in a higher (lower) liability fair value. As of December 31, 2020 and 2019, Level 3 fair value measurements of fixed income securities total $26.8 million and $46.2 million, respectively, and include $9.6 million and $8.4 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. As the Company does not develop the Level 3 fair value unobservable inputs for these fixed income securities, they are not included in the table above. However, an increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value. The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2020. ($ in thousands) Total gains (losses) Balance as of December 31, 2019 Net OCI Transfers Transfers Purchases Sales Issues Settlements Balance as of December 31, 2020 Assets Fixed income securities: Municipal $ 21,696 $ (30) $ 87 $ 6,013 $ (10,619) $ — $ (866) $ — $ — $ 16,281 Corporate - public 5,221 1 338 — — — — — — 5,560 Corporate - privately placed 19,272 11 (168) 2,141 (11,130) — (4,685) — (466) 4,975 Total fixed income securities 46,189 (18) 257 8,154 (21,749) — (5,551) — (466) 26,816 Equity securities 8,080 (310) — — — 1 — — — 7,771 Free-standing derivatives, net 75 (38) — — — 25 — — (39) 23 (1) Other assets 231,491 82,409 — — — — — — — 313,900 Total recurring Level 3 assets $ 285,835 $ 82,043 $ 257 $ 8,154 $ (21,749) $ 26 $ (5,551) $ — $ (505) $ 348,510 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (16,653) $ (1,822) $ — $ — $ — $ — $ — $ (2,763) $ 1,045 $ (20,193) Total recurring Level 3 liabilities $ (16,653) $ (1,822) $ — $ — $ — $ — $ — $ (2,763) $ 1,045 $ (20,193) ____________________ (1) Comprises $23 thousand of assets. The following table presents the total Level 3 gains (losses) included in net income for the year ended December 31, 2020. ($ in thousands) Net investment income Realized capital gains and losses Contract benefits Interest credited to contractholder funds Total Components of net income $ (1,467) $ 83,510 $ 1,699 $ (3,521) $ 80,221 The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2019. ($ in thousands) Total gains (losses) Balance as of December 31, 2018 Net OCI Transfers Transfers Purchases Sales Issues Settlements Balance as of December 31, 2019 Assets Fixed income securities: Municipal $ 20,821 $ — $ 1,695 $ — $ — $ — $ (820) $ — $ — $ 21,696 Corporate - public 6,761 1 542 — (2,083) — — — — 5,221 Corporate - privately placed 11,190 6 422 13,987 — — — — (6,333) 19,272 Total fixed income securities 38,772 7 2,659 13,987 (2,083) — (820) — (6,333) 46,189 Equity securities 12,162 2,653 — — (16) 210 (6,768) — (161) 8,080 Free-standing derivatives, net 394 (200) — — — 18 — — (137) 75 (1) Other assets 169,386 62,105 — — — — — — — 231,491 Total recurring Level 3 assets $ 220,714 $ 64,565 $ 2,659 $ 13,987 $ (2,099) $ 228 $ (7,588) $ — $ (6,631) $ 285,835 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (3,801) $ (1,664) $ — $ (10,128) $ — $ — $ — $ (1,283) $ 223 $ (16,653) Total recurring Level 3 liabilities $ (3,801) $ (1,664) $ — $ (10,128) $ — $ — $ — $ (1,283) $ 223 $ (16,653) ____________________ (1) Comprises $75 thousand of assets. The following table presents the total Level 3 gains (losses) included in net income for the year ended December 31, 2019. ($ in thousands) Net investment income Realized capital gains and losses Contract benefits Interest credited to contractholder funds Total Components of net income $ (535) $ 65,100 $ 987 $ (2,651) $ 62,901 The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018. ($ in thousands) Total gains (losses) Balance as of December 31, 2017 Net OCI Transfers Transfers Purchases Sales Issues Settlements Balance as of December 31, 2018 Assets Fixed income securities: Municipal $ 21,178 $ — $ (357) $ — $ — $ — $ — $ — $ — $ 20,821 Corporate - public 7,312 1 (383) — — — — — (169) 6,761 Corporate - privately placed 55,979 4 (639) — (22,957) — — — (21,197) 11,190 ABS 15,205 — (205) — — — — — (15,000) — Total fixed income securities 99,674 5 (1,584) — (22,957) — — — (36,366) 38,772 Equity securities 7,159 2,600 (5) — — 3,723 (1,315) — — 12,162 Free-standing derivatives, net 336 65 — — — 66 — — (73) 394 (1) Other assets 166,290 3,096 — — — — — — — 169,386 Total recurring Level 3 assets $ 273,459 $ 5,766 $ (1,589) $ — $ (22,957) $ 3,789 $ (1,315) $ — $ (36,439) $ 220,714 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (4,796) $ 995 $ — $ — $ — $ — $ — $ — $ — $ (3,801) Total recurring Level 3 liabilities $ (4,796) $ 995 $ — $ — $ — $ — $ — $ — $ — $ (3,801) ____________________ (1) Comprises $394 thousand of assets. The following table presents the total Level 3 gains (losses) included in net income for the year ended December 31, 2018. ($ in thousands) Net investment income Realized capital gains and losses Contract benefits Interest credited to contractholder funds Total Components of net income $ 3 $ 5,763 $ (326) $ 1,321 $ 6,761 Transfers into Level 3 during 2020, 2019 and 2018 included situations where a 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 into Level 3 during 2019 also included derivatives embedded in equity-indexed universal life contracts due to refinements in the valuation modeling resulting in an increase in significance of non-market observable inputs. Transfers out of Level 3 during 2020, 2019 and 2018 included situations where a broker quote was used in the prior period and a 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 and OCI for Level 3 assets and liabilities held as of December 31. ($ in thousands) 2020 2019 2018 Assets Fixed income securities: Municipal $ (30) $ — $ — Corporate - public 1 1 1 Corporate - privately placed 2 2 2 Total fixed income securities (27) 3 3 Free-standing derivatives, net (38) (200) 65 Equity securities (310) 82 2,594 Other assets 82,409 62,105 3,096 Total recurring Level 3 assets $ 82,034 $ 61,990 $ 5,758 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (1,822) $ (1,664) $ 995 Total recurring Level 3 liabilities $ (1,822) $ (1,664) $ 995 Total included in net income $ 80,212 $ 60,326 $ 6,753 Components of net income Net investment income $ (1,467) $ (535) $ 3 Realized capital gains (losses) 83,501 62,525 5,755 Contract benefits 1,699 987 (326) Interest credited to contractholder funds (3,521) (2,651) 1,321 Total included in net income $ 80,212 $ 60,326 $ 6,753 Assets Municipal $ 87 Corporate - public 338 Corporate - privately placed 27 Changes in unrealized net capital gains and losses reported in OCI (1) $ 452 ___________________ (1) Effective January 1, 2020, the Company adopted the fair value accounting standard that prospectively requires the disclosure of valuation changes reported in OCI. Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value. ($ in thousands) December 31, 2020 December 31, 2019 Financial assets Fair value level Amortized cost, net Fair Amortized cost, net Fair Mortgage loans Level 3 $ 621,702 $ 660,862 $ 733,258 $ 764,201 Financial liabilities Fair value level Carrying value (1) Fair Carrying value (1) Fair Contractholder funds on investment contracts Level 3 $ 1,504,295 $ 1,735,933 $ 1,605,574 $ 1,730,341 Liability for collateral Level 2 76,393 76,393 158,111 158,111 ___________________ |
Derivative Financial Instrument
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | Derivative Financial Instruments and Off-balance sheet Financial Instruments 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 host contracts that are required to be separated from the host contracts and accounted for at fair value with changes in fair value of embedded derivatives reported in net income. The Company’s primary embedded derivatives are guaranteed minimum accumulation and withdrawal benefits in reinsured variable annuity contracts, and equity options in life product contracts, which provide returns linked to equity indices to contractholders. 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 accounting is generally used for “portfolio” level hedging strategies where the terms of the individual hedged items do not meet the strict homogeneity requirements to permit the application of hedge accounting. For non-hedge derivatives, net income includes changes in fair value and accrued periodic settlements, when applicable. With the exception of non-hedge embedded derivatives, all of the Company’s derivatives are evaluated for their ongoing effectiveness as either accounting hedge or non-hedge derivative financial instruments on at least a quarterly basis. The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Statement of Financial Position as of December 31, 2020. None of these derivatives are designated as accounting hedging instruments. ($ in thousands, except number of contracts) Volume (1) Balance sheet location Notional Number Fair Gross Gross Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 13,100 n/a $ 23 $ 23 $ — Equity and index contracts Options Other investments n/a 132 8,000 8,000 $ — Foreign currency contracts Foreign currency forwards Other investments 3,513 n/a (200) 17 (217) Other contracts Structured settlement annuity reinsurance agreement Other assets n/a 1 313,900 313,900 — Total asset derivatives $ 16,613 133 $ 321,723 $ 321,940 $ (217) Liability derivatives Equity and index contracts Options Other liabilities & accrued expenses n/a 132 $ (5,411) $ — $ (5,411) Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 11,071 n/a 250 430 (180) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 18,322 n/a (423) — (423) Guaranteed withdrawal benefits Contractholder funds 14,146 n/a (292) — (292) Equity-indexed options in life product contracts Contractholder funds 52,340 n/a (19,478) — (19,478) Total liability derivatives 95,879 132 (25,354) $ 430 $ (25,784) Total derivatives $ 112,492 265 $ 296,369 _________________ (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, 2019. None of these derivatives are designated as accounting hedging instruments. ($ in thousands, except number of contracts) Volume Balance sheet location Notional Number Fair Gross Gross Asset derivatives Equity and index contracts Options Other investments n/a 140 $ 5,232 $ 5,232 — Other contracts Structured settlement annuity reinsurance agreement Other assets n/a — 231,491 231,491 — Total asset derivatives 140 $ 236,723 $ 236,723 $ — Liability derivatives Interest rate contracts Interest rate cap agreements Other liabilities & accrued expenses $ 13,400 n/a $ 75 $ 75 $ — Equity and index contracts Options Other liabilities & accrued expenses n/a 139 (2,832) — (2,832) Futures Other liabilities & accrued expenses n/a 1 — — — Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 17,984 n/a 683 771 (88) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 23,629 n/a (1,987) — (1,987) Guaranteed withdrawal benefits Contractholder funds 15,369 n/a (427) — (427) Equity-indexed options in life product contracts Contractholder funds 43,855 n/a (14,239) — (14,239) Total liability derivatives 114,237 140 (18,727) $ 846 $ (19,573) Total derivatives $ 114,237 280 $ 217,996 The following table provides gross and net amounts for the Company’s OTC derivatives, all of which are subject to enforceable master netting agreements. ($ in thousands) Offsets Gross Counter- Cash Net Securities Net December 31, 2020 Asset derivatives $ 470 $ (647) $ 270 $ 93 $ — $ 93 Liability derivatives (397) 647 (360) (110) — (110) December 31, 2019 Asset derivatives $ 846 $ (846) $ — $ — $ — $ — Liability derivatives (88) 846 (831) (73) — (73) 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 capital gains and losses Contract Interest credited to contractholder funds Total gain (loss) recognized in net income on derivatives 2020 Interest rate contracts $ (37) $ — $ — $ (37) Equity and index contracts (1) — 845 844 Embedded derivative financial instruments — 1,699 (5,239) (3,540) Foreign currency contracts (304) — — (304) Other contracts - structured settlement annuity reinsurance agreement 100,754 — — 100,754 Total $ 100,412 $ 1,699 $ (4,394) $ 97,717 2019 Interest rate contracts $ (200) $ — $ — $ (200) Equity and index contracts 1 — 1,987 1,988 Embedded derivative financial instruments — 987 (3,711) (2,724) Foreign currency contracts 364 — — 364 Other contracts - structured settlement annuity reinsurance agreement 58,922 — — 58,922 Total $ 59,087 $ 987 $ (1,724) $ 58,350 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 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, 2020, counterparties pledged $360 thousand in collateral to the Company, and the Company pledged $270 thousand in cash and securities to counterparties posted under MNAs for contracts without credit-risk contingent features. The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance. Other derivatives, including futures and certain option contracts, are traded on organized exchanges which require margin deposits and guarantee the execution of trades, thereby mitigating any potential credit risk. Counterparty credit exposure represents the Company’s potential loss if all of the counterparties concurrently fail to perform under the contractual terms of the contracts and all collateral, if any, becomes worthless. This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements. The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. ($ in thousands) 2020 2019 Rating (1) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) A+ 1 $ 8,341 $ 349 $ — 2 $ 30,670 $ 770 $ — _________________ (1) Allstate uses the lower of S&P’s 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, 2020, the Company pledged $400 thousand in the form of margin deposits. Market risk is the risk that the Company will incur losses due to adverse changes in market rates and prices. Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions. To limit this risk, the Company’s senior management has established risk control limits. In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions. Certain of the Company’s derivative instruments contain credit-risk-contingent cross-default provisions. Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative agreement if the Company defaults by pre-determined threshold amounts on certain debt instruments. The following summarizes the fair value of derivative instruments with credit-risk-contingent features that are in a gross liability position as of December 31, as well as the fair value of assets and collateral that are netted against the liability in accordance with provisions within legally enforceable MNAs. ($ in thousands) 2020 2019 Gross liability fair value of contracts containing credit-risk-contingent features $ 101 $ 83 Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs (2) (70) Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently $ 99 $ 13 Off-balance sheet financial instruments The contractual amounts of off-balance sheet financial instruments as of December 31 are as follows: ($ in thousands) 2020 2019 Commitments to invest in limited partnership interests $ 98,858 $ 127,515 Commitments to extend mortgage loans — 13,000 Private placement commitments 21 15,000 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 sheet financial instruments with credit risk. Commitments to invest in limited partnership interests represent agreements to acquire new or additional participation in certain limited partnership investments. The Company enters into these agreements in the normal course of business. Because the investments in limited partnerships are not actively traded, it is not practical to estimate the fair value of these commitments. Commitments to extend mortgage loans are agreements to lend to a borrower provided there is no violation of any condition established in the contract. The Company enters into these agreements to commit to future loan fundings at 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 debt and equity securities at a future date. The Company enters into these agreements in the normal course of business. The fair value of the debt 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, 2020 | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 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) 2020 2019 Immediate fixed annuities: Structured settlement annuities $ 2,347,415 $ 2,051,363 Other immediate fixed annuities 58,832 61,039 Traditional life insurance 273,067 265,971 Accident and health insurance 18,218 32,261 Other 851 1,175 Total reserve for life-contingent contract benefits $ 2,698,383 $ 2,411,809 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 Actual company experience with projected calendar year improvements 6.0% Present value of contractually specified future benefits and expenses Other immediate fixed annuities Actual company experience with projected calendar year improvements 6.0% Present value of expected future benefits and expenses 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 1.4% 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”). In the third quarter of 2020, the premium deficiency evaluation of the Company’s immediate annuities with life contingencies resulted in a premium deficiency reserve of $196.0 million. The long-term investment yield assumption was lowered, which resulted in the prior sufficiency changing to a deficiency. The deficiency was recognized as an increase in the reserve for life contingent contract benefits. The original assumptions used to establish reserves were updated to reflect current assumptions, and the primary changes included mortality expectations, where annuitants are living longer than originally anticipated, and long-term investment yields. In 2019, the Company’s reviews concluded that no premium deficiency adjustments were necessary. To the extent that unrealized gains on fixed income securities would result in a premium deficiency had those gains actually been realized, an insurance reserves adjustment is recorded for certain immediate annuities with life contingencies. This liability is included in the reserve for life-contingent contract benefits with respect to this unrealized deficiency. The offset to this liability is recorded as a reduction of the unrealized net capital gains included in AOCI. This liability was $321.6 million and $231.4 million as of December 31, 2020 and 2019, respectively. As of December 31, contractholder funds consist of the following: ($ in thousands) 2020 2019 Interest-sensitive life insurance $ 773,531 $ 756,995 Investment contracts: Fixed annuities 1,639,591 1,741,488 Other investment contracts 51,648 49,485 Total contractholder funds $ 2,464,770 $ 2,547,968 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 8.3% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.0% 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 0.6% to 7.0% 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 12.2% of fixed annuities are subject to market value adjustment for discretionary withdrawals Other investment contracts: Guaranteed minimum income, accumulation and withdrawal benefits on variable annuities (1) and secondary guarantees on interest-sensitive life insurance and fixed annuities Interest rates used in establishing reserves range from 1.7% to 10.3% Withdrawal and surrender charges are based on the terms of the related variable annuity or interest-sensitive life 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) 2020 2019 2018 Balance, beginning of year $ 2,547,968 $ 2,681,300 $ 2,874,884 Deposits 104,355 104,850 107,606 Interest credited 83,769 86,338 91,430 Benefits (102,483) (104,681) (114,006) Surrenders and partial withdrawals (100,697) (152,898) (190,873) Contract charges (76,801) (75,879) (75,483) Net transfers (to) from separate accounts (84) 88 256 Other adjustments 8,743 8,850 (12,514) Balance, end of year $ 2,464,770 $ 2,547,968 $ 2,681,300 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 $237.9 million and $222.2 million of equity, fixed income and balanced mutual funds and $22.3 million and $21.7 million of money market mutual funds as of December 31, 2020 and 2019, respectively. The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. ($ in thousands) As of December 31, 2020 2019 In the event of death Separate account value $ 260,159 $ 243,833 Net amount at risk (1) $ 4,081 $ 4,392 Average attained age of contractholders 71 years 68 years At annuitization (includes income benefit guarantees) Separate account value $ 21,409 $ 18,849 Net amount at risk (2) $ 1,674 $ 1,750 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 13,999 $ 15,173 Net amount at risk (3) $ 234 $ 421 Accumulation at specified dates Separate account value $ 18,285 $ 24,033 Net amount at risk (4) $ 117 $ 224 Weighted average waiting period until guarantee date 2 years 3 years ________________________ (1) Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. (2) Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. (3) Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. (4) Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance . The liability for death and income benefit guarantees is equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest less contract excess guarantee benefit payments. The benefit ratio is calculated as the estimated present value of all expected contract excess guarantee benefits divided by the present value of all expected contract charges. The establishment of reserves for these guarantees requires the projection of future fund values, mortality, persistency and customer benefit utilization rates. These assumptions are periodically reviewed and updated. For guarantees related to death benefits, benefits represent the projected excess guaranteed minimum death benefit payments. For guarantees related to income benefits, benefits represent the present value of the minimum guaranteed annuitization benefits in excess of the projected account balance at the time of annuitization. Projected benefits and contract charges used in determining the liability for certain guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected gross profits. Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based on factors such as the extent of benefit to the potential annuitant, eligibility conditions and the annuitant’s attained age. The liability for guarantees is re-evaluated periodically, and adjustments are made to the liability balance through a charge or credit to contract benefits. Guarantees related to withdrawal and accumulation benefits are considered to be derivative financial instruments; therefore, the liability for these benefits is established based on its fair value. The following table summarizes the liabilities for guarantees. ($ in thousands) Liability for guarantees related to death benefits and interest-sensitive life products Liability for guarantees related to income benefits Liability for guarantees related to accumulation and withdrawal benefits Total Balance, December 31, 2019 $ 34,135 $ 336 $ 2,414 $ 36,885 Less reinsurance recoverables 1,189 333 2,414 3,936 Net balance as of December 31, 2019 32,946 3 — 32,949 Incurred guarantee benefits 6,041 — — 6,041 Paid guarantee benefits (745) — — (745) Net change 5,296 — — 5,296 Net balance as of December 31, 2020 38,242 3 — 38,245 Plus reinsurance recoverables 877 267 715 1,859 Balance, December 31, 2020 $ 39,119 $ 270 $ 715 $ 40,104 Balance, December 31, 2018 $ 30,674 $ 572 $ 3,401 $ 34,647 Less reinsurance recoverables 1,752 568 3,401 5,721 Net balance as of December 31, 2018 28,922 4 — 28,926 Incurred guarantee benefits 4,412 (1) — 4,411 Paid guarantee benefits (388) — — (388) Net change 4,024 (1) — 4,023 Net balance as of December 31, 2019 32,946 3 — 32,949 Plus reinsurance recoverables 1,189 333 2,414 3,936 Balance, December 31, 2019 $ 34,135 $ 336 $ 2,414 $ 36,885 The following table summarizes reserves included in total liability balance for guarantees by type of benefit as of December 31. ($ in thousands) 2020 2019 2018 Variable annuity Death benefits $ 851 $ 1,174 $ 1,752 Income benefits 267 333 568 Accumulation benefits 423 1,987 3,003 Withdrawal benefits 292 427 398 Other guarantees 38,271 32,964 28,926 Total $ 40,104 $ 36,885 $ 34,647 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | 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, 2020 and 2019, 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 $2.0 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 $162.9 million and $166.9 million as of December 31, 2020 and 2019, respectively, due from Prudential related to the disposal of its variable annuity business that was effected through reinsurance agreements. The amounts ceded to Prudential for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Premiums and contract charges $ 4,750 $ 4,797 $ 5,189 Contract benefits (1,524) (890) 1,459 Interest credited to contractholder funds 4,503 4,307 4,533 Operating costs and expenses 712 867 868 As of December 31, 2020 and 2019, the Company had reinsurance recoverables of $282 thousand and $579 thousand, respectively, due from a subsidiary of Citigroup (Triton Insurance Company) and Scottish Re (U.S.), Inc. in connection with the disposition of the direct response distribution business in 2003. As of December 31, 2020, the gross life insurance in force was $42.27 billion of which $433.3 million and $7.90 billion were ceded to affiliated and unaffiliated reinsurers, respectively. The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Direct $ 174,812 $ 203,614 $ 199,289 Assumed - non-affiliate 588 697 685 Ceded Affiliate (2,308) (2,186) (1,972) Non-affiliate (15,674) (16,359) (17,361) Premiums and contract charges, net of reinsurance $ 157,418 $ 185,766 $ 180,641 The effects of reinsurance on contract benefits for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Direct $ 445,983 $ 272,200 $ 248,008 Assumed - non-affiliate 324 500 586 Ceded Affiliate (945) (2,354) (55) Non-affiliate (10,721) (11,333) (10,961) Contract benefits, net of reinsurance $ 434,641 $ 259,013 $ 237,578 The effects of reinsurance on interest credited to contractholder funds for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Direct $ 88,814 $ 90,758 $ 96,002 Assumed - non-affiliate 13 13 13 Ceded - non-affiliate (4,503) (4,307) (4,533) Interest credited to contractholder funds, net of reinsurance $ 84,324 $ 86,464 $ 91,482 In addition to amounts included in the table above are reinsurance premiums ceded to ALIC of $3.3 million, $4.2 million and $3.4 million and settlements received from ALIC of $21.7 million, $1.0 million and zero in 2020, 2019 and 2018, respectively, under the terms of the structured settlement annuity reinsurance agreement (see Note 4). The following table shows the rollforward of the credit loss allowance for reinsurance recoverables for the year ended December 31. ($ in thousands) 2020 Beginning balance $ (34) Cumulative effect of change in accounting principle (621) Decrease in the provision for credit losses 31 Write-offs — Ending Balance $ (624) |
Deferred Policy Acquisition and
Deferred Policy Acquisition and Sales Inducement Costs | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition and Sales Inducement Costs | |
Deferred Policy Acquisition and Sales Inducement Costs | Deferred Policy Acquisition and Sales Inducement Costs Deferred policy acquisition costs for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Balance, beginning of year $ 124,118 $ 155,887 $ 146,333 Acquisition costs deferred 11,175 16,771 19,577 Amortization charged to income (20,346) (30,396) (16,299) Effect of unrealized gains and losses (13,735) (18,144) 6,276 Balance, end of year $ 101,212 $ 124,118 $ 155,887 DSI activity, which primarily relates to interest-sensitive life contracts, for the years ended December 31 was as follows: ($ in thousands) 2020 2019 2018 Balance, beginning of year $ 1,776 $ 2,391 $ 2,278 Sales inducements deferred 64 125 128 Amortization charged to income (619) (251) (181) Effect of unrealized gains and losses 549 (489) 166 Balance, end of year $ 1,770 $ 1,776 $ 2,391 |
Guarantees and Contingent Liabi
Guarantees and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Guarantees [Abstract] | |
Guarantees and Contingent Liabilities | 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, 2020 and 2019, the liability balance included in other liabilities and accrued expenses was $758 thousand and $759 thousand, respectively. The related premium tax offsets included in other assets were $911 thousand and $916 thousand as of December 31, 2020 and 2019, respectively. Guarantees In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third-party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations. The aggregate liability balance related to all guarantees was not material as of December 31, 2020. 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 agent 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, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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. The Internal Revenue Service (“IRS”) has completed its exam of the Allstate Group’s 2013 through 2016 federal income tax returns. The 2017 and 2018 audit cycle is expected to begin in the first quarter of 2021. Any adjustments that may result from IRS examinations of the Allstate Group’s tax return are not expected to have a material effect on the financial statements. 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, 2020, 2019 or 2018, and believes that the unrecognized tax benefits balance will not materially increase within the next twelve months. The components of the deferred income tax assets and liabilities as of December 31 are as follows: ($ in thousands) 2020 2019 Deferred tax assets Accrued liabilities $ 25 $ 25 Unrealized foreign currency translation adjustments on limited partnerships — 317 Other assets 148 20 Total deferred tax assets 173 362 Deferred tax liabilities Investments (96,249) (78,081) Unrealized net capital gains (56,038) (33,151) DAC (11,521) (14,447) Life and annuity reserves (2,483) (29,048) Unrealized foreign currency translation adjustments on limited partnerships (180) — Other liabilities (583) (484) Total deferred tax liabilities (167,054) (155,211) Net deferred tax liability $ (166,881) $ (154,849) 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 (benefit) expense for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Current $ (2,078) $ 36,766 $ 11,257 Deferred (9,915) (5,840) 1,570 Total income tax (benefit) expense $ (11,993) $ 30,926 $ 12,827 The Company paid income taxes of $37.2 million, $1.0 million and $16.0 million in 2020, 2019 and 2018, 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: 2020 2019 2018 Statutory federal income tax rate - (benefit) expense (21.0) % 21.0 % 21.0 % State income taxes 3.7 1.8 5.4 Adjustments to prior year tax liabilities (1.1) 1.4 (0.1) Tax Legislation benefit — — (3.9) Other (0.4) (0.1) (0.3) Effective income tax rate - (benefit) expense (18.8) % 24.1 % 22.1 % |
Statutory Financial Information
Statutory Financial Information and Dividend Limitations | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Financial Information and Dividend Limitations | |
Statutory Financial Information and Dividend Limitations | Statutory Financial Information and Dividend Limitations The Company prepares its statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the New York Department of Financial Services (“NYDFS”). 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 NYDFS. 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 (loss) income was $(66.1) million, $(34.0) million and $68.0 million in 2020, 2019 and 2018, respectively. Statutory capital and surplus was $555.9 million and $614.2 million as of December 31, 2020 and 2019, 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 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 2020. The Company cannot pay dividends without prior NYDFS approval at any given point in time during 2021. Any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which totaled $317.7 million as of December 31, 2020, 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 $643.6 million and $92.1 million, respectively, as of December 31, 2020. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans Pension and other postretirement plans Defined benefit pension plans and other postretirement 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 Corporation also provides a medical coverage subsidy for eligible employees hired before January 1, 2003, including their eligible dependents, when they retire. In September 2020, the Corporation announced it will eliminate the medical coverage subsidy effective January 1, 2021 for employees who are not eligible to retire as of December 31, 2020. The cost allocated to the Company for these plans was $303 thousand, $609 thousand and $439 thousand in 2020, 2019 and 2018, 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. The cost allocated to the Company for the Allstate Plan was $743 thousand, $953 thousand and $1.0 million in 2020, 2019 and 2018, respectively. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income The components of other comprehensive income (loss) on a pre-tax and after-tax basis for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Pre- Tax After- Pre- Tax After- Pre- Tax After- Unrealized net holding gains and losses arising during the period, net of related offsets $ 106,690 $ (22,404) $ 84,286 $ 86,980 $ (18,266) $ 68,714 $ (65,379) $ 13,730 $ (51,649) Less: reclassification adjustment of realized capital gains and losses (2,298) 483 (1,815) 1,395 (293) 1,102 (1,359) 285 (1,074) Unrealized net capital gains and losses 108,988 (22,887) 86,101 85,585 (17,973) 67,612 (64,020) 13,445 (50,575) Unrealized foreign currency translation adjustments 1,923 (404) 1,519 (3,963) 832 (3,131) 124 (26) 98 Other comprehensive income (loss) $ 110,911 $ (23,291) $ 87,620 $ 81,622 $ (17,141) $ 64,481 $ (63,896) $ 13,419 $ (50,477) |
SCHEDULE I - SUMMARY OF INVESTM
SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES DECEMBER 31, 2020 ($ in thousands) Cost/ Fair Amount shown Type of investment Fixed maturities: Bonds: United States government, government agencies and authorities $ 134,490 $ 144,905 $ 144,905 States, municipalities and political subdivisions 402,728 544,553 544,553 Foreign governments 67,435 72,087 72,087 Public utilities 683,019 789,742 789,742 All other corporate bonds 3,002,491 3,363,985 3,363,985 Mortgage-backed securities 3,329 3,602 3,602 Total fixed maturities 4,293,492 $ 4,918,874 4,918,874 Equity securities: Common stocks: Public utilities 4,299 $ 5,794 5,794 Banks, trusts and insurance companies 19,835 27,477 27,477 Industrial, miscellaneous and all other 156,462 215,930 215,930 Nonredeemable preferred stocks 1,665 2,236 2,236 Total equity securities 182,261 $ 251,437 251,437 Mortgage loans on real estate (none acquired in satisfaction of debt) 621,702 $ 660,862 621,702 Policy loans 37,294 37,294 Derivative instruments 8,097 $ 8,097 8,097 Limited partnership interests 343,251 343,251 Short-term investments 132,970 $ 133,045 133,045 Total investments $ 5,619,067 $ 6,313,700 |
SCHEDULE IV - REINSURANCE
SCHEDULE IV - REINSURANCE | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
SCHEDULE IV - REINSURANCE | SCHEDULE IV - REINSURANCE ($ in thousands) Gross Ceded to other companies (1) Assumed Net Percentage Year ended December 31, 2020 Life insurance in force $ 41,853,809 $ 8,329,864 $ 416,082 $ 33,940,027 1.2 % Premiums and contract charges: Life insurance $ 156,594 $ 17,131 $ 588 $ 140,051 0.4 % Accident and health insurance 18,218 851 — 17,367 — % Total premiums and contract charges $ 174,812 $ 17,982 $ 588 $ 157,418 0.4 % Year ended December 31, 2019 Life insurance in force $ 42,654,371 $ 8,581,710 $ 436,841 $ 34,509,502 1.3 % Premiums and contract charges: Life insurance $ 156,192 $ 17,595 $ 697 $ 139,294 0.5 % Accident and health insurance 47,422 950 — 46,472 — % Total premiums and contract charges $ 203,614 $ 18,545 $ 697 $ 185,766 0.4 % 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 % __________________ (1) No reinsurance or coinsurance income was netted against premiums ceded in 2020, 2019 or 2018. |
SCHEDULE V - VALUATION ALLOWANC
SCHEDULE V - VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE V - VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS | SCHEDULE V - VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS ($ in thousands) Additions Description Balance Cumulative effect of change in accounting principle (1) Charged Other Deductions Balance Year ended December 31, 2020 Allowance for credit losses on fixed income securities $ — $ — $ 255 $ — $ 255 $ — Allowance for credit losses on mortgage loans — 6,129 9,691 — 4,727 11,093 Allowance for credit losses on reinsurance recoverables 34 621 — — 31 624 Allowance for credit losses on other assets 4,259 — — — 129 4,130 Allowance for credit losses on commitments to fund mortgage loans — 97 — — 97 — Year ended December 31, 2019 Allowance for reinsurance recoverables $ — $ 34 $ — $ — $ 34 Allowance for estimated losses on mortgage loans — — — — — Year ended December 31, 2018 Allowance for estimated losses on mortgage loans $ — $ — $ — $ — $ — (1) Effective January 1, 2020, the Company adopted the measurement of credit losses on financial instruments accounting standard that primarily affected mortgage loans and reinsurance recoverables. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | 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. The Company operates as a single segment entity based on the manner in which the Company uses financial information to evaluate business performance and to determine the allocation of resources. |
Investments | Investments Fixed income securities include bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”). MBS includes residential and commercial mortgage-backed securities. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale (“AFS”) and are carried at fair value. The difference between amortized cost, net of credit loss allowances (“amortized cost, net”) and fair value, net of deferred income taxes and related deferred policy acquisition costs (“DAC”), deferred sales inducement costs (“DSI”) and reserves for life-contingent contract benefits, is reflected as a component of AOCI. The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed income securities. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Statements of Cash Flows. Mortgage loans are carried at amortized cost, net which represent the amount expected to be collected. The Company excludes accrued interest receivable from the amortized cost basis of its mortgage loans. Credit loss allowances are estimates of expected credit losses established for loans upon origination or purchase, and are established considering all relevant information available, including past events, current conditions, and reasonable and supportable forecasts over the life of the loans. Loans are evaluated on a pooled basis when they share similar risk characteristics; otherwise, they are evaluated individually. Equity securities primarily include common stocks, exchange traded funds, non-redeemable preferred stocks and real estate investment trust equity investments. Certain exchange traded funds have fixed income securities as their underlying investments. Equity securities are carried at fair value. Equity securities without readily determinable or estimable fair values are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include interests in 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 date. Interest income for ABS and MBS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS and MBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed income securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of amortized cost. Income from limited partnership interests carried at fair value is recognized based upon the changes in fair value of the investee’s equity primarily determined using NAV. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ earnings. Income from EMA limited partnership interests is generally recognized on a three Realized capital gains and losses include gains and losses on investment sales, changes in the credit loss allowances related to fixed income securities and mortgage loans, impairments, 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 and are net of credit losses already recognized through an allowance. |
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 can be reinvested in short-term investments or fixed income securities. 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% and 105% of the fair value of domestic and foreign securities, respectively, 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, net of any credit loss allowance for uncollectible premiums. 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 are recognized in relation to premiums with the establishment of a reserve. The change in reserve over time is recorded in contract benefits and primarily relates to accumulation at the discount rate and annuitant mortality. 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 | Other revenue Other revenue represents gross dealer concessions received in connection with sales of non-proprietary products by Allstate exclusive agents and exclusive financial specialists. Other revenue is recognized when performance obligations are fulfilled. |
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 agent and broker 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 using actual experience and current assumptions. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance products are reviewed individually. 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 any remaining deficiency. 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 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life. The rate of DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are 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. |
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 reserves 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 reserves 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 evaluates reinsurer counterparty credit risk and records reinsurance recoverables net of credit loss allowances. The Company assesses counterparty credit risk for individual reinsurers separately when more relevant or on a pooled basis when shared risk characteristics exist. The evaluation considers the credit quality of the reinsurer and the period over which the recoverable balances are expected to be collected. The Company considers factors including past events, current conditions and reasonable and supportable forecasts in the development of the estimate of credit loss allowances. The Company uses a probability of default and loss given default model developed independently of the Company to estimate current expected credit losses. The model utilizes factors including historical industry factors based on the probability of liquidation, and incorporates current loss given default factors reflective of the industry. The Company monitors the credit ratings of reinsurer counterparties and evaluates the circumstances surrounding credit rating changes as inputs into its credit loss assessments. Uncollectible reinsurance recoverable balances are written off against the allowances when there is no reasonable expectation of recovery. The changes in the allowance are reported in contract benefits. The Company has a reinsurance treaty with ALIC through which it 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, premiums paid to ALIC and settlements received from 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 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 for any remaining deficiency. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance are reviewed individually. 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 |
Contractholder funds | Contractholder fundsContractholder 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. |
Measurement of credit losses | Measurement of credit losses The Company carries an allowance for expected credit losses for all financial assets measured at amortized cost on the Statements of Financial Position. The Company considers past events, current conditions and reasonable and supportable forecasts in estimating an allowance for credit losses. The Company also carries a credit loss allowance for fixed income securities where applicable and, when amortized cost is reported, it is net of credit loss allowances. For additional information, refer to the Investments or Reinsurance topics of this section. The Company also estimates a credit loss allowance for commitments to fund mortgage loans unless they are unconditionally cancellable by the Company. The related allowance is reported in other liabilities and accrued expenses. |
Off-balance sheet financial instruments | Off-balance sheet financial instruments Commitments to invest, commitments to purchase private placement securities, commitments to fund mortgage loans and financial guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Statements of Financial Position (see Note 7 and Note 11). |
Adopted accounting standard and Pending accounting standard | Adopted accounting standard Measurement of Credit Losses on Financial Instruments Effective January 1, 2020 the Company adopted new Financial Accounting Standards Board (“FASB”) guidance related to the measurement of credit losses on financial instruments that primarily affected mortgage loans and reinsurance recoverables. Upon adoption of the guidance, the Company recorded a total allowance for expected credit losses of $11.1 million, pre-tax. After consideration of existing valuation allowances maintained prior to adopting the new guidance, the Company increased its valuation allowances for credit losses to conform to the new requirements which resulted in recognizing a cumulative effect decrease in retained income of $5.4 million, after-tax, at the date of adoption. The measurement of credit losses for AFS fixed income securities measured at fair value is not affected except that credit losses recognized are limited to the amount by which fair value is below amortized cost and the credit loss adjustment is recognized through a valuation allowance which may change over time but once recorded cannot subsequently be reduced to an amount below zero. Previously these credit loss adjustments were recorded as other than temporary impairments and were not reversed once recorded. Pending accounting standards 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 introduces material changes to 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 measured on a retrospective basis and reported in net income. In addition, reserves 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. Current GAAP requires the measurement of reserves to utilize assumptions set at policy issuance unless updated current assumptions indicate that recorded reserves are deficient. The new guidance also 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 lapse experience exceeds expected experience. 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. All market risk benefit product features will 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 reporting entity’s own credit risk, which are required to be recognized in OCI. Substantially all of the Company’s market risk benefits relate to variable annuities that are reinsured and therefore these impacts are not expected to be material to the Company. The new guidance is effective for financial statements issued for reporting periods beginning after December 15, 2022, and restatement of prior periods presented is required. Early adoption is permitted and if elected, restatement of only one prior period is required. The new guidance will be applied to affected contracts and DAC on the basis of existing carrying amounts at the earliest period presented or 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. The requirements of the new guidance represent a material change from existing GAAP, however, the underlying economics of the business and related cash flows are unchanged. The Company anticipates the financial statement impact of adopting the new guidance to be material, largely attributed to the impact of transitioning to a discount rate based on an upper-medium grade fixed income investment yield. The Company expects the most significant impacts will occur in the run-off annuity business. 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 eliminated. Simplifications to the Accounting for Income Taxes In December 2019, the FASB issued amendments to simplify the accounting for income taxes. The amendments eliminate certain exceptions in the existing guidance including those related to intraperiod tax allocation and deferred tax liability recognition when a subsidiary meets the criteria to apply the equity method of accounting. The amendments require recognition of the effect of an enacted change in tax laws or rates in the period that includes the enactment date, provide an option to not allocate taxes to a legal entity that is not subject to tax as well as other minor changes. The amendments are effective for |
Fair value measurement | 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: (1) Specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs. (2) Quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources. Certain assets are not carried at fair value on a recurring basis, including mortgage loans and policy loans, and these are only included in the fair value hierarchy disclosure when the individual investment is reported at fair value. 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 inputs and valuation techniques for Level 2 and Level 3 assets and liabilities measured at fair value on a recurring basis Level 2 measurements • Fixed income securities: U.S. government and agencies, municipal, corporate - public and foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. Corporate - privately placed: Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer. Corporate - privately placed also includes redeemable preferred stock that are valued using quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, underlying stock prices and credit spreads. MBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads. Residential MBS includes prepayment speeds as a primary input for valuation. • Equity securities : The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that are not active. • Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. • Other investments : Free-standing exchange listed derivatives that are not actively traded are valued based on quoted prices for identical instruments in markets that are not active. Over-the-counter (“OTC”) derivatives, including foreign exchange forward contracts and options, are valued using models that rely on inputs such as currency rates that are observable for substantially the full term of the contract. The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment. Level 3 measurements • Fixed income securities: Municipal: Comprise municipal bonds that are not rated by third-party credit rating agencies. The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements, contractual cash flows, benchmark yields and credit spreads. Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Corporate - public and privately placed and ABS: Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Other inputs for corporate fixed income securities include an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer. • Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements. • Other investments: Certain OTC derivatives, such as interest rate caps, are valued using models that are widely accepted in the financial services industry. These are categorized as Level 3 as a result of the significance of non-market observable inputs such as volatility. Other primary inputs include interest rate yield curves. • Other assets: Includes a structured settlement annuity reinsurance agreement accounted for as a derivative instrument that is valued internally. The model primarily uses stochastically determined cash flows, ultimate reinvestment spreads and applicable market data, such as interest rate and volatility assumptions. This item is categorized as Level 3 as a result of the significance of non-market observable inputs. • Contractholder funds: Derivatives embedded in certain life and annuity contracts are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs. |
General (Tables)
General (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
General | |
Summary of premiums and contract charges by product | The following table summarizes premiums and contract charges by product. ($ in thousands) 2020 2019 2018 Premiums Traditional life insurance $ 62,575 $ 61,980 $ 59,185 Accident and health insurance 17,367 46,472 44,262 Total premiums 79,942 108,452 103,447 Contract charges Interest-sensitive life insurance 77,557 77,324 76,931 Fixed annuities (81) (10) 263 Total contract charges 77,476 77,314 77,194 Total premiums and contract charges $ 157,418 $ 185,766 $ 180,641 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of allowance for credit loss | The Company’s allowance for credit losses is presented in the following table. ($ in millions) December 31, 2020 January 1, 2020 Mortgage loans $ 11,093 $ 6,129 Investments 11,093 6,129 Reinsurance recoverables 624 655 Other assets 4,130 4,259 Assets 15,847 11,043 Commitments to fund mortgage loans — 97 Liabilities — 97 Total $ 15,847 $ 11,140 Rollforward of credit loss allowance for fixed income securities for the year ended December 31, 2020 is as follows: ($ in thousands) 2020 Beginning balance $ — Credit losses on securities for which credit losses not previously reported (255) Reduction of allowance related to sales 255 Write-offs — Ending balance $ — |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information from collateralized securities received | 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) 2020 2019 2018 Net change in proceeds managed Net change in short-term investments $ 81,718 $ (88,323) $ (10,721) Operating cash flow provided (used) $ 81,718 $ (88,323) $ (10,721) Net change in liabilities Liabilities for collateral, beginning of year $ (158,111) $ (69,788) $ (59,067) Liabilities for collateral, end of year (76,393) (158,111) (69,788) Operating cash flow (used) provided $ (81,718) $ 88,323 $ 10,721 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Schedule of investments | The composition of the investment portfolio is presented as follows: As of December 31, ($ in thousands) 2020 2019 Fixed income securities, at fair value $ 4,918,874 $ 4,434,362 Mortgage loans, net 621,702 733,258 Equity securities, at fair value 251,437 274,133 Limited partnership interests 343,251 386,310 Short-term investments, at fair value 133,045 224,098 Policy loans 37,294 38,583 Other 8,097 5,237 Total $ 6,313,700 $ 6,095,981 |
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: ($ in thousands) Amortized cost, net Gross unrealized Fair value Gains Losses December 31, 2020 U.S. government and agencies $ 134,490 $ 10,415 $ — $ 144,905 Municipal 402,728 141,825 — 544,553 Corporate 3,685,510 471,999 (3,782) 4,153,727 Foreign government 67,435 4,652 — 72,087 MBS 3,329 273 — 3,602 Total fixed income securities $ 4,293,492 $ 629,164 $ (3,782) $ 4,918,874 December 31, 2019 U.S. government and agencies $ 43,280 $ 9,534 $ — $ 52,814 Municipal 433,038 119,242 — 552,280 Corporate 3,400,471 277,338 (2,564) 3,675,245 Foreign government 133,635 6,531 — 140,166 MBS 12,683 1,174 — 13,857 Total fixed income securities $ 4,023,107 $ 413,819 $ (2,564) $ 4,434,362 |
Schedule for fixed income securities based on contractual maturities | The scheduled maturities for fixed income securities are as follows: ($ in thousands) As of December 31, 2020 Amortized Fair Due in one year or less $ 236,261 $ 241,561 Due after one year through five years 1,259,325 1,348,880 Due after five years through ten years 1,686,785 1,900,883 Due after ten years 1,107,792 1,423,948 4,290,163 4,915,272 MBS 3,329 3,602 Total $ 4,293,492 $ 4,918,874 |
Schedule of net investment income | Net investment income for the years ended December 31 is as follows: ($ in thousands) 2020 2019 2018 Fixed income securities $ 188,432 $ 208,816 $ 214,039 Mortgage loans 34,510 32,566 30,920 Equity securities 3,267 4,283 5,565 Limited partnership interests 817 15,348 43,365 Short-term investments 1,600 4,393 2,966 Policy loans 2,272 2,343 2,339 Investment income, before expense 230,898 267,749 299,194 Investment expense (8,811) (11,743) (11,311) Net investment income $ 222,087 $ 256,006 $ 287,883 |
Schedule of realized capital gains and losses by asset type | Realized capital gains (losses) by asset type for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Fixed income securities $ (2,190) $ 1,389 $ (1,306) Mortgage loans (9,390) — 466 Equity securities 36,110 40,780 (16,364) Limited partnership interests 3,520 5,383 (3,895) Derivatives 100,412 59,087 638 Short-term investments (197) (12) (93) Realized capital gains (losses) $ 128,265 $ 106,627 $ (20,554) |
Schedule of realized capital gains and losses by transaction type | Realized capital gains (losses) by transaction type for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Sales $ (1,861) $ 4,698 $ (1,548) Credit losses (1) (10,388) (169) (285) Valuation of equity investments (2) 40,102 43,011 (19,359) Valuation and settlements of derivative instruments 100,412 59,087 638 Realized capital gains (losses) $ 128,265 $ 106,627 $ (20,554) ____________________ (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior period other-than-temporary impairment write-downs are now presented as credit losses. |
Schedule of valuation changes | Gross realized gains (losses) on sales of fixed income securities for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Gross realized gains $ 3,165 $ 4,863 $ 4,397 Gross realized losses (5,099) (3,305) (5,418) The following table presents the net pre-tax appreciation (decline) recognized in net income of equity securities and limited partnership interests carried at fair value that are still held as of December 31, 2020 and 2019, respectively. For the years ended December 31, ($ in thousands) 2020 2019 Equity securities $ 39,830 $ 29,558 Limited partnership interests carried at fair value 13,787 9,165 Total $ 53,617 $ 38,723 |
Schedule of other-than-temporary impairment losses by asset type | Credit losses recognized in net income (1) for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Fixed income securities: MBS $ (255) $ (169) $ (285) Total fixed income securities (255) (169) (285) Mortgage loans (9,691) — — Limited partnership interests (538) — — Total credit losses by asset type (10,484) (169) (285) Liabilities Commitments to fund commercial mortgage loans 97 — — Total $ (10,387) $ (169) $ (285) _______________ (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, realized capital losses previously reported as other-than-temporary impairment write-downs are now presented as credit losses. |
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 gains (losses) December 31, 2020 Gains Losses Fixed income securities $ 4,918,874 $ 629,164 $ (3,782) $ 625,382 Short-term investments 133,045 76 (1) 75 EMA limited partnerships (1) (350) Unrealized net capital gains and losses, pre-tax 625,107 Amounts recognized for: Insurance reserves (2) (321,591) DAC and DSI (3) (36,668) Amounts recognized (358,259) Deferred income taxes (56,038) Unrealized net capital gains and losses, after-tax $ 210,810 December 31, 2019 Fixed income securities $ 4,434,362 $ 413,819 $ (2,564) $ 411,255 Short-term investments 224,098 4 (17) (13) EMA limited partnerships (205) Unrealized net capital gains and losses, pre-tax 411,037 Amounts recognized for: Insurance reserves (231,357) DAC and DSI (21,820) Amounts recognized (253,177) Deferred income taxes (33,151) Unrealized net capital gains and losses, after-tax $ 124,709 ____________________ (1) Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. 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 annuity 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 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) 2020 2019 2018 Fixed income securities $ 214,127 $ 256,021 $ (212,483) Short-term investments 88 (9) 9 EMA limited partnerships (145) (155) (40) Total 214,070 255,857 (212,514) Amounts recognized for: Insurance reserves (90,234) (150,729) 141,714 DAC and DSI (14,848) (19,543) 6,780 Amounts recognized (105,082) (170,272) 148,494 Deferred income taxes (22,887) (17,973) 13,445 Increase (decrease) in unrealized net capital gains and losses, after-tax $ 86,101 $ 67,612 $ (50,575) 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) 2020 2019 Texas 23.9 % 19.9 % California 15.8 16.7 North Carolina 9.3 8.2 Utah 6.7 5.9 New Jersey 4.2 5.6 Nevada 2.9 5.8 Illinois 2.0 5.5 The types of properties collateralizing the mortgage loans as of December 31 are as follows: (% of mortgage loan portfolio carrying value) 2020 2019 Apartment complex 30.6 % 32.6 % Office buildings 28.4 27.4 Retail 16.6 15.6 Warehouse 13.2 16.5 Other 11.2 7.9 Total 100.0 % 100.0 % The contractual maturities of the mortgage loan portfolio as of December 31, 2020 are as follows: ($ in thousands) Number Amortized cost, net Percent 2021 6 $ 44,345 7.1 % 2022 8 46,326 7.5 2023 11 82,043 13.2 2024 12 97,143 15.6 Thereafter 46 351,845 56.6 Total 83 $ 621,702 100.0 % |
Carrying value for limited partnership interests | The carrying value for limited partnership interest as of December 31 is as follows: 2020 2019 ($ in thousands) EMA Fair Value Total EMA Fair Value Total Private equity $ 204,573 $ 107,500 $ 312,073 $ 251,154 $ 107,500 $ 358,654 Real estate 15,814 987 16,801 15,357 1,566 16,923 Other (1) 14,377 — 14,377 10,733 — 10,733 Total $ 234,764 $ 108,487 $ 343,251 $ 277,244 $ 109,066 $ 386,310 ____________ (1) Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities. |
Principal geographic distribution of municipal bond | 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) 2020 2019 California 35.2 % 33.3 % Oregon 11.6 10.6 Texas 10.9 10.8 Illinois 8.7 8.0 |
Schedule of allowance for credit loss | The Company’s allowance for credit losses is presented in the following table. ($ in millions) December 31, 2020 January 1, 2020 Mortgage loans $ 11,093 $ 6,129 Investments 11,093 6,129 Reinsurance recoverables 624 655 Other assets 4,130 4,259 Assets 15,847 11,043 Commitments to fund mortgage loans — 97 Liabilities — 97 Total $ 15,847 $ 11,140 Rollforward of credit loss allowance for fixed income securities for the year ended December 31, 2020 is as follows: ($ in thousands) 2020 Beginning balance $ — Credit losses on securities for which credit losses not previously reported (255) Reduction of allowance related to sales 255 Write-offs — Ending balance $ — |
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 securities by the length of time that individual securities have been in a continuous unrealized loss position. ($ in thousands) Less than 12 months 12 months or more Total unrealized losses Number Fair Unrealized losses Number Fair Unrealized losses December 31, 2020 Fixed income securities Corporate 46 $ 154,414 $ (2,984) 9 $ 15,133 $ (798) $ (3,782) MBS 1 — — — — — — Total fixed income securities 47 $ 154,414 $ (2,984) 9 $ 15,133 $ (798) $ (3,782) Investment grade fixed income securities 20 $ 111,172 $ (1,883) — $ — $ — $ (1,883) Below investment grade fixed income securities 27 43,242 (1,101) 9 15,133 (798) (1,899) Total fixed income securities 47 $ 154,414 $ (2,984) 9 $ 15,133 $ (798) $ (3,782) December 31, 2019 Fixed income securities 3 Corporate 44 104,484 (815) 17 31,900 (1,749) (2,564) MBS 2 38 — 2 1 — — Total fixed income securities 46 $ 104,522 $ (815) 19 $ 31,901 $ (1,749) $ (2,564) Investment grade fixed income securities 22 $ 82,142 $ (347) 3 $ 9,845 $ (130) $ (477) Below investment grade fixed income securities 24 22,380 (468) 16 22,056 (1,619) (2,087) Total fixed income securities 46 $ 104,522 $ (815) 19 $ 31,901 $ (1,749) $ (2,564) The following table summarizes gross unrealized losses by unrealized loss position and credit quality as of December 31, 2020. ($ in thousands) Investment Below investment grade Total Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2) $ (1,883) $ (1,635) $ (3,518) Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4) — (264) (264) Total unrealized losses $ (1,883) $ (1,899) $ (3,782) _______________ (1) Below investment grade fixed income securities include $1.1 million that have been in an unrealized loss position for less than twelve months. (2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses. (3) No below investment grade fixed income securities have been in an unrealized loss position for a period of twelve or more consecutive months. |
Summary of carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution | The following table reflects mortgage loans amortized cost by debt service coverage ratio distribution and year of origination as of December 31. ($ in thousands) 2020 2019 2015 and prior 2016 2017 2018 2019 Current Total Total Below 1.0 $ — $ — $ — $ — $ — $ — $ — $ — 1.0 - 1.25 31,451 — 16,187 5,000 14,078 13,800 80,516 48,780 1.26 - 1.50 79,681 6,290 27,786 12,009 52,456 — 178,222 221,384 Above 1.50 171,774 60,568 13,216 61,913 53,586 13,000 374,057 463,094 Amortized cost before allowance $ 282,906 $ 66,858 $ 57,189 $ 78,922 $ 120,120 $ 26,800 $ 632,795 $ 733,258 Allowance (1) (11,093) — Amortized cost, net $ 621,702 $ 733,258 _______________ |
Schedule of rollforward of the valuation allowance on impaired mortgage loans | The rollforward of credit loss allowance for mortgage loans for the years ended December 31 is as follows: ($ in thousands) 2020 Beginning balance $ — Cumulative effect of change in accounting principle (6,129) Net increases related to credit losses (9,691) Reduction of allowance related to sales 4,727 Write-offs — Ending balance $ (11,093) |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of quantitative information about the significant unobservable inputs used in Level 3 fair value measurements | The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2020. ($ in thousands) Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 102,167 $ 42,738 $ — $ 144,905 Municipal — 528,272 16,281 544,553 Corporate - public — 3,122,120 5,560 3,127,680 Corporate - privately placed — 1,021,072 4,975 1,026,047 Foreign government — 72,087 — 72,087 MBS — 3,602 — 3,602 Total fixed income securities 102,167 4,789,891 26,816 4,918,874 Equity securities 243,076 590 7,771 251,437 Short-term investments 112,293 20,752 — 133,045 Other investments: Free-standing derivatives — 8,451 23 $ (377) 8,097 Separate account assets 286,751 — — 286,751 Other assets — — 313,900 313,900 Total recurring basis assets $ 744,287 $ 4,819,684 $ 348,510 $ (377) $ 5,912,104 % of total assets at fair value 12.6 % 81.5 % 5.9 % — % 100.0 % Investments reported at NAV 108,487 Total $ 6,020,591 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (20,193) $ (20,193) Other liabilities: Free-standing derivatives — (5,808) — $ 287 (5,521) Total recurring basis liabilities $ — $ (5,808) $ (20,193) $ 287 $ (25,714) % of total liabilities at fair value — % 22.6 % 78.5 % (1.1) % 100.0 % The following table summarizes the Company’s assets and liabilities measured at fair value as of December 31, 2019. ($ in thousands) Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 2,250 $ 50,564 $ — $ 52,814 Municipal — 530,584 21,696 552,280 Corporate - public — 2,688,680 5,221 2,693,901 Corporate - privately placed — 962,072 19,272 981,344 Foreign government — 140,166 — 140,166 MBS — 13,857 — 13,857 Total fixed income securities 2,250 4,385,923 46,189 4,434,362 Equity securities 265,195 858 8,080 274,133 Short-term investments 124,763 99,335 — 224,098 Other investments: Free-standing derivatives — 6,008 75 $ (846) 5,237 Separate account assets 265,546 — — 265,546 Other assets — — 231,491 231,491 Total recurring basis assets $ 657,754 $ 4,492,124 $ 285,835 $ (846) $ 5,434,867 % of total assets at fair value 12.1 % 82.6 % 5.3 % — % 100.0 % Investments reported at NAV 109,066 Total $ 5,543,933 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (16,653) $ (16,653) Other liabilities: Free-standing derivatives — (2,920) — $ 15 (2,905) Total recurring basis liabilities $ — $ (2,920) $ (16,653) $ 15 $ (19,558) % of total liabilities at fair value — % 15.0 % 85.1 % (0.1) % 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 Unobservable Range Weighted December 31, 2020 Other assets – Structured settlement annuity reinsurance agreement $ 313,900 Stochastic cash flow model Ultimate reinvestment spreads 119.0 - 226.0 basis points 170.3 basis points Derivatives embedded in life contracts – equity-indexed and forward starting options $ (19,478) Stochastic cash flow model Projected option cost 3.9 - 4.2% 4.01% December 31, 2019 Other assets – Structured settlement annuity reinsurance agreement $ 231,491 Stochastic cash flow model Ultimate reinvestment spreads 129.8 - 203.6 basis points 165.7 basis points Derivatives embedded in life contracts - equity indexed and forward starting options $ (14,239) Stochastic cash flow model Projected option cost 3.9 - 4.2% 4.00% |
Schedule of rollforward of Level 3 assets and liabilities held at fair value on a recurring basis | The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2020. ($ in thousands) Total gains (losses) Balance as of December 31, 2019 Net OCI Transfers Transfers Purchases Sales Issues Settlements Balance as of December 31, 2020 Assets Fixed income securities: Municipal $ 21,696 $ (30) $ 87 $ 6,013 $ (10,619) $ — $ (866) $ — $ — $ 16,281 Corporate - public 5,221 1 338 — — — — — — 5,560 Corporate - privately placed 19,272 11 (168) 2,141 (11,130) — (4,685) — (466) 4,975 Total fixed income securities 46,189 (18) 257 8,154 (21,749) — (5,551) — (466) 26,816 Equity securities 8,080 (310) — — — 1 — — — 7,771 Free-standing derivatives, net 75 (38) — — — 25 — — (39) 23 (1) Other assets 231,491 82,409 — — — — — — — 313,900 Total recurring Level 3 assets $ 285,835 $ 82,043 $ 257 $ 8,154 $ (21,749) $ 26 $ (5,551) $ — $ (505) $ 348,510 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (16,653) $ (1,822) $ — $ — $ — $ — $ — $ (2,763) $ 1,045 $ (20,193) Total recurring Level 3 liabilities $ (16,653) $ (1,822) $ — $ — $ — $ — $ — $ (2,763) $ 1,045 $ (20,193) ____________________ (1) Comprises $23 thousand of assets. The following table presents the total Level 3 gains (losses) included in net income for the year ended December 31, 2020. ($ in thousands) Net investment income Realized capital gains and losses Contract benefits Interest credited to contractholder funds Total Components of net income $ (1,467) $ 83,510 $ 1,699 $ (3,521) $ 80,221 The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2019. ($ in thousands) Total gains (losses) Balance as of December 31, 2018 Net OCI Transfers Transfers Purchases Sales Issues Settlements Balance as of December 31, 2019 Assets Fixed income securities: Municipal $ 20,821 $ — $ 1,695 $ — $ — $ — $ (820) $ — $ — $ 21,696 Corporate - public 6,761 1 542 — (2,083) — — — — 5,221 Corporate - privately placed 11,190 6 422 13,987 — — — — (6,333) 19,272 Total fixed income securities 38,772 7 2,659 13,987 (2,083) — (820) — (6,333) 46,189 Equity securities 12,162 2,653 — — (16) 210 (6,768) — (161) 8,080 Free-standing derivatives, net 394 (200) — — — 18 — — (137) 75 (1) Other assets 169,386 62,105 — — — — — — — 231,491 Total recurring Level 3 assets $ 220,714 $ 64,565 $ 2,659 $ 13,987 $ (2,099) $ 228 $ (7,588) $ — $ (6,631) $ 285,835 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (3,801) $ (1,664) $ — $ (10,128) $ — $ — $ — $ (1,283) $ 223 $ (16,653) Total recurring Level 3 liabilities $ (3,801) $ (1,664) $ — $ (10,128) $ — $ — $ — $ (1,283) $ 223 $ (16,653) ____________________ (1) Comprises $75 thousand of assets. The following table presents the total Level 3 gains (losses) included in net income for the year ended December 31, 2019. ($ in thousands) Net investment income Realized capital gains and losses Contract benefits Interest credited to contractholder funds Total Components of net income $ (535) $ 65,100 $ 987 $ (2,651) $ 62,901 The following table presents the rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018. ($ in thousands) Total gains (losses) Balance as of December 31, 2017 Net OCI Transfers Transfers Purchases Sales Issues Settlements Balance as of December 31, 2018 Assets Fixed income securities: Municipal $ 21,178 $ — $ (357) $ — $ — $ — $ — $ — $ — $ 20,821 Corporate - public 7,312 1 (383) — — — — — (169) 6,761 Corporate - privately placed 55,979 4 (639) — (22,957) — — — (21,197) 11,190 ABS 15,205 — (205) — — — — — (15,000) — Total fixed income securities 99,674 5 (1,584) — (22,957) — — — (36,366) 38,772 Equity securities 7,159 2,600 (5) — — 3,723 (1,315) — — 12,162 Free-standing derivatives, net 336 65 — — — 66 — — (73) 394 (1) Other assets 166,290 3,096 — — — — — — — 169,386 Total recurring Level 3 assets $ 273,459 $ 5,766 $ (1,589) $ — $ (22,957) $ 3,789 $ (1,315) $ — $ (36,439) $ 220,714 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (4,796) $ 995 $ — $ — $ — $ — $ — $ — $ — $ (3,801) Total recurring Level 3 liabilities $ (4,796) $ 995 $ — $ — $ — $ — $ — $ — $ — $ (3,801) ____________________ (1) Comprises $394 thousand of assets. The following table presents the total Level 3 gains (losses) included in net income for the year ended December 31, 2018. ($ in thousands) Net investment income Realized capital gains and losses Contract benefits Interest credited to contractholder funds Total Components of net income $ 3 $ 5,763 $ (326) $ 1,321 $ 6,761 |
Schedule of change in unrealized gains and losses included in net income for Level 3 assets and liabilities held | The table below provides valuation changes included in net income and OCI for Level 3 assets and liabilities held as of December 31. ($ in thousands) 2020 2019 2018 Assets Fixed income securities: Municipal $ (30) $ — $ — Corporate - public 1 1 1 Corporate - privately placed 2 2 2 Total fixed income securities (27) 3 3 Free-standing derivatives, net (38) (200) 65 Equity securities (310) 82 2,594 Other assets 82,409 62,105 3,096 Total recurring Level 3 assets $ 82,034 $ 61,990 $ 5,758 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (1,822) $ (1,664) $ 995 Total recurring Level 3 liabilities $ (1,822) $ (1,664) $ 995 Total included in net income $ 80,212 $ 60,326 $ 6,753 Components of net income Net investment income $ (1,467) $ (535) $ 3 Realized capital gains (losses) 83,501 62,525 5,755 Contract benefits 1,699 987 (326) Interest credited to contractholder funds (3,521) (2,651) 1,321 Total included in net income $ 80,212 $ 60,326 $ 6,753 Assets Municipal $ 87 Corporate - public 338 Corporate - privately placed 27 Changes in unrealized net capital gains and losses reported in OCI (1) $ 452 ___________________ (1) Effective January 1, 2020, the Company adopted the fair value accounting standard that prospectively requires the disclosure of valuation changes reported in OCI. |
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. ($ in thousands) December 31, 2020 December 31, 2019 Financial assets Fair value level Amortized cost, net Fair Amortized cost, net Fair Mortgage loans Level 3 $ 621,702 $ 660,862 $ 733,258 $ 764,201 Financial liabilities Fair value level Carrying value (1) Fair Carrying value (1) Fair Contractholder funds on investment contracts Level 3 $ 1,504,295 $ 1,735,933 $ 1,605,574 $ 1,730,341 Liability for collateral Level 2 76,393 76,393 158,111 158,111 ___________________ |
Derivative Financial Instrume_2
Derivative Financial Instruments and Off-balance sheet Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of volume and fair value positions of derivative instruments and reporting location in the condensed consolidated 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, 2020. None of these derivatives are designated as accounting hedging instruments. ($ in thousands, except number of contracts) Volume (1) Balance sheet location Notional Number Fair Gross Gross Asset derivatives Interest rate contracts Interest rate cap agreements Other investments $ 13,100 n/a $ 23 $ 23 $ — Equity and index contracts Options Other investments n/a 132 8,000 8,000 $ — Foreign currency contracts Foreign currency forwards Other investments 3,513 n/a (200) 17 (217) Other contracts Structured settlement annuity reinsurance agreement Other assets n/a 1 313,900 313,900 — Total asset derivatives $ 16,613 133 $ 321,723 $ 321,940 $ (217) Liability derivatives Equity and index contracts Options Other liabilities & accrued expenses n/a 132 $ (5,411) $ — $ (5,411) Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 11,071 n/a 250 430 (180) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 18,322 n/a (423) — (423) Guaranteed withdrawal benefits Contractholder funds 14,146 n/a (292) — (292) Equity-indexed options in life product contracts Contractholder funds 52,340 n/a (19,478) — (19,478) Total liability derivatives 95,879 132 (25,354) $ 430 $ (25,784) Total derivatives $ 112,492 265 $ 296,369 _________________ (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, 2019. None of these derivatives are designated as accounting hedging instruments. ($ in thousands, except number of contracts) Volume Balance sheet location Notional Number Fair Gross Gross Asset derivatives Equity and index contracts Options Other investments n/a 140 $ 5,232 $ 5,232 — Other contracts Structured settlement annuity reinsurance agreement Other assets n/a — 231,491 231,491 — Total asset derivatives 140 $ 236,723 $ 236,723 $ — Liability derivatives Interest rate contracts Interest rate cap agreements Other liabilities & accrued expenses $ 13,400 n/a $ 75 $ 75 $ — Equity and index contracts Options Other liabilities & accrued expenses n/a 139 (2,832) — (2,832) Futures Other liabilities & accrued expenses n/a 1 — — — Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 17,984 n/a 683 771 (88) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 23,629 n/a (1,987) — (1,987) Guaranteed withdrawal benefits Contractholder funds 15,369 n/a (427) — (427) Equity-indexed options in life product contracts Contractholder funds 43,855 n/a (14,239) — (14,239) Total liability derivatives 114,237 140 (18,727) $ 846 $ (19,573) Total derivatives $ 114,237 280 $ 217,996 |
Schedule of gross and net amounts about 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. ($ in thousands) Offsets Gross Counter- Cash Net Securities Net December 31, 2020 Asset derivatives $ 470 $ (647) $ 270 $ 93 $ — $ 93 Liability derivatives (397) 647 (360) (110) — (110) December 31, 2019 Asset derivatives $ 846 $ (846) $ — $ — $ — $ — Liability derivatives (88) 846 (831) (73) — (73) |
Schedule of gains and losses from valuation, settlements, and hedge ineffectiveness, fair value hedges and 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 capital gains and losses Contract Interest credited to contractholder funds Total gain (loss) recognized in net income on derivatives 2020 Interest rate contracts $ (37) $ — $ — $ (37) Equity and index contracts (1) — 845 844 Embedded derivative financial instruments — 1,699 (5,239) (3,540) Foreign currency contracts (304) — — (304) Other contracts - structured settlement annuity reinsurance agreement 100,754 — — 100,754 Total $ 100,412 $ 1,699 $ (4,394) $ 97,717 2019 Interest rate contracts $ (200) $ — $ — $ (200) Equity and index contracts 1 — 1,987 1,988 Embedded derivative financial instruments — 987 (3,711) (2,724) Foreign currency contracts 364 — — 364 Other contracts - structured settlement annuity reinsurance agreement 58,922 — — 58,922 Total $ 59,087 $ 987 $ (1,724) $ 58,350 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 |
Summary of counterparty credit exposure by counterparty credit rating | The following table summarizes the counterparty credit exposure as of December 31 by counterparty credit rating as it relates to the Company’s OTC derivatives. ($ in thousands) 2020 2019 Rating (1) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) A+ 1 $ 8,341 $ 349 $ — 2 $ 30,670 $ 770 $ — _________________ (1) Allstate uses the lower of S&P’s 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 derivative instruments with credit features in a liability position, including fair value of assets and collateral netted against the liability | The following summarizes the fair value of derivative instruments with credit-risk-contingent features that are in a gross liability position as of December 31, as well as the fair value of assets and collateral that are netted against the liability in accordance with provisions within legally enforceable MNAs. ($ in thousands) 2020 2019 Gross liability fair value of contracts containing credit-risk-contingent features $ 101 $ 83 Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs (2) (70) Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently $ 99 $ 13 |
Schedule of contractual amounts of off-balance-sheet financial instruments | The contractual amounts of off-balance sheet financial instruments as of December 31 are as follows: ($ in thousands) 2020 2019 Commitments to invest in limited partnership interests $ 98,858 $ 127,515 Commitments to extend mortgage loans — 13,000 Private placement commitments 21 15,000 |
Reserve for Life-Contingent C_2
Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | |
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) 2020 2019 Immediate fixed annuities: Structured settlement annuities $ 2,347,415 $ 2,051,363 Other immediate fixed annuities 58,832 61,039 Traditional life insurance 273,067 265,971 Accident and health insurance 18,218 32,261 Other 851 1,175 Total reserve for life-contingent contract benefits $ 2,698,383 $ 2,411,809 |
Summary of key assumptions generally used in calculating the 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 Actual company experience with projected calendar year improvements 6.0% Present value of contractually specified future benefits and expenses Other immediate fixed annuities Actual company experience with projected calendar year improvements 6.0% Present value of expected future benefits and expenses 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 1.4% 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) 2020 2019 Interest-sensitive life insurance $ 773,531 $ 756,995 Investment contracts: Fixed annuities 1,639,591 1,741,488 Other investment contracts 51,648 49,485 Total contractholder funds $ 2,464,770 $ 2,547,968 |
Schedule of key contract provisions relating 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 8.3% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.0% 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 0.6% to 7.0% 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 12.2% of fixed annuities are subject to market value adjustment for discretionary withdrawals Other investment contracts: Guaranteed minimum income, accumulation and withdrawal benefits on variable annuities (1) and secondary guarantees on interest-sensitive life insurance and fixed annuities Interest rates used in establishing reserves range from 1.7% to 10.3% Withdrawal and surrender charges are based on the terms of the related variable annuity or interest-sensitive life 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) 2020 2019 2018 Balance, beginning of year $ 2,547,968 $ 2,681,300 $ 2,874,884 Deposits 104,355 104,850 107,606 Interest credited 83,769 86,338 91,430 Benefits (102,483) (104,681) (114,006) Surrenders and partial withdrawals (100,697) (152,898) (190,873) Contract charges (76,801) (75,879) (75,483) Net transfers (to) from separate accounts (84) 88 256 Other adjustments 8,743 8,850 (12,514) Balance, end of year $ 2,464,770 $ 2,547,968 $ 2,681,300 |
Schedule of variable annuity contracts with guarantees | The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. ($ in thousands) As of December 31, 2020 2019 In the event of death Separate account value $ 260,159 $ 243,833 Net amount at risk (1) $ 4,081 $ 4,392 Average attained age of contractholders 71 years 68 years At annuitization (includes income benefit guarantees) Separate account value $ 21,409 $ 18,849 Net amount at risk (2) $ 1,674 $ 1,750 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 13,999 $ 15,173 Net amount at risk (3) $ 234 $ 421 Accumulation at specified dates Separate account value $ 18,285 $ 24,033 Net amount at risk (4) $ 117 $ 224 Weighted average waiting period until guarantee date 2 years 3 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 . |
Schedule of liabilities for guarantees | The following table summarizes the liabilities for guarantees. ($ in thousands) Liability for guarantees related to death benefits and interest-sensitive life products Liability for guarantees related to income benefits Liability for guarantees related to accumulation and withdrawal benefits Total Balance, December 31, 2019 $ 34,135 $ 336 $ 2,414 $ 36,885 Less reinsurance recoverables 1,189 333 2,414 3,936 Net balance as of December 31, 2019 32,946 3 — 32,949 Incurred guarantee benefits 6,041 — — 6,041 Paid guarantee benefits (745) — — (745) Net change 5,296 — — 5,296 Net balance as of December 31, 2020 38,242 3 — 38,245 Plus reinsurance recoverables 877 267 715 1,859 Balance, December 31, 2020 $ 39,119 $ 270 $ 715 $ 40,104 Balance, December 31, 2018 $ 30,674 $ 572 $ 3,401 $ 34,647 Less reinsurance recoverables 1,752 568 3,401 5,721 Net balance as of December 31, 2018 28,922 4 — 28,926 Incurred guarantee benefits 4,412 (1) — 4,411 Paid guarantee benefits (388) — — (388) Net change 4,024 (1) — 4,023 Net balance as of December 31, 2019 32,946 3 — 32,949 Plus reinsurance recoverables 1,189 333 2,414 3,936 Balance, December 31, 2019 $ 34,135 $ 336 $ 2,414 $ 36,885 |
Reserves included in total liability balance for guarantees | The following table summarizes reserves included in total liability balance for guarantees by type of benefit as of December 31. ($ in thousands) 2020 2019 2018 Variable annuity Death benefits $ 851 $ 1,174 $ 1,752 Income benefits 267 333 568 Accumulation benefits 423 1,987 3,003 Withdrawal benefits 292 427 398 Other guarantees 38,271 32,964 28,926 Total $ 40,104 $ 36,885 $ 34,647 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Schedule of reinsurance premium ceded | The amounts ceded to Prudential for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Premiums and contract charges $ 4,750 $ 4,797 $ 5,189 Contract benefits (1,524) (890) 1,459 Interest credited to contractholder funds 4,503 4,307 4,533 Operating costs and expenses 712 867 868 |
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) 2020 2019 2018 Direct $ 174,812 $ 203,614 $ 199,289 Assumed - non-affiliate 588 697 685 Ceded Affiliate (2,308) (2,186) (1,972) Non-affiliate (15,674) (16,359) (17,361) Premiums and contract charges, net of reinsurance $ 157,418 $ 185,766 $ 180,641 |
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) 2020 2019 2018 Direct $ 445,983 $ 272,200 $ 248,008 Assumed - non-affiliate 324 500 586 Ceded Affiliate (945) (2,354) (55) Non-affiliate (10,721) (11,333) (10,961) Contract benefits, net of reinsurance $ 434,641 $ 259,013 $ 237,578 |
Schedule of effects 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) 2020 2019 2018 Direct $ 88,814 $ 90,758 $ 96,002 Assumed - non-affiliate 13 13 13 Ceded - non-affiliate (4,503) (4,307) (4,533) Interest credited to contractholder funds, net of reinsurance $ 84,324 $ 86,464 $ 91,482 |
Schedule of rollforward of credit loss allowance for reinsurance recoverables | The following table shows the rollforward of the credit loss allowance for reinsurance recoverables for the year ended December 31. ($ in thousands) 2020 Beginning balance $ (34) Cumulative effect of change in accounting principle (621) Decrease in the provision for credit losses 31 Write-offs — Ending Balance $ (624) |
Deferred Policy Acquisition a_2
Deferred Policy Acquisition and Sales Inducement Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition and Sales Inducement Costs | |
Schedule of deferred policy acquisition costs | Deferred policy acquisition costs for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Balance, beginning of year $ 124,118 $ 155,887 $ 146,333 Acquisition costs deferred 11,175 16,771 19,577 Amortization charged to income (20,346) (30,396) (16,299) Effect of unrealized gains and losses (13,735) (18,144) 6,276 Balance, end of year $ 101,212 $ 124,118 $ 155,887 |
Schedule of DSI activity for Allstate Financial | DSI activity, which primarily relates to interest-sensitive life contracts, for the years ended December 31 was as follows: ($ in thousands) 2020 2019 2018 Balance, beginning of year $ 1,776 $ 2,391 $ 2,278 Sales inducements deferred 64 125 128 Amortization charged to income (619) (251) (181) Effect of unrealized gains and losses 549 (489) 166 Balance, end of year $ 1,770 $ 1,776 $ 2,391 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Components of the deferred income tax assets and liabilities | The Company had no liability for unrecognized tax benefits as of December 31, 2020, 2019 or 2018, and believes that the unrecognized tax benefits balance will not materially increase within the next twelve months. The components of the deferred income tax assets and liabilities as of December 31 are as follows: ($ in thousands) 2020 2019 Deferred tax assets Accrued liabilities $ 25 $ 25 Unrealized foreign currency translation adjustments on limited partnerships — 317 Other assets 148 20 Total deferred tax assets 173 362 Deferred tax liabilities Investments (96,249) (78,081) Unrealized net capital gains (56,038) (33,151) DAC (11,521) (14,447) Life and annuity reserves (2,483) (29,048) Unrealized foreign currency translation adjustments on limited partnerships (180) — Other liabilities (583) (484) Total deferred tax liabilities (167,054) (155,211) Net deferred tax liability $ (166,881) $ (154,849) |
Components of income tax expense | The components of income tax (benefit) expense for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Current $ (2,078) $ 36,766 $ 11,257 Deferred (9,915) (5,840) 1,570 Total income tax (benefit) expense $ (11,993) $ 30,926 $ 12,827 |
Reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations | 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: 2020 2019 2018 Statutory federal income tax rate - (benefit) expense (21.0) % 21.0 % 21.0 % State income taxes 3.7 1.8 5.4 Adjustments to prior year tax liabilities (1.1) 1.4 (0.1) Tax Legislation benefit — — (3.9) Other (0.4) (0.1) (0.3) Effective income tax rate - (benefit) expense (18.8) % 24.1 % 22.1 % |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of components of other comprehensive (loss) income on a pre-tax and after-tax basis | The components of other comprehensive income (loss) on a pre-tax and after-tax basis for the years ended December 31 are as follows: ($ in thousands) 2020 2019 2018 Pre- Tax After- Pre- Tax After- Pre- Tax After- Unrealized net holding gains and losses arising during the period, net of related offsets $ 106,690 $ (22,404) $ 84,286 $ 86,980 $ (18,266) $ 68,714 $ (65,379) $ 13,730 $ (51,649) Less: reclassification adjustment of realized capital gains and losses (2,298) 483 (1,815) 1,395 (293) 1,102 (1,359) 285 (1,074) Unrealized net capital gains and losses 108,988 (22,887) 86,101 85,585 (17,973) 67,612 (64,020) 13,445 (50,575) Unrealized foreign currency translation adjustments 1,923 (404) 1,519 (3,963) 832 (3,131) 124 (26) 98 Other comprehensive income (loss) $ 110,911 $ (23,291) $ 87,620 $ 81,622 $ (17,141) $ 64,481 $ (63,896) $ 13,419 $ (50,477) |
General (Details)
General (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Premiums and contract charges by product | |||
Premiums | $ 79,942 | $ 108,452 | $ 103,447 |
Contract charges | 77,476 | 77,314 | 77,194 |
Total premiums and contract charges | 157,418 | 185,766 | 180,641 |
Traditional life insurance | |||
Premiums and contract charges by product | |||
Premiums | 62,575 | 61,980 | 59,185 |
Accident and health insurance | |||
Premiums and contract charges by product | |||
Premiums | 17,367 | 46,472 | 44,262 |
Interest-sensitive life insurance | |||
Premiums and contract charges by product | |||
Contract charges | 77,557 | 77,324 | 76,931 |
Fixed annuities | |||
Premiums and contract charges by product | |||
Contract charges | $ (81) | $ (10) | $ 263 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Securities loaned | ||||
Cash collateral received as percentage of fair value of securities loaned (in percent) | 102.00% | |||
Cash collateral received for securities loaned percentage foreign (in percent) | 105.00% | |||
Deferred policy acquisition and sales inducement costs | ||||
Allowance for credit loss | $ 15,847 | |||
Cumulative effect of change in accounting principle | $ 621 | |||
Adjustments for New Accounting Pronouncement | ||||
Deferred policy acquisition and sales inducement costs | ||||
Allowance for credit loss | $ 11,140 | |||
Minimum | ||||
Deferred policy acquisition and sales inducement costs | ||||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts (in years) | 15 years | |||
Maximum | ||||
Securities loaned | ||||
Length of securities lending transaction period (in days) | 30 days | |||
Deferred policy acquisition and sales inducement costs | ||||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts (in years) | 30 years | |||
Interest-sensitive life insurance | Minimum | ||||
Deferred policy acquisition and sales inducement costs | ||||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts (in years) | 10 years | |||
Interest-sensitive life insurance | Maximum | ||||
Deferred policy acquisition and sales inducement costs | ||||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts (in years) | 20 years | |||
Private equity/debt funds, real estate funds and tax credit funds | ||||
Deferred policy acquisition and sales inducement costs | ||||
Period over which recognition of income on funds is delayed (in month) | 3 months | |||
Retained income | Adjustments for New Accounting Pronouncement | ||||
Deferred policy acquisition and sales inducement costs | ||||
Cumulative effect of change in accounting principle | $ (5,409) | $ 39,990 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Allowance for credit losses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments | $ 11,093 | $ 6,129 | |
Reinsurance recoverables | 624 | 655 | $ 34 |
Other assets | 4,130 | 4,259 | |
Assets | 15,847 | 11,043 | |
Commitments to fund mortgage loans | 0 | 97 | |
Liabilities | 0 | 97 | |
Total | 15,847 | ||
Adjustments for New Accounting Pronouncement | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total | 11,140 | ||
Mortgage loans | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Mortgage loans | $ 11,093 | $ 6,129 | $ 0 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |||
Transfer from investments | $ 412 | $ 8,000 | $ 8,200 |
Liabilities for collateral received | $ 76,400 | $ 158,100 | $ 69,800 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Activities resulting from management of proceeds (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net change in proceeds managed | |||
Net change in short-term investments | $ 81,718 | $ (88,323) | $ (10,721) |
Operating cash flow provided (used) | 81,718 | (88,323) | (10,721) |
Change in Liabilities for Collateral [Roll Forward] | |||
Liabilities for collateral, beginning of year | (158,111) | (69,788) | (59,067) |
Liabilities for collateral, end of year | (76,393) | (158,111) | (69,788) |
Operating cash flow (used) provided | $ (81,718) | $ 88,323 | $ 10,721 |
Related Party Transactions - Na
Related Party Transactions - Narrative and Other (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions | |||
Allocation of operating expenses | $ 38,000,000 | $ 45,000,000 | $ 46,200,000 |
Reserve for life-contingent contract benefits | 2,698,383,000 | 2,411,809,000 | |
Commission and other distribution expense | 380,000 | 317,000 | 215,000 |
Marketing and advertising expense | 9,000 | 3,000 | 5,000 |
Ceded premiums earned | 10,004,000 | 10,600,000 | 11,054,000 |
Carrying value of structured settlement reinsurance treaty | 313,900,000 | 231,500,000 | |
Investments | 6,313,700,000 | 6,095,981,000 | |
Allstate Insurance Company | |||
Related Party Transactions | |||
Reserve for life-contingent contract benefits | 1,580,000,000 | 1,420,000,000 | |
Allstate Life Insurance Company | |||
Related Party Transactions | |||
Reserve for life-contingent contract benefits | 557,200,000 | 559,500,000 | |
Ceded premiums earned | 3,300,000 | 4,200,000 | 3,400,000 |
Proceeds from related party, structured settlement | 21,700,000 | 1,000,000 | $ 0 |
Investments | 1,560,000,000 | 1,450,000,000 | |
Intercompany loan agreement | |||
Related Party Transactions | |||
Amount available for borrowings under the agreement | 1,000,000,000 | ||
Amount of loan outstanding under agreement | $ 0 | $ 0 |
Investments - Portfolio composi
Investments - Portfolio composition (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments [Abstract] | ||
Fixed income securities, at fair value | $ 4,918,874 | $ 4,434,362 |
Mortgage loans, net | 621,702 | 733,258 |
Equity securities, at fair value | 251,437 | 274,133 |
Limited partnership interests | 343,251 | 386,310 |
Short-term investments, at fair value | 133,045 | 224,098 |
Policy loans | 37,294 | 38,583 |
Other | 8,097 | 5,237 |
Total | $ 6,313,700 | $ 6,095,981 |
Investments - Fair Values (Deta
Investments - Fair Values (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, net | $ 4,293,492 | $ 4,023,107 |
Gross unrealized, gains | 629,164 | 413,819 |
Gross unrealized, losses | (3,782) | (2,564) |
Fair value | 4,918,874 | 4,434,362 |
U.S. government and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, net | 134,490 | 43,280 |
Gross unrealized, gains | 10,415 | 9,534 |
Gross unrealized, losses | 0 | 0 |
Fair value | 144,905 | 52,814 |
Municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, net | 402,728 | 433,038 |
Gross unrealized, gains | 141,825 | 119,242 |
Gross unrealized, losses | 0 | 0 |
Fair value | 544,553 | 552,280 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, net | 3,685,510 | 3,400,471 |
Gross unrealized, gains | 471,999 | 277,338 |
Gross unrealized, losses | (3,782) | (2,564) |
Fair value | 4,153,727 | 3,675,245 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, net | 67,435 | 133,635 |
Gross unrealized, gains | 4,652 | 6,531 |
Gross unrealized, losses | 0 | 0 |
Fair value | 72,087 | 140,166 |
MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, net | 3,329 | 12,683 |
Gross unrealized, gains | 273 | 1,174 |
Gross unrealized, losses | 0 | 0 |
Fair value | $ 3,602 | $ 13,857 |
Investments - Scheduled maturit
Investments - Scheduled maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Amortized cost, net | ||
Due in one year or less | $ 236,261 | |
Due after one year through five years | 1,259,325 | |
Due after five years through ten years | 1,686,785 | |
Due after ten years | 1,107,792 | |
Subtotal | 4,290,163 | |
MBS | 3,329 | |
Amortized cost, net | 4,293,492 | $ 4,023,107 |
Fair value | ||
Due in one year or less | 241,561 | |
Due after one year through five years | 1,348,880 | |
Due after five years through ten years | 1,900,883 | |
Due after ten years | 1,423,948 | |
Subtotal | 4,915,272 | |
MBS | 3,602 | |
Total | $ 4,918,874 | $ 4,434,362 |
Investments - Net investment in
Investments - Net investment income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net investment income | |||
Investment income, before expense | $ 230,898 | $ 267,749 | $ 299,194 |
Investment expense | (8,811) | (11,743) | (11,311) |
Net investment income | 222,087 | 256,006 | 287,883 |
Fixed income securities | |||
Net investment income | |||
Investment income, before expense | 188,432 | 208,816 | 214,039 |
Mortgage loans | |||
Net investment income | |||
Investment income, before expense | 34,510 | 32,566 | 30,920 |
Equity securities | |||
Net investment income | |||
Investment income, before expense | 3,267 | 4,283 | 5,565 |
Limited partnership interests | |||
Net investment income | |||
Investment income, before expense | 817 | 15,348 | 43,365 |
Short-term investments | |||
Net investment income | |||
Investment income, before expense | 1,600 | 4,393 | 2,966 |
Policy loans | |||
Net investment income | |||
Investment income, before expense | $ 2,272 | $ 2,343 | $ 2,339 |
Investments - Realized capital
Investments - Realized capital gains and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Realized capital gains and losses by asset type | ||||
Sales | $ (1,861) | $ 4,698 | $ (1,548) | |
Credit losses | (10,388) | (169) | (285) | |
Valuation of equity investments | 40,102 | 43,011 | (19,359) | |
Valuation and settlements of derivative instruments | 100,412 | 59,087 | 638 | |
Realized capital gains (losses) | $ 238 | 128,265 | 106,627 | (20,554) |
Fixed income securities | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | (2,190) | 1,389 | (1,306) | |
Mortgage loans | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | (9,390) | 0 | 466 | |
Equity securities | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 36,110 | 40,780 | (16,364) | |
Limited partnership interests | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 3,520 | 5,383 | (3,895) | |
Derivatives | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 100,412 | 59,087 | 638 | |
Short-term investments | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | $ (197) | $ (12) | $ (93) |
Investments - Schedule of gain
Investments - Schedule of gain (loss) on investments by transaction type (Details) - Fixed income securities - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | |||
Gross realized gains | $ 3,165 | $ 4,863 | $ 4,397 |
Gross realized losses | $ (5,099) | $ (3,305) | $ (5,418) |
Investments - Valuation changes
Investments - Valuation changes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Investments | ||
Total | $ 53,617 | $ 38,723 |
Equity securities | ||
Investments | ||
Total | 39,830 | 29,558 |
Limited partnership interests | ||
Investments | ||
Total | $ 13,787 | $ 9,165 |
Investments - Other-than-tempor
Investments - Other-than-temporary impairment losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other-than-temporary impairment losses by asset type | |||
Fixed income securities: | $ (10,387) | $ (169) | $ (285) |
Total credit losses by asset type | (10,484) | (169) | (285) |
Commitments to fund commercial mortgage loans | 97 | 0 | 0 |
MBS | |||
Other-than-temporary impairment losses by asset type | |||
Fixed income securities: | (255) | (169) | (285) |
Fixed income securities | |||
Other-than-temporary impairment losses by asset type | |||
Fixed income securities: | (255) | (169) | (285) |
Mortgage loans | |||
Other-than-temporary impairment losses by asset type | |||
Mortgage loans | (9,691) | 0 | 0 |
Limited partnership interests | |||
Other-than-temporary impairment losses by asset type | |||
Limited partnership interests | $ (538) | $ 0 | $ 0 |
Investments - Unrealized net ca
Investments - Unrealized net capital gains and losses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value | ||
Fixed income securities, at fair value | $ 4,918,874 | $ 4,434,362 |
Short-term investments, at fair value | 133,045 | 224,098 |
Gross unrealized Gains | ||
Fixed income securities | 629,164 | 413,819 |
Short-term investments | 76 | 4 |
Gross unrealized Losses | ||
Fixed income securities | (3,782) | (2,564) |
Short-term investments | (1) | (17) |
Unrealized net gains (losses) | ||
Fixed income securities | 625,382 | 411,255 |
Short-term investments | 75 | (13) |
EMA limited partnerships | (350) | (205) |
Unrealized net capital gains and losses, pre-tax | 625,107 | 411,037 |
Amounts recognized for: | ||
Amounts recognized for: | (321,591) | (231,357) |
DAC and DSI | (36,668) | (21,820) |
Amounts recognized | (358,259) | (253,177) |
Deferred income taxes | (56,038) | (33,151) |
Total unrealized net capital gains and losses | $ 210,810 | $ 124,709 |
Investments - Change in unreali
Investments - Change in unrealized net capital gains and losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | $ 214,070 | $ 255,857 | $ (212,514) |
Amounts recognized for: | |||
Insurance reserves | (90,234) | (150,729) | 141,714 |
DAC and DSI | (14,848) | (19,543) | 6,780 |
Amounts recognized | (105,082) | (170,272) | 148,494 |
Deferred income taxes | (22,887) | (17,973) | 13,445 |
Increase (decrease) in unrealized net capital gains and losses, after-tax | 86,101 | 67,612 | (50,575) |
EMA limited partnerships | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | (145) | (155) | (40) |
Fixed income securities | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | 214,127 | 256,021 | (212,483) |
Short-term investments | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | $ 88 | $ (9) | $ 9 |
Investments - Mortgage loans (D
Investments - Mortgage loans (Details) $ in Thousands | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Number of loans | loan | 83 | |
Amortized cost, net | $ | $ 621,702 | $ 733,258 |
Mortgage loans on real estate, carrying value (percentage) | 100.00% | 100.00% |
2021 | Mortgage loans | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of loans | loan | 6 | |
Amortized cost, net | $ | $ 44,345 | |
Mortgage loans on real estate, carrying value (percentage) | 7.10% | |
2022 | Mortgage loans | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of loans | loan | 8 | |
Amortized cost, net | $ | $ 46,326 | |
Mortgage loans on real estate, carrying value (percentage) | 7.50% | |
2023 | Mortgage loans | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of loans | loan | 11 | |
Amortized cost, net | $ | $ 82,043 | |
Mortgage loans on real estate, carrying value (percentage) | 13.20% | |
2024 | Mortgage loans | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of loans | loan | 12 | |
Amortized cost, net | $ | $ 97,143 | |
Mortgage loans on real estate, carrying value (percentage) | 15.60% | |
Thereafter | Mortgage loans | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of loans | loan | 46 | |
Amortized cost, net | $ | $ 351,845 | |
Mortgage loans on real estate, carrying value (percentage) | 56.60% | |
Apartment complex | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 30.60% | 32.60% |
Office buildings | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 28.40% | 27.40% |
Retail | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 16.60% | 15.60% |
Warehouse | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 13.20% | 16.50% |
Other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 11.20% | 7.90% |
Texas | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 23.90% | 19.90% |
California | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 15.80% | 16.70% |
North Carolina | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 9.30% | 8.20% |
Utah | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 6.70% | 5.90% |
New Jersey | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 4.20% | 5.60% |
Nevada | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 2.90% | 5.80% |
Illinois | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans on real estate, carrying value (percentage) | 2.00% | 5.50% |
Investments - Carrying value fo
Investments - Carrying value for limited partnership interests (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | $ 343,251 | $ 386,310 |
EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 234,764 | 277,244 |
Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 108,487 | 109,066 |
Private equity | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 312,073 | 358,654 |
Private equity | EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 204,573 | 251,154 |
Private equity | Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 107,500 | 107,500 |
Real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 16,801 | 16,923 |
Real estate | EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 15,814 | 15,357 |
Real estate | Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 987 | 1,566 |
Other | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 14,377 | 10,733 |
Other | EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 14,377 | 10,733 |
Other | Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | $ 0 | $ 0 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net investment income | ||||
Mortgage loans, net | $ 621,702,000 | $ 621,702,000 | $ 733,258,000 | |
Threshold percentage of mortgage loans to total carrying value | 5.00% | 5.00% | ||
Fixed income securities, at fair value | $ 4,918,874,000 | $ 4,918,874,000 | 4,434,362,000 | |
Threshold percentage of municipal to total carrying value | 5.00% | 5.00% | ||
Short-term investments | $ 133,045,000 | $ 133,045,000 | 224,098,000 | |
Policy loans | 37,294,000 | 37,294,000 | 38,583,000 | |
Fixed income and equity securities loaned | 73,800,000 | 73,800,000 | 152,300,000 | |
Interest income on collateral, net of fees | 235,000 | 342,000 | $ 286,000 | |
Below investment grade assets | 471,800,000 | 471,800,000 | 406,000,000 | |
Fixed income securities and short-term investments deposited with regulatory authorities | 2,100,000 | 2,100,000 | ||
Non-income producing fixed income securities and other investments | 0 | 0 | ||
Accrued investment income | 45,790,000 | 45,790,000 | 46,846,000 | |
Realized capital gains and losses | 238,000 | 128,265,000 | 106,627,000 | (20,554,000) |
Mortgage loans | ||||
Net investment income | ||||
Payments to acquire investments | 50,100,000 | |||
Reduction of allowance related to sales | 4,700,000 | |||
Municipal | ||||
Net investment income | ||||
Fixed income securities, at fair value | 544,553,000 | 544,553,000 | 552,280,000 | |
Fixed income securities | ||||
Net investment income | ||||
Accrued investment income | 42,500,000 | 42,500,000 | ||
Realized capital gains and losses | (2,190,000) | 1,389,000 | (1,306,000) | |
Mortgage loans | ||||
Net investment income | ||||
Accrued investment income | $ 2,000,000 | 2,000,000 | ||
Reduction of allowance related to sales | 4,727,000 | |||
Realized capital gains and losses | $ (9,390,000) | $ 0 | $ 466,000 |
Investments - Principal geograp
Investments - Principal geographic distribution of municipal bonds (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
California | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 35.20% | 33.30% |
Oregon | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 11.60% | 10.60% |
Texas | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 10.90% | 10.80% |
Illinois | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 8.70% | 8.00% |
Investments - Rollforward of cr
Investments - Rollforward of credit loss allowance for fixed income securities (Details) - Fixed income securities $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | $ 0 |
Credit losses on securities for which credit losses not previously reported | (255) |
Reduction of allowance related to sales | 255 |
Write-offs | 0 |
Ending balance | $ 0 |
Investments - Gross unrealized
Investments - Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position (Details) $ in Thousands | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Corporate | ||
Less than 12 months | ||
Number of issues | security | 46 | 44 |
Fair value | $ 154,414 | $ 104,484 |
Unrealized losses | $ (2,984) | $ (815) |
12 months or more | ||
Number of issues | security | 9,000 | 17,000 |
Fair value | $ 15,133 | $ 31,900 |
Unrealized losses | (798) | (1,749) |
Total unrealized losses | ||
Total unrealized losses | $ (3,782) | $ (2,564) |
MBS | ||
Less than 12 months | ||
Number of issues | security | 1 | 2 |
Fair value | $ 0 | $ 38 |
Unrealized losses | $ 0 | $ 0 |
12 months or more | ||
Number of issues | security | 0 | 2,000 |
Fair value | $ 0 | $ 1 |
Unrealized losses | 0 | 0 |
Total unrealized losses | ||
Total unrealized losses | $ 0 | $ 0 |
Fixed income securities | ||
Less than 12 months | ||
Number of issues | security | 47 | 46 |
Fair value | $ 154,414 | $ 104,522 |
Unrealized losses | $ (2,984) | $ (815) |
12 months or more | ||
Number of issues | security | 9,000 | 19,000 |
Fair value | $ 15,133 | $ 31,901 |
Unrealized losses | (798) | (1,749) |
Total unrealized losses | ||
Total unrealized losses | $ (3,782) | $ (2,564) |
Investment grade fixed income securities | ||
Less than 12 months | ||
Number of issues | security | 20 | 22 |
Fair value | $ 111,172 | $ 82,142 |
Unrealized losses | $ (1,883) | $ (347) |
12 months or more | ||
Number of issues | security | 0 | 3,000 |
Fair value | $ 0 | $ 9,845 |
Unrealized losses | 0 | (130) |
Total unrealized losses | ||
Total unrealized losses | $ (1,883) | $ (477) |
Below investment grade fixed income securities | ||
Less than 12 months | ||
Number of issues | security | 27 | 24 |
Fair value | $ 43,242 | $ 22,380 |
Unrealized losses | $ (1,101) | $ (468) |
12 months or more | ||
Number of issues | security | 9,000 | 16,000 |
Fair value | $ 15,133 | $ 22,056 |
Unrealized losses | (798) | (1,619) |
Total unrealized losses | ||
Total unrealized losses | $ (1,899) | $ (2,087) |
Investments - Gross unrealize_2
Investments - Gross unrealized losses by unrealized loss position and credit quality (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Available for sale securities, unrealized losses having loss of twenty percent or higher, greater than 12 months | $ 0 | |
Investment grade | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net | (1,883,000) | |
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net | 0 | |
Total unrealized losses | (1,883,000) | $ (477,000) |
Below investment grade | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net | (1,635,000) | |
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net | (264,000) | |
Total unrealized losses | (1,899,000) | (2,087,000) |
Available for sale Securities, Unrealized Losses Having Loss of Less than Twenty Percent, Less than 12 Months | (1,100,000) | |
Fixed income securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net | (3,518,000) | |
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net | (264,000) | |
Total unrealized losses | $ (3,782,000) | $ (2,564,000) |
Investments - Mortgage loans am
Investments - Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost, net | $ 621,702 | $ 733,258 |
Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 632,795 | 733,258 |
Allowance | (11,093) | 0 |
Amortized cost, net | 621,702 | 733,258 |
Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | 0 |
1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 80,516 | 48,780 |
1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 178,222 | 221,384 |
Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 374,057 | $ 463,094 |
2015 and prior | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 282,906 | |
2015 and prior | Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2015 and prior | 1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 31,451 | |
2015 and prior | 1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 79,681 | |
2015 and prior | Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 171,774 | |
2016 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 66,858 | |
2016 | Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2016 | 1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2016 | 1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 6,290 | |
2016 | Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 60,568 | |
2017 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 57,189 | |
2017 | Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2017 | 1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 16,187 | |
2017 | 1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 27,786 | |
2017 | Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 13,216 | |
2018 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 78,922 | |
2018 | Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2018 | 1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 5,000 | |
2018 | 1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 12,009 | |
2018 | Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 61,913 | |
2019 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 120,120 | |
2019 | Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2019 | 1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 14,078 | |
2019 | 1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 52,456 | |
2019 | Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 53,586 | |
Current | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 26,800 | |
Current | Below 1.0 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
Current | 1.0 - 1.25 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 13,800 | |
Current | 1.26 - 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
Current | Above 1.50 | Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | $ 13,000 |
Investments - Rollforward of _2
Investments - Rollforward of credit loss allowance for mortgage loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Standards Update 2016-13 | Mortgage loans | |||
Rollforward of the valuation allowance on impaired mortgage loans | |||
Beginning balance | $ (6,129) | ||
Ending balance | $ (6,129) | ||
Mortgage loans | |||
Rollforward of the valuation allowance on impaired mortgage loans | |||
Beginning balance | 0 | ||
Net increases related to credit losses | (9,691) | 0 | $ 0 |
Reduction of allowance related to sales | 4,727 | ||
Write-offs | 0 | ||
Ending balance | $ (11,093) | $ 0 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Commitments to invest in limited partnership interests | $ 98,858 | $ 127,515 |
Fair value | 4,918,874 | 4,434,362 |
Significant unobservable inputs (Level 3) | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Fair value | 26,816 | 46,189 |
Assets, fair value disclosure | 348,510 | 285,835 |
Limited partnership interests | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Commitments to invest in limited partnership interests | 23,900 | |
Fixed Income Securities Valued Based on Nonbinding Broker Quotes | Significant unobservable inputs (Level 3) | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Assets, fair value disclosure | $ 9,600 | $ 8,400 |
Minimum | Limited partnership interests | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Distribution and proceed period (in years) | 4 years | |
Useful life (in years) | 10 years | |
Maximum | Limited partnership interests | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Distribution and proceed period (in years) | 9 years | |
Useful life (in years) | 12 years |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Assets and liabilities measured at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Fair value | $ 4,918,874 | $ 4,434,362 | |
Equity securities | 251,437 | 274,133 | |
Short-term investments | 133,045 | 224,098 | |
Other investments: | |||
Other investments: Free-standing derivatives | $ 394 | ||
Counterparty and cash collateral netting | (377) | (846) | |
Separate account assets | 286,751 | 265,546 | |
Derivative asset, fair value | $ (377) | $ (846) | |
% of total assets at fair value | 0.00% | 0.00% | |
Total | $ 6,020,591 | $ 5,543,933 | |
Liabilities | |||
Counterparty and cash collateral netting | 287 | 15 | |
Total liabilities at fair value, Counterparty and cash collateral netting | $ 287 | $ 15 | |
% of total liabilities at fair value | (1.10%) | (0.10%) | |
Fair value | |||
Assets | |||
Fair value | $ 4,918,874 | $ 4,434,362 | |
Equity securities | 251,437 | 274,133 | |
Short-term investments | 133,045 | 224,098 | |
Other investments: | |||
Other investments: Free-standing derivatives | 8,097 | 5,237 | |
Separate account assets | 286,751 | 265,546 | |
Other assets | 313,900 | 231,491 | |
Total recurring basis assets | $ 5,912,104 | $ 5,434,867 | |
% of total assets at fair value | 100.00% | 100.00% | |
Liabilities | |||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ (20,193) | $ (16,653) | |
Other liabilities: Free-standing derivatives | (5,521) | (2,905) | |
Total recurring basis liabilities | $ (25,714) | $ (19,558) | |
% of total liabilities at fair value | 100.00% | 100.00% | |
U.S. government and agencies | |||
Assets | |||
Fair value | $ 144,905 | $ 52,814 | |
U.S. government and agencies | Fair value | |||
Assets | |||
Fair value | 144,905 | 52,814 | |
Municipal | |||
Assets | |||
Fair value | 544,553 | 552,280 | |
Municipal | Fair value | |||
Assets | |||
Fair value | 544,553 | 552,280 | |
Corporate - public | Fair value | |||
Assets | |||
Fair value | 3,127,680 | 2,693,901 | |
Corporate - privately placed | Fair value | |||
Assets | |||
Fair value | 1,026,047 | 981,344 | |
Foreign government | |||
Assets | |||
Fair value | 72,087 | 140,166 | |
Foreign government | Fair value | |||
Assets | |||
Fair value | 72,087 | 140,166 | |
MBS | |||
Assets | |||
Fair value | 3,602 | 13,857 | |
MBS | Fair value | |||
Assets | |||
Fair value | 3,602 | 13,857 | |
Quoted prices in active markets for identical assets (Level 1) | |||
Assets | |||
Fair value | 102,167 | 2,250 | |
Equity securities | 243,076 | 265,195 | |
Short-term investments | 112,293 | 124,763 | |
Other investments: | |||
Other investments: Free-standing derivatives | 0 | 0 | |
Separate account assets | 286,751 | 265,546 | |
Other assets | 0 | 0 | |
Total recurring basis assets | $ 744,287 | $ 657,754 | |
% of total assets at fair value | 12.60% | 12.10% | |
Liabilities | |||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ 0 | $ 0 | |
Other liabilities: Free-standing derivatives | 0 | 0 | |
Total recurring basis liabilities | $ 0 | $ 0 | |
% of total liabilities at fair value | 0.00% | 0.00% | |
Quoted prices in active markets for identical assets (Level 1) | U.S. government and agencies | |||
Assets | |||
Fair value | $ 102,167 | $ 2,250 | |
Quoted prices in active markets for identical assets (Level 1) | Municipal | |||
Assets | |||
Fair value | 0 | 0 | |
Quoted prices in active markets for identical assets (Level 1) | Corporate - public | |||
Assets | |||
Fair value | 0 | 0 | |
Quoted prices in active markets for identical assets (Level 1) | Corporate - privately placed | |||
Assets | |||
Fair value | 0 | 0 | |
Quoted prices in active markets for identical assets (Level 1) | Foreign government | |||
Assets | |||
Fair value | 0 | 0 | |
Quoted prices in active markets for identical assets (Level 1) | MBS | |||
Assets | |||
Fair value | 0 | 0 | |
Significant other observable inputs (Level 2) | |||
Assets | |||
Fair value | 4,789,891 | 4,385,923 | |
Equity securities | 590 | 858 | |
Short-term investments | 20,752 | 99,335 | |
Other investments: | |||
Other investments: Free-standing derivatives | 8,451 | 6,008 | |
Separate account assets | 0 | 0 | |
Other assets | 0 | 0 | |
Total recurring basis assets | $ 4,819,684 | $ 4,492,124 | |
% of total assets at fair value | 81.50% | 82.60% | |
Liabilities | |||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ 0 | $ 0 | |
Other liabilities: Free-standing derivatives | (5,808) | (2,920) | |
Total recurring basis liabilities | $ (5,808) | $ (2,920) | |
% of total liabilities at fair value | 22.60% | 15.00% | |
Significant other observable inputs (Level 2) | U.S. government and agencies | |||
Assets | |||
Fair value | $ 42,738 | $ 50,564 | |
Significant other observable inputs (Level 2) | Municipal | |||
Assets | |||
Fair value | 528,272 | 530,584 | |
Significant other observable inputs (Level 2) | Corporate - public | |||
Assets | |||
Fair value | 3,122,120 | 2,688,680 | |
Significant other observable inputs (Level 2) | Corporate - privately placed | |||
Assets | |||
Fair value | 1,021,072 | 962,072 | |
Significant other observable inputs (Level 2) | Foreign government | |||
Assets | |||
Fair value | 72,087 | 140,166 | |
Significant other observable inputs (Level 2) | MBS | |||
Assets | |||
Fair value | 3,602 | 13,857 | |
Significant unobservable inputs (Level 3) | |||
Assets | |||
Fair value | 26,816 | 46,189 | |
Equity securities | 7,771 | 8,080 | |
Short-term investments | 0 | 0 | |
Other investments: | |||
Other investments: Free-standing derivatives | 23 | 75 | |
Separate account assets | 0 | 0 | |
Other assets | 313,900 | 231,491 | |
Total recurring basis assets | $ 348,510 | $ 285,835 | |
% of total assets at fair value | 5.90% | 5.30% | |
Liabilities | |||
Contractholder funds: Derivatives embedded in life and annuity contracts | $ (20,193) | $ (16,653) | |
Other liabilities: Free-standing derivatives | 0 | 0 | |
Total recurring basis liabilities | $ (20,193) | $ (16,653) | |
% of total liabilities at fair value | 78.50% | 85.10% | |
Significant unobservable inputs (Level 3) | U.S. government and agencies | |||
Assets | |||
Fair value | $ 0 | $ 0 | |
Significant unobservable inputs (Level 3) | Municipal | |||
Assets | |||
Fair value | 16,281 | 21,696 | |
Significant unobservable inputs (Level 3) | Corporate - public | |||
Assets | |||
Fair value | 5,560 | 5,221 | |
Significant unobservable inputs (Level 3) | Corporate - privately placed | |||
Assets | |||
Fair value | 4,975 | 19,272 | |
Significant unobservable inputs (Level 3) | Foreign government | |||
Assets | |||
Fair value | 0 | 0 | |
Significant unobservable inputs (Level 3) | MBS | |||
Assets | |||
Fair value | 0 | 0 | |
Investments reported at NAV | |||
Other investments: | |||
Investments reported at NAV | $ 108,487 | $ 109,066 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Significant unobservable inputs (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Weighted average | ||
Quantitative information about the significant unobservable inputs | ||
Ultimate reinvestment spreads | 0.01703 | 0.01657 |
Significant unobservable inputs (Level 3) | ||
Quantitative information about the significant unobservable inputs | ||
Asset fair value | $ 348,510 | $ 285,835 |
Other assets – Structured settlement annuity reinsurance agreement | Significant unobservable inputs (Level 3) | ||
Quantitative information about the significant unobservable inputs | ||
Asset fair value | $ 313,900 | $ 231,491 |
Other assets – Structured settlement annuity reinsurance agreement | Significant unobservable inputs (Level 3) | Minimum | ||
Quantitative information about the significant unobservable inputs | ||
Ultimate reinvestment spreads | 0.01190 | 0.01298 |
Other assets – Structured settlement annuity reinsurance agreement | Significant unobservable inputs (Level 3) | Maximum | ||
Quantitative information about the significant unobservable inputs | ||
Ultimate reinvestment spreads | 0.02260 | 0.02036 |
Derivatives embedded in life contracts – equity-indexed and forward starting options | Significant unobservable inputs (Level 3) | ||
Quantitative information about the significant unobservable inputs | ||
Fair value | $ (19,478) | $ (14,239) |
Projected option cost | Derivatives embedded in life contracts – equity-indexed and forward starting options | Significant unobservable inputs (Level 3) | Minimum | ||
Quantitative information about the significant unobservable inputs | ||
Projected option cost | 0.039 | 3.9 |
Projected option cost | Derivatives embedded in life contracts – equity-indexed and forward starting options | Significant unobservable inputs (Level 3) | Maximum | ||
Quantitative information about the significant unobservable inputs | ||
Projected option cost | 0.042 | 0.042 |
Projected option cost | Derivatives embedded in life contracts – equity-indexed and forward starting options | Significant unobservable inputs (Level 3) | Weighted average | ||
Quantitative information about the significant unobservable inputs | ||
Projected option cost | 0.0401 | 0.0400 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Rollforward of Level 3 assets and liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | $ 285,835 | $ 220,714 | $ 273,459 |
Total gains (losses) included in: net income | 82,043 | 64,565 | 5,766 |
Total gains (losses) included in: OCI | 257 | 2,659 | (1,589) |
Transfers into Level 3 | 8,154 | 13,987 | 0 |
Transfers out of Level 3 | (21,749) | (2,099) | (22,957) |
Purchases | 26 | 228 | 3,789 |
Sales | (5,551) | (7,588) | (1,315) |
Issues | 0 | 0 | 0 |
Settlements | (505) | (6,631) | (36,439) |
Balance at end of period | 348,510 | 285,835 | 220,714 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | (16,653) | (3,801) | (4,796) |
Total gains (losses) included in: net income | (1,822) | (1,664) | 995 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | (10,128) | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issues | (2,763) | (1,283) | 0 |
Settlements | 1,045 | 223 | 0 |
Balance at end of period | (20,193) | (16,653) | (3,801) |
Fair value assets and liabilities measured on recurring basis, gain (loss) included in earnings | |||
Total realized and unrealized gains (losses) included in net income, recurring Level 3 assets and liabilities | 80,221 | 62,901 | 6,761 |
Other investments: Free-standing derivatives | 394 | ||
Contractholder funds: Derivatives embedded in life and annuity contracts | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | (16,653) | (3,801) | (4,796) |
Total gains (losses) included in: net income | (1,822) | (1,664) | 995 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | (10,128) | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issues | (2,763) | (1,283) | 0 |
Settlements | 1,045 | 223 | 0 |
Balance at end of period | (20,193) | (16,653) | (3,801) |
Net investment income | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Total gains (losses) included in: net income | (1,467) | (535) | 3 |
Realized capital gains and losses | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Total gains (losses) included in: net income | 83,510 | 65,100 | 5,763 |
Contract benefits | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Total gains (losses) included in: net income | 1,699 | 987 | (326) |
Interest credited to contractholder funds | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Total gains (losses) included in: net income | (3,521) | (2,651) | 1,321 |
Municipal | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 21,696 | 20,821 | 21,178 |
Total gains (losses) included in: net income | (30) | 0 | 0 |
Total gains (losses) included in: OCI | 87 | 1,695 | (357) |
Transfers into Level 3 | 6,013 | 0 | 0 |
Transfers out of Level 3 | (10,619) | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | (866) | (820) | 0 |
Issues | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Balance at end of period | 16,281 | 21,696 | 20,821 |
Corporate - public | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 5,221 | 6,761 | 7,312 |
Total gains (losses) included in: net income | 1 | 1 | 1 |
Total gains (losses) included in: OCI | 338 | 542 | (383) |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | (2,083) | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issues | 0 | 0 | 0 |
Settlements | 0 | 0 | (169) |
Balance at end of period | 5,560 | 5,221 | 6,761 |
Corporate - privately placed | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 19,272 | 11,190 | 55,979 |
Total gains (losses) included in: net income | 11 | 6 | 4 |
Total gains (losses) included in: OCI | (168) | 422 | (639) |
Transfers into Level 3 | 2,141 | 13,987 | 0 |
Transfers out of Level 3 | (11,130) | 0 | (22,957) |
Purchases | 0 | 0 | 0 |
Sales | (4,685) | 0 | 0 |
Issues | 0 | 0 | 0 |
Settlements | (466) | (6,333) | (21,197) |
Balance at end of period | 4,975 | 19,272 | 11,190 |
ABS | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 0 | 15,205 | |
Total gains (losses) included in: net income | 0 | ||
Total gains (losses) included in: OCI | (205) | ||
Transfers into Level 3 | 0 | ||
Transfers out of Level 3 | 0 | ||
Purchases | 0 | ||
Sales | 0 | ||
Issues | 0 | ||
Settlements | (15,000) | ||
Balance at end of period | 0 | ||
Fixed income securities | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 46,189 | 38,772 | 99,674 |
Total gains (losses) included in: net income | (18) | 7 | 5 |
Total gains (losses) included in: OCI | 257 | 2,659 | (1,584) |
Transfers into Level 3 | 8,154 | 13,987 | 0 |
Transfers out of Level 3 | (21,749) | (2,083) | (22,957) |
Purchases | 0 | 0 | 0 |
Sales | (5,551) | (820) | 0 |
Issues | 0 | 0 | 0 |
Settlements | (466) | (6,333) | (36,366) |
Balance at end of period | 26,816 | 46,189 | 38,772 |
Equity securities | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 8,080 | 12,162 | 7,159 |
Total gains (losses) included in: net income | (310) | 2,653 | 2,600 |
Total gains (losses) included in: OCI | 0 | 0 | (5) |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | (16) | 0 |
Purchases | 1 | 210 | 3,723 |
Sales | 0 | (6,768) | (1,315) |
Issues | 0 | 0 | 0 |
Settlements | 0 | (161) | 0 |
Balance at end of period | 7,771 | 8,080 | 12,162 |
Free-standing derivatives, net | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 75 | 394 | 336 |
Total gains (losses) included in: net income | (38) | (200) | 65 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 25 | 18 | 66 |
Sales | 0 | 0 | 0 |
Issues | 0 | 0 | 0 |
Settlements | (39) | (137) | (73) |
Balance at end of period | 23 | 75 | 394 |
Other assets | |||
Rollforward of Level 3 assets held at fair value on a recurring basis | |||
Balance at beginning of period | 231,491 | 169,386 | 166,290 |
Total gains (losses) included in: net income | 82,409 | 62,105 | 3,096 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issues | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Balance at end of period | $ 313,900 | $ 231,491 | $ 169,386 |
Fair Value of Assets and Liab_7
Fair Value of Assets and Liabilities - Change in unrealized gains and losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | $ 82,034 | $ 61,990 | $ 5,758 |
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | (1,822) | (1,664) | 995 |
Total included in net income | 80,212 | 60,326 | 6,753 |
Changes in unrealized net capital gains and losses reported in OCI | 452 | ||
Contractholder funds: Derivatives embedded in life and annuity contracts | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | (1,822) | (1,664) | 995 |
Net investment income | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date | (1,467) | (535) | 3 |
Realized capital gains and losses | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date | 83,501 | 62,525 | 5,755 |
Contract benefits | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date | 1,699 | 987 | (326) |
Interest credited to contractholder funds | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date | (3,521) | (2,651) | 1,321 |
Municipal | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | (30) | 0 | 0 |
Changes in unrealized net capital gains and losses reported in OCI | 87 | ||
Corporate - public | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 1 | 1 | 1 |
Changes in unrealized net capital gains and losses reported in OCI | 338 | ||
Corporate - privately placed | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | 2 | 2 | 2 |
Changes in unrealized net capital gains and losses reported in OCI | 27 | ||
Total fixed income securities | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | (27) | 3 | 3 |
Free-standing derivatives, net | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | (38) | (200) | 65 |
Equity securities | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | (310) | 82 | 2,594 |
Other assets | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date, included in earnings | $ 82,409 | $ 62,105 | $ 3,096 |
Fair Value of Assets and Liab_8
Fair Value of Assets and Liabilities - Financial assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets | ||||
Mortgage loans, net | $ 621,702 | $ 733,258 | ||
Financial liabilities | ||||
Liability for collateral | 76,393 | 158,111 | $ 69,788 | $ 59,067 |
Significant unobservable inputs (Level 3) | Amortized cost, net | ||||
Financial assets | ||||
Mortgage loans, net | 621,702 | 733,258 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 1,504,295 | 1,605,574 | ||
Significant unobservable inputs (Level 3) | Fair value | ||||
Financial assets | ||||
Mortgage loans, net | 660,862 | 764,201 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 1,735,933 | 1,730,341 | ||
Significant other observable inputs (Level 2) | Amortized cost, net | ||||
Financial liabilities | ||||
Liability for collateral | 76,393 | 158,111 | ||
Significant other observable inputs (Level 2) | Fair value | ||||
Financial liabilities | ||||
Liability for collateral | $ 76,393 | $ 158,111 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Narrative (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Cash and securities pledged as collateral by counterparties | $ 360 |
Securities pledged as collateral to counterparties | 270 |
Securities pledged in the form of margin deposits | $ 400 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Volume and fair value positions of derivative instruments (Details) $ in Thousands | Dec. 31, 2020USD ($)contract | Dec. 31, 2019USD ($)contract |
Derivatives, Fair Value | ||
Total asset derivatives, Notional amount | $ 16,613 | |
Total liability derivatives, Notional amount | 95,879 | $ 114,237 |
Total derivatives, Notional amount | $ 112,492 | $ 114,237 |
Total asset derivatives, Number of contracts | contract | 133 | 140 |
Total liability derivatives, Number of contracts | contract | 132 | 140 |
Total derivatives, Number of contracts | contract | 265 | 280 |
Net amount on balance sheet | $ 321,723 | $ 236,723 |
Net amount on balance sheet | (25,354) | (18,727) |
Total derivatives, Fair value, net | 296,369 | 217,996 |
Asset derivatives, Gross asset | 321,940 | 236,723 |
Liability derivatives, gross asset | 430 | 846 |
Asset derivatives, gross liability | (217) | 0 |
Liability derivatives, Gross liability | (25,784) | (19,573) |
Interest rate cap agreements | Derivatives not designated as accounting hedging instruments | Other Investments | ||
Derivatives, Fair Value | ||
Total asset derivatives, Notional amount | 13,100 | |
Net amount on balance sheet | 23 | |
Asset derivatives, Gross asset | 23 | |
Asset derivatives, gross liability | $ 0 | |
Interest rate cap agreements | Derivatives not designated as accounting hedging instruments | Other liabilities & accrued expenses | ||
Derivatives, Fair Value | ||
Total liability derivatives, Notional amount | 13,400 | |
Net amount on balance sheet | 75 | |
Liability derivatives, gross asset | 75 | |
Liability derivatives, Gross liability | $ 0 | |
Options | Derivatives not designated as accounting hedging instruments | Other Investments | ||
Derivatives, Fair Value | ||
Total asset derivatives, Number of contracts | contract | 132 | 140 |
Net amount on balance sheet | $ 8,000 | $ 5,232 |
Asset derivatives, Gross asset | 8,000 | 5,232 |
Asset derivatives, gross liability | $ 0 | $ 0 |
Options | Derivatives not designated as accounting hedging instruments | Other liabilities & accrued expenses | ||
Derivatives, Fair Value | ||
Total liability derivatives, Number of contracts | contract | 132 | 139 |
Net amount on balance sheet | $ (5,411) | $ (2,832) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, Gross liability | (5,411) | $ (2,832) |
Futures | Derivatives not designated as accounting hedging instruments | Other liabilities & accrued expenses | ||
Derivatives, Fair Value | ||
Total liability derivatives, Number of contracts | contract | 1 | |
Net amount on balance sheet | $ 0 | |
Liability derivatives, gross asset | 0 | |
Liability derivatives, Gross liability | 0 | |
Foreign currency forwards | Derivatives not designated as accounting hedging instruments | Other Investments | ||
Derivatives, Fair Value | ||
Total asset derivatives, Notional amount | 3,513 | |
Net amount on balance sheet | (200) | |
Asset derivatives, Gross asset | 17 | |
Asset derivatives, gross liability | (217) | |
Foreign currency forwards | Derivatives not designated as accounting hedging instruments | Other liabilities & accrued expenses | ||
Derivatives, Fair Value | ||
Total liability derivatives, Notional amount | 11,071 | 17,984 |
Net amount on balance sheet | 250 | 683 |
Liability derivatives, gross asset | 430 | 771 |
Liability derivatives, Gross liability | $ (180) | $ (88) |
Other assets – Structured settlement annuity reinsurance agreement | Derivatives not designated as accounting hedging instruments | Other assets | ||
Derivatives, Fair Value | ||
Total asset derivatives, Number of contracts | contract | 1 | 0 |
Net amount on balance sheet | $ 313,900 | $ 231,491 |
Asset derivatives, Gross asset | 313,900 | 231,491 |
Asset derivatives, gross liability | 0 | 0 |
Accumulation benefits | Derivatives not designated as accounting hedging instruments | Contractholder funds | ||
Derivatives, Fair Value | ||
Total liability derivatives, Notional amount | 18,322 | 23,629 |
Net amount on balance sheet | (423) | (1,987) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, Gross liability | (423) | (1,987) |
Guaranteed withdrawal benefits | Derivatives not designated as accounting hedging instruments | Contractholder funds | ||
Derivatives, Fair Value | ||
Total liability derivatives, Notional amount | 14,146 | 15,369 |
Net amount on balance sheet | (292) | (427) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, Gross liability | (292) | (427) |
Equity-indexed options in life product contracts | Derivatives not designated as accounting hedging instruments | Contractholder funds | ||
Derivatives, Fair Value | ||
Total liability derivatives, Notional amount | 52,340 | 43,855 |
Net amount on balance sheet | (19,478) | (14,239) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, Gross liability | $ (19,478) | $ (14,239) |
Derivative Financial Instrume_5
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Gross and net amounts for OTC derivatives (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Asset derivatives | ||
Gross amount | $ 321,940 | $ 236,723 |
Derivative asset, counterparty netting | (217) | 0 |
Net amount on balance sheet | 321,723 | 236,723 |
Liability derivatives | ||
Gross amount | (25,784) | (19,573) |
Derivative liability, counterparty netting | 430 | 846 |
Net amount on balance sheet | (25,354) | (18,727) |
OTC derivatives | ||
Asset derivatives | ||
Gross amount | 470 | 846 |
Derivative asset, counterparty netting | (647) | (846) |
Derivative asset, cash collateral (received) pledged | 270 | 0 |
Net amount on balance sheet | 93 | 0 |
Securities collateral (received) pledged | 0 | 0 |
Net amount | 93 | 0 |
Liability derivatives | ||
Gross amount | (397) | (88) |
Derivative liability, counterparty netting | 647 | 846 |
Derivative liability offsets under cash collateral (received) pledged | (360) | (831) |
Net amount on balance sheet | (110) | (73) |
Securities collateral (received) pledged | 0 | 0 |
Net amount | $ (110) | $ (73) |
Derivative Financial Instrume_6
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Foreign currency contracts in cash flow hedging and other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) | |||
Total gain (loss) recognized in net income on derivatives | $ 97,717 | $ 58,350 | $ 865 |
Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) | |||
Total gain (loss) recognized in net income on derivatives | 100,412 | 59,087 | 638 |
Contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Total gain (loss) recognized in net income on derivatives | 1,699 | 987 | (326) |
Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Total gain (loss) recognized in net income on derivatives | (4,394) | (1,724) | 553 |
Interest rate contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (37) | (200) | 65 |
Interest rate contracts | Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (37) | (200) | 65 |
Interest rate contracts | Contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Interest rate contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Equity and index contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 844 | 1,988 | (768) |
Equity and index contracts | Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (1) | 1 | 0 |
Equity and index contracts | Contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Equity and index contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 845 | 1,987 | (768) |
Embedded derivative financial instruments | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (3,540) | (2,724) | 995 |
Embedded derivative financial instruments | Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Embedded derivative financial instruments | Contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 1,699 | 987 | (326) |
Embedded derivative financial instruments | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (5,239) | (3,711) | 1,321 |
Foreign currency contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (304) | 364 | 887 |
Foreign currency contracts | Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (304) | 364 | 887 |
Foreign currency contracts | Contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Foreign currency contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Other assets – Structured settlement annuity reinsurance agreement | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 100,754 | 58,922 | (314) |
Other assets – Structured settlement annuity reinsurance agreement | Realized capital gains and losses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 100,754 | 58,922 | (314) |
Other assets – Structured settlement annuity reinsurance agreement | Contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Other assets – Structured settlement annuity reinsurance agreement | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_7
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Counterparty credit exposure and other (Details) $ in Thousands | Dec. 31, 2020USD ($)counter-party | Dec. 31, 2019USD ($)counter-party |
Credit Derivatives | ||
Gross liability fair value of contracts containing credit-risk-contingent features | $ 101 | $ 83 |
Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs | (2) | (70) |
Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently | $ 99 | $ 13 |
A plus | ||
Credit Derivatives | ||
Number of counter-parties | counter-party | 1 | 2 |
Notional amount | $ 8,341 | $ 30,670 |
Credit exposure | 349 | 770 |
Exposure, net of collateral | $ 0 | $ 0 |
Derivative Financial Instrume_8
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Off-balance sheet financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Commitments to invest in limited partnership interests | $ 98,858 | $ 127,515 |
Commitments to extend mortgage loans | 0 | 13,000 |
Private placement commitments | $ 21 | $ 15,000 |
Reserve for Life-Contingent C_3
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Reserve for life-contingent contract benefits (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||
Total reserve for life-contingent contract benefits | $ 2,698,383 | $ 2,411,809 |
Structured settlement annuities | ||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||
Total reserve for life-contingent contract benefits | 2,347,415 | 2,051,363 |
Other immediate fixed annuities | ||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||
Total reserve for life-contingent contract benefits | 58,832 | 61,039 |
Traditional life insurance | ||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||
Total reserve for life-contingent contract benefits | 273,067 | 265,971 |
Accident and health insurance | ||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||
Total reserve for life-contingent contract benefits | 18,218 | 32,261 |
Other | ||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||
Total reserve for life-contingent contract benefits | $ 851 | $ 1,175 |
Reserve for Life-Contingent C_4
Reserve for Life-Contingent Contract Benefits and Contractholder Funds- Assumptions (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Structured settlement annuities | Minimum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 6.00% |
Other immediate fixed annuities | Minimum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 6.00% |
Traditional life insurance | Minimum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 3.00% |
Traditional life insurance | Maximum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 8.00% |
Accident and health insurance | Minimum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 3.50% |
Accident and health insurance | Maximum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 6.00% |
Other | Minimum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 1.40% |
Other | Maximum | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |
Life contingent contract benefits, interest rate assumptions (as a percent) | 5.80% |
Reserve for Life-Contingent C_5
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Reserve for life-contingent contract benefits with respect to deficiency | $ 321.6 | $ 231.4 | |
Life and Annuity Insurance Product Line | Allstate Annuities | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Premium deficiency charge for immediate annuities, after tax | $ 196 | ||
Variable annuities | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Account balances of separate accounts with guarantees, invested in equity, fixed income and balanced mutual funds | 237.9 | 222.2 | |
Account balances of separate accounts with guarantees, invested in money market mutual funds | $ 22.3 | $ 21.7 |
Reserve for Life-Contingent C_6
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Assumptions generally used in calculating the reserve for life-contingent (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Contractholder funds | ||||
Total contractholder funds | $ 2,464,770 | $ 2,547,968 | $ 2,681,300 | $ 2,874,884 |
Interest-sensitive life insurance | ||||
Contractholder funds | ||||
Total contractholder funds | 773,531 | 756,995 | ||
Fixed annuities | ||||
Contractholder funds | ||||
Total contractholder funds | $ 1,639,591 | 1,741,488 | ||
Key contract provisions relating to contractholder funds: | ||||
Percent of fixed annuities subject to market value adjustment for discretionary withdrawals (as a percent) | 12.20% | |||
Other investment contracts | ||||
Contractholder funds | ||||
Total contractholder funds | $ 51,648 | $ 49,485 | ||
Other investment contracts | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 1.70% | |||
Other investment contracts | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 10.30% | |||
Equity-indexed life insurance | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 0.00% | |||
Equity-indexed life insurance | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 8.30% | |||
Other life insurance | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 2.00% | |||
Other life insurance | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 5.10% | |||
Equity indexed fixed annuities | ||||
Key contract provisions relating to contractholder funds: | ||||
Period for withdrawal or surrender charges (in years) | 20 years | |||
Immediate fixed annuities | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 0.60% | |||
Immediate fixed annuities | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 7.00% | |||
Other fixed annuities | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 1.00% | |||
Other fixed annuities | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 5.00% |
Reserve for Life-Contingent C_7
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Contractholder funds (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contractholder funds activity | |||
Balance, beginning of year | $ 2,547,968 | $ 2,681,300 | $ 2,874,884 |
Deposits | 104,355 | 104,850 | 107,606 |
Interest credited | 83,769 | 86,338 | 91,430 |
Benefits | (102,483) | (104,681) | (114,006) |
Surrenders and partial withdrawals | (100,697) | (152,898) | (190,873) |
Contract charges | (76,801) | (75,879) | (75,483) |
Net transfers (to) from separate accounts | (84) | 88 | 256 |
Other adjustments | 8,743 | 8,850 | (12,514) |
Balance, end of year | $ 2,464,770 | $ 2,547,968 | $ 2,681,300 |
Reserve for Life-Contingent C_8
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Variable annuity contracts with guarantees and other (Details) - Variable annuities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Death benefits | ||
Variable annuity contracts with guarantees | ||
Separate account value | $ 260,159 | $ 243,833 |
Net amount at risk | $ 4,081 | $ 4,392 |
Average attained age of contractholders (in years) | 71 years | 68 years |
Liability for guarantees related to income benefits | ||
Variable annuity contracts with guarantees | ||
Separate account value | $ 21,409 | $ 18,849 |
Net amount at risk | 1,674 | 1,750 |
Withdrawal benefits | ||
Variable annuity contracts with guarantees | ||
Separate account value | 13,999 | 15,173 |
Net amount at risk | 234 | 421 |
Accumulation benefits | ||
Variable annuity contracts with guarantees | ||
Separate account value | 18,285 | 24,033 |
Net amount at risk | $ 117 | $ 224 |
Weighted average waiting period until guarantee date (in years) | 2 years | 3 years |
Reserve for Life-Contingent C_9
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Liabilities for guarantees (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | $ 36,885 | $ 34,647 |
Less reinsurance recoverables | 3,936 | 5,721 |
Net balance at beginning of period | 32,949 | 28,926 |
Incurred guarantee benefits | 6,041 | 4,411 |
Paid guarantee benefits | (745) | (388) |
Net change | 5,296 | 4,023 |
Net balance at end of period | 38,245 | 32,949 |
Plus reinsurance recoverables | 1,859 | 3,936 |
Balance at end of period | 40,104 | 36,885 |
Liability for guarantees related to death benefits and interest-sensitive life products | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 34,135 | 30,674 |
Less reinsurance recoverables | 1,189 | 1,752 |
Net balance at beginning of period | 32,946 | 28,922 |
Incurred guarantee benefits | 6,041 | 4,412 |
Paid guarantee benefits | (745) | (388) |
Net change | 5,296 | 4,024 |
Net balance at end of period | 38,242 | 32,946 |
Plus reinsurance recoverables | 877 | 1,189 |
Balance at end of period | 39,119 | 34,135 |
Liability for guarantees related to income benefits | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 336 | 572 |
Less reinsurance recoverables | 333 | 568 |
Net balance at beginning of period | 3 | 4 |
Incurred guarantee benefits | 0 | (1) |
Paid guarantee benefits | 0 | 0 |
Net change | 0 | (1) |
Net balance at end of period | 3 | 3 |
Plus reinsurance recoverables | 267 | 333 |
Balance at end of period | 270 | 336 |
Liability for guarantees related to accumulation and withdrawal benefits | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 2,414 | 3,401 |
Less reinsurance recoverables | 2,414 | 3,401 |
Net balance at beginning of period | 0 | 0 |
Incurred guarantee benefits | 0 | 0 |
Paid guarantee benefits | 0 | 0 |
Net change | 0 | 0 |
Net balance at end of period | 0 | 0 |
Plus reinsurance recoverables | 715 | 2,414 |
Balance at end of period | $ 715 | $ 2,414 |
Reserve for Life-Contingent _10
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Liabilities for guarantees narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Liabilities for guarantees: | |||
Liability for guarantees | $ 40,104 | $ 36,885 | $ 34,647 |
Variable annuities | |||
Liabilities for guarantees: | |||
Liability for guarantees | 40,104 | 36,885 | 34,647 |
Variable annuities | Death benefits | |||
Liabilities for guarantees: | |||
Liability for guarantees | 851 | 1,174 | 1,752 |
Variable annuities | Liability for guarantees related to income benefits | |||
Liabilities for guarantees: | |||
Liability for guarantees | 267 | 333 | 568 |
Variable annuities | Accumulation benefits | |||
Liabilities for guarantees: | |||
Liability for guarantees | 423 | 1,987 | 3,003 |
Variable annuities | Withdrawal benefits | |||
Liabilities for guarantees: | |||
Liability for guarantees | 292 | 427 | 398 |
Variable annuities | Other guarantees | |||
Liabilities for guarantees: | |||
Liability for guarantees | $ 38,271 | $ 32,964 | $ 28,926 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) | Jul. 01, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reinsurance recoverable | ||||
Maximum retention per single insured life | $ 250,000 | $ 2,000,000 | ||
Reinsurance recoverable | 223,349,000 | $ 229,759,000 | ||
Gross life insurance in force | 42,270,000,000 | |||
Life insurance in force ceded to unaffiliated reinsurers | 8,329,864,000 | 8,581,710,000 | $ 8,914,558,000 | |
Ceded premiums earned | 10,004,000 | 10,600,000 | 11,054,000 | |
Policyholder benefits and claims incurred, ceded | $ 11,666,000 | 13,687,000 | 11,016,000 | |
Maximum | ||||
Reinsurance recoverable | ||||
Percent of morbidity risk ceded for term-life insurance policies (as a percent) | 90.00% | |||
Affiliate | ||||
Reinsurance recoverable | ||||
Life insurance in force ceded to unaffiliated reinsurers | $ 433,300,000 | |||
Allstate Financial | ||||
Reinsurance recoverable | ||||
Ceded premiums earned | 3,300,000 | 4,200,000 | 3,400,000 | |
Policyholder benefits and claims incurred, ceded | 21,700,000 | 1,000,000 | $ 0 | |
Non-affiliate | ||||
Reinsurance recoverable | ||||
Life insurance in force ceded to unaffiliated reinsurers | 7,900,000,000 | |||
Prudential | ||||
Reinsurance recoverable | ||||
Reinsurance recoverable | 162,900,000 | 166,900,000 | ||
Citigroup Subsidiaries and Scottish Re | ||||
Reinsurance recoverable | ||||
Reinsurance recoverable | $ 282,000 | $ 579,000 |
Reinsurance - Ceded to Prudenti
Reinsurance - Ceded to Prudential (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reinsurance | |||
Interest credited to contractholder funds | $ 4,503 | $ 4,307 | $ 4,533 |
Prudential | |||
Reinsurance | |||
Premiums and contract charges | 4,750 | 4,797 | 5,189 |
Contract benefits | (1,524) | (890) | 1,459 |
Interest credited to contractholder funds | 4,503 | 4,307 | 4,533 |
Operating costs and expenses | $ 712 | $ 867 | $ 868 |
Reinsurance - Premiums and cont
Reinsurance - Premiums and contract charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effects of reinsurance on revenue | |||
Direct premiums and contract charges | $ 174,812 | $ 203,614 | $ 199,289 |
Total premiums and contract charges | 157,418 | 185,766 | 180,641 |
Direct life and annuity contract benefits | 445,983 | 272,200 | 248,008 |
Contract benefits, net of reinsurance | 434,641 | 259,013 | 237,578 |
Effects of reinsurance on cost and expenses | |||
Direct interest credited to contractholder funds | 88,814 | 90,758 | 96,002 |
Ceded interest credited to contractholder funds | (4,503) | (4,307) | (4,533) |
Interest credited to contractholder funds | 84,324 | 86,464 | 91,482 |
Non-affiliate | |||
Effects of reinsurance on revenue | |||
Assumed premiums and contract charges | 588 | 697 | 685 |
Ceded premiums and contract charges | (15,674) | (16,359) | (17,361) |
Assumed life and annuity contract benefits | 324 | 500 | 586 |
Life and annuity contract benefits, reinsurance ceded | (10,721) | (11,333) | (10,961) |
Effects of reinsurance on cost and expenses | |||
Assumed interest credited to contractholder funds | 13 | 13 | 13 |
Ceded interest credited to contractholder funds | (4,503) | (4,307) | (4,533) |
Affiliate | |||
Effects of reinsurance on revenue | |||
Ceded premiums and contract charges | (2,308) | (2,186) | (1,972) |
Life and annuity contract benefits, reinsurance ceded | $ (945) | $ (2,354) | $ (55) |
Reinsurance - Rollforward of cr
Reinsurance - Rollforward of credit loss allowance for reinsurance recoverables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reinsurance Recoverable, Allowance for Credit Loss [Roll Forward] | ||
Reinsurance recoverable, allowance for credit loss, beginning balance | $ (34) | |
Cumulative effect of change in accounting principle | $ (621) | |
Decrease in the provision for credit losses | 31 | |
Write-offs | 0 | |
Reinsurance recoverable, allowance for credit loss, ending balance | $ (624) |
Deferred Policy Acquisition a_3
Deferred Policy Acquisition and Sales Inducement Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred policy acquisition costs | |||
Balance, beginning of year | $ 124,118 | $ 155,887 | $ 146,333 |
Acquisition costs deferred | 11,175 | 16,771 | 19,577 |
Amortization charged to income | (20,346) | (30,396) | (16,299) |
Effect of unrealized gains and losses | (13,735) | (18,144) | 6,276 |
Balance, end of year | 101,212 | 124,118 | 155,887 |
DSI activity relates to fixed annuities and interest-sensitive life contracts | |||
Balance, beginning of year | 1,776 | 2,391 | 2,278 |
Sales inducements deferred | 64 | 125 | 128 |
Amortization charged to income | (619) | (251) | (181) |
Effect of unrealized gains and losses | 549 | (489) | 166 |
Balance, end of year | $ 1,770 | $ 1,776 | $ 2,391 |
Guarantees and Contingent Lia_2
Guarantees and Contingent Liabilities (Details) - Guaranty funds - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Guarantees and Contingent Liabilities | ||
Liability for insurance assessments | $ 758 | $ 759 |
Insurance assessments, premium tax offsets | $ 911 | $ 916 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of the deferred income tax assets and liabilities | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Income taxes paid | $ 37,200,000 | $ 1,000,000 | $ 16,000,000 |
Income Taxes - Components of th
Income Taxes - Components of the deferred income tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||
Accrued liabilities | $ 25 | $ 25 |
Unrealized foreign currency translation adjustments on limited partnerships | 0 | 317 |
Other assets | 148 | 20 |
Total deferred tax assets | 173 | 362 |
Deferred tax liabilities | ||
Investments | (96,249) | (78,081) |
Unrealized net capital gains | (56,038) | (33,151) |
DAC | (11,521) | (14,447) |
Life and annuity reserves | (2,483) | (29,048) |
Unrealized foreign currency translation adjustments on limited partnerships | (180) | 0 |
Other liabilities | (583) | (484) |
Total deferred tax liabilities | (167,054) | (155,211) |
Net deferred tax liability | $ (166,881) | $ (154,849) |
Income Taxes - Components of in
Income Taxes - Components of income tax expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current | $ (2,078) | $ 36,766 | $ 11,257 |
Deferred | (9,915) | (5,840) | 1,570 |
Total income tax (benefit) expense | $ (11,993) | $ 30,926 | $ 12,827 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax percentage (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate - (benefit) expense | 21.00% | 21.00% | 21.00% |
State income taxes | (3.70%) | 1.80% | 5.40% |
Adjustments to prior year tax liabilities | 1.10% | 1.40% | (0.10%) |
Tax Legislation benefit | 0.00% | 0.00% | (3.90%) |
Other | 0.40% | (0.10%) | (0.30%) |
Effective income tax rate - (benefit) expense | 18.80% | 24.10% | 22.10% |
Statutory Financial Informati_2
Statutory Financial Information and Dividend Limitations (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statutory Financial Information and Dividend Limitations | |||
Statutory net (loss) income | $ (66,100,000) | $ (34,000,000) | $ 68,000,000 |
Statutory capital and surplus | 555,900,000 | $ 614,200,000 | |
Deficit position used to determine payment of dividends | 317,700,000 | ||
Statutory accounting practices, statutory capital and surplus, adjusted balance | 643,600,000 | ||
Authorized control level RBC | 92,100,000 | ||
Dividends paid | $ 0 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allstate 401(k) Savings Plan | |||
Cost allocated to Allstate 401(k) Savings Plan | $ 743 | $ 953 | $ 1,000 |
Pension benefits | |||
Benefit Plans | |||
Allocated Cost (Credit) | $ 303 | $ 609 | $ 439 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pre- tax | |||
Other comprehensive income (loss) | $ 110,911 | $ 81,622 | $ (63,896) |
Tax | |||
Other comprehensive income (loss) | (23,291) | (17,141) | 13,419 |
After- tax | |||
Other comprehensive income (loss), after-tax | 87,620 | 64,481 | (50,477) |
Accumulated Net Investment Gain (Loss) | |||
Pre- tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | 106,690 | 86,980 | (65,379) |
Less: reclassification adjustment of realized capital gains and losses | (2,298) | 1,395 | (1,359) |
Other comprehensive income (loss) | 108,988 | 85,585 | (64,020) |
Tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | (22,404) | (18,266) | 13,730 |
Less: reclassification adjustment of realized capital gains and losses | 483 | (293) | 285 |
Other comprehensive income (loss) | (22,887) | (17,973) | 13,445 |
After- tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | 84,286 | 68,714 | (51,649) |
Less: reclassification adjustment of realized capital gains and losses | (1,815) | 1,102 | (1,074) |
Other comprehensive income (loss), after-tax | 86,101 | 67,612 | (50,575) |
Accumulated Foreign Currency Adjustment | |||
Pre- tax | |||
Other comprehensive income (loss) | 1,923 | (3,963) | 124 |
Tax | |||
Other comprehensive income (loss) | (404) | 832 | (26) |
After- tax | |||
Other comprehensive income (loss), after-tax | $ 1,519 | $ (3,131) | $ 98 |
SCHEDULE I - SUMMARY OF INVES_2
SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) | Dec. 31, 2020USD ($) |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | $ 5,619,067,000 |
Amount shown in the Balance Sheet | 6,313,700,000 |
U.S. government and agencies | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 134,490,000 |
Fair value (if applicable) | 144,905,000 |
Amount shown in the Balance Sheet | 144,905,000 |
Municipal | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 402,728,000 |
Fair value (if applicable) | 544,553,000 |
Amount shown in the Balance Sheet | 544,553,000 |
Foreign government | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 67,435,000 |
Fair value (if applicable) | 72,087,000 |
Amount shown in the Balance Sheet | 72,087,000 |
Public utilities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 683,019,000 |
Fair value (if applicable) | 789,742,000 |
Amount shown in the Balance Sheet | 789,742,000 |
All other corporate bonds | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 3,002,491,000 |
Fair value (if applicable) | 3,363,985,000 |
Amount shown in the Balance Sheet | 3,363,985,000 |
MBS | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 3,329,000 |
Fair value (if applicable) | 3,602,000 |
Amount shown in the Balance Sheet | 3,602,000 |
Fixed income securities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 4,293,492,000 |
Fair value (if applicable) | 4,918,874,000 |
Amount shown in the Balance Sheet | 4,918,874,000 |
Public utilities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 4,299,000 |
Fair value (if applicable) | 5,794,000 |
Amount shown in the Balance Sheet | 5,794,000 |
Banks, trusts and insurance companies | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 19,835,000 |
Fair value (if applicable) | 27,477,000 |
Amount shown in the Balance Sheet | 27,477,000 |
Industrial, miscellaneous and all other | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 156,462,000 |
Fair value (if applicable) | 215,930,000 |
Amount shown in the Balance Sheet | 215,930,000 |
Nonredeemable preferred stocks | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 1,665,000 |
Fair value (if applicable) | 2,236,000 |
Amount shown in the Balance Sheet | 2,236,000 |
Equity securities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 182,261,000 |
Fair value (if applicable) | 251,437,000 |
Amount shown in the Balance Sheet | 251,437,000 |
Mortgage loans | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 621,702,000 |
Fair value (if applicable) | 660,862,000 |
Amount shown in the Balance Sheet | 621,702,000 |
Policy loans | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 37,294,000 |
Amount shown in the Balance Sheet | 37,294,000 |
Derivatives | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 8,097,000 |
Fair value (if applicable) | 8,097,000 |
Amount shown in the Balance Sheet | 8,097,000 |
Limited partnership interests | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 343,251,000 |
Amount shown in the Balance Sheet | 343,251,000 |
Short-term investments | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 132,970,000 |
Fair value (if applicable) | 133,045,000 |
Amount shown in the Balance Sheet | 133,045,000 |
Real estate acquired in satisfaction of debt | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/ amortized cost | 0 |
Amount shown in the Balance Sheet | $ 0 |
SCHEDULE IV - REINSURANCE (Deta
SCHEDULE IV - REINSURANCE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Net [Abstract] | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Gross | $ 41,853,809,000 | $ 42,654,371,000 | $ 42,502,450,000 |
Life insurance in force ceded to unaffiliated reinsurers | 8,329,864,000 | 8,581,710,000 | 8,914,558,000 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Assumed | 416,082,000 | 436,841,000 | 455,594,000 |
Life insurance in force, Net amount | $ 33,940,027,000 | $ 34,509,502,000 | $ 34,043,486,000 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Percentage Assumed to Net | 1.20% | 1.30% | 1.30% |
Premiums and contract charges: | |||
Premiums and contract charges, Goss amount | $ 174,812,000 | $ 203,614,000 | $ 199,289,000 |
Premiums and contract charges, Ceded to other companies | 17,982,000 | 18,545,000 | 19,333,000 |
Premiums and contract charges, Assumed from other companies | 588,000 | 697,000 | 685,000 |
Premiums and contract charges, Net amount | $ 157,418,000 | $ 185,766,000 | $ 180,641,000 |
Premiums and contract charges, Percentage of amount assumed to net | 0.40% | 0.40% | 0.40% |
Reinsurance or coinsurance income netted against premiums ceded | $ 0 | $ 0 | $ 0 |
Life insurance | |||
Premiums and contract charges: | |||
Premiums and contract charges, Goss amount | 156,594,000 | 156,192,000 | 154,016,000 |
Premiums and contract charges, Ceded to other companies | 17,131,000 | 17,595,000 | 18,322,000 |
Premiums and contract charges, Assumed from other companies | 588,000 | 697,000 | 685,000 |
Premiums and contract charges, Net amount | $ 140,051,000 | $ 139,294,000 | $ 136,379,000 |
Premiums and contract charges, Percentage of amount assumed to net | 0.40% | 0.50% | 0.50% |
Accident and health insurance | |||
Premiums and contract charges: | |||
Premiums and contract charges, Goss amount | $ 18,218,000 | $ 47,422,000 | $ 45,273,000 |
Premiums and contract charges, Ceded to other companies | 851,000 | 950,000 | 1,011,000 |
Premiums and contract charges, Assumed from other companies | 0 | 0 | 0 |
Premiums and contract charges, Net amount | $ 17,367,000 | $ 46,472,000 | $ 44,262,000 |
Premiums and contract charges, Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
SCHEDULE V - VALUATION ALLOWA_2
SCHEDULE V - VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Valuation allowances and qualifying accounts | |||
Cumulative effect of change in accounting principle | $ 621 | ||
Allowance for credit losses on fixed income securities | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | $ 0 | ||
Cumulative effect of change in accounting principle | 0 | ||
Additions charged to costs and expenses | 255 | ||
Additions other additions | 0 | ||
Deductions | 255 | ||
Balance as of end of period | 0 | 0 | |
Allowance for credit losses on mortgage loans | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 0 | 0 | $ 0 |
Cumulative effect of change in accounting principle | 6,129 | ||
Additions charged to costs and expenses | 9,691 | 0 | 0 |
Additions other additions | 0 | 0 | 0 |
Deductions | 4,727 | 0 | 0 |
Balance as of end of period | 11,093 | 0 | 0 |
Allowance for credit losses on reinsurance recoverables | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 34 | 0 | |
Cumulative effect of change in accounting principle | 621 | ||
Additions charged to costs and expenses | 0 | 34 | |
Additions other additions | 0 | 0 | |
Deductions | 31 | 0 | |
Balance as of end of period | 624 | 34 | $ 0 |
Allowance for credit losses on other assets | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 4,259 | ||
Cumulative effect of change in accounting principle | 0 | ||
Additions charged to costs and expenses | 0 | ||
Additions other additions | 0 | ||
Deductions | 129 | ||
Balance as of end of period | 4,130 | 4,259 | |
Allowance for credit losses on commitments to fund mortgage loans | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 0 | ||
Cumulative effect of change in accounting principle | 97 | ||
Additions charged to costs and expenses | 0 | ||
Additions other additions | 0 | ||
Deductions | 97 | ||
Balance as of end of period | $ 0 | $ 0 |