Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Carrying Value and Estimated Fair Value of Financial Instruments

A summary of the carrying value and estimated fair value of our financial instruments at June 30, 2013 and December 31, 2012 is as follows:



	June 30, 2013				December 31, 2012
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	1,499	$	1,477	$	1,681	$	1,655
Available-for-sale securities	2,764,816		2,764,816		2,808,078		2,808,078
Trading securities	12,551		12,551		13,353		13,353
Equity securities:
Available-for-sale securities	197,157		197,157		177,127		177,127
Trading securities	1,981		1,981		2,018		2,018
Mortgage loans	4,526		4,529		5,037		4,633
Policy loans	6,369		6,369		6,671		6,671
Other long-term investments	33,623		33,623		30,028		30,028
Short-term investments	800		800		800		800
Cash and cash equivalents	80,789		80,789		107,466		107,466
Accrued investment income	29,381		29,381		30,375		30,375
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	976,656	$	948,362	$	1,043,866	$	983,579
Annuity (benefit payments)	135,075		92,224		139,213		93,701

(1) Annuity accumulations represent deferred annuity contracts that are currently earning interest.

Financial Instruments Measured at Fair Value on Recurring Basis

The following tables present the categorization for our financial instruments measured at fair value on a recurring basis in our Consolidated Balance Sheets at June 30, 2013 and December 31, 2012:



			Fair Value Measurements
Description	June 30, 2013		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	36,294	$	—	$	36,294	$	—
U.S. government agency	150,180		—		150,180		—
States, municipalities and political subdivisions	752,052		—		751,264		788
Foreign bonds	197,633		—		197,633		—
Public utilities	237,151		—		237,151		—
Corporate bonds
Energy	166,081		—		166,081		—
Industrials	251,357		—		248,261		3,096
Consumer goods and services	186,179		—		184,651		1,528
Health care	108,989		—		108,989		—
Technology, media and telecommunications	131,686		—		131,686		—
Financial services	259,455		—		246,333		13,122
Mortgage-backed securities	26,307		—		26,307		—
Collateralized mortgage obligations	256,747		—		256,747		—
Asset-backed securities	4,323		—		2,012		2,311
Redeemable preferred stocks	382		382		—		—
Total Available-for-Sale Fixed Maturities	$	2,764,816	$	382	$	2,743,589	$	20,845
Equity securities
Common stocks
Public utilities	$	15,857	$	15,857	$	—	$	—
Energy	12,798		12,798		—		—
Industrials	36,094		36,070		24		—
Consumer goods and services	19,209		19,202		7		—
Health care	21,158		21,158		—		—
Technology, media and telecommunications	12,654		12,654		—		—
Financial services	77,663		73,806		48		3,809
Nonredeemable preferred stocks	1,724		1,724		—		—
Total Available-for-Sale Equity Securities	$	197,157	$	193,269	$	79	$	3,809
Total Available-for-Sale Securities	$	2,961,973	$	193,651	$	2,743,668	$	24,654
TRADING
Bonds
Foreign bonds	$	1,264	$	—	$	1,264	$	—
Corporate bonds
Industrials	1,182		—		1,182		—
Consumer goods and services	1,543		—		1,543		—



Health care	905		—		905		—
Technology, media and telecommunications	2,815		—		2,815		—
Financial services	1,599		—		1,599		—
Redeemable preferred stocks	3,243		3,243		—		—
Equity securities - health care	309		309		—		—
Nonredeemable preferred stocks	1,672		1,672		—		—
Total Trading Securities	$	14,532	$	5,224	$	9,308	$	—
Short-Term Investments	$	800	$	800	$	—	$	—
Money Market Accounts	$	25,591	$	25,591	$	—	$	—
Total Assets Measured at Fair Value	$	3,002,896	$	225,266	$	2,752,976	$	24,654



			Fair Value Measurements
Description	December 31, 2012		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	38,821	$	—	$	38,821	$	—
U.S. government agency	45,928		—		45,928		—
States, municipalities and political subdivisions	794,505		—		793,755		750
Foreign bonds	219,160		—		218,602		558
Public utilities	247,726		—		247,726		—
Corporate bonds
Energy	179,731		—		179,731		—
Industrials	293,663		—		290,766		2,897
Consumer goods and services	202,975		—		201,633		1,342
Health care	122,685		—		122,685		—
Technology, media and telecommunications	130,371		—		130,371		—
Financial services	283,860		—		271,991		11,869
Mortgage-backed securities	28,807		—		28,807		—
Collateralized mortgage obligations	214,584		—		214,584		—
Asset-backed securities	4,886		—		2,398		2,488
Redeemable preferred stocks	376		376		—		—
Total Available-for-Sale Fixed Maturities	$	2,808,078	$	376	$	2,787,798	$	19,904
Equity securities
Common stocks
Public utilities	$	14,416	$	14,416	$	—	$	—
Energy	11,997		11,997		—		—
Industrials	32,684		32,658		26		—
Consumer goods and services	18,879		18,879		—		—
Health care	18,081		18,081		—		—
Technology, media and telecommunications	10,427		10,427		—		—
Financial services	68,492		64,800		56		3,636
Nonredeemable preferred stocks	2,151		1,906		245		—
Total Available-for-Sale Equity Securities	$	177,127	$	173,164	$	327	$	3,636
Total Available-for-Sale Securities	$	2,985,205	$	173,540	$	2,788,125	$	23,540
TRADING
Bonds
Foreign bonds	$	1,379	$	—	$	1,379	$	—
Corporate bonds
Industrials	1,299		—		1,299		—
Consumer goods and services	1,532		—		1,532		—
Health care	1,824		—		1,824		—
Technology, media and telecommunications	2,250		—		2,250		—



Financial services	1,486		—		1,486		—
Redeemable preferred stocks	3,583		3,583		—		—
Equity securities - health care	303		303		—		—
Nonredeemable preferred stocks	1,715		1,715		—		—
Total Trading Securities	$	15,371	$	5,601	$	9,770	$	—
Short-Term Investments	$	800	$	800	$	—	$	—
Money Market Accounts	$	45,613	$	45,613	$	—	$	—
Total Assets Measured at Fair Value	$	3,046,989	$	225,554	$	2,797,895	$	23,540

Changes in Fair Value of Level 3 Securities

The following table provides a summary of the changes in fair value of our Level 3 securities for the three-month period ended June 30, 2013:



	States, municipalities and political subdivisions			Foreign bonds			Corporate bonds			Asset-backed securities			Equities		Total
Balance at March 31, 2013	$	875		$	621		$	18,085		$	2,441		$	3,636	$	25,658
Realized gains ⁽¹⁾	—			35			—			—			—		35
Unrealized losses⁽¹⁾	(22		)	(50		)	(162		)	(26		)	—		(260		)
Purchases	—			—			—			—			173		173
Disposals	(65		)	(606		)	(177		)	(104		)	—		(952		)
Balance at June 30, 2013	$	788		$	—		$	17,746		$	2,311		$	3,809	$	24,654

(1) Realized gains are recorded as a component of earnings whereas unrealized losses are recorded as a component of comprehensive income.

The following table provides a summary of the changes in fair value of our Level 3 securities for the six-month period ended June 30, 2013:



	States, municipalities and political subdivisions			Foreign bonds			Corporate bonds			Asset-backed securities			Equities		Total
Balance at December 31, 2012	$	750		$	558		$	16,108		$	2,488		$	3,636	$	23,540
Realized gains ⁽¹⁾	—			35			—			—			—		35
Unrealized gains⁽¹⁾	103			13			2,087			20			—		2,223
Purchases	—			—			—			—			173		173
Disposals	(65		)	(606		)	(449		)	(197		)	—		(1,317		)
Balance at June 30, 2013	$	788		$	—		$	17,746		$	2,311		$	3,809	$	24,654

(1) Realized gains are recorded as a component of earnings, whereas unrealized gains are recorded as a component of comprehensive income.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

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-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

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Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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