FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2013 and 2012 is as follows:



	December 31, 2013				December 31, 2012
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	669	$	656	$	1,681	$	1,655
Available-for-sale securities	2,751,256		2,751,256		2,808,078		2,808,078
Trading securities	9,940		9,940		13,353		13,353
Equity securities:
Available-for-sale securities	229,368		229,368		177,127		177,127
Trading securities	2,487		2,487		2,018		2,018
Mortgage loans	4,724		4,423		5,037		4,633
Policy loans	6,261		6,261		6,671		6,671
Other long-term investments	44,946		44,946		30,028		30,028
Short-term investments	800		800		800		800
Cash and cash equivalents	92,193		92,193		107,466		107,466
Accrued investment income	27,923		27,923		30,375		30,375
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	941,636	$	925,832	$	1,043,866	$	983,579
Annuity (benefit payments)	140,276		94,805		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 December 31, 2013 and 2012:



			Fair Value Measurements
Description	December 31, 2013		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	33,895	$	—	$	33,895	$	—
U.S. government agency	269,583		—		269,583		—
States, municipalities and political subdivisions	713,907		—		713,209		698
Foreign bonds	172,856		—		172,856		—
Public utilities	218,576		—		218,576		—
Corporate bonds
Energy	161,010		—		161,010		—
Industrials	237,028		—		237,028		—
Consumer goods and services	167,914		—		166,460		1,454
Health care	92,946		—		92,946		—
Technology, media and telecommunications	120,966		—		120,966		—
Financial services	241,751		—		229,725		12,026
Mortgage-backed securities	22,066		—		22,066		—
Collateralized mortgage obligations	294,763		—		294,763		—
Asset-backed securities	3,995		—		1,966		2,029
Total Available-For-Sale Fixed Maturities	$	2,751,256	$	—	$	2,735,049	$	16,207
Equity securities
Common stocks
Public utilities	$	16,272	$	16,272	$	—	$	—
Energy	14,363		14,363		—		—
Industrials	46,099		46,083		16		—
Consumer goods and services	21,258		21,258		—		—
Health care	24,998		24,998		—		—
Technology, media and telecommunications	13,304		13,304		—		—
Financial services	88,262		84,419		62		3,781
Nonredeemable preferred stocks	4,812		1,714		3,098		—
Total Available-for-Sale Equity Securities	$	229,368	$	222,411	$	3,176	$	3,781
Total Available-for-Sale Securities	$	2,980,624	$	222,411	$	2,738,225	$	19,988
TRADING
Bonds
Foreign bonds	$	1,253	$	—	$	1,253	$	—
Corporate bonds
Industrials	1,122		—		1,122		—
Consumer goods and services	106		—		106		—
Health care	1,154		—		1,154		—
Technology, media and telecommunications	2,054		—		2,054		—
Financial services	1,866		—		1,866		—
Redeemable preferred stocks	2,385		2,385		—		—



Equity securities
Energy	563		563		—		—
Consumer goods and services	39		39		—		—
Health care	332		332		—		—
Nonredeemable preferred stocks	1,553		1,553		—		—
Total Trading Securities	$	12,427	$	4,872	$	7,555	$	—
Short-Term Investments	$	800	$	800	$	—	$	—
Money Market Accounts	$	37,811	$	37,811	$	—	$	—
Total Assets Measured at Fair Value	$	3,031,662	$	265,894	$	2,745,780	$	19,988



			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 2013:



	States, municipalities and political subdivisions			Foreign bonds			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2013	$	750		$	558		$	16,108		$	2,488		$	3,636		$	23,540
Realized gains ⁽¹⁾	—			35			—			—			—			35
Unrealized gains (losses) ⁽¹⁾	83			14			1,277			(53		)	(28		)	1,293
Purchases	—			—			105			—			173			278
Disposals	(135		)	(607		)	(4,010		)	(406		)	—			(5,158		)
Balance at December 31, 2013	$	698		$	—		$	13,480		$	2,029		$	3,781		$	19,988

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

The fixed maturities reported as disposals relate to the receipt of principal on scheduled calls.

The following table provides a summary of the changes in fair value of our Level 3 securities for 2012:



(In Thousands)	States, municipalities and political subdivisions			Foreign bonds			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2012	$	880		$	836		$	20,285		$	315		$	3,526		$	25,842
Realized gains ⁽¹⁾	—			—			646			—			—			646
Unrealized gains (losses) ⁽¹⁾	—			7			(352		)	(13		)	(23		)	(381		)
Purchases	—			—			5			—			179			184
Disposals	(130		)	(285		)	(4,476		)	(121		)	(50		)	(5,062		)
Transfers in	—			—			—			2,307			52			2,359
Transfers out	—			—			—			—			(48		)	(48		)
Balance at December 31, 2012	$	750		$	558		$	16,108		$	2,488		$	3,636		$	23,540

(1) Realized gains (losses) are recorded as a component of earnings whereas unrealized gains (losses) 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, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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