Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Carrying Value and Estimated Fair Value of Financial Instruments

A summary of the carrying value and estimated fair value of our financial instruments at March 31, 2014 and December 31, 2013 is as follows:



	March 31, 2014				December 31, 2013
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	656	$	644	$	669	$	656
Available-for-sale securities	2,805,723		2,805,723		2,751,256		2,751,256
Trading securities	16,095		16,095		9,940		9,940
Equity securities:
Available-for-sale securities	232,377		232,377		229,368		229,368
Trading securities	3,037		3,037		2,487		2,487
Mortgage loans	4,724		4,368		4,724		4,423
Policy loans	6,177		6,177		6,261		6,261
Other long-term investments	46,513		46,513		44,946		44,946
Short-term investments	800		800		800		800
Cash and cash equivalents	68,663		68,663		92,193		92,193
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	954,214	$	920,038	$	941,636	$	925,832
Annuity (benefit payments)	142,900		94,163		140,276		94,805

(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 March 31, 2014 and December 31, 2013:



March 31, 2014			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	32,755	$	—	$	32,755	$	—
U.S. government agency	308,680		—		308,680		—
States, municipalities and political subdivisions	727,596		—		726,898		698
Foreign bonds	163,739		—		163,739		—
Public utilities	215,676		—		215,676		—
Corporate bonds
Energy	160,162		—		160,162		—
Industrials	232,623		—		232,623		—
Consumer goods and services	175,741		—		174,322		1,419
Health care	85,541		—		85,541		—
Technology, media and telecommunications	121,261		—		121,261		—
Financial services	250,444		—		238,741		11,703
Mortgage-backed securities	21,105		—		21,105		—
Collateralized mortgage obligations	307,019		—		307,019		—
Asset-backed securities	3,381		—		1,468		1,913
Total Available-for-Sale Fixed Maturities	$	2,805,723	$	—	$	2,789,990	$	15,733
Equity securities
Common stocks
Public utilities	$	17,462	$	17,462	$	—	$	—
Energy	14,656		14,656		—		—
Industrials	45,449		45,430		19		—
Consumer goods and services	21,293		21,293		—		—
Health care	24,945		24,945		—		—
Technology, media and telecommunications	13,322		13,322		—		—
Financial services	90,277		86,322		64		3,891
Nonredeemable preferred stocks	4,973		1,763		3,210		—
Total Available-for-Sale Equity Securities	$	232,377	$	225,193	$	3,293	$	3,891
Total Available-for-Sale Securities	$	3,038,100	$	225,193	$	2,793,283	$	19,624
TRADING
Bonds
Foreign bonds	$	1,252	$	—	$	1,252	$	—
Corporate bonds
Industrials	1,559		—		1,559		—
Consumer goods and services	1,096		—		1,096		—
Health care	2,172		—		2,172		—



Technology, media and telecommunications	2,925		—		2,925		—
Financial services	3,493		—		3,493		—
Redeemable preferred stocks	3,598		3,598		—		—
Equity securities
Energy	544		544		—		—
Consumer goods and services	30		30		—		—
Health care	383		383		—		—
Technology, media and telecommunications	379		379		—		—
Nonredeemable preferred stocks	1,701		1,701		—		—
Total Trading Securities	$	19,132	$	6,635	$	12,497	$	—
Short-Term Investments	$	800	$	800	$	—	$	—
Money Market Accounts	$	16,259	$	16,259	$	—	$	—
Total Assets Measured at Fair Value	$	3,074,291	$	248,887	$	2,805,780	$	19,624



December 31, 2013			Fair Value Measurements
Description	Total		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

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 March 31, 2014:



	States, municipalities and political subdivisions		Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2014	$	698	$	13,480		$	2,029		$	3,781		$	19,988
Unrealized losses⁽¹⁾	—		(62		)	(5		)	—			(67		)
Purchases	—		—			—			144			144
Disposals	—		(296		)	(111		)	(34		)	(441		)
Balance at March 31, 2014	$	698	$	13,122		$	1,913		$	3,891		$	19,624

(1) 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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