Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Carrying Value and Estimated Fair Value of Financial Instruments

A summary of the carrying value and estimated fair value of our financial instruments at September 30, 2015 and December 31, 2014 is as follows:



	September 30, 2015				December 31, 2014
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	291	$	289	$	404	$	397
Available-for-sale securities	2,790,417		2,790,417		2,843,079		2,843,079
Trading securities	12,918		12,918		16,862		16,862
Equity securities:
Available-for-sale securities	227,689		227,689		245,843		245,843
Trading securities	4,097		4,097		4,066		4,066
Mortgage loans	4,326		4,022		4,559		4,199
Policy loans	5,569		5,569		5,916		5,916
Other long-term investments	51,278		51,278		50,424		50,424
Short-term investments	175		175		175		175
Cash and cash equivalents	124,061		124,061		90,574		90,574
Corporate-owned life insurance	1,545		1,545		918		918
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	761,998	$	765,907	$	865,802	$	863,606
Annuity (benefit payments)	129,683		95,017		176,592		99,121

(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 September 30, 2015 and December 31, 2014:



September 30, 2015			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	21,922	$	—	$	21,922	$	—
U.S. government agency	237,247		—		237,247		—
States, municipalities and political subdivisions
General obligations
Midwest	170,810		—		170,810		—
Northeast	58,467		—		58,467		—
South	127,538		—		127,538		—
West	101,296		—		101,296		—
Special revenue
Midwest	152,763		—		152,333		430
Northeast	21,786		—		21,786		—
South	107,241		—		107,241		—
West	77,291		—		77,291		—
Foreign bonds	91,188		—		91,188		—
Public utilities	206,191		—		206,191		—
Corporate bonds
Energy	114,357		—		114,357		—
Industrials	227,204		—		227,204		—
Consumer goods and services	183,380		—		182,098		1,282
Health care	98,256		—		98,256		—
Technology, media and telecommunications	146,743		—		146,743		—
Financial services	255,961		—		245,693		10,268
Mortgage-backed securities	14,515		—		14,515		—
Collateralized mortgage obligations	370,616		—		370,616		—
Asset-backed securities	5,645		—		4,453		1,192
Total Available-for-Sale Fixed Maturities	$	2,790,417	$	—	$	2,777,245	$	13,172
Equity securities:
Common stocks
Public utilities	$	18,498	$	18,498	$	—	$	—
Energy	11,372		11,372		—		—
Industrials	41,417		41,416		1		—
Consumer goods and services	21,784		21,784		—		—
Health care	25,695		25,695		—		—
Technology, media and telecommunications	12,739		12,739		—		—
Financial services	91,753		87,656		119		3,978
Nonredeemable preferred stocks	4,431		562		3,869		—
Total Available-for-Sale Equity Securities	$	227,689	$	219,722	$	3,989	$	3,978



Total Available-for-Sale Securities	$	3,018,106	$	219,722	$	2,781,234	$	17,150
TRADING
Fixed maturities:
Corporate bonds
Industrials	$	3,559	$	—	$	3,559	$	—
Consumer goods and services	118		—		118		—
Health care	1,862		—		1,862		—
Technology, media and telecommunications	307		—		307		—
Financial services	4,177		—		4,177		—
Redeemable preferred stocks	2,895		2,895		—		—
Equity securities:
Energy	257		257		—		—
Industrials	913		913		—		—
Consumer goods and services	901		901		—		—
Health care	285		285		—		—
Financial services	222		222		—		—
Nonredeemable preferred stocks	1,519		1,519		—		—
Total Trading Securities	$	17,015	$	6,992	$	10,023	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	41,002	$	41,002	$	—	$	—
Corporate-Owned Life Insurance	$	1,545	$	—	$	1,545	$	—
Total Assets Measured at Fair Value	$	3,077,843	$	267,891	$	2,792,802	$	17,150



December 31, 2014			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	25,972	$	—	$	25,972	$	—
U.S. government agency	351,672		—		351,672		—
States, municipalities and political subdivisions
General obligations
Midwest	185,920		—		185,920		—
Northeast	61,154		—		61,154		—
South	126,220		—		126,220		—
West	78,433		—		78,433		—
Special revenue
Midwest	131,402		—		130,883		519
Northeast	12,631		—		12,631		—
South	111,222		—		111,222		—
West	71,303		—		71,303		—
Foreign bonds	140,173		—		140,173		—
Public utilities	212,357		—		212,357		—
Corporate bonds
Energy	137,133		—		137,133		—
Industrials	215,475		—		215,475		—
Consumer goods and services	177,001		—		175,682		1,319
Health care	89,035		—		89,035		—
Technology, media and telecommunications	134,529		—		134,529		—
Financial services	223,582		—		212,589		10,993
Mortgage-backed securities	17,558		—		17,558		—
Collateralized mortgage obligations	337,289		—		337,289		—
Asset-backed securities	3,018		—		1,406		1,612
Total Available-for-Sale Fixed Maturities	$	2,843,079	$	—	$	2,828,636	$	14,443
Equity securities:
Common stocks
Public utilities	$	20,290	$	20,290	$	—	$	—
Energy	13,717		13,717		—		—
Industrials	45,459		45,458		1		—
Consumer goods and services	23,314		23,314		—		—
Health care	30,356		30,356		—		—
Technology, media and telecommunications	13,995		13,995		—		—
Financial services	93,663		89,719		72		3,872
Nonredeemable preferred stocks	5,049		558		4,491		—
Total Available-for-Sale Equity Securities	$	245,843	$	237,407	$	4,564	$	3,872
Total Available-for-Sale Securities	$	3,088,922	$	237,407	$	2,833,200	$	18,315



TRADING
Fixed maturities:
Bonds
Corporate bonds
Industrials	$	3,352	$	—	$	3,352	$	—
Health care	2,425		—		2,425		—
Technology, media and telecommunications	338		—		338		—
Financial services	5,997		—		5,997		—
Redeemable preferred stocks	4,750		4,750		—		—
Equity securities:
Energy	411		411		—		—
Consumer goods and services	1,034		1,034		—		—
Health care	327		327		—		—
Technology, media and telecommunications	411		411		—		—
Nonredeemable preferred stocks	1,883		1,883		—		—
Total Trading Securities	$	20,928	$	8,816	$	12,112	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	28,095	$	28,095	$	—	$	—
Corporate-Owned Life Insurance	$	918	$	—	$	918	$	—
Total Assets Measured at Fair Value	$	3,139,038	$	274,493	$	2,846,230	$	18,315

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 September 30, 2015:



	States, municipalities and political subdivisions		Corporate bonds			Asset-backed securities			Equities		Total
Balance at June 30, 2015	$	430	$	11,944		$	1,311		$	3,978	$	17,663
Net unrealized gains (losses)⁽¹⁾	—		(87		)	17			—		(70		)
Purchases	—		100			—			—		100
Disposals	—		(407		)	(136		)	—		(543		)
Balance at September 30, 2015	$	430	$	11,550		$	1,192		$	3,978	$	17,150

(1) Unrealized gains (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 nine-month period ended September 30, 2015:



	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2015	$	519		$	12,312		$	1,612		$	3,872		$	18,315
Net unrealized gains (losses)⁽¹⁾	(14		)	62			(23		)	—			25
Purchases	—			100			—			121			221
Disposals	(75		)	(924		)	(397		)	(15		)	(1,411		)
Balance at September 30, 2015	$	430		$	11,550		$	1,192		$	3,978		$	17,150

(1) Unrealized gains (losses) are recorded as a component of comprehensive income.