Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

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, 2016 and December 31, 2015 is as follows:



	June 30, 2016				December 31, 2015
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	660	$	658	$	675	$	672
Available-for-sale securities	2,942,364		2,942,364		2,824,961		2,824,961
Trading securities	12,558		12,558		12,622		12,622
Equity securities:
Available-for-sale securities	249,180		249,180		236,247		236,247
Trading securities	5,004		5,004		4,353		4,353
Mortgage loans	4,133		3,836		4,237		3,961
Policy loans	5,282		5,282		5,618		5,618
Other long-term investments	52,349		52,349		54,151		54,151
Short-term investments	175		175		175		175
Cash and cash equivalents	119,700		119,700		106,449		106,449
Corporate-owned life insurance	2,208		2,208		1,716		1,716
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	725,769	$	708,599	$	707,190	$	744,931
Annuity (benefit payments)	142,031		95,798		131,899		95,467

(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, 2016 and December 31, 2015:



June 30, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	23,217	$	—	$	23,217	$	—
U.S. government agency	106,344		—		106,344		—
States, municipalities and political subdivisions
General obligations
Midwest	152,107		—		152,107		—
Northeast	64,642		—		64,642		—
South	138,757		—		138,757		—
West	120,334		—		120,334		—
Special revenue
Midwest	172,264		—		172,010		254
Northeast	49,297		—		49,297		—
South	203,781		—		203,781		—
West	98,131		—		98,131		—
Foreign bonds	82,160		—		82,160		—
Public utilities	229,413		—		229,413		—
Corporate bonds
Energy	113,225		—		113,225		—
Industrials	251,094		—		251,094		—
Consumer goods and services	190,114		—		188,927		1,187
Health care	89,365		—		89,365		—
Technology, media and telecommunications	145,321		—		145,321		—
Financial services	281,981		—		272,668		9,313
Mortgage-backed securities	20,072		—		20,072		—
Collateralized mortgage obligations
Government national mortgage association	137,994		—		137,994		—
Federal home loan mortgage corporation	151,187		—		151,187		—
Federal national mortgage association	116,752		—		116,752		—
Asset-backed securities	4,812		—		4,005		807
Total Available-for-Sale Fixed Maturities	$	2,942,364	$	—	$	2,930,803	$	11,561
Equity securities:
Common stocks
Public utilities	$	23,283	$	23,283	$	—	$	—
Energy	14,382		14,382		—		—
Industrials	46,245		46,205		40		—
Consumer goods and services	25,489		25,489		—		—
Health care	27,968		27,968		—		—



Technology, media and telecommunications	14,925		14,925		—		—
Financial services	96,419		92,427		—		3,992
Nonredeemable preferred stocks	469		469		—		—
Total Available-for-Sale Equity Securities	$	249,180	$	245,148	$	40	$	3,992
Total Available-for-Sale Securities	$	3,191,544	$	245,148	$	2,930,843	$	15,553
TRADING
Fixed maturities:
Corporate bonds
Industrials	$	3,813	$	—	$	3,813	$	—
Consumer goods and services	391		—		391		—
Health care	2,660		—		2,660		—
Technology, media and telecommunications	491		—		491		—
Financial services	4,069		—		4,069		—
Asset-backed securities	—		—		—		—
Redeemable preferred stocks	1,134		1,134		—		—
Equity securities:
Public utilities	701		701		—		—
Energy	278		278		—		—
Industrials	820		820		—		—
Consumer goods and services	817		817		—		—
Health care	334		334		—		—
Financial services	236		236		—		—
Nonredeemable preferred stocks	1,818		1,818		—		—
Total Trading Securities	$	17,562	$	6,138	$	11,424	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	66,945	$	66,945	$	—	$	—
Corporate-Owned Life Insurance	$	2,208	$	—	$	2,208	$	—
Total Assets Measured at Fair Value	$	3,278,434	$	318,406	$	2,944,475	$	15,553



December 31, 2015			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	21,649	$	—	$	21,649	$	—
U.S. government agency	233,030		—		233,030		—
States, municipalities and political subdivisions
General obligations
Midwest	165,456		—		165,456		—
Northeast	58,445		—		58,445		—
South	128,789		—		128,789		—
West	106,814		—		106,814		—
Special revenue
Midwest	157,706		—		157,363		343
Northeast	24,599		—		24,599		—
South	148,437		—		148,437		—
West	82,041		—		82,041		—
Foreign bonds	82,528		—		82,528		—
Public utilities	215,683		—		215,683		—
Corporate bonds
Energy	113,119		—		113,119		—
Industrials	224,255		—		224,255		—
Consumer goods and services	174,597		—		173,364		1,233
Health care	93,509		—		93,509		—
Technology, media and telecommunications	142,400		—		142,400		—
Financial services	263,485		—		253,823		9,662
Mortgage-backed securities	16,738		—		16,738		—
Collateralized mortgage obligations
Government national mortgage association	119,626		—		119,626		—
Federal home loan mortgage corporation	138,909		—		138,909		—
Federal national mortgage association	107,480		—		107,480		—
Asset-backed securities	5,666		—		4,630		1,036
Total Available-for-Sale Fixed Maturities	$	2,824,961	$	—	$	2,812,687	$	12,274
Equity securities:
Common stocks
Public utilities	$	19,060	$	19,060	$	—	$	—
Energy	11,211		11,211		—		—
Industrials	44,810		44,810		—		—
Consumer goods and services	23,315		23,315		—		—
Health care	28,217		28,217		—		—
Technology, media and telecommunications	13,364		13,364		—		—
Financial services	95,694		91,588		128		3,978



Nonredeemable preferred stocks	576		576		—		—
Total Available-for-Sale Equity Securities	$	236,247	$	232,141	$	128	$	3,978
Total Available-for-Sale Securities	$	3,061,208	$	232,141	$	2,812,815	$	16,252
TRADING
Fixed maturities:
Bonds
Corporate bonds
Industrials	$	3,558	$	—	$	3,558	$	—
Consumer goods and services	118		—		118		—
Health care	2,032		—		2,032		—
Technology, media and telecommunications	335		—		335		—
Financial services	4,094		—		4,094		—
Redeemable preferred stocks	2,485		2,485		—		—
Equity securities:
Energy	267		267		—		—
Industrials	986		986		—		—
Consumer goods and services	942		942		—		—
Health care	304		304		—		—
Financial services	229		229		—		—
Nonredeemable preferred stocks	1,625		1,625		—		—
Total Trading Securities	$	16,975	$	6,838	$	10,137	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	20,805	$	20,805	$	—	$	—
Corporate-Owned Life Insurance	$	1,716	$	—	$	1,716	$	—
Total Assets Measured at Fair Value	$	3,100,879	$	259,959	$	2,824,668	$	16,252

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, 2016:



	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities			Equities		Total
Balance at March 31, 2016	$	344		$	10,716		$	925		$	3,992	$	15,977
Net unrealized gains (losses)⁽¹⁾	(10		)	25			34			—		49
Disposals	(80		)	(241		)	(152		)	—		(473		)
Balance at June 30, 2016	$	254		$	10,500		$	807		$	3,992	$	15,553

(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 six-month period ended June 30, 2016:



	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2016	$	343		$	10,895		$	1,036		$	3,978		$	16,252
Net unrealized gains (losses)⁽¹⁾	(9		)	162			69			—			222
Purchases	—			—			—			132			132
Disposals	(80		)	(557		)	(298		)	(118		)	(1,053		)
Balance at June 30, 2016	$	254		$	10,500		$	807		$	3,992		$	15,553

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