Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 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 September 30, 2016 and December 31, 2015 is as follows:



	September 30, 2016				December 31, 2015
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	655	$	652	$	675	$	672
Available-for-sale securities	2,916,464		2,916,464		2,824,961		2,824,961
Trading securities	13,253		13,253		12,622		12,622
Equity securities:
Available-for-sale securities	251,101		251,101		236,247		236,247
Trading securities	4,645		4,645		4,353		4,353
Mortgage loans	4,063		3,772		4,237		3,961
Policy loans	5,300		5,300		5,618		5,618
Other long-term investments	57,787		57,787		54,151		54,151
Short-term investments	175		175		175		175
Cash and cash equivalents	140,944		140,944		106,449		106,449
Corporate-owned life insurance	2,406		2,406		1,716		1,716
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	702,251	$	685,591	$	707,190	$	744,931
Annuity (benefit payments)	142,013		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 September 30, 2016 and December 31, 2015:



September 30, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	22,246	$	—	$	22,246	$	—
U.S. government agency	74,607		—		74,607		—
States, municipalities and political subdivisions
General obligations
Midwest	158,362		—		158,362		—
Northeast	61,209		—		61,209		—
South	136,973		—		136,973		—
West	128,296		—		128,296		—
Special revenue
Midwest	168,111		—		167,857		254
Northeast	55,874		—		55,874		—
South	215,604		—		215,604		—
West	104,110		—		104,110		—
Foreign bonds	73,601		—		73,601		—
Public utilities	228,126		—		228,126		—
Corporate bonds



Energy	113,905		—		113,905		—
Industrials	243,612		—		243,612		—
Consumer goods and services	188,924		—		187,779		1,145
Health care	87,425		—		87,425		—
Technology, media and telecommunications	147,655		—		147,655		—
Financial services	278,818		—		269,636		9,182
Mortgage-backed securities	18,879		—		18,879		—
Collateralized mortgage obligations
Government national mortgage association	135,546		—		135,546		—
Federal home loan mortgage corporation	158,743		—		158,743		—
Federal national mortgage association	111,260		—		111,260		—
Asset-backed securities	4,578		—		3,906		672
Total Available-for-Sale Fixed Maturities	$	2,916,464	$	—	$	2,905,211	$	11,253
Equity securities:
Common stocks
Public utilities	$	19,914	$	19,914	$	—	$	—
Energy	14,463		14,463		—		—
Industrials	47,424		47,424		—		—
Consumer goods and services	25,340		25,340		—		—
Health care	28,863		28,863		—		—
Technology, media and telecommunications	15,108		15,108		—		—
Financial services	99,517		95,525		—		3,992
Nonredeemable preferred stocks	472		472		—		—
Total Available-for-Sale Equity Securities	$	251,101	$	247,109	$	—	$	3,992
Total Available-for-Sale Securities	$	3,167,565	$	247,109	$	2,905,211	$	15,245
TRADING
Fixed maturities:
Corporate bonds
Industrials	$	3,833	$	—	$	3,833	$	—
Consumer goods and services	538		—		538		—
Health care	2,794		—		2,794		—
Technology, media and telecommunications	810		—		810		—
Financial services	4,155		—		4,155		—
Asset-backed securities	—		—		—		—
Redeemable preferred stocks	1,123		1,123		—		—
Equity securities:
Public utilities	594		594		—		—
Energy	287		287		—		—
Industrials	812		812		—		—



Consumer goods and services	788		788		—		—
Health care	361		361		—		—
Financial services	232		232		—		—
Nonredeemable preferred stocks	1,571		1,571		—		—
Total Trading Securities	$	17,898	$	5,768	$	12,130	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	58,262	$	58,262	$	—	$	—
Corporate-Owned Life Insurance	$	2,406	$	—	$	2,406	$	—
Total Assets Measured at Fair Value	$	3,246,306	$	311,314	$	2,919,747	$	15,245



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 September 30, 2016:



	States, municipalities and political subdivisions		Corporate bonds			Asset-backed securities			Equities		Total
Balance at June 30, 2016	$	254	$	10,500		$	807		$	3,992	$	15,553
Net unrealized gains (losses)⁽¹⁾	—		156			22			—		178
Disposals	—		(329		)	(157		)	—		(486		)
Balance at September 30, 2016	$	254	$	10,327		$	672		$	3,992	$	15,245

(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, 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		)	318			91			—			400
Purchases	—			—			—			132			132
Disposals	(80		)	(886		)	(455		)	(118		)	(1,539		)
Balance at September 30, 2016	$	254		$	10,327		$	672		$	3,992		$	15,245

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