Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Carrying Value and Estimated Fair Value of Financial Instruments

A summary of the carrying value and estimated fair value of our financial instruments from continuing operations at September 30, 2017 and December 31, 2016 is as follows:



	September 30, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	150	$	150	$	150	$	150
Available-for-sale securities	1,498,662		1,498,662		1,453,286		1,453,286
Trading securities	13,673		13,673		14,390		14,390
Equity securities:
Available-for-sale securities	269,341		269,341		246,370		246,370
Trading securities	6,330		6,330		5,644		5,644
Other long-term investments	49,966		49,966		51,769		51,769
Short-term investments	175		175		175		175
Cash and cash equivalents	98,610		98,610		89,194		89,194
Corporate-owned life insurance	3,759		3,759		2,592		2,592

A summary of the carrying value and estimated fair value of our financial instruments from discontinued operations at September 30, 2017 and December 31, 2016 is as follows:



	September 30, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	39	$	38	$	49	$	48
Available-for-sale securities	1,426,991		1,426,991		1,444,840		1,444,840
Equity securities:
Available-for-sale securities	22,616		22,616		24,046		24,046
Mortgage loans	3,690		3,504		3,895		3,706
Policy loans	5,770		5,770		5,366		5,366
Other long-term investments	16,299		16,299		15,780		15,870
Cash and cash equivalents	30,751		30,751		21,659		21,659
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	617,819	$	620,037	$	646,764	$	666,711
Annuity (benefit payments)	144,901		95,086		144,283		95,129

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. The table includes financial instruments from both continuing and discontinued operations at September 30, 2017 and December 31, 2016:



September 30, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	21,981	$	—	$	21,981	$	—
U.S. government agency	99,525		—		99,525		—
States, municipalities and political subdivisions
General obligations
Midwest	122,438		—		122,438		—
Northeast	51,579		—		51,579		—
South	143,425		—		143,425		—
West	114,646		—		114,646		—
Special revenue
Midwest	154,786		—		154,709		77
Northeast	79,425		—		79,425		—
South	262,588		—		262,588		—
West	158,358		—		158,358		—
Foreign bonds	56,207		—		56,207		—
Public utilities	205,756		—		205,756		—
Corporate bonds
Energy	98,645		—		98,645		—
Industrials	214,290		—		214,290		—
Consumer goods and services	186,385		—		185,686		699
Health care	78,375		—		78,375		—
Technology, media and telecommunications	146,139		—		146,139		—
Financial services	259,009		—		250,992		8,017
Mortgage-backed securities	14,486		—		14,486		—
Collateralized mortgage obligations
Government national mortgage association	154,730		—		154,730		—
Federal home loan mortgage corporation	190,524		—		190,524		—
Federal national mortgage association	107,734		—		107,734		—
Asset-backed securities	4,622		—		3,991		631
Total Available-for-Sale Fixed Maturities	$	2,925,653	$	—	$	2,916,229	$	9,424
Equity securities:
Common stocks
Public utilities	$	22,086	$	22,086	$	—	$	—
Energy	14,406		14,406		—		—
Industrials	62,843		62,843		—		—
Consumer goods and services	24,788		24,788		—		—
Health care	37,226		37,226		—		—



Technology, media and telecommunications	16,085		16,085		—		—
Financial services	113,370		113,370		—		—
Nonredeemable preferred stocks	1,153		419		—		734
Total Available-for-Sale Equity Securities	$	291,957	$	291,223	$	—	$	734
Total Available-for-Sale Securities	$	3,217,610	$	291,223	$	2,916,229	$	10,158
TRADING
Fixed maturities:
Corporate bonds
Industrials	$	2,117	$	—	$	2,117	$	—
Consumer goods and services	289		—		289		—
Health care	3,557		—		3,557		—
Technology, media and telecommunications	1,373		—		1,373		—
Financial services	4,780		—		4,780		—
Redeemable preferred stocks	1,557		1,557		—		—
Equity securities:
Public utilities	831		831		—		—
Energy	206		206		—		—
Industrials	900		900		—		—
Consumer goods and services	1,209		1,209		—		—
Health care	369		369		—		—
Financial services	218		218		—		—
Nonredeemable preferred stocks	2,597		2,597		—		—
Total Trading Securities	$	20,003	$	7,887	$	12,116	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	13,897	$	13,897	$	—	$	—
Corporate-Owned Life Insurance	$	3,759	$	—	$	3,759	$	—
Total Assets Measured at Fair Value	$	3,255,444	$	313,182	$	2,932,104	$	10,158



December 31, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	23,195	$	—	$	23,195	$	—
U.S. government agency	77,597		—		77,597		—
States, municipalities and political subdivisions
General obligations
Midwest	144,143		—		144,143		—
Northeast	58,409		—		58,409		—
South	128,369		—		128,369		—
West	113,731		—		113,731		—
Special revenue
Midwest	168,310		—		168,142		168
Northeast	68,065		—		68,065		—
South	239,187		—		239,187		—
West	131,744		—		131,744		—
Foreign bonds	65,234		—		65,234		—
Public utilities	215,674		—		215,674		—
Corporate bonds
Energy	108,860		—		108,860		—
Industrials	229,903		—		229,903		—
Consumer goods and services	181,687		—		180,590		1,097
Health care	83,123		—		83,123		—
Technology, media and telecommunications	144,612		—		144,612		—
Financial services	273,951		—		265,154		8,797
Mortgage-backed securities	17,248		—		17,248		—
Collateralized mortgage obligations
Government national mortgage association	144,460		—		144,460		—
Federal home loan mortgage corporation	174,458		—		174,458		—
Federal national mortgage association	101,896		—		101,896		—
Asset-backed securities	4,270		—		3,821		449
Total Available-for-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities:
Common stocks
Public utilities	$	19,671	$	19,671	$	—	$	—
Energy	15,047		15,047		—		—
Industrials	51,794		51,794		—		—
Consumer goods and services	24,117		24,117		—		—
Health care	27,420		27,420		—		—
Technology, media and telecommunications	15,369		15,369		—		—
Financial services	115,950		111,958		—		3,992



Nonredeemable preferred stocks	1,048		453		—		595
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities:
Bonds
Corporate bonds
Industrials	$	3,919	$	—	$	3,919	$	—
Consumer goods and services	127		—		127		—
Health care	3,410		—		3,410		—
Technology, media and telecommunications	787		—		787		—
Financial services	4,842		—		4,842		—
Redeemable preferred stocks	1,305		1,305		—		—
Equity securities:
Public utilities	613		613		—		—
Energy	286		286		—		—
Industrials	877		877		—		—
Consumer goods and services	1,202		1,202		—		—
Health care	339		339		—		—
Financial services	206		206		—		—
Nonredeemable preferred stocks	2,121		2,121		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

The following tables are a reconciliation for both continuing and discontinued operations of the presentation of the categorization for our financial instruments measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016:



September 30, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,498,662	$	—	$	1,497,931	$	731
Discontinued operations	1,426,991		—		1,418,298		8,693
Total Available-for-Sale Fixed Maturities	$	2,925,653	$	—	$	2,916,229	$	9,424
Equity securities:
Continuing operations	$	269,341	$	268,607	$	—	$	734
Discontinued operations	22,616		22,616		—		—
Total Available-for-Sale Equity Securities	$	291,957	$	291,223	$	—	$	734
Total Available-for-Sale Securities	$	3,217,610	$	291,223	$	2,916,229	$	10,158
TRADING
Fixed maturities:
Continuing operations	$	13,673	$	1,557	$	12,116	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	6,330		6,330		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	20,003	$	7,887	$	12,116	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		$	—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	13,203	$	13,203	$	—	$	—
Discontinued operations	694		694		—		—
Money Market Accounts	$	13,897	$	13,897	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	3,759	$	—	$	3,759	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	3,759	$	—	$	3,759	$	—
Total Assets Measured at Fair Value	$	3,255,444	$	313,182	$	2,932,104	$	10,158



December 31, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,453,286	$	—	$	1,452,737	$	549
Discontinued operations	1,444,840		—		1,434,878		9,962
Total Available-for-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities:
Continuing operations	$	246,370	$	243,627	$	—	$	2,743
Discontinued operations	24,046		22,202		—		1,844
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities:
Continuing operations	$	14,390	$	1,305	$	13,085	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	5,644		5,644		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	4,810	$	4,810	$	—	$	—
Discontinued operations	11,992		11,992		—		—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	2,592	$	—	$	2,592	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

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, from both continuing and discontinued operations for the three-month period ended September 30, 2017:



	States, municipalities and political subdivisions		Corporate bonds			Asset-backed securities		Equities		Total
Balance at June 30, 2017	$	77	$	9,056		$	622	$	595	$	10,350
Net unrealized gains (losses)⁽¹⁾	—		(7		)	9		139		141
Purchases	—		100			—		—		100
Disposals	—		(433		)	—		—		(433		)
Balance at September 30, 2017	$	77	$	8,716		$	631	$	734	$	10,158

(1) Net 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, from both continuing and discontinued operations for the nine-month period ended September 30, 2017:



	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities		Equities			Total
Balance at January 1, 2017	$	168		$	9,894		$	449	$	4,587		$	15,098
Net unrealized gains (losses)⁽¹⁾	(6		)	(6		)	182		139			309
Purchases	—			100			—		145			245
Disposals	(85		)	(1,272		)	—		(4,137		)	(5,494		)
Balance at September 30, 2017	$	77		$	8,716		$	631	$	734		$	10,158

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