Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2018

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 March 31, 2018 and December 31, 2017 is as follows:



	March 31, 2018				December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	150	$	150	$	150	$	150
Available-for-sale securities	1,563,996		1,563,996		1,535,070		1,535,070
Trading securities	15,379		15,379		16,842		16,842
Equity securities	280,362		280,362		287,344		287,344
Other long-term investments	44,998		44,998		49,352		49,352
Short-term investments	175		175		175		175
Cash and cash equivalents	316,852		316,852		95,562		95,562
Corporate-owned life insurance	4,404		4,404		4,029		4,029

A summary of the carrying value and estimated fair value of our financial instruments from discontinued operations at March 31, 2018 and December 31, 2017 is as follows:



	March 31, 2018				December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	—	$	—	$	34	$	34
Available-for-sale securities	—		—		1,430,025		1,430,025
Equity securities:
Available-for-sale securities	—		—		23,653		23,653
Mortgage loans	—		—		3,594		3,435
Policy loans	—		—		5,815		5,815
Other long-term investments	—		—		16,437		16,437
Cash and cash equivalents	—		—		15,851		15,851
Liabilities
Policy reserves
Annuity (accumulations) ⁽¹⁾	$	—	$	—	$	591,702	$	611,866
Annuity (benefit payments)	—		—		147,038		93,560

Note: The sale of our life insurance business was completed on March 30, 2018.

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 March 31, 2018 and December 31, 2017:



March 31, 2018			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	15,726	$	—	$	15,726	$	—
U.S. government agency	134,429		—		134,429		—
States, municipalities and political subdivisions
General obligations
Midwest	105,335		—		105,335		—
Northeast	46,404		—		46,404		—
South	133,719		—		133,719		—
West	112,331		—		112,331		—
Special revenue
Midwest	144,130		—		144,130		—
Northeast	63,058		—		63,058		—
South	248,060		—		248,060		—
West	148,465		—		148,465		—
Foreign bonds	10,982		—		10,982		—
Public utilities	47,641		—		47,641		—
Corporate bonds
Energy	22,445		—		22,445		—
Industrials	32,987		—		32,987		—
Consumer goods and services	30,970		—		30,970		—
Health care	12,226		—		12,226		—
Technology, media and telecommunications	15,256		—		15,256		—
Financial services	54,512		—		54,412		100
Mortgage-backed securities	8,682		—		8,682		—
Collateralized mortgage obligations
Government national mortgage association	72,194		—		72,194		—
Federal home loan mortgage corporation	54,829		—		54,829		—
Federal national mortgage association	46,146		—		46,146		—
Asset-backed securities	3,469		—		2,837		632
Total Available-for-Sale Fixed Maturities	$	1,563,996	$	—	$	1,563,264	$	732
TRADING
Fixed maturities:
Bonds
Corporate bonds
Industrials	$	1,968	$	—	$	1,968	$	—
Consumer goods and services	1,846		—		1,846		—
Health care	3,739		—		3,739		—



Technology, media and telecommunications	2,212		—		2,212		—
Financial services	2,133		—		2,133		—
Redeemable preferred stocks	3,481		3,481		—		—
Total Trading Securities	$	15,379	$	3,481	$	11,898	$	—
EQUITY SECURITIES
Common stocks
Public utilities	$	15,095	$	15,095	$	—	$	—
Energy	12,782		12,782		—		—
Industrials	58,724		58,724		—		—
Consumer goods and services	24,414		24,414		—		—
Health care	39,025		39,025		—		—
Technology, media and telecommunications	14,410		14,410		—		—
Financial services	111,761		111,761		—		—
Nonredeemable preferred stocks	4,151		3,331		—		820
Total Equity Securities	$	280,362	$	279,542	$	—	$	820
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	285,804	$	285,804	$	—	$	—
Corporate-Owned Life Insurance	$	4,404	$	—	$	4,404	$	—
Total Assets Measured at Fair Value	$	2,150,120	$	569,002	$	1,579,566	$	1,552



December 31, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	16,891	$	—	$	16,891	$	—
U.S. government agency	122,168		—		122,168		—
States, municipalities and political subdivisions
General obligations
Midwest	109,696		—		109,696		—
Northeast	48,641		—		48,641		—
South	141,519		—		141,519		—
West	113,011		—		113,011		—
Special revenue
Midwest	158,744		—		158,744		—
Northeast	79,760		—		79,760		—
South	263,512		—		263,512		—
West	158,307		—		158,307		—
Foreign bonds	52,753		—		52,753		—
Public utilities	209,144		—		209,144		—
Corporate bonds
Energy	95,053		—		95,053		—
Industrials	221,707		—		221,707		—
Consumer goods and services	186,257		—		185,589		668
Health care	75,408		—		75,408		—
Technology, media and telecommunications	148,979		—		148,979		—
Financial services	283,151		—		275,474		7,677
Mortgage-backed securities	13,691		—		13,691		—
Collateralized mortgage obligations
Government national mortgage association	157,483		—		157,483		—
Federal home loan mortgage corporation	199,152		—		199,152		—
Federal national mortgage association	105,432		—		105,432		—
Asset-backed securities	4,636		—		3,989		647
Total Available-for-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities:
Common stocks
Public utilities	$	22,439	$	22,439	$	—	$	—
Energy	14,565		14,565		—		—
Industrials	66,519		66,517		2		—
Consumer goods and services	25,688		25,688		—		—
Health care	40,103		40,103		—		—
Technology, media and telecommunications	17,508		17,508		—		—
Financial services	116,447		116,447		—		—



Nonredeemable preferred stocks	1,297		415		—		882
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities:
Bonds
Corporate bonds
Industrials	$	2,220	$	—	$	2,220	$	—
Consumer goods and services	1,535		—		1,535		—
Health care	3,741		—		3,741		—
Technology, media and telecommunications	1,221		—		1,221		—
Financial services	5,566		—		5,566		—
Redeemable preferred stocks	2,559		2,559		—		—
Equity securities:
Public utilities	874		874		—		—
Energy	190		190		—		—
Industrials	989		989		—		—
Consumer goods and services	1,314		1,314		—		—
Health care	325		325		—		—
Financial services	198		198		—		—
Nonredeemable preferred stocks	2,541		2,541		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

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 March 31, 2018 and December 31, 2017:



March 31, 2018			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,563,996	$	—	$	1,563,264	$	732
Discontinued operations	—		—		—		—
Total Available-for-Sale Fixed Maturities	$	1,563,996	$	—	$	1,563,264	$	732
TRADING
Fixed maturities:
Continuing operations	$	15,379	$	3,481	$	11,898	$	—
Discontinued operations	—		—		—		—
Total Trading Securities	$	15,379	$	3,481	$	11,898	$	—
EQUITY SECURITIES
Continuing operations	$	280,362	$	279,542	$	—	$	820
Discontinued operations	—		—		—		—
Total Equity Securities	$	280,362	$	279,542	$	—	$	820
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		$	—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	285,804	$	285,804	$	—	$	—
Discontinued operations	—		—		—		—
Money Market Accounts	$	285,804	$	285,804	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	4,404	$	—	$	4,404	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	4,404	$	—	$	4,404	$	—
Total Assets Measured at Fair Value	$	2,150,120	$	569,002	$	1,579,566	$	1,552

Note: The sale of our life insurance business was completed on March 30, 2018.



December 31, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,535,070	$	—	$	1,534,323	$	747
Discontinued operations	1,430,025		—		1,421,780		8,245
Total Available-for-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities:
Continuing operations	$	280,913	$	280,031	$	—	$	882
Discontinued operations	23,653		23,651		2		—
Total Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities:
Continuing operations	$	16,842	$	2,559	$	14,283	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	6,431		6,431		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	6,147	$	6,147	$	—	$	—
Discontinued operations	10,677		10,677		—		—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	4,029	$	—	$	4,029	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

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 continuing operations for the three-month period ended March 31, 2018:



	States, municipalities and political subdivisions		Corporate bonds		Asset-backed securities			Equities			Total
Balance at January 1, 2018	$	—	$	100	$	647		$	882		$	1,629
Net unrealized gains (losses)⁽¹⁾	—				(15		)	(62		)	(77		)
Balance at March 31, 2018	$	—	$	100	$	632		$	820		$	1,552

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