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Investments (Tables)
 3 Months Ended
Mar. 31, 2015
Investments [Abstract]  
Schedule of Fixed Maturity and Equity Securities
At March 31, 2015 and December 31, 2014, the amortized cost and fair value of fixed maturity securities and equity securities were as follows:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
 
(Dollars in thousands)
March 31, 2015
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
United States Government full faith and credit
$
37,114

 
$
1,417

 
$
(4
)
 
$
38,527

United States Government sponsored agencies
1,384,476

 
45,559

 
(8,671
)
 
1,421,364

United States municipalities, states and territories
3,345,258

 
464,981

 
(377
)
 
3,809,862

Foreign government obligations
210,918

 
21,023

 
(4,400
)
 
227,541

Corporate securities
20,864,311

 
1,973,728

 
(86,145
)
 
22,751,894

Residential mortgage backed securities
1,571,548

 
159,281

 
(1,514
)
 
1,729,315

Commercial mortgage backed securities
3,017,014

 
149,269

 
(454
)
 
3,165,829

Other asset backed securities
1,012,680

 
54,766

 
(8,137
)
 
1,059,309

 
$
31,443,319

 
$
2,870,024

 
$
(109,702
)
 
$
34,203,641

Held for investment:
 
 
 
 
 
 
 
Corporate security
$
76,479

 
$
6,505

 
$
—

 
$
82,984

 
 
 
 
 
 
 
 
Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance, and real estate
$
7,511

 
$
338

 
$
—

 
$
7,849

 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
United States Government full faith and credit
$
137,710

 
$
765

 
$
(15
)
 
$
138,460

United States Government sponsored agencies
1,364,424

 
43,399

 
(13,933
)
 
1,393,890

United States municipalities, states and territories
3,293,551

 
430,469

 
(711
)
 
3,723,309

Foreign government obligations
181,128

 
16,628

 
(3,953
)
 
193,803

Corporate securities
19,984,747

 
1,628,941

 
(123,396
)
 
21,490,292

Residential mortgage backed securities
1,616,846

 
136,704

 
(2,205
)
 
1,751,345

Commercial mortgage backed securities
2,720,294

 
90,649

 
(3,323
)
 
2,807,620

Other asset backed securities
906,346

 
48,022

 
(7,885
)
 
946,483

 
$
30,205,046

 
$
2,395,577

 
$
(155,421
)
 
$
32,445,202

Held for investment:
 
 
 
 
 
 
 
Corporate security
$
76,432

 
$
—

 
$
(594
)
 
$
75,838

 
 
 
 
 
 
 
 
Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance, and real estate
$
7,509

 
$
296

 
$
—

 
$
7,805
Schedule of Fixed Maturity Securities by Contractual Maturity Date
The amortized cost and fair value of fixed maturity securities at March 31, 2015, by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage and other asset backed securities provide for periodic payments throughout their lives and are shown below as separate lines.
 
Available for sale
 
Held for investment
 
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
 
(Dollars in thousands)
Due in one year or less
$
79,405

 
$
81,179

 
$
—

 
$
—

Due after one year through five years
1,537,898

 
1,706,024

 
—

 
—

Due after five years through ten years
8,936,938

 
9,293,120

 
—

 
—

Due after ten years through twenty years
7,579,323

 
8,366,229

 
—

 
—

Due after twenty years
7,708,513

 
8,802,636

 
76,479

 
82,984

 
25,842,077

 
28,249,188

 
76,479

 
82,984

Residential mortgage backed securities
1,571,548

 
1,729,315

 
—

 
—

Commercial mortgage backed securities
3,017,014

 
3,165,829

 
—

 
—

Other asset backed securities
1,012,680

 
1,059,309

 
—

 
—

 
$
31,443,319

 
$
34,203,641

 
$
76,479

 
$
82,984
Schedule of Components of Net Unrealized Gains on Available for Sale Fixed Maturity and Equity Securities Reported as Separate Component of Stockholders' Equity
Net unrealized gains on available for sale fixed maturity securities and equity securities reported as a separate component of stockholders' equity were comprised of the following:
 
March 31, 2015
 
December 31, 2014
 
(Dollars in thousands)
Net unrealized gains on available for sale fixed maturity securities and equity securities
$
2,760,660

 
$
2,240,452

Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements
(1,420,347
)
 
(1,165,271
)
Deferred income tax valuation allowance reversal
22,534

 
22,534

Deferred income tax expense
(469,109
)
 
(376,314
)
Net unrealized gains reported as accumulated other comprehensive income
$
893,738

 
$
721,401
Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation
The following table summarizes the credit quality, as determined by NAIC designation, of our fixed maturity portfolio as of the dates indicated:
 
 
March 31, 2015
 
December 31, 2014
NAIC
Designation
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
 
 
(Dollars in thousands)
1
 
$
19,969,022

 
$
22,027,864

 
$
19,223,151

 
$
20,941,634

2
 
10,833,446

 
11,565,940

 
10,432,593

 
10,981,618

3
 
681,662

 
671,393

 
602,191

 
583,313

4
 
35,082

 
21,074

 
22,888

 
14,089

5
 
—

 
—

 
—

 
—

6
 
586

 
354

 
655

 
386

 
 
$
31,519,798

 
$
34,286,625

 
$
30,281,478

 
$
32,521,040
Schedule of Gross Unrealized Losses on Investments, By Category and Length of Time
The following table shows our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities (consisting of 213 and 402 securities, respectively) have been in a continuous unrealized loss position, at March 31, 2015 and December 31, 2014:
 
Less than 12 months
 
12 months or more
 
Total
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
(Dollars in thousands)
March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
United States Government full faith and credit
$
508

 
$
(4
)
 
$
—

 
$
—

 
$
508

 
$
(4
)
United States Government sponsored agencies
585,574

 
(8,671
)
 
—

 
—

 
585,574

 
(8,671
)
United States municipalities, states and territories
50,040

 
(322
)
 
2,945

 
(55
)
 
52,985

 
(377
)
Foreign government obligations
9,044

 
(1,232
)
 
11,251

 
(3,168
)
 
20,295

 
(4,400
)
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
182,005

 
(1,464
)
 
79,738

 
(10,022
)
 
261,743

 
(11,486
)
Manufacturing, construction and mining
703,225

 
(30,909
)
 
235,075

 
(24,455
)
 
938,300

 
(55,364
)
Utilities and related sectors
339,510

 
(10,650
)
 
64,467

 
(2,500
)
 
403,977

 
(13,150
)
Wholesale/retail trade
71,296

 
(1,058
)
 
23,733

 
(2,727
)
 
95,029

 
(3,785
)
Services, media and other
149,762

 
(1,234
)
 
37,022

 
(1,126
)
 
186,784

 
(2,360
)
Residential mortgage backed securities
13,147

 
(149
)
 
7,292

 
(1,365
)
 
20,439

 
(1,514
)
Commercial mortgage backed securities
110,898

 
(454
)
 
—

 
—

 
110,898

 
(454
)
Other asset backed securities
125,651

 
(1,533
)
 
25,371

 
(6,604
)
 
151,022

 
(8,137
)
 
$
2,340,660

 
$
(57,680
)
 
$
486,894

 
$
(52,022
)
 
$
2,827,554

 
$
(109,702
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
United States Government full faith and credit
$
—

 
$
—

 
$
498

 
$
(15
)
 
$
498

 
$
(15
)
United States Government sponsored agencies
—

 
—

 
610,339

 
(13,933
)
 
610,339

 
(13,933
)
United States municipalities, states and territories
—

 
—

 
27,947

 
(711
)
 
27,947

 
(711
)
Foreign government obligations
14,194

 
(1,068
)
 
11,542

 
(2,885
)
 
25,736

 
(3,953
)
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
253,439

 
(2,586
)
 
399,874

 
(16,277
)
 
653,313

 
(18,863
)
Manufacturing, construction and mining
1,078,089

 
(35,151
)
 
694,088

 
(35,926
)
 
1,772,177

 
(71,077
)
Utilities and related sectors
373,952

 
(8,185
)
 
344,313

 
(10,153
)
 
718,265

 
(18,338
)
Wholesale/retail trade
88,766

 
(2,290
)
 
99,427

 
(3,122
)
 
188,193

 
(5,412
)
Services, media and other
131,940

 
(1,567
)
 
277,296

 
(8,139
)
 
409,236

 
(9,706
)
Residential mortgage backed securities
22,115

 
(1,219
)
 
20,427

 
(986
)
 
42,542

 
(2,205
)
Commercial mortgage backed securities
241,637

 
(1,344
)
 
187,241

 
(1,979
)
 
428,878

 
(3,323
)
Other asset backed securities
142,094

 
(3,519
)
 
58,958

 
(4,366
)
 
201,052

 
(7,885
)
 
$
2,346,226

 
$
(56,929
)
 
$
2,731,950

 
$
(98,492
)
 
$
5,078,176

 
$
(155,421
)
Held for investment:
 
 
 
 
 
 
 
 
 
 
 
Corporate security:
 
 
 
 
 
 
 
 
 
 
 
Insurance
$
—

 
$
—

 
$
75,838

 
$
(594
)
 
$
75,838

 
$
(594
)
Schedule of Changes in Net Unrealized Gains/Losses on Investments
Changes in net unrealized gains on investments for the three months ended March 31, 2015 and 2014 are as follows:
 
Three Months Ended
March 31,
 
2015
 
2014
 
(Dollars in thousands)
Fixed maturity securities held for investment carried at amortized cost
$
7,099

 
$
4,037

Investments carried at fair value:
 
 
 
Fixed maturity securities, available for sale
$
520,166

 
$
977,131

Equity securities, available for sale
42

 
(13
)
 
520,208

 
977,118

Adjustment for effect on other balance sheet accounts:
 
 
 
Deferred policy acquisition costs and deferred sales inducements
(255,076
)
 
(536,752
)
Deferred income tax asset/liability
(92,795
)
 
(154,127
)
 
(347,871
)
 
(690,879
)
Change in net unrealized gains on investments carried at fair value
$
172,337

 
$
286,239
Net Realized Gains (Losses) on Investments
Net realized gains (losses) on investments, excluding net OTTI losses for the three months ended March 31, 2015 and 2014, are as follows:
 
Three Months Ended
March 31,
 
2015
 
2014
 
(Dollars in thousands)
Available for sale fixed maturity securities:
 
 
 
Gross realized gains
$
2,288

 
$
184

Gross realized losses
(289
)
 
(691
)
 
1,999

 
(507
)
Other investments:
 
 
 
Gain on sale of real estate
838

 
756

Loss on sale of real estate
(382
)
 
—

Impairment losses on real estate
(629
)
 
(799
)
 
(173
)
 
(43
)
Mortgage loans on real estate:
 
 
 
Decrease (increase) in allowance for credit losses
1,798

 
(164
)
Recovery of specific allowance
1,255

 
—

 
3,053

 
(164
)
 
$
4,879

 
$
(714
)
Significant Assumptions Used to Determine the Credit Loss Component of Other Than Temporary Impairment on Residential Mortgage Backed Securities
The following table presents the range of significant assumptions used to determine the credit loss component of other than temporary impairments we have recognized on residential mortgage backed securities for the three months ended March 31, 2015 and 2014, which are all senior level tranches within the structure of the securities:
 
 
 
 
Discount Rate
 
Default Rate
 
Loss Severity
Sector
 
Vintage
 
Min
 
Max
 
Min
 
Max
 
Min
 
Max
Three months ended March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prime
 
2006
 
6.5
%
 
6.5
%
 
14
%
 
14
%
 
40
%
 
40
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prime
 
2006
 
6.5
%
 
7.4
%
 
11
%
 
12
%
 
50
%
 
50
%
Other Than Temporary Impairment by Asset Type
The following table summarizes other than temporary impairments for the three months ended March 31, 2015 and 2014, by asset type:
 
Number
of
Securities
 
Total OTTI
Losses
 
Portion of OTTI
Losses
Recognized
from Other
Comprehensive
Income
 
Net OTTI
Losses
Recognized in
Operations
 
 
 
(Dollars in thousands)
Three months ended March 31, 2015
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Residential mortgage backed securities
1
 
$
(132
)
 
$
—

 
$
(132
)
 
 
 
 
 
 
 
 
Three months ended March 31, 2014
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Residential mortgage backed securities
2
 
—

 
(905
)
 
(905
)
Other Than Temporary Impairment, Credit Losses Recognized in Earnings
The cumulative portion of other than temporary impairments determined to be credit losses which have been recognized in operations for debt securities are summarized as follows:
 
Three Months Ended
March 31,
 
2015
 
2014
 
(Dollars in thousands)
Cumulative credit loss at beginning of period
$
(127,050
)
 
$
(125,960
)
Credit losses on securities for which OTTI has not previously been recognized
(132
)
 
—

Additional credit losses on securities for which OTTI has previously been recognized
—

 
(905
)
Accumulated losses on securities that were disposed of during the period
—

 
—

Cumulative credit loss at end of period
$
(127,182
)
 
$
(126,865
)
Schedule of Other Than Temporary Impairment Losses, Investments
The following table summarizes the cumulative noncredit portion of OTTI and the change in fair value since recognition of OTTI, both of which were recognized in other comprehensive income (loss), by major type of security, for securities that are part of our investment portfolio at March 31, 2015 and December 31, 2014:
 
Amortized Cost
 
OTTI
Recognized in
Other
Comprehensive
Income
 
Change in Fair
Value Since
OTTI was
Recognized
 
Fair Value
 
(Dollars in thousands)
March 31, 2015
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$
—

 
$
—

 
$
12

 
$
12

Residential mortgage backed securities
551,990

 
(173,494
)
 
219,811

 
598,307

 
$
551,990

 
$
(173,494
)
 
$
219,823

 
$
598,319

December 31, 2014
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$
—

 
$
—

 
$
11

 
$
11

Residential mortgage backed securities
569,508

 
(173,494
)
 
215,625

 
611,639

 
$
569,508

 
$
(173,494
)
 
$
215,636

 
$
611,650