Fair Values of Financial Instruments (Tables)
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6 Months Ended |
Jun. 30, 2021 |
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| Fair Value Disclosures [Abstract] |
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| Carrying Amounts and Fair Values of Financial Instruments |
The following sets forth a comparison of the carrying amounts and fair values of our financial instruments: | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2021 | | December 31, 2020 | | Carrying
Amount | | Fair Value | | Carrying
Amount | | Fair Value | | (Dollars in thousands) | | Assets | | | | | | | | | Fixed maturity securities, available for sale | $ | 46,659,256 | | | $ | 46,659,256 | | | $ | 47,538,893 | | | $ | 47,538,893 | | | Mortgage loans on real estate | 4,299,945 | | | 4,457,553 | | | 4,165,489 | | | 4,327,885 | | | Real estate investments | 258,237 | | | 258,237 | | | — | | | — | | | Derivative instruments | 1,459,965 | | | 1,459,965 | | | 1,310,954 | | | 1,310,954 | | | Other investments | 962,305 | | | 962,305 | | | 590,078 | | | 590,078 | | | Cash and cash equivalents | 11,524,265 | | | 11,524,265 | | | 9,095,522 | | | 9,095,522 | | | Coinsurance deposits | 4,441,950 | | | 4,077,954 | | | 4,844,927 | | | 4,411,051 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | Policy benefit reserves | 64,182,610 | | | 55,231,714 | | | 61,406,599 | | | 52,928,174 | | | Single premium immediate annuity (SPIA) benefit reserves | 233,331 | | | 240,541 | | | 240,226 | | | 247,679 | | | Notes payable | 495,955 | | | 565,760 | | | 495,668 | | | 567,345 | | | Subordinated debentures | 78,264 | | | 86,214 | | | 78,112 | | | 87,951 | | | | | | | | | | | | | | | | | |
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| Assets and Liabilities Measured at Fair Value on a Recurring Basis, By Fair Value Hierarchy Level |
Our assets and liabilities which are measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 are presented below based on the fair value hierarchy levels: | | | | | | | | | | | | | | | | | | | | | | | | | Total
Fair Value | | Quoted
Prices in
Active
Markets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | (Dollars in thousands) | | June 30, 2021 | | | | | | | | | Assets | | | | | | | | | Fixed maturity securities, available for sale: | | | | | | | | | United States Government full faith and credit | $ | 38,879 | | | $ | 33,257 | | | $ | 5,622 | | | $ | — | | | United States Government sponsored agencies | 1,046,186 | | | — | | | 1,046,186 | | | — | | | United States municipalities, states and territories | 3,700,225 | | | — | | | 3,700,225 | | | — | | | Foreign government obligations | 197,330 | | | — | | | 197,330 | | | — | | | Corporate securities | 31,455,817 | | | 14 | | | 31,455,803 | | | — | | | Residential mortgage backed securities | 1,192,423 | | | — | | | 1,192,423 | | | — | | | Commercial mortgage backed securities | 4,175,517 | | | — | | | 4,175,517 | | | — | | | Other asset backed securities | 4,852,879 | | | — | | | 4,852,879 | | | — | | | Other investments: equity securities | 356,942 | | | 350,000 | | | 6,942 | | | — | | | Real estate investments | 258,237 | | | — | | | — | | | 258,237 | | | Derivative instruments | 1,459,965 | | | — | | | 1,459,965 | | | — | | | Cash and cash equivalents | 11,524,265 | | | 11,524,265 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 60,258,665 | | | $ | 11,907,536 | | | $ | 48,092,892 | | | $ | 258,237 | | | Liabilities | | | | | | | | | | | | | | | | | Fixed index annuities - embedded derivatives | $ | 8,384,764 | | | $ | — | | | $ | — | | | $ | 8,384,764 | | | | | | | | | | | | | | | | | | | December 31, 2020 | | | | | | | | | Assets | | | | | | | | | Fixed maturity securities, available for sale: | | | | | | | | | United States Government full faith and credit | $ | 39,771 | | | $ | 33,940 | | | $ | 5,831 | | | $ | — | | | United States Government sponsored agencies | 1,039,551 | | | — | | | 1,039,551 | | | — | | | United States municipalities, states and territories | 3,776,131 | | | — | | | 3,776,131 | | | — | | | Foreign government obligations | 202,706 | | | — | | | 202,706 | | | — | | | Corporate securities | 31,156,827 | | | 8 | | | 31,156,819 | | | — | | | Residential mortgage backed securities | 1,512,831 | | | — | | | 1,512,831 | | | — | | | Commercial mortgage backed securities | 4,261,227 | | | — | | | 4,261,227 | | | — | | | Other asset backed securities | 5,549,849 | | | — | | | 5,549,849 | | | — | | | | | | | | | | | | | | | | | | | Derivative instruments | 1,310,954 | | | — | | | 1,310,954 | | | — | | | Cash and cash equivalents | 9,095,522 | | | 9,095,522 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 57,945,369 | | | $ | 9,129,470 | | | $ | 48,815,899 | | | $ | — | | | Liabilities | | | | | | | | | | | | | | | | | Fixed index annuities - embedded derivatives | $ | 7,938,281 | | | $ | — | | | $ | — | | | $ | 7,938,281 | | | | | | | | | |
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| Schedule of Assumptions Used in Estimating Fair Value |
The following table presents average lapse rate and partial withdrawal rate assumptions, by contract duration, used in estimating the fair value of the embedded derivative component of our fixed index annuity policy benefit reserves at each reporting date: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average Lapse Rates | | Average Partial Withdrawal Rates | | Contract Duration (Years) | | June 30, 2021 | | December 31, 2020 | | June 30, 2021 | | December 31, 2020 | 1 - 5 | | 1.28% | | 1.22% | | 2.61% | | 2.63% | 6 - 10 | | 1.51% | | 1.50% | | 3.12% | | 3.14% | 11 - 15 | | 6.03% | | 5.66% | | 3.59% | | 3.58% | 16 - 20 | | 6.56% | | 7.08% | | 3.83% | | 3.79% | 20+ | | 7.72% | | 7.36% | | 3.64% | | 3.63% |
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| Assets and Liabilities Measured at Fair Value on Recurring Basis, Level 3 Reconciliation |
The following table provides a reconciliation of the beginning and ending balances for our Level 3 assets and liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs for the three and six months ended June 30, 2021 and 2020: | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended
June 30, | | Six Months Ended
June 30, | | 2021 | | 2020 | | 2021 | | 2020 | | (Dollars in thousands) | | Fixed index annuities - embedded derivatives | | | | | | | | | Beginning balance | $ | 7,680,951 | | | $ | 8,451,482 | | | $ | 7,938,281 | | | $ | 9,624,395 | | | Premiums less benefits | 577,729 | | | 53,019 | | | 697,520 | | | 165,177 | | | Change in fair value, net | 126,084 | | | 913,984 | | | (251,037) | | | (371,087) | | | Ending balance | $ | 8,384,764 | | | $ | 9,418,485 | | | $ | 8,384,764 | | | $ | 9,418,485 | | | | | | | | | | | Real estate investments | | | | | | | | | Beginning balance | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Purchases and sales, net | 258,237 | | | — | | | 258,237 | | | — | | | Change in fair value | — | | | — | | | — | | | — | | | Ending balance | $ | 258,237 | | | $ | — | | | $ | 258,237 | | | $ | — | |
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