INVESTMENT BORROWINGS

Three of the Company's insurance subsidiaries (Washington National Insurance Company ("Washington National"), Bankers Life and Colonial Penn Life Insurance Company ("Colonial Penn")) are members of the Federal Home Loan Bank ("FHLB"). As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. New guidance effective January 1, 2018, requiring equity investments to be measured at fair value (as described in the note entitled "Recently Issued Accounting Standards - Adopted Accounting Standards") do not apply to FHLB common stock and prohibit such investments from being classified as equity securities subject to the new guidance. Accordingly, we have classified our investment in the FHLB common stock as other invested assets. In order to conform to the current presentation, the prior period investment in the FHLB common stock has been reclassified to other invested assets. At September 30, 2018, the carrying value of the FHLB common stock was $71.1 million. As of September 30, 2018, collateralized borrowings from the FHLB totaled $1.6 billion and the proceeds were used to purchase fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $2.0 billion at September 30, 2018, which are maintained in a custodial account for the benefit of the FHLB. Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet.

The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):



Amount		Maturity	Interest rate at
borrowed		date	September 30, 2018
$	50.0	February 2019	Variable rate – 2.405%
21.8		July 2019	Variable rate – 2.672%
15.0		October 2019	Variable rate – 2.850%
50.0		May 2020	Variable rate – 2.678%
21.8		June 2020	Fixed rate – 1.960%
25.0		September 2020	Variable rate – 2.991%
100.0		September 2020	Variable rate – 2.876%
50.0		September 2020	Variable rate – 2.902%
75.0		September 2020	Variable rate – 2.506%
100.0		October 2020	Variable rate – 2.453%
50.0		December 2020	Variable rate – 2.814%
100.0		July 2021	Variable rate – 2.889%
100.0		July 2021	Variable rate – 2.859%
28.2		August 2021	Fixed rate – 2.550%
57.7		August 2021	Variable rate - 2.871%
125.0		August 2021	Variable rate – 2.696%
50.0		September 2021	Variable rate – 2.851%
22.0		May 2022	Variable rate – 2.665%
100.0		May 2022	Variable rate – 2.505%
10.0		June 2022	Variable rate – 2.941%
50.0		July 2022	Variable rate – 2.703%
50.0		July 2022	Variable rate – 2.722%
50.0		July 2022	Variable rate – 2.719%
50.0		August 2022	Variable rate – 2.733%
50.0		December 2022	Variable rate – 2.621%
50.0		December 2022	Variable rate – 2.621%
24.1		March 2023	Fixed rate – 2.160%
50.0		July 2023	Variable rate – 2.548%
100.0		July 2023	Variable rate – 2.548%
20.5		June 2025	Fixed rate – 2.940%
$	1,646.1

The variable rate borrowings are pre-payable on each interest reset date without penalty. The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on prevailing market interest rates. At September 30, 2018, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $1.0 million.

Interest expense of $30.3 million and $19.5 million in the first nine months of 2018 and 2017, respectively, was recognized related to total borrowings from the FHLB.