Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows:

	June 30, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	10,012	$	-	$	10,012
Foreign government		-		139,573		-		139,573
States and political subdivisions		-		164,102		-		164,102
Corporates		5,949		1,682,005		-		1,687,954
Mortgage- and asset-backed securities:
Residential mortgage-backed securities		-		251,988		26		252,014
Commercial mortgage-backed securities		-		156,266		-		156,266
Other asset-backed securities		-		103,164		1,500		104,664
Total available-for-sale fixed-maturity securities		5,949		2,507,110		1,526		2,514,585
Short-term investments		-		40,325		-		40,325
Total available-for-sale securities		5,949		2,547,435		1,526		2,554,910
Equity securities		36,477		1,090		1,810		39,377
Trading securities		-		33,498		-		33,498
Cash and cash equivalents		774,591		-		-		774,591
Separate accounts		-		2,745,827		-		2,745,827
Total fair value assets	$	817,017	$	5,327,850	$	3,336	$	6,148,203
Fair value liabilities:
Separate accounts	$	-	$	2,745,827	$	-	$	2,745,827
Total fair value liabilities	$	-	$	2,745,827	$	-	$	2,745,827

	December 31, 2020
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	10,144	$	-	$	10,144
Foreign government		-		183,252		-		183,252
States and political subdivisions		-		170,689		-		170,689
Corporates		6,074		1,622,094		-		1,628,168
Mortgage-and asset-backed securities:
Residential mortgage-backed securities		-		272,714		27		272,741
Commercial mortgage-backed securities		-		112,865		-		112,865
Other asset-backed securities		-		86,752		-		86,752
Total available-for-sale securities		6,074		2,458,510		27		2,464,611
Equity securities		34,910		1,093		2,020		38,023
Trading securities		-		16,300		-		16,300
Cash and cash equivalents		285,074		262,495		-		547,569
Separate accounts		-		2,659,520		-		2,659,520
Total fair value assets	$	326,058	$	5,397,918	$	2,047	$	5,726,023
Fair value liabilities:
Separate accounts	$	-	$	2,659,520	$	-	$	2,659,520
Total fair value liabilities	$	-	$	2,659,520	$	-	$	2,659,520

Roll forward of Level 3 Assets Measured on Recurring Basis

The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows:

	Three months ended June 30,						Six months ended June 30, ⁽¹⁾
	2021			2020			2021			2020
	(In thousands)
Level 3 assets, beginning of period	$	4,177		$	386		$	2,047		$	585
Net unrealized gains (losses) included in other comprehensive income		-			1			-			2
Realized gains (losses) and accretion (amortization) recognized in earnings		(150	)		17			(234	)		(8	)
Purchases		999			-			999			-
Settlements		(2,190	)		(171	)		(2,190	)		(346	)
Transfers into Level 3		500			5,035			2,714			5,035
Transfers out of Level 3		-			-			-			-
Level 3 assets, end of period	$	3,336		$	5,268		$	3,336		$	5,268

(1)	Activities for investments that enter Level 3 in one quarter and exit Level 3 in another quarter within the same fiscal year are not eliminated until year-end when only the full year amounts are presented.

Carrying Values and Estimated Fair Values of Financial Instruments

The carrying values and estimated fair values of our financial instruments were as follows:

	June 30, 2021				December 31, 2020
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)	$	2,514,585	$	2,514,585	$	2,464,611	$	2,464,611
Fixed-maturity security (held-to-maturity) ⁽³⁾		1,368,740		1,572,889		1,346,350		1,606,208
Short-term investments (available-for-sale)		40,327		40,325		-		-
Equity securities		39,377		39,377		38,023		38,023
Trading securities		33,498		33,498		16,300		16,300
Policy loans ⁽³⁾		29,449		29,449		30,199		30,199
Deposit asset underlying 10% coinsurance agreement ⁽³⁾		232,293		232,293		236,865		236,865
Separate accounts		2,745,827		2,745,827		2,659,520		2,659,520
Liabilities:
Notes payable – Long term ^(1) (2)	$	374,606	$	390,953	$	374,415	$	399,377
Surplus note ^(1) (3)		1,368,194		1,564,889		1,345,772		1,596,599
Separate accounts		2,745,827		2,745,827		2,659,520		2,659,520

(1)	Carrying value amounts shown are net of issuance costs.

(2)	Classified as a Level 2 fair value measurement.

(3)	Classified as a Level 3 fair value measurement.