Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of the date indicated.



	December 31, 2015
	Total		Level 1	Level 2	Level 3
	(In thousands)
Debt securities, available for sale	$	2,861,222	—	2,861,222	—
Equity securities, available for sale	18,361		17,980	381	—
Derivatives, index options	38,409		—	—	38,409

Total assets	$	2,917,992	17,980	2,861,603	38,409

Policyholder account balances (a)	$	58,359	—	—	58,359
Other liabilities (b)	7,669		—	—	7,669

Total liabilities	$	66,028	—	—	66,028



	December 31, 2014
	Total		Level 1	Level 2	Level 3
	(In thousands)
Debt securities, available for sale	$	2,711,377	—	2,711,377	—
Equity securities, available for sale	17,303		16,862	441	—
Derivatives, index options	114,287		—	—	114,287

Total assets	$	2,842,967	16,862	2,711,818	114,287

Policyholder account balances (a)	$	133,236	—	—	133,236
Other liabilities (b)	9,256		—	—	9,256

Total liabilities	$	142,492	—	—	142,492

(a) Represents the fair value of certain product-related embedded derivatives that were recorded at fair value.

(b) Represents the liability for share-based compensation.

Schedule of Significant Unobservable Inputs for Fair Value Measurements

The following table provides additional information about fair value measurements for which significant unobservable (Level 3) inputs were utilized to determine fair value.



	Year Ended December 31, 2015
	Debt Securities, Available For Sale		Equity Securities, Available For Sale	Derivatives, Index Options		Total Assets		Other Liabilities
	(In thousands)

Beginning balance, January 1, 2015	$	—	—	114,287		114,287		142,492
Total realized and unrealized gains (losses):
Included in net income	—		—	(61,750	)	(61,750	)	(61,676	)
Included in other comprehensive income (loss)	—		—	—		—		—
Purchases, sales, issuances and settlements, net:
Purchases	—		—	86,189		86,189		86,189
Sales	—		—	—		—		—
Issuances	—		—	—		—		—
Settlements	—		—	(100,317	)	(100,317	)	(100,977	)
Transfers into (out of) Level 3	—		—	—		—		—

Balance at end of period	$	—	—	38,409		38,409		66,028

Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period:
Net investment income	$	—	—	(47,780	)	(47,780	)	—
Benefits and expenses	—		—	—		—		(48,707	)

Total	$	—	—	(47,780	)	(47,780	)	(48,707	)



	Year Ended December 31, 2014
	Debt Securities, Available For Sale		Equity Securities, Available For Sale	Derivatives, Index Options		Total Assets		Other Liabilities
	(In thousands)

Beginning balance, January 1, 2014	$	—	—	169,314		169,314		193,338
Total realized and unrealized gains (losses):
Included in net income	—		—	68,616		68,616		73,851
Included in other comprehensive income (loss)	—		—	—		—		—
Purchases, sales, issuances and settlements, net:
Purchases	—		—	73,937		73,937		73,937
Sales	—		—	—		—		—
Issuances	—		—	—		—		—
Settlements	—		—	(197,580	)	(197,580	)	(198,634	)
Transfers into (out of) Level 3	—		—	—		—		—

Balance at end of period	$	—	—	114,287		114,287		142,492

Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period:
Net investment income	$	—	—	40,350		40,350		—
Benefits and expenses	—		—	—		—		44,722

Total	$	—	—	40,350		40,350		44,722

Schedule of Quantitative Information about Company's Level 3 Liabilities

The following tables show the quantitative information about the Company's level 3 assets and liabilities.



	December 31, 2015
	Fair Value		Valuation Technique	Unobservable Input
	(In thousands)

Derivatives, index options	$	38,409	Broker prices	Implied volatility
				Inputs from broker proprietary models

Total assets	$	38,409

Policyholder account balances	$	58,359	Deterministic cash flow model	Projected option cost
Other liabilities	7,669		Black Scholes	Expected term
				Forfeiture assumptions

Total liabilities	$	66,028



	December 31, 2014
	Fair Value		Valuation Technique	Unobservable Input
	(In thousands)

Derivatives, index options	$	114,287	Broker prices	Implied volatility
				Inputs from broker proprietary models

Total assets	$	114,287

Policyholder account balances	$	133,236	Deterministic cash flow model	Projected option cost
Other liabilities	$	9,256	Black Scholes	Expected term
				Forfeiture assumptions

Total liabilities	$	142,492

Schedule of Quantitative Information about Company's Level 3 Assets

The following tables show the quantitative information about the Company's level 3 assets and liabilities.



	December 31, 2015
	Fair Value		Valuation Technique	Unobservable Input
	(In thousands)

Derivatives, index options	$	38,409	Broker prices	Implied volatility
				Inputs from broker proprietary models

Total assets	$	38,409

Policyholder account balances	$	58,359	Deterministic cash flow model	Projected option cost
Other liabilities	7,669		Black Scholes	Expected term
				Forfeiture assumptions

Total liabilities	$	66,028



	December 31, 2014
	Fair Value		Valuation Technique	Unobservable Input
	(In thousands)

Derivatives, index options	$	114,287	Broker prices	Implied volatility
				Inputs from broker proprietary models

Total assets	$	114,287

Policyholder account balances	$	133,236	Deterministic cash flow model	Projected option cost
Other liabilities	$	9,256	Black Scholes	Expected term
				Forfeiture assumptions

Total liabilities	$	142,492

Schedule of Assets by Pricing Source and Fair Value Hierarchy Measured on Recurring Basis

The following table presents, by pricing source and fair value hierarchy level, the Company’s assets that are measured at fair value on a recurring basis:



	December 31, 2015
	Total			Level 1		Level 2		Level 3
	(In thousands)

Fixed maturities, available for sale:
Priced by third-party vendors	$	2,861,222		—		2,861,222		—
Priced internally	—			—		—		—
Subtotal	2,861,222			—		2,861,222		—

Equity securities, available for sale:
Priced by third-party vendors	18,361			17,980		381		—
Priced internally	—			—		—		—
Subtotal	18,361			17,980		381		—

Derivatives, index options:
Priced by third-party vendors	38,409			—		—		38,409
Priced internally	—			—		—		—
Subtotal	38,409			—		—		38,409

Total	$	2,917,992		17,980		2,861,603		38,409

Percent of total	100.0		%	0.6	%	98.1	%	1.3	%

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of the Company's financial instruments are as follows:



	December 31, 2015
				Fair Value Hierarchy Level
	Carrying Values		Fair Values	Level 1	Level 2	Level 3
	(In thousands)
ASSETS
Investments in debt and equity securities:
Securities held to maturity	$	7,173,967	7,335,436	—	7,335,436	—
Securities available for sale	2,879,583		2,879,583	17,980	2,861,603	—

Cash and cash equivalents	106,007		106,007	106,007	—	—
Mortgage loans	108,311		111,162	—	—	111,162
Policy loans	61,957		108,550	—	—	108,550
Other loans	2,779		2,957	—	—	2,957
Derivatives, index options	38,409		38,409	—	—	38,409
Life interest in Libbie Shearn Moody Trust	7,379		12,775	—	—	12,775

LIABILITIES
Deferred annuity contracts	$	7,640,951	7,288,108	—	—	7,288,108
Immediate annuity and supplemental contracts	434,468		461,457	—	—	461,457



	December 31, 2014
				Fair Value Hierarchy Level
	Carrying Values		Fair Values	Level 1	Level 2	Level 3
	(In thousands)
ASSETS
Investments in debt and equity securities:
Securities held to maturity	$	6,841,543	7,175,443	—	7,175,443	—
Securities available for sale	2,728,680		2,728,680	16,862	2,711,818	—

Cash and cash equivalents	277,078		277,078	277,078	—	—
Mortgage loans	149,503		156,548	—	—	156,548
Policy loans	63,645		111,040	—	—	111,040
Other loans	2,171		2,300	—	—	2,300
Derivatives, index options	114,287		114,287	—	—	114,287
Life interest in Libbie Shearn Moody Trust	—		12,775	—	—	12,775

LIABILITIES
Deferred annuity contracts	$	7,546,504	7,178,535	—	—	7,178,535
Immediate annuity and supplemental contracts	446,458		474,843	—	—	474,843