OPERATING SEGMENTS

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

OPERATING SEGMENTS

OPERATINGSEGMENTS

The Company has several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. The Company periodically evaluates its operating segments, as prescribed in the ASC Segment Reporting Topic, and makes adjustments to its segment reporting as needed. There were no changes to the Company’s operating segments made or required to be made as a result of the Merger on February 1, 2015. A brief description of each segment follows.

• The Life Marketing segment markets fixed universal life (“UL”), indexed universal life, variable universal life (“VUL”), bank-owned life insurance (“BOLI”), and level premium term insurance (“traditional”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, and independent marketing organizations.

• The Acquisitions segment focuses on acquiring, converting, and servicing policies acquired from other companies. The segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. The level of the segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed. Therefore earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made.

• The Annuities segment markets fixed and VA products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers.

• The Stable Value Products segment sells fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. The segment also issues funding agreements to the FHLB, and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. The Company also has an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors.

• The Asset Protection segment markets extended service contracts and credit life and disability insurance to protect consumers’ investments in automobiles and recreational vehicles. In addition, the segment markets a guaranteed asset protection (“GAP”) product. GAP coverage covers the difference between the loan pay-off amount and an asset’s actual cash value in the case of a total loss.

• The Corporate and Other segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead and expenses not attributable to the segments above. This segment includes earnings from several non-strategic or runoff lines of business, various investment-related transactions, the operations of several small subsidiaries, and the repurchase of non-recourse funding obligations.

     The Company uses the same accounting policies and procedures to measure segment operating income (loss) and assets as it uses to measure consolidated net income and assets. Segment operating income (loss) is income before income tax, excluding realized gains and losses on investments and derivatives net of the amortization related to DAC, VOBA, and benefits and settlement expenses. Operating earnings exclude changes in the GMWB embedded derivatives (excluding the portion attributed to economic cost), actual GMWB incurred claims and the related amortization of DAC/VOBA attributed to each of these items.

Segment operating income (loss) represents the basis on which the performance of the Company’s business is internally assessed by management. Premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC/VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized investment gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on statutory policy liabilities net of associated statutory policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable.

There were no significant intersegment transactions during the three months ended March 31, 2016 (Successor Company), the period of February 1, 2015 to March 31, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

The following tables summarize financial information for the Company’s segments (Predecessor and Successor periods are not comparable):

	Successor Company						Predecessor Company
	For The Three Months Ended March 31, 2016			February 1, 2015 to March 31, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Revenues
Life Marketing	$	381,074		$	254,922		$	133,361
Acquisitions	424,807			258,789			139,761
Annuities	218,516			49,344			130,918
Stable Value Products	29,902			10,342			8,181
Asset Protection	73,679			49,296			24,566
Corporate and Other	31,924			18,268			22,859
Total revenues	$	1,159,902		$	640,961		$	459,646
Segment Operating Income (Loss)
Life Marketing	$	13,126		$	4,281		$	(2,271	)
Acquisitions	68,653			36,070			20,134
Annuities	45,276			31,373			11,363
Stable Value Products	14,448			6,115			4,529
Asset Protection	4,257			3,643			1,907
Corporate and Other	(34,743		)	(13,957		)	(16,662		)
Total segment operating income	111,017			67,525			19,000
Realized investment (losses) gains - investments(1)	83,142			(42,933		)	89,414
Realized investment (losses) gains - derivatives	40,820			(56		)	24,433
Income tax expense	(76,362		)	(8,116		)	(44,325		)
Net income	$	158,617		$	16,420		$	88,522
Investment gains (losses)	$	79,092		$	(35,056	)	$	80,672
Less: amortization related to DAC/VOBA and benefits and settlement expenses	(4,050		)	7,877			(8,742		)
Realized investment gains (losses) - investments	$	83,142		$	(42,933	)	$	89,414
Derivative gains (losses)	$	31,908		$	(4,948	)	$	22,031
Less: VA GMWB economic cost	(8,912		)	(4,892		)	(2,402		)
Realized investment gains (losses) - derivatives	$	40,820		$	(56	)	$	24,433

(1) Includes credit related other-than-temporary impairments of $2.6 million and $0.5 million for the three months ended March 31, 2016 (Successor Company) and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. The Company did not recognize any other-than-temporary impairments for the period of February 1, 2015 to March 31, 2015 (Successor Company).

	Operating Segment Assets As of March 31, 2016 (Successor Company)
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	13,568,537	$	20,102,965	$	19,770,158	$	1,973,590
Deferred policy acquisition costs and value of business acquired	1,127,263		108,885		596,460		2,245
Other intangibles	314,883		39,019		193,448		9,222
Goodwill	200,274		14,524		336,677		113,813
Total assets	$	15,210,957	$	20,265,393	$	20,896,743	$	2,098,870

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	799,709	$	12,866,525	$	69,081,484
Deferred policy acquisition costs and value of business acquired	38,008		—		1,872,861
Other intangibles	78,231		—		634,803
Goodwill	67,155		—		732,443
Total assets	$	983,103	$	12,866,525	$	72,321,591

	Operating Segment Assets As of December 31, 2015 (Successor Company)
	(Dollars In Thousands)
	Life Marketing		Acquisitions			Annuities		Stable Value Products
Investments and other assets	$	13,258,639	$	19,879,988		$	19,715,901	$	2,006,263
Deferred policy acquisition costs and value of business acquired	1,119,515		(178,662		)	578,742		2,357
Other intangibles	319,623		39,658			196,780		9,389
Goodwill	200,274		14,524			336,677		113,813
Total assets	$	14,898,051	$	19,755,508		$	20,828,100	$	2,131,822

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	766,294	$	9,464,906	$	65,091,991
Deferred policy acquisition costs and value of business acquired	40,421		—		1,562,373
Other intangibles	79,681		—		645,131
Goodwill	67,155		—		732,443
Total assets	$	953,551	$	9,464,906	$	68,031,938