10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

ý  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016

or

o  TransitionReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File Number 001-31901

PROTECTIVE LIFE INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

TENNESSEE	63-0169720
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

2801 HIGHWAY 280 SOUTH

BIRMINGHAM, ALABAMA 35223

(Address of principal executive offices and zip code)

(205) 268-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated Filer o
Non-accelerated filer x	Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o  No ý

Number of shares of Common Stock, $1.00 Par Value, outstanding as of July 29, 2016:  5,000,000

1

PROTECTIVE LIFE INSURANCE COMPANY

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTERLY PERIOD ENDED JUNE 30, 2016

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Financial Statements (unaudited):
	Consolidated Condensed Statements of Income (Loss) For The Three and Six Months Ended June 30, 2016 (Successor Company), For The Three Months Ended June 30, 2015 (Successor Company), the Period of February 1, 2015 to June 30, 2015 (Successor Company), and the Period of January 1, 2015 to January 31, 2015 (Predecessor Company)	2
	Consolidated Condensed Statements of Comprehensive Income (Loss) For The Three and Six Months Ended June 30, 2016 (Successor Company), For The Three Months Ended June 30, 2015 (Successor Company), the Period of February 1, 2015 to June 30, 2015 (Successor Company), and the Period of January 1, 2015 to January 31, 2015 (Predecessor Company)	3
	Consolidated Condensed Balance Sheets as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company)	4
	Consolidated Condensed Statements of Shareowner’s Equity For The Six Months Ended June 30, 2016 (Successor Company)	6
	Consolidated Condensed Statements of Cash Flows For The Six Months Ended June 30, 2016 (Successor Company), the Period of February 1, 2015 to June 30, 2015 (Successor Company), and the Period of January 1, 2015 to January 31, 2015 (Predecessor Company)	7
	Notes to Consolidated Condensed Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	63
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	121
Item 4.	Controls and Procedures	122
	PART II
Item 1A.	Risk Factors	122
Item 6.	Exhibits	130
	Signature	131

1

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)

(Unaudited)

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Revenues
Premiums and policy fees	$	853,351		$	828,058		$	1,701,720		$	1,334,444		$	260,582
Reinsurance ceded	(340,594		)	(351,196		)	(655,468		)	(498,009		)	(91,632		)
Net of reinsurance ceded	512,757			476,862			1,046,252			836,435			168,950
Net investment income	458,783			408,147			907,012			680,358			164,605
Realized investment gains (losses):
Derivative financial instruments	43,548			10,566			75,456			5,618			22,031
All other investments	88,783			(102,347		)	170,492			(137,403		)	81,153
Other-than-temporary impairment losses	(5,527		)	(13,395		)	(8,296		)	(13,395		)	(636		)
Portion recognized in other comprehensive income (before taxes)	4,560			7,661			4,712			7,661			155
Net impairment losses recognized in earnings	(967		)	(5,734		)	(3,584		)	(5,734		)	(481		)
Other income	71,938			75,459			139,116			124,640			23,388
Total revenues	1,174,842			862,953			2,334,744			1,503,914			459,646
Benefits and expenses
Benefits and settlement expenses, net of reinsurance ceded: (three and six months 2016 Successor - $274,911 and $574,179); (2015 Successor - $303,055 and $419,941); (2015 Predecessor - $87,830)	712,647			693,392			1,425,668			1,178,816			266,575
Amortization of deferred policy acquisition costs and value of business acquired	21,064			40,348			52,105			68,384			4,817
Other operating expenses, net of reinsurance ceded: (three and six months 2016 Successor - $51,664 and $100,890); (2015 Successor - $51,146 and $86,839); (2015 Predecessor - $17,700)	180,551			164,780			361,412			267,745			55,407
Total benefits and expenses	914,262			898,520			1,839,185			1,514,945			326,799
Income (loss) before income tax	260,580			(35,567		)	495,559			(11,031		)	132,847
Income tax expense (benefit)	87,787			(9,991		)	164,149			(1,875		)	44,325
Net income (loss)	$	172,793		$	(25,576	)	$	331,410		$	(9,156	)	$	88,522

See Notes to Consolidated Condensed Financial Statements

2

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Net income (loss)	$	172,793		$	(25,576	)	$	331,410		$	(9,156	)	$	88,522
Other comprehensive income (loss):
Change in net unrealized gains (losses) on investments, net of income tax: (three and six months 2016 Successor - $312,512 and $547,797); (2015 Successor - $(324,134) and $(481,511)); (2015 Predecessor - $259,616)	580,379			(601,964		)	1,017,335			(894,238		)	482,143
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and six months 2016 Successor - $(5,588) and $(6,610)); (2015 Successor - $834 and $703); (2015 Predecessor - $(2,244))	(10,377		)	1,550			(12,274		)	1,308			(4,166		)
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (three and six months 2016 Successor - $(1,543) and $(1,384)); (2015 Successor - $(2,458) and $(2,458)); (2015 Predecessor - $(131))	(2,866		)	(4,566		)	(2,572		)	(4,566		)	(243		)
Change in accumulated (loss) gain - derivatives, net of income tax: (2015 Successor - $12 and $0); (2015 Predecessor - $5)	—			23			—			—			9
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2015 Successor - $(31) and $0); (2015 Predecessor - $13)	—			(59		)	—			—			23
Total other comprehensive income (loss)	567,136			(605,016		)	1,002,489			(897,496		)	477,766
Total comprehensive income (loss)	$	739,929		$	(630,592	)	$	1,333,899		$	(906,652	)	$	566,288

See Notes to Consolidated Condensed Financial Statements

3

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

	Successor Company
	As of June 30, 2016		As of December 31, 2015
	(Dollars In Thousands)
Assets
Fixed maturities, at fair value (amortized cost: Successor 2016 - $39,286,199; 2015 - $38,389,859)	$	38,675,207	$	35,507,098
Fixed maturities, at amortized cost (fair value: Successor 2016 - $2,853,788; 2015 - $515,000)	2,779,280		593,314
Equity securities, at fair value (cost: Successor - $681,496; 2015 - $693,147)	702,796		699,925
Mortgage loans (related to securitizations: Successor 2016 - $305,373; 2015 - $359,181)	5,748,675		5,662,812
Investment real estate, net of accumulated depreciation (Successor 2016 - $173; 2015 - $133)	7,028		11,118
Policy loans	1,670,218		1,699,508
Other long-term investments	933,646		594,036
Short-term investments	244,363		263,837
Total investments	50,761,213		45,031,648
Cash	295,143		212,358
Accrued investment income	478,505		472,694
Accounts and premiums receivable	284,443		54,054
Reinsurance receivables	5,206,522		5,307,556
Deferred policy acquisition costs and value of business acquired	1,895,166		1,562,373
Goodwill	732,443		732,443
Other intangibles, net of accumulated amortization (Successor 2016 - $58,524; 2015 - $37,869)	624,475		645,131
Property and equipment, net of accumulated depreciation (Successor 2016 - $12,288; 2015 - $7,908)	102,397		101,600
Other assets	267,089		255,283
Income tax receivable	3,951		—
Assets related to separate accounts
Variable annuity	12,891,214		12,829,188
Variable universal life	831,818		827,610
Total assets	$	74,374,379	$	68,031,938

 See Notes to Consolidated Condensed Financial Statements

4

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED BALANCE SHEETS

(continued)

(Unaudited)

	Successor Company
	As of June 30, 2016			As of December 31, 2015
	(Dollars In Thousands)
Liabilities
Future policy benefits and claims	$	30,590,080		$	29,703,190
Unearned premiums	665,923			651,205
Total policy liabilities and accruals	31,256,003			30,354,395
Stable value product account balances	2,838,674			2,131,822
Annuity account balances	10,678,701			10,719,862
Other policyholders’ funds	1,354,970			1,069,572
Other liabilities	2,011,854			1,230,500
Income tax payable	—			76,584
Deferred income taxes	1,980,260			1,215,180
Non-recourse funding obligations	2,981,271			1,951,563
Repurchase program borrowings	160,000			438,185
Liabilities related to separate accounts
Variable annuity	12,891,214			12,829,188
Variable universal life	831,818			827,610
Total liabilities	66,984,765			62,844,461
Commitments and contingencies - Note 13
Shareowner’s equity
Preferred Stock; $1 par value, shares authorized: 2,000; Liquidation preference: $2,000	2			2
Common Stock, $1 par value, shares authorized and issued: 2016 and 2015 - 5,000,000	5,000			5,000
Additional paid-in-capital	7,422,407			6,274,169
Retained earnings	206,107			154,697
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on investments, net of income tax: (Successor 2016 - $(129,735); 2015 - $(670,922))	(240,937		)	(1,245,998		)
Net unrealized gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2016 - $(1,596); 2015 - $(212))	(2,965		)	(393		)
Total shareowner’s equity	7,389,614			5,187,477
Total liabilities and shareowner’s equity	$	74,374,379		$	68,031,938

See Notes to Consolidated Condensed Financial Statements

5

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER’S EQUITY

(Unaudited)

	Preferred Stock		Common Stock		Additional Paid-In-Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareowner’s Equity
Successor Company
	(Dollars In Thousands)
Balance, December 31, 2015	$	2	$	5,000	$	6,274,169	$	154,697		$	(1,246,391	)	$	5,187,477
Net income for the six months ended June 30, 2016							331,410						331,410
Other comprehensive income										1,002,489			1,002,489
Comprehensive income for the six months ended June 30, 2016													1,333,899
Capital contribution					1,148,238								1,148,238
Dividends paid to the parent company							(280,000		)				(280,000		)
Balance, June 30, 2016	$	2	$	5,000	$	7,422,407	$	206,107		$	(243,902	)	$	7,389,614

See Notes to Consolidated Condensed Financial Statements

6

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Successor Company						Predecessor Company
	For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Cash flows from operating activities
Net income (loss)	$	331,410		$	(9,156	)	$	88,522
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment losses (gains)	(242,364		)	137,519			(102,703		)
Amortization of deferred policy acquisition costs and value of business acquired	52,105			68,384			4,817
Capitalization of deferred policy acquisition costs	(163,578		)	(132,103		)	(22,799		)
Depreciation and amortization expense	24,361			20,754			796
Deferred income tax	225,255			(62,353		)	91,709
Accrued income tax	(80,535		)	146,576			(48,469		)
Interest credited to universal life and investment products	365,702			422,093			79,088
Policy fees assessed on universal life and investment products	(633,366		)	(491,769		)	(90,288		)
Change in reinsurance receivables	101,034			138,282			(98,148		)
Change in accrued investment income and other receivables	(63,753		)	(8,398		)	(1,285		)
Change in policy liabilities and other policyholders’ funds of traditional life and health products	(187,989		)	(158,210		)	176,119
Trading securities:
Maturities and principal reductions of investments	54,710			40,104			17,946
Sale of investments	299,517			78,302			26,422
Cost of investments acquired	(331,920		)	(135,770		)	(27,289		)
Other net change in trading securities	31,036			83,770			(26,901		)
Amortization of premiums and accretion of discounts on investments and mortgage loans	195,147			170,248			3,420
Change in other liabilities	301,898			9,179			211,031
Other, net	(8,653		)	(25,256		)	(133,928		)
Net cash provided by operating activities	$	270,017		$	292,196		$	148,060

See Notes to Consolidated Condensed Financial Statements

7

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(continued)

	Successor Company						Predecessor Company
	For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Cash flows from investing activities
Maturities and principal reductions of investments, available-for-sale	$	630,055		$	202,190		$	59,028
Sale of investments, available-for-sale	1,209,832			2,057,339			200,716
Cost of investments acquired, available-for-sale	(2,746,767		)	(2,584,927		)	(150,030		)
Change in investments, held-to-maturity	(2,188,000		)	(35,000		)	—
Mortgage loans:
New lendings	(575,386		)	(637,908		)	(100,530		)
Repayments	457,181			510,580			45,741
Change in investment real estate, net	3,883			52			7
Change in policy loans, net	29,290			32,008			6,365
Change in other long-term investments, net	(66,928		)	(154,647		)	(25,372		)
Change in short-term investments, net	(4,060		)	33,933			(39,312		)
Net unsettled security transactions	112,433			(46,266		)	37,510
Purchase of property and equipment	(4,502		)	(2,444		)	(648		)
Amounts received from reinsurance transaction	325,800			—			—
Net cash (used in) provided by investing activities	$	(2,817,169	)	$	(625,090	)	$	33,475
Cash flows from financing activities
Issuance (repayment) of non-recourse funding obligations	2,176,700			35,000			—
Repurchase program borrowings	(278,185		)	552,213			—
Dividends/Return of capital to parent company	(280,000		)	(230,000		)	—
Investment product deposits and change in universal life deposits	2,219,455			1,222,581			169,233
Investment product withdrawals	(1,208,033		)	(1,225,576		)	(240,147		)
Other financing activities, net	—			350			(4		)
Net cash provided by (used in) financing activities	$	2,629,937		$	354,568		$	(70,918	)
Change in cash	82,785			21,674			110,617
Cash at beginning of period	212,358			378,903			268,286
Cash at end of period	$	295,143		$	400,577		$	378,903

See Notes to Consolidated Condensed Financial Statements

8

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1.BASIS OF PRESENTATION

Basis of Presentation

Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. On February 1, 2015, PLC became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (“Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into PLC (the “Merger”). Prior to February 1, 2015, and for the periods reported as “predecessor”, PLC’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, PLC and the Company remain as SEC registrants within the United States. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products.

In conjunction with the Merger, the Company elected to apply “pushdown” accounting by applying the guidance allowed by ASC Topic 805, Business Combinations, including the initial recognition of most of the Company’s assets and liabilities at fair value as of the acquisition date, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. The new basis of accounting will be the basis of the accounting records for assets and liabilities held at the acquisition date in the preparation of future financial statements and related disclosures after the Merger date.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three and six months ended June 30, 2016 (Successor Company), are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2016 (Successor Company). The year-end consolidated condensed financial data included herein was derived from audited financial statements but does not include all disclosures required by GAAP within this report. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company).

The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors.

Entities Included

The consolidated condensed financial statements for the predecessor and successor periods presented in this report include the accounts of Protective Life Insurance Company and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

For a full description of significant accounting policies, see Note 2 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company). There were no significant changes to the Company's accounting policies during the six months ended June 30, 2016 (Successor Company).

Accounting Pronouncements Recently Adopted

Accounting Standards Update ("ASU") No. 2015-02-Consolidation-Amendments to the Consolidation Analysis. This Update makes several targeted changes to generally accepted accounting principles, including a) eliminating the presumption that a general partner should consolidate a limited partnership and b) eliminating the consolidation model specific to limited partnerships. The amendments also clarify when fees and related party relationships should be considered in the consolidation of variable interest entities. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

ASU No. 2015-03-Interest-Imputation of Interest. The objective of this Update is to eliminate diversity in practice related to the presentation of debt issuance costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Update is effective for fiscal years beginning after December 15, 2015, and requires revised presentation of debt issuance costs in all periods presented in the financial statements. The Update did not impact

9

the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

ASU No. 2015-15 - Interest - Imputation of Interest - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The objective of this Update is to clarify the SEC Staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on the topic in ASU No. 2015-03. This Update reflects the SEC Staff’s decision to not object when an entity defers and presents debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

ASU No. 2015-05 - Intangibles - Goodwill and Other - Internal-Use Software. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The Update is effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

Accounting Pronouncements Not Yet Adopted

ASU No. 2014-09-Revenue from Contracts with Customers (Topic 606). This Update provides for significant revisions to the recognition of revenue from contracts with customers across various industries. Under the new guidance, entities are required to apply a prescribed 5-step process to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting for revenues associated with insurance products is not within the scope of this Update. The Update was originally effective for annual and interim periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU No. 2015-14 - Revenues from Contracts with Customers: Deferral of the Effective Date, to defer the effective date of ASU No. 2014-09 by one year to annual and interim periods beginning after December 15, 2017. Early adoption will be allowed, but not before the original effective date. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its non-insurance operations.

ASU No. 2014-15-Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This Update will require management to assess an entity’s ability to continue as a going concern, and will require footnote disclosures in certain circumstances. Under the updated guidance, management should consider relevant conditions and evaluate whether it is probable that the entity will be unable to meet its obligations within one year after the issuance date of the financial statements. The Update is effective for annual periods ending December 31, 2016 and for annual and interim periods thereafter, with early adoption permitted. The amendments in this Update will not impact the Company’s financial position or results of operations. However, the new guidance will require a formal assessment of going concern by management based on criteria prescribed in the new guidance. The Company is reviewing its policies and processes to ensure compliance with the new guidance.

ASU No. 2015-09 - Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts. The amendments in this Update require additional disclosures for short-duration contracts issued by insurance entities. The additional disclosures focus on the liability for unpaid claims and claim adjustment expenses and include incurred and paid claims development information by accident year in tabular form, along with a reconciliation of this information to the statement of financial position. For accident years included in the development tables, the amendments also require disclosure of the total incurred-but-not-reported liabilities and expected development on reported claims, along with claims frequency information unless impracticable. Finally, the amendments require disclosure of the historical average annual percentage payout of incurred claims. With the exception of the current reporting period, claims development information may be presented as supplementary information. The Update is effective for annual periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The Company does not anticipate that the additional disclosures introduced in this Update will be material to its financial statements.

ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, the Update requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017. The Company is reviewing its policies and processes to ensure compliance with the revised guidance.

ASU No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change will relate to the accounting model used by lessees. The Update will require all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the revised guidance.

ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this Update introduce a new impairment model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the

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scope of the new model, an entity will recognize as an allowance its estimate of the contractual cash flows not expected to be collected. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results.

3.REINSURANCE AND FINANCING TRANSACTIONS

On January 15, 2016, the Company completed the transaction contemplated by the Master Agreement, dated September 30, 2015 (the “Master Agreement”), with Genworth Life and Annuity Insurance Company (“GLAIC”). Pursuant to the Master Agreement, effective January 1, 2016, the Company entered into a reinsurance agreement (the “Reinsurance Agreement”) under the terms of which the Company coinsures certain term life insurance business of GLAIC (the “GLAIC Block”). In connection with the reinsurance transaction, on January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18-year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by the Company and West Coast Life Insurance Company (“WCL”), a direct wholly owned subsidiary of the Company. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion. Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City notes for the 18-year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. In connection with the transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. As a result of the financing transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. Also on January 15, 2016, Golden Gate paid an extraordinary dividend of $300 million to the Company as approved by the Vermont Department of Financial Regulation.

The transactions described above resulted in an increase to total assets and total liabilities of $2.8 billion. Of the $2.8 billion increase in total assets, $0.6 billion was the result of the reinsurance transaction with GLAIC which included a $280 million increase in VOBA. The remaining $2.2 billion increase to total assets and liabilities is associated with the financing transaction between Golden Gate and Steel City.

The Company considered whether the Reinsurance Agreement constituted the purchase of a business for accounting and reporting purposes pursuant to ASC 805, Business Combinations. While the transaction included a continuation of the revenue-producing activities associated with the reinsured policies, it did not result in the acquisition of a market distribution system, sales force or production techniques. Based on Management’s decision not to pursue distribution opportunities or future sales related to the reinsured policies, the Company accounted for the transaction as a reinsurance agreement under ASC 944, Insurance Contracts and asset acquisition under ASC 805. Accordingly, the Company recorded the assets and liabilities acquired under the reinsurance agreement at fair value and recognized an intangible asset (value of business acquired or “VOBA”) equal to the excess of the fair value of assets acquired over liabilities assumed, measured in accordance with the Company's accounting policies for insurance and reinsurance contracts that it issues or holds pursuant to ASC 944.

4.DAI-ICHI MERGER

On February 1, 2015 PLC, subsequent to required approvals from PLC’s shareholders and relevant regulatory authorities, became a wholly owned subsidiary of Dai-ichi Life as contemplated by the Agreement and Plan of Merger (the “Merger Agreement”) with Dai-ichi Life and DL Investment (Delaware), Inc., a Delaware corporation and wholly owned subsidiary of Dai-ichi Life, which provided for the Merger of DL Investment (Delaware), Inc. with and into PLC, with PLC surviving the Merger as a wholly owned subsidiary of Dai-ichi Life. On February 1, 2015 each share of PLC’s common stock outstanding was converted into the right to receive $70 per share, without interest (the “Per Share Merger Consideration”). The aggregate cash consideration paid in connection with the Merger for the outstanding shares of common stock was approximately $5.6 billion and paid directly to the shareowners of record by Dai-ichi Life. The Merger provided Dai-ichi Life with a platform for growth in the United States, where it did not previously have a significant presence. In connection with the completion of the Merger, PLC’s previously publicly traded equity was delisted from the NYSE, although PLC and the Company remain SEC registrants for financial reporting purposes in the United States.

The Merger was accounted for under the acquisition method of accounting under ASC Topic 805. In accordance with ASC Topic 805-20-30, all identifiable assets acquired and liabilities assumed were measured at fair value as of the acquisition date. On the date of the Merger, goodwill of $735.7 million represented the cost in excess of the fair value of PLC’s net assets acquired (including identifiable intangibles) in the Merger, and reflected the Company’s assembled workforce, future growth potential and other sources of value not associated with identifiable assets. During the measurement period subsequent to February 1, 2015, the Company made adjustments to provisional amounts related to certain tax balances that resulted in a decrease to goodwill of $3.3 million from the amount recorded at the Merger date. The balance of goodwill associated with the Merger as of December 31, 2015 (Successor Company) and June 30, 2016 (Successor Company) was $732.4 million. None of the goodwill is tax deductible.

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The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date:

	Fair Value
	As of
	February 1, 2015
	(Dollars In Thousands)
Assets
Fixed maturities	$	38,342,948
Equity securities	699,081
Mortgage loans	5,580,229
Investment real estate	7,456
Policy loans	1,751,872
Other long-term investments	657,346
Short-term investments	311,236
Total investments	47,350,168
Cash	378,903
Accrued investment income	483,691
Accounts and premiums receivable	104,260
Reinsurance receivables	5,538,637
Value of business acquired	1,278,064
Goodwill	735,712
Other intangibles	683,000
Property and equipment	102,736
Other assets	224,555
Income tax receivable	50,117
Assets related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total assets	$	70,719,618
Liabilities
Future policy and benefit claims	$	30,195,397
Unearned premiums	622,278
Total policy liabilities and accruals	30,817,675
Stable value product account balances	1,932,277
Annuity account balances	10,941,661
Other policyholders’ funds	1,388,083
Other liabilities	1,533,666
Deferred income taxes	1,861,632
Non-recourse funding obligations	1,895,636
Repurchase program borrowings	50,000
Liabilities related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total liabilities	64,210,405
Net assets acquired	$	6,509,213

Treatment of Benefit Plans

At or immediately prior to the Merger, each stock appreciation right with respect to shares of PLC’s Common Stock granted under any Stock Plan (each, a “SAR”) that were outstanding and unexercised immediately prior to the Merger and that had a base price per share of Common Stock underlying such SAR (the “Base Price”) that was less than the Per Share Merger Consideration (each such SAR, an “In-the-Money SAR”), whether or not exercisable or vested, was cancelled and converted into the right to receive an amount in cash less any applicable withholding taxes, determined by multiplying (i) the excess of the Per

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Share Merger Consideration over the Base Price of such In-the-Money SAR by (ii) the number of shares of Common Stock subject to such In-the-Money SAR (such amount, the “SAR Consideration”).

At or immediately prior to the effective time of the Merger, each restricted stock unit with respect to a share of PLC Common Stock granted under any Stock Plan (each, a “RSU”) that was outstanding immediately prior to the Merger, whether or not vested, was cancelled and converted into the right to receive an amount in cash, without interest, less any applicable withholding taxes, determined by multiplying (i) the Per Share Merger Consideration by (ii) the number of RSUs.

The number of performance shares earned for each award of performance shares granted under any Stock Plan was calculated by determining the number of performance shares that would have been paid if the subject award period had ended on the December 31 immediately preceding the Merger (based on the conditions set for payment of performance share awards for the subject award period), provided that the number of performance shares earned for each award were not less than the aggregate number of performance shares at the target performance level. Each performance share earned that was outstanding immediately prior to the Merger, whether or not vested, was cancelled and converted into the right to receive an amount in cash, without interest, less any applicable withholding taxes, determined by multiplying (i) the Per Share Merger Consideration by (ii) the number of Performance Shares.

5.MONY CLOSED BLOCK OF BUSINESS

In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013.

Assets allocated to the Closed Block inure solely to the benefit of each Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account.

The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in accumulated other comprehensive income (loss) (“AOCI”)) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life, this actuarial calculation of the expected timing of MONY’s Closed Block earnings was recalculated and reset as of February 1, 2015, along with the establishment of a policyholder dividend obligation as of such date.

If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block.

Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block.

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Summarized financial information for the Closed Block as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company) is as follows:

	Successor Company
	As of June 30, 2016		As of December 31, 2015
	(Dollars In Thousands)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,939,342	$	6,010,520
Policyholder dividend obligation	232,422		—
Other liabilities	13,268		24,539
Total closed block liabilities	6,185,032		6,035,059
Closed block assets
Fixed maturities, available-for-sale, at fair value	$	4,677,305	$	4,426,090
Mortgage loans on real estate	245,997		247,162
Policy loans	726,563		746,102
Cash	—		34,420
Other assets	148,763		162,640
Total closed block assets	5,798,628		5,616,414
Excess of reported closed block liabilities over closed block assets	386,404		418,645
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation of $(9,488) (Successor) and $(179,360) (Successor)	—		(18,597		)
Future earnings to be recognized from closed block assets and closed block liabilities	$	386,404	$	400,048

Reconciliation of the policyholder dividend obligation is as follows:

	Successor Company						Predecessor Company
	For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Policyholder dividend obligation, beginning of period	$	—		$	323,432		$	366,745
Applicable to net revenue (losses)	(28,921		)	(15,096		)	(1,369		)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $5,109 (Successor); $89,618 (2015 - Successor); $47,277 (2015 - Predecessor)	261,343			(256,053		)	135,077
Policyholder dividend obligation, end of period	$	232,422		$	52,283		$	500,453

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Closed Block revenues and expenses were as follows:

	Successor Company								Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)								(Dollars In Thousands)
Revenues
Premiums and other income	$	47,320	$	49,998	$	91,239	$	81,669	$	15,065
Net investment income	52,008		54,833		102,875		87,681		19,107
Net investment gains	450		2,216		637		2,850		568
Total revenues	99,778		107,047		194,751		172,200		34,740
Benefits and other deductions
Benefits and settlement expenses	92,029		98,975		172,084		154,746		31,152
Other operating expenses	653		263		1,677		474		—
Total benefits and other deductions	92,682		99,238		173,761		155,220		31,152
Net revenues before income taxes	7,096		7,809		20,990		16,980		3,588
Income tax expense	2,484		2,733		7,346		5,943		1,256
Net revenues	$	4,612	$	5,076	$	13,644	$	11,037	$	2,332

6.INVESTMENT OPERATIONS

Net realized gains (losses) for all other investments are summarized as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Fixed maturities	$	16,730		$	3,329		$	22,432		$	3,702		$	6,891
Equity securities	202			21			36			21			—
Impairments on corporate securities	(964		)	(5,734		)	(3,581		)	(5,734		)	(481		)
Modco trading portfolio	76,201			(108,741		)	154,355			(141,901		)	73,062
Other investments	(4,353		)	3,044			(6,334		)	775			1,200
Total realized gains (losses) - investments	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672

Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Gross realized gains	$	18,752		$	5,425		$	27,781		$	6,932		$	6,920
Gross realized losses	$	(2,784	)	$	(7,809	)	$	(8,894	)	$	(8,943	)	$	(469	)
Impairments losses included in gross realized losses	$	(964	)	$	(5,734	)	$	(3,581	)	$	(5,734	)	$	—

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The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Securities in an unrealized gain position:
Fair value (proceeds)	$	513,544		$	430,058		$	819,775		$	712,938		$	172,551
Gains realized	$	18,752		$	5,425		$	27,781		$	6,932		$	6,920
Securities in an unrealized loss position(1):
Fair value (proceeds)	$	6,895		$	28,644		$	60,582		$	49,326		$	435
Losses realized(2)	$	(1,820	)	$	(2,075	)	$	(5,313	)	$	(3,209	)	$	(29	)
(1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process.
(2) The losses realized for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), were immaterial to the Company.

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The amortized cost and fair value of the Company’s investments classified as available-for-sale as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
Successor Company
As of June 30, 2016
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	1,891,316	$	49,750	$	(9,253	)	$	1,931,813	$	(1	)
Commercial mortgage-backed securities	1,552,028		29,870		(3,726		)	1,578,172		—
Other asset-backed securities	1,151,430		5,267		(36,055		)	1,120,642		—
U.S. government-related securities	1,350,769		21,232		(205		)	1,371,796		—
Other government-related securities	18,348		332		—			18,680		—
States, municipals, and political subdivisions	1,727,664		31,429		(21,594		)	1,737,499		—
Corporate securities	28,740,691		373,820		(1,051,924		)	28,062,587		(4,560		)
Preferred stock	64,362		1,732		(1,667		)	64,427		—
	36,496,608		513,432		(1,124,424		)	35,885,616		(4,561		)
Equity securities	673,448		26,392		(5,092		)	694,748		—
Short-term investments	206,157		—		—			206,157		—
	$	37,376,213	$	539,824	$	(1,129,516	)	$	36,786,521	$	(4,561	)
As of December 31, 2015
Fixed maturities:
Residential mortgage-backed securities	$	1,773,099	$	9,286	$	(17,112	)	$	1,765,273	$	—
Commercial mortgage-backed securities	1,327,288		428		(41,852		)	1,285,864		—
Other asset-backed securities	813,056		2,758		(18,763		)	797,051		—
U.S. government-related securities	1,566,260		449		(34,532		)	1,532,177		—
Other government-related securities	18,483		—		(743		)	17,740		—
States, municipals, and political subdivisions	1,729,732		682		(126,814		)	1,603,600		—
Corporate securities	28,433,530		26,147		(2,681,020		)	25,778,657		(605		)
Preferred stock	64,362		192		(1,867		)	62,687		—
	35,725,810		39,942		(2,922,703		)	32,843,049		(605		)
Equity securities	684,888		13,255		(6,477		)	691,666		—
Short-term investments	202,110		—		—			202,110		—
	$	36,612,808	$	53,197	$	(2,929,180	)	$	33,736,825	$	(605	)

(1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above.

As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), the Company had an additional $2.8 billion and $2.7 billion of fixed maturities, $8.0 million and $8.3 million of equity securities, and $38.2 million and $61.7 million of short-term investments classified as trading securities, respectively.

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The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of June 30, 2016 (Successor Company), by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Successor Company
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Due in one year or less	$	750,175	$	750,605	$	—	$	—
Due after one year through five years	6,878,977		6,918,323		—		—
Due after five years through ten years	7,673,357		7,783,110		—		—
Due after ten years	21,194,099		20,433,578		2,779,280		2,853,788
	$	36,496,608	$	35,885,616	$	2,779,280	$	2,853,788

The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Other-than-temporary impairments	$	(5,527	)	$	(13,395	)	$	(8,296	)	$	(13,395	)	$	(636	)
Non-credit impairment losses recorded in other comprehensive income	4,560			7,661			4,712			7,661			155
Net impairment losses recognized in earnings	$	(967	)	$	(5,734	)	$	(3,584	)	$	(5,734	)	$	(481	)

There were no other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell for the three and six months ended June 30, 2016 (Successor Company), for the three months ended June 30, 2015 (Successor Company), for the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): 

	Successor Company										Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Beginning balance	$	2,619		$	—	$	22,761		$	—	$	15,463
Additions for newly impaired securities	964			4,472		3,056			4,472		—
Additions for previously impaired securities	—			—		525			—		221
Reductions for previously impaired securities due to a change in expected cash flows	—			—		(22,759		)	—		—
Reductions for previously impaired securities that were sold in the current period	(2,619		)	—		(2,619		)	—		—
Ending balance	$	964		$	4,472	$	964		$	4,472	$	15,684

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The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2016 (Successor Company):

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	192,301	$	(3,103	)	$	152,965	$	(6,150	)	$	345,266	$	(9,253	)
Commercial mortgage-backed securities	43,965		(283		)	194,550		(3,443		)	238,515		(3,726		)
Other asset-backed securities	90,316		(1,188		)	550,860		(34,867		)	641,176		(36,055		)
U.S. government-related securities	1,283		(5		)	57,372		(200		)	58,655		(205		)
Other government-related securities	—		—			—		—			—		—
States, municipalities, and political subdivisions	34,112		(274		)	718,798		(21,320		)	752,910		(21,594		)
Corporate securities	2,336,766		(128,908		)	13,476,384		(923,016		)	15,813,150		(1,051,924		)
Preferred stock	—		—			19,271		(1,667		)	19,271		(1,667		)
Equities	55,137		(1,225		)	87,602		(3,867		)	142,739		(5,092		)
	$	2,753,880	$	(134,986	)	$	15,257,802	$	(994,530	)	$	18,011,682	$	(1,129,516	)

RMBS and CMBS had gross unrealized losses greater than twelve months of $6.2 million and $3.4 million, respectively, as of June 30, 2016 (Successor Company). Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments.

The other asset-backed securities had a gross unrealized loss greater than twelve months of $34.9 million as of June 30, 2016 (Successor Company). This category predominately includes student-loan backed auction rate securities, the underlying collateral, of which is at least 97% guaranteed by the Federal Family Education Loan Program (“FFELP”). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary.

The U.S. government-related securities and the states, municipalities, and political subdivisions category had gross unrealized losses greater than twelve months of $0.2 million and $21.3 million, respectively, as of June 30, 2016 (Successor Company). These declines were entirely related to changes in interest rates.

The corporate securities category had gross unrealized losses greater than twelve months of $923.0 million as of June 30, 2016 (Successor Company). The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information

As of June 30, 2016 (Successor Company), the Company had a total of 1,414 positions that were in an unrealized loss position, but the Company does not consider these unrealized loss positions to be other-than-temporary. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and the Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities.

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The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2015 (Successor Company):

	Less Than 12 Months					12 Months or More				Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	977,433	$	(17,112	)	$	—	$	—	$	977,433	$	(17,112	)
Commercial mortgage-backed securities	1,232,495		(41,852		)	—		—		1,232,495		(41,852		)
Other asset-backed securities	633,274		(18,763		)	—		—		633,274		(18,763		)
U.S. government-related securities	1,291,476		(34,532		)	—		—		1,291,476		(34,532		)
Other government-related securities	17,740		(743		)	—		—		17,740		(743		)
States, municipalities, and political subdivisions	1,566,752		(126,814		)	—		—		1,566,752		(126,814		)
Corporate securities	24,235,121		(2,681,020		)	—		—		24,235,121		(2,681,020		)
Preferred stock	34,685		(1,867		)	—		—		34,685		(1,867		)
Equities	248,493		(6,477		)	—		—		248,493		(6,477		)
	$	30,237,469	$	(2,929,180	)	$	—	$	—	$	30,237,469	$	(2,929,180	)

The book value of the Company’s investment portfolio was marked to fair value as of February 1, 2015 (Successor Company), in conjunction with the Dai-ichi Merger which resulted in the elimination of previously unrealized gains and losses from accumulated other comprehensive income. The level of interest rates as of February 1, 2015 (Successor Company) resulted in an increase in the carrying value of the Company’s investments. Since February 1, 2015 (Successor Company), interest rates have increased resulting in net unrealized losses in the Company’s investment portfolio.

The Company does not consider these unrealized loss positions to be other-than-temporary, based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and does not intend to sell or expect to be required to sell the securities before recovering the Company's amortized cost of the securities.

As of June 30, 2016 (Successor Company), the Company had securities in its available-for-sale portfolio which were rated below investment grade of $1.8 billion and had an amortized cost of $1.9 billion. In addition, included in the Company’s trading portfolio, the Company held $270.8 million of securities which were rated below investment grade. Approximately $324.5 million of the available-for-sale and trading securities that were below investment grade securities were not publicly traded.

The change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale is summarized as follows:

	Successor Company										Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Fixed maturities	$	845,933	$	(1,039,827	)	$	1,476,650	$	(1,383,066	)	$	669,160
Equity securities	9,509		(9,048		)	9,439		(7,537		)	12,172

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The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI
Successor Company
As of June 30, 2016
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain LLC	$	626,280	$	—	$	(22,879	)	$	603,401	$	—
Steel City LLC	2,153,000		97,387		—			2,250,387		—
	$	2,779,280	$	97,387	$	(22,879	)	$	2,853,788	$	—
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI
Successor Company
As of December 31, 2015
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain LLC	$	593,314	$	—	$	(78,314	)	$	515,000	$	—
	$	593,314	$	—	$	(78,314	)	$	515,000	$	—

During the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not record any other-than-temporary impairments on held-to-maturity securities.

The Company’s held-to-maturity securities had $97.4 million of gross unrealized gains and $22.9 million of gross unrecognized holding losses as of June 30, 2016 (Successor Company). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. These held-to-maturity securities are issued by affiliates of the Company which are considered variable interest entities ("VIE's"). The Company is not the primary beneficiary of these entities and thus the securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are affiliates of the Company.

The Company’s held-to-maturity securities had $78.3 million of gross unrecognized holding losses as of December 31, 2015 (Successor Company). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information.

Variable Interest Entities

The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a variable interest entity ("VIE"). If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

Based on this analysis, the Company had an interest in one wholly owned subsidiary, Red Mountain, LLC ("Red Mountain") as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), that was determined to be a VIE.

The activity most significant to Red Mountain is the issuance of a note in connection with a financing transaction involving Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”) and the Company in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued the note to Golden Gate V. Credit enhancement on the Red Mountain Note is provided by an unrelated third party. For details of this transaction, see Note 12, Debt and Other Obligations. The Company had the power, via its 100% ownership through an affiliate, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne

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primarily by the third party in its function as provider of credit enhancement on the Red Mountain Note. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment of $10,000. Additionally, the Company has guaranteed Red Mountain’s payment obligation for the credit enhancement fee to the unrelated third party provider. As of June 30, 2016 (Successor Company), no payments have been made or required related to this guarantee.

7.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material.

The Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument:

·Level 1: Unadjusted quoted prices for identical assets or liabilities in an active market.

·Level 2: Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following:

a) Quoted prices for similar assets or liabilities in active markets

b) Quoted prices for identical or similar assets or liabilities in non-active markets

c) Inputs other than quoted market prices that are observable

d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.

·Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

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The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 (Successor Company):

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,931,810	$	3	$	1,931,813
Commercial mortgage-backed securities	—		1,578,172		—		1,578,172
Other asset-backed securities	—		587,501		533,141		1,120,642
U.S. government-related securities	1,108,503		263,293		—		1,371,796
State, municipalities, and political subdivisions	—		1,737,499		—		1,737,499
Other government-related securities	—		18,680		—		18,680
Corporate securities	—		27,279,444		783,143		28,062,587
Preferred stock	45,155		19,272		—		64,427
Total fixed maturity securities - available-for-sale	1,153,658		33,415,671		1,316,287		35,885,616
Fixed maturity securities - trading
Residential mortgage-backed securities	—		271,994		—		271,994
Commercial mortgage-backed securities	—		157,176		—		157,176
Other asset-backed securities	—		123,076		151,964		275,040
U.S. government-related securities	41,639		4,868		—		46,507
State, municipalities, and political subdivisions	—		362,504		—		362,504
Other government-related securities	—		60,261		—		60,261
Corporate securities	—		1,595,943		16,587		1,612,530
Preferred stock	3,432		147		—		3,579
Total fixed maturity securities - trading	45,071		2,575,969		168,551		2,789,591
Total fixed maturity securities	1,198,729		35,991,640		1,484,838		38,675,207
Equity securities	636,270		—		66,526		702,796
Other long-term investments (1)	311,141		266,478		62,920		640,539
Short-term investments	240,841		3,522		—		244,363
Total investments	2,386,981		36,261,640		1,614,284		40,262,905
Cash	295,143		—		—		295,143
Assets related to separate accounts
Variable annuity	12,891,214		—		—		12,891,214
Variable universal life	831,818		—		—		831,818
Total assets measured at fair value on a recurring basis	$	16,405,156	$	36,261,640	$	1,614,284	$	54,281,080
Liabilities:
Annuity account balances(2)	$	—	$	—	$	88,820	$	88,820
Other liabilities (1)	59,711		142,794		581,046		783,551
Total liabilities measured at fair value on a recurring basis	$	59,711	$	142,794	$	669,866	$	872,371

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

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The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (Successor Company):

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,765,270	$	3	$	1,765,273
Commercial mortgage-backed securities	—		1,285,864		—		1,285,864
Other asset-backed securities	—		210,020		587,031		797,051
U.S. government-related securities	1,054,353		477,824		—		1,532,177
State, municipalities, and political subdivisions	—		1,603,600		—		1,603,600
Other government-related securities	—		17,740		—		17,740
Corporate securities	83		24,876,455		902,119		25,778,657
Preferred stock	43,073		19,614		—		62,687
Total fixed maturity securities - available-for-sale	1,097,509		30,256,387		1,489,153		32,843,049
Fixed maturity securities - trading
Residential mortgage-backed securities	—		286,658		—		286,658
Commercial mortgage-backed securities	—		146,743		—		146,743
Other asset-backed securities	—		122,511		152,912		275,423
U.S. government-related securities	233,592		4,755		—		238,347
State, municipalities, and political subdivisions	—		313,354		—		313,354
Other government-related securities	—		58,827		—		58,827
Corporate securities	—		1,322,276		18,225		1,340,501
Preferred stock	2,794		1,402		—		4,196
Total fixed maturity securities - trading	236,386		2,256,526		171,137		2,664,049
Total fixed maturity securities	1,333,895		32,512,913		1,660,290		35,507,098
Equity securities	620,358		13,063		66,504		699,925
Other long-term investments (1)	113,699		141,487		68,384		323,570
Short-term investments	261,659		2,178		—		263,837
Total investments	2,329,611		32,669,641		1,795,178		36,794,430
Cash	212,358		—		—		212,358
Assets related to separate accounts
Variable annuity	12,829,188		—		—		12,829,188
Variable universal life	827,610		—		—		827,610
Total assets measured at fair value on a recurring basis	$	16,198,767	$	32,669,641	$	1,795,178	$	50,663,586
Liabilities:
Annuity account balances (2)	$	—	$	—	$	92,512	$	92,512
Other liabilities (1)	40,067		106,310		375,848		522,225
Total liabilities measured at fair value on a recurring basis	$	40,067	$	106,310	$	468,360	$	614,737

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

Determination of fair values

The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table.

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The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price approximately 90% of the Company’s available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non- binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which we purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation.

The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies.

For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value through an analysis using internal and external cash flow models developed based on spreads and, when available, market indices. The Company uses a market-based cash flow analysis to validate the reasonableness of prices received from independent brokers. These analytics, which are updated daily, incorporate various metrics (yield curves, credit spreads, prepayment rates, etc.) to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the six months ended June 30, 2016 (Successor Company).

The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3.

Asset-Backed Securities

This category mainly consists of residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). As of June 30, 2016 (Successor Company), the Company held $4.6 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities.

After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

As of June 30, 2016 (Successor Company), the Company held $685.1 million of Level 3 ABS, which included $533.1 million of other asset-backed securities classified as available-for-sale and $152.0 million of other asset-backed securities classified as trading. These securities are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate.

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Corporate Securities, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities

As of June 30, 2016 (Successor Company), the Company classified approximately $31.3 billion of corporate securities, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted- average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

The brokers and third party pricing service utilize valuation models that consist of a hybrid income and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market.

As of June 30, 2016 (Successor Company), the Company classified approximately $799.7 million of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium.

Equities

As of June 30, 2016 (Successor Company), the Company held approximately $66.5 million of equity securities classified as Level 2 and Level 3. Of this total, $65.7 million represents Federal Home Loan Bank (“FHLB”) stock. The Company believes that the cost of the FHLB stock approximates fair value.

Other long-term investments and Other liabilities

Other long-term investments and other liabilities consist entirely of free-standing and embedded derivative financial instruments. Refer to Note 8, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of June 30, 2016 (Successor Company), 75.0% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. The remaining derivatives were priced by pricing valuation models, which predominantly utilize observable market data inputs. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses.

Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets.

Derivative instruments classified as Level 2 primarily include interest rate and inflation swaps, options, and swaptions. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs.

Derivative instruments classified as Level 3 were embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities.

The embedded derivatives are carried at fair value in “other long-term investments” and “other liabilities” on the Company’s consolidated condensed balance sheet. The changes in fair value are recorded in earnings as “Realized investment gains (losses)-Derivative financial instruments”. Refer to Note 8, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses.

The fair value of the GMWB embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near- term equity market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the National Association of Insurance Commissioners 1994 Variable Annuity MGDB Mortality Table with company experience, with attained age factors varying from 44.5% - 100%. The present value of the cash flows is determined using the discount rate curve, which

26

is based upon LIBOR plus a credit spread (to represent the Company’s non-performance risk). As a result of using significant unobservable inputs, the GMWB embedded derivative is categorized as Level 3. These assumptions are reviewed on a quarterly basis.

The balance of the FIA embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 1994 Variable Annuity MGDB mortality table modified for company experience, with attained age factors varying from 49% - 80%. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3.

The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the SOA 2015 VBT Primary Tables modified for company experience, with attained age factors varying from 38% - 153%. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3.

The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. As a result, these agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in earnings. The investments supporting these agreements are designated as “trading securities”; therefore changes in their fair value are also reported in earnings. As of June 30, 2016 (Successor Company), the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $2.4 billion and the statutory unrealized gain (loss) of the securities of $253.2 million. As a result, changes in the fair value of the embedded derivatives are largely offset by the changes in fair value of the related investments and each are reported in earnings. The fair value of the embedded derivative is considered a Level 3 valuation due to the unobservable nature of the policy liabilities.

Certain of the Company’s subsidiaries have entered into interest support, yearly renewable term (“YRT”) premium support, and portfolio maintenance agreements with PLC. These agreements meet the definition of a derivative and are accounted for at fair value and are considered Level 3 valuations. The fair value of these derivatives as of June 30, 2016 (Successor Company) was $37.3 million and is included in Other long-term investments. For information regarding realized gains on these derivatives please refer to Note 8, Derivative Financial Instruments.

The Interest Support Agreement provides that PLC will make payments to Golden Gate II if actual investment income on certain of Golden Gate II’s asset portfolios falls below a calculated investment income amount as defined in the Interest Support Agreement. The calculated investment income amount is a level of investment income deemed to be sufficient to support certain of Golden Gate II’s obligations under a reinsurance agreement with the Company, dated July 1, 2007. The derivative is valued using an internal valuation model that assumes a conservative projection of investment income under an adverse interest rate scenario and the probability that the expectation falls below the calculated investment income amount. This derivative had a fair value of $29.6 million as of June 30, 2016 (Successor Company), however, interest support agreement obligations to Golden Gate II of approximately $1.5 million have been collateralized by PLC. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreement. As of June 30, 2016 (Successor Company), no payments have been triggered under this agreement.

The YRT premium support agreements provide that PLC will make payments to Golden Gate and Golden Gate II in the event that YRT premium rates increase. The derivatives are valued using an internal valuation model. The valuation model is a probability weighted discounted cash flow model. The value is primarily a function of the likelihood and severity of future YRT premium increases. The fair value of these derivatives as of June 30, 2016 (Successor Company) was $3.3 million. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

The portfolio maintenance agreements provide that PLC will make payments to Golden Gate, Golden Gate V, and WCL in the event of other-than-temporary impairments on investments that exceed defined thresholds. The derivatives are valued using an internal discounted cash flow model. The significant unobservable inputs are the projected probability and severity of credit losses used to project future cash flows on the investment portfolios. The fair value of the portfolio maintenance agreements as of June 30, 2016 (Successor Company), was $4.4 million. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

The Funds Withheld derivative results from a reinsurance agreement with Shades Creek where the economic performance of certain hedging instruments held by the Company is ceded to Shades Creek. The value of the Funds Withheld derivative is

27

directly tied to the value of the hedging instruments held in the funds withheld account. The hedging instruments predominantly consist of derivative instruments the fair values of which are classified as a Level 2 measurement; as such, the fair value of the Funds Withheld derivative has been classified as a Level 2 measurement. The fair value of the Funds Withheld derivative as of June 30, 2016 (Successor Company) was a liability of $129.5 million.

Annuity account balances

The Company records certain of its FIA reserves at fair value. The fair value is considered a Level 3 valuation. The FIA valuation model calculates the present value of future benefit cash flows less the projected future profits to quantify the net liability that is held as a reserve. This calculation is done using multiple risk neutral stochastic equity scenarios. The cash flows are discounted using LIBOR plus a credit spread. Best estimate assumptions are used for partial withdrawals, lapses, expenses and asset earned rate with a risk margin applied to each. These assumptions are reviewed at least annually as a part of the formal unlocking process. If an event were to occur within a quarter that would make the assumptions unreasonable, the assumptions would be reviewed within the quarter.

The discount rate for the fixed indexed annuities is based on an upward sloping rate curve which is updated each quarter. The discount rates for June 30, 2016 (Successor Company), ranged from a one month rate of 0.68%, a 5 year rate of 1.82%, and a 30 year rate of 3.03%. A credit spread component is also included in the calculation to accommodate non-performance risk.

Separate Accounts

Separate account assets are invested in open-ended mutual funds and are included in Level 1.

28

Valuation of Level 3 Financial Instruments

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Successor Company
	Fair Value As of June 30, 2016		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	524,166	Discounted cash flow	Liquidity premium	0.24% - 1.14% (0.55%)
				Paydown rate	9.37% - 11.91% (10.16%)
Corporate securities	758,312		Discounted cash flow	Spread over treasury	0.70% - 6.25% (2.45%)
Liabilities:
Embedded derivatives - GMWB(1)	$	151,212	Actuarial cash flow model	Mortality	1994 MGDB table with
					company experience
				Lapse	0.3% - 15%, depending on
					product/duration/funded
					status of guarantee
				Utilization	99%. 10% of policies have
					a one-time over-utilization
					of 400%
				Nonperformance risk	0.22% - 1.20%
Annuity account balances(2)	88,820		Actuarial cash flow model	Asset earned rate	4.53% - 5.67%
				Expenses	$83 per policy
				Withdrawal rate	2.20%
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.2% - 33.0%, depending
					on duration/surrender
					charge period
				Return on assets	1.50% - 1.85% depending on
					surrender charge period
				Nonperformance risk	0.22% - 1.20%
Embedded derivative - FIA	119,997		Actuarial cash flow model	Expenses	$83 per policy
				Withdrawal rate	1.1% - 4.5% depending on
					duration and tax qualification
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.5% - 40.0%, depending on
					on duration/surrender
					charge period
				Nonperformance risk	0.22% - 1.20%
Embedded derivative - IUL	46,711		Actuarial cash flow model	Mortality	38% - 153% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on
					duration/distribution channel
					and smoking class
				Nonperformance risk	0.22% - 1.20%

(1)The fair value for the GMWB embedded derivative is presented as a net liability for the purposes of this chart. Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value.

29

The Company has considered all reasonably available quantitative inputs as of June 30, 2016 (Successor Company), but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $202.4 million of financial instruments being classified as Level 3 as of June 30, 2016 (Successor Company). Of the $202.4 million, $160.9 million are other asset-backed securities and $41.4 million are corporate securities.

In certain cases the Company has determined that book value materially approximates fair value. As of June 30, 2016 (Successor Company), the Company held $66.5 million of financial instruments where book value approximates fair value which were predominantly FHLB stock.

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Successor Company
	Fair Value As of December 31, 2015		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	587,031	Discounted cash flow	Liquidity premium	0.27% - 1.49% (0.42%)
				Paydown rate	10.20% - 14.72% (13.11%)
Corporate securities	875,810		Discounted cash flow	Spread over	0.10% - 19.00% (2.61%)
				treasury
Liabilities:
Embedded derivatives - GMWB(1)	$	18,511	Actuarial cash flow model	Mortality	1994 MGDB table with
					company experience
				Lapse	0.3% - 15%, depending on
					product/duration/funded
					status of guarantee
				Utilization	99%. 10% of policies have
					a one-time over-utilization
					of 400%
				Nonperformance risk	0.18% - 1.04%
Annuity account balances(2)	92,512		Actuarial cash flow model	Asset earned rate	4.53% - 5.67%
				Expenses	$81 per policy
				Withdrawal rate	2.20%
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.2% - 33.0%, depending
					on duration/surrender
					charge period
				Return on assets	1.50% - 1.85% depending on
					surrender charge period
				Nonperformance risk	0.18% - 1.04%
Embedded derivative - FIA	100,329		Actuarial cash flow model	Expenses	$81.50 per policy
				Withdrawal rate	1.1% - 4.5% depending on
					duration and tax qualification
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.5% - 40.0%, depending
					on duration/surrender
					charge period
				Nonperformance risk	0.18% - 1.04%
Embedded derivative - IUL	29,629		Actuarial cash flow model	Mortality	38% - 153% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending
					on duration/distribution
					channel and smoking class
				Nonperformance risk	0.18% - 1.04%

(1)The fair value for the GMWB embedded derivative is presented as a net liability, for the purposes of this chart.  Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

30

The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value.

The Company has considered all reasonably available quantitative inputs as of December 31, 2015 (Successor Company), but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $197.5 million of financial instruments being classified as Level 3 as of December 31, 2015 (Successor Company). Of the $197.5 million, $152.9 million are other asset backed securities and $44.6 million are corporate securities.

In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2015 (Successor Company), the Company held $66.5 million of financial instruments where book value approximates fair value which are predominantly FHLB stock.

The asset-backed securities classified as Level 3 are predominantly ARS. A change in the paydown rate (the projected annual rate of principal reduction) of the ARS can significantly impact the fair value of these securities. A decrease in the paydown rate would increase the projected weighted average life of the ARS and increase the sensitivity of the ARS’ fair value to changes in interest rates. An increase in the liquidity premium would result in a decrease in the fair value of the securities, while a decrease in the liquidity premium would increase the fair value of these securities.

The fair value of corporate bonds classified as Level 3 is sensitive to changes in the interest rate spread over the corresponding U.S. Treasury rate. This spread represents a risk premium that is impacted by company specific and market factors. An increase in the spread can be caused by a perceived increase in credit risk of a specific issuer and/or an increase in the overall market risk premium associated with similar securities. The fair values of corporate bonds are sensitive to changes in spread. When holding the treasury rate constant, the fair value of corporate bonds increases when spreads decrease, and decreases when spreads increase.

The fair value of the GMWB embedded derivative is sensitive to changes in the discount rate which includes the Company’s nonperformance risk, volatility, lapse, and mortality assumptions. The volatility assumption is an observable input as it is based on market inputs. The Company’s nonperformance risk, lapse, and mortality are unobservable. An increase in the three unobservable assumptions would result in a decrease in the fair value of the liability and conversely, if there is a decrease in the assumptions the fair value would increase. The fair value is also dependent on the assumed policyholder utilization of the GMWB where an increase in assumed utilization would result in an increase in the fair value of the liability and conversely, if there is a decrease in the assumption, the fair value would decrease.

The fair value of the FIA account balance liability is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the FIA embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in discount rate and non-performance risk and decreases with increases in the discount rate and non-performance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The fair value of the FIA embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the FIA embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and nonperformance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The fair value of the IUL embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the IUL embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and non-performance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

31

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	537,831		—		769		—			(8,350		)	9,597		(7,629		)	—		—		—			923			533,141		—
Corporate securities	833,737		925		16,189		—			(694		)	9,558		(57,123		)	—		—		(16,773		)	(2,676		)	783,143		—
Total fixed maturity securities - available-for-sale	1,371,571		925		16,958		—			(9,044		)	19,155		(64,752		)	—		—		(16,773		)	(1,753		)	1,316,287		—
Fixed maturity securities - trading
Other asset-backed securities	150,683		1,822		—		(8		)	—			—		(609		)	—		—		—			76			151,964		1,814
Corporate securities	5,677		24		—		—			—			10,908		1			—		—		—			(23		)	16,587		25
Total fixed maturity securities - trading	156,360		1,846		—		(8		)	—			10,908		(608		)	—		—		—			53			168,551		1,839
Total fixed maturity securities	1,527,931		2,771		16,958		(8		)	(9,044		)	30,063		(65,360		)	—		—		(16,773		)	(1,700		)	1,484,838		1,839
Equity securities	66,504		—		—		—			—			22		—			—		—		—			—			66,526		—
Other long-term investments(1)	57,048		16,275		—		(10,403		)	—			—		—			—		—		—			—			62,920		5,872
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	1,651,483		19,046		16,958		(10,411		)	(9,044		)	30,085		(65,360		)	—		—		(16,773		)	(1,700		)	1,614,284		7,711
Total assets measured at fair value on a recurring basis	$	1,651,483	$	19,046	$	16,958	$	(10,411	)	$	(9,044	)	$	30,085	$	(65,360	)	$	—	$	—	$	(16,773	)	$	(1,700	)	$	1,614,284	$	7,711
Liabilities:
Annuity account balances(2)	$	90,123	$	—	$	—	$	(530	)	$	—		$	—	$	—		$	63	$	1,896	—			$	—		$	88,820	$	—
Other liabilities(1)	496,238		15,217		—		(100,025		)	—			—		—			—		—		—			—			581,046		(84,808		)
Total liabilities measured at fair value on a recurring basis	$	586,361	$	15,217	$	—	$	(100,555	)	$	—		$	—	$	—		$	63	$	1,896	$	—		$	—		$	669,866	$	(84,808	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the three months ended June 30, 2016 (Successor Company), there were $27.2 million transfers of securities into Level 3.

For the three months ended June 30, 2016 (Successor Company), $44.0 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2016 (Successor Company).

For the three months ended June 30, 2016 (Successor Company), there were no transfers of securities from Level 2 to Level 1.

For the three months ended June 30, 2016 (Successor Company), there were no transfers of securities from Level 1.

32

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the six months ended June 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included  in Earnings		Included  in Other Comprehensive Income		Included  in Earnings			Included  in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	587,031		6,859		769		—			(21,407		)	9,597		(58,449		)	—		—		7,457			1,284			533,141		—
Corporate securities	902,119		925		31,111		(4,135		)	(6,981		)	25,558		(81,865		)	—		—		(77,952		)	(5,637		)	783,143		—
Total fixed maturity securities - available-for-sale	1,489,153		7,784		31,880		(4,135		)	(28,388		)	35,155		(140,314		)	—		—		(70,495		)	(4,353		)	1,316,287		—
Fixed maturity securities - trading
Other asset-backed securities	152,912		2,050		—		(942		)	—			—		(2,212		)	—		—		172			(16		)	151,964		1,105
Corporate securities	18,225		332		—		(259		)	—			10,908		(4,071		)	—		—		(8,479		)	(69		)	16,587		241
Total fixed maturity securities - trading	171,137		2,382		—		(1,201		)	—			10,908		(6,283		)	—		—		(8,307		)	(85		)	168,551		1,346
Total fixed maturity securities	1,660,290		10,166		31,880		(5,336		)	(28,388		)	46,063		(146,597		)	—		—		(78,802		)	(4,438		)	1,484,838		1,346
Equity securities	66,504		—		—		—			—			22		—			—		—		—			—			66,526		—
Other long-term investments(1)	68,384		20,492		—		(27,385		)	—			1,429		—			—		—		—			—			62,920		(6,893		)
Total investments	1,795,178		30,658		31,880		(32,721		)	(28,388		)	47,514		(146,597		)	—		—		(78,802		)	(4,438		)	1,614,284		(5,547		)
Total assets measured at fair value on a recurring basis	$	1,795,178	$	30,658	$	31,880	$	(32,721	)	$	(28,388	)	$	47,514	$	(146,597	)	$	—	$	—	$	(78,802	)	$	(4,438	)	$	1,614,284	$	(5,547	)
Liabilities:
Annuity account balances(2)	$	92,512	$	—	$	—	$	(1,096	)	$	—		$	—	$	—		$	250	$	5,038	$	—		$	—		$	88,820	$	—
Other liabilities(1)	375,848		15,585		—		(220,783		)	—			—		—			—		—		—			—			581,046		(205,198		)
Total liabilities measured at fair value on a recurring basis	$	468,360	$	15,585	$	—	$	(221,879	)	$	—		$	—	$	—		$	250	$	5,038	$	—		$	—		$	669,866	$	(205,198	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the six months ended June 30, 2016 (Successor Company), $71.3 million of securities were transferred into Level 3.

For the six months ended June 30, 2016 (Successor Company), $150.1 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2016 (Successor Company).

For the six months ended June 30, 2016 (Successor Company), $12.2 million of securities were transferred from Level 2 to Level 1.

For the six months ended June 30, 2016 (Successor Company), $0.1 million of securities were transferred from Level 1.

33

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included  in Earnings		Included  in Other Comprehensive Income		Included  in Earnings			Included  in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	600,132		—		165		(92		)	(9,323		)	—		(87		)	—		—		—			90			590,885		—
Corporate securities	1,283,142		3,656		4,001		(687		)	(24,247		)	89,929		(219,148		)	—		—		(21,803		)	(3,412		)	1,111,431		—
Total fixed maturity securities - available-for-sale	1,883,277		3,656		4,166		(779		)	(33,570		)	89,929		(219,235		)	—		—		(21,803		)	(3,322		)	1,702,319		—
Fixed maturity securities - trading
Other asset-backed securities	170,500		589		—		(5,173		)	—			—		(5,468		)	—		—		—			146			160,594		(4,587		)
Corporate securities	19,614		140		—		(233		)	—			—		(161		)	—		—		—			(44		)	19,316		(93		)
Total fixed maturity securities - trading	190,114		729		—		(5,406		)	—			—		(5,629		)	—		—		—			102			179,910		(4,680		)
Total fixed maturity securities	2,073,391		4,385		4,166		(6,185		)	(33,570		)	89,929		(224,864		)	—		—		(21,803		)	(3,220		)	1,882,229		(4,680		)
Equity securities	66,691		—		—		—			—			—		(231		)	—		—		—			—			66,460		—
Other long-term investments(1)	79,222		24,982		—		(3,685		)	—			—		—			—		—		—			—			100,519		21,297
Total investments	2,219,304		29,367		4,166		(9,870		)	(33,570		)	89,929		(225,095		)	—		—		(21,803		)	(3,220		)	2,049,208		16,617
Total assets measured at fair value on a recurring basis	$	2,219,304	$	29,367	$	4,166	$	(9,870	)	$	(33,570	)	$	89,929	$	(225,095	)	$	—	$	—	$	(21,803	)	$	(3,220	)	$	2,049,208	$	16,617
Liabilities:
Annuity account balances(2)	$	97,108	$	—	$	—	$	(911	)	$	—		$	—	$	—		$	72	$	2,913	$	—		$	—		$	95,178	$	—
Other liabilities(1)	477,729		147,963		—		(13,179		)	—			—		—			—		—		—			—			342,945		134,784
Total liabilities measured at fair value on a recurring basis	$	574,837	$	147,963	$	—	$	(14,090	)	$	—		$	—	$	—		$	72	$	2,913	$	—		$	—		$	438,123	$	134,784

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the three months ended June 30, 2015 (Successor Company), there were no securities transferred into Level 3.

For the three months ended June 30, 2015 (Successor Company), $21.8 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2015 (Successor Company).

For the three months ended June 30, 2015 (Successor Company), there were no securities transferred from Level 2 to Level 1.

For the three months ended June 30, 2015 (Successor Company), there were no securities transferred from Level 1.

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The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the period of February 1, 2015 to June 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	603,646		—		165		(92		)	(12,891		)	—		(127		)	—		—		—			184			590,885		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		(3,675		)	—		—		—			—			—		—
Corporate securities	1,307,259		4,291		15,619		(687		)	(24,247		)	111,929		(254,935		)	—		—		(41,853		)	(5,945		)	1,111,431		—
Total fixed maturity securities - available-for-sale	1,914,583		4,291		15,784		(779		)	(37,138		)	111,929		(258,737		)	—		—		(41,853		)	(5,761		)	1,702,319		—
Fixed maturity securities - trading
Other asset-backed securities	169,473		3,949		—		(5,173		)	—			—		(7,876		)	—		—		—			221			160,594		(5,829		)
Corporate securities	25,130		174		—		(299		)	—			—		(5,584		)	—		—		—			(105		)	19,316		(1,180		)
Total fixed maturity securities - trading	194,603		4,123		—		(5,472		)	—			—		(13,460		)	—		—		—			116			179,910		(7,009		)
Total fixed maturity securities	2,109,186		8,414		15,784		(6,251		)	(37,138		)	111,929		(272,197		)	—		—		(41,853		)	(5,645		)	1,882,229		(7,009		)
Equity securities	66,691		—		—		—			—			—		(231		)	—		—		—			—			66,460		—
Other long-term investments(1)	64,200		40,032		—		(3,713		)	—			—		—			—		—		—			—			100,519		36,319
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	2,240,077		48,446		15,784		(9,964		)	(37,138		)	111,929		(272,428		)	—		—		(41,853		)	(5,645		)	2,049,208		29,310
Total assets measured at fair value on a recurring basis	$	2,240,077	$	48,446	$	15,784	$	(9,964	)	$	(37,138	)	$	111,929	$	(272,428	)	$	—	$	—	$	(41,853	)	$	(5,645	)	$	2,049,208	$	29,310
Liabilities:
Annuity account balances(2)	$	98,279	$	—	$	—	$	(1,544	)	$	—		$	—	$	—		$	86	$	4,731	$	—		$	—		$	95,178	$	—
Other liabilities(1)	530,118		212,854		—		(25,681		)	—			—		—			—		—		—			—			342,945		187,173
Total liabilities measured at fair value on a recurring basis	$	628,397	$	212,854	$	—	$	(27,225	)	$	—		$	—	$	—		$	86	$	4,731	$	—		$	—		$	438,123	$	187,173

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the period of February 1, 2015 to June 30, 2015 (Successor Company), there were no transfers of securities into Level 3.

For the period of February 1, 2015 to June 30, 2015 (Successor Company), $41.9 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2015 (Successor Company).

For the period of February 1, 2015 to June 30, 2015 (Successor Company), $90.4 million of securities were transferred from Level 2 to Level 1.

For the period of February 1, 2015 to June 30, 2015 (Successor Company), there were no transfers from Level 1.

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The following table presents a reconciliation of the beginning and ending balances for fair value measurements for period of January 1, 2015 to January 31, 2015 (Predecessor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																						Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3		Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	3	$	—
Other asset-backed securities	563,961		—		—		—			(3,867		)	—		(32		)	—		—		43,205		379			603,646		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		—			—		—		—		—			3,675		—
Corporate securities	1,325,683		—		12,282		—			(23,029		)	—		(7,062		)	—		—		—		(615		)	1,307,259		—
Total fixed maturity securities - available-for-sale	1,893,322		—		12,282		—			(26,896		)	—		(7,094		)	—		—		43,205		(236		)	1,914,583		—
Fixed maturity securities - trading
Other asset-backed securities	169,461		586		—		(139		)	—			—		(472		)	—		—		—		37			169,473		447
Corporate securities	24,744		602		—		(196		)	—			—		(20		)	—		—		—		—			25,130		406
Total fixed maturity securities - trading	194,205		1,188		—		(335		)	—			—		(492		)	—		—		—		37			194,603		853
Total fixed maturity securities	2,087,527		1,188		12,282		(335		)	(26,896		)	—		(7,586		)	—		—		43,205		(199		)	2,109,186		853
Equity securities	66,691		—		—		—			—			—		—			—		—		—		—			66,691		—
Other long-term investments(1)	44,625		16,617		—		(15,166		)	—			—		—			—		—		—		—			46,076		1,451
Short-term investments	—		—		—		—			—			—		—			—		—		—		—			—		—
Total investments	2,198,843		17,805		12,282		(15,501		)	(26,896		)	—		(7,586		)	—		—		43,205		(199		)	2,221,953		2,304
Total assets measured at fair value on a recurring basis	$	2,198,843	$	17,805	$	12,282	$	(15,501	)	$	(26,896	)	$	—	$	(7,586	)	$	—	$	—	$	43,205	$	(199	)	$	2,221,953	$	2,304
Liabilities:
Annuity account balances(2)	$	97,825	$	—	$	—	$	(536	)	$	—		$	—	$	—		$	7	$	419	$	—	$	—		$	97,949	$	—
Other liabilities(1)	506,343		61		—		(125,995		)	—			—		—			—		—		—		—			632,277		(125,934		)
Total liabilities measured at fair value on a recurring basis	$	604,168	$	61	$	—	$	(126,531	)	$	—		$	—	$	—		$	7	$	419	$	—	$	—		$	730,226	$	(125,934	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), $43.2 million of securities were transferred into Level 3. This amount was transferred from Level 2. These transfers resulted from securities that were priced by independent pricing services or brokers in previous periods, using no significant unobservable inputs, but were priced internally using significant unobservable inputs where market observable inputs were no longer available as of January 31, 2015 (Predecessor Company). All transfers are recognized as of the end of the period.

For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), there were no transfers from Level 3 to Level 2.

For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), there were no transfers from Level 2 to Level 1 and there were no transfers out of Level 1.

     Total realized and unrealized gains (losses) on Level 3 assets and liabilities are primarily reported in either realized investment gains (losses) within the consolidated condensed statements of income (loss) or other comprehensive income (loss) within shareowner’s equity based on the appropriate accounting treatment for the item.

Purchases, sales, issuances, and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily relates to purchases and sales of fixed maturity securities and issuances and settlements of fixed indexed annuities.

The Company reviews the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as

36

transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. The asset transfers in the table(s) above primarily related to positions moved from Level 3 to Level 2 as the Company determined that certain inputs were observable.

The amount of total gains (losses) for assets and liabilities still held as of the reporting date primarily represents changes in fair value of trading securities and certain derivatives that exist as of the reporting date and the change in fair value of fixed indexed annuities.

Estimated Fair Value of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows:

		Successor Company
		As of June 30, 2016				As of December 31, 2015
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	5,748,675	$	5,735,650	$	5,662,812	$	5,529,803
Policy loans	3	1,670,218		1,670,218		1,699,508		1,699,508
Fixed maturities, held-to-maturity(1)	3	2,779,280		2,853,788		593,314		515,000
Liabilities:
Stable value product account balances	3	$	2,838,674	$	2,855,064	$	2,131,822	$	2,124,712
Annuity account balances	3	10,678,701		10,221,680		10,719,862		10,274,571
Debt:
Non-recourse funding obligations(2)	3	$	2,981,271	$	3,054,637	$	1,951,563	$	1,621,773

Except as noted below, fair values were estimated using quoted market prices.

⁽¹⁾    Securities purchased from unconsolidated affiliates, Red Mountain LLC and Steel City LLC.

⁽²⁾    Of this carrying amount, $2.8 billion, fair value of $2.8 billion, as of June 30, 2016 (Successor Company), and $500.0 million, fair value of $495.5 million, as of December 31, 2015 (Successor Company), relates to non-recourse funding obligations issued by Golden Gate and Golden Gate V.

Fair Value Measurements

Mortgage loans on real estate

The Company estimates the fair value of mortgage loans using an internally developed model. This model includes inputs derived by the Company based on assumed discount rates relative to the Company’s current mortgage loan lending rate and an expected cash flow analysis based on a review of the mortgage loan terms. The model also contains the Company’s determined representative risk adjustment assumptions related to credit and liquidity risks.

Policy loans

The Company believes the fair value of policy loans approximates book value. Policy loans are funds provided to policy holders in return for a claim on the policy. The funds provided are limited to the cash surrender value of the underlying policy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of repayments, the Company believes the fair value of policy loans approximates carrying value.

Fixed maturities, held-to-maturity

The Company estimates the fair value of its fixed maturity, held-to-maturity securities using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

Stable Value Product and Annuity Account Balances

The Company estimates the fair value of stable value product account balances and annuity account balances using models based on discounted expected cash flows. The discount rates used in the models are based on a current market rate for similar financial instruments.

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Non-recourse Funding Obligations

The Company estimates the fair value of its non-recourse funding obligations using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

8.DERIVATIVE FINANCIAL INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, inflation risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program.

Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit risk by entering into transactions with highly rated counterparties. The Company manages the market risk by establishing and monitoring limits as to the types and degrees of risk that may be undertaken. The Company monitors its use of derivatives in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department.

Derivatives Related to Interest Rate Risk Management

Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions. The Company’s inflation risk management strategy involves the use of swaps that requires the Company to pay a fixed rate and receive a floating rate that is based on changes in the Consumer Price Index (“CPI”).

Derivatives Related to Risk Mitigation of Certain Annuity Contracts

The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to VA contracts and fixed indexed annuities:

•Foreign Currency Futures

•Variance Swaps

•Interest Rate Futures

•Equity Options

•Equity Futures

•Credit Derivatives

•Interest Rate Swaps

•Interest Rate Swaptions

•Volatility Futures

•Volatility Options

•Funds Withheld Agreement

•Total Return Swaps

Other Derivatives

The Company and certain of its subsidiaries have derivatives with PLC. These derivatives consist of an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC.

The Company has a funds withheld account that consists of various derivative instruments held by us that is used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument.

Accounting for Derivative Instruments

The Company records its derivative financial instruments in the consolidated balance sheet in “other long-term investments” and “other liabilities” in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists.

For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the effective portion of their realized gain or loss is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis.

38

The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through earnings in the period of change. Changes in the fair value of derivatives that are recognized in current earnings are reported in “Realized investment gains (losses)-Derivative financial instruments”.

Derivative Instruments Designated and Qualifying as Hedging Instruments

Cash-Flow Hedges

• In connection with the issuance of inflation-adjusted funding agreements, the Company has entered into swaps to essentially convert the floating CPI-linked interest rate on these agreements to a fixed rate. The Company pays a fixed rate on the swap and receives a floating rate primarily determined by the period’s change in the CPI. The amounts that are received on the swaps are almost equal to the amounts that are paid on the agreements. None of these positions were held as of June 30, 2016 (Successor Company), as these funding agreements and correlating swaps matured in June of 2015.

Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments

The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in earnings during the period of change.

Derivatives Related to Variable Annuity Contracts

• The Company uses equity, interest rate, currency, and volatility futures to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility.

• The Company uses equity options, variance swaps, and volatility options to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. In general, the cost of such benefits varies with the level of equity markets and overall volatility.

• The Company uses interest rate swaps and interest rate swaptions to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products.

• The Company markets certain VA products with a GMWB rider. The GMWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

• The Company has a funds withheld account that consists of various derivative instruments held by the Company that are used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument.

Derivatives Related to Fixed Annuity Contracts

• The Company uses equity, futures, and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity and overall volatility.

• The Company uses equity options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity markets.

• The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

Derivatives Related to Indexed Universal Life Contracts

• The Company uses equity, futures, and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets.

• The Company markets certain IUL products. The IUL component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

Other Derivatives

• The Company uses certain interest rate swaps to mitigate the price volatility of fixed maturities. None of these positions were held as of June 30, 2016 (Successor Company).

• The Company and certain of its subsidiaries have an interest support agreement, two YRT premium support agreements, and three portfolio maintenance agreements with PLC. The Company entered into three separate portfolio maintenance agreements, two in October 2012 and one in January 2016.

• The Company uses various swaps and other types of derivatives to manage risk related to other exposures.

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• The Company is involved in various modified coinsurance and funds withheld arrangements which contain embedded derivatives. Changes in their fair value are recorded in current period earnings. The investment portfolios that support the related modified coinsurance reserves and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives.

The following table sets forth realized investments gains and losses for the periods shown:

Realized investment gains (losses) - derivative financial instruments

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures - VA	$	31,266		$	(14,183	)	$	69,067		$	(14,231	)	$	1,413
Equity futures - VA	(21,328		)	(5,267		)	(24,556		)	(37,736		)	9,221
Currency futures - VA	11,112			(8,709		)	4,954			(2,572		)	7,778
Equity options - VA	(3,232		)	(3,550		)	13,072			(25,324		)	3,047
Interest rate swaptions - VA	(749		)	2,547			(2,983		)	(8,781		)	9,268
Interest rate swaps - VA	81,554			(121,167		)	207,147			(175,958		)	122,710
Embedded derivative - GMWB	(66,019		)	45,969			(132,695		)	81,839			(68,503		)
Funds withheld derivative	17,850			6,335			10,052			44,571			(9,073		)
Total derivatives related to VA contracts	50,454			(98,025		)	144,058			(138,192		)	75,861
Derivatives related to FIA contracts:
Embedded derivative - FIA	710			290			(1,452		)	(2,293		)	1,769
Equity futures - FIA	651			123			2,033			307			(184		)
Volatility futures - FIA	—			25			—			29			—
Equity options - FIA	735			1,226			(4,827		)	5,601			(2,617		)
Total derivatives related to FIA contracts	2,096			1,664			(4,246		)	3,644			(1,032		)
Derivatives related to IUL contracts:
Embedded derivative - IUL	(96		)	1,538			(834		)	1,795			(486		)
Equity futures - IUL	47			9			(172		)	23			3
Equity options - IUL	241			(78		)	214			62			(115		)
Total derivatives related to IUL contracts	192			1,469			(792		)	1,880			(598		)
Embedded derivative - Modco reinsurance treaties	(22,820		)	109,131			(81,175		)	141,322			(68,026		)
Derivatives with PLC (1)	13,681			(3,684		)	17,711			(3,119		)	15,863
Other derivatives	(55		)	11			(100		)	83			(37		)
Total realized gains (losses) - derivatives	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031

(1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC.

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The following table sets forth realized investments gains and losses for the Modco trading portfolio that is included in realized investment gains (losses) — all other investments:

Realized investment gains (losses) - all other investments

	Successor Company										Predecessor Company
	For the Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Modco trading portfolio(1)	$	76,201	$	(108,741	)	$	154,355	$	(141,901	)	$	73,062

(1)The Company elected to include the use of alternate disclosures for trading activities.

The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship:

Gain (Loss) on Derivatives in Cash Flow Hedging Relationship

	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives			Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)			Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)			(Effective Portion)			(Ineffective Portion)
				Benefits and settlement expenses			Realized investment gains (losses)
				(Dollars In Thousands)
Successor Company
For The Three Months Ended June 30, 2015
Inflation	$	(95	)	$	(41	)	$	77
Total	$	(95	)	$	(41	)	$	77
February 1, 2015 to June 30, 2015
Inflation	$	(131	)	$	(131	)	$	73
Total	$	(131	)	$	(131	)	$	73
Predecessor Company
January 1, 2015 to January 31, 2015
Inflation	$	13		$	(36	)	$	(7	)
Total	$	13		$	(36	)	$	(7	)

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The table below present information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below:

	Successor Company
	As of June 30, 2016				As of December 31, 2015
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Other long-term investments
Derivatives not designated as hedging instruments:
Interest rate swaps	$	1,640,000	$	255,439	$	1,435,000	$	66,408
Derivatives with PLC(1)	2,869,315		37,300		1,619,200		18,161
Embedded derivative - Modco reinsurance treaties	64,201		1,850		64,593		1,215
Embedded derivative - GMWB	891,276		23,770		1,723,081		49,007
Interest rate futures	1,155,001		35,366		282,373		1,537
Equity futures	190,058		752		262,485		1,275
Currency futures	314,256		15,915		226,936		2,499
Equity options	2,725,744		269,217		2,198,340		179,458
Interest rate swaptions	225,000		681		225,000		3,663
Other	298		249		242		347
	$	10,075,149	$	640,539	$	8,037,250	$	323,570
Other liabilities
Derivatives not designated as hedging instruments:
Interest rate swaps	$	270,000	$	3,215	$	475,000	$	16,579
Embedded derivative - Modco reinsurance treaties	2,457,293		239,350		2,473,427		178,362
Funds withheld derivative	1,492,757		129,473		1,149,664		102,378
Embedded derivative - GMWB	2,853,530		174,988		1,834,308		67,528
Embedded derivative - FIA	1,313,404		119,997		1,110,790		100,329
Embedded derivative - IUL	77,879		46,711		57,760		29,629
Interest rate futures	—		—		793,763		1,539
Equity futures	582,493		7,461		233,412		2,599
Currency futures	64,445		1,805		46,692		1,115
Equity options	1,459,533		60,551		1,205,204		22,167
	$	10,571,334	$	783,551	$	9,380,020	$	522,225

(1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC.

During the first quarter 2016, the Company revised its methodology for estimating notional amounts associated with the YRT Support Agreements among certain of its affiliates. The Company's revised approach reflects its position that no reasonably estimable notional amounts exist for the YRT Support Agreements, which contain payment positions based on the movement of the underlying premium rates, as described in Note 7, Fair Value of Financial Instruments. Current period amounts disclosed above reflect this change in estimate, which did not impact the Company's financial position or results of operations.

9.OFFSETTING OF ASSETS AND LIABILITIES

Certain of the Company’s derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company’s repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 12, Debt and Other Obligations for details of the Company’s repurchase agreement programs.

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The tables below present the derivative instruments by assets and liabilities for the Company as of June 30, 2016 (Successor Company).

					Net Amounts
	Gross		Gross Amounts Offset in the		of Assets Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Assets		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	577,370	$	—	$	577,370	$	66,347	$	336,163	$	174,860
Total derivatives, subject to a master netting arrangement or similar arrangement	577,370		—		577,370		66,347		336,163		174,860
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,850		—		1,850		—		—		1,850
Embedded derivative - GMWB	23,770		—		23,770		—		—		23,770
Derivatives with PLC	37,300		—		37,300		—		—		37,300
Other	249		—		249		—		—		249
Total derivatives, not subject to a master netting arrangement or similar arrangement	63,169		—		63,169		—		—		63,169
Total derivatives	640,539		—		640,539		66,347		336,163		238,029
Total Assets	$	640,539	$	—	$	640,539	$	66,347	$	336,163	$	238,029

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					Net Amounts
	Gross		Gross Amounts Offset in the		of Liabilities Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Liabilities		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	73,032	$	—	$	73,032	$	66,347	$	6,685	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	73,032		—		73,032		66,347		6,685		—
Derivatives, not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	239,350		—		239,350		—		—		239,350
Funds withheld derivative	129,473		—		129,473		—		—		129,473
Embedded derivative - GMWB	174,988		—		174,988		—		—		174,988
Embedded derivative - FIA	119,997		—		119,997		—		—		119,997
Embedded derivative - IUL	46,711		—		46,711		—		—		46,711
Total derivatives, not subject to a master netting arrangement or similar arrangement	710,519		—		710,519		—		—		710,519
Total derivatives	783,551		—		783,551		66,347		6,685		710,519
Repurchase agreements(1)	160,000		—		160,000		—		—		160,000
Total Liabilities	$	943,551	$	—	$	943,551	$	66,347	$	6,685	$	870,519

(1) Borrowings under repurchase agreements are for a term less than 90 days.

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The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2015 (Successor Company).

					Net Amounts
	Gross		Gross Amounts Offset in the		of Assets Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Assets		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	254,840	$	—	$	254,840	$	42,382	$	105,842	$	106,616
Total derivatives, subject to a master netting arrangement or similar arrangement	254,840		—		254,840		42,382		105,842		106,616
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,215		—		1,215		—		—		1,215
Embedded derivative - GMWB	49,007		—		49,007		—		—		49,007
Derivatives with PLC	18,161		—		18,161		—		—		18,161
Other	347		—		347		—		—		347
Total derivatives, not subject to a master netting arrangement or similar arrangement	68,730		—		68,730		—		—		68,730
Total derivatives	323,570		—		323,570		42,382		105,842		175,346
Total Assets	$	323,570	$	—	$	323,570	$	42,382	$	105,842	$	175,346

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					Net Amounts
	Gross		Gross Amounts Offset in the		of Liabilities Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Liabilities		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	43,999	$	—	$	43,999	$	42,382	$	1,617	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	43,999		—		43,999		42,382		1,617		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	178,362		—		178,362		—		—		178,362
Funds withheld derivative	102,378		—		102,378		—		—		102,378
Embedded derivative - GMWB	67,528		—		67,528		—		—		67,528
Embedded derivative - FIA	100,329		—		100,329		—		—		100,329
Embedded derivative - IUL	29,629		—		29,629		—		—		29,629
Total derivatives, not subject to a master netting arrangement or similar arrangement	478,226		—		478,226		—		—		478,226
Total derivatives	522,225		—		522,225		42,382		1,617		478,226
Repurchase agreements(1)	438,185		—		438,185		—		—		438,185
Total Liabilities	$	960,410	$	—	$	960,410	$	42,382	$	1,617	$	916,411

(1) Borrowings under repurchase agreements are for a term less than 90 days.

10.MORTGAGE LOANS

Mortgage Loans

The Company invests a portion of its investment portfolio in commercial mortgage loans. As of June 30, 2016 (Successor Company), the Company’s mortgage loan holdings were approximately $5.7 billion. The Company has specialized in making loans on either credit-oriented commercial properties or credit-anchored strip shopping centers and apartments. The Company’s underwriting procedures relative to its commercial loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company’s mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition.

The Company’s commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and accretion of discounts is recorded using the effective yield method. Interest income, amortization of premiums and accretion of discounts and prepayment fees are reported in net investment income.

As of February 1, 2015, all mortgage loans were measured at fair value. Each mortgage loan was individually analyzed to determine the fair value. Each loan was either analyzed and assigned a discount rate or given an impairment, based on whether facts and circumstances which, as of the acquisition date, indicated less than full projected collections of contractual principal and interest payments. Various market factors were considered in determining the net present value of the expected cash flow stream or underlying real estate collateral, including the characteristics of the borrower, the underlying collateral, underlying credit worthiness of the tenants, and tenant payment history. Known events and risks, such as refinancing risks, were also considered in the fair value determination. In certain cases, fair value was based on the net present value of the expected cash flow stream or the underlying value of the real estate collateral.

Certain of the mortgage loans have call options that occur within the next 12 years. However, if interest rates were to significantly increase, we may be unable to exercise the call options on our existing mortgage loans commensurate with the

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significantly increased market rates. As of June 30, 2016 (Successor Company), assuming the loans are called at their next call dates, approximately $42.7 million of principal would become due for the remainder of 2016, $922.1 million in 2017 through 2021, $238.1 million in 2022 through 2026, and $11.1 million thereafter.

The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), approximately $522.8 million and $449.2 million, respectively, of the Company’s total mortgage loan principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and January 1, 2015 to January 31, 2015 (Predecessor Company), the Company recognized $5.7 million, $12.5 million, $3.3 million, $5.1 million, and $0.1 million, respectively, of participating mortgage loan income.

As of June 30, 2016 (Successor Company), approximately $1.0 million of invested assets consisted of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the six months ended June 30, 2016 (Successor Company), the Company did not enter into certain mortgage loan transactions that were accounted for as troubled debt restructurings under Topic 310 of the FASB ASC. If the Company had troubled debt restructurings, these transactions would include either the acceptance of assets in satisfaction of principal during the respective periods or at a future date, and were the result of agreements between the creditor and the debtor. During the six months ended June 30, 2016 (Successor Company), the Company did not accept or agree to accept assets in satisfaction of principal. As of June 30, 2016 (Successor Company), the Company did not have any mortgage loan transactions accounted for as troubled debt restructurings.

The Company’s mortgage loan portfolio consists of two categories of loans: 1) those not subject to a pooling and servicing agreement and 2) those subject to a contractual pooling and servicing agreement. As of June 30, 2016 (Successor Company), $1.0 million of mortgage loans not subject to a pooling and servicing agreement were nonperforming mortgage loans, restructured, or mortgage loans that were foreclosed and were converted to real estate properties. The Company did not foreclose on any nonperforming loans not subject to a pooling and servicing agreement during the six months ended June 30, 2016 (Successor Company).

As of June 30, 2016 (Successor Company), none of the loans subject to a pooling and servicing agreement were nonperforming or restructured. The Company did not foreclose on any nonperforming loans subject to pooling and servicing agreement during the six months ended June 30, 2016 (Successor Company).

As of June 30, 2016 (Successor Company), the Company had an allowance for mortgage loan credit losses of $3.9 million and no allowance as of December 31, 2015 (Successor Company). Due to the Company’s loss experience and nature of the loan portfolio, the Company believes that a collectively evaluated allowance would be inappropriate. The Company believes an allowance calculated through an analysis of specific loans that are believed to have a higher risk of credit impairment provides a more accurate presentation of expected losses in the portfolio and is consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Since the Company uses the specific identification method for calculating the allowance, it is necessary to review the economic situation of each borrower to determine those that have higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assesses the risk of each loan. When issues are identified, the severity of the issues are assessed and reviewed for possible credit impairment. If a loss is probable, an expected loss calculation is performed and an allowance is established for that loan based on the expected loss. The expected loss is calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan may be subsequently charged off at such point that the Company no longer expects to receive cash payments, the present value of future expected payments of the renegotiated loan is less than the current principal balance, or at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan.

A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property. 

	Successor Company					Predecessor Company
	As of June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)					(Dollars In Thousands)
Beginning balance	$	—	$	—		$	5,720
Charge offs	—		(2,561		)	(861		)
Recoveries	—		(638		)	(2,359		)
Provision	3,850		3,199			—
Ending balance	$	3,850	$	—		$	2,500

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It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company’s general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status. An analysis of the delinquent loans is shown in the following chart. 

					Greater
Successor Company	30-59 Days		60-89 Days		than 90 Days		Total
As of June 30, 2016	Delinquent		Delinquent		Delinquent		Delinquent
	(Dollars In Thousands)
Commercial mortgage loans	$	9,167	$	—	$	1,034	$	10,201
Number of delinquent commercial mortgage loans	3		—		1		4
As of December 31, 2015
Commercial mortgage loans	$	6,002	$	1,033	$	—	$	7,035
Number of delinquent commercial mortgage loans	6		1		—		7

The Company’s commercial mortgage loan portfolio consists of mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on impaired loans to 90 days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis. For information regarding impaired loans, please refer to the following chart: 

			Unpaid				Average		Interest		Cash Basis
Successor Company	Recorded		Principal		Related		Recorded		Income		Interest
As of June 30, 2016	Investment		Balance		Allowance		Investment		Recognized		Income
	(Dollars In Thousands)
Commercial mortgage loans:
With no related allowance recorded	$	1,034	$	1,067	$	—	$	1,034	$	—	$	—
With an allowance recorded	12,313		12,301		3,850		6,156		190		199
As of December 31, 2015
Commercial mortgage loans:
With no related allowance recorded	$	1,694	$	1,728	$	—	$	847	$	104	$	117
With an allowance recorded	—		—		—		—		—		—

As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), the Company did not carry any mortgage loans that have been modified in a troubled debt restructuring.

11.GOODWILL

As permitted by ASC Topic 805, Business Combinations, the Company measured its assets and liabilities at fair value on the date of the Merger, February 1, 2015. The purchase price in excess of the fair value of PLC’s assets and liabilities resulted in the establishment of goodwill as of the date of the Merger. As of February 1, 2015 (Successor Company), the Company was allocated an aggregate goodwill balance of $735.7 million. During the measurement period subsequent to February 1, 2015, the Company has made adjustments to provisional amounts related to certain tax balances that resulted in a decrease to goodwill of $3.3 million from the amount recorded at the Merger date. This reduction in Goodwill was applied to the Life Marketing segment's goodwill. The balance of goodwill associated with the Merger as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company) was $732.4 million. There has been no change in the goodwill during the six months ended June 30, 2016 (Successor Company).

Accounting for goodwill requires an estimate of the future profitability of the associated lines of business to assess the recoverability of the capitalized acquisition goodwill. The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If it is determined that it is more likely than not that impairment exists, the Company compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the

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measurement date. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions.

The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. During the fourth quarter of 2015, the Company performed its annual evaluation of goodwill based on information as of September 30, 2015 (Successor Company) and determined that no adjustment to impair goodwill was necessary. During the six months ended June 30, 2016 (Successor Company), the Company did not identify any events or circumstances which would indicate that the fair value of its operating segments would have declined below their book value, either individually or in the aggregate. Accordingly, no impairment to the Company’s goodwill balance has been recorded.

12.DEBT AND OTHER OBLIGATIONS

In conjunction with the Merger and in accordance with ASC Topic 805, the Company adjusted the carrying value of debt to fair value as of the date of the Merger, February 1, 2015. This resulted in the Company establishing premiums and discounts on its outstanding debt, subordinated debentures and non-recourse funding obligations. The carrying value of the Company’s revolving line of credit approximates fair value due to the nature of the borrowings and the fact the Company pays a variable rate of interest that reflects current market conditions. The fair value of the Company’s senior notes, subordinated debt, non-recourse funding obligations associated with Golden Gate II Captive Insurance Company and MONY Life Insurance Company, were determined using market prices as of February 1, 2015. The fair value of the Golden Gate V non-recourse funding obligation was determined using a discounted cash flow model with inputs derived from comparable financial instruments. The premiums and discounts established as of February 1, 2015 are amortized over the expected life of the instruments using the effective interest method. The amortization of premiums and discounts are recorded as a component of interest expense and are recorded in “Other operating expenses” on the Company’s Consolidated Condensed Statements of Income.

On February 2, 2015, the Company and PLC amended and restated the Credit Facility (the “Credit Facility”). Under the Credit Facility, the Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.25 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of PLC’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s prime rate, (y) 0.50% above the Federal Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of PLC’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of PLC’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The initial facility fee rate was 0.15% on February 2, 2015, and was adjusted to 0.125% upon PLC’s subsequent ratings upgrade on February 2, 2015. The Credit Facility provides that PLC is liable for the full amount of any obligations for borrowings or letters of credit, including those of the Company, under the Credit Facility. The maturity date of the Credit Facility is February 2, 2020. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of June 30, 2016 (Successor Company). PLC had an outstanding balance of $360.0 million bearing interest at a rate of LIBOR plus 1.00% as June 30, 2016 (Successor Company). As of June 30, 2016 (Successor Company), the Company has used $30.0 million of borrowing capacity by executing a Letter of Credit under the Credit Facility for the benefit on an affiliated captive reinsurance subsidiary of the Company. This Letter of Credit had not been drawn upon as of June 30, 2016 (Successor Company).

Non-RecourseFunding Obligations

Golden Gate Captive Insurance Company

On January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18-year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by the Company and WCL, a direct wholly owned subsidiary of the Company. Steel City issued notes (the "Steel City Notes") with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion. Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City Notes for the 18-year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies, other than Golden Gate, are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. As of June 30, 2016 (Successor Company), the aggregate principal balance of the Steel City Notes was $2.153 billion. In connection with this transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City. The support agreements provide that amounts would become payable by PLC if Golden Gate’s annual general corporate expenses were higher than modeled amounts, certain reinsurance rates applicable to the subject business increase beyond modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, PLC has entered into a separate agreement to guarantee payment of certain fee amounts in connection with the credit enhancement of the Steel City Notes. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

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In connection with the transaction outlined above, Golden Gate had a $2.153 billion outstanding non-recourse funding obligation as of June 30, 2016 (Successor Company). This non-recourse funding obligation matures in 2034 and accrues interest at a fixed annual rate of 4.75%.

Prior to this transaction Golden Gate had three series of non-recourse funding obligations with a total outstanding balance of $800 million. PLC held the entire outstanding balance of non-recourse funding obligations. Series A1 non-recourse funding obligations had a balance of $400 million and accrued interest at 7.375%, the Series A2 non-recourse funding obligations had a balance of $100 million and accrued interest at 8.00%, and the Series A3 non-recourse funding obligations had a balance of $300 million and accrued interest at 8.45%. As a result of the transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. The contribution of the non-recourse funding obligations from PLC to the Company, and the subsequent contribution of the obligations by the Company to Golden Gate, was recognized based on the respective carrying value of the obligations, which was approximately $1.15 billion. This carrying value included a premium over the outstanding principal balance of the note issuances due to the effect of purchase accounting applied as a result of the Merger on February 1, 2015. As of the transaction date, the respective carrying value of the non-recourse funding obligation asset previously held by PLC was also approximately $1.15 billion; therefore this transaction did not result in the recognition of a gain or loss for PLC or the Company.

Golden Gate II Captive Insurance Company

Golden Gate II Captive Insurance Company (“Golden Gate II”), a South Carolina special purpose financial captive insurance company and wholly owned subsidiary, had $575 million of outstanding non-recourse funding obligations as of June 30, 2016 (Successor Company). These outstanding non-recourse funding obligations were issued to special purpose trusts, which in turn issued securities to third parties. Certain of our affiliates own a portion of these securities. As of June 30, 2016 (Successor Company), securities related to $133.6 million of the outstanding balance of the non-recourse funding obligations were held by external parties, securities related to $145.3 million of the non-recourse funding obligations were held by nonconsolidated affiliates, and $296.1 million were held by consolidated subsidiaries of the Company. PLC has entered into certain support agreements with Golden Gate II obligating it to make capital contributions or provide support related to certain of Golden Gate II’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate II. These support agreements provide that amounts would become payable by PLC to Golden Gate II if its annual general corporate expenses were higher than modeled amounts or if Golden Gate II’s investment income on certain investments or premium income was below certain actuarially determined amounts. As of June 30, 2016 (Successor Company), no payments have been made under these agreements; however, certain support agreement obligations to Golden Gate II of approximately $1.5 million have been collateralized by PLC. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreements.  There are no support agreements between the Company and Golden Gate II.

During the six months ended June 30, 2016 (Successor Company), the Company and its affiliates repurchased $11.3 million of its outstanding non-recourse funding obligations, at a discount. These repurchases did not result in a material gain or loss for the Company. During the period of February 1, 2015 to June 30, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not repurchase any of its outstanding non-recourse funding obligations.

Golden Gate V Vermont Captive Insurance Company

On October 10, 2012, Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”), a Vermont special purpose financial insurance company and Red Mountain, LLC (“Red Mountain”), both wholly owned subsidiaries, entered into a 20-year transaction to finance up to $945 million of “AXXX” reserves related to a block of universal life insurance policies with secondary guarantees issued by the Company and its subsidiary, West Coast Life Insurance Company (“WCL”). Golden Gate V issued non-recourse funding obligations to Red Mountain, and Red Mountain issued a note with an initial principal amount of $275 million, increasing to a maximum of $945 million in 2027, to Golden Gate V for deposit to a reinsurance trust supporting Golden Gate V’s obligations under a reinsurance agreement with WCL, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. Through the structure, Hannover Life Reassurance Company of America (“Hannover Re”), the ultimate risk taker in the transaction, provides credit enhancement to the Red Mountain note for the 20-year term in exchange for a fee. The transaction is “non-recourse” to Golden Gate V, Red Mountain, WCL, PLC, and the Company, meaning that none of these companies are liable for the reimbursement of any credit enhancement payments required to be made. As of June 30, 2016 (Successor Company), the principal balance of the Red Mountain note was $535 million. Future scheduled capital contributions to prefund credit enhancement fees amount to approximately $134.2 million and will be paid in annual installments through 2031. In connection with the transaction, PLC has entered into certain support agreements under which PLC guarantees or otherwise supports certain obligations of Golden Gate V or Red Mountain. The support agreements provide that amounts would become payable by PLC if Golden Gate V’s annual general corporate expenses were higher than modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, PLC has entered into separate agreements to indemnify Golden Gate V with respect to material adverse changes in non-guaranteed elements of insurance policies reinsured by Golden Gate V, and to guarantee payment of certain fee amounts in connection with the credit enhancement of the Red Mountain note. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

In connection with the transaction outlined above, Golden Gate V had a $535 million outstanding non-recourse funding obligation as of June 30, 2016 (Successor Company). This non-recourse funding obligation matures in 2037, has scheduled increases in principal to a maximum of $945 million, and accrues interest at a fixed annual rate of 6.25%.

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Non-recourse funding obligations outstanding as of June 30, 2016 (Successor Company), on a consolidated basis, are shown in the following table:

			Maturity	Year-to-Date Weighted-Avg
Issuer	Carrying Value(1)		Year	Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	2,153,000	2039	4.75	%
Golden Gate II Captive Insurance Company	226,912		2052	1.29	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	598,863		2037	5.12	%
MONY Life Insurance Company(3)	2,496		2024	6.19	%
Total	$	2,981,271

(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.

(2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company.

(3)  Fixed rate obligations.

Letters of Credit

Golden Gate III Vermont Captive Insurance Company

     Golden Gate III Vermont Captive Insurance Company (“Golden Gate III”), a Vermont special purpose financial insurance company and wholly owned subsidiary, is party to a Reimbursement Agreement (the “Reimbursement Agreement”) with UBS AG, Stamford Branch (“UBS”), as issuing lender. Under the original Reimbursement Agreement, dated April 23, 2010, UBS issued a letter of credit (the “LOC”) in the initial amount of $505 million to a trust for the benefit of WCL. The Reimbursement Agreement was subsequently amended and restated effective November 21, 2011 (the “First Amended and Restated Reimbursement Agreement”), to replace the existing LOC with one or more letters of credit from UBS, and to extend the maturity date from April 1, 2018, to April 1, 2022. On August 7, 2013, Golden Gate III entered into a Second Amended and Restated Reimbursement Agreement with UBS (the “Second Amended and Restated Reimbursement Agreement”), which amended and restated the First Amended and Restated Reimbursement Agreement. Under the Second and Amended and Restated Reimbursement Agreement a new LOC in an initial amount of $710 million was issued by UBS in replacement of the existing LOC issued under the First Amended and Restated Reimbursement Agreement. The term of the LOC was extended from April 1, 2022 to October 1, 2023, subject to certain conditions being satisfied including scheduled capital contributions being made to Golden Gate III by one of its affiliates. The maximum stated amount of the LOC was increased from $610 million to $720 million in 2016 if certain conditions had been met. On June 25, 2014, Golden Gate III entered into a Third Amended and Restated Reimbursement Agreement with UBS (the “Third Amended and Restated Reimbursement Agreement”), which amended and restated the Second Amended and Restated Reimbursement Agreement. Under the Third Amended and Restated Reimbursement Agreement, a new LOC in an initial amount of $915 million was issued by UBS in replacement of the existing LOC issued under the Second Amended and Restated Reimbursement Agreement. The term of the LOC was extended from October 1, 2023 to April 1, 2025, subject to certain conditions being satisfied including scheduled capital contributions being made to Golden Gate III by one of its affiliates. The maximum stated amount of the LOC was increased from $720 million to $935 million in 2015. The LOC is held in trust for the benefit of WCL, and supports certain obligations of Golden Gate III to WCL under an indemnity reinsurance agreement originally effective April 1, 2010, as amended and restated on November 21, 2011, and as further amended and restated on August 7, 2013 and on June 25, 2014 to include additional blocks of policies, and pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. The LOC balance reached its scheduled peak amount of $935 million in 2015 and remained as this level as of June 30, 2016 (Successor Company). The term of the LOC is expected to be approximately 15 years from the original issuance date. This transaction is “non-recourse” to WCL, PLC, and the Company, meaning that none of these companies other than Golden Gate III are liable for reimbursement on a draw of the LOC. PLC has entered into certain support agreements with Golden Gate III obligating PLC to make capital contributions or provide support related to certain of Golden Gate III’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate III. Future scheduled capital contributions amount to approximately $122.5 million and will be paid in three installments with the last payment occurring in 2021, and these contributions may be subject to potential offset against dividend payments as permitted under the terms of the Third Amended and Restated Reimbursement Agreement. The support agreements provide that amounts would become payable by PLC to Golden Gate III if Golden Gate III’s annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate III. Pursuant to the terms of an amended and restated letter agreement with UBS, PLC has continued to guarantee the payment of fees to UBS as specified in the Third Amended and Restated Reimbursement Agreement. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

Golden Gate IV Vermont Captive Insurance Company

Golden Gate IV Vermont Captive Insurance Company (“Golden Gate IV”), a Vermont special purpose financial insurance company and wholly owned subsidiary, is party to a Reimbursement Agreement with UBS AG, Stamford Branch, as issuing lender. Under the Reimbursement Agreement, dated December 10, 2010, UBS issued an LOC in the initial amount of $270 million to a trust for the benefit of WCL. The LOC balance, in accordance with the terms of the Reimbursement Agreement, reached its scheduled peak amount of $790 million as of June 30, 2016 (Successor Company). The term of the LOC is expected to be 12 years

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from the original issuance date (stated maturity of December 30, 2022). The LOC was issued to support certain obligations of Golden Gate IV to WCL under an indemnity reinsurance agreement, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. This transaction is “non-recourse” to WCL, PLC, and the Company, meaning that none of these companies other than Golden Gate IV are liable for reimbursement on a draw of the LOC. PLC has entered into certain support agreements with Golden Gate IV obligating PLC to make capital contributions or provide support related to certain of Golden Gate IV’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate IV. The support agreements provide that amounts would become payable by PLC to Golden Gate IV if Golden Gate IV’s annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate IV. PLC has also entered into a separate agreement to guarantee the payments of LOC fees under the terms of the Reimbursement Agreement. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

Repurchase Program Borrowings

While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of June 30, 2016 (Successor Company), the fair value of securities pledged under the repurchase program was $177.5 million and the repurchase obligation of $160.0 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 42 basis points). During the six months ended June 30, 2016 (Successor Company), the maximum balance outstanding at any one point in time related to these programs was $725.0 million. The average daily balance was $464.5 million (at an average borrowing rate of 40 basis points) during the six months ended June 30, 2016 (Successor Company). As of December 31, 2015 (Successor Company), the fair value of securities pledged under the repurchase program was $479.9 million and the repurchase obligation of $438.2 million was included in the Company's consolidated condensed balance sheets. During 2015, the maximum balance outstanding at any one point in time related to these programs was $912.7 million. The average daily balance was $540.3 million and $77.4 million (at an average borrowing rate of 20 and 16 basis points) during the period of February 1, 2015 to December 31, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

The following table provides the amount of collateral pledged for repurchase agreements, grouped by asset class, as of June 30, 2016 (Successor Company):

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of June 30, 2016 (Successor Company)
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	—	$	—	$	—	$	—	$	—
State and municipal securities	—		—		—		—		—
Other asset-backed securities	—		—		—		—		—
Corporate securities	—		—		—		—		—
Equity securities	—		—		—		—		—
Non-U.S. sovereign debt	—		—		—		—		—
Mortgage loans	177,463		—		—		—		177,463
Other asset-backed securities	—		—		—		—		—
Total borrowings	$	177,463	$	—	$	—	$	—	$	177,463

13.COMMITMENTS AND CONTINGENCIES

Under insurance guaranty fund laws, in most states insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. In addition, from time to time, companies may be asked to contribute amounts beyond prescribed limits. Most insurance guaranty fund laws provide that an assessment may be excused or deferred if it would threaten an insurer’s own financial strength. The Company does not believe its insurance guaranty fund assessments will be materially different from amounts already provided for in the financial statements.

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A number of civil jury verdicts have been returned against insurers, broker dealers and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. Public companies in general and the financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters.

The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures and estimates of reasonably possible losses or range of loss based on such reviews.

In 2012, the IRS proposed favorable and unfavorable adjustments to the Company’s 2003 through 2007 reported taxable income. The Company protested certain unfavorable adjustments and sought resolution at the IRS’ Appeals Division. In October 2015, Appeals accepted the Company’s earlier proposed settlement offer. In September 2015, the IRS proposed favorable and unfavorable adjustments to the Company’s 2008 through 2011 reported taxable income. The Company agreed to these adjustments. As a result, pending a routine review by Congress’ Joint Committee on Taxation, the Company expects to receive an approximate $6.2 million net tax refund in a future period. This refund will not materially affect the Company’s effective tax rate.

Certain of the Company’s insurance subsidiaries, as well as certain other insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including uncertainty as to the legal theory or theories that may give rise to liability, the early stages of the audits being conducted, and, with respect to one block of life insurance policies that is co-insured by a subsidiary of the Company, uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with such policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits probable or reasonably estimable.

Certain of the Company’s subsidiaries are under a targeted multi-state examination with respect to their claims paying practices and their use of the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”) to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed, and substantial legal authority exists to support the position that the prevailing industry practice was lawful. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements. The Company believes it is reasonably possible that insurance regulators could demand from the Company administrative and/or examination fees relating to the targeted multi-state examination. Based on publicly reported payments by other life insurers, the Company estimates the range of such fees to be from$0 to $4.5 million.

14.EMPLOYEE BENEFIT PLANS

Beginning with the December 31, 2015 measurement, PLC changed its method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefits by applying a spot rate approach. Historically, PLC utilized a single weighted average discount rate derived from a selected yield curve used to measure the benefit obligation as of the measurement date. Under the new spot rate approach, the actual calculation of service and interest cost will reflect an array of spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. PLC made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot rates from the selected yield curve. This new approach does not affect the measurement of the total benefit obligation.

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Components of the net periodic benefit cost for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), are as follows:

	Successor Company																				Predecessor Company
	For The Three Months Ended June 30, 2016					For The Three Months Ended June 30, 2015					For The Six Months Ended June 30, 2016					February 1, 2015 to June 30, 2015					January 1, 2015 to January 31, 2015
	Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan
	(Dollars In Thousands)																				(Dollars In Thousands)
Service cost — benefits earned during the period	$	2,906		$	313	$	2,973		$	333	$	5,812		$	625	$	4,955		$	555	$	974		$	95
Interest cost on projected benefit obligation	2,737			438		2,433			408		5,474			877		4,055			680		1,002			140
Expected return on plan assets	(3,605		)	—		(3,642		)	—		(7,211		)	—		(6,070		)	—		(1,293		)	—
Amortization of prior service cost	—			—		—			—		—			—		—			—		(33		)	1
Amortization of actuarial losses	—			—		—			—		—			—		—			—		668			138
Preliminary net periodic benefit cost	2,038			751		1,764			741		4,075			1,502		2,940			1,235		1,318			374
Settlement/curtailment expense	—			1,500		—			—		—			1,500		—			—		—			—
Total net periodic benefit costs	$	2,038		$	2,251	$	1,764		$	741	$	4,075		$	3,002	$	2,940		$	1,235	$	1,318		$	374

On May 5, 2016, the Board of Directors of Protective Life Corporation decided to convert the accrued benefit payable under the excess benefit plan as of March 31, 2016 to John D. Johns, PLC's Chairman and Chief Executive Officer, into a lump sum amount. Upon the completion of the final terms of the conversion agreement, the lump sum amount will be allocated to a book entry account that will be treated as though it were a deferral account under PLC’s deferred compensation plan for officers. Mr. Johns will continue to accrue benefits with respect to his continued service as an employee of PLC after March 31, 2016 in a manner that is consistent with the provisions of the excess benefit plan. The conversion event will require PLC to re-measure the excess benefit plan and will result in settlement expense recognition upon the completion of the final conversion agreement. PLC estimates that the re-measurement of the excess benefit plan will result in the recognition of $1.5 million in settlement expense and has been accrued during the three months ended June 30, 2016 (Successor Company). Financial re-measurement of the excess benefit plan will be performed as soon as the conversion agreement is in place.

During the six months ended June 30, 2016 (Successor Company), PLC did not make a contribution to its defined benefit pension plan. PLC will make contributions in future periods as necessary to at least satisfy minimum funding requirements. PLC may also make additional contributions in future periods to maintain an adjusted funding target attainment percentage (“AFTAP”) of at least 80% and to avoid certain Pension Benefit Guaranty Corporation (“PBGC”) reporting triggers.

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15.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of June 30, 2016 (Successor Company), December 31, 2015 (Successor Company), and January 31, 2015 (Predecessor Company).

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Successor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives		Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, December 31, 2015	$	(1,246,391	)	$	—	$	(1,246,391	)
Other comprehensive income (loss) before reclassifications	1,017,335			—		1,017,335
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(2,572		)	—		(2,572		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(12,274		)	—		(12,274		)
Net current-period other comprehensive income (loss)	1,002,489			—		1,002,489
Ending Balance, June 30, 2016	$	(243,902	)	$	—	$	(243,902	)

(1) See Reclassification table below for details.

(2) As of June 30, 2016 net unrealized losses reported in AOCI were offset by $139.3 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Successor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives			Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, February 1, 2015	$	—		$	—		$	—
Other comprehensive income (loss) before reclassifications	(1,263,367		)	(86		)	(1,263,453		)
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(393		)	—			(393		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	17,369			86			17,455
Net current-period other comprehensive income (loss)	(1,246,391		)	—			(1,246,391		)
Ending Balance, December 31, 2015	$	(1,246,391	)	$	—		$	(1,246,391	)

(1) See Reclassification table below for details.

(2) As of December 31, 2015 net unrealized losses reported in AOCI were offset by $623.0 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

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Changes in Accumulated Other Comprehensive Income (Loss) by Component

Predecessor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives			Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, December 31, 2014	$	1,483,293		$	(82	)	$	1,483,211
Other comprehensive income (loss) before reclassifications	482,143			9			482,152
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(243		)	—			(243		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(4,166		)	23			(4,143		)
Net current-period other comprehensive income (loss)	477,734			32			477,766
Ending Balance, January 31, 2015	$	1,961,027		$	(50	)	$	1,960,977

(1) See Reclassification table below for details.

(2) As of January 31, 2015 net unrealized losses reported in AOCI were offset by $(492.6) million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

The following tables summarize the reclassifications amounts out of AOCI for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For the Three Months Ended June 30, 2016
	(Dollars In Thousands)
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	16,932		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(967		)	Net impairment losses recognized in earnings
	15,965			Total before tax
	(5,588		)	Tax (expense) or benefit
	$	10,377		Net of tax

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Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For The Six Months Ended June 30, 2016
	(Dollars In Thousands)
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	22,468		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(3,584		)	Net impairment losses recognized in earnings
	18,884			Total before tax
	(6,610		)	Tax (expense) or benefit
	$	12,274		Net of tax

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For The Three Months Ended June 30, 2015
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(41	)	Benefits and settlement expenses, net of reinsurance ceded
	(41		)	Total before tax
	14			Tax (expense) or benefit
	$	(27	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	3,350		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(5,734		)	Net impairment losses recognized in earnings
	(2,384		)	Total before tax
	834			Tax (expense) or benefit
	$	(1,550	)	Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

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Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
February 1, 2015 to June 30, 2015
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(131	)	Benefits and settlement expenses, net of reinsurance ceded
	(131		)	Total before tax
	45			Tax (expense) or benefit
	$	(86	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	3,723		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(5,734		)	Net impairment losses recognized in earnings
	(2,011		)	Total before tax
	703			Tax (expense) or benefit
	$	(1,308	)	Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Predecessor Company January 1, 2015 to January 31, 2015	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(36	)	Benefits and settlement expenses, net of reinsurance ceded
	(36		)	Total before tax
	13			Tax (expense) or benefit
	$	(23	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	6,891		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(481		)	Net impairment losses recognized in earnings
	6,410			Total before tax
	(2,244		)	Tax (expense) or benefit
	$	4,166		Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

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16.INCOME TAXES

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Successor Company						Predecessor Company
	As of June 30, 2016			February 1, 2015 to December 31, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Balance, beginning of period	$	8,937		$	105,850		$	168,076
Additions for tax positions of the current year	1,218			2,213			(5,010		)
Additions for tax positions of prior years	—			1,812			1,149
Reductions of tax positions of prior years:	0
Changes in judgment	—			(644		)	(58,365		)
Settlements during the period	(710		)	(100,294		)	—
Lapses of applicable statute of limitations	—			—			—
Balance, end of period	$	9,445		$	8,937		$	105,850

In 2012, the IRS proposed favorable and unfavorable adjustments to the Company's 2003 through 2007 reported taxable income. The Company protested certain unfavorable adjustments and sought resolution at the IRS' Appeals Division. In October 2015, Appeals accepted the Company's earlier proposed settlement offer. In September of 2015, the IRS proposed favorable and unfavorable adjustments to the Company's 2008 through 2011 reported taxable income. The Company agreed to these adjustments. The resulting net adjustment to the Company's current income taxes for the years 2003 through 2011 will not materially affect the Company or its effective tax rate. The Company is currently under audit by the IRS for the years 2012 and 2013. The audit adjustments received as of June 30, 2016 related to the 2012 and 2013 years will not materially impact the Company or its effective tax rate. These agreements with the IRS are the primary cause for the reductions of unrecognized tax benefits shown in the chart above.

The Company believes that it is possible in the next 12 months, approximately $0.5 million of these unrecognized tax benefits will be reduced due to time lapse and the closure of the statute of limitations.

In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2012. Nevertheless, certain of these pre-2012 years have pending U.S. tax refunds. Due to their size, these refunds are being reviewed by Congress' Joint Committee on Taxation. Furthermore, due to the aforementioned IRS adjustments to the Company's pre-2012 taxable income, the Company is amending certain of its 2003 through 2011 state income tax returns. Such amendments will cause such years to remain open, pending the states' acceptances of the returns. At this time, the Company believes that the Joint Committee's review of its U.S. tax refunds and the states' acceptance of its amending returns will be completed this year. The underlying statutes of limitations are expected to close in due course on or before June 30, 2017.

During the six months ended June 30, 2016 (Successor Company), the Company entered into a reinsurance transaction, as discussed in Note 3, Reinsurance and Financing Transactions. This transaction is expected to generate an operating loss on the Company’s consolidated 2016 US income tax return. The Company has evaluated its ability to carry this loss back to receive refunds of previously-paid taxes, plus utilize the remaining loss in future years. The Company expects to receive refunds for substantially all of the US income taxes that it paid in 2014 and 2015, as well as fully utilize the remaining operating loss carryforward during the carryforward period. Based on the Company’s current assessment of future taxable income, including available tax planning opportunities, the Company anticipates that it is more likely than not that it will generate sufficient taxable income to realize all of its material deferred tax assets. The Company did not record a valuation allowance against its material deferred tax assets as of June 30, 2016.

The Company used its respective estimates of its annual 2016 and 2015 incomes in computing its effective income tax rates for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company). The effective tax rates for the three and six months ended June 30, 2016 (Successor Company), the three months June 30, 2015 (Successor Company) the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company) were 33.7%, 33.1%, 28.1%, 17.0%, and 32.8%, respectively.

17.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.

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• 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, independent marketing organizations and affinity groups.

• 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 and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

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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 June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Revenues
Life Marketing	$	384,823		$	347,691		$	765,897		$	602,613		$	133,361
Acquisitions	453,848			363,985			878,655			622,774			139,761
Annuities	188,597			43,468			407,113			92,812			130,918
Stable Value Products	26,237			16,656			56,139			26,998			8,181
Asset Protection	76,419			77,625			150,098			126,921			24,566
Corporate and Other	44,918			13,528			76,842			31,796			22,859
Total revenues	$	1,174,842		$	862,953		$	2,334,744		$	1,503,914		$	459,646
Segment Operating Income (Loss)
Life Marketing	$	25,098		5,672			38,224			$	9,953		$	(2,271	)
Acquisitions	45,285			37,876			113,938			73,946			20,134
Annuities	47,480			40,513			92,756			71,886			11,363
Stable Value Products	15,178			9,349			29,626			15,464			4,529
Asset Protection	4,141			4,880			8,397			8,523			1,907
Corporate and Other	(30,248		)	(36,374		)	(64,990		)	(50,331		)	(16,662		)
Total segment operating income	106,934			61,916			217,951			129,441			19,000
Realized investment (losses) gains - investments(1)	100,889			(115,716		)	184,031			(158,649		)	89,414
Realized investment (losses) gains - derivatives	52,757			18,233			93,577			18,177			24,433
Income tax (expense) benefit	(87,787		)	9,991			(164,149		)	1,875			(44,325		)
Net income (loss)	$	172,793		$	(25,576	)	$	331,410		$	(9,156	)	$	88,522
All other investment gains (losses)	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672
Less: amortization related to DAC/VOBA and benefits and settlement expenses	(13,073		)	7,635			(17,123		)	15,512			(8,742		)
Realized investment gains (losses) - investments	$	100,889		$	(115,716	)	$	184,031		$	(158,649	)	$	89,414
Derivative financial instruments gains (losses)	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031
Less: VA GMWB economic cost	(9,209		)	(7,667		)	(18,121		)	(12,559		)	(2,402		)
Realized investment gains (losses) - derivatives	$	52,757		$	18,233		$	93,577		$	18,177		$	24,433

(1) Includes credit related other-than-temporary impairments of $1.0 million, $3.6 million, $5.7 million, $5.7 million, and $0.5 million for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively.

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	Operating Segment Assets As of June 30, 2016 (Successor Company)
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	13,916,859	$	20,052,484	$	19,873,357	$	2,711,452
Deferred policy acquisition costs and value of business acquired	1,134,643		93,983		625,628		4,353
Other intangibles	310,141		38,380		190,116		9,056
Goodwill	200,274		14,524		336,677		113,813
Total assets	$	15,561,917	$	20,199,371	$	21,025,778	$	2,838,674

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	812,678	$	13,755,465	$	71,122,295
Deferred policy acquisition costs and value of business acquired	36,559		—		1,895,166
Other intangibles	76,782		—		624,475
Goodwill	67,155		—		732,443
Total assets	$	993,174	$	13,755,465	$	74,374,379

	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

18.SUBSEQUENT EVENTS

The Company has evaluated the effects of events subsequent to June 30, 2016 (Successor Company), and through the date we filed our consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated condensed financial statements.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our consolidated condensed financial statements included under Part I, Item 1, Financial Statements (Unaudited), of this Quarterly Report on Form 10-Q and our audited consolidated financial statements for the year ended December 31, 2015 (Successor Company), included in our Annual Report on Form 10-K.

For a more complete understanding of our business and current period results, please read the following MD&A in conjunction with our latest Annual Report on Form 10-K and other filings with the United States Securities and Exchange Commission (the “SEC”).

Certain reclassifications have been made in the previously reported financial statements and accompanying notes to make the prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income or shareowner’s equity.

FORWARD-LOOKING STATEMENTS — CAUTIONARY LANGUAGE

This report reviews our financial condition and results of operations, including our liquidity and capital resources. Historical information is presented and discussed, and where appropriate, factors that may affect future financial performance are also identified and discussed. Certain statements made in this report include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that may predict, forecast, indicate, or imply future results, performance, or achievements instead of historical facts and may contain words like “believe,” “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “plan,” “will,” “shall,” “may,” and other words, phrases, or expressions with similar meaning. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the results contained in the forward-looking statements, and we cannot give assurances that such statements will prove to be correct. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. For more information about the risks, uncertainties, and other factors that could affect our future results, please refer to Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 1A, Risk Factors, of this report, as well as Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (Successor Company).

IMPORTANT INVESTOR INFORMATION

We file reports with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports as required. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We are an electronic filer and the SEC maintains an internet site at www.sec.gov that contains these reports and other information filed electronically by us. We make available through our website, www.protective.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such materials are electronically filed with or furnished to the SEC. We will furnish such documents to anyone who requests such copies in writing. Requests for copies should be directed to: Financial Information, Protective Life Corporation, P. O. Box 2606, Birmingham, Alabama 35202, Telephone (205) 268-3912, Fax (205) 268-3642.

We also make available to the public current information, including financial information, regarding the Company and our affiliates on the Financial Information page of our website, www.protective.com. We encourage investors, the media and others interested in us and our affiliates to review the information we post on our website. The information found on our website is not part of this or any other report filed with or furnished to the SEC.

OVERVIEW

Our business

We are a wholly owned subsidiary of Protective Life Corporation (“PLC”). Founded in 1907, we are the largest operating subsidiary of PLC. On February 1, 2015, PLC became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (“Dai-ichi Life”), when DL Investment (Delaware), Inc., a wholly owned subsidiary of Dai-ichi Life, merged with and into PLC (the “Merger”). Prior to February 1, 2015, PLC’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger, PLC and the Company remain an SEC registrants for financial reporting purposes in the United States. We provide financial services through the production, distribution, and administration of insurance and investment products. Unless the context otherwise requires, the “Company,” “we,” “us,” or “our” refers to the consolidated group of Protective Life Insurance Company and our subsidiaries.

We have several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. We periodically evaluate our operating segments as prescribed in the Accounting Standards Codification (“ASC”) Segment Reporting Topic, and make adjustments to our segment reporting as needed. There were no changes to our operating segments made or required to be made as a result of the Merger on February 1, 2015.

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Our operating segments are Life Marketing, Acquisitions, Annuities, Stable Value Products, Asset Protection, and Corporate and Other.

• Life Marketing- We market fixed universal life (“UL”), indexed universal life (“IUL”), 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, independent marketing organizations, and affinity groups.

• Acquisitions - We focus on acquiring, converting, and servicing policies from other companies. This 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.

• Annuities - We market fixed and variable annuity (“VA”) products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers.

• Stable Value Products - We sell 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 Federal Home Loan Bank (“FHLB”), and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. We also have an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors.

• Asset Protection - We market extended service contracts and credit life and disability insurance to protect consumers’ investments in automobiles and recreational vehicles. In addition, this 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.

• Corporate and Other - This 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.

RECENT DEVELOPMENTS

On January 15, 2016, we completed the transaction contemplated by the Master Agreement, dated September 30, 2015 (the “Master Agreement”), with Genworth Life and Annuity Insurance Company (“GLAIC”), as previously reported in our Current Reports on Form 8-K filed October 1, 2015 and January 15, 2016. Pursuant to the Master Agreement, effective January 1, 2016, we entered into a reinsurance agreement (the “Reinsurance Agreement”) under the terms of which we coinsure certain term life insurance business of GLAIC (the “GLAIC Block”). In connection with the reinsurance transaction, on January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18-year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by PLICO and West Coast Life Insurance Company (“WCL”), a direct wholly owned subsidiary of the Company. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion. Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City notes for the 18-year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. In connection with the transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. The estimated average annual expense of the credit enhancement under generally accepted accounting principles is approximately $3.1 million, after-tax. As a result of the financing transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. Also on January 15, 2016, Golden Gate paid an extraordinary dividend of $300 million to the Company as approved by the Vermont Department of Regulation.

RISKS AND UNCERTAINTIES

The factors which could affect our future results include, but are not limited to, general economic conditions and the following risks and uncertainties:

General

• exposure to the risks of natural and man-made disasters and catastrophes, diseases, epidemics, pandemics, malicious acts, cyber-attacks, terrorist acts and climate change could adversely affect our operations and results;

• a disruption affecting the electronic systems of the Company or those on whom the Company relies could adversely affect our business, financial condition and results of operations;

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• confidential information maintained in the systems of the Company or other parties upon which the Company relies could be compromised or misappropriated, damaging our business and reputation and adversely affecting our financial condition and results of operations;

• our results and financial condition may be negatively affected should actual experience differ from management’s assumptions and estimates;

• we may not realize our anticipated financial results from our acquisitions strategy;

• assets allocated to the MONY Closed Block benefit only the holders of certain policies; adverse performance of Closed Block assets or adverse experience of Closed Block liabilities may negatively affect us;

• we are dependent on the performance of others;

• our risk management policies, practices, and procedures could leave us exposed to unidentified or unanticipated risks, which could negatively affect our business or result in losses;

• our strategies for mitigating risks arising from our day-to-day operations may prove ineffective resulting in a material adverse effect on our results of operations and financial condition;

Financial Environment

• interest rate fluctuations and sustained periods of low interest rates could negatively affect our interest earnings and spread income, or otherwise impact our business;

• our investments are subject to market and credit risks, which could be heightened during periods of extreme volatility or disruption in financial and credit markets;

• equity market volatility could negatively impact our business;

• our use of derivative financial instruments within our risk management strategy may not be effective or sufficient;

• credit market volatility or disruption could adversely impact our financial condition or results from operations;

• our ability to grow depends in large part upon the continued availability of capital;

• we could be adversely affected by a ratings downgrade or other negative action by a ratings organization;

• we could be forced to sell investments at a loss to cover policyholder withdrawals;

• disruption of the capital and credit markets could negatively affect our ability to meet our liquidity and financing needs;

• difficult general economic conditions could materially adversely affect our business and results of operations;

• we may be required to establish a valuation allowance against our deferred tax assets, which could materially adversely affect our results of operations, financial condition, and capital position;

• we could be adversely affected by an inability to access our credit facility;

• we could be adversely affected by an inability to access FHLB lending;

• our financial condition or results of operations could be adversely impacted if our assumptions regarding the fair value and future performance of our investments differ from actual experience;

• adverse actions of certain funds or their advisers could have a detrimental impact on our ability to sell our variable life and annuity products, or maintain current levels of assets in those products;

• the amount of statutory capital that we have and the amount of statutory capital that we must hold to maintain our financial strength and credit ratings and meet other requirements can vary significantly from time to time and is sensitive to a number of factors outside of our control;

Industry and Regulation

• we are highly regulated and are subject to routine audits, examinations, and actions by regulators, law enforcement agencies, and self-regulatory organizations;

• we may be subject to regulations influenced by or related to international regulatory authorities or initiatives;

• NAIC actions, pronouncements and initiatives may affect our product profitability, reserve and capital requirements, financial condition or results of operations;

• regulatory actions, interpretations and pronouncements related to Actuarial Guidelines XXXVIII may have an adverse effect on our ability to sell certain universal life products and reserving requirements;

• our use of captive reinsurance companies to finance statutory reserves related to our term and universal life products and to reduce volatility affecting our variable annuity products, may be limited or adversely affected by regulatory action, pronouncements and interpretations;

• laws, regulations and initiatives related to unreported deaths and unclaimed property and death benefits may result in operational burdens, fines, unexpected payments or escheatments;

• we are subject to insurance guaranty fund and insurable interest laws, and the laws, rules and regulations of state, federal and foreign regulators that could adversely affect our financial condition or results of operations;

• the Healthcare Act and related regulations could adversely affect our results of operations or financial condition;

• laws, rules and regulations promulgated in connection with the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act may adversely affect our results of operations or financial condition;

• regulations issued by the Department of Labor on April 6, 2016, expanding the definition of "investment advice fiduciary" under ERISA and creating and revising several prohibited transactions exemptions for investment activities in light of that expanded definition, may have a material adverse impact on our ability to sell annuities and other products, to retain in-force business and on our financial condition or results of operations;

• we may be subject to regulation, investigations, enforcement actions, fines and penalties imposed by the SEC, FINRA and other federal and international regulators in connection with our business operations;

• changes to tax law or interpretations of existing tax law could adversely affect our ability to compete with non-insurance products or reduce the demand for certain insurance products;

• financial services companies are frequently the targets of legal proceedings, including class action litigation, which could result in substantial judgments;

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• the financial services and insurance industries are sometimes the target of law enforcement investigations and the focus of increased regulatory scrutiny;

• new accounting rules, changes to existing accounting rules, or the grant of permitted accounting practices to competitors could negatively impact us;

• if our business does not perform well, we may be required to recognize an impairment of our goodwill and indefinite lived intangible assets which could adversely affect our results of operations or financial condition;

• use of reinsurance introduces variability in our statements of income;

• our reinsurers could fail to meet assumed obligations, increase rates, terminate agreements, or be subject to adverse developments that could affect us;

• our policy claims fluctuate from period to period resulting in earnings volatility;

• we operate in a mature, highly competitive industry, which could limit our ability to gain or maintain our position in the industry and negatively affect profitability;

• our ability to maintain competitive unit costs is dependent upon the level of new sales and persistency of existing business; and

• we may not be able to protect our intellectual property and may be subject to infringement claims.

For more information about the risks, uncertainties, and other factors that could affect our future results, please see Part II, Item 1A of this report and our Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES

Our accounting policies require the use of judgments relating to a variety of assumptions and estimates, including, but not limited to expectations of current and future mortality, morbidity, persistency, expenses, and interest rates, as well as expectations around the valuations of securities. Because of the inherent uncertainty when using the assumptions and estimates, the effect of certain accounting policies under different conditions or assumptions could be materially different from those reported in the consolidated condensed financial statements. For a complete listing of our critical accounting policies, refer to our Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company).

RESULTS OF OPERATIONS

We use the same accounting policies and procedures to measure segment operating income (loss) and assets as we use 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. Segment operating income (loss) also excludes changes in the GMWB embedded derivatives (excluding the portion attributed to economic cost), actual GMWB incurred claims and the related amortization of DAC attributed to each of these items.

Segment operating income (loss) represents the basis on which the performance of our 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.

However, segment operating income (loss) should not be viewed as a substitute for net income calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In addition, our segment operating income (loss) measures may not be comparable to similarly titled measures reported by other companies.

We periodically review and update as appropriate our key assumptions on products using the ASC Financial Services-Insurance Topic, including future mortality, expenses, lapses, premium persistency, benefit utilization, investment yields, interest spreads, and equity market returns. Changes to these assumptions result in adjustments which increase or decrease DAC/VOBA amortization and/or benefits and expenses. The periodic review and updating of assumptions is referred to as “unlocking”. When referring to DAC/VOBA amortization unlocking on products covered under the ASC Financial Services-Insurance Topic, the reference is to changes in all balance sheet components amortized over estimated gross profits or revenues.

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The following table presents a summary of results and reconciles segment operating income (loss) to consolidated net income (Predecessor and Successor periods are not comparable):

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Segment Operating Income (Loss)
Life Marketing	$	25,098		$	5,672		$	38,224		$	9,953		$	(2,271	)
Acquisitions	45,285			37,876			113,938			73,946			20,134
Annuities	47,480			40,513			92,756			71,886			11,363
Stable Value Products	15,178			9,349			29,626			15,464			4,529
Asset Protection	4,141			4,880			8,397			8,523			1,907
Corporate and Other	(30,248		)	(36,374		)	(64,990		)	(50,331		)	(16,662		)
Total segment operating income	106,934			61,916			217,951			129,441			19,000
Realized investment gains (losses) - investments (1)	100,889			(115,716		)	184,031			(158,649		)	89,414
Realized investment gains (losses) - derivatives	52,757			18,233			93,577			18,177			24,433
Income tax (expense) benefit	(87,787		)	9,991			(164,149		)	1,875			(44,325		)
Net income (loss)	$	172,793		$	(25,576	)	$	331,410		$	(9,156	)	$	88,522
All other investment gains (losses)	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672
Less: amortization related to DAC/VOBA and benefits and settlement expenses	(13,073		)	7,635			(17,123		)	15,512			(8,742		)
Realized investment gains (losses) - investments	$	100,889		$	(115,716	)	$	184,031		$	(158,649	)	$	89,414
Derivative financial instruments gains (losses)	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031
Less: VA GMWB economic cost	(9,209		)	(7,667		)	(18,121		)	(12,559		)	(2,402		)
Realized investment gains (losses) - derivatives	$	52,757		$	18,233		$	93,577		$	18,177		$	24,433

(1)  Includes credit related other-than-temporary impairments of $1.0 million, $3.6 million, $5.7 million, $5.7 million, and $0.5 million for the three and six months ended June 30, 2016 (Successor Company), for the three months ended June 30, 2015 (Successor Company), for the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively.

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Net income was $172.8 million and operating income was $106.9 million for the three months ended June 30, 2016.

We experienced net realized gains of $131.4 million for the three months ended June 30, 2016. The gains realized were primarily related to $53.4 million of gains related to the net activity of the modified coinsurance portfolio, $16.9 million of gains related to investment securities sale activity, $13.7 million of gains related to the derivatives with PLC, net gains of $50.5 million of derivatives related to variable annuity contracts, net gains of $0.2 million of derivatives related to IUL contracts, and net gains of $2.1 million of derivatives related to FIA contracts. Partially offsetting these gains were $1.0 million of other-than-temporary impairment credit-related losses and net losses of $4.4 million loss related to other investment and derivative activity.

• Life Marketing segment operating income was $25.1 million for the three months ended June 30, 2016, representing an increase of $19.4 million from the three months ended June 30, 2015. The increase was primarily due to higher universal life policy fees and higher investment income. These increases were partially offset by an increase in reserves from growth in retained universal life insurance in-force.

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• Acquisitions segment operating income was $45.3 million for the three months ended June 30, 2016, an increase of $7.4 million as compared to the three months ended June 30, 2015, primarily due to the addition of the GLAIC reinsurance transaction completed on January 15, 2016. The GLAIC transaction added $9.0 million to segment operating income for the three months ended June 30, 2016. This was partly offset by the expected runoff of the in-force blocks of business.

• Annuities segment operating income was $47.5 million for the three months ended June 30, 2016, as compared to $40.5 million for the three months ended June 30, 2015, an increase of $7.0 million, or 17.2%. This variance was primarily the result of lower credited interest and favorable single premium immediate annuities (“SPIA”) mortality offset by lower investment income and lower fee and other income from the variable annuities ("VA") line of business.

• Stable Value Products segment operating income was $15.2 million and increased $5.8 million, or 62.3%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. The increase in operating earnings resulted from an increase in participating mortgage income, higher operating spreads, and increased average account values. Participating mortgage income for the three months ended June 30, 2016 was $3.9 million as compared to $0.5 million for the three months ended June 30, 2015. The adjusted operating spread, which excludes participating income, decreased by 4 basis points for the three months ended June 30, 2016 over the prior year, due primarily to an increase in credited interest.

• Asset Protection segment operating income was $4.1 million, representing a decrease of $0.7 million, or 15.1%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Earnings from the guaranteed asset protection (“GAP”) product line decreased $0.7 million primarily resulting from higher losses. Credit insurance earnings decreased $0.3 million primarily due to lower underwriting income. Service contract earnings increased $0.3 million primarily due to favorable underwriting income.

• The Corporate and Other segment operating loss was $30.2 million for the three months ended June 30, 2016, as compared to an operating loss of $36.4 million for the three months ended June 30, 2015. The decrease was primarily due to a $19.0 million increase in net investment income, partially offset by a $10.9 million increase in interest expense.

For The Six Months Ended June 30, 2016 (Successor Company)

Net income was $331.4 million and operating income was $218.0 million for the six months ended June 30, 2016.

We experienced net realized gains of $242.4 million for the six months ended June 30, 2016. The gains realized were primarily related to $73.2 million of gains related to the net activity of the modified coinsurance portfolio, $22.5 million of gains related to investment securities sale activity, $17.7 million related to derivatives with PLC, and $144.1 million of derivatives related to variable annuity contracts. Partially offsetting these gains were $3.6 million of other-than-temporary impairment credit-related losses, net losses of $6.4 million loss related to other investment and derivative activity, net losses of $0.8 million of derivatives related to IUL contracts, and net losses of $4.2 million of derivatives related to FIA contracts. 

• Life Marketing segment operating income was $38.2 million which consisted of universal life operating income of $39.4 million, traditional life operating income of $5.0 million, and an operating loss of $6.2 million in other lines.

• Acquisitions segment operating income was $113.9 million. This included expected runoff of the in-force blocks of business and $17.8 million in operating income associated with the GLAIC reinsurance transaction that was completed on January 15, 2016.

• Annuities segment operating income was $92.8 million which included $42.0 million of variable annuity operating earnings, $59.5 million of fixed annuity operating earnings, and a $8.7 million loss in other annuity earnings. The fixed annuity results were positively impacted by $11.3 million of favorable SPIA mortality.

• Stable Value Products segment operating income of $29.6 million was primarily due to activity in average account values, participating mortgage income, and operating spread. Participating mortgage income was $9.2 million and the adjusted operating spread, which excludes participating income, was 177 basis points.

• Asset Protection segment operating income was $8.4 million which consisted of service contract earnings of $5.9 million, GAP product earnings of $1.6 million, and credit insurance earnings of $0.9 million.

• The Corporate and Other segment’s $65.0 million operating loss was primarily due to $119.0 million of other operating expense which is primarily interest expense and corporate overhead expenses. These expenses were partially offset by $55.3 million of investment income which represents income on assets supporting our equity capital and held-to-maturity notes.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Net loss was $9.2 million and operating income was $129.4 million for the period of February 1, 2015 to June 30, 2015.

We experienced net realized losses of $137.5 million for the period of February 1, 2015 to June 30, 2015. The losses realized were primarily related to $5.7 million of other-than-temporary impairment credit-related losses, net losses of $138.2

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million of derivatives related to variable annuity contracts, $0.6 million of losses related to the net activity of the modified coinsurance portfolio, and $3.1 million of losses related to derivatives with PLC. Partially offsetting these losses were $3.7 million of gains related to investment securities sale activity, net gains of $3.6 million of derivatives related to FIA contracts, net gains of $1.9 million related to IUL contracts, and net gains of $0.9 million related to other investment and derivative activity.

• Life Marketing segment operating income was $10.0 million which consisted of universal life earnings of $19.8 million, a traditional life operating loss of $2.5 million, and an operating loss of $7.3 million in other lines.

• Acquisitions segment operating income was $73.9 million. This included expected runoff of the in force blocks of business.

• Annuities segment operating income was $71.9 million which included $44.4 million of fixed annuity operating earnings and $34.2 million of variable annuity operating earnings. The fixed annuity results were positively impacted by $4.8 million of favorable SPIA mortality.

• Stable Value Products segment operating income of $15.5 million was primarily due to activity in average account values, operating spread, and participating mortgage income. Participating mortgage income was $1.7 million and the adjusted operating spread, which excludes participating income, was 171 basis points.

• Asset Protection segment operating income was $8.5 million which consisted of service contract earnings of $4.8 million, GAP product earnings of $2.6 million, and credit insurance earnings of $1.1 million.

• The Corporate and Other segment’s $50.3 million operating loss was primarily due to $77.7 million of other operating expense which is primarily interest expense and corporate overhead expenses. These expenses were partially offset by $26.9 million of investment income which represents income on assets supporting our equity capital.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Net income was $88.5 million and operating income was $19.0 million for the period of January 1, 2015 to January 31, 2015.

We experienced net realized gains of $102.7 million for the period of January 1, 2015 to January 31, 2015. The gains realized for the period of January 1, 2015 to January 31, 2015, were primarily related to net gains of $75.9 million of derivatives related to variable annuity contracts, $15.9 million of gains related to derivatives with PLC, $6.9 million of gains related to investment securities sale activity, $5.0 million of gains related to the net activity of the modified coinsurance portfolio, and net gains of $1.2 million related to other investment and derivative activity. Partially offsetting these gains were net losses of $1.0 million of derivatives related to FIA contracts, net losses of $0.6 million of derivatives related to IUL contracts, and $0.5 million for other-than-temporary impairment credit-related losses.

• Life Marketing segment operating loss was $2.3 million. Included in that amount was a traditional life operating loss of $3.4 million, universal life earnings of $1.2 million, and operating earnings of $0.1 million in other lines.

• Acquisitions segment operating income was $20.1 million. This included expected runoff of the in force blocks of business.

• Annuities segment operating income was $11.4 million for the period of January 1, 2015 to January 31, 2015. Included in that amount was $2.8 million of favorable SPIA mortality results and $2.6 million of unfavorable unlocking.

• Stable Value Products segment operating income of $4.5 million was primarily due activity in average account values, operating spread, and participating mortgage income. Participating mortgage income was $0.1 million and the adjusted operating spread, which excludes participating income, was 276 basis points.

• Asset Protection segment operating income was $1.9 million which consisted of $0.8 million in service contract earnings, $0.9 million in GAP product earnings, and credit insurance earnings of $0.2 million.

• The Corporate and Other segment’s $16.7 million operating loss was primarily due to $18.3 million of total benefits and expenses offset by $0.3 million of net investment income and $1.3 million of premiums and policy fees.

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Life Marketing

Segment Results of Operations

Segment results were as follows: 

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	448,991		$	439,717		$	889,740		$	683,395		$	136,068
Reinsurance ceded	(204,157		)	(211,296		)	(387,881		)	(279,679		)	(51,142		)
Net premiums and policy fees	244,834			228,421			501,859			403,716			84,926
Net investment income	131,340			120,326			259,602			198,259			47,622
Other income	769			(209		)	1,100			940			414
Total operating revenues	376,943			348,538			762,561			602,915			132,962
Realized gains (losses) - investments	7,687			(2,315		)	4,127			(2,182		)	997
Realized gains (losses) - derivatives	193			1,468			(791		)	1,880			(598		)
Total revenues	384,823			347,691			765,897			602,613			133,361
BENEFITS AND EXPENSES
Benefits and settlement expenses	303,136			291,619			623,979			514,349			123,525
Amortization of deferred policy acquisition costs and value of business acquired	31,024			33,428			63,740			53,575			4,584
Other operating expenses	17,685			17,819			36,618			25,038			7,124
Operating benefits and settlement expenses	351,845			342,866			724,337			592,962			135,233
Amortization related to benefits and settlement expenses	3,331			1,110			(1,840		)	1,519			(346		)
Amortization of DAC/VOBA related to realized gains (losses) - investments	284			10			30			41			229
Total benefits and expenses	355,460			343,986			722,527			594,522			135,116
INCOME (LOSS) BEFORE INCOME TAX	29,363			3,705			43,370			8,091			(1,755		)
Less: realized gains (losses)	7,880			(847		)	3,336			(302		)	399
Less: amortization related to benefits and settlement expenses	(3,331		)	(1,110		)	1,840			(1,519		)	346
Less: related amortization of DAC/VOBA	(284		)	(10		)	(30		)	(41		)	(229		)
OPERATING INCOME (LOSS)	$	25,098		$	5,672		$	38,224		$	9,953		$	(2,271	)

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The following table summarizes key data for the Life Marketing segment:

	Successor Company								Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)								(Dollars In Thousands)
Sales By Product
Traditional life	$	268	$	101	$	671	$	211	$	42
Universal life	41,770		39,860		81,277		63,346		11,473
BOLI	—		15		—		15		—
	$	42,038	$	39,976	$	81,948	$	63,572	$	11,515
Sales By Distribution Channel
Traditional brokerage	$	36,541	$	33,267	$	70,742	$	52,791	$	9,724
Institutional	3,884		4,990		8,015		8,268		1,472
Direct	1,613		1,719		3,191		2,513		319
	$	42,038	$	39,976	$	81,948	$	63,572	$	11,515
Average Life Insurance In-force(1)
Traditional	$	366,712,353	$	384,532,759	$	371,454,097	$	387,972,086	$	391,411,413
Universal life	205,932,631		166,142,960		195,945,075		159,730,340		153,317,720
	$	572,644,984	$	550,675,719	$	567,399,172	$	547,702,426	$	544,729,133
Average Account Values
Universal life	$	7,410,278	$	7,287,291	$	7,382,726	$	7,269,132	$	7,250,973
Variable universal life	597,855		599,483		586,026		586,870		574,257
	$	8,008,133	$	7,886,774	$	7,968,752	$	7,856,002	$	7,825,230

(1) Amounts are not adjusted for reinsurance ceded.

Operating expenses detail

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Insurance companies:
First year commissions	$	48,216		$	42,757		$	96,343		$	71,421		$	14,108
Renewal commissions	9,325			8,544			18,067			13,396			2,513
First year ceding allowances	(939		)	(927		)	(1,788		)	(1,435		)	(49		)
Renewal ceding allowances	(40,347		)	(39,288		)	(78,556		)	(68,140		)	(12,364		)
General & administrative	53,529			52,788			105,936			84,761			17,466
Taxes, licenses, and fees	8,234			7,736			15,665			12,910			2,509
Other operating expenses incurred	78,018			71,610			155,667			112,913			24,183
Less: commissions, allowances & expenses capitalized	(60,333		)	(53,791		)	(119,049		)	(87,875		)	(17,059		)
Other operating expenses	$	17,685		$	17,819		$	36,618		$	25,038		$	7,124

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Segment operating income

Operating income was $25.1 million for the three months ended June 30, 2016, representing an increase of $19.4 million from the three months ended June 30, 2015. The increase was primarily due to higher universal life policy fees and higher investment income. These increases were partially offset by an increase in reserves from growth in retained universal life insurance in-force.

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Operating revenues

Total operating revenues for the three months ended June 30, 2016, increased $28.4 million, or 8.1%, as compared to the three months ended June 30, 2015. This increase was driven by higher premiums and policy fees due to continued growth in the universal life block. Higher investment income due to increases in net in-force reserves also contributed to the increase.

Net premiums and policy fees

Net premiums and policy fees increased by $16.4 million, or 7.2%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, due to an increase in policy fees associated with continued growth in universal life business. This increase is partially offset by a decrease in traditional life premiums.

Net investment income

Net investment income in the segment increased $11.0 million, or 9.2%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Of the increase in net investment income, $7.1 million was the result of a net increase in universal life reserves. Traditional life investment income increased $3.3 million due to lower reserve funding costs and higher reserves.

Other income

Other income increased $1.0 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to fees on variable universal life funds.

Benefits and settlement expenses

Benefits and settlement expenses increased by $11.5 million, or 3.9%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, due to an increase in reserves and claims from growth in retained universal life insurance in-force, partly offset by a smaller increase in traditional reserves.

Amortization of DAC/VOBA

DAC/VOBA amortization decreased $2.4 million, or 7.2%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, partially due to the impact of unlocking. For the three months ended June 30, 2016, universal life and BOLI unlocking decreased amortization $0.6 million, as compared to a decrease of $0.1 million for the three months ended June 30, 2015.

Other operating expenses

Other operating expenses decreased $0.1 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. This decrease reflects higher ceded allowances, largely offset by higher general administrative expenses of $0.7 million along with an increase in taxes, licenses and fees of $0.5 million.

Sales

Sales for the segment increased $2.1 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Universal life sales increased $1.9 million primarily due to an expansion in distribution partners and focused efforts with existing partners.

For The Six Months Ended June 30, 2016 (Successor Company)

Segment operating income

Operating income was $38.2 million which consisted of universal life operating income of $39.4 million, traditional life operating income of $5.0 million, and an operating loss of $6.2 million in other lines.

Net premiums and policy fees

Net premiums and policy fees were $501.9 million for the six months ended June 30, 2016. Included in this amount are traditional life net premiums of $213.2 million and universal life policy fees of $288.2 million.

Net investment income

Net investment income was $259.9 million for the six months ended June 30, 2016. Included in this amount is traditional life net investment income of $38.5 million and universal life investment income of $214.2 million.

Other income

Other income was $1.1 million for the six months ended June 30, 2016, primarily due to fees on variable universal life funds.

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Benefits and settlement expenses

Benefit and settlement expenses were $624.0 million for the six months ended June 30, 2016. This amount includes traditional life benefit and settlement expenses of $172.4 million and universal life benefit and settlement expenses of $447.4 million, including $154.9 million of interest on funds for universal life policies.

Amortization of DAC and VOBA

DAC and VOBA amortization was $63.7 million for the six months ended June 30, 2016.

Other operating expenses

Other operating expenses were $36.6 million for the six months ended June 30, 2016. Other operating expenses for the insurance companies reflect commissions of $114.4 million, general and administrative expenses of $106.0 million, and taxes, licenses, and fees of $15.7 million, partly offset by ceding allowances of $80.3 million and capitalization of $119.1 million.

Sales

Sales for the segment were $81.9 million for the six months ended June 30, 2016, comprised primarily of universal life sales.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Segment operating income

Segment operating income was $10.0 million which consisted of universal life earnings of $19.8 million, a traditional life operating loss of $2.5 million, and an operating loss of $7.3 million in other lines.

Net premiums and policy fees

Net premiums and policy fees were $403.7 million for the period of February 1, 2015 to June 30, 2015. Included in this amount are traditional life net premiums of $212.9 million and universal life policy fees of $190.6 million.

Net investment income

Net investment income was $198.3 million for the period of February 1, 2015 to June 30, 2015. Included in this amount is traditional life net investment income of $26.0 million and universal life investment income of $167.4 million.

Other income

Other income was $0.9 million for the period of February 1, 2015 to June 30, 2015 primarily due to fees on variable universal life funds.

Benefits and settlement expenses

Benefit and settlement expenses were $514.3 million for the period of February 1, 2015 to June 30, 2015. This amount includes traditional life benefit and settlement expenses of $182.6 million and universal life benefit and settlement expenses of $331.5 million, including $131.6 million of interest on funds for universal life policies.

Amortization of DAC and VOBA

DAC and VOBA amortization was $53.6 million for the period of February 1, 2015 to June 30, 2015.

Other operating expenses

Other operating expenses were $25.0 million for the period of February 1, 2015 to June 30, 2015. Other operating expenses for the insurance companies reflect commissions of $84.8 million, general and administrative expenses of $84.8 million, and taxes, licenses, and fees of $12.9 million, partly offset by ceding allowances of $69.6 million and capitalization of $87.9 million.

Sales

Sales for the segment were $63.6 million for the period of February 1, 2015 to June 30, 2015 comprised primarily of universal life sales.

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For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Segment operating income

Segment operating loss was $2.3 million. Included in that amount was a traditional life operating loss of $3.4 million, universal life earnings of $1.2 million, and an operating loss of $0.1 million in other lines.

Net premiums and policy fees

Net premiums and policy fees were $84.9 million for the period of January 1, 2015 to January 31, 2015. This amount is comprised of traditional life net premiums of $41.8 million and universal life policy fees of $43.1 million.

Net investment income

Net investment income was $47.6 million for the period of January 1, 2015 to January 31, 2015. Included in this amount is traditional life net investment income of $6.3 million and universal life investment income of $40.1 million.

Other income

Other income was $0.4 million for the period of January 1, 2015 to January 31, 2015 primarily due to fees on variable universal life funds.

Benefits and settlement expenses

Benefit and settlement expenses were $123.5 million for the period of January 1, 2015 to January 31, 2015. This amount includes traditional life benefit and settlement expenses of $44.7 million, including an elevated level of claims and universal life benefit and settlement expenses of $77.7 million, partly comprised of $25.7 million of interest on funds for universal life policies.

Amortization of DAC and VOBA

DAC and VOBA amortization was $4.6 million for the period of January 1, 2015 to January 31, 2015.

Other operating expenses

Other operating expenses were $7.1 million for the period of January 1, 2015 to January 31, 2015. Other operating expenses for the insurance companies reflect commissions of $16.6 million, general and administrative expenses of $17.5 million, and taxes of $2.5 million, partly offset by ceding allowances of $12.4 million and capitalization of $17.1 million. 

Sales

Sales for the segment were $11.5 million for the period of January 1, 2015 to January 31, 2015, almost entirely comprised of universal life sales.

Reinsurance

Currently, the Life Marketing segment reinsures significant amounts of its life insurance in-force. Pursuant to the underlying reinsurance contracts, reinsurers pay allowances to the segment as a percentage of both first year and renewal premiums. Reinsurance allowances represent the amount the reinsurer is willing to pay for reimbursement of acquisition costs incurred by the direct writer of the business. A portion of reinsurance allowances received is deferred as part of DAC and a portion is recognized immediately as a reduction of other operating expenses. As the non-deferred portion of allowances reduces operating expenses in the period received, these amounts represent a net increase to operating income during that period.

Reinsurance allowances do not affect the methodology used to amortize DAC or the period over which such DAC is amortized. However, they do affect the amounts recognized as DAC amortization. DAC on universal life-type, limited-payment long duration, and investment contracts business is amortized based on the estimated gross profits of the policies in-force. Reinsurance allowances are considered in the determination of estimated gross profits, and therefore, impact DAC amortization on these lines of business. Deferred reinsurance allowances on level term business are recorded as ceded DAC, which is amortized over estimated ceded premiums of the policies in-force. Thus, deferred reinsurance allowances may impact DAC amortization. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (Successor Company).

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Impact of reinsurance

Reinsurance impacted the Life Marketing segment line items as shown in the following table:

Life Marketing Segment

Line Item Impact of Reinsurance

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(204,157	)	$	(211,296	)	$	(387,881	)	$	(279,679	)	$	(51,142	)
BENEFITS AND EXPENSES
Benefits and settlement expenses	(172,367		)	(188,990		)	(375,732		)	(250,725		)	(58,501		)
Amortization of DAC/VOBA	(1,735		)	(1,389		)	(3,380		)	(2,183		)	(3,766		)
Other operating expenses (1)	(39,425		)	(38,066		)	(76,111		)	(66,104		)	(11,728		)
Total benefits and expenses	(213,527		)	(228,445		)	(455,223		)	(319,012		)	(73,995		)
NET IMPACT OF REINSURANCE	$	9,370		$	17,149		$	67,342		$	39,333		$	22,853
Allowances received	$	(41,286	)	$	(40,214	)	$	(80,344	)	$	(69,576	)	$	(12,413	)
Less: Amount deferred	1,861			2,148			4,233			3,472			685
Allowances recognized (ceded other operating expenses)(1)	$	(39,425	)	$	(38,066	)	$	(76,111	)	$	(66,104	)	$	(11,728	)

(1) Other operating expenses ceded per the income statement are equal to reinsurance allowances recognized after capitalization.

The table above does not reflect the impact of reinsurance on our net investment income. By ceding business to the assuming companies, we forgo investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed, which will increase the assuming companies’ profitability on the business that we cede. The net investment income impact to us and the assuming companies has not been quantified. The impact of including foregone investment income would be to substantially reduce the favorable net impact of reinsurance reflected above. We estimate that the impact of foregone investment income would be to reduce the net impact of reinsurance presented in the table above by 100% to 340%. The Life Marketing segment’s reinsurance programs do not materially impact the “other income” line of our income statement.

As shown above, reinsurance had a favorable impact on the Life Marketing segment’s operating income for the periods presented above. The impact of reinsurance is largely due to our quota share coinsurance program in place prior to mid-2005. Under that program, generally 90% of the segment’s traditional new business was ceded to reinsurers. Since mid-2005, a much smaller percentage of overall term business has been ceded due to a change in reinsurance strategy on traditional business. In addition, since 2012, a much smaller percentage of the segment’s new universal life business has been ceded. As a result of that change, the relative impact of reinsurance on the Life Marketing segment’s overall results is expected to decrease over time. While the significance of reinsurance is expected to decline over time, the overall impact of reinsurance for a given period may fluctuate due to variations in mortality and unlocking of balances.

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

The lower ceded premium and policy fees for 2016 as compared to 2015 was caused primarily by lower ceded traditional life premiums of $10.0 million and higher universal life policy fees of $3.3 million. Ceded traditional premium for the three months ended June 30, 2016, decreased from the three months ended June 30, 2015, primarily due to fluctuations in the number of policies entering their post level period. Ceded universal life policy fees for three months ended June 30, 2016, increased from the three months ended June 30, 2015, with the increase in the direct universal life policy fees.

Ceded benefits and settlement expenses were lower for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, due to a smaller increase in ceded reserves, partly offset by higher universal life ceded claims. Traditional ceded benefits decreased $9.7 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to a smaller increase in post level ceded reserves and lower ceded death benefits. Universal life ceded benefits decreased $6.4 million for the three months ended June 30, 2016, as compared to the three months ended

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June 30, 2015, due to a smaller increase in ceded reserves, partly offset by an increase in ceded claims. Ceded universal life claims were $9.1 million higher for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015.

Ceded amortization of DAC and VOBA increased for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to the differences in unlocking between the two periods.

Ceded other operating expenses reflect the impact of reinsurance allowances on net income.

For The Six Months Ended June 30, 2016 (Successor Company)

The ceded premiums were primarily comprised of ceded traditional life premiums of $181.8 million and universal life premiums of $204.8 million.

Ceded benefits and settlement expenses were $375.7 million for the six months ended June 30, 2016. This amount is driven by ceded claims. Traditional life ceded benefits activity of $186.7 million was due to ceded death benefits, slightly offset by ceded reserves. Universal life ceded benefits of $189.8 million were largely comprised of $186.1 million in ceded universal life claims during the period.

Ceded amortization of DAC and VOBA activity was $3.4 million for the six months ended June 30, 2016.

Ceded other operating expenses reflect the impact of reinsurance allowances on net income.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

The ceded premiums were primarily comprised of ceded traditional life premiums of $113.7 million and universal life premiums of $165.5 million.

Ceded benefits and settlement expenses were $250.7 million for the period of February 1, 2015 to June 30, 2015. This amount is driven by ceded claims, partly offset by change in ceded reserves. Traditional life ceded benefits activity of $105.5 million was due to ceded death benefits, partly offset by ceded reserves. Universal life ceded benefits of $145.6 million were largely comprised of $124.0 million in ceded universal life claims during the period.

Ceded amortization of DAC and VOBA activity was $2.2 million for the period of February 1, 2015 to June 30, 2015.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

The ceded premiums were primarily comprised of ceded traditional life premiums of $22.6 million and universal life premiums of $27.2 million. Traditional life ceded premiums for the period January 1, 2015 to January 31, 2015 were impacted by runoff and a number of policies with post level activity.

Ceded benefits and settlement expenses were $58.5 million for the period of January 1, 2015 to January 31, 2015.  This amount is driven by ceded claims, partly offset by change in ceded reserves. Traditional life ceded benefits activity of $29.3 million was due to ceded death benefits, partly offset by ceded reserves. Universal life ceded benefits of $30.0 million were mainly comprised of $30.4 million in ceded universal life claims during the period.

Ceded amortization of DAC and VOBA activity was $3.8 million for the period of January 1, 2015 to January 31, 2015.

Ceded other operating expenses reflect the impact of reinsurance allowances on net income.

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Acquisitions

Segment Results of Operations

Segment results were as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	296,109		$	280,570		$	596,617		$	472,472		$	88,855
Reinsurance ceded	(91,405		)	(96,158		)	(177,827		)	(144,718		)	(26,512		)
Net premiums and policy fees	204,704			184,412			418,790			327,754			62,343
Net investment income	189,014			175,815			376,669			289,507			71,088
Other income	2,721			3,173			5,452			5,364			1,240
Total operating revenues	396,439			363,400			800,911			622,625			134,671
Realized gains (losses) - investments	81,478			(107,997		)	159,603			(140,624		)	73,601
Realized gains (losses) - derivatives	(24,069		)	108,582			(81,859		)	140,773			(68,511		)
Total revenues	453,848			363,985			878,655			622,774			139,761
BENEFITS AND EXPENSES
Benefits and settlement expenses	312,194			300,336			619,728			506,183			100,693
Amortization of value of business acquired	10,185			968			9,092			838			4,803
Other operating expenses	28,775			24,220			58,153			41,658			9,041
Operating benefits and expenses	351,154			325,524			686,973			548,679			114,537
Amortization related to benefits and settlement expenses	2,957			4,859			5,688			7,268			1,233
Amortization of VOBA related to realized gains (losses) - investments	2			(18		)	4			(28		)	230
Total benefits and expenses	354,113			330,365			692,665			555,919			116,000
INCOME BEFORE INCOME TAX	99,735			33,620			185,990			66,855			23,761
Less: realized gains (losses)	57,409			585			77,744			149			5,090
Less: amortization related to benefits and settlement expenses	(2,957		)	(4,859		)	(5,688		)	(7,268		)	(1,233		)
Less: related amortization of VOBA	(2		)	18			(4		)	28			(230		)
OPERATING INCOME	$	45,285		$	37,876		$	113,938		$	73,946		$	20,134

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The following table summarizes key data for the Acquisitions segment:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Average Life Insurance In-Force(1)
Traditional	$	245,874,701		$	176,915,702		$	227,143,714		$	178,507,100		$	182,177,575
Universal life	29,853,251			32,315,549			30,094,770			32,693,540			33,413,557
	$	275,727,952		$	209,231,251		$	257,238,484		$	211,200,640		$	215,591,132
Average Account Values
Universal life	$	4,272,980		$	4,457,553		$	4,293,031		$	4,473,467		$	4,486,843
Fixed annuity(2)	3,567,836			3,653,446			3,575,371			3,674,635			3,712,578
Variable annuity	1,173,275			1,383,149			1,190,594			1,396,888			1,396,587
	$	9,014,091		$	9,494,148		$	9,058,996		$	9,544,990		$	9,596,008
Interest Spread - UL & Fixed Annuities
Net investment income yield	4.44		%	4.30		%	4.44		%	4.32		%	5.73		%
Interest credited to policyholders	4.00		%	4.09		%	4.02		%	4.04		%	4.05		%
Interest spread(3)	0.44		%	0.21		%	0.42		%	0.28		%	1.68		%

(1) Amounts are not adjusted for reinsurance ceded.

(2) Includes general account balances held within variable annuity products and is net of coinsurance ceded.

(3) Earned rates exclude portfolios supporting modified coinsurance and crediting rates exclude 100% cessions.

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Segment operating income

Operating income was $45.3 million for the three months ended June 30, 2016, an increase of $7.4 million as compared to the three months ended June 30, 2015, primarily due to the addition of the GLAIC reinsurance transaction completed on January 15, 2016. The GLAIC transaction added $9.0 million to segment operating income for the three months ended June 30, 2016. This was partly offset by the expected runoff of the in-force blocks of business.

Operating revenues

Net premiums and policy fees increased $20.3 million, or 11.0%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to the premiums associated with the GLAIC reinsurance transaction more than offsetting expected runoff related to other blocks of business. Net investment income increased $13.2 million, or 7.5%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, due to the $14.2 million impact of the GLAIC reinsurance transaction, partly offset by expected runoff of the in-force business.

Total benefits and expenses

Total benefits and expenses increased $23.7 million, or 7.2%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. The increase was primarily due to the GLAIC reinsurance transaction, which increased operating benefits and expenses $36.4 million. This was partly offset by expected runoff of the in-force business.

For The Six Months Ended June 30, 2016 (Successor Company)

Segment operating income

Operating income was $113.9 million. This included expected runoff of the in-force blocks of business and $17.8 million in operating income associated with the GLAIC reinsurance transaction that was completed on January 15, 2016.

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Operating revenues

Operating revenues for the segment were $800.9 million and included net premiums and policy fees of $418.8 million, net investment income of $376.7 million, and other income of $5.5 million. The segment experienced expected runoff in the current period.

Operating revenues from the GLAIC transaction were $94.8 million and included net premiums and policy fees of $66.1 million and net investment income of $28.7 million.

Total benefits and expenses

Total benefits and expenses were $692.7 million, primarily due to operating benefits and expenses of $687.0 million. Operating benefits and expenses included benefits and settlement expenses of $619.7 million, amortization of VOBA of $9.1 million, and other operating expenses of $58.2 million. The net impact of amortization related to benefits and settlement expenses and amortization of VOBA related to realized gains (losses) on investments contributed $5.7 million to total benefits and expenses.

Total benefits and expenses from the GLAIC transaction were $77.1 million. Operating benefits and expenses included benefits and settlement expenses of $61.7 million, amortization of VOBA of $6.5 million, and other operating expenses of $8.9 million from this transaction.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Segment operating income

Operating income was $73.9 million. This included expected runoff of the in force blocks of business.

Operating revenues

Operating revenues for the segment were $622.6 million and included net premiums and policy fees of $327.8 million, net investment income of $289.5 million, and other income of $5.4 million. The segment experienced expected runoff in the current period.

Total benefits and expenses

Total benefits and expenses were $555.9 million, primarily due to operating benefits and expenses of $548.7 million. Operating benefits and expenses included benefits and settlement expenses of $506.2 million, amortization of VOBA of $0.8 million, and other operating expenses of $41.7 million. The net impact of amortization related to benefits and settlement expenses and amortization of VOBA related to realized gains (losses) on investments contributed $7.2 million to total benefits and expenses.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Segment operating income

Operating income was $20.1 million. This included expected runoff of the in force blocks of business.

Operating revenues

Operating revenues for the segment were $134.7 million and included net premiums and policy fees of $62.3 million, net investment income of $71.1 million, and other income of $1.2 million. The segment experienced expected runoff in the current period.

Total benefits and expenses

Total benefits and expenses were $116.0 million, primarily due to operating benefits and expenses of $114.5 million. Operating benefits and expenses included benefits and settlement expenses of $100.7 million, amortization of VOBA of $4.8 million, and other operating expenses of $9.0 million. The net impact of amortization related to benefits and settlement expenses and amortization of VOBA related to realized gains (losses) on investments contributed $1.5 million to total benefits and expenses.

Reinsurance

The Acquisitions segment currently reinsures portions of both its life and annuity in-force. The cost of reinsurance to the segment is reflected in the chart shown below. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (Successor Company).

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Impact of reinsurance

Reinsurance impacted the Acquisitions segment line items as shown in the following table:

Acquisitions Segment

Line Item Impact of Reinsurance

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(91,405	)	$	(96,158	)	$	(177,827	)	$	(144,718	)	$	(26,512	)
BENEFITS AND EXPENSES
Benefits and settlement expenses	(69,700		)	(87,775		)	(134,223		)	(122,064		)	(25,832		)
Amortization of value of business acquired	(77		)	(76		)	(195		)	(85		)	(233		)
Other operating expenses	(10,902		)	(11,312		)	(21,989		)	(19,597		)	(3,647		)
Total benefits and expenses	(80,679		)	(99,163		)	(156,407		)	(141,746		)	(29,712		)
NET IMPACT OF REINSURANCE(1)	$	(10,726	)	$	3,005		$	(21,420	)	$	(2,972	)	$	3,200

(1) Assumes no investment income on reinsurance. Foregone investment income would substantially reduce the favorable impact of reinsurance.

The segment’s reinsurance programs do not materially impact the other income line of the income statement. In addition, net investment income generally has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, we forgo investment income on the reserves ceded to the assuming companies. Conversely, the assuming companies will receive investment income on the reserves assumed which will increase the assuming companies’ profitability on business assumed from the Company. For business ceded under modified coinsurance arrangements, the amount of investment income attributable to the assuming company is included as part of the overall change in policy reserves and, as such, is reflected in benefit and settlement expenses. The net investment income impact to us and the assuming companies has not been quantified as it is not fully reflected in our consolidated financial statements.

The net impact of reinsurance is less favorable by $13.7 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to lower ceded claims. In the three months ended June 30, 2016, ceded revenues decreased by $4.8 million, while ceded benefits and expenses decreased by $18.5 million primarily due to lower claims.

The net impact of reinsurance activity for the six months ended June 30, 2016 (Successor Company) was primarily due to ceded premiums in relation to ceded benefits and settlement expenses. Ceded benefits and settlement expenses were primarily driven by ceded claims.

The net impact of reinsurance activity for the period of February 1, 2015 to June 30, 2015 (Successor Company) was primarily due to ceded premiums in relation to ceded benefits and settlement expenses. Ceded benefits and settlement expenses were primarily driven by ceded claims.

The net impact of reinsurance activity for the period of January 1, 2015 to January 31, 2015 (Predecessor Company) was primarily due to ceded premiums in relation to ceded benefits and settlement expenses. Ceded benefits and settlement expenses were primarily driven by ceded claims.

80

Annuities

Segment Results of Operations

Segment results were as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	36,455		$	38,272		$	72,011		$	63,219		$	12,473
Reinsurance ceded	(19,964		)	(20,167		)	(40,094		)	(34,584		)	(6,118		)
Net premiums and policy fees	16,491			18,105			31,917			28,635			6,355
Net investment income	79,169			82,853			157,921			133,785			37,189
Realized gains (losses) - derivatives	(9,209		)	(7,667		)	(18,121		)	(12,559		)	(2,402		)
Other income	39,516			40,298			77,165			66,972			12,690
Total operating revenues	125,967			133,589			248,882			216,833			53,832
Realized gains (losses) - investments	871			(1,427		)	298			(2,032		)	(145		)
Realized gains (losses) - derivatives, net of economic cost	61,759			(88,694		)	157,933			(121,989		)	77,231
Total revenues	188,597			43,468			407,113			92,812			130,918
BENEFITS AND EXPENSES
Benefits and settlement expenses	47,570			62,931			97,536			95,379			26,919
Amortization of deferred policy acquisition costs and value of business acquired	(3,212		)	(3,320		)	(8,298		)	(5,724		)	6,217
Other operating expenses	34,129			33,465			66,888			55,292			9,333
Operating benefits and expenses	78,487			93,076			156,126			144,947			42,469
Amortization related to benefits and settlement expenses	3,228			(737		)	2,970			(1,349		)	3,128
Amortization of DAC/VOBA related to realized gains (losses) - investments	(22,875		)	2,411			(23,975		)	8,061			(13,216		)
Total benefits and expenses	58,840			94,750			135,121			151,659			32,381
INCOME (LOSS) BEFORE INCOME TAX	129,757			(51,282		)	271,992			(58,847		)	98,537
Less: realized gains (losses) - investments	871			(1,427		)	298			(2,032		)	(145		)
Less: realized gains (losses) - derivatives, net of economic cost	61,759			(88,694		)	157,933			(121,989		)	77,231
Less: amortization related to benefits and settlement expenses	(3,228		)	737			(2,970		)	1,349			(3,128		)
Less: related amortization of DAC/VOBA	22,875			(2,411		)	23,975			(8,061		)	13,216
OPERATING INCOME	$	47,480		$	40,513		$	92,756		$	71,886		$	11,363

81

The following tables summarize key data for the Annuities segment:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Sales
Fixed annuity	$	171,231		$	111,131		$	380,536		$	153,607		$	28,335
Variable annuity	151,583			361,559			325,097			545,706			59,115
	$	322,814		$	472,690		$	705,633		$	699,313		$	87,450
Average Account Values
Fixed annuity(1)	$	8,210,847		$	8,285,451		$	8,245,283		$	8,255,571		$	8,171,438
Variable annuity	12,282,904			12,711,950			12,305,789			12,658,770			12,365,217
	$	20,493,751		$	20,997,401		$	20,551,072		$	20,914,341		$	20,536,655
Interest Spread - Fixed Annuities(2)
Net investment income yield	3.65		%	3.78		%	3.64		%	3.67		%	5.22		%
Interest credited to policyholders	2.65			2.86			2.68			2.88			3.17
Interest spread	1.00		%	0.92		%	0.96		%	0.79		%	2.05		%

(1) Includes general account balances held within VA products.

(2) Interest spread on average general account values.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures - VA	$	31,266		$	(14,183	)	$	69,067		$	(14,231	)	$	1,413
Equity futures - VA	(21,328		)	(5,267		)	(24,556		)	(37,736		)	9,221
Currency futures - VA	11,112			(8,709		)	4,954			(2,572		)	7,778
Equity options - VA	(3,232		)	(3,550		)	13,072			(25,324		)	3,047
Interest rate swaptions - VA	(749		)	2,547			(2,983		)	(8,781		)	9,268
Interest rate swaps - VA	81,554			(121,167		)	207,147			(175,958		)	122,710
Embedded derivative - GMWB(1)	(66,019		)	45,969			(132,695		)	81,839			(68,503		)
Funds withheld derivative	17,850			6,335			10,052			44,571			(9,073		)
Total derivatives related to VA contracts	50,454			(98,025		)	144,058			(138,192		)	75,861
Derivatives related to FIA contracts:
Embedded derivative - FIA	710			290			(1,452		)	(2,293		)	1,769
Equity futures - FIA	651			123			2,033			307			(184		)
Volatility futures - FIA	—			25			—			29			—
Equity options - FIA	735			1,226			(4,827		)	5,601			(2,617		)
Total derivatives related to FIA contracts	2,096			1,664			(4,246		)	3,644			(1,032		)
VA GMWB economic cost(2)	9,209			7,667			18,121			12,559			2,402
Realized gains (losses) - derivatives, net of economic cost	$	61,759		$	(88,694	)	$	157,933		$	(121,989	)	$	77,231

82

(1)   Includes impact of nonperformance risk of $0.1 million, $10.9 million, $2.3 million, $(1.4) million, and $3.1 million for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), for the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively.

(2)   Economic cost is the long-term expected average cost of providing the product benefit over the life of the policy based on product pricing assumptions. These include assumptions about the economic/market environment, and elective and non-elective policy owner behavior (e.g. lapses, withdrawal timing, mortality, etc.).

	Successor Company
	As of June 30, 2016		As of December 31, 2015
	(Dollars In Thousands)
GMDB - Net amount at risk(1)	$	158,462	$	166,765
GMDB Reserves	26,118		26,646
GMWB and GMAB Reserves	151,218		18,522
Account value subject to GMWB rider	9,306,967		9,306,644
GMWB Benefit Base	10,468,569		10,304,939
GMAB Benefit Base	4,124		4,323
S&P 500® Index	2,099		2,044

(1) Guaranteed benefits in excess of contract holder account balance.

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Segment operating income

Operating income was $47.5 million for the three months ended June 30, 2016, as compared to $40.5 million for the three months ended June 30, 2015, an increase of $7.0 million, or 17.2%. This variance was primarily the result of lower credited interest and favorable SPIA mortality offset by lower investment income and lower fee and other income from the VA line of business.

Operating revenues

Segment operating revenues decreased $7.6 million, or 5.7%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to decreases in policy fees and other income from the VA line of business and decreases in investment income from the market value adjusted (“MVA”) and single premium deferred annuity (“SPDA”) lines of business. Those decreases were partially offset by increased investment income in the fixed indexed annuity (“FIA”) line of business. Average fixed account balances decreased 0.9% and average variable account balances decreased 4.7% for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015.

Benefits and settlement expenses

Benefits and settlement expenses decreased $15.4 million, or 24.4%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. This decrease was primarily the result of lower credited interest and a $9.8 million favorable change in SPIA mortality results.

Amortization of DAC and VOBA

DAC and VOBA amortization unfavorably changed by $0.1 million, or 3.3%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015.

Other operating expenses

Other operating expenses increased $0.7 million, or 2.0%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Increases in non-deferred acquisition, maintenance, and overhead expenses were offset by lower non-deferred commission expense.

Sales

Total sales decreased $149.9 million, or 31.7%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Sales of variable annuities decreased $210.0 million, or 58.1% for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Sales of fixed annuities increased by $60.1 million, or 54.1%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, driven by an increase in FIA sales.

83

For The Six Months Ended June 30, 2016 (Successor Company)

Segment operating income

Operating income was $92.8 million which included $42.0 million of variable annuity operating earnings, $59.5 million of fixed annuity operating earnings, and a $8.7 million loss in other annuity earnings. The fixed annuity results were positively impacted by $11.3 million of favorable SPIA mortality.

Operating revenues

Segment operating revenues were $248.9 million for the six months ended June 30, 2016. Operating revenue consisted of $157.9 million of net investment income, $31.9 million of policy fees, $77.2 million of other income, and $18.1 million of losses related to GMWB economic cost from the VA line of business.

Benefits and settlement expenses

Benefits and settlement expenses were $97.5 million for the six months ended June 30, 2016. Included in that amount was $11.3 million of favorable SPIA mortality results and $0.8 million of favorable unlocking.

Amortization of DAC and VOBA

DAC and VOBA amortization was $8.3 million favorable for the six months ended June 30, 2016 due to negative VOBA assigned to some of the products within the segment. There was $0.2 million of favorable unlocking recorded by the segment during the six months ended June 30, 2016.

Other operating expenses

Other operating expenses were $66.9 million for the six months ended June 30, 2016. Operating expenses consisted of $17.5 million in acquisition expenses, $25.9 million in maintenance and overhead expenses, and $23.5 million in commission expenses.

Sales

Total sales were $705.6 million for the six months ended June 30, 2016. Fixed annuity sales were $380.5 million and variable annuity sales were $325.1 million.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Segment operating income

Segment operating income was $71.9 million which included $44.4 million of fixed annuity operating earnings and $34.2 million of variable annuity operating earnings. The fixed annuity results were positively impacted by $4.8 million of favorable SPIA mortality.

Operating revenues

Segment operating revenues were $216.8 million for the period of February 1, 2015 to June 30, 2015. Operating revenue consisted of $133.8 million of net investment income, $63.2 million of policy fees, $34.6 million of ceded premiums, $67.0 million in other income, and $12.6 million related to GMWB economic cost from the VA line of business.

Benefits and settlement expenses

Benefits and settlement expenses were $95.4 million for the period of February 1, 2015 to June 30, 2015. Included in that amount was $4.8 million of favorable SPIA mortality results, which was partially offset by an increase in guaranteed benefit reserves of $1.6 million from the VA line of business.

Amortization of DAC and VOBA

DAC and VOBA amortization was $5.7 million favorable for the period of February 1, 2015 to June 30, 2015 due to the allocation of negative VOBA to some of the products within the segment. There was $0.3 million of favorable unlocking recorded by the segment during the three months ended June 30, 2015.

Other operating expenses

Other operating expenses were $55.3 million for the period of February 1, 2015 to June 30, 2015. Operating expenses consisted of $14.1 million in acquisition expenses, $19.8 million in maintenance and overhead expenses, and $21.4 million in commission expenses.

84

Sales

Total sales were $699.3 million for the period of February 1, 2015 to June 30, 2015. Fixed annuity sales were $153.6 million and variable annuity sales were $545.7 million.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Segment operating income

Segment operating income was $11.4 million for the period of January 1, 2015 to January 31, 2015. Included in that amount was $2.8 million of favorable SPIA mortality results and $2.6 million of unfavorable unlocking.

Operating revenues

Segment operating revenues were $53.8 million for the period of January 1, 2015 to January 31, 2015. Operating revenue consisted of $37.2 million of net investment income, $12.5 million of gross policy fees, $6.1 million of ceded premiums, $12.7 million in other income and $2.4 million of losses related to GMWB economic cost from the VA line of business.

Benefits and settlement expenses

Benefits and settlement expenses were $26.9 million for the period of January 1, 2015 to January 31, 2015. Included in that amount was $2.8 million of unfavorable SPIA mortality results and a $2.1 million increase in guaranteed benefit reserves from the VA line of business.

Amortization of DAC and VOBA

DAC and VOBA amortization was $6.2 million unfavorable for the period of January 1, 2015 to January 31, 2015.The segment recorded $2.6 million in unfavorable unlocking.

Other operating expenses

Other operating expenses were $9.3 million for the period of January 1, 2015 to January 31, 2015. Operating expenses consisted of $2.8 million in acquisition expenses, $2.8 million in maintenance and overhead expenses, and $3.7 million in commission expenses.

Sales

Total sales were $87.5 million for the period of January 1, 2015 to January 31, 2015. Fixed annuity sales were $28.3 million and variable annuity sales were $59.1 million.

Reinsurance

During the year ended December 31, 2012 (Predecessor Company), the Annuity segment began reinsuring certain risks associated with the GMWB and GMDB riders to Shades Creek Captive Insurance Company (“Shades Creek”), a direct wholly owned subsidiary of PLC. The cost of reinsurance to the segment is reflected in the chart shown below. The impact of the Shades Creek reinsurance arrangement for the three month period ending March 31, 2013 was eliminated in consolidation.  Prior to April 1, 2013, we paid as a dividend all of Shades Creek’s outstanding common stock to its parent, PLC. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (Successor Company).

85

Impact of reinsurance

Reinsurance impacted the Annuities segment line items as shown in the following table:

Annuities Segment

Line Item Impact of Reinsurance

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(19,964	)	$	(20,166	)	$	(40,094	)	$	(34,584	)	$	(6,118	)
Realized gains (losses) - derivatives	11,278			11,265			22,536			18,765			3,754
Total operating revenues	(8,686		)	(8,901		)	(17,558		)	(15,819		)	(2,364		)
Realized gains (losses) - derivatives, net of economic costs	101,955			(91,618		)	192,073			(138,272		)	125,688
Total revenues	93,269			(100,519		)	174,515			(154,091		)	123,324
BENEFITS AND EXPENSES
Benefits and settlement expenses	(420		)	(504		)	(1,404		)	(975		)	(567		)
Amortization of DAC/VOBA	—			—			—			—			304
Other operating expenses	(487		)	(511		)	(981		)	(507		)	(523		)
Operating benefits and expenses	(907		)	(1,015		)	(2,385		)	(1,482		)	(786		)
Amortization of deferred policy acquisition costs related to realized gain (loss) investments	—			—			—			—			402
Total benefit and expenses	(907		)	(1,015		)	(2,385		)	(1,482		)	(384		)
NET IMPACT OF REINSURANCE	$	94,176		$	(99,504	)	$	176,900		$	(152,609	)	$	123,708

The table above does not reflect the impact of reinsurance on our net investment income. The net investment income impact to us and the assuming company has been quantified and is immaterial. The Annuities segment’s reinsurance programs do not materially impact the “other income” line of our income statement.

The net impact of reinsurance is favorable by $94.2 million for the three months ended June 30, 2016 (Successor Company), as compared to the unfavorable net impact of $99.5 million for the three months ended June 30, 2015 (Successor Company).

The net impact of reinsurance is favorable by $176.9 million for the six months ended June 30, 2016 (Successor Company).

86

Stable Value Products

Segment Results of Operations

Segment results were as follows:

	Successor Company								Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)								(Dollars In Thousands)
REVENUES
Net investment income	$	25,908	$	15,371	$	48,975	$	25,744	$	6,888
Other income	—		133		—		133		—
Total operating revenues	25,908		15,504		48,975		25,877		6,888
Realized gains (losses)	329		1,152		7,164		1,121		1,293
Total revenues	26,237		16,656		56,139		26,998		8,181
BENEFITS AND EXPENSES
Benefits and settlement expenses	9,752		5,687		17,720		9,606		2,255
Amortization of deferred policy acquisition costs	242		—		354		—		25
Other operating expenses	736		468		1,275		807		79
Total benefits and expenses	10,730		6,155		19,349		10,413		2,359
INCOME BEFORE INCOME TAX	15,507		10,501		36,790		16,585		5,822
Less: realized gains (losses)	329		1,152		7,164		1,121		1,293
OPERATING INCOME	$	15,178	$	9,349	$	29,626	$	15,464	$	4,529

87

The following table summarizes key data for the Stable Value Products segment: 

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Sales
GIC	$	7,000		$	55,200		$	57,000		$	105,900		$	—
GFA - Direct Institutional	900,000			50,000			900,000			150,000			—
	$	907,000		$	105,200		$	957,000		$	255,900		$	—
Average Account Values	$	2,513,097		$	1,926,711		$	2,320,707		$	1,901,499		$	1,932,722
Ending Account Values	$	2,838,674		$	1,861,280		$	2,838,674		$	1,861,280		$	1,911,751
Operating Spread
Net investment income yield	4.15		%	3.23		%	4.26		%	3.30		%	4.28		%
Other income yield	—			0.02			—			0.01			—
Interest credited	1.56			1.19			1.54			1.23			1.40
Operating expenses	0.16			0.10			0.14			0.11			0.07
Operating spread	2.43		%	1.96		%	2.58		%	1.97		%	2.81		%
Adjusted operating spread(1)	1.79		%	1.83		%	1.77		%	1.71		%	2.76		%

(1) Excludes participating mortgage loan income and other income.

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Segment operating income

Operating income was $15.2 million and increased $5.8 million, or 62.3%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. The increase in operating earnings resulted from an increase in participating mortgage income, higher operating spreads, and increased average account values. Participating mortgage income for the three months ended June 30, 2016 was $3.9 million as compared to $0.5 million for the three months ended June 30, 2015. The adjusted operating spread, which excludes participating income, decreased by 4 basis points for the three months ended June 30, 2016 over the prior year, due primarily to an increase in credited interest.

For The Six Months Ended June 30, 2016 (Successor Company)

Segment operating income

Operating income of $29.6 million was primarily due to activity in average account values, participating mortgage income, and operating spread. Participating mortgage income was $9.2 million and the adjusted operating spread, which excludes participating income, was 177 basis point.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Segment operating income

Operating income of $15.5 million was primarily due to activity in average account values, operating spread, and participating mortgage income. Participating mortgage income was $1.7 million and the adjusted operating spread, which excludes participating income, was 171 basis points.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Segment operating income

Operating income of $4.5 million was primarily due to activity in average account values, operating spread, and participating mortgage income. Participating mortgage income was $0.1 million and the adjusted operating spread, which excludes participating income, was 276 basis points.

88

Asset Protection

Segment Results of Operations

Segment results were as follows: 

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	68,264		$	65,729		$	136,146		$	108,924		$	21,843
Reinsurance ceded	(24,986		)	(23,558		)	(49,525		)	(39,011		)	(7,860		)
Net premiums and policy fees	43,278			42,171			86,621			69,913			13,983
Net investment income	4,353			3,741			8,513			6,186			1,540
Other income	28,788			31,713			54,964			50,822			9,043
Total operating revenues	76,419			77,625			150,098			126,921			24,566
BENEFITS AND EXPENSES
Benefits and settlement expenses	25,727			24,209			51,111			39,596			7,447
Amortization of deferred policy acquisition costs and value of business acquired	5,414			6,853			11,158			11,595			1,858
Other operating expenses	41,137			41,683			79,432			67,207			13,354
Total benefits and expenses	72,278			72,745			141,701			118,398			22,659
INCOME BEFORE INCOME TAX	4,141			4,880			8,397			8,523			1,907
OPERATING INCOME	$	4,141		$	4,880		$	8,397		$	8,523		$	1,907

The following table summarizes key data for the Asset Protection segment:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Sales
Credit insurance	$	5,954		$	7,327		$	11,531		$	11,210		$	2,087
Service contracts	88,909			101,374			166,184			158,421			26,551
GAP	26,534			23,716			52,095			38,948			6,318
	$	121,397		$	132,417		$	229,810		$	208,579		$	34,956
Loss Ratios(1)
Credit insurance	33.0		%	30.8		%	32.7		%	34.6		%	27.9		%
Service contracts	46.5			54.2			45.9			53.4			54.4
GAP	103.9			83.2			105.4			80.6			61.5

(1) Incurred claims as a percentage of earned premiums

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For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Segment operating income

Operating income was $4.1 million, representing a decrease of $0.7 million, or 15.1%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Earnings from the GAP product line decreased $0.7 million primarily resulting from higher losses. Credit insurance earnings decreased $0.3 million primarily due to lower underwriting income. Service contract earnings increased $0.3 million primarily due to favorable underwriting income.

Net premiums and policy fees

Net premiums and policy fees increased $1.1 million, or 2.6%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Service contract premiums decreased $1.5 million primarily due to higher ceded premiums. Credit insurance premiums decreased $0.3 million as a result of lower sales. GAP premiums increased $3.0 million primarily due to higher volume.

Other income

Other income decreased $2.9 million, or 9.2%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015 primarily due to lower sales volume in the service contract line.

Benefits and settlement expenses

Benefits and settlement expenses increased $1.5 million, or 6.3%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. GAP claims increased $4.6 million due to a higher loss ratio. The increase was partially offset by a decrease in service contract claims of $3.1 million due primarily to lower loss ratios and lower volume. Credit insurance claims remained consistent with the prior year.

Amortization of DAC and VOBA and Other operating expenses

Amortization of DAC and VOBA was $1.4 million, or 21.0%, lower for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Amortization of VOBA decreased $1.1 million in the GAP product line due to runoff of in-force VOBA. Amortization of DAC decreased $0.5 million in the credit line due to lower volume. Other operating expenses were $0.5 million lower than the prior year due to lower sales volume in the service contract line.

Sales

Total segment sales decreased $11.0 million, or 8.3%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. Service contract sales decreased $12.4 million. Credit insurance sales decreased $1.4 million due to decreasing demand for the product. The decreases were partially offset by an increase in GAP sales of $2.8 million.

For The Six Months Ended June 30, 2016 (Successor Company)

Segment operating income

Operating income was $8.4 million which consisted of service contract earnings of $5.9 million, GAP product earnings of $1.6 million, and credit insurance earnings of $0.9 million.

Net premiums and policy fees

Net premiums and policy fees were $86.6 million which consisted of service contract premiums of $59.5 million, GAP premiums of $20.6 million, and credit insurance premiums of $6.5 million.

Other income

Other income activity consisted of $45.1 million from the service contract line and $9.9 million from the GAP product line.

Benefits and settlement expenses

Benefits and settlement expenses activity was $27.3 million in service contract claims, $21.7 million in GAP claims and $2.1 million in credit insurance claims.

Amortization of DAC and VOBA and Other operating expenses

Amortization of DAC and VOBA consisted of $6.5 million in the credit insurance line, $3.6 million in the GAP line, and $1.0 million in the service contract line, primarily resulting from amortization of VOBA activity. Other operating expenses were $79.4 million including activity in all product lines.

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Sales

Total segment sales consisted of $166.2 million in the service contract line, $52.1 million in the GAP product line, and credit insurance sales of $11.5 million.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Segment operating income

Operating income was $8.5 million which consisted of service contract earnings of $4.8 million, GAP product earnings of $2.6 million, and credit insurance earnings of $1.1 million.

Net premiums and policy fees

Net premiums and policy fees were $69.9 million which consisted of service contract premiums of $51.6 million, GAP premiums of $12.4 million, and credit insurance premiums of $5.9 million.

Other income

Other income activity consisted of $42.7 million from the service contract line and $8.1 million from the GAP product line.

Benefits and settlement expenses

Benefits and settlement expenses activity was $27.6 million in service contract claims, $10.0 million in GAP claims and $2.0 million in credit insurance claims.

Amortization of DAC and VOBA and Other operating expenses

Amortization of DAC and VOBA consisted of $6.1 million in the credit insurance line, $4.8 million in the GAP line, and $0.6 million in the service contract line primarily resulting from amortization of VOBA activity. Other operating expenses were $67.2 million including activity in all product lines.

Sales

Total segment sales consisted of $158.4 million in the service contract line, $38.9 million in the GAP product line, and credit insurance sales of $11.2 million

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Segment operating income

Operating income was $1.9 million which consisted of $0.8 million in service contract earnings, $0.9 million in GAP product earnings, and credit insurance earnings of $0.2 million.

Net premiums and policy fees

Net premiums and policy fees consisted of service contract premiums of $10.4 million, GAP premiums of $2.4 million, and $1.2 million of credit insurance premiums.

Other income

Other income consisted of $7.7 million from the service contract line and $1.4 million from the GAP product line.

Benefits and settlement expenses

Benefits and settlement expenses was primarily due to service contract claims of $5.6 million, GAP claims of $1.5 million, and credit insurance claims of $0.3 million.

Amortization of DAC and VOBA and Other operating expenses

Amortization of DAC consisted of $1.1 million in the credit insurance line, $0.5 million in the service contract line, and $0.2 million in the GAP line. Other operating expenses were $13.4 million including activity in all product lines.

Sales

Total segment sales consisted of $26.6 million in the service contract line, $6.3 million in the GAP product line and credit insurance sales of $2.1 million.

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Reinsurance

The majority of the Asset Protection segment’s reinsurance activity relates to the cession of single premium credit life and credit accident and health insurance, vehicle service contracts, and guaranteed asset protection insurance to producer affiliated reinsurance companies (“PARCs”). These arrangements are coinsurance contracts ceding the business on a first dollar quota share basis at 100% to limit our exposure and allow the PARCs to share in the underwriting income of the product. Reinsurance contracts do not relieve us from our obligations to our policyholders. A more detailed discussion of the components of reinsurance can be found in the Reinsurance section of Note 2, Summary of Significant Accounting Policies to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (Successor Company).

Reinsurance impacted the Asset Protection segment line items as shown in the following table:

Asset Protection Segment

Line Item Impact of Reinsurance

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Reinsurance ceded	$	(24,986	)	$	(23,558	)	$	(49,525	)	$	(39,011	)	$	(7,860	)
BENEFITS AND EXPENSES
Benefits and settlement expenses	(16,737		)	(15,464		)	(34,379		)	(24,952		)	(4,249		)
Amortization of deferred policy acquisition costs and value of business acquired	(208		)	38			(397		)	74			(481		)
Other operating expenses	(1,471		)	(2,039		)	(2,980		)	(3,441		)	(653		)
Total benefits and expenses	(18,416		)	(17,465		)	(37,756		)	(28,319		)	(5,383		)
NET IMPACT OF REINSURANCE(1)	$	(6,570	)	$	(6,093	)	$	(11,769	)	$	(10,692	)	$	(2,477	)

(1) Assumes no investment income on reinsurance. Foregone investment income would substantially change the impact of reinsurance.

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Reinsurance premiums ceded increased $1.4 million, or 6.1%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. The increase was primarily due to an increase in ceded service contract premiums.

Benefits and settlement expenses ceded increased $1.3 million, or 8.2%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. The increase was primarily due to higher ceded losses in the GAP product line.

Amortization of DAC and VOBA ceded increased $0.2 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, as the result of ceded activity in all product lines. Other operating expenses ceded decreased $0.6 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to ceded activity in the GAP product line.

Net investment income has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, we forgo investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed which generally will increase the assuming companies’ profitability on business we cede. The net investment income impact to us and the assuming companies has not been quantified as it is not reflected in our consolidated financial statements.

For The Six Months Ended June 30, 2016 (Successor Company)

Reinsurance premiums ceded of $49.5 million consisted of ceded premiums in the service contract line of $31.7 million, ceded premiums in the GAP product line of $9.9 million, and ceded premiums in the credit insurance line of $7.9 million.

Benefits and settlement expenses ceded consisted of $26.2 million in service contract ceded claims, $6.8 million in GAP ceded claims, and $1.4 million in credit insurance ceded claims.

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Amortization of DAC and VOBA ceded of $0.4 million was mainly due to ceded activity in the service contract and GAP product lines. Other operating expenses ceded of $3.0 million was mainly due to ceded activity in the credit insurance product line.

Net investment income has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, we forgo investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed which generally will increase the assuming companies’ profitability on business we cede. The net investment income impact to us and the assuming companies has not been quantified as it is not reflected in our consolidated condensed financial statements.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Reinsurance premiums ceded of $39.0 million consisted of ceded premiums in the service contract line of $23.8 million, ceded premiums in the GAP product line of $8.0 million, and ceded premiums in the credit insurance line of $7.2 million.

Benefits and settlement expenses ceded consisted of $20.1 million in service contract ceded claims, $3.4 million in GAP ceded claims, and $1.4 million in credit insurance ceded claims.

Other operating expenses ceded of $3.4 million were mainly due to ceded activity in the credit insurance and GAP product lines.

Net investment income has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, we forgo investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed which generally will increase the assuming companies’ profitability on business we cede. The net investment income impact to us and the assuming companies has not been quantified as it is not reflected in our consolidated condensed financial statements.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Reinsurance premiums ceded of $7.9 million consisted of ceded premiums in all product lines.

Benefits and settlement expenses ceded of $4.2 million was primarily due to losses on ceded business in the service contract and GAP product lines.

Amortization of DAC ceded of $0.5 million was primarily the result of ceded activity in the GAP and credit product lines. Other operating expenses ceded of $0.7 million was mainly due to ceded activity in the credit and GAP product lines.

Net investment income has no direct impact on reinsurance cost. However, by ceding business to the assuming companies, we forgo investment income on the reserves ceded. Conversely, the assuming companies will receive investment income on the reserves assumed which generally will increase the assuming companies’ profitability on business we cede. The net investment income impact to us and the assuming companies has not been quantified as it is not reflected in our consolidated condensed financial statements.

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Corporate and Other

Segment Results of Operations

Segment results were as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
REVENUES
Gross premiums and policy fees	$	3,532		$	3,770		$	7,206		$	6,434		$	1,343
Reinsurance ceded	(82		)	(17		)	(141		)	(17		)	—
Net premiums and policy fees	3,450			3,753			7,065			6,417			1,343
Net investment income	28,999			10,041			55,332			26,877			278
Other income	144			351			435			409			1
Total operating revenues	32,593			14,145			62,832			33,703			1,622
Realized gains (losses) - investments	(2,549		)	2,583			(4,284		)	653			4,919
Realized gains (losses) - derivatives	14,874			(3,200		)	18,294			(2,560		)	16,318
Total revenues	44,918			13,528			76,842			31,796			22,859
BENEFITS AND EXPENSES
Benefits and settlement expenses	4,752			3,378			8,776			6,265			1,721
Amortization of deferred policy acquisition costs and value of business acquired	—			16			—			26			87
Other operating expenses	58,089			47,125			119,046			77,743			16,476
Total benefits and expenses	62,841			50,519			127,822			84,034			18,284
INCOME (LOSS) BEFORE INCOME TAX	(17,923		)	(36,991		)	(50,980		)	(52,238		)	4,575
Less: realized gains (losses) - investments	(2,549		)	2,583			(4,284		)	653			4,919
Less: realized gains (losses) - derivatives	14,874			(3,200		)	18,294			(2,560		)	16,318
OPERATING INCOME (LOSS)	$	(30,248	)	$	(36,374	)	$	(64,990	)	$	(50,331	)	$	(16,662	)

For The Three Months Ended June 30, 2016 as compared to The Three Months Ended June 30, 2015 (Successor Company)

Segment operating income (loss)

Corporate and Other segment operating loss was $30.2 million for the three months ended June 30, 2016, as compared to an operating loss of $36.4 million for the three months ended June 30, 2015. The decrease was primarily due to a $19.0 million increase in net investment income, partially offset by a $10.9 million increase in interest expense.

Operating revenues

Net investment income for the segment increased $19.0 million for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015. The increase in net investment income was primarily due to $23.6 million of income related to additional held to maturity securities issued by affiliates of the Company which are considered variable interest entities (“VIE’s”). These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are wholly owned subsidiaries of the Company. Interest expense related to the non-recourse funding obligations is recognized in an equal and offsetting amount to the investment income. Offsetting this increase was a $4.6 million decrease in core net investment income.

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Total benefits and expenses

Total benefits and expenses increased $12.3 million or 24.4%, for the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, primarily due to $10.0 million of increased interest expense related to the Golden Gate Captive non-recourse funding obligations.

For The Six Months Ended June 30, 2016 (Successor Company)

Segment operating income (loss)

The segment’s $65.0 million operating loss was primarily due to $119.0 million of other operating expense which is primarily interest expense and corporate overhead expenses. These expenses were partially offset by $55.3 million of investment income which represents income on assets supporting our equity capital and held-to-maturity notes.

Operating revenues

Operating revenues of $62.8 million were primarily due to $55.3 million of investment income which represents income on assets supporting our equity capital.

Total benefits and expenses

Total benefits and expenses of $127.8 million were primarily due to $119.0 million of other operating expenses which included corporate overhead expenses and $62.1 million of interest expense.

For The Period of February 1, 2015 to June 30, 2015 (Successor Company)

Segment operating income (loss)

The segment’s $50.3 million operating loss was primarily due to $77.7 million of other operating expense which is primarily interest expense and corporate overhead expenses. These expenses were partially offset by $26.9 million of investment income which represents income on assets supporting our equity capital.

Operating revenues

Operating revenues of $33.7 million were primarily due to $26.9 million of investment income which represents income on assets supporting our equity capital.

Total benefits and expenses

Total benefits and expenses of $84.0 million were primarily due to $77.7 million of other operating expenses which included corporate overhead expenses and $34.0 million of interest expense.

For The Period of January 1, 2015 to January 31, 2015 (Predecessor Company)

Segment operating income (loss)

The segment’s $16.7 million operating loss was primarily due to $18.3 million of total benefits and expenses offset by $0.3 million of net investment income and $1.3 million of premiums and policy fees.

Operating revenues

Operating revenues of $1.6 million were primarily due to $1.3 million of premium and policy fees and $0.3 million of net investment income.

Total benefits and expenses

Total benefits and expenses of $18.3 million was primarily due to $16.5 million of other operating expenses which included corporate overhead expenses and $2.8 million of charitable contributions.

95

CONSOLIDATED INVESTMENTS

As of June 30, 2016 (Successor Company), our investment portfolio was approximately $50.8 billion. The types of assets in which we may invest are influenced by various state insurance laws which prescribe qualified investment assets. Within the parameters of these laws, we invest in assets giving consideration to such factors as liquidity and capital needs, investment quality, investment return, matching of assets and liabilities, and the overall composition of the investment portfolio by asset type and credit exposure.

The following table presents the reported values of our invested assets: 

	Successor Company
	As of June 30, 2016				As of December 31, 2015
	(Dollars In Thousands)				(Dollars In Thousands)
Publicly issued bonds (amortized cost: 2016 - $30,218,531; 2015 - $29,849,592)	$	29,686,091	58.5	%	$	27,396,560	60.8	%
Privately issued bonds (amortized cost: 2016 - $11,779,007; 2015 - $9,065,023)	11,700,390		23.0		8,636,970		19.2
Preferred stock (amortized cost: 2016 - $67,941; 2015 - $68,558)	68,006		0.1		66,882		0.1
Fixed maturities	41,454,487		81.6	%	36,100,412		80.1	%
Equity securities (cost: 2016 - $681,496; 2015 - $693,147)	702,796		1.4		699,925		1.6
Mortgage loans	5,748,675		11.3		5,662,812		12.6
Investment real estate	7,028		—		11,118		—
Policy loans	1,670,218		3.3		1,699,508		3.8
Other long-term investments	933,646		1.8		594,036		1.3
Short-term investments	244,363		0.6		263,837		0.6
Total investments	$	50,761,213	100.0	%	$	45,031,648	100.0	%

Included in the preceding table are $2.8 billion and $2.7 billion of fixed maturities and $38.2 million and $61.7 million of short-term investments classified as trading securities as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), respectively. All of the fixed maturities in the trading portfolio are invested assets that are held pursuant to modified coinsurance (“Modco”) arrangements under which the economic risks and benefits of the investments are passed to third party reinsurers. Also included above are $2.8 billion and $593.3 million of securities classified as held-to-maturity as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), respectively.

Fixed Maturity Investments

As of June 30, 2016 (Successor Company), our fixed maturity investment holdings were approximately $41.5 billion. The approximate percentage distribution of our fixed maturity investments by quality rating is as follows: 

	Successor Company
	As of				As of
Rating	June 30, 2016				December 31, 2015
	(Dollars In Thousands)
AAA	$	5,336,257	12.9	%	$	5,223,656	14.5	%
AA	3,282,902		7.9		2,864,706		7.9
A	13,042,347		31.7		11,564,843		32.0
BBB	14,947,440		36.1		14,076,212		39.0
Below investment grade	2,066,261		4.9		1,777,681		4.9
Not rated(1)	2,779,280		6.5		593,314		1.7
	$	41,454,487	100.0	%	$	36,100,412	100.0	%
(1) Our "not rated" securities are $2.8 billion or 6.5% of our fixed maturity investments, of held-to-maturity securities issued by affiliates of the Company. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are wholly owned subsidiaries of the Company.

96

We use various Nationally Recognized Statistical Rating Organizations’ (“NRSRO”) ratings when classifying securities by quality ratings. When the various NRSRO ratings are not consistent for a security, we use the second-highest convention in assigning the rating. When there are no such published ratings, we assign a rating based on the statutory accounting rating system if such ratings are available.

We do not have material exposure to financial guarantee insurance companies with respect to our investment portfolio.

Changes in fair value for our available-for-sale portfolio, net of tax and the related impact on certain insurance assets and liabilities are recorded directly to shareowner’s equity. Declines in fair value that are other-than-temporary are recorded as realized losses in the consolidated condensed statements of income, net of any applicable non-credit component of the loss, which is recorded as an adjustment to other comprehensive income (loss).

The distribution of our fixed maturity investments by type is as follows: 

	Successor Company
	As of		As of
Type	June 30, 2016		December 31, 2015
	(Dollars In Thousands)
Corporate securities	$	29,675,117	$	27,119,158
Residential mortgage-backed securities	2,203,807		2,051,931
Commercial mortgage-backed securities	1,735,348		1,432,607
Other asset-backed securities	1,395,682		1,072,474
U.S. government-related securities	1,418,303		1,770,524
Other government-related securities	78,941		76,567
States, municipals, and political subdivisions	2,100,003		1,916,954
Preferred stock	68,006		66,883
Securities issued by affiliates	2,779,280		593,314
Total fixed income portfolio	$	41,454,487	$	36,100,412

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The industry segment composition of our fixed maturity securities is presented in the following table:

	Successor Company
	As of June 30, 2016		% Fair Value		As of December 31, 2015		% Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Banking	$	3,725,540	9.0	%	$	3,359,169	9.3	%
Other finance	420,416		1.0		482,147		1.3
Electric utility	4,047,367		9.8		3,707,729		10.3
Energy and natural gas	4,411,842		10.6		3,940,588		10.9
Insurance	3,145,164		7.6		2,924,523		8.1
Communications	1,420,247		3.4		1,338,544		3.7
Basic industrial	1,620,075		3.9		1,480,354		4.1
Consumer noncyclical	3,680,392		8.9		3,134,732		8.7
Consumer cyclical	1,717,327		4.1		1,712,862		4.7
Finance companies	120,672		0.3		118,214		0.3
Capital goods	1,484,139		3.5		1,418,653		3.9
Transportation	1,039,257		2.5		969,329		2.7
Other industrial	371,246		0.9		313,957		0.9
Brokerage	576,958		1.4		546,726		1.5
Technology	1,538,464		3.7		1,315,958		3.6
Real estate	173,428		0.4		189,955		0.5
Other utility	250,589		0.6		232,601		0.6
Commercial mortgage-backed securities	1,735,348		4.2		1,432,607		4.0
Other asset-backed securities	1,395,682		3.4		1,072,474		3.0
Residential mortgage-backed non-agency securities	1,264,581		3.1		1,102,310		3.1
Residential mortgage-backed agency securities	939,226		2.3		949,621		2.6
U.S. government-related securities	1,418,303		3.4		1,770,524		4.9
Other government-related securities	78,941		0.2		76,567		0.2
State, municipals, and political divisions	2,100,003		5.1		1,916,954		5.3
Securities issued by affiliates	2,779,280		6.7		593,314		1.8
Total	$	41,454,487	100.0	%	$	36,100,412	100.0	%

Within our fixed maturity investments, we maintain portfolios classified as “available-for-sale”, “trading”, and “held-to-maturity”. We purchase our available-for-sale investments with the intent to hold to maturity by purchasing investments that match future cash flow needs. However, we may sell any of our available-for-sale and trading investments to maintain proper matching of assets and liabilities. Accordingly, we classified $35.9 billion, or 86.6%, of our fixed maturities as “available-for-sale” as of June 30, 2016 (Successor Company). These securities are carried at fair value on our consolidated condensed balance sheets.

Fixed maturities with respect to which we have both the positive intent and ability to hold to maturity are classified as “held-to-maturity”. We classified $2.8 billion, or 6.7%, of our fixed maturities as “held-to-maturity” as of June 30, 2016 (Successor Company). These securities are carried at amortized cost on our consolidated condensed balance sheets.

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Trading securities are carried at fair value and changes in fair value are recorded on the income statement as they occur. Our trading portfolio accounted for $2.8 billion, or 6.7%, of our fixed maturities and $38.2 million of short-term investments as of June 30, 2016 (Successor Company). Changes in fair value on the Modco trading portfolio, including gains and losses from sales, are passed to the reinsurers through the contractual terms of the reinsurance arrangements. Partially offsetting these amounts are corresponding changes in the fair value of the embedded derivative associated with the underlying reinsurance arrangement. The total Modco trading portfolio fixed maturities by rating is as follows:

	Successor Company
	As of		As of
Rating	June 30, 2016		December 31, 2015
	(Dollars In Thousands)		(Dollars In Thousands)
AAA	$	387,609	$	542,080
AA	336,922		309,852
A	939,001		752,419
BBB	855,219		771,501
Below investment grade	270,840		288,197
Total Modco trading fixed maturities	$	2,789,591	$	2,664,049

A portion of our bond portfolio is invested in residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). ABS are securities that are backed by a pool of assets. These holdings as of June 30, 2016 (Successor Company), were approximately $5.3 billion. Mortgage-backed securities (“MBS”) are constructed from pools of mortgages and may have cash flow volatility as a result of changes in the rate at which prepayments of principal occur with respect to the underlying loans. Excluding limitations on access to lending and other extraordinary economic conditions, prepayments of principal on the underlying loans can be expected to accelerate with decreases in market interest rates and diminish with increases in interest rates.

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The following tables include the percentage of our collateral grouped by rating category and categorizes the estimated fair value by year of security origination for our Prime, Non-Prime, Commercial, and Other asset-backed securities as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company):

	As of June 30, 2016 (Successor Company)
	Prime(1)						Non-Prime(1)						Commercial						Other asset-backed						Total
	Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized
	Value			Cost			Value			Cost			Value			Cost			Value			Cost			Value			Cost
	(Dollars In Millions)
Rating $
AAA	$	1,789.2		$	1,741.1		$	—		$	—		$	1,123.5		$	1,105.7		$	716.1		$	745.6		$	3,628.8		$	3,592.4
AA	1.2			1.2			—			—			378.3			372.3			161.6			160.9			541.1			534.4
A	3.1			3.2			—			—			221.5			219.1			390.5			392.6			615.1			614.9
BBB	2.4			2.4			2.4			2.5			12.0			12.1			25.4			25.5			42.2			42.5
Below	132.7			134.5			272.8			278.4			—			—			102.1			101.9			507.6			514.8
	$	1,928.6		$	1,882.4		$	275.2		$	280.9		$	1,735.3		$	1,709.2		$	1,395.7		$	1,426.5		$	5,334.8		$	5,299.0
Rating %
AAA	92.8		%	92.5		%	—		%	—		%	64.7		%	64.7		%	51.3		%	52.3		%	68.0		%	67.8		%
AA	0.1			0.1			—			—			21.8			21.8			11.6			11.3			10.1			10.1
A	0.2			0.2			—			—			12.8			12.8			28.0			27.5			11.5			11.6
BBB	0.1			0.1			0.9			0.9			0.7			0.7			1.8			1.8			0.8			0.8
Below	6.8			7.1			99.1			99.1			—			—			7.3			7.1			9.6			9.7
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%
Estimated Fair Value of Security by Year of Security Origination
2012 and prior	$	945.2		$	929.8		$	275.2		$	280.9		$	867.4		$	859.2		$	902.7		$	934.5		$	2,990.5		$	3,004.4
2013	151.9			148.2			—			—			233.6			231.3			116.4			117.0			501.9			496.5
2014	174.3			170.7			—			—			238.9			238.5			187.1			187.4			600.3			596.6
2015	559.9			540.0			—			—			220.1			210.1			64.4			63.9			844.4			814.0
2016	97.3			93.7			—			—			175.3			170.1			125.1			123.7			397.7			387.5
Total	$	1,928.6		$	1,882.4		$	275.2		$	280.9		$	1,735.3		$	1,709.2		$	1,395.7		$	1,426.5		$	5,334.8		$	5,299.0
(1)Included in Residential Mortgage-Backed securities.

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	As of December 31, 2015 (Successor Company)
	Prime(1)						Non-Prime(1)						Commercial						Other asset-backed						Total
	Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized			Fair			Amortized
	Value			Cost			Value			Cost			Value			Cost			Value			Cost			Value			Cost
	(Dollars In Millions)
Rating $
AAA	$	1,585.4		$	1,589.2		$	—		$	—		$	1,002.4		$	1,033.9		$	595.2		$	608.3		$	3,183.0		$	3,231.4
AA	1.4			1.4			—			—			252.5			261.0			197.1			194.5			451.0			456.9
A	3.5			3.5			—			—			164.5			165.9			153.8			159.2			321.8			328.6
BBB	2.8			2.8			2.8			2.8			13.2			13.2			13.5			13.5			32.3			32.3
Below	152.9			153.1			303.1			306.9			—			—			112.9			113.0			568.9			573.0
	$	1,746.0		$	1,750.0		$	305.9		$	309.7		$	1,432.6		$	1,474.0		$	1,072.5		$	1,088.5		$	4,557.0		$	4,622.2
Rating %
AAA	90.8		%	90.8		%	—		%	—		%	70.0		%	70.1		%	55.5		%	55.9		%	69.8		%	69.9		%
AA	0.1			0.1			—			—			17.6			17.7			18.4			17.9			9.9			9.9
A	0.2			0.2			—			—			11.5			11.3			14.3			14.6			7.1			7.1
BBB	0.2			0.2			0.9			0.9			0.9			0.9			1.3			1.2			0.7			0.7
Below	8.7			8.7			99.1			99.1			—			—			10.5			10.4			12.5			12.4
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%
Estimated Fair Value of Security by Year of Security Origination
2011 and prior	$	894.3		$	896.2		$	305.9		$	309.7		$	480.1		$	491.0		$	826.4		$	838.0		$	2,506.7		$	2,534.9
2012	74.2			75.2			—			—			369.5			381.1			136.6			138.8			580.3			595.1
2013	157.2			160.3			—			—			198.2			203.8			48.9			49.9			404.3			414.0
2014	161.6			160.6			—			—			216.6			228.3			43.1			44.3			421.3			433.2
2015	458.7			457.7			—			—			168.2			169.8			17.5			17.5			644.4			645.0
Total	$	1,746.0		$	1,750.0		$	305.9		$	309.7		$	1,432.6		$	1,474.0		$	1,072.5		$	1,088.5		$	4,557.0		$	4,622.2
(1) Included in Residential Mortgage-Backed securities

The majority of our RMBS holdings as of June 30, 2016 (Successor Company) were super senior or senior bonds in the capital structure. Our total non-agency portfolio has a weighted-average life of 4.89 years. The following table categorizes the weighted-average life for our non-agency portfolio, by category of material holdings, as of June 30, 2016 (Successor Company):

	Weighted-Average
Non-agency portfolio	Life
Prime	5.13
Alt-A	3.72
Sub-prime	3.26

Our investments classified as available-for-sale and trading in debt and equity securities are reported at fair value. Our investments classified as held-to-maturity are reported at amortized cost. As of June 30, 2016 (Successor Company), our fixed maturity investments (bonds and redeemable preferred stocks) had a fair value of $41.5 billion, which was 1.4% below amortized cost of $42.1 billion. These assets are invested for terms approximately corresponding to anticipated future benefit payments. Thus, market fluctuations are not expected to adversely affect liquidity.

Fair values for private, non-traded securities are determined as follows: 1) we obtain estimates from independent pricing services and 2) we estimate fair value based upon a comparison to quoted issues of the same issuer or issues of other issuers with similar terms and risk characteristics. We analyze the independent pricing services valuation methodologies and related inputs, including an assessment of the observability of market inputs. Upon obtaining this information related to fair value, management makes a determination as to the appropriate valuation amount.

Mortgage Loans

We invest a portion of our investment portfolio in commercial mortgage loans. As of June 30, 2016 (Successor Company), our mortgage loan holdings were approximately $5.7 billion. We have specialized in making loans on either credit-oriented

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commercial properties or credit-anchored strip shopping centers and apartments. Our underwriting procedures relative to our commercial loan portfolio are based, in our view, on a conservative and disciplined approach. We concentrate on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). We believe that these asset types tend to weather economic downturns better than other commercial asset classes in which we have chosen not to participate. We believe this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout our history. The majority of our mortgage loans portfolio was underwritten and funded by us. From time to time, we may acquire loans in conjunction with an acquisition.

Our commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts, and prepayment fees are reported in net investment income.

Certain of the mortgage loans have call options that occur within the next 12 years. However, if interest rates were to significantly increase, we may be unable to exercise the call options on our existing mortgage loans commensurate with the significantly increased market rates. As of June 30, 2016 (Successor Company), assuming the loans are called at their next call dates, approximately $42.7 million of principal would become due for the remainder of 2016, $922.1 million in 2017 through 2021, $238.1 million in 2022 through 2026, and $11.1 million thereafter.

We offer a type of commercial mortgage loan under which we will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), approximately $522.8 million and $449.2 million, respectively, of our total mortgage loans principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and January 1, 2015 to January 31, 2015 (Predecessor Company), we recognized $5.7 million, $12.5 million, $3.3 million, $5.1 million, and $0.1 million, respectively, of participating mortgage loan income.

We record mortgage loans net of an allowance for credit losses. This allowance is calculated through analysis of specific loans that have indicators of potential impairment based on current information and events. As of June 30, 2016 (Successor Company) there were $3.9 million of allowances for mortgage loan credit losses and as of December 31, 2015 (Successor Company), there were no allowances for mortgage loan credit losses. While our mortgage loans do not have quoted market values, as of June 30, 2016 (Successor Company), we estimated the fair value of our mortgage loans to be $5.7 billion (using an internal fair value model which calculates the value of most loans by using the loan's discounted cash flows to the loan's call or maturity date), which was approximately 0.2% less than the amortized cost, less any related loan loss reserve.

At the time of origination, our mortgage lending criteria targets that the loan-to-value ratio on each mortgage is 75% or less. We target projected rental payments from credit anchors (i.e., excluding rental payments from smaller local tenants) of 70% of the property’s projected operating expenses and debt service.

As of June 30, 2016 (Successor Company), approximately $1.0 million of invested assets consisted of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. We do not expect these investments to adversely affect our liquidity or ability to maintain proper matching of assets and liabilities. During the six months ended June 30, 2016 (Successor Company), we did not enter into certain mortgage loan transactions that were accounted for as troubled debt restructurings under Topic 310 of the FASB ASC. For all mortgage loans, the impact of troubled debt restructurings is generally reflected in our investment balance and in the allowance for mortgage loan credit losses. If we had troubled debt restructurings, these transactions would include either the acceptance of assets in satisfaction of principal during the respective periods or at a future date, and were the result of agreements between the creditor and the debtor. During the six months ended June 30, 2016 (Successor Company), we did not accept or agree to accept assets in satisfaction of principal. As of June 30, 2016 (Successor Company), we did not have any mortgage loan transactions accounted for as troubled debt restructurings.

Our mortgage loan portfolio consists of two categories of loans: 1) those not subject to a pooling and servicing agreement and 2) those subject to a contractual pooling and servicing agreement. As of June 30, 2016 (Successor Company), $1.0 million of mortgage loans not subject to a pooling and servicing agreement were nonperforming mortgage loans, restructured, or mortgage loans that were foreclosed and were converted to real estate properties. We did not foreclose on any nonperforming loans not subject to a pooling and servicing agreement during the six months ended June 30, 2016 (Successor Company).

As of June 30, 2016 (Successor Company), none of the loans subject to a pooling and servicing agreement were nonperforming or restructured. We did not foreclose on any nonperforming loans subject to a pooling and servicing agreement during the six months ended June 30, 2016 (Successor Company).

We do not expect these investments to adversely affect our liquidity or ability to maintain proper matching of assets and liabilities.

It is our policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related

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to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status.

Risk Management and Impairment Review

We monitor the overall credit quality of our portfolio within established guidelines. The following table includes our available-for-sale fixed maturities by credit rating as of June 30, 2016 (Successor Company): 

			Percent of
Rating	Fair Value		Fair Value
	(Dollars In Thousands)
AAA	$	4,948,648	13.8	%
AA	2,945,979		8.2
A	12,103,346		33.7
BBB	14,092,221		39.5
Investment grade	34,090,194		95.2
BB	1,115,949		3.1
B	381,445		0.8
CCC or lower	298,028		0.9
Below investment grade	1,795,422		4.8
Total	$	35,885,616	100.0	%

Not included in the table above are $2.5 billion of investment grade and $270.8 million of below investment grade fixed maturities classified as trading securities and $2.8 billion of fixed maturities classified as held-to-maturity.

Limiting bond exposure to any creditor group is another way we manage credit risk. We held no credit default swaps on the positions listed below as of June 30, 2016 (Successor Company). The following table summarizes our ten largest maturity exposures to an individual creditor group as of June 30, 2016 (Successor Company): 

	Fair Value of
	Funded		Unfunded		Total
Creditor	Securities		Exposures		Fair Value
	(Dollars In Millions)
Exelon Corp	$	235.3	$	—	$	235.3
AT&T Inc	215.9		—		215.9
Wells Fargo & Co.	207.7		—		207.7
Berkshire Hathaway Inc.	196.3		—		196.3
Duke Energy Corp	191.8		—		191.8
JP Morgan Chase and Company	166.3		21.9		188.2
Comcast Corp	182.2		—		182.2
Bank of America Corp	179.7		0.1		179.8
Goldman Sachs Group Inc	174.3		—		174.3
Morgan Stanley	168.1		—		168.1
Total	$	1,917.6	$	22.0	$	1,939.6

Determining whether a decline in the current fair value of invested assets is an other-than-temporary decline in value is both objective and subjective, and can involve a variety of assumptions and estimates, particularly for investments that are not actively traded in established markets. We review our positions on a monthly basis for possible credit concerns and review our current exposure, credit enhancement, and delinquency experience.

Management considers a number of factors when determining the impairment status of individual securities. These include the economic condition of various industry segments and geographic locations and other areas of identified risks. Since it is possible for the impairment of one investment to affect other investments, we engage in ongoing risk management to safeguard against and limit any further risk to our investment portfolio. Special attention is given to correlative risks within specific industries, related parties, and business markets.

For certain securitized financial assets with contractual cash flows, including RMBS, CMBS, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”), GAAP requires us to periodically update our best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is less than its cost or amortized cost and there has been a decrease in the present value of the expected cash flows since the last revised estimate, considering both timing

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and amount, an other-than-temporary impairment charge is recognized. Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral. Projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral. In addition, we consider our intent and ability to retain a temporarily depressed security until recovery.

Securities in an unrealized loss position are reviewed at least quarterly to determine if an other-than-temporary impairment is present based on certain quantitative and qualitative factors. We consider a number of factors in determining whether the impairment is other-than-temporary. These include, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline, 4) an assessment of our intent to sell the security (including a more likely than not assessment of whether we will be required to sell the security) before recovering the security’s amortized cost, 5) the time period during which the decline has occurred, 6) an economic analysis of the issuer’s industry, and 7) the financial strength, liquidity, and recoverability of the issuer. Management performs a security-by-security review each quarter in evaluating the need for any other-than-temporary impairments. Although no set formula is used in this process, the investment performance, collateral position, and continued viability of the issuer are significant measures considered, along with an analysis regarding our expectations for recovery of the security’s entire amortized cost basis through the receipt of future cash flows. Based on our analysis, for the three and six months ended June 30, 2016 (Successor Company), we concluded that approximately $1.0 million and $3.6 million, respectively, of investment securities in an unrealized loss position were other-than-temporarily impaired, due to credit related factors, resulting in a charge to earnings. Additionally, we recognized $4.6 million and $4.8 million of non-credit losses in other comprehensive income (loss), respectively.

There are certain risks and uncertainties associated with determining whether declines in fair values are other-than-temporary. These include significant changes in general economic conditions and business markets, trends in certain industry segments, interest rate fluctuations, rating agency actions, changes in significant accounting estimates and assumptions, commission of fraud, and legislative actions. We continuously monitor these factors as they relate to the investment portfolio in determining the status of each investment.

During 2015 and 2016, the energy and natural gas sector experienced increased volatility due to the decline in oil prices. A prolonged decline in oil prices could have a broad economic impact and put financial stress on companies in this sector. We continue to monitor our exposure to companies within and exposed to this sector closely. Our current exposure is predominantly with investment grade securities of companies with ample liquidity to weather a prolonged decline in oil prices. Many of these companies have displayed financial discipline by reducing capital expenditures to conserve cash and maintain their credit ratings. For the six months ended June 30, 2016 (Successor Company), we concluded that certain investment securities within the energy and natural gas sector that were in an unrealized loss position were other-than-temporarily impaired due to credit related factors, resulting in a $2.6 million impairment recognized in net income. We did not recognized an other-than-temporary impairment for the three months ended June 30, 2016 (Successor Company).

The energy and natural gas sector securities as of June 30, 2016 (Successor Company) are presented in the following tables.

Energy and Natural Gas
	Fair Value		Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
Midstream	$	1,687,419	$	1,818,098	$	(130,679	)	48.9	%
Integrated	788,337		816,448		(28,111		)	10.5
Distributors	703,367		728,756		(25,389		)	9.5
Independent	550,774		575,452		(24,678		)	9.2
Oil Field Services	512,761		561,342		(48,581		)	18.2
Refining	169,184		178,900		(9,716		)	3.7
Total	$	4,411,842	$	4,678,996	$	(267,154	)	100.0	%

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Energy and Natural Gas
Rating	Issuer Type	Fair Value		Amortized Cost		Unrealized Loss			% Unrealized Loss
		(Dollars In Thousands)
AAA/AA/A	Distributors	$	364,181	$	366,546	$	(2,365	)	0.9	%
	Independent	80,209		76,888		3,321			(1.2	)
	Integrated	319,817		323,705		(3,888		)	1.4
	Midstream	175,568		182,809		(7,241		)	2.7
	Oil Field Services	157,489		157,921		(432		)	0.1
BBB	Distributors	314,457		335,065		(20,608		)	7.7
	Independent	417,910		447,707		(29,797		)	11.2
	Integrated	337,183		358,326		(21,143		)	7.9
	Midstream	1,356,083		1,468,323		(112,240		)	42.0
	Oil Field Services	140,297		145,482		(5,185		)	1.9
	Refining	158,976		168,526		(9,550		)	3.6
Total investment grade		3,822,170		4,031,298		(209,128		)	78.2
Below investment grade	Distributors	24,729		27,145		(2,416		)	0.9
	Independent	52,655		50,857		1,798			(0.7	)
	Integrated	131,337		134,417		(3,080		)	1.2
	Midstream	155,768		166,966		(11,198		)	4.2
	Oil Field Services	214,975		257,939		(42,964		)	16.1
	Refining	10,208		10,374		(166		)	0.1
Total below investment grade		589,672		647,698		(58,026		)	21.8
Total energy and natural gas		$	4,411,842	$	4,678,996	$	(267,154	)	100.0	%

During 2015, the metals and mining sector (a sub-sector of the basic industrial sector) experienced increased volatility due to the decline in precious and base metal prices. A prolonged decline in these prices could have a broad economic impact and put financial stress on companies in this sector. We continue to monitor our exposure to companies within and exposed to this sector closely. Our current exposure is predominantly with investment grade securities of companies with ample liquidity to weather a prolonged decline in these prices. Many of these companies have displayed financial discipline by reducing capital expenditures and reducing dividends to conserve cash and maintain their credit ratings.

The basic industrial sector securities as of June 30, 2016 (Successor Company) are presented in the following tables:

Basic Industrial
	Fair Value		Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
Chemicals	$	758,727	$	790,630	$	(31,903	)	49.2	%
Metals and Mining	730,065		760,651		(30,586		)	47.2
Paper	131,283		133,624		(2,341		)	3.6
Total	$	1,620,075	$	1,684,905	$	(64,830	)	100.0	%

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Basic Industrial
Rating	Issuer Type	Fair Value		Amortized Cost		Unrealized Loss			% Unrealized Loss
		(Dollars In Thousands)
AAA/AA/A	Chemicals	$	265,121	$	273,873	$	(8,752	)	13.5	%
	Metals and Mining	225,054		232,184		(7,130		)	11.1
BBB	Chemicals	491,669		514,323		(22,654		)	34.8
	Metals and Mining	220,803		232,482		(11,679		)	18.0
	Paper	131,284		133,624		(2,340		)	3.6
Total investment grade		1,333,931		1,386,486		(52,555		)	81.0
Below investment grade	Chemicals	1,936		2,434		(498		)	0.8
	Metals and Mining	284,208		295,985		(11,777		)	18.2
Total below investment grade		286,144		298,419		(12,275		)	19.0
Total basic industrial		$	1,620,075	$	1,684,905	$	(64,830	)	100.0	%

We have deposits with certain financial institutions which exceed federally insured limits. We have reviewed the creditworthiness of these financial institutions and believe that there is minimal risk of a material loss.

Certain European countries have experienced varying degrees of financial stress. Risks from the debt crisis in Europe could continue to disrupt the financial markets, which could have a detrimental impact on global economic conditions and on sovereign and non-sovereign obligations. There remains considerable uncertainty as to future developments in the European debt crisis and the impact on financial markets.

The chart shown below includes our non-sovereign fair value exposures in these countries as of June 30, 2016 (Successor Company). As of June 30, 2016 (Successor Company), we had no unfunded exposure and had no direct sovereign fair value exposure. 

					Total Gross
	Non-sovereign Debt				Funded
Financial Instrument and Country	Financial		Non-financial		Exposure
	(Dollars In Millions)
Securities:
United Kingdom	$	531.1	$	898.6	$	1,429.7
Netherlands	163.1		252.2		415.3
Switzerland	190.3		162.1		352.4
France	105.5		205.4		310.9
Spain	22.9		230.1		253.0
Germany	153.0		83.0		236.0
Belgium	—		170.8		170.8
Sweden	131.6		34.0		165.6
Italy	42.2		95.5		137.7
Norway	—		101.3		101.3
Ireland	11.4		58.7		70.1
Luxembourg	—		55.9		55.9
Total securities	1,351.1		2,347.6		3,698.7
Derivatives:
Germany	70.0		—		70.0
United Kingdom	32.0		—		32.0
Switzerland	22.8		—		22.8
France	4.2		—		4.2
Total derivatives	129.0		—		129.0
Total securities	$	1,480.1	$	2,347.6	$	3,827.7

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Realized Gains and Losses

The following table sets forth realized investment gains and losses for the periods shown:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Fixed maturity gains - sales	$	18,550		$	5,381		$	27,461		$	6,888		$	6,920
Fixed maturity losses - sales	(1,820		)	(2,052		)	(5,029		)	(3,186		)	(29		)
Equity gains - sales	202			44			320			44			—
Equity losses - sales	—			(23		)	(284		)	(23		)	—
Impairments on corporate securities	(964		)	(5,734		)	(3,581		)	(5,734		)	(481		)
Modco trading portfolio	76,201			(108,741		)	154,355			(141,901		)	73,062
Other	(4,353		)	3,044			(6,334		)	775			1,200
Total realized gains (losses) - investments	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672
Derivatives related to VA contracts:
Interest rate futures - VA	$	31,266		$	(14,183	)	$	69,067		$	(14,231	)	$	1,413
Equity futures - VA	(21,328		)	(5,267		)	(24,556		)	(37,736		)	9,221
Currency futures - VA	11,112			(8,709		)	4,954			(2,572		)	7,778
Equity options - VA	(3,232		)	(3,550		)	13,072			(25,324		)	3,047
Interest rate swaptions - VA	(749		)	2,547			(2,983		)	(8,781		)	9,268
Interest rate swaps - VA	81,554			(121,167		)	207,147			(175,958		)	122,710
Embedded derivative - GMWB	(66,019		)	45,969			(132,695		)	81,839			(68,503		)
Funds withheld derivative	17,850			6,335			10,052			44,571			(9,073		)
Total derivatives related to VA contracts	50,454			(98,025		)	144,058			(138,192		)	75,861
Derivatives related to FIA contracts:
Embedded derivative - FIA	710			290			(1,452		)	(2,293		)	1,769
Equity futures - FIA	651			123			2,033			307			(184		)
Volatility futures - FIA	—			25			—			29			—
Equity options - FIA	735			1,226			(4,827		)	5,601			(2,617		)
Total derivatives related to FIA contracts	2,096			1,664			(4,246		)	3,644			(1,032		)
Derivatives related to IUL contracts:
Embedded derivative - IUL	(96		)	1,538			(834		)	1,795			(486		)
Equity futures - IUL	47			9			(172		)	23			3
Equity options - IUL	241			(78		)	214			62			(115		)
Total derivatives related to IUL contracts	192			1,469			(792		)	1,880			(598		)
Embedded derivative - Modco reinsurance treaties	(22,820		)	109,131			(81,175		)	141,322			(68,026		)
Derivatives with PLC(1)	13,681			(3,684		)	17,711			(3,119		)	15,863
Other derivatives	(55		)	11			(100		)	83			(37		)
Total realized gains (losses) - derivatives	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031

(1) These derivatives include the interest support agreement, two early renewable term ("YRT") premium support agreements, and three portfolio maintenance agreements between certain of our subsidiaries and PLC.

Realized gains and losses on investments reflect portfolio management activities designed to maintain proper matching of assets and liabilities and to enhance long-term investment portfolio performance. The change in net realized investment gains (losses), excluding impairments and Modco trading portfolio activity during the three and six months ended June 30, 2016 (Successor Company), primarily reflects the normal operation of our asset/liability program within the context of the changing interest rate and spread environment, as well as tax planning strategies designed to utilize capital loss carryforwards.

Realized losses are comprised of both write-downs of other-than-temporary impairments and actual sales of investments. For the three and six months ended June 30, 2016 (Successor Company) we concluded that approximately $1.0 million and $3.6 million, respectively, of investment securities in an unrealized loss position were other-than-temporarily impaired, due to credit related factors, resulting in a charge to earnings. Additionally, $4.6 million and $4.8 million of non-credit losses was recorded in other comprehensive income (loss), respectively.

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For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), we recognized pre-tax other-than-temporary impairments of $0.5 million due to credit-related factors, resulting in a charge to earnings. Of the credit losses, $0.1 million were non-credit losses previously recorded in other comprehensive income.

These other-than-temporary impairments resulted from our analysis of circumstances and our belief that credit events, loss severity, changes in credit enhancement, and/or other adverse conditions of the respective issuers have caused, or will lead to, a deficiency in the contractual cash flows related to these investments. These other-than-temporary impairments, net of Modco recoveries, are presented in the chart below: 

	Successor Company								Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Millions)								(Dollars In Millions)
Alt-A MBS	$	—	$	—	$	—	$	—	$	0.3
Other MBS	—		0.1		—		0.1		0.2
Corporate securities	1.0		5.6		3.6		5.6		—
Total	$	1.0	$	5.7	$	3.6	$	5.7	$	0.5

As previously discussed, management considers several factors when determining other-than-temporary impairments. Although we purchase securities with the intent to hold them until maturity, we may change our position as a result of a change in circumstances. Any such decision is consistent with our classification of all but a specific portion of our investment portfolio as available-for-sale. For the six months ended June 30, 2016 (Successor Company), we sold securities in an unrealized loss position with a fair value of $60.6 million. For such securities, the proceeds, realized loss, and total time period that the security had been in an unrealized loss position are presented in the table below for the six months ended June 30, 2016 (Successor Company):

	Proceeds		% Proceeds		Realized Loss			% Realized Loss
	(Dollars In Thousands)
<= 90 days	$	53,566	88.4	%	$	(3,375	)	63.5	%
>90 days but <= 180 days	1,846		3.0		(364		)	6.9
>180 days but <= 270 days	1,211		2.0		(590		)	11.1
>270 days but <= 1 year	1,476		2.4		(325		)	6.1
>1 year	2,483		4.2		(659		)	12.4
Total	$	60,582	100.0	%	$	(5,313	)	100.0	%

     For the three and six months ended June 30, 2016 (Successor Company) we sold securities in an unrealized loss position with a fair value (proceeds) of $6.9 million and $60.6 million, respectively. The losses realized on the sale of these securities were $1.8 million and $5.3 million, respectively. We made the decision to exit these holdings in conjunction with our overall asset liability management process.

For the three and six months ended June 30, 2016 (Successor Company), we sold securities in an unrealized gain position with a fair value of $513.4 million and $819.8 million, respectively. The gains realized on the sale of these securities were $18.8 million and $27.8 million, respectively.

The $4.3 million of other realized losses recognized for the three months ended June 30, 2016 (Successor Company), consisted of an increase in mortgage loan reserves of $2.0 million, partnership losses of $2.4 million, and real estate realized gains of $0.1 million.

The $6.3 million of other realized losses recognized for the six months ended June 30, 2016 (Successor Company), consisted realized gains related to mortgage loans of $0.3 million, an increase in mortgage loan reserves of $3.9 million, partnership losses of $2.5 million, and real estate realized losses of $0.2 million.

For the three and six months ended June 30, 2016 (Successor Company) net gains of $76.2 million and $154.4 million, respectively, primarily related to changes in fair value on our Modco trading portfolios were included in realized gains and losses. Of the $154.4 million for the six months ended June 30, 2016 (Successor Company), approximately $2.0 million of losses were realized through the sale of certain securities, which will be reimbursed to our reinsurance partners over time through the reinsurance settlement process for this block of business.

The Modco embedded derivative associated with the trading portfolios had realized pre-tax losses of $22.8 million and $81.2 million, respectively, during the three and six months ended June 30, 2016 (Successor Company). The losses during the three months ended June 30, 2016 (Successor Company) were due to lower treasury yields.

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Realized investment gains and losses related to derivatives represent changes in their fair value during the period and termination gains/(losses) on those derivatives that were closed during the period.

We use various derivative instruments to manage risks related to certain life insurance and annuity products. We can use these derivatives as economic hedges against risks inherent in the products. These risks have a direct impact on the cost of these products and are correlated with the equity markets, interest rates, foreign currency levels, and overall volatility. The hedged risks are recorded through the recognition of embedded derivatives associated with the products. These products include the GMWB rider associated with the variable annuity, fixed indexed annuity products as well as indexed universal life products. During the three and six months ended June 30, 2016 (Successor Company) we experienced net realized gains on derivatives related to VA contracts of approximately $50.5 million and $144.1 million, respectively. These net gains on derivatives related to VA contracts were affected by capital market.

The Funds Withheld derivative associated with Shades Creek had pre-tax realized gains of $17.9 million and $10.1 million, respectively, for the three and six months ended June 30, 2016 (Successor Company).

Certain of our subsidiaries have derivatives with PLC. These derivatives consist of an interest support agreement, two YRT premium support agreements, and three portfolio maintenance agreements with PLC. We recognized gains of $13.9 million and $13.8 million, respectively related to the interest support agreement for the three and six months ended June 30, 2016 (Successor Company). We recognized losses of $0.7 million and $0.5 million, respectively, related to the YRT premium support agreements for the three and six months ended June 30, 2016 (Successor Company). We entered into two separate portfolio maintenance agreements in October 2012 and one portfolio maintenance agreement in January 2016. We recognized pre-tax gains of $0.5 million and $4.4 million, respectively, for the three and six months ended June 30, 2016 (Successor Company).

We also use various swaps and other types of derivatives to mitigate risk related to other exposures. These contracts generated losses of $0.1 million for the three and six months ended June 30, 2016 (Successor Company).

Unrealized Gains and Losses — Available-for-Sale Securities

The information presented below relates to investments at a certain point in time and is not necessarily indicative of the status of the portfolio at any time after June 30, 2016 (Successor Company), the balance sheet date. Information about unrealized gains and losses is subject to rapidly changing conditions, including volatility of financial markets and changes in interest rates. Management considers a number of factors in determining if an unrealized loss is other-than-temporary, including the expected cash to be collected and the intent, likelihood, and/or ability to hold the security until recovery. Consistent with our long-standing practice, we do not utilize a “bright line test” to determine other-than-temporary impairments. On a quarterly basis, we perform an analysis on every security with an unrealized loss to determine if an other-than-temporary impairment has occurred. This analysis includes reviewing several metrics including collateral, expected cash flows, ratings, and liquidity. Furthermore, since the timing of recognizing realized gains and losses is largely based on management’s decisions as to the timing and selection of investments to be sold, the tables and information provided below should be considered within the context of the overall unrealized gain/(loss) position of the portfolio. We had an overall net unrealized loss of $589.7 million, prior to tax and the related impact of certain insurance assets and liabilities offsets, as of June 30, 2016 (Successor Company), and an overall net unrealized loss of $2.9 billion as of December 31, 2015 (Successor Company).

For fixed maturity and equity securities held that are in an unrealized loss position as of June 30, 2016 (Successor Company), the fair value, amortized cost, unrealized loss, and total time period that the security has been in an unrealized loss position are presented in the table below: 

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
<= 90 days	$	437,308	2.4	%	$	447,890	2.4	%	$	(10,582	)	0.9	%
>90 days but <= 180 days	362,619		2.0		383,025		2.0		(20,406		)	1.8
>180 days but <= 270 days	391,831		2.2		406,451		2.1		(14,620		)	1.4
>270 days but <= 1 year	1,562,123		8.7		1,651,502		8.6		(89,379		)	7.9
>1 year but <= 2 years	15,257,801		84.7		16,252,330		84.9		(994,529		)	88.0
>2 years but <= 3 years	—		—		—		—		—			—
>3 years but <= 4 years	—		—		—		—		—			—
>4 years but <= 5 years	—		—		—		—		—			—
>5 years	—		—		—		—		—			—
Total	$	18,011,682	100.0	%	$	19,141,198	100.0	%	$	(1,129,516	)	100.0	%

The book value of our investment portfolio was marked to fair value as of February 1, 2015 (Successor Company), in conjunction with the Dai-ichi Merger which resulted in the elimination of previously unrealized gains and losses from accumulated other comprehensive income. The level of interest rates as of February 1, 2015 (Successor Company), resulted in an increase in the carrying value of our investments. Since February 1, 2015 (Successor Company) interest rates have increased resulting in net unrealized losses in our investment portfolio.

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As of June 30, 2016 (Successor Company), the Barclays Investment Grade Index was priced at 147.6 bps versus a 10 year average of 175 bps. Similarly, the Barclays High Yield Index was priced at 628.9 bps versus a 10 year average of 642.2 bps. As of June 30, 2016 (Successor Company), the five, ten, and thirty-year U.S. Treasury obligations were trading at levels of 1.000%, 1.471%, and 2.285%, as compared to 10 year averages of 2.080%, 2.943%, and 3.752%, respectively.

As of June 30, 2016 (Successor Company), 84.8% of the unrealized loss was associated with securities that were rated investment grade. We have examined the performance of the underlying collateral and cash flows and expect that our investments will continue to perform in accordance with their contractual terms. Factors such as credit enhancements within the deal structures and the underlying collateral performance/characteristics support the recoverability of the investments. Based on the factors discussed, we do not consider these unrealized loss positions to be other-than-temporary. However, from time to time, we may sell securities in the ordinary course of managing our portfolio to meet diversification, credit quality, yield enhancement, asset/liability management, and liquidity requirements.

Expectations that investments in mortgage-backed and asset-backed securities will continue to perform in accordance with their contractual terms are based on assumptions that a market participant would use in determining the current fair value. It is reasonably possible that the underlying collateral of these investments will perform worse than current market expectations and that such an event may lead to adverse changes in the cash flows on our holdings of these types of securities. This could lead to potential future write-downs within our portfolio of mortgage-backed and asset-backed securities. Expectations that our investments in corporate securities and/or debt obligations will continue to perform in accordance with their contractual terms are based on evidence gathered through our normal credit surveillance process. Although we do not anticipate such events, it is reasonably possible that issuers of our investments in corporate securities will perform worse than current expectations. Such events may lead us to recognize potential future write-downs within our portfolio of corporate securities. It is also possible that such unanticipated events would lead us to dispose of those certain holdings and recognize the effects of any such market movements in our financial statements.

As of June 30, 2016 (Successor Company), there were estimated gross unrealized losses of $5.8 million related to our mortgage-backed securities collateralized by Alt-A mortgage loans. Gross unrealized losses in our securities collateralized by Alt-A residential mortgage loans as of June 30, 2016 (Successor Company), were primarily the result of continued widening spreads, representing marketplace uncertainty arising from higher defaults in Alt-A residential mortgage loans and rating agency downgrades of securities collateralized by Alt-A residential mortgage loans.

110

We have no material concentrations of issuers or guarantors of fixed maturity securities. The industry segment composition of all securities in an unrealized loss position held as of June 30, 2016 (Successor Company) is presented in the following table:

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
Banking	$	1,665,354	9.2	%	$	1,741,708	9.1	%	$	(76,354	)	6.8	%
Other finance	122,801		0.7		126,390		0.7		(3,589		)	0.3
Electric utility	2,646,564		14.7		2,796,947		14.6		(150,383		)	13.3
Energy and natural gas	3,249,904		18.0		3,546,873		18.6		(296,969		)	26.3
Insurance	2,254,331		12.5		2,415,833		12.6		(161,502		)	14.3
Communications	935,891		5.2		1,023,589		5.3		(87,698		)	7.8
Basic industrial	1,100,079		6.1		1,184,074		6.2		(83,995		)	7.4
Consumer noncyclical	1,078,285		6.0		1,131,061		5.9		(52,776		)	4.7
Consumer cyclical	618,777		3.4		650,006		3.4		(31,229		)	2.8
Finance companies	28,104		0.2		31,953		0.2		(3,849		)	0.3
Capital goods	653,192		3.6		675,274		3.5		(22,082		)	2.0
Transportation	502,135		2.8		529,143		2.8		(27,008		)	2.4
Other industrial	138,964		0.8		146,317		0.8		(7,353		)	0.7
Brokerage	243,013		1.3		256,714		1.3		(13,701		)	1.2
Technology	555,169		3.1		591,332		3.1		(36,163		)	3.2
Real estate	51,916		0.5		52,300		0.3		(384		)	—
Other utility	130,681		0.7		134,329		0.7		(3,648		)	0.3
Commercial mortgage-backed securities	238,515		1.3		242,241		1.3		(3,726		)	0.3
Other asset-backed securities	641,176		3.6		677,231		3.5		(36,055		)	3.2
Residential mortgage-backed non-agency securities	307,092		1.7		316,250		1.7		(9,158		)	0.8
Residential mortgage-backed agency securities	38,174		0.2		38,269		0.2		(95		)	—
U.S. government-related securities	58,655		0.3		58,860		0.3		(205		)	—
Other government-related securities	—		—		—		—		—			—
States, municipals, and political divisions	752,910		4.1		774,504		3.9		(21,594		)	1.9
Total	$	18,011,682	100.0	%	$	19,141,198	100.0	%	$	(1,129,516	)	100.0	%

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We have no material concentrations of issuers or guarantors of fixed maturity securities. The industry segment composition of all securities in an unrealized loss position held as of December 31, 2015 (Successor Company) is presented in the following table:

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
Banking	$	2,898,187	9.6	%	$	3,013,605	9.1	%	$	(115,418	)	3.9	%
Other finance	437,409		1.4		452,946		1.4		(15,537		)	0.5
Electric utility	3,394,404		11.2		3,788,969		11.4		(394,565		)	13.5
Energy and natural gas	3,717,401		12.3		4,408,415		13.3		(691,014		)	23.6
Insurance	2,695,639		8.9		2,981,123		9.0		(285,484		)	9.7
Communications	1,207,228		4.0		1,396,152		4.4		(188,924		)	6.4
Basic industrial	1,403,081		4.6		1,657,297		5.0		(254,216		)	8.7
Consumer noncyclical	2,777,167		9.2		3,033,358		9.1		(256,191		)	8.7
Consumer cyclical	1,509,609		5.0		1,624,305		4.9		(114,696		)	3.9
Finance companies	102,526		0.3		111,112		0.3		(8,586		)	0.3
Capital goods	1,265,004		4.2		1,364,376		4.1		(99,372		)	3.4
Transportation	856,118		2.8		942,135		2.8		(86,017		)	2.9
Other industrial	273,473		0.9		299,859		0.9		(26,386		)	0.9
Brokerage	478,551		1.6		514,350		1.6		(35,799		)	1.2
Technology	1,146,636		3.7		1,241,127		3.6		(94,491		)	3.5
Real estate	139,853		0.5		142,483		0.4		(2,630		)	0.1
Other utility	216,013		0.7		236,051		0.7		(20,038		)	0.7
Commercial mortgage-backed securities	1,232,495		4.1		1,274,347		3.8		(41,852		)	1.4
Other asset-backed securities	633,274		2.1		652,037		2.0		(18,763		)	0.6
Residential mortgage-backed non-agency securities	562,686		1.9		572,327		1.7		(9,641		)	0.3
Residential mortgage-backed agency securities	414,747		1.4		422,218		1.3		(7,471		)	0.3
U.S. government-related securities	1,291,476		4.3		1,326,008		4.0		(34,532		)	1.2
Other government-related securities	17,740		0.1		18,483		0.1		(743		)	—
States, municipals, and political divisions	1,566,752		5.2		1,693,566		5.1		(126,814		)	4.3
Total	$	30,237,469	100.0	%	$	33,166,649	100.0	%	$	(2,929,180	)	100.0	%

The range of maturity dates for securities in an unrealized loss position as of June 30, 2016 (Successor Company) varies, with 11.1% maturing in less than 5 years, 10.4% maturing between 5 and 10 years, and 78.5% maturing after 10 years. The following table shows the credit rating of securities in an unrealized loss position as of June 30, 2016 (Successor Company):

S&P or Equivalent	Fair		% Fair		Amortized		% Amortized		Unrealized			% Unrealized
Designation	Value		Value		Cost		Cost		Loss			Loss
	(Dollars In Thousands)
AAA/AA/A	$	7,480,661	41.5	%	$	7,786,263	40.7	%	$	(305,602	)	27.1	%
BBB	9,032,141		50.1		9,683,546		50.6		(651,405		)	57.7
Investment grade	16,512,802		91.6	%	17,469,809		91.3	%	(957,007		)	84.8	%
BB	908,803		5.0		987,893		5.2		(79,090		)	7.0
B	368,303		2.0		440,255		2.3		(71,952		)	6.4
CCC or lower	221,774		1.4		243,241		1.2		(21,467		)	1.8
Below investment grade	1,498,880		8.4	%	1,671,389		8.7	%	(172,509		)	15.2	%
Total	$	18,011,682	100.0	%	$	19,141,198	100.0	%	$	(1,129,516	)	100.0	%

As of June 30, 2016 (Successor Company), we held a total of 1,414 positions that were in an unrealized loss position. Included in that amount were 187 positions of below investment grade securities with a fair value of $1.5 billion that were in an unrealized loss position. Total unrealized losses related to below investment grade securities were $172.5 million, $90.4 million

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of which had been in an unrealized loss position for more than twelve months. Below investment grade securities in an unrealized loss position were 3.0% of invested assets.

As of June 30, 2016 (Successor Company), securities in an unrealized loss position that were rated as below investment grade represented 8.4% of the total fair value and 15.2% of the total unrealized loss. We have the ability and intent to hold these securities to maturity. After a review of each security and its expected cash flows, we believe the decline in market value to be temporary.

The following table includes the fair value, amortized cost, unrealized loss, and total time period that the security has been in an unrealized loss position for all below investment grade securities as of June 30, 2016 (Successor Company):

	Fair Value		% Fair Value		Amortized Cost		% Amortized Cost		Unrealized Loss			% Unrealized Loss
	(Dollars In Thousands)
<= 90 days	$	105,089	7.0	%	$	112,305	6.7	%	$	(7,216	)	4.2	%
>90 days but <= 180 days	174,206		11.6		184,601		11.0		(10,395		)	6.0
>180 days but <= 270 days	116,408		7.8		124,490		7.4		(8,082		)	4.7
>270 days but <= 1 year	531,501		35.5		587,931		35.2		(56,430		)	32.7
>1 year but <= 2 years	571,676		38.1		662,062		39.7		(90,386		)	52.4
>2 years but <= 3 years	—		—		—		—		—			—
>3 years but <= 4 years	—		—		—		—		—			—
>4 years but <= 5 years	—		—		—		—		—			—
>5 years	—		—		—		—		—			—
Total	$	1,498,880	100.0	%	$	1,671,389	100.0	%	$	(172,509	)	100.0	%

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Liquidity refers to a company’s ability to generate adequate amounts of cash to meet its needs. We meet our liquidity requirements primarily through positive cash flows from our operating subsidiaries. Primary sources of cash from the operating subsidiaries are premiums, deposits for policyholder accounts, investment sales and maturities, and investment income. Primary uses of cash include benefit payments, withdrawals from policyholder accounts, investment purchases, policy acquisition costs, interest payments, and other operating expenses. We believe that we have sufficient liquidity to fund our cash needs under normal operating scenarios.

In the event of significant unanticipated cash requirements beyond our normal liquidity needs, we have additional sources of liquidity available depending on market conditions and the amount and timing of the liquidity need. These additional sources of liquidity include cash flows from operations, the sale of liquid assets, accessing our credit facility, and other sources described herein.

Our decision to sell investment assets could be impacted by accounting rules, including rules relating to the likelihood of a requirement to sell securities before recovery of our cost basis. Under stressful market and economic conditions, liquidity may broadly deteriorate, which could negatively impact our ability to sell investment assets. If we require on short notice significant amounts of cash in excess of normal requirements, we may have difficulty selling investment assets in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both.

While we anticipate that the cash flows of our operating subsidiaries will be sufficient to meet our investment commitments and operating cash needs in a normal credit market environment, we recognize that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, we have established repurchase agreement programs for certain of our insurance subsidiaries to provide liquidity when needed. We expect that the rate received on its investments will equal or exceed its borrowing rate. Under this program, we may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of June 30, 2016 (Successor Company), the fair value of securities pledged under the repurchase program was $177.5 million and the repurchase obligation of $160.0 million was included in our consolidated condensed balance sheets (at an average borrowing rate of 42 basis points). During the six months ended June 30, 2016 (Successor Company), the maximum balance outstanding at any one point in time related to these programs was $725.0 million. The average daily balance was $464.5 million (at an average borrowing rate of 40 basis points) during the six months ended June 30, 2016 (Successor Company). As of December 31, 2015 (Successor Company), the fair value of securities pledged under the repurchase program was $479.9 million and the repurchase obligation of $438.2 million was included in our consolidated condensed balance sheets. During 2015, the maximum balance outstanding at any one point in time related to these programs was $912.7 million. The average daily balance was $540.3 million and $77.4 million (at an average borrowing rate of

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20 and 16 basis points) during the period of February 1, 2015 to December 31, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

Additionally, we may, from time to time, sell short-duration stable value products to complement our cash management practices. Depending on market conditions, we may also use securitization transactions involving our commercial mortgage loans to increase liquidity for the operating subsidiaries.

Credit Facility

On February 2, 2015, we and PLC amended and restated the Credit Facility (the “Credit Facility”). Under the Credit Facility, we have the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. We have the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.25 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of PLC’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s prime rate, (y) 0.50% above the Federal Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of PLC's Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of PLC’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The initial facility fee rate was 0.15% on February 2, 2015, and was adjusted to 0.125% upon PLC’s subsequent ratings upgrade on February 2, 2015. The Credit Facility provides that PLC is liable for the full amount of any obligations for borrowings or letters of credit, including those of the Company, under the Credit Facility. The maturity date of the Credit Facility is February 2, 2020. We are not aware of any non-compliance with the financial debt covenants of the Credit Facility as of June 30, 2016 (Successor Company). PLC had an outstanding balance of $360.0 million bearing interest at a rate of LIBOR plus 1.00% as of June 30, 2016 (Successor Company). As of June 30, 2016 (Successor Company), we used $30.0 million of borrowing capacity by executing a Letter of Credit under the Credit Facility for the benefit on an affiliated captive reinsurance subsidiary of the Company. This Letter of Credit had not been drawn upon as of June 30, 2016 (Successor Company).

Sources and Use of Cash

Our primary sources of funding are from our insurance operations and revenues from investments. These sources of cash support our operations and are used to pay dividends to PLC. The states in which we and our insurance subsidiaries are domiciled impose certain restrictions on the ability to pay dividends. These restrictions are based in part on the prior year’s statutory income and/or surplus.

We are a member of the FHLB of Cincinnati and FHLB of New York. FHLB advances provide an attractive funding source for short-term borrowing and for the sale of funding agreements. Membership in the FHLB requires that we purchase FHLB capital stock based on a minimum requirement and a percentage of the dollar amount of advances outstanding. Our borrowing capacity is determined by criteria established by each respective bank.

We held $65.7 million of FHLB common stock as of June 30, 2016 (Successor Company), which is included in equity securities. In addition, our obligations under the advances must be collateralized. We maintain control over any such pledged assets, including the right of substitution. As of June 30, 2016 (Successor Company), we had $822.3 million of funding agreement-related advances and accrued interest outstanding under the FHLB program.

As of June 30, 2016 (Successor Company), we reported approximately $524.2 million (fair value) of Auction Rate Securities (“ARS”) in non-Modco portfolios. As of June 30, 2016 (Successor Company), 100% of these ARS were rated Aaa/AA+. While the auction rate market has experienced liquidity constraints, we believe that based on our current liquidity position and our operating cash flows, any lack of liquidity in the ARS market will not have a material impact on our liquidity, financial condition, or cash flows. For information on how we determine the fair value of these securities refer to Note 7, Fair Value of Financial Instruments, of the consolidated condensed financial statements.

The liquidity requirements of our regulated insurance subsidiaries primarily relate to the liabilities associated with their various insurance and investment products, operating expenses, and income taxes. Liabilities arising from insurance and investment products include the payment of policyholder benefits, as well as cash payments in connection with policy surrenders and withdrawals, policy loans, and obligations to redeem funding agreements.

Our insurance subsidiaries maintain investment strategies intended to provide adequate funds to pay benefits and expected surrenders, withdrawals, loans, and redemption obligations without forced sales of investments. In addition, our insurance subsidiaries hold highly liquid, high-quality short-term investment securities and other liquid investment grade fixed maturity securities to fund our expected operating expenses, surrenders, and withdrawals. We were committed as of June 30, 2016 (Successor Company), to fund mortgage loans in the amount of $717.3 million.

Our positive cash flows from operations are used to fund an investment portfolio that provides for future benefit payments. We employ a formal asset/liability program to manage the cash flows of our investment portfolio relative to our long-term benefit obligations. As of June 30, 2016 (Successor Company), we held cash and short-term investments of approximately $539.5 million.

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The following chart includes the cash flows provided by or used in operating, investing, and financing activities for the following periods:

	Successor Company						Predecessor Company
	For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Net cash provided by operating activities	$	270,017		$	292,196		$	148,060
Net cash (used in) provided by investing activities	(2,817,169		)	(625,090		)	33,475
Net cash provided by (used in) financing activities	2,629,937			354,568			(70,918		)
Total	$	82,785		$	21,674		$	110,617

For The Six Months Ended June 30, 2016 (Successor Company)

Net cash provided by operating activities - Cash flows from operating activities are affected by the timing of premiums received, fees received, investment income, and expenses paid. Principal sources of cash include sales of our products and services. We typically generate positive cash flows from operating activities, as premiums and policy fees collected from our insurance and investment products exceed benefit payments and redemptions, and we invest the excess. Accordingly, in analyzing our cash flows we focus on the amount of cash provided by or used in investing and financing activities.

Net cash (used in) provided by investing activities - Changes in cash from investing activities primarily related to the activity in our investment portfolio and the purchase of $2.2 billion of held-to-maturity securities issued by affiliates in conjunction with the GLAIC reinsurance transaction. See Note 3, Reinsurance and Financing Transactions and Note 12, Debt and Other Obligations for additional information on the transaction.

Net cash provided by (used in) financing activities - Changes in cash from financing activities included $278.2 million of outflows from repurchase program borrowings for the six months ended June 30, 2016 (Successor Company) and $1.0 billion of inflows of investment product and universal life net activity for the six months ended June 30, 2016 (Successor Company). Net issuance of non-recourse funding obligations was $2.2 billion during the six months ended June 30, 2016 (Successor Company), which occurred in conjunction with the GLAIC reinsurance transaction. See Note 3, Reinsurance and Financing Transactions and Note 12, Debt and Other Obligations for additional information on the transaction.

Capital Resources

Our primary sources of capital are from retained income from our insurance operations and capital infusions from our parent, PLC. Additionally, we have access to the Credit Facility discussed above.

Captive Reinsurance Companies

Our life insurance subsidiaries are subject to a regulation entitled “Valuation of Life Insurance Policies Model Regulation,” commonly known as “Regulation XXX,” and a supporting guideline entitled “The Application of the Valuation of Life Insurance Policies Model Regulation,” commonly known as “Guideline AXXX.” The regulation and supporting guideline require insurers to establish statutory reserves for term and universal life insurance policies with long-term premium guarantees that are consistent with the statutory reserves required for other individual life insurance policies with similar guarantees. Many market participants believe that these levels of reserves are non-economic. We use captive reinsurance companies to implement reinsurance and capital management actions to satisfy these reserve requirements by financing the non-economic reserves either through the issuance of non-recourse funding obligations by the captives or obtaining Letters of Credit from third-party financial institutions. For more information regarding our use of captives and their impact on our financial statements, please refer to Note 12, Debt and Other Obligations.

Our captive reinsurance companies assume business from affiliates only. Our captives are capitalized to a level we believe is sufficient to support the contractual risks and other general obligations of the respective captive entity. All of our captive reinsurance companies are wholly owned subsidiaries and are located domestically. The captive insurance companies are subject to regulations in the state of domicile.

The National Association of Insurance Commissioners (“NAIC”), through various committees, subgroups and dedicated task forces, is reviewing the use of captives and special purpose vehicles used to transfer insurance risk in relation to existing state laws and regulations, and several committees have adopted or exposed for comment white papers and reports that, if or when implemented, could impose additional requirements on the use of captives and other reinsurers. The Financial Condition (E) Committee of the NAIC recently established a Variable Annuity Issues Working Group to examine company use of variable annuity captives. The Committee has proposed changes in the regulation of variable annuities and variable annuity captives could adversely affect our future financial condition and results of operations.

The Principles Based Reserving Implementation (EX) Task Force of the NAIC, charged with analysis of the adoption of a principles-based reserving methodology, adopted the “conceptual framework” contained in a report issued by Rector & Associates, Inc., dated June 4, 2014 (as modified or supplemented, the “Rector Report”), that contains numerous recommendations

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pertaining to the regulation and use of certain captive reinsurers. Certain high-level recommendations have been adopted and assigned to various NAIC working groups, which working groups are in various stages of discussions regarding recommendations. One recommendation of the Rector Report has been adopted as Actuarial Guideline XLVIII (“AG48”). AG48 sets more restrictive standards on the permitted collateral utilized to back reserves of a captive. Other recommendations in the Rector Report are subject to ongoing comment and revision. It is unclear at this time to what extent the recommendations in the Rector Report, or additional or revised recommendations relating to captive transactions or reinsurance transactions in general, will be adopted by the NAIC. If the recommendations proposed in the Rector Report are implemented, it will likely be difficult for the Company to establish new captive financing arrangements on a basis consistent with past practices. As a result of AG48 and the Rector Report, the implementation of new captive structures in the future may be less capital efficient, may lead to lower product returns and/or increased product pricing or result in reduced sales of certain products. Additionally, in some circumstances AG48 and the implementation of the recommendations in the Rector Report could impact the Company’s ability to engage in certain reinsurance transactions with non-affiliates.

We also use a captive reinsurance company to reinsure risks associated with GMWB and GMDB riders which helps us to manage those risks on an economic basis. In an effort to mitigate the equity market risks relative to our RBC ratio, in the fourth quarter of 2012, PLC established a direct wholly owned subsidiary, Shades Creek Captive Insurance Company (“Shades Creek”), to which we have reinsured GMWB and GMDB riders related to its VA contracts. The purpose of Shades Creek is to reduce the volatility in RBC due to non-economic variables included within the RBC calculation.

During 2012, PLC entered into an intercompany capital support agreement with Shades Creek. The agreement provides through a guarantee that PLC will contribute assets or purchase surplus notes (or cause an affiliate or third party to contribute assets or purchase surplus notes) in amounts necessary for Shades Creek’s regulatory capital levels to equal or exceed minimum thresholds as defined by the agreement. As of June 30, 2016 (Successor Company), Shades Creek maintained capital levels in excess of the required minimum thresholds. The maximum potential future payment amount which could be required under the capital support agreement will be dependent on numerous factors, including the performance of equity markets, the level of interest rates, performance of associated hedges, and related policyholder behavior.

Statutory Capital

A life insurance company’s statutory capital is computed according to rules prescribed by the NAIC, as modified by state law. Generally speaking, other states in which a company does business defer to the interpretation of the domiciliary state with respect to NAIC rules, unless inconsistent with the other state’s regulations. Statutory accounting rules are different from GAAP and are intended to reflect a more conservative view, for example, requiring immediate expensing of policy acquisition costs. The NAIC’s risk-based capital requirements require insurance companies to calculate and report information under a risk-based capital formula. The achievement of long-term growth will require growth in the statutory capital of our insurance subsidiaries. The subsidiaries may secure additional statutory capital through various sources, such as retained statutory earnings or our equity contributions. In general, dividends up to specified levels are considered ordinary and may be paid thirty days after written notice to the insurance commissioner of the state of domicile unless such commissioner objects to the dividend prior to the expiration of such period. Dividends in larger amounts are considered extraordinary and are subject to affirmative prior approval by such commissioner. The maximum amount that would qualify as an ordinary dividend from our insurance subsidiaries in 2016 is approximately $165.6 million.

State insurance regulators and the NAIC have adopted risk-based capital (“RBC”) requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. A company’s risk-based statutory surplus is calculated by applying factors and performing calculations relating to various asset, premium, claim, expense, and reserve items. Regulators can then measure the adequacy of a company’s statutory surplus by comparing it to RBC. We manage our capital consumption by using the ratio of our total adjusted capital, as defined by the insurance regulators, to our company action level RBC (known as the RBC ratio), also as defined by insurance regulators.

Statutory reserves established for VA contracts are sensitive to changes in the equity markets and are affected by the level of account values relative to the level of any guarantees and product design. As a result, the relationship between reserve changes and equity market performance may be non-linear during any given reporting period. Market conditions greatly influence the capital required due to their impact on the valuation of reserves and derivative investments mitigating the risk in these reserves. Risk mitigation activities may result in material and sometimes counterintuitive impacts on statutory surplus and RBC ratio. Notably, as changes in these market and non-market factors occur, both our potential obligation and the related statutory reserves and/or required capital can vary at a non-linear rate.

Our statutory surplus is impacted by credit spreads as a result of accounting for the assets and liabilities on our fixed MVA annuities. Statutory separate account assets supporting the fixed MVA annuities are recorded at fair value. In determining the statutory reserve for the fixed MVA annuities, we are required to use current crediting rates based on U.S. Treasuries. In many capital market scenarios, current crediting rates based on U.S. Treasuries are highly correlated with market rates implicit in the fair value of statutory separate account assets. As a result, the change in the statutory reserve from period to period will likely substantially offset the change in the fair value of the statutory separate account assets. However, in periods of volatile credit markets, actual credit spreads on investment assets may increase or decrease sharply for certain sub-sectors of the overall credit market, resulting in statutory separate account asset market value gains or losses. As actual credit spreads are not fully reflected in current crediting rates based on U.S. Treasuries, the calculation of statutory reserves will not substantially offset the change in fair value of the statutory separate account assets resulting in a change in statutory surplus.

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On January 15, 2016, we closed the reinsurance transaction with GLAIC. We currently estimate that the total capital investment was approximately $589 million, instead of $661 million, as previously estimated and disclosed. The estimated total capital investment decreased primarily due to lower initial risk-based capital than previously estimated and our ability to utilize certain tax benefits sooner than expected.

We cede material amounts of insurance and transfer related assets to other insurance companies through reinsurance. However, notwithstanding the transfer of related assets, we remain liable with respect to ceded insurance should any reinsurer fail to meet the obligations that it assumed. We evaluate the financial condition of our reinsurers and monitor the associated concentration of credit risk. For three and six months ended June 30, 2016 (Successor Company), we ceded premiums to third party reinsurers amounting to $340.6 million and $655.5 million. In addition, we had receivables from reinsurers amounting to $5.2 billion as of June 30, 2016 (Successor Company). We review reinsurance receivable amounts for collectability and establish bad debt reserves if deemed appropriate.

Ratings

Various Nationally Recognized Statistical Rating Organizations (“rating organizations”) review the financial performance and condition of insurers, including our insurance subsidiaries, and publish their financial strength ratings as indicators of an insurer’s ability to meet policyholder and contract holder obligations. These ratings are important to maintaining public confidence in an insurer’s products, its ability to market its products and its competitive position. The following table summarizes the current financial strength ratings of our significant member companies from the major independent rating organizations:

			Standard &
Ratings	A.M. Best	Fitch	Poor’s	Moody’s
Insurance company financial strength rating:
Protective Life Insurance Company	A+	A+	AA-	A2
West Coast Life Insurance Company	A+	A+	AA-	A2
Protective Life and Annuity Insurance Company	A+	A+	AA-	—
Lyndon Property Insurance Company	A-	—	—	—
MONY Life Insurance Company	A+	A+	A+	A2

     Our ratings are subject to review and change by the rating organizations at any time and without notice. A downgrade or other negative action by a ratings organization with respect to the financial strength ratings of our insurance subsidiaries could adversely affect sales, relationships with distributors, the level of policy surrenders and withdrawals, competitive position in the marketplace, and the cost or availability of reinsurance. The rating agencies may take various actions, positive or negative, with respect to the debt and financial strength ratings of PLC and its subsidiaries, including as a result of PLC’s status as a subsidiary of Dai-ichi Life.

On April 28, 2015, Fitch announced a one-notch downgrade of the insurance financial strength ratings of the Company, West Coast Life Insurance Company, Protective Life and Annuity Insurance Company and MONY Life Insurance Company to A from A+ following the downgrade of Japan’s Long-Term Local Currency Issuer Default Rating (IDR) to A from A+. Fitch stated that such life insurance companies cannot be rated above the sovereign currency rating applicable to their ultimate parent company, Dai-ichi Life, based in Japan. The ratings downgrades announced by Fitch did not trigger any requirements for the Company or its affiliates to post collateral or otherwise negatively impact current obligations.

LIABILITIES

Many of our products contain surrender charges and other features that are designed to reward persistency and penalize the early withdrawal of funds. Certain stable value and annuity contracts have market-value adjustments that protect us against investment losses if interest rates are higher at the time of surrender than at the time of issue.

As of June 30, 2016 (Successor Company), we had policy liabilities and accruals of approximately $31.3 billion. Our interest-sensitive life insurance policies have a weighted average minimum credited interest rate of approximately 3.50%.

Contractual Obligations

We enter into various obligations to third parties in the ordinary course of our operations. However, we do not believe that our cash flow requirements can be assessed solely based upon an analysis of these obligations. The most significant factors affecting our future cash flows are our ability to earn and collect cash from our customers, and the cash flows arising from our investment program. Future cash outflows, whether they are contractual obligations or not, will also vary based upon our future needs. Although some outflows are fixed, others depend on future events. Examples of fixed obligations include our obligations to pay principal and interest on fixed-rate borrowings. Examples of obligations that will vary include obligations to pay interest on variable-rate borrowings and insurance liabilities that depend on future interest rates, market performance, or surrender provisions. Many of our obligations are linked to cash-generating contracts. In addition, our operations involve significant expenditures that are not based upon contractual obligations. These include expenditures for income taxes and payroll.

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As of June 30, 2016 (Successor Company), we carried a $9.4 million liability for uncertain tax positions. These amounts are not included in the long-term contractual obligations table because of the difficulty in making reasonably reliable estimates of the occurrence or timing of cash settlements with the respective taxing authorities.

The table below sets forth future maturities of our contractual obligations:

			Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(Dollars In Thousands)
Non-recourse funding obligations(1)	$	5,244,902	$	229,799	$	540,510	$	654,000	$	3,820,593
Stable value products(2)	2,949,925		540,145		1,697,642		701,528		10,610
Operating leases(3)	30,527		4,343		7,598		7,186		11,400
Home office lease(4)	78,622		1,453		77,169		—		—
Mortgage loan and investment commitments	925,169		867,119		58,050		—		—
Repurchase program borrowings(5)	160,002		160,002		—		—		—
Policyholder obligations(6)	41,934,704		1,671,588		3,535,544		3,479,593		33,247,979
Total	$	51,323,851	$	3,474,449	$	5,916,513	$	4,842,307	$	37,090,582

(1) Non-recourse funding obligations include all undiscounted principal amounts owed and expected future interest payments due over the term of the notes. Of the total undiscounted cash flows, $1.8 billion relates to the Golden Gate V transaction. These cash outflows are matched and predominantly offset by the cash inflows Golden Gate V receives from notes issued by a nonconsolidated variable interest entity. Additionally, $3.0 billion relates to the Golden Gate transaction that occurred in Q1 2016. These cash outflows are matched and predominantly offset by the cash inflows Golden Gate receives from notes issued by nonconsolidated entity and third parties. The remaining amounts are associated with the Golden Gate II notes held by third parties as well as certain obligations assumed with the acquisition of MONY Life Insurance Company.

(2) Anticipated stable value products cash flows including interest.

(3) Includes all lease payments required under operating lease agreements.

(4) The lease payments shown assume we exercise our option to purchase the building at the end of the lease term. Additionally, the payments due by the periods above were computed based on the terms of the renegotiated lease agreement, which was entered in December 2013.

(5) Represents secured borrowings as part of our repurchase program as well as related interest.

(6) Estimated contractual policyholder obligations are based on mortality, morbidity, and lapse assumptions comparable to our historical experience, modified for recent observed trends. These obligations are based on current balance sheet values and include expected interest crediting, but do not incorporate an expectation of future market growth, or future deposits. Due to the significance of the assumptions used, the amounts presented could materially differ from actual results. As variable separate account obligations are legally insulated from general account obligations, the variable separate account obligations will be fully funded by cash flows from variable separate account assets. We expect to fully fund the general account obligations from cash flows from general account investments.

FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB guidance defines fair value for GAAP and establishes a framework for measuring fair value as well as a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. The term “fair value” in this document is defined in accordance with GAAP. The standard describes three levels of inputs that may be used to measure fair value. For more information, see Note 7, Fair Value of Financial Instruments.

OFF-BALANCE SHEET ARRANGEMENTS

We have entered into operating leases that do not result in an obligation being recorded on the balance sheet. Refer to Note 13, Commitments and Contingencies, of the consolidated financial statements for more information.

MARKET RISK EXPOSURES

Our financial position and earnings are subject to various market risks including changes in interest rates, the yield curve, spreads between risk-adjusted and risk-free interest rates, foreign currency rates, used vehicle prices, and equity price risks and issuer defaults. We analyze and manage the risks arising from market exposures of financial instruments, as well as other risks, through an integrated asset/liability management process. Our asset/liability management programs and procedures involve the monitoring of asset and liability durations for various product lines; cash flow testing under various interest rate scenarios; and the continuous rebalancing of assets and liabilities with respect to yield, credit and market risk, and cash flow characteristics. These programs also incorporate the use of derivative financial instruments primarily to reduce our exposure to interest rate risk, inflation risk, currency exchange risk, volatility risk, and equity market risk. See Note 8, Derivative Financial Instruments to the consolidated condensed financial statements included in this report for additional information on our financial instruments.

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The primary focus of our asset/liability program is the management of interest rate risk within the insurance operations. This includes monitoring the duration of both investments and insurance liabilities to maintain an appropriate balance between risk and profitability for each product category, and for us as a whole. It is our policy to maintain asset and liability durations within one year of one another, although, from time to time, a broader interval may be allowed.

We are exposed to credit risk within our investment portfolio and through derivative counterparties. Credit risk relates to the uncertainty of an obligor’s continued ability to make timely payments in accordance with the contractual terms of the instrument or contract. We manage credit risk through established investment policies which attempt to address quality of obligors and counterparties, credit concentration limits, diversification requirements, and acceptable risk levels under expected and stressed scenarios. Derivative counterparty credit risk is measured as the amount owed to us, net of collateral held, based upon current market conditions. In addition, we periodically assess exposure related to potential payment obligations between us and our counterparties. We minimize the credit risk in derivative financial instruments by entering into transactions with high quality counterparties, (A-rated or higher at the time we enter into the contract), and we maintain credit support annexes with certain of those counterparties.

We utilize a risk management strategy that includes the use of derivative financial instruments. Derivative instruments expose us to credit market and basis risk. Such instruments can change materially in value from period- to-period. We minimize our credit risk by entering into transactions with highly rated counterparties. We manage the market and basis risks by establishing and monitoring limits as to the types and degrees of risk that may be undertaken. We monitor our use of derivatives in connection with our overall asset/liability management programs and procedures. In addition, all derivative programs are monitored by our risk management department.

Derivative instruments that are used as part of our interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate options. Our inflation risk management strategy involves the use of swaps that require us to pay a fixed rate and receive a floating rate that is based on changes in the Consumer Price Index (“CPI”).

We may use the following types of derivative contracts to mitigate our exposure to certain guaranteed benefits related to variable annuity, fixed indexed annuity, and indexed universal life contracts:

•Foreign Currency Futures

•Variance Swaps

•Interest Rate Futures

•Equity Options

•Equity Futures

•Credit Derivatives

•Interest Rate Swaps

•Interest Rate Swaptions

•Volatility Futures

•Volatility Options

•Funds Withheld Agreement

•Total Return Swaps

Other Derivatives

Certain of our subsidiaries have derivatives with PLC. These derivatives consist of an interest support agreement, YRT premium support arrangements, and portfolio maintenance agreements with PLC.

We have a funds withheld account that consists of various derivative instruments held by us that is used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument.

We believe that our asset/liability management programs and procedures and certain product features provide protection against the effects of changes in interest rates under various scenarios. Additionally, we believe our asset/liability management programs and procedures provide sufficient liquidity to enable us to fulfill our obligation to pay benefits under our various insurance and deposit contracts. However, our asset/liability management programs and procedures incorporate assumptions about the relationship between short-term and long-term interest rates (i.e., the slope of the yield curve), relationships between risk-adjusted and risk-free interest rates, market liquidity, spread movements, implied volatility, policyholder behavior, and other factors, and the effectiveness of our asset/liability management programs and procedures may be negatively affected whenever actual results differ from those assumptions.

In the ordinary course of our commercial mortgage lending operations, we may commit to provide a mortgage loan before the property to be mortgaged has been built or acquired. The mortgage loan commitment is a contractual obligation to fund a mortgage loan when called upon by the borrower. The commitment is not recognized in our financial statements until the commitment is actually funded. The mortgage loan commitment contains terms, including the rate of interest, which may be different than prevailing interest rates. As of June 30, 2016 (Successor Company), we had outstanding mortgage loan commitments of $717.3 million at an average rate of 4.2%.

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Impact of continued low interest rate environment

Significant changes in interest rates expose us to the risk of not realizing anticipated spreads between the interest rate earned on investments and the interest rate credited to in-force policies and contracts. In addition, certain of our insurance and investment products guarantee a minimum guaranteed interest rate (“MGIR”). In periods of prolonged low interest rates, the interest spread earned may be negatively impacted to the extent our ability to reduce policyholder crediting rates is limited by the guaranteed minimum credited interest rates. Additionally, those policies without account values may exhibit lower profitability in periods of prolonged low interest rates due to reduced investment income.

The table below presents account values by range of current minimum guaranteed interest rates and current crediting rates for our universal life and deferred fixed annuity products as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company):

Credited Rate Summary

As of June 30, 2016 (Successor Company)

				1-50 bps			More than
Minimum Guaranteed Interest Rate	At			above			50 bps
Account Value	MGIR			MGIR			above MGIR			Total
	(Dollars In Millions)
Universal Life Insurance
>2% - 3%	$	200		$	1,077		$	2,008		$	3,285
>3% - 4%	4,034			1,194			11			5,239
>4% - 5%	1,958			14			—			1,972
>5% - 6%	212			—			—			212
Subtotal	6,404			2,285			2,019			10,708
Fixed Annuities
1%	$	665		$	164		$	132		$	961
>1% - 2%	561			491			121			1,173
>2% - 3%	2,074			179			11			2,264
>3% - 4%	273			—			—			273
>4% - 5%	281			—			—			281
>5% - 6%	3			—			—			3
Subtotal	3,857			834			264			4,955
Total	$	10,261		$	3,119		$	2,283		$	15,663
Percentage of Total	66		%	20		%	14		%	100		%

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Credited Rate Summary

As of December 31, 2015 (Successor Company)

				1-50 bps			More than
Minimum Guaranteed Interest Rate	At			above			50 bps
Account Value	MGIR			MGIR			above MGIR			Total
	(Dollars In Millions)
Universal Life Insurance
>2% - 3%	$	197		$	1,033		$	2,016		$	3,246
>3% - 4%	3,648			1,603			27			5,278
>4% - 5%	1,983			14			—			1,997
>5% - 6%	215			—			—			215
Subtotal	6,043			2,650			2,043			10,736
Fixed Annuities
1%	$	663		$	169		$	138		$	970
>1% - 2%	569			496			131			1,196
>2% - 3%	2,083			248			11			2,342
>3% - 4%	278			—			—			278
>4% - 5%	287			—			—			287
>5% - 6%	3			—			—			3
Subtotal	3,883			913			280			5,076
Total	$	9,926		$	3,563		$	2,323		$	15,812
Percentage of Total	63		%	23		%	14		%	100		%

We are active in mitigating the impact of a continued low interest rate environment through product design, as well as adjusting crediting rates on current in-force policies and contracts. We also manage interest rate and reinvestment risks through our asset/liability management process. Our asset/liability management programs and procedures involve the monitoring of asset and liability durations; cash flow testing under various interest rate scenarios; and the regular rebalancing of assets and liabilities with respect to yield, credit and market risk, and cash flow characteristics. These programs also incorporate the use of derivative financial instruments primarily to reduce our exposure to interest rate risk, inflation risk, currency exchange risk, volatility risk, and equity market risk.

IMPACT OF INFLATION

Inflation increases the need for life insurance. Many policyholders who once had adequate insurance programs may increase their life insurance coverage to provide the same relative financial benefit and protection. Higher interest rates may result in higher sales of certain of our investment products.

The higher interest rates that have traditionally accompanied inflation could also affect our operations. Policy loans increase as policy loan interest rates become relatively more attractive. As interest rates increase, disintermediation of stable value and annuity account balances and individual life policy cash values may increase. The market value of our fixed-rate, long-term investments may decrease, we may be unable to implement fully the interest rate reset and call provisions of our mortgage loans, and our ability to make attractive mortgage loans, including participating mortgage loans, may decrease. In addition, participating mortgage loan income may decrease. The difference between the interest rate earned on investments and the interest rate credited to life insurance and investment products may also be adversely affected by rising interest rates. During the periods covered by this report, we believe inflation has not had a material impact on our business.

RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 2, Summary of Significant Accounting Policies, to the consolidated condensed financial statements for information regarding recently issued accounting standards.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

See Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Liquidity and Capital Resources” and Part II, Item 1A, Risk Factors, of this report for market risk disclosures.

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Item 4.Controls and Procedures

(a)Disclosure controls and procedures

In order to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized, and reported on a timely basis, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on their evaluation as of the end of the period covered by this Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective. It should be noted that any system of controls, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of any control system is based in part upon certain judgments, including the costs and benefits of controls and the likelihood of future events. Because of these and other inherent limitations of control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within the Company have been detected.

As described in Note 3 to the consolidated condensed financial statements set forth in this periodic report on Form 10-Q, the Company entered into a reinsurance transaction with Genworth Life and Annuity Insurance Company effective January 1, 2016. The Company performed due diligence on this transaction prior to the effective date and developed a reasonable level of assurance that the disclosure controls and procedures for the related administrative systems and processes were effective. 

(b)Changes in internal control over financial reporting

There have been no changes in the Company’s internal control over financial reporting during the three months ended June 30, 2016 (Successor Company), that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s internal controls exist within a dynamic environment and the Company continually strives to improve its internal controls and procedures to enhance the quality of its financial reporting.

PART II

Item 1A.  Risk Factors

The operating results of companies in the insurance industry have historically been subject to significant fluctuations. The factors which could affect the Company’s future results include, but are not limited to, general economic conditions and known trends and uncertainties. In addition to other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, Risk Factors, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company), which could materially affect the Company’s business, financial condition, or future results of operations.

The Company is exposed to risks related to natural and man-made disasters and catastrophes, diseases, epidemics, pandemics, malicious acts, cyber-attacks, terrorist acts and climate change, which could adversely affect the Company’s operations and results.

While the Company has obtained insurance, implemented risk management and contingency plans, and taken preventive measures and other precautions, no predictions of specific scenarios can be made nor can assurance be given that there are not scenarios that could have an adverse effect on the Company. A natural or man-made disaster or catastrophe, including a severe weather or geological event such as a storm, tornado, fire, flood, or earthquake, disease, epidemic, pandemic, malicious act,cyber-attack, terrorist act, or the occurrence of climate change, could cause the Company’s workforce to be unable to engage in operations at one or more of its facilities or result in short or long-term interruptions in the Company’s business operations, any of which could be material to the Company’s operating results for a particular period. In addition, such events could adversely affect the mortality, morbidity, or other experience of the Company or its reinsurers and have a significant negative impact on the Company. In addition, claims arising from the occurrence of such events or conditions could have a material adverse effect on the Company’s financial condition and results of operations. Such events or conditions could also have an adverse effect on lapses and surrenders of existing policies, as well as sales of new policies. The Company’s risk management efforts and other precautionary plans and activities may not adequately predict the impact on the Company from such events.

In addition, such events or conditions could result in a decrease or halt in economic activity in large geographic areas, adversely affecting the marketing or administration of the Company’s business within such geographic areas and/or the general economic climate, which in turn could have an adverse effect on the Company. Such events or conditions could also result in additional regulation or restrictions on the Company in the conduct of its business. The possible macroeconomic effects of such events or conditions could also adversely affect the Company’s asset portfolio, as well as many other aspects of the Company’s business, financial condition, and results of operations.

The Company’s results and financial condition may be negatively affected should actual experience differ from management’s assumptions and estimates.

In the conduct of business, the Company makes certain assumptions regarding mortality, morbidity, persistency, expenses, interest rates, equity market volatility, tax liability, business mix, frequency and severity of claims, contingent liabilities, investment performance, and other factors appropriate to the type of business it expects to experience in future periods. These assumptions are also used to estimate the amounts of deferred policy acquisition costs, policy liabilities and accruals, future earnings, and

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various components of the Company’s balance sheet. These assumptions are used in the operation of the Company’s business in making decisions crucial to the success of the Company, including the pricing of products and expense structures relating to products. The Company’s actual experience, as well as changes in estimates, is used to prepare the Company’s financial statements. To the extent the Company’s actual experience and changes in estimates differ from original estimates, the Company’s financial condition may be affected.     

Mortality, morbidity, and casualty expectations incorporate assumptions about many factors, including for example, how a product is distributed, for what purpose the product is purchased, the mix of customers purchasing the products, persistency and lapses, future progress in the fields of health and medicine, and the projected level of used vehicle values. Actual mortality, morbidity, and/or casualty experience may differ from expectations. In addition, continued activity in the viatical, stranger-owned, and/or life settlement industry could cause the Company’s level of lapses to differ from its assumptions about persistency and lapses, which could negatively impact the Company’s performance.

The calculations the Company uses to estimate various components of its balance sheet and statements of income are necessarily complex and involve analyzing and interpreting large quantities of data. The Company currently employs various techniques for such calculations and relies, in certain instances, on third parties to make or assist in making such calculations. From time to time it develops and implements more sophisticated administrative systems and procedures capable of facilitating the calculation of more precise estimates. The systems and procedures that the Company develops, and the Company's reliance upon third parties, could result in errors in the calculations that impact our financial statements or affect our financial condition.

Assumptions and estimates involve judgment, and by their nature are imprecise and subject to changes and revisions over time. Accordingly, the Company’s results may be affected, positively or negatively, from time to time, by actual results differing from assumptions, by changes in estimates, and by changes resulting from implementing more sophisticated administrative systems and procedures that facilitate the calculation of more precise estimates.

The Company may not realize its anticipated financial results from its acquisitions strategy.

The Company’s acquisitions of companies and coinsurance of blocks of insurance business have increased its earnings. However, there can be no assurance that the Company will have future suitable opportunities for, or sufficient capital available to fund, such transactions. If our competitors have access to capital on more favorable terms or at a lower cost, our ability to compete for acquisitions may be diminished. In addition, there can be no assurance that the Company will be able to realize any projected operating efficiencies or realize the anticipated financial results from such transactions.

The Company may be unable to complete an acquisition transaction. Completion of an acquisition transaction may be more costly or take longer than expected, or may have a different or more costly financing structure than initially contemplated. In addition, the Company may not be able to complete or manage multiple acquisition transactions at the same time, or the completion of such transactions may be delayed or be more costly than initially contemplated. The Company or other parties to the transaction may be unable to obtain regulatory approvals required to complete an acquisition transaction. If the Company identifies and completes suitable acquisitions, it may not be able to successfully integrate the business in a timely or cost-effective manner, or retain key personnel and business relationships necessary to achieve anticipated financial results. In addition, there may be unforeseen liabilities that arise in connection with businesses or blocks of insurance business that the Company acquires. Additionally, in connection with its acquisition transactions that involve reinsurance, the Company assumes, or otherwise becomes responsible for, the obligations of policies and other liabilities of other insurers. Any regulatory, legal, financial, or other adverse development affecting the other insurer could also have an adverse effect on the Company.

The Company’s use of derivative financial instruments within its risk management strategy may not be effective or sufficient.

The Company uses derivative financial instruments within its risk management strategy to mitigate risks to which it is exposed, including the adverse effects of domestic and/or international credit and/or equity market and/or interest rate levels, foreign exchange risks, or volatility on its fixed indexed annuity and variable annuity products with guaranteed benefit features. These derivative financial instruments may not effectively offset the changes in the carrying value of the guarantees due to, among other things, the time lag between changes in the value of such guarantees and the changes in the value of the derivative financial instruments purchased by the Company, extreme credit and/or equity market and/or interest rate levels or volatility, contract holder behavior that differs from the Company’s expectations, and divergence between the performance of the underlying funds of such variable annuity products with guaranteed benefit features and the indices utilized by the Company in estimating its exposure to such guarantees.

The Company may also use derivative financial instruments within its risk management strategy to mitigate risks arising from its exposure to investments in individual issuers or sectors of issuers and to mitigate the adverse effects of distressed domestic and/or international credit and/or equity markets and/or interest rate levels or volatility on its overall financial condition or results of operations.

The use of derivative financial instruments by the Company may have an adverse impact on the level of statutory capital and the risk-based capital ratios of the Company’s insurance subsidiaries. The Company employs strategies in the use of derivative financial instruments that are intended to mitigate such adverse impacts, but the Company’s strategies may not be effective.

The Company may also choose not to hedge, in whole or in part, these or other risks that it has identified, due to, for example, the availability and/or cost of a suitable derivative financial instrument or, in reaction to extreme credit, equity market and/or interest rate levels or volatility. Additionally, the Company’s estimates and assumptions made in connection with its use of any derivative financial instrument may fail to reflect or correspond to its actual long-term exposure in respect to identified risks.

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Derivative financial instruments held or purchased by the Company may also otherwise be insufficient to hedge the risks in relation to the Company’s obligations. In addition, the Company may fail to identify risks, or the magnitude thereof, to which it is exposed. The Company is also exposed to the risk that its use of derivative financial instruments within its risk management strategy may not be properly designed and/or may not be properly implemented as designed.

The Company is also subject to the risk that its derivative counterparties or clearinghouse may fail or refuse to meet their obligations to the Company under derivative financial instruments. If the Company’s derivative counterparties or clearinghouse fail or refuse to meet their obligations to the Company in this regard, the Company’s efforts to mitigate risks to which it is subject through the use of such derivative financial instruments may prove to be ineffective or inefficient.

The above factors, either alone or in combination, may have a material adverse effect on the Company’s financial condition and results of operations.

Disruption of the capital and credit markets could negatively affect the Company’s ability to meet its liquidity and financing needs.

The Company needs liquidity to meet its obligations to its policyholders and its debt holders, and to pay its operating expenses. The Company’s sources of liquidity include insurance premiums, annuity considerations, deposit funds, cash flow from investments and assets, and other income from its operations. In normal credit and capital market conditions, the Company’s sources of liquidity also include a variety of short and long-term borrowing arrangements, including issuing debt securities.

The Company’s business is dependent on the capital and credit markets, including confidence in such markets. When the credit and capital markets are disrupted and confidence is eroded the Company may not be able to borrow money, including through the issuance of debt securities, or the cost of borrowing or raising capital may be prohibitively high. If the Company’s internal sources of liquidity are inadequate during such periods, the Company could suffer negative effects from not being able to borrow money, or from having to do so on unfavorable terms. The negative effects could include being forced to sell assets at a loss, a lowering of the Company’s credit ratings and the financial strength ratings of its insurance subsidiaries, and the possibility that customers, lenders, ratings agencies, or regulators develop a negative perception of the Company’s financial prospects, which could lead to further adverse effects on the Company.

The Company could be adversely affected by an inability to access its credit facility.

The Company relies on its credit facility as a potential source of liquidity. The availability of these funds could be critical to the Company’s credit and financial strength ratings and its ability to meet obligations, particularly when alternative sources of credit or liquidity are either difficult to access or costly. The availability of the Company’s credit facility is dependent in part on the ability of the lenders to provide funds under the facility. The Company’s credit facility contains various affirmative and negative covenants and events of default, including covenants requiring the Company to maintain a specified minimum consolidated net worth. The Company’s right to make borrowings under the facility is subject to the fulfillment of certain conditions, including its compliance with all covenants. The Company’s failure to comply with the covenants in the credit facility could restrict its ability to access this credit facility when needed. The Company’s inability to access some or all of the line of credit under the credit facility could have a material adverse effect on its financial condition and results of operations.

The Company could be adversely affected by an inability to access FHLB lending.

The Company is a member of the Federal Home Loan Bank (the “FHLB”) of Cincinnati and the FHLB of New York. Membership provides the Company with access to FHLB financial services, including advances that provide an attractive funding source for short-term borrowing and for the sale of funding agreements. In recent years, the Federal Housing Finance Agency (“FHFA”) has released advisory bulletins addressing concerns associated with insurance company (as opposed to federally-backed bank) access to FHLB financial services, the state insurance regulatory framework and FHLB creditor status in the event of member insurer insolvency. In response to FHFA actions, FHLB members, the NAIC and trade groups developed model legislation that would subject insurers accessing FHLB funding to collateral requirements similar to those applicable to federally insured depository institutions. While members of the FHLB and NAIC were not able to agree on certain points, legislation based on this model has been introduced and adopted in several states and is not being opposed by the NAIC. It is unclear at this time whether or to what extent additional or new legislation or regulatory action regarding continued access to FHLB financial services will be enacted or adopted. Any developments that limit access to FHLB financial services could have a material adverse effect on the Company.

NAIC actions, pronouncements and initiatives may affect the Company’s product profitability, reserve and capital requirements, financial condition or results of operations.

Although some NAIC pronouncements, particularly as they affect accounting, reserving and risk-based capital issues, may take effect automatically without affirmative action taken by the states, the NAIC is not a governmental entity and its processes and procedures do not comport with those to which governmental entities typically adhere. Therefore, it is possible that actions could be taken by the NAIC that become effective without the procedural safeguards that would be present if governmental action was required. In addition, with respect to some financial regulations and guidelines, states sometimes defer to the interpretation of the insurance department of a non-domiciliary state. Neither the action of the domiciliary state nor the action of the NAIC is binding on a non-domiciliary state. Accordingly, a state could choose to follow a different interpretation. The Company is also subject to the risk that compliance with any particular regulator’s interpretation of a legal, accounting or actuarial issue may result in non-compliance with another regulator’s interpretation of the same issue, particularly when compliance is judged in hindsight. There is an additional risk that any particular regulator’s interpretation of a legal, accounting or actuarial issue may change over time to the Company’s detriment, or that changes to the overall legal or market environment may cause the Company to change

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its practices in ways that may, in some cases, limit its growth or profitability. Statutes, regulations, interpretations, and instructions may be applied with retroactive impact, particularly in areas such as accounting, reserve and risk-based capital requirements. Also, regulatory actions with prospective impact can potentially have a significant impact on currently sold products.

The NAIC has announced more focused inquiries on certain matters that could have an impact on the Company’s financial condition and results of operations. Such inquiries concern, for example, examination of statutory accounting disclosures for separate accounts, insurer use of captive reinsurance companies, variable annuity reserves and capital treatment, certain aspects of insurance holding company reporting and disclosure, reserving for universal life products with secondary guarantees, reinsurance, cybersecurity practices, and risk-based capital calculations. In addition, the NAIC continues to consider various initiatives to change and modernize its financial and solvency requirements and regulations. It has adopted a principles-based reserving methodology for life insurance and annuity reserves, but additional formulas relevant to the new standard are being developed. The NAIC is also considering changes to accounting and risk-based capital regulations, governance practices of insurers, and other items. Some of these proposed changes, including implementing a principles-based reserving methodology, require the approval of state legislatures. The Company cannot currently estimate what impact these more focused inquiries or proposed changes, if they occur, will have on its product mix, product profitability, reserve and capital requirements, financial condition or results of operations.

The Company’s use of captive reinsurance companies to finance statutory reserves related to its term and universal life products and to reduce volatility affecting its variable annuity products may be limited or adversely affected by regulatory action, pronouncements and interpretations.

The Company currently uses affiliated captive reinsurance companies in various structures to finance certain statutory reserves based on a regulation entitled “Valuation of Life Insurance Policies Model Regulation,” commonly known as “Regulation XXX,” and a supporting guideline entitled “The Application of the Valuation of Life Insurance Policies Model Regulation,” commonly known as “Guideline AXXX”, which are associated with term life insurance and universal life insurance with secondary guarantees, respectively, as well as to reduce the volatility in statutory risk-based capital associated with certain guaranteed minimum withdrawal and death benefit riders associated with the Company’s variable annuity products. The NAIC, through various committees, subgroups and dedicated task forces, is reviewing the use of captives and special purpose vehicles used to transfer insurance risk in relation to existing state laws and regulations, and several committees have adopted or exposed for comment white papers and reports that, if or when implemented, could impose additional requirements on the use of captives and other reinsurers (including traditional reinsurers) (the “Affected Business”). In addition, the Principles Based Reserving Implementation (EX) Task Force of the NAIC, charged with analysis of the adoption of a principles-based reserving methodology, adopted the “conceptual framework” contained in a report issued by Rector & Associates, Inc., dated June 4, 2014 (as modified or supplemented, the “Rector Report”), that includes numerous recommendations pertaining to the regulation and use of certain captive reinsurers. Certain high-level recommendations have been adopted and assigned to various NAIC working groups, which working groups are in various stages of discussions regarding recommendations. One recommendation of the Rector Report has been adopted as Actuarial Guideline XLVIII (“AG48”). AG48 sets more restrictive standards on the permitted collateral utilized to back reserves of a captive. Other recommendations in the Rector Report are subject to ongoing comment and revision. It is unclear at this time to what extent the recommendations in the Rector Report, or additional or revised recommendations relating to captive transactions or reinsurance transactions in general, will be adopted by the NAIC. If the recommendations proposed in the Rector Report are implemented, it will likely be difficult for the Company to establish new captive financing arrangements on a basis consistent with past practices. As a result of AG48 and the Rector Report, the implementation of new captive structures in the future may be less capital efficient, may lead to lower product returns and/or increased product pricing or result in reduced sales of certain products. Additionally, in some circumstances AG48 and the implementation of the recommendations in the Rector Report could impact the Company’s ability to engage in certain reinsurance transactions with non-affiliates.    

The Financial Condition (E) Committee of the NAIC established a Variable Annuity Issues Working Group ("VAIWG") in 2015 to oversee the NAIC’s efforts to study and address regulatory issues resulting in variable annuity captive reinsurance transactions. The VAIWG developed a Framework for Change (the “Framework”) which was adopted in 2015. The Framework suggests numerous changes to current NAIC rules and regulations that are intended to decrease incentives for insurers to establish variable annuities captives, which changes could potentially be applied to both in-force and new business. The Framework proposes that various NAIC groups consider and adopt recommended changes to current rules and regulations (with a targeted effective date in 2017) and that, upon adoption, domestic regulators request that insurers ceding business to variable annuity captives recapture such business and dissolve such captives. The VAIWG expects or receive a draft of recommendations for changes to current rules and regulations in August 2016. If the proposals set forth in the Framework are adopted, changes in the regulation of variable annuities and variable annuity captives could adversely affect our future financial condition and results of operations.

The NAIC adopted revisions to the Part A Laws and Regulations Preamble (the "Preamble") of the NAIC Financial Regulation Standards and Accreditation Program that will include within the definition of “multi-state insurer” certain insurer-owned captives and special purpose vehicles that are single-state licensed but assume reinsurance from cedants operating in multiple states. The revised definition will subject certain captives, including XXX/AXXX captives, variable annuity and long-term care captives, to all of the accreditation standards applicable to other traditional multi-state insurers, including standards related to capital and surplus requirements, risk-based capital requirements, investment laws and credit for reinsurance laws. Although we do not expect the revised definition to affect our existing life insurance captives (or our ability to engage in life insurance captive transactions in the future), such application will likely prevent us from engaging in variable annuity captive transactions on the same or a similar basis as in the past and, if applied retroactively, would likely cause us to recapture business from and unwind our existing variable annuity captive (“VA Captive”).

While the recapture of business from our existing VA Captive, caused either by actions of the VAIWG or the effect of the Preamble, would not have a material adverse effect on the Company given current market conditions, in the future the Company

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could experience fluctuations in its risk-based capital ratio due to market volatility if it were prohibited from engaging in similar transactions or required to unwind its existing VA Captive, which could adversely affect our future financial condition and results of operations.

Any regulatory action or changes in interpretation that materially adversely affects the Company’s use or materially increases the Company’s cost of using captives or reinsurers for the Affected Business, either retroactively or prospectively, could have a material adverse impact on the Company’s financial condition or results of operations. If the Company were required to discontinue its use of captives for intercompany reinsurance transactions on a retroactive basis, adverse impacts would include early termination fees payable with respect to certain structures, diminished capital position and higher cost of capital. Additionally, finding alternative means to support policy liabilities efficiently is an unknown factor that would be dependent, in part, on future market conditions and the Company’s ability to obtain required regulatory approvals. On a prospective basis, discontinuation of the use of captives could impact the types, amounts and pricing of products offered by the Company’s insurance subsidiaries.

Laws, regulations and initiatives related to unreported deaths and unclaimed property and death benefits may result in operational burdens, fines, unexpected payments or escheatments.

Since 2012, various states have enacted laws that require life insurers to search for unreported deaths. The National Conference of Insurance Legislators (“NCOIL”) has adopted the Model Unclaimed Life Insurance Benefits Act (the “Unclaimed Benefits Act”) and legislation or regulations have been enacted in numerous states that are similar to the Unclaimed Benefits Act, although each state’s version differs in some respects. The Unclaimed Benefits Act, if adopted by any state, imposes new requirements on insurers to periodically compare their life insurance and annuity contracts and retained asset accounts against the U.S. Social Security Administration's Death Master File or similar databases (a "Death Database"), investigate any potential matches to confirm the death and determine whether benefits are due, and to attempt to locate the beneficiaries of any benefits that are due or, if no beneficiary can be located, escheat the benefit to the state as unclaimed property. Other states in which the Company does business may also consider adopting legislation similar to the Unclaimed Benefits Act. The Company cannot predict whether such legislation will be proposed or enacted in additional states. Additionally, the NAIC Unclaimed Life Insurance Benefits (A) Working Group is developing a model unclaimed property law that overlaps with the NCOIL-based laws already adopted in numerous states.

The Uniform Laws Commission has adopted revisions to the Uniform Unclaimed Property Act in a manner likely to impact state unclaimed property laws and requirements, though it is not clear at this time to what extent or whether requirements will conflict with otherwise imposed search requirements. Other life insurance industry associations and regulatory associations are also considering these matters. Certain states have amended or may amend their unclaimed property laws to require insurers to compare in-force and certain terminated life insurance policies, annuity contracts, and retained asset accounts against a Death Database, to investigate potential matches to determine whether the named insured is deceased, to attempt to locate and pay beneficiaries any unclaimed benefits required to be paid, and, if no beneficiary can be located, to escheat policy benefits to the appropriate state as unclaimed property. The enactment of such unclaimed property laws, may require the Company to incur significant expenses, including benefits with respect to terminated policies for which no reserves are currently held and unanticipated operational expenses. Any of the foregoing could have a material adverse effect on the Company's financial condition and results of operations.

A number of state treasury departments and administrators of unclaimed property have audited life insurance companies for compliance with unclaimed property laws. The focus of the audits has been to determine whether there have been maturities of policies or contracts, or policies that have exceeded limiting age with respect to which death benefits or other payments under the policies should be treated as unclaimed property that should be escheated to the state. In addition, the audits have sought to identify unreported deaths of insureds. There is no clear basis in previously existing law for treating an unreported death as giving rise to a policy benefit that would be subject to unclaimed property procedures. A number of life insurers, however, have entered into resolution agreements with state treasury departments and administrators of unclaimed property under which the life insurers agreed to procedures for comparing their previously issued life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest, in some cases at a negotiated rate, to the state if the beneficiary could not be found, and paying penalties to the state, if required. The amounts publicly reported to have been paid to beneficiaries and/or escheated to the states have been substantial.

The NAIC has established an Investigations of Life/Annuity Claims Settlement Practices (D) Task Force to coordinate targeted multi-state examinations of life insurance companies on claims settlement practices. The state insurance regulators on the Task Force have initiated targeted multi-state examinations of life insurance companies with respect to the companies’ claims paying practices and use of a Death Database to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement systems and procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid substantial administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements.

Certain of the Company’s subsidiaries as well as certain other insurance companies from whom the Company has coinsured blocks of life insurance and annuity policies are subject to unclaimed property audits and/or targeted multistate examinations by insurance regulators similar to those described above. It is possible that the audits, examinations and/or the enactment of state

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laws similar to the Unclaimed Benefits Act could result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, payment of administrative penalties and/or examination fees to state authorities, and changes to the Company’s procedures for identifying unreported deaths and escheatment of abandoned property. It is possible any such additional payments and any costs related to changes in Company procedures could materially impact the Company’s financial results from operations. It is also possible that life insurers, including the Company, may be subject to claims, regulatory actions, law enforcement actions, and civil litigation arising from their prior business practices, unclaimed property practices or related audits and examinations. Any resulting liabilities, payments or costs, including initial and ongoing costs of changes to the Company’s procedures or systems, could be significant and could have a material adverse effect on the Company’s financial condition or results of operations.

During December 2012, the West Virginia Treasurer filed actions against the Company’s subsidiaries Protective Life Insurance Company and West Coast Life Insurance Company in West Virginia state court (State of West Virginia ex rel. John D. Perdue v. Protective Life Insurance Company, State of West Virginia ex rel. John D. Perdue v. West Coast Life Insurance Company; Defendants’ Motions to Dismiss granted on December 27, 2013; Notice of Appeal filed on January 27, 2014; dismissal reversed by the West Virginia Supreme Court of Appeals on June 16, 2015; Petition for Rehearing filed by Defendant insurance companies denied on September 21, 2015). The actions, which also name numerous other life insurance companies, allege that the companies violated the West Virginia Uniform Unclaimed Property Act, seek to compel compliance with the Act, and seek payment of unclaimed property, interest, and penalties. While the legal theory or theories that may give rise to liability in the West Virginia Treasurer litigation are uncertain, it is possible that other jurisdictions may pursue similar actions. The Company does not currently believe that losses, if any, arising from the West Virginia Treasurer litigation will be material. The Company cannot, however, predict whether other jurisdictions will pursue similar actions or, if they do, whether such actions will have a material impact on the Company’s financial results from operations.

Laws, rules and regulations promulgated in connection with the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act may adversely affect the results of operations or financial condition of the Company.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) enacted in July 2010 made sweeping changes to the regulation of financial services entities, products and markets. Certain provisions of Dodd-Frank are or may become applicable to the Company, its competitors or those entities with which the Company does business. Such provisions include, but are not limited to the following: the establishment of consolidated federal regulation and resolution authority over systemically important financial services firms, the establishment of the Federal Insurance Office, changes to the regulation and standards applicable to broker-dealers and investment advisors, changes to the regulation of reinsurance, changes to regulations affecting the rights of shareowners, and the imposition of additional regulation over credit rating agencies, and the imposition of concentration limits on financial institutions that restrict the amount of credit that may be extended to a single person or entity. Since the enactment of Dodd-Frank, many regulations have been enacted and others are likely to be adopted in the future that will have an impact upon the Company. Dodd-Frank also created the Financial Stability Oversight Council (the “FSOC”), which has issued a final rule and interpretive guidance setting forth the methodology by which it will determine whether a non-bank financial company is a systemically important financial institution (“SIFI”). A non- bank financial company, such as the Company, that is designated as a SIFI by the FSOC will become subject to supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Company is not currently supervised by the Federal Reserve as a SIFI. Such supervision could impact the Company’s requirements relating to capital, liquidity, stress testing, limits on counterparty credit exposure, compliance and governance, early remediation in the event of financial weakness and other prudential matters, and in other ways the Company currently cannot anticipate. FSOC-designated non-bank financial companies will also be required to prepare resolution plans, so- called “living wills,” that set out how they could most efficiently be liquidated if they endangered the U.S. financial system or the broader economy. The FSOC has conducted multiple rounds of SIFI designation consideration. However, this process is still new, and the FSOC continues to make changes to its process for designating a company as a SIFI. The FSOC has made its initial SIFI designations, and the Company was not designated as such. However, the Company could be considered and designated at any time. Because the process is in its initial stages, the Company is at this time unable to predict the impact on an entity that is supervised as a SIFI by the Federal Reserve Board. The Company is not able to predict whether the capital requirements or other requirements imposed on SIFIs may impact the requirements applicable to the Company even if it is not designated as a SIFI. The uncertainty about regulatory requirements could influence the Company’s product line or other business decisions with respect to some product lines. There is a similarly uncertain international designation process. The Financial Stability Board, appointed by the G-20 Summit, recently designated nine insurers as “G-SIIs,” or global systemically-important insurers. The insurers designated as G-SIIs to date represent organizations larger than the Company, but the possibility remains that the Company could be so designated. As with the designation of SIFI’s, it is unclear at this time how additional capital, use of non-traditional non-insurance products, and other requirements affect the insurance and financial industries.

Additionally, Dodd-Frank created the Consumer Financial Protection Bureau (“CFPB”), an independent division of the Department of Treasury with jurisdiction over credit, savings, payment, and other consumer financial products and services, other than investment products already regulated by the United States Securities and Exchange Commission (the “SEC”) or the U.S. Commodity Futures Trading Commission. The CFPB has supervisory authority over certain non-banks whose activities or products it determines pose risks to consumers, and recently issued a rule amending regulations under the Home Mortgage Disclosure Act that will require the Company to, among other things, collect and disclose extensive data related to its lending practices. It is unclear at this time the extent to which the Company’s activities or products will be impacted by this rule or other rules promulgated by the CFPB, or how burdensome compliance will become. Certain of the Company’s subsidiaries sell products that may be regulated by the CFPB. CFPB continues to bring enforcement actions involving a growing number of issues, including actions brought jointly with state Attorneys General, which could directly or indirectly affect the Company or any of its subsidiaries. Additionally, the CFPB is exploring the possibility of helping Americans manage their retirement savings and is considering the extent of its authority in that area. The Company is unable at this time to predict the impact of these activities on the Company.

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Dodd-Frank includes a framework of regulation of over-the-counter (“OTC”) derivatives markets which requires clearing of certain types of transactions which have been or are currently traded OTC by the Company. The types of transactions to be cleared are expected to increase in the future. The new framework could potentially impose additional costs, including increased margin requirements and additional regulation on the Company. Increased margin requirements on the Company’s part, combined with restrictions on securities that will qualify as eligible collateral, could continue to reduce its liquidity and require an increase in its holdings of cash and government securities with lower yields causing a reduction in income. The Company uses derivative financial instruments to mitigate a wide range of risks in connection with its businesses, including those arising from its variable annuity products with guaranteed benefit features. The derivative clearing requirements of Dodd-Frank could continue to increase the cost of the Company’s risk mitigation and expose it to the risk of a default by a clearinghouse with respect to the Company’s cleared derivative transactions.

Numerous provisions of Dodd-Frank require the adoption of implementing rules and/or regulations. The process of adopting such implementing rules and/or regulations have in some instances been delayed beyond the timeframes imposed by Dodd-Frank. Until the various final regulations are promulgated pursuant to Dodd-Frank, the full impact of the regulations on the Company will remain unclear. In addition, Dodd-Frank mandates multiple studies, which could result in additional legislation or regulation applicable to the insurance industry, the Company, its competitors or the entities with which the Company does business. Legislative or regulatory requirements imposed by or promulgated in connection with Dodd-Frank may impact the Company in many ways, including but not limited to the following: placing the Company at a competitive disadvantage relative to its competition or other financial services entities, changing the competitive landscape of the financial services sector and/or the insurance industry, making it more expensive for the Company to conduct its business, requiring the reallocation of significant company resources to government affairs, legal and compliance-related activities, causing historical market behavior or statistics utilized by the Company in connection with its efforts to manage risk and exposure to no longer be predictive of future risk and exposure or otherwise have a material adverse effect on the overall business climate as well as the Company’s financial condition and results of operations.

Regulations issued by the Department of Labor on April 6, 2016, expanding the definition of “investment advice fiduciary” under ERISA and creating and revising several prohibited transaction exemptions for investment activities in light of that expanded definition, may have a material adverse impact on our ability to sell annuities and other products, to retain in-force business and on our financial condition or results of operation.

Broker-dealers, insurance agencies and other financial institutions sell the Company’s annuities to employee benefit plans governed by provisions of the Employee Retirement Income Security Act (“ERISA”) and Individual Retirement Accounts (“IRAs”) that are governed by similar provisions under the Internal Revenue Code (the “Code”). Consequently, our activities and those of the firms that sell the Company’s products are subject to restrictions that require ERISA fiduciaries to perform their duties solely in the interests of ERISA plan participants and beneficiaries, and that prohibit ERISA fiduciaries from causing a covered plan or retirement account to engage in certain prohibited transactions absent an exemption. In general, the prohibited transaction provisions of ERISA and the Code restrict the receipt of compensation from third parties in connection with the provision of investment advice to ERISA plans and participants and IRAs.

On April 6, 2016, the Department of Labor issued new regulations expanding the definition of “investment advice fiduciary” under ERISA. These new regulations increase the circumstances in which the Company and broker-dealers, insurance agencies and other financial institutions that sell the Company’s products could be deemed a fiduciary when providing investment advice with respect to ERISA plans or IRAs. The Department of Labor also issued amendments to long standing exemptions from the provisions of ERISA and the Code that prohibit fiduciaries from engaging in certain types of transactions (“Prohibited Transaction Exemptions”) and adopted new Prohibited Transaction Exemptions. These amended and new Prohibited Transaction Exemptions appear to increase significantly the conditions that must be satisfied by fiduciaries in order to receive traditional forms of commission, such as sales commissions, for sales of insurance products to ERISA plans, plan participants and IRAs.

Although it is expected that that the Department of Labor may provide additional interpretive guidance with respect to these new regulations, it appears that sales of certain of our products may be materially and adversely affected and our current distributors may limit the number of products they offer, including the types of products offered by the Company. The Company may find it necessary to change sales representative and/or broker compensation, to limit the assistance or advice it can provide to owners of the Company’s annuities, to replace or engage additional distributors, or otherwise change the manner in which it designs and supports sales of its annuities. In addition, the Company may incur significant expenses in connection with initial and ongoing compliance obligations with respect to such rules. The foregoing could have a material adverse impact on our ability to sell annuities and other products, to retain in-force business, and on our financial condition or results of operations.

Changes to tax law or interpretations of existing tax law could adversely affect the Company and its ability to compete with non-insurance products or reduce the demand for certain insurance products.

Under the Internal Revenue Code of 1986, as amended (the “Code”), income taxes payable by policyholders on investment earnings on most life insurance and annuity product are deferred during their accumulation period . This favorable tax treatment provides some of the Company’s products with a competitive advantage over products offered by non-insurance companies. To the extent that the Code is revised to either reduce the tax-deferred status of life insurance and annuity products, or to establish the tax-deferred status of competing products, then all life insurance companies, including the Company’s subsidiaries, would be adversely affected with respect to their ability to sell their products. Furthermore, depending upon grandfathering provisions, such changes could cause increased surrenders of existing life insurance and annuity products. For example, future legislation that further restricts the deductibility of interest on funds borrowed to purchase corporate-owned life insurance products could result in increased surrenders of these products.

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The Company is subject to the federal corporate income tax in the U.S. Certain tax provisions, such as the dividends-received deduction, the deferral of current taxation on derivatives’ and securities’ economic income, and the deduction for future policy benefits and claims, are beneficial to the Company. The Obama Administration and Congress have each made proposals that either materially change or eliminate these benefits. Most of the foregoing proposals would cause the Company to pay higher current taxes, offset (in whole or in part) by a reduction in its deferred taxes. However, the proposal regarding the dividends-received deduction would cause the Company’s net income to decrease. Whether these proposals will be enacted, and if so, whether they will be enacted as described above, is uncertain.

The Company’s mid-2005 transition from relying on reinsurance for newly-written traditional life products to reinsuring some of these products’ reserves into its captive insurance companies resulted in a net reduction in its current taxes, offset by an increase in its deferred taxes. The resulting benefit of reduced current taxes is attributed to the applicable life products and is an important component of the profitability of these products. The profitability and competitive position of these products is dependent on the continuation of current tax law and the ability to generate taxable income.

There is general uncertainty regarding the taxes to which the Company and its products will be subject in the future. The Company cannot predict what changes to tax law or interpretations of existing tax law may ultimately be enacted or adopted, or whether such changes will adversely affect the Company.

The Company’s reinsurers could fail to meet assumed obligations, increase rates, terminate agreements or be subject to adverse developments that could affect the Company.

The Company and its insurance subsidiaries cede material amounts of insurance and transfer related assets to other insurance companies through reinsurance. However, notwithstanding the transfer of related assets or other issues, the Company remains liable with respect to ceded insurance should any reinsurer fail to meet the assumed obligations. Therefore, the failure, insolvency, or inability or unwillingness to pay under the terms of the reinsurance agreement with the Company of one or more of the Company’s reinsurers could negatively impact the Company’s earnings and financial position.

The Company’s results and its ability to compete are affected by the availability and cost of reinsurance. Premium rates charged by the Company are based, in part, on the assumption that reinsurance will be available at a certain cost. Under certain reinsurance agreements, a reinsurer may increase the rate it charges the Company for the reinsurance, including rates for new policies the Company is issuing and rates related to policies that the Company has already issued. The Company may not be able to increase the premium rates it charges for policies it has already issued, and for competitive reasons it may not be able to raise the premium rates it charges for new policies to offset the increase in rates charged by reinsurers. If the cost of reinsurance were to increase, if reinsurance were to become unavailable, if alternatives to reinsurance were not available to the Company, or if a reinsurer should fail to meet its obligations, the Company could be adversely affected.

Over the last several years, the number of life reinsurers has decreased as the reinsurance industry has consolidated. The decreased number of participants in the life reinsurance market over time has resulted in increased concentration of risk for insurers, including the Company. If the reinsurance market further contracts, the Company’s ability to continue to offer its products on terms favorable to it could be adversely impacted.

In addition, reinsurers face challenges regarding illiquid credit and/or capital markets, investment downgrades, rating agency downgrades, deterioration of general economic conditions, and other factors negatively impacting the financial services industry. If reinsurers, including those with significant exposure to international markets and European Union member states, are unable to meet their obligations, the Company would be adversely impacted.

The Company has implemented a reinsurance program through the use of captive reinsurers. Under these arrangements, a captive owned by the Company serves as the reinsurer, and the consolidated books and tax returns of the Company reflects a liability consisting of the full reserve amount attributable to the reinsured business. The success of the Company’s captive reinsurance program is dependent on a number of factors outside the control of the Company, including continued access to financial solutions, a favorable regulatory environment, and the overall tax position of the Company. If the captive reinsurance program is not successful, the Company’s financial condition could be adversely impacted.

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Item 6.Exhibits

Exhibit
Number	Document
3(a)*	2011 Amended and Restated Charter of Protective Life Insurance Company dated as of June 27, 2011, incorporated by reference to Exhibit 3(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed March 29, 2012 (No. 001-31901).
3(b)*	2011 Amended and Restated By-Laws of Protective Life Insurance Company dated as of June 27, 2011, incorporated by reference to Exhibit 3(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed March 29, 2012 (No. 001-31901).
12	Consolidated Earnings Ratio.
31(a)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(b)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32(a)	Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32(b)	Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the quarterly report on Form 10-Q of Protective Life Insurance Company for the quarter ended June 30, 2016, filed on August 10, 2016, formatted in XBRL: (i) the Consolidated Condensed Statements of Income (Loss), (ii) the Consolidated Condensed Statements of Comprehensive Income (Loss), (iii) the Consolidated Condensed Balance Sheets, (iv) the Consolidated Condensed Statements of Shareowner’s Equity, (v) the Consolidated Condensed Statements of Cash Flows, and (iv) the Notes to Consolidated Condensed Financial Statements.

*Incorporated by Reference.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PROTECTIVE LIFE INSURANCE COMPANY
Date: August 10, 2016		By:	/s/ Steven G. Walker
			Steven G. Walker
			Executive Vice President,
			Chief Financial Officer and Controller

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EX-12

Exhibit 12

CONSOLIDATED EARNINGS RATIOS

The following table sets forth, for the years and periods ended, Protective Life Insurance Company’s (the “Company”) ratios of:

· Consolidated earnings to fixed charges.

· Consolidated earnings to fixed charges before interest credited on investment products.

	Successor Company			Predecessor Company
	For The Six	February 1, 2015	February 1, 2015	January 1, 2015
	Months Ended	to	to	to	For The Year Ended December 31,
	June 30, 2016	June 30, 2015(3)	December 31, 2015	January 31, 2015	2014	2013	2012
Ratio of Consolidated Earnings to Fixed Charges(1)	1.7	1.0	1.3	2.5	1.8	1.4	1.4
Ratio of Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products(2)	4.9	0.8	3.3	13.9	7.0	4.7	5.8

(1)The Company calculates the ratio of “Consolidated Earnings to Fixed Charges” by dividing the sum of income from continuing operations before income tax (BT), interest expense (which includes an estimate of the interest component of operating lease expense) (I) and interest credited on investment products (IP) by the sum of interest expense (I) and interest credited on investment products (IP). The formula for this ratio is: (BT+I+IP)(I+IP). The Company continues to sell investment products that credit interest to the contract holder. Investment products include products such as guaranteed investment contracts, annuities, and variable universal life interest credited insurance policies. The inclusion of interest credited on investment products results in a negative impact on the ratio of earnings to fixed charges because the effect of increases in interest credited to contract holders more than offsets the effect of the increase in earnings.

(2)The Company calculates the ratio of “Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products” by dividing the sum of income from continuing operations before income tax (BT) and interest expense (I) by interest expense (I). The formula for this calculation, therefore, would be: (BT+I)/I.

(3)For the period of February 1, 2015 to June 30, 2015 (Successor Company), additional income required to achieve a 1:1 ratio coverage was $11.0 million.

Computation of Consolidated Earnings Ratios

	Successor Company							Predecessor Company
	For The Six		February 1, 2015			February 1, 2015		January 1, 2015
	Months Ended		to			to		to		For The Year Ended December 31,
	June 30, 2016		June 30, 2015(1)			December 31, 2015		January 31, 2015		2014		2013		2012
	(Dollars In Thousands, Except Ratio Data)							(Dollars In Thousands, Except Ratio Data)
Computation of Ratio of Consolidated Earnings to Fixed Charges
Income (Loss) from Continuing Operations before Income Tax	$	331,410	$	(11,031	)	$	254,188	$	132,847	$	738,789	$	422,499	$	459,579
Add Interest Expense	85,624		49,179			109,780		10,265		122,152		115,113		95,759
Add Interest Credited on Investment Products	365,702		422,093			682,836		79,088		824,418		875,180		962,678
Earnings before Interest, Interest Credited on Investment Products and Taxes	$	782,736	$	460,241		$	1,046,804	$	222,200	$	1,685,359	$	1,412,792	$	1,518,016
Earnings before Interest, Interest Credited on Investment Products and Taxes Divided by Interest expense and Interest Credited on Investment Products	1.7		1.0			1.3		2.5		1.8		1.4		1.4
Computation of Ratio of Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products
Income (Loss) from Continuing Operations before Income Tax	$	331,410	$	(11,031	)	$	254,188	$	132,847	$	738,789	$	422,499	$	459,579
Add Interest Expense	85,624		49,179			109,780		10,265		122,152		115,113		95,759
Earnings before Interest and Taxes	$	417,034	$	38,148		$	363,968	$	143,112	$	860,941	$	537,612	$	555,338
Earnings before Interest and Taxes Divided by Interest Expense	4.9		0.8			3.3		13.9		7.0		4.7		5.8

(1)For the period of February 1, 2015 to June 30, 2015 (Successor Company), additional income required to achieve a 1:1 ratio coverage was $11.0 million.

EX-31.A

Exhibit 31(a)

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John D. Johns, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q for the period ended June 30, 2016, of Protective Life Insurance Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2016

/s/ John D. Johns

Chairman of the Board

and Chief Executive Officer

EX-31.B

Exhibit 31(b)

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven G. Walker, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q for the period ended June 30, 2016, of Protective Life Insurance Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2016

/s/ Steven G. Walker

Executive Vice President,

Chief Financial Officer and Controller

EX-32.A

Exhibit 32(a)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Protective Life Insurance Company (the “Company”) on Form 10-Q for the period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John D. Johns, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John D. Johns

Chairman of the Board

and Chief Executive Officer

August 10, 2016

This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

EX-32.B

Exhibit 32(b)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Protective Life Insurance Company (the “Company”) on Form 10-Q for the period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven G. Walker, Executive Vice President, Chief Financial Officer, and Controller of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven G. Walker

Executive Vice President,

Chief Financial Officer and Controller

August 10, 2016

This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document and Entity Information
Entity Registrant Name	PROTECTIVE LIFE INSURANCE CO
Entity Central Index Key	0000310826
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,000,000
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2

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CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Revenues
Premiums and policy fees		$ 853,351	$ 828,058	$ 1,334,444	$ 1,701,720
Reinsurance ceded		(340,594)	(351,196)	(498,009)	(655,468)
Net of reinsurance ceded		512,757	476,862	836,435	1,046,252
Net investment income		458,783	408,147	680,358	907,012
Realized investment gains (losses):
Derivative financial instruments		43,548	10,566	5,618	75,456
All other investments		88,783	(102,347)	(137,403)	170,492
Other-than-temporary impairment losses		(5,527)	(13,395)	(13,395)	(8,296)
Portion recognized in other comprehensive income (before taxes)		4,560	7,661	7,661	4,712
Net impairment losses recognized in earnings		(967)	(5,734)	(5,734)	(3,584)
Other income		71,938	75,459	124,640	139,116
Total revenues		1,174,842	862,953	1,503,914	2,334,744
Benefits and expenses
Benefits and settlement expenses, net of reinsurance ceded: (three and six months 2016 Successor - $274,911 and $574,179); (2015 Successor - $303,055 and $419,941); (2015 Predecessor - $87,830)		712,647	693,392	1,178,816	1,425,668
Amortization of deferred policy acquisition costs and value of business acquired		21,064	40,348	68,384	52,105
Other operating expenses, net of reinsurance ceded: (three and six months 2016 Successor - $51,664 and $100,890); (2015 Successor - $51,146 and $86,839); (2015 Predecessor - $17,700)		180,551	164,780	267,745	361,412
Total benefits and expenses		914,262	898,520	1,514,945	1,839,185
Income (loss) before income tax		260,580	(35,567)	(11,031)	495,559
Income tax expense (benefit)		87,787	(9,991)	(1,875)	164,149
Net income (loss)		$ 172,793	$ (25,576)	$ (9,156)	$ 331,410
Predecessor
Revenues
Premiums and policy fees	$ 260,582
Reinsurance ceded	(91,632)
Net of reinsurance ceded	168,950
Net investment income	164,605
Realized investment gains (losses):
Derivative financial instruments	22,031
All other investments	81,153
Other-than-temporary impairment losses	(636)
Portion recognized in other comprehensive income (before taxes)	155
Net impairment losses recognized in earnings	(481)
Other income	23,388
Total revenues	459,646
Benefits and expenses
Benefits and settlement expenses, net of reinsurance ceded: (three and six months 2016 Successor - $274,911 and $574,179); (2015 Successor - $303,055 and $419,941); (2015 Predecessor - $87,830)	266,575
Amortization of deferred policy acquisition costs and value of business acquired	4,817
Other operating expenses, net of reinsurance ceded: (three and six months 2016 Successor - $51,664 and $100,890); (2015 Successor - $51,146 and $86,839); (2015 Predecessor - $17,700)	55,407
Total benefits and expenses	326,799
Income (loss) before income tax	132,847
Income tax expense (benefit)	44,325
Net income (loss)	$ 88,522

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CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Benefits and settlement expenses, reinsurance ceded		$ 274,911	$ 303,055	$ 419,941	$ 574,179
Other operating expenses, reinsurance ceded		$ 51,664	$ 51,146	$ 86,839	$ 100,890
Predecessor
Benefits and settlement expenses, reinsurance ceded	$ 87,830
Other operating expenses, reinsurance ceded	$ 17,700

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Net income (loss)		$ 172,793	$ (25,576)	$ (9,156)	$ 331,410
Other comprehensive income (loss):
Change in net unrealized gains (losses) on investments, net of income tax: (three and six months 2016 Successor - $312,512 and $547,797); (2015 Successor - $(324,134) and $(481,511)); (2015 Predecessor - $259,616)		580,379	(601,964)	(894,238)	1,017,335
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and six months 2016 Successor - $(5,588) and $(6,610)); (2015 Successor - $834 and $703); (2015 Predecessor - $(2,244))		(10,377)	1,550	1,308	(12,274)
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (three and six months 2016 Successor - $(1,543) and $(1,384)); (2015 Successor - $(2,458) and $(2,458)); (2015 Predecessor - $(131))		(2,866)	(4,566)	(4,566)	(2,572)
Change in accumulated (loss) gain - derivatives, net of income tax: (2015 Successor - $12 and $0); (2015 Predecessor - $5)		0	23	0	0
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2015 Successor - $(31) and $0); (2015 Predecessor - $13)		0	(59)	0	0
Total other comprehensive income (loss)		567,136	(605,016)	(897,496)	1,002,489
Total comprehensive income (loss)		$ 739,929	$ (630,592)	$ (906,652)	$ 1,333,899
Predecessor
Net income (loss)	$ 88,522
Other comprehensive income (loss):
Change in net unrealized gains (losses) on investments, net of income tax: (three and six months 2016 Successor - $312,512 and $547,797); (2015 Successor - $(324,134) and $(481,511)); (2015 Predecessor - $259,616)	482,143
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and six months 2016 Successor - $(5,588) and $(6,610)); (2015 Successor - $834 and $703); (2015 Predecessor - $(2,244))	(4,166)
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (three and six months 2016 Successor - $(1,543) and $(1,384)); (2015 Successor - $(2,458) and $(2,458)); (2015 Predecessor - $(131))	(243)
Change in accumulated (loss) gain - derivatives, net of income tax: (2015 Successor - $12 and $0); (2015 Predecessor - $5)	9
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2015 Successor - $(31) and $0); (2015 Predecessor - $13)	23
Total other comprehensive income (loss)	477,766
Total comprehensive income (loss)	$ 566,288

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Change in net unrealized gains (losses) on investments, income tax		$ 312,512	$ (324,134)	$ (481,511)	$ 547,797
Reclassification adjustment for investment amounts included in net income, income tax		(5,588)	834	703	(6,610)
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax		(1,543)	(2,458)	(2,458)	(1,384)
Change in accumulated (loss) gain - derivatives, income tax		0	12	0	0
Reclassification adjustment for derivative amounts included in net income, income tax		$ 0	$ (31)	$ 0	$ 0
Predecessor
Change in net unrealized gains (losses) on investments, income tax	$ 259,616
Reclassification adjustment for investment amounts included in net income, income tax	(2,244)
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax	(131)
Change in accumulated (loss) gain - derivatives, income tax	5
Reclassification adjustment for derivative amounts included in net income, income tax	$ 13

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CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Liabilities related to separate accounts
Commitments and contingencies - Note 13
Successor
Assets
Fixed maturities, at fair value (amortized cost: Successor 2016 - $39,286,199; 2015 - $38,389,859)	38,675,207	35,507,098
Fixed maturities, at amortized cost (fair value: Successor 2016 - $2,853,788; 2015 - $515,000)	2,779,280	593,314
Equity securities, at fair value (cost: Successor - $681,496; 2015 - $693,147)	702,796	699,925
Mortgage loans (related to securitizations: Successor 2016 - $305,373; 2015 - $359,181)	5,748,675	5,662,812
Investment real estate, net of accumulated depreciation (Successor 2016 - $173; 2015 - $133)	7,028	11,118
Policy loans	1,670,218	1,699,508
Other long-term investments	933,646	594,036
Short-term investments	244,363	263,837
Total investments	50,761,213	45,031,648
Cash	295,143	212,358
Accrued investment income	478,505	472,694
Accounts and premiums receivable	284,443	54,054
Reinsurance receivables	5,206,522	5,307,556
Deferred policy acquisition costs and value of business acquired	1,895,166	1,562,373
Goodwill	732,443	732,443
Other intangibles, net of accumulated amortization (Successor 2016 - $58,524; 2015 - $37,869)	624,475	645,131
Property and equipment, net of accumulated depreciation (Successor 2016 - $12,288; 2015 - $7,908)	102,397	101,600
Other assets	267,089	255,283
Income tax receivable	3,951	0
Assets related to separate accounts
Variable annuity	12,891,214	12,829,188
Variable universal life	831,818	827,610
Total assets	74,374,379	68,031,938
Liabilities
Future policy benefits and claims	30,590,080	29,703,190
Unearned premiums	665,923	651,205
Total policy liabilities and accruals	31,256,003	30,354,395
Stable value product account balances	2,838,674	2,131,822
Annuity account balances	10,678,701	10,719,862
Other policyholders’ funds	1,354,970	1,069,572
Other liabilities	2,011,854	1,230,500
Income tax payable	0	76,584
Deferred income taxes	1,980,260	1,215,180
Non-recourse funding obligations	2,981,271	1,951,563
Repurchase program borrowings	160,000	438,185
Liabilities related to separate accounts
Variable annuity	12,891,214	12,829,188
Variable universal life	831,818	827,610
Total liabilities	66,984,765	62,844,461
Commitments and contingencies - Note 13
Shareowner’s equity
Preferred Stock; $1 par value, shares authorized: 2,000; Liquidation preference: $2,000	2	2
Common Stock, $1 par value, shares authorized and issued: 2016 and 2015 - 5,000,000	5,000	5,000
Additional paid-in-capital	7,422,407	6,274,169
Retained earnings	206,107	154,697
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on investments, net of income tax: (Successor 2016 - $(129,735); 2015 - $(670,922))	(240,937)	(1,245,998)
Net unrealized gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2016 - $(1,596); 2015 - $(212))	(2,965)	(393)
Total shareowner’s equity	7,389,614	5,187,477
Total liabilities and shareowner’s equity	$ 74,374,379	$ 68,031,938

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CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - Successor - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Fixed maturities, amortized cost	$ 39,286,199,000	$ 38,389,859,000
Fair Value	2,853,788,000	515,000,000
Equity securities, cost	681,496,000	693,147,000
Mortgage loans, securitizations	305,373,000	359,181,000
Investment real estate, accumulated depreciation	173,000	133,000
Other intangibles, accumulated amortization	58,524,000	37,869,000
Property and equipment, accumulated depreciation	$ 12,288,000	$ 7,908,000
Preferred Stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, shares authorized (in shares)	2,000	2,000
Preferred Stock, Liquidation preference	$ 2,000	$ 2,000
Common Stock, par value (in dollars per share)	$ 1	$ 1
Common Stock, shares authorized (in shares)	5,000,000	5,000,000
Common Stock, shares issued (in shares)	5,000,000	5,000,000
Net unrealized gains on investments, income tax	$ (129,735,000)	$ (670,922,000)
Net unrealized gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax	$ (1,596,000)	$ (212,000)

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CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER'S EQUITY - 6 months ended Jun. 30, 2016 - Successor - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2015	$ 5,187,477	$ 2	$ 5,000	$ 6,274,169	$ 154,697	$ (1,246,391)
Increase (decrease) in shareowner's equity
Net income for the six months ended June 30, 2016	331,410				331,410
Other comprehensive income	1,002,489					1,002,489
Comprehensive income for the six months ended June 30, 2016	1,333,899
Capital contribution	1,148,238			1,148,238
Dividends paid to the parent company	(280,000)				(280,000)
Ending Balance at Jun. 30, 2016	$ 7,389,614	$ 2	$ 5,000	$ 7,422,407	$ 206,107	$ (243,902)

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	1 Months Ended	5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Cash flows from operating activities
Net income (loss)		$ (9,156)	$ 331,410
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment losses (gains)		137,519	(242,364)
Amortization of deferred policy acquisition costs and value of business acquired		68,384	52,105
Capitalization of deferred policy acquisition costs		(132,103)	(163,578)
Depreciation and amortization expense		20,754	24,361
Deferred income tax		(62,353)	225,255
Accrued income tax		146,576	(80,535)
Interest credited to universal life and investment products		422,093	365,702
Policy fees assessed on universal life and investment products		(491,769)	(633,366)
Change in reinsurance receivables		138,282	101,034
Change in accrued investment income and other receivables		(8,398)	(63,753)
Change in policy liabilities and other policyholders’ funds of traditional life and health products		(158,210)	(187,989)
Trading securities:
Maturities and principal reductions of investments		40,104	54,710
Sale of investments		78,302	299,517
Cost of investments acquired		(135,770)	(331,920)
Other net change in trading securities		83,770	31,036
Amortization of premiums and accretion of discounts on investments and mortgage loans		170,248	195,147
Change in other liabilities		9,179	301,898
Other, net		(25,256)	(8,653)
Net cash provided by operating activities		292,196	270,017
Cash flows from investing activities
Maturities and principal reductions of investments, available-for-sale		202,190	630,055
Sale of investments, available-for-sale		2,057,339	1,209,832
Cost of investments acquired, available-for-sale		(2,584,927)	(2,746,767)
Change in investments, held-to-maturity		(35,000)	(2,188,000)
Mortgage loans:
New lendings		(637,908)	(575,386)
Repayments		510,580	457,181
Change in investment real estate, net		52	3,883
Change in policy loans, net		32,008	29,290
Change in other long-term investments, net		(154,647)	(66,928)
Change in short-term investments, net		33,933	(4,060)
Net unsettled security transactions		(46,266)	112,433
Purchase of property and equipment		(2,444)	(4,502)
Amounts received from reinsurance transaction		0	325,800
Net cash (used in) provided by investing activities		(625,090)	(2,817,169)
Cash flows from financing activities
Issuance (repayment) of non-recourse funding obligations		35,000	2,176,700
Repurchase program borrowings		552,213	(278,185)
Dividends/Return of capital to parent company		(230,000)	(280,000)
Investment product deposits and change in universal life deposits		1,222,581	2,219,455
Investment product withdrawals		(1,225,576)	(1,208,033)
Other financing activities, net		350	0
Net cash provided by (used in) financing activities		354,568	2,629,937
Change in cash		21,674	82,785
Cash at beginning of period		378,903	212,358
Cash at end of period	$ 378,903	400,577	$ 295,143
Predecessor
Cash flows from operating activities
Net income (loss)	88,522
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment losses (gains)	(102,703)
Amortization of deferred policy acquisition costs and value of business acquired	4,817
Capitalization of deferred policy acquisition costs	(22,799)
Depreciation and amortization expense	796
Deferred income tax	91,709
Accrued income tax	(48,469)
Interest credited to universal life and investment products	79,088
Policy fees assessed on universal life and investment products	(90,288)
Change in reinsurance receivables	(98,148)
Change in accrued investment income and other receivables	(1,285)
Change in policy liabilities and other policyholders’ funds of traditional life and health products	176,119
Trading securities:
Maturities and principal reductions of investments	17,946
Sale of investments	26,422
Cost of investments acquired	(27,289)
Other net change in trading securities	(26,901)
Amortization of premiums and accretion of discounts on investments and mortgage loans	3,420
Change in other liabilities	211,031
Other, net	(133,928)
Net cash provided by operating activities	148,060
Cash flows from investing activities
Maturities and principal reductions of investments, available-for-sale	59,028
Sale of investments, available-for-sale	200,716
Cost of investments acquired, available-for-sale	(150,030)
Change in investments, held-to-maturity	0
Mortgage loans:
New lendings	(100,530)
Repayments	45,741
Change in investment real estate, net	7
Change in policy loans, net	6,365
Change in other long-term investments, net	(25,372)
Change in short-term investments, net	(39,312)
Net unsettled security transactions	37,510
Purchase of property and equipment	(648)
Amounts received from reinsurance transaction	0
Net cash (used in) provided by investing activities	33,475
Cash flows from financing activities
Issuance (repayment) of non-recourse funding obligations	0
Repurchase program borrowings	0
Dividends/Return of capital to parent company	0
Investment product deposits and change in universal life deposits	169,233
Investment product withdrawals	(240,147)
Other financing activities, net	(4)
Net cash provided by (used in) financing activities	(70,918)
Change in cash	110,617
Cash at beginning of period	268,286	$ 378,903
Cash at end of period	$ 378,903

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

Basis of Presentation

Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. On February 1, 2015, PLC became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (“Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into PLC (the “Merger”). Prior to February 1, 2015, and for the periods reported as “predecessor”, PLC’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, PLC and the Company remain as SEC registrants within the United States. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products.

In conjunction with the Merger, the Company elected to apply “pushdown” accounting by applying the guidance allowed by ASC Topic 805, Business Combinations, including the initial recognition of most of the Company’s assets and liabilities at fair value as of the acquisition date, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. The new basis of accounting will be the basis of the accounting records for assets and liabilities held at the acquisition date in the preparation of future financial statements and related disclosures after the Merger date.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three and six months ended June 30, 2016 (Successor Company), are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2016 (Successor Company). The year-end consolidated condensed financial data included herein was derived from audited financial statements but does not include all disclosures required by GAAP within this report. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company).

The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors.

Entities Included

The consolidated condensed financial statements for the predecessor and successor periods presented in this report include the accounts of Protective Life Insurance Company and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

For a full description of significant accounting policies, see Note 2 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company). There were no significant changes to the Company's accounting policies during the six months ended June 30, 2016 (Successor Company).

Accounting Pronouncements Recently Adopted

Accounting Standards Update ("ASU") No. 2015-02-Consolidation-Amendments to the Consolidation Analysis. This Update makes several targeted changes to generally accepted accounting principles, including a) eliminating the presumption that a general partner should consolidate a limited partnership and b) eliminating the consolidation model specific to limited partnerships. The amendments also clarify when fees and related party relationships should be considered in the consolidation of variable interest entities. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

ASU No. 2015-03-Interest-Imputation of Interest. The objective of this Update is to eliminate diversity in practice related to the presentation of debt issuance costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Update is effective for fiscal years beginning after December 15, 2015, and requires revised presentation of debt issuance costs in all periods presented in the financial statements. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

ASU No. 2015-15 - Interest - Imputation of Interest - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The objective of this Update is to clarify the SEC Staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on the topic in ASU No. 2015-03. This Update reflects the SEC Staff’s decision to not object when an entity defers and presents debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

ASU No. 2015-05 - Intangibles - Goodwill and Other - Internal-Use Software. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The Update is effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company is prepared to comply with the revised guidance in future periods.

Accounting Pronouncements Not Yet Adopted

ASU No. 2014-09-Revenue from Contracts with Customers (Topic 606). This Update provides for significant revisions to the recognition of revenue from contracts with customers across various industries. Under the new guidance, entities are required to apply a prescribed 5-step process to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting for revenues associated with insurance products is not within the scope of this Update. The Update was originally effective for annual and interim periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU No. 2015-14 - Revenues from Contracts with Customers: Deferral of the Effective Date, to defer the effective date of ASU No. 2014-09 by one year to annual and interim periods beginning after December 15, 2017. Early adoption will be allowed, but not before the original effective date. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its non-insurance operations.

ASU No. 2014-15-Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This Update will require management to assess an entity’s ability to continue as a going concern, and will require footnote disclosures in certain circumstances. Under the updated guidance, management should consider relevant conditions and evaluate whether it is probable that the entity will be unable to meet its obligations within one year after the issuance date of the financial statements. The Update is effective for annual periods ending December 31, 2016 and for annual and interim periods thereafter, with early adoption permitted. The amendments in this Update will not impact the Company’s financial position or results of operations. However, the new guidance will require a formal assessment of going concern by management based on criteria prescribed in the new guidance. The Company is reviewing its policies and processes to ensure compliance with the new guidance.

ASU No. 2015-09 - Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts. The amendments in this Update require additional disclosures for short-duration contracts issued by insurance entities. The additional disclosures focus on the liability for unpaid claims and claim adjustment expenses and include incurred and paid claims development information by accident year in tabular form, along with a reconciliation of this information to the statement of financial position. For accident years included in the development tables, the amendments also require disclosure of the total incurred-but-not-reported liabilities and expected development on reported claims, along with claims frequency information unless impracticable. Finally, the amendments require disclosure of the historical average annual percentage payout of incurred claims. With the exception of the current reporting period, claims development information may be presented as supplementary information. The Update is effective for annual periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The Company does not anticipate that the additional disclosures introduced in this Update will be material to its financial statements.

ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, the Update requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017. The Company is reviewing its policies and processes to ensure compliance with the revised guidance.

ASU No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change will relate to the accounting model used by lessees. The Update will require all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the revised guidance.

ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this Update introduce a new impairment model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance its estimate of the contractual cash flows not expected to be collected. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results.

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REINSURANCE AND FINANCING TRANSACTIONS

6 Months Ended

Jun. 30, 2016

Reinsurance Disclosures [Abstract]

REINSURANCE AND FINANCING TRANSACTIONS

REINSURANCE AND FINANCING TRANSACTIONS

On January 15, 2016, the Company completed the transaction contemplated by the Master Agreement, dated September 30, 2015 (the “Master Agreement”), with Genworth Life and Annuity Insurance Company (“GLAIC”). Pursuant to the Master Agreement, effective January 1, 2016, the Company entered into a reinsurance agreement (the “Reinsurance Agreement”) under the terms of which the Company coinsures certain term life insurance business of GLAIC (the “GLAIC Block”). In connection with the reinsurance transaction, on January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18-year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by the Company and West Coast Life Insurance Company (“WCL”), a direct wholly owned subsidiary of the Company. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion. Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City notes for the 18-year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. In connection with the transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. As a result of the financing transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. Also on January 15, 2016, Golden Gate paid an extraordinary dividend of $300 million to the Company as approved by the Vermont Department of Financial Regulation.

The transactions described above resulted in an increase to total assets and total liabilities of $2.8 billion. Of the $2.8 billion increase in total assets, $0.6 billion was the result of the reinsurance transaction with GLAIC which included a $280 million increase in VOBA. The remaining $2.2 billion increase to total assets and liabilities is associated with the financing transaction between Golden Gate and Steel City.

The Company considered whether the Reinsurance Agreement constituted the purchase of a business for accounting and reporting purposes pursuant to ASC 805, Business Combinations. While the transaction included a continuation of the revenue-producing activities associated with the reinsured policies, it did not result in the acquisition of a market distribution system, sales force or production techniques. Based on Management’s decision not to pursue distribution opportunities or future sales related to the reinsured policies, the Company accounted for the transaction as a reinsurance agreement under ASC 944, Insurance Contracts and asset acquisition under ASC 805. Accordingly, the Company recorded the assets and liabilities acquired under the reinsurance agreement at fair value and recognized an intangible asset (value of business acquired or “VOBA”) equal to the excess of the fair value of assets acquired over liabilities assumed, measured in accordance with the Company's accounting policies for insurance and reinsurance contracts that it issues or holds pursuant to ASC 944.

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DAI-ICHI MERGER

6 Months Ended

Jun. 30, 2016

DAI-ICHI MERGER

DAI-ICHI MERGER

DAI-ICHI MERGER

On February 1, 2015 PLC, subsequent to required approvals from PLC’s shareholders and relevant regulatory authorities, became a wholly owned subsidiary of Dai-ichi Life as contemplated by the Agreement and Plan of Merger (the “Merger Agreement”) with Dai-ichi Life and DL Investment (Delaware), Inc., a Delaware corporation and wholly owned subsidiary of Dai-ichi Life, which provided for the Merger of DL Investment (Delaware), Inc. with and into PLC, with PLC surviving the Merger as a wholly owned subsidiary of Dai-ichi Life. On February 1, 2015 each share of PLC’s common stock outstanding was converted into the right to receive $70 per share, without interest (the “Per Share Merger Consideration”). The aggregate cash consideration paid in connection with the Merger for the outstanding shares of common stock was approximately $5.6 billion and paid directly to the shareowners of record by Dai-ichi Life. The Merger provided Dai-ichi Life with a platform for growth in the United States, where it did not previously have a significant presence. In connection with the completion of the Merger, PLC’s previously publicly traded equity was delisted from the NYSE, although PLC and the Company remain SEC registrants for financial reporting purposes in the United States.

The Merger was accounted for under the acquisition method of accounting under ASC Topic 805. In accordance with ASC Topic 805-20-30, all identifiable assets acquired and liabilities assumed were measured at fair value as of the acquisition date. On the date of the Merger, goodwill of $735.7 million represented the cost in excess of the fair value of PLC’s net assets acquired (including identifiable intangibles) in the Merger, and reflected the Company’s assembled workforce, future growth potential and other sources of value not associated with identifiable assets. During the measurement period subsequent to February 1, 2015, the Company made adjustments to provisional amounts related to certain tax balances that resulted in a decrease to goodwill of $3.3 million from the amount recorded at the Merger date. The balance of goodwill associated with the Merger as of December 31, 2015 (Successor Company) and June 30, 2016 (Successor Company) was $732.4 million. None of the goodwill is tax deductible.

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date:

	Fair Value
	As of
	February 1, 2015
	(Dollars In Thousands)
Assets
Fixed maturities	$	38,342,948
Equity securities	699,081
Mortgage loans	5,580,229
Investment real estate	7,456
Policy loans	1,751,872
Other long-term investments	657,346
Short-term investments	311,236
Total investments	47,350,168
Cash	378,903
Accrued investment income	483,691
Accounts and premiums receivable	104,260
Reinsurance receivables	5,538,637
Value of business acquired	1,278,064
Goodwill	735,712
Other intangibles	683,000
Property and equipment	102,736
Other assets	224,555
Income tax receivable	50,117
Assets related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total assets	$	70,719,618
Liabilities
Future policy and benefit claims	$	30,195,397
Unearned premiums	622,278
Total policy liabilities and accruals	30,817,675
Stable value product account balances	1,932,277
Annuity account balances	10,941,661
Other policyholders’ funds	1,388,083
Other liabilities	1,533,666
Deferred income taxes	1,861,632
Non-recourse funding obligations	1,895,636
Repurchase program borrowings	50,000
Liabilities related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total liabilities	64,210,405
Net assets acquired	$	6,509,213

Treatment of Benefit Plans

At or immediately prior to the Merger, each stock appreciation right with respect to shares of PLC’s Common Stock granted under any Stock Plan (each, a “SAR”) that were outstanding and unexercised immediately prior to the Merger and that had a base price per share of Common Stock underlying such SAR (the “Base Price”) that was less than the Per Share Merger Consideration (each such SAR, an “In-the-Money SAR”), whether or not exercisable or vested, was cancelled and converted into the right to receive an amount in cash less any applicable withholding taxes, determined by multiplying (i) the excess of the Per Share Merger Consideration over the Base Price of such In-the-Money SAR by (ii) the number of shares of Common Stock subject to such In-the-Money SAR (such amount, the “SAR Consideration”).

At or immediately prior to the effective time of the Merger, each restricted stock unit with respect to a share of PLC Common Stock granted under any Stock Plan (each, a “RSU”) that was outstanding immediately prior to the Merger, whether or not vested, was cancelled and converted into the right to receive an amount in cash, without interest, less any applicable withholding taxes, determined by multiplying (i) the Per Share Merger Consideration by (ii) the number of RSUs.

The number of performance shares earned for each award of performance shares granted under any Stock Plan was calculated by determining the number of performance shares that would have been paid if the subject award period had ended on the December 31 immediately preceding the Merger (based on the conditions set for payment of performance share awards for the subject award period), provided that the number of performance shares earned for each award were not less than the aggregate number of performance shares at the target performance level. Each performance share earned that was outstanding immediately prior to the Merger, whether or not vested, was cancelled and converted into the right to receive an amount in cash, without interest, less any applicable withholding taxes, determined by multiplying (i) the Per Share Merger Consideration by (ii) the number of Performance Shares.

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MONY CLOSED BLOCK OF BUSINESS

6 Months Ended

Jun. 30, 2016

Closed Block Disclosure [Abstract]

MONY CLOSED BLOCK OF BUSINESS

MONY CLOSED BLOCK OF BUSINESS

In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013.

Assets allocated to the Closed Block inure solely to the benefit of each Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account.

The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in accumulated other comprehensive income (loss) (“AOCI”)) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life, this actuarial calculation of the expected timing of MONY’s Closed Block earnings was recalculated and reset as of February 1, 2015, along with the establishment of a policyholder dividend obligation as of such date.

If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block.

Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block.

Summarized financial information for the Closed Block as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company) is as follows:

	Successor Company
	As of June 30, 2016		As of December 31, 2015
	(Dollars In Thousands)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,939,342	$	6,010,520
Policyholder dividend obligation	232,422		—
Other liabilities	13,268		24,539
Total closed block liabilities	6,185,032		6,035,059
Closed block assets
Fixed maturities, available-for-sale, at fair value	$	4,677,305	$	4,426,090
Mortgage loans on real estate	245,997		247,162
Policy loans	726,563		746,102
Cash	—		34,420
Other assets	148,763		162,640
Total closed block assets	5,798,628		5,616,414
Excess of reported closed block liabilities over closed block assets	386,404		418,645
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation of $(9,488) (Successor) and $(179,360) (Successor)	—		(18,597		)
Future earnings to be recognized from closed block assets and closed block liabilities	$	386,404	$	400,048

Reconciliation of the policyholder dividend obligation is as follows:

	Successor Company						Predecessor Company
	For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Policyholder dividend obligation, beginning of period	$	—		$	323,432		$	366,745
Applicable to net revenue (losses)	(28,921		)	(15,096		)	(1,369		)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $5,109 (Successor); $89,618 (2015 - Successor); $47,277 (2015 - Predecessor)	261,343			(256,053		)	135,077
Policyholder dividend obligation, end of period	$	232,422		$	52,283		$	500,453

Closed Block revenues and expenses were as follows:

	Successor Company								Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)								(Dollars In Thousands)
Revenues
Premiums and other income	$	47,320	$	49,998	$	91,239	$	81,669	$	15,065
Net investment income	52,008		54,833		102,875		87,681		19,107
Net investment gains	450		2,216		637		2,850		568
Total revenues	99,778		107,047		194,751		172,200		34,740
Benefits and other deductions
Benefits and settlement expenses	92,029		98,975		172,084		154,746		31,152
Other operating expenses	653		263		1,677		474		—
Total benefits and other deductions	92,682		99,238		173,761		155,220		31,152
Net revenues before income taxes	7,096		7,809		20,990		16,980		3,588
Income tax expense	2,484		2,733		7,346		5,943		1,256
Net revenues	$	4,612	$	5,076	$	13,644	$	11,037	$	2,332

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INVESTMENT OPERATIONS

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

INVESTMENT OPERATIONS

INVESTMENT OPERATIONS

Net realized gains (losses) for all other investments are summarized as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Fixed maturities	$	16,730		$	3,329		$	22,432		$	3,702		$	6,891
Equity securities	202			21			36			21			—
Impairments on corporate securities	(964		)	(5,734		)	(3,581		)	(5,734		)	(481		)
Modco trading portfolio	76,201			(108,741		)	154,355			(141,901		)	73,062
Other investments	(4,353		)	3,044			(6,334		)	775			1,200
Total realized gains (losses) - investments	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672

Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Gross realized gains	$	18,752		$	5,425		$	27,781		$	6,932		$	6,920
Gross realized losses	$	(2,784	)	$	(7,809	)	$	(8,894	)	$	(8,943	)	$	(469	)
Impairments losses included in gross realized losses	$	(964	)	$	(5,734	)	$	(3,581	)	$	(5,734	)	$	—

The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Securities in an unrealized gain position:
Fair value (proceeds)	$	513,544		$	430,058		$	819,775		$	712,938		$	172,551
Gains realized	$	18,752		$	5,425		$	27,781		$	6,932		$	6,920
Securities in an unrealized loss position(1):
Fair value (proceeds)	$	6,895		$	28,644		$	60,582		$	49,326		$	435
Losses realized(2)	$	(1,820	)	$	(2,075	)	$	(5,313	)	$	(3,209	)	$	(29	)
(1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process.
(2) The losses realized for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), were immaterial to the Company.

The amortized cost and fair value of the Company’s investments classified as available-for-sale as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
Successor Company
As of June 30, 2016
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	1,891,316	$	49,750	$	(9,253	)	$	1,931,813	$	(1	)
Commercial mortgage-backed securities	1,552,028		29,870		(3,726		)	1,578,172		—
Other asset-backed securities	1,151,430		5,267		(36,055		)	1,120,642		—
U.S. government-related securities	1,350,769		21,232		(205		)	1,371,796		—
Other government-related securities	18,348		332		—			18,680		—
States, municipals, and political subdivisions	1,727,664		31,429		(21,594		)	1,737,499		—
Corporate securities	28,740,691		373,820		(1,051,924		)	28,062,587		(4,560		)
Preferred stock	64,362		1,732		(1,667		)	64,427		—
	36,496,608		513,432		(1,124,424		)	35,885,616		(4,561		)
Equity securities	673,448		26,392		(5,092		)	694,748		—
Short-term investments	206,157		—		—			206,157		—
	$	37,376,213	$	539,824	$	(1,129,516	)	$	36,786,521	$	(4,561	)
As of December 31, 2015
Fixed maturities:
Residential mortgage-backed securities	$	1,773,099	$	9,286	$	(17,112	)	$	1,765,273	$	—
Commercial mortgage-backed securities	1,327,288		428		(41,852		)	1,285,864		—
Other asset-backed securities	813,056		2,758		(18,763		)	797,051		—
U.S. government-related securities	1,566,260		449		(34,532		)	1,532,177		—
Other government-related securities	18,483		—		(743		)	17,740		—
States, municipals, and political subdivisions	1,729,732		682		(126,814		)	1,603,600		—
Corporate securities	28,433,530		26,147		(2,681,020		)	25,778,657		(605		)
Preferred stock	64,362		192		(1,867		)	62,687		—
	35,725,810		39,942		(2,922,703		)	32,843,049		(605		)
Equity securities	684,888		13,255		(6,477		)	691,666		—
Short-term investments	202,110		—		—			202,110		—
	$	36,612,808	$	53,197	$	(2,929,180	)	$	33,736,825	$	(605	)

(1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above.

As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), the Company had an additional $2.8 billion and $2.7 billion of fixed maturities, $8.0 million and $8.3 million of equity securities, and $38.2 million and $61.7 million of short-term investments classified as trading securities, respectively.

The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of June 30, 2016 (Successor Company), by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Successor Company
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Due in one year or less	$	750,175	$	750,605	$	—	$	—
Due after one year through five years	6,878,977		6,918,323		—		—
Due after five years through ten years	7,673,357		7,783,110		—		—
Due after ten years	21,194,099		20,433,578		2,779,280		2,853,788
	$	36,496,608	$	35,885,616	$	2,779,280	$	2,853,788

The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Other-than-temporary impairments	$	(5,527	)	$	(13,395	)	$	(8,296	)	$	(13,395	)	$	(636	)
Non-credit impairment losses recorded in other comprehensive income	4,560			7,661			4,712			7,661			155
Net impairment losses recognized in earnings	$	(967	)	$	(5,734	)	$	(3,584	)	$	(5,734	)	$	(481	)

There were no other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell for the three and six months ended June 30, 2016 (Successor Company), for the three months ended June 30, 2015 (Successor Company), for the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): 

	Successor Company										Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Beginning balance	$	2,619		$	—	$	22,761		$	—	$	15,463
Additions for newly impaired securities	964			4,472		3,056			4,472		—
Additions for previously impaired securities	—			—		525			—		221
Reductions for previously impaired securities due to a change in expected cash flows	—			—		(22,759		)	—		—
Reductions for previously impaired securities that were sold in the current period	(2,619		)	—		(2,619		)	—		—
Ending balance	$	964		$	4,472	$	964		$	4,472	$	15,684

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2016 (Successor Company):

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	192,301	$	(3,103	)	$	152,965	$	(6,150	)	$	345,266	$	(9,253	)
Commercial mortgage-backed securities	43,965		(283		)	194,550		(3,443		)	238,515		(3,726		)
Other asset-backed securities	90,316		(1,188		)	550,860		(34,867		)	641,176		(36,055		)
U.S. government-related securities	1,283		(5		)	57,372		(200		)	58,655		(205		)
Other government-related securities	—		—			—		—			—		—
States, municipalities, and political subdivisions	34,112		(274		)	718,798		(21,320		)	752,910		(21,594		)
Corporate securities	2,336,766		(128,908		)	13,476,384		(923,016		)	15,813,150		(1,051,924		)
Preferred stock	—		—			19,271		(1,667		)	19,271		(1,667		)
Equities	55,137		(1,225		)	87,602		(3,867		)	142,739		(5,092		)
	$	2,753,880	$	(134,986	)	$	15,257,802	$	(994,530	)	$	18,011,682	$	(1,129,516	)

RMBS and CMBS had gross unrealized losses greater than twelve months of $6.2 million and $3.4 million, respectively, as of June 30, 2016 (Successor Company). Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments.

The other asset-backed securities had a gross unrealized loss greater than twelve months of $34.9 million as of June 30, 2016 (Successor Company). This category predominately includes student-loan backed auction rate securities, the underlying collateral, of which is at least 97% guaranteed by the Federal Family Education Loan Program (“FFELP”). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary.

The U.S. government-related securities and the states, municipalities, and political subdivisions category had gross unrealized losses greater than twelve months of $0.2 million and $21.3 million, respectively, as of June 30, 2016 (Successor Company). These declines were entirely related to changes in interest rates.

The corporate securities category had gross unrealized losses greater than twelve months of $923.0 million as of June 30, 2016 (Successor Company). The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information

As of June 30, 2016 (Successor Company), the Company had a total of 1,414 positions that were in an unrealized loss position, but the Company does not consider these unrealized loss positions to be other-than-temporary. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and the Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities.

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2015 (Successor Company):

	Less Than 12 Months					12 Months or More				Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	977,433	$	(17,112	)	$	—	$	—	$	977,433	$	(17,112	)
Commercial mortgage-backed securities	1,232,495		(41,852		)	—		—		1,232,495		(41,852		)
Other asset-backed securities	633,274		(18,763		)	—		—		633,274		(18,763		)
U.S. government-related securities	1,291,476		(34,532		)	—		—		1,291,476		(34,532		)
Other government-related securities	17,740		(743		)	—		—		17,740		(743		)
States, municipalities, and political subdivisions	1,566,752		(126,814		)	—		—		1,566,752		(126,814		)
Corporate securities	24,235,121		(2,681,020		)	—		—		24,235,121		(2,681,020		)
Preferred stock	34,685		(1,867		)	—		—		34,685		(1,867		)
Equities	248,493		(6,477		)	—		—		248,493		(6,477		)
	$	30,237,469	$	(2,929,180	)	$	—	$	—	$	30,237,469	$	(2,929,180	)

The book value of the Company’s investment portfolio was marked to fair value as of February 1, 2015 (Successor Company), in conjunction with the Dai-ichi Merger which resulted in the elimination of previously unrealized gains and losses from accumulated other comprehensive income. The level of interest rates as of February 1, 2015 (Successor Company) resulted in an increase in the carrying value of the Company’s investments. Since February 1, 2015 (Successor Company), interest rates have increased resulting in net unrealized losses in the Company’s investment portfolio.

The Company does not consider these unrealized loss positions to be other-than-temporary, based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and does not intend to sell or expect to be required to sell the securities before recovering the Company's amortized cost of the securities.

As of June 30, 2016 (Successor Company), the Company had securities in its available-for-sale portfolio which were rated below investment grade of $1.8 billion and had an amortized cost of $1.9 billion. In addition, included in the Company’s trading portfolio, the Company held $270.8 million of securities which were rated below investment grade. Approximately $324.5 million of the available-for-sale and trading securities that were below investment grade securities were not publicly traded.

The change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale is summarized as follows:

	Successor Company										Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Fixed maturities	$	845,933	$	(1,039,827	)	$	1,476,650	$	(1,383,066	)	$	669,160
Equity securities	9,509		(9,048		)	9,439		(7,537		)	12,172

The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI
Successor Company
As of June 30, 2016
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain LLC	$	626,280	$	—	$	(22,879	)	$	603,401	$	—
Steel City LLC	2,153,000		97,387		—			2,250,387		—
	$	2,779,280	$	97,387	$	(22,879	)	$	2,853,788	$	—
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI
Successor Company
As of December 31, 2015
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain LLC	$	593,314	$	—	$	(78,314	)	$	515,000	$	—
	$	593,314	$	—	$	(78,314	)	$	515,000	$	—

During the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not record any other-than-temporary impairments on held-to-maturity securities.

The Company’s held-to-maturity securities had $97.4 million of gross unrealized gains and $22.9 million of gross unrecognized holding losses as of June 30, 2016 (Successor Company). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. These held-to-maturity securities are issued by affiliates of the Company which are considered variable interest entities ("VIE's"). The Company is not the primary beneficiary of these entities and thus the securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are affiliates of the Company.

The Company’s held-to-maturity securities had $78.3 million of gross unrecognized holding losses as of December 31, 2015 (Successor Company). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information.

Variable Interest Entities

The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a variable interest entity ("VIE"). If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

Based on this analysis, the Company had an interest in one wholly owned subsidiary, Red Mountain, LLC ("Red Mountain") as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), that was determined to be a VIE.

The activity most significant to Red Mountain is the issuance of a note in connection with a financing transaction involving Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”) and the Company in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued the note to Golden Gate V. Credit enhancement on the Red Mountain Note is provided by an unrelated third party. For details of this transaction, see Note 12, Debt and Other Obligations. The Company had the power, via its 100% ownership through an affiliate, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third party in its function as provider of credit enhancement on the Red Mountain Note. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment of $10,000. Additionally, the Company has guaranteed Red Mountain’s payment obligation for the credit enhancement fee to the unrelated third party provider. As of June 30, 2016 (Successor Company), no payments have been made or required related to this guarantee.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material.

The Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument:

·Level 1: Unadjusted quoted prices for identical assets or liabilities in an active market.

·Level 2: Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following:

a) Quoted prices for similar assets or liabilities in active markets

b) Quoted prices for identical or similar assets or liabilities in non-active markets

c) Inputs other than quoted market prices that are observable

d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.

·Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 (Successor Company):

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,931,810	$	3	$	1,931,813
Commercial mortgage-backed securities	—		1,578,172		—		1,578,172
Other asset-backed securities	—		587,501		533,141		1,120,642
U.S. government-related securities	1,108,503		263,293		—		1,371,796
State, municipalities, and political subdivisions	—		1,737,499		—		1,737,499
Other government-related securities	—		18,680		—		18,680
Corporate securities	—		27,279,444		783,143		28,062,587
Preferred stock	45,155		19,272		—		64,427
Total fixed maturity securities - available-for-sale	1,153,658		33,415,671		1,316,287		35,885,616
Fixed maturity securities - trading
Residential mortgage-backed securities	—		271,994		—		271,994
Commercial mortgage-backed securities	—		157,176		—		157,176
Other asset-backed securities	—		123,076		151,964		275,040
U.S. government-related securities	41,639		4,868		—		46,507
State, municipalities, and political subdivisions	—		362,504		—		362,504
Other government-related securities	—		60,261		—		60,261
Corporate securities	—		1,595,943		16,587		1,612,530
Preferred stock	3,432		147		—		3,579
Total fixed maturity securities - trading	45,071		2,575,969		168,551		2,789,591
Total fixed maturity securities	1,198,729		35,991,640		1,484,838		38,675,207
Equity securities	636,270		—		66,526		702,796
Other long-term investments (1)	311,141		266,478		62,920		640,539
Short-term investments	240,841		3,522		—		244,363
Total investments	2,386,981		36,261,640		1,614,284		40,262,905
Cash	295,143		—		—		295,143
Assets related to separate accounts
Variable annuity	12,891,214		—		—		12,891,214
Variable universal life	831,818		—		—		831,818
Total assets measured at fair value on a recurring basis	$	16,405,156	$	36,261,640	$	1,614,284	$	54,281,080
Liabilities:
Annuity account balances(2)	$	—	$	—	$	88,820	$	88,820
Other liabilities (1)	59,711		142,794		581,046		783,551
Total liabilities measured at fair value on a recurring basis	$	59,711	$	142,794	$	669,866	$	872,371

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (Successor Company):

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,765,270	$	3	$	1,765,273
Commercial mortgage-backed securities	—		1,285,864		—		1,285,864
Other asset-backed securities	—		210,020		587,031		797,051
U.S. government-related securities	1,054,353		477,824		—		1,532,177
State, municipalities, and political subdivisions	—		1,603,600		—		1,603,600
Other government-related securities	—		17,740		—		17,740
Corporate securities	83		24,876,455		902,119		25,778,657
Preferred stock	43,073		19,614		—		62,687
Total fixed maturity securities - available-for-sale	1,097,509		30,256,387		1,489,153		32,843,049
Fixed maturity securities - trading
Residential mortgage-backed securities	—		286,658		—		286,658
Commercial mortgage-backed securities	—		146,743		—		146,743
Other asset-backed securities	—		122,511		152,912		275,423
U.S. government-related securities	233,592		4,755		—		238,347
State, municipalities, and political subdivisions	—		313,354		—		313,354
Other government-related securities	—		58,827		—		58,827
Corporate securities	—		1,322,276		18,225		1,340,501
Preferred stock	2,794		1,402		—		4,196
Total fixed maturity securities - trading	236,386		2,256,526		171,137		2,664,049
Total fixed maturity securities	1,333,895		32,512,913		1,660,290		35,507,098
Equity securities	620,358		13,063		66,504		699,925
Other long-term investments (1)	113,699		141,487		68,384		323,570
Short-term investments	261,659		2,178		—		263,837
Total investments	2,329,611		32,669,641		1,795,178		36,794,430
Cash	212,358		—		—		212,358
Assets related to separate accounts
Variable annuity	12,829,188		—		—		12,829,188
Variable universal life	827,610		—		—		827,610
Total assets measured at fair value on a recurring basis	$	16,198,767	$	32,669,641	$	1,795,178	$	50,663,586
Liabilities:
Annuity account balances (2)	$	—	$	—	$	92,512	$	92,512
Other liabilities (1)	40,067		106,310		375,848		522,225
Total liabilities measured at fair value on a recurring basis	$	40,067	$	106,310	$	468,360	$	614,737

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

Determination of fair values

The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table.

The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price approximately 90% of the Company’s available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non- binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which we purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation.

The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies.

For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value through an analysis using internal and external cash flow models developed based on spreads and, when available, market indices. The Company uses a market-based cash flow analysis to validate the reasonableness of prices received from independent brokers. These analytics, which are updated daily, incorporate various metrics (yield curves, credit spreads, prepayment rates, etc.) to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the six months ended June 30, 2016 (Successor Company).

The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3.

Asset-Backed Securities

This category mainly consists of residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). As of June 30, 2016 (Successor Company), the Company held $4.6 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities.

After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

As of June 30, 2016 (Successor Company), the Company held $685.1 million of Level 3 ABS, which included $533.1 million of other asset-backed securities classified as available-for-sale and $152.0 million of other asset-backed securities classified as trading. These securities are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate.

Corporate Securities, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities

As of June 30, 2016 (Successor Company), the Company classified approximately $31.3 billion of corporate securities, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted- average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation.

The brokers and third party pricing service utilize valuation models that consist of a hybrid income and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market.

As of June 30, 2016 (Successor Company), the Company classified approximately $799.7 million of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium.

Equities

As of June 30, 2016 (Successor Company), the Company held approximately $66.5 million of equity securities classified as Level 2 and Level 3. Of this total, $65.7 million represents Federal Home Loan Bank (“FHLB”) stock. The Company believes that the cost of the FHLB stock approximates fair value.

Other long-term investments and Other liabilities

Other long-term investments and other liabilities consist entirely of free-standing and embedded derivative financial instruments. Refer to Note 8, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of June 30, 2016 (Successor Company), 75.0% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. The remaining derivatives were priced by pricing valuation models, which predominantly utilize observable market data inputs. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses.

Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets.

Derivative instruments classified as Level 2 primarily include interest rate and inflation swaps, options, and swaptions. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs.

Derivative instruments classified as Level 3 were embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities.

The embedded derivatives are carried at fair value in “other long-term investments” and “other liabilities” on the Company’s consolidated condensed balance sheet. The changes in fair value are recorded in earnings as “Realized investment gains (losses)-Derivative financial instruments”. Refer to Note 8, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses.

The fair value of the GMWB embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near- term equity market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the National Association of Insurance Commissioners 1994 Variable Annuity MGDB Mortality Table with company experience, with attained age factors varying from 44.5% - 100%. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR plus a credit spread (to represent the Company’s non-performance risk). As a result of using significant unobservable inputs, the GMWB embedded derivative is categorized as Level 3. These assumptions are reviewed on a quarterly basis.

The balance of the FIA embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 1994 Variable Annuity MGDB mortality table modified for company experience, with attained age factors varying from 49% - 80%. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3.

The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the SOA 2015 VBT Primary Tables modified for company experience, with attained age factors varying from 38% - 153%. The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3.

The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. As a result, these agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in earnings. The investments supporting these agreements are designated as “trading securities”; therefore changes in their fair value are also reported in earnings. As of June 30, 2016 (Successor Company), the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $2.4 billion and the statutory unrealized gain (loss) of the securities of $253.2 million. As a result, changes in the fair value of the embedded derivatives are largely offset by the changes in fair value of the related investments and each are reported in earnings. The fair value of the embedded derivative is considered a Level 3 valuation due to the unobservable nature of the policy liabilities.

Certain of the Company’s subsidiaries have entered into interest support, yearly renewable term (“YRT”) premium support, and portfolio maintenance agreements with PLC. These agreements meet the definition of a derivative and are accounted for at fair value and are considered Level 3 valuations. The fair value of these derivatives as of June 30, 2016 (Successor Company) was $37.3 million and is included in Other long-term investments. For information regarding realized gains on these derivatives please refer to Note 8, Derivative Financial Instruments.

The Interest Support Agreement provides that PLC will make payments to Golden Gate II if actual investment income on certain of Golden Gate II’s asset portfolios falls below a calculated investment income amount as defined in the Interest Support Agreement. The calculated investment income amount is a level of investment income deemed to be sufficient to support certain of Golden Gate II’s obligations under a reinsurance agreement with the Company, dated July 1, 2007. The derivative is valued using an internal valuation model that assumes a conservative projection of investment income under an adverse interest rate scenario and the probability that the expectation falls below the calculated investment income amount. This derivative had a fair value of $29.6 million as of June 30, 2016 (Successor Company), however, interest support agreement obligations to Golden Gate II of approximately $1.5 million have been collateralized by PLC. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreement. As of June 30, 2016 (Successor Company), no payments have been triggered under this agreement.

The YRT premium support agreements provide that PLC will make payments to Golden Gate and Golden Gate II in the event that YRT premium rates increase. The derivatives are valued using an internal valuation model. The valuation model is a probability weighted discounted cash flow model. The value is primarily a function of the likelihood and severity of future YRT premium increases. The fair value of these derivatives as of June 30, 2016 (Successor Company) was $3.3 million. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

The portfolio maintenance agreements provide that PLC will make payments to Golden Gate, Golden Gate V, and WCL in the event of other-than-temporary impairments on investments that exceed defined thresholds. The derivatives are valued using an internal discounted cash flow model. The significant unobservable inputs are the projected probability and severity of credit losses used to project future cash flows on the investment portfolios. The fair value of the portfolio maintenance agreements as of June 30, 2016 (Successor Company), was $4.4 million. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

The Funds Withheld derivative results from a reinsurance agreement with Shades Creek where the economic performance of certain hedging instruments held by the Company is ceded to Shades Creek. The value of the Funds Withheld derivative is directly tied to the value of the hedging instruments held in the funds withheld account. The hedging instruments predominantly consist of derivative instruments the fair values of which are classified as a Level 2 measurement; as such, the fair value of the Funds Withheld derivative has been classified as a Level 2 measurement. The fair value of the Funds Withheld derivative as of June 30, 2016 (Successor Company) was a liability of $129.5 million.

Annuity account balances

The Company records certain of its FIA reserves at fair value. The fair value is considered a Level 3 valuation. The FIA valuation model calculates the present value of future benefit cash flows less the projected future profits to quantify the net liability that is held as a reserve. This calculation is done using multiple risk neutral stochastic equity scenarios. The cash flows are discounted using LIBOR plus a credit spread. Best estimate assumptions are used for partial withdrawals, lapses, expenses and asset earned rate with a risk margin applied to each. These assumptions are reviewed at least annually as a part of the formal unlocking process. If an event were to occur within a quarter that would make the assumptions unreasonable, the assumptions would be reviewed within the quarter.

The discount rate for the fixed indexed annuities is based on an upward sloping rate curve which is updated each quarter. The discount rates for June 30, 2016 (Successor Company), ranged from a one month rate of 0.68%, a 5 year rate of 1.82%, and a 30 year rate of 3.03%. A credit spread component is also included in the calculation to accommodate non-performance risk.

Separate Accounts

Separate account assets are invested in open-ended mutual funds and are included in Level 1.

Valuation of Level 3 Financial Instruments

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Successor Company
	Fair Value As of June 30, 2016		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	524,166	Discounted cash flow	Liquidity premium	0.24% - 1.14% (0.55%)
				Paydown rate	9.37% - 11.91% (10.16%)
Corporate securities	758,312		Discounted cash flow	Spread over treasury	0.70% - 6.25% (2.45%)
Liabilities:
Embedded derivatives - GMWB(1)	$	151,212	Actuarial cash flow model	Mortality	1994 MGDB table with
					company experience
				Lapse	0.3% - 15%, depending on
					product/duration/funded
					status of guarantee
				Utilization	99%. 10% of policies have
					a one-time over-utilization
					of 400%
				Nonperformance risk	0.22% - 1.20%
Annuity account balances(2)	88,820		Actuarial cash flow model	Asset earned rate	4.53% - 5.67%
				Expenses	$83 per policy
				Withdrawal rate	2.20%
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.2% - 33.0%, depending
					on duration/surrender
					charge period
				Return on assets	1.50% - 1.85% depending on
					surrender charge period
				Nonperformance risk	0.22% - 1.20%
Embedded derivative - FIA	119,997		Actuarial cash flow model	Expenses	$83 per policy
				Withdrawal rate	1.1% - 4.5% depending on
					duration and tax qualification
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.5% - 40.0%, depending on
					on duration/surrender
					charge period
				Nonperformance risk	0.22% - 1.20%
Embedded derivative - IUL	46,711		Actuarial cash flow model	Mortality	38% - 153% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on
					duration/distribution channel
					and smoking class
				Nonperformance risk	0.22% - 1.20%

(1)The fair value for the GMWB embedded derivative is presented as a net liability for the purposes of this chart. Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value.

The Company has considered all reasonably available quantitative inputs as of June 30, 2016 (Successor Company), but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $202.4 million of financial instruments being classified as Level 3 as of June 30, 2016 (Successor Company). Of the $202.4 million, $160.9 million are other asset-backed securities and $41.4 million are corporate securities.

In certain cases the Company has determined that book value materially approximates fair value. As of June 30, 2016 (Successor Company), the Company held $66.5 million of financial instruments where book value approximates fair value which were predominantly FHLB stock.

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Successor Company
	Fair Value As of December 31, 2015		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	587,031	Discounted cash flow	Liquidity premium	0.27% - 1.49% (0.42%)
				Paydown rate	10.20% - 14.72% (13.11%)
Corporate securities	875,810		Discounted cash flow	Spread over	0.10% - 19.00% (2.61%)
				treasury
Liabilities:
Embedded derivatives - GMWB(1)	$	18,511	Actuarial cash flow model	Mortality	1994 MGDB table with
					company experience
				Lapse	0.3% - 15%, depending on
					product/duration/funded
					status of guarantee
				Utilization	99%. 10% of policies have
					a one-time over-utilization
					of 400%
				Nonperformance risk	0.18% - 1.04%
Annuity account balances(2)	92,512		Actuarial cash flow model	Asset earned rate	4.53% - 5.67%
				Expenses	$81 per policy
				Withdrawal rate	2.20%
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.2% - 33.0%, depending
					on duration/surrender
					charge period
				Return on assets	1.50% - 1.85% depending on
					surrender charge period
				Nonperformance risk	0.18% - 1.04%
Embedded derivative - FIA	100,329		Actuarial cash flow model	Expenses	$81.50 per policy
				Withdrawal rate	1.1% - 4.5% depending on
					duration and tax qualification
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.5% - 40.0%, depending
					on duration/surrender
					charge period
				Nonperformance risk	0.18% - 1.04%
Embedded derivative - IUL	29,629		Actuarial cash flow model	Mortality	38% - 153% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending
					on duration/distribution
					channel and smoking class
				Nonperformance risk	0.18% - 1.04%

(1)The fair value for the GMWB embedded derivative is presented as a net liability, for the purposes of this chart.  Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value.

The Company has considered all reasonably available quantitative inputs as of December 31, 2015 (Successor Company), but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $197.5 million of financial instruments being classified as Level 3 as of December 31, 2015 (Successor Company). Of the $197.5 million, $152.9 million are other asset backed securities and $44.6 million are corporate securities.

In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2015 (Successor Company), the Company held $66.5 million of financial instruments where book value approximates fair value which are predominantly FHLB stock.

The asset-backed securities classified as Level 3 are predominantly ARS. A change in the paydown rate (the projected annual rate of principal reduction) of the ARS can significantly impact the fair value of these securities. A decrease in the paydown rate would increase the projected weighted average life of the ARS and increase the sensitivity of the ARS’ fair value to changes in interest rates. An increase in the liquidity premium would result in a decrease in the fair value of the securities, while a decrease in the liquidity premium would increase the fair value of these securities.

The fair value of corporate bonds classified as Level 3 is sensitive to changes in the interest rate spread over the corresponding U.S. Treasury rate. This spread represents a risk premium that is impacted by company specific and market factors. An increase in the spread can be caused by a perceived increase in credit risk of a specific issuer and/or an increase in the overall market risk premium associated with similar securities. The fair values of corporate bonds are sensitive to changes in spread. When holding the treasury rate constant, the fair value of corporate bonds increases when spreads decrease, and decreases when spreads increase.

The fair value of the GMWB embedded derivative is sensitive to changes in the discount rate which includes the Company’s nonperformance risk, volatility, lapse, and mortality assumptions. The volatility assumption is an observable input as it is based on market inputs. The Company’s nonperformance risk, lapse, and mortality are unobservable. An increase in the three unobservable assumptions would result in a decrease in the fair value of the liability and conversely, if there is a decrease in the assumptions the fair value would increase. The fair value is also dependent on the assumed policyholder utilization of the GMWB where an increase in assumed utilization would result in an increase in the fair value of the liability and conversely, if there is a decrease in the assumption, the fair value would decrease.

The fair value of the FIA account balance liability is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the FIA embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in discount rate and non-performance risk and decreases with increases in the discount rate and non-performance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The fair value of the FIA embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the FIA embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and nonperformance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The fair value of the IUL embedded derivative is predominantly impacted by observable inputs such as discount rates and equity returns. However, the fair value of the IUL embedded derivative is sensitive to non-performance risk, which is unobservable. The value of the liability increases with decreases in the discount rate and non-performance risk and decreases with increases in the discount rate and non-performance risk. The value of the liability increases with increases in equity returns and the liability decreases with a decrease in equity returns.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	537,831		—		769		—			(8,350		)	9,597		(7,629		)	—		—		—			923			533,141		—
Corporate securities	833,737		925		16,189		—			(694		)	9,558		(57,123		)	—		—		(16,773		)	(2,676		)	783,143		—
Total fixed maturity securities - available-for-sale	1,371,571		925		16,958		—			(9,044		)	19,155		(64,752		)	—		—		(16,773		)	(1,753		)	1,316,287		—
Fixed maturity securities - trading
Other asset-backed securities	150,683		1,822		—		(8		)	—			—		(609		)	—		—		—			76			151,964		1,814
Corporate securities	5,677		24		—		—			—			10,908		1			—		—		—			(23		)	16,587		25
Total fixed maturity securities - trading	156,360		1,846		—		(8		)	—			10,908		(608		)	—		—		—			53			168,551		1,839
Total fixed maturity securities	1,527,931		2,771		16,958		(8		)	(9,044		)	30,063		(65,360		)	—		—		(16,773		)	(1,700		)	1,484,838		1,839
Equity securities	66,504		—		—		—			—			22		—			—		—		—			—			66,526		—
Other long-term investments(1)	57,048		16,275		—		(10,403		)	—			—		—			—		—		—			—			62,920		5,872
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	1,651,483		19,046		16,958		(10,411		)	(9,044		)	30,085		(65,360		)	—		—		(16,773		)	(1,700		)	1,614,284		7,711
Total assets measured at fair value on a recurring basis	$	1,651,483	$	19,046	$	16,958	$	(10,411	)	$	(9,044	)	$	30,085	$	(65,360	)	$	—	$	—	$	(16,773	)	$	(1,700	)	$	1,614,284	$	7,711
Liabilities:
Annuity account balances(2)	$	90,123	$	—	$	—	$	(530	)	$	—		$	—	$	—		$	63	$	1,896	—			$	—		$	88,820	$	—
Other liabilities(1)	496,238		15,217		—		(100,025		)	—			—		—			—		—		—			—			581,046		(84,808		)
Total liabilities measured at fair value on a recurring basis	$	586,361	$	15,217	$	—	$	(100,555	)	$	—		$	—	$	—		$	63	$	1,896	$	—		$	—		$	669,866	$	(84,808	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the three months ended June 30, 2016 (Successor Company), there were $27.2 million transfers of securities into Level 3.

For the three months ended June 30, 2016 (Successor Company), $44.0 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2016 (Successor Company).

For the three months ended June 30, 2016 (Successor Company), there were no transfers of securities from Level 2 to Level 1.

For the three months ended June 30, 2016 (Successor Company), there were no transfers of securities from Level 1.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the six months ended June 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included  in Earnings		Included  in Other Comprehensive Income		Included  in Earnings			Included  in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	587,031		6,859		769		—			(21,407		)	9,597		(58,449		)	—		—		7,457			1,284			533,141		—
Corporate securities	902,119		925		31,111		(4,135		)	(6,981		)	25,558		(81,865		)	—		—		(77,952		)	(5,637		)	783,143		—
Total fixed maturity securities - available-for-sale	1,489,153		7,784		31,880		(4,135		)	(28,388		)	35,155		(140,314		)	—		—		(70,495		)	(4,353		)	1,316,287		—
Fixed maturity securities - trading
Other asset-backed securities	152,912		2,050		—		(942		)	—			—		(2,212		)	—		—		172			(16		)	151,964		1,105
Corporate securities	18,225		332		—		(259		)	—			10,908		(4,071		)	—		—		(8,479		)	(69		)	16,587		241
Total fixed maturity securities - trading	171,137		2,382		—		(1,201		)	—			10,908		(6,283		)	—		—		(8,307		)	(85		)	168,551		1,346
Total fixed maturity securities	1,660,290		10,166		31,880		(5,336		)	(28,388		)	46,063		(146,597		)	—		—		(78,802		)	(4,438		)	1,484,838		1,346
Equity securities	66,504		—		—		—			—			22		—			—		—		—			—			66,526		—
Other long-term investments(1)	68,384		20,492		—		(27,385		)	—			1,429		—			—		—		—			—			62,920		(6,893		)
Total investments	1,795,178		30,658		31,880		(32,721		)	(28,388		)	47,514		(146,597		)	—		—		(78,802		)	(4,438		)	1,614,284		(5,547		)
Total assets measured at fair value on a recurring basis	$	1,795,178	$	30,658	$	31,880	$	(32,721	)	$	(28,388	)	$	47,514	$	(146,597	)	$	—	$	—	$	(78,802	)	$	(4,438	)	$	1,614,284	$	(5,547	)
Liabilities:
Annuity account balances(2)	$	92,512	$	—	$	—	$	(1,096	)	$	—		$	—	$	—		$	250	$	5,038	$	—		$	—		$	88,820	$	—
Other liabilities(1)	375,848		15,585		—		(220,783		)	—			—		—			—		—		—			—			581,046		(205,198		)
Total liabilities measured at fair value on a recurring basis	$	468,360	$	15,585	$	—	$	(221,879	)	$	—		$	—	$	—		$	250	$	5,038	$	—		$	—		$	669,866	$	(205,198	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the six months ended June 30, 2016 (Successor Company), $71.3 million of securities were transferred into Level 3.

For the six months ended June 30, 2016 (Successor Company), $150.1 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2016 (Successor Company).

For the six months ended June 30, 2016 (Successor Company), $12.2 million of securities were transferred from Level 2 to Level 1.

For the six months ended June 30, 2016 (Successor Company), $0.1 million of securities were transferred from Level 1.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included  in Earnings		Included  in Other Comprehensive Income		Included  in Earnings			Included  in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	600,132		—		165		(92		)	(9,323		)	—		(87		)	—		—		—			90			590,885		—
Corporate securities	1,283,142		3,656		4,001		(687		)	(24,247		)	89,929		(219,148		)	—		—		(21,803		)	(3,412		)	1,111,431		—
Total fixed maturity securities - available-for-sale	1,883,277		3,656		4,166		(779		)	(33,570		)	89,929		(219,235		)	—		—		(21,803		)	(3,322		)	1,702,319		—
Fixed maturity securities - trading
Other asset-backed securities	170,500		589		—		(5,173		)	—			—		(5,468		)	—		—		—			146			160,594		(4,587		)
Corporate securities	19,614		140		—		(233		)	—			—		(161		)	—		—		—			(44		)	19,316		(93		)
Total fixed maturity securities - trading	190,114		729		—		(5,406		)	—			—		(5,629		)	—		—		—			102			179,910		(4,680		)
Total fixed maturity securities	2,073,391		4,385		4,166		(6,185		)	(33,570		)	89,929		(224,864		)	—		—		(21,803		)	(3,220		)	1,882,229		(4,680		)
Equity securities	66,691		—		—		—			—			—		(231		)	—		—		—			—			66,460		—
Other long-term investments(1)	79,222		24,982		—		(3,685		)	—			—		—			—		—		—			—			100,519		21,297
Total investments	2,219,304		29,367		4,166		(9,870		)	(33,570		)	89,929		(225,095		)	—		—		(21,803		)	(3,220		)	2,049,208		16,617
Total assets measured at fair value on a recurring basis	$	2,219,304	$	29,367	$	4,166	$	(9,870	)	$	(33,570	)	$	89,929	$	(225,095	)	$	—	$	—	$	(21,803	)	$	(3,220	)	$	2,049,208	$	16,617
Liabilities:
Annuity account balances(2)	$	97,108	$	—	$	—	$	(911	)	$	—		$	—	$	—		$	72	$	2,913	$	—		$	—		$	95,178	$	—
Other liabilities(1)	477,729		147,963		—		(13,179		)	—			—		—			—		—		—			—			342,945		134,784
Total liabilities measured at fair value on a recurring basis	$	574,837	$	147,963	$	—	$	(14,090	)	$	—		$	—	$	—		$	72	$	2,913	$	—		$	—		$	438,123	$	134,784

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the three months ended June 30, 2015 (Successor Company), there were no securities transferred into Level 3.

For the three months ended June 30, 2015 (Successor Company), $21.8 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2015 (Successor Company).

For the three months ended June 30, 2015 (Successor Company), there were no securities transferred from Level 2 to Level 1.

For the three months ended June 30, 2015 (Successor Company), there were no securities transferred from Level 1.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the period of February 1, 2015 to June 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	603,646		—		165		(92		)	(12,891		)	—		(127		)	—		—		—			184			590,885		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		(3,675		)	—		—		—			—			—		—
Corporate securities	1,307,259		4,291		15,619		(687		)	(24,247		)	111,929		(254,935		)	—		—		(41,853		)	(5,945		)	1,111,431		—
Total fixed maturity securities - available-for-sale	1,914,583		4,291		15,784		(779		)	(37,138		)	111,929		(258,737		)	—		—		(41,853		)	(5,761		)	1,702,319		—
Fixed maturity securities - trading
Other asset-backed securities	169,473		3,949		—		(5,173		)	—			—		(7,876		)	—		—		—			221			160,594		(5,829		)
Corporate securities	25,130		174		—		(299		)	—			—		(5,584		)	—		—		—			(105		)	19,316		(1,180		)
Total fixed maturity securities - trading	194,603		4,123		—		(5,472		)	—			—		(13,460		)	—		—		—			116			179,910		(7,009		)
Total fixed maturity securities	2,109,186		8,414		15,784		(6,251		)	(37,138		)	111,929		(272,197		)	—		—		(41,853		)	(5,645		)	1,882,229		(7,009		)
Equity securities	66,691		—		—		—			—			—		(231		)	—		—		—			—			66,460		—
Other long-term investments(1)	64,200		40,032		—		(3,713		)	—			—		—			—		—		—			—			100,519		36,319
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	2,240,077		48,446		15,784		(9,964		)	(37,138		)	111,929		(272,428		)	—		—		(41,853		)	(5,645		)	2,049,208		29,310
Total assets measured at fair value on a recurring basis	$	2,240,077	$	48,446	$	15,784	$	(9,964	)	$	(37,138	)	$	111,929	$	(272,428	)	$	—	$	—	$	(41,853	)	$	(5,645	)	$	2,049,208	$	29,310
Liabilities:
Annuity account balances(2)	$	98,279	$	—	$	—	$	(1,544	)	$	—		$	—	$	—		$	86	$	4,731	$	—		$	—		$	95,178	$	—
Other liabilities(1)	530,118		212,854		—		(25,681		)	—			—		—			—		—		—			—			342,945		187,173
Total liabilities measured at fair value on a recurring basis	$	628,397	$	212,854	$	—	$	(27,225	)	$	—		$	—	$	—		$	86	$	4,731	$	—		$	—		$	438,123	$	187,173

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the period of February 1, 2015 to June 30, 2015 (Successor Company), there were no transfers of securities into Level 3.

For the period of February 1, 2015 to June 30, 2015 (Successor Company), $41.9 million of securities were transferred into Level 2. This amount was transferred from Level 3. These transfers resulted from securities that were priced internally using significant unobservable inputs where market observable inputs were not available in previous periods but were priced by independent pricing services or brokers as of June 30, 2015 (Successor Company).

For the period of February 1, 2015 to June 30, 2015 (Successor Company), $90.4 million of securities were transferred from Level 2 to Level 1.

For the period of February 1, 2015 to June 30, 2015 (Successor Company), there were no transfers from Level 1.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for period of January 1, 2015 to January 31, 2015 (Predecessor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																						Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3		Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	3	$	—
Other asset-backed securities	563,961		—		—		—			(3,867		)	—		(32		)	—		—		43,205		379			603,646		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		—			—		—		—		—			3,675		—
Corporate securities	1,325,683		—		12,282		—			(23,029		)	—		(7,062		)	—		—		—		(615		)	1,307,259		—
Total fixed maturity securities - available-for-sale	1,893,322		—		12,282		—			(26,896		)	—		(7,094		)	—		—		43,205		(236		)	1,914,583		—
Fixed maturity securities - trading
Other asset-backed securities	169,461		586		—		(139		)	—			—		(472		)	—		—		—		37			169,473		447
Corporate securities	24,744		602		—		(196		)	—			—		(20		)	—		—		—		—			25,130		406
Total fixed maturity securities - trading	194,205		1,188		—		(335		)	—			—		(492		)	—		—		—		37			194,603		853
Total fixed maturity securities	2,087,527		1,188		12,282		(335		)	(26,896		)	—		(7,586		)	—		—		43,205		(199		)	2,109,186		853
Equity securities	66,691		—		—		—			—			—		—			—		—		—		—			66,691		—
Other long-term investments(1)	44,625		16,617		—		(15,166		)	—			—		—			—		—		—		—			46,076		1,451
Short-term investments	—		—		—		—			—			—		—			—		—		—		—			—		—
Total investments	2,198,843		17,805		12,282		(15,501		)	(26,896		)	—		(7,586		)	—		—		43,205		(199		)	2,221,953		2,304
Total assets measured at fair value on a recurring basis	$	2,198,843	$	17,805	$	12,282	$	(15,501	)	$	(26,896	)	$	—	$	(7,586	)	$	—	$	—	$	43,205	$	(199	)	$	2,221,953	$	2,304
Liabilities:
Annuity account balances(2)	$	97,825	$	—	$	—	$	(536	)	$	—		$	—	$	—		$	7	$	419	$	—	$	—		$	97,949	$	—
Other liabilities(1)	506,343		61		—		(125,995		)	—			—		—			—		—		—		—			632,277		(125,934		)
Total liabilities measured at fair value on a recurring basis	$	604,168	$	61	$	—	$	(126,531	)	$	—		$	—	$	—		$	7	$	419	$	—	$	—		$	730,226	$	(125,934	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), $43.2 million of securities were transferred into Level 3. This amount was transferred from Level 2. These transfers resulted from securities that were priced by independent pricing services or brokers in previous periods, using no significant unobservable inputs, but were priced internally using significant unobservable inputs where market observable inputs were no longer available as of January 31, 2015 (Predecessor Company). All transfers are recognized as of the end of the period.

For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), there were no transfers from Level 3 to Level 2.

For the period of January 1, 2015 to January 31, 2015 (Predecessor Company), there were no transfers from Level 2 to Level 1 and there were no transfers out of Level 1.

     Total realized and unrealized gains (losses) on Level 3 assets and liabilities are primarily reported in either realized investment gains (losses) within the consolidated condensed statements of income (loss) or other comprehensive income (loss) within shareowner’s equity based on the appropriate accounting treatment for the item.

Purchases, sales, issuances, and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily relates to purchases and sales of fixed maturity securities and issuances and settlements of fixed indexed annuities.

The Company reviews the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. The asset transfers in the table(s) above primarily related to positions moved from Level 3 to Level 2 as the Company determined that certain inputs were observable.

The amount of total gains (losses) for assets and liabilities still held as of the reporting date primarily represents changes in fair value of trading securities and certain derivatives that exist as of the reporting date and the change in fair value of fixed indexed annuities.

Estimated Fair Value of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows:

		Successor Company
		As of June 30, 2016				As of December 31, 2015
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	5,748,675	$	5,735,650	$	5,662,812	$	5,529,803
Policy loans	3	1,670,218		1,670,218		1,699,508		1,699,508
Fixed maturities, held-to-maturity(1)	3	2,779,280		2,853,788		593,314		515,000
Liabilities:
Stable value product account balances	3	$	2,838,674	$	2,855,064	$	2,131,822	$	2,124,712
Annuity account balances	3	10,678,701		10,221,680		10,719,862		10,274,571
Debt:
Non-recourse funding obligations(2)	3	$	2,981,271	$	3,054,637	$	1,951,563	$	1,621,773

Except as noted below, fair values were estimated using quoted market prices.

⁽¹⁾    Securities purchased from unconsolidated affiliates, Red Mountain LLC and Steel City LLC.

⁽²⁾    Of this carrying amount, $2.8 billion, fair value of $2.8 billion, as of June 30, 2016 (Successor Company), and $500.0 million, fair value of $495.5 million, as of December 31, 2015 (Successor Company), relates to non-recourse funding obligations issued by Golden Gate and Golden Gate V.

Fair Value Measurements

Mortgage loans on real estate

The Company estimates the fair value of mortgage loans using an internally developed model. This model includes inputs derived by the Company based on assumed discount rates relative to the Company’s current mortgage loan lending rate and an expected cash flow analysis based on a review of the mortgage loan terms. The model also contains the Company’s determined representative risk adjustment assumptions related to credit and liquidity risks.

Policy loans

The Company believes the fair value of policy loans approximates book value. Policy loans are funds provided to policy holders in return for a claim on the policy. The funds provided are limited to the cash surrender value of the underlying policy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of repayments, the Company believes the fair value of policy loans approximates carrying value.

Fixed maturities, held-to-maturity

The Company estimates the fair value of its fixed maturity, held-to-maturity securities using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

Stable Value Product and Annuity Account Balances

The Company estimates the fair value of stable value product account balances and annuity account balances using models based on discounted expected cash flows. The discount rates used in the models are based on a current market rate for similar financial instruments.

Non-recourse Funding Obligations

The Company estimates the fair value of its non-recourse funding obligations using internal discounted cash flow models. The discount rates used in the model are based on a current market yield for similar financial instruments.

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DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, inflation risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program.

Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit risk by entering into transactions with highly rated counterparties. The Company manages the market risk by establishing and monitoring limits as to the types and degrees of risk that may be undertaken. The Company monitors its use of derivatives in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department.

Derivatives Related to Interest Rate Risk Management

Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions. The Company’s inflation risk management strategy involves the use of swaps that requires the Company to pay a fixed rate and receive a floating rate that is based on changes in the Consumer Price Index (“CPI”).

Derivatives Related to Risk Mitigation of Certain Annuity Contracts

The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to VA contracts and fixed indexed annuities:

•Foreign Currency Futures

•Variance Swaps

•Interest Rate Futures

•Equity Options

•Equity Futures

•Credit Derivatives

•Interest Rate Swaps

•Interest Rate Swaptions

•Volatility Futures

•Volatility Options

•Funds Withheld Agreement

•Total Return Swaps

Other Derivatives

The Company and certain of its subsidiaries have derivatives with PLC. These derivatives consist of an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC.

The Company has a funds withheld account that consists of various derivative instruments held by us that is used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument.

Accounting for Derivative Instruments

The Company records its derivative financial instruments in the consolidated balance sheet in “other long-term investments” and “other liabilities” in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists.

For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the effective portion of their realized gain or loss is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis.

The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through earnings in the period of change. Changes in the fair value of derivatives that are recognized in current earnings are reported in “Realized investment gains (losses)-Derivative financial instruments”.

Derivative Instruments Designated and Qualifying as Hedging Instruments

Cash-Flow Hedges

• In connection with the issuance of inflation-adjusted funding agreements, the Company has entered into swaps to essentially convert the floating CPI-linked interest rate on these agreements to a fixed rate. The Company pays a fixed rate on the swap and receives a floating rate primarily determined by the period’s change in the CPI. The amounts that are received on the swaps are almost equal to the amounts that are paid on the agreements. None of these positions were held as of June 30, 2016 (Successor Company), as these funding agreements and correlating swaps matured in June of 2015.

Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments

The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in earnings during the period of change.

Derivatives Related to Variable Annuity Contracts

• The Company uses equity, interest rate, currency, and volatility futures to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility.

• The Company uses equity options, variance swaps, and volatility options to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. In general, the cost of such benefits varies with the level of equity markets and overall volatility.

• The Company uses interest rate swaps and interest rate swaptions to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products.

• The Company markets certain VA products with a GMWB rider. The GMWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

• The Company has a funds withheld account that consists of various derivative instruments held by the Company that are used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument.

Derivatives Related to Fixed Annuity Contracts

• The Company uses equity, futures, and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity and overall volatility.

• The Company uses equity options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity markets.

• The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

Derivatives Related to Indexed Universal Life Contracts

• The Company uses equity, futures, and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets.

• The Company markets certain IUL products. The IUL component is considered an embedded derivative, not considered to be clearly and closely related to the host contract.

Other Derivatives

• The Company uses certain interest rate swaps to mitigate the price volatility of fixed maturities. None of these positions were held as of June 30, 2016 (Successor Company).

• The Company and certain of its subsidiaries have an interest support agreement, two YRT premium support agreements, and three portfolio maintenance agreements with PLC. The Company entered into three separate portfolio maintenance agreements, two in October 2012 and one in January 2016.

• The Company uses various swaps and other types of derivatives to manage risk related to other exposures.

• The Company is involved in various modified coinsurance and funds withheld arrangements which contain embedded derivatives. Changes in their fair value are recorded in current period earnings. The investment portfolios that support the related modified coinsurance reserves and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives.

The following table sets forth realized investments gains and losses for the periods shown:

Realized investment gains (losses) - derivative financial instruments

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures - VA	$	31,266		$	(14,183	)	$	69,067		$	(14,231	)	$	1,413
Equity futures - VA	(21,328		)	(5,267		)	(24,556		)	(37,736		)	9,221
Currency futures - VA	11,112			(8,709		)	4,954			(2,572		)	7,778
Equity options - VA	(3,232		)	(3,550		)	13,072			(25,324		)	3,047
Interest rate swaptions - VA	(749		)	2,547			(2,983		)	(8,781		)	9,268
Interest rate swaps - VA	81,554			(121,167		)	207,147			(175,958		)	122,710
Embedded derivative - GMWB	(66,019		)	45,969			(132,695		)	81,839			(68,503		)
Funds withheld derivative	17,850			6,335			10,052			44,571			(9,073		)
Total derivatives related to VA contracts	50,454			(98,025		)	144,058			(138,192		)	75,861
Derivatives related to FIA contracts:
Embedded derivative - FIA	710			290			(1,452		)	(2,293		)	1,769
Equity futures - FIA	651			123			2,033			307			(184		)
Volatility futures - FIA	—			25			—			29			—
Equity options - FIA	735			1,226			(4,827		)	5,601			(2,617		)
Total derivatives related to FIA contracts	2,096			1,664			(4,246		)	3,644			(1,032		)
Derivatives related to IUL contracts:
Embedded derivative - IUL	(96		)	1,538			(834		)	1,795			(486		)
Equity futures - IUL	47			9			(172		)	23			3
Equity options - IUL	241			(78		)	214			62			(115		)
Total derivatives related to IUL contracts	192			1,469			(792		)	1,880			(598		)
Embedded derivative - Modco reinsurance treaties	(22,820		)	109,131			(81,175		)	141,322			(68,026		)
Derivatives with PLC (1)	13,681			(3,684		)	17,711			(3,119		)	15,863
Other derivatives	(55		)	11			(100		)	83			(37		)
Total realized gains (losses) - derivatives	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031

(1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC.

The following table sets forth realized investments gains and losses for the Modco trading portfolio that is included in realized investment gains (losses) — all other investments:

Realized investment gains (losses) - all other investments

	Successor Company										Predecessor Company
	For the Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Modco trading portfolio(1)	$	76,201	$	(108,741	)	$	154,355	$	(141,901	)	$	73,062

(1)The Company elected to include the use of alternate disclosures for trading activities.

The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship:

Gain (Loss) on Derivatives in Cash Flow Hedging Relationship

	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives			Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)			Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)			(Effective Portion)			(Ineffective Portion)
				Benefits and settlement expenses			Realized investment gains (losses)
				(Dollars In Thousands)
Successor Company
For The Three Months Ended June 30, 2015
Inflation	$	(95	)	$	(41	)	$	77
Total	$	(95	)	$	(41	)	$	77
February 1, 2015 to June 30, 2015
Inflation	$	(131	)	$	(131	)	$	73
Total	$	(131	)	$	(131	)	$	73
Predecessor Company
January 1, 2015 to January 31, 2015
Inflation	$	13		$	(36	)	$	(7	)
Total	$	13		$	(36	)	$	(7	)

The table below present information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below:

	Successor Company
	As of June 30, 2016				As of December 31, 2015
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Other long-term investments
Derivatives not designated as hedging instruments:
Interest rate swaps	$	1,640,000	$	255,439	$	1,435,000	$	66,408
Derivatives with PLC(1)	2,869,315		37,300		1,619,200		18,161
Embedded derivative - Modco reinsurance treaties	64,201		1,850		64,593		1,215
Embedded derivative - GMWB	891,276		23,770		1,723,081		49,007
Interest rate futures	1,155,001		35,366		282,373		1,537
Equity futures	190,058		752		262,485		1,275
Currency futures	314,256		15,915		226,936		2,499
Equity options	2,725,744		269,217		2,198,340		179,458
Interest rate swaptions	225,000		681		225,000		3,663
Other	298		249		242		347
	$	10,075,149	$	640,539	$	8,037,250	$	323,570
Other liabilities
Derivatives not designated as hedging instruments:
Interest rate swaps	$	270,000	$	3,215	$	475,000	$	16,579
Embedded derivative - Modco reinsurance treaties	2,457,293		239,350		2,473,427		178,362
Funds withheld derivative	1,492,757		129,473		1,149,664		102,378
Embedded derivative - GMWB	2,853,530		174,988		1,834,308		67,528
Embedded derivative - FIA	1,313,404		119,997		1,110,790		100,329
Embedded derivative - IUL	77,879		46,711		57,760		29,629
Interest rate futures	—		—		793,763		1,539
Equity futures	582,493		7,461		233,412		2,599
Currency futures	64,445		1,805		46,692		1,115
Equity options	1,459,533		60,551		1,205,204		22,167
	$	10,571,334	$	783,551	$	9,380,020	$	522,225

(1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC.

During the first quarter 2016, the Company revised its methodology for estimating notional amounts associated with the YRT Support Agreements among certain of its affiliates. The Company's revised approach reflects its position that no reasonably estimable notional amounts exist for the YRT Support Agreements, which contain payment positions based on the movement of the underlying premium rates, as described in Note 7, Fair Value of Financial Instruments. Current period amounts disclosed above reflect this change in estimate, which did not impact the Company's financial position or results of operations.

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OFFSETTING OF ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2016

Offsetting [Abstract]

OFFSETTING OF ASSETS AND LIABILITIES

OFFSETTING OF ASSETS AND LIABILITIES

Certain of the Company’s derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company’s repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 12, Debt and Other Obligations for details of the Company’s repurchase agreement programs.

The tables below present the derivative instruments by assets and liabilities for the Company as of June 30, 2016 (Successor Company).

					Net Amounts
	Gross		Gross Amounts Offset in the		of Assets Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Assets		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	577,370	$	—	$	577,370	$	66,347	$	336,163	$	174,860
Total derivatives, subject to a master netting arrangement or similar arrangement	577,370		—		577,370		66,347		336,163		174,860
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,850		—		1,850		—		—		1,850
Embedded derivative - GMWB	23,770		—		23,770		—		—		23,770
Derivatives with PLC	37,300		—		37,300		—		—		37,300
Other	249		—		249		—		—		249
Total derivatives, not subject to a master netting arrangement or similar arrangement	63,169		—		63,169		—		—		63,169
Total derivatives	640,539		—		640,539		66,347		336,163		238,029
Total Assets	$	640,539	$	—	$	640,539	$	66,347	$	336,163	$	238,029

					Net Amounts
	Gross		Gross Amounts Offset in the		of Liabilities Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Liabilities		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	73,032	$	—	$	73,032	$	66,347	$	6,685	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	73,032		—		73,032		66,347		6,685		—
Derivatives, not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	239,350		—		239,350		—		—		239,350
Funds withheld derivative	129,473		—		129,473		—		—		129,473
Embedded derivative - GMWB	174,988		—		174,988		—		—		174,988
Embedded derivative - FIA	119,997		—		119,997		—		—		119,997
Embedded derivative - IUL	46,711		—		46,711		—		—		46,711
Total derivatives, not subject to a master netting arrangement or similar arrangement	710,519		—		710,519		—		—		710,519
Total derivatives	783,551		—		783,551		66,347		6,685		710,519
Repurchase agreements(1)	160,000		—		160,000		—		—		160,000
Total Liabilities	$	943,551	$	—	$	943,551	$	66,347	$	6,685	$	870,519

(1) Borrowings under repurchase agreements are for a term less than 90 days.

The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2015 (Successor Company).

					Net Amounts
	Gross		Gross Amounts Offset in the		of Assets Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Assets		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	254,840	$	—	$	254,840	$	42,382	$	105,842	$	106,616
Total derivatives, subject to a master netting arrangement or similar arrangement	254,840		—		254,840		42,382		105,842		106,616
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,215		—		1,215		—		—		1,215
Embedded derivative - GMWB	49,007		—		49,007		—		—		49,007
Derivatives with PLC	18,161		—		18,161		—		—		18,161
Other	347		—		347		—		—		347
Total derivatives, not subject to a master netting arrangement or similar arrangement	68,730		—		68,730		—		—		68,730
Total derivatives	323,570		—		323,570		42,382		105,842		175,346
Total Assets	$	323,570	$	—	$	323,570	$	42,382	$	105,842	$	175,346

					Net Amounts
	Gross		Gross Amounts Offset in the		of Liabilities Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Liabilities		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	43,999	$	—	$	43,999	$	42,382	$	1,617	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	43,999		—		43,999		42,382		1,617		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	178,362		—		178,362		—		—		178,362
Funds withheld derivative	102,378		—		102,378		—		—		102,378
Embedded derivative - GMWB	67,528		—		67,528		—		—		67,528
Embedded derivative - FIA	100,329		—		100,329		—		—		100,329
Embedded derivative - IUL	29,629		—		29,629		—		—		29,629
Total derivatives, not subject to a master netting arrangement or similar arrangement	478,226		—		478,226		—		—		478,226
Total derivatives	522,225		—		522,225		42,382		1,617		478,226
Repurchase agreements(1)	438,185		—		438,185		—		—		438,185
Total Liabilities	$	960,410	$	—	$	960,410	$	42,382	$	1,617	$	916,411

(1) Borrowings under repurchase agreements are for a term less than 90 days.

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MORTGAGE LOANS

6 Months Ended

Jun. 30, 2016

MORTGAGE LOANS

MORTGAGE LOANS

MORTGAGE LOANS

Mortgage Loans

The Company invests a portion of its investment portfolio in commercial mortgage loans. As of June 30, 2016 (Successor Company), the Company’s mortgage loan holdings were approximately $5.7 billion. The Company has specialized in making loans on either credit-oriented commercial properties or credit-anchored strip shopping centers and apartments. The Company’s underwriting procedures relative to its commercial loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company’s mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition.

The Company’s commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and accretion of discounts is recorded using the effective yield method. Interest income, amortization of premiums and accretion of discounts and prepayment fees are reported in net investment income.

As of February 1, 2015, all mortgage loans were measured at fair value. Each mortgage loan was individually analyzed to determine the fair value. Each loan was either analyzed and assigned a discount rate or given an impairment, based on whether facts and circumstances which, as of the acquisition date, indicated less than full projected collections of contractual principal and interest payments. Various market factors were considered in determining the net present value of the expected cash flow stream or underlying real estate collateral, including the characteristics of the borrower, the underlying collateral, underlying credit worthiness of the tenants, and tenant payment history. Known events and risks, such as refinancing risks, were also considered in the fair value determination. In certain cases, fair value was based on the net present value of the expected cash flow stream or the underlying value of the real estate collateral.

Certain of the mortgage loans have call options that occur within the next 12 years. However, if interest rates were to significantly increase, we may be unable to exercise the call options on our existing mortgage loans commensurate with the significantly increased market rates. As of June 30, 2016 (Successor Company), assuming the loans are called at their next call dates, approximately $42.7 million of principal would become due for the remainder of 2016, $922.1 million in 2017 through 2021, $238.1 million in 2022 through 2026, and $11.1 million thereafter.

The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), approximately $522.8 million and $449.2 million, respectively, of the Company’s total mortgage loan principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and January 1, 2015 to January 31, 2015 (Predecessor Company), the Company recognized $5.7 million, $12.5 million, $3.3 million, $5.1 million, and $0.1 million, respectively, of participating mortgage loan income.

As of June 30, 2016 (Successor Company), approximately $1.0 million of invested assets consisted of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the six months ended June 30, 2016 (Successor Company), the Company did not enter into certain mortgage loan transactions that were accounted for as troubled debt restructurings under Topic 310 of the FASB ASC. If the Company had troubled debt restructurings, these transactions would include either the acceptance of assets in satisfaction of principal during the respective periods or at a future date, and were the result of agreements between the creditor and the debtor. During the six months ended June 30, 2016 (Successor Company), the Company did not accept or agree to accept assets in satisfaction of principal. As of June 30, 2016 (Successor Company), the Company did not have any mortgage loan transactions accounted for as troubled debt restructurings.

The Company’s mortgage loan portfolio consists of two categories of loans: 1) those not subject to a pooling and servicing agreement and 2) those subject to a contractual pooling and servicing agreement. As of June 30, 2016 (Successor Company), $1.0 million of mortgage loans not subject to a pooling and servicing agreement were nonperforming mortgage loans, restructured, or mortgage loans that were foreclosed and were converted to real estate properties. The Company did not foreclose on any nonperforming loans not subject to a pooling and servicing agreement during the six months ended June 30, 2016 (Successor Company).

As of June 30, 2016 (Successor Company), none of the loans subject to a pooling and servicing agreement were nonperforming or restructured. The Company did not foreclose on any nonperforming loans subject to pooling and servicing agreement during the six months ended June 30, 2016 (Successor Company).

As of June 30, 2016 (Successor Company), the Company had an allowance for mortgage loan credit losses of $3.9 million and no allowance as of December 31, 2015 (Successor Company). Due to the Company’s loss experience and nature of the loan portfolio, the Company believes that a collectively evaluated allowance would be inappropriate. The Company believes an allowance calculated through an analysis of specific loans that are believed to have a higher risk of credit impairment provides a more accurate presentation of expected losses in the portfolio and is consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Since the Company uses the specific identification method for calculating the allowance, it is necessary to review the economic situation of each borrower to determine those that have higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assesses the risk of each loan. When issues are identified, the severity of the issues are assessed and reviewed for possible credit impairment. If a loss is probable, an expected loss calculation is performed and an allowance is established for that loan based on the expected loss. The expected loss is calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan may be subsequently charged off at such point that the Company no longer expects to receive cash payments, the present value of future expected payments of the renegotiated loan is less than the current principal balance, or at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan.

A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property. 

	Successor Company					Predecessor Company
	As of June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)					(Dollars In Thousands)
Beginning balance	$	—	$	—		$	5,720
Charge offs	—		(2,561		)	(861		)
Recoveries	—		(638		)	(2,359		)
Provision	3,850		3,199			—
Ending balance	$	3,850	$	—		$	2,500

It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company’s general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status. An analysis of the delinquent loans is shown in the following chart. 

					Greater
Successor Company	30-59 Days		60-89 Days		than 90 Days		Total
As of June 30, 2016	Delinquent		Delinquent		Delinquent		Delinquent
	(Dollars In Thousands)
Commercial mortgage loans	$	9,167	$	—	$	1,034	$	10,201
Number of delinquent commercial mortgage loans	3		—		1		4
As of December 31, 2015
Commercial mortgage loans	$	6,002	$	1,033	$	—	$	7,035
Number of delinquent commercial mortgage loans	6		1		—		7

The Company’s commercial mortgage loan portfolio consists of mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on impaired loans to 90 days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis. For information regarding impaired loans, please refer to the following chart: 

			Unpaid				Average		Interest		Cash Basis
Successor Company	Recorded		Principal		Related		Recorded		Income		Interest
As of June 30, 2016	Investment		Balance		Allowance		Investment		Recognized		Income
	(Dollars In Thousands)
Commercial mortgage loans:
With no related allowance recorded	$	1,034	$	1,067	$	—	$	1,034	$	—	$	—
With an allowance recorded	12,313		12,301		3,850		6,156		190		199
As of December 31, 2015
Commercial mortgage loans:
With no related allowance recorded	$	1,694	$	1,728	$	—	$	847	$	104	$	117
With an allowance recorded	—		—		—		—		—		—

As of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), the Company did not carry any mortgage loans that have been modified in a troubled debt restructuring.

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GOODWILL

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

As permitted by ASC Topic 805, Business Combinations, the Company measured its assets and liabilities at fair value on the date of the Merger, February 1, 2015. The purchase price in excess of the fair value of PLC’s assets and liabilities resulted in the establishment of goodwill as of the date of the Merger. As of February 1, 2015 (Successor Company), the Company was allocated an aggregate goodwill balance of $735.7 million. During the measurement period subsequent to February 1, 2015, the Company has made adjustments to provisional amounts related to certain tax balances that resulted in a decrease to goodwill of $3.3 million from the amount recorded at the Merger date. This reduction in Goodwill was applied to the Life Marketing segment's goodwill. The balance of goodwill associated with the Merger as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company) was $732.4 million. There has been no change in the goodwill during the six months ended June 30, 2016 (Successor Company).

Accounting for goodwill requires an estimate of the future profitability of the associated lines of business to assess the recoverability of the capitalized acquisition goodwill. The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If it is determined that it is more likely than not that impairment exists, the Company compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions.

The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. During the fourth quarter of 2015, the Company performed its annual evaluation of goodwill based on information as of September 30, 2015 (Successor Company) and determined that no adjustment to impair goodwill was necessary. During the six months ended June 30, 2016 (Successor Company), the Company did not identify any events or circumstances which would indicate that the fair value of its operating segments would have declined below their book value, either individually or in the aggregate. Accordingly, no impairment to the Company’s goodwill balance has been recorded.

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DEBT AND OTHER OBLIGATIONS

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

DEBT AND OTHER OBLIGATIONS

DEBT AND OTHER OBLIGATIONS

In conjunction with the Merger and in accordance with ASC Topic 805, the Company adjusted the carrying value of debt to fair value as of the date of the Merger, February 1, 2015. This resulted in the Company establishing premiums and discounts on its outstanding debt, subordinated debentures and non-recourse funding obligations. The carrying value of the Company’s revolving line of credit approximates fair value due to the nature of the borrowings and the fact the Company pays a variable rate of interest that reflects current market conditions. The fair value of the Company’s senior notes, subordinated debt, non-recourse funding obligations associated with Golden Gate II Captive Insurance Company and MONY Life Insurance Company, were determined using market prices as of February 1, 2015. The fair value of the Golden Gate V non-recourse funding obligation was determined using a discounted cash flow model with inputs derived from comparable financial instruments. The premiums and discounts established as of February 1, 2015 are amortized over the expected life of the instruments using the effective interest method. The amortization of premiums and discounts are recorded as a component of interest expense and are recorded in “Other operating expenses” on the Company’s Consolidated Condensed Statements of Income.

On February 2, 2015, the Company and PLC amended and restated the Credit Facility (the “Credit Facility”). Under the Credit Facility, the Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.25 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of PLC’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s prime rate, (y) 0.50% above the Federal Funds rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of PLC’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of PLC’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The initial facility fee rate was 0.15% on February 2, 2015, and was adjusted to 0.125% upon PLC’s subsequent ratings upgrade on February 2, 2015. The Credit Facility provides that PLC is liable for the full amount of any obligations for borrowings or letters of credit, including those of the Company, under the Credit Facility. The maturity date of the Credit Facility is February 2, 2020. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of June 30, 2016 (Successor Company). PLC had an outstanding balance of $360.0 million bearing interest at a rate of LIBOR plus 1.00% as June 30, 2016 (Successor Company). As of June 30, 2016 (Successor Company), the Company has used $30.0 million of borrowing capacity by executing a Letter of Credit under the Credit Facility for the benefit on an affiliated captive reinsurance subsidiary of the Company. This Letter of Credit had not been drawn upon as of June 30, 2016 (Successor Company).

Non-RecourseFunding Obligations

Golden Gate Captive Insurance Company

On January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18-year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by the Company and WCL, a direct wholly owned subsidiary of the Company. Steel City issued notes (the "Steel City Notes") with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion. Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City Notes for the 18-year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies, other than Golden Gate, are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. As of June 30, 2016 (Successor Company), the aggregate principal balance of the Steel City Notes was $2.153 billion. In connection with this transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City. The support agreements provide that amounts would become payable by PLC if Golden Gate’s annual general corporate expenses were higher than modeled amounts, certain reinsurance rates applicable to the subject business increase beyond modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, PLC has entered into a separate agreement to guarantee payment of certain fee amounts in connection with the credit enhancement of the Steel City Notes. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

In connection with the transaction outlined above, Golden Gate had a $2.153 billion outstanding non-recourse funding obligation as of June 30, 2016 (Successor Company). This non-recourse funding obligation matures in 2034 and accrues interest at a fixed annual rate of 4.75%.

Prior to this transaction Golden Gate had three series of non-recourse funding obligations with a total outstanding balance of $800 million. PLC held the entire outstanding balance of non-recourse funding obligations. Series A1 non-recourse funding obligations had a balance of $400 million and accrued interest at 7.375%, the Series A2 non-recourse funding obligations had a balance of $100 million and accrued interest at 8.00%, and the Series A3 non-recourse funding obligations had a balance of $300 million and accrued interest at 8.45%. As a result of the transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. The contribution of the non-recourse funding obligations from PLC to the Company, and the subsequent contribution of the obligations by the Company to Golden Gate, was recognized based on the respective carrying value of the obligations, which was approximately $1.15 billion. This carrying value included a premium over the outstanding principal balance of the note issuances due to the effect of purchase accounting applied as a result of the Merger on February 1, 2015. As of the transaction date, the respective carrying value of the non-recourse funding obligation asset previously held by PLC was also approximately $1.15 billion; therefore this transaction did not result in the recognition of a gain or loss for PLC or the Company.

Golden Gate II Captive Insurance Company

Golden Gate II Captive Insurance Company (“Golden Gate II”), a South Carolina special purpose financial captive insurance company and wholly owned subsidiary, had $575 million of outstanding non-recourse funding obligations as of June 30, 2016 (Successor Company). These outstanding non-recourse funding obligations were issued to special purpose trusts, which in turn issued securities to third parties. Certain of our affiliates own a portion of these securities. As of June 30, 2016 (Successor Company), securities related to $133.6 million of the outstanding balance of the non-recourse funding obligations were held by external parties, securities related to $145.3 million of the non-recourse funding obligations were held by nonconsolidated affiliates, and $296.1 million were held by consolidated subsidiaries of the Company. PLC has entered into certain support agreements with Golden Gate II obligating it to make capital contributions or provide support related to certain of Golden Gate II’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate II. These support agreements provide that amounts would become payable by PLC to Golden Gate II if its annual general corporate expenses were higher than modeled amounts or if Golden Gate II’s investment income on certain investments or premium income was below certain actuarially determined amounts. As of June 30, 2016 (Successor Company), no payments have been made under these agreements; however, certain support agreement obligations to Golden Gate II of approximately $1.5 million have been collateralized by PLC. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreements.  There are no support agreements between the Company and Golden Gate II.

During the six months ended June 30, 2016 (Successor Company), the Company and its affiliates repurchased $11.3 million of its outstanding non-recourse funding obligations, at a discount. These repurchases did not result in a material gain or loss for the Company. During the period of February 1, 2015 to June 30, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not repurchase any of its outstanding non-recourse funding obligations.

Golden Gate V Vermont Captive Insurance Company

On October 10, 2012, Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”), a Vermont special purpose financial insurance company and Red Mountain, LLC (“Red Mountain”), both wholly owned subsidiaries, entered into a 20-year transaction to finance up to $945 million of “AXXX” reserves related to a block of universal life insurance policies with secondary guarantees issued by the Company and its subsidiary, West Coast Life Insurance Company (“WCL”). Golden Gate V issued non-recourse funding obligations to Red Mountain, and Red Mountain issued a note with an initial principal amount of $275 million, increasing to a maximum of $945 million in 2027, to Golden Gate V for deposit to a reinsurance trust supporting Golden Gate V’s obligations under a reinsurance agreement with WCL, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. Through the structure, Hannover Life Reassurance Company of America (“Hannover Re”), the ultimate risk taker in the transaction, provides credit enhancement to the Red Mountain note for the 20-year term in exchange for a fee. The transaction is “non-recourse” to Golden Gate V, Red Mountain, WCL, PLC, and the Company, meaning that none of these companies are liable for the reimbursement of any credit enhancement payments required to be made. As of June 30, 2016 (Successor Company), the principal balance of the Red Mountain note was $535 million. Future scheduled capital contributions to prefund credit enhancement fees amount to approximately $134.2 million and will be paid in annual installments through 2031. In connection with the transaction, PLC has entered into certain support agreements under which PLC guarantees or otherwise supports certain obligations of Golden Gate V or Red Mountain. The support agreements provide that amounts would become payable by PLC if Golden Gate V’s annual general corporate expenses were higher than modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, PLC has entered into separate agreements to indemnify Golden Gate V with respect to material adverse changes in non-guaranteed elements of insurance policies reinsured by Golden Gate V, and to guarantee payment of certain fee amounts in connection with the credit enhancement of the Red Mountain note. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

In connection with the transaction outlined above, Golden Gate V had a $535 million outstanding non-recourse funding obligation as of June 30, 2016 (Successor Company). This non-recourse funding obligation matures in 2037, has scheduled increases in principal to a maximum of $945 million, and accrues interest at a fixed annual rate of 6.25%.

Non-recourse funding obligations outstanding as of June 30, 2016 (Successor Company), on a consolidated basis, are shown in the following table:

			Maturity	Year-to-Date Weighted-Avg
Issuer	Carrying Value(1)		Year	Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	2,153,000	2039	4.75	%
Golden Gate II Captive Insurance Company	226,912		2052	1.29	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	598,863		2037	5.12	%
MONY Life Insurance Company(3)	2,496		2024	6.19	%
Total	$	2,981,271

(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.

(2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company.

(3)  Fixed rate obligations.

Letters of Credit

Golden Gate III Vermont Captive Insurance Company

     Golden Gate III Vermont Captive Insurance Company (“Golden Gate III”), a Vermont special purpose financial insurance company and wholly owned subsidiary, is party to a Reimbursement Agreement (the “Reimbursement Agreement”) with UBS AG, Stamford Branch (“UBS”), as issuing lender. Under the original Reimbursement Agreement, dated April 23, 2010, UBS issued a letter of credit (the “LOC”) in the initial amount of $505 million to a trust for the benefit of WCL. The Reimbursement Agreement was subsequently amended and restated effective November 21, 2011 (the “First Amended and Restated Reimbursement Agreement”), to replace the existing LOC with one or more letters of credit from UBS, and to extend the maturity date from April 1, 2018, to April 1, 2022. On August 7, 2013, Golden Gate III entered into a Second Amended and Restated Reimbursement Agreement with UBS (the “Second Amended and Restated Reimbursement Agreement”), which amended and restated the First Amended and Restated Reimbursement Agreement. Under the Second and Amended and Restated Reimbursement Agreement a new LOC in an initial amount of $710 million was issued by UBS in replacement of the existing LOC issued under the First Amended and Restated Reimbursement Agreement. The term of the LOC was extended from April 1, 2022 to October 1, 2023, subject to certain conditions being satisfied including scheduled capital contributions being made to Golden Gate III by one of its affiliates. The maximum stated amount of the LOC was increased from $610 million to $720 million in 2016 if certain conditions had been met. On June 25, 2014, Golden Gate III entered into a Third Amended and Restated Reimbursement Agreement with UBS (the “Third Amended and Restated Reimbursement Agreement”), which amended and restated the Second Amended and Restated Reimbursement Agreement. Under the Third Amended and Restated Reimbursement Agreement, a new LOC in an initial amount of $915 million was issued by UBS in replacement of the existing LOC issued under the Second Amended and Restated Reimbursement Agreement. The term of the LOC was extended from October 1, 2023 to April 1, 2025, subject to certain conditions being satisfied including scheduled capital contributions being made to Golden Gate III by one of its affiliates. The maximum stated amount of the LOC was increased from $720 million to $935 million in 2015. The LOC is held in trust for the benefit of WCL, and supports certain obligations of Golden Gate III to WCL under an indemnity reinsurance agreement originally effective April 1, 2010, as amended and restated on November 21, 2011, and as further amended and restated on August 7, 2013 and on June 25, 2014 to include additional blocks of policies, and pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. The LOC balance reached its scheduled peak amount of $935 million in 2015 and remained as this level as of June 30, 2016 (Successor Company). The term of the LOC is expected to be approximately 15 years from the original issuance date. This transaction is “non-recourse” to WCL, PLC, and the Company, meaning that none of these companies other than Golden Gate III are liable for reimbursement on a draw of the LOC. PLC has entered into certain support agreements with Golden Gate III obligating PLC to make capital contributions or provide support related to certain of Golden Gate III’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate III. Future scheduled capital contributions amount to approximately $122.5 million and will be paid in three installments with the last payment occurring in 2021, and these contributions may be subject to potential offset against dividend payments as permitted under the terms of the Third Amended and Restated Reimbursement Agreement. The support agreements provide that amounts would become payable by PLC to Golden Gate III if Golden Gate III’s annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate III. Pursuant to the terms of an amended and restated letter agreement with UBS, PLC has continued to guarantee the payment of fees to UBS as specified in the Third Amended and Restated Reimbursement Agreement. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

Golden Gate IV Vermont Captive Insurance Company

Golden Gate IV Vermont Captive Insurance Company (“Golden Gate IV”), a Vermont special purpose financial insurance company and wholly owned subsidiary, is party to a Reimbursement Agreement with UBS AG, Stamford Branch, as issuing lender. Under the Reimbursement Agreement, dated December 10, 2010, UBS issued an LOC in the initial amount of $270 million to a trust for the benefit of WCL. The LOC balance, in accordance with the terms of the Reimbursement Agreement, reached its scheduled peak amount of $790 million as of June 30, 2016 (Successor Company). The term of the LOC is expected to be 12 years from the original issuance date (stated maturity of December 30, 2022). The LOC was issued to support certain obligations of Golden Gate IV to WCL under an indemnity reinsurance agreement, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. This transaction is “non-recourse” to WCL, PLC, and the Company, meaning that none of these companies other than Golden Gate IV are liable for reimbursement on a draw of the LOC. PLC has entered into certain support agreements with Golden Gate IV obligating PLC to make capital contributions or provide support related to certain of Golden Gate IV’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate IV. The support agreements provide that amounts would become payable by PLC to Golden Gate IV if Golden Gate IV’s annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate IV. PLC has also entered into a separate agreement to guarantee the payments of LOC fees under the terms of the Reimbursement Agreement. As of June 30, 2016 (Successor Company), no payments have been made under these agreements.

Repurchase Program Borrowings

While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of June 30, 2016 (Successor Company), the fair value of securities pledged under the repurchase program was $177.5 million and the repurchase obligation of $160.0 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 42 basis points). During the six months ended June 30, 2016 (Successor Company), the maximum balance outstanding at any one point in time related to these programs was $725.0 million. The average daily balance was $464.5 million (at an average borrowing rate of 40 basis points) during the six months ended June 30, 2016 (Successor Company). As of December 31, 2015 (Successor Company), the fair value of securities pledged under the repurchase program was $479.9 million and the repurchase obligation of $438.2 million was included in the Company's consolidated condensed balance sheets. During 2015, the maximum balance outstanding at any one point in time related to these programs was $912.7 million. The average daily balance was $540.3 million and $77.4 million (at an average borrowing rate of 20 and 16 basis points) during the period of February 1, 2015 to December 31, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

The following table provides the amount of collateral pledged for repurchase agreements, grouped by asset class, as of June 30, 2016 (Successor Company):

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of June 30, 2016 (Successor Company)
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	—	$	—	$	—	$	—	$	—
State and municipal securities	—		—		—		—		—
Other asset-backed securities	—		—		—		—		—
Corporate securities	—		—		—		—		—
Equity securities	—		—		—		—		—
Non-U.S. sovereign debt	—		—		—		—		—
Mortgage loans	177,463		—		—		—		177,463
Other asset-backed securities	—		—		—		—		—
Total borrowings	$	177,463	$	—	$	—	$	—	$	177,463

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Under insurance guaranty fund laws, in most states insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. In addition, from time to time, companies may be asked to contribute amounts beyond prescribed limits. Most insurance guaranty fund laws provide that an assessment may be excused or deferred if it would threaten an insurer’s own financial strength. The Company does not believe its insurance guaranty fund assessments will be materially different from amounts already provided for in the financial statements.

A number of civil jury verdicts have been returned against insurers, broker dealers and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. Public companies in general and the financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters.

The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures and estimates of reasonably possible losses or range of loss based on such reviews.

In 2012, the IRS proposed favorable and unfavorable adjustments to the Company’s 2003 through 2007 reported taxable income. The Company protested certain unfavorable adjustments and sought resolution at the IRS’ Appeals Division. In October 2015, Appeals accepted the Company’s earlier proposed settlement offer. In September 2015, the IRS proposed favorable and unfavorable adjustments to the Company’s 2008 through 2011 reported taxable income. The Company agreed to these adjustments. As a result, pending a routine review by Congress’ Joint Committee on Taxation, the Company expects to receive an approximate $6.2 million net tax refund in a future period. This refund will not materially affect the Company’s effective tax rate.

Certain of the Company’s insurance subsidiaries, as well as certain other insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including uncertainty as to the legal theory or theories that may give rise to liability, the early stages of the audits being conducted, and, with respect to one block of life insurance policies that is co-insured by a subsidiary of the Company, uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with such policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits probable or reasonably estimable.

Certain of the Company’s subsidiaries are under a targeted multi-state examination with respect to their claims paying practices and their use of the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”) to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed, and substantial legal authority exists to support the position that the prevailing industry practice was lawful. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements. The Company believes it is reasonably possible that insurance regulators could demand from the Company administrative and/or examination fees relating to the targeted multi-state examination. Based on publicly reported payments by other life insurers, the Company estimates the range of such fees to be from$0 to $4.5 million.

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EMPLOYEE BENEFIT PLANS

6 Months Ended

Jun. 30, 2016

Pension and Other Postretirement Benefit Expense [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Beginning with the December 31, 2015 measurement, PLC changed its method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefits by applying a spot rate approach. Historically, PLC utilized a single weighted average discount rate derived from a selected yield curve used to measure the benefit obligation as of the measurement date. Under the new spot rate approach, the actual calculation of service and interest cost will reflect an array of spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. PLC made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot rates from the selected yield curve. This new approach does not affect the measurement of the total benefit obligation.

Components of the net periodic benefit cost for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), are as follows:

	Successor Company																				Predecessor Company
	For The Three Months Ended June 30, 2016					For The Three Months Ended June 30, 2015					For The Six Months Ended June 30, 2016					February 1, 2015 to June 30, 2015					January 1, 2015 to January 31, 2015
	Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan
	(Dollars In Thousands)																				(Dollars In Thousands)
Service cost — benefits earned during the period	$	2,906		$	313	$	2,973		$	333	$	5,812		$	625	$	4,955		$	555	$	974		$	95
Interest cost on projected benefit obligation	2,737			438		2,433			408		5,474			877		4,055			680		1,002			140
Expected return on plan assets	(3,605		)	—		(3,642		)	—		(7,211		)	—		(6,070		)	—		(1,293		)	—
Amortization of prior service cost	—			—		—			—		—			—		—			—		(33		)	1
Amortization of actuarial losses	—			—		—			—		—			—		—			—		668			138
Preliminary net periodic benefit cost	2,038			751		1,764			741		4,075			1,502		2,940			1,235		1,318			374
Settlement/curtailment expense	—			1,500		—			—		—			1,500		—			—		—			—
Total net periodic benefit costs	$	2,038		$	2,251	$	1,764		$	741	$	4,075		$	3,002	$	2,940		$	1,235	$	1,318		$	374

On May 5, 2016, the Board of Directors of Protective Life Corporation decided to convert the accrued benefit payable under the excess benefit plan as of March 31, 2016 to John D. Johns, PLC's Chairman and Chief Executive Officer, into a lump sum amount. Upon the completion of the final terms of the conversion agreement, the lump sum amount will be allocated to a book entry account that will be treated as though it were a deferral account under PLC’s deferred compensation plan for officers. Mr. Johns will continue to accrue benefits with respect to his continued service as an employee of PLC after March 31, 2016 in a manner that is consistent with the provisions of the excess benefit plan. The conversion event will require PLC to re-measure the excess benefit plan and will result in settlement expense recognition upon the completion of the final conversion agreement. PLC estimates that the re-measurement of the excess benefit plan will result in the recognition of $1.5 million in settlement expense and has been accrued during the three months ended June 30, 2016 (Successor Company). Financial re-measurement of the excess benefit plan will be performed as soon as the conversion agreement is in place.

During the six months ended June 30, 2016 (Successor Company), PLC did not make a contribution to its defined benefit pension plan. PLC will make contributions in future periods as necessary to at least satisfy minimum funding requirements. PLC may also make additional contributions in future periods to maintain an adjusted funding target attainment percentage (“AFTAP”) of at least 80% and to avoid certain Pension Benefit Guaranty Corporation (“PBGC”) reporting triggers.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Jun. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of June 30, 2016 (Successor Company), December 31, 2015 (Successor Company), and January 31, 2015 (Predecessor Company).

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Successor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives		Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, December 31, 2015	$	(1,246,391	)	$	—	$	(1,246,391	)
Other comprehensive income (loss) before reclassifications	1,017,335			—		1,017,335
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(2,572		)	—		(2,572		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(12,274		)	—		(12,274		)
Net current-period other comprehensive income (loss)	1,002,489			—		1,002,489
Ending Balance, June 30, 2016	$	(243,902	)	$	—	$	(243,902	)

(1) See Reclassification table below for details.

(2) As of June 30, 2016 net unrealized losses reported in AOCI were offset by $139.3 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Successor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives			Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, February 1, 2015	$	—		$	—		$	—
Other comprehensive income (loss) before reclassifications	(1,263,367		)	(86		)	(1,263,453		)
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(393		)	—			(393		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	17,369			86			17,455
Net current-period other comprehensive income (loss)	(1,246,391		)	—			(1,246,391		)
Ending Balance, December 31, 2015	$	(1,246,391	)	$	—		$	(1,246,391	)

(1) See Reclassification table below for details.

(2) As of December 31, 2015 net unrealized losses reported in AOCI were offset by $623.0 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Predecessor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives			Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, December 31, 2014	$	1,483,293		$	(82	)	$	1,483,211
Other comprehensive income (loss) before reclassifications	482,143			9			482,152
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(243		)	—			(243		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(4,166		)	23			(4,143		)
Net current-period other comprehensive income (loss)	477,734			32			477,766
Ending Balance, January 31, 2015	$	1,961,027		$	(50	)	$	1,960,977

(1) See Reclassification table below for details.

(2) As of January 31, 2015 net unrealized losses reported in AOCI were offset by $(492.6) million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

The following tables summarize the reclassifications amounts out of AOCI for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For the Three Months Ended June 30, 2016
	(Dollars In Thousands)
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	16,932		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(967		)	Net impairment losses recognized in earnings
	15,965			Total before tax
	(5,588		)	Tax (expense) or benefit
	$	10,377		Net of tax

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For The Six Months Ended June 30, 2016
	(Dollars In Thousands)
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	22,468		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(3,584		)	Net impairment losses recognized in earnings
	18,884			Total before tax
	(6,610		)	Tax (expense) or benefit
	$	12,274		Net of tax

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For The Three Months Ended June 30, 2015
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(41	)	Benefits and settlement expenses, net of reinsurance ceded
	(41		)	Total before tax
	14			Tax (expense) or benefit
	$	(27	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	3,350		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(5,734		)	Net impairment losses recognized in earnings
	(2,384		)	Total before tax
	834			Tax (expense) or benefit
	$	(1,550	)	Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
February 1, 2015 to June 30, 2015
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(131	)	Benefits and settlement expenses, net of reinsurance ceded
	(131		)	Total before tax
	45			Tax (expense) or benefit
	$	(86	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	3,723		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(5,734		)	Net impairment losses recognized in earnings
	(2,011		)	Total before tax
	703			Tax (expense) or benefit
	$	(1,308	)	Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Predecessor Company January 1, 2015 to January 31, 2015	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(36	)	Benefits and settlement expenses, net of reinsurance ceded
	(36		)	Total before tax
	13			Tax (expense) or benefit
	$	(23	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	6,891		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(481		)	Net impairment losses recognized in earnings
	6,410			Total before tax
	(2,244		)	Tax (expense) or benefit
	$	4,166		Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

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INCOME TAXES

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Successor Company						Predecessor Company
	As of June 30, 2016			February 1, 2015 to December 31, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Balance, beginning of period	$	8,937		$	105,850		$	168,076
Additions for tax positions of the current year	1,218			2,213			(5,010		)
Additions for tax positions of prior years	—			1,812			1,149
Reductions of tax positions of prior years:	0
Changes in judgment	—			(644		)	(58,365		)
Settlements during the period	(710		)	(100,294		)	—
Lapses of applicable statute of limitations	—			—			—
Balance, end of period	$	9,445		$	8,937		$	105,850

In 2012, the IRS proposed favorable and unfavorable adjustments to the Company's 2003 through 2007 reported taxable income. The Company protested certain unfavorable adjustments and sought resolution at the IRS' Appeals Division. In October 2015, Appeals accepted the Company's earlier proposed settlement offer. In September of 2015, the IRS proposed favorable and unfavorable adjustments to the Company's 2008 through 2011 reported taxable income. The Company agreed to these adjustments. The resulting net adjustment to the Company's current income taxes for the years 2003 through 2011 will not materially affect the Company or its effective tax rate. The Company is currently under audit by the IRS for the years 2012 and 2013. The audit adjustments received as of June 30, 2016 related to the 2012 and 2013 years will not materially impact the Company or its effective tax rate. These agreements with the IRS are the primary cause for the reductions of unrecognized tax benefits shown in the chart above.

The Company believes that it is possible in the next 12 months, approximately $0.5 million of these unrecognized tax benefits will be reduced due to time lapse and the closure of the statute of limitations.

In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2012. Nevertheless, certain of these pre-2012 years have pending U.S. tax refunds. Due to their size, these refunds are being reviewed by Congress' Joint Committee on Taxation. Furthermore, due to the aforementioned IRS adjustments to the Company's pre-2012 taxable income, the Company is amending certain of its 2003 through 2011 state income tax returns. Such amendments will cause such years to remain open, pending the states' acceptances of the returns. At this time, the Company believes that the Joint Committee's review of its U.S. tax refunds and the states' acceptance of its amending returns will be completed this year. The underlying statutes of limitations are expected to close in due course on or before June 30, 2017.

During the six months ended June 30, 2016 (Successor Company), the Company entered into a reinsurance transaction, as discussed in Note 3, Reinsurance and Financing Transactions. This transaction is expected to generate an operating loss on the Company’s consolidated 2016 US income tax return. The Company has evaluated its ability to carry this loss back to receive refunds of previously-paid taxes, plus utilize the remaining loss in future years. The Company expects to receive refunds for substantially all of the US income taxes that it paid in 2014 and 2015, as well as fully utilize the remaining operating loss carryforward during the carryforward period. Based on the Company’s current assessment of future taxable income, including available tax planning opportunities, the Company anticipates that it is more likely than not that it will generate sufficient taxable income to realize all of its material deferred tax assets. The Company did not record a valuation allowance against its material deferred tax assets as of June 30, 2016.

The Company used its respective estimates of its annual 2016 and 2015 incomes in computing its effective income tax rates for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company). The effective tax rates for the three and six months ended June 30, 2016 (Successor Company), the three months June 30, 2015 (Successor Company) the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company) were 33.7%, 33.1%, 28.1%, 17.0%, and 32.8%, respectively.

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OPERATING SEGMENTS

6 Months Ended

Jun. 30, 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, independent marketing organizations and affinity groups.

• 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 and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 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 June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Revenues
Life Marketing	$	384,823		$	347,691		$	765,897		$	602,613		$	133,361
Acquisitions	453,848			363,985			878,655			622,774			139,761
Annuities	188,597			43,468			407,113			92,812			130,918
Stable Value Products	26,237			16,656			56,139			26,998			8,181
Asset Protection	76,419			77,625			150,098			126,921			24,566
Corporate and Other	44,918			13,528			76,842			31,796			22,859
Total revenues	$	1,174,842		$	862,953		$	2,334,744		$	1,503,914		$	459,646
Segment Operating Income (Loss)
Life Marketing	$	25,098		5,672			38,224			$	9,953		$	(2,271	)
Acquisitions	45,285			37,876			113,938			73,946			20,134
Annuities	47,480			40,513			92,756			71,886			11,363
Stable Value Products	15,178			9,349			29,626			15,464			4,529
Asset Protection	4,141			4,880			8,397			8,523			1,907
Corporate and Other	(30,248		)	(36,374		)	(64,990		)	(50,331		)	(16,662		)
Total segment operating income	106,934			61,916			217,951			129,441			19,000
Realized investment (losses) gains - investments(1)	100,889			(115,716		)	184,031			(158,649		)	89,414
Realized investment (losses) gains - derivatives	52,757			18,233			93,577			18,177			24,433
Income tax (expense) benefit	(87,787		)	9,991			(164,149		)	1,875			(44,325		)
Net income (loss)	$	172,793		$	(25,576	)	$	331,410		$	(9,156	)	$	88,522
All other investment gains (losses)	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672
Less: amortization related to DAC/VOBA and benefits and settlement expenses	(13,073		)	7,635			(17,123		)	15,512			(8,742		)
Realized investment gains (losses) - investments	$	100,889		$	(115,716	)	$	184,031		$	(158,649	)	$	89,414
Derivative financial instruments gains (losses)	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031
Less: VA GMWB economic cost	(9,209		)	(7,667		)	(18,121		)	(12,559		)	(2,402		)
Realized investment gains (losses) - derivatives	$	52,757		$	18,233		$	93,577		$	18,177		$	24,433

(1) Includes credit related other-than-temporary impairments of $1.0 million, $3.6 million, $5.7 million, $5.7 million, and $0.5 million for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively.

	Operating Segment Assets As of June 30, 2016 (Successor Company)
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	13,916,859	$	20,052,484	$	19,873,357	$	2,711,452
Deferred policy acquisition costs and value of business acquired	1,134,643		93,983		625,628		4,353
Other intangibles	310,141		38,380		190,116		9,056
Goodwill	200,274		14,524		336,677		113,813
Total assets	$	15,561,917	$	20,199,371	$	21,025,778	$	2,838,674

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	812,678	$	13,755,465	$	71,122,295
Deferred policy acquisition costs and value of business acquired	36,559		—		1,895,166
Other intangibles	76,782		—		624,475
Goodwill	67,155		—		732,443
Total assets	$	993,174	$	13,755,465	$	74,374,379

	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

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Company has evaluated the effects of events subsequent to June 30, 2016 (Successor Company), and through the date we filed our consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated condensed financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. On February 1, 2015, PLC became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (“Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into PLC (the “Merger”). Prior to February 1, 2015, and for the periods reported as “predecessor”, PLC’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, PLC and the Company remain as SEC registrants within the United States. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products.

In conjunction with the Merger, the Company elected to apply “pushdown” accounting by applying the guidance allowed by ASC Topic 805, Business Combinations, including the initial recognition of most of the Company’s assets and liabilities at fair value as of the acquisition date, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. The new basis of accounting will be the basis of the accounting records for assets and liabilities held at the acquisition date in the preparation of future financial statements and related disclosures after the Merger date.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three and six months ended June 30, 2016 (Successor Company), are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2016 (Successor Company). The year-end consolidated condensed financial data included herein was derived from audited financial statements but does not include all disclosures required by GAAP within this report. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (Successor Company).

The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors.

Entities Included

Entities Included

The consolidated condensed financial statements for the predecessor and successor periods presented in this report include the accounts of Protective Life Insurance Company and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated.

Accounting Pronouncements Recently and Not Yet Adopted

.

Accounting Pronouncements Not Yet Adopted

ASU No. 2014-09-Revenue from Contracts with Customers (Topic 606). This Update provides for significant revisions to the recognition of revenue from contracts with customers across various industries. Under the new guidance, entities are required to apply a prescribed 5-step process to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting for revenues associated with insurance products is not within the scope of this Update. The Update was originally effective for annual and interim periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU No. 2015-14 - Revenues from Contracts with Customers: Deferral of the Effective Date, to defer the effective date of ASU No. 2014-09 by one year to annual and interim periods beginning after December 15, 2017. Early adoption will be allowed, but not before the original effective date. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its non-insurance operations.

ASU No. 2014-15-Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This Update will require management to assess an entity’s ability to continue as a going concern, and will require footnote disclosures in certain circumstances. Under the updated guidance, management should consider relevant conditions and evaluate whether it is probable that the entity will be unable to meet its obligations within one year after the issuance date of the financial statements. The Update is effective for annual periods ending December 31, 2016 and for annual and interim periods thereafter, with early adoption permitted. The amendments in this Update will not impact the Company’s financial position or results of operations. However, the new guidance will require a formal assessment of going concern by management based on criteria prescribed in the new guidance. The Company is reviewing its policies and processes to ensure compliance with the new guidance.

ASU No. 2015-09 - Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts. The amendments in this Update require additional disclosures for short-duration contracts issued by insurance entities. The additional disclosures focus on the liability for unpaid claims and claim adjustment expenses and include incurred and paid claims development information by accident year in tabular form, along with a reconciliation of this information to the statement of financial position. For accident years included in the development tables, the amendments also require disclosure of the total incurred-but-not-reported liabilities and expected development on reported claims, along with claims frequency information unless impracticable. Finally, the amendments require disclosure of the historical average annual percentage payout of incurred claims. With the exception of the current reporting period, claims development information may be presented as supplementary information. The Update is effective for annual periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The Company does not anticipate that the additional disclosures introduced in this Update will be material to its financial statements.

ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, the Update requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017. The Company is reviewing its policies and processes to ensure compliance with the revised guidance.

ASU No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change will relate to the accounting model used by lessees. The Update will require all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the revised guidance.

ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this Update introduce a new impairment model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance its estimate of the contractual cash flows not expected to be collected. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results.

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DAI-ICHI MERGER (Tables)

6 Months Ended

Jun. 30, 2016

DAI-ICHI MERGER

Summary of Fair Values of the Net Assets Acquired

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date:

	Fair Value
	As of
	February 1, 2015
	(Dollars In Thousands)
Assets
Fixed maturities	$	38,342,948
Equity securities	699,081
Mortgage loans	5,580,229
Investment real estate	7,456
Policy loans	1,751,872
Other long-term investments	657,346
Short-term investments	311,236
Total investments	47,350,168
Cash	378,903
Accrued investment income	483,691
Accounts and premiums receivable	104,260
Reinsurance receivables	5,538,637
Value of business acquired	1,278,064
Goodwill	735,712
Other intangibles	683,000
Property and equipment	102,736
Other assets	224,555
Income tax receivable	50,117
Assets related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total assets	$	70,719,618
Liabilities
Future policy and benefit claims	$	30,195,397
Unearned premiums	622,278
Total policy liabilities and accruals	30,817,675
Stable value product account balances	1,932,277
Annuity account balances	10,941,661
Other policyholders’ funds	1,388,083
Other liabilities	1,533,666
Deferred income taxes	1,861,632
Non-recourse funding obligations	1,895,636
Repurchase program borrowings	50,000
Liabilities related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total liabilities	64,210,405
Net assets acquired	$	6,509,213

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MONY CLOSED BLOCK OF BUSINESS (Tables)

6 Months Ended

Jun. 30, 2016

Closed Block Disclosure [Abstract]

Summary of Financial Information of the Policyholder Dividend Obligation

Summarized financial information for the Closed Block as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company) is as follows:

	Successor Company
	As of June 30, 2016		As of December 31, 2015
	(Dollars In Thousands)
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$	5,939,342	$	6,010,520
Policyholder dividend obligation	232,422		—
Other liabilities	13,268		24,539
Total closed block liabilities	6,185,032		6,035,059
Closed block assets
Fixed maturities, available-for-sale, at fair value	$	4,677,305	$	4,426,090
Mortgage loans on real estate	245,997		247,162
Policy loans	726,563		746,102
Cash	—		34,420
Other assets	148,763		162,640
Total closed block assets	5,798,628		5,616,414
Excess of reported closed block liabilities over closed block assets	386,404		418,645
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation of $(9,488) (Successor) and $(179,360) (Successor)	—		(18,597		)
Future earnings to be recognized from closed block assets and closed block liabilities	$	386,404	$	400,048

Schedule of Reconciliation of the Policyholder Dividend Obligation

Reconciliation of the policyholder dividend obligation is as follows:

	Successor Company						Predecessor Company
	For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Policyholder dividend obligation, beginning of period	$	—		$	323,432		$	366,745
Applicable to net revenue (losses)	(28,921		)	(15,096		)	(1,369		)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $5,109 (Successor); $89,618 (2015 - Successor); $47,277 (2015 - Predecessor)	261,343			(256,053		)	135,077
Policyholder dividend obligation, end of period	$	232,422		$	52,283		$	500,453

Schedule of Closed Block Revenues and Expenses

Closed Block revenues and expenses were as follows:

	Successor Company								Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)								(Dollars In Thousands)
Revenues
Premiums and other income	$	47,320	$	49,998	$	91,239	$	81,669	$	15,065
Net investment income	52,008		54,833		102,875		87,681		19,107
Net investment gains	450		2,216		637		2,850		568
Total revenues	99,778		107,047		194,751		172,200		34,740
Benefits and other deductions
Benefits and settlement expenses	92,029		98,975		172,084		154,746		31,152
Other operating expenses	653		263		1,677		474		—
Total benefits and other deductions	92,682		99,238		173,761		155,220		31,152
Net revenues before income taxes	7,096		7,809		20,990		16,980		3,588
Income tax expense	2,484		2,733		7,346		5,943		1,256
Net revenues	$	4,612	$	5,076	$	13,644	$	11,037	$	2,332

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INVESTMENT OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Summary of Net Realized Investment Gains (Losses) for All Other Investments

Net realized gains (losses) for all other investments are summarized as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Fixed maturities	$	16,730		$	3,329		$	22,432		$	3,702		$	6,891
Equity securities	202			21			36			21			—
Impairments on corporate securities	(964		)	(5,734		)	(3,581		)	(5,734		)	(481		)
Modco trading portfolio	76,201			(108,741		)	154,355			(141,901		)	73,062
Other investments	(4,353		)	3,044			(6,334		)	775			1,200
Total realized gains (losses) - investments	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672

Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows:

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Gross realized gains	$	18,752		$	5,425		$	27,781		$	6,932		$	6,920
Gross realized losses	$	(2,784	)	$	(7,809	)	$	(8,894	)	$	(8,943	)	$	(469	)
Impairments losses included in gross realized losses	$	(964	)	$	(5,734	)	$	(3,581	)	$	(5,734	)	$	—

Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale

The amortized cost and fair value of the Company’s investments classified as available-for-sale as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI(1)
Successor Company
As of June 30, 2016
	(Dollars In Thousands)
Fixed maturities:
Residential mortgage-backed securities	$	1,891,316	$	49,750	$	(9,253	)	$	1,931,813	$	(1	)
Commercial mortgage-backed securities	1,552,028		29,870		(3,726		)	1,578,172		—
Other asset-backed securities	1,151,430		5,267		(36,055		)	1,120,642		—
U.S. government-related securities	1,350,769		21,232		(205		)	1,371,796		—
Other government-related securities	18,348		332		—			18,680		—
States, municipals, and political subdivisions	1,727,664		31,429		(21,594		)	1,737,499		—
Corporate securities	28,740,691		373,820		(1,051,924		)	28,062,587		(4,560		)
Preferred stock	64,362		1,732		(1,667		)	64,427		—
	36,496,608		513,432		(1,124,424		)	35,885,616		(4,561		)
Equity securities	673,448		26,392		(5,092		)	694,748		—
Short-term investments	206,157		—		—			206,157		—
	$	37,376,213	$	539,824	$	(1,129,516	)	$	36,786,521	$	(4,561	)
As of December 31, 2015
Fixed maturities:
Residential mortgage-backed securities	$	1,773,099	$	9,286	$	(17,112	)	$	1,765,273	$	—
Commercial mortgage-backed securities	1,327,288		428		(41,852		)	1,285,864		—
Other asset-backed securities	813,056		2,758		(18,763		)	797,051		—
U.S. government-related securities	1,566,260		449		(34,532		)	1,532,177		—
Other government-related securities	18,483		—		(743		)	17,740		—
States, municipals, and political subdivisions	1,729,732		682		(126,814		)	1,603,600		—
Corporate securities	28,433,530		26,147		(2,681,020		)	25,778,657		(605		)
Preferred stock	64,362		192		(1,867		)	62,687		—
	35,725,810		39,942		(2,922,703		)	32,843,049		(605		)
Equity securities	684,888		13,255		(6,477		)	691,666		—
Short-term investments	202,110		—		—			202,110		—
	$	36,612,808	$	53,197	$	(2,929,180	)	$	33,736,825	$	(605	)

(1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above.

Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity

Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Successor Company
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Due in one year or less	$	750,175	$	750,605	$	—	$	—
Due after one year through five years	6,878,977		6,918,323		—		—
Due after five years through ten years	7,673,357		7,783,110		—		—
Due after ten years	21,194,099		20,433,578		2,779,280		2,853,788
	$	36,496,608	$	35,885,616	$	2,779,280	$	2,853,788

Gain (Loss) on Investments

The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Other-than-temporary impairments	$	(5,527	)	$	(13,395	)	$	(8,296	)	$	(13,395	)	$	(636	)
Non-credit impairment losses recorded in other comprehensive income	4,560			7,661			4,712			7,661			155
Net impairment losses recognized in earnings	$	(967	)	$	(5,734	)	$	(3,584	)	$	(5,734	)	$	(481	)

Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Loss)

The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): 

	Successor Company										Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015		For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015		January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Beginning balance	$	2,619		$	—	$	22,761		$	—	$	15,463
Additions for newly impaired securities	964			4,472		3,056			4,472		—
Additions for previously impaired securities	—			—		525			—		221
Reductions for previously impaired securities due to a change in expected cash flows	—			—		(22,759		)	—		—
Reductions for previously impaired securities that were sold in the current period	(2,619		)	—		(2,619		)	—		—
Ending balance	$	964		$	4,472	$	964		$	4,472	$	15,684

Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2016 (Successor Company):

	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	192,301	$	(3,103	)	$	152,965	$	(6,150	)	$	345,266	$	(9,253	)
Commercial mortgage-backed securities	43,965		(283		)	194,550		(3,443		)	238,515		(3,726		)
Other asset-backed securities	90,316		(1,188		)	550,860		(34,867		)	641,176		(36,055		)
U.S. government-related securities	1,283		(5		)	57,372		(200		)	58,655		(205		)
Other government-related securities	—		—			—		—			—		—
States, municipalities, and political subdivisions	34,112		(274		)	718,798		(21,320		)	752,910		(21,594		)
Corporate securities	2,336,766		(128,908		)	13,476,384		(923,016		)	15,813,150		(1,051,924		)
Preferred stock	—		—			19,271		(1,667		)	19,271		(1,667		)
Equities	55,137		(1,225		)	87,602		(3,867		)	142,739		(5,092		)
	$	2,753,880	$	(134,986	)	$	15,257,802	$	(994,530	)	$	18,011,682	$	(1,129,516	)

The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position.

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Securities in an unrealized gain position:
Fair value (proceeds)	$	513,544		$	430,058		$	819,775		$	712,938		$	172,551
Gains realized	$	18,752		$	5,425		$	27,781		$	6,932		$	6,920
Securities in an unrealized loss position(1):
Fair value (proceeds)	$	6,895		$	28,644		$	60,582		$	49,326		$	435
Losses realized(2)	$	(1,820	)	$	(2,075	)	$	(5,313	)	$	(3,209	)	$	(29	)
(1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process.
(2) The losses realized for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), were immaterial to the Company.

Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale

The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2015 (Successor Company):

	Less Than 12 Months					12 Months or More				Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(Dollars In Thousands)
Residential mortgage-backed securities	$	977,433	$	(17,112	)	$	—	$	—	$	977,433	$	(17,112	)
Commercial mortgage-backed securities	1,232,495		(41,852		)	—		—		1,232,495		(41,852		)
Other asset-backed securities	633,274		(18,763		)	—		—		633,274		(18,763		)
U.S. government-related securities	1,291,476		(34,532		)	—		—		1,291,476		(34,532		)
Other government-related securities	17,740		(743		)	—		—		17,740		(743		)
States, municipalities, and political subdivisions	1,566,752		(126,814		)	—		—		1,566,752		(126,814		)
Corporate securities	24,235,121		(2,681,020		)	—		—		24,235,121		(2,681,020		)
Preferred stock	34,685		(1,867		)	—		—		34,685		(1,867		)
Equities	248,493		(6,477		)	—		—		248,493		(6,477		)
	$	30,237,469	$	(2,929,180	)	$	—	$	—	$	30,237,469	$	(2,929,180	)

The change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale is summarized as follows:

	Successor Company										Predecessor Company
	For The Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Fixed maturities	$	845,933	$	(1,039,827	)	$	1,476,650	$	(1,383,066	)	$	669,160
Equity securities	9,509		(9,048		)	9,439		(7,537		)	12,172

Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity

The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of June 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI
Successor Company
As of June 30, 2016
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain LLC	$	626,280	$	—	$	(22,879	)	$	603,401	$	—
Steel City LLC	2,153,000		97,387		—			2,250,387		—
	$	2,779,280	$	97,387	$	(22,879	)	$	2,853,788	$	—
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Total OTTI Recognized in OCI
Successor Company
As of December 31, 2015
	(Dollars In Thousands)
Fixed maturities:
Securities issued by affiliates:
Red Mountain LLC	$	593,314	$	—	$	(78,314	)	$	515,000	$	—
	$	593,314	$	—	$	(78,314	)	$	515,000	$	—

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

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

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 (Successor Company):

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,931,810	$	3	$	1,931,813
Commercial mortgage-backed securities	—		1,578,172		—		1,578,172
Other asset-backed securities	—		587,501		533,141		1,120,642
U.S. government-related securities	1,108,503		263,293		—		1,371,796
State, municipalities, and political subdivisions	—		1,737,499		—		1,737,499
Other government-related securities	—		18,680		—		18,680
Corporate securities	—		27,279,444		783,143		28,062,587
Preferred stock	45,155		19,272		—		64,427
Total fixed maturity securities - available-for-sale	1,153,658		33,415,671		1,316,287		35,885,616
Fixed maturity securities - trading
Residential mortgage-backed securities	—		271,994		—		271,994
Commercial mortgage-backed securities	—		157,176		—		157,176
Other asset-backed securities	—		123,076		151,964		275,040
U.S. government-related securities	41,639		4,868		—		46,507
State, municipalities, and political subdivisions	—		362,504		—		362,504
Other government-related securities	—		60,261		—		60,261
Corporate securities	—		1,595,943		16,587		1,612,530
Preferred stock	3,432		147		—		3,579
Total fixed maturity securities - trading	45,071		2,575,969		168,551		2,789,591
Total fixed maturity securities	1,198,729		35,991,640		1,484,838		38,675,207
Equity securities	636,270		—		66,526		702,796
Other long-term investments (1)	311,141		266,478		62,920		640,539
Short-term investments	240,841		3,522		—		244,363
Total investments	2,386,981		36,261,640		1,614,284		40,262,905
Cash	295,143		—		—		295,143
Assets related to separate accounts
Variable annuity	12,891,214		—		—		12,891,214
Variable universal life	831,818		—		—		831,818
Total assets measured at fair value on a recurring basis	$	16,405,156	$	36,261,640	$	1,614,284	$	54,281,080
Liabilities:
Annuity account balances(2)	$	—	$	—	$	88,820	$	88,820
Other liabilities (1)	59,711		142,794		581,046		783,551
Total liabilities measured at fair value on a recurring basis	$	59,711	$	142,794	$	669,866	$	872,371

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (Successor Company):

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,765,270	$	3	$	1,765,273
Commercial mortgage-backed securities	—		1,285,864		—		1,285,864
Other asset-backed securities	—		210,020		587,031		797,051
U.S. government-related securities	1,054,353		477,824		—		1,532,177
State, municipalities, and political subdivisions	—		1,603,600		—		1,603,600
Other government-related securities	—		17,740		—		17,740
Corporate securities	83		24,876,455		902,119		25,778,657
Preferred stock	43,073		19,614		—		62,687
Total fixed maturity securities - available-for-sale	1,097,509		30,256,387		1,489,153		32,843,049
Fixed maturity securities - trading
Residential mortgage-backed securities	—		286,658		—		286,658
Commercial mortgage-backed securities	—		146,743		—		146,743
Other asset-backed securities	—		122,511		152,912		275,423
U.S. government-related securities	233,592		4,755		—		238,347
State, municipalities, and political subdivisions	—		313,354		—		313,354
Other government-related securities	—		58,827		—		58,827
Corporate securities	—		1,322,276		18,225		1,340,501
Preferred stock	2,794		1,402		—		4,196
Total fixed maturity securities - trading	236,386		2,256,526		171,137		2,664,049
Total fixed maturity securities	1,333,895		32,512,913		1,660,290		35,507,098
Equity securities	620,358		13,063		66,504		699,925
Other long-term investments (1)	113,699		141,487		68,384		323,570
Short-term investments	261,659		2,178		—		263,837
Total investments	2,329,611		32,669,641		1,795,178		36,794,430
Cash	212,358		—		—		212,358
Assets related to separate accounts
Variable annuity	12,829,188		—		—		12,829,188
Variable universal life	827,610		—		—		827,610
Total assets measured at fair value on a recurring basis	$	16,198,767	$	32,669,641	$	1,795,178	$	50,663,586
Liabilities:
Annuity account balances (2)	$	—	$	—	$	92,512	$	92,512
Other liabilities (1)	40,067		106,310		375,848		522,225
Total liabilities measured at fair value on a recurring basis	$	40,067	$	106,310	$	468,360	$	614,737

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

Schedule of Valuation Method for Material Financial Instruments Included in Level 3, as Well as the Unobservable Inputs Used in the Valuation of Those Financial Instruments

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Successor Company
	Fair Value As of December 31, 2015		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	587,031	Discounted cash flow	Liquidity premium	0.27% - 1.49% (0.42%)
				Paydown rate	10.20% - 14.72% (13.11%)
Corporate securities	875,810		Discounted cash flow	Spread over	0.10% - 19.00% (2.61%)
				treasury
Liabilities:
Embedded derivatives - GMWB(1)	$	18,511	Actuarial cash flow model	Mortality	1994 MGDB table with
					company experience
				Lapse	0.3% - 15%, depending on
					product/duration/funded
					status of guarantee
				Utilization	99%. 10% of policies have
					a one-time over-utilization
					of 400%
				Nonperformance risk	0.18% - 1.04%
Annuity account balances(2)	92,512		Actuarial cash flow model	Asset earned rate	4.53% - 5.67%
				Expenses	$81 per policy
				Withdrawal rate	2.20%
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.2% - 33.0%, depending
					on duration/surrender
					charge period
				Return on assets	1.50% - 1.85% depending on
					surrender charge period
				Nonperformance risk	0.18% - 1.04%
Embedded derivative - FIA	100,329		Actuarial cash flow model	Expenses	$81.50 per policy
				Withdrawal rate	1.1% - 4.5% depending on
					duration and tax qualification
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.5% - 40.0%, depending
					on duration/surrender
					charge period
				Nonperformance risk	0.18% - 1.04%
Embedded derivative - IUL	29,629		Actuarial cash flow model	Mortality	38% - 153% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending
					on duration/distribution
					channel and smoking class
				Nonperformance risk	0.18% - 1.04%

(1)The fair value for the GMWB embedded derivative is presented as a net liability, for the purposes of this chart.  Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments:

	Successor Company
	Fair Value As of June 30, 2016		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	524,166	Discounted cash flow	Liquidity premium	0.24% - 1.14% (0.55%)
				Paydown rate	9.37% - 11.91% (10.16%)
Corporate securities	758,312		Discounted cash flow	Spread over treasury	0.70% - 6.25% (2.45%)
Liabilities:
Embedded derivatives - GMWB(1)	$	151,212	Actuarial cash flow model	Mortality	1994 MGDB table with
					company experience
				Lapse	0.3% - 15%, depending on
					product/duration/funded
					status of guarantee
				Utilization	99%. 10% of policies have
					a one-time over-utilization
					of 400%
				Nonperformance risk	0.22% - 1.20%
Annuity account balances(2)	88,820		Actuarial cash flow model	Asset earned rate	4.53% - 5.67%
				Expenses	$83 per policy
				Withdrawal rate	2.20%
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.2% - 33.0%, depending
					on duration/surrender
					charge period
				Return on assets	1.50% - 1.85% depending on
					surrender charge period
				Nonperformance risk	0.22% - 1.20%
Embedded derivative - FIA	119,997		Actuarial cash flow model	Expenses	$83 per policy
				Withdrawal rate	1.1% - 4.5% depending on
					duration and tax qualification
				Mortality	1994 MGDB table with
					company experience
				Lapse	2.5% - 40.0%, depending on
					on duration/surrender
					charge period
				Nonperformance risk	0.22% - 1.20%
Embedded derivative - IUL	46,711		Actuarial cash flow model	Mortality	38% - 153% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on
					duration/distribution channel
					and smoking class
				Nonperformance risk	0.22% - 1.20%

(1)The fair value for the GMWB embedded derivative is presented as a net liability for the purposes of this chart. Excludes modified coinsurance arrangements.

(2)Represents liabilities related to fixed indexed annuities.

Schedule of Reconciliation of the Beginning and Ending Balances for Fair Value Measurements, for Which the Company Has Used Significant Unobservable Inputs (Level 3)

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for period of January 1, 2015 to January 31, 2015 (Predecessor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																						Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3		Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	3	$	—
Other asset-backed securities	563,961		—		—		—			(3,867		)	—		(32		)	—		—		43,205		379			603,646		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		—			—		—		—		—			3,675		—
Corporate securities	1,325,683		—		12,282		—			(23,029		)	—		(7,062		)	—		—		—		(615		)	1,307,259		—
Total fixed maturity securities - available-for-sale	1,893,322		—		12,282		—			(26,896		)	—		(7,094		)	—		—		43,205		(236		)	1,914,583		—
Fixed maturity securities - trading
Other asset-backed securities	169,461		586		—		(139		)	—			—		(472		)	—		—		—		37			169,473		447
Corporate securities	24,744		602		—		(196		)	—			—		(20		)	—		—		—		—			25,130		406
Total fixed maturity securities - trading	194,205		1,188		—		(335		)	—			—		(492		)	—		—		—		37			194,603		853
Total fixed maturity securities	2,087,527		1,188		12,282		(335		)	(26,896		)	—		(7,586		)	—		—		43,205		(199		)	2,109,186		853
Equity securities	66,691		—		—		—			—			—		—			—		—		—		—			66,691		—
Other long-term investments(1)	44,625		16,617		—		(15,166		)	—			—		—			—		—		—		—			46,076		1,451
Short-term investments	—		—		—		—			—			—		—			—		—		—		—			—		—
Total investments	2,198,843		17,805		12,282		(15,501		)	(26,896		)	—		(7,586		)	—		—		43,205		(199		)	2,221,953		2,304
Total assets measured at fair value on a recurring basis	$	2,198,843	$	17,805	$	12,282	$	(15,501	)	$	(26,896	)	$	—	$	(7,586	)	$	—	$	—	$	43,205	$	(199	)	$	2,221,953	$	2,304
Liabilities:
Annuity account balances(2)	$	97,825	$	—	$	—	$	(536	)	$	—		$	—	$	—		$	7	$	419	$	—	$	—		$	97,949	$	—
Other liabilities(1)	506,343		61		—		(125,995		)	—			—		—			—		—		—		—			632,277		(125,934		)
Total liabilities measured at fair value on a recurring basis	$	604,168	$	61	$	—	$	(126,531	)	$	—		$	—	$	—		$	7	$	419	$	—	$	—		$	730,226	$	(125,934	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included  in Earnings		Included  in Other Comprehensive Income		Included  in Earnings			Included  in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	600,132		—		165		(92		)	(9,323		)	—		(87		)	—		—		—			90			590,885		—
Corporate securities	1,283,142		3,656		4,001		(687		)	(24,247		)	89,929		(219,148		)	—		—		(21,803		)	(3,412		)	1,111,431		—
Total fixed maturity securities - available-for-sale	1,883,277		3,656		4,166		(779		)	(33,570		)	89,929		(219,235		)	—		—		(21,803		)	(3,322		)	1,702,319		—
Fixed maturity securities - trading
Other asset-backed securities	170,500		589		—		(5,173		)	—			—		(5,468		)	—		—		—			146			160,594		(4,587		)
Corporate securities	19,614		140		—		(233		)	—			—		(161		)	—		—		—			(44		)	19,316		(93		)
Total fixed maturity securities - trading	190,114		729		—		(5,406		)	—			—		(5,629		)	—		—		—			102			179,910		(4,680		)
Total fixed maturity securities	2,073,391		4,385		4,166		(6,185		)	(33,570		)	89,929		(224,864		)	—		—		(21,803		)	(3,220		)	1,882,229		(4,680		)
Equity securities	66,691		—		—		—			—			—		(231		)	—		—		—			—			66,460		—
Other long-term investments(1)	79,222		24,982		—		(3,685		)	—			—		—			—		—		—			—			100,519		21,297
Total investments	2,219,304		29,367		4,166		(9,870		)	(33,570		)	89,929		(225,095		)	—		—		(21,803		)	(3,220		)	2,049,208		16,617
Total assets measured at fair value on a recurring basis	$	2,219,304	$	29,367	$	4,166	$	(9,870	)	$	(33,570	)	$	89,929	$	(225,095	)	$	—	$	—	$	(21,803	)	$	(3,220	)	$	2,049,208	$	16,617
Liabilities:
Annuity account balances(2)	$	97,108	$	—	$	—	$	(911	)	$	—		$	—	$	—		$	72	$	2,913	$	—		$	—		$	95,178	$	—
Other liabilities(1)	477,729		147,963		—		(13,179		)	—			—		—			—		—		—			—			342,945		134,784
Total liabilities measured at fair value on a recurring basis	$	574,837	$	147,963	$	—	$	(14,090	)	$	—		$	—	$	—		$	72	$	2,913	$	—		$	—		$	438,123	$	134,784

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	537,831		—		769		—			(8,350		)	9,597		(7,629		)	—		—		—			923			533,141		—
Corporate securities	833,737		925		16,189		—			(694		)	9,558		(57,123		)	—		—		(16,773		)	(2,676		)	783,143		—
Total fixed maturity securities - available-for-sale	1,371,571		925		16,958		—			(9,044		)	19,155		(64,752		)	—		—		(16,773		)	(1,753		)	1,316,287		—
Fixed maturity securities - trading
Other asset-backed securities	150,683		1,822		—		(8		)	—			—		(609		)	—		—		—			76			151,964		1,814
Corporate securities	5,677		24		—		—			—			10,908		1			—		—		—			(23		)	16,587		25
Total fixed maturity securities - trading	156,360		1,846		—		(8		)	—			10,908		(608		)	—		—		—			53			168,551		1,839
Total fixed maturity securities	1,527,931		2,771		16,958		(8		)	(9,044		)	30,063		(65,360		)	—		—		(16,773		)	(1,700		)	1,484,838		1,839
Equity securities	66,504		—		—		—			—			22		—			—		—		—			—			66,526		—
Other long-term investments(1)	57,048		16,275		—		(10,403		)	—			—		—			—		—		—			—			62,920		5,872
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	1,651,483		19,046		16,958		(10,411		)	(9,044		)	30,085		(65,360		)	—		—		(16,773		)	(1,700		)	1,614,284		7,711
Total assets measured at fair value on a recurring basis	$	1,651,483	$	19,046	$	16,958	$	(10,411	)	$	(9,044	)	$	30,085	$	(65,360	)	$	—	$	—	$	(16,773	)	$	(1,700	)	$	1,614,284	$	7,711
Liabilities:
Annuity account balances(2)	$	90,123	$	—	$	—	$	(530	)	$	—		$	—	$	—		$	63	$	1,896	—			$	—		$	88,820	$	—
Other liabilities(1)	496,238		15,217		—		(100,025		)	—			—		—			—		—		—			—			581,046		(84,808		)
Total liabilities measured at fair value on a recurring basis	$	586,361	$	15,217	$	—	$	(100,555	)	$	—		$	—	$	—		$	63	$	1,896	$	—		$	—		$	669,866	$	(84,808	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the period of February 1, 2015 to June 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included in Earnings		Included in Other Comprehensive Income		Included in Earnings			Included in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	603,646		—		165		(92		)	(12,891		)	—		(127		)	—		—		—			184			590,885		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		(3,675		)	—		—		—			—			—		—
Corporate securities	1,307,259		4,291		15,619		(687		)	(24,247		)	111,929		(254,935		)	—		—		(41,853		)	(5,945		)	1,111,431		—
Total fixed maturity securities - available-for-sale	1,914,583		4,291		15,784		(779		)	(37,138		)	111,929		(258,737		)	—		—		(41,853		)	(5,761		)	1,702,319		—
Fixed maturity securities - trading
Other asset-backed securities	169,473		3,949		—		(5,173		)	—			—		(7,876		)	—		—		—			221			160,594		(5,829		)
Corporate securities	25,130		174		—		(299		)	—			—		(5,584		)	—		—		—			(105		)	19,316		(1,180		)
Total fixed maturity securities - trading	194,603		4,123		—		(5,472		)	—			—		(13,460		)	—		—		—			116			179,910		(7,009		)
Total fixed maturity securities	2,109,186		8,414		15,784		(6,251		)	(37,138		)	111,929		(272,197		)	—		—		(41,853		)	(5,645		)	1,882,229		(7,009		)
Equity securities	66,691		—		—		—			—			—		(231		)	—		—		—			—			66,460		—
Other long-term investments(1)	64,200		40,032		—		(3,713		)	—			—		—			—		—		—			—			100,519		36,319
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	2,240,077		48,446		15,784		(9,964		)	(37,138		)	111,929		(272,428		)	—		—		(41,853		)	(5,645		)	2,049,208		29,310
Total assets measured at fair value on a recurring basis	$	2,240,077	$	48,446	$	15,784	$	(9,964	)	$	(37,138	)	$	111,929	$	(272,428	)	$	—	$	—	$	(41,853	)	$	(5,645	)	$	2,049,208	$	29,310
Liabilities:
Annuity account balances(2)	$	98,279	$	—	$	—	$	(1,544	)	$	—		$	—	$	—		$	86	$	4,731	$	—		$	—		$	95,178	$	—
Other liabilities(1)	530,118		212,854		—		(25,681		)	—			—		—			—		—		—			—			342,945		187,173
Total liabilities measured at fair value on a recurring basis	$	628,397	$	212,854	$	—	$	(27,225	)	$	—		$	—	$	—		$	86	$	4,731	$	—		$	—		$	438,123	$	187,173

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the six months ended June 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3):

			Total Realized and Unrealized Gains				Total Realized and Unrealized Losses																							Total Gains (losses) included in
	Beginning Balance		Included  in Earnings		Included  in Other Comprehensive Income		Included  in Earnings			Included  in Other Comprehensive Income			Purchases		Sales			Issuances		Settlements		Transfers in/out of Level 3			Other			Ending Balance		Earnings related to Instruments still held at the Reporting Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	3	$	—	$	—	$	—		$	—		$	—	$	—		$	—	$	—	$	—		$	—		$	3	$	—
Other asset-backed securities	587,031		6,859		769		—			(21,407		)	9,597		(58,449		)	—		—		7,457			1,284			533,141		—
Corporate securities	902,119		925		31,111		(4,135		)	(6,981		)	25,558		(81,865		)	—		—		(77,952		)	(5,637		)	783,143		—
Total fixed maturity securities - available-for-sale	1,489,153		7,784		31,880		(4,135		)	(28,388		)	35,155		(140,314		)	—		—		(70,495		)	(4,353		)	1,316,287		—
Fixed maturity securities - trading
Other asset-backed securities	152,912		2,050		—		(942		)	—			—		(2,212		)	—		—		172			(16		)	151,964		1,105
Corporate securities	18,225		332		—		(259		)	—			10,908		(4,071		)	—		—		(8,479		)	(69		)	16,587		241
Total fixed maturity securities - trading	171,137		2,382		—		(1,201		)	—			10,908		(6,283		)	—		—		(8,307		)	(85		)	168,551		1,346
Total fixed maturity securities	1,660,290		10,166		31,880		(5,336		)	(28,388		)	46,063		(146,597		)	—		—		(78,802		)	(4,438		)	1,484,838		1,346
Equity securities	66,504		—		—		—			—			22		—			—		—		—			—			66,526		—
Other long-term investments(1)	68,384		20,492		—		(27,385		)	—			1,429		—			—		—		—			—			62,920		(6,893		)
Total investments	1,795,178		30,658		31,880		(32,721		)	(28,388		)	47,514		(146,597		)	—		—		(78,802		)	(4,438		)	1,614,284		(5,547		)
Total assets measured at fair value on a recurring basis	$	1,795,178	$	30,658	$	31,880	$	(32,721	)	$	(28,388	)	$	47,514	$	(146,597	)	$	—	$	—	$	(78,802	)	$	(4,438	)	$	1,614,284	$	(5,547	)
Liabilities:
Annuity account balances(2)	$	92,512	$	—	$	—	$	(1,096	)	$	—		$	—	$	—		$	250	$	5,038	$	—		$	—		$	88,820	$	—
Other liabilities(1)	375,848		15,585		—		(220,783		)	—			—		—			—		—		—			—			581,046		(205,198		)
Total liabilities measured at fair value on a recurring basis	$	468,360	$	15,585	$	—	$	(221,879	)	$	—		$	—	$	—		$	250	$	5,038	$	—		$	—		$	669,866	$	(205,198	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

Schedule of the Carrying Amounts and Estimated Fair Value of the Company's Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows:

		Successor Company
		As of June 30, 2016				As of December 31, 2015
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	5,748,675	$	5,735,650	$	5,662,812	$	5,529,803
Policy loans	3	1,670,218		1,670,218		1,699,508		1,699,508
Fixed maturities, held-to-maturity(1)	3	2,779,280		2,853,788		593,314		515,000
Liabilities:
Stable value product account balances	3	$	2,838,674	$	2,855,064	$	2,131,822	$	2,124,712
Annuity account balances	3	10,678,701		10,221,680		10,719,862		10,274,571
Debt:
Non-recourse funding obligations(2)	3	$	2,981,271	$	3,054,637	$	1,951,563	$	1,621,773

Except as noted below, fair values were estimated using quoted market prices.

⁽¹⁾    Securities purchased from unconsolidated affiliates, Red Mountain LLC and Steel City LLC.

⁽²⁾    Of this carrying amount, $2.8 billion, fair value of $2.8 billion, as of June 30, 2016 (Successor Company), and $500.0 million, fair value of $495.5 million, as of December 31, 2015 (Successor Company), relates to non-recourse funding obligations issued by Golden Gate and Golden Gate V.

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Realized Investments Gains and Losses

The following table sets forth realized investments gains and losses for the periods shown:

Realized investment gains (losses) - derivative financial instruments

	Successor Company												Predecessor Company
	For The Three Months Ended June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Derivatives related to VA contracts:
Interest rate futures - VA	$	31,266		$	(14,183	)	$	69,067		$	(14,231	)	$	1,413
Equity futures - VA	(21,328		)	(5,267		)	(24,556		)	(37,736		)	9,221
Currency futures - VA	11,112			(8,709		)	4,954			(2,572		)	7,778
Equity options - VA	(3,232		)	(3,550		)	13,072			(25,324		)	3,047
Interest rate swaptions - VA	(749		)	2,547			(2,983		)	(8,781		)	9,268
Interest rate swaps - VA	81,554			(121,167		)	207,147			(175,958		)	122,710
Embedded derivative - GMWB	(66,019		)	45,969			(132,695		)	81,839			(68,503		)
Funds withheld derivative	17,850			6,335			10,052			44,571			(9,073		)
Total derivatives related to VA contracts	50,454			(98,025		)	144,058			(138,192		)	75,861
Derivatives related to FIA contracts:
Embedded derivative - FIA	710			290			(1,452		)	(2,293		)	1,769
Equity futures - FIA	651			123			2,033			307			(184		)
Volatility futures - FIA	—			25			—			29			—
Equity options - FIA	735			1,226			(4,827		)	5,601			(2,617		)
Total derivatives related to FIA contracts	2,096			1,664			(4,246		)	3,644			(1,032		)
Derivatives related to IUL contracts:
Embedded derivative - IUL	(96		)	1,538			(834		)	1,795			(486		)
Equity futures - IUL	47			9			(172		)	23			3
Equity options - IUL	241			(78		)	214			62			(115		)
Total derivatives related to IUL contracts	192			1,469			(792		)	1,880			(598		)
Embedded derivative - Modco reinsurance treaties	(22,820		)	109,131			(81,175		)	141,322			(68,026		)
Derivatives with PLC (1)	13,681			(3,684		)	17,711			(3,119		)	15,863
Other derivatives	(55		)	11			(100		)	83			(37		)
Total realized gains (losses) - derivatives	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031

(1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC.

Realized Investment Gains and Losses for the Modco Trading Portfolio that is Included in Realized Investment Gains (Losses) - All Other Investments

The following table sets forth realized investments gains and losses for the Modco trading portfolio that is included in realized investment gains (losses) — all other investments:

Realized investment gains (losses) - all other investments

	Successor Company										Predecessor Company
	For the Three Months Ended June 30, 2016		For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)										(Dollars In Thousands)
Modco trading portfolio(1)	$	76,201	$	(108,741	)	$	154,355	$	(141,901	)	$	73,062

(1)The Company elected to include the use of alternate disclosures for trading activities.

Components of the Gain or Loss on Derivatives that Quality as a Cash Flow Hedging Relationship

The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship:

Gain (Loss) on Derivatives in Cash Flow Hedging Relationship

	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives			Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)			Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)			(Effective Portion)			(Ineffective Portion)
				Benefits and settlement expenses			Realized investment gains (losses)
				(Dollars In Thousands)
Successor Company
For The Three Months Ended June 30, 2015
Inflation	$	(95	)	$	(41	)	$	77
Total	$	(95	)	$	(41	)	$	77
February 1, 2015 to June 30, 2015
Inflation	$	(131	)	$	(131	)	$	73
Total	$	(131	)	$	(131	)	$	73
Predecessor Company
January 1, 2015 to January 31, 2015
Inflation	$	13		$	(36	)	$	(7	)
Total	$	13		$	(36	)	$	(7	)

Schedule of Information About the Nature and Accounting Treatment of the Company's Primary Derivative Financial Instruments and the Location in and Effect on the Consolidated Financial Statements

The table below present information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below:

	Successor Company
	As of June 30, 2016				As of December 31, 2015
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(Dollars In Thousands)				(Dollars In Thousands)
Other long-term investments
Derivatives not designated as hedging instruments:
Interest rate swaps	$	1,640,000	$	255,439	$	1,435,000	$	66,408
Derivatives with PLC(1)	2,869,315		37,300		1,619,200		18,161
Embedded derivative - Modco reinsurance treaties	64,201		1,850		64,593		1,215
Embedded derivative - GMWB	891,276		23,770		1,723,081		49,007
Interest rate futures	1,155,001		35,366		282,373		1,537
Equity futures	190,058		752		262,485		1,275
Currency futures	314,256		15,915		226,936		2,499
Equity options	2,725,744		269,217		2,198,340		179,458
Interest rate swaptions	225,000		681		225,000		3,663
Other	298		249		242		347
	$	10,075,149	$	640,539	$	8,037,250	$	323,570
Other liabilities
Derivatives not designated as hedging instruments:
Interest rate swaps	$	270,000	$	3,215	$	475,000	$	16,579
Embedded derivative - Modco reinsurance treaties	2,457,293		239,350		2,473,427		178,362
Funds withheld derivative	1,492,757		129,473		1,149,664		102,378
Embedded derivative - GMWB	2,853,530		174,988		1,834,308		67,528
Embedded derivative - FIA	1,313,404		119,997		1,110,790		100,329
Embedded derivative - IUL	77,879		46,711		57,760		29,629
Interest rate futures	—		—		793,763		1,539
Equity futures	582,493		7,461		233,412		2,599
Currency futures	64,445		1,805		46,692		1,115
Equity options	1,459,533		60,551		1,205,204		22,167
	$	10,571,334	$	783,551	$	9,380,020	$	522,225

(1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC.

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OFFSETTING OF ASSETS AND LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2016

Offsetting [Abstract]

Schedule of Derivative Instruments by Assets

The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2015 (Successor Company).

					Net Amounts
	Gross		Gross Amounts Offset in the		of Assets Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Assets		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	254,840	$	—	$	254,840	$	42,382	$	105,842	$	106,616
Total derivatives, subject to a master netting arrangement or similar arrangement	254,840		—		254,840		42,382		105,842		106,616
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,215		—		1,215		—		—		1,215
Embedded derivative - GMWB	49,007		—		49,007		—		—		49,007
Derivatives with PLC	18,161		—		18,161		—		—		18,161
Other	347		—		347		—		—		347
Total derivatives, not subject to a master netting arrangement or similar arrangement	68,730		—		68,730		—		—		68,730
Total derivatives	323,570		—		323,570		42,382		105,842		175,346
Total Assets	$	323,570	$	—	$	323,570	$	42,382	$	105,842	$	175,346

The tables below present the derivative instruments by assets and liabilities for the Company as of June 30, 2016 (Successor Company).

					Net Amounts
	Gross		Gross Amounts Offset in the		of Assets Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Assets		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	577,370	$	—	$	577,370	$	66,347	$	336,163	$	174,860
Total derivatives, subject to a master netting arrangement or similar arrangement	577,370		—		577,370		66,347		336,163		174,860
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,850		—		1,850		—		—		1,850
Embedded derivative - GMWB	23,770		—		23,770		—		—		23,770
Derivatives with PLC	37,300		—		37,300		—		—		37,300
Other	249		—		249		—		—		249
Total derivatives, not subject to a master netting arrangement or similar arrangement	63,169		—		63,169		—		—		63,169
Total derivatives	640,539		—		640,539		66,347		336,163		238,029
Total Assets	$	640,539	$	—	$	640,539	$	66,347	$	336,163	$	238,029

Schedule of Derivative Instruments by Liabilities

					Net Amounts
	Gross		Gross Amounts Offset in the		of Liabilities Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Liabilities		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	43,999	$	—	$	43,999	$	42,382	$	1,617	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	43,999		—		43,999		42,382		1,617		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	178,362		—		178,362		—		—		178,362
Funds withheld derivative	102,378		—		102,378		—		—		102,378
Embedded derivative - GMWB	67,528		—		67,528		—		—		67,528
Embedded derivative - FIA	100,329		—		100,329		—		—		100,329
Embedded derivative - IUL	29,629		—		29,629		—		—		29,629
Total derivatives, not subject to a master netting arrangement or similar arrangement	478,226		—		478,226		—		—		478,226
Total derivatives	522,225		—		522,225		42,382		1,617		478,226
Repurchase agreements(1)	438,185		—		438,185		—		—		438,185
Total Liabilities	$	960,410	$	—	$	960,410	$	42,382	$	1,617	$	916,411

(1) Borrowings under repurchase agreements are for a term less than 90 days.

					Net Amounts
	Gross		Gross Amounts Offset in the		of Liabilities Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
	Amounts of Recognized Liabilities		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	73,032	$	—	$	73,032	$	66,347	$	6,685	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	73,032		—		73,032		66,347		6,685		—
Derivatives, not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	239,350		—		239,350		—		—		239,350
Funds withheld derivative	129,473		—		129,473		—		—		129,473
Embedded derivative - GMWB	174,988		—		174,988		—		—		174,988
Embedded derivative - FIA	119,997		—		119,997		—		—		119,997
Embedded derivative - IUL	46,711		—		46,711		—		—		46,711
Total derivatives, not subject to a master netting arrangement or similar arrangement	710,519		—		710,519		—		—		710,519
Total derivatives	783,551		—		783,551		66,347		6,685		710,519
Repurchase agreements(1)	160,000		—		160,000		—		—		160,000
Total Liabilities	$	943,551	$	—	$	943,551	$	66,347	$	6,685	$	870,519

(1) Borrowings under repurchase agreements are for a term less than 90 days.

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MORTGAGE LOANS (Tables)

6 Months Ended

Jun. 30, 2016

MORTGAGE LOANS

Schedule of Changes in the Allowance for Mortgage Loan Credit Losses

	Successor Company					Predecessor Company
	As of June 30, 2016		February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)					(Dollars In Thousands)
Beginning balance	$	—	$	—		$	5,720
Charge offs	—		(2,561		)	(861		)
Recoveries	—		(638		)	(2,359		)
Provision	3,850		3,199			—
Ending balance	$	3,850	$	—		$	2,500

Schedule of an Analysis of the Delinquent Loans

An analysis of the delinquent loans is shown in the following chart. 

					Greater
Successor Company	30-59 Days		60-89 Days		than 90 Days		Total
As of June 30, 2016	Delinquent		Delinquent		Delinquent		Delinquent
	(Dollars In Thousands)
Commercial mortgage loans	$	9,167	$	—	$	1,034	$	10,201
Number of delinquent commercial mortgage loans	3		—		1		4
As of December 31, 2015
Commercial mortgage loans	$	6,002	$	1,033	$	—	$	7,035
Number of delinquent commercial mortgage loans	6		1		—		7

Schedule of Information Regarding Impaired Loans

For information regarding impaired loans, please refer to the following chart: 

			Unpaid				Average		Interest		Cash Basis
Successor Company	Recorded		Principal		Related		Recorded		Income		Interest
As of June 30, 2016	Investment		Balance		Allowance		Investment		Recognized		Income
	(Dollars In Thousands)
Commercial mortgage loans:
With no related allowance recorded	$	1,034	$	1,067	$	—	$	1,034	$	—	$	—
With an allowance recorded	12,313		12,301		3,850		6,156		190		199
As of December 31, 2015
Commercial mortgage loans:
With no related allowance recorded	$	1,694	$	1,728	$	—	$	847	$	104	$	117
With an allowance recorded	—		—		—		—		—		—

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DEBT AND OTHER OBLIGATIONS (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Non-Recourse Funding Obligations Outstanding

Non-recourse funding obligations outstanding as of June 30, 2016 (Successor Company), on a consolidated basis, are shown in the following table:

			Maturity	Year-to-Date Weighted-Avg
Issuer	Carrying Value(1)		Year	Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	2,153,000	2039	4.75	%
Golden Gate II Captive Insurance Company	226,912		2052	1.29	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	598,863		2037	5.12	%
MONY Life Insurance Company(3)	2,496		2024	6.19	%
Total	$	2,981,271

(1)  Carrying values include premiums and discounts and do not represent unpaid principal balances.

(2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company.

(3)  Fixed rate obligations.

Schedule of Collateral Pledged for Repurchase Agreements

The following table provides the amount of collateral pledged for repurchase agreements, grouped by asset class, as of June 30, 2016 (Successor Company):

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
	As of June 30, 2016 (Successor Company)
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	—	$	—	$	—	$	—	$	—
State and municipal securities	—		—		—		—		—
Other asset-backed securities	—		—		—		—		—
Corporate securities	—		—		—		—		—
Equity securities	—		—		—		—		—
Non-U.S. sovereign debt	—		—		—		—		—
Mortgage loans	177,463		—		—		—		177,463
Other asset-backed securities	—		—		—		—		—
Total borrowings	$	177,463	$	—	$	—	$	—	$	177,463

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EMPLOYEE BENEFIT PLANS (Tables)

6 Months Ended

Jun. 30, 2016

Pension and Other Postretirement Benefit Expense [Abstract]

Components of the Net Periodic Benefit Cost

Components of the net periodic benefit cost for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), are as follows:

	Successor Company																				Predecessor Company
	For The Three Months Ended June 30, 2016					For The Three Months Ended June 30, 2015					For The Six Months Ended June 30, 2016					February 1, 2015 to June 30, 2015					January 1, 2015 to January 31, 2015
	Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan		Defined Benefit Pension Plan			Excess Benefit Plan
	(Dollars In Thousands)																				(Dollars In Thousands)
Service cost — benefits earned during the period	$	2,906		$	313	$	2,973		$	333	$	5,812		$	625	$	4,955		$	555	$	974		$	95
Interest cost on projected benefit obligation	2,737			438		2,433			408		5,474			877		4,055			680		1,002			140
Expected return on plan assets	(3,605		)	—		(3,642		)	—		(7,211		)	—		(6,070		)	—		(1,293		)	—
Amortization of prior service cost	—			—		—			—		—			—		—			—		(33		)	1
Amortization of actuarial losses	—			—		—			—		—			—		—			—		668			138
Preliminary net periodic benefit cost	2,038			751		1,764			741		4,075			1,502		2,940			1,235		1,318			374
Settlement/curtailment expense	—			1,500		—			—		—			1,500		—			—		—			—
Total net periodic benefit costs	$	2,038		$	2,251	$	1,764		$	741	$	4,075		$	3,002	$	2,940		$	1,235	$	1,318		$	374

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Jun. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Summary of Changes in the Accumulated Balances for Each Component of AOCI

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of June 30, 2016 (Successor Company), December 31, 2015 (Successor Company), and January 31, 2015 (Predecessor Company).

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Successor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives		Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, December 31, 2015	$	(1,246,391	)	$	—	$	(1,246,391	)
Other comprehensive income (loss) before reclassifications	1,017,335			—		1,017,335
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(2,572		)	—		(2,572		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(12,274		)	—		(12,274		)
Net current-period other comprehensive income (loss)	1,002,489			—		1,002,489
Ending Balance, June 30, 2016	$	(243,902	)	$	—	$	(243,902	)

(1) See Reclassification table below for details.

(2) As of June 30, 2016 net unrealized losses reported in AOCI were offset by $139.3 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Successor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives			Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, February 1, 2015	$	—		$	—		$	—
Other comprehensive income (loss) before reclassifications	(1,263,367		)	(86		)	(1,263,453		)
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(393		)	—			(393		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	17,369			86			17,455
Net current-period other comprehensive income (loss)	(1,246,391		)	—			(1,246,391		)
Ending Balance, December 31, 2015	$	(1,246,391	)	$	—		$	(1,246,391	)

(1) See Reclassification table below for details.

(2) As of December 31, 2015 net unrealized losses reported in AOCI were offset by $623.0 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Predecessor Company	Unrealized Gains and Losses on Investments(2)			Accumulated Gain and Loss Derivatives			Total Accumulated Other Comprehensive Income (Loss)
	(Dollars In Thousands, Net of Tax)
Beginning Balance, December 31, 2014	$	1,483,293		$	(82	)	$	1,483,211
Other comprehensive income (loss) before reclassifications	482,143			9			482,152
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(243		)	—			(243		)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(4,166		)	23			(4,143		)
Net current-period other comprehensive income (loss)	477,734			32			477,766
Ending Balance, January 31, 2015	$	1,961,027		$	(50	)	$	1,960,977

(1) See Reclassification table below for details.

(2) As of January 31, 2015 net unrealized losses reported in AOCI were offset by $(492.6) million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income.

Schedule of Reclassifications Amounts Out of AOCI

The following tables summarize the reclassifications amounts out of AOCI for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company).

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For the Three Months Ended June 30, 2016
	(Dollars In Thousands)
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	16,932		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(967		)	Net impairment losses recognized in earnings
	15,965			Total before tax
	(5,588		)	Tax (expense) or benefit
	$	10,377		Net of tax

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For The Six Months Ended June 30, 2016
	(Dollars In Thousands)
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	22,468		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(3,584		)	Net impairment losses recognized in earnings
	18,884			Total before tax
	(6,610		)	Tax (expense) or benefit
	$	12,274		Net of tax

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
For The Three Months Ended June 30, 2015
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(41	)	Benefits and settlement expenses, net of reinsurance ceded
	(41		)	Total before tax
	14			Tax (expense) or benefit
	$	(27	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	3,350		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(5,734		)	Net impairment losses recognized in earnings
	(2,384		)	Total before tax
	834			Tax (expense) or benefit
	$	(1,550	)	Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Successor Company	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
February 1, 2015 to June 30, 2015
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(131	)	Benefits and settlement expenses, net of reinsurance ceded
	(131		)	Total before tax
	45			Tax (expense) or benefit
	$	(86	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	3,723		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(5,734		)	Net impairment losses recognized in earnings
	(2,011		)	Total before tax
	703			Tax (expense) or benefit
	$	(1,308	)	Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Predecessor Company January 1, 2015 to January 31, 2015	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Consolidated Condensed Statements of Income
	(Dollars In Thousands)
Gains and losses on derivative instruments
Net settlement (expense)/benefit(1)	$	(36	)	Benefits and settlement expenses, net of reinsurance ceded
	(36		)	Total before tax
	13			Tax (expense) or benefit
	$	(23	)	Net of tax
Unrealized gains and losses on available-for-sale securities
Net investment gains (losses)	$	6,891		Realized investment gains (losses): All other investments
Impairments recognized in earnings	(481		)	Net impairment losses recognized in earnings
	6,410			Total before tax
	(2,244		)	Tax (expense) or benefit
	$	4,166		Net of tax

(1) See Note 8, Derivative Financial Instruments for additional information.

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INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Successor Company						Predecessor Company
	As of June 30, 2016			February 1, 2015 to December 31, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)						(Dollars In Thousands)
Balance, beginning of period	$	8,937		$	105,850		$	168,076
Additions for tax positions of the current year	1,218			2,213			(5,010		)
Additions for tax positions of prior years	—			1,812			1,149
Reductions of tax positions of prior years:	0
Changes in judgment	—			(644		)	(58,365		)
Settlements during the period	(710		)	(100,294		)	—
Lapses of applicable statute of limitations	—			—			—
Balance, end of period	$	9,445		$	8,937		$	105,850

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OPERATING SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Summary of Financial Information for the Company's Segments

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 June 30, 2016			For The Three Months Ended June 30, 2015			For The Six Months Ended June 30, 2016			February 1, 2015 to June 30, 2015			January 1, 2015 to January 31, 2015
	(Dollars In Thousands)												(Dollars In Thousands)
Revenues
Life Marketing	$	384,823		$	347,691		$	765,897		$	602,613		$	133,361
Acquisitions	453,848			363,985			878,655			622,774			139,761
Annuities	188,597			43,468			407,113			92,812			130,918
Stable Value Products	26,237			16,656			56,139			26,998			8,181
Asset Protection	76,419			77,625			150,098			126,921			24,566
Corporate and Other	44,918			13,528			76,842			31,796			22,859
Total revenues	$	1,174,842		$	862,953		$	2,334,744		$	1,503,914		$	459,646
Segment Operating Income (Loss)
Life Marketing	$	25,098		5,672			38,224			$	9,953		$	(2,271	)
Acquisitions	45,285			37,876			113,938			73,946			20,134
Annuities	47,480			40,513			92,756			71,886			11,363
Stable Value Products	15,178			9,349			29,626			15,464			4,529
Asset Protection	4,141			4,880			8,397			8,523			1,907
Corporate and Other	(30,248		)	(36,374		)	(64,990		)	(50,331		)	(16,662		)
Total segment operating income	106,934			61,916			217,951			129,441			19,000
Realized investment (losses) gains - investments(1)	100,889			(115,716		)	184,031			(158,649		)	89,414
Realized investment (losses) gains - derivatives	52,757			18,233			93,577			18,177			24,433
Income tax (expense) benefit	(87,787		)	9,991			(164,149		)	1,875			(44,325		)
Net income (loss)	$	172,793		$	(25,576	)	$	331,410		$	(9,156	)	$	88,522
All other investment gains (losses)	$	87,816		$	(108,081	)	$	166,908		$	(143,137	)	$	80,672
Less: amortization related to DAC/VOBA and benefits and settlement expenses	(13,073		)	7,635			(17,123		)	15,512			(8,742		)
Realized investment gains (losses) - investments	$	100,889		$	(115,716	)	$	184,031		$	(158,649	)	$	89,414
Derivative financial instruments gains (losses)	$	43,548		$	10,566		$	75,456		$	5,618		$	22,031
Less: VA GMWB economic cost	(9,209		)	(7,667		)	(18,121		)	(12,559		)	(2,402		)
Realized investment gains (losses) - derivatives	$	52,757		$	18,233		$	93,577		$	18,177		$	24,433

(1) Includes credit related other-than-temporary impairments of $1.0 million, $3.6 million, $5.7 million, $5.7 million, and $0.5 million for the three and six months ended June 30, 2016 (Successor Company), the three months ended June 30, 2015 (Successor Company), the period of February 1, 2015 to June 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively.

	Operating Segment Assets As of June 30, 2016 (Successor Company)
	(Dollars In Thousands)
	Life Marketing		Acquisitions		Annuities		Stable Value Products
Investments and other assets	$	13,916,859	$	20,052,484	$	19,873,357	$	2,711,452
Deferred policy acquisition costs and value of business acquired	1,134,643		93,983		625,628		4,353
Other intangibles	310,141		38,380		190,116		9,056
Goodwill	200,274		14,524		336,677		113,813
Total assets	$	15,561,917	$	20,199,371	$	21,025,778	$	2,838,674

	Asset Protection		Corporate and Other		Total Consolidated
Investments and other assets	$	812,678	$	13,755,465	$	71,122,295
Deferred policy acquisition costs and value of business acquired	36,559		—		1,895,166
Other intangibles	76,782		—		624,475
Goodwill	67,155		—		732,443
Total assets	$	993,174	$	13,755,465	$	74,374,379

	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

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REINSURANCE AND FINANCING TRANSACTIONS (Details) - USD ($)		6 Months Ended
	Jan. 15, 2016	Jun. 30, 2016
Debt Instrument [Line Items]
Increase in total assets		$ 2,800,000,000
Increase in assets resulting from reinsurance transaction		600,000,000
Increase in value of business acquired		280,000,000
Increase in assets associated with financing activities		$ 2,200,000,000
Financing Arrangement with Golden Gate and Syndicate if Risk Takers
Debt Instrument [Line Items]
Term of financing agreement	18 years
Financing capacity under the arrangement	$ 2,188,000,000.000
Golden Gate
Debt Instrument [Line Items]
Extraordinary dividend	300,000,000
Golden Gate | Non-recourse Funding Obligations Series
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations	800,000,000
Golden Gate | Surplus Notes | Steel City Notes
Debt Instrument [Line Items]
Amount of debt issued	2,188,000,000.000
Steel City | Surplus Notes | Golden Gate Surplus Notes
Debt Instrument [Line Items]
Amount of debt issued	$ 2,188,000,000.000

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DAI-ICHI MERGER - Additional Information (Details) - USD ($)		6 Months Ended	11 Months Ended
	Feb. 01, 2015	Jun. 30, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill	$ 735,700,000
Dai-ichi Life | Protective Life Corporation
Business Acquisition [Line Items]
Per share merger consideration (in dollars per share)	$ 70
Aggregate cash consideration	$ 5,600,000,000
Goodwill	735,712,000
Decrease to goodwill			$ 3,300,000
Dai-ichi Life | Protective Life Insurance Company
Business Acquisition [Line Items]
Expected tax deductible goodwill	0
Successor
Business Acquisition [Line Items]
Goodwill	$ 735,700,000	$ 732,443,000	732,443,000
Decrease to goodwill		0
Successor | Dai-ichi Life | Protective Life Corporation
Business Acquisition [Line Items]
Goodwill		$ 732,400,000	$ 732,400,000

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DAI-ICHI MERGER - Summary of Consideration Paid and Fair Value of Assets Acquired and Liabilities Assumed (Details) $ in Thousands	Feb. 01, 2015 USD ($)
Assets
Goodwill	$ 735,700
Dai-ichi Life | Protective Life Corporation
Assets
Fixed maturities	38,342,948
Equity securities	699,081
Mortgage loans	5,580,229
Investment real estate	7,456
Policy loans	1,751,872
Other long-term investments	657,346
Short-term investments	311,236
Total investments	47,350,168
Cash	378,903
Accrued investment income	483,691
Accounts and premiums receivable	104,260
Reinsurance receivables	5,538,637
Value of business acquired	1,278,064
Goodwill	735,712
Other intangibles	683,000
Property and equipment	102,736
Other assets	224,555
Income tax receivable	50,117
Assets related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total assets	70,719,618
Liabilities
Future policy and benefit claims	30,195,397
Unearned premiums	622,278
Total policy liabilities and accruals	30,817,675
Stable value product account balances	1,932,277
Annuity account balances	10,941,661
Other policyholders’ funds	1,388,083
Other liabilities	1,533,666
Deferred income taxes	1,861,632
Non-recourse funding obligations	1,895,636
Repurchase program borrowings	50,000
Liabilities related to separate accounts
Variable annuity	12,970,587
Variable universal life	819,188
Total liabilities	64,210,405
Net assets acquired	$ 6,509,213

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MONY CLOSED BLOCK OF BUSINESS - Summary of Financial Information of the Policyholder Dividend Obligation (Details) - Successor - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Jan. 31, 2015
Closed block liabilities
Future policy benefits, policyholders’ account balances and other policyholder liabilities	$ 5,939,342	$ 6,010,520
Policyholder dividend obligation	232,422	0	$ 52,283	$ 323,432
Other liabilities	13,268	24,539
Total closed block liabilities	6,185,032	6,035,059
Closed block assets
Fixed maturities, available-for-sale, at fair value	4,677,305	4,426,090
Mortgage loans on real estate	245,997	247,162
Policy loans	726,563	746,102
Cash	0	34,420
Other assets	148,763	162,640
Total closed block assets	5,798,628	5,616,414
Excess of reported closed block liabilities over closed block assets	386,404	418,645
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses) net of policyholder dividend obligation of $(9,488) (Successor) and $(179,360) (Successor)	0	(18,597)
Future earnings to be recognized from closed block assets and closed block liabilities	386,404	400,048
Net unrealized investment gains (losses) allocated to policyholder dividend obligation, net of deferred tax benefits	$ (9,488)	$ (179,360)

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MONY CLOSED BLOCK OF BUSINESS - Schedule of Reconciliation of the Policyholder Dividend Obligation (Details) - USD ($) $ in Thousands	1 Months Ended	5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Entity Information [Line Items]
Policyholder dividend obligation, beginning of period		$ 323,432	$ 0
Applicable to net revenue (losses)		(15,096)	(28,921)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $5,109 (Successor); $89,618 (2015 - Successor); $47,277 (2015 - Predecessor)		(256,053)	261,343
Policyholder dividend obligation, end of period	$ 323,432	52,283	232,422
Deferred tax benefits		89,618	$ 5,109
Predecessor
Entity Information [Line Items]
Policyholder dividend obligation, beginning of period	366,745	$ 500,453
Applicable to net revenue (losses)	(1,369)
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $5,109 (Successor); $89,618 (2015 - Successor); $47,277 (2015 - Predecessor)	135,077
Policyholder dividend obligation, end of period	500,453
Deferred tax benefits	$ 47,277

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MONY CLOSED BLOCK OF BUSINESS - Schedule of Closed Block Revenues and Expenses (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Revenues
Premiums and other income		$ 47,320	$ 49,998	$ 81,669	$ 91,239
Net investment income		52,008	54,833	87,681	102,875
Net investment gains		450	2,216	2,850	637
Total revenues		99,778	107,047	172,200	194,751
Benefits and other deductions
Benefits and settlement expenses		92,029	98,975	154,746	172,084
Other operating expense		653	263	474	1,677
Total benefits and other deductions		92,682	99,238	155,220	173,761
Net revenues before income taxes		7,096	7,809	16,980	20,990
Income tax expense		2,484	2,733	5,943	7,346
Net revenues		$ 4,612	$ 5,076	$ 11,037	$ 13,644
Predecessor
Revenues
Premiums and other income	$ 15,065
Net investment income	19,107
Net investment gains	568
Total revenues	34,740
Benefits and other deductions
Benefits and settlement expenses	31,152
Other operating expense	0
Total benefits and other deductions	31,152
Net revenues before income taxes	3,588
Income tax expense	1,256
Net revenues	$ 2,332

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INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for All Other Investments (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Investment [Line Items]
Fixed maturities		$ 16,730	$ 3,329	$ 3,702	$ 22,432
Equity securities		202	21	21	36
Impairments on fixed maturity securities		(964)	(5,734)	(5,734)	(3,581)
Modco trading portfolio		76,201	(108,741)	(141,901)	154,355
Other investments		(4,353)	3,044	775	(6,334)
Total realized gains (losses) - investments		$ 87,816	$ (108,081)	$ (143,137)	$ 166,908
Predecessor
Investment [Line Items]
Fixed maturities	$ 6,891
Equity securities	0
Impairments on fixed maturity securities	(481)
Modco trading portfolio	73,062
Other investments	1,200
Total realized gains (losses) - investments	$ 80,672

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INVESTMENT OPERATIONS - Schedule of Gross Realized Gains (Losses) on Investments Available-for-Sale (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Investment [Line Items]
Gross realized gains		$ 18,752	$ 5,425	$ 6,932	$ 27,781
Gross realized losses		(2,784)	(7,809)	(8,943)	(8,894)
Impairments losses included in gross realized losses		$ (964)	$ (5,734)	$ (5,734)	$ (3,581)
Predecessor
Investment [Line Items]
Gross realized gains	$ 6,920
Gross realized losses	(469)
Impairments losses included in gross realized losses	$ 0

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INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains/Losses Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Investment [Line Items]
Fair value (proceeds) of securities in an unrealized gain position sold		$ 513,544	$ 430,058	$ 712,938	$ 819,775
Gain realized on the sale of securities in an unrealized gain position		18,752	5,425	6,932	27,781
Fair value (proceeds) of securities sold in an unrealized loss position		6,895	28,644	49,326	60,582
Loss realized on the sale of securities in an unrealized loss position		$ (1,820)	$ (2,075)	$ (3,209)	$ (5,313)
Predecessor
Investment [Line Items]
Fair value (proceeds) of securities in an unrealized gain position sold	$ 172,551
Gain realized on the sale of securities in an unrealized gain position	6,920
Fair value (proceeds) of securities sold in an unrealized loss position	435
Loss realized on the sale of securities in an unrealized loss position	$ (29)

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INVESTMENT OPERATIONS - Additional Information (Details)	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended	11 Months Ended
	Jan. 31, 2015 USD ($)	Jun. 30, 2016 USD ($) position subsidiary	Jun. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) position subsidiary	Dec. 31, 2015 USD ($) subsidiary
Investment [Line Items]
Total positions that were in an unrealized loss position | position		1,414			1,414
Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		$ 994,530,000			$ 994,530,000	$ 0
Available-for-sale securities, fair value		36,786,521,000			36,786,521,000	33,736,825,000
Available-for-sale securities, amortized cost		37,376,213,000			37,376,213,000	36,612,808,000
Other-than-temporary impairments on held-to-maturity securities		0	$ 0	$ 0	0
Unrecognized Holding Loss						78,300,000
Predecessor
Investment [Line Items]
Other-than-temporary impairments on held-to-maturity securities	$ 0
Fixed maturities | Successor
Investment [Line Items]
Trading securities		2,800,000,000			2,800,000,000	2,700,000,000
Other-than-temporary impairments related to fixed maturities or equity securities that the entity intended to sell or expected to be required to sell		0	$ 0	$ 0	0
Available-for-sale securities, fair value		35,885,616,000			35,885,616,000	32,843,049,000
Available-for-sale securities, amortized cost		36,496,608,000			36,496,608,000	35,725,810,000
Gross Unrealized Gains		97,387,000			97,387,000	0
Gross Unrealized Losses		(22,879,000)			(22,879,000)	(78,314,000)
Fixed maturities | Predecessor
Investment [Line Items]
Other-than-temporary impairments related to fixed maturities or equity securities that the entity intended to sell or expected to be required to sell	$ 0
Equity securities | Successor
Investment [Line Items]
Trading securities		8,000,000			8,000,000	8,300,000
Gross unrealized loss, greater than 12 months		3,867,000			3,867,000	0
Available-for-sale securities, fair value		694,748,000			694,748,000	691,666,000
Available-for-sale securities, amortized cost		673,448,000			673,448,000	684,888,000
Short-term investments | Successor
Investment [Line Items]
Trading securities		38,200,000			38,200,000	61,700,000
Available-for-sale securities, fair value		206,157,000			206,157,000	202,110,000
Available-for-sale securities, amortized cost		206,157,000			206,157,000	202,110,000
Residential mortgage-backed securities | Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		6,150,000			6,150,000	0
Available-for-sale securities, fair value		1,931,813,000			1,931,813,000	1,765,273,000
Available-for-sale securities, amortized cost		1,891,316,000			1,891,316,000	1,773,099,000
Commercial mortgage-backed securities | Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		3,443,000			3,443,000	0
Available-for-sale securities, fair value		1,578,172,000			1,578,172,000	1,285,864,000
Available-for-sale securities, amortized cost		1,552,028,000			1,552,028,000	1,327,288,000
Other asset-backed securities | Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		34,867,000			$ 34,867,000	0
Underlying Collateral, Percentage guaranteed by the Federal Family Education Loan Program					97.00%
Available-for-sale securities, fair value		1,120,642,000			$ 1,120,642,000	797,051,000
Available-for-sale securities, amortized cost		1,151,430,000			1,151,430,000	813,056,000
U.S. government-related securities | Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		200,000			200,000
States, municipals, and political subdivisions | Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		21,320,000			21,320,000	0
Available-for-sale securities, fair value		1,737,499,000			1,737,499,000	1,603,600,000
Available-for-sale securities, amortized cost		1,727,664,000			1,727,664,000	1,729,732,000
Corporate securities | Successor
Investment [Line Items]
Gross unrealized loss, greater than 12 months		923,016,000			923,016,000	0
Available-for-sale securities, fair value		28,062,587,000			28,062,587,000	25,778,657,000
Available-for-sale securities, amortized cost		28,740,691,000			$ 28,740,691,000	$ 28,433,530,000
Red Mountain
Investment [Line Items]
Ownership interest through an affiliate (as a percent)					100.00%
Investment to which risk of loss related to the VIE is limited		$ 10,000			$ 10,000
Red Mountain | Successor
Investment [Line Items]
Number of wholly owned subsidiaries that were determined to be VIEs | subsidiary		1			1	1
External Credit Rating, Non Investment Grade | Successor
Investment [Line Items]
Trading securities		$ 270,800,000			$ 270,800,000
Available-for-sale securities, fair value		1,800,000,000			1,800,000,000
Available-for-sale securities, amortized cost		1,900,000,000			1,900,000,000
Securities not publicly traded		$ 324,500,000			$ 324,500,000

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INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - Successor - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Investment [Line Items]
Amortized Cost	$ 37,376,213	$ 36,612,808
Gross Unrealized Gains	539,824	53,197
Gross Unrealized Losses	(1,129,516)	(2,929,180)
Fair Value	36,786,521	33,736,825
Total OTTI Recognized in OCI	(4,561)	(605)
Residential mortgage-backed securities
Investment [Line Items]
Amortized Cost	1,891,316	1,773,099
Gross Unrealized Gains	49,750	9,286
Gross Unrealized Losses	(9,253)	(17,112)
Fair Value	1,931,813	1,765,273
Total OTTI Recognized in OCI	(1)	0
Commercial mortgage-backed securities
Investment [Line Items]
Amortized Cost	1,552,028	1,327,288
Gross Unrealized Gains	29,870	428
Gross Unrealized Losses	(3,726)	(41,852)
Fair Value	1,578,172	1,285,864
Total OTTI Recognized in OCI	0	0
Other asset-backed securities
Investment [Line Items]
Amortized Cost	1,151,430	813,056
Gross Unrealized Gains	5,267	2,758
Gross Unrealized Losses	(36,055)	(18,763)
Fair Value	1,120,642	797,051
Total OTTI Recognized in OCI	0	0
U.S. government-related securities
Investment [Line Items]
Amortized Cost	1,350,769	1,566,260
Gross Unrealized Gains	21,232	449
Gross Unrealized Losses	(205)	(34,532)
Fair Value	1,371,796	1,532,177
Total OTTI Recognized in OCI	0	0
Other government-related securities
Investment [Line Items]
Amortized Cost	18,348	18,483
Gross Unrealized Gains	332	0
Gross Unrealized Losses	0	(743)
Fair Value	18,680	17,740
Total OTTI Recognized in OCI	0	0
States, municipals, and political subdivisions
Investment [Line Items]
Amortized Cost	1,727,664	1,729,732
Gross Unrealized Gains	31,429	682
Gross Unrealized Losses	(21,594)	(126,814)
Fair Value	1,737,499	1,603,600
Total OTTI Recognized in OCI	0	0
Corporate securities
Investment [Line Items]
Amortized Cost	28,740,691	28,433,530
Gross Unrealized Gains	373,820	26,147
Gross Unrealized Losses	(1,051,924)	(2,681,020)
Fair Value	28,062,587	25,778,657
Total OTTI Recognized in OCI	(4,560)	(605)
Preferred Stock
Investment [Line Items]
Amortized Cost	64,362	64,362
Gross Unrealized Gains	1,732	192
Gross Unrealized Losses	(1,667)	(1,867)
Fair Value	64,427	62,687
Total OTTI Recognized in OCI	0	0
Fixed maturities
Investment [Line Items]
Amortized Cost	36,496,608	35,725,810
Gross Unrealized Gains	513,432	39,942
Gross Unrealized Losses	(1,124,424)	(2,922,703)
Fair Value	35,885,616	32,843,049
Total OTTI Recognized in OCI	(4,561)	(605)
Equity securities
Investment [Line Items]
Amortized Cost	673,448	684,888
Gross Unrealized Gains	26,392	13,255
Gross Unrealized Losses	(5,092)	(6,477)
Fair Value	694,748	691,666
Total OTTI Recognized in OCI	0	0
Short-term investments
Investment [Line Items]
Amortized Cost	206,157	202,110
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	206,157	202,110
Total OTTI Recognized in OCI	$ 0	$ 0

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INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity (Details) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Held-to-maturity, Fair Value
Fair Value	$ 2,853,788	$ 515,000
Fixed maturities
Available-for-sale, Amortized Cost
Due in one year or less	750,175
Due after one year through five years	6,878,977
Due after five years through ten years	7,673,357
Due after ten years	21,194,099
Total	36,496,608
Available-for-sale, Fair Value
Due in one year or less	750,605
Due after one year through five years	6,918,323
Due after five years through ten years	7,783,110
Due after ten years	20,433,578
Total	35,885,616
Held-to-maturity, Amortized Cost
Due after ten years	2,779,280
Amortized Cost	2,779,280	593,314
Held-to-maturity, Fair Value
Due after ten years	2,853,788
Fair Value	$ 2,853,788	$ 515,000

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INVESTMENT OPERATIONS - Schedule of Other-than-Temporary Impairments of Investments (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Gain (Loss) on Investments [Line Items]
Other-than-temporary impairments		$ (5,527)	$ (13,395)	$ (13,395)	$ (8,296)
Non-credit impairment losses recorded in other comprehensive income		4,560	7,661	7,661	4,712
Net impairment losses recognized in earnings		$ (967)	$ (5,734)	$ (5,734)	$ (3,584)
Predecessor
Gain (Loss) on Investments [Line Items]
Other-than-temporary impairments	$ (636)
Non-credit impairment losses recorded in other comprehensive income	155
Net impairment losses recognized in earnings	$ (481)

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INVESTMENT OPERATIONS - Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Loss) (Details) - Fixed maturities - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Investment [Line Items]
Beginning balance		$ 2,619	$ 0	$ 0	$ 22,761
Additions for newly impaired securities		964	4,472	4,472	3,056
Additions for previously impaired securities		0	0	0	525
Reductions for previously impaired securities due to a change in expected cash flows		0	0	0	(22,759)
Reductions for previously impaired securities that were sold in the current period		(2,619)	0	0	(2,619)
Ending balance	$ 0	$ 964	$ 4,472	4,472	$ 964
Predecessor
Investment [Line Items]
Beginning balance	15,463			$ 15,684
Additions for newly impaired securities	0
Additions for previously impaired securities	221
Reductions for previously impaired securities due to a change in expected cash flows	0
Reductions for previously impaired securities that were sold in the current period	0
Ending balance	$ 15,684

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INVESTMENT OPERATIONS - Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired (Details) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value
Less Than 12 Months	$ 2,753,880	$ 30,237,469
12 Months or More	15,257,802	0
Total	18,011,682	30,237,469
Unrealized Loss
Less Than 12 Months	(134,986)	(2,929,180)
12 Months or More	(994,530)	0
Total	(1,129,516)	(2,929,180)
Residential mortgage-backed securities
Fair Value
Less Than 12 Months	192,301	977,433
12 Months or More	152,965	0
Total	345,266	977,433
Unrealized Loss
Less Than 12 Months	(3,103)	(17,112)
12 Months or More	(6,150)	0
Total	(9,253)	(17,112)
Commercial mortgage-backed securities
Fair Value
Less Than 12 Months	43,965	1,232,495
12 Months or More	194,550	0
Total	238,515	1,232,495
Unrealized Loss
Less Than 12 Months	(283)	(41,852)
12 Months or More	(3,443)	0
Total	(3,726)	(41,852)
Other asset-backed securities
Fair Value
Less Than 12 Months	90,316	633,274
12 Months or More	550,860	0
Total	641,176	633,274
Unrealized Loss
Less Than 12 Months	(1,188)	(18,763)
12 Months or More	(34,867)	0
Total	(36,055)	(18,763)
U.S. government-related securities
Fair Value
Less Than 12 Months	1,283	1,291,476
12 Months or More	57,372	0
Total	58,655	1,291,476
Unrealized Loss
Less Than 12 Months	(5)	(34,532)
12 Months or More	(200)	0
Total	(205)	(34,532)
Other government-related securities
Fair Value
Less Than 12 Months	0	17,740
12 Months or More	0	0
Total	0	17,740
Unrealized Loss
Less Than 12 Months	0	(743)
12 Months or More	0	0
Total	0	(743)
States, municipals, and political subdivisions
Fair Value
Less Than 12 Months	34,112	1,566,752
12 Months or More	718,798	0
Total	752,910	1,566,752
Unrealized Loss
Less Than 12 Months	(274)	(126,814)
12 Months or More	(21,320)	0
Total	(21,594)	(126,814)
Corporate securities
Fair Value
Less Than 12 Months	2,336,766	24,235,121
12 Months or More	13,476,384	0
Total	15,813,150	24,235,121
Unrealized Loss
Less Than 12 Months	(128,908)	(2,681,020)
12 Months or More	(923,016)	0
Total	(1,051,924)	(2,681,020)
Preferred Stock
Fair Value
Less Than 12 Months	0	34,685
12 Months or More	19,271	0
Total	19,271	34,685
Unrealized Loss
Less Than 12 Months	0	(1,867)
12 Months or More	(1,667)	0
Total	(1,667)	(1,867)
Equity securities
Fair Value
Less Than 12 Months	55,137	248,493
12 Months or More	87,602	0
Total	142,739	248,493
Unrealized Loss
Less Than 12 Months	(1,225)	(6,477)
12 Months or More	(3,867)	0
Total	$ (5,092)	$ (6,477)

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INVESTMENT OPERATIONS - Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor | Fixed maturities
Investment Holdings [Line Items]
Change in unrealized gains (losses), net of income tax		$ 845,933	$ (1,039,827)	$ (1,383,066)	$ 1,476,650
Successor | Equity securities
Investment Holdings [Line Items]
Change in unrealized gains (losses), net of income tax		$ 9,509	$ (9,048)	$ (7,537)	$ 9,439
Predecessor | Fixed maturities
Investment Holdings [Line Items]
Change in unrealized gains (losses), net of income tax	$ 669,160
Predecessor | Equity securities
Investment Holdings [Line Items]
Change in unrealized gains (losses), net of income tax	$ 12,172

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INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity (Details) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investment [Line Items]
Fair Value	$ 2,853,788	$ 515,000
Fixed maturities
Investment [Line Items]
Amortized Cost	2,779,280	593,314
Gross Unrealized Gains	97,387	0
Gross Unrealized Losses	(22,879)	(78,314)
Fair Value	2,853,788	515,000
Fixed maturities | Red Mountain
Investment [Line Items]
Amortized Cost	626,280	593,314
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(22,879)	(78,314)
Fair Value	603,401	$ 515,000
Fixed maturities | Steel City
Investment [Line Items]
Amortized Cost	2,153,000
Gross Unrealized Gains	97,387
Gross Unrealized Losses	0
Fair Value	$ 2,250,387

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets:
Available-for-sale securities, fair value	$ 36,786,521	$ 33,736,825
Total fixed maturity securities	38,675,207	35,507,098
Equity securities	702,796	699,925
Fair Value, Other long-term investments	640,539	323,570
Short-term investments	244,363	263,837
Assets related to separate accounts
Variable annuity	12,891,214	12,829,188
Variable universal life	831,818	827,610
Fixed maturities
Assets:
Available-for-sale securities, fair value	35,885,616	32,843,049
Trading securities	2,800,000	2,700,000
Residential mortgage-backed securities
Assets:
Available-for-sale securities, fair value	1,931,813	1,765,273
Commercial mortgage-backed securities
Assets:
Available-for-sale securities, fair value	1,578,172	1,285,864
Other asset-backed securities
Assets:
Available-for-sale securities, fair value	1,120,642	797,051
States, municipals, and political subdivisions
Assets:
Available-for-sale securities, fair value	1,737,499	1,603,600
Other government-related securities
Assets:
Available-for-sale securities, fair value	18,680	17,740
Corporate securities
Assets:
Available-for-sale securities, fair value	28,062,587	25,778,657
Level 3 | Other asset-backed securities
Assets related to separate accounts
Total assets measured at fair value on a recurring basis	524,166	587,031
Measured at fair value on a recurring basis
Assets:
Total fixed maturity securities	38,675,207	35,507,098
Equity securities	702,796	699,925
Fair Value, Other long-term investments	640,539	323,570
Short-term investments	244,363	263,837
Total investments	40,262,905	36,794,430
Cash	295,143	212,358
Assets related to separate accounts
Variable annuity	12,891,214	12,829,188
Variable universal life	831,818	827,610
Total assets measured at fair value on a recurring basis	54,281,080	50,663,586
Liabilities:
Annuity account balances	88,820	92,512
Fair Value, Other Liabilities	783,551	522,225
Total liabilities measured at fair value on a recurring basis	872,371	614,737
Measured at fair value on a recurring basis | Fixed maturities
Assets:
Available-for-sale securities, fair value	35,885,616	32,843,049
Trading securities	2,789,591	2,664,049
Measured at fair value on a recurring basis | Residential mortgage-backed securities
Assets:
Available-for-sale securities, fair value	1,931,813	1,765,273
Trading securities	271,994	286,658
Measured at fair value on a recurring basis | Commercial mortgage-backed securities
Assets:
Available-for-sale securities, fair value	1,578,172	1,285,864
Trading securities	157,176	146,743
Measured at fair value on a recurring basis | Other asset-backed securities
Assets:
Available-for-sale securities, fair value	1,120,642	797,051
Trading securities	275,040	275,423
Measured at fair value on a recurring basis | U.S. government-related securities
Assets:
Available-for-sale securities, fair value	1,371,796	1,532,177
Trading securities	46,507	238,347
Measured at fair value on a recurring basis | States, municipals, and political subdivisions
Assets:
Available-for-sale securities, fair value	1,737,499	1,603,600
Trading securities	362,504	313,354
Measured at fair value on a recurring basis | Other government-related securities
Assets:
Available-for-sale securities, fair value	18,680	17,740
Trading securities	60,261	58,827
Measured at fair value on a recurring basis | Corporate securities
Assets:
Available-for-sale securities, fair value	28,062,587	25,778,657
Trading securities	1,612,530	1,340,501
Measured at fair value on a recurring basis | Preferred Stock
Assets:
Available-for-sale securities, fair value	64,427	62,687
Trading securities	3,579	4,196
Measured at fair value on a recurring basis | Level 1
Assets:
Total fixed maturity securities	1,198,729	1,333,895
Equity securities	636,270	620,358
Fair Value, Other long-term investments	311,141	113,699
Short-term investments	240,841	261,659
Total investments	2,386,981	2,329,611
Cash	295,143	212,358
Assets related to separate accounts
Variable annuity	12,891,214	12,829,188
Variable universal life	831,818	827,610
Total assets measured at fair value on a recurring basis	16,405,156	16,198,767
Liabilities:
Annuity account balances	0	0
Fair Value, Other Liabilities	59,711	40,067
Total liabilities measured at fair value on a recurring basis	59,711	40,067
Measured at fair value on a recurring basis | Level 1 | Fixed maturities
Assets:
Available-for-sale securities, fair value	1,153,658	1,097,509
Trading securities	45,071	236,386
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities
Assets:
Available-for-sale securities, fair value	1,108,503	1,054,353
Trading securities	41,639	233,592
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 1 | Other government-related securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 1 | Corporate securities
Assets:
Available-for-sale securities, fair value	0	83
Trading securities	0	0
Measured at fair value on a recurring basis | Level 1 | Preferred Stock
Assets:
Available-for-sale securities, fair value	45,155	43,073
Trading securities	3,432	2,794
Measured at fair value on a recurring basis | Level 2
Assets:
Total fixed maturity securities	35,991,640	32,512,913
Equity securities	0	13,063
Fair Value, Other long-term investments	266,478	141,487
Short-term investments	3,522	2,178
Total investments	36,261,640	32,669,641
Cash	0	0
Assets related to separate accounts
Variable annuity	0	0
Variable universal life	0	0
Total assets measured at fair value on a recurring basis	36,261,640	32,669,641
Liabilities:
Annuity account balances	0	0
Fair Value, Other Liabilities	142,794	106,310
Total liabilities measured at fair value on a recurring basis	142,794	106,310
Measured at fair value on a recurring basis | Level 2 | Fixed maturities
Assets:
Available-for-sale securities, fair value	33,415,671	30,256,387
Trading securities	2,575,969	2,256,526
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities
Assets:
Available-for-sale securities, fair value	1,931,810	1,765,270
Trading securities	271,994	286,658
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities
Assets:
Available-for-sale securities, fair value	1,578,172	1,285,864
Trading securities	157,176	146,743
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities
Assets:
Available-for-sale securities, fair value	587,501	210,020
Trading securities	123,076	122,511
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities
Assets:
Available-for-sale securities, fair value	263,293	477,824
Trading securities	4,868	4,755
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions
Assets:
Available-for-sale securities, fair value	1,737,499	1,603,600
Trading securities	362,504	313,354
Measured at fair value on a recurring basis | Level 2 | Other government-related securities
Assets:
Available-for-sale securities, fair value	18,680	17,740
Trading securities	60,261	58,827
Measured at fair value on a recurring basis | Level 2 | Corporate securities
Assets:
Available-for-sale securities, fair value	27,279,444	24,876,455
Trading securities	1,595,943	1,322,276
Measured at fair value on a recurring basis | Level 2 | Preferred Stock
Assets:
Available-for-sale securities, fair value	19,272	19,614
Trading securities	147	1,402
Measured at fair value on a recurring basis | Level 3
Assets:
Total fixed maturity securities	1,484,838	1,660,290
Equity securities	66,526	66,504
Fair Value, Other long-term investments	62,920	68,384
Short-term investments	0	0
Total investments	1,614,284	1,795,178
Cash	0	0
Assets related to separate accounts
Variable annuity	0	0
Variable universal life	0	0
Total assets measured at fair value on a recurring basis	1,614,284	1,795,178
Liabilities:
Annuity account balances	88,820	92,512
Fair Value, Other Liabilities	581,046	375,848
Total liabilities measured at fair value on a recurring basis	669,866	468,360
Measured at fair value on a recurring basis | Level 3 | Fixed maturities
Assets:
Available-for-sale securities, fair value	1,316,287	1,489,153
Trading securities	168,551	171,137
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities
Assets:
Available-for-sale securities, fair value	3	3
Trading securities	0	0
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities
Assets:
Available-for-sale securities, fair value	533,141	587,031
Trading securities	151,964	152,912
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 3 | Other government-related securities
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	0	0
Measured at fair value on a recurring basis | Level 3 | Corporate securities
Assets:
Available-for-sale securities, fair value	783,143	902,119
Trading securities	16,587	18,225
Measured at fair value on a recurring basis | Level 3 | Preferred Stock
Assets:
Available-for-sale securities, fair value	0	0
Trading securities	$ 0	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) quote primary_source	Dec. 31, 2015 USD ($)
Determination of fair values
Number of primary sources of information used for determining fair value | primary_source	1
Total number of primary sources of information available for determining fair value | primary_source	3
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services	90.00%
Number of independent non-binding broker quotes obtained per security | quote	1
Golden Gate II
Determination of fair values
Amount of collateralized support agreement obligations by PLC	$ 1,500
Embedded derivative - GMWB
Determination of fair values
Discount rate curve, base rate	LIBOR
Embedded derivative - GMWB | Level 3 | Minimum
Determination of fair values
Mortality (as a percent)	44.50%
Embedded derivative - GMWB | Level 3 | Maximum
Determination of fair values
Mortality (as a percent)	100.00%
Embedded derivative - FIA
Determination of fair values
Discount rate curve, base rate	LIBOR
Embedded derivative - FIA | Level 3 | Minimum
Determination of fair values
Mortality (as a percent)	49.00%
Embedded derivative - FIA | Level 3 | Maximum
Determination of fair values
Mortality (as a percent)	80.00%
Embedded derivative - IUL
Determination of fair values
Discount rate curve, base rate	LIBOR
Embedded derivative - IUL | Level 3 | Minimum
Determination of fair values
Mortality (as a percent)	38.00%
Embedded derivative - IUL | Level 3 | Maximum
Determination of fair values
Mortality (as a percent)	153.00%
Successor
Determination of fair values
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations	75.00%
Fair Value, Other long-term investments	$ 640,539	$ 323,570
Successor | Interest support, YRT premium support and portfolio maintenance agreement
Determination of fair values
Fair Value, Other long-term investments	37,300
Successor | Golden Gate II | Interest Support Agreement
Determination of fair values
Fair Value, Other long-term investments	29,600
Amount of collateralized support agreement obligations by PLC	1,500
Payments made under agreement	0
Successor | Golden Gate II | YRT premium support agreement
Determination of fair values
Fair Value, Other long-term investments	3,300
Payments made under agreement	0
Successor | Golden Gate V and West Coast Life | Portfolio maintenance agreements
Determination of fair values
Fair Value, Other long-term investments	4,400
Payments made under agreement	0
Successor | Asset-Backed Securities | Level 3
Determination of fair values
Fair Value	685,100
Successor | Asset-Backed Securities | Level 2
Determination of fair values
Fair Value	$ 4,600,000
Successor | Other asset-backed securities
Determination of fair values
Underlying Collateral, Percentage guaranteed by the Federal Family Education Loan Program	97.00%
Successor | Other asset-backed securities | Level 3
Determination of fair values
Underlying Collateral, Percentage guaranteed by the Federal Family Education Loan Program	97.00%
Successor | Other asset-backed securities | Level 3 | Available-for-sale securities
Determination of fair values
Fair Value	$ 533,100
Successor | Other asset-backed securities | Level 3 | Trading Securities
Determination of fair values
Fair Value	152,000
Successor | Corporate Bonds, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities | Level 3
Determination of fair values
Fair Value	799,700
Successor | Corporate Bonds, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities | Level 2
Determination of fair values
Fair Value	31,300,000
Successor | Equity securities
Determination of fair values
Fair Value	66,500
Federal Home Loan Bank stock	65,700
Successor | Embedded derivative - Modified coinsurance agreements
Determination of fair values
Statutory policy liabilities (net of policy loans)	2,400,000
Successor | Embedded derivative - Modified coinsurance agreements | Trading Securities
Determination of fair values
Fair Value	253,200
Successor | Funds withheld derivative | Level 2
Determination of fair values
Fair Value, Other Liabilities	$ 129,500
Annuity account | Successor
Annuity account balances
Fixed indexed annuities, discount rate for one month (as a percent)	0.68%
Fixed indexed annuities, discount rate for five years (as a percent)	1.82%
Fixed indexed annuities, discount rate for thirty years (as a percent)	3.03%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - Successor - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Unobservable Input
Financial instruments with book value approximating to fair value	$ 66,500,000	$ 66,500,000
Annuity account
Valuation of Level 3 Financial Instruments
Fair Value of Liabilities	88,820,000
Level 3
Unobservable Input
Financial instruments that are valued using broker quotes	202,400,000	197,500,000
Level 3 | Other asset-backed securities
Valuation of Level 3 Financial Instruments
Fair Value of Assets	524,166,000	587,031,000
Unobservable Input
Financial instruments that are valued using broker quotes	160,900,000	152,900,000
Level 3 | Corporate securities
Unobservable Input
Financial instruments that are valued using broker quotes	$ 41,400,000	$ 44,600,000
Level 3 | Discounted cash flow | Other asset-backed securities | Minimum
Unobservable Input
Liquidity premium (as a percent)	0.24%	0.27%
Paydown rate (as a percent)	9.37%	10.20%
Level 3 | Discounted cash flow | Other asset-backed securities | Maximum
Unobservable Input
Liquidity premium (as a percent)	1.14%	1.49%
Paydown rate (as a percent)	11.91%	14.72%
Level 3 | Discounted cash flow | Other asset-backed securities | Weighted Average
Unobservable Input
Liquidity premium (as a percent)	0.55%	0.42%
Paydown rate (as a percent)	10.16%	13.11%
Level 3 | Actuarial cash flow model | Embedded derivative - FIA
Unobservable Input
Inflation Rate (As a percent)	2.50%
Level 3 | Embedded derivative - GMWB
Valuation of Level 3 Financial Instruments
Fair Value of Liabilities	$ 151,212,000	$ 18,511,000
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model
Unobservable Input
Utilization (as a percent)		99.00%
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Minimum
Unobservable Input
Lapse (as a percent)		0.30%
Nonperformance risk (as a percent)		0.18%
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Maximum
Unobservable Input
Lapse (as a percent)		15.00%
Nonperformance risk (as a percent)		1.04%
Level 3 | Annuity account
Valuation of Level 3 Financial Instruments
Fair Value of Liabilities		$ 92,512,000
Level 3 | Annuity account | Actuarial cash flow model
Unobservable Input
Expenses per policy	$ 83	$ 81
Withdrawal rate (as a percent)	2.20%	2.20%
Level 3 | Annuity account | Actuarial cash flow model | Minimum
Unobservable Input
Lapse (as a percent)	2.20%	2.20%
Nonperformance risk (as a percent)	0.22%	0.18%
Asset earned rate (as a percent)	4.53%	4.53%
Return on assets (as a percent)	1.50%	1.50%
Level 3 | Annuity account | Actuarial cash flow model | Maximum
Unobservable Input
Lapse (as a percent)	33.00%	33.00%
Nonperformance risk (as a percent)	1.20%	1.04%
Asset earned rate (as a percent)	5.67%	5.67%
Return on assets (as a percent)	1.85%	1.85%
Level 3 | Embedded derivative - FIA
Valuation of Level 3 Financial Instruments
Fair Value of Liabilities	$ 119,997,000	$ 100,329,000
Level 3 | Embedded derivative - FIA | Actuarial cash flow model
Unobservable Input
Expenses per policy	$ 83	$ 81.5
Level 3 | Embedded derivative - FIA | Actuarial cash flow model | Minimum
Unobservable Input
Lapse (as a percent)	2.50%	2.50%
Nonperformance risk (as a percent)	0.22%	0.18%
Withdrawal rate (as a percent)	1.10%	1.10%
Level 3 | Embedded derivative - FIA | Actuarial cash flow model | Maximum
Unobservable Input
Lapse (as a percent)	40.00%	40.00%
Nonperformance risk (as a percent)	1.20%	1.04%
Withdrawal rate (as a percent)	4.50%	4.50%
Level 3 | Embedded derivative - IUL
Valuation of Level 3 Financial Instruments
Fair Value of Liabilities	$ 46,711,000	$ 29,629,000
Level 3 | Embedded derivative - IUL | Actuarial cash flow model | Minimum
Unobservable Input
Lapse (as a percent)	0.50%	0.50%
Nonperformance risk (as a percent)	0.22%	0.18%
Mortality (as a percent)	38.00%	38.00%
Level 3 | Embedded derivative - IUL | Actuarial cash flow model | Maximum
Unobservable Input
Lapse (as a percent)	10.00%	10.00%
Nonperformance risk (as a percent)	1.20%	1.04%
Mortality (as a percent)	153.00%	153.00%
Level 3 | Corporate securities
Valuation of Level 3 Financial Instruments
Fair Value of Assets	$ 758,312,000	$ 875,810,000
Level 3 | Corporate securities | Discounted cash flow | Minimum
Unobservable Input
Spread over treasury (as a percent)	0.70%	0.10%
Level 3 | Corporate securities | Discounted cash flow | Maximum
Unobservable Input
Spread over treasury (as a percent)	6.25%	19.00%
Level 3 | Corporate securities | Discounted cash flow | Weighted Average
Unobservable Input
Spread over treasury (as a percent)	2.45%	2.61%
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model
Unobservable Input
Utilization (as a percent)	99.00%
Policies that have a one-time over-utilization rate of a specified amount (as a percent)	10.00%	10.00%
Specified level of one-time over-utilization (as a percent)	400.00%	400.00%
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Minimum
Unobservable Input
Lapse (as a percent)	0.30%
Nonperformance risk (as a percent)	0.22%
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Maximum
Unobservable Input
Lapse (as a percent)	15.00%
Nonperformance risk (as a percent)	1.20%
Annuity account | Level 3 | Actuarial cash flow model
Unobservable Input
Inflation Rate (As a percent)	2.50%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - USD ($)	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Transfers
Securities transferred into Level 3		$ 27,200,000	$ 0	$ 0	$ 71,300,000
Securities transferred into Level 2 from Level 3		44,000,000	21,800,000	41,900,000	150,100,000
Securities transferred from Level 2 to Level 1		0	0	90,400,000	12,200,000
Securities transferred out of Level 1		0	0	0	100,000
Predecessor
Transfers
Securities transferred into Level 3	$ 43,200,000
Securities transferred into Level 2 from Level 3	0
Securities transferred from Level 2 to Level 1	0
Securities transferred out of Level 1	0
Level 3 | Successor
Assets:
Beginning Balance		1,651,483,000	2,219,304,000	2,240,077,000	1,795,178,000
Total Realized and Unrealized Gains Included in Earnings		19,046,000	29,367,000	48,446,000	30,658,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income		16,958,000	4,166,000	15,784,000	31,880,000
Total Realized and Unrealized Losses Included in Earnings		(10,411,000)	(9,870,000)	(9,964,000)	(32,721,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income		(9,044,000)	(33,570,000)	(37,138,000)	(28,388,000)
Purchases		30,085,000	89,929,000	111,929,000	47,514,000
Sales		(65,360,000)	(225,095,000)	(272,428,000)	(146,597,000)
Transfers in and/or out of Level 3		(16,773,000)	(21,803,000)	(41,853,000)	(78,802,000)
Other		(1,700,000)	(3,220,000)	(5,645,000)	(4,438,000)
Ending Balance	2,240,077,000	1,614,284,000	2,049,208,000	2,049,208,000	1,614,284,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		7,711,000	16,617,000	29,310,000	(5,547,000)
Liabilities:
Beginning Balance		586,361,000	574,837,000	628,397,000	468,360,000
Total Realized and Unrealized Gains Included in Earnings		15,217,000	147,963,000	212,854,000	15,585,000
Total Realized and Unrealized Losses Included in Earnings		(100,555,000)	(14,090,000)	(27,225,000)	(221,879,000)
Issuances		63,000	72,000	86,000	250,000
Settlements		1,896,000	2,913,000	4,731,000	5,038,000
Ending Balance	628,397,000	669,866,000	438,123,000	438,123,000	669,866,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		(84,808,000)	134,784,000	187,173,000	(205,198,000)
Level 3 | Successor | Annuity account
Liabilities:
Beginning Balance		90,123,000	97,108,000	98,279,000	92,512,000
Total Realized and Unrealized Losses Included in Earnings		(530,000)	(911,000)	(1,544,000)	(1,096,000)
Issuances		63,000	72,000	86,000	250,000
Settlements		1,896,000	2,913,000	4,731,000	5,038,000
Ending Balance	98,279,000	88,820,000	95,178,000	95,178,000	88,820,000
Level 3 | Successor | Other liabilities
Liabilities:
Beginning Balance		496,238,000	477,729,000	530,118,000	375,848,000
Total Realized and Unrealized Gains Included in Earnings		15,217,000	147,963,000	212,854,000	15,585,000
Total Realized and Unrealized Losses Included in Earnings		(100,025,000)	(13,179,000)	(25,681,000)	(220,783,000)
Ending Balance	530,118,000	581,046,000	342,945,000	342,945,000	581,046,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		(84,808,000)	134,784,000	187,173,000	(205,198,000)
Level 3 | Successor | Total investments
Assets:
Beginning Balance		1,651,483,000	2,219,304,000	2,240,077,000	1,795,178,000
Total Realized and Unrealized Gains Included in Earnings		19,046,000	29,367,000	48,446,000	30,658,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income		16,958,000	4,166,000	15,784,000	31,880,000
Total Realized and Unrealized Losses Included in Earnings		(10,411,000)	(9,870,000)	(9,964,000)	(32,721,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income		(9,044,000)	(33,570,000)	(37,138,000)	(28,388,000)
Purchases		30,085,000	89,929,000	111,929,000	47,514,000
Sales		(65,360,000)	(225,095,000)	(272,428,000)	(146,597,000)
Transfers in and/or out of Level 3		(16,773,000)	(21,803,000)	(41,853,000)	(78,802,000)
Other		(1,700,000)	(3,220,000)	(5,645,000)	(4,438,000)
Ending Balance	2,240,077,000	1,614,284,000	2,049,208,000	2,049,208,000	1,614,284,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		7,711,000	16,617,000	29,310,000	(5,547,000)
Level 3 | Successor | Fixed maturities
Assets:
Beginning Balance		1,527,931,000	2,073,391,000	2,109,186,000	1,660,290,000
Total Realized and Unrealized Gains Included in Earnings		2,771,000	4,385,000	8,414,000	10,166,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income		16,958,000	4,166,000	15,784,000	31,880,000
Total Realized and Unrealized Losses Included in Earnings		(8,000)	(6,185,000)	(6,251,000)	(5,336,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income		(9,044,000)	(33,570,000)	(37,138,000)	(28,388,000)
Purchases		30,063,000	89,929,000	111,929,000	46,063,000
Sales		(65,360,000)	(224,864,000)	(272,197,000)	(146,597,000)
Transfers in and/or out of Level 3		(16,773,000)	(21,803,000)	(41,853,000)	(78,802,000)
Other		(1,700,000)	(3,220,000)	(5,645,000)	(4,438,000)
Ending Balance	2,109,186,000	1,484,838,000	1,882,229,000	1,882,229,000	1,484,838,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		1,839,000	(4,680,000)	(7,009,000)	1,346,000
Level 3 | Successor | Fixed maturities | Available-for-sale securities
Assets:
Beginning Balance		1,371,571,000	1,883,277,000	1,914,583,000	1,489,153,000
Total Realized and Unrealized Gains Included in Earnings		925,000	3,656,000	4,291,000	7,784,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income		16,958,000	4,166,000	15,784,000	31,880,000
Total Realized and Unrealized Losses Included in Earnings			(779,000)	(779,000)	(4,135,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income		(9,044,000)	(33,570,000)	(37,138,000)	(28,388,000)
Purchases		19,155,000	89,929,000	111,929,000	35,155,000
Sales		(64,752,000)	(219,235,000)	(258,737,000)	(140,314,000)
Transfers in and/or out of Level 3		(16,773,000)	(21,803,000)	(41,853,000)	(70,495,000)
Other		(1,753,000)	(3,322,000)	(5,761,000)	(4,353,000)
Ending Balance	1,914,583,000	1,316,287,000	1,702,319,000	1,702,319,000	1,316,287,000
Level 3 | Successor | Fixed maturities | Trading Securities
Assets:
Beginning Balance		156,360,000	190,114,000	194,603,000	171,137,000
Total Realized and Unrealized Gains Included in Earnings		1,846,000	729,000	4,123,000	2,382,000
Total Realized and Unrealized Losses Included in Earnings		(8,000)	(5,406,000)	(5,472,000)	(1,201,000)
Purchases		10,908,000			10,908,000
Sales		(608,000)	(5,629,000)	(13,460,000)	(6,283,000)
Transfers in and/or out of Level 3					(8,307,000)
Other		53,000	102,000	116,000	(85,000)
Ending Balance	194,603,000	168,551,000	179,910,000	179,910,000	168,551,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		1,839,000	(4,680,000)	(7,009,000)	1,346,000
Level 3 | Successor | Residential mortgage-backed securities | Available-for-sale securities
Assets:
Beginning Balance		3,000	3,000	3,000	3,000
Ending Balance	3,000	3,000	3,000	3,000	3,000
Level 3 | Successor | Other asset-backed securities | Available-for-sale securities
Assets:
Beginning Balance		537,831,000	600,132,000	603,646,000	587,031,000
Total Realized and Unrealized Gains Included in Earnings					6,859,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income		769,000	165,000	165,000	769,000
Total Realized and Unrealized Losses Included in Earnings			(92,000)	(92,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income		(8,350,000)	(9,323,000)	(12,891,000)	(21,407,000)
Purchases		9,597,000			9,597,000
Sales		(7,629,000)	(87,000)	(127,000)	(58,449,000)
Transfers in and/or out of Level 3					7,457,000
Other		923,000	90,000	184,000	1,284,000
Ending Balance	603,646,000	533,141,000	590,885,000	590,885,000	533,141,000
Level 3 | Successor | Other asset-backed securities | Trading Securities
Assets:
Beginning Balance		150,683,000	170,500,000	169,473,000	152,912,000
Total Realized and Unrealized Gains Included in Earnings		1,822,000	589,000	3,949,000	2,050,000
Total Realized and Unrealized Losses Included in Earnings		(8,000)	(5,173,000)	(5,173,000)	(942,000)
Sales		(609,000)	(5,468,000)	(7,876,000)	(2,212,000)
Transfers in and/or out of Level 3					172,000
Other		76,000	146,000	221,000	(16,000)
Ending Balance	169,473,000	151,964,000	160,594,000	160,594,000	151,964,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		1,814,000	(4,587,000)	(5,829,000)	1,105,000
Level 3 | Successor | States, municipals, and political subdivisions | Available-for-sale securities
Assets:
Beginning Balance				3,675,000
Sales				(3,675,000)
Ending Balance	3,675,000
Level 3 | Successor | Corporate securities | Available-for-sale securities
Assets:
Beginning Balance		833,737,000	1,283,142,000	1,307,259,000	902,119,000
Total Realized and Unrealized Gains Included in Earnings		925,000	3,656,000	4,291,000	925,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income		16,189,000	4,001,000	15,619,000	31,111,000
Total Realized and Unrealized Losses Included in Earnings			(687,000)	(687,000)	(4,135,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income		(694,000)	(24,247,000)	(24,247,000)	(6,981,000)
Purchases		9,558,000	89,929,000	111,929,000	25,558,000
Sales		(57,123,000)	(219,148,000)	(254,935,000)	(81,865,000)
Transfers in and/or out of Level 3		(16,773,000)	(21,803,000)	(41,853,000)	(77,952,000)
Other		(2,676,000)	(3,412,000)	(5,945,000)	(5,637,000)
Ending Balance	1,307,259,000	783,143,000	1,111,431,000	1,111,431,000	783,143,000
Level 3 | Successor | Corporate securities | Trading Securities
Assets:
Beginning Balance		5,677,000	19,614,000	25,130,000	18,225,000
Total Realized and Unrealized Gains Included in Earnings		24,000	140,000	174,000	332,000
Total Realized and Unrealized Losses Included in Earnings			(233,000)	(299,000)	(259,000)
Purchases		10,908,000			10,908,000
Sales		1,000	(161,000)	(5,584,000)	(4,071,000)
Transfers in and/or out of Level 3					(8,479,000)
Other		(23,000)	(44,000)	(105,000)	(69,000)
Ending Balance	25,130,000	16,587,000	19,316,000	19,316,000	16,587,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		25,000	(93,000)	(1,180,000)	241,000
Level 3 | Successor | Equity securities
Assets:
Beginning Balance		66,504,000	66,691,000	66,691,000	66,504,000
Purchases		22,000			22,000
Sales			(231,000)	(231,000)
Ending Balance	66,691,000	66,526,000	66,460,000	66,460,000	66,526,000
Level 3 | Successor | Other long-term investments.
Assets:
Beginning Balance		57,048,000	79,222,000	64,200,000	68,384,000
Total Realized and Unrealized Gains Included in Earnings		16,275,000	24,982,000	40,032,000	20,492,000
Total Realized and Unrealized Losses Included in Earnings		(10,403,000)	(3,685,000)	(3,713,000)	(27,385,000)
Purchases					1,429,000
Ending Balance	64,200,000	62,920,000	100,519,000	100,519,000	62,920,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date		$ 5,872,000	$ 21,297,000	36,319,000	$ (6,893,000)
Level 3 | Predecessor
Assets:
Beginning Balance	2,198,843,000			2,221,953,000
Total Realized and Unrealized Gains Included in Earnings	17,805,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income	12,282,000
Total Realized and Unrealized Losses Included in Earnings	(15,501,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income	(26,896,000)
Sales	(7,586,000)
Transfers in and/or out of Level 3	43,205,000
Other	(199,000)
Ending Balance	2,221,953,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	2,304,000
Liabilities:
Beginning Balance	604,168,000			730,226,000
Total Realized and Unrealized Gains Included in Earnings	61,000
Total Realized and Unrealized Losses Included in Earnings	(126,531,000)
Issuances	7,000
Settlements	419,000
Ending Balance	730,226,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	(125,934,000)
Level 3 | Predecessor | Annuity account
Liabilities:
Beginning Balance	97,825,000			97,949,000
Total Realized and Unrealized Losses Included in Earnings	(536,000)
Issuances	7,000
Settlements	419,000
Ending Balance	97,949,000
Level 3 | Predecessor | Other liabilities
Liabilities:
Beginning Balance	506,343,000			632,277,000
Total Realized and Unrealized Gains Included in Earnings	61,000
Total Realized and Unrealized Losses Included in Earnings	(125,995,000)
Ending Balance	632,277,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	(125,934,000)
Level 3 | Predecessor | Total investments
Assets:
Beginning Balance	2,198,843,000			2,221,953,000
Total Realized and Unrealized Gains Included in Earnings	17,805,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income	12,282,000
Total Realized and Unrealized Losses Included in Earnings	(15,501,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income	(26,896,000)
Sales	(7,586,000)
Transfers in and/or out of Level 3	43,205,000
Other	(199,000)
Ending Balance	2,221,953,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	2,304,000
Level 3 | Predecessor | Fixed maturities
Assets:
Beginning Balance	2,087,527,000			2,109,186,000
Total Realized and Unrealized Gains Included in Earnings	1,188,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income	12,282,000
Total Realized and Unrealized Losses Included in Earnings	(335,000)
Total Realized and Unrealized Losses Included in Other Comprehensive Income	(26,896,000)
Sales	(7,586,000)
Transfers in and/or out of Level 3	43,205,000
Other	(199,000)
Ending Balance	2,109,186,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	853,000
Level 3 | Predecessor | Fixed maturities | Available-for-sale securities
Assets:
Beginning Balance	1,893,322,000			1,914,583,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income	12,282,000
Total Realized and Unrealized Losses Included in Other Comprehensive Income	(26,896,000)
Sales	(7,094,000)
Transfers in and/or out of Level 3	43,205,000
Other	(236,000)
Ending Balance	1,914,583,000
Level 3 | Predecessor | Fixed maturities | Trading Securities
Assets:
Beginning Balance	194,205,000			194,603,000
Total Realized and Unrealized Gains Included in Earnings	1,188,000
Total Realized and Unrealized Losses Included in Earnings	(335,000)
Sales	(492,000)
Other	37,000
Ending Balance	194,603,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	853,000
Level 3 | Predecessor | Residential mortgage-backed securities | Available-for-sale securities
Assets:
Beginning Balance	3,000			3,000
Ending Balance	3,000
Level 3 | Predecessor | Other asset-backed securities | Available-for-sale securities
Assets:
Beginning Balance	563,961,000			603,646,000
Total Realized and Unrealized Losses Included in Other Comprehensive Income	(3,867,000)
Sales	(32,000)
Transfers in and/or out of Level 3	43,205,000
Other	379,000
Ending Balance	603,646,000
Level 3 | Predecessor | Other asset-backed securities | Trading Securities
Assets:
Beginning Balance	169,461,000			169,473,000
Total Realized and Unrealized Gains Included in Earnings	586,000
Total Realized and Unrealized Losses Included in Earnings	(139,000)
Sales	(472,000)
Other	37,000
Ending Balance	169,473,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	447,000
Level 3 | Predecessor | States, municipals, and political subdivisions | Available-for-sale securities
Assets:
Beginning Balance	3,675,000			3,675,000
Ending Balance	3,675,000
Level 3 | Predecessor | Corporate securities | Available-for-sale securities
Assets:
Beginning Balance	1,325,683,000			1,307,259,000
Total Realized and Unrealized Gains Included in Other Comprehensive Income	12,282,000
Total Realized and Unrealized Losses Included in Other Comprehensive Income	(23,029,000)
Sales	(7,062,000)
Other	(615,000)
Ending Balance	1,307,259,000
Level 3 | Predecessor | Corporate securities | Trading Securities
Assets:
Beginning Balance	24,744,000			25,130,000
Total Realized and Unrealized Gains Included in Earnings	602,000
Total Realized and Unrealized Losses Included in Earnings	(196,000)
Sales	(20,000)
Ending Balance	25,130,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	406,000
Level 3 | Predecessor | Equity securities
Assets:
Beginning Balance	66,691,000			66,691,000
Ending Balance	66,691,000
Level 3 | Predecessor | Other long-term investments.
Assets:
Beginning Balance	44,625,000			$ 46,076,000
Total Realized and Unrealized Gains Included in Earnings	16,617,000
Total Realized and Unrealized Losses Included in Earnings	(15,166,000)
Ending Balance	46,076,000
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date	$ 1,451,000

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets:
Mortgage loan holdings	$ 5,748,675	$ 5,662,812
Policy loans	1,670,218	1,699,508
Fixed maturities, held-to-maturity	2,779,280	593,314
Liabilities:
Stable value product account balances	2,838,674	2,131,822
Annuity account balances	10,678,701	10,719,862
Debt
Non-recourse funding obligations	2,981,271	1,951,563
Golden Gate V
Debt
Non-recourse funding obligations	598,863
Carrying Amounts | Golden Gate V
Debt
Non-recourse funding obligations	2,800,000	500,000
Carrying Amounts | Level 3
Assets:
Mortgage loan holdings	5,748,675	5,662,812
Policy loans	1,670,218	1,699,508
Liabilities:
Stable value product account balances	2,838,674	2,131,822
Annuity account balances	10,678,701	10,719,862
Debt
Non-recourse funding obligations	2,981,271	1,951,563
Fair Values | Golden Gate V
Debt
Non-recourse funding obligations	2,800,000	495,500
Fair Values | Level 3
Assets:
Mortgage loan holdings	5,735,650	5,529,803
Policy loans	1,670,218	1,699,508
Liabilities:
Stable value product account balances	2,855,064	2,124,712
Annuity account balances	10,221,680	10,274,571
Debt
Non-recourse funding obligations	3,054,637	1,621,773
Fixed maturities | Carrying Amounts | Level 3
Assets:
Fixed maturities, held-to-maturity	2,779,280	593,314
Fixed maturities | Fair Values | Level 3
Assets:
Fixed maturities, held-to-maturity	$ 2,853,788	$ 515,000

XML

DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details)	Jun. 30, 2016 position support_agreement portfolio_maintenance_agreement	Jan. 31, 2016 portfolio_maintenance_agreement	Oct. 31, 2012 portfolio_maintenance_agreement
Derivative [Line Items]
Number of premium support agreements | support_agreement	2
Successor | Designated as hedging instrument | Interest rate swaps
Derivative [Line Items]
Derivative, number of instruments held	0
Successor | Derivatives not designated as hedging instruments | Interest rate swaps
Derivative [Line Items]
Derivative, number of instruments held	0
PLC
Derivative [Line Items]
Number of portfolio maintenance agreements | portfolio_maintenance_agreement	3	1	2

XML

DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investments Gains and Losses (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Successor
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		$ 43,548	$ 10,566	$ 5,618	$ 75,456
Fair Value, Other long-term investments		640,539			640,539	$ 323,570
Successor | Embedded derivative - GMWB
Notional amount and fair value of the entity's derivative financial instruments
Fair Value, Other long-term investments		23,770			23,770	49,007
Successor | Embedded derivative - Modco reinsurance treaties
Notional amount and fair value of the entity's derivative financial instruments
Fair Value, Other long-term investments		1,850			1,850	1,215
Successor | Derivatives with PLC
Notional amount and fair value of the entity's derivative financial instruments
Fair Value, Other long-term investments		37,300			37,300	18,161
Successor | Derivatives not designated as hedging instruments
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		43,548	10,566	5,618	75,456
Notional Amount, Other long-term investments		10,075,149			10,075,149	8,037,250
Fair Value, Other long-term investments		640,539			640,539	323,570
Notional Amount, Other liabilities		10,571,334			10,571,334	9,380,020
Fair Value, Other Liabilities		783,551			783,551	522,225
Successor | Derivatives not designated as hedging instruments | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		50,454	(98,025)	(138,192)	144,058
Successor | Derivatives not designated as hedging instruments | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		2,096	1,664	3,644	(4,246)
Successor | Derivatives not designated as hedging instruments | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		192	1,469	1,880	(792)
Successor | Derivatives not designated as hedging instruments | Interest rate futures | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		31,266	(14,183)	(14,231)	69,067
Successor | Derivatives not designated as hedging instruments | Equity futures
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		190,058			190,058	262,485
Fair Value, Other long-term investments		752			752	1,275
Notional Amount, Other liabilities		582,493			582,493	233,412
Fair Value, Other Liabilities		7,461			7,461	2,599
Successor | Derivatives not designated as hedging instruments | Equity futures | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(21,328)	(5,267)	(37,736)	(24,556)
Successor | Derivatives not designated as hedging instruments | Equity futures | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		651	123	307	2,033
Successor | Derivatives not designated as hedging instruments | Equity futures | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		47	9	23	(172)
Successor | Derivatives not designated as hedging instruments | Currency futures
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		314,256			314,256	226,936
Fair Value, Other long-term investments		15,915			15,915	2,499
Notional Amount, Other liabilities		64,445			64,445	46,692
Fair Value, Other Liabilities		1,805			1,805	1,115
Successor | Derivatives not designated as hedging instruments | Currency futures | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		11,112	(8,709)	(2,572)	4,954
Successor | Derivatives not designated as hedging instruments | Volatility futures | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		0	25	29	0
Successor | Derivatives not designated as hedging instruments | Equity options
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		2,725,744			2,725,744	2,198,340
Fair Value, Other long-term investments		269,217			269,217	179,458
Notional Amount, Other liabilities		1,459,533			1,459,533	1,205,204
Fair Value, Other Liabilities		60,551			60,551	22,167
Successor | Derivatives not designated as hedging instruments | Equity options | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(3,232)	(3,550)	(25,324)	13,072
Successor | Derivatives not designated as hedging instruments | Equity options | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		735	1,226	5,601	(4,827)
Successor | Derivatives not designated as hedging instruments | Equity options | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		241	(78)	62	214
Successor | Derivatives not designated as hedging instruments | Interest rate swaptions
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		225,000			225,000	225,000
Fair Value, Other long-term investments		681			681	3,663
Successor | Derivatives not designated as hedging instruments | Interest rate swaptions | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(749)	2,547	(8,781)	(2,983)
Successor | Derivatives not designated as hedging instruments | Interest rate swaps
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		1,640,000			1,640,000	1,435,000
Fair Value, Other long-term investments		255,439			255,439	66,408
Notional Amount, Other liabilities		270,000			270,000	475,000
Fair Value, Other Liabilities		3,215			3,215	16,579
Successor | Derivatives not designated as hedging instruments | Interest rate swaps | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		81,554	(121,167)	(175,958)	207,147
Successor | Derivatives not designated as hedging instruments | Embedded derivative - GMWB
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		891,276			891,276	1,723,081
Fair Value, Other long-term investments		23,770			23,770	49,007
Notional Amount, Other liabilities		2,853,530			2,853,530	1,834,308
Fair Value, Other Liabilities		174,988			174,988	67,528
Successor | Derivatives not designated as hedging instruments | Embedded derivative - GMWB | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(66,019)	45,969	81,839	(132,695)
Successor | Derivatives not designated as hedging instruments | Funds withheld derivative
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other liabilities		1,492,757			1,492,757	1,149,664
Fair Value, Other Liabilities		129,473			129,473	102,378
Successor | Derivatives not designated as hedging instruments | Funds withheld derivative | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		17,850	6,335	44,571	10,052
Successor | Derivatives not designated as hedging instruments | Embedded derivative - FIA
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other liabilities		1,313,404			1,313,404	1,110,790
Fair Value, Other Liabilities		119,997			119,997	100,329
Successor | Derivatives not designated as hedging instruments | Embedded derivative - FIA | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		710	290	(2,293)	(1,452)
Successor | Derivatives not designated as hedging instruments | Embedded derivative - IUL
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other liabilities		77,879			77,879	57,760
Fair Value, Other Liabilities		46,711			46,711	29,629
Successor | Derivatives not designated as hedging instruments | Embedded derivative - IUL | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(96)	1,538	1,795	(834)
Successor | Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(22,820)	109,131	141,322	(81,175)
Notional Amount, Other long-term investments		64,201			64,201	64,593
Fair Value, Other long-term investments		1,850			1,850	1,215
Notional Amount, Other liabilities		2,457,293			2,457,293	2,473,427
Fair Value, Other Liabilities		239,350			239,350	178,362
Successor | Derivatives not designated as hedging instruments | Derivatives with PLC
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		13,681	(3,684)	(3,119)	17,711
Notional Amount, Other long-term investments		2,869,315			2,869,315	1,619,200
Fair Value, Other long-term investments		37,300			37,300	18,161
Successor | Derivatives not designated as hedging instruments | Other derivatives
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross		(55)	$ 11	$ 83	(100)
Notional Amount, Other long-term investments		298			298	242
Fair Value, Other long-term investments		249			249	347
Successor | Derivatives not designated as hedging instruments | Interest rate futures
Notional amount and fair value of the entity's derivative financial instruments
Notional Amount, Other long-term investments		1,155,001			1,155,001	282,373
Fair Value, Other long-term investments		35,366			35,366	1,537
Notional Amount, Other liabilities		0			0	793,763
Fair Value, Other Liabilities		$ 0			$ 0	$ 1,539
Predecessor
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	$ 22,031
Predecessor | Derivatives not designated as hedging instruments
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	22,031
Predecessor | Derivatives not designated as hedging instruments | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	75,861
Predecessor | Derivatives not designated as hedging instruments | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(1,032)
Predecessor | Derivatives not designated as hedging instruments | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(598)
Predecessor | Derivatives not designated as hedging instruments | Interest rate futures | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	1,413
Predecessor | Derivatives not designated as hedging instruments | Equity futures | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	9,221
Predecessor | Derivatives not designated as hedging instruments | Equity futures | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(184)
Predecessor | Derivatives not designated as hedging instruments | Equity futures | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	3
Predecessor | Derivatives not designated as hedging instruments | Currency futures | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	7,778
Predecessor | Derivatives not designated as hedging instruments | Volatility futures | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	0
Predecessor | Derivatives not designated as hedging instruments | Equity options | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	3,047
Predecessor | Derivatives not designated as hedging instruments | Equity options | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(2,617)
Predecessor | Derivatives not designated as hedging instruments | Equity options | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(115)
Predecessor | Derivatives not designated as hedging instruments | Interest rate swaptions | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	9,268
Predecessor | Derivatives not designated as hedging instruments | Interest rate swaps | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	122,710
Predecessor | Derivatives not designated as hedging instruments | Embedded derivative - GMWB | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(68,503)
Predecessor | Derivatives not designated as hedging instruments | Funds withheld derivative | Annuity account
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(9,073)
Predecessor | Derivatives not designated as hedging instruments | Embedded derivative - FIA | FIA
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	1,769
Predecessor | Derivatives not designated as hedging instruments | Embedded derivative - IUL | IUL
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(486)
Predecessor | Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	(68,026)
Predecessor | Derivatives not designated as hedging instruments | Derivatives with PLC
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	15,863
Predecessor | Derivatives not designated as hedging instruments | Other derivatives
Notional amount and fair value of the entity's derivative financial instruments
Realized investment gains (losses) - derivatives, gross	$ (37)

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DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains and Losses for the Modco Trading Portfolio that is Included in Realized Investment Gains (Losses) - All Other Investments (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Realized investment gains (losses) - all other investments
Modco trading portfolio		$ 76,201	$ (108,741)	$ (141,901)	$ 154,355
Predecessor
Realized investment gains (losses) - all other investments
Modco trading portfolio	$ 73,062

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DERIVATIVE FINANCIAL INSTRUMENTS - Components of the Gain or Loss on Derivatives that Quality as a Cash Flow Hedging Relationship (Details) - Cash flow hedges - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	5 Months Ended
	Jan. 31, 2015	Jun. 30, 2015	Jun. 30, 2015
Successor
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion)		$ (95)	$ (131)
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion)		(41)	(131)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion)		77	73
Successor | Inflation
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion)		(95)	(131)
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion)		(41)	(131)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion)		$ 77	$ 73
Predecessor
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion)	$ 13
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion)	(36)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion)	(7)
Predecessor | Inflation
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion)	13
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion)	(36)
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion)	$ (7)

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OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Assets (Details) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting of Derivative Assets
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets	$ 640,539	$ 323,570
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	640,539	323,570
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	336,163	105,842
Net Amount	238,029	175,346
Total derivatives, subject to a master netting arrangement or similar arrangement
Offsetting of Derivative Assets
Derivatives Subject to Master Netting Arrangement, Gross Amounts of Recognized Assets	577,370	254,840
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	577,370	254,840
Derivatives Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	336,163	105,842
Net Amount	174,860	106,616
Free-Standing derivatives
Offsetting of Derivative Assets
Derivatives Subject to Master Netting Arrangement, Gross Amounts of Recognized Assets	577,370	254,840
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	577,370	254,840
Derivatives Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	336,163	105,842
Net Amount	174,860	106,616
Total derivatives, not subject to a master netting arrangement or similar arrangement
Offsetting of Derivative Assets
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets	63,169	68,730
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	63,169	68,730
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	0	0
Net Amount	63,169	68,730
Embedded derivative - Modco reinsurance treaties
Offsetting of Derivative Assets
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets	1,850	1,215
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	1,850	1,215
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	0	0
Net Amount	1,850	1,215
Embedded derivative - GMWB
Offsetting of Derivative Assets
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets	23,770	49,007
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	23,770	49,007
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	0	0
Net Amount	23,770	49,007
Derivatives with PLC
Offsetting of Derivative Assets
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets	37,300	18,161
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	37,300	18,161
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	0	0
Net Amount	37,300	18,161
Other
Offsetting of Derivative Assets
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets	249	347
Gross Amounts Offset in the Settlement of Financial Position	0	0
Net Amounts of Assets Presented in the Statement of Financial Position	249	347
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	0	0
Net Amount	$ 249	$ 347

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OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Liabilities (Details) - Successor - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	$ 783,551	$ 522,225
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	783,551	522,225
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	6,685	1,617
Net Amount	710,519	478,226
Repurchase agreements
Gross Amounts of Recognized Liabilities	160,000	438,185
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	160,000	438,185
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	160,000	438,185
Total Liabilities
Gross Amounts of Recognized Liabilities	943,551	960,410
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	943,551	960,410
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	6,685	1,617
Net Amount	870,519	916,411
Total derivatives, subject to a master netting arrangement or similar arrangement
Offsetting of Derivative Liabilities:
Fair Value, Other Liabilities	73,032	43,999
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	73,032	43,999
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	6,685	1,617
Net Amount	0	0
Free-Standing derivatives
Offsetting of Derivative Liabilities:
Fair Value, Other Liabilities	73,032	43,999
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	73,032	43,999
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	66,347	42,382
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	6,685	1,617
Net Amount	0	0
Total derivatives, not subject to a master netting arrangement or similar arrangement
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	710,519	478,226
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	710,519	478,226
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	710,519	478,226
Embedded derivative - Modco reinsurance treaties
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	239,350	178,362
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	239,350	178,362
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	239,350	178,362
Funds withheld derivative
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	129,473	102,378
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	129,473	102,378
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	129,473	102,378
Embedded derivative - GMWB
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	174,988	67,528
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	174,988	67,528
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	174,988	67,528
Embedded derivative - FIA
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	119,997	100,329
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	119,997	100,329
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	119,997	100,329
Embedded derivative - IUL
Offsetting of Derivative Liabilities:
Gross Amounts of Recognized Liabilities	46,711	29,629
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statement of Financial Position	46,711	29,629
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid	0	0
Net Amount	$ 46,711	$ 29,629

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MORTGAGE LOANS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Mortgage loans
Period for exercise of call options or interest rate reset options	12 years
Successor
Mortgage loans
Mortgage loan holdings	$ 5,748,675	$ 5,662,812
Amount that would become due in remainder of 2016, if loans are called at their next call dates	42,700
Amount that would become due in 2017 through 2021, if loans are called at their next call dates	922,100
Amount that would become due in 2022 through 2026, if loans are called at their next call dates	238,100
Amount that would become due after 2026, if loans are called at their next call dates	$ 11,100

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MORTGAGE LOANS (Details 2) - Commercial mortgage loans	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) category	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Mortgage loans
Number of loan categories | category					2
Maximum
Mortgage loans
Loan-to-value ratio with participating interest (as a percent)						85.00%
Successor
Mortgage loans
Mortgage loans having participation feature						$ 522,800,000	$ 449,200,000
Income recognized on participating mortgage loans		$ 5,700,000	$ 3,300,000	$ 5,100,000	$ 12,500,000
Nonperforming mortgage loans, foreclosed properties and restructured loans to invested assets						1,000,000
Financing receivable not subject to pooling and servicing agreement, non performing or restructured amount						$ 1,000,000
Loans subject to a pooling and servicing agreement which are either nonperforming or restructured						0
Allowance for mortgage loan credit losses	$ 0	3,850,000	0	0	0	$ 3,850,000	$ 0
Change in the allowance for credit losses
Beginning balance				0	0
Charge offs				(2,561,000)	0
Recoveries				(638,000)	0
Provision				3,199,000	3,850,000
Ending balance	0	$ 3,850,000	$ 0	0	$ 3,850,000
Predecessor
Mortgage loans
Income recognized on participating mortgage loans	100,000
Allowance for mortgage loan credit losses	5,720,000			2,500,000
Change in the allowance for credit losses
Beginning balance	5,720,000			$ 2,500,000
Charge offs	(861,000)
Recoveries	(2,359,000)
Provision	0
Ending balance	$ 2,500,000

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MORTGAGE LOANS (Details 3) - Commercial mortgage loans $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016 USD ($) loan	Dec. 31, 2015 USD ($) loan
Delinquent loans
Past due period at which to cease carrying accrued interest on delinquent loans	90 days
Past due period at which to initiate foreclosure proceedings	90 days
Successor
Delinquent loans
Commercial mortgage loans | $	$ 10,201	$ 7,035
Number of delinquent commercial mortgage loans | loan	4	7
Successor | 30-59 Days Delinquent
Delinquent loans
Commercial mortgage loans | $	$ 9,167	$ 6,002
Number of delinquent commercial mortgage loans | loan	3	6
Successor | 60 to 89 Days Delinquent
Delinquent loans
Commercial mortgage loans | $	$ 0	$ 1,033
Number of delinquent commercial mortgage loans | loan	0	1
Successor | Greater than 90 Days Delinquent
Delinquent loans
Commercial mortgage loans | $	$ 1,034	$ 0
Number of delinquent commercial mortgage loans | loan	1	0

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MORTGAGE LOANS (Details 4) - Commercial mortgage loans - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Commercial mortgage loans:
Maximum number of days accrued interest on impaired loans	90 days
Successor
Recorded Investment
With no related allowance recorded	$ 1,034	$ 1,694
With an allowance recorded	12,313	0
Unpaid Principal Balance
With no related allowance recorded	1,067	1,728
With an allowance recorded	12,301	0
Related Allowance
With an allowance recorded	3,850	0
Average Recorded Investment
With no related allowance recorded	1,034	847
With an allowance recorded	6,156	0
Interest Income Recognized
With no related allowance recorded	0	104
With an allowance recorded	190	0
Cash Basis Interest Income
With no related allowance recorded	0	117
With an allowance recorded	$ 199	$ 0

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GOODWILL (Details) - USD ($)	6 Months Ended	11 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Feb. 01, 2015
Changes in the carrying amount of goodwill
Goodwill			$ 735,700,000
Successor
Changes in the carrying amount of goodwill
Goodwill	$ 732,443,000	$ 732,443,000	$ 735,700,000
Decrease to goodwill	0
Goodwill impairment	$ 0
Successor | Life Marketing
Changes in the carrying amount of goodwill
Decrease to goodwill		$ 3,300,000

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DEBT AND OTHER OBLIGATIONS - Debt and Subordinated Debt Securities (Details) - USD ($) $ in Millions			6 Months Ended
	Feb. 03, 2015	Feb. 02, 2015	Jun. 30, 2016
2015 Credit Facility
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity		$ 1,000.0
Line of credit, maximum borrowing capacity to be granted upon entity's request		$ 1,250.0
Base of floating rate interest payments		LIBOR
Facility fee percentage	0.125%	0.15%
2015 Credit Facility | Prime rate
Debt Instrument [Line Items]
Base of floating rate interest payments		prime rate
2015 Credit Facility | Federal funds rate
Debt Instrument [Line Items]
Base of floating rate interest payments		Federal Funds rate
Interest rate added to the base rate (as a percent)		0.50%
2015 Credit Facility | LIBOR One-Month Rate
Debt Instrument [Line Items]
Base of floating rate interest payments		one-month LIBOR
Interest rate added to the base rate (as a percent)		1.00%
Successor | Letter of Credit
Debt Instrument [Line Items]
Outstanding letters of credit (LOC)			$ 30.0
Successor | PLC | 2015 Credit Facility
Debt Instrument [Line Items]
Base of floating rate interest payments			LIBOR
Interest rate added to the base rate (as a percent)			1.00%
Line of credit, amount outstanding			$ 360.0

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DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations (Details)			1 Months Ended	5 Months Ended	6 Months Ended
	Jan. 15, 2016 USD ($)	Oct. 10, 2012 USD ($)	Jan. 31, 2015 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($) reinsurer
Debt Instrument [Line Items]
Non-recourse funding obligation, carrying value	$ 1,150,000,000
Financing Arrangement with Golden Gate and Syndicate if Risk Takers
Debt Instrument [Line Items]
Term of financing agreement	18 years
Financing capacity under the arrangement	$ 2,188,000,000.000
Golden Gate | Non-recourse Funding Obligations Series
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations	800,000,000
Golden Gate | Surplus Notes | Steel City Notes
Debt Instrument [Line Items]
Amount of debt issued	2,188,000,000.000
Steel City | Surplus Notes | Golden Gate Surplus Notes
Debt Instrument [Line Items]
Amount of debt issued	$ 2,188,000,000.000
Golden Gate V and Red Mountain
Debt Instrument [Line Items]
Transaction period of financing for reserves related to a block of universal life insurance policies with secondary guarantees		20 years
Maximum amount to be financed for reserves related to a block of universal life insurance policies with secondary guarantees		$ 945,000,000
Red Mountain
Debt Instrument [Line Items]
Maximum amount to be financed for reserves related to a block of universal life insurance policies with secondary guarantees		945,000,000
Initial principal amount of note for deposit to a reinsurance trust		$ 275,000,000
Successor
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations repurchased at a discount				$ (35,000,000)	$ (2,176,700,000)
Non-recourse funding obligations					2,981,271,000	$ 1,951,563,000
Successor | Golden Gate
Debt Instrument [Line Items]
Payments made under the agreements					0
Successor | Golden Gate | Steel City Notes
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations					$ 2,153,000,000
Fixed interest rate (as a percent)					4.75%
Successor | Golden Gate | Non-recourse Funding Obligations Series
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations						800,000,000
Successor | Golden Gate | Series A1 Non-recourse Funding Obligation
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations						$ 400,000,000
Fixed interest rate (as a percent)						7.375%
Successor | Golden Gate | Series A2 Non-recourse Funding Obligation
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations						$ 100,000,000
Fixed interest rate (as a percent)						8.00%
Successor | Golden Gate | Series A3 Non-recourse Funding Obligation
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations						$ 300,000,000
Fixed interest rate (as a percent)						8.45%
Successor | Golden Gate | Surplus Notes | Steel City Notes
Debt Instrument [Line Items]
Long-term Debt					$ 2,153,000,000
Successor | Golden Gate Captive Insurance Company
Debt Instrument [Line Items]
Non-recourse funding obligations					$ 2,153,000,000
Non-recourse funding obligation, year-to-date weighted-average interest rate					4.75%
Successor | Golden Gate Captive Insurance Company | Non Recourse Funding Obligations
Debt Instrument [Line Items]
Number of series of non-recourse funding obligations | reinsurer						3
Successor | Golden Gate I I
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations					$ 575,000,000
Non-recourse funding obligations held by external parties					133,600,000
Non-recourse funding obligations held by nonconsolidated affiliates					145,300,000
Non-recourse funding obligations held by consolidated subsidiaries of the Company					296,100,000
Payments made under the agreements					0
Amount of collateralized support agreement obligations by PLC					1,500,000
Outstanding non-recourse funding obligations repurchased at a discount				$ 0	11,300,000
Non-recourse funding obligations					$ 226,912,000
Non-recourse funding obligation, year-to-date weighted-average interest rate					1.29%
Successor | Golden Gate V and Red Mountain
Debt Instrument [Line Items]
Payments made under the agreements					$ 0
Successor | Red Mountain
Debt Instrument [Line Items]
Initial principal amount of note for deposit to a reinsurance trust					535,000,000
Future scheduled capital contributions to prefund credit enhancements fees amount					134,200,000
Successor | Golden Gate V
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations					$ 535,000,000
Fixed interest rate (as a percent)					6.25%
Maximum amount to be financed for reserves related to a block of universal life insurance policies with secondary guarantees					$ 945,000,000
Non-recourse funding obligations					$ 598,863,000
Non-recourse funding obligation, year-to-date weighted-average interest rate					5.12%
Successor | MONY
Debt Instrument [Line Items]
Non-recourse funding obligations					$ 2,496,000
Non-recourse funding obligation, year-to-date weighted-average interest rate					6.19%
Predecessor
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations repurchased at a discount			$ 0
Predecessor | Golden Gate I I
Debt Instrument [Line Items]
Outstanding non-recourse funding obligations repurchased at a discount			$ 0

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DEBT AND OTHER OBLIGATIONS - Letters of Credit (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($) installment	Jun. 25, 2014 USD ($)	Aug. 07, 2013 USD ($)	Dec. 10, 2010 USD ($)	Apr. 23, 2010 USD ($)
Golden Gate III
Debt Instrument [Line Items]
Maximum LOC borrowing capacity		$ 915.0	$ 710.0		$ 505.0
Maximum stated amount up to which LOC may be increased		$ 935.0	$ 720.0		$ 610.0
Letter of credit term	15 years
Future scheduled capital contributions to prefund credit enhancements fees amount	$ 122.5
Number of installments for payment of capital contributions amount | installment	3
Golden Gate IV
Debt Instrument [Line Items]
Maximum LOC borrowing capacity				$ 270.0
Letter of credit term	12 years
Successor | Golden Gate III
Debt Instrument [Line Items]
Outstanding letters of credit (LOC)	$ 935.0
Successor | Golden Gate IV
Debt Instrument [Line Items]
Maximum LOC borrowing capacity	790.0
Payments made under the agreements	$ 0.0

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DEBT AND OTHER OBLIGATIONS - Repurchase Program Borrowings (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended	11 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Dec. 31, 2015
Maximum | Repurchase Program Borrowings
Debt Instrument [Line Items]
Term of financing agreement		90 days
Successor
Debt Instrument [Line Items]
Repurchase program borrowings		$ 160,000	$ 438,185
Successor | Repurchase Program Borrowings
Debt Instrument [Line Items]
Fair value of securities pledged under the repurchase program		177,500	479,900
Repurchase program borrowings		$ 160,000	438,200
Average borrowing rate (as a percent)		0.42%
Maximum outstanding balance		$ 725,000	912,700
Average daily balance		$ 464,500	$ 540,300
Average borrowing rate (as a percent)		0.40%	0.20%
Predecessor | Repurchase Program Borrowings
Debt Instrument [Line Items]
Average daily balance	$ 77,400
Average borrowing rate (as a percent)	0.16%

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DEBT AND OTHER OBLIGATIONS - Amount of Collateral Pledged for Repurchase Agreements, Grouped by Asset Class (Details) - Successor $ in Thousands	Jun. 30, 2016 USD ($)
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	$ 177,463
Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	177,463
Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
U.S. Treasury and agency securities
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
U.S. Treasury and agency securities | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
U.S. Treasury and agency securities | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
U.S. Treasury and agency securities | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
U.S. Treasury and agency securities | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
State and municipal securities
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
State and municipal securities | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
State and municipal securities | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
State and municipal securities | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
State and municipal securities | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Other asset-backed securities
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Other asset-backed securities | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Other asset-backed securities | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Other asset-backed securities | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Other asset-backed securities | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Corporate securities
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Corporate securities | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Corporate securities | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Corporate securities | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Corporate securities | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Equity securities
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Equity securities | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Equity securities | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Equity securities | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Equity securities | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Non-U.S. sovereign debt
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Non-U.S. sovereign debt | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Non-U.S. sovereign debt | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Non-U.S. sovereign debt | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Non-U.S. sovereign debt | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Mortgage loans
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	177,463
Mortgage loans | Overnight and Continuous
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	177,463
Mortgage loans | Up to 30 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Mortgage loans | 30-90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	0
Mortgage loans | Greater Than 90 days
Debt Instrument [Line Items]
Collateral pledged for repurchase agreements	$ 0

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COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Jun. 30, 2016 USD ($)
Commitment and contingency
Estimated tax refund	$ 6.2
Targeted multi-state examination
Commitment and contingency
Administrative and/or examination fees which the insurance regulators could demand, minimum	0.0
Administrative and/or examination fees which the insurance regulators could demand, maximum	$ 4.5

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EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Defined Benefit Pension Plan | Minimum
EMPLOYEE BENEFIT PLANS
Adjusted funding target percentage to be maintained					80.00%
Successor | Defined Benefit Pension Plan
EMPLOYEE BENEFIT PLANS
Service cost — benefits earned during the period		$ 2,906	$ 2,973	$ 4,955	$ 5,812
Interest cost on projected benefit obligation		2,737	2,433	4,055	5,474
Expected return on plan assets		(3,605)	(3,642)	(6,070)	(7,211)
Amortization of prior service cost		0	0	0	0
Amortization of actuarial losses		0	0	0	0
Preliminary net periodic benefit cost		2,038	1,764	2,940	4,075
Settlement/curtailment expense		0	0	0	0
Total net periodic benefit costs		2,038	1,764	2,940	4,075
Successor | Excess Benefit Plan
EMPLOYEE BENEFIT PLANS
Service cost — benefits earned during the period		313	333	555	625
Interest cost on projected benefit obligation		438	408	680	877
Expected return on plan assets		0	0	0	0
Amortization of prior service cost		0	0	0	0
Amortization of actuarial losses		0	0	0	0
Preliminary net periodic benefit cost		751	741	1,235	1,502
Settlement/curtailment expense		1,500	0	0	1,500
Total net periodic benefit costs		$ 2,251	$ 741	$ 1,235	$ 3,002
Predecessor | Defined Benefit Pension Plan
EMPLOYEE BENEFIT PLANS
Service cost — benefits earned during the period	$ 974
Interest cost on projected benefit obligation	1,002
Expected return on plan assets	(1,293)
Amortization of prior service cost	(33)
Amortization of actuarial losses	668
Preliminary net periodic benefit cost	1,318
Settlement/curtailment expense	0
Total net periodic benefit costs	1,318
Predecessor | Excess Benefit Plan
EMPLOYEE BENEFIT PLANS
Service cost — benefits earned during the period	95
Interest cost on projected benefit obligation	140
Expected return on plan assets	0
Amortization of prior service cost	1
Amortization of actuarial losses	138
Preliminary net periodic benefit cost	374
Settlement/curtailment expense	0
Total net periodic benefit costs	$ 374

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended	11 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Successor
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance				$ 0	$ (1,246,391)	$ 0
Other comprehensive income (loss) before reclassifications					1,017,335	(1,263,453)
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings		$ (2,866)	$ (4,566)	(4,566)	(2,572)	(393)
Amounts reclassified from accumulated other comprehensive income (loss)					(12,274)	17,455
Net current-period other comprehensive income (loss)					1,002,489	(1,246,391)
Ending Balance	$ 0	(243,902)			(243,902)	(1,246,391)
Successor | Unrealized Gains and Losses on Investments
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance				0	(1,246,391)	0
Other comprehensive income (loss) before reclassifications					1,017,335	(1,263,367)
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings					(2,572)	(393)
Amounts reclassified from accumulated other comprehensive income (loss)					(12,274)	17,369
Net current-period other comprehensive income (loss)					1,002,489	(1,246,391)
Ending Balance	0	(243,902)			(243,902)	(1,246,391)
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income					139,300	623,000
Successor | Accumulated Gain and Loss Derivatives
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance				0	0	0
Other comprehensive income (loss) before reclassifications					0	(86)
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings					0	0
Amounts reclassified from accumulated other comprehensive income (loss)					0	86
Net current-period other comprehensive income (loss)					0	0
Ending Balance	0	$ 0			$ 0	0
Predecessor
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance	1,483,211			1,960,977		1,960,977
Other comprehensive income (loss) before reclassifications	482,152
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(243)
Amounts reclassified from accumulated other comprehensive income (loss)	(4,143)
Net current-period other comprehensive income (loss)	477,766
Ending Balance	1,960,977
Predecessor | Unrealized Gains and Losses on Investments
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance	1,483,293			1,961,027		1,961,027
Other comprehensive income (loss) before reclassifications	482,143
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	(243)
Amounts reclassified from accumulated other comprehensive income (loss)	(4,166)
Net current-period other comprehensive income (loss)	477,734
Ending Balance	1,961,027
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income	(492,600)
Predecessor | Accumulated Gain and Loss Derivatives
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance	(82)			$ (50)		$ (50)
Other comprehensive income (loss) before reclassifications	9
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings	0
Amounts reclassified from accumulated other comprehensive income (loss)	23
Net current-period other comprehensive income (loss)	32
Ending Balance	$ (50)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016
Successor
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Benefits and settlement expenses, net of reinsurance ceded		$ (712,647)	$ (693,392)	$ (1,178,816)	$ (1,425,668)
Realized investment gains (losses): All other investments		88,783	(102,347)	(137,403)	170,492
Net impairment losses recognized in earnings		(967)	(5,734)	(5,734)	(3,584)
Income (loss) before income tax		260,580	(35,567)	(11,031)	495,559
Tax (expense) or benefit		(87,787)	9,991	1,875	(164,149)
Net income (loss)		172,793	(25,576)	(9,156)	331,410
Successor | Gains and losses on derivative instruments | Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Benefits and settlement expenses, net of reinsurance ceded			(41)	(131)
Income (loss) before income tax			(41)	(131)
Tax (expense) or benefit			14	45
Net income (loss)			(27)	(86)
Successor | Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Realized investment gains (losses): All other investments		16,932	3,350	3,723	22,468
Net impairment losses recognized in earnings		(967)	(5,734)	(5,734)	(3,584)
Income (loss) before income tax		15,965	(2,384)	(2,011)	18,884
Tax (expense) or benefit		(5,588)	834	703	(6,610)
Net income (loss)		$ 10,377	$ (1,550)	$ (1,308)	$ 12,274
Predecessor
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Benefits and settlement expenses, net of reinsurance ceded	$ (266,575)
Realized investment gains (losses): All other investments	81,153
Net impairment losses recognized in earnings	(481)
Income (loss) before income tax	132,847
Tax (expense) or benefit	(44,325)
Net income (loss)	88,522
Predecessor | Gains and losses on derivative instruments | Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Benefits and settlement expenses, net of reinsurance ceded	(36)
Income (loss) before income tax	(36)
Tax (expense) or benefit	13
Net income (loss)	(23)
Predecessor | Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Realized investment gains (losses): All other investments	6,891
Net impairment losses recognized in earnings	(481)
Income (loss) before income tax	6,410
Tax (expense) or benefit	(2,244)
Net income (loss)	$ 4,166

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INCOME TAXES (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended	11 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Reductions of tax positions of prior years:
Decrease in unrecognized tax benefits is reasonably possible		$ 500			$ 500
Successor
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance, beginning of period				$ 105,850	8,937	$ 105,850
Additions for tax positions of the current year					1,218	2,213
Additions for tax positions of prior years					0	1,812
Reductions of tax positions of prior years:
Changes in judgment					0	(644)
Settlements during the period					(710)	(100,294)
Lapses of applicable statute of limitations					0	0
Balance, end of period	$ 105,850	$ 9,445			$ 9,445	8,937
Effective income tax rate (as a percent)		33.70%	28.10%	17.00%	33.10%
Predecessor
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance, beginning of period	168,076			$ 105,850		$ 105,850
Additions for tax positions of the current year	(5,010)
Additions for tax positions of prior years	1,149
Reductions of tax positions of prior years:
Changes in judgment	(58,365)
Settlements during the period	0
Lapses of applicable statute of limitations	0
Balance, end of period	$ 105,850
Effective income tax rate (as a percent)	32.80%

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OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Feb. 01, 2015
Operating Segment Assets
Goodwill							$ 735,700
Successor
Summarized financial information for the company's segments
Revenues		$ 1,174,842	$ 862,953	$ 1,503,914	$ 2,334,744
Segment Operating Income (Loss)		106,934	61,916	129,441	217,951
Realized investment gains (losses) - investments		100,889	(115,716)	(158,649)	184,031
Realized investment gains (losses) - derivatives		52,757	18,233	18,177	93,577
Income tax (expense) benefit		(87,787)	9,991	1,875	(164,149)
Net income (loss)		172,793	(25,576)	(9,156)	331,410
Realized gain (losses) on investments
All other investment gains (losses)		87,816	(108,081)	(143,137)	166,908
Less: amortization related to DAC/VOBA and benefits and settlement expenses		(13,073)	7,635	15,512	(17,123)
Realized investment gains (losses) - investments		100,889	(115,716)	(158,649)	184,031
Realized gain (losses) on derivatives
Derivative financial instruments gains (losses)		43,548	10,566	5,618	75,456
Less: VA GMWB economic cost		(9,209)	(7,667)	(12,559)	(18,121)
Realized investment gains (losses) - derivatives		52,757	18,233	18,177	93,577
Other-than-temporary impairments		967	5,734	5,734	3,584
Operating Segment Assets
Investments and other assets		71,122,295			71,122,295	$ 65,091,991
Deferred policy acquisition costs and value of business acquired		1,895,166			1,895,166	1,562,373
Other intangibles		624,475			624,475	645,131
Goodwill		732,443			732,443	732,443	$ 735,700
Total assets		74,374,379			74,374,379	68,031,938
Successor | Operating | Life Marketing
Summarized financial information for the company's segments
Revenues		384,823	347,691	602,613	765,897
Segment Operating Income (Loss)		25,098	5,672	9,953	38,224
Operating Segment Assets
Investments and other assets		13,916,859			13,916,859	13,258,639
Deferred policy acquisition costs and value of business acquired		1,134,643			1,134,643	1,119,515
Other intangibles		310,141			310,141	319,623
Goodwill		200,274			200,274	200,274
Total assets		15,561,917			15,561,917	14,898,051
Successor | Operating | Acquisitions
Summarized financial information for the company's segments
Revenues		453,848	363,985	622,774	878,655
Segment Operating Income (Loss)		45,285	37,876	73,946	113,938
Operating Segment Assets
Investments and other assets		20,052,484			20,052,484	19,879,988
Deferred policy acquisition costs and value of business acquired		93,983			93,983	(178,662)
Other intangibles		38,380			38,380	39,658
Goodwill		14,524			14,524	14,524
Total assets		20,199,371			20,199,371	19,755,508
Successor | Operating | Annuities
Summarized financial information for the company's segments
Revenues		188,597	43,468	92,812	407,113
Segment Operating Income (Loss)		47,480	40,513	71,886	92,756
Operating Segment Assets
Investments and other assets		19,873,357			19,873,357	19,715,901
Deferred policy acquisition costs and value of business acquired		625,628			625,628	578,742
Other intangibles		190,116			190,116	196,780
Goodwill		336,677			336,677	336,677
Total assets		21,025,778			21,025,778	20,828,100
Successor | Operating | Stable Value Products
Summarized financial information for the company's segments
Revenues		26,237	16,656	26,998	56,139
Segment Operating Income (Loss)		15,178	9,349	15,464	29,626
Operating Segment Assets
Investments and other assets		2,711,452			2,711,452	2,006,263
Deferred policy acquisition costs and value of business acquired		4,353			4,353	2,357
Other intangibles		9,056			9,056	9,389
Goodwill		113,813			113,813	113,813
Total assets		2,838,674			2,838,674	2,131,822
Successor | Operating | Asset Protection
Summarized financial information for the company's segments
Revenues		76,419	77,625	126,921	150,098
Segment Operating Income (Loss)		4,141	4,880	8,523	8,397
Operating Segment Assets
Investments and other assets		812,678			812,678	766,294
Deferred policy acquisition costs and value of business acquired		36,559			36,559	40,421
Other intangibles		76,782			76,782	79,681
Goodwill		67,155			67,155	67,155
Total assets		993,174			993,174	953,551
Successor | Operating | Corporate and Other
Summarized financial information for the company's segments
Revenues		44,918	13,528	31,796	76,842
Segment Operating Income (Loss)		(30,248)	$ (36,374)	$ (50,331)	(64,990)
Operating Segment Assets
Investments and other assets		13,755,465			13,755,465	9,464,906
Deferred policy acquisition costs and value of business acquired		0			0	0
Other intangibles		0			0	0
Goodwill		0			0	0
Total assets		$ 13,755,465			$ 13,755,465	$ 9,464,906
Predecessor
Summarized financial information for the company's segments
Revenues	$ 459,646
Segment Operating Income (Loss)	19,000
Realized investment gains (losses) - investments	89,414
Realized investment gains (losses) - derivatives	24,433
Income tax (expense) benefit	(44,325)
Net income (loss)	88,522
Realized gain (losses) on investments
All other investment gains (losses)	80,672
Less: amortization related to DAC/VOBA and benefits and settlement expenses	(8,742)
Realized investment gains (losses) - investments	89,414
Realized gain (losses) on derivatives
Derivative financial instruments gains (losses)	22,031
Less: VA GMWB economic cost	(2,402)
Realized investment gains (losses) - derivatives	24,433
Other-than-temporary impairments	481
Predecessor | Operating | Life Marketing
Summarized financial information for the company's segments
Revenues	133,361
Segment Operating Income (Loss)	(2,271)
Predecessor | Operating | Acquisitions
Summarized financial information for the company's segments
Revenues	139,761
Segment Operating Income (Loss)	20,134
Predecessor | Operating | Annuities
Summarized financial information for the company's segments
Revenues	130,918
Segment Operating Income (Loss)	11,363
Predecessor | Operating | Stable Value Products
Summarized financial information for the company's segments
Revenues	8,181
Segment Operating Income (Loss)	4,529
Predecessor | Operating | Asset Protection
Summarized financial information for the company's segments
Revenues	24,566
Segment Operating Income (Loss)	1,907
Predecessor | Operating | Corporate and Other
Summarized financial information for the company's segments
Revenues	22,859
Segment Operating Income (Loss)	$ (16,662)