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 11, Debt and Other Obligations for details of the Company’s repurchase agreement programs.

Collateral received includes both cash and non-cash collateral. Cash collateral received by the Company is recorded on the consolidated condensed balance sheet as “cash”, with a corresponding amount recorded in “other liabilities” to represent the Company’s obligation to return the collateral. Non-cash collateral received by the Company is not recognized on the consolidated condensed balance sheet unless the company exercises its right to sell or re-pledge the underlying asset. As of September 30, 2018, the fair value of non-cash collateral received was $8.2 million. As of December 31, 2017, the Company had not received any non-cash collateral.

The tables below present the derivative instruments by assets and liabilities for the Company as of September 30, 2018.



	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position				Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	454,899	$	—	$	454,899	$	270,878	$	68,809	$	115,212
Total derivatives, subject to a master netting arrangement or similar arrangement	454,899		—		454,899		270,878		68,809		115,212
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	2,650		—		2,650		—		—		2,650
Embedded derivative - GLWB	87,043		—		87,043		—		—		87,043
Derivatives with PLC	90,885		—		90,885		—		—		90,885
Other	141		—		141		—		—		141
Total derivatives, not subject to a master netting arrangement or similar arrangement	180,719		—		180,719		—		—		180,719
Total derivatives	635,618		—		635,618		270,878		68,809		295,931
Total Assets	$	635,618	$	—	$	635,618	$	270,878	$	68,809	$	295,931



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position				Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	280,967	$	—	$	280,967	$	270,878	$	10,089	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	280,967		—		280,967		270,878		10,089		—
Derivatives, not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	60,683		—		60,683		—		—		60,683
Funds withheld derivative	60,432		—		60,432		—		—		60,432
Embedded derivative - GLWB	46,995		—		46,995		—		—		46,995
Embedded derivative - FIA	256,912		—		256,912		—		—		256,912
Embedded derivative - IUL	95,739		—		95,739		—		—		95,739
Other	44		—		44		—		—		44
Total derivatives, not subject to a master netting arrangement or similar arrangement	520,805		—		520,805		—		—		520,805
Total derivatives	801,772		—		801,772		270,878		10,089		520,805
Repurchase agreements⁽¹⁾	417,094		—		417,094		—		—		417,094
Total Liabilities	$	1,218,866	$	—	$	1,218,866	$	270,878	$	10,089	$	937,899

(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, 2017.



	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position				Financial Instruments		Collateral Received		Net Amount
	(Dollars In Thousands)
Offsetting of Assets
Derivatives:
Free-Standing derivatives	$	468,871	$	—	$	468,871	$	242,105	$	108,830	$	117,936
Total derivatives, subject to a master netting arrangement or similar arrangement	468,871		—		468,871		242,105		108,830		117,936
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,009		—		1,009		—		—		1,009
Embedded derivative - GLWB	67,879		—		67,879		—		—		67,879
Derivatives with PLC	91,578		—		91,578		—		—		91,578
Other	200		—		200		—		—		200
Total derivatives, not subject to a master netting arrangement or similar arrangement	160,666		—		160,666		—		—		160,666
Total derivatives	629,537		—		629,537		242,105		108,830		278,602
Total Assets	$	629,537	$	—	$	629,537	$	242,105	$	108,830	$	278,602



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position				Financial Instruments		Collateral Posted		Net Amount
	(Dollars In Thousands)
Offsetting of Liabilities
Derivatives:
Free-Standing derivatives	$	246,682	$	—	$	246,682	$	242,105	$	4,577	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	246,682		—		246,682		242,105		4,577		—
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	215,247		—		215,247		—		—		215,247
Funds withheld derivative	61,729		—		61,729		—		—		61,729
Embedded derivative - GLWB	83,427		—		83,427		—		—		83,427
Embedded derivative - FIA	218,676		—		218,676		—		—		218,676
Embedded derivative - IUL	80,212		—		80,212		—		—		80,212
Total derivatives, not subject to a master netting arrangement or similar arrangement	659,291		—		659,291		—		—		659,291
Total derivatives	905,973		—		905,973		242,105		4,577		659,291
Repurchase agreements⁽¹⁾	885,000		—		885,000		—		—		885,000
Total Liabilities	$	1,790,973	$	—	$	1,790,973	$	242,105	$	4,577	$	1,544,291

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