FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2019

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 September 30, 2019:

	Measurement Category	Level 1		Level 2		Level 3		Total
		(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	4	$	—	$	5,340,664	$	—	$	5,340,664
Commercial mortgage-backed securities	4	—		2,704,831		9,635		2,714,466
Other asset-backed securities	4	—		1,482,414		416,062		1,898,476
U.S. government-related securities	4	801,931		360,276		—		1,162,207
State, municipals, and political subdivisions	4	—		4,834,657		—		4,834,657
Other government-related securities	4	—		603,236		—		603,236
Corporate securities	4	—		45,960,493		1,325,112		47,285,605
Redeemable preferred stocks	4	70,627		16,935		—		87,562
Total fixed maturity securities - available-for-sale		872,558		61,303,506		1,750,809		63,926,873
Fixed maturity securities - trading
Residential mortgage-backed securities	3	—		202,963		—		202,963
Commercial mortgage-backed securities	3	—		208,935		—		208,935
Other asset-backed securities	3	—		76,205		61,527		137,732
U.S. government-related securities	3	25,756		22,356		—		48,112
State, municipals, and political subdivisions	3	—		300,331		—		300,331
Other government-related securities	3	—		26,792		—		26,792
Corporate securities	3	—		1,592,418		7,036		1,599,454
Redeemable preferred stocks	3	12,195		—		—		12,195
Total fixed maturity securities - trading		37,951		2,430,000		68,563		2,536,514
Total fixed maturity securities		910,509		63,733,506		1,819,372		66,463,387
Equity securities	3	512,937		—		68,484		581,421
Other long-term investments(1)	3 & 4	62,772		567,702		193,040		823,514
Short-term investments	3	963,836		80,606		—		1,044,442
Total investments		2,450,054		64,381,814		2,080,896		68,912,764
Cash	3	223,300		—		—		223,300
Assets related to separate accounts
Variable annuity	3	12,542,212		—		—		12,542,212
Variable universal life	3	1,066,999		—		—		1,066,999
Total assets measured at fair value on a recurring basis		$	16,282,565	$	64,381,814	$	2,080,896	$	82,745,275
Liabilities:
Annuity account balances(2)	3	$	—	$	—	$	71,820	$	71,820
Other liabilities(1)	3 & 4	12,579		345,085		1,067,291		1,424,955
Total liabilities measured at fair value on a recurring basis		$	12,579	$	345,085	$	1,139,111	$	1,496,775
(1) Includes certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.
(3) Fair Value through Net Income
(4) Fair Value through Other Comprehensive Income (Loss)

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, 2018:

	Measurement Category	Level 1		Level 2		Level 3		Total
		(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	4	$	—	$	3,602,991	$	—	$	3,602,991
Commercial mortgage-backed securities	4	—		2,266,387		—		2,266,387
Other asset-backed securities	4	—		970,251		421,642		1,391,893
U.S. government-related securities	4	985,485		629,020		—		1,614,505
State, municipals, and political subdivisions	4	—		3,588,841		—		3,588,841
Other government-related securities	4	—		514,036		—		514,036
Corporate securities	4	—		35,563,302		638,276		36,201,578
Redeemable preferred stocks	4	65,536		17,266		—		82,802
Total fixed maturity securities - available-for-sale		1,051,021		47,152,094		1,059,918		49,263,033
Fixed maturity securities - trading
Residential mortgage-backed securities	3	—		241,836		—		241,836
Commercial mortgage-backed securities	3	—		188,925		—		188,925
Other asset-backed securities	3	—		133,851		26,056		159,907
U.S. government-related securities	3	27,453		32,341		—		59,794
State, municipals, and political subdivisions	3	—		286,413		—		286,413
Other government-related securities	3	—		44,207		—		44,207
Corporate securities	3	—		1,417,591		6,242		1,423,833
Redeemable preferred stocks	3	11,277		—		—		11,277
Total fixed maturity securities - trading		38,730		2,345,164		32,298		2,416,192
Total fixed maturity securities		1,089,751		49,497,258		1,092,216		51,679,225
Equity securities	3	494,287		—		63,421		557,708
Other long-term investments(1)	3 & 4	83,047		180,438		151,342		414,827
Short-term investments	3	589,084		77,217		—		666,301
Total investments		2,256,169		49,754,913		1,306,979		53,318,061
Cash	3	151,400		—		—		151,400
Assets related to separate accounts
Variable annuity	3	12,288,919		—		—		12,288,919
Variable universal life	3	937,732		—		—		937,732
Total assets measured at fair value on a recurring basis		$	15,634,220	$	49,754,913	$	1,306,979	$	66,696,112
Liabilities:
Annuity account balances(2)	3	$	—	$	—	$	76,119	$	76,119
Other liabilities(1)	3 & 4	56,018		164,643		438,127		658,788
Total liabilities measured at fair value on a recurring basis		$	56,018	$	164,643	$	514,246	$	734,907
(1) Includes certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.
(3) Fair Value through Net Income
(4) Fair Value through Other Comprehensive Income (Loss)

Schedule of the Valuation Method for Material Financial Instruments Included in Level 3, as well as the Unobservable Inputs Used in the Valuation of the 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:

	Fair Value As of September 30, 2019		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	415,950	Liquidation	Liquidation value	$95.39 - $97.00 ($96.48)
			Discounted cash flow	Liquidity premium	0.01% - 1.32% (0.44%)
				Paydown rate	9.96% - 12.61% (11.62%)
Corporate securities	1,325,112		Discounted cash flow	Spread over treasury	0.89% - 3.93% (1.73%)
Liabilities:(1)
Embedded derivatives - GLWB(2)	217,757		Actuarial cash flow model	Mortality	87% to 100% of Ruark 2015 ALB Table
				Lapse	Internal Predictive Model
				Utilization	Internal Predictive Model
				Nonperformance risk	0.12% - 0.97%
Embedded derivative - FIA	308,861		Actuarial cash flow model	Expenses	$195 per policy
				Withdrawal rate	0.4% - 1.2% prior to age 70, 100% of the RMD for ages 70+
				Mortality	87% to 100% of Ruark 2015 ALB table
				Lapse	0.5% - 50.0%, depending on duration/surrender charge period
					Dynamically adjusted for WB moneyness and projected market rates vs credited rates
				Nonperformance risk	0.12% - 0.97%
Embedded derivative - IUL	141,793		Actuarial cash flow model	Mortality	37% - 156% of 2015
					VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on
					duration/distribution channel
					and smoking class
				Nonperformance risk	0.12% - 0.97%
(1) Excludes modified coinsurance arrangements.
(2) The fair value for the GLWB embedded derivative is presented as a net liability.

Schedule of the Valuation Method for Material Financial Instruments Included in Level 3, as well as the Unobservable Inputs Used in the Valuation of the 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:

	Fair Value As of December 31, 2018		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	421,458	Liquidation	Liquidation value	$85.75 - $99.99 ($95.36)
			Discounted cash flow	Liquidity premium	0.02% - 1.25% (0.64%)
				Paydown Rate	10.96% - 13.11% (12.03%)
Corporate securities	631,068		Discounted cash flow	Spread over treasury	0.84% - 3.00% (1.84%)
Liabilities:(1)
Embedded derivatives - GLWB(2)	$	43,307	Actuarial cash flow model	Mortality	87% to 100% of Ruark 2015 ALB Table
				Lapse	Ruark Predictive Model
				Utilization	99%. 10% of policies have a one-time over-utilization of 400%
				Nonperformance risk	0.21% - 1.16%
Embedded derivative - FIA	217,288		Actuarial cash flow model	Expenses	$145 per policy
				Withdrawal rate	1.5% prior to age 70, 100% of the RMD for ages 70+
				Mortality	87% to 100% or Ruark 2015 ALB table
				Lapse	1.0% - 30.0%, depending on duration/surrender charge period
				Nonperformance risk	0.21% - 1.16%
Embedded derivative - IUL	90,231		Actuarial cash flow model	Mortality	37% - 577% of 2015 VBT Primary Tables
				Lapse	0.5% - 10.0%, depending on duration/distribution channel and smoking class
				Nonperformance risk	0.21% - 1.16%
(1) Excludes modified coinsurance arrangements.
(2) The fair value for the GLWB embedded derivative is presented as a net liability.

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 the three months ended September 30, 2019, 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 Earnings related to Instruments still held at the  Reporting Date
	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
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial mortgage-backed securities	9,366		—		294		—		—		—		(19)		—		—		—		(6)		9,635		—
Other asset-backed securities	418,310		—		865		(14)		(3,276)		—		(8)		—		—		—		185		416,062		—
Corporate securities	1,328,491		—		22,910		—		(3,408)		9,150		(72,215)		—		—		41,319		(1,135)		1,325,112		—
Total fixed maturity securities - available-for-sale	1,756,167		—		24,069		(14)		(6,684)		9,150		(72,242)		—		—		41,319		(956)		1,750,809		—
Fixed maturity securities - trading
Other asset-backed securities	62,180		294		—		(34)		—		—		(879)		—		—		—		(34)		61,527		274
Corporate securities	5,294		67		—		—		—		1,700		—		—		—		—		(25)		7,036		6,906
Total fixed maturity securities - trading	67,474		361		—		(34)		—		1,700		(879)		—		—		—		(59)		68,563		7,180
Total fixed maturity securities	1,823,641		361		24,069		(48)		(6,684)		10,850		(73,121)		—		—		41,319		(1,015)		1,819,372		7,180
Equity securities	68,486		—		—		(2)		—		—		—		—		—		—		—		68,484		191
Other long-term investments(1)	143,583		49,457		—		—		—		—		—		—		—		—		—		193,040		49,457
Total investments	2,035,710		49,818		24,069		(50)		(6,684)		10,850		(73,121)		—		—		41,319		(1,015)		2,080,896		56,828
Total assets measured at fair value on a recurring basis	$	2,035,710	$	49,818	$	24,069	$	(50)	$	(6,684)	$	10,850	$	(73,121)	$	—	$	—	$	41,319	$	(1,015)	$	2,080,896	$	56,828
Liabilities:
Annuity account balances(2)	$	72,585	$	—	$	—	$	(523)	$	—	$	—	$	—	$	91	$	1,379	$	—	$	—	$	71,820	$	—
Other liabilities(1)	842,035		—		—		(191,572)		—		33,684		—		—		—		—		—		1,067,291		(191,572)
Total liabilities measured at fair value on a recurring basis	$	914,620	$	—	$	—	$	(192,095)	$	—	$	33,684	$	—	$	91	$	1,379	$	—	$	—	$	1,139,111	$	(191,572)
(1) Represents certain freestanding and embedded derivatives.
(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 the nine months ended September 30, 2019, 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 Earnings related to Instruments still held at the  Reporting Date
	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
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial mortgage-backed securities	—		—		310		—		—		9,359		(26)		—		—		—		(8)		9,635		—
Other asset-backed securities	421,642		446		11,525		(71)		(8,075)		—		(10,023)		—		—		—		618		416,062		—
Corporate securities	638,276		82		66,866		—		(6,917)		704,777		(157,171)		—		—		80,574		(1,375)		1,325,112		—
Total fixed maturity securities - available-for-sale	1,059,918		528		78,701		(71)		(14,992)		714,136		(167,220)		—		—		80,574		(765)		1,750,809		—
Fixed maturity securities - trading
Other asset-backed securities	26,056		4,300		—		(3,618)		—		15,463		(6,771)		—		—		26,267		(170)		61,527		(2,442)
Corporate securities	6,242		236		—		(31)		—		1,700		(1,035)		—		—		—		(76)		7,036		5,274
Total fixed maturity securities - trading	32,298		4,536		—		(3,649)		—		17,163		(7,806)		—		—		26,267		(246)		68,563		2,832
Total fixed maturity securities	1,092,216		5,064		78,701		(3,720)		(14,992)		731,299		(175,026)		—		—		106,841		(1,011)		1,819,372		2,832
Equity securities	63,421		1		—		(17)		—		5,079		—		—		—		—		—		68,484		345
Other long-term investments(1)	151,342		73,246		—		(31,419)		—		1,579		—		—		(1,708)		—		—		193,040		40,119
Total investments	1,306,979		78,311		78,701		(35,156)		(14,992)		737,957		(175,026)		—		(1,708)		106,841		(1,011)		2,080,896		43,296
Total assets measured at fair value on a recurring basis	$	1,306,979	$	78,311	$	78,701	$	(35,156)	$	(14,992)	$	737,957	$	(175,026)	$	—	$	(1,708)	$	106,841	$	(1,011)	$	2,080,896	$	43,296
Liabilities:
Annuity account balances(2)	$	76,119	$	—	$	—	$	(1,675)	$	—	$	—	$	—	$	158	$	6,132	$	—	$	—	$	71,820	$	—
Other liabilities(1)	438,127		830		—		(559,106)		—		70,888		—		—		—		—		—		1,067,291		(558,276)
Total liabilities measured at fair value on a recurring basis	$	514,246	$	830	$	—	$	(560,781)	$	—	$	70,888	$	—	$	158	$	6,132	$	—	$	—	$	1,139,111	$	(558,276)
(1) Represents certain freestanding and embedded derivatives.
(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 the three months ended September 30, 2018, 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 Earnings related to Instruments still held at the  Reporting Date
	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
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	21,780	$	—	$	—	$	—	$	(538)	$	—	$	—	$	—	$	—	$	(21,281)	$	39	$	—	$	—
Commercial mortgage-backed securities	47,227		—		—		—		(1,212)		—		(151)		—		—		(26,372)		(25)		19,467		—
Other asset-backed securities	515,701		—		17		(62)		(14,802)		—		(24)		—		—		—		1,431		502,261		—
Corporate securities	644,811		—		1,422		—		(4,044)		15,000		(47,935)		—		—		19,903		(873)		628,284		—
Total fixed maturity securities - available-for-sale	1,229,519		—		1,439		(62)		(20,596)		15,000		(48,110)		—		—		(27,750)		572		1,150,012		—
Fixed maturity securities - trading
Other asset-backed securities	24,852		84		—		(76)		—		4,128		(926)		—		—		—		(50)		28,012		68
Corporate securities	5,254		—		—		(6)		—		—		—		—		—		—		(25)		5,223		(6)
Total fixed maturity securities - trading	30,106		84		—		(82)		—		4,128		(926)		—		—		—		(75)		33,235		62
Total fixed maturity securities	1,259,625		84		1,439		(144)		(20,596)		19,128		(49,036)		—		—		(27,750)		497		1,183,247		62
Equity securities	65,553		—		—		—		—		—		(2,102)		—		—		—		—		63,451		287
Other long-term investments(1)	170,594		11,899		—		(1,915)		—		—		—		—		—		—		—		180,578		9,984
Total investments	1,495,772		11,983		1,439		(2,059)		(20,596)		19,128		(51,138)		—		—		(27,750)		497		1,427,276		10,333
Total assets measured at fair value on a recurring basis	$	1,495,772	$	11,983	$	1,439	$	(2,059)	$	(20,596)	$	19,128	$	(51,138)	$	—	$	—	$	(27,750)	$	497	$	1,427,276	$	10,333
Liabilities:
Annuity account balances(2)	$	80,098	$	—	$	—	$	(896)	$	—	$	—	$	—	$	40	$	2,571	$	—	$	—	$	78,463	$	—
Other liabilities(1)	457,008		38,249		—		(41,614)		—		—		—		—		—		—		—		460,373		(3,365)
Total liabilities measured at fair value on a recurring basis	$	537,106	$	38,249	$	—	$	(42,510)	$	—	$	—	$	—	$	40	$	2,571	$	—	$	—	$	538,836	$	(3,365)
(1) Represents certain freestanding and embedded derivatives.
(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 the nine months ended September 30, 2018, 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 Earnings related to Instruments still held at the  Reporting Date
	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
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	—	$	—	$	—	$	—	$	(995)	$	22,225	$	—	$	—	$	—	$	(21,281)	$	51	$	—	$	—
Commercial mortgage-backed securities	—		—		—		—		(2,496)		48,621		(245)		—		—		(26,372)		(41)		19,467		—
Other asset-backed securities	504,365		—		11,884		(62)		(16,449)		—		(47)		—		—		222		2,348		502,261		—
Corporate securities	626,901		—		8,483		—		(22,973)		93,491		(86,388)		—		—		12,009		(3,239)		628,284		—
Total fixed maturity securities - available-for-sale	1,131,266		—		20,367		(62)		(42,913)		164,337		(86,680)		—		—		(35,422)		(881)		1,150,012		—
Fixed maturity securities - trading
Other asset-backed securities	35,222		278		—		(3,674)		—		8,728		(12,595)		—		—		164		(111)		28,012		(3,337)
Corporate securities	5,442		—		—		(145)		—		—		—		—		—		—		(74)		5,223		(145)
Total fixed maturity securities - trading	40,664		278		—		(3,819)		—		8,728		(12,595)		—		—		164		(185)		33,235		(3,482)
Total fixed maturity securities	1,171,930		278		20,367		(3,881)		(42,913)		173,065		(99,275)		—		—		(35,258)		(1,066)		1,183,247		(3,482)
Equity securities	65,518		1		—		(1)		—		36		(2,102)		—		—		—		(1)		63,451		224
Other long-term investments(1)	160,466		34,303		—		(13,564)		—		—		—		—		(627)		—		—		180,578		20,112
Total investments	1,397,914		34,582		20,367		(17,446)		(42,913)		173,101		(101,377)		—		(627)		(35,258)		(1,067)		1,427,276		16,854
Total assets measured at fair value on a recurring basis	$	1,397,914	$	34,582	$	20,367	$	(17,446)	$	(42,913)	$	173,101	$	(101,377)	$	—	$	(627)	$	(35,258)	$	(1,067)	$	1,427,276	$	16,854
Liabilities:
Annuity account balances(2)	$	83,472	$	—	$	—	$	(2,749)	$	—	$	—	$	—	$	570	$	8,328	$	—	$	—	$	78,463	$	—
Other liabilities(1)	597,562		226,359		—		(89,170)		—		—		—		—		—		—		—		460,373		137,189
Total liabilities measured at fair value on a recurring basis	$	681,034	$	226,359	$	—	$	(91,919)	$	—	$	—	$	—	$	570	$	8,328	$	—	$	—	$	538,836	$	137,189
(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:

		As of
		September 30, 2019				December 31, 2018
	Fair Value Level	Carrying Amounts		Fair Values		Carrying Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	9,327,911	$	9,529,865	$	7,724,733	$	7,447,702
Policy loans	3	1,686,832		1,686,832		1,695,886		1,695,886
Fixed maturities, held-to-maturity(1)	3	2,544,054		2,685,076		2,633,474		2,547,210
Liabilities:
Stable value product account balances	3	$	5,450,981	$	5,547,509	$	5,234,731	$	5,200,723
Future policy benefits and claims(2)	3	1,707,238		1,709,444		1,671,414		1,671,434
Other policyholders’ funds(3)	3	104,395		106,285		131,150		131,782
Debt:(4)
Non-recourse funding obligations(5)	3	$	2,801,952	$	2,960,555	$	2,888,329	$	2,801,399
Subordinated funding obligations	3	110,000		113,369		110,000		95,476
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) Single premium immediate annuity without life contingencies.
(3) Supplementary contracts without life contingencies.
(4) Excludes capital lease obligations of $2.3 million and $1.3 million as of September 30, 2019 and December 31, 2018, respectively.
(5) As of September 30, 2019, carrying amount of $2.7 billion and a fair value of $2.5 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. As of December 31, 2018, carrying amount of $2.6 billion and a fair value of $2.5 billion related to non-recourse funding obligations issued by Golden Gate and Golden Gate V.