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INVESTMENT OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2012

INVESTMENT OPERATIONS

Summary of net realized investment gains (losses) for invested assets

		For The						For The
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2012			2011			2012			2011
		(Dollars In Thousands)						(Dollars In Thousands)
Fixed maturities		$	16,417		$	30,418		$	36,095		$	35,680
Equity securities		148			21			148			9,121
Impairments on fixed maturity securities		(13,442		)	(9,435		)	(32,038		)	(15,098		)
Impairments on equity securities		—			—			—			—
Modco trading portfolio		56,063			33,603			74,162			27,954
Other investments		(4,749		)	412			(7,043		)	2,240
Total realized gains (losses) - investments		$	54,437		$	55,019		$	71,324		$	59,897

Schedule of non-sovereign fair value exposure by country for securities and derivatives

								Total Gross
		Non-sovereign Debt						Funded
Financial Instrument and Country		Financial			Non-financial			Exposure
		(Dollars In Millions)
Securities:
United Kingdom		$	320.9		$	391.2		$	712.1
Switzerland		124.0			205.2			329.2
France		99.2			86.8			186.0
Sweden		158.3			—			158.3
Netherlands		93.5			87.2			180.7
Spain		39.2			90.7			129.9
Belgium		—			89.6			89.6
Germany		25.7			57.7			83.4
Ireland		5.6			83.7			89.3
Luxembourg		—			56.9			56.9
Italy		—			41.3			41.3
Norway		—			14.1			14.1
Total securities		866.4			1,204.4			2,070.8
Derivatives:
Germany		17.0			—			17.0
Switzerland		0.2			—			0.2
Total derivatives		17.2			—			17.2
		$	883.6		$	1,204.4		$	2,088.0

Schedule of amortized cost and fair value of the Company's investments classified as available-for-sale

					Gross			Gross						Total OTTI
		Amortized			Unrealized			Unrealized			Fair			Recognized
		Cost			Gains			Losses			Value			in OCI(1)
		(Dollars In Thousands)
2012
Fixed maturities:
Bonds
Residential mortgage-backed securities		$	2,089,252		$	94,902		$	(56,910	)	$	2,127,244		$	(30,802	)
Commercial mortgage-backed securities		710,465			36,681			(1,315		)	745,831			—
Other asset-backed securities		1,008,490			6,817			(93,563		)	921,744			(8,307		)
U.S. government-related securities		1,239,475			77,738			—			1,317,213			—
Other government-related securities		101,521			6,792			(137		)	108,176			—
States, municipals, and political subdivisions		1,158,642			237,453			(9		)	1,396,086			—
Corporate bonds		17,098,772			2,214,470			(120,855		)	19,192,387			(5,004		)
		23,406,617			2,674,853			(272,789		)	25,808,681			(44,113		)
Equity securities		301,329			7,169			(12,649		)	295,849			—
Short-term investments		44,946			—			—			44,946			—
		$	23,752,892		$	2,682,022		$	(285,438	)	$	26,149,476		$	(44,113	)
2011
Fixed maturities:
Bonds
Residential mortgage-backed securities		$	2,340,172		$	82,574		$	(85,702	)	$	2,337,044		$	(47,652	)
Commercial mortgage-backed securities		530,283			24,473			(4,229		)	550,527			—
Other asset-backed securities		997,398			6,529			(90,898		)	913,029			(6,559		)
U.S. government-related securities		1,150,525			65,212			(58		)	1,215,679			—
Other government-related securities		88,058			4,959			—			93,017			—
States, municipals, and political subdivisions		1,154,307			173,406			—			1,327,713			—
Corporate bonds		16,888,423			1,922,038			(249,870		)	18,560,591			1,787
		23,149,166			2,279,191			(430,757		)	24,997,600			(52,424		)
Equity securities		286,537			5,430			(16,595		)	275,372			(74		)
Short-term investments		15,629			—			—			15,629			—
		$	23,451,332		$	2,284,621		$	(447,352	)	$	25,288,601		$	(52,498	)

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

Schedule of amortized cost and fair value of available-for-sale fixed maturities, by expected maturity

		Amortized			Fair
		Cost			Value
		(Dollars In Thousands)
Due in one year or less		$	469,467		$	474,255
Due after one year through five years		4,754,021			5,072,983
Due after five years through ten years		5,726,983			6,250,795
Due after ten years		12,456,146			14,010,648
		$	23,406,617		$	25,808,681

Schedule of credit losses on debt securities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss)

		For The						For The
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2012			2011			2012			2011
		(Dollars In Thousands)
Beginning balance		$	87,942		$	40,463		$	69,476		$	39,275
Additions for newly impaired securities		3,619			5,765			19,307			9,374
Additions for previously impaired securities		9,333			3,415			12,111			4,083
Reductions for previously impaired securities due to a change in expected cash flows		—			—			—			—
Reductions for previously impaired securities that
were sold in the current period		—			—			—			(3,089		)
Ending balance		$	100,894		$	49,643		$	100,894		$	49,643

Schedule of investments' 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

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, 2012:

		Less Than 12 Months						12 Months or More						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
		Value			Loss			Value			Loss			Value			Loss
		(Dollars In Thousands)
Residential mortgage-backed securities		$	210,561		$	(13,386	)	$	360,891		$	(43,524	)	$	571,452		$	(56,910	)
Commercial mortgage-backed securities		86,770			(1,315		)	—			—			86,770			(1,315		)
Other asset-backed securities		478,279			(41,230		)	207,480			(52,333		)	685,759			(93,563		)
U.S. government-related securities		—			—			—			—			—			—
Other government-related securities		14,863			(137		)	—			—			14,863			(137		)
States, municipals, and political subdivisions		509			(9		)	—			—			509			(9		)
Corporate bonds		1,012,629			(46,999		)	559,922			(73,856		)	1,572,551			(120,855		)
Equities		13,496			(7,779		)	27,847			(4,870		)	41,343			(12,649		)
		$	1,817,107		$	(110,855	)	$	1,156,140		$	(174,583	)	$	2,973,247		$	(285,438	)

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, 2011:

		Less Than 12 Months						12 Months or More						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
		Value			Loss			Value			Loss			Value			Loss
		(Dollars In Thousands)
Residential mortgage-backed securities		$	276,216		$	(15,308	)	$	524,251		$	(70,394	)	$	800,467		$	(85,702	)
Commercial mortgage-backed securities		78,893			(4,229		)	—			—			78,893			(4,229		)
Other asset-backed securities		531,653			(32,074		)	190,639			(58,824		)	722,292			(90,898		)
U.S. government-related securities		21,311			(58		)	—			—			21,311			(58		)
Other government-related securities		—			—			—			—			—			—
States, municipals, and political subdivisions		—			—			—			—			—			—
Corporate bonds		1,870,256			(131,953		)	523,913			(117,917		)	2,394,169			(249,870		)
Equities		50,638			(8,436		)	22,095			(8,159		)	72,733			(16,595		)
		$	2,828,967		$	(192,058	)	$	1,260,898		$	(255,294	)	$	4,089,865		$	(447,352	)

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

		For The						For The
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2012			2011			2012			2011
		(Dollars In Thousands)						(Dollars In Thousands)
Fixed maturities		$	340,397		$	169,167		$	359,860		$	197,399
Equity securities		(1,411		)	(3,377		)	3,695			(3,793		)

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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