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INVESTMENT OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2012

INVESTMENT OPERATIONS

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

		For The						For The
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2012			2011			2012			2011
		(Dollars In Thousands)
Fixed maturities		$	22,889		$	20,396		$	58,984		$	56,076
Equity securities		(241		)	—			(93		)	9,121
Impairments on fixed maturity securities		(8,499		)	(9,777		)	(40,537		)	(24,875		)
Modco trading portfolio		104,865			123,760			179,027			151,714
Other investments		(5,037		)	(5,054		)	(12,080		)	(2,814		)
Total realized gains (losses) - investments		$	113,977		$	129,325		$	185,301		$	189,222

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		$	343.8		$	403.7		$	747.5
Switzerland		150.4			202.9			353.3
France		85.2			98.2			183.4
Sweden		165.8			5.0			170.8
Netherlands		139.5			90.2			229.7
Spain		37.7			96.4			134.1
Belgium		—			92.1			92.1
Germany		26.6			58.8			85.4
Ireland		5.9			85.7			91.6
Luxembourg		—			51.7			51.7
Italy		—			46.2			46.2
Norway		—			14.6			14.6
Total securities		954.9			1,245.5			2,200.4
Derivatives:
Germany		25.8			—			25.8
Switzerland		1.1			—			1.1
Total derivatives		26.9			—			26.9
		$	981.8		$	1,245.5		$	2,227.3

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		$	1,927,396		$	103,617		$	(23,996	)	$	2,007,017		$	(4,613	)
Commercial mortgage-backed securities		772,697			66,292			(332		)	838,657			—
Other asset-backed securities		999,155			11,855			(74,947		)	936,063			(1,118		)
U.S. government-related securities		1,270,838			78,528			(173		)	1,349,193			—
Other government-related securities		93,490			7,645			(19		)	101,116			—
States, municipals, and political subdivisions		1,168,483			252,729			(215		)	1,420,997			—
Corporate bonds		17,186,295			2,716,222			(63,312		)	19,839,205			(1,783		)
		23,418,354			3,236,888			(162,994		)	26,492,248			(7,514		)
Equity securities		315,441			11,692			(10,202		)	316,931			—
Short-term investments		54,133			—			—			54,133			—
		$	23,787,928		$	3,248,580		$	(173,196	)	$	26,863,312		$	(7,514	)
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		$	449,098		$	455,409
Due after one year through five years		4,744,649			5,178,410
Due after five years through ten years		5,973,213			6,635,445
Due after ten years		12,251,394			14,222,984
		$	23,418,354		$	26,492,248

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						Nine Months Ended
		September 30,						September 30,
		2012			2011			2012			2011
		(Dollars In Thousands)
Beginning balance		$	100,894		$	49,643		$	69,476		$	39,275
Additions for newly impaired securities		—			744			19,307			10,118
Additions for previously impaired securities		6,866			6,627			18,977			10,710
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		$	107,760		$	57,014		$	107,760		$	57,014

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 September 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		$	65,010		$	(5,709	)	$	229,183		$	(18,287	)	$	294,193		$	(23,996	)
Commercial mortgage-backed securities		18,629			(332		)	—			—			18,629			(332		)
Other asset-backed securities		511,822			(36,646		)	202,059			(38,301		)	713,881			(74,947		)
U.S. government-related securities		51,377			(173		)	—			—			51,377			(173		)
Other government-related securities		34,994			(19		)	—			—			34,994			(19		)
States, municipals, and political subdivisions		10,302			(215		)	—			—			10,302			(215		)
Corporate bonds		569,790			(23,199		)	535,333			(40,113		)	1,105,123			(63,312		)
Equities		15,171			(4,940		)	21,385			(5,262		)	36,556			(10,202		)
		$	1,277,095		$	(71,233	)	$	987,960		$	(101,963	)	$	2,265,055		$	(173,196	)

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						Nine Months Ended
		September 30,						September 30,
		2012			2011			2012			2011
		(Dollars In Thousands)						(Dollars In Thousands)
Fixed maturities		$	436,690		$	477,641		$	796,549		$	675,040
Equity securities		4,531			(8,380		)	8,226			(12,173		)

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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