15. 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 6, 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 September 30, 2013.

					Net Amounts
			Gross		of Assets		Gross Amounts Not Offset
			Amounts		Presented in		in the Statement of
	Gross		Offset in the		the		Financial Position
	Amounts of		Statement of		Statement of				Cash
	Recognized		Financial		Financial		Financial		Collateral
	Assets		Position		Position		Instruments		Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	112,810	$	—	$	112,810	$	44,189	$	6,000	$	62,621
Embedded derivative - Modco reinsurance treaties	802		—		802		—		—		802
Embedded derivative - GMWB	79,827		—		79,827		—		—		79,827
Total derivatives, subject to a master netting arrangement or similar arrangement	193,439		—		193,439		44,189		6,000		143,250
Total derivatives, not subject to a master netting arrangement or similar arrangement	2,733		—		2,733		—		—		2,733
Total derivatives	196,172		—		196,172		44,189		6,000		145,983
Total Assets	$	196,172	$	—	$	196,172	$	44,189	$	6,000	$	145,983

					Net Amounts
			Gross		of Liabilities		Gross Amounts Not Offset
			Amounts		Presented in		in the Statement of
	Gross		Offset in the		the		Financial Position
	Amounts of		Statement of		Statement of				Cash
	Recognized		Financial		Financial		Financial		Collateral
	Liabilities		Position		Position		Instruments		Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	147,702	$	—	$	147,702	$	44,189	$	72,813	$	30,700
Embedded derivative - Modco reinsurance treaties	219,532		—		219,532		—		—		219,532
Funds withheld derivative	49,045				49,045						49,045
Embedded derivative - GMWB	1,992		—		1,992		—		—		1,992
Embedded derivative - FIA	9,199		—		9,199		—		—		9,199
Total derivatives, subject to a master netting arrangement or similar arrangement	427,470		—		427,470		44,189		72,813		310,468
Total derivatives, not subject to a master netting arrangement or similar arrangement	—		—		—		—		—		—
Total derivatives	427,470		—		427,470		44,189		72,813		310,468
Repurchase agreements(1)	100,000		—		100,000		—		—		100,000
Total Liabilities	$	527,470	$	—	$	527,470	$	44,189	$	72,813	$	410,468

(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, 2012.

					Net Amounts
			Gross		of Assets		Gross Amounts Not Offset
			Amounts		Presented in		in the Statement of
	Gross		Offset in the		the		Financial Position
	Amounts of		Statement of		Statement of				Cash
	Recognized		Financial		Financial		Financial		Collateral
	Assets		Position		Position		Instruments		Received		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Assets
Derivatives:
Free-Standing derivatives	$	81,520	$	—	$	81,520	$	21,565	$	11,280	$	48,675
Embedded derivative - Modco reinsurance treaties	1,330		—		1,330		—		—		1,330
Embedded derivative - GMWB	30,261		—		30,261		—		—		30,261
Total derivatives, subject to a master netting arrangement or similar arrangement	113,111		—		113,111		21,565		11,280		80,266
Total derivatives, not subject to a master netting arrangement or similar arrangement	17,317		—		17,317		—		—		17,317
Total derivatives	130,428		—		130,428		21,565		11,280		97,583
Total Assets	$	130,428	$	—	$	130,428	$	21,565	$	11,280	$	97,583

					Net Amounts
			Gross		of Liabilities		Gross Amounts Not Offset
			Amounts		Presented in		in the Statement of
	Gross		Offset in the		the		Financial Position
	Amounts of		Statement of		Statement of				Cash
	Recognized		Financial		Financial		Financial		Collateral
	Liabilities		Position		Position		Instruments		Paid		Net Amount
	(Dollars In Thousands)
Offsetting of Derivative Liabilities
Derivatives:
Free-Standing derivatives	$	46,437	$	—	$	46,437	$	21,565	$	20,373	$	4,499
Embedded derivative - Modco reinsurance treaties	411,907		—		411,907		—		—		411,907
Embedded derivative - GMWB	199,530		—		199,530		—		—		199,530
Total derivatives, subject to a master netting arrangement or similar arrangement	657,874		—		657,874		21,565		20,373		615,936
Total derivatives, not subject to a master netting arrangement or similar arrangement	—		—		—		—		—		—
Total derivatives	657,874		—		657,874		21,565		20,373		615,936
Repurchase agreements(1)	150,000		—		150,000		—		—		150,000
Total Liabilities	$	807,874	$	—	$	807,874	$	21,565	$	20,373	$	765,936

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