FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS

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 June 30, 2014:

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,434,728	$	10	$	1,434,738
Commercial mortgage-backed securities	—		1,087,615		—		1,087,615
Other asset-backed securities	—		297,588		568,097		865,685
U.S. government-related securities	1,295,535		273,196		—		1,568,731
State, municipalities, and political subdivisions	—		1,599,174		3,675		1,602,849
Other government-related securities	—		22,214		—		22,214
Corporate bonds	132		26,184,072		1,524,297		27,708,501
Total fixed maturity securities - available-for-sale	1,295,667		30,898,587		2,096,079		34,290,333
Fixed maturity securities - trading
Residential mortgage-backed securities	—		298,684		842		299,526
Commercial mortgage-backed securities	—		159,899		—		159,899
Other asset-backed securities	—		95,012		176,386		271,398
U.S. government-related securities	212,167		4,948		—		217,115
State, municipalities, and political subdivisions	—		281,182		—		281,182
Other government-related securities	—		56,142		—		56,142
Corporate bonds	—		1,537,907		31,520		1,569,427
Total fixed maturity securities - trading	212,167		2,433,774		208,748		2,854,689
Total fixed maturity securities	1,507,834		33,332,361		2,304,827		37,145,022
Equity securities	581,117		88,396		77,882		747,395
Other long-term investments (1)	78,391		64,075		67,222		209,688
Short-term investments	201,364		6,181		—		207,545
Total investments	2,368,706		33,491,013		2,449,931		38,309,650
Cash	250,900		—		—		250,900
Assets related to separate accounts
Variable annuity	13,304,455		—		—		13,304,455
Variable universal life	823,747		—		—		823,747
Total assets measured at fair value on a recurring basis	$	16,747,808	$	33,491,013	$	2,449,931	$	52,688,752
Liabilities:
Annuity account balances(2)	$	—	$	—	$	102,456	$	102,456
Other liabilities (1)	36,608		114,466		399,669		550,743
Total liabilities measured at fair value on a recurring basis	$	36,608	$	114,466	$	502,125	$	653,199

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

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, 2013:

	Level 1		Level 2		Level 3		Total
	(Dollars In Thousands)
Assets:
Fixed maturity securities - available-for-sale
Residential mortgage-backed securities	$	—	$	1,445,040	$	28	$	1,445,068
Commercial mortgage-backed securities	—		970,656		—		970,656
Other asset-backed securities	—		326,175		545,808		871,983
U.S. government-related securities	1,211,141		296,749		—		1,507,890
State, municipalities, and political subdivisions	—		1,407,154		3,675		1,410,829
Other government-related securities	—		51,427		—		51,427
Corporate bonds	107		24,191,367		1,549,940		25,741,414
Total fixed maturity securities - available-for-sale	1,211,248		28,688,568		2,099,451		31,999,267
Fixed maturity securities - trading
Residential mortgage-backed securities	—		310,877		—		310,877
Commercial mortgage-backed securities	—		158,570		—		158,570
Other asset-backed securities	—		93,278		194,977		288,255
U.S. government-related securities	191,332		4,906		—		196,238
State, municipalities, and political subdivisions	—		260,892		—		260,892
Other government-related securities	—		57,097		—		57,097
Corporate bonds	—		1,497,362		29,199		1,526,561
Total fixed maturity securities - trading	191,332		2,382,982		224,176		2,798,490
Total fixed maturity securities	1,402,580		31,071,550		2,323,627		34,797,757
Equity securities	483,482		50,927		67,979		602,388
Other long-term investments (1)	56,469		54,965		98,886		210,320
Short-term investments	131,421		1,603		—		133,024
Total investments	2,073,952		31,179,045		2,490,492		35,743,489
Cash	345,579		—		—		345,579
Other assets	—		—		—		—
Assets related to separate accounts
Variable annuity	12,791,438		—		—		12,791,438
Variable universal life	783,618		—		—		783,618
Total assets measured at fair value on a recurring basis	$	15,994,587	$	31,179,045	$	2,490,492	$	49,664,124
Liabilities:
Annuity account balances (2)	$	—	$	—	$	107,000	$	107,000
Other liabilities (1)	30,241		191,182		233,738		455,161
Total liabilities measured at fair value on a recurring basis	$	30,241	$	191,182	$	340,738	$	562,161

(1)Includes certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

Schedule of 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		Valuation	Unobservable	Range
	June 30, 2014		Technique	Input	(Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	567,480	Discounted cash flow	Liquidity premium	0.15% - 1.49% (0.57%)
				Paydown rate	9.04% - 20.69% (12.44%)
Corporate bonds	1,461,997		Discounted cash flow	Spread over treasury	0.06% - 6.90% (1.88%)
Embedded derivatives - GMWB(1)	53,447		Actuarial cash flow model	Mortality	49% to 80% of 1994 MGDB table
				Lapse	0% - 24%, depending on product/duration/funded status of guarantee
				Utilization	97% - 103%
				Nonperformance risk	0.11% - 0.90%
Liabilities:
Annuity account balances(2)	$	102,456	Actuarial cash flow model	Asset earned rate	5.37%
				Expenses	$88 - $102 per policy
				Withdrawal rate	2.20%
				Mortality	49% to 80% of 1994 MGDB table
				Lapse	2.2% - 33.0%, depending on duration/surrender charge period
				Return on assets	1.50% - 1.85% depending on surrender charge period
				Nonperformance risk	0.11% - 0.90%
Embedded derivative - FIA	69,615		Actuarial cash flow model	Expenses	$83 - $97 per policy
				Withdrawal rate	1.1% - 4.5% depending on duration and tax qualification
				Mortality	49% to 80% of 1994 MGDB table
				Lapse	2.5% - 40.0%, depending on duration/surrender charge period
				Nonperformance risk	0.11% - 0.90%
Embedded derivative - IUL	610		Actuarial cash flow model	Mortality	37% - 74% of 2008 VBT Primary Tables
				Lapse	0.5% - 10%, depending on duration/distribution channel and smoking class
				Nonperformance risk	0.11% - 0.90%

(1)The fair value for the GMWB embedded derivative is presented as a net asset. Excludes modified coinsurance agreements.

(2)Represents liabilities related to fixed indexed annuities.

	Fair Value
	As of		Valuation	Unobservable	Range
	December 31, 2013		Technique	Input	(Weighted Average)
	(Dollars In Thousands)
Assets:
Other asset-backed securities	$	545,808	Discounted cash flow	Liquidity premium	1.00% - 1.68% (1.08%)
				Paydown rate	8.57% - 16.87% (12.05%)
Corporate bonds	1,555,898		Discounted cash flow	Spread over treasury	0.11% - 6.75% (2.06%)
Embedded derivatives - GMWB(1)	156,287		Actuarial cash flow model	Mortality	49% to 80% of 1994 MGDB table
				Lapse	0% - 24%, depending on product/duration/funded status of guarantee
				Utilization	97% - 103%
				Nonperformance risk	0.15% - 1.06%
Liabilities:
Annuity account balances(2)	$	107,000	Actuarial cash flow model	Asset earned rate	5.37%
				Expenses	$88 - $102 per policy
				Withdrawal rate	2.20%
				Mortality	49% to 80% of 1994 MGDB table
				Lapse	2.2% - 33.0%, depending on product/duration/funded status of guarantee
				Return on assets	1.50% - 1.85% depending on surrender charge period
				Nonperformance risk	0.15% - 1.06%
Embedded derivative - FIA	25,324		Actuarial cash flow model	Expenses	$83 - $97 per policy
				Withdrawal rate	1.1% - 4.5% depending on duration and tax qualification
				Mortality	49% to 80% of 1994 MGDB table
				Lapse	2.5% - 40.0%, depending on product/duration/funded status of guarantee
				Nonperformance risk	0.15% - 1.06%

(1)The fair value for the GMWB embedded derivative is presented as a net asset. Excludes modified coinsurance agreements.

(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 June 30, 2014, for which the Company has used significant unobservable inputs (Level 3):

																														Total
																														Gains (losses)
			Total				Total																							included in
			Realized and Unrealized				Realized and Unrealized																							Earnings
			Gains				Losses																							related to
					Included in					Included in																				Instruments
					Other					Other												Transfers								still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of						Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3			Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	17	$	—	$	—	$	—		$	—		$	—	$	(6	)	$	—	$	—	$	—		$	(1	)	$	10	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	548,805		—		29,929		—			(104		)	—		(9,534		)	—		—		—			(999		)	568,097		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		—			—		—		—			—			3,675		—
Other government-related securities			—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	1,573,710		74		27,271		—			(2,250		)	60,845		(65,172		)	—		—		(67,478		)	(2,703		)	1,524,297		—
Total fixed maturity securities - available-for-sale	2,126,207		74		57,200		—			(2,354		)	60,845		(74,712		)	—		—		(67,478		)	(3,703		)	2,096,079		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		—			—			842		—			—		—		—			—			842		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	194,664		6,124		—		(2,686		)	—			—		(21,883		)	—		—		—			167			176,386		522
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	30,946		340		—		(40		)	—			4,059		(5,047		)	—		—		1,250			12			31,520		280
Total fixed maturity securities - trading	225,610		6,464		—		(2,726		)	—			4,901		(26,930		)	—		—		1,250			179			208,748		802
Total fixed maturity securities	2,351,817		6,538		57,200		(2,726		)	(2,354		)	65,746		(101,642		)	—		—		(66,228		)	(3,524		)	2,304,827		802
Equity securities	77,591		—		965		—			—			—		(674		)	—		—		—			—			77,882		—
Other long-term investments(1)	75,713		314		—		(8,805		)	—			—		—			—		—		—			—			67,222		(8,491		)
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	2,505,121		6,852		58,165		(11,531		)	(2,354		)	65,746		(102,316		)	—		—		(66,228		)	(3,524		)	2,449,931		(7,689		)
Total assets measured at fair value on a recurring basis	$	2,505,121	$	6,852	$	58,165	$	(11,531	)	$	(2,354	)	$	65,746	$	(102,316	)	$	—	$	—	$	(66,228	)	$	(3,524	)	$	2,449,931	$	(7,689	)
Liabilities:
Annuity account balances(2)	$	105,593	$	—	$	—	$	(1,714	)	$	—		$	—	$	—		$	63	$	4,914	—			$	—		$	102,456	$	—
Other liabilities(1)	308,549		13		—		(91,133		)	—			—		—			—		—		—			—			399,669		(91,120		)
Total liabilities measured at fair value on a recurring basis	$	414,142	$	13	$	—	$	(92,847	)	$	—		$	—	$	—		$	63	$	4,914	$	—		$	—		$	502,125	$	(91,120	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2013, for which the Company has used significant unobservable inputs (Level 3):

																													Total
																													Gains (losses)
			Total				Total																						included in
			Realized and Unrealized				Realized and Unrealized																						Earnings
			Gains				Losses																						related to
					Included in					Included in																			Instruments
					Other					Other												Transfers							still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of					Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3		Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	4	$	—	$	—	$	—		$	(337	)	$	14,349	$	—		$	—	$	—	$	46	$	—		$	14,062	$	—
Commercial mortgage-backed securities	—		—		—		—			—								—		—		—		—			—		—
Other asset-backed securities	560,668		—		43,744		—			—			13,162		(41,377		)	—		—		—		199			576,396		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
States, municipals, and political subdivisions	4,275		—		—		—			—			—		—			—		—		—		—			4,275		—
Other government-related securities	20,003		—		1		—			—			—		—			—		—		—		(4		)	20,000		—
Corporate bonds	124,555		116		81		—			(7,682		)	18,275		(3,113		)	—		—		62,330		333			194,895		—
Total fixed maturity securities - available-for-sale	709,505		116		43,826		—			(8,019		)	45,786		(44,490		)	—		—		62,376		528			809,628		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		—			—			1,582		—			—		—		—		—			1,582		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	71,383		1,389		—		(2,610		)	—			105,830		(9,953		)	—		—		2,210		602			168,851		511
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
States, municipals and political subdivisions	—		—		—		—			—			3,500		—			—		—		—		—			3,500		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Corporate bonds	5,112		—		—		(23		)	—			—		—			—		—		—		3			5,092		(23		)
Total fixed maturity securities - trading	76,495		1,389		—		(2,633		)	—			110,912		(9,953		)	—		—		2,210		605			179,025		488
Total fixed maturity securities	786,000		1,505		43,826		(2,633		)	(8,019		)	156,698		(54,443		)	—		—		64,586		1,133			988,653		488
Equity securities	65,527		—		—		—			—			—		—			—		—		—		—			65,527		—
Other long-term investments(1)	70,404		21,641		—		(10,114		)	—			—		—			—		—		—		(34,093		)	47,838		11,527
Short-term investments	—		—		—		—			—			—		—			—		—		—		—			—		—
Total investments	921,931		23,146		43,826		(12,747		)	(8,019		)	156,698		(54,443		)	—		—		64,586		(32,960		)	1,102,018		12,015
Total assets measured at fair value on a recurring basis	$	921,931	$	23,146	$	43,826	$	(12,747	)	$	(8,019	)	$	156,698	$	(54,443	)	$	—	$	—	$	64,586	$	(32,960	)	$	1,102,018	$	12,015
Liabilities:
Annuity account balances(2)	$	123,681	$	—	$	—	$	(1,686	)	$	—		$	—	$	—		$	65	$	10,818	$	—	$	—		$	114,614	$	—
Other liabilities(1)	539,814		153,664		—		(5,131		)	—			—		—			—		—		—		134,505			256,776		148,533
Total liabilities measured at fair value on a recurring basis	$	663,495	$	153,664	$	—	$	(6,817	)	$	—		$	—	$	—		$	65	$	10,818	$	—	$	134,505		$	371,390	$	148,533

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the six months ended June 30, 2014, for which the Company has used significant unobservable inputs (Level 3):

																														Total
																														Gains (losses)
			Total				Total																							included in
			Realized and Unrealized				Realized and Unrealized																							Earnings
			Gains				Losses																							related to
					Included in					Included in																				Instruments
					Other					Other												Transfers								still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of						Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3			Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	28	$	—	$	—	$	—		$	—		$	1	$	(17	)	$	—	$	—	$	—		$	(2	)	$	10	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	545,808		—		34,066		—			(1,233		)	—		(9,794		)	—		—		—			(750		)	568,097		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals, and political subdivisions	3,675		—		—		—			—			—		—			—		—		—			—			3,675		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	1,549,940		969		54,288		—			(7,265		)	90,232		(103,039		)	—		—		(55,293		)	(5,535		)	1,524,297		—
Total fixed maturity securities - available-for-sale	2,099,451		969		88,354		—			(8,498		)	90,233		(112,850		)	—		—		(55,293		)	(6,287		)	2,096,079		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		—			—			842		—			—		—		—			—			842		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Other asset-backed securities	194,977		6,851		—		(3,114		)	—			—		(22,695		)	—		—		—			367			176,386		654
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
States, municipals and political subdivisions	—		—		—		—			—			—		—			—		—		—			—			—		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—			—			—		—
Corporate bonds	29,199		878		—		(53		)	—			4,059		(5,110		)	—		—		2,522			25			31,520		—
Total fixed maturity securities - trading	224,176		7,729		—		(3,167		)	—			4,901		(27,805		)	—		—		2,522			392			208,748		654
Total fixed maturity securities	2,323,627		8,698		88,354		(3,167		)	(8,498		)	95,134		(140,655		)	—		—		(52,771		)	(5,895		)	2,304,827		654
Equity securities	67,979		—		1,192		—			(166		)	9,551		(674		)	—		—		—			—			77,882		—
Other long-term investments(1)	98,886		425		—		(32,089		)	—			—		—			—		—		—			—			67,222		(31,664		)
Short-term investments	—		—		—		—			—			—		—			—		—		—			—			—		—
Total investments	2,490,492		9,123		89,546		(35,256		)	(8,664		)	104,685		(141,329		)	—		—		(52,771		)	(5,895		)	2,449,931		(31,010		)
Total assets measured at fair value on a recurring basis	$	2,490,492	$	9,123	$	89,546	$	(35,256	)	$	(8,664	)	$	104,685	$	(141,329	)	$	—	$	—	$	(52,771	)	$	(5,895	)	$	2,449,931	$	(31,010	)
Liabilities:
Annuity account balances(2)	$	107,000	$	—	$	—	$	(3,123	)	$	—		$	—	$	—		$	175	$	7,842	$	—		$	—		$	102,456	$	—
Other liabilities(1)	233,738		25		—		(165,956		)	—			—		—			—		—		—			—			399,669		(165,931		)
Total liabilities measured at fair value on a recurring basis	$	340,738	$	25	$	—	$	(169,079	)	$	—		$	—	$	—		$	175	$	7,842	$	—		$	—		$	502,125	$	(165,931	)

(1)Represents certain freestanding and embedded derivatives.

(2)Represents liabilities related to fixed indexed annuities.

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the six months ended June 30, 2013, for which the Company has used significant unobservable inputs (Level 3):

																													Total
																													Gains (losses)
			Total				Total																						included in
			Realized and Unrealized				Realized and Unrealized																						Earnings
			Gains				Losses																						related to
					Included in					Included in																			Instruments
					Other					Other												Transfers							still held at
	Beginning		Included in		Comprehensive		Included in			Comprehensive												in/out of					Ending		the Reporting
	Balance		Earnings		Income		Earnings			Income			Purchases		Sales			Issuances		Settlements		Level 3		Other			Balance		Date
	(Dollars In Thousands)
Assets:
Fixed maturity securities available-for-sale
Residential mortgage-backed securities	$	4	$	—	$	—	$	—		$	(337	)	$	14,349	$	—		$	—	$	—	$	46	$	—		$	14,062	$	—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	596,143		—		43,756		—			(27,548		)	13,162		(50,386		)	—		—		1,227		42			576,396		—
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
States, municipals, and political subdivisions	4,275		—		—		—			—			—		—			—		—		—		—			4,275		—
Other government-related securities	20,011		—		1		—			(3		)	—		—			—		—		—		(9		)	20,000		—
Corporate bonds	167,892		116		1,011		—			(10,046		)	18,275		(45,184		)	—		—		62,330		501			194,895		—
Total fixed maturity securities - available-for-sale	788,325		116		44,768		—			(37,934		)	45,786		(95,570		)	—		—		63,603		534			809,628		—
Fixed maturity securities - trading
Residential mortgage-backed securities	—		—		—		—			—			1,582		—			—		—		—		—			1,582		—
Commercial mortgage-backed securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Other asset-backed securities	70,535		4,797		—		(2,869		)	—			105,830		(12,776		)	—		—		2,210		1,124			168,851		3,779
U.S. government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
States, municipals and political subdivisions	—		—		—		—			—			3,500		—			—		—		—		—			3,500		—
Other government-related securities	—		—		—		—			—			—		—			—		—		—		—			—		—
Corporate bonds	115		1		—		(23		)	—			—		(17		)	—		—		5,013		3			5,092		6
Total fixed maturity securities - trading	70,650		4,798		—		(2,892		)	—			110,912		(12,793		)	—		—		7,223		1,127			179,025		3,785
Total fixed maturity securities	858,975		4,914		44,768		(2,892		)	(37,934		)	156,698		(108,363		)	—		—		70,826		1,661			988,653		3,785
Equity securities	65,527		—		—		—			—			—		—			—		—		—		—			65,527		—
Other long-term investments(1)	48,655		47,259		—		(13,983		)	—			—		—			—		—		—		(34,093		)	47,838		33,276
Short-term investments	—		—		—		—			—			—		—			—		—		—		—			—		—
Total investments	973,157		52,173		44,768		(16,875		)	(37,934		)	156,698		(108,363		)	—		—		70,826		(32,432		)	1,102,018		37,061
Total assets measured at fair value on a recurring basis	$	973,157	$	52,173	$	44,768	$	(16,875	)	$	(37,934	)	$	156,698	$	(108,363	)	$	—	$	—	$	70,826	$	(32,432	)	$	1,102,018	$	37,061
Liabilities:
Annuity account balances(2)	$	129,468	$	—	$	—	$	(3,686	)	$	—		$	—	$	—		$	201	$	18,741	$	—	$	—		$	114,614	$	—
Other liabilities(1)	611,437		238,210		—		(18,054		)	—			—		—			—		—		—		134,505			256,776		220,156
Total liabilities measured at fair value on a recurring basis	$	740,905	$	238,210	$	—	$	(21,740	)	$	—		$	—	$	—		$	201	$	18,741	$	—	$	134,505		$	371,390	$	220,156

(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

		As of
		June 30, 2014				December 31, 2013
	Fair Value	Carrying				Carrying
	Level	Amounts		Fair Values		Amounts		Fair Values
		(Dollars In Thousands)
Assets:
Mortgage loans on real estate	3	$	5,294,729	$	5,821,043	$	5,493,492	$	5,956,133
Policy loans	3	1,778,379		1,778,379		1,815,744		1,815,744
Fixed maturities, held-to-maturity(1)	3	400,000		451,382		365,000		335,676
Liabilities:
Stable value product account balances	3	$	2,435,995	$	2,456,141	$	2,559,552	$	2,566,209
Annuity account balances	3	11,071,468		10,665,435		11,125,253		10,639,637
Debt:
Non-recourse funding obligations(2)	3	$	1,524,426	$	1,593,615	$	1,495,448	$	1,272,425

Except as noted below, fair values were estimated using quoted market prices.

(1) Security purchased from unconsolidated subsidiary, Red Mountain LLC.

(2) Of this carrying amount $400.0 million, fair value of $427.1 million, as of June 30, 2014, and $365.0 million, fair value of $321.5 million, as of December 31, 2013, relates to non-recourse funding obligations issued by Golden Gate V.