OFFSETTING OF ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2015

OFFSETTING OF ASSETS AND LIABILITIES

OFFSETTING OF ASSETS AND LIABILITIES

16.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 9, 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 June 30, 2015 (Successor Company).

					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	$	225,011	$	—	$	225,011	$	53,905	$	77,148	$	93,958
Total derivatives, subject to a master netting arrangement or similar arrangement	225,011		—		225,011		53,905		77,148		93,958
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	2,321		—		2,321		—		—		2,321
Embedded derivative - GMWB	79,376		—		79,376		—		—		79,376
Derivatives with PLC	18,822		—		18,822		—		—		18,822
Other	340		—		340		—		—		340
Total derivatives, not subject to a master netting arrangement or similar arrangement	100,859		—		100,859		—		—		100,859
Total derivatives	325,870		—		325,870		53,905		77,148		194,817
Total Assets	$	325,870	$	—	$	325,870	$	53,905	$	77,148	$	194,817

					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	$	90,805	$	—	$	90,805	$	53,905	$	36,900	$	—
Total derivatives, subject to a master netting arrangement or similar arrangement	90,805		—		90,805		53,905		36,900		—
Derivatives, not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	223,342		—		223,342		—		—		223,342
Funds withheld derivative	96,999		—		96,999						96,999
Embedded derivative - GMWB	22,573		—		22,573		—		—		22,573
Embedded derivative - FIA	85,129		—		85,129		—		—		85,129
Embedded derivative - IUL	11,902		—		11,902		—		—		11,902
Total derivatives, not subject to a master netting arrangement or similar arrangement	439,945		—		439,945		—		—		439,945
Total derivatives	530,750		—		530,750		53,905		36,900		439,945
Repurchase agreements(1)	602,213		—		602,213		—		—		602,213
Total Liabilities	$	1,132,963	$	—	$	1,132,963	$	53,905	$	36,900	$	1,042,158

(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, 2014 (Predecessor Company).

					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	$	225,716	$	—	$	225,716	$	53,612	$	73,935	$	98,169
Total derivatives, subject to a master netting arrangement or similar arrangement	225,716		—		225,716		53,612		73,935		98,169
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	1,051		—		1,051		—		—		1,051
Embedded derivative - GMWB	37,497		—		37,497		—		—		37,497
Derivatives with PLC	6,077		—		6,077		—		—		6,077
Other	360		—		360		—		—		360
Total derivatives, not subject to a master netting arrangement or similar arrangement	44,985		—		44,985		—		—		44,985
Total derivatives	270,701		—		270,701		53,612		73,935		143,154
Total Assets	$	270,701	$	—	$	270,701	$	53,612	$	73,935	$	143,154

					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	$	65,887	$	—	$	65,887	$	53,612	$	12,258	$	17
Total derivatives, subject to a master netting arrangement or similar arrangement	65,887		—		65,887		53,612		12,258		17
Derivatives not subject to a master netting arrangement or similar arrangement
Embedded derivative - Modco reinsurance treaties	311,727		—		311,727		—		—		311,727
Funds withheld derivative	57,305		—		57,305		—		—		57,305
Embedded derivative - GMWB	63,460		—		63,460		—		—		63,460
Embedded derivative - FIA	124,465		—		124,465		—		—		124,465
Embedded derivative - IUL	6,691		—		6,691		—		—		6,691
Total derivatives, not subject to a master netting arrangement or similar arrangement	563,648		—		563,648		—		—		563,648
Total derivatives	629,535		—		629,535		53,612		12,258		563,665
Repurchase agreements(1)	50,000		—		50,000		—		—		50,000
Total Liabilities	$	679,535	$	—	$	679,535	$	53,612	$	12,258	$	613,665

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