Investments (Tables)

6 Months Ended

Jun. 30, 2014

Summary of Fixed Maturities and Equity Securities Available for Sale by Component

A summary of fixed maturities and equity securities available for sale by cost or amortized cost and estimated fair value at June 30, 2014 is as follows.

Portfolio Composition as of June 30, 2014


	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		% of Total Fixed Maturities*
Fixed maturities available for sale:
Bonds:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	430,771	$	315	$	(32,107	)	$	398,979		3	%
States, municipalities, and political subdivisions		1,277,652		133,288		(1,689	)		1,409,251		10
Foreign governments		38,223		752		(3	)		38,972		0
Corporates		10,358,725		1,359,627		(80,644	)		11,637,708		82
Collateralized debt obligations		65,485		7,944		(7,210	)		66,219		1
Other asset-backed securities		31,131		3,024		(21	)		34,134		0
Redeemable preferred stocks		497,255		52,208		(6,402	)		543,061		4

Total fixed maturities		12,699,242		1,557,158		(128,076	)		14,128,324		100	%

Equity securities		776		651		0			1,427

Total fixed maturities and equity securities	$	12,700,018	$	1,557,809	$	(128,076	)	$	14,129,751

*	At fair value

Schedule of Fixed Maturities by Contractual Maturity

A schedule of fixed maturities by contractual maturity date at June 30, 2014 is shown below on an amortized cost basis and on a fair value basis. Actual maturity dates could differ from contractual maturities due to call or prepayment provisions.


	Amortized Cost		Fair Value
Fixed maturities available for sale:
Due in one year or less	$	216,276	$	222,165
Due from one to five years		384,841		432,168
Due from five to ten years		984,396		1,092,148
Due from ten to twenty years		3,326,103		3,780,778
Due after twenty years		7,688,216		8,497,665
Mortgage-backed and asset-backed securities		99,410		103,400

	$	12,699,242	$	14,128,324

Schedule of Selected Information about Sales of Fixed Maturities

Selected information about sales of fixed maturities is as follows.


For the six months ended June 30,
	2014			2013
Proceeds from sales	$	28,194		$	75,096
Gross realized gains		16,286			4,302
Gross realized losses		(3	)		(776	)

Assets Measured at Fair Value on Recurring Basis

The following table represents assets measured at fair value on a recurring basis.

Fair Value Measurements at June 30, 2014 Using:


Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Fixed maturities available for sale:
Bonds:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	0		$	398,979		$	0		$	398,979
States, municipalities, and political subdivisions		0			1,409,251			0			1,409,251
Foreign governments		0			38,972			0			38,972
Corporates		52,116			11,176,259			409,333			11,637,708
Collateralized debt obligations		0			0			66,219			66,219
Other asset-backed securities		0			34,134			0			34,134
Redeemable preferred stocks		23,373			519,688			0			543,061

Total fixed maturities		75,489			13,577,283			475,552			14,128,324
Equity securities		594			0			833			1,427

Total fixed maturities and equity securities	$	76,083		$	13,577,283		$	476,385		$	14,129,751

Percent of total		0.5	%		96.1	%		3.4	%		100.0	%

Schedule of Changes in Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs

The following table represents an analysis of changes in fair value measurements using significant unobservable inputs (Level 3).

Analysis of Changes in Fair Value Measurements Using

Significant Unobservable Inputs (Level 3)


	For the six months ended June 30, 2014
	Asset- backed securities			Collateralized debt obligations			Corporates ⁽¹⁾			Equities			Total
Balance at January 1, 2014	$	0		$	58,205		$	300,300		$	776		$	359,281
Total gains or losses:
Included in realized gains/losses		0			15,924			1			0			15,925
Included in other comprehensive income		0			8,702			19,513			57			28,272
Acquisitions		0			0			90,680			0			90,680
Sales		0			(16,049	)		(1	)		0			(16,050	)
Amortization		0			2,668			5			0			2,673
Other ⁽²⁾		0			(3,231	)		(1,165	)		0			(4,396	)
Transfers in and/or out of Level 3 ⁽³⁾		0			0			0			0			0

Balance at June 30, 2014	$	0		$	66,219		$	409,333		$	833		$	476,385

Percent of total fixed maturity and equity securities		0.0	%		0.5	%		2.9	%		0.0	%		3.4	%

	For the six months ended June 30, 2013
	Asset- backed securities			Collateralized debt obligations			Corporates ⁽¹⁾			Equities			Total
Balance at January 1, 2013	$	7,981		$	46,571		$	231,072		$	739		$	286,363
Total gains or losses:
Included in realized gains/losses		0			0			0			0			0
Included in other comprehensive income		426			3,446			(16,879	)		37			(12,970	)
Acquisitions		0			0			65,507			0			65,507
Sales		0			0			0			0			0
Amortization		(57	)		2,200			(1	)		0			2,142
Other ⁽²⁾		0			0			(313	)		0			(313	)
Transfers in and/or out of Level 3 ⁽³⁾		(8,350	)		0			(124,212	)		0			(132,562	)

Balance at June 30, 2013	$	0		$	52,217		$	155,174		$	776		$	208,167

Percent of total fixed maturity and equity securities		0.0	%		0.4	%		1.2	%		0.0	%		1.6	%

(1)	Includes redeemable preferred stocks.

(2)	Includes capitalized interest, foreign exchange adjustments, and principal repayments.

(3)	Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.

Schedule of Unrealized Investment Losses by Class of Investment

Unrealized Loss Analysis:

The following table discloses unrealized investment losses by class of investment at June 30, 2014 for the period of time in a loss position. Torchmark considers these investments not to be other-than-temporarily impaired.

Analysis of Gross Unrealized Investment Losses

At June 30, 2014


	Less than Twelve Months					Twelve Months or Longer					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Fixed maturities available for sale:
Bonds:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	2,504	$	(1	)	$	369,854	$	(32,106	)	$	372,358	$	(32,107	)
States, municipalities and political subdivisions		5,096		(73	)		47,379		(1,616	)		52,475		(1,689	)
Foreign governments		901		(2	)		4,589		(1	)		5,490		(3	)
Corporates		197,051		(964	)		1,507,916		(79,680	)		1,704,967		(80,644	)
Collateralized debt obligations		0		0			13,250		(7,210	)		13,250		(7,210	)
Other asset-backed securities		0		0			2,913		(21	)		2,913		(21	)
Redeemable preferred stocks		4,179		(22	)		67,645		(6,380	)		71,824		(6,402	)

Total fixed maturities		209,731		(1,062	)		2,013,546		(127,014	)		2,223,277		(128,076	)
Equity securities		0		0			0		0			0		0

Total fixed maturities and equity securities	$	209,731	$	(1,062	)	$	2,013,546	$	(127,014	)	$	2,223,277	$	(128,076	)

Schedule of Additional Information About Investments in Unrealized Loss Position

Additional information about investments in an unrealized loss position is as follows.


	Less than Twelve Months		Twelve Months or Longer		Total
Number of issues (Cusip numbers) held:
As of June 30, 2014		56		328		384
As of December 31, 2013		462		130		592

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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