10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to               

Commission file number 333-1173

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

COLORADO	84-0467907
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

8515 EAST ORCHARD ROAD, GREENWOOD VILLAGE, CO 80111

(Address of principal executive offices)

(303) 737-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x         No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x         No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined in Rule 12b-2 of the Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Act.

Yes ¨         No x

As of November 1, 2016, 7,232,986 shares of the registrant’s common stock were outstanding, all of which were owned by the registrant’s parent company.

Table of Contents

			Page
			Number
Part I	Financial Information
	Item 1	Interim Financial Statements	3
		Condensed Consolidated Balance Sheets at September 30, 2016, and December 31, 2015 (Unaudited)	3
		Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2016, and 2015 (Unaudited)	5
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2016, and 2015 (Unaudited)	6
		Condensed Consolidated Statements of Stockholder’s Equity for the Nine Months Ended September 30, 2016, and 2015 (Unaudited)	7
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016, and 2015 (Unaudited)	8
		Notes to Condensed Consolidated Financial Statements (Unaudited)	10
		Note 1 - Organization and Basis of Presentation	10
		Note 2 - Acquisition	10
		Note 3 - Application of Recent Accounting Pronouncements	11
		Note 4 - Dividends	13
		Note 5 - Summary of Investments	13
		Note 6 - Derivative Financial Instruments	18
		Note 7 - Summary of Offsetting Assets and Liabilities	24
		Note 8 - Fair Value Measurements	25
		Note 9 - Other Comprehensive Income	32
		Note 10 - Employee Benefit Plans	37
		Note 11 - Income Taxes	38
		Note 12 - Segment Information	38
		Note 13 - Commitments and Contingencies	41
		Note 14 - Subsequent Events	42
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	58
	Item 4	Controls and Procedures	60
Part II	Other Information		61
	Item 1	Legal Proceedings	61
	Item 1A	Risk Factors	61
	Item 6	Exhibits	63
		Signature	63

2

Part I     Financial Information

Item1.    Interim Financial Statements

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Balance Sheets

September 30, 2016, and December 31, 2015

(In Thousands, Except Share Amounts)

(Unaudited)

	September 30, 2016		December 31, 2015
Assets
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $19,455,887 and $20,007,462)	$	20,826,141	$	20,531,627
Fixed maturities, held-for-trading, at fair value (amortized cost $392,407 and $612,899)	398,880		615,839
Mortgage loans on real estate (net of allowances of $2,882 and $2,890)	3,568,114		3,247,704
Policy loans	4,056,284		4,092,661
Short-term investments (amortized cost $2,314,307 and $267,026)	2,314,307		267,026
Limited partnership and other corporation interests	35,935		40,980
Other investments	15,023		15,189
Total investments	31,214,684		28,811,026
Other assets:
Cash	53,291		34,362
Reinsurance receivable	605,419		604,946
Deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”)	322,671		414,143
Investment income due and accrued	304,924		283,183
Collateral under securities lending agreements	99,404		—
Due from parent and affiliates	80,882		62,596
Goodwill	137,683		137,683
Other intangible assets	20,940		23,819
Other assets	1,063,101		874,918
Assets of discontinued operations	18,914		21,910
Separate account assets	27,775,827		26,631,193
Total assets	$	61,697,740	$	57,899,779

See notes to condensed consolidated financial statements. (Continued)

3

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Balance Sheets

September 30, 2016, and December 31, 2015

(In Thousands, Except Share Amounts)

(Unaudited)

	September 30, 2016		December 31, 2015
Liabilities and stockholder’s equity
Policy benefit liabilities:
Future policy benefits	$	28,728,131	$	27,110,981
Policy and contract claims	379,670		354,899
Policyholders’ funds	254,712		299,577
Provision for policyholders’ dividends	53,429		55,481
Undistributed earnings on participating business	21,154		17,024
Total policy benefit liabilities	29,437,096		27,837,962
General liabilities:
Due to parent and affiliates	538,672		540,310
Commercial paper	99,971		93,371
Payable under securities lending agreements	99,404		—
Deferred income tax liabilities, net	400,844		137,116
Other liabilities	935,419		755,651
Liabilities of discontinued operations	18,914		21,910
Separate account liabilities	27,775,827		26,631,193
Total liabilities	59,306,147		56,017,513
Commitments and contingencies (See Note 13)
Stockholder’s equity:
Preferred stock, $1 par value, 50,000,000 shares authorized; none issued and outstanding	—		—
Common stock, $1 par value, 50,000,000 shares authorized; 7,232,986 shares issued and outstanding	7,233		7,233
Additional paid-in capital	842,979		840,874
Accumulated other comprehensive income	653,912		233,438
Retained earnings	887,469		800,721
Total stockholder’s equity	2,391,593		1,882,266
Total liabilities and stockholder’s equity	$	61,697,740	$	57,899,779

See notes to condensed consolidated financial statements. (Concluded)

4

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Statements of Income

Three and Nine Months Ended September 30, 2016, and 2015

(In Thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues:
Premium income	$	146,100		$	154,017		$	377,845		$	374,437
Fee income	246,413			225,242			709,844			688,020
Other revenue	3,228			1,820			9,747			5,460
Net investment income	291,539			363,057			979,080			942,082
Realized investment gains (losses), net:
Total other-than-temporary gains (losses), net	—			(363		)	(536		)	(921		)
Other-than-temporary (gains) losses, net, transferred to other comprehensive income (loss)	—			—			—			108
Other realized investment gains (losses), net	33,374			22,914			107,193			57,423
Total realized investment gains (losses), net	33,374			22,551			106,657			56,610
Total revenues	720,654			766,687			2,183,173			2,066,609
Benefits and expenses:
Life and other policy benefits	172,855			176,926			529,985			486,950
Increase (decrease) in future policy benefits	7,540			20,226			(75,221		)	(5,482		)
Interest credited or paid to contractholders	154,248			147,177			455,018			433,829
Provision for policyholders’ share of (losses) earnings on participating business	(106		)	44			(525		)	(457		)
Dividends to policyholders	12,324			13,241			37,619			42,763
Total benefits	346,861			357,614			946,876			957,603
General insurance expenses	307,329			263,608			878,367			776,735
Amortization of DAC and VOBA	3,504			37,538			40,397			65,245
Interest expense	7,648			9,646			26,051			28,928
Total benefits and expenses	665,342			668,406			1,891,691			1,828,511
Income before income taxes	55,312			98,281			291,482			238,098
Income tax expense	15,295			30,708			79,043			78,926
Net income	$	40,017		$	67,573		$	212,439		$	159,172

See notes to condensed consolidated financial statements.

5

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2016, and 2015

(In Thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income	$	40,017		$	67,573		$	212,439		$	159,172
Components of other comprehensive income (loss)
Unrealized holding gains (losses), net, arising on available-for-sale fixed maturity investments	55,849			(5,568		)	895,589			(318,529		)
Unrealized holding gains (losses), net, arising on cash flow hedges	(7,805		)	14,804			(3,307		)	15,326
Reclassification adjustment for (gains) losses, net, realized in net income	(10,284		)	(8,036		)	(61,375		)	(43,511		)
Net unrealized gains (losses) related to investments	37,760			1,200			830,907			(346,714		)
Future policy benefits, DAC and VOBA adjustments	(18,214		)	(2,383		)	(190,985		)	42,075
Employee benefit plan adjustment	2,494			3,098			6,962			8,635
Other comprehensive income (loss) before income taxes	22,040			1,915			646,884			(296,004		)
Income tax expense (benefit) related to items of other comprehensive income (loss)	7,715			669			226,410			(103,603		)
Other comprehensive income (loss)(1)	14,325			1,246			420,474			(192,401		)
Total comprehensive income (loss)	$	54,342		$	68,819		$	632,913		$	(33,229	)

⁽¹⁾ Other comprehensive income (loss) includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(959) and $(1,979) for the three months ended September 30, 2016, and 2015, respectively, and $(5,326) and $(3,208) for the nine months ended September 30, 2016, and 2015, respectively.

See notes to condensed consolidated financial statements.

6

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Statements of Stockholder’s Equity

Nine Months Ended September 30, 2016, and 2015

(In Thousands)

(Unaudited)

	Nine Months Ended September 30, 2016
	Common stock		Additional paid-in capital		Accumulated  other comprehensive income		Retained earnings			Total
Balances, January 1, 2016	$	7,233	$	840,874	$	233,438	$	800,721		$	1,882,266
Net income	—		—		—		212,439			212,439
Other comprehensive income, net of income taxes	—		—		420,474		—			420,474
Dividends	—		—		—		(125,691		)	(125,691		)
Capital contribution - stock-based compensation	—		1,637		—		—			1,637
Income tax benefit on stock-based compensation	—		468		—		—			468
Balances, September 30, 2016	$	7,233	$	842,979	$	653,912	$	887,469		$	2,391,593

	Nine Months Ended September 30, 2015
	Common stock		Additional paid-in capital		Accumulated other comprehensive income			Retained earnings			Total
Balances, January 1, 2015	$	7,032	$	777,664	$	603,018		$	749,799		$	2,137,513
Net income	—		—		—			159,172			159,172
Other comprehensive loss, net of income taxes	—		—		(192,401		)	—			(192,401		)
Dividends	—		—		—			(139,711		)	(139,711		)
Capital contribution - stock-based compensation	—		1,247		—			—			1,247
Income tax benefit on stock-based compensation	—		1,031		—			—			1,031
Balances, September 30, 2015	$	7,032	$	779,942	$	410,617		$	769,260		$	1,966,851

See notes to condensed consolidated financial statements.

7

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2016, and 2015

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
Net cash provided by operating activities	$	559,179		$	575,631
Cash flows from investing activities:
Proceeds from sales, maturities and redemptions of investments:
Fixed maturities, available-for-sale	4,829,009			4,196,254
Mortgage loans on real estate	310,664			277,454
Limited partnership interests, other corporation interests and other investments	9,386			4,001
Purchases of investments:
Fixed maturities, available-for-sale	(4,138,915		)	(2,791,939		)
Mortgage loans on real estate	(626,431		)	(233,924		)
Limited partnership interests, other corporation interests and other investments	(5,491		)	(1,496		)
Net change in short-term investments	(1,988,191		)	(2,198,699		)
Net change in policy loans	5,980			(7,481		)
Purchases of furniture, equipment and software	(33,405		)	(60,321		)
Net cash used in investing activities	(1,637,394		)	(816,151		)
Cash flows from financing activities:
Contract deposits	2,756,047			1,760,310
Contract withdrawals	(1,500,963		)	(1,308,587		)
Net change in due to/from parent and affiliates	(19,924		)	(15,686		)
Dividends paid	(125,691		)	(139,711		)
Payments for and interest paid on financing element derivatives, net	(5,281		)	(8,027		)
Contingent consideration	(14,233		)	—
Net change in commercial paper borrowings	6,600			(2,305		)
Net change in book overdrafts	121			(1,164		)
Income tax benefit on share-based compensation	468			1,031
Net cash provided by financing activities	1,097,144			285,861
Net increase in cash	18,929			45,341
Cash, beginning of year	34,362			12,775
Cash, end of period	$	53,291		$	58,116

See notes to condensed consolidated financial statements. (Continued)

8

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2016, and 2015

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
Supplemental disclosures of cash flow information:
Net cash paid during the year for:
Income taxes	$	(24,118	)	$	(29,791	)
Interest	(21,685		)	(18,697		)
Non-cash investing and financing transactions during the years:
Share-based compensation expense	$	1,637		$	1,247

See notes to condensed consolidated financial statements. (Concluded)

9

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

1.  Organization and Basis of Presentation

Organization

Great-West Life & Annuity Insurance Company (“GWLA”) and its subsidiaries (collectively, the “Company”) is a direct wholly-owned subsidiary of GWL&A Financial Inc. (“GWL&A Financial”), a holding company.  GWL&A Financial is a direct wholly-owned subsidiary of Great-West Lifeco U.S. Inc. (“Lifeco U.S.”) and an indirect wholly-owned subsidiary of Great-West Lifeco Inc. (“Lifeco”), a Canadian holding company.  The Company offers a wide range of life insurance, retirement, and investment products to individuals, businesses, and other private and public organizations throughout the United States. The Company is an insurance company domiciled in the State of Colorado and is subject to regulation by the Colorado Division of Insurance.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries over which it exercises control and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2015, which was derived from the Company’s audited consolidated financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016, have been prepared in accordance with the instructions for Form 10-Q.  In compliance with those instructions, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  As such, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

In the opinion of management, these statements include all normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of September 30, 2016, and for all periods presented. The condensed consolidated results of operations and condensed consolidated statement of cash flows for the nine months ended September 30, 2016, are not necessarily indicative of the results or cash flows expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

2.  Acquisitions

Putnam Retirement Business

Description of transaction

On January 1, 2015, the Company acquired the retirement business of Putnam Investments, LLC (“Putnam”), an affiliate of the Company. The transaction was accounted for as a combination between entities under common control. As such, the assets and liabilities acquired from Putnam were recorded at historical cost as of January 1, 2015. In exchange for cash paid in the amount of $4,114, the Company acquired $11,501 of other assets, assumed $7,717 of other liabilities, and recognized a dividend of $330.

10

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

3.  Application of Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis. The update primarily amends the criteria used to evaluate whether certain variable interest entities (“VIEs”) should be consolidated. The update also modifies the criteria used to determine whether partnerships and similar entities are VIEs. The update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted, including in the interim periods. The adoption of this ASU did not have a material effect on the Company’s consolidated financial position or results of operations; however, the Company has additional investments that meet the definition of VIE under this update.  As such, the guidance was retrospectively applied and the December 31, 2015 carrying value and maximum exposure to loss in relation to the activities of the VIEs disclosed in Note 5 includes an additional $35,776 to conform to the current period presentation.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The update requires the Company to determine if the cloud computing arrangement contains a software license and if so, apply the accounting requirements for other intangible assets. The update also supersedes the requirement to apply lease accounting requirements by analogy for lease classification. If the arrangement is not a software license, then the Company applies accounting requirements for a service requirement. The update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted. The adoption of this ASU did not have a material effect on the Company’s consolidated financial position or results of operations.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”).  The update required assets being valued using net asset value (“NAV”) as a practical expedient to be excluded from the fair value hierarchy table.  The update is effective for interim and annual periods beginning after December 15, 2015.  The adoption of this ASU did not have an impact on the Company’s consolidated financial position or results of operations; however, the Company has investments in separate accounts for which fair value is estimated using NAV as a practical expedient.  As such, for the period ended September 30, 2016, the Company has retroactively applied this guidance as required by the ASU and removed $533,961 from the December 31, 2015, Level 2 investments in separate accounts in the fair value hierarchy table in Note 8 to conform to current period presentation. 

Future adoption of new accounting pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The update outlines a comprehensive accounting model for revenue arising from customer contracts and supersedes most current revenue recognition guidance, including industry-specific guidance. While the update does not apply to insurance contracts within the scope of Topic 944, it does apply to other fee income earned by the Company which includes fees from assets under management, assets under administration, shareholder servicing, administration and record-keeping services, and investment advisory services. The core principle of the model requires that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The update also requires increased disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The FASB has also issued several updates to ASU 2014-09 including ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (improving theoperability and understandability of the implementation guidance on principal versus agent considerations), ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (reducing thecost and complexity of applying the guidance on identifying promised goods or services and to improve the operability and understandability of the licensing implementation guidance), and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients (amending the guidance on collectability, non cash consideration, presentation of sales tax, and transition). In adopting ASU 2014-09, the Company may use either a full retrospective or a modified retrospective approach. The update is effective for public business entities for interim and annual periods beginning after December 15, 2017. Early adoption is permitted as of accounting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts. The update requires that all years in the claims development table that precede the current reporting period and the related disclosure

11

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

about the history of claims duration should be presented as required supplementary information.  The update also includes a disclosure objective of providing information about claim frequency along with a description of methodologies for determining claim frequency information, unless it is impracticable to do so.  The update is effective for annual reporting periods beginning after December 15, 2015, and for interim reporting periods within annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments by requiring equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income, simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, use of exit price notion when measuring the fair value of financial instruments for disclosure purposes, separate presentation of financial assets and liabilities by measurement category and form of financial assets (i.e. securities or loans and receivables) on the balance sheet or notes to the financial statements, eliminating the requirement to disclose the method and significant assumptions used to estimate fair value of a financial instrument measured at amortized cost on the balance sheet, requiring entities to present separately in other comprehensive income the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (i.e. “own credit”) when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, and clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.  The update iseffective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The ASU also permits early adoption of the own credit provision.  The Company is currently evaluating the impact of this update on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. This ASU is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivative Contract Novations. The amendments clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in critical term of the hedging relationship. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures. The amendments simplify the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Account. The amendments simplify several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and cash flow statements. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard amends guidance on the impairment of financial instruments by adding an impairment model that is based on expected losses rather than incurred losses and is intended to result in more timely recognition of losses. The standard also simplifies the accounting by decreasing the number of credit impairment models that an entity can use to account for debt instruments. The update is effective for fiscal years and interim periods within those beginning after

12

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The standard amends the guidance on the classification of certain cash receipts and payments on the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions from equity method investees, beneficial interests in securitized transactions, and separately identifiable cash flows and application of the predominance principle. The update is effective for fiscal years and interim periods within those beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

4.  Dividends

The maximum amount of dividends, which can be paid to stockholders by insurance companies domiciled in the State of Colorado, is subject to restrictions relating to statutory surplus and statutory net gain from operations.  Prior to the payment of any dividends, the Company seeks approval from the Colorado Insurance Commissioner.  During the nine months ended September 30, 2016, and 2015, the Company paid dividends of $125,691 and $139,711, respectively, to its parent, GWL&A Financial.

5.  Summary of Investments

The following tables summarize fixed maturity investments classified as available-for-sale and the non-credit-related component of other-than-temporary impairments (“OTTI”) in accumulated other comprehensive income (loss) (“AOCI”): 

	September 30, 2016
	Amortized		Gross unrealized		Gross unrealized		Estimated fair value		OTTI (gain) loss
Fixed maturities:	cost		gains		losses		and carrying value		included in AOCI (1)
U.S. government direct obligations and U.S. agencies	$	1,046,224	$	81,922	$	144	$	1,128,002	$	—
Obligations of U.S. states and their subdivisions	1,928,679		322,860		329		2,251,210		—
Foreign government securities	2,167		—		3		2,164		—
Corporate debt securities (2)	13,618,838		913,997		128,748		14,404,087		(1,650		)
Asset-backed securities	1,473,550		133,681		10,569		1,596,662		(77,118		)
Residential mortgage-backed securities	93,656		3,389		328		96,717		(33		)
Commercial mortgage-backed securities	1,162,680		56,854		2,456		1,217,078		—
Collateralized debt obligations	130,093		166		38		130,221		—
Total fixed maturities	$	19,455,887	$	1,512,869	$	142,615	$	20,826,141	$	(78,801	)

⁽¹⁾  Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses.  OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

⁽²⁾ Includes perpetual debt investments with amortized cost of $135,187 and estimated fair value of $111,978.

13

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	December 31, 2015
	Amortized		Gross unrealized		Gross unrealized		Estimated fair value		OTTI (gain) loss
Fixed maturities:	cost		gains		losses		and carrying value		included in AOCI (1)
U.S. government direct obligations and U.S. agencies	$	3,291,167	$	55,193	$	4,608	$	3,341,752	$	—
Obligations of U.S. states and their subdivisions	1,988,214		238,862		7,903		2,219,173		50
Foreign government securities	2,291		—		5		2,286		—
Corporate debt securities (2)	12,388,886		437,207		320,381		12,505,712		(1,810		)
Asset-backed securities	1,196,326		128,406		13,362		1,311,370		(86,474		)
Residential mortgage-backed securities	122,146		4,734		1,508		125,372		(123		)
Commercial mortgage-backed securities	1,009,320		19,117		11,529		1,016,908		—
Collateralized debt obligations	9,112		—		58		9,054		—
Total fixed maturities	$	20,007,462	$	883,519	$	359,354	$	20,531,627	$	(88,357	)

⁽¹⁾  Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses.  OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

⁽²⁾ Includes perpetual debt investments with amortized cost of $149,062 and estimated fair value of $116,423.

See Note 8 for additional discussion regarding fair value measurements.

The amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale, based on estimated cash flows, are shown in the table below.  Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 

	September 30, 2016
	Amortized cost		Estimated fair value
Maturing in one year or less	$	654,368	$	680,991
Maturing after one year through five years	3,780,675		4,030,915
Maturing after five years through ten years	6,312,627		6,719,852
Maturing after ten years	5,138,873		5,613,359
Mortgage-backed and asset-backed securities	3,569,344		3,781,024
Total fixed maturities	$	19,455,887	$	20,826,141

Mortgage-backed (commercial and residential) and asset-backed securities include those issued by the U.S. government and U.S. agencies.

The following table summarizes information regarding the sales of securities classified as available-for-sale: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Proceeds from sales	$	421,245	$	192,100	$	3,777,445	$	3,187,977
Gross realized gains from sales	8,487		6,632		55,154		38,567
Gross realized losses from sales	24		478		170		802

14

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Mortgage loans on real estate — The following table summarizes the carrying value of the mortgage loan portfolio by component:  

	September 30, 2016			December 31, 2015
Principal	$	3,565,454		$	3,242,627
Unamortized premium (discount) and fees, net	6,530			7,967
Foreign exchange translation	(988		)	—
Mortgage provision allowance	(2,882		)	(2,890		)
Total mortgage loans	$	3,568,114		$	3,247,704

The following table summarizes the recorded investment of the mortgage loan portfolio by risk assessment category as of September 30, 2016, and December 31, 2015, respectively. 

	September 30, 2016		December 31, 2015
Performing	$	3,569,531	$	3,249,129
Non-performing	1,465		1,465
Total	$	3,570,996	$	3,250,594

The following table summarizes activity in the mortgage provision allowance:

	Nine Months Ended September 30, 2016			Year Ended December 31, 2015
	Commercial mortgages			Commercial mortgages
Beginning balance	$	2,890		$	2,890
Provision increases	536			—
Provision decreases	(544		)	—
Ending balance	$	2,882		$	2,890
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	$	536		$	—
Collectively evaluated for impairment	2,346			2,890
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$	3,570,996		$	3,250,594
Individually evaluated for impairment	4,039			14,031
Collectively evaluated for impairment	3,566,957			3,236,563

Limited partnership and other corporationinterests — At September 30, 2016, and December 31, 2015, the Company had $35,935 and $40,980, respectively, invested in limited partnership and other corporation interests. Limited partnership interests represent the Company’s minority ownership interests in pooled investment funds that primarily make private equity investments across diverse industries and geographical focuses. The Company has determined its interest in each limited partnership to be considered a variable interest entity (“VIE”). Consolidation is not required as the Company is not deemed to be the primary beneficiary of the VIEs.

The carrying value and maximum exposure to loss in relation to the activities of the VIEs was $33,484 and $38,504 at September 30, 2016, and December 31, 2015, respectively.

Special deposits — The Company had securities on deposit with government authorities as required by certain insurance laws with fair values of $8,146 and $14,000 at September 30, 2016, and December 31, 2015, respectively.

15

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Securities lending — Securities with a cost or amortized cost of $156,098 and estimated fair values of $160,351 were on loan under the program at September 30, 2016. There were no securities on loan at December 31, 2015.  The Company received cash of $99,404 and securities with a fair value of $66,259 as collateral at September 30, 2016. The Company bears the risk of any deficiency in the amount of collateral available for return to a borrower due to a loss in an approved investment.

Under the securities lending program the collateral pledged is, by definition, the securities loaned against the cash borrowed. The following table summarizes the cash collateral liability under the securities lending program, by class of collateral pledged:

	September 30, 2016		December 31, 2015
Cash collateral liability by class of loaned security
U.S. government direct obligations and U.S. agencies	$	6,220	$	—
Foreign government securities	1,063		—
Corporate debt securities	92,121		—
Total	$	99,404	$	—

The Company’s securities lending agreements are open agreements meaning the borrower can return and the Company can recall the loaned securities at any time. The assets and liabilities associated with securities lending program are not subject to master netting arrangements and are not offset in the condensed consolidated balance sheets.

Unrealized losses on fixed maturity investments classified as available-for-sale — The following tables summarize unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment:

	September 30, 2016
	Less than twelve months				Twelve months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Fixed maturities:	fair value		loss and OTTI		fair value		loss and OTTI		fair value		loss and OTTI
U.S. government direct obligations and U.S. agencies	$	15,444	$	21	$	11,155	$	123	$	26,599	$	144
Obligations of U.S. states and their subdivisions	8,841		110		10,656		219		19,497		329
Foreign government securities	2,164		3		—		—		2,164		3
Corporate debt securities	835,440		26,089		876,692		102,659		1,712,132		128,748
Asset-backed securities	338,576		3,289		208,678		7,280		547,254		10,569
Residential mortgage-backed securities	7,145		4		16,106		324		23,251		328
Commercial mortgage-backed securities	113,741		889		27,563		1,567		141,304		2,456
Collateralized debt obligations	45,552		38		—		—		45,552		38
Total fixed maturities	$	1,366,903	$	30,443	$	1,150,850	$	112,172	$	2,517,753	$	142,615
Total number of securities in an unrealized loss position			136				124				260

16

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	December 31, 2015
	Less than twelve months				Twelve months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Fixed maturities:	fair value		loss and OTTI		fair value		loss and OTTI		fair value		loss and OTTI
U.S. government direct obligations and U.S. agencies	$	1,357,822	$	4,101	$	23,604	$	507	$	1,381,426	$	4,608
Obligations of U.S. states and their subdivisions	267,581		7,903		—		—		267,581		7,903
Foreign government securities	2,286		5		—		—		2,286		5
Corporate debt securities	4,412,965		202,874		552,791		117,507		4,965,756		320,381
Asset-backed securities	247,082		4,372		182,404		8,990		429,486		13,362
Residential mortgage-backed securities	—		—		18,625		1,508		18,625		1,508
Commercial mortgage-backed securities	429,175		11,154		44,498		375		473,673		11,529
Collateralized debt obligations	9,054		58		—		—		9,054		58
Total fixed maturities	$	6,725,965	$	230,467	$	821,922	$	128,887	$	7,547,887	$	359,354
Total number of securities in an unrealized loss position			558				106				664

Fixed maturity investments — Total unrealized losses and OTTI decreased by $216,739, or 60%, from December 31, 2015, to September 30, 2016. The majority, or $200,024, of the decrease was in the less than twelve months category. The overall decrease in unrealized losses was across all asset classes and reflects lower interest rates at September 30, 2016, compared to December 31, 2015, resulting in generally higher valuations of these fixed maturity securities.

Total unrealized losses greater than twelve months decreased by $16,715 from December 31, 2015, to September 30, 2016.  Corporate debt securities account for 92%, or $102,659, of the unrealized losses and OTTI greater than twelve months at September 30, 2016.  Non-investment grade corporate debt securities account for $13,441 of the unrealized losses and OTTI greater than twelve months, and $7,572 of the losses are on perpetual debt investments issued by investment grade rated banks in the United Kingdom.  Management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings.

Asset-backed securities account for 7% of the unrealized losses and OTTI greater than twelve months at September 30, 2016.  The present value of the cash flows expected to be collected is not less than amortized cost and management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings.

17

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Other-than-temporary impairment recognition — The OTTI on fixed maturity securities where the loss portion is bifurcated and the credit related component is recognized in realized investment gains (losses) is summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Beginning balance	$	94,687		$	106,913		$	102,343		$	119,532
Initial impairments - credit loss on securities not previously impaired	—			—			—			450
Reductions:
Due to sales, maturities or payoffs during the period	—			(521		)	—			(521		)
Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(4,405		)	(13,057		)	(12,061		)	(26,126		)
Ending balance	$	90,282		$	93,335		$	90,282		$	93,335

6.  Derivative Financial Instruments

Derivative transactions are generally entered into pursuant to International Swaps and Derivatives Association (“ISDA”) Master Agreements or Master Securities Forward Transaction Agreements (“MSFTA”) with approved counterparties that provide for a single net payment to be made by one party to the other on a daily basis, periodic payment dates, or at the due date, expiration, or termination of the agreement.

The ISDA Master Agreements contain provisions that would allow the counterparties to require immediate settlement of all derivative instruments in a net liability position if the Company were to default on any debt obligations over a certain threshold.  The MSFTA contain provisions which do not stipulate a threshold for default and only apply to debt obligations between the Company and the specific counterparty.  The aggregate fair value, inclusive of accrued income and expense, of derivative instruments with credit-risk-related contingent features that were in a net liability position was $69,984 and $76,107 as of September 30, 2016, and December 31, 2015, respectively.  The Company had pledged collateral related to these derivatives of $28,526 and $45,940 as of September 30, 2016, and December 31, 2015, respectively, in the normal course of business.  If the credit-risk-related contingent features were triggered on September 30, 2016, the fair value of assets that could be required to settle the derivatives in a net liability position was $41,458.

At September 30, 2016, and December 31, 2015, the Company had pledged $28,526 and $50,924 of unrestricted cash collateral to counterparties in the normal course of business, while other counterparties had pledged $80,630 and $19,060 of unrestricted cash collateral to the Company to satisfy collateral netting agreements, respectively.

At September 30, 2016, the Company estimated $7,972 of net derivative gains related to cash flow hedges included in AOCI will be reclassified into net income within the next twelve months. Gains and losses included in AOCI are reclassified into net income when the hedged item affects earnings.

Types of derivative instruments and derivative strategies

Interest rate contracts

Cash flow hedges

Interest rate swap agreements are used to convert the interest rate on certain debt security investments and debt obligations from a floating rate to a fixed rate.  Interest rate futures are used to manage the interest rate risks of forecasted acquisitions of fixed rate maturity investments and are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities.

18

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Fair value hedges

Interest rate swap agreements are used to convert the interest rate on certain debt securities from a fixed rate to a floating rate to manage the interest rate risk of the change in the fair value of certain fixed rate maturity investments.

Not designated as hedging instruments

The Company enters into certain transactions in which derivatives are hedging an economic risk but hedge accounting is not elected.  These derivative instruments include:  exchange-traded interest rate swap futures, over-the-counter (“OTC”) interest rate swaptions, OTC interest rate swaps, exchange-traded Eurodollar interest rate futures, and treasury interest rate futures.  Certain of the Company’s OTC derivatives are cleared and settled through a central clearing counterparty while others are bilateral contracts between the Company and a counterparty.

The derivative instruments mentioned above are economic hedges and used to manage risk.  These transactions are used to offset changes in liabilities including those in variable annuity products, hedge the economic effect of a large increase in interest rates, manage the potential variability in future interest payments due to a change in credited interest rates and the related change in cash flows due to increased surrenders, and manage interest rate risks of forecasted acquisitions of fixed rate maturity investments and forecasted liability pricing.

Cross-currency contracts

Cross-currency swaps are used to manage the foreign currency exchange rate risk associated with investments denominated in other than U.S. dollars.  The Company uses cross-currency swaps to convert interest and principal payments on foreign denominated debt instruments into U.S. dollars.  Cross-currency swaps may be designated as cash flow hedges; however, hedge accounting is not always elected.

Equity contracts

The Company uses futures on equity indices to offset changes in guaranteed lifetime withdrawal benefit liabilities; however, hedge accounting is not elected.

Other forward contracts

The Company uses forward settling to be announced (“TBA”) securities to gain exposure to the investment risk and return of agency mortgage-backed securities (pass-throughs). These transactions enhance the return on the Company’s investment portfolio and provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual agency mortgage-backed pools.  As the Company does not regularly accept delivery of such securities, they are accounted for as derivatives but hedge accounting is not elected. 

19

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The following tables summarize the notional amount and fair value of derivative financial instruments, excluding embedded derivatives:

	September 30, 2016
			Net derivatives			Asset derivatives		Liability derivatives
	Notional amount		Fair value			Fair value (1)		Fair value (1)
Hedge designation/derivative type:
Derivatives designated as hedges:
Cash flow hedges:
Interest rate swaps	$	419,800	$	(13,852	)	$	13,490	$	27,342
Cross-currency swaps	561,467		46,194			51,284		5,090
Total cash flow hedges	981,267		32,342			64,774		32,432
Total derivatives designated as hedges	981,267		32,342			64,774		32,432
Derivatives not designated as hedges:
Interest rate swaps	480,100		22,921			32,982		10,061
Futures on equity indices	24,260		—			—		—
Interest rate futures	107,400		—			—		—
Interest rate swaptions	166,664		191			191		—
Other forward contracts	2,437,760		7,268			7,891		623
Cross-currency swaps	662,935		14,700			41,528		26,828
Total derivatives not designated as hedges	3,879,119		45,080			82,592		37,512
Total derivative financial instruments	$	4,860,386	$	77,422		$	147,366	$	69,944

⁽¹⁾ The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets.

20

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	December 31, 2015
			Net derivatives			Asset derivatives		Liability derivatives
	Notional amount		Fair value			Fair value (1)		Fair value (1)
Hedge designation/derivative type:
Derivatives designated as hedges:
Cash flow hedges:
Interest rate swaps	$	143,800	$	11,843		$	11,843	$	—
Cross-currency swaps	380,873		28,714			28,736		22
Total cash flow hedges	524,673		40,557			40,579		22
Total derivatives designated as hedges	524,673		40,557			40,579		22
Derivatives not designated as hedges:
Interest rate swaps	303,600		3,240			8,295		5,055
Futures on equity indices	29,310		—			—		—
Interest rate futures	117,200		—			—		—
Interest rate swaptions	151,204		189			189		—
Cross-currency swaps	662,935		(51,759		)	19,537		71,296
Total derivatives not designated as hedges	1,264,249		(48,330		)	28,021		76,351
Total derivative financial instruments	$	1,788,922	$	(7,773	)	$	68,600	$	76,373

⁽¹⁾ The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets.

Notional amounts are used to express the extent of the Company’s involvement in derivative transactions and represent a standard measurement of the volume of its derivative activity.  Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received. The average notional outstanding during the nine months endedSeptember 30, 2016, was $752,800, $1,110,757, $149,391, $153,961, and $2,645,834 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively. The average notional outstanding during the year ended December 31, 2015, was $443,589, $937,242, $111,801, $212,299, and $5,014,845 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively.

The following tables present the effect of derivative instruments in the condensed consolidated statements of income reported by cash flow hedges, fair value hedges, and economic hedges, excluding embedded derivatives: 

	Gain (loss) recognized in OCI on derivatives (Effective portion)						Gain (loss) reclassified from OCI into net income (Effective portion)
	Three Months Ended September 30,						Three Months Ended September 30,
	2016			2015			2016			2015
Cash flow hedges:
Interest rate swaps	$	(401	)	$	(937	)	$	1,335		$	1,490		(A)
Interest rate swaps	(4,284		)	—			(1,092		)	—			(B)
Cross-currency swaps	(3,120		)	15,741			1,576			630			(A)
Interest rate futures	—			—			—			(21		)	(A)
Total cash flow hedges	$	(7,805	)	$	14,804		$	1,819		$	2,099

(A) Net investment income.

(B) Interest expense.

21

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Gain (loss) recognized in OCI on derivatives (Effective portion)						Gain (loss) reclassified from OCI into net income (Effective portion)
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cash flow hedges:
Interest rate swaps	$	4,098		$	(311	)	$	4,166		$	5,183		(A)
Interest rate swaps	(29,017		)	—			(1,675		)	—			(B)
Cross-currency swaps	21,612			15,637			3,777			1,329			(A)
Interest rate futures	—			—			—			(64		)	(A)
Total cash flow hedges	$	(3,307	)	$	15,326		$	6,268		$	6,448

(A) Net investment income.

(B) Interest expense.

	Gain (loss) on derivatives recognized in net income						Gain (loss) on hedged assets recognized in net income
	Three Months Ended September 30,						Three Months Ended September 30,
	2016		2015				2016		2015
Fair value hedges:
Interest rate swaps	$	—	$	(620	)	(A)	$	—	$	—
Interest rate swaps	—		323			(B)	—		—
Items hedged in interest rate swaps	—		—				—		623			(A)
Items hedged in interest rate swaps	—		—				—		(323		)	(B)
Total fair value hedges	$	—	$	(297	)		$	—	$	300

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income						Gain (loss) on hedged assets recognized in net income
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016		2015				2016		2015
Fair value hedges:
Interest rate swaps	$	—	$	(1,489	)	(A)	$	—	$	—
Interest rate swaps	—		765			(B)	—		—
Items hedged in interest rate swaps	—		—				—		1,493			(A)
Items hedged in interest rate swaps	—		—				—		(765		)	(B)
Total fair value hedges	$	—	$	(724	)		$	—	$	728

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

22

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Gain (loss) on derivatives recognized in net income
	Three Months Ended September 30,
	2016				2015
Derivatives not designated as hedging instruments:
Futures on equity indices	$	510		(A)	$	478		(A)
Futures on equity indices	(2,081		)	(B)	1,111			(B)
Interest rate swaps	418			(A)	6,480			(A)
Interest rate futures	134			(A)	(99		)	(A)
Interest rate futures	(183		)	(B)	(117		)	(B)
Interest rate swaptions	23			(A)	928			(A)
Interest rate swaptions	(39		)	(B)	—			(B)
Other forward contracts	(8,286		)	(A)	32,538			(A)
Other forward contracts	19,413			(B)	8,504			(B)
Cross-currency swaps	1,872			(A)	36,845			(A)
Total derivatives not designated as hedging instruments	$	11,781			$	86,668

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income
	Nine Months Ended September 30,
	2016				2015
Derivatives not designated as hedging instruments:
Futures on equity indices	$	103		(A)	$	896		(A)
Futures on equity indices	(5,358		)	(B)	122			(B)
Interest rate swaps	19,727			(A)	553			(A)
Interest rate futures	(77		)	(A)	(214		)	(A)
Interest rate futures	(249		)	(B)	55			(B)
Interest rate swaptions	96			(A)	2,919			(A)
Interest rate swaptions	(256		)	(B)	(2,076		)	(B)
Other forward contracts	7,268			(A)	14,778			(A)
Other forward contracts	31,509			(B)	6,414			(B)
Cross-currency swaps	62,147			(A)	44,549			(A)
Total derivatives not designated as hedging instruments	$	114,910			$	67,996

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

Embedded derivative - Guaranteed Lifetime Withdrawal Benefit

The Company offers a guaranteed lifetime withdrawal benefit (“GLWB”) through a variable annuity or a contingent deferred annuity. The GLWB is deemed to be an embedded derivative. The GLWB is recorded at fair value within future policy benefits on the condensed consolidated balance sheets. Changes in fair value of the GLWB are recorded in net investment income in the condensed consolidated statements of income.

The estimated fair value of the GLWB was a liability position of $31,277 and $11,257 at September 30, 2016, and December 31, 2015, respectively. The changes in fair value of the GLWB were unrealized gains (losses) of $(590) and $(6,858)

23

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

for the three months ended September 30, 2016, and 2015, respectively, and $(20,020) and $(3,370) for the nine months ended September 30, 2016, and 2015, respectively.

7.  Summary of Offsetting Assets and Liabilities

The Company enters into derivative transactions and short-term reverse repurchase agreements with several approved counterparties. The Company’s derivative transactions are generally governed by MSFTA or ISDA Master Agreements which provide for legally enforceable set-off and close-out netting in the event of default or bankruptcy of the Company’s counterparties.  The Company’s MSFTA and ISDA Master Agreements generally include provisions which require both the pledging and accepting of collateral in connection with its derivative transactions. These provisions have the effect of securing each party’s position to the extent of collateral held. Short-term reverse repurchase agreements also include collateral provisions with the counterparty. The following tables summarize the effect of master netting arrangements on the Company’s financial position in the normal course of business and in the event of default or bankruptcy of the Company’s counterparties: 

	September 30, 2016
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial			Cash collateral		Net
Financial instruments (assets):	recognized assets (1)		instruments			received		fair value
Derivative instruments (2)	$	123,415	$	(35,579	)	$	78,757	$	9,079
Short-term reverse repurchase agreement (3)	300,000		(300,000		)	—		—
Total financial instruments (assets)	423,415		(335,579		)	78,757		9,079

	September 30, 2016
		Gross fair value not offset
		in balance sheets
	Gross fair value of	Financial		Cash collateral	Net
Financial instruments (liabilities):	recognized liabilities (1)	instruments		pledged	fair value
Derivative instruments (4)	35,579	(35,579	)	—	—

⁽¹⁾ The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets.

⁽²⁾ The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

⁽³⁾ The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement.

⁽⁴⁾ The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

	December 31, 2015
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial			Cash collateral			Net
Financial instruments:	recognized assets/liabilities (1)		instruments			received/(pledged)			fair value
Derivative instruments (assets) (2)	$	66,435	$	(38,236	)	$	19,060		$	9,139
Derivative instruments (liabilities) (3)	76,107		(38,236		)	(37,871		)	—

⁽¹⁾ The gross fair value of derivative instrument assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets.

⁽²⁾ The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

⁽³⁾ The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

24

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

8.  Fair Value Measurements

Recurring fair value measurements

The following tables present the Company’s financial assets and liabilities carried at fair value on a recurring basis by fair value hierarchy category:

	Assets and liabilities measured at fair value on a recurring basis
	September 30, 2016
	Quoted prices		Significant
	in active markets for identical assets (Level 1)		other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Fixed maturities available-for-sale:
U.S. government direct obligations and U.S. agencies	$	—	$	1,128,002	$	—	$	1,128,002
Obligations of U.S. states and their subdivisions	—		2,251,210		—		2,251,210
Foreign government securities	—		2,164		—		2,164
Corporate debt securities	—		14,389,380		14,707		14,404,087
Asset-backed securities	—		1,596,662		—		1,596,662
Residential mortgage-backed securities	—		96,717		—		96,717
Commercial mortgage-backed securities	—		1,217,078		—		1,217,078
Collateralized debt obligations	—		130,221		—		130,221
Total fixed maturities available-for-sale	—		20,811,434		14,707		20,826,141
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		341,368		—		341,368
Corporate debt securities	—		56,390		—		56,390
Commercial mortgage-backed securities	—		1,122		—		1,122
Total fixed maturities held-for-trading	—		398,880		—		398,880
Short-term investments	338,051		1,976,256		—		2,314,307
Collateral under securities lending agreements	99,404		—		—		99,404
Collateral under derivative counterparty collateral agreements	109,156		—		—		109,156
Derivative instruments designated as hedges:
Interest rate swaps	—		13,490		—		13,490
Cross-currency swaps	—		51,284		—		51,284
Derivative instruments not designated as hedges:
Interest rate swaps	—		32,982		—		32,982
Interest rate swaptions	—		191		—		191
Other forward contracts	—		7,891		—		7,891
Cross-currency swaps	—		41,528		—		41,528
Total derivative instruments	—		147,366		—		147,366
Separate account assets (1)	15,580,267		11,738,559		—		27,775,827
Total assets	$	16,126,878	$	35,072,495	$	14,707	$	51,671,081
Liabilities
Payable under securities lending agreements	$	99,404	$	—	$	—	$	99,404
Collateral under derivative counterparty collateral agreements	80,630		—		—		80,630
Derivative instruments designated as hedges:
Interest rate swaps	—		27,342		—		27,342
Cross-currency swaps	—		5,090		—		5,090
Derivative instruments not designated as hedges:
Interest rate swaps	—		10,061		—		10,061
Other forward contracts	—		623		—		623
Cross-currency swaps	—		26,828		—		26,828
Total derivative instruments	—		69,944		—		69,944
Embedded derivatives - GLWB	—		—		31,277		31,277
Separate account liabilities (2)	4		517,570		—		517,574
Total liabilities	$	180,038	$	587,514	$	31,277	$	798,829

⁽¹⁾ Included in the total fair value amount are $457 million of investments as of September 30, 2016 for which the fair value is estimated using net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy in connection with the adoption of ASU 2015-07.

 ⁽²⁾ Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts.

25

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Assets and liabilities measured at fair value on a recurring basis
	December 31, 2015
	Quoted prices		Significant
	in active markets for identical assets (Level 1)		other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Fixed maturities available-for-sale:
U.S. government direct obligations and U.S. agencies	$	—	$	3,341,752	$	—	$	3,341,752
Obligations of U.S. states and their subdivisions	—		2,219,173		—		2,219,173
Foreign government securities	—		2,286		—		2,286
Corporate debt securities	—		12,501,174		4,538		12,505,712
Asset-backed securities	—		1,311,370		—		1,311,370
Residential mortgage-backed securities	—		125,372		—		125,372
Commercial mortgage-backed securities	—		1,016,908		—		1,016,908
Collateralized debt obligations	—		9,054		—		9,054
Total fixed maturities available-for-sale	—		20,527,089		4,538		20,531,627
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		558,208		—		558,208
Corporate debt securities	—		56,566		—		56,566
Commercial mortgage-backed securities	—		1,065		—		1,065
Total fixed maturities held-for-trading	—		615,839		—		615,839
Short-term investments	132,288		134,738		—		267,026
Collateral under derivative counterparty collateral agreements	69,984		—		—		69,984
Derivative instruments designated as hedges:
Interest rate swaps	—		11,843		—		11,843
Cross-currency swaps	—		28,736		—		28,736
Derivative instruments not designated as hedges:
Interest rate swaps	—		8,295		—		8,295
Interest rate swaptions	—		189		—		189
Cross-currency swaps	—		19,537		—		19,537
Total derivative instruments	—		68,600		—		68,600
Separate account assets (1)	15,249,966		10,847,266		—		26,631,193
Total assets	$	15,452,238	$	32,193,532	$	4,538	$	48,184,269
Liabilities
Collateral under derivative counterparty collateral agreements	$	19,060	$	—	$	—	$	19,060
Derivative instruments designated as hedges:
Cross-currency swaps	—		22		—		22
Derivative instruments not designated as hedges:
Interest rate swaps	—		5,055		—		5,055
Cross-currency swaps	—		71,296		—		71,296
Total derivative instruments	—		76,373		—		76,373
Embedded derivatives - GLWB	—		—		11,257		11,257
Separate account liabilities (2)	24		290,293		—		290,317
Total liabilities	$	19,084	$	366,666	$	11,257	$	397,007

⁽¹⁾ Included in the total fair value amount are $534 million of investments as of December 31, 2015 for which the fair value is estimated using net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy in connection with the adoption of ASU 2015-07.

⁽²⁾ Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts.

26

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The methods and assumptions used to estimate the fair value of the Company’s financial assets and liabilities carried at fair value on a recurring basis are as follows:

Fixed maturity investments

The fair values for fixed maturity investments are generally based upon market prices from independent pricing services.  In cases where market prices are not readily available, fair values are estimated by the Company.  To determine estimated fair value for these instruments, the Company generally utilizes discounted cash flows models with market observable pricing inputs such as spreads, average life, and credit quality.  Fair value estimates are made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty.

Short-term investments and securities lending agreements

The amortized cost of short-term investments, collateral under securities lending agreements, and payable under securities lending agreements is a reasonable estimate of fair value due to their short-term nature and high credit quality of the issuers.

Collateral under derivative counterparty collateral agreements

Included in other assets is cash collateral received from or pledged to derivative counterparties and included in other liabilities is the obligation to return the cash collateral to the counterparties.  The carrying value of the collateral is a reasonable estimate of fair value.

Derivative instruments

Included in other assets and other liabilities are derivative financial instruments. The estimated fair values of OTC derivatives, primarily consisting of cross-currency swaps, interest rate swaps, interest rate swaptions, and other forward contracts, are the estimated amounts the Company would receive or pay to terminate the agreements at the end of each reporting period, taking into consideration current interest rates and other relevant factors.

Embedded derivative - GLWB

Significant unobservable inputs used in the fair value measurements of GLWB include long-term equity and interest rate implied volatility, mortality, and policyholder behavior assumptions, such as benefit utilization, lapses, and partial withdrawals.

Separate account assets and liabilities

Separate account assets and liabilities primarily include investments in mutual fund, fixed maturity, and short-term securities.  Mutual funds are recorded at net asset value, which approximates fair value, on a daily basis.  The fixed maturity and short-term investments are valued in the same manner, and using the same pricing sources and inputs as the fixed maturity and short-term investments of the Company.

27

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Recurring Level 3 financial assets and liabilities
	Three Months Ended September 30, 2016
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, July 1, 2016	$	15,056		$	30,687
Realized and unrealized gains (losses) included in:
Net income (loss)	—			590
Other comprehensive income (loss)	245			—
Settlements	(594		)	—
Balances, September 30, 2016	$	14,707		$	31,277
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2016	$	—		$	590

	Recurring Level 3 financial assets and liabilities
	Three Months Ended September 30, 2015
	Assets								Liabilities
	Fixed maturities  available-for-sale								Embedded
	Corporate			Asset-backed					derivatives
	debt securities			securities		Total			- GLWB
Balances, July 1, 2015	$	5,065		$	31	$	5,096		$	2,919
Realized and unrealized gains (losses) included in:
Net income (loss)	—			—		—			6,858
Other comprehensive income (loss)	(66		)	—		(66		)	—
Settlements	(216		)	9		(207		)	—
Balances, September 30, 2015	$	4,783		$	40	$	4,823		$	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2015	$	—		$	—	$	—		$	6,858

28

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Recurring Level 3 financial assets and liabilities
	Nine Months Ended September 30, 2016
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, January 1, 2016	$	4,538		$	11,257
Realized and unrealized gains (losses) included in:
Net income (loss)	—			20,020
Other comprehensive income (loss)	720			—
Settlements	(1,787		)	—
Transfers into Level 3 (1)	11,236			—
Balances, September 30, 2016	$	14,707		$	31,277
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2016	$	—		$	20,020

⁽¹⁾ Transfers into Level 3 are due primarily to decreased observability of inputs in valuation methodologies.

	Recurring Level 3 financial assets and liabilities
	Nine Months Ended September 30, 2015
	Assets								Liabilities
	Fixed maturities  available-for-sale								Embedded
	Corporate			Asset-backed					derivatives
	debt securities			securities		Total			- GLWB
Balances, January 1, 2015	$	5,842		$	36	$	5,878		$	6,407
Realized and unrealized gains (losses) included in:
Net income (loss)	—			—		—			3,370
Other comprehensive income (loss)	(143		)	—		(143		)	—
Settlements	(916		)	4		(912		)	—
Balances, September 30, 2015	$	4,783		$	40	$	4,823		$	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2015	$	—		$	—	$	—		$	3,370

29

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The following tables present significant unobservable inputs used during the valuation of certain liabilities categorized within Level 3 of the recurring fair value measurements table:

	September 30, 2016
	Fair Value		Valuation Technique	Unobservable Input	Range
Embedded derivatives - GLWB	$	31,277	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%
				Swap curve	0.5% - 2.50%
				Mortality rate	Based on the Annuity 2000 Mortality Table
				Lapse rate	1% - 15%

	December 31, 2015
	Fair Value		Valuation Technique	Unobservable Input	Range
Embedded derivatives - GLWB	$	11,257	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%
				Swap curve	0.75% - 3.00%
				Mortality rate	Based on the Annuity 2000 Mortality Table
				Lapse rate	1% - 15%

Fair value of financial instruments

The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments and investments not carried at fair value on a recurring basis:

	September 30, 2016				December 31, 2015
	Carrying		Estimated		Carrying		Estimated
	amount		fair value		amount		fair value
Assets
Mortgage loans on real estate	$	3,568,114	$	3,795,123	$	3,247,704	$	3,362,496
Policy loans	4,056,284		4,056,284		4,092,661		4,092,661
Limited partnership interests	30,336		30,262		35,039		34,882
Other investments	14,293		44,723		14,596		44,723
Liabilities
Annuity contract benefits without life contingencies	$	12,254,743	$	12,357,043	$	11,104,721	$	10,839,205
Policyholders’ funds	254,712		254,712		299,577		299,577
Commercial paper	99,971		99,971		93,371		93,371
Notes payable	534,299		515,795		532,575		563,633

30

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The methods and assumptions used to estimate the fair value of financial instruments not carried at fair value on a recurring basis are summarized as follows: 

Mortgage loans on real estate

Mortgage loan fair value estimates are generally based on discounted cash flows.  A discount rate matrix is used where the discount rate valuing a specific mortgage generally corresponds to that mortgage’s remaining term and credit quality.  Management believes the discount rate used is comparable to the credit, interest rate, term, servicing costs, and risks of loans similar to the portfolio loans that the Company would make today given its internal pricing strategy.  The estimated fair value is classified as Level 2.

Policy loans

Policy loans are funds provided to policy holders in return for a claim on the policy. The funds provided are limited to the cash surrender value of the underlying policy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of repayments, the Company believes the fair value of policy loans approximates carrying value. The estimated fair value is classified as Level 2.

Limited partnership interests

Limited partnership interests, accounted for using the cost method, represent the Company’s minority ownership interests in pooled investment funds.  These funds employ varying investment strategies that primarily make private equity investments across diverse industries and geographical focuses.  The estimated fair value was determined using the partnership financial statement reported capital account or net asset value adjusted for other relevant information which may impact the exit value of the investments.  Distributions by these investments are generated from investment gains, from operating income generated by the underlying investments of the funds, and from liquidation of the underlying assets of the funds which are estimated to be liquidated over the next one to 10 years.  The estimated fair value is classified as Level 3.

Other investments

Other investments primarily include real estate held for investment.  The estimated fair value for real estate is based on the unadjusted appraised value which includes factors such as comparable property sales, property income analysis, and capitalization rates.  The estimated fair value is classified as Level 3.

Annuity contract benefits without life contingencies

The estimated fair value of annuity contract benefits without life contingencies is estimated by discounting the projected expected cash flows to the maturity of the contracts utilizing risk-free spot interest rates plus a provision for the Company’s credit risk.  The estimated fair value is classified as Level 2.

Policyholders’ funds

The carrying amount of policyholders’ funds approximates the fair value since the Company can change the interest credited rates with 30 days notice. The estimated fair value is classified as Level 2.

Commercial paper

The amortized cost of commercial paper is a reasonable estimate of fair value due to its short-term nature and the high credit quality of the obligor.  The estimated fair value is classified as Level 2.

31

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Notes payable

The estimated fair value of the notes payable to GWL&A Financial is based upon quoted market prices from independent pricing services of securities with characteristics similar to those of the notes payable.  The estimated fair value is classified as Level 2. 

9.Other Comprehensive Income

The following tables present the accumulated balances for each classification of other comprehensive income (loss):

	Three Months Ended September 30, 2016
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, July 1, 2016	$	855,034		$	45,316		$	(178,086	)	$	(82,677	)	$	639,587
Other comprehensive income (loss) before reclassifications	36,302			(5,074		)	(11,839		)	—			19,389
Amounts reclassified from AOCI	(5,503		)	(1,182		)	—			1,621			(5,064		)
Net current period other comprehensive income (loss)	30,799			(6,256		)	(11,839		)	1,621			14,325
Balances, September 30, 2016	$	885,833		$	39,060		$	(189,925	)	$	(81,056	)	$	653,912

	Three Months Ended September 30, 2015
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, July 1, 2015	$	560,527		$	30,653		$	(79,296	)	$	(102,513	)	$	409,371
Other comprehensive income (loss) before reclassifications	(3,619		)	9,623			(1,549		)	(7		)	4,448
Amounts reclassified from AOCI	(3,859		)	(1,364		)	—			2,021			(3,202		)
Net current period other comprehensive income (loss)	(7,478		)	8,259			(1,549		)	2,014			1,246
Balances, September 30, 2015	$	553,049		$	38,912		$	(80,845	)	$	(100,499	)	$	410,617

32

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2016
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, January 1, 2016	$	339,520		$	45,284		$	(65,785	)	$	(85,581	)	$	233,438
Other comprehensive income (loss) before reclassifications	582,133			(2,150		)	(124,140		)	—			455,843
Amounts reclassified from AOCI	(35,820		)	(4,074		)	—			4,525			(35,369		)
Net current period other comprehensive income (loss)	546,313			(6,224		)	(124,140		)	4,525			420,474
Balances, September 30, 2016	$	885,833		$	39,060		$	(189,925	)	$	(81,056	)	$	653,912

	Nine Months Ended September 30, 2015
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, January 1, 2015	$	784,183		$	33,141		$	(108,194	)	$	(106,112	)	$	603,018
Other comprehensive income (loss) before reclassifications	(207,043		)	9,962			27,349			(222		)	(169,954		)
Amounts reclassified from AOCI	(24,091		)	(4,191		)	—			5,835			(22,447		)
Net current period other comprehensive income (loss)	(231,134		)	5,771			27,349			5,613			(192,401		)
Balances, September 30, 2015	$	553,049		$	38,912		$	(80,845	)	$	(100,499	)	$	410,617

The following tables present the composition of other comprehensive income (loss):

	Three Months Ended September 30, 2016
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	55,849		$	(19,547	)	$	36,302
Unrealized holding gains (losses), net, arising on cash flow hedges	(7,805		)	2,731			(5,074		)
Reclassification adjustment for (gains) losses, net, realized in net income	(10,284		)	3,599			(6,685		)
Net unrealized gains (losses) related to investments	37,760			(13,217		)	24,543
Future policy benefits, DAC and VOBA adjustments	(18,214		)	6,375			(11,839		)
Net unrealized gains (losses)	19,546			(6,842		)	12,704
Employee benefit plan adjustment	2,494			(873		)	1,621
Other comprehensive income (loss)	$	22,040		$	(7,715	)	$	14,325

33

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30, 2015
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	(5,568	)	$	1,949		$	(3,619	)
Unrealized holding gains (losses), net, arising on cash flow hedges	14,804			(5,181		)	9,623
Reclassification adjustment for (gains) losses, net, realized in net income	(8,036		)	2,813			(5,223		)
Net unrealized gains (losses) related to investments	1,200			(419		)	781
Future policy benefits, DAC and VOBA adjustments	(2,383		)	834			(1,549		)
Net unrealized gains (losses)	(1,183		)	415			(768		)
Employee benefit plan adjustment	3,098			(1,084		)	2,014
Other comprehensive income (loss)	$	1,915		$	(669	)	$	1,246

	Nine Months Ended September 30, 2016
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	895,589		$	(313,456	)	$	582,133
Unrealized holding gains (losses), net, arising on cash flow hedges	(3,307		)	1,157			(2,150		)
Reclassification adjustment for (gains) losses, net, realized in net income	(61,375		)	21,481			(39,894		)
Net unrealized gains (losses) related to investments	830,907			(290,818		)	540,089
Future policy benefits, DAC and VOBA adjustments	(190,985		)	66,845			(124,140		)
Net unrealized gains (losses)	639,922			(223,973		)	415,949
Employee benefit plan adjustment	6,962			(2,437		)	4,525
Other comprehensive income (loss)	$	646,884		$	(226,410	)	$	420,474

	Nine Months Ended September 30, 2015
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	(318,529	)	$	111,486		$	(207,043	)
Unrealized holding gains (losses), net, arising on cash flow hedges	15,326			(5,364		)	9,962
Reclassification adjustment for (gains) losses, net, realized in net income	(43,511		)	15,229			(28,282		)
Net unrealized gains (losses) related to investments	(346,714		)	121,351			(225,363		)
Future policy benefits, DAC and VOBA adjustments	42,075			(14,726		)	27,349
Net unrealized gains (losses)	(304,639		)	106,625			(198,014		)
Employee benefit plan adjustment	8,635			(3,022		)	5,613
Other comprehensive income (loss)	$	(296,004	)	$	103,603		$	(192,401	)

34

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The following tables presents the reclassifications out of accumulated other comprehensive income (loss):

	Three Months Ended September 30,
	2016				2015
Details about accumulated other  comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)								Affected line item in the statement where net income is presented
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale	$	(8,465	)		$	(5,937	)		Other realized investment (gains) losses, net
	(8,465		)		(5,937		)		Total before tax
	(2,962		)		(2,078		)		Tax expense or benefit
	$	(5,503	)		$	(3,859	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(2,911	)		$	(2,099	)		Net investment income
	1,092				—				Interest Expense
	(1,819		)		(2,099		)		Total before tax
	(637		)		(735		)		Tax expense or benefit
	$	(1,182	)		$	(1,364	)		Net of tax
Amortization of employee benefit plan items
Prior service (benefits)	$	(150	)	(1)	$	(159	)	(1)
Actuarial (gains)	2,644			(1)	3,268			(1)
	2,494				3,109				Total before tax
	873				1,088				Tax expense or benefit
	$	1,621			$	2,021			Net of tax
Total reclassification	$	(5,064	)		$	(3,202	)		Net of tax

⁽¹⁾ These accumulated other comprehensive income components are included in the computation of net periodic (benefit) cost of employee benefit plans (see Note 10 for additional details).

35

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2016				2015
Details about accumulated other  comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)								Affected line item in the statement where net income is presented
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale	$	(55,107	)		$	(37,063	)		Other realized investment (gains) losses, net
	(55,107		)		(37,063		)		Total before tax
	(19,287		)		(12,972		)		Tax expense or benefit
	$	(35,820	)		$	(24,091	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(7,943	)		$	(6,448	)		Net investment income
	1,675				—				Interest Expense
	(6,268		)		(6,448		)		Total before tax
	(2,194		)		(2,257		)		Tax expense or benefit
	$	(4,074	)		$	(4,191	)		Net of tax
Amortization of employee benefit plan items
Prior service costs (benefits)	$	(452	)	(1)	$	(520	)	(1)
Actuarial losses (gains)	7,414			(1)	9,497			(1)
	6,962				8,977				Total before tax
	2,437				3,142				Tax expense or benefit
	$	4,525			$	5,835			Net of tax
Total reclassification	$	(35,369	)		$	(22,447	)		Net of tax

⁽¹⁾ These accumulated other comprehensive income components are included in the computation of net periodic (benefit) cost of employee benefit plans (see Note 10 for additional details).

36

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

10.  Employee Benefit Plans

Net periodic cost (benefit) of the Defined Benefit Pension, Post-Retirement Medical, and Supplemental Executive Retirement plans included in general insurance expenses in the accompanying condensed consolidated statements of income includes the following components:

	Three Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan					Total
	2016			2015			2016			2015			2016			2015		2016			2015
Components of net periodic cost (benefit):
Service cost	$	3,417		$	1,521		$	349		$	254		$	73		$	70	$	3,839		$	1,845
Interest cost	6,384			5,996			184			167			444			531		7,012			6,694
Expected return on plan assets	(6,237		)	(7,084		)	—			—			—			—		(6,237		)	(7,084		)
Amortization of unrecognized prior service costs (benefits)	—			3			(275		)	(395		)	125			233		(150		)	(159		)
Amortization of losses (gains) from earlier periods	2,726			3,086			(67		)	16			(15		)	166		2,644			3,268
Net periodic cost (benefit)	$	6,290		$	3,522		$	191		$	42		$	627		$	1,000	$	7,108		$	4,564

	Nine Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan					Total
	2016			2015			2016			2015			2016			2015		2016			2015
Components of net periodic cost (benefit):
Service cost	$	6,087		$	4,538		$	935		$	781		$	219		$	211	$	7,241		$	5,530
Interest cost	18,948			17,990			534			420			1,332			1,592		20,814			20,002
Expected return on plan assets	(18,793		)	(21,258		)	—			—			—			—		(18,793		)	(21,258		)
Amortization of unrecognized prior service costs (benefits)	—			10			(827		)	(1,230		)	375			700		(452		)	(520		)
Amortization of losses (gains) from earlier periods	7,695			9,298			(237		)	(298		)	(44		)	497		7,414			9,497
Net periodic cost (benefit)	$	13,937		$	10,578		$	405		$	(327	)	$	1,882		$	3,000	$	16,224		$	13,251

On January 1, 2015, the Company acquired the retirement business of Putnam, an affiliate of the Company. See Note 2 for additional discussion regarding the acquisition. Per the terms of the Asset Transfer Agreement, the Company was required to give each Putnam employee full credit for the employee’s service period with Putnam prior to the closing date for the purpose of eligibility to participate, vesting and level of benefits under the Post-Retirement Medical Plan.  As a result, approximately 150 individuals became eligible participants of the Post-Retirement Medical Plan at January 1, 2015.  The transaction was recorded as a prior service cost, which resulted in a $339 increase before tax to other liabilities and expenses and a decrease to accumulated other comprehensive income.

The Company expects to make payments of approximately $803 with respect to its Post-Retirement Medical Plan and $3,336 with respect to its Supplemental Executive Retirement Plan during the year ended December 31, 2016.  The Company expects to make contributions of zero to its Defined Benefit Pension Plan during the year ended December 31, 2016.  A December 31 measurement date is used for the employee benefit plans.

37

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

The following table summarizes contributions to the Defined Benefit Pension Plan and payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Payments to the Post-Retirement Medical Plan	212	576	603	1,100
Payments to the Supplemental Executive Retirement Plan	834	830	2,502	3,995

11.  Income Taxes

The provision for income taxes is comprised of the following:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
Current (benefit) expense	$	(1,399	)	$	29,568	$	41,725	$	67,705
Deferred expense	16,694			1,140		37,318		11,221
Total income tax provision	$	15,295		$	30,708	$	79,043	$	78,926

The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate:

	Nine Months Ended September 30,
	2016		2015
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(2.7	)%	(2.8	)%
Tax credits	(7.3	)%	(0.3	)%
State income taxes, net of federal benefit	2.5	%	1.9	%
Other, net	(0.4	)%	(0.7	)%
Effective income tax rate	27.1	%	33.1	%

The Company recorded a decrease of $5,824 and an increase of $1,008 in unrecognized tax benefits during the nine months ended September 30, 2016, and 2015, respectively. The Company does not anticipate material changes to its unrecognized tax benefits in the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations by tax authorities for years 2012 and prior.  Tax years 2013 through 2015 are open to federal examination by the Internal Revenue Service (“IRS”).  The Company does not expect significant increases or decreases to unrecognized tax benefits relating to federal, state, or local audits.

12.  Segment Information

The Chief Operating Decision Maker (“CODM”) of the Company is also the Chief Executive Officer (“CEO”) of the Company and Lifeco U.S. The CODM reviews the financial information for the purposes of assessing performance and allocating resources based upon the results of Lifeco U.S. and other U.S. affiliates prepared in accordance with International Financial Reporting Standards. The CODM, in his capacity as CEO of the Company, reviews the Company’s financial information only

in connection with the quarterly and annual reports that are filed with the Securities and Exchange Commission (“SEC”).

Consequently, the Company does not provide its discrete financial information to the CODM to be regularly reviewed to make

decisions about resources to be allocated or to assess performance. For purposes of SEC reporting requirements, the Company

has chosen to present its financial information in three segments, notwithstanding the above. The three segments are: Individual Markets, Empower Retirement (formerly known as “Retirement Services”), and Other. 

38

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Individual Markets

The Individual Markets reporting and operating segment distributes life insurance, annuity, and retirement products to both individuals and businesses through various distribution channels.  Life insurance products in-force include participating and non-participating term life, whole life, universal life, and variable universal life.

Empower Retirement

The Empower Retirement reporting and operating segment provides various retirement plan products (including individual retirement accounts (“IRAs”)) and investment options as well as comprehensive administrative and record-keeping services for financial institutions and employers, which include educational, advisory, enrollment, and communication services for employer-sponsored defined contribution plans and associated defined benefit plans.

Other

The Company’s Other reporting segment is substantially comprised of activity under the assumption of reinsurance between Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”), a wholly owned subsidiary, and The Canada Life Assurance Company (“CLAC”), corporate items not directly allocated to the other operating segments, and interest expense on long-term debt.

The accounting principles used to determine segment results are the same as those used in the consolidated financial statements.  Intersegment transactions and balances have been eliminated in consolidation.  The Company’s operations are not materially dependent on one or a few customers, brokers, or agents.

The following tables summarize segment financial information:

	Three Months Ended September 30, 2016
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	126,770	$	605	$	18,725		$	146,100
Fee income	23,553		221,342		1,518			246,413
Other revenue	—		3,228		—			3,228
Net investment income	185,747		94,383		11,409			291,539
Realized investment gains (losses), net	11,026		21,565		783			33,374
Total revenues	347,096		341,123		32,435			720,654
Benefits and expenses:
Policyholder benefits	280,821		51,730		14,310			346,861
Operating expenses	35,948		263,327		19,206			318,481
Total benefits and expenses	316,769		315,057		33,516			665,342
Income (loss) before income taxes	30,327		26,066		(1,081		)	55,312
Income tax expense (benefit)	10,102		5,442		(249		)	15,295
Net income (loss)	$	20,225	$	20,624	$	(832	)	$	40,017

39

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30, 2015
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	132,761	$	477	$	20,779		$	154,017
Fee income	19,745		204,488		1,009			225,242
Other revenue	—		1,820		—			1,820
Net investment income	222,445		127,160		13,452			363,057
Realized investment gains (losses), net	8,304		14,247		—			22,551
Total revenues	383,255		348,192		35,240			766,687
Benefits and expenses:
Policyholder benefits	270,614		54,401		32,599			357,614
Operating expenses	49,407		242,841		18,544			310,792
Total benefits and expenses	320,021		297,242		51,143			668,406
Income (loss) before income taxes	63,234		50,950		(15,903		)	98,281
Income tax expense (benefit)	21,539		14,884		(5,715		)	30,708
Net income (loss)	$	41,695	$	36,066	$	(10,188	)	$	67,573

	Nine Months Ended September 30, 2016
	Individual		Empower
	Markets		Retirement		Other		Total
Revenue:
Premium income	$	311,110	$	1,311	$	65,424	$	377,845
Fee income	71,823		633,679		4,342		709,844
Other revenue	—		9,747		—		9,747
Net investment income	619,633		321,972		37,475		979,080
Realized investment gains (losses), net	37,602		68,278		777		106,657
Total revenues	1,040,168		1,034,987		108,018		2,183,173
Benefits and expenses:
Policyholder benefits	749,790		153,587		43,499		946,876
Operating expenses	127,181		761,827		55,807		944,815
Total benefits and expenses	876,971		915,414		99,306		1,891,691
Income (loss) before income taxes	163,197		119,573		8,712		291,482
Income tax expense (benefit)	55,183		20,579		3,281		79,043
Net income (loss)	$	108,014	$	98,994	$	5,431	$	212,439

40

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2015
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	308,976	$	493	$	64,968		$	374,437
Fee income	66,214		618,841		2,965			688,020
Other revenue	—		5,460		—			5,460
Net investment income	595,757		305,969		40,356			942,082
Realized investment gains (losses), net	20,256		36,257		97			56,610
Total revenues	991,203		967,020		108,386			2,066,609
Benefits and expenses:
Policyholder benefits	725,526		151,194		80,883			957,603
Operating expenses	116,770		704,047		50,091			870,908
Total benefits and expenses	842,296		855,241		130,974			1,828,511
Income (loss) before income taxes	148,907		111,779		(22,588		)	238,098
Income tax expense (benefit)	51,262		35,651		(7,987		)	78,926
Net income (loss)	$	97,645	$	76,128	$	(14,601	)	$	159,172

13.  Commitments and Contingencies

Commitments

The Company has a revolving credit facility agreement in the amount of $50,000 for general corporate purposes.  The credit facility expires on March 1, 2018.  Interest accrues at a rate dependent on various conditions and terms of borrowings.  The agreement requires, among other things, the Company to maintain a minimum adjusted net worth of $1,100,000, as defined in the credit facility agreement (compiled on the statutory accounting basis prescribed by the National Association of Insurance Commissioners), at anytime.  The Company was in compliance with all covenants at September 30, 2016, and December 31, 2015.  At September 30, 2016, and December 31, 2015, there were no outstanding amounts related to the credit facility.

GWSC and CLAC are parties to a reinsurance agreement pursuant to which GWSC assumes term life insurance from CLAC.  GWL&A Financial obtained two letters of credit for the benefit of the Company as collateral under the GWSC and CLAC reinsurance agreement for policy liabilities and capital support.  The first letter of credit is for $1,166,730 and renews annually until it expires on July 3, 2027.  The second letter of credit is for $70,000 and renews annually until it expires on December 31, 2017.  At September 30, 2016, and December 31, 2015, there were no outstanding amounts related to the letters of credit.

In addition, the Company has other letters of credit with a total amount of $9,095, renewable annually for an indefinite period of time. At September 30, 2016, and December 31, 2015, there were no outstanding amounts related to those letters of credit.

The Company makes commitments to fund partnership interests, mortgage loans on real estate, and other investments in the normal course of its business.  The amounts of these unfunded commitments at September 30, 2016, and December 31, 2015, were $376,191 and $50,692, of which $82,831 and $8,692 were related to cost basis limited partnership interests, respectively, all of which is due within one year from the dates indicated.

Contingencies

From time to time, the Company may be threatened with, or named as a defendant in, lawsuits, mediations, arbitrations, and administrative claims. Any such claims that are decided against the Company could harm the Company’s business. The Company is also subject to periodic regulatory audits and inspections which could result in fines or other disciplinary actions.

41

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Unfavorable outcomes in such matters may result in a material impact on the Company's financial position, results of operations, or cash flows.

The Company is defending lawsuits relating to the costs and features of certain of its retirement or fund products. These actions have not reached the trial stage. Management believes the claims are without merit and will defend these actions. Based on the information known, these actions will not have a material adverse effect on the consolidated financial position of the Company.

The Company is involved in other various legal proceedings that arise in the ordinary course of its business.  In the opinion of management, after consultation with counsel, the likelihood of loss from the resolution of these proceedings is remote and/or the estimated loss is not expected to have a material effect on the Company’s consolidated financial position, results of its operations, or cash flows.

14.  Subsequent Events

The Company evaluated subsequent events through the date the condensed consolidated financial statements were issued. The Company concluded that no subsequent events have occurred that would require recognition or disclosure in the condensed consolidated financial statements.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

As used in this Form 10-Q, the “Company” refers to Great-West Life & Annuity Insurance Company, a stock life insurance company originally organized on March 28, 1907 and domiciled in the state of Colorado, and its subsidiaries.

This Form 10-Q contains forward-looking statements.  Forward-looking statements are statements not based on historical information and that relate to future operations, strategies, financial results, or other developments.  In particular, statements using words such as “may,” “would,” “could,” “should,” “estimates,” “expected,” “anticipate,” “believe,” or words of similar import generally involve forward-looking statements.  Without limiting the foregoing, forward-looking statements include statements that represent the Company’s beliefs concerning future or projected levels of sales of its products, investment spreads or yields, or the earnings or profitability of the Company’s activities.

Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond the Company’s control and many of which, with respect to future business decisions, are subject to change.  Some of these risks are described in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.  These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.  Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, some of which may be global or national in scope, such as general economic conditions and interest rates, some of which may be related to the insurance industry generally, such as pricing competition, regulatory developments and industry consolidation, and others of which may relate to the Company specifically, such as credit, volatility, and other risks associated with its investment portfolio and other factors. 

Readers should also consider other matters, including any risks and uncertainties, discussed in documents filed by the Company and certain of its subsidiaries with the Securities and Exchange Commission. The following discussion addresses the Company’s results of operations for the three and nine months ended September 30, 2016, compared with the same period in 2015.  This discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” to which the reader is directed for additional information.

Recent Events

Empower Retirement continues to incur strategic and business development expenses as it focuses on enhancements, which will improve the client-facing experience as well as streamline the back-office processing over the next several years.  The Company originally anticipated investing approximately $150 million in total on this multi-year initiative and has invested $147 million by September 30, 2016.  The Company expects the remaining investment to complete integration activities to be approximately $5 million to $10 million.  In 2015, these costs decreased net earnings by $34 million and it is expected these costs will decrease net earnings by approximately $20 million to $25 million in 2016.  For the three and nine months ended September 30, 2016, these costs have decreased net earnings by $6 million and $19 million, respectively.  

The Company has set an annual cost-savings target of $40 million to $50 million pre-tax.  Integration activities are expected to be completed by the second quarter of 2017 with the annual reduction of operating costs fully reflected upon the completion of the business transformation in the next two to three years.  These synergies are expected to be achieved through efficiencies from the conversion of business onto a single back-office platform, increased utilization of Great West Global Business Services India Private Limited (“Great West Global”), which launched in the third quarter of 2015, with 529 professionals based in India, as well as scale-driven cost improvements.  Ongoing operations will include amortization expense from system and infrastructure enhancements.  The Company expects that these enhancements will increase market share by driving future sales and improving the retention of participants and assets.  Empower Retirement participant accounts have grown to over 8 million at September 30, 2016 from 7.5 million at September 30, 2015.

On April 6, 2016, the U.S. Department of Labor issued a new rule redefining and expanding who is a fiduciary by reason of providing investment advice to a retirement plan or holder of an individual retirement account. Compliance with the rule will generally be required by April 10, 2017 (certain parts by January 1, 2018). The Company continues to analyze the rule against current business practices, primarily in its Empower Retirement and Individual Markets businesses. The rule may require changes to certain aspects of product and service delivery but management does not expect that it will prevent the Company from executing on its overall business strategy and growth objectives.

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Current Market Conditions

The S&P 500 index at September 30, 2016 was up by 3% compared to June 30, 2016 and up by 6% compared to January 1, 2016. The S&P 500 index at September 30, 2015 was down by 7% compared to June 30, 2015 and was down by 7% compared to January 1, 2015.  The average of the S&P 500 index was up by 7% during the three months ended September 30, 2016, and was down by less than 1% during the nine months ended September 30, 2016, respectively, when compared to the same period in 2015.

	2016			2015
S&P 500 Index	Close	Average in Quarter	Average for Year to Date	Close	Average in Quarter	Average for Year to Date
September 30	2,168	2,161	2,063	1,920	2,027	2,064
June 30	2,099	2,074	2,013	2,063	2,102	2,083
March 31	2,060	1,952	1,952	2,068	2,064	2,064
January 1	2,044			2,059

Variable asset-based fees earned by the Company fluctuate with changes in participant account balances. Participant account balances change due to cash flow and unrealized market gains and losses, which are primarily associated with changes in the U.S. equities market. Fee income increased for the three and nine months ended September 30, 2016, when compared to the same period in 2015. For the three months ended September 30, 2016, the variance was primarily due to higher asset-based fees, driven by growth in these assets, due to positive net cash flows and higher average equity market levels. For the nine months ended September 30, 2016, the variance was primarily due to higher asset-based fees, driven by growth in these assets, due to positive net cash flows.

Interest rates decreased during the first nine months of 2016 as compared to 2015 when interest rates were volatile. The 10-year U.S. Treasury rate at September 30, 2016, was up by 11 basis points as compared to June 30, 2016 and was down by 67 basis points as compared to January 1, 2016. The rate at September 30, 2015 was down by 29 basis points as compared to June 30, 2015 and was down by 11 basis points as compared to January 1, 2015. The average of the 10-year U.S. Treasury rate during the three months ended September 30, 2016, was down by 66 basis points when compared to 2015 and the rate during the nine months ended September 30, 2016 was down by 38 basis points when compared to 2015.

	2016						2015
10-Year Treasury Rate	Close		Average in Quarter		Average for Year to Date		Close		Average in Quarter		Average for Year to Date
September 30	1.60	%	1.56	%	1.74	%	2.06	%	2.22	%	2.12	%
June 30	1.49	%	1.75	%	1.89	%	2.35	%	2.16	%	2.07	%
March 31	1.78	%	1.91	%	1.91	%	1.94	%	1.97	%	1.97	%
January 1	2.27	%					2.17	%

The Company employs hedging strategies for the purpose of managing the interest rate, foreign currency exchange rate, and equity market risks impacting the Company’s business.  For those derivative instruments when hedge accounting is not elected, all gains or losses are recorded in the consolidated statement of income.  As a result, fluctuations in interest rates, foreign currencies, or equity markets may cause the Company to experience volatility in its earnings.  For the three months ended September 30, 2016, the Company recorded unfavorable changes in unrealized gains (losses), net, on forward settling to be announced (“TBA”) securities of $41 million as compared to 2015. For the nine months ended September 30, 2016, the Company recorded favorable changes of $18 million in unrealized gains (losses), net, primarily due to cross-currency swaps. Additionally, the realized gains (losses), net, on forward settling TBA securities had favorable changes of $11 million and $25 million for the three and nine months ended September 30, 2016, as compared to 2015.

Unrealized gains (losses) on fixed maturity investments fluctuate with changes in the prevailing interest rates.  When interest rates rise, market values of fixed maturity investments generally fall.  During the three months ended September 30, 2016, fixed maturity investments' unrealized investment gains (losses), net, recognized in net income, had an unfavorable change of $5 million, as compared to 2015. Conversely, when prevailing interest rates fall, market values of fixed maturity investments rise. For the nine months ended September 30, 2016 there was a favorable change of $6 million compared to 2015. The Company also recorded in other comprehensive income favorable changes in unrealized gains (losses), net, on fixed maturity investments, of $48 million and $846 million for the three and nine months ended September 30, 2016, respectively, compared

44

to unfavorable changes of $10 million and $355 million for the three and nine months ended September 30, 2015, respectively. The realized gains (losses), net, on fixed maturity investments had a favorable change of $6 million and $31 million for the three and nine months ended September 30, 2016, respectively, as compared to 2015.

Reconciliation of Net Income to Operating Income

The Company uses the same accounting policies and procedures to measure operating income as it uses to measure consolidated net income. The Company employs hedging strategies for the purpose of managing the interest rate, foreign currency exchange rate, and equity market risks impacting the Company’s business.  For some derivative instruments, hedge accounting is not elected; therefore, all gains or losses from these transactions are recorded in the consolidated statement of income.  As a result, fluctuations in interest rates, foreign currencies, or equity markets may cause the Company to experience volatility in net income. As such, the Company has defined operating income as net income, excluding realized and unrealized gains and losses on investments and derivatives and their related tax effect. Operating income should not be viewed as a substitute for net income prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In addition, the Company’s operating income measures may not be comparable to similarly titled measures reported by other companies.

Three months ended September 30, 2016 compared with the three months ended September 30, 2015

The Company believes that the presentation of operating income enhances the understanding of the Company’s performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating income should not be viewed as a substitute for U.S. GAAP net income. The following is a summary of the contributions of each segment to net income and a reconciliation of net income to operating income:

	Three Months Ended September 30,						Increase			Percentage
Income statement data (In millions)	2016			2015			(decrease)			change
Net (loss) income
Individual Markets segment	$	20		$	42		$	(22	)	(52	)%
Empower Retirement segment	21			36			(15		)	(42	)%
Other segment	(1		)	(10		)	9			(90	)%
Total net (loss) income	40			68			(28		)	(41	)%
Adjustments to net (loss) income
Unrealized investment gains (losses), net	(9		)	69			(78		)	(113	)%
Realized investment gains (losses), net	33			23			10			43	%
Pro-rata tax (expense) benefit (1)	(8		)	(32		)	24			(75	)%
Operating income (loss)	$	24		$	8		$	16		200	%

⁽¹⁾ Calculated utilizing estimated tax rate of 35%.

Unrealized investment gains (losses), net, had an unfavorable change of $78 million, or 113%, from a gain of $69 million in 2015 to a loss of $9 million in 2016. The change was due to a $41 million unfavorable change from forward settling TBA securities, a $32 million unfavorable change from derivatives, and a $5 million unfavorable change from bonds.

Realized investment gains (losses), net, had a favorable change of $10 million, or 43%, to $33 million during the three months ended September 30, 2016, when compared to the same period in 2015. The change was due to a $10 million favorable change from forward settling TBA securities and a $6 million favorable change from bonds, partially offset by a $6 million unfavorable change from derivatives.

Pro-rata tax expense decreased by $24 million, to an expense of $8 million in 2016, primarily resulting from the unfavorable change in total unrealized investment gains (losses), net.

45

Nine Months Ended September 30, 2016 compared with the nine months ended September 30, 2015

The following is a summary of the contributions of each segment to net income and a reconciliation of net income to operating income:

	Nine Months Ended September 30,						Increase			Percentage
Income statement data (In millions)	2016			2015			(decrease)			change
Net (loss) income
Individual Markets segment	$	108		$	98		$	10		10	%
Empower Retirement segment	99			76			23			30	%
Other segment	5			(15		)	20			(133	)%
Total net (loss) income	212			159			53			33	%
Adjustments to net (loss) income
Unrealized investment gains (losses), net	73			56			17			30	%
Realized investment gains (losses), net	107			57			50			88	%
Pro-rata tax (expense) benefit (1)	(63		)	(39		)	(24		)	(62	)%
Operating income (loss)	$	95		$	85		$	10		12	%

⁽¹⁾ Calculated utilizing estimated tax rate of 35%.

Unrealized investment gains (losses), net, had a favorable change of $17 million, or 30%, to a gain of $73 million during the nine months ended September 30, 2016, when compared to the same period in 2015. The change was driven by an $18 million favorable change in unrealized gains on derivatives and a $6 million favorable change in unrealized gains on bonds, offset by unrealized losses on forward settling TBA securities of $7 million.

Realized investment gains (losses), net, had a favorable change of $50 million, or 88%, to $107 million during the nine months ended September 30, 2016, when compared to the same period in 2015. The change was driven by a favorable change of $31 million from gains on bonds and a $25 million favorable change in gains on forward settling TBA security transactions, partially offset by unfavorable changes of $6 million in derivatives.

Pro-rata tax expense increased by $24 million, or 62%, to $63 million during the nine months ended September 30, 2016, when compared to the same period in 2015, resulting from the favorable change in unrealized and realized investment gains (losses), net.

46

Company Results of Operations

Three months ended September 30, 2016 compared with the three months ended September 30, 2015

The following is a summary of certain financial data of the Company:

	Three Months Ended September 30,					Increase			Percentage
Income statement data (In millions)	2016		2015			(decrease)			change
Premium income	$	146	$	154		$	(8	)	(5	)%
Fee income	246		225			21			9	%
Other revenue	3		2			1			50	%
Net investment income	301		295			6			2	%
Total revenues	696		676			20			3	%
Policyholder benefits	347		358			(11		)	(3	)%
Operating expenses	318		311			7			2	%
Total benefits and expenses	665		669			(4		)	(1	)%
Income (loss) before income taxes	31		7			24			343	%
Income tax (benefit) expense	7		(1		)	8			(800	)%
Operating income (loss)	$	24	$	8		$	16		200	%

The Company’s consolidated operating income increased by $16 million, or 200%, to $24 million for the three months ended September 30, 2016, when compared to the same period in 2015. The increase was primarily due to higher fee income and lower policyholder benefits, partially offset by higher income tax expense and higher operating expenses.

Fee income increased by $21 million, or 9%, to $246 million for the three months ended September 30, 2016, when compared to the same period in 2015 primarily due to higher asset-based fees, driven by growth in these assets, due to positive net cash flows and higher average equity market levels.

Policyholder benefits decreased by $11 million, or 3%, to $347 million for the three months ended September 30, 2016, when compared to the same period in 2015 primarily driven by more lapses on term life insurance policies, partially offset by higher policyholder benefits in Individual Markets due to unfavorable mortality experience.

Operating expenses increased by $7 million, or 2%, to $318 million for the three months ended September 30, 2016, when compared to the same period in 2015 primarily due to higher salaries and benefits as a result of higher headcount due to business growth, partially offset by lower deferred acquisition costs (“DAC”) amortization.

Income tax expense increased by $8 million, from a benefit of $1 million in 2015 to an expense of $7 million in 2016 primarily due to higher operating income before tax.

47

Nine Months Ended September 30, 2016 compared with the nine months ended September 30, 2015

The following is a summary of certain financial data of the Company:

	Nine Months Ended September 30,				Increase			Percentage
Income statement data (In millions)	2016		2015		(decrease)			change
Premium income	$	378	$	374	$	4		1	%
Fee income	710		688		22			3	%
Other revenue	10		5		5			100	%
Net investment income	905		887		18			2	%
Total revenues	2,003		1,954		49			3	%
Policyholder benefits	947		958		(11		)	(1	)%
Operating expenses	945		871		74			8	%
Total benefits and expenses	1,892		1,829		63			3	%
Income (loss) before income taxes	111		125		(14		)	(11	)%
Income tax (benefit) expense	16		40		(24		)	(60	)%
Operating income (loss)	$	95	$	85	$	10		12	%

The Company’s consolidated operating income increased by $10 million, or 12%, to $95 million for the nine months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to lower income tax expense, higher fee income, higher net investment income, and lower policyholder benefits, partially offset by increased operating expenses.

Fee income increased by $22 million, or 3%, to $710 million for the nine months ended September 30, 2016, when compared to the same period in 2015, primarily due to higher asset-based fees, driven by growth in these assets, due to positive net cash flows.

Net investment income had a favorable change of $18 million, or 2%, to $905 million during the nine months ended September 30, 2016, when compared to the same period in 2015. This was primarily due to higher investment income on bonds, mortgages, and policy loans as a result of higher invested asset balances, partially offset by lower yields.

Policyholder benefits decreased by $11 million, or 1%, to $947 million for the three months ended September 30, 2016, when compared to the same period in 2015 primarily driven by more lapses on term life insurance policies, partially offset by higher policyholder benefits in Individual Markets due to unfavorable mortality experience.

Operating expenses increased by $74 million, or 8%, to $945 million for the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to higher salaries and benefits as a result of higher headcount due to business growth, partially offset by lower DAC amortization.

Income tax expense decreased by $24 million, or 60%, to $16 million for the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to a management election to claim foreign tax credits in addition to a decrease in operating income before tax.

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Individual Markets Segment Results of Operations

Three months ended September 30, 2016 compared with the three months ended September 30, 2015

The following is a summary of certain financial data of the Individual Markets segment:

	Three Months Ended September 30,				Increase			Percentage
Income statement data (In millions)	2016		2015		(decrease)			change
Premium income	$	127	$	133	$	(6	)	(5	)%
Fee income	24		20		4			20	%
Net investment income	191		191		—			—	%
Total revenues	342		344		(2		)	(1	)%
Policyholder benefits	281		271		10			4	%
Operating expenses	36		49		(13		)	(27	)%
Total benefits and expenses	317		320		(3		)	(1	)%
Income (loss) before income taxes	25		24		1			4	%
Income tax (benefit) expense	8		8		—			—	%
Operating income (loss)	$	17	$	16	$	1		6	%

Operating income for the Individual Markets segment increased by $1 million, or 6%, to $17 million, during the three months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to lower operating expenses, partially offset by higher policyholder benefits.

Policyholder benefits increased by $10 million, or 4%, to $281 million for the three months ended September 30, 2016, when compared to the same period in 2015 primarily due to unfavorable mortality experience.

Operating expenses decreased by $13 million, or 27%, to $36 million for the three months ended September 30, 2016, when compared to the same period in 2015 primarily due to lower DAC amortization, partially offset by an increase in salaries and benefits as a result of increased headcount due to business growth.

49

Nine Months Ended September 30, 2016 compared with the nine months ended September 30, 2015

The following is a summary of certain financial data of the Individual Markets segment:

	Nine Months Ended September 30,				Increase			Percentage
Income statement data (In millions)	2016		2015		(decrease)			change
Premium income	$	311	$	309	$	2		1	%
Fee income	72		66		6			9	%
Net investment income	569		566		3			1	%
Total revenues	952		941		11			1	%
Policyholder benefits	750		726		24			3	%
Operating expenses	127		117		10			9	%
Total benefits and expenses	877		843		34			4	%
Income (loss) before income taxes	75		98		(23		)	(23	)%
Income tax (benefit) expense	24		33		(9		)	(27	)%
Operating income (loss)	$	51	$	65	$	(14	)	(22	)%

Operating income for the Individual Markets segment decreased by $14 million, or 22%, to $51 million during the nine months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to higher policyholder benefits and operating expenses, partially offset by lower income tax expense, higher fee income and higher net investment income.

Fee income increased by $6 million, or 9%, to $72 million for the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to positive net cash flows.

Net investment income had a favorable change of $3 million, or 1%, to $569 million for the nine months ended September 30, 2016, when compared to the same period in 2015. This was due to higher investment income earned on bonds, mortgages, and policy loans as a result of higher invested asset balances, partially offset by lower yields.

Policyholder benefits increased by $24 million, or 3%, to $750 million for the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to unfavorable mortality experience.

Operating expenses increased by $10 million, or 9%, to $127 million for the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to higher salaries and benefits as a result of higher headcount due to business growth.

Income tax expense decreased by $9 million, or 27%, to $24 million during the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to lower operating income before tax.

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Empower Retirement Segment Results of Operations

Three months ended September 30, 2016 compared with the three months ended September 30, 2015

The following is a summary of certain financial data of the Empower Retirement segment:

	Three Months Ended September 30,						Increase			Percentage
Income statement data (In millions)	2016			2015			(decrease)			change
Fee income	$	221		$	204		$	17		8	%
Other revenue	3			2			1			50	%
Net investment income	99			91			8			9	%
Total revenues	323			297			26			9	%
Policyholder benefits	52			54			(2		)	(4	)%
Operating expenses	263			243			20			8	%
Total benefits and expenses	315			297			18			6	%
Income (loss) before income taxes	8			—			8			100	%
Income tax (benefit) expense	(1		)	(3		)	2			(67	)%
Operating income (loss)	$	9		$	3		$	6		200	%

Operating income for the Empower Retirement segment increased by $6 million, or 200%, to $9 million for the three months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to higher fee income and net investment income, partially offset by higher operating expenses.

Fee income increased by $17 million, or 8%, to $221 million for the three months ended September 30, 2016, when compared to the same period in 2015, primarily due to higher asset-based fees, driven by growth in these assets, due to positive net cash flows and higher average equity market levels.

Net investment income had a favorable change of $8 million, or 9%, to $99 million for the three months ended September 30, 2016, when compared to the same period in 2015. The primary driver of the change was higher investment income on bonds and mortgages as a result of higher invested asset balances, partially offset by lower yields.

Operating expenses increased by $20 million, or 8%, to $263 million for the three months ended September 30, 2016, when compared to the same period in 2015. The increase was primarily due to an increase in salaries and benefits as a result of increased headcount due to business growth, partially offset by lower DAC amortization.

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Nine Months Ended September 30, 2016 compared with the nine months ended September 30, 2015

The following is a summary of certain financial data of the Empower Retirement segment:

	Nine Months Ended September 30,					Increase			Percentage
Income statement data (In millions)	2016			2015		(decrease)			change
Premium income	$	1		$	—	$	1		100	%
Fee income	634			619		15			2	%
Other revenue	10			5		5			100	%
Net investment income	299			281		18			6	%
Total revenues	944			905		39			4	%
Policyholder benefits	154			151		3			2	%
Operating expenses	762			704		58			8	%
Total benefits and expenses	916			855		61			7	%
Income (loss) before income taxes	28			50		(22		)	(44	)%
Income tax (benefit) expense	(11		)	15		(26		)	(173	)%
Operating income (loss)	$	39		$	35	$	4		11	%

Operating income for the Empower Retirement segment increased by $4 million, or 11%, to $39 million for the nine months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to lower income tax expense, higher net investment income, and higher fee income, partially offset by higher operating expenses.

Fee income increased by $15 million, or 2%, to $634 million for the nine months ended September 30, 2016, when compared to the same period in 2015, primarily due to higher asset-based fees, driven by growth in these assets, due to positive net cash flows.

Net investment income had a favorable change of $18 million, or 6%, to $299 million for the nine months ended September 30, 2016, when compared to the same period in 2015. The primary driver of the change was higher investment income on bonds and mortgages as a result of higher invested asset balances, partially offset by lower yields.

Operating expenses increased by $58 million, or 8%, to $762 million for the nine months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to higher salaries and benefits as a result of higher headcount due to business growth, partially offset by lower DAC amortization.

Income tax changed by $26 million, from an expense of $15 million to a benefit of $11 million during the nine months ended September 30, 2016, when compared to the same period in 2015. The change was primarily due to a management election to claim foreign tax credits in addition to lower operating income before tax.

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Other Segment Results of Operations

Three months ended September 30, 2016 compared with the three months ended September 30, 2015

The following is a summary of certain financial data of the Company’s Other segment:

	Three Months Ended September 30,						Increase			Percentage
Income statement data (In millions)	2016			2015			(decrease)			change
Premium income	$	19		$	21		$	(2	)	(10	)%
Fee income	1			1			—			—	%
Net investment income	11			13			(2		)	(15	)%
Total revenues	31			35			(4		)	(11	)%
Policyholder benefits	14			33			(19		)	(58	)%
Operating expenses	19			19			—			—	%
Total benefits and expenses	33			52			(19		)	(37	)%
Income (loss) before income taxes	(2		)	(17		)	15			(88	)%
Income tax (benefit) expense	—			(6		)	6			(100	)%
Operating income (loss)	$	(2	)	$	(11	)	$	9		(82	)%

Operating loss for the Company’s Other segment decreased by $9 million, or 82%, to a loss of $2 million for the three months ended September 30, 2016 compared to a loss of $11 million in 2015. The decrease in operating loss is primarily due to lower policyholder benefits, partially offset by higher income tax expense.

Policyholder benefits decreased by $19 million, or 58%, to $14 million for the three months ended September 30, 2016 primarily due to more lapses on term life insurance policies compared to the prior year.

Income tax benefit decreased by $6 million, or 100%, to no expense for the three months ended September 30, 2016 primarily due to lower operating loss before tax.

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Nine Months Ended September 30, 2016 compared with the nine months ended September 30, 2015

The following is a summary of certain financial data of the Company’s Other segment:

	Nine Months Ended September 30,					Increase			Percentage
Income statement data (In millions)	2016		2015			(decrease)			change
Premium income	$	66	$	65		$	1		2	%
Fee income	4		3			1			33	%
Net investment income	37		40			(3		)	(8	)%
Total revenues	107		108			(1		)	(1	)%
Policyholder benefits	43		81			(38		)	(47	)%
Operating expenses	56		50			6			12	%
Total benefits and expenses	99		131			(32		)	(24	)%
Income (loss) before income taxes	8		(23		)	31			(135	)%
Income tax (benefit) expense	3		(8		)	11			(138	)%
Operating income (loss)	$	5	$	(15	)	$	20		(133	)%

Operating income for the Company’s Other segment increased by $20 million, or 133%, to $5 million for the nine months ended September 30, 2016, when compared to a loss of $15 million in the same period in 2015. The change in operating income is primarily due to lower policyholder benefits, partially offset by higher income tax expense and higher operating expenses.

Policyholder benefits decreased by $38 million, or 47%, to $43 million for the nine months ended September 30, 2016 primarily driven by more lapses on term life insurance policies compared to the prior year.

Operating expenses increased by $6 million, or 12%, to $56 million for the nine months ended September 30, 2016, when compared to the same period in 2015 primarily due to a legal settlement.

Income tax expense increased by $11 million, or 138%, to an expense of $3 million for the nine months ended September 30, 2016 compared to a benefit of $8 million in 2015 primarily due to higher operating income before income taxes.

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Investment Operations

The Company’s primary investment objective is to acquire assets with duration and cash flow characteristics reflective of its liabilities, while meeting industry, size, issuer, and geographic diversification standards.  Formal liquidity and credit quality parameters have also been established.

The Company follows rigorous procedures to control interest rate risk and observes strict asset and liability matching guidelines.  These guidelines ensure that even under changing market conditions, the Company’s assets should meet the cash flow and income requirements of its liabilities. Using dynamic modeling to analyze the effects of a range of possible market changes upon investments and policyholder benefits, the Company works to ensure that its investment portfolio is appropriately structured to fulfill financial obligations to its policyholders.

The following table presents the percentage distribution of the carrying values of the Company’s general account investment portfolio: 

(In millions)	September 30, 2016				December 31, 2015
Fixed maturities, available-for-sale	$	20,826	66.7	%	$	20,532	71.3	%
Fixed maturities, held-for-trading	399		1.3	%	616		2.1	%
Mortgage loans on real estate	3,568		11.4	%	3,248		11.3	%
Policy loans	4,056		13.0	%	4,093		14.2	%
Short-term investments	2,315		7.4	%	266		0.9	%
Limited partnership and other corporation interests	36		0.1	%	41		0.1	%
Other investments	15		0.1	%	15		0.1	%
Total investments	$	31,215	100.0	%	$	28,811	100.0	%

Fixed Maturity Investments

Fixed maturity investments include public and privately placed corporate bonds, government bonds, and mortgage-backed and asset-backed securities.  Included in available-for-sale fixed maturities are perpetual debt investments which primarily consist of junior subordinated debt instruments that have no stated maturity date but pay fixed or floating interest in perpetuity.  The Company’s strategy related to mortgage-backed and asset-backed securities is to focus on those investments with low prepayment risk and minimal credit risk.

Private placement investments are generally less marketable than publicly traded assets, yet they typically offer enhanced covenant protection that allows the Company, if necessary, to take appropriate action to protect its investment.  The Company believes that the cost of the additional monitoring and analysis required by private placement investments is more than offset by their enhanced yield.

One of the Company’s primary objectives is to ensure that its fixed maturity portfolio is maintained at a high average credit quality to limit credit risk.  All securities are internally rated by the Company on a basis intended to be similar to that of the rating agencies.  The Company’s internal rating methodology generally takes into account ratings from Standard & Poor’s Ratings Services, Fitch Ratings, and Moody’s Investor Services, Inc.  In addition, the National Association of Insurance Commissioners (“NAIC”) implemented a ratings methodology for residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), and other structured securities.  The Company may also utilize inputs from this ratings process to develop its internal rating.

The percentage distribution of the estimated fair value of the Company’s fixed maturity portfolio by the Company’s internal credit rating is summarized as follows:

Credit Rating	September 30, 2016		December 31, 2015
AAA	19.5	%	27.8	%
AA	15.8	%	14.8	%
A	33.2	%	29.5	%
BBB	30.3	%	26.9	%
BB and below (Non-investment grade)	1.2	%	1.0	%
Total	100.0	%	100.0	%

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The September 30, 2016, AAA rating percentage decreased as compared to December 31, 2015, as the Company sold AAA-rated government agency MBS pools to enter into forward settling TBA contracts which are treated as derivatives.

The percentage distribution of the estimated fair value of the corporate sector fixed maturity portfolio, calculated as a percentage of fixed maturities, is summarized as follows:

Sector	September 30, 2016		December 31, 2015
Utility	19.7	%	17.6	%
Finance	11.7	%	10.2	%
Consumer	10.7	%	9.3	%
Natural resources	7.0	%	6.5	%
Transportation	3.9	%	3.2	%
Other	15.2	%	13.0	%

Mortgage Loans on Real Estate

The Company’s mortgage loans on real estate are comprised primarily of domestic commercial collateralized real estate loans.  The mortgage loan portfolio is diversified with regard to geographical markets and commercial real estate property types within the United States.  The Company originates, directly or through correspondents, real estate mortgages with the intent to hold to maturity.  The Company’s portfolio includes loans which are fully amortizing, amortizing with a balloon balance at maturity, interest only to maturity, and interest only for a number of years followed by an amortizing period.

Derivatives

The Company uses certain derivatives, such as futures, swaps, and interest rate swaptions, for purposes of managing the interest rate, foreign currency exchange rate, and equity market risks impacting the Company’s business.  These derivatives, when taken alone, may subject the Company to varying degrees of market and credit risk; however, since used for hedging purposes, these instruments are intended to reduce risk.  For derivative instruments where hedge accounting is not elected, changes in interest rates, foreign currencies, or equity markets may generate derivative gains or losses which may cause the Company to experience volatility in net income.  The Company also uses forward settling TBA securities to gain exposure to the investment risk and return of agency mortgage-backed securities (pass-throughs).  These transactions enhance the return on the Company’s investment portfolio and provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual agency mortgage-backed pools.  The Company controls the credit risk of its over-the-counter derivative contracts through credit approvals, limits, monitoring procedures, and in most cases, requiring collateral.  Risk of loss is generally limited to the portion of the fair value of derivative instruments that exceeds the value of the collateral held and not to the notional or contractual amounts of the derivatives. 

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Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to adopt accounting policies to enable them to make a significant variety of accounting and actuarial estimates and assumptions.  These estimates and assumptions are evaluated on an ongoing basis based on historical developments, market conditions, industry trends, and other information that is reasonable given the facts and circumstances for the Company. These critical estimates and assumptions affect, among other things, the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses.  Actual results can differ from the amounts previously estimated, which were based on information available at the time the estimates were made.

The Company has identified the following accounting policies, judgments, and estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:

·             Valuation of investments;

·             Impairment of investments;

·             Valuation of derivatives and related hedge accounting;

·             Valuation of DAC and related amortization (including unlocking of assumptions); and

·             Valuation of policy benefit liabilities

A discussion of each of these critical accounting policies may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Application of Recent Accounting Pronouncements

See Note 3 to the accompanying condensed consolidated financial statements for a discussion of the application of recent accounting pronouncements.

Liquidity and Capital Resources

Liquidity refers to a company’s ability to generate sufficient cash flows to meet the short-term needs of its operations.  The Company manages its operations to create stable, reliable, and cost-effective sources of cash flows to meet all of its obligations.

The principal sources of the Company’s liquidity are premiums and contract deposits, fees, investment income, and investment maturities and sales.  Funds provided from these sources are reasonably predictable and normally exceed liquidity requirements for payment of policy benefits, payments to policy and contractholders in connection with surrenders and withdrawals, and general expenses.  However, since the timing of available funds cannot always be matched precisely to commitments, imbalances may arise when demands for funds exceed those on hand.  A primary liquidity concern regarding cash flows from operations is the risk of early policyholder and contractholder withdrawals.  A primary liquidity concern regarding investment activity is the risk of defaults and market volatility.

In addition, a demand for funds may arise as a result of the Company taking advantage of current investment opportunities.  The sources of the funds that may be required in such situations include the issuance of commercial paper or other debt instruments.

Management believes that the liquidity profile of its assets is sufficient to satisfy the short-term liquidity requirements of reasonably foreseeable scenarios.

Generally, the Company has met its operating requirements by utilizing cash flows from operations and maintaining appropriate levels of liquidity in its investment portfolio.  Liquidity for the Company has remained strong, as evidenced by the amounts of short-term investments and cash that totaled $432 million and $301 million as of September 30, 2016, and December 31, 2015, respectively.  The September 30, 2016, and December 31, 2015, short-term investments included above exclude any amounts held to settle TBA forward contracts.  In addition, 99% of the fixed maturity portfolio carried an investment grade rating at September 30, 2016, and December 31, 2015, which provides significant liquidity to the Company’s overall investment portfolio.

The Company continues to be well capitalized, with sufficient borrowing capacity.  Additionally, the Company anticipates that cash on hand and expected net cash generated by operating activities will exceed the forecasted needs of the business over the next 12 months.  The Company’s financial strength provides the capacity and flexibility to enable it to raise funds in the capital

57

markets through the issuance of commercial paper.  The Company had $100 million and $93 million of commercial paper outstanding as of September 30, 2016, and December 31, 2015, respectively.  The commercial paper has been given a rating of A-1+ by Standard & Poor’s Ratings Services and a rating of P-1 by Moody’s Investors Service, each being the highest rating available.  Through the recent financial market volatility, the Company continued to have the ability to access the capital markets for funds.  The loss of this access in the future would not have a significant impact to the Company’s liquidity as commercial paper is not used to fund daily operations and is an insignificant amount in relation to total invested assets.

The Company also has available a revolving credit facility agreement with U.S. Bank, which expires on March 1, 2018, in the amount of $50 million for general corporate purposes.  The Company had no borrowings under this credit facility as of or during the nine months ended September 30, 2016.  The Company does not anticipate the need for borrowings under this facility and the loss of its availability would not significantly impact its liquidity.

Capital resources provide protection for policyholders and financial strength to support the underwriting of insurance risks and allow for continued business growth.  The amount of capital resources that may be needed is determined by the Company’s senior management and Board of Directors, as well as by regulatory requirements.  The allocation of resources to new long-term business commitments is designed to achieve an attractive return, tempered by considerations of risk and the need to support the Company’s existing business.

Off-Balance Sheet Arrangements

The Company makes commitments to fund partnership interests, mortgage loans on real estate, and other investments in the normal course of its business.  The amounts of these unfunded commitments at September 30, 2016, and December 31, 2015, were $376 million and $51 million, respectively.  The precise timing of the fulfillment of the commitment cannot be predicted; however, these amounts are due within one year of the dates indicated.  There are no other obligations or liabilities arising from such arrangements that are reasonably likely to become material.

The Company participates in a short-term reverse repurchase program for the purpose of enhancing the total return on its investment portfolio.  This type of transaction involves the purchase of securities with a simultaneous agreement to sell similar securities at a future date at an agreed-upon price.  In exchange, the financial institutions put non-cash collateral on deposit with a third-party custodian on behalf of the Company.  The amount of securities purchased in connection with these transactions was $300 million and zero at September 30, 2016, and December 31, 2015, respectively.  Non-cash collateral on deposit with the third-party custodian on the Company’s behalf was $306 million and zero at September 30, 2016, and December 31, 2015, respectively, which cannot be sold or re-pledged and which has not been recorded on the condensed consolidated balance sheets. Collateral related to the reverse repurchase agreements generally consists of U.S. government or U.S. government agency securities.

The Company participates in a securities lending program in which the Company lends securities that are held as part of its general account investment portfolio to third parties for the purpose of enhancing the total return on its investment portfolio.  The Company generally requires initial collateral in an amount greater than or equal to 102% of the fair value of domestic securities loaned and 105% of foreign securities loaned.  The Company received securities with a fair value of $66 million as collateral at September 30, 2016, which have not been recorded on the condensed consolidated balance sheets as the Company does not have effective control. There were no securities on loan and therefore no securities were received as collateral at December 31, 2015.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

The Company has established processes and procedures to effectively identify, monitor, measure, and manage the risks associated with its invested assets and its interest rate sensitive insurance and annuity products.  Management has identified investment portfolio management, including the use of derivative instruments, insurance and annuity product design, and asset/liability management as three critical means to accomplish a successful risk management program.

The major risks to which the Company is exposed include the following: 

• Market risk - the potential of loss arising from adverse fluctuations in interest rates and equity market prices and the levels of their volatility.

• Insurance risk - the potential of loss resulting from claims, persistency, and expense experience exceeding that assumed in the liabilities held.

• Credit risk - the potential of loss arising from an obligator’s inability or unwillingness to meet its obligations to the Company.

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• Operational and corporate risk - the potential of direct or indirect loss resulting from inadequate or failed internal processes, people and systems, or from other external events.

A discussion of each of these risk factors may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.”

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Item 4.        Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of its President and Chief Executive Officer and its Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”).  The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and to ensure that the information required to be disclosed by the Company in reports that it files under the Exchange Act is accumulated and communicated to the Company’s management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, the President and Chief Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of September 30, 2016.

Changes in Internal Control over Financial Reporting

As disclosed in Item 9A, “Controls and Procedures,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, management concluded that the Company maintained effective internal control over financial reporting. There has been no significant change in the control environment for the three and nine months ended September 30, 2016. Management is committed to continuing to improve its internal control processes and will continue to review its financial reporting controls and procedures.

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Part IIOther Information

Item 1.Legal Proceedings

From time to time, the Company may be threatened with, or named as a defendant in, lawsuits, mediations, arbitrations, and administrative claims. Any such claims that are decided against the Company could harm the Company’s business. The Company is also subject to periodic regulatory audits and inspections which could result in fines or other disciplinary actions. Unfavorable outcomes in such matters may result in a material impact on the Company's financial position, results of operations, or cash flows.

The Company is defending lawsuits relating to the costs and features of certain of its retirement or fund products. These actions have not reached the trial stage. Management believes the claims are without merit and will defend these actions. Based on the information known, these actions will not have a material adverse effect on the consolidated financial position of the Company.

The Company is involved in other various legal proceedings that arise in the ordinary course of its business.  In the opinion of management, after consultation with counsel, the likelihood of loss from the resolution of these proceedings is remote and/or the estimated loss is not expected to have a material effect on the Company’s consolidated financial position, results of its operations or cash flows.

Item 1A. Risk Factors

In the normal course of its business, the Company is exposed to certain operational, regulatory, and financial risks and uncertainties.  The most significant risks include the following:

• Competition could negatively affect the ability of the Company to maintain or increase market share or profitability.

• The insurance and financial services industries are heavily regulated and changes in regulation may reduce profitability.

• A downgrade or potential downgrade in the Company’s financial strength or claims paying ratings could result in a loss of business and negatively affect results of operations and financial condition.

• Deviations from assumptions regarding future persistency, mortality, and interest rates used in calculating liabilities for future policyholder benefits and claims could adversely affect the Company’s results of operations and financial condition.

• The Company may be required to accelerate the amortization of DAC or VOBA, or recognize impairment in the value of goodwill or other intangible assets, which could adversely affect its results of operations and financial condition.

• If the companies that provide reinsurance default or fail to perform or the Company is unable to obtain adequate reinsurance for some of the risks underwritten, the Company could incur significant losses adversely affecting results of operations and financial condition.

• Interest rate fluctuations could have a negative impact on results of operations and financial condition.

• Market fluctuations and general economic conditions may adversely affect results of operations and financial condition.

• Changes in U.S. federal income tax law could make some of the Company’s products less attractive to consumers and increase its tax costs.

• The Company may be subject to litigation resulting in substantial awards or settlements and this may adversely affect its reputation and results of operations.

• The Company’s risk management policies and procedures may leave it exposed to unidentified or unanticipated risk, which could adversely affect its business, results of operations, and financial condition.

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• The Company may experience difficulty in marketing and distributing products through its current and future distribution channels.

• A failure in cyber or information security systems could result in a loss or disclosure of confidential information, damage the Company’s reputation, and could impair its ability to conduct business effectively.

• The Company could face difficulties, unforeseen liabilities, or asset impairments arising from business acquisitions or integrations and managing growth of such businesses.

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Item 6.Exhibits

The documents identified below are filed as a part of this report:

Index to Exhibits

Exhibit Number	Title
31.1	Rule 13a-14(a)/15-d14(a) Certification
31.2	Rule 13a-14(a)/15-d14(a) Certification
32	18 U.S.C. 1350 Certification
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Great-West Life & Annuity Insurance Company

By:	/s/	Kara Roe	Date:	November 10, 2016
		Kara Roe
		Vice President, Controller, and Principal Accounting Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert L. Reynolds, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Great-West Life & Annuity Insurance Company (the “registrant”);

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control of financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 10, 2016
/s/	Robert L. Reynolds
	Robert L. Reynolds
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Andra Bolotin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Great-West Life & Annuity Insurance Company (the “registrant”);

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control of financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 10, 2016
/s/	Andra Bolotin
	Andra Bolotin
	Senior Vice President, Chief Financial Officer, and Principal Financial Officer

EX-32

Exhibit 32

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Great-West Life & Annuity Insurance Company, a Colorado corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	November 10, 2016	/s/	Robert L. Reynolds
			Robert L. Reynolds
			President and Chief Executive Officer
Dated:	November 10, 2016	/s/	Andra Bolotin
			Andra Bolotin
			Senior Vice President, Chief Financial Officer, and Principal Financial Officer

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Document and Entity Information
Entity Registrant Name	GREAT WEST LIFE & ANNUITY INSURANCE CO
Entity Central Index Key	0000744455
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		7,232,986

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $19,455,887 and $20,007,462)	$ 20,826,141	$ 20,531,627
Fixed maturities, held-for-trading, at fair value (amortized cost $392,407 and $612,899)	398,880	615,839
Mortgage loans on real estate (net of allowances of $2,882 and $2,890)	3,568,114	3,247,704
Policy loans	4,056,284	4,092,661
Short-term investments (amortized cost $2,314,307 and $267,026)	2,314,307	267,026
Limited partnership and other corporation interests	35,935	40,980
Other investments	15,023	15,189
Total investments	31,214,684	28,811,026
Other assets:
Cash	53,291	34,362
Reinsurance receivable	605,419	604,946
Deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”)	322,671	414,143
Investment income due and accrued	304,924	283,183
Collateral under securities lending agreements	99,404	0
Due from parent and affiliates	80,882	62,596
Goodwill	137,683	137,683
Other intangible assets	20,940	23,819
Other assets	1,063,101	874,918
Assets of discontinued operations	18,914	21,910
Separate account assets	27,775,827	26,631,193
Total assets	61,697,740	57,899,779
Policy benefit liabilities:
Future policy benefits	28,728,131	27,110,981
Policy and contract claims	379,670	354,899
Policyholders’ funds	254,712	299,577
Provision for policyholders’ dividends	53,429	55,481
Undistributed earnings on participating business	21,154	17,024
Total policy benefit liabilities	29,437,096	27,837,962
General liabilities:
Due to parent and affiliates	538,672	540,310
Commercial paper	99,971	93,371
Payable under securities lending agreements	99,404	0
Deferred income tax liabilities, net	400,844	137,116
Other liabilities	935,419	755,651
Liabilities of discontinued operations	18,914	21,910
Separate account liabilities	27,775,827	26,631,193
Total liabilities	59,306,147	56,017,513
Commitments and contingencies (See Note 13)
Stockholder’s equity:
Preferred stock, $1 par value, 50,000,000 shares authorized; none issued and outstanding	0	0
Common stock, $1 par value, 50,000,000 shares authorized; 7,232,986 shares issued and outstanding	7,233	7,233
Additional paid-in capital	842,979	840,874
Accumulated other comprehensive income	653,912	233,438
Retained earnings	887,469	800,721
Total stockholder’s equity	2,391,593	1,882,266
Total liabilities and stockholder’s equity	$ 61,697,740	$ 57,899,779

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Fixed maturities, available-for-sale, amortized cost (in dollars)	$ 19,455,887	$ 20,007,462
Fixed maturities, held for trading, amortized cost (in dollars)	392,407	612,899
Mortgage loans on real estate, allowances (in dollars)	2,882	2,890
Short-term investments, available-for-sale, amortized cost (in dollars)	$ 2,314,307	$ 267,026
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, number of shares authorized	50,000,000	50,000,000
Preferred stock, number of shares issued	0	0
Preferred stock, number of shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, number of shares authorized	50,000,000	50,000,000
Common stock, number of shares issued	7,232,986	7,232,986
Common stock, number of shares outstanding	7,232,986	7,232,986

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Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Premium income	$ 146,100	$ 154,017	$ 377,845	$ 374,437
Fee income	246,413	225,242	709,844	688,020
Other revenue	3,228	1,820	9,747	5,460
Net investment income	291,539	363,057	979,080	942,082
Realized investment gains (losses), net:
Total other-than-temporary gains (losses), net	0	(363)	(536)	(921)
Other-than-temporary (gains) losses, net, transferred to other comprehensive income (loss)	0	0	0	108
Other realized investment gains (losses), net	33,374	22,914	107,193	57,423
Total realized investment gains (losses), net	33,374	22,551	106,657	56,610
Total revenues	720,654	766,687	2,183,173	2,066,609
Benefits and expenses:
Life and other policy benefits	172,855	176,926	529,985	486,950
Increase (decrease) in future policy benefits	7,540	20,226	(75,221)	(5,482)
Interest credited or paid to contractholders	154,248	147,177	455,018	433,829
Provision for policyholders’ share of (losses) earnings on participating business	(106)	44	(525)	(457)
Dividends to policyholders	12,324	13,241	37,619	42,763
Total benefits	346,861	357,614	946,876	957,603
General insurance expenses	307,329	263,608	878,367	776,735
Amortization of DAC and VOBA	3,504	37,538	40,397	65,245
Interest expense	7,648	9,646	26,051	28,928
Total benefits and expenses	665,342	668,406	1,891,691	1,828,511
Income before income taxes	55,312	98,281	291,482	238,098
Income tax expense	15,295	30,708	79,043	78,926
Net income	$ 40,017	$ 67,573	$ 212,439	$ 159,172

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income		$ 40,017	$ 67,573	$ 212,439	$ 159,172
Components of other comprehensive income (loss)
Unrealized holding gains (losses), net, arising on available-for-sale fixed maturity investments		55,849	(5,568)	895,589	(318,529)
Unrealized holding gains (losses), net, arising on cash flow hedges		(7,805)	14,804	(3,307)	15,326
Reclassification adjustment for (gains) losses, net, realized in net income		(10,284)	(8,036)	(61,375)	(43,511)
Net unrealized gains (losses) related to investments		37,760	1,200	830,907	(346,714)
Future policy benefits, DAC and VOBA adjustments		(18,214)	(2,383)	(190,985)	42,075
Employee benefit plan adjustment		2,494	3,098	6,962	8,635
Other comprehensive income (loss) before income taxes		22,040	1,915	646,884	(296,004)
Income tax expense (benefit) related to items of other comprehensive income (loss)		7,715	669	226,410	(103,603)
Other comprehensive income (loss)	[1]	14,325	1,246	420,474	(192,401)
Total comprehensive income (loss)		54,342	68,819	632,913	(33,229)
Non-credit component of impaired gains on fixed maturities available-for-sale		$ (959)	$ (1,979)	$ (5,326)	$ (3,208)

[1] Other comprehensive income (loss) includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(959) and $(1,979) for the three months ended September 30, 2016, and 2015, respectively, and $(5,326) and $(3,208) for the nine months ended September 30, 2016, and 2015, respectively.

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Condensed Consolidated Statements of Stockholder's Equity - USD ($) $ in Thousands	Total		Common stock	Additional paid-in capital	Accumulated other comprehensive income	Retained earnings
Beginning balance at Dec. 31, 2014	$ 2,137,513		$ 7,032	$ 777,664	$ 603,018	$ 749,799
Increase (Decrease) in Stockholder's Equity
Net income	159,172					159,172
Other comprehensive income (loss), net of income taxes	(192,401)	[1]			(192,401)
Dividends	(139,711)					(139,711)
Capital contribution - stock-based compensation	1,247			1,247
Income tax benefit on stock-based compensation	1,031			1,031
Ending balance at Sep. 30, 2015	1,966,851		7,032	779,942	410,617	769,260
Beginning balance at Dec. 31, 2015	1,882,266		7,233	840,874	233,438	800,721
Increase (Decrease) in Stockholder's Equity
Net income	212,439					212,439
Other comprehensive income (loss), net of income taxes	420,474	[1]			420,474
Dividends	(125,691)					(125,691)
Capital contribution - stock-based compensation	1,637			1,637
Income tax benefit on stock-based compensation	468			468
Ending balance at Sep. 30, 2016	$ 2,391,593		$ 7,233	$ 842,979	$ 653,912	$ 887,469

[1] Other comprehensive income (loss) includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(959) and $(1,979) for the three months ended September 30, 2016, and 2015, respectively, and $(5,326) and $(3,208) for the nine months ended September 30, 2016, and 2015, respectively.

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net cash provided by operating activities	$ 559,179	$ 575,631
Proceeds from sales, maturities and redemptions of investments:
Fixed maturities, available-for-sale	4,829,009	4,196,254
Mortgage loans on real estate	310,664	277,454
Limited partnership interests, other corporation interests and other investments	9,386	4,001
Purchases of investments:
Fixed maturities, available-for-sale	(4,138,915)	(2,791,939)
Mortgage loans on real estate	(626,431)	(233,924)
Limited partnership interests, other corporation interests and other investments	(5,491)	(1,496)
Net change in short-term investments	(1,988,191)	(2,198,699)
Net change in policy loans	5,980	(7,481)
Purchases of furniture, equipment and software	(33,405)	(60,321)
Net cash used in investing activities	(1,637,394)	(816,151)
Cash flows from financing activities:
Contract deposits	2,756,047	1,760,310
Contract withdrawals	(1,500,963)	(1,308,587)
Net change in due to/from parent and affiliates	(19,924)	(15,686)
Dividends paid	(125,691)	(139,711)
Payments for and interest paid on financing element derivatives, net	(5,281)	(8,027)
Contingent consideration	(14,233)	0
Net change in commercial paper borrowings	6,600	(2,305)
Net change in book overdrafts	121	(1,164)
Income tax benefit on share-based compensation	468	1,031
Net cash provided by financing activities	1,097,144	285,861
Net increase in cash	18,929	45,341
Cash, beginning of year	34,362	12,775
Cash, end of period	53,291	58,116
Net cash paid during the year for:
Income taxes	(24,118)	(29,791)
Interest	(21,685)	(18,697)
Non-cash investing and financing transactions during the years:
Share-based compensation expense	$ 1,637	$ 1,247

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Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Organization

Great-West Life & Annuity Insurance Company (“GWLA”) and its subsidiaries (collectively, the “Company”) is a direct wholly-owned subsidiary of GWL&A Financial Inc. (“GWL&A Financial”), a holding company.  GWL&A Financial is a direct wholly-owned subsidiary of Great-West Lifeco U.S. Inc. (“Lifeco U.S.”) and an indirect wholly-owned subsidiary of Great-West Lifeco Inc. (“Lifeco”), a Canadian holding company.  The Company offers a wide range of life insurance, retirement, and investment products to individuals, businesses, and other private and public organizations throughout the United States. The Company is an insurance company domiciled in the State of Colorado and is subject to regulation by the Colorado Division of Insurance.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries over which it exercises control and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2015, which was derived from the Company’s audited consolidated financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016, have been prepared in accordance with the instructions for Form 10-Q.  In compliance with those instructions, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  As such, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

In the opinion of management, these statements include all normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of September 30, 2016, and for all periods presented. The condensed consolidated results of operations and condensed consolidated statement of cash flows for the nine months ended September 30, 2016, are not necessarily indicative of the results or cash flows expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Acquisitions

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Acquisitions

Acquisitions

Putnam Retirement Business

Description of transaction

On January 1, 2015, the Company acquired the retirement business of Putnam Investments, LLC (“Putnam”), an affiliate of the Company. The transaction was accounted for as a combination between entities under common control. As such, the assets and liabilities acquired from Putnam were recorded at historical cost as of January 1, 2015. In exchange for cash paid in the amount of $4,114, the Company acquired $11,501 of other assets, assumed $7,717 of other liabilities, and recognized a dividend of $330.

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Application of Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Application of Recent Accounting Pronouncements

Application of Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis. The update primarily amends the criteria used to evaluate whether certain variable interest entities (“VIEs”) should be consolidated. The update also modifies the criteria used to determine whether partnerships and similar entities are VIEs. The update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted, including in the interim periods. The adoption of this ASU did not have a material effect on the Company’s consolidated financial position or results of operations; however, the Company has additional investments that meet the definition of VIE under this update.  As such, the guidance was retrospectively applied and the December 31, 2015 carrying value and maximum exposure to loss in relation to the activities of the VIEs disclosed in Note 5 includes an additional $35,776 to conform to the current period presentation.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The update requires the Company to determine if the cloud computing arrangement contains a software license and if so, apply the accounting requirements for other intangible assets. The update also supersedes the requirement to apply lease accounting requirements by analogy for lease classification. If the arrangement is not a software license, then the Company applies accounting requirements for a service requirement. The update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted. The adoption of this ASU did not have a material effect on the Company’s consolidated financial position or results of operations.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”).  The update required assets being valued using net asset value (“NAV”) as a practical expedient to be excluded from the fair value hierarchy table.  The update is effective for interim and annual periods beginning after December 15, 2015.  The adoption of this ASU did not have an impact on the Company’s consolidated financial position or results of operations; however, the Company has investments in separate accounts for which fair value is estimated using NAV as a practical expedient.  As such, for the period ended September 30, 2016, the Company has retroactively applied this guidance as required by the ASU and removed $533,961 from the December 31, 2015, Level 2 investments in separate accounts in the fair value hierarchy table in Note 8 to conform to current period presentation. 

Future adoption of new accounting pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The update outlines a comprehensive accounting model for revenue arising from customer contracts and supersedes most current revenue recognition guidance, including industry-specific guidance. While the update does not apply to insurance contracts within the scope of Topic 944, it does apply to other fee income earned by the Company which includes fees from assets under management, assets under administration, shareholder servicing, administration and record-keeping services, and investment advisory services. The core principle of the model requires that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The update also requires increased disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The FASB has also issued several updates to ASU 2014-09 including ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (improving theoperability and understandability of the implementation guidance on principal versus agent considerations), ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (reducing thecost and complexity of applying the guidance on identifying promised goods or services and to improve the operability and understandability of the licensing implementation guidance), and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients (amending the guidance on collectability, non cash consideration, presentation of sales tax, and transition). In adopting ASU 2014-09, the Company may use either a full retrospective or a modified retrospective approach. The update is effective for public business entities for interim and annual periods beginning after December 15, 2017. Early adoption is permitted as of accounting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts. The update requires that all years in the claims development table that precede the current reporting period and the related disclosure about the history of claims duration should be presented as required supplementary information.  The update also includes a disclosure objective of providing information about claim frequency along with a description of methodologies for determining claim frequency information, unless it is impracticable to do so.  The update is effective for annual reporting periods beginning after December 15, 2015, and for interim reporting periods within annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments by requiring equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income, simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, use of exit price notion when measuring the fair value of financial instruments for disclosure purposes, separate presentation of financial assets and liabilities by measurement category and form of financial assets (i.e. securities or loans and receivables) on the balance sheet or notes to the financial statements, eliminating the requirement to disclose the method and significant assumptions used to estimate fair value of a financial instrument measured at amortized cost on the balance sheet, requiring entities to present separately in other comprehensive income the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (i.e. “own credit”) when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, and clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.  The update iseffective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The ASU also permits early adoption of the own credit provision.  The Company is currently evaluating the impact of this update on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. This ASU is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivative Contract Novations. The amendments clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in critical term of the hedging relationship. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures. The amendments simplify the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Account. The amendments simplify several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and cash flow statements. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard amends guidance on the impairment of financial instruments by adding an impairment model that is based on expected losses rather than incurred losses and is intended to result in more timely recognition of losses. The standard also simplifies the accounting by decreasing the number of credit impairment models that an entity can use to account for debt instruments. The update is effective for fiscal years and interim periods within those beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The standard amends the guidance on the classification of certain cash receipts and payments on the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions from equity method investees, beneficial interests in securitized transactions, and separately identifiable cash flows and application of the predominance principle. The update is effective for fiscal years and interim periods within those beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

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Dividends

9 Months Ended

Sep. 30, 2016

Dividends [Abstract]

Dividends

Dividends

The maximum amount of dividends, which can be paid to stockholders by insurance companies domiciled in the State of Colorado, is subject to restrictions relating to statutory surplus and statutory net gain from operations.  Prior to the payment of any dividends, the Company seeks approval from the Colorado Insurance Commissioner.  During the nine months ended September 30, 2016, and 2015, the Company paid dividends of $125,691 and $139,711, respectively, to its parent, GWL&A Financial.

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Summary of Investments

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Summary of Investments

Summary of Investments

The following tables summarize fixed maturity investments classified as available-for-sale and the non-credit-related component of other-than-temporary impairments (“OTTI”) in accumulated other comprehensive income (loss) (“AOCI”): 

	September 30, 2016
	Amortized		Gross unrealized		Gross unrealized		Estimated fair value		OTTI (gain) loss
Fixed maturities:	cost		gains		losses		and carrying value		included in AOCI (1)
U.S. government direct obligations and U.S. agencies	$	1,046,224	$	81,922	$	144	$	1,128,002	$	—
Obligations of U.S. states and their subdivisions	1,928,679		322,860		329		2,251,210		—
Foreign government securities	2,167		—		3		2,164		—
Corporate debt securities (2)	13,618,838		913,997		128,748		14,404,087		(1,650		)
Asset-backed securities	1,473,550		133,681		10,569		1,596,662		(77,118		)
Residential mortgage-backed securities	93,656		3,389		328		96,717		(33		)
Commercial mortgage-backed securities	1,162,680		56,854		2,456		1,217,078		—
Collateralized debt obligations	130,093		166		38		130,221		—
Total fixed maturities	$	19,455,887	$	1,512,869	$	142,615	$	20,826,141	$	(78,801	)

⁽¹⁾  Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses.  OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

⁽²⁾ Includes perpetual debt investments with amortized cost of $135,187 and estimated fair value of $111,978.

	December 31, 2015
	Amortized		Gross unrealized		Gross unrealized		Estimated fair value		OTTI (gain) loss
Fixed maturities:	cost		gains		losses		and carrying value		included in AOCI (1)
U.S. government direct obligations and U.S. agencies	$	3,291,167	$	55,193	$	4,608	$	3,341,752	$	—
Obligations of U.S. states and their subdivisions	1,988,214		238,862		7,903		2,219,173		50
Foreign government securities	2,291		—		5		2,286		—
Corporate debt securities (2)	12,388,886		437,207		320,381		12,505,712		(1,810		)
Asset-backed securities	1,196,326		128,406		13,362		1,311,370		(86,474		)
Residential mortgage-backed securities	122,146		4,734		1,508		125,372		(123		)
Commercial mortgage-backed securities	1,009,320		19,117		11,529		1,016,908		—
Collateralized debt obligations	9,112		—		58		9,054		—
Total fixed maturities	$	20,007,462	$	883,519	$	359,354	$	20,531,627	$	(88,357	)

⁽¹⁾  Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses.  OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

⁽²⁾ Includes perpetual debt investments with amortized cost of $149,062 and estimated fair value of $116,423.

See Note 8 for additional discussion regarding fair value measurements.

The amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale, based on estimated cash flows, are shown in the table below.  Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 

	September 30, 2016
	Amortized cost		Estimated fair value
Maturing in one year or less	$	654,368	$	680,991
Maturing after one year through five years	3,780,675		4,030,915
Maturing after five years through ten years	6,312,627		6,719,852
Maturing after ten years	5,138,873		5,613,359
Mortgage-backed and asset-backed securities	3,569,344		3,781,024
Total fixed maturities	$	19,455,887	$	20,826,141

Mortgage-backed (commercial and residential) and asset-backed securities include those issued by the U.S. government and U.S. agencies.

The following table summarizes information regarding the sales of securities classified as available-for-sale: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Proceeds from sales	$	421,245	$	192,100	$	3,777,445	$	3,187,977
Gross realized gains from sales	8,487		6,632		55,154		38,567
Gross realized losses from sales	24		478		170		802

Mortgage loans on real estate — The following table summarizes the carrying value of the mortgage loan portfolio by component:  

	September 30, 2016			December 31, 2015
Principal	$	3,565,454		$	3,242,627
Unamortized premium (discount) and fees, net	6,530			7,967
Foreign exchange translation	(988		)	—
Mortgage provision allowance	(2,882		)	(2,890		)
Total mortgage loans	$	3,568,114		$	3,247,704

The following table summarizes the recorded investment of the mortgage loan portfolio by risk assessment category as of September 30, 2016, and December 31, 2015, respectively. 

	September 30, 2016		December 31, 2015
Performing	$	3,569,531	$	3,249,129
Non-performing	1,465		1,465
Total	$	3,570,996	$	3,250,594

The following table summarizes activity in the mortgage provision allowance:

	Nine Months Ended September 30, 2016			Year Ended December 31, 2015
	Commercial mortgages			Commercial mortgages
Beginning balance	$	2,890		$	2,890
Provision increases	536			—
Provision decreases	(544		)	—
Ending balance	$	2,882		$	2,890
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	$	536		$	—
Collectively evaluated for impairment	2,346			2,890
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$	3,570,996		$	3,250,594
Individually evaluated for impairment	4,039			14,031
Collectively evaluated for impairment	3,566,957			3,236,563

Limited partnership and other corporationinterests — At September 30, 2016, and December 31, 2015, the Company had $35,935 and $40,980, respectively, invested in limited partnership and other corporation interests. Limited partnership interests represent the Company’s minority ownership interests in pooled investment funds that primarily make private equity investments across diverse industries and geographical focuses. The Company has determined its interest in each limited partnership to be considered a variable interest entity (“VIE”). Consolidation is not required as the Company is not deemed to be the primary beneficiary of the VIEs.

The carrying value and maximum exposure to loss in relation to the activities of the VIEs was $33,484 and $38,504 at September 30, 2016, and December 31, 2015, respectively.

Special deposits — The Company had securities on deposit with government authorities as required by certain insurance laws with fair values of $8,146 and $14,000 at September 30, 2016, and December 31, 2015, respectively.

Securities lending — Securities with a cost or amortized cost of $156,098 and estimated fair values of $160,351 were on loan under the program at September 30, 2016. There were no securities on loan at December 31, 2015.  The Company received cash of $99,404 and securities with a fair value of $66,259 as collateral at September 30, 2016. The Company bears the risk of any deficiency in the amount of collateral available for return to a borrower due to a loss in an approved investment.

Under the securities lending program the collateral pledged is, by definition, the securities loaned against the cash borrowed. The following table summarizes the cash collateral liability under the securities lending program, by class of collateral pledged:

	September 30, 2016		December 31, 2015
Cash collateral liability by class of loaned security
U.S. government direct obligations and U.S. agencies	$	6,220	$	—
Foreign government securities	1,063		—
Corporate debt securities	92,121		—
Total	$	99,404	$	—

The Company’s securities lending agreements are open agreements meaning the borrower can return and the Company can recall the loaned securities at any time. The assets and liabilities associated with securities lending program are not subject to master netting arrangements and are not offset in the condensed consolidated balance sheets.

Unrealized losses on fixed maturity investments classified as available-for-sale — The following tables summarize unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment:

	September 30, 2016
	Less than twelve months				Twelve months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Fixed maturities:	fair value		loss and OTTI		fair value		loss and OTTI		fair value		loss and OTTI
U.S. government direct obligations and U.S. agencies	$	15,444	$	21	$	11,155	$	123	$	26,599	$	144
Obligations of U.S. states and their subdivisions	8,841		110		10,656		219		19,497		329
Foreign government securities	2,164		3		—		—		2,164		3
Corporate debt securities	835,440		26,089		876,692		102,659		1,712,132		128,748
Asset-backed securities	338,576		3,289		208,678		7,280		547,254		10,569
Residential mortgage-backed securities	7,145		4		16,106		324		23,251		328
Commercial mortgage-backed securities	113,741		889		27,563		1,567		141,304		2,456
Collateralized debt obligations	45,552		38		—		—		45,552		38
Total fixed maturities	$	1,366,903	$	30,443	$	1,150,850	$	112,172	$	2,517,753	$	142,615
Total number of securities in an unrealized loss position			136				124				260

	December 31, 2015
	Less than twelve months				Twelve months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Fixed maturities:	fair value		loss and OTTI		fair value		loss and OTTI		fair value		loss and OTTI
U.S. government direct obligations and U.S. agencies	$	1,357,822	$	4,101	$	23,604	$	507	$	1,381,426	$	4,608
Obligations of U.S. states and their subdivisions	267,581		7,903		—		—		267,581		7,903
Foreign government securities	2,286		5		—		—		2,286		5
Corporate debt securities	4,412,965		202,874		552,791		117,507		4,965,756		320,381
Asset-backed securities	247,082		4,372		182,404		8,990		429,486		13,362
Residential mortgage-backed securities	—		—		18,625		1,508		18,625		1,508
Commercial mortgage-backed securities	429,175		11,154		44,498		375		473,673		11,529
Collateralized debt obligations	9,054		58		—		—		9,054		58
Total fixed maturities	$	6,725,965	$	230,467	$	821,922	$	128,887	$	7,547,887	$	359,354
Total number of securities in an unrealized loss position			558				106				664

Fixed maturity investments — Total unrealized losses and OTTI decreased by $216,739, or 60%, from December 31, 2015, to September 30, 2016. The majority, or $200,024, of the decrease was in the less than twelve months category. The overall decrease in unrealized losses was across all asset classes and reflects lower interest rates at September 30, 2016, compared to December 31, 2015, resulting in generally higher valuations of these fixed maturity securities.

Total unrealized losses greater than twelve months decreased by $16,715 from December 31, 2015, to September 30, 2016.  Corporate debt securities account for 92%, or $102,659, of the unrealized losses and OTTI greater than twelve months at September 30, 2016.  Non-investment grade corporate debt securities account for $13,441 of the unrealized losses and OTTI greater than twelve months, and $7,572 of the losses are on perpetual debt investments issued by investment grade rated banks in the United Kingdom.  Management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings.

Asset-backed securities account for 7% of the unrealized losses and OTTI greater than twelve months at September 30, 2016.  The present value of the cash flows expected to be collected is not less than amortized cost and management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings.

Other-than-temporary impairment recognition — The OTTI on fixed maturity securities where the loss portion is bifurcated and the credit related component is recognized in realized investment gains (losses) is summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Beginning balance	$	94,687		$	106,913		$	102,343		$	119,532
Initial impairments - credit loss on securities not previously impaired	—			—			—			450
Reductions:
Due to sales, maturities or payoffs during the period	—			(521		)	—			(521		)
Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(4,405		)	(13,057		)	(12,061		)	(26,126		)
Ending balance	$	90,282		$	93,335		$	90,282		$	93,335

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Derivative transactions are generally entered into pursuant to International Swaps and Derivatives Association (“ISDA”) Master Agreements or Master Securities Forward Transaction Agreements (“MSFTA”) with approved counterparties that provide for a single net payment to be made by one party to the other on a daily basis, periodic payment dates, or at the due date, expiration, or termination of the agreement.

The ISDA Master Agreements contain provisions that would allow the counterparties to require immediate settlement of all derivative instruments in a net liability position if the Company were to default on any debt obligations over a certain threshold.  The MSFTA contain provisions which do not stipulate a threshold for default and only apply to debt obligations between the Company and the specific counterparty.  The aggregate fair value, inclusive of accrued income and expense, of derivative instruments with credit-risk-related contingent features that were in a net liability position was $69,984 and $76,107 as of September 30, 2016, and December 31, 2015, respectively.  The Company had pledged collateral related to these derivatives of $28,526 and $45,940 as of September 30, 2016, and December 31, 2015, respectively, in the normal course of business.  If the credit-risk-related contingent features were triggered on September 30, 2016, the fair value of assets that could be required to settle the derivatives in a net liability position was $41,458.

At September 30, 2016, and December 31, 2015, the Company had pledged $28,526 and $50,924 of unrestricted cash collateral to counterparties in the normal course of business, while other counterparties had pledged $80,630 and $19,060 of unrestricted cash collateral to the Company to satisfy collateral netting agreements, respectively.

At September 30, 2016, the Company estimated $7,972 of net derivative gains related to cash flow hedges included in AOCI will be reclassified into net income within the next twelve months. Gains and losses included in AOCI are reclassified into net income when the hedged item affects earnings.

Types of derivative instruments and derivative strategies

Interest rate contracts

Cash flow hedges

Interest rate swap agreements are used to convert the interest rate on certain debt security investments and debt obligations from a floating rate to a fixed rate.  Interest rate futures are used to manage the interest rate risks of forecasted acquisitions of fixed rate maturity investments and are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities.

Fair value hedges

Interest rate swap agreements are used to convert the interest rate on certain debt securities from a fixed rate to a floating rate to manage the interest rate risk of the change in the fair value of certain fixed rate maturity investments.

Not designated as hedging instruments

The Company enters into certain transactions in which derivatives are hedging an economic risk but hedge accounting is not elected.  These derivative instruments include:  exchange-traded interest rate swap futures, over-the-counter (“OTC”) interest rate swaptions, OTC interest rate swaps, exchange-traded Eurodollar interest rate futures, and treasury interest rate futures.  Certain of the Company’s OTC derivatives are cleared and settled through a central clearing counterparty while others are bilateral contracts between the Company and a counterparty.

The derivative instruments mentioned above are economic hedges and used to manage risk.  These transactions are used to offset changes in liabilities including those in variable annuity products, hedge the economic effect of a large increase in interest rates, manage the potential variability in future interest payments due to a change in credited interest rates and the related change in cash flows due to increased surrenders, and manage interest rate risks of forecasted acquisitions of fixed rate maturity investments and forecasted liability pricing.

Cross-currency contracts

Cross-currency swaps are used to manage the foreign currency exchange rate risk associated with investments denominated in other than U.S. dollars.  The Company uses cross-currency swaps to convert interest and principal payments on foreign denominated debt instruments into U.S. dollars.  Cross-currency swaps may be designated as cash flow hedges; however, hedge accounting is not always elected.

Equity contracts

The Company uses futures on equity indices to offset changes in guaranteed lifetime withdrawal benefit liabilities; however, hedge accounting is not elected.

Other forward contracts

The Company uses forward settling to be announced (“TBA”) securities to gain exposure to the investment risk and return of agency mortgage-backed securities (pass-throughs). These transactions enhance the return on the Company’s investment portfolio and provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual agency mortgage-backed pools.  As the Company does not regularly accept delivery of such securities, they are accounted for as derivatives but hedge accounting is not elected. 

The following tables summarize the notional amount and fair value of derivative financial instruments, excluding embedded derivatives:

	September 30, 2016
			Net derivatives			Asset derivatives		Liability derivatives
	Notional amount		Fair value			Fair value (1)		Fair value (1)
Hedge designation/derivative type:
Derivatives designated as hedges:
Cash flow hedges:
Interest rate swaps	$	419,800	$	(13,852	)	$	13,490	$	27,342
Cross-currency swaps	561,467		46,194			51,284		5,090
Total cash flow hedges	981,267		32,342			64,774		32,432
Total derivatives designated as hedges	981,267		32,342			64,774		32,432
Derivatives not designated as hedges:
Interest rate swaps	480,100		22,921			32,982		10,061
Futures on equity indices	24,260		—			—		—
Interest rate futures	107,400		—			—		—
Interest rate swaptions	166,664		191			191		—
Other forward contracts	2,437,760		7,268			7,891		623
Cross-currency swaps	662,935		14,700			41,528		26,828
Total derivatives not designated as hedges	3,879,119		45,080			82,592		37,512
Total derivative financial instruments	$	4,860,386	$	77,422		$	147,366	$	69,944

⁽¹⁾ The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets.

	December 31, 2015
			Net derivatives			Asset derivatives		Liability derivatives
	Notional amount		Fair value			Fair value (1)		Fair value (1)
Hedge designation/derivative type:
Derivatives designated as hedges:
Cash flow hedges:
Interest rate swaps	$	143,800	$	11,843		$	11,843	$	—
Cross-currency swaps	380,873		28,714			28,736		22
Total cash flow hedges	524,673		40,557			40,579		22
Total derivatives designated as hedges	524,673		40,557			40,579		22
Derivatives not designated as hedges:
Interest rate swaps	303,600		3,240			8,295		5,055
Futures on equity indices	29,310		—			—		—
Interest rate futures	117,200		—			—		—
Interest rate swaptions	151,204		189			189		—
Cross-currency swaps	662,935		(51,759		)	19,537		71,296
Total derivatives not designated as hedges	1,264,249		(48,330		)	28,021		76,351
Total derivative financial instruments	$	1,788,922	$	(7,773	)	$	68,600	$	76,373

⁽¹⁾ The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets.

Notional amounts are used to express the extent of the Company’s involvement in derivative transactions and represent a standard measurement of the volume of its derivative activity.  Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received. The average notional outstanding during the nine months endedSeptember 30, 2016, was $752,800, $1,110,757, $149,391, $153,961, and $2,645,834 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively. The average notional outstanding during the year ended December 31, 2015, was $443,589, $937,242, $111,801, $212,299, and $5,014,845 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively.

The following tables present the effect of derivative instruments in the condensed consolidated statements of income reported by cash flow hedges, fair value hedges, and economic hedges, excluding embedded derivatives: 

	Gain (loss) recognized in OCI on derivatives (Effective portion)						Gain (loss) reclassified from OCI into net income (Effective portion)
	Three Months Ended September 30,						Three Months Ended September 30,
	2016			2015			2016			2015
Cash flow hedges:
Interest rate swaps	$	(401	)	$	(937	)	$	1,335		$	1,490		(A)
Interest rate swaps	(4,284		)	—			(1,092		)	—			(B)
Cross-currency swaps	(3,120		)	15,741			1,576			630			(A)
Interest rate futures	—			—			—			(21		)	(A)
Total cash flow hedges	$	(7,805	)	$	14,804		$	1,819		$	2,099

(A) Net investment income.

(B) Interest expense.

	Gain (loss) recognized in OCI on derivatives (Effective portion)						Gain (loss) reclassified from OCI into net income (Effective portion)
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cash flow hedges:
Interest rate swaps	$	4,098		$	(311	)	$	4,166		$	5,183		(A)
Interest rate swaps	(29,017		)	—			(1,675		)	—			(B)
Cross-currency swaps	21,612			15,637			3,777			1,329			(A)
Interest rate futures	—			—			—			(64		)	(A)
Total cash flow hedges	$	(3,307	)	$	15,326		$	6,268		$	6,448

(A) Net investment income.

(B) Interest expense.

	Gain (loss) on derivatives recognized in net income						Gain (loss) on hedged assets recognized in net income
	Three Months Ended September 30,						Three Months Ended September 30,
	2016		2015				2016		2015
Fair value hedges:
Interest rate swaps	$	—	$	(620	)	(A)	$	—	$	—
Interest rate swaps	—		323			(B)	—		—
Items hedged in interest rate swaps	—		—				—		623			(A)
Items hedged in interest rate swaps	—		—				—		(323		)	(B)
Total fair value hedges	$	—	$	(297	)		$	—	$	300

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income						Gain (loss) on hedged assets recognized in net income
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016		2015				2016		2015
Fair value hedges:
Interest rate swaps	$	—	$	(1,489	)	(A)	$	—	$	—
Interest rate swaps	—		765			(B)	—		—
Items hedged in interest rate swaps	—		—				—		1,493			(A)
Items hedged in interest rate swaps	—		—				—		(765		)	(B)
Total fair value hedges	$	—	$	(724	)		$	—	$	728

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income
	Three Months Ended September 30,
	2016				2015
Derivatives not designated as hedging instruments:
Futures on equity indices	$	510		(A)	$	478		(A)
Futures on equity indices	(2,081		)	(B)	1,111			(B)
Interest rate swaps	418			(A)	6,480			(A)
Interest rate futures	134			(A)	(99		)	(A)
Interest rate futures	(183		)	(B)	(117		)	(B)
Interest rate swaptions	23			(A)	928			(A)
Interest rate swaptions	(39		)	(B)	—			(B)
Other forward contracts	(8,286		)	(A)	32,538			(A)
Other forward contracts	19,413			(B)	8,504			(B)
Cross-currency swaps	1,872			(A)	36,845			(A)
Total derivatives not designated as hedging instruments	$	11,781			$	86,668

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income
	Nine Months Ended September 30,
	2016				2015
Derivatives not designated as hedging instruments:
Futures on equity indices	$	103		(A)	$	896		(A)
Futures on equity indices	(5,358		)	(B)	122			(B)
Interest rate swaps	19,727			(A)	553			(A)
Interest rate futures	(77		)	(A)	(214		)	(A)
Interest rate futures	(249		)	(B)	55			(B)
Interest rate swaptions	96			(A)	2,919			(A)
Interest rate swaptions	(256		)	(B)	(2,076		)	(B)
Other forward contracts	7,268			(A)	14,778			(A)
Other forward contracts	31,509			(B)	6,414			(B)
Cross-currency swaps	62,147			(A)	44,549			(A)
Total derivatives not designated as hedging instruments	$	114,910			$	67,996

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

Embedded derivative - Guaranteed Lifetime Withdrawal Benefit

The Company offers a guaranteed lifetime withdrawal benefit (“GLWB”) through a variable annuity or a contingent deferred annuity. The GLWB is deemed to be an embedded derivative. The GLWB is recorded at fair value within future policy benefits on the condensed consolidated balance sheets. Changes in fair value of the GLWB are recorded in net investment income in the condensed consolidated statements of income.

The estimated fair value of the GLWB was a liability position of $31,277 and $11,257 at September 30, 2016, and December 31, 2015, respectively. The changes in fair value of the GLWB were unrealized gains (losses) of $(590) and $(6,858) for the three months ended September 30, 2016, and 2015, respectively, and $(20,020) and $(3,370) for the nine months ended September 30, 2016, and 2015, respectively.

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Summary of Offsetting Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Offsetting [Abstract]

Summary of Offsetting Assets and Liabilities

Summary of Offsetting Assets and Liabilities

The Company enters into derivative transactions and short-term reverse repurchase agreements with several approved counterparties. The Company’s derivative transactions are generally governed by MSFTA or ISDA Master Agreements which provide for legally enforceable set-off and close-out netting in the event of default or bankruptcy of the Company’s counterparties.  The Company’s MSFTA and ISDA Master Agreements generally include provisions which require both the pledging and accepting of collateral in connection with its derivative transactions. These provisions have the effect of securing each party’s position to the extent of collateral held. Short-term reverse repurchase agreements also include collateral provisions with the counterparty. The following tables summarize the effect of master netting arrangements on the Company’s financial position in the normal course of business and in the event of default or bankruptcy of the Company’s counterparties: 

	September 30, 2016
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial			Cash collateral		Net
Financial instruments (assets):	recognized assets (1)		instruments			received		fair value
Derivative instruments (2)	$	123,415	$	(35,579	)	$	78,757	$	9,079
Short-term reverse repurchase agreement (3)	300,000		(300,000		)	—		—
Total financial instruments (assets)	423,415		(335,579		)	78,757		9,079

	September 30, 2016
		Gross fair value not offset
		in balance sheets
	Gross fair value of	Financial		Cash collateral	Net
Financial instruments (liabilities):	recognized liabilities (1)	instruments		pledged	fair value
Derivative instruments (4)	35,579	(35,579	)	—	—

⁽¹⁾ The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets.

⁽²⁾ The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

⁽³⁾ The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement.

⁽⁴⁾ The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

	December 31, 2015
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial			Cash collateral			Net
Financial instruments:	recognized assets/liabilities (1)		instruments			received/(pledged)			fair value
Derivative instruments (assets) (2)	$	66,435	$	(38,236	)	$	19,060		$	9,139
Derivative instruments (liabilities) (3)	76,107		(38,236		)	(37,871		)	—

⁽¹⁾ The gross fair value of derivative instrument assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets.

⁽²⁾ The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

⁽³⁾ The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Recurring fair value measurements

The following tables present the Company’s financial assets and liabilities carried at fair value on a recurring basis by fair value hierarchy category:

	Assets and liabilities measured at fair value on a recurring basis
	September 30, 2016
	Quoted prices		Significant
	in active markets for identical assets (Level 1)		other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Fixed maturities available-for-sale:
U.S. government direct obligations and U.S. agencies	$	—	$	1,128,002	$	—	$	1,128,002
Obligations of U.S. states and their subdivisions	—		2,251,210		—		2,251,210
Foreign government securities	—		2,164		—		2,164
Corporate debt securities	—		14,389,380		14,707		14,404,087
Asset-backed securities	—		1,596,662		—		1,596,662
Residential mortgage-backed securities	—		96,717		—		96,717
Commercial mortgage-backed securities	—		1,217,078		—		1,217,078
Collateralized debt obligations	—		130,221		—		130,221
Total fixed maturities available-for-sale	—		20,811,434		14,707		20,826,141
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		341,368		—		341,368
Corporate debt securities	—		56,390		—		56,390
Commercial mortgage-backed securities	—		1,122		—		1,122
Total fixed maturities held-for-trading	—		398,880		—		398,880
Short-term investments	338,051		1,976,256		—		2,314,307
Collateral under securities lending agreements	99,404		—		—		99,404
Collateral under derivative counterparty collateral agreements	109,156		—		—		109,156
Derivative instruments designated as hedges:
Interest rate swaps	—		13,490		—		13,490
Cross-currency swaps	—		51,284		—		51,284
Derivative instruments not designated as hedges:
Interest rate swaps	—		32,982		—		32,982
Interest rate swaptions	—		191		—		191
Other forward contracts	—		7,891		—		7,891
Cross-currency swaps	—		41,528		—		41,528
Total derivative instruments	—		147,366		—		147,366
Separate account assets (1)	15,580,267		11,738,559		—		27,775,827
Total assets	$	16,126,878	$	35,072,495	$	14,707	$	51,671,081
Liabilities
Payable under securities lending agreements	$	99,404	$	—	$	—	$	99,404
Collateral under derivative counterparty collateral agreements	80,630		—		—		80,630
Derivative instruments designated as hedges:
Interest rate swaps	—		27,342		—		27,342
Cross-currency swaps	—		5,090		—		5,090
Derivative instruments not designated as hedges:
Interest rate swaps	—		10,061		—		10,061
Other forward contracts	—		623		—		623
Cross-currency swaps	—		26,828		—		26,828
Total derivative instruments	—		69,944		—		69,944
Embedded derivatives - GLWB	—		—		31,277		31,277
Separate account liabilities (2)	4		517,570		—		517,574
Total liabilities	$	180,038	$	587,514	$	31,277	$	798,829

⁽¹⁾ Included in the total fair value amount are $457 million of investments as of September 30, 2016 for which the fair value is estimated using net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy in connection with the adoption of ASU 2015-07.

 ⁽²⁾ Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts.

	Assets and liabilities measured at fair value on a recurring basis
	December 31, 2015
	Quoted prices		Significant
	in active markets for identical assets (Level 1)		other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Fixed maturities available-for-sale:
U.S. government direct obligations and U.S. agencies	$	—	$	3,341,752	$	—	$	3,341,752
Obligations of U.S. states and their subdivisions	—		2,219,173		—		2,219,173
Foreign government securities	—		2,286		—		2,286
Corporate debt securities	—		12,501,174		4,538		12,505,712
Asset-backed securities	—		1,311,370		—		1,311,370
Residential mortgage-backed securities	—		125,372		—		125,372
Commercial mortgage-backed securities	—		1,016,908		—		1,016,908
Collateralized debt obligations	—		9,054		—		9,054
Total fixed maturities available-for-sale	—		20,527,089		4,538		20,531,627
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		558,208		—		558,208
Corporate debt securities	—		56,566		—		56,566
Commercial mortgage-backed securities	—		1,065		—		1,065
Total fixed maturities held-for-trading	—		615,839		—		615,839
Short-term investments	132,288		134,738		—		267,026
Collateral under derivative counterparty collateral agreements	69,984		—		—		69,984
Derivative instruments designated as hedges:
Interest rate swaps	—		11,843		—		11,843
Cross-currency swaps	—		28,736		—		28,736
Derivative instruments not designated as hedges:
Interest rate swaps	—		8,295		—		8,295
Interest rate swaptions	—		189		—		189
Cross-currency swaps	—		19,537		—		19,537
Total derivative instruments	—		68,600		—		68,600
Separate account assets (1)	15,249,966		10,847,266		—		26,631,193
Total assets	$	15,452,238	$	32,193,532	$	4,538	$	48,184,269
Liabilities
Collateral under derivative counterparty collateral agreements	$	19,060	$	—	$	—	$	19,060
Derivative instruments designated as hedges:
Cross-currency swaps	—		22		—		22
Derivative instruments not designated as hedges:
Interest rate swaps	—		5,055		—		5,055
Cross-currency swaps	—		71,296		—		71,296
Total derivative instruments	—		76,373		—		76,373
Embedded derivatives - GLWB	—		—		11,257		11,257
Separate account liabilities (2)	24		290,293		—		290,317
Total liabilities	$	19,084	$	366,666	$	11,257	$	397,007

⁽¹⁾ Included in the total fair value amount are $534 million of investments as of December 31, 2015 for which the fair value is estimated using net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy in connection with the adoption of ASU 2015-07.

⁽²⁾ Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts.

The methods and assumptions used to estimate the fair value of the Company’s financial assets and liabilities carried at fair value on a recurring basis are as follows:

Fixed maturity investments

The fair values for fixed maturity investments are generally based upon market prices from independent pricing services.  In cases where market prices are not readily available, fair values are estimated by the Company.  To determine estimated fair value for these instruments, the Company generally utilizes discounted cash flows models with market observable pricing inputs such as spreads, average life, and credit quality.  Fair value estimates are made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty.

Short-term investments and securities lending agreements

The amortized cost of short-term investments, collateral under securities lending agreements, and payable under securities lending agreements is a reasonable estimate of fair value due to their short-term nature and high credit quality of the issuers.

Collateral under derivative counterparty collateral agreements

Included in other assets is cash collateral received from or pledged to derivative counterparties and included in other liabilities is the obligation to return the cash collateral to the counterparties.  The carrying value of the collateral is a reasonable estimate of fair value.

Derivative instruments

Included in other assets and other liabilities are derivative financial instruments. The estimated fair values of OTC derivatives, primarily consisting of cross-currency swaps, interest rate swaps, interest rate swaptions, and other forward contracts, are the estimated amounts the Company would receive or pay to terminate the agreements at the end of each reporting period, taking into consideration current interest rates and other relevant factors.

Embedded derivative - GLWB

Significant unobservable inputs used in the fair value measurements of GLWB include long-term equity and interest rate implied volatility, mortality, and policyholder behavior assumptions, such as benefit utilization, lapses, and partial withdrawals.

Separate account assets and liabilities

Separate account assets and liabilities primarily include investments in mutual fund, fixed maturity, and short-term securities.  Mutual funds are recorded at net asset value, which approximates fair value, on a daily basis.  The fixed maturity and short-term investments are valued in the same manner, and using the same pricing sources and inputs as the fixed maturity and short-term investments of the Company.

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Recurring Level 3 financial assets and liabilities
	Three Months Ended September 30, 2016
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, July 1, 2016	$	15,056		$	30,687
Realized and unrealized gains (losses) included in:
Net income (loss)	—			590
Other comprehensive income (loss)	245			—
Settlements	(594		)	—
Balances, September 30, 2016	$	14,707		$	31,277
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2016	$	—		$	590

	Recurring Level 3 financial assets and liabilities
	Three Months Ended September 30, 2015
	Assets								Liabilities
	Fixed maturities  available-for-sale								Embedded
	Corporate			Asset-backed					derivatives
	debt securities			securities		Total			- GLWB
Balances, July 1, 2015	$	5,065		$	31	$	5,096		$	2,919
Realized and unrealized gains (losses) included in:
Net income (loss)	—			—		—			6,858
Other comprehensive income (loss)	(66		)	—		(66		)	—
Settlements	(216		)	9		(207		)	—
Balances, September 30, 2015	$	4,783		$	40	$	4,823		$	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2015	$	—		$	—	$	—		$	6,858

	Recurring Level 3 financial assets and liabilities
	Nine Months Ended September 30, 2016
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, January 1, 2016	$	4,538		$	11,257
Realized and unrealized gains (losses) included in:
Net income (loss)	—			20,020
Other comprehensive income (loss)	720			—
Settlements	(1,787		)	—
Transfers into Level 3 (1)	11,236			—
Balances, September 30, 2016	$	14,707		$	31,277
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2016	$	—		$	20,020

⁽¹⁾ Transfers into Level 3 are due primarily to decreased observability of inputs in valuation methodologies.

	Recurring Level 3 financial assets and liabilities
	Nine Months Ended September 30, 2015
	Assets								Liabilities
	Fixed maturities  available-for-sale								Embedded
	Corporate			Asset-backed					derivatives
	debt securities			securities		Total			- GLWB
Balances, January 1, 2015	$	5,842		$	36	$	5,878		$	6,407
Realized and unrealized gains (losses) included in:
Net income (loss)	—			—		—			3,370
Other comprehensive income (loss)	(143		)	—		(143		)	—
Settlements	(916		)	4		(912		)	—
Balances, September 30, 2015	$	4,783		$	40	$	4,823		$	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2015	$	—		$	—	$	—		$	3,370

The following tables present significant unobservable inputs used during the valuation of certain liabilities categorized within Level 3 of the recurring fair value measurements table:

	September 30, 2016
	Fair Value		Valuation Technique	Unobservable Input	Range
Embedded derivatives - GLWB	$	31,277	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%
				Swap curve	0.5% - 2.50%
				Mortality rate	Based on the Annuity 2000 Mortality Table
				Lapse rate	1% - 15%

	December 31, 2015
	Fair Value		Valuation Technique	Unobservable Input	Range
Embedded derivatives - GLWB	$	11,257	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%
				Swap curve	0.75% - 3.00%
				Mortality rate	Based on the Annuity 2000 Mortality Table
				Lapse rate	1% - 15%

Fair value of financial instruments

The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments and investments not carried at fair value on a recurring basis:

	September 30, 2016				December 31, 2015
	Carrying		Estimated		Carrying		Estimated
	amount		fair value		amount		fair value
Assets
Mortgage loans on real estate	$	3,568,114	$	3,795,123	$	3,247,704	$	3,362,496
Policy loans	4,056,284		4,056,284		4,092,661		4,092,661
Limited partnership interests	30,336		30,262		35,039		34,882
Other investments	14,293		44,723		14,596		44,723
Liabilities
Annuity contract benefits without life contingencies	$	12,254,743	$	12,357,043	$	11,104,721	$	10,839,205
Policyholders’ funds	254,712		254,712		299,577		299,577
Commercial paper	99,971		99,971		93,371		93,371
Notes payable	534,299		515,795		532,575		563,633

The methods and assumptions used to estimate the fair value of financial instruments not carried at fair value on a recurring basis are summarized as follows: 

Mortgage loans on real estate

Mortgage loan fair value estimates are generally based on discounted cash flows.  A discount rate matrix is used where the discount rate valuing a specific mortgage generally corresponds to that mortgage’s remaining term and credit quality.  Management believes the discount rate used is comparable to the credit, interest rate, term, servicing costs, and risks of loans similar to the portfolio loans that the Company would make today given its internal pricing strategy.  The estimated fair value is classified as Level 2.

Policy loans

Policy loans are funds provided to policy holders in return for a claim on the policy. The funds provided are limited to the cash surrender value of the underlying policy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of repayments, the Company believes the fair value of policy loans approximates carrying value. The estimated fair value is classified as Level 2.

Limited partnership interests

Limited partnership interests, accounted for using the cost method, represent the Company’s minority ownership interests in pooled investment funds.  These funds employ varying investment strategies that primarily make private equity investments across diverse industries and geographical focuses.  The estimated fair value was determined using the partnership financial statement reported capital account or net asset value adjusted for other relevant information which may impact the exit value of the investments.  Distributions by these investments are generated from investment gains, from operating income generated by the underlying investments of the funds, and from liquidation of the underlying assets of the funds which are estimated to be liquidated over the next one to 10 years.  The estimated fair value is classified as Level 3.

Other investments

Other investments primarily include real estate held for investment.  The estimated fair value for real estate is based on the unadjusted appraised value which includes factors such as comparable property sales, property income analysis, and capitalization rates.  The estimated fair value is classified as Level 3.

Annuity contract benefits without life contingencies

The estimated fair value of annuity contract benefits without life contingencies is estimated by discounting the projected expected cash flows to the maturity of the contracts utilizing risk-free spot interest rates plus a provision for the Company’s credit risk.  The estimated fair value is classified as Level 2.

Policyholders’ funds

The carrying amount of policyholders’ funds approximates the fair value since the Company can change the interest credited rates with 30 days notice. The estimated fair value is classified as Level 2.

Commercial paper

The amortized cost of commercial paper is a reasonable estimate of fair value due to its short-term nature and the high credit quality of the obligor.  The estimated fair value is classified as Level 2.

Notes payable

The estimated fair value of the notes payable to GWL&A Financial is based upon quoted market prices from independent pricing services of securities with characteristics similar to those of the notes payable.  The estimated fair value is classified as Level 2.

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Other Comprehensive Income

9 Months Ended

Sep. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other Comprehensive Income

Other Comprehensive Income

The following tables present the accumulated balances for each classification of other comprehensive income (loss):

	Three Months Ended September 30, 2016
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, July 1, 2016	$	855,034		$	45,316		$	(178,086	)	$	(82,677	)	$	639,587
Other comprehensive income (loss) before reclassifications	36,302			(5,074		)	(11,839		)	—			19,389
Amounts reclassified from AOCI	(5,503		)	(1,182		)	—			1,621			(5,064		)
Net current period other comprehensive income (loss)	30,799			(6,256		)	(11,839		)	1,621			14,325
Balances, September 30, 2016	$	885,833		$	39,060		$	(189,925	)	$	(81,056	)	$	653,912

	Three Months Ended September 30, 2015
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, July 1, 2015	$	560,527		$	30,653		$	(79,296	)	$	(102,513	)	$	409,371
Other comprehensive income (loss) before reclassifications	(3,619		)	9,623			(1,549		)	(7		)	4,448
Amounts reclassified from AOCI	(3,859		)	(1,364		)	—			2,021			(3,202		)
Net current period other comprehensive income (loss)	(7,478		)	8,259			(1,549		)	2,014			1,246
Balances, September 30, 2015	$	553,049		$	38,912		$	(80,845	)	$	(100,499	)	$	410,617

	Nine Months Ended September 30, 2016
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, January 1, 2016	$	339,520		$	45,284		$	(65,785	)	$	(85,581	)	$	233,438
Other comprehensive income (loss) before reclassifications	582,133			(2,150		)	(124,140		)	—			455,843
Amounts reclassified from AOCI	(35,820		)	(4,074		)	—			4,525			(35,369		)
Net current period other comprehensive income (loss)	546,313			(6,224		)	(124,140		)	4,525			420,474
Balances, September 30, 2016	$	885,833		$	39,060		$	(189,925	)	$	(81,056	)	$	653,912

	Nine Months Ended September 30, 2015
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, January 1, 2015	$	784,183		$	33,141		$	(108,194	)	$	(106,112	)	$	603,018
Other comprehensive income (loss) before reclassifications	(207,043		)	9,962			27,349			(222		)	(169,954		)
Amounts reclassified from AOCI	(24,091		)	(4,191		)	—			5,835			(22,447		)
Net current period other comprehensive income (loss)	(231,134		)	5,771			27,349			5,613			(192,401		)
Balances, September 30, 2015	$	553,049		$	38,912		$	(80,845	)	$	(100,499	)	$	410,617

The following tables present the composition of other comprehensive income (loss):

	Three Months Ended September 30, 2016
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	55,849		$	(19,547	)	$	36,302
Unrealized holding gains (losses), net, arising on cash flow hedges	(7,805		)	2,731			(5,074		)
Reclassification adjustment for (gains) losses, net, realized in net income	(10,284		)	3,599			(6,685		)
Net unrealized gains (losses) related to investments	37,760			(13,217		)	24,543
Future policy benefits, DAC and VOBA adjustments	(18,214		)	6,375			(11,839		)
Net unrealized gains (losses)	19,546			(6,842		)	12,704
Employee benefit plan adjustment	2,494			(873		)	1,621
Other comprehensive income (loss)	$	22,040		$	(7,715	)	$	14,325

	Three Months Ended September 30, 2015
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	(5,568	)	$	1,949		$	(3,619	)
Unrealized holding gains (losses), net, arising on cash flow hedges	14,804			(5,181		)	9,623
Reclassification adjustment for (gains) losses, net, realized in net income	(8,036		)	2,813			(5,223		)
Net unrealized gains (losses) related to investments	1,200			(419		)	781
Future policy benefits, DAC and VOBA adjustments	(2,383		)	834			(1,549		)
Net unrealized gains (losses)	(1,183		)	415			(768		)
Employee benefit plan adjustment	3,098			(1,084		)	2,014
Other comprehensive income (loss)	$	1,915		$	(669	)	$	1,246

	Nine Months Ended September 30, 2016
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	895,589		$	(313,456	)	$	582,133
Unrealized holding gains (losses), net, arising on cash flow hedges	(3,307		)	1,157			(2,150		)
Reclassification adjustment for (gains) losses, net, realized in net income	(61,375		)	21,481			(39,894		)
Net unrealized gains (losses) related to investments	830,907			(290,818		)	540,089
Future policy benefits, DAC and VOBA adjustments	(190,985		)	66,845			(124,140		)
Net unrealized gains (losses)	639,922			(223,973		)	415,949
Employee benefit plan adjustment	6,962			(2,437		)	4,525
Other comprehensive income (loss)	$	646,884		$	(226,410	)	$	420,474

	Nine Months Ended September 30, 2015
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	(318,529	)	$	111,486		$	(207,043	)
Unrealized holding gains (losses), net, arising on cash flow hedges	15,326			(5,364		)	9,962
Reclassification adjustment for (gains) losses, net, realized in net income	(43,511		)	15,229			(28,282		)
Net unrealized gains (losses) related to investments	(346,714		)	121,351			(225,363		)
Future policy benefits, DAC and VOBA adjustments	42,075			(14,726		)	27,349
Net unrealized gains (losses)	(304,639		)	106,625			(198,014		)
Employee benefit plan adjustment	8,635			(3,022		)	5,613
Other comprehensive income (loss)	$	(296,004	)	$	103,603		$	(192,401	)

The following tables presents the reclassifications out of accumulated other comprehensive income (loss):

	Three Months Ended September 30,
	2016				2015
Details about accumulated other  comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)								Affected line item in the statement where net income is presented
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale	$	(8,465	)		$	(5,937	)		Other realized investment (gains) losses, net
	(8,465		)		(5,937		)		Total before tax
	(2,962		)		(2,078		)		Tax expense or benefit
	$	(5,503	)		$	(3,859	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(2,911	)		$	(2,099	)		Net investment income
	1,092				—				Interest Expense
	(1,819		)		(2,099		)		Total before tax
	(637		)		(735		)		Tax expense or benefit
	$	(1,182	)		$	(1,364	)		Net of tax
Amortization of employee benefit plan items
Prior service (benefits)	$	(150	)	(1)	$	(159	)	(1)
Actuarial (gains)	2,644			(1)	3,268			(1)
	2,494				3,109				Total before tax
	873				1,088				Tax expense or benefit
	$	1,621			$	2,021			Net of tax
Total reclassification	$	(5,064	)		$	(3,202	)		Net of tax

⁽¹⁾ These accumulated other comprehensive income components are included in the computation of net periodic (benefit) cost of employee benefit plans (see Note 10 for additional details).

	Nine Months Ended September 30,
	2016				2015
Details about accumulated other  comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)								Affected line item in the statement where net income is presented
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale	$	(55,107	)		$	(37,063	)		Other realized investment (gains) losses, net
	(55,107		)		(37,063		)		Total before tax
	(19,287		)		(12,972		)		Tax expense or benefit
	$	(35,820	)		$	(24,091	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(7,943	)		$	(6,448	)		Net investment income
	1,675				—				Interest Expense
	(6,268		)		(6,448		)		Total before tax
	(2,194		)		(2,257		)		Tax expense or benefit
	$	(4,074	)		$	(4,191	)		Net of tax
Amortization of employee benefit plan items
Prior service costs (benefits)	$	(452	)	(1)	$	(520	)	(1)
Actuarial losses (gains)	7,414			(1)	9,497			(1)
	6,962				8,977				Total before tax
	2,437				3,142				Tax expense or benefit
	$	4,525			$	5,835			Net of tax
Total reclassification	$	(35,369	)		$	(22,447	)		Net of tax

⁽¹⁾ These accumulated other comprehensive income components are included in the computation of net periodic (benefit) cost of employee benefit plans (see Note 10 for additional details).

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Net periodic cost (benefit) of the Defined Benefit Pension, Post-Retirement Medical, and Supplemental Executive Retirement plans included in general insurance expenses in the accompanying condensed consolidated statements of income includes the following components:

	Three Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan					Total
	2016			2015			2016			2015			2016			2015		2016			2015
Components of net periodic cost (benefit):
Service cost	$	3,417		$	1,521		$	349		$	254		$	73		$	70	$	3,839		$	1,845
Interest cost	6,384			5,996			184			167			444			531		7,012			6,694
Expected return on plan assets	(6,237		)	(7,084		)	—			—			—			—		(6,237		)	(7,084		)
Amortization of unrecognized prior service costs (benefits)	—			3			(275		)	(395		)	125			233		(150		)	(159		)
Amortization of losses (gains) from earlier periods	2,726			3,086			(67		)	16			(15		)	166		2,644			3,268
Net periodic cost (benefit)	$	6,290		$	3,522		$	191		$	42		$	627		$	1,000	$	7,108		$	4,564

	Nine Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan					Total
	2016			2015			2016			2015			2016			2015		2016			2015
Components of net periodic cost (benefit):
Service cost	$	6,087		$	4,538		$	935		$	781		$	219		$	211	$	7,241		$	5,530
Interest cost	18,948			17,990			534			420			1,332			1,592		20,814			20,002
Expected return on plan assets	(18,793		)	(21,258		)	—			—			—			—		(18,793		)	(21,258		)
Amortization of unrecognized prior service costs (benefits)	—			10			(827		)	(1,230		)	375			700		(452		)	(520		)
Amortization of losses (gains) from earlier periods	7,695			9,298			(237		)	(298		)	(44		)	497		7,414			9,497
Net periodic cost (benefit)	$	13,937		$	10,578		$	405		$	(327	)	$	1,882		$	3,000	$	16,224		$	13,251

On January 1, 2015, the Company acquired the retirement business of Putnam, an affiliate of the Company. See Note 2 for additional discussion regarding the acquisition. Per the terms of the Asset Transfer Agreement, the Company was required to give each Putnam employee full credit for the employee’s service period with Putnam prior to the closing date for the purpose of eligibility to participate, vesting and level of benefits under the Post-Retirement Medical Plan.  As a result, approximately 150 individuals became eligible participants of the Post-Retirement Medical Plan at January 1, 2015.  The transaction was recorded as a prior service cost, which resulted in a $339 increase before tax to other liabilities and expenses and a decrease to accumulated other comprehensive income.

The Company expects to make payments of approximately $803 with respect to its Post-Retirement Medical Plan and $3,336 with respect to its Supplemental Executive Retirement Plan during the year ended December 31, 2016.  The Company expects to make contributions of zero to its Defined Benefit Pension Plan during the year ended December 31, 2016.  A December 31 measurement date is used for the employee benefit plans.

The following table summarizes contributions to the Defined Benefit Pension Plan and payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Payments to the Post-Retirement Medical Plan	212	576	603	1,100
Payments to the Supplemental Executive Retirement Plan	834	830	2,502	3,995

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes is comprised of the following:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
Current (benefit) expense	$	(1,399	)	$	29,568	$	41,725	$	67,705
Deferred expense	16,694			1,140		37,318		11,221
Total income tax provision	$	15,295		$	30,708	$	79,043	$	78,926

The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate:

	Nine Months Ended September 30,
	2016		2015
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(2.7	)%	(2.8	)%
Tax credits	(7.3	)%	(0.3	)%
State income taxes, net of federal benefit	2.5	%	1.9	%
Other, net	(0.4	)%	(0.7	)%
Effective income tax rate	27.1	%	33.1	%

The Company recorded a decrease of $5,824 and an increase of $1,008 in unrecognized tax benefits during the nine months ended September 30, 2016, and 2015, respectively. The Company does not anticipate material changes to its unrecognized tax benefits in the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations by tax authorities for years 2012 and prior.  Tax years 2013 through 2015 are open to federal examination by the Internal Revenue Service (“IRS”).  The Company does not expect significant increases or decreases to unrecognized tax benefits relating to federal, state, or local audits.

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Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

The Chief Operating Decision Maker (“CODM”) of the Company is also the Chief Executive Officer (“CEO”) of the Company and Lifeco U.S. The CODM reviews the financial information for the purposes of assessing performance and allocating resources based upon the results of Lifeco U.S. and other U.S. affiliates prepared in accordance with International Financial Reporting Standards. The CODM, in his capacity as CEO of the Company, reviews the Company’s financial information only

in connection with the quarterly and annual reports that are filed with the Securities and Exchange Commission (“SEC”).

Consequently, the Company does not provide its discrete financial information to the CODM to be regularly reviewed to make

decisions about resources to be allocated or to assess performance. For purposes of SEC reporting requirements, the Company

has chosen to present its financial information in three segments, notwithstanding the above. The three segments are: Individual Markets, Empower Retirement (formerly known as “Retirement Services”), and Other. 

Individual Markets

The Individual Markets reporting and operating segment distributes life insurance, annuity, and retirement products to both individuals and businesses through various distribution channels.  Life insurance products in-force include participating and non-participating term life, whole life, universal life, and variable universal life.

Empower Retirement

The Empower Retirement reporting and operating segment provides various retirement plan products (including individual retirement accounts (“IRAs”)) and investment options as well as comprehensive administrative and record-keeping services for financial institutions and employers, which include educational, advisory, enrollment, and communication services for employer-sponsored defined contribution plans and associated defined benefit plans.

Other

The Company’s Other reporting segment is substantially comprised of activity under the assumption of reinsurance between Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”), a wholly owned subsidiary, and The Canada Life Assurance Company (“CLAC”), corporate items not directly allocated to the other operating segments, and interest expense on long-term debt.

The accounting principles used to determine segment results are the same as those used in the consolidated financial statements.  Intersegment transactions and balances have been eliminated in consolidation.  The Company’s operations are not materially dependent on one or a few customers, brokers, or agents.

The following tables summarize segment financial information:

	Three Months Ended September 30, 2016
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	126,770	$	605	$	18,725		$	146,100
Fee income	23,553		221,342		1,518			246,413
Other revenue	—		3,228		—			3,228
Net investment income	185,747		94,383		11,409			291,539
Realized investment gains (losses), net	11,026		21,565		783			33,374
Total revenues	347,096		341,123		32,435			720,654
Benefits and expenses:
Policyholder benefits	280,821		51,730		14,310			346,861
Operating expenses	35,948		263,327		19,206			318,481
Total benefits and expenses	316,769		315,057		33,516			665,342
Income (loss) before income taxes	30,327		26,066		(1,081		)	55,312
Income tax expense (benefit)	10,102		5,442		(249		)	15,295
Net income (loss)	$	20,225	$	20,624	$	(832	)	$	40,017

	Three Months Ended September 30, 2015
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	132,761	$	477	$	20,779		$	154,017
Fee income	19,745		204,488		1,009			225,242
Other revenue	—		1,820		—			1,820
Net investment income	222,445		127,160		13,452			363,057
Realized investment gains (losses), net	8,304		14,247		—			22,551
Total revenues	383,255		348,192		35,240			766,687
Benefits and expenses:
Policyholder benefits	270,614		54,401		32,599			357,614
Operating expenses	49,407		242,841		18,544			310,792
Total benefits and expenses	320,021		297,242		51,143			668,406
Income (loss) before income taxes	63,234		50,950		(15,903		)	98,281
Income tax expense (benefit)	21,539		14,884		(5,715		)	30,708
Net income (loss)	$	41,695	$	36,066	$	(10,188	)	$	67,573

	Nine Months Ended September 30, 2016
	Individual		Empower
	Markets		Retirement		Other		Total
Revenue:
Premium income	$	311,110	$	1,311	$	65,424	$	377,845
Fee income	71,823		633,679		4,342		709,844
Other revenue	—		9,747		—		9,747
Net investment income	619,633		321,972		37,475		979,080
Realized investment gains (losses), net	37,602		68,278		777		106,657
Total revenues	1,040,168		1,034,987		108,018		2,183,173
Benefits and expenses:
Policyholder benefits	749,790		153,587		43,499		946,876
Operating expenses	127,181		761,827		55,807		944,815
Total benefits and expenses	876,971		915,414		99,306		1,891,691
Income (loss) before income taxes	163,197		119,573		8,712		291,482
Income tax expense (benefit)	55,183		20,579		3,281		79,043
Net income (loss)	$	108,014	$	98,994	$	5,431	$	212,439

	Nine Months Ended September 30, 2015
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	308,976	$	493	$	64,968		$	374,437
Fee income	66,214		618,841		2,965			688,020
Other revenue	—		5,460		—			5,460
Net investment income	595,757		305,969		40,356			942,082
Realized investment gains (losses), net	20,256		36,257		97			56,610
Total revenues	991,203		967,020		108,386			2,066,609
Benefits and expenses:
Policyholder benefits	725,526		151,194		80,883			957,603
Operating expenses	116,770		704,047		50,091			870,908
Total benefits and expenses	842,296		855,241		130,974			1,828,511
Income (loss) before income taxes	148,907		111,779		(22,588		)	238,098
Income tax expense (benefit)	51,262		35,651		(7,987		)	78,926
Net income (loss)	$	97,645	$	76,128	$	(14,601	)	$	159,172

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

The Company has a revolving credit facility agreement in the amount of $50,000 for general corporate purposes.  The credit facility expires on March 1, 2018.  Interest accrues at a rate dependent on various conditions and terms of borrowings.  The agreement requires, among other things, the Company to maintain a minimum adjusted net worth of $1,100,000, as defined in the credit facility agreement (compiled on the statutory accounting basis prescribed by the National Association of Insurance Commissioners), at anytime.  The Company was in compliance with all covenants at September 30, 2016, and December 31, 2015.  At September 30, 2016, and December 31, 2015, there were no outstanding amounts related to the credit facility.

GWSC and CLAC are parties to a reinsurance agreement pursuant to which GWSC assumes term life insurance from CLAC.  GWL&A Financial obtained two letters of credit for the benefit of the Company as collateral under the GWSC and CLAC reinsurance agreement for policy liabilities and capital support.  The first letter of credit is for $1,166,730 and renews annually until it expires on July 3, 2027.  The second letter of credit is for $70,000 and renews annually until it expires on December 31, 2017.  At September 30, 2016, and December 31, 2015, there were no outstanding amounts related to the letters of credit.

In addition, the Company has other letters of credit with a total amount of $9,095, renewable annually for an indefinite period of time. At September 30, 2016, and December 31, 2015, there were no outstanding amounts related to those letters of credit.

The Company makes commitments to fund partnership interests, mortgage loans on real estate, and other investments in the normal course of its business.  The amounts of these unfunded commitments at September 30, 2016, and December 31, 2015, were $376,191 and $50,692, of which $82,831 and $8,692 were related to cost basis limited partnership interests, respectively, all of which is due within one year from the dates indicated.

Contingencies

From time to time, the Company may be threatened with, or named as a defendant in, lawsuits, mediations, arbitrations, and administrative claims. Any such claims that are decided against the Company could harm the Company’s business. The Company is also subject to periodic regulatory audits and inspections which could result in fines or other disciplinary actions. Unfavorable outcomes in such matters may result in a material impact on the Company's financial position, results of operations, or cash flows.

The Company is defending lawsuits relating to the costs and features of certain of its retirement or fund products. These actions have not reached the trial stage. Management believes the claims are without merit and will defend these actions. Based on the information known, these actions will not have a material adverse effect on the consolidated financial position of the Company.

The Company is involved in other various legal proceedings that arise in the ordinary course of its business.  In the opinion of management, after consultation with counsel, the likelihood of loss from the resolution of these proceedings is remote and/or the estimated loss is not expected to have a material effect on the Company’s consolidated financial position, results of its operations, or cash flows.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company evaluated subsequent events through the date the condensed consolidated financial statements were issued. The Company concluded that no subsequent events have occurred that would require recognition or disclosure in the condensed consolidated financial statements.

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Organization and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries over which it exercises control and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2015, which was derived from the Company’s audited consolidated financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016, have been prepared in accordance with the instructions for Form 10-Q.  In compliance with those instructions, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  As such, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

In the opinion of management, these statements include all normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of September 30, 2016, and for all periods presented. The condensed consolidated results of operations and condensed consolidated statement of cash flows for the nine months ended September 30, 2016, are not necessarily indicative of the results or cash flows expected for the full year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently adopted accounting pronouncements and future adoption of new accounting pronouncements

Recently adopted accounting pronouncements

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis. The update primarily amends the criteria used to evaluate whether certain variable interest entities (“VIEs”) should be consolidated. The update also modifies the criteria used to determine whether partnerships and similar entities are VIEs. The update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted, including in the interim periods. The adoption of this ASU did not have a material effect on the Company’s consolidated financial position or results of operations; however, the Company has additional investments that meet the definition of VIE under this update.  As such, the guidance was retrospectively applied and the December 31, 2015 carrying value and maximum exposure to loss in relation to the activities of the VIEs disclosed in Note 5 includes an additional $35,776 to conform to the current period presentation.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The update requires the Company to determine if the cloud computing arrangement contains a software license and if so, apply the accounting requirements for other intangible assets. The update also supersedes the requirement to apply lease accounting requirements by analogy for lease classification. If the arrangement is not a software license, then the Company applies accounting requirements for a service requirement. The update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted. The adoption of this ASU did not have a material effect on the Company’s consolidated financial position or results of operations.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”).  The update required assets being valued using net asset value (“NAV”) as a practical expedient to be excluded from the fair value hierarchy table.  The update is effective for interim and annual periods beginning after December 15, 2015.  The adoption of this ASU did not have an impact on the Company’s consolidated financial position or results of operations; however, the Company has investments in separate accounts for which fair value is estimated using NAV as a practical expedient.  As such, for the period ended September 30, 2016, the Company has retroactively applied this guidance as required by the ASU and removed $533,961 from the December 31, 2015, Level 2 investments in separate accounts in the fair value hierarchy table in Note 8 to conform to current period presentation. 

Future adoption of new accounting pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The update outlines a comprehensive accounting model for revenue arising from customer contracts and supersedes most current revenue recognition guidance, including industry-specific guidance. While the update does not apply to insurance contracts within the scope of Topic 944, it does apply to other fee income earned by the Company which includes fees from assets under management, assets under administration, shareholder servicing, administration and record-keeping services, and investment advisory services. The core principle of the model requires that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The update also requires increased disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The FASB has also issued several updates to ASU 2014-09 including ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (improving theoperability and understandability of the implementation guidance on principal versus agent considerations), ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (reducing thecost and complexity of applying the guidance on identifying promised goods or services and to improve the operability and understandability of the licensing implementation guidance), and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients (amending the guidance on collectability, non cash consideration, presentation of sales tax, and transition). In adopting ASU 2014-09, the Company may use either a full retrospective or a modified retrospective approach. The update is effective for public business entities for interim and annual periods beginning after December 15, 2017. Early adoption is permitted as of accounting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts. The update requires that all years in the claims development table that precede the current reporting period and the related disclosure about the history of claims duration should be presented as required supplementary information.  The update also includes a disclosure objective of providing information about claim frequency along with a description of methodologies for determining claim frequency information, unless it is impracticable to do so.  The update is effective for annual reporting periods beginning after December 15, 2015, and for interim reporting periods within annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments by requiring equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income, simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, use of exit price notion when measuring the fair value of financial instruments for disclosure purposes, separate presentation of financial assets and liabilities by measurement category and form of financial assets (i.e. securities or loans and receivables) on the balance sheet or notes to the financial statements, eliminating the requirement to disclose the method and significant assumptions used to estimate fair value of a financial instrument measured at amortized cost on the balance sheet, requiring entities to present separately in other comprehensive income the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (i.e. “own credit”) when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, and clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.  The update iseffective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The ASU also permits early adoption of the own credit provision.  The Company is currently evaluating the impact of this update on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. This ASU is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivative Contract Novations. The amendments clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in critical term of the hedging relationship. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures. The amendments simplify the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Account. The amendments simplify several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and cash flow statements. The update is effective for fiscal years and interim periods within those beginning after December 15, 2016. The Company does not believe this ASU will have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard amends guidance on the impairment of financial instruments by adding an impairment model that is based on expected losses rather than incurred losses and is intended to result in more timely recognition of losses. The standard also simplifies the accounting by decreasing the number of credit impairment models that an entity can use to account for debt instruments. The update is effective for fiscal years and interim periods within those beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The standard amends the guidance on the classification of certain cash receipts and payments on the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions from equity method investees, beneficial interests in securitized transactions, and separately identifiable cash flows and application of the predominance principle. The update is effective for fiscal years and interim periods within those beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

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Summary of Investments (Tables)

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Summary of fixed maturity investments classified as available-for-sale and the non-credit related components of other-than-temporary impairments (OTTI) in accumulated other comprehensive income (loss) (AOCI)

The following tables summarize fixed maturity investments classified as available-for-sale and the non-credit-related component of other-than-temporary impairments (“OTTI”) in accumulated other comprehensive income (loss) (“AOCI”): 

	September 30, 2016
	Amortized		Gross unrealized		Gross unrealized		Estimated fair value		OTTI (gain) loss
Fixed maturities:	cost		gains		losses		and carrying value		included in AOCI (1)
U.S. government direct obligations and U.S. agencies	$	1,046,224	$	81,922	$	144	$	1,128,002	$	—
Obligations of U.S. states and their subdivisions	1,928,679		322,860		329		2,251,210		—
Foreign government securities	2,167		—		3		2,164		—
Corporate debt securities (2)	13,618,838		913,997		128,748		14,404,087		(1,650		)
Asset-backed securities	1,473,550		133,681		10,569		1,596,662		(77,118		)
Residential mortgage-backed securities	93,656		3,389		328		96,717		(33		)
Commercial mortgage-backed securities	1,162,680		56,854		2,456		1,217,078		—
Collateralized debt obligations	130,093		166		38		130,221		—
Total fixed maturities	$	19,455,887	$	1,512,869	$	142,615	$	20,826,141	$	(78,801	)

⁽¹⁾  Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses.  OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

⁽²⁾ Includes perpetual debt investments with amortized cost of $135,187 and estimated fair value of $111,978.

	December 31, 2015
	Amortized		Gross unrealized		Gross unrealized		Estimated fair value		OTTI (gain) loss
Fixed maturities:	cost		gains		losses		and carrying value		included in AOCI (1)
U.S. government direct obligations and U.S. agencies	$	3,291,167	$	55,193	$	4,608	$	3,341,752	$	—
Obligations of U.S. states and their subdivisions	1,988,214		238,862		7,903		2,219,173		50
Foreign government securities	2,291		—		5		2,286		—
Corporate debt securities (2)	12,388,886		437,207		320,381		12,505,712		(1,810		)
Asset-backed securities	1,196,326		128,406		13,362		1,311,370		(86,474		)
Residential mortgage-backed securities	122,146		4,734		1,508		125,372		(123		)
Commercial mortgage-backed securities	1,009,320		19,117		11,529		1,016,908		—
Collateralized debt obligations	9,112		—		58		9,054		—
Total fixed maturities	$	20,007,462	$	883,519	$	359,354	$	20,531,627	$	(88,357	)

⁽¹⁾  Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses.  OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

⁽²⁾ Includes perpetual debt investments with amortized cost of $149,062 and estimated fair value of $116,423.

Schedule of amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale

The amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale, based on estimated cash flows, are shown in the table below.  Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 

	September 30, 2016
	Amortized cost		Estimated fair value
Maturing in one year or less	$	654,368	$	680,991
Maturing after one year through five years	3,780,675		4,030,915
Maturing after five years through ten years	6,312,627		6,719,852
Maturing after ten years	5,138,873		5,613,359
Mortgage-backed and asset-backed securities	3,569,344		3,781,024
Total fixed maturities	$	19,455,887	$	20,826,141

Summary of information regarding the sales of securities classified as available-for-sale

The following table summarizes information regarding the sales of securities classified as available-for-sale: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Proceeds from sales	$	421,245	$	192,100	$	3,777,445	$	3,187,977
Gross realized gains from sales	8,487		6,632		55,154		38,567
Gross realized losses from sales	24		478		170		802

Schedule of the carrying value of the mortgage loan portfolio by component

The following table summarizes the carrying value of the mortgage loan portfolio by component:  

	September 30, 2016			December 31, 2015
Principal	$	3,565,454		$	3,242,627
Unamortized premium (discount) and fees, net	6,530			7,967
Foreign exchange translation	(988		)	—
Mortgage provision allowance	(2,882		)	(2,890		)
Total mortgage loans	$	3,568,114		$	3,247,704

Financing Receivable Credit Quality Indicators

The following table summarizes the recorded investment of the mortgage loan portfolio by risk assessment category as of September 30, 2016, and December 31, 2015, respectively. 

	September 30, 2016		December 31, 2015
Performing	$	3,569,531	$	3,249,129
Non-performing	1,465		1,465
Total	$	3,570,996	$	3,250,594

Summary of activity in the mortgage provision allowance

The following table summarizes activity in the mortgage provision allowance:

	Nine Months Ended September 30, 2016			Year Ended December 31, 2015
	Commercial mortgages			Commercial mortgages
Beginning balance	$	2,890		$	2,890
Provision increases	536			—
Provision decreases	(544		)	—
Ending balance	$	2,882		$	2,890
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	$	536		$	—
Collectively evaluated for impairment	2,346			2,890
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$	3,570,996		$	3,250,594
Individually evaluated for impairment	4,039			14,031
Collectively evaluated for impairment	3,566,957			3,236,563

Collateral Received For Securities Loaned

The following table summarizes the cash collateral liability under the securities lending program, by class of collateral pledged:

	September 30, 2016		December 31, 2015
Cash collateral liability by class of loaned security
U.S. government direct obligations and U.S. agencies	$	6,220	$	—
Foreign government securities	1,063		—
Corporate debt securities	92,121		—
Total	$	99,404	$	—

Schedule of unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment

The following tables summarize unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment:

	September 30, 2016
	Less than twelve months				Twelve months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Fixed maturities:	fair value		loss and OTTI		fair value		loss and OTTI		fair value		loss and OTTI
U.S. government direct obligations and U.S. agencies	$	15,444	$	21	$	11,155	$	123	$	26,599	$	144
Obligations of U.S. states and their subdivisions	8,841		110		10,656		219		19,497		329
Foreign government securities	2,164		3		—		—		2,164		3
Corporate debt securities	835,440		26,089		876,692		102,659		1,712,132		128,748
Asset-backed securities	338,576		3,289		208,678		7,280		547,254		10,569
Residential mortgage-backed securities	7,145		4		16,106		324		23,251		328
Commercial mortgage-backed securities	113,741		889		27,563		1,567		141,304		2,456
Collateralized debt obligations	45,552		38		—		—		45,552		38
Total fixed maturities	$	1,366,903	$	30,443	$	1,150,850	$	112,172	$	2,517,753	$	142,615
Total number of securities in an unrealized loss position			136				124				260

	December 31, 2015
	Less than twelve months				Twelve months or longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Fixed maturities:	fair value		loss and OTTI		fair value		loss and OTTI		fair value		loss and OTTI
U.S. government direct obligations and U.S. agencies	$	1,357,822	$	4,101	$	23,604	$	507	$	1,381,426	$	4,608
Obligations of U.S. states and their subdivisions	267,581		7,903		—		—		267,581		7,903
Foreign government securities	2,286		5		—		—		2,286		5
Corporate debt securities	4,412,965		202,874		552,791		117,507		4,965,756		320,381
Asset-backed securities	247,082		4,372		182,404		8,990		429,486		13,362
Residential mortgage-backed securities	—		—		18,625		1,508		18,625		1,508
Commercial mortgage-backed securities	429,175		11,154		44,498		375		473,673		11,529
Collateralized debt obligations	9,054		58		—		—		9,054		58
Total fixed maturities	$	6,725,965	$	230,467	$	821,922	$	128,887	$	7,547,887	$	359,354
Total number of securities in an unrealized loss position			558				106				664

Other than Temporary Impairment, Credit Losses Recognized in Earnings

The OTTI on fixed maturity securities where the loss portion is bifurcated and the credit related component is recognized in realized investment gains (losses) is summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Beginning balance	$	94,687		$	106,913		$	102,343		$	119,532
Initial impairments - credit loss on securities not previously impaired	—			—			—			450
Reductions:
Due to sales, maturities or payoffs during the period	—			(521		)	—			(521		)
Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(4,405		)	(13,057		)	(12,061		)	(26,126		)
Ending balance	$	90,282		$	93,335		$	90,282		$	93,335

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of derivative financial instruments

The following tables summarize the notional amount and fair value of derivative financial instruments, excluding embedded derivatives:

	September 30, 2016
			Net derivatives			Asset derivatives		Liability derivatives
	Notional amount		Fair value			Fair value (1)		Fair value (1)
Hedge designation/derivative type:
Derivatives designated as hedges:
Cash flow hedges:
Interest rate swaps	$	419,800	$	(13,852	)	$	13,490	$	27,342
Cross-currency swaps	561,467		46,194			51,284		5,090
Total cash flow hedges	981,267		32,342			64,774		32,432
Total derivatives designated as hedges	981,267		32,342			64,774		32,432
Derivatives not designated as hedges:
Interest rate swaps	480,100		22,921			32,982		10,061
Futures on equity indices	24,260		—			—		—
Interest rate futures	107,400		—			—		—
Interest rate swaptions	166,664		191			191		—
Other forward contracts	2,437,760		7,268			7,891		623
Cross-currency swaps	662,935		14,700			41,528		26,828
Total derivatives not designated as hedges	3,879,119		45,080			82,592		37,512
Total derivative financial instruments	$	4,860,386	$	77,422		$	147,366	$	69,944

⁽¹⁾ The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets.

	December 31, 2015
			Net derivatives			Asset derivatives		Liability derivatives
	Notional amount		Fair value			Fair value (1)		Fair value (1)
Hedge designation/derivative type:
Derivatives designated as hedges:
Cash flow hedges:
Interest rate swaps	$	143,800	$	11,843		$	11,843	$	—
Cross-currency swaps	380,873		28,714			28,736		22
Total cash flow hedges	524,673		40,557			40,579		22
Total derivatives designated as hedges	524,673		40,557			40,579		22
Derivatives not designated as hedges:
Interest rate swaps	303,600		3,240			8,295		5,055
Futures on equity indices	29,310		—			—		—
Interest rate futures	117,200		—			—		—
Interest rate swaptions	151,204		189			189		—
Cross-currency swaps	662,935		(51,759		)	19,537		71,296
Total derivatives not designated as hedges	1,264,249		(48,330		)	28,021		76,351
Total derivative financial instruments	$	1,788,922	$	(7,773	)	$	68,600	$	76,373

⁽¹⁾ The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets.

Schedule of the effect of derivative instruments in the condensed consolidated statement of income reported by cash flow hedges, fair value hedges and economic hedges

The following tables present the effect of derivative instruments in the condensed consolidated statements of income reported by cash flow hedges, fair value hedges, and economic hedges, excluding embedded derivatives: 

	Gain (loss) recognized in OCI on derivatives (Effective portion)						Gain (loss) reclassified from OCI into net income (Effective portion)
	Three Months Ended September 30,						Three Months Ended September 30,
	2016			2015			2016			2015
Cash flow hedges:
Interest rate swaps	$	(401	)	$	(937	)	$	1,335		$	1,490		(A)
Interest rate swaps	(4,284		)	—			(1,092		)	—			(B)
Cross-currency swaps	(3,120		)	15,741			1,576			630			(A)
Interest rate futures	—			—			—			(21		)	(A)
Total cash flow hedges	$	(7,805	)	$	14,804		$	1,819		$	2,099

(A) Net investment income.

(B) Interest expense.

	Gain (loss) recognized in OCI on derivatives (Effective portion)						Gain (loss) reclassified from OCI into net income (Effective portion)
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cash flow hedges:
Interest rate swaps	$	4,098		$	(311	)	$	4,166		$	5,183		(A)
Interest rate swaps	(29,017		)	—			(1,675		)	—			(B)
Cross-currency swaps	21,612			15,637			3,777			1,329			(A)
Interest rate futures	—			—			—			(64		)	(A)
Total cash flow hedges	$	(3,307	)	$	15,326		$	6,268		$	6,448

(A) Net investment income.

(B) Interest expense.

	Gain (loss) on derivatives recognized in net income						Gain (loss) on hedged assets recognized in net income
	Three Months Ended September 30,						Three Months Ended September 30,
	2016		2015				2016		2015
Fair value hedges:
Interest rate swaps	$	—	$	(620	)	(A)	$	—	$	—
Interest rate swaps	—		323			(B)	—		—
Items hedged in interest rate swaps	—		—				—		623			(A)
Items hedged in interest rate swaps	—		—				—		(323		)	(B)
Total fair value hedges	$	—	$	(297	)		$	—	$	300

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income						Gain (loss) on hedged assets recognized in net income
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016		2015				2016		2015
Fair value hedges:
Interest rate swaps	$	—	$	(1,489	)	(A)	$	—	$	—
Interest rate swaps	—		765			(B)	—		—
Items hedged in interest rate swaps	—		—				—		1,493			(A)
Items hedged in interest rate swaps	—		—				—		(765		)	(B)
Total fair value hedges	$	—	$	(724	)		$	—	$	728

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income
	Three Months Ended September 30,
	2016				2015
Derivatives not designated as hedging instruments:
Futures on equity indices	$	510		(A)	$	478		(A)
Futures on equity indices	(2,081		)	(B)	1,111			(B)
Interest rate swaps	418			(A)	6,480			(A)
Interest rate futures	134			(A)	(99		)	(A)
Interest rate futures	(183		)	(B)	(117		)	(B)
Interest rate swaptions	23			(A)	928			(A)
Interest rate swaptions	(39		)	(B)	—			(B)
Other forward contracts	(8,286		)	(A)	32,538			(A)
Other forward contracts	19,413			(B)	8,504			(B)
Cross-currency swaps	1,872			(A)	36,845			(A)
Total derivatives not designated as hedging instruments	$	11,781			$	86,668

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

	Gain (loss) on derivatives recognized in net income
	Nine Months Ended September 30,
	2016				2015
Derivatives not designated as hedging instruments:
Futures on equity indices	$	103		(A)	$	896		(A)
Futures on equity indices	(5,358		)	(B)	122			(B)
Interest rate swaps	19,727			(A)	553			(A)
Interest rate futures	(77		)	(A)	(214		)	(A)
Interest rate futures	(249		)	(B)	55			(B)
Interest rate swaptions	96			(A)	2,919			(A)
Interest rate swaptions	(256		)	(B)	(2,076		)	(B)
Other forward contracts	7,268			(A)	14,778			(A)
Other forward contracts	31,509			(B)	6,414			(B)
Cross-currency swaps	62,147			(A)	44,549			(A)
Total derivatives not designated as hedging instruments	$	114,910			$	67,996

(A) Net investment income.

(B) Represents realized gains (losses) on closed positions recorded in realized investment gains (losses), net.

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Summary of Offsetting Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Offsetting [Abstract]

Summary of the Company's financial instruments that are subject to master netting arrangements

The following tables summarize the effect of master netting arrangements on the Company’s financial position in the normal course of business and in the event of default or bankruptcy of the Company’s counterparties: 

	September 30, 2016
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial			Cash collateral		Net
Financial instruments (assets):	recognized assets (1)		instruments			received		fair value
Derivative instruments (2)	$	123,415	$	(35,579	)	$	78,757	$	9,079
Short-term reverse repurchase agreement (3)	300,000		(300,000		)	—		—
Total financial instruments (assets)	423,415		(335,579		)	78,757		9,079

	September 30, 2016
		Gross fair value not offset
		in balance sheets
	Gross fair value of	Financial		Cash collateral	Net
Financial instruments (liabilities):	recognized liabilities (1)	instruments		pledged	fair value
Derivative instruments (4)	35,579	(35,579	)	—	—

⁽¹⁾ The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets.

⁽²⁾ The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

⁽³⁾ The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement.

⁽⁴⁾ The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

	December 31, 2015
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial			Cash collateral			Net
Financial instruments:	recognized assets/liabilities (1)		instruments			received/(pledged)			fair value
Derivative instruments (assets) (2)	$	66,435	$	(38,236	)	$	19,060		$	9,139
Derivative instruments (liabilities) (3)	76,107		(38,236		)	(37,871		)	—

⁽¹⁾ The gross fair value of derivative instrument assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets.

⁽²⁾ The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

⁽³⁾ The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of financial assets and liabilities carried at fair value on a recurring basis

The following tables present the Company’s financial assets and liabilities carried at fair value on a recurring basis by fair value hierarchy category:

	Assets and liabilities measured at fair value on a recurring basis
	September 30, 2016
	Quoted prices		Significant
	in active markets for identical assets (Level 1)		other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Fixed maturities available-for-sale:
U.S. government direct obligations and U.S. agencies	$	—	$	1,128,002	$	—	$	1,128,002
Obligations of U.S. states and their subdivisions	—		2,251,210		—		2,251,210
Foreign government securities	—		2,164		—		2,164
Corporate debt securities	—		14,389,380		14,707		14,404,087
Asset-backed securities	—		1,596,662		—		1,596,662
Residential mortgage-backed securities	—		96,717		—		96,717
Commercial mortgage-backed securities	—		1,217,078		—		1,217,078
Collateralized debt obligations	—		130,221		—		130,221
Total fixed maturities available-for-sale	—		20,811,434		14,707		20,826,141
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		341,368		—		341,368
Corporate debt securities	—		56,390		—		56,390
Commercial mortgage-backed securities	—		1,122		—		1,122
Total fixed maturities held-for-trading	—		398,880		—		398,880
Short-term investments	338,051		1,976,256		—		2,314,307
Collateral under securities lending agreements	99,404		—		—		99,404
Collateral under derivative counterparty collateral agreements	109,156		—		—		109,156
Derivative instruments designated as hedges:
Interest rate swaps	—		13,490		—		13,490
Cross-currency swaps	—		51,284		—		51,284
Derivative instruments not designated as hedges:
Interest rate swaps	—		32,982		—		32,982
Interest rate swaptions	—		191		—		191
Other forward contracts	—		7,891		—		7,891
Cross-currency swaps	—		41,528		—		41,528
Total derivative instruments	—		147,366		—		147,366
Separate account assets (1)	15,580,267		11,738,559		—		27,775,827
Total assets	$	16,126,878	$	35,072,495	$	14,707	$	51,671,081
Liabilities
Payable under securities lending agreements	$	99,404	$	—	$	—	$	99,404
Collateral under derivative counterparty collateral agreements	80,630		—		—		80,630
Derivative instruments designated as hedges:
Interest rate swaps	—		27,342		—		27,342
Cross-currency swaps	—		5,090		—		5,090
Derivative instruments not designated as hedges:
Interest rate swaps	—		10,061		—		10,061
Other forward contracts	—		623		—		623
Cross-currency swaps	—		26,828		—		26,828
Total derivative instruments	—		69,944		—		69,944
Embedded derivatives - GLWB	—		—		31,277		31,277
Separate account liabilities (2)	4		517,570		—		517,574
Total liabilities	$	180,038	$	587,514	$	31,277	$	798,829

⁽¹⁾ Included in the total fair value amount are $457 million of investments as of September 30, 2016 for which the fair value is estimated using net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy in connection with the adoption of ASU 2015-07.

 ⁽²⁾ Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts.

	Assets and liabilities measured at fair value on a recurring basis
	December 31, 2015
	Quoted prices		Significant
	in active markets for identical assets (Level 1)		other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Fixed maturities available-for-sale:
U.S. government direct obligations and U.S. agencies	$	—	$	3,341,752	$	—	$	3,341,752
Obligations of U.S. states and their subdivisions	—		2,219,173		—		2,219,173
Foreign government securities	—		2,286		—		2,286
Corporate debt securities	—		12,501,174		4,538		12,505,712
Asset-backed securities	—		1,311,370		—		1,311,370
Residential mortgage-backed securities	—		125,372		—		125,372
Commercial mortgage-backed securities	—		1,016,908		—		1,016,908
Collateralized debt obligations	—		9,054		—		9,054
Total fixed maturities available-for-sale	—		20,527,089		4,538		20,531,627
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		558,208		—		558,208
Corporate debt securities	—		56,566		—		56,566
Commercial mortgage-backed securities	—		1,065		—		1,065
Total fixed maturities held-for-trading	—		615,839		—		615,839
Short-term investments	132,288		134,738		—		267,026
Collateral under derivative counterparty collateral agreements	69,984		—		—		69,984
Derivative instruments designated as hedges:
Interest rate swaps	—		11,843		—		11,843
Cross-currency swaps	—		28,736		—		28,736
Derivative instruments not designated as hedges:
Interest rate swaps	—		8,295		—		8,295
Interest rate swaptions	—		189		—		189
Cross-currency swaps	—		19,537		—		19,537
Total derivative instruments	—		68,600		—		68,600
Separate account assets (1)	15,249,966		10,847,266		—		26,631,193
Total assets	$	15,452,238	$	32,193,532	$	4,538	$	48,184,269
Liabilities
Collateral under derivative counterparty collateral agreements	$	19,060	$	—	$	—	$	19,060
Derivative instruments designated as hedges:
Cross-currency swaps	—		22		—		22
Derivative instruments not designated as hedges:
Interest rate swaps	—		5,055		—		5,055
Cross-currency swaps	—		71,296		—		71,296
Total derivative instruments	—		76,373		—		76,373
Embedded derivatives - GLWB	—		—		11,257		11,257
Separate account liabilities (2)	24		290,293		—		290,317
Total liabilities	$	19,084	$	366,666	$	11,257	$	397,007

⁽¹⁾ Included in the total fair value amount are $534 million of investments as of December 31, 2015 for which the fair value is estimated using net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy in connection with the adoption of ASU 2015-07.

⁽²⁾ Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts.

Schedule of assets and liabilities measured at fair value on a recurring basis, for which Level 3 inputs are utilized to determine fair value

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Recurring Level 3 financial assets and liabilities
	Three Months Ended September 30, 2016
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, July 1, 2016	$	15,056		$	30,687
Realized and unrealized gains (losses) included in:
Net income (loss)	—			590
Other comprehensive income (loss)	245			—
Settlements	(594		)	—
Balances, September 30, 2016	$	14,707		$	31,277
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2016	$	—		$	590

	Recurring Level 3 financial assets and liabilities
	Three Months Ended September 30, 2015
	Assets								Liabilities
	Fixed maturities  available-for-sale								Embedded
	Corporate			Asset-backed					derivatives
	debt securities			securities		Total			- GLWB
Balances, July 1, 2015	$	5,065		$	31	$	5,096		$	2,919
Realized and unrealized gains (losses) included in:
Net income (loss)	—			—		—			6,858
Other comprehensive income (loss)	(66		)	—		(66		)	—
Settlements	(216		)	9		(207		)	—
Balances, September 30, 2015	$	4,783		$	40	$	4,823		$	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2015	$	—		$	—	$	—		$	6,858

	Recurring Level 3 financial assets and liabilities
	Nine Months Ended September 30, 2016
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, January 1, 2016	$	4,538		$	11,257
Realized and unrealized gains (losses) included in:
Net income (loss)	—			20,020
Other comprehensive income (loss)	720			—
Settlements	(1,787		)	—
Transfers into Level 3 (1)	11,236			—
Balances, September 30, 2016	$	14,707		$	31,277
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2016	$	—		$	20,020

⁽¹⁾ Transfers into Level 3 are due primarily to decreased observability of inputs in valuation methodologies.

	Recurring Level 3 financial assets and liabilities
	Nine Months Ended September 30, 2015
	Assets								Liabilities
	Fixed maturities  available-for-sale								Embedded
	Corporate			Asset-backed					derivatives
	debt securities			securities		Total			- GLWB
Balances, January 1, 2015	$	5,842		$	36	$	5,878		$	6,407
Realized and unrealized gains (losses) included in:
Net income (loss)	—			—		—			3,370
Other comprehensive income (loss)	(143		)	—		(143		)	—
Settlements	(916		)	4		(912		)	—
Balances, September 30, 2015	$	4,783		$	40	$	4,823		$	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at September 30, 2015	$	—		$	—	$	—		$	3,370

Schedule of significant unobservable inputs used during the valuation of liabilities categorized within Level 3 of the recurring fair value measurements table

The following tables present significant unobservable inputs used during the valuation of certain liabilities categorized within Level 3 of the recurring fair value measurements table:

	September 30, 2016
	Fair Value		Valuation Technique	Unobservable Input	Range
Embedded derivatives - GLWB	$	31,277	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%
				Swap curve	0.5% - 2.50%
				Mortality rate	Based on the Annuity 2000 Mortality Table
				Lapse rate	1% - 15%

	December 31, 2015
	Fair Value		Valuation Technique	Unobservable Input	Range
Embedded derivatives - GLWB	$	11,257	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%
				Swap curve	0.75% - 3.00%
				Mortality rate	Based on the Annuity 2000 Mortality Table
				Lapse rate	1% - 15%

Summary of the carrying amounts and estimated fair values of financial instruments not carried at fair value on a recurring basis

The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments and investments not carried at fair value on a recurring basis:

	September 30, 2016				December 31, 2015
	Carrying		Estimated		Carrying		Estimated
	amount		fair value		amount		fair value
Assets
Mortgage loans on real estate	$	3,568,114	$	3,795,123	$	3,247,704	$	3,362,496
Policy loans	4,056,284		4,056,284		4,092,661		4,092,661
Limited partnership interests	30,336		30,262		35,039		34,882
Other investments	14,293		44,723		14,596		44,723
Liabilities
Annuity contract benefits without life contingencies	$	12,254,743	$	12,357,043	$	11,104,721	$	10,839,205
Policyholders’ funds	254,712		254,712		299,577		299,577
Commercial paper	99,971		99,971		93,371		93,371
Notes payable	534,299		515,795		532,575		563,633

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Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of accumulated balances for each classification of other comprehensive income (loss)

The following tables present the accumulated balances for each classification of other comprehensive income (loss):

	Three Months Ended September 30, 2016
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, July 1, 2016	$	855,034		$	45,316		$	(178,086	)	$	(82,677	)	$	639,587
Other comprehensive income (loss) before reclassifications	36,302			(5,074		)	(11,839		)	—			19,389
Amounts reclassified from AOCI	(5,503		)	(1,182		)	—			1,621			(5,064		)
Net current period other comprehensive income (loss)	30,799			(6,256		)	(11,839		)	1,621			14,325
Balances, September 30, 2016	$	885,833		$	39,060		$	(189,925	)	$	(81,056	)	$	653,912

	Three Months Ended September 30, 2015
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, July 1, 2015	$	560,527		$	30,653		$	(79,296	)	$	(102,513	)	$	409,371
Other comprehensive income (loss) before reclassifications	(3,619		)	9,623			(1,549		)	(7		)	4,448
Amounts reclassified from AOCI	(3,859		)	(1,364		)	—			2,021			(3,202		)
Net current period other comprehensive income (loss)	(7,478		)	8,259			(1,549		)	2,014			1,246
Balances, September 30, 2015	$	553,049		$	38,912		$	(80,845	)	$	(100,499	)	$	410,617

	Nine Months Ended September 30, 2016
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, January 1, 2016	$	339,520		$	45,284		$	(65,785	)	$	(85,581	)	$	233,438
Other comprehensive income (loss) before reclassifications	582,133			(2,150		)	(124,140		)	—			455,843
Amounts reclassified from AOCI	(35,820		)	(4,074		)	—			4,525			(35,369		)
Net current period other comprehensive income (loss)	546,313			(6,224		)	(124,140		)	4,525			420,474
Balances, September 30, 2016	$	885,833		$	39,060		$	(189,925	)	$	(81,056	)	$	653,912

	Nine Months Ended September 30, 2015
	Unrealized holding gains / losses arising on fixed maturities, available-for- sale			Unrealized holding gains / losses arising on cash flow hedges			Future policy benefits, DAC and VOBA adjustments			Employee benefit plan adjustment			Total
Balances, January 1, 2015	$	784,183		$	33,141		$	(108,194	)	$	(106,112	)	$	603,018
Other comprehensive income (loss) before reclassifications	(207,043		)	9,962			27,349			(222		)	(169,954		)
Amounts reclassified from AOCI	(24,091		)	(4,191		)	—			5,835			(22,447		)
Net current period other comprehensive income (loss)	(231,134		)	5,771			27,349			5,613			(192,401		)
Balances, September 30, 2015	$	553,049		$	38,912		$	(80,845	)	$	(100,499	)	$	410,617

Schedule of composition of other comprehensive income (loss)

The following tables present the composition of other comprehensive income (loss):

	Three Months Ended September 30, 2016
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	55,849		$	(19,547	)	$	36,302
Unrealized holding gains (losses), net, arising on cash flow hedges	(7,805		)	2,731			(5,074		)
Reclassification adjustment for (gains) losses, net, realized in net income	(10,284		)	3,599			(6,685		)
Net unrealized gains (losses) related to investments	37,760			(13,217		)	24,543
Future policy benefits, DAC and VOBA adjustments	(18,214		)	6,375			(11,839		)
Net unrealized gains (losses)	19,546			(6,842		)	12,704
Employee benefit plan adjustment	2,494			(873		)	1,621
Other comprehensive income (loss)	$	22,040		$	(7,715	)	$	14,325

	Three Months Ended September 30, 2015
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	(5,568	)	$	1,949		$	(3,619	)
Unrealized holding gains (losses), net, arising on cash flow hedges	14,804			(5,181		)	9,623
Reclassification adjustment for (gains) losses, net, realized in net income	(8,036		)	2,813			(5,223		)
Net unrealized gains (losses) related to investments	1,200			(419		)	781
Future policy benefits, DAC and VOBA adjustments	(2,383		)	834			(1,549		)
Net unrealized gains (losses)	(1,183		)	415			(768		)
Employee benefit plan adjustment	3,098			(1,084		)	2,014
Other comprehensive income (loss)	$	1,915		$	(669	)	$	1,246

	Nine Months Ended September 30, 2016
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	895,589		$	(313,456	)	$	582,133
Unrealized holding gains (losses), net, arising on cash flow hedges	(3,307		)	1,157			(2,150		)
Reclassification adjustment for (gains) losses, net, realized in net income	(61,375		)	21,481			(39,894		)
Net unrealized gains (losses) related to investments	830,907			(290,818		)	540,089
Future policy benefits, DAC and VOBA adjustments	(190,985		)	66,845			(124,140		)
Net unrealized gains (losses)	639,922			(223,973		)	415,949
Employee benefit plan adjustment	6,962			(2,437		)	4,525
Other comprehensive income (loss)	$	646,884		$	(226,410	)	$	420,474

	Nine Months Ended September 30, 2015
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	(318,529	)	$	111,486		$	(207,043	)
Unrealized holding gains (losses), net, arising on cash flow hedges	15,326			(5,364		)	9,962
Reclassification adjustment for (gains) losses, net, realized in net income	(43,511		)	15,229			(28,282		)
Net unrealized gains (losses) related to investments	(346,714		)	121,351			(225,363		)
Future policy benefits, DAC and VOBA adjustments	42,075			(14,726		)	27,349
Net unrealized gains (losses)	(304,639		)	106,625			(198,014		)
Employee benefit plan adjustment	8,635			(3,022		)	5,613
Other comprehensive income (loss)	$	(296,004	)	$	103,603		$	(192,401	)

Schedule of reclassifications out of accumulated other comprehensive income (loss)

The following tables presents the reclassifications out of accumulated other comprehensive income (loss):

	Three Months Ended September 30,
	2016				2015
Details about accumulated other  comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)								Affected line item in the statement where net income is presented
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale	$	(8,465	)		$	(5,937	)		Other realized investment (gains) losses, net
	(8,465		)		(5,937		)		Total before tax
	(2,962		)		(2,078		)		Tax expense or benefit
	$	(5,503	)		$	(3,859	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(2,911	)		$	(2,099	)		Net investment income
	1,092				—				Interest Expense
	(1,819		)		(2,099		)		Total before tax
	(637		)		(735		)		Tax expense or benefit
	$	(1,182	)		$	(1,364	)		Net of tax
Amortization of employee benefit plan items
Prior service (benefits)	$	(150	)	(1)	$	(159	)	(1)
Actuarial (gains)	2,644			(1)	3,268			(1)
	2,494				3,109				Total before tax
	873				1,088				Tax expense or benefit
	$	1,621			$	2,021			Net of tax
Total reclassification	$	(5,064	)		$	(3,202	)		Net of tax

⁽¹⁾ These accumulated other comprehensive income components are included in the computation of net periodic (benefit) cost of employee benefit plans (see Note 10 for additional details).

	Nine Months Ended September 30,
	2016				2015
Details about accumulated other  comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)								Affected line item in the statement where net income is presented
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale	$	(55,107	)		$	(37,063	)		Other realized investment (gains) losses, net
	(55,107		)		(37,063		)		Total before tax
	(19,287		)		(12,972		)		Tax expense or benefit
	$	(35,820	)		$	(24,091	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(7,943	)		$	(6,448	)		Net investment income
	1,675				—				Interest Expense
	(6,268		)		(6,448		)		Total before tax
	(2,194		)		(2,257		)		Tax expense or benefit
	$	(4,074	)		$	(4,191	)		Net of tax
Amortization of employee benefit plan items
Prior service costs (benefits)	$	(452	)	(1)	$	(520	)	(1)
Actuarial losses (gains)	7,414			(1)	9,497			(1)
	6,962				8,977				Total before tax
	2,437				3,142				Tax expense or benefit
	$	4,525			$	5,835			Net of tax
Total reclassification	$	(35,369	)		$	(22,447	)		Net of tax

⁽¹⁾ These accumulated other comprehensive income components are included in the computation of net periodic (benefit) cost of employee benefit plans (see Note 10 for additional details).

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic cost (benefit)

Net periodic cost (benefit) of the Defined Benefit Pension, Post-Retirement Medical, and Supplemental Executive Retirement plans included in general insurance expenses in the accompanying condensed consolidated statements of income includes the following components:

	Three Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan					Total
	2016			2015			2016			2015			2016			2015		2016			2015
Components of net periodic cost (benefit):
Service cost	$	3,417		$	1,521		$	349		$	254		$	73		$	70	$	3,839		$	1,845
Interest cost	6,384			5,996			184			167			444			531		7,012			6,694
Expected return on plan assets	(6,237		)	(7,084		)	—			—			—			—		(6,237		)	(7,084		)
Amortization of unrecognized prior service costs (benefits)	—			3			(275		)	(395		)	125			233		(150		)	(159		)
Amortization of losses (gains) from earlier periods	2,726			3,086			(67		)	16			(15		)	166		2,644			3,268
Net periodic cost (benefit)	$	6,290		$	3,522		$	191		$	42		$	627		$	1,000	$	7,108		$	4,564

	Nine Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan					Total
	2016			2015			2016			2015			2016			2015		2016			2015
Components of net periodic cost (benefit):
Service cost	$	6,087		$	4,538		$	935		$	781		$	219		$	211	$	7,241		$	5,530
Interest cost	18,948			17,990			534			420			1,332			1,592		20,814			20,002
Expected return on plan assets	(18,793		)	(21,258		)	—			—			—			—		(18,793		)	(21,258		)
Amortization of unrecognized prior service costs (benefits)	—			10			(827		)	(1,230		)	375			700		(452		)	(520		)
Amortization of losses (gains) from earlier periods	7,695			9,298			(237		)	(298		)	(44		)	497		7,414			9,497
Net periodic cost (benefit)	$	13,937		$	10,578		$	405		$	(327	)	$	1,882		$	3,000	$	16,224		$	13,251

Schedule of contributions to the Defined Benefit Pension Plan and payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan

The following table summarizes contributions to the Defined Benefit Pension Plan and payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Payments to the Post-Retirement Medical Plan	212	576	603	1,100
Payments to the Supplemental Executive Retirement Plan	834	830	2,502	3,995

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Schedule of the provision for income taxes

The provision for income taxes is comprised of the following:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
Current (benefit) expense	$	(1,399	)	$	29,568	$	41,725	$	67,705
Deferred expense	16,694			1,140		37,318		11,221
Total income tax provision	$	15,295		$	30,708	$	79,043	$	78,926

Schedule of reconciliation between the statutory federal income tax rate and the Company's effective federal income tax rate

The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate:

	Nine Months Ended September 30,
	2016		2015
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(2.7	)%	(2.8	)%
Tax credits	(7.3	)%	(0.3	)%
State income taxes, net of federal benefit	2.5	%	1.9	%
Other, net	(0.4	)%	(0.7	)%
Effective income tax rate	27.1	%	33.1	%

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Summary of financial information related to segments

The following tables summarize segment financial information:

	Three Months Ended September 30, 2016
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	126,770	$	605	$	18,725		$	146,100
Fee income	23,553		221,342		1,518			246,413
Other revenue	—		3,228		—			3,228
Net investment income	185,747		94,383		11,409			291,539
Realized investment gains (losses), net	11,026		21,565		783			33,374
Total revenues	347,096		341,123		32,435			720,654
Benefits and expenses:
Policyholder benefits	280,821		51,730		14,310			346,861
Operating expenses	35,948		263,327		19,206			318,481
Total benefits and expenses	316,769		315,057		33,516			665,342
Income (loss) before income taxes	30,327		26,066		(1,081		)	55,312
Income tax expense (benefit)	10,102		5,442		(249		)	15,295
Net income (loss)	$	20,225	$	20,624	$	(832	)	$	40,017

	Three Months Ended September 30, 2015
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	132,761	$	477	$	20,779		$	154,017
Fee income	19,745		204,488		1,009			225,242
Other revenue	—		1,820		—			1,820
Net investment income	222,445		127,160		13,452			363,057
Realized investment gains (losses), net	8,304		14,247		—			22,551
Total revenues	383,255		348,192		35,240			766,687
Benefits and expenses:
Policyholder benefits	270,614		54,401		32,599			357,614
Operating expenses	49,407		242,841		18,544			310,792
Total benefits and expenses	320,021		297,242		51,143			668,406
Income (loss) before income taxes	63,234		50,950		(15,903		)	98,281
Income tax expense (benefit)	21,539		14,884		(5,715		)	30,708
Net income (loss)	$	41,695	$	36,066	$	(10,188	)	$	67,573

	Nine Months Ended September 30, 2016
	Individual		Empower
	Markets		Retirement		Other		Total
Revenue:
Premium income	$	311,110	$	1,311	$	65,424	$	377,845
Fee income	71,823		633,679		4,342		709,844
Other revenue	—		9,747		—		9,747
Net investment income	619,633		321,972		37,475		979,080
Realized investment gains (losses), net	37,602		68,278		777		106,657
Total revenues	1,040,168		1,034,987		108,018		2,183,173
Benefits and expenses:
Policyholder benefits	749,790		153,587		43,499		946,876
Operating expenses	127,181		761,827		55,807		944,815
Total benefits and expenses	876,971		915,414		99,306		1,891,691
Income (loss) before income taxes	163,197		119,573		8,712		291,482
Income tax expense (benefit)	55,183		20,579		3,281		79,043
Net income (loss)	$	108,014	$	98,994	$	5,431	$	212,439

	Nine Months Ended September 30, 2015
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	308,976	$	493	$	64,968		$	374,437
Fee income	66,214		618,841		2,965			688,020
Other revenue	—		5,460		—			5,460
Net investment income	595,757		305,969		40,356			942,082
Realized investment gains (losses), net	20,256		36,257		97			56,610
Total revenues	991,203		967,020		108,386			2,066,609
Benefits and expenses:
Policyholder benefits	725,526		151,194		80,883			957,603
Operating expenses	116,770		704,047		50,091			870,908
Total benefits and expenses	842,296		855,241		130,974			1,828,511
Income (loss) before income taxes	148,907		111,779		(22,588		)	238,098
Income tax expense (benefit)	51,262		35,651		(7,987		)	78,926
Net income (loss)	$	97,645	$	76,128	$	(14,601	)	$	159,172

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Acquisitions (Details) - Putnam Retirement Business $ in Thousands	Jan. 01, 2015 USD ($)
Business Acquisition [Line Items]
Cash paid	$ 4,114
Other assets acquired	11,501
Other liabilities assumed	7,717
Dividend	$ 330

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Application of Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Maximum exposure to loss in relation to the activities of the VIEs	$ 33,484	$ 38,504
Separate account assets	$ (27,775,827)	(26,631,193)
Accounting Standards Update 2015-02 | Adjustments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Maximum exposure to loss in relation to the activities of the VIEs		35,776
Fair Value, Inputs, Level 2 | Accounting Standards Update 2015-07 | Adjustments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Separate account assets		$ 533,961

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Dividends (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Dividends [Abstract]
Dividends paid to parent, GWL&A Financial	$ 125,691	$ 139,711

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Summary of Investments - SOI Fixed Maturity AFS and non-credit OTTI in AOCI (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Securities available-for-sale
Amortized cost	$ 19,455,887	$ 20,007,462
Fixed maturities available-for-sale:	20,826,141	20,531,627
Fixed maturities
Securities available-for-sale
Amortized cost	19,455,887	20,007,462
Gross unrealized gains	1,512,869	883,519
Gross unrealized losses	142,615	359,354
Fixed maturities available-for-sale:	20,826,141	20,531,627
OTTI (gain) loss included in AOCI	(78,801)	(88,357)
U.S. government direct obligations and U.S. agencies
Securities available-for-sale
Amortized cost	1,046,224	3,291,167
Gross unrealized gains	81,922	55,193
Gross unrealized losses	144	4,608
Fixed maturities available-for-sale:	1,128,002	3,341,752
OTTI (gain) loss included in AOCI	0	0
Obligations of U.S. states and their subdivisions
Securities available-for-sale
Amortized cost	1,928,679	1,988,214
Gross unrealized gains	322,860	238,862
Gross unrealized losses	329	7,903
Fixed maturities available-for-sale:	2,251,210	2,219,173
OTTI (gain) loss included in AOCI	0	50
Foreign government securities
Securities available-for-sale
Amortized cost	2,167	2,291
Gross unrealized gains	0	0
Gross unrealized losses	3	5
Fixed maturities available-for-sale:	2,164	2,286
OTTI (gain) loss included in AOCI	0	0
Corporate debt securities
Securities available-for-sale
Amortized cost	13,618,838	12,388,886
Gross unrealized gains	913,997	437,207
Gross unrealized losses	128,748	320,381
Fixed maturities available-for-sale:	14,404,087	12,505,712
OTTI (gain) loss included in AOCI	(1,650)	(1,810)
Perpetual debt investments
Securities available-for-sale
Amortized cost	135,187	149,062
Fixed maturities available-for-sale:	111,978	116,423
Asset-backed securities
Securities available-for-sale
Amortized cost	1,473,550	1,196,326
Gross unrealized gains	133,681	128,406
Gross unrealized losses	10,569	13,362
Fixed maturities available-for-sale:	1,596,662	1,311,370
OTTI (gain) loss included in AOCI	(77,118)	(86,474)
Residential mortgage-backed securities
Securities available-for-sale
Amortized cost	93,656	122,146
Gross unrealized gains	3,389	4,734
Gross unrealized losses	328	1,508
Fixed maturities available-for-sale:	96,717	125,372
OTTI (gain) loss included in AOCI	(33)	(123)
Commercial mortgage-backed securities
Securities available-for-sale
Amortized cost	1,162,680	1,009,320
Gross unrealized gains	56,854	19,117
Gross unrealized losses	2,456	11,529
Fixed maturities available-for-sale:	1,217,078	1,016,908
OTTI (gain) loss included in AOCI	0	0
Collateralized debt obligations
Securities available-for-sale
Amortized cost	130,093	9,112
Gross unrealized gains	166	0
Gross unrealized losses	38	58
Fixed maturities available-for-sale:	130,221	9,054
OTTI (gain) loss included in AOCI	$ 0	$ 0

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Summary of Investments - SOI Fixed Maturity AFS aging (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Amortized cost
Maturing in one year or less	$ 654,368
Maturing after one year through five years	3,780,675
Maturing after five years through ten years	6,312,627
Maturing after ten years	5,138,873
Mortgage-backed and asset-backed securities	3,569,344
Amortized cost	19,455,887	$ 20,007,462
Estimated fair value
Maturing in one year or less	680,991
Maturing after one year through five years	4,030,915
Maturing after five years through ten years	6,719,852
Maturing after ten years	5,613,359
Mortgage-backed and asset-backed securities	3,781,024
Estimated fair value	$ 20,826,141	$ 20,531,627

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Summary of Investments - SOI AFS Proceeds from sales (Details 2.1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 421,245	$ 192,100	$ 3,777,445	$ 3,187,977
Gross realized gains from sales	8,487	6,632	55,154	38,567
Gross realized losses from sales	$ 24	$ 478	$ 170	$ 802

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Summary of Investments - SOI Mortgage loans on real estate by component (Details 3) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Principal	$ 3,565,454	$ 3,242,627
Unamortized premium (discount) and fees, net	6,530	7,967
Foreign exchange translation	(988)	0
Mortgage provision allowance	(2,882)	(2,890)	$ (2,890)
Total mortgage loans	$ 3,568,114	$ 3,247,704

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Summary of Investments - SOI risk assessment (Details) - Mortgages - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Recorded investment	$ 3,570,996	$ 3,250,594
Performing
Financing Receivable, Recorded Investment [Line Items]
Recorded investment	3,569,531	3,249,129
Non-performing
Financing Receivable, Recorded Investment [Line Items]
Recorded investment	$ 1,465	$ 1,465

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Summary of Investments - SOI Mortgage provision allowance rollforward (Details 4) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 2,890	$ 2,890
Provision increases	536	0
Provision decreases	(544)	0
Ending balance	2,882	2,890
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	536	0
Collectively evaluated for impairment	2,346	2,890
Mortgage Loans on Real Estate
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	3,570,996	3,250,594
Individually evaluated for impairment	4,039	14,031
Collectively evaluated for impairment	3,566,957	3,236,563
Mortgage Loans on Real Estate
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$ 3,570,996	$ 3,250,594

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Summary of Investments - SOI Ltd partnership Sec lending Special deposits (Details 5) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Limited partnership and other corporation interests	$ 35,935	$ 40,980
Nature and activities of the VIEs and the effect on financial statements
Carrying value in relation to the activities of the VIEs	33,484	38,504
Maximum exposure to loss in relation to the activities of the VIEs	33,484	38,504
Special deposits and securities lending
Fair value of securities on deposit with governmental authorities	8,146	14,000
Amortized cost	156,098
Securities loaned to third parties at fair value	160,351
Collateral received	99,404	$ 0
Collateral fair value	$ 66,259

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Summary of Investments - SOI Securities Lending (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Securities Financing Transaction [Line Items]
Payable under securities lending agreements	$ 99,404	$ 0
U.S. government direct obligations and U.S. agencies
Securities Financing Transaction [Line Items]
Payable under securities lending agreements	6,220	0
Foreign government securities
Securities Financing Transaction [Line Items]
Payable under securities lending agreements	1,063	0
Corporate debt securities
Securities Financing Transaction [Line Items]
Payable under securities lending agreements	$ 92,121	$ 0

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Summary of Investments - SOI Unrealized losses fixed maturities AFS (Details 6) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) position	Dec. 31, 2015 USD ($) position
Fixed maturities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	$ 1,366,903	$ 6,725,965
Less than twelve months, Unrealized loss and OTTI	30,443	230,467
Twelve months or longer, Estimated fair value	1,150,850	821,922
Twelve months or longer, Unrealized loss and OTTI	112,172	128,887
Total Estimated fair value	2,517,753	7,547,887
Total Unrealized losses and OTTI	$ 142,615	$ 359,354
Additional disclosure
Total number of securities in an unrealized loss position, Less than twelve months | position	136	558
Total number of securities in an unrealized loss position, twelve months or longer | position	124	106
Total number of securities in an unrealized loss position | position	260	664
Decrease (increase) in total unrealized losses and other-than-temporary impairment losses	$ 216,739
Decrease (increase) in total unrealized losses and other-than-temporary impairment losses (as a percent)	60.00%
Increase (decrease) in the less than twelve months category	$ (200,024)
Increase (decrease) in greater than twelve months unrealized losses and other-than-temporary impairment losses	(16,715)
U.S. government direct obligations and U.S. agencies
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	15,444	$ 1,357,822
Less than twelve months, Unrealized loss and OTTI	21	4,101
Twelve months or longer, Estimated fair value	11,155	23,604
Twelve months or longer, Unrealized loss and OTTI	123	507
Total Estimated fair value	26,599	1,381,426
Total Unrealized losses and OTTI	144	4,608
Obligations of U.S. states and their subdivisions
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	8,841	267,581
Less than twelve months, Unrealized loss and OTTI	110	7,903
Twelve months or longer, Estimated fair value	10,656	0
Twelve months or longer, Unrealized loss and OTTI	219	0
Total Estimated fair value	19,497	267,581
Total Unrealized losses and OTTI	329	7,903
Foreign government securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	2,164	2,286
Less than twelve months, Unrealized loss and OTTI	3	5
Twelve months or longer, Estimated fair value	0	0
Twelve months or longer, Unrealized loss and OTTI	0	0
Total Estimated fair value	2,164	2,286
Total Unrealized losses and OTTI	3	5
Corporate debt securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	835,440	4,412,965
Less than twelve months, Unrealized loss and OTTI	26,089	202,874
Twelve months or longer, Estimated fair value	876,692	552,791
Twelve months or longer, Unrealized loss and OTTI	102,659	117,507
Total Estimated fair value	1,712,132	4,965,756
Total Unrealized losses and OTTI	$ 128,748	320,381
Additional disclosure
Unrealized losses and OTTI over twelve months on securities (as a percent)	92.00%
Corporate debt securities | Non-investment grade
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Twelve months or longer, Unrealized loss and OTTI	$ 13,441
Perpetual debt investments
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Twelve months or longer, Unrealized loss and OTTI	7,572
Asset-backed securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	338,576	247,082
Less than twelve months, Unrealized loss and OTTI	3,289	4,372
Twelve months or longer, Estimated fair value	208,678	182,404
Twelve months or longer, Unrealized loss and OTTI	7,280	8,990
Total Estimated fair value	547,254	429,486
Total Unrealized losses and OTTI	$ 10,569	13,362
Additional disclosure
Unrealized losses and OTTI over twelve months on securities (as a percent)	7.00%
Residential mortgage-backed securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	$ 7,145	0
Less than twelve months, Unrealized loss and OTTI	4	0
Twelve months or longer, Estimated fair value	16,106	18,625
Twelve months or longer, Unrealized loss and OTTI	324	1,508
Total Estimated fair value	23,251	18,625
Total Unrealized losses and OTTI	328	1,508
Commercial mortgage-backed securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	113,741	429,175
Less than twelve months, Unrealized loss and OTTI	889	11,154
Twelve months or longer, Estimated fair value	27,563	44,498
Twelve months or longer, Unrealized loss and OTTI	1,567	375
Total Estimated fair value	141,304	473,673
Total Unrealized losses and OTTI	2,456	11,529
Collateralized debt obligations
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	45,552	9,054
Less than twelve months, Unrealized loss and OTTI	38	58
Twelve months or longer, Estimated fair value	0	0
Twelve months or longer, Unrealized loss and OTTI	0	0
Total Estimated fair value	45,552	9,054
Total Unrealized losses and OTTI	$ 38	$ 58

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Summary of Investments - SOI OTTI table (Details 7) - Fixed maturities - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance	$ 94,687	$ 106,913	$ 102,343	$ 119,532
Initial impairments - credit loss on securities not previously impaired	0	0	0	450
Due to sales, maturities or payoffs during the period		(521)		(521)
Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(4,405)	(13,057)	(12,061)	(26,126)
Ending balance	$ 90,282	$ 93,335	$ 90,282	$ 93,335

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Derivative Financial Instruments (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Aggregate fair value of derivative instruments with credit-risk-related contingent features, in case of net liability position	$ 69,984	$ 76,107
Collateral related to the derivatives	28,526	45,940
Fair value of assets required to settle the derivatives in, net liability position	41,458
Amount of unrestricted cash collateral to counterparties in the normal course of business	28,526	50,924
Cash collateral received	80,630	19,060
Net derivative gains estimated to be reclassified from accumulated other comprehensive income (loss) into net income within the next twelve months	7,972
Derivative financial instruments
Notional amount	4,860,386	1,788,922
Net derivatives, Fair value	77,422	(7,773)
Asset derivatives, Fair value	147,366	68,600
Liability derivatives, Fair value	69,944	76,373
Interest rate swaps
Derivative financial instruments
Average notional amount of the derivative instruments	752,800	443,589
Cross-currency swaps
Derivative financial instruments
Average notional amount of the derivative instruments	1,110,757	937,242
Other forward contracts
Derivative financial instruments
Average notional amount of the derivative instruments	2,645,834	5,014,845
Future
Derivative financial instruments
Average notional amount of the derivative instruments	149,391	111,801
Swaption
Derivative financial instruments
Average notional amount of the derivative instruments	153,961	212,299
Derivatives designated as hedges:
Derivative financial instruments
Notional amount	981,267	524,673
Net derivatives, Fair value	32,342	40,557
Asset derivatives, Fair value	64,774	40,579
Liability derivatives, Fair value	32,432	22
Derivatives designated as hedges: | Cash flow hedges:
Derivative financial instruments
Notional amount	981,267	524,673
Net derivatives, Fair value	32,342	40,557
Asset derivatives, Fair value	64,774	40,579
Liability derivatives, Fair value	32,432	22
Derivatives designated as hedges: | Cash flow hedges: | Interest rate swaps
Derivative financial instruments
Notional amount	419,800	143,800
Net derivatives, Fair value	(13,852)	11,843
Asset derivatives, Fair value	13,490	11,843
Liability derivatives, Fair value	27,342	0
Derivatives designated as hedges: | Cash flow hedges: | Cross-currency swaps
Derivative financial instruments
Notional amount	561,467	380,873
Net derivatives, Fair value	46,194	28,714
Asset derivatives, Fair value	51,284	28,736
Liability derivatives, Fair value	5,090	22
Derivatives not designated as hedges:
Derivative financial instruments
Notional amount	3,879,119	1,264,249
Net derivatives, Fair value	45,080	(48,330)
Asset derivatives, Fair value	82,592	28,021
Liability derivatives, Fair value	37,512	76,351
Derivatives not designated as hedges: | Interest rate swaps
Derivative financial instruments
Notional amount	480,100	303,600
Net derivatives, Fair value	22,921	3,240
Asset derivatives, Fair value	32,982	8,295
Liability derivatives, Fair value	10,061	5,055
Derivatives not designated as hedges: | Cross-currency swaps
Derivative financial instruments
Notional amount	662,935	662,935
Net derivatives, Fair value	14,700	(51,759)
Asset derivatives, Fair value	41,528	19,537
Liability derivatives, Fair value	26,828	71,296
Derivatives not designated as hedges: | Futures on equity indices
Derivative financial instruments
Notional amount	24,260	29,310
Net derivatives, Fair value	0	0
Asset derivatives, Fair value	0	0
Liability derivatives, Fair value	0	0
Derivatives not designated as hedges: | Interest rate futures
Derivative financial instruments
Notional amount	107,400	117,200
Net derivatives, Fair value	0	0
Asset derivatives, Fair value	0	0
Liability derivatives, Fair value	0	0
Derivatives not designated as hedges: | Interest rate swaptions
Derivative financial instruments
Notional amount	166,664	151,204
Net derivatives, Fair value	191	189
Asset derivatives, Fair value	191	189
Liability derivatives, Fair value	0	$ 0
Derivatives not designated as hedges: | Other forward contracts
Derivative financial instruments
Notional amount	2,437,760
Net derivatives, Fair value	7,268
Asset derivatives, Fair value	7,891
Liability derivatives, Fair value	$ 623

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Derivative Financial Instruments (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	$ 11,781	$ 86,668	$ 114,910	$ 67,996
Net investment income
Derivatives not designated as hedging instruments
Change in fair value of GLWB	(590)	(6,858)	(20,020)	(3,370)
Policyholders' Funds
Derivatives not designated as hedging instruments
Embedded derivatives - GLWB	31,277		31,277		$ 11,257
Interest rate swaps | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	418	6,480	19,727	553
Interest rate futures | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	134	(99)	(77)	(214)
Interest rate futures | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(183)	(117)	(249)	55
Futures on equity indices | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	510	478	103	896
Futures on equity indices | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(2,081)	1,111	(5,358)	122
Interest rate swaptions | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	23	928	96	2,919
Interest rate swaptions | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(39)	0	(256)	(2,076)
Other forward contracts | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(8,286)	32,538	7,268	14,778
Other forward contracts | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	19,413	8,504	31,509	6,414
Cross-currency swaps | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	1,872	36,845	62,147	44,549
Cash flow hedges:
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(7,805)	14,804	(3,307)	15,326
Gain (loss) reclassified from OCI into net income (Effective portion)	1,819	2,099	6,268	6,448
Cash flow hedges: | Interest rate swaps | Net investment income
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(401)	(937)	4,098	(311)
Gain (loss) reclassified from OCI into net income (Effective portion)	1,335	1,490	4,166	5,183
Cash flow hedges: | Interest rate swaps | Interest Expense
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(4,284)	0	(29,017)	0
Gain (loss) reclassified from OCI into net income (Effective portion)	(1,092)	0	(1,675)	0
Cash flow hedges: | Interest rate futures | Net investment income
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) recognized in OCI on derivatives (Effective portion)	0	0	0	0
Gain (loss) reclassified from OCI into net income (Effective portion)	0	(21)	0	(64)
Cash flow hedges: | Cross-currency swaps | Net investment income
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(3,120)	15,741	21,612	15,637
Gain (loss) reclassified from OCI into net income (Effective portion)	1,576	630	3,777	1,329
Fair value hedges:
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) on derivatives recognized in net income	0	(297)	0	(724)
Gain (loss) on hedged assets recognized in net income	0	300	0	728
Fair value hedges: | Interest rate swaps | Net investment income
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) on derivatives recognized in net income	0	(620)	0	(1,489)
Gain (loss) on hedged assets recognized in net income	0	623	0	1,493
Fair value hedges: | Interest rate swaps | Realized investment gains (losses)
Effect of derivative instruments in the condensed consolidated statement of income
Gain (loss) on derivatives recognized in net income	0	323	0	765
Gain (loss) on hedged assets recognized in net income	$ 0	$ (323)	$ 0	$ (765)

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Summary of Offsetting Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Derivative instruments (assets)
Gross fair value of recognized assets	$ 423,415	$ 66,435
Financial instruments	(335,579)	(38,236)
Cash collateral received	78,757	19,060
Net fair value	9,079	9,139
Derivatives instrument (liabilities)
Gross fair value of recognized liabilities	35,579	76,107
Financial instruments	(35,579)	(38,236)
Cash collateral received	0	(37,871)
Net fair value	0	$ 0
Derivative instruments
Derivative instruments (assets)
Gross fair value of recognized assets	123,415
Financial instruments	(35,579)
Cash collateral received	78,757
Net fair value	9,079
Short-term reverse purchase agreement
Derivative instruments (assets)
Gross fair value of recognized assets	300,000
Financial instruments	(300,000)
Cash collateral received	0
Net fair value	$ 0

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Fair Value Measurements - Recurring by FV hierarchy (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Fixed maturities available-for-sale:	$ 20,826,141	$ 20,531,627
Fixed maturities held-for-trading:	398,880	615,839
Short-term investments	2,314,307	267,026
Collateral under securities lending agreements	99,404	0
Collateral under derivative counterparty collateral agreements	28,526	50,924
Total derivative instruments	147,366	68,600
Separate account assets	27,775,827	26,631,193
Liabilities
Payable under securities lending agreements	99,404	0
Collateral under derivative counterparty collateral agreements	80,630	19,060
Total derivative instruments	69,944	76,373
Separate account liabilities	27,775,827	26,631,193
Derivative instruments designated as hedges:
Assets
Total derivative instruments	64,774	40,579
Liabilities
Total derivative instruments	32,432	22
Derivative instruments not designated as hedges:
Assets
Total derivative instruments	82,592	28,021
Liabilities
Total derivative instruments	37,512	76,351
Derivative instruments not designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	32,982	8,295
Liabilities
Total derivative instruments	10,061	5,055
Derivative instruments not designated as hedges: | Interest rate swaptions
Assets
Total derivative instruments	191	189
Liabilities
Total derivative instruments	0	0
Derivative instruments not designated as hedges: | Other forward contracts
Assets
Total derivative instruments	7,891
Liabilities
Total derivative instruments	623
Derivative instruments not designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	41,528	19,537
Liabilities
Total derivative instruments	26,828	71,296
U.S. government direct obligations and U.S. agencies
Assets
Fixed maturities available-for-sale:	1,128,002	3,341,752
Liabilities
Payable under securities lending agreements	6,220	0
Obligations of U.S. states and their subdivisions
Assets
Fixed maturities available-for-sale:	2,251,210	2,219,173
Foreign government securities
Assets
Fixed maturities available-for-sale:	2,164	2,286
Liabilities
Payable under securities lending agreements	1,063	0
Corporate debt securities
Assets
Fixed maturities available-for-sale:	14,404,087	12,505,712
Liabilities
Payable under securities lending agreements	92,121	0
Asset-backed securities
Assets
Fixed maturities available-for-sale:	1,596,662	1,311,370
Residential mortgage-backed securities
Assets
Fixed maturities available-for-sale:	96,717	125,372
Commercial mortgage-backed securities
Assets
Fixed maturities available-for-sale:	1,217,078	1,016,908
Collateralized debt obligations
Assets
Fixed maturities available-for-sale:	130,221	9,054
Recurring basis
Assets
Fixed maturities available-for-sale:	20,826,141	20,531,627
Fixed maturities held-for-trading:	398,880	615,839
Short-term investments	2,314,307	267,026
Collateral under securities lending agreements	99,404
Collateral under derivative counterparty collateral agreements	109,156	69,984
Total derivative instruments	147,366	68,600
Separate account assets	27,775,827	26,631,193
Total assets	51,671,081	48,184,269
Separate account assets excluded	457,000	534,000
Liabilities
Payable under securities lending agreements	99,404
Collateral under derivative counterparty collateral agreements	80,630	19,060
Total derivative instruments	69,944	76,373
Embedded derivatives - GLWB	31,277	11,257
Separate account liabilities	517,574	290,317
Total liabilities	798,829	397,007
Recurring basis | Derivative instruments designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	13,490	11,843
Liabilities
Total derivative instruments	27,342
Recurring basis | Derivative instruments designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	51,284	28,736
Liabilities
Total derivative instruments	5,090	22
Recurring basis | Derivative instruments not designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	32,982	8,295
Liabilities
Total derivative instruments	10,061	5,055
Recurring basis | Derivative instruments not designated as hedges: | Interest rate swaptions
Assets
Total derivative instruments	191	189
Recurring basis | Derivative instruments not designated as hedges: | Other forward contracts
Assets
Total derivative instruments	7,891
Liabilities
Total derivative instruments	623
Recurring basis | Derivative instruments not designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	41,528	19,537
Liabilities
Total derivative instruments	26,828	71,296
Recurring basis | U.S. government direct obligations and U.S. agencies
Assets
Fixed maturities available-for-sale:	1,128,002	3,341,752
Fixed maturities held-for-trading:	341,368	558,208
Recurring basis | Obligations of U.S. states and their subdivisions
Assets
Fixed maturities available-for-sale:	2,251,210	2,219,173
Recurring basis | Foreign government securities
Assets
Fixed maturities available-for-sale:	2,164	2,286
Recurring basis | Corporate debt securities
Assets
Fixed maturities available-for-sale:	14,404,087	12,505,712
Fixed maturities held-for-trading:	56,390	56,566
Recurring basis | Asset-backed securities
Assets
Fixed maturities available-for-sale:	1,596,662	1,311,370
Recurring basis | Residential mortgage-backed securities
Assets
Fixed maturities available-for-sale:	96,717	125,372
Recurring basis | Commercial mortgage-backed securities
Assets
Fixed maturities available-for-sale:	1,217,078	1,016,908
Fixed maturities held-for-trading:	1,122	1,065
Recurring basis | Collateralized debt obligations
Assets
Fixed maturities available-for-sale:	130,221	9,054
Recurring basis | Quoted prices in active markets for identical assets (Level 1)
Assets
Short-term investments	338,051	132,288
Collateral under securities lending agreements	99,404
Collateral under derivative counterparty collateral agreements	109,156	69,984
Separate account assets	15,580,267	15,249,966
Total assets	16,126,878	15,452,238
Liabilities
Payable under securities lending agreements	99,404
Collateral under derivative counterparty collateral agreements	80,630	19,060
Separate account liabilities	4	24
Total liabilities	180,038	19,084
Recurring basis | Significant other observable inputs (Level 2)
Assets
Fixed maturities available-for-sale:	20,811,434	20,527,089
Fixed maturities held-for-trading:	398,880	615,839
Short-term investments	1,976,256	134,738
Total derivative instruments	147,366	68,600
Separate account assets	11,738,559	10,847,266
Total assets	35,072,495	32,193,532
Liabilities
Total derivative instruments	69,944	76,373
Separate account liabilities	517,570	290,293
Total liabilities	587,514	366,666
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	13,490	11,843
Liabilities
Total derivative instruments	27,342
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	51,284	28,736
Liabilities
Total derivative instruments	5,090	22
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	32,982	8,295
Liabilities
Total derivative instruments	10,061	5,055
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Interest rate swaptions
Assets
Total derivative instruments	191	189
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Other forward contracts
Assets
Total derivative instruments	7,891
Liabilities
Total derivative instruments	623
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	41,528	19,537
Liabilities
Total derivative instruments	26,828	71,296
Recurring basis | Significant other observable inputs (Level 2) | U.S. government direct obligations and U.S. agencies
Assets
Fixed maturities available-for-sale:	1,128,002	3,341,752
Fixed maturities held-for-trading:	341,368	558,208
Recurring basis | Significant other observable inputs (Level 2) | Obligations of U.S. states and their subdivisions
Assets
Fixed maturities available-for-sale:	2,251,210	2,219,173
Recurring basis | Significant other observable inputs (Level 2) | Foreign government securities
Assets
Fixed maturities available-for-sale:	2,164	2,286
Recurring basis | Significant other observable inputs (Level 2) | Corporate debt securities
Assets
Fixed maturities available-for-sale:	14,389,380	12,501,174
Fixed maturities held-for-trading:	56,390	56,566
Recurring basis | Significant other observable inputs (Level 2) | Asset-backed securities
Assets
Fixed maturities available-for-sale:	1,596,662	1,311,370
Recurring basis | Significant other observable inputs (Level 2) | Residential mortgage-backed securities
Assets
Fixed maturities available-for-sale:	96,717	125,372
Recurring basis | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities
Assets
Fixed maturities available-for-sale:	1,217,078	1,016,908
Fixed maturities held-for-trading:	1,122	1,065
Recurring basis | Significant other observable inputs (Level 2) | Collateralized debt obligations
Assets
Fixed maturities available-for-sale:	130,221	9,054
Recurring basis | Significant unobservable inputs (Level 3)
Assets
Fixed maturities available-for-sale:	14,707	4,538
Total assets	14,707	4,538
Liabilities
Embedded derivatives - GLWB	31,277	11,257
Total liabilities	31,277	11,257
Recurring basis | Significant unobservable inputs (Level 3) | Corporate debt securities
Assets
Fixed maturities available-for-sale:	14,707	4,538
Recurring basis | Significant unobservable inputs (Level 3) | Asset-backed securities
Assets
Fixed maturities available-for-sale:	$ 0	$ 0

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Fair Value Measurements - Recurring basis Level 3 rollforward (Details 2) - Recurring basis - Level 3 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Recurring Level 3 financial assets and liabilities
Balance at the beginning of the period		$ 5,096		$ 5,878
Net income (loss)		0		0
Other comprehensive income (loss)		(66)		(143)
Settlements		(207)		(912)
Balance at the end of the period		4,823		4,823
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities		0		0
Fixed maturities available-for-sale, Corporate debt securities
Recurring Level 3 financial assets and liabilities
Balance at the beginning of the period	$ 15,056	5,065	$ 4,538	5,842
Net income (loss)	0	0	0	0
Other comprehensive income (loss)	245	(66)	720	(143)
Settlements	(594)	(216)	(1,787)	(916)
Transfers into Level 3			11,236
Balance at the end of the period	14,707	4,783	14,707	4,783
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities	0	0	0	0
Fixed maturities available-for-sale, Asset-backed securities
Recurring Level 3 financial assets and liabilities
Balance at the beginning of the period		31		36
Net income (loss)		0		0
Other comprehensive income (loss)		0		0
Settlements		9		4
Balance at the end of the period		40		40
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities		0		0
Embedded Derivative Financial Instruments
Recurring Level 3 financial assets and liabilities
Balance at the beginning of the period	30,687	2,919	11,257	6,407
Net income (loss)	590	6,858	20,020	3,370
Other comprehensive income (loss)	0	0	0	0
Settlements	0	0	0	0
Transfers into Level 3			0
Balance at the end of the period	31,277	9,777	31,277	9,777
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities	$ 590	$ 6,858	$ 20,020	$ 3,370

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Fair Value Measurements - Level 3 unobservable inputs (Details 3) - Recurring basis - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Significant unobservable inputs used during the valuation of assets categorized within Level 3 of the recurring fair value measurements table
Embedded derivatives - GLWB	$ 31,277	$ 11,257
Level 3
Significant unobservable inputs used during the valuation of assets categorized within Level 3 of the recurring fair value measurements table
Embedded derivatives - GLWB	$ 31,277	$ 11,257
Level 3 | Internal model pricing | Minimum
Unobservable Input
Equity Volatility	15.00%	15.00%
Swap Curve	0.50%	0.75%
Lapse Rate	1.00%	1.00%
Level 3 | Internal model pricing | Maximum
Unobservable Input
Equity Volatility	28.00%	28.00%
Swap Curve	2.50%	3.00%
Lapse Rate	15.00%	15.00%
Derivative Financial Instruments, Liabilities | Level 3 | Internal model pricing
Significant unobservable inputs used during the valuation of assets categorized within Level 3 of the recurring fair value measurements table
Embedded derivatives - GLWB	$ 31,277	$ 11,257

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Fair Value Measurements - Recurring not carried at FV (Details 5) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Assets
Mortgage loans on real estate	$ 3,568,114	$ 3,247,704
Policy loans	4,056,284	4,092,661
Liabilities
Policyholders’ funds	254,712	299,577
Commercial paper	$ 99,971	93,371
Policyholders' funds, Notice required to change policyholders' funds interest crediting rate (in days)	30 days
Minimum
Liabilities
Limited partnership interests, Estimated liquidation period of underlying assets of the funds	1 year
Maximum
Liabilities
Limited partnership interests, Estimated liquidation period of underlying assets of the funds	10 years
Carrying amount
Assets
Mortgage loans on real estate	$ 3,568,114	3,247,704
Policy loans	4,056,284	4,092,661
Limited partnership interests	30,336	35,039
Other investments	14,293	14,596
Liabilities
Annuity contract benefits without life contingencies	12,254,743	11,104,721
Policyholders’ funds	254,712	299,577
Commercial paper	99,971	93,371
Notes payable	534,299	532,575
Estimated fair value
Assets
Mortgage loans on real estate	3,795,123	3,362,496
Policy loans	4,056,284	4,092,661
Limited partnership interests	30,262	34,882
Other investments	44,723	44,723
Liabilities
Annuity contract benefits without life contingencies	12,357,043	10,839,205
Policyholders’ funds	254,712	299,577
Commercial paper	99,971	93,371
Notes payable	$ 515,795	$ 563,633

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Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Other Comprehensive Income [Roll Forward]
Beginning balance		$ 639,587	$ 409,371	$ 233,438	$ 603,018
Other comprehensive income (loss) before reclassifications		19,389	4,448	455,843	(169,954)
Amounts reclassified from AOCI		(5,064)	(3,202)	(35,369)	(22,447)
Other comprehensive income (loss)	[1]	14,325	1,246	420,474	(192,401)
Ending balance		653,912	410,617	653,912	410,617
Unrealized holding gains / losses arising on fixed maturities, available-for- sale
Other Comprehensive Income [Roll Forward]
Beginning balance		855,034	560,527	339,520	784,183
Other comprehensive income (loss) before reclassifications		36,302	(3,619)	582,133	(207,043)
Amounts reclassified from AOCI		(5,503)	(3,859)	(35,820)	(24,091)
Other comprehensive income (loss)		30,799	(7,478)	546,313	(231,134)
Ending balance		885,833	553,049	885,833	553,049
Unrealized holding gains / losses arising on cash flow hedges
Other Comprehensive Income [Roll Forward]
Beginning balance		45,316	30,653	45,284	33,141
Other comprehensive income (loss) before reclassifications		(5,074)	9,623	(2,150)	9,962
Amounts reclassified from AOCI		(1,182)	(1,364)	(4,074)	(4,191)
Other comprehensive income (loss)		(6,256)	8,259	(6,224)	5,771
Ending balance		39,060	38,912	39,060	38,912
Future policy benefits, DAC and VOBA adjustments
Other Comprehensive Income [Roll Forward]
Beginning balance		(178,086)	(79,296)	(65,785)	(108,194)
Other comprehensive income (loss) before reclassifications		(11,839)	(1,549)	(124,140)	27,349
Amounts reclassified from AOCI		0	0	0	0
Other comprehensive income (loss)		(11,839)	(1,549)	(124,140)	27,349
Ending balance		(189,925)	(80,845)	(189,925)	(80,845)
Employee benefit plan adjustment
Other Comprehensive Income [Roll Forward]
Beginning balance		(82,677)	(102,513)	(85,581)	(106,112)
Other comprehensive income (loss) before reclassifications		0	(7)	0	(222)
Amounts reclassified from AOCI		1,621	2,021	4,525	5,835
Other comprehensive income (loss)		1,621	2,014	4,525	5,613
Ending balance		$ (81,056)	$ (100,499)	$ (81,056)	$ (100,499)

[1] Other comprehensive income (loss) includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(959) and $(1,979) for the three months ended September 30, 2016, and 2015, respectively, and $(5,326) and $(3,208) for the nine months ended September 30, 2016, and 2015, respectively.

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Other Comprehensive Income (Details 2) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Before-tax amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale		$ 55,849	$ (5,568)	$ 895,589	$ (318,529)
Unrealized holding gains (losses), net, arising on cash flow hedges		(7,805)	14,804	(3,307)	15,326
Reclassification adjustment for (gains) losses, net, realized in net income		(10,284)	(8,036)	(61,375)	(43,511)
Net unrealized gains (losses) related to investments		37,760	1,200	830,907	(346,714)
Future policy benefits, DAC and VOBA adjustments		(18,214)	(2,383)	(190,985)	42,075
Net unrealized gains (losses)		19,546	(1,183)	639,922	(304,639)
Employee benefit plan adjustment		2,494	3,098	6,962	8,635
Other comprehensive income (loss) before income taxes		22,040	1,915	646,884	(296,004)
Tax (expense) benefit
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale		(19,547)	1,949	(313,456)	111,486
Unrealized holding gains (losses), net, arising on cash flow hedges		2,731	(5,181)	1,157	(5,364)
Reclassification adjustment for (gains) losses, net, realized in net income		3,599	2,813	21,481	15,229
Net unrealized gains (losses) related to investments		(13,217)	(419)	(290,818)	121,351
Future policy benefits, DAC and VOBA adjustments		6,375	834	66,845	(14,726)
Net unrealized gains (losses)		(6,842)	415	(223,973)	106,625
Employee benefit plan adjustment		(873)	(1,084)	(2,437)	(3,022)
Other comprehensive income (loss)		(7,715)	(669)	(226,410)	103,603
Net-of-tax amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale		36,302	(3,619)	582,133	(207,043)
Unrealized holding gains (losses), net, arising on cash flow hedges		(5,074)	9,623	(2,150)	9,962
Reclassification adjustment for (gains) losses, net, realized in net income		(6,685)	(5,223)	(39,894)	(28,282)
Net unrealized gains (losses) related to investments		24,543	781	540,089	(225,363)
Future policy benefits, DAC and VOBA adjustments		(11,839)	(1,549)	(124,140)	27,349
Net unrealized gains (losses)		12,704	(768)	415,949	(198,014)
Employee benefit plan adjustment		1,621	2,014	4,525	5,613
Other comprehensive income (loss)	[1]	$ 14,325	$ 1,246	$ 420,474	$ (192,401)

[1] Other comprehensive income (loss) includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(959) and $(1,979) for the three months ended September 30, 2016, and 2015, respectively, and $(5,326) and $(3,208) for the nine months ended September 30, 2016, and 2015, respectively.

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Other Comprehensive Income (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Reclassifications out of accumulated other comprehensive income (loss)
Other realized investment (gains) losses, net	$ (33,374)	$ (22,914)	$ (107,193)	$ (57,423)
Net investment income	(291,539)	(363,057)	(979,080)	(942,082)
Interest expense	(7,648)	(9,646)	(26,051)	(28,928)
Amortization of unrecognized prior service costs (benefits)	(150)	(159)	(452)	(520)
Actuarial (gains)	2,644	3,268	7,414	9,497
Tax expense or benefit	(3,599)	(2,813)	(21,481)	(15,229)
Net of tax	(5,064)	(3,202)	(35,369)	(22,447)
Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Net of tax	(5,064)	(3,202)	(35,369)	(22,447)
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale
Reclassifications out of accumulated other comprehensive income (loss)
Net of tax	(5,503)	(3,859)	(35,820)	(24,091)
Unrealized holding (gains) losses, net, arising on fixed maturities, available-for-sale | Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Other realized investment (gains) losses, net	(8,465)	(5,937)	(55,107)	(37,063)
Total before tax	(8,465)	(5,937)	(55,107)	(37,063)
Tax expense or benefit	(2,962)	(2,078)	(19,287)	(12,972)
Net of tax	(5,503)	(3,859)	(35,820)	(24,091)
Unrealized holding (gains) losses, net, arising on cash flow hedges
Reclassifications out of accumulated other comprehensive income (loss)
Net of tax	(1,182)	(1,364)	(4,074)	(4,191)
Unrealized holding (gains) losses, net, arising on cash flow hedges | Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Net investment income	(2,911)	(2,099)	(7,943)	(6,448)
Interest expense	1,092	0	1,675	0
Total before tax	(1,819)	(2,099)	(6,268)	(6,448)
Tax expense or benefit	(637)	(735)	(2,194)	(2,257)
Net of tax	(1,182)	(1,364)	(4,074)	(4,191)
Amortization of employee benefit plan items
Reclassifications out of accumulated other comprehensive income (loss)
Net of tax	1,621	2,021	4,525	5,835
Amortization of employee benefit plan items | Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Amortization of unrecognized prior service costs (benefits)	(150)	(159)	(452)	(520)
Actuarial (gains)	2,644	3,268	7,414	9,497
Total before tax	2,494	3,109	6,962	8,977
Tax expense or benefit	873	1,088	2,437	3,142
Net of tax	$ 1,621	$ 2,021	$ 4,525	$ 5,835

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Employee Benefit Plans (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 01, 2015 USD ($) plan_participant	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)
Components of net periodic cost (benefit):
Service cost		$ 3,839	$ 1,845	$ 7,241	$ 5,530
Interest cost		7,012	6,694	20,814	20,002
Expected return on plan assets		(6,237)	(7,084)	(18,793)	(21,258)
Amortization of unrecognized prior service costs (benefits)		(150)	(159)	(452)	(520)
Amortization of losses (gains) from earlier periods		2,644	3,268	7,414	9,497
Net periodic cost (benefit)		7,108	4,564	16,224	13,251
Defined Benefit Pension Plan
Components of net periodic cost (benefit):
Service cost		3,417	1,521	6,087	4,538
Interest cost		6,384	5,996	18,948	17,990
Expected return on plan assets		(6,237)	(7,084)	(18,793)	(21,258)
Amortization of unrecognized prior service costs (benefits)		0	3	0	10
Amortization of losses (gains) from earlier periods		2,726	3,086	7,695	9,298
Net periodic cost (benefit)		6,290	3,522	13,937	10,578
Expected Employer contribution for the year				0
Post-Retirement Medical Plan
Components of net periodic cost (benefit):
Service cost		349	254	935	781
Interest cost		184	167	534	420
Expected return on plan assets		0	0	0	0
Amortization of unrecognized prior service costs (benefits)		(275)	(395)	(827)	(1,230)
Amortization of losses (gains) from earlier periods		(67)	16	(237)	(298)
Net periodic cost (benefit)		191	42	405	(327)
Expected Employer contribution for the year				803
Payments to plan		212	576	603	1,100
Post-Retirement Medical Plan | Putnam
Components of net periodic cost (benefit):
Number of individuals | plan_participant	150
Post-Retirement Medical Plan | Other Liabilities | Putnam
Components of net periodic cost (benefit):
Prior service cost	$ 339
Supplemental Executive Retirement Plan
Components of net periodic cost (benefit):
Service cost		73	70	219	211
Interest cost		444	531	1,332	1,592
Expected return on plan assets		0	0	0	0
Amortization of unrecognized prior service costs (benefits)		125	233	375	700
Amortization of losses (gains) from earlier periods		(15)	166	(44)	497
Net periodic cost (benefit)		627	1,000	1,882	3,000
Expected Employer contribution for the year				3,336
Payments to plan		$ 834	$ 830	$ 2,502	$ 3,995

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Current (benefit) expense	$ (1,399)	$ 29,568	$ 41,725	$ 67,705
Deferred expense	16,694	1,140	37,318	11,221
Total income tax provision	15,295	30,708	$ 79,043	$ 78,926
Reconciliation between the statutory federal income tax rate and the effective income tax rate from continuing operations
Statutory federal income tax rate			35.00%	35.00%
Investment income not subject to federal tax			(2.70%)	(2.80%)
Tax credits			(7.30%)	(0.30%)
State income taxes, net of federal benefit			2.50%	1.90%
Other, net			(0.40%)	(0.70%)
Effective income tax rate			27.10%	33.10%
Reconciliation of unrecognized tax benefits
Additional decrease to unrecognized tax benefits	$ 5,824	$ (1,008)	$ 5,824	$ (1,008)

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Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) segment	Sep. 30, 2015 USD ($)
Financial information of the segments
Number of reportable segments | segment			3
Revenues
Premium income	$ 146,100	$ 154,017	$ 377,845	$ 374,437
Fee income	246,413	225,242	709,844	688,020
Other revenue	3,228	1,820	9,747	5,460
Net investment income	291,539	363,057	979,080	942,082
Realized investment gains (losses), net	33,374	22,551	106,657	56,610
Total revenues	720,654	766,687	2,183,173	2,066,609
Benefits and expenses:
Policyholder benefits	346,861	357,614	946,876	957,603
Operating expenses	318,481	310,792	944,815	870,908
Total benefits and expenses	665,342	668,406	1,891,691	1,828,511
Income before income taxes	55,312	98,281	291,482	238,098
Income tax expense	15,295	30,708	79,043	78,926
Net income	40,017	67,573	212,439	159,172
Operating Segments | Individual Markets
Revenues
Premium income	126,770	132,761	311,110	308,976
Fee income	23,553	19,745	71,823	66,214
Other revenue	0	0	0	0
Net investment income	185,747	222,445	619,633	595,757
Realized investment gains (losses), net	11,026	8,304	37,602	20,256
Total revenues	347,096	383,255	1,040,168	991,203
Benefits and expenses:
Policyholder benefits	280,821	270,614	749,790	725,526
Operating expenses	35,948	49,407	127,181	116,770
Total benefits and expenses	316,769	320,021	876,971	842,296
Income before income taxes	30,327	63,234	163,197	148,907
Income tax expense	10,102	21,539	55,183	51,262
Net income	20,225	41,695	108,014	97,645
Operating Segments | Empower Retirement
Revenues
Premium income	605	477	1,311	493
Fee income	221,342	204,488	633,679	618,841
Other revenue	3,228	1,820	9,747	5,460
Net investment income	94,383	127,160	321,972	305,969
Realized investment gains (losses), net	21,565	14,247	68,278	36,257
Total revenues	341,123	348,192	1,034,987	967,020
Benefits and expenses:
Policyholder benefits	51,730	54,401	153,587	151,194
Operating expenses	263,327	242,841	761,827	704,047
Total benefits and expenses	315,057	297,242	915,414	855,241
Income before income taxes	26,066	50,950	119,573	111,779
Income tax expense	5,442	14,884	20,579	35,651
Net income	20,624	36,066	98,994	76,128
Operating Segments | Other
Revenues
Premium income	18,725	20,779	65,424	64,968
Fee income	1,518	1,009	4,342	2,965
Other revenue	0	0	0	0
Net investment income	11,409	13,452	37,475	40,356
Realized investment gains (losses), net	783	0	777	97
Total revenues	32,435	35,240	108,018	108,386
Benefits and expenses:
Policyholder benefits	14,310	32,599	43,499	80,883
Operating expenses	19,206	18,544	55,807	50,091
Total benefits and expenses	33,516	51,143	99,306	130,974
Income before income taxes	(1,081)	(15,903)	8,712	(22,588)
Income tax expense	(249)	(5,715)	3,281	(7,987)
Net income	$ (832)	$ (10,188)	$ 5,431	$ (14,601)

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Commitments and Contingencies (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) letter_of_credit	Dec. 31, 2015 USD ($)
Commitments
Unfunded commitments, due in one year	$ 376,191,000	$ 50,692,000
Unfunded commitments related to cost basis limited partnership interests, due in one year	$ 82,831,000	8,692,000
GWL&A Financial Inc.
Commitments
Number of letters of credit obtained for the benefit of related party | letter_of_credit	2
Revolving credit facility
Commitments
Amount of credit facility under agreement for general corporate purposes	$ 50,000,000
Adjusted net worth required for each quarter	1,100,000,000
Amount outstanding	0	0
First letter of credit
Commitments
Amount of credit facility under agreement for general corporate purposes	1,166,730,000
Second letter of credit
Commitments
Amount of credit facility under agreement for general corporate purposes	70,000,000
First and Second Letters of Credit
Commitments
Amount outstanding	0	0
Other Letters of Credit
Commitments
Amount of credit facility under agreement for general corporate purposes	9,095,000
Amount outstanding	$ 0	$ 0