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, 2017

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 ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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 9, 2017, 7,292,708 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, 2017, and December 31, 2016 (Unaudited)	3
		Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2017, and 2016 (Unaudited)	5
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2017, and 2016 (Unaudited)	6
		Condensed Consolidated Statements of Stockholder’s Equity for the Nine Months Ended September 30, 2017, and 2016 (Unaudited)	7
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017, and 2016 (Unaudited)	8
		Notes to Condensed Consolidated Financial Statements (Unaudited)	10
		Note 1 - Organization and Basis of Presentation	10
		Note 2 - Application of Recent Accounting Pronouncements	10
		Note 3 - Dividends	12
		Note 4 - Summary of Investments	12
		Note 5 - Derivative Financial Instruments	17
		Note 6 - Summary of Offsetting Assets and Liabilities	21
		Note 7 - Fair Value Measurements	23
		Note 8 - Other Comprehensive Income	30
		Note 9 - Employee Benefit Plans	34
		Note 10 - Income Taxes	35
		Note 11 - Segment Information	36
		Note 12 - Commitments and Contingencies	38
		Note 13 - Subsequent Events	39
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	55
	Item 4	Controls and Procedures	56
Part II	Other Information		57
	Item 1	Legal Proceedings	57
	Item 1A	Risk Factors	57
	Item 6	Exhibits	59
		Signature	59

2

Part I     Financial Information

Item1.    Interim Financial Statements

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Balance Sheets

September 30, 2017 and December 31, 2016

(In Thousands, Except Share Amounts)

(Unaudited)

	September 30, 2017		December 31, 2016
Assets
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $22,125,948 and $21,672,727)	$	23,012,869	$	22,153,703
Fixed maturities, held-for-trading, at fair value (amortized cost $59,034 and $519,495)	60,328		514,738
Mortgage loans on real estate (net of allowances of $773 and $2,882)	3,943,088		3,558,826
Policy loans	4,073,511		4,019,648
Short-term investments (amortized cost $823,071 and $303,988)	823,071		303,988
Limited partnership and other corporation interests	45,117		34,895
Other investments	20,037		15,052
Total investments	31,978,021		30,600,850
Other assets:
Cash and cash equivalents	20,495		18,321
Reinsurance recoverable	591,805		598,864
Deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”)	461,348		486,690
Investment income due and accrued	316,895		287,681
Collateral under securities lending agreements	74,795		—
Due from parent and affiliates	92,217		81,995
Goodwill	137,683		137,683
Other intangible assets	17,808		20,087
Other assets	934,655		1,021,210
Assets of discontinued operations	16,865		17,652
Separate account assets	27,866,779		27,037,765
Total assets	$	62,509,366	$	60,308,798

See notes to condensed consolidated financial statements. (Continued)

3

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Balance Sheets

September 30, 2017 and December 31, 2016

(In Thousands, Except Share Amounts)

(Unaudited)

	September 30, 2017		December 31, 2016
Liabilities and stockholder’s equity
Policy benefit liabilities:
Future policy benefits	$	29,881,799	$	28,872,899
Policy and contract claims	386,556		372,259
Policyholders’ funds	245,007		285,554
Provision for policyholders’ dividends	48,847		49,521
Undistributed earnings on participating business	15,742		15,573
Total policy benefit liabilities	30,577,951		29,595,806
General liabilities:
Due to parent and affiliates	538,452		537,990
Commercial paper	99,868		99,049
Payable under securities lending agreements	74,795		—
Deferred income tax liabilities, net	297,684		191,911
Other liabilities	776,075		816,304
Liabilities of discontinued operations	16,865		17,652
Separate account liabilities	27,866,779		27,037,765
Total liabilities	60,248,469		58,296,477
Commitments and contingencies (See Note 12)
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; 7,292,708 shares issued and outstanding	7,293		7,293
Additional paid-in capital	940,616		863,031
Accumulated other comprehensive income	420,930		235,875
Retained earnings	892,058		906,122
Total stockholder’s equity	2,260,897		2,012,321
Total liabilities and stockholder’s equity	$	62,509,366	$	60,308,798

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, 2017, and 2016

(In Thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues:
Premium income	$	145,504		$	146,100		$	365,408		$	377,845
Fee income	264,304			246,413			786,758			709,844
Other revenue	3,322			3,228			9,367			9,747
Net investment income	300,582			291,539			911,274			979,080
Realized investment gains (losses), net:
Total other-than-temporary gains (losses), net	(2,969		)	—			(3,126		)	(536		)
Other realized investment gains (losses), net	16,830			33,374			27,297			107,193
Total realized investment gains (losses), net	13,861			33,374			24,171			106,657
Total revenues	727,573			720,654			2,096,978			2,183,173
Benefits and expenses:
Life and other policy benefits	161,017			172,855			498,300			529,985
Increase (decrease) in future policy benefits	12,704			7,540			(51,148		)	(75,221		)
Interest credited or paid to contractholders	160,040			154,248			471,531			455,018
Provision for policyholders’ share of losses on participating business	(1,033		)	(106		)	(1,097		)	(525		)
Dividends to policyholders	11,513			12,324			35,627			37,619
Total benefits	344,241			346,861			953,213			946,876
General insurance expenses	293,176			307,329			884,670			878,367
Amortization of DAC and VOBA	14,076			3,504			39,798			40,397
Interest expense	7,811			7,648			23,087			26,051
Total benefits and expenses	659,304			665,342			1,900,768			1,891,691
Income before income taxes	68,269			55,312			196,210			291,482
Income tax expense	21,688			15,295			64,973			79,043
Net income	$	46,581		$	40,017		$	131,237		$	212,439

See notes to condensed consolidated financial statements.

5

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Condensed Consolidated Statements of Comprehensive Income

Three and Nine Months Ended September 30, 2017, and 2016

(In Thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net income	$	46,581		$	40,017		$	131,237		$	212,439
Components of other comprehensive income
Unrealized holding gains (losses), net, arising on available-for-sale fixed maturity investments	39,983			55,849			407,208			895,589
Unrealized holding gains (losses), net, arising on cash flow hedges	(23,111		)	(7,805		)	(48,311		)	(3,307		)
Reclassification adjustment for (gains) losses, net, realized in net income	(2,885		)	(10,284		)	(3,242		)	(61,375		)
Net unrealized gains (losses) related to investments	13,987			37,760			355,655			830,907
Future policy benefits, DAC and VOBA adjustments	(1,977		)	(18,214		)	(85,992		)	(190,985		)
Employee benefit plan adjustment	10,744			2,494			15,036			6,962
Other comprehensive income before income taxes	22,754			22,040			284,699			646,884
Income tax expense related to items of other comprehensive income	7,963			7,715			99,644			226,410
Other comprehensive income(1)	14,791			14,325			185,055			420,474
Total comprehensive income	$	61,372		$	54,342		$	316,292		$	632,913

⁽¹⁾ Other comprehensive income includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(2,258) and $(959) for the three months ended September 30, 2017, and 2016, respectively and $(3,867) and $(5,326) for the nine months ended September 30, 2017, and 2016, 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, 2017, and 2016

(In Thousands)

(Unaudited)

	Nine Months Ended September 30, 2017
	Common stock		Additional paid-in capital		Accumulated  other comprehensive income		Retained earnings			Total
Balances, January 1, 2017	$	7,293	$	863,031	$	235,875	$	906,122		$	2,012,321
Net income	—		—		—		131,237			131,237
Other comprehensive income, net of income taxes	—		—		185,055		—			185,055
Dividends	—		—		—		(145,301		)	(145,301		)
Capital contribution(1)	—		76,429		—		—			76,429
Capital contribution - stock-based compensation	—		1,156		—		—			1,156
Balances, September 30, 2017	$	7,293	$	940,616	$	420,930	$	892,058		$	2,260,897

⁽¹⁾ In May 2017, the Company received a capital contribution from its parent, GWL&A Financial, in the amount of $76,429. No additional shares of the Company were issued in relation to this contribution.

	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

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, 2017, and 2016

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2017			2016
Net cash provided by operating activities	$	711,382		$	559,668
Cash flows from investing activities:
Proceeds from sales, maturities and redemptions of investments:
Fixed maturities, available-for-sale	3,920,591			4,829,009
Mortgage loans on real estate	322,326			310,664
Limited partnership interests, other corporation interests and other investments	6,759			9,386
Purchases of investments:
Fixed maturities, available-for-sale	(4,313,849		)	(4,138,915		)
Mortgage loans on real estate	(689,122		)	(626,431		)
Limited partnership interests, other corporation interests and other investments	(17,697		)	(5,491		)
Net change in short-term investments	(517,840		)	(1,988,191		)
Net change in policy loans	(9,677		)	5,980
Purchases of furniture, equipment, and software	(30,867		)	(33,405		)
Net cash used in investing activities	(1,329,376		)	(1,637,394		)
Cash flows from financing activities:
Contract deposits	2,251,508			2,756,047
Contract withdrawals	(1,565,225		)	(1,500,963		)
Net change in due to/from parent and affiliates	(9,760		)	(19,924		)
Dividends paid	(145,301		)	(125,691		)
Capital contribution	76,429			—
Payments for and interest paid on financing element derivatives, net	(3,290		)	(5,281		)
Contingent consideration	—			(14,233		)
Net change in commercial paper borrowings	819			6,600
Net change in book overdrafts	15,659			121
Employee taxes paid for withheld shares	(671		)	(489		)
Income tax benefit on share-based compensation	—			468
Net cash provided by financing activities	620,168			1,096,655
Net increase in cash and cash equivalents	2,174			18,929
Cash and cash equivalents, beginning of year	18,321			34,362
Cash and cash equivalents, end of period	$	20,495		$	53,291

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, 2017, and 2016

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2017			2016
Supplemental disclosures of cash flow information:
Net cash received (paid) during the year for:
Income taxes	$	(17,449	)	$	(24,118	)
Interest	(16,447		)	(21,685		)
Non-cash investing and financing transactions during the years:
Share-based compensation expense	$	1,156		$	1,637
Fair value of assets acquired in settlement of fixed maturity investments	9,323			—

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 formed in 1998.  GWL&A Financial is a direct wholly-owned subsidiary of Great-West Lifeco U.S. LLC (“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, 2016, 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, 2017, 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, 2016.

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, 2017, 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, 2017, 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.  Application of Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The new guidance is effective for the fiscal years beginning after December 15, 2016, including interim periods, a retrospective or a prospective transition approach depending upon the type of change. The new guidance changed several aspects of the accounting for share-based payment award transactions, including: (i) income tax consequences when awards vest or are settled; (ii) classification of awards as either equity or liabilities due to statutory tax withholding requirements; and (iii) classification on the statement of cash flows. The adoption of this ASU did not have a material effect on the Company’s condensed consolidated financial statements.

10

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Future adoption of new accounting pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S. GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of financial services insurance, leases, financial instruments and guarantees. The core principle of the model requires that an entity recognizes 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 Company’s implementation efforts are primarily focused on customer contracts with fee income earned from assets under management, assets under administration, shareholder servicing, administration and recordkeeping services, and investment advisory services as well as the evaluation of certain incremental costs to obtain a customer contract. The Company anticipates that the adoption of this update will primarily impact the accounting for certain contract costs and contract fulfillment costs, which are currently expensed as incurred. Under the new standard, these costs will be deferred and recognized as expenses over the expected customer life. While the Company continues to make progress in its assessment and implementation of this update, it has not yet finalized a range of the potential quantitative impact on its condensed consolidated financial statements or whether the Company will adopt on a prospective or retrospective basis.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted for the instrument-specific credit risk provision. 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, eliminating certain disclosure requirements related to financial instruments measured at amortized cost and adding disclosures related to the measurement categories of financial assets and financial liabilities, 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 the fair value option for financial instruments, and clarifying 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 Company is currently evaluating the impact of this update on its condensed consolidated financial statements and anticipates the primary impact to be the requirement for equity investments such as limited partnership interests, that are currently accounted for under the cost method, to be measured at fair value with changes in the fair value recognized in net income.

In February 2016, the FASB issued ASU 2016-02, Leases, effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual period. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet with lease terms of more than 12 months and also disclose certain qualitative and quantitative information about leasing arrangements. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts and performing a completeness assessment over the lease population. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments, effective for fiscal years and interim periods within those beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. This update 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 Company is currently evaluating the impact of this update on its condensed 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), effective for fiscal years and interim periods within those beginning after December 15, 2017. Early adoption is permitted. This ASU addresses diversity in how certain cash receipts and cash

11

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

payments are presented and classified in the statement of cash flows. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (a consensus of the Emerging Issues Task Force), effective for fiscal years and interim periods within those beginning after December 15, 2017. Early adoption is permitted. This update requires organizations to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, effective for annual or any interim goodwill impairment tests after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The update eliminates Step 2 from the goodwill impairment test and will require management to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.  Any amount by which the carrying amount exceeds the reporting unit’s fair value (not to exceed the goodwill allocated to that reporting unit) is recognized as an impairment charge.  The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, effective for annual reporting periods beginning on or after December 15, 2017, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. This update requires organizations to disaggregate the service cost component from the other components of net benefit costs in the income statement and present it with other current compensation costs for the related employees while providing guidance for capitalization eligibility for service costs. The Company is currently evaluating the impact of this update in its condensed consolidated financial statements.

3.  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, 2017, and 2016, the Company paid dividends of $145,301 and $125,691, respectively, to its parent, GWL&A Financial. 

4.  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, 2017
	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	$	1,502,617	$	49,176	$	8,333	$	1,543,460	$	—
Obligations of U.S. states and their subdivisions	1,884,136		228,301		1,619		2,110,818		—
Corporate debt securities (2)	14,991,367		622,399		118,566		15,495,200		(1,088		)
Asset-backed securities	1,578,590		110,333		12,173		1,676,750		(65,696		)
Residential mortgage-backed securities	68,946		2,618		645		70,919		(141		)
Commercial mortgage-backed securities	1,375,325		22,547		10,920		1,386,952		—
Collateralized debt obligations	724,967		3,832		29		728,770		—
Total fixed maturities	$	22,125,948	$	1,039,206	$	152,285	$	23,012,869	$	(66,925	)

12

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

⁽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 $115,037 and estimated fair value of $111,141.

	December 31, 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	$	3,022,279	$	47,791	$	34,958	$	3,035,112	$	—
Obligations of U.S. states and their subdivisions	1,890,568		214,411		6,317		2,098,662		—
Corporate debt securities (2)	13,811,597		477,316		309,164		13,979,749		(1,488		)
Asset-backed securities	1,226,493		104,274		18,388		1,312,379		(72,464		)
Residential mortgage-backed securities	138,292		3,867		1,167		140,992		23
Commercial mortgage-backed securities	1,222,257		23,207		20,182		1,225,282		—
Collateralized debt obligations	361,241		339		53		361,527		—
Total fixed maturities	$	21,672,727	$	871,205	$	390,229	$	22,153,703	$	(73,929	)

⁽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 $113,239.

See Note 7 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, 2017
	Amortized cost		Estimated fair value
Maturing in one year or less	$	796,697	$	814,539
Maturing after one year through five years	3,998,273		4,166,545
Maturing after five years through ten years	7,432,248		7,650,580
Maturing after ten years	5,000,632		5,356,030
Mortgage-backed and asset-backed securities	4,898,098		5,025,175
Total fixed maturities	$	22,125,948	$	23,012,869

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

13

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

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,
	2017		2016		2017		2016
Proceeds from sales	$	339,051	$	421,245	$	2,810,599	$	3,777,445
Gross realized gains from sales	8,512		8,487		29,433		55,154
Gross realized losses from sales	2,993		24		24,330		170

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

	September 30, 2017			December 31, 2016
Principal	$	3,936,617		$	3,558,863
Unamortized premium (discount) and fees, net	4,244			5,541
Foreign exchange translation	3,000			(2,696		)
Mortgage provision allowance	(773		)	(2,882		)
Total mortgage loans	$	3,943,088		$	3,558,826

The following table summarizes the recorded investment of the mortgage loan portfolio by risk assessment category as of September 30, 2017, and December 31, 2016, respectively: 

	September 30, 2017		December 31, 2016
Performing	$	3,943,861	$	3,560,243
Non-performing	—		1,465
Total	$	3,943,861	$	3,561,708

The following table summarizes activity in the mortgage provision allowance:

	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	Commercial mortgages			Commercial mortgages
Beginning balance	$	2,882		$	2,890
Provision increases	157			536
Charge-off	(663		)	—
Recovery	(30		)	—
Provision decreases	(1,573		)	(544		)
Ending balance	$	773		$	2,882
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	$	—		$	536
Collectively evaluated for impairment	773			2,346
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$	3,943,861		$	3,561,708
Individually evaluated for impairment	—			1,465
Collectively evaluated for impairment	3,943,861			3,560,243

Limited partnership and other corporationinterests — At September 30, 2017 and December 31, 2016, the Company had $45,117 and $34,895, 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

14

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

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 $42,734 and $32,444 at September 30, 2017, and December 31, 2016, respectively.

Securities lending — Securities with a cost or amortized cost of $105,952 and estimated fair values of $103,921 were on loan under the program at September 30, 2017. There were no securities on loan at December 31, 2016.  The Company received cash of $74,795 and securities with a fair value of $32,393 as collateral at September 30, 2017. 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 cash collateral liability under the securities lending program is $74,795, and class of securities loaned consists entirely of Corporate debt securities.

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, 2017
	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	$	631,467	$	8,156	$	11,037	$	177	$	642,504	$	8,333
Obligations of U.S. states and their subdivisions	43,583		726		18,093		893		61,676		1,619
Corporate debt securities	2,401,845		35,750		1,360,880		82,816		3,762,725		118,566
Asset-backed securities	464,858		2,246		224,740		9,927		689,598		12,173
Residential mortgage-backed securities	—		—		12,383		645		12,383		645
Commercial mortgage-backed securities	488,610		5,851		102,235		5,069		590,845		10,920
Collateralized debt obligations	77,015		29		—		—		77,015		29
Total fixed maturities	$	4,107,378	$	52,758	$	1,729,368	$	99,527	$	5,836,746	$	152,285
Total number of securities in an unrealized loss position			397				169				566

15

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	December 31, 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	$	2,006,588	$	34,752	$	10,526	$	206	$	2,017,114	$	34,958
Obligations of U.S. states and their subdivisions	216,154		5,922		10,498		395		226,652		6,317
Corporate debt securities	4,119,630		170,453		860,153		138,711		4,979,783		309,164
Asset-backed securities	316,065		6,971		230,331		11,417		546,396		18,388
Residential mortgage-backed securities	16,962		102		14,297		1,065		31,259		1,167
Commercial mortgage-backed securities	592,508		17,535		26,068		2,647		618,576		20,182
Collateralized debt obligations	160,612		53		—		—		160,612		53
Total fixed maturities	$	7,428,519	$	235,788	$	1,151,873	$	154,441	$	8,580,392	$	390,229
Total number of securities in an unrealized loss position			610				128				738

Fixed maturity investments — Total unrealized losses and OTTI decreased by $237,944, or 61%, from December 31, 2016, to September 30, 2017. The majority, or $183,030, 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, 2017, compared to December 31, 2016, resulting in generally higher valuations of these fixed maturity securities.

Total unrealized losses greater than twelve months decreased by $54,914 from December 31, 2016, to September 30, 2017.  Corporate debt securities account for 83%, or $82,816, of the unrealized losses and OTTI greater than twelve months at September 30, 2017.  Non-investment grade corporate debt securities account for $5,693 of the unrealized losses and OTTI greater than twelve months. Management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings.

Asset-backed securities account for 10% of the unrealized losses and OTTI greater than twelve months at September 30, 2017.  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,
	2017			2016			2017			2016
Beginning balance	$	77,411		$	94,687		$	83,665		$	102,343
Reductions due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(5,273		)	(4,405		)	(11,527		)	(12,061		)
Ending balance	$	72,138		$	90,282		$	72,138		$	90,282

16

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

5.  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 $81,632 and $38,324 as of September 30, 2017, and December 31, 2016, respectively.  The Company had pledged collateral related to these derivatives of $16,171 and zero as of September 30, 2017, and December 31, 2016, respectively, in the normal course of business.  If the credit-risk-related contingent features were triggered on September 30, 2017, the fair value of assets that could be required to settle the derivatives in a net liability position was $65,461.

At September 30, 2017, and December 31, 2016, the Company had pledged $16,171 and zero of unrestricted cash collateral to counterparties in the normal course of business, while other counterparties had pledged $25,353 and $103,214 of unrestricted cash collateral to the Company to satisfy collateral netting agreements, respectively.

At September 30, 2017, the Company estimated $10,544 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.

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.

Foreign currency contracts

Cross-currency swaps and foreign currency forwards 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

17

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

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. The Company uses foreign currency forwards to reduce the risk of foreign currency exchange rate changes on proceeds received on sales of foreign denominated debt instruments; however, hedge accounting is not 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, 2017
			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	$	29,482		$	29,482	$	—
Cross-currency swaps	755,890		(4,310		)	30,874		35,184
Total cash flow hedges	1,175,690		25,172			60,356		35,184
Total derivatives designated as hedges	1,175,690		25,172			60,356		35,184
Derivatives not designated as hedges:
Interest rate swaps	507,100		(2,477		)	10,147		12,624
Futures on equity indices	29,674		—			—		—
Interest rate futures	74,200		—			—		—
Interest rate swaptions	162,423		156			156		—
Other forward contracts	2,954,200		(3,151		)	925		4,076
Cross-currency swaps	612,733		(3,863		)	27,193		31,056
Total derivatives not designated as hedges	4,340,330		(9,335		)	38,421		47,756
Total derivative financial instruments	$	5,516,020	$	15,837		$	98,777	$	82,940

⁽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.

18

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	December 31, 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	$	33,390		$	33,390	$	—
Cross-currency swaps	614,208		45,347			53,641		8,294
Total cash flow hedges	1,034,008		78,737			87,031		8,294
Total derivatives designated as hedges	1,034,008		78,737			87,031		8,294
Derivatives not designated as hedges:
Interest rate swaps	468,100		(4,358		)	8,982		13,340
Futures on equity indices	34,422		—			—		—
Interest rate futures	81,500		—			—		—
Interest rate swaptions	165,534		354			354		—
Cross-currency swaps	612,733		33,371			50,018		16,647
Total derivatives not designated as hedges	1,362,289		29,367			59,354		29,987
Total derivative financial instruments	$	2,396,297	$	108,104		$	146,385	$	38,281

⁽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, 2017, was $908,500, $1,302,507, $113,004, $162,408, and $2,409,855 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively. The average notional outstanding during the year ended December 31, 2016, was $784,900, $1,141,967, $145,658, $156,632, and $2,230,167 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 and comprehensive income reported by cash flow hedges and derivatives not designated as 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,
	2017			2016			2017			2016
Cash flow hedges:
Interest rate swaps	$	115		$	(401	)	$	1,175		$	1,335		(A)
Interest rate swaps	(653		)	(4,284		)	(690		)	(1,092		)	(B)
Cross-currency swaps	(22,573		)	(3,120		)	(108		)	1,576			(A)
Total cash flow hedges	$	(23,111	)	$	(7,805	)	$	377		$	1,819

(A) Net investment income.

(B) Interest expense.

19

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,
	2017			2016			2017			2016
Cash flow hedges:
Interest rate swaps	$	611		$	4,098		$	3,581		$	4,166		(A)
Interest rate swaps	(5,003		)	(29,017		)	(2,357		)	(1,675		)	(B)
Cross-currency swaps	(43,919		)	21,612			21			3,777			(A)
Total cash flow hedges	$	(48,311	)	$	(3,307	)	$	1,245		$	6,268

(A) Net investment income.

(B) Interest expense.

	Gain (loss) on derivatives recognized in net income
	Three Months Ended September 30,
	2017				2016
Derivatives not designated as hedging instruments:
Futures on equity indices	$	(583	)	(A)	$	510		(A)
Futures on equity indices	(1,070		)	(B)	(2,081		)	(B)
Interest rate swaps	492			(A)	418			(A)
Interest rate futures	(40		)	(A)	134			(A)
Interest rate futures	18			(B)	(183		)	(B)
Interest rate swaptions	(6		)	(A)	23			(A)
Interest rate swaptions	(73		)	(B)	(39		)	(B)
Other forward contracts	(571		)	(A)	(8,286		)	(A)
Other forward contracts	7,264			(B)	19,413			(B)
Cross-currency swaps	(16,046		)	(A)	1,872			(A)
Total derivatives not designated as hedging instruments	$	(10,615	)		$	11,781

(A) Net investment income.

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

20

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Gain (loss) on derivatives recognized in net income
	Nine Months Ended September 30,
	2017				2016
Derivatives not designated as hedging instruments:
Futures on equity indices	$	(917	)	(A)	$	103		(A)
Futures on equity indices	(3,890		)	(B)	(5,358		)	(B)
Interest rate swaps	3,919			(A)	19,727			(A)
Interest rate futures	62			(A)	(77		)	(A)
Interest rate futures	(183		)	(B)	(249		)	(B)
Interest rate swaptions	(37		)	(A)	96			(A)
Interest rate swaptions	(224		)	(B)	(256		)	(B)
Other forward contracts	(3,151		)	(A)	7,268			(A)
Other forward contracts	20,383			(B)	31,509			(B)
Cross-currency swaps	(38,297		)	(A)	62,147			(A)
Total derivatives not designated as hedging instruments	$	(22,335	)		$	114,910

(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 $10,221 and $5,712 at September 30, 2017, and December 31, 2016, respectively. The changes in fair value of the GLWB were $(626) and $(590) for the three months ended September 30, 2017, and 2016, respectively, and $(4,509) and $(20,020) for the nine months ended September 30, 2017, and 2016, respectively.

6.  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, 2017
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial						Net
Financial instruments (assets):	recognized assets (1)		instruments			Cash collateral			fair value
Derivative instruments (2)	$	72,217	$	(56,224	)	$	(14,263	)	$	1,730
Short-term reverse repurchase agreements (3)	20,900		(20,900		)	—			—
Total financial instruments (assets)	93,117		(77,124		)	(14,263		)	1,730

21

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	September 30, 2017
		Gross fair value not offset
		in balance sheets
	Gross fair value of	Financial				Net
Financial instruments (liabilities):	recognized liabilities (1)	instruments		Cash collateral		fair value
Derivative instruments (4)	70,720	(56,224	)	(13,006	)	1,490

⁽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, 2016
			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)	$	119,862	$	(26,254	)	$	92,756	$	852
Derivative instruments (liabilities) (3)	26,254		(26,254		)	—		—

⁽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.

22

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

7.  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, 2017
	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	$	—	$	1,543,460	$	—	$	1,543,460
Obligations of U.S. states and their subdivisions	—		2,110,818		—		2,110,818
Corporate debt securities	—		15,485,120		10,080		15,495,200
Asset-backed securities	—		1,676,750		—		1,676,750
Residential mortgage-backed securities	—		70,919		—		70,919
Commercial mortgage-backed securities	—		1,386,952		—		1,386,952
Collateralized debt obligations	—		728,770		—		728,770
Total fixed maturities available-for-sale	—		23,002,789		10,080		23,012,869
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		20,291		—		20,291
Corporate debt securities	—		38,956		—		38,956
Commercial mortgage-backed securities	—		1,081		—		1,081
Total fixed maturities held-for-trading	—		60,328		—		60,328
Short-term investments	320,398		502,673		—		823,071
Collateral under securities lending agreements	1,870		72,925		—		74,795
Collateral under derivative counterparty collateral agreements	41,524		—		—		41,524
Derivative instruments designated as hedges:
Interest rate swaps	—		29,482		—		29,482
Cross-currency swaps	—		30,874		—		30,874
Derivative instruments not designated as hedges:
Interest rate swaps	—		10,147		—		10,147
Interest rate swaptions	—		156		—		156
Other forward contracts	—		925		—		925
Cross-currency swaps	—		27,193		—		27,193
Total derivative instruments	—		98,777		—		98,777
Separate account assets (1)	16,255,644		11,213,991		—		27,866,779
Total assets	$	16,619,436	$	34,951,483	$	10,080	$	51,978,143
Liabilities
Derivative instruments designated as hedges:
Cross-currency swaps	$	—	$	35,184	$	—	$	35,184
Derivative instruments not designated as hedges:
Interest rate swaps	—		12,624		—		12,624
Other forward contracts	—		4,076		—		4,076
Cross-currency swaps	—		31,056		—		31,056
Total derivative instruments	—		82,940		—		82,940
Embedded derivatives - GLWB	—		—		10,221		10,221
Separate account liabilities (2)	18		521,723		—		521,741
Total liabilities	$	18	$	604,663	$	10,221	$	614,902

⁽¹⁾ Included in the total fair value amount are $397 million of investments as of September 30, 2017 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.

23

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, 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	$	—	$	3,035,112	$	—	$	3,035,112
Obligations of U.S. states and their subdivisions	—		2,098,662		—		2,098,662
Corporate debt securities	—		13,968,110		11,639		13,979,749
Asset-backed securities	—		1,312,379		—		1,312,379
Residential mortgage-backed securities	—		140,992		—		140,992
Commercial mortgage-backed securities	—		1,225,282		—		1,225,282
Collateralized debt obligations	—		361,527		—		361,527
Total fixed maturities available-for-sale	—		22,142,064		11,639		22,153,703
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		458,067		—		458,067
Corporate debt securities	—		55,591		—		55,591
Commercial mortgage-backed securities	—		1,080		—		1,080
Total fixed maturities held-for-trading	—		514,738		—		514,738
Short-term investments	267,851		36,137		—		303,988
Collateral under derivative counterparty collateral agreements	103,214		—		—		103,214
Derivative instruments designated as hedges:
Interest rate swaps	—		33,390		—		33,390
Cross-currency swaps	—		53,641		—		53,641
Derivative instruments not designated as hedges:
Interest rate swaps	—		8,982		—		8,982
Interest rate swaptions	—		354		—		354
Cross-currency swaps	—		50,018		—		50,018
Total derivative instruments	—		146,385		—		146,385
Separate account assets (1)	15,407,992		11,199,924		—		27,037,765
Total assets	$	15,779,057	$	34,039,248	$	11,639	$	50,259,793
Liabilities
Collateral under derivative counterparty collateral agreements	$	103,214	$	—	$	—	$	103,214
Derivative instruments designated as hedges:
Cross-currency swaps	—		8,294		—		8,294
Derivative instruments not designated as hedges:
Interest rate swaps	—		13,340		—		13,340
Cross-currency swaps	—		16,647		—		16,647
Total derivative instruments	—		38,281		—		38,281
Embedded derivatives - GLWB	—		—		5,712		5,712
Separate account liabilities (2)	55		336,468		—		336,523
Total liabilities	$	103,269	$	374,749	$	5,712	$	483,730

⁽¹⁾ Included in the total fair value amount are $430 million of investments as of December 31, 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.

24

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 evaluated prices from independent pricing services.  In cases where these 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 flow 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 and collateral under securities lending agreements is a reasonable estimate of fair value due to their short-term nature and high credit quality of the issuers.

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.

25

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, 2017
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, July 1, 2017	$	10,703		$	9,595
Realized and unrealized gains (losses) included in:
Net income (loss)	—			(626		)
Other comprehensive income (loss)	166			—
Settlements	(432		)	—
Transfers out of Level 3 (1)	(357		)	—
Balances, September 30, 2017	$	10,080		$	10,221
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, 2017	$	—		$	(626	)

⁽¹⁾ Transfers out of Level 3 are due primarily to increased observability of inputs in valuation methodologies as evidenced by corroboration of market prices with multiple pricing vendors.

	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	)

26

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, 2017
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, January 1, 2017	$	11,639		$	5,712
Realized and unrealized gains (losses) included in:
Net income (loss)	—			(4,509		)
Other comprehensive income (loss)	83			—
Settlements	(1,275		)	—
Transfers out of Level 3 (1)	(367		)	—
Balances, September 30, 2017	$	10,080		$	10,221
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, 2017	$	—		$	(4,509	)

⁽¹⁾ Transfers out of Level 3 are due primarily to increased observability of inputs in valuation methodologies as evidenced by corroboration of market prices with multiple pricing vendors.

	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.

27

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

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

			Range
	Valuation Technique	Unobservable Input	September 30, 2017	December 31, 2016
Embedded derivatives - GLWB	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%	15% - 30%
		Swap curve	1.33% - 2.54%	0.75% - 3.00%
		Mortality rate	Based on the Annuity 2000 Mortality Table	Based on the Annuity 2000 Mortality Table
		Base Lapse rate	1% - 15%	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, 2017				December 31, 2016
	Carrying		Estimated		Carrying		Estimated
	amount		fair value		amount		fair value
Assets
Mortgage loans on real estate	$	3,943,088	$	4,020,555	$	3,558,826	$	3,574,240
Policy loans	4,073,511		4,073,511		4,019,648		4,019,648
Limited partnership interests	40,433		40,413		29,345		29,822
Other investments	12,631		43,002		14,382		44,687
Liabilities
Annuity contract benefits without life contingencies	$	12,669,339	$	12,641,064	$	12,291,378	$	12,129,631
Policyholders’ funds	245,007		245,007		285,554		285,554
Commercial paper	99,868		99,868		99,049		99,049
Notes payable	534,538		565,903		531,092		495,004

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.

28

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

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 net asset value, determined using the partnership financial statement reported capital account adjusted for other relevant information which may impact the exit value of the investments, is used as a practical expedient to estimate fair value. 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. 

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. 

29

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

8.Other Comprehensive Income

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

	Three Months Ended September 30, 2017
	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, 2017	$	550,776		$	50,132		$	(113,256	)	$	(81,513	)	$	406,139
Other comprehensive income (loss) before reclassifications	25,989			(15,022		)	(1,285		)	5,559			15,241
Amounts reclassified from AOCI	(1,630		)	(245		)	—			1,425			(450		)
Net current period other comprehensive income (loss)	24,359			(15,267		)	(1,285		)	6,984			14,791
Balances, September 30, 2017	$	575,135		$	34,865		$	(114,541	)	$	(74,529	)	$	420,930

	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

	Nine Months Ended September 30, 2017
	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, 2017	$	311,748		$	67,076		$	(58,646	)	$	(84,303	)	$	235,875
Other comprehensive income (loss) before reclassifications	264,685			(31,402		)	(55,895		)	5,559			182,947
Amounts reclassified from AOCI	(1,298		)	(809		)	—			4,215			2,108
Net current period other comprehensive income (loss)	263,387			(32,211		)	(55,895		)	9,774			185,055
Balances, September 30, 2017	$	575,135		$	34,865		$	(114,541	)	$	(74,529	)	$	420,930

30

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

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

	Three Months Ended September 30, 2017
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	39,983		$	(13,994	)	$	25,989
Unrealized holding gains (losses), net, arising on cash flow hedges	(23,111		)	8,089			(15,022		)
Reclassification adjustment for (gains) losses, net, realized in net income	(2,885		)	1,010			(1,875		)
Net unrealized gains (losses) related to investments	13,987			(4,895		)	9,092
Future policy benefits, DAC and VOBA adjustments	(1,977		)	692			(1,285		)
Net unrealized gains (losses)	12,010			(4,203		)	7,807
Employee benefit plan adjustment	10,744			(3,760		)	6,984
Other comprehensive income (loss)	$	22,754		$	(7,963	)	$	14,791

	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

31

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2017
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	407,208		$	(142,523	)	$	264,685
Unrealized holding gains (losses), net, arising on cash flow hedges	(48,311		)	16,909			(31,402		)
Reclassification adjustment for (gains) losses, net, realized in net income	(3,242		)	1,135			(2,107		)
Net unrealized gains (losses) related to investments	355,655			(124,479		)	231,176
Future policy benefits, DAC and VOBA adjustments	(85,992		)	30,097			(55,895		)
Net unrealized gains (losses)	269,663			(94,382		)	175,281
Employee benefit plan adjustment	15,036			(5,262		)	9,774
Other comprehensive income (loss)	$	284,699		$	(99,644	)	$	185,055

	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

32

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,
	2017				2016
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	$	(2,508	)		$	(8,465	)		Other realized investment (gains) losses, net
	(2,508		)		(8,465		)		Total before tax
	(878		)		(2,962		)		Tax expense or benefit
	$	(1,630	)		$	(5,503	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(1,067	)		$	(2,911	)		Net investment income
	690				1,092				Interest Expense
	(377		)		(1,819		)		Total before tax
	(132		)		(637		)		Tax expense or benefit
	$	(245	)		$	(1,182	)		Net of tax
Amortization of employee benefit plan items
Prior service (benefits)	$	(109	)	(1)	$	(150	)	(1)
Actuarial losses	2,302			(1)	2,644			(1)
	2,193				2,494				Total before tax
	768				873				Tax expense or benefit
	$	1,425			$	1,621			Net of tax
Total reclassification	$	(450	)		$	(5,064	)		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 9 for additional details).

33

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2017				2016
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	$	(1,997	)		$	(55,107	)		Other realized investment (gains) losses, net
	(1,997		)		(55,107		)		Total before tax
	(699		)		(19,287		)		Tax expense or benefit
	$	(1,298	)		$	(35,820	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(3,602	)		$	(7,943	)		Net investment income
	2,357				1,675				Interest Expense
	(1,245		)		(6,268		)		Total before tax
	(436		)		(2,194		)		Tax expense or benefit
	$	(809	)		$	(4,074	)		Net of tax
Amortization of employee benefit plan items
Prior service costs (benefits)	$	37		(1)	$	(452	)	(1)
Actuarial losses	6,448			(1)	7,414			(1)
	6,485				6,962				Total before tax
	2,270				2,437				Tax expense or benefit
	$	4,215			$	4,525			Net of tax
Total reclassification	$	2,108			$	(35,369	)		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 9 for additional details).

9.  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
	2017			2016			2017			2016			2017			2016			2017			2016
Components of net periodic cost (benefit):
Service cost	$	2,170		$	3,417		$	378		$	349		$	(4	)	$	73		$	2,544		$	3,839
Interest cost	6,114			6,384			192			184			405			444			6,711			7,012
Expected return on plan assets	(4,980		)	(6,237		)	—			—			—			—			(4,980		)	(6,237		)
Amortization of unrecognized prior service costs (benefits)	—			—			(235		)	(275		)	126			125			(109		)	(150		)
Amortization of losses (gains) from earlier periods	2,241			2,726			75			(67		)	(14		)	(15		)	2,302			2,644
Net periodic cost (benefit)	$	5,545		$	6,290		$	410		$	191		$	513		$	627		$	6,468		$	7,108

34

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan						Total
	2017			2016			2017			2016			2017			2016			2017			2016
Components of net periodic cost (benefit):
Service cost	$	1,436		$	6,087		$	1,092		$	935		$	(12	)	$	219		$	2,516		$	7,241
Interest cost	18,356			18,948			568			534			1,215			1,332			20,139			20,814
Expected return on plan assets	(15,216		)	(18,793		)	—			—			—			—			(15,216		)	(18,793		)
Amortization of unrecognized prior service costs (benefits)	—			—			(339		)	(827		)	376			375			37			(452		)
Amortization of losses (gains) from earlier periods	6,639			7,695			(151		)	(237		)	(40		)	(44		)	6,448			7,414
Net periodic cost (benefit)	$	11,215		$	13,937		$	1,170		$	405		$	1,539		$	1,882		$	13,924		$	16,224

During the 3rd quarter of 2017, the Company approved an amendment to the Plan freezing all benefit accruals for pension-eligible participants as of December 31, 2017.  The Company also approved an amendment to provide pension-eligible employees with full credit for their anniversary year of services that began in 2017, even if the participants had not completed 1,000 hours of service as of December 31, 2017.  The impact of the Plan freeze was reflected on September 25, 2017, and in accordance with ASC 715 Compensation - Retirement Benefits, resulted in a curtailment gain in the amount of $17,244. Additionally, as a result of the amendment to provide an additional year of service credit, prior service cost in the amount of $1,852 was recorded in other comprehensive income as of September 30, 2017.  Under a curtailment due to a plan freeze, any unrecognized prior service cost included in other comprehensive income associated with the employees affected by the pension plan freeze must be fully recognized in benefit cost in determining the net gain or loss to be recognized for the curtailment.  Additionally, the curtailment gain recognized in the income statement is offset by accelerating, in an equal amount, the recognition of any actuarial gain or loss in other comprehensive income. $15,392 of actuarial loss was recognized from other comprehensive income to offset the net curtailment gain.  As a result, the net impact to the income statement was zero.

The Company expects to make payments of approximately $708 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, 2017.  The Company expects to make contributions of zero to its Defined Benefit Pension Plan during the year ended December 31, 2017.  A December 31 measurement date is used for the employee benefit plans.

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Payments to the Post-Retirement Medical Plan	155	212	531	603
Payments to the Supplemental Executive Retirement Plan	834	834	2,502	2,502

10.  Income Taxes

The provision for income taxes is comprised of the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017		2016
Current expense (benefit)	$	27,585		$	(1,399	)	$	58,845	$	41,725
Deferred (benefit) expense	(5,897		)	16,694			6,128		37,318
Total income tax provision	$	21,688		$	15,295		$	64,973	$	79,043

35

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

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,
	2017		2016
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(3.9	)%	(2.7	)%
Tax credits	(0.3	)%	(7.3	)%
State income taxes, net of federal benefit	2.8	%	2.5	%
Other, net	(0.5	)%	(0.4	)%
Effective income tax rate	33.1	%	27.1	%

The Company recorded an increase of $4,694 and a decrease of $5,824 in unrecognized tax benefits during the nine months ended September 30, 2017, and 2016, respectively. The Company anticipates additional increases to its unrecognized tax benefits of $6,000 to $7,000 in the next twelve months. The Company expects that the majority of the increase in its unrecognized tax benefits will not impact the effective tax rate.

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 2013 and prior.  Tax years 2014 through 2016 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.

11.  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, and Other. 

Individual Markets

The Individual Markets reporting and operating segment distributes life insurance and individual annuity 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 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

36

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Life Assurance Company (“CLAC”) (“the GWSC operating segment”), 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.  The Company evaluates performance of its reportable segments based on their profitability from operations after income taxes. Inter-segment 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, 2017
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	125,757	$	764	$	18,983		$	145,504
Fee income	27,780		234,957		1,567			264,304
Other revenue	—		3,322		—			3,322
Net investment income	185,447		103,334		11,801			300,582
Realized investment gains (losses), net	2,389		11,472		—			13,861
Total revenues	341,373		353,849		32,351			727,573
Benefits and expenses:
Policyholder benefits	272,396		53,736		18,109			344,241
Operating expenses	41,332		255,623		18,108			315,063
Total benefits and expenses	313,728		309,359		36,217			659,304
Income (loss) before income taxes	27,645		44,490		(3,866		)	68,269
Income tax expense (benefit)	9,398		13,641		(1,351		)	21,688
Net income (loss)	$	18,247	$	30,849	$	(2,515	)	$	46,581

	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

37

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2017
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	302,017	$	1,908	$	61,483		$	365,408
Fee income	82,960		698,850		4,948			786,758
Other revenue	—		9,367		—			9,367
Net investment income	562,440		313,710		35,124			911,274
Realized investment gains (losses), net	7,010		17,168		(7		)	24,171
Total revenues	954,427		1,041,003		101,548			2,096,978
Benefits and expenses:
Policyholder benefits	740,655		152,067		60,491			953,213
Operating expenses	127,137		760,564		59,854			947,555
Total benefits and expenses	867,792		912,631		120,345			1,900,768
Income (loss) before income taxes	86,635		128,372		(18,797		)	196,210
Income tax expense (benefit)	29,579		42,063		(6,669		)	64,973
Net income (loss)	$	57,056	$	86,309	$	(12,128	)	$	131,237

	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 before income taxes	163,197		119,573		8,712		291,482
Income tax expense	55,183		20,579		3,281		79,043
Net income	$	108,014	$	98,994	$	5,431	$	212,439

12.  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, 2017, and December 31, 2016.  At September 30, 2017, and December 31, 2016, 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 $1,141,440 and renews annually until it expires on July 3, 2027.  The second letter of credit is for $70,000 and renews annually unless the Company terminates it under the provisions specified in the agreement.  At September 30, 2017, and December 31, 2016, 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, 2017, and December 31, 2016, 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, 2017, and December 31, 2016, were as follows:

	September 30, 2017		December 31, 2016
Due in less than one year	$	464,957	$	438,458
Due within one to three years	2,239		—
Total	$	467,196	$	438,458

38

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands)

(Unaudited)

Included in the total unfunded commitments at September 30, 2017, and December 31, 2016, is $76,617 and $93,440, respectively, related to cost basis limited partnership interests, 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, 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.

13.  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.

39

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, 2016.  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, 2017, compared with the same period in 2016.  This discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, 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

On April 6, 2016, the U.S. Department of Labor (“DOL”) 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.  The Company has analyzed the rule against current business practices, particularly in its Empower Retirement and Individual Markets businesses.  The rule requires changes to certain aspects of product and service delivery but management does not expect that it will prevent Great-West Financial from executing on their overall business strategy and growth objectives.  The Company is in compliance with the components of the rule that were effective June 9, 2017 and is preparing to be fully compliant by January 1, 2018 if required. The DOL has proposed an extension of the full compliance date to July 1, 2019.  The Company is monitoring the DOL’s decision whether to finalize an extension.

The Company continues to monitor the potential for significant policy changes following the release of the Tax Reform Framework by the Trump Administration, House Ways and Means Committee and Senate Finance Committee; including corporate tax reform which would have an impact on the Company's deferred tax assets and liabilities as well as the effective tax rate in subsequent periods.

40

Current Market Conditions

The S&P 500 index at September 30, 2017 was up by 4% compared to June 30, 2017 and up by 12.5% compared to January 1, 2017. The S&P 500 index at September 30, 2016 was up by 3% compared to June 30, 2016 and was up by 6% compared to January 1, 2016.  The average of the S&P 500 index was up by 14% and 16% during the three and nine months ended September 30, 2017, respectively, when compared to the same period in 2016.

	2017			2016
S&P 500 Index	Close	Average in Quarter	Average for Year to Date	Close	Average in Quarter	Average for Year to Date
September 30	2,519	2,465	2,396	2,168	2,161	2,063
June 30	2,423	2,396	2,360	2,099	2,074	2,013
March 31	2,363	2,324	2,324	2,060	1,952	1,952
January 1	2,239			2,044

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, 2017, when compared to the same period in 2016. For the three and nine months ended September 30, 2017, 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.

The 10-year U.S. Treasury rate at September 30, 2017, was up by 2 basis points as compared to June 30, 2017 and was down by 12 basis points as compared to January 1, 2017. The 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 average of the 10-year U.S. Treasury rate during the three months ended September 30, 2017, was up by 68 basis points when compared to 2016 and the rate during the nine months ended September 30, 2017 was up by 58 basis points when compared to 2016.

	2017						2016
10-Year Treasury Rate	Close		Average in Quarter		Average for Year to Date		Close		Average in Quarter		Average for Year to Date
September 30	2.33	%	2.24	%	2.32	%	1.60	%	1.56	%	1.74	%
June 30	2.31	%	2.26	%	2.35	%	1.49	%	1.75	%	1.89	%
March 31	2.35	%	2.45	%	2.45	%	1.78	%	1.91	%	1.91	%
January 1	2.45	%					2.27	%

Unrealized gains on fixed maturity investments fluctuate with changes in the prevailing interest rates. When interest rates decrease, market values of fixed maturity investments generally increase. The Company has recorded in other comprehensive income favorable changes in unrealized gains (losses), net, on fixed maturity investments, of $37 million and $406 million for the three and nine months ended September 30, 2017, compared to favorable changes of $48 million and $846 million for the three and nine months ended September 30, 2016. This resulted in an increase in accumulated other comprehensive income (loss), net of policy holder related amounts, and deferred taxes.

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 condensed 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. For the three and nine months ended September 30, 2017, the Company recorded realized gains on forward settling to be announced (“TBA”) securities of $7 million and $20 million, respectively, compared to gains of $19 million and $32 million, respectively in 2016. For the three and nine months ended September 30, 2017, the Company recorded losses in net investment income on cross-currency swaps of $16 million and $38 million, compared to gains of $2 million and $62 million, respectively, in 2016.

41

Reconciliation of Net Income to Adjusted Operating Income

The Company uses the same accounting policies and procedures to measure adjusted 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 adjusted operating income as net income, excluding realized and unrealized gains and losses on investments and derivatives and their related tax effect. Adjusted 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 adjusted operating income measures may not be comparable to similarly titled measures reported by other companies.

Three months ended September 30, 2017 compared with the three months ended September 30, 2016

The Company believes that the presentation of adjusted operating income enhances the understanding of the Company’s performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted 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 adjusted operating income:

	Three Months Ended September 30,						Increase			Percentage
Income statement data (In millions)	2017			2016			(decrease)			change
Net income (loss)
Individual Markets segment	$	18		$	20		$	(2	)	(10	)%
Empower Retirement segment	31			21			10			48	%
Other segment	(3		)	(1		)	(2		)	200	%
Total net income (loss)	46			40			6			15	%
Adjustments to net income (loss)
Unrealized investment gains (losses), net	(19		)	(9		)	(10		)	111	%
Realized investment gains (losses), net	13			33			(20		)	(61	)%
Pro-rata tax (expense) benefit(1)	2			(8		)	10			(125	)%
Adjusted operating income (loss)	$	50		$	24		$	26		108	%

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

Unrealized investment gains (losses), net, had an unfavorable change of $10 million, or 111%, from a loss of $9 million in 2016 to a loss of $19 million in 2017. The change was due to a $19 million unfavorable change from derivatives, partially offset by an favorable change of $8 million from forward settling TBA securities.

Realized investment gains (losses), net, had an unfavorable change of $20 million, or 61%, from a gain of $33 million in 2016 to a gain of $13 million in 2017. The change was primarily due to a $12 million unfavorable change from forward settling TBA securities and a $9 million unfavorable change from bonds.

Pro-rata tax expense changed by $10 million, or 125%, from an expense of $8 million in 2016 to a benefit of $2 million in 2017, due to the unfavorable change in total unrealized and realized investment gains (losses), net.

42

Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016

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

	Nine Months Ended September 30,						Increase			Percentage
Income statement data (In millions)	2017			2016			(decrease)			change
Net income (loss)
Individual Markets segment	$	57		$	108		$	(51	)	(47	)%
Empower Retirement segment	86			99			(13		)	(13	)%
Other segment	(12		)	5			(17		)	(340	)%
Total net income (loss)	131			212			(81		)	(38	)%
Adjustments to net income (loss)
Unrealized investment gains (losses), net	(39		)	73			(112		)	(153	)%
Realized investment gains (losses), net	24			107			(83		)	(78	)%
Pro-rata tax (expense) benefit (1)	6			(63		)	69			110	%
Adjusted operating income (loss)	$	140		$	95		$	45		47	%

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

Unrealized investment gains (losses), net, had an unfavorable change of $112 million, or 153%, from a gain of $73 million in 2016 to a loss of $39 million in 2017. The primary drivers of the change was a $103 million unfavorable change in unrealized gains on derivatives and an $10 million unfavorable change in unrealized gains on forward settling TBA securities.

Realized investment gains (losses), net, had an unfavorable change of $83 million, or 78%, to $24 million during the nine months ended September 30, 2017, when compared to the same period in 2016. The change was primarily driven by an unfavorable change of $78 million from losses on bonds and an $11 million unfavorable change in unrealized gains on forward settling TBA securities.

Pro-rata tax expense (benefit) had a change of $69 million, or 110%, from a $63 million expense to a $6 million benefit during the nine months ended September 30, 2017, when compared to the same period in 2016, resulting from the unfavorable change in total unrealized and realized investment gains (losses), net.

43

Company Results of Operations

Three months ended September 30, 2017 compared with the three months ended September 30, 2016

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

	Three Months Ended September 30,				Increase			Percentage
Income statement data (In millions)	2017		2016		(decrease)			change
Premium income	$	146	$	146	$	—		—	%
Fee income	264		246		18			7	%
Other revenue	3		3		—			—	%
Adjusted net investment income	320		301		19			6	%
Total adjusted operating revenues	733		696		37			5	%
Policyholder benefits	344		347		(3		)	(1	)%
Operating expenses	315		318		(3		)	(1	)%
Total benefits and expenses	659		665		(6		)	(1	)%
Adjusted operating income (loss) before income taxes	74		31		43			139	%
Adjusted income tax expense (benefit)	24		7		17			243	%
Adjusted operating income (loss)	$	50	$	24	$	26		108	%

The Company’s consolidated adjusted operating income had a favorable change of $26 million, or 108%, to $50 million for the three months ended September 30, 2017, when compared to the same period in 2016. The increase was primarily due to increased adjusted net investment income and higher fee income, partially offset by increased tax expense.

Fee income had a favorable change of $18 million, or 7%, to $264 million for the three months ended September 30, 2017, when compared to the same period in 2016. This increase was primarily related to an increase in asset-based variable fee income resulting from increased average asset levels driven by sales and higher average equity market levels.

Adjusted net investment income had a favorable change of $19 million, or 6%, to $320 million. The increase was primarily related to higher investment income earned on bonds, mortgages, and policy loans as a result of higher invested asset balances.

Adjusted income tax expense increased by $17 million, from an expense of $7 million in 2016 to $24 million in 2017 primarily due to increased adjusted operating income before income taxes.

44

Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016

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

	Nine Months Ended September 30,				Increase			Percentage
Income statement data (In millions)	2017		2016		(decrease)			change
Premium income	$	365	$	378	$	(13	)	(3	)%
Fee income	787		710		77			11	%
Other revenue	9		10		(1		)	(10	)%
Adjusted net investment income	951		905		46			5	%
Total adjusted operating revenues	2,112		2,003		109			5	%
Policyholder benefits	953		947		6			1	%
Operating expenses	948		945		3			—	%
Total benefits and expenses	1,901		1,892		9			—	%
Adjusted operating income (loss) before income taxes	211		111		100			90	%
Adjusted income tax expense (benefit)	71		16		55			344	%
Adjusted operating income (loss)	$	140	$	95	$	45		47	%

The Company’s consolidated adjusted operating income had a favorable change of $45 million or 47%, to $140 million for the nine months ended September 30, 2017, when compared to the same period in 2016. The change was primarily due to higher fee income and adjusted net investment income, partially offset by higher adjusted income tax expense.

Fee income had a favorable change of $77 million, or 11% to $787 million during the nine months ended September 30, 2017, when compared to the same period in 2016. This was primarily related to an increase in asset-based variable fee income resulting from increased average asset levels driven by sales and higher average equity market levels.

Adjusted net investment income had a favorable change of $46 million, or 5%, to $951 million. The increase was primarily related to higher investment income earned on bonds, mortgages, and policy loans as a result of higher invested asset balances.

Adjusted income tax expense had an unfavorable change of $55 million or 344%, to $71 million for the nine months ended September 30, 2017, when compared to the same period in 2016 primarily due to an increase in adjusted operating income before income taxes in addition to a management election to claim foreign tax credits in the prior year.

45

Individual Markets Segment Results of Operations

Three months ended September 30, 2017 compared with the three months ended September 30, 2016

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)	2017		2016		(decrease)			change
Premium income	$	126	$	127	$	(1	)	(1	)%
Fee income	28		24		4			17	%
Adjusted net investment income	197		191		6			3	%
Total adjusted operating revenues	351		342		9			3	%
Policyholder benefits	272		281		(9		)	(3	)%
Operating expenses	41		36		5			14	%
Total benefits and expenses	313		317		(4		)	(1	)%
Adjusted operating income (loss) before income taxes	38		25		13			52	%
Adjusted income tax expense (benefit)	12		8		4			50	%
Adjusted operating income (loss)	$	26	$	17	$	9		53	%

Adjusted operating income for the Individual Markets segment had a favorable change of $9 million, or 53%, to $26 million during the three months ended September 30, 2017, when compared to the same period in 2016. The increase was primarily due to lower policyholder benefits expense, higher adjusted net investment income and fee income, partially offset by higher operating expenses and adjusted income tax expense.

Fee income increased by $4 million, or 17%, to $28 million for the three months ended September 30, 2017, when compared to the same period in 2016. This was primarily related to an increase in asset-based variable fee income resulting from increased average asset levels driven by sales.

Adjusted net investment income had a favorable change of $6 million, or 3%, to $197 million. The increase was primarily related to higher investment income earned on bonds, mortgages, and policy loans as a result of higher invested asset balances.

Policyholder benefits decreased by $9 million, or 3%, to $272 million for the three months ended September 30, 2017, when compared to the same period in 2016 primarily due to favorable mortality experience.

Operating expenses had a unfavorable change of $5 million, or 14%, to $41 million for the three months ended September 30, 2017, when compared to the same period in 2016. The primary driver of this decrease is higher DAC amortization.

Adjusted income tax expense increased by $4 million, from an expense of $8 million in 2016 to $12 million in 2017 primarily due to an increase in adjusted operating income before income taxes.

46

Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016

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)	2017		2016		(decrease)			change
Premium income	$	302	$	311	$	(9	)	(3	)%
Fee income	83		72		11			15	%
Adjusted net investment income	581		569		12			2	%
Total revenues	966		952		14			1	%
Policyholder benefits	741		750		(9		)	(1	)%
Operating expenses	127		127		—			—	%
Total benefits and expenses	868		877		(9		)	(1	)%
Adjusted operating income (loss) before income taxes	98		75		23			31	%
Adjusted income tax expense (benefit)	34		24		10			42	%
Adjusted operating income (loss)	$	64	$	51	$	13		25	%

Adjusted operating income for the Individual Markets segment had a favorable change of $13 million, or 25%, to $64 million during the nine months ended September 30, 2017, when compared to the same period in 2016. The change was primarily due to a favorable change in adjusted net investment income and higher fee income, partially offset by higher adjusted income tax expense.

Fee income increased by $11 million, or 15%, to $83 million during the nine months ended September 30, 2017, when compared to the same period in 2016. This was primarily related to an increase in asset-based variable fee income resulting from increased average asset levels driven by sales.

Adjusted net investment income had a favorable change of $12 million, or 2%, to $581 million for the nine months ended September 30, 2017, when compared to the same period in 2016. This was due to higher investment income earned on bonds, mortgages, and policy loans as a result of higher invested asset balances.

Adjusted income tax expense increased by $10 million, from an expense of $24 million in 2016 to $34 million in 2017 primarily due to an increase in adjusted operating income before income taxes.

47

Empower Retirement Segment Results of Operations

Three months ended September 30, 2017 compared with the three months ended September 30, 2016

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)	2017		2016			(decrease)			change
Premium income	$	1	$	—		$	1		100	%
Fee income	235		$	221		14			6	%
Other revenue	3		3			—			—	%
Adjusted net investment income	111		99			12			12	%
Total adjusted operating revenues	350		323			27			8	%
Policyholder benefits	54		52			2			4	%
Operating expenses	256		263			(7		)	(3	)%
Total benefits and expenses	310		315			(5		)	(2	)%
Adjusted operating income (loss) before income taxes	40		8			32			400	%
Adjusted income tax expense (benefit)	13		(1		)	14			(1,400	)%
Adjusted operating income (loss)	$	27	$	9		$	18		200	%

Adjusted operating income for the Empower Retirement segment increased by $18 million, or 200%, to $27 million for the three months ended September 30, 2017, when compared to the same period in 2016. The change was primarily due to higher fee income, higher adjusted net investment income, partially offset by higher adjusted income tax expense.

Fee income increased by $14 million, or 6%, to $235 million for the three months ended September 30, 2017, when compared to the same period in 2016. This increase was primarily related to an increase in asset-based variable fee income resulting from increased average asset levels driven by sales and higher average equity market levels.

Adjusted net investment income had a favorable change of $12 million, or 12%, to $111 million for the three months ended September 30, 2017, when compared to the same period in 2016. The primary driver of the change was higher investment income on bonds, mortgages and policy loans as a result of higher invested asset balances.

Adjusted income tax expense had an unfavorable change of $14 million, or 1,400%, to $13 million for the three months ended September 30, 2017, when compared to the same period in 2016. The increased tax expense is primarily due to higher adjusted operating income before income taxes.

48

Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016

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)	2017		2016			(decrease)			change
Premium income	$	2	$	1		$	1		100	%
Fee income	699		634			65			10	%
Other revenue	9		10			(1		)	(10	)%
Adjusted net investment income	335		299			36			12	%
Total adjusted operating revenues	1,045		944			101			11	%
Policyholder benefits	152		154			(2		)	(1	)%
Operating expenses	761		762			(1		)	—	%
Total benefits and expenses	913		916			(3		)	—	%
Adjusted operating income (loss) before income taxes	132		28			104			371	%
Adjusted income tax expense (benefit)	44		(11		)	55			(500	)%
Adjusted operating income (loss)	$	88	$	39		$	49		126	%

Adjusted operating income for the Empower Retirement segment had an favorable change of $49 million, or 126%, to $88 million for the nine months ended September 30, 2017, when compared to the same period in 2016. The change was primarily due to higher fee income and adjusted net investment income, partially offset by higher adjusted income tax expense.

Fee income increased by $65 million, or 10%, to $699 million for the nine months ended September 30, 2017, when compared to the same period in 2016. This was primarily related to an increase in asset-based variable fee income resulting from increased average asset levels driven by sales and higher average equity market levels.

Adjusted net investment income had a favorable change of $36 million, or 12%, to $335 million for the nine months ended September 30, 2017, when compared to the same period in 2016. The primary driver of the change was higher investment income on bonds, mortgages, and policy loans as a result of higher invested asset balances.

Adjusted income tax expense had an increase of $55 million, or 500%, to $44 million during the nine months ended September 30, 2017, when compared to the same period in 2016. The change was primarily as a result of to higher adjusted operating income before income taxes in addition to a management election to claim foreign tax credits in prior year.

49

Other Segment Results of Operations

Three months ended September 30, 2017 compared with the three months ended September 30, 2016

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)	2017			2016			(decrease)			change
Premium income	$	19		$	19		$	—		—	%
Fee income	1			1			—			—	%
Adjusted net investment income	12			11			1			9	%
Total adjusted operating revenues	32			31			1			3	%
Policyholder benefits	18			14			4			29	%
Operating expenses	18			19			(1		)	(5	)%
Total benefits and expenses	36			33			3			9	%
Adjusted operating income (loss) before income taxes	(4		)	(2		)	(2		)	100	%
Adjusted income tax expense (benefit)	(1		)	—			(1		)	100	%
Adjusted operating income (loss)	$	(3	)	$	(2	)	$	(1	)	50	%

Adjusted operating income for the Company’s Other segment decreased by $1 million, or 50%, to a loss of $3 million for the three months ended September 30, 2017 compared to a loss of $2 million in 2016. The decrease in adjusted operating income was primarily due to an increase in policyholder benefits expense, partially offset by lower adjusted income tax expense.

Policyholder benefits expense increased by $4 million, or 29%, to $18 million for the three months ended September 30, 2017 primarily due to lower surrenders than expected on a closed block of business.

Adjusted income tax benefit increased by $1 million, or 100%, to $1 million for the three months ended September 30, 2017 primarily due to a higher adjusted operating loss before income taxes when compared to the same period in prior year.

50

Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016

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)	2017			2016		(decrease)			change
Premium income	$	61		$	66	$	(5	)	(8	)%
Fee income	5			4		1			25	%
Adjusted net investment income	35			37		(2		)	(5	)%
Total adjusted operating revenues	101			107		(6		)	(6	)%
Policyholder benefits	60			43		17			40	%
Operating expenses	60			56		4			7	%
Total benefits and expenses	120			99		21			21	%
Adjusted operating income (loss) before income taxes	(19		)	8		(27		)	(338	)%
Adjusted income tax expense (benefit)	(7		)	3		(10		)	(333	)%
Adjusted operating income (loss)	$	(12	)	$	5	$	(17	)	(340	)%

Adjusted operating income for the Company’s Other segment had an unfavorable change of $17 million or 340%, to a loss of $12 million for the nine months ended September 30, 2017, when compared to income of $5 million in 2016. The change in adjusted operating income is primarily due to lower premium income, higher policyholder benefits expense and higher operating expenses, partially offset by lower adjusted income tax expense.

Premium income decreased by $5 million, or 8%, to $61 million for the nine months ended September 30, 2017 primarily due to a closed block of business.

Policyholder benefits increased by $17 million, or 40%, to $60 million for the nine months ended September 30, 2017 primarily due to lower surrenders than expected on a closed block of business.

Operating expenses increased by $4 million, or 7%, to $60 million for the nine months ended September 30, 2017 primarily due to restructuring costs.

Adjusted income tax expense (benefit) had a favorable change of $10 million or 333%, to a benefit of $7 million for the nine months ended September 30, 2017 primarily due to an adjusted operating loss before income taxes as compared to an adjusted operating income before income taxes in the prior period.

51

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, 2017				December 31, 2016
Fixed maturities, available-for-sale	$	23,013	72.0	%	$	22,154	72.4	%
Fixed maturities, held-for-trading	60		0.2	%	515		1.7	%
Mortgage loans on real estate	3,943		12.3	%	3,559		11.6	%
Policy loans	4,074		12.7	%	4,020		13.1	%
Short-term investments	823		2.6	%	303		1.0	%
Limited partnership and other corporation interests	45		0.1	%	35		0.1	%
Other investments	20		0.1	%	15		0.1	%
Total investments	$	31,978	100.0	%	$	30,601	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 independent external rating agencies and the Company generally considers ratings from several of these major ratings agencies to develop its internal rating. 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, 2017		December 31, 2016
AAA	22.1	%	27.3	%
AA	14.3	%	13.9	%
A	34.3	%	30.8	%
BBB	28.3	%	26.8	%
BB and below (Non-investment grade)	1.0	%	1.2	%
Total	100.0	%	100.0	%

52

The September 30, 2017, AAA rating percentage decreased as compared to December 31, 2016, 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, 2017		December 31, 2016
Utility	18.2	%	18.1	%
Finance	13.5	%	10.8	%
Consumer	11.1	%	9.7	%
Natural resources	6.3	%	6.3	%
Transportation	4.2	%	3.6	%
Other	14.0	%	13.3	%

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.  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, forwards, 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. 

53

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, 2016, under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Application of Recent Accounting Pronouncements

See Note 2 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 and cash equivalents that totaled $391 million and $322 million as of September 30, 2017, and December 31, 2016, respectively.  The September 30, 2017, and December 31, 2016, 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, 2017, and December 31, 2016, 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

54

markets through the issuance of commercial paper.  The Company had $100 million and $99 million of commercial paper outstanding as of September 30, 2017, and December 31, 2016, 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. The Company’s issuance of commercial paper is not used to fund daily operations and does not have a significant impact on the Company’s liquidity.

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, 2017.  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, 2017, and December 31, 2016, were $467 million and $438 million, respectively.  The precise timing of the fulfillment of the commitment cannot be predicted; however, $465 million of the September 30, 2017 balance, and all $438 million of the December 31, 2016 balance are due within one year of the dates indicated. The remaining $2 million of the September 30, 2017 balance is due within one to three years. 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 $21 million and zero at September 30, 2017, and December 31, 2016, respectively.  Non-cash collateral on deposit with the third-party custodian on the Company’s behalf was $21 million and zero at September 30, 2017, and December 31, 2016, 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 $32 million as collateral at September 30, 2017, 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, 2016.

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.

55

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

• 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, 2016, under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.”

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, 2017.

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, 2016, 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, 2017. Management is committed to continuing to improve its internal control processes and will continue to review its financial reporting controls and procedures.

56

Part IIOther Information

Item 1.Legal Proceedings

From time to time, the Company may be threatened with, or named as a defendant in, lawsuits, 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.

57

• 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.

• Counterparties with whom the Company transfers risk may be unable or unwilling to do business with the Company.

• The Company may not be able to secure financing to meet the liquidity or capital needs of the Company.

58

Item 6.Exhibits

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

Index to Exhibits

Exhibit Number	Title
3(ii)	Bylaws of Great-West Life & Annuity Insurance Company
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 9, 2017
		Kara Roe
		Vice President, Controller, and Principal Accounting Officer

59

EX-3.II

        Exhibit 3(ii)

BYLAWS OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

ARTICLE I

MEETING OF SHAREHOLDERS

SECTION 1. The Annual Meeting of Shareholders shall be held at such time, on such date and at such place within or without the State of Colorado as the Board of Directors may determine from time to time.

SECTION 2. Special Meetings of Shareholders may be called by the Chairman or a majority of the Board of Directors at any time upon written notice given pursuant to law (which notice may be waived in accordance with law).

ARTICLE II

BOARD OF DIRECTORS

SECTION 1. The number of directors may be fixed by the Board of Directors from time to time to such number, not less than seven (7) nor more than twenty-five (25), as the Board may determine.

SECTION 2. Any vacancy on the Board of Directors, whether resulting from an increase in the number of directors or otherwise, may be filled by the affirmative vote of a majority of directors then in office, even though less than a quorum, or by a sole remaining director. Directors shall be elected by the Board of Directors to serve until the next annual meeting of the Shareholders.

SECTION 3. A meeting of the Board may be called by the Chairman of the Board, by the Chairman of the Executive Committee, by such other Director as may from time to time be authorized by the Chairman of the Board, or by a majority of the Directors, on not less than 48 hours notice to the members of the Board specifying the place, date and time of the meeting. Meetings may be held at any time without notice if all members of the Board waive notice. If a meeting of the Board is called by anyone other than the Chairman of the Board, the person[s] calling such a meeting shall so advise the Chairman of the Board. A meeting of a Committee of the Board may be called by the Chairman of the Committee, by the Chairman of the Board, by such other Director(s) as may from time to time be authorized by the Chairman of the Committee, or by a majority of the Committee members, on not less than 48 hours notice to the members of the Committee specifying the place, date and time of the meeting. Meetings may be held at any time without notice if all members of the Committee waive notice. If a meeting of the Committee is called by anyone other than the Chairman of the Board, the person[s] calling the meeting shall so inform the Chairman of the Board and the Chairman of the Committee.

SECTION 4. A quorum at any meeting of the Board shall be a majority of the number of Board members fixed by the Board from time to time. A quorum at any meeting of a Committee of the Board shall be a majority of the Committee members.

1

        Exhibit 3(ii)

SECTION 5. The Board shall establish an Executive Committee, an Audit Committee, a Conduct Review Committee, a Governance and Nominating Committee and a Compensation Committee, and may establish such other Committees as it deems advisable to assist it in discharging its duties, and may establish Committee charters and otherwise delegate to those Committees such duties and responsibilities as may be permitted by law and as it deems necessary or advisable.

ARTICLE III

OFFICERS

The Chairman of the Board and the President and Chief Executive Officer shall be initially appointed by the Board of Directors. Officers at the level of Senior Vice President and above shall be initially appointed by the Chairman of the Board. The Board of Directors shall annually reappoint all officers at the level of Senior Vice President and above. Officers at a level below Senior Vice President may be appointed by the President and Chief Executive Officer. Any number of offices may be held by the same person. Such officers shall have such authority and perform such duties as normally pertain to their offices or as may from time to time be determined by the Board of Directors.

ARTICLE IV

INDEMNIFICATION

SECTION 1. In this Article, the following terms shall have the following meanings:

(a) “expenses” means reasonable expenses incurred in a proceeding, including expenses of investigation and preparation, expenses in connection with an appearance as a witness, and fees and disbursement of counsel, accountants or other experts;

(b) “liability” means an obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty or fine;

(c) “party” includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding;

(d) “proceeding” means any threatened, pending or completed action, suit, or proceeding whether civil, criminal, administrative or investigative, and whether formal or informal.

SECTION 2. Subject to applicable law, if any person who is or was a director, officer or employee of the corporation is made a party to a proceeding because the person is or was a director, officer or employee of the corporation, the corporation shall indemnify the person, or the estate or personal representative of the person, from and against all liability and expenses incurred by the person in the proceeding (and advance to the person expenses incurred in the proceeding) if, with respect to the matter(s) giving rise to the proceeding:

2

        Exhibit 3(ii)

(a) the person conducted himself or herself in good faith; and

(b) the person reasonably believed that his or her conduct was in the corporation’s best interests; and

(c) in the case of any criminal proceeding, the person had no reasonable cause to believe that his or her conduct was unlawful; and

(d) if the person is or was an employee of the corporation, the person acted in the ordinary course of the person’s employment with the corporation.

SECTION 3. Subject to applicable law, if any person who is or was serving as a director, officer, trustee, plan administrator or employee of another company or entity at the request of the corporation is made a party to a proceeding because the person is or was serving as a director, officer, trustee or employee of the other company or entity, the corporation shall indemnify the person, or the estate or personal representative of the person, from and against all liability and expenses incurred by the person in the proceeding (and advance to the person expenses incurred in the proceeding) if:

(a) the person is or was appointed to serve at the request of the corporation as a director, officer, trustee or employee of the other company or entity in accordance with Indemnification Procedures approved by the Board of Directors of the corporation; and

(b) with respect to the matter(s) giving rise to the proceeding:

(i) the person conducted himself or herself in good faith; and

(ii) the person reasonably believed that his or her conduct was at least not opposed to the corporation’s best interests (in the case of a trustee or plan administrator of one of the corporation’s staff benefits plans, this means that the person’s conduct was for a purpose the person reasonably believed to be in the interests of the plan participants); and

(iii) in the case of any criminal proceeding, the person had no reasonable cause to believe that his or her conduct was unlawful; and

(iv) if the person is or was an employee of the other company or entity, the person acted in the ordinary course of the person’s employment with the other company or entity.

**************************

3

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 9, 2017
/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 9, 2017
/s/	Andra Bolotin
	Andra Bolotin
	Executive 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, 2017 (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 9, 2017	/s/	Robert L. Reynolds
			Robert L. Reynolds
			President and Chief Executive Officer
Dated:	November 9, 2017	/s/	Andra Bolotin
			Andra Bolotin
			Executive 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, 2017	Nov. 09, 2017
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, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		7,292,708

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $22,125,948 and $21,672,727)	$ 23,012,869	$ 22,153,703
Fixed maturities, held-for-trading, at fair value (amortized cost $59,034 and $519,495)	60,328	514,738
Mortgage loans on real estate (net of allowances of $773 and $2,882)	3,943,088	3,558,826
Policy loans	4,073,511	4,019,648
Short-term investments (amortized cost $823,071 and $303,988)	823,071	303,988
Limited partnership and other corporation interests	45,117	34,895
Other investments	20,037	15,052
Total investments	31,978,021	30,600,850
Other assets:
Cash and cash equivalents	20,495	18,321
Reinsurance recoverable	591,805	598,864
Deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”)	461,348	486,690
Investment income due and accrued	316,895	287,681
Collateral under securities lending agreements	74,795	0
Due from parent and affiliates	92,217	81,995
Goodwill	137,683	137,683
Other intangible assets	17,808	20,087
Other assets	934,655	1,021,210
Assets of discontinued operations	16,865	17,652
Separate account assets	27,866,779	27,037,765
Total assets	62,509,366	60,308,798
Policy benefit liabilities:
Future policy benefits	29,881,799	28,872,899
Policy and contract claims	386,556	372,259
Policyholders’ funds	245,007	285,554
Provision for policyholders’ dividends	48,847	49,521
Undistributed earnings on participating business	15,742	15,573
Total policy benefit liabilities	30,577,951	29,595,806
General liabilities:
Due to parent and affiliates	538,452	537,990
Commercial paper	99,868	99,049
Payable under securities lending agreements	74,795	0
Deferred income tax liabilities, net	297,684	191,911
Other liabilities	776,075	816,304
Liabilities of discontinued operations	16,865	17,652
Separate account liabilities	27,866,779	27,037,765
Total liabilities	60,248,469	58,296,477
Commitments and contingencies (See Note 12)
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; 7,292,708 shares issued and outstanding	7,293	7,293
Additional paid-in capital	940,616	863,031
Accumulated other comprehensive income	420,930	235,875
Retained earnings	892,058	906,122
Total stockholder’s equity	2,260,897	2,012,321
Total liabilities and stockholder’s equity	$ 62,509,366	$ 60,308,798

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Fixed maturities, available-for-sale, amortized cost (in dollars)	$ 22,125,948	$ 21,672,727
Fixed maturities, held for trading, amortized cost (in dollars)	59,034	519,495
Mortgage loans on real estate, allowances (in dollars)	773	2,882
Short-term investments, available-for-sale, amortized cost (in dollars)	$ 823,071	$ 303,988
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	7,292,708	7,292,708
Common stock, number of shares outstanding	7,292,708	7,292,708

XML

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Premium income	$ 145,504	$ 146,100	$ 365,408	$ 377,845
Fee income	264,304	246,413	786,758	709,844
Other revenue	3,322	3,228	9,367	9,747
Net investment income	300,582	291,539	911,274	979,080
Realized investment gains (losses), net:
Total other-than-temporary gains (losses), net	(2,969)	0	(3,126)	(536)
Other realized investment gains (losses), net	16,830	33,374	27,297	107,193
Total realized investment gains (losses), net	13,861	33,374	24,171	106,657
Total revenues	727,573	720,654	2,096,978	2,183,173
Benefits and expenses:
Life and other policy benefits	161,017	172,855	498,300	529,985
Increase (decrease) in future policy benefits	12,704	7,540	(51,148)	(75,221)
Interest credited or paid to contractholders	160,040	154,248	471,531	455,018
Provision for policyholders’ share of losses on participating business	(1,033)	(106)	(1,097)	(525)
Dividends to policyholders	11,513	12,324	35,627	37,619
Total benefits	344,241	346,861	953,213	946,876
General insurance expenses	293,176	307,329	884,670	878,367
Amortization of DAC and VOBA	14,076	3,504	39,798	40,397
Interest expense	7,811	7,648	23,087	26,051
Total benefits and expenses	659,304	665,342	1,900,768	1,891,691
Income before income taxes	68,269	55,312	196,210	291,482
Income tax expense	21,688	15,295	64,973	79,043
Net income	$ 46,581	$ 40,017	$ 131,237	$ 212,439

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income		$ 46,581	$ 40,017	$ 131,237	$ 212,439
Components of other comprehensive income
Unrealized holding gains (losses), net, arising on available-for-sale fixed maturity investments		39,983	55,849	407,208	895,589
Unrealized holding gains (losses), net, arising on cash flow hedges		(23,111)	(7,805)	(48,311)	(3,307)
Reclassification adjustment for (gains) losses, net, realized in net income		(2,885)	(10,284)	(3,242)	(61,375)
Net unrealized gains (losses) related to investments		13,987	37,760	355,655	830,907
Future policy benefits, DAC and VOBA adjustments		(1,977)	(18,214)	(85,992)	(190,985)
Employee benefit plan adjustment		10,744	2,494	15,036	6,962
Other comprehensive income before income taxes		22,754	22,040	284,699	646,884
Income tax expense related to items of other comprehensive income		7,963	7,715	99,644	226,410
Other comprehensive income (loss)	[1]	14,791	14,325	185,055	420,474
Total comprehensive income		$ 61,372	$ 54,342	$ 316,292	$ 632,913

[1] Other comprehensive income includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(2,258) and $(959) for the three months ended September 30, 2017, and 2016, respectively and $(3,867) and $(5,326) for the nine months ended September 30, 2017, and 2016, respectively.

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Non-credit component of impaired gains (losses) on fixed maturities available-for-sale	$ (2,258)	$ (959)	$ (3,867)	$ (5,326)

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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
Proceeds from contributed capital		$ 0
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, 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
Beginning balance at Jun. 30, 2016						639,587
Increase (Decrease) in Stockholder's Equity
Net income		40,017
Other comprehensive income, net of income taxes	[1]	14,325
Ending balance at Sep. 30, 2016		2,391,593		7,233	842,979	653,912	887,469
Proceeds from contributed capital		76,429
Beginning balance at Dec. 31, 2016		2,012,321		7,293	863,031	235,875	906,122
Increase (Decrease) in Stockholder's Equity
Net income		131,237					131,237
Other comprehensive income, net of income taxes		185,055	[1]			185,055
Dividends		(145,301)					(145,301)
Capital contribution	[2]	76,429			76,429
Capital contribution - stock-based compensation		1,156			1,156
Ending balance at Sep. 30, 2017		2,260,897		7,293	940,616	420,930	892,058
Beginning balance at Jun. 30, 2017						406,139
Increase (Decrease) in Stockholder's Equity
Net income		46,581
Other comprehensive income, net of income taxes	[1]	14,791
Ending balance at Sep. 30, 2017		$ 2,260,897		$ 7,293	$ 940,616	$ 420,930	$ 892,058

[1] Other comprehensive income includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(2,258) and $(959) for the three months ended September 30, 2017, and 2016, respectively and $(3,867) and $(5,326) for the nine months ended September 30, 2017, and 2016, respectively.

[2] In May 2017, the Company received a capital contribution from its parent, GWL&A Financial, in the amount of $76,429. No additional shares of the Company were issued in relation to this contribution.

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net cash provided by operating activities	$ 711,382	$ 559,668
Proceeds from sales, maturities and redemptions of investments:
Fixed maturities, available-for-sale	3,920,591	4,829,009
Mortgage loans on real estate	322,326	310,664
Limited partnership interests, other corporation interests and other investments	6,759	9,386
Purchases of investments:
Fixed maturities, available-for-sale	(4,313,849)	(4,138,915)
Mortgage loans on real estate	(689,122)	(626,431)
Limited partnership interests, other corporation interests and other investments	(17,697)	(5,491)
Net change in short-term investments	(517,840)	(1,988,191)
Net change in policy loans	(9,677)	5,980
Purchases of furniture, equipment, and software	(30,867)	(33,405)
Net cash used in investing activities	(1,329,376)	(1,637,394)
Cash flows from financing activities:
Contract deposits	2,251,508	2,756,047
Contract withdrawals	(1,565,225)	(1,500,963)
Net change in due to/from parent and affiliates	(9,760)	(19,924)
Dividends paid	(145,301)	(125,691)
Capital contribution	76,429	0
Payments for and interest paid on financing element derivatives, net	(3,290)	(5,281)
Contingent consideration	0	(14,233)
Net change in commercial paper borrowings	819	6,600
Net change in book overdrafts	15,659	121
Employee taxes paid for withheld shares	(671)	(489)
Income tax benefit on share-based compensation	0	468
Net cash provided by financing activities	620,168	1,096,655
Net increase in cash and cash equivalents	2,174	18,929
Cash and cash equivalents, beginning of year	18,321	34,362
Cash and cash equivalents, end of period	20,495	53,291
Net cash received (paid) during the year for:
Income taxes	(17,449)	(24,118)
Interest	(16,447)	(21,685)
Non-cash investing and financing transactions during the years:
Share-based compensation expense	1,156	1,637
Fair value of assets acquired in settlement of fixed maturity investments	$ 9,323	$ 0

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Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2017

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 formed in 1998.  GWL&A Financial is a direct wholly-owned subsidiary of Great-West Lifeco U.S. LLC (“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, 2016, 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, 2017, 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, 2016.

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, 2017, 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, 2017, 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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Application of Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Application of Recent Accounting Pronouncements

Application of Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The new guidance is effective for the fiscal years beginning after December 15, 2016, including interim periods, a retrospective or a prospective transition approach depending upon the type of change. The new guidance changed several aspects of the accounting for share-based payment award transactions, including: (i) income tax consequences when awards vest or are settled; (ii) classification of awards as either equity or liabilities due to statutory tax withholding requirements; and (iii) classification on the statement of cash flows. The adoption of this ASU did not have a material effect on the Company’s condensed consolidated financial statements.

Future adoption of new accounting pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S. GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of financial services insurance, leases, financial instruments and guarantees. The core principle of the model requires that an entity recognizes 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 Company’s implementation efforts are primarily focused on customer contracts with fee income earned from assets under management, assets under administration, shareholder servicing, administration and recordkeeping services, and investment advisory services as well as the evaluation of certain incremental costs to obtain a customer contract. The Company anticipates that the adoption of this update will primarily impact the accounting for certain contract costs and contract fulfillment costs, which are currently expensed as incurred. Under the new standard, these costs will be deferred and recognized as expenses over the expected customer life. While the Company continues to make progress in its assessment and implementation of this update, it has not yet finalized a range of the potential quantitative impact on its condensed consolidated financial statements or whether the Company will adopt on a prospective or retrospective basis.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted for the instrument-specific credit risk provision. 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, eliminating certain disclosure requirements related to financial instruments measured at amortized cost and adding disclosures related to the measurement categories of financial assets and financial liabilities, 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 the fair value option for financial instruments, and clarifying 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 Company is currently evaluating the impact of this update on its condensed consolidated financial statements and anticipates the primary impact to be the requirement for equity investments such as limited partnership interests, that are currently accounted for under the cost method, to be measured at fair value with changes in the fair value recognized in net income.

In February 2016, the FASB issued ASU 2016-02, Leases, effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual period. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet with lease terms of more than 12 months and also disclose certain qualitative and quantitative information about leasing arrangements. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts and performing a completeness assessment over the lease population. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments, effective for fiscal years and interim periods within those beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. This update 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 Company is currently evaluating the impact of this update on its condensed 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), effective for fiscal years and interim periods within those beginning after December 15, 2017. Early adoption is permitted. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (a consensus of the Emerging Issues Task Force), effective for fiscal years and interim periods within those beginning after December 15, 2017. Early adoption is permitted. This update requires organizations to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, effective for annual or any interim goodwill impairment tests after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The update eliminates Step 2 from the goodwill impairment test and will require management to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.  Any amount by which the carrying amount exceeds the reporting unit’s fair value (not to exceed the goodwill allocated to that reporting unit) is recognized as an impairment charge.  The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, effective for annual reporting periods beginning on or after December 15, 2017, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. This update requires organizations to disaggregate the service cost component from the other components of net benefit costs in the income statement and present it with other current compensation costs for the related employees while providing guidance for capitalization eligibility for service costs. The Company is currently evaluating the impact of this update in its condensed consolidated financial statements.

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Dividends

9 Months Ended

Sep. 30, 2017

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, 2017, and 2016, the Company paid dividends of $145,301 and $125,691, respectively, to its parent, GWL&A Financial.

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Summary of Investments

9 Months Ended

Sep. 30, 2017

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, 2017
	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	$	1,502,617	$	49,176	$	8,333	$	1,543,460	$	—
Obligations of U.S. states and their subdivisions	1,884,136		228,301		1,619		2,110,818		—
Corporate debt securities (2)	14,991,367		622,399		118,566		15,495,200		(1,088		)
Asset-backed securities	1,578,590		110,333		12,173		1,676,750		(65,696		)
Residential mortgage-backed securities	68,946		2,618		645		70,919		(141		)
Commercial mortgage-backed securities	1,375,325		22,547		10,920		1,386,952		—
Collateralized debt obligations	724,967		3,832		29		728,770		—
Total fixed maturities	$	22,125,948	$	1,039,206	$	152,285	$	23,012,869	$	(66,925	)

⁽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 $115,037 and estimated fair value of $111,141.

	December 31, 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	$	3,022,279	$	47,791	$	34,958	$	3,035,112	$	—
Obligations of U.S. states and their subdivisions	1,890,568		214,411		6,317		2,098,662		—
Corporate debt securities (2)	13,811,597		477,316		309,164		13,979,749		(1,488		)
Asset-backed securities	1,226,493		104,274		18,388		1,312,379		(72,464		)
Residential mortgage-backed securities	138,292		3,867		1,167		140,992		23
Commercial mortgage-backed securities	1,222,257		23,207		20,182		1,225,282		—
Collateralized debt obligations	361,241		339		53		361,527		—
Total fixed maturities	$	21,672,727	$	871,205	$	390,229	$	22,153,703	$	(73,929	)

⁽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 $113,239.

See Note 7 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, 2017
	Amortized cost		Estimated fair value
Maturing in one year or less	$	796,697	$	814,539
Maturing after one year through five years	3,998,273		4,166,545
Maturing after five years through ten years	7,432,248		7,650,580
Maturing after ten years	5,000,632		5,356,030
Mortgage-backed and asset-backed securities	4,898,098		5,025,175
Total fixed maturities	$	22,125,948	$	23,012,869

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,
	2017		2016		2017		2016
Proceeds from sales	$	339,051	$	421,245	$	2,810,599	$	3,777,445
Gross realized gains from sales	8,512		8,487		29,433		55,154
Gross realized losses from sales	2,993		24		24,330		170

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

	September 30, 2017			December 31, 2016
Principal	$	3,936,617		$	3,558,863
Unamortized premium (discount) and fees, net	4,244			5,541
Foreign exchange translation	3,000			(2,696		)
Mortgage provision allowance	(773		)	(2,882		)
Total mortgage loans	$	3,943,088		$	3,558,826

The following table summarizes the recorded investment of the mortgage loan portfolio by risk assessment category as of September 30, 2017, and December 31, 2016, respectively: 

	September 30, 2017		December 31, 2016
Performing	$	3,943,861	$	3,560,243
Non-performing	—		1,465
Total	$	3,943,861	$	3,561,708

The following table summarizes activity in the mortgage provision allowance:

	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	Commercial mortgages			Commercial mortgages
Beginning balance	$	2,882		$	2,890
Provision increases	157			536
Charge-off	(663		)	—
Recovery	(30		)	—
Provision decreases	(1,573		)	(544		)
Ending balance	$	773		$	2,882
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	$	—		$	536
Collectively evaluated for impairment	773			2,346
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$	3,943,861		$	3,561,708
Individually evaluated for impairment	—			1,465
Collectively evaluated for impairment	3,943,861			3,560,243

Limited partnership and other corporationinterests — At September 30, 2017 and December 31, 2016, the Company had $45,117 and $34,895, 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 $42,734 and $32,444 at September 30, 2017, and December 31, 2016, respectively.

Securities lending — Securities with a cost or amortized cost of $105,952 and estimated fair values of $103,921 were on loan under the program at September 30, 2017. There were no securities on loan at December 31, 2016.  The Company received cash of $74,795 and securities with a fair value of $32,393 as collateral at September 30, 2017. 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 cash collateral liability under the securities lending program is $74,795, and class of securities loaned consists entirely of Corporate debt securities.

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, 2017
	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	$	631,467	$	8,156	$	11,037	$	177	$	642,504	$	8,333
Obligations of U.S. states and their subdivisions	43,583		726		18,093		893		61,676		1,619
Corporate debt securities	2,401,845		35,750		1,360,880		82,816		3,762,725		118,566
Asset-backed securities	464,858		2,246		224,740		9,927		689,598		12,173
Residential mortgage-backed securities	—		—		12,383		645		12,383		645
Commercial mortgage-backed securities	488,610		5,851		102,235		5,069		590,845		10,920
Collateralized debt obligations	77,015		29		—		—		77,015		29
Total fixed maturities	$	4,107,378	$	52,758	$	1,729,368	$	99,527	$	5,836,746	$	152,285
Total number of securities in an unrealized loss position			397				169				566

	December 31, 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	$	2,006,588	$	34,752	$	10,526	$	206	$	2,017,114	$	34,958
Obligations of U.S. states and their subdivisions	216,154		5,922		10,498		395		226,652		6,317
Corporate debt securities	4,119,630		170,453		860,153		138,711		4,979,783		309,164
Asset-backed securities	316,065		6,971		230,331		11,417		546,396		18,388
Residential mortgage-backed securities	16,962		102		14,297		1,065		31,259		1,167
Commercial mortgage-backed securities	592,508		17,535		26,068		2,647		618,576		20,182
Collateralized debt obligations	160,612		53		—		—		160,612		53
Total fixed maturities	$	7,428,519	$	235,788	$	1,151,873	$	154,441	$	8,580,392	$	390,229
Total number of securities in an unrealized loss position			610				128				738

Fixed maturity investments — Total unrealized losses and OTTI decreased by $237,944, or 61%, from December 31, 2016, to September 30, 2017. The majority, or $183,030, 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, 2017, compared to December 31, 2016, resulting in generally higher valuations of these fixed maturity securities.

Total unrealized losses greater than twelve months decreased by $54,914 from December 31, 2016, to September 30, 2017.  Corporate debt securities account for 83%, or $82,816, of the unrealized losses and OTTI greater than twelve months at September 30, 2017.  Non-investment grade corporate debt securities account for $5,693 of the unrealized losses and OTTI greater than twelve months. Management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings.

Asset-backed securities account for 10% of the unrealized losses and OTTI greater than twelve months at September 30, 2017.  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,
	2017			2016			2017			2016
Beginning balance	$	77,411		$	94,687		$	83,665		$	102,343
Reductions due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(5,273		)	(4,405		)	(11,527		)	(12,061		)
Ending balance	$	72,138		$	90,282		$	72,138		$	90,282

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2017

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 $81,632 and $38,324 as of September 30, 2017, and December 31, 2016, respectively.  The Company had pledged collateral related to these derivatives of $16,171 and zero as of September 30, 2017, and December 31, 2016, respectively, in the normal course of business.  If the credit-risk-related contingent features were triggered on September 30, 2017, the fair value of assets that could be required to settle the derivatives in a net liability position was $65,461.

At September 30, 2017, and December 31, 2016, the Company had pledged $16,171 and zero of unrestricted cash collateral to counterparties in the normal course of business, while other counterparties had pledged $25,353 and $103,214 of unrestricted cash collateral to the Company to satisfy collateral netting agreements, respectively.

At September 30, 2017, the Company estimated $10,544 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.

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.

Foreign currency contracts

Cross-currency swaps and foreign currency forwards 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. The Company uses foreign currency forwards to reduce the risk of foreign currency exchange rate changes on proceeds received on sales of foreign denominated debt instruments; however, hedge accounting is not 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, 2017
			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	$	29,482		$	29,482	$	—
Cross-currency swaps	755,890		(4,310		)	30,874		35,184
Total cash flow hedges	1,175,690		25,172			60,356		35,184
Total derivatives designated as hedges	1,175,690		25,172			60,356		35,184
Derivatives not designated as hedges:
Interest rate swaps	507,100		(2,477		)	10,147		12,624
Futures on equity indices	29,674		—			—		—
Interest rate futures	74,200		—			—		—
Interest rate swaptions	162,423		156			156		—
Other forward contracts	2,954,200		(3,151		)	925		4,076
Cross-currency swaps	612,733		(3,863		)	27,193		31,056
Total derivatives not designated as hedges	4,340,330		(9,335		)	38,421		47,756
Total derivative financial instruments	$	5,516,020	$	15,837		$	98,777	$	82,940

⁽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, 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	$	33,390		$	33,390	$	—
Cross-currency swaps	614,208		45,347			53,641		8,294
Total cash flow hedges	1,034,008		78,737			87,031		8,294
Total derivatives designated as hedges	1,034,008		78,737			87,031		8,294
Derivatives not designated as hedges:
Interest rate swaps	468,100		(4,358		)	8,982		13,340
Futures on equity indices	34,422		—			—		—
Interest rate futures	81,500		—			—		—
Interest rate swaptions	165,534		354			354		—
Cross-currency swaps	612,733		33,371			50,018		16,647
Total derivatives not designated as hedges	1,362,289		29,367			59,354		29,987
Total derivative financial instruments	$	2,396,297	$	108,104		$	146,385	$	38,281

⁽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, 2017, was $908,500, $1,302,507, $113,004, $162,408, and $2,409,855 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively. The average notional outstanding during the year ended December 31, 2016, was $784,900, $1,141,967, $145,658, $156,632, and $2,230,167 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 and comprehensive income reported by cash flow hedges and derivatives not designated as 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,
	2017			2016			2017			2016
Cash flow hedges:
Interest rate swaps	$	115		$	(401	)	$	1,175		$	1,335		(A)
Interest rate swaps	(653		)	(4,284		)	(690		)	(1,092		)	(B)
Cross-currency swaps	(22,573		)	(3,120		)	(108		)	1,576			(A)
Total cash flow hedges	$	(23,111	)	$	(7,805	)	$	377		$	1,819

(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,
	2017			2016			2017			2016
Cash flow hedges:
Interest rate swaps	$	611		$	4,098		$	3,581		$	4,166		(A)
Interest rate swaps	(5,003		)	(29,017		)	(2,357		)	(1,675		)	(B)
Cross-currency swaps	(43,919		)	21,612			21			3,777			(A)
Total cash flow hedges	$	(48,311	)	$	(3,307	)	$	1,245		$	6,268

(A) Net investment income.

(B) Interest expense.

	Gain (loss) on derivatives recognized in net income
	Three Months Ended September 30,
	2017				2016
Derivatives not designated as hedging instruments:
Futures on equity indices	$	(583	)	(A)	$	510		(A)
Futures on equity indices	(1,070		)	(B)	(2,081		)	(B)
Interest rate swaps	492			(A)	418			(A)
Interest rate futures	(40		)	(A)	134			(A)
Interest rate futures	18			(B)	(183		)	(B)
Interest rate swaptions	(6		)	(A)	23			(A)
Interest rate swaptions	(73		)	(B)	(39		)	(B)
Other forward contracts	(571		)	(A)	(8,286		)	(A)
Other forward contracts	7,264			(B)	19,413			(B)
Cross-currency swaps	(16,046		)	(A)	1,872			(A)
Total derivatives not designated as hedging instruments	$	(10,615	)		$	11,781

(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,
	2017				2016
Derivatives not designated as hedging instruments:
Futures on equity indices	$	(917	)	(A)	$	103		(A)
Futures on equity indices	(3,890		)	(B)	(5,358		)	(B)
Interest rate swaps	3,919			(A)	19,727			(A)
Interest rate futures	62			(A)	(77		)	(A)
Interest rate futures	(183		)	(B)	(249		)	(B)
Interest rate swaptions	(37		)	(A)	96			(A)
Interest rate swaptions	(224		)	(B)	(256		)	(B)
Other forward contracts	(3,151		)	(A)	7,268			(A)
Other forward contracts	20,383			(B)	31,509			(B)
Cross-currency swaps	(38,297		)	(A)	62,147			(A)
Total derivatives not designated as hedging instruments	$	(22,335	)		$	114,910

(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 $10,221 and $5,712 at September 30, 2017, and December 31, 2016, respectively. The changes in fair value of the GLWB were $(626) and $(590) for the three months ended September 30, 2017, and 2016, respectively, and $(4,509) and $(20,020) for the nine months ended September 30, 2017, and 2016, respectively.

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Summary of Offsetting Assets and Liabilities

9 Months Ended

Sep. 30, 2017

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, 2017
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial						Net
Financial instruments (assets):	recognized assets (1)		instruments			Cash collateral			fair value
Derivative instruments (2)	$	72,217	$	(56,224	)	$	(14,263	)	$	1,730
Short-term reverse repurchase agreements (3)	20,900		(20,900		)	—			—
Total financial instruments (assets)	93,117		(77,124		)	(14,263		)	1,730

	September 30, 2017
		Gross fair value not offset
		in balance sheets
	Gross fair value of	Financial				Net
Financial instruments (liabilities):	recognized liabilities (1)	instruments		Cash collateral		fair value
Derivative instruments (4)	70,720	(56,224	)	(13,006	)	1,490

⁽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, 2016
			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)	$	119,862	$	(26,254	)	$	92,756	$	852
Derivative instruments (liabilities) (3)	26,254		(26,254		)	—		—

⁽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, 2017

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, 2017
	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	$	—	$	1,543,460	$	—	$	1,543,460
Obligations of U.S. states and their subdivisions	—		2,110,818		—		2,110,818
Corporate debt securities	—		15,485,120		10,080		15,495,200
Asset-backed securities	—		1,676,750		—		1,676,750
Residential mortgage-backed securities	—		70,919		—		70,919
Commercial mortgage-backed securities	—		1,386,952		—		1,386,952
Collateralized debt obligations	—		728,770		—		728,770
Total fixed maturities available-for-sale	—		23,002,789		10,080		23,012,869
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		20,291		—		20,291
Corporate debt securities	—		38,956		—		38,956
Commercial mortgage-backed securities	—		1,081		—		1,081
Total fixed maturities held-for-trading	—		60,328		—		60,328
Short-term investments	320,398		502,673		—		823,071
Collateral under securities lending agreements	1,870		72,925		—		74,795
Collateral under derivative counterparty collateral agreements	41,524		—		—		41,524
Derivative instruments designated as hedges:
Interest rate swaps	—		29,482		—		29,482
Cross-currency swaps	—		30,874		—		30,874
Derivative instruments not designated as hedges:
Interest rate swaps	—		10,147		—		10,147
Interest rate swaptions	—		156		—		156
Other forward contracts	—		925		—		925
Cross-currency swaps	—		27,193		—		27,193
Total derivative instruments	—		98,777		—		98,777
Separate account assets (1)	16,255,644		11,213,991		—		27,866,779
Total assets	$	16,619,436	$	34,951,483	$	10,080	$	51,978,143
Liabilities
Derivative instruments designated as hedges:
Cross-currency swaps	$	—	$	35,184	$	—	$	35,184
Derivative instruments not designated as hedges:
Interest rate swaps	—		12,624		—		12,624
Other forward contracts	—		4,076		—		4,076
Cross-currency swaps	—		31,056		—		31,056
Total derivative instruments	—		82,940		—		82,940
Embedded derivatives - GLWB	—		—		10,221		10,221
Separate account liabilities (2)	18		521,723		—		521,741
Total liabilities	$	18	$	604,663	$	10,221	$	614,902

⁽¹⁾ Included in the total fair value amount are $397 million of investments as of September 30, 2017 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, 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	$	—	$	3,035,112	$	—	$	3,035,112
Obligations of U.S. states and their subdivisions	—		2,098,662		—		2,098,662
Corporate debt securities	—		13,968,110		11,639		13,979,749
Asset-backed securities	—		1,312,379		—		1,312,379
Residential mortgage-backed securities	—		140,992		—		140,992
Commercial mortgage-backed securities	—		1,225,282		—		1,225,282
Collateralized debt obligations	—		361,527		—		361,527
Total fixed maturities available-for-sale	—		22,142,064		11,639		22,153,703
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		458,067		—		458,067
Corporate debt securities	—		55,591		—		55,591
Commercial mortgage-backed securities	—		1,080		—		1,080
Total fixed maturities held-for-trading	—		514,738		—		514,738
Short-term investments	267,851		36,137		—		303,988
Collateral under derivative counterparty collateral agreements	103,214		—		—		103,214
Derivative instruments designated as hedges:
Interest rate swaps	—		33,390		—		33,390
Cross-currency swaps	—		53,641		—		53,641
Derivative instruments not designated as hedges:
Interest rate swaps	—		8,982		—		8,982
Interest rate swaptions	—		354		—		354
Cross-currency swaps	—		50,018		—		50,018
Total derivative instruments	—		146,385		—		146,385
Separate account assets (1)	15,407,992		11,199,924		—		27,037,765
Total assets	$	15,779,057	$	34,039,248	$	11,639	$	50,259,793
Liabilities
Collateral under derivative counterparty collateral agreements	$	103,214	$	—	$	—	$	103,214
Derivative instruments designated as hedges:
Cross-currency swaps	—		8,294		—		8,294
Derivative instruments not designated as hedges:
Interest rate swaps	—		13,340		—		13,340
Cross-currency swaps	—		16,647		—		16,647
Total derivative instruments	—		38,281		—		38,281
Embedded derivatives - GLWB	—		—		5,712		5,712
Separate account liabilities (2)	55		336,468		—		336,523
Total liabilities	$	103,269	$	374,749	$	5,712	$	483,730

⁽¹⁾ Included in the total fair value amount are $430 million of investments as of December 31, 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.

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 evaluated prices from independent pricing services.  In cases where these 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 flow 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 and collateral under securities lending agreements is a reasonable estimate of fair value due to their short-term nature and high credit quality of the issuers.

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, 2017
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, July 1, 2017	$	10,703		$	9,595
Realized and unrealized gains (losses) included in:
Net income (loss)	—			(626		)
Other comprehensive income (loss)	166			—
Settlements	(432		)	—
Transfers out of Level 3 (1)	(357		)	—
Balances, September 30, 2017	$	10,080		$	10,221
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, 2017	$	—		$	(626	)

⁽¹⁾ Transfers out of Level 3 are due primarily to increased observability of inputs in valuation methodologies as evidenced by corroboration of market prices with multiple pricing vendors.

	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
	Nine Months Ended September 30, 2017
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, January 1, 2017	$	11,639		$	5,712
Realized and unrealized gains (losses) included in:
Net income (loss)	—			(4,509		)
Other comprehensive income (loss)	83			—
Settlements	(1,275		)	—
Transfers out of Level 3 (1)	(367		)	—
Balances, September 30, 2017	$	10,080		$	10,221
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, 2017	$	—		$	(4,509	)

⁽¹⁾ Transfers out of Level 3 are due primarily to increased observability of inputs in valuation methodologies as evidenced by corroboration of market prices with multiple pricing vendors.

	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.

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

			Range
	Valuation Technique	Unobservable Input	September 30, 2017	December 31, 2016
Embedded derivatives - GLWB	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%	15% - 30%
		Swap curve	1.33% - 2.54%	0.75% - 3.00%
		Mortality rate	Based on the Annuity 2000 Mortality Table	Based on the Annuity 2000 Mortality Table
		Base Lapse rate	1% - 15%	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, 2017				December 31, 2016
	Carrying		Estimated		Carrying		Estimated
	amount		fair value		amount		fair value
Assets
Mortgage loans on real estate	$	3,943,088	$	4,020,555	$	3,558,826	$	3,574,240
Policy loans	4,073,511		4,073,511		4,019,648		4,019,648
Limited partnership interests	40,433		40,413		29,345		29,822
Other investments	12,631		43,002		14,382		44,687
Liabilities
Annuity contract benefits without life contingencies	$	12,669,339	$	12,641,064	$	12,291,378	$	12,129,631
Policyholders’ funds	245,007		245,007		285,554		285,554
Commercial paper	99,868		99,868		99,049		99,049
Notes payable	534,538		565,903		531,092		495,004

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 net asset value, determined using the partnership financial statement reported capital account adjusted for other relevant information which may impact the exit value of the investments, is used as a practical expedient to estimate fair value. 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. 

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, 2017

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, 2017
	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, 2017	$	550,776		$	50,132		$	(113,256	)	$	(81,513	)	$	406,139
Other comprehensive income (loss) before reclassifications	25,989			(15,022		)	(1,285		)	5,559			15,241
Amounts reclassified from AOCI	(1,630		)	(245		)	—			1,425			(450		)
Net current period other comprehensive income (loss)	24,359			(15,267		)	(1,285		)	6,984			14,791
Balances, September 30, 2017	$	575,135		$	34,865		$	(114,541	)	$	(74,529	)	$	420,930

	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

	Nine Months Ended September 30, 2017
	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, 2017	$	311,748		$	67,076		$	(58,646	)	$	(84,303	)	$	235,875
Other comprehensive income (loss) before reclassifications	264,685			(31,402		)	(55,895		)	5,559			182,947
Amounts reclassified from AOCI	(1,298		)	(809		)	—			4,215			2,108
Net current period other comprehensive income (loss)	263,387			(32,211		)	(55,895		)	9,774			185,055
Balances, September 30, 2017	$	575,135		$	34,865		$	(114,541	)	$	(74,529	)	$	420,930

	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

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

	Three Months Ended September 30, 2017
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	39,983		$	(13,994	)	$	25,989
Unrealized holding gains (losses), net, arising on cash flow hedges	(23,111		)	8,089			(15,022		)
Reclassification adjustment for (gains) losses, net, realized in net income	(2,885		)	1,010			(1,875		)
Net unrealized gains (losses) related to investments	13,987			(4,895		)	9,092
Future policy benefits, DAC and VOBA adjustments	(1,977		)	692			(1,285		)
Net unrealized gains (losses)	12,010			(4,203		)	7,807
Employee benefit plan adjustment	10,744			(3,760		)	6,984
Other comprehensive income (loss)	$	22,754		$	(7,963	)	$	14,791

	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

	Nine Months Ended September 30, 2017
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	407,208		$	(142,523	)	$	264,685
Unrealized holding gains (losses), net, arising on cash flow hedges	(48,311		)	16,909			(31,402		)
Reclassification adjustment for (gains) losses, net, realized in net income	(3,242		)	1,135			(2,107		)
Net unrealized gains (losses) related to investments	355,655			(124,479		)	231,176
Future policy benefits, DAC and VOBA adjustments	(85,992		)	30,097			(55,895		)
Net unrealized gains (losses)	269,663			(94,382		)	175,281
Employee benefit plan adjustment	15,036			(5,262		)	9,774
Other comprehensive income (loss)	$	284,699		$	(99,644	)	$	185,055

	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

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

	Three Months Ended September 30,
	2017				2016
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	$	(2,508	)		$	(8,465	)		Other realized investment (gains) losses, net
	(2,508		)		(8,465		)		Total before tax
	(878		)		(2,962		)		Tax expense or benefit
	$	(1,630	)		$	(5,503	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(1,067	)		$	(2,911	)		Net investment income
	690				1,092				Interest Expense
	(377		)		(1,819		)		Total before tax
	(132		)		(637		)		Tax expense or benefit
	$	(245	)		$	(1,182	)		Net of tax
Amortization of employee benefit plan items
Prior service (benefits)	$	(109	)	(1)	$	(150	)	(1)
Actuarial losses	2,302			(1)	2,644			(1)
	2,193				2,494				Total before tax
	768				873				Tax expense or benefit
	$	1,425			$	1,621			Net of tax
Total reclassification	$	(450	)		$	(5,064	)		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 9 for additional details).

	Nine Months Ended September 30,
	2017				2016
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	$	(1,997	)		$	(55,107	)		Other realized investment (gains) losses, net
	(1,997		)		(55,107		)		Total before tax
	(699		)		(19,287		)		Tax expense or benefit
	$	(1,298	)		$	(35,820	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(3,602	)		$	(7,943	)		Net investment income
	2,357				1,675				Interest Expense
	(1,245		)		(6,268		)		Total before tax
	(436		)		(2,194		)		Tax expense or benefit
	$	(809	)		$	(4,074	)		Net of tax
Amortization of employee benefit plan items
Prior service costs (benefits)	$	37		(1)	$	(452	)	(1)
Actuarial losses	6,448			(1)	7,414			(1)
	6,485				6,962				Total before tax
	2,270				2,437				Tax expense or benefit
	$	4,215			$	4,525			Net of tax
Total reclassification	$	2,108			$	(35,369	)		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 9 for additional details).

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2017

Retirement Benefits [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
	2017			2016			2017			2016			2017			2016			2017			2016
Components of net periodic cost (benefit):
Service cost	$	2,170		$	3,417		$	378		$	349		$	(4	)	$	73		$	2,544		$	3,839
Interest cost	6,114			6,384			192			184			405			444			6,711			7,012
Expected return on plan assets	(4,980		)	(6,237		)	—			—			—			—			(4,980		)	(6,237		)
Amortization of unrecognized prior service costs (benefits)	—			—			(235		)	(275		)	126			125			(109		)	(150		)
Amortization of losses (gains) from earlier periods	2,241			2,726			75			(67		)	(14		)	(15		)	2,302			2,644
Net periodic cost (benefit)	$	5,545		$	6,290		$	410		$	191		$	513		$	627		$	6,468		$	7,108

	Nine Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan						Total
	2017			2016			2017			2016			2017			2016			2017			2016
Components of net periodic cost (benefit):
Service cost	$	1,436		$	6,087		$	1,092		$	935		$	(12	)	$	219		$	2,516		$	7,241
Interest cost	18,356			18,948			568			534			1,215			1,332			20,139			20,814
Expected return on plan assets	(15,216		)	(18,793		)	—			—			—			—			(15,216		)	(18,793		)
Amortization of unrecognized prior service costs (benefits)	—			—			(339		)	(827		)	376			375			37			(452		)
Amortization of losses (gains) from earlier periods	6,639			7,695			(151		)	(237		)	(40		)	(44		)	6,448			7,414
Net periodic cost (benefit)	$	11,215		$	13,937		$	1,170		$	405		$	1,539		$	1,882		$	13,924		$	16,224

During the 3rd quarter of 2017, the Company approved an amendment to the Plan freezing all benefit accruals for pension-eligible participants as of December 31, 2017.  The Company also approved an amendment to provide pension-eligible employees with full credit for their anniversary year of services that began in 2017, even if the participants had not completed 1,000 hours of service as of December 31, 2017.  The impact of the Plan freeze was reflected on September 25, 2017, and in accordance with ASC 715 Compensation - Retirement Benefits, resulted in a curtailment gain in the amount of $17,244. Additionally, as a result of the amendment to provide an additional year of service credit, prior service cost in the amount of $1,852 was recorded in other comprehensive income as of September 30, 2017.  Under a curtailment due to a plan freeze, any unrecognized prior service cost included in other comprehensive income associated with the employees affected by the pension plan freeze must be fully recognized in benefit cost in determining the net gain or loss to be recognized for the curtailment.  Additionally, the curtailment gain recognized in the income statement is offset by accelerating, in an equal amount, the recognition of any actuarial gain or loss in other comprehensive income. $15,392 of actuarial loss was recognized from other comprehensive income to offset the net curtailment gain.  As a result, the net impact to the income statement was zero.

The Company expects to make payments of approximately $708 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, 2017.  The Company expects to make contributions of zero to its Defined Benefit Pension Plan during the year ended December 31, 2017.  A December 31 measurement date is used for the employee benefit plans.

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Payments to the Post-Retirement Medical Plan	155	212	531	603
Payments to the Supplemental Executive Retirement Plan	834	834	2,502	2,502

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Income Taxes

9 Months Ended

Sep. 30, 2017

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,
	2017			2016			2017		2016
Current expense (benefit)	$	27,585		$	(1,399	)	$	58,845	$	41,725
Deferred (benefit) expense	(5,897		)	16,694			6,128		37,318
Total income tax provision	$	21,688		$	15,295		$	64,973	$	79,043

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,
	2017		2016
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(3.9	)%	(2.7	)%
Tax credits	(0.3	)%	(7.3	)%
State income taxes, net of federal benefit	2.8	%	2.5	%
Other, net	(0.5	)%	(0.4	)%
Effective income tax rate	33.1	%	27.1	%

The Company recorded an increase of $4,694 and a decrease of $5,824 in unrecognized tax benefits during the nine months ended September 30, 2017, and 2016, respectively. The Company anticipates additional increases to its unrecognized tax benefits of $6,000 to $7,000 in the next twelve months. The Company expects that the majority of the increase in its unrecognized tax benefits will not impact the effective tax rate.

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 2013 and prior.  Tax years 2014 through 2016 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, 2017

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, and Other. 

Individual Markets

The Individual Markets reporting and operating segment distributes life insurance and individual annuity 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 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”) (“the GWSC operating segment”), 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.  The Company evaluates performance of its reportable segments based on their profitability from operations after income taxes. Inter-segment 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, 2017
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	125,757	$	764	$	18,983		$	145,504
Fee income	27,780		234,957		1,567			264,304
Other revenue	—		3,322		—			3,322
Net investment income	185,447		103,334		11,801			300,582
Realized investment gains (losses), net	2,389		11,472		—			13,861
Total revenues	341,373		353,849		32,351			727,573
Benefits and expenses:
Policyholder benefits	272,396		53,736		18,109			344,241
Operating expenses	41,332		255,623		18,108			315,063
Total benefits and expenses	313,728		309,359		36,217			659,304
Income (loss) before income taxes	27,645		44,490		(3,866		)	68,269
Income tax expense (benefit)	9,398		13,641		(1,351		)	21,688
Net income (loss)	$	18,247	$	30,849	$	(2,515	)	$	46,581

	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

	Nine Months Ended September 30, 2017
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	302,017	$	1,908	$	61,483		$	365,408
Fee income	82,960		698,850		4,948			786,758
Other revenue	—		9,367		—			9,367
Net investment income	562,440		313,710		35,124			911,274
Realized investment gains (losses), net	7,010		17,168		(7		)	24,171
Total revenues	954,427		1,041,003		101,548			2,096,978
Benefits and expenses:
Policyholder benefits	740,655		152,067		60,491			953,213
Operating expenses	127,137		760,564		59,854			947,555
Total benefits and expenses	867,792		912,631		120,345			1,900,768
Income (loss) before income taxes	86,635		128,372		(18,797		)	196,210
Income tax expense (benefit)	29,579		42,063		(6,669		)	64,973
Net income (loss)	$	57,056	$	86,309	$	(12,128	)	$	131,237

	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 before income taxes	163,197		119,573		8,712		291,482
Income tax expense	55,183		20,579		3,281		79,043
Net income	$	108,014	$	98,994	$	5,431	$	212,439

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

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, 2017, and December 31, 2016.  At September 30, 2017, and December 31, 2016, 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 $1,141,440 and renews annually until it expires on July 3, 2027.  The second letter of credit is for $70,000 and renews annually unless the Company terminates it under the provisions specified in the agreement.  At September 30, 2017, and December 31, 2016, 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, 2017, and December 31, 2016, 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, 2017, and December 31, 2016, were as follows:

	September 30, 2017		December 31, 2016
Due in less than one year	$	464,957	$	438,458
Due within one to three years	2,239		—
Total	$	467,196	$	438,458

Included in the total unfunded commitments at September 30, 2017, and December 31, 2016, is $76,617 and $93,440, respectively, related to cost basis limited partnership interests, 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, 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, 2017

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, 2017

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, 2016, 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, 2017, 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, 2016.

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, 2017, 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, 2017, 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.

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Application of Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements

Application of Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The new guidance is effective for the fiscal years beginning after December 15, 2016, including interim periods, a retrospective or a prospective transition approach depending upon the type of change. The new guidance changed several aspects of the accounting for share-based payment award transactions, including: (i) income tax consequences when awards vest or are settled; (ii) classification of awards as either equity or liabilities due to statutory tax withholding requirements; and (iii) classification on the statement of cash flows. The adoption of this ASU did not have a material effect on the Company’s condensed consolidated financial statements.

Future adoption of new accounting pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S. GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of financial services insurance, leases, financial instruments and guarantees. The core principle of the model requires that an entity recognizes 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 Company’s implementation efforts are primarily focused on customer contracts with fee income earned from assets under management, assets under administration, shareholder servicing, administration and recordkeeping services, and investment advisory services as well as the evaluation of certain incremental costs to obtain a customer contract. The Company anticipates that the adoption of this update will primarily impact the accounting for certain contract costs and contract fulfillment costs, which are currently expensed as incurred. Under the new standard, these costs will be deferred and recognized as expenses over the expected customer life. While the Company continues to make progress in its assessment and implementation of this update, it has not yet finalized a range of the potential quantitative impact on its condensed consolidated financial statements or whether the Company will adopt on a prospective or retrospective basis.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted for the instrument-specific credit risk provision. 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, eliminating certain disclosure requirements related to financial instruments measured at amortized cost and adding disclosures related to the measurement categories of financial assets and financial liabilities, 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 the fair value option for financial instruments, and clarifying 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 Company is currently evaluating the impact of this update on its condensed consolidated financial statements and anticipates the primary impact to be the requirement for equity investments such as limited partnership interests, that are currently accounted for under the cost method, to be measured at fair value with changes in the fair value recognized in net income.

In February 2016, the FASB issued ASU 2016-02, Leases, effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual period. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet with lease terms of more than 12 months and also disclose certain qualitative and quantitative information about leasing arrangements. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts and performing a completeness assessment over the lease population. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments, effective for fiscal years and interim periods within those beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. This update 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 Company is currently evaluating the impact of this update on its condensed 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), effective for fiscal years and interim periods within those beginning after December 15, 2017. Early adoption is permitted. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (a consensus of the Emerging Issues Task Force), effective for fiscal years and interim periods within those beginning after December 15, 2017. Early adoption is permitted. This update requires organizations to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, effective for annual or any interim goodwill impairment tests after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The update eliminates Step 2 from the goodwill impairment test and will require management to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.  Any amount by which the carrying amount exceeds the reporting unit’s fair value (not to exceed the goodwill allocated to that reporting unit) is recognized as an impairment charge.  The Company is currently evaluating the impact of this update on its condensed consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, effective for annual reporting periods beginning on or after December 15, 2017, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual period. This update requires organizations to disaggregate the service cost component from the other components of net benefit costs in the income statement and present it with other current compensation costs for the related employees while providing guidance for capitalization eligibility for service costs. The Company is currently evaluating the impact of this update in its condensed consolidated financial statements.

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Summary of Investments (Tables)

9 Months Ended

Sep. 30, 2017

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, 2017
	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	$	1,502,617	$	49,176	$	8,333	$	1,543,460	$	—
Obligations of U.S. states and their subdivisions	1,884,136		228,301		1,619		2,110,818		—
Corporate debt securities (2)	14,991,367		622,399		118,566		15,495,200		(1,088		)
Asset-backed securities	1,578,590		110,333		12,173		1,676,750		(65,696		)
Residential mortgage-backed securities	68,946		2,618		645		70,919		(141		)
Commercial mortgage-backed securities	1,375,325		22,547		10,920		1,386,952		—
Collateralized debt obligations	724,967		3,832		29		728,770		—
Total fixed maturities	$	22,125,948	$	1,039,206	$	152,285	$	23,012,869	$	(66,925	)

⁽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 $115,037 and estimated fair value of $111,141.

	December 31, 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	$	3,022,279	$	47,791	$	34,958	$	3,035,112	$	—
Obligations of U.S. states and their subdivisions	1,890,568		214,411		6,317		2,098,662		—
Corporate debt securities (2)	13,811,597		477,316		309,164		13,979,749		(1,488		)
Asset-backed securities	1,226,493		104,274		18,388		1,312,379		(72,464		)
Residential mortgage-backed securities	138,292		3,867		1,167		140,992		23
Commercial mortgage-backed securities	1,222,257		23,207		20,182		1,225,282		—
Collateralized debt obligations	361,241		339		53		361,527		—
Total fixed maturities	$	21,672,727	$	871,205	$	390,229	$	22,153,703	$	(73,929	)

⁽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 $113,239.

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, 2017
	Amortized cost		Estimated fair value
Maturing in one year or less	$	796,697	$	814,539
Maturing after one year through five years	3,998,273		4,166,545
Maturing after five years through ten years	7,432,248		7,650,580
Maturing after ten years	5,000,632		5,356,030
Mortgage-backed and asset-backed securities	4,898,098		5,025,175
Total fixed maturities	$	22,125,948	$	23,012,869

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,
	2017		2016		2017		2016
Proceeds from sales	$	339,051	$	421,245	$	2,810,599	$	3,777,445
Gross realized gains from sales	8,512		8,487		29,433		55,154
Gross realized losses from sales	2,993		24		24,330		170

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, 2017			December 31, 2016
Principal	$	3,936,617		$	3,558,863
Unamortized premium (discount) and fees, net	4,244			5,541
Foreign exchange translation	3,000			(2,696		)
Mortgage provision allowance	(773		)	(2,882		)
Total mortgage loans	$	3,943,088		$	3,558,826

Summary of 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, 2017, and December 31, 2016, respectively: 

	September 30, 2017		December 31, 2016
Performing	$	3,943,861	$	3,560,243
Non-performing	—		1,465
Total	$	3,943,861	$	3,561,708

Summary of activity in the mortgage provision allowance

The following table summarizes activity in the mortgage provision allowance:

	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	Commercial mortgages			Commercial mortgages
Beginning balance	$	2,882		$	2,890
Provision increases	157			536
Charge-off	(663		)	—
Recovery	(30		)	—
Provision decreases	(1,573		)	(544		)
Ending balance	$	773		$	2,882
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	$	—		$	536
Collectively evaluated for impairment	773			2,346
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method:	$	3,943,861		$	3,561,708
Individually evaluated for impairment	—			1,465
Collectively evaluated for impairment	3,943,861			3,560,243

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, 2017
	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	$	631,467	$	8,156	$	11,037	$	177	$	642,504	$	8,333
Obligations of U.S. states and their subdivisions	43,583		726		18,093		893		61,676		1,619
Corporate debt securities	2,401,845		35,750		1,360,880		82,816		3,762,725		118,566
Asset-backed securities	464,858		2,246		224,740		9,927		689,598		12,173
Residential mortgage-backed securities	—		—		12,383		645		12,383		645
Commercial mortgage-backed securities	488,610		5,851		102,235		5,069		590,845		10,920
Collateralized debt obligations	77,015		29		—		—		77,015		29
Total fixed maturities	$	4,107,378	$	52,758	$	1,729,368	$	99,527	$	5,836,746	$	152,285
Total number of securities in an unrealized loss position			397				169				566

	December 31, 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	$	2,006,588	$	34,752	$	10,526	$	206	$	2,017,114	$	34,958
Obligations of U.S. states and their subdivisions	216,154		5,922		10,498		395		226,652		6,317
Corporate debt securities	4,119,630		170,453		860,153		138,711		4,979,783		309,164
Asset-backed securities	316,065		6,971		230,331		11,417		546,396		18,388
Residential mortgage-backed securities	16,962		102		14,297		1,065		31,259		1,167
Commercial mortgage-backed securities	592,508		17,535		26,068		2,647		618,576		20,182
Collateralized debt obligations	160,612		53		—		—		160,612		53
Total fixed maturities	$	7,428,519	$	235,788	$	1,151,873	$	154,441	$	8,580,392	$	390,229
Total number of securities in an unrealized loss position			610				128				738

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,
	2017			2016			2017			2016
Beginning balance	$	77,411		$	94,687		$	83,665		$	102,343
Reductions due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(5,273		)	(4,405		)	(11,527		)	(12,061		)
Ending balance	$	72,138		$	90,282		$	72,138		$	90,282

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

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, 2017
			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	$	29,482		$	29,482	$	—
Cross-currency swaps	755,890		(4,310		)	30,874		35,184
Total cash flow hedges	1,175,690		25,172			60,356		35,184
Total derivatives designated as hedges	1,175,690		25,172			60,356		35,184
Derivatives not designated as hedges:
Interest rate swaps	507,100		(2,477		)	10,147		12,624
Futures on equity indices	29,674		—			—		—
Interest rate futures	74,200		—			—		—
Interest rate swaptions	162,423		156			156		—
Other forward contracts	2,954,200		(3,151		)	925		4,076
Cross-currency swaps	612,733		(3,863		)	27,193		31,056
Total derivatives not designated as hedges	4,340,330		(9,335		)	38,421		47,756
Total derivative financial instruments	$	5,516,020	$	15,837		$	98,777	$	82,940

⁽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, 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	$	33,390		$	33,390	$	—
Cross-currency swaps	614,208		45,347			53,641		8,294
Total cash flow hedges	1,034,008		78,737			87,031		8,294
Total derivatives designated as hedges	1,034,008		78,737			87,031		8,294
Derivatives not designated as hedges:
Interest rate swaps	468,100		(4,358		)	8,982		13,340
Futures on equity indices	34,422		—			—		—
Interest rate futures	81,500		—			—		—
Interest rate swaptions	165,534		354			354		—
Cross-currency swaps	612,733		33,371			50,018		16,647
Total derivatives not designated as hedges	1,362,289		29,367			59,354		29,987
Total derivative financial instruments	$	2,396,297	$	108,104		$	146,385	$	38,281

⁽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 and comprehensive income reported by cash flow hedges and derivatives not designated as 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,
	2017			2016			2017			2016
Cash flow hedges:
Interest rate swaps	$	115		$	(401	)	$	1,175		$	1,335		(A)
Interest rate swaps	(653		)	(4,284		)	(690		)	(1,092		)	(B)
Cross-currency swaps	(22,573		)	(3,120		)	(108		)	1,576			(A)
Total cash flow hedges	$	(23,111	)	$	(7,805	)	$	377		$	1,819

(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,
	2017			2016			2017			2016
Cash flow hedges:
Interest rate swaps	$	611		$	4,098		$	3,581		$	4,166		(A)
Interest rate swaps	(5,003		)	(29,017		)	(2,357		)	(1,675		)	(B)
Cross-currency swaps	(43,919		)	21,612			21			3,777			(A)
Total cash flow hedges	$	(48,311	)	$	(3,307	)	$	1,245		$	6,268

(A) Net investment income.

(B) Interest expense.

	Gain (loss) on derivatives recognized in net income
	Three Months Ended September 30,
	2017				2016
Derivatives not designated as hedging instruments:
Futures on equity indices	$	(583	)	(A)	$	510		(A)
Futures on equity indices	(1,070		)	(B)	(2,081		)	(B)
Interest rate swaps	492			(A)	418			(A)
Interest rate futures	(40		)	(A)	134			(A)
Interest rate futures	18			(B)	(183		)	(B)
Interest rate swaptions	(6		)	(A)	23			(A)
Interest rate swaptions	(73		)	(B)	(39		)	(B)
Other forward contracts	(571		)	(A)	(8,286		)	(A)
Other forward contracts	7,264			(B)	19,413			(B)
Cross-currency swaps	(16,046		)	(A)	1,872			(A)
Total derivatives not designated as hedging instruments	$	(10,615	)		$	11,781

(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,
	2017				2016
Derivatives not designated as hedging instruments:
Futures on equity indices	$	(917	)	(A)	$	103		(A)
Futures on equity indices	(3,890		)	(B)	(5,358		)	(B)
Interest rate swaps	3,919			(A)	19,727			(A)
Interest rate futures	62			(A)	(77		)	(A)
Interest rate futures	(183		)	(B)	(249		)	(B)
Interest rate swaptions	(37		)	(A)	96			(A)
Interest rate swaptions	(224		)	(B)	(256		)	(B)
Other forward contracts	(3,151		)	(A)	7,268			(A)
Other forward contracts	20,383			(B)	31,509			(B)
Cross-currency swaps	(38,297		)	(A)	62,147			(A)
Total derivatives not designated as hedging instruments	$	(22,335	)		$	114,910

(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, 2017

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, 2017
			Gross fair value not offset
			in balance sheets
	Gross fair value of		Financial						Net
Financial instruments (assets):	recognized assets (1)		instruments			Cash collateral			fair value
Derivative instruments (2)	$	72,217	$	(56,224	)	$	(14,263	)	$	1,730
Short-term reverse repurchase agreements (3)	20,900		(20,900		)	—			—
Total financial instruments (assets)	93,117		(77,124		)	(14,263		)	1,730

	September 30, 2017
		Gross fair value not offset
		in balance sheets
	Gross fair value of	Financial				Net
Financial instruments (liabilities):	recognized liabilities (1)	instruments		Cash collateral		fair value
Derivative instruments (4)	70,720	(56,224	)	(13,006	)	1,490

⁽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, 2016
			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)	$	119,862	$	(26,254	)	$	92,756	$	852
Derivative instruments (liabilities) (3)	26,254		(26,254		)	—		—

⁽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, 2017

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, 2017
	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	$	—	$	1,543,460	$	—	$	1,543,460
Obligations of U.S. states and their subdivisions	—		2,110,818		—		2,110,818
Corporate debt securities	—		15,485,120		10,080		15,495,200
Asset-backed securities	—		1,676,750		—		1,676,750
Residential mortgage-backed securities	—		70,919		—		70,919
Commercial mortgage-backed securities	—		1,386,952		—		1,386,952
Collateralized debt obligations	—		728,770		—		728,770
Total fixed maturities available-for-sale	—		23,002,789		10,080		23,012,869
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		20,291		—		20,291
Corporate debt securities	—		38,956		—		38,956
Commercial mortgage-backed securities	—		1,081		—		1,081
Total fixed maturities held-for-trading	—		60,328		—		60,328
Short-term investments	320,398		502,673		—		823,071
Collateral under securities lending agreements	1,870		72,925		—		74,795
Collateral under derivative counterparty collateral agreements	41,524		—		—		41,524
Derivative instruments designated as hedges:
Interest rate swaps	—		29,482		—		29,482
Cross-currency swaps	—		30,874		—		30,874
Derivative instruments not designated as hedges:
Interest rate swaps	—		10,147		—		10,147
Interest rate swaptions	—		156		—		156
Other forward contracts	—		925		—		925
Cross-currency swaps	—		27,193		—		27,193
Total derivative instruments	—		98,777		—		98,777
Separate account assets (1)	16,255,644		11,213,991		—		27,866,779
Total assets	$	16,619,436	$	34,951,483	$	10,080	$	51,978,143
Liabilities
Derivative instruments designated as hedges:
Cross-currency swaps	$	—	$	35,184	$	—	$	35,184
Derivative instruments not designated as hedges:
Interest rate swaps	—		12,624		—		12,624
Other forward contracts	—		4,076		—		4,076
Cross-currency swaps	—		31,056		—		31,056
Total derivative instruments	—		82,940		—		82,940
Embedded derivatives - GLWB	—		—		10,221		10,221
Separate account liabilities (2)	18		521,723		—		521,741
Total liabilities	$	18	$	604,663	$	10,221	$	614,902

⁽¹⁾ Included in the total fair value amount are $397 million of investments as of September 30, 2017 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, 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	$	—	$	3,035,112	$	—	$	3,035,112
Obligations of U.S. states and their subdivisions	—		2,098,662		—		2,098,662
Corporate debt securities	—		13,968,110		11,639		13,979,749
Asset-backed securities	—		1,312,379		—		1,312,379
Residential mortgage-backed securities	—		140,992		—		140,992
Commercial mortgage-backed securities	—		1,225,282		—		1,225,282
Collateralized debt obligations	—		361,527		—		361,527
Total fixed maturities available-for-sale	—		22,142,064		11,639		22,153,703
Fixed maturities held-for-trading:
U.S. government direct obligations and U.S. agencies	—		458,067		—		458,067
Corporate debt securities	—		55,591		—		55,591
Commercial mortgage-backed securities	—		1,080		—		1,080
Total fixed maturities held-for-trading	—		514,738		—		514,738
Short-term investments	267,851		36,137		—		303,988
Collateral under derivative counterparty collateral agreements	103,214		—		—		103,214
Derivative instruments designated as hedges:
Interest rate swaps	—		33,390		—		33,390
Cross-currency swaps	—		53,641		—		53,641
Derivative instruments not designated as hedges:
Interest rate swaps	—		8,982		—		8,982
Interest rate swaptions	—		354		—		354
Cross-currency swaps	—		50,018		—		50,018
Total derivative instruments	—		146,385		—		146,385
Separate account assets (1)	15,407,992		11,199,924		—		27,037,765
Total assets	$	15,779,057	$	34,039,248	$	11,639	$	50,259,793
Liabilities
Collateral under derivative counterparty collateral agreements	$	103,214	$	—	$	—	$	103,214
Derivative instruments designated as hedges:
Cross-currency swaps	—		8,294		—		8,294
Derivative instruments not designated as hedges:
Interest rate swaps	—		13,340		—		13,340
Cross-currency swaps	—		16,647		—		16,647
Total derivative instruments	—		38,281		—		38,281
Embedded derivatives - GLWB	—		—		5,712		5,712
Separate account liabilities (2)	55		336,468		—		336,523
Total liabilities	$	103,269	$	374,749	$	5,712	$	483,730

⁽¹⁾ Included in the total fair value amount are $430 million of investments as of December 31, 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.

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, 2017
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, July 1, 2017	$	10,703		$	9,595
Realized and unrealized gains (losses) included in:
Net income (loss)	—			(626		)
Other comprehensive income (loss)	166			—
Settlements	(432		)	—
Transfers out of Level 3 (1)	(357		)	—
Balances, September 30, 2017	$	10,080		$	10,221
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, 2017	$	—		$	(626	)

⁽¹⁾ Transfers out of Level 3 are due primarily to increased observability of inputs in valuation methodologies as evidenced by corroboration of market prices with multiple pricing vendors.

	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
	Nine Months Ended September 30, 2017
	Assets			Liabilities
	Fixed maturities  available-for-sale			Embedded
	Corporate			derivatives
	debt securities			- GLWB
Balances, January 1, 2017	$	11,639		$	5,712
Realized and unrealized gains (losses) included in:
Net income (loss)	—			(4,509		)
Other comprehensive income (loss)	83			—
Settlements	(1,275		)	—
Transfers out of Level 3 (1)	(367		)	—
Balances, September 30, 2017	$	10,080		$	10,221
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, 2017	$	—		$	(4,509	)

⁽¹⁾ Transfers out of Level 3 are due primarily to increased observability of inputs in valuation methodologies as evidenced by corroboration of market prices with multiple pricing vendors.

	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.

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

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

			Range
	Valuation Technique	Unobservable Input	September 30, 2017	December 31, 2016
Embedded derivatives - GLWB	Risk neutral stochastic valuation methodology	Equity volatility	15% - 28%	15% - 30%
		Swap curve	1.33% - 2.54%	0.75% - 3.00%
		Mortality rate	Based on the Annuity 2000 Mortality Table	Based on the Annuity 2000 Mortality Table
		Base Lapse rate	1% - 15%	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, 2017				December 31, 2016
	Carrying		Estimated		Carrying		Estimated
	amount		fair value		amount		fair value
Assets
Mortgage loans on real estate	$	3,943,088	$	4,020,555	$	3,558,826	$	3,574,240
Policy loans	4,073,511		4,073,511		4,019,648		4,019,648
Limited partnership interests	40,433		40,413		29,345		29,822
Other investments	12,631		43,002		14,382		44,687
Liabilities
Annuity contract benefits without life contingencies	$	12,669,339	$	12,641,064	$	12,291,378	$	12,129,631
Policyholders’ funds	245,007		245,007		285,554		285,554
Commercial paper	99,868		99,868		99,049		99,049
Notes payable	534,538		565,903		531,092		495,004

XML

Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2017

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, 2017
	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, 2017	$	550,776		$	50,132		$	(113,256	)	$	(81,513	)	$	406,139
Other comprehensive income (loss) before reclassifications	25,989			(15,022		)	(1,285		)	5,559			15,241
Amounts reclassified from AOCI	(1,630		)	(245		)	—			1,425			(450		)
Net current period other comprehensive income (loss)	24,359			(15,267		)	(1,285		)	6,984			14,791
Balances, September 30, 2017	$	575,135		$	34,865		$	(114,541	)	$	(74,529	)	$	420,930

	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

	Nine Months Ended September 30, 2017
	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, 2017	$	311,748		$	67,076		$	(58,646	)	$	(84,303	)	$	235,875
Other comprehensive income (loss) before reclassifications	264,685			(31,402		)	(55,895		)	5,559			182,947
Amounts reclassified from AOCI	(1,298		)	(809		)	—			4,215			2,108
Net current period other comprehensive income (loss)	263,387			(32,211		)	(55,895		)	9,774			185,055
Balances, September 30, 2017	$	575,135		$	34,865		$	(114,541	)	$	(74,529	)	$	420,930

	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

Schedule of composition of other comprehensive income (loss)

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

	Three Months Ended September 30, 2017
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	39,983		$	(13,994	)	$	25,989
Unrealized holding gains (losses), net, arising on cash flow hedges	(23,111		)	8,089			(15,022		)
Reclassification adjustment for (gains) losses, net, realized in net income	(2,885		)	1,010			(1,875		)
Net unrealized gains (losses) related to investments	13,987			(4,895		)	9,092
Future policy benefits, DAC and VOBA adjustments	(1,977		)	692			(1,285		)
Net unrealized gains (losses)	12,010			(4,203		)	7,807
Employee benefit plan adjustment	10,744			(3,760		)	6,984
Other comprehensive income (loss)	$	22,754		$	(7,963	)	$	14,791

	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

	Nine Months Ended September 30, 2017
	Before-tax			Tax (expense)			Net-of-tax
	amount			benefit			amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale	$	407,208		$	(142,523	)	$	264,685
Unrealized holding gains (losses), net, arising on cash flow hedges	(48,311		)	16,909			(31,402		)
Reclassification adjustment for (gains) losses, net, realized in net income	(3,242		)	1,135			(2,107		)
Net unrealized gains (losses) related to investments	355,655			(124,479		)	231,176
Future policy benefits, DAC and VOBA adjustments	(85,992		)	30,097			(55,895		)
Net unrealized gains (losses)	269,663			(94,382		)	175,281
Employee benefit plan adjustment	15,036			(5,262		)	9,774
Other comprehensive income (loss)	$	284,699		$	(99,644	)	$	185,055

	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

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,
	2017				2016
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	$	(2,508	)		$	(8,465	)		Other realized investment (gains) losses, net
	(2,508		)		(8,465		)		Total before tax
	(878		)		(2,962		)		Tax expense or benefit
	$	(1,630	)		$	(5,503	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(1,067	)		$	(2,911	)		Net investment income
	690				1,092				Interest Expense
	(377		)		(1,819		)		Total before tax
	(132		)		(637		)		Tax expense or benefit
	$	(245	)		$	(1,182	)		Net of tax
Amortization of employee benefit plan items
Prior service (benefits)	$	(109	)	(1)	$	(150	)	(1)
Actuarial losses	2,302			(1)	2,644			(1)
	2,193				2,494				Total before tax
	768				873				Tax expense or benefit
	$	1,425			$	1,621			Net of tax
Total reclassification	$	(450	)		$	(5,064	)		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 9 for additional details).

	Nine Months Ended September 30,
	2017				2016
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	$	(1,997	)		$	(55,107	)		Other realized investment (gains) losses, net
	(1,997		)		(55,107		)		Total before tax
	(699		)		(19,287		)		Tax expense or benefit
	$	(1,298	)		$	(35,820	)		Net of tax
Unrealized holding (gains) losses, net, arising on cash flow hedges	$	(3,602	)		$	(7,943	)		Net investment income
	2,357				1,675				Interest Expense
	(1,245		)		(6,268		)		Total before tax
	(436		)		(2,194		)		Tax expense or benefit
	$	(809	)		$	(4,074	)		Net of tax
Amortization of employee benefit plan items
Prior service costs (benefits)	$	37		(1)	$	(452	)	(1)
Actuarial losses	6,448			(1)	7,414			(1)
	6,485				6,962				Total before tax
	2,270				2,437				Tax expense or benefit
	$	4,215			$	4,525			Net of tax
Total reclassification	$	2,108			$	(35,369	)		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 9 for additional details).

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2017

Retirement Benefits [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
	2017			2016			2017			2016			2017			2016			2017			2016
Components of net periodic cost (benefit):
Service cost	$	2,170		$	3,417		$	378		$	349		$	(4	)	$	73		$	2,544		$	3,839
Interest cost	6,114			6,384			192			184			405			444			6,711			7,012
Expected return on plan assets	(4,980		)	(6,237		)	—			—			—			—			(4,980		)	(6,237		)
Amortization of unrecognized prior service costs (benefits)	—			—			(235		)	(275		)	126			125			(109		)	(150		)
Amortization of losses (gains) from earlier periods	2,241			2,726			75			(67		)	(14		)	(15		)	2,302			2,644
Net periodic cost (benefit)	$	5,545		$	6,290		$	410		$	191		$	513		$	627		$	6,468		$	7,108

	Nine Months Ended September 30,
	Defined Benefit  Pension Plan						Post-Retirement  Medical Plan						Supplemental Executive Retirement Plan						Total
	2017			2016			2017			2016			2017			2016			2017			2016
Components of net periodic cost (benefit):
Service cost	$	1,436		$	6,087		$	1,092		$	935		$	(12	)	$	219		$	2,516		$	7,241
Interest cost	18,356			18,948			568			534			1,215			1,332			20,139			20,814
Expected return on plan assets	(15,216		)	(18,793		)	—			—			—			—			(15,216		)	(18,793		)
Amortization of unrecognized prior service costs (benefits)	—			—			(339		)	(827		)	376			375			37			(452		)
Amortization of losses (gains) from earlier periods	6,639			7,695			(151		)	(237		)	(40		)	(44		)	6,448			7,414
Net periodic cost (benefit)	$	11,215		$	13,937		$	1,170		$	405		$	1,539		$	1,882		$	13,924		$	16,224

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 payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Payments to the Post-Retirement Medical Plan	155	212	531	603
Payments to the Supplemental Executive Retirement Plan	834	834	2,502	2,502

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2017

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,
	2017			2016			2017		2016
Current expense (benefit)	$	27,585		$	(1,399	)	$	58,845	$	41,725
Deferred (benefit) expense	(5,897		)	16,694			6,128		37,318
Total income tax provision	$	21,688		$	15,295		$	64,973	$	79,043

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,
	2017		2016
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(3.9	)%	(2.7	)%
Tax credits	(0.3	)%	(7.3	)%
State income taxes, net of federal benefit	2.8	%	2.5	%
Other, net	(0.5	)%	(0.4	)%
Effective income tax rate	33.1	%	27.1	%

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Summary of financial information related to segments

The following tables summarize segment financial information:

	Three Months Ended September 30, 2017
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	125,757	$	764	$	18,983		$	145,504
Fee income	27,780		234,957		1,567			264,304
Other revenue	—		3,322		—			3,322
Net investment income	185,447		103,334		11,801			300,582
Realized investment gains (losses), net	2,389		11,472		—			13,861
Total revenues	341,373		353,849		32,351			727,573
Benefits and expenses:
Policyholder benefits	272,396		53,736		18,109			344,241
Operating expenses	41,332		255,623		18,108			315,063
Total benefits and expenses	313,728		309,359		36,217			659,304
Income (loss) before income taxes	27,645		44,490		(3,866		)	68,269
Income tax expense (benefit)	9,398		13,641		(1,351		)	21,688
Net income (loss)	$	18,247	$	30,849	$	(2,515	)	$	46,581

	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

	Nine Months Ended September 30, 2017
	Individual		Empower
	Markets		Retirement		Other			Total
Revenue:
Premium income	$	302,017	$	1,908	$	61,483		$	365,408
Fee income	82,960		698,850		4,948			786,758
Other revenue	—		9,367		—			9,367
Net investment income	562,440		313,710		35,124			911,274
Realized investment gains (losses), net	7,010		17,168		(7		)	24,171
Total revenues	954,427		1,041,003		101,548			2,096,978
Benefits and expenses:
Policyholder benefits	740,655		152,067		60,491			953,213
Operating expenses	127,137		760,564		59,854			947,555
Total benefits and expenses	867,792		912,631		120,345			1,900,768
Income (loss) before income taxes	86,635		128,372		(18,797		)	196,210
Income tax expense (benefit)	29,579		42,063		(6,669		)	64,973
Net income (loss)	$	57,056	$	86,309	$	(12,128	)	$	131,237

	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 before income taxes	163,197		119,573		8,712		291,482
Income tax expense	55,183		20,579		3,281		79,043
Net income	$	108,014	$	98,994	$	5,431	$	212,439

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contractual Obligation, Fiscal Year Maturity Schedule

The amounts of these unfunded commitments at September 30, 2017, and December 31, 2016, were as follows:

	September 30, 2017		December 31, 2016
Due in less than one year	$	464,957	$	438,458
Due within one to three years	2,239		—
Total	$	467,196	$	438,458

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Dividends Dividends (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Dividends [Abstract]
Dividends paid to parent, GWL&A Financial	$ 145,301	$ 125,691

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Summary of Investments - SOI Fixed Maturity AFS and non-credit OTTI in AOCI (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Securities available-for-sale
Amortized cost	$ 22,125,948	$ 21,672,727
Fixed maturities available-for-sale:	23,012,869	22,153,703
Fixed maturities
Securities available-for-sale
Amortized cost	22,125,948	21,672,727
Gross unrealized gains	1,039,206	871,205
Gross unrealized losses	152,285	390,229
Fixed maturities available-for-sale:	23,012,869	22,153,703
OTTI (gain) loss included in AOCI	(66,925)	(73,929)
U.S. government direct obligations and U.S. agencies
Securities available-for-sale
Amortized cost	1,502,617	3,022,279
Gross unrealized gains	49,176	47,791
Gross unrealized losses	8,333	34,958
Fixed maturities available-for-sale:	1,543,460	3,035,112
OTTI (gain) loss included in AOCI	0	0
Obligations of U.S. states and their subdivisions
Securities available-for-sale
Amortized cost	1,884,136	1,890,568
Gross unrealized gains	228,301	214,411
Gross unrealized losses	1,619	6,317
Fixed maturities available-for-sale:	2,110,818	2,098,662
OTTI (gain) loss included in AOCI	0	0
Corporate debt securities
Securities available-for-sale
Amortized cost	14,991,367	13,811,597
Gross unrealized gains	622,399	477,316
Gross unrealized losses	118,566	309,164
Fixed maturities available-for-sale:	15,495,200	13,979,749
OTTI (gain) loss included in AOCI	(1,088)	(1,488)
Perpetual debt investments
Securities available-for-sale
Amortized cost	115,037	135,187
Fixed maturities available-for-sale:	111,141	113,239
Asset-backed securities
Securities available-for-sale
Amortized cost	1,578,590	1,226,493
Gross unrealized gains	110,333	104,274
Gross unrealized losses	12,173	18,388
Fixed maturities available-for-sale:	1,676,750	1,312,379
OTTI (gain) loss included in AOCI	(65,696)	(72,464)
Residential mortgage-backed securities
Securities available-for-sale
Amortized cost	68,946	138,292
Gross unrealized gains	2,618	3,867
Gross unrealized losses	645	1,167
Fixed maturities available-for-sale:	70,919	140,992
OTTI (gain) loss included in AOCI	(141)	23
Commercial mortgage-backed securities
Securities available-for-sale
Amortized cost	1,375,325	1,222,257
Gross unrealized gains	22,547	23,207
Gross unrealized losses	10,920	20,182
Fixed maturities available-for-sale:	1,386,952	1,225,282
OTTI (gain) loss included in AOCI	0	0
Collateralized debt obligations
Securities available-for-sale
Amortized cost	724,967	361,241
Gross unrealized gains	3,832	339
Gross unrealized losses	29	53
Fixed maturities available-for-sale:	728,770	361,527
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, 2017	Dec. 31, 2016
Amortized cost
Maturing in one year or less	$ 796,697
Maturing after one year through five years	3,998,273
Maturing after five years through ten years	7,432,248
Maturing after ten years	5,000,632
Mortgage-backed and asset-backed securities	4,898,098
Amortized cost	22,125,948	$ 21,672,727
Estimated fair value
Maturing in one year or less	814,539
Maturing after one year through five years	4,166,545
Maturing after five years through ten years	7,650,580
Maturing after ten years	5,356,030
Mortgage-backed and asset-backed securities	5,025,175
Estimated fair value	$ 23,012,869	$ 22,153,703

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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, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 339,051	$ 421,245	$ 2,810,599	$ 3,777,445
Gross realized gains from sales	8,512	8,487	29,433	55,154
Gross realized losses from sales	$ 2,993	$ 24	$ 24,330	$ 170

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Summary of Investments - SOI Mortgage loans on real estate by component (Details 3) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Principal	$ 3,936,617	$ 3,558,863
Unamortized premium (discount) and fees, net	4,244	5,541
Foreign exchange translation	3,000	(2,696)
Mortgage provision allowance	(773)	(2,882)	$ (2,890)
Total mortgage loans	$ 3,943,088	$ 3,558,826

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Summary of Investments - SOI risk assessment (Details) - Mortgages - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Recorded investment	$ 3,943,861	$ 3,561,708
Performing
Financing Receivable, Recorded Investment [Line Items]
Recorded investment	3,943,861	3,560,243
Non-performing
Financing Receivable, Recorded Investment [Line Items]
Recorded investment	$ 0	$ 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, 2017	Sep. 30, 2016	Dec. 31, 2016
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 2,882	$ 2,890	$ 2,890
Provision increases	157		536
Charge-off	(663)	0
Recovery	(30)	$ 0
Provision decreases	(1,573)		(544)
Ending balance	773		2,882
Allowance ending balance by basis of impairment method:
Individually evaluated for impairment	0		536
Collectively evaluated for impairment	773		2,346
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:	3,943,861		3,561,708
Individually evaluated for impairment	0		1,465
Collectively evaluated for impairment	3,943,861		3,560,243
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:	$ 3,943,861		$ 3,561,708

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Summary of Investments - SOI Ltd partnership Sec lending Special deposits (Details 5) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities Financing Transaction [Line Items]
Limited partnership and other corporation interests	$ 45,117,000	$ 34,895,000
Nature and activities of the VIEs and the effect on financial statements
Carrying value to loss in relation to the activities of VIEs	42,734,000	32,444,000
Maximum exposure to loss in relation to the activities of the VIEs	42,734,000	32,444,000
Special deposits and securities lending
Amortized cost	105,952,000
Securities loaned to third parties at fair value	103,921,000	0
Collateral received	74,795,000	0
Collateral fair value	32,393,000
Payable under securities lending agreements	74,795,000	$ 0
Corporate debt securities
Special deposits and securities lending
Payable under securities lending agreements	$ 74,795,000

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Summary of Investments - SOI Unrealized losses fixed maturities AFS (Details 6) $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($) position	Dec. 31, 2016 USD ($) position
Fixed maturities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	$ 4,107,378	$ 7,428,519
Less than twelve months, Unrealized loss and OTTI	52,758	235,788
Twelve months or longer, Estimated fair value	1,729,368	1,151,873
Twelve months or longer, Unrealized loss and OTTI	99,527	154,441
Total Estimated fair value	5,836,746	8,580,392
Total Unrealized losses and OTTI	$ 152,285	$ 390,229
Additional disclosure
Total number of securities in an unrealized loss position, Less than twelve months | position	397	610
Total number of securities in an unrealized loss position, twelve months or longer | position	169	128
Total number of securities in an unrealized loss position | position	566	738
Decrease (increase) in total unrealized losses and other-than-temporary impairment losses	$ 237,944
Decrease (increase) in total unrealized losses and other-than-temporary impairment losses (as a percent)	61.00%
Increase (decrease) in the less than twelve months category	$ (183,030)
Increase (decrease) in greater than twelve months unrealized losses and other-than-temporary impairment losses	(54,914)
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	631,467	$ 2,006,588
Less than twelve months, Unrealized loss and OTTI	8,156	34,752
Twelve months or longer, Estimated fair value	11,037	10,526
Twelve months or longer, Unrealized loss and OTTI	177	206
Total Estimated fair value	642,504	2,017,114
Total Unrealized losses and OTTI	8,333	34,958
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	43,583	216,154
Less than twelve months, Unrealized loss and OTTI	726	5,922
Twelve months or longer, Estimated fair value	18,093	10,498
Twelve months or longer, Unrealized loss and OTTI	893	395
Total Estimated fair value	61,676	226,652
Total Unrealized losses and OTTI	1,619	6,317
Corporate debt securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	2,401,845	4,119,630
Less than twelve months, Unrealized loss and OTTI	35,750	170,453
Twelve months or longer, Estimated fair value	1,360,880	860,153
Twelve months or longer, Unrealized loss and OTTI	82,816	138,711
Total Estimated fair value	3,762,725	4,979,783
Total Unrealized losses and OTTI	$ 118,566	309,164
Additional disclosure
Unrealized losses and OTTI over twelve months on securities (as a percent)	83.00%
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	$ 5,693
Asset-backed securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	464,858	316,065
Less than twelve months, Unrealized loss and OTTI	2,246	6,971
Twelve months or longer, Estimated fair value	224,740	230,331
Twelve months or longer, Unrealized loss and OTTI	9,927	11,417
Total Estimated fair value	689,598	546,396
Total Unrealized losses and OTTI	$ 12,173	18,388
Additional disclosure
Unrealized losses and OTTI over twelve months on securities (as a percent)	10.00%
Residential mortgage-backed securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	$ 0	16,962
Less than twelve months, Unrealized loss and OTTI	0	102
Twelve months or longer, Estimated fair value	12,383	14,297
Twelve months or longer, Unrealized loss and OTTI	645	1,065
Total Estimated fair value	12,383	31,259
Total Unrealized losses and OTTI	645	1,167
Commercial mortgage-backed securities
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	488,610	592,508
Less than twelve months, Unrealized loss and OTTI	5,851	17,535
Twelve months or longer, Estimated fair value	102,235	26,068
Twelve months or longer, Unrealized loss and OTTI	5,069	2,647
Total Estimated fair value	590,845	618,576
Total Unrealized losses and OTTI	10,920	20,182
Collateralized debt obligations
Unrealized losses on fixed maturity and equity investments classified as available-for-sale
Less than twelve months, Estimated fair value	77,015	160,612
Less than twelve months, Unrealized loss and OTTI	29	53
Twelve months or longer, Estimated fair value	0	0
Twelve months or longer, Unrealized loss and OTTI	0	0
Total Estimated fair value	77,015	160,612
Total Unrealized losses and OTTI	$ 29	$ 53

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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, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance	$ 77,411	$ 94,687	$ 83,665	$ 102,343
Reductions due to increases in cash flows expected to be collected that are recognized over the remaining life of the security	(5,273)	(4,405)	(11,527)	(12,061)
Ending balance	$ 72,138	$ 90,282	$ 72,138	$ 90,282

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Derivative Financial Instruments Derivative Financial Instruments - Narrative (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
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	$ 81,632,000	$ 38,324,000
Collateral related to the derivatives	16,171,000	0
Fair value of assets required to settle the derivatives in, net liability position	65,461,000
Additional collateral to satisfy collateral netting arrangements	25,353,000	103,214,000
Net derivative gains estimated to be reclassified from accumulated other comprehensive income (loss) into net income within the next twelve months	10,544,000
Derivative financial instruments
Notional amount	5,516,020,000	2,396,297,000
Net derivatives, Fair value	15,837,000	108,104,000
Asset derivatives, Fair value	98,777,000	146,385,000
Liability derivatives, Fair value	82,940,000	38,281,000
Interest rate swaps
Derivative financial instruments
Average notional amount of the derivative instruments	908,500,000	784,900,000
Cross-currency swaps
Derivative financial instruments
Average notional amount of the derivative instruments	1,302,507,000	1,141,967,000
Future
Derivative financial instruments
Average notional amount of the derivative instruments	113,004,000	145,658,000
Swaption
Derivative financial instruments
Average notional amount of the derivative instruments	162,408,000	156,632,000
Other forward contracts
Derivative financial instruments
Average notional amount of the derivative instruments	2,409,855,000	2,230,167,000
Derivatives designated as hedges:
Derivative financial instruments
Notional amount	1,175,690,000	1,034,008,000
Net derivatives, Fair value	25,172,000	78,737,000
Asset derivatives, Fair value	60,356,000	87,031,000
Liability derivatives, Fair value	35,184,000	8,294,000
Derivatives designated as hedges: | Cash flow hedges:
Derivative financial instruments
Notional amount	1,175,690,000	1,034,008,000
Net derivatives, Fair value	25,172,000	78,737,000
Asset derivatives, Fair value	60,356,000	87,031,000
Liability derivatives, Fair value	35,184,000	8,294,000
Derivatives designated as hedges: | Cash flow hedges: | Interest rate swaps
Derivative financial instruments
Notional amount	419,800,000	419,800,000
Net derivatives, Fair value	29,482,000	33,390,000
Asset derivatives, Fair value	29,482,000	33,390,000
Liability derivatives, Fair value	0	0
Derivatives designated as hedges: | Cash flow hedges: | Cross-currency swaps
Derivative financial instruments
Notional amount	755,890,000	614,208,000
Net derivatives, Fair value	(4,310,000)	45,347,000
Asset derivatives, Fair value	30,874,000	53,641,000
Liability derivatives, Fair value	35,184,000	8,294,000
Derivatives not designated as hedges:
Derivative financial instruments
Notional amount	4,340,330,000	1,362,289,000
Net derivatives, Fair value	(9,335,000)	29,367,000
Asset derivatives, Fair value	38,421,000	59,354,000
Liability derivatives, Fair value	47,756,000	29,987,000
Derivatives not designated as hedges: | Interest rate swaps
Derivative financial instruments
Notional amount	507,100,000	468,100,000
Net derivatives, Fair value	(2,477,000)	(4,358,000)
Asset derivatives, Fair value	10,147,000	8,982,000
Liability derivatives, Fair value	12,624,000	13,340,000
Derivatives not designated as hedges: | Cross-currency swaps
Derivative financial instruments
Notional amount	612,733,000	612,733,000
Net derivatives, Fair value	(3,863,000)	33,371,000
Asset derivatives, Fair value	27,193,000	50,018,000
Liability derivatives, Fair value	31,056,000	16,647,000
Derivatives not designated as hedges: | Futures on equity indices
Derivative financial instruments
Notional amount	29,674,000	34,422,000
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	74,200,000	81,500,000
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	162,423,000	165,534,000
Net derivatives, Fair value	156,000	354,000
Asset derivatives, Fair value	156,000	354,000
Liability derivatives, Fair value	0	$ 0
Derivatives not designated as hedges: | Other forward contracts
Derivative financial instruments
Notional amount	2,954,200,000
Net derivatives, Fair value	(3,151,000)
Asset derivatives, Fair value	925,000
Liability derivatives, Fair value	$ 4,076,000

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Derivative Financial Instruments Derivative Financial Instruments - Notional and Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	$ (10,615)	$ 11,781	$ (22,335)	$ 114,910
Net investment income
Derivatives not designated as hedging instruments
Change in fair value of GLWB	(626)	(590)	(4,509)	(20,020)
Policyholders' Funds
Derivatives not designated as hedging instruments
Embedded derivatives - GLWB	10,221		10,221		$ 5,712
Interest rate swaps | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	492	418	3,919	19,727
Cross-currency swaps | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(16,046)	1,872	(38,297)	62,147
Interest rate futures | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(40)	134	62	(77)
Interest rate futures | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	18	(183)	(183)	(249)
Interest rate swaptions | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(6)	23	(37)	96
Interest rate swaptions | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(73)	(39)	(224)	(256)
Other forward contracts | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(571)	(8,286)	(3,151)	7,268
Other forward contracts | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	7,264	19,413	20,383	31,509
Futures on equity indices | Net investment income
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(583)	510	(917)	103
Futures on equity indices | Realized investment gains (losses)
Derivatives not designated as hedging instruments
Gain (loss) on derivatives recognized in net income	(1,070)	(2,081)	(3,890)	(5,358)
Cash flow hedges:
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(23,111)	(7,805)	(48,311)	(3,307)
Gain (loss) reclassified from OCI into net income (Effective portion)	377	1,819	1,245	6,268
Cash flow hedges: | Interest rate swaps | Net investment income
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income
Gain (loss) recognized in OCI on derivatives (Effective portion)	115	(401)	611	4,098
Gain (loss) reclassified from OCI into net income (Effective portion)	1,175	1,335	3,581	4,166
Cash flow hedges: | Interest rate swaps | Interest Expense
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(653)	(4,284)	(5,003)	(29,017)
Gain (loss) reclassified from OCI into net income (Effective portion)	(690)	(1,092)	(2,357)	(1,675)
Cash flow hedges: | Cross-currency swaps | Net investment income
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income
Gain (loss) recognized in OCI on derivatives (Effective portion)	(22,573)	(3,120)	(43,919)	21,612
Gain (loss) reclassified from OCI into net income (Effective portion)	$ (108)	$ 1,576	$ 21	$ 3,777

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Summary of Offsetting Assets and Liabilities Summary of Offsetting Assets and Liabilities - Netting Arrangements (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Derivative instruments (assets)
Gross fair value of recognized assets	$ 72,217	$ 119,862
Financial instruments	56,224	26,254
Cash collateral	(14,263)	(92,756)
Net fair value	1,730	852
Securities purchased under agreements to resell, gross	20,900
Securities purchased under agreements to resell, not offset	20,900
Securities purchased under agreements to resell, collateral, obligation to return cash	0
Securities purchased under agreements to resell, offset against collateral, net of not subject to master netting arrangement, policy election	0
Derivative asset, securities purchased under agreements to resell, securities borrowed	93,117
Derivative asset, securities purchased under agreements to resell, securities borrowed, not offset	77,124
Derivative asset, securities purchased under agreements to resell, securities borrowed, collateral, obligation to return cash	(14,263)
Derivative asset, securities purchased under agreements to resell, securities borrowed, amount offset against collateral	1,730
Derivatives instrument (liabilities)
Gross fair value of recognized liabilities	70,720	26,254
Financial instruments	56,224	26,254
Amount of unrestricted cash collateral to counterparties in the normal course of business	13,006	0
Net fair value	$ 1,490	$ 0

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Fair Value Measurements - Fair Value Measurements - Recurring by FV hierarchy (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Fixed maturities available-for-sale:	$ 23,012,869	$ 22,153,703
Fixed maturities held-for-trading:	60,328	514,738
Short-term investments	823,071	303,988
Collateral under securities lending agreements	74,795	0
Collateral under derivative counterparty collateral agreements	13,006	0
Total derivative instruments	98,777	146,385
Separate account assets	27,866,779	27,037,765
Liabilities
Collateral under derivative counterparty collateral agreements	14,263	92,756
Total derivative instruments	82,940	38,281
Separate account liabilities	27,866,779	27,037,765
Derivative instruments designated as hedges:
Assets
Total derivative instruments	60,356	87,031
Liabilities
Total derivative instruments	35,184	8,294
Derivative instruments not designated as hedges:
Assets
Total derivative instruments	38,421	59,354
Liabilities
Total derivative instruments	47,756	29,987
Derivative instruments not designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	10,147	8,982
Liabilities
Total derivative instruments	12,624	13,340
Derivative instruments not designated as hedges: | Interest rate swaptions
Assets
Total derivative instruments	156	354
Liabilities
Total derivative instruments	0	0
Derivative instruments not designated as hedges: | Other forward contracts
Assets
Total derivative instruments	925
Liabilities
Total derivative instruments	4,076
Derivative instruments not designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	27,193	50,018
Liabilities
Total derivative instruments	31,056	16,647
U.S. government direct obligations and U.S. agencies
Assets
Fixed maturities available-for-sale:	1,543,460	3,035,112
Obligations of U.S. states and their subdivisions
Assets
Fixed maturities available-for-sale:	2,110,818	2,098,662
Corporate debt securities
Assets
Fixed maturities available-for-sale:	15,495,200	13,979,749
Asset-backed securities
Assets
Fixed maturities available-for-sale:	1,676,750	1,312,379
Residential mortgage-backed securities
Assets
Fixed maturities available-for-sale:	70,919	140,992
Commercial mortgage-backed securities
Assets
Fixed maturities available-for-sale:	1,386,952	1,225,282
Collateralized debt obligations
Assets
Fixed maturities available-for-sale:	728,770	361,527
Recurring basis
Assets
Fixed maturities available-for-sale:	23,012,869	22,153,703
Fixed maturities held-for-trading:	60,328	514,738
Short-term investments	823,071	303,988
Collateral under securities lending agreements	74,795
Collateral under derivative counterparty collateral agreements	41,524	103,214
Total derivative instruments	98,777	146,385
Separate account assets	27,866,779	27,037,765
Total assets	51,978,143	50,259,793
Separate account assets excluded	397,000	430,000
Liabilities
Collateral under derivative counterparty collateral agreements		103,214
Total derivative instruments	82,940	38,281
Embedded derivatives - GLWB	10,221	5,712
Separate account liabilities	521,741	336,523
Total liabilities	614,902	483,730
Recurring basis | Derivative instruments designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	29,482	33,390
Recurring basis | Derivative instruments designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	30,874	53,641
Liabilities
Total derivative instruments	35,184	8,294
Recurring basis | Derivative instruments not designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	10,147	8,982
Liabilities
Total derivative instruments	12,624	13,340
Recurring basis | Derivative instruments not designated as hedges: | Interest rate swaptions
Assets
Total derivative instruments	156	354
Recurring basis | Derivative instruments not designated as hedges: | Other forward contracts
Assets
Total derivative instruments	925
Liabilities
Total derivative instruments	4,076
Recurring basis | Derivative instruments not designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	27,193	50,018
Liabilities
Total derivative instruments	31,056	16,647
Recurring basis | U.S. government direct obligations and U.S. agencies
Assets
Fixed maturities available-for-sale:	1,543,460	3,035,112
Fixed maturities held-for-trading:	20,291	458,067
Recurring basis | Obligations of U.S. states and their subdivisions
Assets
Fixed maturities available-for-sale:	2,110,818	2,098,662
Recurring basis | Corporate debt securities
Assets
Fixed maturities available-for-sale:	15,495,200	13,979,749
Fixed maturities held-for-trading:	38,956	55,591
Recurring basis | Asset-backed securities
Assets
Fixed maturities available-for-sale:	1,676,750	1,312,379
Recurring basis | Residential mortgage-backed securities
Assets
Fixed maturities available-for-sale:	70,919	140,992
Recurring basis | Commercial mortgage-backed securities
Assets
Fixed maturities available-for-sale:	1,386,952	1,225,282
Fixed maturities held-for-trading:	1,081	1,080
Recurring basis | Collateralized debt obligations
Assets
Fixed maturities available-for-sale:	728,770	361,527
Recurring basis | Quoted prices in active markets for identical assets (Level 1)
Assets
Short-term investments	320,398	267,851
Collateral under securities lending agreements	1,870
Collateral under derivative counterparty collateral agreements	41,524	103,214
Separate account assets	16,255,644	15,407,992
Total assets	16,619,436	15,779,057
Liabilities
Collateral under derivative counterparty collateral agreements		103,214
Separate account liabilities	18	55
Total liabilities	18	103,269
Recurring basis | Significant other observable inputs (Level 2)
Assets
Fixed maturities available-for-sale:	23,002,789	22,142,064
Fixed maturities held-for-trading:	60,328	514,738
Short-term investments	502,673	36,137
Collateral under securities lending agreements	72,925
Total derivative instruments	98,777	146,385
Separate account assets	11,213,991	11,199,924
Total assets	34,951,483	34,039,248
Liabilities
Total derivative instruments	82,940	38,281
Separate account liabilities	521,723	336,468
Total liabilities	604,663	374,749
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	29,482	33,390
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	30,874	53,641
Liabilities
Total derivative instruments	35,184	8,294
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Interest rate swaps
Assets
Total derivative instruments	10,147	8,982
Liabilities
Total derivative instruments	12,624	13,340
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Interest rate swaptions
Assets
Total derivative instruments	156	354
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Other forward contracts
Assets
Total derivative instruments	925
Liabilities
Total derivative instruments	4,076
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Cross-currency swaps
Assets
Total derivative instruments	27,193	50,018
Liabilities
Total derivative instruments	31,056	16,647
Recurring basis | Significant other observable inputs (Level 2) | U.S. government direct obligations and U.S. agencies
Assets
Fixed maturities available-for-sale:	1,543,460	3,035,112
Fixed maturities held-for-trading:	20,291	458,067
Recurring basis | Significant other observable inputs (Level 2) | Obligations of U.S. states and their subdivisions
Assets
Fixed maturities available-for-sale:	2,110,818	2,098,662
Recurring basis | Significant other observable inputs (Level 2) | Corporate debt securities
Assets
Fixed maturities available-for-sale:	15,485,120	13,968,110
Fixed maturities held-for-trading:	38,956	55,591
Recurring basis | Significant other observable inputs (Level 2) | Asset-backed securities
Assets
Fixed maturities available-for-sale:	1,676,750	1,312,379
Recurring basis | Significant other observable inputs (Level 2) | Residential mortgage-backed securities
Assets
Fixed maturities available-for-sale:	70,919	140,992
Recurring basis | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities
Assets
Fixed maturities available-for-sale:	1,386,952	1,225,282
Fixed maturities held-for-trading:	1,081	1,080
Recurring basis | Significant other observable inputs (Level 2) | Collateralized debt obligations
Assets
Fixed maturities available-for-sale:	728,770	361,527
Recurring basis | Significant unobservable inputs (Level 3)
Assets
Fixed maturities available-for-sale:	10,080	11,639
Total assets	10,080	11,639
Liabilities
Embedded derivatives - GLWB	10,221	5,712
Total liabilities	10,221	5,712
Recurring basis | Significant unobservable inputs (Level 3) | Corporate debt securities
Assets
Fixed maturities available-for-sale:	10,080	11,639
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 - Fair Value Measurements - Recurring basis Level 3 rollforward (Details) - Recurring basis - Level 3 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Fixed maturities available-for-sale, Corporate debt securities
Recurring Level 3 financial assets and liabilities
Balance at the beginning of the period	$ 10,703	$ 15,056	$ 11,639	$ 4,538
Net income (loss)	0	0	0	0
Other comprehensive income (loss)	166	245	83	720
Settlements	(432)	(594)	(1,275)	(1,787)
Transfers out of Level 3	(357)		(367)
Transfers into Level 3				11,236
Balance at the end of the period	10,080	14,707	10,080	14,707
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
Embedded Derivative Financial Instruments
Recurring Level 3 financial assets and liabilities
Balance at the beginning of the period	9,595	30,687	5,712	11,257
Net income (loss)	(626)	(590)	(4,509)	(20,020)
Other comprehensive income (loss)	0	0	0	0
Settlements	0		0	0
Transfers out of Level 3	0		0
Transfers into Level 3				0
Balance at the end of the period	10,221	31,277	10,221	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	$ (626)	$ (590)	$ (4,509)	$ (20,020)

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Fair Value Measurements - Fair Value Measurements - Level 3 unobservable inputs (Details) - Recurring basis - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Significant unobservable inputs used during the valuation of assets categorized within Level 3 of the recurring fair value measurements table
Embedded derivatives - GLWB	$ 10,221	$ 5,712
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	$ 10,221	$ 5,712
Level 3 | Internal model pricing | Minimum
Unobservable Input
Equity volatility	15.00%	15.00%
Swap curve	1.33%	0.75%
Base Lapse rate	1.00%	1.00%
Level 3 | Internal model pricing | Maximum
Unobservable Input
Equity volatility	28.00%	30.00%
Swap curve	2.54%	3.00%
Base Lapse rate	15.00%	15.00%

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Fair Value Measurements - Fair Value Measurements - Recurring not carried at FV (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Assets
Mortgage loans on real estate	$ 3,943,088	$ 3,558,826
Policy loans	4,073,511	4,019,648
Liabilities
Policyholders’ funds	245,007	285,554
Commercial paper	$ 99,868	99,049
Policyholders' funds, notice required to change policyholders' funds interest crediting rate (in days)	30 days
Minimum
Liabilities
Estimated liquidation period of underlying assets of the funds	1 year
Maximum
Liabilities
Estimated liquidation period of underlying assets of the funds	10 years
Carrying amount
Assets
Mortgage loans on real estate	$ 3,943,088	3,558,826
Policy loans	4,073,511	4,019,648
Limited partnership interests	40,433	29,345
Other investments	12,631	14,382
Liabilities
Annuity contract benefits without life contingencies	12,669,339	12,291,378
Policyholders’ funds	245,007	285,554
Commercial paper	99,868	99,049
Notes payable	534,538	531,092
Estimated fair value
Assets
Mortgage loans on real estate	4,020,555	3,574,240
Policy loans	4,073,511	4,019,648
Limited partnership interests	40,413	29,822
Other investments	43,002	44,687
Liabilities
Annuity contract benefits without life contingencies	12,641,064	12,129,631
Policyholders’ funds	245,007	285,554
Commercial paper	99,868	99,049
Notes payable	$ 565,903	$ 495,004

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Other Comprehensive Income - OCI - Changes in Accumulated Other comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other Comprehensive Income [Roll Forward]
Beginning balance				$ 2,012,321	$ 1,882,266
Other comprehensive income (loss) before reclassifications		$ 15,241	$ 19,389	182,947	455,843
Amounts reclassified from AOCI		(450)	(5,064)	2,108	(35,369)
Other comprehensive income (loss)	[1]	14,791	14,325	185,055	420,474
Ending balance		2,260,897	2,391,593	2,260,897	2,391,593
Unrealized holding gains / losses arising on fixed maturities, available-for- sale
Other Comprehensive Income [Roll Forward]
Beginning balance		550,776	855,034	311,748	339,520
Other comprehensive income (loss) before reclassifications		25,989	36,302	264,685	582,133
Amounts reclassified from AOCI		(1,630)	(5,503)	(1,298)	(35,820)
Other comprehensive income (loss)		24,359	30,799	263,387	546,313
Ending balance		575,135	885,833	575,135	885,833
Unrealized holding gains / losses arising on cash flow hedges
Other Comprehensive Income [Roll Forward]
Beginning balance		50,132	45,316	67,076	45,284
Other comprehensive income (loss) before reclassifications		(15,022)	(5,074)	(31,402)	(2,150)
Amounts reclassified from AOCI		(245)	(1,182)	(809)	(4,074)
Other comprehensive income (loss)		(15,267)	(6,256)	(32,211)	(6,224)
Ending balance		34,865	39,060	34,865	39,060
Future policy benefits, DAC and VOBA adjustments
Other Comprehensive Income [Roll Forward]
Beginning balance		(113,256)	(178,086)	(58,646)	(65,785)
Other comprehensive income (loss) before reclassifications		(1,285)	(11,839)	(55,895)	(124,140)
Amounts reclassified from AOCI		0	0	0	0
Other comprehensive income (loss)		(1,285)	(11,839)	(55,895)	(124,140)
Ending balance		(114,541)	(189,925)	(114,541)	(189,925)
Employee benefit plan adjustment
Other Comprehensive Income [Roll Forward]
Beginning balance		(81,513)	(82,677)	(84,303)	(85,581)
Other comprehensive income (loss) before reclassifications		5,559	0	5,559	0
Amounts reclassified from AOCI		1,425	1,621	4,215	4,525
Other comprehensive income (loss)		6,984	1,621	9,774	4,525
Ending balance		(74,529)	(81,056)	(74,529)	(81,056)
AOCI Attributable to Parent
Other Comprehensive Income [Roll Forward]
Beginning balance		406,139	639,587	235,875	233,438
Other comprehensive income (loss)				185,055	420,474
Ending balance		$ 420,930	$ 653,912	$ 420,930	$ 653,912

[1] Other comprehensive income includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(2,258) and $(959) for the three months ended September 30, 2017, and 2016, respectively and $(3,867) and $(5,326) for the nine months ended September 30, 2017, and 2016, respectively.

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Other Comprehensive Income - OCI - Composition of Other comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Before-tax amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale		$ 39,983	$ 55,849	$ 407,208	$ 895,589
Unrealized holding gains (losses), net, arising on cash flow hedges		(23,111)	(7,805)	(48,311)	(3,307)
Reclassification adjustment for (gains) losses, net, realized in net income		(2,885)	(10,284)	(3,242)	(61,375)
Net unrealized gains (losses) related to investments		13,987	37,760	355,655	830,907
Future policy benefits, DAC and VOBA adjustments		(1,977)	(18,214)	(85,992)	(190,985)
Net unrealized gains (losses)		12,010	19,546	269,663	639,922
Employee benefit plan adjustment		10,744	2,494	15,036	6,962
Other comprehensive income before income taxes		22,754	22,040	284,699	646,884
Tax (expense) benefit
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale		(13,994)	(19,547)	(142,523)	(313,456)
Unrealized holding gains (losses), net, arising on cash flow hedges		8,089	2,731	16,909	1,157
Reclassification adjustment for (gains) losses, net, realized in net income		1,010	3,599	1,135	21,481
Net unrealized gains (losses) related to investments		(4,895)	(13,217)	(124,479)	(290,818)
Future policy benefits, DAC and VOBA adjustments		692	6,375	30,097	66,845
Net unrealized gains (losses)		(4,203)	(6,842)	(94,382)	(223,973)
Employee benefit plan adjustment		(3,760)	(873)	(5,262)	(2,437)
Other comprehensive income (loss)		(7,963)	(7,715)	(99,644)	(226,410)
Net-of-tax amount
Unrealized holding gains (losses), net, arising on fixed maturities, available-for-sale		25,989	36,302	264,685	582,133
Unrealized holding gains (losses), net, arising on cash flow hedges		(15,022)	(5,074)	(31,402)	(2,150)
Reclassification adjustment for (gains) losses, net, realized in net income		(1,875)	(6,685)	(2,107)	(39,894)
Net unrealized gains (losses) related to investments		9,092	24,543	231,176	540,089
Future policy benefits, DAC and VOBA adjustments		(1,285)	(11,839)	(55,895)	(124,140)
Net unrealized gains (losses)		7,807	12,704	175,281	415,949
Employee benefit plan adjustment		6,984	1,621	9,774	4,525
Other comprehensive income (loss)	[1]	$ 14,791	$ 14,325	$ 185,055	$ 420,474

[1] Other comprehensive income includes the non-credit component of impaired gains (losses), net, on fixed maturities available-for-sale in the amounts of $(2,258) and $(959) for the three months ended September 30, 2017, and 2016, respectively and $(3,867) and $(5,326) for the nine months ended September 30, 2017, and 2016, respectively.

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Other Comprehensive Income - OCI - Reclassifications out of Accumulated Other Comprehensive Income (Loss)(Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Reclassifications out of accumulated other comprehensive income (loss)
Other realized investment (gains) losses, net	$ (16,830)	$ (33,374)	$ (27,297)	$ (107,193)
Net investment income	(300,582)	(291,539)	(911,274)	(979,080)
Interest expense	(7,811)	(7,648)	(23,087)	(26,051)
Total before tax	(68,269)	(55,312)	(196,210)	(291,482)
Tax expense or benefit	(21,688)	(15,295)	(64,973)	(79,043)
Net income	46,581	40,017	131,237	212,439
Net of tax	(450)	(5,064)
Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Net of tax			2,108	(35,369)
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	(2,508)	(8,465)	(1,997)	(55,107)
Total before tax	(2,508)	(8,465)	(1,997)	(55,107)
Tax expense or benefit	(878)	(2,962)	(699)	(19,287)
Net income	1,630	5,503	1,298	35,820
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	(1,067)	(2,911)	(3,602)	(7,943)
Interest expense	690	1,092	2,357	1,675
Total before tax	(377)	(1,819)	(1,245)	(6,268)
Tax expense or benefit	(132)	(637)	(436)	(2,194)
Net income	245	1,182	809	4,074
Amortization of employee benefit plan items | Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Total before tax	2,193	2,494	6,485	6,962
Tax expense or benefit	(768)	(873)	(2,270)	(2,437)
Net of tax	1,425	1,621	4,215	4,525
Prior service (benefits) | Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Total before tax	109	150	(37)	452
Actuarial losses | Amount reclassified from accumulated other comprehensive income (loss)
Reclassifications out of accumulated other comprehensive income (loss)
Total before tax	$ 2,302	$ 2,644	$ 6,448	$ 7,414

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Employee Benefit Plans Employee Benefits Plans - Net Periodic Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Components of net periodic cost (benefit):
Service cost	$ 2,544	$ 3,839	$ 2,516	$ 7,241
Interest cost	6,711	7,012	20,139	20,814
Expected return on plan assets	(4,980)	(6,237)	(15,216)	(18,793)
Amortization of unrecognized prior service costs (benefits)	(109)	(150)	37	(452)
Amortization of losses (gains) from earlier periods	2,302	2,644	6,448	7,414
Net periodic cost (benefit)	6,468	7,108	13,924	16,224
Defined Benefit Pension Plan
Components of net periodic cost (benefit):
Service cost	2,170	3,417	1,436	6,087
Interest cost	6,114	6,384	18,356	18,948
Expected return on plan assets	(4,980)	(6,237)	(15,216)	(18,793)
Amortization of unrecognized prior service costs (benefits)	0	0	0	0
Amortization of losses (gains) from earlier periods	2,241	2,726	6,639	7,695
Net periodic cost (benefit)	5,545	6,290	11,215	13,937
Post-Retirement Medical Plan
Components of net periodic cost (benefit):
Service cost	378	349	1,092	935
Interest cost	192	184	568	534
Expected return on plan assets	0	0	0	0
Amortization of unrecognized prior service costs (benefits)	(235)	(275)	(339)	(827)
Amortization of losses (gains) from earlier periods	75	(67)	(151)	(237)
Net periodic cost (benefit)	410	191	1,170	405
Expected Employer obligation for the year	155	212	531	603
Supplemental Executive Retirement Plan
Components of net periodic cost (benefit):
Service cost	(4)	73	(12)	219
Interest cost	405	444	1,215	1,332
Expected return on plan assets	0	0	0	0
Amortization of unrecognized prior service costs (benefits)	126	125	376	375
Amortization of losses (gains) from earlier periods	(14)	(15)	(40)	(44)
Net periodic cost (benefit)	513	627	1,539	1,882
Expected Employer obligation for the year	$ 834	$ 834	$ 2,502	$ 2,502

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Employee Benefit Plans Employee Benefit Plans - Additional Information (Details)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2017 USD ($) hour	Sep. 30, 2017 USD ($) hour	Dec. 31, 2017 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Number of hours | hour	1,000	1,000
Curtailment gain		$ 17,244,000
Unrecognized prior service cost	$ 1,852,000
Actuarial loss	$ 15,392,000
Net curtailment gain including recognition of prior service cost and actuarial loss		$ 0
Scenario, Forecast | Defined Benefit Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer			$ 0
Scenario, Forecast | Post-Retirement Medical Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer			708,000
Scenario, Forecast | Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer			$ 3,336,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Tax Contingency [Line Items]
Current expense (benefit)	$ 27,585	$ (1,399)	$ 58,845	$ 41,725
Deferred (benefit) expense	(5,897)	16,694	6,128	37,318
Total income tax provision	21,688	$ 15,295	$ 64,973	$ 79,043
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			(3.90%)	(2.70%)
Tax credits			(0.30%)	(7.30%)
State income taxes, net of federal benefit			2.80%	2.50%
Other, net			(0.50%)	(0.40%)
Effective income tax rate			33.10%	27.10%
Reconciliation of unrecognized tax benefits
Increase (decrease) in unrecognized tax benefit			$ 4,694	$ (5,824)
Minimum
Reconciliation of unrecognized tax benefits
Additional increase to unrecognized tax benefits	6,000		6,000
Maximum
Reconciliation of unrecognized tax benefits
Additional increase to unrecognized tax benefits	$ 7,000		$ 7,000

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Segment Information Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) segment	Sep. 30, 2016 USD ($)
Financial information of the segments
Number of reportable segments | segment			3
Revenues
Premium income	$ 145,504	$ 146,100	$ 365,408	$ 377,845
Fee income	264,304	246,413	786,758	709,844
Other revenue	3,322	3,228	9,367	9,747
Net investment income	300,582	291,539	911,274	979,080
Realized investment gains (losses), net	13,861	33,374	24,171	106,657
Total revenues	727,573	720,654	2,096,978	2,183,173
Benefits and expenses:
Policyholder benefits	344,241	346,861	953,213	946,876
Operating expenses	315,063	318,481	947,555	944,815
Total benefits and expenses	659,304	665,342	1,900,768	1,891,691
Income before income taxes	68,269	55,312	196,210	291,482
Income tax expense	21,688	15,295	64,973	79,043
Net income	46,581	40,017	131,237	212,439
Individual Markets
Revenues
Premium income	125,757	126,770	302,017	311,110
Fee income	27,780	23,553	82,960	71,823
Other revenue	0	0	0	0
Net investment income	185,447	185,747	562,440	619,633
Realized investment gains (losses), net	2,389	11,026	7,010	37,602
Total revenues	341,373	347,096	954,427	1,040,168
Benefits and expenses:
Policyholder benefits	272,396	280,821	740,655	749,790
Operating expenses	41,332	35,948	127,137	127,181
Total benefits and expenses	313,728	316,769	867,792	876,971
Income before income taxes	27,645	30,327	86,635	163,197
Income tax expense	9,398	10,102	29,579	55,183
Net income	18,247	20,225	57,056	108,014
Empower Retirement
Revenues
Premium income	764	605	1,908	1,311
Fee income	234,957	221,342	698,850	633,679
Other revenue	3,322	3,228	9,367	9,747
Net investment income	103,334	94,383	313,710	321,972
Realized investment gains (losses), net	11,472	21,565	17,168	68,278
Total revenues	353,849	341,123	1,041,003	1,034,987
Benefits and expenses:
Policyholder benefits	53,736	51,730	152,067	153,587
Operating expenses	255,623	263,327	760,564	761,827
Total benefits and expenses	309,359	315,057	912,631	915,414
Income before income taxes	44,490	26,066	128,372	119,573
Income tax expense	13,641	5,442	42,063	20,579
Net income	30,849	20,624	86,309	98,994
Other
Revenues
Premium income	18,983	18,725	61,483	65,424
Fee income	1,567	1,518	4,948	4,342
Other revenue	0	0	0	0
Net investment income	11,801	11,409	35,124	37,475
Realized investment gains (losses), net	0	783	(7)	777
Total revenues	32,351	32,435	101,548	108,018
Benefits and expenses:
Policyholder benefits	18,109	14,310	60,491	43,499
Operating expenses	18,108	19,206	59,854	55,807
Total benefits and expenses	36,217	33,516	120,345	99,306
Income before income taxes	(3,866)	(1,081)	(18,797)	8,712
Income tax expense	(1,351)	(249)	(6,669)	3,281
Net income	$ (2,515)	$ (832)	$ (12,128)	$ 5,431

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Commitments and Contingencies - Commitments and Contingencies - Additional Information (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) letter_of_credit	Dec. 31, 2016 USD ($)
Commitments
Unfunded commitments related to cost basis limited partnership interests, due in one year	$ 76,617,000	$ 93,440,000
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	1,141,440,000
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

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Commitments and Contingencies - Commitments and Contingencies - Unfunded Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Due in less than one year	$ 464,957	$ 438,458
Due within one to three years	2,239	0
Total	$ 467,196	$ 438,458