The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

			June 30, 2013
											Other-than-
					Gross		Gross				temporary
			Amortized		Unrealized		Unrealized		Fair		Impairments
			Cost		Gains		Losses		Value		in AOCI (3)
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S.
government authorities and agencies			$	91,273	$	8,156	$	806	$	98,623	$	-
Obligations of U.S. states and their political
subdivisions				81,930		2,242		5,217		78,955		-
Foreign government bonds				20,424		4,196		-		24,620		-
Public utilities				708,856		35,095		21,868		722,083		-
Redeemable preferred stock				7,041		328		140		7,229		-
All other corporate securities				4,100,515		190,535		91,131		4,199,919		(318)
Asset-backed securities (1)				316,495		16,538		1,945		331,088		(8,034)
Commercial mortgage-backed securities				541,642		27,080		10,731		557,991		-
Residential mortgage-backed securities (2)				301,325		12,837		5,542		308,620		(1,077)
		Total fixed maturities, available-for-sale	$	6,169,501	$	297,007	$	137,380	$	6,329,128	$	(9,429)

Equity securities, available-for-sale
Common Stocks:
	Industrial, miscellaneous & other		$	70	$	43	$	-	$	113
	Mutual Funds			10,660		4		699		9,965
Non-redeemable preferred stocks				1,340		126		-		1,466
		Total equity securities, available-for-sale	$	12,070	$	173	$	699	$	11,544

The amortized cost and fair value of fixed maturities by contractual maturities at June 30, 2013, are as follows:

		Available-for-Sale
		Amortized		Fair
		Cost		Value
		(in thousands)
Due in one year or less		$	490,196	$	501,413
Due after one year through five years			1,262,286		1,359,230
Due after five years through ten years			1,522,653		1,565,817
Due after ten years			1,734,904		1,704,969
Asset-backed securities			316,495		331,088
Commercial mortgage-backed securities			541,642		557,991
Residential mortgage-backed securities			301,325		308,620
	Total	$	6,169,501	$	6,329,128

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds, equity security proceeds, and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

		Three Months Ended				Six Months Ended
		June 30,				June 30,

		2013		2012		2013		2012

		(in thousands)
Fixed maturities, available-for-sale
	Proceeds from sales	$	197,132	$	19,051	$	242,318	$	58,190
	Proceeds from maturities/repayments		258,923		296,563		433,247		493,068
	Gross investment gains from sales, prepayments and maturities		5,766		7,783		39,154		8,754
	Gross investment losses from sales and maturities		(1,103)		(590)		(2,834)		(706)

Equity securities, available-for-sale
	Proceeds from sales	$	-	$	91	$	2,352	$	91
	Proceeds from maturities/repayments		3		-		3		-
	Gross investment gains from sales		-		27		854		27
	Gross investment losses from sales		-		(34)		-		(34)

Fixed maturity and equity security impairments
	Net writedowns for other-than-temporary impairment losses on fixed maturities
	recognized in earnings (1)	$	(212)	$	(3,719)	$	(1,609)	$	(4,285)
	Writedowns for other-than-temporary impairment losses on equity securities		-		(721)		(56)		(922)

As discussed in Note 2, a portion of certain other-than-temporary impairment (“OTTI”) losses on fixed maturity securities are recognized in OCI. For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts.

Credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the OTTI loss was recognized in OCI

		Three Months Ended			Six Months Ended
				June 30,			June 30,
				2013			2013
		(in thousands)

Balance, beginning of period		$	15,716		$	27,702
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold
	during the period		(1,287)			(13,674)
Credit loss impairments previously recognized on securities impaired to fair value during the period (1)			-			-
Credit loss impairment recognized in the current period on securities not previously impaired			-			14
Additional credit loss impairments recognized in the current period on securities previously impaired			212			709
Increases due to the passage of time on previously recorded credit losses			219			441
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be
	collected		(20)			(352)
Balance, end of period		$	14,840		$	14,840

(1) Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security's amortized cost.

The following table sets forth the composition of trading account assets, at fair value as of the dates indicated:

	June 30, 2013				December 31, 2012
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(in thousands)
Fixed maturities	$	19,274	$	19,680	$	7,647	$	8,099
Equity securities (1)		3,083		3,959		3,083		3,277
Total trading account assets	$	22,357	$	23,639	$	10,730	$	11,376

The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Other income” was $0.2 million of losses during both the three months ended June 30, 2013 and 2012, and $0.6 million of gains and $0.3 million of losses during the six months ended June 30, 2013 and 2012, respectively.

The Company's commercial mortgage and other loans are comprised as follows, as of the dates indicated:

		June 30, 2013				December 31, 2012
		Amount	% of			Amount	% of
		(in thousands)	Total			(in thousands)	Total

Commercial mortgage and other loans by property type:
Industrial	$	262,068	17.3	%	$	273,900	18.6	%
Retail		478,038	31.6			461,939	31.4
Apartments/Multi-Family		267,246	17.7			239,623	16.3
Office		234,253	15.5			237,566	16.2
Hospitality		56,982	3.8			50,052	3.4
Other		101,761	6.7			89,548	6.1
Total commercial mortgage loans		1,400,348	92.6			1,352,628	92.0
Agricultural property loans		111,757	7.4			117,377	8.0
Total commercial and agricultural mortgage loans by property type		1,512,105	100.0	%		1,470,005	100.0	%
Valuation allowance		(10,019)				(6,028)
Total net commercial and agricultural mortgage loans by property type		1,502,086				1,463,977

Other Loans
Uncollateralized loans		5,360				-
Total other loans		5,360				-
Total commercial mortgage and other loans	$	1,507,446			$	1,463,977

The commercial and agricultural mortgage loans are geographically dispersed throughout the United States with the largest concentrations in California (19%), New Jersey (12%), and Texas (10%) at June 30, 2013.

Activity in the allowance for losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:


	June 30, 2013			December 31, 2012
	(in thousands)
Allowance for losses, beginning of year	$	6,028	$	12,813
Addition to / (release of) allowance of losses		3,991		(1,551)
Charge-off net of recoveries		-		(5,234)
Allowance for losses, end of year (1)	$	10,019	$	6,028

The following tables set forth the allowance for credit losses and the recorded investment in commercial and agricultural mortgage loans as of the dates indicated:

	June 30, 2013		December 31, 2012
	Total Loans
	(in thousands)
Allowance for Credit Losses:
Ending balance: individually evaluated for impairment (1)	$	3,554	$	372
Ending balance: collectively evaluated for impairment (2)		6,465		5,656
Total ending balance	$	10,019	$	6,028

Recorded Investment: (3)
Ending balance gross of reserves: individually evaluated for impairment (1)	$	13,942	$	6,415
Ending balance gross of reserves: collectively evaluated for impairment (2)		1,503,523		1,463,590
Total ending balance, gross of reserves	$	1,517,465	$	1,470,005

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. Impaired commercial mortgage and other loans identified in management's specific review of probable loan losses and the related allowance for losses, as of June 30, 2013 and December 31, 2012, had a recorded investment and unpaid principal balance of $13.9 million and $6.4 million and related allowance of $3.6 million and $0.4 million, respectively, primarily related to the hospitality, retail and other property types. At both June 30, 2013 and December 31, 2012, the Company held no impaired agricultural or uncollateralized loans. Net investment income recognized on these loans totaled $0.1 million for the period ending June 30, 2013, and $0.5 million for the year ended December 31, 2012.

Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans' expected future cash flows equals or exceeds the recorded investment. As of both June 30, 2013 and December 31, 2012, the Company held no such loans. See Note 2 for information regarding the Company's accounting policies for non-performing loans.

As described in Note 2 loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage and other loans. As of both June 30, 2013 and December 31, 2012, 96% of the $1.5 billion recorded investment had a loan-to-value ratio of less than 80%. As of June 30, 2013 and December 31, 2012, 94% and 96%, respectively, of the recorded investment had a debt service coverage ratio of 1.0X or greater. As of June 30, 2013, approximately $90 million or 6% of the recorded investment had a loan-to-value ratio greater than 100% or debt service coverage ratio less than 1.0X reflecting loans where the mortgage amount exceeds the collateral value or where current debt payments are greater than income from property operations; none of which related to agricultural or uncollateralized loans. As of December 31, 2012, approximately $59 million or 4% of the recorded investment had a loan-to-value ratio greater than 100% or debt service coverage ratio less than 1.0X; none of which related to agricultural or uncollateralized loans.

As of June 30, 2013 and December 31, 2012, all commercial mortgage and other loans were in current status, with the exception of $6.4 million at both June 30, 2013 and December 31, 2012, that were classified as past due, primarily related to other property types. As of June 30, 2013 and December 31, 2012, $13.9 million and $6.4 million, respectively, of commercial mortgage and other loans, were in non-accrual status based upon the recorded investment gross of allowance for credit losses, primarily related to hospitality, retail and other property types. Nonaccrual loans are those on which the accrual of interest has been suspended after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability and loans for which a loan specific reserve has been established. See Note 2 for further discussion regarding nonaccrual status loans. The Company defines current in its aging of past due commercial mortgage and agricultural loans as less than 30 days past due.

For the three months ended June 30, 2013 and December 31, 2012, there were no commercial mortgage and other loans sold or acquired.

Commercial mortgage and other loans are occasionally restructured in a troubled debt restructuring. These restructurings generally include one or more of the following: full or partial payoffs outside of the original contract terms: changes to interest rates; extensions of maturity; or additions or modifications to covenants. Additionally, the Company may accept assets in full or partial satisfaction of the debt as part of a troubled debt restructuring. When restructurings occur, they are evaluated individually to determine whether the restructuring or modification constitutes a “troubled debt restructuring” as defined by authoritative accounting guidance. The Company has no outstanding investment related to commercial mortgage and other loans that have been restructured in a troubled debt restructuring.

The Company's commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of June 30, 2013 and December 31, 2012, the additional funds the Company has committed to provide to borrowers involved in a troubled debt restructuring is not material. During the six months ended June 30, 2013 and 2012, respectively, there were no new troubled debt restructurings related to commercial mortgage loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective period.

Net investment income for the three and six months ended June 30, 2013 and 2012, were from the following sources:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
		(in thousands)
Fixed maturities, available-for-sale		$	71,368	$	68,077	$	139,877	$	135,960
Equity securities, available-for-sale			-		26		1		33
Trading account assets			176		298		309		616
Commercial mortgage and other loans			21,219		21,218		41,923		42,305
Policy loans			14,468		14,377		28,605		28,475
Short-term investments and cash equivalents			172		223		416		542
Other long-term investments			2,554		5,587		6,256		8,244
Gross investment income			109,957		109,806		217,387		216,175
Less: investment expenses			(4,925)		(4,484)		(9,847)		(8,996)
	Net investment income	$	105,032	$	105,322	$	207,540	$	207,179

Realized investment gains (losses), net, for the three and six months ended June 30, 2013 and 2012 were from the following sources:

The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the six months ended June 30, 2013 and 2012 are as follows:

	Accumulated Other Comprehensive Income (Loss)
		Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2012	$	258	$	267,204	$	267,461
Change in other comprehensive income
before reclassifications		(138)		(240,516)		(240,654)
Amounts reclassified from AOCI		-		(35,509)		(35,509)
Income tax benefit (expense)		48		96,608		96,656
Balance, June 30, 2013	$	168	$	87,787	$	87,954


	Accumulated Other Comprehensive Income (Loss)
		Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2011	$	133	$	213,495	$	213,628
Change in component during period (2)		(143)		31,835		31,692
Balance, June 30, 2012	$	(9)	$	245,330	$	245,320

Reclassifications out of Accumulated Other Comprehensive Income (Loss) ("AOCI")

	Three Months Ended		Six Months Ended
	June 30, 2013		June 30, 2013
	(in thousands)
Amounts reclassified from AOCI (1)(2):


Net unrealized investment gains (losses):
Cash flow hedges - Currency/Interest rate (3)	$	254	$	538
Net unrealized investment gains (losses) on available-for-sale securities (4)		4,197		34,971
Total net unrealized investment gains (losses)		4,451		35,509

Total reclassifications for the period	$	4,451	$	35,509

Net unrealized investment gains and losses on securities classified as “available-for-sale” and certain other long-term investments and other assets are included in the Company's Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

		Net Unrealized Gains (Losses) on Investments		Deferred Policy Acquisition Costs and Other Costs		Future Policy Benefits and Policy Holder Account Balances		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
		(in thousands)
Balance, December 31, 2012		$	(618)	$	295	$	563	$	(115)	$	125
Net investment gains (losses) on investments
	arising during the period		527		-		-		(184)		343
Reclassification adjustment for (gains) losses							.
	included in net income		3,370		-		-		(1,180)		2,190
Reclassification adjustment for OTTI losses
excluded from net income(1)			3		-		-		(1)		2
Impact of net unrealized investment (gains)
	losses on deferred policy acquisition costs		-		(2,437)		-		853		(1,584)
Impact of net unrealized investment (gains)
	losses on future policy benefits
	and policyholders' account balance		-		-		313		(110)		203
Balance, June 30, 2013		$	3,282	$	(2,142)	$	876	$	(737)	$	1,279

		Net Unrealized Gains (Losses) on Investments(1)		Deferred Policy Acquisition Costs and Other Costs		Future Policy Benefits and Policy Holder Account Balances		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
		(in thousands)
Balance, December 31, 2012		$	505,100	$	(220,208)	$	125,833	$	(143,646)	$	267,079
Net investment gains (losses) on investments
	arising during the period		(282,559)		-		-		98,896		(183,663)
Reclassification adjustment for (gains) losses
	included in net income		(38,879)		-		-		13,608		(25,271)
Reclassification adjustment for OTTI losses
	excluded from net income(2)		(3)		-		-		1		(2)
Impact of net unrealized investment (gains)
	losses on deferred policy acquisition costs		-		152,905		-		(53,517)		99,388
Impact of net unrealized investment (gains)
	losses on future policy benefits
	and policyholders' account balances		-		-		(109,266)		38,243		(71,023)
Balance, June 30, 2013		$	183,659	$	(67,303)	$	16,567	$	(46,415)	$	86,508

The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated:

		June 30,		December 31,
		2013		2012
		(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized		$	3,282	$	(618)
Fixed maturity securities, available-for-sale - all other			156,343		474,128
Equity securities, available-for-sale			(526)		1,208
Derivatives designated as cash flow hedges (1)			5,766		147
Other investments			22,076		29,617
Net unrealized gains (losses) on investments		$	186,941	$	504,482

(1)	See Note 5 for more information on cash flow hedges.

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

			June 30, 2013
			Less than twelve months				Twelve months or more				Total
			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of
	U.S. government authorities and agencies		$	17,884	$	806	$	-	$	-	$	17,884	$	806
Obligations of U.S. states and their political subdivisions				54,992		5,217		-		-		54,992		5,217
Foreign government bonds				-		-		-		-		-		-
Corporate securities				1,808,637		110,441		27,547		2,698		1,836,184		113,139
Asset-backed securities				13,182		76		12,684		1,869		25,866		1,945
Commercial mortgage-backed securities				144,191		10,725		336		6		144,527		10,731
Residential mortgage-backed securities				151,825		5,494		3,536		48		155,361		5,542
		Total	$	2,190,711	$	132,759	$	44,103	$	4,621	$	2,234,814	$	137,380

			December 31, 2012
			Less than twelve months				Twelve months or more				Total
			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of
	U.S. government authorities and agencies		$	4,338	$	10	$	-	$	-	$	4,338	$	10
Obligations of U.S. states and their political subdivisions				21,128		485		-		-		21,128		485
Foreign government bonds				-		-		-		-		-		-
Corporate securities				290,127		7,070		18,221		744		308,348		7,814
Asset-backed securities				44,821		76		24,997		6,070		69,818		6,146
Commercial mortgage-backed securities				12,549		60		521		9		13,070		69
Residential mortgage-backed securities				20,276		164		4,347		72		24,623		236
		Total	$	393,239	$	7,865	$	48,086	$	6,895	$	441,325	$	14,760

The gross unrealized losses, related to fixed maturities at June 30, 2013 and December 31, 2012 are composed of $131 million and $9 million, respectively, related to high or highest quality securities based on National Association of Insurance Commissioners, or “NAIC”, or equivalent rating and $6 million and $6 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At June 30, 2013, $1 million of the gross unrealized losses represented declines in value of greater than 20%, none of which had been in that position for less than six months, as compared to $6 million at December 31, 2012 that represented declines in value of greater than 20%, $0 million of which had been in that position for less than six months. At June 30, 2013 and December 31, 2012, $5 million and $7 million respectively, of gross unrealized losses of twelve months or more were concentrated in asset-backed securities and corporate securities. In accordance with its policy described in Note 2, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at June 30, 2013 and December 31, 2012. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At June 30, 2013, the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before the anticipated recovery of its remaining amortized cost basis.

At both June 30, 2013 and December 31, 2012, less than $1 million of the gross unrealized losses related to equity securities, represented declines in value of greater than 20%, none of which have been in that position for less than six months. In accordance with its policy described in Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these equity securities was not warranted at June 30, 2013 or December 31, 2012.

Affiliate	Date Issued		Amount of Notes - June 30, 2013		Amount of Notes - December 31, 2012	Interest Rate	Date of Maturity
(in thousands)
PFI	11/15/2010	$	66,000	$	66,000	3.01%	11/13/2015
PFI	6/20/2011		150,000		200,000	1.64% - 3.17%	6/2013 - 6/2016
PFI	12/15/2011		212,000		212,000	2.65% - 3.61%	12/2013 - 12/2016
PFI	12/16/2011		44,000		44,000	2.65% - 3.61%	12/2013 - 12/2016
PFI	12/20/2012		267,000		267,000	1.37%	12/15/2015
Prudential Insurance	12/20/2010		204,000		204,000	3.47%	12/21/2015
Washington Street Investment	6/20/2012		316,000		395,000	1.15% - 3.02%	6/2013 - 6/2017
Washington Street Investment	12/17/2012		330,000		330,000	0.95% - 1.87%	12/2013 - 12/2017
Washington Street Investment	12/17/2012		65,000		65,000	0.95% - 1.87%	12/2013 - 12/2017
Pru Funding, LLC	6/21/2013		15,000		-	0.20%	7/3/2013
Pru Funding, LLC	6/20/2013		53,000		-	0.20%	7/11/2013
Pru Funding, LLC	6/25/2013		3,000		-	0.20%	7/10/2013
Total Loans Payable to Affiliates		$	1,725,000	$	1,783,000