Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Summary of Company's fair value hierarchy measured at recurring basis

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At March 31, 2015, these Level 3 invested assets comprised 2.1% of the Company’s total investment portfolio fair value.

					Fair Value Measurements at
	Carrying		Fair		Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
March 31, 2015
Financial Assets
Investments
Fixed maturities
U.S. Government and federally
sponsored agency obligations:
Mortgage-backed securities	$	541,360	$	541,360	$	-	$	541,360	$	-
Other, including
U.S. Treasury securities		576,469		576,469		17,995		558,474		-
Municipal bonds		1,685,086		1,685,086		-		1,671,201		13,885
Foreign government bonds		65,081		65,081		-		65,081		-
Corporate bonds		2,841,062		2,841,062		10,369		2,758,415		72,278
Other mortgage-backed securities		1,356,741		1,356,741		-		1,284,147		72,594
Total fixed maturities		7,065,799		7,065,799		28,364		6,878,678		158,757
Equity securities		105,066		105,066		90,347		14,713		6
Short-term investments		181,004		181,004		181,004		-		-
Other investments		12,412		12,412		-		12,412		-
Totals		7,364,281		7,364,281		299,715		6,905,803		158,763
Separate Account
(variable annuity) assets (1)		1,865,240		1,865,240		1,865,240		-		-
Financial Liabilities
Other policyholder funds,
embedded derivatives		22,040		22,040		-		-		22,040

December 31, 2014
Financial Assets
Investments
Fixed maturities
U.S. Government and federally
sponsored agency obligations:
Mortgage-backed securities	$	535,726	$	535,726	$	-	$	535,726	$	-
Other, including
U.S. Treasury securities		538,199		538,199		17,857		520,342		-
Municipal bonds		1,647,822		1,647,822		-		1,634,194		13,628
Foreign government bonds		59,536		59,536		-		59,536		-
Corporate bonds		2,834,749		2,834,749		10,524		2,749,508		74,717
Other mortgage-backed securities		1,277,058		1,277,058		-		1,194,109		82,949
Total fixed maturities		6,893,090		6,893,090		28,381		6,693,415		171,294
Equity securities		110,655		110,655		92,140		18,509		6
Short-term investments		142,039		142,039		142,039		-		-
Other investments		12,458		12,458		-		12,458		-
Totals		7,158,242		7,158,242		262,560		6,724,382		171,300
Separate Account
(variable annuity) assets (1)		1,813,557		1,813,557		1,813,557		-		-
Financial Liabilities
Other policyholder funds,
embedded derivatives		20,049		20,049		-		-		20,049

___________________________

(1)	Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets.

Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis

The following table presents reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis.

																							Financial
		Financial Assets																					Liabilities(1)
	Municipal Bonds				Corporate Bonds				Other Mortgage- Backed Securities				Total Fixed Maturities				Equity Securities			Total

Beginning balance, January 1, 2015		$	13,628			$	74,717			$	82,949			$	171,294			$	6	$	171,300		$	20,049
Transfers into Level 3 (2)			-				1,895				461				2,356				-		2,356			-
Transfers out of Level 3 (2)			-				-				(9,664	)			(9,664	)			-		(9,664	)		-
Total gains or losses
Net realized gains (losses)
included in net income			-				-				-				-				-		-			(439	)
Net unrealized gains (losses)
included in other
comprehensive income			380				352				3				735				-		735			-
Purchases			-				-				-				-				-		-			-
Issuances			-				-				-				-				-		-			2,964
Sales			-				-				-				-				-		-			-
Settlements			-				-				-				-				-		-			-
Paydowns, maturities
and distributions			(123	)			(4,686	)			(1,155	)			(5,964	)			-		(5,964	)		(534	)
Ending balance, March 31, 2015		$	13,885			$	72,278			$	72,594			$	158,757			$	6	$	158,763		$	22,040

Beginning balance, January 1, 2014		$	2,694			$	60,826			$	46,009			$	109,529			$	6	$	109,535		$	-
Transfers into Level 3 (2)			10,055				-				7,109				17,164				-		17,164			-
Transfers out of Level 3 (2)			-				-				(519	)			(519	)			-		(519	)		-
Total gains or losses
Net realized gains (losses)
included in net income			-				-				-				-				-		-			12
Net unrealized gains (losses)
included in other
comprehensive income			98				1,014				184				1,296				-		1,296			-
Purchases			-				-				-				-				-		-			-
Issuances			-				-				-				-				-		-			2,735
Sales			-				-				-				-				-		-			-
Settlements			-				-				-				-				-		-			-
Paydowns, maturities
and distributions			(68	)			(1,636	)			(232	)			(1,936	)			-		(1,936	)		-
Ending balance, March 31, 2014		$	12,779			$	60,204			$	52,551			$	125,534			$	6	$	125,540		$	2,747

________________________________

(1)

Represents embedded derivatives, all related to the Company’s fixed indexed annuity (“FIA”) products, reported in Other Policyholder Funds in the Company’s Consolidated Balance Sheets.

(2)

Transfers into and out of Level 3 during the three months ended March 31, 2015 and 2014 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

Carrying value, fair value and fair value hierarchy of financial assets and financial liabilities

The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities.

					Fair Value Measurements at
	Carrying		Fair		Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
March 31, 2015
Financial Assets
Investments
Other investments	$	145,574	$	149,965	$	-	$	-	$	149,965
Financial Liabilities
Fixed annuity contract liabilities		3,847,694		3,762,743		-		-		3,762,743
Policyholder account balances on
interest-sensitive life contracts		77,051		81,079		-		-		81,079
Other policyholder funds		585,582		585,582		-		500,111		85,471
Short-term debt		38,000		38,000		-		38,000		-
Long-term debt		199,955		207,315		207,315		-		-
Other liabilities, repurchase
agreement obligations		-		-		-		-		-

December 31, 2014
Financial Assets
Investments
Other investments	$	145,409	$	149,792	$	-	$	-	$	149,792
Financial Liabilities
Fixed annuity contract liabilities		3,774,457		3,691,123		-		-		3,691,123
Policyholder account balances on
interest-sensitive life contracts		77,415		81,461		-		-		81,461
Other policyholder funds		586,689		586,689		-		500,080		86,609
Short-term debt		38,000		38,000		-		38,000		-
Long-term debt		199,939		209,495		209,495		-		-
Other liabilities, repurchase
agreement obligations		-		-		-		-		-

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References+ Details

- Definition

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

+ References+ Details