Investments (Tables)

12 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

The components of net investment income for the following periods were:

	Year Ended December 31,
		2015			2014			2013

Fixed maturities	$	326,207		$	317,756		$	304,024
Equity securities		4,355			4,849			3,698
Short-term and other investments		9,187			8,459			8,242
Other invested assets (equity method investments)		1,984			7,229			5,902
Total investment income		341,733			338,293			321,866
Investment expenses		(9,133	)		(8,478	)		(8,256	)
Net investment income	$	332,600		$	329,815		$	313,610

Summary of realized investment gains (losses)

Net realized investment gains (losses) for the following periods were:

	Year Ended December 31,
		2015		2014			2013

Fixed maturities	$	10,289	$	8,150		$	18,480
Equity securities		1,378		2,793			3,765
Short-term investments and other		1,046		(26	)		-
Net realized investment gains	$	12,713	$	10,917		$	22,245

Unrealized gains and losses on fixed maturities and equity securities

The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (loss) (“AOCI”) of all fixed maturities and equity securities in the portfolio were as follows:

	Amortized			Unrealized		Unrealized		Fair		OTTI in
	Cost/Cost			Gains		Losses		Value		AOCI (1)
December 31, 2015
Fixed maturity securities
U.S. Government and federally sponsored agency obligations (2):
Mortgage-backed securities		$	461,862	$	44,413	$	1,861	$	504,414	$	-
Other, including
U.S. Treasury securities			532,373		21,153		7,415		546,111		-
Municipal bonds			1,553,603		165,680		10,340		1,708,943		(4,140	)
Foreign government bonds			67,441		6,288		112		73,617		-
Corporate bonds			2,687,376		140,873		48,834		2,779,415		-
Other mortgage-backed securities			1,482,971		16,830		20,961		1,478,840		1,382
Totals		$	6,785,626	$	395,237	$	89,523	$	7,091,340	$	(2,758	)

Equity securities (3)		$	95,722	$	8,405	$	4,330	$	99,797	$	-

December 31, 2014
Fixed maturity securities
U.S. Government and federally sponsored agency obligations (2):
Mortgage-backed securities		$	484,561	$	52,555	$	1,390	$	535,726	$	-
Other, including
U.S. Treasury securities			512,596		28,652		3,049		538,199		-
Municipal bonds			1,462,717		189,533		4,428		1,647,822		-
Foreign government bonds			52,552		6,984		-		59,536		-
Corporate bonds			2,608,633		237,372		11,256		2,834,749		-
Other mortgage-backed securities			1,254,178		28,772		5,892		1,277,058		2,879
Totals		$	6,375,237	$	543,868	$	26,015	$	6,893,090	$	2,879

Equity securities (3)		$	99,904	$	14,159	$	3,408	$	110,655	$	-

(1)

Related to securities for which an unrealized loss was bifurcated to distinguish the credit-related portion and the portion driven by other market factors. Represents the amount of other-than-temporary impairment losses in AOCI which was not included in earnings; amounts also include unrealized gains/(losses) on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date.

(2)

Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $231,294 and $302,222; Federal Home Loan Mortgage Corporation (“FHLMC”) of $363,957 and $432,432; and Government National Mortgage Association (“GNMA”) of $130,940 and $137,867 as of December 31, 2015 and 2014, respectively.

(3)

Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds.

Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position

For equity securities, the Company has the ability and intent to hold the securities for the recovery of cost and recovery of cost is expected within a reasonable period of time. Therefore, no impairment of these securities was recorded at December 31, 2015.

	12 months or less					More than 12 months					Total
				Gross					Gross					Gross
				Unrealized					Unrealized					Unrealized
	Fair Value			Losses		Fair Value			Losses		Fair Value			Losses

December 31, 2015
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	48,097		$	1,748	$	1,595		$	113	$	49,692		$	1,861
Other		248,478			7,338		1,921			77		250,399			7,415
Municipal bonds		168,939			5,382		21,717			4,958		190,656			10,340
Foreign government bonds		11,867			112		-			-		11,867			112
Corporate bonds		858,647			37,244		50,340			11,590		908,987			48,834
Other mortgage-backed securities		929,268			19,165		140,561			1,796		1,069,829			20,961
Total fixed maturity securities		2,265,296			70,989		216,134			18,534		2,481,430			89,523
Equity securities (1)		38,764			3,022		8,379			1,308		47,143			4,330
Combined totals	$	2,304,060		$	74,011	$	224,513		$	19,842	$	2,528,573		$	93,853

Number of positions with a gross unrealized loss		684					78					762
Fair value as a percentage of total fixed maturities and equity securities fair value		32.0	%				3.1	%				35.1	%

December 31, 2014
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	2		$	-	$	39,809		$	1,390	$	39,811		$	1,390
Other		10,317			34		117,615			3,015		127,932			3,049
Municipal bonds		31,821			200		59,715			4,228		91,536			4,428
Foreign government bonds		-			-		-			-		-			-
Corporate bonds		213,612			6,883		76,099			4,373		289,711			11,256
Other mortgage-backed securities		477,877			4,797		88,663			1,095		566,540			5,892
Total fixed maturity securities		733,629			11,914		381,901			14,101		1,115,530			26,015
Equity securities (1)		12,955			2,568		6,635			840		19,590			3,408
Combined totals	$	746,584		$	14,482	$	388,536		$	14,941	$	1,135,120		$	29,423

Number of positions with a gross unrealized loss		234					112					346
Fair value as a percentage of total fixed maturities and equity securities fair value		10.7	%				5.5	%				16.2	%

(1)

Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds.

Summary of cumulative credit losses

The following table summarizes the cumulative amounts related to the Company’s credit loss component of the other-than-temporary impairment losses on fixed maturity securities held as of December 31, 2015 and 2014 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of the other-than-temporary impairment losses were recognized in other comprehensive income (loss):

	Year Ended December 31,
	2015		2014
Cumulative credit loss (1)
Beginning of period	$	2,877	$	4,097
New credit losses		4,967		280
Losses related to securities sold or paid down during the period		-		(1,500	)
End of period	$	7,844	$	2,877

(1)

The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis.

Distribution of the Company's fixed maturity portfolio by estimated expected maturity

The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.

	December 31, 2015
					Percent of
	Amortized		Fair		Total Fair
	Cost		Value		Value
Estimated expected maturity:
Due in 1 year or less	$	210,171	$	219,639		3.1	%
Due after 1 year through 5 years		1,641,139		1,715,078		24.2
Due after 5 years through 10 years		2,688,583		2,809,712		39.6
Due after 10 years through 20 years		1,420,578		1,484,580		20.9
Due after 20 years		825,155		862,331		12.2
Total	$	6,785,626	$	7,091,340		100.0	%

Average option-adjusted duration, in years		5.8

Proceeds received from sales of fixed maturities and equity securities

Proceeds received from sales of fixed maturities and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were:

	Year Ended December 31,
		2015			2014			2013
Fixed maturity securities
Proceeds received	$	445,100		$	261,696		$	298,045
Gross gains realized		22,476			13,224			17,177
Gross losses realized		(5,487	)		(6,325	)		(4,945	)

Equity securities
Proceeds received	$	31,621		$	17,194		$	18,643
Gross gains realized		6,604			3,206			4,368
Gross losses realized		(672	)		(482	)		(616	)

Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities

The following table reconciles the net unrealized investment gains and losses, net of tax, included in accumulated other comprehensive income (loss), before the impact on deferred policy acquisition costs:

	Year Ended December 31,
		2015			2014			2013
Net unrealized investment gains (losses) on fixed maturity securities, net of tax
Beginning of period	$	336,604		$	146,489		$	423,004
Change in unrealized investment gains and losses		(131,202	)		195,413			(264,503	)
Reclassification of net realized investment (gains) losses to net income		(6,688	)		(5,298	)		(12,012	)
End of period	$	198,714		$	336,604		$	146,489

Net unrealized investment gains (losses) on equity securities, net of tax
Beginning of period	$	6,988		$	4,618		$	720
Change in unrealized investment gains and losses		(3,443	)		4,185			6,345
Reclassification of net realized investment (gains) losses to net income		(896	)		(1,815	)		(2,447	)
End of period	$	2,649		$	6,988		$	4,618

Offsetting assets and liability

The following table presents the instruments that were subject to a master netting arrangement for the Company.

Net Amounts

of Assets/

Gross

Liabilities

Gross Amounts Not Offset

Amounts

Presented

in the Consolidated

Offset in the

in the

Balance Sheets

Consolidated

Cash

Gross

Balance

Financial

Collateral

Net

Amounts

Sheets

Instruments

Received

Amount

December 31, 2015

Asset derivatives

Free-standing derivatives

2,501

2,617

(116)

December 31, 2014

Asset derivatives

Free-standing derivatives

2,458

1,955

503