Fair Value Of Financial Instruments

3 Months Ended

Mar. 31, 2012

Fair Value Of Financial Instruments [Abstract]

Note 3 - Fair Value of Financial Instruments

Financial Instruments Measured and Carried at Fair Value

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 as of March 31, 2012 and December 31, 2011. At March 31, 2012, Level 3 invested assets below comprised approximately 1.8% of the Company's total investment portfolio fair value.


	Carrying Amount			Fair Value			Fair Value Measurements at Reporting Date Using
	Carrying Amount			Fair Value			Level 1			Level 2			Level 3
March 31, 2012
Financial Assets
Investments
Fixed maturities
U.S. government and federally sponsored agency obligations
Mortgage-backed securities		$	585,663		$	585,663		$	-		$	585,663		$	-
Other			531,945			531,945			43,993			487,952			-
Municipal bonds			1,451,692			1,451,692			-			1,451,692			-
Foreign government bonds			50,338			50,338			-			50,338			-
Corporate bonds			2,292,957			2,292,957			23,069			2,179,968			89,920
Other mortgage-backed securities			587,489			587,489			-			574,424			13,065

Total fixed maturities			5,500,084			5,500,084			67,062			5,330,037			102,985
Equity securities			27,789			27,789			8,812			18,592			385
Short-term investments			74,204			74,204			74,204			-			-

Totals			5,602,077			5,602,077			150,078			5,348,629			103,370
Separate Account (variable annuity) assets			1,409,075			1,409,075			-			1,409,075			-
Financial Liabilities			-			-			-			-			-

December 31, 2011
Financial Assets
Investments
Fixed maturities
U.S. government and federally sponsored agency obligations
Mortgage-backed securities		$	603,812		$	603,812		$	-		$	603,812		$	-
Other			603,741			603,741			64,444			539,297			-
Municipal bonds			1,413,118			1,413,118			-			1,413,118			-
Foreign government bonds			49,624			49,624			-			49,624			-
Corporate bonds			2,156,544			2,156,544			25,486			2,042,802			88,256
Other mortgage-backed securities			594,993			594,993			-			590,461			4,532

Total fixed maturities			5,421,832			5,421,832			89,930			5,239,114			92,788
Equity securities			26,774			26,774			9,036			17,353			385
Short-term investments			100,442			100,442			97,929			2,513			-

Totals			5,549,048			5,549,048			196,895			5,258,980			93,173
Separate Account (variable annuity) assets			1,273,764			1,273,764			-			1,273,764			-
Financial Liabilities			-			-			-			-			-

The Company did not have any transfers between Levels 1 and 2 during the three months ended March 31, 2012. The following tables present reconciliations for the three months ended March 31, 2012 and 2011 for all Level 3 assets measured at fair value on a recurring basis.


	Corporate Bonds				Other Mortgage- Backed Securities				Total Fixed Maturities				Equity Securities			Total
Financial Assets
Beginning balance, January 1, 2012		$	88,256			$	4,532			$	92,788			$	385		$	93,173
Transfers into/(out of) Level 3 (1)			3,586				8,504				12,090				-			12,090
Total gains or losses
Net realized gains (losses) included in net income			-				-				-				-			-
Net unrealized gains (losses) included in other comprehensive income			(1,779	)			156				(1,623	)			-			(1,623	)
Purchases			-				-				-				-			-
Issuances			-				-				-				-			-
Sales			-				-				-				-			-
Settlements			-				-				-				-			-
Paydowns and maturities			(143	)			(127	)			(270	)			-			(270	)

Ending balance, March 31, 2012		$	89,920			$	13,065			$	102,985			$	385		$	103,370


Beginning balance, January 1, 2011		$	45,244			$	945			$	46,189			$	396		$	46,585
Transfers into/(out of) Level 3 (1)			(11,390	)			-				(11,390	)			-			(11,390	)
Total gains or losses
Net realized gains (losses) included in net income			-				-				-				-			-
Net unrealized gains (losses) included in other comprehensive income			(122	)			8				(114	)			-			(114	)
Purchases			-				-				-				-			-
Issuances			-				-				-				-			-
Sales			-				-				-				-			-
Settlements			-				-				-				-			-
Paydowns and maturities			(175	)			(76	)			(251	)			-			(251	)

Ending balance, March 31, 2011		$	33,557			$	877			$	34,434			$	396		$	34,830

(1)

Transfers into and out of Level 3 during the periods ended March 31, 2012 and 2011 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 of the ending date of the reporting period.

At March 31, 2012 and 2011, there were no realized gains or losses included in earnings that were attributable to changes in the fair value of Level 3 assets still held.

Consistent with processes at December 31, 2011, for certain assets and liabilities, fair value is determined using pricing models, discounted cash flow methodologies, or similar techniques which utilize unobservable inputs and require significant management judgment or estimation. These inputs are classified as Level 3.

Financial Instruments Disclosed, But Not Carried, at Fair Value

The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities at March 31, 2012 and December 31, 2011.


	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2012
Financial Assets
Investments
Other investments		$ 155,400		$ 159,465		$ -		$ -		$ 159,465
Financial Liabilities
Fixed annuity contract liabilities		3,008,533		2,757,464		-		-		2,757,464
Policyholder account balances on interest-sensitive life contracts		79,089		76,162		-		-		76,162
Other policyholder funds		96,609		96,609		-		-		96,609
Short-term debt		38,000		38,000		-		-		38,000
Long-term debt		199,760		211,425		211,425		-		-

December 31, 2011
Financial Assets
Investments
Other investments		$ 128,460		$ 132,522		$ -		$ -		$ 132,522
Financial Liabilities
Fixed annuity contract liabilities		2,945,107		2,699,295		-		-		2,699,295
Policyholder account balances on interest-sensitive life contracts		79,305		76,370		-		-		76,370
Other policyholder funds		99,747		99,747		-		-		99,747
Short-term debt		38,000		38,000		-		-		38,000
Long-term debt		199,744		214,218		214,218		-		-

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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