Investments (Tables)

6 Months Ended

Jun. 30, 2012

Investments [Abstract]

Distribution of company's fixed maturity securities

The following table presents the distribution of the Company’s fixed maturity securities (“fixed maturities”) 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.

	Percent of Total Fair Value						June 30, 2012
	June 30,			December 31,			Fair		Amortized
	2012			2011			Value		Cost
Estimated expected maturity:
Due in 1 year or less		4.4	%		4.8	%	$	251,582	$	227,379
Due after 1 year through 5 years		18.4			19.4			1,049,930		948,923
Due after 5 years through 10 years		36.3			33.2			2,062,870		1,864,414
Due after 10 years through 20 years		21.1			22.1			1,201,837		1,086,216
Due after 20 years		19.8			20.5			1,128,507		1,019,941
Total		100.0	%		100.0	%	$	5,694,726	$	5,146,873
Average option-adjusted duration, in years		6.3			6.4

Proceeds received from sales of fixed maturities

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012			2011		2012			2011
Proceeds received	$	121,228		$	80,018	$	279,529		$	211,284
Gross gains realized		8,461			5,139		17,362			9,682
Gross losses realized		(2,684	)		—		(11,829	)		(83	)

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 as of June 30, 2012 and December 31, 2011 were as follows:

	Amortized		Unrealized		Unrealized		Fair		OTTI in
	Cost/Cost		Gains		Losses		Value		AOCI (2)
June 30, 2012
Fixed maturity securities
U.S. government and federally sponsored agency obligations (1)
Mortgage-backed securities	$	552,090	$	77,445	$	5	$	629,530	$	—
Other		451,983		37,070		103		488,950		—
Municipal bonds		1,349,819		162,108		2,419		1,509,508		—
Foreign government bonds		48,503		7,103		—		55,606		—
Corporate bonds		2,174,764		250,421		10,720		2,414,465		—
Other mortgage-backed securities		569,714		29,943		2,990		596,667		2,435
Totals	$	5,146,873	$	564,090	$	16,237	$	5,694,726	$	2,435
Equity securities	$	37,199	$	2,013	$	1,177	$	38,035	$	—
December 31, 2011
Fixed maturity securities
U.S. government and federally sponsored agency obligations (1)
Mortgage-backed securities	$	532,554	$	71,402	$	144	$	603,812	$	—
Other		560,036		43,705		—		603,741		—
Municipal bonds		1,291,281		122,857		1,020		1,413,118		—
Foreign government bonds		44,529		5,095		—		49,624		—
Corporate bonds		1,967,229		205,413		16,098		2,156,544		—
Other mortgage-backed securities		588,760		22,024		15,791		594,993		2,136
Totals	$	4,984,389	$	470,496	$	33,053	$	5,421,832	$	2,136
Equity securities	$	23,070	$	4,030	$	326	$	26,774	$	—

(1) Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $469,909 and $547,521; Federal Home Loan Mortgage Corporation (“FHLMC”) of $402,031 and $374,361; and Government National Mortgage Association (“GNMA”) of $133,390 and $124,515 as of June 30, 2012 and December 31, 2011, respectively.

(2) Represents the amount of other-than-temporary impairment losses in AOCI which, beginning April 1, 2009, was not included in earnings under current accounting guidance. Amounts also include unrealized gains and losses on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date.

Reconciliation of net unrealized investment gains and losses

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:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Net unrealized investment gains (losses) on fixed maturity securities, net of tax
Beginning of period	$	298,096		$	114,515		$	284,338		$	118,498
Change in unrealized investment gains and losses		61,869			53,217			75,867			52,976
Reclassification of net realized investment (gains) losses to net income		(3,861	)		(3,765	)		(4,101	)		(7,507	)
End of period	$	356,104		$	163,967		$	356,104		$	163,967
Net unrealized investment gains (losses) on equity securities, net of tax
Beginning of period	$	2,238		$	2,497		$	2,408		$	2,139
Change in unrealized investment gains and losses		882			391			727			749
Reclassification of net realized investment (gains) losses to net income		(2,577	)		(3	)		(2,592	)		(3	)
End of period	$	543		$	2,885		$	543		$	2,885

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 June 30, 2012 and 2011 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:

	Six Months Ended
	June 30,
	2012		2011
Cumulative credit loss (1)
Beginning of period	$	3,957	$	4,518
New credit losses		—		—
Losses related to securities sold or paid down during the period		—		(561	)
End of period	$	3,957	$	3,957

(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. The definition, reporting and disclosure of “credit loss” was effective as of April 1, 2009.

Fair value and gross unrealized losses of fixed maturity securities and equity securities

	12 Months or Less					More than 12 Months					Total
				Gross					Gross					Gross
	Fair Value			Unrealized Losses		Fair Value			Unrealized Losses		Fair Value			Unrealized Losses
June 30, 2012
Fixed maturity securities
U.S. government and federally sponsored agency obligations
Mortgage-backed securities	$	5,996		$	1	$	1,350		$	4	$	7,346		$	5
Other		26,947			103		—			—		26,947			103
Municipal bonds		75,552			1,743		3,359			676		78,911			2,419
Foreign government bonds		—			—		—			—		—			—
Corporate bonds		99,779			4,315		30,434			6,405		130,213			10,720
Other mortgage-backed securities		46,185			1,392		32,837			1,598		79,022			2,990
Total fixed maturity securities		254,459			7,554		67,980			8,683		322,439			16,237
Equity securities (1)		9,390			1,173		12			4		9,402			1,177
Combined totals	$	263,849		$	8,727	$	67,992		$	8,687	$	331,841		$	17,414
Number of positions with a gross unrealized loss		189					37					226
Fair value as a percentage of total fixed maturities and equity securities fair value		4.6	%				1.2	%				5.8	%
December 31, 2011
Fixed maturity securities
U.S. government and federally sponsored agency obligations
Mortgage-backed securities	$	3,519		$	133	$	1,511		$	11	$	5,030		$	144
Other		—			—		—			—		—			—
Municipal bonds		24,047			270		19,309			750		43,356			1,020
Foreign government bonds		—			—		—			—		—			—
Corporate bonds		273,209			9,752		26,977			6,346		300,186			16,098
Other mortgage-backed securities		115,986			3,222		36,944			12,569		152,930			15,791
Total fixed maturity securities		416,761			13,377		84,741			19,676		501,502			33,053
Equity securities (1)		—			—		4,865			326		4,865			326
Combined totals	$	416,761		$	13,377	$	89,606		$	20,002	$	506,367		$	33,379
Number of positions with a gross unrealized loss		159					44					203
Fair value as a percentage of total fixed maturities and equity securities fair value		7.7	%				1.6	%				9.3	%

(1) Includes primarily nonredeemable (perpetual) preferred stocks and also common stocks.