Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments [Abstract]

Summary of Company's fair value hierarchy measured at recurring and nonrecurring 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 as of June 30, 2012 and December 31, 2011. At June 30, 2012, Level 3 invested assets below comprised approximately 2.1% of the Company’s total investment portfolio fair value.

	Carrying		Fair		Fair Value Measurements at Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
June 30, 2012
Financial Assets
Investments
Fixed maturities
U.S. government and federally sponsored agency obligations
Mortgage-backed securities	$	629,530	$	629,530	$	—	$	629,530	$	—
Other		488,950		488,950		21,616		467,334		—
Municipal bonds		1,509,508		1,509,508		—		1,509,508		—
Foreign government bonds		55,606		55,606		—		55,606		—
Corporate bonds		2,414,465		2,414,465		22,018		2,335,988		56,459
Other mortgage-backed securities		596,667		596,667		—		583,756		12,911
Total fixed maturities		5,694,726		5,694,726		43,634		5,581,722		69,370
Equity securities		38,035		38,035		4,670		32,980		385
Short-term investments		33,453		33,453		33,453		—		—
Other investments (1)		52,308		52,308		—		—		52,308
Totals		5,818,522		5,818,522		81,757		5,614,702		122,063
Separate Account (variable annuity) assets		1,348,077		1,348,077		—		1,348,077		—
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		—
Other investments (1)		—		—		—		—		—
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		—		—		—		—		—

(1) Portion of the Other Investments amount reported in the Consolidated Balance Sheet which is measured and carried at fair value on a recurring basis.

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

The following tables present reconciliations for the three and six months ended June 30, 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		Other Investments		Total
Financial Assets
Beginning balance, April 1, 2012	$	89,920		$	13,065		$	102,985		$	385	$	26,185	$	129,555
Transfers into Level 3 (1)		9,407			—			9,407			—		—		9,407
Transfers out of Level 3 (1)		(45,460	)		—			(45,460	)		—		—		(45,460	)
Total gains or losses
Net realized gains (losses) included in net income		—			—			—			—		1,123		1,123
Net unrealized gains (losses) included in other comprehensive income		2,725			9			2,734			—		—		2,734
Purchases		—			—			—			—		25,000		25,000
Issuances		—			—			—			—		—		—
Sales		—			—			—			—		—		—
Settlements		—			—			—			—		—		—
Paydowns and maturities		(133	)		(163	)		(296	)		—		—		(296	)
Ending balance, June 30, 2012	$	56,459		$	12,911		$	69,370		$	385	$	52,308	$	122,063
Beginning balance, January 1, 2012	$	88,256		$	4,532		$	92,788		$	385	$	—	$	93,173
Transfers into Level 3 (1)		18,240			8,504			26,744			—		—		26,744
Transfers out of Level 3 (1)		(50,707	)		—			(50,707	)		—		—		(50,707	)
Total gains or losses
Net realized gains (losses) included in net income		—			—			—			—		2,308		2,308
Net unrealized gains (losses) included in other comprehensive income		946			165			1,111			—		—		1,111
Purchases		—			—			—			—		50,000		50,000
Issuances		—			—			—			—		—		—
Sales		—			—			—			—		—		—
Settlements		—			—			—			—		—		—
Paydowns and maturities		(276	)		(290	)		(566	)		—		—		(566	)
Ending balance, June 30, 2012	$	56,459		$	12,911		$	69,370		$	385	$	52,308	$	122,063

(1) Transfers into and out of Level 3 during the periods ended June 30, 2012 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.

	Corporate Bonds			Other Mortgage- Backed Securities			Total Fixed Maturities			Equity Securities			Total
Financial Assets
Beginning balance, April 1, 2011	$	33,557		$	877		$	34,434		$	396		$	34,830
Transfers into Level 3 (1)		17,389			—			17,389			—			17,389
Transfers out of Level 3 (1)		(2,335	)		—			(2,335	)		—			(2,335	)
Total gains or losses
Net realized gains (losses) included in net income		—			—			—			—			—
Net unrealized gains (losses) included in other comprehensive income		967			6			973			(12	)		961
Purchases		—			—			—			—			—
Issuances		—			—			—			—			—
Sales		—			—			—			—			—
Settlements		—			—			—			—			—
Paydowns and maturities		(293	)		(59	)		(352	)		—			(352	)
Ending balance, June 30, 2011	$	49,285		$	824		$	50,109		$	384		$	50,493
Beginning balance, January 1, 2011	$	45,244		$	945		$	46,189		$	396		$	46,585
Transfers into Level 3 (1)		17,389			—			17,389			—			17,389
Transfers out of Level 3 (1)		(13,725	)		—			(13,725	)		—			(13,725	)
Total gains or losses
Net realized gains (losses) included in net income		—			—			—			—			—
Net unrealized gains (losses) included in other comprehensive income		845			14			859			(12	)		847
Purchases		—			—			—			—			—
Issuances		—			—			—			—			—
Sales		—			—			—			—			—
Settlements		—			—			—			—			—
Paydowns and maturities		(468	)		(135	)		(603	)		—			(603	)
Ending balance, June 30, 2011	$	49,285		$	824		$	50,109		$	384		$	50,493

(1) Transfers into and out of Level 3 during the periods ended June 30, 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 in and transfers out as of the ending date of the reporting period.

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 at June 30, 2012 and December 31, 2011.

	Carrying		Fair		Fair Value Measurements at Reporting Date Using
	Amount		Value		Level 1		Level 2		Level 3
June 30, 2012
Financial Assets
Investments
Other investments (1)	$	131,095	$	135,185	$	—	$	—	$	135,185
Financial Liabilities
Fixed annuity contract liabilities		3,073,991		2,817,564		—		—		2,817,564
Policyholder account balances on interest-sensitive life contracts		78,988		76,065		—		—		76,065
Other policyholder funds		93,903		93,903		—		—		93,903
Short-term debt		38,000		38,000		—		38,000		—
Long-term debt		199,777		216,083		216,083		—		—
December 31, 2011
Financial Assets
Investments
Other investments (1)	$	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		—		—

(1) Portion of the Other Investments amount reported in the Consolidated Balance Sheet which is not carried at fair value.