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Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
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 September 30, 2017, Level 3 invested assets comprised 3.3% of the Company’s total investment portfolio at fair value.
($ in thousands)
 
 
 
Fair Value Measurements at
 
 
Carrying
 
Fair
 
Reporting Date Using
 
 
Amount
 
Value
 
Level 1
 
Level 2
 
Level 3
September 30, 2017
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities
 
 
 
 
 
 
 
 
 
 
U.S. Government and federally
sponsored agency obligations:
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
$
645,402

 
$
645,402

 
$
—

 
$
642,110

 
$
3,292

Other, including U.S. Treasury securities
 
671,020

 
671,020

 
13,484

 
657,536

 
—

Municipal bonds
 
1,842,204

 
1,842,204

 
—

 
1,792,992

 
49,212

Foreign government bonds
 
100,177

 
100,177

 
—

 
100,177

 
—

Corporate bonds
 
2,821,703

 
2,821,703

 
14,798

 
2,712,660

 
94,245

Other mortgage-backed securities
 
1,550,128

 
1,550,128

 
—

 
1,431,802

 
118,326

Total fixed maturity securities
 
7,630,634

 
7,630,634

 
28,282

 
7,337,277

 
265,075

Equity securities
 
159,275

 
159,275

 
103,552

 
55,717

 
6

Short-term investments
 
111,488

 
111,488

 
111,488

 
—

 
—

Other investments
 
21,944

 
21,944

 
—

 
21,944

 
—

Totals
 
$
7,923,341

 
$
7,923,341

 
$
243,322

 
$
7,414,938

 
$
265,081

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
Investment contract and life policy
reserves, embedded derivatives
 
$
390

 
$
390

 
$
—

 
$
390

 
$
—

Other policyholder funds,
embedded derivatives
 
72,986

 
72,986

 
—

 
—

 
72,986

 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities
 
 
 
 
 
 
 
 
 
 
U.S. Government and federally
sponsored agency obligations:
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
$
614,891

 
$
614,891

 
$
—

 
$
611,476

 
$
3,415

Other, including U.S. Treasury securities
 
467,143

 
467,143

 
13,631

 
453,512

 
—

Municipal bonds
 
1,769,397

 
1,769,397

 
—

 
1,722,900

 
46,497

Foreign government bonds
 
98,669

 
98,669

 
—

 
98,669

 
—

Corporate bonds
 
2,810,221

 
2,810,221

 
13,532

 
2,736,498

 
60,191

Other mortgage-backed securities
 
1,696,387

 
1,696,387

 
—

 
1,595,143

 
101,244

Total fixed maturity securities
 
7,456,708

 
7,456,708

 
27,163

 
7,218,198

 
211,347

Equity securities
 
141,649

 
141,649

 
98,632

 
43,011

 
6

Short-term investments
 
44,918

 
44,918

 
44,167

 
—

 
751

Other investments
 
20,194

 
20,194

 
—

 
20,194

 
—

Totals
 
$
7,663,469

 
$
7,663,469

 
$
169,962

 
$
7,281,403

 
$
212,104

Financial Liabilities
 
 

 
 

 
 

 
 

 
 

Investment contract and life policy
reserves, embedded derivatives
 
$
158

 
$
158

 
$
—

 
$
158

 
$
—

Other policyholder funds,
embedded derivatives
 
59,393

 
59,393

 
—

 
—

 
59,393
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.
 
($ in thousands)
 
Financial Assets
 
Financial
Liabilities(1)
 
 
Municipal
Bonds
 
Corporate
Bonds
 
Mortgage-
Backed
Securities (2)
 
Total
Fixed
Maturity
Securities
 
Equity
Securities
 
Short-term
Investments
 
Total
 
 
Beginning balance, July 1, 2017
 
$
49,123

 
$
77,052

 
$
120,324

 
$
246,499

 
$
6

 
$
—

 
$
246,505

 
$
67,995

Transfers into Level 3 (3)
 
—

 
23,501

 
11,961

 
35,462

 
—

 
—

 
35,462

 
—

Transfers out of Level 3 (3)
 
—

 
1

 
(881
)
 
(880
)
 
—

 
—

 
(880
)
 
—

Total gains or losses
 


 


 


 


 


 


 


 
 
Net realized investment gains (losses) included in net
income related to financial assets
 
—

 
(1
)
 
(160
)
 
(161
)
 
—

 
—

 
(161
)
 
—

Net realized (gains) losses
included in net income
related to financial liabilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,587

Net unrealized investment
gains (losses) included in other comprehensive income
 
382

 
(192
)
 
(377
)
 
(187
)
 
—

 
—

 
(187
)
 
—

Purchases
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Issuances
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
3,752

Sales
 
—

 
(1,999
)
 
—

 
(1,999
)
 
—

 
—

 
(1,999
)
 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Paydowns, maturities
and distributions
 
(293
)
 
(4,117
)
 
(9,249
)
 
(13,659
)
 
—

 
—

 
(13,659
)
 
(1,348
)
Ending balance, September 30, 2017
 
$
49,212

 
$
94,245

 
$
121,618

 
$
265,075

 
$
6

 
$
—

 
$
265,081

 
$
72,986

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance, January 1, 2017
 
$
46,497

 
$
60,191

 
$
104,659

 
$
211,347

 
$
6

 
$
751

 
$
212,104

 
$
59,393

Transfers into Level 3 (3)
 
5,214

 
55,420

 
36,482

 
97,116

 
—

 
—

 
97,116

 
—

Transfers out of Level 3 (3)
 
(5,557
)
 
(11,962
)
 
(881
)
 
(18,400
)
 
—

 
(751
)
 
(19,151
)
 
—

Total gains or losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net realized investment gains (losses) included in net income related to financial assets
 
—

 
(1
)
 
(1,874
)
 
(1,875
)
 
—

 
—

 
(1,875
)
 
—

Net realized (gains) losses
included in net income
related to financial liabilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
6,133

Net unrealized investment
gains (losses) included in other comprehensive income
 
3,540

 
263

 
1,945

 
5,748

 
—

 
—

 
5,748

 
—

Purchases
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Issuances
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
10,538

Sales
 
—

 
(1,999
)
 
—

 
(1,999
)
 
—

 
—

 
(1,999
)
 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Paydowns, maturities
and distributions
 
(482
)
 
(7,667
)
 
(18,713
)
 
(26,862
)
 
—

 
—

 
(26,862
)
 
(3,078
)
Ending balance, September 30, 2017
 
$
49,212

 
$
94,245

 
$
121,618

 
$
265,075

 
$
6

 
$
—

 
$
265,081

 
$
72,986


(1)
Represents embedded derivatives, all related to the Company’s FIA products, reported in Other policyholder funds in the Company’s Consolidated Balance Sheets.
(2)
Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities.
(3)
Transfers into and out of Level 3 during the three and nine month periods ended September 30, 2017 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. 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.
($ in thousands)
 
Financial Assets
 
Financial
Liabilities(1)
 
 
Municipal
Bonds
 
Corporate
Bonds
 
Mortgage-
Backed
Securities (2)
 
Total
Fixed
Maturity
Securities
 
Equity
Securities
 
Short-term
Investments
 
Total
 
 
Beginning balance, July 1, 2016
 
$
47,647

 
$
73,408

 
$
96,581

 
$
217,636

 
$
6

 
$
—

 
$
217,642

 
$
47,706

Transfers into Level 3 (3)
 
—

 
10,375

 
7,655

 
18,030

 
—

 
—

 
18,030

 
—

Transfers out of Level 3 (3)
 
—

 
(5,967
)
 
(788
)
 
(6,755
)
 
—

 
—

 
(6,755
)
 
—

Total gains or losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net realized investment gains (losses) included in net
income related to financial assets
 
—

 
1

 
(56
)
 
(55
)
 
—

 
—

 
(55
)
 
—

Net realized (gains) losses
included in net income
related to financial liabilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
68

Net unrealized investment gains
(losses) included in other
comprehensive income
 
(2,361
)
 
1,292

 
3,951

 
2,882

 
—

 
—

 
2,882

 
—

Purchases
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Issuances
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
6,710

Sales
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Paydowns, maturities
and distributions
 
(120
)
 
(1,488
)
 
(5,194
)
 
(6,802
)
 
—

 
—

 
(6,802
)
 
695

Ending balance, September 30, 2016
 
$
45,166

 
$
77,621

 
$
102,149

 
$
224,936

 
$
6

 
$
—

 
$
224,942

 
$
55,179

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance, January 1, 2016
 
$
30,379

 
$
67,575

 
$
75,466

 
$
173,420

 
$
6

 
$
—

 
$
173,426

 
$
39,021

Transfers into Level 3 (3)
 
14,751

 
21,451

 
32,281

 
68,483

 
—

 
—

 
68,483

 
—

Transfers out of Level 3 (3)
 
—

 
(5,967
)
 
(788
)
 
(6,755
)
 
—

 
—

 
(6,755
)
 
—

Total gains or losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net realized investment gains
(losses) included in net
income related to
financial assets
 
—

 
(656
)
 
(56
)
 
(712
)
 
—

 
—

 
(712
)
 
—

Net realized (gains) losses
included in net income
related to financial liabilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,066

Net unrealized investment gains
(losses) included in other
comprehensive income
 
420

 
3,073

 
4,173

 
7,666

 
—

 
—

 
7,666

 
—

Purchases
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Issuances
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
15,194

Sales
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Paydowns, maturities
and distributions
 
(384
)
 
(7,855
)
 
(8,927
)
 
(17,166
)
 
—

 
—

 
(17,166
)
 
(1,102
)
Ending balance, September 30, 2016
 
$
45,166

 
$
77,621

 
$
102,149

 
$
224,936

 
$
6

 
$
—

 
$
224,942

 
$
55,179


(1)
Represents embedded derivatives, all related to the Company’s FIA products, reported in Other policyholder funds in the Company’s Consolidated Balance Sheets.
(2)
Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities.
(3)
Transfers into and out of Level 3 during the three and nine month periods ended September 30, 2016 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.
Summary of fair value assets and liabilities measured on nonrecurring basis 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. 
($ in thousands)
 
 
 
Fair Value Measurements at
 
 
Carrying
 
Fair
 
Reporting Date Using
 
 
Amount
 
Value
 
Level 1
 
Level 2
 
Level 3
September 30, 2017
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Other investments
 
$
154,630

 
$
159,253

 
$
—

 
$
—

 
$
159,253

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
Investment contract reserves
 
4,428,989

 
4,338,318

 
—

 
—

 
4,338,318

Life policy reserves, account values on life contracts
 
81,520

 
86,906

 
—

 
—

 
86,906

Other policyholder funds
 
644,383

 
644,383

 
—

 
575,579

 
68,804

Long-term debt
 
247,403

 
264,781

 
264,781

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
Other investments
 
$
151,965

 
$
156,536

 
$
—

 
$
—

 
$
156,536

Financial Liabilities
 
 

 
 

 
 

 
 

 
 

Investment contract reserves
 
4,360,456

 
4,280,528

 
—

 
—

 
4,280,528

Life policy reserves, account values on life contracts
 
79,591

 
85,066

 
—

 
—

 
85,066

Other policyholder funds
 
649,557

 
649,557

 
—

 
575,253

 
74,304

Long-term debt
 
247,209

 
248,191

 
248,191

 
—

 
—