Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2014

Comprehensive Income Loss Note [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The changes in AOCI, net of tax, by component for the three and nine months ended September 30, 2014 and 2013 are as follows:

Three months ended September 30, 2014 (U.S. dollars in thousands)	Unrealized Gains (Losses) on Investments (1)			OTTI Losses Recognized in AOCI			Foreign Currency Translation Adjustments			Underfunded Pension Liability			Cash Flow Hedge		Total
Balance, beginning of period, net of tax	$	1,301,178		$	(84,258	)	$	1,060		$	(13,278	)	$	2,333	$	1,207,035
OCI before reclassifications	51,133			—			(14,168		)	418			—		37,383
Amounts reclassified from AOCI	(28,795		)	6,078			87			—			83		(22,547		)
Tax benefit (expense)	7,906			(115		)	2,267			—			—		10,058
Net current period OCI - net of tax	30,244			5,963			(11,814		)	418			83		24,894
Balance, end of period, net of tax	$	1,331,422		$	(78,295	)	$	(10,754	)	$	(12,860	)	$	2,416	$	1,231,929
Three months ended September 30, 2013 (U.S. dollars in thousands)
Balance, beginning of period, net of tax	$	789,451		$	(101,751	)	$	41,763		$	(20,597	)	$	1,894	$	710,760
OCI before reclassifications	121,955			—			4,910			1,093			—		127,958
Amounts reclassified from AOCI	(5,516		)	7,474			—			—			110		2,068
Tax benefit (expense)	(77,575		)	(5		)	(890		)	—			—		(78,470		)
Net current period OCI - net of tax	38,864			7,469			4,020			1,093			110		51,556
Balance, end of period, net of tax	$	828,315		$	(94,282	)	$	45,783		$	(19,504	)	$	2,004	$	762,316
Nine months ended September 30, 2014 (U.S. dollars in thousands)
Balance, beginning of period, net of tax	$	822,432		$	(89,190	)	$	14,541		$	(13,239	)	$	2,113	$	736,657
OCI before reclassifications	679,732			—			(23,688		)	379			—		656,423
Amounts reclassified from AOCI	(125,770		)	11,127			87			—			303		(114,253		)
Tax benefit (expense)	(44,972		)	(232		)	(1,694		)	—			—		(46,898		)
Net current period OCI - net of tax	508,990			10,895			(25,295		)	379			303		495,272
Balance, end of period, net of tax	$	1,331,422		$	(78,295	)	$	(10,754	)	$	(12,860	)	$	2,416	$	1,231,929
Nine months ended September 30, 2013 (U.S. dollars in thousands)
Balance, beginning of period, net of tax	$	1,591,210		$	(121,371	)	$	69,399		$	(20,892	)	$	1,674	$	1,520,020
OCI before reclassifications	(667,099		)	—			(25,665		)	1,388			—		(691,376		)
Amounts reclassified from AOCI	(102,618		)	27,099			—			—			330		(75,189		)
Tax benefit (expense)	6,822			(10		)	2,049			—			—		8,861
Net current period OCI - net of tax	(762,895		)	27,089			(23,616		)	1,388			330		(757,704		)
Balance, end of period, net of tax	$	828,315		$	(94,282	)	$	45,783		$	(19,504	)	$	2,004	$	762,316

____________

(1) Included in these amounts is the impact of Shadow Adjustments. During the year ended December 31, 2013, the initial impact of $44.7 million was recorded. During the nine months ended September 30, 2014, additional net impacts of $423.2 million were recorded, resulting in a total cumulative net impact of shadow adjustments on future policy benefit reserves of $467.9 million at September 30, 2014.

The reclassifications out of AOCI along with the associated income statement line items affected by component, and the total related tax (expense) benefit for the three and nine months ended September 30, 2014 and 2013 are as follows:

Gross Amount Reclassified From AOCI
Details About AOCI Components (U.S. dollars in thousands)	Three months ended September 30, 2014			Three months ended September 30, 2013			Nine months ended September 30, 2014			Nine months ended September 30, 2013			Affected Line Item in the Statement of Income
Unrealized gains and losses on investments:
	$	(18,665	)	$	(7,904	)	$	(151,049	)	$	(110,294	)	Net realized gains (losses) on investments sold
	8,246			2,388			43,655			7,676			OTTI on investments
	$	(18,376	)	$	—		$	(18,376	)	$	—		Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
	$	(28,795	)	$	(5,516	)	$	(125,770	)	$	(102,618	)	Total before tax
	956			3,352			5,108			66			Provision (benefit) for income tax
	$	(27,839	)	$	(2,164	)	$	(120,662	)	$	(102,552	)	Net of tax
OTTI losses recognized in OCI:
	$	5,686		$	6,675		$	9,030		$	24,562		Net realized gains (losses) on investments sold
	392			799			2,097			2,537			OTTI on investments transferred to (from) OCI
	$	6,078		$	7,474		$	11,127		$	27,099		Total before tax
	(3		)	(5		)	(120		)	(10		)	Provision (benefit) for income tax
	$	6,075		$	7,469		$	11,007		$	27,089		Net of tax
Foreign Currency Translation:
Foreign exchange relating to affiliate investments	$	87		$	—		$	87		$	—		Exchange gains (losses) - before tax
	—			—			—			—			Provision (benefit) for income tax
	$	87		$	—		$	87		$	—		Net of tax
Gains and losses on cash flow hedges:
Interest rate contracts	$	83		$	110		$	303		$	330		Interest Expense
	—			—			—			—			Provision (benefit) for income tax
	$	83		$	110		$	303		$	330		Net of tax
Total reclassifications for the period, gross of tax	$	(22,547	)	$	2,068		$	(114,253	)	$	(75,189	)
Tax benefit (expense)	953			3,347			4,988			56
Total reclassifications for the period, net of tax	$	(21,594	)	$	5,415		$	(109,265	)	$	(75,133	)