Investments (Tables)

12 Months Ended

Dec. 31, 2016

Fixed Maturities and Equity Securities, Available-for-sale Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:



	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(3)
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	4,998,652	$	2,487	$	536,114	$	4,465,025	$	0
Obligations of U.S. states and their political subdivisions	92,107		566		2,699		89,974		0
Foreign government bonds	64,352		5,404		370		69,386		0
Public utilities	448,349		13,155		10,348		451,156		0
Redeemable preferred stock	29,581		288		633		29,236		0
All other U.S. public corporate securities	1,619,814		73,819		10,153		1,683,480		(771		)
All other U.S. private corporate securities	951,324		27,234		13,810		964,748		(694		)
All other foreign public corporate securities	183,253		5,410		1,022		187,641		0
All other foreign private corporate securities	501,140		5,349		20,450		486,039		0
Asset-backed securities(1)	248,547		3,227		465		251,309		0
Commercial mortgage-backed securities	484,673		6,793		6,753		484,713		0
Residential mortgage-backed securities(2)	196,506		4,063		513		200,056		(5		)
Total fixed maturities, available-for-sale	$	9,818,298	$	147,795	$	603,330	$	9,362,763	$	(1,470	)
Equity securities, available-for-sale:
Common stocks:
Industrial, miscellaneous & other	$	351	$	0	$	351	$	0
Mutual funds	14		4		0		18
Total equity securities, available-for-sale	$	365	$	4	$	351	$	18


(1)	Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.


(2)	Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.


(3)	Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $0.2 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.



	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(3)
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	12,233	$	28	$	107	$	12,154	$	0
Obligations of U.S. states and their political subdivisions	20,116		474		378		20,212		0
Foreign government bonds	43,188		6,123		28		49,283		0
Public utilities	203,803		15,969		4,263		215,509		0
Redeemable preferred stock	0		0		0		0		0
All other U.S. public corporate securities	818,627		52,866		7,717		863,776		0
All other U.S. private corporate securities	494,640		30,996		4,407		521,229		0
All other foreign public corporate securities	132,414		3,781		608		135,587		0
All other foreign private corporate securities	219,009		2,487		15,842		205,654		0
Asset-backed securities(1)	149,196		2,786		692		151,290		(35		)
Commercial mortgage-backed securities	211,429		4,963		652		215,740		0
Residential mortgage-backed securities(2)	128,971		4,886		19		133,838		(7		)
Total fixed maturities, available-for-sale	$	2,433,626	$	125,359	$	34,713	$	2,524,272	$	(42	)
Equity securities, available-for-sale:
Common stocks:
Industrial, miscellaneous & other	$	0	$	0	$	0	$	0
Mutual funds	14		3		0		17
Total equity securities, available-for-sale	$	14	$	3	$	0	$	17


(1)	Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.


(2)	Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.


(3)	Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $0.1 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value

The following tables show the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, at December 31 for the years indicated:



	2016
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	4,254,477	$	536,114	$	0	$	0	$	4,254,477	$	536,114
Obligations of U.S. states and their political subdivisions	73,885		2,699		0		0		73,885		2,699
Foreign government bonds	32,107		370		0		0		32,107		370
Public utilities	240,041		8,019		17,097		2,329		257,138		10,348
Redeemable preferred stock	12,948		633		0		0		12,948		633
All other U.S. public corporate securities	530,904		8,798		12,981		1,355		543,885		10,153
All other U.S. private corporate securities	453,976		13,632		12,304		178		466,280		13,810
All other foreign public corporate securities	89,962		1,016		9,994		6		99,956		1,022
All other foreign private corporate securities	247,111		11,661		58,214		8,789		305,325		20,450
Asset-backed securities	67,246		439		16,489		26		83,735		465
Commercial mortgage-backed securities	293,651		6,753		0		0		293,651		6,753
Residential mortgage-backed securities	68,283		513		0		0		68,283		513
Total fixed maturities, available-for-sale	$	6,364,591	$	590,647	$	127,079	$	12,683	$	6,491,670	$	603,330
Equity securities, available-for-sale	$	0	$	351	$	0	$	0	$	0	$	351

	2015
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	8,480	$	107	$	0	$	0	$	8,480	$	107
Obligations of U.S. states and their political subdivisions	6,887		378		0		0		6,887		378
Foreign government bonds	13,616		28		0		0		13,616		28
Public utilities	49,104		1,421		14,217		2,842		63,321		4,263
Redeemable preferred stock	0		0		0		0		0		0
All other U.S. public corporate securities	207,578		6,297		29,828		1,420		237,406		7,717
All other U.S. private corporate securities	84,318		4,020		3,550		387		87,868		4,407
All other foreign public corporate securities	76,573		608		0		0		76,573		608
All other foreign private corporate securities	38,047		1,972		85,341		13,870		123,388		15,842
Asset-backed securities	50,195		430		26,359		262		76,554		692
Commercial mortgage-backed securities	55,065		642		833		10		55,898		652
Residential mortgage-backed securities	2,141		19		0		0		2,141		19
Total fixed maturities, available-for-sale	$	592,004	$	15,922	$	160,128	$	18,791	$	752,132	$	34,713
Equity securities, available-for-sale	$	0	$	0	$	0	$	0	$	0	$	0

Investments Classified by Contractual Maturity Date

The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2016 were as follows:



	Available-for-Sale
	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	354,121	$	355,252
Due after one year through five years	1,196,869		1,223,226
Due after five years through ten years	1,515,758		1,536,061
Due after ten years	5,821,824		5,312,146
Asset-backed securities	248,547		251,309
Commercial mortgage-backed securities	484,673		484,713
Residential mortgage-backed securities	196,506		200,056
Total	$	9,818,298	$	9,362,763

Sources of Fixed Maturity and Equity Security Proceeds, Realized Investment Gains (Losses), and Losses on Impairments

The following table depicts the sources of fixed maturity and equity security proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities, for the years indicated:



	2016			2015			2014
	(in thousands)
Fixed maturities, available-for-sale
Proceeds from sales(1)	$	3,577,346		$	33,604		$	308,458
Proceeds from maturities/repayments(1)	495,465			453,016			681,426
Gross investment gains from sales, prepayments and maturities	98,095			5,788			18,110
Gross investment losses from sales and maturities	(5,412		)	(937		)	(3,404		)
Equity securities, available-for-sale
Proceeds from sales	$	0		$	0		$	192
Gross investment gains from sales	0			0			1
Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings(2)	$	(6,499	)	$	(20	)	$	0
Writedowns for impairments on equity securities	0			0			0


(1)	Includes $0.6 million, $(0.0) million and $(6.2) million of non-cash related proceeds for the years ended December 31, 2016, 2015 and 2014, respectively.


(2)	Excludes the portion of OTTI recorded in OCI representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of the impairment.

Credit Losses Recognized in Earnings on Fixed Maturity Securities Held by the Company for which a Portion of the OTTI Loss was Recognized in OCI

The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts:



	Year Ended December 31,
	2016			2015
	(in thousands)
Balance, beginning of period	$	86		$	93
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(1,170		)	(17		)
Additional credit loss impairments recognized in the current period on securities previously impaired	0			20
Credit loss impairments recognized in the current period on securities not previously impaired	1,791			0
Increases due to the passage of time on previously recorded credit losses	25			0
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(14		)	(10		)
Assets transferred to parent and affiliates	607			0
Balance, end of period	$	1,325		$	86

Trading Account Assets Disclosure

The following table sets forth the composition of “Trading account assets” as of the dates indicated:



	December 31, 2016				December 31, 2015
	Cost		Fair Value		Cost		Fair Value
	(in thousands)
Fixed maturities	$	147,057	$	139,513	$	0	$	0
Equity securities	7,551		10,358		5,618		5,653
Total trading account assets	$	154,608	$	149,871	$	5,618	$	5,653

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans were comprised as follows, as of the dates indicated:



	December 31, 2016					December 31, 2015
	Amount (in thousands)			% of Total		Amount (in thousands)			% of Total
Commercial mortgage and agricultural property loans by property type:
Apartments/Multi-Family	$	277,296		22.5	%	$	136,190		31.2	%
Industrial	263,705			21.4		58,621			13.5
Retail	223,252			18.1		67,358			15.5
Office	294,304			23.8		100,357			23.0
Other	87,465			7.1		18,660			4.3
Hospitality	3,925			0.3		4,963			1.1
Total commercial mortgage loans	1,149,947			93.2		386,149			88.6
Agricultural property loans	84,235			6.8		49,926			11.4
Total commercial mortgage and agricultural property loans by property type	1,234,182			100.0	%	436,075			100.0	%
Valuation allowance	(2,289		)			(643		)
Total net commercial mortgage and agricultural property loans by property type	1,231,893					435,432
Other loans:
Uncollateralized loans	0					2,740
Valuation allowance	0					0
Total net other loans	0					2,740
Total commercial mortgage and other loans	$	1,231,893				$	438,172

Allowance for Losses

Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, was as follows:



	December 31, 2016
	Commercial Mortgage Loans		Agricultural Property Loans			Other Loans		Total
	(in thousands)
Allowance for credit losses, beginning of year	$	622	$	21		$	0	$	643
Addition to (release of) allowance for losses	1,645		1			0		1,646
Charge-offs, net of recoveries	0		0			0		0
Total ending balance	$	2,267	$	22		$	0	$	2,289

	December 31, 2015
	Commercial Mortgage Loans		Agricultural Property Loans			Other Loans		Total
	(in thousands)
Allowance for credit losses, beginning of year	$	455	$	27		$	0	$	482
Addition to (release of) allowance for losses	167		(6		)	0		161
Charge-offs, net of recoveries	0		0			0		0
Total ending balance	$	622	$	21		$	0	$	643

Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:



	December 31, 2016
	Commercial Mortgage Loans		Agricultural Property Loans		Uncollateralized Loans		Total
	(in thousands)
Allowance for Credit Losses:
Individually evaluated for impairment	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	2,267		22		0		2,289
Loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance	$	2,267	$	22	$	0	$	2,289
Recorded Investment(1):
Individually evaluated for impairment	$	1,715	$	0	$	0	$	1,715
Collectively evaluated for impairment	1,148,232		84,235		0		1,232,467
Loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance	$	1,149,947	$	84,235	$	0	$	1,234,182

	December 31, 2015
	Commercial Mortgage Loans		Agricultural Property Loans		Other Loans		Total
	(in thousands)
Allowance for Credit Losses:
Individually evaluated for impairment	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	622		21		0		643
Loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance	$	622	$	21	$	0	$	643
Recorded Investment(1):
Individually evaluated for impairment	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	386,149		49,926		2,740		438,815
Loans acquired with deteriorated credit quality	0		0		0		0
Total ending balance	$	386,149	$	49,926	$	2,740	$	438,815


(1)	Recorded investment reflects the carrying value gross of related allowance.

Credit Quality Indicators

The following tables set forth certain key credit quality indicators for commercial mortgage and agricultural property loans, based upon the recorded investment gross of allowance for credit losses, as of the dates indicated:



	Debt Service Coverage Ratio - December 31, 2016
	> 1.2X		1.0X to <1.2X		Less than 1.0X		Total
			(in thousands)
Loan-to-Value Ratio:
0%-59.99%	$	667,051	$	16,921	$	4,610	$	688,582
60%-69.99%	406,728		0		3,817		410,545
70%-79.99%	108,770		15,493		0		124,263
80% or greater	9,725		0		1,067		10,792
Total commercial mortgage and agricultural property loans	$	1,192,274	$	32,414	$	9,494	$	1,234,182



	Debt Service Coverage Ratio - December 31, 2015
	> 1.2X		1.0X to <1.2X		Less than 1.0X		Total
			(in thousands)
Loan-to-Value Ratio:
0%-59.99%	$	303,215	$	9,073	$	992	$	313,280
60%-69.99%	95,977		0		0		95,977
70%-79.99%	25,401		1,417		0		26,818
80% or greater	0		0		0		0
Total commercial mortgage and agricultural property loans	$	424,593	$	10,490	$	992	$	436,075

Past Due Financing Receivables

The following tables provide an aging of past due commercial mortgage and other loans as of the dates indicated, based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status as of the dates indicated:



	December 31, 2016
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Loans		Non-Accrual Status
	(in thousands)
Commercial mortgage loans	$	1,149,947	$	0	$	0	$	0	$	1,149,947	$	0
Agricultural property loans	84,235		0		0		0		84,235		0
Other loans	0		0		0		0		0		0
Total commercial mortgage and other loans	$	1,234,182	$	0	$	0	$	0	$	1,234,182	$	0

(1) There were no loans accruing interest.
	December 31, 2015
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Loans		Non-Accrual Status
	(in thousands)
Commercial mortgage loans	$	386,149	$	0	$	0	$	0	$	386,149	$	0
Agricultural property loans	49,926		0		0		0		49,926		0
Other loans	2,740		0		0		0		2,740		0
Total commercial mortgage and other loans	$	438,815	$	0	$	0	$	0	$	438,815	$	0

(1) There were no loans accruing interest.

Schedule Of Other Long Term Investments

The following table sets forth the composition of “Other long-term investments” at December 31 for the years indicated:



	2016		2015
	(in thousands)
Joint ventures and limited partnerships:
Private equity	$	30,513	$	22,535
Hedge funds	98,554		41,820
Real estate-related	109,043		2,535
Total joint ventures and limited partnerships	238,110		66,890
Derivatives	313,821		115,267
Total other long-term investments	$	551,931	$	182,157

Net Investment Income

The following table sets forth the net investment income by asset class for the years ended December 31:



	2016			2015			2014
	(in thousands)
Fixed maturities, available-for-sale	$	249,496		$	115,998		$	140,114
Trading account assets	3,473			349			325
Commercial mortgage and other loans	40,258			22,696			21,802
Policy loans	444			794			739
Short-term investments	26,831			396			281
Other long-term investments	29,160			4,638			6,492
Gross investment income	349,662			144,871			169,753
Less: investment expenses	(11,292		)	(5,441		)	(5,742		)
Net investment income	$	338,370		$	139,430		$	164,011

Realized Gain (Loss) on Investments

Realized investment gains (losses), net, for the years ended December 31, were from the following sources:



	2016			2015			2014
	(in thousands)
Fixed maturities	$	86,184		$	4,831		$	14,706
Equity securities	0			0			1
Commercial mortgage and other loans	(2,326		)	(161		)	774
Derivatives(1)	(3,526,514		)	1,381			(8,113		)
Other long-term investments	(648		)	1			0
Short-term investments and cash equivalents	544			0			0
Realized investment gains (losses), net	$	(3,442,760	)	$	6,052		$	7,368


(1)	Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.

Unrealized Gains and (Losses) on Investments

The table below presents net unrealized gains (losses) on investments by asset class as of December 31 for the years indicated:



	2016			2015		2014
	(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized	$	(1,261	)	$	9	$	1
Fixed maturity securities, available-for-sale - all other	(454,274		)	90,637		191,339
Equity securities, available-for-sale	(347		)	3		3
Affiliated notes	1,181			1,660		2,351
Derivatives designated as cash flow hedges(1)	11,745			14,847		4,839
Other investments	(619		)	304		390
Net unrealized gains (losses) on investments	$	(443,575	)	$	107,460	$	198,923


(1)	See Note 11 for more information on cash flow hedges.

Securities Pledged

As of December 31 for the years indicated in the table below, the carrying value of investments pledged to third parties and the carrying amount of the associated liabilities supported by the pledged collateral as reported in the Statements of Financial Position included the following:



	2016		2015
	(in thousands)
Collateral Pledged:
Fixed maturity securities, available-for-sale	$	21,908	$	10,218
Total securities pledged	$	21,908	$	10,218
Liabilities Supported by Pledged Collateral:
Cash collateral for loaned securities	$	23,350	$	10,568
Total liabilities supported by pledged collateral	$	23,350	$	10,568