Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value of Assets and Liabilities [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

		As of March 31, 2014
		Level 1		Level 2		Level 3			Netting (2)	Total
		(in thousands)
Fixed maturities, available-for-sale:
	U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,367	$	-	$	-	$	6,367
	Obligations of U.S. states and their political subdivisions		-		70,043		-		-		70,043
	Foreign government bonds		-		31,653		-		-		31,653
	Corporate securities		-		2,231,369		99,255		-		2,330,624
	Asset-backed securities		-		107,691		102,725		-		210,416
	Commercial mortgage-backed securities		-		375,048		45,365		-		420,413
	Residential mortgage-backed securities		-		150,860		-		-		150,860
Sub-total			-		2,973,031		247,345		-		3,220,376
Trading account assets:
	Equity securities		6,070		-		328		-		6,398
Sub-total			6,070		-		328		-		6,398
Equity securities, available-for-sale			-		17		192		-		209
Short-term investments			171,878		-		-		-		171,878
Cash equivalents			-		-		400		-		400
Other long-term investments			-		81,497		520		(79,222)		2,795
Reinsurance recoverables			-		-		1,344,587		-		1,344,587
Receivables from parent and affiliates			-		16,928		8,344		-		25,272
Sub-total excluding separate account assets			177,948		3,071,473		1,601,716		(79,222)		4,771,915
Separate account assets (1)			1,122,554		44,899,228		-		-		46,021,782
Total assets		$	1,300,502	$	47,970,701	$	1,601,716	$	(79,222)	$	50,793,697
Future policy benefits (3)		$	-	$	-	$	1,402,029	$	-	$	1,402,029
Payables to parent and affiliates			-		67,940		-		(67,940)		0
Total liabilities		$	-	$	67,940	$	1,402,029	$	(67,940)	$	1,402,029

		As of December 31, 2013
		Level 1		Level 2		Level 3			Netting (2)	Total
		(in thousands)
Fixed maturities, available-for-sale:
	U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,384	$	-	$	-	$	6,384
	Obligations of U.S. states and their political subdivisions		-		68,566		-		-		68,566
	Foreign government securities		-		31,154		-		-		31,154
	Corporate securities		-		2,325,846		96,796		-		2,422,642
	Asset-backed securities		-		124,103		63,789		-		187,892
	Commercial mortgage-backed securities		-		390,633		-		-		390,633
	Residential mortgage-backed securities		-		156,945		-		-		156,945
Sub-total			-		3,103,631		160,585		-		3,264,216
Trading account assets:
	Asset-backed securities		-		-		-		-		-
	Equity securities		6,364		-		313		-		6,677
Sub-total			6,364		-		313		-		6,677
Equity securities, available-for-sale			-		16		192		-		208
Short-term investments			118,188		-		-		-		118,188
Other long-term investments			-		73,535		486		(73,535)		486
Reinsurance recoverables			-		-		748,005		-		748,005
Receivables from parent and affiliates			-		19,071		6,347		-		25,418
Sub-total excluding separate account assets			124,552		3,196,253		915,928		(73,535)		4,163,198
Separate account assets (1)			1,190,903		45,435,925		-		-		46,626,828
Total assets		$	1,315,455	$	48,632,178	$	915,928	$	(73,535)	$	50,790,026
Future policy benefits (3)		$	-	$	-	$	778,226	$	-	$	778,226
Payables to parent and affiliates			-		94,580		-		(72,822)		21,758
Total liabilities		$	-	$	94,580	$	778,226	$	(72,822)	$	799,984

Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company's Unaudited Interim Statements of Financial Position.
“Netting” amounts represent swap variation margin of $11.3 million and $0.7 million as of March 31, 2014 and December 31, 2013, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.
As of March 31, 2014, the net embedded derivative liability position of $1,402 million includes $167 million of embedded derivatives in an asset position and $1,569 million of embedded derivatives in a liability position. As of December 31, 2013, the net embedded derivative liability position of $778 million includes $245 million of embedded derivatives in an asset position and $1,023 million of embedded derivatives in a liability position.

Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

				Three Months Ended March 31, 2014
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Equity Securities Available-for -Sale
				Corporate Securities		Asset- Backed Securities			Commercial Mortgage-Backed Securities		Trading Account Assets - Equity Securities		Equity Securities Available-for -Sale
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	96,796	$	63,789	$	-	$	313	$	192
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		-		-
			Asset management fees and other income		-		-		-		15		-
		Included in other comprehensive income (loss)			247		178		(83)		-		-
	Net investment income				1,224		44		-		-		-
	Purchases				1,489		14,933		45,448		-		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		-
	Settlements				(501)		(3,882)		-		-		-
	Transfers into Level 3 (1)				-		27,663		-		-		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	99,255	$	102,725	$	45,365	$	328	$	192

Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
			Asset management fees and other income	$	-	$	-	$	-	$	15	$	-

				Three Months Ended March 31, 2014
				Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables			Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	-	$	486	$	748,005	$	6,347		(778,226)
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		537,854		1		(562,219)
			Asset management fees and other income		-		(9)		-		-		-
		Included in other comprehensive income (loss)			-		-		-		11		-
	Net investment income				-		-		-		-		-
	Purchases				400		43		58,728		-		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		(61,584)
	Settlements				-		-		-		-		-
	Transfers into Level 3 (1)				-		-		-		1,985		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	400	$	520	$	1,344,587	$	8,344		(1,402,029)
					.		.		.
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	662,178	$	-		(692,458)
			Asset management fees and other income	$	-	$	-	$	-	$	-		-

				Three Months Ended March 31, 2013
				Fixed Maturities Available-For-Sale
				Corporate Securities		Asset Backed Securities		Commercial Mortgage-Backed Securities			Trading Account Assets - Equity Securities		Other Long Term Investments
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	95,555	$	69,298	$	-	$	207	$	1,054
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		4		-		-		-		(624)
			Asset management fees and other income		-		-		-		60		33
		Included in other comprehensive income (loss)			(271)		162		-		-		-
	Net investment income				1,154		135		17		-		-
	Purchases				600		7,058		9,090		-		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		-
	Settlements				(1,467)		(3,913)		-		-		-
	Transfers into Level 3 (1)				-		-		-		-		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	95,575	$	72,740	$	9,107	$	267	$	463

Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	(624)
			Asset management fees and other income	$	-	$	-	$	-	$	61	$	33

					Three Months Ended March 31, 2013
					Reinsurance Recoverables		Other Assets		Future Policy Benefits
					(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	1,732,094	$	1,995	$	(1,793,136)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		(598,821)		-		623,786
			Asset management fees and other income		-		-		-
			Included in other comprehensive income (loss)		-		5		-
		Net investment income			-		-		-
		Purchases			58,136		-		-
		Sales			-		-		-
		Issuances			-		-		(60,973)
		Settlements			-		-		-
		Transfers into Level 3 (1)					-		-
		Transfers out of Level 3 (1)			-		-		-
Fair Value, end of period assets/(liabilities)				$	1,191,409	$	2,000	$	(1,230,323)

Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	(588,859)	$	-	$	613,833
			Asset management fees and other income	$	-	$	-	$	-

(1) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

Fair Value Disclosure Financial Instruments Not Carried at Fair Value

				March 31, 2014										December 31, 2013
				Fair Value								Carrying Amount (1)		Fair Value		Carrying Amount
				Level 1		Level 2		Level 3		Total		Total		Total		Total

			(in thousands)
Assets:
	Commercial mortgage and other loans		$	-	$	2,637	$	431,219	$	433,856	$	407,190	$	422,584	$	398,991
	Policy loans			-		-		12,581		12,581		12,581		12,454		12,454
	Other long term investments			-		-		1,923		1,923		1,639		1,623		1,440
	Cash and cash equivalents			8,383		-		-		8,383		8,383		1,417		1,417
	Accrued investment income			-		33,119		-		33,119		33,119		32,169		32,169
	Receivables from parent and affiliates			-		12,878		-		12,878		12,878		10,177		10,177
	Other assets			-		2,280		-		2,280		2,280		11,190		11,190
		Total assets	$	8,383	$	50,914	$	445,723	$	505,020	$	478,070	$	491,614	$	467,838

Liabilities:
	Policyholders' Account Balances - Investment contracts		$	-	$	-	$	86,224	$	86,224	$	87,341	$	84,153	$	85,672
	Cash collateral for loaned securities			-		24,806		-		24,806		24,806		47,896		47,896
	Short-term debt			-		205,633		-		205,633		200,000		218,488		205,000
	Payables to parent and affiliates			-		38,307		-		38,307		38,307		85,204		85,204
	Other liabilities			-		147,963		-		147,963		147,963		101,656		101,656
	Separate account liabilities - investment contracts			-		724		-		724		724		796		796
		Total liabilities	$	-	$	417,433	$	86,224	$	503,657	$	499,141	$	538,193	$	526,224

Carrying values presented herein differ from those in the Company's Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

Fair Value Inputs Quantitative Information [Table Text Block]

	As of March 31, 2014
		Fair Value	Primary Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	97,374	Discounted cash flow	Discount rate	3.66%	11.00%	3.96%	Decrease

Reinsurance recoverables	$	1,344,587	Fair values are determined in the same manner as future policy benefits

Liabilities:
Future policy benefits (2)	$	1,402,029	Discounted cash flow	Lapse rate (3)	0%	11%		Decrease
				NPR spread (4)	0.05%	1.01%		Decrease
				Utilization rate (5)	70%	94%		Increase
				Withdrawal rate (6)	86%	100%		Increase
				Mortality rate (7)	0%	13%		Decrease
				Equity Volatility curve	15%	28%		Increase

	As of December 31, 2013
		Fair Value	Primary Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	94,730	Discounted cash flow	Discount rate	3.73%	12.06%	3.90%	Decrease
Reinsurance recoverables	$	748,005	Fair values are determined in the same manner as future policy benefits

Liabilities:
Future policy benefits (2)	$	778,226	Discounted cash flow	Lapse rate (3)	0%	11%		Decrease
				NPR spread (4)	0.08%	1.09%		Decrease
				Utilization rate (5)	70%	94%		Increase
				Withdrawal rate (6)	86%	100%		Increase
				Mortality rate (7)	0%	13%		Decrease
				Equity Volatility curve	15%	28%		Increase

Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.
Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company's variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
Base lapse rates are adjusted at the contract level based on a comparison of the benefit amount and the policyholder account value and reflect other factors, such as the applicability of any surrender charges. A dynamic lapse adjustment reduces the base lapse rate when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.
To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. In determining the NPR spread, the Company reflects the financial strength ratings of the Company and its affiliates as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements adjusted for any illiquidity risk premium.
The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. These assumptions vary based on the product type, the age of the contractholder, and the age of the contract. The impact of changes in these assumptions is highly dependent on the contract type and age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal.
The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.
Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Fair Value Level Three Amounts By Pricing Source [Table Text Block]

	As of March 31, 2014
		Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	97,374	$	1,881	$	99,255
Asset-backed securities		-		102,725		102,725
Commercial mortgage-backed securities		15,113		30,252		45,365
Equity securities		192		328		520
Cash and cash equivalents		400		-		400
Other long-term Investments		-		520		520
Reinsurance recoverables		1,344,587		-		1,344,587
Receivables from parent and affiliates		-		8,344		8,344
Total assets	$	1,457,666	$	144,050	$	1,601,716

Future policy benefits		1,402,029		-		1,402,029
Total liabilities	$	1,402,029	$	-	$	1,402,029

	As of December 31, 2013
		Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	94,730	$	2,066	$	96,796
Asset-backed securities		-		63,789		63,789
Equity securities		192		313		505
Other long-term Investments		-		486		486
Reinsurance recoverables		748,005		-		748,005
Receivables from parent and affiliates		-		6,347		6,347
Total assets	$	842,927	$	73,001	$	915,928

Future policy benefits		778,226		-		778,226
Total liabilities	$	778,226	$	-	$	778,226

Represents valuations which could incorporate internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table.
Represents unadjusted prices from independent pricing services and independent non-binding broker quotes where pricing inputs are not readily available.