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Investments (Tables)
 9 Months Ended
Sep. 30, 2014
Investments [Abstract]  
Fixed Maturities and Equity Securities, Available-for-sale Securities
     September 30, 2014
                   
               Other-than-
        Gross  Gross   temporary
     Amortized  Unrealized  Unrealized Fair Impairments
     Cost  Gains  Losses Value in AOCI (3)
                   
     (in thousands)
Fixed maturities, available-for-sale  
U.S. Treasury securities and obligations of U.S.                
 government authorities and agencies $6,331 $ - $ 22 $6,309 $ -
Obligations of U.S. states and their political               
 subdivisions  69,058  1,651  403  70,306   -
Foreign government bonds  25,130  6,941   -  32,071   -
Public utilities  193,968  16,641  1,455  209,154   -
All other corporate securities  1,767,282  155,548  3,659  1,919,171   -
Asset-backed securities (1)  145,579  5,736  185  151,130  (40)
Commercial mortgage-backed securities  305,077  8,641  325  313,393   -
Residential mortgage-backed securities (2)  132,403  6,133   -  138,536  (37)
Total fixed maturities, available-for-sale $2,644,828 $201,291 $6,049 $2,840,070 $(77)
                   
Equity securities, available-for-sale               
Common Stocks:               
 Public utilities $ - $ - $ - $ -   
 Mutual funds  14  3   -  17   
Total equity securities, available-for-sale $14 $3 $ - $17   

_____________

  • Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.
  • Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
  • Represents the amount of other-than-temporary impairment 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.

     December 31, 2013
                   
               Other-than-
        Gross  Gross   temporary
     Amortized  Unrealized  Unrealized Fair Impairments
     Cost  Gains  Losses Value in AOCI (3)
                   
     (in thousands)
Fixed maturities, available-for-sale  
U.S. Treasury securities and obligations of U.S.                
 government authorities and agencies $6,382 $36 $ 34 $6,384 $ -
Obligations of U.S. states and their political               
 subdivisions  67,225  2,911  1,570  68,566   -
Foreign government bonds  25,437  5,717   -  31,154   -
Public utilities  229,807  17,048  3,190  243,665   -
All other corporate securities  2,029,720  158,360  9,103  2,178,977   -
Asset-backed securities (1)  182,888  6,513  1,509  187,892  (1,351)
Commercial mortgage-backed securities  384,764  11,387  5,518  390,633   -
Residential mortgage-backed securities (2)  152,779  5,138  972  156,945  (40)
Total fixed maturities, available-for-sale $3,079,002 $207,110 $21,896 $3,264,216 $(1,391)
                   
Equity securities, available-for-sale               
Common Stocks:               
 Public utilities $192 $ - $ - $192   
 Mutual funds  14  2   -  16   
Total equity securities, available-for-sale $206 $2 $ - $208   

_____________

  • Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.
  • Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
  • Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $1.7 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.
Investments Classified by Contractual Maturity Date
     Available-for-Sale
     Amortized Fair
     Cost Value
          
     (in thousands)
Due in one year or less $ 198,400 $ 202,809
Due after one year through five years   918,175   978,862
Due after five years through ten years   525,352   573,982
Due after ten years   419,842   481,358
Asset-backed securities   145,579   151,130
Commercial mortgage-backed securities   305,077   313,393
Residential mortgage-backed securities   132,403   138,536
  Total $ 2,644,828 $ 2,840,070
Sources of Fixed Maturity Proceeds, Related Investment Gains (Losses), and Losses on Impairments of Fixed Maturities and Equity Securities
     Three Months Ended Nine Months Ended
     September 30, September 30,
     2014 2013 2014 2013
                
     (in thousands)
Fixed maturities, available-for-sale   
  Proceeds from sales $ 55,825 $ 59,715 $228,248 $181,143
  Proceeds from maturities/repayments   125,561   249,890  619,263  842,968
  Gross investment gains from sales, prepayments, and maturities   4,001   6,506  8,125  14,411
  Gross investment losses from sales and maturities   (102)   (2,597)  (3,349)  (2,694)
Equity securities, available-for-sale            
  Proceeds from sales $ - $ 4 $ - $ 5
  Gross investment gains from sales   -   2   1   2
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
        
    Three Months Nine Months
    Ended Ended
    September 30, 2014 September 30, 2014
         
     (in thousands)
         
Balance, beginning of period $103 $1,800
Credit loss impairments previously recognized on securities which matured, paid       
 down, prepaid or were sold during the period   (2)  (1,679)
Increases due to the passage of time on previously recorded credit losses   -   -
Accretion of credit loss impairments previously recognized due to an increase in       
 cash flows expected to be collected   (1)  (21)
Balance, end of period $100 $100
         
         
    Three Months Nine Months
    Ended Ended
    September 30, 2013 September 30, 2013
         
     (in thousands)
         
Balance, beginning of period $1,749 $3,381
Credit loss impairments previously recognized on securities which matured, paid       
 down, prepaid or were sold during the period  (6)  (1,625)
Increases due to the passage of time on previously recorded credit losses  32  87
Accretion of credit loss impairments previously recognized due to an increase in      
 cash flows expected to be collected   -  (68)
Balance, end of period $1,775 $1,775
Trading Account Assets Disclosure
     September 30, 2014 December 31, 2013
       Fair   Fair
     Cost Value Cost Value
                
  (in thousands)
             
  Total trading account assets - Equity securities $5,185 $6,022 $5,164 $6,677
Commercial Mortgage and Other Loans
     September 30, 2014  December 31, 2013 
     Amount % of  Amount % of 
     (in thousands) Total  (in thousands) Total 
                  
Commercial and agricultural mortgage loans by property type:              
Apartments/Multi-Family  $136,875  33.3% $125,045  31.5%
Industrial  85,048  20.7   88,009  22.1 
Retail   71,158  17.3   72,325  18.2 
Office  44,301  10.8   40,976  10.3 
Other  14,177  3.4   13,796  3.5 
Hospitality  5,099  1.3   5,133  1.3 
                  
  Total commercial mortgage loans  356,658  86.8   345,284  86.9 
Agricultural property loans  54,462  13.2   52,223  13.1 
  Total commercial and agricultural mortgage loans by property              
   type  411,120  100.0%  397,507  100.0%
Valuation allowance  (530)      (1,256)    
                  
  Total net commercial and agricultural mortgage loans by property               
   type  410,590      396,251    
                  
Other Loans              
Uncollateralized loans   2,740       2,740    
                  
  Total other loans   2,740       2,740    
                  
  Total commercial mortgage and other loans $ 413,330     $398,991    
Allowance for Losses
     September 30, 2014 December 31, 2013
          
  (in thousands)
Allowance for credit losses, beginning of year $1,256 $2,177
Addition to / (release of) allowance for losses   (726)   (921)
Total ending balance (1) $530 $1,256

_____________

  • Agricultural loans represent less than $0.1 million of the ending allowance at both September 30, 2014 and December 31, 2013.

 
Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans
     September 30, 2014 December 31, 2013
      
  (in thousands)
Allowance for Credit Losses:      
Ending balance: individually evaluated for impairment (1) $ - $ -
Ending balance: collectively evaluated for impairment (2)  530  1,256
Total ending balance $530 $1,256
          
Recorded Investment (3):      
Ending balance gross of reserves: individually evaluated for impairment (1) $ - $ -
Ending balance gross of reserves: collectively evaluated for impairment (2)  413,860  400,247
Total ending balance, gross of reserves $413,860 $400,247

_____________

  • There were no loans individually evaluated for impairments at both September 30, 2014 and December 31, 2013.
  • Agricultural loans collectively evaluated for impairment had a recorded investment of $54 million and $52 million for the periods ending September 30, 2014 and December 31, 2013, respectively, and a related allowance of less than $0.1 million for both periods. Uncollateralized loans collectively evaluated for impairment had a recorded investment of $3 million at both September 30, 2014 and December 31, 2013 and no related allowance for both periods.
  • Recorded investment reflects the balance sheet carrying value gross of related allowance.

 
Net Investment Income
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2014 2013 2014 2013
               
    (in thousands)
Fixed maturities, available-for-sale $33,864 $45,868 $108,045 $148,402
Trading account assets  1  76  31  137
Commercial mortgage and other loans  5,199  6,075  16,601  22,478
Policy loans  155  176  505  515
Short-term investments  64  77  194  255
Other long-term investments  1,538  754  4,329  2,183
  Gross investment income  40,821  53,026  129,705  173,970
Less: investment expenses  (1,428)  (1,705)  (4,353)  (5,176)
  Net investment income $39,393 $51,321 $125,352 $168,794
Realized Gain (Loss) on Investments
     Three Months Ended Nine Months Ended
     September 30, September 30,
     2014 2013 2014 2013
                
     (in thousands)
Fixed maturities $3,899 $3,908 $4,776 $11,716
Equity securities   -   1   1   2
Commercial mortgage and other loans   725  52   725  420
Derivatives  (5,547)  (72,935)  (10,791)  (162,600)
Other   -  (6)   -   (29)
  Realized investment gains (losses), net $(923) $(68,980) $(5,289) $(150,491)
Net Unrealized Investment Gain (Loss) AOCI Rollforward
     Net Unrealized Gains (Losses) on Investments (1) Deferred Policy Acquisition Costs and Other Costs Future Policy Benefits Deferred Income Tax (Liability) Benefit Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
                   
     (in thousands)
Balance, December 31, 2013 $323 $(116) $ (14) $(51) $142
Net investment gains (losses) on investments                
  arising during the period  5   -   -  (2)  3
Reclassification adjustment for (gains) losses               
 included in net income   (297)   -   -  104  (193)
Impact of net unrealized investment (gains) losses on               
 deferred policy acquisition costs               
 and other costs   -  106   -  (37)  69
Impact of net unrealized investment (gains) losses on               
 future policy benefits   -   -  13   (4)  9
Balance, September 30, 2014 $31 $ (10) $ (1) $10 $30
All Other Net Unrealized Investment Gain (Loss) AOCI Rollforward
                Accumulated Other
                Comprehensive
             Deferred  Income (Loss) Related
     Net Unrealized  Deferred Policy  Future Income Tax   To Net Unrealized
     Gains (Losses) on  Acquisition Costs Policy (Liability) Investment
     Investments (1) and Other Costs Benefits Benefit  Gains (Losses)
                   
  (in thousands)
Balance, December 31, 2013 $184,727 $(66,452) $(8,187) $(39,363) $70,725
Net investment gains (losses) on investments                
 arising during the period  18,888   -   -  (6,618)  12,270
Reclassification adjustment for (gains) losses               
 included in net income  (4,479)   -   -  1,566  (2,913)
Impact of net unrealized investment (gains)               
 losses on deferred policy acquisition costs               
 and other costs   -  4,690   -  (1,643)  3,047
Impact of net unrealized investment (gains)               
 losses on future policy benefits   -   -  (311)  107  (204)
Balance, September 30, 2014 $199,136 $(61,762) $(8,498) $(45,951) $82,925
Unrealized Gains and (Losses) on Investments
     September 30, December 31,
     2014 2013
          
  (in thousands)
Fixed maturity securities on which an OTTI loss has been recognized $31 $323
Fixed maturity securities, available-for-sale - all other  195,211  184,891
Equity securities, available-for-sale  3  2
Affiliated notes  2,541  3,113
Derivatives designated as cash flow hedges (1)  1,004  (3,653)
Other investments  377  374
Net unrealized gains (losses) on investments $199,167 $185,050

_____________

  • See Note 5 for more information on cash flow hedges.

 
Duration Of Gross Unrealized Losses On Fixed Maturity Securities Disclosures
    September 30, 2014
    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 $4,676 $6 $ 1,519 $ 16 $6,195 $22
Obligations of U.S. States and their                   
 political subdivisions   -   -  6,937  403  6,937  403
Public utilities  36,553  1,234  3,390  221  39,943  1,455
All other corporate securities  272,038  3,049  16,393  610  288,431  3,659
Asset-backed securities  9,493  4  30,927  181  40,420  185
Commercial mortgage-backed securities  10,068  26  7,178  299  17,246  325
Residential mortgage-backed securities   -   -   -   -   -   -
  Total $332,828 $4,319 $66,344 $1,730 $399,172 $6,049
                     
Equity securities, available-for-sale $ - $ - $ - $ - $ - $ -

    December 31, 2013
    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 $ 3,347 $ 34 $ - $ - $3,347 $34
Obligations of U.S. States and their                   
 political subdivisions  5,420  588   6,402   982  11,822  1,570
Public utilities  61,251  3,190   -   -  61,251  3,190
All other corporate securities  290,055  8,733   2,704   370  292,759  9,103
Asset-backed securities  97,575  1,509   -   -  97,575  1,509
Commercial mortgage-backed securities  86,132  5,249   2,941   269  89,073  5,518
Residential mortgage-backed securities   100,150   972   -   -   100,150   972
  Total $643,930 $20,275 $12,047 $1,621 $655,977 $21,896
                     
Equity securities, available-for-sale $ - $ - $ - $ - $ - $ -
Reclassifications Out Of Accumulated Other Comprehensive Income
Reclassifications out of Accumulated Other Comprehensive Income (Loss)   
           
      Three Months Nine Months
      Ended Ended
      September 30, 2014 September 30, 2014
           
      (in thousands)
Amounts reclassified from AOCI (1)(2):      
Net unrealized investment gains (losses):      
 Cash flow hedges - Currency/Interest rate (3) $77 $43
 Net unrealized investment gains (losses) on available-for-sale securities  3,822  4,733
  Total net unrealized investment gains (losses) (4)  3,899  4,776
           
    Total reclassifications for the period $3,899 $4,776

_____________

  • All amounts are shown before tax.
  • Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
  • See Note 5 for additional information on cash flow hedges.
  • See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs and future policy benefits.
Accumulated Other Comprehensive Income Loss Table
   Accumulated Other Comprehensive Income (Loss)
    Foreign Currency Translation Adjustment  Net Unrealized Investment Gains (Losses) (1)  Total Accumulated Other Comprehensive Income (Loss)
           
   (in thousands)
Balance, December 31, 2013 $10 $70,857 $70,867
Change in other comprehensive income         
  before reclassifications    (33)  23,390  23,357
Amounts reclassified from AOCI    -  (4,776)  (4,776)
Income tax benefit (expense)   12  (6,516)  (6,504)
Balance, September 30, 2014 $(11) $82,955 $82,944
           
           
   Accumulated Other Comprehensive Income (Loss)
    Foreign Currency Translation Adjustment  Net Unrealized Investment Gains (Losses) (1)  Total Accumulated Other Comprehensive Income (Loss)
   (in thousands)
Balance, December 31, 2012 $ 7 $147,280 $147,287
Change in other comprehensive income         
  before reclassifications    -  (92,502)  (92,502)
Amounts reclassified from AOCI    -  (11,718)  (11,718)
Income tax benefit (expense)   -  36,477  36,477
Balance, September 30, 2013 $7 $79,537 $79,544

_____________

  • Includes cash flow hedges of $(1.0) million and $(4.0) million as of September 30, 2014 and December 31, 2013, respectively, and $(4.0) million and $(3.0) million as of September 30, 2013 and December 31, 2012, respectively.
Credity Quality Indicators [Text Block]
    Debt Service Coverage Ratio - September 30, 2014
    Greater than 1.2X 1.0X to <1.2X Less than 1.0X Total
               
Loan-to-Value Ratio  (in thousands)
0%-59.99% $ 255,219 $ 3,658 $ 2,916 $ 261,793
60%-69.99%   118,722   -   -   118,722
70%-79.99%   29,136   1,469   -   30,605
Greater than 80%   -   -   -   -
  Total commercial and agricultural mortgage loans $ 403,077 $ 5,127 $ 2,916 $ 411,120

    Debt Service Coverage Ratio - December 31, 2013
    Greater than 1.2X 1.0X to <1.2X Less than 1.0X Total
               
Loan-to-Value Ratio (in thousands)
0%-59.99% $ 251,278 $ 7,650 $ 1,865 $ 260,793
60%-69.99%   102,755   -   -   102,755
70%-79.99%   31,712   2,247   -   33,959
Greater than 80%   -   -   -   -
  Total commercial and agricultural mortgage loans $ 385,745 $ 9,897 $ 1,865 $ 397,507