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

		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

		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

The amortized cost and fair value of fixed maturities by contractual maturities at September 30, 2014, are as follows:

		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

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of both 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

As discussed in Note 2 to the Company's Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013, a portion of certain OTTI losses on fixed maturity securities is recognized in “Other comprehensive income (loss) (“OCI”)”. For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following tables set 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.


		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

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

The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Asset administration fees and other income”, was $(0.2) million and $0.3 million during the three months ended September 30, 2014 and 2013, respectively, and $(0.7) million and $0.7 million during the nine months ended September 30, 2014 and 2013, respectively.

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

			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

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States with the largest concentrations in California (17%), Texas (12%) and Ohio (8%) at September 30, 2014.

Activity in the allowance for credit losses for all commercial mortgage and other loans, for the periods indicated, is as follows:

	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

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:

	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

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. There were no impaired commercial mortgage and other loans identified in management's specific review of probable loan losses and no related allowance for losses at both September 30, 2014 and December 31, 2013. There were no recorded investments in impaired loans with an allowance recorded, before the allowance for losses, at both September 30, 2014 and December 31, 2013.

Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans' expected future cash flows equals or exceeds the recorded investment. The Company had no such loans at both September 30, 2014 and December 31, 2013. See Note 2 to the Company's Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, for information regarding the Company's accounting policies for non-performing loans.

The following table sets forth certain key credit quality indicators as of September 30, 2014, based upon the recorded investment gross of allowance for credit losses.

		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

The following table sets forth certain key credit quality indicators as of December 31, 2013, based upon the recorded investment gross of allowance for credit losses.

		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

As of both September 30, 2014 and December 31, 2013, all commercial mortgage and other loans were in current status. The Company defines current in its aging of past due commercial mortgage and other loans as less than 30 days past due.

There were no commercial mortgage and other loans in nonaccrual status as of both September 30, 2014 and December 31, 2013. Nonaccrual loans are those on which the accrual of interest has been suspended after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability and loans for which a loan-specific reserve has been established. See Note 2 to the Company's Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, for further discussion regarding nonaccrual status loans.

For the three and nine months ended both September 30, 2014 and 2013, there were no new commercial mortgage and other loans acquired, other than those through direct origination.

The Company's commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of both September 30, 2014 and December 31, 2013, the Company had no significant commitments to fund to borrowers that have been involved in a troubled debt restructuring. During the three and nine months ended both September 30, 2014 and 2013, there were no new troubled debt restructurings related to commercial mortgage and other loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective period. For additional information relating to the accounting for troubled debt restructurings, see Note 2 to the Company's Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013.

Net investment income for the three and nine months ended September 30, 2014 and 2013, was from the following sources:

		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 investment gains (losses), net, for the three and nine months ended September 30, 2014 and 2013, were from the following sources:

		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)

The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the nine months ended September 30, 2014 and 2013 are as follows:

		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

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

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company's Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

		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

										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

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

	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

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows 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, as of the dates indicated:

			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			$	-	$	-	$	-	$	-	$	-	$	-

The gross unrealized losses on fixed maturity securities at September 30, 2014 and December 31, 2013, are composed of $3.0 million and $20.4 million, respectively, related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $3.0 million and $1.5 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At September 30, 2014, the $1.7 million of gross unrealized losses of twelve months or more were concentrated in U.S. obligations, commercial mortgage-backed securities, and the consumer non-cyclical and utility sectors of the Company's corporate securities. At December 31, 2013, the $1.6 million of gross unrealized losses of twelve months or more were concentrated in U.S. obligations and the consumer non-cyclical sector of the Company's corporate securities.

In accordance with its policy described in Note 2 to the Company's Financial Statements included in its 2013 Annual Report on Form 10-K, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at September 30, 2014 or December 31, 2013. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At September 30, 2014, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.