The following tables provide information relating to investments in fixed maturity and equity securities by sector as of December 31, 2012 and 2011 (dollars in thousands):

													Other-than-
													temporary
December 31, 2012:			Amortized		Unrealized		Unrealized		Estimated		% of		impairments
			Cost		Gains		Losses		Fair Value		Total		in AOCI
Available-for-sale:
	Corporate securities		$	11,333,431	$	1,085,973	$	39,333	$	12,380,071	55.5	%	$	--
	Canadian and Canadian provincial
		governments		2,676,777		1,372,731		174		4,049,334	18.2			--
	Residential mortgage-backed securities			969,267		76,520		3,723		1,042,064	4.7			(241)
	Asset-backed securities			700,455		19,898		28,798		691,555	3.1			(2,259)
	Commercial mortgage-backed securities			1,608,376		142,369		51,842		1,698,903	7.6			(6,125)
	U.S. government and agencies			231,256		33,958		24		265,190	1.2			--
	State and political subdivisions			270,086		38,058		5,646		302,498	1.4			--
	Other foreign government, supranational and
		foreign government-sponsored enterprises		1,769,784		94,929		2,714		1,861,999	8.3			--
		Total fixed maturity securities	$	19,559,432	$	2,864,436	$	132,254	$	22,291,614	100.0	%	$	(8,625)

Non-redeemable preferred stock			$	68,469	$	6,542	$	170	$	74,841	33.6	%
Other equity securities				148,577		416		1,134		147,859	66.4
		Total equity securities	$	217,046	$	6,958	$	1,304	$	222,700	100.0	%

													Other-than-
													temporary
December 31, 2011:			Amortized		Unrealized		Unrealized		Estimated		% of		impairments
			Cost		Gains		Losses		Fair Value		Total		in AOCI
Available-for-sale:
	Corporate securities		$	6,931,958	$	654,519	$	125,371	$	7,461,106	46.0	%	$	--
	Canadian and Canadian provincial
		governments		2,507,802		1,362,160		29		3,869,933	23.9			--
	Residential mortgage-backed securities			1,167,265		76,393		16,424		1,227,234	7.6			(1,042)
	Asset-backed securities			443,974		11,692		53,675		401,991	2.5			(5,256)
	Commercial mortgage-backed securities			1,233,958		87,750		79,489		1,242,219	7.7			(12,225)
	U.S. government and agencies			341,087		32,976		61		374,002	2.3			--
	State and political subdivisions			184,308		24,419		3,341		205,386	1.3			--
	Other foreign government, supranational and
		foreign government-sponsored enterprises		1,372,528		50,127		3,576		1,419,079	8.7			--
		Total fixed maturity securities	$	14,182,880	$	2,300,036	$	281,966	$	16,200,950	100.0	%	$	(18,523)

Non-redeemable preferred stock			$	82,488	$	4,677	$	8,982	$	78,183	68.6	%
Other equity securities				35,352		1,903		1,538		35,717	31.4
		Total equity securities	$	117,840	$	6,580	$	10,520	$	113,900	100.0	%

The Company enters into various collateral arrangements that require both the pledging and acceptance of fixed maturity securities as collateral, which are excluded from the tables above. The Company pledged fixed maturity securities as collateral to derivative and reinsurance counterparties with an amortized cost of $16.9 million and $29.0 million, and an estimated fair value of $17.0 million and $32.6 million, as of December 31, 2012 and 2011 respectively, which are included in other invested assets in the consolidated balance sheets.

The Company received fixed maturity securities as collateral from derivative and reinsurance counterparties with an estimated fair value of $95.6 million and $1.0 million, as of December 31, 2012 and 2011, respectively. The collateral is held in separate custodial accounts and is not recorded on the Company's consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral; however, as of December 31, 2012 and 2011, none of the collateral had been sold or re-pledged.

As of December 31, 2012, the Company held securities with a fair value of $1,400.0 million that were guaranteed or issued by the Canadian province of Ontario and $1,785.0 million that were guaranteed or issued by the Canadian province of Quebec, both of which exceeded 10% of consolidated stockholders' equity. As of December 31, 2011, the Company held securities with a fair value of $1,323.1 million that were guaranteed or issued by the Canadian province of Ontario and $1,681.9 million that were guaranteed or issued by the Canadian province of Quebec, both of which exceeded 10% of consolidated stockholders' equity.

The amortized cost and estimated fair value of fixed maturity securities available-for-sale at December 31, 2012 are shown by contractual maturity in the table below (dollars in thousands). Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The tables below show the major industry types of the Company's corporate fixed maturity holdings as of December 31, 2012 and 2011 (dollars in thousands):

December 31, 2012:					Estimated
			Amortized Cost		Fair Value	% of Total
Finance		$	3,619,455	$	3,900,152	31.5	%
Industrial			5,881,967		6,443,846	52.0
Utility			1,799,658		2,002,611	16.2
Other			32,351		33,462	0.3
	Total	$	11,333,431	$	12,380,071	100.0	%


December 31, 2011:					Estimated
			Amortized Cost		Fair Value	% of Total
Finance		$	2,411,175	$	2,442,149	32.7	%
Industrial			3,402,099		3,760,187	50.4
Utility			1,115,384		1,255,090	16.9
Other			3,300		3,680	--
	Total	$	6,931,958	$	7,461,106	100.0	%

As discussed in Note 2 – “Summary of Significant Accounting Policies,” a portion of certain other-than-temporary impairment ("OTTI") losses on fixed maturity securities is recognized in AOCI. 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 AOCI. 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 AOCI, and the corresponding changes in such amounts (dollars in thousands):

	2012		2011		2010
Balance, beginning of period	$	63,947	$	47,291	$	47,905
Initial impairments - credit loss OTTI recognized on securities not previously impaired		1,962		8,349		7,359
Additional impairments - credit loss OTTI recognized on securities previously impaired		10,186		9,059		9,346
Credit loss OTTI previously recognized on securities impaired to fair value during the period		(22,290)		--		--
Credit loss previously recognized on securities which matured, paid down, prepaid or were sold during the period		(37,130)		(752)		(17,319)
Balance, end of period	$	16,675	$	63,947	$	47,291

During 2012, the Company began purchasing certain asset-backed and residential mortgage-backed securities, classified as available-for-sale, that had experienced deterioration in credit quality since their issuance. Securities acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired securities. For each security, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. At the date of acquisition, the timing and amount of the cash flows expected to be collected was determined based on a best estimate using key assumptions, such as interest rates, default rates and prepayment speeds. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI.

The following tables present information on the Company's purchased credit impaired securities, which are included in fixed maturity securities available-for-sale (dollars in thousands):

The following table presents information about purchased credit impaired investments acquired during the year ended December 31, 2012 (dollars in thousands).

The following table presents activity for the accretable yield on purchased credit impaired securities for the year ended December 31, 2012 (dollars in thousands):

The following table presents the total gross unrealized losses for the 567 and 940 fixed maturity and equity securities at December 31, 2012 and 2011, respectively, where the estimated fair value had declined and remained below amortized cost by the indicated amount (dollars in thousands):

The overall decline in gross unrealized losses during the year was primarily due to the continued decline in interest rates and a reduction in credit spreads throughout 2012. The Company's determination of whether a decline in value is other-than-temporary includes analysis of the underlying credit and the extent and duration of a decline in value. The Company's credit analysis of an investment includes determining whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. The Company continues to consider declines in value as a potential indicator of credit deterioration. However, the Company believes that due to fluctuating market conditions and an extended period of economic uncertainty, the extent and duration of a decline in value have become less indicative of when there has been credit deterioration with respect to a fixed maturity security since it may not have an impact on the ability of the issuer to service all scheduled payments and the Company's evaluation of the recoverability of all contractual cash flows or the ability to recover an amount at least equal to amortized cost. In the Company's impairment review process, the duration and severity of an unrealized loss position for equity securities are given greater weight and consideration given the lack of contractual cash flows or deferability features.

The following tables present the estimated fair values and gross unrealized losses, including other-than-temporary impairment losses reported in AOCI, for 567 and 940 fixed maturity and equity securities that have estimated fair values below amortized cost as of December 31, 2012 and 2011, respectively (dollars in thousands). These investments are presented by class and grade of security, as well as the length of time the related market value has remained below amortized cost.

			Less than 12 months				12 months or greater				Total
					Gross				Gross				Gross
December 31, 2012:			Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
			Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Investment grade securities:
	Corporate securities		$	786,203	$	13,276	$	108,187	$	17,386	$	894,390	$	30,662
	Canadian and Canadian provincial
		governments		12,349		174		--		--		12,349		174
	Residential mortgage-backed securities			22,288		97		19,394		3,199		41,682		3,296
	Asset-backed securities			59,119		449		96,179		9,508		155,298		9,957
	Commercial mortgage-backed securities			89,507		797		29,181		7,974		118,688		8,771
	U.S. government and agencies			7,272		24		--		--		7,272		24
	State and political subdivisions			20,602		1,514		11,736		4,132		32,338		5,646
	Other foreign government, supranational and
		foreign government-sponsored enterprises		244,817		1,953		7,435		761		252,252		2,714
		Total investment grade securities		1,242,157		18,284		272,112		42,960		1,514,269		61,244

Non-investment grade securities:
	Corporate securities			181,168		3,170		39,123		5,501		220,291		8,671
	Residential mortgage-backed securities			15,199		80		2,633		347		17,832		427
	Asset-backed securities			3,421		26		31,938		18,815		35,359		18,841
	Commercial mortgage-backed securities			3,317		764		68,405		42,307		71,722		43,071
		Total non-investment grade securities		203,105		4,040		142,099		66,970		345,204		71,010
		Total fixed maturity securities	$	1,445,262	$	22,324	$	414,211	$	109,930	$	1,859,473	$	132,254

	Non-redeemable preferred stock		$	5,577	$	52	$	5,679	$	118	$	11,256	$	170
	Other equity securities			85,374		1,134		--		--		85,374		1,134
		Total equity securities	$	90,951	$	1,186	$	5,679	$	118	$	96,630	$	1,304

			Less than 12 months				12 months or greater				Total
					Gross				Gross				Gross
December 31, 2011:			Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
			Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Investment grade securities:
	Corporate securities		$	790,758	$	40,180	$	286,244	$	63,117	$	1,077,002	$	103,297
	Canadian and Canadian provincial
		governments		3,094		29		--		--		3,094		29
	Residential mortgage-backed securities			128,622		3,549		58,388		10,382		187,010		13,931
	Asset-backed securities			101,263		3,592		93,910		29,036		195,173		32,628
	Commercial mortgage-backed securities			109,455		3,538		58,979		22,001		168,434		25,539
	U.S. government and agencies			1,764		61		--		--		1,764		61
	State and political subdivisions			21,045		1,845		12,273		1,268		33,318		3,113
	Other foreign government, supranational and
		foreign government-sponsored enterprises		148,416		1,085		16,588		2,491		165,004		3,576
		Total investment grade securities		1,304,417		53,879		526,382		128,295		1,830,799		182,174

Non-investment grade securities:
	Corporate securities			212,795		10,852		47,310		11,222		260,105		22,074
	Residential mortgage-backed securities			23,199		712		10,459		1,781		33,658		2,493
	Asset-backed securities			2,363		940		21,275		20,107		23,638		21,047
	Commercial mortgage-backed securities			34,918		7,220		62,357		46,730		97,275		53,950
	State and political subdivisions			4,000		228		--		--		4,000		228
		Total non-investment grade securities		277,275		19,952		141,401		79,840		418,676		99,792
		Total fixed maturity securities	$	1,581,692	$	73,831	$	667,783	$	208,135	$	2,249,475	$	281,966

	Non-redeemable preferred stock		$	19,516	$	4,478	$	15,694	$	4,504	$	35,210	$	8,982
	Other equity securities			1,662		602		5,905		936		7,567		1,538
		Total equity securities	$	21,178	$	5,080	$	21,599	$	5,440	$	42,777	$	10,520

As of December 31, 2012, the Company does not intend to sell these fixed maturity securities and does not believe it is more likely than not that it will be required to sell these fixed maturity securities before the recovery of the fair value up to the current amortized cost of the investment, which may be maturity. However, unforeseen facts and circumstances may cause the Company to sell fixed maturity securities in the ordinary course of managing its portfolio to meet certain diversification, credit quality, asset-liability management and liquidity guidelines.

As of December 31, 2012, the Company has the ability and intent to hold the equity securities until the recovery of the fair value up to the current cost of the investment. However, unforeseen facts and circumstances may cause the Company to sell equity securities in the ordinary course of managing its portfolio to meet certain diversification, credit quality and liquidity guidelines.

Unrealized losses on non-investment grade securities are principally related to asset-backed securities, residential mortgage-backed securities and commercial mortgage-backed securities and were the result of wider credit spreads resulting from higher risk premiums since the time of initial purchase, largely due to macroeconomic conditions and credit market deterioration, including the impact of lower real estate valuations. As of December 31, 2012 and 2011, approximately $61.5 million and $68.6 million, respectively, of gross unrealized losses greater than 12 months were associated with non-investment grade asset and mortgage-backed securities. This class of securities was evaluated based on actual and projected collateral losses relative to the securities' positions in the respective securitization trusts and security specific expectations of cash flows. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, and (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread.

Investment Income, Net of Related Expenses

Major categories of investment income, net of related expenses consist of the following (dollars in thousands):

	2012		2011		2010
Fixed maturity securities available-for-sale	$	868,682	$	757,726	$	715,817
Mortgage loans on real estate		96,901		55,931		51,186
Policy loans		62,855		66,621		72,743
Funds withheld at interest		393,586		388,694		385,762
Short-term investments		4,173		2,378		4,968
Other invested assets		49,199		39,939		33,187
Investment income		1,475,396		1,311,289		1,263,663
Investment expense		(39,190)		(30,092)		(25,003)
Investment income, net of related expenses	$	1,436,206	$	1,281,197	$	1,238,660

Investment Related Gains (Losses), Net

Investment related gains (losses), net, consist of the following (dollars in thousands):

			2012		2011		2010
Fixed maturity and equity securities available for sale:
	Other-than-temporary impairment losses on fixed maturities		$	(15,908)	$	(30,873)	$	(31,920)
	Portion of loss recognized in accumulated other
		comprehensive income (before taxes)		(7,618)		3,924		2,045
	Net other-than-temporary impairment losses on fixed
		maturity securities recognized in earnings		(23,526)		(26,949)		(29,875)
	Impairment losses on equity securities			(3,025)		(4,116)		(32)
	Gain on investment activity			145,268		132,045		100,957
	Loss on investment activity			(27,474)		(26,996)		(28,730)
Other impairment losses (primarily mortgage loans and limited partnerships)				(16,602)		(10,238)		(5,976)
Derivatives and other, net				179,495		(99,802)		175,686
Total investment related gains (losses), net			$	254,136	$	(36,056)	$	212,030

The net other-than-temporary impairment losses on fixed maturity securities recognized in 2012 and 2011 were primarily due to a decline in the value of structured securities with exposure to commercial mortgages and general credit deterioration in select corporate and foreign securities. The increase in other impairment losses was primarily due to $8.2 million of impairments in the limited partnership asset class and $2.1 million on a real estate property held for investment in 2012. The impairment losses on equity securities of $3.0 million in 2012 and $4.1 million in 2011 are primarily due to the decline in fair value of securities issued by European financial institutions. The volatility in derivatives and other is primarily due to changes in the fair value of embedded derivative liabilities associated with modified coinsurance and funds withheld treaties and guaranteed minimum benefit riders.

At December 31, 2012 and 2011 the Company held non-income producing securities with amortized costs of $54.2 million and $86.2 million, and estimated fair values of $58.5 million and $79.7 million, respectively. Generally, securities are non-income producing when principal or interest is not paid primarily as a result of bankruptcies or credit defaults, but also include securities where amortization has been discontinued. During 2012, 2011 and 2010 the Company sold fixed maturity and equity securities with fair values of $828.0 million, $476.6 million, and $622.4 million, which were below amortized cost, at gross realized losses of $27.5 million, $27.0 million and $28.7 million, respectively. The Company generally does not engage in short-term buying and selling of securities.

The Company participates in a securities borrowing program whereby securities, which are not reflected on the Company's consolidated balance sheets, are borrowed from a third party. The Company is required to maintain a minimum of 100% of the market value of the borrowed securities as collateral. The Company had borrowed securities with an amortized cost of $87.5 million and $150.0 million as of December 31, 2012 and 2011, respectively, which was equal to the market value in both periods. The borrowed securities are used to provide collateral under an affiliated reinsurance transaction.

The Company also participates in a repurchase/reverse repurchase program in which securities, reflected as investments on the Company's consolidated balance sheets, are pledged to a third party. In return, the Company receives securities from the third party with an estimated fair value equal to a minimum of 100% of the securities pledged. The securities received are not reflected on the Company's consolidated balance sheets. As of December 31, 2012 the Company had pledged securities with an amortized cost of $290.2 million and an estimated fair value of $305.9 million, in return the Company received securities with an estimated fair value of $342.0 million. There were no securities pledged or received under this program as of December 31, 2011.

Mortgage loans represented approximately 7.0% and 4.0% of the Company's invested assets as of December 31, 2012 and 2011, respectively. The Company makes mortgage loans on income producing properties, such as apartments, retail and office buildings, light warehouses and light industrial facilities. Loan-to-value ratios at the time of loan approval are 75% or less. The distribution of mortgage loans, gross of valuation allowances, by property type is as follows as of December 31, 2012 and 2011 (dollars in thousands):

		2012				2011
		Recorded Investment		Percentage of Total		Recorded Investment		Percentage of Total
Property type:		Recorded Investment		Percentage of Total		Recorded Investment		Percentage of Total
	Apartment	$	229,266	9.9	%	$	124,674	12.4	%
	Retail		669,958	29.0			335,745	33.5
	Office building		825,406	35.7			264,584	26.4
	Industrial		455,682	19.7			200,762	20.0
	Other commercial		131,855	5.7			77,759	7.7
Total		$	2,312,167	100.0	%	$	1,003,524	100.0	%

As of December 31, 2012 and 2011, the Company's mortgage loans, gross of valuation allowances, were distributed throughout the United States as follows (dollars in thousands):

		2012				2011
		Recorded Investment		Percentage of Total		Recorded Investment		Percentage of Total
		Recorded Investment		Percentage of Total		Recorded Investment		Percentage of Total
Pacific		$	593,589	25.7	%	$	269,922	26.9	%
South Atlantic			477,068	20.5			233,534	23.3
Mountain			233,174	10.1			116,224	11.6
Middle Atlantic			300,475	13.0			86,590	8.6
West North Central			168,063	7.3			69,789	7.0
East North Central			224,122	9.7			92,861	9.2
West South Central			161,451	7.0			58,506	5.8
East South Central			62,789	2.7			40,767	4.1
New England			91,436	4.0			35,331	3.5
	Total	$	2,312,167	100.0	%	$	1,003,524	100.0	%

Information regarding the Company's credit quality indicators for its recorded investment in mortgage loans, gross of valuation allowances, as of December 31, 2012 and 2011 are as follows (dollars in thousands):

The age analysis of the Company's past due recorded investment in mortgage loans, gross of valuation allowances, as of December 31, 2012 and 2011 are as follows (dollars in thousands):


			2012		2011
31-60 days past due			$	7,504	$	21,800
61-90 days past due				--		--
Greater than 90 days				16,886		20,316
	Total past due			24,390		42,116
Current				2,287,777		961,408
		Total	$	2,312,167	$	1,003,524

The following table presents the recorded investment in mortgage loans, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, at (dollars in thousands):


			December 31,
			2012		2011
Mortgage loans:
	Evaluated individually for credit losses		$	39,956	$	60,904
	Evaluated collectively for credit losses			2,272,211		942,620
		Mortgage loans, gross of valuation allowances		2,312,167		1,003,524

Valuation allowances:
	Specific for credit losses			6,980		8,188
	Non-specifically identified credit losses			4,600		3,605
		Total valuation allowances		11,580		11,793

		Mortgage loans, net of valuation allowances	$	2,300,587	$	991,731

Information regarding the portion of the Company's mortgage loans that were impaired as of December 31, 2012 and 2011 is as follows (dollars in thousands):

		Unpaid Principal Balance		Recorded Investment		Related Allowance		Carrying Value
December 31, 2012:
Impaired mortgage loans with no valuation allowance recorded		$	13,039	$	12,496	$	--	$	12,496
Impaired mortgage loans with valuation allowance recorded			27,527		27,460		6,980		20,480
	Total impaired mortgage loans	$	40,566	$	39,956	$	6,980	$	32,976

December 31, 2011:
Impaired mortgage loans with no valuation allowance recorded		$	32,088	$	31,496	$	--	$	31,496
Impaired mortgage loans with valuation allowance recorded			29,724		29,408		8,188		21,220
	Total impaired mortgage loans	$	61,812	$	60,904	$	8,188	$	52,716

The Company's average investment balance of impaired mortgage loans and the related interest income are reflected in the table below for the years ended December 31, 2012, 2011 and 2010 (dollars in thousands):


		2012				2011				2010
		Average Investment⁽¹⁾		Interest Income		Average Investment⁽¹⁾		Interest Income		Average Investment⁽¹⁾		Interest Income
Impaired mortgage loans with no valuation allowance recorded		$	15,549	$	1,244	$	14,877	$	630	$	19,253	$	525
Impaired mortgage loans with valuation allowance recorded			34,434		425		27,712		418		21,925		295
	Total	$	49,983	$	1,669	$	42,589	$	1,048	$	41,178	$	820

(1)	Average recorded investment represents the average loan balances as of the beginning of period and all subsequent quarterly end of period balances.

The Company did not acquire any impaired mortgage loans during the years ended December 31, 2012 and 2011. The Company had $16.9 million and $20.3 million of mortgage loans, gross of valuation allowances, that were on a nonaccrual status at December 31, 2012 and 2011, respectively.

Policy loans comprised approximately 3.9% and 5.0% of the Company's invested assets as of December 31, 2012 and 2011, respectively, substantially all of which are associated with one client. These policy loans present no credit risk because the amount of the loan cannot exceed the obligation due to the ceding company upon the death of the insured or surrender of the underlying policy. The provisions of the treaties in force and the underlying policies determine the policy loan interest rates. As policy loans represent premature distributions of policy liabilities, they have the effect of reducing future disintermediation risk. In addition, the Company earns a spread between the interest rate earned on policy loans and the interest rate credited to corresponding liabilities.

Funds withheld at interest comprised approximately 17.0% and 21.7% of the Company's invested assets as of December 31, 2012 and 2011, respectively. Of the $5.6 billion funds withheld at interest balance, net of embedded derivatives, as of December 31, 2012, $3.9 billion of the balance is associated with one client. For reinsurance agreements written on a modified coinsurance basis and certain agreements written on a coinsurance funds withheld basis, assets equal to the net statutory reserves are withheld and legally owned and managed by the ceding company and are reflected as funds withheld at interest on the Company's consolidated balance sheets. In the event of a ceding company's insolvency, the Company would need to assert a claim on the assets supporting its reserve liabilities. However, the risk of loss to the Company is mitigated by its ability to offset amounts it owes the ceding company for claims or allowances with amounts owed to the Company from the ceding company. Interest accrues to these assets at rates defined by the treaty terms and the Company estimates the yield was approximately 6.97%, 6.87% and 7.20% for the years ended December 31, 2012, 2011 and 2010, respectively. Changes in these estimated yields are affected by equity options held in the funds withheld portfolio associated with equity-indexed annuity treaties. The Company is subject to the investment performance on the withheld assets, although it does not directly control them. These assets are primarily fixed maturity investment securities and pose risks similar to the fixed maturity securities the Company owns. To mitigate this risk, the Company helps set the investment guidelines followed by the ceding company and monitors compliance.

Other invested assets primarily include equity securities, collateral (included in other), limited partnership interests, real estate joint ventures, real estate-held-for-investment (included in other), structured loans and derivative contracts. Other invested assets represented approximately 3.5% and 4.1% of the Company's invested assets as of December 31, 2012 and 2011, respectively. Carrying values of these assets as of December 31, 2012 and 2011 are as follows (dollars in thousands):

During the second quarter of 2012, the Company added a large fixed deferred annuity reinsurance transaction in its U.S. Asset-Intensive sub-segment. This transaction increased the Company's invested asset base by approximately $5.4 billion which was reflected on the condensed consolidated balance sheet as of June 30, 2012 as an investment receivable. In satisfaction of this investment receivable, the Company received the following on July 31, 2012 and August 3, 2012 (dollars in thousands):

				Amortized Cost/		Estimated Fair Value
				Recorded Investment		at Date of Transfer
Fixed maturity securities – available for sale:
	Corporate securities			$	2,585,095	$	2,606,816
	Asset-backed securities				137,251		138,918
	Commercial mortgage-backed securities				703,313		704,065
	U.S. Government and agencies securities				240,952		256,168
	State and political subdivision securities				27,297		27,555
	Other foreign government, supranational, and
		foreign government-sponsored enterprises			56,776		55,437
			Total fixed maturity securities – available for sale		3,750,684		3,788,959
Mortgage loans on real estate					1,009,454		1,021,661
Short-term investments					101,428		101,338
Cash and cash equivalents					501,593		501,593
Accrued interest					43,739		43,739
			Total	$	5,406,898	$	5,457,290

The securities transferred to the Company related to the transaction are considered a non-cash transaction in the consolidated statement of cash flows.