x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Iowa
|
|
42-1447959
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
||||
Available for sale, at fair value (amortized cost: 2018 - $44,510,813; 2017 - $43,116,759)
|
$
|
45,551,348
|
|
|
$
|
45,372,989
|
|
Held for investment, at amortized cost (fair value: 2018 - $69,441; 2017 - $76,460)
|
77,043
|
|
|
77,041
|
|
||
Mortgage loans on real estate
|
2,699,637
|
|
|
2,665,531
|
|
||
Derivative instruments
|
847,741
|
|
|
1,568,380
|
|
||
Other investments
|
481,825
|
|
|
616,764
|
|
||
Total investments
|
49,657,594
|
|
|
50,300,705
|
|
||
|
|
|
|
||||
Cash and cash equivalents
|
723,784
|
|
|
1,434,045
|
|
||
Coinsurance deposits
|
4,871,912
|
|
|
4,858,289
|
|
||
Accrued investment income
|
454,519
|
|
|
429,008
|
|
||
Deferred policy acquisition costs
|
3,039,311
|
|
|
2,714,523
|
|
||
Deferred sales inducements
|
2,219,597
|
|
|
2,001,892
|
|
||
Deferred income taxes
|
159,601
|
|
|
38,147
|
|
||
Other assets
|
175,006
|
|
|
254,127
|
|
||
Total assets
|
$
|
61,301,324
|
|
|
$
|
62,030,736
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Policy benefit reserves
|
$
|
56,072,140
|
|
|
$
|
56,142,673
|
|
Other policy funds and contract claims
|
280,072
|
|
|
282,884
|
|
||
Notes payable
|
494,215
|
|
|
494,093
|
|
||
Subordinated debentures
|
242,667
|
|
|
242,565
|
|
||
Amounts due under repurchase agreements
|
137,223
|
|
|
—
|
|
||
Income taxes payable
|
72,191
|
|
|
34,285
|
|
||
Other liabilities
|
1,455,826
|
|
|
1,984,079
|
|
||
Total liabilities
|
58,754,334
|
|
|
59,180,579
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, par value $1 per share, 2,000,000 shares authorized,
2018 and 2017 - no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $1 per share, 200,000,000 shares authorized; issued and outstanding:
2018 - 89,983,823 shares (excluding 1,814,460 treasury shares);
2017 - 89,331,087 shares (excluding 2,064,727 treasury shares)
|
89,984
|
|
|
89,331
|
|
||
Additional paid-in capital
|
798,835
|
|
|
791,446
|
|
||
Accumulated other comprehensive income
|
399,982
|
|
|
724,599
|
|
||
Retained earnings
|
1,258,189
|
|
|
1,244,781
|
|
||
Total stockholders' equity
|
2,546,990
|
|
|
2,850,157
|
|
||
Total liabilities and stockholders' equity
|
$
|
61,301,324
|
|
|
$
|
62,030,736
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Premiums and other considerations
|
$
|
9,053
|
|
|
$
|
9,402
|
|
Annuity product charges
|
50,723
|
|
|
43,572
|
|
||
Net investment income
|
510,784
|
|
|
485,597
|
|
||
Change in fair value of derivatives
|
(451,083
|
)
|
|
386,533
|
|
||
Net realized gains on investments, excluding other than temporary impairment ("OTTI") losses
|
302
|
|
|
2,338
|
|
||
OTTI losses on investments:
|
|
|
|
||||
Total OTTI losses
|
(907
|
)
|
|
—
|
|
||
Portion of OTTI losses recognized in (from) other comprehensive income
|
—
|
|
|
(141
|
)
|
||
Net OTTI losses recognized in operations
|
(907
|
)
|
|
(141
|
)
|
||
Total revenues
|
118,872
|
|
|
927,301
|
|
||
|
|
|
|
||||
Benefits and expenses:
|
|
|
|
||||
Insurance policy benefits and change in future policy benefits
|
12,094
|
|
|
11,875
|
|
||
Interest sensitive and index product benefits
|
514,095
|
|
|
419,139
|
|
||
Amortization of deferred sales inducements
|
100,423
|
|
|
62,325
|
|
||
Change in fair value of embedded derivatives
|
(867,232
|
)
|
|
224,170
|
|
||
Interest expense on notes and loan payable
|
6,372
|
|
|
7,722
|
|
||
Interest expense on subordinated debentures
|
3,630
|
|
|
3,336
|
|
||
Amortization of deferred policy acquisition costs
|
140,639
|
|
|
89,678
|
|
||
Other operating costs and expenses
|
31,240
|
|
|
27,579
|
|
||
Total benefits and expenses
|
(58,739
|
)
|
|
845,824
|
|
||
Income before income taxes
|
177,611
|
|
|
81,477
|
|
||
Income tax expense
|
36,649
|
|
|
27,538
|
|
||
Net income
|
$
|
140,962
|
|
|
$
|
53,939
|
|
|
|
|
|
||||
Earnings per common share
|
$
|
1.57
|
|
|
$
|
0.61
|
|
Earnings per common share - assuming dilution
|
$
|
1.55
|
|
|
$
|
0.60
|
|
|
|
|
|
||||
Weighted average common shares outstanding (in thousands):
|
|
|
|
||||
Earnings per common share
|
90,017
|
|
|
88,647
|
|
||
Earnings per common share - assuming dilution
|
91,139
|
|
|
89,976
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Net income
|
$
|
140,962
|
|
|
$
|
53,939
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Change in net unrealized investment gains/losses (1)
|
(572,033
|
)
|
|
129,124
|
|
||
Noncredit component of OTTI losses (1)
|
—
|
|
|
65
|
|
||
Reclassification of unrealized investment gains/losses to net income (1)
|
(339
|
)
|
|
930
|
|
||
Other comprehensive income (loss) before income tax
|
(572,372
|
)
|
|
130,119
|
|
||
Income tax effect related to other comprehensive income (loss)
|
120,201
|
|
|
(45,542
|
)
|
||
Other comprehensive income (loss)
|
(452,171
|
)
|
|
84,577
|
|
||
Comprehensive income (loss)
|
$
|
(311,209
|
)
|
|
$
|
138,516
|
|
(1)
|
Net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income |
|
Retained
Earnings
|
|
Total
Stockholders'
Equity
|
||||||||||
Balance at December 31, 2016
|
$
|
88,001
|
|
|
$
|
770,344
|
|
|
$
|
339,966
|
|
|
$
|
1,093,284
|
|
|
$
|
2,291,595
|
|
Net income for period
|
—
|
|
|
—
|
|
|
—
|
|
|
53,939
|
|
|
53,939
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
84,577
|
|
|
—
|
|
|
84,577
|
|
|||||
Share-based compensation
|
—
|
|
|
2,403
|
|
|
—
|
|
|
—
|
|
|
2,403
|
|
|||||
Issuance of 629,553 shares of common stock under compensation plans
|
630
|
|
|
3,087
|
|
|
—
|
|
|
—
|
|
|
3,717
|
|
|||||
Balance at March 31, 2017
|
$
|
88,631
|
|
|
$
|
775,834
|
|
|
$
|
424,543
|
|
|
$
|
1,147,223
|
|
|
$
|
2,436,231
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2017
|
$
|
89,331
|
|
|
$
|
791,446
|
|
|
$
|
724,599
|
|
|
$
|
1,244,781
|
|
|
$
|
2,850,157
|
|
Net income for period
|
—
|
|
|
—
|
|
|
—
|
|
|
140,962
|
|
|
140,962
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(452,171
|
)
|
|
—
|
|
|
(452,171
|
)
|
|||||
Implementation of accounting standard related to the reclassification of certain tax effects
|
—
|
|
|
—
|
|
|
127,554
|
|
|
(127,554
|
)
|
|
—
|
|
|||||
Share-based compensation
|
—
|
|
|
3,526
|
|
|
—
|
|
|
—
|
|
|
3,526
|
|
|||||
Issuance of 652,736 shares of common stock under compensation plans
|
653
|
|
|
3,863
|
|
|
—
|
|
|
—
|
|
|
4,516
|
|
|||||
Balance at March 31, 2018
|
$
|
89,984
|
|
|
$
|
798,835
|
|
|
$
|
399,982
|
|
|
$
|
1,258,189
|
|
|
$
|
2,546,990
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
140,962
|
|
|
$
|
53,939
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Interest sensitive and index product benefits
|
514,095
|
|
|
419,139
|
|
||
Amortization of deferred sales inducements
|
100,423
|
|
|
62,325
|
|
||
Annuity product charges
|
(50,723
|
)
|
|
(43,572
|
)
|
||
Change in fair value of embedded derivatives
|
(867,232
|
)
|
|
224,170
|
|
||
Change in traditional life and accident and health insurance reserves
|
2,049
|
|
|
726
|
|
||
Policy acquisition costs deferred
|
(96,562
|
)
|
|
(110,574
|
)
|
||
Amortization of deferred policy acquisition costs
|
140,639
|
|
|
89,678
|
|
||
Provision for depreciation and other amortization
|
900
|
|
|
957
|
|
||
Amortization of discounts and premiums on investments
|
6,002
|
|
|
2,800
|
|
||
Realized gains (losses) on investments and net OTTI losses recognized in operations
|
605
|
|
|
(2,197
|
)
|
||
Distributions from equity method investments
|
66
|
|
|
122
|
|
||
Change in fair value of derivatives
|
450,906
|
|
|
(386,842
|
)
|
||
Deferred income taxes
|
(1,253
|
)
|
|
(3,670
|
)
|
||
Share-based compensation
|
3,526
|
|
|
2,403
|
|
||
Change in accrued investment income
|
(25,511
|
)
|
|
(26,371
|
)
|
||
Change in income taxes recoverable/payable
|
37,906
|
|
|
31,161
|
|
||
Change in other assets
|
(470
|
)
|
|
33
|
|
||
Change in other policy funds and contract claims
|
(4,343
|
)
|
|
(6,985
|
)
|
||
Change in collateral held for derivatives
|
(784,932
|
)
|
|
233,992
|
|
||
Change in other liabilities
|
(6,472
|
)
|
|
(38,754
|
)
|
||
Other
|
(3,757
|
)
|
|
(4,431
|
)
|
||
Net cash provided by (used in) operating activities
|
(443,176
|
)
|
|
498,049
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
||||
Sales, maturities, or repayments of investments:
|
|
|
|
||||
Fixed maturity securities - available for sale
|
265,837
|
|
|
517,301
|
|
||
Mortgage loans on real estate
|
68,017
|
|
|
75,110
|
|
||
Derivative instruments
|
479,675
|
|
|
349,732
|
|
||
Other investments
|
153,936
|
|
|
4,868
|
|
||
Acquisitions of investments:
|
|
|
|
||||
Fixed maturity securities - available for sale
|
(1,310,985
|
)
|
|
(1,216,014
|
)
|
||
Mortgage loans on real estate
|
(101,037
|
)
|
|
(100,797
|
)
|
||
Derivative instruments
|
(200,542
|
)
|
|
(147,283
|
)
|
||
Other investments
|
(15,131
|
)
|
|
(1,550
|
)
|
||
Purchases of property, furniture and equipment
|
(1,099
|
)
|
|
(1,402
|
)
|
||
Net cash used in investing activities
|
(661,329
|
)
|
|
(520,035
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Financing activities
|
|
|
|
||||
Receipts credited to annuity and single premium universal life policyholder account balances
|
$
|
1,020,429
|
|
|
$
|
1,073,583
|
|
Coinsurance deposits
|
(6,867
|
)
|
|
63,746
|
|
||
Return of annuity policyholder account balances
|
(738,219
|
)
|
|
(727,494
|
)
|
||
Net proceeds from amounts due under repurchase agreements
|
137,223
|
|
|
—
|
|
||
Proceeds from issuance of common stock
|
4,516
|
|
|
3,717
|
|
||
Change in checks in excess of cash balance
|
(22,838
|
)
|
|
(10,084
|
)
|
||
Net cash provided by financing activities
|
394,244
|
|
|
403,468
|
|
||
Increase (decrease) in cash and cash equivalents
|
(710,261
|
)
|
|
381,482
|
|
||
Cash and cash equivalents at beginning of period
|
1,434,045
|
|
|
791,266
|
|
||
Cash and cash equivalents at end of period
|
$
|
723,784
|
|
|
$
|
1,172,748
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information
|
|
|
|
||||
Cash paid during period for:
|
|
|
|
||||
Interest expense
|
$
|
3,488
|
|
|
$
|
18,682
|
|
Income taxes
|
—
|
|
|
47
|
|
||
Non-cash operating activity:
|
|
|
|
||||
Deferral of sales inducements
|
43,670
|
|
|
65,245
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Available for sale
|
$
|
45,551,348
|
|
|
$
|
45,551,348
|
|
|
$
|
45,372,989
|
|
|
$
|
45,372,989
|
|
Held for investment
|
77,043
|
|
|
69,441
|
|
|
77,041
|
|
|
76,460
|
|
||||
Mortgage loans on real estate
|
2,699,637
|
|
|
2,684,976
|
|
|
2,665,531
|
|
|
2,670,037
|
|
||||
Derivative instruments
|
847,741
|
|
|
847,741
|
|
|
1,568,380
|
|
|
1,568,380
|
|
||||
Other investments
|
481,825
|
|
|
472,642
|
|
|
616,764
|
|
|
605,894
|
|
||||
Cash and cash equivalents
|
723,784
|
|
|
723,784
|
|
|
1,434,045
|
|
|
1,434,045
|
|
||||
Coinsurance deposits
|
4,871,912
|
|
|
4,402,849
|
|
|
4,858,289
|
|
|
4,347,990
|
|
||||
Interest rate caps
|
890
|
|
|
890
|
|
|
415
|
|
|
415
|
|
||||
Interest rate swap
|
427
|
|
|
427
|
|
|
—
|
|
|
—
|
|
||||
Counterparty collateral
|
124,778
|
|
|
124,778
|
|
|
186,108
|
|
|
186,108
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Policy benefit reserves
|
55,713,429
|
|
|
47,137,678
|
|
|
55,786,011
|
|
|
46,344,931
|
|
||||
Single premium immediate annuity (SPIA) benefit reserves
|
279,678
|
|
|
288,991
|
|
|
282,563
|
|
|
292,153
|
|
||||
Notes payable
|
494,215
|
|
|
506,345
|
|
|
494,093
|
|
|
521,800
|
|
||||
Subordinated debentures
|
242,667
|
|
|
229,588
|
|
|
242,565
|
|
|
244,117
|
|
||||
Amounts due under repurchase agreements
|
137,223
|
|
|
137,223
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap
|
—
|
|
|
—
|
|
|
789
|
|
|
789
|
|
Level 1—
|
Quoted prices are available in active markets for identical financial instruments as of the reporting date. We do not adjust the quoted price for these financial instruments, even in situations where we hold a large position and a sale could reasonably impact the quoted price.
|
Level 2—
|
Quoted prices in active markets for similar financial instruments, quoted prices for identical or similar financial instruments in markets that are not active; and models and other valuation methodologies using inputs other than quoted prices that are observable.
|
Level 3—
|
Models and other valuation methodologies using significant inputs that are unobservable for financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in Level 3 are securities for which no market activity or data exists and for which we used discounted expected future cash flows with our own assumptions about what a market participant would use in determining fair value.
|
|
Total
Fair Value
|
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
||||||||
United States Government full faith and credit
|
$
|
11,433
|
|
|
$
|
5,541
|
|
|
$
|
5,892
|
|
|
$
|
—
|
|
United States Government sponsored agencies
|
1,270,106
|
|
|
—
|
|
|
1,270,106
|
|
|
—
|
|
||||
United States municipalities, states and territories
|
4,137,005
|
|
|
—
|
|
|
4,137,005
|
|
|
—
|
|
||||
Foreign government obligations
|
231,671
|
|
|
—
|
|
|
231,671
|
|
|
—
|
|
||||
Corporate securities
|
29,584,128
|
|
|
375
|
|
|
29,583,753
|
|
|
—
|
|
||||
Residential mortgage backed securities
|
1,102,609
|
|
|
—
|
|
|
1,102,609
|
|
|
—
|
|
||||
Commercial mortgage backed securities
|
5,596,882
|
|
|
—
|
|
|
5,596,882
|
|
|
—
|
|
||||
Other asset backed securities
|
3,617,514
|
|
|
—
|
|
|
3,617,514
|
|
|
—
|
|
||||
Other investments: equity securities
|
157,431
|
|
|
150,000
|
|
|
7,431
|
|
|
—
|
|
||||
Derivative instruments
|
847,741
|
|
|
—
|
|
|
847,741
|
|
|
—
|
|
||||
Cash and cash equivalents
|
723,784
|
|
|
723,784
|
|
|
—
|
|
|
—
|
|
||||
Interest rate caps
|
890
|
|
|
—
|
|
|
890
|
|
|
—
|
|
||||
Interest rate swap
|
427
|
|
|
—
|
|
|
427
|
|
|
—
|
|
||||
Counterparty collateral
|
124,778
|
|
|
—
|
|
|
124,778
|
|
|
—
|
|
||||
|
$
|
47,406,399
|
|
|
$
|
879,700
|
|
|
$
|
46,526,699
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Fixed index annuities - embedded derivatives
|
$
|
8,233,557
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,233,557
|
|
|
$
|
8,233,557
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,233,557
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
||||||||
United States Government full faith and credit
|
$
|
11,876
|
|
|
$
|
5,640
|
|
|
$
|
6,236
|
|
|
$
|
—
|
|
United States Government sponsored agencies
|
1,305,017
|
|
|
—
|
|
|
1,305,017
|
|
|
—
|
|
||||
United States municipalities, states and territories
|
4,166,812
|
|
|
—
|
|
|
4,166,812
|
|
|
—
|
|
||||
Foreign government obligations
|
239,360
|
|
|
—
|
|
|
239,360
|
|
|
—
|
|
||||
Corporate securities
|
29,878,971
|
|
|
5
|
|
|
29,878,966
|
|
|
—
|
|
||||
Residential mortgage backed securities
|
1,105,567
|
|
|
—
|
|
|
1,105,567
|
|
|
—
|
|
||||
Commercial mortgage backed securities
|
5,544,850
|
|
|
—
|
|
|
5,544,850
|
|
|
—
|
|
||||
Other asset backed securities
|
3,120,536
|
|
|
—
|
|
|
3,120,536
|
|
|
—
|
|
||||
Other investments: equity securities, available for sale
|
292,429
|
|
|
285,000
|
|
|
7,429
|
|
|
—
|
|
||||
Derivative instruments
|
1,568,380
|
|
|
—
|
|
|
1,568,380
|
|
|
—
|
|
||||
Cash and cash equivalents
|
1,434,045
|
|
|
1,434,045
|
|
|
—
|
|
|
—
|
|
||||
Interest rate caps
|
415
|
|
|
—
|
|
|
415
|
|
|
—
|
|
||||
Counterparty collateral
|
186,108
|
|
|
—
|
|
|
186,108
|
|
|
—
|
|
||||
|
$
|
48,854,366
|
|
|
$
|
1,724,690
|
|
|
$
|
47,129,676
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
789
|
|
|
$
|
—
|
|
|
$
|
789
|
|
|
$
|
—
|
|
Fixed index annuities - embedded derivatives
|
8,790,427
|
|
|
—
|
|
|
—
|
|
|
8,790,427
|
|
||||
|
$
|
8,791,216
|
|
|
$
|
—
|
|
|
$
|
789
|
|
|
$
|
8,790,427
|
|
•
|
reported trading prices,
|
•
|
benchmark yields,
|
•
|
broker-dealer quotes,
|
•
|
benchmark securities,
|
•
|
bids and offers,
|
•
|
credit ratings,
|
•
|
relative credit information, and
|
•
|
other reference data.
|
|
|
Average Lapse Rates
|
|
Average Partial Withdrawal Rates
|
||||
Contract Duration (Years)
|
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
1 - 5
|
|
2.11%
|
|
1.83%
|
|
3.33%
|
|
3.32%
|
6 - 10
|
|
7.30%
|
|
7.01%
|
|
3.33%
|
|
3.32%
|
11 - 15
|
|
11.33%
|
|
11.31%
|
|
3.34%
|
|
3.34%
|
16 - 20
|
|
11.91%
|
|
11.96%
|
|
3.24%
|
|
3.20%
|
20+
|
|
11.58%
|
|
11.62%
|
|
3.21%
|
|
3.20%
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Fixed index annuities - embedded derivatives
|
|
|
|
||||
Beginning balance
|
$
|
8,790,427
|
|
|
$
|
6,563,288
|
|
Premiums less benefits
|
549,153
|
|
|
411,502
|
|
||
Change in fair value, net
|
(1,106,023
|
)
|
|
76,210
|
|
||
Ending balance
|
$
|
8,233,557
|
|
|
$
|
7,051,000
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
||||||||
United States Government full faith and credit
|
$
|
11,696
|
|
|
$
|
110
|
|
|
$
|
(373
|
)
|
|
$
|
11,433
|
|
United States Government sponsored agencies
|
1,308,312
|
|
|
21,134
|
|
|
(59,340
|
)
|
|
1,270,106
|
|
||||
United States municipalities, states and territories
|
3,853,098
|
|
|
296,762
|
|
|
(12,855
|
)
|
|
4,137,005
|
|
||||
Foreign government obligations
|
227,617
|
|
|
8,502
|
|
|
(4,448
|
)
|
|
231,671
|
|
||||
Corporate securities
|
28,801,351
|
|
|
1,186,607
|
|
|
(403,830
|
)
|
|
29,584,128
|
|
||||
Residential mortgage backed securities
|
1,044,032
|
|
|
65,581
|
|
|
(7,004
|
)
|
|
1,102,609
|
|
||||
Commercial mortgage backed securities
|
5,685,290
|
|
|
33,098
|
|
|
(121,506
|
)
|
|
5,596,882
|
|
||||
Other asset backed securities
|
3,579,417
|
|
|
52,730
|
|
|
(14,633
|
)
|
|
3,617,514
|
|
||||
|
$
|
44,510,813
|
|
|
$
|
1,664,524
|
|
|
$
|
(623,989
|
)
|
|
$
|
45,551,348
|
|
Held for investment:
|
|
|
|
|
|
|
|
||||||||
Corporate security
|
$
|
77,043
|
|
|
$
|
—
|
|
|
$
|
(7,602
|
)
|
|
$
|
69,441
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
||||||||
United States Government full faith and credit
|
$
|
11,861
|
|
|
$
|
162
|
|
|
$
|
(147
|
)
|
|
$
|
11,876
|
|
United States Government sponsored agencies
|
1,308,290
|
|
|
28,457
|
|
|
(31,730
|
)
|
|
1,305,017
|
|
||||
United States municipalities, states and territories
|
3,804,360
|
|
|
366,048
|
|
|
(3,596
|
)
|
|
4,166,812
|
|
||||
Foreign government obligations
|
228,214
|
|
|
13,171
|
|
|
(2,025
|
)
|
|
239,360
|
|
||||
Corporate securities
|
28,127,653
|
|
|
1,897,005
|
|
|
(145,687
|
)
|
|
29,878,971
|
|
||||
Residential mortgage backed securities
|
1,028,484
|
|
|
79,554
|
|
|
(2,471
|
)
|
|
1,105,567
|
|
||||
Commercial mortgage backed securities
|
5,531,922
|
|
|
82,768
|
|
|
(69,840
|
)
|
|
5,544,850
|
|
||||
Other asset backed securities
|
3,075,975
|
|
|
57,966
|
|
|
(13,405
|
)
|
|
3,120,536
|
|
||||
|
$
|
43,116,759
|
|
|
$
|
2,525,131
|
|
|
$
|
(268,901
|
)
|
|
$
|
45,372,989
|
|
Held for investment:
|
|
|
|
|
|
|
|
||||||||
Corporate security
|
$
|
77,041
|
|
|
$
|
—
|
|
|
$
|
(581
|
)
|
|
$
|
76,460
|
|
|
|
|
|
|
|
|
|
||||||||
Other investments: equity securities, available for sale:
|
|
|
|
|
|
|
|
||||||||
Finance, insurance, and real estate
|
$
|
292,429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
292,429
|
|
|
Available for sale
|
|
Held for investment
|
||||||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Due in one year or less
|
$
|
218,825
|
|
|
$
|
223,487
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
5,615,360
|
|
|
5,673,765
|
|
|
—
|
|
|
—
|
|
||||
Due after five years through ten years
|
10,439,109
|
|
|
10,428,466
|
|
|
—
|
|
|
—
|
|
||||
Due after ten years through twenty years
|
9,188,746
|
|
|
9,774,966
|
|
|
—
|
|
|
—
|
|
||||
Due after twenty years
|
8,740,034
|
|
|
9,133,659
|
|
|
77,043
|
|
|
69,441
|
|
||||
|
34,202,074
|
|
|
35,234,343
|
|
|
77,043
|
|
|
69,441
|
|
||||
Residential mortgage backed securities
|
1,044,032
|
|
|
1,102,609
|
|
|
—
|
|
|
—
|
|
||||
Commercial mortgage backed securities
|
5,685,290
|
|
|
5,596,882
|
|
|
—
|
|
|
—
|
|
||||
Other asset backed securities
|
3,579,417
|
|
|
3,617,514
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
44,510,813
|
|
|
$
|
45,551,348
|
|
|
$
|
77,043
|
|
|
$
|
69,441
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Net unrealized gains on available for sale fixed maturity securities
|
$
|
1,040,535
|
|
|
$
|
2,256,230
|
|
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements
|
(562,755
|
)
|
|
(1,206,078
|
)
|
||
Deferred income tax valuation allowance reversal
|
22,534
|
|
|
22,534
|
|
||
Deferred income tax expense (a)
|
(100,332
|
)
|
|
(348,087
|
)
|
||
Net unrealized gains reported as accumulated other comprehensive income
|
$
|
399,982
|
|
|
$
|
724,599
|
|
(a)
|
December 31, 2017 includes
$128 million
related to the impact of Tax Reform that was reclassified between accumulated other comprehensive income and retained earnings within our consolidated balance sheet during the first quarter of 2018. For more information regarding the reclassification, see Note 1 to our unaudited consolidated financial statements.
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government full faith and credit
|
$
|
3,193
|
|
|
$
|
(50
|
)
|
|
$
|
6,380
|
|
|
$
|
(323
|
)
|
|
$
|
9,573
|
|
|
$
|
(373
|
)
|
United States Government sponsored agencies
|
74,632
|
|
|
(1,513
|
)
|
|
932,691
|
|
|
(57,827
|
)
|
|
1,007,323
|
|
|
(59,340
|
)
|
||||||
United States municipalities, states and territories
|
224,928
|
|
|
(5,000
|
)
|
|
124,097
|
|
|
(7,855
|
)
|
|
349,025
|
|
|
(12,855
|
)
|
||||||
Foreign government obligations
|
127,620
|
|
|
(2,442
|
)
|
|
12,297
|
|
|
(2,006
|
)
|
|
139,917
|
|
|
(4,448
|
)
|
||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance, insurance and real estate
|
1,980,979
|
|
|
(46,008
|
)
|
|
599,683
|
|
|
(48,915
|
)
|
|
2,580,662
|
|
|
(94,923
|
)
|
||||||
Manufacturing, construction and mining
|
1,378,585
|
|
|
(29,518
|
)
|
|
229,805
|
|
|
(17,840
|
)
|
|
1,608,390
|
|
|
(47,358
|
)
|
||||||
Utilities and related sectors
|
1,830,012
|
|
|
(41,549
|
)
|
|
239,209
|
|
|
(18,121
|
)
|
|
2,069,221
|
|
|
(59,670
|
)
|
||||||
Wholesale/retail trade
|
755,307
|
|
|
(16,446
|
)
|
|
173,229
|
|
|
(16,809
|
)
|
|
928,536
|
|
|
(33,255
|
)
|
||||||
Services, media and other
|
3,498,221
|
|
|
(85,932
|
)
|
|
855,680
|
|
|
(82,692
|
)
|
|
4,353,901
|
|
|
(168,624
|
)
|
||||||
Residential mortgage backed securities
|
286,561
|
|
|
(4,535
|
)
|
|
24,870
|
|
|
(2,469
|
)
|
|
311,431
|
|
|
(7,004
|
)
|
||||||
Commercial mortgage backed securities
|
2,495,283
|
|
|
(43,167
|
)
|
|
1,310,142
|
|
|
(78,339
|
)
|
|
3,805,425
|
|
|
(121,506
|
)
|
||||||
Other asset backed securities
|
797,174
|
|
|
(6,376
|
)
|
|
187,857
|
|
|
(8,257
|
)
|
|
985,031
|
|
|
(14,633
|
)
|
||||||
|
$
|
13,452,495
|
|
|
$
|
(282,536
|
)
|
|
$
|
4,695,940
|
|
|
$
|
(341,453
|
)
|
|
$
|
18,148,435
|
|
|
$
|
(623,989
|
)
|
Held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate security:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69,441
|
|
|
$
|
(7,602
|
)
|
|
$
|
69,441
|
|
|
$
|
(7,602
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government full faith and credit
|
$
|
1,565
|
|
|
$
|
(10
|
)
|
|
$
|
6,731
|
|
|
$
|
(137
|
)
|
|
$
|
8,296
|
|
|
$
|
(147
|
)
|
United States Government sponsored agencies
|
44,794
|
|
|
(180
|
)
|
|
958,965
|
|
|
(31,550
|
)
|
|
1,003,759
|
|
|
(31,730
|
)
|
||||||
United States municipalities, states and territories
|
44,736
|
|
|
(128
|
)
|
|
128,499
|
|
|
(3,468
|
)
|
|
173,235
|
|
|
(3,596
|
)
|
||||||
Foreign government obligations
|
49,663
|
|
|
(337
|
)
|
|
12,625
|
|
|
(1,688
|
)
|
|
62,288
|
|
|
(2,025
|
)
|
||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance, insurance and real estate
|
456,244
|
|
|
(5,135
|
)
|
|
600,655
|
|
|
(28,043
|
)
|
|
1,056,899
|
|
|
(33,178
|
)
|
||||||
Manufacturing, construction and mining
|
222,985
|
|
|
(3,475
|
)
|
|
231,196
|
|
|
(10,849
|
)
|
|
454,181
|
|
|
(14,324
|
)
|
||||||
Utilities and related sectors
|
395,183
|
|
|
(4,099
|
)
|
|
249,416
|
|
|
(8,901
|
)
|
|
644,599
|
|
|
(13,000
|
)
|
||||||
Wholesale/retail trade
|
152,941
|
|
|
(1,249
|
)
|
|
178,635
|
|
|
(11,371
|
)
|
|
331,576
|
|
|
(12,620
|
)
|
||||||
Services, media and other
|
729,124
|
|
|
(19,000
|
)
|
|
891,654
|
|
|
(53,565
|
)
|
|
1,620,778
|
|
|
(72,565
|
)
|
||||||
Residential mortgage backed securities
|
39,771
|
|
|
(387
|
)
|
|
32,917
|
|
|
(2,084
|
)
|
|
72,688
|
|
|
(2,471
|
)
|
||||||
Commercial mortgage backed securities
|
1,096,757
|
|
|
(10,385
|
)
|
|
1,306,437
|
|
|
(59,455
|
)
|
|
2,403,194
|
|
|
(69,840
|
)
|
||||||
Other asset backed securities
|
765,531
|
|
|
(3,499
|
)
|
|
217,595
|
|
|
(9,906
|
)
|
|
983,126
|
|
|
(13,405
|
)
|
||||||
|
$
|
3,999,294
|
|
|
$
|
(47,884
|
)
|
|
$
|
4,815,325
|
|
|
$
|
(221,017
|
)
|
|
$
|
8,814,619
|
|
|
$
|
(268,901
|
)
|
Held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate security:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76,460
|
|
|
$
|
(581
|
)
|
|
$
|
76,460
|
|
|
$
|
(581
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Fixed maturity securities held for investment carried at amortized cost
|
$
|
(7,021
|
)
|
|
$
|
(1,976
|
)
|
Investments carried at fair value:
|
|
|
|
||||
Fixed maturity securities, available for sale
|
$
|
(1,215,695
|
)
|
|
$
|
281,094
|
|
Equity securities, available for sale
|
—
|
|
|
(13
|
)
|
||
|
(1,215,695
|
)
|
|
281,081
|
|
||
Adjustment for effect on other balance sheet accounts:
|
|
|
|
||||
Deferred policy acquisition costs and deferred sales inducements
|
643,323
|
|
|
(150,962
|
)
|
||
Deferred income tax asset/liability
|
120,201
|
|
|
(45,542
|
)
|
||
|
763,524
|
|
|
(196,504
|
)
|
||
Change in net unrealized gains on investments carried at fair value
|
$
|
(452,171
|
)
|
|
$
|
84,577
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Available for sale fixed maturity securities:
|
|
|
|
||||
Gross realized gains
|
$
|
1,382
|
|
|
$
|
5,572
|
|
Gross realized losses
|
(2,102
|
)
|
|
(3,563
|
)
|
||
|
(720
|
)
|
|
2,009
|
|
||
|
|
|
|
||||
Other investments:
|
|
|
|
||||
Gain on sale of real estate
|
—
|
|
|
29
|
|
||
|
|
|
|
||||
Mortgage loans on real estate:
|
|
|
|
||||
Decrease in allowance for credit losses
|
300
|
|
|
300
|
|
||
Recovery of specific allowance
|
722
|
|
|
—
|
|
||
|
1,022
|
|
|
300
|
|
||
|
$
|
302
|
|
|
$
|
2,338
|
|
•
|
the length of time and the extent to which the fair value has been less than amortized cost or cost;
|
•
|
whether the issuer is current on all payments and all contractual payments have been made as agreed;
|
•
|
the remaining payment terms and the financial condition and near-term prospects of the issuer;
|
•
|
the lack of ability to refinance due to liquidity problems in the credit market;
|
•
|
the fair value of any underlying collateral;
|
•
|
the existence of any credit protection available;
|
•
|
our intent to sell and whether it is more likely than not we would be required to sell prior to recovery for debt securities;
|
•
|
consideration of rating agency actions; and
|
•
|
changes in estimated cash flows of mortgage and asset backed securities.
|
|
Number
of
Securities
|
|
Total OTTI
Losses
|
|
Portion of OTTI
Losses
Recognized
in (from) Other
Comprehensive
Income
|
|
Net OTTI
Losses
Recognized in
Operations
|
|||||||
|
|
|
(Dollars in thousands)
|
|||||||||||
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|||||||
Fixed maturity securities, available for sale:
|
|
|
|
|
|
|
|
|||||||
Corporate securities:
|
|
|
|
|
|
|
|
|||||||
Consumer discretionary
|
1
|
|
|
$
|
(907
|
)
|
|
$
|
—
|
|
|
$
|
(907
|
)
|
|
|
|
|
|
|
|
|
|||||||
Three months ended March 31, 2017
|
|
|
|
|
|
|
|
|||||||
Fixed maturity securities, available for sale:
|
|
|
|
|
|
|
|
|||||||
Residential mortgage backed securities
|
3
|
|
|
$
|
—
|
|
|
$
|
(141
|
)
|
|
$
|
(141
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Cumulative credit loss at beginning of period
|
$
|
(157,066
|
)
|
|
$
|
(166,375
|
)
|
Credit losses on securities for which OTTI has not previously been recognized
|
(907
|
)
|
|
—
|
|
||
Additional credit losses on securities for which OTTI has previously been recognized
|
—
|
|
|
(141
|
)
|
||
Accumulated losses on securities that were disposed of during the period
|
3,900
|
|
|
13,939
|
|
||
Cumulative credit loss at end of period
|
$
|
(154,073
|
)
|
|
$
|
(152,577
|
)
|
|
Amortized Cost
|
|
OTTI
Recognized in
Other
Comprehensive
Income
|
|
Change in Fair
Value Since
OTTI was
Recognized
|
|
Fair Value
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, available for sale:
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
$
|
17,947
|
|
|
$
|
(3,700
|
)
|
|
$
|
10,012
|
|
|
$
|
24,259
|
|
Residential mortgage backed securities
|
282,835
|
|
|
(168,355
|
)
|
|
198,719
|
|
|
313,199
|
|
||||
Other asset backed securities
|
4,567
|
|
|
(1,356
|
)
|
|
(1,631
|
)
|
|
1,580
|
|
||||
|
$
|
305,349
|
|
|
$
|
(173,411
|
)
|
|
$
|
207,100
|
|
|
$
|
339,038
|
|
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, available for sale:
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
$
|
13,015
|
|
|
$
|
(4,263
|
)
|
|
$
|
10,739
|
|
|
$
|
19,491
|
|
Residential mortgage backed securities
|
297,582
|
|
|
(168,355
|
)
|
|
201,620
|
|
|
330,847
|
|
||||
Other asset backed securities
|
4,567
|
|
|
(1,356
|
)
|
|
(1,875
|
)
|
|
1,336
|
|
||||
|
$
|
315,164
|
|
|
$
|
(173,974
|
)
|
|
$
|
210,484
|
|
|
$
|
351,674
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Principal outstanding
|
$
|
2,707,352
|
|
|
$
|
2,674,315
|
|
Loan loss allowance
|
(6,496
|
)
|
|
(7,518
|
)
|
||
Deferred prepayment fees
|
(1,219
|
)
|
|
(1,266
|
)
|
||
Carrying value
|
$
|
2,699,637
|
|
|
$
|
2,665,531
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Principal
|
|
Percent
|
|
Principal
|
|
Percent
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Geographic distribution
|
|
|
|
|
|
|
|
||||||
East
|
$
|
563,593
|
|
|
20.8
|
%
|
|
$
|
548,067
|
|
|
20.5
|
%
|
Middle Atlantic
|
166,782
|
|
|
6.2
|
%
|
|
163,485
|
|
|
6.1
|
%
|
||
Mountain
|
317,872
|
|
|
11.7
|
%
|
|
308,486
|
|
|
11.5
|
%
|
||
New England
|
12,146
|
|
|
0.5
|
%
|
|
12,265
|
|
|
0.5
|
%
|
||
Pacific
|
482,593
|
|
|
17.8
|
%
|
|
466,030
|
|
|
17.4
|
%
|
||
South Atlantic
|
613,999
|
|
|
22.7
|
%
|
|
609,736
|
|
|
22.8
|
%
|
||
West North Central
|
315,339
|
|
|
11.6
|
%
|
|
324,808
|
|
|
12.2
|
%
|
||
West South Central
|
235,028
|
|
|
8.7
|
%
|
|
241,438
|
|
|
9.0
|
%
|
||
|
$
|
2,707,352
|
|
|
100.0
|
%
|
|
$
|
2,674,315
|
|
|
100.0
|
%
|
Property type distribution
|
|
|
|
|
|
|
|
||||||
Office
|
$
|
270,066
|
|
|
10.0
|
%
|
|
$
|
283,926
|
|
|
10.6
|
%
|
Medical Office
|
32,902
|
|
|
1.2
|
%
|
|
34,338
|
|
|
1.3
|
%
|
||
Retail
|
1,051,749
|
|
|
38.8
|
%
|
|
1,040,028
|
|
|
38.9
|
%
|
||
Industrial/Warehouse
|
703,892
|
|
|
26.0
|
%
|
|
677,770
|
|
|
25.3
|
%
|
||
Apartment
|
471,097
|
|
|
17.4
|
%
|
|
462,897
|
|
|
17.3
|
%
|
||
Mixed use/other
|
177,646
|
|
|
6.6
|
%
|
|
175,356
|
|
|
6.6
|
%
|
||
|
$
|
2,707,352
|
|
|
100.0
|
%
|
|
$
|
2,674,315
|
|
|
100.0
|
%
|
|
Three Months Ended
March 31, 2018 |
|
Three Months Ended
March 31, 2017 |
||||||||||||
|
Specific
Allowance
|
|
General Allowance
|
|
Specific
Allowance
|
|
General Allowance
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Beginning allowance balance
|
$
|
(1,418
|
)
|
|
$
|
(6,100
|
)
|
|
$
|
(1,327
|
)
|
|
$
|
(7,100
|
)
|
Charge-offs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Recoveries
|
722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Change in provision for credit losses
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
||||
Ending allowance balance
|
$
|
(696
|
)
|
|
$
|
(5,800
|
)
|
|
$
|
(1,327
|
)
|
|
$
|
(6,800
|
)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Individually evaluated for impairment
|
$
|
3,186
|
|
|
$
|
5,445
|
|
Collectively evaluated for impairment
|
2,704,166
|
|
|
2,668,870
|
|
||
Total loans evaluated for impairment
|
$
|
2,707,352
|
|
|
$
|
2,674,315
|
|
|
30 - 59 Days
|
|
60 - 89 Days
|
|
90 Days
and Over
|
|
Total
Past Due
|
|
Current
|
|
Collateral Dependent Receivables
|
|
Total Financing Receivables
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||
Commercial Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,707,352
|
|
|
$
|
—
|
|
|
$
|
2,707,352
|
|
December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,672,093
|
|
|
$
|
2,222
|
|
|
$
|
2,674,315
|
|
|
Recorded
Investment
|
|
Unpaid Principal Balance
|
|
Related
Allowance
|
||||||
|
(Dollars in thousands)
|
||||||||||
March 31, 2018
|
|
|
|
|
|
||||||
Mortgage loans with an allowance
|
$
|
2,490
|
|
|
$
|
3,186
|
|
|
$
|
(696
|
)
|
Mortgage loans with no related allowance
|
1,395
|
|
|
1,395
|
|
|
—
|
|
|||
|
$
|
3,885
|
|
|
$
|
4,581
|
|
|
$
|
(696
|
)
|
December 31, 2017
|
|
|
|
|
|
||||||
Mortgage loans with an allowance
|
$
|
4,027
|
|
|
$
|
5,445
|
|
|
$
|
(1,418
|
)
|
Mortgage loans with no related allowance
|
1,436
|
|
|
1,436
|
|
|
—
|
|
|||
|
$
|
5,463
|
|
|
$
|
6,881
|
|
|
$
|
(1,418
|
)
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||
|
(Dollars in thousands)
|
||||||
Three months ended March 31, 2018
|
|
|
|
||||
Mortgage loans with an allowance
|
$
|
2,509
|
|
|
$
|
50
|
|
Mortgage loans with no related allowance
|
1,415
|
|
|
21
|
|
||
|
$
|
3,924
|
|
|
$
|
71
|
|
Three months ended March 31, 2017
|
|
|
|
||||
Mortgage loans with an allowance
|
$
|
3,291
|
|
|
$
|
72
|
|
Mortgage loans with no related allowance
|
1,572
|
|
|
23
|
|
||
|
$
|
4,863
|
|
|
$
|
95
|
|
•
|
borrower is in default,
|
•
|
borrower has declared bankruptcy,
|
•
|
there is growing concern about the borrower's ability to continue as a going concern,
|
•
|
borrower has insufficient cash flows to service debt,
|
•
|
borrower's inability to obtain funds from other sources, and
|
•
|
there is a breach of financial covenants by the borrower.
|
•
|
assets used to satisfy debt are less than our recorded investment,
|
•
|
interest rate is modified,
|
•
|
maturity date extension at an interest rate less than market rate,
|
•
|
capitalization of interest,
|
•
|
delaying principal and/or interest for a period of three months or more, and
|
•
|
partial forgiveness of the balance or charge-off.
|
Geographic Region
|
|
Number
of TDRs
|
|
Principal
Balance
Outstanding
|
|
Specific Loan Loss Allowance
|
|
Net
Carrying
Amount
|
||||||
|
|
|
|
(Dollars in thousands)
|
||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|
||||||
South Atlantic
|
|
1
|
|
$
|
2,930
|
|
|
$
|
—
|
|
|
$
|
2,930
|
|
East North Central
|
|
1
|
|
1,910
|
|
|
(467
|
)
|
|
1,443
|
|
|||
|
|
2
|
|
$
|
4,840
|
|
|
$
|
(467
|
)
|
|
$
|
4,373
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||
South Atlantic
|
|
1
|
|
$
|
2,947
|
|
|
$
|
—
|
|
|
$
|
2,947
|
|
East North Central
|
|
1
|
|
1,933
|
|
|
(467
|
)
|
|
1,466
|
|
|||
|
|
2
|
|
$
|
4,880
|
|
|
$
|
(467
|
)
|
|
$
|
4,413
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Assets
|
|
|
|
||||
Derivative instruments
|
|
|
|
||||
Call options
|
$
|
847,741
|
|
|
$
|
1,568,380
|
|
Other assets
|
|
|
|
||||
Interest rate caps
|
890
|
|
|
415
|
|
||
Interest rate swap
|
427
|
|
|
—
|
|
||
|
$
|
849,058
|
|
|
$
|
1,568,795
|
|
Liabilities
|
|
|
|
||||
Policy benefit reserves - annuity products
|
|
|
|
||||
Fixed index annuities - embedded derivatives
|
$
|
8,233,557
|
|
|
$
|
8,790,427
|
|
Other liabilities
|
|
|
|
||||
Interest rate swap
|
—
|
|
|
789
|
|
||
|
$
|
8,233,557
|
|
|
$
|
8,791,216
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Change in fair value of derivatives:
|
|
|
|
||||
Call options
|
$
|
(452,598
|
)
|
|
$
|
386,736
|
|
Interest rate swap
|
1,040
|
|
|
75
|
|
||
Interest rate caps
|
475
|
|
|
(278
|
)
|
||
|
$
|
(451,083
|
)
|
|
$
|
386,533
|
|
Change in fair value of embedded derivatives:
|
|
|
|
||||
Fixed index annuities—embedded derivatives
|
$
|
(1,106,023
|
)
|
|
$
|
76,210
|
|
Other changes in difference between policy benefit reserves computed using derivative accounting vs. long-duration contracts accounting
|
238,791
|
|
|
147,960
|
|
||
|
$
|
(867,232
|
)
|
|
$
|
224,170
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
Counterparty
|
|
Credit Rating
(S&P)
|
|
Credit Rating (Moody's)
|
|
Notional
Amount
|
|
Fair Value
|
|
Notional
Amount
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
(Dollars in thousands)
|
||||||||||||||
Bank of America
|
|
A+
|
|
Aa3
|
|
$
|
5,522,691
|
|
|
$
|
91,549
|
|
|
$
|
4,645,366
|
|
|
$
|
237,955
|
|
Barclays
|
|
A
|
|
A1
|
|
3,784,024
|
|
|
89,471
|
|
|
4,135,537
|
|
|
154,127
|
|
||||
BNP Paribas
|
|
A
|
|
Aa3
|
|
935,091
|
|
|
21,769
|
|
|
1,411,989
|
|
|
73,650
|
|
||||
Canadian Imperial Bank of Commerce
|
|
A+
|
|
A1
|
|
4,179,179
|
|
|
101,280
|
|
|
2,808,030
|
|
|
84,268
|
|
||||
Citibank, N.A.
|
|
A+
|
|
A1
|
|
4,422,448
|
|
|
77,256
|
|
|
4,104,666
|
|
|
219,900
|
|
||||
Credit Suisse
|
|
A
|
|
A1
|
|
3,020,434
|
|
|
52,130
|
|
|
3,538,855
|
|
|
137,384
|
|
||||
J.P. Morgan
|
|
A+
|
|
Aa3
|
|
2,118,331
|
|
|
85,080
|
|
|
1,753,649
|
|
|
109,689
|
|
||||
Morgan Stanley
|
|
A+
|
|
A1
|
|
3,244,428
|
|
|
40,096
|
|
|
3,408,179
|
|
|
184,323
|
|
||||
Royal Bank of Canada
|
|
AA-
|
|
A1
|
|
3,158,242
|
|
|
96,854
|
|
|
3,027,469
|
|
|
104,141
|
|
||||
Societe Generale
|
|
A
|
|
A2
|
|
71,401
|
|
|
1,689
|
|
|
—
|
|
|
—
|
|
||||
SunTrust
|
|
A-
|
|
Baa1
|
|
2,080,242
|
|
|
65,445
|
|
|
2,331,168
|
|
|
90,399
|
|
||||
Wells Fargo
|
|
A+
|
|
Aa2
|
|
4,065,628
|
|
|
118,295
|
|
|
4,036,255
|
|
|
162,781
|
|
||||
Exchange traded
|
|
|
|
|
|
260,283
|
|
|
6,827
|
|
|
296,840
|
|
|
9,763
|
|
||||
|
|
|
|
|
|
$
|
36,862,422
|
|
|
$
|
847,741
|
|
|
$
|
35,498,003
|
|
|
$
|
1,568,380
|
|
|
|
Notional
|
|
|
|
Pay
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|||||||
Maturity Date
|
|
Amount
|
|
Receive Rate
|
|
Rate
|
|
Counterparty
|
|
Fair Value
|
|
Fair Value
|
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|||||||||
March 15, 2021
|
|
$
|
85,500
|
|
|
LIBOR
|
|
2.415
|
%
|
|
SunTrust
|
|
$
|
427
|
|
|
$
|
(789
|
)
|
|
|
Notional
|
|
|
|
Cap
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|||||||
Maturity Date
|
|
Amount
|
|
Floating Rate
|
|
Rate
|
|
Counterparty
|
|
Fair Value
|
|
Fair Value
|
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|||||||||
July 7, 2021
|
|
$
|
40,000
|
|
|
LIBOR
|
|
2.50
|
%
|
|
SunTrust
|
|
$
|
445
|
|
|
$
|
207
|
|
July 8, 2021
|
|
12,000
|
|
|
LIBOR
|
|
2.50
|
%
|
|
SunTrust
|
|
134
|
|
|
62
|
|
|||
July 29, 2021
|
|
27,000
|
|
|
LIBOR
|
|
2.50
|
%
|
|
SunTrust
|
|
311
|
|
|
146
|
|
|||
|
|
$
|
79,000
|
|
|
|
|
|
|
|
|
$
|
890
|
|
|
$
|
415
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Senior notes due 2027
|
|
|
|
||||
Principal
|
$
|
500,000
|
|
|
$
|
500,000
|
|
Unamortized debt issue costs
|
(5,457
|
)
|
|
(5,572
|
)
|
||
Unamortized discount
|
(328
|
)
|
|
(335
|
)
|
||
|
$
|
494,215
|
|
|
$
|
494,093
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands, except per share data)
|
||||||
Numerator:
|
|
|
|
||||
Net income - numerator for earnings per common share
|
$
|
140,962
|
|
|
$
|
53,939
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average common shares outstanding
|
90,017,166
|
|
|
88,647,078
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Stock options and deferred compensation agreements
|
850,292
|
|
|
948,317
|
|
||
Restricted stock and restricted stock units
|
271,890
|
|
|
380,217
|
|
||
Denominator for earnings per common share - assuming dilution
|
91,139,348
|
|
|
89,975,612
|
|
||
|
|
|
|
||||
Earnings per common share
|
$
|
1.57
|
|
|
$
|
0.61
|
|
Earnings per common share - assuming dilution
|
$
|
1.55
|
|
|
$
|
0.60
|
|
•
|
general economic conditions and other factors, including prevailing interest rate levels and stock and credit market performance which may affect (among other things) our ability to sell our products, our ability to access capital resources and the costs associated therewith, the fair value of our investments, which could result in impairments and other than temporary impairments, and certain liabilities, and the lapse rate and profitability of policies;
|
•
|
customer response to new products and marketing initiatives;
|
•
|
changes in Federal income tax laws and regulations which may affect the relative income tax advantages of our products;
|
•
|
increasing competition in the sale of annuities;
|
•
|
regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) bank sales and underwriting of insurance products and regulation of the sale, underwriting and pricing of products; and
|
•
|
the risk factors or uncertainties listed from time to time in our filings with the SEC.
|
•
|
the amount of assets under our management,
|
•
|
investment spreads we earn on our policyholder account balances,
|
•
|
our ability to manage our investment portfolio to maximize returns and minimize risks such as interest rate changes and defaults or impairment of investments,
|
•
|
our ability to manage interest rates credited to policyholders and costs of the options purchased to fund the annual index credits on our fixed index annuities,
|
•
|
our ability to manage the costs of acquiring new business (principally commissions paid to agents and distribution partners and bonuses credited to policyholders),
|
•
|
our ability to manage our operating expenses, and
|
•
|
income taxes.
|
|
Three Months Ended
March 31, |
||
|
2018
|
|
2017
|
Average yield on invested assets
|
4.36%
|
|
4.48%
|
Aggregate cost of money
|
1.82%
|
|
1.77%
|
Aggregate investment spread
|
2.54%
|
|
2.71%
|
|
|
|
|
Impact of:
|
|
|
|
Investment yield - additional prepayment income
|
0.03%
|
|
0.07%
|
Cost of money benefit of over hedging
|
0.02%
|
|
0.05%
|
|
|
Three Months Ended
March 31, |
||||||
Product Type
|
|
2018
|
|
2017
|
||||
|
|
(Dollars in thousands)
|
||||||
Fixed index annuities
|
|
$
|
993,914
|
|
|
$
|
1,028,839
|
|
Annual reset fixed rate annuities
|
|
16,490
|
|
|
14,843
|
|
||
Multi-year fixed rate annuities
|
|
10,025
|
|
|
29,901
|
|
||
Single premium immediate annuities
|
|
10,630
|
|
|
5,551
|
|
||
Total before coinsurance ceded
|
|
1,031,059
|
|
|
1,079,134
|
|
||
Coinsurance ceded
|
|
89,695
|
|
|
71,074
|
|
||
Net after coinsurance ceded
|
|
$
|
941,364
|
|
|
$
|
1,008,060
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Reconciliation from net income to non-GAAP operating income:
|
|
|
|
||||
Net income
|
$
|
140,962
|
|
|
$
|
53,939
|
|
Adjustments to arrive at non-GAAP operating income:
|
|
|
|
||||
Net realized investment (gains) losses, including OTTI
|
23
|
|
|
(1,942
|
)
|
||
Change in fair value of derivatives and embedded derivatives - fixed index annuities
|
(78,818
|
)
|
|
10,977
|
|
||
Change in fair value of derivatives - debt
|
(1,832
|
)
|
|
(247
|
)
|
||
Income taxes
|
17,359
|
|
|
(3,105
|
)
|
||
Non-GAAP operating income
|
$
|
77,694
|
|
|
$
|
59,622
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Surrender charges
|
$
|
16,282
|
|
|
$
|
13,634
|
|
Lifetime income benefit riders (LIBR) fees
|
34,441
|
|
|
29,938
|
|
||
|
$
|
50,723
|
|
|
$
|
43,572
|
|
|
|
|
|
||||
Withdrawals from annuity policies subject to surrender charges
|
$
|
129,996
|
|
|
$
|
107,219
|
|
Average surrender charge collected on withdrawals subject to surrender charges
|
12.5
|
%
|
|
12.7
|
%
|
||
|
|
|
|
||||
Fund values on policies subject to LIBR fees
|
$
|
4,782,117
|
|
|
$
|
4,296,670
|
|
Weighted average per policy LIBR fee
|
0.72
|
%
|
|
0.70
|
%
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Call options:
|
|
|
|
||||
Gain (loss) on option expiration
|
$
|
291,976
|
|
|
$
|
205,400
|
|
Change in unrealized gains/losses
|
(744,574
|
)
|
|
181,336
|
|
||
Interest rate swap
|
1,040
|
|
|
75
|
|
||
Interest rate caps
|
475
|
|
|
(278
|
)
|
||
|
$
|
(451,083
|
)
|
|
$
|
386,533
|
|
|
Three Months Ended
March 31, |
||
|
2018
|
|
2017
|
S&P 500 Index
|
|
|
|
Point-to-point strategy
|
1.0% - 12.6%
|
|
1.0% - 13.3%
|
Monthly average strategy
|
0.6% - 8.0%
|
|
0.1% - 10.6%
|
Monthly point-to-point strategy
|
0.0% - 17.5%
|
|
0.0% - 15.2%
|
Fixed income (bond index) strategies
|
0.0% - 2.5%
|
|
0.0% - 4.1%
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Index credits on index policies
|
$
|
423,940
|
|
|
$
|
321,880
|
|
Interest credited (including changes in minimum guaranteed interest for fixed index annuities)
|
56,770
|
|
|
67,006
|
|
||
Lifetime income benefit riders
|
33,385
|
|
|
30,253
|
|
||
|
$
|
514,095
|
|
|
$
|
419,139
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Amortization of deferred sales inducements before gross profit adjustments
|
$
|
67,211
|
|
|
$
|
67,784
|
|
Gross profit adjustments:
|
|
|
|
||||
Fair value accounting for derivatives and embedded derivatives
|
33,456
|
|
|
(5,588
|
)
|
||
Net realized gains (losses) on investments and net OTTI losses recognized in operations
|
(244
|
)
|
|
129
|
|
||
Amortization of deferred sales inducements after gross profit adjustments
|
$
|
100,423
|
|
|
$
|
62,325
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
|
|
|
|
||||
Fixed index annuities - embedded derivatives
|
$
|
(1,106,023
|
)
|
|
$
|
76,210
|
|
Other changes in difference between policy benefit reserves computed using derivative accounting vs. long-duration contracts accounting
|
238,791
|
|
|
147,960
|
|
||
|
$
|
(867,232
|
)
|
|
$
|
224,170
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Amortization of deferred policy acquisition costs before gross profit adjustments
|
$
|
95,440
|
|
|
$
|
95,431
|
|
Gross profit adjustments:
|
|
|
|
||||
Fair value accounting for derivatives and embedded derivatives
|
45,537
|
|
|
(5,878
|
)
|
||
Net realized gains (losses) on investments and net OTTI losses recognized in operations
|
(338
|
)
|
|
125
|
|
||
Amortization of deferred policy acquisition costs after gross profit adjustments
|
$
|
140,639
|
|
|
$
|
89,678
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Salary and benefits
|
$
|
16,387
|
|
|
$
|
13,777
|
|
Risk charges
|
7,679
|
|
|
7,055
|
|
||
Other
|
7,174
|
|
|
6,747
|
|
||
Total other operating costs and expenses
|
$
|
31,240
|
|
|
$
|
27,579
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Carrying
Amount
|
|
Percent
|
|
Carrying
Amount
|
|
Percent
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||
United States Government full faith and credit
|
$
|
11,433
|
|
|
—
|
%
|
|
$
|
11,876
|
|
|
—
|
%
|
United States Government sponsored agencies
|
1,270,106
|
|
|
2.6
|
%
|
|
1,305,017
|
|
|
2.6
|
%
|
||
United States municipalities, states and territories
|
4,137,005
|
|
|
8.3
|
%
|
|
4,166,812
|
|
|
8.3
|
%
|
||
Foreign government obligations
|
231,671
|
|
|
0.5
|
%
|
|
239,360
|
|
|
0.5
|
%
|
||
Corporate securities
|
29,661,171
|
|
|
59.7
|
%
|
|
29,956,012
|
|
|
59.6
|
%
|
||
Residential mortgage backed securities
|
1,102,609
|
|
|
2.2
|
%
|
|
1,105,567
|
|
|
2.2
|
%
|
||
Commercial mortgage backed securities
|
5,596,882
|
|
|
11.3
|
%
|
|
5,544,850
|
|
|
11.0
|
%
|
||
Other asset backed securities
|
3,617,514
|
|
|
7.3
|
%
|
|
3,120,536
|
|
|
6.2
|
%
|
||
Total fixed maturity securities
|
45,628,391
|
|
|
91.9
|
%
|
|
45,450,030
|
|
|
90.4
|
%
|
||
Mortgage loans on real estate
|
2,699,637
|
|
|
5.4
|
%
|
|
2,665,531
|
|
|
5.3
|
%
|
||
Derivative instruments
|
847,741
|
|
|
1.7
|
%
|
|
1,568,380
|
|
|
3.1
|
%
|
||
Other investments
|
481,825
|
|
|
1.0
|
%
|
|
616,764
|
|
|
1.2
|
%
|
||
|
$
|
49,657,594
|
|
|
100.0
|
%
|
|
$
|
50,300,705
|
|
|
100.0
|
%
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
Rating Agency Rating
|
|
Carrying
Amount
|
|
Percent of
Fixed Maturity
Securities
|
|
Carrying
Amount
|
|
Percent of
Fixed Maturity
Securities
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
Aaa/Aa/A
|
|
$
|
27,823,308
|
|
|
61.0
|
%
|
|
$
|
27,909,879
|
|
|
61.4
|
%
|
Baa
|
|
16,267,301
|
|
|
35.7
|
%
|
|
16,048,610
|
|
|
35.3
|
%
|
||
Total investment grade
|
|
44,090,609
|
|
|
96.7
|
%
|
|
43,958,489
|
|
|
96.7
|
%
|
||
Ba
|
|
1,097,231
|
|
|
2.4
|
%
|
|
1,035,676
|
|
|
2.3
|
%
|
||
B
|
|
156,922
|
|
|
0.3
|
%
|
|
130,857
|
|
|
0.3
|
%
|
||
Caa
|
|
152,903
|
|
|
0.3
|
%
|
|
134,586
|
|
|
0.3
|
%
|
||
Ca and lower
|
|
130,726
|
|
|
0.3
|
%
|
|
190,422
|
|
|
0.4
|
%
|
||
Total below investment grade
|
|
1,537,782
|
|
|
3.3
|
%
|
|
1,491,541
|
|
|
3.3
|
%
|
||
|
|
$
|
45,628,391
|
|
|
100.0
|
%
|
|
$
|
45,450,030
|
|
|
100.0
|
%
|
NAIC Designation
|
|
NRSRO Equivalent Rating
|
1
|
|
Aaa/Aa/A
|
2
|
|
Baa
|
3
|
|
Ba
|
4
|
|
B
|
5
|
|
Caa
|
6
|
|
Ca and lower
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||
NAIC Designation
|
|
Amortized
Cost
|
|
Fair Value
|
|
Carrying
Amount
|
|
Percent
of Total
Carrying
Amount
|
|
Amortized
Cost
|
|
Fair Value
|
|
Carrying
Amount
|
|
Percent
of Total
Carrying
Amount
|
||||||||||||||
|
|
(Dollars in thousands)
|
|
|
|
(Dollars in thousands)
|
|
|
||||||||||||||||||||||
1
|
|
$
|
27,142,276
|
|
|
$
|
27,984,297
|
|
|
$
|
27,984,297
|
|
|
61.3
|
%
|
|
$
|
26,669,427
|
|
|
$
|
28,274,379
|
|
|
$
|
28,274,379
|
|
|
62.2
|
%
|
2
|
|
15,897,296
|
|
|
16,147,267
|
|
|
16,147,267
|
|
|
35.4
|
%
|
|
15,198,551
|
|
|
15,869,219
|
|
|
15,869,219
|
|
|
34.9
|
%
|
||||||
3
|
|
1,350,395
|
|
|
1,316,146
|
|
|
1,323,748
|
|
|
2.9
|
%
|
|
1,161,737
|
|
|
1,157,420
|
|
|
1,158,001
|
|
|
2.5
|
%
|
||||||
4
|
|
170,754
|
|
|
145,085
|
|
|
145,085
|
|
|
0.3
|
%
|
|
134,838
|
|
|
117,542
|
|
|
117,542
|
|
|
0.3
|
%
|
||||||
5
|
|
17,108
|
|
|
19,926
|
|
|
19,926
|
|
|
0.1
|
%
|
|
17,015
|
|
|
20,927
|
|
|
20,927
|
|
|
0.1
|
%
|
||||||
6
|
|
10,027
|
|
|
8,068
|
|
|
8,068
|
|
|
—
|
%
|
|
12,232
|
|
|
9,962
|
|
|
9,962
|
|
|
—
|
%
|
||||||
|
|
$
|
44,587,856
|
|
|
$
|
45,620,789
|
|
|
$
|
45,628,391
|
|
|
100.0
|
%
|
|
$
|
43,193,800
|
|
|
$
|
45,449,449
|
|
|
$
|
45,450,030
|
|
|
100.0
|
%
|
|
Number of
Securities
|
|
Amortized
Cost
|
|
Unrealized
Losses
|
|
Fair Value
|
|||||||
|
|
|
(Dollars in thousands)
|
|||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|||||||
Fixed maturity securities, available for sale:
|
|
|
|
|
|
|
|
|||||||
United States Government full faith and credit
|
7
|
|
|
$
|
9,946
|
|
|
$
|
(373
|
)
|
|
$
|
9,573
|
|
United States Government sponsored agencies
|
23
|
|
|
1,066,663
|
|
|
(59,340
|
)
|
|
1,007,323
|
|
|||
United States municipalities, states and territories
|
109
|
|
|
361,880
|
|
|
(12,855
|
)
|
|
349,025
|
|
|||
Foreign government obligations
|
5
|
|
|
144,365
|
|
|
(4,448
|
)
|
|
139,917
|
|
|||
Corporate securities:
|
|
|
|
|
|
|
|
|
||||||
Finance, insurance and real estate
|
233
|
|
|
2,675,585
|
|
|
(94,923
|
)
|
|
2,580,662
|
|
|||
Manufacturing, construction and mining
|
160
|
|
|
1,655,748
|
|
|
(47,358
|
)
|
|
1,608,390
|
|
|||
Utilities and related sectors
|
201
|
|
|
2,128,891
|
|
|
(59,670
|
)
|
|
2,069,221
|
|
|||
Wholesale/retail trade
|
85
|
|
|
961,791
|
|
|
(33,255
|
)
|
|
928,536
|
|
|||
Services, media and other
|
420
|
|
|
4,522,525
|
|
|
(168,624
|
)
|
|
4,353,901
|
|
|||
Residential mortgage backed securities
|
44
|
|
|
318,435
|
|
|
(7,004
|
)
|
|
311,431
|
|
|||
Commercial mortgage backed securities
|
470
|
|
|
3,926,931
|
|
|
(121,506
|
)
|
|
3,805,425
|
|
|||
Other asset backed securities
|
144
|
|
|
999,664
|
|
|
(14,633
|
)
|
|
985,031
|
|
|||
|
1,901
|
|
|
$
|
18,772,424
|
|
|
$
|
(623,989
|
)
|
|
$
|
18,148,435
|
|
Fixed maturity securities, held for investment:
|
|
|
|
|
|
|
|
|||||||
Corporate security:
|
|
|
|
|
|
|
|
|||||||
Insurance
|
1
|
|
|
$
|
77,043
|
|
|
$
|
(7,602
|
)
|
|
$
|
69,441
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2017
|
|
|
|
|
|
|
|
|||||||
Fixed maturity securities, available for sale:
|
|
|
|
|
|
|
|
|||||||
United States Government full faith and credit
|
4
|
|
|
$
|
8,443
|
|
|
$
|
(147
|
)
|
|
$
|
8,296
|
|
United States Government sponsored agencies
|
18
|
|
|
1,035,489
|
|
|
(31,730
|
)
|
|
1,003,759
|
|
|||
United States municipalities, states and territories
|
48
|
|
|
176,831
|
|
|
(3,596
|
)
|
|
173,235
|
|
|||
Foreign government obligations
|
2
|
|
|
64,313
|
|
|
(2,025
|
)
|
|
62,288
|
|
|||
Corporate securities:
|
|
|
|
|
|
|
|
|||||||
Finance, insurance and real estate
|
92
|
|
|
1,090,077
|
|
|
(33,178
|
)
|
|
1,056,899
|
|
|||
Manufacturing, construction and mining
|
55
|
|
|
468,505
|
|
|
(14,324
|
)
|
|
454,181
|
|
|||
Utilities and related sectors
|
63
|
|
|
657,599
|
|
|
(13,000
|
)
|
|
644,599
|
|
|||
Wholesale/retail trade
|
31
|
|
|
344,196
|
|
|
(12,620
|
)
|
|
331,576
|
|
|||
Services, media and other
|
165
|
|
|
1,693,343
|
|
|
(72,565
|
)
|
|
1,620,778
|
|
|||
Residential mortgage backed securities
|
20
|
|
|
75,159
|
|
|
(2,471
|
)
|
|
72,688
|
|
|||
Commercial mortgage backed securities
|
310
|
|
|
2,473,034
|
|
|
(69,840
|
)
|
|
2,403,194
|
|
|||
Other asset backed securities
|
146
|
|
|
996,531
|
|
|
(13,405
|
)
|
|
983,126
|
|
|||
|
954
|
|
|
$
|
9,083,520
|
|
|
$
|
(268,901
|
)
|
|
$
|
8,814,619
|
|
Fixed maturity securities, held for investment:
|
|
|
|
|
|
|
|
|||||||
Corporate security:
|
|
|
|
|
|
|
|
|||||||
Insurance
|
1
|
|
|
$
|
77,041
|
|
|
$
|
(581
|
)
|
|
$
|
76,460
|
|
NAIC Designation
|
|
Carrying Value of
Securities with
Gross Unrealized
Losses
|
|
Percent of
Total
|
|
Gross
Unrealized Losses |
|
Percent of
Total
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|
||||||
1
|
|
$
|
10,959,521
|
|
|
60.1
|
%
|
|
$
|
(366,296
|
)
|
|
58.0
|
%
|
2
|
|
6,387,958
|
|
|
35.1
|
%
|
|
(188,558
|
)
|
|
29.8
|
%
|
||
3
|
|
737,227
|
|
|
4.0
|
%
|
|
(44,604
|
)
|
|
7.1
|
%
|
||
4
|
|
128,328
|
|
|
0.7
|
%
|
|
(25,864
|
)
|
|
4.1
|
%
|
||
5
|
|
9,551
|
|
|
0.1
|
%
|
|
(3,126
|
)
|
|
0.5
|
%
|
||
6
|
|
2,893
|
|
|
—
|
%
|
|
(3,143
|
)
|
|
0.5
|
%
|
||
|
|
$
|
18,225,478
|
|
|
100.0
|
%
|
|
$
|
(631,591
|
)
|
|
100.0
|
%
|
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||
1
|
|
$
|
5,433,608
|
|
|
61.1
|
%
|
|
$
|
(158,991
|
)
|
|
59.0
|
%
|
2
|
|
2,809,981
|
|
|
31.6
|
%
|
|
(64,369
|
)
|
|
23.9
|
%
|
||
3
|
|
540,320
|
|
|
6.1
|
%
|
|
(23,166
|
)
|
|
8.6
|
%
|
||
4
|
|
94,004
|
|
|
1.1
|
%
|
|
(17,972
|
)
|
|
6.7
|
%
|
||
5
|
|
11,130
|
|
|
0.1
|
%
|
|
(1,460
|
)
|
|
0.5
|
%
|
||
6
|
|
2,617
|
|
|
—
|
%
|
|
(3,524
|
)
|
|
1.3
|
%
|
||
|
|
$
|
8,891,660
|
|
|
100.0
|
%
|
|
$
|
(269,482
|
)
|
|
100.0
|
%
|
|
Number of
Securities
|
|
Amortized
Cost
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|||||||
|
|
|
(Dollars in thousands)
|
|||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|||||||
Investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
1,215
|
|
|
$
|
11,893,032
|
|
|
$
|
11,684,032
|
|
|
$
|
(209,000
|
)
|
Six months or more and less than twelve months
|
165
|
|
|
1,484,739
|
|
|
1,425,452
|
|
|
(59,287
|
)
|
|||
Twelve months or greater
|
427
|
|
|
4,646,882
|
|
|
4,354,841
|
|
|
(292,041
|
)
|
|||
Total investment grade
|
1,807
|
|
|
18,024,653
|
|
|
17,464,325
|
|
|
(560,328
|
)
|
|||
Below investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
35
|
|
|
284,001
|
|
|
277,609
|
|
|
(6,392
|
)
|
|||
Six months or more and less than twelve months
|
15
|
|
|
73,259
|
|
|
65,402
|
|
|
(7,857
|
)
|
|||
Twelve months or greater
|
45
|
|
|
467,554
|
|
|
410,540
|
|
|
(57,014
|
)
|
|||
Total below investment grade
|
95
|
|
|
824,814
|
|
|
753,551
|
|
|
(71,263
|
)
|
|||
|
1,902
|
|
|
$
|
18,849,467
|
|
|
$
|
18,217,876
|
|
|
$
|
(631,591
|
)
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2017
|
|
|
|
|
|
|
|
|||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|||||||
Investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
409
|
|
|
$
|
3,550,774
|
|
|
$
|
3,520,164
|
|
|
$
|
(30,610
|
)
|
Six months or more and less than twelve months
|
27
|
|
|
257,924
|
|
|
249,690
|
|
|
(8,234
|
)
|
|||
Twelve months or greater
|
430
|
|
|
4,668,838
|
|
|
4,486,239
|
|
|
(182,599
|
)
|
|||
Total investment grade
|
866
|
|
|
8,477,536
|
|
|
8,256,093
|
|
|
(221,443
|
)
|
|||
Below investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
32
|
|
|
201,885
|
|
|
194,821
|
|
|
(7,064
|
)
|
|||
Six months or more and less than twelve months
|
12
|
|
|
36,595
|
|
|
34,619
|
|
|
(1,976
|
)
|
|||
Twelve months or greater
|
45
|
|
|
444,545
|
|
|
405,546
|
|
|
(38,999
|
)
|
|||
Total below investment grade
|
89
|
|
|
683,025
|
|
|
634,986
|
|
|
(48,039
|
)
|
|||
|
955
|
|
|
$
|
9,160,561
|
|
|
$
|
8,891,079
|
|
|
$
|
(269,482
|
)
|
|
Number of
Securities
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|||||||
|
|
|
(Dollars in thousands)
|
|||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|||||||
Investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Six months or more and less than twelve months
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Twelve months or greater
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total investment grade
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Below investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
3
|
|
|
50,156
|
|
|
39,169
|
|
|
(10,987
|
)
|
|||
Six months or more and less than twelve months
|
1
|
|
|
3,521
|
|
|
2,297
|
|
|
(1,224
|
)
|
|||
Twelve months or greater
|
3
|
|
|
39,191
|
|
|
24,477
|
|
|
(14,714
|
)
|
|||
Total below investment grade
|
7
|
|
|
92,868
|
|
|
65,943
|
|
|
(26,925
|
)
|
|||
|
7
|
|
|
$
|
92,868
|
|
|
$
|
65,943
|
|
|
$
|
(26,925
|
)
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2017
|
|
|
|
|
|
|
|
|||||||
Investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
3
|
|
|
$
|
8,597
|
|
|
$
|
6,931
|
|
|
$
|
(1,666
|
)
|
Six months or more and less than twelve months
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Twelve months or greater
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total investment grade
|
3
|
|
|
8,597
|
|
|
6,931
|
|
|
(1,666
|
)
|
|||
Below investment grade:
|
|
|
|
|
|
|
|
|||||||
Less than six months
|
1
|
|
|
11,021
|
|
|
8,275
|
|
|
(2,746
|
)
|
|||
Six months or more and less than twelve months
|
1
|
|
|
3,523
|
|
|
2,674
|
|
|
(849
|
)
|
|||
Twelve months or greater
|
4
|
|
|
55,647
|
|
|
37,591
|
|
|
(18,056
|
)
|
|||
Total below investment grade
|
6
|
|
|
70,191
|
|
|
48,540
|
|
|
(21,651
|
)
|
|||
|
9
|
|
|
$
|
78,788
|
|
|
$
|
55,471
|
|
|
$
|
(23,317
|
)
|
|
Available for sale
|
|
Held for investment
|
||||||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
2,167,775
|
|
|
2,130,293
|
|
|
—
|
|
|
—
|
|
||||
Due after five years through ten years
|
6,063,714
|
|
|
5,891,646
|
|
|
—
|
|
|
—
|
|
||||
Due after ten years through twenty years
|
2,490,238
|
|
|
2,369,431
|
|
|
—
|
|
|
—
|
|
||||
Due after twenty years
|
2,805,667
|
|
|
2,655,178
|
|
|
77,043
|
|
|
69,441
|
|
||||
|
13,527,394
|
|
|
13,046,548
|
|
|
77,043
|
|
|
69,441
|
|
||||
Residential mortgage backed securities
|
318,435
|
|
|
311,431
|
|
|
—
|
|
|
—
|
|
||||
Commercial mortgage backed securities
|
3,926,931
|
|
|
3,805,425
|
|
|
—
|
|
|
—
|
|
||||
Other asset backed securities
|
999,664
|
|
|
985,031
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
18,772,424
|
|
|
$
|
18,148,435
|
|
|
$
|
77,043
|
|
|
$
|
69,441
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
463,667
|
|
|
454,062
|
|
|
—
|
|
|
—
|
|
||||
Due after five years through ten years
|
1,996,166
|
|
|
1,945,474
|
|
|
—
|
|
|
—
|
|
||||
Due after ten years through twenty years
|
1,937,009
|
|
|
1,881,162
|
|
|
—
|
|
|
—
|
|
||||
Due after twenty years
|
1,141,954
|
|
|
1,074,913
|
|
|
77,041
|
|
|
76,460
|
|
||||
|
5,538,796
|
|
|
5,355,611
|
|
|
77,041
|
|
|
76,460
|
|
||||
Residential mortgage backed securities
|
75,159
|
|
|
72,688
|
|
|
—
|
|
|
—
|
|
||||
Commercial mortgage backed securities
|
2,473,034
|
|
|
2,403,194
|
|
|
—
|
|
|
—
|
|
||||
Other asset backed securities
|
996,531
|
|
|
983,126
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
9,083,520
|
|
|
$
|
8,814,619
|
|
|
$
|
77,041
|
|
|
$
|
76,460
|
|
|
March 31, 2018
|
||||||||
|
Amortized
Cost
|
|
Carrying Amount/
Fair Value
|
|
Percent
of Total
Carrying
Amount
|
||||
|
(Dollars in thousands)
|
|
|
||||||
GIIPS (1)
|
$
|
265,668
|
|
|
$
|
280,715
|
|
|
0.6%
|
Asia/Pacific
|
433,877
|
|
|
441,770
|
|
|
1.0%
|
||
Non-GIIPS Europe
|
3,100,441
|
|
|
3,157,021
|
|
|
6.9%
|
||
Latin America
|
291,117
|
|
|
298,767
|
|
|
0.7%
|
||
Non-U.S. North America
|
1,346,732
|
|
|
1,387,196
|
|
|
3.0%
|
||
Australia & New Zealand
|
767,242
|
|
|
757,598
|
|
|
1.7%
|
||
Other
|
2,475,918
|
|
|
2,488,042
|
|
|
5.4%
|
||
|
$
|
8,680,995
|
|
|
$
|
8,811,109
|
|
|
19.3%
|
(1)
|
Greece, Ireland, Italy, Portugal and Spain ("GIIPS"). All of our exposure in GIIPS are corporate securities with issuers domiciled in these countries. None of our foreign government obligations were held in any of these countries.
|
|
March 31, 2018
|
||||||
|
Amortized Cost
|
|
Carrying Amount/
Fair Value
|
||||
|
(Dollars in thousands)
|
||||||
GIIPS
|
$
|
19,515
|
|
|
$
|
21,013
|
|
Asia/Pacific
|
11,000
|
|
|
9,500
|
|
||
Non-GIIPS Europe
|
194,558
|
|
|
191,198
|
|
||
Latin America
|
59,577
|
|
|
55,507
|
|
||
Non-U.S. North America
|
76,725
|
|
|
76,584
|
|
||
|
$
|
361,375
|
|
|
$
|
353,802
|
|
General Description
|
|
Number of
Securities
|
|
Amortized
Cost
|
|
Unrealized
Gains (Losses)
|
|
Fair Value
|
|
Months in
Continuous
Unrealized
Loss Position
|
|
Months
Unrealized
Losses
Greater
Than 20%
|
||||||
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||||
Below investment grade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer discretionary
|
|
2
|
|
$
|
25,974
|
|
|
$
|
(5,061
|
)
|
|
$
|
20,913
|
|
|
4 - 38
|
|
0 - 1
|
Energy
|
|
4
|
|
29,054
|
|
|
(6,538
|
)
|
|
22,516
|
|
|
2 - 43
|
|
0 - 8
|
|||
Industrials
|
|
1
|
|
2,585
|
|
|
(785
|
)
|
|
1,800
|
|
|
41
|
|
1
|
|||
Materials
|
|
1
|
|
3,990
|
|
|
1,172
|
|
|
5,162
|
|
|
—
|
|
—
|
|||
Other asset backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financials
|
|
2
|
|
6,036
|
|
|
(3,143
|
)
|
|
2,893
|
|
|
58 - 84
|
|
0 - 39
|
|||
|
|
10
|
|
$
|
67,639
|
|
|
$
|
(14,355
|
)
|
|
$
|
53,284
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Principal Outstanding
|
|
Percent of Total Principal Outstanding
|
|
Principal Outstanding
|
|
Percent of Total Principal Outstanding
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Debt Service Coverage Ratio:
|
|
|
|
|
|
|
|
||||||
Greater than or equal to 1.5
|
$
|
1,854,662
|
|
|
68.5
|
%
|
|
$
|
1,826,596
|
|
|
68.3
|
%
|
Greater than or equal to 1.2 and less than 1.5
|
647,165
|
|
|
23.9
|
%
|
|
638,299
|
|
|
23.9
|
%
|
||
Greater than or equal to 1.0 and less than 1.2
|
155,268
|
|
|
5.7
|
%
|
|
148,881
|
|
|
5.6
|
%
|
||
Less than 1.0
|
50,257
|
|
|
1.9
|
%
|
|
60,539
|
|
|
2.2
|
%
|
||
|
$
|
2,707,352
|
|
|
100.0
|
%
|
|
$
|
2,674,315
|
|
|
100.0
|
%
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Impaired mortgage loans with an allowance
|
$
|
3,186
|
|
|
$
|
5,445
|
|
Impaired mortgage loans with no related allowance
|
1,395
|
|
|
1,436
|
|
||
Allowance for probable loan losses
|
(696
|
)
|
|
(1,418
|
)
|
||
Net carrying value of impaired mortgage loans
|
$
|
3,885
|
|
|
$
|
5,463
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Annual index credits to policyholders on their anniversaries
|
$
|
423,940
|
|
|
$
|
321,880
|
|
Proceeds received at expiration of options related to such credits
|
425,557
|
|
|
326,552
|
|
Period
|
|
Total Number of
Shares Purchased (a)
|
|
Average Price
Paid Per Share
|
|||
January 1, 2018 - January 31, 2018
|
|
—
|
|
|
$
|
—
|
|
February 1, 2018 - February 28, 2018
|
|
913
|
|
|
$
|
31.92
|
|
March 1, 2018 - March 31, 2018
|
|
8,759
|
|
|
$
|
31.82
|
|
Total
|
|
9,672
|
|
|
|
(a)
|
Includes the number of shares of common stock utilized to execute certain stock incentive awards.
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
10.1
|
|
|
Filed herewith
|
|
10.2
|
|
|
Filed herewith
|
|
10.3
|
|
|
Filed herewith
|
|
10.4
|
|
|
Filed herewith
|
|
10.5
|
|
|
Filed herewith
|
|
12.1
|
|
|
Filed herewith
|
|
31.1
|
|
|
Filed herewith
|
|
31.2
|
|
|
Filed herewith
|
|
32.1
|
|
|
Filed herewith
|
|
32.2
|
|
|
Filed herewith
|
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
Date:
|
May 8, 2018
|
|
AMERICAN EQUITY INVESTMENT LIFE
|
|
|
|
|
|
HOLDING COMPANY
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ John M. Matovina
|
|
|
|
|
|
John M. Matovina, Chief Executive Officer and President
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ted M. Johnson
|
|
|
|
|
|
Ted M. Johnson, Chief Financial Officer and Treasurer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Scott A. Samuelson
|
|
|
|
|
|
Scott A. Samuelson, Vice President and Chief Accounting Officer
|
|
|
|
|
|
(Principal Accounting Officer)
|
|
(i)
|
by requiring the Grantee to pay such amount in cash or check;
|
(ii)
|
by reducing the amount of any cash otherwise payable to Grantee with respect to the RSUs;
|
(iii)
|
by deducting such amount out of any other compensation otherwise payable to the Grantee; and/or
|
(iv)
|
by allowing the Grantee to surrender shares of Common Stock which have a Fair Market Value equal to the amount required to be withheld.
|
1.
|
Option Price
.
The option price is [
$
_____
]
for each share, the price being at least 100% of the fair market value of a share of the Stock on the date of the grant of this Option.
|
2.
|
Exercise of Option and Vesting Schedule
.
This Option is granted for a ten (10) year term and, therefore, may not be exercised after the expiration of ten (10) years from the date that it is granted. This Option shall become exercisable at any time subject to terms of this Agreement and applicable law.
|
(a)
|
Vesting Schedule
. This Option will vest on [___________]. Should the Optionee resign or be terminated (except for death or disability) prior to the date of vesting, then Optionee will forfeit all rights under this Agreement.
|
(b)
|
Right to Exercise
. This Option shall be exercisable during the term of the Option, by the Optionee:
|
(i)
|
While the Optionee is a member of the board of directors of the Company, or within thirty (30) days of the resignation or termination of Optionee as a board member; provided that in the event the Optionee’s service with the Company is terminated because of disability, as that term is defined in Section 105(d) (4) of the Internal Revenue Code, as amended (the “Code”), the Option privileges, with respect to the shares purchasable by the Optionee as of the date that the Optionee resigned or was terminated, may be exercised by the Optionee within one (1) year after the termination of the Optionee’s service by the Company. However, nothing contained within this statement shall be construed to extend the ultimate term of this Option beyond the period of time as set out above in paragraph 2.
|
(ii)
|
If the Optionee should die during the option period while employed by the Company, the option privileges may be exercised in full by the legal representative of the Optionee’s estate, or by the person or persons to whom the Optionee’s rights under the Option shall have passed by will or the laws of descent and distribution within one (1) year after the Optionee’s date of death. However, nothing contained within this statement shall be construed to extend the ultimate term of this Option beyond the period of time as set out above in paragraph 2.
|
(c)
|
Restrictions on Exercise
. The minimum number of shares for which this Option may be exercised is 50 shares. In addition, as a condition to the Optionee’s exercise of this option, the Company may require the person exercising this Option to execute any buy-sell agreement in effect between the Company and its shareholders and to made such representations or warranties to the Company as may be required by applicable law or regulation.
|
(d)
|
Method of Exercise
. This Option shall be exercisable by a written notice which shall:
|
(i)
|
State the election to exercise the Option, the number of shares in respect of which it is being exercised (which may be no less than 50 shares), the person in whose name the stock certificate for such shares of Stock is to be registered, the person’s address and social security number (or if more than one, the names, addresses and social security numbers of such persons);
|
(ii)
|
Contain such representations and agreements as to the holder’s investment intent with respect to such shares of Stock as may be satisfactory to the Company’s counsel; and
|
(iii)
|
Be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any persons other than the Optionee, be accompanied by proof satisfactory to counsel for the Company, of the right of such person or persons to exercise the Option.
|
(e)
|
Payment of Option Price.
Payment of the aggregate Option Price for the shares of Stock with respect to which the Option is being exercised shall be made in cash or in one of the following manners:
|
(i)
|
By certified or bank cashier check;
|
(ii)
|
By delivery (including constructive delivery) to the Company of shares of Stock having an aggregate Fair Market Value on Date of Exercise equal to the aggregate Option Price; or
|
(iii)
|
By delivery on a form prescribed by the Committee of a properly executed exercise notice and irrevocable instructions to a registered securities broker approved by the Committee to sell shares of Stock and promptly deliver cash to the Company.
|
3.
|
Nontransferablity of Option
.
This Option may not be transferred in any manner otherwise than by will or the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee and after Optionee’s death by the legal representative of the Optionee’s estate or by the person or persons to whom the Optionee’s rights under the Option passed by will or the laws of descent and distribution. This Option shall not be pledged or hypothecated in any way and shall not be subject to executive, attachment of similar process except with the express consent of the Committee.
|
4.
|
Adjustments
.
|
(a)
|
Whenever a stock split, stock dividend or other relevant change in capitalization of the Company occurs, (1) the number of shares that can thereafter be purchased and the option price per share under each Option that has been granted and not exercise, and (2) the number of shares used in determining whether a particular Option is grantable thereafter shall be appropriately adjusted.
|
(b)
|
In the event of the dissolution or liquidation of the Company, any Option granted under the Plan shall terminate as of a date to be fixed by the Committee, provided that not less than 30 days’ written notice of the date so fixed shall be given to each Optionee and each such Optionee shall have the right during such period to exercise Optionee’s Option as to all or any part of the shares covered thereby, including shares as to which such Option would not otherwise be exercisable by reason of an insufficient lapse of time.
|
(c)
|
Adjustments and determinations under this paragraph 3 shall be made by the Board of Directors of the Company, whose decisions as to what adjustments or determinations shall be made, and the extent thereof, shall be final, binding and conclusive.
|
5.
|
Notices
.
Each notice relating to this Agreement shall be in writing and delivered in person or by certified mail to the proper address, and shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it as its principal office, attention of the Secretary. Each notice to the Optionee or other person or person then entitled to exercise the Option shall be addressed to the Optionee or such other person or persons at the Optionee’s address set forth in the heading of this Agreement. Anyone to whom a notice may be given under this Agreement may designate a new address by written notice to that effect.
|
6.
|
Benefits of Agreement
.
This Agreement shall inure to the benefit of and be binding upon each successor of the Company. All obligations imposed upon the Optionee and all rights granted to the Company under this Agreement shall be binding upon the Optionee’s heir, legal representatives and successors. This Agreement shall be the sole and exclusive source of any and all rights which the Optionee, the Optionee’s heirs, legal representatives, or successors may have in respect to the Plan or any options or Stock granted or issued thereunder whether to the Optionee or to any other person.
|
7.
|
Resolution of Disputes
.
Any dispute or disagreement which should arise under, or as a result of, or in any way relate to, the interpretation, construction or applicability of this Agreement will be determined by the Board of Directors of the Company. Any determination made hereunder shall be final, binding, and conclusive for all purposes.
|
|
AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY
|
|
|
|
|
|
By:
|
|
|
|
[Name and Title]
|
|
|
|
ATTEST:
|
|
|
|
|
|
|
|
|
[Name and Title]
|
|
|
|
|
|
|
OPTIONEE:
|
|
|
|
|
|
By:
|
|
|
|
|
1.
|
Option Price
.
The option price is [
$____
]
for each share, the price being at least 100% of the fair market value of a share of the Stock on the date of the grant of this Option.
|
2.
|
Exercise of Option and Vesting Schedule
.
This Option is granted for a ten (10) year term and, therefore, may not be exercised after the expiration of ten (10) years from the date that it is granted. This Option shall become exercisable at any time subject to terms of this Agreement and applicable law.
|
(a)
|
Vesting Schedule
. This Option will vest on [___________]. Should the Optionee resign or be terminated (except for death or disability) prior to the date of vesting, then Optionee will forfeit all rights under this Agreement.
|
(b)
|
Right to Exercise
. This Option shall be exercisable during the term of the Option, by the Optionee:
|
(i)
|
While the Optionee is an employee of the Company, or within thirty (30) days of the resignation or termination of Optionee as an employee; provided that in the event the Optionee’s service with the Company is terminated because of disability, as that term is defined in Section 105(d) (4) of the Internal Revenue Code, as amended (the “Code”), the Option privileges, with respect to the shares purchasable by the Optionee as of the date that the Optionee resigned or was terminated, may be exercised by the Optionee within one (1) year after the termination of the Optionee’s service by the Company. However, nothing contained within this statement shall be construed to extend the ultimate term of this Option beyond the period of time as set out above in paragraph 2.
|
(ii)
|
If the Optionee should die during the on period while employed by the Company, the option privileges may be exercised in full by the legal representative of the Optionee’s estate, or by the person or persons to whom the Optionee’s rights under the Option shall have passed by will or the laws of descent and distribution within one (1) year after the Optionee’s date of death. However, nothing contained within this statement shall be construed to extend the ultimate term of this Option beyond the period of time as set out above in paragraph 2.
|
(c)
|
Restrictions on Exercise
. The minimum number of shares for which this Option may be exercised is 50 shares. In addition, as a condition to the Optionee’s exercise of this option, the Company may require the person exercising this Option to execute any buy-sell agreement in effect between the Company and its shareholders and to make such representations or warranties to the Company as may be required by applicable law or regulation.
|
(d)
|
Method of Exercise
. This Option shall be exercisable by a written notice which shall:
|
(i)
|
State the election to exercise the Option, the number of shares in respect of which it is being exercised (which may be no less than 50 shares), the person in whose name the stock certificate for such shares of Stock is to be registered, the person’s address
|
(ii)
|
Contain such representations and agreements as to the holder’s investment intent with respect to such shares of Stock as may be satisfactory to the Company’s counsel; and
|
(iii)
|
Be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any persons other than the Optionee, be accompanied by proof satisfactory to counsel for the Company, of the right of such person or persons to exercise the Option.
|
(e)
|
Payment of Option Price.
Payment of the aggregate Option Price for the shares of Stock with respect to which an Option is being exercised shall be made by the Optionee in cash or in one of the following manners:
|
(i)
|
By certified or bank cashier check;
|
(ii)
|
By delivery (including constructive delivery) to the Company of shares of Stock having an aggregate Fair Market Value on Date of Exercise equal to the aggregate Option Price; or
|
(iii)
|
By delivery on a form prescribed by the Committee of a properly executed exercise notice and irrevocable instructions to a registered securities broker approved by the Committee to sell shares of Stock and promptly deliver cash to the Company.
|
3.
|
Withholding.
The Company’s obligation to deliver shares of Stock or pay any amount pursuant to the terms of any Option shall be subject to the satisfaction of applicable federal, state and local tax withholding requirements; provided that, an Optionee may satisfy any such withholding tax obligation by any of the following means or by a combination of such means: (i) tendering a cash payment, (ii) authorizing the Company to withhold shares of Stock otherwise issuable to the Optionee valued at Fair Market Value on Date of Exercise, or (iii) delivering to the Company already owned and unencumbered shares of Stock valued at Fair Market Value on Date of Exercise.
|
4.
|
Nontransferablity of Option
.
This Option may not be transferred in any manner otherwise than by will or the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee and after Optionee’s death by the legal representative of the Optionee’s estate or by the person or persons to whom the Optionee’s rights under the Option passed by will or the laws of descent and distribution. This Option shall not be pledged or hypothecated in any way and shall not be subject to executive, attachment of similar process except with the express consent of the Committee.
|
5.
|
Adjustments
|
(a)
|
Whenever a stock split, stock dividend or other relevant change in capitalization of the Company occurs, (1) the number of shares that can thereafter be purchased and the option price per share under each Option that has been granted and not exercise, and (2) the number of shares used in determining whether a particular Option is grantable thereafter shall be appropriately adjusted.
|
(b)
|
In the event of the dissolution or liquidation of the Company, any Option granted under the Plan shall terminate as of a date to be fixed by the Committee, provided that not less than 30 days’ written notice of the date so fixed shall be given to each Optionee and each such Optionee shall have the right during such period to exercise Optionee’s Option as to all or any part of the shares covered thereby, including shares as to which such Option would not otherwise be exercisable by reason of an insufficient lapse of time.
|
(c)
|
Adjustments and determinations under this paragraph 3 shall be made by the Board of Directors of the Company, whose decisions as to what adjustments or determinations shall be made, and the extent thereof, shall be final, binding and conclusive.
|
6.
|
Notices
.
Each notice relating to this Agreement shall be in writing and delivered in person or by certified mail to the proper address, and shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its principal office, attention of the Secretary. Each notice to the Optionee or other person or person then entitled to exercise the Option shall be addressed to the Optionee or such other person or persons at the Optionee’s address set forth in the heading of this Agreement. Anyone to whom a notice may be given under this Agreement may designate a new address by written notice to that effect.
|
7.
|
Benefits of Agreement
.
This Agreement shall inure to the benefit of and be binding upon each successor of the Company. All obligations imposed upon the Optionee and all rights granted to the Company under this Agreement shall be binding upon the Optionee’s heir, legal representatives and successors. This Agreement shall be the sole and exclusive source of any and all rights which the Optionee, the Optionee’s heirs, legal representatives, or successors may have in respect to the Plan or any options or Stock granted or issued thereunder whether to the Optionee or to any other person.
|
8.
|
Resolution of Disputes
.
Any dispute or disagreement which should arise under, or as a result of, or in any way relate to, the interpretation, construction or applicability of this Agreement will be determined by the Board of Directors of the Company. Any determination made hereunder shall be final, binding, and conclusive for all purposes.
|
|
AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY
|
|
|
|
|
|
By:
|
|
|
|
[Name and Title]
|
|
|
|
ATTEST:
|
|
|
|
|
|
|
|
|
[Name and Title]
|
|
|
|
|
|
|
OPTIONEE:
|
|
|
|
|
|
By:
|
|
|
|
|
1.
|
Option Price
.
The option price is [$ ____
]
for each share, the price being at least 100% of the fair market value of a share of the Stock on the date of the grant of this Option.
|
2.
|
Exercise of Option and Vesting Schedule
.
This Option is granted for a
ten
(10) year term and, therefore, may not be exercised after the expiration of ten (10) years from the date that it is granted. This Option shall become exercisable at any time subject to terms of this Agreement and applicable law.
|
(a)
|
Vesting Schedule
. This option will vest on the earlier of [___________] or the date Optionee retires from the Company if such retirement date occurs after the age of 65 and following 10 years of service with the Company. Should the Optionee be terminated (except for death, disability or retirement after the age of 65 and following 10 years of service with the Company), then Optionee will forfeit all rights under this agreement.
|
(b)
|
Right to Exercise
. This Option shall be exercisable during the term of the Option, by the Optionee:
|
(i)
|
While the Optionee is an employee of the Company, or within sixty (60) days of the termination of Optionee as an employee; provided that in the event Optionee’s employment by the Company is terminated because of disability, as that term is defined in Section 105(d) (4) of the Internal Revenue Code, as amended (the “Code”), the Option privileges, with respect to the shares purchasable by the Optionee as of the date that the Optionee terminated, may be exercised by the Optionee within one (1) year after the date of termination of the Optionee’s employment by the Company. However, nothing contained within this statement shall be construed to extend the ultimate term of this Option beyond the period of time as set out above in paragraph 2.
|
(ii)
|
If the Optionee should die during the option period while employed by the Company, the option privileges may be exercised in full by the legal representative of the Optionee’s estate, or by the person or persons to whom the Optionee’s rights under the Option shall have passed by will or the laws of descent and distribution within one (1) year after the Optionee’s date of death. However, nothing contained within this statement shall be construed to extend the ultimate term of this Option beyond the period of time as set out above in paragraph 2.
|
(c)
|
Restrictions on Exercise
. The minimum number of shares for which this Option may be exercised is 100 shares. In addition, as a condition to the Optionee’s exercise of this option, the Company may require the person exercising this Option to execute any buy-sell agreement in effect between the Company and its shareholders and to make such representations or warranties to the Company as may be required by applicable law or regulation.
|
(d)
|
Method of Exercise.
This Option shall be exercisable by a written notice which shall:
|
(i)
|
State the election to exercise the Option, the number of shares in respect of which it is being exercised (which may be no less than 100 shares), the person in whose name the stock certificate for such shares of Stock is to be registered, the person’s address and social security number (or if more than one, the names, addresses and social security numbers of such persons);
|
(ii)
|
Contain such representations and agreements as to the holder’s investment intent with respect to such shares of Stock as may be satisfactory to the Company’s counsel; and
|
(iii)
|
Be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any persons other than the Optionee, be accompanied by proof satisfactory to counsel for the Company, of the right of such person or persons to exercise the Option.
|
(e)
|
Payment of Option Price.
Payment of the aggregate Option Price for the shares of Stock with respect to which an Option is being exercised shall be made by the Optionee in cash or in one of the following manners:
|
(i)
|
By certified or bank cashier check or wire transfer;
|
(ii)
|
By delivery (including constructive delivery) to the Company of shares of Stock having an aggregate Fair Market Value on Date of Exercise equal to the aggregate Option Price; or
|
(iii)
|
By delivery on a form prescribed by the Committee of a properly executed exercise notice and irrevocable instructions to a registered securities broker approved by the Committee to sell shares of Stock and promptly deliver cash to the Company.
|
(f)
|
Withholding.
The Company’s obligation to deliver shares of Stock or pay any amount pursuant to the terms of any Option shall be subject to satisfaction of applicable federal, state and local tax withholding requirements.. Optionee may satisfy any such withholding tax obligation by any of the following means or by a combination of such means: (i) tendering a cash payment, (ii) authorizing the Company to withhold shares of Stock otherwise issuable to the Optionee valued at Fair Market Value on Date of Exercise, or (iii) delivering to the Company already owned and unencumbered shares of Stock valued at Fair Market Value on Date of Exercise.
|
3.
|
Nontransferablity of Option
.
This Option may not be transferred in any manner otherwise than by will or the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee and after Optionee’s death by the legal representative of the Optionee’s estate or by the person or persons to whom the Optionee’s rights under the Option passed by will or the laws of descent and distribution. This Option shall not be pledged or hypothecated in any way and shall not be subject to executive, attachment of similar process except with the express consent of the Committee.
|
4.
|
Adjustments
:
|
(a)
|
Whenever a stock split, stock dividend or other relevant change in capitalization of the Company occurs, (1) the number of shares that can thereafter be purchased and the option price per share under each Option that has been granted and not exercise, and (2) the number of shares used in determining whether a particular Option is grantable thereafter shall be appropriately adjusted.
|
(b)
|
In the event of the dissolution or liquidation of the Company, any Option granted under the Plan shall terminate as of a date to be fixed by the Committee, provided that not less than 30 days’ written notice of the date so fixed shall be given to each Optionee and each such Optionee shall have the right during such period to exercise Optionee’s Option as to all or
|
(c)
|
Adjustments and determinations under this paragraph 3 shall be made by the Board of Directors of the Company, whose decisions as to what adjustments or determinations shall be made, and the extent thereof, shall be final, binding and conclusive.
|
5.
|
Notices
.
Each notice relating to this Agreement shall be in writing and delivered in person or by certified mail to the proper address, and shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its principal office, attention of the Secretary. Each notice to the Optionee or other person or person then entitled to exercise the Option shall be addressed to the Optionee or such other person or persons at the Optionee’s address set forth in the heading of this Agreement. Anyone to whom a notice may be given under this Agreement may designate a new address by written notice to that effect.
|
6.
|
Benefits of Agreement
.
This Agreement shall inure to the benefit of and be binding upon each successor of the Company. All obligations imposed upon the Optionee and all rights granted to the Company under this Agreement shall be binding upon the Optionee’s heir, legal representatives and successors. This Agreement shall be the sole and exclusive source of any and all rights which the Optionee, the Optionee’s heirs, legal representatives, or successors may have in respect to the Plan or any options or Stock granted or issued thereunder whether to the Optionee or to any other person.
|
7.
|
Resolution of Disputes
.
Any dispute or disagreement which should arise under, or as a result of, or in any way relate to, the interpretation, construction or applicability of this Agreement will be determined by the Board of Directors of the Company. Any determination made hereunder shall be final, binding, and conclusive for all purposes.
|
|
AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY
|
|
|
|
|
|
By:
|
|
|
|
[Name and Title]
|
|
|
|
ATTEST:
|
|
|
|
|
|
|
|
|
[Name and Title]
|
|
|
|
|
|
|
OPTIONEE:
|
|
|
|
|
|
By:
|
|
|
|
|
AMERICAN EQUITY INVESTMENT
|
|
EXECUTIVE
|
||
LIFE HOLDING COMPANY
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
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|
|
Three Months Ended
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
March 31, 2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Consolidated income before income taxes
|
$
|
177,611
|
|
|
$
|
316,271
|
|
|
$
|
130,247
|
|
|
$
|
337,314
|
|
|
$
|
196,064
|
|
|
$
|
389,332
|
|
Interest sensitive and index product benefits and amortization of deferred sales inducements
|
614,518
|
|
|
2,200,280
|
|
|
976,638
|
|
|
1,177,443
|
|
|
1,605,119
|
|
|
1,525,980
|
|
||||||
Interest expense on notes and loan payable
|
6,372
|
|
|
30,368
|
|
|
28,248
|
|
|
28,849
|
|
|
36,370
|
|
|
38,870
|
|
||||||
Interest expense on subordinated debentures
|
3,630
|
|
|
14,124
|
|
|
12,958
|
|
|
12,239
|
|
|
12,122
|
|
|
12,088
|
|
||||||
Interest expense on amounts due under repurchase agreements and other interest expense
|
31
|
|
|
334
|
|
|
30
|
|
|
2
|
|
|
18
|
|
|
139
|
|
||||||
Interest portion of rental expense
|
292
|
|
|
967
|
|
|
920
|
|
|
902
|
|
|
896
|
|
|
843
|
|
||||||
Consolidated earnings
|
$
|
802,454
|
|
|
$
|
2,562,344
|
|
|
$
|
1,149,041
|
|
|
$
|
1,556,749
|
|
|
$
|
1,850,589
|
|
|
$
|
1,967,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest sensitive and index product benefits and amortization of deferred sales inducements
|
$
|
614,518
|
|
|
$
|
2,200,280
|
|
|
$
|
976,638
|
|
|
$
|
1,177,443
|
|
|
$
|
1,605,119
|
|
|
$
|
1,525,980
|
|
Interest expense on notes and loan payable
|
6,372
|
|
|
30,368
|
|
|
28,248
|
|
|
28,849
|
|
|
36,370
|
|
|
38,870
|
|
||||||
Interest expense on subordinated debentures
|
3,630
|
|
|
14,124
|
|
|
12,958
|
|
|
12,239
|
|
|
12,122
|
|
|
12,088
|
|
||||||
Interest expense on amounts due under repurchase agreements and other interest expense
|
31
|
|
|
334
|
|
|
30
|
|
|
2
|
|
|
18
|
|
|
139
|
|
||||||
Interest portion of rental expense
|
292
|
|
|
967
|
|
|
920
|
|
|
902
|
|
|
896
|
|
|
843
|
|
||||||
Combined fixed charges
|
$
|
624,843
|
|
|
$
|
2,246,073
|
|
|
$
|
1,018,794
|
|
|
$
|
1,219,435
|
|
|
$
|
1,654,525
|
|
|
$
|
1,577,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of consolidated earnings to fixed charges
|
1.3
|
|
|
1.1
|
|
|
1.1
|
|
|
1.3
|
|
|
1.1
|
|
|
1.2
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of consolidated earnings to fixed charges, both excluding interest sensitive and index product benefits and amortization of deferred sales inducements
|
18.2
|
|
|
7.9
|
|
|
4.1
|
|
|
9.0
|
|
|
5.0
|
|
|
8.5
|
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of American Equity Investment Life Holding Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 8, 2018
|
By:
|
|
/s/ JOHN M. MATOVINA
|
|
|
|
|
John M. Matovina, Chief Executive Officer and President
(Principal Executive Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of American Equity Investment Life Holding Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 8, 2018
|
By:
|
|
/s/ TED M. JOHNSON
|
|
|
|
|
Ted M. Johnson, Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 8, 2018
|
By:
|
|
/s/ JOHN M. MATOVINA
|
|
|
|
|
John M. Matovina, Chief Executive Officer and President
(Principal Executive Officer)
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 8, 2018
|
By:
|
|
/s/ TED M. JOHNSON
|
|
|
|
|
Ted M. Johnson, Chief Financial Officer and Treasurer
(Principal Financial Officer)
|