| Comprehensive Income |
13. Comprehensive Income
Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes
the unrealized investment gains or losses on securities available for sale (net of adjustments for realized investment gains or losses) net of adjustments to DAC, VOBA, future policy benefits, and policyholder account balances. In addition, other
comprehensive income includes the change in the liability for benefit plan obligations. Other comprehensive income reflects these items net of tax.
The table below
provides information about comprehensive income for the second quarters and six months ended June 30, 2012 and 2011.
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Quarter Ended June 30, 2012 |
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Before-Tax
Amount |
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Tax (Expense)
or Benefit |
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Net-of-Tax
Amount |
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Net unrealized gains (losses) arising during the year
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Fixed maturity securities
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$ |
32,275 |
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$ |
11,297 |
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$ |
20,978 |
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Equity securities
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(55 |
) |
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(20 |
) |
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(35 |
) |
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Less reclassification adjustments:
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|
|
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|
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Net realized investment gains (losses), excluding impairment losses
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412 |
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144 |
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268 |
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Other-than-temporary impairment losses recognized in earnings
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(188 |
) |
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(66 |
) |
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(122 |
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Other-than-temporary impairment losses recognized in other comprehensive income
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42 |
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15 |
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27 |
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Net unrealized gains (losses) excluding impairment losses
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31,954 |
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11,184 |
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20,770 |
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Effect on DAC and VOBA
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(7,454 |
) |
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(2,609 |
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(4,845 |
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Future policy benefits
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(5,389 |
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(1,887 |
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(3,502 |
) |
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Policyholder account balances
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(219 |
) |
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(76 |
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(143 |
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Other comprehensive income
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$ |
18,892 |
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$ |
6,612 |
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$ |
12,280 |
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Net income
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8,397 |
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Comprehensive income
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$ |
20,677 |
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Quarter Ended June 30, 2011 |
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Before-Tax
Amount |
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Tax (Expense)
or Benefit |
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Net-of-Tax
Amount |
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Net unrealized gains (losses) arising during the year
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Fixed maturity securities
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$ |
39,150 |
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$ |
13,703 |
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$ |
25,447 |
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Equity securities
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41 |
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14 |
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27 |
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Less reclassification adjustments:
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Net realized investment gains (losses), excluding impairment losses
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2,013 |
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705 |
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1,308 |
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Other-than-temporary impairment losses recognized in earnings
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(238 |
) |
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(83 |
) |
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(155 |
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Other-than-temporary impairment losses recognized in other comprehensive income
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56 |
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20 |
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36 |
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Net unrealized gains (losses) excluding impairment losses
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37,360 |
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13,075 |
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24,285 |
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Effect on DAC and VOBA
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(6,897 |
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(2,414 |
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(4,483 |
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Future policy benefits
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(4,502 |
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(1,576 |
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(2,926 |
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Policyholder account balances
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(127 |
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(44 |
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(83 |
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Other comprehensive income
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$ |
25,834 |
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$ |
9,041 |
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$ |
16,793 |
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Net income
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11,173 |
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Comprehensive income
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$ |
27,966 |
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Six Months Ended June 30, 2012 |
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Before-Tax
Amount |
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Tax (Expense)
or Benefit |
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Net-of-Tax
Amount |
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Net unrealized gains (losses) arising during the year
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Fixed maturity securities
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$ |
39,599 |
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$ |
13,860 |
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$ |
25,739 |
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Equity securities
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(53 |
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(19 |
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(34 |
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Less reclassification adjustments:
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Net realized investment gains (losses), excluding impairment losses
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880 |
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308 |
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572 |
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Other-than-temporary impairment losses recognized in earnings
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(456 |
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(160 |
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(296 |
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Other-than-temporary impairment losses recognized in other comprehensive income
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150 |
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53 |
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97 |
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Net unrealized gains (losses) excluding impairment losses
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38,972 |
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13,640 |
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25,332 |
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Effect on DAC and VOBA
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(11,254 |
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(3,939 |
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(7,315 |
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Future policy benefits
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(7,645 |
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(2,676 |
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(4,969 |
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Policyholder account balances
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(335 |
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(117 |
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(218 |
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Other comprehensive income
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$ |
19,738 |
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$ |
6,908 |
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$ |
12,830 |
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Net income
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27,838 |
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Comprehensive income
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$ |
40,668 |
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Six Months Ended June 30, 2011 |
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Before-Tax
Amount |
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Tax (Expense)
or Benefit |
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Net-of-Tax
Amount |
|
|
Net unrealized gains (losses) arising during the year
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|
|
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|
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Fixed maturity securities
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$ |
39,004 |
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$ |
13,652 |
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$ |
25,352 |
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Equity securities
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69 |
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24 |
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45 |
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Less reclassification adjustments:
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Net realized investment gains (losses), excluding impairment losses
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3,133 |
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1,097 |
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2,036 |
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Other-than-temporary impairment losses recognized in earnings
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(507 |
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(177 |
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(330 |
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Other-than-temporary impairment losses recognized in other comprehensive income
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114 |
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40 |
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74 |
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Net unrealized gains (losses) excluding impairment losses
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36,333 |
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12,716 |
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23,617 |
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Effect on DAC and VOBA
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(6,830 |
) |
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(2,391 |
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(4,439 |
) |
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Future policy benefits
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(3,395 |
) |
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(1,189 |
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(2,206 |
) |
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Policyholder account balances
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(117 |
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(40 |
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(77 |
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Other comprehensive income
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$ |
25,991 |
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$ |
9,096 |
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$ |
16,895 |
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Net income
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15,964 |
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Comprehensive income
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$ |
32,859 |
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The following
table provides accumulated balances related to each component of accumulated other comprehensive income at June 30, 2012.
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Net
Unrealized
Gain (Loss) on
Non-Impaired
Securities |
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Net
Unrealized
Gain (Loss) on
Impaired
Securities |
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Benefit
Plan
Obligations |
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DAC/
VOBA
Impact |
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Future
Policy
Benefits |
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Policyholder
Account
Balances |
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Tax Effect |
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Total |
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Beginning of year
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$ |
213,800 |
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$ |
(15,612 |
) |
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$ |
(78,451 |
) |
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$ |
(56,971 |
) |
|
$ |
(15,903 |
) |
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$ |
(578 |
) |
|
$ |
(16,199 |
) |
|
$ |
30,086 |
|
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Other comprehensive income
|
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|
33,164 |
|
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|
5,808 |
|
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|
- |
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(11,254 |
) |
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|
(7,645 |
) |
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|
(335 |
) |
|
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(6,908 |
) |
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|
12,830 |
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End of period
|
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$ |
246,964 |
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|
$ |
(9,804 |
) |
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$ |
(78,451 |
) |
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$ |
(68,225 |
) |
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$ |
(23,548 |
) |
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$ |
(913 |
) |
|
$ |
(23,107 |
) |
|
$ |
42,916 |
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