| 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 third
quarters and nine months ended September 30, 2012 and
2011.
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Quarter Ended
September 30, 2012 |
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| |
|
Before-Tax |
|
|
Tax (Expense) |
|
|
Net-of-Tax |
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| |
|
Amount |
|
|
or Benefit |
|
|
Amount |
|
|
Net unrealized gains
(losses) arising during the year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturity
securities
|
|
$ |
40,197 |
|
|
$ |
14,068 |
|
|
$ |
26,129 |
|
|
Equity securities
|
|
|
58 |
|
|
|
21 |
|
|
|
37 |
|
|
Less reclassification
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment
gains, excluding impairment losses
|
|
|
423 |
|
|
|
148 |
|
|
|
275 |
|
|
Other-than-temporary
impairment losses recognized in earnings
|
|
|
(697 |
) |
|
|
(244 |
) |
|
|
(453 |
) |
|
Other-than-temporary
impairment losses recognized in other comprehensive
income
|
|
|
47 |
|
|
|
16 |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net unrealized gains
excluding impairment losses
|
|
|
40,482 |
|
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|
14,169 |
|
|
|
26,313 |
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Effect on DAC and
VOBA
|
|
|
(6,585 |
) |
|
|
(2,305 |
) |
|
|
(4,280 |
) |
|
Future policy
benefits
|
|
|
(5,564 |
) |
|
|
(1,947 |
) |
|
|
(3,617 |
) |
|
Policyholder account
balances
|
|
|
(274 |
) |
|
|
(96 |
) |
|
|
(178 |
) |
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|
|
|
|
|
|
|
|
|
|
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Other comprehensive
income
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|
$ |
28,059 |
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|
$ |
9,821 |
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$ |
18,238 |
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Net income
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4,132 |
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Comprehensive
income
|
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$ |
22,370 |
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Quarter Ended
September 30, 2011 |
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| |
|
Before-Tax |
|
|
Tax (Expense) |
|
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Net-of-Tax |
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| |
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Amount |
|
|
or Benefit |
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|
Amount |
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Net unrealized gains
(losses) arising during the year:
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|
|
|
|
|
|
|
|
|
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Fixed maturity
securities
|
|
$ |
58,107 |
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$ |
20,339 |
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|
$ |
37,768 |
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Equity securities
|
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|
(523 |
) |
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|
(183 |
) |
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|
(340 |
) |
|
Less reclassification
adjustments:
|
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|
|
|
|
|
|
|
|
|
|
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Net realized investment
gains, excluding impairment losses
|
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|
204 |
|
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|
71 |
|
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|
133 |
|
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Other-than-temporary
impairment losses recognized in earnings
|
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|
(167 |
) |
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|
(59 |
) |
|
|
(108 |
) |
|
Other-than-temporary
impairment losses recognized in other comprehensive
income
|
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|
17 |
|
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|
6 |
|
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|
11 |
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Net unrealized gains
excluding impairment losses
|
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57,530 |
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|
20,138 |
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|
37,392 |
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Effect on DAC and
VOBA
|
|
|
(20,189 |
) |
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|
(7,066 |
) |
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|
(13,123 |
) |
|
Future policy
benefits
|
|
|
(5,940 |
) |
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|
(2,078 |
) |
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|
(3,862 |
) |
|
Policyholder account
balances
|
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|
(148 |
) |
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|
(53 |
) |
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|
(95 |
) |
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Other comprehensive
income
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$ |
31,253 |
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$ |
10,941 |
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$ |
20,312 |
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Net income
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4,466 |
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|
|
|
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Comprehensive
income
|
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$ |
24,778 |
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Nine Months
Ended
September 30, 2012 |
|
| |
|
Before-Tax |
|
|
Tax (Expense) |
|
|
Net-of-Tax |
|
| |
|
Amount |
|
|
or Benefit |
|
|
Amount |
|
|
Net unrealized gains
(losses) arising during the year:
|
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|
|
|
|
|
|
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Fixed maturity
securities
|
|
$ |
79,796 |
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|
$ |
27,928 |
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|
$ |
51,868 |
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Equity securities
|
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|
5 |
|
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|
2 |
|
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|
3 |
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|
Less reclassification
adjustments:
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|
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|
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Net realized investment
gains, excluding impairment losses
|
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|
1,303 |
|
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|
456 |
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|
847 |
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Other-than-temporary
impairment losses recognized in earnings
|
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|
(1,153 |
) |
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(404 |
) |
|
|
(749 |
) |
|
Other-than-temporary
impairment losses recognized in other comprehensive
income
|
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|
197 |
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|
69 |
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|
128 |
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Net unrealized gains
excluding impairment losses
|
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|
79,454 |
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|
27,809 |
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|
51,645 |
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Effect on DAC and
VOBA
|
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|
(17,839 |
) |
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(6,244 |
) |
|
|
(11,595 |
) |
|
Future policy
benefits
|
|
|
(13,209 |
) |
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|
(4,623 |
) |
|
|
(8,586 |
) |
|
Policyholder account
balances
|
|
|
(609 |
) |
|
|
(213 |
) |
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|
(396 |
) |
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|
|
|
|
|
|
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Other comprehensive
income
|
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$ |
47,797 |
|
|
$ |
16,729 |
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$ |
31,068 |
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Net income
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31,970 |
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Comprehensive
income
|
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|
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$ |
63,038 |
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Nine Months
Ended
September 30, 2011 |
|
| |
|
Before-Tax |
|
|
Tax (Expense) |
|
|
Net-of-Tax |
|
| |
|
Amount |
|
|
or Benefit |
|
|
Amount |
|
|
Net unrealized gains
(losses) arising during the year:
|
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|
|
|
|
|
|
|
|
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Fixed maturity
securities
|
|
$ |
97,111 |
|
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$ |
33,991 |
|
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$ |
63,120 |
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|
Equity securities
|
|
|
(454 |
) |
|
|
(159 |
) |
|
|
(295 |
) |
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Less reclassification
adjustments:
|
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|
|
|
|
|
|
|
|
|
|
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Net realized investment
gains, excluding impairment losses
|
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|
3,337 |
|
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|
1,168 |
|
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|
2,169 |
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|
Other-than-temporary
impairment losses recognized in earnings
|
|
|
(674 |
) |
|
|
(236 |
) |
|
|
(438 |
) |
|
Other-than-temporary
impairment losses recognized in other comprehensive
income
|
|
|
131 |
|
|
|
46 |
|
|
|
85 |
|
|
|
|
|
|
|
|
|
|
|
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Net unrealized gains
excluding impairment losses
|
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|
93,863 |
|
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|
32,854 |
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|
61,009 |
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|
Effect on DAC and
VOBA
|
|
|
(27,019 |
) |
|
|
(9,457 |
) |
|
|
(17,562 |
) |
|
Future policy
benefits
|
|
|
(9,335 |
) |
|
|
(3,267 |
) |
|
|
(6,068 |
) |
|
Policyholder account
balances
|
|
|
(265 |
) |
|
|
(93 |
) |
|
|
(172 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
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|
Other comprehensive
income
|
|
$ |
57,244 |
|
|
$ |
20,037 |
|
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$ |
37,207 |
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|
|
|
|
|
|
|
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Net income
|
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|
|
|
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|
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|
20,430 |
|
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|
|
|
|
|
|
|
|
|
|
|
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|
Comprehensive
income
|
|
|
|
|
|
|
|
|
|
$ |
57,637 |
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|
|
|
|
|
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|
The following
table provides accumulated balances related to each component of
accumulated other comprehensive income at September 30,
2012.
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| |
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Net |
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Net |
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Unrealized |
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|
Unrealized |
|
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Gain (Loss) on |
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Gain (Loss) on |
|
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Benefit |
|
|
DAC/ |
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|
Future |
|
|
Policyholder |
|
|
|
|
|
|
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| |
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Non-Impaired |
|
|
Impaired |
|
|
Plan |
|
|
VOBA |
|
|
Policy |
|
|
Account |
|
|
|
|
|
|
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| |
|
Securities |
|
|
Securities |
|
|
Obligations |
|
|
Impact |
|
|
Benefits |
|
|
Balances |
|
|
Tax Effect |
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Total |
|
|
Beginning of year
|
|
$ |
213,800 |
|
|
$ |
(15,612 |
) |
|
$ |
(78,451 |
) |
|
$ |
(56,971 |
) |
|
$ |
(15,903 |
) |
|
$ |
(578 |
) |
|
$ |
(16,199 |
) |
|
$ |
30,086 |
|
|
Other comprehensive
income
|
|
|
65,031 |
|
|
|
14,423 |
|
|
|
- |
|
|
|
(17,839 |
) |
|
|
(13,209 |
) |
|
|
(609 |
) |
|
|
(16,729 |
) |
|
|
31,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
End of period
|
|
$ |
278,831 |
|
|
$ |
(1,189 |
) |
|
$ |
(78,451 |
) |
|
$ |
(74,810 |
) |
|
$ |
(29,112 |
) |
|
$ |
(1,187 |
) |
|
$ |
(32,928 |
) |
|
$ |
61,154 |
|
|
|
|
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