DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION Document (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 12, 2014 | Jun. 28, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'CNO Financial Group, Inc. | ' | ' |
Entity Central Index Key | '0001224608 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Public Float | ' | ' | $2.80 |
Entity Common Stock, Shares Outstanding | ' | 220,343,659 | ' |
CONSOLIDATED_BALANCE_SHEET
CONSOLIDATED BALANCE SHEET (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Investments: | ' | ' |
Fixed maturities, available for sale, at fair value (amortized cost: 2013 - $21,860.6; 2012 - $21,626.8) | $23,178.30 | $24,614.10 |
Equity securities at fair value (cost: 2013 - $237.9; 2012 - $167.1) | 249.3 | 171.4 |
Mortgage loans | 1,729.50 | 1,573.20 |
Policy loans | 277 | 272 |
Trading securities | 247.6 | 266.2 |
Investments held by variable interest entities | 1,046.70 | 814.3 |
Other invested assets | 423.3 | 248.1 |
Total investments | 27,151.70 | 27,959.30 |
Cash and cash equivalents - unrestricted | 699 | 582.5 |
Cash and cash equivalents held by variable interest entities | 104.3 | 54.2 |
Accrued investment income | 286.9 | 286.2 |
Present value of future profits | 679.3 | 626 |
Deferred acquisition costs | 968.1 | 629.7 |
Reinsurance receivables | 3,392.10 | 2,927.70 |
Income tax assets, net | 1,147.20 | 716.9 |
Assets held in separate accounts | 10.3 | 14.9 |
Other assets | 341.7 | 334 |
Total assets | 34,780.60 | 34,131.40 |
Liabilities for insurance products: | ' | ' |
Policyholder account balances | 12,776.40 | 12,913.10 |
Future policy benefits | 11,222.50 | 11,319.40 |
Liability for policy and contract claims | 566 | 559.3 |
Unearned and advanced premiums | 300.6 | 282.8 |
Liabilities related to separate accounts | 10.3 | 14.9 |
Other liabilities | 590.6 | 570.6 |
Payable to reinsurer | 590.3 | 0 |
Investment borrowings | 1,900 | 1,650.80 |
Borrowings related to variable interest entities | 1,012.30 | 767 |
Notes payable – direct corporate obligations | 856.4 | 1,004.20 |
Total liabilities | 29,825.40 | 29,082.10 |
Commitments and Contingencies (Note 7) | ' | ' |
Shareholders' equity: | ' | ' |
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2013 – 220,323,823; 2012 – 221,502,371) | 2.2 | 2.2 |
Additional paid-in capital | 4,092.80 | 4,174.70 |
Accumulated other comprehensive income | 731.8 | 1,197.40 |
Retained earnings (accumulated deficit) | 128.4 | -325 |
Total shareholders' equity | 4,955.20 | 5,049.30 |
Total liabilities and shareholders' equity | $34,780.60 | $34,131.40 |
PARENTHETICAL_DATA_TO_THE_CONS
PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEET (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Investments: | ' | ' |
Fixed maturities, available for sale, amortized cost | $21,860.60 | $21,626.80 |
Equity securities cost | $237.90 | $167.10 |
Shareholders' equity: | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, number of shares authorized | 8,000,000,000 | 8,000,000,000 |
Common stock, number of shares issued | 220,323,823 | 221,502,371 |
Common stock, number of shares outstanding | 220,323,823 | 221,502,371 |
CONSOLIDATED_STATEMENT_OF_OPER
CONSOLIDATED STATEMENT OF OPERATIONS (USD $) | 12 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
Insurance policy income | $2,744.70 | $2,755.40 | $2,690.50 |
Net investment income (loss): | ' | ' | ' |
General account assets | 1,405.80 | 1,398.50 | 1,360.70 |
Policyholder and reinsurer accounts and other special-purpose portfolios | 258.2 | 87.9 | -6.6 |
Realized investment gains (losses): | ' | ' | ' |
Net realized investment gains, excluding impairment losses | 45 | 118.9 | ' |
Other-than-temporary impairment losses: | ' | ' | ' |
Total other-than-temporary impairment losses | -11.6 | -37.8 | -39.9 |
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 5.3 |
Net impairment losses recognized | -11.6 | -37.8 | -34.6 |
Total realized gains | 33.4 | 81.1 | 61.8 |
Fee revenue and other income | 34 | 19.8 | 18.2 |
Total revenues | 4,476.10 | 4,342.70 | 4,124.60 |
Benefits and expenses: | ' | ' | ' |
Insurance policy benefits | 2,839.70 | 2,763.90 | 2,699 |
Loss related to reinsurance transaction (see note 2 - Reinsurance) | 98.4 | 0 | 0 |
Interest expense | 105.3 | 114.6 | 114.1 |
Amortization | 296.3 | 289 | 297.4 |
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 |
Other operating costs and expenses | 766.2 | 819.3 | 704.5 |
Total benefits and expenses | 4,171.30 | 4,187 | 3,818.40 |
Income before income taxes | 304.8 | 155.7 | 306.2 |
Income tax expense: | ' | ' | ' |
Tax expense on period income | 128.3 | 106.2 | 113.5 |
Valuation allowance for deferred tax assets and other tax items | -301.5 | -171.5 | -143 |
Net income | $478 | $221 | $335.70 |
Basic: | ' | ' | ' |
Weighted average shares outstanding (in shares) | 221,628 | 233,685 | 247,952 |
Net income (in dollars per share) | $2.16 | $0.95 | $1.35 |
Diluted: | ' | ' | ' |
Weighted average shares outstanding (in shares) | 232,702 | 281,427 | 304,081 |
Net income (in dollars per share) | $2.06 | $0.83 | $1.15 |
CONSOLIDATED_STATEMENT_OF_COMP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $478 | $221 | $335.70 |
Unrealized gains (losses) for the period | -1,627.40 | 1,336.20 | 1,357.70 |
Amortization of present value of future profits and deferred acquisition costs | 175.2 | -107.1 | -167.1 |
Amount related to premium deficiencies assuming the net unrealized gains had been realized | 774.2 | -531 | -271 |
Reclassification adjustments: | ' | ' | ' |
For net realized investment gains included in net income | -39.8 | -68.7 | -101 |
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains included in net income | 1.6 | 6.5 | 5.4 |
Unrealized gains (losses) on investments | -716.2 | 635.9 | 824 |
Change related to deferred compensation plan | 0.8 | 0.4 | -0.6 |
Other comprehensive income (loss) before tax | -715.4 | 636.3 | 823.4 |
Income tax (expense) benefit related to items of accumulated other comprehensive income | 249.8 | -220.5 | -294.5 |
Other comprehensive income (loss), net of tax | -465.6 | 415.8 | 528.9 |
Comprehensive income | $12.40 | $636.80 | $864.60 |
CONSOLIDATED_STATEMENT_OF_SHAR
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $) | Total | Common stock and additional paid-in capital | Accumulated other comprehensive income | Retained earnings (accumulated deficit) |
In Millions, unless otherwise specified | ||||
Balance, beginning of period at Dec. 31, 2010 | $3,811.60 | $4,426.70 | $252.70 | ($867.80) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Net income | 335.7 | ' | ' | 335.7 |
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | 528.7 | ' | 528.7 | ' |
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | 0.2 | ' | 0.2 | ' |
Cost of shares acquired | -69.8 | -69.8 | ' | ' |
Stock options, restricted stock and performance units | 7.4 | ' | ' | ' |
Balance, end of period at Dec. 31, 2011 | 4,613.80 | 4,364.30 | 781.6 | -532.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Net income | 221 | ' | ' | 221 |
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | 407.8 | ' | 407.8 | ' |
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | 8 | ' | 8 | ' |
Extinguishment of beneficial conversion feature related to the repurchase of convertible debentures | -24 | -24 | 0 | 0 |
Cost of shares acquired | -180.2 | -180.2 | ' | ' |
Dividends on common stock | -13.9 | 0 | 0 | -13.9 |
Stock options, restricted stock and performance units | 16.8 | 16.8 | ' | ' |
Balance, end of period at Dec. 31, 2012 | 5,049.30 | 4,176.90 | 1,197.40 | -325 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Net income | 478 | 0 | 0 | 478 |
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | -463.7 | 0 | -463.7 | 0 |
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | -1.9 | 0 | -1.9 | 0 |
Extinguishment of beneficial conversion feature related to the repurchase of convertible debentures | -12.6 | -12.6 | 0 | 0 |
Cost of shares acquired | -118.4 | -118.4 | 0 | 0 |
Dividends on common stock | -24.6 | 0 | 0 | -24.6 |
Conversion of convertible debentures | 24.9 | 24.9 | 0 | 0 |
Stock options, restricted stock and performance units | 24.2 | 24.2 | 0 | 0 |
Balance, end of period at Dec. 31, 2013 | $4,955.20 | $4,095 | $731.80 | $128.40 |
PARENTHETICAL_DATA_TO_THE_CONS1
PARENTHETICAL DATA TO THE CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Stockholders' Equity [Abstract] | ' | ' | ' |
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit) | ($248.70) | $216.10 | $294.40 |
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit) | ($1.10) | $4.40 | $0.10 |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Insurance policy income | $2,464.90 | $2,419.70 | $2,382.80 |
Net investment income | 1,387.70 | 1,385.80 | 1,418.60 |
Fee revenue and other income | 34 | 19.8 | 18.2 |
Insurance policy benefits | -2,093.80 | -2,096.50 | -2,044.90 |
Interest expense | -95.9 | -109 | -95.5 |
Deferrable policy acquisition costs | -222.8 | -191.7 | -216.7 |
Other operating costs | -745.7 | -786.7 | -684.3 |
Taxes | -8 | -6.5 | -3.4 |
Net cash provided by operating activities | 720.4 | 634.9 | 774.8 |
Cash flows from investing activities: | ' | ' | ' |
Sales of investments | 2,315.80 | 2,057.60 | 5,504.50 |
Maturities and redemptions of investments | 2,491.90 | 1,967.40 | 1,093.50 |
Purchases of investments | -5,367.10 | -4,271.10 | -8,156.10 |
Net sales of trading securities | 30 | 60.4 | 300.2 |
Change in cash and cash equivalents held by variable interest entities | -50.1 | 20.2 | -47.6 |
Other | -23 | -31.6 | -32.5 |
Net cash used by investing activities | -602.5 | -197.1 | -1,338 |
Cash flows from financing activities: | ' | ' | ' |
Issuance of notes payable, net | 0 | 944.5 | 0 |
Payments on notes payable | -126.9 | -810.6 | -144.8 |
Expenses related to extinguishment of debt | -61.6 | -183 | 0 |
Amount paid to extinguish the beneficial conversion feature associated with repurchase of convertible debentures | -12.6 | -24 | 0 |
Issuance of common stock | 15.1 | 3.1 | 2.2 |
Payments to repurchase common stock | -118.4 | -180.2 | -69.8 |
Common stock dividends paid | -24.4 | -13.9 | 0 |
Amounts received for deposit products | 1,298.10 | 1,296.70 | 1,693.50 |
Withdrawals from deposit products | -1,464.40 | -1,544.90 | -1,664.30 |
Issuance of investment borrowings: | ' | ' | ' |
Federal Home Loan Bank | 500 | 375 | 717 |
Related to variable interest entities | 376.3 | 246.7 | 236.4 |
Payments on investment borrowings: | ' | ' | ' |
Federal Home Loan Bank | -250.5 | -375 | -267 |
Related to variable interest entities and other | -132.1 | -0.9 | -100.7 |
Investment borrowings - repurchase agreements, net | 0 | -24.8 | 24.8 |
Net cash provided (used) by financing activities | -1.4 | -291.3 | 427.3 |
Net increase (decrease) in cash and cash equivalents | 116.5 | 146.5 | -135.9 |
Cash and cash equivalents, beginning of year | 582.5 | 436 | 571.9 |
Cash and cash equivalents, end of year | $699 | $582.50 | $436 |
BUSINESS_AND_BASIS_OF_PRESENTA
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended | |
Dec. 31, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
BUSINESS AND BASIS OF PRESENTATION | ' | |
BUSINESS AND BASIS OF PRESENTATION | ||
CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products. The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries. Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries. | ||
We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets. We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing. | ||
The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; Other CNO Business, comprised primarily of products we no longer sell actively; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. The Company's segments are described below: | ||
• | Bankers Life, which markets and distributes Medicare supplement insurance, interest-sensitive life insurance, traditional life insurance, fixed annuities and long-term care insurance products to the middle-income senior market through a dedicated field force of career agents and sales managers supported by a network of community-based sales offices. The Bankers Life segment includes primarily the business of Bankers Life and Casualty Company ("Bankers Life"). Bankers Life also markets and distributes Medicare Advantage plans primarily through distribution arrangements with Humana, Inc. and United HealthCare and Medicare Part D prescription drug plans ("PDP") primarily through a distribution arrangement with Coventry Health Care ("Coventry"). | |
• | Washington National, which markets and distributes supplemental health (including specified disease, accident and hospital indemnity insurance products) and life insurance to middle-income consumers at home and at the worksite. These products are marketed through Performance Matters Associates, Inc., a wholly owned subsidiary, and through independent marketing organizations and insurance agencies including worksite marketing. The products being marketed are underwritten by Washington National Insurance Company ("Washington National"). | |
• | Colonial Penn, which markets primarily graded benefit and simplified issue life insurance directly to customers in the senior middle-income market through television advertising, direct mail, the internet and telemarketing. The Colonial Penn segment includes primarily the business of Colonial Penn Life Insurance Company. | |
• | Other CNO Business, which consists of blocks of interest-sensitive life insurance, traditional life insurance, annuities, long-term care insurance and other supplemental health products. These blocks of business are not actively marketed and were primarily issued or acquired by Conseco Life Insurance Company ("Conseco Life") and Washington National. | |
We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). | ||
The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates. | ||
When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals. If our future experience differs from these estimates and assumptions, our financial statements would be materially affected. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||||||
We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as net investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios)). | |||||||||||||||||||||||||||||||||
Equity securities include investments in common stock and non-redeemable preferred stock. We carry these investments at estimated fair value. We record any unrealized gain or loss, net of tax and related adjustments, as a component of shareholders' equity. | |||||||||||||||||||||||||||||||||
Mortgage loans held in our investment portfolio are carried at amortized unpaid balances, net of provisions for estimated losses. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Payment terms specified for mortgage loans may include a prepayment penalty for unscheduled payoff of the investment. Prepayment penalties are recognized as investment income when received. | |||||||||||||||||||||||||||||||||
Policy loans are stated at current unpaid principal balances. | |||||||||||||||||||||||||||||||||
Our trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; and (ii) investments supporting certain insurance liabilities (including investments backing the market strategies of our multibucket annuity products) and certain reinsurance agreements. The change in fair value of these securities is recognized in income from policyholder and reinsurer accounts and other special-purpose portfolios (a component of net investment income). Investment income from trading securities backing certain insurance liabilities and certain reinsurance agreements is substantially offset by the change in insurance policy benefits related to certain products and agreements. The trading account also includes certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option. The change in value of these securities is recognized in realized investment gains (losses). Prior to June 30, 2011, certain of our trading securities were held to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio. See the section of this note entitled "Accounting for Derivatives" for further discussion regarding these embedded derivatives. The change in value of these securities is recognized in realized investment gains (losses). Our trading securities totaled $247.6 million and $266.2 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Other invested assets include: (i) call options purchased in an effort to offset or hedge the effects of certain policyholder benefits related to our fixed index annuity and life insurance products; (ii) Company-owned life insurance ("COLI"); and (iii) certain non-traditional investments. We carry the call options at estimated fair value as further described in the section of this note entitled "Accounting for Derivatives". We carry COLI at its cash surrender value which approximates its net realizable value. Non-traditional investments include investments in certain limited partnerships, which are accounted for using the equity method; promissory notes, which are accounted for using the cost method; and investments in certain hedge funds that are carried at estimated fair value. In applying the equity method of accounting, we consistently use the most recently available financial information provided by the general partner or manager of each of these investments, which is one to three months prior to the end of our reporting period. | |||||||||||||||||||||||||||||||||
We defer any fees received or costs incurred when we originate investments. We amortize fees, costs, discounts and premiums as yield adjustments over the contractual lives of the investments without anticipation of prepayments. We consider anticipated prepayments on mortgage-backed securities in determining estimated future yields on such securities. | |||||||||||||||||||||||||||||||||
When we sell a security (other than trading securities), we report the difference between the sale proceeds and amortized cost (determined based on specific identification) as a realized investment gain or loss. | |||||||||||||||||||||||||||||||||
We regularly evaluate our investments for possible impairment as further described in the note to the consolidated financial statements entitled "Investments". | |||||||||||||||||||||||||||||||||
When a security defaults (including mortgage loans) or securities (other than structured securities) are other-than-temporarily impaired, our policy is to discontinue the accrual of interest and eliminate all previous interest accruals, if we determine that such amounts will not be ultimately realized in full. | |||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||||||||||
Cash and cash equivalents include commercial paper, invested cash and other investments purchased with original maturities of less than three months. We carry them at amortized cost, which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Deferred Acquisition Costs | |||||||||||||||||||||||||||||||||
Deferred acquisition costs represent incremental direct costs related to the successful acquisition of new or renewal insurance contracts. For interest-sensitive life or annuity products, we amortize these costs in relation to the estimated gross profits using the interest rate credited to the underlying policies. For other products, we amortize these costs in relation to future anticipated premium revenue using the projected investment earnings rate. | |||||||||||||||||||||||||||||||||
When we realize a gain or loss on investments backing our interest-sensitive life or annuity products, we adjust the amortization to reflect the change in estimated gross profits from the products due to the gain or loss realized and the effect on future investment yields. We also adjust deferred acquisition costs for the change in amortization that would have been recorded if our fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. We limit the total adjustment related to the impact of unrealized losses to the total of costs capitalized plus interest related to insurance policies issued in a particular year. We include the impact of this adjustment in accumulated other comprehensive income (loss) within shareholders' equity. | |||||||||||||||||||||||||||||||||
We regularly evaluate the recoverability of the unamortized balance of the deferred acquisition costs. We consider estimated future gross profits or future premiums, expected mortality or morbidity, interest earned and credited rates, persistency and expenses in determining whether the balance is recoverable. If we determine a portion of the unamortized balance is not recoverable, it is charged to amortization expense. In certain cases, the unamortized balance of the deferred acquisition costs may not be deficient in the aggregate, but our estimates of future earnings indicate that profits would be recognized in early periods and losses in later periods. In this case, we increase the amortization of the deferred acquisition costs over the period of profits, by an amount necessary to offset losses that are expected to be recognized in the later years. | |||||||||||||||||||||||||||||||||
Refer to the caption "Recently Issued Accounting Standards - Accounting Standard Adopted on a Retrospective Basis" for further information regarding the impact of adoption. | |||||||||||||||||||||||||||||||||
Present Value of Future Profits | |||||||||||||||||||||||||||||||||
The present value of future profits is the value assigned to the right to receive future cash flows from policyholder insurance contracts existing at September 10, 2003 (the "Effective Date", the effective date of the bankruptcy reorganization of Conseco, Inc., an Indiana corporation (our "Predecessor")). The discount rate we used to determine the present value of future profits was 12 percent. The balance of this account is amortized and evaluated for recovery in the same manner as described above for deferred acquisition costs. We also adjust the present value of future profits for the change in amortization that would have been recorded if the fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields, similar to the manner described above for deferred acquisition costs. We limit the total adjustment related to the impact of unrealized losses to the total present value of future profits plus interest. | |||||||||||||||||||||||||||||||||
Assets Held in Separate Accounts | |||||||||||||||||||||||||||||||||
Separate accounts are funds on which investment income and gains or losses accrue directly to certain policyholders. The assets of these accounts are legally segregated. They are not subject to the claims that may arise out of any other business of CNO. We report separate account assets at fair value; the underlying investment risks are assumed by the contractholders. We record the related liabilities at amounts equal to the separate account assets. We record the fees earned for administrative and contractholder services performed for the separate accounts in insurance policy income. | |||||||||||||||||||||||||||||||||
Recognition of Insurance Policy Income and Related Benefits and Expenses on Insurance Contracts | |||||||||||||||||||||||||||||||||
For interest-sensitive life and annuity contracts that do not involve significant mortality or morbidity risk, the amounts collected from policyholders are considered deposits and are not included in revenue. Revenues for these contracts consist of charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders' account balances. Such revenues are recognized when the service or coverage is provided, or when the policy is surrendered. | |||||||||||||||||||||||||||||||||
We establish liabilities for annuity and interest-sensitive life products equal to the accumulated policy account values, which include an accumulation of deposit payments plus credited interest, less withdrawals and the amounts assessed against the policyholder through the end of the period. In addition, policyholder account values for certain interest-sensitive life products are impacted by our assumptions related to changes of certain non-guaranteed elements that we are allowed to make under the terms of the policy, such as cost of insurance charges, expense loads, credited interest rates and policyholder bonuses. Sales inducements provided to the policyholders of these products are recognized as liabilities over the period that the contract must remain in force to qualify for the inducement. The options attributed to the policyholder related to our fixed index annuity products are accounted for as embedded derivatives as described in the section of this note entitled "Accounting for Derivatives". | |||||||||||||||||||||||||||||||||
Premiums from individual life products (other than interest-sensitive life contracts), and health products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. | |||||||||||||||||||||||||||||||||
We establish liabilities for traditional life, accident and health insurance, and life contingent payment annuity products using mortality tables in general use in the United States, which are modified to reflect the Company's actual experience when appropriate. We establish liabilities for accident and health insurance products using morbidity tables based on the Company's actual or expected experience. These reserves are computed at amounts that, with additions from estimated future premiums received and with interest on such reserves at estimated future rates, are expected to be sufficient to meet our obligations under the terms of the policy. Liabilities for future policy benefits are computed on a net-level premium method based upon assumptions as to future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses determined when the policies were issued (or with respect to policies inforce at August 31, 2003, the Company's best estimate of such assumptions on the Effective Date). We make an additional provision to allow for potential adverse deviation for some of our assumptions. Once established, assumptions on these products are generally not changed unless a premium deficiency exists. In that case, a premium deficiency reserve is recognized and the future pattern of reserve changes is modified to reflect the relationship of premiums to benefits based on the current best estimate of future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses, determined without an additional provision for potential adverse deviation. | |||||||||||||||||||||||||||||||||
We establish claim reserves based on our estimate of the loss to be incurred on reported claims plus estimates of incurred but unreported claims based on our past experience. | |||||||||||||||||||||||||||||||||
Accounting for Long-term Care Premium Rate Increases | |||||||||||||||||||||||||||||||||
Many of our long-term care policies have been subject to premium rate increases. In some cases, these premium rate increases were materially consistent with the assumptions we used to value the particular block of business at the Effective Date. With respect to certain premium rate increases, some of our policyholders were provided an option to cease paying their premiums and receive a non-forfeiture option in the form of a paid-up policy with limited benefits. In addition, our policyholders could choose to reduce their coverage amounts and premiums in the same proportion, when permitted by our contracts or as required by regulators. The following describes how we account for these policyholder options: | |||||||||||||||||||||||||||||||||
• | Premium rate increases - If premium rate increases reflect a change in our previous rate increase assumptions, the new assumptions are not reflected prospectively in our reserves. Instead, the additional premium revenue resulting from the rate increase is recognized as earned and original assumptions continue to be used to determine changes to liabilities for insurance products unless a premium deficiency exists. | ||||||||||||||||||||||||||||||||
• | Benefit reductions - A policyholder may choose reduced coverage with a proportionate reduction in premium, when permitted by our contracts. This option does not require additional underwriting. Benefit reductions are treated as a partial lapse of coverage, and the balance of our reserves and deferred insurance acquisition costs is reduced in proportion to the reduced coverage. | ||||||||||||||||||||||||||||||||
• | Non-forfeiture benefits offered in conjunction with a rate increase - In some cases, non-forfeiture benefits are offered to policyholders who wish to lapse their policies at the time of a significant rate increase. In these cases, exercise of this option is treated as an extinguishment of the original contract and issuance of a new contract. The balance of our reserves and deferred insurance acquisition costs are released, and a reserve for the new contract is established. | ||||||||||||||||||||||||||||||||
Some of our policyholders may receive a non-forfeiture benefit if they cease paying their premiums pursuant to their original contract (or pursuant to changes made to their original contract as a result of a litigation settlement made prior to the Effective Date or an order issued by the Florida Office of Insurance Regulation). In these cases, exercise of this option is treated as the exercise of a policy benefit, and the reserve for premium paying benefits is reduced, and the reserve for the non-forfeiture benefit is adjusted to reflect the election of this benefit. | |||||||||||||||||||||||||||||||||
Accounting for Marketing and Reinsurance Agreements with Other Parties | |||||||||||||||||||||||||||||||||
Bankers Life has entered into various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute prescription drug and Medicare Advantage plans. These agreements allow Bankers to offer these products to current and potential future policyholders without investment in management and infrastructure. We receive fee income related to the plans sold through our distribution channels. We account for these distribution agreements as follows: | |||||||||||||||||||||||||||||||||
• | We recognize distribution income based on either: (i) a fixed fee per contract sold; or (ii) a percentage of premiums collected. This fee income is recognized over the calendar year term of the contract. | ||||||||||||||||||||||||||||||||
• | We also pay commissions to our agents who sell the plans. These payments are deferred and amortized over the term of the contract. | ||||||||||||||||||||||||||||||||
Prior to its termination in August 2013, we had a quota-share reinsurance agreement with an insurance company that provided Bankers Life with 50 percent of the net premiums and related policy benefits of certain PDP business sold through Bankers Life's career agency force. We accounted for the quota-share agreement as follows: | |||||||||||||||||||||||||||||||||
• | We recognized premium revenue evenly over the period of the underlying Medicare Part D contracts. | ||||||||||||||||||||||||||||||||
• | We recognized policyholder benefits and assumed commission expense as incurred. | ||||||||||||||||||||||||||||||||
• | We recognized risk-share premium adjustments consistent with Coventry's risk-share agreement with the Centers for Medicare and Medicaid Services. | ||||||||||||||||||||||||||||||||
Reinsurance | |||||||||||||||||||||||||||||||||
In the normal course of business, we seek to limit our loss exposure on any single insured or to certain groups of policies by ceding reinsurance to other insurance enterprises. We currently retain no more than $.8 million of mortality risk on any one policy. We diversify the risk of reinsurance loss by using a number of reinsurers that have strong claims-paying ratings. In each case, the ceding CNO subsidiary is directly liable for claims reinsured in the event the assuming company is unable to pay. | |||||||||||||||||||||||||||||||||
The cost of reinsurance on life and health coverages is recognized over the life of the reinsured policies using assumptions consistent with those used to account for the underlying policy. The cost of reinsurance ceded totaled $212.1 million, $220.0 million and $238.1 million in 2013, 2012 and 2011, respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $196.2 million, $210.2 million and $204.9 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||
From time-to-time, we assume insurance from other companies. Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs described above. Reinsurance premiums assumed totaled $37.4 million, $69.4 million and $80.4 million in 2013, 2012 and 2011, respectively. Reinsurance premiums included amounts assumed pursuant to marketing and quota-share agreements with Coventry of $19.7 million, $49.9 million and $58.1 million in 2013, 2012 and 2011, respectively. As further described above, we received a notice of Coventry's intent to terminate the PDP quota-share reinsurance agreement in August 2013. | |||||||||||||||||||||||||||||||||
In December 2013, two of our insurance subsidiaries with long-term care business in the Other CNO Business segment entered into 100% coinsurance agreements ceding $495 million of long-term care reserves to Beechwood Re Ltd. ("BRe"). Pursuant to the agreements, the insurance subsidiaries will pay an additional premium of $96.9 million to BRe and an amount equal to the related net liabilities. The insurance subsidiaries' ceded reserve credits will be secured by assets in market-value trusts subject to a 7% over-collateralization, investment guidelines and periodic true-up provisions. Future payments into the trusts to maintain collateral requirements are the responsibility of BRe. All required regulatory approvals for the transaction have been received. We evaluate this block separately to determine whether aggregate liabilities are deficient. We recognized a pre-tax loss of $98.4 million to reflect: (i) the known loss (or premium deficiency) on the business, as we will not be recognizing additional income in future periods to recover the unamortized additional premium which will be paid to BRe; and (ii) other transaction costs. | |||||||||||||||||||||||||||||||||
See the section of this note entitled "Accounting for Derivatives" for a discussion of the derivative embedded in the payable related to certain modified coinsurance agreements. | |||||||||||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||||||||||
Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and net operating loss carryforwards ("NOLs"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. | |||||||||||||||||||||||||||||||||
A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred tax assets on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible and before our capital loss carryforwards and NOLs expire. | |||||||||||||||||||||||||||||||||
At December 31, 2013, our valuation allowance for our net deferred tax assets was $294.8 million, as we have determined that it is more likely than not that a portion of our deferred tax assets will not be realized. This determination was made by evaluating each component of the deferred tax assets and assessing the effects of limitations and/or interpretations on the value of such component to be fully recognized in the future. | |||||||||||||||||||||||||||||||||
Investments in Variable Interest Entities | |||||||||||||||||||||||||||||||||
We have concluded that we are the primary beneficiary with respect to certain variable interest entities ("VIEs"), which are consolidated in our financial statements. The following is a description of our significant investments in VIEs: | |||||||||||||||||||||||||||||||||
All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments (including new VIEs which were consolidated in the first quarters of 2013 and 2012). The assets held by the trusts are legally isolated and not available to the Company. The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying investments held by the trusts, not from the assets of the Company. The Company has no further commitments to the VIEs. | |||||||||||||||||||||||||||||||||
The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. Refer to the note to the consolidated financial statements entitled "Investments in Variable Interest Entities" for additional information about VIEs. | |||||||||||||||||||||||||||||||||
Investment Borrowings | |||||||||||||||||||||||||||||||||
Three of the Company's insurance subsidiaries (Conseco Life, Washington National and Bankers Life) are members of the Federal Home Loan Bank ("FHLB"). As members of the FHLB, Conseco Life, Washington National and Bankers Life have the ability to borrow on a collateralized basis from the FHLB. Conseco Life, Washington National and Bankers Life are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. At December 31, 2013, the carrying value of the FHLB common stock was $93.5 million. As of December 31, 2013, collateralized borrowings from the FHLB totaled $1.9 billion and the proceeds were used to purchase fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $2.4 billion at December 31, 2013, which are maintained in a custodial account for the benefit of the FHLB. Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet. Interest expense of $27.9 million, $28.0 million and $25.7 million in 2013, 2012 and 2011, respectively, was recognized related to the borrowings. | |||||||||||||||||||||||||||||||||
The following summarizes the terms of the borrowings (dollars in millions): | |||||||||||||||||||||||||||||||||
Amount | Maturity | Interest rate at | |||||||||||||||||||||||||||||||
borrowed | date | December 31, 2013 | |||||||||||||||||||||||||||||||
$ | 67 | Feb-14 | Fixed rate – 1.830% | ||||||||||||||||||||||||||||||
50 | Sep-15 | Variable rate – 0.538% | |||||||||||||||||||||||||||||||
150 | Oct-15 | Variable rate – 0.517% | |||||||||||||||||||||||||||||||
100 | Nov-15 | Variable rate – 0.318% | |||||||||||||||||||||||||||||||
146 | Nov-15 | Fixed rate – 5.300% | |||||||||||||||||||||||||||||||
100 | Dec-15 | Fixed rate – 4.710% | |||||||||||||||||||||||||||||||
100 | Jun-16 | Variable rate – 0.605% | |||||||||||||||||||||||||||||||
75 | Jun-16 | Variable rate – 0.407% | |||||||||||||||||||||||||||||||
100 | Oct-16 | Variable rate – 0.426% | |||||||||||||||||||||||||||||||
50 | Nov-16 | Variable rate – 0.511% | |||||||||||||||||||||||||||||||
50 | Nov-16 | Variable rate – 0.635% | |||||||||||||||||||||||||||||||
57.7 | Jun-17 | Variable rate – 0.598% | |||||||||||||||||||||||||||||||
100 | Jul-17 | Fixed rate – 3.900% | |||||||||||||||||||||||||||||||
50 | Aug-17 | Variable rate – 0.441% | |||||||||||||||||||||||||||||||
75 | Aug-17 | Variable rate – 0.388% | |||||||||||||||||||||||||||||||
100 | Oct-17 | Variable rate – 0.674% | |||||||||||||||||||||||||||||||
37 | Nov-17 | Fixed rate – 3.750% | |||||||||||||||||||||||||||||||
50 | Nov-17 | Variable rate – 0.747% | |||||||||||||||||||||||||||||||
50 | Jan-18 | Variable rate – 0.596% | |||||||||||||||||||||||||||||||
50 | Jan-18 | Variable rate – 0.579% | |||||||||||||||||||||||||||||||
50 | Feb-18 | Variable rate – 0.548% | |||||||||||||||||||||||||||||||
22 | Feb-18 | Variable rate – 0.567% | |||||||||||||||||||||||||||||||
100 | May-18 | Variable rate – 0.617% | |||||||||||||||||||||||||||||||
50 | Jul-18 | Variable rate – 0.708% | |||||||||||||||||||||||||||||||
50 | Aug-18 | Variable rate – 0.361% | |||||||||||||||||||||||||||||||
21.8 | Jun-20 | Fixed rate – 1.960% | |||||||||||||||||||||||||||||||
27.5 | Mar-23 | Fixed rate – 2.160% | |||||||||||||||||||||||||||||||
20.5 | Jun-25 | Fixed rate – 2.940% | |||||||||||||||||||||||||||||||
$ | 1,899.50 | ||||||||||||||||||||||||||||||||
The variable rate borrowings are pre-payable on each interest reset date without penalty. The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on current market interest rates. At December 31, 2013, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $48.5 million. | |||||||||||||||||||||||||||||||||
As part of our investment strategy, we may enter into repurchase agreements to increase our investment return. Pursuant to such agreements, the Company sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. We had no such borrowings outstanding at December 31, 2013 and 2012. | |||||||||||||||||||||||||||||||||
The primary risks associated with short-term collateralized borrowings are: (i) a substantial decline in the market value of the margined security; and (ii) that a counterparty may be unable to perform under the terms of the contract or be unwilling to extend such financing in future periods especially if the liquidity or value of the margined security has declined. Exposure is limited to any depreciation in value of the related securities. | |||||||||||||||||||||||||||||||||
At December 31, 2013, investment borrowings consisted of: (i) collateralized borrowings from the FHLB of $1.9 billion; and (ii) other borrowings of $.5 million. | |||||||||||||||||||||||||||||||||
At December 31, 2012, investment borrowings consisted of: (i) collateralized borrowings from the FHLB of $1.7 billion; and (ii) other borrowings of $.8 million. | |||||||||||||||||||||||||||||||||
Accounting for Derivatives | |||||||||||||||||||||||||||||||||
Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period. Typically, on each policy anniversary date, a new index period begins. We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums. We typically buy call options (including call spreads) referenced to the applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked. We reflect changes in the estimated fair value of these options in net investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios). Net investment gains (losses) related to fixed index products were $177.5 million, $25.5 million and $(21.2) million in 2013, 2012 and 2011, respectively. These amounts were substantially offset by a corresponding change to insurance policy benefits. The estimated fair value of these options was $156.2 million and $54.4 million at December 31, 2013 and 2012, respectively. We classify these instruments as other invested assets. | |||||||||||||||||||||||||||||||||
The Company accounts for the options attributed to the policyholder for the estimated life of the annuity contract as embedded derivatives. The Company purchases options to hedge liabilities for the next policy period approximately on each policy anniversary date and must estimate the fair value of the forward embedded options related to the policies. These accounting requirements often create volatility in the earnings from these products. We record the changes in the fair values of the embedded derivatives in earnings as a component of insurance policy benefits. The fair value of these derivatives, which are classified as "liabilities for interest-sensitive products", was $903.7 million and $734.0 million at December 31, 2013 and 2012, respectively. Prior to June 30, 2011, we maintained a specific block of investments in our trading securities account (which we carried at estimated fair value with changes in such value recognized as investment income from policyholder and reinsurer accounts and other special-purpose portfolios) to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio. We recognized an increase (decrease) to earnings of $35.4 million, $(2.8) million and $(20.4) million in 2013, 2012 and 2011, respectively, from the volatility caused by the accounting requirements to record embedded options at fair value. | |||||||||||||||||||||||||||||||||
If the counterparties for the call options we hold fail to meet their obligations, we may have to recognize a loss. We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy. At December 31, 2013, substantially all of our counterparties were rated "BBB+" or higher by Standard & Poor's Corporation ("S&P"). | |||||||||||||||||||||||||||||||||
Certain of our reinsurance payable balances contain embedded derivatives. Such derivatives had an estimated fair value of $1.8 million and $5.5 million at December 31, 2013 and 2012, respectively. We record the change in the fair value of these derivatives as a component of investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios). We maintain the investments related to these agreements in our trading securities account, which we carry at estimated fair value with changes in such value recognized as investment income (also classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios). The change in value of these trading securities offsets the change in value of the embedded derivatives. | |||||||||||||||||||||||||||||||||
We purchase certain fixed maturity securities that contain embedded derivatives that are required to be bifurcated from the instrument and held at fair value on the consolidated balance sheet. For certain of these securities, we have elected the fair value option to carry the entire security at fair value with changes in fair value reported in net income for operational ease. Such securities totaled $180.6 million and $196.6 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Multibucket Annuity Product | |||||||||||||||||||||||||||||||||
The Company's multibucket annuity is an annuity product that credits interest based on the experience of a particular market strategy. Policyholders allocate their annuity premium payments to several different market strategies based on different asset classes within the Company's investment portfolio. Interest is credited to this product based on the market return of the given strategy, less management fees, and funds may be moved between different strategies. The Company guarantees a minimum return of premium plus approximately 3 percent per annum over the life of the contract. The investments backing the market strategies of these products are designated by the Company as trading securities. The change in the fair value of these securities is recognized as investment income (classified as income from policyholder and reinsurer accounts and other special-purpose portfolios), which is substantially offset by the change in insurance policy benefits for these products. We hold insurance liabilities of $45.8 million and $47.8 million related to multibucket annuity products as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price. We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, cash and cash equivalents, separate account assets and embedded derivatives. We carry our company-owned life insurance policy, which is backed by a series of mutual funds, at its cash surrender value and our hedge fund investments at their net asset values; in both cases, we believe these values approximate their fair values. In addition, we disclose fair value for certain financial instruments, including mortgage loans and policy loans, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs. | |||||||||||||||||||||||||||||||||
The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value. Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value. | |||||||||||||||||||||||||||||||||
Valuation Hierarchy | |||||||||||||||||||||||||||||||||
There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable. | |||||||||||||||||||||||||||||||||
• | Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets primarily include cash and exchange traded securities. | ||||||||||||||||||||||||||||||||
• | Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data. Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies. These models consider various inputs such as interest rate, credit or issuer spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial assets in this category primarily include: certain public and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund and hedge fund investments; and most short-term investments; and non-exchange-traded derivatives such as call options to hedge liabilities related to our fixed index annuity products. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs. | ||||||||||||||||||||||||||||||||
• | Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions. Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information. Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities. Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions. | ||||||||||||||||||||||||||||||||
At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. Any transfers between levels are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in 2013 and 2012. | |||||||||||||||||||||||||||||||||
The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value. Substantially all of our Level 2 fixed maturity securities and separate account assets were valued from independent pricing services. Third party pricing services normally derive the security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recently reported trades, the third party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate. The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below. | |||||||||||||||||||||||||||||||||
For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes. These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs. Approximately 18 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs. The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs. For these securities, we use internally developed valuations. Key assumptions used to determine fair value for these securities may include risk-free rates, risk premiums, performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market. For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate. The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating and other factors relating to the issuer and the security's maturity. In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity. | |||||||||||||||||||||||||||||||||
As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. The Company's analysis includes: (i) a review of the methodology used by third party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude the prices received from third parties are not reflective of current market conditions. In those instances, we may request additional pricing quotes or apply internally developed valuations. However, the number of instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. | |||||||||||||||||||||||||||||||||
The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes. Such inputs include: benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments. | |||||||||||||||||||||||||||||||||
The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotations; time value and volatility factors underlying options; market interest rates; and non-performance risk. For certain embedded derivatives, we use actuarial assumptions in the determination of fair value. | |||||||||||||||||||||||||||||||||
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2013 is as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | Total | ||||||||||||||||||||||||||||||
for identical assets or liabilities | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | — | $ | 15,313.80 | $ | 359.6 | $ | 15,673.40 | |||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 73.1 | — | 73.1 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 2,204.40 | — | 2,204.40 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 1,419.90 | 42.2 | 1,462.10 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | 47.3 | 246.7 | 294 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,609.00 | — | 1,609.00 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 11.8 | 1.6 | 13.4 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 1,848.90 | — | 1,848.90 | |||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 22,528.20 | 650.1 | 23,178.30 | |||||||||||||||||||||||||||||
Equity securities - corporate securities | 79.6 | 145.2 | 24.5 | 249.3 | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | 45.2 | — | 45.2 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.6 | — | 4.6 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 14.1 | — | 14.1 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 24.3 | — | 24.3 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 125.8 | — | 125.8 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 31.1 | — | 31.1 | |||||||||||||||||||||||||||||
Equity securities | 2.4 | — | — | 2.4 | |||||||||||||||||||||||||||||
Total trading securities | 2.4 | 245.2 | — | 247.6 | |||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 1,046.70 | — | 1,046.70 | |||||||||||||||||||||||||||||
Other invested assets - derivatives | 0.6 | 156.2 | — | 156.8 | |||||||||||||||||||||||||||||
Assets held in separate accounts | — | 10.3 | — | 10.3 | |||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 82.6 | $ | 24,131.80 | $ | 674.6 | $ | 24,889.00 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | — | — | 903.7 | 903.7 | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | — | 1.8 | 1.8 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 905.5 | 905.5 | |||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 905.5 | $ | 905.5 | |||||||||||||||||||||||||
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2012 is as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | Total | ||||||||||||||||||||||||||||||
for identical assets or liabilities | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | — | $ | 16,498.60 | $ | 355.5 | $ | 16,854.10 | |||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 99.5 | — | 99.5 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 2,115.00 | 13.1 | 2,128.10 | |||||||||||||||||||||||||||||
Debt securities issued by foreign governments | — | 0.8 | — | 0.8 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 1,416.90 | 44 | 1,460.90 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | — | 324 | 324 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,471.20 | 6.2 | 1,477.40 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 19.9 | 1.9 | 21.8 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 2,230.60 | 16.9 | 2,247.50 | |||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 23,852.50 | 761.6 | 24,614.10 | |||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 49.7 | 118.8 | 0.1 | 168.6 | |||||||||||||||||||||||||||||
Venture capital investments | — | — | 2.8 | 2.8 | |||||||||||||||||||||||||||||
Total equity securities | 49.7 | 118.8 | 2.9 | 171.4 | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | 46.6 | — | 46.6 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.8 | — | 4.8 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 14 | 0.6 | 14.6 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 50.1 | — | 50.1 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | — | 7.3 | 7.3 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 93.3 | — | 93.3 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 41.2 | 5.8 | 47 | |||||||||||||||||||||||||||||
Equity securities | 0.9 | 1.5 | — | 2.4 | |||||||||||||||||||||||||||||
Total trading securities | 0.9 | 251.6 | 13.7 | 266.2 | |||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 814.3 | — | 814.3 | |||||||||||||||||||||||||||||
Other invested assets - derivatives | — | 54.4 | — | 54.4 | |||||||||||||||||||||||||||||
Assets held in separate accounts | — | 14.9 | — | 14.9 | |||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 50.6 | $ | 25,106.50 | $ | 778.2 | $ | 25,935.30 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | — | — | 734 | 734 | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | — | 5.5 | 5.5 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 739.5 | 739.5 | |||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 739.5 | $ | 739.5 | |||||||||||||||||||||||||
For those financial instruments disclosed at fair value, we use the following methods and assumptions to determine the estimated fair values: | |||||||||||||||||||||||||||||||||
Mortgage loans and policy loans. We discount future expected cash flows for loans included in our investment portfolio based on interest rates currently being offered for similar loans to borrowers with similar credit ratings. We aggregate loans with similar characteristics in our calculations. The fair value of policy loans approximates their carrying value. | |||||||||||||||||||||||||||||||||
Company-owned life insurance is backed by a series of mutual funds and is carried at cash surrender value which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Hedge fund investments are carried at their net asset values which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Cash and cash equivalents include commercial paper, invested cash and other investments purchased with original maturities of less than three months. We carry them at amortized cost, which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Liabilities for policyholder account balances. We discount future expected cash flows based on interest rates currently being offered for similar contracts with similar maturities. | |||||||||||||||||||||||||||||||||
Investment borrowings, notes payable and borrowings related to variable interest entities. For publicly traded debt, we use current fair values. For other notes, we use discounted cash flow analyses based on our current incremental borrowing rates for similar types of borrowing arrangements. | |||||||||||||||||||||||||||||||||
The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets or liabilities | Significant other observable inputs | Significant unobservable inputs | Total estimated fair value | Total carrying amount | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,749.50 | $ | 1,749.50 | $ | 1,729.50 | |||||||||||||||||||||||
Policy loans | — | — | 277 | 277 | 277 | ||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 144.8 | — | 144.8 | 144.8 | ||||||||||||||||||||||||||||
Hedge funds | — | 67.6 | — | 67.6 | 67.6 | ||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||
Unrestricted | 457.8 | 241.2 | — | 699 | 699 | ||||||||||||||||||||||||||||
Held by variable interest entities | 104.3 | — | — | 104.3 | 104.3 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 12,776.40 | 12,776.40 | 12,776.40 | ||||||||||||||||||||||||||||
Investment borrowings | — | 1,948.50 | — | 1,948.50 | 1,900.00 | ||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 993.7 | — | 993.7 | 1,012.30 | ||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 872.5 | — | 872.5 | 856.4 | ||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets or liabilities | Significant other observable inputs | Significant unobservable inputs | Total estimated fair value | Total carrying amount | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,682.10 | $ | 1,682.10 | $ | 1,573.20 | |||||||||||||||||||||||
Policy loans | — | — | 272 | 272 | 272 | ||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 123 | — | 123 | 123 | ||||||||||||||||||||||||||||
Hedge funds | — | 16.1 | — | 16.1 | 16.1 | ||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||
Unrestricted | 432.3 | 150.2 | — | 582.5 | 582.5 | ||||||||||||||||||||||||||||
Held by variable interest entities | 54.2 | — | — | 54.2 | 54.2 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 12,913.10 | 12,913.10 | 12,913.10 | ||||||||||||||||||||||||||||
Investment borrowings | — | 1,702.00 | — | 1,702.00 | 1,650.80 | ||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 752.2 | — | 752.2 | 767 | ||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 1,100.30 | — | 1,100.30 | 1,004.20 | ||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||
(a) | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at December 31, 2013 and 2012. This was because interest rates credited on the vast majority of account balances approximate current rates paid on similar products and because these rates are not generally guaranteed beyond one year. | ||||||||||||||||||||||||||||||||
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | Purchases, sales, issuances and settlements, net (b) | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (a) | Ending balance as of December 31, 2013 | Amount of total gains (losses) for the year ended December 31, 2013 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 355.5 | $ | 34 | $ | (.3 | ) | $ | (9.8 | ) | $ | 13.2 | $ | (33.0 | ) | $ | 359.6 | $ | — | ||||||||||||||
States and political subdivisions | 13.1 | — | — | — | — | (13.1 | ) | — | — | ||||||||||||||||||||||||
Asset-backed securities | 44 | 1.6 | 0.1 | (3.6 | ) | 0.1 | — | 42.2 | — | ||||||||||||||||||||||||
Collateralized debt obligations | 324 | (85.4 | ) | 0.2 | 7.9 | — | — | 246.7 | — | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 6.2 | — | — | — | — | (6.2 | ) | — | — | ||||||||||||||||||||||||
Mortgage pass-through securities | 1.9 | (.3 | ) | — | — | — | — | 1.6 | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | 16.9 | — | — | — | — | (16.9 | ) | — | — | ||||||||||||||||||||||||
Total fixed maturities, available for sale | 761.6 | (50.1 | ) | — | (5.5 | ) | 13.3 | (69.2 | ) | 650.1 | — | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | 24.5 | — | (.1 | ) | — | — | 24.5 | — | ||||||||||||||||||||||||
Venture capital investments | 2.8 | — | (2.5 | ) | (.3 | ) | — | — | — | — | |||||||||||||||||||||||
Total equity securities | 2.9 | 24.5 | (2.5 | ) | (.4 | ) | — | — | 24.5 | — | |||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||
Collateralized debt obligations | 7.3 | (7.7 | ) | 0.6 | (.2 | ) | — | — | — | (.2 | ) | ||||||||||||||||||||||
Collateralized mortgage obligations | 5.8 | — | — | — | — | (5.8 | ) | — | — | ||||||||||||||||||||||||
Total trading securities | 13.7 | (7.7 | ) | 0.6 | (.2 | ) | — | (6.4 | ) | — | (.2 | ) | |||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (734.0 | ) | (219.0 | ) | 49.3 | — | — | — | (903.7 | ) | 49.3 | ||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.5 | ) | 3.7 | — | — | — | — | (1.8 | ) | — | |||||||||||||||||||||||
Total liabilities for insurance products | (739.5 | ) | (215.3 | ) | 49.3 | — | — | — | (905.5 | ) | 49.3 | ||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||
(a) | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service which utilized observable inputs at the end of the period, whereas a broker quote was used as of the beginning of the period. | ||||||||||||||||||||||||||||||||
(b) | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 44 | $ | (10.0 | ) | $ | — | $ | — | $ | 34 | ||||||||||||||||||||||
Asset-backed securities | 22 | (20.4 | ) | — | — | 1.6 | |||||||||||||||||||||||||||
Collateralized debt obligations | 6 | (91.4 | ) | — | — | (85.4 | ) | ||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.3 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||
Total fixed maturities, available for sale | 72 | (122.1 | ) | — | — | (50.1 | ) | ||||||||||||||||||||||||||
Equity securities - corporate securities | 24.5 | — | — | — | 24.5 | ||||||||||||||||||||||||||||
Trading securities - collateralized debt obligations | — | (7.7 | ) | — | — | (7.7 | ) | ||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (105.6 | ) | 1.4 | (156.3 | ) | 41.5 | (219.0 | ) | |||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.7 | — | — | 3.7 | ||||||||||||||||||||||||||||
Total liabilities for insurance products | (105.6 | ) | 5.1 | (156.3 | ) | 41.5 | (215.3 | ) | |||||||||||||||||||||||||
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2011 (a) | Purchases, sales, issuances and settlements, net (c) | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (b) | Ending balance as of December 31, 2012 | Amount of total gains (losses) for the year ended December 31, 2012 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 278.1 | $ | 88.1 | $ | (.2 | ) | $ | 9.9 | $ | 68.6 | $ | (89.0 | ) | $ | 355.5 | $ | — | |||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 1.6 | (1.6 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
States and political subdivisions | 2.1 | (1.8 | ) | — | 0.9 | 11.9 | — | 13.1 | — | ||||||||||||||||||||||||
Asset-backed securities | 79.7 | 15.2 | (.3 | ) | 6.3 | 0.5 | (57.4 | ) | 44 | — | |||||||||||||||||||||||
Collateralized debt obligations | 327.3 | (24.8 | ) | — | 21.5 | — | — | 324 | — | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 17.3 | (2.5 | ) | — | 0.8 | 5.7 | (15.1 | ) | 6.2 | — | |||||||||||||||||||||||
Mortgage pass-through securities | 2.2 | (.3 | ) | — | — | — | — | 1.9 | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | 124.8 | 0.2 | — | (.1 | ) | 5 | (113.0 | ) | 16.9 | — | |||||||||||||||||||||||
Total fixed maturities, available for sale | 833.1 | 72.5 | (.5 | ) | 39.3 | 91.7 | (274.5 | ) | 761.6 | — | |||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 6.4 | (3.2 | ) | (3.8 | ) | 0.7 | — | — | 0.1 | (3.8 | ) | ||||||||||||||||||||||
Venture capital investments | 63.5 | (34.3 | ) | (26.0 | ) | (.4 | ) | — | — | 2.8 | — | ||||||||||||||||||||||
Total equity securities | 69.9 | (37.5 | ) | (29.8 | ) | 0.3 | — | — | 2.9 | (3.8 | ) | ||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
States and political subdivisions | — | — | 0.1 | — | 0.5 | — | 0.6 | 0.1 | |||||||||||||||||||||||||
Collateralized debt obligations | — | 6.9 | 0.4 | — | — | — | 7.3 | 0.4 | |||||||||||||||||||||||||
Commercial mortgage-backed securities | 0.4 | — | — | — | — | (.4 | ) | — | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | — | 4.5 | 1.3 | — | — | — | 5.8 | 1.3 | |||||||||||||||||||||||||
Total trading securities | 0.4 | 11.4 | 1.8 | — | 0.5 | (.4 | ) | 13.7 | 1.8 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (666.3 | ) | (52.5 | ) | (15.2 | ) | — | — | — | (734.0 | ) | (15.2 | ) | ||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (3.5 | ) | (2.0 | ) | — | — | — | — | (5.5 | ) | — | ||||||||||||||||||||||
Total liabilities for insurance products | (669.8 | ) | (54.5 | ) | (15.2 | ) | — | — | — | (739.5 | ) | (15.2 | ) | ||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||
(a) | We revised the hierarchy classification of certain fixed maturities, equity securities, trading securities and other invested assets as we believe the observability of the inputs more closely represent Level 2 valuations. | ||||||||||||||||||||||||||||||||
(b) | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service at the end of the period, whereas a broker quote was used as of the beginning of the period. | ||||||||||||||||||||||||||||||||
(c) | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2012 (dollars in millions): | ||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 110.3 | $ | (22.2 | ) | $ | — | $ | — | $ | 88.1 | ||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | (1.6 | ) | — | — | (1.6 | ) | ||||||||||||||||||||||||||
States and political subdivisions | — | (1.8 | ) | — | — | (1.8 | ) | ||||||||||||||||||||||||||
Asset-backed securities | 19 | (3.8 | ) | — | — | 15.2 | |||||||||||||||||||||||||||
Collateralized debt obligations | 35.4 | (60.2 | ) | — | — | (24.8 | ) | ||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (2.5 | ) | — | — | (2.5 | ) | ||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.3 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||
Collateralized mortgage obligations | 11.2 | (11.0 | ) | — | — | 0.2 | |||||||||||||||||||||||||||
Total fixed maturities, available for sale | 175.9 | (103.4 | ) | — | — | 72.5 | |||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | (3.2 | ) | — | — | (3.2 | ) | ||||||||||||||||||||||||||
Venture capital investments | — | (34.3 | ) | — | — | (34.3 | ) | ||||||||||||||||||||||||||
Total equity securities | — | (37.5 | ) | — | — | (37.5 | ) | ||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Collateralized debt obligations | 6.9 | — | — | — | 6.9 | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 4.5 | — | — | — | 4.5 | ||||||||||||||||||||||||||||
Total trading securities | 11.4 | — | — | — | 11.4 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (103.3 | ) | 59.9 | (48.4 | ) | 39.3 | (52.5 | ) | |||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 0.5 | (2.5 | ) | — | (2.0 | ) | ||||||||||||||||||||||||||
Total liabilities for insurance products | (103.3 | ) | 60.4 | (50.9 | ) | 39.3 | (54.5 | ) | |||||||||||||||||||||||||
At December 31, 2013, 90 percent of our Level 3 fixed maturities, available for sale, were investment grade and 38 percent and 55 percent of our Level 3 fixed maturities, available for sale, consisted of structured securities and corporate securities, respectively. | |||||||||||||||||||||||||||||||||
Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3. | |||||||||||||||||||||||||||||||||
Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and reinsurer accounts and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument. | |||||||||||||||||||||||||||||||||
The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date. | |||||||||||||||||||||||||||||||||
The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||
Fair value at December 31, 2013 | Valuation technique(s) | Unobservable inputs | Range (weighted average) | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Corporate securities (a) | $ | 260.3 | Discounted cash flow analysis | Discount margins | 1.65% - 2.90% (2.36%) | ||||||||||||||||||||||||||||
Asset-backed securities (b) | 35.1 | Discounted cash flow analysis | Discount margins | 2.03% - 4.20% (3.09%) | |||||||||||||||||||||||||||||
Collateralized debt obligations (c) | 240.7 | Discounted cash flow analysis | Recoveries | 64% - 67% (65.8%) | |||||||||||||||||||||||||||||
Constant prepayment rate | 20% | ||||||||||||||||||||||||||||||||
Discount margins | .95% - 2.00% (1.32%) | ||||||||||||||||||||||||||||||||
Annual default rate | 1.14% - 5.57% (3.05%) | ||||||||||||||||||||||||||||||||
Portfolio CCC % | 1.52% - 21.79% (12.57%) | ||||||||||||||||||||||||||||||||
Equity security (d) | 24.5 | Cost approach | Historical cost | Not applicable | |||||||||||||||||||||||||||||
Other assets categorized as Level 3 (e) | 114 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||
Total | 674.6 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Interest sensitive products (f) | 905.5 | Discounted projected embedded derivatives | Projected portfolio yields | 5.35% - 6.63% (5.60%) | |||||||||||||||||||||||||||||
Discount rates | 0.00 - 4.64% (2.47%) | ||||||||||||||||||||||||||||||||
Surrender rates | 2.80% - 54.60% (14.39%) | ||||||||||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||||||||||
(a) | Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(b) | Asset-backed securities - The significant unobservable input used in the fair value measurement of our asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(c) | Collateralized debt obligations - The significant unobservable inputs used in the fair value measurement of our collateralized debt obligations relate to collateral performance, including default rate, recoveries and constant prepayment rate, as well as discount margins of the underlying collateral. Significant increases (decreases) in default rate in isolation would result in a significantly lower (higher) fair value measurement. Generally, a significant increase (decrease) in the constant prepayment rate and recoveries in isolation would result in a significantly higher (lower) fair value measurement. Generally a significant increase (decrease) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the annual default rate is accompanied by a directionally similar change in the assumption used for discount margins and portfolio CCC % and a directionally opposite change in the assumption used for constant prepayment rate and recoveries. A tranche's payment priority and investment cost basis could alter generalized fair value outcomes. | ||||||||||||||||||||||||||||||||
(d) | Equity security - The significant unobservable input used in the fair value measurement of this equity security is historical cost as that is the amount that would be required to replace the security with a comparable security. The amount represents an investment in an entity that is currently in the construction phase of a manufacturing facility. The fair value measurement is sensitive to the construction phase and operational risk of the security. | ||||||||||||||||||||||||||||||||
(e) | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | ||||||||||||||||||||||||||||||||
(f) | Interest sensitive products - The significant unobservable inputs used in the fair value measurement of our interest sensitive products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. | ||||||||||||||||||||||||||||||||
The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
Fair value at December 31, 2012 | Valuation technique(s) | Unobservable inputs | Range (weighted average) | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Corporate securities (a) | $ | 248.3 | Discounted cash flow analysis | Discount margins | 1.90% - 3.25% (2.78%) | ||||||||||||||||||||||||||||
Asset-backed securities (b) | 33.3 | Discounted cash flow analysis | Discount margins | 2.78% - 3.14% (2.99%) | |||||||||||||||||||||||||||||
Collateralized debt obligations (c) | 331.4 | Discounted cash flow analysis | Recoveries | 65% - 66% | |||||||||||||||||||||||||||||
Constant prepayment rate | 20% | ||||||||||||||||||||||||||||||||
Discount margins | .95% - 8.75% (2.02%) | ||||||||||||||||||||||||||||||||
Annual default rate | .95% - 5.54% (3.01%) | ||||||||||||||||||||||||||||||||
Portfolio CCC % | 1.18% - 21.56% (11.99%) | ||||||||||||||||||||||||||||||||
Venture capital investments (d) | 2.8 | Market multiples | EBITDA multiple | 6.8 | |||||||||||||||||||||||||||||
Revenue multiple | 1.5 | ||||||||||||||||||||||||||||||||
Other assets categorized as Level 3 (e) | 162.4 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||
Total | 778.2 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Interest sensitive products (f) | 739.5 | Discounted projected embedded derivatives | Projected portfolio yields | 5.35% - 5.61% (5.55%) | |||||||||||||||||||||||||||||
Discount rates | 0.0 - 3.6% (1.4%) | ||||||||||||||||||||||||||||||||
Surrender rates | 4% - 43% (19%) | ||||||||||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||||||||||
(a) | Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(b) | Asset-backed securities - The significant unobservable input used in the fair value measurement of our asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(c) | Collateralized debt obligations - The significant unobservable inputs used in the fair value measurement of our collateralized debt obligations relate to collateral performance, including default rate, recoveries and constant prepayment rate, as well as discount margins of the underlying collateral. Significant increases (decreases) in default rate in isolation would result in a significantly lower (higher) fair value measurement. Generally, a significant increase (decrease) in the constant prepayment rate and recoveries in isolation would result in a significantly higher (lower) fair value measurement. Generally a significant increase (decrease) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the annual default rate is accompanied by a directionally similar change in the assumption used for discount margins and portfolio CCC % and a directionally opposite change in the assumption used for constant prepayment rate and recoveries. A tranche's payment priority and investment cost basis could alter generalized fair value outcomes. | ||||||||||||||||||||||||||||||||
(d) | Venture capital investments - The significant unobservable inputs used in the fair value measurement of our venture capital investments are the EBITDA multiple and revenue multiple. Generally, a significant increase (decrease) in the EBITDA or revenue multiples in isolation would result in a significantly higher (lower) fair value measurement. | ||||||||||||||||||||||||||||||||
(e) | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | ||||||||||||||||||||||||||||||||
(f) | Interest sensitive products - The significant unobservable inputs used in the fair value measurement of our interest sensitive products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. | ||||||||||||||||||||||||||||||||
Sales Inducements | |||||||||||||||||||||||||||||||||
Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract. Certain of our life insurance products offer persistency bonuses credited to the contract holders balance after the policy has been outstanding for a specified period of time. These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP. Such amounts are deferred and amortized in the same manner as deferred acquisition costs. Sales inducements deferred totaled $5.0 million, $4.4 million and $11.5 million in 2013, 2012 and 2011, respectively. Amounts amortized totaled $22.9 million, $27.1 million and $28.7 million in 2013, 2012 and 2011, respectively. The unamortized balance of deferred sales inducements was $108.6 million and $126.5 million at December 31, 2013 and 2012, respectively. The balance of insurance liabilities for persistency bonus benefits was $28.9 million and $34.6 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Out-of-Period Adjustments | |||||||||||||||||||||||||||||||||
In 2013, we recorded the net effect of out-of-period adjustments which increased our insurance policy benefits by $4.7 million, increased amortization expense by $2.1 million, increased other operating costs and expenses by $1.5 million, decreased tax expense by $.7 million and decreased our net income by $7.6 million (or 3 cents per diluted share). We evaluated these adjustments taking into account both qualitative and quantitative factors and considered the impact of these adjustments in relation to the 2013 period, as well as the materiality to the periods in which they originated. The impact of recognizing these adjustments in prior years was not significant to any individual period. Management believes these adjustments are immaterial to the consolidated financial statements and all previously issued financial statements. | |||||||||||||||||||||||||||||||||
Assets and Liabilities Subject to Offsetting Disclosure Requirements | |||||||||||||||||||||||||||||||||
Call options | |||||||||||||||||||||||||||||||||
As further described in the section of this note entitled "Accounting for Derivatives", we buy call options (including call spreads) referenced to applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked. We limit our exposure to the counterparties failing to meet their obligation with respect to the call options by diversifying among several counterparties believed to be strong and credit worthy. The call options are free-standing derivatives and are recorded at fair value in the Company's consolidated balance sheet. The Company and its subsidiaries are parties to master netting arrangements with its counterparties related to entering into various derivative contracts. However, the offsetting of assets and liabilities is not applicable to the derivative contracts that were in place at December 31, 2013 or 2012. The counterparties do not provide collateral to the Company related to their obligations under the call options. | |||||||||||||||||||||||||||||||||
The following table summarizes information related to call options as of December 31, 2013 and 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
Gross amounts not offset in the balance sheet | |||||||||||||||||||||||||||||||||
Gross amounts of recognized assets | Gross amounts offset in the balance sheet | Net amounts of assets presented in the balance sheet | Financial instruments | Cash collateral received | Net amount | ||||||||||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||||||
Call Options | $ | 156.2 | $ | — | $ | 156.2 | $ | — | $ | — | $ | 156.2 | |||||||||||||||||||||
December 31, 2012: | |||||||||||||||||||||||||||||||||
Call Options | 54.4 | — | 54.4 | — | — | 54.4 | |||||||||||||||||||||||||||
Repurchase agreements | |||||||||||||||||||||||||||||||||
As further described in the section of this note entitled "Investment Borrowings", we may enter into agreements under which we sell securities subject to an obligation to repurchase the same securities. These repurchase agreements are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as investment borrowings in the Company's consolidated balance sheet, while the securities underlying the repurchase agreements remain in the respective investment asset accounts. There is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities. In addition, as the Company does not currently have any outstanding reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements. | |||||||||||||||||||||||||||||||||
The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., fails to make an interest payment to the counterparty). If the counterparty were to default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. There were no repurchase agreements outstanding at December 31, 2013 and 2012. | |||||||||||||||||||||||||||||||||
Recently Issued Accounting Standards | |||||||||||||||||||||||||||||||||
Pending Accounting Standards | |||||||||||||||||||||||||||||||||
In July 2013, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance regarding the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. Such guidance will require an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except under certain circumstances as further described in the guidance. | |||||||||||||||||||||||||||||||||
Such guidance does not require new recurring disclosures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The guidance should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. | |||||||||||||||||||||||||||||||||
Accounting Standard Adopted on a Retrospective Basis | |||||||||||||||||||||||||||||||||
In October 2010, the FASB issued authoritative guidance that modified the definition of the types of costs incurred by insurance entities that could be capitalized in the acquisition of new and renewal contracts. The guidance impacts the timing of GAAP reported financial results, but has no impact on cash flows, statutory financial results or the ultimate profitability of the business. | |||||||||||||||||||||||||||||||||
The guidance specifies that an insurance entity shall only capitalize incremental direct costs related to the successful acquisition of new or renewal insurance contracts. The guidance also states that advertising costs should be included in deferred acquisition costs only if the capitalization criteria in the direct-response advertising guidance is met. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, and was adopted by the Company on January 1, 2012. As permitted by the guidance, we elected to apply the provisions on a retrospective basis. The guidance reduced the balance of deferred acquisition costs, its amortization and the amount of costs capitalized. We are able to defer most commission payments, plus other costs directly related to the production of new business. The change did not impact the balance of the present value of future profits. Therefore, in contrast to the reduction in amortization of deferred acquisition costs, there was no change in the amortization of the present value of future profits. | |||||||||||||||||||||||||||||||||
Adopted Accounting Standards | |||||||||||||||||||||||||||||||||
In December 2011, the FASB issued authoritative guidance regarding disclosures about offsetting assets and liabilities. The guidance requires an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The guidance is effective for annual and interim reporting periods beginning on or after January 1, 2013, with retrospective disclosures required for all comparative periods presented. In January 2013, the FASB issued authoritative guidance that limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements and securities lending transactions to the extent that they are: (i) offset in the financial statements; or (ii) subject to an enforceable master netting arrangement or similar agreement. Such disclosures are included in the section of this note entitled "Assets and Liabilities Subject to Offsetting Disclosure Requirements". | |||||||||||||||||||||||||||||||||
In June 2011, the FASB issued authoritative guidance to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in shareholders' equity. Such guidance requires that all non-owner changes in shareholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income. The guidance was applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this guidance resulted in a change in the presentation of our financial statements but did not have any impact on our financial condition, operating results or cash flows. | |||||||||||||||||||||||||||||||||
In May 2011, the FASB issued authoritative guidance which clarifies or updates requirements for measuring fair value and for disclosing information about fair value measurements. The guidance clarifies: (i) the application of the highest and best use and valuation premise concepts; (ii) measuring the fair value of an instrument classified in a reporting entity's shareholders' equity; and (iii) disclosure of quantitative information about the unobservable inputs used in a fair value measurement that is categorized within Level 3 of the fair value hierarchy. The guidance changes certain requirements for measuring fair value or disclosing information about fair value measurements including: (i) measuring the fair value of financial instruments that are managed within a portfolio; (ii) application of premiums and discounts in a fair value measurement; and (iii) additional disclosures about fair value measurements. Such additional disclosures include a description of the valuation process used for measuring Level 3 instruments and the sensitivity of the Level 3 fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. The guidance was effective prospectively for interim and annual periods beginning after December 15, 2011. Refer to the note to our consolidated financial statements entitled "Fair Value Measurements" for additional disclosures required by this guidance. The adoption of this guidance expanded our disclosures, but did not have a material impact on our financial condition, operating results or cash flows. |
INVESTMENTS
INVESTMENTS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||
INVESTMENTS | ' | ||||||||||||||||||||||||
INVESTMENTS | |||||||||||||||||||||||||
At December 31, 2013, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): | |||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | Other-than-temporary impairments included in accumulated other comprehensive income | |||||||||||||||||||||
cost | unrealized | unrealized | fair | ||||||||||||||||||||||
gains | losses | value | |||||||||||||||||||||||
Investment grade (a): | |||||||||||||||||||||||||
Corporate securities | $ | 13,372.90 | $ | 1,086.20 | $ | (120.9 | ) | $ | 14,338.20 | $ | — | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 71.1 | 2.6 | (.6 | ) | 73.1 | — | |||||||||||||||||||
States and political subdivisions | 2,130.20 | 106.8 | (38.5 | ) | 2,198.50 | — | |||||||||||||||||||
Asset-backed securities | 869.9 | 41.6 | (3.9 | ) | 907.6 | — | |||||||||||||||||||
Collateralized debt obligations | 259.4 | 7.4 | (.1 | ) | 266.7 | — | |||||||||||||||||||
Commercial mortgage-backed securities | 1,517.10 | 97.7 | (5.8 | ) | 1,609.00 | — | |||||||||||||||||||
Mortgage pass-through securities | 12.7 | 0.7 | — | 13.4 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 936.2 | 34.3 | (1.3 | ) | 969.2 | — | |||||||||||||||||||
Total investment grade fixed maturities, available for sale | 19,169.50 | 1,377.30 | (171.1 | ) | 20,375.70 | — | |||||||||||||||||||
Below-investment grade (a): | |||||||||||||||||||||||||
Corporate securities | 1,314.50 | 53.4 | (32.7 | ) | 1,335.20 | — | |||||||||||||||||||
States and political subdivisions | 6.4 | — | (.5 | ) | 5.9 | — | |||||||||||||||||||
Asset-backed securities | 523.5 | 34.3 | (3.3 | ) | 554.5 | — | |||||||||||||||||||
Collateralized debt obligations | 27.6 | 0.1 | (.4 | ) | 27.3 | — | |||||||||||||||||||
Collateralized mortgage obligations | 819.1 | 60.9 | (.3 | ) | 879.7 | (4.3 | ) | ||||||||||||||||||
Total below-investment grade fixed maturities, available for sale | 2,691.10 | 148.7 | (37.2 | ) | 2,802.60 | (4.3 | ) | ||||||||||||||||||
Total fixed maturities, available for sale | $ | 21,860.60 | $ | 1,526.00 | $ | (208.3 | ) | $ | 23,178.30 | $ | (4.3 | ) | |||||||||||||
Equity securities | $ | 237.9 | $ | 16.3 | $ | (4.9 | ) | $ | 249.3 | ||||||||||||||||
_______________ | |||||||||||||||||||||||||
(a) | Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. | ||||||||||||||||||||||||
The NAIC evaluates the fixed maturity investments of insurers for regulatory and capital assessment purposes and assigns securities to one of six credit quality categories called NAIC designations, which are used by insurers when preparing their annual statements based on statutory accounting principles. The NAIC designations are generally similar to the credit quality designations of the NRSROs for marketable fixed maturity securities, except for certain structured securities. However, certain structured securities rated below investment grade by the NRSROs can be assigned NAIC 1 or NAIC 2 designations dependent on the cost basis of the holding relative to estimated recoverable amounts as determined by the NAIC. The following summarizes the NAIC designations and NRSRO equivalent ratings: | |||||||||||||||||||||||||
NAIC Designation | NRSRO Equivalent Rating | ||||||||||||||||||||||||
1 | AAA/AA/A | ||||||||||||||||||||||||
2 | BBB | ||||||||||||||||||||||||
3 | BB | ||||||||||||||||||||||||
4 | B | ||||||||||||||||||||||||
5 | CCC and lower | ||||||||||||||||||||||||
6 | In or near default | ||||||||||||||||||||||||
A summary of our fixed maturity securities, available for sale, by NAIC designations (or for fixed maturity securities held by non-regulated entities, based on NRSRO ratings) as of December 31, 2013 is as follows (dollars in millions): | |||||||||||||||||||||||||
NAIC designation | Amortized cost | Estimated fair value | Percentage of total estimated fair value | ||||||||||||||||||||||
1 | $ | 10,215.30 | $ | 10,926.50 | 47.2 | % | |||||||||||||||||||
2 | 10,265.80 | 10,852.30 | 46.8 | ||||||||||||||||||||||
3 | 1,051.30 | 1,066.10 | 4.6 | ||||||||||||||||||||||
4 | 297.6 | 303.4 | 1.3 | ||||||||||||||||||||||
5 | 30.6 | 29.5 | 0.1 | ||||||||||||||||||||||
6 | — | 0.5 | — | ||||||||||||||||||||||
$ | 21,860.60 | $ | 23,178.30 | 100 | % | ||||||||||||||||||||
At December 31, 2012, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): | |||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | Other-than-temporary impairments included in accumulated other comprehensive income | |||||||||||||||||||||
cost | unrealized | unrealized | fair | ||||||||||||||||||||||
gains | losses | value | |||||||||||||||||||||||
Investment grade: | |||||||||||||||||||||||||
Corporate securities | $ | 13,531.80 | $ | 2,221.40 | $ | (12.1 | ) | $ | 15,741.10 | $ | — | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 93.9 | 5.6 | — | 99.5 | — | ||||||||||||||||||||
States and political subdivisions | 1,840.70 | 277.3 | (4.3 | ) | 2,113.70 | — | |||||||||||||||||||
Debt securities issued by foreign governments | 0.8 | — | — | 0.8 | — | ||||||||||||||||||||
Asset-backed securities | 1,002.90 | 70.9 | (2.8 | ) | 1,071.00 | — | |||||||||||||||||||
Collateralized debt obligations | 311.5 | 7.5 | (1.0 | ) | 318 | — | |||||||||||||||||||
Commercial mortgage-backed securities | 1,325.70 | 152.3 | (.6 | ) | 1,477.40 | — | |||||||||||||||||||
Mortgage pass-through securities | 20.6 | 1.2 | — | 21.8 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 1,157.70 | 107.2 | (.7 | ) | 1,264.20 | (.8 | ) | ||||||||||||||||||
Total investment grade fixed maturities, available for sale | 19,285.60 | 2,843.40 | (21.5 | ) | 22,107.50 | (.8 | ) | ||||||||||||||||||
Below-investment grade: | |||||||||||||||||||||||||
Corporate securities | 1,055.80 | 65.3 | (8.1 | ) | 1,113.00 | — | |||||||||||||||||||
States and political subdivisions | 15.3 | — | (.9 | ) | 14.4 | — | |||||||||||||||||||
Asset-backed securities | 360.9 | 31.4 | (2.4 | ) | 389.9 | — | |||||||||||||||||||
Collateralized debt obligations | 5.5 | 0.5 | — | 6 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 903.7 | 79.6 | — | 983.3 | (5.2 | ) | |||||||||||||||||||
Total below-investment grade fixed maturities, available for sale | 2,341.20 | 176.8 | (11.4 | ) | 2,506.60 | (5.2 | ) | ||||||||||||||||||
Total fixed maturities, available for sale | $ | 21,626.80 | $ | 3,020.20 | $ | (32.9 | ) | $ | 24,614.10 | $ | (6.0 | ) | |||||||||||||
Equity securities | $ | 167.1 | $ | 5.9 | $ | (1.6 | ) | $ | 171.4 | ||||||||||||||||
Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments. These amounts, included in shareholders' equity as of December 31, 2013 and 2012, were as follows (dollars in millions): | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ | 6.5 | $ | 9.8 | |||||||||||||||||||||
Net unrealized gains on all other investments | 1,322.60 | 2,986.50 | |||||||||||||||||||||||
Adjustment to present value of future profits (a) | (47.7 | ) | (193.0 | ) | |||||||||||||||||||||
Adjustment to deferred acquisition costs | (137.0 | ) | (452.9 | ) | |||||||||||||||||||||
Adjustment to insurance liabilities | — | (489.8 | ) | ||||||||||||||||||||||
Unrecognized net loss related to deferred compensation plan | (7.1 | ) | (7.9 | ) | |||||||||||||||||||||
Deferred income tax liabilities | (405.5 | ) | (655.3 | ) | |||||||||||||||||||||
Accumulated other comprehensive income | $ | 731.8 | $ | 1,197.40 | |||||||||||||||||||||
_________ | |||||||||||||||||||||||||
(a) | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at the Effective Date. | ||||||||||||||||||||||||
At December 31, 2013, adjustments to the present value of future profits and deferred tax assets included $(27.8) million and $9.9 million, respectively, for premium deficiencies that would exist on certain long-term health products if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields. | |||||||||||||||||||||||||
At December 31, 2012, adjustments to the present value of future profits, deferred acquisition costs, insurance liabilities and deferred tax assets included $(162.3) million, $(149.9) million, $(489.8) million and $288.7 million, respectively, for premium deficiencies that would exist on certain long-term health products if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields. | |||||||||||||||||||||||||
Below-Investment Grade Securities | |||||||||||||||||||||||||
At December 31, 2013, the amortized cost of the Company's below-investment grade fixed maturity securities was $2,691.1 million, or 12 percent of the Company's fixed maturity portfolio. The estimated fair value of the below-investment grade portfolio was $2,802.6 million, or 104 percent of the amortized cost. | |||||||||||||||||||||||||
Below-investment grade corporate debt securities typically have different characteristics than investment grade corporate debt securities. Based on historical performance, probability of default by the borrower is significantly greater for below-investment grade corporate debt securities and in many cases severity of loss is relatively greater as such securities are generally unsecured and often subordinated to other indebtedness of the issuer. Also, issuers of below-investment grade corporate debt securities frequently have higher levels of debt relative to investment-grade issuers, hence, all other things being equal, are generally more sensitive to adverse economic conditions. The Company attempts to reduce the overall risk related to its investment in below-investment grade securities, as in all investments, through careful credit analysis, strict investment policy guidelines, and diversification by issuer and/or guarantor and by industry. | |||||||||||||||||||||||||
Contractual Maturity | |||||||||||||||||||||||||
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. In addition, structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments. | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
cost | fair | ||||||||||||||||||||||||
value | |||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Due in one year or less | $ | 155.2 | $ | 157.4 | |||||||||||||||||||||
Due after one year through five years | 2,008.50 | 2,188.60 | |||||||||||||||||||||||
Due after five years through ten years | 3,920.60 | 4,219.00 | |||||||||||||||||||||||
Due after ten years | 10,810.80 | 11,385.90 | |||||||||||||||||||||||
Subtotal | 16,895.10 | 17,950.90 | |||||||||||||||||||||||
Structured securities | 4,965.50 | 5,227.40 | |||||||||||||||||||||||
Total fixed maturities, available for sale | $ | 21,860.60 | $ | 23,178.30 | |||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||
Net investment income consisted of the following (dollars in millions): | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Fixed maturities | $ | 1,288.90 | $ | 1,280.90 | $ | 1,233.80 | |||||||||||||||||||
Trading income related to policyholder and reinsurer accounts and other special-purpose portfolios | 80.7 | 62.4 | 14.6 | ||||||||||||||||||||||
Equity securities | 8.4 | 4.4 | 1.7 | ||||||||||||||||||||||
Mortgage loans | 96.3 | 99.8 | 111.7 | ||||||||||||||||||||||
Policy loans | 17.3 | 17.1 | 17.6 | ||||||||||||||||||||||
Options related to fixed index products: | |||||||||||||||||||||||||
Option income | 77.4 | 0.4 | 36.5 | ||||||||||||||||||||||
Change in value of options | 100.1 | 25.1 | (57.7 | ) | |||||||||||||||||||||
Other invested assets | 14.4 | 14.4 | 14.5 | ||||||||||||||||||||||
Cash and cash equivalents | 0.5 | 0.6 | 0.4 | ||||||||||||||||||||||
Gross investment income | 1,684.00 | 1,505.10 | 1,373.10 | ||||||||||||||||||||||
Less investment expenses | 20 | 18.7 | 19 | ||||||||||||||||||||||
Net investment income | $ | 1,664.00 | $ | 1,486.40 | $ | 1,354.10 | |||||||||||||||||||
The estimated fair value of fixed maturity investments and mortgage loans not accruing investment income totaled $.5 million and $.5 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Net Realized Investment Gains (Losses) | |||||||||||||||||||||||||
The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions): | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Fixed maturity securities, available for sale: | |||||||||||||||||||||||||
Realized gains on sale | $ | 57.7 | $ | 115.4 | $ | 183.1 | |||||||||||||||||||
Realized losses on sale | (11.4 | ) | (15.4 | ) | (59.9 | ) | |||||||||||||||||||
Impairments: | |||||||||||||||||||||||||
Total other-than-temporary impairment losses | (7.1 | ) | (1.0 | ) | (19.2 | ) | |||||||||||||||||||
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | 5.3 | ||||||||||||||||||||||
Net impairment losses recognized | (7.1 | ) | (1.0 | ) | (13.9 | ) | |||||||||||||||||||
Net realized investment gains from fixed maturities | 39.2 | 99 | 109.3 | ||||||||||||||||||||||
Equity securities | 4.8 | 0.1 | (.2 | ) | |||||||||||||||||||||
Commercial mortgage loans | (1.1 | ) | (3.7 | ) | (29.3 | ) | |||||||||||||||||||
Impairments of mortgage loans and other investments | (4.5 | ) | (36.8 | ) | (20.7 | ) | |||||||||||||||||||
Other | (5.0 | ) | 22.5 | 2.7 | |||||||||||||||||||||
Net realized investment gains | $ | 33.4 | $ | 81.1 | $ | 61.8 | |||||||||||||||||||
During 2013, we recognized net realized investment gains of $33.4 million, which were comprised of $51.8 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $2.3 billion, the decrease in fair value of certain fixed maturity investments with embedded derivatives of $6.8 million and $11.6 million of writedowns of investments for other than temporary declines in fair value recognized through net income. | |||||||||||||||||||||||||
During 2012, we recognized net realized investment gains of $81.1 million, which were comprised of $98.8 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $2.1 billion, the increase in fair value of certain fixed maturity investments with embedded derivatives of $20.1 million and $37.8 million of writedowns of investments for other than temporary declines in fair value recognized through net income. | |||||||||||||||||||||||||
During 2011, we recognized net realized investment gains of $61.8 million, which were comprised of $96.4 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $5.5 billion and $34.6 million of writedowns of investments for other than temporary declines in fair value recognized through net income ($39.9 million, prior to the $5.3 million of impairment losses recognized through accumulated other comprehensive income). | |||||||||||||||||||||||||
At December 31, 2013, fixed maturity securities in default or considered nonperforming had an aggregate amortized cost and a carrying value of nil and $.5 million, respectively. | |||||||||||||||||||||||||
During 2011, we completed the commutation of an investment made by our Predecessor in a guaranteed investment contract issued by a Bermuda insurance company pursuant to which we received government agency securities as well as equity interests in certain corporate investments with an aggregate fair value of $197.5 million in exchange for our holdings with a book value of $201.5 million (resulting in a net realized loss of $4.0 million). During 2011, we recognized impairment charges of $11.5 million on the underlying invested assets. | |||||||||||||||||||||||||
During 2013, the $11.6 million of other-than-temporary impairments we recorded in earnings included: (i) $5.0 million of losses on a corporate security; (ii) $2.5 million of losses on an equity security; and (iii) $4.1 million of losses primarily related to fixed maturity securities following unforeseen issue-specific events or conditions. | |||||||||||||||||||||||||
During 2013, the $11.4 million of realized losses on sales of $477.5 million of fixed maturity securities, available for sale, included: (i) $2.5 million of losses related to the sales of mortgage-backed securities and asset-backed securities; and (ii) $8.9 million of additional losses primarily related to various corporate securities. Securities are generally sold at a loss following unforeseen issue-specific events or conditions or shifts in perceived risks. These reasons include but are not limited to: (i) changes in the investment environment; (ii) expectation that the market value could deteriorate further; (iii) desire to reduce our exposure to an asset class, an issuer or an industry; (iv) prospective or actual changes in credit quality; or (v) changes in expected cash flows. | |||||||||||||||||||||||||
During 2012, the $37.8 million of other-than-temporary impairments we recorded in earnings included: (i) $5.4 million of losses related to certain commercial mortgage loans; (ii) $29.9 million of losses on equity securities primarily related to investments obtained through the commutation of an investment made by our Predecessor (as further described above); and (iii) $2.5 million of losses on other investments following unforeseen issue-specific events or conditions. | |||||||||||||||||||||||||
During 2012, the $15.4 million of realized losses on sales of $402.5 million of fixed maturity securities, available for sale, included: (i) $5.2 million of losses related to the sales of mortgage-backed securities and asset-backed securities; and (ii) $10.2 million of additional losses primarily related to various corporate securities. | |||||||||||||||||||||||||
During 2011, the $34.6 million of other-than-temporary impairments we recorded in earnings included: (i) $11.5 million on an investment in a guaranteed investment contract as discussed above; (ii) $11.8 million of losses related to certain commercial mortgage loans; (iii) $4.3 million related to investments held by a VIE as a result of our intent to sell such investments; and (iv) $7.0 million of losses on other investments following unforeseen issue-specific events or conditions. | |||||||||||||||||||||||||
During 2011, the $59.9 million of realized losses on sales of $1.0 billion of fixed maturity securities, available for sale, included: (i) $24.1 million of losses related to the sales of mortgage-backed securities and asset-backed securities; (ii) $13.4 million related to sales of securities issued by state and political subdivisions; (iii) $8.9 million related to the partial commutation of a guaranteed investment contract as discussed above; and (iv) $13.5 million of additional losses primarily related to various corporate securities. | |||||||||||||||||||||||||
Our fixed maturity investments are generally purchased in the context of various long-term strategies, including funding insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities. In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities. | |||||||||||||||||||||||||
We regularly evaluate all of our investments with unrealized losses for possible impairment. Our assessment of whether unrealized losses are "other than temporary" requires significant judgment. Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors. | |||||||||||||||||||||||||
Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio. Significant losses could have a material adverse effect on our consolidated financial statements in future periods. | |||||||||||||||||||||||||
Impairment losses on equity securities are recognized in net income. The manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings. If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated. We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income. | |||||||||||||||||||||||||
We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security. | |||||||||||||||||||||||||
For most structured securities, cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including excess spread, subordination and guarantees. For corporate bonds, cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis. We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming. | |||||||||||||||||||||||||
The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment. The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums. As of December 31, 2013, other-than-temporary impairments included in accumulated other comprehensive income of $4.3 million (before taxes and related amortization) related to structured securities. | |||||||||||||||||||||||||
Mortgage loans are impaired when it is probable that we will not collect the contractual principal and interest on the loan. We measure impairment based upon the difference between the carrying value of the loan and the estimated fair value of the collateral securing the loan less cost to sell. | |||||||||||||||||||||||||
The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the years ended December 31, 2013, 2012 and 2011 (dollars in millions): | |||||||||||||||||||||||||
Year ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ | (1.6 | ) | $ | (2.0 | ) | $ | (6.1 | ) | ||||||||||||||||
Add: credit losses on other-than-temporary impairments not previously recognized | — | — | (1.1 | ) | |||||||||||||||||||||
Less: credit losses on securities sold | 0.3 | 0.4 | 5.2 | ||||||||||||||||||||||
Less: credit losses on securities impaired due to intent to sell (a) | — | — | — | ||||||||||||||||||||||
Add: credit losses on previously impaired securities | — | — | — | ||||||||||||||||||||||
Less: increases in cash flows expected on previously impaired securities | — | — | — | ||||||||||||||||||||||
Credit losses on fixed maturity securities, available for sale, end of period | $ | (1.3 | ) | $ | (1.6 | ) | $ | (2.0 | ) | ||||||||||||||||
__________ | |||||||||||||||||||||||||
(a) | Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis. | ||||||||||||||||||||||||
Investments with Unrealized Losses | |||||||||||||||||||||||||
The following table sets forth the amortized cost and estimated fair value of those fixed maturities, available for sale, with unrealized losses at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities frequently include provisions for periodic principal payments and permit periodic unscheduled payments. | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
cost | fair | ||||||||||||||||||||||||
value | |||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Due in one year or less | $ | 18.5 | $ | 18.5 | |||||||||||||||||||||
Due after one year through five years | 69.8 | 68.1 | |||||||||||||||||||||||
Due after five years through ten years | 532.5 | 515.9 | |||||||||||||||||||||||
Due after ten years | 2,725.40 | 2,550.50 | |||||||||||||||||||||||
Subtotal | 3,346.20 | 3,153.00 | |||||||||||||||||||||||
Structured securities | 691.7 | 676.6 | |||||||||||||||||||||||
Total | $ | 4,037.90 | $ | 3,829.60 | |||||||||||||||||||||
There was one investment in our portfolio rated below-investment grade which has been continuously in an unrealized loss position exceeding 20 percent of the cost basis for greater than or equal to six months and less than 12 months at December 31, 2013. Such investment had a cost basis, unrealized loss and estimated fair value of $29.9 million, $9.0 million and $20.9 million, respectively. | |||||||||||||||||||||||||
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||||
Description of securities | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
value | losses | value | losses | value | losses | ||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | $ | 23.8 | $ | (.6 | ) | $ | — | $ | — | $ | 23.8 | $ | (.6 | ) | |||||||||||
States and political subdivisions | 473.6 | (30.3 | ) | 79.2 | (8.7 | ) | 552.8 | (39.0 | ) | ||||||||||||||||
Corporate securities | 2,406.10 | (132.8 | ) | 170.3 | (20.8 | ) | 2,576.40 | (153.6 | ) | ||||||||||||||||
Asset-backed securities | 308.4 | (6.5 | ) | 32.5 | (.7 | ) | 340.9 | (7.2 | ) | ||||||||||||||||
Collateralized debt obligations | 46.7 | (.5 | ) | — | — | 46.7 | (.5 | ) | |||||||||||||||||
Commercial mortgage-backed securities | 161.8 | (5.8 | ) | — | — | 161.8 | (5.8 | ) | |||||||||||||||||
Mortgage pass-through securities | 1.6 | — | 1.6 | — | 3.2 | — | |||||||||||||||||||
Collateralized mortgage obligations | 121.8 | (1.6 | ) | 2.2 | — | 124 | (1.6 | ) | |||||||||||||||||
Total fixed maturities, available for sale | $ | 3,543.80 | $ | (178.1 | ) | $ | 285.8 | $ | (30.2 | ) | $ | 3,829.60 | $ | (208.3 | ) | ||||||||||
Equity securities | $ | 26.8 | $ | (4.9 | ) | $ | — | $ | — | $ | 26.8 | $ | (4.9 | ) | |||||||||||
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||||
Description of securities | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
value | losses | value | losses | value | losses | ||||||||||||||||||||
States and political subdivisions | $ | 48.3 | $ | (1.8 | ) | $ | 68.7 | $ | (3.4 | ) | $ | 117 | $ | (5.2 | ) | ||||||||||
Corporate securities | 338.1 | (11.2 | ) | 174.5 | (9.0 | ) | 512.6 | (20.2 | ) | ||||||||||||||||
Asset-backed securities | 41.7 | (.3 | ) | 111.6 | (4.9 | ) | 153.3 | (5.2 | ) | ||||||||||||||||
Collateralized debt obligations | 19.4 | (.4 | ) | 32.5 | (.6 | ) | 51.9 | (1.0 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 4.9 | (.1 | ) | 6.2 | (.5 | ) | 11.1 | (.6 | ) | ||||||||||||||||
Mortgage pass-through securities | — | — | 1.9 | — | 1.9 | — | |||||||||||||||||||
Collateralized mortgage obligations | 27 | (.4 | ) | 33.8 | (.3 | ) | 60.8 | (.7 | ) | ||||||||||||||||
Total fixed maturities, available for sale | $ | 479.4 | $ | (14.2 | ) | $ | 429.2 | $ | (18.7 | ) | $ | 908.6 | $ | (32.9 | ) | ||||||||||
Equity securities | $ | 17.8 | $ | (1.6 | ) | $ | — | $ | — | $ | 17.8 | $ | (1.6 | ) | |||||||||||
Based on management's current assessment of investments with unrealized losses at December 31, 2013, the Company believes the issuers of the securities will continue to meet their obligations (or with respect to equity-type securities, the investment value will recover to its cost basis). While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments. In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery. | |||||||||||||||||||||||||
Structured Securities | |||||||||||||||||||||||||
At December 31, 2013 fixed maturity investments included structured securities with an estimated fair value of $5.2 billion (or 22.6 percent of all fixed maturity securities). The yield characteristics of structured securities generally differ in some respects from those of traditional corporate fixed-income securities or government securities. For example, interest and principal payments on structured securities may occur more frequently, often monthly. In many instances, we are subject to variability in the amount and timing of principal and interest payments. For example, in many cases, partial prepayments may occur at the option of the issuer and prepayment rates are influenced by a number of factors that cannot be predicted with certainty, including: the relative sensitivity of prepayments on the underlying assets backing the security to changes in interest rates and asset values; the availability of alternative financing; a variety of economic, geographic and other factors; the timing, pace and proceeds of liquidations of defaulted collateral; and various security-specific structural considerations (for example, the repayment priority of a given security in a securitization structure). In addition, the total amount of payments for non-agency structured securities may be affected by changes to cumulative default rates or loss severities of the related collateral. | |||||||||||||||||||||||||
Historically, the rate of prepayments on structured securities has tended to increase when prevailing interest rates have declined significantly in absolute terms and also relative to the interest rates on the underlying collateral. The yields recognized on structured securities purchased at a discount to par will increase (relative to the stated rate) when the underlying collateral prepays faster than expected. The yields recognized on structured securities purchased at a premium will decrease (relative to the stated rate) when the underlying collateral prepays faster than expected. When interest rates decline, the proceeds from prepayments may be reinvested at lower rates than we were earning on the prepaid securities. When interest rates increase, prepayments may decrease below expected levels. When this occurs, the average maturity and duration of structured securities increases, decreasing the yield on structured securities purchased at discounts and increasing the yield on those purchased at a premium because of a decrease in the annual amortization of premium. | |||||||||||||||||||||||||
For structured securities included in fixed maturities, available for sale, that were purchased at a discount or premium, we recognize investment income using an effective yield based on anticipated future prepayments and the estimated final maturity of the securities. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For credit sensitive mortgage-backed and asset-backed securities, and for securities that can be prepaid or settled in a way that we would not recover substantially all of our investment, the effective yield is recalculated on a prospective basis. Under this method, the amortized cost basis in the security is not immediately adjusted and a new yield is applied prospectively. For all other structured and asset-backed securities, the effective yield is recalculated when changes in assumptions are made, and reflected in our income on a retrospective basis. Under this method, the amortized cost basis of the investment in the securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the securities. Such adjustments were not significant in 2013. | |||||||||||||||||||||||||
For purchased credit impaired ("PCI") securities, at acquisition, the difference between the undiscounted expected future cash flows and the recorded investment in the securities represents the initial accretable yield, which is to be accreted into net investment income over the securities’ remaining lives on a level-yield basis. Subsequently, effective yields recognized on PCI securities are recalculated and adjusted prospectively to reflect changes in the contractual benchmark interest rates on variable rate securities and any significant increases in undiscounted expected future cash flows arising due to reasons other than interest rate changes. Significant decreases in expected cash flows arising from credit events would result in impairment if such security's fair value is below amortized cost. | |||||||||||||||||||||||||
The following table sets forth the par value, amortized cost and estimated fair value of structured securities, summarized by interest rates on the underlying collateral, at December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Par | Amortized | Estimated | |||||||||||||||||||||||
value | cost | fair value | |||||||||||||||||||||||
Below 4 percent | $ | 981.3 | $ | 912.5 | $ | 927.8 | |||||||||||||||||||
4 percent – 5 percent | 830.8 | 785 | 804 | ||||||||||||||||||||||
5 percent – 6 percent | 2,532.40 | 2,389.00 | 2,546.60 | ||||||||||||||||||||||
6 percent – 7 percent | 759.2 | 714.7 | 773.5 | ||||||||||||||||||||||
7 percent – 8 percent | 116.7 | 119.1 | 129.5 | ||||||||||||||||||||||
8 percent and above | 43.9 | 45.2 | 46 | ||||||||||||||||||||||
Total structured securities | $ | 5,264.30 | $ | 4,965.50 | $ | 5,227.40 | |||||||||||||||||||
The amortized cost and estimated fair value of structured securities at December 31, 2013, summarized by type of security, were as follows (dollars in millions): | |||||||||||||||||||||||||
Estimated fair value | |||||||||||||||||||||||||
Type | Amortized | Amount | Percent | ||||||||||||||||||||||
cost | of fixed | ||||||||||||||||||||||||
maturities | |||||||||||||||||||||||||
Pass-throughs, sequential and equivalent securities | $ | 1,398.80 | $ | 1,469.90 | 6.3 | % | |||||||||||||||||||
Planned amortization classes, target amortization classes and accretion-directed bonds | 336.9 | 357.5 | 1.6 | ||||||||||||||||||||||
Commercial mortgage-backed securities | 1,517.10 | 1,609.00 | 6.9 | ||||||||||||||||||||||
Asset-backed securities | 1,393.40 | 1,462.10 | 6.3 | ||||||||||||||||||||||
Collateralized debt obligations | 287 | 294 | 1.3 | ||||||||||||||||||||||
Other | 32.3 | 34.9 | 0.2 | ||||||||||||||||||||||
Total structured securities | $ | 4,965.50 | $ | 5,227.40 | 22.6 | % | |||||||||||||||||||
Pass-throughs, sequentials and equivalent securities have unique prepayment variability characteristics. Pass-through securities typically return principal to the holders based on cash payments from the underlying mortgage obligations. Sequential securities return principal to tranche holders in a detailed hierarchy. Planned amortization classes, targeted amortization classes and accretion-directed bonds adhere to fixed schedules of principal payments as long as the underlying mortgage loans experience prepayments within certain estimated ranges. In most circumstances, changes in prepayment rates are first absorbed by support or companion classes insulating the timing of receipt of cash flows from the consequences of both faster prepayments (average life shortening) and slower prepayments (average life extension). | |||||||||||||||||||||||||
Commercial mortgage-backed securities are secured by commercial real estate mortgages, generally income producing properties that are managed for profit. Property types include multi-family dwellings including apartments, retail centers, hotels, restaurants, hospitals, nursing homes, warehouses, and office buildings. While most commercial mortgage-backed securities have call protection features whereby underlying borrowers may not prepay their mortgages for stated periods of time without incurring prepayment penalties, recoveries on defaulted collateral may result in involuntary prepayments. | |||||||||||||||||||||||||
Commercial Mortgage Loans | |||||||||||||||||||||||||
At December 31, 2013, the mortgage loan balance was primarily comprised of commercial mortgage loans. Approximately 12 percent, 8 percent, 6 percent, 5 percent, 5 percent, 5 percent and 5 percent of the mortgage loan balance were on properties located in California, Texas, Minnesota, Georgia, Maryland, Colorado and Illinois, respectively. No other state comprised greater than five percent of the mortgage loan balance. None of the commercial mortgage loan balance was noncurrent at December 31, 2013. Our commercial mortgage loan portfolio is comprised of large commercial mortgage loans. We do not hold groups of smaller-balance homogeneous loans. Our loans have risk characteristics that are individually unique. Accordingly, we measure potential losses on a loan-by-loan basis rather than establishing an allowance for losses on mortgage loans. | |||||||||||||||||||||||||
The following table provides the carrying value and estimated fair value of our outstanding mortgage loans and the underlying collateral as of December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Estimated fair | |||||||||||||||||||||||||
value | |||||||||||||||||||||||||
Loan-to-value ratio (a) | Carrying value | Mortgage loans | Collateral | ||||||||||||||||||||||
Less than 60% | $ | 744.4 | $ | 779.8 | $ | 2,254.50 | |||||||||||||||||||
60% to 70% | 386 | 386.4 | 592.4 | ||||||||||||||||||||||
Greater than 70% to 80% | 420 | 409.5 | 563.8 | ||||||||||||||||||||||
Greater than 80% to 90% | 141.6 | 141.4 | 164.9 | ||||||||||||||||||||||
Greater than 90% | 37.5 | 32.4 | 40.6 | ||||||||||||||||||||||
Total | $ | 1,729.50 | $ | 1,749.50 | $ | 3,616.20 | |||||||||||||||||||
________________ | |||||||||||||||||||||||||
(a) | Loan-to-value ratios are calculated as the ratio of: (i) the carrying value of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral. | ||||||||||||||||||||||||
Other Investment Disclosures | |||||||||||||||||||||||||
Life insurance companies are required to maintain certain investments on deposit with state regulatory authorities. Such assets had aggregate carrying values of $65.6 million and $67.8 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
The changes in unrealized appreciation (depreciation) included in accumulated other comprehensive income are net of reclassification adjustments for after-tax net gains from the sale of investments included in net income of approximately $78 million, $5 million and $38 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||
CNO had no fixed maturity investments that were in excess of 10 percent of shareholders' equity at December 31, 2013 and 2012. |
LIABILITIES_FOR_INSURANCE_PROD
LIABILITIES FOR INSURANCE PRODUCTS | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Liabilities for Insurance Products [Abstract] | ' | |||||||||||||||
LIABILITIES FOR INSURANCE PRODUCTS | ' | |||||||||||||||
LIABILITIES FOR INSURANCE PRODUCTS | ||||||||||||||||
Our future policy benefits are summarized as follows (dollars in millions): | ||||||||||||||||
Withdrawal assumption | Morbidity assumption | Mortality assumption | Interest rate assumption | 2013 | 2012 | |||||||||||
Long-term care | Company experience | Company experience | Company experience | 6% | $ | 4,999.70 | $ | 5,220.60 | ||||||||
Traditional life insurance contracts | Company experience | Company experience | (a) | 5% | 2,517.50 | 2,444.60 | ||||||||||
Accident and health contracts | Company experience | Company experience | Company experience | 5% | 2,466.80 | 2,443.60 | ||||||||||
Interest-sensitive life insurance contracts | Company experience | Company experience | Company experience | 6% | 526.5 | 513.8 | ||||||||||
Annuities and supplemental contracts with life contingencies | Company experience | Company experience | (b) | 4% | 712 | 696.8 | ||||||||||
Total | $ | 11,222.50 | $ | 11,319.40 | ||||||||||||
____________________ | ||||||||||||||||
(a) | Principally, modifications of: (i) the 1965 ‑ 70 and 1975 - 80 Basic Tables; and (ii) the 1941, 1958 and 1980 Commissioners' Standard Ordinary Tables; as well as Company experience. | |||||||||||||||
(b) | Principally, modifications of: (i) the 1971 Individual Annuity Mortality Table; (ii) the 1983 Table "A"; and (iii) the Annuity 2000 Mortality Table; as well as Company experience. | |||||||||||||||
Our policyholder account balances are summarized as follows (dollars in millions): | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Fixed index annuities | $ | 4,093.90 | $ | 3,779.70 | ||||||||||||
Other annuities | 6,013.00 | 6,400.30 | ||||||||||||||
Interest-sensitive life insurance contracts | 2,669.50 | 2,733.10 | ||||||||||||||
Total | $ | 12,776.40 | $ | 12,913.10 | ||||||||||||
The Company establishes reserves for insurance policy benefits based on assumptions as to investment yields, mortality, morbidity, withdrawals, lapses and maintenance expenses. These reserves include amounts for estimated future payment of claims based on actuarial assumptions. The balance is based on the Company's best estimate of the future policyholder benefits to be incurred on this business, given recent and expected future changes in experience. | ||||||||||||||||
Changes in the unpaid claims reserve (included in claims payable) and disabled life reserves related to accident and health insurance (included in the liability for future policy benefits) were as follows (dollars in millions): | ||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||
Balance, beginning of the year | $ | 1,679.30 | $ | 1,637.30 | $ | 1,543.70 | ||||||||||
Incurred claims (net of reinsurance) related to: | ||||||||||||||||
Current year | 1,511.10 | 1,570.10 | 1,545.80 | |||||||||||||
Prior years (a) | (162.3 | ) | (56.4 | ) | (41.7 | ) | ||||||||||
Total incurred | 1,348.80 | 1,513.70 | 1,504.10 | |||||||||||||
Interest on claim reserves | 75.2 | 77.8 | 78.4 | |||||||||||||
Paid claims (net of reinsurance) related to: | ||||||||||||||||
Current year | 870 | 891.3 | 866.5 | |||||||||||||
Prior years | 659.9 | 663.9 | 626.2 | |||||||||||||
Total paid | 1,529.90 | 1,555.20 | 1,492.70 | |||||||||||||
Net change in balance for reinsurance assumed and ceded | 136.7 | 5.7 | 3.8 | |||||||||||||
Balance, end of the year | $ | 1,710.10 | $ | 1,679.30 | $ | 1,637.30 | ||||||||||
___________ | ||||||||||||||||
(a) | The reserves and liabilities we establish are necessarily based on estimates, assumptions and prior years' statistics. Such amounts will fluctuate based upon the estimation procedures used to determine the amount of unpaid losses. It is possible that actual claims will exceed our reserves and have a material adverse effect on our results of operations and financial condition. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
INCOME TAXES | |||||||||||||||||
The components of income tax expense were as follows (dollars in millions): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Current tax expense | $ | 8.2 | $ | 12.5 | $ | 11.9 | |||||||||||
Deferred tax expense | 160.4 | 117.4 | 101.6 | ||||||||||||||
Deferred tax benefit on loss related to reinsurance transaction | (34.4 | ) | — | — | |||||||||||||
Deferred tax benefit related to loss on extinguishment of debt | (5.9 | ) | — | — | |||||||||||||
Valuation allowance applicable to current year income | (19.7 | ) | (60.3 | ) | — | ||||||||||||
Income tax expense calculated based on annual effective tax rate | 108.6 | 69.6 | 113.5 | ||||||||||||||
Income tax expense (benefit) on discrete items: | |||||||||||||||||
Valuation allowance reduction applicable to income in future years and utilization of capital loss carryforwards | (141.2 | ) | (111.2 | ) | (143.0 | ) | |||||||||||
Valuation allowance reduction applicable to the settlement with the IRS regarding the classification of a portion of the cancellation of indebtedness income | (71.8 | ) | — | — | |||||||||||||
Valuation allowance reduction resulting from the completion of certain investment trading strategies resulting in utilization of capital loss carryforwards | (64.7 | ) | — | — | |||||||||||||
Other valuation allowance items | (15.3 | ) | — | — | |||||||||||||
Valuation allowance related to expired capital loss carryforwards | (159.4 | ) | — | — | |||||||||||||
Deferred taxes on expired capital loss carryforwards | 159.4 | — | — | ||||||||||||||
Other items | 11.2 | (23.7 | ) | — | |||||||||||||
Total income tax benefit | $ | (173.2 | ) | $ | (65.3 | ) | $ | (29.5 | ) | ||||||||
A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
U.S. statutory corporate rate | 35 | % | 35 | % | 35 | % | |||||||||||
Valuation allowance | (154.9 | ) | (110.1 | ) | (46.7 | ) | |||||||||||
Expired capital loss carryforwards (which were fully offset by a corresponding reduction in the valuation allowance) | 52.3 | — | — | ||||||||||||||
Non-taxable income and nondeductible benefits, net | 5 | 32.3 | 0.7 | ||||||||||||||
State taxes | 1.9 | 1.4 | 0.9 | ||||||||||||||
Provision for tax issues, tax credits and other | 3.9 | (.5 | ) | 0.5 | |||||||||||||
Effective tax rate | (56.8 | )% | (41.9 | )% | (9.6 | )% | |||||||||||
The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Net federal operating loss carryforwards | $ | 1,240.20 | $ | 1,330.20 | |||||||||||||
Net state operating loss carryforwards | 20 | 16.2 | |||||||||||||||
Tax credits | 43.9 | 39.2 | |||||||||||||||
Capital loss carryforwards | 13.4 | 296.2 | |||||||||||||||
Deductible temporary differences: | |||||||||||||||||
Investments | 74.3 | — | |||||||||||||||
Insurance liabilities | 723.8 | 746.3 | |||||||||||||||
Other | 64.7 | 86 | |||||||||||||||
Gross deferred tax assets | 2,180.30 | 2,514.10 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Investments | — | (24.1 | ) | ||||||||||||||
Present value of future profits and deferred acquisition costs | (306.8 | ) | (325.2 | ) | |||||||||||||
Accumulated other comprehensive income | (405.5 | ) | (655.3 | ) | |||||||||||||
Gross deferred tax liabilities | (712.3 | ) | (1,004.6 | ) | |||||||||||||
Net deferred tax assets before valuation allowance | 1,468.00 | 1,509.50 | |||||||||||||||
Valuation allowance | (294.8 | ) | (766.9 | ) | |||||||||||||
Net deferred tax assets | 1,173.20 | 742.6 | |||||||||||||||
Current income taxes accrued | (26.0 | ) | (25.7 | ) | |||||||||||||
Income tax assets, net | $ | 1,147.20 | $ | 716.9 | |||||||||||||
Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and NOLs. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. | |||||||||||||||||
A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income of the appropriate type during the periods in which our temporary differences become deductible and before our capital loss carryforwards and life and non-life NOLs expire. | |||||||||||||||||
Based on our assessment, it appears more likely than not that $1,173.2 million of our deferred tax assets will be realized through future taxable earnings. Accordingly, we reduced our deferred tax valuation allowance by $472.1 million in 2013. We will continue to assess the need for a valuation allowance in the future. If future results are less than projected, a valuation allowance may be required to reduce the deferred tax asset, which could have a material impact on our results of operations in the period in which it is recorded. | |||||||||||||||||
The principal components of the reduction to our valuation allowance for deferred tax assets are further discussed below. First, our 2013 taxable income exceeded the amount previously reflected in our deferred tax valuation model, resulting in a reduction to the valuation allowance of $19.7 million. In addition, our recent higher levels of operating income resulted in the projection of higher levels of future years taxable income based on evidence we consider to be objective and verifiable. This change is further described in the following paragraph and resulted in a reduction to the valuation allowance for deferred tax assets in 2013 of $114.7 million. We reduced our deferred tax valuation allowance by $26.5 million resulting from the utilization of capital loss carryforwards during 2013. Furthermore, deferred tax assets and the valuation allowance for deferred tax assets were both reduced by $159.4 million due to the expiration of capital loss carryforwards. As further described below, we reached an agreement with the Internal Revenue Service (the "IRS") regarding the classification of cancellation of indebtedness income ("CODI") related to the bankruptcy of our Predecessor which resulted in a $71.8 million reduction to our valuation allowance. In the fourth quarter of 2013, we completed certain investment trading strategies that resulted in the realization, for tax purposes only, of unrealized gains in our investment portfolio of $277 million. Such transactions allowed us to utilize capital loss carryforwards (that would have otherwise expired) of $277 million to offset such tax gains. Accordingly, we reduced our valuation allowance for deferred tax assets by $97.1 million. However, as a result of the higher tax basis for these investments, our future taxable income during the carryforward period will be lower. As a result, we were required to increase our valuation allowance for deferred tax assets by $32.4 million. | |||||||||||||||||
Our deferred tax valuation model reflects projections of future taxable income based on a normalized average annual taxable income for the last three years, plus 3 percent growth for the next five years and level income thereafter. In our new projections, our three year average increased to $360 million, compared to $292 million in our prior projection. We have evaluated each component of the deferred tax asset and assessed the effect of limitations and/or interpretations on the value of each component to be fully recognized in the future. | |||||||||||||||||
Changes in our valuation allowance are summarized as follows (dollars in millions): | |||||||||||||||||
Balance, December 31, 2010 | $ | 1,081.40 | |||||||||||||||
Decrease in 2011 | (143.0 | ) | (a) | ||||||||||||||
Balance, December 31, 2011 | 938.4 | ||||||||||||||||
Decrease in 2012 | (171.5 | ) | (b) | ||||||||||||||
Balance, December 31, 2012 | 766.9 | ||||||||||||||||
Decrease in 2013 | (472.1 | ) | (c) | ||||||||||||||
Balance, December 31, 2013 | $ | 294.8 | |||||||||||||||
___________________ | |||||||||||||||||
(a) | The $143.0 million reduction to the deferred tax valuation allowance during 2011 resulted primarily from our recent higher levels of operating income when projecting future taxable income. | ||||||||||||||||
(b) | The $171.5 million reduction to the deferred tax valuation allowance during 2012 resulted primarily from: (i) higher taxable income in 2012 (including investment gains); and (ii) our recent higher levels of operating income when projecting future taxable income. | ||||||||||||||||
(c) | The $472.1 million reduction to the deferred tax valuation allowance during 2013 resulted from: (i) $19.7 million applicable to higher current year income; (ii) $114.7 million applicable to higher levels of income on projected future taxable income; (iii) $26.5 million related to the utilization of capital loss carryforwards; (iv) $159.4 million related to the expiration of capital loss carryforwards; (v) $71.8 million applicable to the classification of a portion of the CODI; (vi) $64.7 million related to the completion of certain investment trading strategies; and (vii) other reductions totaling $15.3 million. | ||||||||||||||||
Recovery of our deferred tax asset is dependent on achieving the future taxable income used in our deferred tax valuation model and failure to do so would result in an increase in the valuation allowance in a future period. Any future increase in the valuation allowance may result in additional income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future. In addition, the use of the Company's NOLs is dependent, in part, on whether the IRS ultimately agrees with the tax position we have taken in our tax returns with respect to the classification of the loss we recognized as a result of the transfer of the stock of our former subsidiary, Conseco Senior Health Insurance Company ("CSHI") to Senior Health Care Oversight Trust, an independent trust (the "Independent Trust"). | |||||||||||||||||
The Internal Revenue Code (the "Code") limits the extent to which losses realized by a non-life entity (or entities) may offset income from a life insurance company (or companies) to the lesser of: (i) 35 percent of the income of the life insurance company; or (ii) 35 percent of the total loss of the non-life entities (including NOLs of the non-life entities). There is no similar limitation on the extent to which losses realized by a life insurance entity (or entities) may offset income from a non-life entity (or entities). This limitation is the primary reason a valuation allowance for net operating loss carryforwards is required. | |||||||||||||||||
Section 382 of the Code imposes limitations on a corporation's ability to use its NOLs when the company undergoes an ownership change. Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes. Such transactions may include, but are not limited to, additional repurchases under our securities repurchase program, issuances of common stock and acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account. Many of these transactions are beyond our control. If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income. The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (3.50 percent at December 31, 2013), and the annual restriction could effectively eliminate our ability to use a substantial portion of our NOLs to offset future taxable income. We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of December 31, 2013, we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs. | |||||||||||||||||
On January 20, 2009, the Company's Board of Directors adopted a Section 382 Rights Agreement designed to protect shareholder value by preserving the value of our tax assets primarily associated with tax NOLs under Section 382. The Section 382 Rights Agreement was adopted to reduce the likelihood of this occurring by deterring the acquisition of stock that would create "5 percent shareholders" as defined in Section 382. On December 6, 2011, the Company's Board of Directors amended the Section 382 Rights Agreement to, among other things, (i) extend the final expiration date of the Amended Rights Agreement to December 6, 2014, (ii) update the purchase price of the rights described below, (iii) provide for a new series of preferred stock relating to the rights that is substantially identical to the prior series of preferred stock, (iv) provide for a 4.99 percent ownership threshold relating to any Company 382 Securities (as defined below), and amend other provisions to reflect best practices for tax benefit preservation plans, including updates to certain definitions. | |||||||||||||||||
Under the Section 382 Rights Agreement, one right was distributed for each share of our common stock outstanding as of the close of business on January 30, 2009 and for each share issued after that date. Pursuant to the Amended Section 382 Rights Agreement, if any person or group (subject to certain exemptions) becomes an owner of more than 4.99 percent of the Company's outstanding common stock (or any other interest in the Company that would be treated as "stock" under applicable Section 382 regulations) without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the voting power and economic ownership of that person or group. Shareholders who held more than 4.99 percent of the Company's outstanding common stock as of December 6, 2011 will trigger a dilutive event only if they acquire additional shares exceeding one percent of our outstanding shares without prior approval from the Board of Directors. | |||||||||||||||||
The Amended Section 382 Rights Agreement was approved by our shareholders at the Company's 2012 annual meeting and will continue in effect until December 6, 2014, unless earlier terminated or redeemed by the Board of Directors. The Company's Audit and Enterprise Risk Committee will review our NOLs on an annual basis and will recommend amending or terminating the Section 382 Rights Agreement based on its review. | |||||||||||||||||
On May 11, 2010, our shareholders approved an amendment to CNO's certificate of incorporation designed to prevent certain transfers of common stock which could otherwise adversely affect our ability to use our NOLs (the "Original Section 382 Charter Amendment"). Subject to the provisions set forth in the Original Section 382 Charter Amendment, transfers of our common stock would be void and of no effect if the effect of the purported transfer would be to: (i) increase the direct or indirect ownership of our common stock by any person or public group (as such term is defined in the regulations under Section 382) from less than 5% to 5% or more of our common stock; (ii) increase the percentage of our common stock owned directly or indirectly by a person or public group owning or deemed to own 5% or more of our common stock; or (iii) create a new public group. | |||||||||||||||||
On May 8, 2013, our shareholders approved an amendment (the “Extended Section 382 Charter Amendment”) to CNO’s certificate of incorporation to: (i) extend the term of the Original Section 382 Charter Amendment for three years until December 31, 2016, (ii) provide for a 4.99 percent ownership threshold relating to our stock, and (iii) amend certain other provisions of the Original Section 382 Charter Amendment, including updates to certain definitions, for consistency with the Amended Section 382 Rights Agreement. | |||||||||||||||||
As of December 31, 2013, we had $3.5 billion of federal NOLs and $38.2 million of capital loss carryforwards. The following table summarizes the expiration dates of our loss carryforwards assuming the IRS ultimately agrees with the position we have taken with respect to the loss on our investment in CSHI (dollars in millions): | |||||||||||||||||
Year of expiration | Net operating loss carryforwards | Capital loss | Total loss | ||||||||||||||
Life | Non-life | carryforwards | carryforwards | ||||||||||||||
2014 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | |||||||||
2016 | — | — | 1.9 | 1.9 | |||||||||||||
2018 | 314.9 | — | — | 314.9 | |||||||||||||
2021 | 30 | — | — | 30 | |||||||||||||
2022 | 202 | — | — | 202 | |||||||||||||
2023 | 742.6 | 2,199.20 | — | 2,941.80 | |||||||||||||
2025 | — | 118.6 | — | 118.6 | |||||||||||||
2027 | — | 220.6 | — | 220.6 | |||||||||||||
2028 | — | 0.5 | — | 0.5 | |||||||||||||
2029 | — | 272.3 | — | 272.3 | |||||||||||||
2032 | — | 44 | — | 44 | |||||||||||||
Subtotal | 1,289.50 | 2,855.20 | 2.1 | 4,146.80 | |||||||||||||
Less: | |||||||||||||||||
Unrecognized tax benefits | (379.0 | ) | (222.4 | ) | 36.1 | (565.3 | ) | ||||||||||
Total | $ | 910.5 | $ | 2,632.80 | $ | 38.2 | $ | 3,581.50 | |||||||||
We had deferred tax assets related to NOLs for state income taxes of $20.0 million and $16.2 million at December 31, 2013 and 2012, respectively. The related state NOLs are available to offset future state taxable income in certain states through 2025. | |||||||||||||||||
In July 2006, the Joint Committee of Taxation accepted the audit and the settlement which characterized $2.1 billion of the tax losses on our Predecessor's investment in Conseco Finance Corp. as life company losses and the remaining $3.8 billion as non-life losses prior to the application of the CODI attribute reductions described below. | |||||||||||||||||
The Code provides that any income realized as a result of the CODI in bankruptcy must reduce NOLs. We realized $2.5 billion of CODI when we emerged from bankruptcy. Pursuant to the Company's interpretation of the tax law, the CODI reductions were all used to reduce non-life NOLs and this position has been taken in our tax returns. However, the IRS was not in agreement with our position. Due to uncertainties with respect to the position the IRS could take and limitations on our ability to utilize NOLs based on projected life and non-life income, we had consistently considered the $631 million of CODI to be a reduction to life NOLs when determining our valuation allowance. A final closing agreement was received from the IRS in August 2013. Under the terms of the agreement, $315 million of the $631 million of CODI is treated as a reduction to the non-life NOLs resulting in a reduction to our valuation allowance of $71.8 million which was recognized in 2013. | |||||||||||||||||
We recognized an $878 million ordinary loss on our investment in CSHI which was worthless when it was transferred to the Independent Trust in 2008. Of this loss, $742 million has been reported as a life loss and $136 million as a non-life loss. The IRS has disagreed with our ordinary loss treatment and believes that it should be treated as a capital loss, subject to a five year carryover. If the IRS position is ultimately determined to be correct, $473 million would have expired unused in 2013. Due to this uncertainty, we have not recognized a tax benefit of $166 million. However, if this unrecognized tax benefit would have been recognized, we would also have established a valuation allowance of $41 million at December 31, 2013. | |||||||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2013 and 2012 is as follows (dollars in millions): | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Balance at beginning of year | $ | 310.5 | $ | 318.2 | |||||||||||||
Increase based on tax positions taken in prior years | 35.6 | 7.3 | |||||||||||||||
Decrease based on tax positions taken in prior years | (27.0 | ) | (15.0 | ) | |||||||||||||
Increase based on tax positions taken in the current year | 47.6 | — | |||||||||||||||
Decrease in unrecognized tax benefits related to settlements with taxing authorities | (140.0 | ) | — | ||||||||||||||
Balance at end of year | $ | 226.7 | $ | 310.5 | |||||||||||||
As of December 31, 2013 and 2012, $156.0 million and $285.0 million, respectively, of our unrecognized tax benefits, if recognized, would affect the effective tax rate. The remaining balances relate to timing differences which, if recognized, would have no effect on the Company's tax expense. The Company recognizes interest related to unrecognized tax benefits as income tax expense in the consolidated statement of operations. Such amounts were not significant in each of the three years ended December 31, 2013. The liability for accrued interest was $1.8 million and $1.8 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||
Due to the uncertainty in tax law, we were not able to conclude that a tax position for the repurchase premium related to the repurchase of our 7.0% Debentures on September 28, 2012 and March 27, 2013, was more likely than not to be sustained. We engaged outside counsel and received external evidence in July 2013 which supports our position that deductions with respect to a portion of the repurchase premium paid in 2012 and 2013 should be allowed under Section 249 of the Code. We recognized a tax benefit of $14.3 million in 2013, related to the change in facts regarding the deductibility of a portion of the repurchase premium. | |||||||||||||||||
Tax years 2004 and 2008 through 2012 are open to examination by the IRS. The Company's various state income tax returns are generally open for tax years 2010 through 2012 based on the individual state statutes of limitation. Generally, for tax years which generate NOLs, capital losses or tax credit carryforwards, the statute of limitations does not close until the expiration of the statute of limitations for the tax year in which such carryforwards are utilized. | |||||||||||||||||
In accordance with GAAP, we are precluded from recognizing the tax benefits of any tax windfall upon the exercise of a stock option or the vesting of restricted stock unless such deduction resulted in actual cash savings to the Company. Because of the Company's NOLs, no cash savings have occurred. NOL carryforwards of $2.9 million related to deductions for stock options and restricted stock will be reflected in additional paid-in capital if realized. | |||||||||||||||||
The IRS is currently examining our 2004 and 2008 through 2010 tax returns. The tax benefit for 2013 reflects an increase to tax expense of $37.6 million for anticipated adjustments related to the IRS examination (including $3.1 million reducing the aforementioned CODI benefit, $32.3 million related to uncertain tax positions and $2.2 million of net corrections to previously filed returns). |
NOTES_PAYABLE_DIRECT_CORPORATE
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | ' | |||||||
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | ||||||||
The following notes payable were direct corporate obligations of the Company as of December 31, 2013 and 2012 (dollars in millions): | ||||||||
2013 | 2012 | |||||||
Senior Secured Credit Agreement (as defined below) | $ | 581.5 | $ | 644.6 | ||||
6.375% Senior Secured Notes due October 2020 (the "6.375% Notes") | 275 | 275 | ||||||
7.0% Debentures | 3.5 | 93 | ||||||
Unamortized discount on Senior Secured Credit Agreement | (3.6 | ) | (5.0 | ) | ||||
Unamortized discount on 7.0% Debentures | — | (3.4 | ) | |||||
Direct corporate obligations | $ | 856.4 | $ | 1,004.20 | ||||
In the third quarter of 2012, as further discussed below, we completed a comprehensive recapitalization plan. The following table sets forth the sources and uses of cash from the recapitalization transactions (dollars in millions): | ||||||||
Sources: | ||||||||
Senior Secured Credit Agreement | $ | 669.5 | ||||||
Issuance of 6.375% Notes | 275 | |||||||
Total sources | $ | 944.5 | ||||||
Uses: | ||||||||
Cash on hand for general corporate purposes | $ | 13.7 | ||||||
Repurchase of $200 million principal amount of 7.0% Debentures pursuant to Debenture Repurchase Agreement | 355.1 | |||||||
Repayment of Previous Senior Secured Credit Agreement | 223.8 | |||||||
Repayment of $275.0 million principal amount of 9.0% Notes, including redemption premium | 322.7 | |||||||
Debt issuance costs | 23.1 | |||||||
Accrued interest | 6.1 | |||||||
Total uses | $ | 944.5 | ||||||
Senior Secured Credit Agreement | ||||||||
On September 28, 2012, the Company entered into a new senior secured credit agreement, providing for: (i) a $425.0 million six-year term loan facility ($394.0 million remained outstanding at December 31, 2013); (ii) a $250.0 million four-year term loan facility ($187.5 million remained outstanding at December 31, 2013); and (iii) a $50.0 million three-year revolving credit facility, with JPMorgan Chase Bank, N.A., as administrative agent (the "Agent"), and the lenders from time to time party thereto (the "Senior Secured Credit Agreement"). The Senior Secured Credit Agreement is guaranteed by the Subsidiary Guarantors (as defined below) and secured by a first-priority lien (which ranks pari passu with the liens securing the 6.375% Notes) on substantially all of the Company's and the Subsidiary Guarantors' assets. As of December 31, 2013, no amounts have been borrowed under the revolving credit facility. The net proceeds from the Senior Secured Credit Agreement, together with the net proceeds from the 6.375% Notes, were used to repay other outstanding indebtedness, as further described below, and for general corporate purposes. | ||||||||
The revolving credit facility includes an uncommitted subfacility for swingline loans of up to $5.0 million, and up to $5.0 million of the revolving credit facility is available for the issuance of letters of credit. The six-year term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 1% and the four-year term loan facility amortizes in quarterly installments resulting in an annual amortization of 20% during the first and second years and 30% during the third and fourth years. Subject to certain conditions, the Company may incur additional incremental loans under the Senior Secured Credit Agreement in an amount of up to $250.0 million. | ||||||||
In May 2013, we amended our Senior Secured Credit Agreement. Pursuant to the amended terms, the applicable interest rates were decreased. The new interest rates with respect to loans under: (i) the six-year term loan facility are, at the Company's option, equal to a eurodollar rate, plus 2.75% per annum, or a base rate, plus 1.75% per annum, subject to a eurodollar rate "floor" of 1.00% and a base rate "floor" of 2.25% (previously a eurodollar rate, plus 3.75% per annum, or a base rate, plus 2.75% per annum, subject to a eurodollar rate "floor" of 1.25% and a base rate "floor" of 2.25%); (ii) the four-year term loan facility are, at the Company's option, equal to a eurodollar rate, plus 2.25% per annum, or a base rate, plus 1.25% per annum, subject to a eurodollar rate "floor" of .75% and a base rate "floor" of 2.00% (previously a eurodollar rate, plus 3.25% per annum, or a base rate, plus 2.25% per annum, subject to a eurodollar rate "floor" of 1.00% and a base rate "floor" of 2.00%); and (iii) the revolving credit facility will be, at the Company's option, equal to a eurodollar rate, plus 3.00% per annum, or a base rate, plus 2.00% per annum, in each case, with respect to revolving credit facility borrowings only, subject to certain step-downs based on the debt to total capitalization ratio of the Company (previously a eurodollar rate, plus 3.50% per annum, or a base rate, plus 2.50% per annum, subject to certain step-downs based on the debt to total capitalization ratio of the Company). At December 31, 2013, the interest rates on the six-year term loan facility and the four-year term loan facility were 3.75% and 3.00%, respectively. | ||||||||
Other changes made in May 2013 to the Senior Secured Credit Agreement included modifications of mandatory prepayments resulting from certain restricted payments made (including any common stock dividends and share repurchases) as defined in the Senior Secured Credit Agreement. Pursuant to the amended terms, the amount of the mandatory prepayment is: (a) 100% of the amount of certain restricted payments provided that if, as of the end of the fiscal quarter immediately preceding such restricted payment, the debt to total capitalization ratio is: (x) equal to or less than 25.0% but greater than 20.0%, the prepayment requirement shall be reduced to 33.33% (previously less than or equal to 22.5% but greater than 17.5%); or (y) equal to or less than 20.0%, the prepayment requirement shall not apply (previously equal to or less than 17.5%). | ||||||||
In the first six months of 2013, we made mandatory prepayments of $20.4 million in an amount equal to 33.33% of our share repurchases and common stock dividend payments, as required under the terms of our Senior Secured Credit Agreement. No mandatory prepayments were required in the second half of 2013 as our debt to total capitalization ratio, as defined in the Senior Secured Credit Agreement, was below 20.0 percent. We also made additional payments of $42.7 million in 2013 to cover the remaining portion of the scheduled quarterly principal payments due under the Senior Secured Credit Agreement. | ||||||||
Mandatory prepayments of the Senior Secured Credit Agreement will be required, subject to certain exceptions, in an amount equal to: (i) 100% of the net cash proceeds from certain asset sales or casualty events; (ii) 100% of the net cash proceeds received by the Company or any of its restricted subsidiaries from certain debt issuances; and (iii) 100% of the amount of certain restricted payments made (including any common stock dividends and share repurchases) as defined in the Senior Secured Credit Agreement provided that if, as of the end of the fiscal quarter immediately preceding such restricted payment, the debt to total capitalization ratio is: (x) equal to or less than 25.0%, but greater than 20.0%, the prepayment requirement shall be reduced to 33.33%; or (y) equal to or less than 20.0%, the prepayment requirement shall not apply. | ||||||||
Notwithstanding the foregoing, no mandatory prepayments pursuant to item (i) in the preceding paragraph shall be required if: (x) the debt to total capitalization ratio is equal or less than 20% and (y) either (A) the financial strength rating of certain of the Company's insurance subsidiaries is equal or better than A- (stable) from A.M. Best Company or (B) the Senior Secured Credit Agreement is rated equal or better than BBB- (stable) from S&P and Baa3 (stable) by Moody's. | ||||||||
In 2012, as required under the terms of the Senior Secured Credit Agreement, we made mandatory prepayments of $28.4 million due to repurchases of our common stock and payment of a common stock dividend. We also made an additional payment of $2.0 million to cover the remaining portion of the scheduled quarterly principal payments. | ||||||||
The Senior Secured Credit Agreement contains covenants that limit the Company's ability to take certain actions and perform certain activities, including (each subject to exceptions as set forth in the Senior Secured Credit Agreement): | ||||||||
• | limitations on debt (including, without limitation, guarantees and other contingent obligations); | |||||||
• | limitations on issuances of disqualified capital stock; | |||||||
• | limitations on liens and further negative pledges; | |||||||
• | limitations on sales, transfers and other dispositions of assets; | |||||||
• | limitations on transactions with affiliates; | |||||||
• | limitations on changes in the nature of the Company's business; | |||||||
• | limitations on mergers, consolidations and acquisitions; | |||||||
• | limitations on dividends and other distributions, stock repurchases and redemptions and other restricted payments; | |||||||
• | limitations on investments and acquisitions; | |||||||
• | limitations on prepayment of certain debt; | |||||||
• | limitations on modifications or waivers of certain debt documents and charter documents; | |||||||
• | investment portfolio requirements for insurance subsidiaries; | |||||||
• | limitations on restrictions affecting subsidiaries; | |||||||
• | limitations on holding company activities; and | |||||||
• | limitations on changes in accounting policies. | |||||||
The Senior Secured Credit Agreement requires the Company to maintain (each as calculated in accordance with the Senior Secured Credit Agreement): (i) a debt to total capitalization ratio of not more than 27.5 percent (such ratio was 17.0 percent at December 31, 2013); (ii) an interest coverage ratio of not less than 2.50 to 1.00 for each rolling four quarters (or, if less, the number of full fiscal quarters commencing after the effective date of the Senior Secured Credit Agreement) (such ratio was 8.53 to 1.00 for the four quarters ended December 31, 2013); (iii) an aggregate ratio of total adjusted capital to company action level risk-based capital for the Company's insurance subsidiaries of not less than 250 percent (such ratio was 410 percent at December 31, 2013); and (iv) a combined statutory capital and surplus for the Company's insurance subsidiaries of at least $1,300.0 million (combined statutory capital and surplus at December 31, 2013, was $1,945.8 million). | ||||||||
The Senior Secured Credit Agreement provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, incorrectness of any representation or warranty in any material respect, breach of covenants in the Senior Secured Credit Agreement or other loan documents, cross default to certain other indebtedness, certain events of bankruptcy and insolvency, certain ERISA events, a failure to pay certain judgments, certain material regulatory events, the occurrence of a change of control, and the invalidity of any material provision of any loan document or material lien or guarantee granted under the loan documents. If an event of default under the Senior Secured Credit Agreement occurs and is continuing, the Agent may accelerate the amounts and terminate all commitments outstanding under the Senior Secured Credit Agreement and may exercise remedies in respect of the collateral. | ||||||||
In connection with the execution of the Senior Secured Credit Agreement, the Company and the Subsidiary Guarantors entered into a guarantee and security agreement, dated as of September 28, 2012 (the "Guarantee and Security Agreement"), by and among the Company, the Subsidiary Guarantors and the Agent, pursuant to which the Subsidiary Guarantors guaranteed all of the obligations of the Company under the Senior Secured Credit Agreement and the Company and the Subsidiary Guarantors pledged substantially all of their assets to secure the Senior Secured Credit Agreement, subject to certain exceptions as set forth in the Guarantee and Security Agreement. | ||||||||
6.375% Notes | ||||||||
On September 28, 2012, we issued $275.0 million in aggregate principal amount of 6.375% Notes pursuant to an Indenture, dated as of September 28, 2012 (the "6.375% Indenture"), among the Company, the subsidiary guarantors party thereto (the "Subsidiary Guarantors") and Wilmington Trust, National Association, as trustee (the "Trustee") and as collateral agent (the "Collateral Agent"). The net proceeds from the issuance of the 6.375% Notes, together with the net proceeds from the Senior Secured Credit Agreement, were used to repay other outstanding indebtedness and for general corporate purposes. The 6.375% Notes mature on October 1, 2020. Interest on the 6.375% Notes accrues at a rate of 6.375% per annum and is payable semiannually in arrears on April 1 and October 1 of each year, commencing on April 1, 2013. The 6.375% Notes and the guarantees thereof (the "Guarantees") are senior secured obligations of the Company and the Subsidiary Guarantors and rank equally in right of payment with all of the Company's and the Subsidiary Guarantors' existing and future senior obligations, and senior to all of the Company's and the Subsidiary Guarantors' future subordinated indebtedness. The 6.375% Notes are secured by a first-priority lien on substantially all of the assets of the Company and the Subsidiary Guarantors, subject to certain exceptions. The 6.375% Notes and the Guarantees are pari passu with respect to security and in right of payment with all of the Company's and the Subsidiary Guarantors' existing and future secured indebtedness under the Senior Secured Credit Agreement. The 6.375% Notes are structurally subordinated to all of the liabilities and preferred stock of each of the Company's insurance subsidiaries, which are not guarantors of the 6.375% Notes. | ||||||||
The Company may redeem all or part of the 6.375% Notes beginning on October 1, 2015, at the redemption prices set forth in the 6.375% Indenture. The Company may also redeem all or part of the 6.375% Notes at any time and from time to time prior to October 1, 2015, at a price equal to 100% of the aggregate principal amount of the 6.375% Notes to be redeemed, plus a "make-whole" premium and accrued and unpaid interest to, but not including, the redemption date. In addition, prior to October 1, 2015, the Company may redeem up to 35% of the aggregate principal amount of the 6.375% Notes with the net cash proceeds of certain equity offerings at a price equal to 106.375% of the aggregate principal amount of the 6.375% Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date. | ||||||||
Upon the occurrence of a Change of Control (as defined in the 6.375% Indenture), each holder of the 6.375% Notes may require the Company to repurchase all or a portion of the 6.375% Notes in cash at a price equal to 101% of the aggregate principal amount of the 6.375% Notes to be repurchased, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. | ||||||||
The 6.375% Indenture contains covenants that, among other things, limit (subject to certain exceptions) the Company's ability and the ability of the Company's Restricted Subsidiaries (as defined in the 6.375% Indenture) to: | ||||||||
• | incur or guarantee additional indebtedness or issue preferred stock; | |||||||
• | pay dividends or make other distributions to shareholders; | |||||||
• | purchase or redeem capital stock or subordinated indebtedness; | |||||||
• | make investments; | |||||||
• | create liens; | |||||||
• | incur restrictions on the Company's ability and the ability of its Restricted Subsidiaries to pay dividends or make other payments to the Company; | |||||||
• | sell assets, including capital stock of the Company's subsidiaries; | |||||||
• | consolidate or merge with or into other companies or transfer all or substantially all of the Company's assets; and | |||||||
• | engage in transactions with affiliates. | |||||||
The 6.375% Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the 6.375% Indenture, failure to pay at maturity or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% in principal amount of the then outstanding 6.375% Notes may declare the principal of and accrued but unpaid interest, including any additional interest, on all of the 6.375% Notes to be due and payable. | ||||||||
Under the 6.375% Indenture, the Company can make Restricted Payments (as such term is defined in the 6.375% Indenture) up to a calculated limit, provided that the Company's pro forma risk-based capital ratio exceeds 225% after giving effect to the Restricted Payment and certain other conditions are met. Restricted Payments include, among other items, repurchases of common stock and cash dividends on common stock (to the extent such dividends exceed $30.0 million in the aggregate in any calendar year). | ||||||||
The limit of Restricted Payments permitted under the 6.375% Indenture is the sum of (x) 50% of the Company's "Net Excess Cash Flow" (as defined in the 6.375% Indenture) for the period (taken as one accounting period) from July 1, 2012 to the end of the Company's most recently ended fiscal quarter for which financial statements are available at the time of such Restricted Payment, (y) $175.0 million and (z) certain other amounts specified in the 6.375% Indenture. Based on the provisions set forth in the 6.375% Indenture and the Company's Net Excess Cash Flow for the period from July 1, 2012 through December 31, 2013, the Company could have made additional Restricted Payments under this 6.375% Indenture covenant of approximately $242 million as of December 31, 2013. This limitation on Restricted Payments does not apply if the Debt to Total Capitalization Ratio (as defined in the 6.375% Indenture) as of the last day of the Company's most recently ended fiscal quarter for which financial statements are available that immediately precedes the date of any Restricted Payment, calculated immediately after giving effect to such Restricted Payment and any related transactions on a pro forma basis, is equal to or less than 17.5%. | ||||||||
In connection with the issuance of the 6.375% Notes and execution of the 6.375% Indenture, the Company and the Subsidiary Guarantors entered into a security agreement, dated as of September 28, 2012 (the "Security Agreement"), by and among the Company, the Subsidiary Guarantors and the Collateral Agent, pursuant to which the Company and the Subsidiary Guarantors pledged substantially all of their assets to secure their obligations under the 6.375% Notes and the 6.375% Indenture, subject to certain exceptions as set forth in the Security Agreement. | ||||||||
Pari Passu Intercreditor Agreement | ||||||||
In connection with the issuance of the 6.375% Notes and entry into the Senior Secured Credit Agreement, the Agent and the Collateral Agent, as authorized representative with respect to the 6.375% Notes, entered into a Pari Passu Intercreditor Agreement, dated as of September 28, 2012 (the "Intercreditor Agreement"), which sets forth agreements with respect to the first-priority liens granted by the Company and the Subsidiary Guarantors pursuant to the 6.375% Indenture and the Senior Secured Credit Agreement. | ||||||||
Under the Intercreditor Agreement, any actions that may be taken with respect to the collateral that secures the 6.375% Notes and the Senior Secured Credit Agreement, including the ability to cause the commencement of enforcement proceedings against such collateral, to control such proceedings and to approve amendments to releases of such collateral from the lien of, and waive past defaults under, such documents relating to such collateral, will be at the direction of the authorized representative of the lenders under the Senior Secured Credit Agreement until the earliest of: (i) the Company's obligations under the Senior Secured Credit Agreement (or refinancings thereof) are discharged; (ii) the earlier of (x) the date on which the outstanding principal amount of loans and commitments under the Senior Secured Credit Agreement is less than $25.0 million and (y) the date on which the outstanding principal amount of another tranche of first-priority indebtedness exceeds the principal amount of loans and commitments under the Senior Secured Credit Agreement; and (iii) 180 days after the occurrence of both an event of default under the 6.375% Indenture and the authorized representative of the holders of the New Notes making certain representations as described in the Intercreditor Agreement, unless the authorized representative of the lenders under the Senior Secured Credit Agreement has commenced and is diligently pursuing enforcement action with respect to the collateral or the grantor of the security interest in that collateral (whether the Company or the applicable Subsidiary Guarantor) is then a debtor under or with respect to (or otherwise subject to) any insolvency or liquidation proceeding. | ||||||||
9.0% Notes | ||||||||
On December 21, 2010, we issued $275.0 million aggregate principal amount of 9.0% Senior Secured Notes due January 2018 (the "9.0% Notes"). The net proceeds of $267.0 million were used to repay certain indebtedness. The Company could redeem all or part of the 9.0% Notes at any time and from time to time prior to January 15, 2014, at a price equal to 100% of the aggregate principal amount of the 9.0% Notes to be redeemed plus a "make-whole" premium and accrued and unpaid interest. | ||||||||
On September 28, 2012, the Company completed the cash tender offer for $273.8 million aggregate principal amount of the 9.0% Notes and received consents from such holders to proposed amendments to the indenture governing the 9.0% Notes (the "9.0% Indenture"). In addition, on September 28, 2012 (the "Initial Payment Date"), the Company, the Subsidiary Guarantors and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as trustee, executed a first supplemental indenture to the 9.0% Indenture (the "Supplemental Indenture") that eliminated substantially all of the restrictive covenants contained in the 9.0% Indenture and certain events of default and related provisions. The Supplemental Indenture became effective upon execution, and the amendments to the 9.0% Indenture became operative on the Initial Payment Date upon acceptance of and payment for the tendered 9.0% Notes by the Company. | ||||||||
On the Initial Payment Date, the Company paid an aggregate of $326.3 million (using a portion of the net proceeds from its offering of the 6.375% Notes, together with borrowings under the Senior Secured Credit Agreement) in order to purchase the 9.0% Notes tendered prior to the Initial Payment Date (representing, in the aggregate, tender offer consideration of approximately $313.1 million, consent payments of approximately $8.2 million and accrued and unpaid interest to, but not including, the Initial Payment Date of approximately $5.0 million). The remaining $1.2 million of 9.0% Notes were redeemed on October 29, 2012. | ||||||||
7.0% Debentures | ||||||||
From November 2009 through May 2010, we issued $293.0 million aggregate principal amount of our 7.0% Senior Debentures due 2016 (the "7.0% Debentures"). The Company used the net proceeds from the issuance of the 7.0% Debentures to retire outstanding indebtedness. | ||||||||
The 7.0% Debentures rank equally in right of payment with all of the Company's unsecured and unsubordinated obligations. The 7.0% Debentures are governed by an Indenture dated as of October 16, 2009 (the "7.0% Indenture") between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee ("Mellon"). The 7.0% Debentures bear interest at a rate of 7.0% per annum, payable semi-annually on June 30 and December 30 of each year, commencing on the interest payment date immediately succeeding the issuance date of such series. The 7.0% Debentures will mature on December 30, 2016. The 7.0% Debentures may not be redeemed at the Company's election prior to the stated maturity date and the holders may not require the Company to repurchase the 7.0% Debentures at any time. The 7.0% Debentures were not convertible prior to June 30, 2013, except under limited circumstances. Commencing on June 30, 2013, the 7.0% Debentures were convertible into shares of our common stock at the option of the holder at any time, subject to certain exceptions and subject to our right to terminate such conversion rights under certain circumstances relating to the sale price of our common stock. As further described below, we elected to terminate the conversion rights in July 2013. | ||||||||
The 7.0% Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the 7.0% Indenture, failure to pay at maturity or acceleration of other indebtedness and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, Mellon or holders of at least 50% in principal amount of the then outstanding 7.0% Debentures may declare the principal of, and accrued but unpaid interest on all of the 7.0% Debentures to be immediately due and payable. The 7.0% Indenture provides that on and after the date of the 7.0% Indenture, the Company may not: (i) consolidate with or merge into any other person or sell, convey, lease or transfer the Company's consolidated properties and assets substantially as an entirety to any other person in any one transaction or series of related transactions; or (ii) permit any person to consolidate with or merge into the Company, unless certain requirements set forth in the 7.0% Indenture are satisfied. | ||||||||
On September 4, 2012, the Company entered into a Debenture Repurchase Agreement (the "Debenture Repurchase Agreement") with Paulson Credit Opportunities Master Ltd. and Paulson Recovery Master Fund Ltd. (collectively, the "Paulson Holders"), funds managed by Paulson & Co. Inc., ("Paulson") that held $200.0 million in aggregate principal amount of the Company's 7.0% Debentures. Pursuant to the Debenture Repurchase Agreement, the Company purchased from each of the Paulson Holders the 7.0% Debentures held by such Paulson Holders, for a cash purchase price of $355.1 million that provided for a 2.8% discount to the estimated fair market value of the 7.0% Debentures as defined in the Debenture Repurchase Agreement. | ||||||||
On March 28, 2013, the Company completed the cash tender offer (the "Offer") for $59.3 million aggregate principal amount of its 7.0% Debentures for an aggregate purchase price of $124.8 million. The Offer was conducted as part of our previously announced securities repurchase program. Pursuant to the terms of the Offer, holders of the 7.0% Debentures who tendered their 7.0% Debentures prior to the expiration date, received, for each $1,000 principal amount of such 7.0% Debentures, a cash purchase price (the "Purchase Price") equal to the sum of: (i) the average volume weighted average price of our common stock (as defined in the Offer) ($11.2393 at the close of trading on March 27, 2013) multiplied by 183.5145; plus (ii) a fixed cash amount of $61.25. The final Purchase Price per $1,000 principal amount of 7.0% Debentures was $2,123.82. In addition to the Purchase Price, holders received accrued and unpaid interest on any 7.0% Debentures that were tendered to, but excluding, the settlement date of the Offer. | ||||||||
In May 2013, we repurchased $4.5 million principal amount of the 7.0% Debentures for an aggregate purchase price of $9.4 million. | ||||||||
On July 1, 2013, the Company issued a conversion right termination notice (the "Conversion Termination Notice") to holders of the 7.0% Debentures. The Company elected to terminate the right to convert the 7.0% Debentures into shares of its common stock, effective as of July 30, 2013 (the "Conversion Termination Date"). Holders of the 7.0% Debentures were able to exercise their conversion right at any time on or prior to the close of business on July 30, 2013. Holders exercising their conversion right received 184.3127 shares of common stock per $1,000 principal amount of 7.0% Debentures converted. The 7.0% Debentures submitted for conversion were deemed paid in full and the Company has no further obligation with respect to such 7.0% Debentures. Holders of $25.7 million in aggregate principal amount of the 7.0% Debentures exercised their conversion right and received 4.7 million shares of our common stock. As of December 31, 2013, $3.5 million in aggregate principal amount of the 7.0% Debentures remained outstanding. | ||||||||
Previous Senior Secured Credit Agreement | ||||||||
On December 21, 2010, the Company entered into a $375 million senior secured term loan facility maturing on September 30, 2016, pursuant to an agreement among the Company, Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders from time to time party thereto (the "Previous Senior Secured Credit Agreement"). The net proceeds of $363.6 million were used to repay certain indebtedness. The pricing terms for the Previous Senior Secured Credit Agreement included upfront fees of 1.25 percent paid to the lenders. The Previous Senior Secured Credit Agreement was guaranteed by our primary non-insurance company subsidiaries and secured by substantially all of our and the subsidiary guarantors' assets. | ||||||||
In May 2011, we amended our Previous Senior Secured Credit Agreement. Pursuant to the amended terms, the applicable interest rate on the Previous Senior Secured Credit Agreement was decreased. The new interest rate was, at our option (in most instances): (i) a Eurodollar rate of LIBOR plus 5.00 percent subject to a LIBOR "floor" of 1.25 percent (previously LIBOR plus 6.00 percent with a LIBOR floor of 1.50 percent); or (ii) a Base Rate plus 4.00 percent subject to a Base Rate "floor" of 2.25 percent (previously a Base Rate plus 5.00 percent with a Base Rate floor of 2.50 percent). | ||||||||
In 2011, as required under the terms of the Previous Senior Secured Credit Agreement, we made mandatory prepayments totaling $69.8 million due to our repurchase of $69.8 million of our common stock. In March 2011, we also made a voluntary prepayment of $50.0 million on our outstanding principal balance under the Previous Senior Secured Credit Agreement using available cash. | ||||||||
In the first nine months of 2012, as required under the terms of the Previous Senior Secured Credit Agreement, we made mandatory prepayments of $31.4 million due to repurchases of our common stock and payment of a common stock dividend. | ||||||||
In September 2012, the Company used a portion of the net proceeds from its offering of the 6.375% Notes, together with borrowings under the Senior Secured Credit Agreement to repay the remaining $223.8 million principal amount outstanding under its Previous Senior Secured Credit Agreement. | ||||||||
Senior Health Note | ||||||||
In connection with the Transfer, the Company issued the Senior Health Note due November 12, 2013 (the "Senior Health Note") payable to Senior Health. The Senior Health Note was unsecured and had an interest rate of 6.0 percent payable quarterly, beginning on March 15, 2009. We were required to make annual principal payments of $25.0 million beginning on November 12, 2009. The Company made a $25.0 million scheduled payment on the Senior Health Note in 2011, 2010 and 2009. In March 2012, we paid in full the remaining $50.0 million principal balance on the Senior Health Note, which had been scheduled to mature in November 2013. The repayment in full of the Senior Health Note removed the previous restriction on our ability to pay cash dividends on our common stock. | ||||||||
Loss on Extinguishment of Debt | ||||||||
In 2013, we recognized a loss on extinguishment of debt totaling $65.4 million consisting of: | ||||||||
(i) | $2.9 million related to the amendment of the Senior Secured Credit Agreement and the write-off of unamortized discount and issuance costs associated with prepayments on the Senior Secured Credit Agreement; and | |||||||
(ii) | $62.5 million as a result of the Offer and repurchase of 7.0% Debentures described above, the write-off of unamortized discount and issuance costs associated with the 7.0% Debentures that were repurchased and other transaction costs. Additional paid-in capital was also reduced by $12.6 million to extinguish the beneficial conversion feature associated with a portion of the 7.0% Debentures that were repurchased. | |||||||
In 2012, we recognized a loss on extinguishment of debt totaling $200.2 million consisting of: | ||||||||
(i) | $136.5 million due to our repurchase of $200.0 million principal amount of 7.0% Debentures pursuant to the Debenture Repurchase Agreement described above and the write-off of unamortized discount and issuance costs associated with the 7.0% Debentures. Additional paid-in capital was also reduced by $24.0 million to extinguish the beneficial conversion feature associated with a portion of the 7.0% Debentures that were repurchased. As the Code limits the deduction to taxable income for losses on the redemption of convertible debt, a minimal tax benefit was recognized related to the repurchase of the 7.0% Debentures; | |||||||
(ii) | $58.2 million related to the tender offer and consent solicitation for the 9.0% Notes; the write-off of unamortized issuance costs related to the 9.0% Notes; and other transaction costs; | |||||||
(iii) | $5.1 million representing the write-off of unamortized discount and issuance costs associated with repayments of our Previous Senior Secured Credit Agreement; and | |||||||
(iv) $.4 million representing the write-off of unamortized discount and issuance costs associated with payments on our Senior Secured Credit Agreement. | ||||||||
In 2011, we recognized an aggregate loss on the extinguishment of debt totaling $3.4 million representing the write-off of unamortized discount and issuance costs associated with repayments of the Previous Senior Secured Credit Agreement. | ||||||||
Scheduled Repayment of our Direct Corporate Obligations | ||||||||
The scheduled repayment of our direct corporate obligations was as follows at December 31, 2013 (dollars in millions): | ||||||||
Year ending December 31, | ||||||||
2014 | $ | 59.4 | ||||||
2015 | 79.3 | |||||||
2016 | 64 | |||||||
2017 | 4.2 | |||||||
2018 | 378.1 | |||||||
Thereafter | 275 | |||||||
$ | 860 | |||||||
LITIGATION_AND_OTHER_LEGAL_PRO
LITIGATION AND OTHER LEGAL PROCEEDINGS | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
LITIGATION AND OTHER LEGAL PROCEEDINGS | ' | |||
LITIGATION AND OTHER LEGAL PROCEEDINGS | ||||
Legal Proceedings | ||||
The Company and its subsidiaries are involved in various legal actions in the normal course of business, in which claims for compensatory and punitive damages are asserted, some for substantial amounts. We recognize an estimated loss from these loss contingencies when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Some of the pending matters have been filed as purported class actions and some actions have been filed in certain jurisdictions that permit punitive damage awards that are disproportionate to the actual damages incurred. The amounts sought in certain of these actions are often large or indeterminate and the ultimate outcome of certain actions is difficult to predict. In the event of an adverse outcome in one or more of these matters, there is a possibility that the ultimate liability may be in excess of the liabilities we have established and could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, the resolution of pending or future litigation may involve modifications to the terms of outstanding insurance policies or could impact the timing and amount of rate increases, which could adversely affect the future profitability of the related insurance policies. Based upon information presently available, and in light of legal, factual and other defenses available to the Company and its subsidiaries, the Company does not believe that it is probable that the ultimate liability from either pending or threatened legal actions, after consideration of existing loss provisions, will have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. However, given the inherent difficulty in predicting the outcome of legal proceedings, there exists the possibility that such legal actions could have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. | ||||
In addition to the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, the matters specifically identified below purport to seek substantial or an unspecified amount of damages for unsubstantiated conduct spanning several years based on complex legal theories and damages models. The alleged damages typically are indeterminate or not factually supported in the complaint, and, in any event, the Company's experience indicates that monetary demands for damages often bear little relation to the ultimate loss. In some cases, plaintiffs are seeking to certify classes in the litigation and class certification either has been denied or is pending and we have filed oppositions to class certification or sought to decertify a prior class certification. In addition, for many of these cases: (i) there is uncertainty as to the outcome of pending appeals or motions; (ii) there are significant factual issues to be resolved; and/or (iii) there are novel legal issues presented. Accordingly, the Company cannot reasonably estimate the possible loss or range of loss in excess of amounts accrued, if any, or predict the timing of the eventual resolution of these matters. The Company reviews these matters on an ongoing basis. When assessing reasonably possible and probable outcomes, the Company bases its assessment on the expected ultimate outcome following all appeals. | ||||
Litigation | ||||
On October 25, 2012, a purported nationwide class action was filed in the United States District Court for the Central District of California, William Jeffrey Burnett and Joe H. Camp v. Conseco Life Insurance Company, CNO Financial Group, Inc., CDOC, Inc. and CNO Services, LLC, Case No. EDCV12-01715VAPSPX. The plaintiffs bring this action under Rule 23(B)(3) on behalf of various Lifetrend policyholders who since October 2008 have surrendered their policies or had them lapse. Additionally, plaintiffs seek certification of a subclass of various Lifetrend policyholders who accepted optional benefits and signed a release pursuant to a regulatory settlement. The plaintiffs allege breach of contract and seek declaratory relief, compensatory damages, attorney fees and costs. On November 30, 2012, Conseco Life and the other defendants filed a motion to dismiss the complaint. On November 18, 2013, the court granted the dismissal, with leave to amend, of CNO Financial Group, Inc., CDOC, Inc. and CNO Services, LLC, and denied the motion to dismiss Conseco Life. We believe this case is without merit and intend to defend it vigorously. | ||||
Regulatory Examinations and Fines | ||||
Insurance companies face significant risks related to regulatory investigations and actions. Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending unsuitable products to customers. We are, in the ordinary course of our business, subject to various examinations, inquiries and information requests from state, federal and other authorities. The ultimate outcome of these regulatory actions (including the costs of complying with information requests and policy reviews) cannot be predicted with certainty. In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of liabilities we have established and we could suffer significant reputational harm as a result of these matters, which could also have a material adverse effect on our business, financial condition, results of operations or cash flows. | ||||
In August 2011, we were notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company and its subsidiaries. Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. We are continuing to provide information to the examiners in response to their requests. A total of 38 states and the District of Columbia are currently participating in this examination. | ||||
Guaranty Fund Assessments | ||||
The balance sheet at December 31, 2013, included: (i) accruals of $24.0 million, representing our estimate of all known assessments that will be levied against the Company's insurance subsidiaries by various state guaranty associations based on premiums written through December 31, 2013; and (ii) receivables of $24.9 million that we estimate will be recovered through a reduction in future premium taxes as a result of such assessments. At December 31, 2012, such guaranty fund assessment accruals were $30.5 million and such receivables were $24.0 million. These estimates are subject to change when the associations determine more precisely the losses that have occurred and how such losses will be allocated among the insurance companies. We recognized expense for such assessments of $2.7 million, $4.3 million and $2.3 million in 2013, 2012 and 2011, respectively. | ||||
Guarantees | ||||
In accordance with the terms of the employment agreements of two of the Company's former chief executive officers, certain wholly-owned subsidiaries of the Company are the guarantors of the former executives' nonqualified supplemental retirement benefits. The liability for such benefits was $25.9 million and $26.0 million at December 31, 2013 and 2012, respectively, and is included in the caption "Other liabilities" in the consolidated balance sheet. | ||||
Leases and Certain Other Long-Term Commitments | ||||
The Company rents office space, equipment and computer software under noncancellable operating lease agreements. In addition, the Company has entered into certain sponsorship agreements which require future payments. Total expense pursuant to these lease and sponsorship agreements was $44.3 million, $47.5 million and $43.5 million in 2013, 2012 and 2011, respectively. Future required minimum payments as of December 31, 2013, were as follows (dollars in millions): | ||||
2014 | $ | 43.4 | ||
2015 | 31.2 | |||
2016 | 23.8 | |||
2017 | 19.2 | |||
2018 | 17.4 | |||
Thereafter | 11.2 | |||
Total | $ | 146.2 | ||
AGENT_DEFERRED_COMPENSATION_PL
AGENT DEFERRED COMPENSATION PLAN | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
General Discussion of Pension and Other Postretirement Benefits [Abstract] | ' | |||||
AGENT DEFERRED COMPENSATION PLAN | ' | |||||
AGENT DEFERRED COMPENSATION PLAN | ||||||
For our agent deferred compensation plan, it is our policy to immediately recognize changes in the actuarial benefit obligation resulting from either actual experience being different than expected or from changes in actuarial assumptions. | ||||||
One of our insurance subsidiaries has a noncontributory, unfunded deferred compensation plan for qualifying members of its career agency force. Benefits are based on years of service and career earnings. The actuarial measurement date of this deferred compensation plan is December 31. The liability recognized in the consolidated balance sheet for the agent deferred compensation plan was $142.7 million and $151.7 million at December 31, 2013 and 2012, respectively. The increase (decrease) in expenses incurred on this plan were $(31.4) million, $20.5 million and $26.3 million during 2013, 2012 and 2011, respectively (including the recognition of gains (losses) of $17.2 million, $(7.5) million and $(16.2) million in 2013, 2012 and 2011, respectively, primarily resulting from changes in the discount rate assumption used to determine the deferred compensation plan liability to reflect current investment yields). The estimated net loss for the agent deferred compensation plan that will be amortized from accumulated other comprehensive income (loss) into the net periodic benefit cost during 2014 is $1.4 million. We purchased COLI as an investment vehicle to fund the agent deferred compensation plan. The COLI assets are not assets of the agent deferred compensation plan, and as a result, are accounted for outside the plan and are recorded in the consolidated balance sheet as other invested assets. The carrying value of the COLI assets was $144.8 million and $123.0 million at December 31, 2013 and 2012, respectively. Changes in the cash surrender value (which approximates net realizable value) of the COLI assets are recorded as net investment income and totaled $19.7 million, $9.0 million and $(3.8) million in 2013, 2012 and 2011, respectively. | ||||||
We used the following assumptions for the deferred compensation plan to calculate: | ||||||
2013 | 2012 | |||||
Benefit obligations: | ||||||
Discount rate | 4.75 | % | 4 | % | ||
Net periodic cost: | ||||||
Discount rate | 4 | % | 4.5 | % | ||
The discount rate is based on the yield of a hypothetical portfolio of high quality debt instruments which could effectively settle plan benefits on a present value basis as of the measurement date. At December 31, 2013, for our deferred compensation plan for qualifying members of our career agency force, we assumed a 4.75 percent annual increase in compensation until the participant's normal retirement date (age 65 and completion of five years of service). | ||||||
The benefits expected to be paid pursuant to our agent deferred compensation plan as of December 31, 2013 were as follows (dollars in millions): | ||||||
2014 | $ | 6 | ||||
2015 | 6.2 | |||||
2016 | 6.4 | |||||
2017 | 6.7 | |||||
2018 | 7.2 | |||||
2019 - 2023 | 41.9 | |||||
The Company has a qualified defined contribution plan for which substantially all employees are eligible. Company contributions, which match a portion of certain voluntary employee contributions to the plan, totaled $4.6 million, $4.5 million and $4.5 million in 2013, 2012 and 2011, respectively. Employer matching contributions are discretionary. |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||
SHAREHOLDERS' EQUITY | ' | ||||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||||
In November 2009, we completed the private sale of 16.4 million shares of our common stock and warrants to purchase 5.0 million shares of our common stock to Paulson on behalf of several investment funds and accounts managed by Paulson. Concurrently with the completion of the private placement of our common stock and warrants, we entered into an investor rights agreement with Paulson, pursuant to which we granted to Paulson, among other things, certain registration rights with respect to certain securities and certain preemptive rights, and Paulson agreed to, among other things, certain restrictions on transfer of certain securities, certain voting limitations and certain standstill provisions. The warrants have an exercise price of $6.50 per share of common stock, subject to customary anti-dilution adjustments. Prior to June 30, 2013, the warrants were not exercisable, except under limited circumstances. Commencing on June 30, 2013, the warrants are exercisable for shares of our common stock at the option of the holder at any time, subject to certain exceptions. The warrants expire on December 30, 2016. | |||||||||||||||||
Changes in the number of shares of common stock outstanding were as follows (shares in thousands): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Balance, beginning of year | 221,502 | 241,305 | 251,084 | ||||||||||||||
Treasury stock purchased and retired | (8,949 | ) | (21,533 | ) | (11,120 | ) | |||||||||||
Conversion of 7.0% Debentures | 4,739 | — | — | ||||||||||||||
Stock options exercised | 2,087 | 1,191 | 862 | ||||||||||||||
Restricted and performance stock vested | 945 | (a) | 539 | (a) | 479 | (a) | |||||||||||
Balance, end of year | 220,324 | 221,502 | 241,305 | ||||||||||||||
____________________ | |||||||||||||||||
(a) | In 2013, 2012 and 2011, such amount was reduced by 472 thousand shares, 237 thousand shares and 200 thousand shares, respectively, which were tendered for the payment of required federal and state tax withholdings owed on the vesting of restricted stock. | ||||||||||||||||
In May 2011, the Company announced a common share repurchase program of up to $100.0 million. In February 2012, June 2012, December 2012 and December 2013, the Company's Board of Directors approved, in aggregate, an additional $800.0 million to repurchase the Company's outstanding securities. In 2013, 2012 and 2011, we repurchased 8.9 million, 21.5 million and 11.1 million shares, respectively, of common stock for $118.4 million, $180.2 million and $69.8 million, respectively, under the securities repurchase program. The Company purchased $63.8 million aggregate principal amount of our 7.0% Debentures in 2013 as further discussed in the note to the consolidated financial statements entitled "Notes Payable - Direct Corporate Obligations". Such repayments were made pursuant to our securities repurchase program. The Company had remaining repurchase authority of $397.4 million as of December 31, 2013. | |||||||||||||||||
In May 2012, we initiated a common stock dividend program. In 2013 and 2012 dividends declared and paid on common stock totaled $24.4 million ($0.11 per common share) and $13.9 million ($0.06 per common share), respectively. | |||||||||||||||||
The Company has a long-term incentive plan which permits the grant of CNO incentive or non-qualified stock options, restricted stock awards, stock appreciation rights, performance shares or units and certain other equity-based awards to certain directors, officers and employees of the Company and certain other individuals who perform services for the Company. As of December 31, 2013, 9.1 million shares remained available for issuance under the plan. Our stock option awards are generally granted with an exercise price equal to the market price of the Company's stock on the date of grant. For options granted in 2006 and prior years, our stock option awards generally vested on a graded basis over a four year service term and expire ten years from the date of grant. Our stock option awards granted in 2007 through 2009 generally vested on a graded basis over a three year service term and expire five years from the date of grant. Our stock options granted in 2010 through 2013 generally vest on a graded basis over a three year service term and expire seven years from the date of grant. The vesting periods for our restricted stock awards range from immediate vesting to a period of three years. | |||||||||||||||||
A summary of the Company's stock option activity and related information for 2013 is presented below (shares in thousands; dollars in millions, except per share amounts): | |||||||||||||||||
Shares | Weighted average exercise price | Weighted average remaining life (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at the beginning of the year | 6,655 | $ | 9.72 | ||||||||||||||
Options granted | 1,447 | 11.01 | |||||||||||||||
Exercised | (2,087 | ) | 7.27 | $ | 6 | ||||||||||||
Forfeited or terminated | (436 | ) | 13.95 | ||||||||||||||
Outstanding at the end of the year | 5,579 | 10.64 | 4 | $ | 32.5 | ||||||||||||
Options exercisable at the end of the year | 2,529 | 2.1 | $ | 13.9 | |||||||||||||
Available for future grant | 9,099 | ||||||||||||||||
A summary of the Company's stock option activity and related information for 2012 is presented below (shares in thousands; dollars in millions, except per share amounts): | |||||||||||||||||
Shares | Weighted average exercise price | Weighted average remaining life (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at the beginning of the year | 7,712 | $ | 10.13 | ||||||||||||||
Options granted | 1,389 | 7.55 | |||||||||||||||
Exercised | (1,191 | ) | 3.14 | $ | 2.7 | ||||||||||||
Forfeited or terminated | (1,255 | ) | 16.13 | ||||||||||||||
Outstanding at the end of the year | 6,655 | 9.72 | 3.4 | $ | 30.2 | ||||||||||||
Options exercisable at the end of the year | 3,715 | 1.7 | $ | 15.5 | |||||||||||||
Available for future grant | 9,713 | ||||||||||||||||
A summary of the Company's stock option activity and related information for 2011 is presented below (shares in thousands; dollars in millions, except per share amounts): | |||||||||||||||||
Shares | Weighted average exercise price | Weighted average remaining life (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at the beginning of the year | 9,754 | $ | 10.87 | ||||||||||||||
Options granted | 1,262 | 7.38 | |||||||||||||||
Exercised | (862 | ) | 2.52 | $ | 1.3 | ||||||||||||
Forfeited or terminated | (2,442 | ) | 14.35 | ||||||||||||||
Outstanding at the end of the year | 7,712 | 10.13 | 3.1 | $ | 31.3 | ||||||||||||
Options exercisable at the end of the year | 4,135 | 1.8 | $ | 18 | |||||||||||||
Available for future grant | 11,044 | ||||||||||||||||
We recognized compensation expense related to stock options totaling $7.2 million ($4.7 million after income taxes) in 2013, $6.7 million ($4.4 million after income taxes) in 2012 and $.2 million ($.1 million after income taxes) in 2011. Compensation expense in 2011 was reduced by $7.4 million to reflect the true-up of forfeiture estimates for awards with service conditions. Compensation expense related to stock options reduced both basic and diluted earnings per share by two cents, two cents and nil cents in 2013, 2012 and 2011, respectively. At December 31, 2013, the unrecognized compensation expense for non-vested stock options totaled $9.3 million which is expected to be recognized over a weighted average period of 1.9 years. Cash received by the Company from the exercise of stock options was $15.2 million, $3.1 million and $2.2 million during 2013, 2012 and 2011, respectively. | |||||||||||||||||
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Grants | Grants | Grants | |||||||||||||||
Weighted average risk-free interest rates | 0.8 | % | 0.9 | % | 2.2 | % | |||||||||||
Weighted average dividend yields | 0.7 | % | — | % | — | % | |||||||||||
Volatility factors | 107 | % | 108 | % | 107 | % | |||||||||||
Weighted average expected life (in years) | 4.8 | 4.7 | 4.8 | ||||||||||||||
Weighted average fair value per share | $ | 8.02 | $ | 5.76 | $ | 5.68 | |||||||||||
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the Company's history and expectation of dividend payouts. Volatility factors are based on the weekly historical volatility of the Company's common stock equal to the expected life of the option or since our emergence from bankruptcy in September 2003. The expected life is based on the average of the graded vesting period and the contractual terms of the option. | |||||||||||||||||
The exercise price was equal to the market price of our stock on the date of grant for all options granted in 2013, 2012 and 2011. | |||||||||||||||||
The following table summarizes information about stock options outstanding at December 31, 2013 (shares in thousands): | |||||||||||||||||
Options outstanding | Options exercisable | ||||||||||||||||
Range of exercise prices | Number outstanding | Remaining life (in years) | Average exercise price | Number exercisable | Average exercise price | ||||||||||||
$1.13 | 76 | 0.3 | $ | 1.13 | 76 | $ | 1.13 | ||||||||||
$3.05 - $3.11 | 272 | 0.4 | 3.05 | 272 | 3.05 | ||||||||||||
$5.78 - $6.77 | 726 | 3.2 | 6.45 | 723 | 6.45 | ||||||||||||
$7.38 - $7.74 | 1,964 | 4.8 | 7.46 | 382 | 7.39 | ||||||||||||
$8.29 - $12.34 | 1,415 | 6.1 | 10.77 | — | — | ||||||||||||
$12.74 - $18.97 | 91 | 4 | 16.23 | 41 | 18.9 | ||||||||||||
$20.00 - $25.45 | 1,035 | 1.2 | 21.62 | 1,035 | 21.62 | ||||||||||||
5,579 | 2,529 | ||||||||||||||||
During 2013, 2012 and 2011, the Company granted .2 million, .7 million and .9 million restricted shares, respectively, of CNO common stock to certain directors, officers and employees of the Company at a weighted average fair value of $12.00 per share, $7.35 per share and $6.97 per share, respectively. The fair value of such grants totaled $2.1 million, $5.0 million and $6.0 million in 2013, 2012 and 2011, respectively. Such amounts are recognized as compensation expense over the vesting period of the restricted stock. A summary of the Company's non-vested restricted stock activity for 2013 is presented below (shares in thousands): | |||||||||||||||||
Shares | Weighted average grant date fair value | ||||||||||||||||
Non-vested shares, beginning of year | 1,162 | $ | 7.08 | ||||||||||||||
Granted | 178 | 12 | |||||||||||||||
Vested | (749 | ) | 7.42 | ||||||||||||||
Forfeited | (70 | ) | 6.94 | ||||||||||||||
Non-vested shares, end of year | 521 | 8.29 | |||||||||||||||
At December 31, 2013, the unrecognized compensation expense for non-vested restricted stock totaled $2.5 million which is expected to be recognized over a weighted average period of 1.6 years. At December 31, 2012, the unrecognized compensation expense for non-vested restricted stock totaled $5.4 million. We recognized compensation expense related to restricted stock awards totaling $4.5 million, $4.5 million and $4.3 million in 2013, 2012 and 2011, respectively. The fair value of restricted stock that vested during 2013, 2012 and 2011 was $5.6 million, $4.4 million and $3.2 million, respectively. | |||||||||||||||||
Authoritative guidance also requires us to estimate the amount of unvested stock-based awards that will be forfeited in future periods and reduce the amount of compensation expense recognized over the applicable service period to reflect this estimate. We periodically evaluate our forfeiture assumptions to more accurately reflect our actual forfeiture experience. | |||||||||||||||||
The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation expense recognized because of NOLs which are available to offset future taxable income. | |||||||||||||||||
In 2013, 2012 and 2011, the Company granted performance units totaling 424,400, 406,500 and 416,700, respectively, pursuant to its long-term incentive plan to certain officers of the Company. The criteria for payment for such awards are based on certain company-wide performance levels that must be achieved within a specified performance time (generally three years), each as defined in the award. Unless antidilutive, the diluted weighted average shares outstanding would reflect the number of performance units expected to be issued, using the treasury stock method. | |||||||||||||||||
A summary of the Company's performance units is presented below (shares in thousands): | |||||||||||||||||
Total shareholder return awards | Operating return on equity awards | Pre-tax operating income awards | |||||||||||||||
Awards outstanding at December 31, 2010 | — | 555 | 652 | ||||||||||||||
Granted in 2011 | — | — | 417 | ||||||||||||||
Forfeited | — | (555 | ) | (233 | ) | ||||||||||||
Awards outstanding at December 31, 2011 | — | — | 836 | ||||||||||||||
Granted in 2012 | 203 | — | 203 | ||||||||||||||
Forfeited | (10 | ) | — | (62 | ) | ||||||||||||
Awards outstanding at December 31, 2012 | 193 | — | 977 | ||||||||||||||
Granted in 2013 | 212 | 212 | — | ||||||||||||||
Additional shares issued pursuant to achieving certain performance criteria (a) | — | — | 223 | ||||||||||||||
Shares vested in 2013 | — | — | (668 | ) | |||||||||||||
Forfeited | (23 | ) | (8 | ) | (62 | ) | |||||||||||
Awards outstanding at December 31, 2013 | 382 | 204 | 470 | ||||||||||||||
_________________________ | |||||||||||||||||
(a) The performance units provide for a payout of up to 150 percent of the award if certain performance levels are achieved. | |||||||||||||||||
The grant date fair value of the performance units awarded was $4.4 million and $3.1 million in 2013 and 2012, respectively. We recognized compensation expense of $3.4 million, $3.8 million and $2.0 million in 2013, 2012 and 2011, respectively, related to the performance units. | |||||||||||||||||
As further discussed in the footnote to the consolidated financial statements entitled "Income Taxes", the Company's Board of Directors adopted the Section 382 Rights Agreement on January 20, 2009 and amended and extended the Section 382 Rights Agreement on December 6, 2011. The Amended Section 382 Rights Agreement is designed to protect shareholder value by preserving the value of our tax assets primarily associated with NOLs. At the time the Section 382 Rights Agreement was adopted, the Company declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock. The dividend was payable on January 30, 2009, to the shareholders of record as of the close of business on that date and a Right is also attached to each share of CNO common stock issued after that date. Pursuant to the Amended Section 382 Rights Agreement, each Right entitles the shareholder to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $.01 per share (the "Junior Preferred Stock") of the Company at a price of $25.00 per one one-thousandth of a share of Junior Preferred Stock. The description and terms of the Rights are set forth in the Amended Section 382 Rights Agreement. The Rights would become exercisable in the event any person or group (subject to certain exemptions) becomes an owner of more than 4.99 percent of the outstanding stock of CNO (a "Threshold Holder") without the approval of the Board of Directors or an existing shareholder who is currently a Threshold Holder acquires additional shares exceeding one percent of our outstanding shares without prior approval from the Board of Directors. | |||||||||||||||||
A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Net income for basic earnings per share | $ | 478 | $ | 221 | $ | 335.7 | |||||||||||
Add: interest expense on 7.0% Debentures, net of income taxes | 1.6 | 12.2 | 14.7 | ||||||||||||||
Net income for diluted earnings per share | $ | 479.6 | $ | 233.2 | $ | 350.4 | |||||||||||
Shares: | |||||||||||||||||
Weighted average shares outstanding for basic earnings per share | 221,628 | 233,685 | 247,952 | ||||||||||||||
Effect of dilutive securities on weighted average shares: | |||||||||||||||||
7.0% Debentures | 5,780 | 44,037 | 53,367 | ||||||||||||||
Stock options, restricted stock and performance units | 2,776 | 2,762 | 2,513 | ||||||||||||||
Warrants | 2,518 | 943 | 249 | ||||||||||||||
Dilutive potential common shares | 11,074 | 47,742 | 56,129 | ||||||||||||||
Weighted average shares outstanding for diluted earnings per share | 232,702 | 281,427 | 304,081 | ||||||||||||||
Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Restricted shares (including our performance units) are not included in basic earnings per share until vested. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options and warrants were exercised and restricted stock was vested. The dilution from options, warrants and restricted shares is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options and warrants (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options and warrants (or the vesting of the restricted stock and performance units). Initially, the 7.0% Debentures were convertible into 182.1494 shares of our common stock for each $1,000 principal amount of 7.0% Debentures, which was equivalent to an initial conversion price of approximately $5.49 per share. The conversion rate was subject to adjustment following the occurrence of certain events (including the payment of dividends on our common stock) in accordance with the terms of the an indenture dated as of October 16, 2009. On July 1, 2013, the Company issued a conversion right termination notice to holders of the 7.0% Debentures as further discussed in the note to the consolidated financial statements entitled "Notes Payable - Direct Corporate Obligations". |
OTHER_OPERATING_STATEMENT_DATA
OTHER OPERATING STATEMENT DATA | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Other Operating Statement Data [Abstract] | ' | |||||||||||
OTHER OPERATING STATEMENT DATA | ' | |||||||||||
OTHER OPERATING STATEMENT DATA | ||||||||||||
Insurance policy income consisted of the following (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Direct premiums collected | $ | 3,966.00 | $ | 3,883.10 | $ | 4,214.70 | ||||||
Reinsurance assumed | 38 | 70.4 | 87.7 | |||||||||
Reinsurance ceded | (240.5 | ) | (237.1 | ) | (243.2 | ) | ||||||
Premiums collected, net of reinsurance | 3,763.50 | 3,716.40 | 4,059.20 | |||||||||
Change in unearned premiums | (16.6 | ) | 20.8 | 17.2 | ||||||||
Less premiums on interest-sensitive life and products without mortality and morbidity risk which are recorded as additions to insurance liabilities | (1,298.1 | ) | (1,296.7 | ) | (1,693.5 | ) | ||||||
Premiums on traditional products with mortality or morbidity risk | 2,448.80 | 2,440.50 | 2,382.90 | |||||||||
Fees and surrender charges on interest-sensitive products | 295.9 | 314.9 | 307.6 | |||||||||
Insurance policy income | $ | 2,744.70 | $ | 2,755.40 | $ | 2,690.50 | ||||||
The four states with the largest shares of 2013 collected premiums were Florida (7.9 percent), Pennsylvania (6.3 percent), Texas (6.2 percent) and California (6.1 percent). No other state accounted for more than five percent of total collected premiums. | ||||||||||||
Other operating costs and expenses were as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Commission expense | $ | 103.8 | $ | 115.8 | $ | 131.7 | ||||||
Salaries and wages | 234 | 226.6 | 212.2 | |||||||||
Other | 428.4 | 476.9 | 360.6 | |||||||||
Total other operating costs and expenses | $ | 766.2 | $ | 819.3 | $ | 704.5 | ||||||
Changes in the present value of future profits were as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 626 | $ | 697.7 | $ | 1,008.60 | ||||||
Amortization | (92.0 | ) | (93.5 | ) | (113.7 | ) | ||||||
Amounts related to fair value adjustment of fixed maturities, available for sale | 145.3 | 21.8 | (197.2 | ) | ||||||||
Balance, end of year | $ | 679.3 | $ | 626 | $ | 697.7 | ||||||
Based on current conditions and assumptions as to future events on all policies inforce, the Company expects to amortize approximately 10 percent of the December 31, 2013 balance of the present value of future profits in 2014, 9 percent in 2015, 8 percent in 2016, 7 percent in 2017 and 7 percent in 2018. The discount rate used to determine the amortization of the present value of future profits averaged approximately 5 percent in the years ended December 31, 2013, 2012 and 2011. | ||||||||||||
In accordance with authoritative guidance, we are required to amortize the present value of future profits in relation to estimated gross profits for interest-sensitive life products and annuity products. Such guidance also requires that estimates of expected gross profits used as a basis for amortization be evaluated regularly, and that the total amortization recorded to date be adjusted by a charge or credit to the statement of operations, if actual experience or other evidence suggests that earlier estimates should be revised. | ||||||||||||
Changes in deferred acquisition costs were as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 629.7 | $ | 797.1 | $ | 999.6 | ||||||
Additions | 222.8 | 191.7 | 216.7 | |||||||||
Amortization | (204.3 | ) | (195.5 | ) | (183.7 | ) | ||||||
Amounts related to fair value adjustment of fixed maturities, available for sale | 315.9 | (163.6 | ) | (235.5 | ) | |||||||
Other | 4 | — | — | |||||||||
Balance, end of year | $ | 968.1 | $ | 629.7 | $ | 797.1 | ||||||
CONSOLIDATED_STATEMENT_CASH_FL
CONSOLIDATED STATEMENT CASH FLOWS | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ' | |||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||
The following disclosures supplement our consolidated statement of cash flows. | ||||||||||||
The following reconciles net income to net cash provided by operating activities (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 478 | $ | 221 | $ | 335.7 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Amortization and depreciation | 324.6 | 315 | 323.6 | |||||||||
Income taxes | (181.2 | ) | (71.8 | ) | (32.9 | ) | ||||||
Insurance liabilities | 465.8 | 330 | 346.4 | |||||||||
Accrual and amortization of investment income | (276.3 | ) | (100.7 | ) | 64.5 | |||||||
Deferral of policy acquisition costs | (222.8 | ) | (191.7 | ) | (216.7 | ) | ||||||
Net realized investment gains | (33.6 | ) | (81.1 | ) | (61.8 | ) | ||||||
Loss related to reinsurance transaction | 98.4 | — | — | |||||||||
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 | |||||||||
Other | 2.1 | 14 | 12.6 | |||||||||
Net cash provided by operating activities | $ | 720.4 | $ | 634.9 | $ | 774.8 | ||||||
Non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Stock options, restricted stock and performance units | $ | 15.1 | $ | 13.7 | $ | 5.2 | ||||||
STATUTORY_INFORMATION_BASED_ON
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Statutory Information [Abstract] | ' | |||||||
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) | ' | |||||||
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) | ||||||||
Statutory accounting practices prescribed or permitted by regulatory authorities for the Company's insurance subsidiaries differ from GAAP. The Company's insurance subsidiaries reported the following amounts to regulatory agencies, after appropriate elimination of intercompany accounts among such subsidiaries (dollars in millions): | ||||||||
2013 | 2012 | |||||||
Statutory capital and surplus | $ | 1,711.90 | $ | 1,560.40 | ||||
Asset valuation reserve | 233.9 | 222.2 | ||||||
Interest maintenance reserve | 582.4 | 585.8 | ||||||
Total | $ | 2,528.20 | $ | 2,368.40 | ||||
Statutory capital and surplus included investments in upstream affiliates of $52.4 million at both December 31, 2013 and 2012, which was eliminated in the consolidated financial statements prepared in accordance with GAAP. | ||||||||
Statutory earnings build the capital required by ratings agencies and regulators. Statutory earnings, fees and interest paid by the insurance companies to the parent company create the "cash flow capacity" the parent company needs to meet its obligations, including debt service. The consolidated statutory net income (a non-GAAP measure) of our insurance subsidiaries was $386.5 million, $350.4 million and $366.8 million in 2013, 2012 and 2011, respectively. Included in such net income were net realized capital gains, net of income taxes, of $19.0 million, $13.0 million and $3.7 million in 2013, 2012 and 2011, respectively. In addition, such net income included pre-tax amounts for fees and interest paid to CNO or its non-life subsidiaries totaling $159.7 million, $155.3 million and $147.7 million in 2013, 2012 and 2011, respectively. | ||||||||
Insurance regulators may prohibit the payment of dividends or other payments by our insurance subsidiaries to parent companies if they determine that such payment could be adverse to our policyholders or contract holders. Otherwise, the ability of our insurance subsidiaries to pay dividends is subject to state insurance department regulations. Insurance regulations generally permit dividends to be paid from statutory earned surplus of the insurance company without regulatory approval for any 12-month period in amounts equal to the greater of (or in a few states, the lesser of): (i) statutory net gain from operations or statutory net income for the prior year; or (ii) 10 percent of statutory capital and surplus as of the end of the preceding year. This type of dividend is referred to as an "ordinary dividend". Any dividend in excess of these levels requires the approval of the director or commissioner of the applicable state insurance department and is referred to as an "extraordinary dividend". During 2013, our insurance subsidiaries paid extraordinary dividends of $236.8 million to CDOC, Inc. ("CDOC") (our wholly owned subsidiary and the immediate parent of Washington National, Conseco Life and Conseco Life Insurance Company of Texas). The holding companies made no capital contributions to its insurance subsidiaries in 2013. | ||||||||
Each of the immediate insurance subsidiaries of CDOC had negative earned surplus at December 31, 2013. Accordingly, any dividend payments from these subsidiaries require the approval of the director or commissioner of the applicable state insurance department. The payment of interest on surplus debentures requires either prior written notice or approval of the director or commissioner of the applicable state insurance department. Dividends and other payments from our non-insurance subsidiaries to CNO or CDOC do not require approval by any regulatory authority or other third party. | ||||||||
In accordance with an order from the Florida Office of Insurance Regulation, Washington National may not distribute funds to any affiliate or shareholder without prior notice to the Florida Office of Insurance Regulation. In addition, the risk-based capital ("RBC") and other capital requirements described below can also limit, in certain circumstances, the ability of our insurance subsidiaries to pay dividends. | ||||||||
RBC requirements provide a tool for insurance regulators to determine the levels of statutory capital and surplus an insurer must maintain in relation to its insurance and investment risks and the need for possible regulatory attention. The RBC requirements provide four levels of regulatory attention, varying with the ratio of the insurance company's total adjusted capital (defined as the total of its statutory capital and surplus, asset valuation reserve and certain other adjustments) to its RBC (as measured on December 31 of each year) as follows: (i) if a company's total adjusted capital is less than 100 percent but greater than or equal to 75 percent of its RBC, the company must submit a comprehensive plan to the regulatory authority proposing corrective actions aimed at improving its capital position (the "Company Action Level"); (ii) if a company's total adjusted capital is less than 75 percent but greater than or equal to 50 percent of its RBC, the regulatory authority will perform a special examination of the company and issue an order specifying the corrective actions that must be taken; (iii) if a company's total adjusted capital is less than 50 percent but greater than or equal to 35 percent of its RBC, the regulatory authority may take any action it deems necessary, including placing the company under regulatory control; and (iv) if a company's total adjusted capital is less than 35 percent of its RBC, the regulatory authority must place the company under its control. In addition, the RBC requirements provide for a trend test if a company's total adjusted capital is between 100 percent and 125 percent of its RBC at the end of the year. The trend test calculates the greater of the decrease in the margin of total adjusted capital over RBC: (i) between the current year and the prior year; and (ii) for the average of the last 3 years. It assumes that such decrease could occur again in the coming year. Any company whose trended total adjusted capital is less than 95 percent of its RBC would trigger a requirement to submit a comprehensive plan as described above for the Company Action Level. In 2011, the NAIC approved an increase in the RBC requirements that would subject a company to the trend test if a company's total adjusted capital is between 100 percent and 150 percent of its RBC at the end of the year (previously between 100 percent and 125 percent). However, this change will require the states to modify their RBC law before it becomes effective for their domiciled insurance companies. The 2013 statutory annual statements of each of our insurance subsidiaries reflect total adjusted capital in excess of the levels subjecting the subsidiaries to any regulatory action. | ||||||||
In addition, although we are under no obligation to do so, we may elect to contribute additional capital or retain greater amounts of capital to strengthen the surplus of certain insurance subsidiaries. Any election to contribute or retain additional capital could impact the amounts our insurance subsidiaries pay as dividends to the holding company. The ability of our insurance subsidiaries to pay dividends is also impacted by various criteria established by rating agencies to maintain or receive higher ratings and by the capital levels that we target for our insurance subsidiaries. | ||||||||
At December 31, 2013, the consolidated RBC ratio of our insurance subsidiaries exceeded the minimum RBC requirement included in our Senior Secured Credit Agreement. See the note to the consolidated financial statements entitled "Notes Payable - Direct Corporate Obligations" for further discussion of various financial ratios and balances we are required to maintain. We calculate the consolidated RBC ratio by assuming all of the assets, liabilities, capital and surplus and other aspects of the business of our insurance subsidiaries are combined together in one insurance subsidiary, with appropriate intercompany eliminations. |
BUSINESS_SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
BUSINESS SEGMENTS | ' | |||||||||||
BUSINESS SEGMENTS | ||||||||||||
The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; Other CNO Business, comprised primarily of products we no longer sell actively; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. | ||||||||||||
We measure segment performance by excluding loss related to reinsurance transaction, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests and loss on extinguishment of debt because we believe that this performance measure is a better indicator of the ongoing business and trends in our business. Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of net realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business. | ||||||||||||
Loss related to reinsurance transaction, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests and loss on extinguishment of debt depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments. Net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business. | ||||||||||||
Operating information by segment was as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Bankers Life: | ||||||||||||
Insurance policy income: | ||||||||||||
Annuities | $ | 28.9 | $ | 28.4 | $ | 33.4 | ||||||
Health | 1,311.20 | 1,342.70 | 1,347.30 | |||||||||
Life | 308.6 | 286.3 | 231.7 | |||||||||
Net investment income (a) | 1,005.70 | 838.9 | 766.3 | |||||||||
Fee revenue and other income (a) | 19 | 15.2 | 13.8 | |||||||||
Total Bankers Life revenues | 2,673.40 | 2,511.50 | 2,392.50 | |||||||||
Washington National: | ||||||||||||
Insurance policy income: | ||||||||||||
Health | 586.5 | 575.2 | 569.5 | |||||||||
Life | 14.2 | 15.2 | 15.6 | |||||||||
Net investment income (a) | 206.5 | 204.1 | 189.5 | |||||||||
Fee revenue and other income (a) | 0.9 | 1.1 | 1 | |||||||||
Total Washington National revenues | 808.1 | 795.6 | 775.6 | |||||||||
Colonial Penn: | ||||||||||||
Insurance policy income: | ||||||||||||
Health | 4.3 | 5.2 | 5.9 | |||||||||
Life | 227.8 | 212.6 | 197.1 | |||||||||
Net investment income (a) | 40 | 40.4 | 41.1 | |||||||||
Fee revenue and other income (a) | 0.8 | 0.7 | 0.9 | |||||||||
Total Colonial Penn revenues | 272.9 | 258.9 | 245 | |||||||||
Other CNO Business: | ||||||||||||
Insurance policy income: | ||||||||||||
Annuities | 12.1 | 10.6 | 12.2 | |||||||||
Health | 24.7 | 26.3 | 29.4 | |||||||||
Life | 226.4 | 252.9 | 248.4 | |||||||||
Net investment income (a) | 341.8 | 340.6 | 344.1 | |||||||||
Fee revenue and other income (a) | 5.1 | — | — | |||||||||
Total Other CNO Business revenues | 610.1 | 630.4 | 634.1 | |||||||||
Corporate operations: | ||||||||||||
Net investment income | 39.8 | 62.4 | 13.1 | |||||||||
Fee and other income | 6.2 | 2.8 | 2.5 | |||||||||
Total corporate revenues | 46 | 65.2 | 15.6 | |||||||||
Total revenues | 4,410.50 | 4,261.60 | 4,062.80 | |||||||||
(continued on next page) | ||||||||||||
(continued from previous page) | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Expenses: | ||||||||||||
Bankers Life: | ||||||||||||
Insurance policy benefits | $ | 1,788.70 | $ | 1,642.90 | $ | 1,570.10 | ||||||
Amortization | 187.5 | 187.6 | 206.3 | |||||||||
Interest expense on investment borrowings | 6.7 | 5.3 | 4.8 | |||||||||
Other operating costs and expenses | 380 | 374.8 | 320.4 | |||||||||
Total Bankers Life expenses | 2,362.90 | 2,210.60 | 2,101.60 | |||||||||
Washington National: | ||||||||||||
Insurance policy benefits | 470.5 | 447.1 | 464.5 | |||||||||
Amortization | 53.8 | 47.7 | 44.9 | |||||||||
Interest expense on investment borrowings | 1.9 | 2.8 | 0.7 | |||||||||
Other operating costs and expenses | 161.1 | 170.9 | 169.4 | |||||||||
Total Washington National expenses | 687.3 | 668.5 | 679.5 | |||||||||
Colonial Penn: | ||||||||||||
Insurance policy benefits | 165.7 | 161.1 | 150.1 | |||||||||
Amortization | 14.5 | 15 | 15 | |||||||||
Other operating costs and expenses | 105.2 | 91.4 | 84.6 | |||||||||
Total Colonial Penn expenses | 285.4 | 267.5 | 249.7 | |||||||||
Other CNO Business: | ||||||||||||
Insurance policy benefits | 469.2 | 508.4 | 479.9 | |||||||||
Amortization | 19.9 | 33.8 | 39.8 | |||||||||
Interest expense on investment borrowings | 19.3 | 19.9 | 20.3 | |||||||||
Other operating costs and expenses | 76.2 | 117.1 | 78.8 | |||||||||
Total Other CNO Business expenses | 584.6 | 679.2 | 618.8 | |||||||||
Corporate operations: | ||||||||||||
Interest expense on corporate debt | 51.3 | 66.2 | 76.3 | |||||||||
Interest expense on borrowings of variable interest entities | 0.1 | 20 | 11.8 | |||||||||
Interest expense on investment borrowings | — | 0.4 | 0.2 | |||||||||
Other operating costs and expenses | 27.3 | 65.1 | 51.3 | |||||||||
Total corporate expenses | 78.7 | 151.7 | 139.6 | |||||||||
Total expenses | 3,998.90 | 3,977.50 | 3,789.20 | |||||||||
Income (loss) before loss related to reinsurance transaction, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, loss on extinguishment of debt and income taxes: | ||||||||||||
Bankers Life | 310.5 | 300.9 | 290.9 | |||||||||
Washington National | 120.8 | 127.1 | 96.1 | |||||||||
Colonial Penn | (12.5 | ) | (8.6 | ) | (4.7 | ) | ||||||
Other CNO Business | 25.5 | (48.8 | ) | 15.3 | ||||||||
Corporate operations | (32.7 | ) | (86.5 | ) | (124.0 | ) | ||||||
Income before loss related to reinsurance transaction, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, loss on extinguishment of debt and income taxes | $ | 411.6 | $ | 284.1 | $ | 273.6 | ||||||
___________________ | ||||||||||||
(a) | It is not practicable to provide additional components of revenue by product or services. | |||||||||||
A reconciliation of segment revenues and expenses to consolidated revenues and expenses is as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Total segment revenues | $ | 4,410.50 | $ | 4,261.60 | $ | 4,062.80 | ||||||
Net realized investment gains | 33.4 | 81.1 | 61.8 | |||||||||
Revenues related to certain non-strategic investments and earnings attributable to non-controlling interests | 32.2 | — | — | |||||||||
Consolidated revenues | $ | 4,476.10 | $ | 4,342.70 | $ | 4,124.60 | ||||||
Total segment expenses | $ | 3,998.90 | $ | 3,977.50 | $ | 3,789.20 | ||||||
Loss related to reinsurance transaction | 98.4 | — | — | |||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities (a) | (54.4 | ) | 4.4 | 34.4 | ||||||||
Amortization related to fair value changes in embedded derivative liabilities (a) | 19 | (1.6 | ) | (14.0 | ) | |||||||
Amortization related to net realized investment gains | 1.6 | 6.5 | 5.4 | |||||||||
Expenses related to certain non-strategic investments and earnings attributable to non-controlling interests | 42.4 | — | — | |||||||||
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 | |||||||||
Consolidated expenses | $ | 4,171.30 | $ | 4,187.00 | $ | 3,818.40 | ||||||
____________ | ||||||||||||
(a) | Prior to June 30, 2011, we maintained a specific block of investments in our trading securities account (which we carried at estimated fair value with changes in such value recognized as investment income from policyholder and reinsurer accounts and other special-purpose portfolios) to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio, which resulted in $35.4 million, $(2.8) million and $(20.4) million of increased (decreased) earnings in 2013, 2012 and 2011, respectively, since the volatility caused by the accounting requirements to record embedded options at fair value was no longer being offset. | |||||||||||
Segment balance sheet information was as follows (dollars in millions): | ||||||||||||
2013 | 2012 | |||||||||||
Assets: | ||||||||||||
Bankers Life | $ | 18,230.20 | $ | 17,637.70 | ||||||||
Washington National | 4,655.30 | 4,499.50 | ||||||||||
Colonial Penn | 891.1 | 917.8 | ||||||||||
Other CNO Business | 8,483.70 | 8,679.50 | ||||||||||
Corporate operations | 2,520.30 | 2,396.90 | ||||||||||
Total assets | $ | 34,780.60 | $ | 34,131.40 | ||||||||
Liabilities: | ||||||||||||
Bankers Life | $ | 15,866.40 | $ | 15,590.10 | ||||||||
Washington National | 3,665.20 | 3,425.60 | ||||||||||
Colonial Penn | 766.6 | 749.6 | ||||||||||
Other CNO Business | 7,531.20 | 7,451.10 | ||||||||||
Corporate operations | 1,996.00 | 1,865.70 | ||||||||||
Total liabilities | $ | 29,825.40 | $ | 29,082.10 | ||||||||
The following table presents selected financial information of our segments (dollars in millions): | ||||||||||||
Segment | Present value of future profits | Deferred acquisition costs | Insurance liabilities | |||||||||
2013 | ||||||||||||
Bankers Life | $ | 263.2 | $ | 627.8 | $ | 14,575.00 | ||||||
Washington National | 343.2 | 182.6 | 2,919.00 | |||||||||
Colonial Penn | 55.7 | 67.4 | 766.2 | |||||||||
Other CNO Business | 17.2 | 90.3 | 6,615.60 | |||||||||
Total | $ | 679.3 | $ | 968.1 | $ | 24,875.80 | ||||||
2012 | ||||||||||||
Bankers Life | $ | 168.8 | $ | 332.8 | $ | 14,548.00 | ||||||
Washington National | 375.8 | 157.3 | 2,911.70 | |||||||||
Colonial Penn | 63.6 | 57.5 | 763.1 | |||||||||
Other CNO Business | 17.8 | 82.1 | 6,866.70 | |||||||||
Total | $ | 626 | $ | 629.7 | $ | 25,089.50 | ||||||
QUARTERLY_FINANCIAL_DATA
QUARTERLY FINANCIAL DATA | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Data [Abstract] | ' | |||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | ' | |||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
We compute earnings per common share for each quarter independently of earnings per share for the year. The sum of the quarterly earnings per share may not equal the earnings per share for the year because of: (i) transactions affecting the weighted average number of shares outstanding in each quarter; and (ii) the uneven distribution of earnings during the year. Quarterly financial data (unaudited) were as follows (dollars in millions, except per share data): | ||||||||||||||||
2013 | 1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | ||||||||||||
Revenues | $ | 1,142.60 | $ | 1,081.50 | $ | 1,093.80 | $ | 1,158.20 | ||||||||
Income before income taxes | $ | 34.6 | $ | 114.7 | $ | 114.4 | $ | 41.1 | ||||||||
Income tax expense (benefit) | 22.7 | 37.6 | (168.6 | ) | (64.9 | ) | ||||||||||
Net income | $ | 11.9 | $ | 77.1 | $ | 283 | $ | 106 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income | $ | 0.05 | $ | 0.35 | $ | 1.27 | $ | 0.48 | ||||||||
Diluted: | ||||||||||||||||
Net income | $ | 0.05 | $ | 0.34 | $ | 1.23 | $ | 0.47 | ||||||||
2012 | 1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | ||||||||||||
Revenues | $ | 1,123.90 | $ | 1,065.00 | $ | 1,093.00 | $ | 1,060.80 | ||||||||
Income (loss) before income taxes | $ | 92.3 | $ | 104.5 | $ | (158.8 | ) | $ | 117.7 | |||||||
Income tax expense (benefit) | 33.2 | 38.8 | (153.8 | ) | 16.5 | |||||||||||
Net income (loss) | $ | 59.1 | $ | 65.7 | $ | (5.0 | ) | $ | 101.2 | |||||||
Earnings per common share: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income (loss) | $ | 0.25 | $ | 0.28 | $ | (.02 | ) | $ | 0.45 | |||||||
Diluted: | ||||||||||||||||
Net income (loss) | $ | 0.21 | $ | 0.24 | $ | (.02 | ) | $ | 0.41 | |||||||
INVESTMENTS_IN_VARIABLE_INTERE
INVESTMENTS IN VARIABLE INTEREST ENTITIES | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Investments in Variable Interest Entities [Abstract] | ' | |||||||||||
INVESTMENTS IN VARIABLE INTEREST ENTITIES | ' | |||||||||||
INVESTMENTS IN VARIABLE INTEREST ENTITIES | ||||||||||||
We have concluded that we are the primary beneficiary with respect to certain VIEs, which are consolidated in our financial statements. In consolidating the VIEs, we consistently use the financial information most recently distributed to investors in the VIE, which in one case, is less than two months prior to the end of our reporting period. The following is a description of our significant investments in VIEs. | ||||||||||||
All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments (including new VIEs which were consolidated in the first quarters of 2013 and 2012). The assets held by the trusts are legally isolated and not available to the Company. The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying loans held by the trusts, not from the assets of the Company. The scheduled repayment of the remaining principal balance of the borrowings related to the VIEs are as follows: $150.4 million in 2018; $492.0 million in 2022; and $381.8 million in 2024. The Company has no further commitments to the VIEs. | ||||||||||||
In the second quarter of 2011, one of the VIEs was liquidated and its obligations were repaid pursuant to the priority of payments as defined in the indenture of the VIE. Such liquidation did not have a material effect on our consolidated financial statements. In addition, in the second quarter of 2011, certain of our insurance subsidiaries invested in the formation of a new VIE which has been consolidated in our financial statements. | ||||||||||||
Certain of our insurance subsidiaries are noteholders of the VIEs. Another subsidiary of the Company is the investment manager for the VIEs. As such, it has the power to direct the most significant activities of the VIEs which materially impacts the economic performance of the VIEs. | ||||||||||||
The following table provides supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions): | ||||||||||||
December 31, 2013 | ||||||||||||
VIEs | Eliminations | Net effect on | ||||||||||
consolidated | ||||||||||||
balance sheet | ||||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 1,046.70 | $ | — | $ | 1,046.70 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | — | (108.5 | ) | (108.5 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 104.3 | — | 104.3 | |||||||||
Accrued investment income | 1.9 | — | 1.9 | |||||||||
Income tax assets, net | 5.4 | (2.5 | ) | 2.9 | ||||||||
Other assets | 22.6 | (.9 | ) | 21.7 | ||||||||
Total assets | $ | 1,180.90 | $ | (111.9 | ) | $ | 1,069.00 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 66 | $ | (4.0 | ) | $ | 62 | |||||
Borrowings related to variable interest entities | 1,012.30 | — | 1,012.30 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 112.5 | (112.5 | ) | — | ||||||||
Total liabilities | $ | 1,190.80 | $ | (116.5 | ) | $ | 1,074.30 | |||||
December 31, 2012 | ||||||||||||
VIEs | Eliminations | Net effect on | ||||||||||
consolidated | ||||||||||||
balance sheet | ||||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 814.3 | $ | — | $ | 814.3 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | — | (78.5 | ) | (78.5 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 54.2 | — | 54.2 | |||||||||
Accrued investment income | 1.8 | — | 1.8 | |||||||||
Income tax assets, net | 3.3 | (2.6 | ) | 0.7 | ||||||||
Other assets | 9.6 | — | 9.6 | |||||||||
Total assets | $ | 883.2 | $ | (81.1 | ) | $ | 802.1 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 39.9 | $ | (3.3 | ) | $ | 36.6 | |||||
Borrowings related to variable interest entities | 767 | — | 767 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 82.5 | (82.5 | ) | — | ||||||||
Total liabilities | $ | 889.4 | $ | (85.8 | ) | $ | 803.6 | |||||
The following table provides supplemental information about the revenues and expenses of the VIEs which have been consolidated in accordance with authoritative guidance, after giving effect to the elimination of our investment in the VIEs and investment management fees earned by a subsidiary of the Company (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Net investment income – policyholder and reinsurer accounts and other special-purpose portfolios | $ | 42.3 | $ | 31.3 | $ | 18.8 | ||||||
Fee revenue and other income | 1.8 | 1.6 | 1.2 | |||||||||
Total revenues | 44.1 | 32.9 | 20 | |||||||||
Expenses: | ||||||||||||
Interest expense | 26 | 20 | 11.8 | |||||||||
Other operating expenses | 1.4 | 0.6 | 0.7 | |||||||||
Total expenses | 27.4 | 20.6 | 12.5 | |||||||||
Income before net realized investment losses and income taxes | 16.7 | 12.3 | 7.5 | |||||||||
Net realized investment losses | (1.6 | ) | (.4 | ) | (1.3 | ) | ||||||
Income before income taxes | $ | 15.1 | $ | 11.9 | $ | 6.2 | ||||||
The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. At December 31, 2013, such loans had an amortized cost of $1,045.1 million; gross unrealized gains of $4.7 million; gross unrealized losses of $3.1 million; and an estimated fair value of $1,046.7 million. | ||||||||||||
The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. | ||||||||||||
Amortized | Estimated | |||||||||||
cost | fair | |||||||||||
value | ||||||||||||
(Dollars in millions) | ||||||||||||
Due in one year or less | $ | 6.5 | $ | 6.5 | ||||||||
Due after one year through five years | 355.8 | 357.3 | ||||||||||
Due after five years through ten years | 682.8 | 682.9 | ||||||||||
Total | $ | 1,045.10 | $ | 1,046.70 | ||||||||
The following table sets forth the amortized cost and estimated fair value of those investments held by the VIEs with unrealized losses at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. | ||||||||||||
Amortized | Estimated | |||||||||||
cost | fair | |||||||||||
value | ||||||||||||
(Dollars in millions) | ||||||||||||
Due in one year or less | $ | 2.8 | $ | 2.8 | ||||||||
Due after one year through five years | 103.1 | 102.7 | ||||||||||
Due after five years through ten years | 260.6 | 257.9 | ||||||||||
Total | $ | 366.5 | $ | 363.4 | ||||||||
There were no investments held by the VIEs rated below-investment grade which have been continuously in an unrealized loss position exceeding 20 percent of the cost basis as of December 31, 2013. | ||||||||||||
During 2013, we recognized net realized investment losses on the VIE investments of $1.6 million, which were comprised of $.5 million of net losses from the sales of fixed maturities, and $1.1 million of writedowns of investments for other than temporary declines in fair value recognized through net income. During 2012, we recognized net realized investment losses on the VIE investments of $.4 million, which were comprised of $.4 million of net gains from the sales of fixed maturities, and $.8 million of writedowns of investments for other than temporary declines in fair value recognized through net income. During 2011, we recognized net realized investment losses on the VIE investments of $1.3 million, which were comprised of $3.0 million of net gains from the sales of fixed maturities, and $4.3 million of writedowns of investments for other than temporary declines in fair value recognized through net income. | ||||||||||||
At December 31, 2013, there were no investments held by the VIEs that were in default. | ||||||||||||
During 2013, $11.1 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $.9 million. During 2012, $34.9 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $.3 million. During 2011, $27.5 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $2.7 million. | ||||||||||||
At December 31, 2013, the VIEs held: (i) investments with a fair value of $355.5 million and gross unrealized losses of $3.1 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $7.9 million and no gross unrealized losses that had been in an unrealized loss position for greater than twelve months. | ||||||||||||
At December 31, 2012, the VIEs held: (i) investments with a fair value of $114.1 million and gross unrealized losses of $.7 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $59.1 million and gross unrealized losses of $.9 million that had been in an unrealized loss position for greater than twelve months. | ||||||||||||
The investments held by the VIEs are evaluated for other-than-temporary declines in fair value in a manner that is consistent with the Company's fixed maturities, available for sale. | ||||||||||||
In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager. These structured securities include asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations. Our maximum exposure to loss on these securities is limited to our cost basis in the investment. We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses. | ||||||||||||
At December 31, 2013, we hold investments in various limited partnerships, in which we are not the primary beneficiary, totaling $19.7 million (classified as other invested assets). At December 31, 2013, we had unfunded commitments to these partnerships of $43.7 million. Our maximum exposure to loss on these investments is limited to the amount of our investment. |
SCHEDULE_II
SCHEDULE II | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||||||
Condensed Financial Information of Registrant (Parent Company) | ' | |||||||||||
SCHEDULE II | ||||||||||||
Condensed Financial Information of Registrant (Parent Company) | ||||||||||||
Balance Sheet | ||||||||||||
as of December 31, 2013 and 2012 | ||||||||||||
(Dollars in millions) | ||||||||||||
ASSETS | ||||||||||||
2013 | 2012 | |||||||||||
Fixed maturities, available for sale, at fair value (amortized cost: 2013 - $51.8; 2012 - $66.3) | $ | 51.7 | $ | 68.5 | ||||||||
Cash and cash equivalents - unrestricted | 131.1 | 165.7 | ||||||||||
Equity securities at fair value (cost: 2013 - $65.3; 2012 - $28.5) | 79.6 | 30 | ||||||||||
Trading securities | 2.1 | 2.3 | ||||||||||
Other invested assets | 22.2 | 26.3 | ||||||||||
Investment in wholly-owned subsidiaries (eliminated in consolidation) | 5,550.90 | 6,034.50 | ||||||||||
Income tax assets, net | 107.6 | — | ||||||||||
Other invested assets - affiliated (eliminated in consolidation) | 19.9 | — | ||||||||||
Receivable from subsidiaries (eliminated in consolidation) | 1.7 | 1.4 | ||||||||||
Other assets | 22.1 | 22.7 | ||||||||||
Total assets | $ | 5,988.90 | $ | 6,351.40 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Liabilities: | ||||||||||||
Notes payable | $ | 856.4 | $ | 1,004.20 | ||||||||
Payable to subsidiaries (eliminated in consolidation) | 108.7 | 110.9 | ||||||||||
Income tax liabilities, net | — | 105.6 | ||||||||||
Other liabilities | 68.6 | 81.4 | ||||||||||
Total liabilities | 1,033.70 | 1,302.10 | ||||||||||
Commitments and Contingencies | ||||||||||||
Shareholders' equity: | ||||||||||||
Common stock and additional paid-in capital ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2013 - 220,323,823; 2012 – 221,502,371) | 4,095.00 | 4,176.90 | ||||||||||
Accumulated other comprehensive income | 731.8 | 1,197.40 | ||||||||||
Retained earnings (accumulated deficit) | 128.4 | (325.0 | ) | |||||||||
Total shareholders' equity | 4,955.20 | 5,049.30 | ||||||||||
Total liabilities and shareholders' equity | $ | 5,988.90 | $ | 6,351.40 | ||||||||
The accompanying notes are an integral part | ||||||||||||
of the consolidated financial statements. | ||||||||||||
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES | ||||||||||||
SCHEDULE II | ||||||||||||
Condensed Financial Information of Registrant (Parent Company) | ||||||||||||
Statement of Operations | ||||||||||||
for the years ended December 31, 2013, 2012 and 2011 | ||||||||||||
(Dollars in millions) | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Net investment income (loss) | $ | 21.1 | $ | 22.3 | $ | (4.0 | ) | |||||
Net realized investment gains | 0.4 | 1.9 | 1 | |||||||||
Investment income from subsidiaries (eliminated in consolidation) | 1.6 | — | 0.2 | |||||||||
Total revenues | 23.1 | 24.2 | (2.8 | ) | ||||||||
Expenses: | ||||||||||||
Interest expense | 51.4 | 66.6 | 76.3 | |||||||||
Intercompany expenses (eliminated in consolidation) | 0.3 | 0.4 | 0.3 | |||||||||
Operating costs and expenses | 26.1 | 50.9 | 53.8 | |||||||||
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 | |||||||||
Total expenses | 143.2 | 318.1 | 133.8 | |||||||||
Loss before income taxes and equity in undistributed earnings of subsidiaries | (120.1 | ) | (293.9 | ) | (136.6 | ) | ||||||
Income tax benefit on period income | (8.8 | ) | (59.8 | ) | (42.2 | ) | ||||||
Loss before equity in undistributed earnings of subsidiaries | (111.3 | ) | (234.1 | ) | (94.4 | ) | ||||||
Equity in undistributed earnings of subsidiaries (eliminated in consolidation) | 589.3 | 455.1 | 430.1 | |||||||||
Net income | $ | 478 | $ | 221 | $ | 335.7 | ||||||
The accompanying notes are an integral part | ||||||||||||
of the consolidated financial statements. | ||||||||||||
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES | ||||||||||||
SCHEDULE II | ||||||||||||
Condensed Financial Information of Registrant (Parent Company) | ||||||||||||
Statement of Cash Flows | ||||||||||||
for the years ended December 31, 2013, 2012 and 2011 | ||||||||||||
(Dollars in millions) | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Cash flows used by operating activities | $ | (65.9 | ) | $ | (95.3 | ) | $ | (85.5 | ) | |||
Cash flows from investing activities: | ||||||||||||
Sales of investments | 95.8 | 159.7 | 1,422.90 | |||||||||
Sales of investments - affiliated* | — | — | 10 | |||||||||
Purchases of investments | (119.3 | ) | (145.0 | ) | (1,569.5 | ) | ||||||
Purchases of investments - affiliated* | (10.0 | ) | — | (10.0 | ) | |||||||
Net sales (purchases) of trading securities | 12.6 | 37.4 | (16.5 | ) | ||||||||
Dividends received from consolidated subsidiary, net of capital contributions* | 242.8 | 245 | 236 | |||||||||
Change in restricted cash | — | 26 | (26.0 | ) | ||||||||
Net cash provided by investing activities | 221.9 | 323.1 | 46.9 | |||||||||
Cash flows from financing activities: | ||||||||||||
Issuance of notes payable, net | — | 944.5 | — | |||||||||
Payments on notes payable | (126.9 | ) | (810.6 | ) | (144.8 | ) | ||||||
Issuance of common stock | 15.1 | 3.1 | 2.2 | |||||||||
Payments to repurchase common stock | (118.4 | ) | (180.2 | ) | (69.8 | ) | ||||||
Common stock dividends paid | (24.4 | ) | (13.9 | ) | — | |||||||
Expenses related to extinguishment of debt | (61.6 | ) | (183.0 | ) | — | |||||||
Amount paid to extinguish the beneficial conversion feature associated with repurchase of convertible debentures | (12.6 | ) | (24.0 | ) | — | |||||||
Investment borrowings - repurchase agreements, net | — | (24.8 | ) | 24.8 | ||||||||
Issuance of notes payable to affiliates* | 222.1 | 208.6 | 169.7 | |||||||||
Payments on notes payable to affiliates* | (83.9 | ) | (52.0 | ) | (33.3 | ) | ||||||
Net cash used by financing activities | (190.6 | ) | (132.3 | ) | (51.2 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | (34.6 | ) | 95.5 | (89.8 | ) | |||||||
Cash and cash equivalents, beginning of the year | 165.7 | 70.2 | 160 | |||||||||
Cash and cash equivalents, end of the year | $ | 131.1 | $ | 165.7 | $ | 70.2 | ||||||
* Eliminated in consolidation | ||||||||||||
The accompanying notes are an integral part | ||||||||||||
of the consolidated financial statements. | ||||||||||||
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES | ||||||||||||
SCHEDULE II | ||||||||||||
Notes to Condensed Financial Information | ||||||||||||
1. Basis of Presentation | ||||||||||||
The condensed financial information should be read in conjunction with the consolidated financial statements of CNO Financial Group, Inc. The condensed financial information includes the accounts and activity of the parent company. |
SCHEDULE_IV
SCHEDULE IV | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | ' | |||||||||||
Reinsurance | ' | |||||||||||
SCHEDULE IV | ||||||||||||
Reinsurance | ||||||||||||
for the years ended December 31, 2013, 2012 and 2011 | ||||||||||||
(Dollars in millions) | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Life insurance inforce: | ||||||||||||
Direct | $ | 53,304.90 | $ | 53,750.80 | $ | 56,540.10 | ||||||
Assumed | 305.7 | 325.7 | 349.3 | |||||||||
Ceded | (11,477.6 | ) | (12,392.4 | ) | (13,616.9 | ) | ||||||
Net insurance inforce | $ | 42,133.00 | $ | 41,684.10 | $ | 43,272.50 | ||||||
Percentage of assumed to net | 0.7 | % | 0.8 | % | 0.8 | % | ||||||
2013 | 2012 | 2011 | ||||||||||
Insurance policy income: | ||||||||||||
Direct | $ | 2,623.50 | $ | 2,591.10 | $ | 2,540.60 | ||||||
Assumed | 37.4 | 69.4 | 80.4 | |||||||||
Ceded | (212.1 | ) | (220.0 | ) | (238.1 | ) | ||||||
Net premiums | $ | 2,448.80 | $ | 2,440.50 | $ | 2,382.90 | ||||||
Percentage of assumed to net | 1.5 | % | 2.8 | % | 3.4 | % | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (POLICIES) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||||||
We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as net investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios)). | |||||||||||||||||||||||||||||||||
Equity securities include investments in common stock and non-redeemable preferred stock. We carry these investments at estimated fair value. We record any unrealized gain or loss, net of tax and related adjustments, as a component of shareholders' equity. | |||||||||||||||||||||||||||||||||
Mortgage loans held in our investment portfolio are carried at amortized unpaid balances, net of provisions for estimated losses. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Payment terms specified for mortgage loans may include a prepayment penalty for unscheduled payoff of the investment. Prepayment penalties are recognized as investment income when received. | |||||||||||||||||||||||||||||||||
Policy loans are stated at current unpaid principal balances. | |||||||||||||||||||||||||||||||||
Our trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; and (ii) investments supporting certain insurance liabilities (including investments backing the market strategies of our multibucket annuity products) and certain reinsurance agreements. The change in fair value of these securities is recognized in income from policyholder and reinsurer accounts and other special-purpose portfolios (a component of net investment income). Investment income from trading securities backing certain insurance liabilities and certain reinsurance agreements is substantially offset by the change in insurance policy benefits related to certain products and agreements. The trading account also includes certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option. The change in value of these securities is recognized in realized investment gains (losses). Prior to June 30, 2011, certain of our trading securities were held to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio. See the section of this note entitled "Accounting for Derivatives" for further discussion regarding these embedded derivatives. The change in value of these securities is recognized in realized investment gains (losses). Our trading securities totaled $247.6 million and $266.2 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Other invested assets include: (i) call options purchased in an effort to offset or hedge the effects of certain policyholder benefits related to our fixed index annuity and life insurance products; (ii) Company-owned life insurance ("COLI"); and (iii) certain non-traditional investments. We carry the call options at estimated fair value as further described in the section of this note entitled "Accounting for Derivatives". We carry COLI at its cash surrender value which approximates its net realizable value. Non-traditional investments include investments in certain limited partnerships, which are accounted for using the equity method; promissory notes, which are accounted for using the cost method; and investments in certain hedge funds that are carried at estimated fair value. In applying the equity method of accounting, we consistently use the most recently available financial information provided by the general partner or manager of each of these investments, which is one to three months prior to the end of our reporting period. | |||||||||||||||||||||||||||||||||
We defer any fees received or costs incurred when we originate investments. We amortize fees, costs, discounts and premiums as yield adjustments over the contractual lives of the investments without anticipation of prepayments. We consider anticipated prepayments on mortgage-backed securities in determining estimated future yields on such securities. | |||||||||||||||||||||||||||||||||
When we sell a security (other than trading securities), we report the difference between the sale proceeds and amortized cost (determined based on specific identification) as a realized investment gain or loss. | |||||||||||||||||||||||||||||||||
We regularly evaluate our investments for possible impairment as further described in the note to the consolidated financial statements entitled "Investments". | |||||||||||||||||||||||||||||||||
When a security defaults (including mortgage loans) or securities (other than structured securities) are other-than-temporarily impaired, our policy is to discontinue the accrual of interest and eliminate all previous interest accruals, if we determine that such amounts will not be ultimately realized in full. | |||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||||||||||
Cash and cash equivalents include commercial paper, invested cash and other investments purchased with original maturities of less than three months. We carry them at amortized cost, which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Deferred Acquisition Costs | ' | ||||||||||||||||||||||||||||||||
Deferred Acquisition Costs | |||||||||||||||||||||||||||||||||
Deferred acquisition costs represent incremental direct costs related to the successful acquisition of new or renewal insurance contracts. For interest-sensitive life or annuity products, we amortize these costs in relation to the estimated gross profits using the interest rate credited to the underlying policies. For other products, we amortize these costs in relation to future anticipated premium revenue using the projected investment earnings rate. | |||||||||||||||||||||||||||||||||
When we realize a gain or loss on investments backing our interest-sensitive life or annuity products, we adjust the amortization to reflect the change in estimated gross profits from the products due to the gain or loss realized and the effect on future investment yields. We also adjust deferred acquisition costs for the change in amortization that would have been recorded if our fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. We limit the total adjustment related to the impact of unrealized losses to the total of costs capitalized plus interest related to insurance policies issued in a particular year. We include the impact of this adjustment in accumulated other comprehensive income (loss) within shareholders' equity. | |||||||||||||||||||||||||||||||||
We regularly evaluate the recoverability of the unamortized balance of the deferred acquisition costs. We consider estimated future gross profits or future premiums, expected mortality or morbidity, interest earned and credited rates, persistency and expenses in determining whether the balance is recoverable. If we determine a portion of the unamortized balance is not recoverable, it is charged to amortization expense. In certain cases, the unamortized balance of the deferred acquisition costs may not be deficient in the aggregate, but our estimates of future earnings indicate that profits would be recognized in early periods and losses in later periods. In this case, we increase the amortization of the deferred acquisition costs over the period of profits, by an amount necessary to offset losses that are expected to be recognized in the later years. | |||||||||||||||||||||||||||||||||
Refer to the caption "Recently Issued Accounting Standards - Accounting Standard Adopted on a Retrospective Basis" for further information regarding the impact of adoption. | |||||||||||||||||||||||||||||||||
Present Value of Future Profits | ' | ||||||||||||||||||||||||||||||||
Present Value of Future Profits | |||||||||||||||||||||||||||||||||
The present value of future profits is the value assigned to the right to receive future cash flows from policyholder insurance contracts existing at September 10, 2003 (the "Effective Date", the effective date of the bankruptcy reorganization of Conseco, Inc., an Indiana corporation (our "Predecessor")). The discount rate we used to determine the present value of future profits was 12 percent. The balance of this account is amortized and evaluated for recovery in the same manner as described above for deferred acquisition costs. We also adjust the present value of future profits for the change in amortization that would have been recorded if the fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields, similar to the manner described above for deferred acquisition costs. We limit the total adjustment related to the impact of unrealized losses to the total present value of future profits plus interest. | |||||||||||||||||||||||||||||||||
Assets Held in Separate Accounts | ' | ||||||||||||||||||||||||||||||||
Assets Held in Separate Accounts | |||||||||||||||||||||||||||||||||
Separate accounts are funds on which investment income and gains or losses accrue directly to certain policyholders. The assets of these accounts are legally segregated. They are not subject to the claims that may arise out of any other business of CNO. We report separate account assets at fair value; the underlying investment risks are assumed by the contractholders. We record the related liabilities at amounts equal to the separate account assets. We record the fees earned for administrative and contractholder services performed for the separate accounts in insurance policy income. | |||||||||||||||||||||||||||||||||
Recognition of Insurance Policy Income and Related Benefits and Expenses on Insurance Contracts | ' | ||||||||||||||||||||||||||||||||
Recognition of Insurance Policy Income and Related Benefits and Expenses on Insurance Contracts | |||||||||||||||||||||||||||||||||
For interest-sensitive life and annuity contracts that do not involve significant mortality or morbidity risk, the amounts collected from policyholders are considered deposits and are not included in revenue. Revenues for these contracts consist of charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders' account balances. Such revenues are recognized when the service or coverage is provided, or when the policy is surrendered. | |||||||||||||||||||||||||||||||||
We establish liabilities for annuity and interest-sensitive life products equal to the accumulated policy account values, which include an accumulation of deposit payments plus credited interest, less withdrawals and the amounts assessed against the policyholder through the end of the period. In addition, policyholder account values for certain interest-sensitive life products are impacted by our assumptions related to changes of certain non-guaranteed elements that we are allowed to make under the terms of the policy, such as cost of insurance charges, expense loads, credited interest rates and policyholder bonuses. Sales inducements provided to the policyholders of these products are recognized as liabilities over the period that the contract must remain in force to qualify for the inducement. The options attributed to the policyholder related to our fixed index annuity products are accounted for as embedded derivatives as described in the section of this note entitled "Accounting for Derivatives". | |||||||||||||||||||||||||||||||||
Premiums from individual life products (other than interest-sensitive life contracts), and health products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. | |||||||||||||||||||||||||||||||||
We establish liabilities for traditional life, accident and health insurance, and life contingent payment annuity products using mortality tables in general use in the United States, which are modified to reflect the Company's actual experience when appropriate. We establish liabilities for accident and health insurance products using morbidity tables based on the Company's actual or expected experience. These reserves are computed at amounts that, with additions from estimated future premiums received and with interest on such reserves at estimated future rates, are expected to be sufficient to meet our obligations under the terms of the policy. Liabilities for future policy benefits are computed on a net-level premium method based upon assumptions as to future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses determined when the policies were issued (or with respect to policies inforce at August 31, 2003, the Company's best estimate of such assumptions on the Effective Date). We make an additional provision to allow for potential adverse deviation for some of our assumptions. Once established, assumptions on these products are generally not changed unless a premium deficiency exists. In that case, a premium deficiency reserve is recognized and the future pattern of reserve changes is modified to reflect the relationship of premiums to benefits based on the current best estimate of future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses, determined without an additional provision for potential adverse deviation. | |||||||||||||||||||||||||||||||||
We establish claim reserves based on our estimate of the loss to be incurred on reported claims plus estimates of incurred but unreported claims based on our past experience. | |||||||||||||||||||||||||||||||||
Accounting for Long-term Care Premium Rate Increases | ' | ||||||||||||||||||||||||||||||||
Accounting for Long-term Care Premium Rate Increases | |||||||||||||||||||||||||||||||||
Many of our long-term care policies have been subject to premium rate increases. In some cases, these premium rate increases were materially consistent with the assumptions we used to value the particular block of business at the Effective Date. With respect to certain premium rate increases, some of our policyholders were provided an option to cease paying their premiums and receive a non-forfeiture option in the form of a paid-up policy with limited benefits. In addition, our policyholders could choose to reduce their coverage amounts and premiums in the same proportion, when permitted by our contracts or as required by regulators. The following describes how we account for these policyholder options: | |||||||||||||||||||||||||||||||||
• | Premium rate increases - If premium rate increases reflect a change in our previous rate increase assumptions, the new assumptions are not reflected prospectively in our reserves. Instead, the additional premium revenue resulting from the rate increase is recognized as earned and original assumptions continue to be used to determine changes to liabilities for insurance products unless a premium deficiency exists. | ||||||||||||||||||||||||||||||||
• | Benefit reductions - A policyholder may choose reduced coverage with a proportionate reduction in premium, when permitted by our contracts. This option does not require additional underwriting. Benefit reductions are treated as a partial lapse of coverage, and the balance of our reserves and deferred insurance acquisition costs is reduced in proportion to the reduced coverage. | ||||||||||||||||||||||||||||||||
• | Non-forfeiture benefits offered in conjunction with a rate increase - In some cases, non-forfeiture benefits are offered to policyholders who wish to lapse their policies at the time of a significant rate increase. In these cases, exercise of this option is treated as an extinguishment of the original contract and issuance of a new contract. The balance of our reserves and deferred insurance acquisition costs are released, and a reserve for the new contract is established. | ||||||||||||||||||||||||||||||||
Some of our policyholders may receive a non-forfeiture benefit if they cease paying their premiums pursuant to their original contract (or pursuant to changes made to their original contract as a result of a litigation settlement made prior to the Effective Date or an order issued by the Florida Office of Insurance Regulation). In these cases, exercise of this option is treated as the exercise of a policy benefit, and the reserve for premium paying benefits is reduced, and the reserve for the non-forfeiture benefit is adjusted to reflect the election of this benefit. | |||||||||||||||||||||||||||||||||
Reinsurance Accounting Policy | ' | ||||||||||||||||||||||||||||||||
Accounting for Marketing and Reinsurance Agreements with Other Parties | |||||||||||||||||||||||||||||||||
Bankers Life has entered into various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute prescription drug and Medicare Advantage plans. These agreements allow Bankers to offer these products to current and potential future policyholders without investment in management and infrastructure. We receive fee income related to the plans sold through our distribution channels. We account for these distribution agreements as follows: | |||||||||||||||||||||||||||||||||
• | We recognize distribution income based on either: (i) a fixed fee per contract sold; or (ii) a percentage of premiums collected. This fee income is recognized over the calendar year term of the contract. | ||||||||||||||||||||||||||||||||
• | We also pay commissions to our agents who sell the plans. These payments are deferred and amortized over the term of the contract. | ||||||||||||||||||||||||||||||||
Prior to its termination in August 2013, we had a quota-share reinsurance agreement with an insurance company that provided Bankers Life with 50 percent of the net premiums and related policy benefits of certain PDP business sold through Bankers Life's career agency force. We accounted for the quota-share agreement as follows: | |||||||||||||||||||||||||||||||||
• | We recognized premium revenue evenly over the period of the underlying Medicare Part D contracts. | ||||||||||||||||||||||||||||||||
• | We recognized policyholder benefits and assumed commission expense as incurred. | ||||||||||||||||||||||||||||||||
• | We recognized risk-share premium adjustments consistent with Coventry's risk-share agreement with the Centers for Medicare and Medicaid Services. | ||||||||||||||||||||||||||||||||
Reinsurance | |||||||||||||||||||||||||||||||||
In the normal course of business, we seek to limit our loss exposure on any single insured or to certain groups of policies by ceding reinsurance to other insurance enterprises. We currently retain no more than $.8 million of mortality risk on any one policy. We diversify the risk of reinsurance loss by using a number of reinsurers that have strong claims-paying ratings. In each case, the ceding CNO subsidiary is directly liable for claims reinsured in the event the assuming company is unable to pay. | |||||||||||||||||||||||||||||||||
The cost of reinsurance on life and health coverages is recognized over the life of the reinsured policies using assumptions consistent with those used to account for the underlying policy. The cost of reinsurance ceded totaled $212.1 million, $220.0 million and $238.1 million in 2013, 2012 and 2011, respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $196.2 million, $210.2 million and $204.9 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||
From time-to-time, we assume insurance from other companies. Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs described above. Reinsurance premiums assumed totaled $37.4 million, $69.4 million and $80.4 million in 2013, 2012 and 2011, respectively. Reinsurance premiums included amounts assumed pursuant to marketing and quota-share agreements with Coventry of $19.7 million, $49.9 million and $58.1 million in 2013, 2012 and 2011, respectively. As further described above, we received a notice of Coventry's intent to terminate the PDP quota-share reinsurance agreement in August 2013. | |||||||||||||||||||||||||||||||||
In December 2013, two of our insurance subsidiaries with long-term care business in the Other CNO Business segment entered into 100% coinsurance agreements ceding $495 million of long-term care reserves to Beechwood Re Ltd. ("BRe"). Pursuant to the agreements, the insurance subsidiaries will pay an additional premium of $96.9 million to BRe and an amount equal to the related net liabilities. The insurance subsidiaries' ceded reserve credits will be secured by assets in market-value trusts subject to a 7% over-collateralization, investment guidelines and periodic true-up provisions. Future payments into the trusts to maintain collateral requirements are the responsibility of BRe. All required regulatory approvals for the transaction have been received. We evaluate this block separately to determine whether aggregate liabilities are deficient. We recognized a pre-tax loss of $98.4 million to reflect: (i) the known loss (or premium deficiency) on the business, as we will not be recognizing additional income in future periods to recover the unamortized additional premium which will be paid to BRe; and (ii) other transaction costs. | |||||||||||||||||||||||||||||||||
See the section of this note entitled "Accounting for Derivatives" for a discussion of the derivative embedded in the payable related to certain modified coinsurance agreements. | |||||||||||||||||||||||||||||||||
Income Taxes | ' | ||||||||||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||||||||||
Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and net operating loss carryforwards ("NOLs"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. | |||||||||||||||||||||||||||||||||
A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred tax assets on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible and before our capital loss carryforwards and NOLs expire. | |||||||||||||||||||||||||||||||||
Investments in Variable Interest Entities | ' | ||||||||||||||||||||||||||||||||
Investments in Variable Interest Entities | |||||||||||||||||||||||||||||||||
We have concluded that we are the primary beneficiary with respect to certain variable interest entities ("VIEs"), which are consolidated in our financial statements. The following is a description of our significant investments in VIEs: | |||||||||||||||||||||||||||||||||
All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments (including new VIEs which were consolidated in the first quarters of 2013 and 2012). The assets held by the trusts are legally isolated and not available to the Company. The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying investments held by the trusts, not from the assets of the Company. The Company has no further commitments to the VIEs. | |||||||||||||||||||||||||||||||||
The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. Refer to the note to the consolidated financial statements entitled "Investments in Variable Interest Entities" for additional information about VIEs. | |||||||||||||||||||||||||||||||||
Investment Borrowings | ' | ||||||||||||||||||||||||||||||||
Investment Borrowings | |||||||||||||||||||||||||||||||||
Three of the Company's insurance subsidiaries (Conseco Life, Washington National and Bankers Life) are members of the Federal Home Loan Bank ("FHLB"). As members of the FHLB, Conseco Life, Washington National and Bankers Life have the ability to borrow on a collateralized basis from the FHLB. Conseco Life, Washington National and Bankers Life are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. At December 31, 2013, the carrying value of the FHLB common stock was $93.5 million. As of December 31, 2013, collateralized borrowings from the FHLB totaled $1.9 billion and the proceeds were used to purchase fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $2.4 billion at December 31, 2013, which are maintained in a custodial account for the benefit of the FHLB. Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet. Interest expense of $27.9 million, $28.0 million and $25.7 million in 2013, 2012 and 2011, respectively, was recognized related to the borrowings. | |||||||||||||||||||||||||||||||||
The following summarizes the terms of the borrowings (dollars in millions): | |||||||||||||||||||||||||||||||||
Amount | Maturity | Interest rate at | |||||||||||||||||||||||||||||||
borrowed | date | December 31, 2013 | |||||||||||||||||||||||||||||||
$ | 67 | Feb-14 | Fixed rate – 1.830% | ||||||||||||||||||||||||||||||
50 | Sep-15 | Variable rate – 0.538% | |||||||||||||||||||||||||||||||
150 | Oct-15 | Variable rate – 0.517% | |||||||||||||||||||||||||||||||
100 | Nov-15 | Variable rate – 0.318% | |||||||||||||||||||||||||||||||
146 | Nov-15 | Fixed rate – 5.300% | |||||||||||||||||||||||||||||||
100 | Dec-15 | Fixed rate – 4.710% | |||||||||||||||||||||||||||||||
100 | Jun-16 | Variable rate – 0.605% | |||||||||||||||||||||||||||||||
75 | Jun-16 | Variable rate – 0.407% | |||||||||||||||||||||||||||||||
100 | Oct-16 | Variable rate – 0.426% | |||||||||||||||||||||||||||||||
50 | Nov-16 | Variable rate – 0.511% | |||||||||||||||||||||||||||||||
50 | Nov-16 | Variable rate – 0.635% | |||||||||||||||||||||||||||||||
57.7 | Jun-17 | Variable rate – 0.598% | |||||||||||||||||||||||||||||||
100 | Jul-17 | Fixed rate – 3.900% | |||||||||||||||||||||||||||||||
50 | Aug-17 | Variable rate – 0.441% | |||||||||||||||||||||||||||||||
75 | Aug-17 | Variable rate – 0.388% | |||||||||||||||||||||||||||||||
100 | Oct-17 | Variable rate – 0.674% | |||||||||||||||||||||||||||||||
37 | Nov-17 | Fixed rate – 3.750% | |||||||||||||||||||||||||||||||
50 | Nov-17 | Variable rate – 0.747% | |||||||||||||||||||||||||||||||
50 | Jan-18 | Variable rate – 0.596% | |||||||||||||||||||||||||||||||
50 | Jan-18 | Variable rate – 0.579% | |||||||||||||||||||||||||||||||
50 | Feb-18 | Variable rate – 0.548% | |||||||||||||||||||||||||||||||
22 | Feb-18 | Variable rate – 0.567% | |||||||||||||||||||||||||||||||
100 | May-18 | Variable rate – 0.617% | |||||||||||||||||||||||||||||||
50 | Jul-18 | Variable rate – 0.708% | |||||||||||||||||||||||||||||||
50 | Aug-18 | Variable rate – 0.361% | |||||||||||||||||||||||||||||||
21.8 | Jun-20 | Fixed rate – 1.960% | |||||||||||||||||||||||||||||||
27.5 | Mar-23 | Fixed rate – 2.160% | |||||||||||||||||||||||||||||||
20.5 | Jun-25 | Fixed rate – 2.940% | |||||||||||||||||||||||||||||||
$ | 1,899.50 | ||||||||||||||||||||||||||||||||
The variable rate borrowings are pre-payable on each interest reset date without penalty. The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on current market interest rates. At December 31, 2013, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $48.5 million. | |||||||||||||||||||||||||||||||||
As part of our investment strategy, we may enter into repurchase agreements to increase our investment return. Pursuant to such agreements, the Company sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. We had no such borrowings outstanding at December 31, 2013 and 2012. | |||||||||||||||||||||||||||||||||
The primary risks associated with short-term collateralized borrowings are: (i) a substantial decline in the market value of the margined security; and (ii) that a counterparty may be unable to perform under the terms of the contract or be unwilling to extend such financing in future periods especially if the liquidity or value of the margined security has declined. Exposure is limited to any depreciation in value of the related securities. | |||||||||||||||||||||||||||||||||
Accounting for Derivatives | ' | ||||||||||||||||||||||||||||||||
Accounting for Derivatives | |||||||||||||||||||||||||||||||||
Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period. Typically, on each policy anniversary date, a new index period begins. We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums. We typically buy call options (including call spreads) referenced to the applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked. We reflect changes in the estimated fair value of these options in net investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios). Net investment gains (losses) related to fixed index products were $177.5 million, $25.5 million and $(21.2) million in 2013, 2012 and 2011, respectively. These amounts were substantially offset by a corresponding change to insurance policy benefits. The estimated fair value of these options was $156.2 million and $54.4 million at December 31, 2013 and 2012, respectively. We classify these instruments as other invested assets. | |||||||||||||||||||||||||||||||||
The Company accounts for the options attributed to the policyholder for the estimated life of the annuity contract as embedded derivatives. The Company purchases options to hedge liabilities for the next policy period approximately on each policy anniversary date and must estimate the fair value of the forward embedded options related to the policies. These accounting requirements often create volatility in the earnings from these products. We record the changes in the fair values of the embedded derivatives in earnings as a component of insurance policy benefits. The fair value of these derivatives, which are classified as "liabilities for interest-sensitive products", was $903.7 million and $734.0 million at December 31, 2013 and 2012, respectively. Prior to June 30, 2011, we maintained a specific block of investments in our trading securities account (which we carried at estimated fair value with changes in such value recognized as investment income from policyholder and reinsurer accounts and other special-purpose portfolios) to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio. We recognized an increase (decrease) to earnings of $35.4 million, $(2.8) million and $(20.4) million in 2013, 2012 and 2011, respectively, from the volatility caused by the accounting requirements to record embedded options at fair value. | |||||||||||||||||||||||||||||||||
If the counterparties for the call options we hold fail to meet their obligations, we may have to recognize a loss. We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy. At December 31, 2013, substantially all of our counterparties were rated "BBB+" or higher by Standard & Poor's Corporation ("S&P"). | |||||||||||||||||||||||||||||||||
Certain of our reinsurance payable balances contain embedded derivatives. Such derivatives had an estimated fair value of $1.8 million and $5.5 million at December 31, 2013 and 2012, respectively. We record the change in the fair value of these derivatives as a component of investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios). We maintain the investments related to these agreements in our trading securities account, which we carry at estimated fair value with changes in such value recognized as investment income (also classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios). The change in value of these trading securities offsets the change in value of the embedded derivatives. | |||||||||||||||||||||||||||||||||
We purchase certain fixed maturity securities that contain embedded derivatives that are required to be bifurcated from the instrument and held at fair value on the consolidated balance sheet. For certain of these securities, we have elected the fair value option to carry the entire security at fair value with changes in fair value reported in net income for operational ease. Such securities totaled $180.6 million and $196.6 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Multibucket Annuity Product | ' | ||||||||||||||||||||||||||||||||
Multibucket Annuity Product | |||||||||||||||||||||||||||||||||
The Company's multibucket annuity is an annuity product that credits interest based on the experience of a particular market strategy. Policyholders allocate their annuity premium payments to several different market strategies based on different asset classes within the Company's investment portfolio. Interest is credited to this product based on the market return of the given strategy, less management fees, and funds may be moved between different strategies. The Company guarantees a minimum return of premium plus approximately 3 percent per annum over the life of the contract. The investments backing the market strategies of these products are designated by the Company as trading securities. The change in the fair value of these securities is recognized as investment income (classified as income from policyholder and reinsurer accounts and other special-purpose portfolios), which is substantially offset by the change in insurance policy benefits for these products. | |||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price. We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, cash and cash equivalents, separate account assets and embedded derivatives. We carry our company-owned life insurance policy, which is backed by a series of mutual funds, at its cash surrender value and our hedge fund investments at their net asset values; in both cases, we believe these values approximate their fair values. In addition, we disclose fair value for certain financial instruments, including mortgage loans and policy loans, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs. | |||||||||||||||||||||||||||||||||
The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value. Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value. | |||||||||||||||||||||||||||||||||
Valuation Hierarchy | |||||||||||||||||||||||||||||||||
There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable. | |||||||||||||||||||||||||||||||||
• | Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets primarily include cash and exchange traded securities. | ||||||||||||||||||||||||||||||||
• | Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data. Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies. These models consider various inputs such as interest rate, credit or issuer spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial assets in this category primarily include: certain public and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund and hedge fund investments; and most short-term investments; and non-exchange-traded derivatives such as call options to hedge liabilities related to our fixed index annuity products. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs. | ||||||||||||||||||||||||||||||||
• | Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions. Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information. Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities. Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions. | ||||||||||||||||||||||||||||||||
At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. Any transfers between levels are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in 2013 and 2012. | |||||||||||||||||||||||||||||||||
The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value. Substantially all of our Level 2 fixed maturity securities and separate account assets were valued from independent pricing services. Third party pricing services normally derive the security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recently reported trades, the third party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate. The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below. | |||||||||||||||||||||||||||||||||
For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes. These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs. Approximately 18 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs. The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs. For these securities, we use internally developed valuations. Key assumptions used to determine fair value for these securities may include risk-free rates, risk premiums, performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market. For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate. The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating and other factors relating to the issuer and the security's maturity. In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity. | |||||||||||||||||||||||||||||||||
As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. The Company's analysis includes: (i) a review of the methodology used by third party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude the prices received from third parties are not reflective of current market conditions. In those instances, we may request additional pricing quotes or apply internally developed valuations. However, the number of instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. | |||||||||||||||||||||||||||||||||
The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes. Such inputs include: benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments. | |||||||||||||||||||||||||||||||||
The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotations; time value and volatility factors underlying options; market interest rates; and non-performance risk. For certain embedded derivatives, we use actuarial assumptions in the determination of fair value. | |||||||||||||||||||||||||||||||||
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2013 is as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | Total | ||||||||||||||||||||||||||||||
for identical assets or liabilities | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | — | $ | 15,313.80 | $ | 359.6 | $ | 15,673.40 | |||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 73.1 | — | 73.1 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 2,204.40 | — | 2,204.40 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 1,419.90 | 42.2 | 1,462.10 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | 47.3 | 246.7 | 294 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,609.00 | — | 1,609.00 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 11.8 | 1.6 | 13.4 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 1,848.90 | — | 1,848.90 | |||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 22,528.20 | 650.1 | 23,178.30 | |||||||||||||||||||||||||||||
Equity securities - corporate securities | 79.6 | 145.2 | 24.5 | 249.3 | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | 45.2 | — | 45.2 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.6 | — | 4.6 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 14.1 | — | 14.1 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 24.3 | — | 24.3 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 125.8 | — | 125.8 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 31.1 | — | 31.1 | |||||||||||||||||||||||||||||
Equity securities | 2.4 | — | — | 2.4 | |||||||||||||||||||||||||||||
Total trading securities | 2.4 | 245.2 | — | 247.6 | |||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 1,046.70 | — | 1,046.70 | |||||||||||||||||||||||||||||
Other invested assets - derivatives | 0.6 | 156.2 | — | 156.8 | |||||||||||||||||||||||||||||
Assets held in separate accounts | — | 10.3 | — | 10.3 | |||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 82.6 | $ | 24,131.80 | $ | 674.6 | $ | 24,889.00 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | — | — | 903.7 | 903.7 | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | — | 1.8 | 1.8 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 905.5 | 905.5 | |||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 905.5 | $ | 905.5 | |||||||||||||||||||||||||
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2012 is as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | Total | ||||||||||||||||||||||||||||||
for identical assets or liabilities | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | — | $ | 16,498.60 | $ | 355.5 | $ | 16,854.10 | |||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 99.5 | — | 99.5 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 2,115.00 | 13.1 | 2,128.10 | |||||||||||||||||||||||||||||
Debt securities issued by foreign governments | — | 0.8 | — | 0.8 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 1,416.90 | 44 | 1,460.90 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | — | 324 | 324 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,471.20 | 6.2 | 1,477.40 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 19.9 | 1.9 | 21.8 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 2,230.60 | 16.9 | 2,247.50 | |||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 23,852.50 | 761.6 | 24,614.10 | |||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 49.7 | 118.8 | 0.1 | 168.6 | |||||||||||||||||||||||||||||
Venture capital investments | — | — | 2.8 | 2.8 | |||||||||||||||||||||||||||||
Total equity securities | 49.7 | 118.8 | 2.9 | 171.4 | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | 46.6 | — | 46.6 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.8 | — | 4.8 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 14 | 0.6 | 14.6 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 50.1 | — | 50.1 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | — | 7.3 | 7.3 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 93.3 | — | 93.3 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 41.2 | 5.8 | 47 | |||||||||||||||||||||||||||||
Equity securities | 0.9 | 1.5 | — | 2.4 | |||||||||||||||||||||||||||||
Total trading securities | 0.9 | 251.6 | 13.7 | 266.2 | |||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 814.3 | — | 814.3 | |||||||||||||||||||||||||||||
Other invested assets - derivatives | — | 54.4 | — | 54.4 | |||||||||||||||||||||||||||||
Assets held in separate accounts | — | 14.9 | — | 14.9 | |||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 50.6 | $ | 25,106.50 | $ | 778.2 | $ | 25,935.30 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | — | — | 734 | 734 | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | — | 5.5 | 5.5 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 739.5 | 739.5 | |||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 739.5 | $ | 739.5 | |||||||||||||||||||||||||
For those financial instruments disclosed at fair value, we use the following methods and assumptions to determine the estimated fair values: | |||||||||||||||||||||||||||||||||
Mortgage loans and policy loans. We discount future expected cash flows for loans included in our investment portfolio based on interest rates currently being offered for similar loans to borrowers with similar credit ratings. We aggregate loans with similar characteristics in our calculations. The fair value of policy loans approximates their carrying value. | |||||||||||||||||||||||||||||||||
Company-owned life insurance is backed by a series of mutual funds and is carried at cash surrender value which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Hedge fund investments are carried at their net asset values which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Cash and cash equivalents include commercial paper, invested cash and other investments purchased with original maturities of less than three months. We carry them at amortized cost, which approximates estimated fair value. | |||||||||||||||||||||||||||||||||
Liabilities for policyholder account balances. We discount future expected cash flows based on interest rates currently being offered for similar contracts with similar maturities. | |||||||||||||||||||||||||||||||||
Investment borrowings, notes payable and borrowings related to variable interest entities. For publicly traded debt, we use current fair values. For other notes, we use discounted cash flow analyses based on our current incremental borrowing rates for similar types of borrowing arrangements. | |||||||||||||||||||||||||||||||||
The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets or liabilities | Significant other observable inputs | Significant unobservable inputs | Total estimated fair value | Total carrying amount | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,749.50 | $ | 1,749.50 | $ | 1,729.50 | |||||||||||||||||||||||
Policy loans | — | — | 277 | 277 | 277 | ||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 144.8 | — | 144.8 | 144.8 | ||||||||||||||||||||||||||||
Hedge funds | — | 67.6 | — | 67.6 | 67.6 | ||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||
Unrestricted | 457.8 | 241.2 | — | 699 | 699 | ||||||||||||||||||||||||||||
Held by variable interest entities | 104.3 | — | — | 104.3 | 104.3 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 12,776.40 | 12,776.40 | 12,776.40 | ||||||||||||||||||||||||||||
Investment borrowings | — | 1,948.50 | — | 1,948.50 | 1,900.00 | ||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 993.7 | — | 993.7 | 1,012.30 | ||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 872.5 | — | 872.5 | 856.4 | ||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets or liabilities | Significant other observable inputs | Significant unobservable inputs | Total estimated fair value | Total carrying amount | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,682.10 | $ | 1,682.10 | $ | 1,573.20 | |||||||||||||||||||||||
Policy loans | — | — | 272 | 272 | 272 | ||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 123 | — | 123 | 123 | ||||||||||||||||||||||||||||
Hedge funds | — | 16.1 | — | 16.1 | 16.1 | ||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||
Unrestricted | 432.3 | 150.2 | — | 582.5 | 582.5 | ||||||||||||||||||||||||||||
Held by variable interest entities | 54.2 | — | — | 54.2 | 54.2 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 12,913.10 | 12,913.10 | 12,913.10 | ||||||||||||||||||||||||||||
Investment borrowings | — | 1,702.00 | — | 1,702.00 | 1,650.80 | ||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 752.2 | — | 752.2 | 767 | ||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 1,100.30 | — | 1,100.30 | 1,004.20 | ||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||
(a) | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at December 31, 2013 and 2012. This was because interest rates credited on the vast majority of account balances approximate current rates paid on similar products and because these rates are not generally guaranteed beyond one year. | ||||||||||||||||||||||||||||||||
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | Purchases, sales, issuances and settlements, net (b) | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (a) | Ending balance as of December 31, 2013 | Amount of total gains (losses) for the year ended December 31, 2013 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 355.5 | $ | 34 | $ | (.3 | ) | $ | (9.8 | ) | $ | 13.2 | $ | (33.0 | ) | $ | 359.6 | $ | — | ||||||||||||||
States and political subdivisions | 13.1 | — | — | — | — | (13.1 | ) | — | — | ||||||||||||||||||||||||
Asset-backed securities | 44 | 1.6 | 0.1 | (3.6 | ) | 0.1 | — | 42.2 | — | ||||||||||||||||||||||||
Collateralized debt obligations | 324 | (85.4 | ) | 0.2 | 7.9 | — | — | 246.7 | — | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 6.2 | — | — | — | — | (6.2 | ) | — | — | ||||||||||||||||||||||||
Mortgage pass-through securities | 1.9 | (.3 | ) | — | — | — | — | 1.6 | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | 16.9 | — | — | — | — | (16.9 | ) | — | — | ||||||||||||||||||||||||
Total fixed maturities, available for sale | 761.6 | (50.1 | ) | — | (5.5 | ) | 13.3 | (69.2 | ) | 650.1 | — | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | 24.5 | — | (.1 | ) | — | — | 24.5 | — | ||||||||||||||||||||||||
Venture capital investments | 2.8 | — | (2.5 | ) | (.3 | ) | — | — | — | — | |||||||||||||||||||||||
Total equity securities | 2.9 | 24.5 | (2.5 | ) | (.4 | ) | — | — | 24.5 | — | |||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||
Collateralized debt obligations | 7.3 | (7.7 | ) | 0.6 | (.2 | ) | — | — | — | (.2 | ) | ||||||||||||||||||||||
Collateralized mortgage obligations | 5.8 | — | — | — | — | (5.8 | ) | — | — | ||||||||||||||||||||||||
Total trading securities | 13.7 | (7.7 | ) | 0.6 | (.2 | ) | — | (6.4 | ) | — | (.2 | ) | |||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (734.0 | ) | (219.0 | ) | 49.3 | — | — | — | (903.7 | ) | 49.3 | ||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.5 | ) | 3.7 | — | — | — | — | (1.8 | ) | — | |||||||||||||||||||||||
Total liabilities for insurance products | (739.5 | ) | (215.3 | ) | 49.3 | — | — | — | (905.5 | ) | 49.3 | ||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||
(a) | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service which utilized observable inputs at the end of the period, whereas a broker quote was used as of the beginning of the period. | ||||||||||||||||||||||||||||||||
(b) | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 44 | $ | (10.0 | ) | $ | — | $ | — | $ | 34 | ||||||||||||||||||||||
Asset-backed securities | 22 | (20.4 | ) | — | — | 1.6 | |||||||||||||||||||||||||||
Collateralized debt obligations | 6 | (91.4 | ) | — | — | (85.4 | ) | ||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.3 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||
Total fixed maturities, available for sale | 72 | (122.1 | ) | — | — | (50.1 | ) | ||||||||||||||||||||||||||
Equity securities - corporate securities | 24.5 | — | — | — | 24.5 | ||||||||||||||||||||||||||||
Trading securities - collateralized debt obligations | — | (7.7 | ) | — | — | (7.7 | ) | ||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (105.6 | ) | 1.4 | (156.3 | ) | 41.5 | (219.0 | ) | |||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.7 | — | — | 3.7 | ||||||||||||||||||||||||||||
Total liabilities for insurance products | (105.6 | ) | 5.1 | (156.3 | ) | 41.5 | (215.3 | ) | |||||||||||||||||||||||||
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2011 (a) | Purchases, sales, issuances and settlements, net (c) | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (b) | Ending balance as of December 31, 2012 | Amount of total gains (losses) for the year ended December 31, 2012 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 278.1 | $ | 88.1 | $ | (.2 | ) | $ | 9.9 | $ | 68.6 | $ | (89.0 | ) | $ | 355.5 | $ | — | |||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 1.6 | (1.6 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
States and political subdivisions | 2.1 | (1.8 | ) | — | 0.9 | 11.9 | — | 13.1 | — | ||||||||||||||||||||||||
Asset-backed securities | 79.7 | 15.2 | (.3 | ) | 6.3 | 0.5 | (57.4 | ) | 44 | — | |||||||||||||||||||||||
Collateralized debt obligations | 327.3 | (24.8 | ) | — | 21.5 | — | — | 324 | — | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 17.3 | (2.5 | ) | — | 0.8 | 5.7 | (15.1 | ) | 6.2 | — | |||||||||||||||||||||||
Mortgage pass-through securities | 2.2 | (.3 | ) | — | — | — | — | 1.9 | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | 124.8 | 0.2 | — | (.1 | ) | 5 | (113.0 | ) | 16.9 | — | |||||||||||||||||||||||
Total fixed maturities, available for sale | 833.1 | 72.5 | (.5 | ) | 39.3 | 91.7 | (274.5 | ) | 761.6 | — | |||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 6.4 | (3.2 | ) | (3.8 | ) | 0.7 | — | — | 0.1 | (3.8 | ) | ||||||||||||||||||||||
Venture capital investments | 63.5 | (34.3 | ) | (26.0 | ) | (.4 | ) | — | — | 2.8 | — | ||||||||||||||||||||||
Total equity securities | 69.9 | (37.5 | ) | (29.8 | ) | 0.3 | — | — | 2.9 | (3.8 | ) | ||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
States and political subdivisions | — | — | 0.1 | — | 0.5 | — | 0.6 | 0.1 | |||||||||||||||||||||||||
Collateralized debt obligations | — | 6.9 | 0.4 | — | — | — | 7.3 | 0.4 | |||||||||||||||||||||||||
Commercial mortgage-backed securities | 0.4 | — | — | — | — | (.4 | ) | — | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | — | 4.5 | 1.3 | — | — | — | 5.8 | 1.3 | |||||||||||||||||||||||||
Total trading securities | 0.4 | 11.4 | 1.8 | — | 0.5 | (.4 | ) | 13.7 | 1.8 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (666.3 | ) | (52.5 | ) | (15.2 | ) | — | — | — | (734.0 | ) | (15.2 | ) | ||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (3.5 | ) | (2.0 | ) | — | — | — | — | (5.5 | ) | — | ||||||||||||||||||||||
Total liabilities for insurance products | (669.8 | ) | (54.5 | ) | (15.2 | ) | — | — | — | (739.5 | ) | (15.2 | ) | ||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||
(a) | We revised the hierarchy classification of certain fixed maturities, equity securities, trading securities and other invested assets as we believe the observability of the inputs more closely represent Level 2 valuations. | ||||||||||||||||||||||||||||||||
(b) | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service at the end of the period, whereas a broker quote was used as of the beginning of the period. | ||||||||||||||||||||||||||||||||
(c) | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2012 (dollars in millions): | ||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 110.3 | $ | (22.2 | ) | $ | — | $ | — | $ | 88.1 | ||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | (1.6 | ) | — | — | (1.6 | ) | ||||||||||||||||||||||||||
States and political subdivisions | — | (1.8 | ) | — | — | (1.8 | ) | ||||||||||||||||||||||||||
Asset-backed securities | 19 | (3.8 | ) | — | — | 15.2 | |||||||||||||||||||||||||||
Collateralized debt obligations | 35.4 | (60.2 | ) | — | — | (24.8 | ) | ||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (2.5 | ) | — | — | (2.5 | ) | ||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.3 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||
Collateralized mortgage obligations | 11.2 | (11.0 | ) | — | — | 0.2 | |||||||||||||||||||||||||||
Total fixed maturities, available for sale | 175.9 | (103.4 | ) | — | — | 72.5 | |||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | (3.2 | ) | — | — | (3.2 | ) | ||||||||||||||||||||||||||
Venture capital investments | — | (34.3 | ) | — | — | (34.3 | ) | ||||||||||||||||||||||||||
Total equity securities | — | (37.5 | ) | — | — | (37.5 | ) | ||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Collateralized debt obligations | 6.9 | — | — | — | 6.9 | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 4.5 | — | — | — | 4.5 | ||||||||||||||||||||||||||||
Total trading securities | 11.4 | — | — | — | 11.4 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (103.3 | ) | 59.9 | (48.4 | ) | 39.3 | (52.5 | ) | |||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 0.5 | (2.5 | ) | — | (2.0 | ) | ||||||||||||||||||||||||||
Total liabilities for insurance products | (103.3 | ) | 60.4 | (50.9 | ) | 39.3 | (54.5 | ) | |||||||||||||||||||||||||
At December 31, 2013, 90 percent of our Level 3 fixed maturities, available for sale, were investment grade and 38 percent and 55 percent of our Level 3 fixed maturities, available for sale, consisted of structured securities and corporate securities, respectively. | |||||||||||||||||||||||||||||||||
Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3. | |||||||||||||||||||||||||||||||||
Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and reinsurer accounts and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument. | |||||||||||||||||||||||||||||||||
The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date. | |||||||||||||||||||||||||||||||||
Sales Inducements | ' | ||||||||||||||||||||||||||||||||
Sales Inducements | |||||||||||||||||||||||||||||||||
Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract. Certain of our life insurance products offer persistency bonuses credited to the contract holders balance after the policy has been outstanding for a specified period of time. These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP. Such amounts are deferred and amortized in the same manner as deferred acquisition costs. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (TABLES) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||||||||||||||
Schedule of terms of federal home loan bank borrowing | ' | ||||||||||||||||||||||||||||||||
The following summarizes the terms of the borrowings (dollars in millions): | |||||||||||||||||||||||||||||||||
Amount | Maturity | Interest rate at | |||||||||||||||||||||||||||||||
borrowed | date | December 31, 2013 | |||||||||||||||||||||||||||||||
$ | 67 | Feb-14 | Fixed rate – 1.830% | ||||||||||||||||||||||||||||||
50 | Sep-15 | Variable rate – 0.538% | |||||||||||||||||||||||||||||||
150 | Oct-15 | Variable rate – 0.517% | |||||||||||||||||||||||||||||||
100 | Nov-15 | Variable rate – 0.318% | |||||||||||||||||||||||||||||||
146 | Nov-15 | Fixed rate – 5.300% | |||||||||||||||||||||||||||||||
100 | Dec-15 | Fixed rate – 4.710% | |||||||||||||||||||||||||||||||
100 | Jun-16 | Variable rate – 0.605% | |||||||||||||||||||||||||||||||
75 | Jun-16 | Variable rate – 0.407% | |||||||||||||||||||||||||||||||
100 | Oct-16 | Variable rate – 0.426% | |||||||||||||||||||||||||||||||
50 | Nov-16 | Variable rate – 0.511% | |||||||||||||||||||||||||||||||
50 | Nov-16 | Variable rate – 0.635% | |||||||||||||||||||||||||||||||
57.7 | Jun-17 | Variable rate – 0.598% | |||||||||||||||||||||||||||||||
100 | Jul-17 | Fixed rate – 3.900% | |||||||||||||||||||||||||||||||
50 | Aug-17 | Variable rate – 0.441% | |||||||||||||||||||||||||||||||
75 | Aug-17 | Variable rate – 0.388% | |||||||||||||||||||||||||||||||
100 | Oct-17 | Variable rate – 0.674% | |||||||||||||||||||||||||||||||
37 | Nov-17 | Fixed rate – 3.750% | |||||||||||||||||||||||||||||||
50 | Nov-17 | Variable rate – 0.747% | |||||||||||||||||||||||||||||||
50 | Jan-18 | Variable rate – 0.596% | |||||||||||||||||||||||||||||||
50 | Jan-18 | Variable rate – 0.579% | |||||||||||||||||||||||||||||||
50 | Feb-18 | Variable rate – 0.548% | |||||||||||||||||||||||||||||||
22 | Feb-18 | Variable rate – 0.567% | |||||||||||||||||||||||||||||||
100 | May-18 | Variable rate – 0.617% | |||||||||||||||||||||||||||||||
50 | Jul-18 | Variable rate – 0.708% | |||||||||||||||||||||||||||||||
50 | Aug-18 | Variable rate – 0.361% | |||||||||||||||||||||||||||||||
21.8 | Jun-20 | Fixed rate – 1.960% | |||||||||||||||||||||||||||||||
27.5 | Mar-23 | Fixed rate – 2.160% | |||||||||||||||||||||||||||||||
20.5 | Jun-25 | Fixed rate – 2.940% | |||||||||||||||||||||||||||||||
$ | 1,899.50 | ||||||||||||||||||||||||||||||||
Schedule of financial instruments carried at fair value categorized by input level | ' | ||||||||||||||||||||||||||||||||
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2013 is as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | Total | ||||||||||||||||||||||||||||||
for identical assets or liabilities | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | — | $ | 15,313.80 | $ | 359.6 | $ | 15,673.40 | |||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 73.1 | — | 73.1 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 2,204.40 | — | 2,204.40 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 1,419.90 | 42.2 | 1,462.10 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | 47.3 | 246.7 | 294 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,609.00 | — | 1,609.00 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 11.8 | 1.6 | 13.4 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 1,848.90 | — | 1,848.90 | |||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 22,528.20 | 650.1 | 23,178.30 | |||||||||||||||||||||||||||||
Equity securities - corporate securities | 79.6 | 145.2 | 24.5 | 249.3 | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | 45.2 | — | 45.2 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.6 | — | 4.6 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 14.1 | — | 14.1 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 24.3 | — | 24.3 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 125.8 | — | 125.8 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 31.1 | — | 31.1 | |||||||||||||||||||||||||||||
Equity securities | 2.4 | — | — | 2.4 | |||||||||||||||||||||||||||||
Total trading securities | 2.4 | 245.2 | — | 247.6 | |||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 1,046.70 | — | 1,046.70 | |||||||||||||||||||||||||||||
Other invested assets - derivatives | 0.6 | 156.2 | — | 156.8 | |||||||||||||||||||||||||||||
Assets held in separate accounts | — | 10.3 | — | 10.3 | |||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 82.6 | $ | 24,131.80 | $ | 674.6 | $ | 24,889.00 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | — | — | 903.7 | 903.7 | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | — | 1.8 | 1.8 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 905.5 | 905.5 | |||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 905.5 | $ | 905.5 | |||||||||||||||||||||||||
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2012 is as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | Total | ||||||||||||||||||||||||||||||
for identical assets or liabilities | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | — | $ | 16,498.60 | $ | 355.5 | $ | 16,854.10 | |||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 99.5 | — | 99.5 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 2,115.00 | 13.1 | 2,128.10 | |||||||||||||||||||||||||||||
Debt securities issued by foreign governments | — | 0.8 | — | 0.8 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 1,416.90 | 44 | 1,460.90 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | — | 324 | 324 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,471.20 | 6.2 | 1,477.40 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 19.9 | 1.9 | 21.8 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 2,230.60 | 16.9 | 2,247.50 | |||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 23,852.50 | 761.6 | 24,614.10 | |||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 49.7 | 118.8 | 0.1 | 168.6 | |||||||||||||||||||||||||||||
Venture capital investments | — | — | 2.8 | 2.8 | |||||||||||||||||||||||||||||
Total equity securities | 49.7 | 118.8 | 2.9 | 171.4 | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | 46.6 | — | 46.6 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.8 | — | 4.8 | |||||||||||||||||||||||||||||
States and political subdivisions | — | 14 | 0.6 | 14.6 | |||||||||||||||||||||||||||||
Asset-backed securities | — | 50.1 | — | 50.1 | |||||||||||||||||||||||||||||
Collateralized debt obligations | — | — | 7.3 | 7.3 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 93.3 | — | 93.3 | |||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 41.2 | 5.8 | 47 | |||||||||||||||||||||||||||||
Equity securities | 0.9 | 1.5 | — | 2.4 | |||||||||||||||||||||||||||||
Total trading securities | 0.9 | 251.6 | 13.7 | 266.2 | |||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 814.3 | — | 814.3 | |||||||||||||||||||||||||||||
Other invested assets - derivatives | — | 54.4 | — | 54.4 | |||||||||||||||||||||||||||||
Assets held in separate accounts | — | 14.9 | — | 14.9 | |||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 50.6 | $ | 25,106.50 | $ | 778.2 | $ | 25,935.30 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | — | — | 734 | 734 | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | — | 5.5 | 5.5 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 739.5 | 739.5 | |||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 739.5 | $ | 739.5 | |||||||||||||||||||||||||
Schedule of assets and liabilities measured on a recurring fair value basis | ' | ||||||||||||||||||||||||||||||||
The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets or liabilities | Significant other observable inputs | Significant unobservable inputs | Total estimated fair value | Total carrying amount | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,749.50 | $ | 1,749.50 | $ | 1,729.50 | |||||||||||||||||||||||
Policy loans | — | — | 277 | 277 | 277 | ||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 144.8 | — | 144.8 | 144.8 | ||||||||||||||||||||||||||||
Hedge funds | — | 67.6 | — | 67.6 | 67.6 | ||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||
Unrestricted | 457.8 | 241.2 | — | 699 | 699 | ||||||||||||||||||||||||||||
Held by variable interest entities | 104.3 | — | — | 104.3 | 104.3 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 12,776.40 | 12,776.40 | 12,776.40 | ||||||||||||||||||||||||||||
Investment borrowings | — | 1,948.50 | — | 1,948.50 | 1,900.00 | ||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 993.7 | — | 993.7 | 1,012.30 | ||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 872.5 | — | 872.5 | 856.4 | ||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets or liabilities | Significant other observable inputs | Significant unobservable inputs | Total estimated fair value | Total carrying amount | |||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,682.10 | $ | 1,682.10 | $ | 1,573.20 | |||||||||||||||||||||||
Policy loans | — | — | 272 | 272 | 272 | ||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 123 | — | 123 | 123 | ||||||||||||||||||||||||||||
Hedge funds | — | 16.1 | — | 16.1 | 16.1 | ||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||
Unrestricted | 432.3 | 150.2 | — | 582.5 | 582.5 | ||||||||||||||||||||||||||||
Held by variable interest entities | 54.2 | — | — | 54.2 | 54.2 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 12,913.10 | 12,913.10 | 12,913.10 | ||||||||||||||||||||||||||||
Investment borrowings | — | 1,702.00 | — | 1,702.00 | 1,650.80 | ||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 752.2 | — | 752.2 | 767 | ||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 1,100.30 | — | 1,100.30 | 1,004.20 | ||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||
(a) | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at December 31, 2013 and 2012. This was because interest rates credited on the vast majority of account balances approximate current rates paid on similar products and because these rates are not generally guaranteed beyond one year. | ||||||||||||||||||||||||||||||||
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | Purchases, sales, issuances and settlements, net (b) | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (a) | Ending balance as of December 31, 2013 | Amount of total gains (losses) for the year ended December 31, 2013 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 355.5 | $ | 34 | $ | (.3 | ) | $ | (9.8 | ) | $ | 13.2 | $ | (33.0 | ) | $ | 359.6 | $ | — | ||||||||||||||
States and political subdivisions | 13.1 | — | — | — | — | (13.1 | ) | — | — | ||||||||||||||||||||||||
Asset-backed securities | 44 | 1.6 | 0.1 | (3.6 | ) | 0.1 | — | 42.2 | — | ||||||||||||||||||||||||
Collateralized debt obligations | 324 | (85.4 | ) | 0.2 | 7.9 | — | — | 246.7 | — | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 6.2 | — | — | — | — | (6.2 | ) | — | — | ||||||||||||||||||||||||
Mortgage pass-through securities | 1.9 | (.3 | ) | — | — | — | — | 1.6 | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | 16.9 | — | — | — | — | (16.9 | ) | — | — | ||||||||||||||||||||||||
Total fixed maturities, available for sale | 761.6 | (50.1 | ) | — | (5.5 | ) | 13.3 | (69.2 | ) | 650.1 | — | ||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | 24.5 | — | (.1 | ) | — | — | 24.5 | — | ||||||||||||||||||||||||
Venture capital investments | 2.8 | — | (2.5 | ) | (.3 | ) | — | — | — | — | |||||||||||||||||||||||
Total equity securities | 2.9 | 24.5 | (2.5 | ) | (.4 | ) | — | — | 24.5 | — | |||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||
Collateralized debt obligations | 7.3 | (7.7 | ) | 0.6 | (.2 | ) | — | — | — | (.2 | ) | ||||||||||||||||||||||
Collateralized mortgage obligations | 5.8 | — | — | — | — | (5.8 | ) | — | — | ||||||||||||||||||||||||
Total trading securities | 13.7 | (7.7 | ) | 0.6 | (.2 | ) | — | (6.4 | ) | — | (.2 | ) | |||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (734.0 | ) | (219.0 | ) | 49.3 | — | — | — | (903.7 | ) | 49.3 | ||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.5 | ) | 3.7 | — | — | — | — | (1.8 | ) | — | |||||||||||||||||||||||
Total liabilities for insurance products | (739.5 | ) | (215.3 | ) | 49.3 | — | — | — | (905.5 | ) | 49.3 | ||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||
(a) | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service which utilized observable inputs at the end of the period, whereas a broker quote was used as of the beginning of the period. | ||||||||||||||||||||||||||||||||
(b) | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 44 | $ | (10.0 | ) | $ | — | $ | — | $ | 34 | ||||||||||||||||||||||
Asset-backed securities | 22 | (20.4 | ) | — | — | 1.6 | |||||||||||||||||||||||||||
Collateralized debt obligations | 6 | (91.4 | ) | — | — | (85.4 | ) | ||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.3 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||
Total fixed maturities, available for sale | 72 | (122.1 | ) | — | — | (50.1 | ) | ||||||||||||||||||||||||||
Equity securities - corporate securities | 24.5 | — | — | — | 24.5 | ||||||||||||||||||||||||||||
Trading securities - collateralized debt obligations | — | (7.7 | ) | — | — | (7.7 | ) | ||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (105.6 | ) | 1.4 | (156.3 | ) | 41.5 | (219.0 | ) | |||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.7 | — | — | 3.7 | ||||||||||||||||||||||||||||
Total liabilities for insurance products | (105.6 | ) | 5.1 | (156.3 | ) | 41.5 | (215.3 | ) | |||||||||||||||||||||||||
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2011 (a) | Purchases, sales, issuances and settlements, net (c) | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (b) | Ending balance as of December 31, 2012 | Amount of total gains (losses) for the year ended December 31, 2012 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 278.1 | $ | 88.1 | $ | (.2 | ) | $ | 9.9 | $ | 68.6 | $ | (89.0 | ) | $ | 355.5 | $ | — | |||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 1.6 | (1.6 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
States and political subdivisions | 2.1 | (1.8 | ) | — | 0.9 | 11.9 | — | 13.1 | — | ||||||||||||||||||||||||
Asset-backed securities | 79.7 | 15.2 | (.3 | ) | 6.3 | 0.5 | (57.4 | ) | 44 | — | |||||||||||||||||||||||
Collateralized debt obligations | 327.3 | (24.8 | ) | — | 21.5 | — | — | 324 | — | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 17.3 | (2.5 | ) | — | 0.8 | 5.7 | (15.1 | ) | 6.2 | — | |||||||||||||||||||||||
Mortgage pass-through securities | 2.2 | (.3 | ) | — | — | — | — | 1.9 | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | 124.8 | 0.2 | — | (.1 | ) | 5 | (113.0 | ) | 16.9 | — | |||||||||||||||||||||||
Total fixed maturities, available for sale | 833.1 | 72.5 | (.5 | ) | 39.3 | 91.7 | (274.5 | ) | 761.6 | — | |||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 6.4 | (3.2 | ) | (3.8 | ) | 0.7 | — | — | 0.1 | (3.8 | ) | ||||||||||||||||||||||
Venture capital investments | 63.5 | (34.3 | ) | (26.0 | ) | (.4 | ) | — | — | 2.8 | — | ||||||||||||||||||||||
Total equity securities | 69.9 | (37.5 | ) | (29.8 | ) | 0.3 | — | — | 2.9 | (3.8 | ) | ||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
States and political subdivisions | — | — | 0.1 | — | 0.5 | — | 0.6 | 0.1 | |||||||||||||||||||||||||
Collateralized debt obligations | — | 6.9 | 0.4 | — | — | — | 7.3 | 0.4 | |||||||||||||||||||||||||
Commercial mortgage-backed securities | 0.4 | — | — | — | — | (.4 | ) | — | — | ||||||||||||||||||||||||
Collateralized mortgage obligations | — | 4.5 | 1.3 | — | — | — | 5.8 | 1.3 | |||||||||||||||||||||||||
Total trading securities | 0.4 | 11.4 | 1.8 | — | 0.5 | (.4 | ) | 13.7 | 1.8 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (666.3 | ) | (52.5 | ) | (15.2 | ) | — | — | — | (734.0 | ) | (15.2 | ) | ||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (3.5 | ) | (2.0 | ) | — | — | — | — | (5.5 | ) | — | ||||||||||||||||||||||
Total liabilities for insurance products | (669.8 | ) | (54.5 | ) | (15.2 | ) | — | — | — | (739.5 | ) | (15.2 | ) | ||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||
(a) | We revised the hierarchy classification of certain fixed maturities, equity securities, trading securities and other invested assets as we believe the observability of the inputs more closely represent Level 2 valuations. | ||||||||||||||||||||||||||||||||
(b) | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service at the end of the period, whereas a broker quote was used as of the beginning of the period. | ||||||||||||||||||||||||||||||||
(c) | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2012 (dollars in millions): | ||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 110.3 | $ | (22.2 | ) | $ | — | $ | — | $ | 88.1 | ||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | (1.6 | ) | — | — | (1.6 | ) | ||||||||||||||||||||||||||
States and political subdivisions | — | (1.8 | ) | — | — | (1.8 | ) | ||||||||||||||||||||||||||
Asset-backed securities | 19 | (3.8 | ) | — | — | 15.2 | |||||||||||||||||||||||||||
Collateralized debt obligations | 35.4 | (60.2 | ) | — | — | (24.8 | ) | ||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (2.5 | ) | — | — | (2.5 | ) | ||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.3 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||
Collateralized mortgage obligations | 11.2 | (11.0 | ) | — | — | 0.2 | |||||||||||||||||||||||||||
Total fixed maturities, available for sale | 175.9 | (103.4 | ) | — | — | 72.5 | |||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||
Corporate securities | — | (3.2 | ) | — | — | (3.2 | ) | ||||||||||||||||||||||||||
Venture capital investments | — | (34.3 | ) | — | — | (34.3 | ) | ||||||||||||||||||||||||||
Total equity securities | — | (37.5 | ) | — | — | (37.5 | ) | ||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Collateralized debt obligations | 6.9 | — | — | — | 6.9 | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 4.5 | — | — | — | 4.5 | ||||||||||||||||||||||||||||
Total trading securities | 11.4 | — | — | — | 11.4 | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (103.3 | ) | 59.9 | (48.4 | ) | 39.3 | (52.5 | ) | |||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 0.5 | (2.5 | ) | — | (2.0 | ) | ||||||||||||||||||||||||||
Total liabilities for insurance products | (103.3 | ) | 60.4 | (50.9 | ) | 39.3 | (54.5 | ) | |||||||||||||||||||||||||
Schedule of fair value measurement inputs | ' | ||||||||||||||||||||||||||||||||
The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||
Fair value at December 31, 2013 | Valuation technique(s) | Unobservable inputs | Range (weighted average) | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Corporate securities (a) | $ | 260.3 | Discounted cash flow analysis | Discount margins | 1.65% - 2.90% (2.36%) | ||||||||||||||||||||||||||||
Asset-backed securities (b) | 35.1 | Discounted cash flow analysis | Discount margins | 2.03% - 4.20% (3.09%) | |||||||||||||||||||||||||||||
Collateralized debt obligations (c) | 240.7 | Discounted cash flow analysis | Recoveries | 64% - 67% (65.8%) | |||||||||||||||||||||||||||||
Constant prepayment rate | 20% | ||||||||||||||||||||||||||||||||
Discount margins | .95% - 2.00% (1.32%) | ||||||||||||||||||||||||||||||||
Annual default rate | 1.14% - 5.57% (3.05%) | ||||||||||||||||||||||||||||||||
Portfolio CCC % | 1.52% - 21.79% (12.57%) | ||||||||||||||||||||||||||||||||
Equity security (d) | 24.5 | Cost approach | Historical cost | Not applicable | |||||||||||||||||||||||||||||
Other assets categorized as Level 3 (e) | 114 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||
Total | 674.6 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Interest sensitive products (f) | 905.5 | Discounted projected embedded derivatives | Projected portfolio yields | 5.35% - 6.63% (5.60%) | |||||||||||||||||||||||||||||
Discount rates | 0.00 - 4.64% (2.47%) | ||||||||||||||||||||||||||||||||
Surrender rates | 2.80% - 54.60% (14.39%) | ||||||||||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||||||||||
(a) | Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(b) | Asset-backed securities - The significant unobservable input used in the fair value measurement of our asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(c) | Collateralized debt obligations - The significant unobservable inputs used in the fair value measurement of our collateralized debt obligations relate to collateral performance, including default rate, recoveries and constant prepayment rate, as well as discount margins of the underlying collateral. Significant increases (decreases) in default rate in isolation would result in a significantly lower (higher) fair value measurement. Generally, a significant increase (decrease) in the constant prepayment rate and recoveries in isolation would result in a significantly higher (lower) fair value measurement. Generally a significant increase (decrease) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the annual default rate is accompanied by a directionally similar change in the assumption used for discount margins and portfolio CCC % and a directionally opposite change in the assumption used for constant prepayment rate and recoveries. A tranche's payment priority and investment cost basis could alter generalized fair value outcomes. | ||||||||||||||||||||||||||||||||
(d) | Equity security - The significant unobservable input used in the fair value measurement of this equity security is historical cost as that is the amount that would be required to replace the security with a comparable security. The amount represents an investment in an entity that is currently in the construction phase of a manufacturing facility. The fair value measurement is sensitive to the construction phase and operational risk of the security. | ||||||||||||||||||||||||||||||||
(e) | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | ||||||||||||||||||||||||||||||||
(f) | Interest sensitive products - The significant unobservable inputs used in the fair value measurement of our interest sensitive products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. | ||||||||||||||||||||||||||||||||
The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
Fair value at December 31, 2012 | Valuation technique(s) | Unobservable inputs | Range (weighted average) | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Corporate securities (a) | $ | 248.3 | Discounted cash flow analysis | Discount margins | 1.90% - 3.25% (2.78%) | ||||||||||||||||||||||||||||
Asset-backed securities (b) | 33.3 | Discounted cash flow analysis | Discount margins | 2.78% - 3.14% (2.99%) | |||||||||||||||||||||||||||||
Collateralized debt obligations (c) | 331.4 | Discounted cash flow analysis | Recoveries | 65% - 66% | |||||||||||||||||||||||||||||
Constant prepayment rate | 20% | ||||||||||||||||||||||||||||||||
Discount margins | .95% - 8.75% (2.02%) | ||||||||||||||||||||||||||||||||
Annual default rate | .95% - 5.54% (3.01%) | ||||||||||||||||||||||||||||||||
Portfolio CCC % | 1.18% - 21.56% (11.99%) | ||||||||||||||||||||||||||||||||
Venture capital investments (d) | 2.8 | Market multiples | EBITDA multiple | 6.8 | |||||||||||||||||||||||||||||
Revenue multiple | 1.5 | ||||||||||||||||||||||||||||||||
Other assets categorized as Level 3 (e) | 162.4 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||
Total | 778.2 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Interest sensitive products (f) | 739.5 | Discounted projected embedded derivatives | Projected portfolio yields | 5.35% - 5.61% (5.55%) | |||||||||||||||||||||||||||||
Discount rates | 0.0 - 3.6% (1.4%) | ||||||||||||||||||||||||||||||||
Surrender rates | 4% - 43% (19%) | ||||||||||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||||||||||
(a) | Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(b) | Asset-backed securities - The significant unobservable input used in the fair value measurement of our asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
(c) | Collateralized debt obligations - The significant unobservable inputs used in the fair value measurement of our collateralized debt obligations relate to collateral performance, including default rate, recoveries and constant prepayment rate, as well as discount margins of the underlying collateral. Significant increases (decreases) in default rate in isolation would result in a significantly lower (higher) fair value measurement. Generally, a significant increase (decrease) in the constant prepayment rate and recoveries in isolation would result in a significantly higher (lower) fair value measurement. Generally a significant increase (decrease) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the annual default rate is accompanied by a directionally similar change in the assumption used for discount margins and portfolio CCC % and a directionally opposite change in the assumption used for constant prepayment rate and recoveries. A tranche's payment priority and investment cost basis could alter generalized fair value outcomes. | ||||||||||||||||||||||||||||||||
(d) | Venture capital investments - The significant unobservable inputs used in the fair value measurement of our venture capital investments are the EBITDA multiple and revenue multiple. Generally, a significant increase (decrease) in the EBITDA or revenue multiples in isolation would result in a significantly higher (lower) fair value measurement. | ||||||||||||||||||||||||||||||||
(e) | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | ||||||||||||||||||||||||||||||||
(f) | Interest sensitive products - The significant unobservable inputs used in the fair value measurement of our interest sensitive products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. | ||||||||||||||||||||||||||||||||
Schedule of new accounting pronouncements and changes in accounting principles | ' | ||||||||||||||||||||||||||||||||
Recently Issued Accounting Standards | |||||||||||||||||||||||||||||||||
Pending Accounting Standards | |||||||||||||||||||||||||||||||||
In July 2013, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance regarding the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. Such guidance will require an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except under certain circumstances as further described in the guidance. | |||||||||||||||||||||||||||||||||
Such guidance does not require new recurring disclosures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The guidance should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. | |||||||||||||||||||||||||||||||||
Accounting Standard Adopted on a Retrospective Basis | |||||||||||||||||||||||||||||||||
In October 2010, the FASB issued authoritative guidance that modified the definition of the types of costs incurred by insurance entities that could be capitalized in the acquisition of new and renewal contracts. The guidance impacts the timing of GAAP reported financial results, but has no impact on cash flows, statutory financial results or the ultimate profitability of the business. | |||||||||||||||||||||||||||||||||
The guidance specifies that an insurance entity shall only capitalize incremental direct costs related to the successful acquisition of new or renewal insurance contracts. The guidance also states that advertising costs should be included in deferred acquisition costs only if the capitalization criteria in the direct-response advertising guidance is met. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, and was adopted by the Company on January 1, 2012. As permitted by the guidance, we elected to apply the provisions on a retrospective basis. The guidance reduced the balance of deferred acquisition costs, its amortization and the amount of costs capitalized. We are able to defer most commission payments, plus other costs directly related to the production of new business. The change did not impact the balance of the present value of future profits. Therefore, in contrast to the reduction in amortization of deferred acquisition costs, there was no change in the amortization of the present value of future profits. | |||||||||||||||||||||||||||||||||
Schedule of offsetting call options | ' | ||||||||||||||||||||||||||||||||
The following table summarizes information related to call options as of December 31, 2013 and 2012 (dollars in millions): | |||||||||||||||||||||||||||||||||
Gross amounts not offset in the balance sheet | |||||||||||||||||||||||||||||||||
Gross amounts of recognized assets | Gross amounts offset in the balance sheet | Net amounts of assets presented in the balance sheet | Financial instruments | Cash collateral received | Net amount | ||||||||||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||||||
Call Options | $ | 156.2 | $ | — | $ | 156.2 | $ | — | $ | — | $ | 156.2 | |||||||||||||||||||||
December 31, 2012: | |||||||||||||||||||||||||||||||||
Call Options | 54.4 | — | 54.4 | — | — | 54.4 | |||||||||||||||||||||||||||
INVESTMENTS_TABLES
INVESTMENTS (TABLES) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||
Schedule of fixed maturities for available for sale and equity securities | ' | ||||||||||||||||||||||||
At December 31, 2013, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): | |||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | Other-than-temporary impairments included in accumulated other comprehensive income | |||||||||||||||||||||
cost | unrealized | unrealized | fair | ||||||||||||||||||||||
gains | losses | value | |||||||||||||||||||||||
Investment grade (a): | |||||||||||||||||||||||||
Corporate securities | $ | 13,372.90 | $ | 1,086.20 | $ | (120.9 | ) | $ | 14,338.20 | $ | — | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 71.1 | 2.6 | (.6 | ) | 73.1 | — | |||||||||||||||||||
States and political subdivisions | 2,130.20 | 106.8 | (38.5 | ) | 2,198.50 | — | |||||||||||||||||||
Asset-backed securities | 869.9 | 41.6 | (3.9 | ) | 907.6 | — | |||||||||||||||||||
Collateralized debt obligations | 259.4 | 7.4 | (.1 | ) | 266.7 | — | |||||||||||||||||||
Commercial mortgage-backed securities | 1,517.10 | 97.7 | (5.8 | ) | 1,609.00 | — | |||||||||||||||||||
Mortgage pass-through securities | 12.7 | 0.7 | — | 13.4 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 936.2 | 34.3 | (1.3 | ) | 969.2 | — | |||||||||||||||||||
Total investment grade fixed maturities, available for sale | 19,169.50 | 1,377.30 | (171.1 | ) | 20,375.70 | — | |||||||||||||||||||
Below-investment grade (a): | |||||||||||||||||||||||||
Corporate securities | 1,314.50 | 53.4 | (32.7 | ) | 1,335.20 | — | |||||||||||||||||||
States and political subdivisions | 6.4 | — | (.5 | ) | 5.9 | — | |||||||||||||||||||
Asset-backed securities | 523.5 | 34.3 | (3.3 | ) | 554.5 | — | |||||||||||||||||||
Collateralized debt obligations | 27.6 | 0.1 | (.4 | ) | 27.3 | — | |||||||||||||||||||
Collateralized mortgage obligations | 819.1 | 60.9 | (.3 | ) | 879.7 | (4.3 | ) | ||||||||||||||||||
Total below-investment grade fixed maturities, available for sale | 2,691.10 | 148.7 | (37.2 | ) | 2,802.60 | (4.3 | ) | ||||||||||||||||||
Total fixed maturities, available for sale | $ | 21,860.60 | $ | 1,526.00 | $ | (208.3 | ) | $ | 23,178.30 | $ | (4.3 | ) | |||||||||||||
Equity securities | $ | 237.9 | $ | 16.3 | $ | (4.9 | ) | $ | 249.3 | ||||||||||||||||
_______________ | |||||||||||||||||||||||||
(a) | Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. | ||||||||||||||||||||||||
At December 31, 2012, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): | |||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | Other-than-temporary impairments included in accumulated other comprehensive income | |||||||||||||||||||||
cost | unrealized | unrealized | fair | ||||||||||||||||||||||
gains | losses | value | |||||||||||||||||||||||
Investment grade: | |||||||||||||||||||||||||
Corporate securities | $ | 13,531.80 | $ | 2,221.40 | $ | (12.1 | ) | $ | 15,741.10 | $ | — | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 93.9 | 5.6 | — | 99.5 | — | ||||||||||||||||||||
States and political subdivisions | 1,840.70 | 277.3 | (4.3 | ) | 2,113.70 | — | |||||||||||||||||||
Debt securities issued by foreign governments | 0.8 | — | — | 0.8 | — | ||||||||||||||||||||
Asset-backed securities | 1,002.90 | 70.9 | (2.8 | ) | 1,071.00 | — | |||||||||||||||||||
Collateralized debt obligations | 311.5 | 7.5 | (1.0 | ) | 318 | — | |||||||||||||||||||
Commercial mortgage-backed securities | 1,325.70 | 152.3 | (.6 | ) | 1,477.40 | — | |||||||||||||||||||
Mortgage pass-through securities | 20.6 | 1.2 | — | 21.8 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 1,157.70 | 107.2 | (.7 | ) | 1,264.20 | (.8 | ) | ||||||||||||||||||
Total investment grade fixed maturities, available for sale | 19,285.60 | 2,843.40 | (21.5 | ) | 22,107.50 | (.8 | ) | ||||||||||||||||||
Below-investment grade: | |||||||||||||||||||||||||
Corporate securities | 1,055.80 | 65.3 | (8.1 | ) | 1,113.00 | — | |||||||||||||||||||
States and political subdivisions | 15.3 | — | (.9 | ) | 14.4 | — | |||||||||||||||||||
Asset-backed securities | 360.9 | 31.4 | (2.4 | ) | 389.9 | — | |||||||||||||||||||
Collateralized debt obligations | 5.5 | 0.5 | — | 6 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 903.7 | 79.6 | — | 983.3 | (5.2 | ) | |||||||||||||||||||
Total below-investment grade fixed maturities, available for sale | 2,341.20 | 176.8 | (11.4 | ) | 2,506.60 | (5.2 | ) | ||||||||||||||||||
Total fixed maturities, available for sale | $ | 21,626.80 | $ | 3,020.20 | $ | (32.9 | ) | $ | 24,614.10 | $ | (6.0 | ) | |||||||||||||
Equity securities | $ | 167.1 | $ | 5.9 | $ | (1.6 | ) | $ | 171.4 | ||||||||||||||||
Summary of fixed maturity securities available for sale | ' | ||||||||||||||||||||||||
A summary of our fixed maturity securities, available for sale, by NAIC designations (or for fixed maturity securities held by non-regulated entities, based on NRSRO ratings) as of December 31, 2013 is as follows (dollars in millions): | |||||||||||||||||||||||||
NAIC designation | Amortized cost | Estimated fair value | Percentage of total estimated fair value | ||||||||||||||||||||||
1 | $ | 10,215.30 | $ | 10,926.50 | 47.2 | % | |||||||||||||||||||
2 | 10,265.80 | 10,852.30 | 46.8 | ||||||||||||||||||||||
3 | 1,051.30 | 1,066.10 | 4.6 | ||||||||||||||||||||||
4 | 297.6 | 303.4 | 1.3 | ||||||||||||||||||||||
5 | 30.6 | 29.5 | 0.1 | ||||||||||||||||||||||
6 | — | 0.5 | — | ||||||||||||||||||||||
$ | 21,860.60 | $ | 23,178.30 | 100 | % | ||||||||||||||||||||
Schedule of accumulated other comprehensive income (loss) | ' | ||||||||||||||||||||||||
Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments. These amounts, included in shareholders' equity as of December 31, 2013 and 2012, were as follows (dollars in millions): | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ | 6.5 | $ | 9.8 | |||||||||||||||||||||
Net unrealized gains on all other investments | 1,322.60 | 2,986.50 | |||||||||||||||||||||||
Adjustment to present value of future profits (a) | (47.7 | ) | (193.0 | ) | |||||||||||||||||||||
Adjustment to deferred acquisition costs | (137.0 | ) | (452.9 | ) | |||||||||||||||||||||
Adjustment to insurance liabilities | — | (489.8 | ) | ||||||||||||||||||||||
Unrecognized net loss related to deferred compensation plan | (7.1 | ) | (7.9 | ) | |||||||||||||||||||||
Deferred income tax liabilities | (405.5 | ) | (655.3 | ) | |||||||||||||||||||||
Accumulated other comprehensive income | $ | 731.8 | $ | 1,197.40 | |||||||||||||||||||||
_________ | |||||||||||||||||||||||||
(a) | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at the Effective Date. | ||||||||||||||||||||||||
Schedule of investments classified by contractual maturity date | ' | ||||||||||||||||||||||||
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. In addition, structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments. | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
cost | fair | ||||||||||||||||||||||||
value | |||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Due in one year or less | $ | 155.2 | $ | 157.4 | |||||||||||||||||||||
Due after one year through five years | 2,008.50 | 2,188.60 | |||||||||||||||||||||||
Due after five years through ten years | 3,920.60 | 4,219.00 | |||||||||||||||||||||||
Due after ten years | 10,810.80 | 11,385.90 | |||||||||||||||||||||||
Subtotal | 16,895.10 | 17,950.90 | |||||||||||||||||||||||
Structured securities | 4,965.50 | 5,227.40 | |||||||||||||||||||||||
Total fixed maturities, available for sale | $ | 21,860.60 | $ | 23,178.30 | |||||||||||||||||||||
Schedule of investment income | ' | ||||||||||||||||||||||||
Net investment income consisted of the following (dollars in millions): | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Fixed maturities | $ | 1,288.90 | $ | 1,280.90 | $ | 1,233.80 | |||||||||||||||||||
Trading income related to policyholder and reinsurer accounts and other special-purpose portfolios | 80.7 | 62.4 | 14.6 | ||||||||||||||||||||||
Equity securities | 8.4 | 4.4 | 1.7 | ||||||||||||||||||||||
Mortgage loans | 96.3 | 99.8 | 111.7 | ||||||||||||||||||||||
Policy loans | 17.3 | 17.1 | 17.6 | ||||||||||||||||||||||
Options related to fixed index products: | |||||||||||||||||||||||||
Option income | 77.4 | 0.4 | 36.5 | ||||||||||||||||||||||
Change in value of options | 100.1 | 25.1 | (57.7 | ) | |||||||||||||||||||||
Other invested assets | 14.4 | 14.4 | 14.5 | ||||||||||||||||||||||
Cash and cash equivalents | 0.5 | 0.6 | 0.4 | ||||||||||||||||||||||
Gross investment income | 1,684.00 | 1,505.10 | 1,373.10 | ||||||||||||||||||||||
Less investment expenses | 20 | 18.7 | 19 | ||||||||||||||||||||||
Net investment income | $ | 1,664.00 | $ | 1,486.40 | $ | 1,354.10 | |||||||||||||||||||
Schedule of realized gain (loss) on investments | ' | ||||||||||||||||||||||||
The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions): | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Fixed maturity securities, available for sale: | |||||||||||||||||||||||||
Realized gains on sale | $ | 57.7 | $ | 115.4 | $ | 183.1 | |||||||||||||||||||
Realized losses on sale | (11.4 | ) | (15.4 | ) | (59.9 | ) | |||||||||||||||||||
Impairments: | |||||||||||||||||||||||||
Total other-than-temporary impairment losses | (7.1 | ) | (1.0 | ) | (19.2 | ) | |||||||||||||||||||
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | 5.3 | ||||||||||||||||||||||
Net impairment losses recognized | (7.1 | ) | (1.0 | ) | (13.9 | ) | |||||||||||||||||||
Net realized investment gains from fixed maturities | 39.2 | 99 | 109.3 | ||||||||||||||||||||||
Equity securities | 4.8 | 0.1 | (.2 | ) | |||||||||||||||||||||
Commercial mortgage loans | (1.1 | ) | (3.7 | ) | (29.3 | ) | |||||||||||||||||||
Impairments of mortgage loans and other investments | (4.5 | ) | (36.8 | ) | (20.7 | ) | |||||||||||||||||||
Other | (5.0 | ) | 22.5 | 2.7 | |||||||||||||||||||||
Net realized investment gains | $ | 33.4 | $ | 81.1 | $ | 61.8 | |||||||||||||||||||
Schedule of credit losses recognized in earnings | ' | ||||||||||||||||||||||||
The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the years ended December 31, 2013, 2012 and 2011 (dollars in millions): | |||||||||||||||||||||||||
Year ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ | (1.6 | ) | $ | (2.0 | ) | $ | (6.1 | ) | ||||||||||||||||
Add: credit losses on other-than-temporary impairments not previously recognized | — | — | (1.1 | ) | |||||||||||||||||||||
Less: credit losses on securities sold | 0.3 | 0.4 | 5.2 | ||||||||||||||||||||||
Less: credit losses on securities impaired due to intent to sell (a) | — | — | — | ||||||||||||||||||||||
Add: credit losses on previously impaired securities | — | — | — | ||||||||||||||||||||||
Less: increases in cash flows expected on previously impaired securities | — | — | — | ||||||||||||||||||||||
Credit losses on fixed maturity securities, available for sale, end of period | $ | (1.3 | ) | $ | (1.6 | ) | $ | (2.0 | ) | ||||||||||||||||
__________ | |||||||||||||||||||||||||
(a) | Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis. | ||||||||||||||||||||||||
Schedule of investments with unrealized losses classified by contractual maturity date | ' | ||||||||||||||||||||||||
The following table sets forth the amortized cost and estimated fair value of those fixed maturities, available for sale, with unrealized losses at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities frequently include provisions for periodic principal payments and permit periodic unscheduled payments. | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
cost | fair | ||||||||||||||||||||||||
value | |||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Due in one year or less | $ | 18.5 | $ | 18.5 | |||||||||||||||||||||
Due after one year through five years | 69.8 | 68.1 | |||||||||||||||||||||||
Due after five years through ten years | 532.5 | 515.9 | |||||||||||||||||||||||
Due after ten years | 2,725.40 | 2,550.50 | |||||||||||||||||||||||
Subtotal | 3,346.20 | 3,153.00 | |||||||||||||||||||||||
Structured securities | 691.7 | 676.6 | |||||||||||||||||||||||
Total | $ | 4,037.90 | $ | 3,829.60 | |||||||||||||||||||||
Schedule of unrealized loss on investments | ' | ||||||||||||||||||||||||
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||||
Description of securities | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
value | losses | value | losses | value | losses | ||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | $ | 23.8 | $ | (.6 | ) | $ | — | $ | — | $ | 23.8 | $ | (.6 | ) | |||||||||||
States and political subdivisions | 473.6 | (30.3 | ) | 79.2 | (8.7 | ) | 552.8 | (39.0 | ) | ||||||||||||||||
Corporate securities | 2,406.10 | (132.8 | ) | 170.3 | (20.8 | ) | 2,576.40 | (153.6 | ) | ||||||||||||||||
Asset-backed securities | 308.4 | (6.5 | ) | 32.5 | (.7 | ) | 340.9 | (7.2 | ) | ||||||||||||||||
Collateralized debt obligations | 46.7 | (.5 | ) | — | — | 46.7 | (.5 | ) | |||||||||||||||||
Commercial mortgage-backed securities | 161.8 | (5.8 | ) | — | — | 161.8 | (5.8 | ) | |||||||||||||||||
Mortgage pass-through securities | 1.6 | — | 1.6 | — | 3.2 | — | |||||||||||||||||||
Collateralized mortgage obligations | 121.8 | (1.6 | ) | 2.2 | — | 124 | (1.6 | ) | |||||||||||||||||
Total fixed maturities, available for sale | $ | 3,543.80 | $ | (178.1 | ) | $ | 285.8 | $ | (30.2 | ) | $ | 3,829.60 | $ | (208.3 | ) | ||||||||||
Equity securities | $ | 26.8 | $ | (4.9 | ) | $ | — | $ | — | $ | 26.8 | $ | (4.9 | ) | |||||||||||
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2012 (dollars in millions): | |||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||||
Description of securities | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
value | losses | value | losses | value | losses | ||||||||||||||||||||
States and political subdivisions | $ | 48.3 | $ | (1.8 | ) | $ | 68.7 | $ | (3.4 | ) | $ | 117 | $ | (5.2 | ) | ||||||||||
Corporate securities | 338.1 | (11.2 | ) | 174.5 | (9.0 | ) | 512.6 | (20.2 | ) | ||||||||||||||||
Asset-backed securities | 41.7 | (.3 | ) | 111.6 | (4.9 | ) | 153.3 | (5.2 | ) | ||||||||||||||||
Collateralized debt obligations | 19.4 | (.4 | ) | 32.5 | (.6 | ) | 51.9 | (1.0 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 4.9 | (.1 | ) | 6.2 | (.5 | ) | 11.1 | (.6 | ) | ||||||||||||||||
Mortgage pass-through securities | — | — | 1.9 | — | 1.9 | — | |||||||||||||||||||
Collateralized mortgage obligations | 27 | (.4 | ) | 33.8 | (.3 | ) | 60.8 | (.7 | ) | ||||||||||||||||
Total fixed maturities, available for sale | $ | 479.4 | $ | (14.2 | ) | $ | 429.2 | $ | (18.7 | ) | $ | 908.6 | $ | (32.9 | ) | ||||||||||
Equity securities | $ | 17.8 | $ | (1.6 | ) | $ | — | $ | — | $ | 17.8 | $ | (1.6 | ) | |||||||||||
Schedule of structured securities | ' | ||||||||||||||||||||||||
The following table sets forth the par value, amortized cost and estimated fair value of structured securities, summarized by interest rates on the underlying collateral, at December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Par | Amortized | Estimated | |||||||||||||||||||||||
value | cost | fair value | |||||||||||||||||||||||
Below 4 percent | $ | 981.3 | $ | 912.5 | $ | 927.8 | |||||||||||||||||||
4 percent – 5 percent | 830.8 | 785 | 804 | ||||||||||||||||||||||
5 percent – 6 percent | 2,532.40 | 2,389.00 | 2,546.60 | ||||||||||||||||||||||
6 percent – 7 percent | 759.2 | 714.7 | 773.5 | ||||||||||||||||||||||
7 percent – 8 percent | 116.7 | 119.1 | 129.5 | ||||||||||||||||||||||
8 percent and above | 43.9 | 45.2 | 46 | ||||||||||||||||||||||
Total structured securities | $ | 5,264.30 | $ | 4,965.50 | $ | 5,227.40 | |||||||||||||||||||
The amortized cost and estimated fair value of structured securities at December 31, 2013, summarized by type of security, were as follows (dollars in millions): | |||||||||||||||||||||||||
Estimated fair value | |||||||||||||||||||||||||
Type | Amortized | Amount | Percent | ||||||||||||||||||||||
cost | of fixed | ||||||||||||||||||||||||
maturities | |||||||||||||||||||||||||
Pass-throughs, sequential and equivalent securities | $ | 1,398.80 | $ | 1,469.90 | 6.3 | % | |||||||||||||||||||
Planned amortization classes, target amortization classes and accretion-directed bonds | 336.9 | 357.5 | 1.6 | ||||||||||||||||||||||
Commercial mortgage-backed securities | 1,517.10 | 1,609.00 | 6.9 | ||||||||||||||||||||||
Asset-backed securities | 1,393.40 | 1,462.10 | 6.3 | ||||||||||||||||||||||
Collateralized debt obligations | 287 | 294 | 1.3 | ||||||||||||||||||||||
Other | 32.3 | 34.9 | 0.2 | ||||||||||||||||||||||
Total structured securities | $ | 4,965.50 | $ | 5,227.40 | 22.6 | % | |||||||||||||||||||
Summary of weighted average loan-to-value ratio for outstanding mortgage loans | ' | ||||||||||||||||||||||||
The following table provides the carrying value and estimated fair value of our outstanding mortgage loans and the underlying collateral as of December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Estimated fair | |||||||||||||||||||||||||
value | |||||||||||||||||||||||||
Loan-to-value ratio (a) | Carrying value | Mortgage loans | Collateral | ||||||||||||||||||||||
Less than 60% | $ | 744.4 | $ | 779.8 | $ | 2,254.50 | |||||||||||||||||||
60% to 70% | 386 | 386.4 | 592.4 | ||||||||||||||||||||||
Greater than 70% to 80% | 420 | 409.5 | 563.8 | ||||||||||||||||||||||
Greater than 80% to 90% | 141.6 | 141.4 | 164.9 | ||||||||||||||||||||||
Greater than 90% | 37.5 | 32.4 | 40.6 | ||||||||||||||||||||||
Total | $ | 1,729.50 | $ | 1,749.50 | $ | 3,616.20 | |||||||||||||||||||
________________ | |||||||||||||||||||||||||
(a) | Loan-to-value ratios are calculated as the ratio of: (i) the carrying value of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral. |
LIABILITIES_FOR_INSURANCE_PROD1
LIABILITIES FOR INSURANCE PRODUCTS (TABLES) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Liabilities for Insurance Products [Abstract] | ' | ||||||||||||||||
Schedule of insurance liabilities by product segment | ' | [1] | |||||||||||||||
Withdrawal assumption | Morbidity assumption | Mortality assumption | Interest rate assumption | 2013 | 2012 | ||||||||||||
Long-term care | Company experience | Company experience | Company experience | 6% | $ | 4,999.70 | $ | 5,220.60 | |||||||||
Traditional life insurance contracts | Company experience | Company experience | (a) | 5% | 2,517.50 | 2,444.60 | |||||||||||
Accident and health contracts | Company experience | Company experience | Company experience | 5% | 2,466.80 | 2,443.60 | |||||||||||
Interest-sensitive life insurance contracts | Company experience | Company experience | Company experience | 6% | 526.5 | 513.8 | |||||||||||
Annuities and supplemental contracts with life contingencies | Company experience | Company experience | (b) | 4% | 712 | 696.8 | |||||||||||
Total | $ | 11,222.50 | $ | 11,319.40 | |||||||||||||
____________________ | |||||||||||||||||
(a) | Principally, modifications of: (i) the 1965 ‑ 70 and 1975 - 80 Basic Tables; and (ii) the 1941, 1958 and 1980 Commissioners' Standard Ordinary Tables; as well as Company experience. | ||||||||||||||||
(b) | Principally, modifications of: (i) the 1971 Individual Annuity Mortality Table; (ii) the 1983 Table "A"; and (iii) the Annuity 2000 Mortality Table; as well as Company experience. | ||||||||||||||||
Our policyholder account balances are summarized as follows (dollars in millions): | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Fixed index annuities | $ | 4,093.90 | $ | 3,779.70 | |||||||||||||
Other annuities | 6,013.00 | 6,400.30 | |||||||||||||||
Interest-sensitive life insurance contracts | 2,669.50 | 2,733.10 | |||||||||||||||
Total | $ | 12,776.40 | $ | 12,913.10 | |||||||||||||
Summary of liabilities for unpaid claims adjustment expense | ' | ||||||||||||||||
Changes in the unpaid claims reserve (included in claims payable) and disabled life reserves related to accident and health insurance (included in the liability for future policy benefits) were as follows (dollars in millions): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Balance, beginning of the year | $ | 1,679.30 | $ | 1,637.30 | $ | 1,543.70 | |||||||||||
Incurred claims (net of reinsurance) related to: | |||||||||||||||||
Current year | 1,511.10 | 1,570.10 | 1,545.80 | ||||||||||||||
Prior years (a) | (162.3 | ) | (56.4 | ) | (41.7 | ) | |||||||||||
Total incurred | 1,348.80 | 1,513.70 | 1,504.10 | ||||||||||||||
Interest on claim reserves | 75.2 | 77.8 | 78.4 | ||||||||||||||
Paid claims (net of reinsurance) related to: | |||||||||||||||||
Current year | 870 | 891.3 | 866.5 | ||||||||||||||
Prior years | 659.9 | 663.9 | 626.2 | ||||||||||||||
Total paid | 1,529.90 | 1,555.20 | 1,492.70 | ||||||||||||||
Net change in balance for reinsurance assumed and ceded | 136.7 | 5.7 | 3.8 | ||||||||||||||
Balance, end of the year | $ | 1,710.10 | $ | 1,679.30 | $ | 1,637.30 | |||||||||||
___________ | |||||||||||||||||
(a) | The reserves and liabilities we establish are necessarily based on estimates, assumptions and prior years' statistics. Such amounts will fluctuate based upon the estimation procedures used to determine the amount of unpaid losses. It is possible that actual claims will exceed our reserves and have a material adverse effect on our results of operations and financial condition. | ||||||||||||||||
[1] | Principally, modifications of: (i) the 1971 Individual Annuity Mortality Table; (ii) the 1983 Table "A"; and (iii) the Annuity 2000 Mortality Table; as well as Company experience. |
INCOME_TAXES_TABLES
INCOME TAXES (TABLES) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of components of income tax expense | ' | ||||||||||||||||
The components of income tax expense were as follows (dollars in millions): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Current tax expense | $ | 8.2 | $ | 12.5 | $ | 11.9 | |||||||||||
Deferred tax expense | 160.4 | 117.4 | 101.6 | ||||||||||||||
Deferred tax benefit on loss related to reinsurance transaction | (34.4 | ) | — | — | |||||||||||||
Deferred tax benefit related to loss on extinguishment of debt | (5.9 | ) | — | — | |||||||||||||
Valuation allowance applicable to current year income | (19.7 | ) | (60.3 | ) | — | ||||||||||||
Income tax expense calculated based on annual effective tax rate | 108.6 | 69.6 | 113.5 | ||||||||||||||
Income tax expense (benefit) on discrete items: | |||||||||||||||||
Valuation allowance reduction applicable to income in future years and utilization of capital loss carryforwards | (141.2 | ) | (111.2 | ) | (143.0 | ) | |||||||||||
Valuation allowance reduction applicable to the settlement with the IRS regarding the classification of a portion of the cancellation of indebtedness income | (71.8 | ) | — | — | |||||||||||||
Valuation allowance reduction resulting from the completion of certain investment trading strategies resulting in utilization of capital loss carryforwards | (64.7 | ) | — | — | |||||||||||||
Other valuation allowance items | (15.3 | ) | — | — | |||||||||||||
Valuation allowance related to expired capital loss carryforwards | (159.4 | ) | — | — | |||||||||||||
Deferred taxes on expired capital loss carryforwards | 159.4 | — | — | ||||||||||||||
Other items | 11.2 | (23.7 | ) | — | |||||||||||||
Total income tax benefit | $ | (173.2 | ) | $ | (65.3 | ) | $ | (29.5 | ) | ||||||||
Schedule of effective income tax rate reconciliation | ' | ||||||||||||||||
A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
U.S. statutory corporate rate | 35 | % | 35 | % | 35 | % | |||||||||||
Valuation allowance | (154.9 | ) | (110.1 | ) | (46.7 | ) | |||||||||||
Expired capital loss carryforwards (which were fully offset by a corresponding reduction in the valuation allowance) | 52.3 | — | — | ||||||||||||||
Non-taxable income and nondeductible benefits, net | 5 | 32.3 | 0.7 | ||||||||||||||
State taxes | 1.9 | 1.4 | 0.9 | ||||||||||||||
Provision for tax issues, tax credits and other | 3.9 | (.5 | ) | 0.5 | |||||||||||||
Effective tax rate | (56.8 | )% | (41.9 | )% | (9.6 | )% | |||||||||||
Schedule of deferred tax assets and liabilities | ' | ||||||||||||||||
The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Net federal operating loss carryforwards | $ | 1,240.20 | $ | 1,330.20 | |||||||||||||
Net state operating loss carryforwards | 20 | 16.2 | |||||||||||||||
Tax credits | 43.9 | 39.2 | |||||||||||||||
Capital loss carryforwards | 13.4 | 296.2 | |||||||||||||||
Deductible temporary differences: | |||||||||||||||||
Investments | 74.3 | — | |||||||||||||||
Insurance liabilities | 723.8 | 746.3 | |||||||||||||||
Other | 64.7 | 86 | |||||||||||||||
Gross deferred tax assets | 2,180.30 | 2,514.10 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Investments | — | (24.1 | ) | ||||||||||||||
Present value of future profits and deferred acquisition costs | (306.8 | ) | (325.2 | ) | |||||||||||||
Accumulated other comprehensive income | (405.5 | ) | (655.3 | ) | |||||||||||||
Gross deferred tax liabilities | (712.3 | ) | (1,004.6 | ) | |||||||||||||
Net deferred tax assets before valuation allowance | 1,468.00 | 1,509.50 | |||||||||||||||
Valuation allowance | (294.8 | ) | (766.9 | ) | |||||||||||||
Net deferred tax assets | 1,173.20 | 742.6 | |||||||||||||||
Current income taxes accrued | (26.0 | ) | (25.7 | ) | |||||||||||||
Income tax assets, net | $ | 1,147.20 | $ | 716.9 | |||||||||||||
Summary of valuation allowance | ' | ||||||||||||||||
Changes in our valuation allowance are summarized as follows (dollars in millions): | |||||||||||||||||
Balance, December 31, 2010 | $ | 1,081.40 | |||||||||||||||
Decrease in 2011 | (143.0 | ) | (a) | ||||||||||||||
Balance, December 31, 2011 | 938.4 | ||||||||||||||||
Decrease in 2012 | (171.5 | ) | (b) | ||||||||||||||
Balance, December 31, 2012 | 766.9 | ||||||||||||||||
Decrease in 2013 | (472.1 | ) | (c) | ||||||||||||||
Balance, December 31, 2013 | $ | 294.8 | |||||||||||||||
___________________ | |||||||||||||||||
(a) | The $143.0 million reduction to the deferred tax valuation allowance during 2011 resulted primarily from our recent higher levels of operating income when projecting future taxable income. | ||||||||||||||||
(b) | The $171.5 million reduction to the deferred tax valuation allowance during 2012 resulted primarily from: (i) higher taxable income in 2012 (including investment gains); and (ii) our recent higher levels of operating income when projecting future taxable income. | ||||||||||||||||
(c) | The $472.1 million reduction to the deferred tax valuation allowance during 2013 resulted from: (i) $19.7 million applicable to higher current year income; (ii) $114.7 million applicable to higher levels of income on projected future taxable income; (iii) $26.5 million related to the utilization of capital loss carryforwards; (iv) $159.4 million related to the expiration of capital loss carryforwards; (v) $71.8 million applicable to the classification of a portion of the CODI; (vi) $64.7 million related to the completion of certain investment trading strategies; and (vii) other reductions totaling $15.3 million. | ||||||||||||||||
Summary of operating loss carryforwards | ' | ||||||||||||||||
As of December 31, 2013, we had $3.5 billion of federal NOLs and $38.2 million of capital loss carryforwards. The following table summarizes the expiration dates of our loss carryforwards assuming the IRS ultimately agrees with the position we have taken with respect to the loss on our investment in CSHI (dollars in millions): | |||||||||||||||||
Year of expiration | Net operating loss carryforwards | Capital loss | Total loss | ||||||||||||||
Life | Non-life | carryforwards | carryforwards | ||||||||||||||
2014 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | |||||||||
2016 | — | — | 1.9 | 1.9 | |||||||||||||
2018 | 314.9 | — | — | 314.9 | |||||||||||||
2021 | 30 | — | — | 30 | |||||||||||||
2022 | 202 | — | — | 202 | |||||||||||||
2023 | 742.6 | 2,199.20 | — | 2,941.80 | |||||||||||||
2025 | — | 118.6 | — | 118.6 | |||||||||||||
2027 | — | 220.6 | — | 220.6 | |||||||||||||
2028 | — | 0.5 | — | 0.5 | |||||||||||||
2029 | — | 272.3 | — | 272.3 | |||||||||||||
2032 | — | 44 | — | 44 | |||||||||||||
Subtotal | 1,289.50 | 2,855.20 | 2.1 | 4,146.80 | |||||||||||||
Less: | |||||||||||||||||
Unrecognized tax benefits | (379.0 | ) | (222.4 | ) | 36.1 | (565.3 | ) | ||||||||||
Total | $ | 910.5 | $ | 2,632.80 | $ | 38.2 | $ | 3,581.50 | |||||||||
Schedule of unrecognized tax benefits | ' | ||||||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2013 and 2012 is as follows (dollars in millions): | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Balance at beginning of year | $ | 310.5 | $ | 318.2 | |||||||||||||
Increase based on tax positions taken in prior years | 35.6 | 7.3 | |||||||||||||||
Decrease based on tax positions taken in prior years | (27.0 | ) | (15.0 | ) | |||||||||||||
Increase based on tax positions taken in the current year | 47.6 | — | |||||||||||||||
Decrease in unrecognized tax benefits related to settlements with taxing authorities | (140.0 | ) | — | ||||||||||||||
Balance at end of year | $ | 226.7 | $ | 310.5 | |||||||||||||
NOTES_PAYABLE_DIRECT_CORPORATE1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (TABLES) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of long-term debt instruments | ' | |||||||
The following notes payable were direct corporate obligations of the Company as of December 31, 2013 and 2012 (dollars in millions): | ||||||||
2013 | 2012 | |||||||
Senior Secured Credit Agreement (as defined below) | $ | 581.5 | $ | 644.6 | ||||
6.375% Senior Secured Notes due October 2020 (the "6.375% Notes") | 275 | 275 | ||||||
7.0% Debentures | 3.5 | 93 | ||||||
Unamortized discount on Senior Secured Credit Agreement | (3.6 | ) | (5.0 | ) | ||||
Unamortized discount on 7.0% Debentures | — | (3.4 | ) | |||||
Direct corporate obligations | $ | 856.4 | $ | 1,004.20 | ||||
Sources and uses of recapitalization transactions | ' | |||||||
In the third quarter of 2012, as further discussed below, we completed a comprehensive recapitalization plan. The following table sets forth the sources and uses of cash from the recapitalization transactions (dollars in millions): | ||||||||
Sources: | ||||||||
Senior Secured Credit Agreement | $ | 669.5 | ||||||
Issuance of 6.375% Notes | 275 | |||||||
Total sources | $ | 944.5 | ||||||
Uses: | ||||||||
Cash on hand for general corporate purposes | $ | 13.7 | ||||||
Repurchase of $200 million principal amount of 7.0% Debentures pursuant to Debenture Repurchase Agreement | 355.1 | |||||||
Repayment of Previous Senior Secured Credit Agreement | 223.8 | |||||||
Repayment of $275.0 million principal amount of 9.0% Notes, including redemption premium | 322.7 | |||||||
Debt issuance costs | 23.1 | |||||||
Accrued interest | 6.1 | |||||||
Total uses | $ | 944.5 | ||||||
Schedule of maturities of long-term debt | ' | |||||||
Scheduled Repayment of our Direct Corporate Obligations | ||||||||
The scheduled repayment of our direct corporate obligations was as follows at December 31, 2013 (dollars in millions): | ||||||||
Year ending December 31, | ||||||||
2014 | $ | 59.4 | ||||||
2015 | 79.3 | |||||||
2016 | 64 | |||||||
2017 | 4.2 | |||||||
2018 | 378.1 | |||||||
Thereafter | 275 | |||||||
$ | 860 | |||||||
LITIGATION_AND_OTHER_LEGAL_PRO1
LITIGATION AND OTHER LEGAL PROCEEDINGS (TABLES) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of future required minimum payments | ' | |||
Future required minimum payments as of December 31, 2013, were as follows (dollars in millions): | ||||
2014 | $ | 43.4 | ||
2015 | 31.2 | |||
2016 | 23.8 | |||
2017 | 19.2 | |||
2018 | 17.4 | |||
Thereafter | 11.2 | |||
Total | $ | 146.2 | ||
AGENT_DEFERRED_COMPENSATION_PL1
AGENT DEFERRED COMPENSATION PLAN (TABLES) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
General Discussion of Pension and Other Postretirement Benefits [Abstract] | ' | |||||
Schedule of assumptions used | ' | |||||
We used the following assumptions for the deferred compensation plan to calculate: | ||||||
2013 | 2012 | |||||
Benefit obligations: | ||||||
Discount rate | 4.75 | % | 4 | % | ||
Net periodic cost: | ||||||
Discount rate | 4 | % | 4.5 | % | ||
Schedule of expected benefit payments | ' | |||||
The benefits expected to be paid pursuant to our agent deferred compensation plan as of December 31, 2013 were as follows (dollars in millions): | ||||||
2014 | $ | 6 | ||||
2015 | 6.2 | |||||
2016 | 6.4 | |||||
2017 | 6.7 | |||||
2018 | 7.2 | |||||
2019 - 2023 | 41.9 | |||||
SHAREHOLDERS_EQUITY_TABLES
SHAREHOLDERS' EQUITY (TABLES) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||
Schedule of common stock outstanding | ' | ||||||||||||||||
Changes in the number of shares of common stock outstanding were as follows (shares in thousands): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Balance, beginning of year | 221,502 | 241,305 | 251,084 | ||||||||||||||
Treasury stock purchased and retired | (8,949 | ) | (21,533 | ) | (11,120 | ) | |||||||||||
Conversion of 7.0% Debentures | 4,739 | — | — | ||||||||||||||
Stock options exercised | 2,087 | 1,191 | 862 | ||||||||||||||
Restricted and performance stock vested | 945 | (a) | 539 | (a) | 479 | (a) | |||||||||||
Balance, end of year | 220,324 | 221,502 | 241,305 | ||||||||||||||
____________________ | |||||||||||||||||
(a) | In 2013, 2012 and 2011, such amount was reduced by 472 thousand shares, 237 thousand shares and 200 thousand shares, respectively, which were tendered for the payment of required federal and state tax withholdings owed on the vesting of restricted stock. | ||||||||||||||||
Schedule of share-based compensation | ' | ||||||||||||||||
A summary of the Company's stock option activity and related information for 2013 is presented below (shares in thousands; dollars in millions, except per share amounts): | |||||||||||||||||
Shares | Weighted average exercise price | Weighted average remaining life (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at the beginning of the year | 6,655 | $ | 9.72 | ||||||||||||||
Options granted | 1,447 | 11.01 | |||||||||||||||
Exercised | (2,087 | ) | 7.27 | $ | 6 | ||||||||||||
Forfeited or terminated | (436 | ) | 13.95 | ||||||||||||||
Outstanding at the end of the year | 5,579 | 10.64 | 4 | $ | 32.5 | ||||||||||||
Options exercisable at the end of the year | 2,529 | 2.1 | $ | 13.9 | |||||||||||||
Available for future grant | 9,099 | ||||||||||||||||
A summary of the Company's stock option activity and related information for 2012 is presented below (shares in thousands; dollars in millions, except per share amounts): | |||||||||||||||||
Shares | Weighted average exercise price | Weighted average remaining life (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at the beginning of the year | 7,712 | $ | 10.13 | ||||||||||||||
Options granted | 1,389 | 7.55 | |||||||||||||||
Exercised | (1,191 | ) | 3.14 | $ | 2.7 | ||||||||||||
Forfeited or terminated | (1,255 | ) | 16.13 | ||||||||||||||
Outstanding at the end of the year | 6,655 | 9.72 | 3.4 | $ | 30.2 | ||||||||||||
Options exercisable at the end of the year | 3,715 | 1.7 | $ | 15.5 | |||||||||||||
Available for future grant | 9,713 | ||||||||||||||||
A summary of the Company's stock option activity and related information for 2011 is presented below (shares in thousands; dollars in millions, except per share amounts): | |||||||||||||||||
Shares | Weighted average exercise price | Weighted average remaining life (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at the beginning of the year | 9,754 | $ | 10.87 | ||||||||||||||
Options granted | 1,262 | 7.38 | |||||||||||||||
Exercised | (862 | ) | 2.52 | $ | 1.3 | ||||||||||||
Forfeited or terminated | (2,442 | ) | 14.35 | ||||||||||||||
Outstanding at the end of the year | 7,712 | 10.13 | 3.1 | $ | 31.3 | ||||||||||||
Options exercisable at the end of the year | 4,135 | 1.8 | $ | 18 | |||||||||||||
Available for future grant | 11,044 | ||||||||||||||||
Schedule of valuation assumptions on payment awards | ' | ||||||||||||||||
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Grants | Grants | Grants | |||||||||||||||
Weighted average risk-free interest rates | 0.8 | % | 0.9 | % | 2.2 | % | |||||||||||
Weighted average dividend yields | 0.7 | % | — | % | — | % | |||||||||||
Volatility factors | 107 | % | 108 | % | 107 | % | |||||||||||
Weighted average expected life (in years) | 4.8 | 4.7 | 4.8 | ||||||||||||||
Weighted average fair value per share | $ | 8.02 | $ | 5.76 | $ | 5.68 | |||||||||||
Schedule of share-based compensation by exercise price range | ' | ||||||||||||||||
The following table summarizes information about stock options outstanding at December 31, 2013 (shares in thousands): | |||||||||||||||||
Options outstanding | Options exercisable | ||||||||||||||||
Range of exercise prices | Number outstanding | Remaining life (in years) | Average exercise price | Number exercisable | Average exercise price | ||||||||||||
$1.13 | 76 | 0.3 | $ | 1.13 | 76 | $ | 1.13 | ||||||||||
$3.05 - $3.11 | 272 | 0.4 | 3.05 | 272 | 3.05 | ||||||||||||
$5.78 - $6.77 | 726 | 3.2 | 6.45 | 723 | 6.45 | ||||||||||||
$7.38 - $7.74 | 1,964 | 4.8 | 7.46 | 382 | 7.39 | ||||||||||||
$8.29 - $12.34 | 1,415 | 6.1 | 10.77 | — | — | ||||||||||||
$12.74 - $18.97 | 91 | 4 | 16.23 | 41 | 18.9 | ||||||||||||
$20.00 - $25.45 | 1,035 | 1.2 | 21.62 | 1,035 | 21.62 | ||||||||||||
5,579 | 2,529 | ||||||||||||||||
Schedule of nonvested share activity | ' | ||||||||||||||||
A summary of the Company's non-vested restricted stock activity for 2013 is presented below (shares in thousands): | |||||||||||||||||
Shares | Weighted average grant date fair value | ||||||||||||||||
Non-vested shares, beginning of year | 1,162 | $ | 7.08 | ||||||||||||||
Granted | 178 | 12 | |||||||||||||||
Vested | (749 | ) | 7.42 | ||||||||||||||
Forfeited | (70 | ) | 6.94 | ||||||||||||||
Non-vested shares, end of year | 521 | 8.29 | |||||||||||||||
Schedule of performance share-based compensation | ' | ||||||||||||||||
A summary of the Company's performance units is presented below (shares in thousands): | |||||||||||||||||
Total shareholder return awards | Operating return on equity awards | Pre-tax operating income awards | |||||||||||||||
Awards outstanding at December 31, 2010 | — | 555 | 652 | ||||||||||||||
Granted in 2011 | — | — | 417 | ||||||||||||||
Forfeited | — | (555 | ) | (233 | ) | ||||||||||||
Awards outstanding at December 31, 2011 | — | — | 836 | ||||||||||||||
Granted in 2012 | 203 | — | 203 | ||||||||||||||
Forfeited | (10 | ) | — | (62 | ) | ||||||||||||
Awards outstanding at December 31, 2012 | 193 | — | 977 | ||||||||||||||
Granted in 2013 | 212 | 212 | — | ||||||||||||||
Additional shares issued pursuant to achieving certain performance criteria (a) | — | — | 223 | ||||||||||||||
Shares vested in 2013 | — | — | (668 | ) | |||||||||||||
Forfeited | (23 | ) | (8 | ) | (62 | ) | |||||||||||
Awards outstanding at December 31, 2013 | 382 | 204 | 470 | ||||||||||||||
Schedule of earnings per share reconciliation | ' | ||||||||||||||||
A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Net income for basic earnings per share | $ | 478 | $ | 221 | $ | 335.7 | |||||||||||
Add: interest expense on 7.0% Debentures, net of income taxes | 1.6 | 12.2 | 14.7 | ||||||||||||||
Net income for diluted earnings per share | $ | 479.6 | $ | 233.2 | $ | 350.4 | |||||||||||
Shares: | |||||||||||||||||
Weighted average shares outstanding for basic earnings per share | 221,628 | 233,685 | 247,952 | ||||||||||||||
Effect of dilutive securities on weighted average shares: | |||||||||||||||||
7.0% Debentures | 5,780 | 44,037 | 53,367 | ||||||||||||||
Stock options, restricted stock and performance units | 2,776 | 2,762 | 2,513 | ||||||||||||||
Warrants | 2,518 | 943 | 249 | ||||||||||||||
Dilutive potential common shares | 11,074 | 47,742 | 56,129 | ||||||||||||||
Weighted average shares outstanding for diluted earnings per share | 232,702 | 281,427 | 304,081 | ||||||||||||||
OTHER_OPERATING_STATEMENT_DATA1
OTHER OPERATING STATEMENT DATA (TABLES) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Other Operating Statement Data [Abstract] | ' | |||||||||||
Schedule of insurance policy income | ' | |||||||||||
Insurance policy income consisted of the following (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Direct premiums collected | $ | 3,966.00 | $ | 3,883.10 | $ | 4,214.70 | ||||||
Reinsurance assumed | 38 | 70.4 | 87.7 | |||||||||
Reinsurance ceded | (240.5 | ) | (237.1 | ) | (243.2 | ) | ||||||
Premiums collected, net of reinsurance | 3,763.50 | 3,716.40 | 4,059.20 | |||||||||
Change in unearned premiums | (16.6 | ) | 20.8 | 17.2 | ||||||||
Less premiums on interest-sensitive life and products without mortality and morbidity risk which are recorded as additions to insurance liabilities | (1,298.1 | ) | (1,296.7 | ) | (1,693.5 | ) | ||||||
Premiums on traditional products with mortality or morbidity risk | 2,448.80 | 2,440.50 | 2,382.90 | |||||||||
Fees and surrender charges on interest-sensitive products | 295.9 | 314.9 | 307.6 | |||||||||
Insurance policy income | $ | 2,744.70 | $ | 2,755.40 | $ | 2,690.50 | ||||||
Schedule of other operating cost and expense | ' | |||||||||||
Other operating costs and expenses were as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Commission expense | $ | 103.8 | $ | 115.8 | $ | 131.7 | ||||||
Salaries and wages | 234 | 226.6 | 212.2 | |||||||||
Other | 428.4 | 476.9 | 360.6 | |||||||||
Total other operating costs and expenses | $ | 766.2 | $ | 819.3 | $ | 704.5 | ||||||
Schedule of changes in present value of future insurance profits | ' | |||||||||||
Changes in the present value of future profits were as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 626 | $ | 697.7 | $ | 1,008.60 | ||||||
Amortization | (92.0 | ) | (93.5 | ) | (113.7 | ) | ||||||
Amounts related to fair value adjustment of fixed maturities, available for sale | 145.3 | 21.8 | (197.2 | ) | ||||||||
Balance, end of year | $ | 679.3 | $ | 626 | $ | 697.7 | ||||||
Schedule of changes in deferred acquisition costs | ' | |||||||||||
Changes in deferred acquisition costs were as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance, beginning of year | $ | 629.7 | $ | 797.1 | $ | 999.6 | ||||||
Additions | 222.8 | 191.7 | 216.7 | |||||||||
Amortization | (204.3 | ) | (195.5 | ) | (183.7 | ) | ||||||
Amounts related to fair value adjustment of fixed maturities, available for sale | 315.9 | (163.6 | ) | (235.5 | ) | |||||||
Other | 4 | — | — | |||||||||
Balance, end of year | $ | 968.1 | $ | 629.7 | $ | 797.1 | ||||||
CONSOLIDATED_STATEMENT_CASH_FL1
CONSOLIDATED STATEMENT CASH FLOWS (TABLES) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||||||
Schedule of the reconciliation for net income provided by operating activities | ' | |||||||||||
The following reconciles net income to net cash provided by operating activities (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 478 | $ | 221 | $ | 335.7 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Amortization and depreciation | 324.6 | 315 | 323.6 | |||||||||
Income taxes | (181.2 | ) | (71.8 | ) | (32.9 | ) | ||||||
Insurance liabilities | 465.8 | 330 | 346.4 | |||||||||
Accrual and amortization of investment income | (276.3 | ) | (100.7 | ) | 64.5 | |||||||
Deferral of policy acquisition costs | (222.8 | ) | (191.7 | ) | (216.7 | ) | ||||||
Net realized investment gains | (33.6 | ) | (81.1 | ) | (61.8 | ) | ||||||
Loss related to reinsurance transaction | 98.4 | — | — | |||||||||
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 | |||||||||
Other | 2.1 | 14 | 12.6 | |||||||||
Net cash provided by operating activities | $ | 720.4 | $ | 634.9 | $ | 774.8 | ||||||
Schedule of other significant noncash transactions | ' | |||||||||||
Non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Stock options, restricted stock and performance units | $ | 15.1 | $ | 13.7 | $ | 5.2 | ||||||
STATUTORY_INFORMATION_BASED_ON1
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) (TABLES) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Statutory Information [Abstract] | ' | |||||||
Schedule of statutory accounting practices | ' | |||||||
The Company's insurance subsidiaries reported the following amounts to regulatory agencies, after appropriate elimination of intercompany accounts among such subsidiaries (dollars in millions): | ||||||||
2013 | 2012 | |||||||
Statutory capital and surplus | $ | 1,711.90 | $ | 1,560.40 | ||||
Asset valuation reserve | 233.9 | 222.2 | ||||||
Interest maintenance reserve | 582.4 | 585.8 | ||||||
Total | $ | 2,528.20 | $ | 2,368.40 | ||||
BUSINESS_SEGMENTS_TABLES
BUSINESS SEGMENTS (TABLES) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Schedule of segment reporting information by segment | ' | |||||||||||
Operating information by segment was as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Bankers Life: | ||||||||||||
Insurance policy income: | ||||||||||||
Annuities | $ | 28.9 | $ | 28.4 | $ | 33.4 | ||||||
Health | 1,311.20 | 1,342.70 | 1,347.30 | |||||||||
Life | 308.6 | 286.3 | 231.7 | |||||||||
Net investment income (a) | 1,005.70 | 838.9 | 766.3 | |||||||||
Fee revenue and other income (a) | 19 | 15.2 | 13.8 | |||||||||
Total Bankers Life revenues | 2,673.40 | 2,511.50 | 2,392.50 | |||||||||
Washington National: | ||||||||||||
Insurance policy income: | ||||||||||||
Health | 586.5 | 575.2 | 569.5 | |||||||||
Life | 14.2 | 15.2 | 15.6 | |||||||||
Net investment income (a) | 206.5 | 204.1 | 189.5 | |||||||||
Fee revenue and other income (a) | 0.9 | 1.1 | 1 | |||||||||
Total Washington National revenues | 808.1 | 795.6 | 775.6 | |||||||||
Colonial Penn: | ||||||||||||
Insurance policy income: | ||||||||||||
Health | 4.3 | 5.2 | 5.9 | |||||||||
Life | 227.8 | 212.6 | 197.1 | |||||||||
Net investment income (a) | 40 | 40.4 | 41.1 | |||||||||
Fee revenue and other income (a) | 0.8 | 0.7 | 0.9 | |||||||||
Total Colonial Penn revenues | 272.9 | 258.9 | 245 | |||||||||
Other CNO Business: | ||||||||||||
Insurance policy income: | ||||||||||||
Annuities | 12.1 | 10.6 | 12.2 | |||||||||
Health | 24.7 | 26.3 | 29.4 | |||||||||
Life | 226.4 | 252.9 | 248.4 | |||||||||
Net investment income (a) | 341.8 | 340.6 | 344.1 | |||||||||
Fee revenue and other income (a) | 5.1 | — | — | |||||||||
Total Other CNO Business revenues | 610.1 | 630.4 | 634.1 | |||||||||
Corporate operations: | ||||||||||||
Net investment income | 39.8 | 62.4 | 13.1 | |||||||||
Fee and other income | 6.2 | 2.8 | 2.5 | |||||||||
Total corporate revenues | 46 | 65.2 | 15.6 | |||||||||
Total revenues | 4,410.50 | 4,261.60 | 4,062.80 | |||||||||
(continued on next page) | ||||||||||||
(continued from previous page) | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Expenses: | ||||||||||||
Bankers Life: | ||||||||||||
Insurance policy benefits | $ | 1,788.70 | $ | 1,642.90 | $ | 1,570.10 | ||||||
Amortization | 187.5 | 187.6 | 206.3 | |||||||||
Interest expense on investment borrowings | 6.7 | 5.3 | 4.8 | |||||||||
Other operating costs and expenses | 380 | 374.8 | 320.4 | |||||||||
Total Bankers Life expenses | 2,362.90 | 2,210.60 | 2,101.60 | |||||||||
Washington National: | ||||||||||||
Insurance policy benefits | 470.5 | 447.1 | 464.5 | |||||||||
Amortization | 53.8 | 47.7 | 44.9 | |||||||||
Interest expense on investment borrowings | 1.9 | 2.8 | 0.7 | |||||||||
Other operating costs and expenses | 161.1 | 170.9 | 169.4 | |||||||||
Total Washington National expenses | 687.3 | 668.5 | 679.5 | |||||||||
Colonial Penn: | ||||||||||||
Insurance policy benefits | 165.7 | 161.1 | 150.1 | |||||||||
Amortization | 14.5 | 15 | 15 | |||||||||
Other operating costs and expenses | 105.2 | 91.4 | 84.6 | |||||||||
Total Colonial Penn expenses | 285.4 | 267.5 | 249.7 | |||||||||
Other CNO Business: | ||||||||||||
Insurance policy benefits | 469.2 | 508.4 | 479.9 | |||||||||
Amortization | 19.9 | 33.8 | 39.8 | |||||||||
Interest expense on investment borrowings | 19.3 | 19.9 | 20.3 | |||||||||
Other operating costs and expenses | 76.2 | 117.1 | 78.8 | |||||||||
Total Other CNO Business expenses | 584.6 | 679.2 | 618.8 | |||||||||
Corporate operations: | ||||||||||||
Interest expense on corporate debt | 51.3 | 66.2 | 76.3 | |||||||||
Interest expense on borrowings of variable interest entities | 0.1 | 20 | 11.8 | |||||||||
Interest expense on investment borrowings | — | 0.4 | 0.2 | |||||||||
Other operating costs and expenses | 27.3 | 65.1 | 51.3 | |||||||||
Total corporate expenses | 78.7 | 151.7 | 139.6 | |||||||||
Total expenses | 3,998.90 | 3,977.50 | 3,789.20 | |||||||||
Income (loss) before loss related to reinsurance transaction, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, loss on extinguishment of debt and income taxes: | ||||||||||||
Bankers Life | 310.5 | 300.9 | 290.9 | |||||||||
Washington National | 120.8 | 127.1 | 96.1 | |||||||||
Colonial Penn | (12.5 | ) | (8.6 | ) | (4.7 | ) | ||||||
Other CNO Business | 25.5 | (48.8 | ) | 15.3 | ||||||||
Corporate operations | (32.7 | ) | (86.5 | ) | (124.0 | ) | ||||||
Income before loss related to reinsurance transaction, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, loss on extinguishment of debt and income taxes | $ | 411.6 | $ | 284.1 | $ | 273.6 | ||||||
___________________ | ||||||||||||
(a) | It is not practicable to provide additional components of revenue by product or services. | |||||||||||
Reconciliation of operating profit (loss) from segments to consolidated | ' | |||||||||||
A reconciliation of segment revenues and expenses to consolidated revenues and expenses is as follows (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Total segment revenues | $ | 4,410.50 | $ | 4,261.60 | $ | 4,062.80 | ||||||
Net realized investment gains | 33.4 | 81.1 | 61.8 | |||||||||
Revenues related to certain non-strategic investments and earnings attributable to non-controlling interests | 32.2 | — | — | |||||||||
Consolidated revenues | $ | 4,476.10 | $ | 4,342.70 | $ | 4,124.60 | ||||||
Total segment expenses | $ | 3,998.90 | $ | 3,977.50 | $ | 3,789.20 | ||||||
Loss related to reinsurance transaction | 98.4 | — | — | |||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities (a) | (54.4 | ) | 4.4 | 34.4 | ||||||||
Amortization related to fair value changes in embedded derivative liabilities (a) | 19 | (1.6 | ) | (14.0 | ) | |||||||
Amortization related to net realized investment gains | 1.6 | 6.5 | 5.4 | |||||||||
Expenses related to certain non-strategic investments and earnings attributable to non-controlling interests | 42.4 | — | — | |||||||||
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 | |||||||||
Consolidated expenses | $ | 4,171.30 | $ | 4,187.00 | $ | 3,818.40 | ||||||
____________ | ||||||||||||
(a) | Prior to June 30, 2011, we maintained a specific block of investments in our trading securities account (which we carried at estimated fair value with changes in such value recognized as investment income from policyholder and reinsurer accounts and other special-purpose portfolios) to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio, which resulted in $35.4 million, $(2.8) million and $(20.4) million of increased (decreased) earnings in 2013, 2012 and 2011, respectively, since the volatility caused by the accounting requirements to record embedded options at fair value was no longer being offset. | |||||||||||
Schedule of balance sheet information by segment | ' | |||||||||||
Segment balance sheet information was as follows (dollars in millions): | ||||||||||||
2013 | 2012 | |||||||||||
Assets: | ||||||||||||
Bankers Life | $ | 18,230.20 | $ | 17,637.70 | ||||||||
Washington National | 4,655.30 | 4,499.50 | ||||||||||
Colonial Penn | 891.1 | 917.8 | ||||||||||
Other CNO Business | 8,483.70 | 8,679.50 | ||||||||||
Corporate operations | 2,520.30 | 2,396.90 | ||||||||||
Total assets | $ | 34,780.60 | $ | 34,131.40 | ||||||||
Liabilities: | ||||||||||||
Bankers Life | $ | 15,866.40 | $ | 15,590.10 | ||||||||
Washington National | 3,665.20 | 3,425.60 | ||||||||||
Colonial Penn | 766.6 | 749.6 | ||||||||||
Other CNO Business | 7,531.20 | 7,451.10 | ||||||||||
Corporate operations | 1,996.00 | 1,865.70 | ||||||||||
Total liabilities | $ | 29,825.40 | $ | 29,082.10 | ||||||||
Schedule of selected financial information by segment | ' | |||||||||||
The following table presents selected financial information of our segments (dollars in millions): | ||||||||||||
Segment | Present value of future profits | Deferred acquisition costs | Insurance liabilities | |||||||||
2013 | ||||||||||||
Bankers Life | $ | 263.2 | $ | 627.8 | $ | 14,575.00 | ||||||
Washington National | 343.2 | 182.6 | 2,919.00 | |||||||||
Colonial Penn | 55.7 | 67.4 | 766.2 | |||||||||
Other CNO Business | 17.2 | 90.3 | 6,615.60 | |||||||||
Total | $ | 679.3 | $ | 968.1 | $ | 24,875.80 | ||||||
2012 | ||||||||||||
Bankers Life | $ | 168.8 | $ | 332.8 | $ | 14,548.00 | ||||||
Washington National | 375.8 | 157.3 | 2,911.70 | |||||||||
Colonial Penn | 63.6 | 57.5 | 763.1 | |||||||||
Other CNO Business | 17.8 | 82.1 | 6,866.70 | |||||||||
Total | $ | 626 | $ | 629.7 | $ | 25,089.50 | ||||||
QUARTERLY_FINANCIAL_DATA_TABLE
QUARTERLY FINANCIAL DATA (TABLES) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Data [Abstract] | ' | |||||||||||||||
Schedule of quarterly financial information | ' | |||||||||||||||
Quarterly financial data (unaudited) were as follows (dollars in millions, except per share data): | ||||||||||||||||
2013 | 1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | ||||||||||||
Revenues | $ | 1,142.60 | $ | 1,081.50 | $ | 1,093.80 | $ | 1,158.20 | ||||||||
Income before income taxes | $ | 34.6 | $ | 114.7 | $ | 114.4 | $ | 41.1 | ||||||||
Income tax expense (benefit) | 22.7 | 37.6 | (168.6 | ) | (64.9 | ) | ||||||||||
Net income | $ | 11.9 | $ | 77.1 | $ | 283 | $ | 106 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income | $ | 0.05 | $ | 0.35 | $ | 1.27 | $ | 0.48 | ||||||||
Diluted: | ||||||||||||||||
Net income | $ | 0.05 | $ | 0.34 | $ | 1.23 | $ | 0.47 | ||||||||
2012 | 1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | ||||||||||||
Revenues | $ | 1,123.90 | $ | 1,065.00 | $ | 1,093.00 | $ | 1,060.80 | ||||||||
Income (loss) before income taxes | $ | 92.3 | $ | 104.5 | $ | (158.8 | ) | $ | 117.7 | |||||||
Income tax expense (benefit) | 33.2 | 38.8 | (153.8 | ) | 16.5 | |||||||||||
Net income (loss) | $ | 59.1 | $ | 65.7 | $ | (5.0 | ) | $ | 101.2 | |||||||
Earnings per common share: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income (loss) | $ | 0.25 | $ | 0.28 | $ | (.02 | ) | $ | 0.45 | |||||||
Diluted: | ||||||||||||||||
Net income (loss) | $ | 0.21 | $ | 0.24 | $ | (.02 | ) | $ | 0.41 | |||||||
INVESTMENTS_IN_VARIABLE_INTERE1
INVESTMENTS IN VARIABLE INTEREST ENTITIES (TABLES) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Investments in Variable Interest Entities [Abstract] | ' | |||||||||||
Schedule of impact on balance sheet of consolidating variable interest entities | ' | |||||||||||
The following table provides supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions): | ||||||||||||
December 31, 2013 | ||||||||||||
VIEs | Eliminations | Net effect on | ||||||||||
consolidated | ||||||||||||
balance sheet | ||||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 1,046.70 | $ | — | $ | 1,046.70 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | — | (108.5 | ) | (108.5 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 104.3 | — | 104.3 | |||||||||
Accrued investment income | 1.9 | — | 1.9 | |||||||||
Income tax assets, net | 5.4 | (2.5 | ) | 2.9 | ||||||||
Other assets | 22.6 | (.9 | ) | 21.7 | ||||||||
Total assets | $ | 1,180.90 | $ | (111.9 | ) | $ | 1,069.00 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 66 | $ | (4.0 | ) | $ | 62 | |||||
Borrowings related to variable interest entities | 1,012.30 | — | 1,012.30 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 112.5 | (112.5 | ) | — | ||||||||
Total liabilities | $ | 1,190.80 | $ | (116.5 | ) | $ | 1,074.30 | |||||
December 31, 2012 | ||||||||||||
VIEs | Eliminations | Net effect on | ||||||||||
consolidated | ||||||||||||
balance sheet | ||||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 814.3 | $ | — | $ | 814.3 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | — | (78.5 | ) | (78.5 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 54.2 | — | 54.2 | |||||||||
Accrued investment income | 1.8 | — | 1.8 | |||||||||
Income tax assets, net | 3.3 | (2.6 | ) | 0.7 | ||||||||
Other assets | 9.6 | — | 9.6 | |||||||||
Total assets | $ | 883.2 | $ | (81.1 | ) | $ | 802.1 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 39.9 | $ | (3.3 | ) | $ | 36.6 | |||||
Borrowings related to variable interest entities | 767 | — | 767 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 82.5 | (82.5 | ) | — | ||||||||
Total liabilities | $ | 889.4 | $ | (85.8 | ) | $ | 803.6 | |||||
Schedule of supplemental information for revenues and expenses of variable interest entities | ' | |||||||||||
The following table provides supplemental information about the revenues and expenses of the VIEs which have been consolidated in accordance with authoritative guidance, after giving effect to the elimination of our investment in the VIEs and investment management fees earned by a subsidiary of the Company (dollars in millions): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Net investment income – policyholder and reinsurer accounts and other special-purpose portfolios | $ | 42.3 | $ | 31.3 | $ | 18.8 | ||||||
Fee revenue and other income | 1.8 | 1.6 | 1.2 | |||||||||
Total revenues | 44.1 | 32.9 | 20 | |||||||||
Expenses: | ||||||||||||
Interest expense | 26 | 20 | 11.8 | |||||||||
Other operating expenses | 1.4 | 0.6 | 0.7 | |||||||||
Total expenses | 27.4 | 20.6 | 12.5 | |||||||||
Income before net realized investment losses and income taxes | 16.7 | 12.3 | 7.5 | |||||||||
Net realized investment losses | (1.6 | ) | (.4 | ) | (1.3 | ) | ||||||
Income before income taxes | $ | 15.1 | $ | 11.9 | $ | 6.2 | ||||||
Summary of variable interest entities by contractual maturity | ' | |||||||||||
The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. | ||||||||||||
Amortized | Estimated | |||||||||||
cost | fair | |||||||||||
value | ||||||||||||
(Dollars in millions) | ||||||||||||
Due in one year or less | $ | 6.5 | $ | 6.5 | ||||||||
Due after one year through five years | 355.8 | 357.3 | ||||||||||
Due after five years through ten years | 682.8 | 682.9 | ||||||||||
Total | $ | 1,045.10 | $ | 1,046.70 | ||||||||
The following table sets forth the amortized cost and estimated fair value of those investments held by the VIEs with unrealized losses at December 31, 2013, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. | ||||||||||||
Amortized | Estimated | |||||||||||
cost | fair | |||||||||||
value | ||||||||||||
(Dollars in millions) | ||||||||||||
Due in one year or less | $ | 2.8 | $ | 2.8 | ||||||||
Due after one year through five years | 103.1 | 102.7 | ||||||||||
Due after five years through ten years | 260.6 | 257.9 | ||||||||||
Total | $ | 366.5 | $ | 363.4 | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Trading Securities | $247.60 | $266.20 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PRESENT VALUE OF FUTURE PROFITS (DETAILS) | 12 Months Ended |
Dec. 31, 2013 | |
Present Value of Future Insurance Profits [Abstract] | ' |
Discount rate used to determine present value of future insurance profits | 12.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REINSURANCE (DETAILS) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' |
Ceded premiums written | ' | $212.10 | $220 | $238.10 |
Reinsurance effect on claims and benefits incurred, amount ceded | ' | 196.2 | 210.2 | 204.9 |
Assumed premiums written | ' | 37.4 | 69.4 | 80.4 |
Ceded long-term reserves | 495 | ' | ' | ' |
Additional premiums paid by subsidiaries to enter into coinsurance agreement | 96.9 | ' | ' | ' |
Over-collateralization rate of market-value trusts | 7.00% | ' | ' | ' |
Loss related to reinsurance transaction (see note 2 - Reinsurance) | ' | 98.4 | 0 | 0 |
Coventry health care marketing and quota share agreements | ' | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' |
Assumed premiums written | ' | 19.7 | 49.9 | 58.1 |
Maximum | ' | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' |
Retained mortality risk on any policy | $0.80 | $0.80 | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INCOME TAXES (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, unless otherwise specified | ||||
Valuation Allowance [Line Items] | ' | ' | ' | ' |
Valuation allowance | $294.80 | $766.90 | $938.40 | $1,081.40 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVESTMENT BORROWINGS (DETAILS) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | $1,900,000,000 | $1,650,800,000 | ' |
Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 1,899,500,000 | 1,700,000,000 | ' |
Federal Home Loan Bank stock | 93,500,000 | ' | ' |
Federal Home Loan Bank, Advances, collateral pledged | 2,400,000,000 | ' | ' |
Interest expense on FHLB borrowings | 27,900,000 | 28,000,000 | 25,700,000 |
Aggregate fee to prepay all fixed rate FHLB borrowings | 48,500,000 | ' | ' |
Other borrowings | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 500,000 | 800,000 | ' |
Borrowings due February 2014 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 67,000,000 | ' | ' |
Maturity date | 28-Feb-14 | ' | ' |
Interest rate | 1.83% | ' | ' |
Borrowings due September 2015 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 30-Sep-15 | ' | ' |
Interest rate | 0.54% | ' | ' |
Borrowings due October 2015 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 150,000,000 | ' | ' |
Maturity date | 31-Oct-15 | ' | ' |
Interest rate | 0.52% | ' | ' |
Borrowings due November 2015 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 30-Nov-15 | ' | ' |
Interest rate | 0.32% | ' | ' |
Borrowings due November 2015 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 146,000,000 | ' | ' |
Maturity date | 30-Nov-15 | ' | ' |
Interest rate | 5.30% | ' | ' |
Borrowings due December 2015 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 31-Dec-15 | ' | ' |
Interest rate | 4.71% | ' | ' |
Borrowings due June 2016 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 30-Jun-16 | ' | ' |
Interest rate | 0.61% | ' | ' |
Borrowings due June 2016 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 75,000,000 | ' | ' |
Maturity date | 30-Jun-16 | ' | ' |
Interest rate | 0.41% | ' | ' |
Borrowings due October 2016 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 31-Oct-16 | ' | ' |
Interest rate | 0.43% | ' | ' |
Borrowings due November 2016 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 30-Nov-16 | ' | ' |
Interest rate | 0.51% | ' | ' |
Borrowings due November 2016 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 30-Nov-16 | ' | ' |
Interest rate | 0.64% | ' | ' |
Borrowings due June 2017 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 57,700,000 | ' | ' |
Maturity date | 30-Jun-17 | ' | ' |
Interest rate | 0.60% | ' | ' |
Borrowings due August 2017 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 31-Aug-17 | ' | ' |
Interest rate | 0.44% | ' | ' |
Borrowings due October 2017 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 31-Oct-17 | ' | ' |
Interest rate | 0.67% | ' | ' |
Borrowings due January 2018 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 31-Jan-18 | ' | ' |
Interest rate | 0.60% | ' | ' |
Borrowings due November 2017 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 37,000,000 | ' | ' |
Maturity date | 30-Nov-17 | ' | ' |
Interest rate | 3.75% | ' | ' |
Borrowings due November 2017 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 30-Nov-17 | ' | ' |
Interest rate | 0.75% | ' | ' |
Borrowings due January 2018 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 31-Jan-18 | ' | ' |
Interest rate | 0.58% | ' | ' |
Borrowings due July 2017 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 31-Jul-17 | ' | ' |
Interest rate | 3.90% | ' | ' |
Borrowings due August 2017 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 75,000,000 | ' | ' |
Maturity date | 31-Aug-17 | ' | ' |
Interest rate | 0.39% | ' | ' |
Borrowings due July 2018 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 31-Jul-18 | ' | ' |
Interest rate | 0.71% | ' | ' |
Borrowings due February 2018 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 28-Feb-18 | ' | ' |
Interest rate | 0.55% | ' | ' |
Borrowings due February 2018 rate two | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 22,000,000 | ' | ' |
Maturity date | 28-Feb-18 | ' | ' |
Interest rate | 0.57% | ' | ' |
Borrowings due May 2018 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 100,000,000 | ' | ' |
Maturity date | 30-May-18 | ' | ' |
Interest rate | 0.62% | ' | ' |
Borrowings due August 2018 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 50,000,000 | ' | ' |
Maturity date | 31-Aug-18 | ' | ' |
Interest rate | 0.36% | ' | ' |
Borrowings due June 2020 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 21,800,000 | ' | ' |
Maturity date | 30-Jun-20 | ' | ' |
Interest rate | 1.96% | ' | ' |
Borrowings due March 2023 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | 27,500,000 | ' | ' |
Maturity date | 31-Mar-23 | ' | ' |
Interest rate | 2.16% | ' | ' |
Borrowings due June 2025 | Federal Home Loan Bank advances | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ' | ' | ' |
Investment borrowings | $20,500,000 | ' | ' |
Maturity date | 30-Jun-25 | ' | ' |
Interest rate | 2.94% | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ACCOUNTING FOR DERIVATIVES (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Fixed maturity securities that contain embedded derivatives classified as trading securities | $180.60 | $196.60 | ' |
Equity swap | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Estimated fair value | 156.2 | 54.4 | ' |
Equity swap | Investment income | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Increase (decrease) in earnings due to sale of trading portfolio | 177.5 | 25.5 | -21.2 |
Embedded derivative financial instruments | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Increase (decrease) in earnings due to sale of trading portfolio | 35.4 | -2.8 | -20.4 |
Fair value of derivatives | 903.7 | 734 | ' |
Embedded derivative associated with modified coinsurance agreement | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Fair value of derivatives | $1.80 | $5.50 | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - MULTIBUCKET ANNUITY PRODUCT (DETAILS) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Insurance [Abstract] | ' | ' |
Return of premium annual percentage, multibucket annuity | 3.00% | ' |
Insurance liabilities held, related to multibucket annuity products | $45.80 | $47.80 |
Recovered_Sheet1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE MEASUREMENTS (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | $23,178.30 | $24,614.10 |
Trading securities | 247.6 | 266.2 |
Investments held by variable interest entities | 1,046.70 | 814.3 |
Assets held in separate accounts | 10.3 | 14.9 |
Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 49.7 |
Trading securities | 2.4 | 0.9 |
Investments held by variable interest entities | 0 | 0 |
Assets held in separate accounts | 0 | 0 |
Total assets carried at fair value by category | 82.6 | 50.6 |
Total liabilities for insurance products | 0 | 0 |
Total liabilities carried at fair value by category | 0 | 0 |
Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 118.8 |
Trading securities | 245.2 | 251.6 |
Investments held by variable interest entities | 1,046.70 | 814.3 |
Assets held in separate accounts | 10.3 | 14.9 |
Total assets carried at fair value by category | 24,131.80 | 25,106.50 |
Total liabilities for insurance products | 0 | 0 |
Total liabilities carried at fair value by category | 0 | 0 |
Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 2.9 |
Trading securities | 0 | 13.7 |
Investments held by variable interest entities | 0 | 0 |
Assets held in separate accounts | 0 | 0 |
Total assets carried at fair value by category | 674.6 | 778.2 |
Total liabilities for insurance products | 905.5 | 739.5 |
Total liabilities carried at fair value by category | 905.5 | 739.5 |
Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 171.4 |
Trading securities | 247.6 | 266.2 |
Investments held by variable interest entities | 1,046.70 | 814.3 |
Assets held in separate accounts | 10.3 | 14.9 |
Total assets carried at fair value by category | 24,889 | 25,935.30 |
Total liabilities for insurance products | 905.5 | 739.5 |
Total liabilities carried at fair value by category | 905.5 | 739.5 |
Corporate securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Total equity securities | 79.6 | 49.7 |
Trading securities | 0 | 0 |
Corporate securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 15,313.80 | 16,498.60 |
Total equity securities | 145.2 | 118.8 |
Trading securities | 45.2 | 46.6 |
Corporate securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 359.6 | 355.5 |
Total equity securities | 24.5 | 0.1 |
Trading securities | 0 | 0 |
Corporate securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 15,673.40 | 16,854.10 |
Total equity securities | 249.3 | 168.6 |
Trading securities | 45.2 | 46.6 |
Venture capital funds | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 0 |
Venture capital funds | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 0 |
Venture capital funds | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 2.8 |
Venture capital funds | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | ' | 2.8 |
Collateralized mortgage obligations | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Collateralized mortgage obligations | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,848.90 | 2,230.60 |
Trading securities | 31.1 | 41.2 |
Collateralized mortgage obligations | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 16.9 |
Trading securities | 0 | 5.8 |
Collateralized mortgage obligations | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,848.90 | 2,247.50 |
Trading securities | 31.1 | 47 |
Total fixed maturities, available for sale | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Total fixed maturities, available for sale | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 22,528.20 | 23,852.50 |
Total fixed maturities, available for sale | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 650.1 | 761.6 |
Total fixed maturities, available for sale | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 23,178.30 | 24,614.10 |
US treasury and government | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US treasury and government | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 73.1 | 99.5 |
Trading securities | 4.6 | 4.8 |
US treasury and government | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US treasury and government | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 73.1 | 99.5 |
Trading securities | 4.6 | 4.8 |
US states and political subdivisions debt securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US states and political subdivisions debt securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 2,204.40 | 2,115 |
Trading securities | 14.1 | 14 |
US states and political subdivisions debt securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 13.1 |
Trading securities | 0 | 0.6 |
US states and political subdivisions debt securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 2,204.40 | 2,128.10 |
Trading securities | 14.1 | 14.6 |
Foreign government debt securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | ' | 0 |
Foreign government debt securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | ' | 0.8 |
Foreign government debt securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | ' | 0 |
Foreign government debt securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | ' | 0.8 |
Asset-backed securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Asset-backed securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,419.90 | 1,416.90 |
Trading securities | 24.3 | 50.1 |
Asset-backed securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 42.2 | 44 |
Trading securities | 0 | 0 |
Asset-backed securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,462.10 | 1,460.90 |
Trading securities | 24.3 | 50.1 |
Collateralized debt obligations | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | ' | 0 |
Collateralized debt obligations | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 47.3 | 0 |
Trading securities | ' | 0 |
Collateralized debt obligations | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 246.7 | 324 |
Trading securities | ' | 7.3 |
Collateralized debt obligations | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 294 | 324 |
Trading securities | ' | 7.3 |
Commercial mortgage backed securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Commercial mortgage backed securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,609 | 1,471.20 |
Trading securities | 125.8 | 93.3 |
Commercial mortgage backed securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 6.2 |
Trading securities | 0 | 0 |
Commercial mortgage backed securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,609 | 1,477.40 |
Trading securities | 125.8 | 93.3 |
Mortgage pass through securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Mortgage pass through securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 11.8 | 19.9 |
Trading securities | 0.1 | 0.1 |
Mortgage pass through securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 1.6 | 1.9 |
Trading securities | 0 | 0 |
Mortgage pass through securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fixed maturities, available for sale | 13.4 | 21.8 |
Trading securities | 0.1 | 0.1 |
Equity securities | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Trading securities | 2.4 | 0.9 |
Equity securities | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Trading securities | 0 | 1.5 |
Equity securities | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Trading securities | 0 | 0 |
Equity securities | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Trading securities | 2.4 | 2.4 |
Derivatives | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Other invested assets - derivatives | 0.6 | 0 |
Derivatives | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Other invested assets - derivatives | 156.2 | 54.4 |
Derivatives | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Other invested assets - derivatives | 0 | 0 |
Derivatives | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Other invested assets - derivatives | 156.8 | 54.4 |
Embedded derivative associated with modified coinsurance agreement | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 0 | 0 |
Embedded derivative associated with modified coinsurance agreement | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 0 | 0 |
Embedded derivative associated with modified coinsurance agreement | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 1.8 | 5.5 |
Embedded derivative associated with modified coinsurance agreement | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 1.8 | 5.5 |
Embedded derivatives associated with fixed index annuity products | Fair value, measurements, recurring | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 0 | 0 |
Embedded derivatives associated with fixed index annuity products | Fair value, measurements, recurring | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 0 | 0 |
Embedded derivatives associated with fixed index annuity products | Fair value, measurements, recurring | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | 903.7 | 734 |
Embedded derivatives associated with fixed index annuity products | Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities for insurance products | $903.70 | $734 |
Recovered_Sheet2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE MEASUREMENTS - UNOBSERVABLE INPUT RECONCILIATION (DETAILS) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | $27,151.70 | $27,959.30 | ||
Other invested assets | 423.3 | 248.1 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | -739.5 | -669.8 | [1] | |
Total realized and unrealized gains (losses) included in net income | 49.3 | -15.2 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | -905.5 | -739.5 | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 49.3 | -15.2 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases | -105.6 | -103.3 | ||
Sales | 5.1 | 60.4 | ||
Issues | -156.3 | -50.9 | ||
Settlements | 41.5 | 39.3 | ||
Purchases, sales, issuances and settlements, net | -215.3 | [4] | -54.5 | [5] |
Policyholder account balances | 12,776.40 | 12,913.10 | ||
Available-for-sale securities | Corporate debt securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 34 | 88.1 | ||
Purchases | 44 | 110.3 | ||
Sales | -10 | -22.2 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Available-for-sale securities | Corporate debt securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 355.5 | 278.1 | [1] | |
Total realized and unrealized gains (losses) included in net income | -0.3 | -0.2 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -9.8 | 9.9 | ||
Transfers into level 3 | 13.2 | 68.6 | ||
Transfers out of level 3 | -33 | [2] | -89 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 359.6 | 355.5 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 34 | [4] | 88.1 | [5] |
Available-for-sale securities | US treasury and government | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | -1.6 | ||
Purchases | ' | 0 | ||
Sales | ' | -1.6 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Available-for-sale securities | US treasury and government | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | ' | 1.6 | [1] | |
Total realized and unrealized gains (losses) included in net income | ' | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | ' | 0 | ||
Transfers into level 3 | ' | 0 | ||
Transfers out of level 3 | ' | 0 | [3] | |
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 0 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | ' | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | -1.6 | [5] | |
Available-for-sale securities | US states and political subdivisions debt securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | -1.8 | ||
Purchases | ' | 0 | ||
Sales | ' | -1.8 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Available-for-sale securities | US states and political subdivisions debt securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 13.1 | 2.1 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0.9 | ||
Transfers into level 3 | 0 | 11.9 | ||
Transfers out of level 3 | -13.1 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 13.1 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 0 | [4] | -1.8 | [5] |
Available-for-sale securities | Asset-backed securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 1.6 | 15.2 | ||
Purchases | 22 | 19 | ||
Sales | -20.4 | -3.8 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Available-for-sale securities | Asset-backed securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 44 | 79.7 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0.1 | -0.3 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -3.6 | 6.3 | ||
Transfers into level 3 | 0.1 | 0.5 | ||
Transfers out of level 3 | 0 | [2] | -57.4 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 42.2 | 44 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 1.6 | [4] | 15.2 | [5] |
Available-for-sale securities | Collateralized debt obligations | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -85.4 | -24.8 | ||
Purchases | 6 | 35.4 | ||
Sales | -91.4 | -60.2 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Available-for-sale securities | Collateralized debt obligations | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 324 | 327.3 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0.2 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 7.9 | 21.5 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 246.7 | 324 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -85.4 | [4] | -24.8 | [5] |
Available-for-sale securities | Commercial mortgage backed securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | -2.5 | ||
Purchases | ' | 0 | ||
Sales | ' | -2.5 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Available-for-sale securities | Commercial mortgage backed securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 6.2 | 17.3 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0.8 | ||
Transfers into level 3 | 0 | 5.7 | ||
Transfers out of level 3 | -6.2 | [2] | -15.1 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 6.2 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 0 | [4] | -2.5 | [5] |
Available-for-sale securities | Mortgage pass through securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -0.3 | -0.3 | ||
Purchases | 0 | 0 | ||
Sales | -0.3 | -0.3 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Available-for-sale securities | Mortgage pass through securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 1.9 | 2.2 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 1.6 | 1.9 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -0.3 | [4] | -0.3 | [5] |
Available-for-sale securities | Collateralized mortgage obligations | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | 0.2 | ||
Purchases | ' | 11.2 | ||
Sales | ' | -11 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Available-for-sale securities | Collateralized mortgage obligations | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 16.9 | 124.8 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | -0.1 | ||
Transfers into level 3 | 0 | 5 | ||
Transfers out of level 3 | -16.9 | [2] | -113 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 16.9 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 0 | [4] | 0.2 | [5] |
Available-for-sale securities | Total fixed maturities, available for sale | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -50.1 | 72.5 | ||
Purchases | 72 | 175.9 | ||
Sales | -122.1 | -103.4 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Available-for-sale securities | Total fixed maturities, available for sale | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 761.6 | 833.1 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | -0.5 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -5.5 | 39.3 | ||
Transfers into level 3 | 13.3 | 91.7 | ||
Transfers out of level 3 | -69.2 | [2] | -274.5 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 650.1 | 761.6 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -50.1 | [4] | 72.5 | [5] |
Equity securities classification | Venture capital funds | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 2.8 | 63.5 | [1] | |
Total realized and unrealized gains (losses) included in net income | -2.5 | -26 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -0.3 | -0.4 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 2.8 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 0 | [4] | -34.3 | |
Purchases | ' | 0 | ||
Sales | ' | -34.3 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Equity securities classification | Corporate debt securities | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0.1 | 6.4 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | -3.8 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -0.1 | 0.7 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 24.5 | 0.1 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | -3.8 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 24.5 | [4] | -3.2 | [5] |
Purchases | 24.5 | 0 | ||
Sales | 0 | -3.2 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Equity securities classification | Equity securities | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 2.9 | 69.9 | [1] | |
Total realized and unrealized gains (losses) included in net income | -2.5 | -29.8 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -0.4 | 0.3 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 24.5 | 2.9 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | -3.8 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 24.5 | [4] | -37.5 | |
Purchases | ' | 0 | ||
Sales | ' | -37.5 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Trading securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | 11.4 | ||
Purchases | ' | 11.4 | ||
Sales | ' | 0 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Trading securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 13.7 | 0.4 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0.6 | 1.8 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -0.2 | 0 | ||
Transfers into level 3 | 0 | 0.5 | ||
Transfers out of level 3 | -6.4 | [2] | -0.4 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 13.7 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | -0.2 | 1.8 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -7.7 | [4] | 11.4 | [5] |
Trading securities | Collateralized debt obligations | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -7.7 | ' | ||
Purchases | 0 | ' | ||
Sales | -7.7 | ' | ||
Issuances | 0 | ' | ||
Settlements | 0 | ' | ||
Commercial mortgage backed securities | Trading securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | ' | 0.4 | [1] | |
Total realized and unrealized gains (losses) included in net income | ' | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | ' | 0 | ||
Transfers into level 3 | ' | 0 | ||
Transfers out of level 3 | ' | -0.4 | [3] | |
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 0 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | ' | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | 0 | [5] | |
Collateralized debt obligations | Trading securities | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 7.3 | 0 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0.6 | 0.4 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -0.2 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 7.3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | -0.2 | 0.4 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | -7.7 | [4] | 6.9 | [5] |
Purchases | ' | 6.9 | ||
Sales | ' | 0 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
US states and political subdivisions debt securities | Trading securities | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0.6 | 0 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 0.1 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0.5 | ||
Transfers out of level 3 | -0.6 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 0.6 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0.1 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 0 | [4] | 0 | |
Collateralized mortgage obligations | Trading securities | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | ' | 4.5 | ||
Purchases | ' | 4.5 | ||
Sales | ' | 0 | ||
Issuances | ' | 0 | ||
Settlements | ' | 0 | ||
Collateralized mortgage obligations | Trading securities | Level 3 | Fair value, measurements, recurring | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 5.8 | 0 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 1.3 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | -5.8 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 5.8 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 1.3 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases, sales, issuances and settlements, net | 0 | [4] | 4.5 | [5] |
Interest sensitive products | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | -734 | -666.3 | [1] | |
Total realized and unrealized gains (losses) included in net income | 49.3 | -15.2 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | -903.7 | -734 | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 49.3 | -15.2 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases | -105.6 | -103.3 | ||
Sales | 1.4 | 59.9 | ||
Issues | -156.3 | -48.4 | ||
Settlements | 41.5 | 39.3 | ||
Purchases, sales, issuances and settlements, net | -219 | [4] | -52.5 | [5] |
Interest sensitive products | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Weighted average projected portfolio yields | 5.60% | 5.55% | ||
Weighted average discount rates | 2.47% | 1.40% | ||
Weighted average surrender rates | 14.39% | 19.00% | ||
Interest sensitive products modified coinsurance agreement | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | -5.5 | -3.5 | [1] | |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | [2] | 0 | [3] |
Fair value, measurement with unobservable inputs reconciliation, ending balance | -1.8 | -5.5 | ||
Amount of total gains (losses) for the year ended December 31 included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Purchases | 0 | 0 | ||
Sales | 3.7 | 0.5 | ||
Issues | 0 | -2.5 | ||
Settlements | 0 | 0 | ||
Purchases, sales, issuances and settlements, net | 3.7 | [4] | -2 | [5] |
Collateralized debt obligations | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Weighted average discount rate | 1.32% | 2.02% | ||
Weighted average recoveries | 65.80% | ' | ||
Weighted average constant prepayment rate | 20.00% | 20.00% | ||
Weighted average annual default rate | 3.05% | 3.01% | ||
Weighted average portfolio CCC percent | 12.57% | 11.99% | ||
Asset-backed securities | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Weighted average discount rate | 3.09% | 2.99% | ||
Corporate debt securities | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Weighted average discount rate | 2.36% | 2.78% | ||
Maximum | Interest sensitive products | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Projected Portfolio Yields | 6.63% | 5.61% | ||
Discount rates | 4.64% | 3.60% | ||
Surrender rates | 54.60% | 43.00% | ||
Maximum | Collateralized debt obligations | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 2.00% | 8.75% | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Debt obligation, recovery rate | 67.00% | 66.00% | ||
Annual default rate | 5.57% | 5.54% | ||
Portfolio CCC Percent | 21.79% | 21.56% | ||
Maximum | Asset-backed securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 4.20% | 3.14% | ||
Maximum | Corporate debt securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 2.90% | 3.25% | ||
Minimum | Interest sensitive products | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Projected Portfolio Yields | 5.35% | 5.35% | ||
Discount rates | 0.00% | 0.00% | ||
Surrender rates | 2.80% | 4.00% | ||
Minimum | Venture capital funds | Level 3 | ' | ' | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
EBITDA Multiple | ' | 6.8 | ||
Revenue Multiple | ' | 1.5 | ||
Minimum | Collateralized debt obligations | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 0.95% | 0.95% | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Debt obligation, recovery rate | 64.00% | 65.00% | ||
Annual default rate | 1.14% | 0.95% | ||
Portfolio CCC Percent | 1.52% | 1.18% | ||
Minimum | Asset-backed securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 2.03% | 2.78% | ||
Minimum | Corporate debt securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 1.65% | 1.90% | ||
Estimate of fair value measurement | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 674.6 | 778.2 | ||
Other invested assets | 114 | [6] | 162.4 | [6] |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract] | ' | ' | ||
Policyholder account balances | 905.5 | [7] | 739.5 | [7] |
Estimate of fair value measurement | Venture capital funds | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | ' | 2.8 | [8] | |
Estimate of fair value measurement | Equity securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 24.5 | [9] | ' | |
Estimate of fair value measurement | Collateralized debt obligations | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 240.7 | [10] | 331.4 | [10] |
Estimate of fair value measurement | Asset-backed securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 35.1 | [11] | 33.3 | [11] |
Estimate of fair value measurement | Corporate debt securities | Level 3 | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | $260.30 | [12] | $248.30 | [12] |
[1] | We revised the hierarchy classification of certain fixed maturities, equity securities, trading securities and other invested assets as we believe the observability of the inputs more closely represent Level 2 valuations. | |||
[2] | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service which utilized observable inputs at the end of the period, whereas a broker quote was used as of the beginning of the period. | |||
[3] | For our fixed maturity securities, the majority of our transfers out of Level 3 are the result of obtaining a valuation from an independent pricing service at the end of the period, whereas a broker quote was used as of the beginning of the period. | |||
[4] | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2013 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$44.0 $(10.0) $— $— $34.0Asset-backed securities22.0 (20.4) — — 1.6Collateralized debt obligations6.0 (91.4) — — (85.4)Mortgage pass-through securities— (.3) — — (.3)Total fixed maturities, available for sale72.0 (122.1) — — (50.1)Equity securities - corporate securities24.5 — — — 24.5Trading securities - collateralized debt obligations— (7.7) — — (7.7)Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(105.6) 1.4 (156.3) 41.5 (219.0)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 3.7 — — 3.7Total liabilities for insurance products(105.6) 5.1 (156.3) 41.5 (215.3) | |||
[5] | Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts. The following summarizes such activity for the year ended December 31, 2012 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$110.3 $(22.2) $— $— $88.1United States Treasury securities and obligations of United States government corporations and agencies— (1.6) — — (1.6)States and political subdivisions— (1.8) — — (1.8)Asset-backed securities19.0 (3.8) — — 15.2Collateralized debt obligations35.4 (60.2) — — (24.8)Commercial mortgage-backed securities— (2.5) — — (2.5)Mortgage pass-through securities— (.3) — — (.3)Collateralized mortgage obligations11.2 (11.0) — — .2Total fixed maturities, available for sale175.9 (103.4) — — 72.5Equity securities: Corporate securities— (3.2) — — (3.2)Venture capital investments— (34.3) — — (34.3)Total equity securities— (37.5) — — (37.5)Trading securities: Collateralized debt obligations6.9 — — — 6.9Collateralized mortgage obligations4.5 — — — 4.5Total trading securities11.4 — — — 11.4Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(103.3) 59.9 (48.4) 39.3 (52.5)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— .5 (2.5) — (2.0)Total liabilities for insurance products(103.3) 60.4 (50.9) 39.3 (54.5) | |||
[6] | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | |||
[7] | Interest sensitive products - The significant unobservable inputs used in the fair value measurement of our interest sensitive products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. | |||
[8] | Venture capital investments - The significant unobservable inputs used in the fair value measurement of our venture capital investments are the EBITDA multiple and revenue multiple. Generally, a significant increase (decrease) in the EBITDA or revenue multiples in isolation would result in a significantly higher (lower) fair value measurement. | |||
[9] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmJhOWQ3MTE0ZDIzZjRhMGQ5ZTNjOTFiMmZiOGY5ZTRhfFRleHRTZWxlY3Rpb246ODUzQTU5QzJFQTcwQTU2QzBBN0UwNDVCMEU5MjEwNjEM} | |||
[10] | Collateralized debt obligations - The significant unobservable inputs used in the fair value measurement of our collateralized debt obligations relate to collateral performance, including default rate, recoveries and constant prepayment rate, as well as discount margins of the underlying collateral. Significant increases (decreases) in default rate in isolation would result in a significantly lower (higher) fair value measurement. Generally, a significant increase (decrease) in the constant prepayment rate and recoveries in isolation would result in a significantly higher (lower) fair value measurement. Generally a significant increase (decrease) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the annual default rate is accompanied by a directionally similar change in the assumption used for discount margins and portfolio CCC % and a directionally opposite change in the assumption used for constant prepayment rate and recoveries. A tranche's payment priority and investment cost basis could alter generalized fair value outcomes. | |||
[11] | Asset-backed securities - The significant unobservable input used in the fair value measurement of our asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. | |||
[12] | Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement. |
Recovered_Sheet3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE MEASUREMENTS - FINANCIAL ASSETS AND LIABILITIES (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | ||
In Millions, unless otherwise specified | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Cash and cash equivalents - unrestricted | $699 | $582.50 | $436 | $571.90 | ||
Cash and cash equivalents held by variable interest entities | 104.3 | 54.2 | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 23,178.30 | 24,614.10 | ' | ' | ||
Trading securities | 247.6 | 266.2 | ' | ' | ||
Investments held by variable interest entities | 1,046.70 | 814.3 | ' | ' | ||
Other invested assets | 423.3 | 248.1 | ' | ' | ||
Policyholder account balances | 12,776.40 | 12,913.10 | ' | ' | ||
Fair value, measurements, recurring | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage-backed securities available-for-sale, fair value | 1,729.50 | 1,573.20 | ' | ' | ||
Loans receivable, fair value | 277 | 272 | ' | ' | ||
Company-owned life insurance | 144.8 | 123 | ' | ' | ||
Hedge funds | 67.6 | 16.1 | ' | ' | ||
Cash and cash equivalents - unrestricted | 699 | 582.5 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 104.3 | 54.2 | ' | ' | ||
Policyholder account balances | 12,776.40 | [1] | 12,913.10 | [1] | ' | ' |
Investment borrowings | 1,900 | 1,650.80 | ' | ' | ||
Borrowings related to variable interest entities | 1,012.30 | 767 | ' | ' | ||
Notes payable – direct corporate obligations | 856.4 | 1,004.20 | ' | ' | ||
Level 1 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage-backed securities available-for-sale, fair value | 0 | 0 | ' | ' | ||
Loans receivable, fair value | 0 | 0 | ' | ' | ||
Company-owned life insurance | 0 | 0 | ' | ' | ||
Hedge funds | 0 | 0 | ' | ' | ||
Cash and cash equivalents - unrestricted | 457.8 | 432.3 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 104.3 | 54.2 | ' | ' | ||
Policyholder account balances | 0 | [1] | 0 | [1] | ' | ' |
Investment borrowings | 0 | 0 | ' | ' | ||
Borrowings related to variable interest entities | 0 | 0 | ' | ' | ||
Notes payable – direct corporate obligations | 0 | 0 | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Trading securities | 2.4 | 0.9 | ' | ' | ||
Investments held by variable interest entities | 0 | 0 | ' | ' | ||
Level 2 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage-backed securities available-for-sale, fair value | 0 | 0 | ' | ' | ||
Loans receivable, fair value | 0 | 0 | ' | ' | ||
Company-owned life insurance | 144.8 | 123 | ' | ' | ||
Hedge funds | 67.6 | 16.1 | ' | ' | ||
Cash and cash equivalents - unrestricted | 241.2 | 150.2 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 0 | 0 | ' | ' | ||
Policyholder account balances | 0 | [1] | 0 | [1] | ' | ' |
Investment borrowings | 1,948.50 | 1,702 | ' | ' | ||
Borrowings related to variable interest entities | 993.7 | 752.2 | ' | ' | ||
Notes payable – direct corporate obligations | 872.5 | 1,100.30 | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Trading securities | 245.2 | 251.6 | ' | ' | ||
Investments held by variable interest entities | 1,046.70 | 814.3 | ' | ' | ||
Level 3 | Estimate of fair value measurement | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Other invested assets | 114 | [2] | 162.4 | [2] | ' | ' |
Policyholder account balances | 905.5 | [3] | 739.5 | [3] | ' | ' |
Level 3 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage-backed securities available-for-sale, fair value | 1,749.50 | 1,682.10 | ' | ' | ||
Loans receivable, fair value | 277 | 272 | ' | ' | ||
Company-owned life insurance | 0 | 0 | ' | ' | ||
Hedge funds | 0 | 0 | ' | ' | ||
Cash and cash equivalents - unrestricted | 0 | 0 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 0 | 0 | ' | ' | ||
Policyholder account balances | 12,776.40 | [1] | 12,913.10 | [1] | ' | ' |
Investment borrowings | 0 | 0 | ' | ' | ||
Borrowings related to variable interest entities | 0 | 0 | ' | ' | ||
Notes payable – direct corporate obligations | 0 | 0 | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Trading securities | 0 | 13.7 | ' | ' | ||
Investments held by variable interest entities | 0 | 0 | ' | ' | ||
Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage-backed securities available-for-sale, fair value | 1,749.50 | 1,682.10 | ' | ' | ||
Loans receivable, fair value | 277 | 272 | ' | ' | ||
Company-owned life insurance | 144.8 | 123 | ' | ' | ||
Hedge funds | 67.6 | 16.1 | ' | ' | ||
Cash and cash equivalents - unrestricted | 699 | 582.5 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 104.3 | 54.2 | ' | ' | ||
Policyholder account balances | 12,776.40 | [1] | 12,913.10 | [1] | ' | ' |
Investment borrowings | 1,948.50 | 1,702 | ' | ' | ||
Borrowings related to variable interest entities | 993.7 | 752.2 | ' | ' | ||
Notes payable – direct corporate obligations | 872.5 | 1,100.30 | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Trading securities | 247.6 | 266.2 | ' | ' | ||
Investments held by variable interest entities | 1,046.70 | 814.3 | ' | ' | ||
Collateralized debt obligations | Level 1 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 0 | 0 | ' | ' | ||
Trading securities | ' | 0 | ' | ' | ||
Collateralized debt obligations | Level 2 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 47.3 | 0 | ' | ' | ||
Trading securities | ' | 0 | ' | ' | ||
Collateralized debt obligations | Level 3 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 246.7 | 324 | ' | ' | ||
Trading securities | ' | 7.3 | ' | ' | ||
Collateralized debt obligations | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 294 | 324 | ' | ' | ||
Trading securities | ' | 7.3 | ' | ' | ||
Collateralized mortgage obligations | Level 1 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 0 | 0 | ' | ' | ||
Trading securities | 0 | 0 | ' | ' | ||
Collateralized mortgage obligations | Level 2 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 1,848.90 | 2,230.60 | ' | ' | ||
Trading securities | 31.1 | 41.2 | ' | ' | ||
Collateralized mortgage obligations | Level 3 | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 0 | 16.9 | ' | ' | ||
Trading securities | 0 | 5.8 | ' | ' | ||
Collateralized mortgage obligations | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' | ' | ' | ||
Financial Assets | ' | ' | ' | ' | ||
Fixed maturities, available for sale | 1,848.90 | 2,247.50 | ' | ' | ||
Trading securities | $31.10 | $47 | ' | ' | ||
[1] | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at December 31, 2013 and 2012. This was because interest rates credited on the vast majority of account balances approximate current rates paid on similar products and because these rates are not generally guaranteed beyond one year. | |||||
[2] | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | |||||
[3] | Interest sensitive products - The significant unobservable inputs used in the fair value measurement of our interest sensitive products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. |
Recovered_Sheet4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SALES INDUCEMENTS (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred Sales Inducements [Abstract] | ' | ' | ' |
Deferred sales inducements | $5 | $4.40 | $11.50 |
Deferred sales inducements, amortization expense | 22.9 | 27.1 | 28.7 |
Unamortized deferred sales inducements | 108.6 | 126.5 | ' |
Insurance liabilities for persistency bonus benefits | $28.90 | $34.60 | ' |
Recovered_Sheet5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - OUT-OF-PERIOD ADJUSTMENT (DETAILS) (Out of period adjustment, USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Out of period adjustment | ' |
Out of period adjustment, effect on insurance policy benefits | $4.70 |
Out of period adjustment, increase in amortization expense | 2.1 |
Out of period adjustment, increase in other operating costs and expenses | 1.5 |
Out of period adjustment, decrease in tax expense | -0.7 |
Out of period adjustment, effect on net income | ($7.60) |
Out of period adjustment, effect on earnings per diluted share (in dollars per share) | $0.03 |
Recovered_Sheet6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS (DETAILS) (Call option, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Call option | ' | ' |
Derivative [Line Items] | ' | ' |
Gross amounts of recognized assets | $156.20 | $54.40 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts of assets presented in the balance sheet | 156.2 | 54.4 |
Gross amounts not offset in the balance sheet, financial instruments | 0 | 0 |
Gross amounts not offset in the balance sheet, cash collateral received | 0 | 0 |
Net amount | $156.20 | $54.40 |
Recovered_Sheet7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE MEASUREMENTS - NARRATIVE (DETAILS) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | ' | ' |
Fixed maturity securities that contain embedded derivatives classified as trading securities | $180.60 | $196.60 |
Fair Value Disclosures [Abstract] | ' | ' |
Available for sale fixed maturities classified as level 3, investment grade, percent | 90.00% | ' |
Available for sale maturities with significant unobservable inputs, structured securities, percent | 38.00% | ' |
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage | 18.00% | ' |
Available for sale fixed maturities classified as level 3, corporate securities, percent | 55.00% | ' |
INVESTMENTS_NARRATIVE_DETAILS
INVESTMENTS - NARRATIVE (DETAILS) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
states | ||||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Estimated fair value | $5,227.40 | ' | ' | |
Net realized investment gains (losses) | 33.4 | 81.1 | 61.8 | |
Amortized cost | 21,860.60 | 21,626.80 | ' | |
Premium deficiencies adjustments to present value of future profits | -27.8 | -162.3 | ' | |
Reduction to deferred acquisition costs due to unrealized gains that would result in premium deficiency if unrealized gains were realized | ' | -149.9 | ' | |
Increase to insurance liabilities due to unrealized gains that would result in premium deficiency if unrealized gains were realized | 0 | 489.8 | ' | |
Increase to deferred tax assets due to unrealized gains that would result in premium deficiency if unrealized gains were realized | 9.9 | 288.7 | ' | |
Estimated fair value | 23,178.30 | [1] | 24,614.10 | ' |
Fair value of fixed maturity investments and mortgage loans not accruing investment income | 0.5 | 0.5 | ' | |
Net realized investment gains, excluding impairment losses | 45 | 118.9 | ' | |
Sales of investments | 2,315.80 | 2,057.60 | 5,504.50 | |
Other than temporary impairments recorded | -11.6 | -37.8 | -34.6 | |
Other-than-temporary impairment losses | 11.6 | 37.8 | 39.9 | |
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 5.3 | |
Fixed maturities in default | 0 | ' | ' | |
Fixed maturities considered nonperforming | 0.5 | ' | ' | |
Book value of investment in guaranteed investment contract | ' | ' | 201.5 | |
Net realized loss on guaranteed investment contract commutation | ' | ' | -4 | |
Impairment charges on underlying invested assets from commutation of investment in guaranteed investment contract | ' | ' | 11.5 | |
Realized losses on sale | -11.4 | -15.4 | -59.9 | |
Value Of available for sale securities sold | 477.5 | 402.5 | 1,000 | |
Percent of fixed maturities | 22.60% | ' | ' | |
Number of additional states greater than specified percentage of mortgage loan balance | 0 | ' | ' | |
Assets held by insurance regulators | 65.6 | 67.8 | ' | |
Reclassification adjustment for sale of securities included in net income | 78 | 5 | 38 | |
Non investment grade | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Available-for-sale securities with unrealized losses | -9 | ' | ' | |
Amortized cost | 2,691.10 | [1] | 2,341.20 | ' |
Percentage of available-for-sale debt securities | 12.00% | ' | ' | |
Estimated fair value | 2,802.60 | [1] | 2,506.60 | ' |
Available-for-sale securities, percentage of amortized cost | 104.00% | ' | ' | |
Continuous unrealized loss position exceeding cost basis, percent | 20.00% | ' | ' | |
Amortized cost basis with unrealized losses | 29.9 | ' | ' | |
Fair value with unrealized losses | 20.9 | ' | ' | |
Equity securities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Net realized investment gains (losses) | 4.8 | 0.1 | -0.2 | |
Other than temporary impairments recorded | 2.5 | 29.9 | ' | |
Mortgage-backed and asset-backed securities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Realized losses on sale | 2.5 | 5.2 | 24.1 | |
Government agency securities and equity interests in corporate investments | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Investments | ' | ' | 197.5 | |
Individual corporate security | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Other than temporary impairments recorded | 5 | ' | ' | |
Commercial mortgage loan | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Net realized investment gains (losses) | -1.1 | -3.7 | -29.3 | |
Other than temporary impairments recorded | ' | 5.4 | 11.8 | |
Investments held by variable interest entities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Other than temporary impairments recorded | ' | ' | 4.3 | |
Other securities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Net realized investment gains (losses) | -5 | 22.5 | 2.7 | |
Other than temporary impairments recorded | 4.1 | 2.5 | 7 | |
US states and political subdivisions debt securities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Realized losses on sale | ' | ' | 13.4 | |
Partial commutations of guaranteed investment contract | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Realized losses on sale | ' | ' | 8.9 | |
Corporate debt securities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Realized losses on sale | 8.9 | 10.2 | 13.5 | |
CALIFORNIA | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 12.00% | ' | ' | |
MINNESOTA | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 6.00% | ' | ' | |
GEORGIA | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 5.00% | ' | ' | |
MARYLAND | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 5.00% | ' | ' | |
COLORADO | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 5.00% | ' | ' | |
TEXAS | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 8.00% | ' | ' | |
ILLINOIS | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 5.00% | ' | ' | |
Minimum | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of mortgage loan balance | 5.00% | ' | ' | |
Maximum | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Percentage of commercial loan balance that is noncurrent | 0.00% | ' | ' | |
Embedded derivative financial instruments | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Embedded Derivative, Gain on Embedded Derivative | -6.8 | 20.1 | ' | |
Marketable securities | ' | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | |
Net realized investment gains, excluding impairment losses | $51.80 | $98.80 | $96.40 | |
[1] | Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. |
INVESTMENTS_SCHEDULE_OF_AMORTI
INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND OTHER-THAN-TEMPORARY IMPAIRMENTS (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | $21,860.60 | $21,626.80 | |
Gross unrealized gains | 1,526 | [1] | 3,020.20 |
Gross unrealized losses | -208.3 | [1] | -32.9 |
Estimated fair value | 23,178.30 | [1] | 24,614.10 |
Other-than-temporary impairments included in accumulated other comprehensive income | -4.3 | [1] | -6 |
Equity securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 237.9 | 167.1 | |
Gross unrealized gains | 16.3 | 5.9 | |
Gross unrealized losses | -4.9 | -1.6 | |
Estimated fair value | 249.3 | 171.4 | |
Investment grade | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 19,169.50 | [1] | 19,285.60 |
Gross unrealized gains | 1,377.30 | [1] | 2,843.40 |
Gross unrealized losses | -171.1 | [1] | -21.5 |
Estimated fair value | 20,375.70 | [1] | 22,107.50 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | -0.8 |
Investment grade | Corporate debt securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 13,372.90 | [1] | 13,531.80 |
Gross unrealized gains | 1,086.20 | [1] | 2,221.40 |
Gross unrealized losses | -120.9 | [1] | -12.1 |
Estimated fair value | 14,338.20 | [1] | 15,741.10 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | US treasury and government | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 71.1 | [1] | 93.9 |
Gross unrealized gains | 2.6 | [1] | 5.6 |
Gross unrealized losses | -0.6 | [1] | 0 |
Estimated fair value | 73.1 | [1] | 99.5 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | US states and political subdivisions debt securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 2,130.20 | [1] | 1,840.70 |
Gross unrealized gains | 106.8 | [1] | 277.3 |
Gross unrealized losses | -38.5 | [1] | -4.3 |
Estimated fair value | 2,198.50 | [1] | 2,113.70 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | Foreign government debt securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | ' | 0.8 | |
Gross unrealized gains | ' | 0 | |
Gross unrealized losses | ' | 0 | |
Estimated fair value | ' | 0.8 | |
Other-than-temporary impairments included in accumulated other comprehensive income | ' | 0 | |
Investment grade | Asset-backed securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 869.9 | [1] | 1,002.90 |
Gross unrealized gains | 41.6 | [1] | 70.9 |
Gross unrealized losses | -3.9 | [1] | -2.8 |
Estimated fair value | 907.6 | [1] | 1,071 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | Collateralized debt obligations | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 259.4 | [1] | 311.5 |
Gross unrealized gains | 7.4 | [1] | 7.5 |
Gross unrealized losses | -0.1 | [1] | -1 |
Estimated fair value | 266.7 | [1] | 318 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | Commercial mortgage backed securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 1,517.10 | [1] | 1,325.70 |
Gross unrealized gains | 97.7 | [1] | 152.3 |
Gross unrealized losses | -5.8 | [1] | -0.6 |
Estimated fair value | 1,609 | [1] | 1,477.40 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | Mortgage pass through securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 12.7 | [1] | 20.6 |
Gross unrealized gains | 0.7 | [1] | 1.2 |
Gross unrealized losses | 0 | [1] | 0 |
Estimated fair value | 13.4 | [1] | 21.8 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Investment grade | Collateralized mortgage obligations | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 936.2 | [1] | 1,157.70 |
Gross unrealized gains | 34.3 | [1] | 107.2 |
Gross unrealized losses | -1.3 | [1] | -0.7 |
Estimated fair value | 969.2 | [1] | 1,264.20 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | -0.8 |
Non investment grade | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 2,691.10 | [1] | 2,341.20 |
Gross unrealized gains | 148.7 | [1] | 176.8 |
Gross unrealized losses | -37.2 | [1] | -11.4 |
Estimated fair value | 2,802.60 | [1] | 2,506.60 |
Other-than-temporary impairments included in accumulated other comprehensive income | -4.3 | [1] | -5.2 |
Non investment grade | Corporate debt securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 1,314.50 | [1] | 1,055.80 |
Gross unrealized gains | 53.4 | [1] | 65.3 |
Gross unrealized losses | -32.7 | [1] | -8.1 |
Estimated fair value | 1,335.20 | [1] | 1,113 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Non investment grade | US states and political subdivisions debt securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 6.4 | [1] | 15.3 |
Gross unrealized gains | 0 | [1] | 0 |
Gross unrealized losses | -0.5 | [1] | -0.9 |
Estimated fair value | 5.9 | [1] | 14.4 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Non investment grade | Asset-backed securities | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 523.5 | [1] | 360.9 |
Gross unrealized gains | 34.3 | [1] | 31.4 |
Gross unrealized losses | -3.3 | [1] | -2.4 |
Estimated fair value | 554.5 | [1] | 389.9 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Non investment grade | Collateralized debt obligations | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 27.6 | [1] | 5.5 |
Gross unrealized gains | 0.1 | [1] | 0.5 |
Gross unrealized losses | -0.4 | [1] | 0 |
Estimated fair value | 27.3 | [1] | 6 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | [1] | 0 |
Non investment grade | Collateralized mortgage obligations | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | 819.1 | [1] | 903.7 |
Gross unrealized gains | 60.9 | [1] | 79.6 |
Gross unrealized losses | -0.3 | [1] | 0 |
Estimated fair value | 879.7 | [1] | 983.3 |
Other-than-temporary impairments included in accumulated other comprehensive income | ($4.30) | [1] | ($5.20) |
[1] | Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. |
INVESTMENTS_SUMMARY_OF_INVESTM
INVESTMENTS - SUMMARY OF INVESTMENTS BY NAIC DESIGNATIONS (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Millions, unless otherwise specified | |||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Amortized cost | $21,860.60 | $21,626.80 | |
Estimated fair value | 23,178.30 | [1] | 24,614.10 |
Percentage of total estimated fair value | 100.00% | ' | |
NAIC designation 1 | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
NAIC designation | 1 | ' | |
Amortized cost | 10,215.30 | ' | |
Estimated fair value | 10,926.50 | ' | |
Percentage of total estimated fair value | 47.20% | ' | |
NAIC designation 2 | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
NAIC designation | 2 | ' | |
Amortized cost | 10,265.80 | ' | |
Estimated fair value | 10,852.30 | ' | |
Percentage of total estimated fair value | 46.80% | ' | |
NAIC designation 3 | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
NAIC designation | 3 | ' | |
Amortized cost | 1,051.30 | ' | |
Estimated fair value | 1,066.10 | ' | |
Percentage of total estimated fair value | 4.60% | ' | |
NAIC designation 4 | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
NAIC designation | 4 | ' | |
Amortized cost | 297.6 | ' | |
Estimated fair value | 303.4 | ' | |
Percentage of total estimated fair value | 1.30% | ' | |
NAIC designation 5 | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
NAIC designation | 5 | ' | |
Amortized cost | 30.6 | ' | |
Estimated fair value | 29.5 | ' | |
Percentage of total estimated fair value | 0.10% | ' | |
NAIC designation 6 | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
NAIC designation | 6 | ' | |
Amortized cost | 0 | ' | |
Estimated fair value | $0.50 | ' | |
Percentage of total estimated fair value | 0.00% | ' | |
[1] | Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. |
INVESTMENTS_SCHEDULE_OF_UNREAL
INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Investments, Debt and Equity Securities [Abstract] | ' | ' | ||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $6.50 | $9.80 | ||
Net unrealized gains on all other investments | 1,322.60 | 2,986.50 | ||
Adjustment to present value of future profits | -47.7 | [1] | -193 | [1] |
Adjustment to deferred acquisition costs | -137 | -452.9 | ||
Adjustment to insurance liabilities | 0 | -489.8 | ||
Unrecognized net loss related to deferred compensation plan | -7.1 | -7.9 | ||
Deferred income tax liabilities | -405.5 | -655.3 | ||
Accumulated other comprehensive income | $731.80 | $1,197.40 | ||
[1] | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at the Effective Date. |
INVESTMENTS_SUMMARY_OF_INVESTM1
INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Amortized Cost | ' | ' |
Due in one year or less | $155.20 | ' |
Due after one year through five years | 2,008.50 | ' |
Due after five years through ten years | 3,920.60 | ' |
Due after ten years | 10,810.80 | ' |
Subtotal | 16,895.10 | ' |
Structured securities | 4,965.50 | ' |
Total fixed maturities, available for sale | 21,860.60 | 21,626.80 |
Estimated Fair Value | ' | ' |
Due in one year or less | 157.4 | ' |
Due after one year through five years | 2,188.60 | ' |
Due after five years through ten years | 4,219 | ' |
Due after ten years | 11,385.90 | ' |
Subtotal | 17,950.90 | ' |
Structured securities | 5,227.40 | ' |
Total fixed maturities, available for sale | $23,178.30 | $24,614.10 |
INVESTMENTS_SCHEDULE_OF_NET_IN
INVESTMENTS - SCHEDULE OF NET INVESTMENT INCOME (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Investments, Debt and Equity Securities [Abstract] | ' | ' | ' |
Fixed maturities | $1,288.90 | $1,280.90 | $1,233.80 |
Trading income related to policyholder and reinsurer accounts and other special-purpose portfolios | 80.7 | 62.4 | 14.6 |
Equity securities | 8.4 | 4.4 | 1.7 |
Mortgage loans | 96.3 | 99.8 | 111.7 |
Policy loans | 17.3 | 17.1 | 17.6 |
Option income | 77.4 | 0.4 | 36.5 |
Change in value of options | 100.1 | 25.1 | -57.7 |
Other invested assets | 14.4 | 14.4 | 14.5 |
Cash and cash equivalents | 0.5 | 0.6 | 0.4 |
Gross investment income | 1,684 | 1,505.10 | 1,373.10 |
Less investment expenses | 20 | 18.7 | 19 |
Net investment income | $1,664 | $1,486.40 | $1,354.10 |
INVESTMENTS_NET_REALIZED_INVES
INVESTMENTS - NET REALIZED INVESTMENT GAINS (LOSSES) (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Realized gains on sale | $57.70 | $115.40 | $183.10 |
Realized losses on sale | -11.4 | -15.4 | -59.9 |
Total other-than-temporary impairment losses | -7.1 | -1 | -19.2 |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 5.3 |
Net impairment losses recognized | 11.6 | 37.8 | 34.6 |
Net realized investment gains (losses) | 33.4 | 81.1 | 61.8 |
Total fixed maturities, available for sale | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Net impairment losses recognized | 7.1 | 1 | 13.9 |
Net realized investment gains (losses) | 39.2 | 99 | 109.3 |
Equity securities | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Net realized investment gains (losses) | 4.8 | 0.1 | -0.2 |
Commercial mortgage loans | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Net realized investment gains (losses) | -1.1 | -3.7 | -29.3 |
Impairments of mortgage loans and other investments | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Net realized investment gains (losses) | -4.5 | -36.8 | -20.7 |
Other securities | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' |
Net realized investment gains (losses) | ($5) | $22.50 | $2.70 |
INVESTMENTS_SCHEDULE_OF_OTHER_
INVESTMENTS - SCHEDULE OF OTHER THAN TEMPORARY IMPAIRMENT (DETAILS) (Available-for-sale securities, USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Available-for-sale securities | ' | ' | ' | |||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ' | ' | ' | |||
Credit losses on fixed maturity securities, available for sale, beginning of period | ($1.60) | ($2) | ($6.10) | |||
Add: credit losses on other-than-temporary impairments not previously recognized | 0 | 0 | -1.1 | |||
Less: credit losses on securities sold | 0.3 | 0.4 | 5.2 | |||
Less: credit losses on securities impaired due to intent to sell | 0 | [1] | 0 | [1] | 0 | [1] |
Add: credit losses on previously impaired securities | 0 | 0 | 0 | |||
Less: increases in cash flows expected on previously impaired securities | 0 | 0 | 0 | |||
Credit losses on fixed maturity securities, available for sale, end of period | ($1.30) | ($1.60) | ($2) | |||
[1] | Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis. |
INVESTMENTS_SUMMARY_OF_INVESTM2
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY CONTRACTUAL MATURITY (DETAILS) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Amortized Cost | ' |
Due in one year or less | $18.50 |
Due after one year through five years | 69.8 |
Due after five years through ten years | 532.5 |
Due after ten years | 2,725.40 |
Subtotal | 3,346.20 |
Structured securities | 691.7 |
Total | 4,037.90 |
Estimated Fair Value | ' |
Due in one year or less | 18.5 |
Due after one year through five years | 68.1 |
Due after five years through ten years | 515.9 |
Due after ten years | 2,550.50 |
Subtotal | 3,153 |
Structured securities | 676.6 |
Total | $3,829.60 |
INVESTMENTS_SUMMARY_OF_INVESTM3
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (DETAILS) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | $3,543.80 | $479.40 |
Unrealized losses, less than 12 months | -178.1 | -14.2 |
Fair value, twelve months or longer | 285.8 | 429.2 |
Unrealized losses, 12 months or longer | -30.2 | -18.7 |
Fair value, total | 3,829.60 | 908.6 |
Unrealized losses, total | -208.3 | -32.9 |
US treasury and government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 23.8 | ' |
Unrealized losses, less than 12 months | -0.6 | ' |
Fair value, twelve months or longer | 0 | ' |
Unrealized losses, 12 months or longer | 0 | ' |
Fair value, total | 23.8 | ' |
Unrealized losses, total | -0.6 | ' |
US states and political subdivisions debt securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 473.6 | 48.3 |
Unrealized losses, less than 12 months | -30.3 | -1.8 |
Fair value, twelve months or longer | 79.2 | 68.7 |
Unrealized losses, 12 months or longer | -8.7 | -3.4 |
Fair value, total | 552.8 | 117 |
Unrealized losses, total | -39 | -5.2 |
Corporate debt securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 2,406.10 | 338.1 |
Unrealized losses, less than 12 months | -132.8 | -11.2 |
Fair value, twelve months or longer | 170.3 | 174.5 |
Unrealized losses, 12 months or longer | -20.8 | -9 |
Fair value, total | 2,576.40 | 512.6 |
Unrealized losses, total | -153.6 | -20.2 |
Asset-backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 308.4 | 41.7 |
Unrealized losses, less than 12 months | -6.5 | -0.3 |
Fair value, twelve months or longer | 32.5 | 111.6 |
Unrealized losses, 12 months or longer | -0.7 | -4.9 |
Fair value, total | 340.9 | 153.3 |
Unrealized losses, total | -7.2 | -5.2 |
Collateralized debt obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 46.7 | 19.4 |
Unrealized losses, less than 12 months | -0.5 | -0.4 |
Fair value, twelve months or longer | 0 | 32.5 |
Unrealized losses, 12 months or longer | 0 | -0.6 |
Fair value, total | 46.7 | 51.9 |
Unrealized losses, total | -0.5 | -1 |
Commercial mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 161.8 | 4.9 |
Unrealized losses, less than 12 months | -5.8 | -0.1 |
Fair value, twelve months or longer | 0 | 6.2 |
Unrealized losses, 12 months or longer | 0 | -0.5 |
Fair value, total | 161.8 | 11.1 |
Unrealized losses, total | -5.8 | -0.6 |
Mortgage pass through securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 1.6 | 0 |
Unrealized losses, less than 12 months | 0 | 0 |
Fair value, twelve months or longer | 1.6 | 1.9 |
Unrealized losses, 12 months or longer | 0 | 0 |
Fair value, total | 3.2 | 1.9 |
Unrealized losses, total | 0 | 0 |
Collateralized mortgage obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 121.8 | 27 |
Unrealized losses, less than 12 months | -1.6 | -0.4 |
Fair value, twelve months or longer | 2.2 | 33.8 |
Unrealized losses, 12 months or longer | 0 | -0.3 |
Fair value, total | 124 | 60.8 |
Unrealized losses, total | -1.6 | -0.7 |
Equity securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 26.8 | 17.8 |
Unrealized losses, less than 12 months | -4.9 | -1.6 |
Fair value, twelve months or longer | 0 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Fair value, total | 26.8 | 17.8 |
Unrealized losses, total | ($4.90) | ($1.60) |
INVESTMENTS_SCHEDULE_OF_PAR_VA
INVESTMENTS - SCHEDULE OF PAR VALUE, AMORTIZED COST, AND ESTIMATED FAIR VALUE ON UNDERLYING COLLATERAL (DETAILS) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | $5,264.30 |
Amortized cost | 4,965.50 |
Estimated fair value | 5,227.40 |
Below 4 percent | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | 981.3 |
Amortized cost | 912.5 |
Estimated fair value | 927.8 |
4 percent – 5 percent | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | 830.8 |
Amortized cost | 785 |
Estimated fair value | 804 |
5 percent – 6 percent | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | 2,532.40 |
Amortized cost | 2,389 |
Estimated fair value | 2,546.60 |
6 percent – 7 percent | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | 759.2 |
Amortized cost | 714.7 |
Estimated fair value | 773.5 |
7 percent – 8 percent | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | 116.7 |
Amortized cost | 119.1 |
Estimated fair value | 129.5 |
8 percent and above | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Par value | 43.9 |
Amortized cost | 45.2 |
Estimated fair value | $46 |
INVESTMENTS_SCHEDULE_OF_AMORTI1
INVESTMENTS - SCHEDULE OF AMORTIZED COST AND ESTIMATED FAIR VALUE OF STRUCTURED SECURITIES (DETAILS) (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | $4,965.50 |
Amount | 5,227.40 |
Percent of fixed maturities | 22.60% |
Pass-throughs, sequential and equivalent securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,398.80 |
Amount | 1,469.90 |
Percent of fixed maturities | 6.30% |
Planned amortization classes, target amortization classes and accretion-directed bonds | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 336.9 |
Amount | 357.5 |
Percent of fixed maturities | 1.60% |
Commercial mortgage backed securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,517.10 |
Amount | 1,609 |
Percent of fixed maturities | 6.90% |
Asset-backed securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,393.40 |
Amount | 1,462.10 |
Percent of fixed maturities | 6.30% |
Collateralized debt obligations | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 287 |
Amount | 294 |
Percent of fixed maturities | 1.30% |
Other | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 32.3 |
Amount | $34.90 |
Percent of fixed maturities | 0.20% |
INVESTMENTS_SCHEDULE_OF_CARRYI
INVESTMENTS - SCHEDULE OF CARRYING VALUE AND ESTIMATED FAIR VALUE OF OUTSTANDING MORTGAGE LOANS (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Millions, unless otherwise specified | |||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | $1,729.50 | $1,573.20 | |
Estimate of fair value measurement | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 1,749.50 | [1] | ' |
Collateral | 3,616.20 | [1] | ' |
Estimate of fair value measurement | Less than 60% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 779.8 | [1] | ' |
Collateral | 2,254.50 | [1] | ' |
Estimate of fair value measurement | 60% to 70% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 386.4 | [1] | ' |
Collateral | 592.4 | [1] | ' |
Estimate of fair value measurement | Greater than 70% to 80% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 409.5 | [1] | ' |
Collateral | 563.8 | [1] | ' |
Estimate of fair value measurement | Greater than 80% to 90% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 141.4 | [1] | ' |
Collateral | 164.9 | [1] | ' |
Estimate of fair value measurement | Greater than 90% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 32.4 | [1] | ' |
Collateral | 40.6 | [1] | ' |
Carrying value | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 1,729.50 | ' | |
Carrying value | Less than 60% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 744.4 | [1] | ' |
Carrying value | 60% to 70% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 386 | [1] | ' |
Carrying value | Greater than 70% to 80% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 420 | [1] | ' |
Carrying value | Greater than 80% to 90% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | 141.6 | [1] | ' |
Carrying value | Greater than 90% | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Mortgage loans | $37.50 | [1] | ' |
[1] | Loan-to-value ratios are calculated as the ratio of: (i) the carrying value of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral. |
LIABILITIES_FOR_INSURANCE_PROD2
LIABILITIES FOR INSURANCE PRODUCTS (DETAILS) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Liability for future policy benefits | $11,222.50 | $11,319.40 | ' | |||
Policyholder account balance | 12,776.40 | 12,913.10 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ' | ' | ' | |||
Balance, beginning of the year | 1,679.30 | 1,637.30 | 1,543.70 | |||
Incurred claims (net of reinsurance) related to: | ' | ' | ' | |||
Current year | 1,511.10 | 1,570.10 | 1,545.80 | |||
Prior years | -162.3 | [1] | -56.4 | [1] | -41.7 | [1] |
Total incurred | 1,348.80 | 1,513.70 | 1,504.10 | |||
Interest on claim reserves | 75.2 | 77.8 | 78.4 | |||
Paid claims (net of reinsurance) related to: | ' | ' | ' | |||
Current year | 870 | 891.3 | 866.5 | |||
Prior years | 659.9 | 663.9 | 626.2 | |||
Total paid | 1,529.90 | 1,555.20 | 1,492.70 | |||
Net change in balance for reinsurance assumed and ceded | 136.7 | 5.7 | 3.8 | |||
Balance, end of the year | 1,710.10 | 1,679.30 | 1,637.30 | |||
Long-term care | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Interest rate assumptions, percent | 6.00% | ' | ' | |||
Liability for future policy benefits | 4,999.70 | 5,220.60 | ' | |||
Traditional life insurance contracts | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Interest rate assumptions, percent | 5.00% | [2] | ' | ' | ||
Liability for future policy benefits | 2,517.50 | [2] | 2,444.60 | [2] | ' | |
Accident and health contracts | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Interest rate assumptions, percent | 5.00% | ' | ' | |||
Liability for future policy benefits | 2,466.80 | 2,443.60 | ' | |||
Interest-sensitive life insurance contracts | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Interest rate assumptions, percent | 6.00% | ' | ' | |||
Liability for future policy benefits | 526.5 | 513.8 | ' | |||
Policyholder account balance | 2,669.50 | 2,733.10 | ' | |||
Annuities and supplemental contracts with life contingencies | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Interest rate assumptions, percent | 4.00% | [3] | ' | ' | ||
Liability for future policy benefits | 712 | [3] | 696.8 | [3] | ' | |
Fixed index annuities | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Policyholder account balance | 4,093.90 | 3,779.70 | ' | |||
Other annuities | ' | ' | ' | |||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | |||
Policyholder account balance | $6,013 | $6,400.30 | ' | |||
[1] | The reserves and liabilities we establish are necessarily based on estimates, assumptions and prior years' statistics. Such amounts will fluctuate based upon the estimation procedures used to determine the amount of unpaid losses. It is possible that actual claims will exceed our reserves and have a material adverse effect on our results of operations and financial condition. | |||||
[2] | Principally, modifications of: (i) the 1965 ‑ 70 and 1975 - 80 Basic Tables; and (ii) the 1941, 1958 and 1980 Commissioners' Standard Ordinary Tables; as well as Company experience. | |||||
[3] | Principally, modifications of: (i) the 1971 Individual Annuity Mortality Table; (ii) the 1983 Table "A"; and (iii) the Annuity 2000 Mortality Table; as well as Company experience. |
INCOME_TAXES_INCOME_TAXES_COMP
INCOME TAXES INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current tax expense | ' | ' | ' | ' | ' | ' | ' | ' | $8.20 | $12.50 | $11.90 |
Deferred tax expense | ' | ' | ' | ' | ' | ' | ' | ' | 160.4 | 117.4 | 101.6 |
Deferred tax benefit on loss related to reinsurance transaction | ' | ' | ' | ' | ' | ' | ' | ' | -34.4 | 0 | 0 |
Deferred tax benefit related to loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | -5.9 | 0 | 0 |
Valuation allowance applicable to current year income | ' | ' | ' | ' | ' | ' | ' | ' | -19.7 | -60.3 | 0 |
Income tax expense calculated based on annual effective tax rate | ' | ' | ' | ' | ' | ' | ' | ' | 108.6 | 69.6 | 113.5 |
Valuation allowance reduction applicable to income in future years and utilization of capital loss carryforwards | ' | ' | ' | ' | ' | ' | ' | ' | -141.2 | -111.2 | -143 |
Valuation allowance reduction applicable to the settlement with the IRS regarding the classification of a portion of the cancellation of indebtedness income | ' | ' | ' | ' | ' | ' | ' | ' | -71.8 | 0 | 0 |
Valuation allowance reduction resulting from the completion of certain investment trading strategies resulting in utilization of capital loss carryforwards | 277 | ' | ' | ' | ' | ' | ' | ' | -64.7 | 0 | 0 |
Other valuation allowance items | ' | ' | ' | ' | ' | ' | ' | ' | -15.3 | 0 | 0 |
Valuation allowance related to expired capital loss carryforwards | ' | ' | ' | ' | ' | ' | ' | ' | -159.4 | 0 | 0 |
Deferred taxes on expired capital loss carryforwards | ' | ' | ' | ' | ' | ' | ' | ' | 159.4 | 0 | 0 |
Other items | ' | ' | ' | ' | ' | ' | ' | ' | 11.2 | -23.7 | 0 |
Total income tax benefit | $64.90 | $168.60 | $37.60 | $22.70 | ($16.50) | $153.80 | ($38.80) | ($33.20) | ($173.20) | ($65.30) | ($29.50) |
INCOME_TAXES_INCOME_TAXES_RECO
INCOME TAXES INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
U.S. statutory corporate rate | 35.00% | 35.00% | 35.00% |
Valuation allowance | -154.90% | -110.10% | -46.70% |
Expired capital loss carryforwards (which were fully offset by a corresponding reduction in the valuation allowance) | 52.30% | 0.00% | 0.00% |
Non-taxable income and nondeductible benefits, net | 5.00% | 32.30% | 0.70% |
State taxes | 1.90% | 1.40% | 0.90% |
Provision for tax issues, tax credits and other | 3.90% | -0.50% | 0.50% |
Effective tax rate | -56.80% | -41.90% | -9.60% |
INCOME_TAXES_INCOME_TAXES_DEFE
INCOME TAXES INCOME TAXES - DEFERRED ASSETS AND LIABILIITES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, unless otherwise specified | ||||
Deferred tax assets: | ' | ' | ' | ' |
Net federal operating loss carryforwards | $1,240.20 | $1,330.20 | ' | ' |
Net state operating loss carryforwards | 20 | 16.2 | ' | ' |
Tax credits | 43.9 | 39.2 | ' | ' |
Capital loss carryforwards | 13.4 | 296.2 | ' | ' |
Investments | 74.3 | 0 | ' | ' |
Insurance liabilities | 723.8 | 746.3 | ' | ' |
Other | 64.7 | 86 | ' | ' |
Gross deferred tax assets | 2,180.30 | 2,514.10 | ' | ' |
Deferred tax liabilities: | ' | ' | ' | ' |
Investments | 0 | -24.1 | ' | ' |
Present value of future profits and deferred acquisition costs | -306.8 | -325.2 | ' | ' |
Accumulated other comprehensive income | -405.5 | -655.3 | ' | ' |
Gross deferred tax liabilities | -712.3 | -1,004.60 | ' | ' |
Net deferred tax assets before valuation allowance | 1,468 | 1,509.50 | ' | ' |
Valuation allowance | -294.8 | -766.9 | -938.4 | -1,081.40 |
Net deferred tax assets | 1,173.20 | 742.6 | ' | ' |
Current income taxes accrued | -26 | -25.7 | ' | ' |
Income tax assets, net | $1,147.20 | $716.90 | ' | ' |
INCOME_TAXES_INCOME_TAXES_VALU
INCOME TAXES INCOME TAXES - VALUATION ALLOWANCE (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Increase (Decrease) in Valuation Allowance [Roll Forward] | ' | ' | ' | |||
Valuation allowance, beginning of period | $766.90 | $938.40 | $1,081.40 | |||
Valuation allowance | -472.1 | [1] | -171.5 | [2] | -143 | [3] |
Valuation allowance, end of period | $294.80 | $766.90 | $938.40 | |||
[1] | The $472.1 million reduction to the deferred tax valuation allowance during 2013 resulted from: (i) $19.7 million applicable to higher current year income; (ii) $114.7 million applicable to higher levels of income on projected future taxable income; (iii) $26.5 million related to the utilization of capital loss carryforwards; (iv) $159.4 million related to the expiration of capital loss carryforwards; (v) $71.8 million applicable to the classification of a portion of the CODI; (vi) $64.7 million related to the completion of certain investment trading strategies; and (vii) other reductions totaling $15.3 million. | |||||
[2] | The $171.5 million reduction to the deferred tax valuation allowance during 2012 resulted primarily from: (i) higher taxable income in 2012 (including investment gains); and (ii) our recent higher levels of operating income when projecting future taxable income. | |||||
[3] | The $143.0 million reduction to the deferred tax valuation allowance during 2011 resulted primarily from our recent higher levels of operating income when projecting future taxable income. |
INCOME_TAXES_INCOME_TAXES_NET_
INCOME TAXES INCOME TAXES - NET OPERATING LOSSES (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Operating Loss Carryforwards [Line Items] | ' |
Capital loss carryforwards | $2.10 |
Total loss carryforwards | 4,146.80 |
Capital loss carryforwards, unrecognized tax benefit | 36.1 |
Total loss carryforwards, unrecognized tax benefit | -565.3 |
Capital loss carryforwards, net of unrecognized tax benefits | 38.2 |
Total loss carryforwards, net of unrecognized tax benefits | 3,581.50 |
Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 1,289.50 |
Net operating loss carryforward, unrecognized tax benefit | -379 |
Net operating loss carryforwards, net of unrecognized tax benefits | 910.5 |
Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 2,855.20 |
Net operating loss carryforward, unrecognized tax benefit | -222.4 |
Net operating loss carryforwards, net of unrecognized tax benefits | 2,632.80 |
Carryforward Expiration 2014 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-14 |
Capital loss carryforwards | 0.2 |
Total loss carryforwards | 0.2 |
Carryforward Expiration 2014 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2014 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2016 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-16 |
Capital loss carryforwards | 1.9 |
Total loss carryforwards | 1.9 |
Carryforward Expiration 2016 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2016 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2018 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-18 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 314.9 |
Carryforward Expiration 2018 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 314.9 |
Carryforward Expiration 2018 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2021 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-21 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 30 |
Carryforward Expiration 2021 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 30 |
Carryforward Expiration 2021 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2022 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-22 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 202 |
Carryforward Expiration 2022 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 202 |
Carryforward Expiration 2022 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2023 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-23 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 2,941.80 |
Carryforward Expiration 2023 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 742.6 |
Carryforward Expiration 2023 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 2,199.20 |
Carryforward Expiration 2025 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-25 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 118.6 |
Carryforward Expiration 2025 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2025 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 118.6 |
Carryforward Expiration 2027 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-27 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 220.6 |
Carryforward Expiration 2027 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2027 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 220.6 |
Carryforward Expiration 2028 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-28 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 0.5 |
Carryforward Expiration 2028 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2028 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0.5 |
Carryforward Expiration 2029 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-29 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 272.3 |
Carryforward Expiration 2029 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2029 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 272.3 |
Carryforward Expiration 2032 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-32 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 44 |
Carryforward Expiration 2032 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 0 |
Carryforward Expiration 2032 | Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | $44 |
INCOME_TAXES_INCOME_TAXES_UNRE
INCOME TAXES INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' |
Balance at beginning of year | $310.50 | $318.20 |
Increase based on tax positions taken in prior years | 35.6 | 7.3 |
Decrease based on tax positions taken in prior years | -27 | -15 |
Increase based on tax positions taken in the current year | 47.6 | 0 |
Decrease in unrecognized tax benefits related to settlements with taxing authorities | -140 | 0 |
Balance at end of year | $226.70 | $310.50 |
INCOME_TAXES_INCOME_TAXES_NARR
INCOME TAXES INCOME TAXES - NARRATIVE (Details) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Jul. 31, 2006 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Dec. 31, 2010 | Jan. 20, 2009 | Jul. 31, 2006 | Dec. 31, 2008 | Dec. 31, 2013 | Jul. 31, 2006 | Dec. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Non life insurance companies | Non life insurance companies | Non life insurance companies | Life insurance companies | Life insurance companies | Life insurance companies | Internal Revenue Service | Taxable operating income exceeds deferred tax valuation | Utilization of capital loss carryforwards | Utilization of capital loss carryforwards | Lower Future Taxable Income Due to Investment Trading Strategy [Member] | Expiration of capital loss carryforward | Cancellation of indebtedness income | Investment trading strategy completion | Other assets | Convertible subordinated debt | Convertible subordinated debt | ||||||||||||
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Valuation allowance | ' | $294,800,000 | $294,800,000 | $766,900,000 | $938,400,000 | ' | $1,081,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $159,400,000 | ' | ' | ' | ' | ' | |||
Unrecognized tax benefits that would impact effective tax rate | ' | 156,000,000 | 156,000,000 | 285,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Operating loss carryforwards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,855,200,000 | ' | ' | 1,289,500,000 | 3,500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Deferred tax assets more likely than not to be realized through future taxable earnings | ' | 1,173,200,000 | 1,173,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Valuation allowance | ' | ' | 472,100,000 | [1] | 171,500,000 | [2] | 143,000,000 | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -114,700,000 | -97,100,000 | -26,500,000 | -32,400,000 | -159,400,000 | -71,800,000 | -64,700,000 | -15,300,000 | ' | ' |
Valuation allowance related to expired capital loss carryforwards | ' | ' | -159,400,000 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Valuation allowance reduction applicable to the settlement with the IRS regarding the classification of a portion of the cancellation of indebtedness income | ' | ' | -71,800,000 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Gains From Certain Investment Trading Strategies for Tax Purposes Only | ' | 277,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Valuation allowance applicable to current year income | ' | ' | -19,700,000 | -60,300,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Valuation allowance reduction resulting from the completion of certain investment trading strategies resulting in utilization of capital loss carryforwards | ' | 277,000,000 | -64,700,000 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assumed growth rate for the next five years included in deferred tax valuation analysis | ' | 3.00% | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Normalized average annual taxable income for last three years | ' | ' | 360,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Normalized average annual taxable income for last three years in prior projection | ' | ' | 292,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Loss limitation based on income of life insurance company, percent | ' | 35.00% | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Loss limitation based on loss of non-life entities, percent | ' | 35.00% | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | 7.00% | |||
Federal long-term tax exempt rate | ' | 3.50% | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Ownership change threshold restricting NOL usage | ' | 50.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Percentage of stockholders related to Section 382 Rights agreement | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Ownership percentage threshold relating to Company 382 Securities | ' | ' | ' | ' | ' | ' | ' | 4.99% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Capital loss carryforwards, net of unrecognized tax benefits | ' | 38,200,000 | 38,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net state operating loss carryforwards | ' | 20,000,000 | 20,000,000 | 16,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Amount of tax losses on investment in Conseco Finance Corp | ' | ' | ' | ' | ' | ' | ' | ' | 3,800,000,000 | ' | ' | 2,100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Cancellation of debt income realized | 2,500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net operating losses classified as a reduction to life net operating loss carryforwards | 631,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Effect of classification of net operating loss carryforward based on internal revenue service resolution, treated as a non-life net operating loss reduction | ' | 315,000,000 | 315,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Loss on investment in senior health | ' | ' | ' | ' | ' | 878,000,000 | ' | ' | ' | 136,000,000 | ' | ' | 742,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Income Tax Examination, Expired Capital Loss Carryforwards if IRS position is correct | ' | ' | 473,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unrecognized tax benefit related to loss on investment in Senior Health | ' | ' | 166,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Increase in valuation allowance if unrecognized tax benefit is recognized | ' | 41,000,000 | 41,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Income tax penalties and interest accrued | ' | 1,800,000 | 1,800,000 | 1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Tax benefit realized on repurchase premium paid to repurchase convertible debentures | ' | ' | 14,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Operating loss carryforwards related to deductions for stock options and restricted stock | ' | 2,900,000 | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Increase in tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 37,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
CODI benefit reduction due to anticipated adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Uncertain tax positions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net corrections on previously filed returns | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
[1] | The $472.1 million reduction to the deferred tax valuation allowance during 2013 resulted from: (i) $19.7 million applicable to higher current year income; (ii) $114.7 million applicable to higher levels of income on projected future taxable income; (iii) $26.5 million related to the utilization of capital loss carryforwards; (iv) $159.4 million related to the expiration of capital loss carryforwards; (v) $71.8 million applicable to the classification of a portion of the CODI; (vi) $64.7 million related to the completion of certain investment trading strategies; and (vii) other reductions totaling $15.3 million. | |||||||||||||||||||||||||||
[2] | The $171.5 million reduction to the deferred tax valuation allowance during 2012 resulted primarily from: (i) higher taxable income in 2012 (including investment gains); and (ii) our recent higher levels of operating income when projecting future taxable income. | |||||||||||||||||||||||||||
[3] | The $143.0 million reduction to the deferred tax valuation allowance during 2011 resulted primarily from our recent higher levels of operating income when projecting future taxable income. |
NOTES_PAYABLE_DIRECT_CORPORATE2
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS OUTSTANDING (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 28, 2012 |
Senior secured credit agreement | Senior secured credit agreement | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Senior secured notes 9 percent | Other notes payable | Senior secured note 6.375 percent | Senior secured note 6.375 percent | Subordinated Debt [Member] | Subordinated Debt [Member] | Senior notes | Senior notes | |||
Senior secured note 6.375 percent | Senior secured note 6.375 percent | |||||||||||||||
Debt Instruments [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Direct corporate obligations | $856,400,000 | $1,004,200,000 | $581,500,000 | $644,600,000 | ' | ' | ' | ' | ' | ' | $275,000,000 | ' | $3,500,000 | $93,000,000 | $275,000,000 | $275,000,000 |
Unamortized Discount | ' | ' | ($3,600,000) | ($5,000,000) | $0 | ' | ($3,400,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | 7.00% | ' | 7.00% | 9.00% | 6.00% | ' | 6.38% | ' | ' | ' | 6.38% |
NOTES_PAYABLE_DIRECT_CORPORATE3
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - RECAPITALIZATION PLAN (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 21, 2010 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 |
Senior secured credit agreement | New Senior Secured Credit Agreement And Senior Secured Note 6.375 Percent [Member] | Convertible subordinated debt | Convertible subordinated debt | Senior secured credit agreement | Senior secured credit agreement | Senior secured notes 9 percent | Senior secured notes 9 percent | Convertible Subordinated And Senior And Senior Secured Notes 9 Percent [Member] | Senior notes | |||||
Senior secured note 6.375 percent | ||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total sources | $944.50 | $0 | $944.50 | $0 | $669.50 | ' | ' | ' | $363.60 | ' | ' | ' | ' | $275 |
Cash on hand for general corporate purposes | ' | ' | ' | ' | ' | 13.7 | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase and repayment of debt | ' | 126.9 | 810.6 | 144.8 | ' | ' | 355.1 | 200 | ' | 223.8 | 322.7 | 275 | ' | ' |
Debt issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23.1 | ' |
Accrued interest | ' | 95.9 | 109 | 95.5 | ' | ' | ' | ' | ' | ' | ' | ' | 6.1 | ' |
Uses of Cash from Recapitalization Transaction | $944.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE4
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 21, 2010 | Sep. 30, 2012 | Jul. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | 31-May-13 | Mar. 28, 2013 | Feb. 08, 2013 | Sep. 30, 2012 | 31-May-10 | Sep. 30, 2012 | Dec. 31, 2013 | Sep. 28, 2012 | Oct. 29, 2012 | Sep. 28, 2012 | Dec. 31, 2012 | Sep. 04, 2012 | Dec. 31, 2013 | Mar. 28, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 28, 2012 | Dec. 31, 2013 | 31-May-13 | Dec. 31, 2013 | Dec. 31, 2013 | 31-May-13 | Dec. 31, 2013 | Sep. 28, 2012 | Dec. 31, 2013 | Sep. 28, 2012 |
Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured note 6.375 percent | Senior secured note 6.375 percent | Senior secured notes 9 percent | Senior secured notes 9 percent | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Other notes payable | Other notes payable | Other notes payable | Notes payable to banks | Notes payable to banks | Notes payable to banks | Maximum | Maximum | Maximum | Maximum | Minimum | Minimum | Minimum | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, four-year | Term loan facility, four-year | |||||
Rate | Rate | Senior secured note 6.375 percent | Senior secured note 6.375 percent | Senior secured note 6.375 percent | Senior secured notes 9 percent | Senior secured notes 9 percent | Senior secured notes 9 percent | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior notes | Senior notes | Notes payable to banks | Notes payable to banks | Senior notes | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | ||||||||||||||||||||
Senior secured note 6.375 percent | Senior secured note 6.375 percent | Senior secured credit agreement | Senior secured credit agreement | Senior secured note 6.375 percent | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principle amount of debt repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $63,800,000 | $59,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual amortization percentage of loan in first and second year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | 20.00% |
Notes payable – direct corporate obligations | ' | 856,400,000 | 1,004,200,000 | ' | ' | 581,500,000 | 644,600,000 | 275,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | 275,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 394,000,000 | 425,000,000 | 187,500,000 | 250,000,000 |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 6.38% | ' | 9.00% | ' | ' | ' | ' | 7.00% | ' | ' | ' | 7.00% | ' | ' | ' | 6.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Final purchase price per principal amount of each convertible senior debenture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,123.82 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | 326,300,000 | 355,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of trustees or holders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption percentage of aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption percentage of aggregate principal amount with cash from equity offerings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Price percentage of aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 106.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 293,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of notes payable, net | 944,500,000 | 0 | 944,500,000 | 0 | 669,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of secured debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | 267,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash tender offer to repay long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 273,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of long-term debt, portion related to tender offer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 313,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of long-term debt, portion related to consent payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of long-term debt, portion related to accrued and unpaid interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum pro forma risk-based capital ratio for restricted payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 225.00% | ' | ' | ' | ' | ' | ' |
Limit of restricted payments permitted, cash dividends to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | ' | ' | ' | ' |
Limit of restricted payments permitted, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Limit of restricted payments permitted, amount of allowed additional payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 242,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, threshold requiring equal debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17.50% | ' | 25.00% | 22.50% | ' | 20.00% | 17.50% | ' | ' | ' | ' |
Mandatory debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,400,000 | ' | 28,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,700,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extinguishment of beneficial conversion feature related to the repurchase of convertible debentures | ' | -12,600,000 | -24,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of shares acquired | ' | -118,400,000 | -180,200,000 | -69,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 124,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior debenture, par value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debt repurchase tender offer, average volume weighted average (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11.24 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion rate for convertible senior debentures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 184 | ' | ' | ' | ' | ' | 184 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debt repurchase tender offer addition to multiplier (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $61.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debentures submitted for conversion, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $25,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of 7.0% debentures (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,700 | 4,739 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE5
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - NEW SENIOR SECURED CREDIT AGREEMENT (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-13 | Sep. 28, 2012 | Dec. 31, 2013 | Sep. 28, 2012 | Sep. 28, 2012 | Dec. 31, 2013 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Dec. 31, 2013 | 31-May-13 | Sep. 28, 2012 | Sep. 28, 2012 | Dec. 31, 2013 | 31-May-13 | Dec. 31, 2013 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | Dec. 31, 2013 |
Senior secured credit agreement | Senior secured credit agreement | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, four-year | Term loan facility, four-year | Term loan facility, four-year | Revolving credit facility | Revolving credit facility | Maximum | Maximum | Maximum | Maximum | Maximum | Minimum | Minimum | Eurodollar rate | Eurodollar rate | Eurodollar rate | Eurodollar rate | Base rate | Base rate | Base rate | Base rate | Base rate | Base rate | Base rate subject to eurodollar floor | Base rate subject to eurodollar floor | Base rate floor | Base rate floor | Base rate floor | Base rate floor | Eurodollar floor | Eurodollar floor | Eurodollar floor | Eurodollar floor | |||
Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Notes payable to banks | Notes payable to banks | Senior secured credit agreement | Notes payable to banks | Notes payable to banks | Senior secured credit agreement | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Letter of credit | Uncommitted subfacility | Notes payable to banks | Notes payable to banks | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, four-year | Term loan facility, four-year | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, four-year | Term loan facility, four-year | Revolving credit facility | Revolving credit facility | Term loan facility, six-year | Term loan facility, four-year | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, four-year | Term loan facility, four-year | Term loan facility, six-year | Term loan facility, four-year | Revolving credit facility | Revolving credit facility | |||||
Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Notes payable to banks | Notes payable to banks | Senior secured credit agreement | Senior secured credit agreement | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | Notes payable to banks | ||||||||||||
Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | ||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable – direct corporate obligations | $856,400,000 | $1,004,200,000 | $581,500,000 | $644,600,000 | ' | ' | ' | ' | ' | $394,000,000 | $425,000,000 | ' | $187,500,000 | $250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, term | ' | ' | ' | ' | ' | ' | ' | ' | '6 years | ' | ' | '4 years | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual amortization percentage of loan in first and second year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual amortization percentage of loan in third and fourth year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net cash proceeds from asset sales and casualty events | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net cash proceeds received for restricted subsidiaries from debt issuances | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of restricted payments | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, threshold requiring equal debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | 22.50% | ' | ' | 20.00% | 17.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mandatory prepayments, reduced percentage | ' | ' | ' | ' | ' | ' | ' | 33.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, maximum threshold for repayment requirement | ' | ' | ' | ' | ' | 20.00% | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, percentage required for no mandatory prepayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mandatory debt repayment | ' | ' | ' | ' | 20,400,000 | ' | 28,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional debt repayment | ' | ' | ' | ' | ' | 42,700,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% | 2.75% | 3.25% | 2.25% | 2.75% | 1.75% | 2.25% | 1.25% | 2.50% | 2.00% | 1.00% | 0.75% | ' | 2.25% | ' | 2.00% | ' | ' | 3.50% | 3.00% |
Variable interest rate, floor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.25% | ' | 2.00% | ' | 1.25% | 1.00% | ' | ' |
Debt to capitalization ratio required | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio at period end | ' | ' | ' | ' | ' | 17.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest coverage ratio required | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lesser of interest coverage ratio required | ' | ' | ' | ' | ' | 8.53 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate adjusted capital to company action level risk-based capital ratio, after stated date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate adjusted capital to company action level risk based capital ratio at period end | ' | ' | ' | ' | ' | 410.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum combined statutory capital and surplus | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Combined statutory capital and surplus at period end | ' | ' | ' | ' | ' | $1,945,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE6
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - 7.0% DEBENTURES AND 6.375% NOTES AND 6.375% NOTES (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Jul. 02, 2013 | Mar. 28, 2013 | Feb. 08, 2013 | Sep. 30, 2012 | 31-May-10 | Dec. 31, 2013 | Sep. 28, 2012 | Sep. 04, 2012 | Dec. 31, 2013 |
Senior secured note 6.375 percent | Senior secured note 6.375 percent | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Senior notes | Senior notes | Other notes payable | Minimum | |||
Rate | Rate | Senior secured note 6.375 percent | Senior secured note 6.375 percent | Convertible subordinated debt | Senior notes | |||||||||
Senior secured note 6.375 percent | ||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | 6.38% | 7.00% | ' | ' | ' | 7.00% | ' | ' | 6.38% | ' | ' |
Minimum outstanding principle amount before triggering discard | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $25,000,000 | ' | ' | ' |
Redemption percentage of aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' |
Debt amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 293,000,000 | ' | ' | ' | ' |
Notes payable – direct corporate obligations | 856,400,000 | 1,004,200,000 | 275,000,000 | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | 275,000,000 | ' | ' |
Conversion rate for convertible senior debentures | ' | ' | ' | ' | ' | 184.3127 | 183.5145 | ' | ' | ' | ' | ' | ' | ' |
Convertible senior debenture, par value | ' | ' | ' | ' | ' | ' | ' | 1,000 | ' | ' | ' | ' | ' | ' |
Percentage of aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' |
Percentage of trustees or holders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' |
Minimum pro forma risk-based capital ratio for restricted payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 225.00% |
Limit of restricted payments permitted, cash dividends to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 |
Limit of restricted payments permitted, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,000,000 | ' | ' | ' |
Limit of restricted payments permitted, amount of allowed additional payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 242,000,000 | ' | ' | ' |
Repayments of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $355,100,000 | ' |
Discount rate on estimated fair market value of convertible debentures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.80% | ' |
NOTES_PAYABLE_DIRECT_CORPORATE7
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - PREVIOUS CREDIT AGREEMENT and HEALTH NOTE (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 21, 2010 | 31-May-11 | Mar. 31, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | Sep. 30, 2012 | Sep. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Other notes payable | Senior secured note 6.375 percent | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior notes | Senior notes | Senior notes | Common stock and additional paid-in capital | Common stock and additional paid-in capital | Common stock and additional paid-in capital | |||||
Other notes payable | Senior secured note 6.375 percent | Senior secured note 6.375 percent | ||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | 6.00% | 6.38% | ' | ' | ' | ' | ' | ' | ' | ' | 6.38% | ' | ' | ' |
Debt amount | ' | ' | ' | ' | ' | ' | $375,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate prior to amendment | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate, LIBOR floor prior to amendment | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on base rate | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate, base rate floor | ' | ' | ' | ' | ' | ' | ' | 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable floor, base rate prior to amendment | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on base rate floor prior to amendment | ' | ' | ' | ' | ' | ' | ' | 2.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mandatory debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,400,000 | 69,800,000 | ' | ' | ' | ' | ' | ' |
Cost of shares acquired | ' | -118,400,000 | -180,200,000 | -69,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -118,400,000 | -180,200,000 | -69,800,000 |
Prepayment of senior debt | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Periodic principle payment | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase and repayment of debt | ' | 126,900,000 | 810,600,000 | 144,800,000 | 25,000,000 | ' | ' | ' | ' | 223,800,000 | ' | ' | 50,000,000 | ' | ' | ' | ' | ' |
Issuance of notes payable, net | $944,500,000 | $0 | $944,500,000 | $0 | ' | ' | $363,600,000 | ' | ' | ' | ' | ' | ' | $275,000,000 | ' | ' | ' | ' |
Upfront fees paid to lenders, percentage | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate, LIBOR floor | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE8
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - LOSS ON EXTINGUISHMENT OR MODIFICATION OF DEBT (DETAILS) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Senior secured notes 9 percent | Senior secured notes 9 percent | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Paulson & Co. Inc. | Common stock and additional paid-in capital | Common stock and additional paid-in capital | ||||
Other notes payable | |||||||||||||||
Convertible subordinated debt | |||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | $65,400,000 | $200,200,000 | $3,400,000 | $62,500,000 | $136,500,000 | ' | ' | $58,200,000 | ' | $5,100,000 | $2,900,000 | $400,000 | ' | ' | ' |
Notes payable – direct corporate obligations | 856,400,000 | 1,004,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | 581,500,000 | 644,600,000 | 200,000,000 | ' | ' |
Interest rate | ' | ' | ' | ' | ' | 7.00% | 7.00% | ' | 9.00% | ' | ' | ' | ' | ' | ' |
Extinguishment of beneficial conversion feature related to the repurchase of convertible debentures | ($12,600,000) | ($24,000,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($12,600,000) | ($24,000,000) |
NOTES_PAYABLE_DIRECT_CORPORATE9
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - SCHEDULED REPAYMENT (DETAILS) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Debt Disclosure [Abstract] | ' |
2014 | $59.40 |
2015 | 79.3 |
2016 | 64 |
2017 | 4.2 |
2018 | 378.1 |
Thereafter | 275 |
Long-term Debt | $860 |
LITIGATION_AND_OTHER_LEGAL_PRO2
LITIGATION AND OTHER LEGAL PROCEEDINGS (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
states | |||
Loss Contingencies [Line Items] | ' | ' | ' |
Number of states participating in examination of compliance with unclaimed property laws | 38 | ' | ' |
Amount of insurance-related assessment liability | $24 | $30.50 | ' |
Premium tax offset for loss contingency accruals | 24.9 | 24 | ' |
Insurance-related assessment, expense recognized | 2.7 | 4.3 | 2.3 |
Operating leases and sponsorship agreements, expense | 44.3 | 47.5 | 43.5 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | ' | ' |
2014 | 43.4 | ' | ' |
2015 | 31.2 | ' | ' |
2016 | 23.8 | ' | ' |
2017 | 19.2 | ' | ' |
2018 | 17.4 | ' | ' |
Thereafter | 11.2 | ' | ' |
Total | 146.2 | ' | ' |
Former chief executive officers | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' |
Deferred compensation arrangement with individual, recorded liability | $25.90 | $26 | ' |
AGENT_DEFERRED_COMPENSATION_PL2
AGENT DEFERRED COMPENSATION PLAN (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Cost recognized for defined contribution plan | $4.60 | $4.50 | $4.50 |
Agent deferred compensation plan | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Pension and other postretirement defined benefit plans, liabilities | 142.7 | 151.7 | ' |
Net periodic benefit cost | -31.4 | 20.5 | 26.3 |
Actuarial net (gains) losses | 17.2 | -7.5 | -16.2 |
Company-owned life insurance | 144.8 | 123 | ' |
Change in value of corporate or bank owned life insurance | 19.7 | 9 | -3.8 |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ' | ' | ' |
Discount rate | 4.75% | 4.00% | ' |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ' | ' | ' |
Discount rate | 4.00% | 4.50% | ' |
Rate of compensation increase | 4.75% | ' | ' |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | ' | ' | ' |
2014 | 6 | ' | ' |
2015 | 6.2 | ' | ' |
2016 | 6.4 | ' | ' |
2017 | 6.7 | ' | ' |
2018 | 7.2 | ' | ' |
2019 - 2023 | 41.9 | ' | ' |
Forecast | Agent deferred compensation plan | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Amounts that will be amortized from accumulated other comprehensive income (loss) in next fiscal year | $1.40 | ' | ' |
SHAREHOLDERS_EQUITY_DETAILS
SHAREHOLDERS' EQUITY (DETAILS) (USD $) | 1 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
Nov. 30, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 30, 2009 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Private placement | Restricted stock | 2006 and prior years | Years 2007 through 2009 | Series B junior participating preferred stock | |||||
Stock options | Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock | ' | ' | ' | ' | 16,400,000 | ' | ' | ' | ' |
Common stock purchase warrant | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price (in dollars per share) | ' | 6.5 | ' | ' | ' | ' | ' | ' | ' |
Available for future grant (in shares) | ' | 9,099,000 | 9,713,000 | 11,044,000 | ' | ' | ' | ' | ' |
Vesting period | ' | ' | ' | ' | ' | '3 years | '4 years | '3 years | ' |
Expiration period | ' | ' | ' | ' | ' | ' | '10 years | '5 years | ' |
Series B junior participating preferred stock par value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 |
Price of junior preferred stock (per 1/1000 of a share) | ' | 25 | ' | ' | ' | ' | ' | ' | ' |
SHAREHOLDERS_EQUITY_CHANGES_IN
SHAREHOLDERS' EQUITY - CHANGES IN COMMON STOCK OUTSTANDING (DETAILS) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 31-May-11 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 31-May-13 | Dec. 31, 2013 | Mar. 28, 2013 | |||
Common share repurchase program | Common stock and additional paid-in capital | Common stock and additional paid-in capital | Common stock and additional paid-in capital | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Retained earnings (accumulated deficit) | Retained earnings (accumulated deficit) | Retained earnings (accumulated deficit) | 2006 and prior years | Years 2007 through 2009 | Years 2010 and thereafter | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Convertible subordinated debt | Other notes payable | Other notes payable | |||||||
Stock options | Stock options | Stock options | Restricted and Performance Stock [Member] | Restricted and Performance Stock [Member] | Restricted and Performance Stock [Member] | Stock options | Stock options | Stock options | Convertible subordinated debt | Convertible subordinated debt | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Balance, beginning of year | 221,502,371 | ' | ' | ' | ' | ' | ' | 221,502,000 | 241,305,000 | 251,084,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Treasury stock purchased and retired | ' | ' | ' | ' | ' | ' | ' | -8,949,000 | -21,533,000 | -11,120,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Conversion of 7.0% debentures (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,700,000 | 4,739,000 | 0 | 0 | ' | ' | ' | |||
Shares issued under employee benefit compensation plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,087,000 | 1,191,000 | 862,000 | 945,000 | [1] | 539,000 | [1] | 479,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance, end of year | 220,323,823 | 221,502,371 | ' | ' | ' | ' | ' | 220,324,000 | 221,502,000 | 241,305,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Number of stock tendered for payment of federal and state taxes owed | 472,000 | 237,000 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Stock repurchase program, authorized amount | ' | ' | ' | $100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Stock repurchase program, increase in authorized amount | 800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Stock retired during period, value | 118.4 | 180.2 | 69.8 | ' | 118.4 | 180.2 | 69.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Principle amount of debt repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.5 | 63.8 | 59.3 | |||
Stock repurchase program, remaining repurchase authorized amount | 397.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Common stock dividends paid | -24.4 | -13.9 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Dividends (in dollars per share) | $0.11 | $0.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Dividends on common stock | ($24.60) | ($13.90) | ' | ' | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($24.60) | ($13.90) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | '3 years | '3 years | ' | ' | ' | ' | ' | ' | ' | |||
Expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | '5 years | '7 years | ' | ' | ' | ' | ' | ' | ' | |||
[1] | In 2013, 2012 and 2011, such amount was reduced by 472 thousand shares, 237 thousand shares and 200 thousand shares, respectively, which were tendered for the payment of required federal and state tax withholdings owed on the vesting of restricted stock. |
SHAREHOLDERS_EQUITY_STOCK_OPTI
SHAREHOLDERS' EQUITY - STOCK OPTION ACTIVITY (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' |
Outstanding at the beginning of the year (in shares) | 6,655 | 7,712 | 9,754 |
Options granted (in shares) | 1,447 | 1,389 | 1,262 |
Exercised (in shares) | -2,087 | -1,191 | -862 |
Forfeited or terminated (in shares) | -436 | -1,255 | -2,442 |
Outstanding at the end of the year (in shares) | 5,579 | 6,655 | 7,712 |
Options exercisable at the end of the year (in shares) | 2,529 | 3,715 | 4,135 |
Available for future grant (in shares) | 9,099 | 9,713 | 11,044 |
Options outstanding, weighted average remaining life | '4 years | '3 years 4 months 24 days | '3 years 1 month 24 days |
Options exercisable at the end of the year, weighted average remaining life | '2 years 1 month 24 days | '1 year 8 months 24 days | '1 year 9 months 24 days |
Options exercised, aggregate intrinsic value | $6 | $2.70 | $1.30 |
Options outstanding, aggregate intrinsic value | 32.5 | 30.2 | 31.3 |
Options exercisable at the end of the year, aggregate intrinsic value | 13.9 | 15.5 | 18 |
Proceeds from stock options exercised | 15.2 | 3.1 | 2.2 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' | ' | ' |
Outstanding at the beginning of the year | $9.72 | $10.13 | $10.87 |
Options granted | $11.01 | $7.55 | $7.38 |
Exercised | $7.27 | $3.14 | $2.52 |
Forfeited or terminated | $13.95 | $16.13 | $14.35 |
Outstanding at the end of the year | $10.64 | $9.72 | $10.13 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 5,579 | ' | ' |
Options exercisable (in shares) | 2,529 | ' | ' |
$1.13 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 76 | ' | ' |
Options outstanding, remaining life | '3 months 24 days | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $1.13 | ' | ' |
Options exercisable (in shares) | 76 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $1.13 | ' | ' |
$3.05 - $3.11 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 272 | ' | ' |
Options outstanding, remaining life | '4 months 24 days | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $3.05 | ' | ' |
Options exercisable (in shares) | 272 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $3.05 | ' | ' |
$5.78 - $6.77 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 726 | ' | ' |
Options outstanding, remaining life | '3 years 2 months 24 days | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $6.45 | ' | ' |
Options exercisable (in shares) | 723 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $6.45 | ' | ' |
$7.38 - $7.74 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 1,964 | ' | ' |
Options outstanding, remaining life | '4 years 9 months 24 days | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $7.46 | ' | ' |
Options exercisable (in shares) | 382 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $7.39 | ' | ' |
$8.29 - $12.34 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 1,415 | ' | ' |
Options outstanding, remaining life | '6 years 1 month 24 days | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $10.77 | ' | ' |
Options exercisable (in shares) | 0 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $0 | ' | ' |
$12.74 - $18.97 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 91 | ' | ' |
Options outstanding, remaining life | '4 years | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $16.23 | ' | ' |
Options exercisable (in shares) | 41 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $18.90 | ' | ' |
$20.00 - $25.45 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | ' | ' | ' |
Options outstanding (in shares) | 1,035 | ' | ' |
Options outstanding, remaining life | '1 year 2 months 24 days | ' | ' |
Options outstanding, average exercise price (in dollars per share) | $21.62 | ' | ' |
Options exercisable (in shares) | 1,035 | ' | ' |
Options exercisable, average exercise price (in dollars per share) | $21.62 | ' | ' |
Stock options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' |
Compensation expense related to stock options reduced both basic and diluted earnings per share (in dollars per share) | $0.02 | $0.02 | $0 |
Share-based Arrangements with Employees and Nonemployees [Abstract] | ' | ' | ' |
Allocated share-based compensation expense | -7.2 | -6.7 | -0.2 |
Allocated Share-based Compensation Expense, Net of Tax | 4.7 | 4.4 | 0.1 |
Unrecognized compensation expense | 9.3 | ' | ' |
Weighted average recognition period | '1 year 10 months 24 days | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' |
Weighted average risk-free interest rates | 0.80% | 0.90% | 2.20% |
Weighted average dividend yields | 0.70% | 0.00% | 0.00% |
Volatility factors | 107.00% | 108.00% | 107.00% |
Weighted average expected life (in years) | '4 years 9 months 24 days | '4 years 8 months 24 days | '4 years 9 months 24 days |
Weighted average fair value per share (in dollars per share) | $8.02 | $5.76 | $5.68 |
Restricted and Performance Stock [Member] | ' | ' | ' |
Share-based Arrangements with Employees and Nonemployees [Abstract] | ' | ' | ' |
Allocated share-based compensation expense | ' | ' | $7.40 |
SHAREHOLDERS_EQUITY_RESTRICTED
SHAREHOLDERS' EQUITY - RESTRICTED STOCK ACTIVITY (DETAILS) (Restricted stock, USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Grant date fair value of performance shares awarded | $2.10 | $5 | $6 |
Unrecognized compensation expense | 2.5 | 5.4 | ' |
Weighted average recognition period | '1 year 7 months 24 days | ' | ' |
Allocated share-based compensation expense | 4.5 | 4.5 | 4.3 |
Fair value of vested shares | $5.60 | $4.40 | $3.20 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' | ' |
Non-vested shares, beginning of year (in shares) | 1,162,000 | ' | ' |
Granted (in shares) | 178,000 | 700,000 | 900,000 |
Vested (in shares) | -749,000 | ' | ' |
Forfeited (in shares) | -70,000 | ' | ' |
Non-vested shares, end of year (in shares) | 521,000 | 1,162,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' | ' |
Non-vested shares, beginning of year (in dollars per share) | $7.08 | ' | ' |
Granted (in dollars per share) | $12 | $7.35 | $6.97 |
Vested (in dollars per share) | $7.42 | ' | ' |
Forfeited (in dollars per share) | $6.94 | ' | ' |
Non-vested shares, end of year (in dollars per share) | $8.29 | $7.08 | ' |
SHAREHOLDERS_EQUITY_PERFORMANC
SHAREHOLDERS' EQUITY - PERFORMANCE SHARE ACTIVITY (DETAILS) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Performance Shares [Member] | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | |
Granted (in units) | 424,400 | 406,500 | 416,700 | |
Grant date fair value of performance shares awarded | $4.40 | $3.10 | ' | |
Allocated share-based compensation expense | $3.40 | $3.80 | $2 | |
Shareholder return awards | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ' | ' | ' | |
Awards outstanding, beginning of period (in units) | 193,000 | 0 | 0 | |
Granted (in units) | 212,000 | 203,000 | 0 | |
Vested (in units) | 0 | ' | ' | |
Additional shares issued pursuant to achieving certain performance criteria | 0 | [1] | ' | ' |
Forfeited (in units) | -23,000 | -10,000 | 0 | |
Awards outstanding, end of period (in units) | 382,000 | 193,000 | 0 | |
Operating return on equity awards | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ' | ' | ' | |
Awards outstanding, beginning of period (in units) | 0 | 0 | 555,000 | |
Granted (in units) | 212,000 | 0 | 0 | |
Vested (in units) | 0 | ' | ' | |
Additional shares issued pursuant to achieving certain performance criteria | 0 | [1] | ' | ' |
Forfeited (in units) | -8,000 | 0 | -555,000 | |
Awards outstanding, end of period (in units) | 204,000 | 0 | 0 | |
Pre-tax operating income awards | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ' | ' | ' | |
Awards outstanding, beginning of period (in units) | 977,000 | 836,000 | 652,000 | |
Granted (in units) | 0 | 203,000 | 417,000 | |
Vested (in units) | -668,000 | ' | ' | |
Additional shares issued pursuant to achieving certain performance criteria | 223,000 | [1] | ' | ' |
Forfeited (in units) | -62,000 | -62,000 | -233,000 | |
Awards outstanding, end of period (in units) | 470,000 | 977,000 | 836,000 | |
[1] | The performance units provide for a payout of up to 150 percent of the award if certain performance levels are achieved. |
SHAREHOLDERS_EQUITY_BASIC_AND_
SHAREHOLDERS' EQUITY - BASIC AND DILUTED EARNINGS PER SHARE (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Rate | Rate | ||||||||||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income for basic earnings per share | $106,000,000 | $283,000,000 | $77,100,000 | $11,900,000 | $101,200,000 | ($5,000,000) | $65,700,000 | $59,100,000 | $478,000,000 | $221,000,000 | $335,700,000 |
Add: interest expense on 7.0% Debentures, net of income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | 12,200,000 | 14,700,000 |
Net income for diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | 479,600,000 | 233,200,000 | 350,400,000 |
Shares: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average shares outstanding for basic earnings per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 221,628 | 233,685 | 247,952 |
Effect of dilutive securities on weighted average shares: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
7% Debentures (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 5,780 | 44,037 | 53,367 |
Stock option, restricted stock and performance units (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 2,776 | 2,762 | 2,513 |
Warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 2,518 | 943 | 249 |
Dilutive potential common shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 11,074 | 47,742 | 56,129 |
Weighted average shares outstanding for diluted earnings per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 232,702 | 281,427 | 304,081 |
Conversion rate per $1000 principal amount of 7.0% convertible debentures, shares | 182 | ' | ' | ' | ' | ' | ' | ' | 182 | ' | ' |
Par value of each 7.0% convertible debenture | $1,000 | ' | ' | ' | ' | ' | ' | ' | $1,000 | ' | ' |
Conversion price (in dollars per share) | $5.49 | ' | ' | ' | ' | ' | ' | ' | $5.49 | ' | ' |
OTHER_OPERATING_STATEMENT_DATA2
OTHER OPERATING STATEMENT DATA - INSURANCE POLICY INCOME (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
states | |||
Premiums Written and Earned [Abstract] | ' | ' | ' |
Direct premiums collected | $3,966 | $3,883.10 | $4,214.70 |
Reinsurance assumed | 38 | 70.4 | 87.7 |
Reinsurance ceded | -240.5 | -237.1 | -243.2 |
Premiums collected, net of reinsurance | 3,763.50 | 3,716.40 | 4,059.20 |
Change in unearned premiums | -16.6 | 20.8 | 17.2 |
Less premiums on interest-sensitive life and products without mortality and morbidity risk which are recorded as additions to insurance liabilities | -1,298.10 | -1,296.70 | -1,693.50 |
Premiums on traditional products with mortality or morbidity risk | 2,448.80 | 2,440.50 | 2,382.90 |
Fees and surrender charges on interest-sensitive products | 295.9 | 314.9 | 307.6 |
Insurance policy income | $2,744.70 | $2,755.40 | $2,690.50 |
Number of states with largest share of collected premiums | 4 | ' | ' |
Percentage of total collected premiums | 5.00% | ' | ' |
Number of additional states greater than specified percentage of total collected premiums | 0 | ' | ' |
FLORIDA | ' | ' | ' |
Premiums Written and Earned [Abstract] | ' | ' | ' |
Percentage of total collected premiums | 7.90% | ' | ' |
CALIFORNIA | ' | ' | ' |
Premiums Written and Earned [Abstract] | ' | ' | ' |
Percentage of total collected premiums | 6.10% | ' | ' |
TEXAS | ' | ' | ' |
Premiums Written and Earned [Abstract] | ' | ' | ' |
Percentage of total collected premiums | 6.20% | ' | ' |
PENNSYLVANIA | ' | ' | ' |
Premiums Written and Earned [Abstract] | ' | ' | ' |
Percentage of total collected premiums | 6.30% | ' | ' |
OTHER_OPERATING_STATEMENT_DATA3
OTHER OPERATING STATEMENT DATA - OTHER OPERATING COSTS AND EXPENSES (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Expenses [Abstract] | ' | ' | ' |
Commission expense | $103.80 | $115.80 | $131.70 |
Salaries and wages | 234 | 226.6 | 212.2 |
Other | 428.4 | 476.9 | 360.6 |
Total other operating costs and expenses | $766.20 | $819.30 | $704.50 |
OTHER_OPERATING_STATEMENT_DATA4
OTHER OPERATING STATEMENT DATA - PRESENT VALUE OF FUTURE PROFITS (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Movement in Present Value of Future Insurance Profits [Roll Forward] | ' | ' | ' |
Balance, beginning of year | $626 | $697.70 | $1,008.60 |
Amortization | -92 | -93.5 | -113.7 |
Amounts related to fair value adjustment of fixed maturities, available for sale | 145.3 | 21.8 | -197.2 |
Balance, end of year | $679.30 | $626 | $697.70 |
Percentage of Amount Amortized During Next Five Years [Abstract] | ' | ' | ' |
2014 | 10.00% | ' | ' |
2015 | 9.00% | ' | ' |
2016 | 8.00% | ' | ' |
2017 | 7.00% | ' | ' |
2018 | 7.00% | ' | ' |
Average interest accrual rate associated with amortization method of present value of future insurance profits | 5.00% | ' | ' |
OTHER_OPERATING_STATEMENT_DATA5
OTHER OPERATING STATEMENT DATA - DEFERRED ACQUISITION COSTS (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ' | ' | ' |
Balance, beginning of year | $629.70 | $797.10 | $999.60 |
Additions | 222.8 | 191.7 | 216.7 |
Amortization | -204.3 | -195.5 | -183.7 |
Amounts related to fair value adjustment of fixed maturities, available for sale | 315.9 | -163.6 | -235.5 |
Other | 4 | 0 | 0 |
Balance, end of year | $968.10 | $629.70 | $797.10 |
CONSOLIDATED_STATEMENT_CASH_FL2
CONSOLIDATED STATEMENT CASH FLOWS (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $478 | $221 | $335.70 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Amortization and depreciation | 324.6 | 315 | 323.6 |
Income taxes | -181.2 | -71.8 | -32.9 |
Insurance liabilities | 465.8 | 330 | 346.4 |
Accrual and amortization of investment income | -276.3 | -100.7 | 64.5 |
Deferral of policy acquisition costs | -222.8 | -191.7 | -216.7 |
Net realized investment gains | -33.6 | -81.1 | -61.8 |
Loss on reinsurance transaction | 98.4 | 0 | 0 |
Loss on extinguishment of debt | 65.4 | 200.2 | 3.4 |
Other | 2.1 | 14 | 12.6 |
Net cash provided by operating activities | 720.4 | 634.9 | 774.8 |
Other Noncash Investing and Financing Items [Abstract] | ' | ' | ' |
Stock options, restricted stock and performance units | $15.10 | $13.70 | $5.20 |
STATUTORY_INFORMATION_BASED_ON2
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Statutory capital and surplus | $1,711.90 | $1,560.40 | ' |
Asset valuation reserve | 233.9 | 222.2 | ' |
Interest maintenance reserve | 582.4 | 585.8 | ' |
Total | 2,528.20 | 2,368.40 | ' |
Statutory capital and surplus included investments in upstream affiliates | 52.4 | ' | ' |
Statutory accounting practices, statutory net income, amount | 386.5 | 350.4 | 366.8 |
Statutory accounting practices, net realized capital gains, net of income taxes | 19 | 13 | 3.7 |
Statutory accounting practices, pre-tax amounts for fees and interest paid | 159.7 | 155.3 | 147.7 |
Percentage of statutory capital and surplus, available for dividend distribution without prior approval from regulatory agency | 10.00% | ' | ' |
Amount of extraordinary dividends paid by insurance subsidiaries | 236.8 | ' | ' |
Capital contributions to insurance subsidiaries from parent | $0 | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 95.00% | ' | ' |
Minimum | Company plan for improving capital position | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 75.00% | ' | ' |
Minimum | Regulatory authority special examination | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 50.00% | ' | ' |
Minimum | Regulatory authority, any action deemed necessary | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 35.00% | ' | ' |
Minimum | Trend Test [Member] | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 100.00% | ' | 100.00% |
Maximum | Company plan for improving capital position | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 100.00% | ' | ' |
Maximum | Regulatory authority special examination | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 75.00% | ' | ' |
Maximum | Regulatory authority, any action deemed necessary | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 50.00% | ' | ' |
Maximum | Regulatory authority control | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 35.00% | ' | ' |
Maximum | Trend Test [Member] | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | 125.00% | ' | 125.00% |
Actual | Minimum | Trend Test [Member] | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | ' | ' | 100.00% |
Actual | Maximum | Trend Test [Member] | ' | ' | ' |
Statutory Accounting Practices [Line Items] | ' | ' | ' |
Adjusted Capital to Risk-based Capital Ratio | ' | ' | 150.00% |
BUSINESS_SEGMENTS_DETAILS
BUSINESS SEGMENTS (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | $1,664 | $1,486.40 | $1,354.10 | ' | |||
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 34 | 19.8 | 18.2 | ' | |||
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 4,410.50 | 4,261.60 | 4,062.80 | ' | |||
Benefits and expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Insurance policy benefits | ' | ' | ' | ' | ' | ' | ' | ' | 2,839.70 | 2,763.90 | 2,699 | ' | |||
Other operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 766.2 | 819.3 | 704.5 | ' | |||
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 3,998.90 | 3,977.50 | 3,789.20 | ' | |||
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 411.6 | 284.1 | 273.6 | ' | |||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total segment revenues | ' | ' | ' | ' | ' | ' | ' | ' | 4,410.50 | 4,261.60 | 4,062.80 | ' | |||
Net realized investment gains (losses) | ' | ' | ' | ' | ' | ' | ' | ' | 33.4 | 81.1 | 61.8 | ' | |||
Revenues related to certain non-strategic investments and earnings attributable to non-controlling interests | ' | ' | ' | ' | ' | ' | ' | ' | 32.2 | 0 | 0 | ' | |||
Consolidated revenues | 1,158.20 | 1,093.80 | 1,081.50 | 1,142.60 | 1,060.80 | 1,093 | 1,065 | 1,123.90 | 4,476.10 | 4,342.70 | 4,124.60 | ' | |||
Loss related to reinsurance transaction (see note 2 - Reinsurance) | ' | ' | ' | ' | ' | ' | ' | ' | 98.4 | 0 | 0 | ' | |||
Insurance policy benefits - fair value changes in embedded derivative liabilities | ' | ' | ' | ' | ' | ' | ' | ' | -54.4 | [1] | 4.4 | [1] | 34.4 | [1] | ' |
Amortization related to fair value changes in embedded derivative liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 19 | [1] | -1.6 | [1] | -14 | [1] | ' |
Amortization related to net realized investment gains (losses) | ' | ' | ' | ' | ' | ' | ' | ' | 1.6 | 6.5 | 5.4 | ' | |||
Expenses related to certain non-strategic investments and earnings attributable to non-controlling interests | ' | ' | ' | ' | ' | ' | ' | ' | 42.4 | 0 | 0 | ' | |||
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | 65.4 | 200.2 | 3.4 | ' | |||
Consolidated expenses | ' | ' | ' | ' | ' | ' | ' | ' | 4,171.30 | 4,187 | 3,818.40 | ' | |||
Segment Balance Sheet Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assets | 34,780.60 | ' | ' | ' | 34,131.40 | ' | ' | ' | 34,780.60 | 34,131.40 | ' | ' | |||
Liabilities | 29,825.40 | ' | ' | ' | 29,082.10 | ' | ' | ' | 29,825.40 | 29,082.10 | ' | ' | |||
Selected Financial Information by Segment [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Present value of future profits | 679.3 | ' | ' | ' | 626 | ' | ' | ' | 679.3 | 626 | 697.7 | 1,008.60 | |||
Deferred acquisition costs | 968.1 | ' | ' | ' | 629.7 | ' | ' | ' | 968.1 | 629.7 | ' | ' | |||
Insurance liabilities | 24,875.80 | ' | ' | ' | 25,089.50 | ' | ' | ' | 24,875.80 | 25,089.50 | ' | ' | |||
Bankers Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Annuities | ' | ' | ' | ' | ' | ' | ' | ' | 28.9 | 28.4 | 33.4 | ' | |||
Health | ' | ' | ' | ' | ' | ' | ' | ' | 1,311.20 | 1,342.70 | 1,347.30 | ' | |||
Life | ' | ' | ' | ' | ' | ' | ' | ' | 308.6 | 286.3 | 231.7 | ' | |||
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 1,005.70 | [2] | 838.9 | [2] | 766.3 | [2] | ' |
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 19 | [2] | 15.2 | [2] | 13.8 | [2] | ' |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,673.40 | 2,511.50 | 2,392.50 | ' | |||
Benefits and expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Insurance policy benefits | ' | ' | ' | ' | ' | ' | ' | ' | 1,788.70 | 1,642.90 | 1,570.10 | ' | |||
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 187.5 | 187.6 | 206.3 | ' | |||
Interest expense on investment borrowings | ' | ' | ' | ' | ' | ' | ' | ' | 6.7 | 5.3 | 4.8 | ' | |||
Other operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 380 | 374.8 | 320.4 | ' | |||
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 2,362.90 | 2,210.60 | 2,101.60 | ' | |||
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 310.5 | 300.9 | 290.9 | ' | |||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total segment revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,673.40 | 2,511.50 | 2,392.50 | ' | |||
Segment Balance Sheet Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assets | 18,230.20 | ' | ' | ' | 17,637.70 | ' | ' | ' | 18,230.20 | 17,637.70 | ' | ' | |||
Liabilities | 15,866.40 | ' | ' | ' | 15,590.10 | ' | ' | ' | 15,866.40 | 15,590.10 | ' | ' | |||
Selected Financial Information by Segment [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Present value of future profits | 263.2 | ' | ' | ' | 168.8 | ' | ' | ' | 263.2 | 168.8 | ' | ' | |||
Deferred acquisition costs | 627.8 | ' | ' | ' | 332.8 | ' | ' | ' | 627.8 | 332.8 | ' | ' | |||
Insurance liabilities | 14,575 | ' | ' | ' | 14,548 | ' | ' | ' | 14,575 | 14,548 | ' | ' | |||
Washington National | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Health | ' | ' | ' | ' | ' | ' | ' | ' | 586.5 | 575.2 | 569.5 | ' | |||
Life | ' | ' | ' | ' | ' | ' | ' | ' | 14.2 | 15.2 | 15.6 | ' | |||
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 206.5 | [2] | 204.1 | [2] | 189.5 | [2] | ' |
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 0.9 | [2] | 1.1 | [2] | 1 | [2] | ' |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 808.1 | 795.6 | 775.6 | ' | |||
Benefits and expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Insurance policy benefits | ' | ' | ' | ' | ' | ' | ' | ' | 470.5 | 447.1 | 464.5 | ' | |||
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 53.8 | 47.7 | 44.9 | ' | |||
Interest expense on investment borrowings | ' | ' | ' | ' | ' | ' | ' | ' | 1.9 | 2.8 | 0.7 | ' | |||
Other operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 161.1 | 170.9 | 169.4 | ' | |||
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 687.3 | 668.5 | 679.5 | ' | |||
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 120.8 | 127.1 | 96.1 | ' | |||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total segment revenues | ' | ' | ' | ' | ' | ' | ' | ' | 808.1 | 795.6 | 775.6 | ' | |||
Segment Balance Sheet Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assets | 4,655.30 | ' | ' | ' | 4,499.50 | ' | ' | ' | 4,655.30 | 4,499.50 | ' | ' | |||
Liabilities | 3,665.20 | ' | ' | ' | 3,425.60 | ' | ' | ' | 3,665.20 | 3,425.60 | ' | ' | |||
Selected Financial Information by Segment [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Present value of future profits | 343.2 | ' | ' | ' | 375.8 | ' | ' | ' | 343.2 | 375.8 | ' | ' | |||
Deferred acquisition costs | 182.6 | ' | ' | ' | 157.3 | ' | ' | ' | 182.6 | 157.3 | ' | ' | |||
Insurance liabilities | 2,919 | ' | ' | ' | 2,911.70 | ' | ' | ' | 2,919 | 2,911.70 | ' | ' | |||
Colonial Penn | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Health | ' | ' | ' | ' | ' | ' | ' | ' | 4.3 | 5.2 | 5.9 | ' | |||
Life | ' | ' | ' | ' | ' | ' | ' | ' | 227.8 | 212.6 | 197.1 | ' | |||
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 40 | [2] | 40.4 | [2] | 41.1 | [2] | ' |
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 0.8 | [2] | 0.7 | [2] | 0.9 | [2] | ' |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 272.9 | 258.9 | 245 | ' | |||
Benefits and expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Insurance policy benefits | ' | ' | ' | ' | ' | ' | ' | ' | 165.7 | 161.1 | 150.1 | ' | |||
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 14.5 | 15 | 15 | ' | |||
Other operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 105.2 | 91.4 | 84.6 | ' | |||
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 285.4 | 267.5 | 249.7 | ' | |||
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -12.5 | -8.6 | -4.7 | ' | |||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total segment revenues | ' | ' | ' | ' | ' | ' | ' | ' | 272.9 | 258.9 | 245 | ' | |||
Segment Balance Sheet Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assets | 891.1 | ' | ' | ' | 917.8 | ' | ' | ' | 891.1 | 917.8 | ' | ' | |||
Liabilities | 766.6 | ' | ' | ' | 749.6 | ' | ' | ' | 766.6 | 749.6 | ' | ' | |||
Selected Financial Information by Segment [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Present value of future profits | 55.7 | ' | ' | ' | 63.6 | ' | ' | ' | 55.7 | 63.6 | ' | ' | |||
Deferred acquisition costs | 67.4 | ' | ' | ' | 57.5 | ' | ' | ' | 67.4 | 57.5 | ' | ' | |||
Insurance liabilities | 766.2 | ' | ' | ' | 763.1 | ' | ' | ' | 766.2 | 763.1 | ' | ' | |||
Other CNO Business | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Annuities | ' | ' | ' | ' | ' | ' | ' | ' | 12.1 | 10.6 | 12.2 | ' | |||
Health | ' | ' | ' | ' | ' | ' | ' | ' | 24.7 | 26.3 | 29.4 | ' | |||
Life | ' | ' | ' | ' | ' | ' | ' | ' | 226.4 | 252.9 | 248.4 | ' | |||
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 341.8 | [2] | 340.6 | [2] | 344.1 | [2] | ' |
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 5.1 | [2] | 0 | [2] | 0 | [2] | ' |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 610.1 | 630.4 | 634.1 | ' | |||
Benefits and expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Insurance policy benefits | ' | ' | ' | ' | ' | ' | ' | ' | 469.2 | 508.4 | 479.9 | ' | |||
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 19.9 | 33.8 | 39.8 | ' | |||
Interest expense on investment borrowings | ' | ' | ' | ' | ' | ' | ' | ' | 19.3 | 19.9 | 20.3 | ' | |||
Other operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 76.2 | 117.1 | 78.8 | ' | |||
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 584.6 | 679.2 | 618.8 | ' | |||
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 25.5 | -48.8 | 15.3 | ' | |||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total segment revenues | ' | ' | ' | ' | ' | ' | ' | ' | 610.1 | 630.4 | 634.1 | ' | |||
Segment Balance Sheet Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assets | 8,483.70 | ' | ' | ' | 8,679.50 | ' | ' | ' | 8,483.70 | 8,679.50 | ' | ' | |||
Liabilities | 7,531.20 | ' | ' | ' | 7,451.10 | ' | ' | ' | 7,531.20 | 7,451.10 | ' | ' | |||
Selected Financial Information by Segment [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Present value of future profits | 17.2 | ' | ' | ' | 17.8 | ' | ' | ' | 17.2 | 17.8 | ' | ' | |||
Deferred acquisition costs | 90.3 | ' | ' | ' | 82.1 | ' | ' | ' | 90.3 | 82.1 | ' | ' | |||
Insurance liabilities | 6,615.60 | ' | ' | ' | 6,866.70 | ' | ' | ' | 6,615.60 | 6,866.70 | ' | ' | |||
Corporate operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 39.8 | 62.4 | 13.1 | ' | |||
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 6.2 | 2.8 | 2.5 | ' | |||
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 46 | 65.2 | 15.6 | ' | |||
Benefits and expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Interest expense on investment borrowings | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0.4 | 0.2 | ' | |||
Interest expense on corporate debt | ' | ' | ' | ' | ' | ' | ' | ' | 51.3 | 66.2 | 76.3 | ' | |||
Interest expense on borrowings of variable interest entities | ' | ' | ' | ' | ' | ' | ' | ' | 0.1 | 20 | 11.8 | ' | |||
Other operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 27.3 | 65.1 | 51.3 | ' | |||
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 78.7 | 151.7 | 139.6 | ' | |||
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -32.7 | -86.5 | -124 | ' | |||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total segment revenues | ' | ' | ' | ' | ' | ' | ' | ' | 46 | 65.2 | 15.6 | ' | |||
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | 65.4 | 200.2 | 3.4 | ' | |||
Segment Balance Sheet Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assets | 2,520.30 | ' | ' | ' | 2,396.90 | ' | ' | ' | 2,520.30 | 2,396.90 | ' | ' | |||
Liabilities | 1,996 | ' | ' | ' | 1,865.70 | ' | ' | ' | 1,996 | 1,865.70 | ' | ' | |||
Embedded derivative financial instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Increase (decrease) in earnings due to sale of trading portfolio | ' | ' | ' | ' | ' | ' | ' | ' | $35.40 | ($2.80) | ($20.40) | ' | |||
[1] | Prior to June 30, 2011, we maintained a specific block of investments in our trading securities account (which we carried at estimated fair value with changes in such value recognized as investment income from policyholder and reinsurer accounts and other special-purpose portfolios) to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During the second quarter of 2011, we sold this trading portfolio, which resulted in $35.4 million, $(2.8) million and $(20.4) million of increased (decreased) earnings in 2013, 2012 and 2011, respectively, since the volatility caused by the accounting requirements to record embedded options at fair value was no longer being offset. | ||||||||||||||
[2] | It is not practicable to provide additional components of revenue by product or services. |
QUARTERLY_FINANCIAL_DATA_DETAI
QUARTERLY FINANCIAL DATA (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Data [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $1,158.20 | $1,093.80 | $1,081.50 | $1,142.60 | $1,060.80 | $1,093 | $1,065 | $1,123.90 | $4,476.10 | $4,342.70 | $4,124.60 |
Income before income taxes | 41.1 | 114.4 | 114.7 | 34.6 | 117.7 | -158.8 | 104.5 | 92.3 | 304.8 | 155.7 | 306.2 |
Income tax expense (benefit) | -64.9 | -168.6 | -37.6 | -22.7 | 16.5 | -153.8 | 38.8 | 33.2 | 173.2 | 65.3 | 29.5 |
Net income | $106 | $283 | $77.10 | $11.90 | $101.20 | ($5) | $65.70 | $59.10 | $478 | $221 | $335.70 |
Basic: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (in dollars per share) | $0.48 | $1.27 | $0.35 | $0.05 | $0.45 | ($0.02) | $0.28 | $0.25 | $2.16 | $0.95 | $1.35 |
Diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (in dollars per share) | $0.47 | $1.23 | $0.34 | $0.05 | $0.41 | ($0.02) | $0.24 | $0.21 | $2.06 | $0.83 | $1.15 |
INVESTMENTS_IN_VARIABLE_INTERE2
INVESTMENTS IN VARIABLE INTEREST ENTITIES (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
VIEs | ||||
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Investments held by variable interest entities | ' | $1,046.70 | $814.30 | ' |
Cash and cash equivalents held by variable interest entities | ' | 104.3 | 54.2 | ' |
Borrowings related to variable interest entities | ' | 1,012.30 | 767 | ' |
Number of Variable Interest Entities Liquidated | 1 | ' | ' | ' |
Variable interest entity amortized cost securities held | ' | 1,045.10 | ' | ' |
Variable interest entity, gross unrealized gains fixed maturity securities | ' | 4.7 | ' | ' |
Variable interest entity gross unrealized losses fixed maturity securities | ' | -3.1 | ' | ' |
Variable interest entities net realized gain (loss) on investments | ' | -1.6 | -0.4 | -1.3 |
Variable interest entities net gains losses from sale of fixed maturity investments | ' | -0.5 | 0.4 | 3 |
Total other-than-temporary impairment losses on investments held by variable interest entities | ' | -1.1 | -0.8 | -4.3 |
Variable interest entities, investments sold | ' | 11.1 | 34.9 | 27.5 |
Variable interest entity, gross investment losses from sale | ' | 0.9 | 0.3 | 2.7 |
Investments held in limited partnerships | ' | 19.7 | ' | ' |
Unfunded commitments to limited partnerships | ' | 43.7 | ' | ' |
Variable Interest Entity, Primary Beneficiary [Member] | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Investments held by variable interest entities | ' | 1,046.70 | 814.3 | ' |
Notes receivable of VIEs held by insurance subsidiaries | ' | -108.5 | -78.5 | ' |
Cash and cash equivalents held by variable interest entities | ' | 104.3 | 54.2 | ' |
Accrued investment income | ' | 1.9 | 1.8 | ' |
Income tax assets, net | ' | 2.9 | 0.7 | ' |
Other assets | ' | 21.7 | 9.6 | ' |
Total assets | ' | 1,069 | 802.1 | ' |
Other liabilities | ' | 62 | 36.6 | ' |
Borrowings related to variable interest entities | ' | 1,012.30 | 767 | ' |
Notes payable of VIEs held by insurance subsidiaries | ' | 0 | 0 | ' |
Total liabilities | ' | 1,074.30 | 803.6 | ' |
VIEs | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Investments held by variable interest entities | ' | 1,046.70 | 814.3 | ' |
Notes receivable of VIEs held by insurance subsidiaries | ' | 0 | 0 | ' |
Cash and cash equivalents held by variable interest entities | ' | 104.3 | 54.2 | ' |
Accrued investment income | ' | 1.9 | 1.8 | ' |
Income tax assets, net | ' | 5.4 | 3.3 | ' |
Other assets | ' | 22.6 | 9.6 | ' |
Total assets | ' | 1,180.90 | 883.2 | ' |
Other liabilities | ' | 66 | 39.9 | ' |
Borrowings related to variable interest entities | ' | 1,012.30 | 767 | ' |
Notes payable of VIEs held by insurance subsidiaries | ' | 112.5 | 82.5 | ' |
Total liabilities | ' | 1,190.80 | 889.4 | ' |
Eliminations | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Investments held by variable interest entities | ' | 0 | 0 | ' |
Notes receivable of VIEs held by insurance subsidiaries | ' | -108.5 | -78.5 | ' |
Cash and cash equivalents held by variable interest entities | ' | 0 | 0 | ' |
Accrued investment income | ' | 0 | 0 | ' |
Income tax assets, net | ' | -2.5 | -2.6 | ' |
Other assets | ' | -0.9 | 0 | ' |
Total assets | ' | -111.9 | -81.1 | ' |
Other liabilities | ' | -4 | -3.3 | ' |
Borrowings related to variable interest entities | ' | 0 | 0 | ' |
Notes payable of VIEs held by insurance subsidiaries | ' | -112.5 | -82.5 | ' |
Total liabilities | ' | -116.5 | -85.8 | ' |
Less than twelve months | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Fair value investments held by variable interest entity that had been in an unrealized loss position | ' | 355.5 | 114.1 | ' |
Gross unrealized losses on investments held by variable interest entity | ' | 3.1 | 0.7 | ' |
Greater than twelve months | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Fair value investments held by variable interest entity that had been in an unrealized loss position | ' | 7.9 | 59.1 | ' |
Gross unrealized losses on investments held by variable interest entity | ' | $0 | $0.90 | ' |
INVESTMENTS_IN_VARIABLE_INTERE3
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (DETAILS) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Investment Holdings [Line Items] | ' |
Total amortized cost | $1,045.10 |
Total fair value | 1,046.70 |
Amortized cost | ' |
Investment Holdings [Line Items] | ' |
Due in one year or less | 6.5 |
Due after one year through five years | 355.8 |
Due after five years through ten years | 682.8 |
Total amortized cost | 1,045.10 |
Due in one year or less | 2.8 |
Due after one year through five years | 103.1 |
Due after five years through ten years | 260.6 |
Total amortized cost | 366.5 |
Estimated fair value | ' |
Investment Holdings [Line Items] | ' |
Due in one year or less | 6.5 |
Due after one year through five years | 357.3 |
Due after five years through ten years | 682.9 |
Total fair value | 1,046.70 |
Due in one year or less | 2.8 |
Due after one year through five years | 102.7 |
Due after five years through ten years | 257.9 |
Total fair value | $363.40 |
INVESTMENTS_IN_VARIABLE_INTERE4
INVESTMENTS IN VARIABLE INTEREST ENTITIES - REVENUES AND EXPENSES (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income - policyholder and reinsurer accounts and other special-purpose portfolios | ' | ' | ' | ' | ' | ' | ' | ' | $258.20 | $87.90 | ($6.60) |
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 34 | 19.8 | 18.2 |
Total revenues | 1,158.20 | 1,093.80 | 1,081.50 | 1,142.60 | 1,060.80 | 1,093 | 1,065 | 1,123.90 | 4,476.10 | 4,342.70 | 4,124.60 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 105.3 | 114.6 | 114.1 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 766.2 | 819.3 | 704.5 |
Total benefits and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 4,171.30 | 4,187 | 3,818.40 |
Income before income taxes | 41.1 | 114.4 | 114.7 | 34.6 | 117.7 | -158.8 | 104.5 | 92.3 | 304.8 | 155.7 | 306.2 |
Variable Interest Entity, Primary Beneficiary [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income - policyholder and reinsurer accounts and other special-purpose portfolios | ' | ' | ' | ' | ' | ' | ' | ' | 42.3 | 31.3 | 18.8 |
Fee revenue and other income | ' | ' | ' | ' | ' | ' | ' | ' | 1.8 | 1.6 | 1.2 |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 44.1 | 32.9 | 20 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 26 | 20 | 11.8 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 1.4 | 0.6 | 0.7 |
Total benefits and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 27.4 | 20.6 | 12.5 |
Income before net realized investment losses and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 16.7 | 12.3 | 7.5 |
Net realized investment losses | ' | ' | ' | ' | ' | ' | ' | ' | -1.6 | -0.4 | -1.3 |
Income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | $15.10 | $11.90 | $6.20 |
SCHEDULE_II_BALANCE_SHEET_DETA
SCHEDULE II - BALANCE SHEET (DETAILS) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' |
Fixed maturities, available for sale, amortized cost | $21,860,600,000 | $21,626,800,000 | ' | ' |
Equity securities at cost | 237,900,000 | 167,100,000 | ' | ' |
ASSETS | ' | ' | ' | ' |
Fixed maturities, available for sale, at fair value (amortized cost: 2013 - $51.8; 2012 - $66.3) | 23,178,300,000 | 24,614,100,000 | ' | ' |
Cash and cash equivalents - unrestricted | 699,000,000 | 582,500,000 | 436,000,000 | 571,900,000 |
Equity securities at fair value (cost: 2013 - $65.3; 2012 - $28.5) | 249,300,000 | 171,400,000 | ' | ' |
Trading securities | 247,600,000 | 266,200,000 | ' | ' |
Other invested assets | 423,300,000 | 248,100,000 | ' | ' |
Income tax assets, net | 1,147,200,000 | 716,900,000 | ' | ' |
Other assets | 341,700,000 | 334,000,000 | ' | ' |
Total assets | 34,780,600,000 | 34,131,400,000 | ' | ' |
Liabilities: | ' | ' | ' | ' |
Notes payable | 856,400,000 | 1,004,200,000 | ' | ' |
Other liabilities | 590,600,000 | 570,600,000 | ' | ' |
Total liabilities | 29,825,400,000 | 29,082,100,000 | ' | ' |
Commitments and Contingencies | ' | ' | ' | ' |
Shareholders' equity: | ' | ' | ' | ' |
Accumulated other comprehensive income | 731,800,000 | 1,197,400,000 | ' | ' |
Retained earnings (accumulated deficit) | 128,400,000 | -325,000,000 | ' | ' |
Total shareholders' equity | 4,955,200,000 | 5,049,300,000 | 4,613,800,000 | 3,811,600,000 |
Total liabilities and shareholders' equity | 34,780,600,000 | 34,131,400,000 | ' | ' |
Common stock, par value | $0.01 | $0.01 | ' | ' |
Common stock, number of shares authorized | 8,000,000,000 | 8,000,000,000 | ' | ' |
Common stock, number of shares issued | 220,323,823 | 221,502,371 | ' | ' |
Common stock, number of shares outstanding | 220,323,823 | 221,502,371 | ' | ' |
Parent company | ' | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' |
Fixed maturities, available for sale, amortized cost | 51,800,000 | 66,300,000 | ' | ' |
Equity securities at cost | 65,300,000 | 28,500,000 | ' | ' |
ASSETS | ' | ' | ' | ' |
Fixed maturities, available for sale, at fair value (amortized cost: 2013 - $51.8; 2012 - $66.3) | 51,700,000 | 68,500,000 | ' | ' |
Cash and cash equivalents - unrestricted | 131,100,000 | 165,700,000 | 70,200,000 | 160,000,000 |
Equity securities at fair value (cost: 2013 - $65.3; 2012 - $28.5) | 79,600,000 | 30,000,000 | ' | ' |
Trading securities | 2,100,000 | 2,300,000 | ' | ' |
Other invested assets | 22,200,000 | 26,300,000 | ' | ' |
Investment in wholly-owned subsidiaries (eliminated in consolidation) | 5,550,900,000 | 6,034,500,000 | ' | ' |
Income tax assets, net | 107,600,000 | 0 | ' | ' |
Other Invested Assets - affiliated (eliminated in consolidation) | 19,900,000 | 0 | ' | ' |
Receivable from subsidiaries (eliminated in consolidation) | 1,700,000 | 1,400,000 | ' | ' |
Other assets | 22,100,000 | 22,700,000 | ' | ' |
Total assets | 5,988,900,000 | 6,351,400,000 | ' | ' |
Liabilities: | ' | ' | ' | ' |
Notes payable | 856,400,000 | 1,004,200,000 | ' | ' |
Payable to subsidiaries (eliminated in consolidation) | 108,700,000 | 110,900,000 | ' | ' |
Income tax liabilities, net | 0 | 105,600,000 | ' | ' |
Other liabilities | 68,600,000 | 81,400,000 | ' | ' |
Total liabilities | 1,033,700,000 | 1,302,100,000 | ' | ' |
Commitments and Contingencies | ' | ' | ' | ' |
Shareholders' equity: | ' | ' | ' | ' |
Common stock and additional paid-in capital ($.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2013 - 220,323,823; 2012 - 221,502,371) | 4,095,000,000 | 4,176,900,000 | ' | ' |
Accumulated other comprehensive income | 731,800,000 | 1,197,400,000 | ' | ' |
Retained earnings (accumulated deficit) | 128,400,000 | -325,000,000 | ' | ' |
Total shareholders' equity | 4,955,200,000 | 5,049,300,000 | ' | ' |
Total liabilities and shareholders' equity | $5,988,900,000 | $6,351,400,000 | ' | ' |
Common stock, par value | $0.01 | $0.01 | ' | ' |
Common stock, number of shares authorized | 8,000,000,000 | 8,000,000,000 | ' | ' |
Common stock, number of shares issued | 220,323,823 | 221,502,371 | ' | ' |
Common stock, number of shares outstanding | 220,323,823 | 221,502,371 | ' | ' |
SCHEDULE_II_STATEMENT_OF_OPERA
SCHEDULE II - STATEMENT OF OPERATIONS (DETAILS) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | $1,664 | $1,486.40 | $1,354.10 |
Total revenues | 1,158.20 | 1,093.80 | 1,081.50 | 1,142.60 | 1,060.80 | 1,093 | 1,065 | 1,123.90 | 4,476.10 | 4,342.70 | 4,124.60 |
Expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense on notes payable | ' | ' | ' | ' | ' | ' | ' | ' | 105.3 | 114.6 | 114.1 |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | 65.4 | 200.2 | 3.4 |
Income before income taxes | 41.1 | 114.4 | 114.7 | 34.6 | 117.7 | -158.8 | 104.5 | 92.3 | 304.8 | 155.7 | 306.2 |
Total income tax benefit | 64.9 | 168.6 | 37.6 | 22.7 | -16.5 | 153.8 | -38.8 | -33.2 | -173.2 | -65.3 | -29.5 |
Net income | 106 | 283 | 77.1 | 11.9 | 101.2 | -5 | 65.7 | 59.1 | 478 | 221 | 335.7 |
Parent company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 21.1 | 22.3 | -4 |
Net realized investment gains | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | 1.9 | 1 |
Investment income from subsidiaries (eliminated in consolidation) | ' | ' | ' | ' | ' | ' | ' | ' | 1.6 | 0 | 0.2 |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 23.1 | 24.2 | -2.8 |
Expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense on notes payable | ' | ' | ' | ' | ' | ' | ' | ' | 51.4 | 66.6 | 76.3 |
Intercompany expenses (eliminated in consolidation) | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | 0.4 | 0.3 |
Operating costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 26.1 | 50.9 | 53.8 |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | 65.4 | 200.2 | 3.4 |
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 143.2 | 318.1 | 133.8 |
Income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -120.1 | -293.9 | -136.6 |
Total income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | -8.8 | -59.8 | -42.2 |
Loss before equity in undistributed earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | -111.3 | -234.1 | -94.4 |
Equity in undistributed earnings of subsidiaries (eliminated in consolidation) | ' | ' | ' | ' | ' | ' | ' | ' | 589.3 | 455.1 | 430.1 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | $478 | $221 | $335.70 |
SCHEDULE_II_STATEMENT_OF_CASH_
SCHEDULE II - STATEMENT OF CASH FLOWS (DETAILS) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | |||
Cash flows used by operating activities | $720.40 | $634.90 | $774.80 | |||
Cash flows from investing activities: | ' | ' | ' | |||
Sales of investments | 2,315.80 | 2,057.60 | 5,504.50 | |||
Purchases of investments | -5,367.10 | -4,271.10 | -8,156.10 | |||
Net sales (purchases) of trading securities | 30 | 60.4 | 300.2 | |||
Net cash provided by investing activities | -602.5 | -197.1 | -1,338 | |||
Cash flows from financing activities: | ' | ' | ' | |||
Issuance of notes payable, net | 0 | 944.5 | 0 | |||
Payments on notes payable | -126.9 | -810.6 | -144.8 | |||
Issuance of common stock | 15.2 | 3.1 | 2.2 | |||
Payments to repurchase common stock | -118.4 | -180.2 | -69.8 | |||
Expenses related to extinguishment of debt | -61.6 | -183 | 0 | |||
Amount paid to extinguish the beneficial conversion feature associated with repurchase of convertible debentures | -12.6 | -24 | 0 | |||
Net cash provided (used) by financing activities | -1.4 | -291.3 | 427.3 | |||
Net increase (decrease) in cash and cash equivalents | 116.5 | 146.5 | -135.9 | |||
Cash and cash equivalents, beginning of year | 582.5 | 436 | 571.9 | |||
Cash and cash equivalents, end of year | 699 | 582.5 | 436 | |||
Parent company | ' | ' | ' | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | |||
Cash flows used by operating activities | -65.9 | -95.3 | -85.5 | |||
Cash flows from investing activities: | ' | ' | ' | |||
Sales of investments | 95.8 | 159.7 | 1,422.90 | |||
Sales of investments - affiliated | 0 | [1] | 0 | [1] | 10 | [1] |
Purchases of investments | -119.3 | -145 | -1,569.50 | |||
Purchases of investments - affiliated | -10 | [1] | 0 | [1] | -10 | [1] |
Net sales (purchases) of trading securities | 12.6 | 37.4 | -16.5 | |||
Dividends received from consolidated subsidiary, net of capital contributions | 242.8 | [1] | 245 | [1] | 236 | [1] |
Change in restricted cash | 0 | 26 | -26 | |||
Net cash provided by investing activities | 221.9 | 323.1 | 46.9 | |||
Cash flows from financing activities: | ' | ' | ' | |||
Issuance of notes payable, net | 0 | 944.5 | 0 | |||
Payments on notes payable | -126.9 | -810.6 | -144.8 | |||
Issuance of common stock | 15.1 | 3.1 | 2.2 | |||
Payments to repurchase common stock | -118.4 | -180.2 | -69.8 | |||
Expenses related to extinguishment of debt | -61.6 | -183 | 0 | |||
Common stock dividends paid | -24.4 | -13.9 | 0 | |||
Amount paid to extinguish the beneficial conversion feature associated with repurchase of convertible debentures | -12.6 | -24 | 0 | |||
Investment borrowings - repurchase agreements, net | 0 | -24.8 | 24.8 | |||
Issuance of notes payable to affiliates | 222.1 | [1] | 208.6 | [1] | 169.7 | [1] |
Payments on notes payable to affiliates | -83.9 | [1] | -52 | [1] | -33.3 | [1] |
Net cash provided (used) by financing activities | -190.6 | -132.3 | -51.2 | |||
Net increase (decrease) in cash and cash equivalents | -34.6 | 95.5 | -89.8 | |||
Cash and cash equivalents, beginning of year | 165.7 | 70.2 | 160 | |||
Cash and cash equivalents, end of year | $131.10 | $165.70 | $70.20 | |||
[1] | Eliminated in consolidation |
SCHEDULE_IV_DETAILS
SCHEDULE IV (DETAILS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Assumed | $38 | $70.40 | $87.70 |
Reinsurance ceded | -240.5 | -237.1 | -243.2 |
Insurance policy income | 2,744.70 | 2,755.40 | 2,690.50 |
Life insurance inforce | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Direct | 53,304.90 | 53,750.80 | 56,540.10 |
Assumed | 305.7 | 325.7 | 349.3 |
Ceded | -11,477.60 | -12,392.40 | -13,616.90 |
Net insurance inforce | 42,133 | 41,684.10 | 43,272.50 |
Percentage of assumed to net | 0.70% | 0.80% | 0.80% |
Insurance policy income | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Direct premiums earned | 2,623.50 | 2,591.10 | 2,540.60 |
Assumed premiums earned | 37.4 | 69.4 | 80.4 |
Reinsurance ceded | -212.1 | -220 | -238.1 |
Insurance policy income | $2,448.80 | $2,440.50 | $2,382.90 |
Premiums, percentage assumed | 1.50% | 2.80% | 3.40% |