DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 6 Months Ended | |
Jun. 30, 2014 | Jul. 22, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'CNO Financial Group, Inc. | ' |
Entity Central Index Key | '0001224608 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
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 Common Stock, Shares Outstanding | ' | 212,674,485 |
CONSOLIDATED_BALANCE_SHEET
CONSOLIDATED BALANCE SHEET (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Investments: | ' | ' |
Fixed maturities, available for sale, at fair value (amortized cost: June 30, 2014 - $18,383.8; December 31, 2013 - $21,860.6) | $20,533.60 | $23,178.30 |
Equity securities at fair value (cost: June 30, 2014 - $272.6; December 31, 2013 - $237.9) | 287.5 | 249.3 |
Mortgage loans | 1,595.90 | 1,729.50 |
Policy loans | 99.7 | 277 |
Trading securities | 227.4 | 247.6 |
Investments held by variable interest entities | 1,241.10 | 1,046.70 |
Other invested assets | 426.1 | 423.3 |
Total investments | 24,411.30 | 27,151.70 |
Cash and cash equivalents - unrestricted | 378.8 | 699 |
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 |
Accrued investment income | 238.2 | 286.9 |
Present value of future profits | 512.3 | 679.3 |
Deferred acquisition costs | 698.9 | 968.1 |
Reinsurance receivables | 2,892.90 | 3,392.10 |
Income tax assets, net | 730.5 | 1,147.20 |
Assets held in separate accounts | 9.4 | 10.3 |
Other assets | 421.3 | 341.7 |
Assets of subsidiary being sold | 4,518.90 | 0 |
Total assets | 34,914.30 | 34,780.60 |
Liabilities for insurance products: | ' | ' |
Policyholder account balances | 10,649.70 | 12,776.40 |
Future policy benefits | 10,372.20 | 11,222.50 |
Liability for policy and contract claims | 463.3 | 566 |
Unearned and advanced premiums | 270.7 | 300.6 |
Liabilities related to separate accounts | 9.4 | 10.3 |
Other liabilities | 560.7 | 590.6 |
Payable to reinsurer | 0 | 590.3 |
Investment borrowings | 1,507.60 | 1,900 |
Borrowings related to variable interest entities | 1,110.80 | 1,012.30 |
Notes payable – direct corporate obligations | 827.3 | 856.4 |
Liabilities of subsidiary being sold | 4,298.30 | 0 |
Total liabilities | 30,070 | 29,825.40 |
Commitments and Contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: June 30, 2014 – 213,755,190; December 31, 2013 – 220,323,823) | 2.1 | 2.2 |
Additional paid-in capital | 3,963.90 | 4,092.80 |
Accumulated other comprehensive income | 926.1 | 731.8 |
Retained earnings (accumulated deficit) | -47.8 | 128.4 |
Total shareholders' equity | 4,844.30 | 4,955.20 |
Total liabilities and shareholders' equity | $34,914.30 | $34,780.60 |
CONSOLIDATED_BALANCE_SHEET_Par
CONSOLIDATED BALANCE SHEET (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Investments: | ' | ' |
Fixed maturities, available for sale, amortized cost | $18,383.80 | $21,860.60 |
Equity securities cost | $272.60 | $237.90 |
Shareholders' equity: | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 8,000,000,000 | 8,000,000,000 |
Common stock, shares issued | 213,755,190 | 220,323,823 |
Common stock, shares outstanding | 213,755,190 | 220,323,823 |
CONSOLIDATED_STATEMENT_OF_OPER
CONSOLIDATED STATEMENT OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Insurance policy income | $679 | $691.30 | $1,364.90 | $1,382.50 |
Net investment income (loss): | ' | ' | ' | ' |
General account assets | 347.4 | 348.8 | 695.5 | 700.7 |
Policyholder and reinsurer accounts and other special-purpose portfolios | 47.2 | 31.8 | 68.1 | 109.5 |
Realized investment gains (losses): | ' | ' | ' | ' |
Net realized investment gains, excluding impairment losses | 12.4 | 3.8 | 47.7 | 19.1 |
Other-than-temporary impairment losses: | ' | ' | ' | ' |
Total other-than-temporary impairment losses | 0 | -0.6 | -11.9 | -0.6 |
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Net impairment losses recognized | 0 | -0.6 | -11.9 | -0.6 |
Total realized gains | 12.4 | 3.2 | 35.8 | 18.5 |
Fee revenue and other income | 7 | 6.4 | 13.4 | 12.9 |
Total revenues | 1,093 | 1,081.50 | 2,177.70 | 2,224.10 |
Benefits and expenses: | ' | ' | ' | ' |
Insurance policy benefits | 691.1 | 673.2 | 1,381.40 | 1,427.30 |
Loss on sale of subsidiary | 0 | 0 | 278.6 | 0 |
Gain related to reinsurance transaction | -3.8 | 0 | -3.8 | 0 |
Interest expense | 24.3 | 26.9 | 48.9 | 54.2 |
Amortization | 64.9 | 79.2 | 131.6 | 158.5 |
Loss on extinguishment or modification of debt | 0.6 | 7.7 | 0.6 | 65.4 |
Other operating costs and expenses | 201.5 | 179.8 | 395.6 | 369.4 |
Total benefits and expenses | 978.6 | 966.8 | 2,232.90 | 2,074.80 |
Income (loss) before income taxes | 114.4 | 114.7 | -55.2 | 149.3 |
Income tax expense: | ' | ' | ' | ' |
Tax expense on period income | 40.3 | 42.6 | 79.3 | 75.8 |
Valuation allowance for deferred tax assets and other tax items | -4 | -5 | 15.4 | -15.5 |
Net income (loss) | $78.10 | $77.10 | ($149.90) | $89 |
Basic: | ' | ' | ' | ' |
Weighted average shares outstanding (in shares) | 216,538 | 220,498 | 218,422 | 221,290 |
Net income (loss) (in dollars per share) | $0.36 | $0.35 | ($0.69) | $0.40 |
Diluted: | ' | ' | ' | ' |
Weighted average shares outstanding (in shares) | 222,108 | 230,893 | 218,422 | 237,180 |
Net income (loss) (in dollars per share) | $0.35 | $0.34 | ($0.69) | $0.38 |
CONSOLIDATED_STATEMENT_OF_COMP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Consolidated Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income (loss) | $78.10 | $77.10 | ($149.90) | $89 |
Unrealized gains (losses) for the period | 479.1 | -1,179.70 | 872.9 | -1,363 |
Amortization of present value of future profits and deferred acquisition costs | -42 | 113.4 | -119.4 | 134.1 |
Amount related to premium deficiencies assuming the net unrealized gains had been realized | -180.1 | 342.7 | -417.6 | 478 |
Reclassification adjustments: | ' | ' | ' | ' |
For net realized investment gains included in net income (loss) | -9.7 | -8.9 | -35.7 | -23.7 |
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains included in net income (loss) | 0.1 | 0.4 | 0.5 | 1.2 |
Unrealized gains (losses) on investments | 247.4 | -732.1 | 300.7 | -773.4 |
Change related to deferred compensation plan | 0.4 | 1.4 | 0.7 | 2.4 |
Other comprehensive income (loss) before tax | 247.8 | -730.7 | 301.4 | -771 |
Income tax (expense) benefit related to items of accumulated other comprehensive income | -87.9 | 258.1 | -107.1 | 271.7 |
Other comprehensive income (loss), net of tax | 159.9 | -472.6 | 194.3 | -499.3 |
Comprehensive income (loss) | $238 | ($395.50) | $44.40 | ($410.30) |
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, 2012 | $5,049.30 | $4,176.90 | $1,197.40 | ($325) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Net income (loss) | 89 | 0 | 0 | 89 |
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | -497.9 | 0 | -497.9 | 0 |
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | -1.4 | 0 | -1.4 | 0 |
Extinguishment of beneficial conversion feature related to the repurchase of convertible debentures | -12.6 | -12.6 | 0 | 0 |
Cost of shares acquired | -50 | -50 | 0 | 0 |
Dividends on common stock | -11.1 | 0 | 0 | -11.1 |
Stock Based Compensation | 16.1 | 16.1 | 0 | 0 |
Balance, end of period at Jun. 30, 2013 | 4,581.40 | 4,130.40 | 698.1 | -247.1 |
Balance, beginning of period at Dec. 31, 2013 | 4,955.20 | 4,095 | 731.8 | 128.4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Net income (loss) | -149.9 | 0 | 0 | -149.9 |
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | 193.7 | 0 | 193.7 | 0 |
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | 0.6 | 0 | 0.6 | 0 |
Cost of shares acquired | -136.6 | -136.6 | 0 | 0 |
Dividends on common stock | -26.3 | 0 | 0 | -26.3 |
Stock Based Compensation | 7.6 | 7.6 | 0 | 0 |
Balance, end of period at Jun. 30, 2014 | $4,844.30 | $3,966 | $926.10 | ($47.80) |
CONSOLIDATED_STATEMENT_OF_SHAR1
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parentheticals) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Stockholders' Equity [Abstract] | ' | ' |
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit) | $106.80 | ($270.90) |
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit) | $0.30 | ($0.80) |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' | |
Insurance policy income | $1,185.30 | $1,230.10 | |
Net investment income | 686.1 | 685.1 | |
Fee revenue and other income | 13.4 | 12.9 | |
Insurance policy benefits | -1,049.10 | -1,070.10 | |
Payment to reinsurer pursuant to long-term care business reinsured | -590.3 | 0 | |
Interest expense | -45.2 | -48.9 | |
Deferrable policy acquisition costs | -116.9 | -107.2 | |
Other operating costs | -396.2 | -409.1 | |
Taxes | -2 | -2.9 | |
Net cash from operating activities | -314.9 | [1] | 289.9 |
Cash flows from investing activities: | ' | ' | |
Sales of investments | 1,377.20 | 943.5 | |
Maturities and redemptions of investments | 1,007.10 | 1,335.30 | |
Purchases of investments | -2,072.40 | -2,992.80 | |
Net sales of trading securities | 12.1 | 25.3 | |
Change in cash and cash equivalents held by variable interest entities | 2.5 | -156.5 | |
Cash and cash equivalents held by subsidiary being sold | -164.7 | 0 | |
Other | -15 | -10.6 | |
Net cash provided (used) by investing activities | 146.8 | -855.8 | |
Cash flows from financing activities: | ' | ' | |
Payments on notes payable | -29.5 | -101.9 | |
Expenses related to extinguishment or modification of debt | -0.5 | -61.3 | |
Amount paid to extinguish the beneficial conversion feature associated with repurchase of convertible debentures | 0 | -12.6 | |
Issuance of common stock | 3.6 | 12.7 | |
Payments to repurchase common stock | -133.6 | -50 | |
Common stock dividends paid | -26.3 | -11.1 | |
Amounts received for deposit products | 677.7 | 634 | |
Withdrawals from deposit products | -732.5 | -749.9 | |
Issuance of investment borrowings: | ' | ' | |
Federal Home Loan Bank | 300 | 400 | |
Related to variable interest entities | 141.6 | 376.3 | |
Payments on investment borrowings: | ' | ' | |
Federal Home Loan Bank | -317.4 | -200.2 | |
Related to variable interest entities and other | -43.6 | -0.2 | |
Investment borrowings - repurchase agreements, net | 8.4 | 27.6 | |
Net cash provided (used) by financing activities | -152.1 | 263.4 | |
Net decrease in cash and cash equivalents | -320.2 | -302.5 | |
Cash and cash equivalents, beginning of period | 699 | 582.5 | |
Cash and cash equivalents, end of period | $378.80 | $280 | |
[1] | Cash flows from operating activities reflect outflows in the 2014 period due to the payment to reinsurer to transfer certain long-term care business. |
BUSINESS_AND_BASIS_OF_PRESENTA
BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
BUSINESS AND BASIS OF PRESENTATION | ' |
BUSINESS AND BASIS OF PRESENTATION | |
The following notes should be read together with the notes to the consolidated financial statements included in our 2013 Annual Report on Form 10-K. | |
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. | |
Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. As permitted by rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We have reclassified certain amounts from the prior periods to conform to the 2014 presentation. These reclassifications have no effect on net income or shareholders' equity. Results for interim periods are not necessarily indicative of the results that may be expected for a full year. | |
The balance sheet at December 31, 2013, presented herein, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. | |
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. | |
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. |
AGREEMENT_TO_SELL_SUBSIDIARY
AGREEMENT TO SELL SUBSIDIARY | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||
AGREEMENT TO SELL SUBSIDIARY | ' | ||||
AGREEMENT TO SELL SUBSIDIARY | |||||
On March 2, 2014, CNO entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Wilton Reassurance Company ("Wilton Re"), pursuant to which CNO agreed to sell to Wilton Re all of the issued and outstanding shares of Conseco Life Insurance Company ("CLIC"), an indirect wholly owned subsidiary of CNO. The transaction, which closed on July 1, 2014, was subject to receipt of insurance regulatory approvals and satisfaction of other customary closing conditions. The transaction resulted in net proceeds of approximately $216 million based upon an estimated balance sheet of CLIC as of June 30, 2014 and after anticipated transaction costs and intercompany transactions completed in connection with the closing. | |||||
In connection with the closing of the transaction, CNO Services, LLC ("CNO Services"), an indirect wholly owned subsidiary of CNO, entered into a transition services agreement and a special support services agreement with Wilton Re, pursuant to which CNO Services will make available to Wilton Re and its affiliates, for a limited period of time, certain services required for the operation of CLIC's business following the closing. The costs of the services provided to Wilton Re are expected to approximate the fees received under the agreements. | |||||
We have accounted for the sale of CLIC as held for sale. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less costs to sell. As the carrying amount of the CLIC business being sold exceeded its costs to sell, we have recognized a loss on the sale of CLIC in the six months ended June 30, 2014, as summarized below (dollars in millions): | |||||
Net cash proceeds | $ | 216 | |||
Net assets being sold: | |||||
Investments | 3,863.80 | ||||
Cash and cash equivalents | 164.7 | ||||
Accrued investment income | 42.7 | ||||
Present value of future profits | 15.5 | ||||
Deferred acquisition costs | 37.6 | ||||
Reinsurance receivables | 307.4 | ||||
Income tax assets, net | 84.4 | ||||
Other assets | 2.8 | ||||
Liabilities for insurance products | (3,201.3 | ) | |||
Other liabilities | (199.1 | ) | |||
Investment borrowings | (383.4 | ) | |||
Accumulated other comprehensive income | (240.5 | ) | |||
Net assets being sold | 494.6 | ||||
Loss before taxes | (278.6 | ) | |||
Tax expense related to tax gain on sale | 21.6 | ||||
Previously unrecognized tax benefit now recognized as a result of the gain | (7.4 | ) | |||
Valuation allowance release related to the gain | (14.2 | ) | |||
Valuation allowance increase related to the decrease in projected future taxable income | 19.4 | ||||
Net loss | $ | (298.0 | ) | ||
Because the tax basis of CLIC is lower than the estimated cash proceeds, the transaction will generate a taxable gain and estimated tax expense of $21.6 million (subject to further adjustment based on the determination of the final sales price and net proceeds from the sale). Fully offsetting the tax is $7.4 million of previously unrecognized tax benefits (pertaining to a corporate matter unrelated to the sale of CLIC) which may now be recognized and $14.2 million of a valuation allowance release pertaining to net operating loss carryforwards ("NOLs") which may now be utilized. However, the disposition of CLIC is expected to result in a net reduction to CNO's taxable income in future periods which also requires us to establish a valuation allowance of $19.4 million. | |||||
The assets and liabilities of the CLIC business being sold have been segregated in the consolidated balance sheet as of June 30, 2014. The following summarizes the assets and liabilities held for sale as of June 30, 2014 (dollars in millions): | |||||
June 30, 2014 | |||||
Investments | $ | 3,863.80 | |||
Cash and cash equivalents - unrestricted | 164.7 | ||||
Accrued investment income | 42.7 | ||||
Present value of future profits | 15.5 | ||||
Deferred acquisition costs | 37.6 | ||||
Reinsurance receivables | 307.4 | ||||
Income tax assets, net | 84.4 | ||||
Other assets | 2.8 | ||||
Assets of subsidiary being sold | $ | 4,518.90 | |||
Liabilities for insurance products | $ | 3,201.30 | |||
Other liabilities | 199.1 | ||||
Investment borrowings | 383.4 | ||||
Loss accrual | 514.5 | ||||
Liabilities of subsidiary being sold | $ | 4,298.30 | |||
The Stock Purchase Agreement also provided that, at the closing, Bankers Life and Casualty Company ("Bankers Life"), an indirect wholly owned subsidiary of CNO, would recapture the life insurance business written by Bankers Life that was reinsured by Wilton Re. The recapture agreement was conditioned on the concurrent consummation of the closing. On July 1, 2014, Bankers Life paid $28.0 million to recapture the life insurance business from Wilton Re and will recognize a gain (net of income taxes) of approximately $4.5 million in the third quarter of 2014 as a result of the recapture. |
OUT_OF_PERIOD_ADJUSTMENTS
OUT OF PERIOD ADJUSTMENTS | 6 Months Ended |
Jun. 30, 2014 | |
Out of Period Adjustments [Abstract] | ' |
OUT-OF-PERIOD ADJUSTMENTS | ' |
OUT-OF-PERIOD ADJUSTMENTS | |
In the six months ended June 30, 2014, we recorded the net effect of an out-of-period adjustment related to the calculation of incentive compensation accruals which increased other operating costs and expenses by $2.4 million, decreased tax expense by $.8 million and increased our net loss by $1.6 million (or 1 cent per diluted share). In the six months ended June 30, 2013, we recorded the net effect of an out-of-period adjustment which increased our insurance policy benefits by $6.7 million, increased amortization expense by $2.5 million, decreased tax expense by $3.2 million and decreased our net income by $6.0 million (or 3 cents per diluted share), none of which was recognized in the second quarter of 2013. We evaluated these adjustments taking into account both qualitative and quantitative factors and considered the impact of these adjustments in relation to each period, as well as 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. |
INVESTMENTS
INVESTMENTS | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [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)). | |||||||||||||||||||||||||
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). Our trading securities totaled $227.4 million and $247.6 million at June 30, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||||
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 June 30, 2014 and December 31, 2013, were as follows (dollars in millions): | |||||||||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ | 8.5 | $ | 6.5 | |||||||||||||||||||||
Net unrealized gains on all other investments | 2,157.80 | 1,322.60 | |||||||||||||||||||||||
Adjustment to present value of future profits (a) | (157.6 | ) | (47.7 | ) | |||||||||||||||||||||
Adjustment to deferred acquisition costs | (395.5 | ) | (137.0 | ) | |||||||||||||||||||||
Adjustment to insurance liabilities | (168.1 | ) | — | ||||||||||||||||||||||
Unrecognized net loss related to deferred compensation plan | (6.4 | ) | (7.1 | ) | |||||||||||||||||||||
Deferred income tax liabilities | (512.6 | ) | (405.5 | ) | |||||||||||||||||||||
Accumulated other comprehensive income | $ | 926.1 | $ | 731.8 | |||||||||||||||||||||
________ | |||||||||||||||||||||||||
(a) | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003 (the date Conseco, Inc., an Indiana corporation (our "Predecessor"), emerged from bankruptcy. | ||||||||||||||||||||||||
At June 30, 2014, adjustments to the present value of future profits, deferred acquisition costs, insurance liabilities and deferred tax assets included $(134.0) million, $(143.3) million, $(168.1) million and $158.3 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 June 30, 2014, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions): | |||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Other-than-temporary impairments included in accumulated other comprehensive income | |||||||||||||||||||||
Corporate securities | $ | 12,217.40 | $ | 1,688.00 | $ | (23.8 | ) | $ | 13,881.60 | $ | — | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 149.6 | 10.7 | (.2 | ) | 160.1 | — | |||||||||||||||||||
States and political subdivisions | 1,944.30 | 212.9 | (6.3 | ) | 2,150.90 | — | |||||||||||||||||||
Asset-backed securities | 1,244.50 | 84.2 | (2.6 | ) | 1,326.10 | — | |||||||||||||||||||
Collateralized debt obligations | 319.9 | 5.2 | (.9 | ) | 324.2 | — | |||||||||||||||||||
Commercial mortgage-backed securities | 1,173.90 | 92.5 | (.2 | ) | 1,266.20 | — | |||||||||||||||||||
Mortgage pass-through securities | 8.4 | 0.5 | — | 8.9 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 1,325.80 | 90.7 | (.9 | ) | 1,415.60 | (3.7 | ) | ||||||||||||||||||
Total fixed maturities, available for sale | $ | 18,383.80 | $ | 2,184.70 | $ | (34.9 | ) | $ | 20,533.60 | $ | (3.7 | ) | |||||||||||||
Fixed maturities of CLIC being sold | $ | 3,470.70 | $ | — | $ | — | $ | 3,470.70 | $ | — | |||||||||||||||
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at June 30, 2014, 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 | $ | 164.7 | $ | 169.5 | |||||||||||||||||||||
Due after one year through five years | 1,762.10 | 1,957.60 | |||||||||||||||||||||||
Due after five years through ten years | 2,906.40 | 3,192.20 | |||||||||||||||||||||||
Due after ten years | 9,478.10 | 10,873.30 | |||||||||||||||||||||||
Subtotal | 14,311.30 | 16,192.60 | |||||||||||||||||||||||
Structured securities | 4,072.50 | 4,341.00 | |||||||||||||||||||||||
Total fixed maturities, available for sale | $ | 18,383.80 | $ | 20,533.60 | |||||||||||||||||||||
Net Realized Investment Gains (Losses) | |||||||||||||||||||||||||
The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions): | |||||||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Fixed maturity securities, available for sale: | |||||||||||||||||||||||||
Gross realized gains on sale | $ | 4.9 | $ | 10.8 | $ | 46.4 | $ | 27.4 | |||||||||||||||||
Gross realized losses on sale | (3.0 | ) | (1.4 | ) | (8.5 | ) | (3.4 | ) | |||||||||||||||||
Impairments: | |||||||||||||||||||||||||
Total other-than-temporary impairment losses | — | — | — | — | |||||||||||||||||||||
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | — | |||||||||||||||||||||
Net impairment losses recognized | — | — | — | — | |||||||||||||||||||||
Net realized investment gains from fixed maturities | 1.9 | 9.4 | 37.9 | 24 | |||||||||||||||||||||
Equity securities | 7.9 | — | 7.9 | — | |||||||||||||||||||||
Commercial mortgage loans | 1.1 | — | 1.1 | 0.7 | |||||||||||||||||||||
Impairments of mortgage loans and other investments | — | (.6 | ) | (11.9 | ) | (.6 | ) | ||||||||||||||||||
Other | 1.5 | (5.6 | ) | 0.8 | (5.6 | ) | |||||||||||||||||||
Net realized investment gains | $ | 12.4 | $ | 3.2 | $ | 35.8 | $ | 18.5 | |||||||||||||||||
During the first six months of 2014, we recognized net realized investment gains of $35.8 million, which were comprised of $41.8 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $1.4 billion, the increase in fair value of certain fixed maturity investments with embedded derivatives of $5.9 million and $11.9 million of writedowns of investments for other than temporary declines in fair value recognized through net income. | |||||||||||||||||||||||||
During the first six months of 2013, we recognized net realized investment gains of $18.5 million, which were comprised of $29.6 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $.9 billion and the decrease in fair value of certain fixed maturity investments with embedded derivatives of $10.5 million and $.6 million of writedowns of investments for other than temporary declines in fair value recognized through net income. | |||||||||||||||||||||||||
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. | |||||||||||||||||||||||||
During the first six months of 2014, the $8.5 million of realized losses on sales of $156.9 million of fixed maturity securities, available for sale, included: (i) $.5 million of losses related to the sales of securities issued by state and political subdivisions; and (ii) $8.0 million of additional losses 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 the first six months of 2014, we recognized $11.9 million of impairment losses recorded in earnings which included: (i) a $3.9 million writedown of a commercial mortgage loan related to a property with expected occupancy challenges; and (ii) an $8.0 million impairment related to two legacy private company investments where earnings and cash flows have not met the expectations assumed in our previous valuations. | |||||||||||||||||||||||||
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 June 30, 2014, other-than-temporary impairments included in accumulated other comprehensive income of $3.7 million (before taxes and related amortization) related to structured securities. | |||||||||||||||||||||||||
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 three and six months ended June 30, 2014, and 2013 (dollars in millions): | |||||||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ | (1.3 | ) | $ | (1.5 | ) | $ | (1.3 | ) | $ | (1.6 | ) | |||||||||||||
Add: credit losses on other-than-temporary impairments not previously recognized | — | — | — | — | |||||||||||||||||||||
Less: credit losses on securities sold | 0.1 | — | 0.1 | 0.1 | |||||||||||||||||||||
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 | $ | (1.2 | ) | $ | (1.5 | ) | $ | (1.2 | ) | $ | (1.5 | ) | |||||||||||||
__________ | |||||||||||||||||||||||||
(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. | ||||||||||||||||||||||||
Gross Unrealized Investment Losses | |||||||||||||||||||||||||
Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities. | |||||||||||||||||||||||||
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 June 30, 2014 (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 | $ | — | $ | — | $ | 18.4 | $ | (.2 | ) | $ | 18.4 | $ | (.2 | ) | |||||||||||
States and political subdivisions | 15.6 | (.6 | ) | 124.1 | (5.7 | ) | 139.7 | (6.3 | ) | ||||||||||||||||
Corporate securities | 173.3 | (1.1 | ) | 423.2 | (22.7 | ) | 596.5 | (23.8 | ) | ||||||||||||||||
Asset-backed securities | 76.9 | (.5 | ) | 91.5 | (2.1 | ) | 168.4 | (2.6 | ) | ||||||||||||||||
Collateralized debt obligations | 64.2 | (.7 | ) | 11.7 | (.2 | ) | 75.9 | (.9 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 14.8 | — | 19.2 | (.2 | ) | 34 | (.2 | ) | |||||||||||||||||
Mortgage pass-through securities | 1.2 | — | 0.8 | — | 2 | — | |||||||||||||||||||
Collateralized mortgage obligations | 82.4 | (.4 | ) | 20.6 | (.5 | ) | 103 | (.9 | ) | ||||||||||||||||
Total fixed maturities, available for sale | $ | 428.4 | $ | (3.3 | ) | $ | 709.5 | $ | (31.6 | ) | $ | 1,137.90 | $ | (34.9 | ) | ||||||||||
Preferred stock | $ | 34.3 | $ | (.4 | ) | $ | 20.3 | $ | (.9 | ) | $ | 54.6 | $ | (1.3 | ) | ||||||||||
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 | ) | ||||||||||
Preferred stock | $ | 26.8 | $ | (4.9 | ) | $ | — | $ | — | $ | 26.8 | $ | (4.9 | ) | |||||||||||
Based on management's current assessment of investments with unrealized losses at June 30, 2014, 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. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
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): | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) for basic earnings per share | $ | 78.1 | $ | 77.1 | $ | (149.9 | ) | $ | 89 | |||||||
Add: interest expense on 7.0% Senior Debentures due 2016 (the "7.0% Debentures"), net of income taxes | — | 0.4 | — | 1.6 | ||||||||||||
Net income (loss) for diluted earnings per share | $ | 78.1 | $ | 77.5 | $ | (149.9 | ) | $ | 90.6 | |||||||
Shares: | ||||||||||||||||
Weighted average shares outstanding for basic earnings per share | 216,538 | 220,498 | 218,422 | 221,290 | ||||||||||||
Effect of dilutive securities on weighted average shares: | ||||||||||||||||
7.0% Debentures | — | 5,692 | — | 11,141 | ||||||||||||
Stock options, restricted stock and performance units | 2,390 | 2,412 | — | 2,620 | ||||||||||||
Warrants | 3,180 | 2,291 | — | 2,129 | ||||||||||||
Dilutive potential common shares | 5,570 | 10,395 | — | 15,890 | ||||||||||||
Weighted average shares outstanding for diluted earnings per share | 222,108 | 230,893 | 218,422 | 237,180 | ||||||||||||
In the six months ended June 30, 2014, 5,687,000 equivalent common shares (comprised of 2,464,000 shares related to stock options, restricted stock and performance units and 3,223,000 shares related to warrants) were not included in the diluted weighted average shares outstanding, because their inclusion would have been antidilutive in such period due to the net loss recognized by the Company resulting from the sale of CLIC. | ||||||||||||||||
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 and the right to convert the 7.0% Debentures into shares of its common stock was terminated effective July 30, 2013. |
BUSINESS_SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
BUSINESS SEGMENTS | ' | |||||||||||||||
BUSINESS SEGMENTS | ||||||||||||||||
Prior to 2014, the Company managed 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. As a result of the sale of CLIC which was completed on July 1, 2014 and the coinsurance agreements to cede certain long-term care business effective December 31, 2013 (as further described in the note to the consolidated financial statements entitled "Reinsurance"), management has changed the manner in which it disaggregates the Company's operations for making operating decisions and assessing performance. In periods prior to 2014: (i) the results in the Washington National segment have been adjusted to include the results from the business in the Other CNO Business segment that are being retained; (ii) the Other CNO Business segment included only the long-term care business that was ceded effective December 31, 2013 and the overhead expense of CLIC that is expected to continue after the completion of the sale; and (iii) the CLIC business being sold is excluded from our analysis of business segment results. Beginning on January 1, 2014: (i) the overhead expense of CLIC that is expected to continue after the completion of the sale has been reallocated primarily to the Bankers Life and Washington National segments; (ii) there is no longer an Other CNO Business segment; and (iii) the CLIC business being sold continues to be excluded from our analysis of business segment results. After the completion of the sale of CLIC: (i) the Bankers Life segment will include the results of certain life insurance business that was recaptured from Wilton Re; and (ii) the revenues and expenses associated with a transition services agreement and a special support services agreement with Wilton Re will be included in our non-operating earnings. Our prior period segment disclosures have been revised to reflect management's current view of the Company's operating segments. | ||||||||||||||||
We measure segment performance by excluding the loss on the operations of CLIC being sold, the earnings of CLIC being sold, 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 variable interest entities ("VIEs"), loss on extinguishment or modification of debt and income taxes ("pre-tax operating earnings") 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. | ||||||||||||||||
The loss on the operations of CLIC being sold, the earnings of CLIC being sold, 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 VIEs and loss on extinguishment or modification 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): | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues: | ||||||||||||||||
Bankers Life: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Annuities | $ | 7.7 | $ | 8.6 | $ | 15.2 | $ | 16.5 | ||||||||
Health | 320.5 | 334.1 | 651 | 666.7 | ||||||||||||
Life | 79.9 | 76.4 | 158.2 | 153.9 | ||||||||||||
Net investment income (a) | 247.6 | 226.6 | 472 | 488.3 | ||||||||||||
Fee revenue and other income (a) | 5.8 | 4 | 11.1 | 7.7 | ||||||||||||
Total Bankers Life revenues | 661.5 | 649.7 | 1,307.50 | 1,333.10 | ||||||||||||
Washington National: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Annuities | 1.4 | 1.7 | 2.4 | 3.2 | ||||||||||||
Health | 148.8 | 145.8 | 297.7 | 291.2 | ||||||||||||
Life | 6.5 | 5.6 | 12.2 | 11.6 | ||||||||||||
Net investment income (a) | 71.8 | 69.8 | 140.8 | 147.7 | ||||||||||||
Fee revenue and other income (a) | 0.2 | 0.2 | 0.4 | 0.4 | ||||||||||||
Total Washington National revenues | 228.7 | 223.1 | 453.5 | 454.1 | ||||||||||||
Colonial Penn: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Health | 0.9 | 1.1 | 1.9 | 2.2 | ||||||||||||
Life | 60.8 | 56.9 | 120.3 | 112.7 | ||||||||||||
Net investment income (a) | 10.5 | 9.9 | 21.2 | 19.8 | ||||||||||||
Fee revenue and other income (a) | 0.3 | 0.2 | 0.5 | 0.4 | ||||||||||||
Total Colonial Penn revenues | 72.5 | 68.1 | 143.9 | 135.1 | ||||||||||||
Other CNO Business: | ||||||||||||||||
Insurance policy income - health | — | 6.1 | — | 12.3 | ||||||||||||
Net investment income (a) | — | 8.4 | — | 16.8 | ||||||||||||
Total Other CNO Business revenues | — | 14.5 | — | 29.1 | ||||||||||||
Corporate operations: | ||||||||||||||||
Net investment income | 5.7 | 4.5 | 12.7 | 14.6 | ||||||||||||
Fee and other income | 1.3 | 1.5 | 2.7 | 3.2 | ||||||||||||
Total corporate revenues | 7 | 6 | 15.4 | 17.8 | ||||||||||||
Total revenues | 969.7 | 961.4 | 1,920.30 | 1,969.20 | ||||||||||||
(continued on next page) | ||||||||||||||||
(continued from previous page) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Expenses: | ||||||||||||||||
Bankers Life: | ||||||||||||||||
Insurance policy benefits | $ | 427.9 | $ | 434.1 | $ | 842.9 | $ | 904.6 | ||||||||
Amortization | 45.4 | 45.7 | 93.6 | 100.2 | ||||||||||||
Interest expense on investment borrowings | 1.9 | 1.7 | 3.8 | 3.1 | ||||||||||||
Other operating costs and expenses | 98.9 | 89.1 | 195.6 | 184 | ||||||||||||
Total Bankers Life expenses | 574.1 | 570.6 | 1,135.90 | 1,191.90 | ||||||||||||
Washington National: | ||||||||||||||||
Insurance policy benefits | 132.8 | 130.3 | 264.6 | 268 | ||||||||||||
Amortization | 16 | 16.2 | 32.3 | 33.3 | ||||||||||||
Interest expense on investment borrowings | 0.5 | 0.5 | 0.9 | 1 | ||||||||||||
Other operating costs and expenses | 47.1 | 40.3 | 92.3 | 82 | ||||||||||||
Total Washington National expenses | 196.4 | 187.3 | 390.1 | 384.3 | ||||||||||||
Colonial Penn: | ||||||||||||||||
Insurance policy benefits | 43.2 | 41.2 | 87.9 | 84.2 | ||||||||||||
Amortization | 3.8 | 3.7 | 7.8 | 7.4 | ||||||||||||
Other operating costs and expenses | 21.7 | 22 | 50.6 | 47.7 | ||||||||||||
Total Colonial Penn expenses | 68.7 | 66.9 | 146.3 | 139.3 | ||||||||||||
Other CNO Business: | ||||||||||||||||
Insurance policy benefits | — | 15.3 | — | 30.9 | ||||||||||||
Other operating costs and expenses | — | 6.4 | — | 12.7 | ||||||||||||
Total Other CNO Business expenses | — | 21.7 | — | 43.6 | ||||||||||||
Corporate operations: | ||||||||||||||||
Interest expense on corporate debt | 11.1 | 13.1 | 22.2 | 28.2 | ||||||||||||
Interest expense on investment borrowings | — | — | — | 0.1 | ||||||||||||
Other operating costs and expenses | 22.5 | 3.6 | 36.9 | 12.3 | ||||||||||||
Total corporate expenses | 33.6 | 16.7 | 59.1 | 40.6 | ||||||||||||
Total expenses | 872.8 | 863.2 | 1,731.40 | 1,799.70 | ||||||||||||
Pre-tax operating earnings by segment: | ||||||||||||||||
Bankers Life | 87.4 | 79.1 | 171.6 | 141.2 | ||||||||||||
Washington National | 32.3 | 35.8 | 63.4 | 69.8 | ||||||||||||
Colonial Penn | 3.8 | 1.2 | (2.4 | ) | (4.2 | ) | ||||||||||
Other CNO Business | — | (7.2 | ) | — | (14.5 | ) | ||||||||||
Corporate operations | (26.6 | ) | (10.7 | ) | (43.7 | ) | (22.8 | ) | ||||||||
Pre-tax operating earnings | $ | 96.9 | $ | 98.2 | $ | 188.9 | $ | 169.5 | ||||||||
___________________ | ||||||||||||||||
(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 and net income (loss) is as follows (dollars in millions): | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total segment revenues | $ | 969.7 | $ | 961.4 | $ | 1,920.30 | $ | 1,969.20 | ||||||||
Net realized investment gains | 11.7 | 1.6 | 33 | 14.8 | ||||||||||||
Revenues related to certain non-strategic investments and earnings attributable to VIEs | 7.3 | 8.2 | 13.6 | 15.1 | ||||||||||||
Revenues of CLIC being sold | 104.3 | 110.3 | 210.8 | 225 | ||||||||||||
Consolidated revenues | 1,093.00 | 1,081.50 | 2,177.70 | 2,224.10 | ||||||||||||
Total segment expenses | 872.8 | 863.2 | 1,731.40 | 1,799.70 | ||||||||||||
Gain related to reinsurance transaction | (3.8 | ) | — | (3.8 | ) | — | ||||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | 10.1 | (29.0 | ) | 25.3 | (32.1 | ) | ||||||||||
Amortization related to fair value changes in embedded derivative liabilities | (2.7 | ) | 10.5 | (6.9 | ) | 11.5 | ||||||||||
Amortization related to net realized investment gains | 0.1 | 0.4 | 0.5 | 1.2 | ||||||||||||
Expenses related to certain non-strategic investments and earnings attributable to VIEs | 10.2 | 11.1 | 19.8 | 19.9 | ||||||||||||
Loss on extinguishment or modification of debt | 0.6 | 7.7 | 0.6 | 65.4 | ||||||||||||
Loss on sale of subsidiary | — | — | 278.6 | — | ||||||||||||
Expenses of CLIC being sold | 91.3 | 102.9 | 187.4 | 209.2 | ||||||||||||
Consolidated expenses | 978.6 | 966.8 | 2,232.90 | 2,074.80 | ||||||||||||
Income (loss) before tax | 114.4 | 114.7 | (55.2 | ) | 149.3 | |||||||||||
Income tax expense: | ||||||||||||||||
Tax expense on period income | 40.3 | 42.6 | 79.3 | 75.8 | ||||||||||||
Valuation allowance for deferred taxes and other tax items | (4.0 | ) | (5.0 | ) | 15.4 | (15.5 | ) | |||||||||
Net income (loss) | $ | 78.1 | $ | 77.1 | $ | (149.9 | ) | $ | 89 | |||||||
ACCOUNTING_FOR_DERIVATIVES
ACCOUNTING FOR DERIVATIVES | 6 Months Ended |
Jun. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
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 $36.7 million and $75.9 million in the six months ended June 30, 2014 and 2013, respectively. These amounts were substantially offset by a corresponding change to insurance policy benefits. The estimated fair value of these options was $130.7 million (including $4.3 million classified as "Assets of subsidiary being sold") and $156.2 million at June 30, 2014 and December 31, 2013, 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 "policyholder account balances", was $980.3 million and $903.7 million at June 30, 2014 and December 31, 2013, respectively. We recognized an increase to earnings of $7.4 million and $18.5 million in the second quarters of 2014 and 2013, respectively, and $18.4 million and $20.6 million in the first six months of 2014 and 2013, 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 June 30, 2014, substantially all of our counterparties were rated "BBB" or higher by Standard & Poor's Corporation ("S&P"). | |
In periods prior to the second quarter of 2014, we were required to establish an embedded derivative related to a modified coinsurance agreement which ceded the risks of a block of interest sensitive life business. We recaptured this block in the second quarter of 2014, resulting in a gain of $3.8 million, primarily consisting of the release of the embedded derivative. Prior to the recapture of this block, we maintained the investments related to the modified coinsurance agreement in our trading securities account, which we carried at estimated fair value with changes in such value recognized as investment income. Such trading securities were sold in the second quarter of 2014 in conjunction with the reinsurance recapture. | |
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 $221.1 million (including $24.3 million classified as "Assets of subsidiary being sold") and $180.6 million at June 30, 2014 and December 31, 2013, respectively. |
REINSURANCE
REINSURANCE | 6 Months Ended |
Jun. 30, 2014 | |
Reinsurance Disclosures [Abstract] | ' |
REINSURANCE | ' |
REINSURANCE | |
The cost of reinsurance ceded totaled $55.4 million and $55.1 million in the second quarters of 2014 and 2013, respectively, and $107.5 million and $107.1 million in the first six months of 2014 and 2013, respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $61.2 million and $39.1 million in the second quarters of 2014 and 2013, respectively, and $120.8 million and $92.7 million in the first six months of 2014 and 2013, 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 $3.8 million and $15.4 million in the second quarters of 2014 and 2013, respectively, and $14.7 million and $29.1 million in the first six months of 2014 and 2013, respectively. Reinsurance premiums included amounts assumed pursuant to marketing and quota-share agreements with Coventry Health Care ("Coventry") of nil and $10.8 million in the second quarters of 2014 and 2013, respectively and $6.8 million and $19.7 million in the first six months of 2014 and 2013, respectively. In August 2013, we received a notice of Coventry's intent to terminate the Medicare Part D prescription drug plan ("PDP") quota-share reinsurance agreement whereby we assumed a portion of the risk related to the PDP business sold through our Bankers Life segment. The PDP premiums received in 2014 (all of which were received in the first quarter of 2014)represent adjustments on such business related to periods prior to the termination of the agreement. We continue to receive distribution income from Coventry for PDP business sold through our Bankers Life segment. | |
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 paid an additional premium of $96.9 million to BRe and an amount equal to the related net liabilities. The insurance subsidiaries' ceded reserve credits are 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. | |
In the second quarter of 2014, we recaptured a block of interest-sensitive life business that was previously ceded under a modified coinsurance agreement. The recapture of this block resulted in a gain related to reinsurance transaction of $3.8 million. The gain primarily consisted of the release of an embedded derivative that is no longer required. |
INCOME_TAXES
INCOME TAXES | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
INCOME TAXES | |||||||||||||||||
The Company's interim tax expense is based upon the estimated annual effective tax rate for the respective period. Under authoritative guidance, certain items are required to be excluded from the estimated annual effective tax rate calculation. Such items include changes in judgment about the realizability of deferred tax assets resulting from changes in projections of income expected to be available in future years, and items deemed to be unusual, infrequent, or that can not be reliably estimated. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. Discrete items include: (i) the loss on the sale of CLIC of $278.6 million in the six months ended June 30, 2014; and (ii) the loss on extinguishment or modification of debt of $7.7 million and $65.4 million in the three and six months ended June 30, 2013, respectively. The components of income tax expense are as follows (dollars in millions): | |||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Current tax expense | $ | 3.9 | $ | 2.7 | $ | 6.1 | $ | 5.4 | |||||||||
Deferred tax expense | 36.4 | 40.8 | 73.2 | 71.8 | |||||||||||||
Income tax expense calculated based on estimated annual effective tax rate | 40.3 | 43.5 | 79.3 | 77.2 | |||||||||||||
Income tax expense (benefit) on discrete items: | |||||||||||||||||
Related to the sale of CLIC: | |||||||||||||||||
Tax expense related to tax gain on sale | 8.4 | — | 21.6 | — | |||||||||||||
Previously unrecognized tax benefit recognized as a result of the gain | — | — | (7.4 | ) | — | ||||||||||||
Valuation allowance release related to the gain | (8.4 | ) | — | (14.2 | ) | — | |||||||||||
Valuation allowance increase related to the decrease in projected future taxable income | — | — | 19.4 | — | |||||||||||||
Valuation allowance reduction resulting from the realization of capital gains and utilization of loss carryforwards | (4.0 | ) | (5.0 | ) | (4.0 | ) | (15.5 | ) | |||||||||
Deferred tax benefit related to loss on extinguishment or modification of debt | — | (.9 | ) | — | (1.4 | ) | |||||||||||
Total income tax expense | $ | 36.3 | $ | 37.6 | $ | 94.7 | $ | 60.3 | |||||||||
A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, before discrete items, reflected in the consolidated statement of operations is as follows: | |||||||||||||||||
Six months ended | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
U.S. statutory corporate rate | 35 | % | 35 | % | |||||||||||||
Non-taxable income and nondeductible benefits, net | (1.0 | ) | (.5 | ) | |||||||||||||
State taxes | 1.5 | 1.4 | |||||||||||||||
Estimated annual effective tax rate | 35.5 | % | 35.9 | % | |||||||||||||
The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): | |||||||||||||||||
June 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Net federal operating loss carryforwards | $ | 1,141.80 | $ | 1,240.20 | |||||||||||||
Net state operating loss carryforwards | 18.4 | 20 | |||||||||||||||
Tax credits | 40.6 | 43.9 | |||||||||||||||
Capital loss carryforwards | 0.6 | 13.4 | |||||||||||||||
Deductible temporary differences: | |||||||||||||||||
Investments | 68.2 | 74.3 | |||||||||||||||
Insurance liabilities | 622.2 | 723.8 | |||||||||||||||
Other | (1.7 | ) | 64.7 | ||||||||||||||
Gross deferred tax assets | 1,890.10 | 2,180.30 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Present value of future profits and deferred acquisition costs | (318.1 | ) | (306.8 | ) | |||||||||||||
Accumulated other comprehensive income | (512.6 | ) | (405.5 | ) | |||||||||||||
Gross deferred tax liabilities | (830.7 | ) | (712.3 | ) | |||||||||||||
Net deferred tax assets before valuation allowance | 1,059.40 | 1,468.00 | |||||||||||||||
Valuation allowance | (296.0 | ) | (294.8 | ) | |||||||||||||
Net deferred tax assets | 763.4 | 1,173.20 | |||||||||||||||
Current income taxes accrued | (32.9 | ) | (26.0 | ) | |||||||||||||
Income tax assets, net | $ | 730.5 | $ | 1,147.20 | |||||||||||||
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 $763.4 million of our deferred tax assets will be realized through future taxable earnings. 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. | |||||||||||||||||
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. Such normalized projected taxable income has been adjusted to reflect the investment trading strategies and the coinsurance agreements to cede certain long-term care business, both completed in 2013. In addition, projected taxable income has been adjusted to reflect the sale of CLIC, which is expected to result in a net reduction to CNO's taxable income in future periods and required us to establish a valuation allowance of $19.4 million in the first six months of 2014. Our current deferred tax valuation model assumes estimated normalized taxable income of approximately $315.0 million in 2014. 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 and have concluded that it is more likely than not that the components recognized will be fully realized in the future. | |||||||||||||||||
Recovery of our deferred tax asset is dependent on achieving the level of future taxable income projected in our deferred tax valuation model and failure to do so could 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 Internal Revenue Service (the "IRS") ultimately agrees with the tax position we have taken in our tax returns with respect to the character of the loss 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 NOL 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 (3.32 percent at June 30, 2014), 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 June 30, 2014, we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs. | |||||||||||||||||
As of June 30, 2014, we had $3.3 billion of federal NOLs and $1.8 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 | ||||||||||||||
2018 | $ | 120.6 | $ | — | $ | — | $ | 120.6 | |||||||||
2021 | 30 | — | — | 30 | |||||||||||||
2022 | 152 | — | — | 152 | |||||||||||||
2023 | 742.6 | 2,126.10 | — | 2,868.70 | |||||||||||||
2025 | — | 115.3 | — | 115.3 | |||||||||||||
2027 | — | 202.6 | — | 202.6 | |||||||||||||
2028 | — | 0.5 | — | 0.5 | |||||||||||||
2029 | — | 272.3 | — | 272.3 | |||||||||||||
2032 | — | 44 | — | 44 | |||||||||||||
Subtotal | 1,045.20 | 2,760.80 | — | 3,806.00 | |||||||||||||
Less: | |||||||||||||||||
Unrecognized tax benefits | (344.7 | ) | (199.0 | ) | 1.8 | (541.9 | ) | ||||||||||
Total | $ | 700.5 | $ | 2,561.80 | $ | 1.8 | $ | 3,264.10 | |||||||||
We had deferred tax assets related to NOLs for state income taxes of $18.4 million and $20.0 million at June 30, 2014 and December 31, 2013, respectively. The related state NOLs are available to offset future state taxable income in certain states through 2025. | |||||||||||||||||
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 $166.0 million. However, if this unrecognized tax benefit would have been recognized, we would also have established a valuation allowance of $41.0 million at June 30, 2014. | |||||||||||||||||
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. |
NOTES_PAYABLE_DIRECT_CORPORATE
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
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 June 30, 2014 and December 31, 2013 (dollars in millions): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Senior Secured Credit Agreement (as defined below) | $ | 555.5 | $ | 581.5 | ||||
6.375% Senior Secured Notes due October 2020 (the "6.375% Notes") | 275 | 275 | ||||||
7.0% Debentures | — | 3.5 | ||||||
Unamortized discount on Senior Secured Credit Agreement | (3.2 | ) | (3.6 | ) | ||||
Direct corporate obligations | $ | 827.3 | $ | 856.4 | ||||
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 ($393.0 million remained outstanding at June 30, 2014); (ii) a $250.0 million four-year term loan facility ($162.5 million remained outstanding at June 30, 2014); and (iii) a $50.0 million three-year revolving credit facility, with JPMorgan Chase Bank, N.A., as administrative 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 June 30, 2014, no amounts have been borrowed under the revolving credit facility. | ||||||||
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. | ||||||||
The 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% (such rate was 3.75% at June 30, 2014); (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% (such rate was 3.00% at June 30, 2014); 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. | ||||||||
In the first six months of 2014, we made $26.0 million of scheduled quarterly principal payments due under the Senior Secured Credit Agreement. | ||||||||
On May 30, 2014, the Company completed an amendment to the Senior Secured Credit Agreement to waive the requirement that the net proceeds in excess of $125 million to be received from the sale of CLIC be used to prepay amounts outstanding under the Senior Secured Credit Agreement. In the second quarter of 2014, we recognized expenses related to the amendment of the Senior Secured Credit Agreement totaling $.4 million which are included in the loss on extinguishment or modification of debt. | ||||||||
The amendment to the Senior Secured Credit Agreement did not impact the restrictions set forth in the 6.375% Indenture dated as of September 28, 2012 (the "6.375% Indenture") for the Company’s 6.375% Notes regarding the Company’s use of the proceeds from the sale of CLIC. Under the Indenture, the net proceeds received by the Company from the sale of CLIC (defined as "Net Available Cash" under the Indenture) may be used to: (i) reinvest in or acquire assets to be used in the insurance business or a related business; or (ii) repay the Senior Secured Credit Agreement. Under the Indenture, any Net Available Cash not so reinvested or applied within 365 days after the closing of the sale of CLIC must be used to make an offer to purchase the outstanding notes at par and, in the interim, may only be invested as set forth in the Indenture. The Company currently plans to reinvest the cash received from the sale of CLIC in its business including the payment on July 1, 2014, of $28.0 million to recapture a block of life insurance business from Wilton Re. | ||||||||
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 ("A.M. Best") or (B) the Senior Secured Credit Agreement is rated equal or better than BBB- (stable) from S&P and Baa3 (stable) by Moody's Investor Services, Inc. ("Moody's"). | ||||||||
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 17.6 percent at June 30, 2014); (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 9.81 to 1.00 for the four quarters ended June 30, 2014); (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 437 percent at June 30, 2014); 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 June 30, 2014, was $2,057 million). | ||||||||
6.375% Notes | ||||||||
On September 28, 2012, we issued $275.0 million in aggregate principal amount of 6.375% Notes pursuant to the 6.375% Indenture, among the Company, the subsidiary guarantors party thereto (the "Subsidiary Guarantors") and Wilmington Trust, National Association, as trustee and as 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. | ||||||||
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 June 30, 2014, the Company could have made additional Restricted Payments under this 6.375% Indenture covenant of approximately $178 million as of June 30, 2014. 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%. | ||||||||
7.0% Debentures | ||||||||
On May 30, 2014, we repurchased the remaining $3.5 million principal amount of the 7.0% Debentures for a purchase price of $3.7 million and recognized a loss on the extinguishment of debt of $.2 million. | ||||||||
Scheduled Repayment of our Direct Corporate Obligations | ||||||||
The scheduled repayment of our direct corporate obligations was as follows at June 30, 2014 (dollars in millions): | ||||||||
Year ending June 30, | ||||||||
2015 | $ | 73 | ||||||
2016 | 79.3 | |||||||
2017 | 23 | |||||||
2018 | 4.2 | |||||||
2019 | 376 | |||||||
Thereafter | 275 | |||||||
$ | 830.5 | |||||||
INVESTMENT_BORROWINGS
INVESTMENT BORROWINGS | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Investment Borrowings [Abstract] | ' | ||||||
INVESTMENT BORROWINGS | ' | ||||||
INVESTMENT BORROWINGS | |||||||
Two of the Company's insurance subsidiaries (Washington National Insurance Company ("Washington National") and Bankers Life) are members of the Federal Home Loan Bank ("FHLB"). As members of the FHLB, Washington National and Bankers Life have the ability to borrow on a collateralized basis from the FHLB. 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 June 30, 2014, the carrying value of the FHLB common stock was $73.5 million. As of June 30, 2014, collateralized borrowings from the FHLB totaled $1.5 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 $1.8 billion at June 30, 2014, 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. | |||||||
CLIC was also a member of the FHLB and "Assets of subsidiary being sold" included FHLB common stock of $22.5 million and "Liabilities of subsidiary being sold" included collateralized borrowings of $383.4 million, both as of June 30, 2014. These borrowings are collateralizd by investments with an estimated fair value of $503.9 million included in the "Assets of subsidiary being sold". | |||||||
The following summarizes the terms of the borrowings from the FHLB by Washington National and Bankers Life (dollars in millions): | |||||||
Amount | Maturity | Interest rate at | |||||
borrowed | date | June 30, 2014 | |||||
$ | 50 | Sep-15 | Variable rate – 0.528% | ||||
50 | Oct-15 | Variable rate – 0.502% | |||||
100 | Jun-16 | Variable rate – 0.592% | |||||
75 | Jun-16 | Variable rate – 0.394% | |||||
100 | Oct-16 | Variable rate – 0.412% | |||||
50 | Nov-16 | Variable rate – 0.497% | |||||
50 | Nov-16 | Variable rate – 0.622% | |||||
57.7 | Jun-17 | Variable rate – 0.581% | |||||
50 | Aug-17 | Variable rate – 0.424% | |||||
75 | Aug-17 | Variable rate – 0.377% | |||||
100 | Oct-17 | Variable rate – 0.656% | |||||
50 | Nov-17 | Variable rate – 0.737% | |||||
50 | Jan-18 | Variable rate – 0.578% | |||||
50 | Jan-18 | Variable rate – 0.566% | |||||
50 | Feb-18 | Variable rate – 0.533% | |||||
50 | Feb-18 | Variable rate – 0.315% | |||||
22 | Feb-18 | Variable rate – 0.559% | |||||
100 | May-18 | Variable rate – 0.600% | |||||
50 | Jul-18 | Variable rate – 0.698% | |||||
50 | Aug-18 | Variable rate – 0.344% | |||||
50 | Jan-19 | Variable rate – 0.649% | |||||
50 | Feb-19 | Variable rate – 0.315% | |||||
100 | Mar-19 | Variable rate – 0.634% | |||||
21.8 | Jun-20 | Fixed rate – 1.960% | |||||
27.2 | Mar-23 | Fixed rate – 2.160% | |||||
20.5 | Jun-25 | Fixed rate – 2.940% | |||||
$ | 1,499.20 | ||||||
The following summarizes the terms of the borrowings classified as "Liabilities of subsidiary being sold" (dollars in millions): | |||||||
Amount | Maturity | Interest rate at | |||||
borrowed | date | June 30, 2014 | |||||
$ | 146.4 | Nov-15 | Fixed rate – 5.300% | ||||
100 | Dec-15 | Fixed rate – 4.710% | |||||
100 | Jul-17 | Fixed rate – 3.900% | |||||
37 | Nov-17 | Fixed rate – 3.750% | |||||
$ | 383.4 | ||||||
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 June 30, 2014, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $29.5 million. | |||||||
Interest expense of $13.8 million and $13.6 million in the first six months of 2014 and 2013, respectively, was recognized related to total borrowings from the FHLB. | |||||||
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. Such borrowings totaled $8.4 million at June 30, 2014 and mature prior to June 30, 2015. | |||||||
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. |
CHANGES_IN_COMMON_STOCK
CHANGES IN COMMON STOCK | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||
CHANGES IN COMMON STOCK | ' | |||
CHANGES IN COMMON STOCK | ||||
Changes in the number of shares of common stock outstanding were as follows (shares in thousands): | ||||
Balance, December 31, 2013 | 220,324 | |||
Treasury stock purchased and retired | (7,834 | ) | ||
Stock options exercised | 732 | |||
Restricted and performance stock vested | 533 | (a) | ||
Balance, June 30, 2014 | 213,755 | |||
____________________ | ||||
(a) | Such amount was reduced by 227 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance 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 the first six months of 2014, we repurchased 7.8 million shares of common stock for $136.6 million under the securities repurchase program. The Company had remaining repurchase authority of $260.8 million as of June 30, 2014. | ||||
In the first six months of 2014, dividends declared and paid on common stock totaled $26.3 million ($0.12 per common share). In March 2014, the Company increased its quarterly common stock dividend to $0.06 per share from $0.03 per share. |
SALES_INDUCEMENTS
SALES INDUCEMENTS | 6 Months Ended |
Jun. 30, 2014 | |
Deferred Sales Inducements [Abstract] | ' |
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. Sales inducements deferred totaled $3.1 million and $2.5 million during the six months ended June 30, 2014 and 2013, respectively. Amounts amortized totaled $9.4 million and $13.3 million during the six months ended June 30, 2014 and 2013, respectively. The unamortized balance of deferred sales inducements was $102.3 million (including $33.9 million classified as "Assets of subsidiary being sold") and $108.6 million at June 30, 2014 and December 31, 2013, respectively. The balance of insurance liabilities for persistency bonus benefits was $27.6 million (including $25.7 million classified as "Liabilities of subsidiary being sold") and $28.9 million at June 30, 2014 and December 31, 2013, respectively. |
ASSETS_AND_LIABILITIES_SUBJECT
ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Offsetting [Abstract] | ' | |||||||||||||||||||||||||
ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS | ' | |||||||||||||||||||||||||
ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS | ||||||||||||||||||||||||||
Call options | ||||||||||||||||||||||||||
As further described in the 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 June 30, 2014 or December 31, 2013. 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 June 30, 2014 and December 31, 2013 (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 | |||||||||||||||||||||
June 30, 2014: | ||||||||||||||||||||||||||
Call Options (a) | $ | 130.7 | $ | — | $ | 130.7 | $ | — | $ | — | $ | 130.7 | ||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||||
Call Options | 156.2 | — | 156.2 | — | — | 156.2 | ||||||||||||||||||||
___________________________ | ||||||||||||||||||||||||||
(a) Includes $4.3 million classified as "Assets of subsidiary being sold". | ||||||||||||||||||||||||||
Repurchase agreements | ||||||||||||||||||||||||||
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. | ||||||||||||||||||||||||||
The following table summarizes information related to repurchase agreements as of June 30, 2014 (dollars in millions): | ||||||||||||||||||||||||||
Gross amounts not offset in the balance sheet | ||||||||||||||||||||||||||
Gross amounts of recognized liabilities | Gross amounts offset in the balance sheet | Net amounts of liabilities presented in the balance sheet | Financial instruments | Cash collateral pledged | Net amount | |||||||||||||||||||||
June 30, 2014: | ||||||||||||||||||||||||||
Repurchase agreements (a) | $ | 8.4 | $ | — | $ | 8.4 | $ | — | $ | — | $ | 8.4 | ||||||||||||||
_________________ | ||||||||||||||||||||||||||
(a) | As of June 30, 2014, these agreements were collateralized by investment securities with a fair value of $10.5 million. There were no repurchase agreements outstanding at December 31, 2013. |
RECENTLY_ISSUED_ACCOUNTING_STA
RECENTLY ISSUED ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
RECENTLY ISSUED ACCOUNTING STANDARDS | ' |
RECENTLY ISSUED ACCOUNTING STANDARDS | |
Pending Accounting Standards | |
In April 2014, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance changing the criteria for reporting discontinued operations. Under the revised guidance, only disposals of a component or a group of components, including those classified as held for sale, which represent a strategic shift that has or will have a major effect on a company's operations and financial results will be reported as discontinued operations. The guidance is effective prospectively for new disposals occurring after January 1, 2015. | |
In May 2014, the FASB issued authoritative guidance for recognizing revenue from contracts with customers. Certain contracts with customers are specifically excluded from this guidance, including insurance contracts. The core principle of the new guidance is that an entity should recognize revenue when it transfers promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance will be effective for the Company on January 1, 2017 and permits two methods of transition upon adoption; full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing for comparability in all periods presented. Under the modified retrospective method, prior periods would not be restated. Instead, revenues and other disclosures for pre-2017 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. The Company is currently assessing the impact the guidance will have upon adoption. | |
In June 2014, the FASB issued authoritative guidance on the accounting and disclosure of repurchase-to-maturity transactions and repurchase financings. Under this new accounting guidance, repurchase-to-maturity transactions will be accounted for as secured borrowings rather than sales of an asset, and transfers of financial assets with a contemporaneous repurchase financing arrangement will no longer be evaluated to determine whether they should be accounted for on a combined basis as forward contracts. The new guidance also prescribes additional disclosures particularly on the nature of collateral pledged in the repurchase agreement accounted for as a secured borrowing. The new guidance is effective beginning on January 1, 2015. The Company is currently assessing the impact the guidance will have upon adoption. | |
Adopted Accounting Standards | |
In July 2013, the FASB issued authoritative guidance regarding the financial statement presentation of an unrecognized tax benefit when a NOL 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 NOL 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 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
LITIGATION_AND_OTHER_LEGAL_PRO
LITIGATION AND OTHER LEGAL PROCEEDINGS | 6 Months Ended |
Jun. 30, 2014 | |
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, CLIC 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 CLIC. With the completion of the sale of CLIC on July 1, 2014, our consolidated financial statements will no longer include CLIC's liability related to this litigation in future periods. | |
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. |
CONSOLIDATED_STATEMENT_CASH_FL
CONSOLIDATED STATEMENT CASH FLOWS | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
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): | ||||||||
Six months ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (149.9 | ) | $ | 89 | |||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Amortization and depreciation | 146.2 | 172.6 | ||||||
Income taxes | 92.7 | 57.4 | ||||||
Insurance liabilities | 155.2 | 205.3 | ||||||
Accrual and amortization of investment income | (77.5 | ) | (125.0 | ) | ||||
Deferral of policy acquisition costs | (116.9 | ) | (107.2 | ) | ||||
Net realized investment gains | (35.8 | ) | (18.5 | ) | ||||
Payment to reinsurer pursuant to long-term care business reinsured | (590.3 | ) | — | |||||
Loss on sale of subsidiary | 278.6 | — | ||||||
Gain related to reinsurance transaction | (3.8 | ) | — | |||||
Loss on extinguishment or modification of debt | 0.6 | 65.4 | ||||||
Other | (14.0 | ) | (49.1 | ) | ||||
Net cash from operating activities | $ | (314.9 | ) | (a) | $ | 289.9 | ||
______________________ | ||||||||
(a) | Cash flows from operating activities reflect outflows in the 2014 period due to the payment to reinsurer to transfer certain long-term care business. | |||||||
Non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions): | ||||||||
Six months ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Stock options, restricted stock and performance units | $ | 8.1 | $ | 7.2 | ||||
INVESTMENTS_IN_VARIABLE_INTERE
INVESTMENTS IN VARIABLE INTEREST ENTITIES | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
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. 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 two new VIEs which were consolidated in 2014). 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 Company has no financial obligation to the VIEs beyond its investment in each VIE. | ||||||||||||
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): | ||||||||||||
June 30, 2014 | ||||||||||||
VIEs | Eliminations | Net effect on | ||||||||||
consolidated | ||||||||||||
balance sheet | ||||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 1,241.10 | $ | — | $ | 1,241.10 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | — | (116.0 | ) | (116.0 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 101.8 | — | 101.8 | |||||||||
Accrued investment income | 2.5 | — | 2.5 | |||||||||
Income tax assets, net | 6.8 | (2.2 | ) | 4.6 | ||||||||
Other assets | 14.2 | (.9 | ) | 13.3 | ||||||||
Total assets | $ | 1,366.40 | $ | (119.1 | ) | $ | 1,247.30 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 148.2 | $ | (3.2 | ) | $ | 145 | |||||
Borrowings related to variable interest entities | 1,110.80 | — | 1,110.80 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 120.1 | (120.1 | ) | — | ||||||||
Total liabilities | $ | 1,379.10 | $ | (123.3 | ) | $ | 1,255.80 | |||||
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 | |||||
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 June 30, 2014, such loans had an amortized cost of $1,241.5 million; gross unrealized gains of $3.3 million; gross unrealized losses of $3.7 million; and an estimated fair value of $1,241.1 million. | ||||||||||||
The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at June 30, 2014, 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 | 353.8 | 354.1 | ||||||||||
Due after five years through ten years | 884.9 | 884.2 | ||||||||||
Total | $ | 1,241.50 | $ | 1,241.10 | ||||||||
During the first six months of 2014, we recognized net realized investment losses on the VIE investments of $2.0 million. During the first six months of 2013, we recognized net realized investment losses on the VIE investments of $.3 million, which were comprised of $.3 million of net gains from the sales of fixed maturities, and $.6 million of writedowns of investments for other than temporary declines in fair value recognized through net income. | ||||||||||||
At June 30, 2014, there were no investments held by the VIEs that were in default. | ||||||||||||
During the first six months of 2014, $21.3 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $2.1 million. During the first six months of 2013, no investments held by the VIEs were sold which resulted in gross investment losses. | ||||||||||||
At June 30, 2014, the VIEs held: (i) investments with a fair value of $470.8 million and gross unrealized losses of $2.2 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $157.2 million and gross unrealized losses of $1.5 million that had been in an unrealized loss position for greater than twelve months. | ||||||||||||
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 gross unrealized losses of less than $.1 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 June 30, 2014, we held investments in various limited partnerships, in which we are not the primary beneficiary, totaling $24.6 million (classified as other invested assets). At June 30, 2014, we had unfunded commitments to these partnerships of $99.5 million. Our maximum exposure to loss on these investments is limited to the amount of our investment. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended | ||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||||||||||||||
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 both the first six months of 2014 and 2013. | |||||||||||||||||||||||||||||||||||||
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 43 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 June 30, 2014 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 | $ | — | $ | 13,491.80 | $ | 389.8 | $ | 13,881.60 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 160.1 | — | 160.1 | |||||||||||||||||||||||||||||||||
States and political subdivisions | — | 2,122.20 | 28.7 | 2,150.90 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 1,273.40 | 52.7 | 1,326.10 | |||||||||||||||||||||||||||||||||
Collateralized debt obligations | — | 310 | 14.2 | 324.2 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,266.20 | — | 1,266.20 | |||||||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 7.6 | 1.3 | 8.9 | |||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 1,415.50 | 0.1 | 1,415.60 | |||||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 20,046.80 | 486.8 | 20,533.60 | |||||||||||||||||||||||||||||||||
Equity securities - corporate securities | 52.9 | 208.4 | 26.2 | 287.5 | |||||||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||||
Corporate securities | — | 23.8 | — | 23.8 | |||||||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.2 | — | 4.2 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 20.9 | — | 20.9 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 146.6 | — | 146.6 | |||||||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 23.9 | 5.9 | 29.8 | |||||||||||||||||||||||||||||||||
Equity securities | 2 | — | — | 2 | |||||||||||||||||||||||||||||||||
Total trading securities | 2 | 219.5 | 5.9 | 227.4 | |||||||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 1,241.10 | — | 1,241.10 | |||||||||||||||||||||||||||||||||
Other invested assets - derivatives | 0.9 | 126.4 | — | 127.3 | |||||||||||||||||||||||||||||||||
Assets held in separate accounts | — | 9.4 | — | 9.4 | |||||||||||||||||||||||||||||||||
Assets of subsidiary being sold | — | 3,458.60 | 63.1 | 3,521.70 | |||||||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 55.8 | $ | 25,310.20 | $ | 582 | $ | 25,948.00 | |||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | $ | — | $ | — | $ | 980.3 | $ | 980.3 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 980.3 | 980.3 | |||||||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 980.3 | $ | 980.3 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||||||
Alternative investment funds 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. | |||||||||||||||||||||||||||||||||||||
Assets of subsidiary being sold include mortgage loans, policy loans, and cash and cash equivalents. The estimated fair value of these financial instruments is determined in the same manner as described above. | |||||||||||||||||||||||||||||||||||||
Liabilities of subsidiary being sold include liabilities for policyholder account balances and investment borrowings. The estimated fair value of these financial instruments is determined in the same manner as described above. | |||||||||||||||||||||||||||||||||||||
The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||||||||||||||
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 | $ | — | $ | — | $ | 1,647.10 | $ | 1,647.10 | $ | 1,595.90 | |||||||||||||||||||||||||||
Policy loans | — | — | 99.7 | 99.7 | 99.7 | ||||||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 149.4 | — | 149.4 | 149.4 | ||||||||||||||||||||||||||||||||
Alternative investment funds | — | 86.6 | — | 86.6 | 86.6 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||||||
Unrestricted | 167.8 | 211 | — | 378.8 | 378.8 | ||||||||||||||||||||||||||||||||
Held by variable interest entities | 101.8 | — | — | 101.8 | 101.8 | ||||||||||||||||||||||||||||||||
Assets of subsidiary being sold | 164.7 | — | 351 | 515.7 | 503.8 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 10,649.70 | 10,649.70 | 10,649.70 | ||||||||||||||||||||||||||||||||
Investment borrowings | — | 1,507.00 | — | 1,507.00 | 1,507.60 | ||||||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 955.9 | — | 955.9 | 1,110.80 | ||||||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 852.4 | — | 852.4 | 827.3 | ||||||||||||||||||||||||||||||||
Liabilities of subsidiary being sold | — | 412.9 | 2,070.00 | 2,482.90 | 2,453.40 | ||||||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
Alternative investment 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 | ||||||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||
(a) | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at June 30, 2014 and December 31, 2013. 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 three months ended June 30, 2014 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||||||||||||||
Beginning balance as of March 31, 2014 | 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 (a) | Transfers out of Level 3 (a) | Ending balance as of June 30, 2014 | Amount of total gains (losses) for the three months ended June 30, 2014 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 | $ | 336.8 | $ | 47.7 | $ | — | $ | 4 | $ | 16.3 | $ | (15.0 | ) | $ | 389.8 | $ | — | ||||||||||||||||||||
States and political subdivisions | — | — | — | 0.7 | 28 | — | 28.7 | — | |||||||||||||||||||||||||||||
Asset-backed securities | 42.2 | (.5 | ) | — | 1.1 | 9.9 | — | 52.7 | — | ||||||||||||||||||||||||||||
Collateralized debt obligations | 14.1 | (.1 | ) | — | 0.2 | — | — | 14.2 | — | ||||||||||||||||||||||||||||
Mortgage pass-through securities | 0.4 | 0.9 | — | — | — | — | 1.3 | — | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | — | — | (.1 | ) | 0.2 | — | 0.1 | — | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 393.5 | 48 | — | 5.9 | 54.4 | (15.0 | ) | 486.8 | — | ||||||||||||||||||||||||||||
Equity securities - corporate securities | 25.4 | 0.8 | — | — | — | — | 26.2 | — | |||||||||||||||||||||||||||||
Trading securities - collateralized mortgage obligations | 5.9 | — | — | — | — | — | 5.9 | — | |||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (930.8 | ) | (38.7 | ) | (10.8 | ) | — | — | — | (980.3 | ) | (10.8 | ) | ||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (3.4 | ) | 3.4 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Total liabilities for insurance products | (934.2 | ) | (35.3 | ) | (10.8 | ) | — | — | — | (980.3 | ) | (10.8 | ) | ||||||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 three months ended June 30, 2014 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 51 | $ | (3.3 | ) | $ | — | $ | — | $ | 47.7 | ||||||||||||||||||||||||||
Asset-backed securities | — | (.5 | ) | — | — | (.5 | ) | ||||||||||||||||||||||||||||||
Collateralized debt obligations | — | (.1 | ) | — | — | (.1 | ) | ||||||||||||||||||||||||||||||
Mortgage pass-through securities | 1.1 | (.2 | ) | — | — | 0.9 | |||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 52.1 | (4.1 | ) | — | — | 48 | |||||||||||||||||||||||||||||||
Equity securities - corporate securities | 0.8 | — | — | — | 0.8 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (31.1 | ) | 0.5 | (22.5 | ) | 14.4 | (38.7 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.4 | — | — | 3.4 | ||||||||||||||||||||||||||||||||
Total liabilities for insurance products | (31.1 | ) | 3.9 | (22.5 | ) | 14.4 | (35.3 | ) | |||||||||||||||||||||||||||||
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 six months ended June 30, 2014 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2013 | 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 (a) | Transfers out of Level 3 (a) | Amounts classified as Assets of subsidiary being sold | Ending balance as of June 30, 2014 | Amount of total gains (losses) for the six months ended June 30, 2014 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 | $ | 359.6 | $ | 41.2 | $ | — | $ | 13.4 | $ | 26.8 | $ | — | $ | (51.2 | ) | $ | 389.8 | $ | — | ||||||||||||||||||
States and political subdivisions | — | — | — | 2 | 28.9 | — | (2.2 | ) | 28.7 | — | |||||||||||||||||||||||||||
Asset-backed securities | 42.2 | 9 | — | 3.3 | 7.9 | — | (9.7 | ) | 52.7 | — | |||||||||||||||||||||||||||
Collateralized debt obligations | 246.7 | (4.4 | ) | — | — | 12.6 | (240.7 | ) | — | 14.2 | — | ||||||||||||||||||||||||||
Mortgage pass-through securities | 1.6 | (.3 | ) | — | — | — | — | — | 1.3 | — | |||||||||||||||||||||||||||
Collateralized mortgage obligations | — | — | — | — | 0.1 | — | — | 0.1 | — | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 650.1 | 45.5 | — | 18.7 | 76.3 | (240.7 | ) | (63.1 | ) | 486.8 | — | ||||||||||||||||||||||||||
Equity securities - corporate securities | 24.5 | 1.7 | — | — | — | — | — | 26.2 | — | ||||||||||||||||||||||||||||
Trading securities - collateralized mortgage obligations | — | — | — | 0.1 | 5.8 | — | — | 5.9 | 0.1 | ||||||||||||||||||||||||||||
Assets of subsidiary being sold | — | — | — | — | — | — | 63.1 | 63.1 | — | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (903.7 | ) | (49.8 | ) | (26.8 | ) | — | — | — | — | (980.3 | ) | (26.8 | ) | |||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (1.8 | ) | 1.8 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total liabilities for insurance products | (905.5 | ) | (48.0 | ) | (26.8 | ) | — | — | — | — | (980.3 | ) | (26.8 | ) | |||||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 six months ended June 30, 2014 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 51 | $ | (9.8 | ) | $ | — | $ | — | $ | 41.2 | ||||||||||||||||||||||||||
Asset-backed securities | 9.9 | (.9 | ) | — | — | 9 | |||||||||||||||||||||||||||||||
Collateralized debt obligations | 0.9 | (5.3 | ) | — | — | (4.4 | ) | ||||||||||||||||||||||||||||||
Mortgage pass-through securities | 1.1 | (1.4 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 62.9 | (17.4 | ) | — | — | 45.5 | |||||||||||||||||||||||||||||||
Equity securities - corporate securities | 1.7 | — | — | — | 1.7 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (57.7 | ) | 3.6 | (24.6 | ) | 28.9 | (49.8 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.4 | (1.6 | ) | — | 1.8 | |||||||||||||||||||||||||||||||
Total liabilities for insurance products | (57.7 | ) | 7 | (26.2 | ) | 28.9 | (48.0 | ) | |||||||||||||||||||||||||||||
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 three months ended June 30, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2013 | |||||||||||||||||||||||||||||||||||||
Beginning balance as of March 31, 2013 | 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 (a) | Transfers out of Level 3 (a) | Ending balance as of June 30, 2013 | Amount of total gains (losses) for the three months ended June 30, 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 | $ | 356.3 | $ | 2.2 | $ | (.3 | ) | $ | (9.6 | ) | $ | 44.5 | $ | — | $ | 393.1 | $ | — | |||||||||||||||||||
States and political subdivisions | 15 | — | — | — | — | (15.0 | ) | — | — | ||||||||||||||||||||||||||||
Asset-backed securities | 46.6 | (.2 | ) | — | (2.5 | ) | 2 | (.5 | ) | 45.4 | — | ||||||||||||||||||||||||||
Collateralized debt obligations | 309.7 | (33.7 | ) | (.1 | ) | 0.9 | 10.8 | — | 287.6 | — | |||||||||||||||||||||||||||
Commercial mortgage-backed securities | 3.8 | (.5 | ) | — | — | — | — | 3.3 | — | ||||||||||||||||||||||||||||
Mortgage pass-through securities | 1.8 | — | — | — | — | — | 1.8 | — | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | 36.6 | — | — | — | — | (36.5 | ) | 0.1 | — | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 769.8 | (32.2 | ) | (.4 | ) | (11.2 | ) | 57.3 | (52.0 | ) | 731.3 | — | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | — | — | — | — | — | 0.1 | — | |||||||||||||||||||||||||||||
Venture capital investments | 3.1 | — | — | — | — | — | 3.1 | — | |||||||||||||||||||||||||||||
Total equity securities | 3.2 | — | — | — | — | — | 3.2 | — | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 5.7 | — | — | (.1 | ) | 4.8 | — | 10.4 | — | ||||||||||||||||||||||||||||
Total trading securities | 6.3 | — | — | (.1 | ) | 4.8 | (.6 | ) | 10.4 | — | |||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (794.3 | ) | (32.7 | ) | 30.7 | — | — | — | (796.3 | ) | 30.7 | ||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.1 | ) | 2.5 | — | — | — | — | (2.6 | ) | — | |||||||||||||||||||||||||||
Total liabilities for insurance products | (799.4 | ) | (30.2 | ) | 30.7 | — | — | — | (798.9 | ) | 30.7 | ||||||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 three months ended June 30, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 10 | $ | (7.8 | ) | $ | — | $ | — | $ | 2.2 | ||||||||||||||||||||||||||
Asset-backed securities | — | (.2 | ) | — | — | (.2 | ) | ||||||||||||||||||||||||||||||
Collateralized debt obligations | — | (33.7 | ) | — | — | (33.7 | ) | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (.5 | ) | — | — | (.5 | ) | ||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 10 | (42.2 | ) | — | — | (32.2 | ) | ||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (27.7 | ) | — | (14.0 | ) | 9 | (32.7 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 2.5 | — | — | 2.5 | ||||||||||||||||||||||||||||||||
Total liabilities for insurance products | (27.7 | ) | 2.5 | (14.0 | ) | 9 | (30.2 | ) | |||||||||||||||||||||||||||||
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 six months ended June 30, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 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 (a) | Transfers out of Level 3 (a) | Ending balance as of June 30, 2013 | Amount of total gains (losses) for the six months ended June 30, 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 | $ | 63.6 | $ | (.3 | ) | $ | (13.4 | ) | $ | — | $ | (12.3 | ) | $ | 393.1 | $ | — | ||||||||||||||||||
States and political subdivisions | 13.1 | — | — | — | — | (13.1 | ) | — | — | ||||||||||||||||||||||||||||
Asset-backed securities | 44 | 7.2 | — | (3.3 | ) | 2 | (4.5 | ) | 45.4 | — | |||||||||||||||||||||||||||
Collateralized debt obligations | 324 | (42.0 | ) | 0.1 | 5.5 | — | — | 287.6 | — | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 6.2 | (.7 | ) | — | 0.1 | — | (2.3 | ) | 3.3 | — | |||||||||||||||||||||||||||
Mortgage pass-through securities | 1.9 | (.1 | ) | — | — | — | — | 1.8 | — | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 16.9 | (.1 | ) | — | — | — | (16.7 | ) | 0.1 | — | |||||||||||||||||||||||||||
Total fixed maturities, available for sale | 761.6 | 27.9 | (.2 | ) | (11.1 | ) | 2 | (48.9 | ) | 731.3 | — | ||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | — | — | — | — | — | 0.1 | — | |||||||||||||||||||||||||||||
Venture capital investments | 2.8 | — | — | 0.3 | — | — | 3.1 | — | |||||||||||||||||||||||||||||
Total equity securities | 2.9 | — | — | 0.3 | — | — | 3.2 | — | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||||||
Collateralized debt obligations | 7.3 | (7.7 | ) | 0.6 | (.2 | ) | — | — | — | — | |||||||||||||||||||||||||||
Collateralized mortgage obligations | 5.8 | — | — | (.3 | ) | 4.9 | — | 10.4 | — | ||||||||||||||||||||||||||||
Total trading securities | 13.7 | (7.7 | ) | 0.6 | (.5 | ) | 4.9 | (.6 | ) | 10.4 | — | ||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (734.0 | ) | (95.8 | ) | 33.5 | — | — | — | (796.3 | ) | 33.5 | ||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.5 | ) | 2.9 | — | — | — | — | (2.6 | ) | — | |||||||||||||||||||||||||||
Total liabilities for insurance products | (739.5 | ) | (92.9 | ) | 33.5 | — | — | — | (798.9 | ) | 33.5 | ||||||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 six months ended June 30, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 71.5 | $ | (7.9 | ) | $ | — | $ | — | $ | 63.6 | ||||||||||||||||||||||||||
Asset-backed securities | 7.6 | (.4 | ) | — | — | 7.2 | |||||||||||||||||||||||||||||||
Collateralized debt obligations | 13.3 | (55.3 | ) | — | — | (42.0 | ) | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (.7 | ) | — | — | (.7 | ) | ||||||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.1 | ) | — | — | (.1 | ) | ||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | (.1 | ) | — | — | (.1 | ) | ||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 92.4 | (64.5 | ) | — | — | 27.9 | |||||||||||||||||||||||||||||||
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 | (52.8 | ) | 1.4 | (64.2 | ) | 19.8 | (95.8 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 2.9 | — | — | 2.9 | ||||||||||||||||||||||||||||||||
Total liabilities for insurance products | (52.8 | ) | 4.3 | (64.2 | ) | 19.8 | (92.9 | ) | |||||||||||||||||||||||||||||
At June 30, 2014, 81 percent of our Level 3 fixed maturities, available for sale, were investment grade and 3 percent and 80 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 June 30, 2014 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
Fair value at June 30, 2014 | Valuation technique(s) | Unobservable inputs | Range (weighted average) | ||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Corporate securities (a) | $ | 254.5 | Discounted cash flow analysis | Discount margins | 1.50% - 5.00% (2.44%) | ||||||||||||||||||||||||||||||||
Asset-backed securities (b) | 29.1 | Discounted cash flow analysis | Discount margins | 1.72% - 4.30% (2.81%) | |||||||||||||||||||||||||||||||||
Other assets categorized as Level 3 (c) | 235.3 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||||||
Assets of subsidiary being sold: | |||||||||||||||||||||||||||||||||||||
Corporate securities (a) | 19.1 | Discounted cash flow analysis | Discount margins | 1.50% - 2.45% (1.96%) | |||||||||||||||||||||||||||||||||
Asset-backed securities (b) | 8.7 | Discounted cash flow analysis | Discount margins | 3.50% | |||||||||||||||||||||||||||||||||
Other assets categorized as Level 3 (c) | 35.3 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||||||
Total | 582 | ||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products (d) | 980.3 | Discounted projected embedded derivatives | Projected portfolio yields | 5.35% - 6.63% (5.60%) | |||||||||||||||||||||||||||||||||
Discount rates | 0.00 - 3.78% (2.04%) | ||||||||||||||||||||||||||||||||||||
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) | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | ||||||||||||||||||||||||||||||||||||
(d) | 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, 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. |
FAIR_VALUE_MEASUREMENTS_Polici
FAIR VALUE MEASUREMENTS (Policies) | 6 Months Ended | |
Jun. 30, 2014 | ||
Fair Value Disclosures [Abstract] | ' | |
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 both the first six months of 2014 and 2013. | ||
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 43 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. | ||
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. | ||
Alternative investment funds 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. | ||
Assets of subsidiary being sold include mortgage loans, policy loans, and cash and cash equivalents. The estimated fair value of these financial instruments is determined in the same manner as described above. | ||
Liabilities of subsidiary being sold include liabilities for policyholder account balances and investment borrowings. The estimated fair value of these financial instruments is determined in the same manner as described above. | ||
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. |
AGREEMENT_TO_SELL_SUBSIDIARY_T
AGREEMENT TO SELL SUBSIDIARY (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||
Schedule of Carrying Amount of CLIC Business Being Sold | ' | ||||
The following summarizes the assets and liabilities held for sale as of June 30, 2014 (dollars in millions): | |||||
June 30, 2014 | |||||
Investments | $ | 3,863.80 | |||
Cash and cash equivalents - unrestricted | 164.7 | ||||
Accrued investment income | 42.7 | ||||
Present value of future profits | 15.5 | ||||
Deferred acquisition costs | 37.6 | ||||
Reinsurance receivables | 307.4 | ||||
Income tax assets, net | 84.4 | ||||
Other assets | 2.8 | ||||
Assets of subsidiary being sold | $ | 4,518.90 | |||
Liabilities for insurance products | $ | 3,201.30 | |||
Other liabilities | 199.1 | ||||
Investment borrowings | 383.4 | ||||
Loss accrual | 514.5 | ||||
Liabilities of subsidiary being sold | $ | 4,298.30 | |||
As the carrying amount of the CLIC business being sold exceeded its costs to sell, we have recognized a loss on the sale of CLIC in the six months ended June 30, 2014, as summarized below (dollars in millions): | |||||
Net cash proceeds | $ | 216 | |||
Net assets being sold: | |||||
Investments | 3,863.80 | ||||
Cash and cash equivalents | 164.7 | ||||
Accrued investment income | 42.7 | ||||
Present value of future profits | 15.5 | ||||
Deferred acquisition costs | 37.6 | ||||
Reinsurance receivables | 307.4 | ||||
Income tax assets, net | 84.4 | ||||
Other assets | 2.8 | ||||
Liabilities for insurance products | (3,201.3 | ) | |||
Other liabilities | (199.1 | ) | |||
Investment borrowings | (383.4 | ) | |||
Accumulated other comprehensive income | (240.5 | ) | |||
Net assets being sold | 494.6 | ||||
Loss before taxes | (278.6 | ) | |||
Tax expense related to tax gain on sale | 21.6 | ||||
Previously unrecognized tax benefit now recognized as a result of the gain | (7.4 | ) | |||
Valuation allowance release related to the gain | (14.2 | ) | |||
Valuation allowance increase related to the decrease in projected future taxable income | 19.4 | ||||
Net loss | $ | (298.0 | ) |
INVESTMENTS_TABLES
INVESTMENTS (TABLES) | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||
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 June 30, 2014 and December 31, 2013, were as follows (dollars in millions): | |||||||||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ | 8.5 | $ | 6.5 | |||||||||||||||||||||
Net unrealized gains on all other investments | 2,157.80 | 1,322.60 | |||||||||||||||||||||||
Adjustment to present value of future profits (a) | (157.6 | ) | (47.7 | ) | |||||||||||||||||||||
Adjustment to deferred acquisition costs | (395.5 | ) | (137.0 | ) | |||||||||||||||||||||
Adjustment to insurance liabilities | (168.1 | ) | — | ||||||||||||||||||||||
Unrecognized net loss related to deferred compensation plan | (6.4 | ) | (7.1 | ) | |||||||||||||||||||||
Deferred income tax liabilities | (512.6 | ) | (405.5 | ) | |||||||||||||||||||||
Accumulated other comprehensive income | $ | 926.1 | $ | 731.8 | |||||||||||||||||||||
________ | |||||||||||||||||||||||||
(a) | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003 (the date Conseco, Inc., an Indiana corporation (our "Predecessor"), emerged from bankruptcy. | ||||||||||||||||||||||||
Schedule of fixed maturities for available for sale and equity securities | ' | ||||||||||||||||||||||||
At June 30, 2014, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions): | |||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Other-than-temporary impairments included in accumulated other comprehensive income | |||||||||||||||||||||
Corporate securities | $ | 12,217.40 | $ | 1,688.00 | $ | (23.8 | ) | $ | 13,881.60 | $ | — | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 149.6 | 10.7 | (.2 | ) | 160.1 | — | |||||||||||||||||||
States and political subdivisions | 1,944.30 | 212.9 | (6.3 | ) | 2,150.90 | — | |||||||||||||||||||
Asset-backed securities | 1,244.50 | 84.2 | (2.6 | ) | 1,326.10 | — | |||||||||||||||||||
Collateralized debt obligations | 319.9 | 5.2 | (.9 | ) | 324.2 | — | |||||||||||||||||||
Commercial mortgage-backed securities | 1,173.90 | 92.5 | (.2 | ) | 1,266.20 | — | |||||||||||||||||||
Mortgage pass-through securities | 8.4 | 0.5 | — | 8.9 | — | ||||||||||||||||||||
Collateralized mortgage obligations | 1,325.80 | 90.7 | (.9 | ) | 1,415.60 | (3.7 | ) | ||||||||||||||||||
Total fixed maturities, available for sale | $ | 18,383.80 | $ | 2,184.70 | $ | (34.9 | ) | $ | 20,533.60 | $ | (3.7 | ) | |||||||||||||
Fixed maturities of CLIC being sold | $ | 3,470.70 | $ | — | $ | — | $ | 3,470.70 | $ | — | |||||||||||||||
Schedule of investments classified by contractual maturity date | ' | ||||||||||||||||||||||||
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 | $ | 164.7 | $ | 169.5 | |||||||||||||||||||||
Due after one year through five years | 1,762.10 | 1,957.60 | |||||||||||||||||||||||
Due after five years through ten years | 2,906.40 | 3,192.20 | |||||||||||||||||||||||
Due after ten years | 9,478.10 | 10,873.30 | |||||||||||||||||||||||
Subtotal | 14,311.30 | 16,192.60 | |||||||||||||||||||||||
Structured securities | 4,072.50 | 4,341.00 | |||||||||||||||||||||||
Total fixed maturities, available for sale | $ | 18,383.80 | $ | 20,533.60 | |||||||||||||||||||||
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): | |||||||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Fixed maturity securities, available for sale: | |||||||||||||||||||||||||
Gross realized gains on sale | $ | 4.9 | $ | 10.8 | $ | 46.4 | $ | 27.4 | |||||||||||||||||
Gross realized losses on sale | (3.0 | ) | (1.4 | ) | (8.5 | ) | (3.4 | ) | |||||||||||||||||
Impairments: | |||||||||||||||||||||||||
Total other-than-temporary impairment losses | — | — | — | — | |||||||||||||||||||||
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | — | |||||||||||||||||||||
Net impairment losses recognized | — | — | — | — | |||||||||||||||||||||
Net realized investment gains from fixed maturities | 1.9 | 9.4 | 37.9 | 24 | |||||||||||||||||||||
Equity securities | 7.9 | — | 7.9 | — | |||||||||||||||||||||
Commercial mortgage loans | 1.1 | — | 1.1 | 0.7 | |||||||||||||||||||||
Impairments of mortgage loans and other investments | — | (.6 | ) | (11.9 | ) | (.6 | ) | ||||||||||||||||||
Other | 1.5 | (5.6 | ) | 0.8 | (5.6 | ) | |||||||||||||||||||
Net realized investment gains | $ | 12.4 | $ | 3.2 | $ | 35.8 | $ | 18.5 | |||||||||||||||||
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 three and six months ended June 30, 2014, and 2013 (dollars in millions): | |||||||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ | (1.3 | ) | $ | (1.5 | ) | $ | (1.3 | ) | $ | (1.6 | ) | |||||||||||||
Add: credit losses on other-than-temporary impairments not previously recognized | — | — | — | — | |||||||||||||||||||||
Less: credit losses on securities sold | 0.1 | — | 0.1 | 0.1 | |||||||||||||||||||||
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 | $ | (1.2 | ) | $ | (1.5 | ) | $ | (1.2 | ) | $ | (1.5 | ) | |||||||||||||
__________ | |||||||||||||||||||||||||
(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 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 June 30, 2014 (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 | $ | — | $ | — | $ | 18.4 | $ | (.2 | ) | $ | 18.4 | $ | (.2 | ) | |||||||||||
States and political subdivisions | 15.6 | (.6 | ) | 124.1 | (5.7 | ) | 139.7 | (6.3 | ) | ||||||||||||||||
Corporate securities | 173.3 | (1.1 | ) | 423.2 | (22.7 | ) | 596.5 | (23.8 | ) | ||||||||||||||||
Asset-backed securities | 76.9 | (.5 | ) | 91.5 | (2.1 | ) | 168.4 | (2.6 | ) | ||||||||||||||||
Collateralized debt obligations | 64.2 | (.7 | ) | 11.7 | (.2 | ) | 75.9 | (.9 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 14.8 | — | 19.2 | (.2 | ) | 34 | (.2 | ) | |||||||||||||||||
Mortgage pass-through securities | 1.2 | — | 0.8 | — | 2 | — | |||||||||||||||||||
Collateralized mortgage obligations | 82.4 | (.4 | ) | 20.6 | (.5 | ) | 103 | (.9 | ) | ||||||||||||||||
Total fixed maturities, available for sale | $ | 428.4 | $ | (3.3 | ) | $ | 709.5 | $ | (31.6 | ) | $ | 1,137.90 | $ | (34.9 | ) | ||||||||||
Preferred stock | $ | 34.3 | $ | (.4 | ) | $ | 20.3 | $ | (.9 | ) | $ | 54.6 | $ | (1.3 | ) | ||||||||||
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 | ) | ||||||||||
Preferred stock | $ | 26.8 | $ | (4.9 | ) | $ | — | $ | — | $ | 26.8 | $ | (4.9 | ) | |||||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
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): | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) for basic earnings per share | $ | 78.1 | $ | 77.1 | $ | (149.9 | ) | $ | 89 | |||||||
Add: interest expense on 7.0% Senior Debentures due 2016 (the "7.0% Debentures"), net of income taxes | — | 0.4 | — | 1.6 | ||||||||||||
Net income (loss) for diluted earnings per share | $ | 78.1 | $ | 77.5 | $ | (149.9 | ) | $ | 90.6 | |||||||
Shares: | ||||||||||||||||
Weighted average shares outstanding for basic earnings per share | 216,538 | 220,498 | 218,422 | 221,290 | ||||||||||||
Effect of dilutive securities on weighted average shares: | ||||||||||||||||
7.0% Debentures | — | 5,692 | — | 11,141 | ||||||||||||
Stock options, restricted stock and performance units | 2,390 | 2,412 | — | 2,620 | ||||||||||||
Warrants | 3,180 | 2,291 | — | 2,129 | ||||||||||||
Dilutive potential common shares | 5,570 | 10,395 | — | 15,890 | ||||||||||||
Weighted average shares outstanding for diluted earnings per share | 222,108 | 230,893 | 218,422 | 237,180 | ||||||||||||
BUSINESS_SEGMENTS_TABLES
BUSINESS SEGMENTS (TABLES) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of segment reporting information by segment | ' | |||||||||||||||
Operating information by segment was as follows (dollars in millions): | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues: | ||||||||||||||||
Bankers Life: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Annuities | $ | 7.7 | $ | 8.6 | $ | 15.2 | $ | 16.5 | ||||||||
Health | 320.5 | 334.1 | 651 | 666.7 | ||||||||||||
Life | 79.9 | 76.4 | 158.2 | 153.9 | ||||||||||||
Net investment income (a) | 247.6 | 226.6 | 472 | 488.3 | ||||||||||||
Fee revenue and other income (a) | 5.8 | 4 | 11.1 | 7.7 | ||||||||||||
Total Bankers Life revenues | 661.5 | 649.7 | 1,307.50 | 1,333.10 | ||||||||||||
Washington National: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Annuities | 1.4 | 1.7 | 2.4 | 3.2 | ||||||||||||
Health | 148.8 | 145.8 | 297.7 | 291.2 | ||||||||||||
Life | 6.5 | 5.6 | 12.2 | 11.6 | ||||||||||||
Net investment income (a) | 71.8 | 69.8 | 140.8 | 147.7 | ||||||||||||
Fee revenue and other income (a) | 0.2 | 0.2 | 0.4 | 0.4 | ||||||||||||
Total Washington National revenues | 228.7 | 223.1 | 453.5 | 454.1 | ||||||||||||
Colonial Penn: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Health | 0.9 | 1.1 | 1.9 | 2.2 | ||||||||||||
Life | 60.8 | 56.9 | 120.3 | 112.7 | ||||||||||||
Net investment income (a) | 10.5 | 9.9 | 21.2 | 19.8 | ||||||||||||
Fee revenue and other income (a) | 0.3 | 0.2 | 0.5 | 0.4 | ||||||||||||
Total Colonial Penn revenues | 72.5 | 68.1 | 143.9 | 135.1 | ||||||||||||
Other CNO Business: | ||||||||||||||||
Insurance policy income - health | — | 6.1 | — | 12.3 | ||||||||||||
Net investment income (a) | — | 8.4 | — | 16.8 | ||||||||||||
Total Other CNO Business revenues | — | 14.5 | — | 29.1 | ||||||||||||
Corporate operations: | ||||||||||||||||
Net investment income | 5.7 | 4.5 | 12.7 | 14.6 | ||||||||||||
Fee and other income | 1.3 | 1.5 | 2.7 | 3.2 | ||||||||||||
Total corporate revenues | 7 | 6 | 15.4 | 17.8 | ||||||||||||
Total revenues | 969.7 | 961.4 | 1,920.30 | 1,969.20 | ||||||||||||
(continued on next page) | ||||||||||||||||
(continued from previous page) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Expenses: | ||||||||||||||||
Bankers Life: | ||||||||||||||||
Insurance policy benefits | $ | 427.9 | $ | 434.1 | $ | 842.9 | $ | 904.6 | ||||||||
Amortization | 45.4 | 45.7 | 93.6 | 100.2 | ||||||||||||
Interest expense on investment borrowings | 1.9 | 1.7 | 3.8 | 3.1 | ||||||||||||
Other operating costs and expenses | 98.9 | 89.1 | 195.6 | 184 | ||||||||||||
Total Bankers Life expenses | 574.1 | 570.6 | 1,135.90 | 1,191.90 | ||||||||||||
Washington National: | ||||||||||||||||
Insurance policy benefits | 132.8 | 130.3 | 264.6 | 268 | ||||||||||||
Amortization | 16 | 16.2 | 32.3 | 33.3 | ||||||||||||
Interest expense on investment borrowings | 0.5 | 0.5 | 0.9 | 1 | ||||||||||||
Other operating costs and expenses | 47.1 | 40.3 | 92.3 | 82 | ||||||||||||
Total Washington National expenses | 196.4 | 187.3 | 390.1 | 384.3 | ||||||||||||
Colonial Penn: | ||||||||||||||||
Insurance policy benefits | 43.2 | 41.2 | 87.9 | 84.2 | ||||||||||||
Amortization | 3.8 | 3.7 | 7.8 | 7.4 | ||||||||||||
Other operating costs and expenses | 21.7 | 22 | 50.6 | 47.7 | ||||||||||||
Total Colonial Penn expenses | 68.7 | 66.9 | 146.3 | 139.3 | ||||||||||||
Other CNO Business: | ||||||||||||||||
Insurance policy benefits | — | 15.3 | — | 30.9 | ||||||||||||
Other operating costs and expenses | — | 6.4 | — | 12.7 | ||||||||||||
Total Other CNO Business expenses | — | 21.7 | — | 43.6 | ||||||||||||
Corporate operations: | ||||||||||||||||
Interest expense on corporate debt | 11.1 | 13.1 | 22.2 | 28.2 | ||||||||||||
Interest expense on investment borrowings | — | — | — | 0.1 | ||||||||||||
Other operating costs and expenses | 22.5 | 3.6 | 36.9 | 12.3 | ||||||||||||
Total corporate expenses | 33.6 | 16.7 | 59.1 | 40.6 | ||||||||||||
Total expenses | 872.8 | 863.2 | 1,731.40 | 1,799.70 | ||||||||||||
Pre-tax operating earnings by segment: | ||||||||||||||||
Bankers Life | 87.4 | 79.1 | 171.6 | 141.2 | ||||||||||||
Washington National | 32.3 | 35.8 | 63.4 | 69.8 | ||||||||||||
Colonial Penn | 3.8 | 1.2 | (2.4 | ) | (4.2 | ) | ||||||||||
Other CNO Business | — | (7.2 | ) | — | (14.5 | ) | ||||||||||
Corporate operations | (26.6 | ) | (10.7 | ) | (43.7 | ) | (22.8 | ) | ||||||||
Pre-tax operating earnings | $ | 96.9 | $ | 98.2 | $ | 188.9 | $ | 169.5 | ||||||||
___________________ | ||||||||||||||||
(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 and net income (loss) is as follows (dollars in millions): | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total segment revenues | $ | 969.7 | $ | 961.4 | $ | 1,920.30 | $ | 1,969.20 | ||||||||
Net realized investment gains | 11.7 | 1.6 | 33 | 14.8 | ||||||||||||
Revenues related to certain non-strategic investments and earnings attributable to VIEs | 7.3 | 8.2 | 13.6 | 15.1 | ||||||||||||
Revenues of CLIC being sold | 104.3 | 110.3 | 210.8 | 225 | ||||||||||||
Consolidated revenues | 1,093.00 | 1,081.50 | 2,177.70 | 2,224.10 | ||||||||||||
Total segment expenses | 872.8 | 863.2 | 1,731.40 | 1,799.70 | ||||||||||||
Gain related to reinsurance transaction | (3.8 | ) | — | (3.8 | ) | — | ||||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | 10.1 | (29.0 | ) | 25.3 | (32.1 | ) | ||||||||||
Amortization related to fair value changes in embedded derivative liabilities | (2.7 | ) | 10.5 | (6.9 | ) | 11.5 | ||||||||||
Amortization related to net realized investment gains | 0.1 | 0.4 | 0.5 | 1.2 | ||||||||||||
Expenses related to certain non-strategic investments and earnings attributable to VIEs | 10.2 | 11.1 | 19.8 | 19.9 | ||||||||||||
Loss on extinguishment or modification of debt | 0.6 | 7.7 | 0.6 | 65.4 | ||||||||||||
Loss on sale of subsidiary | — | — | 278.6 | — | ||||||||||||
Expenses of CLIC being sold | 91.3 | 102.9 | 187.4 | 209.2 | ||||||||||||
Consolidated expenses | 978.6 | 966.8 | 2,232.90 | 2,074.80 | ||||||||||||
Income (loss) before tax | 114.4 | 114.7 | (55.2 | ) | 149.3 | |||||||||||
Income tax expense: | ||||||||||||||||
Tax expense on period income | 40.3 | 42.6 | 79.3 | 75.8 | ||||||||||||
Valuation allowance for deferred taxes and other tax items | (4.0 | ) | (5.0 | ) | 15.4 | (15.5 | ) | |||||||||
Net income (loss) | $ | 78.1 | $ | 77.1 | $ | (149.9 | ) | $ | 89 | |||||||
INCOME_TAXES_TABLES
INCOME TAXES (TABLES) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of components of income tax expense | ' | ||||||||||||||||
The components of income tax expense are as follows (dollars in millions): | |||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Current tax expense | $ | 3.9 | $ | 2.7 | $ | 6.1 | $ | 5.4 | |||||||||
Deferred tax expense | 36.4 | 40.8 | 73.2 | 71.8 | |||||||||||||
Income tax expense calculated based on estimated annual effective tax rate | 40.3 | 43.5 | 79.3 | 77.2 | |||||||||||||
Income tax expense (benefit) on discrete items: | |||||||||||||||||
Related to the sale of CLIC: | |||||||||||||||||
Tax expense related to tax gain on sale | 8.4 | — | 21.6 | — | |||||||||||||
Previously unrecognized tax benefit recognized as a result of the gain | — | — | (7.4 | ) | — | ||||||||||||
Valuation allowance release related to the gain | (8.4 | ) | — | (14.2 | ) | — | |||||||||||
Valuation allowance increase related to the decrease in projected future taxable income | — | — | 19.4 | — | |||||||||||||
Valuation allowance reduction resulting from the realization of capital gains and utilization of loss carryforwards | (4.0 | ) | (5.0 | ) | (4.0 | ) | (15.5 | ) | |||||||||
Deferred tax benefit related to loss on extinguishment or modification of debt | — | (.9 | ) | — | (1.4 | ) | |||||||||||
Total income tax expense | $ | 36.3 | $ | 37.6 | $ | 94.7 | $ | 60.3 | |||||||||
Schedule of effective income tax rate reconciliation | ' | ||||||||||||||||
A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, before discrete items, reflected in the consolidated statement of operations is as follows: | |||||||||||||||||
Six months ended | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
U.S. statutory corporate rate | 35 | % | 35 | % | |||||||||||||
Non-taxable income and nondeductible benefits, net | (1.0 | ) | (.5 | ) | |||||||||||||
State taxes | 1.5 | 1.4 | |||||||||||||||
Estimated annual effective tax rate | 35.5 | % | 35.9 | % | |||||||||||||
Schedule of deferred tax assets and liabilities | ' | ||||||||||||||||
The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): | |||||||||||||||||
June 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Net federal operating loss carryforwards | $ | 1,141.80 | $ | 1,240.20 | |||||||||||||
Net state operating loss carryforwards | 18.4 | 20 | |||||||||||||||
Tax credits | 40.6 | 43.9 | |||||||||||||||
Capital loss carryforwards | 0.6 | 13.4 | |||||||||||||||
Deductible temporary differences: | |||||||||||||||||
Investments | 68.2 | 74.3 | |||||||||||||||
Insurance liabilities | 622.2 | 723.8 | |||||||||||||||
Other | (1.7 | ) | 64.7 | ||||||||||||||
Gross deferred tax assets | 1,890.10 | 2,180.30 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Present value of future profits and deferred acquisition costs | (318.1 | ) | (306.8 | ) | |||||||||||||
Accumulated other comprehensive income | (512.6 | ) | (405.5 | ) | |||||||||||||
Gross deferred tax liabilities | (830.7 | ) | (712.3 | ) | |||||||||||||
Net deferred tax assets before valuation allowance | 1,059.40 | 1,468.00 | |||||||||||||||
Valuation allowance | (296.0 | ) | (294.8 | ) | |||||||||||||
Net deferred tax assets | 763.4 | 1,173.20 | |||||||||||||||
Current income taxes accrued | (32.9 | ) | (26.0 | ) | |||||||||||||
Income tax assets, net | $ | 730.5 | $ | 1,147.20 | |||||||||||||
Summary of operating loss carryforwards | ' | ||||||||||||||||
As of June 30, 2014, we had $3.3 billion of federal NOLs and $1.8 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 | ||||||||||||||
2018 | $ | 120.6 | $ | — | $ | — | $ | 120.6 | |||||||||
2021 | 30 | — | — | 30 | |||||||||||||
2022 | 152 | — | — | 152 | |||||||||||||
2023 | 742.6 | 2,126.10 | — | 2,868.70 | |||||||||||||
2025 | — | 115.3 | — | 115.3 | |||||||||||||
2027 | — | 202.6 | — | 202.6 | |||||||||||||
2028 | — | 0.5 | — | 0.5 | |||||||||||||
2029 | — | 272.3 | — | 272.3 | |||||||||||||
2032 | — | 44 | — | 44 | |||||||||||||
Subtotal | 1,045.20 | 2,760.80 | — | 3,806.00 | |||||||||||||
Less: | |||||||||||||||||
Unrecognized tax benefits | (344.7 | ) | (199.0 | ) | 1.8 | (541.9 | ) | ||||||||||
Total | $ | 700.5 | $ | 2,561.80 | $ | 1.8 | $ | 3,264.10 | |||||||||
NOTES_PAYABLE_DIRECT_CORPORATE1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (TABLES) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of long-term debt instruments | ' | |||||||
The following notes payable were direct corporate obligations of the Company as of June 30, 2014 and December 31, 2013 (dollars in millions): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Senior Secured Credit Agreement (as defined below) | $ | 555.5 | $ | 581.5 | ||||
6.375% Senior Secured Notes due October 2020 (the "6.375% Notes") | 275 | 275 | ||||||
7.0% Debentures | — | 3.5 | ||||||
Unamortized discount on Senior Secured Credit Agreement | (3.2 | ) | (3.6 | ) | ||||
Direct corporate obligations | $ | 827.3 | $ | 856.4 | ||||
Schedule of maturities of long-term debt | ' | |||||||
The scheduled repayment of our direct corporate obligations was as follows at June 30, 2014 (dollars in millions): | ||||||||
Year ending June 30, | ||||||||
2015 | $ | 73 | ||||||
2016 | 79.3 | |||||||
2017 | 23 | |||||||
2018 | 4.2 | |||||||
2019 | 376 | |||||||
Thereafter | 275 | |||||||
$ | 830.5 | |||||||
INVESTMENT_BORROWINGS_Tables
INVESTMENT BORROWINGS (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Gain (Loss) on Investments [Line Items] | ' | ||||||
Schedule of terms of federal home loan bank borrowing | ' | ||||||
The following summarizes the terms of the borrowings from the FHLB by Washington National and Bankers Life (dollars in millions): | |||||||
Amount | Maturity | Interest rate at | |||||
borrowed | date | June 30, 2014 | |||||
$ | 50 | Sep-15 | Variable rate – 0.528% | ||||
50 | Oct-15 | Variable rate – 0.502% | |||||
100 | Jun-16 | Variable rate – 0.592% | |||||
75 | Jun-16 | Variable rate – 0.394% | |||||
100 | Oct-16 | Variable rate – 0.412% | |||||
50 | Nov-16 | Variable rate – 0.497% | |||||
50 | Nov-16 | Variable rate – 0.622% | |||||
57.7 | Jun-17 | Variable rate – 0.581% | |||||
50 | Aug-17 | Variable rate – 0.424% | |||||
75 | Aug-17 | Variable rate – 0.377% | |||||
100 | Oct-17 | Variable rate – 0.656% | |||||
50 | Nov-17 | Variable rate – 0.737% | |||||
50 | Jan-18 | Variable rate – 0.578% | |||||
50 | Jan-18 | Variable rate – 0.566% | |||||
50 | Feb-18 | Variable rate – 0.533% | |||||
50 | Feb-18 | Variable rate – 0.315% | |||||
22 | Feb-18 | Variable rate – 0.559% | |||||
100 | May-18 | Variable rate – 0.600% | |||||
50 | Jul-18 | Variable rate – 0.698% | |||||
50 | Aug-18 | Variable rate – 0.344% | |||||
50 | Jan-19 | Variable rate – 0.649% | |||||
50 | Feb-19 | Variable rate – 0.315% | |||||
100 | Mar-19 | Variable rate – 0.634% | |||||
21.8 | Jun-20 | Fixed rate – 1.960% | |||||
27.2 | Mar-23 | Fixed rate – 2.160% | |||||
20.5 | Jun-25 | Fixed rate – 2.940% | |||||
$ | 1,499.20 | ||||||
Assets of CLIC being sold | ' | ||||||
Gain (Loss) on Investments [Line Items] | ' | ||||||
Schedule of terms of federal home loan bank borrowing | ' | ||||||
The following summarizes the terms of the borrowings classified as "Liabilities of subsidiary being sold" (dollars in millions): | |||||||
Amount | Maturity | Interest rate at | |||||
borrowed | date | June 30, 2014 | |||||
$ | 146.4 | Nov-15 | Fixed rate – 5.300% | ||||
100 | Dec-15 | Fixed rate – 4.710% | |||||
100 | Jul-17 | Fixed rate – 3.900% | |||||
37 | Nov-17 | Fixed rate – 3.750% | |||||
$ | 383.4 | ||||||
CHANGES_IN_COMMON_STOCK_Tables
CHANGES IN COMMON STOCK (Tables) | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||
Schedule of options activity | ' | |||
Changes in the number of shares of common stock outstanding were as follows (shares in thousands): | ||||
Balance, December 31, 2013 | 220,324 | |||
Treasury stock purchased and retired | (7,834 | ) | ||
Stock options exercised | 732 | |||
Restricted and performance stock vested | 533 | (a) | ||
Balance, June 30, 2014 | 213,755 | |||
____________________ | ||||
(a) | Such amount was reduced by 227 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock. |
ASSETS_AND_LIABILITIES_SUBJECT1
ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS (Tables) | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Offsetting [Abstract] | ' | |||||||||||||||||||||||||
Schedule of offsetting call options | ' | |||||||||||||||||||||||||
The following table summarizes information related to call options as of June 30, 2014 and December 31, 2013 (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 | |||||||||||||||||||||
June 30, 2014: | ||||||||||||||||||||||||||
Call Options (a) | $ | 130.7 | $ | — | $ | 130.7 | $ | — | $ | — | $ | 130.7 | ||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||||
Call Options | 156.2 | — | 156.2 | — | — | 156.2 | ||||||||||||||||||||
___________________________ | ||||||||||||||||||||||||||
(a) Includes $4.3 million classified as "Assets of subsidiary being sold". | ||||||||||||||||||||||||||
Schedule of Repurchase Agreements | ' | |||||||||||||||||||||||||
The following table summarizes information related to repurchase agreements as of June 30, 2014 (dollars in millions): | ||||||||||||||||||||||||||
Gross amounts not offset in the balance sheet | ||||||||||||||||||||||||||
Gross amounts of recognized liabilities | Gross amounts offset in the balance sheet | Net amounts of liabilities presented in the balance sheet | Financial instruments | Cash collateral pledged | Net amount | |||||||||||||||||||||
June 30, 2014: | ||||||||||||||||||||||||||
Repurchase agreements (a) | $ | 8.4 | $ | — | $ | 8.4 | $ | — | $ | — | $ | 8.4 | ||||||||||||||
_________________ | ||||||||||||||||||||||||||
(a) | As of June 30, 2014, these agreements were collateralized by investment securities with a fair value of $10.5 million. There were no repurchase agreements outstanding at December 31, 2013. |
CONSOLIDATED_STATEMENT_CASH_FL1
CONSOLIDATED STATEMENT CASH FLOWS (TABLES) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
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): | ||||||||
Six months ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (149.9 | ) | $ | 89 | |||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Amortization and depreciation | 146.2 | 172.6 | ||||||
Income taxes | 92.7 | 57.4 | ||||||
Insurance liabilities | 155.2 | 205.3 | ||||||
Accrual and amortization of investment income | (77.5 | ) | (125.0 | ) | ||||
Deferral of policy acquisition costs | (116.9 | ) | (107.2 | ) | ||||
Net realized investment gains | (35.8 | ) | (18.5 | ) | ||||
Payment to reinsurer pursuant to long-term care business reinsured | (590.3 | ) | — | |||||
Loss on sale of subsidiary | 278.6 | — | ||||||
Gain related to reinsurance transaction | (3.8 | ) | — | |||||
Loss on extinguishment or modification of debt | 0.6 | 65.4 | ||||||
Other | (14.0 | ) | (49.1 | ) | ||||
Net cash from operating activities | $ | (314.9 | ) | (a) | $ | 289.9 | ||
______________________ | ||||||||
(a) | Cash flows from operating activities reflect outflows in the 2014 period due to the payment to reinsurer to transfer certain long-term care business. | |||||||
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): | ||||||||
Six months ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Stock options, restricted stock and performance units | $ | 8.1 | $ | 7.2 | ||||
INVESTMENTS_IN_VARIABLE_INTERE1
INVESTMENTS IN VARIABLE INTEREST ENTITIES (TABLES) | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
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): | ||||||||||||
June 30, 2014 | ||||||||||||
VIEs | Eliminations | Net effect on | ||||||||||
consolidated | ||||||||||||
balance sheet | ||||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 1,241.10 | $ | — | $ | 1,241.10 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | — | (116.0 | ) | (116.0 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 101.8 | — | 101.8 | |||||||||
Accrued investment income | 2.5 | — | 2.5 | |||||||||
Income tax assets, net | 6.8 | (2.2 | ) | 4.6 | ||||||||
Other assets | 14.2 | (.9 | ) | 13.3 | ||||||||
Total assets | $ | 1,366.40 | $ | (119.1 | ) | $ | 1,247.30 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 148.2 | $ | (3.2 | ) | $ | 145 | |||||
Borrowings related to variable interest entities | 1,110.80 | — | 1,110.80 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 120.1 | (120.1 | ) | — | ||||||||
Total liabilities | $ | 1,379.10 | $ | (123.3 | ) | $ | 1,255.80 | |||||
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 | |||||
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 June 30, 2014, 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 | 353.8 | 354.1 | ||||||||||
Due after five years through ten years | 884.9 | 884.2 | ||||||||||
Total | $ | 1,241.50 | $ | 1,241.10 | ||||||||
FAIR_VALUE_MEASUREMENTS_TABLES
FAIR VALUE MEASUREMENTS (TABLES) | 6 Months Ended | ||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||||||||||||||
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 June 30, 2014 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 | $ | — | $ | 13,491.80 | $ | 389.8 | $ | 13,881.60 | |||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 160.1 | — | 160.1 | |||||||||||||||||||||||||||||||||
States and political subdivisions | — | 2,122.20 | 28.7 | 2,150.90 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 1,273.40 | 52.7 | 1,326.10 | |||||||||||||||||||||||||||||||||
Collateralized debt obligations | — | 310 | 14.2 | 324.2 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,266.20 | — | 1,266.20 | |||||||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 7.6 | 1.3 | 8.9 | |||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 1,415.50 | 0.1 | 1,415.60 | |||||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | — | 20,046.80 | 486.8 | 20,533.60 | |||||||||||||||||||||||||||||||||
Equity securities - corporate securities | 52.9 | 208.4 | 26.2 | 287.5 | |||||||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||||
Corporate securities | — | 23.8 | — | 23.8 | |||||||||||||||||||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | — | 4.2 | — | 4.2 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 20.9 | — | 20.9 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 146.6 | — | 146.6 | |||||||||||||||||||||||||||||||||
Mortgage pass-through securities | — | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | 23.9 | 5.9 | 29.8 | |||||||||||||||||||||||||||||||||
Equity securities | 2 | — | — | 2 | |||||||||||||||||||||||||||||||||
Total trading securities | 2 | 219.5 | 5.9 | 227.4 | |||||||||||||||||||||||||||||||||
Investments held by variable interest entities - corporate securities | — | 1,241.10 | — | 1,241.10 | |||||||||||||||||||||||||||||||||
Other invested assets - derivatives | 0.9 | 126.4 | — | 127.3 | |||||||||||||||||||||||||||||||||
Assets held in separate accounts | — | 9.4 | — | 9.4 | |||||||||||||||||||||||||||||||||
Assets of subsidiary being sold | — | 3,458.60 | 63.1 | 3,521.70 | |||||||||||||||||||||||||||||||||
Total assets carried at fair value by category | $ | 55.8 | $ | 25,310.20 | $ | 582 | $ | 25,948.00 | |||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | $ | — | $ | — | $ | 980.3 | $ | 980.3 | |||||||||||||||||||||||||||||
Total liabilities for insurance products | — | — | 980.3 | 980.3 | |||||||||||||||||||||||||||||||||
Total liabilities carried at fair value by category | $ | — | $ | — | $ | 980.3 | $ | 980.3 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
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): | |||||||||||||||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||||||||||||||
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 | $ | — | $ | — | $ | 1,647.10 | $ | 1,647.10 | $ | 1,595.90 | |||||||||||||||||||||||||||
Policy loans | — | — | 99.7 | 99.7 | 99.7 | ||||||||||||||||||||||||||||||||
Other invested assets: | |||||||||||||||||||||||||||||||||||||
Company-owned life insurance | — | 149.4 | — | 149.4 | 149.4 | ||||||||||||||||||||||||||||||||
Alternative investment funds | — | 86.6 | — | 86.6 | 86.6 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||||||||||||||||
Unrestricted | 167.8 | 211 | — | 378.8 | 378.8 | ||||||||||||||||||||||||||||||||
Held by variable interest entities | 101.8 | — | — | 101.8 | 101.8 | ||||||||||||||||||||||||||||||||
Assets of subsidiary being sold | 164.7 | — | 351 | 515.7 | 503.8 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Policyholder account balances (a) | — | — | 10,649.70 | 10,649.70 | 10,649.70 | ||||||||||||||||||||||||||||||||
Investment borrowings | — | 1,507.00 | — | 1,507.00 | 1,507.60 | ||||||||||||||||||||||||||||||||
Borrowings related to variable interest entities | — | 955.9 | — | 955.9 | 1,110.80 | ||||||||||||||||||||||||||||||||
Notes payable – direct corporate obligations | — | 852.4 | — | 852.4 | 827.3 | ||||||||||||||||||||||||||||||||
Liabilities of subsidiary being sold | — | 412.9 | 2,070.00 | 2,482.90 | 2,453.40 | ||||||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
Alternative investment 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 | ||||||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||
(a) | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at June 30, 2014 and December 31, 2013. 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 three months ended June 30, 2014 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||||||||||||||
Beginning balance as of March 31, 2014 | 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 (a) | Transfers out of Level 3 (a) | Ending balance as of June 30, 2014 | Amount of total gains (losses) for the three months ended June 30, 2014 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 | $ | 336.8 | $ | 47.7 | $ | — | $ | 4 | $ | 16.3 | $ | (15.0 | ) | $ | 389.8 | $ | — | ||||||||||||||||||||
States and political subdivisions | — | — | — | 0.7 | 28 | — | 28.7 | — | |||||||||||||||||||||||||||||
Asset-backed securities | 42.2 | (.5 | ) | — | 1.1 | 9.9 | — | 52.7 | — | ||||||||||||||||||||||||||||
Collateralized debt obligations | 14.1 | (.1 | ) | — | 0.2 | — | — | 14.2 | — | ||||||||||||||||||||||||||||
Mortgage pass-through securities | 0.4 | 0.9 | — | — | — | — | 1.3 | — | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | — | — | (.1 | ) | 0.2 | — | 0.1 | — | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 393.5 | 48 | — | 5.9 | 54.4 | (15.0 | ) | 486.8 | — | ||||||||||||||||||||||||||||
Equity securities - corporate securities | 25.4 | 0.8 | — | — | — | — | 26.2 | — | |||||||||||||||||||||||||||||
Trading securities - collateralized mortgage obligations | 5.9 | — | — | — | — | — | 5.9 | — | |||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (930.8 | ) | (38.7 | ) | (10.8 | ) | — | — | — | (980.3 | ) | (10.8 | ) | ||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (3.4 | ) | 3.4 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Total liabilities for insurance products | (934.2 | ) | (35.3 | ) | (10.8 | ) | — | — | — | (980.3 | ) | (10.8 | ) | ||||||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 three months ended June 30, 2014 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 51 | $ | (3.3 | ) | $ | — | $ | — | $ | 47.7 | ||||||||||||||||||||||||||
Asset-backed securities | — | (.5 | ) | — | — | (.5 | ) | ||||||||||||||||||||||||||||||
Collateralized debt obligations | — | (.1 | ) | — | — | (.1 | ) | ||||||||||||||||||||||||||||||
Mortgage pass-through securities | 1.1 | (.2 | ) | — | — | 0.9 | |||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 52.1 | (4.1 | ) | — | — | 48 | |||||||||||||||||||||||||||||||
Equity securities - corporate securities | 0.8 | — | — | — | 0.8 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (31.1 | ) | 0.5 | (22.5 | ) | 14.4 | (38.7 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.4 | — | — | 3.4 | ||||||||||||||||||||||||||||||||
Total liabilities for insurance products | (31.1 | ) | 3.9 | (22.5 | ) | 14.4 | (35.3 | ) | |||||||||||||||||||||||||||||
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 six months ended June 30, 2014 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2013 | 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 (a) | Transfers out of Level 3 (a) | Amounts classified as Assets of subsidiary being sold | Ending balance as of June 30, 2014 | Amount of total gains (losses) for the six months ended June 30, 2014 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 | $ | 359.6 | $ | 41.2 | $ | — | $ | 13.4 | $ | 26.8 | $ | — | $ | (51.2 | ) | $ | 389.8 | $ | — | ||||||||||||||||||
States and political subdivisions | — | — | — | 2 | 28.9 | — | (2.2 | ) | 28.7 | — | |||||||||||||||||||||||||||
Asset-backed securities | 42.2 | 9 | — | 3.3 | 7.9 | — | (9.7 | ) | 52.7 | — | |||||||||||||||||||||||||||
Collateralized debt obligations | 246.7 | (4.4 | ) | — | — | 12.6 | (240.7 | ) | — | 14.2 | — | ||||||||||||||||||||||||||
Mortgage pass-through securities | 1.6 | (.3 | ) | — | — | — | — | — | 1.3 | — | |||||||||||||||||||||||||||
Collateralized mortgage obligations | — | — | — | — | 0.1 | — | — | 0.1 | — | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 650.1 | 45.5 | — | 18.7 | 76.3 | (240.7 | ) | (63.1 | ) | 486.8 | — | ||||||||||||||||||||||||||
Equity securities - corporate securities | 24.5 | 1.7 | — | — | — | — | — | 26.2 | — | ||||||||||||||||||||||||||||
Trading securities - collateralized mortgage obligations | — | — | — | 0.1 | 5.8 | — | — | 5.9 | 0.1 | ||||||||||||||||||||||||||||
Assets of subsidiary being sold | — | — | — | — | — | — | 63.1 | 63.1 | — | ||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (903.7 | ) | (49.8 | ) | (26.8 | ) | — | — | — | — | (980.3 | ) | (26.8 | ) | |||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (1.8 | ) | 1.8 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total liabilities for insurance products | (905.5 | ) | (48.0 | ) | (26.8 | ) | — | — | — | — | (980.3 | ) | (26.8 | ) | |||||||||||||||||||||||
_________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 six months ended June 30, 2014 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 51 | $ | (9.8 | ) | $ | — | $ | — | $ | 41.2 | ||||||||||||||||||||||||||
Asset-backed securities | 9.9 | (.9 | ) | — | — | 9 | |||||||||||||||||||||||||||||||
Collateralized debt obligations | 0.9 | (5.3 | ) | — | — | (4.4 | ) | ||||||||||||||||||||||||||||||
Mortgage pass-through securities | 1.1 | (1.4 | ) | — | — | (.3 | ) | ||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 62.9 | (17.4 | ) | — | — | 45.5 | |||||||||||||||||||||||||||||||
Equity securities - corporate securities | 1.7 | — | — | — | 1.7 | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (57.7 | ) | 3.6 | (24.6 | ) | 28.9 | (49.8 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 3.4 | (1.6 | ) | — | 1.8 | |||||||||||||||||||||||||||||||
Total liabilities for insurance products | (57.7 | ) | 7 | (26.2 | ) | 28.9 | (48.0 | ) | |||||||||||||||||||||||||||||
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 three months ended June 30, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 2013 | |||||||||||||||||||||||||||||||||||||
Beginning balance as of March 31, 2013 | 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 (a) | Transfers out of Level 3 (a) | Ending balance as of June 30, 2013 | Amount of total gains (losses) for the three months ended June 30, 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 | $ | 356.3 | $ | 2.2 | $ | (.3 | ) | $ | (9.6 | ) | $ | 44.5 | $ | — | $ | 393.1 | $ | — | |||||||||||||||||||
States and political subdivisions | 15 | — | — | — | — | (15.0 | ) | — | — | ||||||||||||||||||||||||||||
Asset-backed securities | 46.6 | (.2 | ) | — | (2.5 | ) | 2 | (.5 | ) | 45.4 | — | ||||||||||||||||||||||||||
Collateralized debt obligations | 309.7 | (33.7 | ) | (.1 | ) | 0.9 | 10.8 | — | 287.6 | — | |||||||||||||||||||||||||||
Commercial mortgage-backed securities | 3.8 | (.5 | ) | — | — | — | — | 3.3 | — | ||||||||||||||||||||||||||||
Mortgage pass-through securities | 1.8 | — | — | — | — | — | 1.8 | — | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | 36.6 | — | — | — | — | (36.5 | ) | 0.1 | — | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 769.8 | (32.2 | ) | (.4 | ) | (11.2 | ) | 57.3 | (52.0 | ) | 731.3 | — | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | — | — | — | — | — | 0.1 | — | |||||||||||||||||||||||||||||
Venture capital investments | 3.1 | — | — | — | — | — | 3.1 | — | |||||||||||||||||||||||||||||
Total equity securities | 3.2 | — | — | — | — | — | 3.2 | — | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 5.7 | — | — | (.1 | ) | 4.8 | — | 10.4 | — | ||||||||||||||||||||||||||||
Total trading securities | 6.3 | — | — | (.1 | ) | 4.8 | (.6 | ) | 10.4 | — | |||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (794.3 | ) | (32.7 | ) | 30.7 | — | — | — | (796.3 | ) | 30.7 | ||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.1 | ) | 2.5 | — | — | — | — | (2.6 | ) | — | |||||||||||||||||||||||||||
Total liabilities for insurance products | (799.4 | ) | (30.2 | ) | 30.7 | — | — | — | (798.9 | ) | 30.7 | ||||||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 three months ended June 30, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 10 | $ | (7.8 | ) | $ | — | $ | — | $ | 2.2 | ||||||||||||||||||||||||||
Asset-backed securities | — | (.2 | ) | — | — | (.2 | ) | ||||||||||||||||||||||||||||||
Collateralized debt obligations | — | (33.7 | ) | — | — | (33.7 | ) | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (.5 | ) | — | — | (.5 | ) | ||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 10 | (42.2 | ) | — | — | (32.2 | ) | ||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (27.7 | ) | — | (14.0 | ) | 9 | (32.7 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 2.5 | — | — | 2.5 | ||||||||||||||||||||||||||||||||
Total liabilities for insurance products | (27.7 | ) | 2.5 | (14.0 | ) | 9 | (30.2 | ) | |||||||||||||||||||||||||||||
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 six months ended June 30, 2013 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
June 30, 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 (a) | Transfers out of Level 3 (a) | Ending balance as of June 30, 2013 | Amount of total gains (losses) for the six months ended June 30, 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 | $ | 63.6 | $ | (.3 | ) | $ | (13.4 | ) | $ | — | $ | (12.3 | ) | $ | 393.1 | $ | — | ||||||||||||||||||
States and political subdivisions | 13.1 | — | — | — | — | (13.1 | ) | — | — | ||||||||||||||||||||||||||||
Asset-backed securities | 44 | 7.2 | — | (3.3 | ) | 2 | (4.5 | ) | 45.4 | — | |||||||||||||||||||||||||||
Collateralized debt obligations | 324 | (42.0 | ) | 0.1 | 5.5 | — | — | 287.6 | — | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 6.2 | (.7 | ) | — | 0.1 | — | (2.3 | ) | 3.3 | — | |||||||||||||||||||||||||||
Mortgage pass-through securities | 1.9 | (.1 | ) | — | — | — | — | 1.8 | — | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 16.9 | (.1 | ) | — | — | — | (16.7 | ) | 0.1 | — | |||||||||||||||||||||||||||
Total fixed maturities, available for sale | 761.6 | 27.9 | (.2 | ) | (11.1 | ) | 2 | (48.9 | ) | 731.3 | — | ||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||
Corporate securities | 0.1 | — | — | — | — | — | 0.1 | — | |||||||||||||||||||||||||||||
Venture capital investments | 2.8 | — | — | 0.3 | — | — | 3.1 | — | |||||||||||||||||||||||||||||
Total equity securities | 2.9 | — | — | 0.3 | — | — | 3.2 | — | |||||||||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||||
States and political subdivisions | 0.6 | — | — | — | — | (.6 | ) | — | — | ||||||||||||||||||||||||||||
Collateralized debt obligations | 7.3 | (7.7 | ) | 0.6 | (.2 | ) | — | — | — | — | |||||||||||||||||||||||||||
Collateralized mortgage obligations | 5.8 | — | — | (.3 | ) | 4.9 | — | 10.4 | — | ||||||||||||||||||||||||||||
Total trading securities | 13.7 | (7.7 | ) | 0.6 | (.5 | ) | 4.9 | (.6 | ) | 10.4 | — | ||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with fixed index annuity products | (734.0 | ) | (95.8 | ) | 33.5 | — | — | — | (796.3 | ) | 33.5 | ||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | (5.5 | ) | 2.9 | — | — | — | — | (2.6 | ) | — | |||||||||||||||||||||||||||
Total liabilities for insurance products | (739.5 | ) | (92.9 | ) | 33.5 | — | — | — | (798.9 | ) | 33.5 | ||||||||||||||||||||||||||
____________ | |||||||||||||||||||||||||||||||||||||
(a) | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. | ||||||||||||||||||||||||||||||||||||
(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 six months ended June 30, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||||||
Purchases | Sales | Issuances | Settlements | Purchases, sales, issuances and settlements, net | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 71.5 | $ | (7.9 | ) | $ | — | $ | — | $ | 63.6 | ||||||||||||||||||||||||||
Asset-backed securities | 7.6 | (.4 | ) | — | — | 7.2 | |||||||||||||||||||||||||||||||
Collateralized debt obligations | 13.3 | (55.3 | ) | — | — | (42.0 | ) | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | (.7 | ) | — | — | (.7 | ) | ||||||||||||||||||||||||||||||
Mortgage pass-through securities | — | (.1 | ) | — | — | (.1 | ) | ||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | (.1 | ) | — | — | (.1 | ) | ||||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 92.4 | (64.5 | ) | — | — | 27.9 | |||||||||||||||||||||||||||||||
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 | (52.8 | ) | 1.4 | (64.2 | ) | 19.8 | (95.8 | ) | |||||||||||||||||||||||||||||
Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement | — | 2.9 | — | — | 2.9 | ||||||||||||||||||||||||||||||||
Total liabilities for insurance products | (52.8 | ) | 4.3 | (64.2 | ) | 19.8 | (92.9 | ) | |||||||||||||||||||||||||||||
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 June 30, 2014 (dollars in millions): | |||||||||||||||||||||||||||||||||||||
Fair value at June 30, 2014 | Valuation technique(s) | Unobservable inputs | Range (weighted average) | ||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Corporate securities (a) | $ | 254.5 | Discounted cash flow analysis | Discount margins | 1.50% - 5.00% (2.44%) | ||||||||||||||||||||||||||||||||
Asset-backed securities (b) | 29.1 | Discounted cash flow analysis | Discount margins | 1.72% - 4.30% (2.81%) | |||||||||||||||||||||||||||||||||
Other assets categorized as Level 3 (c) | 235.3 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||||||
Assets of subsidiary being sold: | |||||||||||||||||||||||||||||||||||||
Corporate securities (a) | 19.1 | Discounted cash flow analysis | Discount margins | 1.50% - 2.45% (1.96%) | |||||||||||||||||||||||||||||||||
Asset-backed securities (b) | 8.7 | Discounted cash flow analysis | Discount margins | 3.50% | |||||||||||||||||||||||||||||||||
Other assets categorized as Level 3 (c) | 35.3 | Unadjusted third-party price source | Not applicable | Not applicable | |||||||||||||||||||||||||||||||||
Total | 582 | ||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||
Interest-sensitive products (d) | 980.3 | Discounted projected embedded derivatives | Projected portfolio yields | 5.35% - 6.63% (5.60%) | |||||||||||||||||||||||||||||||||
Discount rates | 0.00 - 3.78% (2.04%) | ||||||||||||||||||||||||||||||||||||
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) | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | ||||||||||||||||||||||||||||||||||||
(d) | 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, 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. |
AGREEMENT_TO_SELL_SUBSIDIARY_N
AGREEMENT TO SELL SUBSIDIARY - NARRATIVE (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | ||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jul. 01, 2014 | Jul. 01, 2014 |
Assets of CLIC being sold | Wilton Reassurance Company [Member] | Subsequent Event [Member] | |||||
Bankers Life | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Net cash proceeds | ' | ' | ' | ' | $216 | ' | ' |
Tax expense related to tax gain on sale | -8.4 | 0 | -21.6 | 0 | -21.6 | ' | ' |
Previously unrecognized tax benefit now recognized as a result of the gain | 0 | 0 | 7.4 | 0 | 7.4 | ' | ' |
Valuation allowance release related to the gain | -8.4 | 0 | -14.2 | 0 | 14.2 | ' | ' |
Valuation allowance for deferred tax assets and other tax items | -4 | -5 | 15.4 | -15.5 | ' | ' | ' |
Reinsurance recapture fee paid | ' | ' | ' | ' | ' | 28 | ' |
Gain related to reinsurance transaction | -3.8 | 0 | -3.8 | 0 | ' | ' | 4.5 |
Valuation allowance increase related to the decrease in projected future taxable income | $0 | $0 | ($19.40) | $0 | $19.40 | ' | ' |
AGREEMEENT_TO_SELL_SUBSIDIARY_
AGREEMEENT TO SELL SUBSIDIARY - ESTIMATED LOSS ON SALE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Net assets being sold: | ' | ' | ' | ' |
Loss before taxes | $0 | $0 | ($278.60) | $0 |
Tax expense related to tax gain on sale | 8.4 | 0 | 21.6 | 0 |
Previously unrecognized tax benefit now recognized as a result of the gain | 0 | 0 | -7.4 | 0 |
Valuation allowance release related to the gain | 8.4 | 0 | 14.2 | 0 |
Valuation allowance increase related to the decrease in projected future taxable income | 0 | 0 | -19.4 | 0 |
Assets of CLIC being sold | ' | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Net cash proceeds | 216 | ' | 216 | ' |
Net assets being sold: | ' | ' | ' | ' |
Investments | 3,863.80 | ' | 3,863.80 | ' |
Cash and cash equivalents | 164.7 | ' | 164.7 | ' |
Accrued investment income | 42.7 | ' | 42.7 | ' |
Present value of future profits | 15.5 | ' | 15.5 | ' |
Deferred acquisition costs | 37.6 | ' | 37.6 | ' |
Reinsurance receivables | 307.4 | ' | 307.4 | ' |
Income tax assets, net | 84.4 | ' | 84.4 | ' |
Other assets | 2.8 | ' | 2.8 | ' |
Liabilities for insurance products | -3,201.30 | ' | -3,201.30 | ' |
Other liabilities | -199.1 | ' | -199.1 | ' |
Investment borrowings | -383.4 | ' | -383.4 | ' |
Accumulated other comprehensive income | -240.5 | ' | -240.5 | ' |
Net assets being sold | 494.6 | ' | 494.6 | ' |
Loss before taxes | ' | ' | -278.6 | ' |
Tax expense related to tax gain on sale | ' | ' | 21.6 | ' |
Previously unrecognized tax benefit now recognized as a result of the gain | ' | ' | -7.4 | ' |
Valuation allowance release related to the gain | ' | ' | -14.2 | ' |
Valuation allowance increase related to the decrease in projected future taxable income | ' | ' | 19.4 | ' |
Net loss | ' | ' | $298 | ' |
AGREEMENT_TO_SELL_SUBSIDIARY_A
AGREEMENT TO SELL SUBSIDIARY - ASSETS/LIABILITIES SOLD (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Assets of subsidiary being sold | $4,518.90 | $0 |
Liabilities of subsidiary being sold | 4,298.30 | 0 |
Assets of CLIC being sold | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Investments | 3,863.80 | ' |
Cash and cash equivalents - unrestricted | 164.7 | ' |
Accrued investment income | 42.7 | ' |
Deferred acquisition costs | 37.6 | ' |
Reinsurance receivables | 307.4 | ' |
Income tax assets, net | 84.4 | ' |
Liabilities for insurance products | 3,201.30 | ' |
Other liabilities | 199.1 | ' |
Investment borrowings | 383.4 | ' |
Assets Held-for-sale [Member] | Assets of CLIC being sold | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Investments | 3,863.80 | ' |
Cash and cash equivalents - unrestricted | 164.7 | ' |
Accrued investment income | 42.7 | ' |
Present value of future profits | 15.5 | ' |
Deferred acquisition costs | 37.6 | ' |
Reinsurance receivables | 307.4 | ' |
Income tax assets, net | 84.4 | ' |
Other assets | 2.8 | ' |
Assets of subsidiary being sold | 4,518.90 | ' |
Liabilities for insurance products | 3,201.30 | ' |
Other liabilities | 199.1 | ' |
Investment borrowings | 383.4 | ' |
Loss accrual | 514.5 | ' |
Liabilities of subsidiary being sold | $4,298.30 | ' |
OUT_OF_PERIOD_ADJUSTMENTS_Deta
OUT OF PERIOD ADJUSTMENTS (Details) (Out of period adjustment, USD $) | 6 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Out of period adjustment | ' | ' |
Out of period adjustment, increase in other operating costs and expenses | $2.40 | ' |
Out of period adjustment, decrease in tax expense | 0.8 | 3.2 |
Out of period adjustment, effect on net loss | 1.6 | 6 |
Out of period adjustment, effect on earnings per diluted share (in dollars per share) | ($0.01) | ($0.03) |
Out of period adjustment, increase in insurance policy benefits | ' | 6.7 |
Out of period adjustment, increase in amortization expense | ' | ($2.50) |
INVESTMENTS_NARRATIVE_DETAILS
INVESTMENTS - NARRATIVE (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Trading securities | $227.40 | ' | $227.40 | ' | $247.60 |
Premium deficiencies adjustments to present value of future profits | -134 | ' | -134 | ' | ' |
Reduction to deferred acquisition costs due to unrealized gains that would result in premium deficiency if unrealized gains were realized | -143.3 | ' | -143.3 | ' | ' |
Accumulated Other Comprehensive Income Adjustment to Insurance Liabilities Due to Unrealized Gains That Would Result in Premium Deficiency if Unrealized Gains Were Realized | -168.1 | ' | -168.1 | ' | 0 |
Increase to deferred tax assets due to unrealized gains that would result in premium deficiency if unrealized gains were realized | 158.3 | ' | 158.3 | ' | ' |
Net realized investment gains (losses) | 12.4 | 3.2 | 35.8 | 18.5 | ' |
Net realized investment gains, excluding impairment losses | 12.4 | 3.8 | 47.7 | 19.1 | ' |
Sales of investments | ' | ' | 1,377.20 | 943.5 | ' |
Other than temporary impairments recorded | ' | ' | 11.9 | 0.6 | ' |
Value of available for sale securities sold | ' | ' | 156.9 | ' | ' |
Impairment losses related to writedown of mortgage loans which losses major tenants | ' | ' | 3.9 | ' | ' |
Impairment losses related to private company investments did not meet expectations of previous valuations | ' | ' | 8 | ' | ' |
Other-than-temporary impairments included in accumulated other comprehensive income | ' | ' | 3.7 | ' | ' |
Total fixed maturities, available for sale | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Net realized investment gains (losses) | 1.9 | 9.4 | 37.9 | 24 | ' |
Available-for-sale Securities, Gross Realized Losses | 3 | 1.4 | 8.5 | 3.4 | ' |
Equity securities | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Net realized investment gains (losses) | 7.9 | 0 | 7.9 | 0 | ' |
Commercial mortgage loan | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Net realized investment gains (losses) | 1.1 | 0 | 1.1 | 0.7 | ' |
Other securities | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Net realized investment gains (losses) | 1.5 | -5.6 | 0.8 | -5.6 | ' |
US states and political subdivisions debt securities | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Available-for-sale Securities, Gross Realized Losses | ' | ' | 0.5 | ' | ' |
Corporate debt securities | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Available-for-sale Securities, Gross Realized Losses | ' | ' | 8 | ' | ' |
Embedded derivative financial instruments | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Embedded Derivative, Gain on Embedded Derivative | ' | ' | 5.9 | 10.5 | ' |
Marketable securities | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Net realized investment gains, excluding impairment losses | ' | ' | $41.80 | $29.60 | ' |
INVESTMENTS_SCHEDULE_OF_UNREAL
INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
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 | $8.50 | $6.50 | ||
Net unrealized gains on all other investments | 2,157.80 | 1,322.60 | ||
Adjustment to present value of future profits | -157.6 | [1] | -47.7 | [1] |
Adjustment to deferred acquisition costs | -395.5 | -137 | ||
Adjustment to insurance liabilities | -168.1 | 0 | ||
Unrecognized net loss related to deferred compensation plan | -6.4 | -7.1 | ||
Deferred income tax liabilities | -512.6 | -405.5 | ||
Accumulated other comprehensive income | $926.10 | $731.80 | ||
[1] | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003 (the date Conseco, Inc., an Indiana corporation (our "Predecessor"), emerged from bankruptcy. |
INVESTMENTS_SCHEDULE_OF_AMORTI
INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND OTHER-THAN-TEMPORARY IMPAIRMENTS (DETAILS) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | $18,383.80 |
Gross unrealized gains | 2,184.70 |
Gross unrealized losses | -34.9 |
Estimated fair value | 20,533.60 |
Other-than-temporary impairments included in accumulated other comprehensive income | -3.7 |
Corporate debt securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 12,217.40 |
Gross unrealized gains | 1,688 |
Gross unrealized losses | -23.8 |
Estimated fair value | 13,881.60 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
US treasury and government | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 149.6 |
Gross unrealized gains | 10.7 |
Gross unrealized losses | -0.2 |
Estimated fair value | 160.1 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
US states and political subdivisions debt securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,944.30 |
Gross unrealized gains | 212.9 |
Gross unrealized losses | -6.3 |
Estimated fair value | 2,150.90 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
Asset-backed securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,244.50 |
Gross unrealized gains | 84.2 |
Gross unrealized losses | -2.6 |
Estimated fair value | 1,326.10 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
Collateralized debt obligations | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 319.9 |
Gross unrealized gains | 5.2 |
Gross unrealized losses | -0.9 |
Estimated fair value | 324.2 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
Commercial mortgage backed securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,173.90 |
Gross unrealized gains | 92.5 |
Gross unrealized losses | -0.2 |
Estimated fair value | 1,266.20 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
Mortgage pass through securities | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 8.4 |
Gross unrealized gains | 0.5 |
Gross unrealized losses | 0 |
Estimated fair value | 8.9 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 |
Collateralized mortgage obligations | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 1,325.80 |
Gross unrealized gains | 90.7 |
Gross unrealized losses | -0.9 |
Estimated fair value | 1,415.60 |
Other-than-temporary impairments included in accumulated other comprehensive income | -3.7 |
Assets of CLIC being sold | Fixed Maturities [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Amortized cost | 3,470.70 |
Gross unrealized gains | 0 |
Gross unrealized losses | 0 |
Estimated fair value | 3,470.70 |
Other-than-temporary impairments included in accumulated other comprehensive income | $0 |
INVESTMENTS_SUMMARY_OF_INVESTM
INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Amortized Cost | ' | ' |
Due in one year or less | $164.70 | ' |
Due after one year through five years | 1,762.10 | ' |
Due after five years through ten years | 2,906.40 | ' |
Due after ten years | 9,478.10 | ' |
Subtotal | 14,311.30 | ' |
Structured securities | 4,072.50 | ' |
Total fixed maturities, available for sale | 18,383.80 | 21,860.60 |
Estimated Fair Value | ' | ' |
Due in one year or less | 169.5 | ' |
Due after one year through five years | 1,957.60 | ' |
Due after five years through ten years | 3,192.20 | ' |
Due after ten years | 10,873.30 | ' |
Subtotal | 16,192.60 | ' |
Structured securities | 4,341 | ' |
Total fixed maturities, available for sale | $20,533.60 | $23,178.30 |
INVESTMENTS_NET_REALIZED_INVES
INVESTMENTS - NET REALIZED INVESTMENT GAINS (LOSSES) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Gain (Loss) on Investments [Line Items] | ' | ' | ' | ' |
Total other-than-temporary impairment losses | $0 | ($0.60) | ($11.90) | ($0.60) |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Net impairment losses recognized | 0 | -0.6 | -11.9 | -0.6 |
Total realized gains | 12.4 | 3.2 | 35.8 | 18.5 |
Total fixed maturities, available for sale | ' | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' | ' |
Realized gains on sale | 4.9 | 10.8 | 46.4 | 27.4 |
Gross realized losses on sale | -3 | -1.4 | -8.5 | -3.4 |
Total other-than-temporary impairment losses | 0 | 0 | 0 | 0 |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Net impairment losses recognized | 0 | 0 | 0 | 0 |
Total realized gains | 1.9 | 9.4 | 37.9 | 24 |
Equity securities | ' | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' | ' |
Total realized gains | 7.9 | 0 | 7.9 | 0 |
Commercial mortgage loans | ' | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' | ' |
Total realized gains | 1.1 | 0 | 1.1 | 0.7 |
Impairments of mortgage loans and other investments | ' | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' | ' |
Total realized gains | 0 | -0.6 | -11.9 | -0.6 |
Other securities | ' | ' | ' | ' |
Gain (Loss) on Investments [Line Items] | ' | ' | ' | ' |
Total realized gains | $1.50 | ($5.60) | $0.80 | ($5.60) |
INVESTMENTS_SCHEDULE_OF_OTHER_
INVESTMENTS - SCHEDULE OF OTHER THAN TEMPORARY IMPAIRMENT (DETAILS) (Available-for-sale securities, USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
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 | ($1.30) | ($1.50) | ($1.30) | ($1.60) | ||||
Add: credit losses on other-than-temporary impairments not previously recognized | 0 | 0 | 0 | 0 | ||||
Less: credit losses on securities sold | 0.1 | 0 | 0.1 | 0.1 | ||||
Less: credit losses on securities impaired due to intent to sell | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] |
Add: credit losses on previously impaired securities | 0 | 0 | 0 | 0 | ||||
Less: increases in cash flows expected on previously impaired securities | 0 | 0 | 0 | 0 | ||||
Credit losses on fixed maturity securities, available for sale, end of period | ($1.20) | ($1.50) | ($1.20) | ($1.50) | ||||
[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_INVESTM1
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (DETAILS) (USD $) | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | $428.40 | $3,543.80 |
Unrealized losses, less than 12 months | -3.3 | -178.1 |
Fair value, twelve months or longer | 709.5 | 285.8 |
Unrealized losses, 12 months or longer | -31.6 | -30.2 |
Fair value, total | 1,137.90 | 3,829.60 |
Unrealized losses, total | -34.9 | -208.3 |
US treasury and government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 0 | 23.8 |
Unrealized losses, less than 12 months | 0 | -0.6 |
Fair value, twelve months or longer | 18.4 | 0 |
Unrealized losses, 12 months or longer | -0.2 | 0 |
Fair value, total | 18.4 | 23.8 |
Unrealized losses, total | -0.2 | -0.6 |
US states and political subdivisions debt securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 15.6 | 473.6 |
Unrealized losses, less than 12 months | -0.6 | -30.3 |
Fair value, twelve months or longer | 124.1 | 79.2 |
Unrealized losses, 12 months or longer | -5.7 | -8.7 |
Fair value, total | 139.7 | 552.8 |
Unrealized losses, total | -6.3 | -39 |
Corporate debt securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 173.3 | 2,406.10 |
Unrealized losses, less than 12 months | -1.1 | -132.8 |
Fair value, twelve months or longer | 423.2 | 170.3 |
Unrealized losses, 12 months or longer | -22.7 | -20.8 |
Fair value, total | 596.5 | 2,576.40 |
Unrealized losses, total | -23.8 | -153.6 |
Asset-backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 76.9 | 308.4 |
Unrealized losses, less than 12 months | -0.5 | -6.5 |
Fair value, twelve months or longer | 91.5 | 32.5 |
Unrealized losses, 12 months or longer | -2.1 | -0.7 |
Fair value, total | 168.4 | 340.9 |
Unrealized losses, total | -2.6 | -7.2 |
Collateralized debt obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 64.2 | 46.7 |
Unrealized losses, less than 12 months | -0.7 | -0.5 |
Fair value, twelve months or longer | 11.7 | 0 |
Unrealized losses, 12 months or longer | -0.2 | 0 |
Fair value, total | 75.9 | 46.7 |
Unrealized losses, total | -0.9 | -0.5 |
Commercial mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 14.8 | 161.8 |
Unrealized losses, less than 12 months | 0 | -5.8 |
Fair value, twelve months or longer | 19.2 | 0 |
Unrealized losses, 12 months or longer | -0.2 | 0 |
Fair value, total | 34 | 161.8 |
Unrealized losses, total | -0.2 | -5.8 |
Mortgage pass through securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 1.2 | 1.6 |
Unrealized losses, less than 12 months | 0 | 0 |
Fair value, twelve months or longer | 0.8 | 1.6 |
Unrealized losses, 12 months or longer | 0 | 0 |
Fair value, total | 2 | 3.2 |
Unrealized losses, total | 0 | 0 |
Collateralized mortgage obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 82.4 | 121.8 |
Unrealized losses, less than 12 months | -0.4 | -1.6 |
Fair value, twelve months or longer | 20.6 | 2.2 |
Unrealized losses, 12 months or longer | -0.5 | 0 |
Fair value, total | 103 | 124 |
Unrealized losses, total | -0.9 | -1.6 |
Equity securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value, less than twelve months | 34.3 | 26.8 |
Unrealized losses, less than 12 months | -0.4 | -4.9 |
Fair value, twelve months or longer | 20.3 | 0 |
Unrealized losses, 12 months or longer | -0.9 | 0 |
Fair value, total | 54.6 | 26.8 |
Unrealized losses, total | ($1.30) | ($4.90) |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net income (loss) | $78.10 | $77.10 | ($149.90) | $89 |
Add: interest expense on 7.0% Senior Debentures due 2016 (the 7.0% Debentures), net of income taxes | 0 | 0.4 | 0 | 1.6 |
Net income (loss) for diluted earnings per share | $78.10 | $77.50 | ($149.90) | $90.60 |
Shares: | ' | ' | ' | ' |
Weighted average shares outstanding for basic earnings per share (in shares) | 216,538 | 220,498 | 218,422 | 221,290 |
Effect of dilutive securities on weighted average shares: | ' | ' | ' | ' |
7.0% Debentures (in shares) | 0 | 5,692 | 0 | 11,141 |
Stock options, restricted stock and performance units (in shares) | 2,390 | 2,412 | 0 | 2,620 |
Warrants (in shares) | 3,180 | 2,291 | 0 | 2,129 |
Dilutive potential common shares (in shares) | 5,570 | 10,395 | 0 | 15,890 |
Weighted average shares outstanding for diluted earnings per share (in shares) | 222,108 | 230,893 | 218,422 | 237,180 |
Convertible subordinated debt | ' | ' | ' | ' |
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | ' | ' | ' | ' |
Interest rate | 7.00% | ' | 7.00% | ' |
EARNINGS_PER_SHARE_NARRATIVE_D
EARNINGS PER SHARE - NARRATIVE (Details) (USD $) | 6 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Rate | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Common shares excluded from diluted shares | 5,687 | ' |
Conversion rate per $1000 principal amount of 7.0% convertible debentures, shares | ' | 182.1494 |
Par value of each 7.0% convertible debenture | ' | $1,000 |
Conversion price (in dollars per share) | ' | $5.49 |
Stock Options, Restricted Stock and Performance Units | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Common shares excluded from diluted shares | 2,464 | ' |
Warrants | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Common shares excluded from diluted shares | 3,223 | ' |
Convertible subordinated debt | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Interest rate | 7.00% | ' |
BUSINESS_SEGMENTS_DETAILS
BUSINESS SEGMENTS (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Revenues: | ' | ' | ' | ' | ||||
Fee revenue and other income | $7 | $6.40 | $13.40 | $12.90 | ||||
Total revenues | 969.7 | 961.4 | 1,920.30 | 1,969.20 | ||||
Benefits and expenses: | ' | ' | ' | ' | ||||
Insurance policy benefits | 691.1 | 673.2 | 1,381.40 | 1,427.30 | ||||
Other operating costs and expenses | 201.5 | 179.8 | 395.6 | 369.4 | ||||
Total expenses | 872.8 | 863.2 | 1,731.40 | 1,799.70 | ||||
Pre-tax operating earnings | 96.9 | 98.2 | 188.9 | 169.5 | ||||
Gain related to reinsurance transaction | -3.8 | 0 | -3.8 | 0 | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ||||
Total segment revenues | 969.7 | 961.4 | 1,920.30 | 1,969.20 | ||||
Net realized investment gains | 11.7 | 1.6 | 33 | 14.8 | ||||
Revenues related to certain non-strategic investments and earnings attributable to VIEs | 7.3 | 8.2 | 13.6 | 15.1 | ||||
Revenues of CLIC being sold | 104.3 | 110.3 | 210.8 | 225 | ||||
Total revenues | 1,093 | 1,081.50 | 2,177.70 | 2,224.10 | ||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | 10.1 | -29 | 25.3 | -32.1 | ||||
Amortization related to fair value changes in embedded derivative liabilities | -2.7 | 10.5 | -6.9 | 11.5 | ||||
Amortization related to net realized investment gains | 0.1 | 0.4 | 0.5 | 1.2 | ||||
Expenses related to certain non-strategic investments and earnings attributable to VIEs | 10.2 | 11.1 | 19.8 | 19.9 | ||||
Loss on extinguishment or modification of debt | 0.6 | 7.7 | 0.6 | 65.4 | ||||
Loss on sale of subsidiary | 0 | 0 | 278.6 | 0 | ||||
Expenses of CLIC being sold | 91.3 | 102.9 | 187.4 | 209.2 | ||||
Total benefits and expenses | 978.6 | 966.8 | 2,232.90 | 2,074.80 | ||||
Income (loss) before income taxes | 114.4 | 114.7 | -55.2 | 149.3 | ||||
Tax expense on period income | 40.3 | 42.6 | 79.3 | 75.8 | ||||
Valuation allowance for deferred taxes and other tax items | -4 | -5 | 15.4 | -15.5 | ||||
Net income (loss) | 78.1 | 77.1 | -149.9 | 89 | ||||
Bankers Life | ' | ' | ' | ' | ||||
Revenues: | ' | ' | ' | ' | ||||
Annuities | 7.7 | 8.6 | 15.2 | 16.5 | ||||
Health | 320.5 | 334.1 | 651 | 666.7 | ||||
Life | 79.9 | 76.4 | 158.2 | 153.9 | ||||
Net investment income (loss) | 247.6 | [1] | 226.6 | [1] | 472 | [1] | 488.3 | [1] |
Fee revenue and other income | 5.8 | [1] | 4 | [1] | 11.1 | [1] | 7.7 | [1] |
Total revenues | 661.5 | 649.7 | 1,307.50 | 1,333.10 | ||||
Benefits and expenses: | ' | ' | ' | ' | ||||
Insurance policy benefits | 427.9 | 434.1 | 842.9 | 904.6 | ||||
Amortization | 45.4 | 45.7 | 93.6 | 100.2 | ||||
Interest expense on investment borrowings | 1.9 | 1.7 | 3.8 | 3.1 | ||||
Other operating costs and expenses | 98.9 | 89.1 | 195.6 | 184 | ||||
Total expenses | 574.1 | 570.6 | 1,135.90 | 1,191.90 | ||||
Pre-tax operating earnings | 87.4 | 79.1 | 171.6 | 141.2 | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ||||
Total segment revenues | 661.5 | 649.7 | 1,307.50 | 1,333.10 | ||||
Washington National | ' | ' | ' | ' | ||||
Revenues: | ' | ' | ' | ' | ||||
Annuities | 1.4 | 1.7 | 2.4 | 3.2 | ||||
Health | 148.8 | 145.8 | 297.7 | 291.2 | ||||
Life | 6.5 | 5.6 | 12.2 | 11.6 | ||||
Net investment income (loss) | 71.8 | [1] | 69.8 | [1] | 140.8 | [1] | 147.7 | [1] |
Fee revenue and other income | 0.2 | [1] | 0.2 | [1] | 0.4 | [1] | 0.4 | [1] |
Total revenues | 228.7 | 223.1 | 453.5 | 454.1 | ||||
Benefits and expenses: | ' | ' | ' | ' | ||||
Insurance policy benefits | 132.8 | 130.3 | 264.6 | 268 | ||||
Amortization | 16 | 16.2 | 32.3 | 33.3 | ||||
Interest expense on investment borrowings | 0.5 | 0.5 | 0.9 | 1 | ||||
Other operating costs and expenses | 47.1 | 40.3 | 92.3 | 82 | ||||
Total expenses | 196.4 | 187.3 | 390.1 | 384.3 | ||||
Pre-tax operating earnings | 32.3 | 35.8 | 63.4 | 69.8 | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ||||
Total segment revenues | 228.7 | 223.1 | 453.5 | 454.1 | ||||
Colonial Penn | ' | ' | ' | ' | ||||
Revenues: | ' | ' | ' | ' | ||||
Health | 0.9 | 1.1 | 1.9 | 2.2 | ||||
Life | 60.8 | 56.9 | 120.3 | 112.7 | ||||
Net investment income (loss) | 10.5 | [1] | 9.9 | [1] | 21.2 | [1] | 19.8 | [1] |
Fee revenue and other income | 0.3 | [1] | 0.2 | [1] | 0.5 | [1] | 0.4 | [1] |
Total revenues | 72.5 | 68.1 | 143.9 | 135.1 | ||||
Benefits and expenses: | ' | ' | ' | ' | ||||
Insurance policy benefits | 43.2 | 41.2 | 87.9 | 84.2 | ||||
Amortization | 3.8 | 3.7 | 7.8 | 7.4 | ||||
Other operating costs and expenses | 21.7 | 22 | 50.6 | 47.7 | ||||
Total expenses | 68.7 | 66.9 | 146.3 | 139.3 | ||||
Pre-tax operating earnings | 3.8 | 1.2 | -2.4 | -4.2 | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ||||
Total segment revenues | 72.5 | 68.1 | 143.9 | 135.1 | ||||
Other CNO Business | ' | ' | ' | ' | ||||
Revenues: | ' | ' | ' | ' | ||||
Health | 0 | 6.1 | 0 | 12.3 | ||||
Net investment income (loss) | 0 | [1] | 8.4 | [1] | 0 | [1] | 16.8 | [1] |
Total revenues | 0 | 14.5 | 0 | 29.1 | ||||
Benefits and expenses: | ' | ' | ' | ' | ||||
Insurance policy benefits | 0 | 15.3 | 0 | 30.9 | ||||
Other operating costs and expenses | 0 | 6.4 | 0 | 12.7 | ||||
Total expenses | 0 | 21.7 | 0 | 43.6 | ||||
Pre-tax operating earnings | 0 | -7.2 | 0 | -14.5 | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ||||
Total segment revenues | 0 | 14.5 | 0 | 29.1 | ||||
Corporate operations | ' | ' | ' | ' | ||||
Revenues: | ' | ' | ' | ' | ||||
Net investment income (loss) | 5.7 | 4.5 | 12.7 | 14.6 | ||||
Fee revenue and other income | 1.3 | 1.5 | 2.7 | 3.2 | ||||
Total revenues | 7 | 6 | 15.4 | 17.8 | ||||
Benefits and expenses: | ' | ' | ' | ' | ||||
Interest expense on investment borrowings | 0 | 0 | 0 | 0.1 | ||||
Interest expense on corporate debt | 11.1 | 13.1 | 22.2 | 28.2 | ||||
Other operating costs and expenses | 22.5 | 3.6 | 36.9 | 12.3 | ||||
Total expenses | 33.6 | 16.7 | 59.1 | 40.6 | ||||
Pre-tax operating earnings | -26.6 | -10.7 | -43.7 | -22.8 | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ' | ' | ' | ' | ||||
Total segment revenues | $7 | $6 | $15.40 | $17.80 | ||||
[1] | It is not practicable to provide additional components of revenue by product or services. |
ACCOUNTING_FOR_DERIVATIVES_Det
ACCOUNTING FOR DERIVATIVES (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Derivative [Line Items] | ' | ' | ' | ' | ' |
Gain (Loss) on Reinsurance Transaction | $3.80 | $0 | $3.80 | $0 | ' |
Fixed maturity securities that contain embedded derivatives classified as trading securities | 221.1 | ' | 221.1 | ' | 180.6 |
Assets of CLIC being sold | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' |
Fixed maturity securities that contain embedded derivatives classified as trading securities | 24.3 | ' | 24.3 | ' | ' |
Equity swap | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' |
Estimated fair value | 130.7 | ' | 130.7 | ' | 156.2 |
Equity swap | Investment income | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' |
Increase (decrease) in earnings due to sale of trading portfolio | ' | ' | 36.7 | 75.9 | ' |
Equity swap | Assets of CLIC being sold | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' |
Estimated fair value | 4.3 | ' | 4.3 | ' | ' |
Embedded derivative financial instruments | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' |
Increase (decrease) in earnings due to sale of trading portfolio | 7.4 | 18.5 | 18.4 | 20.6 | ' |
Fair value of derivatives | $980.30 | ' | $980.30 | ' | $903.70 |
REINSURANCE_Details
REINSURANCE (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' | ' |
Ceded premiums written | ' | $55.40 | $55.10 | $107.50 | $107.10 |
Reinsurance effect on claims and benefits incurred, amount ceded | ' | 61.2 | 39.1 | 120.8 | 92.7 |
Assumed premiums written | ' | 3.8 | 15.4 | 14.7 | 29.1 |
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% | ' | ' | ' | ' |
Gain (Loss) on Reinsurance Transaction | ' | 3.8 | 0 | 3.8 | 0 |
Coventry health care marketing and quota share agreements | ' | ' | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' | ' |
Assumed premiums written | ' | $0 | $10.80 | $6.80 | $19.70 |
INCOME_TAXES_INCOME_TAXES_COMP
INCOME TAXES INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Current tax expense | $3.90 | $2.70 | $6.10 | $5.40 |
Deferred tax expense | 36.4 | 40.8 | 73.2 | 71.8 |
Income tax expense calculated based on estimated annual effective tax rate | 40.3 | 43.5 | 79.3 | 77.2 |
Tax expense related to tax gain on sale | 8.4 | 0 | 21.6 | 0 |
Previously unrecognized tax benefit now recognized as a result of the gain | 0 | 0 | -7.4 | 0 |
Valuation allowance related to the gain | -8.4 | 0 | -14.2 | 0 |
Valuation allowance increase related to the decrease in projected future taxable income | 0 | 0 | 19.4 | 0 |
Valuation allowance reduction resulting from the realization of capital gains and utilization of loss carryforwards | -4 | -5 | -4 | -15.5 |
Deferred tax benefit related to loss on extinguishment or modification of debt | 0 | -0.9 | 0 | -1.4 |
Total income tax expense | $36.30 | $37.60 | $94.70 | $60.30 |
INCOME_TAXES_INCOME_TAXES_RECO
INCOME TAXES INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
U.S. statutory corporate rate | 35.00% | 35.00% |
Non-taxable income and nondeductible benefits, net | -1.00% | -0.50% |
State taxes | 1.50% | 1.40% |
Estimated annual effective tax rate | 35.50% | 35.90% |
INCOME_TAXES_INCOME_TAXES_DEFE
INCOME TAXES INCOME TAXES - DEFERRED ASSETS AND LIABILIITES (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Net federal operating loss carryforwards | $1,141.80 | $1,240.20 |
Net state operating loss carryforwards | 18.4 | 20 |
Tax credits | 40.6 | 43.9 |
Capital loss carryforwards | 0.6 | 13.4 |
Investments | 68.2 | 74.3 |
Insurance liabilities | 622.2 | 723.8 |
Other | -1.7 | 64.7 |
Gross deferred tax assets | 1,890.10 | 2,180.30 |
Deferred tax liabilities: | ' | ' |
Present value of future profits and deferred acquisition costs | -318.1 | -306.8 |
Accumulated other comprehensive income | -512.6 | -405.5 |
Gross deferred tax liabilities | -830.7 | -712.3 |
Net deferred tax assets before valuation allowance | 1,059.40 | 1,468 |
Valuation allowance | -296 | -294.8 |
Net deferred tax assets | 763.4 | 1,173.20 |
Current income taxes accrued | -32.9 | -26 |
Income tax assets, net | $730.50 | $1,147.20 |
INCOME_TAXES_INCOME_TAXES_NET_
INCOME TAXES INCOME TAXES - NET OPERATING LOSSES (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Operating Loss Carryforwards [Line Items] | ' |
Capital loss carryforwards | $0 |
Total loss carryforwards | 3,806 |
Capital loss carryforwards, unrecognized tax benefit | 1.8 |
Total loss carryforwards, unrecognized tax benefit | -541.9 |
Capital loss carryforwards, net of unrecognized tax benefits | 1.8 |
Total loss carryforwards, net of unrecognized tax benefits | 3,264.10 |
Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 1,045.20 |
Net operating loss carryforward, unrecognized tax benefit | -344.7 |
Net operating loss carryforwards, net of unrecognized tax benefits | 700.5 |
Non life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 2,760.80 |
Net operating loss carryforward, unrecognized tax benefit | -199 |
Net operating loss carryforwards, net of unrecognized tax benefits | 2,561.80 |
Carryforward Expiration 2018 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-18 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 120.6 |
Carryforward Expiration 2018 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 120.6 |
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 | 152 |
Carryforward Expiration 2022 | Life insurance companies | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | 152 |
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 | 2,868.70 |
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 | 2,126.10 |
Carryforward Expiration 2025 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-25 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 115.3 |
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 | 115.3 |
Carryforward Expiration 2027 | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards, expiration dates | 31-Dec-27 |
Capital loss carryforwards | 0 |
Total loss carryforwards | 202.6 |
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 | 202.6 |
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_NARR
INCOME TAXES INCOME TAXES - NARRATIVE (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2008 |
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' |
Loss on sale of subsidiary | $0 | $0 | $278.60 | $0 | ' | ' |
Loss on extinguishment or modification of debt | -0.6 | -7.7 | -0.6 | -65.4 | ' | ' |
Deferred tax assets more likely than not to be realized through future taxable earnings | 763.4 | ' | 763.4 | ' | ' | ' |
Assumed growth rate for the next five years included in deferred tax valuation analysis | 3.00% | ' | 3.00% | ' | ' | ' |
Valuation allowance increase related to the decrease in projected future taxable income | 0 | 0 | -19.4 | 0 | ' | ' |
Valuation allowance for deferred taxes and other tax items | -4 | -5 | 15.4 | -15.5 | ' | ' |
Estimated normalized annual taxable income for the current year | ' | ' | 315 | ' | ' | ' |
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% | ' | ' | ' |
Federal long-term tax exempt rate | 3.32% | ' | 3.32% | ' | ' | ' |
Ownership change threshold restricting NOL usage | 50.00% | ' | 50.00% | ' | ' | ' |
Capital loss carryforwards, net of unrecognized tax benefits | 1.8 | ' | 1.8 | ' | ' | ' |
Net state operating loss carryforwards | 18.4 | ' | 18.4 | ' | 20 | ' |
Loss on investment in senior health | ' | ' | ' | ' | ' | 878 |
Income Tax Examination, Expired Capital Loss Carryforwards if IRS position is correct | ' | ' | ' | ' | 473 | ' |
Unrecognized tax benefit related to loss on investment in Senior Health | ' | ' | 166 | ' | ' | ' |
Increase in valuation allowance if unrecognized tax benefit is recognized | 41 | ' | 41 | ' | ' | ' |
Non life insurance companies | ' | ' | ' | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' |
Operating loss carryforwards | 2,760.80 | ' | 2,760.80 | ' | ' | ' |
Loss on investment in senior health | ' | ' | ' | ' | ' | 136 |
Life insurance companies | ' | ' | ' | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' |
Operating loss carryforwards | 1,045.20 | ' | 1,045.20 | ' | ' | ' |
Loss on investment in senior health | ' | ' | ' | ' | ' | 742 |
Internal Revenue Service | ' | ' | ' | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' |
Operating loss carryforwards | $3,300 | ' | $3,300 | ' | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE2
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS OUTSTANDING (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 28, 2012 |
Debt Instruments [Abstract] | ' | ' | ' |
Direct corporate obligations | $827,300,000 | $856,400,000 | ' |
Convertible subordinated debt | ' | ' | ' |
Debt Instruments [Abstract] | ' | ' | ' |
Interest rate | 7.00% | ' | ' |
Senior secured credit agreement | ' | ' | ' |
Debt Instruments [Abstract] | ' | ' | ' |
Direct corporate obligations | 555,500,000 | 581,500,000 | ' |
Unamortized Discount | -3,200,000 | -3,600,000 | ' |
Senior secured note 6.375 percent | ' | ' | ' |
Debt Instruments [Abstract] | ' | ' | ' |
Interest rate | 6.38% | ' | ' |
Debentures | ' | ' | ' |
Debt Instruments [Abstract] | ' | ' | ' |
Direct corporate obligations | 0 | 3,500,000 | ' |
Senior notes | Senior secured note 6.375 percent | ' | ' | ' |
Debt Instruments [Abstract] | ' | ' | ' |
Direct corporate obligations | $275,000,000 | $275,000,000 | $275,000,000 |
Interest rate | ' | ' | 6.38% |
NOTES_PAYABLE_DIRECT_CORPORATE3
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - NEW SENIOR SECURED CREDIT AGREEMENT (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jul. 01, 2014 | Jun. 30, 2014 | 30-May-14 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Jun. 30, 2014 | Sep. 28, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Jun. 30, 2014 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Sep. 28, 2012 | Jun. 30, 2014 | Sep. 28, 2012 | Sep. 28, 2012 | |
Bankers Life | Assets of CLIC being sold | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Term loan facility, six-year | Term loan facility, four-year | Revolving credit facility | 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 | Notes payable to banks | ||||||
Wilton Reassurance Company [Member] | 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 | Term loan facility, six-year | Term loan facility, six-year | Term loan facility, six-year | 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 | Term loan facility, four-year | Term loan facility, four-year | Term loan facility, four-year | Revolving credit facility | Revolving credit facility | Revolving credit facility | Uncommitted subfacility | Letter of credit | ||||||||||
Maximum | Maximum | Minimum | 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 | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | Senior secured credit agreement | |||||||||||||||
Eurodollar rate | Base rate | Base rate subject to eurodollar floor | Base rate floor | Eurodollar rate | Base rate | Base rate subject to eurodollar floor | Base rate floor | Base rate | Eurodollar floor | Maximum | Maximum | |||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable – direct corporate obligations | $827,300,000 | ' | $827,300,000 | ' | $856,400,000 | ' | ' | ' | $555,500,000 | $581,500,000 | ' | ' | ' | ' | ' | ' | ' | $393,000,000 | $425,000,000 | ' | ' | ' | ' | $162,500,000 | $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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% | ' | 2.75% | 1.75% | 1.00% | 2.25% | 3.00% | ' | 2.25% | 1.25% | 0.75% | 2.00% | ' | 2.00% | 3.00% | ' | ' |
Additional debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mandatory prepayment required to be made with net proceeds exceeding a certain amount from sale of subsidiary | ' | ' | ' | ' | ' | ' | 125,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gains (Losses) on Extinguishment of Debt | -600,000 | -7,700,000 | -600,000 | -65,400,000 | ' | ' | ' | -200,000 | -400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurance recapture fee paid | ' | ' | ' | ' | ' | 28,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, threshold requiring equal debt repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mandatory prepayments, reduced percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, maximum threshold for repayment requirement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio, percentage required for no mandatory prepayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio required | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to capitalization ratio at period end | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest coverage ratio required | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lesser of interest coverage ratio required | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.81 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 437.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum combined statutory capital and surplus | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Combined statutory capital and surplus at period end | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,057,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE4
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 28, 2012 |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable – direct corporate obligations | $827,300,000 | $856,400,000 | ' |
Senior secured note 6.375 percent | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Interest rate | 6.38% | ' | ' |
Senior secured note 6.375 percent | Senior notes | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable – direct corporate obligations | 275,000,000 | 275,000,000 | 275,000,000 |
Interest rate | ' | ' | 6.38% |
Limit of restricted payments permitted, amount | 175,000,000 | ' | ' |
Limit of restricted payments permitted, amount of allowed additional payments | 178,000,000 | ' | ' |
Senior secured note 6.375 percent | Senior notes | Minimum | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
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 | ' | ' |
Senior secured note 6.375 percent | Senior notes | Maximum | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt to capitalization ratio, threshold requiring equal debt repayment | 17.50% | ' | ' |
NOTES_PAYABLE_DIRECT_CORPORATE5
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - 7.0% DEBENTURES AND 6.375% NOTES AND 6.375% NOTES (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | 30-May-14 | 30-May-14 | Jun. 30, 2014 |
Convertible subordinated debt | Senior secured credit agreement | Senior secured credit agreement | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Repurchased Face Amount | ' | ' | ' | ' | $3.50 | ' | ' |
Debt Instrument, Repurchase Amount | ' | ' | ' | ' | 3.7 | ' | ' |
Gains (Losses) on Extinguishment of Debt | ($0.60) | ($7.70) | ($0.60) | ($65.40) | ' | ($0.20) | ($0.40) |
NOTES_PAYABLE_DIRECT_CORPORATE6
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - SCHEDULED REPAYMENT (DETAILS) (USD $) | Jun. 30, 2014 |
In Millions, unless otherwise specified | |
Debt Disclosure [Abstract] | ' |
2015 | $73 |
2016 | 79.3 |
2017 | 23 |
2018 | 4.2 |
2019 | 376 |
Thereafter | 275 |
Long-term Debt | $830.50 |
INVESTMENT_BORROWINGS_Details
INVESTMENT BORROWINGS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Borrowings due September 2015 | Borrowings due October 2015 | Borrowings due June 2016 | Borrowings due June 2016 rate two | Borrowings due October 2016 | Borrowings due November 2016 | Borrowings due November 2016 rate two | Borrowings due June 2017 | Borrowings due August 2017 | Borrowings due August 2017 rate two | Borrowings due October 2017 | Borrowings due November 2017 rate two | Borrowings due January 2018 | Borrowings due January 2018 rate two | Borrowings due February 2018 | Borrowings due February 2018 rate two | Borrowings due February 2018 rate three | Borrowings due May 2018 | Borrowings due July 2018 | Borrowings due August 2018 | Borrowings due January 2019 | Borrowings due February 2019 | Borrowings due March 2019 | Borrowings due June 2020 | Borrowings due March 2023 | Borrowings due June 2025 | Assets of CLIC being sold | Assets of CLIC being sold | Assets of CLIC being sold | Assets of CLIC being sold | Assets of CLIC being sold | ||
Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Borrowings due November 2015 rate two | Borrowings due December 2015 | Borrowings due July 2017 | Borrowings due November 2017 | |||||
Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | Federal Home Loan Bank advances | ||||||||||||||||||||||||||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal Home Loan Bank stock | ' | ' | $73.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22.50 | ' | ' | ' | ' |
Federal Home Loan Bank, Advances, collateral pledged | ' | ' | 1,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 503.9 | ' | ' | ' | ' |
Investment borrowings | 1,507.60 | 1,900 | 1,499.20 | ' | 50 | 50 | 100 | 75 | 100 | 50 | 50 | 57.7 | 50 | 75 | 100 | 50 | 50 | 50 | 50 | 50 | 22 | 100 | 50 | 50 | 50 | 50 | 100 | 21.8 | 27.2 | 20.5 | 383.4 | 146.4 | 100 | 100 | 37 |
Maturity date | ' | ' | ' | ' | 30-Sep-15 | 31-Oct-15 | 30-Jun-16 | 30-Jun-16 | 31-Oct-16 | 30-Nov-16 | 30-Nov-16 | 30-Jun-17 | 31-Aug-17 | 31-Aug-17 | 31-Oct-17 | 30-Nov-17 | 31-Jan-18 | 31-Jan-18 | 28-Feb-18 | 28-Feb-18 | 28-Feb-18 | 30-May-18 | 31-Jul-18 | 31-Aug-18 | 31-Jan-19 | 28-Feb-19 | 31-Mar-19 | 30-Jun-20 | 31-Mar-23 | 30-Jun-25 | ' | 30-Nov-15 | 31-Dec-15 | 31-Jul-17 | 30-Nov-17 |
Interest rate | ' | ' | ' | ' | 0.53% | 0.50% | 0.59% | 0.39% | 0.41% | 0.50% | 0.62% | 0.58% | 0.42% | 0.38% | 0.66% | 0.74% | 0.58% | 0.57% | 0.53% | 0.32% | 0.56% | 0.60% | 0.70% | 0.34% | 0.65% | 0.32% | 0.63% | 1.96% | 2.16% | 2.94% | ' | 5.30% | 4.71% | 3.90% | 3.75% |
Aggregate Fee to Prepay All Fixed Rate FHLB Borrowings | ' | ' | 29.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense on FHLB Borrowings | ' | ' | 13.8 | 13.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured Debt, Repurchase Agreements | $8.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CHANGES_IN_COMMON_STOCK_Detail
CHANGES IN COMMON STOCK (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 1 Months Ended | 2 Months Ended | ||||||
Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | 31-May-11 | Feb. 28, 2014 | ||
Common stock | Common stock | Common stock | Common stock and additional paid-in capital | Common stock and additional paid-in capital | Common share repurchase program | Previously reported | ||||||
Stock options | Restricted and Performance Stock | |||||||||||
Number of common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Balance, beginning of year (in shares) | 220,323,823 | 220,323,823 | ' | ' | 220,324,000 | ' | ' | ' | ' | ' | ' | |
Treasury stock purchased and retired (in shares) | ' | ' | ' | ' | -7,834,000 | ' | ' | ' | ' | ' | ' | |
Shares issued under employee benefit compensation plans (in shares) | ' | ' | ' | ' | ' | 732,000 | 533,000 | [1] | ' | ' | ' | ' |
Balance, end of year (in shares) | ' | 213,755,190 | ' | 220,323,823 | 213,755,000 | ' | ' | ' | ' | ' | ' | |
Number of stock tendered for payment of federal and state taxes owed | ' | 227,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Stock repurchase program, authorized amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 | ' | |
Stock repurchase program, increase in authorized amount | ' | ' | ' | 800,000,000 | ' | ' | ' | ' | ' | ' | ' | |
Stock retired during period, value | ' | 136,600,000 | 50,000,000 | ' | ' | ' | ' | 136,600,000 | 50,000,000 | ' | ' | |
Stock repurchase program, remaining repurchase authorized amount | ' | 260,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock dividends paid | ' | ($26,300,000) | ($11,100,000) | ' | ' | ' | ' | ' | ' | ' | ' | |
Dividends (in dollars per share) | ' | $0.12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common Stock, Dividends, Per Share, Declared | $0.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.03 | |
[1] | Such amount was reduced by 227 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock. |
SALES_INDUCEMENTS_Details
SALES INDUCEMENTS (Details) (USD $) | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Deferred Revenue Arrangement [Line Items] | ' | ' | ' |
Deferred sales inducements | $3.10 | $2.50 | ' |
Deferred sales inducements, amortization expense | 9.4 | 13.3 | ' |
Unamortized deferred sales inducements | 102.3 | ' | 108.6 |
Insurance liabilities for persistency bonus benefits | 27.6 | ' | 28.9 |
Assets of CLIC being sold | ' | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' | ' |
Unamortized deferred sales inducements | 33.9 | ' | ' |
Insurance liabilities for persistency bonus benefits | $25.70 | ' | ' |
ASSETS_AND_LIABILITIES_SUBJECT2
ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS (Details) (Call option, USD $) | Jun. 30, 2014 | Dec. 31, 2013 | |
In Millions, unless otherwise specified | |||
Offsetting Assets [Line Items] | ' | ' | |
Gross amounts of recognized assets | $130.70 | [1] | $156.20 |
Derivative Asset, Collateral, Obligation to Return Cash, Offset | 0 | [1] | 0 |
Derivative Asset | 130.7 | [1] | 156.2 |
Gross amounts not offset in the balance sheet, financial instruments | 0 | [1] | 0 |
Gross amounts not offset in the balance sheet, cash collateral received | 0 | [1] | 0 |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 130.7 | [1] | 156.2 |
Assets of CLIC being sold | ' | ' | |
Offsetting Assets [Line Items] | ' | ' | |
Gross amounts of recognized assets | $4.30 | [1] | ' |
[1] | Includes $4.3 million classified as "Assets of subsidiary being sold". |
ASSETS_AND_LIABILITIES_SUBJECT3
ASSETS AND LIABILITIES SUBJECT TO OFFSETTING DISCLOSURE REQUIREMENTS Schedule of Repurchase Agreements (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Offsetting [Abstract] | ' | ' |
Gross amounts of recognized liabilities | $8.40 | ' |
Gross amounts offset in the balance sheet | 0 | ' |
Net amounts of liabilities presented in the balance sheet | 8.4 | ' |
Gross amounts not offset in the balance sheet, Financial instruments | 0 | ' |
Gross amounts not offset in the balance sheet, Cash collateral pledged | 0 | ' |
Net amount | 8.4 | ' |
Securities sold under agreements to repurchase, fair value of collateral | $10.50 | $0 |
LITIGATION_AND_OTHER_LEGAL_PRO1
LITIGATION AND OTHER LEGAL PROCEEDINGS (DETAILS) | 6 Months Ended |
Jun. 30, 2014 | |
states | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Number of states participating in examination of compliance with unclaimed property laws | 38 |
CONSOLIDATED_STATEMENT_CASH_FL2
CONSOLIDATED STATEMENT CASH FLOWS (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' | ' | ' | |
Net income (loss) | $78.10 | $77.10 | ($149.90) | $89 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' | ' | |
Amortization and depreciation | ' | ' | 146.2 | 172.6 | |
Income taxes | ' | ' | 92.7 | 57.4 | |
Insurance liabilities | ' | ' | 155.2 | 205.3 | |
Accrual and amortization of investment income | ' | ' | -77.5 | -125 | |
Deferral of policy acquisition costs | ' | ' | -116.9 | -107.2 | |
Net realized investment gains | ' | ' | -35.8 | -18.5 | |
Payment to reinsurer pursuant to long-term care business reinsured | ' | ' | -590.3 | 0 | |
Loss on sale of subsidiary | 0 | 0 | 278.6 | 0 | |
Gain related to reinsurance transaction | -3.8 | 0 | -3.8 | 0 | |
Loss on extinguishment or modification of debt | 0.6 | 7.7 | 0.6 | 65.4 | |
Other | ' | ' | -14 | -49.1 | |
Net cash from operating activities | ' | ' | -314.9 | [1] | 289.9 |
Other Noncash Investing and Financing Items [Abstract] | ' | ' | ' | ' | |
Stock options, restricted stock and performance units | ' | ' | $8.10 | $7.20 | |
[1] | Cash flows from operating activities reflect outflows in the 2014 period due to the payment to reinsurer to transfer certain long-term care business. |
INVESTMENTS_IN_VARIABLE_INTERE2
INVESTMENTS IN VARIABLE INTEREST ENTITIES - NARRATIVE (DETAILS) (USD $) | 6 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
Less than twelve months | Less than twelve months | Greater than twelve months | Greater than twelve months | |||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' |
Variable interest entity amortized cost securities held | $1,241,500,000 | ' | ' | ' | ' | ' |
Variable interest entity, gross unrealized gains fixed maturity securities | 3,300,000 | ' | ' | ' | ' | ' |
Variable interest entity gross unrealized losses fixed maturity securities | 3,700,000 | ' | ' | ' | ' | ' |
Variable Interest Entity, Fixed Maturity Securities Fair Value | 1,241,100,000 | ' | ' | ' | ' | ' |
Variable interest entities net realized gain (loss) on investments | -2,000,000 | 300,000 | ' | ' | ' | ' |
Variable Interest Entities Net Gains Losses From Sale Of Fixed Maturity Investments | ' | 300,000 | ' | ' | ' | ' |
Total Other Than Temporary Impairment Losses on Investments Held by Variable Interest Entities | ' | 600,000 | ' | ' | ' | ' |
Variable interest entities, investments sold | 21,300,000 | 0 | ' | ' | ' | ' |
Variable interest entity, gross investment losses from sale | 2,100,000 | ' | ' | ' | ' | ' |
Fair value investments held by variable interest entity that had been in an unrealized loss position | ' | ' | 470,800,000 | 355,500,000 | 157,200,000 | 7,900,000 |
Gross Unrealized Losses On Investments Held By Variable Interest Entity | ' | ' | 2,200,000 | 3,100,000 | 1,500,000 | 100,000 |
Investments held in limited partnerships | 24,600,000 | ' | ' | ' | ' | ' |
Unfunded commitments to limited partnerships | $99,500,000 | ' | ' | ' | ' | ' |
INVESTMENTS_IN_VARIABLE_INTERE3
INVESTMENTS IN VARIABLE INTEREST ENTITIES - BALANCE SHEET ITEMS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Variable Interest Entity [Line Items] | ' | ' |
Investments held by variable interest entities | $1,241.10 | $1,046.70 |
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 |
Borrowings related to variable interest entities | 1,110.80 | 1,012.30 |
VIEs | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investments held by variable interest entities | 1,241.10 | 1,046.70 |
Notes receivable of VIEs held by insurance subsidiaries | 0 | 0 |
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 |
Accrued investment income | 2.5 | 1.9 |
Income tax assets, net | 6.8 | 5.4 |
Other assets | 14.2 | 22.6 |
Total assets | 1,366.40 | 1,180.90 |
Other liabilities | 148.2 | 66 |
Borrowings related to variable interest entities | 1,110.80 | 1,012.30 |
Notes payable of VIEs held by insurance subsidiaries | 120.1 | 112.5 |
Total liabilities | 1,379.10 | 1,190.80 |
Eliminations | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investments held by variable interest entities | 0 | 0 |
Notes receivable of VIEs held by insurance subsidiaries | -116 | -108.5 |
Cash and cash equivalents held by variable interest entities | 0 | 0 |
Accrued investment income | 0 | 0 |
Income tax assets, net | -2.2 | -2.5 |
Other assets | -0.9 | -0.9 |
Total assets | -119.1 | -111.9 |
Other liabilities | -3.2 | -4 |
Borrowings related to variable interest entities | 0 | 0 |
Notes payable of VIEs held by insurance subsidiaries | -120.1 | -112.5 |
Total liabilities | -123.3 | -116.5 |
Variable Interest Entity, Primary Beneficiary | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investments held by variable interest entities | 1,241.10 | 1,046.70 |
Notes receivable of VIEs held by insurance subsidiaries | -116 | -108.5 |
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 |
Accrued investment income | 2.5 | 1.9 |
Income tax assets, net | 4.6 | 2.9 |
Other assets | 13.3 | 21.7 |
Total assets | 1,247.30 | 1,069 |
Other liabilities | 145 | 62 |
Borrowings related to variable interest entities | 1,110.80 | 1,012.30 |
Notes payable of VIEs held by insurance subsidiaries | 0 | 0 |
Total liabilities | $1,255.80 | $1,074.30 |
INVESTMENTS_IN_VARIABLE_INTERE4
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (DETAILS) (USD $) | Jun. 30, 2014 |
In Millions, unless otherwise specified | |
Investment Holdings [Line Items] | ' |
Total amortized cost | $1,241.50 |
Total fair value | 1,241.10 |
Amortized cost | ' |
Investment Holdings [Line Items] | ' |
Due in one year or less | 2.8 |
Due after one year through five years | 353.8 |
Due after five years through ten years | 884.9 |
Total amortized cost | 1,241.50 |
Estimated fair value | ' |
Investment Holdings [Line Items] | ' |
Due in one year or less | 2.8 |
Due after one year through five years | 354.1 |
Due after five years through ten years | 884.2 |
Total fair value | $1,241.10 |
FAIR_VALUE_MEASUREMENTS_MEASUR
FAIR VALUE MEASUREMENTS - MEASUREMENTS BY INPUT LEVEL (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | $20,533.60 | $23,178.30 |
Trading securities | 227.4 | 247.6 |
Investments held by variable interest entities | 1,241.10 | 1,046.70 |
Assets held in separate accounts | 9.4 | 10.3 |
Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 2 | 2.4 |
Investments held by variable interest entities | 0 | 0 |
Assets held in separate accounts | 0 | 0 |
Assets of subsidiary being sold | 0 | ' |
Total assets carried at fair value by category | 55.8 | 82.6 |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 0 | 0 |
Total liabilities carried at fair value by category | 0 | 0 |
Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 219.5 | 245.2 |
Investments held by variable interest entities | 1,241.10 | 1,046.70 |
Assets held in separate accounts | 9.4 | 10.3 |
Assets of subsidiary being sold | 3,458.60 | ' |
Total assets carried at fair value by category | 25,310.20 | 24,131.80 |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 0 | 0 |
Total liabilities carried at fair value by category | 0 | 0 |
Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 5.9 | 0 |
Investments held by variable interest entities | 0 | 0 |
Assets held in separate accounts | 0 | 0 |
Assets of subsidiary being sold | 63.1 | ' |
Total assets carried at fair value by category | 582 | 674.6 |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 980.3 | 905.5 |
Total liabilities carried at fair value by category | 980.3 | 905.5 |
Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 227.4 | 247.6 |
Investments held by variable interest entities | 1,241.10 | 1,046.70 |
Assets held in separate accounts | 9.4 | 10.3 |
Assets of subsidiary being sold | 3,521.70 | ' |
Total assets carried at fair value by category | 25,948 | 24,889 |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 980.3 | 905.5 |
Total liabilities carried at fair value by category | 980.3 | 905.5 |
Corporate debt securities | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Equity securities - corporate securities | 52.9 | 79.6 |
Trading securities | 0 | 0 |
Corporate debt securities | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 13,491.80 | 15,313.80 |
Equity securities - corporate securities | 208.4 | 145.2 |
Trading securities | 23.8 | 45.2 |
Corporate debt securities | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 389.8 | 359.6 |
Equity securities - corporate securities | 26.2 | 24.5 |
Trading securities | 0 | 0 |
Corporate debt securities | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 13,881.60 | 15,673.40 |
Equity securities - corporate securities | 287.5 | 249.3 |
Trading securities | 23.8 | 45.2 |
US treasury and government | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US treasury and government | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 160.1 | 73.1 |
Trading securities | 4.2 | 4.6 |
US treasury and government | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US treasury and government | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 160.1 | 73.1 |
Trading securities | 4.2 | 4.6 |
US states and political subdivisions debt securities | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | ' | 0 |
US states and political subdivisions debt securities | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 2,122.20 | 2,204.40 |
Trading securities | ' | 14.1 |
US states and political subdivisions debt securities | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 28.7 | 0 |
Trading securities | ' | 0 |
US states and political subdivisions debt securities | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 2,150.90 | 2,204.40 |
Trading securities | ' | 14.1 |
Asset-backed securities | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Asset-backed securities | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,273.40 | 1,419.90 |
Trading securities | 20.9 | 24.3 |
Asset-backed securities | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 52.7 | 42.2 |
Trading securities | 0 | 0 |
Asset-backed securities | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,326.10 | 1,462.10 |
Trading securities | 20.9 | 24.3 |
Collateralized debt obligations | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Collateralized debt obligations | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 310 | 47.3 |
Collateralized debt obligations | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 14.2 | 246.7 |
Collateralized debt obligations | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 324.2 | 294 |
Commercial mortgage backed securities | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Commercial mortgage backed securities | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,266.20 | 1,609 |
Trading securities | 146.6 | 125.8 |
Commercial mortgage backed securities | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Commercial mortgage backed securities | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,266.20 | 1,609 |
Trading securities | 146.6 | 125.8 |
Mortgage pass through securities | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Mortgage pass through securities | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 7.6 | 11.8 |
Trading securities | 0.1 | 0.1 |
Mortgage pass through securities | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1.3 | 1.6 |
Trading securities | 0 | 0 |
Mortgage pass through securities | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 8.9 | 13.4 |
Trading securities | 0.1 | 0.1 |
Collateralized mortgage obligations | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Collateralized mortgage obligations | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,415.50 | 1,848.90 |
Trading securities | 23.9 | 31.1 |
Collateralized mortgage obligations | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0.1 | 0 |
Trading securities | 5.9 | 0 |
Collateralized mortgage obligations | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 1,415.60 | 1,848.90 |
Trading securities | 29.8 | 31.1 |
Total fixed maturities, available for sale | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 0 | 0 |
Total fixed maturities, available for sale | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 20,046.80 | 22,528.20 |
Total fixed maturities, available for sale | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 486.8 | 650.1 |
Total fixed maturities, available for sale | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fixed maturities, available for sale | 20,533.60 | 23,178.30 |
Equity securities | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 2 | 2.4 |
Equity securities | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 0 | 0 |
Equity securities | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 0 | 0 |
Equity securities | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | 2 | 2.4 |
Derivatives | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Other invested assets - derivatives | 0.9 | 0.6 |
Derivatives | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Other invested assets - derivatives | 126.4 | 156.2 |
Derivatives | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Other invested assets - derivatives | 0 | 0 |
Derivatives | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Other invested assets - derivatives | 127.3 | 156.8 |
Embedded derivatives associated with fixed index annuity products | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 0 | 0 |
Embedded derivatives associated with fixed index annuity products | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 0 | 0 |
Embedded derivatives associated with fixed index annuity products | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 980.3 | 903.7 |
Embedded derivatives associated with fixed index annuity products | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | 980.3 | 903.7 |
Embedded derivative associated with modified coinsurance agreement | Level 1 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | ' | 0 |
Embedded derivative associated with modified coinsurance agreement | Level 2 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | ' | 0 |
Embedded derivative associated with modified coinsurance agreement | Level 3 | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | ' | 1.8 |
Embedded derivative associated with modified coinsurance agreement | Estimate of fair value measurement | Fair value, measurements, recurring | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities For Interest Sensitive Products, Fair Value Disclosure | ' | $1.80 |
FAIR_VALUE_MEASUREMENTS_RECURR
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Cash and cash equivalents - unrestricted | $378.80 | $699 | $280 | $582.50 | ||
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 | ' | ' | ||
Fair value, measurements, recurring | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage loans | 1,595.90 | 1,729.50 | ' | ' | ||
Policy loans | 99.7 | 277 | ' | ' | ||
Company-owned life insurance | 149.4 | 144.8 | ' | ' | ||
Alternative investment funds | 86.6 | 67.6 | ' | ' | ||
Cash and cash equivalents - unrestricted | 378.8 | 699 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 | ' | ' | ||
Assets of subsidiary being sold | 503.8 | ' | ' | ' | ||
Policyholder account balances | 10,649.70 | [1] | 12,776.40 | [1] | ' | ' |
Investment borrowings | 1,507.60 | 1,900 | ' | ' | ||
Borrowings related to variable interest entities | 1,110.80 | 1,012.30 | ' | ' | ||
Notes payable – direct corporate obligations | 827.3 | 856.4 | ' | ' | ||
Liabilities of subsidiary being sold | 2,453.40 | ' | ' | ' | ||
Fair value, measurements, recurring | Level 1 | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage loans | 0 | 0 | ' | ' | ||
Policy loans | 0 | 0 | ' | ' | ||
Company-owned life insurance | 0 | 0 | ' | ' | ||
Alternative investment funds | 0 | 0 | ' | ' | ||
Cash and cash equivalents - unrestricted | 167.8 | 457.8 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 | ' | ' | ||
Assets of subsidiary being sold | 164.7 | ' | ' | ' | ||
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 | ' | ' | ||
Liabilities of subsidiary being sold | 0 | ' | ' | ' | ||
Fair value, measurements, recurring | Level 2 | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage loans | 0 | 0 | ' | ' | ||
Policy loans | 0 | 0 | ' | ' | ||
Company-owned life insurance | 149.4 | 144.8 | ' | ' | ||
Alternative investment funds | 86.6 | 67.6 | ' | ' | ||
Cash and cash equivalents - unrestricted | 211 | 241.2 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 0 | 0 | ' | ' | ||
Assets of subsidiary being sold | 0 | ' | ' | ' | ||
Policyholder account balances | 0 | [1] | 0 | [1] | ' | ' |
Investment borrowings | 1,507 | 1,948.50 | ' | ' | ||
Borrowings related to variable interest entities | 955.9 | 993.7 | ' | ' | ||
Notes payable – direct corporate obligations | 852.4 | 872.5 | ' | ' | ||
Liabilities of subsidiary being sold | 412.9 | ' | ' | ' | ||
Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage loans | 1,647.10 | 1,749.50 | ' | ' | ||
Policy loans | 99.7 | 277 | ' | ' | ||
Company-owned life insurance | 0 | 0 | ' | ' | ||
Alternative investment funds | 0 | 0 | ' | ' | ||
Cash and cash equivalents - unrestricted | 0 | 0 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 0 | 0 | ' | ' | ||
Assets of subsidiary being sold | 351 | ' | ' | ' | ||
Policyholder account balances | 10,649.70 | [1] | 12,776.40 | [1] | ' | ' |
Investment borrowings | 0 | 0 | ' | ' | ||
Borrowings related to variable interest entities | 0 | 0 | ' | ' | ||
Notes payable – direct corporate obligations | 0 | 0 | ' | ' | ||
Liabilities of subsidiary being sold | 2,070 | ' | ' | ' | ||
Fair value, measurements, recurring | Estimate of fair value measurement | ' | ' | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ||
Mortgage loans | 1,647.10 | 1,749.50 | ' | ' | ||
Policy loans | 99.7 | 277 | ' | ' | ||
Company-owned life insurance | 149.4 | 144.8 | ' | ' | ||
Alternative investment funds | 86.6 | 67.6 | ' | ' | ||
Cash and cash equivalents - unrestricted | 378.8 | 699 | ' | ' | ||
Cash and cash equivalents held by variable interest entities | 101.8 | 104.3 | ' | ' | ||
Assets of subsidiary being sold | 515.7 | ' | ' | ' | ||
Policyholder account balances | 10,649.70 | [1] | 12,776.40 | [1] | ' | ' |
Investment borrowings | 1,507 | 1,948.50 | ' | ' | ||
Borrowings related to variable interest entities | 955.9 | 993.7 | ' | ' | ||
Notes payable – direct corporate obligations | 852.4 | 872.5 | ' | ' | ||
Liabilities of subsidiary being sold | $2,482.90 | ' | ' | ' | ||
[1] | The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value at June 30, 2014 and December 31, 2013. 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. |
FAIR_VALUE_MEASUREMENTS_BALANC
FAIR VALUE MEASUREMENTS - BALANCE SHEET RECURRING (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | ($934.20) | ($799.40) | ($905.50) | ($739.50) | ||||
Purchases, sales, issuances and settlements, net | -35.3 | [1] | -30.2 | [2] | -48 | [1],[3] | -92.9 | [4] |
Total realized and unrealized gains (losses) included in net income | -10.8 | 30.7 | -26.8 | 33.5 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Transfers into level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | -980.3 | -798.9 | -980.3 | -798.9 | ||||
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 | -10.8 | 30.7 | -26.8 | 33.5 | ||||
Available-for-sale securities | Corporate debt securities | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 47.7 | 2.2 | 41.2 | 63.6 | ||||
Available-for-sale securities | Corporate debt securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 336.8 | 356.3 | 359.6 | 355.5 | ||||
Purchases, sales, issuances and settlements, net | 47.7 | [1] | 2.2 | [2] | 41.2 | [1],[3] | 63.6 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | -0.3 | 0 | -0.3 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 4 | -9.6 | 13.4 | -13.4 | ||||
Transfers into level 3 | 16.3 | [5] | 44.5 | [5] | 26.8 | [5] | 0 | [5] |
Transfers out of level 3 | -15 | [5] | 0 | [5] | 0 | [5] | -12.3 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | -51.2 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 389.8 | 393.1 | 389.8 | 393.1 | ||||
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 | 0 | 0 | ||||
Available-for-sale securities | US states and political subdivisions debt securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0 | 15 | 0 | 13.1 | ||||
Purchases, sales, issuances and settlements, net | 0 | [1] | 0 | [2] | 0 | [3] | 0 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | 0 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.7 | 0 | 2 | 0 | ||||
Transfers into level 3 | 28 | [5] | 0 | [5] | 28.9 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | -15 | [5] | 0 | [5] | -13.1 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | -2.2 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 28.7 | 0 | 28.7 | 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 | 0 | 0 | 0 | ||||
Available-for-sale securities | Asset-backed securities | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | -0.5 | -0.2 | 9 | 7.2 | ||||
Available-for-sale securities | Asset-backed securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 42.2 | 46.6 | 42.2 | 44 | ||||
Purchases, sales, issuances and settlements, net | -0.5 | [1] | -0.2 | [2] | 9 | [1],[3] | 7.2 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | 0 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 1.1 | -2.5 | 3.3 | -3.3 | ||||
Transfers into level 3 | 9.9 | [5] | 2 | [5] | 7.9 | [5] | 2 | [5] |
Transfers out of level 3 | 0 | [5] | -0.5 | [5] | 0 | [5] | -4.5 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | -9.7 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 52.7 | 45.4 | 52.7 | 45.4 | ||||
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 | 0 | 0 | ||||
Available-for-sale securities | Collateralized debt obligations | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | -0.1 | -33.7 | -4.4 | -42 | ||||
Available-for-sale securities | Collateralized debt obligations | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 14.1 | 309.7 | 246.7 | 324 | ||||
Purchases, sales, issuances and settlements, net | -0.1 | [1] | -33.7 | [2] | -4.4 | [1],[3] | -42 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | -0.1 | 0 | 0.1 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.2 | 0.9 | 0 | 5.5 | ||||
Transfers into level 3 | 0 | [5] | 10.8 | [5] | 12.6 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | 0 | [5] | -240.7 | [5] | 0 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 14.2 | 287.6 | 14.2 | 287.6 | ||||
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 | 0 | 0 | ||||
Available-for-sale securities | Commercial mortgage backed securities | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | -0.5 | ' | -0.7 | ||||
Available-for-sale securities | Commercial mortgage backed securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | ' | 3.8 | ' | 6.2 | ||||
Purchases, sales, issuances and settlements, net | ' | -0.5 | [2] | ' | -0.7 | [4] | ||
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] | ' | 0 | [5] | ||
Transfers out of level 3 | ' | 0 | [5] | ' | -2.3 | [5] | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 3.3 | ' | 3.3 | ||||
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 | ' | 0 | ||||
Available-for-sale securities | Mortgage pass through securities | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 0.9 | ' | -0.3 | -0.1 | ||||
Available-for-sale securities | Mortgage pass through securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0.4 | 1.8 | 1.6 | 1.9 | ||||
Purchases, sales, issuances and settlements, net | 0.9 | [1] | 0 | [2] | -0.3 | [1],[3] | -0.1 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | 0 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Transfers into level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 1.3 | 1.8 | 1.3 | 1.8 | ||||
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 | 0 | 0 | ||||
Available-for-sale securities | Collateralized mortgage obligations | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | ' | ' | -0.1 | ||||
Available-for-sale securities | Collateralized mortgage obligations | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0 | 36.6 | 0 | 16.9 | ||||
Purchases, sales, issuances and settlements, net | 0 | [1] | 0 | [2] | 0 | [3] | -0.1 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | 0 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | -0.1 | 0 | 0 | 0 | ||||
Transfers into level 3 | 0.2 | [5] | 0 | [5] | 0.1 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | -36.5 | [5] | 0 | [5] | -16.7 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0.1 | 0.1 | 0.1 | 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 | 0 | 0 | 0 | ||||
Available-for-sale securities | Total fixed maturities, available for sale | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 48 | -32.2 | 45.5 | 27.9 | ||||
Available-for-sale securities | Total fixed maturities, available for sale | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 393.5 | 769.8 | 650.1 | 761.6 | ||||
Purchases, sales, issuances and settlements, net | 48 | [1] | -32.2 | [2] | 45.5 | [1],[3] | 27.9 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | -0.4 | 0 | -0.2 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 5.9 | -11.2 | 18.7 | -11.1 | ||||
Transfers into level 3 | 54.4 | [5] | 57.3 | [5] | 76.3 | [5] | 2 | [5] |
Transfers out of level 3 | -15 | [5] | -52 | [5] | -240.7 | [5] | -48.9 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | -63.1 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 486.8 | 731.3 | 486.8 | 731.3 | ||||
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 | 0 | 0 | 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 | ' | 0.1 | ||||
Purchases, sales, issuances and settlements, net | 0.8 | 0 | [2] | 1.7 | 0 | [4] | ||
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 | [5] | ' | 0 | [5] | ||
Transfers out of level 3 | ' | 0 | [5] | ' | 0 | [5] | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 0.1 | ' | 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 | ' | 0 | ||||
Equity securities classification | Corporate debt securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 25.4 | ' | 24.5 | ' | ||||
Purchases, sales, issuances and settlements, net | 0.8 | [1] | ' | 1.7 | [1],[3] | ' | ||
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 | [5] | ' | 0 | [5] | ' | ||
Transfers out of level 3 | 0 | [5] | ' | 0 | [5] | ' | ||
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 26.2 | ' | 26.2 | ' | ||||
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 | ' | ||||
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 | ' | 3.1 | ' | 2.8 | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | 0 | [4] | ||
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 | ' | 0.3 | ||||
Transfers into level 3 | ' | 0 | [5] | ' | 0 | [5] | ||
Transfers out of level 3 | ' | 0 | [5] | ' | 0 | [5] | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 3.1 | ' | 3.1 | ||||
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 | ||||
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 | ' | 3.2 | ' | 2.9 | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | 0 | [4] | ||
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 | ' | 0.3 | ||||
Transfers into level 3 | ' | 0 | [5] | ' | 0 | [5] | ||
Transfers out of level 3 | ' | 0 | [5] | ' | 0 | [5] | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 3.2 | ' | 3.2 | ||||
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 | ||||
Trading securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | ' | 6.3 | ' | 13.7 | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | -7.7 | [4] | ||
Total realized and unrealized gains (losses) included in net income | ' | 0 | ' | 0.6 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | ' | -0.1 | ' | -0.5 | ||||
Transfers into level 3 | ' | 4.8 | [5] | ' | 4.9 | [5] | ||
Transfers out of level 3 | ' | -0.6 | [5] | ' | -0.6 | [5] | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 10.4 | ' | 10.4 | ||||
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 | ||||
Trading securities | Collateralized debt obligations | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | ' | ' | -7.7 | ||||
Collateralized mortgage obligations | Trading securities | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 5.9 | 5.7 | 0 | 5.8 | ||||
Purchases, sales, issuances and settlements, net | 0 | [1] | 0 | [2] | 0 | [1],[3] | 0 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | 0 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | -0.1 | 0.1 | -0.3 | ||||
Transfers into level 3 | 0 | [5] | 4.8 | [5] | 5.8 | [5] | 4.9 | [5] |
Transfers out of level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 5.9 | 10.4 | 5.9 | 10.4 | ||||
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 | 0.1 | 0 | ||||
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 | ||||
Purchases, sales, issuances and settlements, net | ' | ' | ' | -7.7 | [4] | |||
Total realized and unrealized gains (losses) included in net income | ' | ' | ' | 0.6 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | ' | ' | ' | -0.2 | ||||
Transfers into level 3 | ' | ' | ' | 0 | [5] | |||
Transfers out of level 3 | ' | ' | ' | 0 | [5] | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 0 | ' | 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 | ||||
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 | ' | 0.6 | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | 0 | [4] | ||
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 | [5] | ' | 0 | [5] | ||
Transfers out of level 3 | ' | -0.6 | [5] | ' | -0.6 | [5] | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | ' | 0 | ' | 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 | ' | 0 | ||||
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 | -930.8 | -794.3 | -903.7 | -734 | ||||
Purchases, sales, issuances and settlements, net | -38.7 | [1] | -32.7 | [2] | -49.8 | [1],[3] | -95.8 | [4] |
Total realized and unrealized gains (losses) included in net income | -10.8 | 30.7 | -26.8 | 33.5 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Transfers into level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | -980.3 | -796.3 | -980.3 | -796.3 | ||||
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 | -10.8 | 30.7 | -26.8 | 33.5 | ||||
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 | -3.4 | -5.1 | -1.8 | -5.5 | ||||
Purchases, sales, issuances and settlements, net | 3.4 | [1] | 2.5 | [2] | 1.8 | [1],[3] | 2.9 | [4] |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | 0 | ||||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Transfers into level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Transfers out of level 3 | 0 | [5] | 0 | [5] | 0 | [5] | 0 | [5] |
Amounts classified as Assets of subsidiary being sold | ' | ' | 0 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | -2.6 | 0 | -2.6 | ||||
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 | 0 | 0 | ||||
Assets of CLIC being sold | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | ' | ' | 0 | ' | ||||
Purchases, sales, issuances and settlements, net | ' | ' | 0 | [3] | ' | |||
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 | [5] | ' | |||
Transfers out of level 3 | ' | ' | 0 | [5] | ' | |||
Amounts classified as Assets of subsidiary being sold | ' | ' | 63.1 | ' | ||||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 63.1 | ' | 63.1 | ' | ||||
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 | ' | ||||
[1] | 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 three months ended June 30, 2014 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$51.0 $(3.3) $— $— $47.7Asset-backed securities— (.5) — — (.5)Collateralized debt obligations— (.1) — — (.1)Mortgage pass-through securities1.1 (.2) — — .9Total fixed maturities, available for sale52.1 (4.1) — — 48.0Equity securities - corporate securities.8 — — — .8Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(31.1) .5 (22.5) 14.4 (38.7)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 3.4 — — 3.4Total liabilities for insurance products(31.1) 3.9 (22.5) 14.4 (35.3) | |||||||
[2] | 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 three months ended June 30, 2013 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$10.0 $(7.8) $— $— $2.2Asset-backed securities— (.2) — — (.2)Collateralized debt obligations— (33.7) — — (33.7)Commercial mortgage-backed securities— (.5) — — (.5)Total fixed maturities, available for sale10.0 (42.2) — — (32.2)Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(27.7) — (14.0) 9.0 (32.7)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 2.5 — — 2.5Total liabilities for insurance products(27.7) 2.5 (14.0) 9.0 (30.2) | |||||||
[3] | 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 six months ended June 30, 2014 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$51.0 $(9.8) $— $— $41.2Asset-backed securities9.9 (.9) — — 9.0Collateralized debt obligations.9 (5.3) — — (4.4)Mortgage pass-through securities1.1 (1.4) — — (.3)Total fixed maturities, available for sale62.9 (17.4) — — 45.5Equity securities - corporate securities1.7 — — — 1.7Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(57.7) 3.6 (24.6) 28.9 (49.8)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 3.4 (1.6) — 1.8Total liabilities for insurance products(57.7) 7.0 (26.2) 28.9 (48.0) | |||||||
[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 six months ended June 30, 2013 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$71.5 $(7.9) $— $— $63.6Asset-backed securities7.6 (.4) — — 7.2Collateralized debt obligations13.3 (55.3) — — (42.0)Commercial mortgage-backed securities— (.7) — — (.7)Mortgage pass-through securities— (.1) — — (.1)Collateralized mortgage obligations— (.1) — — (.1)Total fixed maturities, available for sale92.4 (64.5) — — 27.9Trading securities - collateralized debt obligations— (7.7) — — (7.7)Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(52.8) 1.4 (64.2) 19.8 (95.8)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 2.9 — — 2.9Total liabilities for insurance products(52.8) 4.3 (64.2) 19.8 (92.9) | |||||||
[5] | Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. |
FAIR_VALUE_MEASUREMENTS_FAIR_V
FAIR VALUE MEASUREMENTS - FAIR VALUE ACTIVITY (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | ($31.10) | ($27.70) | ($57.70) | ($52.80) | ||||
Sales | 3.9 | 2.5 | 7 | 4.3 | ||||
Issuances | -22.5 | -14 | -26.2 | -64.2 | ||||
Settlements | 14.4 | 9 | 28.9 | 19.8 | ||||
Purchases, sales, issuances and settlements, net | -35.3 | [1] | -30.2 | [2] | -48 | [1],[3] | -92.9 | [4] |
Corporate debt securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 51 | 10 | 51 | 71.5 | ||||
Sales | -3.3 | -7.8 | -9.8 | -7.9 | ||||
Issuances | 0 | 0 | 0 | 0 | ||||
Settlements | 0 | 0 | 0 | 0 | ||||
Purchases, sales, issuances and settlements, net | 47.7 | 2.2 | 41.2 | 63.6 | ||||
Corporate debt securities | Equity securities classification | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 0.8 | ' | 1.7 | ' | ||||
Sales | 0 | ' | 0 | ' | ||||
Issuances | 0 | ' | 0 | ' | ||||
Settlements | 0 | ' | 0 | ' | ||||
Purchases, sales, issuances and settlements, net | 0.8 | 0 | [2] | 1.7 | 0 | [4] | ||
Asset-backed securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 0 | 0 | 9.9 | 7.6 | ||||
Sales | -0.5 | -0.2 | -0.9 | -0.4 | ||||
Issuances | 0 | 0 | 0 | 0 | ||||
Settlements | 0 | 0 | 0 | 0 | ||||
Purchases, sales, issuances and settlements, net | -0.5 | -0.2 | 9 | 7.2 | ||||
Collateralized debt obligations | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 0 | 0 | 0.9 | 13.3 | ||||
Sales | -0.1 | -33.7 | -5.3 | -55.3 | ||||
Issuances | 0 | 0 | 0 | 0 | ||||
Settlements | 0 | 0 | 0 | 0 | ||||
Purchases, sales, issuances and settlements, net | -0.1 | -33.7 | -4.4 | -42 | ||||
Collateralized debt obligations | Trading securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | ' | ' | ' | 0 | ||||
Sales | ' | ' | ' | -7.7 | ||||
Issuances | ' | ' | ' | 0 | ||||
Settlements | ' | ' | ' | 0 | ||||
Purchases, sales, issuances and settlements, net | ' | ' | ' | -7.7 | ||||
Commercial mortgage backed securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | ' | 0 | ' | 0 | ||||
Sales | ' | -0.5 | ' | -0.7 | ||||
Issuances | ' | 0 | ' | 0 | ||||
Settlements | ' | 0 | ' | 0 | ||||
Purchases, sales, issuances and settlements, net | ' | -0.5 | ' | -0.7 | ||||
Mortgage pass through securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 1.1 | ' | 1.1 | 0 | ||||
Sales | -0.2 | ' | -1.4 | -0.1 | ||||
Issuances | 0 | ' | 0 | 0 | ||||
Settlements | 0 | ' | 0 | 0 | ||||
Purchases, sales, issuances and settlements, net | 0.9 | ' | -0.3 | -0.1 | ||||
Collateralized mortgage obligations | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | ' | ' | ' | 0 | ||||
Sales | ' | ' | ' | -0.1 | ||||
Issuances | ' | ' | ' | 0 | ||||
Settlements | ' | ' | ' | 0 | ||||
Purchases, sales, issuances and settlements, net | ' | ' | ' | -0.1 | ||||
Total fixed maturities, available for sale | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 52.1 | 10 | 62.9 | 92.4 | ||||
Sales | -4.1 | -42.2 | -17.4 | -64.5 | ||||
Issuances | 0 | 0 | 0 | 0 | ||||
Settlements | 0 | 0 | 0 | 0 | ||||
Purchases, sales, issuances and settlements, net | 48 | -32.2 | 45.5 | 27.9 | ||||
Venture capital funds | Equity securities classification | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | 0 | [4] | ||
Equity securities | Equity securities classification | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | 0 | [4] | ||
US states and political subdivisions debt securities | Trading securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | 0 | [4] | ||
Collateralized debt obligations | Trading securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | ' | ' | -7.7 | [4] | |||
Interest sensitive products | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | -31.1 | -27.7 | -57.7 | -52.8 | ||||
Sales | 0.5 | 0 | 3.6 | 1.4 | ||||
Issuances | -22.5 | -14 | -24.6 | -64.2 | ||||
Settlements | 14.4 | 9 | 28.9 | 19.8 | ||||
Purchases, sales, issuances and settlements, net | -38.7 | [1] | -32.7 | [2] | -49.8 | [1],[3] | -95.8 | [4] |
Interest sensitive products modified coinsurance agreement | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases | 0 | 0 | 0 | 0 | ||||
Sales | 3.4 | 2.5 | 3.4 | 2.9 | ||||
Issuances | 0 | 0 | -1.6 | 0 | ||||
Settlements | 0 | 0 | 0 | 0 | ||||
Purchases, sales, issuances and settlements, net | 3.4 | [1] | 2.5 | [2] | 1.8 | [1],[3] | 2.9 | [4] |
Fair value, measurements, recurring | Level 3 | Trading securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | 0 | [2] | ' | -7.7 | [4] | ||
Fair value, measurements, recurring | Level 3 | Corporate debt securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 47.7 | [1] | 2.2 | [2] | 41.2 | [1],[3] | 63.6 | [4] |
Fair value, measurements, recurring | Level 3 | Corporate debt securities | Equity securities classification | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 0.8 | [1] | ' | 1.7 | [1],[3] | ' | ||
Fair value, measurements, recurring | Level 3 | US states and political subdivisions debt securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 0 | [1] | 0 | [2] | 0 | [3] | 0 | [4] |
Fair value, measurements, recurring | Level 3 | Asset-backed securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | -0.5 | [1] | -0.2 | [2] | 9 | [1],[3] | 7.2 | [4] |
Fair value, measurements, recurring | Level 3 | Collateralized debt obligations | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | -0.1 | [1] | -33.7 | [2] | -4.4 | [1],[3] | -42 | [4] |
Fair value, measurements, recurring | Level 3 | Commercial mortgage backed securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | -0.5 | [2] | ' | -0.7 | [4] | ||
Fair value, measurements, recurring | Level 3 | Mortgage pass through securities | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 0.9 | [1] | 0 | [2] | -0.3 | [1],[3] | -0.1 | [4] |
Fair value, measurements, recurring | Level 3 | Collateralized mortgage obligations | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 0 | [1] | 0 | [2] | 0 | [3] | -0.1 | [4] |
Fair value, measurements, recurring | Level 3 | Total fixed maturities, available for sale | Available-for-sale securities | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | 48 | [1] | -32.2 | [2] | 45.5 | [1],[3] | 27.9 | [4] |
Fair value, measurements, recurring | Level 3 | 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 | 0 | [1] | 0 | [2] | 0 | [1],[3] | 0 | [4] |
Assets of CLIC being sold | Fair value, measurements, recurring | Level 3 | ' | ' | ' | ' | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | ' | ' | ' | ' | ||||
Purchases, sales, issuances and settlements, net | ' | ' | $0 | [3] | ' | |||
[1] | 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 three months ended June 30, 2014 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$51.0 $(3.3) $— $— $47.7Asset-backed securities— (.5) — — (.5)Collateralized debt obligations— (.1) — — (.1)Mortgage pass-through securities1.1 (.2) — — .9Total fixed maturities, available for sale52.1 (4.1) — — 48.0Equity securities - corporate securities.8 — — — .8Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(31.1) .5 (22.5) 14.4 (38.7)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 3.4 — — 3.4Total liabilities for insurance products(31.1) 3.9 (22.5) 14.4 (35.3) | |||||||
[2] | 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 three months ended June 30, 2013 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$10.0 $(7.8) $— $— $2.2Asset-backed securities— (.2) — — (.2)Collateralized debt obligations— (33.7) — — (33.7)Commercial mortgage-backed securities— (.5) — — (.5)Total fixed maturities, available for sale10.0 (42.2) — — (32.2)Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(27.7) — (14.0) 9.0 (32.7)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 2.5 — — 2.5Total liabilities for insurance products(27.7) 2.5 (14.0) 9.0 (30.2) | |||||||
[3] | 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 six months ended June 30, 2014 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$51.0 $(9.8) $— $— $41.2Asset-backed securities9.9 (.9) — — 9.0Collateralized debt obligations.9 (5.3) — — (4.4)Mortgage pass-through securities1.1 (1.4) — — (.3)Total fixed maturities, available for sale62.9 (17.4) — — 45.5Equity securities - corporate securities1.7 — — — 1.7Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(57.7) 3.6 (24.6) 28.9 (49.8)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 3.4 (1.6) — 1.8Total liabilities for insurance products(57.7) 7.0 (26.2) 28.9 (48.0) | |||||||
[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 six months ended June 30, 2013 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, netAssets: Fixed maturities, available for sale: Corporate securities$71.5 $(7.9) $— $— $63.6Asset-backed securities7.6 (.4) — — 7.2Collateralized debt obligations13.3 (55.3) — — (42.0)Commercial mortgage-backed securities— (.7) — — (.7)Mortgage pass-through securities— (.1) — — (.1)Collateralized mortgage obligations— (.1) — — (.1)Total fixed maturities, available for sale92.4 (64.5) — — 27.9Trading securities - collateralized debt obligations— (7.7) — — (7.7)Liabilities: Liabilities for insurance products: Interest-sensitive products - embedded derivatives associated with fixed index annuity products(52.8) 1.4 (64.2) 19.8 (95.8)Interest-sensitive products - embedded derivatives associated with modified coinsurance agreement— 2.9 — — 2.9Total liabilities for insurance products(52.8) 4.3 (64.2) 19.8 (92.9) |
FAIR_VALUE_MEASUREMENTS_FAIR_V1
FAIR VALUE MEASUREMENTS - FAIR VALUE INPUTS (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 24,411.30 | 27,151.70 | ||
Other invested assets | 426.1 | 423.3 | ||
Policyholder account balances | 10,649.70 | 12,776.40 | ||
Level 3 | Interest sensitive products | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Weighted average projected portfolio yields | 5.60% | 5.60% | ||
Weighted average discount rates | 2.04% | 2.47% | ||
Weighted average surrender rates | 14.39% | 14.39% | ||
Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Weighted average discount rate | 2.44% | 2.36% | ||
Level 3 | Asset-backed securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Weighted average discount rate | 2.81% | 3.09% | ||
Level 3 | Collateralized debt obligations | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Weighted average discount rate | ' | 1.32% | ||
Weighted average recoveries | ' | 65.80% | ||
Weighted average constant prepayment rate | ' | 20.00% | ||
Weighted average annual default rate | ' | 3.05% | ||
Weighted average portfolio CCC percent | ' | 12.57% | ||
Minimum | Level 3 | Interest sensitive products | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Projected Portfolio Yields | 5.35% | 5.35% | ||
Discount rates | 0.00% | 0.00% | ||
Surrender rates | 2.80% | 2.80% | ||
Minimum | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 1.50% | 1.65% | ||
Minimum | Level 3 | Asset-backed securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 1.72% | 2.03% | ||
Minimum | Level 3 | Collateralized debt obligations | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | ' | 0.95% | ||
Debt obligation, recovery rate | ' | 64.00% | ||
Annual default rate | ' | 1.14% | ||
Portfolio CCC Percent | ' | 1.52% | ||
Maximum | Level 3 | Interest sensitive products | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Projected Portfolio Yields | 6.63% | 6.63% | ||
Discount rates | 3.78% | 4.64% | ||
Surrender rates | 54.60% | 54.60% | ||
Maximum | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 5.00% | 2.90% | ||
Maximum | Level 3 | Asset-backed securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 4.30% | 4.20% | ||
Maximum | Level 3 | Collateralized debt obligations | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | ' | 2.00% | ||
Debt obligation, recovery rate | ' | 67.00% | ||
Annual default rate | ' | 5.57% | ||
Portfolio CCC Percent | ' | 21.79% | ||
Assets of CLIC being sold | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Weighted average discount rate | 1.96% | ' | ||
Assets of CLIC being sold | Level 3 | Asset-backed securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 3.50% | ' | ||
Assets of CLIC being sold | Minimum | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 1.50% | ' | ||
Assets of CLIC being sold | Maximum | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Discount rate | 2.45% | ' | ||
Estimate of fair value measurement | Level 3 | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 582 | 674.6 | ||
Other invested assets | 235.3 | [1] | 114 | [1] |
Policyholder account balances | 980.3 | [2] | 905.5 | [2] |
Estimate of fair value measurement | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 254.5 | [3] | 260.3 | [3] |
Estimate of fair value measurement | Level 3 | Asset-backed securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 29.1 | [4] | 35.1 | [4] |
Estimate of fair value measurement | Level 3 | Collateralized debt obligations | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | ' | 240.7 | [5] | |
Estimate of fair value measurement | Level 3 | Equity securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | ' | 24.5 | [6] | |
Estimate of fair value measurement | Assets of CLIC being sold | Level 3 | Corporate debt securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 19.1 | [3] | ' | |
Estimate of fair value measurement | Assets of CLIC being sold | Level 3 | Asset-backed securities | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 8.7 | [4] | ' | |
Estimate of fair value measurement | Assets of CLIC being sold | Level 3 | Collateralized debt obligations | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Investments | 35.3 | ' | ||
[1] | Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. | |||
[2] | 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. | |||
[3] | 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. | |||
[4] | 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. | |||
[5] | 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. | |||
[6] | 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. |
FAIR_VALUE_MEASUREMENTS_NARRAT
FAIR VALUE MEASUREMENTS - NARRATIVE (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Fair Value Disclosures [Abstract] | ' |
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage | 43.00% |
Available for sale fixed maturities classified as level 3, investment grade, percent | 81.00% |
Available for sale maturities with significant unobservable inputs, structured securities, percent | 3.00% |
Available for Sale Maturities with Significant Unobservable Inputs, Corporate Securities, Percent | 80.00% |