DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 22, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CNO Financial Group, Inc. | |
Entity Central Index Key | 1,224,608 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2,015 | |
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 | 192,220,590 |
CONSOLIDATED BALANCE SHEET (una
CONSOLIDATED BALANCE SHEET (unaudited) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Investments: | ||
Fixed maturities, available for sale, at fair value (amortized cost: June 30, 2015 - $18,758.2; December 31, 2014 - $18,408.1) | $ 20,224.8 | $ 20,634.9 |
Equity securities at fair value (cost: June 30, 2015 - $418.6; December 31, 2014 - $400.5) | 433.3 | 419 |
Mortgage loans | 1,665.5 | 1,691.9 |
Policy loans | 108.1 | 106.9 |
Trading securities | 257.5 | 244.9 |
Investments held by variable interest entities | 1,565.6 | 1,367.1 |
Other invested assets | 435.4 | 443.6 |
Total investments | 24,690.2 | 24,908.3 |
Cash and cash equivalents - unrestricted | 453.9 | 611.6 |
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 |
Accrued investment income | 240.4 | 242.9 |
Present value of future profits | 465.1 | 489.4 |
Deferred acquisition costs | 877.4 | 770.6 |
Reinsurance receivables | 2,925 | 2,991.1 |
Income tax assets, net | 827.8 | 758.7 |
Assets held in separate accounts | 5.4 | 5.6 |
Other assets | 413.2 | 337.7 |
Total assets | 31,049 | 31,184.2 |
Liabilities for insurance products: | ||
Policyholder account balances | 10,689.3 | 10,707.2 |
Future policy benefits | 10,588.9 | 10,835.4 |
Liability for policy and contract claims | 484.5 | 468.7 |
Unearned and advanced premiums | 268.6 | 291.8 |
Liabilities related to separate accounts | 5.4 | 5.6 |
Other liabilities | 742.5 | 587.6 |
Investment borrowings | 1,518.9 | 1,519.2 |
Borrowings related to variable interest entities | 1,461.7 | 1,286.1 |
Notes payable – direct corporate obligations | 925 | 794.4 |
Total liabilities | $ 26,684.8 | $ 26,496 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: June 30, 2015 – 193,467,712; December 31, 2014 – 203,324,458) | $ 1.9 | $ 2 |
Additional paid-in capital | 3,554.9 | 3,732.4 |
Accumulated other comprehensive income | 605 | 825.3 |
Retained earnings | 202.4 | 128.5 |
Total shareholders' equity | 4,364.2 | 4,688.2 |
Total liabilities and shareholders' equity | $ 31,049 | $ 31,184.2 |
CONSOLIDATED BALANCE SHEET (un3
CONSOLIDATED BALANCE SHEET (unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Investments: | ||
Fixed maturities, available for sale, amortized cost | $ 18,758.2 | $ 18,408.1 |
Equity securities cost | $ 418.6 | $ 400.5 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 8,000,000,000 | 8,000,000,000 |
Common stock, shares issued (in shares) | 193,467,712 | 203,324,458 |
Common stock, shares outstanding (in shares) | 193,467,712 | 203,324,458 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Revenues: | |||||
Insurance policy income | $ 640.1 | $ 679 | $ 1,276.6 | $ 1,364.9 | |
Net investment income (loss): | |||||
General account assets | 302.1 | 347.4 | 602.2 | 695.5 | |
Policyholder and reinsurer accounts and other special-purpose portfolios | 11.8 | 47.2 | 28.4 | 68.1 | |
Realized investment gains (losses): | |||||
Net realized investment gains (losses), excluding impairment losses | (2.2) | 12.4 | (3.3) | 47.7 | |
Net impairment losses recognized | [1] | (7.9) | 0 | (9.2) | (11.9) |
Gain on dissolution of a variable interest entity | 0 | 0 | 11.3 | 0 | |
Total realized gains (losses) | (10.1) | 12.4 | (1.2) | 35.8 | |
Fee revenue and other income | 15.6 | 7 | 31.8 | 13.4 | |
Total revenues | 959.5 | 1,093 | 1,937.8 | 2,177.7 | |
Benefits and expenses: | |||||
Insurance policy benefits | 568.3 | 691.1 | 1,174.3 | 1,381.4 | |
Loss on sale of subsidiary, gain on reinsurance transaction and transition expenses | 4.5 | (3.8) | 9 | 274.8 | |
Interest expense | 25.3 | 24.3 | 46.8 | 48.9 | |
Amortization | 73.7 | 64.9 | 139.8 | 131.6 | |
Loss on extinguishment or modification of debt | 32.8 | 0.6 | 32.8 | 0.6 | |
Other operating costs and expenses | 182.2 | 201.5 | 380.1 | 395.6 | |
Total benefits and expenses | 886.8 | 978.6 | 1,782.8 | 2,232.9 | |
Income (loss) before income taxes | 72.7 | 114.4 | 155 | (55.2) | |
Income tax expense: | |||||
Tax expense on period income | 25.9 | 40.3 | 55.4 | 79.3 | |
Valuation allowance for deferred tax assets and other tax items | 0 | (4) | 0 | 15.4 | |
Net income (loss) | $ 46.8 | $ 78.1 | $ 99.6 | $ (149.9) | |
Basic: | |||||
Weighted average shares outstanding (in shares) | 195,857 | 216,538 | 198,174 | 218,422 | |
Net income (loss) (in dollars per share) | $ 0.24 | $ 0.36 | $ 0.50 | $ (0.69) | |
Diluted: | |||||
Weighted average shares outstanding (in shares) | 198,073 | 222,108 | 200,174 | 218,422 | |
Net income (loss) (in dollars per share) | $ 0.24 | $ 0.35 | $ 0.50 | $ (0.69) | |
[1] | No portion of the other-than-temporary impairments recognized in the periods were included in other comprehensive income. |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 46.8 | $ 78.1 | $ 99.6 | $ (149.9) |
Unrealized gains (losses) for the period | (1,016.1) | 479.1 | (747.1) | 872.9 |
Amortization of present value of future profits and deferred acquisition costs | 99.4 | (42) | 90.2 | (119.4) |
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized | 402.4 | (180.1) | 310.3 | (417.6) |
Reclassification adjustments: | ||||
For net realized investment (gains) losses included in net income (loss) | 1.4 | (9.7) | 1.8 | (35.7) |
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income (loss) | 0.3 | 0.1 | 0.1 | 0.5 |
Unrealized gains (losses) on investments | (512.6) | 247.4 | (344.7) | 300.7 |
Change related to deferred compensation plan | 1.2 | 0.4 | 2.5 | 0.7 |
Other comprehensive income (loss) before tax | (511.4) | 247.8 | (342.2) | 301.4 |
Income tax (expense) benefit related to items of accumulated other comprehensive income (loss) | 182.2 | (87.9) | 121.9 | (107.1) |
Other comprehensive income (loss), net of tax | (329.2) | 159.9 | (220.3) | 194.3 |
Comprehensive income (loss) | $ (282.4) | $ 238 | $ (120.7) | $ 44.4 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) $ in Millions | Total | Common stock and additional paid-in capital [Member] | Accumulated other comprehensive income [Member] | Retained earnings (accumulated deficit) [Member] |
Balance, beginning of period at Dec. 31, 2013 | $ 4,955.2 | $ 4,095 | $ 731.8 | $ 128.4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (149.9) | (149.9) | ||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | 193.7 | 193.7 | ||
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | 0.6 | 0.6 | ||
Cost of common stock repurchased | (136.6) | (136.6) | ||
Dividends on common stock | (26.3) | (26.3) | ||
Stock options, restricted stock and performance units | 7.6 | 7.6 | ||
Balance, end of period at Jun. 30, 2014 | 4,844.3 | 3,966 | 926.1 | (47.8) |
Balance, beginning of period at Dec. 31, 2014 | 4,688.2 | 3,734.4 | 825.3 | 128.5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 99.6 | 99.6 | ||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | (220.9) | (220.9) | ||
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | 0.6 | 0.6 | ||
Cost of common stock repurchased | (186.9) | (186.9) | ||
Dividends on common stock | (25.7) | (25.7) | ||
Stock options, restricted stock and performance units | 9.3 | 9.3 | ||
Balance, end of period at Jun. 30, 2015 | $ 4,364.2 | $ 3,556.8 | $ 605 | $ 202.4 |
CONSOLIDATED STATEMENT OF SHAR7
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit) | $ (122.3) | $ 106.8 |
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit) | $ 0.4 | $ 0.3 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | ||
Cash flows from operating activities: | |||
Insurance policy income | $ 1,190.8 | $ 1,185.3 | |
Net investment income | 599.7 | 686.1 | |
Fee revenue and other income | 31.8 | 13.4 | |
Insurance policy benefits | (947) | (1,049.1) | |
Payment to reinsurer pursuant to long-term care business reinsured | 0 | (590.3) | |
Interest expense | (42.6) | (45.2) | |
Deferrable policy acquisition costs | (120.5) | (116.9) | |
Other operating costs | (379.2) | (396.2) | |
Taxes | (2.6) | (2) | |
Net cash from operating activities | [1] | 330.4 | (314.9) |
Cash flows from investing activities: | |||
Sales of investments | 796 | 1,377.2 | |
Maturities and redemptions of investments | 982.8 | 1,007.1 | |
Purchases of investments | (2,182.8) | (2,072.4) | |
Net sales (purchases) of trading securities | (11) | 12.1 | |
Change in cash and cash equivalents held by variable interest entities | (82.3) | 2.5 | |
Cash and cash equivalents held by subsidiary prior to being sold | 0 | (164.7) | |
Other | (11.2) | (15) | |
Net cash provided (used) by investing activities | (508.5) | 146.8 | |
Cash flows from financing activities: | |||
Issuance of notes payable, net | 909 | 0 | |
Payments on notes payable | (797.1) | (29.5) | |
Expenses related to extinguishment or modification of debt | (17.8) | (0.5) | |
Issuance of common stock | 3.9 | 3.6 | |
Payments to repurchase common stock | (178.9) | (133.6) | |
Common stock dividends paid | (25.8) | (26.3) | |
Amounts received for deposit products | 584.2 | 677.7 | |
Withdrawals from deposit products | (645.3) | (732.5) | |
Issuance of investment borrowings: | |||
Federal Home Loan Bank | 50 | 300 | |
Related to variable interest entities | 274.8 | 141.6 | |
Payments on investment borrowings: | |||
Federal Home Loan Bank | (50.3) | (317.4) | |
Related to variable interest entities and other | (86.3) | (43.6) | |
Investment borrowings - repurchase agreements, net | 0 | 8.4 | |
Net cash provided (used) by financing activities | 20.4 | (152.1) | |
Net decrease in cash and cash equivalents | (157.7) | (320.2) | |
Cash and cash equivalents, beginning of period | 611.6 | 699 | |
Cash and cash equivalents, end of period | $ 453.9 | $ 378.8 | |
[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 PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
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 2014 Annual Report on Form 10-K as retrospectively updated by the Current Report on Form 8-K filed on May 11, 2015 reflecting updated disclosures of operating earnings performance measures. 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 2015 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, 2014, 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. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2015 | |
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; (ii) investments supporting certain insurance liabilities (including investments backing the market strategies of our multibucket annuity products) and certain reinsurance agreements; and (iii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option. The change in fair value of the income generating investments and investments supporting insurance liabilities and reinsurance agreements is recognized in income from policyholder and reinsurer accounts and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in realized investment gains (losses). Investment income related to investments supporting certain insurance liabilities and certain reinsurance agreements is substantially offset by the change in insurance policy benefits related to certain products and agreements. 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, 2015 and December 31, 2014 , were as follows (dollars in millions): June 30, December 31, Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized $ 6.4 $ 5.3 Net unrealized gains on all other investments 1,461.3 2,207.7 Adjustment to present value of future profits (a) (137.3 ) (149.9 ) Adjustment to deferred acquisition costs (301.3 ) (390.5 ) Adjustment to insurance liabilities (82.6 ) (381.4 ) Unrecognized net loss related to deferred compensation plan (6.0 ) (8.5 ) Deferred income tax liabilities (335.5 ) (457.4 ) Accumulated other comprehensive income $ 605.0 $ 825.3 ________ (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, 2015 , adjustments to the present value of future profits, deferred acquisition costs, insurance liabilities and deferred tax assets included $(119.0) million , $(140.5) million , $(82.6) million and $121.8 million , respectively, for premium deficiencies that would exist on certain products (primarily long-term care) 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, 2015 , 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, and equity securities 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 $ 12,470.4 $ 1,189.7 $ (143.2 ) $ 13,516.9 $ — United States Treasury securities and obligations of United States government corporations and agencies 149.9 16.3 — 166.2 — States and political subdivisions 2,000.6 215.8 (15.0 ) 2,201.4 — Debt securities issued by foreign governments 1.8 .1 — 1.9 — Asset-backed securities 1,338.8 70.4 (3.2 ) 1,406.0 — Collateralized debt obligations 343.8 1.7 (1.2 ) 344.3 — Commercial mortgage-backed securities 1,323.7 64.0 (5.1 ) 1,382.6 — Mortgage pass-through securities 3.5 .3 — 3.8 — Collateralized mortgage obligations 1,125.7 76.9 (.9 ) 1,201.7 (3.0 ) Total fixed maturities, available for sale $ 18,758.2 $ 1,635.2 $ (168.6 ) $ 20,224.8 $ (3.0 ) Equity securities $ 418.6 $ 16.3 $ (1.6 ) $ 433.3 The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at June 30, 2015 , 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 cost Estimated fair value (Dollars in millions) Due in one year or less $ 231.4 $ 235.6 Due after one year through five years 2,175.0 2,371.7 Due after five years through ten years 2,213.0 2,365.3 Due after ten years 10,003.3 10,913.8 Subtotal 14,622.7 15,886.4 Structured securities 4,135.5 4,338.4 Total fixed maturities, available for sale $ 18,758.2 $ 20,224.8 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, 2015 2014 2015 2014 Fixed maturity securities, available for sale: Gross realized gains on sale $ 11.5 $ 4.9 $ 26.2 $ 46.4 Gross realized losses on sale (5.5 ) (3.0 ) (20.9 ) (8.5 ) Impairments: Total other-than-temporary impairment losses — — (1.3 ) — Other-than-temporary impairment losses recognized in accumulated other comprehensive income — — — — Net impairment losses recognized — — (1.3 ) — Net realized investment gains from fixed maturities 6.0 1.9 4.0 37.9 Equity securities .5 7.9 3.0 7.9 Commercial mortgage loans — 1.1 (2.3 ) 1.1 Impairments of mortgage loans and other investments (7.9 ) — (7.9 ) (11.9 ) Gain on dissolution of a variable interest entity — — 11.3 — Other (a) (8.7 ) 1.5 (9.3 ) .8 Net realized investment gains (losses) $ (10.1 ) $ 12.4 $ (1.2 ) $ 35.8 _________________ (a) Changes in the estimated fair value of trading securities that we have elected the fair value option (and are still held as of the end of the respective periods) were $(3.9) million and $6.1 million for the six months ended June 30, 2015 and 2014 , respectively. During the first six months of 2015 , we recognized net realized investment losses of $1.2 million , which were comprised of: (i) $1.0 million of net gains from the sales of investments; (ii) an $11.3 million gain on the dissolution of a variable interest entity ("VIE"); (iii) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $4.3 million ; and (iv) $9.2 million of writedowns of investments for other than temporary declines in fair value recognized through net income. During the first six months of 2015 , a VIE that was required to be consolidated was dissolved. A gain of $11.3 million was recognized representing the difference between the borrowings of such VIE and the contractual distributions required following the liquidation of the underlying assets. During the first six months of 2014 , we recognized net realized investment gains of $35.8 million , which were comprised of: (i) $41.8 million of net gains from the sales of investments (primarily fixed maturities); (ii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $5.9 million ; and (iii) $11.9 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 2015 , the $20.9 million of realized losses on sales of $181.7 million of fixed maturity securities, available for sale included: (i) $.6 million of losses related to the sales of asset-backed securities; and (ii) $20.3 million 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 2015 , we recognized $9.2 million of impairment losses recorded in earnings which included: (i) a $1.3 million writedown on a fixed maturity due to issuer specific events; and (ii) a $7.9 million writedown of a legacy investment in a private company that is being liquidated. We no longer have any exposure to legacy private companies related to investments acquired by our Predecessor. 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) $8.0 million of impairments 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, 2015 , other-than-temporary impairments included in accumulated other comprehensive income of $3.0 million (before taxes and related amortization) related to certain 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, 2015 , and 2014 (dollars in millions): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Credit losses on fixed maturity securities, available for sale, beginning of period $ (1.0 ) $ (1.3 ) $ (1.0 ) $ (1.3 ) Add: credit losses on other-than-temporary impairments not previously recognized — — — — Less: credit losses on securities sold — .1 — .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 $ (1.0 ) $ (1.2 ) $ (1.0 ) $ (1.2 ) __________ (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, 2015 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses United States Treasury securities and obligations of United States government corporations and agencies $ 7.6 $ — $ — $ — $ 7.6 $ — States and political subdivisions 213.4 (9.4 ) 24.9 (5.6 ) 238.3 (15.0 ) Corporate securities 1,942.5 (125.2 ) 184.1 (18.0 ) 2,126.6 (143.2 ) Asset-backed securities 241.5 (2.5 ) 54.3 (.7 ) 295.8 (3.2 ) Collateralized debt obligations 108.2 (.6 ) 46.1 (.6 ) 154.3 (1.2 ) Commercial mortgage-backed securities 175.6 (5.1 ) 4.7 — 180.3 (5.1 ) Mortgage pass-through securities — — .3 — .3 — Collateralized mortgage obligations 68.4 (.5 ) 24.2 (.4 ) 92.6 (.9 ) Total fixed maturities, available for sale $ 2,757.2 $ (143.3 ) $ 338.6 $ (25.3 ) $ 3,095.8 $ (168.6 ) Equity securities $ 118.3 $ (1.4 ) $ 1.6 $ (.2 ) $ 119.9 $ (1.6 ) 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, 2014 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses United States Treasury securities and obligations of United States government corporations and agencies $ 12.1 $ (.1 ) $ 4.6 $ — $ 16.7 $ (.1 ) States and political subdivisions 13.2 (.3 ) 44.5 (2.7 ) 57.7 (3.0 ) Corporate securities 985.0 (65.9 ) 297.5 (19.2 ) 1,282.5 (85.1 ) Asset-backed securities 91.2 (1.3 ) 60.5 (2.1 ) 151.7 (3.4 ) Collateralized debt obligations 184.2 (3.4 ) — — 184.2 (3.4 ) Commercial mortgage-backed securities 46.7 (.5 ) — — 46.7 (.5 ) Mortgage pass-through securities .5 — .1 — .6 — Collateralized mortgage obligations 79.0 (.8 ) 32.0 (.5 ) 111.0 (1.3 ) Total fixed maturities, available for sale $ 1,411.9 $ (72.3 ) $ 439.2 $ (24.5 ) $ 1,851.1 $ (96.8 ) Equity securities $ 13.2 $ (.6 ) $ .5 $ — $ 13.7 $ (.6 ) Based on management's current assessment of investments with unrealized losses at June 30, 2015 , 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. 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 offset 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 under the agreement (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. Offsetting disclosures are included in the note to the consolidated financial statements entitled "Accounting for Derivatives". |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 2014 2015 2014 Net income (loss) for basic and diluted earnings per share $ 46.8 $ 78.1 $ 99.6 $ (149.9 ) Shares: Weighted average shares outstanding for basic earnings per share 195,857 216,538 198,174 218,422 Effect of dilutive securities on weighted average shares (a): Stock options, restricted stock and performance units 2,216 2,390 2,000 — Warrants — 3,180 — — Weighted average shares outstanding for diluted earnings per share 198,073 222,108 200,174 218,422 ________ (a) 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 Conseco Life Insurance Company ("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, restricted shares and warrants (until they were repurchased in September 2014) 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). |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. Effective January 1, 2015, we changed our definition of pre-tax operating income to exclude the impact of fair market value changes related to the agent deferred compensation plan, since such impacts are not indicative of our ongoing business and trends in our business. Prior periods have been revised, as applicable, to conform to our current presentation. Pre-tax income is not impacted by this change. We measure segment performance by excluding the net loss on the sale of CLIC and gain on reinsurance transactions, the earnings of CLIC prior to being sold on July 1, 2014, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes in the agent deferred compensation plan, loss on extinguishment or modification of debt, income taxes and other non-operating items consisting primarily of equity in earnings of certain non-strategic investments and earnings attributable to VIEs ("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 net loss on the sale of CLIC and gain on related reinsurance transaction, the earnings of CLIC prior to being sold, net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes in the agent deferred compensation plan, loss on extinguishment or modification of debt and other non-operating items consisting primarily of equity in earnings of certain non-strategic investments and earnings attributable to VIEs 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, 2015 2014 2015 2014 Revenues: Bankers Life: Insurance policy income: Annuities $ 6.1 $ 7.7 $ 11.8 $ 15.2 Health 313.1 320.5 628.9 651.0 Life 94.7 79.9 185.9 158.2 Net investment income (a) 225.2 247.6 451.7 472.0 Fee revenue and other income (a) 6.5 5.8 12.8 11.1 Total Bankers Life revenues 645.6 661.5 1,291.1 1,307.5 Washington National: Insurance policy income: Annuities .7 1.4 1.6 2.4 Health 152.7 148.8 304.9 297.7 Life 6.2 6.5 12.6 12.2 Net investment income (a) 63.1 71.8 128.7 140.8 Fee revenue and other income (a) .3 .2 .7 .4 Total Washington National revenues 223.0 228.7 448.5 453.5 Colonial Penn: Insurance policy income: Health .8 .9 1.6 1.9 Life 65.8 60.8 129.3 120.3 Net investment income (a) 10.8 10.5 21.5 21.2 Fee revenue and other income (a) .2 .3 .5 .5 Total Colonial Penn revenues 77.6 72.5 152.9 143.9 Corporate operations: Net investment income 2.8 5.7 9.5 12.7 Fee and other income 2.2 1.3 4.1 2.7 Total corporate revenues 5.0 7.0 13.6 15.4 Total revenues 951.2 969.7 1,906.1 1,920.3 (continued on next page) (continued from previous page) Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Expenses: Bankers Life: Insurance policy benefits $ 410.7 $ 427.9 $ 816.0 $ 842.9 Amortization 47.7 45.4 99.3 93.6 Interest expense on investment borrowings 2.1 1.9 4.2 3.8 Other operating costs and expenses 98.7 98.9 203.0 195.6 Total Bankers Life expenses 559.2 574.1 1,122.5 1,135.9 Washington National: Insurance policy benefits 143.8 132.8 279.0 264.6 Amortization 13.7 16.0 29.0 32.3 Interest expense on investment borrowings .5 .5 .9 .9 Other operating costs and expenses 44.9 47.1 91.0 92.3 Total Washington National expenses 202.9 196.4 399.9 390.1 Colonial Penn: Insurance policy benefits 47.8 43.2 96.4 87.9 Amortization 3.7 3.8 7.3 7.8 Other operating costs and expenses 21.9 21.7 50.9 50.6 Total Colonial Penn expenses 73.4 68.7 154.6 146.3 Corporate operations: Interest expense on corporate debt 11.9 11.1 22.4 22.2 Interest expense on investment borrowings .1 — .1 — Other operating costs and expenses 9.9 10.7 19.8 25.1 Total corporate expenses 21.9 21.8 42.3 47.3 Total expenses 857.4 861.0 1,719.3 1,719.6 Pre-tax operating earnings by segment: Bankers Life 86.4 87.4 168.6 171.6 Washington National 20.1 32.3 48.6 63.4 Colonial Penn 4.2 3.8 (1.7 ) (2.4 ) Corporate operations (16.9 ) (14.8 ) (28.7 ) (31.9 ) Pre-tax operating earnings $ 93.8 $ 108.7 $ 186.8 $ 200.7 ___________________ (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, 2015 2014 2015 2014 Total segment revenues $ 951.2 $ 969.7 $ 1,906.1 $ 1,920.3 Net realized investment gains (losses) (10.1 ) 11.7 (12.5 ) 33.0 Revenues related to certain non-strategic investments and earnings attributable to VIEs 10.9 7.3 29.2 13.6 Fee revenue related to transition and support services agreements 7.5 — 15.0 — Revenues of CLIC prior to being sold — 104.3 — 210.8 Consolidated revenues 959.5 1,093.0 1,937.8 2,177.7 Total segment expenses 857.4 861.0 1,719.3 1,719.6 Insurance policy benefits - fair value changes in embedded derivative liabilities (34.0 ) 10.1 (17.1 ) 25.3 Amortization related to fair value changes in embedded derivative liabilities 8.3 (2.7 ) 4.1 (6.9 ) Amortization related to net realized investment gains .3 .1 .1 .5 Expenses related to certain non-strategic investments and expenses attributable to VIEs 12.0 10.2 22.5 19.8 Fair value changes related to agent deferred compensation plan — 11.8 — 11.8 Loss on extinguishment or modification of debt 32.8 .6 32.8 .6 Loss on sale of subsidiary, gain on reinsurance transaction and transition expenses 4.5 (3.8 ) 9.0 274.8 Expenses related to transition and support services agreements 5.5 — 12.1 — Expenses of CLIC prior to being sold — 91.3 — 187.4 Consolidated expenses 886.8 978.6 1,782.8 2,232.9 Income (loss) before tax 72.7 114.4 155.0 (55.2 ) Income tax expense: Tax expense on period income 25.9 40.3 55.4 79.3 Valuation allowance for deferred tax assets and other tax items — (4.0 ) — 15.4 Net income (loss) $ 46.8 $ 78.1 $ 99.6 $ (149.9 ) |
ACCOUNTING FOR DERIVATIVES
ACCOUNTING FOR DERIVATIVES | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
ACCOUNTING FOR DERIVATIVES | ACCOUNTING FOR DERIVATIVES Our freestanding and embedded derivatives, none of which are designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions): Fair value June 30, December 31, 2014 Assets: Other invested assets: Fixed index call options $ 63.8 $ 107.2 Interest rate futures (.1 ) (.2 ) Reinsurance receivables (2.3 ) 2.0 Total assets $ 61.4 $ 109.0 Liabilities: Future policy benefits: Fixed index products $ 1,074.0 $ 1,081.5 Total liabilities $ 1,074.0 $ 1,081.5 Our fixed index 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. The Company accounts for the options attributed to the policyholder for the estimated life of the contract as embedded derivatives. These accounting requirements often create volatility in the earnings from these products. 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. The notional amount of these options was $2.4 billion at June 30, 2015 . Such amount did not fluctuate significantly during the first six months of 2015 and 2014. We utilize United States Treasury interest rate futures primarily to hedge interest rate risk related to anticipated mortgage loan transactions. We are required to establish an embedded derivative related to a modified coinsurance agreement pursuant to which we assume the risks of a block of health insurance business. The embedded derivative represents the mark-to-market adjustment for approximately $152 million in underlying investments held by the ceding reinsurer. We purchase certain fixed maturity securities that contain embedded derivatives that are required to be held at fair value on the consolidated balance sheet. We have elected the fair value option to carry the entire security at fair value with changes in fair value reported in net income. The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Net investment income from policyholder and reinsurer accounts and other special-purpose portfolios: Fixed index call options $ (5.9 ) $ 31.3 $ (8.0 ) $ 36.7 Embedded derivative related to reinsurance contract — .2 — (1.4 ) Total (5.9 ) 31.5 (8.0 ) 35.3 Net realized gains (losses): Interest rate futures .1 (1.9 ) (1.6 ) (4.6 ) Embedded derivative related to modified coinsurance agreement (5.7 ) — (4.3 ) — Total (5.6 ) (1.9 ) (5.9 ) (4.6 ) Insurance policy benefits: Embedded derivative related to fixed index annuities 35.3 (10.8 ) 17.5 (26.8 ) Total $ 23.8 $ 18.8 $ 3.6 $ 3.9 Derivative Counterparty Risk If the counterparties to the call options fail to meet their obligations, we may 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, 2015 , all of our counterparties were rated "A-" or higher by Standard & Poor's Corporation ("S&P"). The interest rate future contracts are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis. The Company has minimal exposure to credit-related losses in the event of nonperformance. The Company and its subsidiaries are parties to master netting arrangements with its counterparties related to entering into various derivative contracts. Exchange-traded derivatives require margin accounts which we offset. The following table summarizes information related to derivatives and repurchase agreements with master netting arrangements or collateral as of June 30, 2015 and December 31, 2014 (dollars in millions): Gross amounts not offset in the balance sheet Gross amounts recognized 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, 2015: Fixed index call options $ 63.8 $ — $ 63.8 $ — $ — $ 63.8 Interest rate futures (.1 ) .8 .7 — — .7 Repurchase agreements (a) 20.4 — 20.4 20.4 — — December 31, 2014: Fixed index call options 107.2 — 107.2 — — 107.2 Interest rate futures (.2 ) 1.5 1.3 — — 1.3 Repurchase agreements (a) 20.4 — 20.4 20.4 — — _________________ (a) As of June 30, 2015 and December 31, 2014 , these agreements were collateralized by investment securities with a fair value of $25.4 million and $25.3 million , respectively. |
REINSURANCE
REINSURANCE | 6 Months Ended |
Jun. 30, 2015 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | REINSURANCE The cost of reinsurance ceded totaled $33.3 million and $55.4 million in the second quarters of 2015 and 2014 , respectively, and $67.2 million and $107.5 million in the first six months of 2015 and 2014 , respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $53.8 million and $61.2 million in the second quarters of 2015 and 2014 , respectively, and $93.2 million and $120.8 million in the first six months of 2015 and 2014 , 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. Reinsurance premiums assumed totaled $9.9 million and $3.8 million in the second quarters of 2015 and 2014 , respectively, and $19.8 million and $14.7 million in the first six months of 2015 and 2014 , respectively. In the first quarter of 2014 , premiums assumed included $6.8 million of premium adjustments on prescription drug plan ("PDP") business related to periods prior to the termination of a quota-share reinsurance agreement with Coventry Health Care ("Coventry") in August 2013. We continue to receive distribution income from Coventry for PDP business sold through our Bankers Life segment. 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 . |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2015 | |
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 primarily include the loss on the sale of CLIC of $278.6 million in the six months ended June 30, 2014 . The components of income tax expense are as follows (dollars in millions): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Current tax expense $ 3.3 $ 3.9 $ 6.2 $ 6.1 Deferred tax expense 22.6 36.4 49.0 73.2 Income tax expense calculated based on estimated annual effective tax rate 25.9 40.3 55.2 79.3 Income tax expense on discrete items: Tax expense related to the sale of CLIC — — — 19.4 Other items — (4.0 ) .2 (4.0 ) Total income tax expense $ 25.9 $ 36.3 $ 55.4 $ 94.7 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, 2015 2014 U.S. statutory corporate rate 35.0 % 35.0 % Non-taxable income and nondeductible benefits, net (1.0 ) (1.0 ) State taxes 1.6 1.5 Estimated annual effective tax rate 35.6 % 35.5 % The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): June 30, December 31, Deferred tax assets: Net federal operating loss carryforwards $ 1,001.2 $ 1,048.4 Net state operating loss carryforwards 14.3 15.2 Tax credits 50.3 47.2 Capital loss carryforwards .1 — Investments 47.0 59.7 Insurance liabilities 589.3 585.9 Other 61.1 67.3 Gross deferred tax assets 1,763.3 1,823.7 Deferred tax liabilities: Present value of future profits and deferred acquisition costs (309.1 ) (320.5 ) Accumulated other comprehensive income (335.5 ) (457.4 ) Gross deferred tax liabilities (644.6 ) (777.9 ) Net deferred tax assets before valuation allowance 1,118.7 1,045.8 Valuation allowance (246.0 ) (246.0 ) Net deferred tax assets 872.7 799.8 Current income taxes accrued (44.9 ) (41.1 ) Income tax assets, net $ 827.8 $ 758.7 Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and net operating loss carryforwards ("NOLs"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred 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 $872.7 million of our net deferred tax assets of $1,118.7 million will be realized through future taxable earnings. Accordingly, we have established a deferred tax valuation allowance of $246.0 million at June 30, 2015 . We will continue to assess the need for a valuation allowance in the future. If future results are less than projected, an increase to the 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. We use a deferred tax valuation model to assess the need for a valuation allowance. Our model is adjusted to reflect changes in our projections of future taxable income including changes resulting from investment trading strategies, reinsurance transactions and the impact of the sale of CLIC. Our estimates of future taxable income are based on evidence we consider to be objective and verifiable. Our projection of future taxable income for purposes of determining the valuation allowance is based on our adjusted average annual taxable income for the last three years plus: (i) a 3 percent core growth factor; and (ii) an additional 1 percent increase which primarily reflects the impact of the investment trading strategies completed in 2013 (which grade off over time). The aggregate 4 percent factor is used to increase taxable income over the next five years, and level taxable income is assumed thereafter. In the projections used for our analysis, our three year average taxable income was approximately $320 million . Approximately $50 million of the current three year average relates to non-life taxable income and $270 million relates to life income. 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. 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 ( 2.50 percent at June 30, 2015 ), and the annual restriction could limit 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, 2015 , 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, 2015 , we had $2.9 billion of federal NOLs. The following table summarizes the expiration dates of our loss carryforwards assuming the Internal Revenue Service ("IRS") ultimately agrees with the position we have taken with respect to the loss on our investment in Conseco Senior Health Insurance Company ("CSHI") and other uncertain tax positions(dollars in millions): Year of expiration Net operating loss carryforwards Total loss Life Non-life carryforwards 2023 $ 715.0 $ 1,983.0 $ 2,698.0 2025 — 91.5 91.5 2026 — 207.4 207.4 2027 — 4.9 4.9 2028 — 203.7 203.7 2029 — 146.6 146.6 2032 — 44.0 44.0 2035 — 4.7 4.7 Subtotal 715.0 2,685.8 3,400.8 Less: Unrecognized tax benefits (342.9 ) (197.4 ) (540.3 ) Total $ 372.1 $ 2,488.4 $ 2,860.5 In addition, we had $.2 million of capital loss carryforwards that expire in 2020. We had deferred tax assets related to NOLs for state income taxes of $14.3 million and $15.2 million at June 30, 2015 and December 31, 2014 , 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 an 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 $34.0 million at June 30, 2015 . We currently expect to utilize all of our remaining life NOLs in 2016, absent a favorable IRS position on the classification of the loss on our investment in CSHI. After all of the life NOLs are utilized, we will begin making cash tax payments equal to the effective federal tax rate applied to 65 percent of our life insurance company taxable income due to the limitations on the extent to which we can use non-life NOLs to offset life insurance company taxable income. We will continue to pay tax on only 65 percent of our life insurance company taxable income until all non-life NOLs are utilized or expire. Tax years 2004 and 2008 through 2014 are open to examination by the IRS. The Company's various state income tax returns are generally open for tax years 2011 through 2014 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 CORPORAT
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 and December 31, 2014 (dollars in millions): June 30, December 31, 4.500% Senior Notes due May 2020 $ 325.0 $ — 5.250% Senior Notes due May 2025 500.0 — New Revolving Credit Agreement (as defined below) 100.0 — Previous Senior Secured Credit Agreement (as defined below) — 522.1 6.375% Senior Secured Notes due October 2020 (the "6.375% Notes") — 275.0 Unamortized discount on Previous Senior Secured Credit Agreement — (2.7 ) Direct corporate obligations $ 925.0 $ 794.4 New Notes On May 19, 2015, the Company executed the Indenture, dated as of May 19, 2015 (the "Base Indenture") and the First Supplemental Indenture, dated as of May 19, 2015 (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), between the Company and Wilmington Trust, National Association, as trustee (the "Trustee") pursuant to which the Company issued $325.0 million aggregate principal amount of 4.500% Senior Notes due 2020 (the "2020 Notes") and $500.0 million aggregate principal amount of 5.250% Senior Notes due 2025 (the "2025 Notes" and, together with the 2020 Notes, the "Notes"). The Company used the proceeds of the offering of the Notes, together with borrowings under the New Revolving Credit Agreement (as defined below): (i) to repay all amounts outstanding under the Company's Previous Senior Secured Credit Agreement (as defined below); (ii) to redeem and satisfy and discharge all of the outstanding 6.375% Notes; and (iii) to pay fees and expenses related to the offering of the Notes and the foregoing transactions. The remaining proceeds of the Notes and the borrowings under the New Revolving Credit Agreement will be used for general corporate purposes, including share repurchases. The 2020 Notes will mature on May 30, 2020, and the 2025 Notes will mature on May 30, 2025. Interest on the 2020 Notes will be payable at 4.500% per annum. Interest on the 2025 Notes will be payable at 5.250% per annum. Interest on the Notes will be payable semi-annually in cash in arrears on May 30 and November 30 of each year, commencing on November 30, 2015. The Notes are the Company's senior unsecured obligations and rank equally with the Company's other senior unsecured and unsubordinated debt from time to time outstanding, including obligations under a $150.0 million four -year unsecured revolving credit agreement (the "New Revolving Credit Agreement"). The Notes are effectively subordinated to all of the Company's existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. The Notes are structurally subordinated to all existing and future indebtedness and other liabilities of the Company's subsidiaries. The Company may redeem some or all of the 2020 Notes at any time or from time to time at a "make-whole" redemption price plus accrued and unpaid interest to, but not including, the redemption date. Prior to February 28, 2025, the Company may redeem some or all of the 2025 Notes at any time or from time to time at a "make-whole" redemption price plus accrued and unpaid interest to, but not including, the redemption date. On and after February 28, 2025, the Company may redeem some or all of the 2025 Notes at any time or from time to time at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control Repurchase Event (as defined in the Indenture), the Company will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. The Indenture contains covenants that restrict the Company’s ability, with certain exceptions, to: • incur certain subsidiary indebtedness without also guaranteeing the Notes; • create liens; • enter into sale and leaseback transactions; • issue, sell, transfer or otherwise dispose of any shares of capital stock of any Insurance Subsidiary (as defined in the Indenture); and • consolidate or merge with or into other companies or transfer all or substantially all of the Company’s assets. The Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the Indenture, failure to pay at maturity or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued but unpaid interest, including any additional interest, on all of the Notes to be due and payable. New Revolving Credit Agreement On May 19, 2015, the Company entered into the New Revolving Credit Agreement, with KeyBank National Association, as administrative agent (the "Agent"), and the lenders from time to time party thereto. On May 19, 2015, the Company made an initial drawing of $100.0 million under the New Revolving Credit Agreement, resulting in $50.0 million available for additional borrowings. The New Revolving Credit Agreement matures on May 19, 2019. The New Revolving Credit Agreement includes an uncommitted subfacility for swingline loans of up to $5.0 million , and up to $5.0 million of the New Revolving Credit Agreement is available for the issuance of letters of credit. The Company may incur additional incremental loans under the New Revolving Credit Agreement in an aggregate principal amount of up to $50.0 million , provided that there are no events of default and subject to certain other terms and conditions including the delivery of certain documentation. The interest rates with respect to loans under the New Revolving Credit Agreement will be based on, at the Company's option, a floating base rate (defined as a per annum rate equal to the highest of: (i) the federal funds rate plus 0.50% ; (ii) the "prime rate" of the Agent; and (iii) the eurodollar rate for a one-month interest period plus an applicable margin of initially 1.00% per annum), or a eurodollar rate plus an applicable margin of initially 2.00% per annum. At June 30, 2015, the interest rate on the amounts outstanding under the New Revolving Credit Agreement was 2.19 percent . In addition, the daily average undrawn portion of the New Revolving Credit Agreement will accrue a commitment fee payable quarterly in arrears. The applicable margin for, and the commitment fee applicable to, the New Revolving Credit Agreement, will be adjusted from time-to-time pursuant to a ratings based pricing grid. In addition, a fronting fee, in an amount equal to 0.125% per annum on the aggregate face amount of the outstanding letters of credit will be payable to the issuers of such letters of credit. The New Revolving Credit Agreement contains certain financial, affirmative and negative covenants. The negative covenants in the New Revolving Credit Agreement include restrictions that relate to, among other things and subject to customary baskets, exceptions and limitations for facilities of this type: • subsidiary debt; • liens; • restrictive agreements; • restricted payments during the continuance of an event of default; • disposition of assets and sale and leaseback transactions; • transactions with affiliates; • change in business; • fundamental changes; • modification of certain agreements; and • changes to fiscal year. The New Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the New Revolving Credit Agreement): (i) a debt to total capitalization ratio of not more than 30.0 percent (such ratio was 19.8 percent at June 30, 2015 ); (ii) 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 estimated to be 443 percent at June 30, 2015 ); and (iii) a minimum consolidated net worth of not less than the sum of (x) $2,674 million plus (y) 50.0% of the net equity proceeds received by the Company from the issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,759.2 million at June 30, 2015 compared to the minimum requirement of $2,675 million ). The New Revolving Credit Agreement provides for customary events of default (subject in certain cases to customary grace and cure periods), which include, without limitation, the following: • non-payment; • breach of representations, warranties or covenants; • cross-default and cross-acceleration; • bankruptcy and insolvency events; • judgment defaults; • actual or asserted invalidity of documentation with respect to the New Revolving Credit Agreement; • change of control; and • customary ERISA defaults. If an event of default under the New Revolving Credit Agreement occurs and is continuing, the Agent may accelerate the amounts and terminate all commitments outstanding under the New Revolving Credit Agreement. Previous Senior Secured Credit Agreement and 6.375% Notes The Company used a portion of the net proceeds from its offering of the Notes, together with borrowings under the New Revolving Credit Agreement, to repay all of the outstanding borrowings under its Credit Agreement, dated as of September 28, 2012 (as amended by the First Amendment to Credit Agreement dated May 20, 2013, and as further amended by the Second Amendment to Credit Agreement dated May 30, 2014, the "Previous Senior Secured Credit Agreement") among the Company, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as agent. Upon repayment of all such outstanding borrowings on May 19, 2015, all of the commitments under the Previous Senior Secured Credit Agreement were terminated, all of the collateral securing the facilities thereunder was released, the related security, guarantee and intercreditor agreements were terminated and any remaining restrictive covenants and certain additional events of default contained in the Previous Senior Secured Credit Agreement ceased to have effect. On May 19, 2015, the Company deposited with the trustee for the 6.375% Notes sufficient funds to satisfy and discharge the indenture governing the 6.375% Notes (the " 6.375% Indenture") and to fund the make-whole redemption of the outstanding 6.375% Notes and to pay accrued and unpaid interest on the redeemed notes to, but not including, the June 10, 2015 redemption date. Upon the satisfaction and discharge of the 6.375% Indenture, all of the collateral securing the 6.375% Notes was released, the related security and intercreditor agreements were terminated and any remaining restrictive covenants and certain additional events of default contained in the 6.375% Indenture ceased to have effect. In the first six months of 2015 , we also made $19.8 million of scheduled quarterly principal payments due under the Previous Senior Secured Credit Agreement. The following table sets forth the sources and uses of cash from the debt refinancing transactions discussed above (dollars in millions): Sources: Notes $ 825.0 New Revolving Credit Agreement 100.0 Total sources $ 925.0 Uses: Repayment of Previous Senior Secured Credit Agreement $ 502.3 Repayment of 6.375% Notes, including redemption premium 292.8 Accrued interest 4.3 Debt issuance costs 16.0 General corporate purposes 109.6 Total uses $ 925.0 In connection with the debt refinancing transactions, we recognized a loss on the extinguishment of debt totaling $32.8 million primarily related to: (i) the redemption premium related to the repayment of the 6.375% Notes; and (ii) the write-off of unamortized discount and issuance costs associated with the repayment of the Previous Senior Secured Credit Agreement and the 6.375% Notes. Scheduled Repayment of our Direct Corporate Obligations The scheduled repayment of our direct corporate obligations was as follows at June 30, 2015 (dollars in millions): Year ending June 30, 2016 $ — 2017 — 2018 — 2019 100.0 2020 325.0 Thereafter 500.0 $ 925.0 |
INVESTMENT BORROWINGS
INVESTMENT BORROWINGS | 6 Months Ended |
Jun. 30, 2015 | |
Investment Borrowings [Abstract] | |
INVESTMENT BORROWINGS | INVESTMENT BORROWINGS Two of the Company's insurance subsidiaries (Washington National Insurance Company ("Washington National") and Bankers Life and Casualty Company ("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, 2015 , the carrying value of the FHLB common stock was $72.2 million . As of June 30, 2015 , 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, 2015 , 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. 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, 2015 $ 100.0 June 2016 Variable rate – 0.627% 75.0 June 2016 Variable rate – 0.442% 100.0 October 2016 Variable rate – 0.451% 50.0 November 2016 Variable rate – 0.549% 50.0 November 2016 Variable rate – 0.657% 57.7 June 2017 Variable rate – 0.615% 50.0 August 2017 Variable rate – 0.474% 75.0 August 2017 Variable rate – 0.432% 100.0 October 2017 Variable rate – 0.705% 50.0 November 2017 Variable rate – 0.792% 50.0 January 2018 Variable rate – 0.626% 50.0 January 2018 Variable rate – 0.617% 50.0 February 2018 Variable rate – 0.586% 50.0 February 2018 Variable rate – 0.366% 22.0 February 2018 Variable rate – 0.616% 100.0 May 2018 Variable rate – 0.636% 50.0 July 2018 Variable rate – 0.749% 50.0 August 2018 Variable rate – 0.394% 50.0 January 2019 Variable rate – 0.696% 50.0 February 2019 Variable rate – 0.366% 100.0 March 2019 Variable rate – 0.665% 21.8 July 2019 Variable rate – 0.677% 50.0 May 2020 Variable rate – 0.706% 21.8 June 2020 Fixed rate – 1.960% 28.2 August 2021 Fixed rate – 2.550% 26.5 March 2023 Fixed rate – 2.160% 20.5 June 2025 Fixed rate – 2.940% $ 1,498.5 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 prevailing market interest rates. At June 30, 2015 , the aggregate yield maintenance fee to prepay all fixed rate borrowings was $1.2 million . Interest expense of $5.2 million and $13.8 million in the first six months of 2015 and 2014 , respectively, was recognized related to total borrowings from the FHLB. In addition to our borrowings from the FHLB, we may enter into repurchase agreements to increase our investment return as part of our investment strategy as further discussed in the note to the consolidated financial statements entitled "Investments". These repurchase agreements are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. Such borrowings totaled $20.4 million at June 30, 2015 and mature prior to December 31, 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, 2015 | |
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, 2014 203,324 Treasury stock purchased and retired (10,865 ) Stock options exercised 505 Restricted and performance stock vested 504 (a) Balance, June 30, 2015 193,468 ____________________ (a) Such amount was reduced by 231 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 the first six months of 2015 , we repurchased 10.9 million shares of common stock for $186.9 million (including $8.0 million of repurchases settled in the third quarter of 2015) under our securities repurchase program. The Company had remaining repurchase authority of $234.1 million as of June 30, 2015 . In the first six months of 2015 , dividends declared on common stock totaled $25.7 million ( $0.13 per common share). In May 2015, the Company increased its quarterly common stock dividend to $0.07 per share from $0.06 per share. |
SALES INDUCEMENTS
SALES INDUCEMENTS | 6 Months Ended |
Jun. 30, 2015 | |
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 $1.8 million and $3.1 million during the six months ended June 30, 2015 and 2014 , respectively. Amounts amortized totaled $7.6 million and $9.4 million during the six months ended June 30, 2015 and 2014 , respectively. The unamortized balance of deferred sales inducements was $61.6 million and $67.4 million at June 30, 2015 and December 31, 2014 , respectively. The balance of insurance liabilities for persistency bonus benefits was $1.2 million and $1.5 million at June 30, 2015 and December 31, 2014 , respectively. |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS Pending Accounting Standards In May 2014, the Financial Accounting Standards Board (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 August 2014, the FASB issued authoritative guidance related to measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity which provides a measurement alternative for an entity that consolidates collateralized financing entities. A collateralized financing entity is a VIE with no more than nominal equity that holds financial assets and issues beneficial interests in those financial assets; the beneficial interests have contractual recourse only to the related assets of the collateralized financing entity and are classified as financial liabilities. If elected, the alternative method results in the reporting entity measuring both the financial assets and the financial liabilities of the collateralized financing entity using the more observable of the two fair value measurements, which effectively removes measurement differences between the financial assets and the financial liabilities of the collateralized financing entity previously recorded as net income (loss) attributable to non-controlling and other beneficial interests and as an adjustment to appropriated retained earnings. The reporting entity continues to measure its own beneficial interests in the collateralized financing entity (other than those that represent compensation for services) at fair value. The guidance will be effective for the Company for interim and annual periods beginning in 2016. A reporting entity may apply the guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the annual period of adoption. A reporting entity may also apply the guidance retrospectively to all relevant prior periods. The Company is currently assessing the impact the guidance will have upon adoption. In February 2015, the FASB issued authoritative guidance which updates the analysis that a reporting entity must perform to determine whether it should consolidate certain legal entities. Such guidance: (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities; (ii) eliminates the presumption that a general partner should consolidate a limited partnership; (iii) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (iv) provides a scope exception from consolidation guidance for certain investment funds. The guidance will be effective for the Company for interim and annual periods beginning in 2016. A reporting entity may apply the guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the annual period of adoption. A reporting entity may also apply the guidance retrospectively to all relevant prior periods. The Company is currently assessing the impact the guidance will have upon adoption. In April 2015, the FASB issued authoritative guidance which requires debt issuance costs in financial statements to be presented as a direct deduction from the carrying value of the associated debt liability rather than as an asset on the balance sheet. This guidance is effective beginning January 1, 2016. Early adoption is permitted, and the new guidance will be applied on a retrospective basis. The adoption of this guidance will not have a material impact on our consolidated financial statements. In May 2015, the FASB issued authoritative guidance which requires additional disclosures related to short-duration contracts. The guidance will require insurance entities to disclose for annual reporting periods information about the liability for unpaid claims and claim adjustment expenses. The guidance also requires insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. Additionally, the guidance requires insurance entities to disclose for annual and interim reporting periods a rollforward of the liability for unpaid claims and claim adjustment expenses. For health insurance claims, the guidance requires the disclosure of the total of incurred-but-not-reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses. The guidance will be effective for the Company for annual periods beginning after December 15, 2015, and the interim periods within annual periods beginning after December 15, 2016. The Company is currently assessing the impact the guidance will have on its disclosures upon adoption. Adopted Accounting Standards In April 2014, 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 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 adoption of this guidance did not have a material impact on our consolidated financial statements. |
LITIGATION AND OTHER LEGAL PROC
LITIGATION AND OTHER LEGAL PROCEEDINGS | 6 Months Ended |
Jun. 30, 2015 | |
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, some matters 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. 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 OF CAS22
CONSOLIDATED STATEMENT OF CASH FLOWS | 6 Months Ended |
Jun. 30, 2015 | |
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 (loss) to net cash from operating activities (dollars in millions): Six months ended June 30, 2015 2014 Cash flows from operating activities: Net income (loss) $ 99.6 $ (149.9 ) Adjustments to reconcile net income to net cash from operating activities: Amortization and depreciation 152.0 146.2 Income taxes 52.7 92.7 Insurance liabilities 142.8 155.2 Accrual and amortization of investment income (30.9 ) (77.5 ) Deferral of policy acquisition costs (120.5 ) (116.9 ) Net realized investment (gains) losses 1.2 (35.8 ) Payment to reinsurer pursuant to long-term care business reinsured — (590.3 ) Net loss on sale of subsidiary, gain on reinsurance transaction and transition expenses 9.0 274.8 Loss on extinguishment or modification of debt 32.8 .6 Other (8.3 ) (14.0 ) Net cash from operating activities $ 330.4 $ (314.9 ) (a) ______________________ (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. Other 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, 2015 2014 Stock options, restricted stock and performance units $ 9.1 $ 8.1 |
OUT OF PERIOD ADJUSTMENTS
OUT OF PERIOD ADJUSTMENTS | 6 Months Ended |
Jun. 30, 2015 | |
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). 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 IN VARIABLE INTERES
INVESTMENTS IN VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2015 | |
Investments in Variable Interest Entities [Abstract] | |
INVESTMENTS IN VARIABLE INTEREST ENTITIES | INVESTMENTS IN VARIABLE INTEREST ENTITIES We have concluded that we are the primary beneficiary with respect to certain VIEs, which are consolidated in our financial statements. In consolidating the VIEs, we consistently use the financial information most recently distributed to investors in the VIE, which in one case, is less than two months prior to the end of our reporting period. 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. 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, 2015 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,565.6 $ — $ 1,565.6 Notes receivable of VIEs held by insurance subsidiaries — (163.6 ) (163.6 ) Cash and cash equivalents held by variable interest entities 150.6 — 150.6 Accrued investment income 2.7 — 2.7 Income tax assets, net 7.8 (1.9 ) 5.9 Other assets 24.6 (3.1 ) 21.5 Total assets $ 1,751.3 $ (168.6 ) $ 1,582.7 Liabilities: Other liabilities $ 139.5 $ (7.5 ) $ 132.0 Borrowings related to variable interest entities 1,461.7 — 1,461.7 Notes payable of VIEs held by insurance subsidiaries 164.7 (164.7 ) — Total liabilities $ 1,765.9 $ (172.2 ) $ 1,593.7 December 31, 2014 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,367.1 $ — $ 1,367.1 Notes receivable of VIEs held by insurance subsidiaries — (153.3 ) (153.3 ) Cash and cash equivalents held by variable interest entities 68.3 — 68.3 Accrued investment income 3.2 — 3.2 Income tax assets, net 18.1 (2.9 ) 15.2 Other assets 14.2 (1.7 ) 12.5 Total assets $ 1,470.9 $ (157.9 ) $ 1,313.0 Liabilities: Other liabilities $ 61.2 $ (6.1 ) $ 55.1 Borrowings related to variable interest entities 1,286.1 — 1,286.1 Notes payable of VIEs held by insurance subsidiaries 157.3 (157.3 ) — Total liabilities $ 1,504.6 $ (163.4 ) $ 1,341.2 The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. At June 30, 2015 , such loans had an amortized cost of $1,578.4 million ; gross unrealized gains of $3.0 million ; gross unrealized losses of $15.8 million ; and an estimated fair value of $1,565.6 million . The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at June 30, 2015 , 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 cost Estimated fair value (Dollars in millions) Due in one year or less $ 4.8 $ 4.8 Due after one year through five years 594.7 590.3 Due after five years through ten years 978.9 970.5 Total $ 1,578.4 $ 1,565.6 During the first six months of 2015 , the VIEs recognized net realized investment losses of $.9 million . During the first six months of 2014 , the VIEs recognized net realized investment losses of $2.0 million . At June 30, 2015 , there were no investments held by the VIEs that were in default. During the first six months of 2015 , $40.3 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $1.1 million . 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 . There was one investment sold at a loss during the first six months of 2015 , which had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis for less than six months prior to the sale, which had an amortized cost and estimated fair value of $2.9 million and $2.3 million , respectively. At June 30, 2015 , the VIEs held: (i) investments with a fair value of $637.5 million and gross unrealized losses of $5.7 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $314.6 million and gross unrealized losses of $10.1 million that had been in an unrealized loss position for greater than twelve months. At December 31, 2014 , the VIEs held: (i) investments with a fair value of $1,053.2 million and gross unrealized losses of $27.3 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $167.4 million and gross unrealized losses of $4.2 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, 2015 , we held investments in various limited partnerships, in which we are not the primary beneficiary, totaling $61.2 million (classified as other invested assets). At June 30, 2015 , we had unfunded commitments to these partnerships of $65.2 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, 2015 | |
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 invested in 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 credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include: certain publicly registered 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; most short-term investments; and non-exchange-traded derivatives such as call options. 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 2015 and 2014 . 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. Our Level 2 assets are valued as follows: • Fixed maturities available for sale, equity securities and trading securities Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads. U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected credit default rates, delinquencies, and issue specific information including, but not limited to, collateral type, seniority and vintage. Equity securities (primarily comprised of non-redeemable preferred stock) are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads. • Investments held by VIEs Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads. • Other invested assets - derivatives 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 quotes; time value and volatility factors underlying options; market interest rates; and non-performance risk. Third party pricing services normally derive 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. 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 such 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. 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 49 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 premiums, projected 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, 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. For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs. The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at June 30, 2015 is as follows (dollars in millions): Quoted prices in active markets Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 13,383.2 $ 133.7 $ 13,516.9 United States Treasury securities and obligations of United States government corporations and agencies — 166.2 — 166.2 States and political subdivisions — 2,201.4 — 2,201.4 Debt securities issued by foreign governments — 1.9 — 1.9 Asset-backed securities — 1,352.7 53.3 1,406.0 Collateralized debt obligations — 344.3 — 344.3 Commercial mortgage-backed securities — 1,381.4 1.2 1,382.6 Mortgage pass-through securities — 3.6 .2 3.8 Collateralized mortgage obligations — 1,201.7 — 1,201.7 Total fixed maturities, available for sale — 20,036.4 188.4 20,224.8 Equity securities - corporate securities 230.2 173.2 29.9 433.3 Trading securities: Corporate securities — 24.9 — 24.9 United States Treasury securities and obligations of United States government corporations and agencies — 3.1 — 3.1 Asset-backed securities — 21.4 — 21.4 Commercial mortgage-backed securities — 137.8 39.9 177.7 Mortgage pass-through securities — .1 — .1 Collateralized mortgage obligations — 26.9 — 26.9 Equity securities 3.4 — — 3.4 Total trading securities 3.4 214.2 39.9 257.5 Investments held by variable interest entities - corporate securities — 1,565.6 — 1,565.6 Other invested assets - derivatives 1.0 63.8 — 64.8 Assets held in separate accounts — 5.4 — 5.4 Total assets carried at fair value by category $ 234.6 $ 22,058.6 $ 258.2 $ 22,551.4 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,074.0 $ 1,074.0 The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2014 is as follows (dollars in millions): Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 13,605.1 $ 365.9 $ 13,971.0 United States Treasury securities and obligations of United States government corporations and agencies — 168.9 — 168.9 States and political subdivisions — 2,242.2 35.5 2,277.7 Debt securities issued by foreign governments — 1.9 — 1.9 Asset-backed securities — 1,209.8 59.2 1,269.0 Collateralized debt obligations — 324.5 — 324.5 Commercial mortgage-backed securities — 1,275.1 1.2 1,276.3 Mortgage pass-through securities — 4.2 .4 4.6 Collateralized mortgage obligations — 1,341.0 — 1,341.0 Total fixed maturities, available for sale — 20,172.7 462.2 20,634.9 Equity securities - corporate securities 216.9 174.1 28.0 419.0 Trading securities: Corporate securities — 24.3 — 24.3 United States Treasury securities and obligations of United States government corporations and agencies — 3.7 — 3.7 Asset-backed securities — 24.0 — 24.0 Commercial mortgage-backed securities — 131.0 28.6 159.6 Mortgage pass-through securities — .1 — .1 Collateralized mortgage obligations — 29.7 — 29.7 Equity securities 3.5 — — 3.5 Total trading securities 3.5 212.8 28.6 244.9 Investments held by variable interest entities - corporate securities — 1,367.1 — 1,367.1 Other invested assets - derivatives 1.4 107.2 — 108.6 Assets held in separate accounts — 5.6 — 5.6 Total assets carried at fair value by category $ 221.8 $ 22,039.5 $ 518.8 $ 22,780.1 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,081.5 $ 1,081.5 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 based on interest rates currently being offered for similar loans with similar risk characteristics. 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. The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value as 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. Investment borrowings, notes payable and borrowings related to variable interest entities. For publicly traded debt, we use current fair values. For other notes, we use discounted cash flow analyses based on our current incremental borrowing rates for similar types of borrowing arrangements. The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): June 30, 2015 Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,725.4 $ 1,725.4 $ 1,665.5 Policy loans — — 108.1 108.1 108.1 Other invested assets: Company-owned life insurance — 161.3 — 161.3 161.3 Alternative investment funds — 101.6 — 101.6 101.6 Cash and cash equivalents: Unrestricted 373.9 80.0 — 453.9 453.9 Held by variable interest entities 150.6 — — 150.6 150.6 Liabilities: Policyholder account balances — — 10,689.3 10,689.3 10,689.3 Investment borrowings — 1,520.1 — 1,520.1 1,518.9 Borrowings related to variable interest entities — 1,459.6 — 1,459.6 1,461.7 Notes payable – direct corporate obligations — 937.4 — 937.4 925.0 December 31, 2014 Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,768.9 $ 1,768.9 $ 1,691.9 Policy loans — — 106.9 106.9 106.9 Other invested assets: Company-owned life insurance — 157.6 — 157.6 157.6 Alternative investment funds — 102.8 — 102.8 102.8 Cash and cash equivalents: Unrestricted 549.6 62.0 — 611.6 611.6 Held by variable interest entities 68.3 — — 68.3 68.3 Liabilities: Policyholder account balances — — 10,707.2 10,707.2 10,707.2 Investment borrowings — 1,520.4 — 1,520.4 1,519.2 Borrowings related to variable interest entities — 1,229.2 — 1,229.2 1,286.1 Notes payable – direct corporate obligations — 807.4 — 807.4 794.4 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, 2015 (dollars in millions): June 30, 2015 Beginning balance as of March 31, 2015 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, 2015 Amount of total gains (losses) for the three months ended June 30, 2015 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 $ 136.0 $ (6.2 ) $ (.9 ) $ (6.0 ) $ 10.8 $ — $ 133.7 $ — Asset-backed securities 65.8 (1.1 ) — (1.8 ) — (9.6 ) 53.3 — Commercial mortgage-backed securities 2.1 — — — — (0.9 ) 1.2 — Mortgage pass-through securities .2 — — — — — .2 — Total fixed maturities, available for sale 204.1 (7.3 ) (.9 ) (7.8 ) 10.8 (10.5 ) 188.4 — Equity securities - corporate securities 29.0 .9 — — — — 29.9 — Trading securities - commercial mortgage-backed securities — 9.4 — 1.9 28.6 — 39.9 1.9 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,102.1 ) (7.2 ) 35.3 — — — (1,074.0 ) 35.3 _________ (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, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ — $ (6.2 ) $ — $ — $ (6.2 ) Asset-backed securities — (1.1 ) — — (1.1 ) Total fixed maturities, available for sale — (7.3 ) — — (7.3 ) Equity securities - corporate securities .9 — — — .9 Trading securities - commercial mortgage-backed securities 9.4 — — — 9.4 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (33.0 ) 11.0 (.7 ) 15.5 (7.2 ) 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, 2015 (dollars in millions): June 30, 2015 Beginning balance as of December 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, 2015 Amount of total gains (losses) for the six months ended June 30, 2015 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 $ 365.9 $ (26.3 ) $ (2.2 ) $ (6.1 ) $ 9.1 $ (206.7 ) $ 133.7 $ — States and political subdivisions 35.5 — — — — (35.5 ) — — Asset-backed securities 59.2 (1.9 ) — (.6 ) 10.0 (13.4 ) 53.3 — Commercial mortgage-backed securities 1.2 — — — — — 1.2 — Mortgage pass-through securities .4 (.2 ) — — — — .2 — Total fixed maturities, available for sale 462.2 (28.4 ) (2.2 ) (6.7 ) 19.1 (255.6 ) 188.4 — Equity securities - corporate securities 28.0 1.9 — — — — 29.9 — Trading securities - commercial mortgage-backed securities 28.6 9.5 — 1.8 — — 39.9 1.8 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,081.5 ) (10.0 ) 17.5 — — — (1,074.0 ) 17.5 _________ (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, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ .1 $ (26.4 ) $ — $ — $ (26.3 ) Asset-backed securities 9.9 (11.8 ) — — (1.9 ) Mortgage pass-through securities — (.2 ) — — (.2 ) Total fixed maturities, available for sale 10.0 (38.4 ) — — (28.4 ) Equity securities - corporate securities 1.9 — — — 1.9 Trading securities - commercial mortgage-backed securities 9.5 — — — 9.5 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (63.4 ) 22.4 (2.3 ) 33.3 (10.0 ) 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, 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 $ — $ 4.0 $ 16.3 $ (15.0 ) $ 389.8 $ — States and political subdivisions — — — .7 28.0 — 28.7 — Asset-backed securities 42.2 (.5 ) — 1.1 9.9 — 52.7 — Collateralized debt obligations 14.1 (.1 ) — .2 — — 14.2 — Mortgage pass-through securities .4 .9 — — — — 1.3 — Collateralized mortgage obligations — — — (.1 ) .2 — .1 — Total fixed maturities, available for sale 393.5 48.0 — 5.9 54.4 (15.0 ) 486.8 — Equity securities - corporate securities 25.4 .8 — — — — 26.2 — Trading securities - collateralized mortgage obligations 5.9 — — — — — 5.9 — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (930.8 ) (38.7 ) (10.8 ) — — — (980.3 ) (10.8 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement (3.4 ) 3.4 — — — — — — Total liabilities (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 $ 51.0 $ (3.3 ) $ — $ — $ 47.7 Asset-backed securities — (.5 ) — — (.5 ) Collateralized debt obligations — (.1 ) — — (.1 ) Mortgage pass-through securities 1.1 (.2 ) — — .9 Total fixed maturities, available for sale 52.1 (4.1 ) — — 48.0 Equity securities - corporate securities .8 — — — .8 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (31.1 ) .5 (22.5 ) 14.4 (38.7 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement — 3.4 — — 3.4 Total liabilities (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 — — — 2.0 28.9 — (2.2 ) 28.7 — Asset-backed securities 42.2 9.0 — 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 — — — — .1 — — .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 — — — .1 5.8 — — 5.9 .1 Assets of subsidiary being sold — — — — — — 63.1 63.1 — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (903.7 ) (49.8 ) (26.8 ) — — — — (980.3 ) (26.8 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement (1.8 ) 1.8 — — — — — — — Total liabilities (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 $ 51.0 $ (9.8 ) $ — $ — $ 41.2 Asset-backed securities 9.9 (.9 ) — — 9.0 Collateralized debt obligations .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: Future policy benefits - embedded derivatives associated with fixed index annuity products (57.7 ) 3.6 (24.6 ) 28.9 (49.8 ) Other liabilities |
FAIR VALUE MEASUREMENTS (Polici
FAIR VALUE MEASUREMENTS (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
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 invested in 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 credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include: certain publicly registered 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; most short-term investments; and non-exchange-traded derivatives such as call options. 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 2015 and 2014 . 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. Our Level 2 assets are valued as follows: • Fixed maturities available for sale, equity securities and trading securities Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads. U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected credit default rates, delinquencies, and issue specific information including, but not limited to, collateral type, seniority and vintage. Equity securities (primarily comprised of non-redeemable preferred stock) are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads. • Investments held by VIEs Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads. • Other invested assets - derivatives 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 quotes; time value and volatility factors underlying options; market interest rates; and non-performance risk. Third party pricing services normally derive 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. 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 such 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. 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 49 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 premiums, projected 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, 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. For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs. 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 based on interest rates currently being offered for similar loans with similar risk characteristics. 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. The estimated fair value of insurance liabilities for policyholder account balances was approximately equal to its carrying value as 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. 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. 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. |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 and December 31, 2014 , were as follows (dollars in millions): June 30, December 31, Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized $ 6.4 $ 5.3 Net unrealized gains on all other investments 1,461.3 2,207.7 Adjustment to present value of future profits (a) (137.3 ) (149.9 ) Adjustment to deferred acquisition costs (301.3 ) (390.5 ) Adjustment to insurance liabilities (82.6 ) (381.4 ) Unrecognized net loss related to deferred compensation plan (6.0 ) (8.5 ) Deferred income tax liabilities (335.5 ) (457.4 ) Accumulated other comprehensive income $ 605.0 $ 825.3 ________ (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, 2015 , 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, and equity securities 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 $ 12,470.4 $ 1,189.7 $ (143.2 ) $ 13,516.9 $ — United States Treasury securities and obligations of United States government corporations and agencies 149.9 16.3 — 166.2 — States and political subdivisions 2,000.6 215.8 (15.0 ) 2,201.4 — Debt securities issued by foreign governments 1.8 .1 — 1.9 — Asset-backed securities 1,338.8 70.4 (3.2 ) 1,406.0 — Collateralized debt obligations 343.8 1.7 (1.2 ) 344.3 — Commercial mortgage-backed securities 1,323.7 64.0 (5.1 ) 1,382.6 — Mortgage pass-through securities 3.5 .3 — 3.8 — Collateralized mortgage obligations 1,125.7 76.9 (.9 ) 1,201.7 (3.0 ) Total fixed maturities, available for sale $ 18,758.2 $ 1,635.2 $ (168.6 ) $ 20,224.8 $ (3.0 ) Equity securities $ 418.6 $ 16.3 $ (1.6 ) $ 433.3 |
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 cost Estimated fair value (Dollars in millions) Due in one year or less $ 231.4 $ 235.6 Due after one year through five years 2,175.0 2,371.7 Due after five years through ten years 2,213.0 2,365.3 Due after ten years 10,003.3 10,913.8 Subtotal 14,622.7 15,886.4 Structured securities 4,135.5 4,338.4 Total fixed maturities, available for sale $ 18,758.2 $ 20,224.8 |
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, 2015 2014 2015 2014 Fixed maturity securities, available for sale: Gross realized gains on sale $ 11.5 $ 4.9 $ 26.2 $ 46.4 Gross realized losses on sale (5.5 ) (3.0 ) (20.9 ) (8.5 ) Impairments: Total other-than-temporary impairment losses — — (1.3 ) — Other-than-temporary impairment losses recognized in accumulated other comprehensive income — — — — Net impairment losses recognized — — (1.3 ) — Net realized investment gains from fixed maturities 6.0 1.9 4.0 37.9 Equity securities .5 7.9 3.0 7.9 Commercial mortgage loans — 1.1 (2.3 ) 1.1 Impairments of mortgage loans and other investments (7.9 ) — (7.9 ) (11.9 ) Gain on dissolution of a variable interest entity — — 11.3 — Other (a) (8.7 ) 1.5 (9.3 ) .8 Net realized investment gains (losses) $ (10.1 ) $ 12.4 $ (1.2 ) $ 35.8 _________________ (a) Changes in the estimated fair value of trading securities that we have elected the fair value option (and are still held as of the end of the respective periods) were $(3.9) million and $6.1 million for the six months ended June 30, 2015 and 2014 , respectively. |
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, 2015 , and 2014 (dollars in millions): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Credit losses on fixed maturity securities, available for sale, beginning of period $ (1.0 ) $ (1.3 ) $ (1.0 ) $ (1.3 ) Add: credit losses on other-than-temporary impairments not previously recognized — — — — Less: credit losses on securities sold — .1 — .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 $ (1.0 ) $ (1.2 ) $ (1.0 ) $ (1.2 ) __________ (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, 2015 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses United States Treasury securities and obligations of United States government corporations and agencies $ 7.6 $ — $ — $ — $ 7.6 $ — States and political subdivisions 213.4 (9.4 ) 24.9 (5.6 ) 238.3 (15.0 ) Corporate securities 1,942.5 (125.2 ) 184.1 (18.0 ) 2,126.6 (143.2 ) Asset-backed securities 241.5 (2.5 ) 54.3 (.7 ) 295.8 (3.2 ) Collateralized debt obligations 108.2 (.6 ) 46.1 (.6 ) 154.3 (1.2 ) Commercial mortgage-backed securities 175.6 (5.1 ) 4.7 — 180.3 (5.1 ) Mortgage pass-through securities — — .3 — .3 — Collateralized mortgage obligations 68.4 (.5 ) 24.2 (.4 ) 92.6 (.9 ) Total fixed maturities, available for sale $ 2,757.2 $ (143.3 ) $ 338.6 $ (25.3 ) $ 3,095.8 $ (168.6 ) Equity securities $ 118.3 $ (1.4 ) $ 1.6 $ (.2 ) $ 119.9 $ (1.6 ) 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, 2014 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses United States Treasury securities and obligations of United States government corporations and agencies $ 12.1 $ (.1 ) $ 4.6 $ — $ 16.7 $ (.1 ) States and political subdivisions 13.2 (.3 ) 44.5 (2.7 ) 57.7 (3.0 ) Corporate securities 985.0 (65.9 ) 297.5 (19.2 ) 1,282.5 (85.1 ) Asset-backed securities 91.2 (1.3 ) 60.5 (2.1 ) 151.7 (3.4 ) Collateralized debt obligations 184.2 (3.4 ) — — 184.2 (3.4 ) Commercial mortgage-backed securities 46.7 (.5 ) — — 46.7 (.5 ) Mortgage pass-through securities .5 — .1 — .6 — Collateralized mortgage obligations 79.0 (.8 ) 32.0 (.5 ) 111.0 (1.3 ) Total fixed maturities, available for sale $ 1,411.9 $ (72.3 ) $ 439.2 $ (24.5 ) $ 1,851.1 $ (96.8 ) Equity securities $ 13.2 $ (.6 ) $ .5 $ — $ 13.7 $ (.6 ) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 2014 2015 2014 Net income (loss) for basic and diluted earnings per share $ 46.8 $ 78.1 $ 99.6 $ (149.9 ) Shares: Weighted average shares outstanding for basic earnings per share 195,857 216,538 198,174 218,422 Effect of dilutive securities on weighted average shares (a): Stock options, restricted stock and performance units 2,216 2,390 2,000 — Warrants — 3,180 — — Weighted average shares outstanding for diluted earnings per share 198,073 222,108 200,174 218,422 ________ (a) 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 Conseco Life Insurance Company ("CLIC"). |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 2014 2015 2014 Revenues: Bankers Life: Insurance policy income: Annuities $ 6.1 $ 7.7 $ 11.8 $ 15.2 Health 313.1 320.5 628.9 651.0 Life 94.7 79.9 185.9 158.2 Net investment income (a) 225.2 247.6 451.7 472.0 Fee revenue and other income (a) 6.5 5.8 12.8 11.1 Total Bankers Life revenues 645.6 661.5 1,291.1 1,307.5 Washington National: Insurance policy income: Annuities .7 1.4 1.6 2.4 Health 152.7 148.8 304.9 297.7 Life 6.2 6.5 12.6 12.2 Net investment income (a) 63.1 71.8 128.7 140.8 Fee revenue and other income (a) .3 .2 .7 .4 Total Washington National revenues 223.0 228.7 448.5 453.5 Colonial Penn: Insurance policy income: Health .8 .9 1.6 1.9 Life 65.8 60.8 129.3 120.3 Net investment income (a) 10.8 10.5 21.5 21.2 Fee revenue and other income (a) .2 .3 .5 .5 Total Colonial Penn revenues 77.6 72.5 152.9 143.9 Corporate operations: Net investment income 2.8 5.7 9.5 12.7 Fee and other income 2.2 1.3 4.1 2.7 Total corporate revenues 5.0 7.0 13.6 15.4 Total revenues 951.2 969.7 1,906.1 1,920.3 (continued on next page) (continued from previous page) Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Expenses: Bankers Life: Insurance policy benefits $ 410.7 $ 427.9 $ 816.0 $ 842.9 Amortization 47.7 45.4 99.3 93.6 Interest expense on investment borrowings 2.1 1.9 4.2 3.8 Other operating costs and expenses 98.7 98.9 203.0 195.6 Total Bankers Life expenses 559.2 574.1 1,122.5 1,135.9 Washington National: Insurance policy benefits 143.8 132.8 279.0 264.6 Amortization 13.7 16.0 29.0 32.3 Interest expense on investment borrowings .5 .5 .9 .9 Other operating costs and expenses 44.9 47.1 91.0 92.3 Total Washington National expenses 202.9 196.4 399.9 390.1 Colonial Penn: Insurance policy benefits 47.8 43.2 96.4 87.9 Amortization 3.7 3.8 7.3 7.8 Other operating costs and expenses 21.9 21.7 50.9 50.6 Total Colonial Penn expenses 73.4 68.7 154.6 146.3 Corporate operations: Interest expense on corporate debt 11.9 11.1 22.4 22.2 Interest expense on investment borrowings .1 — .1 — Other operating costs and expenses 9.9 10.7 19.8 25.1 Total corporate expenses 21.9 21.8 42.3 47.3 Total expenses 857.4 861.0 1,719.3 1,719.6 Pre-tax operating earnings by segment: Bankers Life 86.4 87.4 168.6 171.6 Washington National 20.1 32.3 48.6 63.4 Colonial Penn 4.2 3.8 (1.7 ) (2.4 ) Corporate operations (16.9 ) (14.8 ) (28.7 ) (31.9 ) Pre-tax operating earnings $ 93.8 $ 108.7 $ 186.8 $ 200.7 ___________________ (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, 2015 2014 2015 2014 Total segment revenues $ 951.2 $ 969.7 $ 1,906.1 $ 1,920.3 Net realized investment gains (losses) (10.1 ) 11.7 (12.5 ) 33.0 Revenues related to certain non-strategic investments and earnings attributable to VIEs 10.9 7.3 29.2 13.6 Fee revenue related to transition and support services agreements 7.5 — 15.0 — Revenues of CLIC prior to being sold — 104.3 — 210.8 Consolidated revenues 959.5 1,093.0 1,937.8 2,177.7 Total segment expenses 857.4 861.0 1,719.3 1,719.6 Insurance policy benefits - fair value changes in embedded derivative liabilities (34.0 ) 10.1 (17.1 ) 25.3 Amortization related to fair value changes in embedded derivative liabilities 8.3 (2.7 ) 4.1 (6.9 ) Amortization related to net realized investment gains .3 .1 .1 .5 Expenses related to certain non-strategic investments and expenses attributable to VIEs 12.0 10.2 22.5 19.8 Fair value changes related to agent deferred compensation plan — 11.8 — 11.8 Loss on extinguishment or modification of debt 32.8 .6 32.8 .6 Loss on sale of subsidiary, gain on reinsurance transaction and transition expenses 4.5 (3.8 ) 9.0 274.8 Expenses related to transition and support services agreements 5.5 — 12.1 — Expenses of CLIC prior to being sold — 91.3 — 187.4 Consolidated expenses 886.8 978.6 1,782.8 2,232.9 Income (loss) before tax 72.7 114.4 155.0 (55.2 ) Income tax expense: Tax expense on period income 25.9 40.3 55.4 79.3 Valuation allowance for deferred tax assets and other tax items — (4.0 ) — 15.4 Net income (loss) $ 46.8 $ 78.1 $ 99.6 $ (149.9 ) |
ACCOUNTING FOR DERIVATIVES (Tab
ACCOUNTING FOR DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value by Balance Sheet Location | Our freestanding and embedded derivatives, none of which are designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions): Fair value June 30, December 31, 2014 Assets: Other invested assets: Fixed index call options $ 63.8 $ 107.2 Interest rate futures (.1 ) (.2 ) Reinsurance receivables (2.3 ) 2.0 Total assets $ 61.4 $ 109.0 Liabilities: Future policy benefits: Fixed index products $ 1,074.0 $ 1,081.5 Total liabilities $ 1,074.0 $ 1,081.5 |
Schedule pre-tax gains (losses) recognized in net income for derivative instruments | The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Net investment income from policyholder and reinsurer accounts and other special-purpose portfolios: Fixed index call options $ (5.9 ) $ 31.3 $ (8.0 ) $ 36.7 Embedded derivative related to reinsurance contract — .2 — (1.4 ) Total (5.9 ) 31.5 (8.0 ) 35.3 Net realized gains (losses): Interest rate futures .1 (1.9 ) (1.6 ) (4.6 ) Embedded derivative related to modified coinsurance agreement (5.7 ) — (4.3 ) — Total (5.6 ) (1.9 ) (5.9 ) (4.6 ) Insurance policy benefits: Embedded derivative related to fixed index annuities 35.3 (10.8 ) 17.5 (26.8 ) Total $ 23.8 $ 18.8 $ 3.6 $ 3.9 |
Derivatives with master netting arrangements | The following table summarizes information related to derivatives and repurchase agreements with master netting arrangements or collateral as of June 30, 2015 and December 31, 2014 (dollars in millions): Gross amounts not offset in the balance sheet Gross amounts recognized 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, 2015: Fixed index call options $ 63.8 $ — $ 63.8 $ — $ — $ 63.8 Interest rate futures (.1 ) .8 .7 — — .7 Repurchase agreements (a) 20.4 — 20.4 20.4 — — December 31, 2014: Fixed index call options 107.2 — 107.2 — — 107.2 Interest rate futures (.2 ) 1.5 1.3 — — 1.3 Repurchase agreements (a) 20.4 — 20.4 20.4 — — _________________ (a) As of June 30, 2015 and December 31, 2014 , these agreements were collateralized by investment securities with a fair value of $25.4 million and $25.3 million , respectively. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 2014 2015 2014 Current tax expense $ 3.3 $ 3.9 $ 6.2 $ 6.1 Deferred tax expense 22.6 36.4 49.0 73.2 Income tax expense calculated based on estimated annual effective tax rate 25.9 40.3 55.2 79.3 Income tax expense on discrete items: Tax expense related to the sale of CLIC — — — 19.4 Other items — (4.0 ) .2 (4.0 ) Total income tax expense $ 25.9 $ 36.3 $ 55.4 $ 94.7 |
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, 2015 2014 U.S. statutory corporate rate 35.0 % 35.0 % Non-taxable income and nondeductible benefits, net (1.0 ) (1.0 ) State taxes 1.6 1.5 Estimated annual effective tax rate 35.6 % 35.5 % |
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, Deferred tax assets: Net federal operating loss carryforwards $ 1,001.2 $ 1,048.4 Net state operating loss carryforwards 14.3 15.2 Tax credits 50.3 47.2 Capital loss carryforwards .1 — Investments 47.0 59.7 Insurance liabilities 589.3 585.9 Other 61.1 67.3 Gross deferred tax assets 1,763.3 1,823.7 Deferred tax liabilities: Present value of future profits and deferred acquisition costs (309.1 ) (320.5 ) Accumulated other comprehensive income (335.5 ) (457.4 ) Gross deferred tax liabilities (644.6 ) (777.9 ) Net deferred tax assets before valuation allowance 1,118.7 1,045.8 Valuation allowance (246.0 ) (246.0 ) Net deferred tax assets 872.7 799.8 Current income taxes accrued (44.9 ) (41.1 ) Income tax assets, net $ 827.8 $ 758.7 |
Summary of operating loss carryforwards | As of June 30, 2015 , we had $2.9 billion of federal NOLs. The following table summarizes the expiration dates of our loss carryforwards assuming the Internal Revenue Service ("IRS") ultimately agrees with the position we have taken with respect to the loss on our investment in Conseco Senior Health Insurance Company ("CSHI") and other uncertain tax positions(dollars in millions): Year of expiration Net operating loss carryforwards Total loss Life Non-life carryforwards 2023 $ 715.0 $ 1,983.0 $ 2,698.0 2025 — 91.5 91.5 2026 — 207.4 207.4 2027 — 4.9 4.9 2028 — 203.7 203.7 2029 — 146.6 146.6 2032 — 44.0 44.0 2035 — 4.7 4.7 Subtotal 715.0 2,685.8 3,400.8 Less: Unrecognized tax benefits (342.9 ) (197.4 ) (540.3 ) Total $ 372.1 $ 2,488.4 $ 2,860.5 |
NOTES PAYABLE - DIRECT CORPOR32
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following notes payable were direct corporate obligations of the Company as of June 30, 2015 and December 31, 2014 (dollars in millions): June 30, December 31, 4.500% Senior Notes due May 2020 $ 325.0 $ — 5.250% Senior Notes due May 2025 500.0 — New Revolving Credit Agreement (as defined below) 100.0 — Previous Senior Secured Credit Agreement (as defined below) — 522.1 6.375% Senior Secured Notes due October 2020 (the "6.375% Notes") — 275.0 Unamortized discount on Previous Senior Secured Credit Agreement — (2.7 ) Direct corporate obligations $ 925.0 $ 794.4 |
Sources and uses of recapitalization transactions | The following table sets forth the sources and uses of cash from the debt refinancing transactions discussed above (dollars in millions): Sources: Notes $ 825.0 New Revolving Credit Agreement 100.0 Total sources $ 925.0 Uses: Repayment of Previous Senior Secured Credit Agreement $ 502.3 Repayment of 6.375% Notes, including redemption premium 292.8 Accrued interest 4.3 Debt issuance costs 16.0 General corporate purposes 109.6 Total uses $ 925.0 |
Schedule of maturities of long-term debt | The scheduled repayment of our direct corporate obligations was as follows at June 30, 2015 (dollars in millions): Year ending June 30, 2016 $ — 2017 — 2018 — 2019 100.0 2020 325.0 Thereafter 500.0 $ 925.0 |
INVESTMENT BORROWINGS (Tables)
INVESTMENT BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investment Borrowings [Abstract] | |
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, 2015 $ 100.0 June 2016 Variable rate – 0.627% 75.0 June 2016 Variable rate – 0.442% 100.0 October 2016 Variable rate – 0.451% 50.0 November 2016 Variable rate – 0.549% 50.0 November 2016 Variable rate – 0.657% 57.7 June 2017 Variable rate – 0.615% 50.0 August 2017 Variable rate – 0.474% 75.0 August 2017 Variable rate – 0.432% 100.0 October 2017 Variable rate – 0.705% 50.0 November 2017 Variable rate – 0.792% 50.0 January 2018 Variable rate – 0.626% 50.0 January 2018 Variable rate – 0.617% 50.0 February 2018 Variable rate – 0.586% 50.0 February 2018 Variable rate – 0.366% 22.0 February 2018 Variable rate – 0.616% 100.0 May 2018 Variable rate – 0.636% 50.0 July 2018 Variable rate – 0.749% 50.0 August 2018 Variable rate – 0.394% 50.0 January 2019 Variable rate – 0.696% 50.0 February 2019 Variable rate – 0.366% 100.0 March 2019 Variable rate – 0.665% 21.8 July 2019 Variable rate – 0.677% 50.0 May 2020 Variable rate – 0.706% 21.8 June 2020 Fixed rate – 1.960% 28.2 August 2021 Fixed rate – 2.550% 26.5 March 2023 Fixed rate – 2.160% 20.5 June 2025 Fixed rate – 2.940% $ 1,498.5 |
CHANGES IN COMMON STOCK (Tables
CHANGES IN COMMON STOCK (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2014 203,324 Treasury stock purchased and retired (10,865 ) Stock options exercised 505 Restricted and performance stock vested 504 (a) Balance, June 30, 2015 193,468 ____________________ (a) Such amount was reduced by 231 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. |
CONSOLIDATED STATEMENT OF CAS35
CONSOLIDATED STATEMENT OF CASH FLOWS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of the reconciliation for net income provided by operating activities | The following reconciles net income (loss) to net cash from operating activities (dollars in millions): Six months ended June 30, 2015 2014 Cash flows from operating activities: Net income (loss) $ 99.6 $ (149.9 ) Adjustments to reconcile net income to net cash from operating activities: Amortization and depreciation 152.0 146.2 Income taxes 52.7 92.7 Insurance liabilities 142.8 155.2 Accrual and amortization of investment income (30.9 ) (77.5 ) Deferral of policy acquisition costs (120.5 ) (116.9 ) Net realized investment (gains) losses 1.2 (35.8 ) Payment to reinsurer pursuant to long-term care business reinsured — (590.3 ) Net loss on sale of subsidiary, gain on reinsurance transaction and transition expenses 9.0 274.8 Loss on extinguishment or modification of debt 32.8 .6 Other (8.3 ) (14.0 ) Net cash from operating activities $ 330.4 $ (314.9 ) (a) ______________________ (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 | Other 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, 2015 2014 Stock options, restricted stock and performance units $ 9.1 $ 8.1 |
INVESTMENTS IN VARIABLE INTER36
INVESTMENTS IN VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,565.6 $ — $ 1,565.6 Notes receivable of VIEs held by insurance subsidiaries — (163.6 ) (163.6 ) Cash and cash equivalents held by variable interest entities 150.6 — 150.6 Accrued investment income 2.7 — 2.7 Income tax assets, net 7.8 (1.9 ) 5.9 Other assets 24.6 (3.1 ) 21.5 Total assets $ 1,751.3 $ (168.6 ) $ 1,582.7 Liabilities: Other liabilities $ 139.5 $ (7.5 ) $ 132.0 Borrowings related to variable interest entities 1,461.7 — 1,461.7 Notes payable of VIEs held by insurance subsidiaries 164.7 (164.7 ) — Total liabilities $ 1,765.9 $ (172.2 ) $ 1,593.7 December 31, 2014 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,367.1 $ — $ 1,367.1 Notes receivable of VIEs held by insurance subsidiaries — (153.3 ) (153.3 ) Cash and cash equivalents held by variable interest entities 68.3 — 68.3 Accrued investment income 3.2 — 3.2 Income tax assets, net 18.1 (2.9 ) 15.2 Other assets 14.2 (1.7 ) 12.5 Total assets $ 1,470.9 $ (157.9 ) $ 1,313.0 Liabilities: Other liabilities $ 61.2 $ (6.1 ) $ 55.1 Borrowings related to variable interest entities 1,286.1 — 1,286.1 Notes payable of VIEs held by insurance subsidiaries 157.3 (157.3 ) — Total liabilities $ 1,504.6 $ (163.4 ) $ 1,341.2 |
Summary of variable interest entities by contractual maturity | The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at June 30, 2015 , 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 cost Estimated fair value (Dollars in millions) Due in one year or less $ 4.8 $ 4.8 Due after one year through five years 594.7 590.3 Due after five years through ten years 978.9 970.5 Total $ 1,578.4 $ 1,565.6 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 is as follows (dollars in millions): Quoted prices in active markets Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 13,383.2 $ 133.7 $ 13,516.9 United States Treasury securities and obligations of United States government corporations and agencies — 166.2 — 166.2 States and political subdivisions — 2,201.4 — 2,201.4 Debt securities issued by foreign governments — 1.9 — 1.9 Asset-backed securities — 1,352.7 53.3 1,406.0 Collateralized debt obligations — 344.3 — 344.3 Commercial mortgage-backed securities — 1,381.4 1.2 1,382.6 Mortgage pass-through securities — 3.6 .2 3.8 Collateralized mortgage obligations — 1,201.7 — 1,201.7 Total fixed maturities, available for sale — 20,036.4 188.4 20,224.8 Equity securities - corporate securities 230.2 173.2 29.9 433.3 Trading securities: Corporate securities — 24.9 — 24.9 United States Treasury securities and obligations of United States government corporations and agencies — 3.1 — 3.1 Asset-backed securities — 21.4 — 21.4 Commercial mortgage-backed securities — 137.8 39.9 177.7 Mortgage pass-through securities — .1 — .1 Collateralized mortgage obligations — 26.9 — 26.9 Equity securities 3.4 — — 3.4 Total trading securities 3.4 214.2 39.9 257.5 Investments held by variable interest entities - corporate securities — 1,565.6 — 1,565.6 Other invested assets - derivatives 1.0 63.8 — 64.8 Assets held in separate accounts — 5.4 — 5.4 Total assets carried at fair value by category $ 234.6 $ 22,058.6 $ 258.2 $ 22,551.4 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,074.0 $ 1,074.0 The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2014 is as follows (dollars in millions): Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 13,605.1 $ 365.9 $ 13,971.0 United States Treasury securities and obligations of United States government corporations and agencies — 168.9 — 168.9 States and political subdivisions — 2,242.2 35.5 2,277.7 Debt securities issued by foreign governments — 1.9 — 1.9 Asset-backed securities — 1,209.8 59.2 1,269.0 Collateralized debt obligations — 324.5 — 324.5 Commercial mortgage-backed securities — 1,275.1 1.2 1,276.3 Mortgage pass-through securities — 4.2 .4 4.6 Collateralized mortgage obligations — 1,341.0 — 1,341.0 Total fixed maturities, available for sale — 20,172.7 462.2 20,634.9 Equity securities - corporate securities 216.9 174.1 28.0 419.0 Trading securities: Corporate securities — 24.3 — 24.3 United States Treasury securities and obligations of United States government corporations and agencies — 3.7 — 3.7 Asset-backed securities — 24.0 — 24.0 Commercial mortgage-backed securities — 131.0 28.6 159.6 Mortgage pass-through securities — .1 — .1 Collateralized mortgage obligations — 29.7 — 29.7 Equity securities 3.5 — — 3.5 Total trading securities 3.5 212.8 28.6 244.9 Investments held by variable interest entities - corporate securities — 1,367.1 — 1,367.1 Other invested assets - derivatives 1.4 107.2 — 108.6 Assets held in separate accounts — 5.6 — 5.6 Total assets carried at fair value by category $ 221.8 $ 22,039.5 $ 518.8 $ 22,780.1 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,081.5 $ 1,081.5 |
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, 2015 Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,725.4 $ 1,725.4 $ 1,665.5 Policy loans — — 108.1 108.1 108.1 Other invested assets: Company-owned life insurance — 161.3 — 161.3 161.3 Alternative investment funds — 101.6 — 101.6 101.6 Cash and cash equivalents: Unrestricted 373.9 80.0 — 453.9 453.9 Held by variable interest entities 150.6 — — 150.6 150.6 Liabilities: Policyholder account balances — — 10,689.3 10,689.3 10,689.3 Investment borrowings — 1,520.1 — 1,520.1 1,518.9 Borrowings related to variable interest entities — 1,459.6 — 1,459.6 1,461.7 Notes payable – direct corporate obligations — 937.4 — 937.4 925.0 December 31, 2014 Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,768.9 $ 1,768.9 $ 1,691.9 Policy loans — — 106.9 106.9 106.9 Other invested assets: Company-owned life insurance — 157.6 — 157.6 157.6 Alternative investment funds — 102.8 — 102.8 102.8 Cash and cash equivalents: Unrestricted 549.6 62.0 — 611.6 611.6 Held by variable interest entities 68.3 — — 68.3 68.3 Liabilities: Policyholder account balances — — 10,707.2 10,707.2 10,707.2 Investment borrowings — 1,520.4 — 1,520.4 1,519.2 Borrowings related to variable interest entities — 1,229.2 — 1,229.2 1,286.1 Notes payable – direct corporate obligations — 807.4 — 807.4 794.4 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, 2015 (dollars in millions): June 30, 2015 Beginning balance as of March 31, 2015 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, 2015 Amount of total gains (losses) for the three months ended June 30, 2015 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 $ 136.0 $ (6.2 ) $ (.9 ) $ (6.0 ) $ 10.8 $ — $ 133.7 $ — Asset-backed securities 65.8 (1.1 ) — (1.8 ) — (9.6 ) 53.3 — Commercial mortgage-backed securities 2.1 — — — — (0.9 ) 1.2 — Mortgage pass-through securities .2 — — — — — .2 — Total fixed maturities, available for sale 204.1 (7.3 ) (.9 ) (7.8 ) 10.8 (10.5 ) 188.4 — Equity securities - corporate securities 29.0 .9 — — — — 29.9 — Trading securities - commercial mortgage-backed securities — 9.4 — 1.9 28.6 — 39.9 1.9 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,102.1 ) (7.2 ) 35.3 — — — (1,074.0 ) 35.3 _________ (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, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ — $ (6.2 ) $ — $ — $ (6.2 ) Asset-backed securities — (1.1 ) — — (1.1 ) Total fixed maturities, available for sale — (7.3 ) — — (7.3 ) Equity securities - corporate securities .9 — — — .9 Trading securities - commercial mortgage-backed securities 9.4 — — — 9.4 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (33.0 ) 11.0 (.7 ) 15.5 (7.2 ) 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, 2015 (dollars in millions): June 30, 2015 Beginning balance as of December 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, 2015 Amount of total gains (losses) for the six months ended June 30, 2015 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 $ 365.9 $ (26.3 ) $ (2.2 ) $ (6.1 ) $ 9.1 $ (206.7 ) $ 133.7 $ — States and political subdivisions 35.5 — — — — (35.5 ) — — Asset-backed securities 59.2 (1.9 ) — (.6 ) 10.0 (13.4 ) 53.3 — Commercial mortgage-backed securities 1.2 — — — — — 1.2 — Mortgage pass-through securities .4 (.2 ) — — — — .2 — Total fixed maturities, available for sale 462.2 (28.4 ) (2.2 ) (6.7 ) 19.1 (255.6 ) 188.4 — Equity securities - corporate securities 28.0 1.9 — — — — 29.9 — Trading securities - commercial mortgage-backed securities 28.6 9.5 — 1.8 — — 39.9 1.8 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,081.5 ) (10.0 ) 17.5 — — — (1,074.0 ) 17.5 _________ (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, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ .1 $ (26.4 ) $ — $ — $ (26.3 ) Asset-backed securities 9.9 (11.8 ) — — (1.9 ) Mortgage pass-through securities — (.2 ) — — (.2 ) Total fixed maturities, available for sale 10.0 (38.4 ) — — (28.4 ) Equity securities - corporate securities 1.9 — — — 1.9 Trading securities - commercial mortgage-backed securities 9.5 — — — 9.5 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (63.4 ) 22.4 (2.3 ) 33.3 (10.0 ) 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, 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 $ — $ 4.0 $ 16.3 $ (15.0 ) $ 389.8 $ — States and political subdivisions — — — .7 28.0 — 28.7 — Asset-backed securities 42.2 (.5 ) — 1.1 9.9 — 52.7 — Collateralized debt obligations 14.1 (.1 ) — .2 — — 14.2 — Mortgage pass-through securities .4 .9 — — — — 1.3 — Collateralized mortgage obligations — — — (.1 ) .2 — .1 — Total fixed maturities, available for sale 393.5 48.0 — 5.9 54.4 (15.0 ) 486.8 — Equity securities - corporate securities 25.4 .8 — — — — 26.2 — Trading securities - collateralized mortgage obligations 5.9 — — — — — 5.9 — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (930.8 ) (38.7 ) (10.8 ) — — — (980.3 ) (10.8 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement (3.4 ) 3.4 — — — — — — Total liabilities (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 $ 51.0 $ (3.3 ) $ — $ — $ 47.7 Asset-backed securities — (.5 ) — — (.5 ) Collateralized debt obligations — (.1 ) — — (.1 ) Mortgage pass-through securities 1.1 (.2 ) — — .9 Total fixed maturities, available for sale 52.1 (4.1 ) — — 48.0 Equity securities - corporate securities .8 — — — .8 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (31.1 ) .5 (22.5 ) 14.4 (38.7 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement — 3.4 — — 3.4 Total liabilities (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 — — — 2.0 28.9 — (2.2 ) 28.7 — Asset-backed securities 42.2 9.0 — 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 — — — — .1 — — .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 — — — .1 5.8 — — 5.9 .1 Assets of subsidiary being sold — — — — — — 63.1 63.1 — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (903.7 ) (49.8 ) (26.8 ) — — — — (980.3 ) (26.8 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement (1.8 ) 1.8 — — — — — — — Total liabilities (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 $ 51.0 $ (9.8 ) $ — $ — $ 41.2 Asset-backed securities 9.9 (.9 ) — — 9.0 Collateralized debt obligations .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: Future policy benefits - embedded derivatives associated with fixed index annuity products (57.7 ) 3.6 (24.6 ) 28.9 (49.8 ) Other liabilities - embedded derivatives associated with modified coinsurance agreement — 3.4 (1.6 ) — 1.8 Total liabilities (57.7 ) 7.0 (26.2 ) 28.9 (48.0 ) |
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, 2015 (dollars in millions): Fair value at June 30, 2015 Valuation techniques Unobservable inputs Range (weighted average) Assets: Corporate securities (a) $ 52.3 Discounted cash flow analysis Discount margins 1.50% - 6.05% (4.09%) Asset-backed securities (b) 29.4 Discounted cash flow analysis Discount margins 1.92% - 4.15% (2.96%) Equity security (c) 29.9 Market approach Projected cash flows Not applicable Other assets categorized as Level 3 (d) 146.6 Unadjusted third-party price source Not applicable Not applicable Total 258.2 Liabilities: Future policy benefits (e) 1,074.0 Discounted projected embedded derivatives Projected portfolio yields 5.15% - 5.61% (5.42%) Discount rates 0.00 - 3.38% (1.96%) Surrender rates 1.98% - 47.88% (14.16%) ________________________________ (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 these 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) Equity security - This equity security represents an investment in a company that is constructing a manufacturing facility. The significant unobservable input is the cash flows that will be generated upon completion of the manufacturing facility. Given the nature of this investment, the best current indicator of value is the cost basis of the investment, which we believe approximates market value. (d) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. (e) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity 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, 2014 (dollars in millions): Fair value at December 31, 2014 Valuation techniques Unobservable inputs Range (weighted average) Assets: Corporate securities (a) $ 312.1 Discounted cash flow analysis Discount margins 1.48% - 5.83% (2.58%) Asset-backed securities (b) 30.6 Discounted cash flow analysis Discount margins 1.99% - 4.15% (2.95%) Equity security (c) 28.0 Market approach Projected cash flows Not applicable Other assets categorized as Level 3 (d) 148.1 Unadjusted third-party price source Not applicable Not applicable Total 518.8 Liabilities: Future policy benefits (e) 1,081.5 Discounted projected embedded derivatives Projected portfolio yields 5.15% - 5.61% (5.42%) Discount rates 0.00 - 2.74% (1.78%) Surrender rates 1.98% - 47.88% (14.16%) ________________________________ (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 these 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) Equity security - This equity security represents an investment in a company that is constructing a manufacturing facility. The significant unobservable input is the cash flows that will be generated upon completion of the manufacturing facility. Given the nature of this investment, the best current indicator of value is the cost basis of the investment, which we believe approximates market value. (d) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. (e) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity 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. |
BUSINESS AND BASIS OF PRESENT38
BUSINESS AND BASIS OF PRESENTATION (Details) | 6 Months Ended |
Jun. 30, 2015distribution_channel | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of distribution channels | 3 |
INVESTMENTS - NARRATIVE (Detail
INVESTMENTS - NARRATIVE (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)investment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | ||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Premium deficiencies adjustments to present value of future profits | $ (119) | $ (119) | ||||
Reduction to deferred acquisition costs due to unrealized gains that would result in premium deficiency if unrealized gains were realized | (140.5) | (140.5) | ||||
Accumulated Other Comprehensive Income Adjustment to Insurance Liabilities Due to Unrealized Gains That Would Result in Premium Deficiency if Unrealized Gains Were Realized | (82.6) | (82.6) | $ (381.4) | |||
Increase to deferred tax assets due to unrealized gains that would result in premium deficiency if unrealized gains were realized | 121.8 | 121.8 | ||||
Net realized investment gains (losses) | (10.1) | $ 12.4 | (1.2) | $ 35.8 | ||
Net realized investment gains (losses), excluding impairment losses | (2.2) | 12.4 | (3.3) | 47.7 | ||
Gain on dissolution of a variable interest entity | 0 | 0 | 11.3 | 0 | ||
Other than Temporary Impairment Losses, Investments | [1] | 7.9 | 0 | 9.2 | 11.9 | |
Value of available for sale securities sold | 181.7 | |||||
Impairment losses related to writedown of mortgage loans | 3.9 | |||||
Impairment losses related to private company investments did not meet expectations of previous valuations | $ 7.9 | 8 | ||||
Number of legacy private company investments | investment | 2 | |||||
Other Than Temporary Impairment Losses, Losses on Other Investments Following Unforeseen Events | $ 1.3 | |||||
Other-than-temporary impairments included in accumulated other comprehensive income | 3 | |||||
Total fixed maturities, available for sale [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Net realized investment gains (losses) | 6 | 1.9 | 4 | 37.9 | ||
Other than Temporary Impairment Losses, Investments | 0 | 0 | 1.3 | 0 | ||
Available-for-sale Securities, Gross Realized Losses | 5.5 | 3 | 20.9 | 8.5 | ||
Mortgage-backed and Asset-backed Securities [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Available For Sale Securities, Gross Investment Losses From Sale, Before Tax | 0.6 | |||||
Corporate debt securities [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Available-for-sale Securities, Gross Realized Losses | 20.3 | |||||
Embedded Derivative Financial Instruments [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Embedded Derivative, Gain on Embedded Derivative | 5.9 | |||||
Marketable securities [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Net realized investment gains (losses), excluding impairment losses | 1 | 41.8 | ||||
Coinsurance [Member] | Embedded Derivative Financial Instruments [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Embedded Derivative, Loss on Embedded Derivative | 4.3 | |||||
Impairment of mortgage loans and other investments [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Other than Temporary Impairment Losses, Investments | $ 7.9 | $ 0 | $ 7.9 | $ 11.9 | ||
[1] | No portion of the other-than-temporary impairments recognized in the periods were included in other comprehensive income. |
INVESTMENTS - SCHEDULE OF UNREA
INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Investments, Debt and Equity Securities [Abstract] | ||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ 6.4 | $ 5.3 |
Net unrealized gains on all other investments | 1,461.3 | 2,207.7 |
Adjustment to present value of future profits | (137.3) | (149.9) |
Adjustment to deferred acquisition costs | (301.3) | (390.5) |
Adjustment to insurance liabilities | (82.6) | (381.4) |
Unrecognized net loss related to deferred compensation plan | (6) | (8.5) |
Deferred income tax liabilities | (335.5) | (457.4) |
Accumulated other comprehensive income | $ 605 | $ 825.3 |
INVESTMENTS - SCHEDULE OF AMORT
INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND OTHER-THAN-TEMPORARY IMPAIRMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 18,758.2 | $ 18,408.1 |
Other-than-temporary impairments included in accumulated other comprehensive income | (3) | |
Corporate debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 12,470.4 | |
Gross unrealized gains | 1,189.7 | |
Gross unrealized losses | (143.2) | |
Estimated fair value | 13,516.9 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
US treasury and government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 149.9 | |
Gross unrealized gains | 16.3 | |
Gross unrealized losses | 0 | |
Estimated fair value | 166.2 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
US states and political subdivisions debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,000.6 | |
Gross unrealized gains | 215.8 | |
Gross unrealized losses | (15) | |
Estimated fair value | 2,201.4 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Foreign government debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1.8 | |
Gross unrealized gains | 0.1 | |
Gross unrealized losses | 0 | |
Estimated fair value | 1.9 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,338.8 | |
Gross unrealized gains | 70.4 | |
Gross unrealized losses | (3.2) | |
Estimated fair value | 1,406 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Collateralized debt obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 343.8 | |
Gross unrealized gains | 1.7 | |
Gross unrealized losses | (1.2) | |
Estimated fair value | 344.3 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Commercial mortgage backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,323.7 | |
Gross unrealized gains | 64 | |
Gross unrealized losses | (5.1) | |
Estimated fair value | 1,382.6 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Mortgage pass through securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 3.5 | |
Gross unrealized gains | 0.3 | |
Gross unrealized losses | 0 | |
Estimated fair value | 3.8 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,125.7 | |
Gross unrealized gains | 76.9 | |
Gross unrealized losses | (0.9) | |
Estimated fair value | 1,201.7 | |
Other-than-temporary impairments included in accumulated other comprehensive income | (3) | |
Total fixed maturities, available for sale [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 18,758.2 | |
Gross unrealized gains | 1,635.2 | |
Gross unrealized losses | (168.6) | |
Estimated fair value | 20,224.8 | |
Other-than-temporary impairments included in accumulated other comprehensive income | (3) | |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 418.6 | |
Gross unrealized gains | 16.3 | |
Gross unrealized losses | (1.6) | |
Estimated fair value | $ 433.3 |
INVESTMENTS - SUMMARY OF INVEST
INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Amortized cost | ||
Due in one year or less | $ 231.4 | |
Due after one year through five years | 2,175 | |
Due after five years through ten years | 2,213 | |
Due after ten years | 10,003.3 | |
Subtotal | 14,622.7 | |
Structured securities | 4,135.5 | |
Amortized cost | 18,758.2 | $ 18,408.1 |
Estimated fair value | ||
Due in one year or less | 235.6 | |
Due after one year through five years | 2,371.7 | |
Due after five years through ten years | 2,365.3 | |
Due after ten years | 10,913.8 | |
Subtotal | 15,886.4 | |
Structured securities | 4,338.4 | |
Total fixed maturities, available for sale | $ 20,224.8 | $ 20,634.9 |
INVESTMENTS - NET REALIZED INVE
INVESTMENTS - NET REALIZED INVESTMENT GAINS (LOSSES) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Gain (Loss) on Investments [Line Items] | |||||
Total other-than-temporary impairment losses | [1] | $ (7.9) | $ 0 | $ (9.2) | $ (11.9) |
Total realized gains (losses) | (10.1) | 12.4 | (1.2) | 35.8 | |
Gain on dissolution of a variable interest entity | 0 | 0 | 11.3 | 0 | |
Total fixed maturities, available for sale [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Gross realized gains on sale | 11.5 | 4.9 | 26.2 | 46.4 | |
Gross realized losses on sale | (5.5) | (3) | (20.9) | (8.5) | |
Total other-than-temporary impairment losses | 0 | 0 | (1.3) | 0 | |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 0 | 0 | 0 | 0 | |
Net impairment losses recognized | 0 | 0 | (1.3) | 0 | |
Total realized gains (losses) | 6 | 1.9 | 4 | 37.9 | |
Equity securities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total realized gains (losses) | 0.5 | 7.9 | 3 | 7.9 | |
Commercial mortgage loans [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total realized gains (losses) | 0 | 1.1 | (2.3) | 1.1 | |
Other securities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total realized gains (losses) | (8.7) | 1.5 | (9.3) | 0.8 | |
Investments [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Change in estimated fair value of trading securities | (3.9) | 6.1 | |||
Impairment of mortgage loans and other investments [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total other-than-temporary impairment losses | $ (7.9) | $ 0 | $ (7.9) | $ (11.9) | |
[1] | No portion of the other-than-temporary impairments recognized in the periods were included in other comprehensive income. |
INVESTMENTS - SCHEDULE OF OTHER
INVESTMENTS - SCHEDULE OF OTHER THAN TEMPORARY IMPAIRMENT (Details) - Available-for-sale securities [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ (1) | $ (1.3) | $ (1) | $ (1.3) |
Add: credit losses on other-than-temporary impairments not previously recognized | 0 | 0 | 0 | 0 |
Less: credit losses on securities sold | 0 | 0.1 | 0 | 0.1 |
Less: credit losses on securities impaired due to intent to sell | 0 | 0 | 0 | 0 |
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) | $ (1.2) | $ (1) | $ (1.2) |
INVESTMENTS - SUMMARY OF INVE45
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | $ 2,757.2 | $ 1,411.9 |
Unrealized losses, less than 12 months | (143.3) | (72.3) |
Fair value, twelve months or longer | 338.6 | 439.2 |
Unrealized losses, 12 months or longer | (25.3) | (24.5) |
Fair value, total | 3,095.8 | 1,851.1 |
Unrealized losses, total | (168.6) | (96.8) |
US treasury and government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 7.6 | 12.1 |
Unrealized losses, less than 12 months | 0 | (0.1) |
Fair value, twelve months or longer | 0 | 4.6 |
Unrealized losses, 12 months or longer | 0 | 0 |
Fair value, total | 7.6 | 16.7 |
Unrealized losses, total | 0 | (0.1) |
US states and political subdivisions debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 213.4 | 13.2 |
Unrealized losses, less than 12 months | (9.4) | (0.3) |
Fair value, twelve months or longer | 24.9 | 44.5 |
Unrealized losses, 12 months or longer | (5.6) | (2.7) |
Fair value, total | 238.3 | 57.7 |
Unrealized losses, total | (15) | (3) |
Corporate debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 1,942.5 | 985 |
Unrealized losses, less than 12 months | (125.2) | (65.9) |
Fair value, twelve months or longer | 184.1 | 297.5 |
Unrealized losses, 12 months or longer | (18) | (19.2) |
Fair value, total | 2,126.6 | 1,282.5 |
Unrealized losses, total | (143.2) | (85.1) |
Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 241.5 | 91.2 |
Unrealized losses, less than 12 months | (2.5) | (1.3) |
Fair value, twelve months or longer | 54.3 | 60.5 |
Unrealized losses, 12 months or longer | (0.7) | (2.1) |
Fair value, total | 295.8 | 151.7 |
Unrealized losses, total | (3.2) | (3.4) |
Collateralized debt obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 108.2 | 184.2 |
Unrealized losses, less than 12 months | (0.6) | (3.4) |
Fair value, twelve months or longer | 46.1 | 0 |
Unrealized losses, 12 months or longer | (0.6) | 0 |
Fair value, total | 154.3 | 184.2 |
Unrealized losses, total | (1.2) | (3.4) |
Commercial mortgage backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 175.6 | 46.7 |
Unrealized losses, less than 12 months | (5.1) | (0.5) |
Fair value, twelve months or longer | 4.7 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Fair value, total | 180.3 | 46.7 |
Unrealized losses, total | (5.1) | (0.5) |
Mortgage pass through securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 0 | 0.5 |
Unrealized losses, less than 12 months | 0 | 0 |
Fair value, twelve months or longer | 0.3 | 0.1 |
Unrealized losses, 12 months or longer | 0 | 0 |
Fair value, total | 0.3 | 0.6 |
Unrealized losses, total | 0 | 0 |
Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 68.4 | 79 |
Unrealized losses, less than 12 months | (0.5) | (0.8) |
Fair value, twelve months or longer | 24.2 | 32 |
Unrealized losses, 12 months or longer | (0.4) | (0.5) |
Fair value, total | 92.6 | 111 |
Unrealized losses, total | (0.9) | (1.3) |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 118.3 | 13.2 |
Unrealized losses, less than 12 months | (1.4) | (0.6) |
Fair value, twelve months or longer | 1.6 | 0.5 |
Unrealized losses, 12 months or longer | (0.2) | 0 |
Fair value, total | 119.9 | 13.7 |
Unrealized losses, total | $ (1.6) | $ (0.6) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | ||||
Net income (loss) for basic and diluted earnings per share | $ 46.8 | $ 78.1 | $ 99.6 | $ (149.9) |
Shares: | ||||
Weighted average shares outstanding for basic earnings per share (in shares) | 195,857 | 216,538 | 198,174 | 218,422 |
Effect of dilutive securities on weighted average shares | ||||
Stock options, restricted stock and performance units (in shares) | 2,216 | 2,390 | 2,000 | 0 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,687 | |||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 0 | 3,180 | 0 | 0 |
Weighted average shares outstanding for diluted earnings per share (in shares) | 198,073 | 222,108 | 200,174 | 218,422 |
Stock Compensation Plan [Member] | ||||
Effect of dilutive securities on weighted average shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,464 | |||
Warrant [Member] | ||||
Effect of dilutive securities on weighted average shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,223 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Fee revenue and other income | $ 15.6 | $ 7 | $ 31.8 | $ 13.4 |
Total revenues | 951.2 | 969.7 | 1,906.1 | 1,920.3 |
Benefits and expenses: | ||||
Insurance policy benefits | 568.3 | 691.1 | 1,174.3 | 1,381.4 |
Other operating costs and expenses | 182.2 | 201.5 | 380.1 | 395.6 |
Total expenses | 857.4 | 861 | 1,719.3 | 1,719.6 |
Pre-tax operating earnings | 93.8 | 108.7 | 186.8 | 200.7 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Total segment revenues | 951.2 | 969.7 | 1,906.1 | 1,920.3 |
Net realized investment gains (losses) | (10.1) | 11.7 | (12.5) | 33 |
Revenues related to certain non-strategic investments and earnings attributable to VIEs | 10.9 | 7.3 | 29.2 | 13.6 |
Fee revenue related to transition and support services agreements | 7.5 | 0 | 15 | 0 |
Revenues of CLIC prior to being sold | 0 | 104.3 | 0 | 210.8 |
Total revenues | 959.5 | 1,093 | 1,937.8 | 2,177.7 |
Total segment expenses | 857.4 | 861 | 1,719.3 | 1,719.6 |
Insurance policy benefits - fair value changes in embedded derivative liabilities | (34) | 10.1 | (17.1) | 25.3 |
Amortization related to fair value changes in embedded derivative liabilities | 8.3 | (2.7) | 4.1 | (6.9) |
Amortization related to net realized investment gains | 0.3 | 0.1 | 0.1 | 0.5 |
Expenses related to certain non-strategic investments and expenses attributable to VIEs | 12 | 10.2 | 22.5 | 19.8 |
Fair value changes related to agent deferred compensation plan | 0 | 11.8 | 0 | 11.8 |
Loss on extinguishment or modification of debt | 32.8 | 0.6 | 32.8 | 0.6 |
Loss on sale of subsidiary, gain on reinsurance transaction and transition expenses | 4.5 | (3.8) | 9 | 274.8 |
Expenses related to transition and support services agreements | 5.5 | 0 | 12.1 | 0 |
Expenses of CLIC prior to being sold | 0 | 91.3 | 0 | 187.4 |
Total benefits and expenses | 886.8 | 978.6 | 1,782.8 | 2,232.9 |
Income (loss) before income taxes | 72.7 | 114.4 | 155 | (55.2) |
Tax expense on period income | 25.9 | 40.3 | 55.4 | 79.3 |
Valuation allowance for deferred tax assets and other tax items | 0 | (4) | 0 | 15.4 |
Net income (loss) | 46.8 | 78.1 | 99.6 | (149.9) |
Bankers Life [Member] | ||||
Revenues: | ||||
Annuities | 6.1 | 7.7 | 11.8 | 15.2 |
Health | 313.1 | 320.5 | 628.9 | 651 |
Life | 94.7 | 79.9 | 185.9 | 158.2 |
Net investment income | 225.2 | 247.6 | 451.7 | 472 |
Fee revenue and other income | 6.5 | 5.8 | 12.8 | 11.1 |
Total revenues | 645.6 | 661.5 | 1,291.1 | 1,307.5 |
Benefits and expenses: | ||||
Insurance policy benefits | 410.7 | 427.9 | 816 | 842.9 |
Amortization | 47.7 | 45.4 | 99.3 | 93.6 |
Interest expense on investment borrowings | 2.1 | 1.9 | 4.2 | 3.8 |
Other operating costs and expenses | 98.7 | 98.9 | 203 | 195.6 |
Total expenses | 559.2 | 574.1 | 1,122.5 | 1,135.9 |
Pre-tax operating earnings | 86.4 | 87.4 | 168.6 | 171.6 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Total segment revenues | 645.6 | 661.5 | 1,291.1 | 1,307.5 |
Total segment expenses | 559.2 | 574.1 | 1,122.5 | 1,135.9 |
Washington National [Member] | ||||
Revenues: | ||||
Annuities | 0.7 | 1.4 | 1.6 | 2.4 |
Health | 152.7 | 148.8 | 304.9 | 297.7 |
Life | 6.2 | 6.5 | 12.6 | 12.2 |
Net investment income | 63.1 | 71.8 | 128.7 | 140.8 |
Fee revenue and other income | 0.3 | 0.2 | 0.7 | 0.4 |
Total revenues | 223 | 228.7 | 448.5 | 453.5 |
Benefits and expenses: | ||||
Insurance policy benefits | 143.8 | 132.8 | 279 | 264.6 |
Amortization | 13.7 | 16 | 29 | 32.3 |
Interest expense on investment borrowings | 0.5 | 0.5 | 0.9 | 0.9 |
Other operating costs and expenses | 44.9 | 47.1 | 91 | 92.3 |
Total expenses | 202.9 | 196.4 | 399.9 | 390.1 |
Pre-tax operating earnings | 20.1 | 32.3 | 48.6 | 63.4 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Total segment revenues | 223 | 228.7 | 448.5 | 453.5 |
Total segment expenses | 202.9 | 196.4 | 399.9 | 390.1 |
Colonial Penn [Member] | ||||
Revenues: | ||||
Health | 0.8 | 0.9 | 1.6 | 1.9 |
Life | 65.8 | 60.8 | 129.3 | 120.3 |
Net investment income | 10.8 | 10.5 | 21.5 | 21.2 |
Fee revenue and other income | 0.2 | 0.3 | 0.5 | 0.5 |
Total revenues | 77.6 | 72.5 | 152.9 | 143.9 |
Benefits and expenses: | ||||
Insurance policy benefits | 47.8 | 43.2 | 96.4 | 87.9 |
Amortization | 3.7 | 3.8 | 7.3 | 7.8 |
Other operating costs and expenses | 21.9 | 21.7 | 50.9 | 50.6 |
Total expenses | 73.4 | 68.7 | 154.6 | 146.3 |
Pre-tax operating earnings | 4.2 | 3.8 | (1.7) | (2.4) |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Total segment revenues | 77.6 | 72.5 | 152.9 | 143.9 |
Total segment expenses | 73.4 | 68.7 | 154.6 | 146.3 |
Corporate operations [Member] | ||||
Revenues: | ||||
Net investment income | 2.8 | 5.7 | 9.5 | 12.7 |
Fee revenue and other income | 2.2 | 1.3 | 4.1 | 2.7 |
Total revenues | 5 | 7 | 13.6 | 15.4 |
Benefits and expenses: | ||||
Interest expense on investment borrowings | 0.1 | 0 | 0.1 | 0 |
Interest expense on corporate debt | 11.9 | 11.1 | 22.4 | 22.2 |
Other operating costs and expenses | 9.9 | 10.7 | 19.8 | 25.1 |
Total expenses | 21.9 | 21.8 | 42.3 | 47.3 |
Pre-tax operating earnings | (16.9) | (14.8) | (28.7) | (31.9) |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Total segment revenues | 5 | 7 | 13.6 | 15.4 |
Total segment expenses | $ 21.9 | $ 21.8 | $ 42.3 | $ 47.3 |
ACCOUNTING FOR DERIVATIVES - FA
ACCOUNTING FOR DERIVATIVES - FAIR VALUE BY BALANCE SHEET LOCATION (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Equity Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 63.8 | $ 107.2 |
Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | (0.1) | (0.2) |
Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 61.4 | 109 |
Liabilities | 1,074 | 1,081.5 |
Not Designated as Hedging Instrument [Member] | Equity Contract [Member] | Other Invested Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 63.8 | 107.2 |
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Invested Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | (0.1) | (0.2) |
Not Designated as Hedging Instrument [Member] | Reinsurance Receivables - Embedded Derivative [Member] | Other Invested Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | (2.3) | 2 |
Not Designated as Hedging Instrument [Member] | Equity Index Annuities - Embedded Derivative [Member] | Future Policy Benefits [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ 1,074 | $ 1,081.5 |
ACCOUNTING FOR DERIVATIVES - SC
ACCOUNTING FOR DERIVATIVES - SCHEDULE PRE-TAX GAINS (LOSSES) RECOGNIZED IN NET INCOME FOR DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ 23.8 | $ 18.8 | $ 3.6 | $ 3.9 |
Investment Income [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (5.9) | 31.5 | (8) | 35.3 |
Investment Income [Member] | Equity Swap [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (5.9) | 31.3 | (8) | 36.7 |
Investment Income [Member] | Embedded Derivative Financial Instruments [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0.2 | 0 | (1.4) |
Gain (Loss) on Investments [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (5.6) | (1.9) | (5.9) | (4.6) |
Gain (Loss) on Investments [Member] | Interest Rate Contract [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0.1 | (1.9) | (1.6) | (4.6) |
Insurance Policy Benefits [Member] | Embedded Derivative Financial Instruments [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 35.3 | (10.8) | 17.5 | (26.8) |
Coinsurance [Member] | Gain (Loss) on Investments [Member] | Embedded Derivative Financial Instruments [Member] | ||||
Derivative [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (5.7) | $ 0 | $ (4.3) | $ 0 |
ACCOUNTING FOR DERIVATIVES - DE
ACCOUNTING FOR DERIVATIVES - DERIVATIVES WITH MASTER NETTING ARRANGEMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Gross amounts recognized | $ 20.4 | $ 20.4 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts of liabilities presented in the balance sheet | 20.4 | 20.4 |
Financial instruments | 20.4 | 20.4 |
Cash collateral received | 0 | 0 |
Net amount | 0 | 0 |
Fair value of collateralized investment securities | 25.4 | 25.3 |
Equity Contract [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | 63.8 | 107.2 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts of assets presented in the balance sheet | 63.8 | 107.2 |
Financial instruments | 0 | 0 |
Cash collateral received | 0 | 0 |
Net amount | 63.8 | 107.2 |
Interest Rate Contract [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | (0.1) | (0.2) |
Gross amounts offset in the balance sheet | 0.8 | 1.5 |
Net amounts of assets presented in the balance sheet | 0.7 | 1.3 |
Financial instruments | 0 | 0 |
Cash collateral received | 0 | 0 |
Net amount | 0.7 | 1.3 |
Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | 61.4 | 109 |
Other Invested Assets [Member] | Not Designated as Hedging Instrument [Member] | Equity Contract [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | 63.8 | 107.2 |
Other Invested Assets [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | $ (0.1) | $ (0.2) |
ACCOUNTING FOR DERIVATIVES (Det
ACCOUNTING FOR DERIVATIVES (Details) $ in Millions | Jun. 30, 2015USD ($) |
Equity Contract [Member] | |
Derivative [Line Items] | |
Notional amount | $ 2,400 |
Embedded Derivative Associated With Modified Coinsurance Agreement [Member] | |
Derivative [Line Items] | |
Embedded derivative | $ 152 |
REINSURANCE (Details)
REINSURANCE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||
Ceded premiums written | $ 33.3 | $ 55.4 | $ 67.2 | $ 107.5 | |
Ceded insurance policy benefits | 53.8 | 61.2 | 93.2 | 120.8 | |
Assumed premiums written | $ 9.9 | 3.8 | $ 19.8 | $ 14.7 | |
Gain related to reinsurance transaction | $ 3.8 | ||||
Coventry health care marketing and quota share agreements [Member] | |||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||
Assumed premiums written | $ 6.8 |
INCOME TAXES - COMPONENTS OF TA
INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Current tax expense | $ 3.3 | $ 3.9 | $ 6.2 | $ 6.1 |
Deferred tax expense | 22.6 | 36.4 | 49 | 73.2 |
Income tax expense calculated based on estimated annual effective tax rate | 25.9 | 40.3 | 55.2 | 79.3 |
Tax expense related to the sale of CLIC | 0 | 0 | 0 | 19.4 |
Other items | 0 | (4) | 0.2 | (4) |
Total income tax expense | $ 25.9 | $ 36.3 | $ 55.4 | $ 94.7 |
INCOME TAXES - RECONCILIATION O
INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
U.S. statutory corporate rate | 35.00% | 35.00% |
Non-taxable income and nondeductible benefits, net | (1.00%) | (1.00%) |
State taxes | 1.60% | 1.50% |
Estimated annual effective tax rate | 35.60% | 35.50% |
INCOME TAXES - DEFERRED ASSETS
INCOME TAXES - DEFERRED ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net federal operating loss carryforwards | $ 1,001.2 | $ 1,048.4 |
Net state operating loss carryforwards | 14.3 | 15.2 |
Tax credits | 50.3 | 47.2 |
Capital loss carryforwards | 0.1 | 0 |
Investments | 47 | 59.7 |
Insurance liabilities | 589.3 | 585.9 |
Other | 61.1 | 67.3 |
Gross deferred tax assets | 1,763.3 | 1,823.7 |
Deferred tax liabilities: | ||
Present value of future profits and deferred acquisition costs | (309.1) | (320.5) |
Accumulated other comprehensive income | (335.5) | (457.4) |
Gross deferred tax liabilities | (644.6) | (777.9) |
Net deferred tax assets before valuation allowance | 1,118.7 | 1,045.8 |
Valuation allowance | (246) | (246) |
Net deferred tax assets | 872.7 | 799.8 |
Current income taxes accrued | (44.9) | (41.1) |
Income tax assets, net | $ 827.8 | $ 758.7 |
INCOME TAXES - NET OPERATING LO
INCOME TAXES - NET OPERATING LOSSES (Details) - Jun. 30, 2015 - USD ($) $ in Millions | Total |
Operating Loss Carryforwards [Line Items] | |
Total loss carryforwards | $ 3,400.8 |
Total loss carryforwards, unrecognized tax benefit | (540.3) |
Total loss carryforwards, net of unrecognized tax benefits | 2,860.5 |
Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 715 |
Net operating loss carryforward, unrecognized tax benefit | (342.9) |
Net operating loss carryforwards, net of unrecognized tax benefits | 372.1 |
Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 2,685.8 |
Net operating loss carryforward, unrecognized tax benefit | (197.4) |
Net operating loss carryforwards, net of unrecognized tax benefits | $ 2,488.4 |
Carryforward Expiration 2023 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2023 |
Total loss carryforwards | $ 2,698 |
Carryforward Expiration 2023 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 715 |
Carryforward Expiration 2023 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 1,983 |
Carryforward Expiration 2025 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2025 |
Total loss carryforwards | $ 91.5 |
Carryforward Expiration 2025 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2025 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 91.5 |
Carryforward Expiration 2026 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2026 |
Total loss carryforwards | $ 207.4 |
Carryforward Expiration 2026 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2026 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 207.4 |
Carryforward Expiration 2027 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2027 |
Total loss carryforwards | $ 4.9 |
Carryforward Expiration 2027 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2027 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 4.9 |
Carryforward Expiration 2028 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2028 |
Total loss carryforwards | $ 203.7 |
Carryforward Expiration 2028 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2028 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 203.7 |
Carryforward Expiration 2029 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2029 |
Total loss carryforwards | $ 146.6 |
Carryforward Expiration 2029 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2029 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 146.6 |
Carryforward Expiration 2032 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2032 |
Total loss carryforwards | $ 44 |
Carryforward Expiration 2032 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2032 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 44 |
Carryforward Expiration 2035 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2035 |
Total loss carryforwards | $ 4.7 |
Carryforward Expiration 2035 [Member] | Life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
Carryforward Expiration 2035 [Member] | Non life insurance companies [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 4.7 |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2008 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |||||||
Loss on sale of subsidiary, gain on reinsurance transaction and transition expenses | $ 4.5 | $ (3.8) | $ 9 | $ 274.8 | |||
Deferred tax assets more likely than not to be realized through future taxable earnings | 872.7 | 872.7 | $ 799.8 | ||||
Deferred Tax Assets Before Valuation Allowance | 1,118.7 | 1,118.7 | 1,045.8 | ||||
Valuation allowance | $ 246 | $ 246 | 246 | ||||
Valuation allowance historical input period | 3 years | ||||||
Core Growth Rate for the Next Five Years, Included in Deferred Tax Valuation Analysis | 3.00% | ||||||
Assumed Growth Rate For the Next Five Years, Included in Deferred Tax Valuation Analysis, Period Increase | 1.00% | ||||||
Aggregate Growth Rate for the Next Five Years, Included in Deferred Tax Valuation Analysis | 4.00% | 4.00% | |||||
Valuation allowance model, forecast period of Model | 5 years | ||||||
Estimated normalized annual taxable income for the current year | $ 320 | ||||||
Estimated Normalized Annual Taxable Income For Current Year, Non-life Taxable Income | 50 | ||||||
Estimated Normalized Annual Taxable Income For Current Year, Life Income | $ 270 | ||||||
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 | 2.50% | 2.50% | |||||
Ownership change threshold restricting NOL usage | 50.00% | 50.00% | |||||
Capital Loss Carryforward | $ 0.2 | $ 0.2 | |||||
Net state operating loss carryforwards | 14.3 | 14.3 | $ 15.2 | ||||
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 | 34 | 34 | |||||
Internal Revenue Service [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Net operating loss carryforwards | 2,900 | 2,900 | |||||
Life insurance companies [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Net operating loss carryforwards | 715 | 715 | |||||
Loss on investment in senior health | 742 | ||||||
Non life insurance companies [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Net operating loss carryforwards | $ 2,685.8 | $ 2,685.8 | |||||
Loss on investment in senior health | $ 136 | ||||||
Conseco Life Insurance Company [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Loss on sale of subsidiary, gain on reinsurance transaction and transition expenses | $ 278.6 |
NOTES PAYABLE - SCHEDULE OF LON
NOTES PAYABLE - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2015 | May. 19, 2015 | Dec. 31, 2014 | Sep. 28, 2012 |
Debt Instruments [Abstract] | ||||
Direct corporate obligations | $ 925 | $ 794.4 | ||
Previous Senior Secured Credit Agreement [Member] | ||||
Debt Instruments [Abstract] | ||||
Direct corporate obligations | 0 | 522.1 | ||
Unamortized Discount | 0 | (2.7) | ||
Senior notes [Member] | Senior note 4.500 percent [Member] | ||||
Debt Instruments [Abstract] | ||||
Direct corporate obligations | 325 | 0 | ||
Interest rate | 4.50% | |||
Senior notes [Member] | Senior note 5.250 percent [Member] | ||||
Debt Instruments [Abstract] | ||||
Direct corporate obligations | 500 | 0 | ||
Interest rate | 5.25% | |||
Senior notes [Member] | Senior secured note 6.375 percent [Member] | ||||
Debt Instruments [Abstract] | ||||
Direct corporate obligations | 0 | 275 | ||
Interest rate | 6.375% | |||
New Revolving Credit Agreement [Member] | Line of credit [Member] | ||||
Debt Instruments [Abstract] | ||||
Direct corporate obligations | $ 100 | $ 0 |
NOTES PAYABLE - NEW NOTES (Deta
NOTES PAYABLE - NEW NOTES (Details) - USD ($) | May. 19, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 28, 2012 |
Debt Instrument [Line Items] | ||||
Notes payable - direct corporate obligations | $ 925,000,000 | $ 794,400,000 | ||
Senior note 4.500 percent [Member] | Senior notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 325,000,000 | |||
Notes payable - direct corporate obligations | 325,000,000 | 0 | ||
Interest rate | 4.50% | |||
Senior note 5.250 percent [Member] | Senior notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 500,000,000 | |||
Notes payable - direct corporate obligations | 500,000,000 | 0 | ||
Interest rate | 5.25% | |||
Senior secured note 6.375 percent [Member] | Senior notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable - direct corporate obligations | 0 | 275,000,000 | ||
Interest rate | 6.375% | |||
New Revolving Credit Agreement [Member] | Line of credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable - direct corporate obligations | $ 100,000,000 | $ 0 | ||
Maximum borrowing capacity | $ 150,000,000 | |||
Debt instrument term | 4 years | |||
On and After February 28, 2025 [Member] | Senior note 5.250 percent [Member] | Senior notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percent | 100.00% | |||
Change of Control Repurchase Event [Member] | Senior note 5.250 percent [Member] | Senior notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percent | 101.00% |
NOTES PAYABLE - NEW REVOLVING C
NOTES PAYABLE - NEW REVOLVING CREDIT AGREEMENT (Details) - Line of credit [Member] | May. 19, 2015USD ($) | Jun. 30, 2015USD ($) |
New Revolving Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Initial drawing amount | $ 100,000,000 | |
Remaining borrowing capacity | 50,000,000 | |
Maximum borrowing capacity | 150,000,000 | |
Potential additional borrowing capacity | $ 50,000,000 | |
Fronting fee as a percent of aggregate face amount of letters of credit outstanding | 0.125% | |
Debt covenant, required minimum debt to total capitalization ratio | 0.3 | |
Debt covenant, actual debt to total capitalization ratio at period end | 0.198 | |
Debt covenant, minimum required aggregate total adjusted capital to company action level risk-based capital ratio | 2.50 | |
Debt covenant, actual aggregate total adjusted capital to company action level risk-based capital ratio at period end | 4.43 | |
Debt covenant, minimum required consolidated net worth, component one, amount | $ 2,674,000,000 | |
Debt covenant, minimum required consolidated net worth, component two, as a percent of net equity proceeds received from issuance and sale of equity interests | 0.50 | |
Debt covenant, actual consolidated net worth at period end | $ 3,759,200,000 | |
Debt covenant, required minimum consolidated net worth, amount | $ 2,675,000,000 | |
New Revolving Credit Agreement [Member] | Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
New Revolving Credit Agreement [Member] | One-Month Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% | |
New Revolving Credit Agreement [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Interest rate on amounts outstanding at period end | 2.19% | |
Bridge Loan [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 5,000,000 | |
Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 5,000,000 |
NOTES PAYABLE - PREVIOUS SENIOR
NOTES PAYABLE - PREVIOUS SENIOR SECURED CREDIT AGREEMENT AND 6.375% NOTES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 28, 2012 | |
Debt Instrument [Line Items] | |||||
Sources of cash, notes payable | $ 925 | $ 909 | $ 0 | ||
Uses of cash, repayments of notes payable | 797.1 | 29.5 | |||
Uses of cash, accrued interest | 42.6 | 45.2 | |||
Total uses of cash from debt refinancing transactions | 925 | ||||
Loss on extinguishment or modification of debt | (32.8) | $ (0.6) | (32.8) | $ (0.6) | |
Senior secured note 6.375 percent [Member] | |||||
Debt Instrument [Line Items] | |||||
Uses of cash, repayments of notes payable | 292.8 | ||||
Senior Secured Notes and 6.375 Percent Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Uses of cash, accrued interest | 4.3 | ||||
Senior Debt Obligations [Member] | |||||
Debt Instrument [Line Items] | |||||
Uses of cash, repayments of notes payable | 502.3 | ||||
Senior Notes and Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Uses of cash, debt issuance costs | 16 | ||||
Uses of cash, general corporate purposes | 109.6 | ||||
Senior notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Sources of cash, notes payable | 825 | ||||
Senior notes [Member] | Senior secured note 6.375 percent [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 6.375% | ||||
New Revolving Credit Agreement [Member] | Line of credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Sources of cash, notes payable | $ 100 | ||||
Secured Debt [Member] | Line of credit [Member] | Previous Senior Secured Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Additional debt repayment | $ 19.8 |
NOTES PAYABLE - DIRECT CORPOR62
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - SCHEDULED REPAYMENT (Details) $ in Millions | Jun. 30, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 0 |
2,017 | 0 |
2,018 | 0 |
2,019 | 100 |
2,020 | 325 |
Thereafter | 500 |
Long-term Debt | $ 925 |
INVESTMENT BORROWINGS (Details)
INVESTMENT BORROWINGS (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 1,518.9 | $ 1,519.2 | |
Secured Debt, Repurchase Agreements | 20.4 | ||
Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Federal Home Loan Bank stock | 72.2 | ||
Investment borrowings | 1,498.5 | ||
Federal Home Loan Bank, Advances, collateral pledged | 1,800 | ||
Aggregate Fee to Prepay All Fixed Rate FHLB Borrowings | 1.2 | ||
Interest Expense on FHLB Borrowings | 5.2 | $ 13.8 | |
Borrowings due June 2016 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 100 | ||
Maturity date | Jun. 30, 2016 | ||
Interest rate | 0.627% | ||
Borrowings due June 2016 rate two [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 75 | ||
Maturity date | Jun. 30, 2016 | ||
Interest rate | 0.442% | ||
Borrowings due October 2016 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 100 | ||
Maturity date | Oct. 31, 2016 | ||
Interest rate | 0.451% | ||
Borrowings due November 2016 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Nov. 30, 2016 | ||
Interest rate | 0.549% | ||
Borrowings due November 2016 rate two [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Nov. 30, 2016 | ||
Interest rate | 0.657% | ||
Borrowings due June 2017 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 57.7 | ||
Maturity date | Jun. 30, 2017 | ||
Interest rate | 0.615% | ||
Borrowings due August 2017 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Aug. 31, 2017 | ||
Interest rate | 0.474% | ||
Borrowings due August 2017 rate two [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 75 | ||
Maturity date | Aug. 31, 2017 | ||
Interest rate | 0.432% | ||
Borrowings due October 2017 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 100 | ||
Maturity date | Oct. 31, 2017 | ||
Interest rate | 0.705% | ||
Borrowings due November 2017 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Nov. 30, 2017 | ||
Interest rate | 0.792% | ||
Borrowings due January 2018 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Jan. 31, 2018 | ||
Interest rate | 0.626% | ||
Borrowings due January 2018 rate two [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Jan. 31, 2018 | ||
Interest rate | 0.617% | ||
Borrowings due February 2018 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Feb. 28, 2018 | ||
Interest rate | 0.586% | ||
Borrowings due February 2018 rate two [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Feb. 28, 2018 | ||
Interest rate | 0.366% | ||
Borrowings due February 2018 rate three [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 22 | ||
Maturity date | Feb. 28, 2018 | ||
Interest rate | 0.616% | ||
Borrowings due May 2018 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 100 | ||
Maturity date | May 30, 2018 | ||
Interest rate | 0.636% | ||
Borrowings due July 2018 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Jul. 31, 2018 | ||
Interest rate | 0.749% | ||
Borrowings due August 2018 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Aug. 31, 2018 | ||
Interest rate | 0.394% | ||
Borrowings due January 2019 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Jan. 31, 2019 | ||
Interest rate | 0.696% | ||
Borrowings due February 2019 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | Feb. 28, 2019 | ||
Interest rate | 0.366% | ||
Borrowings due March 2019 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 100 | ||
Maturity date | Mar. 31, 2019 | ||
Interest rate | 0.665% | ||
Borrowings due July 2019 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 21.8 | ||
Maturity date | Jul. 31, 2019 | ||
Interest rate | 0.677% | ||
Borrowing Due May 2020 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 50 | ||
Maturity date | May 31, 2020 | ||
Interest rate | 0.706% | ||
Borrowings due June 2020 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 21.8 | ||
Maturity date | Jun. 30, 2020 | ||
Interest rate | 1.96% | ||
Borrowings Due August 2021 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 28.2 | ||
Maturity date | Aug. 31, 2021 | ||
Interest rate | 2.55% | ||
Borrowings due March 2023 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 26.5 | ||
Maturity date | Mar. 31, 2023 | ||
Interest rate | 2.16% | ||
Borrowings due June 2025 [Member] | Federal Home Loan Bank advances [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Investment borrowings | $ 20.5 | ||
Maturity date | Jun. 30, 2025 | ||
Interest rate | 2.94% |
CHANGES IN COMMON STOCK (Detail
CHANGES IN COMMON STOCK (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 2 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Apr. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Number of common shares outstanding | |||||
Balance, beginning of year (in shares) | 193,467,712 | 203,324,458 | |||
Balance, end of year (in shares) | 193,467,712 | 193,467,712 | |||
Number of stock tendered for payment of federal and state taxes owed (in shares) | 231,000 | ||||
Payments for Repurchase of Common Stock | $ 186.9 | ||||
Stock Repurchased and Retired During Period, Value | 186.9 | $ 136.6 | |||
Stock repurchase program, remaining repurchase authorized amount | $ 234.1 | 234.1 | |||
Common stock dividends declared | $ 25.7 | $ 26.3 | |||
Dividends (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.13 | ||
Common stock [Member] | |||||
Number of common shares outstanding | |||||
Balance, beginning of year (in shares) | 193,468,000 | 203,324,000 | |||
Treasury stock purchased and retired (in shares) | (10,865,000) | ||||
Balance, end of year (in shares) | 193,468,000 | 193,468,000 | |||
Common stock [Member] | Stock options [Member] | |||||
Number of common shares outstanding | |||||
Shares issued under employee benefit compensation plans (in shares) | 505,000 | ||||
Common stock [Member] | Restricted and Performance Stock [Member] | |||||
Number of common shares outstanding | |||||
Shares issued under employee benefit compensation plans (in shares) | 504,000 | ||||
Subsequent Event [Member] | Securities Repurchase Program [Member] | Common stock [Member] | |||||
Number of common shares outstanding | |||||
Stock Repurchased and Retired During Period, Value | $ 8 |
SALES INDUCEMENTS (Details)
SALES INDUCEMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Deferred Sales Inducements [Abstract] | |||
Deferred sales inducements | $ 1.8 | $ 3.1 | |
Deferred sales inducements, amortization expense | 7.6 | $ 9.4 | |
Unamortized deferred sales inducements | 61.6 | $ 67.4 | |
Insurance liabilities for persistency bonus benefits | $ 1.2 | $ 1.5 |
LITIGATION AND OTHER LEGAL PR66
LITIGATION AND OTHER LEGAL PROCEEDINGS (Details) | 6 Months Ended |
Jun. 30, 2015state | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of states participating in examination of compliance with unclaimed property laws | 38 |
CONSOLIDATED STATEMENT OF CAS67
CONSOLIDATED STATEMENT OF CASH FLOWS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Cash flows from operating activities: | |||||
Net income (loss) | $ 46.8 | $ 78.1 | $ 99.6 | $ (149.9) | |
Adjustments to reconcile net income to net cash from operating activities: | |||||
Amortization and depreciation | 152 | 146.2 | |||
Income taxes | 52.7 | 92.7 | |||
Insurance liabilities | 142.8 | 155.2 | |||
Accrual and amortization of investment income | (30.9) | (77.5) | |||
Deferral of policy acquisition costs | (120.5) | (116.9) | |||
Net realized investment (gains) losses | 1.2 | (35.8) | |||
Payment to reinsurer pursuant to long-term care business reinsured | 0 | (590.3) | |||
Net loss on sale of subsidiary, gain on reinsurance transaction and transition expenses | 4.5 | (3.8) | 9 | 274.8 | |
Loss on extinguishment or modification of debt | $ 32.8 | $ 0.6 | 32.8 | 0.6 | |
Other | (8.3) | (14) | |||
Net cash from operating activities | [1] | $ 330.4 | $ (314.9) | ||
[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. |
CONSOLIDATED STATEMENT OF CAS68
CONSOLIDATED STATEMENT OF CASH FLOWS - Schedule of other significant noncash transactions (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Stock options, restricted stock and performance units | $ 9.1 | $ 8.1 |
OUT OF PERIOD ADJUSTMENTS (Deta
OUT OF PERIOD ADJUSTMENTS (Details) - 6 months ended Jun. 30, 2014 - Out of period adjustment [Member] - USD ($) $ / shares in Units, $ in Millions | Total |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Out of period adjustment, increase in other operating costs and expenses | $ 2.4 |
Out of period adjustment, decrease (increase) in tax expense | 0.8 |
Out of period adjustment, effect on net gain (loss) | $ (1.6) |
Out of period adjustment, effect on earnings per diluted share (in dollars per share) | $ (0.01) |
INVESTMENTS IN VARIABLE INTER70
INVESTMENTS IN VARIABLE INTEREST ENTITIES - NARRATIVE (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Variable Interest Entity [Line Items] | |||
Variable interest entity amortized cost securities held | $ 1,578.4 | ||
Variable interest entity, gross unrealized gains fixed maturity securities | 3 | ||
Variable interest entity gross unrealized losses fixed maturity securities | 15.8 | ||
Variable Interest Entity, Fixed Maturity Securities Fair Value | 1,565.6 | ||
Variable interest entities net realized gain (loss) on investments | (0.9) | $ (2) | |
Variable interest entities, investments sold | 40.3 | 21.3 | |
Variable interest entity, gross investment losses from sale | 1.1 | $ 2.1 | |
Investments held in limited partnerships | 61.2 | ||
Unfunded commitments to limited partnerships | 65.2 | ||
Less than twelve months [Member] | |||
Variable Interest Entity [Line Items] | |||
Fair value investments held by variable interest entity that had been in an unrealized loss position | 637.5 | $ 1,053.2 | |
Gross Unrealized Gains (Losses) On Investments Held By Variable Interest Entity | (5.7) | (27.3) | |
Greater than twelve months [Member] | |||
Variable Interest Entity [Line Items] | |||
Fair value investments held by variable interest entity that had been in an unrealized loss position | 314.6 | 167.4 | |
Gross Unrealized Gains (Losses) On Investments Held By Variable Interest Entity | (10.1) | $ (4.2) | |
Continuous Unrealized Position Exceeding 20% of the Amortized Cost Basis for Less Than Six Months [Member] | |||
Variable Interest Entity [Line Items] | |||
Variable interest entity amortized cost securities held | 2.9 | ||
Variable Interest Entity, Fixed Maturity Securities Fair Value | $ 2.3 | ||
Minimum [Member] | |||
Variable Interest Entity [Line Items] | |||
Variable Interest Entity In Continuous Unrealized Loss Percentage, Loss as a Percentage of Cost Basis for Less Than Six Months Prior to Sale | 20.00% |
INVESTMENTS IN VARIABLE INTER71
INVESTMENTS IN VARIABLE INTEREST ENTITIES - BALANCE SHEET ITEMS (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Variable Interest Entity [Line Items] | ||
Investments held by variable interest entities | $ 1,565.6 | $ 1,367.1 |
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 |
Borrowings related to variable interest entities | 1,461.7 | 1,286.1 |
VIEs [Member] | ||
Variable Interest Entity [Line Items] | ||
Investments held by variable interest entities | 1,565.6 | 1,367.1 |
Notes receivable of VIEs held by insurance subsidiaries | 0 | 0 |
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 |
Accrued investment income | 2.7 | 3.2 |
Income tax assets, net | 7.8 | 18.1 |
Other assets | 24.6 | 14.2 |
Total assets | 1,751.3 | 1,470.9 |
Other liabilities | 139.5 | 61.2 |
Borrowings related to variable interest entities | 1,461.7 | 1,286.1 |
Notes payable of VIEs held by insurance subsidiaries | 164.7 | 157.3 |
Total liabilities | 1,765.9 | 1,504.6 |
Eliminations [Member] | ||
Variable Interest Entity [Line Items] | ||
Investments held by variable interest entities | 0 | 0 |
Notes receivable of VIEs held by insurance subsidiaries | (163.6) | (153.3) |
Cash and cash equivalents held by variable interest entities | 0 | 0 |
Accrued investment income | 0 | 0 |
Income tax assets, net | (1.9) | (2.9) |
Other assets | (3.1) | (1.7) |
Total assets | (168.6) | (157.9) |
Other liabilities | (7.5) | (6.1) |
Borrowings related to variable interest entities | 0 | 0 |
Notes payable of VIEs held by insurance subsidiaries | (164.7) | (157.3) |
Total liabilities | (172.2) | (163.4) |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Investments held by variable interest entities | 1,565.6 | 1,367.1 |
Notes receivable of VIEs held by insurance subsidiaries | (163.6) | (153.3) |
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 |
Accrued investment income | 2.7 | 3.2 |
Income tax assets, net | 5.9 | 15.2 |
Other assets | 21.5 | 12.5 |
Total assets | 1,582.7 | 1,313 |
Other liabilities | 132 | 55.1 |
Borrowings related to variable interest entities | 1,461.7 | 1,286.1 |
Notes payable of VIEs held by insurance subsidiaries | 0 | 0 |
Total liabilities | $ 1,593.7 | $ 1,341.2 |
INVESTMENTS IN VARIABLE INTER72
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (Details) $ in Millions | Jun. 30, 2015USD ($) |
Investment Holdings [Line Items] | |
Total amortized cost | $ 1,578.4 |
Total fair value | 1,565.6 |
Amortized cost [Member] | |
Investment Holdings [Line Items] | |
Due in one year or less | 4.8 |
Due after one year through five years | 594.7 |
Due after five years through ten years | 978.9 |
Total amortized cost | 1,578.4 |
Estimated fair value [Member] | |
Investment Holdings [Line Items] | |
Due in one year or less | 4.8 |
Due after one year through five years | 590.3 |
Due after five years through ten years | 970.5 |
Total fair value | $ 1,565.6 |
FAIR VALUE MEASUREMENTS - MEASU
FAIR VALUE MEASUREMENTS - MEASUREMENTS BY INPUT LEVEL (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | $ 20,224.8 | $ 20,634.9 |
Trading securities | 257.5 | 244.9 |
Investments held by variable interest entities - corporate securities | 1,565.6 | 1,367.1 |
Assets held in separate accounts | 5.4 | 5.6 |
Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 3.4 | 3.5 |
Investments held by variable interest entities - corporate securities | 0 | 0 |
Assets held in separate accounts | 0 | 0 |
Total assets carried at fair value by category | 234.6 | 221.8 |
Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 214.2 | 212.8 |
Investments held by variable interest entities - corporate securities | 1,565.6 | 1,367.1 |
Assets held in separate accounts | 5.4 | 5.6 |
Total assets carried at fair value by category | 22,058.6 | 22,039.5 |
Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 39.9 | 28.6 |
Investments held by variable interest entities - corporate securities | 0 | 0 |
Assets held in separate accounts | 0 | 0 |
Total assets carried at fair value by category | 258.2 | 518.8 |
Corporate debt securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Equity securities - corporate securities | 230.2 | 216.9 |
Trading securities | 0 | 0 |
Corporate debt securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 13,383.2 | 13,605.1 |
Equity securities - corporate securities | 173.2 | 174.1 |
Trading securities | 24.9 | 24.3 |
Corporate debt securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 133.7 | 365.9 |
Equity securities - corporate securities | 29.9 | 28 |
Trading securities | 0 | 0 |
US treasury and government [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US treasury and government [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 166.2 | 168.9 |
Trading securities | 3.1 | 3.7 |
US treasury and government [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
US states and political subdivisions debt securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
US states and political subdivisions debt securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 2,201.4 | 2,242.2 |
US states and political subdivisions debt securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 35.5 |
Foreign government debt securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Foreign government debt securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1.9 | 1.9 |
Foreign government debt securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Asset-backed securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Asset-backed securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,352.7 | 1,209.8 |
Trading securities | 21.4 | 24 |
Asset-backed securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 53.3 | 59.2 |
Trading securities | 0 | 0 |
Collateralized debt obligations [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Collateralized debt obligations [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 344.3 | 324.5 |
Collateralized debt obligations [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Commercial mortgage backed securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Commercial mortgage backed securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,381.4 | 1,275.1 |
Trading securities | 137.8 | 131 |
Commercial mortgage backed securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1.2 | 1.2 |
Trading securities | 39.9 | 28.6 |
Mortgage pass through securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Mortgage pass through securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 3.6 | 4.2 |
Trading securities | 0.1 | 0.1 |
Mortgage pass through securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0.2 | 0.4 |
Trading securities | 0 | 0 |
Collateralized mortgage obligations [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Collateralized mortgage obligations [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,201.7 | 1,341 |
Trading securities | 26.9 | 29.7 |
Collateralized mortgage obligations [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Total fixed maturities, available for sale [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Total fixed maturities, available for sale [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 20,036.4 | 20,172.7 |
Total fixed maturities, available for sale [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 188.4 | 462.2 |
Equity securities [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 3.4 | 3.5 |
Equity securities [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 0 | 0 |
Equity securities [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 0 | 0 |
Derivatives [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 1 | 1.4 |
Derivatives [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 63.8 | 107.2 |
Derivatives [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 0 | 0 |
Embedded derivatives associated with fixed index annuity products [Member] | Level 1 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Future policy benefits - embedded derivatives associated with fixed index annuity products | 0 | 0 |
Embedded derivatives associated with fixed index annuity products [Member] | Level 2 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Future policy benefits - embedded derivatives associated with fixed index annuity products | 0 | 0 |
Embedded derivatives associated with fixed index annuity products [Member] | Level 3 [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Future policy benefits - embedded derivatives associated with fixed index annuity products | 1,074 | 1,081.5 |
Estimate of fair value measurement [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 257.5 | 244.9 |
Investments held by variable interest entities - corporate securities | 1,565.6 | 1,367.1 |
Assets held in separate accounts | 5.4 | 5.6 |
Total assets carried at fair value by category | 22,551.4 | 22,780.1 |
Estimate of fair value measurement [Member] | Corporate debt securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 13,516.9 | 13,971 |
Equity securities - corporate securities | 433.3 | 419 |
Trading securities | 24.9 | 24.3 |
Estimate of fair value measurement [Member] | US treasury and government [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 166.2 | 168.9 |
Trading securities | 3.1 | 3.7 |
Estimate of fair value measurement [Member] | US states and political subdivisions debt securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 2,201.4 | 2,277.7 |
Estimate of fair value measurement [Member] | Foreign government debt securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1.9 | 1.9 |
Estimate of fair value measurement [Member] | Asset-backed securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,406 | 1,269 |
Trading securities | 21.4 | 24 |
Estimate of fair value measurement [Member] | Collateralized debt obligations [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 344.3 | 324.5 |
Estimate of fair value measurement [Member] | Commercial mortgage backed securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,382.6 | 1,276.3 |
Trading securities | 177.7 | 159.6 |
Estimate of fair value measurement [Member] | Mortgage pass through securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 3.8 | 4.6 |
Trading securities | 0.1 | 0.1 |
Estimate of fair value measurement [Member] | Collateralized mortgage obligations [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,201.7 | 1,341 |
Trading securities | 26.9 | 29.7 |
Estimate of fair value measurement [Member] | Total fixed maturities, available for sale [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 20,224.8 | 20,634.9 |
Estimate of fair value measurement [Member] | Equity securities [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 3.4 | 3.5 |
Estimate of fair value measurement [Member] | Derivatives [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 64.8 | 108.6 |
Estimate of fair value measurement [Member] | Embedded derivatives associated with fixed index annuity products [Member] | Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Future policy benefits - embedded derivatives associated with fixed index annuity products | $ 1,074 | $ 1,081.5 |
FAIR VALUE MEASUREMENTS - RECUR
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents - unrestricted | $ 453.9 | $ 611.6 | $ 378.8 | $ 699 |
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 | ||
Fair value, measurements, recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Mortgage loans | 1,665.5 | 1,691.9 | ||
Policy loans | 108.1 | 106.9 | ||
Company-owned life insurance | 161.3 | 157.6 | ||
Alternative investment funds | 101.6 | 102.8 | ||
Cash and cash equivalents - unrestricted | 453.9 | 611.6 | ||
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 | ||
Policyholder account balances | 10,689.3 | 10,707.2 | ||
Investment borrowings | 1,518.9 | 1,519.2 | ||
Borrowings related to variable interest entities | 1,461.7 | 1,286.1 | ||
Notes payable – direct corporate obligations | 925 | 794.4 | ||
Fair value, measurements, recurring [Member] | Level 1 [Member] | ||||
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 | 373.9 | 549.6 | ||
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 | ||
Policyholder account balances | 0 | 0 | ||
Investment borrowings | 0 | 0 | ||
Borrowings related to variable interest entities | 0 | 0 | ||
Notes payable – direct corporate obligations | 0 | 0 | ||
Fair value, measurements, recurring [Member] | Level 2 [Member] | ||||
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 | 161.3 | 157.6 | ||
Alternative investment funds | 101.6 | 102.8 | ||
Cash and cash equivalents - unrestricted | 80 | 62 | ||
Cash and cash equivalents held by variable interest entities | 0 | 0 | ||
Policyholder account balances | 0 | 0 | ||
Investment borrowings | 1,520.1 | 1,520.4 | ||
Borrowings related to variable interest entities | 1,459.6 | 1,229.2 | ||
Notes payable – direct corporate obligations | 937.4 | 807.4 | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Mortgage loans | 1,725.4 | 1,768.9 | ||
Policy loans | 108.1 | 106.9 | ||
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 | ||
Policyholder account balances | 10,689.3 | 10,707.2 | ||
Investment borrowings | 0 | 0 | ||
Borrowings related to variable interest entities | 0 | 0 | ||
Notes payable – direct corporate obligations | 0 | 0 | ||
Estimate of fair value measurement [Member] | Fair value, measurements, recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Mortgage loans | 1,725.4 | 1,768.9 | ||
Policy loans | 108.1 | 106.9 | ||
Company-owned life insurance | 161.3 | 157.6 | ||
Alternative investment funds | 101.6 | 102.8 | ||
Cash and cash equivalents - unrestricted | 453.9 | 611.6 | ||
Cash and cash equivalents held by variable interest entities | 150.6 | 68.3 | ||
Policyholder account balances | 10,689.3 | 10,707.2 | ||
Investment borrowings | 1,520.1 | 1,520.4 | ||
Borrowings related to variable interest entities | 1,459.6 | 1,229.2 | ||
Notes payable – direct corporate obligations | $ 937.4 | $ 807.4 |
FAIR VALUE MEASUREMENTS - BALAN
FAIR VALUE MEASUREMENTS - BALANCE SHEET RECURRING (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Liabilities: | ||||
Purchases, sales, issuances and settlements, net | $ (35.3) | $ (48) | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Liabilities: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | (934.2) | (905.5) | ||
Purchases, sales, issuances and settlements, net | (35.3) | (48) | ||
Total realized and unrealized gains (losses) included in net income | (10.8) | (26.8) | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | 0 | ||
Amounts classified as Assets of subsidiary being sold, liabilities | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | (980.3) | (980.3) | ||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | (10.8) | (26.8) | ||
Assets [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0 | |||
Purchases, sales, issuances and settlements, net | 0 | |||
Total realized and unrealized gains (losses) included in net income | 0 | |||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | |||
Transfers into level 3 | 0 | |||
Transfers out of level 3 | 0 | |||
Amounts classified as Assets of subsidiary being sold, assets | 63.1 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 63.1 | 63.1 | ||
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | |||
Available-for-sale securities [Member] | Corporate debt securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | $ (6.2) | 47.7 | $ (26.3) | 41.2 |
Available-for-sale securities [Member] | Corporate debt securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 136 | 336.8 | 365.9 | 359.6 |
Purchases, sales, issuances and settlements, net | (6.2) | 47.7 | (26.3) | 41.2 |
Total realized and unrealized gains (losses) included in net income | (0.9) | 0 | (2.2) | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (6) | 4 | (6.1) | 13.4 |
Transfers into level 3 | 10.8 | 16.3 | 9.1 | 26.8 |
Transfers out of level 3 | 0 | (15) | (206.7) | 0 |
Amounts classified as Assets of subsidiary being sold, assets | (51.2) | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 133.7 | 389.8 | 133.7 | 389.8 |
Liabilities: | ||||
Amount of total gains (losses) 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 [Member] | US states and political subdivisions debt securities [Member] | ||||
Assets: | ||||
Amounts classified as Assets of subsidiary being sold, assets | (2.2) | |||
Available-for-sale securities [Member] | US states and political subdivisions debt securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0 | 35.5 | 0 | |
Purchases, sales, issuances and settlements, net | 0 | 0 | 0 | |
Total realized and unrealized gains (losses) included in net income | 0 | 0 | 0 | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.7 | 0 | 2 | |
Transfers into level 3 | 28 | 0 | 28.9 | |
Transfers out of level 3 | 0 | (35.5) | 0 | |
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 28.7 | 0 | 28.7 |
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | 0 | |
Available-for-sale securities [Member] | Asset-backed Securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (1.1) | (0.5) | (1.9) | 9 |
Available-for-sale securities [Member] | Asset-backed Securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 65.8 | 42.2 | 59.2 | 42.2 |
Purchases, sales, issuances and settlements, net | (1.1) | (0.5) | (1.9) | 9 |
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) | (1.8) | 1.1 | (0.6) | 3.3 |
Transfers into level 3 | 0 | 9.9 | 10 | 7.9 |
Transfers out of level 3 | (9.6) | 0 | (13.4) | 0 |
Amounts classified as Assets of subsidiary being sold, assets | (9.7) | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 53.3 | 52.7 | 53.3 | 52.7 |
Liabilities: | ||||
Amount of total gains (losses) 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 [Member] | Collateralized debt obligations [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (0.1) | (4.4) | ||
Available-for-sale securities [Member] | Collateralized debt obligations [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 14.1 | 246.7 | ||
Purchases, sales, issuances and settlements, net | (0.1) | (4.4) | ||
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) | 0.2 | 0 | ||
Transfers into level 3 | 0 | 12.6 | ||
Transfers out of level 3 | 0 | (240.7) | ||
Amounts classified as Assets of subsidiary being sold, assets | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 14.2 | 14.2 | ||
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Available-for-sale securities [Member] | Commercial mortgage backed securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 2.1 | 1.2 | ||
Purchases, sales, issuances and settlements, net | 0 | 0 | ||
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | (0.9) | 0 | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 1.2 | 1.2 | ||
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Available-for-sale securities [Member] | Mortgage pass through securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 0.9 | (0.2) | (0.3) | |
Available-for-sale securities [Member] | Mortgage pass through securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0.2 | 0.4 | 0.4 | 1.6 |
Purchases, sales, issuances and settlements, net | 0 | 0.9 | (0.2) | (0.3) |
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 | 0 | 0 | 0 |
Transfers out of level 3 | 0 | 0 | 0 | 0 |
Amounts classified as Assets of subsidiary being sold, assets | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0.2 | 1.3 | 0.2 | 1.3 |
Liabilities: | ||||
Amount of total gains (losses) 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 [Member] | Collateralized mortgage obligations [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0 | 0 | ||
Purchases, sales, issuances and settlements, net | 0 | 0 | ||
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) | (0.1) | 0 | ||
Transfers into level 3 | 0.2 | 0.1 | ||
Transfers out of level 3 | 0 | 0 | ||
Amounts classified as Assets of subsidiary being sold, assets | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0.1 | 0.1 | ||
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | ||
Available-for-sale securities [Member] | Total fixed maturities, available for sale [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (7.3) | 48 | (28.4) | 45.5 |
Available-for-sale securities [Member] | Total fixed maturities, available for sale [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 204.1 | 393.5 | 462.2 | 650.1 |
Purchases, sales, issuances and settlements, net | (7.3) | 48 | (28.4) | 45.5 |
Total realized and unrealized gains (losses) included in net income | (0.9) | 0 | (2.2) | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (7.8) | 5.9 | (6.7) | 18.7 |
Transfers into level 3 | 10.8 | 54.4 | 19.1 | 76.3 |
Transfers out of level 3 | (10.5) | (15) | (255.6) | (240.7) |
Amounts classified as Assets of subsidiary being sold, assets | (63.1) | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 188.4 | 486.8 | 188.4 | 486.8 |
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | 0 | 0 |
Equity securities classification [Member] | Corporate debt securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 0.9 | 0.8 | 1.9 | 1.7 |
Equity securities classification [Member] | Corporate debt securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 29 | 25.4 | 28 | 24.5 |
Purchases, sales, issuances and settlements, net | 0.9 | 0.8 | 1.9 | 1.7 |
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 | 0 | 0 | 0 |
Transfers out of level 3 | 0 | 0 | 0 | 0 |
Amounts classified as Assets of subsidiary being sold, assets | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 29.9 | 26.2 | 29.9 | 26.2 |
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0 | 0 | 0 |
Trading Securities [Member] | Commercial mortgage backed securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 9.4 | 9.5 | ||
Collateralized mortgage obligations [Member] | Trading Securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 5.9 | 0 | ||
Purchases, sales, issuances and settlements, net | 0 | 0 | ||
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 | 5.8 | ||
Transfers out of level 3 | 0 | 0 | ||
Amounts classified as Assets of subsidiary being sold, assets | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 5.9 | 5.9 | ||
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0 | 0.1 | ||
Commercial mortgage backed securities [Member] | Trading Securities [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | 0 | 28.6 | ||
Purchases, sales, issuances and settlements, net | 9.4 | 9.5 | ||
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) | 1.9 | 1.8 | ||
Transfers into level 3 | 28.6 | 0 | ||
Transfers out of level 3 | 0 | 0 | ||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 39.9 | 39.9 | ||
Liabilities: | ||||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 1.9 | 1.8 | ||
Interest sensitive products [Member] | ||||
Liabilities: | ||||
Purchases, sales, issuances and settlements, net | (7.2) | (38.7) | (10) | (49.8) |
Interest sensitive products [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Liabilities: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | (1,102.1) | (930.8) | (1,081.5) | (903.7) |
Purchases, sales, issuances and settlements, net | (7.2) | (38.7) | (10) | (49.8) |
Total realized and unrealized gains (losses) included in net income | 35.3 | (10.8) | 17.5 | (26.8) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Transfers into level 3 | 0 | 0 | 0 | 0 |
Transfers out of level 3 | 0 | 0 | 0 | 0 |
Amounts classified as Assets of subsidiary being sold, liabilities | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | (1,074) | (980.3) | (1,074) | (980.3) |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | $ 35.3 | (10.8) | $ 17.5 | (26.8) |
Interest Sensitive Products Modified Coinsurance Agreement [Member] | ||||
Liabilities: | ||||
Purchases, sales, issuances and settlements, net | 3.4 | 1.8 | ||
Interest Sensitive Products Modified Coinsurance Agreement [Member] | Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Liabilities: | ||||
Fair value, measurement with unobservable inputs reconciliation, beginning balance | (3.4) | (1.8) | ||
Purchases, sales, issuances and settlements, net | 3.4 | 1.8 | ||
Total realized and unrealized gains (losses) included in net income | 0 | 0 | ||
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 | ||
Transfers into level 3 | 0 | 0 | ||
Transfers out of level 3 | 0 | 0 | ||
Amounts classified as Assets of subsidiary being sold, liabilities | 0 | |||
Fair value, measurement with unobservable inputs reconciliation, ending balance | 0 | 0 | ||
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE ACTIVITY (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Liabilities: | ||||
Purchases | $ (31.1) | $ (57.7) | ||
Sales | 3.9 | 7 | ||
Issuances | (22.5) | (26.2) | ||
Settlements | 14.4 | 28.9 | ||
Purchases, sales, issuances and settlements, net | (35.3) | (48) | ||
Commercial mortgage backed securities [Member] | Trading Securities [Member] | ||||
Assets: | ||||
Purchases | $ 9.4 | $ 9.5 | ||
Sales | 0 | 0 | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Purchases, sales, issuances and settlements, net | 9.4 | 9.5 | ||
Corporate debt securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases | 0 | 51 | 0.1 | 51 |
Sales | (6.2) | (3.3) | (26.4) | (9.8) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Purchases, sales, issuances and settlements, net | (6.2) | 47.7 | (26.3) | 41.2 |
Corporate debt securities [Member] | Equity securities classification [Member] | ||||
Assets: | ||||
Purchases | 0.9 | 0.8 | 1.9 | 1.7 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Purchases, sales, issuances and settlements, net | 0.9 | 0.8 | 1.9 | 1.7 |
Asset-backed securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases | 0 | 0 | 9.9 | 9.9 |
Sales | (1.1) | (0.5) | (11.8) | (0.9) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Purchases, sales, issuances and settlements, net | (1.1) | (0.5) | (1.9) | 9 |
Collateralized debt obligations [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases | 0 | 0.9 | ||
Sales | (0.1) | (5.3) | ||
Issuances | 0 | 0 | ||
Settlements | 0 | 0 | ||
Purchases, sales, issuances and settlements, net | (0.1) | (4.4) | ||
Mortgage pass through securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases | 1.1 | 0 | 1.1 | |
Sales | (0.2) | (0.2) | (1.4) | |
Issuances | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | |
Purchases, sales, issuances and settlements, net | 0.9 | (0.2) | (0.3) | |
Total fixed maturities, available for sale [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases | 0 | 52.1 | 10 | 62.9 |
Sales | (7.3) | (4.1) | (38.4) | (17.4) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Purchases, sales, issuances and settlements, net | (7.3) | 48 | (28.4) | 45.5 |
Interest sensitive products [Member] | ||||
Liabilities: | ||||
Purchases | (33) | (31.1) | (63.4) | (57.7) |
Sales | 11 | 0.5 | 22.4 | 3.6 |
Issuances | (0.7) | (22.5) | (2.3) | (24.6) |
Settlements | 15.5 | 14.4 | 33.3 | 28.9 |
Purchases, sales, issuances and settlements, net | (7.2) | (38.7) | (10) | (49.8) |
Interest Sensitive Products Modified Coinsurance Agreement [Member] | ||||
Liabilities: | ||||
Purchases | 0 | 0 | ||
Sales | 3.4 | 3.4 | ||
Issuances | 0 | (1.6) | ||
Settlements | 0 | 0 | ||
Purchases, sales, issuances and settlements, net | 3.4 | 1.8 | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Liabilities: | ||||
Purchases, sales, issuances and settlements, net | (35.3) | (48) | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | Commercial mortgage backed securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 0 | 0 | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | Corporate debt securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (6.2) | 47.7 | (26.3) | 41.2 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Corporate debt securities [Member] | Equity securities classification [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 0.9 | 0.8 | 1.9 | 1.7 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Asset-backed securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (1.1) | (0.5) | (1.9) | 9 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Collateralized debt obligations [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (0.1) | (4.4) | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | Mortgage pass through securities [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 0 | 0.9 | (0.2) | (0.3) |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Total fixed maturities, available for sale [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | (7.3) | 48 | (28.4) | 45.5 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Collateralized mortgage obligations [Member] | Available-for-sale securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | 0 | 0 | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | Interest sensitive products [Member] | ||||
Liabilities: | ||||
Purchases, sales, issuances and settlements, net | $ (7.2) | (38.7) | $ (10) | (49.8) |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Interest Sensitive Products Modified Coinsurance Agreement [Member] | ||||
Liabilities: | ||||
Purchases, sales, issuances and settlements, net | 3.4 | 1.8 | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | Collateralized mortgage obligations [Member] | Trading Securities [Member] | ||||
Assets: | ||||
Purchases, sales, issuances and settlements, net | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - FAI77
FAIR VALUE MEASUREMENTS - FAIR VALUE INPUTS (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 24,690.2 | $ 24,908.3 |
Other invested assets | 435.4 | 443.6 |
Policyholder account balances | $ 10,689.3 | $ 10,707.2 |
Level 3 [Member] | Interest sensitive products [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Weighted average projected portfolio yields | 5.42% | 5.42% |
Weighted average discount rates | 1.96% | 1.78% |
Weighted average surrender rates | 14.16% | 14.16% |
Level 3 [Member] | Corporate debt securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Weighted average discount rate | 4.09% | 2.58% |
Level 3 [Member] | Asset-backed securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Weighted average discount rate | 2.96% | 2.95% |
Minimum [Member] | Level 3 [Member] | Interest sensitive products [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Projected Portfolio Yields | 5.15% | 5.15% |
Discount rates | 0.00% | 0.00% |
Surrender rates | 1.98% | 1.98% |
Minimum [Member] | Level 3 [Member] | Corporate debt securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 1.50% | 1.48% |
Minimum [Member] | Level 3 [Member] | Asset-backed securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 1.92% | 1.99% |
Maximum [Member] | Level 3 [Member] | Interest sensitive products [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Projected Portfolio Yields | 5.61% | 5.61% |
Discount rates | 3.38% | 2.74% |
Surrender rates | 47.88% | 47.88% |
Maximum [Member] | Level 3 [Member] | Corporate debt securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 6.05% | 5.83% |
Maximum [Member] | Level 3 [Member] | Asset-backed securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 4.15% | 4.15% |
Estimate of fair value measurement [Member] | Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 258.2 | $ 518.8 |
Other invested assets | 146.6 | 148.1 |
Estimate of fair value measurement [Member] | Level 3 [Member] | Interest sensitive products [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Policyholder account balances | 1,074 | 1,081.5 |
Estimate of fair value measurement [Member] | Level 3 [Member] | Corporate debt securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 52.3 | 312.1 |
Estimate of fair value measurement [Member] | Level 3 [Member] | Asset-backed securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 29.4 | 30.6 |
Estimate of fair value measurement [Member] | Level 3 [Member] | Equity securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 29.9 | $ 28 |
FAIR VALUE MEASUREMENTS - NARRA
FAIR VALUE MEASUREMENTS - NARRATIVE (Details) - Jun. 30, 2015 | Total |
Fair Value Disclosures [Abstract] | |
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage | 49.00% |
Available for sale fixed maturities classified as level 3, investment grade, percent | 57.00% |
Available for Sale Maturities with Significant Unobservable Inputs, Corporate Securities, Percent | 71.00% |