DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 09, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CNO Financial Group, Inc. | ||
Entity Central Index Key | 1,224,608 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Amendment Flag | false | ||
Entity Public Float | $ 3.1 | ||
Entity Common Stock, Shares Outstanding | 173,795,204 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Fixed maturities, available for sale, at fair value | $ 21,096.2 | $ 19,882.9 |
Equity securities at fair value | 584.2 | 463 |
Mortgage loans | 1,768 | 1,721 |
Policy loans | 112 | 109.4 |
Trading securities | 363.4 | 262.1 |
Investments held by variable interest entities | 1,724.3 | 1,633.6 |
Other invested assets | 589.5 | 415.1 |
Total investments | 26,237.6 | 24,487.1 |
Cash and cash equivalents - unrestricted | 478.9 | 432.3 |
Cash and cash equivalents held by variable interest entities | 189.3 | 364.4 |
Accrued investment income | 239.6 | 237 |
Present value of future profits | 401.8 | 449 |
Deferred acquisition costs | 1,044.7 | 1,083.3 |
Reinsurance receivables | 2,260.4 | 2,859.3 |
Income tax assets, net | 789.7 | 898.8 |
Assets held in separate accounts | 4.7 | 4.7 |
Other assets | 328.5 | 309.2 |
Total assets | 31,975.2 | 31,125.1 |
Liabilities for insurance products: | ||
Policyholder account balances | 10,912.7 | 10,762.3 |
Future policy benefits | 10,953.3 | 10,602.1 |
Liability for policy and contract claims | 500.6 | 487.8 |
Unearned and advanced premiums | 282.5 | 286.3 |
Liabilities related to separate accounts | 4.7 | 4.7 |
Other liabilities | 611.4 | 707.8 |
Investment borrowings | 1,647.4 | 1,548.1 |
Borrowings related to variable interest entities | 1,662.8 | 1,676.4 |
Notes payable – direct corporate obligations | 912.9 | 911.1 |
Total liabilities | 27,488.3 | 26,986.6 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2016 - 173,753,614; 2015 - 184,028,511) | 1.7 | 1.8 |
Additional paid-in capital | 3,212.1 | 3,386.8 |
Accumulated other comprehensive income | 622.4 | 402.8 |
Retained earnings | 650.7 | 347.1 |
Total shareholders' equity | 4,486.9 | 4,138.5 |
Total liabilities and shareholders' equity | $ 31,975.2 | $ 31,125.1 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Fixed maturities, available for sale, amortized cost | $ 19,803.1 | $ 18,947 |
Equity securities cost | $ 580.7 | $ 447.4 |
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) | 173,753,614 | 184,028,511 |
Common stock, shares outstanding (in shares) | 173,753,614 | 184,028,511 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Insurance policy income | $ 2,601.1 | $ 2,556 | $ 2,629.7 |
Net investment income: | |||
General account assets | 1,204.1 | 1,203.6 | 1,301 |
Policyholder and reinsurer accounts and other special-purpose portfolios | 121.1 | 30 | 126.4 |
Realized investment gains (losses): | |||
Net realized investment gains (losses), excluding impairment losses | 47.9 | (8) | 64 |
Other-than-temporary impairments: | |||
Total other-than-temporary impairment losses | (35.9) | (42.9) | (27.3) |
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | 3.6 | 3 | 0 |
Net impairment losses recognized | (32.3) | (39.9) | (27.3) |
Gain (loss) on dissolution of variable interest entities | (7.3) | 11.3 | 0 |
Total realized gains (losses) | 8.3 | (36.6) | 36.7 |
Fee revenue and other income | 50.5 | 58.9 | 50.9 |
Total revenues | 3,985.1 | 3,811.9 | 4,144.7 |
Benefits and expenses: | |||
Insurance policy benefits | 2,390.5 | 2,308.3 | 2,586.2 |
Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses | 75.4 | 9 | 239.8 |
Interest expense | 116.4 | 94.9 | 92.8 |
Amortization | 253.3 | 260 | 247.4 |
Loss on extinguishment or modification of debt | 0 | 32.8 | 0.6 |
Other operating costs and expenses | 796.3 | 739.2 | 802.8 |
Total benefits and expenses | 3,631.9 | 3,444.2 | 3,969.6 |
Income before income taxes | 353.2 | 367.7 | 175.1 |
Income tax expense (benefit): | |||
Tax expense on period income | 127.8 | 129.5 | 159.2 |
Valuation allowance for deferred tax assets and other tax items | (132.8) | (32.5) | (35.5) |
Net income | $ 358.2 | $ 270.7 | $ 51.4 |
Basic: | |||
Weighted average shares outstanding (in shares) | 176,638 | 193,054 | 212,917 |
Net income (in dollars per share) | $ 2.03 | $ 1.40 | $ 0.24 |
Diluted: | |||
Weighted average shares outstanding (in shares) | 178,323 | 195,166 | 217,655 |
Net income (in dollars per share) | $ 2.01 | $ 1.39 | $ 0.24 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 358.2 | $ 270.7 | $ 51.4 |
Other comprehensive income, before tax: | |||
Unrealized gains (losses) for the period | 424.4 | (1,337.6) | 942.9 |
Amortization of present value of future profits and deferred acquisition costs | (27.9) | 157.9 | (113.5) |
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized | (46.9) | 495.3 | (624.6) |
Reclassification adjustments: | |||
For net realized investment (gains) losses included in net income | (18.6) | 29.6 | (59) |
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income | 0.7 | (0.5) | 1 |
Unrealized gains (losses) on investments | 331.7 | (655.3) | 146.8 |
Change related to deferred compensation plan | 8.6 | (0.1) | (1.4) |
Other comprehensive income (loss) before tax | 340.3 | (655.4) | 145.4 |
Income tax (expense) benefit related to items of accumulated other comprehensive income | (120.7) | 232.9 | (51.9) |
Other comprehensive income (loss), net of tax | 219.6 | (422.5) | 93.5 |
Comprehensive income (loss) | $ 577.8 | $ (151.8) | $ 144.9 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - 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 | 51.4 | 51.4 | ||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | 94.2 | 94.2 | ||
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | (0.7) | (0.7) | ||
Cost of common stock and warrants repurchased | (376.5) | (376.5) | ||
Dividends on common stock | (51.3) | (51.3) | ||
Stock options, restricted stock and performance units | 15.9 | 15.9 | ||
Balance, end 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 | 270.7 | 270.7 | ||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | (420.4) | (420.4) | ||
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | (2.1) | (2.1) | ||
Cost of common stock and warrants repurchased | (365.2) | (365.2) | ||
Dividends on common stock | (52.1) | (52.1) | ||
Stock options, restricted stock and performance units | 19.4 | 19.4 | ||
Balance, end of period at Dec. 31, 2015 | 4,138.5 | 3,388.6 | 402.8 | 347.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 358.2 | 358.2 | ||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) | 221.1 | 221.1 | ||
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | (1.5) | (1.5) | ||
Cost of common stock and warrants repurchased | (203) | (203) | ||
Dividends on common stock | (54.6) | (54.6) | ||
Stock options, restricted stock and performance units | 28.2 | 28.2 | ||
Balance, end of period at Dec. 31, 2016 | $ 4,486.9 | $ 3,213.8 | $ 622.4 | $ 650.7 |
CONSOLIDATED STATEMENT OF SHAR7
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | |||
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit) | $ 121.5 | $ (231.7) | $ 52.3 |
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit) | $ (0.8) | $ (1.2) | $ (0.4) |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Cash flows from operating activities: | ||||
Insurance policy income | $ 2,457 | $ 2,423.4 | $ 2,407.9 | |
Net investment income | 1,201 | 1,205.9 | 1,279 | |
Fee revenue and other income | 50.5 | 58.9 | 50.9 | |
Cash and cash equivalents received upon recapture of reinsurance | 73.6 | 0 | 0 | |
Insurance policy benefits | (1,916) | (1,879.4) | (1,968.4) | |
Payment to reinsurer pursuant to long-term care business reinsured | 0 | 0 | (590.3) | |
Interest expense | (106) | (90) | (81.7) | |
Deferrable policy acquisition costs | (242.7) | (246.4) | (242.8) | |
Other operating costs | (751.2) | (724.4) | (728.8) | |
Income taxes | (6.7) | (4.1) | (4) | |
Net cash from operating activities | 759.5 | 743.9 | 121.8 | [1] |
Cash flows from investing activities: | ||||
Sales of investments | 2,841.8 | 2,177.6 | 2,090 | |
Maturities and redemptions of investments | 2,507.2 | 1,853.4 | 1,618.2 | |
Purchases of investments | (6,159.8) | (4,767.2) | (3,731.6) | |
Net sales (purchases) of trading securities | (84.2) | (12.3) | 4.9 | |
Change in cash and cash equivalents held by variable interest entities | 175.1 | (296.1) | 36 | |
Cash and cash equivalents held by subsidiary prior to being sold | 0 | 0 | (164.7) | |
Proceeds from sale of subsidiary | 0 | 0 | 231 | |
Other | (22.5) | (25) | (27.5) | |
Net cash provided (used) by investing activities | (742.4) | (1,069.6) | 56.3 | |
Cash flows from financing activities: | ||||
Issuance of notes payable, net | 0 | 910 | 0 | |
Payments on notes payable | 0 | (797.1) | (62.9) | |
Expenses related to extinguishment or modification of debt | 0 | (17.8) | (0.6) | |
Issuance of common stock | 8.4 | 6.3 | 5 | |
Payments to repurchase common stock and warrants | (206.7) | (361.5) | (376.5) | |
Common stock dividends paid | (54.8) | (52) | (51) | |
Amounts received for deposit products | 1,386.7 | 1,241.9 | 1,295.4 | |
Withdrawals from deposit products | (1,181.6) | (1,225) | (1,347.3) | |
Issuance of investment borrowings: | ||||
Federal Home Loan Bank | 432.7 | 475 | 350 | |
Related to variable interest entities | 493.2 | 544.7 | 358.5 | |
Payments on investment borrowings: | ||||
Federal Home Loan Bank | (333.5) | (425.7) | (367.7) | |
Related to variable interest entities and other | (514.9) | (132) | (88.8) | |
Investment borrowings - repurchase agreements, net | 0 | (20.4) | 20.4 | |
Net cash provided (used) by financing activities | 29.5 | 146.4 | (265.5) | |
Net increase (decrease) in cash and cash equivalents | 46.6 | (179.3) | (87.4) | |
Cash and cash equivalents, beginning of year | 432.3 | 611.6 | 699 | |
Cash and cash equivalents, end of year | $ 478.9 | $ 432.3 | $ 611.6 | |
[1] | Cash flows from operating activities reflect outflows in 2014 due to the payment to reinsurer to transfer certain long-term care business. |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | BUSINESS AND BASIS OF PRESENTATION CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products. The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries. Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries. We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets. We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing. The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; long-term care in run off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. In the fourth quarter of 2016, we began reporting as an additional business segment, the long-term care block recaptured from Beechwood Re Ltd. ("BRe"), as further described in the note to the consolidated financial statements entitled "Summary of Significant Accounting Policies - Reinsurance". The Company’s insurance segments are described below: • Bankers Life, which markets and distributes Medicare supplement insurance, interest-sensitive life insurance, traditional life insurance, fixed annuities and long-term care insurance products to the middle-income senior market through a dedicated field force of career agents, financial and investment advisors, and sales managers supported by a network of community-based sales offices. The Bankers Life segment includes primarily the business of Bankers Life and Casualty Company ("Bankers Life"). Bankers Life also has various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute Medicare Advantage and prescription drug plan products in exchange for a fee. • Washington National, which markets and distributes supplemental health (including specified disease, accident and hospital indemnity insurance products) and life insurance to middle-income consumers at home and at the worksite. These products are marketed through Performance Matters Associates, Inc. and through independent marketing organizations and insurance agencies including worksite marketing. The products being marketed are underwritten by Washington National Insurance Company ("Washington National"). This segment's business also includes certain closed blocks of annuities and Medicare supplement policies which are no longer being actively marketed by this segment and were primarily issued or acquired by Washington National. • Colonial Penn , which markets primarily graded benefit and simplified issue life insurance directly to customers in the senior middle-income market through television advertising, direct mail, the internet and telemarketing. The Colonial Penn segment includes primarily the business of Colonial Penn Life Insurance Company ("Colonial Penn"). • Long-term care in run-off consists of the long-term care business that was recaptured due to the termination of certain reinsurance agreements effective September 30, 2016. This business is not actively marketed and was issued or acquired by Washington National and Bankers Conseco Life Insurance Company ("BCLIC"). We prepare our financial statements 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 2016 presentation. These reclassifications have no effect on net income or shareholders' equity. The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates. When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals. If our future experience differs from these estimates and assumptions, our financial statements would be materially affected. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investments Fixed maturity securities include available for sale bonds and redeemable preferred stocks. We carry these investments at estimated fair value. We record any unrealized gain or loss, net of tax and related adjustments, as a component of shareholders’ equity. Equity securities include available for sale investments in common stock, exchange-traded funds and non-redeemable preferred stock. We carry these investments at estimated fair value. We record any unrealized gain or loss, net of tax and related adjustments, as a component of shareholders' equity. Mortgage loans held in our investment portfolio are carried at amortized unpaid balances, net of provisions for estimated losses. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Payment terms specified for mortgage loans may include a prepayment penalty for unscheduled payoff of the investment. Prepayment penalties are recognized as investment income when received. Policy loans are stated at current unpaid principal balances. Policy loans are collateralized by the cash surrender value of the life insurance policy. Interest income is recorded as earned using the contractual interest rate. Trading securities include: (i) investments purchased with the intent of selling in the near team 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. Other invested assets include: (i) call options purchased in an effort to offset or hedge the effects of certain policyholder benefits related to our fixed index annuity and life insurance products; (ii) Company-owned life insurance ("COLI"); and (iii) certain non-traditional investments. We carry the call options at estimated fair value as further described in the section of this note entitled "Accounting for Derivatives". We carry COLI at its cash surrender value which approximates its net realizable value. Non-traditional investments include investments in certain limited partnerships and hedge funds which are accounted for using the equity method; and promissory notes, which are accounted for using the cost method. In accounting for limited partnerships and hedge funds, we consistently use the most recently available financial information provided by the general partner or manager of each of these investments, which is one to three months prior to the end of our reporting period. Interest income on fixed maturity securities is recognized when earned using a constant effective yield method giving effect to amortization of premiums and accretion of discounts. Prepayment fees are recognized when earned. Dividends on equity securities are recognized when declared. When we sell a security (other than trading securities), we report the difference between the sale proceeds and amortized cost (determined based on specific identification) as a realized investment gain or loss. We regularly evaluate our investments for possible impairment as further described in the note to the consolidated financial statements entitled "Investments". When a security defaults (including mortgage loans) or securities are other-than-temporarily impaired, our policy is to discontinue the accrual of interest and eliminate all previous interest accruals, if we determine that such amounts will not be ultimately realized in full. Cash and Cash Equivalents Cash and cash equivalents include commercial paper, invested cash and other investments purchased with original maturities of less than three months. We carry them at amortized cost, which approximates estimated fair value. Deferred Acquisition Costs Deferred acquisition costs represent incremental direct costs related to the successful acquisition of new or renewal insurance contracts. For interest-sensitive life or annuity products, we amortize these costs in relation to the estimated gross profits using the interest rate credited to the underlying policies. For other products, we amortize these costs in relation to future anticipated premium revenue using the projected investment earnings rate. When we realize a gain or loss on investments backing our interest-sensitive life or annuity products, we adjust the amortization to reflect the change in estimated gross profits from the products due to the gain or loss realized and the effect on future investment yields. We also adjust deferred acquisition costs for the change in amortization that would have been recorded if our fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. We limit the total adjustment related to the impact of unrealized losses to the total of costs capitalized plus interest related to insurance policies issued in a particular year. We include the impact of this adjustment in accumulated other comprehensive income (loss) within shareholders' equity. We regularly evaluate the recoverability of the unamortized balance of the deferred acquisition costs. We consider estimated future gross profits or future premiums, expected mortality or morbidity, interest earned and credited rates, persistency and expenses in determining whether the balance is recoverable. If we determine a portion of the unamortized balance is not recoverable, it is charged to amortization expense. In certain cases, the unamortized balance of the deferred acquisition costs may not be deficient in the aggregate, but our estimates of future earnings indicate that profits would be recognized in early periods and losses in later periods. In this case, we increase the amortization of the deferred acquisition costs over the period of profits, by an amount necessary to offset losses that are expected to be recognized in the later years. Present Value of Future Profits The present value of future profits is the value assigned to the right to receive future cash flows from policyholder insurance contracts existing at September 10, 2003 (the "Effective Date", the effective date of the bankruptcy reorganization of Conseco, Inc., an Indiana corporation (our "Predecessor")). The discount rate we used to determine the present value of future profits was 12 percent . The balance of this account is amortized and evaluated for recovery in the same manner as described above for deferred acquisition costs. We also adjust the present value of future profits for the change in amortization that would have been recorded if the fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields, similar to the manner described above for deferred acquisition costs. We limit the total adjustment related to the impact of unrealized losses to the total present value of future profits plus interest. Assets Held in Separate Accounts Separate accounts are funds on which investment income and gains or losses accrue directly to certain policyholders. The assets of these accounts are legally segregated. They are not subject to the claims that may arise out of any other business of CNO. We report separate account assets at fair value; the underlying investment risks are assumed by the contractholders. We record the related liabilities at amounts equal to the separate account assets. We record the fees earned for administrative and contractholder services performed for the separate accounts in insurance policy income. Recognition of Insurance Policy Income and Related Benefits and Expenses on Insurance Contracts For interest-sensitive life and annuity contracts that do not involve significant mortality or morbidity risk, the amounts collected from policyholders are considered deposits and are not included in revenue. Revenues for these contracts consist of charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders' account balances. Such revenues are recognized when the service or coverage is provided, or when the policy is surrendered. We establish liabilities for annuity and interest-sensitive life products equal to the accumulated policy account values, which include an accumulation of deposit payments plus credited interest, less withdrawals and the amounts assessed against the policyholder through the end of the period. In addition, policyholder account values for certain interest-sensitive life products are impacted by our assumptions related to changes of certain non-guaranteed elements that we are allowed to make under the terms of the policy, such as cost of insurance charges, expense loads, credited interest rates and policyholder bonuses. Sales inducements provided to the policyholders of these products are recognized as liabilities over the period that the contract must remain in force to qualify for the inducement. The options attributed to the policyholder related to our fixed index annuity products are accounted for as embedded derivatives as described in the section of this note entitled "Accounting for Derivatives". Premiums from individual life products (other than interest-sensitive life contracts) and health products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. We establish liabilities for traditional life, accident and health insurance, and life contingent payment annuity products using mortality tables in general use in the United States, which are modified to reflect the Company's actual experience when appropriate. We establish liabilities for accident and health insurance products using morbidity tables based on the Company's actual or expected experience. These reserves are computed at amounts that, with additions from estimated future premiums received and with interest on such reserves at estimated future rates, are expected to be sufficient to meet our obligations under the terms of the policy. Liabilities for future policy benefits are computed on a net-level premium method based upon assumptions as to future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses determined when the policies were issued (or with respect to policies inforce at August 31, 2003, the Company's best estimate of such assumptions on the Effective Date). We make an additional provision to allow for potential adverse deviation for some of our assumptions. Once established, assumptions on these products are generally not changed unless a premium deficiency exists. In that case, a premium deficiency reserve is recognized and the future pattern of reserve changes is modified to reflect the relationship of premiums to benefits based on the current best estimate of future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses, determined without an additional provision for potential adverse deviation. We establish claim reserves based on our estimate of the loss to be incurred on reported claims plus estimates of incurred but unreported claims based on our past experience. Accounting for Long-term Care Premium Rate Increases Many of our long-term care policies have been subject to premium rate increases. In some cases, these premium rate increases were materially consistent with the assumptions we used to value the particular block of business at the Effective Date. With respect to certain premium rate increases, some of our policyholders were provided an option to cease paying their premiums and receive a non-forfeiture option in the form of a paid-up policy with limited benefits. In addition, our policyholders could choose to reduce their coverage amounts and premiums in the same proportion, when permitted by our contracts or as required by regulators. The following describes how we account for these policyholder options: • Premium rate increases - If premium rate increases reflect a change in our previous rate increase assumptions, the new assumptions are not reflected prospectively in our reserves. Instead, the additional premium revenue resulting from the rate increase is recognized as earned and original assumptions continue to be used to determine changes to liabilities for insurance products unless a premium deficiency exists. • Benefit reductions - A policyholder may choose reduced coverage with a proportionate reduction in premium, when permitted by our contracts. This option does not require additional underwriting. Benefit reductions are treated as a partial lapse of coverage, and the balance of our reserves and deferred insurance acquisition costs is reduced in proportion to the reduced coverage. • Non-forfeiture benefits offered in conjunction with a rate increase - In some cases, non-forfeiture benefits are offered to policyholders who wish to lapse their policies at the time of a significant rate increase. In these cases, exercise of this option is treated as an extinguishment of the original contract and issuance of a new contract. The balance of our reserves and deferred insurance acquisition costs are released, and a reserve for the new contract is established. Some of our policyholders may receive a non-forfeiture benefit if they cease paying their premiums pursuant to their original contract (or pursuant to changes made to their original contract as a result of a litigation settlement made prior to the Effective Date or an order issued by the Florida Office of Insurance Regulation). In these cases, exercise of this option is treated as the exercise of a policy benefit, and the reserve for premium paying benefits is reduced, and the reserve for the non-forfeiture benefit is adjusted to reflect the election of this benefit. Accounting for Certain Marketing Agreements Bankers Life has entered into various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute prescription drug and Medicare Advantage plans. These agreements allow Bankers Life to offer these products to current and potential future policyholders without investment in management and infrastructure. We receive fee income related to the plans sold through our distribution channels. We account for these distribution agreements as follows: • We recognize distribution income based on either: (i) a fixed fee per contract sold; or (ii) a percentage of premiums collected. This fee income is recognized over the calendar year term of the contract. • We also pay commissions to our agents who sell the plans. These payments are deferred and amortized over the term of the contract. Reinsurance In the normal course of business, we seek to limit our loss exposure on any single insured or to certain groups of policies by ceding reinsurance to other insurance enterprises. We currently retain no more than $.8 million of mortality risk on any one policy. We diversify the risk of reinsurance loss by using a number of reinsurers that have strong claims-paying ratings. In each case, the ceding CNO subsidiary is directly liable for claims reinsured in the event the assuming company is unable to pay. The cost of reinsurance ceded totaled $123.9 million , $133.6 million and $176.7 million in 2016 , 2015 and 2014 , respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $130.1 million , $167.7 million and $195.3 million in 2016 , 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 $34.0 million , $38.5 million and $35.0 million in 2016 , 2015 and 2014 , respectively. In December 2013, two of our insurance subsidiaries entered into 100% coinsurance agreements ceding $495 million of long-term care reserves to BRe. Pursuant to the agreements, the insurance subsidiaries paid an additional premium of $96.9 million to BRe and an amount equal to the related net liabilities. The insurance subsidiaries' ceded reserve credits were secured by assets in market-value trusts subject to a 7% over-collateralization, investment guidelines and periodic true-up provisions. Future payments into the trusts to maintain collateral requirements were the responsibility of BRe. In September 2016, we terminated the reinsurance agreements with BRe and recaptured the ceded business. As a result of the recapture, we were required to value the assets and liabilities as of the date of recapture based on valuation methodologies that are consistent with the methodologies used by CNO to value its other investments and insurance liabilities. Accordingly, we recognized a loss on the recapture of the long-term care business as summarized below (dollars in millions): Market value of investments $ 504.7 Insurance liabilities (552.2 ) Write-off of reinsurance receivables (17.9 ) Estimated transaction expenses (10.0 ) Pre-tax loss (75.4 ) Tax benefit 26.4 Increase in valuation allowance for deferred tax assets (4.1 ) After-tax loss $ (53.1 ) 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 . As further described in the note to the financial statements entitled "Sale of Subsidiary", we recaptured a block of life insurance business in 2014 that was previously ceded under a coinsurance agreement. Income Taxes Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and net operating loss carryforwards ("NOLs"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred 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. At December 31, 2016 , our valuation allowance for our net deferred tax assets was $240.2 million , as we have determined that it is more likely than not that a portion of our deferred tax assets will not be realized. This determination was made by evaluating each component of the deferred tax assets and assessing the effects of limitations and/or interpretations on the value of such component to be fully recognized in the future. Investments in Variable Interest Entities We have concluded that we are the primary beneficiary with respect to certain variable interest entities ("VIEs"), which are consolidated in our financial statements. 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. The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. Refer to the note to the consolidated financial statements entitled "Investments in Variable Interest Entities" for additional information about VIEs. In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager. These structured securities include asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations. Our maximum exposure to loss on these securities is limited to our cost basis in the investment. We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses. At December 31, 2016 , we held investments in various limited partnerships, in which we are not the primary beneficiary, totaling $251.9 million (classified as other invested assets). At December 31, 2016 , we had unfunded commitments to these partnerships of $217.7 million . Our maximum exposure to loss on these investments is limited to the amount of our investment. Investment borrowings Three of the Company's insurance subsidiaries (Washington National, Bankers Life and Colonial Penn) are members of the Federal Home Loan Bank ("FHLB"). As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. At December 31, 2016 , the carrying value of the FHLB common stock was $71.2 million . As of December 31, 2016 , collateralized borrowings from the FHLB totaled $1.6 billion and the proceeds were used to purchase fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $2.0 billion at December 31, 2016 , 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 our insurance subsidiaries (dollars in millions): Amount Maturity Interest rate at borrowed date December 31, 2016 $ 50.0 January 2018 Variable rate – 1.226% 50.0 January 2018 Variable rate – 1.222% 50.0 February 2018 Variable rate – 1.191% 50.0 February 2018 Variable rate – 1.001% 22.0 February 2018 Variable rate – 1.267% 100.0 May 2018 Variable rate – 1.206% 50.0 July 2018 Variable rate – 1.360% 50.0 August 2018 Variable rate – 1.022% 10.0 December 2018 Variable rate – 1.266% 50.0 January 2019 Variable rate – 1.300% 50.0 February 2019 Variable rate – 1.001% 100.0 March 2019 Variable rate – 1.216% 21.8 July 2019 Variable rate – 1.234% 15.0 October 2019 Variable rate – 1.399% 50.0 May 2020 Variable rate – 1.224% 21.8 June 2020 Fixed rate – 1.960% 25.0 September 2020 Variable rate – 1.622% 100.0 September 2020 Variable rate – 1.416% 50.0 September 2020 Variable rate – 1.416% 75.0 September 2020 Variable rate – 1.118% 100.0 October 2020 Variable rate – 1.109% 50.0 December 2020 Variable rate – 1.335% 100.0 July 2021 Variable rate – 1.431% 57.7 July 2021 Variable rate – 1.411% 100.0 August 2021 Variable rate – 1.400% 28.2 August 2021 Fixed rate – 2.550% 125.0 August 2021 Variable rate – 1.236% 50.0 September 2021 Variable rate – 1.477% 25.4 March 2023 Fixed rate – 2.160% 20.5 June 2025 Fixed rate – 2.940% $ 1,647.4 The variable rate borrowings are pre-payable on each interest reset date without penalty. The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on prevailing market interest rates. At December 31, 2016 , the aggregate yield maintenance fee to prepay all fixed rate borrowings was $2.6 million . Interest expense of $17.5 million , $10.9 million and $18.7 million in 2016 , 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 "Derivatives". These repurchase agreements are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. There were no such borrowings outstanding at December 31, 2016 . We had no such borrowings outstanding at 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. Accounting for Derivatives Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period. Typically, on each policy anniversary date, a new index period begins. We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums. 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. From time to time, we utilize United States Treasury interest rate futures primarily to hedge interest rate risk related to anticipated mortgage loan transactions. In periods prior to the second quarter of 2014, we were required to establish an embedded derivative related to a modified coinsurance agreement which ceded the risks of a block of interest sensitive life business. We recaptured this block in the second quarter of 2014 resulting in a gain of $3.8 million . Prior to the recapture of this block, we maintained the investments related to the modified coinsurance agreement in our trading securities account, which we carried at estimated fair value with changes in such value recognized as investment income. Such trading securities were sold in the second quarter of 2014 in conjunction with the reinsurance recapture. We purchase certain fixed maturity securities that contain embedded derivatives that are required to be 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. Multibucket Annuity Products The Company's multibucket annuity is an annuity product that credits interest based on the experience of a particular market strategy. Policyholders allocate their annuity premium payments to several different market strategies based on different asset classes within the Company's investment portfolio. Interest is credited to this product based on the market return of the given strategy, less management fees, and funds may be moved between different strategies. The Company guarantees a minimum return of premium plus approximately 3 percent per annum over the life of the contract. The investments backing the market strategies of these products are designated by the Company as trading securities. The change in the fair value of these securities is recognized as investment income (classified as income from policyholder and reinsurer accounts and other special-purpose portfolios), which is substantially offset by the change in insurance policy benefits for these products. We hold insurance liabilities of $32.8 million and $37.5 million related to multibucket annuity products as of December 31, 2016 and 2015 , respectively. Sales Inducements Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract. Certain of our life insurance products offer persistency bonuses credited to the contract holders balance after the policy has been outstanding for a specified period of time. These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP. Such amounts are deferred and amortized in the same manner as deferred acquisition costs. Sales inducements deferred totaled $3.4 million , $3.8 million and $5.1 million during 2016 , 2015 and 2014 , respectively. Amounts amortized totaled $11.4 million , $13.8 million and $12.4 million during 2016 , 2015 and 2014 , respectively. The unamortized balance of deferred sales inducements was $49.4 million and $57.4 million at December 31, 2016 and 2015 , respectively. The balance of insurance liabilities for persistency bonus benefits was $.5 million and $.9 million at December 31, 2016 and 2015 , respectively. Out-of-Period Adjustments In 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 decreased our net income 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. 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 gu |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS At December 31, 2016 , the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other-than-temporary impairments included in accumulated other comprehensive income Investment grade (a): Corporate securities $ 11,582.6 $ 1,073.9 $ (99.8 ) $ 12,556.7 $ — United States Treasury securities and obligations of United States government corporations and agencies 143.8 20.5 — 164.3 — States and political subdivisions 1,798.2 186.7 (7.9 ) 1,977.0 — Debt securities issued by foreign governments 37.1 .2 (.4 ) 36.9 — Asset-backed securities 1,169.6 29.2 (8.7 ) 1,190.1 — Collateralized debt obligations 227.5 1.0 (.3 ) 228.2 — Commercial mortgage-backed securities 1,467.2 32.9 (26.6 ) 1,473.5 — Mortgage pass-through securities 2.3 .2 — 2.5 — Collateralized mortgage obligations 304.8 14.6 (.2 ) 319.2 — Total investment grade fixed maturities, available for sale 16,733.1 1,359.2 (143.9 ) 17,948.4 — Below-investment grade (a) (b): Corporate securities 967.3 26.1 (39.2 ) 954.2 (3.6 ) States and political subdivisions 13.6 — (1.7 ) 11.9 (3.0 ) Asset-backed securities 1,471.9 55.1 (6.8 ) 1,520.2 — Collateralized debt obligations 2.5 — — 2.5 — Commercial mortgage-backed securities 63.8 .2 (1.3 ) 62.7 — Collateralized mortgage obligations 550.9 46.8 (1.4 ) 596.3 (1.4 ) Total below-investment grade fixed maturities, available for sale 3,070.0 128.2 (50.4 ) 3,147.8 (8.0 ) Total fixed maturities, available for sale $ 19,803.1 $ 1,487.4 $ (194.3 ) $ 21,096.2 $ (8.0 ) Equity securities $ 580.7 $ 11.5 $ (8.0 ) $ 584.2 _______________ (a) Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P Global Ratings ("S&P") or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. (b) Certain structured securities rated below-investment grade by NRSROs may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the NAIC. Refer to the table below for a summary of our fixed maturity securities, available for sale, by NAIC designations. The NAIC evaluates the fixed maturity investments of insurers for regulatory and capital assessment purposes and assigns securities to one of six credit quality categories called NAIC designations, which are used by insurers when preparing their annual statements based on statutory accounting principles. The NAIC designations are generally similar to the credit quality designations of the NRSROs for marketable fixed maturity securities, except for certain structured securities. However, certain structured securities rated below investment grade by the NRSROs can be assigned NAIC 1 or NAIC 2 designations dependent on the cost basis of the holding relative to estimated recoverable amounts as determined by the NAIC. The following summarizes the NAIC designations and NRSRO equivalent ratings: NAIC Designation NRSRO Equivalent Rating 1 AAA/AA/A 2 BBB 3 BB 4 B 5 CCC and lower 6 In or near default A summary of our fixed maturity securities, available for sale, by NAIC designations (or for fixed maturity securities held by non-regulated entities, based on NRSRO ratings) as of December 31, 2016 is as follows (dollars in millions): NAIC designation Amortized cost Estimated fair value Percentage of total estimated fair value 1 $ 9,715.7 $ 10,463.2 49.6 % 2 8,973.1 9,526.4 45.2 Total NAIC 1 and 2 (investment grade) 18,688.8 19,989.6 94.8 3 711.7 705.4 3.3 4 233.0 229.4 1.1 5 141.3 138.3 .6 6 28.3 33.5 .2 Total NAIC 3,4,5 and 6 (below-investment grade) 1,114.3 1,106.6 5.2 $ 19,803.1 $ 21,096.2 100.0 % At December 31, 2015 , the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other-than-temporary impairments included in accumulated other comprehensive income Investment grade: Corporate securities $ 11,477.5 $ 929.4 $ (262.9 ) $ 12,144.0 $ — United States Treasury securities and obligations of United States government corporations and agencies 172.5 22.3 (.3 ) 194.5 — States and political subdivisions 1,889.6 208.6 (3.7 ) 2,094.5 — Debt securities issued by foreign governments 18.9 — (.6 ) 18.3 — Asset-backed securities 979.8 22.1 (7.2 ) 994.7 — Collateralized debt obligations 188.5 .4 (2.2 ) 186.7 — Commercial mortgage-backed securities 1,531.7 41.3 (16.3 ) 1,556.7 — Mortgage pass-through securities 3.1 .3 — 3.4 — Collateralized mortgage obligations 450.9 17.0 (.6 ) 467.3 — Total investment grade fixed maturities, available for sale 16,712.5 1,241.4 (293.8 ) 17,660.1 — Below-investment grade: Corporate securities 798.5 8.3 (82.3 ) 724.5 — States and political subdivisions 13.6 — (3.9 ) 9.7 (3.0 ) Debt securities issued by foreign governments 2.4 — — 2.4 — Asset-backed securities 838.0 25.7 (6.2 ) 857.5 — Commercial mortgage-backed securities 49.9 — (1.3 ) 48.6 — Collateralized mortgage obligations 532.1 49.0 (1.0 ) 580.1 (1.9 ) Total below-investment grade fixed maturities, available for sale 2,234.5 83.0 (94.7 ) 2,222.8 (4.9 ) Total fixed maturities, available for sale $ 18,947.0 $ 1,324.4 $ (388.5 ) $ 19,882.9 $ (4.9 ) Equity securities $ 447.4 $ 18.4 $ (2.8 ) $ 463.0 Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments. These amounts, included in shareholders' equity as of December 31, 2016 and 2015 , were as follows (dollars in millions): 2016 2015 Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized $ (1.1 ) $ 1.6 Net unrealized gains on all other investments 1,311.9 903.4 Adjustment to present value of future profits (a) (106.2 ) (121.2 ) Adjustment to deferred acquisition costs (223.5 ) (133.3 ) Adjustment to insurance liabilities (13.5 ) (14.6 ) Unrecognized net loss related to deferred compensation plan — (8.6 ) Deferred income tax liabilities (345.2 ) (224.5 ) Accumulated other comprehensive income $ 622.4 $ 402.8 ________ (a) The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date our Predecessor emerged from bankruptcy. At December 31, 2016 , adjustments to the present value of future profits, deferred acquisition costs, insurance liabilities and deferred tax assets included $(94.1) million , $(96.4) million , $(13.5) million and $72.5 million , respectively, for premium deficiencies that would exist on certain blocks of business (primarily long-term care products) if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields. At December 31, 2015 , adjustments to the present value of future profits, deferred acquisition costs, insurance liabilities and deferred tax assets included $(109.3) million , $(33.2) million , $(14.6) million and $55.8 million , respectively, for premium deficiencies that would exist on certain blocks of business (primarily long-term care products) if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields. Below-Investment Grade Securities At December 31, 2016 , the amortized cost of the Company's below-investment grade fixed maturity securities was $3,070.0 million , or 16 percent of the Company's fixed maturity portfolio. The estimated fair value of the below-investment grade portfolio was $3,147.8 million , or 103 percent of the amortized cost (refer to the table on page 140 the composition of the below-investment grade portfolio). Below-investment grade corporate debt securities typically have different characteristics than investment grade corporate debt securities. Based on historical performance, probability of default by the borrower is significantly greater for below-investment grade corporate debt securities and in many cases severity of loss is relatively greater as such securities are generally unsecured and often subordinated to other indebtedness of the issuer. Also, issuers of below-investment grade corporate debt securities frequently have higher levels of debt relative to investment-grade issuers, hence, all other things being equal, are generally more sensitive to adverse economic conditions. The Company attempts to reduce the overall risk related to its investment in below-investment grade securities, as in all investments, through careful credit analysis, strict investment policy guidelines, and diversification by issuer and/or guarantor and by industry. Contractual Maturity The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2016 , by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities (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 $ 354.7 $ 359.8 Due after one year through five years 2,243.8 2,399.5 Due after five years through ten years 1,549.1 1,620.8 Due after ten years 10,395.0 11,320.9 Subtotal 14,542.6 15,701.0 Structured securities 5,260.5 5,395.2 Total fixed maturities, available for sale $ 19,803.1 $ 21,096.2 Net Investment Income Net investment income consisted of the following (dollars in millions): 2016 2015 2014 General account assets: Fixed maturities $ 1,081.4 $ 1,090.1 $ 1,175.8 Equity securities 21.5 18.3 13.9 Mortgage loans 91.0 91.4 104.2 Policy loans 7.3 7.3 11.0 Other invested assets 24.3 17.4 17.1 Cash and cash equivalents 2.0 .8 .6 Policyholder and reinsurer accounts and other special-purpose portfolios: Trading securities (a) 12.2 10.7 14.8 Options related to fixed index products: Option income (loss) (40.1 ) 36.5 118.9 Change in value of options 69.3 (72.7 ) (49.4 ) Other special-purpose portfolios 79.7 55.5 42.1 Gross investment income 1,348.6 1,255.3 1,449.0 Less investment expenses 23.4 21.7 21.6 Net investment income $ 1,325.2 $ 1,233.6 $ 1,427.4 _________________ (a) Changes in the estimated fair value for trading securities still held as of the end of the respective years and included in net investment income were $(.2) million , $.4 million and $3.4 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The carrying value of fixed maturities and mortgage loans not accruing investment income totaled $44.1 million and nil at December 31, 2016 and 2015 , respectively. Net Realized Investment Gains (Losses) The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions): 2016 2015 2014 Fixed maturity securities, available for sale: Gross realized gains on sale $ 137.7 $ 95.7 $ 64.4 Gross realized losses on sale (95.2 ) (88.4 ) (13.0 ) Impairments: Total other-than-temporary impairment losses (15.2 ) (17.9 ) — Other-than-temporary impairment losses recognized in accumulated other comprehensive income 3.6 3.0 — Net impairment losses recognized (11.6 ) (14.9 ) — Net realized investment gains (losses) from fixed maturities 30.9 (7.6 ) 51.4 Equity securities 20.9 3.7 10.1 Commercial mortgage loans — (2.3 ) (.1 ) Impairments on preferred stock and other investments (20.7 ) (25.0 ) (27.3 ) Gain (loss) on dissolution of variable interest entities (7.3 ) 11.3 — Other (a) (15.5 ) (16.7 ) 2.6 Net realized investment gains (losses) $ 8.3 $ (36.6 ) $ 36.7 _________________ (a) Changes in the estimated fair value of trading securities that we have elected the fair value option (and still held as of the end of the respective periods) were $(.5) million , $(9.2) million and $7.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. During 2016 , we recognized net realized investment gains of $8.3 million , which were comprised of: (i) $47.5 million of net gains from the sales of investments; (ii) a $7.3 million loss on the dissolution of a VIE; (iii) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $.4 million ; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $.8 million ; and (v) $32.3 million of writedowns of investments for other than temporary declines in fair value recognized through net income ( $35.9 million , prior to the $3.6 million of impairment losses recognized through accumulated other comprehensive income). During 2016 and 2015 , VIEs that were required to be consolidated were dissolved. We recognized a loss of $7.3 million during 2016 and a gain of $11.3 million during 2015 , representing the difference between the borrowings of such VIEs and the contractual distributions required following the liquidation of the underlying assets. During 2015 , we recognized net realized investment losses of $36.6 million , which were comprised of: (i) $8.2 million of net gains from the sales of investments; (ii) an $11.3 million gain on the dissolution of a VIE; (iii) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $9.2 million ; (iv) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $7.0 million ; and (v) $39.9 million of writedowns of investments for other than temporary declines in fair value recognized through net income ( $42.9 million , prior to the $3.0 million of impairment losses recognized through accumulated other comprehensive income). During 2014 , we recognized net realized investment gains of $36.7 million , which were comprised of: (i) $54.4 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 $7.6 million ; (iii) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.0 million ; and (iv) $27.3 million of writedowns of mortgage loans and other investments for other than temporary declines in fair value recognized through net income. At December 31, 2016 , there were five investments in default or considered nonperforming with an aggregate amortized cost and carrying value of $19.2 million and $28.3 million , respectively. During 2016 , the $95.2 million of realized losses on sales of $790.2 million of fixed maturity securities, available for sale, included: (i) $79.2 million related to various corporate securities (including $63.5 million related to sales of investments in the energy sector); (ii) $5.8 million related to commercial mortgage-backed securities; (iii) $5.7 million related to asset-backed securities; and (iv) $4.5 million related to various other investments. 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 2016 , we recognized $32.3 million of impairment losses recorded in earnings which included: (i) $9.3 million of writedowns on fixed maturities in the energy sector; (ii) $3.7 million of writedowns on a direct loan due to borrower specific events; (iii) $12.7 million of writedowns on a privately placed preferred stock of an entity formed to construct and operate a chemical plant; (iv) $1.2 million of writedowns of investments held by VIEs due to other-than-temporary declines in value; and (v) $5.4 million of writedowns on other investments. Factors considered in determining the writedowns of investments in 2016 included the subordination status of each investment, the impact of recent downgrades and issuer specific events, including the impact of the current low oil prices on issuers in the energy sector. During 2015 , the $88.4 million of realized losses on sales of $724.4 million of fixed maturity securities, available for sale, primarily related to various corporate securities (including $59.7 million related to sales of investments in the energy sector). During 2015 , we recognized $39.9 million of impairment losses recorded in earnings which included: (i) $10.2 million of writedowns on fixed maturities in the energy sector; (ii) $16.4 million of writedowns on commercial bank loans held by VIEs; (iii) $5.4 million of writedowns on other investments (primarily fixed maturities); and (iv) a $7.9 million writedown of a legacy investment in a private company that was liquidated. We no longer have any exposure to legacy private companies related to investments acquired by our Predecessor. During 2014 , the $13.0 million of realized losses on sales of $233.7 million of fixed maturity securities, available for sale, included: (i) $.7 million of losses related to the sales of securities issued by state and political subdivisions; and (ii) $12.3 million of additional losses primarily related to various corporate securities. During 2014 , we recognized $27.3 million of impairment losses recorded in earnings which included: (i) a $6.8 million writedown of commercial mortgage loans as a result of our intent to sell the loans; (ii) $19.1 million of impairments related to two legacy private company investments where earnings and cash flows had not met the expectations assumed in our previous valuations; and (iii) $1.4 million of losses on other investments following unforeseen issue-specific events or conditions. 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. The following summarizes the investments sold at a loss during 2016 which had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis prior to the sale for the period indicated (dollars in millions): At date of sale Number Amortized cost Fair value Less than 6 months prior to sale 19 $ 119.3 $ 79.2 Greater than or equal to 6 months and less than 12 months prior to sale 7 76.4 45.6 26 $ 195.7 $ 124.8 We regularly evaluate all of our investments with unrealized losses for possible impairment. Our assessment of whether unrealized losses are "other than temporary" requires significant judgment. Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors. Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio. Significant losses could have a material adverse effect on our consolidated financial statements in future periods. Impairment losses on equity securities are recognized in net income. The manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings. If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated. We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income. We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security. For most structured securities, cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including excess spread, subordination and guarantees. For corporate bonds, cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis. We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming. The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment. The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums. As of December 31, 2016 , other-than-temporary impairments included in accumulated other comprehensive income totaled $8.0 million (before taxes and related amortization). Mortgage loans are impaired when it is probable that we will not collect the contractual principal and interest on the loan. We measure impairment based upon the difference between the carrying value of the loan and the estimated fair value of the collateral securing the loan less cost to sell. The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for years ended December 31, 2016 , 2015 and 2014 (dollars in millions): Year ended December 31, 2016 2015 2014 Credit losses on fixed maturity securities, available for sale, beginning of period $ (2.6 ) $ (1.0 ) $ (1.3 ) Add: credit losses on other-than-temporary impairments not previously recognized (3.0 ) (2.0 ) — Less: credit losses on securities sold .1 .4 .3 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 $ (5.5 ) $ (2.6 ) $ (1.0 ) __________ (a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis. Investments with Unrealized Losses The following table sets forth the amortized cost and estimated fair value of those fixed maturities, available for sale, with unrealized losses at December 31, 2016 , by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities frequently include provisions for periodic principal payments and permit periodic unscheduled payments. Amortized cost Estimated fair value (Dollars in millions) Due in one year or less $ 35.7 $ 35.0 Due after one year through five years 150.4 145.9 Due after five years through ten years 389.3 370.9 Due after ten years 2,262.3 2,136.9 Subtotal 2,837.7 2,688.7 Structured securities 1,857.2 1,811.9 Total $ 4,694.9 $ 4,500.6 The following summarizes the investments in our portfolio rated below-investment grade which have been continuously in an unrealized loss position exceeding 20 percent of the cost basis for the period indicated as of December 31, 2016 (dollars in millions): Number Cost Unrealized Estimated Less than 6 months 4 $ 53.8 $ (12.1 ) $ 41.7 Greater than 12 months 1 .7 (.2 ) .5 $ 54.5 $ (12.3 ) $ 42.2 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, 2016 (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 $ 8.0 $ — $ — $ — $ 8.0 $ — States and political subdivisions 176.3 (7.8 ) 18.3 (1.8 ) 194.6 (9.6 ) Debt securities issued by foreign governments 18.9 (.4 ) — — 18.9 (.4 ) Corporate securities 1,907.6 (75.5 ) 559.6 (63.5 ) 2,467.2 (139.0 ) Asset-backed securities 692.9 (8.5 ) 262.5 (7.0 ) 955.4 (15.5 ) Collateralized debt obligations 38.3 (.1 ) 30.8 (.2 ) 69.1 (.3 ) Commercial mortgage-backed securities 525.2 (16.6 ) 154.0 (11.3 ) 679.2 (27.9 ) Collateralized mortgage obligations 73.6 (.6 ) 34.6 (1.0 ) 108.2 (1.6 ) Total fixed maturities, available for sale $ 3,440.8 $ (109.5 ) $ 1,059.8 $ (84.8 ) $ 4,500.6 $ (194.3 ) Equity securities $ 239.4 $ (8.0 ) $ — $ — $ 239.4 $ (8.0 ) 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, 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 $ 43.6 $ (.3 ) $ — $ — $ 43.6 $ (.3 ) States and political subdivisions 156.8 (4.1 ) 14.8 (3.5 ) 171.6 (7.6 ) Debt securities issued by foreign governments 20.7 (.6 ) — — 20.7 (.6 ) Corporate securities 2,913.6 (255.7 ) 278.9 (89.5 ) 3,192.5 (345.2 ) Asset-backed securities 930.3 (11.7 ) 98.4 (1.7 ) 1,028.7 (13.4 ) Collateralized debt obligations 96.2 (1.8 ) 36.3 (.4 ) 132.5 (2.2 ) Commercial mortgage-backed securities 556.0 (16.1 ) 25.7 (1.5 ) 581.7 (17.6 ) Mortgage pass-through securities — — .1 — .1 — Collateralized mortgage obligations 97.8 (1.0 ) 40.8 (.6 ) 138.6 (1.6 ) Total fixed maturities, available for sale $ 4,815.0 $ (291.3 ) $ 495.0 $ (97.2 ) $ 5,310.0 $ (388.5 ) Equity securities $ 140.1 $ (2.4 ) $ 2.4 $ (.4 ) $ 142.5 $ (2.8 ) Based on management's current assessment of investments with unrealized losses at December 31, 2016 , the Company believes the issuers of the securities will continue to meet their obligations (or with respect to equity-type securities, the investment value will recover to its cost basis). While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments. In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery. Structured Securities At December 31, 2016 fixed maturity investments included structured securities with an estimated fair value of $5.4 billion (or 26 percent of all fixed maturity securities). The yield characteristics of structured securities generally differ in some respects from those of traditional corporate fixed-income securities or government securities. For example, interest and principal payments on structured securities may occur more frequently, often monthly. In many instances, we are subject to variability in the amount and timing of principal and interest payments. For example, in many cases, partial prepayments may occur at the option of the issuer and prepayment rates are influenced by a number of factors that cannot be predicted with certainty, including: the relative sensitivity of prepayments on the underlying assets backing the security to changes in interest rates and asset values; the availability of alternative financing; a variety of economic, geographic and other factors; the timing, pace and proceeds of liquidations of defaulted collateral; and various security-specific structural considerations (for example, the repayment priority of a given security in a securitization structure). In addition, the total amount of payments for non-agency structured securities may be affected by changes to cumulative default rates or loss severities of the related collateral. Historically, the rate of prepayments on structured securities has t |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
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, separate account assets and embedded derivatives. We carry our COLI, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, 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 cash equivalents 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 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 2016 and 2015 . 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 typically 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 45 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 December 31, 2016 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 $ — $ 13,252.4 $ 258.5 $ 13,510.9 United States Treasury securities and obligations of United States government corporations and agencies — 164.3 — 164.3 States and political subdivisions — 1,988.9 — 1,988.9 Debt securities issued by foreign governments — 33.0 3.9 36.9 Asset-backed securities — 2,649.9 60.4 2,710.3 Collateralized debt obligations — 225.3 5.4 230.7 Commercial mortgage-backed securities — 1,504.2 32.0 1,536.2 Mortgage pass-through securities — 2.5 — 2.5 Collateralized mortgage obligations — 915.5 — 915.5 Total fixed maturities, available for sale — 20,736.0 360.2 21,096.2 Equity securities - corporate securities 359.9 199.1 25.2 584.2 Trading securities: Corporate securities — 19.0 — 19.0 United States Treasury securities and obligations of United States government corporations and agencies — .5 — .5 Asset-backed securities — 94.3 — 94.3 Collateralized debt obligations — 2.4 — 2.4 Commercial mortgage-backed securities — 163.9 — 163.9 Collateralized mortgage obligations — 78.4 — 78.4 Equity securities 4.9 — — 4.9 Total trading securities 4.9 358.5 — 363.4 Investments held by variable interest entities - corporate securities — 1,724.3 — 1,724.3 Other invested assets - derivatives — 111.9 — 111.9 Assets held in separate accounts — 4.7 — 4.7 Total assets carried at fair value by category $ 364.8 $ 23,134.5 $ 385.4 $ 23,884.7 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,092.3 $ 1,092.3 The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2015 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 $ — $ 12,698.1 $ 170.4 $ 12,868.5 United States Treasury securities and obligations of United States government corporations and agencies — 194.5 — 194.5 States and political subdivisions — 2,104.2 — 2,104.2 Debt securities issued by foreign governments — 20.7 — 20.7 Asset-backed securities — 1,816.3 35.9 1,852.2 Collateralized debt obligations — 186.7 — 186.7 Commercial mortgage-backed securities — 1,604.2 1.1 1,605.3 Mortgage pass-through securities — 3.3 .1 3.4 Collateralized mortgage obligations — 1,047.4 — 1,047.4 Total fixed maturities, available for sale — 19,675.4 207.5 19,882.9 Equity securities - corporate securities 254.9 176.1 32.0 463.0 Trading securities: Corporate securities — 21.5 — 21.5 United States Treasury securities and obligations of United States government corporations and agencies — 1.9 — 1.9 Asset-backed securities — 35.5 — 35.5 Collateralized debt obligations — 2.1 — 2.1 Commercial mortgage-backed securities — 118.1 39.9 158.0 Collateralized mortgage obligations — 38.2 — 38.2 Equity securities 4.9 — — 4.9 Total trading securities 4.9 217.3 39.9 262.1 Investments held by variable interest entities - corporate securities — 1,633.6 — 1,633.6 Other invested assets - derivatives 1.6 41.0 — 42.6 Assets held in separate accounts — 4.7 — 4.7 Total assets carried at fair value by category $ 261.4 $ 21,748.1 $ 279.4 $ 22,288.9 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,057.1 $ 1,057.1 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. 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): December 31, 2016 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 $ — $ — $ 1,800.1 $ 1,800.1 $ 1,768.0 Policy loans — — 112.0 112.0 112.0 Other invested assets: Company-owned life insurance — 165.0 — 165.0 165.0 Cash and cash equivalents: Unrestricted 473.6 5.3 — 478.9 478.9 Held by variable interest entities 189.3 — — 189.3 189.3 Liabilities: Policyholder account balances — — 10,912.7 10,912.7 10,912.7 Investment borrowings — 1,650.0 — 1,650.0 1,647.4 Borrowings related to variable interest entities — 1,675.2 — 1,675.2 1,662.8 Notes payable – direct corporate obligations — 931.9 — 931.9 912.9 December 31, 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 $ — $ — $ 1,772.4 $ 1,772.4 $ 1,721.0 Policy loans — — 109.4 109.4 109.4 Other invested assets: Company-owned life insurance — 158.1 — 158.1 158.1 Cash and cash equivalents: Unrestricted 432.3 — — 432.3 432.3 Held by variable interest entities 364.4 — — 364.4 364.4 Liabilities: Policyholder account balances — — 10,762.3 10,762.3 10,762.3 Investment borrowings — 1,549.8 — 1,549.8 1,548.1 Borrowings related to variable interest entities — 1,673.6 — 1,673.6 1,676.4 Notes payable – direct corporate obligations — 937.8 — 937.8 911.1 The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2016 (dollars in millions): December 31, 2016 Beginning balance as of December 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 December 31, 2016 Amount of total gains (losses) for the year ended December 31, 2016 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 $ 170.4 $ 76.5 $ (10.7 ) $ 9.1 $ 20.3 $ (7.1 ) $ 258.5 $ (10.9 ) Debt securities issued by foreign governments — 4.0 — (.1 ) — — 3.9 — Asset-backed securities 35.9 9.7 — 2.2 26.3 (13.7 ) 60.4 — Collateralized debt obligations — 5.4 — — — — 5.4 — Commercial mortgage-backed securities 1.1 16.9 — .1 13.9 — 32.0 — Mortgage pass-through securities .1 (.1 ) — — — — — — Total fixed maturities, available for sale 207.5 112.4 (10.7 ) 11.3 60.5 (20.8 ) 360.2 (10.9 ) Equity securities - corporate securities 32.0 5.5 (12.7 ) .4 — — 25.2 (12.7 ) Trading securities - commercial mortgage-backed securities 39.9 — — — — (39.9 ) — — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,057.1 ) (96.0 ) 60.8 — — — (1,092.3 ) 60.8 _________ (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. In addition, such activity includes the investments received upon the recapture of reinsurance agreements with BRe on September 29, 2016. The following summarizes such activity for the year ended December 31, 2016 (dollars in millions): Purchases Received in reinsurance recapture Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 18.5 $ 89.2 $ (31.2 ) $ — $ — $ 76.5 Debt securities issued by foreign governments 4.0 — — — — 4.0 Asset-backed securities 16.9 — (7.2 ) — — 9.7 Collateralized debt obligations 5.4 — — — — 5.4 Commercial mortgage-backed securities 17.0 — (.1 ) — — 16.9 Mortgage pass-through securities — — (.1 ) — — (.1 ) Total fixed maturities, available for sale 61.8 89.2 (38.6 ) — — 112.4 Equity securities - corporate securities 3.3 2.2 — — — 5.5 Trading securities - corporate securities .2 — (.2 ) — — — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (148.3 ) — 21.2 (28.9 ) 60.0 (96.0 ) 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 year ended December 31, 2015 (dollars in millions): December 31, 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 December 31, 2015 Amount of total gains (losses) for the year ended December 31, 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 $ 31.0 $ (2.2 ) $ (19.5 ) $ 37.4 $ (242.2 ) $ 170.4 $ — States and political subdivisions 35.5 (35.5 ) — — — — — — Asset-backed securities 59.2 6.7 — (1.4 ) — (28.6 ) 35.9 — Commercial mortgage-backed securities 1.2 (.1 ) — — — — 1.1 — Mortgage pass-through securities .4 (.3 ) — — — — .1 — Total fixed maturities, available for sale 462.2 1.8 (2.2 ) (20.9 ) 37.4 (270.8 ) 207.5 — Equity securities - corporate securities 28.0 4.0 — — — — 32.0 — 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 ) (11.9 ) 36.3 — — — (1,057.1 ) 36.3 ____________ (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 year ended December 31, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 62.2 $ (31.2 ) $ — $ — $ 31.0 States and political subdivisions — (35.5 ) — — (35.5 ) Asset-backed securities 13.7 (7.0 ) — — 6.7 Commercial mortgage-backed securities — (.1 ) — — (.1 ) Mortgage pass-through securities — (.3 ) — — (.3 ) Total fixed maturities, available for sale 75.9 (74.1 ) — — 1.8 Equity securities - corporate securities 4.0 — — — 4.0 Trading securities - commercial mortgage-backed securities 9.5 — — — 9.5 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (137.8 ) 64.4 (4.0 ) 65.5 (11.9 ) At December 31, 2016 , 46 percent of our Level 3 fixed maturities, available for sale, were investment grade and 72 percent of our Level 3 fixed maturities, available for sale, consisted of corporate securities. Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3. Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and reinsurer accounts and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument. The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date. The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2016 (dollars in millions): Fair value at December 31, 2016 Valuation techniques Unobservable inputs Range (weighted average) Assets: Corporate securities (a) $ 148.5 Discounted cash flow analysis Discount margins 1.35% - 27.71% (13.52%) Corporate securities (b) 14.8 Recovery method Percent of recovery expected 5% - 69% (55%) Asset-backed securities (c) 24.0 Discounted cash flow analysis Discount margins 2.06% - 3.64% (2.76%) Equity security (d) 25.2 Market multiple Projected cash flows 0.4% - 6.2% (5.9%) Other assets categorized as Level 3 (e) 172.9 Unadjusted third-party price source Not applicable Not applicable Total 385.4 Liabilities: Future policy benefits (f) 1,092.3 Discounted projected embedded derivatives Projected portfolio yields 5.15% - 5.61% (5.59%) Discount rates 0.18 - 3.06% (2.07%) Surrender rates 0.94% - 46.48% (13.52%) ________________________________ (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) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement. (c) 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. (d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is projected cash flows. Generally, increases (decreases) in the projected cash flows would result in higher (lower) fair value measurements. (e) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. (f) 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, 2015 (dollars in millions): Fair value at December 31, 2015 Valuation techniques Unobservable inputs Range (weighted average) Assets: Corporate securities (a) $ 76.9 Discounted cash flow analysis Discount margins 1.65% - 9.74% (5.35%) Asset-backed securities (b) 22.2 Discounted cash flow analysis Discount margins 2.83% - 4.45% (3.50%) Equity security (c) 32.0 Market approach Projected cash flows Not applicable Other assets categorized as Level 3 (d) 148.3 Unadjusted third-party price source Not applicable Not applicable Total 279.4 Liabilities: Future policy benefits (e) 1,057.1 Discounted projected embedded derivatives Projected portfolio yields 5.15% - 5.61% (5.42%) Discount rates 0.00 - 3.18% (1.94%) Surrender rates 1.67% - 46.56% (14.09%) ________________________________ (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 unobserva |
LIABILITIES FOR INSURANCE PRODU
LIABILITIES FOR INSURANCE PRODUCTS | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
LIABILITIES FOR INSURANCE PRODUCTS | LIABILITIES FOR INSURANCE PRODUCTS Our future policy benefits are summarized as follows (dollars in millions): Withdrawal assumption Morbidity assumption Mortality assumption Interest rate assumption 2016 2015 Long-term care Company experience Company experience Company experience 6% $ 5,346.1 $ 5,172.2 Traditional life insurance contracts Company experience Company experience (a) 5% 2,322.1 2,248.7 Accident and health contracts Company experience Company experience Company experience 5% 2,695.6 2,589.9 Interest-sensitive life insurance contracts Company experience Company experience Company experience 5% 52.2 44.7 Annuities and supplemental contracts with life contingencies Company experience Company experience (b) 4% 537.3 546.6 Total $ 10,953.3 $ 10,602.1 ____________________ (a) Principally, modifications of: (i) the 1965 ‑ 70 and 1975 - 80 Basic Tables; and (ii) the 1941, 1958 and 1980 Commissioners' Standard Ordinary Tables; as well as Company experience. (b) Principally, modifications of: (i) the 1971 Individual Annuity Mortality Table; (ii) the 1983 Table "A"; and (iii) the Annuity 2000 Mortality Table; as well as Company experience. Our policyholder account balances are summarized as follows (dollars in millions): 2016 2015 Fixed index annuities $ 5,324.5 $ 4,884.4 Other annuities 4,541.8 4,885.1 Interest-sensitive life insurance contracts 1,046.4 992.8 Total $ 10,912.7 $ 10,762.3 The Company establishes reserves for insurance policy benefits based on assumptions as to investment yields, mortality, morbidity, withdrawals, lapses and maintenance expenses. These reserves include amounts for estimated future payment of claims based on actuarial assumptions. The balance includes provision for the Company's best estimate of the future policyholder benefits to be incurred on this business, given recent and expected future changes in experience. Changes in the unpaid claims reserve (included in claims payable) and disabled life reserves related to accident and health insurance (included in the liability for future policy benefits) were as follows (dollars in millions): 2016 2015 2014 Balance, beginning of year $ 1,731.8 $ 1,679.5 $ 1,710.1 Less reinsurance receivables (130.0 ) (125.0 ) (164.1 ) Net balance, beginning of year 1,601.8 1,554.5 1,546.0 Incurred claims related to: Current year 1,526.4 1,481.0 1,468.1 Prior years (a) 96.6 (13.3 ) (39.9 ) Total incurred 1,623.0 1,467.7 1,428.2 Interest on claim reserves 75.3 71.0 70.5 Paid claims related to: Current year 837.2 841.8 848.7 Prior years 671.3 649.6 641.5 Total paid 1,508.5 1,491.4 1,490.2 Net balance, end of year 1,791.6 1,601.8 1,554.5 Add reinsurance receivables (payables) (14.0 ) 130.0 125.0 Balance, end of year $ 1,777.6 $ 1,731.8 $ 1,679.5 ___________ (a) The reserves and liabilities we establish are necessarily based on estimates, assumptions and prior years' statistics. Such amounts will fluctuate based upon the estimation procedures used to determine the amount of unpaid losses. It is possible that actual claims will exceed our reserves and have a material adverse effect on our results of operations and financial condition. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income tax expense (benefit) were as follows (dollars in millions): 2016 2015 2014 Current tax expense (benefit) $ (45.2 ) $ 10.7 $ 15.6 Deferred tax expense 173.0 118.6 143.6 Valuation allowance applicable to current year income (14.0 ) — — Income tax expense calculated based on estimated annual effective tax rate 113.8 129.3 159.2 Income tax expense on discrete items: Tax expense related to the sale of Conseco Life Insurance Company (a) — — 14.2 Change in valuation allowance 40.7 (32.5 ) (48.8 ) IRS settlement (170.4 ) — — Other items 10.9 .2 (.9 ) Total income tax expense (benefit) $ (5.0 ) $ 97.0 $ 123.7 _________________________ (a) Conseco Life Insurance Company ("CLIC") was a wholly owned subsidiary prior to its sale on July 1, 2014. A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows: 2016 2015 2014 U.S. statutory corporate rate 35.0 % 35.0 % 35.0 % Valuation allowance 7.6 (8.8 ) (27.9 ) Non-taxable income and nondeductible benefits, net (1.1 ) (.2 ) (.9 ) State taxes 2.2 2.1 1.5 Impact of IRS settlement (48.2 ) — — Impact of the sale of CLIC — — 66.3 Other items 3.1 (1.7 ) (3.4 ) Effective tax rate (1.4 )% 26.4 % 70.6 % The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): 2016 2015 Deferred tax assets: Net federal operating loss carryforwards $ 882.9 $ 916.3 Net state operating loss carryforwards 12.3 14.1 Tax credits .7 55.3 Capital loss carryforwards — 13.8 Investments 17.8 26.5 Insurance liabilities 668.4 600.3 Other 65.6 63.0 Gross deferred tax assets 1,647.7 1,689.3 Deferred tax liabilities: Present value of future profits and deferred acquisition costs (277.8 ) (305.4 ) Accumulated other comprehensive income (344.1 ) (223.8 ) Gross deferred tax liabilities (621.9 ) (529.2 ) Net deferred tax assets before valuation allowance 1,025.8 1,160.1 Valuation allowance (240.2 ) (213.5 ) Net deferred tax assets 785.6 946.6 Current income taxes prepaid (accrued) 4.1 (47.8 ) Income tax assets, net $ 789.7 $ 898.8 Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and NOLs. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income of the appropriate type during the periods in which our temporary differences become deductible and before our capital loss carryforwards and life and non-life NOLs expire. Based on our assessment, it appears more likely than not that $785.6 million of our total deferred tax assets of $1,025.8 million will be realized through future taxable earnings. Accordingly, we have established a deferred tax valuation allowance of $240.2 million at December 31, 2016 ( $230.2 million of which relates to our net federal operating loss carryforwards and $10.0 million relates to state operating loss carryforwards). 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 strategies, the impact of the sale or reinsurance of business and the recapture of business previously ceded. Our estimates of future taxable income are based on evidence we consider to be objective and verifiable. At December 31, 2016 , our projection of future taxable income for purposes of determining the valuation allowance is based on our adjusted average annual taxable income which is assumed to increase by 3 percent for the next five years, and level taxable income is assumed thereafter. In the projections used for our analysis, our adjusted average taxable income, adjusted for the reinsurance recapture, of approximately $335 million consisted of $85 million of non-life taxable income and $250 million of life taxable income. Based on our assessment, we recognized an increase to the allowance for deferred tax assets of $26.7 million in 2016 . We have evaluated the recovery of our deferred tax assets and assessed the effect of limitations and/or interpretations on their value and have concluded that it is more likely than not that the value recognized will be fully realized in the future. Changes in our valuation allowance are summarized as follows (dollars in millions): Balance, December 31, 2013 $ 294.8 Decrease in 2014 (48.8 ) (a) Balance, December 31, 2014 246.0 Decrease in 2015 (32.5 ) (b) Balance, December 31, 2015 213.5 Increase in 2016 26.7 (c) Balance, December 31, 2016 $ 240.2 ___________________ (a) The 2014 reduction to the deferred tax valuation allowance primarily resulted from tax examination adjustments and the tax gain on the sale of CLIC. (b) The 2015 reduction to the deferred tax valuation allowance primarily resulted from higher actual and projected non-life income. (c) The 2016 increase to the deferred tax valuation allowance primarily resulted from additional non-life NOLs due to the settlement with the Internal Revenue Service (the "IRS"). 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 NOLs 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 ( 1.68 percent at December 31, 2016 ), 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 December 31, 2016 , we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs. On January 20, 2009, the Company's Board of Directors adopted a Section 382 Rights Agreement designed to protect shareholder value by preserving the value of our tax assets primarily associated with tax NOLs under Section 382. The Section 382 Rights Agreement was adopted to reduce the likelihood of an ownership change occurring by deterring the acquisition of stock that would create " 5 percent shareholders" as defined in Section 382. On December 6, 2011, the Company's Board of Directors amended the Section 382 Rights Agreement to, among other things, (i) extend the final expiration date of the Amended Rights Agreement to December 6, 2014, (ii) update the purchase price of the rights described below, (iii) provide for a new series of preferred stock relating to the rights that is substantially identical to the prior series of preferred stock, (iv) provide for a 4.99 percent ownership threshold relating to any Company 382 Securities (as defined below), and amend other provisions to reflect best practices for tax benefit preservation plans, including updates to certain definitions. On November 13, 2014, the Company entered into the Second Amended and Restated Section 382 Rights Agreement which (as subsequently amended) extends the final expiration date of the Amended Section 382 Rights Agreement to November 13, 2017, updates the purchase price of the Rights and provides for a new series of preferred stock relating to the Rights that is substantially identical to the prior series of preferred stock. The Second Amended Rights Agreement was approved by the Company’s stockholders at the Company’s 2015 annual meeting. Under the Section 382 Rights Agreement, one right was distributed for each share of our common stock outstanding as of the close of business on January 30, 2009 and for each share issued after that date. Pursuant to the Amended Section 382 Rights Agreement, if any person or group (subject to certain exemptions) becomes an owner of more than 4.99 percent of the Company's outstanding common stock (or any other interest in the Company that would be treated as "stock" under applicable Section 382 regulations) without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the voting power and economic ownership of that person or group. Shareholders who held more than 4.99 percent of the Company's outstanding common stock as of December 6, 2011 will trigger a dilutive event only if they acquire additional shares exceeding one percent of our outstanding shares without prior approval from the Board of Directors. On May 11, 2010, our shareholders approved an amendment to CNO's certificate of incorporation designed to prevent certain transfers of common stock which could otherwise adversely affect our ability to use our NOLs (the "Original Section 382 Charter Amendment"). Subject to the provisions set forth in the Original Section 382 Charter Amendment, transfers of our common stock would be void and of no effect if the effect of the purported transfer would be to: (i) increase the direct or indirect ownership of our common stock by any person or public group (as such term is defined in the regulations under Section 382) from less than 5% to 5% or more of our common stock; (ii) increase the percentage of our common stock owned directly or indirectly by a person or public group owning or deemed to own 5% or more of our common stock; or (iii) create a new public group. On May 8, 2013, our shareholders approved an amendment (the “Extended Section 382 Charter Amendment”) to CNO’s certificate of incorporation to: (i) extend the term of the Original Section 382 Charter Amendment for three years until December 31, 2016, (ii) provide for a 4.99 percent ownership threshold relating to our stock, and (iii) amend certain other provisions of the Original Section 382 Charter Amendment, including updates to certain definitions, for consistency with the Amended Section 382 Rights Agreement. On May 4, 2016, our shareholders approved an amendment (the "2016 Section 382 Charter Amendment") to CNO's certificate of incorporation, which extended the expiration date for the Extended Section 382 Charter Amendment until July 31, 2019. The 2016 Section 382 Charter Amendment became effective on July 31, 2016. As of December 31, 2016 , we had $2.5 billion of federal NOLs (all of which were non-life NOLs). The following table summarizes the expiration dates of our loss carryforwards (dollars in millions): Net operating loss Year of expiration carryforwards 2023 $ 1,936.0 2025 85.2 2026 149.9 2027 10.8 2028 80.3 2029 213.2 2030 .3 2031 .2 2032 44.4 2033 .6 2034 1.7 Total federal NOLs $ 2,522.6 We also had deferred tax assets related to NOLs for state income taxes of $12.3 million and $14.1 million at December 31, 2016 and 2015 , respectively. The related state NOLs are available to offset future state taxable income in certain states through 2029. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2016 and 2015 is as follows (dollars in millions): Years ended December 31, 2016 2015 Balance at beginning of year $ 234.2 $ 228.7 Increase based on tax positions taken in prior years 3.4 5.5 Decrease in unrecognized tax benefits related to settlements with taxing authorities (237.6 ) — Balance at end of year $ — $ 234.2 As of December 31, 2016 and 2015 , nil and $155.4 million , respectively, of our unrecognized tax benefits, if recognized, would affect the effective tax rate. The remaining balances relate to timing differences which, if recognized, would have no effect on the Company's tax expense. The Company recognizes interest related to unrecognized tax benefits as income tax expense in the consolidated statement of operations. Such amounts were not significant in each of the three years ended December 31, 2016 . The liability for accrued interest was nil and $3.2 million at December 31, 2016 and 2015 , respectively. In the fourth quarter of 2016, we reached a settlement with the IRS related to two uncertain tax positions: (i) $280.7 million of life NOLs and $130.0 million of non-life NOLs related to the classification of the loss on our investment in Conseco Senior Health Insurance Company when it was transferred to an independent trust in 2008; and (ii) $66.7 million of non-life NOLs related to a bad debt deduction with respect to a stock purchase loan made by our Predecessor to a member of its board of directors. The settlement resulted in a reduction to tax expense of approximately $118.7 million in the fourth quarter of 2016 (the period in which these matters were settled and the fully executed documentation was received). The $118.7 million benefit includes: (i) a $98.2 million tax benefit related to additional life NOLs; (ii) a $17.1 million tax benefit related to additional non-life NOLs (net of an increase to the deferred tax valuation allowance of $51.7 million ); and (iii) a $3.4 million reduction in interest recognized in prior periods on alternative minimum tax that will no longer be required to be paid. The additional life NOLs related to the settlement offset our life taxable income in the third and fourth quarters of 2016 and the tax gain realized on the recapture of the ceded long-term care business from BRe. The settlement also reduced the amount of current income tax accrued at December 31, 2016 , as presented in the components of income tax assets and liabilities schedule provided in this note to consolidated financial statements by approximately $50 million . All of the additional life NOLs were utilized by December 31, 2016. Accordingly, we will begin making federal tax payments equal to the prescribed 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 65 percent of our life insurance company taxable income until all non-life NOLs are utilized or expire. The IRS is also conducting an examination of 2011 through 2014. In connection with this exam, we have agreed to extend the statute of limitations for 2011 through 2013 to September 30, 2018. The Company’s various state income tax returns are generally open for tax years beginning in 2013, based on individual state statutes of limitation. Generally, for tax years which generate NOLs, capital losses or tax credit carryforwards, the statute remains open until the expiration of the statute of limitations for the tax year in which such carryforwards are utilized. The outcome of tax audits cannot be predicted with certainty. If the Company’s tax audits are not resolved in a manner consistent with management’s expectations, the Company may be required to adjust its provision for income taxes. In accordance with GAAP, we are precluded from recognizing the tax benefits of any tax windfall upon the exercise of a stock option or the vesting of restricted stock unless such deduction resulted in actual cash savings to the Company. Because of the Company's NOLs, no cash savings have occurred. The value of NOL carryforwards of $15.7 million related to deductions for stock options and restricted stock would have been reflected in additional paid-in capital if realized. Effective January 1, 2017, the Company will adopt new authoritative guidance related to several aspects of the accounting for share-based payment transactions, including the income tax consequences. Under the new guidance, any excess tax benefits are recognized as an income tax benefit in the income statement. The new guidance is applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings for all tax benefits that were not previously recognized because the related tax deduction had not reduced taxes payable. Since a corresponding valuation allowance of $15.7 million will be recognized as a result of adopting this guidance, there will be no impact to our consolidated financial statements related to this provision of the new guidance. |
NOTES PAYABLE - DIRECT CORPORAT
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS The following notes payable were direct corporate obligations of the Company as of December 31, 2016 and 2015 (dollars in millions): 2016 2015 4.500% Senior Notes due May 2020 $ 325.0 $ 325.0 5.250% Senior Notes due May 2025 500.0 500.0 Revolving Credit Agreement (as defined below) 100.0 100.0 Unamortized debt issuance costs (12.1 ) (13.9 ) Direct corporate obligations $ 912.9 $ 911.1 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 Revolving Credit Agreement (as defined below): (i) to repay all amounts outstanding under our Previous Senior Secured Credit Agreement (as defined below); (ii) to redeem and satisfy and discharge all of the outstanding 6.375% Senior Secured Notes due October 2020 (the " 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 Revolving Credit Agreement were used for general corporate purposes, including share repurchases. The 2020 Notes mature on May 30, 2020, and the 2025 Notes mature on May 30, 2025. Interest on the 2020 Notes is payable at 4.500% per annum. Interest on the 2025 Notes is payable at 5.250% per annum. Interest on the Notes is 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 "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. Revolving Credit Agreement On May 19, 2015, the Company entered into the 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 Revolving Credit Agreement, resulting in $50.0 million available for additional borrowings. The Revolving Credit Agreement matures on May 19, 2019. The Revolving Credit Agreement includes an uncommitted subfacility for swingline loans of up to $5.0 million , and up to $5.0 million of the Revolving Credit Agreement is available for the issuance of letters of credit. The Company may incur additional incremental loans under the 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 Revolving Credit Agreement are 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 December 31, 2016 , the interest rate on the amounts outstanding under the Revolving Credit Agreement was 2.77 percent . In addition, the daily average undrawn portion of the Revolving Credit Agreement will accrue a commitment fee payable quarterly in arrears. The applicable margin for, and the commitment fee applicable to, the 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 Revolving Credit Agreement contains certain financial, affirmative and negative covenants. The negative covenants in the 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 Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio of not more than 30.0 percent (such ratio was 19.4 percent at December 31, 2016 ); (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 459 percent at December 31, 2016 ); 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 $3,864.5 million at December 31, 2016 compared to the minimum requirement of $2,680.8 million ). The 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 Revolving Credit Agreement; • change of control; and • customary ERISA defaults. If an event of default under the Revolving Credit Agreement occurs and is continuing, the Agent may accelerate the amounts and terminate all commitments outstanding under the Revolving Credit Agreement. Previous Senior Secured Credit Agreement 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. The Previous Senior Secured Credit Agreement consisted of: (i) a six -year term loan facility with $389.8 million outstanding prior to repayment; (ii) a four -year term loan facility with $112.5 million outstanding prior to repayment; and (iii) a $50.0 million three -year revolving credit facility that had no outstanding principal balance. 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. In 2015, we made $19.8 million of scheduled quarterly principal payments due under the Previous Senior Secured Credit Agreement. In 2014, we made $59.4 million of scheduled quarterly principal payments due under the Previous Senior Secured Credit Agreement. 6.375% Notes On September 28, 2012, we issued $275.0 million in aggregate principal amount of 6.375% Notes pursuant to an Indenture, dated as of September 28, 2012 (the " 6.375% Indenture"), among the Company, the subsidiary guarantors party thereto and the Trustee. 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% 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. 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 Loss on Extinguishment of Debt In 2015, we recognized a loss on extinguishment or modification 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. In 2014, we recognized a loss on extinguishment or modification of debt totaling $.6 million consisting of: (i) $.4 million of expenses related to the amendment of a previous senior secured credit agreement; and (ii) $.2 million related to the repurchase of the remaining $3.5 million principal amount of 7.0% Senior Debentures due 2016. Scheduled Repayment of our Direct Corporate Obligations The scheduled repayment of our direct corporate obligations was as follows at December 31, 2016 (dollars in millions): Year ending December 31, 2017 $ — 2018 — 2019 100.0 2020 325.0 2021 — Thereafter 500.0 $ 925.0 |
LITIGATION AND OTHER LEGAL PROC
LITIGATION AND OTHER LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2016 | |
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. On September 29, 2016, Washington National and BCLIC commenced an arbitration proceeding seeking compensatory, consequential and punitive damages against BRe based upon BRe’s incurable material breaches of the long-term care reinsurance agreements, conversion, fraud, and breaches of fiduciary duties and the obligation to deal honestly and in good faith. BRe filed a counterclaim against Washington National and BCLIC in the arbitration alleging damages relating to the reinsurance agreements and their termination. In addition, on September 29, 2016, a complaint was filed by BCLIC and Washington National in the United States District Court for the Southern District of New York, Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Moshe M. Feuer, Scott Taylor and David Levy, Case No. 16-cv-7646, alleging, among other claims, breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, fraudulent misrepresentation/fraudulent concealment, aiding and abetting a fraud, and violation of the Racketeer Influenced and Corrupt Organizations Act. These allegations relate to the long-term care reinsurance agreements between BRe and Washington National and BCLIC, respectively, and emanate from the undisclosed relationships between and among the defendants (who were the principal owners and officers of BRe) and Platinum Partners, LP and its affiliates. Washington National and BCLIC intend to vigorously pursue their claims for damages and other remedies in the arbitration and the litigation described above. On July 20, 2007, a complaint was filed in the Hamilton County, Indiana Circuit Court, Signature Estates of Indiana, Inc. d/b/a Gordon Marketing, Stephens-Matthews Marketing, Inc., Shields Brokerage, Inc. and Edwin A Hildebrand d/b/a Hildebrand Insurance Services v. Conseco Medical Insurance Company, Conseco Medical Insurance Company a/k/a Washington National Insurance Company and Washington National Insurance Company, Cause No. 29D02- 0707-PL-790. The Plaintiffs are independent insurance marketing organizations which previously marketed Conseco Medical Insurance Company (“CMIC”) individual major medical products and which are claiming damages for allegedly fraudulent conduct by CMIC in withdrawing from this business in 2002. The Plaintiffs contend that they relied on CMIC’s alleged representations that its major medical business was profitable and that CMIC was committed to it. The Plaintiffs further allege that when CMIC exited the market, it caused agents that were previously writing business through their organizations to cease doing business with them, thereby causing irreparable damage. CMIC merged into Washington National, effective July 1, 2003. On December 16, 2016, following a jury trial, verdicts were entered in favor of the plaintiffs, and compensatory damages aggregating $4.7 million and punitive damages aggregating $6.0 million were awarded to the plaintiffs. Washington National has filed post-trial motions requesting the court correct errors, grant a new trial, find that punitive damages were improper, and reduce both compensatory and punitive damages. Plaintiffs filed motions requesting pre-judgment interest and attorney fees. We believe the case is without merit and intend to defend it vigorously. Regulatory Examinations and Fines Insurance companies face significant risks related to regulatory investigations and actions. Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending unsuitable products to customers. We are, in the ordinary course of our business, subject to various examinations, inquiries and information requests from state, federal and other authorities. The ultimate outcome of these regulatory actions (including the costs of complying with information requests and policy reviews) cannot be predicted with certainty. In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of liabilities we have established and we could suffer significant reputational harm as a result of these matters, which could also have a material adverse effect on our business, financial condition, results of operations or cash flows. In August 2011, we were notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company and its subsidiaries. Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. We are continuing to provide information to the examiners in response to their requests. A total of 38 states and the District of Columbia are currently participating in this examination. Guaranty Fund Assessments The balance sheet at December 31, 2016 , included: (i) accruals of $24.9 million , representing our estimate of all known assessments that will be levied against the Company's insurance subsidiaries by various state guaranty associations based on premiums written through December 31, 2016 ; and (ii) receivables of $26.7 million that we estimate will be recovered through a reduction in future premium taxes as a result of such assessments. At December 31, 2015 , such guaranty fund assessment accruals were $24.0 million and such receivables were $26.1 million . These estimates are subject to change when the associations determine more precisely the losses that have occurred and how such losses will be allocated among the insurance companies. We recognized expense for such assessments of $2.8 million , $1.2 million and $1.1 million in 2016 , 2015 and 2014 , respectively. Guarantees In accordance with the terms of the employment agreements of two of the Company's former chief executive officers, certain wholly-owned subsidiaries of the Company are the guarantors of the former executives' nonqualified supplemental retirement benefits. The liability for such benefits was $25.0 million and $25.8 million at December 31, 2016 and 2015 , respectively, and is included in the caption "Other liabilities" in the consolidated balance sheet. Leases and Certain Other Long-Term Commitments The Company rents office space, equipment and computer software under noncancellable operating lease agreements. In addition, the Company has entered into certain sponsorship agreements which require future payments. Total expense pursuant to these lease and sponsorship agreements was $56.8 million , $48.8 million and $50.4 million in 2016 , 2015 and 2014 , respectively. Future required minimum payments as of December 31, 2016 , were as follows (dollars in millions): 2017 $ 32.0 2018 26.5 2019 13.2 2020 7.7 2021 5.0 Thereafter 5.9 Total $ 90.3 |
AGENT DEFERRED COMPENSATION PLA
AGENT DEFERRED COMPENSATION PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
AGENT DEFERRED COMPENSATION PLAN | AGENT DEFERRED COMPENSATION PLAN For our agent deferred compensation plan, it is our policy to immediately recognize changes in the actuarial benefit obligation resulting from either actual experience being different than expected or from changes in actuarial assumptions. One of our insurance subsidiaries has a noncontributory, unfunded deferred compensation plan for qualifying members of its career agency force. Benefits are based on years of service and career earnings. In 2016, the agent deferred compensation plan was amended to: (i) freeze participation in the plan; (ii) freeze benefits accrued under the plan; and (iii) add a limited cashout feature. During the third quarter of 2016, we made lump sum settlement distributions to plan participants with account balances that were below a certain threshold consistent with the provision of the amended plan. We recognized a pre-tax gain of $6.1 million related to the settlement distributions in the third quarter of 2016. The actuarial measurement date of this deferred compensation plan is December 31. The liability recognized in the consolidated balance sheet for the agent deferred compensation plan was $156.3 million and $170.8 million at December 31, 2016 and 2015 , respectively. Expenses incurred on this plan were $8.1 million , $2.2 million and $36.3 million during 2016 , 2015 and 2014 , respectively (including the recognition of gains (losses) of $3.1 million , $15.2 million and $(24.3) million in 2016 , 2015 and 2014 , respectively, primarily resulting from: (i) changes in the discount rate assumption used to determine the deferred compensation plan liability to reflect current investment yields; (ii) changes in mortality table assumptions; and (iii) the aforementioned settlement distributions in 2016). We purchased COLI as an investment vehicle to fund the agent deferred compensation plan. The COLI assets are not assets of the agent deferred compensation plan, and as a result, are accounted for outside the plan and are recorded in the consolidated balance sheet as other invested assets. The carrying value of the COLI assets was $165.0 million and $158.1 million at December 31, 2016 and 2015 , respectively. Changes in the cash surrender value (which approximates net realizable value) of the COLI assets are recorded as net investment income and totaled $6.9 million , $.5 million and $5.7 million in 2016 , 2015 and 2014 , respectively. We used the following assumptions for the deferred compensation plan to calculate: 2016 2015 Benefit obligations: Discount rate 4.25 % 4.50 % Net periodic cost: Discount rate 4.50 % 4.15 % The discount rate is based on the yield of a hypothetical portfolio of high quality debt instruments which could effectively settle plan benefits on a present value basis as of the measurement date. The benefits expected to be paid pursuant to our agent deferred compensation plan as of December 31, 2016 were as follows (dollars in millions): 2017 $ 7.0 2018 7.4 2019 7.5 2020 7.7 2021 7.9 2022 - 2026 43.1 The Company has a qualified defined contribution plan for which substantially all employees are eligible. Company contributions, which match a portion of certain voluntary employee contributions to the plan, totaled $5.3 million , $5.0 million and $5.1 million in 2016 , 2015 and 2014 , respectively. Employer matching contributions are discretionary. |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions): Fair value 2016 2015 Assets: Other invested assets: Fixed index call options $ 111.9 $ 41.0 Interest rate futures — .1 Reinsurance receivables (4.2 ) (5.0 ) Total assets $ 107.7 $ 36.1 Liabilities: Future policy benefits: Fixed index products $ 1,092.3 $ 1,057.1 Total liabilities $ 1,092.3 $ 1,057.1 The activity associated with freestanding derivative instruments is measured as either the notional or the number of contracts. The activity associated with the fixed index annuity embedded derivatives are shown by the number of policies. The following table represents activity associated with derivative instruments as of the dates indicated: Measurement December 31, 2015 Additions Maturities/terminations December 31, 2016 Interest futures Contracts 264 378 (642 ) — Fixed index annuities - embedded derivative Policies 96,660 11,237 (7,085 ) 100,812 Fixed index call options Notional (a) $ 2,379.7 $ 2,452.5 $ (2,377.1 ) $ 2,455.1 _________________ (a) Dollars in millions. 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 $135 million in underlying investments held by the ceding reinsurer. 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): 2016 2015 2014 Net investment income from policyholder and reinsurer accounts and other special-purpose portfolios: Fixed index call options $ 29.2 $ (36.2 ) $ 69.5 Embedded derivative related to reinsurance contract — — (1.4 ) Total 29.2 (36.2 ) 68.1 Net realized gains (losses): Interest rate futures (1.1 ) (2.7 ) (7.0 ) Embedded derivative related to modified coinsurance agreement .8 (7.0 ) 2.0 Total (.3 ) (9.7 ) (5.0 ) Insurance policy benefits: Embedded derivative related to fixed index annuities 60.8 36.3 (73.5 ) Total $ 89.7 $ (9.6 ) $ (10.4 ) 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 December 31, 2016 , all of our counterparties were rated "A-" or higher by S&P. From time to time, we enter into exchange-traded interest rate future contracts. The contracts 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. 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. There were no repurchase agreements outstanding at December 31, 2016 and 2015 . The following table summarizes information related to derivatives with master netting arrangements or collateral as of December 31, 2016 and 2015 (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 December 31, 2016: Fixed index call options $ 111.9 $ — $ 111.9 $ — $ — $ 111.9 Interest rate futures — — — — — — December 31, 2015: Fixed index call options 41.0 — 41.0 — — 41.0 Interest rate futures .1 1.5 1.6 — — 1.6 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Changes in the number of shares of common stock outstanding were as follows (shares in thousands): 2016 2015 2014 Balance, beginning of year 184,029 203,324 220,324 Treasury stock purchased and retired (11,688 ) (20,582 ) (18,489 ) Stock options exercised 978 769 916 Restricted and performance stock vested (a) 435 518 573 Balance, end of year 173,754 184,029 203,324 ____________________ (a) In 2016 , 2015 and 2014 , such amount was reduced by 191 thousand , 237 thousand and 257 thousand shares, respectively, which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock. In May 2011, the Company announced a securities repurchase program of up to $100.0 million . In February 2012, June 2012, December 2012, December 2013, November 2014 and November 2015, the Company's Board of Directors approved, in aggregate, an additional $1,600.0 million to repurchase the Company's outstanding securities. In 2016 , 2015 and 2014 , we repurchased 11.7 million , 20.6 million and 18.5 million shares, respectively, for $203.0 million , $365.2 million and $319.1 million , respectively, under the securities repurchase program. In addition, in September 2014, we repurchased all outstanding common stock warrants for $57.4 million under the securities repurchase program. The Company had remaining repurchase authority of $252.7 million as of December 31, 2016 . In 2016 , 2015 and 2014 , dividends declared and paid on common stock totaled $54.8 million ( $0.31 per common share), $52.0 million ( $0.27 per common share) and $51.0 million ( $0.24 per common share), respectively. In May 2016, the Company increased its quarterly common stock dividend to $0.08 per share from $0.07 per share. In May 2015, the Company increased its quarterly common stock dividend to $0.07 per share from $0.06 per share. The Company has a long-term incentive plan which permits the grant of CNO incentive or non-qualified stock options, restricted stock awards, stock appreciation rights, performance shares or units and certain other equity-based awards to certain directors, officers and employees of the Company and certain other individuals who perform services for the Company. As of December 31, 2016 , 4.6 million shares remained available for issuance under the plan. Our stock option awards are generally granted with an exercise price equal to the market price of the Company's stock on the date of grant and a maximum term of ten years. Our stock option awards granted in 2007 through 2009 generally vested on a graded basis over a three year service term and expired five years from the date of grant. Our stock options granted in 2010 through 2014 generally vest on a graded basis over a three year service term and expire seven years from the date of grant. Our stock options granted in 2015 and 2016 generally vest on a graded basis over a three year service term and expire ten years from the date of grant. The vesting periods for our restricted stock awards range from immediate vesting to a period of three years. A summary of the Company's stock option activity and related information for 2016 is presented below (shares in thousands; dollars in millions, except per share amounts): Shares Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding at the beginning of the year 5,199 $ 13.32 Options granted 1,706 17.45 Exercised (978 ) (8.70 ) $ 6.1 Forfeited or terminated (573 ) (20.41 ) Outstanding at the end of the year 5,354 14.73 5.9 $ 37.1 Options exercisable at the end of the year 2,187 2.7 $ 15.1 Available for future grant 4,620 A summary of the Company's stock option activity and related information for 2015 is presented below (shares in thousands; dollars in millions, except per share amounts): Shares Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding at the beginning of the year 5,011 $ 12.04 Options granted 1,361 16.45 Exercised (769 ) (8.20 ) $ 4.8 Forfeited or terminated (404 ) (17.70 ) Outstanding at the end of the year 5,199 13.32 4.8 $ 38.4 Options exercisable at the end of the year 2,399 2.5 $ 15.3 Available for future grant 6,882 A summary of the Company's stock option activity and related information for 2014 is presented below (shares in thousands; dollars in millions, except per share amounts): Shares Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding at the beginning of the year 5,579 $ 10.64 Options granted 1,014 19.10 Exercised (917 ) (5.47 ) $ 3.8 Forfeited or terminated (665 ) (20.07 ) Outstanding at the end of the year 5,011 12.04 4.3 $ 32.1 Options exercisable at the end of the year 2,030 2.7 $ 12.1 Available for future grant 8,571 We recognized compensation expense related to stock options totaling $12.2 million ( $7.9 million after income taxes) in 2016 , $9.6 million ( $6.2 million after income taxes) in 2015 and $7.9 million ( $5.1 million after income taxes) in 2014 . Compensation expense related to stock options reduced both basic and diluted earnings per share by four cent s in 2016 , three cent s in 2015 and two cent s in 2014 . At December 31, 2016 , the unrecognized compensation expense for non-vested stock options totaled $6.9 million which is expected to be recognized over a weighted average period of 1.4 years. Cash received by the Company from the exercise of stock options was $8.4 million , $6.3 million and $5.0 million during 2016 , 2015 and 2014 , respectively. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: 2016 2015 2014 Grants Grants Grants Weighted average risk-free interest rates 1.4 % 1.7 % 1.6 % Weighted average dividend yields 1.6 % 1.5 % 1.3 % Volatility factors 36 % 85 % 51 % Weighted average expected life (in years) 6.3 6.3 4.8 Weighted average fair value per share $ 5.48 $ 10.83 $ 7.65 The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the Company's history and expectation of dividend payouts. Volatility factors are based on the weekly historical volatility of the Company's common stock equal to the expected life of the option. The expected life is based on the average of the graded vesting period and the contractual terms of the option. The exercise price was equal to the market price of our stock on the date of grant for all options granted in 2016 , 2015 and 2014 . The following table summarizes information about stock options outstanding at December 31, 2016 (shares in thousands): Options outstanding Options exercisable Range of exercise prices Number outstanding Remaining life (in years) Average exercise price Number exercisable Average exercise price $6.45 - $7.51 922 1.6 $ 7.29 922 $ 7.29 $10.88 - $16.22 860 3.2 11.09 846 11.02 $16.42 - $19.15 3,572 7.7 17.52 419 19.08 5,354 2,187 During 2016 , 2015 and 2014 , the Company granted .4 million , .1 million and .1 million restricted shares, respectively, of CNO common stock to certain directors, officers and employees of the Company at a weighted average fair value of $18.17 per share, $17.59 per share and $17.15 per share, respectively. The fair value of such grants totaled $7.3 million , $1.7 million and $1.9 million in 2016 , 2015 and 2014 , respectively. Such amounts are recognized as compensation expense over the vesting period of the restricted stock. A summary of the Company's non-vested restricted stock activity for 2016 is presented below (shares in thousands): Shares Weighted average grant date fair value Non-vested shares, beginning of year 95 $ 15.66 Granted 401 18.17 Vested (126 ) 16.53 Forfeited (1 ) 16.80 Non-vested shares, end of year 369 18.10 At December 31, 2016 , the unrecognized compensation expense for non-vested restricted stock totaled $5.0 million which is expected to be recognized over a weighted average period of 2.3 years. At December 31, 2015 , the unrecognized compensation expense for non-vested restricted stock totaled $0.9 million . We recognized compensation expense related to restricted stock awards totaling $3.1 million , $2.2 million and $3.0 million in 2016 , 2015 and 2014 , respectively. The fair value of restricted stock that vested during 2016 , 2015 and 2014 was $2.1 million , $2.7 million and $3.7 million , respectively. Authoritative guidance also requires us to estimate the amount of unvested stock-based awards that will be forfeited in future periods and reduce the amount of compensation expense recognized over the applicable service period to reflect this estimate. We periodically evaluate our forfeiture assumptions to more accurately reflect our actual forfeiture experience. In 2016 , 2015 and 2014 the Company granted performance units totaling 507,976 , 516,660 and 283,630 , respectively, pursuant to its long-term incentive plan to certain officers of the Company. The criteria for payment for such awards are based on certain company-wide performance levels that must be achieved within a specified performance time (generally three years ), each as defined in the award. The performance units granted in 2016 and 2015 provide for a payout of up to 200 percent of the award if certain performance thresholds are achieved, and the performance units granted prior to 2015 provide for a payout of up to 150 percent of the award if certain performance thresholds are achieved. Unless antidilutive, the diluted weighted average shares outstanding would reflect the number of performance units expected to be issued, using the treasury stock method. A summary of the Company's performance units is presented below (shares in thousands): Total shareholder return awards Operating return on equity awards Pre-tax operating income awards Awards outstanding at December 31, 2013 382 204 470 Granted in 2014 142 142 — Additional shares issued pursuant to achieving certain performance criteria (a) — — 142 Shares vested in 2014 — — (434 ) Forfeited (5 ) (3 ) (2 ) Awards outstanding at December 31, 2014 519 343 176 Granted in 2015 258 258 — Additional shares issued pursuant to achieving certain performance criteria (a) 85 — 85 Shares vested in 2015 (260 ) — (260 ) Forfeited (53 ) (52 ) (1 ) Awards outstanding at December 31, 2015 549 549 — Granted in 2016 254 254 — Additional shares issued pursuant to achieving certain performance criteria (a) 87 65 — Shares vested in 2016 (261 ) (239 ) — Forfeited (59 ) (59 ) — Awards outstanding at December 31, 2016 570 570 — _________________________ (a) The performance units that vested in these years provided for a payout of up to 150 percent of the award if certain performance levels were achieved. The grant date fair value of the performance units awarded was $10.3 million and $9.4 million in 2016 and 2015 , respectively. We recognized compensation expense of $7.7 million , $5.3 million and $4.7 million in 2016 , 2015 and 2014 , respectively, related to the performance units. As further discussed in the footnote to the consolidated financial statements entitled "Income Taxes", the Company's Board of Directors adopted the Section 382 Rights Agreement on January 20, 2009 and amended and extended the Section 382 Rights Agreement on December 6, 2011 and November 13, 2014. The Section 382 Rights Agreement, as amended, is designed to protect shareholder value by preserving the value of our tax assets primarily associated with NOLs. At the time the Section 382 Rights Agreement was adopted, the Company declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock. The dividend was payable on January 30, 2009, to the shareholders of record as of the close of business on that date and a Right is also attached to each share of CNO common stock issued after that date. Pursuant to the Section 382 Rights Agreement, as amended, each Right entitles the shareholder to purchase from the Company one one-thousandth of a share of Series C Junior Participating Preferred Stock, par value $.01 per share (the "Junior Preferred Stock") of the Company at a price of $70.00 per one one-thousandth of a share of Junior Preferred Stock. The description and terms of the Rights are set forth in the Section 382 Rights Agreement, as amended. The Rights would become exercisable in the event any person or group (subject to certain exemptions) becomes an owner of more than 4.99 percent of the outstanding stock of CNO (a "Threshold Holder") without the approval of the Board of Directors or an existing shareholder who is currently a Threshold Holder acquires additional shares exceeding one percent of our outstanding shares without prior approval from the Board of Directors. A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands): 2016 2015 2014 Net income for diluted earnings per share $ 358.2 $ 270.7 $ 51.4 Shares: Weighted average shares outstanding for basic earnings per share 176,638 193,054 212,917 Effect of dilutive securities on weighted average shares: Stock options, restricted stock and performance units 1,685 2,112 2,505 Warrants (a) — — 2,233 Dilutive potential common shares 1,685 2,112 4,738 Weighted average shares outstanding for diluted earnings per share 178,323 195,166 217,655 ________ (a) All outstanding warrants were repurchased in September 2014 as further discussed above. Accordingly, the warrants have no dilutive effect in periods beginning after September 30, 2014. Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Restricted shares (including our performance units) are not included in basic earnings per share until vested. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options and warrants were exercised and restricted stock was vested. The dilution from options, warrants and restricted shares is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options and warrants (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options and warrants (or the vesting of the restricted stock and performance units). |
OTHER OPERATING STATEMENT DATA
OTHER OPERATING STATEMENT DATA | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
OTHER OPERATING STATEMENT DATA | OTHER OPERATING STATEMENT DATA Insurance policy income consisted of the following (dollars in millions): 2016 2015 2014 Direct premiums collected $ 3,942.7 $ 3,769.6 $ 3,856.2 Reinsurance assumed 33.8 38.4 34.5 Reinsurance ceded (132.9 ) (142.8 ) (187.9 ) Premiums collected, net of reinsurance 3,843.6 3,665.2 3,702.8 Change in unearned premiums 6.2 5.9 9.1 Less premiums on interest-sensitive life and products without mortality and morbidity risk which are recorded as additions to insurance liabilities (1,386.7 ) (1,241.9 ) (1,295.4 ) Premiums on traditional products with mortality or morbidity risk 2,463.1 2,429.2 2,416.5 Fees and surrender charges on interest-sensitive products 138.0 126.8 213.2 Insurance policy income $ 2,601.1 $ 2,556.0 $ 2,629.7 The four states with the largest shares of 2016 collected premiums were Florida ( 9 percent ), Pennsylvania ( 6 percent ), Texas ( 5 percent ) and California ( 5 percent ). No other state accounted for more than five percent of total collected premiums. Other operating costs and expenses were as follows (dollars in millions): 2016 2015 2014 Commission expense $ 110.5 $ 103.8 $ 99.4 Salaries and wages 231.0 205.2 242.4 Other 454.8 430.2 461.0 Total other operating costs and expenses $ 796.3 $ 739.2 $ 802.8 Changes in the present value of future profits were as follows (dollars in millions): 2016 2015 2014 Balance, beginning of year $ 449.0 $ 489.4 $ 679.3 Amortization (62.2 ) (69.1 ) (76.2 ) Effect of reinsurance transaction — — 5.0 Amounts related to CLIC prior to being sold — — (15.5 ) Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale 15.0 28.7 (103.2 ) Balance, end of year $ 401.8 $ 449.0 $ 489.4 Based on current conditions and assumptions as to future events on all policies inforce, the Company expects to amortize approximately 11 percent of the December 31, 2016 balance of the present value of future profits in 2017 , 10 percent in 2018 , 9 percent in 2019 , 8 percent in 2020 and 7 percent in 2021 . The discount rate used to determine the amortization of the present value of future profits averaged approximately 5 percent in the years ended December 31, 2016 , 2015 and 2014 . In accordance with authoritative guidance, we are required to amortize the present value of future profits in relation to estimated gross profits for interest-sensitive life products and annuity products. Such guidance also requires that estimates of expected gross profits used as a basis for amortization be evaluated regularly, and that the total amortization recorded to date be adjusted by a charge or credit to the statement of operations, if actual experience or other evidence suggests that earlier estimates should be revised. Changes in deferred acquisition costs were as follows (dollars in millions): 2016 2015 2014 Balance, beginning of year $ 1,083.3 $ 770.6 $ 968.1 Additions 242.7 246.4 242.8 Amortization (191.1 ) (190.9 ) (171.2 ) Effect of reinsurance transaction — — 24.0 Amounts related to CLIC prior to being sold — — (37.6 ) Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale (90.2 ) 257.2 (255.5 ) Balance, end of year $ 1,044.7 $ 1,083.3 $ 770.6 |
CONSOLIDATED STATEMENT CASH FLO
CONSOLIDATED STATEMENT CASH FLOWS | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
CONSOLIDATED STATEMENT OF CASH FLOWS | CONSOLIDATED STATEMENT OF CASH FLOWS The following disclosures supplement our consolidated statement of cash flows. The following reconciles net income to net cash provided by operating activities (dollars in millions): 2016 2015 2014 Cash flows from operating activities: Net income $ 358.2 $ 270.7 $ 51.4 Adjustments to reconcile net income to net cash from operating activities: Amortization and depreciation 275.0 283.4 274.2 Income taxes (11.7 ) 92.9 119.7 Insurance liabilities 332.8 297.4 398.2 Accrual and amortization of investment income (124.2 ) (27.6 ) (148.3 ) Deferral of policy acquisition costs (242.7 ) (246.4 ) (242.8 ) Net realized investment (gains) losses (8.3 ) 36.6 (36.7 ) Payment to reinsurer pursuant to long-term care business reinsured — — (590.3 ) Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses 75.4 9.0 239.8 Cash and cash equivalents received upon recapture of reinsurance 73.6 — — Loss on extinguishment or modification of debt — 32.8 .6 Other 31.4 (4.9 ) 56.0 Net cash from operating activities $ 759.5 $ 743.9 $ 121.8 (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. On July 1, 2014, Bankers Life recaptured the life business written by Bankers Life that was reinsured by Wilton Reassurance Company ("Wilton Re") in 2009. The following summarizes the impact of the recapture (dollars in millions): Investments $ 139.4 (a) (b) Cash 7.7 Present value of future profits and deferred acquisition costs 29.0 (b) Reinsurance receivables (155.9 ) (b) Other liabilities 5.9 (b) Gain on reinsurance transaction (classified as "Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses") 26.1 Income tax expense 9.2 Gain on reinsurance transaction (net of income taxes) $ 16.9 ___________________ (a) Such amount has been reduced by a $28.0 million recapture fee. (b) Such non-cash amounts have been excluded from the consolidated statement of cash flows. Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions): 2016 2015 2014 Stock options, restricted stock and performance units $ 23.0 $ 17.1 $ 15.6 Market value of investments recaptured in connection with the termination of reinsurance agreements with BRe 431.1 $ — $ — |
STATUTORY INFORMATION (BASED ON
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) | STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) Statutory accounting practices prescribed or permitted by regulatory authorities for the Company's insurance subsidiaries differ from GAAP. The Company's insurance subsidiaries reported the following amounts to regulatory agencies, after appropriate elimination of intercompany accounts among such subsidiaries (dollars in millions): 2016 2015 Statutory capital and surplus $ 1,956.8 $ 1,739.2 Asset valuation reserve 253.3 196.9 Interest maintenance reserve 486.9 476.0 Total $ 2,697.0 $ 2,412.1 Statutory capital and surplus included investments in upstream affiliates of $42.6 million at both December 31, 2016 and 2015 , which were eliminated in the consolidated financial statements prepared in accordance with GAAP. Statutory earnings build the capital required by ratings agencies and regulators. Statutory earnings, fees and interest paid by the insurance companies to the parent company create the "cash flow capacity" the parent company needs to meet its obligations, including debt service. The consolidated statutory net income (a non-GAAP measure) of our insurance subsidiaries was $256.6 million (including approximately $110 million loss on the recapture of long-term care business), $332.6 million and $364.3 million in 2016 , 2015 and 2014 , respectively. Included in such net income were net realized capital losses, net of income taxes, of $29.7 million , $18.0 million and $18.2 million in 2016 , 2015 and 2014 , respectively. In addition, such net income included pre-tax amounts for fees and interest paid to CNO or its non-life subsidiaries totaling $153.9 million , $154.2 million and $157.5 million in 2016 , 2015 and 2014 , respectively. Insurance regulators may prohibit the payment of dividends or other payments by our insurance subsidiaries to parent companies if they determine that such payment could be adverse to our policyholders or contract holders. Otherwise, the ability of our insurance subsidiaries to pay dividends is subject to state insurance department regulations. Insurance regulations generally permit dividends to be paid from statutory earned surplus of the insurance company without regulatory approval for any 12-month period in amounts equal to the greater of (or in some states, the lesser of): (i) statutory net gain from operations or statutory net income for the prior year; or (ii) 10 percent of statutory capital and surplus as of the end of the preceding year. However, as each of the immediate insurance subsidiaries of CDOC, Inc. ("CDOC", our wholly owned subsidiary and the immediate parent of Washington National and Conseco Life Insurance Company of Texas) has negative earned surplus, any dividend payments from the insurance subsidiaries to CNO requires the prior approval of the director or commissioner of the applicable state insurance department. During 2016 , our insurance subsidiaries paid dividends of $274.3 million to CDOC. As a result of the recapture of long-term care business from BRe, related charge and additional capital required to support the assets and liabilities of this business, CNO made $200.0 million of capital contributions to its insurance subsidiaries on September 30, 2016. The payment of interest on surplus debentures requires either prior written notice or approval of the director or commissioner of the applicable state insurance department. Dividends and other payments from our non-insurance subsidiaries to CNO or CDOC do not require approval by any regulatory authority or other third party. In accordance with an order from the Florida Office of Insurance Regulation, Washington National may not distribute funds to any affiliate or shareholder, except pursuant to agreements that have been approved, without prior notice to the Florida Office of Insurance Regulation. In addition, the risk-based capital ("RBC") and other capital requirements described below can also limit, in certain circumstances, the ability of our insurance subsidiaries to pay dividends. RBC requirements provide a tool for insurance regulators to determine the levels of statutory capital and surplus an insurer must maintain in relation to its insurance and investment risks and the need for possible regulatory attention. The RBC requirements provide four levels of regulatory attention, varying with the ratio of the insurance company's total adjusted capital (defined as the total of its statutory capital and surplus, asset valuation reserve and certain other adjustments) to its RBC (as measured on December 31 of each year) as follows: (i) if a company's total adjusted capital is less than 100 percent but greater than or equal to 75 percent of its RBC, the company must submit a comprehensive plan to the regulatory authority proposing corrective actions aimed at improving its capital position (the "Company Action Level"); (ii) if a company's total adjusted capital is less than 75 percent but greater than or equal to 50 percent of its RBC, the regulatory authority will perform a special examination of the company and issue an order specifying the corrective actions that must be taken; (iii) if a company's total adjusted capital is less than 50 percent but greater than or equal to 35 percent of its RBC, the regulatory authority may take any action it deems necessary, including placing the company under regulatory control; and (iv) if a company's total adjusted capital is less than 35 percent of its RBC, the regulatory authority must place the company under its control. In addition, the RBC requirements provide for a trend test if a company's total adjusted capital is between 100 percent and 150 percent of its RBC at the end of the year. The trend test calculates the greater of the decrease in the margin of total adjusted capital over RBC: (i) between the current year and the prior year; and (ii) for the average of the last 3 years. It assumes that such decrease could occur again in the coming year. Any company whose trended total adjusted capital is less than 95 percent of its RBC would trigger a requirement to submit a comprehensive plan as described above for the Company Action Level. The 2016 statutory annual statements of each of our insurance subsidiaries reflect total adjusted capital in excess of the levels subjecting the subsidiaries to any regulatory action. In addition, although we are under no obligation to do so, we may elect to contribute additional capital or retain greater amounts of capital to strengthen the surplus of certain insurance subsidiaries. Any election to contribute or retain additional capital could impact the amounts our insurance subsidiaries pay as dividends to the holding company. The ability of our insurance subsidiaries to pay dividends is also impacted by various criteria established by rating agencies to maintain or receive higher ratings and by the capital levels that we target for our insurance subsidiaries. At December 31, 2016 , the consolidated RBC ratio of our insurance subsidiaries exceeded the minimum RBC requirement included in our Revolving Credit Agreement. See the note to the consolidated financial statements entitled "Notes Payable - Direct Corporate Obligations" for further discussion of various financial ratios and balances we are required to maintain. We calculate the consolidated RBC ratio by assuming all of the assets, liabilities, capital and surplus and other aspects of the business of our insurance subsidiaries are combined together in one insurance subsidiary, with appropriate intercompany eliminations. |
SALE OF SUBSIDIARY
SALE OF SUBSIDIARY | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF SUBSIDIARY | SALE OF SUBSIDIARY On March 2, 2014, CNO entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Wilton Re, pursuant to which CNO agreed to sell to Wilton Re all of the issued and outstanding shares of CLIC. The transaction closed on July 1, 2014, after the receipt of insurance regulatory approvals and satisfaction of other customary closing conditions. After adjustments for transaction costs and post-closing adjustments, the transaction resulted in net cash proceeds of $224.9 million , including the impact of intercompany transactions completed in connection with the closing. In the first quarter of 2014, we recognized an estimated loss on the sale of CLIC of $298 million , net of income taxes. In the third and fourth quarters of 2014, we recognized a reduction to the loss on the sale of CLIC of $6 million and $2.9 million , respectively, to reflect the determination of the final sales price and net proceeds. The loss on the sale of CLIC in 2014 is summarized below (dollars in millions): Net cash proceeds $ 224.9 Net assets being sold: Investments 3,863.8 Cash and cash equivalents 164.7 Accrued investment income 42.7 Present value of future profits 15.5 Deferred acquisition costs 37.6 Reinsurance receivables 307.4 Income tax assets, net 84.4 Other assets 2.8 Liabilities for insurance products (3,201.3 ) Other liabilities (199.1 ) Investment borrowings (383.4 ) Accumulated other comprehensive income (240.5 ) Net assets being sold 494.6 Loss before taxes (269.7 ) Tax expense related to the sale 14.2 Valuation allowance release related to the tax on the sale (14.2 ) Valuation allowance increase related to the decrease in projected future taxable income 19.4 Net loss $ (289.1 ) Because the tax basis of CLIC is lower than the net cash proceeds, the transaction generated a taxable gain and estimated tax expense of $14.2 million . Fully offsetting the tax is $14.2 million of a valuation allowance release pertaining to NOLs which may now be utilized. However, the disposition of CLIC is expected to result in a net reduction to CNO's taxable income in future periods which also required us to establish a valuation allowance of $19.4 million . In connection with the closing of the transaction, CNO Services, LLC ("CNO Services"), an indirect wholly owned subsidiary of CNO, entered into a transition services agreement and a special support services agreement with Wilton Re, pursuant to which CNO Services makes available to Wilton Re and its affiliates, for a limited period of time, certain services required for the operation of CLIC's business following the closing. Under such agreements, we received $30 million in the year ending June 30, 2015 and $20 million in the year ending June 30, 2016. In addition, certain services will continue to be provided in the three years ending June 30, 2019 for an annual fee of $.2 million . The costs of the services provided to Wilton Re are expected to approximate the fees received under the agreements. The Stock Purchase Agreement also provided that, at the closing, Bankers Life recapture the life insurance business written by Bankers Life that was reinsured by Wilton Re. The recapture agreement was conditioned on the concurrent consummation of the closing. On July 1, 2014, Bankers Life paid $28.0 million to recapture the life insurance business from Wilton Re and recognized a gain (net of income taxes) of $16.9 million in the third quarter of 2014 as a result of the recapture. Refer to the note to the consolidated financial statements entitled "Consolidated Statement of Cash Flows" for additional information. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2016 | |
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. In the fourth quarter of 2016, we began reporting the long-term care block recaptured from BRe as an additional business segment. We measure segment performance by excluding the loss on the sale of a subsidiary, gain (loss) on reinsurance transactions and transition expenses, 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 and amendment 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 loss on the sale of CLIC, gain (loss) on reinsurance transactions and transition expenses, 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 and amendment 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): 2016 2015 2014 Revenues: Bankers Life: Insurance policy income: Annuities $ 22.0 $ 22.4 $ 26.0 Health 1,244.1 1,251.0 1,287.1 Life 393.0 375.3 338.6 Net investment income (a) 936.8 884.7 957.3 Fee revenue and other income (a) 34.4 27.7 29.3 Total Bankers Life revenues 2,630.3 2,561.1 2,638.3 Washington National: Insurance policy income: Annuities 2.9 3.0 4.0 Health 627.9 615.4 597.6 Life 25.0 25.4 24.4 Net investment income (a) 259.3 253.6 276.1 Fee revenue and other income (a) 1.3 1.3 1.1 Total Washington National revenues 916.4 898.7 903.2 Colonial Penn: Insurance policy income: Health 2.6 3.0 3.6 Life 278.8 260.5 242.4 Net investment income (a) 44.2 43.0 41.7 Fee revenue and other income (a) 1.1 1.0 1.0 Total Colonial Penn revenues 326.7 307.5 288.7 Long-term care in run-off: Insurance policy income - health 4.8 — — Net investment income (a) 9.4 — — Total Long-term care in run-off revenues 14.2 — — Corporate operations: Net investment income 16.6 11.3 14.9 Fee revenue and other income 10.0 8.6 6.7 Total corporate revenues 26.6 19.9 21.6 Total revenues 3,914.2 3,787.2 3,851.8 (continued on next page) (continued from previous page) 2016 2015 2014 Expenses: Bankers Life: Insurance policy benefits $ 1,620.6 $ 1,588.4 $ 1,667.6 Amortization 176.5 187.1 174.7 Interest expense on investment borrowings 13.2 8.8 7.9 Other operating costs and expenses 422.1 407.2 401.2 Total Bankers Life expenses 2,232.4 2,191.5 2,251.4 Washington National: Insurance policy benefits 561.7 546.6 536.2 Amortization 59.1 55.2 64.6 Interest expense on investment borrowings 3.7 2.0 1.7 Other operating costs and expenses 189.0 183.4 189.5 Total Washington National expenses 813.5 787.2 792.0 Colonial Penn: Insurance policy benefits 201.9 189.0 173.2 Amortization 15.3 14.4 15.3 Interest expense on investment borrowings .6 .1 — Other operating costs and expenses 107.2 98.4 99.4 Total Colonial Penn expenses 325.0 301.9 287.9 Long-term care in run-off: Insurance policy benefits 17.6 — — Other operating costs and expenses .5 — — Total Long-term care in run-off expenses 18.1 — — Corporate operations: Interest expense on corporate debt 45.8 45.0 43.9 Interest expense on investment borrowings — .2 .1 Other operating costs and expenses 69.1 38.6 49.1 Total corporate expenses 114.9 83.8 93.1 Total expenses 3,503.9 3,364.4 3,424.4 Pre-tax operating earnings by segment: Bankers Life 397.9 369.6 386.9 Washington National 102.9 111.5 111.2 Colonial Penn 1.7 5.6 .8 Long-term care in run-off (3.9 ) — — Corporate operations (88.3 ) (63.9 ) (71.5 ) Pre-tax operating earnings $ 410.3 $ 422.8 $ 427.4 ___________________ (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 is as follows (dollars in millions): 2016 2015 2014 Total segment revenues $ 3,914.2 $ 3,787.2 $ 3,851.8 Net realized investment gains (losses) 8.3 (36.6 ) 33.9 Revenues related to certain non-strategic investments and earnings attributable to VIEs 52.6 36.3 33.2 Fee revenue related to transition and support services agreements 10.0 25.0 15.0 Revenues of CLIC prior to being sold — — 210.8 Consolidated revenues 3,985.1 3,811.9 4,144.7 Total segment expenses 3,503.9 3,364.4 3,424.4 Insurance policy benefits - fair value changes in embedded derivative liabilities (11.3 ) (15.7 ) 48.5 Amortization related to fair value changes in embedded derivative liabilities 1.7 3.8 (12.5 ) Amortization related to net realized investment gains (losses) .7 (.5 ) 1.0 Expenses related to certain non-strategic investments and expenses (earnings) attributable to VIEs 54.6 43.0 41.2 Fair value changes and amendment related to agent deferred compensation plan (3.1 ) (15.1 ) 26.8 Loss on extinguishment or modification of debt — 32.8 .6 Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses 75.4 9.0 239.8 Expenses related to transition and support services agreements 10.0 22.5 12.4 Expenses of CLIC prior to being sold — — 187.4 Consolidated expenses 3,631.9 3,444.2 3,969.6 Income before tax 353.2 367.7 175.1 Income tax expense: Tax expense on period income 127.8 129.5 159.2 Valuation allowance for deferred tax assets and other tax items (132.8 ) (32.5 ) (35.5 ) Net income $ 358.2 $ 270.7 $ 51.4 Segment balance sheet information was as follows (dollars in millions): 2016 2015 Assets: Bankers Life $ 19,876.4 $ 19,067.8 Washington National 7,555.7 7,948.5 Colonial Penn 1,022.9 985.4 Long-term care in run-off 656.2 — Corporate operations 2,864.0 3,123.4 Total assets $ 31,975.2 $ 31,125.1 Liabilities: Bankers Life $ 17,144.9 $ 16,612.0 Washington National 6,096.9 6,665.1 Colonial Penn 898.5 869.3 Long-term care in run-off 562.2 — Corporate operations 2,785.8 2,840.2 Total liabilities $ 27,488.3 $ 26,986.6 The following table presents selected financial information of our segments (dollars in millions): Segment Present value of future profits Deferred acquisition costs Insurance liabilities 2016 Bankers Life $ 95.5 $ 646.2 $ 15,702.8 Washington National 266.8 299.9 5,586.7 Colonial Penn 39.5 98.6 809.6 Long-term care in run-off — — 554.7 Total $ 401.8 $ 1,044.7 $ 22,653.8 2015 Bankers Life $ 114.9 $ 718.2 $ 15,234.1 Washington National 290.2 280.0 6,126.2 Colonial Penn 43.9 85.1 782.9 Total $ 449.0 $ 1,083.3 $ 22,143.2 |
QUARTERLY FINANCIAL DATA (UNAU
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) We compute earnings per common share for each quarter independently of earnings per share for the year. The sum of the quarterly earnings per share may not equal the earnings per share for the year because of: (i) transactions affecting the weighted average number of shares outstanding in each quarter; and (ii) the uneven distribution of earnings during the year. Quarterly financial data (unaudited) were as follows (dollars in millions, except per share data): 2016 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Revenues $ 960.4 $ 1,003.9 $ 1,015.9 $ 1,004.9 Income before income taxes $ 40.5 $ 82.7 $ 49.3 $ 180.7 Income tax expense (benefit) (5.0 ) 22.8 30.7 (53.5 ) Net income $ 45.5 $ 59.9 $ 18.6 $ 234.2 Earnings per common share: Basic: Net income $ .25 $ .34 $ .11 $ 1.35 Diluted: Net income $ .25 $ .33 $ .11 $ 1.34 2015 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Revenues $ 978.3 $ 959.5 $ 904.5 $ 969.6 Income before income taxes $ 82.3 $ 72.7 $ 52.4 $ 160.3 Income tax expense 29.5 25.9 18.6 23.0 Net income $ 52.8 $ 46.8 $ 33.8 $ 137.3 Earnings per common share: Basic: Net income $ .26 $ .24 $ .18 $ .74 Diluted: Net income $ .26 $ .24 $ .18 $ .73 |
INVESTMENTS IN VARIABLE INTERES
INVESTMENTS IN VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [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. 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. During 2016 and 2015 , VIEs that were required to be consolidated were dissolved. We recognized a loss of $7.3 million during 2016 and a gain of $11.3 million during 2015 , representing the difference between the borrowings of such VIEs and the contractual distributions required following the liquidation of the underlying assets. The scheduled repayment of the remaining principal balance of the borrowings related to the VIEs are as follows: $16.8 million in 2017; $.7 million in 2018; $.8 million in 2019; $.2 million in 2020; $150.2 million in 2022; $381.8 million in 2024; $326.9 million in 2026; $276.3 million in 2027; and $539.9 million in 2028. 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 (dollars in millions): December 31, 2016 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,724.3 $ — $ 1,724.3 Notes receivable of VIEs held by insurance subsidiaries — (204.2 ) (204.2 ) Cash and cash equivalents held by variable interest entities 189.3 — 189.3 Accrued investment income 3.0 (.1 ) 2.9 Income tax assets, net 6.4 (1.3 ) 5.1 Other assets 13.1 (1.8 ) 11.3 Total assets $ 1,936.1 $ (207.4 ) $ 1,728.7 Liabilities: Other liabilities $ 81.8 $ (6.4 ) $ 75.4 Borrowings related to variable interest entities 1,662.8 — 1,662.8 Notes payable of VIEs held by insurance subsidiaries 203.3 (203.3 ) — Total liabilities $ 1,947.9 $ (209.7 ) $ 1,738.2 December 31, 2015 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,633.6 $ — $ 1,633.6 Notes receivable of VIEs held by insurance subsidiaries — (204.3 ) (204.3 ) Cash and cash equivalents held by variable interest entities 364.4 — 364.4 Accrued investment income 3.3 — 3.3 Income tax assets, net 26.0 (1.9 ) 24.1 Other assets 1.4 (1.5 ) (.1 ) Total assets $ 2,028.7 $ (207.7 ) $ 1,821.0 Liabilities: Other liabilities $ 196.6 $ (7.2 ) $ 189.4 Borrowings related to variable interest entities 1,676.4 — 1,676.4 Notes payable of VIEs held by insurance subsidiaries 204.0 (204.0 ) — Total liabilities $ 2,077.0 $ (211.2 ) $ 1,865.8 The following table provides supplemental information about the revenues and expenses of the VIEs which have been consolidated in accordance with authoritative guidance, after giving effect to the elimination of our investment in the VIEs and investment management fees earned by a subsidiary of the Company (dollars in millions): 2016 2015 2014 Revenues: Net investment income – policyholder and reinsurer accounts and other special-purpose portfolios $ 78.9 $ 62.1 $ 47.2 Fee revenue and other income 6.4 1.6 1.1 Total revenues 85.3 63.7 48.3 Expenses: Interest expense 53.1 38.8 30.1 Other operating expenses 1.5 2.0 1.2 Total expenses 54.6 40.8 31.3 Income before net realized investment losses and income taxes 30.7 22.9 17.0 Net realized investment losses (20.4 ) (6.4 ) (2.2 ) Income before income taxes $ 10.3 $ 16.5 $ 14.8 The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. At December 31, 2016 , such loans had an amortized cost of $1,708.6 million ; gross unrealized gains of $19.5 million ; gross unrealized losses of $3.8 million ; and an estimated fair value of $1,724.3 million . The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at December 31, 2016 , 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 $ 20.5 $ 20.0 Due after one year through five years 846.5 853.1 Due after five years through ten years 841.6 851.2 Total $ 1,708.6 $ 1,724.3 The following table sets forth the amortized cost and estimated fair value of those investments held by the VIEs with unrealized losses at December 31, 2016 , 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 $ 10.5 $ 9.9 Due after one year through five years 175.2 172.5 Due after five years through ten years 55.8 55.3 Total $ 241.5 $ 237.7 During 2016 , the VIEs recognized net realized investment losses of $20.4 million , which were comprised of: (i) $11.9 million of net losses from the sales of fixed maturities; (ii) a $7.3 million loss on the dissolution of a VIE; and (iii) $1.2 million of writedowns of investments for other than temporary declines in fair value recognized through net income. During 2015 , the VIEs recognized net realized investment losses of $6.4 million which were comprised of: (i) $1.3 million of net losses from the sales of fixed maturities; (ii) an $11.3 million gain on the dissolution of a VIE; and (iii) $16.4 million of writedowns of investments for other than temporary declines in fair value recognized through net income. During 2014 , the VIEs recognized net realized investment losses of $2.2 million from the sales of fixed maturities. At December 31, 2016 , there were no investments held by the VIEs that were in default. During 2016 , $192.2 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $20.3 million . During 2015 , $46.1 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $1.8 million . During 2014 , $38.7 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $2.4 million . At December 31, 2016 , the VIEs held: (i) investments with a fair value of $93.8 million and gross unrealized losses of $.9 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $143.9 million and gross unrealized losses of $2.9 million that had been in an unrealized loss position for greater than twelve months. At December 31, 2015 , the VIEs held: (i) investments with a fair value of $1,178.7 million and gross unrealized losses of $23.9 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $294.3 million and gross unrealized losses of $22.3 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. |
SCHEDULE II
SCHEDULE II | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Financial Information of Registrant (Parent Company) | SCHEDULE II Condensed Financial Information of Registrant (Parent Company) Balance Sheet as of December 31, 2016 and 2015 (Dollars in millions) ASSETS 2016 2015 Fixed maturities, available for sale, at fair value (amortized cost: 2016 - $-; 2015 - $5.0) $ — $ 5.0 Cash and cash equivalents - unrestricted 106.1 128.9 Equity securities at fair value (cost: 2016 - $166.5; 2015 - $247.3) 167.9 254.9 Trading securities — 1.0 Investment in wholly-owned subsidiaries (eliminated in consolidation) 5,220.3 4,809.2 Income tax assets, net 99.5 58.5 Receivable from subsidiaries (eliminated in consolidation) 2.0 3.8 Other assets 1.8 3.1 Total assets $ 5,597.6 $ 5,264.4 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Notes payable $ 912.9 $ 911.1 Payable to subsidiaries (eliminated in consolidation) 128.4 135.9 Other liabilities 69.4 78.9 Total liabilities 1,110.7 1,125.9 Commitments and Contingencies Shareholders' equity: Common stock and additional paid-in capital ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2016 - 173,753,614; 2015 - 184,028,511) 3,213.8 3,388.6 Accumulated other comprehensive income 622.4 402.8 Retained earnings 650.7 347.1 Total shareholders' equity 4,486.9 4,138.5 Total liabilities and shareholders' equity $ 5,597.6 $ 5,264.4 The accompanying notes are an integral part of the condensed financial statements. CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES SCHEDULE II Condensed Financial Information of Registrant (Parent Company) Statement of Operations for the years ended December 31, 2016 , 2015 and 2014 (Dollars in millions) 2016 2015 2014 Revenues: Net investment income $ 15.6 $ 16.9 $ 12.7 Net realized investment gains 17.7 3.5 11.1 Intercompany losses (eliminated in consolidation) — (1.5 ) (1.0 ) Total revenues 33.3 18.9 22.8 Expenses: Interest expense 45.8 45.2 44.0 Intercompany expenses (eliminated in consolidation) .9 .4 .3 Operating costs and expenses 48.2 21.0 66.6 Loss on extinguishment of debt — 32.8 .6 Total expenses 94.9 99.4 111.5 Loss before income taxes and equity in undistributed earnings of subsidiaries (61.6 ) (80.5 ) (88.7 ) Income tax benefit on period income (54.6 ) (37.9 ) (34.1 ) Loss before equity in undistributed earnings of subsidiaries (7.0 ) (42.6 ) (54.6 ) Equity in undistributed earnings of subsidiaries (eliminated in consolidation) 365.2 313.3 106.0 Net income $ 358.2 $ 270.7 $ 51.4 The accompanying notes are an integral part of the condensed financial statements. CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES SCHEDULE II Condensed Financial Information of Registrant (Parent Company) Statement of Cash Flows for the years ended December 31, 2016 , 2015 and 2014 (Dollars in millions) 2016 2015 2014 Cash flows from operating activities $ (114.0 ) $ (55.1 ) $ (66.7 ) Cash flows from investing activities: Sales of investments 305.0 66.5 229.8 Sales of investments - affiliated* — 16.0 18.3 Maturities and redemptions of investments - affiliated* — 8.3 — Purchases of investments (198.4 ) (68.6 ) (320.1 ) Purchases of investments - affiliated* — (3.4 ) (30.7 ) Net sales of trading securities 12.0 11.8 9.9 Dividends received from consolidated subsidiary, net of capital contributions of $200.0 in 2016, nil in 2015 and $18.8 in 2014* 92.5 269.7 423.5 Net cash provided by investing activities 211.1 300.3 330.7 Cash flows from financing activities: Issuance of notes payable, net — 910.0 — Payments on notes payable — (797.1 ) (62.9 ) Expenses related to extinguishment or modification of debt — (17.8 ) (.6 ) Issuance of common stock 8.4 6.3 5.0 Payments to repurchase common stock and warrants (206.7 ) (361.5 ) (376.5 ) Common stock dividends paid (54.8 ) (52.0 ) (51.0 ) Investment borrowings - repurchase agreements, net — (20.4 ) 20.4 Issuance of notes payable to affiliates* 217.1 234.4 257.8 Payments on notes payable to affiliates* (83.9 ) (104.8 ) (100.7 ) Net cash used by financing activities (119.9 ) (202.9 ) (308.5 ) Net increase (decrease) in cash and cash equivalents (22.8 ) 42.3 (44.5 ) Cash and cash equivalents, beginning of the year 128.9 86.6 131.1 Cash and cash equivalents, end of the year $ 106.1 $ 128.9 $ 86.6 * Eliminated in consolidation The accompanying notes are an integral part of the condensed financial statements. CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES SCHEDULE II Notes to Condensed Financial Information 1. Basis of Presentation The condensed financial information should be read in conjunction with the consolidated financial statements of CNO Financial Group, Inc. The condensed financial information includes the accounts and activity of the parent company. |
SCHEDULE IV
SCHEDULE IV | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
Reinsurance | SCHEDULE IV Reinsurance for the years ended December 31, 2016 , 2015 and 2014 (Dollars in millions) 2016 2015 2014 Life insurance inforce: Direct $ 27,048.1 $ 25,807.0 $ 25,029.0 Assumed 128.7 137.4 147.1 Ceded (3,604.0 ) (3,780.8 ) (3,660.1 ) Net insurance inforce $ 23,572.8 $ 22,163.6 $ 21,516.0 Percentage of assumed to net .5 % .6 % .7 % 2016 2015 2014 Insurance policy income: Direct $ 2,553.0 $ 2,524.3 $ 2,558.2 Assumed 34.0 38.5 35.0 Ceded (123.9 ) (133.6 ) (176.7 ) Net premiums $ 2,463.1 $ 2,429.2 $ 2,416.5 Percentage of assumed to net 1.4 % 1.6 % 1.4 % |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
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; long-term care in run off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. In the fourth quarter of 2016, we began reporting as an additional business segment, the long-term care block recaptured from Beechwood Re Ltd. ("BRe"), as further described in the note to the consolidated financial statements entitled "Summary of Significant Accounting Policies - Reinsurance". The Company’s insurance segments are described below: • Bankers Life, which markets and distributes Medicare supplement insurance, interest-sensitive life insurance, traditional life insurance, fixed annuities and long-term care insurance products to the middle-income senior market through a dedicated field force of career agents, financial and investment advisors, and sales managers supported by a network of community-based sales offices. The Bankers Life segment includes primarily the business of Bankers Life and Casualty Company ("Bankers Life"). Bankers Life also has various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute Medicare Advantage and prescription drug plan products in exchange for a fee. • Washington National, which markets and distributes supplemental health (including specified disease, accident and hospital indemnity insurance products) and life insurance to middle-income consumers at home and at the worksite. These products are marketed through Performance Matters Associates, Inc. and through independent marketing organizations and insurance agencies including worksite marketing. The products being marketed are underwritten by Washington National Insurance Company ("Washington National"). This segment's business also includes certain closed blocks of annuities and Medicare supplement policies which are no longer being actively marketed by this segment and were primarily issued or acquired by Washington National. • Colonial Penn , which markets primarily graded benefit and simplified issue life insurance directly to customers in the senior middle-income market through television advertising, direct mail, the internet and telemarketing. The Colonial Penn segment includes primarily the business of Colonial Penn Life Insurance Company ("Colonial Penn"). • Long-term care in run-off consists of the long-term care business that was recaptured due to the termination of certain reinsurance agreements effective September 30, 2016. This business is not actively marketed and was issued or acquired by Washington National and Bankers Conseco Life Insurance Company ("BCLIC") |
Basis of Accounting | We prepare our financial statements 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 2016 presentation. These reclassifications have no effect on net income or shareholders' equity. |
Consolidation | 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. |
Use of Estimates | 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. |
Investments | Investments Fixed maturity securities include available for sale bonds and redeemable preferred stocks. We carry these investments at estimated fair value. We record any unrealized gain or loss, net of tax and related adjustments, as a component of shareholders’ equity. Equity securities include available for sale investments in common stock, exchange-traded funds and non-redeemable preferred stock. We carry these investments at estimated fair value. We record any unrealized gain or loss, net of tax and related adjustments, as a component of shareholders' equity. Mortgage loans held in our investment portfolio are carried at amortized unpaid balances, net of provisions for estimated losses. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Payment terms specified for mortgage loans may include a prepayment penalty for unscheduled payoff of the investment. Prepayment penalties are recognized as investment income when received. Policy loans are stated at current unpaid principal balances. Policy loans are collateralized by the cash surrender value of the life insurance policy. Interest income is recorded as earned using the contractual interest rate. Trading securities include: (i) investments purchased with the intent of selling in the near team 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. Other invested assets include: (i) call options purchased in an effort to offset or hedge the effects of certain policyholder benefits related to our fixed index annuity and life insurance products; (ii) Company-owned life insurance ("COLI"); and (iii) certain non-traditional investments. We carry the call options at estimated fair value as further described in the section of this note entitled "Accounting for Derivatives". We carry COLI at its cash surrender value which approximates its net realizable value. Non-traditional investments include investments in certain limited partnerships and hedge funds which are accounted for using the equity method; and promissory notes, which are accounted for using the cost method. In accounting for limited partnerships and hedge funds, we consistently use the most recently available financial information provided by the general partner or manager of each of these investments, which is one to three months prior to the end of our reporting period. Interest income on fixed maturity securities is recognized when earned using a constant effective yield method giving effect to amortization of premiums and accretion of discounts. Prepayment fees are recognized when earned. Dividends on equity securities are recognized when declared. When we sell a security (other than trading securities), we report the difference between the sale proceeds and amortized cost (determined based on specific identification) as a realized investment gain or loss. We regularly evaluate our investments for possible impairment as further described in the note to the consolidated financial statements entitled "Investments". When a security defaults (including mortgage loans) or securities are other-than-temporarily impaired, our policy is to discontinue the accrual of interest and eliminate all previous interest accruals, if we determine that such amounts will not be ultimately realized in full. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include commercial paper, invested cash and other investments purchased with original maturities of less than three months. We carry them at amortized cost, which approximates estimated fair value. |
Deferred Acquisition Costs | Deferred Acquisition Costs Deferred acquisition costs represent incremental direct costs related to the successful acquisition of new or renewal insurance contracts. For interest-sensitive life or annuity products, we amortize these costs in relation to the estimated gross profits using the interest rate credited to the underlying policies. For other products, we amortize these costs in relation to future anticipated premium revenue using the projected investment earnings rate. When we realize a gain or loss on investments backing our interest-sensitive life or annuity products, we adjust the amortization to reflect the change in estimated gross profits from the products due to the gain or loss realized and the effect on future investment yields. We also adjust deferred acquisition costs for the change in amortization that would have been recorded if our fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. We limit the total adjustment related to the impact of unrealized losses to the total of costs capitalized plus interest related to insurance policies issued in a particular year. We include the impact of this adjustment in accumulated other comprehensive income (loss) within shareholders' equity. We regularly evaluate the recoverability of the unamortized balance of the deferred acquisition costs. We consider estimated future gross profits or future premiums, expected mortality or morbidity, interest earned and credited rates, persistency and expenses in determining whether the balance is recoverable. If we determine a portion of the unamortized balance is not recoverable, it is charged to amortization expense. In certain cases, the unamortized balance of the deferred acquisition costs may not be deficient in the aggregate, but our estimates of future earnings indicate that profits would be recognized in early periods and losses in later periods. In this case, we increase the amortization of the deferred acquisition costs over the period of profits, by an amount necessary to offset losses that are expected to be recognized in the later years. |
Present Value of Future Profits | Present Value of Future Profits The present value of future profits is the value assigned to the right to receive future cash flows from policyholder insurance contracts existing at September 10, 2003 (the "Effective Date", the effective date of the bankruptcy reorganization of Conseco, Inc., an Indiana corporation (our "Predecessor")). The discount rate we used to determine the present value of future profits was 12 percent . The balance of this account is amortized and evaluated for recovery in the same manner as described above for deferred acquisition costs. We also adjust the present value of future profits for the change in amortization that would have been recorded if the fixed maturity securities, available for sale, had been sold at their stated aggregate fair value and the proceeds reinvested at current yields, similar to the manner described above for deferred acquisition costs. We limit the total adjustment related to the impact of unrealized losses to the total present value of future profits plus interest. |
Assets Held in Separate Accounts | Assets Held in Separate Accounts Separate accounts are funds on which investment income and gains or losses accrue directly to certain policyholders. The assets of these accounts are legally segregated. They are not subject to the claims that may arise out of any other business of CNO. We report separate account assets at fair value; the underlying investment risks are assumed by the contractholders. We record the related liabilities at amounts equal to the separate account assets. We record the fees earned for administrative and contractholder services performed for the separate accounts in insurance policy income. |
Recognition of Insurance Policy Income and Related Benefits and Expenses on Insurance Contracts | Recognition of Insurance Policy Income and Related Benefits and Expenses on Insurance Contracts For interest-sensitive life and annuity contracts that do not involve significant mortality or morbidity risk, the amounts collected from policyholders are considered deposits and are not included in revenue. Revenues for these contracts consist of charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders' account balances. Such revenues are recognized when the service or coverage is provided, or when the policy is surrendered. We establish liabilities for annuity and interest-sensitive life products equal to the accumulated policy account values, which include an accumulation of deposit payments plus credited interest, less withdrawals and the amounts assessed against the policyholder through the end of the period. In addition, policyholder account values for certain interest-sensitive life products are impacted by our assumptions related to changes of certain non-guaranteed elements that we are allowed to make under the terms of the policy, such as cost of insurance charges, expense loads, credited interest rates and policyholder bonuses. Sales inducements provided to the policyholders of these products are recognized as liabilities over the period that the contract must remain in force to qualify for the inducement. The options attributed to the policyholder related to our fixed index annuity products are accounted for as embedded derivatives as described in the section of this note entitled "Accounting for Derivatives". Premiums from individual life products (other than interest-sensitive life contracts) and health products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. We establish liabilities for traditional life, accident and health insurance, and life contingent payment annuity products using mortality tables in general use in the United States, which are modified to reflect the Company's actual experience when appropriate. We establish liabilities for accident and health insurance products using morbidity tables based on the Company's actual or expected experience. These reserves are computed at amounts that, with additions from estimated future premiums received and with interest on such reserves at estimated future rates, are expected to be sufficient to meet our obligations under the terms of the policy. Liabilities for future policy benefits are computed on a net-level premium method based upon assumptions as to future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses determined when the policies were issued (or with respect to policies inforce at August 31, 2003, the Company's best estimate of such assumptions on the Effective Date). We make an additional provision to allow for potential adverse deviation for some of our assumptions. Once established, assumptions on these products are generally not changed unless a premium deficiency exists. In that case, a premium deficiency reserve is recognized and the future pattern of reserve changes is modified to reflect the relationship of premiums to benefits based on the current best estimate of future claim costs, investment yields, mortality, morbidity, withdrawals, policy dividends and maintenance expenses, determined without an additional provision for potential adverse deviation. We establish claim reserves based on our estimate of the loss to be incurred on reported claims plus estimates of incurred but unreported claims based on our past experience. |
Accounting for Long-term Care Premium Rate Increases | Accounting for Long-term Care Premium Rate Increases Many of our long-term care policies have been subject to premium rate increases. In some cases, these premium rate increases were materially consistent with the assumptions we used to value the particular block of business at the Effective Date. With respect to certain premium rate increases, some of our policyholders were provided an option to cease paying their premiums and receive a non-forfeiture option in the form of a paid-up policy with limited benefits. In addition, our policyholders could choose to reduce their coverage amounts and premiums in the same proportion, when permitted by our contracts or as required by regulators. The following describes how we account for these policyholder options: • Premium rate increases - If premium rate increases reflect a change in our previous rate increase assumptions, the new assumptions are not reflected prospectively in our reserves. Instead, the additional premium revenue resulting from the rate increase is recognized as earned and original assumptions continue to be used to determine changes to liabilities for insurance products unless a premium deficiency exists. • Benefit reductions - A policyholder may choose reduced coverage with a proportionate reduction in premium, when permitted by our contracts. This option does not require additional underwriting. Benefit reductions are treated as a partial lapse of coverage, and the balance of our reserves and deferred insurance acquisition costs is reduced in proportion to the reduced coverage. • Non-forfeiture benefits offered in conjunction with a rate increase - In some cases, non-forfeiture benefits are offered to policyholders who wish to lapse their policies at the time of a significant rate increase. In these cases, exercise of this option is treated as an extinguishment of the original contract and issuance of a new contract. The balance of our reserves and deferred insurance acquisition costs are released, and a reserve for the new contract is established. Some of our policyholders may receive a non-forfeiture benefit if they cease paying their premiums pursuant to their original contract (or pursuant to changes made to their original contract as a result of a litigation settlement made prior to the Effective Date or an order issued by the Florida Office of Insurance Regulation). In these cases, exercise of this option is treated as the exercise of a policy benefit, and the reserve for premium paying benefits is reduced, and the reserve for the non-forfeiture benefit is adjusted to reflect the election of this benefit. |
Accounting for Certain Marketing and Reinsurance Agreements | Accounting for Certain Marketing Agreements Bankers Life has entered into various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute prescription drug and Medicare Advantage plans. These agreements allow Bankers Life to offer these products to current and potential future policyholders without investment in management and infrastructure. We receive fee income related to the plans sold through our distribution channels. We account for these distribution agreements as follows: • We recognize distribution income based on either: (i) a fixed fee per contract sold; or (ii) a percentage of premiums collected. This fee income is recognized over the calendar year term of the contract. • We also pay commissions to our agents who sell the plans. These payments are deferred and amortized over the term of the contract. Reinsurance In the normal course of business, we seek to limit our loss exposure on any single insured or to certain groups of policies by ceding reinsurance to other insurance enterprises. We currently retain no more than $.8 million of mortality risk on any one policy. We diversify the risk of reinsurance loss by using a number of reinsurers that have strong claims-paying ratings. In each case, the ceding CNO subsidiary is directly liable for claims reinsured in the event the assuming company is unable to pay. The cost of reinsurance ceded totaled $123.9 million , $133.6 million and $176.7 million in 2016 , 2015 and 2014 , respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $130.1 million , $167.7 million and $195.3 million in 2016 , 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 $34.0 million , $38.5 million and $35.0 million in 2016 , 2015 and 2014 , respectively. In December 2013, two of our insurance subsidiaries entered into 100% coinsurance agreements ceding $495 million of long-term care reserves to BRe. Pursuant to the agreements, the insurance subsidiaries paid an additional premium of $96.9 million to BRe and an amount equal to the related net liabilities. The insurance subsidiaries' ceded reserve credits were secured by assets in market-value trusts subject to a 7% over-collateralization, investment guidelines and periodic true-up provisions. Future payments into the trusts to maintain collateral requirements were the responsibility of BRe. In September 2016, we terminated the reinsurance agreements with BRe and recaptured the ceded business. As a result of the recapture, we were required to value the assets and liabilities as of the date of recapture based on valuation methodologies that are consistent with the methodologies used by CNO to value its other investments and insurance liabilities. Accordingly, we recognized a loss on the recapture of the long-term care business as summarized below (dollars in millions): Market value of investments $ 504.7 Insurance liabilities (552.2 ) Write-off of reinsurance receivables (17.9 ) Estimated transaction expenses (10.0 ) Pre-tax loss (75.4 ) Tax benefit 26.4 Increase in valuation allowance for deferred tax assets (4.1 ) After-tax loss $ (53.1 ) 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 . As further described in the note to the financial statements entitled "Sale of Subsidiary", we recaptured a block of life insurance business in 2014 that was previously ceded under a coinsurance agreement. |
Income Taxes | Income Taxes Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and net operating loss carryforwards ("NOLs"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred 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. At December 31, 2016 , our valuation allowance for our net deferred tax assets was $240.2 million , as we have determined that it is more likely than not that a portion of our deferred tax assets will not be realized. This determination was made by evaluating each component of the deferred tax assets and assessing the effects of limitations and/or interpretations on the value of such component to be fully recognized in the future. |
Investments in Variable Interest Entities | Investments in Variable Interest Entities We have concluded that we are the primary beneficiary with respect to certain variable interest entities ("VIEs"), which are consolidated in our financial statements. 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. The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. Refer to the note to the consolidated financial statements entitled "Investments in Variable Interest Entities" for additional information about VIEs. 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. |
Investment borrowings | Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet. |
Accounting for Derivatives | Accounting for Derivatives Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period. Typically, on each policy anniversary date, a new index period begins. We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums. 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. From time to time, we utilize United States Treasury interest rate futures primarily to hedge interest rate risk related to anticipated mortgage loan transactions. In periods prior to the second quarter of 2014, we were required to establish an embedded derivative related to a modified coinsurance agreement which ceded the risks of a block of interest sensitive life business. We recaptured this block in the second quarter of 2014 resulting in a gain of $3.8 million . Prior to the recapture of this block, we maintained the investments related to the modified coinsurance agreement in our trading securities account, which we carried at estimated fair value with changes in such value recognized as investment income. Such trading securities were sold in the second quarter of 2014 in conjunction with the reinsurance recapture. We purchase certain fixed maturity securities that contain embedded derivatives that are required to be 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. |
Multibucket Annuity Products | Multibucket Annuity Products The Company's multibucket annuity is an annuity product that credits interest based on the experience of a particular market strategy. Policyholders allocate their annuity premium payments to several different market strategies based on different asset classes within the Company's investment portfolio. Interest is credited to this product based on the market return of the given strategy, less management fees, and funds may be moved between different strategies. The Company guarantees a minimum return of premium plus approximately 3 percent per annum over the life of the contract. The investments backing the market strategies of these products are designated by the Company as trading securities. The change in the fair value of these securities is recognized as investment income (classified as income from policyholder and reinsurer accounts and other special-purpose portfolios), which is substantially offset by the change in insurance policy benefits for these products. |
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. |
Out-of-Period Adjustments | Out-of-Period Adjustments In 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 decreased our net income 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. |
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. In March 2016, the FASB issued amendments that clarify the implementation guidance on principal versus agent considerations. In July 2015, the guidance was updated and will now be effective for the Company on January 1, 2018 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 January 2016, the FASB issued authoritative guidance related to the recognition and measurement of financial assets and financial liabilities which made targeted improvements to GAAP as follows: (i) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. (ii) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. (iii) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. (iv) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. (v) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. (vi) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. (vii) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. An entity should apply this guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption of the guidance. The guidance will be effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption of the guidance is not permitted; except that item (v) above is permitted to be adopted early as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact the guidance will have upon adoption. In February 2016, the FASB issued authoritative guidance related to accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of future lease payments, and a corresponding asset, adjusted for certain items, is also recorded. Expense recognition for lessees will remain similar to current accounting requirements for capital and operating leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact the guidance will have upon adoption. In March 2016, the FASB issued authoritative guidance that clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under this guidance is required to assess the embedded call (put) options solely in accordance with a four-step decision sequence. The guidance will be effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. The Company is currently assessing the impact the guidance will have upon adoption. In March 2016, the FASB issued authoritative guidance related to several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The new guidance requires all income tax effects of stock-based compensation awards to be recognized in the income statement when the awards vest or are settled. The new guidance also allows an employer to withhold shares upon settlement of an award to satisfy the employer's tax withholding requirements up to the highest marginal tax rate applicable to employees, without resulting in liability classification of the award. Current guidance strictly limits the withholding to the employer's minimum statutory tax withholding requirement. The guidance will be effective for the Company for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Transition guidance varies between retrospective, modified retrospective and prospective depending on the specific change required. Early adoption is permitted. The adoption of this guidance will not have a material impact on our consolidated financial statements. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The guidance will be effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing the impact the guidance will have upon adoption. In August 2016, the FASB issued authoritative guidance related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, and others. The guidance will be effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact the guidance will have upon adoption. In October 2016, the FASB issued authoritative guidance to amend the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The guidance will be effective for the Company for fiscal years beginning after December 15, 2016, including interim periods within those years. The adoption of this guidance will not have a material impact on our consolidated financial statements. In November 2016, the FASB issued authoritative guidance to address the diversity in practice that currently exists regarding the classification and presentation of changes in restricted cash on the statement of cash flows. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Entities will also be required to disclose information about the nature of their restricted cash and restricted cash equivalents. Additionally, if cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item in the statement of financial position, entities will be required to present a reconciliation, either on the face of the statement of cash flows or disclosed in the notes, of the totals in the statement of cash flows to the related line item captions in the statement of financial position. The guidance will be effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is expected to impact the presentation of our consolidated statement of cash flows and related cash flow disclosures. The guidance will not impact our consolidated financial position or results of operations. Adopted Accounting Standards 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, with early adoption permitted. The Company adopted this guidance in the fourth quarter of 2015. 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 was 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 adoption of this guidance had no effect on our consolidated financial statements. In May 2015, the FASB issued authoritative guidance that removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. A reporting entity should apply the guidance retrospectively to all periods presented. The Company elected to early adopt this guidance as of December 31, 2015, and has removed certain investments that are measured using the net asset value per share practical expedient from the fair value hierarchy in all periods presented in our consolidated financial statements. 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 was 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 adoption of this guidance had no impact on our consolidated financial statements. 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 was 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 adoption of this guidance did not have a material impact on our consolidated financial statements. |
Fair Value Measurements | 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. 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. 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, separate account assets and embedded derivatives. We carry our COLI, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, 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 cash equivalents 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 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 2016 and 2015 . 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 typically 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 45 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. 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. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of loss recapture of long-term care business | Accordingly, we recognized a loss on the recapture of the long-term care business as summarized below (dollars in millions): Market value of investments $ 504.7 Insurance liabilities (552.2 ) Write-off of reinsurance receivables (17.9 ) Estimated transaction expenses (10.0 ) Pre-tax loss (75.4 ) Tax benefit 26.4 Increase in valuation allowance for deferred tax assets (4.1 ) After-tax loss $ (53.1 ) |
Schedule of terms of federal home loan bank borrowing | The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions): Amount Maturity Interest rate at borrowed date December 31, 2016 $ 50.0 January 2018 Variable rate – 1.226% 50.0 January 2018 Variable rate – 1.222% 50.0 February 2018 Variable rate – 1.191% 50.0 February 2018 Variable rate – 1.001% 22.0 February 2018 Variable rate – 1.267% 100.0 May 2018 Variable rate – 1.206% 50.0 July 2018 Variable rate – 1.360% 50.0 August 2018 Variable rate – 1.022% 10.0 December 2018 Variable rate – 1.266% 50.0 January 2019 Variable rate – 1.300% 50.0 February 2019 Variable rate – 1.001% 100.0 March 2019 Variable rate – 1.216% 21.8 July 2019 Variable rate – 1.234% 15.0 October 2019 Variable rate – 1.399% 50.0 May 2020 Variable rate – 1.224% 21.8 June 2020 Fixed rate – 1.960% 25.0 September 2020 Variable rate – 1.622% 100.0 September 2020 Variable rate – 1.416% 50.0 September 2020 Variable rate – 1.416% 75.0 September 2020 Variable rate – 1.118% 100.0 October 2020 Variable rate – 1.109% 50.0 December 2020 Variable rate – 1.335% 100.0 July 2021 Variable rate – 1.431% 57.7 July 2021 Variable rate – 1.411% 100.0 August 2021 Variable rate – 1.400% 28.2 August 2021 Fixed rate – 2.550% 125.0 August 2021 Variable rate – 1.236% 50.0 September 2021 Variable rate – 1.477% 25.4 March 2023 Fixed rate – 2.160% 20.5 June 2025 Fixed rate – 2.940% $ 1,647.4 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of fixed maturities for available for sale and equity securities | At December 31, 2016 , the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other-than-temporary impairments included in accumulated other comprehensive income Investment grade (a): Corporate securities $ 11,582.6 $ 1,073.9 $ (99.8 ) $ 12,556.7 $ — United States Treasury securities and obligations of United States government corporations and agencies 143.8 20.5 — 164.3 — States and political subdivisions 1,798.2 186.7 (7.9 ) 1,977.0 — Debt securities issued by foreign governments 37.1 .2 (.4 ) 36.9 — Asset-backed securities 1,169.6 29.2 (8.7 ) 1,190.1 — Collateralized debt obligations 227.5 1.0 (.3 ) 228.2 — Commercial mortgage-backed securities 1,467.2 32.9 (26.6 ) 1,473.5 — Mortgage pass-through securities 2.3 .2 — 2.5 — Collateralized mortgage obligations 304.8 14.6 (.2 ) 319.2 — Total investment grade fixed maturities, available for sale 16,733.1 1,359.2 (143.9 ) 17,948.4 — Below-investment grade (a) (b): Corporate securities 967.3 26.1 (39.2 ) 954.2 (3.6 ) States and political subdivisions 13.6 — (1.7 ) 11.9 (3.0 ) Asset-backed securities 1,471.9 55.1 (6.8 ) 1,520.2 — Collateralized debt obligations 2.5 — — 2.5 — Commercial mortgage-backed securities 63.8 .2 (1.3 ) 62.7 — Collateralized mortgage obligations 550.9 46.8 (1.4 ) 596.3 (1.4 ) Total below-investment grade fixed maturities, available for sale 3,070.0 128.2 (50.4 ) 3,147.8 (8.0 ) Total fixed maturities, available for sale $ 19,803.1 $ 1,487.4 $ (194.3 ) $ 21,096.2 $ (8.0 ) Equity securities $ 580.7 $ 11.5 $ (8.0 ) $ 584.2 _______________ (a) Investment ratings – Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's Investor Services, Inc. ("Moody's"), S&P Global Ratings ("S&P") or Fitch Ratings ("Fitch")), or if not rated by such firms, the rating assigned by the National Association of Insurance Commissioners (the "NAIC"). NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. (b) Certain structured securities rated below-investment grade by NRSROs may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the NAIC. Refer to the table below for a summary of our fixed maturity securities, available for sale, by NAIC designations. |
Schedule of NAIC designations and NRSRO equivalent ratings | The following summarizes the NAIC designations and NRSRO equivalent ratings: NAIC Designation NRSRO Equivalent Rating 1 AAA/AA/A 2 BBB 3 BB 4 B 5 CCC and lower 6 In or near default |
Summary of fixed maturity securities available for sale | A summary of our fixed maturity securities, available for sale, by NAIC designations (or for fixed maturity securities held by non-regulated entities, based on NRSRO ratings) as of December 31, 2016 is as follows (dollars in millions): NAIC designation Amortized cost Estimated fair value Percentage of total estimated fair value 1 $ 9,715.7 $ 10,463.2 49.6 % 2 8,973.1 9,526.4 45.2 Total NAIC 1 and 2 (investment grade) 18,688.8 19,989.6 94.8 3 711.7 705.4 3.3 4 233.0 229.4 1.1 5 141.3 138.3 .6 6 28.3 33.5 .2 Total NAIC 3,4,5 and 6 (below-investment grade) 1,114.3 1,106.6 5.2 $ 19,803.1 $ 21,096.2 100.0 % |
Schedule of fixed maturities for available for sale and equity securities | At December 31, 2015 , the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other-than-temporary impairments included in accumulated other comprehensive income Investment grade: Corporate securities $ 11,477.5 $ 929.4 $ (262.9 ) $ 12,144.0 $ — United States Treasury securities and obligations of United States government corporations and agencies 172.5 22.3 (.3 ) 194.5 — States and political subdivisions 1,889.6 208.6 (3.7 ) 2,094.5 — Debt securities issued by foreign governments 18.9 — (.6 ) 18.3 — Asset-backed securities 979.8 22.1 (7.2 ) 994.7 — Collateralized debt obligations 188.5 .4 (2.2 ) 186.7 — Commercial mortgage-backed securities 1,531.7 41.3 (16.3 ) 1,556.7 — Mortgage pass-through securities 3.1 .3 — 3.4 — Collateralized mortgage obligations 450.9 17.0 (.6 ) 467.3 — Total investment grade fixed maturities, available for sale 16,712.5 1,241.4 (293.8 ) 17,660.1 — Below-investment grade: Corporate securities 798.5 8.3 (82.3 ) 724.5 — States and political subdivisions 13.6 — (3.9 ) 9.7 (3.0 ) Debt securities issued by foreign governments 2.4 — — 2.4 — Asset-backed securities 838.0 25.7 (6.2 ) 857.5 — Commercial mortgage-backed securities 49.9 — (1.3 ) 48.6 — Collateralized mortgage obligations 532.1 49.0 (1.0 ) 580.1 (1.9 ) Total below-investment grade fixed maturities, available for sale 2,234.5 83.0 (94.7 ) 2,222.8 (4.9 ) Total fixed maturities, available for sale $ 18,947.0 $ 1,324.4 $ (388.5 ) $ 19,882.9 $ (4.9 ) Equity securities $ 447.4 $ 18.4 $ (2.8 ) $ 463.0 |
Schedule of accumulated other comprehensive income (loss) | Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments. These amounts, included in shareholders' equity as of December 31, 2016 and 2015 , were as follows (dollars in millions): 2016 2015 Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized $ (1.1 ) $ 1.6 Net unrealized gains on all other investments 1,311.9 903.4 Adjustment to present value of future profits (a) (106.2 ) (121.2 ) Adjustment to deferred acquisition costs (223.5 ) (133.3 ) Adjustment to insurance liabilities (13.5 ) (14.6 ) Unrecognized net loss related to deferred compensation plan — (8.6 ) Deferred income tax liabilities (345.2 ) (224.5 ) Accumulated other comprehensive income $ 622.4 $ 402.8 ________ (a) The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date our Predecessor emerged from bankruptcy. |
Schedule of investments classified by contractual maturity date | The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2016 , by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities (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 $ 354.7 $ 359.8 Due after one year through five years 2,243.8 2,399.5 Due after five years through ten years 1,549.1 1,620.8 Due after ten years 10,395.0 11,320.9 Subtotal 14,542.6 15,701.0 Structured securities 5,260.5 5,395.2 Total fixed maturities, available for sale $ 19,803.1 $ 21,096.2 |
Schedule of investment income | Net investment income consisted of the following (dollars in millions): 2016 2015 2014 General account assets: Fixed maturities $ 1,081.4 $ 1,090.1 $ 1,175.8 Equity securities 21.5 18.3 13.9 Mortgage loans 91.0 91.4 104.2 Policy loans 7.3 7.3 11.0 Other invested assets 24.3 17.4 17.1 Cash and cash equivalents 2.0 .8 .6 Policyholder and reinsurer accounts and other special-purpose portfolios: Trading securities (a) 12.2 10.7 14.8 Options related to fixed index products: Option income (loss) (40.1 ) 36.5 118.9 Change in value of options 69.3 (72.7 ) (49.4 ) Other special-purpose portfolios 79.7 55.5 42.1 Gross investment income 1,348.6 1,255.3 1,449.0 Less investment expenses 23.4 21.7 21.6 Net investment income $ 1,325.2 $ 1,233.6 $ 1,427.4 _________________ (a) Changes in the estimated fair value for trading securities still held as of the end of the respective years and included in net investment income were $(.2) million , $.4 million and $3.4 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
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): 2016 2015 2014 Fixed maturity securities, available for sale: Gross realized gains on sale $ 137.7 $ 95.7 $ 64.4 Gross realized losses on sale (95.2 ) (88.4 ) (13.0 ) Impairments: Total other-than-temporary impairment losses (15.2 ) (17.9 ) — Other-than-temporary impairment losses recognized in accumulated other comprehensive income 3.6 3.0 — Net impairment losses recognized (11.6 ) (14.9 ) — Net realized investment gains (losses) from fixed maturities 30.9 (7.6 ) 51.4 Equity securities 20.9 3.7 10.1 Commercial mortgage loans — (2.3 ) (.1 ) Impairments on preferred stock and other investments (20.7 ) (25.0 ) (27.3 ) Gain (loss) on dissolution of variable interest entities (7.3 ) 11.3 — Other (a) (15.5 ) (16.7 ) 2.6 Net realized investment gains (losses) $ 8.3 $ (36.6 ) $ 36.7 _________________ (a) Changes in the estimated fair value of trading securities that we have elected the fair value option (and still held as of the end of the respective periods) were $(.5) million , $(9.2) million and $7.8 million for the years ended December 31, 2016 , 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 years ended December 31, 2016 , 2015 and 2014 (dollars in millions): Year ended December 31, 2016 2015 2014 Credit losses on fixed maturity securities, available for sale, beginning of period $ (2.6 ) $ (1.0 ) $ (1.3 ) Add: credit losses on other-than-temporary impairments not previously recognized (3.0 ) (2.0 ) — Less: credit losses on securities sold .1 .4 .3 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 $ (5.5 ) $ (2.6 ) $ (1.0 ) __________ (a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis. |
Schedule of investments with unrealized losses classified by contractual maturity date | The following table sets forth the amortized cost and estimated fair value of those fixed maturities, available for sale, with unrealized losses at December 31, 2016 , by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities frequently include provisions for periodic principal payments and permit periodic unscheduled payments. Amortized cost Estimated fair value (Dollars in millions) Due in one year or less $ 35.7 $ 35.0 Due after one year through five years 150.4 145.9 Due after five years through ten years 389.3 370.9 Due after ten years 2,262.3 2,136.9 Subtotal 2,837.7 2,688.7 Structured securities 1,857.2 1,811.9 Total $ 4,694.9 $ 4,500.6 |
Schedule of investments in our portfolio rated below-investment grade which have been continuously in an unrealized loss position | The following summarizes the investments in our portfolio rated below-investment grade which have been continuously in an unrealized loss position exceeding 20 percent of the cost basis for the period indicated as of December 31, 2016 (dollars in millions): Number Cost Unrealized Estimated Less than 6 months 4 $ 53.8 $ (12.1 ) $ 41.7 Greater than 12 months 1 .7 (.2 ) .5 $ 54.5 $ (12.3 ) $ 42.2 The following summarizes the investments sold at a loss during 2016 which had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis prior to the sale for the period indicated (dollars in millions): At date of sale Number Amortized cost Fair value Less than 6 months prior to sale 19 $ 119.3 $ 79.2 Greater than or equal to 6 months and less than 12 months prior to sale 7 76.4 45.6 26 $ 195.7 $ 124.8 |
Schedule of unrealized loss on investments | The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2016 (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 $ 8.0 $ — $ — $ — $ 8.0 $ — States and political subdivisions 176.3 (7.8 ) 18.3 (1.8 ) 194.6 (9.6 ) Debt securities issued by foreign governments 18.9 (.4 ) — — 18.9 (.4 ) Corporate securities 1,907.6 (75.5 ) 559.6 (63.5 ) 2,467.2 (139.0 ) Asset-backed securities 692.9 (8.5 ) 262.5 (7.0 ) 955.4 (15.5 ) Collateralized debt obligations 38.3 (.1 ) 30.8 (.2 ) 69.1 (.3 ) Commercial mortgage-backed securities 525.2 (16.6 ) 154.0 (11.3 ) 679.2 (27.9 ) Collateralized mortgage obligations 73.6 (.6 ) 34.6 (1.0 ) 108.2 (1.6 ) Total fixed maturities, available for sale $ 3,440.8 $ (109.5 ) $ 1,059.8 $ (84.8 ) $ 4,500.6 $ (194.3 ) Equity securities $ 239.4 $ (8.0 ) $ — $ — $ 239.4 $ (8.0 ) 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, 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 $ 43.6 $ (.3 ) $ — $ — $ 43.6 $ (.3 ) States and political subdivisions 156.8 (4.1 ) 14.8 (3.5 ) 171.6 (7.6 ) Debt securities issued by foreign governments 20.7 (.6 ) — — 20.7 (.6 ) Corporate securities 2,913.6 (255.7 ) 278.9 (89.5 ) 3,192.5 (345.2 ) Asset-backed securities 930.3 (11.7 ) 98.4 (1.7 ) 1,028.7 (13.4 ) Collateralized debt obligations 96.2 (1.8 ) 36.3 (.4 ) 132.5 (2.2 ) Commercial mortgage-backed securities 556.0 (16.1 ) 25.7 (1.5 ) 581.7 (17.6 ) Mortgage pass-through securities — — .1 — .1 — Collateralized mortgage obligations 97.8 (1.0 ) 40.8 (.6 ) 138.6 (1.6 ) Total fixed maturities, available for sale $ 4,815.0 $ (291.3 ) $ 495.0 $ (97.2 ) $ 5,310.0 $ (388.5 ) Equity securities $ 140.1 $ (2.4 ) $ 2.4 $ (.4 ) $ 142.5 $ (2.8 ) |
Schedule of structured securities | The following table sets forth the par value, amortized cost and estimated fair value of structured securities, summarized by interest rates on the underlying collateral, at December 31, 2016 (dollars in millions): Par value Amortized cost Estimated fair value Below 4 percent $ 1,993.9 $ 1,523.5 $ 1,535.4 4 percent – 5 percent 1,757.6 1,592.5 1,624.7 5 percent – 6 percent 1,772.2 1,602.2 1,666.7 6 percent – 7 percent 388.1 348.0 364.5 7 percent – 8 percent 55.8 56.2 65.6 8 percent and above 138.7 138.1 138.3 Total structured securities $ 6,106.3 $ 5,260.5 $ 5,395.2 The amortized cost and estimated fair value of structured securities at December 31, 2016 , summarized by type of security, were as follows (dollars in millions): Estimated fair value Type Amortized cost Amount Percent of fixed maturities Pass-throughs, sequential and equivalent securities $ 664.8 $ 710.6 3.4 % Planned amortization classes, target amortization classes and accretion-directed bonds 142.5 156.4 .7 Commercial mortgage-backed securities 1,531.0 1,536.2 7.3 Asset-backed securities 2,641.5 2,710.3 12.9 Collateralized debt obligations 230.0 230.7 1.1 Other 50.7 51.0 .2 Total structured securities $ 5,260.5 $ 5,395.2 25.6 % |
Summary of weighted average loan-to-value ratio for outstanding mortgage loans | The following table provides the carrying value and estimated fair value of our outstanding mortgage loans and the underlying collateral as of December 31, 2016 (dollars in millions): Estimated fair value Loan-to-value ratio (a) Carrying value Mortgage loans Collateral Less than 60% $ 976.5 $ 1,004.2 $ 2,393.0 60% to 70% 394.7 396.7 596.2 Greater than 70% to 80% 282.3 286.2 385.1 Greater than 80% to 90% 75.3 74.0 89.5 Greater than 90% 39.2 39.0 42.0 Total $ 1,768.0 $ 1,800.1 $ 3,505.8 ________________ (a) Loan-to-value ratios are calculated as the ratio of: (i) the carrying value of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements of financial instruments measured on a recurring basis | The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2016 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 $ — $ 13,252.4 $ 258.5 $ 13,510.9 United States Treasury securities and obligations of United States government corporations and agencies — 164.3 — 164.3 States and political subdivisions — 1,988.9 — 1,988.9 Debt securities issued by foreign governments — 33.0 3.9 36.9 Asset-backed securities — 2,649.9 60.4 2,710.3 Collateralized debt obligations — 225.3 5.4 230.7 Commercial mortgage-backed securities — 1,504.2 32.0 1,536.2 Mortgage pass-through securities — 2.5 — 2.5 Collateralized mortgage obligations — 915.5 — 915.5 Total fixed maturities, available for sale — 20,736.0 360.2 21,096.2 Equity securities - corporate securities 359.9 199.1 25.2 584.2 Trading securities: Corporate securities — 19.0 — 19.0 United States Treasury securities and obligations of United States government corporations and agencies — .5 — .5 Asset-backed securities — 94.3 — 94.3 Collateralized debt obligations — 2.4 — 2.4 Commercial mortgage-backed securities — 163.9 — 163.9 Collateralized mortgage obligations — 78.4 — 78.4 Equity securities 4.9 — — 4.9 Total trading securities 4.9 358.5 — 363.4 Investments held by variable interest entities - corporate securities — 1,724.3 — 1,724.3 Other invested assets - derivatives — 111.9 — 111.9 Assets held in separate accounts — 4.7 — 4.7 Total assets carried at fair value by category $ 364.8 $ 23,134.5 $ 385.4 $ 23,884.7 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,092.3 $ 1,092.3 The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2015 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 $ — $ 12,698.1 $ 170.4 $ 12,868.5 United States Treasury securities and obligations of United States government corporations and agencies — 194.5 — 194.5 States and political subdivisions — 2,104.2 — 2,104.2 Debt securities issued by foreign governments — 20.7 — 20.7 Asset-backed securities — 1,816.3 35.9 1,852.2 Collateralized debt obligations — 186.7 — 186.7 Commercial mortgage-backed securities — 1,604.2 1.1 1,605.3 Mortgage pass-through securities — 3.3 .1 3.4 Collateralized mortgage obligations — 1,047.4 — 1,047.4 Total fixed maturities, available for sale — 19,675.4 207.5 19,882.9 Equity securities - corporate securities 254.9 176.1 32.0 463.0 Trading securities: Corporate securities — 21.5 — 21.5 United States Treasury securities and obligations of United States government corporations and agencies — 1.9 — 1.9 Asset-backed securities — 35.5 — 35.5 Collateralized debt obligations — 2.1 — 2.1 Commercial mortgage-backed securities — 118.1 39.9 158.0 Collateralized mortgage obligations — 38.2 — 38.2 Equity securities 4.9 — — 4.9 Total trading securities 4.9 217.3 39.9 262.1 Investments held by variable interest entities - corporate securities — 1,633.6 — 1,633.6 Other invested assets - derivatives 1.6 41.0 — 42.6 Assets held in separate accounts — 4.7 — 4.7 Total assets carried at fair value by category $ 261.4 $ 21,748.1 $ 279.4 $ 22,288.9 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products $ — $ — $ 1,057.1 $ 1,057.1 The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): December 31, 2016 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 $ — $ — $ 1,800.1 $ 1,800.1 $ 1,768.0 Policy loans — — 112.0 112.0 112.0 Other invested assets: Company-owned life insurance — 165.0 — 165.0 165.0 Cash and cash equivalents: Unrestricted 473.6 5.3 — 478.9 478.9 Held by variable interest entities 189.3 — — 189.3 189.3 Liabilities: Policyholder account balances — — 10,912.7 10,912.7 10,912.7 Investment borrowings — 1,650.0 — 1,650.0 1,647.4 Borrowings related to variable interest entities — 1,675.2 — 1,675.2 1,662.8 Notes payable – direct corporate obligations — 931.9 — 931.9 912.9 December 31, 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 $ — $ — $ 1,772.4 $ 1,772.4 $ 1,721.0 Policy loans — — 109.4 109.4 109.4 Other invested assets: Company-owned life insurance — 158.1 — 158.1 158.1 Cash and cash equivalents: Unrestricted 432.3 — — 432.3 432.3 Held by variable interest entities 364.4 — — 364.4 364.4 Liabilities: Policyholder account balances — — 10,762.3 10,762.3 10,762.3 Investment borrowings — 1,549.8 — 1,549.8 1,548.1 Borrowings related to variable interest entities — 1,673.6 — 1,673.6 1,676.4 Notes payable – direct corporate obligations — 937.8 — 937.8 911.1 |
Fair value, assets measured on recurring basis, unobservable input reconciliation | The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2016 (dollars in millions): December 31, 2016 Beginning balance as of December 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 December 31, 2016 Amount of total gains (losses) for the year ended December 31, 2016 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 $ 170.4 $ 76.5 $ (10.7 ) $ 9.1 $ 20.3 $ (7.1 ) $ 258.5 $ (10.9 ) Debt securities issued by foreign governments — 4.0 — (.1 ) — — 3.9 — Asset-backed securities 35.9 9.7 — 2.2 26.3 (13.7 ) 60.4 — Collateralized debt obligations — 5.4 — — — — 5.4 — Commercial mortgage-backed securities 1.1 16.9 — .1 13.9 — 32.0 — Mortgage pass-through securities .1 (.1 ) — — — — — — Total fixed maturities, available for sale 207.5 112.4 (10.7 ) 11.3 60.5 (20.8 ) 360.2 (10.9 ) Equity securities - corporate securities 32.0 5.5 (12.7 ) .4 — — 25.2 (12.7 ) Trading securities - commercial mortgage-backed securities 39.9 — — — — (39.9 ) — — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,057.1 ) (96.0 ) 60.8 — — — (1,092.3 ) 60.8 _________ (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. In addition, such activity includes the investments received upon the recapture of reinsurance agreements with BRe on September 29, 2016. The following summarizes such activity for the year ended December 31, 2016 (dollars in millions): Purchases Received in reinsurance recapture Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 18.5 $ 89.2 $ (31.2 ) $ — $ — $ 76.5 Debt securities issued by foreign governments 4.0 — — — — 4.0 Asset-backed securities 16.9 — (7.2 ) — — 9.7 Collateralized debt obligations 5.4 — — — — 5.4 Commercial mortgage-backed securities 17.0 — (.1 ) — — 16.9 Mortgage pass-through securities — — (.1 ) — — (.1 ) Total fixed maturities, available for sale 61.8 89.2 (38.6 ) — — 112.4 Equity securities - corporate securities 3.3 2.2 — — — 5.5 Trading securities - corporate securities .2 — (.2 ) — — — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (148.3 ) — 21.2 (28.9 ) 60.0 (96.0 ) 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 year ended December 31, 2015 (dollars in millions): December 31, 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 December 31, 2015 Amount of total gains (losses) for the year ended December 31, 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 $ 31.0 $ (2.2 ) $ (19.5 ) $ 37.4 $ (242.2 ) $ 170.4 $ — States and political subdivisions 35.5 (35.5 ) — — — — — — Asset-backed securities 59.2 6.7 — (1.4 ) — (28.6 ) 35.9 — Commercial mortgage-backed securities 1.2 (.1 ) — — — — 1.1 — Mortgage pass-through securities .4 (.3 ) — — — — .1 — Total fixed maturities, available for sale 462.2 1.8 (2.2 ) (20.9 ) 37.4 (270.8 ) 207.5 — Equity securities - corporate securities 28.0 4.0 — — — — 32.0 — 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 ) (11.9 ) 36.3 — — — (1,057.1 ) 36.3 ____________ (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 year ended December 31, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 62.2 $ (31.2 ) $ — $ — $ 31.0 States and political subdivisions — (35.5 ) — — (35.5 ) Asset-backed securities 13.7 (7.0 ) — — 6.7 Commercial mortgage-backed securities — (.1 ) — — (.1 ) Mortgage pass-through securities — (.3 ) — — (.3 ) Total fixed maturities, available for sale 75.9 (74.1 ) — — 1.8 Equity securities - corporate securities 4.0 — — — 4.0 Trading securities - commercial mortgage-backed securities 9.5 — — — 9.5 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (137.8 ) 64.4 (4.0 ) 65.5 (11.9 ) |
Fair value, liabilities measured on recurring basis, unobservable input reconciliation | The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the year ended December 31, 2016 (dollars in millions): December 31, 2016 Beginning balance as of December 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 December 31, 2016 Amount of total gains (losses) for the year ended December 31, 2016 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 $ 170.4 $ 76.5 $ (10.7 ) $ 9.1 $ 20.3 $ (7.1 ) $ 258.5 $ (10.9 ) Debt securities issued by foreign governments — 4.0 — (.1 ) — — 3.9 — Asset-backed securities 35.9 9.7 — 2.2 26.3 (13.7 ) 60.4 — Collateralized debt obligations — 5.4 — — — — 5.4 — Commercial mortgage-backed securities 1.1 16.9 — .1 13.9 — 32.0 — Mortgage pass-through securities .1 (.1 ) — — — — — — Total fixed maturities, available for sale 207.5 112.4 (10.7 ) 11.3 60.5 (20.8 ) 360.2 (10.9 ) Equity securities - corporate securities 32.0 5.5 (12.7 ) .4 — — 25.2 (12.7 ) Trading securities - commercial mortgage-backed securities 39.9 — — — — (39.9 ) — — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (1,057.1 ) (96.0 ) 60.8 — — — (1,092.3 ) 60.8 _________ (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. In addition, such activity includes the investments received upon the recapture of reinsurance agreements with BRe on September 29, 2016. The following summarizes such activity for the year ended December 31, 2016 (dollars in millions): Purchases Received in reinsurance recapture Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 18.5 $ 89.2 $ (31.2 ) $ — $ — $ 76.5 Debt securities issued by foreign governments 4.0 — — — — 4.0 Asset-backed securities 16.9 — (7.2 ) — — 9.7 Collateralized debt obligations 5.4 — — — — 5.4 Commercial mortgage-backed securities 17.0 — (.1 ) — — 16.9 Mortgage pass-through securities — — (.1 ) — — (.1 ) Total fixed maturities, available for sale 61.8 89.2 (38.6 ) — — 112.4 Equity securities - corporate securities 3.3 2.2 — — — 5.5 Trading securities - corporate securities .2 — (.2 ) — — — Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (148.3 ) — 21.2 (28.9 ) 60.0 (96.0 ) 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 year ended December 31, 2015 (dollars in millions): December 31, 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 December 31, 2015 Amount of total gains (losses) for the year ended December 31, 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 $ 31.0 $ (2.2 ) $ (19.5 ) $ 37.4 $ (242.2 ) $ 170.4 $ — States and political subdivisions 35.5 (35.5 ) — — — — — — Asset-backed securities 59.2 6.7 — (1.4 ) — (28.6 ) 35.9 — Commercial mortgage-backed securities 1.2 (.1 ) — — — — 1.1 — Mortgage pass-through securities .4 (.3 ) — — — — .1 — Total fixed maturities, available for sale 462.2 1.8 (2.2 ) (20.9 ) 37.4 (270.8 ) 207.5 — Equity securities - corporate securities 28.0 4.0 — — — — 32.0 — 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 ) (11.9 ) 36.3 — — — (1,057.1 ) 36.3 ____________ (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 year ended December 31, 2015 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 62.2 $ (31.2 ) $ — $ — $ 31.0 States and political subdivisions — (35.5 ) — — (35.5 ) Asset-backed securities 13.7 (7.0 ) — — 6.7 Commercial mortgage-backed securities — (.1 ) — — (.1 ) Mortgage pass-through securities — (.3 ) — — (.3 ) Total fixed maturities, available for sale 75.9 (74.1 ) — — 1.8 Equity securities - corporate securities 4.0 — — — 4.0 Trading securities - commercial mortgage-backed securities 9.5 — — — 9.5 Liabilities: Future policy benefits - embedded derivatives associated with fixed index annuity products (137.8 ) 64.4 (4.0 ) 65.5 (11.9 ) |
Fair value inputs | The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2016 (dollars in millions): Fair value at December 31, 2016 Valuation techniques Unobservable inputs Range (weighted average) Assets: Corporate securities (a) $ 148.5 Discounted cash flow analysis Discount margins 1.35% - 27.71% (13.52%) Corporate securities (b) 14.8 Recovery method Percent of recovery expected 5% - 69% (55%) Asset-backed securities (c) 24.0 Discounted cash flow analysis Discount margins 2.06% - 3.64% (2.76%) Equity security (d) 25.2 Market multiple Projected cash flows 0.4% - 6.2% (5.9%) Other assets categorized as Level 3 (e) 172.9 Unadjusted third-party price source Not applicable Not applicable Total 385.4 Liabilities: Future policy benefits (f) 1,092.3 Discounted projected embedded derivatives Projected portfolio yields 5.15% - 5.61% (5.59%) Discount rates 0.18 - 3.06% (2.07%) Surrender rates 0.94% - 46.48% (13.52%) ________________________________ (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) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement. (c) 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. (d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is projected cash flows. Generally, increases (decreases) in the projected cash flows would result in higher (lower) fair value measurements. (e) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources. (f) 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, 2015 (dollars in millions): Fair value at December 31, 2015 Valuation techniques Unobservable inputs Range (weighted average) Assets: Corporate securities (a) $ 76.9 Discounted cash flow analysis Discount margins 1.65% - 9.74% (5.35%) Asset-backed securities (b) 22.2 Discounted cash flow analysis Discount margins 2.83% - 4.45% (3.50%) Equity security (c) 32.0 Market approach Projected cash flows Not applicable Other assets categorized as Level 3 (d) 148.3 Unadjusted third-party price source Not applicable Not applicable Total 279.4 Liabilities: Future policy benefits (e) 1,057.1 Discounted projected embedded derivatives Projected portfolio yields 5.15% - 5.61% (5.42%) Discount rates 0.00 - 3.18% (1.94%) Surrender rates 1.67% - 46.56% (14.09%) ________________________________ (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. |
LIABILITIES FOR INSURANCE PRO33
LIABILITIES FOR INSURANCE PRODUCTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
Schedule of insurance liabilities by product segment | Our future policy benefits are summarized as follows (dollars in millions): Withdrawal assumption Morbidity assumption Mortality assumption Interest rate assumption 2016 2015 Long-term care Company experience Company experience Company experience 6% $ 5,346.1 $ 5,172.2 Traditional life insurance contracts Company experience Company experience (a) 5% 2,322.1 2,248.7 Accident and health contracts Company experience Company experience Company experience 5% 2,695.6 2,589.9 Interest-sensitive life insurance contracts Company experience Company experience Company experience 5% 52.2 44.7 Annuities and supplemental contracts with life contingencies Company experience Company experience (b) 4% 537.3 546.6 Total $ 10,953.3 $ 10,602.1 ____________________ (a) Principally, modifications of: (i) the 1965 ‑ 70 and 1975 - 80 Basic Tables; and (ii) the 1941, 1958 and 1980 Commissioners' Standard Ordinary Tables; as well as Company experience. (b) Principally, modifications of: (i) the 1971 Individual Annuity Mortality Table; (ii) the 1983 Table "A"; and (iii) the Annuity 2000 Mortality Table; as well as Company experience. Our policyholder account balances are summarized as follows (dollars in millions): 2016 2015 Fixed index annuities $ 5,324.5 $ 4,884.4 Other annuities 4,541.8 4,885.1 Interest-sensitive life insurance contracts 1,046.4 992.8 Total $ 10,912.7 $ 10,762.3 |
Summary of liabilities for unpaid claims adjustment expense | Changes in the unpaid claims reserve (included in claims payable) and disabled life reserves related to accident and health insurance (included in the liability for future policy benefits) were as follows (dollars in millions): 2016 2015 2014 Balance, beginning of year $ 1,731.8 $ 1,679.5 $ 1,710.1 Less reinsurance receivables (130.0 ) (125.0 ) (164.1 ) Net balance, beginning of year 1,601.8 1,554.5 1,546.0 Incurred claims related to: Current year 1,526.4 1,481.0 1,468.1 Prior years (a) 96.6 (13.3 ) (39.9 ) Total incurred 1,623.0 1,467.7 1,428.2 Interest on claim reserves 75.3 71.0 70.5 Paid claims related to: Current year 837.2 841.8 848.7 Prior years 671.3 649.6 641.5 Total paid 1,508.5 1,491.4 1,490.2 Net balance, end of year 1,791.6 1,601.8 1,554.5 Add reinsurance receivables (payables) (14.0 ) 130.0 125.0 Balance, end of year $ 1,777.6 $ 1,731.8 $ 1,679.5 ___________ (a) The reserves and liabilities we establish are necessarily based on estimates, assumptions and prior years' statistics. Such amounts will fluctuate based upon the estimation procedures used to determine the amount of unpaid losses. It is possible that actual claims will exceed our reserves and have a material adverse effect on our results of operations and financial condition. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | The components of income tax expense (benefit) were as follows (dollars in millions): 2016 2015 2014 Current tax expense (benefit) $ (45.2 ) $ 10.7 $ 15.6 Deferred tax expense 173.0 118.6 143.6 Valuation allowance applicable to current year income (14.0 ) — — Income tax expense calculated based on estimated annual effective tax rate 113.8 129.3 159.2 Income tax expense on discrete items: Tax expense related to the sale of Conseco Life Insurance Company (a) — — 14.2 Change in valuation allowance 40.7 (32.5 ) (48.8 ) IRS settlement (170.4 ) — — Other items 10.9 .2 (.9 ) Total income tax expense (benefit) $ (5.0 ) $ 97.0 $ 123.7 _________________________ (a) Conseco Life Insurance Company ("CLIC") was a wholly owned subsidiary prior to its sale on July 1, 2014. |
Schedule of effective income tax rate reconciliation | A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows: 2016 2015 2014 U.S. statutory corporate rate 35.0 % 35.0 % 35.0 % Valuation allowance 7.6 (8.8 ) (27.9 ) Non-taxable income and nondeductible benefits, net (1.1 ) (.2 ) (.9 ) State taxes 2.2 2.1 1.5 Impact of IRS settlement (48.2 ) — — Impact of the sale of CLIC — — 66.3 Other items 3.1 (1.7 ) (3.4 ) Effective tax rate (1.4 )% 26.4 % 70.6 % |
Schedule of deferred tax assets and liabilities | The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): 2016 2015 Deferred tax assets: Net federal operating loss carryforwards $ 882.9 $ 916.3 Net state operating loss carryforwards 12.3 14.1 Tax credits .7 55.3 Capital loss carryforwards — 13.8 Investments 17.8 26.5 Insurance liabilities 668.4 600.3 Other 65.6 63.0 Gross deferred tax assets 1,647.7 1,689.3 Deferred tax liabilities: Present value of future profits and deferred acquisition costs (277.8 ) (305.4 ) Accumulated other comprehensive income (344.1 ) (223.8 ) Gross deferred tax liabilities (621.9 ) (529.2 ) Net deferred tax assets before valuation allowance 1,025.8 1,160.1 Valuation allowance (240.2 ) (213.5 ) Net deferred tax assets 785.6 946.6 Current income taxes prepaid (accrued) 4.1 (47.8 ) Income tax assets, net $ 789.7 $ 898.8 |
Summary of valuation allowance | Changes in our valuation allowance are summarized as follows (dollars in millions): Balance, December 31, 2013 $ 294.8 Decrease in 2014 (48.8 ) (a) Balance, December 31, 2014 246.0 Decrease in 2015 (32.5 ) (b) Balance, December 31, 2015 213.5 Increase in 2016 26.7 (c) Balance, December 31, 2016 $ 240.2 ___________________ (a) The 2014 reduction to the deferred tax valuation allowance primarily resulted from tax examination adjustments and the tax gain on the sale of CLIC. (b) The 2015 reduction to the deferred tax valuation allowance primarily resulted from higher actual and projected non-life income. (c) The 2016 increase to the deferred tax valuation allowance primarily resulted from additional non-life NOLs due to the settlement with the Internal Revenue Service (the "IRS"). |
Summary of operating loss carryforwards | As of December 31, 2016 , we had $2.5 billion of federal NOLs (all of which were non-life NOLs). The following table summarizes the expiration dates of our loss carryforwards (dollars in millions): Net operating loss Year of expiration carryforwards 2023 $ 1,936.0 2025 85.2 2026 149.9 2027 10.8 2028 80.3 2029 213.2 2030 .3 2031 .2 2032 44.4 2033 .6 2034 1.7 Total federal NOLs $ 2,522.6 |
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2016 and 2015 is as follows (dollars in millions): Years ended December 31, 2016 2015 Balance at beginning of year $ 234.2 $ 228.7 Increase based on tax positions taken in prior years 3.4 5.5 Decrease in unrecognized tax benefits related to settlements with taxing authorities (237.6 ) — Balance at end of year $ — $ 234.2 |
NOTES PAYABLE - DIRECT CORPOR35
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following notes payable were direct corporate obligations of the Company as of December 31, 2016 and 2015 (dollars in millions): 2016 2015 4.500% Senior Notes due May 2020 $ 325.0 $ 325.0 5.250% Senior Notes due May 2025 500.0 500.0 Revolving Credit Agreement (as defined below) 100.0 100.0 Unamortized debt issuance costs (12.1 ) (13.9 ) Direct corporate obligations $ 912.9 $ 911.1 |
Schedule of sources and uses of cash from debt refinancing | 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 December 31, 2016 (dollars in millions): Year ending December 31, 2017 $ — 2018 — 2019 100.0 2020 325.0 2021 — Thereafter 500.0 $ 925.0 |
LITIGATION AND OTHER LEGAL PR36
LITIGATION AND OTHER LEGAL PROCEEDINGS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | Future required minimum payments as of December 31, 2016 , were as follows (dollars in millions): 2017 $ 32.0 2018 26.5 2019 13.2 2020 7.7 2021 5.0 Thereafter 5.9 Total $ 90.3 |
AGENT DEFERRED COMPENSATION P37
AGENT DEFERRED COMPENSATION PLAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of assumptions used | We used the following assumptions for the deferred compensation plan to calculate: 2016 2015 Benefit obligations: Discount rate 4.25 % 4.50 % Net periodic cost: Discount rate 4.50 % 4.15 % |
Schedule of expected benefit payments | The benefits expected to be paid pursuant to our agent deferred compensation plan as of December 31, 2016 were as follows (dollars in millions): 2017 $ 7.0 2018 7.4 2019 7.5 2020 7.7 2021 7.9 2022 - 2026 43.1 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value by balance sheet location | Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions): Fair value 2016 2015 Assets: Other invested assets: Fixed index call options $ 111.9 $ 41.0 Interest rate futures — .1 Reinsurance receivables (4.2 ) (5.0 ) Total assets $ 107.7 $ 36.1 Liabilities: Future policy benefits: Fixed index products $ 1,092.3 $ 1,057.1 Total liabilities $ 1,092.3 $ 1,057.1 |
Schedule of derivative instruments | The following table represents activity associated with derivative instruments as of the dates indicated: Measurement December 31, 2015 Additions Maturities/terminations December 31, 2016 Interest futures Contracts 264 378 (642 ) — Fixed index annuities - embedded derivative Policies 96,660 11,237 (7,085 ) 100,812 Fixed index call options Notional (a) $ 2,379.7 $ 2,452.5 $ (2,377.1 ) $ 2,455.1 _________________ (a) Dollars in millions. |
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): 2016 2015 2014 Net investment income from policyholder and reinsurer accounts and other special-purpose portfolios: Fixed index call options $ 29.2 $ (36.2 ) $ 69.5 Embedded derivative related to reinsurance contract — — (1.4 ) Total 29.2 (36.2 ) 68.1 Net realized gains (losses): Interest rate futures (1.1 ) (2.7 ) (7.0 ) Embedded derivative related to modified coinsurance agreement .8 (7.0 ) 2.0 Total (.3 ) (9.7 ) (5.0 ) Insurance policy benefits: Embedded derivative related to fixed index annuities 60.8 36.3 (73.5 ) Total $ 89.7 $ (9.6 ) $ (10.4 ) |
Derivatives with master netting arrangements | The following table summarizes information related to derivatives with master netting arrangements or collateral as of December 31, 2016 and 2015 (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 December 31, 2016: Fixed index call options $ 111.9 $ — $ 111.9 $ — $ — $ 111.9 Interest rate futures — — — — — — December 31, 2015: Fixed index call options 41.0 — 41.0 — — 41.0 Interest rate futures .1 1.5 1.6 — — 1.6 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of common stock outstanding | Changes in the number of shares of common stock outstanding were as follows (shares in thousands): 2016 2015 2014 Balance, beginning of year 184,029 203,324 220,324 Treasury stock purchased and retired (11,688 ) (20,582 ) (18,489 ) Stock options exercised 978 769 916 Restricted and performance stock vested (a) 435 518 573 Balance, end of year 173,754 184,029 203,324 ____________________ (a) In 2016 , 2015 and 2014 , such amount was reduced by 191 thousand , 237 thousand and 257 thousand shares, respectively, 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. |
Schedule of share-based compensation | A summary of the Company's stock option activity and related information for 2016 is presented below (shares in thousands; dollars in millions, except per share amounts): Shares Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding at the beginning of the year 5,199 $ 13.32 Options granted 1,706 17.45 Exercised (978 ) (8.70 ) $ 6.1 Forfeited or terminated (573 ) (20.41 ) Outstanding at the end of the year 5,354 14.73 5.9 $ 37.1 Options exercisable at the end of the year 2,187 2.7 $ 15.1 Available for future grant 4,620 A summary of the Company's stock option activity and related information for 2015 is presented below (shares in thousands; dollars in millions, except per share amounts): Shares Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding at the beginning of the year 5,011 $ 12.04 Options granted 1,361 16.45 Exercised (769 ) (8.20 ) $ 4.8 Forfeited or terminated (404 ) (17.70 ) Outstanding at the end of the year 5,199 13.32 4.8 $ 38.4 Options exercisable at the end of the year 2,399 2.5 $ 15.3 Available for future grant 6,882 A summary of the Company's stock option activity and related information for 2014 is presented below (shares in thousands; dollars in millions, except per share amounts): Shares Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding at the beginning of the year 5,579 $ 10.64 Options granted 1,014 19.10 Exercised (917 ) (5.47 ) $ 3.8 Forfeited or terminated (665 ) (20.07 ) Outstanding at the end of the year 5,011 12.04 4.3 $ 32.1 Options exercisable at the end of the year 2,030 2.7 $ 12.1 Available for future grant 8,571 |
Schedule of valuation assumptions on payment awards | The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: 2016 2015 2014 Grants Grants Grants Weighted average risk-free interest rates 1.4 % 1.7 % 1.6 % Weighted average dividend yields 1.6 % 1.5 % 1.3 % Volatility factors 36 % 85 % 51 % Weighted average expected life (in years) 6.3 6.3 4.8 Weighted average fair value per share $ 5.48 $ 10.83 $ 7.65 |
Schedule of share-based compensation by exercise price range | The following table summarizes information about stock options outstanding at December 31, 2016 (shares in thousands): Options outstanding Options exercisable Range of exercise prices Number outstanding Remaining life (in years) Average exercise price Number exercisable Average exercise price $6.45 - $7.51 922 1.6 $ 7.29 922 $ 7.29 $10.88 - $16.22 860 3.2 11.09 846 11.02 $16.42 - $19.15 3,572 7.7 17.52 419 19.08 5,354 2,187 |
Schedule of nonvested share activity | A summary of the Company's non-vested restricted stock activity for 2016 is presented below (shares in thousands): Shares Weighted average grant date fair value Non-vested shares, beginning of year 95 $ 15.66 Granted 401 18.17 Vested (126 ) 16.53 Forfeited (1 ) 16.80 Non-vested shares, end of year 369 18.10 |
Schedule of performance share-based compensation | A summary of the Company's performance units is presented below (shares in thousands): Total shareholder return awards Operating return on equity awards Pre-tax operating income awards Awards outstanding at December 31, 2013 382 204 470 Granted in 2014 142 142 — Additional shares issued pursuant to achieving certain performance criteria (a) — — 142 Shares vested in 2014 — — (434 ) Forfeited (5 ) (3 ) (2 ) Awards outstanding at December 31, 2014 519 343 176 Granted in 2015 258 258 — Additional shares issued pursuant to achieving certain performance criteria (a) 85 — 85 Shares vested in 2015 (260 ) — (260 ) Forfeited (53 ) (52 ) (1 ) Awards outstanding at December 31, 2015 549 549 — Granted in 2016 254 254 — Additional shares issued pursuant to achieving certain performance criteria (a) 87 65 — Shares vested in 2016 (261 ) (239 ) — Forfeited (59 ) (59 ) — Awards outstanding at December 31, 2016 570 570 — _________________________ (a) The performance units that vested in these years provided for a payout of up to 150 percent of the award if certain performance levels were achieved. |
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): 2016 2015 2014 Net income for diluted earnings per share $ 358.2 $ 270.7 $ 51.4 Shares: Weighted average shares outstanding for basic earnings per share 176,638 193,054 212,917 Effect of dilutive securities on weighted average shares: Stock options, restricted stock and performance units 1,685 2,112 2,505 Warrants (a) — — 2,233 Dilutive potential common shares 1,685 2,112 4,738 Weighted average shares outstanding for diluted earnings per share 178,323 195,166 217,655 ________ (a) All outstanding warrants were repurchased in September 2014 as further discussed above. Accordingly, the warrants have no dilutive effect in periods beginning after September 30, 2014. |
OTHER OPERATING STATEMENT DATA
OTHER OPERATING STATEMENT DATA (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
Schedule of insurance policy income | Insurance policy income consisted of the following (dollars in millions): 2016 2015 2014 Direct premiums collected $ 3,942.7 $ 3,769.6 $ 3,856.2 Reinsurance assumed 33.8 38.4 34.5 Reinsurance ceded (132.9 ) (142.8 ) (187.9 ) Premiums collected, net of reinsurance 3,843.6 3,665.2 3,702.8 Change in unearned premiums 6.2 5.9 9.1 Less premiums on interest-sensitive life and products without mortality and morbidity risk which are recorded as additions to insurance liabilities (1,386.7 ) (1,241.9 ) (1,295.4 ) Premiums on traditional products with mortality or morbidity risk 2,463.1 2,429.2 2,416.5 Fees and surrender charges on interest-sensitive products 138.0 126.8 213.2 Insurance policy income $ 2,601.1 $ 2,556.0 $ 2,629.7 |
Schedule of other operating cost and expense | Other operating costs and expenses were as follows (dollars in millions): 2016 2015 2014 Commission expense $ 110.5 $ 103.8 $ 99.4 Salaries and wages 231.0 205.2 242.4 Other 454.8 430.2 461.0 Total other operating costs and expenses $ 796.3 $ 739.2 $ 802.8 |
Schedule of changes in present value of future insurance profits | Changes in the present value of future profits were as follows (dollars in millions): 2016 2015 2014 Balance, beginning of year $ 449.0 $ 489.4 $ 679.3 Amortization (62.2 ) (69.1 ) (76.2 ) Effect of reinsurance transaction — — 5.0 Amounts related to CLIC prior to being sold — — (15.5 ) Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale 15.0 28.7 (103.2 ) Balance, end of year $ 401.8 $ 449.0 $ 489.4 |
Schedule of changes in deferred acquisition costs | Changes in deferred acquisition costs were as follows (dollars in millions): 2016 2015 2014 Balance, beginning of year $ 1,083.3 $ 770.6 $ 968.1 Additions 242.7 246.4 242.8 Amortization (191.1 ) (190.9 ) (171.2 ) Effect of reinsurance transaction — — 24.0 Amounts related to CLIC prior to being sold — — (37.6 ) Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale (90.2 ) 257.2 (255.5 ) Balance, end of year $ 1,044.7 $ 1,083.3 $ 770.6 |
CONSOLIDATED STATEMENT CASH F41
CONSOLIDATED STATEMENT CASH FLOWS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of the reconciliation for net income provided by operating activities | The following reconciles net income to net cash provided by operating activities (dollars in millions): 2016 2015 2014 Cash flows from operating activities: Net income $ 358.2 $ 270.7 $ 51.4 Adjustments to reconcile net income to net cash from operating activities: Amortization and depreciation 275.0 283.4 274.2 Income taxes (11.7 ) 92.9 119.7 Insurance liabilities 332.8 297.4 398.2 Accrual and amortization of investment income (124.2 ) (27.6 ) (148.3 ) Deferral of policy acquisition costs (242.7 ) (246.4 ) (242.8 ) Net realized investment (gains) losses (8.3 ) 36.6 (36.7 ) Payment to reinsurer pursuant to long-term care business reinsured — — (590.3 ) Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses 75.4 9.0 239.8 Cash and cash equivalents received upon recapture of reinsurance 73.6 — — Loss on extinguishment or modification of debt — 32.8 .6 Other 31.4 (4.9 ) 56.0 Net cash from operating activities $ 759.5 $ 743.9 $ 121.8 (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. |
Effects of reinsurance | On July 1, 2014, Bankers Life recaptured the life business written by Bankers Life that was reinsured by Wilton Reassurance Company ("Wilton Re") in 2009. The following summarizes the impact of the recapture (dollars in millions): Investments $ 139.4 (a) (b) Cash 7.7 Present value of future profits and deferred acquisition costs 29.0 (b) Reinsurance receivables (155.9 ) (b) Other liabilities 5.9 (b) Gain on reinsurance transaction (classified as "Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses") 26.1 Income tax expense 9.2 Gain on reinsurance transaction (net of income taxes) $ 16.9 ___________________ (a) Such amount has been reduced by a $28.0 million recapture fee. (b) Such non-cash amounts have been excluded from the consolidated statement of cash flows. |
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): 2016 2015 2014 Stock options, restricted stock and performance units $ 23.0 $ 17.1 $ 15.6 Market value of investments recaptured in connection with the termination of reinsurance agreements with BRe 431.1 $ — $ — |
STATUTORY INFORMATION (BASED 42
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
Schedule of statutory accounting practices | The Company's insurance subsidiaries reported the following amounts to regulatory agencies, after appropriate elimination of intercompany accounts among such subsidiaries (dollars in millions): 2016 2015 Statutory capital and surplus $ 1,956.8 $ 1,739.2 Asset valuation reserve 253.3 196.9 Interest maintenance reserve 486.9 476.0 Total $ 2,697.0 $ 2,412.1 |
SALE OF SUBSIDIARY (Tables)
SALE OF SUBSIDIARY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Carrying Amount of CLIC Business Being Sold | The loss on the sale of CLIC in 2014 is summarized below (dollars in millions): Net cash proceeds $ 224.9 Net assets being sold: Investments 3,863.8 Cash and cash equivalents 164.7 Accrued investment income 42.7 Present value of future profits 15.5 Deferred acquisition costs 37.6 Reinsurance receivables 307.4 Income tax assets, net 84.4 Other assets 2.8 Liabilities for insurance products (3,201.3 ) Other liabilities (199.1 ) Investment borrowings (383.4 ) Accumulated other comprehensive income (240.5 ) Net assets being sold 494.6 Loss before taxes (269.7 ) Tax expense related to the sale 14.2 Valuation allowance release related to the tax on the sale (14.2 ) Valuation allowance increase related to the decrease in projected future taxable income 19.4 Net loss $ (289.1 ) |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information by segment | Operating information by segment was as follows (dollars in millions): 2016 2015 2014 Revenues: Bankers Life: Insurance policy income: Annuities $ 22.0 $ 22.4 $ 26.0 Health 1,244.1 1,251.0 1,287.1 Life 393.0 375.3 338.6 Net investment income (a) 936.8 884.7 957.3 Fee revenue and other income (a) 34.4 27.7 29.3 Total Bankers Life revenues 2,630.3 2,561.1 2,638.3 Washington National: Insurance policy income: Annuities 2.9 3.0 4.0 Health 627.9 615.4 597.6 Life 25.0 25.4 24.4 Net investment income (a) 259.3 253.6 276.1 Fee revenue and other income (a) 1.3 1.3 1.1 Total Washington National revenues 916.4 898.7 903.2 Colonial Penn: Insurance policy income: Health 2.6 3.0 3.6 Life 278.8 260.5 242.4 Net investment income (a) 44.2 43.0 41.7 Fee revenue and other income (a) 1.1 1.0 1.0 Total Colonial Penn revenues 326.7 307.5 288.7 Long-term care in run-off: Insurance policy income - health 4.8 — — Net investment income (a) 9.4 — — Total Long-term care in run-off revenues 14.2 — — Corporate operations: Net investment income 16.6 11.3 14.9 Fee revenue and other income 10.0 8.6 6.7 Total corporate revenues 26.6 19.9 21.6 Total revenues 3,914.2 3,787.2 3,851.8 (continued on next page) (continued from previous page) 2016 2015 2014 Expenses: Bankers Life: Insurance policy benefits $ 1,620.6 $ 1,588.4 $ 1,667.6 Amortization 176.5 187.1 174.7 Interest expense on investment borrowings 13.2 8.8 7.9 Other operating costs and expenses 422.1 407.2 401.2 Total Bankers Life expenses 2,232.4 2,191.5 2,251.4 Washington National: Insurance policy benefits 561.7 546.6 536.2 Amortization 59.1 55.2 64.6 Interest expense on investment borrowings 3.7 2.0 1.7 Other operating costs and expenses 189.0 183.4 189.5 Total Washington National expenses 813.5 787.2 792.0 Colonial Penn: Insurance policy benefits 201.9 189.0 173.2 Amortization 15.3 14.4 15.3 Interest expense on investment borrowings .6 .1 — Other operating costs and expenses 107.2 98.4 99.4 Total Colonial Penn expenses 325.0 301.9 287.9 Long-term care in run-off: Insurance policy benefits 17.6 — — Other operating costs and expenses .5 — — Total Long-term care in run-off expenses 18.1 — — Corporate operations: Interest expense on corporate debt 45.8 45.0 43.9 Interest expense on investment borrowings — .2 .1 Other operating costs and expenses 69.1 38.6 49.1 Total corporate expenses 114.9 83.8 93.1 Total expenses 3,503.9 3,364.4 3,424.4 Pre-tax operating earnings by segment: Bankers Life 397.9 369.6 386.9 Washington National 102.9 111.5 111.2 Colonial Penn 1.7 5.6 .8 Long-term care in run-off (3.9 ) — — Corporate operations (88.3 ) (63.9 ) (71.5 ) Pre-tax operating earnings $ 410.3 $ 422.8 $ 427.4 ___________________ (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 is as follows (dollars in millions): 2016 2015 2014 Total segment revenues $ 3,914.2 $ 3,787.2 $ 3,851.8 Net realized investment gains (losses) 8.3 (36.6 ) 33.9 Revenues related to certain non-strategic investments and earnings attributable to VIEs 52.6 36.3 33.2 Fee revenue related to transition and support services agreements 10.0 25.0 15.0 Revenues of CLIC prior to being sold — — 210.8 Consolidated revenues 3,985.1 3,811.9 4,144.7 Total segment expenses 3,503.9 3,364.4 3,424.4 Insurance policy benefits - fair value changes in embedded derivative liabilities (11.3 ) (15.7 ) 48.5 Amortization related to fair value changes in embedded derivative liabilities 1.7 3.8 (12.5 ) Amortization related to net realized investment gains (losses) .7 (.5 ) 1.0 Expenses related to certain non-strategic investments and expenses (earnings) attributable to VIEs 54.6 43.0 41.2 Fair value changes and amendment related to agent deferred compensation plan (3.1 ) (15.1 ) 26.8 Loss on extinguishment or modification of debt — 32.8 .6 Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses 75.4 9.0 239.8 Expenses related to transition and support services agreements 10.0 22.5 12.4 Expenses of CLIC prior to being sold — — 187.4 Consolidated expenses 3,631.9 3,444.2 3,969.6 Income before tax 353.2 367.7 175.1 Income tax expense: Tax expense on period income 127.8 129.5 159.2 Valuation allowance for deferred tax assets and other tax items (132.8 ) (32.5 ) (35.5 ) Net income $ 358.2 $ 270.7 $ 51.4 |
Schedule of balance sheet information, by segment | Segment balance sheet information was as follows (dollars in millions): 2016 2015 Assets: Bankers Life $ 19,876.4 $ 19,067.8 Washington National 7,555.7 7,948.5 Colonial Penn 1,022.9 985.4 Long-term care in run-off 656.2 — Corporate operations 2,864.0 3,123.4 Total assets $ 31,975.2 $ 31,125.1 Liabilities: Bankers Life $ 17,144.9 $ 16,612.0 Washington National 6,096.9 6,665.1 Colonial Penn 898.5 869.3 Long-term care in run-off 562.2 — Corporate operations 2,785.8 2,840.2 Total liabilities $ 27,488.3 $ 26,986.6 |
Schedule of selected financial information, by segment | The following table presents selected financial information of our segments (dollars in millions): Segment Present value of future profits Deferred acquisition costs Insurance liabilities 2016 Bankers Life $ 95.5 $ 646.2 $ 15,702.8 Washington National 266.8 299.9 5,586.7 Colonial Penn 39.5 98.6 809.6 Long-term care in run-off — — 554.7 Total $ 401.8 $ 1,044.7 $ 22,653.8 2015 Bankers Life $ 114.9 $ 718.2 $ 15,234.1 Washington National 290.2 280.0 6,126.2 Colonial Penn 43.9 85.1 782.9 Total $ 449.0 $ 1,083.3 $ 22,143.2 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Schedule of quarterly financial information | Quarterly financial data (unaudited) were as follows (dollars in millions, except per share data): 2016 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Revenues $ 960.4 $ 1,003.9 $ 1,015.9 $ 1,004.9 Income before income taxes $ 40.5 $ 82.7 $ 49.3 $ 180.7 Income tax expense (benefit) (5.0 ) 22.8 30.7 (53.5 ) Net income $ 45.5 $ 59.9 $ 18.6 $ 234.2 Earnings per common share: Basic: Net income $ .25 $ .34 $ .11 $ 1.35 Diluted: Net income $ .25 $ .33 $ .11 $ 1.34 2015 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Revenues $ 978.3 $ 959.5 $ 904.5 $ 969.6 Income before income taxes $ 82.3 $ 72.7 $ 52.4 $ 160.3 Income tax expense 29.5 25.9 18.6 23.0 Net income $ 52.8 $ 46.8 $ 33.8 $ 137.3 Earnings per common share: Basic: Net income $ .26 $ .24 $ .18 $ .74 Diluted: Net income $ .26 $ .24 $ .18 $ .73 |
INVESTMENTS IN VARIABLE INTER46
INVESTMENTS IN VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [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 (dollars in millions): December 31, 2016 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,724.3 $ — $ 1,724.3 Notes receivable of VIEs held by insurance subsidiaries — (204.2 ) (204.2 ) Cash and cash equivalents held by variable interest entities 189.3 — 189.3 Accrued investment income 3.0 (.1 ) 2.9 Income tax assets, net 6.4 (1.3 ) 5.1 Other assets 13.1 (1.8 ) 11.3 Total assets $ 1,936.1 $ (207.4 ) $ 1,728.7 Liabilities: Other liabilities $ 81.8 $ (6.4 ) $ 75.4 Borrowings related to variable interest entities 1,662.8 — 1,662.8 Notes payable of VIEs held by insurance subsidiaries 203.3 (203.3 ) — Total liabilities $ 1,947.9 $ (209.7 ) $ 1,738.2 December 31, 2015 VIEs Eliminations Net effect on consolidated balance sheet Assets: Investments held by variable interest entities $ 1,633.6 $ — $ 1,633.6 Notes receivable of VIEs held by insurance subsidiaries — (204.3 ) (204.3 ) Cash and cash equivalents held by variable interest entities 364.4 — 364.4 Accrued investment income 3.3 — 3.3 Income tax assets, net 26.0 (1.9 ) 24.1 Other assets 1.4 (1.5 ) (.1 ) Total assets $ 2,028.7 $ (207.7 ) $ 1,821.0 Liabilities: Other liabilities $ 196.6 $ (7.2 ) $ 189.4 Borrowings related to variable interest entities 1,676.4 — 1,676.4 Notes payable of VIEs held by insurance subsidiaries 204.0 (204.0 ) — Total liabilities $ 2,077.0 $ (211.2 ) $ 1,865.8 |
Supplemental information, revenues and expenses of variable interest entities | The following table provides supplemental information about the revenues and expenses of the VIEs which have been consolidated in accordance with authoritative guidance, after giving effect to the elimination of our investment in the VIEs and investment management fees earned by a subsidiary of the Company (dollars in millions): 2016 2015 2014 Revenues: Net investment income – policyholder and reinsurer accounts and other special-purpose portfolios $ 78.9 $ 62.1 $ 47.2 Fee revenue and other income 6.4 1.6 1.1 Total revenues 85.3 63.7 48.3 Expenses: Interest expense 53.1 38.8 30.1 Other operating expenses 1.5 2.0 1.2 Total expenses 54.6 40.8 31.3 Income before net realized investment losses and income taxes 30.7 22.9 17.0 Net realized investment losses (20.4 ) (6.4 ) (2.2 ) Income before income taxes $ 10.3 $ 16.5 $ 14.8 |
Summary of variable interest entities by contractual maturity | The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at December 31, 2016 , 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 $ 20.5 $ 20.0 Due after one year through five years 846.5 853.1 Due after five years through ten years 841.6 851.2 Total $ 1,708.6 $ 1,724.3 The following table sets forth the amortized cost and estimated fair value of those investments held by the VIEs with unrealized losses at December 31, 2016 , 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 $ 10.5 $ 9.9 Due after one year through five years 175.2 172.5 Due after five years through ten years 55.8 55.3 Total $ 241.5 $ 237.7 |
BUSINESS AND BASIS OF PRESENT47
BUSINESS AND BASIS OF PRESENTATION (NARRATIVE) (Details) | 12 Months Ended |
Dec. 31, 2016distribution_channel | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of product distribution channels | 3 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (PRESENT VALUE OF FUTURE PROFITS) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Discount rate used to determine present value of future profits | 12.00% |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (REINSURANCE) (NARRATIVE) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2013USD ($)subsidiary | Jun. 30, 2014USD ($) | Dec. 31, 2016USD ($)subsidiary | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2016USD ($) | |
Accounting Policies [Abstract] | ||||||
Company retains no more than this amount of mortality risk | $ 0.8 | |||||
Ceded premiums written | 123.9 | $ 133.6 | $ 176.7 | |||
Reinsurance benefits netted against insurance policy benefits | 130.1 | 167.7 | 195.3 | |||
Assumed premiums written | $ 34 | $ 38.5 | $ 35 | |||
Number of insurance subsidiaries | subsidiary | 2 | 3 | ||||
Percent of coinsurance agreements | 100.00% | |||||
Ceded long-term reserves | $ 495 | |||||
Additional premiums paid by subsidiaries to enter into coinsurance agreement | $ 96.9 | |||||
Over-collateralization rate of market-value trusts | 7.00% | |||||
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | ||||||
Market value of investments | $ 504.7 | |||||
Insurance liabilities | (552.2) | |||||
Write-off of reinsurance receivables | (17.9) | |||||
Estimated transaction expenses | (10) | |||||
Pre-tax loss | (75.4) | |||||
Tax benefit | 26.4 | |||||
Increase in valuation allowance for deferred tax assets | (4.1) | |||||
After-tax loss | $ (53.1) | |||||
Gain related to other reinsurance transactions | $ 3.8 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (INCOME TAXES) (NARRATIVE) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounting Policies [Abstract] | ||||
Valuation allowance | $ 240.2 | $ 213.5 | $ 246 | $ 294.8 |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (INVESTMENTS IN VARIABLE INTEREST ENTITIES) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Accounting Policies [Abstract] | |
Investments held in limited partnerships | $ 251.9 |
Unfunded commitments to limited partnerships | $ 217.7 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (INVESTMENT BORROWINGS) (Details) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2013subsidiary | Dec. 31, 2016USD ($)subsidiary | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Number of insurance subsidiaries | subsidiary | 2 | 3 | ||
Investment borrowings | $ 1,647,400,000 | $ 1,548,100,000 | ||
Repurchase agreements, borrowings outstanding | 0 | 0 | ||
Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Federal home loan bank stock | 71,200,000 | |||
Investment borrowings | 1,647,400,000 | |||
Fair value of collateral for borrowings | 2,000,000,000 | |||
Aggregate fee to prepay all fixed rate FHLB borrowings | 2,600,000 | |||
Interest expense on FHLB borrowings | 17,500,000 | $ 10,900,000 | $ 18,700,000 | |
Borrowings due January 2018 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Jan. 31, 2018 | |||
Interest rate | 1.226% | |||
Borrowings due January 2018 rate two [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Jan. 31, 2018 | |||
Interest rate | 1.222% | |||
Borrowings due February 2018 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Feb. 28, 2018 | |||
Interest rate | 1.191% | |||
Borrowings due February 2018 rate two [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Feb. 28, 2018 | |||
Interest rate | 1.001% | |||
Borrowings due February 2018 rate three [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 22,000,000 | |||
Maturity date | Feb. 28, 2018 | |||
Interest rate | 1.267% | |||
Borrowings due May 2018 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 100,000,000 | |||
Maturity date | May 30, 2018 | |||
Interest rate | 1.206% | |||
Borrowings due July 2018 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Jul. 31, 2018 | |||
Interest rate | 1.36% | |||
Borrowings due August 2018 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Aug. 31, 2018 | |||
Interest rate | 1.022% | |||
Borrowings due December 2018 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 10,000,000 | |||
Maturity date | Dec. 31, 2018 | |||
Interest rate | 1.266% | |||
Borrowings due January 2019 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Jan. 31, 2019 | |||
Interest rate | 1.30% | |||
Borrowings due February 2019 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Feb. 28, 2019 | |||
Interest rate | 1.001% | |||
Borrowings due March 2019 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 100,000,000 | |||
Maturity date | Mar. 31, 2019 | |||
Interest rate | 1.216% | |||
Borrowings due July 2019 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 21,800,000 | |||
Maturity date | Jul. 31, 2019 | |||
Interest rate | 1.234% | |||
Borrowings due October 2019 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 15,000,000 | |||
Maturity date | Oct. 31, 2019 | |||
Interest rate | 1.399% | |||
Borrowing due May 2020 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | May 31, 2020 | |||
Interest rate | 1.224% | |||
Borrowings due June 2020 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 21,800,000 | |||
Maturity date | Jun. 30, 2020 | |||
Interest rate | 1.96% | |||
Borrowing due September 2020, Rate One [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 25,000,000 | |||
Maturity date | Sep. 30, 2020 | |||
Interest rate | 1.622% | |||
Borrowings due September 2020, Rate Two [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 100,000,000 | |||
Maturity date | Sep. 30, 2020 | |||
Interest rate | 1.416% | |||
Borrowings due September 2020, Rate Three [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Sep. 30, 2020 | |||
Interest rate | 1.416% | |||
Borrowings due September 2020, Rate Four [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 75,000,000 | |||
Maturity date | Sep. 30, 2020 | |||
Interest rate | 1.118% | |||
Borrowings due October 2020 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 100,000,000 | |||
Maturity date | Oct. 31, 2020 | |||
Interest rate | 1.109% | |||
Borrowings due December 2020 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Dec. 31, 2020 | |||
Interest rate | 1.335% | |||
Borrowings Due July 2021 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 100,000,000 | |||
Maturity date | Jul. 31, 2021 | |||
Interest rate | 1.431% | |||
Borrowings due July 2021 Rate Two [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 57,700,000 | |||
Maturity date | Jul. 31, 2021 | |||
Interest rate | 1.411% | |||
Borrowings Due August 2021, Rate One [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 100,000,000 | |||
Maturity date | Aug. 31, 2021 | |||
Interest rate | 1.40% | |||
Borrowings Due August 2021, Rate Two [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Maturity date | Aug. 31, 2021 | |||
Interest rate | 2.55% | |||
Borrowings Due August 2021, Rate Two [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 28,200,000 | |||
Borrowings Due August 2021, Rate Three [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 125,000,000 | |||
Maturity date | Aug. 31, 2021 | |||
Interest rate | 1.236% | |||
Borrowings Due September 2021 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 50,000,000 | |||
Maturity date | Sep. 30, 2021 | |||
Interest rate | 1.477% | |||
Borrowings due March 2023 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 25,400,000 | |||
Maturity date | Mar. 31, 2023 | |||
Interest rate | 2.16% | |||
Borrowings due June 2025 [Member] | Federal Home Loan Bank Advances [Member] | ||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||
Investment borrowings | $ 20,500,000 | |||
Maturity date | Jun. 30, 2025 | |||
Interest rate | 2.94% |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (ACCOUNTING FOR DERIVATIVES) (NARRATIVE) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2014USD ($) | |
Accounting Policies [Abstract] | |
Gain related to other reinsurance transactions | $ 3.8 |
SUMMARY OF SIGNIFICANT ACCOUN54
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (MULTIBUCKET ANNUITY PRODUCTS) (NARRATIVE) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Return of premium annual percentage, multibucket annuity | 3.00% | |
Insurance liabilities held, related to multibucket annuity products | $ 32.8 | $ 37.5 |
SUMMARY OF SIGNIFICANT ACCOUN55
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (SALE OF INDUCEMENTS) (NARRATIVE) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Deferred sales inducements | $ 3.4 | $ 3.8 | $ 5.1 |
Deferred sales inducements, amortization expense | 11.4 | 13.8 | $ 12.4 |
Unamortized deferred sales inducements | 49.4 | 57.4 | |
Insurance liabilities for persistency bonus benefits | $ 0.5 | $ 0.9 |
SUMMARY OF SIGNIFICANT ACCOUN56
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (OUT-OF-PERIOD ADJUSTMENTS) (NARRATIVE) (Details) - Out of Period Adjustment [Member] $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($)$ / shares | |
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 in tax expense | 0.8 |
Out of period adjustment, effect on net income | $ 1.6 |
Adjustment to earnings per diluted share (in dollars per share) | $ / shares | $ 0.01 |
INVESTMENTS (NARRATIVE) (Detail
INVESTMENTS (NARRATIVE) (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)investmentstate | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)investment | |
Schedule of Available-for-sale Securities [Line Items] | |||
Premium deficiencies adjustments to present value of future profits | $ (94,100,000) | $ (109,300,000) | |
Reduction to deferred acquisition costs due to unrealized gains that would result in premium deficiency if unrealized gains were realized | (96,400,000) | (33,200,000) | |
Adjustment to insurance liabilities | (13,500,000) | (14,600,000) | |
Increase to deferred tax assets due to unrealized gains that would result in premium deficiency if unrealized gains were realized | 72,500,000 | 55,800,000 | |
Fixed maturities, available for sale, amortized cost | 19,803,100,000 | 18,947,000,000 | |
Estimated fair value | 21,096,200,000 | 19,882,900,000 | |
Carrying value of fixed maturity investments and mortgage loans not accruing investment income | 44,100,000 | 0 | |
Net realized investment gains (losses) | 8,300,000 | (36,600,000) | $ 36,700,000 |
Net realized investment gains (losses), excluding impairment losses | 47,900,000 | (8,000,000) | 64,000,000 |
Gain (loss) on dissolution of variable interest entities | (7,300,000) | 11,300,000 | 0 |
Total other-than-temporary impairment losses | 35,900,000 | 42,900,000 | 27,300,000 |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 3,600,000 | 3,000,000 | $ 0 |
Number of legacy private company investments | investment | 2 | ||
Net impairment losses recognized | $ (32,300,000) | (39,900,000) | $ (27,300,000) |
Number of investments in default or considered nonperforming | investment | 5 | ||
Fixed maturities in default, aggregate amortized cost | $ 19,200,000 | ||
Fixed maturities in default, carrying value | 28,300,000 | ||
Value of available for sale securities sold | 790,200,000 | 724,400,000 | 233,700,000 |
Impairment losses related to writedown of mortgage loans which losses major tenants | 6,800,000 | ||
Other than temporary impairment losses, losses on other investments following unforeseen events | 5,400,000 | 5,400,000 | 1,400,000 |
Other-than-temporary impairments included in accumulated other comprehensive income | 8,000,000 | 4,900,000 | |
Estimated fair value | $ 5,395,200,000 | ||
Percent of fixed maturities | 25.60% | ||
Number of additional states greater than specified percentage of mortgage loan balance | state | 0 | ||
Assets held by insurance regulators | $ 36,700,000 | 38,200,000 | |
Minimum [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of mortgage loan balance | 5.00% | ||
Maximum [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of commercial loan balance that is noncurrent | 0.00% | ||
California [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of mortgage loan balance | 14.00% | ||
Texas [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of mortgage loan balance | 9.00% | ||
Maryland [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of mortgage loan balance | 7.00% | ||
Florida [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of mortgage loan balance | 6.00% | ||
Total fixed maturities, available for sale [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net realized investment gains (losses) | $ 30,900,000 | (7,600,000) | 51,400,000 |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 3,600,000 | 3,000,000 | 0 |
Net impairment losses recognized | (15,200,000) | (17,900,000) | 0 |
Gross realized losses on sale | 95,200,000 | 88,400,000 | 13,000,000 |
States and political subdivisions [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized losses on sale | 700,000 | ||
Corporate securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized losses on sale | 12,300,000 | ||
Equity securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net realized investment gains (losses) | 20,900,000 | 3,700,000 | 10,100,000 |
Embedded Derivative Financial Instruments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Loss on embedded derivatives | 400,000 | 9,200,000 | |
Gain on embedded derivatives | 7,600,000 | ||
Coinsurance [Member] | Embedded Derivative Financial Instruments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Loss on embedded derivatives | 7,000,000 | ||
Gain on embedded derivatives | 800,000 | 2,000,000 | |
Marketable Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net realized investment gains (losses), excluding impairment losses | 47,500,000 | 8,200,000 | 54,400,000 |
Corporate securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized losses on sale | 79,200,000 | ||
Fixed income investments [Member] | Energy Sector [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total other-than-temporary impairment losses | 9,300,000 | 10,200,000 | |
Gross realized losses on sale | 63,500,000 | 59,700,000 | |
Commercial bank loans held by VIEs [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total other-than-temporary impairment losses | 1,200,000 | 16,400,000 | |
Legacy private company investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total other-than-temporary impairment losses | 7,900,000 | $ 19,100,000 | |
Commercial Mortgage Backed Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized losses on sale | 5,800,000 | ||
Asset-backed securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized losses on sale | 5,700,000 | ||
Other Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized losses on sale | 4,500,000 | ||
Direct Loan [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total other-than-temporary impairment losses | 3,700,000 | ||
Preferred Stock [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total other-than-temporary impairment losses | 12,700,000 | ||
Non Investment Grade [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Fixed maturities, available for sale, amortized cost | $ 3,070,000,000 | 2,234,500,000 | |
Percentage of available-for-sale debt securities | 16.00% | ||
Estimated fair value | $ 3,147,800,000 | 2,222,800,000 | |
Available-for-sale securities, percentage of amortized cost | 103.00% | ||
Other-than-temporary impairments included in accumulated other comprehensive income | $ 8,000,000 | $ 4,900,000 | |
Continuous unrealized loss position | 20.00% |
INVESTMENTS (SCHEDULE OF FIXED
INVESTMENTS (SCHEDULE OF FIXED MATURITIES FOR AVAILABLE FOR SALE AND EQUITY SECURITIES) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 19,803.1 | $ 18,947 |
Gross unrealized gains | 1,487.4 | 1,324.4 |
Gross unrealized losses | (194.3) | (388.5) |
Estimated fair value | 21,096.2 | 19,882.9 |
Other-than-temporary impairments included in accumulated other comprehensive income | (8) | (4.9) |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 580.7 | 447.4 |
Gross unrealized gains | 11.5 | 18.4 |
Gross unrealized losses | (8) | (2.8) |
Estimated fair value | 584.2 | 463 |
Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 16,733.1 | 16,712.5 |
Gross unrealized gains | 1,359.2 | 1,241.4 |
Gross unrealized losses | (143.9) | (293.8) |
Estimated fair value | 17,948.4 | 17,660.1 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Corporate securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 11,582.6 | 11,477.5 |
Gross unrealized gains | 1,073.9 | 929.4 |
Gross unrealized losses | (99.8) | (262.9) |
Estimated fair value | 12,556.7 | 12,144 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | US treasury and government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 143.8 | 172.5 |
Gross unrealized gains | 20.5 | 22.3 |
Gross unrealized losses | 0 | (0.3) |
Estimated fair value | 164.3 | 194.5 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | States and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,798.2 | 1,889.6 |
Gross unrealized gains | 186.7 | 208.6 |
Gross unrealized losses | (7.9) | (3.7) |
Estimated fair value | 1,977 | 2,094.5 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Debt securities issued by foreign governments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 37.1 | 18.9 |
Gross unrealized gains | 0.2 | 0 |
Gross unrealized losses | (0.4) | (0.6) |
Estimated fair value | 36.9 | 18.3 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,169.6 | 979.8 |
Gross unrealized gains | 29.2 | 22.1 |
Gross unrealized losses | (8.7) | (7.2) |
Estimated fair value | 1,190.1 | 994.7 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Collateralized debt obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 227.5 | 188.5 |
Gross unrealized gains | 1 | 0.4 |
Gross unrealized losses | (0.3) | (2.2) |
Estimated fair value | 228.2 | 186.7 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Commercial Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,467.2 | 1,531.7 |
Gross unrealized gains | 32.9 | 41.3 |
Gross unrealized losses | (26.6) | (16.3) |
Estimated fair value | 1,473.5 | 1,556.7 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Mortgage pass-through securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2.3 | 3.1 |
Gross unrealized gains | 0.2 | 0.3 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 2.5 | 3.4 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Investment Grade [Member] | Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 304.8 | 450.9 |
Gross unrealized gains | 14.6 | 17 |
Gross unrealized losses | (0.2) | (0.6) |
Estimated fair value | 319.2 | 467.3 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Non Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 3,070 | 2,234.5 |
Gross unrealized gains | 128.2 | 83 |
Gross unrealized losses | (50.4) | (94.7) |
Estimated fair value | 3,147.8 | 2,222.8 |
Other-than-temporary impairments included in accumulated other comprehensive income | (8) | (4.9) |
Non Investment Grade [Member] | Corporate securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 967.3 | 798.5 |
Gross unrealized gains | 26.1 | 8.3 |
Gross unrealized losses | (39.2) | (82.3) |
Estimated fair value | 954.2 | 724.5 |
Other-than-temporary impairments included in accumulated other comprehensive income | (3.6) | 0 |
Non Investment Grade [Member] | States and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 13.6 | 13.6 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (1.7) | (3.9) |
Estimated fair value | 11.9 | 9.7 |
Other-than-temporary impairments included in accumulated other comprehensive income | (3) | (3) |
Non Investment Grade [Member] | Debt securities issued by foreign governments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2.4 | |
Gross unrealized gains | 0 | |
Gross unrealized losses | 0 | |
Estimated fair value | 2.4 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Non Investment Grade [Member] | Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,471.9 | 838 |
Gross unrealized gains | 55.1 | 25.7 |
Gross unrealized losses | (6.8) | (6.2) |
Estimated fair value | 1,520.2 | 857.5 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Non Investment Grade [Member] | Collateralized debt obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2.5 | |
Gross unrealized gains | 0 | |
Gross unrealized losses | 0 | |
Estimated fair value | 2.5 | |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | |
Non Investment Grade [Member] | Commercial Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 63.8 | 49.9 |
Gross unrealized gains | 0.2 | 0 |
Gross unrealized losses | (1.3) | (1.3) |
Estimated fair value | 62.7 | 48.6 |
Other-than-temporary impairments included in accumulated other comprehensive income | 0 | 0 |
Non Investment Grade [Member] | Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 550.9 | 532.1 |
Gross unrealized gains | 46.8 | 49 |
Gross unrealized losses | (1.4) | (1) |
Estimated fair value | 596.3 | 580.1 |
Other-than-temporary impairments included in accumulated other comprehensive income | $ (1.4) | $ (1.9) |
INVESTMENTS (SUMMARY OF FIXED M
INVESTMENTS (SUMMARY OF FIXED MATURITY SECURITIES AVAILABLE FOR SALE) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 19,803.1 | $ 18,947 |
Estimated fair value | $ 21,096.2 | $ 19,882.9 |
Percentage of total estimated fair value | 100.00% | |
NAIC designation 1 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 9,715.7 | |
Estimated fair value | $ 10,463.2 | |
Percentage of total estimated fair value | 49.60% | |
NAIC designation 2 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 8,973.1 | |
Estimated fair value | $ 9,526.4 | |
Percentage of total estimated fair value | 45.20% | |
Total NAIC Designation 1 and 2 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 18,688.8 | |
Estimated fair value | $ 19,989.6 | |
Percentage of total estimated fair value | 94.80% | |
NAIC designation 3 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 711.7 | |
Estimated fair value | $ 705.4 | |
Percentage of total estimated fair value | 3.30% | |
NAIC designation 4 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 233 | |
Estimated fair value | $ 229.4 | |
Percentage of total estimated fair value | 1.10% | |
NAIC designation 5 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 141.3 | |
Estimated fair value | $ 138.3 | |
Percentage of total estimated fair value | 0.60% | |
NAIC designation 6 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 28.3 | |
Estimated fair value | $ 33.5 | |
Percentage of total estimated fair value | 0.20% | |
Total NAIC Designation 3, 4, 5 and 6 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 1,114.3 | |
Estimated fair value | $ 1,106.6 | |
Percentage of total estimated fair value | 5.20% |
INVESTMENTS (SCHEDULE OF ACCUMU
INVESTMENTS (SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
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 | $ (1.1) | $ 1.6 |
Net unrealized gains on all other investments | 1,311.9 | 903.4 |
Adjustment to present value of future profits | (106.2) | (121.2) |
Adjustment to deferred acquisition costs | (223.5) | (133.3) |
Adjustment to insurance liabilities | (13.5) | (14.6) |
Unrecognized net loss related to deferred compensation plan | 0 | (8.6) |
Deferred income tax liabilities | (345.2) | (224.5) |
Accumulated other comprehensive income | $ 622.4 | $ 402.8 |
INVESTMENTS (SCHEDULE OF INVEST
INVESTMENTS (SCHEDULE OF INVESTMENTS CLASSIFIED BY CONTRACTUAL MATURITY DATE) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Due in one year or less | $ 354.7 | |
Due after one year through five years | 2,243.8 | |
Due after five years through ten years | 1,549.1 | |
Due after ten years | 10,395 | |
Subtotal | 14,542.6 | |
Structured securities | 5,260.5 | |
Amortized cost | 19,803.1 | $ 18,947 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date [Abstract] | ||
Due in one year or less | 359.8 | |
Due after one year through five years | 2,399.5 | |
Due after five years through ten years | 1,620.8 | |
Due after ten years | 11,320.9 | |
Subtotal | 15,701 | |
Structured securities | 5,395.2 | |
Estimated fair value | $ 21,096.2 | $ 19,882.9 |
INVESTMENTS (SCHEDULE OF INVE62
INVESTMENTS (SCHEDULE OF INVESTMENT INCOME) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Fixed maturities | $ 1,081.4 | $ 1,090.1 | $ 1,175.8 |
Equity securities | 21.5 | 18.3 | 13.9 |
Mortgage loans | 91 | 91.4 | 104.2 |
Policy loans | 7.3 | 7.3 | 11 |
Other invested assets | 24.3 | 17.4 | 17.1 |
Cash and cash equivalents | 2 | 0.8 | 0.6 |
Trading securities | 12.2 | 10.7 | 14.8 |
Option income (loss) | (40.1) | 36.5 | 118.9 |
Change in value of options | 69.3 | (72.7) | (49.4) |
Other special-purpose portfolios | 79.7 | 55.5 | 42.1 |
Gross investment income | 1,348.6 | 1,255.3 | 1,449 |
Less investment expenses | 23.4 | 21.7 | 21.6 |
Net investment income | 1,325.2 | 1,233.6 | 1,427.4 |
Investment Income [Member] | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Increase (decrease) in trading securities | $ (0.2) | $ 0.4 | $ 3.4 |
INVESTMENTS (SCHEDULE OF REALIZ
INVESTMENTS (SCHEDULE OF REALIZED GAIN (LOSS) ON INVESTMENTS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investment [Line Items] | |||
Net impairment losses recognized | $ (32.3) | $ (39.9) | $ (27.3) |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 3.6 | 3 | 0 |
Net realized investment gains (losses) | 8.3 | (36.6) | 36.7 |
Gain (loss) on dissolution of variable interest entities | (7.3) | 11.3 | 0 |
Total fixed maturities, available for sale [Member] | |||
Investment [Line Items] | |||
Gross realized gains on sale | 137.7 | 95.7 | 64.4 |
Gross realized losses on sale | (95.2) | (88.4) | (13) |
Net impairment losses recognized | (15.2) | (17.9) | 0 |
Other-than-temporary impairment losses recognized in accumulated other comprehensive income | 3.6 | 3 | 0 |
Net impairment losses recognized | (11.6) | (14.9) | 0 |
Net realized investment gains (losses) | 30.9 | (7.6) | 51.4 |
Equity securities [Member] | |||
Investment [Line Items] | |||
Net realized investment gains (losses) | 20.9 | 3.7 | 10.1 |
Commercial mortgage loans [Member] | |||
Investment [Line Items] | |||
Net realized investment gains (losses) | 0 | (2.3) | (0.1) |
Impairments of preferred stock and other investments [Member] | |||
Investment [Line Items] | |||
Net realized investment gains (losses) | (20.7) | (25) | (27.3) |
Other [Member] | |||
Investment [Line Items] | |||
Net realized investment gains (losses) | (15.5) | (16.7) | 2.6 |
Investments [Member] | |||
Investment [Line Items] | |||
Change in estimated fair value of trading securities | $ (0.5) | $ (9.2) | $ 7.8 |
INVESTMENTS (SCHEDULE OF INVE64
INVESTMENTS (SCHEDULE OF INVESTMENTS IN OUR PORTFOLIO RATED BELOW-INVESTMENT GRADE WHICH HAVE BEEN CONTINUOUSLY IN AN UNREALIZED LOSS POSITION 1) (Details) - Fixed Maturities [Member] $ in Millions | Dec. 31, 2016USD ($)issuer |
Schedule of Available-for-sale Securities [Line Items] | |
Less than 6 months prior to sale, Number of issuers | issuer | 19 |
Greater than or equal to 6 months and less than 12 months prior to sale, Number of issuers | issuer | 7 |
Number of issuers, Total | issuer | 26 |
Less than 6 months prior to sale, Amortized cost | $ 119.3 |
Greater than or equal to 6 months and less than 12 months prior to sale, Amortized cost | 76.4 |
Amortized cost, Total | 195.7 |
Less than 6 months prior to sale, Fair value | 79.2 |
Greater than or equal to 6 months and less than 12 months prior to sale, Fair value | 45.6 |
Fair value, Total | $ 124.8 |
INVESTMENTS (SCHEDULE OF CREDIT
INVESTMENTS (SCHEDULE OF CREDIT LOSSES RECOGNIZED IN EARNINGS) (Details) - Available-for-sale securities [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ (2.6) | $ (1) | $ (1.3) |
Add: credit losses on other-than-temporary impairments not previously recognized | (3) | (2) | 0 |
Less: credit losses on securities sold | 0.1 | 0.4 | 0.3 |
Less: credit losses on securities impaired due to intent to sell | 0 | 0 | 0 |
Add: credit losses on previously impaired securities | 0 | 0 | 0 |
Less: increases in cash flows expected on previously impaired securities | 0 | 0 | 0 |
Credit losses on fixed maturity securities, available for sale, end of period | $ (5.5) | $ (2.6) | $ (1) |
INVESTMENTS (SCHEDULE OF INVE66
INVESTMENTS (SCHEDULE OF INVESTMENTS WITH UNREALIZED LOSSES CLASSIFIED BY CONTRACTUAL MATURITY DATE) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Amortized cost | |
Due in one year or less | $ 35.7 |
Due after one year through five years | 150.4 |
Due after five years through ten years | 389.3 |
Due after ten years | 2,262.3 |
Subtotal | 2,837.7 |
Structured securities | 1,857.2 |
Total | 4,694.9 |
Estimated fair value | |
Due in one year or less | 35 |
Due after one year through five years | 145.9 |
Due after five years through ten years | 370.9 |
Due after ten years | 2,136.9 |
Subtotal | 2,688.7 |
Structured securities | 1,811.9 |
Total | $ 4,500.6 |
INVESTMENTS (SCHEDULE OF INVE67
INVESTMENTS (SCHEDULE OF INVESTMENTS IN OUR PORTFOLIO RATED BELOW-INVESTMENT GRADE WHICH HAVE BEEN CONTINUOUSLY IN AN UNREALIZED LOSS POSITION 2) (Details) $ in Millions | Dec. 31, 2016USD ($)issuer | Dec. 31, 2015USD ($) |
Schedule of Available-for-sale Securities [Line Items] | ||
Greater than 12 months, Unrealized losses | $ (84.8) | $ (97.2) |
Unrealized losses, total | (194.3) | (388.5) |
Greater than 12 months, Estimated fair value | 1,059.8 | 495 |
Fair value, total | $ 4,500.6 | $ 5,310 |
Non Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 6 months, Number of issuers | issuer | 4 | |
Greater than 12 months, Number of issuers | issuer | 1 | |
Less than 6 months, Cost basis | $ 53.8 | |
Greater than 12 months, Cost basis | 0.7 | |
Cost basis, Total | 54.5 | |
Less than 6 months, Unrealized loss | (12.1) | |
Greater than 12 months, Unrealized losses | (0.2) | |
Unrealized losses, total | (12.3) | |
Less than 6 months, Estimated fair value | 41.7 | |
Greater than 12 months, Estimated fair value | 0.5 | |
Fair value, total | $ 42.2 |
INVESTMENTS (SCHEDULE OF UNREAL
INVESTMENTS (SCHEDULE OF UNREALIZED LOSS ON INVESTMENTS) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | $ 3,440.8 | $ 4,815 |
Unrealized losses, less than 12 months | (109.5) | (291.3) |
Fair value, twelve months or greater, Fair value | 1,059.8 | 495 |
Unrealized losses, 12 months or greater | (84.8) | (97.2) |
Fair value, total | 4,500.6 | 5,310 |
Unrealized losses, total | (194.3) | (388.5) |
US treasury and government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 8 | 43.6 |
Unrealized losses, less than 12 months | 0 | (0.3) |
Fair value, twelve months or greater, Fair value | 0 | 0 |
Unrealized losses, 12 months or greater | 0 | 0 |
Fair value, total | 8 | 43.6 |
Unrealized losses, total | 0 | (0.3) |
States and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 176.3 | 156.8 |
Unrealized losses, less than 12 months | (7.8) | (4.1) |
Fair value, twelve months or greater, Fair value | 18.3 | 14.8 |
Unrealized losses, 12 months or greater | (1.8) | (3.5) |
Fair value, total | 194.6 | 171.6 |
Unrealized losses, total | (9.6) | (7.6) |
Debt securities issued by foreign governments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 18.9 | 20.7 |
Unrealized losses, less than 12 months | (0.4) | (0.6) |
Fair value, twelve months or greater, Fair value | 0 | 0 |
Unrealized losses, 12 months or greater | 0 | 0 |
Fair value, total | 18.9 | 20.7 |
Unrealized losses, total | (0.4) | (0.6) |
Corporate securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 1,907.6 | 2,913.6 |
Unrealized losses, less than 12 months | (75.5) | (255.7) |
Fair value, twelve months or greater, Fair value | 559.6 | 278.9 |
Unrealized losses, 12 months or greater | (63.5) | (89.5) |
Fair value, total | 2,467.2 | 3,192.5 |
Unrealized losses, total | (139) | (345.2) |
Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 692.9 | 930.3 |
Unrealized losses, less than 12 months | (8.5) | (11.7) |
Fair value, twelve months or greater, Fair value | 262.5 | 98.4 |
Unrealized losses, 12 months or greater | (7) | (1.7) |
Fair value, total | 955.4 | 1,028.7 |
Unrealized losses, total | (15.5) | (13.4) |
Collateralized debt obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 38.3 | 96.2 |
Unrealized losses, less than 12 months | (0.1) | (1.8) |
Fair value, twelve months or greater, Fair value | 30.8 | 36.3 |
Unrealized losses, 12 months or greater | (0.2) | (0.4) |
Fair value, total | 69.1 | 132.5 |
Unrealized losses, total | (0.3) | (2.2) |
Commercial Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 525.2 | 556 |
Unrealized losses, less than 12 months | (16.6) | (16.1) |
Fair value, twelve months or greater, Fair value | 154 | 25.7 |
Unrealized losses, 12 months or greater | (11.3) | (1.5) |
Fair value, total | 679.2 | 581.7 |
Unrealized losses, total | (27.9) | (17.6) |
Mortgage pass-through securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 0 | |
Unrealized losses, less than 12 months | 0 | |
Fair value, twelve months or greater, Fair value | 0.1 | |
Unrealized losses, 12 months or greater | 0 | |
Fair value, total | 0.1 | |
Unrealized losses, total | 0 | |
Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 73.6 | 97.8 |
Unrealized losses, less than 12 months | (0.6) | (1) |
Fair value, twelve months or greater, Fair value | 34.6 | 40.8 |
Unrealized losses, 12 months or greater | (1) | (0.6) |
Fair value, total | 108.2 | 138.6 |
Unrealized losses, total | (1.6) | (1.6) |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value, less than twelve months | 239.4 | 140.1 |
Unrealized losses, less than 12 months | (8) | (2.4) |
Fair value, twelve months or greater, Fair value | 0 | 2.4 |
Unrealized losses, 12 months or greater | 0 | (0.4) |
Fair value, total | 239.4 | 142.5 |
Unrealized losses, total | $ (8) | $ (2.8) |
INVESTMENTS (SCHEDULE OF STRUCT
INVESTMENTS (SCHEDULE OF STRUCTURED SECURITIES) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | $ 6,106.3 |
Amortized cost | 5,260.5 |
Estimated fair value | $ 5,395.2 |
Percent of fixed maturities | 25.60% |
Pass-throughs, sequential and equivalent securities[Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Amortized cost | $ 664.8 |
Estimated fair value | $ 710.6 |
Percent of fixed maturities | 3.40% |
Planned amortization classes, target amortization classes and accretion-directed bonds [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Amortized cost | $ 142.5 |
Estimated fair value | $ 156.4 |
Percent of fixed maturities | 0.70% |
Commercial Mortgage Backed Securities [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Amortized cost | $ 1,531 |
Estimated fair value | $ 1,536.2 |
Percent of fixed maturities | 7.30% |
Asset-backed securities [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Amortized cost | $ 2,641.5 |
Estimated fair value | $ 2,710.3 |
Percent of fixed maturities | 12.90% |
Collateralized debt obligations [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Amortized cost | $ 230 |
Estimated fair value | $ 230.7 |
Percent of fixed maturities | 1.10% |
Other [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Amortized cost | $ 50.7 |
Estimated fair value | $ 51 |
Percent of fixed maturities | 0.20% |
Below 4 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | $ 1,993.9 |
Amortized cost | 1,523.5 |
Estimated fair value | 1,535.4 |
4 Percent - 5 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | 1,757.6 |
Amortized cost | 1,592.5 |
Estimated fair value | 1,624.7 |
5 Percent - 6 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | 1,772.2 |
Amortized cost | 1,602.2 |
Estimated fair value | 1,666.7 |
6 Percent - 7 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | 388.1 |
Amortized cost | 348 |
Estimated fair value | 364.5 |
7 Percent - 8 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | 55.8 |
Amortized cost | 56.2 |
Estimated fair value | 65.6 |
8 Percent and Above [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Par value | 138.7 |
Amortized cost | 138.1 |
Estimated fair value | $ 138.3 |
Minimum [Member] | 4 Percent - 5 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 4.00% |
Minimum [Member] | 5 Percent - 6 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 5.00% |
Minimum [Member] | 6 Percent - 7 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 6.00% |
Minimum [Member] | 7 Percent - 8 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 7.00% |
Minimum [Member] | 8 Percent and Above [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 8.00% |
Maximum [Member] | Below 4 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 4.00% |
Maximum [Member] | 4 Percent - 5 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 5.00% |
Maximum [Member] | 5 Percent - 6 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 6.00% |
Maximum [Member] | 6 Percent - 7 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 7.00% |
Maximum [Member] | 7 Percent - 8 Percent [Member] | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Structured settlement, interest rate | 8.00% |
INVESTMENTS (SUMMARY OF WEIGHTE
INVESTMENTS (SUMMARY OF WEIGHTED AVERAGE LOAN-TO-VALUE RATIO FOR OUTSTANDING MORTGAGE LOANS) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | $ 1,768 | $ 1,721 |
Carrying value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 1,768 | |
Estimate of fair value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 1,800.1 | |
Collateral | 3,505.8 | |
Less than 60% [Member] | Carrying value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 976.5 | |
Less than 60% [Member] | Estimate of fair value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 1,004.2 | |
Collateral | $ 2,393 | |
Less than 60% [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 60.00% | |
60% to 70% [Member] | Carrying value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | $ 394.7 | |
60% to 70% [Member] | Estimate of fair value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 396.7 | |
Collateral | $ 596.2 | |
60% to 70% [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 60.00% | |
60% to 70% [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 70.00% | |
Greater than 70% to 80% [Member] | Carrying value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | $ 282.3 | |
Greater than 70% to 80% [Member] | Estimate of fair value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 286.2 | |
Collateral | $ 385.1 | |
Greater than 70% to 80% [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 70.00% | |
Greater than 70% to 80% [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 80.00% | |
Greater than 80% to 90% [Member] | Carrying value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | $ 75.3 | |
Greater than 80% to 90% [Member] | Estimate of fair value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 74 | |
Collateral | $ 89.5 | |
Greater than 80% to 90% [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 80.00% | |
Greater than 80% to 90% [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 90.00% | |
Greater than 90% [Member] | Carrying value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | $ 39.2 | |
Greater than 90% [Member] | Estimate of fair value [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage loans | 39 | |
Collateral | $ 42 | |
Greater than 90% [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loan to value ratio | 90.00% |
FAIR VALUE MEASUREMENTS (NARRAT
FAIR VALUE MEASUREMENTS (NARRATIVE) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage | 45.00% |
Available for sale fixed maturities classified as level 3, investment grade, percent | 46.00% |
Available for sale fixed maturities classified as level 3, corporate securities, percent | 72.00% |
FAIR VALUE MEASUREMENTS (FAIR V
FAIR VALUE MEASUREMENTS (FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS MEASURED ON A RECURRING BASIS - SECURITIES) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | $ 21,096.2 | $ 19,882.9 |
Trading securities | 363.4 | 262.1 |
Investments held by variable interest entities - corporate securities | 1,724.3 | 1,633.6 |
Assets held in separate accounts | 4.7 | 4.7 |
Fair value, measurements, recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 363.4 | 262.1 |
Investments held by variable interest entities - corporate securities | 1,724.3 | 1,633.6 |
Assets held in separate accounts | 4.7 | 4.7 |
Total assets carried at fair value by category | 23,884.7 | 22,288.9 |
Fair value, measurements, recurring [Member] | Derivatives [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 111.9 | 42.6 |
Fair value, measurements, recurring [Member] | Embedded derivatives associated with fixed index annuity products [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities for insurance products | 1,092.3 | 1,057.1 |
Fair value, measurements, recurring [Member] | Corporate securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 13,510.9 | 12,868.5 |
Equity securities - corporate securities | 584.2 | 463 |
Trading securities | 19 | 21.5 |
Fair value, measurements, recurring [Member] | US treasury and government [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 164.3 | 194.5 |
Trading securities | 0.5 | 1.9 |
Fair value, measurements, recurring [Member] | States and political subdivisions [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,988.9 | 2,104.2 |
Fair value, measurements, recurring [Member] | Debt securities issued by foreign governments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 36.9 | 20.7 |
Fair value, measurements, recurring [Member] | Asset-backed securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 2,710.3 | 1,852.2 |
Trading securities | 94.3 | 35.5 |
Fair value, measurements, recurring [Member] | Collateralized debt obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 230.7 | 186.7 |
Trading securities | 2.4 | 2.1 |
Fair value, measurements, recurring [Member] | Commercial Mortgage Backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,536.2 | 1,605.3 |
Trading securities | 163.9 | 158 |
Fair value, measurements, recurring [Member] | Mortgage pass-through securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 2.5 | 3.4 |
Fair value, measurements, recurring [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 915.5 | 1,047.4 |
Trading securities | 78.4 | 38.2 |
Fair value, measurements, recurring [Member] | Total fixed maturities, available for sale [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 21,096.2 | 19,882.9 |
Fair value, measurements, recurring [Member] | Equity securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 4.9 | 4.9 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 4.9 | 4.9 |
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 | 364.8 | 261.4 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Derivatives [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 0 | 1.6 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Embedded derivatives associated with fixed index annuity products [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities for insurance products | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Corporate securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Equity securities - corporate securities | 359.9 | 254.9 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | US treasury and government [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | States and political subdivisions [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Debt securities issued by foreign governments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Asset-backed securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Collateralized debt obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Commercial Mortgage Backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Mortgage pass-through securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Total fixed maturities, available for sale [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Equity securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 4.9 | 4.9 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 358.5 | 217.3 |
Investments held by variable interest entities - corporate securities | 1,724.3 | 1,633.6 |
Assets held in separate accounts | 4.7 | 4.7 |
Total assets carried at fair value by category | 23,134.5 | 21,748.1 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Derivatives [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 111.9 | 41 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Embedded derivatives associated with fixed index annuity products [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities for insurance products | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Corporate securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 13,252.4 | 12,698.1 |
Equity securities - corporate securities | 199.1 | 176.1 |
Trading securities | 19 | 21.5 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | US treasury and government [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 164.3 | 194.5 |
Trading securities | 0.5 | 1.9 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | States and political subdivisions [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,988.9 | 2,104.2 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Debt securities issued by foreign governments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 33 | 20.7 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Asset-backed securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 2,649.9 | 1,816.3 |
Trading securities | 94.3 | 35.5 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Collateralized debt obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 225.3 | 186.7 |
Trading securities | 2.4 | 2.1 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Commercial Mortgage Backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 1,504.2 | 1,604.2 |
Trading securities | 163.9 | 118.1 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Mortgage pass-through securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 2.5 | 3.3 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 915.5 | 1,047.4 |
Trading securities | 78.4 | 38.2 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Total fixed maturities, available for sale [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 20,736 | 19,675.4 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Equity securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 0 | 39.9 |
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 | 385.4 | 279.4 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Derivatives [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other invested assets - derivatives | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Embedded derivatives associated with fixed index annuity products [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities for insurance products | 1,092.3 | 1,057.1 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Corporate securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 258.5 | 170.4 |
Equity securities - corporate securities | 25.2 | 32 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | US treasury and government [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | States and political subdivisions [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Debt securities issued by foreign governments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 3.9 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Asset-backed securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 60.4 | 35.9 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Collateralized debt obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 5.4 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Commercial Mortgage Backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 32 | 1.1 |
Trading securities | 0 | 39.9 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Mortgage pass-through securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0.1 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 0 | 0 |
Trading securities | 0 | 0 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Total fixed maturities, available for sale [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total fixed maturities, available for sale | 360.2 | 207.5 |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Equity securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (FAIR73
FAIR VALUE MEASUREMENTS (FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS MEASURED ON A RECURRING BASIS - FINANCIAL INSTRUMENTS) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents - unrestricted | $ 478.9 | $ 432.3 | $ 611.6 | $ 699 |
Cash and cash equivalents - held by variable interest entities | 189.3 | 364.4 | ||
Fair value, measurements, recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Mortgage loans | 1,768 | 1,721 | ||
Policy loans | 112 | 109.4 | ||
Company-owned life insurance | 165 | 158.1 | ||
Cash and cash equivalents - unrestricted | 478.9 | 432.3 | ||
Cash and cash equivalents - held by variable interest entities | 189.3 | 364.4 | ||
Policyholder account balances | 10,912.7 | 10,762.3 | ||
Investment borrowings | 1,647.4 | 1,548.1 | ||
Borrowings related to variable interest entities | 1,662.8 | 1,676.4 | ||
Notes payable – direct corporate obligations | 912.9 | 911.1 | ||
Fair value, measurements, recurring [Member] | Estimate of fair value measurement [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Mortgage loans | 1,800.1 | 1,772.4 | ||
Policy loans | 112 | 109.4 | ||
Company-owned life insurance | 165 | 158.1 | ||
Cash and cash equivalents - unrestricted | 478.9 | 432.3 | ||
Cash and cash equivalents - held by variable interest entities | 189.3 | 364.4 | ||
Policyholder account balances | 10,912.7 | 10,762.3 | ||
Investment borrowings | 1,650 | 1,549.8 | ||
Borrowings related to variable interest entities | 1,675.2 | 1,673.6 | ||
Notes payable – direct corporate obligations | 931.9 | 937.8 | ||
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 | ||
Cash and cash equivalents - unrestricted | 473.6 | 432.3 | ||
Cash and cash equivalents - held by variable interest entities | 189.3 | 364.4 | ||
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 | 165 | 158.1 | ||
Cash and cash equivalents - unrestricted | 5.3 | 0 | ||
Cash and cash equivalents - held by variable interest entities | 0 | 0 | ||
Policyholder account balances | 0 | 0 | ||
Investment borrowings | 1,650 | 1,549.8 | ||
Borrowings related to variable interest entities | 1,675.2 | 1,673.6 | ||
Notes payable – direct corporate obligations | 931.9 | 937.8 | ||
Fair value, measurements, recurring [Member] | Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Mortgage loans | 1,800.1 | 1,772.4 | ||
Policy loans | 112 | 109.4 | ||
Company-owned life insurance | 0 | 0 | ||
Cash and cash equivalents - unrestricted | 0 | 0 | ||
Cash and cash equivalents - held by variable interest entities | 0 | 0 | ||
Policyholder account balances | 10,912.7 | 10,762.3 | ||
Investment borrowings | 0 | 0 | ||
Borrowings related to variable interest entities | 0 | 0 | ||
Notes payable – direct corporate obligations | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (FAIR74
FAIR VALUE MEASUREMENTS (FAIR VALUE ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Future policy benefits - embedded derivatives associated with fixed index annuity products [Member] | ||
Liabilities: | ||
Beginning balance | $ (1,057.1) | $ (1,081.5) |
Purchases, sales, issuances and settlements, net | (96) | (11.9) |
Total realized and unrealized gains (losses) included in net income | 60.8 | 36.3 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | 0 |
Ending balance | (1,092.3) | (1,057.1) |
Amount of total gains (losses) for the year included in our net income related to liabilities still held as of the reporting date | 60.8 | 36.3 |
Corporate securities [Member] | ||
Assets: | ||
Beginning balance | 170.4 | 365.9 |
Purchases, sales, issuances and settlements, net | 76.5 | 31 |
Total realized and unrealized gains (losses) included in net income | (10.7) | (2.2) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 9.1 | (19.5) |
Transfers into level 3 | 20.3 | 37.4 |
Transfers out of level 3 | (7.1) | (242.2) |
Ending balance | 258.5 | 170.4 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | (10.9) | 0 |
States and political subdivisions [Member] | ||
Assets: | ||
Beginning balance | 0 | 35.5 |
Purchases, sales, issuances and settlements, net | (35.5) | |
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 | |
Ending balance | 0 | |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | 0 | |
Foreign Government Debt Securities [Member] | ||
Assets: | ||
Beginning balance | 0 | |
Purchases, sales, issuances and settlements, net | 4 | |
Total realized and unrealized gains (losses) included in net income | 0 | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (0.1) | |
Transfers into level 3 | 0 | |
Transfers out of level 3 | 0 | |
Ending balance | 3.9 | 0 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | 0 | |
Asset-backed securities [Member] | ||
Assets: | ||
Beginning balance | 35.9 | 59.2 |
Purchases, sales, issuances and settlements, net | 9.7 | 6.7 |
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) | 2.2 | (1.4) |
Transfers into level 3 | 26.3 | 0 |
Transfers out of level 3 | (13.7) | (28.6) |
Ending balance | 60.4 | 35.9 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Collateralized debt obligations [Member] | ||
Assets: | ||
Beginning balance | 0 | |
Purchases, sales, issuances and settlements, net | 5.4 | |
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 | |
Ending balance | 5.4 | 0 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | 0 | |
Commercial Mortgage Backed Securities [Member] | ||
Assets: | ||
Beginning balance | 1.1 | 1.2 |
Purchases, sales, issuances and settlements, net | 16.9 | (0.1) |
Total realized and unrealized gains (losses) included in net income | 0 | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.1 | 0 |
Transfers into level 3 | 13.9 | 0 |
Transfers out of level 3 | 0 | 0 |
Ending balance | 32 | 1.1 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Mortgage pass-through securities [Member] | ||
Assets: | ||
Beginning balance | 0.1 | 0.4 |
Purchases, sales, issuances and settlements, net | (0.1) | (0.3) |
Total realized and unrealized gains (losses) included in net income | 0 | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | 0 |
Ending balance | 0 | 0.1 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Total fixed maturities, available for sale [Member] | ||
Assets: | ||
Beginning balance | 207.5 | 462.2 |
Purchases, sales, issuances and settlements, net | 112.4 | 1.8 |
Total realized and unrealized gains (losses) included in net income | (10.7) | (2.2) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 11.3 | (20.9) |
Transfers into level 3 | 60.5 | 37.4 |
Transfers out of level 3 | (20.8) | (270.8) |
Ending balance | 360.2 | 207.5 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | (10.9) | 0 |
Equity securities - corporate securities [Member] | ||
Assets: | ||
Beginning balance | 32 | 28 |
Purchases, sales, issuances and settlements, net | 5.5 | 4 |
Total realized and unrealized gains (losses) included in net income | (12.7) | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.4 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | 0 |
Ending balance | 25.2 | 32 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | (12.7) | 0 |
Trading securities - commercial mortgage-backed securities [Member] | ||
Assets: | ||
Beginning balance | 39.9 | 28.6 |
Purchases, sales, issuances and settlements, net | 0 | 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) | 0 | 1.8 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | (39.9) | 0 |
Ending balance | 0 | 39.9 |
Amount of total gains (losses) for the year included in our net income relating to assets still held as of the reporting date | $ 0 | $ 1.8 |
FAIR VALUE MEASUREMENTS (FAIR75
FAIR VALUE MEASUREMENTS (FAIR VALUE ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION - ACTIVITY) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Future policy benefits - embedded derivatives associated with fixed index annuity products [Member] | ||
Liabilities: | ||
Purchases | $ (148.3) | $ (137.8) |
Received in reinsurance recapture | 0 | |
Sales | 21.2 | 64.4 |
Issuances | (28.9) | (4) |
Settlements | 60 | 65.5 |
Purchases, sales, issuances and settlements, net | 96 | 11.9 |
Corporate securities [Member] | ||
Assets: | ||
Purchases | 18.5 | 62.2 |
Received in reinsurance recapture | 89.2 | |
Sales | (31.2) | (31.2) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | 76.5 | 31 |
States and political subdivisions [Member] | ||
Assets: | ||
Purchases | 0 | |
Sales | (35.5) | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | (35.5) | |
Foreign Government Debt Securities [Member] | ||
Assets: | ||
Purchases | 4 | |
Received in reinsurance recapture | 0 | |
Sales | 0 | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | 4 | |
Asset-backed securities [Member] | ||
Assets: | ||
Purchases | 16.9 | 13.7 |
Received in reinsurance recapture | 0 | |
Sales | (7.2) | (7) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | 9.7 | 6.7 |
Collateralized debt obligations [Member] | ||
Assets: | ||
Purchases | 5.4 | |
Received in reinsurance recapture | 0 | |
Sales | 0 | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | 5.4 | |
Commercial Mortgage Backed Securities [Member] | ||
Assets: | ||
Purchases | 17 | 0 |
Received in reinsurance recapture | 0 | |
Sales | (0.1) | (0.1) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | 16.9 | (0.1) |
Mortgage pass-through securities [Member] | ||
Assets: | ||
Purchases | 0 | 0 |
Received in reinsurance recapture | 0 | |
Sales | (0.1) | (0.3) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | (0.1) | (0.3) |
Total fixed maturities, available for sale [Member] | ||
Assets: | ||
Purchases | 61.8 | 75.9 |
Received in reinsurance recapture | 89.2 | |
Sales | (38.6) | (74.1) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | 112.4 | 1.8 |
Equity securities - corporate securities [Member] | ||
Assets: | ||
Purchases | 3.3 | 4 |
Received in reinsurance recapture | 2.2 | |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | 5.5 | 4 |
Trading securities, corporate securities [Member] | ||
Assets: | ||
Purchases | 0.2 | |
Received in reinsurance recapture | 0 | |
Sales | (0.2) | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | 0 | |
Trading securities - commercial mortgage-backed securities [Member] | ||
Assets: | ||
Purchases | 9.5 | |
Sales | 0 | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | $ 0 | $ 9.5 |
FAIR VALUE MEASUREMENTS (FAIR76
FAIR VALUE MEASUREMENTS (FAIR VALUE INPUTS) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 26,237.6 | $ 24,487.1 |
Other invested assets | 589.5 | 415.1 |
Policyholder account balances | 10,912.7 | 10,762.3 |
Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 385.4 | 279.4 |
Income Approach Valuation Technique [Member] | Level 3 [Member] | Corporate securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 148.5 | $ 76.9 |
Weighted average discount rate | 13.52% | 5.35% |
Income Approach Valuation Technique [Member] | Level 3 [Member] | Corporate securities [Member] | Minimum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 1.35% | 1.65% |
Income Approach Valuation Technique [Member] | Level 3 [Member] | Corporate securities [Member] | Maximum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 27.71% | 9.74% |
Income Approach Valuation Technique [Member] | Level 3 [Member] | Asset-backed securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 24 | $ 22.2 |
Weighted average discount rate | 2.76% | 3.50% |
Income Approach Valuation Technique [Member] | Level 3 [Member] | Asset-backed securities [Member] | Minimum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 2.06% | 2.83% |
Income Approach Valuation Technique [Member] | Level 3 [Member] | Asset-backed securities [Member] | Maximum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 3.64% | 4.45% |
Cost Approach Valuation Technique [Member] | Level 3 [Member] | Corporate securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 14.8 | |
Weighted average discount rate | 55.00% | |
Cost Approach Valuation Technique [Member] | Level 3 [Member] | Corporate securities [Member] | Minimum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 5.00% | |
Cost Approach Valuation Technique [Member] | Level 3 [Member] | Corporate securities [Member] | Maximum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate | 69.00% | |
Market Approach Valuation Technique [Member] | Level 3 [Member] | Equity securities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 25.2 | $ 32 |
Weighted average projected cash flows | 5.90% | |
Market Approach Valuation Technique [Member] | Level 3 [Member] | Equity securities [Member] | Minimum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Projected cash flows | 0.40% | |
Market Approach Valuation Technique [Member] | Level 3 [Member] | Equity securities [Member] | Maximum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Projected cash flows | 6.20% | |
Unadjusted Third-Party Price Source [Member] | Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Other invested assets | $ 172.9 | 148.3 |
Discounted Projected Embedded Derivatives [Member] | Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Policyholder account balances | $ 1,092.3 | $ 1,057.1 |
Discounted Projected Embedded Derivatives [Member] | Level 3 [Member] | Interest sensitive products [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Weighted average projected portfolio yields | 5.59% | 5.42% |
Weighted average discount rates | 2.07% | 1.94% |
Weighted average surrender rates | 13.52% | 14.09% |
Discounted Projected Embedded Derivatives [Member] | Level 3 [Member] | Interest sensitive products [Member] | Minimum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Projected portfolio yields | 5.15% | 5.15% |
Discount rates | 0.18% | 0.00% |
Surrender rates | 0.94% | 1.67% |
Discounted Projected Embedded Derivatives [Member] | Level 3 [Member] | Interest sensitive products [Member] | Maximum [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Projected portfolio yields | 5.61% | 5.61% |
Discount rates | 3.06% | 3.18% |
Surrender rates | 46.48% | 46.56% |
LIABILITIES FOR INSURANCE PRO77
LIABILITIES FOR INSURANCE PRODUCTS (SCHEDULE OF INSURANCE LIABILITIES BY PRODUCT SEGMENT) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Future policy benefits | $ 10,953.3 | $ 10,602.1 |
Policyholder account balance | $ 10,912.7 | 10,762.3 |
Long-term Care in Run-off [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Interest rate assumption | 6.00% | |
Future policy benefits | $ 5,346.1 | 5,172.2 |
Traditional Life Insurance Contracts [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Interest rate assumption | 5.00% | |
Future policy benefits | $ 2,322.1 | 2,248.7 |
Accident and Health Contract [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Interest rate assumption | 5.00% | |
Future policy benefits | $ 2,695.6 | 2,589.9 |
Interest-sensitive Life Insurance Contract [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Interest rate assumption | 5.00% | |
Future policy benefits | $ 52.2 | 44.7 |
Policyholder account balance | $ 1,046.4 | 992.8 |
Annuities and Supplemental Contract with Life Contingencies [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Interest rate assumption | 4.00% | |
Future policy benefits | $ 537.3 | 546.6 |
Fixed Index Annuity [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Policyholder account balance | 5,324.5 | 4,884.4 |
Other Annuity [Member] | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
Policyholder account balance | $ 4,541.8 | $ 4,885.1 |
LIABILITIES FOR INSURANCE PRO78
LIABILITIES FOR INSURANCE PRODUCTS (SUMMARY OF LIABILITIES FOR UNPAID CLAIMS ADJUSTMENT EXPENSE) (Details) - Accident and Health Insurance Product Line [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balance, beginning of year | $ 1,731.8 | $ 1,679.5 | $ 1,710.1 |
Less reinsurance receivables (payables) | 130 | 125 | 164.1 |
Net balance, beginning of year | 1,601.8 | 1,554.5 | 1,546 |
Incurred claims related to: | |||
Current year | 1,526.4 | 1,481 | 1,468.1 |
Prior years | 96.6 | (13.3) | (39.9) |
Total incurred | 1,623 | 1,467.7 | 1,428.2 |
Interest on claim reserves | 75.3 | 71 | 70.5 |
Paid claims related to: | |||
Current year | 837.2 | 841.8 | 848.7 |
Prior years | 671.3 | 649.6 | 641.5 |
Total paid | 1,508.5 | 1,491.4 | 1,490.2 |
Net balance, end of year | 1,791.6 | 1,601.8 | 1,554.5 |
Add reinsurance receivables (payables) | (14) | 130 | 125 |
Balance, end of year | $ 1,777.6 | $ 1,731.8 | $ 1,679.5 |
INCOME TAXES (NARRATIVE) (Detai
INCOME TAXES (NARRATIVE) (Details) $ in Millions | May 08, 2013 | Dec. 31, 2016USD ($)position | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | May 11, 2010 | Jan. 20, 2009right |
Operating Loss Carryforwards [Line Items] | ||||||||
Deferred tax assets more likely than not to be realized through future taxable earnings | $ 785.6 | $ 785.6 | $ 946.6 | |||||
Deferred tax assets | 1,025.8 | 1,025.8 | 1,160.1 | |||||
Valuation allowance | $ 240.2 | $ 240.2 | 213.5 | $ 246 | $ 294.8 | |||
Aggregate growth rate for the next five years | 3.00% | 3.00% | ||||||
Forecast period of model | 5 years | |||||||
Adjusted average taxable income | $ 335 | |||||||
Adjusted average nonlife taxable income | 85 | |||||||
Adjusted average life taxable income | 250 | |||||||
Increase (decrease) in valuation allowance | $ (26.7) | 32.5 | 48.8 | |||||
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 | 1.68% | 1.68% | ||||||
Ownership change threshold restricting NOL usage | 50.00% | 50.00% | ||||||
Ownership percentage threshold relating to company 382 securities | 4.99% | |||||||
Number of rights for each share | right | 1 | |||||||
Ownership percentage threshold relating to company 382 provision, ownership percentage at which transfers of common stock become void (less than) | 4.99% | 5.00% | ||||||
Section 382 Charter amendment, extension term | 3 years | |||||||
Net operating loss carryforwards | $ 2,522.6 | $ 2,522.6 | ||||||
Unrecognized tax benefits that would impact effective tax rate | 0 | 0 | 155.4 | |||||
Unrecognized tax benefits, income tax penalties and interest accrued | $ 0 | 0 | 3.2 | |||||
Number of tax positions settled | position | 2 | |||||||
Net state operating loss carryforwards | $ 12.3 | $ 12.3 | 14.1 | |||||
Future cash tax payments as a percent of life insurance, taxable income due | 65.00% | |||||||
NOL carryforwards related to the deductions for stock options and restricted stock | 15.7 | $ 15.7 | ||||||
IRS settlement | 118.7 | (170.4) | 0 | 0 | ||||
Reduction in interest recognized from prior periods on alternative minimum tax | 3.4 | |||||||
Decrease to income tax accrued | (11.7) | $ 92.9 | $ 119.7 | |||||
Domestic Tax Authority [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Valuation allowance | 230.2 | 230.2 | ||||||
State and Local Jurisdiction [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Valuation allowance | 10 | 10 | ||||||
Internal Revenue Service (IRS) [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss carryforwards | 2,500 | 2,500 | ||||||
Life Insurance Related NOLs [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax Benefits Recognized On IRS Settlement | 280.7 | |||||||
Additional life net operating loss carryforwards | 98.2 | 98.2 | ||||||
Decrease to income tax accrued | (50) | |||||||
Non-Life Insurance Related NOLs [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Increase (decrease) in valuation allowance | (51.7) | |||||||
Additional life net operating loss carryforwards | 17.1 | $ 17.1 | ||||||
Non-Life Insurance Related NOLs, Classification Of Loss On Investment [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax Benefits Recognized On IRS Settlement | 130 | |||||||
Non-Life Insurance Related NOLs, Bad Debt Deduction On Stock Purchase Loan [Member] | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax Benefits Recognized On IRS Settlement | $ 66.7 |
INCOME TAXES (SCHEDULE OF COMPO
INCOME TAXES (SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||
Current tax expense (benefit) | $ (45.2) | $ 10.7 | $ 15.6 | ||||||||
Deferred tax expense | 173 | 118.6 | 143.6 | ||||||||
Valuation allowance applicable to current year income | (14) | 0 | 0 | ||||||||
Income tax expense calculated based on estimated annual effective tax rate | 113.8 | 129.3 | 159.2 | ||||||||
Tax expense related to the sale of Conseco Life Insurance Company | 0 | 0 | 14.2 | ||||||||
Change in valuation allowance | 40.7 | (32.5) | (48.8) | ||||||||
IRS settlement | $ 118.7 | (170.4) | 0 | 0 | |||||||
Other items | 10.9 | 0.2 | (0.9) | ||||||||
Total income tax expense (benefit) | $ (53.5) | $ 30.7 | $ 22.8 | $ (5) | $ 23 | $ 18.6 | $ 25.9 | $ 29.5 | $ (5) | $ 97 | $ 123.7 |
INCOME TAXES (SCHEDULE OF EFFEC
INCOME TAXES (SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILLIATION) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory corporate rate | 35.00% | 35.00% | 35.00% |
Valuation allowance | 7.60% | (8.80%) | (27.90%) |
Non-taxable income and nondeductible benefits, net | (1.10%) | (0.20%) | (0.90%) |
State taxes | 2.20% | 2.10% | 1.50% |
Impact of IRS settlement | (48.20%) | 0.00% | 0.00% |
Impact of the sale of CLIC | 0.00% | 0.00% | 66.30% |
Other items | 3.10% | (1.70%) | (3.40%) |
Effective tax rate | (1.40%) | 26.40% | 70.60% |
INCOME TAXES (SCHEDULE OF DEFER
INCOME TAXES (SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||||
Net federal operating loss carryforwards | $ 882.9 | $ 916.3 | ||
Net state operating loss carryforwards | 12.3 | 14.1 | ||
Tax credits | 0.7 | 55.3 | ||
Capital loss carryforwards | 0 | 13.8 | ||
Investments | 17.8 | 26.5 | ||
Insurance liabilities | 668.4 | 600.3 | ||
Other | 65.6 | 63 | ||
Gross deferred tax assets | 1,647.7 | 1,689.3 | ||
Deferred tax liabilities: | ||||
Present value of future profits and deferred acquisition costs | (277.8) | (305.4) | ||
Accumulated other comprehensive income | (344.1) | (223.8) | ||
Gross deferred tax liabilities | (621.9) | (529.2) | ||
Net deferred tax assets before valuation allowance | 1,025.8 | 1,160.1 | ||
Valuation allowance | (240.2) | (213.5) | $ (246) | $ (294.8) |
Net deferred tax assets | 785.6 | 946.6 | ||
Current income taxes prepaid (accrued) | 4.1 | (47.8) | ||
Income tax assets, net | $ 789.7 | $ 898.8 |
INCOME TAXES (SUMMARY OF VALUAT
INCOME TAXES (SUMMARY OF VALUATION ALLOWANCE) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Increase (Decrease) in Valuation Allowance [Roll Forward] | |||
Beginning valuation allowance | $ 213.5 | $ 246 | $ 294.8 |
Change in valuation allowance | 26.7 | (32.5) | (48.8) |
Ending valuation allowance | $ 240.2 | $ 213.5 | $ 246 |
INCOME TAXES (SUMMARY OF OPERAT
INCOME TAXES (SUMMARY OF OPERATING LOSS CARRYFORWARDS) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 2,522.6 |
2023 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2023 |
Net operating loss carryforwards | $ 1,936 |
2025 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2025 |
Net operating loss carryforwards | $ 85.2 |
2026 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2026 |
Net operating loss carryforwards | $ 149.9 |
2027 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2027 |
Net operating loss carryforwards | $ 10.8 |
2028 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2028 |
Net operating loss carryforwards | $ 80.3 |
2029 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2029 |
Net operating loss carryforwards | $ 213.2 |
2030 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2030 |
Net operating loss carryforwards | $ 0.3 |
2031 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2031 |
Net operating loss carryforwards | $ 0.2 |
2032 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2032 |
Net operating loss carryforwards | $ 44.4 |
2033 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2033 |
Net operating loss carryforwards | $ 0.6 |
2034 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Year of expiration | Dec. 31, 2034 |
Net operating loss carryforwards | $ 1.7 |
INCOME TAXES (RECONCILIATION OF
INCOME TAXES (RECONCILIATION OF UNRECOGNIZED TAX BENEFITS) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 234.2 | $ 228.7 |
Increase based on tax positions taken in prior years | 3.4 | 5.5 |
Decrease in unrecognized tax benefits related to settlements with taxing authorities | (237.6) | 0 |
Balance at end of year | $ 0 | $ 234.2 |
NOTES PAYABLE - DIRECT CORPOR86
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (SCHEDULE OF LONG-TERM DEBT INSTRUMENTS) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | May 19, 2015 | Sep. 28, 2012 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 912.9 | $ 911.1 | ||
Unamortized debt issuance costs | (12.1) | (13.9) | ||
Senior Notes [Member] | Senior Note 4.500 Percent [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 325 | 325 | ||
Interest rate | 4.50% | |||
Senior Notes [Member] | Senior Note 5.250 Percent [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 500 | 500 | ||
Interest rate | 5.25% | |||
Senior Notes [Member] | Senior Secured Note 6.375 Percent [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.375% | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 100 | $ 100 |
NOTES PAYABLE - DIRECT CORPOR87
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (NEW NOTES) (NARRATIVE) (Details) - USD ($) | May 19, 2015 | Dec. 31, 2016 | Sep. 28, 2012 |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Event of default ownership percentage threshold to declare payment | 25.00% | ||
Senior Notes [Member] | Senior Note 4.500 Percent [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 325,000,000 | ||
Interest rate | 4.50% | ||
Senior Notes [Member] | Senior Note 5.250 Percent [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 500,000,000 | ||
Interest rate | 5.25% | ||
Senior Notes [Member] | Senior Note 5.250 Percent [Member] | On and After February 28, 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Redemption price, percent | 100.00% | ||
Senior Notes [Member] | Senior Note 5.250 Percent [Member] | Change of Control Repurchase Event [Member] | |||
Debt Instrument [Line Items] | |||
Redemption price, percent | 101.00% | ||
Senior Notes [Member] | Senior Secured Note 6.375 Percent [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.375% | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 150,000,000 | ||
Debt instrument, term | 4 years |
NOTES PAYABLE - DIRECT CORPOR88
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (NEW REVOLVING CREDIT AGREEMENT) (NARRATIVE) (Details) - Line of Credit [Member] - USD ($) | May 19, 2015 | Dec. 31, 2016 |
Revolving Credit Facility [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 | |
Interest rate on amounts outstanding at period end | 2.77% | |
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 | 30.00% | |
Debt covenant, actual debt to total capitalization ratio at period end | 19.40% | |
Debt covenant, minimum required aggregate total adjusted capital to company action level risk-based capital ratio | 250.00% | |
Debt covenant, actual aggregate total adjusted capital to company action level risk-based capital ratio at period end | 459.00% | |
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 | 50.00% | |
Debt covenant, actual consolidated net worth at period end | $ 3,864,500,000 | |
Debt covenant, required minimum consolidated net worth, amount | $ 2,680,800,000 | |
Revolving Credit Facility [Member] | Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Revolving Credit Facility [Member] | One-Month Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Revolving Credit Facility [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
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 - DIRECT CORPOR89
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (PREVIOUS SENIOR SECURED CREDIT AGREEMENT) (NARRATIVE) (Details) - USD ($) | May 19, 2015 | Sep. 28, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
Amount outstanding prior to repayment | $ 925,000,000 | ||||
Line of Credit [Member] | Secured Debt [Member] | Term Loan Facility, Six-Year [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 6 years | ||||
Amount outstanding prior to repayment | $ 389,800,000 | ||||
Line of Credit [Member] | Secured Debt [Member] | Term Loan Facility, Four-Year [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 4 years | ||||
Amount outstanding prior to repayment | 112,500,000 | ||||
Line of Credit [Member] | Secured Debt [Member] | Senior Secured Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Additional debt payment | $ 19,800,000 | $ 59,400,000 | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 4 years | ||||
Maximum borrowing capacity | $ 150,000,000 | ||||
Line of Credit [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility, Three Year [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 3 years | ||||
Maximum borrowing capacity | $ 50,000,000 |
NOTES PAYABLE - DIRECT CORPOR90
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (6.375% NOTES) (NARRATIVE) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 28, 2012 |
Debt Instrument [Line Items] | |||
Notes payable – direct corporate obligations | $ 912,900,000 | $ 911,100,000 | |
Senior Notes [Member] | Senior Secured Note 6.375 Percent [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable – direct corporate obligations | $ 275,000,000 | ||
Interest rate | 6.375% |
NOTES PAYABLE - DIRECT CORPOR91
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (SOURCES AND USES OF RECAPITALIZATION TRANSACTIONS) (Details) - USD ($) $ in Millions | May 19, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||
Sources of cash for debt refinancing | $ 925 | $ 0 | $ 910 | $ 0 |
Repayments of notes payable | 0 | 797.1 | 62.9 | |
Accrued interest | 4.3 | $ 106 | $ 90 | $ 81.7 |
Debt issuance costs | 16 | |||
General corporate purposes | 109.6 | |||
Total uses | 925 | |||
Senior Debt Obligations [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayments of notes payable | 502.3 | |||
Senior Secured Note 6.375 Percent [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayments of notes payable | 292.8 | |||
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Sources of cash for debt refinancing | 825 | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Sources of cash for debt refinancing | $ 100 |
NOTES PAYABLE - DIRECT CORPOR92
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (LOSS ON EXTINGUISHMENT OF DEBT) (NARRATIVE) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 28, 2012 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment or modification of debt | $ 0 | $ (32.8) | $ (0.6) | |
Convertible Subordinated Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment or modification of debt | $ (0.2) | |||
Senior Debentures 7 Percent [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.00% | |||
Repurchase of remaining principal amount | $ 3.5 | |||
Secured Debt [Member] | Senior Secured Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment or modification of debt | $ (0.4) | |||
Senior Notes [Member] | Senior Secured Note 6.375 Percent [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.375% |
NOTES PAYABLE - DIRECT CORPOR93
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (SCHEDULE OF MATURITIES OF LONG-TERM DEBT) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 0 |
2,018 | 0 |
2,019 | 100 |
2,020 | 325 |
2,021 | 0 |
Thereafter | 500 |
Long-term Debt | $ 925 |
LITIGATION AND OTHER LEGAL PR94
LITIGATION AND OTHER LEGAL PROCEEDINGS (NARRATIVE) (Details) $ in Millions | Dec. 16, 2016USD ($) | Dec. 31, 2016USD ($)stateindividual | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Number of states participating in examination of compliance with unclaimed property laws | state | 38 | |||
Amount of insurance-related assessment liability | $ 24.9 | $ 24 | ||
Premium tax offset for loss contingency accruals | 26.7 | 26.1 | ||
Insurance-related assessment, expense recognized | 2.8 | 1.2 | $ 1.1 | |
Operating leases and sponsorship agreements, expense | $ 56.8 | 48.8 | $ 50.4 | |
Former Chief Executive Officers [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Number of Company's former chief executive officers' retirement benefits guaranteed by subsidiaries | individual | 2 | |||
Deferred compensation arrangement with individual, recorded liability | $ 25 | $ 25.8 | ||
Compensatory Damages [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Damages awarded to plaintiffs | $ 4.7 | |||
Punitive Damages [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Damages awarded to plaintiffs | $ 6 |
LITIGATION AND OTHER LEGAL PR95
LITIGATION AND OTHER LEGAL PROCEEDINGS (SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 32 |
2,018 | 26.5 |
2,019 | 13.2 |
2,020 | 7.7 |
2,021 | 5 |
Thereafter | 5.9 |
Total | $ 90.3 |
AGENT DEFERRED COMPENSATION P96
AGENT DEFERRED COMPENSATION PLAN (NARRATIVE) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Cost recognized for defined contribution plan | $ 5.3 | $ 5 | $ 5.1 | |
Agent Deferred Compensation Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Recognized pre-tax gain related to settlement distributions | $ 6.1 | |||
Pension and other postretirement defined benefit plans, liabilities | 156.3 | 170.8 | ||
Net periodic benefit cost | 8.1 | 2.2 | 36.3 | |
Actuarial net gains (losses) | 3.1 | 15.2 | (24.3) | |
Company-owned life insurance | 165 | 158.1 | ||
Change in value of corporate or bank owned life insurance | $ 6.9 | $ 0.5 | $ 5.7 |
AGENT DEFERRED COMPENSATION P97
AGENT DEFERRED COMPENSATION PLAN (SCHEDULE OF ASSUMPTIONS USED) (Details) - Agent Deferred Compensation Plan [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate - Benefit Obligations | 4.25% | 4.50% |
Discount rate - Net Period Costs | 4.50% | 4.15% |
AGENT DEFERRED COMPENSATION P98
AGENT DEFERRED COMPENSATION PLAN (SCHEDULE OF EXPECTED BENEFIT PAYMENTS) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
2,017 | $ 7 |
2,018 | 7.4 |
2,019 | 7.5 |
2,020 | 7.7 |
2,021 | 7.9 |
2022 - 2026 | $ 43.1 |
DERIVATIVES (FAIR VALUE BY BALA
DERIVATIVES (FAIR VALUE BY BALANCE SHEET LOCATION) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Equity Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative asset | $ 111.9 | $ 41 |
Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative asset | 0 | 0.1 |
Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative asset | 107.7 | 36.1 |
Gross derivative liability | 1,092.3 | 1,057.1 |
Not Designated as Hedging Instrument [Member] | Equity Contract [Member] | Other Invested Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative asset | 111.9 | 41 |
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Invested Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative asset | 0 | 0.1 |
Not Designated as Hedging Instrument [Member] | Reinsurance Receivables - Embedded Derivative [Member] | Other Invested Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative asset | (4.2) | (5) |
Not Designated as Hedging Instrument [Member] | Fixed Index Products [Member] | Future Policy Benefits [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative liability | $ 1,092.3 | $ 1,057.1 |
DERIVATIVES (SCHEDULE OF DERIVA
DERIVATIVES (SCHEDULE OF DERIVATIVE INSTRUMENTS) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)policyContract | |
Interest Rate Contract [Member] | |
Derivative Instrument [Roll Forward] | |
December 31, 2015 | Contract | 264 |
Additions | Contract | 378 |
Maturities/terminations | Contract | (642) |
December 31, 2016 | Contract | 0 |
Embedded Derivative Financial Instruments [Member] | |
Derivative Instrument [Roll Forward] | |
December 31, 2015 | policy | 96,660 |
Additions | policy | 11,237 |
Maturities/terminations | policy | (7,085) |
December 31, 2016 | policy | 100,812 |
Equity Contract [Member] | |
Derivative, Notional Amount [Roll Forward] | |
December 31, 2015 | $ 2,379.7 |
Additions | 2,452.5 |
Maturities/terminations | (2,377.1) |
December 31, 2016 | 2,455.1 |
Embedded Derivative Associated With Modified Coinsurance Agreement [Member] | |
Derivative, Notional Amount [Roll Forward] | |
Mark to market adjustment on embedded derivatives | $ 135 |
DERIVATIVES (SCHEDULE PRE-TAX G
DERIVATIVES (SCHEDULE PRE-TAX GAINS (LOSSES) RECOGNIZED IN NET INCOME FOR DERIVATIVE INSTRUMENTS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | $ 89.7 | $ (9.6) | $ (10.4) |
Investment Income [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | 29.2 | (36.2) | 68.1 |
Investment Income [Member] | Equity Swap [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | 29.2 | (36.2) | 69.5 |
Investment Income [Member] | Embedded Derivative Financial Instruments [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | 0 | 0 | (1.4) |
Gain (Loss) on Investments [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | (0.3) | (9.7) | (5) |
Gain (Loss) on Investments [Member] | Interest Rate Contract [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | (1.1) | (2.7) | (7) |
Gain (Loss) on Investments [Member] | Embedded Derivative Financial Instruments [Member] | Coinsurance [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | 0.8 | (7) | 2 |
Insurance Policy Benefits [Member] | Embedded Derivative Financial Instruments [Member] | |||
Derivative [Line Items] | |||
Gains (losses) on derivative instruments not designated as hedging instruments | $ 60.8 | $ 36.3 | $ (73.5) |
DERIVATIVES (DERIVATIVES WITH M
DERIVATIVES (DERIVATIVES WITH MASTER NETTING ARRANGEMENTS) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Equity Contract [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | $ 111.9 | $ 41 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts of assets presented in the balance sheet | 111.9 | 41 |
Financial instruments | 0 | 0 |
Cash collateral received | 0 | 0 |
Net amount | 111.9 | 41 |
Interest Rate Contract [Member] | ||
Derivative [Line Items] | ||
Gross amounts recognized | 0 | 0.1 |
Gross amounts offset in the balance sheet | 0 | 1.5 |
Net amounts of assets presented in the balance sheet | 0 | 1.6 |
Financial instruments | 0 | 0 |
Cash collateral received | 0 | 0 |
Net amount | $ 0 | $ 1.6 |
SHAREHOLDERS' EQUITY (NARRATIVE
SHAREHOLDERS' EQUITY (NARRATIVE) (Details) - USD ($) | 1 Months Ended | 4 Months Ended | 8 Months Ended | 12 Months Ended | 24 Months Ended | 36 Months Ended | 46 Months Ended | 60 Months Ended | |||||
Sep. 30, 2014 | Apr. 30, 2016 | Apr. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2009 | Nov. 30, 2015 | Dec. 31, 2014 | May 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Stock repurchase program, increase in authorized amount | $ 1,600,000,000 | ||||||||||||
Payments for repurchase of common stock | $ 203,000,000 | $ 365,200,000 | $ 319,100,000 | ||||||||||
Payments for repurchase of stock warrants | $ 57,400,000 | ||||||||||||
Stock repurchase program, remaining repurchase authorized amount | $ 252,700,000 | 252,700,000 | $ 252,700,000 | ||||||||||
Common stock dividends paid | $ 54,800,000 | $ 52,000,000 | $ 51,000,000 | ||||||||||
Dividends (in dollars per share) | $ 0.07 | $ 0.06 | $ 0.08 | $ 0.07 | $ 0.31 | $ 0.27 | $ 0.24 | ||||||
Available for future grant (in shares) | 4,620,000 | 6,882,000 | 4,620,000 | 6,882,000 | 8,571,000 | 4,620,000 | 8,571,000 | ||||||
Proceeds from stock options exercised | $ 8,400,000 | $ 6,300,000 | $ 5,000,000 | ||||||||||
Price of junior preferred stock (per 1/1000 of a share) | $ 70 | $ 70 | $ 70 | ||||||||||
Junior preferred stock right becomes exercisable when a person or group becomes owner of stated percentage (more than) | 4.99% | ||||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Series B junior participating preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Junior preferred stock, purchase right to purchase fractional share (in shares) | 0.001 | ||||||||||||
Employee Stock Option [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Expiration period | 10 years | ||||||||||||
Allocated share-based compensation expense | $ 12,200,000 | 9,600,000 | 7,900,000 | ||||||||||
Allocated share-based compensation expense, net of tax | $ 7,900,000 | $ 6,200,000 | $ 5,100,000 | ||||||||||
Compensation expense related to stock options reduced both basic and diluted earnings per share (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.02) | ||||||||||
Unrecognized compensation expense | $ 6,900,000 | $ 6,900,000 | $ 6,900,000 | ||||||||||
Weighted average recognition period | 1 year 4 months 24 days | ||||||||||||
Restricted Stock [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 3 years | ||||||||||||
Allocated share-based compensation expense | $ 3,100,000 | $ 2,200,000 | $ 3,000,000 | ||||||||||
Unrecognized compensation expense | 5,000,000 | $ 900,000 | $ 5,000,000 | $ 900,000 | $ 5,000,000 | ||||||||
Weighted average recognition period | 2 years 3 months 24 days | ||||||||||||
Granted (in shares) | 401,000 | ||||||||||||
Granted (in dollars per share) | $ 18.17 | $ 17.59 | $ 17.15 | ||||||||||
Grant date fair value of performance shares awarded | 7,300,000 | 1,700,000 | $ 7,300,000 | $ 1,700,000 | $ 1,900,000 | 7,300,000 | $ 1,900,000 | ||||||
Fair value of vested shares | $ 2,100,000 | $ 2,700,000 | $ 3,700,000 | ||||||||||
Restricted Stock [Member] | Directors, Officers, and Employees [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Granted (in shares) | 400,000 | 100,000 | 100,000 | ||||||||||
Performance Shares [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Allocated share-based compensation expense | $ 7,700,000 | $ 5,300,000 | $ 4,700,000 | ||||||||||
Granted (in shares) | 507,976 | 516,660 | 283,630 | ||||||||||
Grant date fair value of performance shares awarded | $ 10,300,000 | $ 9,400,000 | $ 10,300,000 | $ 9,400,000 | $ 10,300,000 | ||||||||
Performance period | 3 years | ||||||||||||
Performance unit payout | 200.00% | 150.00% | |||||||||||
Years 2007 Through 2009 [Member] | Employee Stock Option [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 3 years | ||||||||||||
Expiration period | 5 years | ||||||||||||
Years 2010 and Thereafter [Member] | Employee Stock Option [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 3 years | ||||||||||||
Expiration period | 7 years | ||||||||||||
2015 [Member] | Employee Stock Option [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 3 years | ||||||||||||
Expiration period | 10 years | ||||||||||||
Common Stock [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Treasury stock purchased and retired (in shares) | 11,688,000 | 20,582,000 | 18,489,000 | ||||||||||
Common Share Repurchase Program [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Stock repurchase program, authorized amount | $ 100,000,000 |
SHAREHOLDERS' EQUITY (SCHEDULE
SHAREHOLDERS' EQUITY (SCHEDULE OF COMMON STOCK OUTSTANDING) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock Outstanding [Roll Forward] | |||
Balance, beginning of year (in shares) | 184,028,511 | ||
Balance, end of year (in shares) | 173,753,614 | 184,028,511 | |
Number of stock tendered for payment of federal and state taxes owed | 191,000 | 237,000 | 257,000 |
Common Stock [Member] | |||
Common Stock Outstanding [Roll Forward] | |||
Balance, beginning of year (in shares) | 184,029,000 | 203,324,000 | 220,324,000 |
Treasury stock purchased and retired (in shares) | (11,688,000) | (20,582,000) | (18,489,000) |
Balance, end of year (in shares) | 173,754,000 | 184,029,000 | 203,324,000 |
Common Stock [Member] | Employee Stock Option [Member] | |||
Common Stock Outstanding [Roll Forward] | |||
Shares issued under employee benefit compensation plans (in shares) | 978,000 | 769,000 | 916,000 |
Common Stock [Member] | Restricted and Performance Stock [Member] | |||
Common Stock Outstanding [Roll Forward] | |||
Shares issued under employee benefit compensation plans (in shares) | 435,000 | 518,000 | 573,000 |
SHAREHOLDERS' EQUITY (SCHEDU105
SHAREHOLDERS' EQUITY (SCHEDULE OF SHARE-BASED COMPENSATION) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at the beginning of the year (in shares) | 5,199 | 5,011 | 5,579 |
Options granted (in shares) | 1,706 | 1,361 | 1,014 |
Exercised (in shares) | (978) | (769) | (917) |
Forfeited or terminated (in shares) | (573) | (404) | (665) |
Outstanding at the end of the year (in shares) | 5,354 | 5,199 | 5,011 |
Options exercisable at the end of the year (in shares) | 2,187 | 2,399 | 2,030 |
Available for future grant (in shares) | 4,620 | 6,882 | 8,571 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at the beginning of the year (in dollars per share) | $ 13.32 | $ 12.04 | $ 10.64 |
Options granted (in dollars per share) | 17.45 | 16.45 | 19.10 |
Exercised (in dollars per share) | (8.70) | (8.20) | (5.47) |
Forfeited or terminated (in dollars per share) | (20.41) | (17.70) | (20.07) |
Outstanding at the end of the year (in dollars per share) | $ 14.73 | $ 13.32 | $ 12.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Options outstanding, weighted average remaining life | 5 years 10 months 24 days | 4 years 9 months 24 days | 4 years 3 months 24 days |
Options exercisable at the end of the year, weighted average remaining life | 2 years 8 months 24 days | 2 years 5 months 24 days | 2 years 8 months 24 days |
Options exercised, aggregate intrinsic value | $ 6.1 | $ 4.8 | $ 3.8 |
Options outstanding, aggregate intrinsic value | 37.1 | 38.4 | 32.1 |
Options exercisable at the end of the year, aggregate intrinsic value | $ 15.1 | $ 15.3 | $ 12.1 |
SHAREHOLDERS' EQUITY (SCHEDU106
SHAREHOLDERS' EQUITY (SCHEDULE OF VALUATION ASSUMPTIONS ON PAYMENT AWARDS) (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average risk-free interest rates | 1.40% | 1.70% | 1.60% |
Weighted average dividend yields | 1.60% | 1.50% | 1.30% |
Volatility factors | 36.00% | 85.00% | 51.00% |
Weighted average expected life (in years) | 6 years 3 months 24 days | 6 years 3 months 24 days | 4 years 9 months 24 days |
Weighted average fair value per share (in dollars per share) | $ 5.48 | $ 10.83 | $ 7.65 |
SHAREHOLDERS' EQUITY (SCHEDU107
SHAREHOLDERS' EQUITY (SCHEDULE OF SHARE-BASED COMPENSATION BY EXERCISE PRICE RANGE) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number outstanding (in shares) | shares | 5,354 |
Number exercisable (in shares) | shares | 2,187 |
Range of exercise prices: $6.45 - $7.51 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 6.45 |
Exercise price range, upper range limit (in dollars per share) | $ 7.51 |
Number outstanding (in shares) | shares | 922 |
Remaining life (in years) | 1 year 7 months 24 days |
Average exercise price (in dollars per share) | $ 7.29 |
Number exercisable (in shares) | shares | 922 |
Average exercise price (in dollars per share) | $ 7.29 |
Range of exercise prices: $10.88 - $16.22 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 10.88 |
Exercise price range, upper range limit (in dollars per share) | $ 16.22 |
Number outstanding (in shares) | shares | 860 |
Remaining life (in years) | 3 years 2 months 24 days |
Average exercise price (in dollars per share) | $ 11.09 |
Number exercisable (in shares) | shares | 846 |
Average exercise price (in dollars per share) | $ 11.02 |
Range of exercise prices: $16.42 - $19.15 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 16.42 |
Exercise price range, upper range limit (in dollars per share) | $ 19.15 |
Number outstanding (in shares) | shares | 3,572 |
Remaining life (in years) | 7 years 8 months 24 days |
Average exercise price (in dollars per share) | $ 17.52 |
Number exercisable (in shares) | shares | 419 |
Average exercise price (in dollars per share) | $ 19.08 |
SHAREHOLDERS' EQUITY (SCHEDU108
SHAREHOLDERS' EQUITY (SCHEDULE OF NONVESTED SHARE ACTIVITY) (Details) - Restricted Stock [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested shares, beginning of year (in shares) | 95 | ||
Granted (in shares) | 401 | ||
Vested (in shares) | (126) | ||
Forfeited (in shares) | (1) | ||
Non-vested shares, end of year (in shares) | 369 | 95 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Non-vested shares, beginning of year (in dollars per share) | $ 15.66 | ||
Granted (in dollars per share) | 18.17 | $ 17.59 | $ 17.15 |
Vested (in dollars per share) | 16.53 | ||
Forfeited (in dollars per share) | 16.80 | ||
Non-vested shares, end of year (in dollars per share) | $ 18.10 | $ 15.66 |
SHAREHOLDERS' EQUITY (SCHEDU109
SHAREHOLDERS' EQUITY (SCHEDULE OF PERFORMANCE SHARE-BASED COMPENSATION) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shareholder Return Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Awards outstanding, beginning of period (in units) | 549 | 519 | 382 |
Granted (in units) | 254 | 258 | 142 |
Additional shares issued pursuant to achieving certain performance criteria (in units) | 87 | 85 | 0 |
Vested (in units) | (261) | (260) | 0 |
Forfeited (in units) | (59) | (53) | (5) |
Awards outstanding, end of period (in units) | 570 | 549 | 519 |
Performance unit payout | 150.00% | ||
Operating Return on Equity Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Awards outstanding, beginning of period (in units) | 549 | 343 | 204 |
Granted (in units) | 254 | 258 | 142 |
Additional shares issued pursuant to achieving certain performance criteria (in units) | 65 | 0 | 0 |
Vested (in units) | (239) | 0 | 0 |
Forfeited (in units) | (59) | (52) | (3) |
Awards outstanding, end of period (in units) | 570 | 549 | 343 |
Pre-Tax Operating Income Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Awards outstanding, beginning of period (in units) | 0 | 176 | 470 |
Granted (in units) | 0 | 0 | 0 |
Additional shares issued pursuant to achieving certain performance criteria (in units) | 0 | 85 | 142 |
Vested (in units) | 0 | (260) | (434) |
Forfeited (in units) | 0 | (1) | (2) |
Awards outstanding, end of period (in units) | 0 | 0 | 176 |
SHAREHOLDERS' EQUITY (SCHEDU110
SHAREHOLDERS' EQUITY (SCHEDULE OF EARNINGS PER SHARE RECONCILIATION) (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Net income (loss) for diluted earnings per share | $ 358.2 | $ 270.7 | $ 51.4 |
Shares: | |||
Weighted average shares outstanding for basic earnings per share (in dollars per share) | 176,638 | 193,054 | 212,917 |
Effect of dilutive securities on weighted average shares: | |||
Stock options, restricted stock and performance units (in shares) | 1,685 | 2,112 | 2,505 |
Warrants (in shares) | 0 | 0 | 2,233 |
Dilutive potential common shares (in shares) | 1,685 | 2,112 | 4,738 |
Weighted average shares outstanding for diluted earnings per share (in shares) | 178,323 | 195,166 | 217,655 |
OTHER OPERATING STATEMENT DA111
OTHER OPERATING STATEMENT DATA (SCHEDULE OF INSURANCE POLICY INCOME) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Insurance [Abstract] | |||
Direct premiums collected | $ 3,942.7 | $ 3,769.6 | $ 3,856.2 |
Reinsurance assumed | 33.8 | 38.4 | 34.5 |
Reinsurance ceded | (132.9) | (142.8) | (187.9) |
Premiums collected, net of reinsurance | 3,843.6 | 3,665.2 | 3,702.8 |
Change in unearned premiums | 6.2 | 5.9 | 9.1 |
Less premiums on interest-sensitive life and products without mortality and morbidity risk which are recorded as additions to insurance liabilities | (1,386.7) | (1,241.9) | (1,295.4) |
Premiums on traditional products with mortality or morbidity risk | 2,463.1 | 2,429.2 | 2,416.5 |
Fees and surrender charges on interest-sensitive products | 138 | 126.8 | 213.2 |
Insurance policy income | $ 2,601.1 | $ 2,556 | $ 2,629.7 |
OTHER OPERATING STATEMENT DA112
OTHER OPERATING STATEMENT DATA (SCHEDULE OF OTHER OPERATING COST AND EXPENSE) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Expenses: | |||
Commission expense | $ 110.5 | $ 103.8 | $ 99.4 |
Salaries and wages | 231 | 205.2 | 242.4 |
Other | 454.8 | 430.2 | 461 |
Total other operating costs and expenses | $ 796.3 | $ 739.2 | $ 802.8 |
OTHER OPERATING STATEMENT DA113
OTHER OPERATING STATEMENT DATA (SCHEDULE OF CHANGES IN PRESENT VALUE OF FUTURE INSURANCE PROFITS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Present Value of Future Insurance Profits [Roll Forward] | |||
Balance, beginning of year | $ 449 | $ 489.4 | $ 679.3 |
Amortization | (62.2) | (69.1) | (76.2) |
Effect of reinsurance transaction | 0 | 0 | 5 |
Amounts related to CLIC prior to being sold | 0 | 0 | (15.5) |
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | 15 | 28.7 | (103.2) |
Balance, end of year | $ 401.8 | $ 449 | $ 489.4 |
OTHER OPERATING STATEMENT DA114
OTHER OPERATING STATEMENT DATA (SCHEDULE OF CHANGES IN DEFERRED ACQUISITION COSTS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Balance, beginning of year | $ 1,083.3 | $ 770.6 | $ 968.1 |
Additions | 242.7 | 246.4 | 242.8 |
Amortization | (191.1) | (190.9) | (171.2) |
Effect of reinsurance transaction | 0 | 0 | 24 |
Amounts related to CLIC prior to being sold | 0 | 0 | (37.6) |
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | (90.2) | 257.2 | (255.5) |
Balance, end of year | $ 1,044.7 | $ 1,083.3 | $ 770.6 |
OTHER OPERATING STATEMENT DA115
OTHER OPERATING STATEMENT DATA (NARRATIVE) (Details) - state | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplementary Insurance Information, by Segment [Line Items] | |||
Number of states with largest share of collected premiums | 4 | ||
Percentage of total collected premiums (more than for 5%) | 5.00% | ||
Number of additional states greater than specified percentage of total collected premiums | 0 | ||
Percentage of Amount Amortized During Next Five Years [Abstract] | |||
2,017 | 11.00% | ||
2,018 | 10.00% | ||
2,019 | 9.00% | ||
2,020 | 8.00% | ||
2,021 | 7.00% | ||
Average interest accrual rate associated with amortization method of present value of future insurance profits | 5.00% | 5.00% | 5.00% |
Florida [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Percentage of total collected premiums (more than for 5%) | 9.00% | ||
Pennsylvania [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Percentage of total collected premiums (more than for 5%) | 6.00% | ||
California [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Percentage of total collected premiums (more than for 5%) | 5.00% | ||
Texas [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Percentage of total collected premiums (more than for 5%) | 5.00% |
CONSOLIDATED STATEMENT CASH 116
CONSOLIDATED STATEMENT CASH FLOWS (SCHEDULE OF THE RECONCILIATION FOR NET INCOME PROVIDED BY OPERATING ACTIVITIES) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Additional Cash Flow Elements, Operating Activities [Abstract] | ||||||||||||
Net income | $ 234.2 | $ 18.6 | $ 59.9 | $ 45.5 | $ 137.3 | $ 33.8 | $ 46.8 | $ 52.8 | $ 358.2 | $ 270.7 | $ 51.4 | |
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||
Amortization and depreciation | 275 | 283.4 | 274.2 | |||||||||
Income taxes | (11.7) | 92.9 | 119.7 | |||||||||
Insurance liabilities | 332.8 | 297.4 | 398.2 | |||||||||
Accrual and amortization of investment income | (124.2) | (27.6) | (148.3) | |||||||||
Deferral of policy acquisition costs | (242.7) | (246.4) | (242.8) | |||||||||
Net realized investment (gains) losses | (8.3) | 36.6 | (36.7) | |||||||||
Payment to reinsurer pursuant to long-term care business reinsured | 0 | 0 | (590.3) | |||||||||
Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses | 75.4 | 9 | 239.8 | |||||||||
Cash and cash equivalents received upon recapture of reinsurance | 73.6 | 0 | 0 | |||||||||
Loss on extinguishment or modification of debt | 0 | 32.8 | 0.6 | |||||||||
Other | 31.4 | (4.9) | 56 | |||||||||
Net cash from operating activities | $ 759.5 | $ 743.9 | $ 121.8 | [1] | ||||||||
[1] | Cash flows from operating activities reflect outflows in 2014 due to the payment to reinsurer to transfer certain long-term care business. |
CONSOLIDATED STATEMENT CASH 117
CONSOLIDATED STATEMENT CASH FLOWS (EFFECTS OF REINSURANCE) (Details) - USD ($) $ in Millions | Jul. 01, 2014 | Sep. 30, 2016 |
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture, gross | $ (75.4) | |
Bankers Life [Member] | Wilton Reassurance Company [Member] | ||
Ceded Credit Risk [Line Items] | ||
Gain on reinsurance transaction (classified as Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses) | $ 26.1 | |
Income tax expense | 9.2 | |
Gain on reinsurance transaction (net of income taxes) | 16.9 | |
Bankers Life [Member] | Wilton Reassurance Company [Member] | Investments [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture, gross | 139.4 | |
Bankers Life [Member] | Wilton Reassurance Company [Member] | Cash [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture, gross | 7.7 | |
Bankers Life [Member] | Wilton Reassurance Company [Member] | Present value of future profits and deferred acquisition costs [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture, gross | 29 | |
Bankers Life [Member] | Wilton Reassurance Company [Member] | Reinsurance receivables [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture, gross | (155.9) | |
Bankers Life [Member] | Wilton Reassurance Company [Member] | Other liabilities [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture, gross | 5.9 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||
Ceded Credit Risk [Line Items] | ||
Gain on reinsurance transaction (net of income taxes) | 16.9 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Bankers Life [Member] | Wilton Reassurance Company [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recapture fee paid | $ 28 |
CONSOLIDATED STATEMENT CASH 118
CONSOLIDATED STATEMENT CASH FLOWS (SCHEDULE OF OTHER SIGNIFICANT NONCASH TRANSACTIONS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |||
Stock options, restricted stock and performance units | $ 23 | $ 17.1 | $ 15.6 |
Noncash Investments Recaptured In Reinsurance Termination | $ 431.1 | $ 0 | $ 0 |
STATUTORY INFORMATION (BASED119
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) (SCHEDULE OF STATUTORY ACCOUNTING PRACTICES) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Insurance [Abstract] | ||
Statutory capital and surplus | $ 1,956.8 | $ 1,739.2 |
Asset valuation reserve | 253.3 | 196.9 |
Interest maintenance reserve | 486.9 | 476 |
Total | $ 2,697 | $ 2,412.1 |
STATUTORY INFORMATION (BASED120
STATUTORY INFORMATION (BASED ON NON-GAAP MEASURES) (NARRATIVE) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus included investments in upstream affiliates | $ 42.6 | $ 42.6 | |
Statutory accounting practices, statutory net income, amount | 256.6 | 332.6 | $ 364.3 |
Statutory accounting practices loss on recapture of long-term care business | 110 | ||
Statutory accounting practices, net realized capital gain (loss), net of income taxes | (29.7) | (18) | (18.2) |
Statutory accounting practices, pre-tax amounts for fees and interest paid | $ 153.9 | $ 154.2 | $ 157.5 |
Percentage of statutory capital and surplus, available for dividend distribution without prior approval from regulatory agency | 10.00% | ||
Amount of dividends paid by insurance subsidiaries | $ 274.3 | ||
Capital contributions to insurance subsidiaries from parent | $ 200 | ||
Adjusted capital to risk-based capital ratio | 95.00% | ||
Maximum [Member] | Company Plan for Improving Capital Position [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 100.00% | ||
Maximum [Member] | Regulatory Authority Special Examination [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 75.00% | ||
Maximum [Member] | Regulatory Authority, Any Action Deemed Necessary [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 50.00% | ||
Maximum [Member] | Regulatory Authority Control [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 35.00% | ||
Maximum [Member] | Trend Test [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 150.00% | ||
Minimum [Member] | Company Plan for Improving Capital Position [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 75.00% | ||
Minimum [Member] | Regulatory Authority Special Examination [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 50.00% | ||
Minimum [Member] | Regulatory Authority, Any Action Deemed Necessary [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 35.00% | ||
Minimum [Member] | Trend Test [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Adjusted capital to risk-based capital ratio | 100.00% |
SALE OF SUBSIDIARY (NARRATIVE)
SALE OF SUBSIDIARY (NARRATIVE) (Details) - USD ($) $ in Millions | Jul. 01, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Tax expense related to the sale of Conseco Life Insurance Company | $ 0 | $ 0 | $ 14.2 | ||||
Bankers Life [Member] | Wilton Reassurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain related to other reinsurance transaction | $ 16.9 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain related to other reinsurance transaction | 16.9 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Conseco Life Insurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on the sale of CLIC | $ 2.9 | $ 6 | $ 298 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Bankers Life [Member] | Wilton Reassurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Reinsurance recapture fee paid | 28 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Conseco Life Insurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net cash proceeds | 224.9 | ||||||
Loss on the sale of CLIC | 269.7 | ||||||
Tax expense related to the sale of Conseco Life Insurance Company | 14.2 | ||||||
Valuation allowance release related to the gain | 14.2 | ||||||
Valuation allowance increase related to the decrease in projected future taxable income | (19.4) | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Conseco Life Insurance Company [Member] | Transition Services for the Year Ended June 30, 2015 [Member] | Wilton Reassurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Fees from transition and special Support Services Agreements | 30 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Conseco Life Insurance Company [Member] | Transition Services for the Year Ended June 30, 2016 [Member] | Wilton Reassurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Fees from transition and special Support Services Agreements | 20 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Conseco Life Insurance Company [Member] | Transition Services for the the Three Years Ended June 30, 2019 [Member] | Wilton Reassurance Company [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Fees from transition and special Support Services Agreements | $ 0.2 |
SALE OF SUBSIDIARY (SCHEDULE OF
SALE OF SUBSIDIARY (SCHEDULE OF CARRYING AMOUNT OF CLIC BUSINESS BEING SOLD) (Details) - USD ($) $ in Millions | Jul. 01, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Net assets being sold: | ||||
Tax expense related to the sale | $ 0 | $ 0 | $ 14.2 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Conseco Life Insurance Company [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net cash proceeds | $ 224.9 | |||
Net assets being sold: | ||||
Investments | 3,863.8 | |||
Cash and cash equivalents | 164.7 | |||
Accrued investment income | 42.7 | |||
Present value of future profits | 15.5 | |||
Deferred acquisition costs | 37.6 | |||
Reinsurance receivables | 307.4 | |||
Income tax assets, net | 84.4 | |||
Other assets | 2.8 | |||
Liabilities for insurance products | (3,201.3) | |||
Other liabilities | (199.1) | |||
Investment borrowings | (383.4) | |||
Accumulated other comprehensive income | (240.5) | |||
Net assets being sold | 494.6 | |||
Loss before taxes | 269.7 | |||
Tax expense related to the sale | 14.2 | |||
Valuation allowance release related to the tax on the sale | (14.2) | |||
Valuation allowance increase related to the decrease in projected future taxable income | 19.4 | |||
Net loss | $ (289.1) |
BUSINESS SEGMENTS (SCHEDULE OF
BUSINESS SEGMENTS (SCHEDULE OF SEGMENT REPORTING INFORMATION BY SEGMENT) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Net investment income | $ 1,325.2 | $ 1,233.6 | $ 1,427.4 |
Fee revenue and other income | 50.5 | 58.9 | 50.9 |
Total revenues | 3,914.2 | 3,787.2 | 3,851.8 |
Benefits and expenses: | |||
Insurance policy benefits | 2,390.5 | 2,308.3 | 2,586.2 |
Other operating costs and expenses | 796.3 | 739.2 | 802.8 |
Total expenses | 3,503.9 | 3,364.4 | 3,424.4 |
Pre-tax operating earnings by segment | 410.3 | 422.8 | 427.4 |
Bankers Life [Member] | |||
Revenues: | |||
Insurance policy income, Annuities | 22 | 22.4 | 26 |
Insurance policy income, Health | 1,244.1 | 1,251 | 1,287.1 |
Insurance policy income, Life | 393 | 375.3 | 338.6 |
Net investment income | 936.8 | 884.7 | 957.3 |
Fee revenue and other income | 34.4 | 27.7 | 29.3 |
Total revenues | 2,630.3 | 2,561.1 | 2,638.3 |
Benefits and expenses: | |||
Insurance policy benefits | 1,620.6 | 1,588.4 | 1,667.6 |
Amortization | 176.5 | 187.1 | 174.7 |
Interest expense on investment borrowings | 13.2 | 8.8 | 7.9 |
Other operating costs and expenses | 422.1 | 407.2 | 401.2 |
Total expenses | 2,232.4 | 2,191.5 | 2,251.4 |
Pre-tax operating earnings by segment | 397.9 | 369.6 | 386.9 |
Washington National [Member] | |||
Revenues: | |||
Insurance policy income, Annuities | 2.9 | 3 | 4 |
Insurance policy income, Health | 627.9 | 615.4 | 597.6 |
Insurance policy income, Life | 25 | 25.4 | 24.4 |
Net investment income | 259.3 | 253.6 | 276.1 |
Fee revenue and other income | 1.3 | 1.3 | 1.1 |
Total revenues | 916.4 | 898.7 | 903.2 |
Benefits and expenses: | |||
Insurance policy benefits | 561.7 | 546.6 | 536.2 |
Amortization | 59.1 | 55.2 | 64.6 |
Interest expense on investment borrowings | 3.7 | 2 | 1.7 |
Other operating costs and expenses | 189 | 183.4 | 189.5 |
Total expenses | 813.5 | 787.2 | 792 |
Pre-tax operating earnings by segment | 102.9 | 111.5 | 111.2 |
Colonial Penn [Member] | |||
Revenues: | |||
Insurance policy income, Health | 2.6 | 3 | 3.6 |
Insurance policy income, Life | 278.8 | 260.5 | 242.4 |
Net investment income | 44.2 | 43 | 41.7 |
Fee revenue and other income | 1.1 | 1 | 1 |
Total revenues | 326.7 | 307.5 | 288.7 |
Benefits and expenses: | |||
Insurance policy benefits | 201.9 | 189 | 173.2 |
Amortization | 15.3 | 14.4 | 15.3 |
Interest expense on investment borrowings | 0.6 | 0.1 | 0 |
Other operating costs and expenses | 107.2 | 98.4 | 99.4 |
Total expenses | 325 | 301.9 | 287.9 |
Pre-tax operating earnings by segment | 1.7 | 5.6 | 0.8 |
Long-term Care in Run-off [Member] | |||
Revenues: | |||
Insurance policy income, Health | 4.8 | 0 | 0 |
Net investment income | 9.4 | 0 | 0 |
Total revenues | 14.2 | 0 | 0 |
Benefits and expenses: | |||
Insurance policy benefits | 17.6 | 0 | 0 |
Other operating costs and expenses | 0.5 | 0 | 0 |
Total expenses | 18.1 | 0 | 0 |
Pre-tax operating earnings by segment | (3.9) | 0 | 0 |
Corporate operations [Member] | |||
Revenues: | |||
Net investment income | 16.6 | 11.3 | 14.9 |
Fee revenue and other income | 10 | 8.6 | 6.7 |
Total revenues | 26.6 | 19.9 | 21.6 |
Benefits and expenses: | |||
Interest expense on investment borrowings | 0 | 0.2 | 0.1 |
Other operating costs and expenses | 69.1 | 38.6 | 49.1 |
Interest expense on corporate debt | 45.8 | 45 | 43.9 |
Total expenses | 114.9 | 83.8 | 93.1 |
Pre-tax operating earnings by segment | $ (88.3) | $ (63.9) | $ (71.5) |
BUSINESS SEGMENTS (RECONCILIATI
BUSINESS SEGMENTS (RECONCILIATION OF OPERATING PROFIT (LOSS) FROM SEGMENTS TO CONSOLIDATED) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting [Abstract] | |||||||||||
Total segment revenues | $ 3,914.2 | $ 3,787.2 | $ 3,851.8 | ||||||||
Net realized investment gains (losses) | 8.3 | (36.6) | 33.9 | ||||||||
Revenues related to certain non-strategic investments and earnings attributable to VIEs | 52.6 | 36.3 | 33.2 | ||||||||
Fee revenue related to transition and support services agreements | 10 | 25 | 15 | ||||||||
Revenues of CLIC prior to being sold | 0 | 0 | 210.8 | ||||||||
Total revenues | $ 1,004.9 | $ 1,015.9 | $ 1,003.9 | $ 960.4 | $ 969.6 | $ 904.5 | $ 959.5 | $ 978.3 | 3,985.1 | 3,811.9 | 4,144.7 |
Total segment expenses | 3,503.9 | 3,364.4 | 3,424.4 | ||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | (11.3) | (15.7) | 48.5 | ||||||||
Amortization related to fair value changes in embedded derivative liabilities | 1.7 | 3.8 | (12.5) | ||||||||
Amortization related to net realized investment gains (losses) | 0.7 | (0.5) | 1 | ||||||||
Expenses related to certain non-strategic investments and expenses (earnings) attributable to VIEs | 54.6 | 43 | 41.2 | ||||||||
Fair value changes and amendment related to agent deferred compensation plan | (3.1) | (15.1) | 26.8 | ||||||||
Loss on extinguishment or modification of debt | 0 | 32.8 | 0.6 | ||||||||
Loss on sale of subsidiary, (gain) loss on reinsurance transactions and transition expenses | 75.4 | 9 | 239.8 | ||||||||
Expenses related to transition and support services agreements | 10 | 22.5 | 12.4 | ||||||||
Expenses of CLIC prior to being sold | 0 | 0 | 187.4 | ||||||||
Total benefits and expenses | 3,631.9 | 3,444.2 | 3,969.6 | ||||||||
Income before income taxes | 180.7 | 49.3 | 82.7 | 40.5 | 160.3 | 52.4 | 72.7 | 82.3 | 353.2 | 367.7 | 175.1 |
Tax expense on period income | 127.8 | 129.5 | 159.2 | ||||||||
Valuation allowance for deferred tax assets and other tax items | (132.8) | (32.5) | (35.5) | ||||||||
Net income | $ 234.2 | $ 18.6 | $ 59.9 | $ 45.5 | $ 137.3 | $ 33.8 | $ 46.8 | $ 52.8 | $ 358.2 | $ 270.7 | $ 51.4 |
BUSINESS SEGMENTS (SCHEDULE 125
BUSINESS SEGMENTS (SCHEDULE OF BALANCE SHEET INFORMATION, BY SEGMENT) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 31,975.2 | $ 31,125.1 |
Total liabilities | 27,488.3 | 26,986.6 |
Bankers Life [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 19,876.4 | 19,067.8 |
Total liabilities | 17,144.9 | 16,612 |
Washington National [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 7,555.7 | 7,948.5 |
Total liabilities | 6,096.9 | 6,665.1 |
Colonial Penn [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,022.9 | 985.4 |
Total liabilities | 898.5 | 869.3 |
Long-term Care in Run-off [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 656.2 | 0 |
Total liabilities | 562.2 | 0 |
Corporate operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,864 | 3,123.4 |
Total liabilities | $ 2,785.8 | $ 2,840.2 |
BUSINESS SEGMENTS (SCHEDULE 126
BUSINESS SEGMENTS (SCHEDULE OF SELECTED FINANCIAL INFORMATION, BY SEGMENT) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Segment Reporting Information [Line Items] | ||||
Present value of future profits | $ 401.8 | $ 449 | $ 489.4 | $ 679.3 |
Deferred acquisition costs | 1,044.7 | 1,083.3 | ||
Insurance liabilities | 22,653.8 | 22,143.2 | ||
Bankers Life [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Present value of future profits | 95.5 | 114.9 | ||
Deferred acquisition costs | 646.2 | 718.2 | ||
Insurance liabilities | 15,702.8 | 15,234.1 | ||
Washington National [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Present value of future profits | 266.8 | 290.2 | ||
Deferred acquisition costs | 299.9 | 280 | ||
Insurance liabilities | 5,586.7 | 6,126.2 | ||
Colonial Penn [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Present value of future profits | 39.5 | 43.9 | ||
Deferred acquisition costs | 98.6 | 85.1 | ||
Insurance liabilities | 809.6 | $ 782.9 | ||
Long-term Care in Run-off [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Present value of future profits | 0 | |||
Deferred acquisition costs | 0 | |||
Insurance liabilities | $ 554.7 |
QUARTERLY FINANCIAL DATA (UN127
QUARTERLY FINANCIAL DATA (UNAUDITED) (SCHEDULE OF QUARTERLY FINANCIAL INFORMATION) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Data [Abstract] | |||||||||||
Revenues | $ 1,004.9 | $ 1,015.9 | $ 1,003.9 | $ 960.4 | $ 969.6 | $ 904.5 | $ 959.5 | $ 978.3 | $ 3,985.1 | $ 3,811.9 | $ 4,144.7 |
Income before income taxes | 180.7 | 49.3 | 82.7 | 40.5 | 160.3 | 52.4 | 72.7 | 82.3 | 353.2 | 367.7 | 175.1 |
Income tax expense | (53.5) | 30.7 | 22.8 | (5) | 23 | 18.6 | 25.9 | 29.5 | (5) | 97 | 123.7 |
Net income | $ 234.2 | $ 18.6 | $ 59.9 | $ 45.5 | $ 137.3 | $ 33.8 | $ 46.8 | $ 52.8 | $ 358.2 | $ 270.7 | $ 51.4 |
Basic: | |||||||||||
Net income (loss) (in dollars per share) | $ 1.35 | $ 0.11 | $ 0.34 | $ 0.25 | $ 0.74 | $ 0.18 | $ 0.24 | $ 0.26 | $ 2.03 | $ 1.40 | $ 0.24 |
Diluted: | |||||||||||
Net income (loss) (in dollars per share) | $ 1.34 | $ 0.11 | $ 0.33 | $ 0.25 | $ 0.73 | $ 0.18 | $ 0.24 | $ 0.26 | $ 2.01 | $ 1.39 | $ 0.24 |
INVESTMENTS IN VARIABLE INTE128
INVESTMENTS IN VARIABLE INTEREST ENTITIES (NARRATIVE) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)entity | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Variable Interest Entity [Line Items] | |||
Gain (loss) on dissolution of variable interest entities | $ (7.3) | $ 11.3 | $ 0 |
Repayments of investment borrowings related to variable interest entities, amounts due in 2017 | 16.8 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2018 | 0.7 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2019 | 0.8 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2020 | 0.2 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2022 | 150.2 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2024 | 381.8 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2026 | 326.9 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2027 | 276.3 | ||
Repayments of investment borrowings related to variable interest entities, amounts due in 2028 | 539.9 | ||
Variable interest entity amortized cost securities held | 1,708.6 | ||
Variable interest entity, gross unrealized gains fixed maturity securities | 19.5 | ||
Variable interest entity gross unrealized losses fixed maturity securities | (3.8) | ||
Variable interest entity, estimated fair value of securities held | 1,724.3 | ||
Variable interest entities net realized gain (loss) on investments | (20.4) | (6.4) | (2.2) |
Variable interest entities, net losses from the sales of fixed maturities | (11.9) | (1.3) | |
Writedowns of investments for other than temporary declines in fair value recognized through net income | $ (1.2) | (16.4) | |
Number of VIEs in default | entity | 0 | ||
Investments held by VIEs and sold | $ 192.2 | 46.1 | 38.7 |
Variable interest entity, gross investment losses from sale | 20.3 | 1.8 | $ 2.4 |
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 | 93.8 | 1,178.7 | |
Gross unrealized gain (loss) on investments held by VIEs | (0.9) | (23.9) | |
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 | 143.9 | 294.3 | |
Gross unrealized gain (loss) on investments held by VIEs | $ (2.9) | $ (22.3) |
INVESTMENTS IN VARIABLE INTE129
INVESTMENTS IN VARIABLE INTEREST ENTITIES (SCHEDULE OF IMPACT ON BALANCE SHEET OF CONSOLIDATING VARIABLE INTEREST ENTITIES) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets [Abstract] | ||
Investments held by variable interest entities | $ 1,724.3 | $ 1,633.6 |
Cash and cash equivalents held by variable interest entities | 189.3 | 364.4 |
Liabilities: | ||
Borrowings related to variable interest entities | 1,662.8 | 1,676.4 |
VIEs [Member] | ||
Assets [Abstract] | ||
Investments held by variable interest entities | 1,724.3 | 1,633.6 |
Notes receivable of VIEs held by insurance subsidiaries | 0 | 0 |
Cash and cash equivalents held by variable interest entities | 189.3 | 364.4 |
Accrued investment income | 3 | 3.3 |
Income tax assets, net | 6.4 | 26 |
Other assets | 13.1 | 1.4 |
Total assets | 1,936.1 | 2,028.7 |
Liabilities: | ||
Other liabilities | 81.8 | 196.6 |
Borrowings related to variable interest entities | 1,662.8 | 1,676.4 |
Notes payable of VIEs held by insurance subsidiaries | 203.3 | 204 |
Total liabilities | 1,947.9 | 2,077 |
Eliminations [Member] | ||
Assets [Abstract] | ||
Investments held by variable interest entities | 0 | 0 |
Notes receivable of VIEs held by insurance subsidiaries | (204.2) | (204.3) |
Cash and cash equivalents held by variable interest entities | 0 | 0 |
Accrued investment income | (0.1) | 0 |
Income tax assets, net | (1.3) | (1.9) |
Other assets | (1.8) | (1.5) |
Total assets | (207.4) | (207.7) |
Liabilities: | ||
Other liabilities | (6.4) | (7.2) |
Borrowings related to variable interest entities | 0 | 0 |
Notes payable of VIEs held by insurance subsidiaries | (203.3) | (204) |
Total liabilities | (209.7) | (211.2) |
Net Effect of Consolidating VIEs on the Balance Sheet [Member] | ||
Assets [Abstract] | ||
Investments held by variable interest entities | 1,724.3 | 1,633.6 |
Notes receivable of VIEs held by insurance subsidiaries | (204.2) | (204.3) |
Cash and cash equivalents held by variable interest entities | 189.3 | 364.4 |
Accrued investment income | 2.9 | 3.3 |
Income tax assets, net | 5.1 | 24.1 |
Other assets | 11.3 | (0.1) |
Total assets | 1,728.7 | 1,821 |
Liabilities: | ||
Other liabilities | 75.4 | 189.4 |
Borrowings related to variable interest entities | 1,662.8 | 1,676.4 |
Notes payable of VIEs held by insurance subsidiaries | 0 | 0 |
Total liabilities | $ 1,738.2 | $ 1,865.8 |
INVESTMENTS IN VARIABLE INTE130
INVESTMENTS IN VARIABLE INTEREST ENTITIES (SUPPLEMENTAL INFORMATION, REVENUES AND EXPENSES OF VARIABLE INTEREST ENTITIES) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||||||||||
Policyholder and reinsurer accounts and other special-purpose portfolios | $ 121.1 | $ 30 | $ 126.4 | ||||||||
Fee revenue and other income | 50.5 | 58.9 | 50.9 | ||||||||
Total revenues | $ 1,004.9 | $ 1,015.9 | $ 1,003.9 | $ 960.4 | $ 969.6 | $ 904.5 | $ 959.5 | $ 978.3 | 3,985.1 | 3,811.9 | 4,144.7 |
Expenses: | |||||||||||
Interest expense | 116.4 | 94.9 | 92.8 | ||||||||
Other operating costs and expenses | 796.3 | 739.2 | 802.8 | ||||||||
Total benefits and expenses | 3,631.9 | 3,444.2 | 3,969.6 | ||||||||
Net realized investment losses | 8.3 | (36.6) | 33.9 | ||||||||
Income before income taxes | $ 180.7 | $ 49.3 | $ 82.7 | $ 40.5 | $ 160.3 | $ 52.4 | $ 72.7 | $ 82.3 | 353.2 | 367.7 | 175.1 |
Variable Interest Entity, Primary Beneficiary [Member] | |||||||||||
Revenues: | |||||||||||
Policyholder and reinsurer accounts and other special-purpose portfolios | 78.9 | 62.1 | 47.2 | ||||||||
Fee revenue and other income | 6.4 | 1.6 | 1.1 | ||||||||
Total revenues | 85.3 | 63.7 | 48.3 | ||||||||
Expenses: | |||||||||||
Interest expense | 53.1 | 38.8 | 30.1 | ||||||||
Other operating costs and expenses | 1.5 | 2 | 1.2 | ||||||||
Total benefits and expenses | 54.6 | 40.8 | 31.3 | ||||||||
Income before net realized investment losses and income taxes | 30.7 | 22.9 | 17 | ||||||||
Net realized investment losses | (20.4) | (6.4) | (2.2) | ||||||||
Income before income taxes | $ 10.3 | $ 16.5 | $ 14.8 |
INVESTMENTS IN VARIABLE INTE131
INVESTMENTS IN VARIABLE INTEREST ENTITIES (SUMMARY OF VARIABLE INTEREST ENTITIES BY CONTRACTUAL MATURITY) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Variable Interest Entity [Line Items] | |
Total, Amortized Cost | $ 1,708.6 |
Total, Estimated Fair Value | 1,724.3 |
Amortized Cost [Member] | |
Variable Interest Entity [Line Items] | |
Due in one year or less | 20.5 |
Due after one year through five years | 846.5 |
Due after five years through ten years | 841.6 |
Total, Amortized Cost | 1,708.6 |
Due in one year or less | 10.5 |
Due after one year through five years | 175.2 |
Due after five years through ten years | 55.8 |
Total, Amortized Cost | 241.5 |
Estimated Fair Value [Member] | |
Variable Interest Entity [Line Items] | |
Due in one year or less | 20 |
Due after one year through five years | 853.1 |
Due after five years through ten years | 851.2 |
Total, Estimated Fair Value | 1,724.3 |
Due in one year or less | 9.9 |
Due after one year through five years | 172.5 |
Due after five years through ten years | 55.3 |
Total, Estimated Fair Value | $ 237.7 |
SCHEDULE II - BALANCE SHEET (D
SCHEDULE II - BALANCE SHEET (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets [Abstract] | ||||
Fixed maturities, available for sale, at fair value (amortized cost: 2016 - $-; 2015 - $5.0) | $ 21,096.2 | $ 19,882.9 | ||
Cash and cash equivalents - unrestricted | 478.9 | 432.3 | $ 611.6 | $ 699 |
Equity securities at fair value (cost: 2016 - $166.5; 2015 - $247.3) | 584.2 | 463 | ||
Trading securities | 363.4 | 262.1 | ||
Income tax assets, net | 789.7 | 898.8 | ||
Other assets | 328.5 | 309.2 | ||
Total assets | 31,975.2 | 31,125.1 | ||
Liabilities: | ||||
Notes payable | 912.9 | 911.1 | ||
Other liabilities | 611.4 | 707.8 | ||
Total liabilities | 27,488.3 | 26,986.6 | ||
Commitments and Contingencies | ||||
Shareholders' equity: | ||||
Accumulated other comprehensive income | 622.4 | 402.8 | ||
Retained earnings | 650.7 | 347.1 | ||
Total shareholders' equity | 4,486.9 | 4,138.5 | 4,688.2 | 4,955.2 |
Total liabilities and shareholders' equity | 31,975.2 | 31,125.1 | ||
Parent Company [Member] | ||||
Assets [Abstract] | ||||
Fixed maturities, available for sale, at fair value (amortized cost: 2016 - $-; 2015 - $5.0) | 0 | 5 | ||
Cash and cash equivalents - unrestricted | 106.1 | 128.9 | $ 86.6 | $ 131.1 |
Equity securities at fair value (cost: 2016 - $166.5; 2015 - $247.3) | 167.9 | 254.9 | ||
Trading securities | 0 | 1 | ||
Investment in wholly-owned subsidiaries (eliminated in consolidation) | 5,220.3 | 4,809.2 | ||
Income tax assets, net | 99.5 | 58.5 | ||
Receivable from subsidiaries (eliminated in consolidation) | 2 | 3.8 | ||
Other assets | 1.8 | 3.1 | ||
Total assets | 5,597.6 | 5,264.4 | ||
Liabilities: | ||||
Notes payable | 912.9 | 911.1 | ||
Payable to subsidiaries (eliminated in consolidation) | 128.4 | 135.9 | ||
Other liabilities | 69.4 | 78.9 | ||
Total liabilities | 1,110.7 | 1,125.9 | ||
Commitments and Contingencies | ||||
Shareholders' equity: | ||||
Common stock and additional paid-in capital ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2016 - 173,753,614; 2015 - 184,028,511) | 3,213.8 | 3,388.6 | ||
Accumulated other comprehensive income | 622.4 | 402.8 | ||
Retained earnings | 650.7 | 347.1 | ||
Total shareholders' equity | 4,486.9 | 4,138.5 | ||
Total liabilities and shareholders' equity | $ 5,597.6 | $ 5,264.4 |
SCHEDULE II - BALANCE SHEET Par
SCHEDULE II - BALANCE SHEET Parenthetical (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Condensed Financial Statements, Captions [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 19,803.1 | $ 18,947 |
Equity securities cost | $ 580.7 | $ 447.4 |
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) | 173,753,614 | 184,028,511 |
Common stock, shares outstanding (in shares) | 173,753,614 | 184,028,511 |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Fixed maturities, available for sale, amortized cost | $ 0 | $ 5 |
Equity securities cost | $ 166.5 | $ 247.3 |
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) | 173,753,614 | 184,028,511 |
Common stock, shares outstanding (in shares) | 173,753,614 | 184,028,511 |
SCHEDULE II - STATEMENT OF OPER
SCHEDULE II - STATEMENT OF OPERATIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||||||||||
Net investment income | $ 1,325.2 | $ 1,233.6 | $ 1,427.4 | ||||||||
Net realized investment gains (losses) | 8.3 | (36.6) | 33.9 | ||||||||
Total revenues | $ 1,004.9 | $ 1,015.9 | $ 1,003.9 | $ 960.4 | $ 969.6 | $ 904.5 | $ 959.5 | $ 978.3 | 3,985.1 | 3,811.9 | 4,144.7 |
Expenses: | |||||||||||
Interest expense | 116.4 | 94.9 | 92.8 | ||||||||
Loss on extinguishment or modification of debt | 0 | 32.8 | 0.6 | ||||||||
Income before income taxes | 180.7 | 49.3 | 82.7 | 40.5 | 160.3 | 52.4 | 72.7 | 82.3 | 353.2 | 367.7 | 175.1 |
Income tax expense | (53.5) | 30.7 | 22.8 | (5) | 23 | 18.6 | 25.9 | 29.5 | (5) | 97 | 123.7 |
Net income | $ 234.2 | $ 18.6 | $ 59.9 | $ 45.5 | $ 137.3 | $ 33.8 | $ 46.8 | $ 52.8 | 358.2 | 270.7 | 51.4 |
Parent Company [Member] | |||||||||||
Revenues: | |||||||||||
Net investment income | 15.6 | 16.9 | 12.7 | ||||||||
Net realized investment gains (losses) | 17.7 | 3.5 | 11.1 | ||||||||
Intercompany losses (eliminated in consolidation) | 0 | (1.5) | (1) | ||||||||
Total revenues | 33.3 | 18.9 | 22.8 | ||||||||
Expenses: | |||||||||||
Interest expense | 45.8 | 45.2 | 44 | ||||||||
Intercompany expenses (eliminated in consolidation) | 0.9 | 0.4 | 0.3 | ||||||||
Operating costs and expenses | 48.2 | 21 | 66.6 | ||||||||
Loss on extinguishment or modification of debt | 0 | 32.8 | 0.6 | ||||||||
Total expenses | 94.9 | 99.4 | 111.5 | ||||||||
Income before income taxes | (61.6) | (80.5) | (88.7) | ||||||||
Income tax expense | (54.6) | (37.9) | (34.1) | ||||||||
Loss before equity in undistributed earnings of subsidiaries | (7) | (42.6) | (54.6) | ||||||||
Equity in undistributed earnings of subsidiaries (eliminated in consolidation) | 365.2 | 313.3 | 106 | ||||||||
Net income | $ 358.2 | $ 270.7 | $ 51.4 |
SCHEDULE II - STATEMENT OF CASH
SCHEDULE II - STATEMENT OF CASH FLOWS (Details) - USD ($) $ in Millions | May 19, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Financial Statements, Captions [Line Items] | |||||
Cash flows from operating activities | $ 759.5 | $ 743.9 | $ 121.8 | [1] | |
Cash flows from investing activities: | |||||
Sales of investments | 2,841.8 | 2,177.6 | 2,090 | ||
Purchases of investments | (6,159.8) | (4,767.2) | (3,731.6) | ||
Net sales of trading securities | (84.2) | (12.3) | 4.9 | ||
Net cash provided (used) by investing activities | (742.4) | (1,069.6) | 56.3 | ||
Cash flows from financing activities: | |||||
Issuance of notes payable, net | $ 925 | 0 | 910 | 0 | |
Payments on notes payable | 0 | (797.1) | (62.9) | ||
Expenses related to extinguishment or modification of debt | 0 | (17.8) | (0.6) | ||
Issuance of common stock | 8.4 | 6.3 | 5 | ||
Payments to repurchase common stock and warrants | (203) | (365.2) | (319.1) | ||
Net cash provided (used) by financing activities | 29.5 | 146.4 | (265.5) | ||
Net increase (decrease) in cash and cash equivalents | 46.6 | (179.3) | (87.4) | ||
Cash and cash equivalents, beginning of year | 432.3 | 611.6 | 699 | ||
Cash and cash equivalents, end of year | 478.9 | 432.3 | 611.6 | ||
Parent Company [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Cash flows from operating activities | (114) | (55.1) | (66.7) | ||
Cash flows from investing activities: | |||||
Sales of investments | 305 | 66.5 | 229.8 | ||
Sales of investments - affiliated | 0 | 16 | 18.3 | ||
Maturities and redemptions of investments - affiliated | 0 | 8.3 | 0 | ||
Purchases of investments | (198.4) | (68.6) | (320.1) | ||
Purchases of investments - affiliated | 0 | (3.4) | (30.7) | ||
Net sales of trading securities | 12 | 11.8 | 9.9 | ||
Dividends received from consolidated subsidiary, net of capital contributions of $200.0 in 2016, nil in 2015 and $18.8 in 2014 | 92.5 | 269.7 | 423.5 | ||
Net cash provided (used) by investing activities | 211.1 | 300.3 | 330.7 | ||
Cash flows from financing activities: | |||||
Issuance of notes payable, net | 0 | 910 | 0 | ||
Payments on notes payable | 0 | (797.1) | (62.9) | ||
Expenses related to extinguishment or modification of debt | 0 | (17.8) | (0.6) | ||
Issuance of common stock | 8.4 | 6.3 | 5 | ||
Payments to repurchase common stock and warrants | (206.7) | (361.5) | (376.5) | ||
Common stock dividends paid | (54.8) | (52) | (51) | ||
Investment borrowings - repurchase agreements, net | 0 | (20.4) | 20.4 | ||
Issuance of notes payable to affiliates | 217.1 | 234.4 | 257.8 | ||
Payments on notes payable to affiliates | (83.9) | (104.8) | (100.7) | ||
Net cash provided (used) by financing activities | (119.9) | (202.9) | (308.5) | ||
Net increase (decrease) in cash and cash equivalents | (22.8) | 42.3 | (44.5) | ||
Cash and cash equivalents, beginning of year | 128.9 | 86.6 | 131.1 | ||
Cash and cash equivalents, end of year | $ 106.1 | $ 128.9 | $ 86.6 | ||
[1] | Cash flows from operating activities reflect outflows in 2014 due to the payment to reinsurer to transfer certain long-term care business. |
SCHEDULE II - STATEMENT OF C136
SCHEDULE II - STATEMENT OF CASH FLOWS Parenthetical (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Capital contributions | $ 200 | $ 0 | $ 18.8 |
SCHEDULE IV (Details)
SCHEDULE IV (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Assumed premiums earned | $ 33.8 | $ 38.4 | $ 34.5 |
Reinsurance ceded | (132.9) | (142.8) | (187.9) |
Insurance policy income | 2,601.1 | 2,556 | 2,629.7 |
Life insurance inforce | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Direct | 27,048.1 | 25,807 | 25,029 |
Assumed | 128.7 | 137.4 | 147.1 |
Ceded | (3,604) | (3,780.8) | (3,660.1) |
Net insurance inforce | $ 23,572.8 | $ 22,163.6 | $ 21,516 |
Percentage of assumed to net | 0.50% | 0.60% | 0.70% |
Insurance policy income | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Direct premiums earned | $ 2,553 | $ 2,524.3 | $ 2,558.2 |
Assumed premiums earned | 34 | 38.5 | 35 |
Reinsurance ceded | (123.9) | (133.6) | (176.7) |
Insurance policy income | $ 2,463.1 | $ 2,429.2 | $ 2,416.5 |
Premiums, percentage of assumed to net | 1.40% | 1.60% | 1.40% |