Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | UNION SECURITY INSURANCE CO |
Entity Central Index Key | 0000823533 |
Document Type | S-1 |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Balance Sheets
Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturity securities available for sale, at fair value (amortized cost — $774.0 in 2018 and $802.9 in 2017) | $ 883.9 | $ 993.3 |
Equity securities at fair value (cost — $75.6 in 2018 and $74.0 in 2017) | 81.3 | |
Equity securities at fair value (cost — $75.6 in 2018 and $74.0 in 2017) | 86.4 | |
Commercial mortgage loans on real estate, at amortized cost | 54.6 | 78.7 |
Policy loans | 6 | 6.7 |
Other investments | 45 | 39.7 |
Total investments | 1,070.8 | 1,204.8 |
Cash and cash equivalents | 5.4 | 2.5 |
Reinsurance recoverables | 3,323.2 | 3,424.5 |
Accrued investment income | 12 | 12.5 |
Other assets | 51 | 51.2 |
Assets held in separate accounts | 1,445.5 | 1,644.6 |
Total assets | 5,907.9 | 6,340.1 |
Liabilities | ||
Future policy benefits and expenses | 2,914.1 | 2,992.9 |
Unearned premiums | 49.9 | 54.5 |
Claims and benefits payable | 1,190.5 | 1,266.1 |
Deferred gain on disposal of businesses | 51.2 | 104.8 |
Accounts payable and other liabilities | 64.2 | 70.2 |
Liabilities related to separate accounts | 1,445.5 | 1,644.6 |
Total liabilities | 5,715.4 | 6,133.1 |
Commitments and contingencies (Note 12) | ||
Stockholder's equity | ||
Common stock, par value $5 per share, 1,000,000 shares authorized, issued, and outstanding | 5 | 5 |
Additional paid-in capital | 55.9 | 55.9 |
Retained earnings | 49.3 | 17.9 |
Accumulated other comprehensive income | 82.3 | 128.2 |
Total stockholder's equity | 192.5 | 207 |
Total liabilities and stockholder's equity | $ 5,907.9 | $ 6,340.1 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Fixed maturity securities available for sale, amortized cost | $ 774 | $ 802.9 |
Equity securities, cost | $ 75.6 | |
Equity securities available for sale, cost | $ 74 | |
Common stock, par value (in dollars per share) | $ 5 | $ 5 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares outstanding (in shares) | 1,000,000 | 1,000,000 |
Statements of Operations
Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Net earned premiums | $ 4.8 | $ 5.5 | $ 180.3 |
Net investment income | 64.6 | 64.2 | 97.8 |
Net realized (losses) gains on investments, excluding other-than-temporary investment losses | (1.4) | 9.8 | 165.1 |
Total other-than-temporary investment losses | 0 | (0.1) | (2) |
Portion of net loss recognized in other comprehensive income, before taxes | 0 | 0 | (0.2) |
Net other-than-temporary investment losses recognized in earnings | 0 | (0.1) | (2.2) |
Amortization of deferred gains and gains on disposal of businesses | 53.6 | 97.8 | 364.5 |
Fees and other income | 33.1 | 29 | 6.7 |
Total revenues | 154.7 | 206.2 | 812.2 |
Benefits, losses and expenses | |||
Policyholder benefits | 63.1 | 58.6 | 152.7 |
Underwriting, general and administrative expenses | 9.9 | 22.5 | 143.8 |
Total benefits, losses and expenses | 73 | 81.1 | 296.5 |
Income before provision for income taxes | 81.7 | 125.1 | 515.7 |
Provision for income taxes | 16.7 | 46.2 | 206.2 |
Net income | $ 65 | $ 78.9 | $ 309.5 |
Statements of Comprehensive Inc
Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 65 | $ 78.9 | $ 309.5 |
Other comprehensive (loss) income: | |||
Change in unrealized gains on securities, net of taxes of $16.5 million, $(12.9) million, and $42.6 million, respectively | (62.1) | 23.9 | (79.1) |
Change in other-than-temporary impairment losses recognized in other comprehensive income, net of taxes of $0.6 million, $(0.3) million, and $0.4 million, respectively | (2.4) | 0.6 | (0.7) |
Total other comprehensive (loss) income | (64.5) | 24.5 | (79.8) |
Total comprehensive income | $ 0.5 | $ 103.4 | $ 229.7 |
Statements of Comprehensive I_2
Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net change in unrealized gains on securities, taxes | $ 16.5 | $ (12.9) | $ 42.6 |
Net change in other-than-temporary impairment gains (losses) recognized in other comprehensive income, taxes | $ 0.6 | $ (0.3) | $ 0.4 |
Statements of Changes in Stockh
Statements of Changes in Stockholder's Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | ||
Balance at the beginning of the period at Dec. 31, 2015 | $ 770.6 | $ 5 | $ 515.6 | $ 66.5 | $ 183.5 | ||
Equity | |||||||
Net income | 309.5 | 309.5 | |||||
Dividends to Parent | [1] | (890) | (514) | (376) | |||
Capital contribution from affiliated entity | 54.3 | 54.3 | |||||
Other comprehensive income (loss) | (79.8) | (79.8) | |||||
Balance at the end of the period at Dec. 31, 2016 | 164.6 | 5 | 55.9 | 103.7 | |||
Equity | |||||||
Net income | 78.9 | 78.9 | |||||
Dividends to Parent | (61) | [1] | (61) | ||||
Capital contribution from affiliated entity | 54.3 | ||||||
Other comprehensive income (loss) | 24.5 | 24.5 | |||||
Balance at the end of the period at Dec. 31, 2017 | 207 | 5 | 55.9 | 17.9 | 128.2 | ||
Equity | |||||||
Net income | 65 | 65 | |||||
Dividends to Parent | (15) | [1] | (15) | ||||
Other comprehensive income (loss) | (64.5) | (64.5) | |||||
Balance at the end of the period at Dec. 31, 2018 | $ 192.5 | $ 5 | $ 55.9 | $ 49.3 | $ 82.3 | ||
[1] | Dividends are required to be deducted from retained earnings and when depleted, deducted from additional paid-in capital. |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Operating activities | ||||
Net income | $ 65 | $ 78.9 | $ 309.5 | |
Noncash revenues, expenses, gains and losses included in income: | ||||
Deferred tax expense (benefit) | [1] | 7.2 | 49.5 | (65.2) |
Amortization of deferred gain and gains on disposal of businesses | (53.6) | (97.8) | (364.5) | |
Depreciation and amortization | (0.6) | (0.2) | 1.8 | |
Net realized losses (gains) on investments | [2] | 1.4 | (9.7) | (162.9) |
Change in securities classified as trading | [2] | 0 | 25.2 | (29.7) |
Goodwill impairment | 0 | 0 | 17.3 | |
Changes in operating assets and liabilities: | ||||
Change in reinsurance recoverable | (5.4) | 3 | (7.6) | |
Change in insurance policy reserves and expenses | (59.8) | (91.6) | (76.2) | |
Change in other assets and other liabilities | (1.2) | (7.9) | (29.8) | |
Change in taxes payable | 8.1 | (6.4) | (1.4) | |
Other | 2.8 | 9.7 | 12 | |
Net cash used in operating activities | (36.1) | (47.3) | (396.7) | |
Sales of: | ||||
Fixed maturity securities available for sale | 177.7 | 148.3 | 265 | |
Equity securities | 9.5 | |||
Equity securities | 12.2 | 34.5 | ||
Other invested assets | 27.3 | 4.9 | 16.8 | |
Subsidiary, net of cash transferred | [2] | 0 | 0 | 880.5 |
Commercial mortgage loans on real estate (3) | [3] | 0 | 0 | 51.2 |
Maturities, calls, prepayments, and scheduled redemption of: | ||||
Fixed maturity securities available for sale | 32.6 | 44.7 | 66.3 | |
Commercial mortgage loans on real estate | 33.1 | 28.8 | 27.9 | |
Purchases of: | ||||
Fixed maturity securities available for sale | (179.6) | (177.4) | (478.1) | |
Equity securities | 10.6 | |||
Equity securities | (0.3) | (39.9) | ||
Commercial mortgage loans on real estate | (8.6) | (10.5) | (8.4) | |
Other invested assets | (15.3) | (4.8) | (2.6) | |
Change in short-term investments | (12.8) | (3.8) | (145) | |
Change in policy loans | 0.7 | 0.7 | 1.2 | |
Net cash provided by investing activities | 54 | 42.8 | 669.4 | |
Financing activities | ||||
Cash dividends paid | (15) | (1.9) | (379.4) | |
Capital contribution from affiliated entity | [2] | 0 | 0 | 54.3 |
Net cash used in financing activities | (15) | (1.9) | (325.1) | |
Cash included in business classified as held for sale | 0 | 0 | 1.2 | |
Change in cash and cash equivalents | 2.9 | (6.4) | (51.2) | |
Cash and cash equivalents at beginning of period | 2.5 | 8.9 | 60.1 | |
Cash and cash equivalents at end of period | 5.4 | 2.5 | 8.9 | |
Supplemental information: | ||||
Income taxes paid | $ 4 | $ 4.3 | $ 273.2 | |
[1] | 2017 includes the one-time $4.5 million provision from the reduction of net deferred tax assets following the enactment of the U.S. Tax Cuts and Jobs Act. Refer to Note 5 - Income Taxes, for additional information. | |||
[2] | Related to the sale of Assurant Employee Benefits segment mainly through reinsurance transactions. The capital contribution from the affiliated entity is related to the difference in contractual and allocated consideration attributable to that entity. | |||
[3] | n May of 2016 the Company transferred certain commercial mortgage loans on real estate into a trust. Upon transfer the loans were securitized as a source of funding for the Company and as a means of transferring the economic risk of the loans to third parties. |
Nature of Operations and Items
Nature of Operations and Items Impacting Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND ITEMS IMPACTING BASIS OF PRESENTATION | NATURE OF OPERATIONS AND ITEMS IMPACTING BASIS OF PRESENTATION Overview: Union Security Insurance Company (the “Company”) is a provider of pre-funded funeral insurance ("preneed") products and accidental death and dismemberment policies. Prior to March 1, 2016, the Company was also a provider of life and health insurance products, including group insurance products. On March 1, 2016, Assurant, Inc. ("Assurant" or the "Parent") sold its Assurant Employee Benefits ("AEB") segment mainly through a series of reinsurance transactions with the United States branch of Sun Life Assurance Company of Canada ("Sun Life"), a subsidiary of Sun Life Financial Inc. The sale of AEB had a material impact to the results of operations, cash flows and financial condition of the Company. The Company's financial statements also reflect the assets, liabilities and activity associated with businesses that were sold through reinsurance and coinsurance arrangements. In 2001, Assurant entered into a reinsurance agreement with Talcott Resolution (formerly owned by The Hartford) for the sale of the Fortis Financial Group ("FFG") division. In 2000, the Company divested its Long-Term Care ("LTC") operations to John Hancock Life Insurance Company, a subsidiary of Manulife Financial Corporation ("John Hancock"). Assets supporting liabilities ceded relating to these businesses are mainly held in trusts and the separate accounts relating to FFG are still reflected in the Company's balance sheet. The Company is a wholly-owned subsidiary of the Parent. The Parent’s common stock is traded on the New York Stock Exchange under the symbol "AIZ". The Company distributes its products in the District of Columbia and in all U.S. states except New York. Sale of Assurant Employee Benefits: As referenced above, on March 1, 2016, the Parent completed the sale of its Assurant Employee Benefits segment through a series of transactions with Sun Life, for net cash consideration of $942.2 million (including contingent consideration), which resulted in a total estimated gain of $656.5 million. The Company's allocated portion of the cash consideration and the estimated gain was $884.4 million and $604.1 million, respectively, (the remaining cash consideration and estimated gain was allocated to other Assurant affiliates). The transaction was primarily structured as a reinsurance arrangement, as well as the sale of certain legal entities that included a ceding commission and other consideration. The reinsurance transaction did not extinguish the Company's primary liability on the policies it has issued or assumed, thus any gains associated with the prospective component of the reinsurance transaction are deferred and amortized over the contract period, including contractual renewal periods, in proportion to the amount of insurance coverage provided. The Company also has an obligation to continue to write and renew certain policies for a period of time until Sun Life commences policy writing and renewal. The Company was required to allocate the proceeds considering the relative fair value of transaction components. Most of the expected gains resulting from the transaction related to our compensation for the inforce policies (prospective component), sales of net assets underlying the continuing business, as well as the future compensation for our performance obligations to write and renew certain policies for a period of time. The reinsurance for existing claims liabilities (retroactive component) resulted in a loss when considering the amounts paid for reinsurance premiums (assets we transferred to Sun Life) exceeded the recorded liabilities related to the underlying reinsurance contracts. The Company also recognized realized gains associated with the fair value of assets transferred to Sun Life (which offset losses on the retroactive component). The terms "deferred gain" and "amortization of deferred gain" broadly reflect the multiple transaction elements and earnings thereof, inclusive of the expected and actual income resulting from the reinsurance subject to prospective accounting, income expected to be earned related to the deferred gains associated with long-duration contracts, and the expected recognition of deferred revenues associated with our performance obligations. The Company’s deferred gain amount (representing $491.4 million of the total $604.1 million of original estimated gains) has been and will continue to be recognized as revenue over the contract period in proportion to the amount of insurance coverage provided, including estimated contractual renewals pursuant to rate guarantees. The following represents a summary of the pre-tax gain recognized by transaction component, as well as the related classification within the Financial Statements: Years Ended December 31, 2018 2017 2016 Gain on sale of entities $ — $ — $ 6.6 Novations, resulting in recognized gains (a) — — 59.1 Loss on retroactive reinsurance component, before realized gains (b) — — (109.6 ) Net loss prior to realized gains on transferred securities supporting retroactive component (c) — — (43.9 ) Realized gains on transferred securities supporting retroactive component — — 141.5 Amortization of deferred gains (d) $ 46.4 $ 90.0 $ 356.1 Total $ 46.4 $ 90.0 $ 453.7 (a) Novations of certain insurance policies directly to Sun Life allowed for immediate gain recognition. (b) Reinsurance of existing claims liabilities requires retroactive accounting necessitating losses to be recognized immediately. However, upon transfer of the associated assets supporting the liabilities, the Company recognized realized gains which more than offset the retroactive losses. The Company was required to classify the realized gains as part of net realized gains on investments, within the statement of operation. (c) Amount classified within underwriting, general and administrative expenses in the statements of operations. (d) Amounts classified as amortization of deferred gains and gains on disposal of businesses within the statements of operations. The year ended December 31, 2017 amount includes subsequent novations of $ 1.4 million that allowed immediate gain recognition. The remaining unamortized deferred gain as of December 31, 2018 was $ 16.1 million . Dividends to Parent: The Company declared and paid dividends of $ 15.0 million , $61.0 million and $890.0 million during the years ended December 31, 2018, 2017 and 2016, respectively. In 2018, the dividends were paid in cash. In 2017, the dividends were paid in the form of cash and investments of $ 1.9 million and $59.1 million, respectively. In 2016, the dividends were paid in the form of cash and investments of $379.4 million and $510.6 million , respectively (which were required to first be deducted from available retained earnings of $376.0 million with the remaining from additional paid in capital). Impairment of Goodwill: Due to the AEB sale to Sun Life, the Company no longer expected to have sufficient income from continuing operations to support the realization of its goodwill. As a result of this change, the Company impaired all of its goodwill of $17.3 million during 2016. Other transactional impacts: The Company also received a capital contribution of $54.3 million from an affiliated entity related to the sale of AEB based on the difference in contractual and allocated consideration attributable to that entity. Income from AEB presented in the financial statements: The pre-tax income for AEB (prior to the sale to Sun Life) was $14.0 million for the year ended December 31, 2016. Presentation of certain preneed life insurance policies: During 2017, the Company corrected the accounting presentation of certain preneed life insurance policies given the increasing materiality to these financial statements following the sale of AEB in 2016. These contracts, which have discretionary death benefit increases, should be presented as universal life type contracts. The policies were historically presented as limited-pay contracts. The universal life presentation treats the premiums collected as deposits. Revenues are presented as fees charged to policyholders and amortization of previously deferred profit margins. Benefits are presented as interest credited to policyholders and death benefits in excess of notional fund value released . The change had no net impact on the balance sheet or statement of operations and was consistently applied in 2018. The Company did not change the 2016 presentation for this change as it was deemed immaterial to that period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Amounts are presented in United States of America (“U.S.”) dollars and all amounts are in millions, except for number of shares, per share amounts, number of securities and number of loans. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts. The items affected by the use of estimates include but are not limited to, investments, reinsurance recoverables, other assets, future policy benefits and expenses, unearned premiums, claims and benefits payable, deferred gain on disposal of businesses, and commitments and contingencies. The estimates are sensitive to market conditions, investment yields, mortality, morbidity, commissions and other acquisition expenses, policyholder behavior and other factors. Actual results could differ from the estimates recorded. The Company believes all amounts reported are reasonable and adequate. Fair Value The Company uses an exit price for its fair value measurements. An exit price is defined as the amount received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, the Company gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. See Note 4 for additional information. Investments Fixed maturity securities are classified as available-for-sale as defined in the investments guidance and are reported at fair value. If the fair value is higher than the amortized cost for fixed maturity securities, the excess is an unrealized gain; and, if lower than amortized cost, the difference is an unrealized loss. Net unrealized gains and losses on securities classified as available-for-sale, less deferred income taxes, are included in AOCI. Equity securities that have readily determinable fair values are measured at fair value with changes in fair value recognized in net realized (losses) gains on investments on the Company’s 2018 statement of operations. Prior to the adoption of new accounting guidance effective January 1, 2018, equity securities were measured at fair value, with aggregate changes in fair value recorded through other comprehensive income . Commercial mortgage loans on real estate are reported at unpaid balances, adjusted for amortization of premium or discount, less allowance for losses. The allowance is based on management’s analysis of factors including actual loan loss experience, specific events based on geographical, political or economic conditions, industry experience, loan groupings that have probable and estimable losses and individually impaired loan loss analysis. A loan is considered individually impaired when it becomes probable the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement. Indicative factors of impairment include, but are not limited to, whether the loan is current, the value of the collateral and the financial position of the borrower. If a loan is individually impaired, the Company uses one of the following valuation methods based on the individual loan’s facts and circumstances to measure the impairment amount: (1) the present value of expected future cash flows, (2) the loan's observable market price, or (3) the fair value of collateral. Changes in the allowance for loan losses are recorded in net realized losses on investments, excluding other-than-temporary impairment (“OTTI”) losses. The Company places loans on non-accrual status after 90 days of delinquent payments (unless the loans are both well secured and in the process of collection). A loan may be placed on non-accrual status before this time if information is available that suggests its impairment is probable. Other investments consist primarily of investments in joint ventures, partnerships and short-term investments. The joint ventures and partnerships are valued according to the equity method of accounting. In applying the equity method, the Company uses financial information provided by the investee, generally on a three month lag. Short-term investments include securities and other investments with durations of one year or less, but greater than three months, between the date of purchase and maturity. These amounts are reported at cost or amortized cost, which approximates fair value. Realized gains and losses on sales of investments are recognized on the specific identification basis. Investment income is recorded as earned and reported net of investment expenses. The Company uses the interest method to recognize interest income on its commercial mortgage loans. The Company anticipates prepayments of principal in the calculation of the effective yield for mortgage-backed securities and structured securities. The retrospective method is used to adjust the effective yield for the majority of the Company's mortgage-backed and structured securities. Total Other-Than-Temporary Impairment Losses For debt securities with credit losses and non-credit losses or gains, total OTTI losses is the total of the decline in fair value from either the most recent OTTI determination or a prior period end in which the fair value declined until the current period end valuation date. This amount does not include any securities that had fair value increases. For debt securities that the Company has either the intent to sell or it is more likely than not that it will be required to sell below amortized cost, total other-than-temporary losses is the amount by which the fair value of the security is less than its amortized cost basis at the period end valuation date and the decline in fair value is deemed to be other-than-temporary. For debt securities determined to have an OTTI, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected represents a credit loss that is recognized in earnings. If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI represents a non-credit loss that is recorded in other comprehensive income. Cash and Cash Equivalents The Company considers all highly liquid securities and other investments with durations of three months or less between the date of purchase and maturity to be cash equivalents. These amounts are carried at cost, which approximates fair value. Cash balances are reviewed at the end of each reporting period to determine if negative cash balances exist. If negative cash balances exist, the cash accounts are netted with other positive cash accounts of the same bank provided the right of offset exists between the accounts. If the right of offset does not exist, the negative cash balances are reclassified to accounts payable and other liabilities. Reinsurance Reinsurance recoverables include amounts related to paid benefits and estimated amounts related to unpaid policy and contract claims, future policyholder benefits and policyholder contract deposits. The cost of reinsurance is recognized as a reduction to premiums earned over the terms of the underlying reinsured policies. Amounts recoverable from reinsurers are estimated in a manner consistent with claim and claim adjustment expense reserves or future policy benefits reserves and are reported in the balance sheets. The cost of reinsurance related to long-duration contracts is recognized over the life of the underlying reinsured policies. The ceding of insurance does not discharge the Company’s primary liability to insureds, thus a credit exposure exists to the extent that any reinsurer is unable to meet the obligation assumed in the reinsurance agreements. To mitigate this exposure to reinsurer insolvencies, the Company evaluates the financial condition of its reinsurers and typically holds collateral (in the form of funds withheld, trusts and letters of credit) as security under the reinsurance agreements. An allowance for doubtful accounts is recorded on the basis of periodic evaluations of balances due from reinsurers (net of collateral), reinsurer solvency, management’s experience and current economic conditions. Reinsurance premiums assumed are calculated based upon payments received from ceding companies together with accrual estimates, which are based on both payments received and in force policy information received from ceding companies. Any subsequent differences arising on such estimates are recorded in the period in which they are determined. Other Assets Other assets include prepaid items, deferred acquisition costs, value of business acquired in acquisitions and premiums and accounts receivable, net. Separate Accounts Assets and liabilities associated with separate accounts relate to premium and annuity considerations for variable life and annuity products for which the contract-holder, rather than the Company, bears the investment risk. Separate account assets (with matching liabilities) are reported at fair value. Revenues and expenses related to the separate account assets and liabilities, to the extent of benefits paid or provided to the separate account policyholders, are excluded from the amounts reported in the accompanying statements of operations because the underlying accounts involve investment-type annuity contracts and/or are subject to reinsurance. Reserves Reserves are established using generally accepted actuarial methods and reflect judgments about expected future claim payments. Factors used in their calculation include experience derived from historical claim payments and actuarial assumptions. Calculations incorporate assumptions about the incidence of incurred claims, the extent to which all claims have been reported, reporting lags, expenses, inflation rates, future investment earnings, internal claims processing costs and other relevant factors. While the methods of making such estimates and establishing the related liabilities are periodically reviewed and updated, the estimation of reserves includes an element of uncertainty given that management is using historical information and methods to project future events and reserve outcomes. The recorded reserves represent the Company's best estimate at a point in time of the ultimate costs of settlement and administration of a claim or group of claims based upon actuarial assumptions and projections using facts and circumstances known at the time of calculation. The adequacy of reserves may be impacted by future trends in claims severity, frequency, judicial theories of liability and other factors. These variables are affected by both external and internal events, including but not limited to: changes in the economic cycle, inflation, natural or human-made catastrophes, judicial trends, legislative changes and claims handling procedures. Many of these items are not directly quantifiable and not all future events can be anticipated when reserves are established. Reserve estimates are refined as experience develops. Adjustments to reserves, both positive and negative, are reflected in the statement of operations in the period in which such estimates are updated. Because establishment of reserves is an inherently complex process involving significant judgment and estimates, there can be no certainty that future settlement amounts for claims incurred through the financial reporting date will not vary from reported claims reserves. Future loss development could require reserves to be increased or decreased, which could have a material effect on the Company's earnings in the periods in which such increases or decreases are made. However, based on information currently available, the Company believes its reserve estimates are adequate. Long Duration Contracts Future policy benefits and expense reserves for preneed investment-type annuities, and the variable life insurance and investment-type annuity contracts consist of policy account balances before applicable surrender charges and certain deferred policy initiation fees that are being recognized in income over the terms of the policies. Policy benefits charged to expense during the period include amounts paid in excess of policy account balances and interest credited to policy account balances. An unearned revenue reserve is also recorded for those preneed investment-type annuities which represent the balance of the excess of gross premiums over net premiums that is still recognized in future years’ income in a constant relationship to estimated gross profits. Future policy benefits and expense reserves for preneed life insurance contracts issued prior to 2009 are reported at the present value of future benefits to policyholders and related expenses less the present value of future net premiums. Reserve assumptions are selected using best estimates for expected investment yield, inflation, mortality and withdrawal rates. These assumptions reflect current trends, are based on Company experience and include provision for possible unfavorable deviation. An unearned revenue reserve is also recorded for these contracts which represents the balance of the excess of gross premiums over net premiums that is still to be recognized in future years’ income in a constant relationship to insurance in force. Future policy benefits and expense reserves for policies fully covered by reinsurance and certain life, annuity and group life conversion policies no longer offered are equal to the present value of future benefits to policyholders plus related expenses less the present value of the future net premiums. These amounts are estimated based on assumptions as to the expected investment yield, inflation, mortality, morbidity and withdrawal rates as well as other assumptions that are based on the Company’s experience. These assumptions reflect anticipated trends and include provisions for possible unfavorable deviations. Changes in the estimated liabilities are reported as a charge or credit to policyholder benefits as the estimates are revised. Short Duration Contracts The Company’s short duration contracts include accidental death products, former AEB group insurance contracts no longer offered. For short duration contracts, claims and benefits payable reserves are recorded when insured events occur. The liability is based on the expected ultimate cost of settling the claims. The claims and benefits payable reserves include: (1) case reserves for known but unpaid claims as of the balance sheet date; (2) incurred but not reported ("IBNR") reserves for claims where the insured event has occurred but has not been reported to the Company as of the balance sheet date; and (3) loss adjustment expense reserves for the expected handling costs of settling the claims . Changes in the estimated liabilities are recorded as a charge or credit to policyholder benefits as estimates are revised. Contingencies A loss contingency is recorded if reasonably estimable and probable. The Company establishes reserves for these contingencies at the best estimate, or if no one estimated amount within the range of possible losses is more probable than any other, the Company records an estimated reserve at the low end of the estimated range. Contingencies affecting the Company primarily relate to legal and regulatory matters, which are inherently difficult to evaluate and are subject to significant changes. Premiums Long Duration Contracts For traditional life insurance policies previously sold by the Global Preneed business, revenue is recognized when due from policyholders. For investment-type annuity contracts previously sold by the Global Preneed business, revenues consist of charges assessed against policy balances. Premiums for the Company’s previously sold long-term care insurance and traditional life insurance contracts are recognized as revenue when due from the policyholder. For universal life insurance and investment-type annuity contracts, revenues consist of charges assessed against policy balances. All of these premiums (related to the Company’s former Fortis Financial Group and Long-Term Care businesses that were previously sold) are ceded. Short Duration Contracts The Company’s short duration contracts revenue is recognized over the contract term in proportion to the amount of insurance protection provided. Fees and Other Income Income earned on preneed life insurance policies with discretionary death benefits is presented within fees and other income. Prior to March 1, 2016, the Company also derived fees and other income from providing administrative services related to the AEB business. These fees were recognized monthly when services were performed. Underwriting, General and Administrative Expenses Underwriting, general and administrative expenses consist primarily of commissions, premium taxes, licenses, fees, salaries and personnel benefits, goodwill impairment, amortization of deferred acquisition costs, amortization of value of business acquired and other general operating expenses. Income Taxes The Company reports its taxable income in a consolidated federal income tax return along with other affiliated subsidiaries of the Parent. Income tax expense or benefit is allocated among the affiliated subsidiaries by applying income tax rates to taxable income or loss determined on a separate return basis according to a tax allocation agreement. Entities with losses record current tax benefits to the extent such losses are utilized in the consolidated federal tax return. Current federal income taxes are recognized based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income taxes are recorded for temporary differences between the financial reporting basis and income tax basis of assets and liabilities, based on enacted tax laws and statutory tax rates applicable to the periods in which the Company expects the temporary differences to reverse. A valuation allowance is established for deferred tax assets when it is more likely than not that an amount will not be realized. The impact of changes in tax rates on all deferred tax assets and liabilities are required to be reflected within income on the enactment date, regardless of the financial statement component where the deferred tax originated. The Company classifies net interest expense related to tax matters and any applicable penalties as a component of income tax expense. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income, net unrealized gains and losses on securities classified as available for sale and net unrealized gains and losses on other-than-temporarily impaired securities, less deferred income taxes. Deferred Gain on Disposal of Businesses The applicable gains related to the AEB, LTC and FFG businesses referenced in Note 1 were required to be deferred and reported as liabilities since the form of these sales did not discharge the Company's primary liability to the insureds. The liabilities have been, and will continue to be amortized and recognized as revenue over the estimated life of the contracts’ terms. The Company reviews and evaluates the estimates affecting the deferred gain on disposal of the respective businesses at least annually, and adjusts the revenue recognized accordingly. Recent Accounting Pronouncements — Adopted Financial instruments measurement and classification : On January 1, 2018, the Company adopted the amended guidance on the measurement and classification of financial instruments whereby all common and preferred stocks are measured at fair value with changes in fair value recognized through income. Upon adoption, the Company recorded a cumulative effect adjustment to increase retained earnings by $8.1 million , which represents a reclassification of the unrealized gains on common and preferred stock as of the date of adoption from AOCI. Income tax consequences for intra-entity transfers of assets : On January 1, 2018, the Company adopted the amended guidance on tax accounting for intra-entity transfers of assets. The amended guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Also, the amended guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The adoption of this amended guidance did not have an impact on the Company’s financial position and results of operations. Statement of cash flows presentation and classification : On January 1, 2018, the Company adopted the amended guidance on presentation and classification in the statement of cash flows. The amended guidance addresses certain specific cash flow issues including debt prepayment and debt extinguishment costs; settlement of zero-coupon or insignificant coupon debt instruments; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and guidance related to the identification of the primary source for separately identifiable cash flows. The adoption of this amended guidance did not have an impact on the Company's financial position and results of operations. Classification of certain tax effects from AOCI: In February 2018, the Financial Accounting Standards Board (the "FASB") issued amended guidance on reclassifying the stranded tax effects from the U.S. Tax Cuts and Jobs Act (the "TCJA") from AOCI to retained earnings. During 2018, the Company adopted the new guidance and reclassified $(26.7) million from AOCI to retained earnings, with no impact on net income or total stockholders' equity. Accounting standards require the effect of a change in tax laws or rates on deferred tax liabilities or assets be included in net income in the reporting period that includes the enactment date, even though the related income tax effects may have been originally charged or credited to AOCI. The amounts reclassified relate to the difference between the original tax effect of items included in other comprehensive income, such as unrealized gains or losses on securities and the revised tax effects from the TCJA. Recent Accounting Pronouncements — Not Yet Adopted Reporting credit losses of assets held at amortized cost : In June 2016, the FASB issued amended guidance on reporting credit losses for assets held at amortized cost and available for sale debt securities. For assets held at amortized cost, the amended guidance eliminates the probable recognition threshold and instead requires an entity to reflect the current estimate of all expected credit losses. For available for sale debt securities, credit losses are measured in a manner similar to current accounting requirements; however, the amended guidance requires that credit losses be presented as an allowance rather than as a permanent impairment. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amended guidance is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Therefore, the Company is required to adopt the guidance on January 1, 2020. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations. Targeted improvements to the accounting for long-duration contracts: In August 2018, the FASB issued guidance that provides targeted improvements to the accounting for long-duration contracts. The guidance includes the following primary changes: assumptions supporting benefit reserves will no longer be locked-in but must be updated at least annually with the impact of changes to the liability reflected in earnings (except for discount rates); the discount rate assumptions will be based on upper-medium grade (low credit risk) fixed-income instruments instead of the earnings rate of invested assets; the discount rate must be evaluated at each reporting date and the impact of changes to the liability estimate as a result of updating the discount rate assumption is required to be recognized in other comprehensive income; the provision for adverse deviation is eliminated; and premium deficiency testing is eliminated. Other noteworthy changes include the following: differing models for amortizing deferred acquisition costs will become uniform for all long-duration contracts based on a constant rate over the expected term of the related in force contracts; all market risk benefits associated with deposit contracts must be reported at fair value with changes reflected in income except for changes related to credit risk which will be recognized in other comprehensive income; and disclosures will be expanded to include disaggregated roll forwards of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. Generally, the amendments are applied retrospectively as of the beginning of the earliest period presented with two transition options available for changing the assumptions. This guidance will apply to the Company's preneed life insurance policies, as well as its annuity and universal life products (which are no longer offered and are in run-off). The Company is evaluating the potential impact of this guidance on its financial position and results of operations. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS The following tables show the cost or amortized cost, gross unrealized gains and losses, fair value and OTTI included within AOCI of the Company's fixed maturity securities (and equity securities for 2017) as of the dates indicated: December 31, 2018 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (1) Fixed maturity securities: U.S. government and government agencies and authorities $ 10.8 $ 0.1 $ — $ 10.9 $ — States, municipalities and political subdivisions 13.0 0.9 — 13.9 — Foreign governments 8.4 1.2 — 9.6 — Asset-backed 80.4 0.1 (1.8 ) 78.7 — Commercial mortgage-backed 3.5 — (0.2 ) 3.3 — Residential mortgage-backed 37.0 1.6 (0.4 ) 38.2 1.0 U.S. corporate 497.8 91.1 (1.9 ) 587.0 10.0 Foreign corporate 123.1 19.5 (0.3 ) 142.3 — Total fixed maturity securities $ 774.0 $ 114.5 $ (4.6 ) $ 883.9 $ 11.0 December 31, 2017 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (1) Fixed maturity securities: U.S. government and government agencies and authorities $ 3.1 $ 0.1 $ — $ 3.2 $ — States, municipalities and political subdivisions 4.7 0.9 — 5.6 — Foreign governments 8.4 2.1 — 10.5 — Asset-backed 28.7 0.3 — 29.0 — Commercial mortgage-backed 3.5 — (0.2 ) 3.3 — Residential mortgage-backed 39.6 2.5 (0.4 ) 41.7 1.6 U.S. corporate 588.6 153.6 (0.1 ) 742.1 12.5 Foreign corporate 126.3 31.6 — 157.9 — Total fixed maturity securities $ 802.9 $ 191.1 $ (0.7 ) $ 993.3 $ 14.1 Equity securities: Common stocks $ 0.1 $ 0.5 $ — $ 0.6 $ — Non-redeemable preferred stocks 73.9 12.0 (0.1 ) 85.8 — Total equity securities $ 74.0 $ 12.5 $ (0.1 ) $ 86.4 $ — (1) Represents the amount of OTTI recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date. The Company's state, municipalities and political subdivisions holdings are highly diversified across the United States, with no individual state, municipality or political subdivision exposure (including both general obligation and revenue securities) exceeding 0.6% and 0.5% of the overall investment portfolio as of December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, revenue bonds account for 82% and 100% of the holdings, respectively. The activities supporting the income streams of the Company's revenue bonds are across a broad range of sectors, primarily airport, marina and specifically pledged tax revenues. The Company has European investment exposure in its corporate fixed maturity of $67.8 million with a net unrealized gain of $8.0 million as of December 31, 2018 and $76.5 million with a net unrealized gain of $14.7 million as of December 31, 2017. Approximately 23% and 24% of the corporate European exposure is held in the financial industry at both December 31, 2018 and 2017, respectively. The Company's largest European country exposure (the United Kingdom) represented approximately 4% and 3% of the fair value of the Company's corporate fixed maturity securities as of December 31, 2018 and 2017, respectively. The Company's international investments are managed as part of the overall portfolio with the same approach to risk management and focus on diversification. The cost or amortized cost and fair value of fixed maturity securities at December 31, 2018 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties. Cost or Amortized Cost Fair Value Due in one year or less $ 17.8 $ 18.0 Due after one year through five years 63.5 66.5 Due after five years through ten years 82.2 92.9 Due after ten years 489.6 586.3 Total 653.1 763.7 Asset-backed 80.4 78.7 Commercial mortgage-backed 3.5 3.3 Residential mortgage-backed 37.0 38.2 Total $ 774.0 $ 883.9 Major categories of net investment income were as follows for the periods indicated: Years Ended December 31, 2018 2017 2016 Fixed maturity securities $ 49.7 $ 52.4 $ 74.1 Equity securities 5.1 5.4 7.0 Commercial mortgage loans on real estate 3.8 5.6 10.2 Policy loans 0.4 0.4 0.5 Other investments 7.0 2.5 7.7 Cash and cash equivalents 0.1 — 0.3 Total investment income 66.1 66.3 99.8 Investment expenses (1.5 ) (2.1 ) (2.0 ) Net investment income $ 64.6 $ 64.2 $ 97.8 No material investments of the Company were non-income producing for the years ended December 31, 2018, 2017 and 2016. The following table summarizes the proceeds from sales of available-for-sale fixed maturities (and equity securities from 2017 and 2016 prior to the previously described fair value change in accounting) and gross realized gains and gross realized losses that have been recognized in the statement of operations as a result of those sales for the periods indicated: For the Years Ended December 31, 2018 2017 2016 Proceeds from sales $ 177.7 $ 218.7 $ 1,939.4 Gross realized gains (1) 6.9 7.1 168.9 Gross realized losses (2) (2.6 ) (0.4 ) (19.9 ) (1) G ross realized gains for the y ear ended December 31, 2016 includes $145.6 million related to the sale of Assurant Employee Benefits as described in Note 1. (2) Gross realized losses for the year ended December 31, 2016 includes $15.9 million related to the sale of Assurant Employee Benefits as described in Note 1. For securities sold at a loss during the year ended December 31, 2018, the average period of time these securities were trading continuously at a price below book value was approximately 3 months . The following table sets forth the net realized gains (losses), including OTTI, recognized in the statement of operations for the periods indicated: Years Ended December 31, 2018 2017 2016 Net realized gains (losses) related to sales and other: Fixed maturity securities $ 4.3 $ 6.1 $ 143.6 Equity securities (6.1 ) 0.2 5.7 Commercial mortgage loans on real estate 0.4 1.3 13.6 Other investments — 2.2 2.2 Total net realized gains related to sales and other (1) (1.4 ) 9.8 165.1 Net realized losses related to other-than-temporary impairments: Fixed maturity securities — (0.1 ) (0.3 ) Other investments — — (1.9 ) Total net realized losses related to other-than-temporary impairments — (0.1 ) (2.2 ) Total net realized gains $ (1.4 ) $ 9.7 $ 162.9 (1) The year ended December 31, 2016 net realized gains includes $141.5 million related to the sale of Assurant Employee Benefits as described in Note 1. The following table sets forth the portion of unrealized gains related to equity securities for the year ended December 31, 2018: Year Ended December 31, 2018 Net losses recognized on equity securities $ (6.1 ) Less: Net realized gains related to sales of equity securities 0.4 Total net unrealized losses on equity securities held (1) $ (6.5 ) (1) Net gains for the year ended December 31, 2018 are required to be reported through the income statement in accordance with the 2018 accounting guidance on financial instruments. Net unrealized gains of $4.5 million and loss of $5.8 million for the years ended December 31, 2017 and 2016, respectively, were reported through AOCI. Other-Than-Temporary Impairments The Company follows the OTTI guidance, which requires entities to separate an OTTI of a debt security into two components when there are credit related losses associated with the impaired debt security for which the Company asserts that it does not have the intent to sell, and it is more likely than not that it will not be required to sell before recovery of its cost basis. Under the OTTI guidance, the amount of the OTTI related to a credit loss is recognized in earnings, and the amount of the OTTI related to other, non-credit factors (e.g., interest rates, market conditions, etc.) is recorded as a component of other comprehensive income. In instances where no credit loss exists but the Company intends to sell the security or it is more likely than not that the Company will have to sell the debt security prior to the anticipated recovery, the decline in market value below amortized cost is recognized as an OTTI in earnings. In periods after the recognition of an OTTI on debt securities, the Company accounts for such securities as if they had been purchased on the measurement date of the OTTI at an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in earnings. For debt securities for which OTTI was recognized in earnings, the difference between the new amortized cost basis and the cash flows expected to be collected will be accreted or amortized into net investment income. The following table sets forth the amount of credit loss impairments recognized within the results of operations on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in AOCI, and the corresponding changes in such amounts: Years Ended December 31, 2018 2017 2016 Balance, beginning of year $ 10.7 $ 11.1 $ 13.6 Additions for credit loss impairments recognized in the current period on securities previously impaired — — 0.3 Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security (0.3 ) (0.3 ) (0.5 ) Reductions for credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period — (0.1 ) (2.3 ) Balance, end of year $ 10.4 $ 10.7 $ 11.1 The Company regularly monitors its investment portfolio to ensure investments that may be other-than-temporarily impaired are timely identified, properly valued, and charged against earnings in the proper period. The determination that a security has incurred an other-than-temporary decline in value requires the judgment of management. Assessment factors include, but are not limited to, the length of time and the extent to which the market value has been less than cost, the financial condition and rating of the issuer, whether any collateral is held, the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery and the intent to sell or whether it is more likely than not that the Company will be required to sell its fixed maturity securities. Inherently, there are risks and uncertainties involved in making these judgments. Changes in circumstances and critical assumptions such as a continued weak economy, a more pronounced economic downturn or unforeseen events which affect one or more companies, industry sectors, or countries could result in additional impairments in future periods for other-than-temporary declines in value. The impairment of a fixed maturity security that the Company has the intent to sell or that it is more likely than not that the Company will be required to sell is deemed other-than-temporary and is written down to its market value at the balance sheet date with the amount of the impairment reported as a realized loss in that period. For all other-than-temporarily impaired fixed maturity securities that do not meet either of these two criteria, the Company is required to analyze its ability to recover the amortized cost of the security by calculating the net present value of projected future cash flows. For these other-than-temporarily impaired fixed maturity securities, the net amount recognized in earnings is equal to the difference between the amortized cost of the fixed maturity security and its net present value. The Company considers different factors to determine the amount of projected future cash flows and discounting methods for corporate debt and residential and commercial mortgage-backed or asset-backed securities. For corporate debt securities, the split between the credit and non-credit losses is driven principally by assumptions regarding the amount and timing of projected future cash flows. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the security at the date of acquisition. For residential and commercial mortgage-backed and asset-backed securities, cash flow estimates, including prepayment assumptions, are based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral including default rates, recoveries and changes in value. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security prior to impairment at the balance sheet date. The discounted cash flows become the new amortized cost basis of the fixed maturity security. In periods subsequent to the recognition of an OTTI, the Company generally accretes the discount (or amortizes the reduced premium) into net investment income, up to the non-discounted amount of projected future cash flows, resulting from the reduction in cost basis, based upon the amount and timing of the expected future cash flows over the estimated period of cash flows. The investment category and duration of the Company's gross unrealized losses on fixed maturity securities and equity securities, as applicable, as of December 31, 2018 and 2017 were as follows: December 31, 2018 Less than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturity securities: Asset-backed $ 63.2 $ (1.8 ) $ — $ — $ 63.2 $ (1.8 ) Commercial mortgage-backed $ — $ 3.3 $ (0.2 ) $ 3.3 $ (0.2 ) Residential mortgage-backed — — 8.2 (0.4 ) 8.2 (0.4 ) U.S. corporate 40.5 (1.5 ) 2.5 (0.4 ) 43.0 (1.9 ) Foreign corporate 5.7 (0.3 ) — — 5.7 (0.3 ) Total fixed maturity securities $ 109.4 $ (3.6 ) $ 14.0 $ (1.0 ) $ 123.4 $ (4.6 ) December 31, 2017 Less than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturity securities: Commercial mortgage-backed $ — $ — $ 3.3 $ (0.2 ) $ 3.3 $ (0.2 ) Residential mortgage-backed 9.5 (0.4 ) — — $ 9.5 (0.4 ) U.S. corporate — — 1.5 (0.1 ) $ 1.5 (0.1 ) Total fixed maturity securities $ 9.5 $ (0.4 ) $ 4.8 $ (0.3 ) $ 14.3 $ (0.7 ) Equity securities: Non-redeemable preferred stocks $ 2.5 $ (0.1 ) $ — $ — $ 2.5 $ (0.1 ) Total gross unrealized losses represent approximately 3% of the aggregate fair value of the related securities at December 31, 2018 and 2017. Approximately 79% and 69% of these gross unrealized losses have been in a continuous loss position for less than twelve months as of December 31, 2018 and 2017, respectively. The total gross unrealized losses are comprised of 81 and 25 individual securities at December 31, 2018 and 2017, respectively. In accordance with its policy described above, the Company concluded that for these securities, other-than-temporary impairments of the gross unrealized losses was not warranted at December 31, 2018 and 2017. These conclusions were based on a detailed analysis of the underlying credit and expected cash flows of each security. As of December 31, 2018, the Company did not intend to sell these fixed maturity securities and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of their amortized cost basis. The gross unrealized losses are primarily attributable to widening credit spreads associated with an underlying shift in overall credit risk premium. The cost or amortized cost and fair value of available-for-sale fixed maturity securities in an unrealized loss position at December 31, 2018, by contractual maturity, is shown below: Cost or Amortized Cost Fair Value Due in one year or less 0.8 0.8 Due after one year through five years 1.4 1.3 Due after five years through ten years 9.1 8.9 Due after ten years 39.6 37.7 Total 50.9 48.7 Asset-backed 65.0 63.2 Commercial mortgage-backed 3.5 3.3 Residential mortgage-backed 8.6 8.2 Total $ 128.0 $ 123.4 The Company has entered into commercial mortgage loans, collateralized by the underlying real estate, on properties located throughout the United States. As of December 31, 2018, approximately 45% of the outstanding principal balance of commercial mortgage loans was concentrated in the states of California, Alabama and Utah. Although the Company has a diversified loan portfolio, an economic downturn could have an adverse impact on the ability of its debtors to repay their loans. The outstanding balance of commercial mortgage loans range in size from $0.1 million to $8.2 million as of December 31, 2018 and from $0.1 million to $8.4 million as of December 31, 2017. Credit quality indicators for commercial mortgage loans are loan-to-value and debt-service coverage ratios. Loan-to-value and debt-service coverage ratios are measures commonly used to assess the credit quality of commercial mortgage loans. The loan-to-value ratio compares the principal amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. The debt-service coverage ratio compares a property's net operating income to its debt-service payments and is commonly expressed as a ratio. The loan-to-value and debt-service coverage ratios are generally updated annually in the third quarter. The following summarizes the carrying value and average debt-service coverage ratio for the Company’s mortgage loans that had loan-to-value ratios falling within the stated ranges as of the dates indicated: December 31, 2018 Loan-to-Value Carrying Value % of Gross Mortgage Loans Debt- Service Coverage Ratio 70% and less $ 54.6 100.0 % 1.96 December 31, 2017 Loan-to-Value Carrying Value % of Gross Mortgage Loans Debt- Service Coverage Ratio 70% and less $ 79.1 100.0 % 2.11 Less valuation allowance (0.4 ) Net commercial mortgage loans on real estate $ 78.7 All commercial mortgage loans that are individually impaired have an established mortgage loan valuation allowance for losses. An additional valuation allowance is established for incurred, but not specifically identified impairments. Changing economic conditions affect the Company’s valuation of commercial mortgage loans. Changing vacancies and rents are incorporated into the discounted cash flow analysis that the Company performs for monitored loans and may contribute to the establishment of (or an increase or decrease in) a commercial mortgage loan valuation allowance for losses. In addition, the Company monitors the entire commercial mortgage loan portfolio to identify risk. Areas of emphasis are properties that have deteriorating credits or have experienced a reduction in debt-service coverage ratio. In 2018, the loan valuation allowance was decreased by $0.4 million based upon the valuation allowance analysis. The Company had fixed maturity securities of $6.8 million and $6.2 million as of December 31, 2018 and 2017, respectively, on deposit with various governmental authorities as required by law. Variable Interest Entities A VIE is a legal entity which does not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest. The Company's investments in VIEs include real estate joint ventures and other limited partnerships. These investments are generally accounted for under the equity method and included in the balance sheets in other investments. The Company's maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company's balance sheet . As of December 31, 2018, the Company’s maximum exposure to loss is $26.0 million in recorded carrying value. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | FAIR VALUE DISCLOSURES Fair Values, Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures The fair value measurements and disclosures guidance defines fair value and establishes a framework for measuring fair value. Fair value is defined as 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. In accordance with this guidance, the Company has categorized its recurring basis financial assets and liabilities into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and takes into account factors specific to the asset or liability. The levels of the fair value hierarchy are described below: • Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access. • Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset, either directly or indirectly, for substantially the full term of the asset. Level 2 inputs include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active and inputs other than quoted prices that are observable in the marketplace for the asset. The observable inputs are used in valuation models to calculate the fair value for the asset. • Level 3 inputs are unobservable but are significant to the fair value measurement for the asset, and include situations where there is little, if any, market activity for the asset. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset. The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017. The amounts presented below for Other investments, Cash equivalents, Other assets and Assets and Liabilities held in separate accounts differ from the amounts presented in the balance sheets because only certain investments, or certain assets and liabilities within these line items are measured at estimated fair value. The fair value amount and the majority of the associated levels presented for Assets and Liabilities held in separate accounts are received directly from third parties. December 31, 2018 Total Level 1 Level 2 Level 3 Financial Assets Fixed maturity securities: U.S. government and government agencies and authorities $ 10.9 $ — $ 10.9 $ — State, municipalities and political subdivisions 13.9 — 13.9 — Foreign governments 9.6 — 9.6 — Asset-backed 78.7 — 78.7 — Commercial mortgage-backed 3.3 — — 3.3 Residential mortgage-backed 38.2 — 38.2 — U.S. corporate 587.0 — 587.0 — Foreign corporate 142.3 — 134.1 8.2 Equity securities: Common stocks 0.4 0.4 — — Non-redeemable preferred stocks 80.9 — 79.8 1.1 Other investments 18.1 18.1 (1) — — Cash equivalents 3.1 3.1 Other assets 0.1 — — 0.1 Assets held in separate accounts 1,444.8 1,370.9 (2) 73.9 (3) — Total financial assets $ 2,431.3 $ 1,392.5 $ 1,026.1 $ 12.7 Financial Liabilities Liabilities related to separate accounts $ 1,444.8 $ 1,370.9 (2) $ 73.9 (3) $ — December 31, 2017 Total Level 1 Level 2 Level 3 Financial Assets Fixed maturity securities: U.S. government and government agencies and authorities $ 3.2 $ — $ 3.2 $ — State, municipalities and political subdivisions 5.6 — 5.6 — Foreign governments 10.5 — 10.5 — Asset-backed 29.0 — 24.3 4.7 Commercial mortgage-backed 3.3 — — 3.3 Residential mortgage-backed 41.7 — 41.7 — U.S. corporate 742.1 — 741.9 0.2 Foreign corporate 157.9 — 148.6 9.3 Equity securities: Common stocks 0.6 0.6 — — Non-redeemable preferred stocks 85.8 — 84.7 1.1 Other investments 6.4 6.4 (1) — — Other assets 0.2 — — 0.2 Assets held in separate accounts 1,644.3 1,600.8 (2) 43.5 (3) — Total financial assets $ 2,730.6 $ 1,607.8 $ 1,104.0 $ 18.8 Financial Liabilities Liabilities related to separate accounts $ 1,644.3 $ 1,600.8 (2) $ 43.5 (3) $ — (1) Primarily includes money market funds. (2) Primarily includes mutual funds. (3) Primarily includes fixed maturity securities. There were no transfers between Level 1 and Level 2 financial assets during the years ended December 31, 2018 or 2017. However, there were transfers between Level 2 and Level 3 financial assets during the years ended December 31, 2018 and 2017, which are reflected in the “Transfers in” and “Transfers out” columns below. Transfers between Level 2 and Level 3 most commonly occur from changes in the availability of observable market information and re-evaluation of the observability of pricing inputs. Any remaining unpriced securities are submitted to independent brokers who provide non-binding broker quotes or are priced by other qualified sources. The following tables summarize the change in balance sheet carrying value associated with Level 3 financial assets carried at fair value during the years ended December 31, 2018 and 2017: Year Ended December 31, 2018 Balance, beginning of period Total gains (losses) (realized/ unrealized) included in earnings (1) Net unrealized (losses) gains included in other comprehensive income (2) Purchases Sales Transfers in (3) Transfers out (3) Balance, end of period Fixed maturity securities: Asset-backed $ 4.7 $ — $ — $ 23.9 $ (3.0 ) $ — $ (25.6 ) — Commercial mortgage-backed 3.3 0.1 (0.1 ) — — — — 3.3 U.S. corporate 0.2 — — 0.7 (0.8 ) 0.1 (0.2 ) — Foreign corporate 9.3 (0.1 ) (0.4 ) — (0.6 ) — — 8.2 Equity securities: Non-redeemable preferred stocks 1.1 — — — — — — 1.1 Other assets 0.2 (0.1 ) — — — — — 0.1 Total level 3 assets $ 18.8 $ (0.1 ) $ (0.5 ) $ 24.6 $ (4.4 ) $ 0.1 $ (25.8 ) $ 12.7 Year Ended December 31, 2017 Balance, beginning of period Total gains (losses) (realized/ unrealized) included in earnings (1) Net unrealized losses included in other comprehensive income (2) Purchases Sales Transfers in (3) Transfers out (3) Balance, end of period Fixed maturity securities: Asset-backed $ — $ 0.1 $ (0.1 ) $ 29.0 $ (7.4 ) $ — $ (16.9 ) 4.7 Commercial mortgage-backed 3.2 0.1 — — — — — 3.3 U.S. corporate 3.6 — 0.3 — (0.6 ) 0.3 (3.4 ) 0.2 Foreign corporate 10.0 — (0.1 ) — (0.6 ) — — 9.3 Equity securities: Non-redeemable preferred stocks 1.1 — — — — — — 1.1 Other assets 0.3 (0.1 ) — — — — — 0.2 Total level 3 assets $ 18.2 $ 0.1 $ 0.1 $ 29.0 $ (8.6 ) $ 0.3 $ (20.3 ) $ 18.8 (1) Included as part of net realized gains on investments, excluding other-than-temporary impairment losses, in the statement of operations. (2) Included as part of change in unrealized gains on securities in the statement of comprehensive income. (3) Transfers are primarily attributable to changes in the availability of observable market information and re-evaluation of the observability of valuation inputs. Three different valuation techniques can be used in determining fair value for financial assets and liabilities: the market, income or cost approaches. The three valuation techniques described in the fair value measurements and disclosures guidance are consistent with generally accepted valuation methodologies. The market approach valuation techniques use prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. When possible, quoted prices (unadjusted) in active markets are used as of the period-end date (such as for mutual funds and money market funds). Otherwise, the Company uses valuation techniques consistent with the market approach including matrix pricing and comparables. Matrix pricing is a mathematical technique employed principally to value debt securities without relying exclusively on quoted prices for those securities but, rather, by relying on the securities’ relationship to other benchmark quoted securities. Market approach valuation techniques often use market multiples derived from a set of comparables. Multiples might lie in ranges with a different multiple for each comparable. The selection of where within the range the appropriate multiple falls requires judgment, considering both qualitative and quantitative factors specific to the measurement. Income approach valuation techniques convert future amounts, such as cash flows or earnings, to a single present amount, or a discounted amount. These techniques rely on current market expectations of future amounts as of the period-end date. Examples of income approach valuation techniques include present value techniques, option-pricing models, binomial or lattice models that incorporate present value techniques and the multi-period excess earnings method. Cost approach valuation techniques are based upon the amount that would be required to replace the service capacity of an asset at the period-end date, or the current replacement cost. That is, from the perspective of a market participant (seller), the price that would be received for the asset is determined based on the cost to a market participant (buyer) to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence. While not all three approaches are applicable to all financial assets or liabilities, where appropriate, the Company may use one or more valuation techniques. For all the classes of financial assets and liabilities included in the above hierarchy, excluding derivatives and certain privately placed corporate bonds, the Company generally uses the market valuation technique. For certain privately placed corporate bonds and derivatives, the Company generally uses the income valuation technique. For the years ended December 31, 2018 and 2017, the application of the valuation technique applied to the Company’s classes of financial assets and liabilities has been consistent. Level 1 Securities The Company’s investments and liabilities classified as Level 1 as of December 31, 2018 and 2017, consisted of mutual funds and related obligations, money market funds and common stocks that are publicly listed and/or actively traded in an established market. Level 2 Securities The Company values Level 2 securities using various observable market inputs obtained from a pricing service. The pricing service prepares estimates of fair value measurements for the Company’s Level 2 securities using proprietary valuation models based on techniques such as matrix pricing which include observable market inputs. The fair value measurements and disclosures guidance defines observable market inputs as the assumptions market participants would use in pricing the asset or liability developed on market data obtained from sources independent of the Company. The extent of the use of each observable market input for a security depends on the type of security and the market conditions at the balance sheet date. Depending on the security, the priority of the use of observable market inputs may change as some observable market inputs may not be relevant or additional inputs may be necessary. The Company uses the following observable market inputs (“standard inputs”), listed in the approximate order of priority, in the pricing evaluation of Level 2 securities: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research data. Further details for Level 2 investment types follow: U.S. government and government agencies and authorities: U.S. government and government agencies and authorities securities are priced by the Company’s pricing service utilizing standard inputs. Included in this category are U.S. Treasury securities which are priced using vendor trading platform data in addition to the standard inputs. State, municipalities and political subdivisions: State, municipalities and political subdivisions securities are priced by the Company’s pricing service using material event notices and new issue data inputs in addition to the standard inputs. Foreign governments: Foreign government securities are priced by the Company’s pricing service utilizing standard inputs. The pricing service also evaluates each security based on relevant market information including relevant credit information, perceived market movements and sector news. Residential mortgage-backed and asset-backed: Residential mortgage-backed and asset-backed securities are priced by the Company’s pricing service using monthly payment information and collateral performance information in addition to the standard inputs. Additionally, asset-backed securities utilize new issue data while residential mortgage-backed securities utilize vendor trading platform data. U.S. and foreign corporate: Corporate securities are priced by the Company’s pricing service using standard inputs. Non-investment grade securities within this category are priced by the Company’s pricing service using observations of equity and credit default swap curves related to the issuer in addition to the standard inputs. Certain privately placed corporate bonds are priced by a non-pricing service source using a model with observable inputs including, but not limited to, the credit rating, credit spreads, sector add-ons, and issuer specific add-ons. Non-redeemable preferred stocks: Non-redeemable preferred stocks are priced by the Company’s pricing service using observations of equity and credit default swap curves related to the issuer in addition to the standard inputs. Assets/liabilities held in separate accounts: To price the fixed maturity securities and related obligations in these categories, the pricing service utilizes the standard inputs. Valuation models used by the pricing service can change period to period, depending on the appropriate observable inputs that are available at the balance sheet date to price a security. When market observable inputs are unavailable to the pricing service, the remaining unpriced securities are submitted to independent brokers who provide non-binding broker quotes or are priced by other qualified sources. If the Company cannot corroborate the non-binding broker quotes with Level 2 inputs, these securities are categorized as Level 3 securities. Level 3 Securities The Company’s investments classified as Level 3 as of December 31, 2018 and 2017, consisted of fixed maturity and equity securities. Fixed maturity securities and equity securities: All of the Level 3 fixed maturity and equity securities are priced using non-binding broker quotes which cannot be corroborated with Level 2 inputs. As of December 31, 2018, no securities were priced by a pricing service using single broker quotes. As of December 31, 2017, the Company's total Level 3 fixed maturity and equity securities, $ 0.2 million were priced by a pricing service using single broker quote due to insufficient information to provide an evaluated price. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The remaining $12.6 million and $ 18.4 million were priced internally using independent and non-binding broker quotes as of December 31, 2018 and 2017, respectively. The inputs factoring into the broker quotes include trades in the actual bond being priced, trades of comparable bonds, quality of the issuer, optionality, structure and liquidity. Significant changes in interest rates, issuer credit, liquidity, and overall market conditions would result in a significantly lower or higher broker quote. The prices received from both the pricing service and internally are reviewed for reasonableness by management and if necessary, management works with the pricing service or broker to further understand how they developed their price. Other assets: A non-pricing service source prices the derivatives using a model with inputs including, but not limited to, the time to expiration, the notional amount, the strike price, the forward rate, implied volatility and the discount rate. M anagement evaluates the following factors in order to determine whether the market for a financial asset is inactive. The factors include, but are not limited to: • whether t here are few recent transactions, • whether l ittle information is released publicly, • whether t he available prices vary significantly over time or among market participants, • whether t he prices are stale (i.e., not current), and • t he magnitude of the bid-ask spread. Illiquidity did not have a material impact in the fair value determination of the Company's financial assets as of December 31, 2018 or 2017. T he Company generally obtains one price for each financial asset. The Company performs a monthly analysis to assess if the evaluated prices represent a reasonable estimate of their fair value. This process involves quantitative and qualitative analysis and is overseen by investment and accounting professionals. Examples of procedures performed include, but are not limited to, initial and on-going review of pricing service methodologies, review of the prices received from the pricing service, review of pricing statistics and trends, and comparison of prices for certain securities with two different appropriate price sources for reasonableness. Following this analysis, the Company generally uses the best estimate of fair value based upon all available inputs. On infrequent occasions, a non-pricing service source may be more familiar with the market activity for a particular security than the pricing service. In these cases the price used is taken from the non-pricing service source. The pricing service provides information to indicate which securities were priced using market observable inputs so that the Company can properly categorize the Company’s financial assets in the fair value hierarchy. Fair Value of Financial Instruments Disclosures The financial instruments guidance requires disclosure of fair value information about financial instruments, for which it is practicable to estimate such fair value. Therefore, it requires fair value disclosure for financial instruments that are not recognized or are not carried at fair value in the balance sheets. However, this guidance excludes certain financial instruments, including those related to insurance contracts and those accounted for under the equity method ( such as partnerships). For the financial instruments included within the following financial assets and financial liabilities, the carrying value in the balance sheets equals or approximates fair value. Please refer to the Fair Value Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures section above for more information on the financial instruments included within the following financial assets and financial liabilities and the methods and assumptions used to estimate fair value: • Cash and cash equivalents; • Fixed maturity securities; • Equity securities; • Short-term investments; • Other investments; • Other assets; • Assets held in separate accounts; and • Liabilities related to separate accounts. In estimating the fair value of the financial instruments that are not recognized or are not carried at fair value in the balance sheets, the Company used the following methods and assumptions: Commercial mortgage loans on real estate : the fair values of commercial mortgage loans on real estate are estimated using discounted cash flow models. The model inputs include mortgage amortization schedules and loan provisions, an internally developed credit spread based on the credit risk associated with the borrower and the U.S. Treasury spot curve. Mortgage loans with similar characteristics are aggregated for purposes of the calculations. Policy loans: the carrying value of policy loans reported in the balance sheets approximates fair value. Policy reserves under investment products : the fair values for the Company’s policy reserves under investment products are determined using discounted cash flow analysis. Key inputs to the valuation include projections of policy cash flows, reserve run-off, market yields and risk margins. The following tables disclose the carrying value, fair value amount and hierarchy level of the financial instruments that are not recognized or are not carried at fair value in the balance sheets: December 31, 2018 Fair Value Carrying Value Total Level 1 Level 2 Level 3 Financial assets: Commercial mortgage loans on real estate $ 54.6 $ 55.5 $ — $ — $ 55.5 Policy loans 6.0 6.0 6.0 — — Other investments 0.2 0.2 — — 0.2 Total financial assets $ 60.8 $ 61.7 $ 6.0 $ — $ 55.7 Financial liabilities: Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1) $ 203.5 $ 209.1 $ — $ — $ 209.1 December 31, 2017 Fair Value Carrying Value Total Level 1 Level 2 Level 3 Financial assets: Commercial mortgage loans on real estate $ 78.7 $ 82.7 $ — $ — $ 82.7 Policy loans 6.7 6.7 6.7 — — Other investments 0.2 0.2 — — 0.2 Total financial assets $ 85.6 $ 89.6 $ 6.7 $ — $ 82.9 Financial liabilities: Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1) $ 210.5 $ 227.5 $ — $ — $ 227.5 (1) Only the fair value of the Company's policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in the table above. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company is subject to U.S. tax and files a U.S. consolidated federal income tax return with its Parent. All of the Company’s income comes from domestic sources. The components of income tax expense (benefit) were as follows for the periods indicated: Year Ended December 31, 2018 2017 2016 Current expense (benefit) $ 9.5 $ (3.3 ) $ 271.4 Deferred expense (benefit) 7.2 49.5 (65.2 ) Total income tax expense $ 16.7 $ 46.2 $ 206.2 A reconciliation of the federal income tax rate to the Company's effective income tax rate follows for the periods indicated: December 31, 2018 2017 2016 Federal income tax rate: 21.0 % 35.0 % 35.0 % Reconciling items: Dividends-received deduction (0.8 )% (1.2 )% (0.3 )% TCJA impacts (1) 0.5 % 3.6 % — % Capital contribution from affiliated entity impacting taxable income — % — % 3.7 % Goodwill — % — % 1.2 % Nondeductible health insurer fee — % — % 0.5 % Change in liability for prior years' taxes — % (0.5 )% — % Other (0.3 )% 0.1 % (0.1 )% Effective income tax rate 20.4 % 37.0 % 40.0 % (1) In connection with Tax Cuts and Jobs Act (TCJA), the Company recorded a provisional discrete net tax expense of $4.5 million for the federal rate reduction in the period ending December 31, 2017 related to the re-valuation of its net deferred tax assets. During the year ended December 31, 2018, the Company finalized the provisional adjustment. The Company's unrecognized tax benefits as of December 31, 2018 are $2.4 million and for each of the years ended December 31, 2017 and 2016 were less than $1.0 million . The Company does not anticipate any significant increase in the unrecognized tax benefit within the next 12 months. The Company files income tax returns in the U.S. and various state jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2015. Substantially all state and local income tax matters have been concluded for the years through 2009. The tax effects of temporary differences that result in deferred tax assets and deferred tax liabilities are as follows as of the dates indicated: December 31, 2018 2017 Deferred tax assets: Deferred gain on disposal of businesses $ 10.8 $ 22.0 Deferred acquisition costs 14.2 13.3 Investments, net 5.0 5.7 Policyholder and separate account reserves 8.9 7.1 Employee benefits 2.8 2.8 Total deferred tax assets (1) 41.7 50.9 Deferred tax liabilities: Net unrealized gains on securities (24.1 ) (42.6 ) Other (0.8 ) (1.4 ) Total deferred tax liabilities (1) (24.9 ) (44.0 ) Net deferred income tax assets $ 16.8 $ 6.9 (1) 2017 reflects the reduction of deferred tax assets and liabilities following the enactment of TCJA. The calculation of the valuation allowance is made at the consolidated return group level. No cumulative valuation allowance has been recorded because it is management's assessment that it is more likely than not that the gross deferred tax assets in the table above will be realized. The Company’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income of the same character within the carryback or carryforward periods. In assessing future taxable income, the Company has considered all sources of taxable income available to realize its deferred tax asset, including the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in carryback years and tax-planning strategies. If changes occur in the assumptions underlying the Company’s tax planning strategies or in the scheduling of the reversal of the Company’s deferred tax liabilities, a valuation allowance may need to be recorded in the future. At December 31, 2018, the Company had no net operating loss or capital loss for U.S. federal income tax purposes. The company has $0.1 million of tax credit carryforwards for U.S. federal income tax purposes. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholder's Equity | STOCKHOLDER'S EQUITY The Board of Directors of the Company has authorized 1,000,000 shares of common stock with a par value of $5 per share. All shares are issued and outstanding as of December 31, 2018 and 2017 and are owned by the Parent (see Note 1 to the Financial Statements). The Company paid dividends of $15.0 million, $61.0 million and $890.0 million during the years ended December 31, 2018, 2017 and 2016, respectively. The dividends in 2018 were paid in cash. The dividends paid in 2017 consisted of cash of $ 1.9 million and investments of $ 59.1 million . The dividends paid in 2016 consisted of cash of $ 379.4 million and investments of $510.6 million . The Company received a capital contribution from an affiliated entity of $54.3 million related to the sale of Assurant Employee Benefits during the year ended December 31, 2016. As described in Note 7, the Company, under state regulatory requirements, is not able to pay any dividends in 2019 without permission from Kansas regulators. |
Statutory Information
Statutory Information | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Statutory Information | STATUTORY INFORMATION The Company prepares an Annual Statement on the basis of statutory accounting principles (“SAP”) prescribed or permitted by the Kansas Insurance Department. Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (“NAIC”) as well as state laws, regulations and administrative rules. The principal differences between SAP and GAAP are: 1) policy acquisition costs are expensed as incurred under SAP, but are deferred and amortized under GAAP; 2) the value of business acquired is not capitalized under SAP but is under GAAP; 3) amounts collected from holders of universal life-type and annuity products are recognized as premiums when collected under SAP, but are initially recorded as contract deposits under GAAP, with cost of insurance recognized as revenue when assessed and other contract charges recognized over the periods for which services are provided; 4) the classification and carrying amounts of investments in certain securities are different under SAP than under GAAP; 5) the criteria for providing asset valuation allowances, and the methodologies used to determine the amounts thereof, are different under SAP than under GAAP; 6) the timing of establishing certain reserves, and the methodologies used to determine the amounts thereof, are different under SAP than under GAAP; 7) certain assets are not admitted for purposes of determining surplus under SAP; 8) methodologies used to determine the amounts of deferred taxes and goodwill are different under SAP than under GAAP; 9) the criteria for obtaining reinsurance accounting treatment, as well as presentation of insurance, is different under SAP than under GAAP; and 10) deferred gains on the sale of reinsurance are recognized as surplus under SAP and as a liability under GAAP. The Company's statutory net income and capital and surplus are as follows: Years Ended and at December 31, 2018 2017 2016 Statutory net income $ 90.0 $ 106.2 $ 481.7 Statutory capital and surplus $ 126.3 $ 113.9 $ 158.5 Dividend distributions to the Parent are restricted as to the amount by state regulatory requirements. All dividends paid in 2018, 2017, and 2016 were considered to represent extraordinary dividends. A dividend is considered extraordinary when combined with all other dividends and distributions made within the preceding 12 months exceeds the greater of 10% of the insurer's surplus as regards to policyholders on December 31 of the next preceding year, or the net gain from operations. Dividends may only be paid out of earned surplus. Future regulatory actions may restrict the ability of the Company to pay dividends. State regulators require insurance companies to meet minimum capitalization standards designed to ensure that they can fulfill obligations to policyholders. Minimum capital requirements are expressed as a ratio of a company’s total adjusted capital (“TAC”) to its risk-based capital (“RBC”) (the “RBC Ratio”). TAC is equal to statutory surplus adjusted to exclude certain statutory liabilities. RBC is calculated by applying specified factors to various asset, premium, expense, liability, and reserve items. Generally, if a company's RBC Ratio is below 100% (the "Authorized Control Level"), the insurance commissioner of the company's state of domicile is authorized to take control of the company, to protect the interests of policyholders. If the RBC Ratio is greater than 100% , but less than 200% (the "Company Action Level"), the company must submit a RBC plan to the commissioner of the state of domicile. Corrective actions may also be required if the RBC Ratio is greater than the Company Action Level but the company fails certain trend tests. As of December 31, 2018, the TAC of the Company exceeded the Company Action Level and no trend tests that would require regulatory action were violated. As of December 31, 2018, the TAC of the Company subject to RBC requirements was $136.3 million and the corresponding Authorized Control Level was $23.7 million. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | REINSURANCE In the ordinary course of business, the Company is involved in both the assumption and cession of reinsurance with non-affiliated companies. The following table provides details of the reinsurance recoverables balance as of the dates indicated: 2018 2017 Ceded future policyholder benefits and expenses $ 2,103.2 $ 2,130.0 Ceded unearned premium 24.4 27.1 Ceded claims and benefits payable 1,179.2 1,254.7 Ceded paid losses 16.4 12.7 Total $ 3,323.2 $ 3,424.5 A key credit quality indicator for reinsurance is the A.M. Best Company ("A.M. Best") financial strength ratings of the reinsurer. A.M. Best financial strength ratings are an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The A.M. Best ratings for new reinsurance agreements where there is material credit exposure are reviewed at the time of execution. The A.M. Best ratings for existing reinsurance agreements are reviewed on a quarterly basis, or sooner based on developments. The following table provides the reinsurance recoverable as of December 31, 2018 grouped by A.M. Best financial strength ratings: A. M. Best ratings of reinsurer Ceded future policyholder benefits and expense Ceded unearned premiums Ceded claims and benefits payable Ceded paid losses Total A++ or A+ $ 1,533.0 $ 24.1 $ 1,158.9 $ 16.1 $ 2,732.1 A or A– 65.8 0.2 1.2 — 67.2 B++ or B+ 504.0 0.1 19.1 0.3 523.5 Not rated 0.4 — — — 0.4 Total Reinsurance recoverable $ 2,103.2 $ 24.4 $ 1,179.2 $ 16.4 $ 3,323.2 The Company has used reinsurance to exit certain businesses, including the Assurant Employee Benefits business and blocks of individual life, annuity, and long-term care business. The reinsurance recoverables relating to these dispositions amounted to $3.25 billion as of December 31, 2018. The three reinsurers with the largest reinsurance recoverable balances relating to these dispositions were John Hancock, Sun Life and Talcott Resolution (formerly owned by The Hartford). The A.M. Best financial strength ratings of these three insurers were A+, A+ and B++, respectively. A.M. Best currently maintains a stable outlook on the financial strength ratings of John Hancock, Sun Life and Talcott Resolution. Most of the assets backing reserves relating to reinsurance recoverables from these three reinsurers are held in trust. If these reinsurers became insolvent, the Company would be exposed to the risk that the assets in the trusts and/or the separate accounts would be insufficient to support the liabilities that would revert back to the Company. The following table presents the reinsurance recoverable from John Hancock, Sun Life, Talcott Resolution and other reinsurers as of December 31, 2018 and 2017. Reinsurer December 31, 2018 December 31, 2017 John Hancock $ 1,992.7 $ 1,952.7 Sun Life 737.6 851.9 Talcott Resolution 523.5 549.6 Other reinsurers 69.4 70.3 Total $ 3,323.2 $ 3,424.5 The largest risk is with John Hancock. As of December 31, 2018 there is $2.00 billion held in trust to support the coinsurance arrangement. If the value of the assets in this trust falls below the value of the associated statutory liabilities, John Hancock will be required to put more assets in the trust. If necessary, an allowance for doubtful accounts related to reinsurance recoverables is recorded on the basis of periodic evaluations of balances due from reinsurers (net of collateral), reinsurer solvency, management's experience and current economic conditions. As of December 31, 2018, the Company does not have an allowance for doubtful accounts balance for these reinsurance recoverables. The effect of reinsurance on premiums earned and benefits incurred was as follows for the period indicated: Years Ended December 31, 2018 2017 2016 Long Duration Short Duration Total Long Duration Short Duration Total Long Duration Short Duration Total Direct earned premiums $ 182.2 $ 568.2 $ 750.4 $ 198.0 $ 756.9 $ 954.9 $ 213.7 $ 808.0 $ 1,021.7 Premiums assumed 3.2 1.4 4.6 3.6 0.7 4.3 4.6 54.2 58.8 Premiums ceded (180.6 ) (569.6 ) (750.2 ) (196.1 ) (757.6 ) (953.7 ) (200.6 ) (699.6 ) (900.2 ) Net earned premiums $ 4.8 $ — $ 4.8 $ 5.5 $ — $ 5.5 $ 17.7 $ 162.6 $ 180.3 Direct policyholder benefits $ 399.6 $ 363.7 $ 763.3 $ 413.6 $ 439.5 $ 853.1 $ 695.8 $ 546.9 $ 1,242.7 Policyholder benefits assumed 14.4 — 14.4 13.4 — 13.4 15.5 25.6 41.1 Policyholder benefits ceded (350.9 ) (363.7 ) (714.6 ) (372.3 ) (435.6 ) (807.9 ) (672.2 ) (458.9 ) (1,131.1 ) Net policyholder benefits $ 63.1 $ — $ 63.1 $ 54.7 $ 3.9 $ 58.6 $ 39.1 $ 113.6 $ 152.7 The Company had $392.9 million and $423.7 million , respectively, of invested assets held in trusts or by custodians as of December 31, 2018 and 2017, respectively, for the benefit of others related to certain reinsurance arrangements. The Company utilizes ceded reinsurance for loss protection and capital management, business dispositions, client risk and profit sharing. Business Divestitures As referenced in Note 1, the Company has used reinsurance to sell certain businesses, such as for the disposals of Assurant Employee Benefits, Fortis Financial Group and Long-Term Care. The reinsurance agreement associated with the Fortis Financial Group sale also stipulates that Talcott Resolution contributes funds to increase the value of the separate account assets relating to annuity business sold if such value declines below the value of the associated liabilities. If Talcott Resolution fails to fulfill these obligations, the Company will be obligated to make these payments. In addition, the Company would be responsible for administering this business in the event of reinsurer insolvency. The Company does not currently have the administrative systems and capabilities to process this business. Accordingly, the Company would need to obtain those capabilities in the event of an insolvency of one or more of the reinsurers of these businesses. The Company might be forced to obtain such capabilities on unfavorable terms with a resulting material adverse effect on our results of operations and financial condition. As of December 31, 2018, the Company was not aware of any regulatory actions taken with respect to the solvency of the insurance subsidiaries of John Hancock, Sun Life or Talcott Resolution that reinsure the Assurant Employee Benefits, Fortis Financial Group and Long-Term Care businesses, and the Company has not been obligated to fulfill any of such reinsurers’ obligations. John Hancock, Sun Life and Talcott Resolution have paid their obligations when due and there have been no disputes. |
Reserves
Reserves | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Reserves | RESERVES Short Duration Contracts The Company's short duration contracts are mainly comprised of disposed and run-off business. The principal products and services included in these categories are described in the summary of significant accounting policies. See Note 2 for further information. Disposed and Run-off Short Duration Insurance Lines Disposed business includes certain medical policies no longer offered and Assurant Employee Benefits (AEB) policies disposed of via reinsurance. Reserves for previously disposed business are included in the Company’s reserves in accordance with the insurance guidelines. The Company maintains an offsetting reinsurance recoverable related to the AEB reserves. See Note 8 for further information. Long Duration Contracts The Company's long duration contracts are primarily comprised of preneed life insurance and annuity policies, life insurance policies (no longer offered), and AEB, FFG and LTC disposed businesses. The principal products and services included in these categories are described in the summary of significant accounting policies. See Note 2 for further information. Disposed and Run-off Long Duration Insurance Lines The Company’s universal life and annuity products are no longer offered and are in run-off. Reserves have been established based on the following assumptions. Interest rates credited on annuities were at guaranteed rates, ranging from 3.5% to 4.0% , except for a limited number of policies with guaranteed crediting rates of 4.5% . All annuity policies are past the surrender charge period. Crediting interest rates on universal life fund are at guaranteed rates of 4.0% to 4.1% . Universal life funds are subject to surrender charges that vary by product, age, sex, year of issue, risk class, face amount and grade to zero over a period not longer than 20 years. Reserves for previously disposed AEB, FFG and LTC businesses are included in the Company’s reserves in accordance with the insurance guidance. The Company maintains an offsetting reinsurance recoverable related to these reserves. See Note 8 for further information. Preneed Business Substantially all of the Company's preneed life insurance products are in run-off and no longer offered. Interest and discount rates for preneed life insurance vary by year of issuance and product, and ranged from 4.7% to 7.3% in 2018 and 2017 before provisions for adverse deviation, which ranged from 0.2% to 0.5% in 2018 and 2017. Interest and discount rates for traditional life insurance vary by year of issuance and products and were 7.5% grading to 5.3% over 20 years in 2018 and 2017 with the exception of a block of pre-1980 business which had a level 8.8% discount rate in 2018 and 2017. Mortality assumptions are based upon pricing assumptions and modified to allow for provisions for adverse deviation. Surrender rates vary by product and are based upon pricing assumptions. Future policy benefit increases on preneed life insurance policies ranged from 1.0% to 7.0% in 2018 and 2017. Some policies have future policy benefit increases that are guaranteed or tied to equal some measure of inflation. The inflation assumption for most of these inflation-linked benefits was 3.0% in both 2018 and 2017 with the exception of most policies issued in 2005 through 2007 where the assumption was 2.3% . The reserves for preneed annuities are based on assumed interest rates credited on deferred annuities, which vary by year of issue, and ranged from 1.0% to 5.5% in 2018 and 2017. Withdrawal charges, if any, can range up to 7.0% and grade to zero over a period of seven years. Reserve Roll Forward The following table provides a roll forward of the Company's beginning and ending claims and benefits payable balances. Claims and benefits payable is the liability for unpaid loss and loss adjustment expenses and is comprised of case and IBNR reserves. Since unpaid loss and loss adjustment expenses are estimates, the Company's actual losses incurred may be more or less than the Company's previously developed estimates, which is referred to as either unfavorable or favorable development, respectively. The best estimate of ultimate loss and loss adjustment expense is generally selected from a blend of methods that are applied consistently each period. There have been no significant changes in the methodologies and assumptions utilized in estimating the liability for unpaid loss and loss adjustment expenses for any of the periods presented. Years Ended December 31, 2018 2017 2016 Claims and benefits payable, at beginning of year $ 1,266.1 $ 1,412.9 $ 1,719.9 Less: Reinsurance ceded and other (1,255.1 ) (1,401.8 ) (384.3 ) Net claims and benefits payable, at beginning of year 11.0 11.1 1,335.6 Incurred losses and loss adjustment expenses related to: Current year 63.4 32.0 181.6 Prior year's interest — — 9.4 Prior years — (0.1 ) (40.4 ) Total incurred losses and loss adjustment expenses 63.4 31.9 150.6 Paid losses and loss adjustment expenses related to: Current year 56.6 29.0 177.2 Prior years 6.5 3.0 1,297.9 Total paid losses and loss adjustment expenses 63.1 32.0 1,475.1 Net claims and benefits payable, at end of year 11.3 11.0 11.1 Plus: Reinsurance ceded and other 1,179.2 1,255.1 1,401.8 Claims and benefits payable, at end of year $ 1,190.5 $ 1,266.1 $ 1,412.9 The Company experienced net favorable prior year development in each of the years ended December 31, 2017 and 2016. The discontinued Assurant Health and AEB businesses had a substantial contribution to the overall favorable development in 2016. Combined, the favorable development for Assurant Health and AEB was $ 0.1 million and $39.9 million in 2017 and 2016, respectively. For Assurant Health, the favorable development was attributed to lower medical provider utilization and lower medical inflation than assumed in the Company’s prior-year pricing and reserving processes. For AEB, the favorable development was attributed to lower mortality rates and higher claim recovery rates than assumed in the Company’s prior year reserving processes. $35 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME Certain amounts included in the statements of comprehensive income are net of reclassification adjustments. The following tables summarize those reclassification adjustments (net of taxes): Year Ended December 31, 2018 Unrealized gains on securities OTTI Accumulated other comprehensive income Balance at December 31, 2017 $ 119.0 $ 9.2 $ 128.2 Change in other comprehensive income before reclassifications (58.2 ) (2.4 ) (60.6 ) Amounts reclassified from accumulated other comprehensive income (3.9 ) — (3.9 ) Net current-period other comprehensive loss (62.1 ) (2.4 ) (64.5 ) Cumulative effect of change in accounting principles (1) 16.6 2.0 18.6 Balance at December 31, 2018 $ 73.5 $ 8.8 $ 82.3 (1) See Note 2 - Summary of Significant Accounting Policies for additional information. Year Ended December 31, 2017 Unrealized gains on securities OTTI Accumulated other comprehensive income Balance at December 31, 2016 $ 95.1 $ 8.6 $ 103.7 Change in other comprehensive income before reclassifications 27.8 0.6 28.4 Amounts reclassified from accumulated other comprehensive income (3.9 ) — (3.9 ) Net current-period other comprehensive income 23.9 0.6 24.5 Balance at December 31, 2017 $ 119.0 $ 9.2 $ 128.2 Year Ended December 31, 2016 Unrealized gains on securities OTTI Accumulated other comprehensive income Balance at December 31, 2015 $ 174.2 $ 9.3 $ 183.5 Change in other comprehensive income before reclassifications 17.1 (0.3 ) 16.8 Amounts reclassified from accumulated other comprehensive income (96.2 ) (0.4 ) (96.6 ) Net current-period other comprehensive loss (79.1 ) (0.7 ) (79.8 ) Balance at December 31, 2016 $ 95.1 $ 8.6 $ 103.7 The following tables summarize the reclassifications out of accumulated other comprehensive income: Details about accumulated other comprehensive income components Amount reclassified from accumulated other comprehensive income Affected line item in the statement where net income is presented Years Ended December 31, 2018 2017 2016 Unrealized gains on securities $ (4.9 ) $ (6.0 ) $ (148.0 ) Net realized gains on investments, excluding other-than-temporary impairment losses 1.0 2.1 51.8 Provision for income taxes $ (3.9 ) $ (3.9 ) $ (96.2 ) Net of tax OTTI $ — $ — $ (0.6 ) Portion of net (gain) loss recognized in other comprehensive income, before taxes — — 0.2 Provision for income taxes $ — $ — $ (0.4 ) Net of tax Total reclassifications for the period $ (3.9 ) $ (3.9 ) $ (96.6 ) Net of tax |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Company receives various services from the Parent and its affiliates. These services include assistance in benefit plan administration, corporate insurance, accounting, tax, auditing, investment, information technology, actuarial, property management and other administrative functions. The net amounts paid for related services and obligations to the Parent and its affiliates for the years ended December 31, 2018, 2017 and 2016, were $4.9 million, $8.9 million and $23.1 million, respectively. The Parent also pays all income tax payments on behalf of the Company. The income tax payments made by the Parent were $ 4.4 million , $ 3.1 million and $ 272.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. The 2016 tax payments included those attributable to the gains resulting from the AEB sale. Administrative expenses allocated for the Company may be greater or less than the expenses that would be incurred if the Company were operating as a separate company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES In December 2017, our Parent sold our principal office in Kansas City, Missouri. At the time of the sale, the Company's lease was cancelled and the subleases transferred to the buyer. The Company will have no future commitments for rent or any future sublease income. Rent expense was $3.5 million and $4.1 million in 2017 and 2016, respectively. Sub-lease income was $ 4.1 million and $4.1 million in 2017 and 2016, respectively. $ The Company is involved in litigation in the ordinary course of business, both as a defendant and as a plaintiff. The Company may from time to time be subject to a variety of legal and regulatory actions relating to the Company's current and past business operations. Although the Company cannot predict the outcome of any pending or future litigation, examination or investigation, it is possible that the outcome of such matters could have a material adverse effect on the Company's results of operations or cash flows for an individual reporting period. However, based on currently available information, management does not believe that any pending matters are likely to have a material adverse effect, individually or in the aggregate, on the Company's financial condition. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments Other-Than-Investments in Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments Other-Than-Investments in Related Parties | Schedule I — Summary of Investments Other-Than-Investments in Related Parties Cost or Amortized Cost Fair Value Amount at which shown in balance sheet (in millions) Fixed maturity securities: U.S. government and government agencies and authorities $ 10.8 $ 10.9 $ 10.9 States, municipalities and political subdivisions 13.0 13.9 13.9 Foreign governments 8.4 9.6 9.6 Asset-backed 80.4 78.7 78.7 Commercial mortgage-backed 3.5 3.3 3.3 Residential mortgage-backed 37.0 38.2 38.2 U.S. corporate 497.8 587.0 587.0 Foreign corporate 123.1 142.3 142.3 Total fixed maturity securities 774.0 883.9 883.9 Equity securities: Common stocks 0.1 0.4 0.4 Non-redeemable preferred stocks 75.5 80.9 80.9 Total equity securities 75.6 81.3 81.3 Commercial mortgage loans on real estate, at amortized cost 54.6 55.5 54.6 Policy loans 6.0 6.0 6.0 Other investments 45.0 45.0 45.0 Total investments $ 955.2 $ 1,071.7 $ 1,070.8 |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Schedule III - Supplementary Insurance Information | Schedule III — Supplementary Insurance Information Future policy benefits and expenses Unearned premiums Claims and benefits payable Premium revenues Net investment income Benefits claims, losses and settlement expenses Other* operating expenses (in millions) 2018 $ 2,914.1 $ 49.9 $ 1,190.5 $ 4.8 $ 64.6 $ 63.1 $ 9.9 2017 $ 2,992.9 $ 54.5 $ 1,266.1 $ 5.5 $ 64.2 $ 58.6 $ 22.5 2016 $ 3,068.1 $ 28.1 $ 1,412.9 $ 180.3 $ 97.8 $ 152.7 $ 143.8 * Includes amortization of deferred policy acquisition costs, amortization of value of business acquired and underwriting, general and administration expenses and goodwill impairment. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV - Reinsurance | Schedule IV — Reinsurance Direct amount Ceded to other Companies Assumed from other Companies Net amount Percentage of amount assumed to net (in millions) Life Insurance in Force $ 38,709.9 $ 38,055.1 $ 514.2 $ 1,169.0 44.0 % Premiums: Life insurance $ 185.8 $ 184.3 $ 2.9 $ 4.4 65.9 % Accident and health insurance 564.6 565.9 1.7 0.4 425.0 % Total earned premiums $ 750.4 $ 750.2 $ 4.6 $ 4.8 95.8 % Benefits: Life insurance $ 294.6 $ 246.0 $ 13.9 $ 62.5 22.2 % Accident and health insurance 468.7 468.6 0.5 0.6 83.3 % Total policyholder benefits $ 763.3 $ 714.6 $ 14.4 $ 63.1 22.8 % Union Security Insurance Company for the year ended December 31, 2017 Schedule IV — Reinsurance Direct amount Ceded to other Companies Assumed from other Companies Net amount Percentage of amount assumed to net (in millions) Life Insurance in Force $ 59,075.0 $ 58,373.3 $ 549.4 $ 1,251.1 43.9 % Premiums: Life insurance $ 239.4 $ 237.3 $ 3.1 $ 5.2 59.6 % Accident and health insurance 715.5 716.4 1.2 0.3 400.0 % Total earned premiums $ 954.9 $ 953.7 $ 4.3 $ 5.5 78.2 % Benefits: Life insurance $ 345.6 $ 304.3 $ 13.1 $ 54.4 24.1 % Accident and health insurance 507.5 503.6 0.3 4.2 7.1 % Total policyholder benefits $ 853.1 $ 807.9 $ 13.4 $ 58.6 22.9 % Union Security Insurance Company for the year ended December 31, 2016 Schedule IV — Reinsurance Direct amount Ceded to other Companies Assumed from other Companies Net amount Percentage of amount assumed to net (in millions) Life Insurance in Force $ 68,173.9 $ 68,066.3 $ 1,232.5 $ 1,340.1 92.0 % Premiums: Life insurance $ 269.6 $ 234.8 $ 5.9 $ 40.7 14.5 % Accident and health insurance 752.1 665.4 52.9 139.6 37.9 % Total earned premiums $ 1,021.7 $ 900.2 $ 58.8 $ 180.3 32.6 % Benefits: Life insurance $ 379.6 $ 341.0 $ 16.3 $ 54.9 29.7 % Accident and health insurance 863.1 790.1 24.8 97.8 25.4 % Total policyholder benefits $ 1,242.7 $ 1,131.1 $ 41.1 $ 152.7 26.9 % |
Schedule V - Valuation and Qual
Schedule V - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule V-Valuation and Qualifying Accounts | Schedule V — Valuation and Qualifying Accounts Additions Balance at Beginning of Year Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Year (in millions) 2018: Valuation allowance for mortgage loans on real estate $ 0.4 $ (0.4 ) $ — $ — $ — Valuation allowance for uncollectible agents balances — — — — — Valuation allowance for uncollectible accounts — — — — — Valuation allowance for reinsurance recoverables — — — — — Total $ 0.4 $ (0.4 ) $ — $ — $ — 2017: Valuation allowance for mortgage loans on real estate $ 1.7 $ (1.3 ) $ — $ — $ 0.4 Valuation allowance for uncollectible agents balances 4.3 (4.3 ) — — — Valuation allowance for uncollectible accounts 1.0 (1.0 ) — — — Valuation allowance for reinsurance recoverables 0.1 (0.1 ) — — — Total $ 7.1 $ (6.7 ) $ — $ — $ 0.4 2016: Valuation allowance for mortgage loans on real estate $ 1.1 $ 0.6 $ — $ — $ 1.7 Valuation allowance for uncollectible agents balances 4.3 — — — $ 4.3 Valuation allowance for uncollectible accounts — 1.0 — — $ 1.0 Valuation allowance for reinsurance recoverables — 0.1 — — $ 0.1 Total $ 5.4 $ 1.7 $ — $ — $ 7.1 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Amounts are presented in United States of America (“U.S.”) dollars and all amounts are in millions, except for number of shares, per share amounts, number of securities and number of loans. |
Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts. The items affected by the use of estimates include but are not limited to, investments, reinsurance recoverables, other assets, future policy benefits and expenses, unearned premiums, claims and benefits payable, deferred gain on disposal of businesses, and commitments and contingencies. The estimates are sensitive to market conditions, investment yields, mortality, morbidity, commissions and other acquisition expenses, policyholder behavior and other factors. Actual results could differ from the estimates recorded. The Company believes all amounts reported are reasonable and adequate. |
Fair Value | Fair Value The Company uses an exit price for its fair value measurements. An exit price is defined as the amount received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, the Company gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. |
Investments | Investments Fixed maturity securities are classified as available-for-sale as defined in the investments guidance and are reported at fair value. If the fair value is higher than the amortized cost for fixed maturity securities, the excess is an unrealized gain; and, if lower than amortized cost, the difference is an unrealized loss. Net unrealized gains and losses on securities classified as available-for-sale, less deferred income taxes, are included in AOCI. Equity securities that have readily determinable fair values are measured at fair value with changes in fair value recognized in net realized (losses) gains on investments on the Company’s 2018 statement of operations. Prior to the adoption of new accounting guidance effective January 1, 2018, equity securities were measured at fair value, with aggregate changes in fair value recorded through other comprehensive income . Commercial mortgage loans on real estate are reported at unpaid balances, adjusted for amortization of premium or discount, less allowance for losses. The allowance is based on management’s analysis of factors including actual loan loss experience, specific events based on geographical, political or economic conditions, industry experience, loan groupings that have probable and estimable losses and individually impaired loan loss analysis. A loan is considered individually impaired when it becomes probable the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement. Indicative factors of impairment include, but are not limited to, whether the loan is current, the value of the collateral and the financial position of the borrower. If a loan is individually impaired, the Company uses one of the following valuation methods based on the individual loan’s facts and circumstances to measure the impairment amount: (1) the present value of expected future cash flows, (2) the loan's observable market price, or (3) the fair value of collateral. Changes in the allowance for loan losses are recorded in net realized losses on investments, excluding other-than-temporary impairment (“OTTI”) losses. The Company places loans on non-accrual status after 90 days of delinquent payments (unless the loans are both well secured and in the process of collection). A loan may be placed on non-accrual status before this time if information is available that suggests its impairment is probable. Other investments consist primarily of investments in joint ventures, partnerships and short-term investments. The joint ventures and partnerships are valued according to the equity method of accounting. In applying the equity method, the Company uses financial information provided by the investee, generally on a three month lag. Short-term investments include securities and other investments with durations of one year or less, but greater than three months, between the date of purchase and maturity. These amounts are reported at cost or amortized cost, which approximates fair value. Realized gains and losses on sales of investments are recognized on the specific identification basis. Investment income is recorded as earned and reported net of investment expenses. The Company uses the interest method to recognize interest income on its commercial mortgage loans. The Company anticipates prepayments of principal in the calculation of the effective yield for mortgage-backed securities and structured securities. The retrospective method is used to adjust the effective yield for the majority of the Company's mortgage-backed and structured securities. |
Total Other-Than-Temporary Impairment Losses | Total Other-Than-Temporary Impairment Losses For debt securities with credit losses and non-credit losses or gains, total OTTI losses is the total of the decline in fair value from either the most recent OTTI determination or a prior period end in which the fair value declined until the current period end valuation date. This amount does not include any securities that had fair value increases. For debt securities that the Company has either the intent to sell or it is more likely than not that it will be required to sell below amortized cost, total other-than-temporary losses is the amount by which the fair value of the security is less than its amortized cost basis at the period end valuation date and the decline in fair value is deemed to be other-than-temporary. For debt securities determined to have an OTTI, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected represents a credit loss that is recognized in earnings. If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI represents a non-credit loss that is recorded in other comprehensive income. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid securities and other investments with durations of three months or less between the date of purchase and maturity to be cash equivalents. These amounts are carried at cost, which approximates fair value. Cash balances are reviewed at the end of each reporting period to determine if negative cash balances exist. If negative cash balances exist, the cash accounts are netted with other positive cash accounts of the same bank provided the right of offset exists between the accounts. If the right of offset does not exist, the negative cash balances are reclassified to accounts payable and other liabilities. |
Reinsurance | Reinsurance Reinsurance recoverables include amounts related to paid benefits and estimated amounts related to unpaid policy and contract claims, future policyholder benefits and policyholder contract deposits. The cost of reinsurance is recognized as a reduction to premiums earned over the terms of the underlying reinsured policies. Amounts recoverable from reinsurers are estimated in a manner consistent with claim and claim adjustment expense reserves or future policy benefits reserves and are reported in the balance sheets. The cost of reinsurance related to long-duration contracts is recognized over the life of the underlying reinsured policies. The ceding of insurance does not discharge the Company’s primary liability to insureds, thus a credit exposure exists to the extent that any reinsurer is unable to meet the obligation assumed in the reinsurance agreements. To mitigate this exposure to reinsurer insolvencies, the Company evaluates the financial condition of its reinsurers and typically holds collateral (in the form of funds withheld, trusts and letters of credit) as security under the reinsurance agreements. An allowance for doubtful accounts is recorded on the basis of periodic evaluations of balances due from reinsurers (net of collateral), reinsurer solvency, management’s experience and current economic conditions. Reinsurance premiums assumed are calculated based upon payments received from ceding companies together with accrual estimates, which are based on both payments received and in force policy information received from ceding companies. Any subsequent differences arising on such estimates are recorded in the period in which they are determined. |
Other Assets | Other Assets Other assets include prepaid items, deferred acquisition costs, value of business acquired in acquisitions and premiums and accounts receivable, net. |
Separate Accounts | Separate Accounts Assets and liabilities associated with separate accounts relate to premium and annuity considerations for variable life and annuity products for which the contract-holder, rather than the Company, bears the investment risk. Separate account assets (with matching liabilities) are reported at fair value. Revenues and expenses related to the separate account assets and liabilities, to the extent of benefits paid or provided to the separate account policyholders, are excluded from the amounts reported in the accompanying statements of operations because the underlying accounts involve investment-type annuity contracts and/or are subject to reinsurance. |
Reserves | Reserves Reserves are established using generally accepted actuarial methods and reflect judgments about expected future claim payments. Factors used in their calculation include experience derived from historical claim payments and actuarial assumptions. Calculations incorporate assumptions about the incidence of incurred claims, the extent to which all claims have been reported, reporting lags, expenses, inflation rates, future investment earnings, internal claims processing costs and other relevant factors. While the methods of making such estimates and establishing the related liabilities are periodically reviewed and updated, the estimation of reserves includes an element of uncertainty given that management is using historical information and methods to project future events and reserve outcomes. The recorded reserves represent the Company's best estimate at a point in time of the ultimate costs of settlement and administration of a claim or group of claims based upon actuarial assumptions and projections using facts and circumstances known at the time of calculation. The adequacy of reserves may be impacted by future trends in claims severity, frequency, judicial theories of liability and other factors. These variables are affected by both external and internal events, including but not limited to: changes in the economic cycle, inflation, natural or human-made catastrophes, judicial trends, legislative changes and claims handling procedures. Many of these items are not directly quantifiable and not all future events can be anticipated when reserves are established. Reserve estimates are refined as experience develops. Adjustments to reserves, both positive and negative, are reflected in the statement of operations in the period in which such estimates are updated. Because establishment of reserves is an inherently complex process involving significant judgment and estimates, there can be no certainty that future settlement amounts for claims incurred through the financial reporting date will not vary from reported claims reserves. Future loss development could require reserves to be increased or decreased, which could have a material effect on the Company's earnings in the periods in which such increases or decreases are made. However, based on information currently available, the Company believes its reserve estimates are adequate. Long Duration Contracts Future policy benefits and expense reserves for preneed investment-type annuities, and the variable life insurance and investment-type annuity contracts consist of policy account balances before applicable surrender charges and certain deferred policy initiation fees that are being recognized in income over the terms of the policies. Policy benefits charged to expense during the period include amounts paid in excess of policy account balances and interest credited to policy account balances. An unearned revenue reserve is also recorded for those preneed investment-type annuities which represent the balance of the excess of gross premiums over net premiums that is still recognized in future years’ income in a constant relationship to estimated gross profits. Future policy benefits and expense reserves for preneed life insurance contracts issued prior to 2009 are reported at the present value of future benefits to policyholders and related expenses less the present value of future net premiums. Reserve assumptions are selected using best estimates for expected investment yield, inflation, mortality and withdrawal rates. These assumptions reflect current trends, are based on Company experience and include provision for possible unfavorable deviation. An unearned revenue reserve is also recorded for these contracts which represents the balance of the excess of gross premiums over net premiums that is still to be recognized in future years’ income in a constant relationship to insurance in force. Future policy benefits and expense reserves for policies fully covered by reinsurance and certain life, annuity and group life conversion policies no longer offered are equal to the present value of future benefits to policyholders plus related expenses less the present value of the future net premiums. These amounts are estimated based on assumptions as to the expected investment yield, inflation, mortality, morbidity and withdrawal rates as well as other assumptions that are based on the Company’s experience. These assumptions reflect anticipated trends and include provisions for possible unfavorable deviations. Changes in the estimated liabilities are reported as a charge or credit to policyholder benefits as the estimates are revised. Short Duration Contracts The Company’s short duration contracts include accidental death products, former AEB group insurance contracts no longer offered. For short duration contracts, claims and benefits payable reserves are recorded when insured events occur. The liability is based on the expected ultimate cost of settling the claims. The claims and benefits payable reserves include: (1) case reserves for known but unpaid claims as of the balance sheet date; (2) incurred but not reported ("IBNR") reserves for claims where the insured event has occurred but has not been reported to the Company as of the balance sheet date; and (3) loss adjustment expense reserves for the expected handling costs of settling the claims . Changes in the estimated liabilities are recorded as a charge or credit to policyholder benefits as estimates are revised. |
Contingencies | Contingencies A loss contingency is recorded if reasonably estimable and probable. The Company establishes reserves for these contingencies at the best estimate, or if no one estimated amount within the range of possible losses is more probable than any other, the Company records an estimated reserve at the low end of the estimated range. Contingencies affecting the Company primarily relate to legal and regulatory matters, which are inherently difficult to evaluate and are subject to significant changes. |
Premiums | Premiums Long Duration Contracts For traditional life insurance policies previously sold by the Global Preneed business, revenue is recognized when due from policyholders. For investment-type annuity contracts previously sold by the Global Preneed business, revenues consist of charges assessed against policy balances. Premiums for the Company’s previously sold long-term care insurance and traditional life insurance contracts are recognized as revenue when due from the policyholder. For universal life insurance and investment-type annuity contracts, revenues consist of charges assessed against policy balances. All of these premiums (related to the Company’s former Fortis Financial Group and Long-Term Care businesses that were previously sold) are ceded. Short Duration Contracts The Company’s short duration contracts revenue is recognized over the contract term in proportion to the amount of insurance protection provided. |
Fees and Other Income | Fees and Other Income Income earned on preneed life insurance policies with discretionary death benefits is presented within fees and other income. Prior to March 1, 2016, the Company also derived fees and other income from providing administrative services related to the AEB business. These fees were recognized monthly when services were performed. |
Underwriting, General and Administrative Expenses | Underwriting, General and Administrative Expenses Underwriting, general and administrative expenses consist primarily of commissions, premium taxes, licenses, fees, salaries and personnel benefits, goodwill impairment, amortization of deferred acquisition costs, amortization of value of business acquired and other general operating expenses. |
Income Taxes | Income Taxes The Company reports its taxable income in a consolidated federal income tax return along with other affiliated subsidiaries of the Parent. Income tax expense or benefit is allocated among the affiliated subsidiaries by applying income tax rates to taxable income or loss determined on a separate return basis according to a tax allocation agreement. Entities with losses record current tax benefits to the extent such losses are utilized in the consolidated federal tax return. Current federal income taxes are recognized based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income taxes are recorded for temporary differences between the financial reporting basis and income tax basis of assets and liabilities, based on enacted tax laws and statutory tax rates applicable to the periods in which the Company expects the temporary differences to reverse. A valuation allowance is established for deferred tax assets when it is more likely than not that an amount will not be realized. The impact of changes in tax rates on all deferred tax assets and liabilities are required to be reflected within income on the enactment date, regardless of the financial statement component where the deferred tax originated. The Company classifies net interest expense related to tax matters and any applicable penalties as a component of income tax expense. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income, net unrealized gains and losses on securities classified as available for sale and net unrealized gains and losses on other-than-temporarily impaired securities, less deferred income taxes. |
Deferred Gain on Disposal of Businesses | Deferred Gain on Disposal of Businesses The applicable gains related to the AEB, LTC and FFG businesses referenced in Note 1 were required to be deferred and reported as liabilities since the form of these sales did not discharge the Company's primary liability to the insureds. The liabilities have been, and will continue to be amortized and recognized as revenue over the estimated life of the contracts’ terms. The Company reviews and evaluates the estimates affecting the deferred gain on disposal of the respective businesses at least annually, and adjusts the revenue recognized accordingly. |
Recent Accounting Pronouncements - Adopted and Not Yet Adopted | Recent Accounting Pronouncements — Adopted Financial instruments measurement and classification : On January 1, 2018, the Company adopted the amended guidance on the measurement and classification of financial instruments whereby all common and preferred stocks are measured at fair value with changes in fair value recognized through income. Upon adoption, the Company recorded a cumulative effect adjustment to increase retained earnings by $8.1 million , which represents a reclassification of the unrealized gains on common and preferred stock as of the date of adoption from AOCI. Income tax consequences for intra-entity transfers of assets : On January 1, 2018, the Company adopted the amended guidance on tax accounting for intra-entity transfers of assets. The amended guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Also, the amended guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The adoption of this amended guidance did not have an impact on the Company’s financial position and results of operations. Statement of cash flows presentation and classification : On January 1, 2018, the Company adopted the amended guidance on presentation and classification in the statement of cash flows. The amended guidance addresses certain specific cash flow issues including debt prepayment and debt extinguishment costs; settlement of zero-coupon or insignificant coupon debt instruments; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and guidance related to the identification of the primary source for separately identifiable cash flows. The adoption of this amended guidance did not have an impact on the Company's financial position and results of operations. Classification of certain tax effects from AOCI: In February 2018, the Financial Accounting Standards Board (the "FASB") issued amended guidance on reclassifying the stranded tax effects from the U.S. Tax Cuts and Jobs Act (the "TCJA") from AOCI to retained earnings. During 2018, the Company adopted the new guidance and reclassified $(26.7) million from AOCI to retained earnings, with no impact on net income or total stockholders' equity. Accounting standards require the effect of a change in tax laws or rates on deferred tax liabilities or assets be included in net income in the reporting period that includes the enactment date, even though the related income tax effects may have been originally charged or credited to AOCI. The amounts reclassified relate to the difference between the original tax effect of items included in other comprehensive income, such as unrealized gains or losses on securities and the revised tax effects from the TCJA. Recent Accounting Pronouncements — Not Yet Adopted Reporting credit losses of assets held at amortized cost : In June 2016, the FASB issued amended guidance on reporting credit losses for assets held at amortized cost and available for sale debt securities. For assets held at amortized cost, the amended guidance eliminates the probable recognition threshold and instead requires an entity to reflect the current estimate of all expected credit losses. For available for sale debt securities, credit losses are measured in a manner similar to current accounting requirements; however, the amended guidance requires that credit losses be presented as an allowance rather than as a permanent impairment. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amended guidance is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Therefore, the Company is required to adopt the guidance on January 1, 2020. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations. |
Nature of Operations and Item_2
Nature of Operations and Items Impacting Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Gain by Transactions Component | The following represents a summary of the pre-tax gain recognized by transaction component, as well as the related classification within the Financial Statements: Years Ended December 31, 2018 2017 2016 Gain on sale of entities $ — $ — $ 6.6 Novations, resulting in recognized gains (a) — — 59.1 Loss on retroactive reinsurance component, before realized gains (b) — — (109.6 ) Net loss prior to realized gains on transferred securities supporting retroactive component (c) — — (43.9 ) Realized gains on transferred securities supporting retroactive component — — 141.5 Amortization of deferred gains (d) $ 46.4 $ 90.0 $ 356.1 Total $ 46.4 $ 90.0 $ 453.7 (a) Novations of certain insurance policies directly to Sun Life allowed for immediate gain recognition. (b) Reinsurance of existing claims liabilities requires retroactive accounting necessitating losses to be recognized immediately. However, upon transfer of the associated assets supporting the liabilities, the Company recognized realized gains which more than offset the retroactive losses. The Company was required to classify the realized gains as part of net realized gains on investments, within the statement of operation. (c) Amount classified within underwriting, general and administrative expenses in the statements of operations. (d) Amounts classified as amortization of deferred gains and gains on disposal of businesses within the statements of operations. The year ended December 31, 2017 amount includes subsequent novations of $ 1.4 million that allowed immediate gain recognition. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Cost or Amortized Cost, Gross Unrealized Gains and Losses, Fair Value and OTTI of Fixed Maturity and Equity Securities | The following tables show the cost or amortized cost, gross unrealized gains and losses, fair value and OTTI included within AOCI of the Company's fixed maturity securities (and equity securities for 2017) as of the dates indicated: December 31, 2018 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (1) Fixed maturity securities: U.S. government and government agencies and authorities $ 10.8 $ 0.1 $ — $ 10.9 $ — States, municipalities and political subdivisions 13.0 0.9 — 13.9 — Foreign governments 8.4 1.2 — 9.6 — Asset-backed 80.4 0.1 (1.8 ) 78.7 — Commercial mortgage-backed 3.5 — (0.2 ) 3.3 — Residential mortgage-backed 37.0 1.6 (0.4 ) 38.2 1.0 U.S. corporate 497.8 91.1 (1.9 ) 587.0 10.0 Foreign corporate 123.1 19.5 (0.3 ) 142.3 — Total fixed maturity securities $ 774.0 $ 114.5 $ (4.6 ) $ 883.9 $ 11.0 December 31, 2017 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (1) Fixed maturity securities: U.S. government and government agencies and authorities $ 3.1 $ 0.1 $ — $ 3.2 $ — States, municipalities and political subdivisions 4.7 0.9 — 5.6 — Foreign governments 8.4 2.1 — 10.5 — Asset-backed 28.7 0.3 — 29.0 — Commercial mortgage-backed 3.5 — (0.2 ) 3.3 — Residential mortgage-backed 39.6 2.5 (0.4 ) 41.7 1.6 U.S. corporate 588.6 153.6 (0.1 ) 742.1 12.5 Foreign corporate 126.3 31.6 — 157.9 — Total fixed maturity securities $ 802.9 $ 191.1 $ (0.7 ) $ 993.3 $ 14.1 Equity securities: Common stocks $ 0.1 $ 0.5 $ — $ 0.6 $ — Non-redeemable preferred stocks 73.9 12.0 (0.1 ) 85.8 — Total equity securities $ 74.0 $ 12.5 $ (0.1 ) $ 86.4 $ — (1) Represents the amount of OTTI recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date. |
Schedule of Cost or Amortized Cost and Fair Value of Fixed Maturity Securities By Contractual Maturity | The cost or amortized cost and fair value of fixed maturity securities at December 31, 2018 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties. Cost or Amortized Cost Fair Value Due in one year or less $ 17.8 $ 18.0 Due after one year through five years 63.5 66.5 Due after five years through ten years 82.2 92.9 Due after ten years 489.6 586.3 Total 653.1 763.7 Asset-backed 80.4 78.7 Commercial mortgage-backed 3.5 3.3 Residential mortgage-backed 37.0 38.2 Total $ 774.0 $ 883.9 |
Schedule of Major Categories of Net Investment Income | Major categories of net investment income were as follows for the periods indicated: Years Ended December 31, 2018 2017 2016 Fixed maturity securities $ 49.7 $ 52.4 $ 74.1 Equity securities 5.1 5.4 7.0 Commercial mortgage loans on real estate 3.8 5.6 10.2 Policy loans 0.4 0.4 0.5 Other investments 7.0 2.5 7.7 Cash and cash equivalents 0.1 — 0.3 Total investment income 66.1 66.3 99.8 Investment expenses (1.5 ) (2.1 ) (2.0 ) Net investment income $ 64.6 $ 64.2 $ 97.8 |
Summary of Proceeds From Sales of Available-For-Sale Securities and the Gross Realized Gains and Gross Realized Losses | The following table summarizes the proceeds from sales of available-for-sale fixed maturities (and equity securities from 2017 and 2016 prior to the previously described fair value change in accounting) and gross realized gains and gross realized losses that have been recognized in the statement of operations as a result of those sales for the periods indicated: For the Years Ended December 31, 2018 2017 2016 Proceeds from sales $ 177.7 $ 218.7 $ 1,939.4 Gross realized gains (1) 6.9 7.1 168.9 Gross realized losses (2) (2.6 ) (0.4 ) (19.9 ) (1) G ross realized gains for the y ear ended December 31, 2016 includes $145.6 million related to the sale of Assurant Employee Benefits as described in Note 1. (2) Gross realized losses for the year ended December 31, 2016 includes $15.9 million related to the sale of Assurant Employee Benefits as described in Note 1. |
Schedule of Net Realized Gains (Losses), Including Other-Than-Temporary Impairments | The following table sets forth the net realized gains (losses), including OTTI, recognized in the statement of operations for the periods indicated: Years Ended December 31, 2018 2017 2016 Net realized gains (losses) related to sales and other: Fixed maturity securities $ 4.3 $ 6.1 $ 143.6 Equity securities (6.1 ) 0.2 5.7 Commercial mortgage loans on real estate 0.4 1.3 13.6 Other investments — 2.2 2.2 Total net realized gains related to sales and other (1) (1.4 ) 9.8 165.1 Net realized losses related to other-than-temporary impairments: Fixed maturity securities — (0.1 ) (0.3 ) Other investments — — (1.9 ) Total net realized losses related to other-than-temporary impairments — (0.1 ) (2.2 ) Total net realized gains $ (1.4 ) $ 9.7 $ 162.9 (1) The year ended December 31, 2016 net realized gains includes $141.5 million related to the sale of Assurant Employee Benefits as described in Note 1. |
Schedule of Unrealized Gains on Equity Securities | The following table sets forth the portion of unrealized gains related to equity securities for the year ended December 31, 2018: Year Ended December 31, 2018 Net losses recognized on equity securities $ (6.1 ) Less: Net realized gains related to sales of equity securities 0.4 Total net unrealized losses on equity securities held (1) $ (6.5 ) (1) Net gains for the year ended December 31, 2018 are required to be reported through the income statement in accordance with the 2018 accounting guidance on financial instruments. Net unrealized gains of $4.5 million and loss of $5.8 million for the years ended December 31, 2017 and 2016, respectively, were reported through AOCI. |
Schedule of Credit Loss Impairments on Fixed Maturity Securities for Which a Portion of the OTTI Loss was Recognized in AOCI | The following table sets forth the amount of credit loss impairments recognized within the results of operations on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in AOCI, and the corresponding changes in such amounts: Years Ended December 31, 2018 2017 2016 Balance, beginning of year $ 10.7 $ 11.1 $ 13.6 Additions for credit loss impairments recognized in the current period on securities previously impaired — — 0.3 Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security (0.3 ) (0.3 ) (0.5 ) Reductions for credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period — (0.1 ) (2.3 ) Balance, end of year $ 10.4 $ 10.7 $ 11.1 |
Schedule of Gross Unrealized Losses on Fixed Maturity Securities and Equity Securities | The investment category and duration of the Company's gross unrealized losses on fixed maturity securities and equity securities, as applicable, as of December 31, 2018 and 2017 were as follows: December 31, 2018 Less than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturity securities: Asset-backed $ 63.2 $ (1.8 ) $ — $ — $ 63.2 $ (1.8 ) Commercial mortgage-backed $ — $ 3.3 $ (0.2 ) $ 3.3 $ (0.2 ) Residential mortgage-backed — — 8.2 (0.4 ) 8.2 (0.4 ) U.S. corporate 40.5 (1.5 ) 2.5 (0.4 ) 43.0 (1.9 ) Foreign corporate 5.7 (0.3 ) — — 5.7 (0.3 ) Total fixed maturity securities $ 109.4 $ (3.6 ) $ 14.0 $ (1.0 ) $ 123.4 $ (4.6 ) December 31, 2017 Less than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturity securities: Commercial mortgage-backed $ — $ — $ 3.3 $ (0.2 ) $ 3.3 $ (0.2 ) Residential mortgage-backed 9.5 (0.4 ) — — $ 9.5 (0.4 ) U.S. corporate — — 1.5 (0.1 ) $ 1.5 (0.1 ) Total fixed maturity securities $ 9.5 $ (0.4 ) $ 4.8 $ (0.3 ) $ 14.3 $ (0.7 ) Equity securities: Non-redeemable preferred stocks $ 2.5 $ (0.1 ) $ — $ — $ 2.5 $ (0.1 ) |
Schedule of Cost or Amortized Cost and Fair Value of Securities in an Unrealized Loss Position | The cost or amortized cost and fair value of available-for-sale fixed maturity securities in an unrealized loss position at December 31, 2018, by contractual maturity, is shown below: Cost or Amortized Cost Fair Value Due in one year or less 0.8 0.8 Due after one year through five years 1.4 1.3 Due after five years through ten years 9.1 8.9 Due after ten years 39.6 37.7 Total 50.9 48.7 Asset-backed 65.0 63.2 Commercial mortgage-backed 3.5 3.3 Residential mortgage-backed 8.6 8.2 Total $ 128.0 $ 123.4 |
Summary of Loan-To-Value and Average Debt-Service Coverage Ratios | December 31, 2018 Loan-to-Value Carrying Value % of Gross Mortgage Loans Debt- Service Coverage Ratio 70% and less $ 54.6 100.0 % 1.96 December 31, 2017 Loan-to-Value Carrying Value % of Gross Mortgage Loans Debt- Service Coverage Ratio 70% and less $ 79.1 100.0 % 2.11 Less valuation allowance (0.4 ) Net commercial mortgage loans on real estate $ 78.7 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Company's Fair Value Hierarchy for Recurring Basis Assets and Liabilities | The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017. The amounts presented below for Other investments, Cash equivalents, Other assets and Assets and Liabilities held in separate accounts differ from the amounts presented in the balance sheets because only certain investments, or certain assets and liabilities within these line items are measured at estimated fair value. The fair value amount and the majority of the associated levels presented for Assets and Liabilities held in separate accounts are received directly from third parties. December 31, 2018 Total Level 1 Level 2 Level 3 Financial Assets Fixed maturity securities: U.S. government and government agencies and authorities $ 10.9 $ — $ 10.9 $ — State, municipalities and political subdivisions 13.9 — 13.9 — Foreign governments 9.6 — 9.6 — Asset-backed 78.7 — 78.7 — Commercial mortgage-backed 3.3 — — 3.3 Residential mortgage-backed 38.2 — 38.2 — U.S. corporate 587.0 — 587.0 — Foreign corporate 142.3 — 134.1 8.2 Equity securities: Common stocks 0.4 0.4 — — Non-redeemable preferred stocks 80.9 — 79.8 1.1 Other investments 18.1 18.1 (1) — — Cash equivalents 3.1 3.1 Other assets 0.1 — — 0.1 Assets held in separate accounts 1,444.8 1,370.9 (2) 73.9 (3) — Total financial assets $ 2,431.3 $ 1,392.5 $ 1,026.1 $ 12.7 Financial Liabilities Liabilities related to separate accounts $ 1,444.8 $ 1,370.9 (2) $ 73.9 (3) $ — December 31, 2017 Total Level 1 Level 2 Level 3 Financial Assets Fixed maturity securities: U.S. government and government agencies and authorities $ 3.2 $ — $ 3.2 $ — State, municipalities and political subdivisions 5.6 — 5.6 — Foreign governments 10.5 — 10.5 — Asset-backed 29.0 — 24.3 4.7 Commercial mortgage-backed 3.3 — — 3.3 Residential mortgage-backed 41.7 — 41.7 — U.S. corporate 742.1 — 741.9 0.2 Foreign corporate 157.9 — 148.6 9.3 Equity securities: Common stocks 0.6 0.6 — — Non-redeemable preferred stocks 85.8 — 84.7 1.1 Other investments 6.4 6.4 (1) — — Other assets 0.2 — — 0.2 Assets held in separate accounts 1,644.3 1,600.8 (2) 43.5 (3) — Total financial assets $ 2,730.6 $ 1,607.8 $ 1,104.0 $ 18.8 Financial Liabilities Liabilities related to separate accounts $ 1,644.3 $ 1,600.8 (2) $ 43.5 (3) $ — (1) Primarily includes money market funds. (2) Primarily includes mutual funds. (3) Primarily includes fixed maturity securities. |
Summary of the Change in Balance Sheet Carrying Value Associated with Level 3 Financial Assets Carried at Fair Value | The following tables summarize the change in balance sheet carrying value associated with Level 3 financial assets carried at fair value during the years ended December 31, 2018 and 2017: Year Ended December 31, 2018 Balance, beginning of period Total gains (losses) (realized/ unrealized) included in earnings (1) Net unrealized (losses) gains included in other comprehensive income (2) Purchases Sales Transfers in (3) Transfers out (3) Balance, end of period Fixed maturity securities: Asset-backed $ 4.7 $ — $ — $ 23.9 $ (3.0 ) $ — $ (25.6 ) — Commercial mortgage-backed 3.3 0.1 (0.1 ) — — — — 3.3 U.S. corporate 0.2 — — 0.7 (0.8 ) 0.1 (0.2 ) — Foreign corporate 9.3 (0.1 ) (0.4 ) — (0.6 ) — — 8.2 Equity securities: Non-redeemable preferred stocks 1.1 — — — — — — 1.1 Other assets 0.2 (0.1 ) — — — — — 0.1 Total level 3 assets $ 18.8 $ (0.1 ) $ (0.5 ) $ 24.6 $ (4.4 ) $ 0.1 $ (25.8 ) $ 12.7 Year Ended December 31, 2017 Balance, beginning of period Total gains (losses) (realized/ unrealized) included in earnings (1) Net unrealized losses included in other comprehensive income (2) Purchases Sales Transfers in (3) Transfers out (3) Balance, end of period Fixed maturity securities: Asset-backed $ — $ 0.1 $ (0.1 ) $ 29.0 $ (7.4 ) $ — $ (16.9 ) 4.7 Commercial mortgage-backed 3.2 0.1 — — — — — 3.3 U.S. corporate 3.6 — 0.3 — (0.6 ) 0.3 (3.4 ) 0.2 Foreign corporate 10.0 — (0.1 ) — (0.6 ) — — 9.3 Equity securities: Non-redeemable preferred stocks 1.1 — — — — — — 1.1 Other assets 0.3 (0.1 ) — — — — — 0.2 Total level 3 assets $ 18.2 $ 0.1 $ 0.1 $ 29.0 $ (8.6 ) $ 0.3 $ (20.3 ) $ 18.8 (1) Included as part of net realized gains on investments, excluding other-than-temporary impairment losses, in the statement of operations. (2) Included as part of change in unrealized gains on securities in the statement of comprehensive income. (3) Transfers are primarily attributable to changes in the availability of observable market information and re-evaluation of the observability of valuation inputs. |
Schedule of Carrying Value, Fair Value Amount and Hierarchy Level of the Financial Instruments That Are Not Recognized or Are Not Carried at Fair Value | The following tables disclose the carrying value, fair value amount and hierarchy level of the financial instruments that are not recognized or are not carried at fair value in the balance sheets: December 31, 2018 Fair Value Carrying Value Total Level 1 Level 2 Level 3 Financial assets: Commercial mortgage loans on real estate $ 54.6 $ 55.5 $ — $ — $ 55.5 Policy loans 6.0 6.0 6.0 — — Other investments 0.2 0.2 — — 0.2 Total financial assets $ 60.8 $ 61.7 $ 6.0 $ — $ 55.7 Financial liabilities: Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1) $ 203.5 $ 209.1 $ — $ — $ 209.1 December 31, 2017 Fair Value Carrying Value Total Level 1 Level 2 Level 3 Financial assets: Commercial mortgage loans on real estate $ 78.7 $ 82.7 $ — $ — $ 82.7 Policy loans 6.7 6.7 6.7 — — Other investments 0.2 0.2 — — 0.2 Total financial assets $ 85.6 $ 89.6 $ 6.7 $ — $ 82.9 Financial liabilities: Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1) $ 210.5 $ 227.5 $ — $ — $ 227.5 (1) Only the fair value of the Company's policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in the table above. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Company's Current and Deferred Federal Tax Expense | Year Ended December 31, 2018 2017 2016 Current expense (benefit) $ 9.5 $ (3.3 ) $ 271.4 Deferred expense (benefit) 7.2 49.5 (65.2 ) Total income tax expense $ 16.7 $ 46.2 $ 206.2 |
Schedule of Reconciliation of the Federal Income Tax Rate to the Company's Effective Income Tax Rate | A reconciliation of the federal income tax rate to the Company's effective income tax rate follows for the periods indicated: December 31, 2018 2017 2016 Federal income tax rate: 21.0 % 35.0 % 35.0 % Reconciling items: Dividends-received deduction (0.8 )% (1.2 )% (0.3 )% TCJA impacts (1) 0.5 % 3.6 % — % Capital contribution from affiliated entity impacting taxable income — % — % 3.7 % Goodwill — % — % 1.2 % Nondeductible health insurer fee — % — % 0.5 % Change in liability for prior years' taxes — % (0.5 )% — % Other (0.3 )% 0.1 % (0.1 )% Effective income tax rate 20.4 % 37.0 % 40.0 % |
Schedule of Significant Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that result in deferred tax assets and deferred tax liabilities are as follows as of the dates indicated: December 31, 2018 2017 Deferred tax assets: Deferred gain on disposal of businesses $ 10.8 $ 22.0 Deferred acquisition costs 14.2 13.3 Investments, net 5.0 5.7 Policyholder and separate account reserves 8.9 7.1 Employee benefits 2.8 2.8 Total deferred tax assets (1) 41.7 50.9 Deferred tax liabilities: Net unrealized gains on securities (24.1 ) (42.6 ) Other (0.8 ) (1.4 ) Total deferred tax liabilities (1) (24.9 ) (44.0 ) Net deferred income tax assets $ 16.8 $ 6.9 (1) 2017 reflects the reduction of deferred tax assets and liabilities following the enactment of TCJA. |
Statutory Information (Tables)
Statutory Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Schedule of Statutory Net Income and Capital and Surplus | The Company's statutory net income and capital and surplus are as follows: Years Ended and at December 31, 2018 2017 2016 Statutory net income $ 90.0 $ 106.2 $ 481.7 Statutory capital and surplus $ 126.3 $ 113.9 $ 158.5 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Reinsurance Recoverables | The following table presents the reinsurance recoverable from John Hancock, Sun Life, Talcott Resolution and other reinsurers as of December 31, 2018 and 2017. Reinsurer December 31, 2018 December 31, 2017 John Hancock $ 1,992.7 $ 1,952.7 Sun Life 737.6 851.9 Talcott Resolution 523.5 549.6 Other reinsurers 69.4 70.3 Total $ 3,323.2 $ 3,424.5 2018 2017 Ceded future policyholder benefits and expenses $ 2,103.2 $ 2,130.0 Ceded unearned premium 24.4 27.1 Ceded claims and benefits payable 1,179.2 1,254.7 Ceded paid losses 16.4 12.7 Total $ 3,323.2 $ 3,424.5 |
Schedule of Reinsurance Recoverables | A. M. Best ratings of reinsurer Ceded future policyholder benefits and expense Ceded unearned premiums Ceded claims and benefits payable Ceded paid losses Total A++ or A+ $ 1,533.0 $ 24.1 $ 1,158.9 $ 16.1 $ 2,732.1 A or A– 65.8 0.2 1.2 — 67.2 B++ or B+ 504.0 0.1 19.1 0.3 523.5 Not rated 0.4 — — — 0.4 Total Reinsurance recoverable $ 2,103.2 $ 24.4 $ 1,179.2 $ 16.4 $ 3,323.2 |
Schedule of Effect of Reinsurance on Premiums Earned and Benefits Incurred | The effect of reinsurance on premiums earned and benefits incurred was as follows for the period indicated: Years Ended December 31, 2018 2017 2016 Long Duration Short Duration Total Long Duration Short Duration Total Long Duration Short Duration Total Direct earned premiums $ 182.2 $ 568.2 $ 750.4 $ 198.0 $ 756.9 $ 954.9 $ 213.7 $ 808.0 $ 1,021.7 Premiums assumed 3.2 1.4 4.6 3.6 0.7 4.3 4.6 54.2 58.8 Premiums ceded (180.6 ) (569.6 ) (750.2 ) (196.1 ) (757.6 ) (953.7 ) (200.6 ) (699.6 ) (900.2 ) Net earned premiums $ 4.8 $ — $ 4.8 $ 5.5 $ — $ 5.5 $ 17.7 $ 162.6 $ 180.3 Direct policyholder benefits $ 399.6 $ 363.7 $ 763.3 $ 413.6 $ 439.5 $ 853.1 $ 695.8 $ 546.9 $ 1,242.7 Policyholder benefits assumed 14.4 — 14.4 13.4 — 13.4 15.5 25.6 41.1 Policyholder benefits ceded (350.9 ) (363.7 ) (714.6 ) (372.3 ) (435.6 ) (807.9 ) (672.2 ) (458.9 ) (1,131.1 ) Net policyholder benefits $ 63.1 $ — $ 63.1 $ 54.7 $ 3.9 $ 58.6 $ 39.1 $ 113.6 $ 152.7 |
Reserves (Tables)
Reserves (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Schedule of Most Significant Claims and Benefits Payable | The following table provides a roll forward of the Company's beginning and ending claims and benefits payable balances. Claims and benefits payable is the liability for unpaid loss and loss adjustment expenses and is comprised of case and IBNR reserves. Since unpaid loss and loss adjustment expenses are estimates, the Company's actual losses incurred may be more or less than the Company's previously developed estimates, which is referred to as either unfavorable or favorable development, respectively. The best estimate of ultimate loss and loss adjustment expense is generally selected from a blend of methods that are applied consistently each period. There have been no significant changes in the methodologies and assumptions utilized in estimating the liability for unpaid loss and loss adjustment expenses for any of the periods presented. Years Ended December 31, 2018 2017 2016 Claims and benefits payable, at beginning of year $ 1,266.1 $ 1,412.9 $ 1,719.9 Less: Reinsurance ceded and other (1,255.1 ) (1,401.8 ) (384.3 ) Net claims and benefits payable, at beginning of year 11.0 11.1 1,335.6 Incurred losses and loss adjustment expenses related to: Current year 63.4 32.0 181.6 Prior year's interest — — 9.4 Prior years — (0.1 ) (40.4 ) Total incurred losses and loss adjustment expenses 63.4 31.9 150.6 Paid losses and loss adjustment expenses related to: Current year 56.6 29.0 177.2 Prior years 6.5 3.0 1,297.9 Total paid losses and loss adjustment expenses 63.1 32.0 1,475.1 Net claims and benefits payable, at end of year 11.3 11.0 11.1 Plus: Reinsurance ceded and other 1,179.2 1,255.1 1,401.8 Claims and benefits payable, at end of year $ 1,190.5 $ 1,266.1 $ 1,412.9 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income, Net of Tax | The following tables summarize those reclassification adjustments (net of taxes): Year Ended December 31, 2018 Unrealized gains on securities OTTI Accumulated other comprehensive income Balance at December 31, 2017 $ 119.0 $ 9.2 $ 128.2 Change in other comprehensive income before reclassifications (58.2 ) (2.4 ) (60.6 ) Amounts reclassified from accumulated other comprehensive income (3.9 ) — (3.9 ) Net current-period other comprehensive loss (62.1 ) (2.4 ) (64.5 ) Cumulative effect of change in accounting principles (1) 16.6 2.0 18.6 Balance at December 31, 2018 $ 73.5 $ 8.8 $ 82.3 (1) See Note 2 - Summary of Significant Accounting Policies for additional information. Year Ended December 31, 2017 Unrealized gains on securities OTTI Accumulated other comprehensive income Balance at December 31, 2016 $ 95.1 $ 8.6 $ 103.7 Change in other comprehensive income before reclassifications 27.8 0.6 28.4 Amounts reclassified from accumulated other comprehensive income (3.9 ) — (3.9 ) Net current-period other comprehensive income 23.9 0.6 24.5 Balance at December 31, 2017 $ 119.0 $ 9.2 $ 128.2 Year Ended December 31, 2016 Unrealized gains on securities OTTI Accumulated other comprehensive income Balance at December 31, 2015 $ 174.2 $ 9.3 $ 183.5 Change in other comprehensive income before reclassifications 17.1 (0.3 ) 16.8 Amounts reclassified from accumulated other comprehensive income (96.2 ) (0.4 ) (96.6 ) Net current-period other comprehensive loss (79.1 ) (0.7 ) (79.8 ) Balance at December 31, 2016 $ 95.1 $ 8.6 $ 103.7 |
Summary of the Reclassifications Out of Accumulated Other Comprehensive Income | The following tables summarize the reclassifications out of accumulated other comprehensive income: Details about accumulated other comprehensive income components Amount reclassified from accumulated other comprehensive income Affected line item in the statement where net income is presented Years Ended December 31, 2018 2017 2016 Unrealized gains on securities $ (4.9 ) $ (6.0 ) $ (148.0 ) Net realized gains on investments, excluding other-than-temporary impairment losses 1.0 2.1 51.8 Provision for income taxes $ (3.9 ) $ (3.9 ) $ (96.2 ) Net of tax OTTI $ — $ — $ (0.6 ) Portion of net (gain) loss recognized in other comprehensive income, before taxes — — 0.2 Provision for income taxes $ — $ — $ (0.4 ) Net of tax Total reclassifications for the period $ (3.9 ) $ (3.9 ) $ (96.6 ) Net of tax |
Nature of Operations and Item_3
Nature of Operations and Items Impacting Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | Mar. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Net cash consideration | [1] | $ 0 | $ 0 | $ 880.5 | ||
Dividends | [2] | 15 | 61 | 890 | ||
Cash dividends paid | 15 | 1.9 | 379.4 | |||
Investments dividends paid | 59.1 | 510.6 | ||||
Goodwill impairment | 0 | 0 | 17.3 | |||
Capital contribution from affiliated entity | 54.3 | 54.3 | ||||
Retained Earnings | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Dividends | 15 | 61 | $ 376 | [2] | ||
Assurant Employee Benefits | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Net cash consideration | $ 884.4 | |||||
Estimated gain on disposal before adjustment | 604.1 | |||||
Deferred gain on disposal | 491.4 | $ 16.1 | ||||
Gain on disposal | 604.1 | |||||
Goodwill impairment | 17.3 | |||||
Pre-tax income on disposal | $ 14 | |||||
Assurant Employee Benefits | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Parent Company | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Net cash consideration | 942.2 | |||||
Estimated gain on disposal before adjustment | $ 656.5 | |||||
[1] | Related to the sale of Assurant Employee Benefits segment mainly through reinsurance transactions. The capital contribution from the affiliated entity is related to the difference in contractual and allocated consideration attributable to that entity. | |||||
[2] | Dividends are required to be deducted from retained earnings and when depleted, deducted from additional paid-in capital. |
Nature of Operations and Item_4
Nature of Operations and Items Impacting Basis of Presentation - Gain by Transaction Component (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Assurant Employee Benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on sale of entities | $ 0 | $ 0 | $ 6.6 |
Novations, resulting in recognized gains | 0 | 0 | 59.1 |
Loss on retroactive reinsurance component, before realized gains | 0 | 0 | (109.6) |
Net loss prior to realized gains on transferred securities supporting retroactive component | 0 | 0 | (43.9) |
Realized gains on transferred securities supporting retroactive component | 0 | 0 | 141.5 |
Amortization of deferred gains | 46.4 | 90 | 356.1 |
Total | $ 46.4 | 90 | $ 453.7 |
Amortization of deferred gains, subsequent notations | $ 1.4 |
Nature of Operations and Item_5
Nature of Operations and Items Impacting Basis of Presentation - Change in Presentation of Certain Preneed Life Insurance Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | |||
Other assets | $ 51 | $ 51.2 | |
Total assets | 5,907.9 | 6,340.1 | |
Liabilities | |||
Unearned premiums | 49.9 | 54.5 | |
Total liabilities | 5,715.4 | 6,133.1 | |
Revenues | |||
Net earned premiums | 4.8 | 5.5 | $ 180.3 |
Fees and other income | 33.1 | 29 | 6.7 |
Total revenues | 154.7 | 206.2 | 812.2 |
Benefits, losses and expenses | |||
Policyholder benefits | 63.1 | 58.6 | 152.7 |
Underwriting, general and administrative expenses | 9.9 | 22.5 | 143.8 |
Total benefits, losses and expenses | $ 73 | $ 81.1 | $ 296.5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 01, 2018 | ||
Investments | |||
Delinquency period to place loans on non-accrual status | 90 days | ||
Period after which financial information provided by the equity method investee was used by the entity | 3 months | ||
Accumulated Other Comprehensive Income | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of change in accounting principles | [1] | $ 18.6 | |
Accumulated Other Comprehensive Income | Accounting Standards Update 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of change in accounting principles | [1] | 26.7 | |
Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of change in accounting principles | [1] | (18.6) | |
Retained Earnings | Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of change in accounting principles | [1] | 8.1 | |
Retained Earnings | Accounting Standards Update 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of change in accounting principles | [1] | $ (26.7) | |
[1] | Amounts relate to: (i) the requirement to recognize the changes in fair value of equity securities directly within income (resulting in a reclassification of unrealized gains as of January 1, 2018 between accumulated other comprehensive income (“AOCI”) and retained earnings); and (ii) the reclassification from AOCI to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. See Note 2 for additional information. |
Investments - Schedule of Amort
Investments - Schedule of Amortized Cost, Gross Unrealized Gains and Losses, Fair Value, and Other-Than-Temporary-Impairment of Fixed Maturity and Equity Securities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | $ 774 | $ 802.9 |
Fair Value | 883.9 | 993.3 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 774 | |
Cost or Amortized Cost | 802.9 | |
Gross Unrealized Gains | 114.5 | |
Gross Unrealized Gains | 191.1 | |
Gross Unrealized Losses | (4.6) | |
Gross Unrealized Losses | (0.7) | |
Fair Value | 883.9 | |
Fair Value | 993.3 | |
Fixed maturity securities | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 11 | 14.1 |
Fixed maturity securities | U.S. government and government agencies and authorities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 10.8 | |
Cost or Amortized Cost | 3.1 | |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Losses | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 10.9 | |
Fair Value | 3.2 | |
Fixed maturity securities | U.S. government and government agencies and authorities | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | 0 |
Fixed maturity securities | States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 13 | |
Cost or Amortized Cost | 4.7 | |
Gross Unrealized Gains | 0.9 | |
Gross Unrealized Gains | 0.9 | |
Gross Unrealized Losses | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 13.9 | |
Fair Value | 5.6 | |
Fixed maturity securities | States, municipalities and political subdivisions | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | 0 |
Fixed maturity securities | Foreign governments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 8.4 | |
Cost or Amortized Cost | 8.4 | |
Gross Unrealized Gains | 1.2 | |
Gross Unrealized Gains | 2.1 | |
Gross Unrealized Losses | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 9.6 | |
Fair Value | 10.5 | |
Fixed maturity securities | Foreign governments | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | 0 |
Fixed maturity securities | Asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 80.4 | |
Cost or Amortized Cost | 28.7 | |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Gains | 0.3 | |
Gross Unrealized Losses | (1.8) | |
Gross Unrealized Losses | 0 | |
Fair Value | 78.7 | |
Fair Value | 29 | |
Fixed maturity securities | Asset-backed | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | 0 |
Fixed maturity securities | Commercial mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 3.5 | |
Cost or Amortized Cost | 3.5 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (0.2) | |
Gross Unrealized Losses | (0.2) | |
Fair Value | 3.3 | |
Fair Value | 3.3 | |
Fixed maturity securities | Commercial mortgage-backed | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | 0 |
Fixed maturity securities | Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 37 | |
Cost or Amortized Cost | 39.6 | |
Gross Unrealized Gains | 1.6 | |
Gross Unrealized Gains | 2.5 | |
Gross Unrealized Losses | (0.4) | |
Gross Unrealized Losses | (0.4) | |
Fair Value | 38.2 | |
Fair Value | 41.7 | |
Fixed maturity securities | Residential mortgage-backed | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 1 | 1.6 |
Fixed maturity securities | U.S. corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 497.8 | |
Cost or Amortized Cost | 588.6 | |
Gross Unrealized Gains | 91.1 | |
Gross Unrealized Gains | 153.6 | |
Gross Unrealized Losses | (1.9) | |
Gross Unrealized Losses | (0.1) | |
Fair Value | 587 | |
Fair Value | 742.1 | |
Fixed maturity securities | U.S. corporate | OTTI | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 10 | 12.5 |
Fixed maturity securities | Foreign corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 123.1 | |
Cost or Amortized Cost | 126.3 | |
Gross Unrealized Gains | 19.5 | |
Gross Unrealized Gains | 31.6 | |
Gross Unrealized Losses | (0.3) | |
Gross Unrealized Losses | 0 | |
Fair Value | 142.3 | |
Fair Value | 157.9 | |
Fixed maturity securities | Foreign corporate | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | $ 0 | 0 |
Equity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 74 | |
Gross Unrealized Gains | 12.5 | |
Gross Unrealized Losses | (0.1) | |
Fair Value | 86.4 | |
Equity securities | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
Equity securities | Common stocks | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 0.1 | |
Gross Unrealized Gains | 0.5 | |
Gross Unrealized Losses | 0 | |
Fair Value | 0.6 | |
Equity securities | Common stocks | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | 0 | |
Equity securities | Non-redeemable preferred stocks | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 73.9 | |
Gross Unrealized Gains | 12 | |
Gross Unrealized Losses | (0.1) | |
Fair Value | 85.8 | |
Equity securities | Non-redeemable preferred stocks | OTTI | Available-for-sale securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
OTTI in AOCI | $ 0 |
Investments - Schedule of Amo_2
Investments - Schedule of Amortized Cost, Gross Unrealized Gains and Losses, Fair Value, and Other-Than-Temporary-Impairment of Fixed Maturity and Equity Securities - Additional Information (Details) - Credit concentration - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Corporate fixed maturity and equity securities | Energy Sector | Investment rated as investment grade | ||
Investments | ||
Concentration percentage | 93.00% | |
Corporate fixed maturity and equity securities | Europe | ||
Investments | ||
Investment exposure | $ 67.8 | $ 8 |
Investment portfolio | Corporate fixed maturity and equity securities | Europe | ||
Investments | ||
Unrealized gains | $ 76.5 | $ 14.7 |
Investment portfolio | Corporate fixed maturity and equity securities | Europe | Finance Sector | ||
Investments | ||
Concentration percentage | 23.00% | 24.00% |
Investment portfolio | Corporate fixed maturity and equity securities | United Kingdom | ||
Investments | ||
Concentration percentage | 4.00% | 3.00% |
Investment portfolio | Maximum | States, municipalities and political subdivisions | Individual U. S. states | ||
Investments | ||
Concentration percentage | 0.60% | 0.50% |
Investment portfolio | Maximum | States, municipalities and political subdivisions | Revenue bonds | Individual U. S. states | ||
Investments | ||
Concentration percentage | 82.00% | 100.00% |
Investments - Schedule of Cost
Investments - Schedule of Cost or Amortized Cost and Fair Value of Fixed Maturity Securities By Contractual Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Cost or Amortized Cost | ||
Cost or Amortized Cost | $ 774 | $ 802.9 |
Fair Value | ||
Total | 883.9 | $ 993.3 |
Fixed maturity securities | ||
Cost or Amortized Cost | ||
Due in one year or less | 17.8 | |
Due after one year through five years | 63.5 | |
Due after five years through ten years | 82.2 | |
Due after ten years | 489.6 | |
Total Cost or Amortized Cost, contractual maturity | 653.1 | |
Fair Value | ||
Due in one year or less | 18 | |
Due after one year through five years | 66.5 | |
Due after five years through ten years | 92.9 | |
Due after ten years | 586.3 | |
Total Fair Value, contractual maturity | 763.7 | |
Asset-backed | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 80.4 | |
Fair Value | ||
Fair Value | 78.7 | |
Commercial mortgage-backed | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 3.5 | |
Fair Value | ||
Fair Value | 3.3 | |
Residential mortgage-backed | ||
Cost or Amortized Cost | ||
Cost or Amortized Cost | 37 | |
Fair Value | ||
Fair Value | $ 38.2 |
Investments - Schedule of Major
Investments - Schedule of Major Categories of Net Investment Income (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Major categories of net investment income | |||
Non-income producing investments | $ 0 | $ 0 | $ 0 |
Total investment income | 66,100,000 | 66,300,000 | 99,800,000 |
Investment expenses | (1,500,000) | (2,100,000) | (2,000,000) |
Net investment income | 64,600,000 | 64,200,000 | 97,800,000 |
Fixed maturity securities | |||
Major categories of net investment income | |||
Total investment income | 49,700,000 | 52,400,000 | 74,100,000 |
Equity securities | |||
Major categories of net investment income | |||
Total investment income | 5,100,000 | 5,400,000 | 7,000,000 |
Commercial mortgage loans on real estate | |||
Major categories of net investment income | |||
Total investment income | 3,800,000 | 5,600,000 | 10,200,000 |
Policy loans | |||
Major categories of net investment income | |||
Total investment income | 400,000 | 400,000 | 500,000 |
Other investments | |||
Major categories of net investment income | |||
Total investment income | 7,000,000 | 2,500,000 | 7,700,000 |
Cash and cash equivalents | |||
Major categories of net investment income | |||
Total investment income | $ 100,000 | $ 0 | $ 300,000 |
Investments - Proceeds From Sal
Investments - Proceeds From Sales of Available-For-Sale Securities and the Gross Realized Gains and Gross Realized Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Available-for-sale securities, proceeds and realized gains (losses) included in earnings | |||
Proceeds from sales | $ 177.7 | ||
Proceeds from sales | $ 218.7 | $ 1,939.4 | |
Gross realized gains | 6.9 | ||
Gross realized gains | 7.1 | 168.9 | |
Gross realized losses | $ (2.6) | ||
Gross realized losses | (0.4) | $ (19.9) | |
Other information | |||
Average period of time for which securities were traded continuously at a price below book value for securities sold at a loss | 3 months | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Assurant Employee Benefits | |||
Available-for-sale securities, proceeds and realized gains (losses) included in earnings | |||
Gross realized gains | 145.6 | ||
Gross realized losses | $ (15.9) |
Investments - Schedule of Net R
Investments - Schedule of Net Realized Gains (Losses), Including Other-Than-Temporary Impairments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Major categories of net investment income | ||||
Total net realized gains related to sales and other | $ (1.4) | $ 9.8 | $ 165.1 | |
Total net realized losses related to other-than-temporary impairments | 0 | (0.1) | (2.2) | |
Total net realized gains | [1] | (1.4) | 9.7 | 162.9 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Assurant Employee Benefits | ||||
Major categories of net investment income | ||||
Net gains related to sale | 0 | 0 | 141.5 | |
Fixed maturity securities | ||||
Major categories of net investment income | ||||
Total net realized gains related to sales and other | 4.3 | 6.1 | 143.6 | |
Total net realized losses related to other-than-temporary impairments | 0 | (0.1) | (0.3) | |
Equity securities | ||||
Major categories of net investment income | ||||
Total net realized gains related to sales and other | (6.1) | 0.2 | 5.7 | |
Commercial mortgage loans on real estate | ||||
Major categories of net investment income | ||||
Total net realized gains related to sales and other | 0.4 | 1.3 | 13.6 | |
Other investments | ||||
Major categories of net investment income | ||||
Total net realized gains related to sales and other | 0 | 2.2 | 2.2 | |
Total net realized losses related to other-than-temporary impairments | $ 0 | $ 0 | $ (1.9) | |
[1] | Related to the sale of Assurant Employee Benefits segment mainly through reinsurance transactions. The capital contribution from the affiliated entity is related to the difference in contractual and allocated consideration attributable to that entity. |
Investments Investments - Sched
Investments Investments - Schedule of Net Unrealized Losses on Equity Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Net losses recognized on equity securities | $ (6.1) | ||
Less: Net realized gains related to sales of equity securities | 0.4 | ||
Total net unrealized losses on equity securities held | $ (6.5) | ||
Net unrealized gain (loss) | $ (4,500,000) | $ 5,800,000 |
Investments - Schedule of Credi
Investments - Schedule of Credit Loss Impairments on Fixed Maturity Securities for Which a Portion of the OTTI Loss was Recognized in AOCI (Details) - Fixed maturity securities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Credit loss impairments on fixed maturity securities for which a portion of the OTTI loss was recognized in AOCI | |||
Balance, beginning of year | $ 10.7 | $ 11.1 | $ 13.6 |
Additions for credit loss impairments recognized in the current period on securities previously impaired | 0 | 0 | 0.3 |
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security | (0.3) | (0.3) | (0.5) |
Reductions for credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period | 0 | (0.1) | (2.3) |
Balance, end of year | $ 10.4 | $ 10.7 | $ 11.1 |
Investments - Schedule of Gross
Investments - Schedule of Gross Unrealized Losses on Fixed Maturity Securities and Equity Securities (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($)security | |
Debt Securities, Available-for-sale [Line Items] | ||
Total | $ 123.4 | |
Total gross unrealized losses as a percentage of the aggregate fair value of the related securities | 3.00% | |
Percentage of gross unrealized losses in a continuous loss position for less than twelve months | 79.00% | 69.00% |
Number of individual securities comprising total gross unrealized losses | security | 81 | |
Number of individual securities comprising total gross unrealized losses | security | 25 | |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | $ 109.4 | |
Fair value of securities in a continuous unrealized loss position, Less than 12 months | $ 9.5 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 14 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 4.8 | |
Total | 14.3 | |
Total | 123.4 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (3.6) | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (0.4) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (0.3) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (1) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (4.6) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (0.7) | |
Fixed maturity securities | Asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 63.2 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 0 | |
Total | 63.2 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (1.8) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (1.8) | |
Fixed maturity securities | Commercial mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 3.3 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 3.3 | |
Total | 3.3 | |
Total | 3.3 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (0.2) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (0.2) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (0.2) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (0.2) | |
Fixed maturity securities | Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 9.5 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 8.2 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 0 | |
Total | 9.5 | |
Total | 8.2 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (0.4) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (0.4) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (0.4) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (0.4) | |
Fixed maturity securities | U.S. corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 40.5 | |
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 2.5 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 1.5 | |
Total | 1.5 | |
Total | 43 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (1.5) | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (0.1) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | (0.4) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (1.9) | |
Unrealized losses on securities in a continuous unrealized loss position, Total | (0.1) | |
Fixed maturity securities | Foreign corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 5.7 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 0 | |
Total | 5.7 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (0.3) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, Total | $ (0.3) | |
Equity securities | Non-redeemable preferred stocks | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value of securities in a continuous unrealized loss position, Less than 12 months | 2.5 | |
Fair value of securities in a continuous unrealized loss position, 12 months or more | 0 | |
Total | 2.5 | |
Unrealized losses on securities in a continuous unrealized loss position, Less than 12 months | (0.1) | |
Unrealized losses on securities in a continuous unrealized loss position, 12 months or more | 0 | |
Unrealized losses on securities in a continuous unrealized loss position, Total | $ (0.1) |
Investments - Schedule of Cos_2
Investments - Schedule of Cost or Amortized Cost and Fair Value of Available-For-Sale Fixed Maturity Securities in an Unrealized Loss Position (Details) $ in Millions | Dec. 31, 2018USD ($) |
Cost or Amortized Cost | |
Total | $ 128 |
Fair Value | |
Total | 123.4 |
Fixed maturity securities | |
Cost or Amortized Cost | |
Due in one year or less | 0.8 |
Due after one year through five years | 1.4 |
Due after five years through ten years | 9.1 |
Due after ten years | 39.6 |
Total, with single maturity | 50.9 |
Fair Value | |
Due in one year or less | 0.8 |
Due after one year through five years | 1.3 |
Due after five years through ten years | 8.9 |
Due after ten years | 37.7 |
Total, with single maturity | 48.7 |
Asset-backed | |
Cost or Amortized Cost | |
Total, without single maturity | 65 |
Fair Value | |
Total, without single maturity | 63.2 |
Commercial mortgage-backed | |
Cost or Amortized Cost | |
Total, without single maturity | 3.5 |
Fair Value | |
Total, without single maturity | 3.3 |
Residential mortgage-backed | |
Cost or Amortized Cost | |
Total, without single maturity | 8.6 |
Fair Value | |
Total, without single maturity | $ 8.2 |
Investments - Summary of Loan-T
Investments - Summary of Loan-To-Value and Average Debt-Service Coverage Ratios (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commercial mortgage loans | ||
Net commercial mortgage loans on real estate | $ 54.6 | $ 78.7 |
Fixed maturity securities on deposit with various governmental authorities | $ 392.9 | $ 423.7 |
70% and less | Maximum | ||
Commercial mortgage loans | ||
Loan-to-value percentage | 70.00% | 70.00% |
81% - 95% | Minimum | ||
Commercial mortgage loans | ||
Loan-to-value percentage | 81.00% | 81.00% |
81% - 95% | Maximum | ||
Commercial mortgage loans | ||
Loan-to-value percentage | 95.00% | 95.00% |
Greater than 95% | Minimum | ||
Commercial mortgage loans | ||
Loan-to-value percentage | 95.00% | 95.00% |
Commercial mortgage loans | ||
Commercial mortgage loans | ||
Less valuation allowance | $ (0.4) | |
Net commercial mortgage loans on real estate | 78.7 | |
Decrease in loan valuation allowance | $ 0.4 | |
Commercial mortgage loans | Minimum | ||
Commercial mortgage loans | ||
Gross commercial mortgage loans on real estate | 0.1 | 0.1 |
Commercial mortgage loans | Maximum | ||
Commercial mortgage loans | ||
Gross commercial mortgage loans on real estate | 8.2 | 8.4 |
Commercial mortgage loans | 70% and less | ||
Commercial mortgage loans | ||
Gross commercial mortgage loans on real estate | $ 54.6 | $ 79.1 |
% of Gross Mortgage Loans | 100.00% | 100.00% |
Debt- Service Coverage Ratio | 1.96 | 2.11 |
Commercial mortgage loans | Investment portfolio | Geographic concentration risk | California, Alabama and Utah | ||
Commercial mortgage loans | ||
Concentration percentage | 45.00% | |
Fixed maturity securities | ||
Commercial mortgage loans | ||
Fixed maturity securities on deposit with various governmental authorities | $ 6.8 | $ 6.2 |
Investments - Variable Interest
Investments - Variable Interest Entities (Details) $ in Millions | Dec. 31, 2018USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Maximum loss exposure in recorded carrying value | $ 26 |
Carrying value of unfunded commitments |
Fair Value Disclosures - Schedu
Fair Value Disclosures - Schedule of the Company's Fair Value Hierarchy for Recurring Basis Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 1 | ||
Financial Assets | ||
Total financial assets | $ 6,000 | $ 6,700 |
Level 2 | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Level 3 | ||
Financial Assets | ||
Total financial assets | 55,700 | 82,900 |
Recurring basis | Level 1 | ||
Financial Assets | ||
Total financial assets | 1,392,500 | 1,607,800 |
Financial Liabilities | ||
Liabilities related to separate accounts | 1,370,900 | 1,600,800 |
Recurring basis | Level 1 | Fixed maturity securities | U.S. government and government agencies and authorities | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | States, municipalities and political subdivisions | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | Foreign governments | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | Asset-backed | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | Commercial mortgage-backed | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | Residential mortgage-backed | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | U.S. corporate | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Fixed maturity securities | Foreign corporate | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Equity securities | Common Stock | ||
Financial Assets | ||
Total financial assets | 400 | 600 |
Recurring basis | Level 1 | Equity securities | Non-redeemable preferred stocks | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Other investments | ||
Financial Assets | ||
Total financial assets | 18,100 | 6,400 |
Recurring basis | Level 1 | Cash equivalents | ||
Financial Assets | ||
Total financial assets | 3,100 | |
Recurring basis | Level 1 | Other assets | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 1 | Assets held in separate accounts | ||
Financial Assets | ||
Total financial assets | 1,370,900 | 1,600,800 |
Recurring basis | Level 2 | ||
Financial Assets | ||
Total financial assets | 1,026,100 | 1,104,000 |
Financial Liabilities | ||
Liabilities related to separate accounts | 73,900 | 43,500 |
Recurring basis | Level 2 | Fixed maturity securities | U.S. government and government agencies and authorities | ||
Financial Assets | ||
Total financial assets | 10,900 | 3,200 |
Recurring basis | Level 2 | Fixed maturity securities | States, municipalities and political subdivisions | ||
Financial Assets | ||
Total financial assets | 13,900 | 5,600 |
Recurring basis | Level 2 | Fixed maturity securities | Foreign governments | ||
Financial Assets | ||
Total financial assets | 9,600 | 10,500 |
Recurring basis | Level 2 | Fixed maturity securities | Asset-backed | ||
Financial Assets | ||
Total financial assets | 78,700 | 24,300 |
Recurring basis | Level 2 | Fixed maturity securities | Commercial mortgage-backed | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 2 | Fixed maturity securities | Residential mortgage-backed | ||
Financial Assets | ||
Total financial assets | 38,200 | 41,700 |
Recurring basis | Level 2 | Fixed maturity securities | U.S. corporate | ||
Financial Assets | ||
Total financial assets | 587,000 | 741,900 |
Recurring basis | Level 2 | Fixed maturity securities | Foreign corporate | ||
Financial Assets | ||
Total financial assets | 134,100 | 148,600 |
Recurring basis | Level 2 | Equity securities | Common Stock | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 2 | Equity securities | Non-redeemable preferred stocks | ||
Financial Assets | ||
Total financial assets | 79,800 | 84,700 |
Recurring basis | Level 2 | Other investments | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 2 | Other assets | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 2 | Assets held in separate accounts | ||
Financial Assets | ||
Total financial assets | 73,900 | 43,500 |
Recurring basis | Level 3 | ||
Financial Assets | ||
Total financial assets | 12,700 | 18,800 |
Financial Liabilities | ||
Liabilities related to separate accounts | 0 | 0 |
Recurring basis | Level 3 | Fixed maturity securities | U.S. government and government agencies and authorities | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 3 | Fixed maturity securities | States, municipalities and political subdivisions | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 3 | Fixed maturity securities | Foreign governments | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 3 | Fixed maturity securities | Asset-backed | ||
Financial Assets | ||
Total financial assets | 0 | 4,700 |
Recurring basis | Level 3 | Fixed maturity securities | Commercial mortgage-backed | ||
Financial Assets | ||
Total financial assets | 3,300 | 3,300 |
Recurring basis | Level 3 | Fixed maturity securities | Residential mortgage-backed | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 3 | Fixed maturity securities | U.S. corporate | ||
Financial Assets | ||
Total financial assets | 0 | 200 |
Recurring basis | Level 3 | Fixed maturity securities | Foreign corporate | ||
Financial Assets | ||
Total financial assets | 8,200 | 9,300 |
Recurring basis | Level 3 | Equity securities | Common Stock | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 3 | Equity securities | Non-redeemable preferred stocks | ||
Financial Assets | ||
Total financial assets | 1,100 | 1,100 |
Recurring basis | Level 3 | Other investments | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Recurring basis | Level 3 | Other assets | ||
Financial Assets | ||
Total financial assets | 100 | 200 |
Recurring basis | Level 3 | Assets held in separate accounts | ||
Financial Assets | ||
Total financial assets | 0 | 0 |
Total | ||
Financial Assets | ||
Total financial assets | 61,700 | 89,600 |
Total | Recurring basis | ||
Financial Assets | ||
Total financial assets | 2,431,300 | 2,730,600 |
Financial Liabilities | ||
Liabilities related to separate accounts | 1,444,800 | 1,644,300 |
Total | Recurring basis | Fixed maturity securities | U.S. government and government agencies and authorities | ||
Financial Assets | ||
Total financial assets | 10,900 | 3,200 |
Total | Recurring basis | Fixed maturity securities | States, municipalities and political subdivisions | ||
Financial Assets | ||
Total financial assets | 13,900 | 5,600 |
Total | Recurring basis | Fixed maturity securities | Foreign governments | ||
Financial Assets | ||
Total financial assets | 9,600 | 10,500 |
Total | Recurring basis | Fixed maturity securities | Asset-backed | ||
Financial Assets | ||
Total financial assets | 78,700 | 29,000 |
Total | Recurring basis | Fixed maturity securities | Commercial mortgage-backed | ||
Financial Assets | ||
Total financial assets | 3,300 | 3,300 |
Total | Recurring basis | Fixed maturity securities | Residential mortgage-backed | ||
Financial Assets | ||
Total financial assets | 38,200 | 41,700 |
Total | Recurring basis | Fixed maturity securities | U.S. corporate | ||
Financial Assets | ||
Total financial assets | 587,000 | 742,100 |
Total | Recurring basis | Fixed maturity securities | Foreign corporate | ||
Financial Assets | ||
Total financial assets | 142,300 | 157,900 |
Total | Recurring basis | Equity securities | Common Stock | ||
Financial Assets | ||
Total financial assets | 400 | 600 |
Total | Recurring basis | Equity securities | Non-redeemable preferred stocks | ||
Financial Assets | ||
Total financial assets | 80,900 | 85,800 |
Total | Recurring basis | Other investments | ||
Financial Assets | ||
Total financial assets | 18,100 | 6,400 |
Total | Recurring basis | Cash equivalents | ||
Financial Assets | ||
Total financial assets | 3,100 | |
Total | Recurring basis | Other assets | ||
Financial Assets | ||
Total financial assets | 100 | 200 |
Total | Recurring basis | Assets held in separate accounts | ||
Financial Assets | ||
Total financial assets | $ 1,444,800 | $ 1,644,300 |
Fair Value Disclosures - Summar
Fair Value Disclosures - Summary of the Change in Balance Sheet Carrying Value Associated with Level 3 Financial Assets Carried at Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | $ 18.8 | $ 18.2 |
Total (losses) gains (realized/unrealized) included in earnings | (0.1) | 0.1 |
Net unrealized gains (losses) included in other comprehensive income | (0.5) | 0.1 |
Purchases | 24.6 | 29 |
Sales | (4.4) | (8.6) |
Transfers in | 0.1 | 0.3 |
Transfers out | (25.8) | (20.3) |
Balance, end of period | 12.7 | 18.8 |
Other assets | ||
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | 0.2 | 0.3 |
Total (losses) gains (realized/unrealized) included in earnings | (0.1) | (0.1) |
Net unrealized gains (losses) included in other comprehensive income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | 0 | 0 |
Balance, end of period | 0.1 | 0.2 |
States, municipalities and political subdivisions | ||
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | 4.7 | 0 |
Total (losses) gains (realized/unrealized) included in earnings | 0 | 0.1 |
Net unrealized gains (losses) included in other comprehensive income | 0 | (0.1) |
Purchases | 23.9 | 29 |
Sales | (3) | (7.4) |
Transfers in | 0 | 0 |
Transfers out | (25.6) | (16.9) |
Balance, end of period | 0 | 4.7 |
Commercial mortgage-backed | ||
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | 3.3 | 3.2 |
Total (losses) gains (realized/unrealized) included in earnings | 0.1 | 0.1 |
Net unrealized gains (losses) included in other comprehensive income | (0.1) | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | 0 | 0 |
Balance, end of period | 3.3 | 3.3 |
U.S. corporate | ||
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | 0.2 | 3.6 |
Total (losses) gains (realized/unrealized) included in earnings | 0 | 0 |
Net unrealized gains (losses) included in other comprehensive income | 0 | 0.3 |
Purchases | 0.7 | 0 |
Sales | (0.8) | (0.6) |
Transfers in | 0.1 | 0.3 |
Transfers out | (0.2) | (3.4) |
Balance, end of period | 0 | 0.2 |
Foreign corporate | ||
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | 9.3 | 10 |
Total (losses) gains (realized/unrealized) included in earnings | (0.1) | 0 |
Net unrealized gains (losses) included in other comprehensive income | (0.4) | (0.1) |
Purchases | 0 | 0 |
Sales | (0.6) | (0.6) |
Transfers in | 0 | 0 |
Transfers out | 0 | 0 |
Balance, end of period | 8.2 | 9.3 |
Non-redeemable preferred stocks | ||
Changes in balance sheet carrying value associated with Level 3 financial assets carried at fair value | ||
Balance, beginning of period | 1.1 | 1.1 |
Total (losses) gains (realized/unrealized) included in earnings | 0 | 0 |
Net unrealized gains (losses) included in other comprehensive income | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | 0 | 0 |
Balance, end of period | $ 1.1 | $ 1.1 |
Fair Value Disclosures - Narrat
Fair Value Disclosures - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Transfers between level 1 and level 2 financial assets during the period | $ 0 | $ 0 | |
Level 3 fixed maturity and equity securities | 12,700 | 18,800 | $ 18,200 |
Single Broker Quote | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Level 3 fixed maturity and equity securities | 200 | ||
Independent and Non-Binding Broker Quotes | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Level 3 fixed maturity and equity securities | $ 12,600 | $ 18,400 |
Fair Value Disclosures - Sche_2
Fair Value Disclosures - Schedule of Carrying Value, Fair Value Amount and Hierarchy Level of the Financial Instruments That Are Not Recognized or Are Not Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Commercial mortgage loans on real estate | $ 54.6 | $ 78.7 |
Policy loans | 6 | 6.7 |
Level 1 | ||
Financial assets: | ||
Commercial mortgage loans on real estate | 0 | 0 |
Policy loans | 6 | 6.7 |
Other investments | 0 | 0 |
Total financial assets | 6 | 6.7 |
Financial liabilities: | ||
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) | 0 | 0 |
Level 2 | ||
Financial assets: | ||
Commercial mortgage loans on real estate | 0 | 0 |
Policy loans | 0 | 0 |
Other investments | 0 | 0 |
Total financial assets | 0 | 0 |
Financial liabilities: | ||
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) | 0 | 0 |
Level 3 | ||
Financial assets: | ||
Commercial mortgage loans on real estate | 55.5 | 82.7 |
Policy loans | 0 | 0 |
Other investments | 0.2 | 0.2 |
Total financial assets | 55.7 | 82.9 |
Financial liabilities: | ||
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) | 209.1 | 227.5 |
Carrying Value | ||
Financial assets: | ||
Commercial mortgage loans on real estate | 54.6 | 78.7 |
Policy loans | 6 | 6.7 |
Other investments | 0.2 | 0.2 |
Total financial assets | 60.8 | 85.6 |
Financial liabilities: | ||
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) | 203.5 | 210.5 |
Total | ||
Financial assets: | ||
Commercial mortgage loans on real estate | 55.5 | 82.7 |
Policy loans | 6 | 6.7 |
Other investments | 0.2 | 0.2 |
Total financial assets | 61.7 | 89.6 |
Financial liabilities: | ||
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) | $ 209.1 | $ 227.5 |
Income Taxes Income Taxes - Sch
Income Taxes Income Taxes - Schedule of Company's Current and Deferred Federal Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current expense (benefit) | $ 9.5 | $ (3.3) | $ 271.4 |
Deferred expense (benefit) | 7.2 | 49.5 | (65.2) |
Total income tax expense | $ 16.7 | $ 46.2 | $ 206.2 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of the Federal Income Tax Rate to the Company's Effective Income Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the federal income tax rate to the Company's effective income tax rate | |||
Federal income tax rate: | 21.00% | 35.00% | 35.00% |
Reconciling items: | |||
Dividends-received deduction | (0.80%) | (1.20%) | (0.30%) |
TCJA impacts (1) | 0.50% | 3.60% | 0.00% |
Capital contribution from affiliated entity impacting taxable income | 0.00% | 0.00% | 3.70% |
Goodwill | 0.00% | 0.00% | 1.20% |
Nondeductible health insurer fee | 0.00% | 0.00% | 0.50% |
Change in liability for prior years' taxes | 0.00% | (0.50%) | 0.00% |
Other | (0.30%) | 0.10% | (0.10%) |
Effective income tax rate | 20.40% | 37.00% | 40.00% |
Provision from the reduction of net deferred tax assets from enactment of Tax Cuts and Jobs Act | $ 4.5 | ||
Unrecognized tax benefits (less than, for 2017 and 2016, respectively) | $ 2.4 | $ 1 | $ 1 |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Deferred gain on disposal of businesses | $ 10,800,000 | $ 22,000,000 |
Deferred acquisition costs | 14,200,000 | 13,300,000 |
Investments, net | 5,000,000 | 5,700,000 |
Policyholder and separate account reserves | 8,900,000 | 7,100,000 |
Employee benefits | 2,800,000 | 2,800,000 |
Total deferred tax asset | 41,700,000 | 50,900,000 |
Deferred tax liabilities: | ||
Net unrealized gains on securities | (24,100,000) | (42,600,000) |
Other | (800,000) | (1,400,000) |
Total deferred tax liability | (24,900,000) | (44,000,000) |
Net deferred income tax assets | 16,800,000 | $ 6,900,000 |
Cumulative valuation allowance against deferred tax assets | 0 | |
Net operating or capital loss carryforwards | $ 0 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Equity [Abstract] | ||||
Authorized shares of common stock (in shares) | 1,000,000 | 1,000,000 | ||
Common stock, par value (in dollars per share) | $ 5 | $ 5 | ||
Common stock, shares issued (in shares) | 1,000,000 | 1,000,000 | ||
Common stock, shares outstanding (in shares) | 1,000,000 | 1,000,000 | ||
Dividends paid | $ 15 | $ 61 | $ 890 | |
Cash dividends paid | 15 | 1.9 | 379.4 | |
Investments dividends paid | 59.1 | 510.6 | ||
Capital contribution from affiliated entity | [1] | $ 0 | $ 0 | $ 54.3 |
[1] | Related to the sale of Assurant Employee Benefits segment mainly through reinsurance transactions. The capital contribution from the affiliated entity is related to the difference in contractual and allocated consideration attributable to that entity. |
Statutory Information - Schedul
Statutory Information - Schedule of Statutory Net Income and Capital and Surplus (Details) - Kansas Department of Commerce - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income | $ 90 | $ 106.2 | $ 481.7 |
Statutory capital and surplus | $ 126.3 | $ 113.9 | $ 158.5 |
Statutory Information - Narrati
Statutory Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Accounting Practices [Line Items] | |||
Dividends paid | $ 15 | $ 1.9 | $ 379.4 |
Kansas Department of Commerce | |||
Statutory Accounting Practices [Line Items] | |||
Dividends paid | |||
Minimum dividend as percentage of insurers' surplus to be considered as extraordinary dividend | 10.00% | ||
RBC ratio under Authorized Control Level | 100.00% | ||
TAC of the Company subject to RBC Requirements | $ 136.3 | ||
Corresponding authorized control | $ 23.7 | ||
Kansas Department of Commerce | Minimum | |||
Statutory Accounting Practices [Line Items] | |||
RBC ratio under Company Action Level | 100.00% | ||
Kansas Department of Commerce | Maximum | |||
Statutory Accounting Practices [Line Items] | |||
RBC ratio under Company Action Level | 200.00% |
Reinsurance - Schedule of Reins
Reinsurance - Schedule of Reinsurance Recoverables (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Reinsurance Disclosures [Abstract] | ||
Ceded future policyholder benefits and expenses | $ 2,103.2 | $ 2,130 |
Ceded unearned premium | 24.4 | 27.1 |
Ceded claims and benefits payable | 1,179.2 | 1,254.7 |
Ceded paid losses | 16.4 | 12.7 |
Total | $ 3,323.2 | $ 3,424.5 |
Reinsurance - Schedule of Rei_2
Reinsurance - Schedule of Reinsurance Recoverables by A.M. Best Rating (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | $ 3,323.2 | $ 3,424.5 |
A Plus Plus or A Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 2,732.1 | |
A or A Minus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 67.2 | |
B Plus Plus or B Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 523.5 | |
Not rated | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0.4 | |
Ceded future policyholder benefits and expense | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 2,103.2 | |
Ceded future policyholder benefits and expense | A Plus Plus or A Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 1,533 | |
Ceded future policyholder benefits and expense | A or A Minus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 65.8 | |
Ceded future policyholder benefits and expense | B Plus Plus or B Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 504 | |
Ceded future policyholder benefits and expense | Not rated | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0.4 | |
Ceded unearned premiums | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 24.4 | |
Ceded unearned premiums | A Plus Plus or A Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 24.1 | |
Ceded unearned premiums | A or A Minus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0.2 | |
Ceded unearned premiums | B Plus Plus or B Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0.1 | |
Ceded unearned premiums | Not rated | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0 | |
Ceded claims and benefits payable | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 1,179.2 | |
Ceded claims and benefits payable | A Plus Plus or A Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 1,158.9 | |
Ceded claims and benefits payable | A or A Minus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 1.2 | |
Ceded claims and benefits payable | B Plus Plus or B Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 19.1 | |
Ceded claims and benefits payable | Not rated | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0 | |
Ceded paid losses | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 16.4 | |
Ceded paid losses | A Plus Plus or A Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 16.1 | |
Ceded paid losses | A or A Minus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0 | |
Ceded paid losses | B Plus Plus or B Plus | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 0.3 | |
Ceded paid losses | Not rated | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | $ 0 |
Reinsurance Reinsurance - Sched
Reinsurance Reinsurance - Schedule of Reinsurance Recoverable by Reinsurer (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Reinsurance Retention Policy [Line Items] | ||
Reinsurance recoverables | $ 3,323.2 | $ 3,424.5 |
John Hancock | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance recoverables | 1,992.7 | 1,952.7 |
Sun Life | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance recoverables | 737.6 | 851.9 |
Talcott Resolution [Member] | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance recoverables | 523.5 | 549.6 |
Other reinsurers | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance recoverables | $ 69.4 | $ 70.3 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)reinsurer | Dec. 31, 2017USD ($) | |
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 3,323.2 | $ 3,424.5 |
Invested assets held in trusts | $ 392.9 | 423.7 |
Number of reinsurers' insolvency for making company responsible for administering reinsurance business | reinsurer | 1 | |
Largest Reinsurance Recoverable Balances | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 3,250 | |
John Hancock | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | 1,992.7 | $ 1,952.7 |
John Hancock | Reinsurance invested assets | ||
Ceded Credit Risk [Line Items] | ||
Assets held in trust | $ 2,000 |
Reinsurance - Schedule of Effec
Reinsurance - Schedule of Effect of Reinsurance on Premiums Earned and Benefits Incurred (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Life Insurance in Force | |||
Direct earned premiums | $ 750.4 | $ 954.9 | $ 1,021.7 |
Premiums assumed | 4.6 | 4.3 | 58.8 |
Premiums ceded | (750.2) | (953.7) | (900.2) |
Net earned premiums | 4.8 | 5.5 | 180.3 |
Direct policyholder benefits | 763.3 | 853.1 | 1,242.7 |
Policyholder benefits assumed | 14.4 | 13.4 | 41.1 |
Policyholder benefits ceded | (714.6) | (807.9) | (1,131.1) |
Net policyholder benefits | 63.1 | 58.6 | 152.7 |
Long Duration | |||
Life Insurance in Force | |||
Direct earned premiums | 182.2 | 198 | 213.7 |
Premiums assumed | 3.2 | 3.6 | 4.6 |
Premiums ceded | (180.6) | (196.1) | (200.6) |
Net earned premiums | 4.8 | 5.5 | 17.7 |
Direct policyholder benefits | 399.6 | 413.6 | 695.8 |
Policyholder benefits assumed | 14.4 | 13.4 | 15.5 |
Policyholder benefits ceded | (350.9) | (372.3) | (672.2) |
Net policyholder benefits | 63.1 | 54.7 | 39.1 |
Short Duration | |||
Life Insurance in Force | |||
Direct earned premiums | 568.2 | 756.9 | 808 |
Premiums assumed | 1.4 | 0.7 | 54.2 |
Premiums ceded | (569.6) | (757.6) | (699.6) |
Net earned premiums | 0 | 0 | 162.6 |
Direct policyholder benefits | 363.7 | 439.5 | 546.9 |
Policyholder benefits assumed | 0 | 0 | 25.6 |
Policyholder benefits ceded | (363.7) | (435.6) | (458.9) |
Net policyholder benefits | $ 0 | $ 3.9 | $ 113.6 |
Reinsurance Reinsurance - Reins
Reinsurance Reinsurance - Reinsurance Recoverables (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | $ 3,323.2 | $ 3,424.5 |
John Hancock | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 1,992.7 | 1,952.7 |
The Hartford | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | 737.6 | 851.9 |
Other reinsurers | ||
Ceded Credit Risk [Line Items] | ||
Total Reinsurance recoverable | $ 69.4 | $ 70.3 |
Reserves - Narrative (Details)
Reserves - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2007 | Dec. 31, 2016 | |
Claims and Benefits Payable | ||||
Favorable development | $ 0.1 | |||
Assurant Health and AEB | ||||
Claims and Benefits Payable | ||||
Favorable development | $ 39.9 | |||
Universal Life and Annuity | ||||
Claims and Benefits Payable | ||||
Interest rates credited on annuities at guarantee rates | 4.50% | |||
Universal Life and Annuity | Minimum | ||||
Claims and Benefits Payable | ||||
Interest rates credited on annuities at guarantee rates | 3.50% | |||
Universal Life and Annuity | Maximum | ||||
Claims and Benefits Payable | ||||
Interest rates credited on annuities at guarantee rates | 4.00% | |||
Universal Life | ||||
Claims and Benefits Payable | ||||
Crediting interest rates at guaranteed rates | 0.00% | |||
Universal Life | Minimum | ||||
Claims and Benefits Payable | ||||
Crediting interest rates at guaranteed rates | 4.00% | |||
Universal Life | Maximum | ||||
Claims and Benefits Payable | ||||
Crediting interest rates at guaranteed rates | 4.10% | |||
Surrender charge grading period | 20 years | |||
Global Preneed | Preneed life insurance | ||||
Claims and Benefits Payable | ||||
Future policy benefit increases tied to inflation (as a percent) | 3.00% | 3.00% | 2.30% | |
Global Preneed | Preneed life insurance | Minimum | ||||
Claims and Benefits Payable | ||||
Interest rate assumption | 4.70% | 4.70% | ||
Percentage of adverse deviation in interest and discount rate for preneed life insurance | 0.20% | 0.20% | ||
Future policy benefit increases | 1.00% | 1.00% | ||
Global Preneed | Preneed life insurance | Maximum | ||||
Claims and Benefits Payable | ||||
Interest rate assumption | 7.30% | 7.30% | ||
Percentage of adverse deviation in interest and discount rate for preneed life insurance | 0.50% | 0.50% | ||
Future policy benefit increases | 7.00% | 7.00% | ||
Global Preneed | Life insurance no longer offered | ||||
Claims and Benefits Payable | ||||
Period of grading of interest and discount rates | 20 years | |||
Global Preneed | Life insurance no longer offered | Minimum | ||||
Claims and Benefits Payable | ||||
Discount rate | 5.30% | 5.30% | ||
Period of grading of interest and discount rates | 20 years | |||
Global Preneed | Life insurance no longer offered | Maximum | ||||
Claims and Benefits Payable | ||||
Discount rate | 7.50% | 7.50% | ||
Global Preneed | Block of pre-1980 traditional life insurance business | ||||
Claims and Benefits Payable | ||||
Discount rate | 8.80% | 8.80% | ||
Global Preneed | Preneed annuities | Minimum | ||||
Claims and Benefits Payable | ||||
Surrender charge grading period | 0 years | |||
Interest rate assumption | 1.00% | 1.00% | ||
Withdrawal charge percentage | 0.00% | 0.00% | ||
Global Preneed | Preneed annuities | Maximum | ||||
Claims and Benefits Payable | ||||
Surrender charge grading period | 7 years | 7 years | ||
Interest rate assumption | 5.50% | 5.50% | ||
Withdrawal charge percentage | 7.00% | 7.00% |
Reserves - Schedule of Most Sig
Reserves - Schedule of Most Significant Claims and Benefits Payable (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Claims and benefits payable, at beginning of year | $ 1,266.1 | $ 1,412.9 | $ 1,719.9 | |
Less: Reinsurance ceded and other | (1,179.2) | (1,255.1) | (1,401.8) | $ (384.3) |
Net claims and benefits payable, at beginning of year | 11 | 11.1 | 1,335.6 | |
Incurred losses and loss adjustment expenses related to: | ||||
Current year | 63.4 | 32 | 181.6 | |
Prior year's interest | 0 | 0 | 9.4 | |
Prior years | 0 | (0.1) | (40.4) | |
Total incurred losses and loss adjustment expenses | 63.4 | 31.9 | 150.6 | |
Paid losses and loss adjustment expenses related to: | ||||
Current year | 56.6 | 29 | 177.2 | |
Prior years | 6.5 | 3 | 1,297.9 | |
Total paid losses and loss adjustment expenses | 63.1 | 32 | 1,475.1 | |
Net claims and benefits payable, at end of year | 11.3 | 11 | 11.1 | |
Plus: Reinsurance ceded and other | 1,179.2 | 1,255.1 | 1,401.8 | $ 384.3 |
Claims and benefits payable, at end of year | $ 1,190.5 | $ 1,266.1 | $ 1,412.9 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Schedule of Components of Accumulated Other Comprehensive Income, Net of Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||||
Balance at the beginning of the period | $ 207 | $ 164.6 | $ 770.6 | ||
Change in other comprehensive income before reclassifications | (60.6) | 28.4 | 16.8 | ||
Amounts reclassified from accumulated other comprehensive income | (3.9) | (3.9) | (96.6) | ||
Net current-period other comprehensive income (loss) | (64.5) | 24.5 | (79.8) | ||
Balance at the end of the period | 192.5 | 207 | 164.6 | ||
Unrealized gains on securities | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||||
Balance at the beginning of the period | 119 | 95.1 | 174.2 | ||
Change in other comprehensive income before reclassifications | (58.2) | 27.8 | 17.1 | ||
Amounts reclassified from accumulated other comprehensive income | (3.9) | (3.9) | (96.2) | ||
Net current-period other comprehensive income (loss) | (62.1) | 23.9 | (79.1) | ||
Cumulative effect of change in accounting principles | $ 16.6 | ||||
Balance at the end of the period | 73.5 | 119 | 95.1 | ||
OTTI | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||||
Balance at the beginning of the period | 9.2 | 8.6 | 9.3 | ||
Change in other comprehensive income before reclassifications | (2.4) | 0.6 | (0.3) | ||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | (0.4) | ||
Net current-period other comprehensive income (loss) | (2.4) | 0.6 | (0.7) | ||
Cumulative effect of change in accounting principles | 2 | ||||
Balance at the end of the period | 8.8 | 9.2 | 8.6 | ||
Accumulated Other Comprehensive Income | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||||
Balance at the beginning of the period | 128.2 | 103.7 | 183.5 | ||
Cumulative effect of change in accounting principles | [1] | $ 18.6 | |||
Balance at the end of the period | $ 82.3 | $ 128.2 | $ 103.7 | ||
[1] | Amounts relate to: (i) the requirement to recognize the changes in fair value of equity securities directly within income (resulting in a reclassification of unrealized gains as of January 1, 2018 between accumulated other comprehensive income (“AOCI”) and retained earnings); and (ii) the reclassification from AOCI to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. See Note 2 for additional information. |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Summary of the Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amount reclassified from accumulated other comprehensive income | |||
Net realized gains on investments, excluding other-than-temporary impairment losses | $ (1.4) | $ 9.8 | $ 165.1 |
Provision for income taxes | (16.7) | (46.2) | (206.2) |
Portion of net (gain) loss recognized in other comprehensive income, before taxes | 0 | 0 | 0.2 |
Net of tax | 65 | 78.9 | 309.5 |
Reclassified from accumulated other comprehensive income | |||
Amount reclassified from accumulated other comprehensive income | |||
Net of tax | (3.9) | (3.9) | (96.6) |
Reclassified from accumulated other comprehensive income | Unrealized gains on securities | |||
Amount reclassified from accumulated other comprehensive income | |||
Net realized gains on investments, excluding other-than-temporary impairment losses | (4.9) | (6) | (148) |
Provision for income taxes | 1 | 2.1 | 51.8 |
Net of tax | (3.9) | (3.9) | (96.2) |
Reclassified from accumulated other comprehensive income | OTTI | |||
Amount reclassified from accumulated other comprehensive income | |||
Provision for income taxes | 0 | 0 | 0.2 |
Portion of net (gain) loss recognized in other comprehensive income, before taxes | 0 | 0 | (0.6) |
Net of tax | $ 0 | $ 0 | $ (0.4) |
Related Party Transactions (Det
Related Party Transactions (Details) - Parent and its affiliates - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related party transactions | |||
Net fees paid for services provided | $ 4.9 | $ 8.9 | $ 23.1 |
Tax payment related to disposal | $ 4.4 | $ 3.1 | $ 272.8 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense under operating lease | $ 3.5 | $ 4.1 | |
Sublease income | $ 4.1 | $ 4.1 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments Other-Than-Investments in Related Parties (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | $ 955.2 | |
Fair Value | 1,071.7 | |
Amount at which shown in balance sheet | 1,070.8 | $ 1,204.8 |
Fixed maturity securities | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 774 | |
Fair Value | 883.9 | |
Amount at which shown in balance sheet | 883.9 | |
U.S. government and government agencies and authorities | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 10.8 | |
Fair Value | 10.9 | |
Amount at which shown in balance sheet | 10.9 | |
States, municipalities and political subdivisions | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 13 | |
Fair Value | 13.9 | |
Amount at which shown in balance sheet | 13.9 | |
Foreign governments | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 8.4 | |
Fair Value | 9.6 | |
Amount at which shown in balance sheet | 9.6 | |
Asset-backed | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 80.4 | |
Fair Value | 78.7 | |
Amount at which shown in balance sheet | 78.7 | |
Commercial mortgage-backed | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 3.5 | |
Fair Value | 3.3 | |
Amount at which shown in balance sheet | 3.3 | |
Residential mortgage-backed | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 37 | |
Fair Value | 38.2 | |
Amount at which shown in balance sheet | 38.2 | |
U.S. corporate | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 497.8 | |
Fair Value | 587 | |
Amount at which shown in balance sheet | 587 | |
Foreign corporate | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 123.1 | |
Fair Value | 142.3 | |
Amount at which shown in balance sheet | 142.3 | |
Equity securities | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 75.6 | |
Fair Value | 81.3 | |
Amount at which shown in balance sheet | 81.3 | |
Common Stock | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 0.1 | |
Fair Value | 0.4 | |
Amount at which shown in balance sheet | 0.4 | |
Non-redeemable preferred stocks | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 75.5 | |
Fair Value | 80.9 | |
Amount at which shown in balance sheet | 80.9 | |
Commercial mortgage loans on real estate | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 54.6 | |
Fair Value | 55.5 | |
Amount at which shown in balance sheet | 54.6 | |
Policy loans | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 6 | |
Fair Value | 6 | |
Amount at which shown in balance sheet | 6 | |
Other investments | ||
Summary of Investments Other-Than-Investments in Related Parties | ||
Cost or Amortized Cost | 45 | |
Fair Value | 45 | |
Amount at which shown in balance sheet | $ 45 |
Schedule III-Supplementary Insu
Schedule III-Supplementary Insurance Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |||
Future policy benefits and expenses | $ 2,914.1 | $ 2,992.9 | $ 3,068.1 |
Unearned premiums | 49.9 | 54.5 | 28.1 |
Claims and benefits payable | 1,190.5 | 1,266.1 | 1,412.9 |
Premium revenues | 4.8 | 5.5 | 180.3 |
Net investment income | 64.6 | 64.2 | 97.8 |
Benefits claims, losses and settlement expenses | 63.1 | 58.6 | 152.7 |
Other operating expenses | $ 9.9 | $ 22.5 | $ 143.8 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Life Insurance in Force | |||
Direct amount | $ 38,709.9 | $ 59,075 | $ 68,173.9 |
Ceded to other Companies | 38,055.1 | 58,373.3 | 68,066.3 |
Assumed from other Companies | 514.2 | 549.4 | 1,232.5 |
Net amount | $ 1,169 | $ 1,251.1 | $ 1,340.1 |
Percentage of amount assumed to net | 44.00% | 43.90% | 92.00% |
Premiums: | |||
Direct amount | $ 750.4 | $ 954.9 | $ 1,021.7 |
Ceded to other Companies | 750.2 | 953.7 | 900.2 |
Assumed from other Companies | 4.6 | 4.3 | 58.8 |
Net earned premiums | $ 4.8 | $ 5.5 | $ 180.3 |
Percentage of amount assumed to net | 95.80% | 78.20% | 32.60% |
Benefits: | |||
Direct policyholder benefits | $ 763.3 | $ 853.1 | $ 1,242.7 |
Ceded to other Companies | 714.6 | 807.9 | 1,131.1 |
Assumed from other Companies | 14.4 | 13.4 | 41.1 |
Net policyholder benefits | $ 63.1 | $ 58.6 | $ 152.7 |
Percentage of amount assumed to net | 22.80% | 22.90% | 26.90% |
Life insurance | |||
Premiums: | |||
Direct amount | $ 185.8 | $ 239.4 | $ 269.6 |
Ceded to other Companies | 184.3 | 237.3 | 234.8 |
Assumed from other Companies | 2.9 | 3.1 | 5.9 |
Net earned premiums | $ 4.4 | $ 5.2 | $ 40.7 |
Percentage of amount assumed to net | 65.90% | 59.60% | 14.50% |
Benefits: | |||
Direct policyholder benefits | $ 294.6 | $ 345.6 | $ 379.6 |
Ceded to other Companies | 246 | 304.3 | 341 |
Assumed from other Companies | 13.9 | 13.1 | 16.3 |
Net policyholder benefits | $ 62.5 | $ 54.4 | $ 54.9 |
Percentage of amount assumed to net | 22.20% | 24.10% | 29.70% |
Accident and health insurance | |||
Premiums: | |||
Direct amount | $ 564.6 | $ 715.5 | $ 752.1 |
Ceded to other Companies | 565.9 | 716.4 | 665.4 |
Assumed from other Companies | 1.7 | 1.2 | 52.9 |
Net earned premiums | $ 0.4 | $ 0.3 | $ 139.6 |
Percentage of amount assumed to net | 425.00% | 400.00% | 37.90% |
Benefits: | |||
Direct policyholder benefits | $ 468.7 | $ 507.5 | $ 863.1 |
Ceded to other Companies | 468.6 | 503.6 | 790.1 |
Assumed from other Companies | 0.5 | 0.3 | 24.8 |
Net policyholder benefits | $ 0.6 | $ 4.2 | $ 97.8 |
Percentage of amount assumed to net | 83.30% | 7.10% | 25.40% |
Schedule V - Valuation and Qu_2
Schedule V - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Year | $ 0.4 | $ 7.1 | $ 5.4 |
Charged to Costs and Expenses | (0.4) | (6.7) | 1.7 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | 0 | 0.4 | 7.1 |
Valuation allowance for mortgage loans on real estate | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Year | 0.4 | 1.7 | 1.1 |
Charged to Costs and Expenses | (0.4) | (1.3) | 0.6 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | 0 | 0.4 | 1.7 |
Valuation allowance for uncollectible agents balances | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Year | 0 | 4.3 | 4.3 |
Charged to Costs and Expenses | 0 | (4.3) | 0 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | 0 | 0 | 4.3 |
Valuation allowance for uncollectible accounts | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Year | 0 | 1 | 0 |
Charged to Costs and Expenses | 0 | (1) | 1 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | 0 | 0 | 1 |
Valuation allowance for reinsurance recoverables | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Year | 0 | 0.1 | 0 |
Charged to Costs and Expenses | 0 | (0.1) | 0.1 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | $ 0 | $ 0 | $ 0.1 |