DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Document and Entity Information [Abstract] | |
Document Type | POS AM |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | true |
Entity Registrant Name | MONY LIFE INSURANCE CO OF AMERICA |
Entity Central Index Key | 0000835357 |
Entity Filer Category | Non-accelerated Filer |
Amendment Description | This Amendment No.1 to Form S-1 is being filed to register an additional dollar amount of interests in the MLOA MSO and to carry forward the total dollar amount of unsold interests under the MSO previously registered |
BALANCE SHEETS - STATUTORY BASI
BALANCE SHEETS - STATUTORY BASIS - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and invested assets: | ||
Cash, cash equivalents and short-term investments | $ 48.8 | $ 37.7 |
Fixed maturities | 1,069.7 | 1,025.6 |
Common stocks | 55 | 48.6 |
Mortgage loans | 17 | 17 |
Policy loans | 109.9 | 57.2 |
Derivatives and other invested assets | 19.7 | 89.3 |
Total invested assets | 1,320.1 | 1,275.4 |
Investment due and accrued | 11.3 | 9.6 |
Net deferred tax asset | 14.3 | 10.5 |
Other assets | 78.3 | 12.3 |
Separate Accounts assets | 2,280.8 | 2,427.3 |
Total assets | 3,704.8 | 3,735.1 |
Liabilities [Abstract] | ||
Policy reserves and deposit type-funds | 1,311.8 | 1,028.8 |
Policy and contract claims | 22.1 | 14.3 |
Transfer to (from) Separate Accounts due and accrued | (193.1) | (185.8) |
Asset valuation reserve | 15.8 | 14.9 |
Amounts withheld by company as agent | 11.6 | 93.5 |
Other liabilities | 51.5 | 74 |
Separate Accounts liabilities | 2,262.7 | 2,408.4 |
Total liabilities | 3,482.4 | 3,448.1 |
Commitments and contingencies (Note 10) | ||
Capital and surplus: | ||
Common stock, $1.00 per share par value, 5,000,000 shares authorized, 2,500,000 million shares issued and outstanding | 2.5 | 2.5 |
Paid-in surplus | 463.2 | 393.2 |
Unassigned surplus (deficit) | (243.3) | (108.7) |
Total capital and surplus | 222.4 | 287 |
Total liabilities and capital and surplus | $ 3,704.8 | $ 3,735.1 |
BALANCE SHEETS - STATUTORY BA_2
BALANCE SHEETS - STATUTORY BASIS (PARENTHETICALS) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Common stock, shares issued (in shares) | 2,500,000 | 2,500,000 |
Common stock, shares outstanding (in shares) | 2,500,000 | 2,500,000 |
STATEMENTS OF OPERATIONS - STAT
STATEMENTS OF OPERATIONS - STATUTORY BASIS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PREMIUMS AND OTHER REVENUES: | |||
Premiums and annuity considerations | $ 591.4 | $ 519.4 | $ 457.9 |
Net investment income | 49.2 | 40.2 | 33.2 |
Commission and expense allowance on reinsurance ceded | 25.1 | 27.4 | 26.6 |
Income from fees associated with Separate Accounts | 49.1 | 49.5 | 49.4 |
Other income | 1.9 | 2.5 | 2.2 |
Total premiums and other revenues | 716.7 | 639 | 569.3 |
BENEFITS AND EXPENSES: | |||
Policyholder benefits | 127.8 | 88.8 | 90 |
Increase (decrease) in reserves | 282.2 | 253.9 | 205.5 |
Separate Accounts’ modified coinsurance reinsurance | 110.6 | 110.2 | 120.6 |
Commissions | 118 | 109.9 | 103 |
Operating expenses | 147.8 | 150.2 | 143.7 |
Transfer to or (from) Separate Accounts, net | 12.5 | (17.3) | (62.6) |
Total benefits and expenses | 798.9 | 695.7 | 600.2 |
Net gain (loss) from operations before federal income taxes (FIT) | (82.2) | (56.7) | (30.9) |
FIT expense (benefit) incurred (excluding tax on capital gains) | 7.6 | (21.3) | (13) |
Net gain (loss) from operations | (89.8) | (35.4) | (17.9) |
Net realized capital gains (losses), net of tax | 1 | 23.2 | (5.1) |
Net income (loss) | $ (88.8) | $ (12.2) | $ (23) |
STATEMENTS OF CHANGES IN CAPITA
STATEMENTS OF CHANGES IN CAPITAL AND SURPRLUS - STATUTORY BASIS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Balance, beginning of year | $ 287 | $ 302.7 | $ 336.4 |
Net Income (Loss) | (88.8) | (12.2) | (23) |
Change in net unrealized capital gains (losses), net of tax | (28.1) | 22 | 13.1 |
Change in asset valuation reserve | (0.9) | (2.7) | 1.3 |
Change in net admitted deferred tax asset excluding tax on unrealized gains | 4.8 | (6.5) | 2.5 |
Changes in surplus as a result of reinsurance | (19.8) | (21.5) | (20.3) |
Other changes to surplus | (1.8) | 5.2 | (7.3) |
Change in asset valuation reserve | 70 | ||
Balance, end of year | 222.4 | 287 | 302.7 |
Common Stock | |||
Balance, beginning of year | 2.5 | 2.5 | 2.5 |
Balance, end of year | 2.5 | 2.5 | 2.5 |
Paid-in Surplus | |||
Balance, beginning of year | 393.2 | 393.2 | 393.2 |
Change in asset valuation reserve | 70 | ||
Balance, end of year | 463.2 | 393.2 | 393.2 |
Unassigned Surplus (Deficit) | |||
Balance, beginning of year | (108.7) | (93) | (59.3) |
Net Income (Loss) | (88.8) | (12.2) | (23) |
Change in net unrealized capital gains (losses), net of tax | (28.1) | 22 | 13.1 |
Change in asset valuation reserve | (0.9) | (2.7) | 1.3 |
Change in net admitted deferred tax asset excluding tax on unrealized gains | 4.8 | (6.5) | 2.5 |
Changes in surplus as a result of reinsurance | (19.8) | (21.5) | (20.3) |
Other changes to surplus | (1.8) | 5.2 | (7.3) |
Balance, end of year | $ (243.3) | $ (108.7) | $ (93) |
STATEMENTS OF CASH FLOWS - STAT
STATEMENTS OF CASH FLOWS - STATUTORY BASIS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash from operations: | |||
Premiums and other considerations | $ 593.9 | $ 516.6 | $ 457.2 |
Net investment income | 47.6 | 37 | 32.1 |
Other income | 56.7 | 57.2 | 57.2 |
Policyholder benefits | (119.5) | (80.8) | (96.4) |
Net transfer (to) from Separate Accounts | (19.9) | (7) | 50.7 |
Commissions, expenses, other deductions | (376.6) | (360.2) | (365.8) |
Federal income taxes (paid) recovered | 0 | 7.8 | 6.9 |
Net cash from (used in) operations | 182.2 | 170.6 | 141.9 |
Proceeds from investments sold, matured or repaid: | |||
Fixed maturities | 284.8 | 343.8 | 78 |
Derivatives and other miscellaneous proceeds | 44.9 | 77.2 | 20.1 |
Total investment proceeds | 329.7 | 421 | 98.1 |
Cost of investments acquired: | |||
Fixed maturities | (339.1) | (663.1) | (261.6) |
Common stocks | (2) | 0 | 0 |
Mortgage loans | 0 | 0 | (17) |
Change in policy loans | (53) | (12) | (16.9) |
Derivatives and other miscellaneous payments | (9.7) | (40.6) | (32.7) |
Total investments acquired | (403.8) | (715.7) | (328.2) |
Net cash provided by (used in) investing activities | (74.1) | (294.7) | (230.1) |
Cash from (used in) financing activities and miscellaneous sources: | |||
Amounts withheld or retained by company as agent | (81.9) | 35.7 | 38.4 |
Other cash provided (applied) | (15.1) | 18.8 | (7) |
Net cash from (used in) financing activities and miscellaneous sources | (97) | 54.5 | 31.4 |
Net change in cash, cash equivalents, and short-term investments | 11.1 | (69.6) | (56.8) |
Cash, cash equivalents and short-term investments, beginning of year | 37.7 | 107.3 | 164.1 |
Cash, cash equivalents and short-term investments, end of year | $ 48.8 | $ 37.7 | $ 107.3 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS MONY Life Insurance Company of America (herein referred to as either “MLOA” or the “Company”) is an Arizona stock life insurance company whose primary business is to provide life insurance, annuity and group employee benefit products to both individuals and businesses. MLOA is a wholly-owned subsidiary of AXA Equitable Financial Services, LLC (“AEFS”). AEFS is a wholly-owned subsidiary of AXA Equitable Holdings, Inc. (“Equitable Holdings”). Prior to May 14, 2018, Equitable Holdings was a direct wholly-owned subsidiary of AXA S.A. (“AXA”), a French holding company for the AXA Group, a worldwide leader in life, property and casualty and health insurance and asset management. As of December 31, 2018, AXA owned approximately 59% of the outstanding common stock of Equitable Holdings. In 2013, the Company entered into a reinsurance agreement (“Reinsurance Agreement”) with Protective Life Insurance Company (“Protective”) to reinsure an in-force book of life insurance and annuity policies written prior to 2004. In addition to the Reinsurance Agreement, the Company entered into a long-term administrative services agreement with Protective whereby Protective will provide all administrative and other services with respect to the reinsured business. For additional information on the Reinsurance Agreements see Note 12. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Use of Estimates in Preparation of the Financial Statements The preparation of financial statements in conformity with SAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results could differ from those estimates. Some of the significant estimates include those used in determining measurement of an impairment; valuation of investments, including derivatives (in the absence of quoted market values) and the recognition of other than temporary impairments; aggregate reserves; claim liabilities; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters, if applicable. Significant Accounting Policies The accompanying financial statements of MLOA have been prepared in conformity with accounting practices prescribed or permitted by the Arizona Department of Insurance ("SAP"). The Arizona Department of Insurance recognizes only SAP for determining and reporting the financial condition and results of operations of an insurance company in order to determine its solvency under the Arizona State Insurance Laws. The National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted practices by the State of Arizona. NAIC SAP is comprised of the Preamble, the Statements of Statutory Accounting Principles (“SSAP”), and Appendices. Accounting Changes Accounting changes adopted to conform to the provisions of NAIC SAP are reported as changes in accounting principles. The cumulative effect of changes in accounting principles are reported as an adjustment to unassigned surplus in the period of the change in accounting principle. The cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. During 2018, 2017 and 2016, there were no new accounting changes that had a material effect on the Company’s financial statements. New Accounting Pronouncement: Principal based reserving (“PBR”) is a new method of calculating life insurance reserves for term and universal life with secondary guarantees. Adoption of the PBR is optional until January 1, 2020, when it is effective and only applies to new business sold after the Company adopts the methodology. The Company has begun selling PBR-based universal life type products in 2018 and will continue to grow our portfolio of PBR-based products during the PBR phase in period. Difference between Generally Accepted Accounting Principles ("GAAP") and SAP The differences between statutory surplus and capital stock determined in accordance with SAP and total shareholder’s equity under GAAP are primarily: (a) the inclusion in SAP of an Asset Valuation Reserve ("AVR"); (b) policy reserves and deposit life funds under SAP differ from GAAP due to differences between actuarial assumptions and reserving methodologies; (c) certain policy acquisition costs are expensed under SAP but deferred under GAAP and amortized over future periods; (d) under SAP, Federal income taxes are provided on the basis of amounts currently payable and deferred federal income taxes are provided for temporary differences for the expected future tax consequences of events that have been recognized in the Company's financial statements. Changes in deferred income taxes are charged directly to surplus and have no impact on earnings. Further, deferred tax assets are reflected to the extent the probability of realization is more likely than not and admissibility of deferred tax assets than are considered realizable is limited while under GAAP, current and deferred Federal income taxes are reported in both income and comprehensive income and deferred federal income taxes are provided for temporary differences for the expected future tax consequences of events that have been recognized in the Company's financial statements. Deferred tax assets are subject to a similar realization assessment under GAAP; (e) the valuation of assets under SAP and GAAP differ due to different investment valuation and depreciation methodologies, as well as the deferral under SAP of interest-related realized capital gains and losses on fixed income investments through the Interest Maintenance Reserve ("IMR") intended to stabilize surplus from fluctuations in the value of the investment portfolio; (f) the valuation of the investment in AllianceBernstein L.P. ("AllianceBernstein") under SAP reflects a portion of the market value change rather than the equity in the underlying net assets as required under GAAP; (g) certain assets, primarily prepaid assets, certain deferred taxes and computer software development costs, are not admissible under SAP but are admissible under GAAP; (h) the fair valuing of all acquired assets and liabilities including VOBA and intangible assets required for GAAP purchase accounting is not recognized in SAP; (i) reserves and reinsurance recoverables on unpaid claims on reinsured business are netted in aggregate reserves and the liability for life policy claims, respectively, under SAP while under GAAP these reinsured amounts are reflected as an asset; (j) under SAP, premiums, regardless of policy type, are recognized when due and include the change in the deferred premium asset while under GAAP revenue recognition varies by product type and does not include the change in deferred premiums; and (k) derivatives unrealized gains and losses flow through surplus under SAP but through income under GAAP. The effects of the differences between GAAP and SAP on the accompanying statutory financial statements are material. Other Accounting Policies Recognition of Premium and Related Expenses Premiums, considerations and purchase payments are generally recognized as income when due. Payments on deposit-type contracts are recorded to the policy reserve. Policy acquisition costs incurred in connection with the acquiring of new business, such as commissions, underwriting, agency and policy issuance expenses, are charged to operations as incurred. Reinsurance Ceded Policy and contract liabilities ceded to reinsurers under coinsurance agreements have been reported as reductions of the related reserves. Any reinsurance balance amounts deemed to be uncollectible are written off through a charge to earnings. A liability for reinsurance balances is provided for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability for unauthorized reinsurers are credited or charged to surplus. Any increase in surplus net of tax resulting from a new reinsurance agreement is recognized as a direct credit to surplus. Recognition of the surplus increase as income is amortized net of tax as earnings emerge from the business reinsured, with no additional impact to surplus. Losses from new reinsurance treaties are expensed immediately. Valuation of Investments Bonds, which consist of long-term bonds, are stated primarily at amortized cost in accordance with the valuation prescribed by the Department and the NAIC. Bonds rated by the NAIC are classified into six categories ranging from highest quality bonds to those in or near default. Bonds rated in the top five categories are generally valued at amortized cost while bonds rated at the lowest category are valued at lower of amortized cost or fair market value. The Company follows both the prospective and retrospective methods for amortizing bond premium and discount. Both methods require the recalculation of the effective yield at each reporting date if there has been a change in the underlying assumptions. For the prospective method, the recalculated yield will equate the carrying amount of the investment to the present value of the anticipated future cash flows. The recalculated yield is then used to accrue income on the investment balance for subsequent accounting periods. There are no accounting changes in the current period unless the undiscounted anticipated cash flow is less than the carrying amount of the investment. For the retrospective method, the recalculated yield is the rate that equates the present value of actual and anticipated future cash flows with the original cost of the investment. The current balance of the investment is increased or decreased to the amount that would have resulted had the revised yield been applied since inception and investment income is correspondingly decreased or increased. For other than temporary impairments, the cost basis of the bond excluding loan-backed and structured securities is written down to fair market value as a new cost basis and the amount of the write down is accounted for as a realized loss. Mortgage backed and assets backed bonds are amortized using the effective interest method including anticipated prepayments from the date of purchase; significant changes in the estimated cash flows from original purchase assumptions are accounted for using the retrospective method. Mortgage backed and asset backed bonds carrying values are adjusted for impairment deemed to be other than temporary through write-downs recorded as realized capital losses. Prepayment assumptions for loan-backed bonds and structured securities were obtained from broker-dealer survey values or internal estimates. These assumptions are consistent with the current interest rate and economic environment. The retrospective adjustment method is predominately used to value securities except issues in default; the prospective adjustment method was used to value issues in default and issues that have a variable interest rate. Publicly traded unaffiliated common stocks are stated at market value; common stocks not publicly traded are stated at fair value. Common stock values are adjusted for impairments in value deemed to be other than temporary through write-downs recorded as realized capital losses. Preferred stocks are included with fixed maturities. They are stated principally at amortized cost and are adjusted to regulatory mandated values through the establishment of a valuation allowance, and for impairments in value deemed to be other than temporary through write-downs recorded as realized capital losses. The preferred stock investments include real estate investment trusts (“REIT”) nonredeemable and redeemable preferred stock. Preferred stock investments may not have a stated maturity, may not be cumulative and do not provide for mandatory redemption by the issuer. Short-term investments are stated at cost or amortized cost, which approximates market value. Cash and cash equivalents includes cash on hand, money market funds, amounts due from banks, highly liquid debt instruments purchased with a maturity of three months or less, and certificates of deposit with a maturity of one year or less. Mortgage loans on real estate are stated at unpaid principal balances net of unamortized discounts or premiums, fees and valuation allowances. Valuation allowances are established for mortgage loans that are considered impaired by management and recorded based on the difference between collateral value less estimated sales costs and the amortized cost of the mortgage loan. A mortgage loan that is considered other than temporary impairment impaired by management is written down to collateral value less estimated sales costs with the write-down recorded as a realized capital loss. Mortgage loans for which foreclosure is probable are considered other than temporary impairment impaired by management. Policy loans are stated at unpaid principal balances. Equity partnership investments are accounted for using the equity method. Changes in the equity value are recorded to unrealized capital gains and losses, unless partnership values are adjusted for impairments in value deemed to be other than temporary through write-downs recorded as realized capital losses. Real estate acquired in satisfaction of debt is valued at the lower of unpaid principal balance or estimated fair value at the date of acquisition. Real estate held for investment is reviewed for impairment annually and whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable. Impaired real estate is written down to fair value with the impairment loss being included in net realized capital losses. Real estate which management has committed to disposing of by sale or abandonment is carried at the lower of estimated fair value less disposition costs or depreciated cost. Real estate held for sale is reviewed quarterly with the shortfall recorded as impairment with a corresponding charge to net realized capital losses. As of December 31, 2018, the Company has no real estate. Real estate joint ventures are reported principally on the equity method of accounting. The results of real estate joint ventures are adjusted for depreciation, write-downs and valuation allowances. As of December 31, 2018, the Company has no real estate joint ventures. Depreciation of directly owned real estate and real estate owned by joint ventures is computed using the straight line method, generally ranging from 40 to 50 years . As of December 31, 2018, the Company has no real estate. All insurance subsidiaries are reported at their respective statutory net equity values. Currently, the only affiliate investment the Company has is AllianceBernstein. The reporting valuation bases for all other subsidiaries (excluding AllianceBernstein L.P. (“AllianceBernstein”)) are reported principally on the equity method of accounting. The Company adopted the market valuation method as the reporting valuation basis for its ownership of AllianceBernstein units in order to conform to the provisions of NAIC SAP. The Company and insurance affiliates petitioned and received from the Securities Valuation Office (SVO) a valuation of its AllianceBernstein units. Derivatives are used for asset/liability risk management. If the hedging relationship is effective, the derivative is accounted for in the same manner as the hedged item. If the derivative is not in an effective hedging relationship, the derivative is marked to fair value by recording an unrealized gain or loss (see Note 6 for additional information). In addition, MLOA has executed various collateral arrangements with counterparties to over-the-counter derivative transactions that require both pledging and accepting collateral either in the form of cash or high-quality securities, such as Treasuries or those issued by government agencies, or, for some counterparties, investment-grade corporate bonds. Realized Investment Gains (Losses) and Unrealized Capital Gains (Losses) Realized investment gains (losses) are determined by identification with the specific asset and are presented as a component of net income. The change in unrealized capital gains (losses) is presented as a component of change in surplus. The AVR and IMR are required under SAP. The AVR for the General Account and Separate Accounts for which MLOA bears the investment risk is determined by a specified formula and provides for possible future investment losses through charges to capital and surplus. The AVR requires reserves for bonds, preferred stocks, common stocks, mortgage loans on real estate, real estate, and other investments. The IMR captures, for all types of fixed income investments, the realized investment gains and losses which result from changes in the overall level of interest rates. These deferred investment gains or losses are amortized into income over the remaining term to maturity of the investments sold. Fair Value of Financial Instruments Included in various investment-related line items in the financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value, such as when impaired, or, for certain bonds and preferred stock when carried at the lower of cost or market. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value: Level 1 Quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data. Level 3 Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability. The Company determines fair value based upon quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are measured using present value or other valuation techniques. The fair value determinations are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair values cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument. Management is responsible for the determination of the value of investments carried at fair value and the supporting methodologies and assumptions. Under the terms of various service agreements, the Company often utilizes independent valuation service providers to gather, analyze, and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual securities. These independent valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested. As further described below with respect to specific asset classes, these inputs include, but are not limited to, market prices for recent trades and transactions in comparable securities, benchmark yields, interest rate yield curves, credit spreads, quoted prices for similar securities, and other market-observable information, as applicable. Specific attributes of the security being valued also are considered, including its term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security- or issuer-specific information. When insufficient market observable information is available upon which to measure fair value, the Company either will request brokers knowledgeable about these securities to provide a non-binding quote or will employ widely accepted internal valuation models. Fair values received from independent valuation service providers and brokers and those internally modeled or otherwise estimated are assessed for reasonableness. To validate reasonableness, prices also are internally reviewed by those with relevant expertise through comparison with directly observed recent market trades. Separate Accounts Separate Accounts’ assets and liabilities represent primarily segregated funds administered and invested by the Company for the benefit of certain contract holders. Approximately 81 percent of these assets consist of securities reported at market value and 19 percent consist of fixed maturity securities carried at amortized cost in a book value Separate Accounts. Premiums, benefits and expenses of the Separate Accounts are included in the Company’s Statements of Operations - Statutory Basis. Under the Protective Reinsurance Agreement, Separate Accounts products subject to the Agreement are ceded on a modified coinsurance (“MODCO”) basis, with Separate Accounts’ assets and liabilities remaining with MLOA. The Separate Accounts net gains from operations and fees associated with these Separate Accounts contracts (recorded to “Other income”) and the Net transfers to or (from) Separate Accounts are ceded to Protective, and included in the “Separate Accounts’ modified coinsurance reinsurance” line in the Statements of Operations - Statutory Basis. Nonadmitted Assets Certain assets designated as “nonadmitted” (certain deferred taxes, prepaid expenses, furniture and equipment, leasehold improvements, accrued interest on certain investments, intangible asset, and non-operating system software expenses) are excluded from assets and statutory surplus. Policy and Contract Claims Policy and contract claim expenses are reported in the period when the Company determines they are incurred. The claim liability would include an estimate for claims incurred but not reported. Aggregate Reserves Aggregate reserves for insurance and annuity policies are generally computed under the Commissioners' Reserve Valuation Method and Commissioners' Annuity Reserve Valuation Method, respectively, or otherwise under the net level premium method or comparable method, and are subject to reserve adequacy testing. Reserves for the indexed universal life products introduced in 2018 are principle-based reserves computed in accordance with NAIC VM-20. Benefit reserves are computed using statutory mortality and interest requirements and are generally determined without consideration of future withdrawals. Interest rates used in establishing such reserves range from 3.5% to 6.0% for life insurance reserves. Federal Income Taxes The Company has a tax sharing agreement with Equitable Holdings and is included in a consolidated federal income tax return together with Equitable Holdings and other affiliates. In accordance with the tax sharing agreement, tax expense is based on a separate company computation. Any loss not currently usable is carried forward and credited when usable by the Company on a separate basis. For more information see Note 7. Revision of Prior Period Financial Statements During the second quarter of 2018 and 2016, management identified errors in the calculation of reserves, which included: (i) an error that was primarily the result of modeling errors impacting the statutory valuation system for no lapse guarantee in-force products utilizing the calculations under AG 37 and AG 38; and (ii) an error in the calculation of universal life reserves as the cash surrender value of enhance riders was not included in the cash surrender value yield used to floor the statutory reserves. Management concluded that the errors were not material to the December 31, 2017 and 2016 financial Statements. However, in order to improve the consistency and comparability of the financial statements, management revised the 2017 and 2016 financial statements to correct for these errors. The following tables present line items in the Company’s financial statements - statutory basis as of and for the year ended December 31, 2017 that have been affected by the revisions. For these items, the tables detail the amounts as previously reported, the impact upon those line items due to the adjustments, and the amounts as currently revised. December 31, 2017 As Reported Adjustments As Revised (in millions) Balance Sheets - Statutory Basis LIABILITIES AND CAPITAL AND SURPLUS: Policy reserves and deposit-type funds 1,013.1 15.7 1,028.8 Total Liabilities 3,432.4 15.7 3,448.1 Capital and surplus: Capital and Surplus 302.7 (15.7 ) 287.0 Total Liabilities and Capital and Surplus $ 3,735.1 $ — $ 3,735.1 Year Ended December 31, 2017 As Reported Adjustments As Revised (in millions) Statement of Operations - Statutory Basis BENEFITS AND EXPENSES: Increase (decrease) in reserves 255.1 (1.2 ) 253.9 Total Expenses 696.9 (1.2 ) 695.7 Net gain (loss) from operations before federal income taxes ("FIT") (57.9 ) 1.2 (56.7 ) FIT expense (benefit) incurred (excluding tax on capital gains) (22.3 ) 1.0 (21.3 ) Net gain (loss) from operations (35.6 ) 0.2 (35.4 ) Net income (loss) $ (12.4 ) $ 0.2 $ (12.2 ) Statement of Changes in Capital and Surplus - Statutory Basis Balance, beginning of year: Unassigned surplus (deficit) $ (77.1 ) $ (15.9 ) $ (93.0 ) Total capital and surplus 318.6 (15.9 ) 302.7 Net income (loss) (12.4 ) 0.2 (12.2 ) Net change in Capital and Surplus (15.9 ) 0.2 (15.7 ) Balance, end of year: Unassigned surplus (deficit) (93.0 ) (15.7 ) (108.7 ) Total capital and surplus $ 302.7 $ (15.7 ) $ 287.0 The following tables present line items in the Company’s financial statements -statutory basis for the year ended December 31, 2016 that have been affected by the revisions. For these items, the tables detail the amounts as previously reported, the impact upon those line items due to the adjustments, and the amounts as currently revised. Year Ended December 31, 2016 As Reported Adjustments As Revised (in millions) Statement of Operations - Statutory Basis BENEFITS AND EXPENSES: Increase (decrease) in reserves $ 199.1 $ 6.4 $ 205.5 Total benefits and expenses 593.8 6.4 600.2 Net gain (loss) from operations before federal income taxes ("FIT") (24.5 ) (6.4 ) (30.9 ) FIT incurred (excluding tax on capital gains) (15.2 ) 2.2 (13.0 ) Net gain (loss) from operations (9.3 ) (8.6 ) (17.9 ) Net income (loss) $ (14.4 ) $ (8.6 ) $ (23.0 ) Year Ended December 31, 2016 As Reported Adjustments As Revised (in millions) Statement of Changes in Capital and Surplus - Statutory Basis Balance, beginning of year: Unassigned surplus (deficit) $ (42.9 ) $ (16.4 ) $ (59.3 ) Total capital and surplus 352.8 (16.4 ) 336.4 Net income (loss) (14.4 ) (8.6 ) (23.0 ) Prior year correction (9.1 ) 9.1 — Net change in Capital and Surplus (34.2 ) 0.5 (33.7 ) Balance, end of year: Unassigned surplus (deficit) (77.1 ) (15.9 ) (93.0 ) Total capital and surplus $ 318.6 $ (15.9 ) $ 302.7 Reconciliation of Annual Statement to Audited Financial Statements As a result of the aforementioned adjustments, there is a difference between the accompanying audited statutory financial statements and the 2018, 2017 and 2016 Annual Statement filed with the NAIC and the Arizona Department of Insurance. The 2018, 2017 and 2016 annual statements reflect the misstatements in accordance with SSAP#3 as a correction of a prior year error as a direct change to surplus. Listed below is the reconciliation between the accompanying audited financial statements and the Annual Statement as filed: 2018 Total Assets Total Liabilities Capital and Surplus Total Liabilities Surplus and Other Funds Net Income (in millions) Annual Statement, as filed $ 3,704.8 $ 3,482.4 $ 222.4 $ 3,704.8 $ (89.4 ) Adjustment for reserves — — — — 0.6 Audited statutory financial statements as reported herein $ 3,704.8 $ 3,482.4 $ 222.4 $ 3,704.8 $ (88.8 ) 2017 Total Assets Total Liabilities Capital and Surplus Total Liabilities Surplus and Other Funds Net Income (in millions) Annual Statement, as filed $ 3,735.1 $ 3,432.4 $ 302.7 $ 3,735.1 $ (12.4 ) Adjustment for reserves — 15.7 (15.7 ) — 0.2 Audited statutory financial statements as reported herein $ 3,735.1 $ 3,448.1 $ 287.0 $ 3,735.1 $ (12.2 ) 2016 Total Assets Total Liabilities Capital and Surplus Total Liabilities Surplus and Other Funds Net Income (in millions) Annual Statement, as filed $ 3,155.6 $ 2,837.0 $ 318.6 $ 3,155.6 $ (14.4 ) Adjustment for reserves 1.0 16.4 (15.9 ) 1.0 (8.6 ) Audited statutory financial statements as reported herein $ 3,156.6 $ 2,853.4 $ 302.7 $ 3,156.6 $ (23.0 ) |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Fixed Maturities and Common Stock The following tables provide additional information relating to fixed maturities and common stock held: Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) December 31, 2018 Fixed Maturities: U.S. Government $ 8.5 $ 0.1 $ 0.2 $ 8.4 Special Revenue and Special Assess. Obligations 0.5 0.3 — 0.8 Political Subdivisions of States and Territories 3.6 0.1 — 3.7 Industrial and Miscellaneous (Unaffiliated) 1,052.9 2.2 54.4 1,000.7 Preferred Stocks 4.2 — 0.4 3.8 Total Fixed Maturities $ 1,069.7 $ 2.7 $ 55.0 $ 1,017.4 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Adjusted Cost (in millions) Common Stocks: Unaffiliated $ 2.0 $ — $ — $ 2.0 Total Unaffiliated Common Stocks $ 2.0 $ — $ — $ 2.0 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) December 31, 2017 Fixed Maturities: U.S. Government $ 194.3 $ 1.0 $ 0.3 $ 195.0 Special Revenue and Special Assess. Obligations 0.5 — — 0.5 Political Subdivisions of States and Territories 4.5 0.2 — 4.7 Industrial and Miscellaneous (Unaffiliated) 822.1 18.1 2.4 837.8 Preferred Stocks 4.2 — — 4.2 Total Fixed Maturities $ 1,025.6 $ 19.3 $ 2.7 $ 1,042.2 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Adjusted Cost (in millions) Common Stocks: Unaffiliated $ — $ — $ — $ — Total Unaffiliated Common Stocks $ — $ — $ — $ — Proceeds from sales of investments in fixed maturities and common stocks during 2018, 2017 and 2016 were $264.7 million , $300.4 million and $16.3 million , respectively. Gross gains of $0.7 million in 2018, $9.7 million in 2017 and $0.1 million in 2016 and gross losses of $8.2 million in 2018, $6.8 million in 2017 and $0.1 million in 2016, respectively were realized on these sales. The carrying value and estimated fair value of fixed maturities at December 31, 2018, by contractual maturity are as follows: Carrying Value Estimated Fair (in millions) Due in one year or less $ 0.3 $ 0.6 Due after one year through five years 60.8 61.6 Due after five years through ten years 659.0 639.7 Due after ten years 345.2 311.5 Mortgage-backed securities 0.2 0.2 Preferred stocks 4.2 3.8 Total Fixed maturities $ 1,069.7 $ 1,017.4 Fixed maturities not due at a single maturity date have been included in the above table in the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The Company’s management, with the assistance of its investment advisors, monitors the investment performance of its portfolio and reviews the Company's securities with unrealized losses for other-than-temporary impairments (“OTTI”). Integral to this review is an assessment made each quarter, on a security-by-security basis, by the Company’s Investments Under Surveillance (“IUS”) Committee, of various indicators of credit deterioration to determine whether the investment security is expected to recover. This assessment includes, but is not limited to, consideration of the duration and severity of the unrealized loss, failure, if any, of the issuer of the security to make scheduled payments, actions taken by rating agencies, adverse conditions specifically related to the security or sector, the financial strength, liquidity, and continued viability of the issuer and, for equity securities only, the intent and ability to hold the investment until recovery, and results in identification of specific securities for which OTTI is recognized. The following table discloses fixed maturities ( 235 issues) and ( 56 issues), respectively, that have been in a continuous unrealized loss position for less than a twelve month period or greater than a twelve month period as of December 31, 2018 and 2017, respectively (in millions): Less than 12 Months 12 Months or Longer Total Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses (in millions) December 31, 2018 Fixed Maturities: U.S. Government $ — $ — $ 4.6 $ 0.2 $ 4.6 $ 0.2 Industrial and Miscellaneous (Unaffiliated) 372.8 15.6 470.6 38.8 843.4 54.4 Preferred Stocks 1.9 0.1 1.9 0.3 3.8 0.4 Total Fixed Maturities $ 374.7 $ 15.7 $ 477.1 $ 39.3 $ 851.8 $ 55.0 Less than 12 Months 12 Months or Longer Total Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses (in millions) December 31, 2017 Fixed Maturities: U.S. Government $ 16.2 $ 0.2 $ 3.5 $ 0.1 $ 19.7 $ 0.3 Industrial and Miscellaneous (Unaffiliated) 126.5 1.1 44.5 1.3 171.0 2.4 Preferred Stocks 2.2 — — — 2.2 — Total Fixed Maturities $ 144.9 $ 1.3 $ 48.0 $ 1.4 $ 192.9 $ 2.7 All contractual payments remain current and the Company has the ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value. Other than temporary impairments of fixed maturities amounted to $ 2.1 million and $ 0.4 million in 2018 and 2017, respectively. The Company’s fixed maturity investments are classified by the NAIC utilizing ratings from 1 to 6. Some securities are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa3/BBB- or NAIC designation of 3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near default). At December 31, 2018, approximately $4.8 million or 0.4% of the $1,069.7 million of the Company’s fixed maturities was considered to be other than investment grade. At December 31, 2018 and 2017, the carrying values of investments held for the production of income which were non-income producing, for the twelve months preceding the Statement of Assets date, were $0.3 million and $0.3 million for fixed maturities, respectively. At December 31, 2018 and 2017, MLOA, in accordance with various government and state regulations, had $3.9 million and $6.7 million of securities deposited with government or state agencies, respectively. Subprime Exposure Subprime residential mortgages are mortgage loans made by banks or mortgage lenders to residential borrowers with lower credit ratings. The criteria used to categorize such subprime borrowers include Fair Isaac Credit Organization (“FICO”) scores, interest rates charged, debt-to-income ratios and loan-to-value ratios. Alt-A residential mortgages are mortgage loans where the risk profile falls between prime and subprime; borrowers typically have clean credit histories but the mortgage loan has an increased risk profile due to higher loan-to-value and debt-to-income ratios and/or inadequate documentation of the borrowers’ income. Residential Mortgage Backed Securities (“RMBS”) are securities whose cash flows are backed by the principal and interest payments from a set of residential mortgage loans. The Company has no direct or indirect exposure through investments in subprime mortgage loans. The Company has no underwriting exposure to subprime mortgage risk through Mortgage Guaranty coverage, Financial Guaranty coverage, Directors & Officers liability, Errors and Omissions liability, and any other lines of insurance. MLOA does not originate, purchase or warehouse residential mortgages and is not in the mortgage servicing business. Mortgage Loans As of December 31, 2018 and 2017, the Company had two commercial mortgage loans with an outstanding balance of $17.0 million , There were no new mortgage loans issued in either year. All payments regarding these loans are current. Loan-Backed Securities Prepayment assumptions for loan-backed bonds and structured securities were obtained from broker-dealer survey values or internal estimates. These assumptions are consistent with the current interest rate and economic environment. The retrospective adjustment method is predominately used to value all securities except issues in default; the prospective adjustment method was used to value issues in default and issues that have a variable interest rate. The carrying value and fair value of the Company’s loan-backed securities as of December 31, 2018 was $14.5 million and $14.5 million , respectively. The carrying value and fair value of the Company’s loan-backed securities was $14.5 million and $14.5 million as of December 31, 2018 and $14.7 million and $15.3 million as of December 31, 2017, respectively. There were no loan-backed securities with a recognized other than temporary impairment as of December 31, 2018. There were no loan-backed securities with a recognized other than temporary impairment recorded during the year ended December 31, 2018. All impaired securities (fair value is less than cost or amortized cost) for which an other-than-temporary impairment has not been recognized in earnings as a realized loss (including securities with a recognized other-than-temporary impairment for non-interest related declines when a non-recognized interest related impairment remains) as of December 31, 2018: Less than 12 Months 12 Months or Longer (in millions) The aggregate amount of unrealized losses $ 0.3 $ — The aggregate related fair value of securities with unrealized losses $ 4.7 $ — Repurchase Agreements, Real Estate and Low Income Housing Tax Credit (“LIHTC”) The Company did not have any repurchase or reverse repurchase agreements during 2018. The Company does not have any real estate. The Company has basically no low income tax credits ("LIHTC") Detail of Assets Pledged as Collateral Not Captured in Other Categories: None Detail of Other Restricted Assets: As of December 31,2018, and 2017 the Company had $3.9 million and $6.7 million , respectfully, of assets on deposit with various state insurance departments for the benefit of policyholders. In addition, the Company had a $2.0 million and $0 common stock investment in the Federal Home Loan Bank as of December 31, 2018 and 2017, respectively. The Company does not have any working capital finance investments. Offsetting and Netting of Assets and Liabilities Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities December 31, 2018 Description Gross Amounts Recognized Amount Offset Net Amount Presented in the Balance Sheets (in millions) ASSETS Total Derivatives $ 19.6 $ 0.9 $ 18.7 LIABILITIES Total Derivatives $ 0.9 $ 0.9 $ — Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities December 31, 2017 Description Gross Amounts Recognized Amount Offset Net Amount Presented in the Balance Sheets (in millions) ASSETS Total Derivatives $ 119.3 $ 30.4 $ 88.9 LIABILITIES Total Derivatives $ 30.4 $ 30.4 $ — Structured Notes The Company had no structured notes as of December 31, 2018 or 2017. 5GI Securities The Company had no 5GI Securities as of December 31, 2018 or 2017. Short Sales The Company had no short sales during the years ended December 31, 2018, 2017 and 2016. Prepayment Penalty and Acceleration Fees The Company had no prepayment Penalties or Acceleration fees during the years ended December 31, 2018, 2017 and 2016. Realized Capital Gains (Losses) The following table summarizes the realized capital gains (losses) for the years ended December 31, 2018, 2017 and 2016: Years Ended December 31, 2018 2017 2016 (in millions) Fixed maturities $ (9.5 ) $ 0.2 $ (4.3 ) Derivative instruments 5.8 41.8 (2.0 ) Amounts transferred to interest maintenance reserve (“IMR”) net of tax 5.9 (4.2 ) — Tax (expense) credits (1.2 ) (14.6 ) 1.2 Net Realized Capital Gains (Losses) $ 1.0 $ 23.2 $ (5.1 ) INVESTMENT INCOME Due and accrued income was excluded from investment income on the following bases: • Mortgage loans - on loans in foreclosure or where collection of interest is uncertain. • Securities - as recommended by Holdings’ Investments Under Surveillance Committee. • Real Estate - where rent is in arrears more than three months or is deemed uncollectible. The total amount of due and accrued income excluded was $0.1 million and $0 as of December 31, 2018 and 2017, respectively. Net Investment Income The following table summarizes the net investment income for December 31, 2018, 2017 and 2016 (in millions): Years Ended December 31, 2018 2017 2016 (in millions) Fixed maturities $ 39.8 $ 34.2 $ 29.1 Affiliated dividends 8.2 6.2 5.1 Mortgage loans 0.6 0.6 0.6 Policy loans 2.2 1.5 1.2 Cash and short-term instruments 1.3 0.5 0.2 Investment expense and other (3.7 ) (3.5 ) (3.2 ) Amortization of IMR 0.8 0.7 0.2 Net investment income $ 49.2 $ 40.2 $ 33.2 |
JOINT VENTURES, PARTNERSHIPS AN
JOINT VENTURES, PARTNERSHIPS AND LIMITED LIABILITY COMPANIES | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
JOINT VENTURES, PARTNERSHIPS AND LIMITED LIABILITY COMPANIES | JOINT VENTURES, PARTNERSHIPS AND LIMITED LIABILITY COMPANIES MLOA had no investments in Joint Ventures, Partnerships and Limited Liability Companies that exceeded 10% of its admitted assets during the years ended December 31, 2018 and 2017. The Company did not recognize any impairment in Joint Ventures, Partnerships and Limited Liability Companies during the years ended December 31, 2018 and 2017. |
INVESTMENT INCOME
INVESTMENT INCOME | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT INCOME | INVESTMENTS Fixed Maturities and Common Stock The following tables provide additional information relating to fixed maturities and common stock held: Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) December 31, 2018 Fixed Maturities: U.S. Government $ 8.5 $ 0.1 $ 0.2 $ 8.4 Special Revenue and Special Assess. Obligations 0.5 0.3 — 0.8 Political Subdivisions of States and Territories 3.6 0.1 — 3.7 Industrial and Miscellaneous (Unaffiliated) 1,052.9 2.2 54.4 1,000.7 Preferred Stocks 4.2 — 0.4 3.8 Total Fixed Maturities $ 1,069.7 $ 2.7 $ 55.0 $ 1,017.4 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Adjusted Cost (in millions) Common Stocks: Unaffiliated $ 2.0 $ — $ — $ 2.0 Total Unaffiliated Common Stocks $ 2.0 $ — $ — $ 2.0 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) December 31, 2017 Fixed Maturities: U.S. Government $ 194.3 $ 1.0 $ 0.3 $ 195.0 Special Revenue and Special Assess. Obligations 0.5 — — 0.5 Political Subdivisions of States and Territories 4.5 0.2 — 4.7 Industrial and Miscellaneous (Unaffiliated) 822.1 18.1 2.4 837.8 Preferred Stocks 4.2 — — 4.2 Total Fixed Maturities $ 1,025.6 $ 19.3 $ 2.7 $ 1,042.2 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Adjusted Cost (in millions) Common Stocks: Unaffiliated $ — $ — $ — $ — Total Unaffiliated Common Stocks $ — $ — $ — $ — Proceeds from sales of investments in fixed maturities and common stocks during 2018, 2017 and 2016 were $264.7 million , $300.4 million and $16.3 million , respectively. Gross gains of $0.7 million in 2018, $9.7 million in 2017 and $0.1 million in 2016 and gross losses of $8.2 million in 2018, $6.8 million in 2017 and $0.1 million in 2016, respectively were realized on these sales. The carrying value and estimated fair value of fixed maturities at December 31, 2018, by contractual maturity are as follows: Carrying Value Estimated Fair (in millions) Due in one year or less $ 0.3 $ 0.6 Due after one year through five years 60.8 61.6 Due after five years through ten years 659.0 639.7 Due after ten years 345.2 311.5 Mortgage-backed securities 0.2 0.2 Preferred stocks 4.2 3.8 Total Fixed maturities $ 1,069.7 $ 1,017.4 Fixed maturities not due at a single maturity date have been included in the above table in the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The Company’s management, with the assistance of its investment advisors, monitors the investment performance of its portfolio and reviews the Company's securities with unrealized losses for other-than-temporary impairments (“OTTI”). Integral to this review is an assessment made each quarter, on a security-by-security basis, by the Company’s Investments Under Surveillance (“IUS”) Committee, of various indicators of credit deterioration to determine whether the investment security is expected to recover. This assessment includes, but is not limited to, consideration of the duration and severity of the unrealized loss, failure, if any, of the issuer of the security to make scheduled payments, actions taken by rating agencies, adverse conditions specifically related to the security or sector, the financial strength, liquidity, and continued viability of the issuer and, for equity securities only, the intent and ability to hold the investment until recovery, and results in identification of specific securities for which OTTI is recognized. The following table discloses fixed maturities ( 235 issues) and ( 56 issues), respectively, that have been in a continuous unrealized loss position for less than a twelve month period or greater than a twelve month period as of December 31, 2018 and 2017, respectively (in millions): Less than 12 Months 12 Months or Longer Total Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses (in millions) December 31, 2018 Fixed Maturities: U.S. Government $ — $ — $ 4.6 $ 0.2 $ 4.6 $ 0.2 Industrial and Miscellaneous (Unaffiliated) 372.8 15.6 470.6 38.8 843.4 54.4 Preferred Stocks 1.9 0.1 1.9 0.3 3.8 0.4 Total Fixed Maturities $ 374.7 $ 15.7 $ 477.1 $ 39.3 $ 851.8 $ 55.0 Less than 12 Months 12 Months or Longer Total Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses (in millions) December 31, 2017 Fixed Maturities: U.S. Government $ 16.2 $ 0.2 $ 3.5 $ 0.1 $ 19.7 $ 0.3 Industrial and Miscellaneous (Unaffiliated) 126.5 1.1 44.5 1.3 171.0 2.4 Preferred Stocks 2.2 — — — 2.2 — Total Fixed Maturities $ 144.9 $ 1.3 $ 48.0 $ 1.4 $ 192.9 $ 2.7 All contractual payments remain current and the Company has the ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value. Other than temporary impairments of fixed maturities amounted to $ 2.1 million and $ 0.4 million in 2018 and 2017, respectively. The Company’s fixed maturity investments are classified by the NAIC utilizing ratings from 1 to 6. Some securities are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa3/BBB- or NAIC designation of 3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near default). At December 31, 2018, approximately $4.8 million or 0.4% of the $1,069.7 million of the Company’s fixed maturities was considered to be other than investment grade. At December 31, 2018 and 2017, the carrying values of investments held for the production of income which were non-income producing, for the twelve months preceding the Statement of Assets date, were $0.3 million and $0.3 million for fixed maturities, respectively. At December 31, 2018 and 2017, MLOA, in accordance with various government and state regulations, had $3.9 million and $6.7 million of securities deposited with government or state agencies, respectively. Subprime Exposure Subprime residential mortgages are mortgage loans made by banks or mortgage lenders to residential borrowers with lower credit ratings. The criteria used to categorize such subprime borrowers include Fair Isaac Credit Organization (“FICO”) scores, interest rates charged, debt-to-income ratios and loan-to-value ratios. Alt-A residential mortgages are mortgage loans where the risk profile falls between prime and subprime; borrowers typically have clean credit histories but the mortgage loan has an increased risk profile due to higher loan-to-value and debt-to-income ratios and/or inadequate documentation of the borrowers’ income. Residential Mortgage Backed Securities (“RMBS”) are securities whose cash flows are backed by the principal and interest payments from a set of residential mortgage loans. The Company has no direct or indirect exposure through investments in subprime mortgage loans. The Company has no underwriting exposure to subprime mortgage risk through Mortgage Guaranty coverage, Financial Guaranty coverage, Directors & Officers liability, Errors and Omissions liability, and any other lines of insurance. MLOA does not originate, purchase or warehouse residential mortgages and is not in the mortgage servicing business. Mortgage Loans As of December 31, 2018 and 2017, the Company had two commercial mortgage loans with an outstanding balance of $17.0 million , There were no new mortgage loans issued in either year. All payments regarding these loans are current. Loan-Backed Securities Prepayment assumptions for loan-backed bonds and structured securities were obtained from broker-dealer survey values or internal estimates. These assumptions are consistent with the current interest rate and economic environment. The retrospective adjustment method is predominately used to value all securities except issues in default; the prospective adjustment method was used to value issues in default and issues that have a variable interest rate. The carrying value and fair value of the Company’s loan-backed securities as of December 31, 2018 was $14.5 million and $14.5 million , respectively. The carrying value and fair value of the Company’s loan-backed securities was $14.5 million and $14.5 million as of December 31, 2018 and $14.7 million and $15.3 million as of December 31, 2017, respectively. There were no loan-backed securities with a recognized other than temporary impairment as of December 31, 2018. There were no loan-backed securities with a recognized other than temporary impairment recorded during the year ended December 31, 2018. All impaired securities (fair value is less than cost or amortized cost) for which an other-than-temporary impairment has not been recognized in earnings as a realized loss (including securities with a recognized other-than-temporary impairment for non-interest related declines when a non-recognized interest related impairment remains) as of December 31, 2018: Less than 12 Months 12 Months or Longer (in millions) The aggregate amount of unrealized losses $ 0.3 $ — The aggregate related fair value of securities with unrealized losses $ 4.7 $ — Repurchase Agreements, Real Estate and Low Income Housing Tax Credit (“LIHTC”) The Company did not have any repurchase or reverse repurchase agreements during 2018. The Company does not have any real estate. The Company has basically no low income tax credits ("LIHTC") Detail of Assets Pledged as Collateral Not Captured in Other Categories: None Detail of Other Restricted Assets: As of December 31,2018, and 2017 the Company had $3.9 million and $6.7 million , respectfully, of assets on deposit with various state insurance departments for the benefit of policyholders. In addition, the Company had a $2.0 million and $0 common stock investment in the Federal Home Loan Bank as of December 31, 2018 and 2017, respectively. The Company does not have any working capital finance investments. Offsetting and Netting of Assets and Liabilities Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities December 31, 2018 Description Gross Amounts Recognized Amount Offset Net Amount Presented in the Balance Sheets (in millions) ASSETS Total Derivatives $ 19.6 $ 0.9 $ 18.7 LIABILITIES Total Derivatives $ 0.9 $ 0.9 $ — Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities December 31, 2017 Description Gross Amounts Recognized Amount Offset Net Amount Presented in the Balance Sheets (in millions) ASSETS Total Derivatives $ 119.3 $ 30.4 $ 88.9 LIABILITIES Total Derivatives $ 30.4 $ 30.4 $ — Structured Notes The Company had no structured notes as of December 31, 2018 or 2017. 5GI Securities The Company had no 5GI Securities as of December 31, 2018 or 2017. Short Sales The Company had no short sales during the years ended December 31, 2018, 2017 and 2016. Prepayment Penalty and Acceleration Fees The Company had no prepayment Penalties or Acceleration fees during the years ended December 31, 2018, 2017 and 2016. Realized Capital Gains (Losses) The following table summarizes the realized capital gains (losses) for the years ended December 31, 2018, 2017 and 2016: Years Ended December 31, 2018 2017 2016 (in millions) Fixed maturities $ (9.5 ) $ 0.2 $ (4.3 ) Derivative instruments 5.8 41.8 (2.0 ) Amounts transferred to interest maintenance reserve (“IMR”) net of tax 5.9 (4.2 ) — Tax (expense) credits (1.2 ) (14.6 ) 1.2 Net Realized Capital Gains (Losses) $ 1.0 $ 23.2 $ (5.1 ) INVESTMENT INCOME Due and accrued income was excluded from investment income on the following bases: • Mortgage loans - on loans in foreclosure or where collection of interest is uncertain. • Securities - as recommended by Holdings’ Investments Under Surveillance Committee. • Real Estate - where rent is in arrears more than three months or is deemed uncollectible. The total amount of due and accrued income excluded was $0.1 million and $0 as of December 31, 2018 and 2017, respectively. Net Investment Income The following table summarizes the net investment income for December 31, 2018, 2017 and 2016 (in millions): Years Ended December 31, 2018 2017 2016 (in millions) Fixed maturities $ 39.8 $ 34.2 $ 29.1 Affiliated dividends 8.2 6.2 5.1 Mortgage loans 0.6 0.6 0.6 Policy loans 2.2 1.5 1.2 Cash and short-term instruments 1.3 0.5 0.2 Investment expense and other (3.7 ) (3.5 ) (3.2 ) Amortization of IMR 0.8 0.7 0.2 Net investment income $ 49.2 $ 40.2 $ 33.2 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company uses equity-indexed options and futures to hedge its exposure to equity-linked crediting rates on life products. As of December 31, 2018, the market value of the net option positions was $12.4 million and the futures cash margin position was $6.3 million . As of December 31, 2017, the market value of the net option positions was $88.9 million and futures cash margin position was $0 . These positions generated realized gains of $5.8 million and $41.8 million in 2018 and 2017, respectively, and realized losses of $2.0 million in 2016, and generated unrealized losses of $40.0 million in 2018 and unrealized gains of $24.0 million and $20.5 million in 2017 and 2016, respectively. None of the derivatives used in these programs were designated as qualifying hedges under the guidance for derivatives and hedging. All derivatives are valued at fair value. The table below summarizes the market value of the Company’s financial instruments with off-balance-sheet risk. Assets Liabilities 2018 2017 2018 2017 (in millions) Equity options 13.3 119.3 0.9 30.4 Total $ 13.3 $ 119.3 $ 0.9 $ 30.4 At December 31, 2018 and 2017, the notional amounts were $254.6 million and $1,057.7 million , respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Components of deferred tax assets (DTAs) and deferred tax liabilities (DTLs): DTA/DTL Components December 31, 2018 December 31, 2017 Change Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total (in millions) Gross deferred tax assets $ 72.8 $ 2.1 $ 74.9 $ 54.0 $ 0.3 $ 54.3 $ 18.8 $ 1.8 $ 20.6 Statutory valuation allowance adjustment — — — — — — — — — Adjusted gross deferred tax assets 72.8 2.1 74.9 54.0 0.3 54.3 18.8 1.8 20.6 Deferred tax assets nonadmitted 49.5 2.1 51.6 23.7 0.3 24.0 25.8 1.8 27.6 Subtotal net admitted deferred tax asset 23.3 — 23.3 30.3 — 30.3 (7.0 ) — (7.0 ) Deferred tax liabilities 3.9 5.1 9 16.6 3.2 19.8 (12.7 ) 1.9 (10.8 ) Net admitted deferred tax assets/(net deferred tax liability) $ 19.4 $ (5.1 ) $ 14.3 $ 13.7 $ (3.2 ) $ 10.5 $ 5.7 $ (1.9 ) $ 3.8 Admission Calculation Components December 31, 2018 December 31, 2017 Change Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total (in millions) Federal income taxes paid in prior years recoverable through loss carrybacks $ — $ — $ — $ — $ — $ — $ — $ — $ — Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: 14.3 — 14.3 10.5 — $ 10.5 3.8 — 3.8 Adjusted gross deferred tax assets expected to be realized following the balance sheet date 14.3 — 14.3 10.5 — $ 10.5 3.8 — 3.8 Adjusted gross deferred tax assets allowed per limitation threshold XXX XXX 31.1 XXX XXX — XXX XXX 31.1 Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities 9.0 — 9.0 19.8 — 19.8 (10.8 ) — (10.8 ) Deferred tax assets admitted as the result of application of SSAP 101 $ 23.3 $ — $ 23.3 $ 30.3 $ — $ 30.3 $ (7.0 ) $ — $ (7.0 ) December 31, 2018 2017 Ratio percentage used to determine recovery period and threshold limitation amount 680.260 % 1,014.312 % (in millions) Amount of adjusted capital and surplus used to determine recovery period and threshold limitation above $ 223.9 $ 292.0 Impact of tax planning strategies on adjusted gross DTAs and net admitted DTAs (a) Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character as a percentage (in millions). December 31, 2018 Ordinary Capital Adjusted gross DTAs amount from Note 9A1(c) $ 72.8 $ 2.1 Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies — % — % Net Admitted Adjusted Gross DTAs amount from Note 9A1(e) $ 23.3 $ — Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies — % — % (b) The Company’s tax planning strategies does not include the use of reinsurance. There are no temporary differences for which a DTL has not been established. Significant components of income taxes incurred as summarized in the table below: Years Ended December 31, 2018 2017 2016 (in millions) Federal $ 7.6 $ (21.3 ) $ (13.0 ) Foreign — — — Subtotal 7.6 (21.3 ) (13.0 ) Federal income tax on net capital gains 1.2 14.6 (1.2 ) Utilization of capital loss carry-forwards — — — Other (8.4 ) 8.4 7.2 Federal and Foreign income taxes incurred $ 0.4 $ 1.7 $ (7.0 ) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in millions): December 31, 2018 December 31, 2017 Change Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total (in millions) DTAs: Policyholder reserves $ 7.8 $ — $ 7.8 $ 16.3 $ — $ 16.3 $ (8.5 ) $ — $ (8.5 ) Investments — 0.5 0.5 0.3 0.3 — 0.2 0.2 Deferred acquisition costs 39.7 — 39.7 31.3 — 31.3 8.4 — 8.4 Nonadmitted 1.1 — 1.1 0.9 — 0.9 0.2 — 0.2 Net loss carry-forward 21.9 1.6 23.5 3.3 — 3.3 18.6 1.6 20.2 Tax credit carry-forward 1.8 — 1.8 1.8 — 1.8 — — — Other (including items <5% of total ordinary tax assets) 0.5 — 0.5 0.4 — 0.4 0.1 — 0.1 Total gross DTAs 72.8 2.1 74.9 54.0 0.3 54.3 18.8 1.8 20.6 Nonadmitted DTAs 49.5 2.1 51.6 23.7 0.3 24.0 25.8 1.8 27.6 Admitted DTAs 23.3 — 23.3 30.3 — 30.3 (7.0 ) — (7.0 ) DTLs: Investments — (5.1 ) (5.1 ) — (3.2 ) (3.2 ) — (1.9 ) (1.9 ) Deferred and uncollected premium (0.4 ) — (0.4 ) (1.0 ) — (1.0 ) 0.6 — 0.6 Policyholder reserves (3.4 ) — (3.4 ) (15.6 ) — (15.6 ) 12.2 — 12.2 Other (including items <5% of total ordinary tax assets) (0.1 ) — (0.1 ) — — — (0.1 ) — (0.1 ) Total DTLs (3.9 ) (5.1 ) (9.0 ) (16.6 ) (3.2 ) (19.8 ) 12.7 (1.9 ) 10.8 Net admitted (DTL)/DTA $ 19.4 $ (5.1 ) $ 14.3 $ 13.7 $ (3.2 ) $ 10.5 $ 5.7 $ (1.9 ) $ 3.8 The change in net deferred income taxes is comprised of the following (in millions): December 31, 2018 2017 Change (in millions) Total deferred tax assets $ 74.9 $ 54.3 $ 20.6 Total deferred tax liabilities (9.0 ) (19.8 ) 10.8 Net deferred tax assets/liabilities 65.9 34.5 31.4 Statutory valuation allowance adjustment — — — Net deferred tax assets/liabilities after SVA $ 65.9 $ 34.4 31.4 Tax effect of unrealized gains/(losses) 0.9 Incurred tax items in surplus — Change in net deferred income tax $ 32.3 The Tax Cuts and Jobs Act of 2017 enacted on December 22, 2017 reduces the U.S. federal corporate tax rate from 35% to 21% beginning on January 1, 2018. Due to the enactment of this law, the Company recorded a $9.0 million decrease in the net admitted DTA for the tax year 2017. Reconciliation of total statutory income taxes reported to tax at the statutory tax rate: The provision for federal and foreign income taxes incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes including realized capital gains/losses. Description Amount 21% Tax Effect Effective Tax Rate (in millions) Income before taxes (including all realized capital gains / (losses)) $ (85.7 ) $ (18.0 ) 21.00 % Dividends-received deduction (3.7 ) (0.8 ) 0.91 % Interest maintenance reserve (0.8 ) (0.2 ) 0.20 % IRS audit adjustment 1.9 0.4 (0.47 )% Deferred gain on reinsurance (19.8 ) (4.1 ) 4.85 % Incurred tax items in surplus (40.3 ) (8.5 ) 9.88 % Other, provision to return (2.0 ) (0.7 ) 0.81 % Total $ (150.4 ) $ (31.9 ) 37.18 % Federal income taxed incurred $ 0.4 (0.47 )% Change in net deferred income tax (32.3 ) 37.65 % Total statutory income taxes (31.9 ) 37.18 % Carry-forwards, Recoverable taxes and IRS Section 6603 Deposits As of December 31, 2018 the Company has net operating loss carry-forward of $104.2 million , capital loss carryforward of $7.6 million and an AMT credit carryforward of $1.7 million . There were no income taxes, ordinary and capital, available for recoupment in the event of future losses. There are no deposits admitted under Section 6603 of the Internal Revenue Code. The Company is included in a consolidated federal income tax return together with its ultimate domestic parent, Equitable Holdings and the following subsidiaries and affiliates. AXA Equitable Holdings, Inc. Trusted Investment Advisors Corp. AXA Equitable Life Insurance Company Trusted Insurance Advisors General Agency Corp. AXA Equitable Life and Annuity Company Financial Marketing Agency, Inc. AXA Distribution Holding Corp. AXA Technology Services America, Inc. AllianceBernstein Corp. AXA Corporate Solutions Life Reinsurance Company Equitable Structured Settlement Corp. EQ AZ Life Re Company Equitable Casualty Insurance Co. CS Life RE Company JMR Realty Services, Inc. U.S. Financial Life Insurance Company 1740 Advisers, Inc. AXA IM Holdings US, Inc. MONY Financial Services, Inc. Alpha Unit Holdings, Inc. Federal income taxes are charged or credited to operations based upon amounts estimated to be payable or receivable as a result of taxable operations for the current year. In accordance with the tax sharing agreement between Holdings and the Company, tax expense is based on separate company computations. Any loss not currently usable is carried forward and credited when usable by the Company on a separate basis. At December 31, 2018 and 2017, the total amount of unrecognized tax benefits were $4.6 million and $4.2 million , respectively, all of which would affect the effective tax rate. MLOA recognizes accrued interest and penalties related to unrecognized tax benefits in tax (expense) benefit. Interest and penalties included in the amounts of unrecognized tax benefits at December 31, 2018, 2017 and 2016 were $0.4 million , $0.3 million and $0.0 million , respectively. Tax expense for 2018 reflected an expense of $0.1 million in interest expense related to unrecognized tax benefits. A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows: Years Ended December 31, 2018 2017 2016 (in millions) Balance at January 1 $ 4.0 $ 4.0 $ 7.0 Additions for tax positions of prior years 0.2 — — Reduction for tax positions of prior years — — (3.0 ) Settlements with tax authorities — — — Balance at December 31 $ 4.2 $ 4.0 $ 4.0 It is reasonably possible that the total amounts of unrecognized tax benefits will change within the next 12 months. The possible change in the amount of unrecognized tax benefits cannot be estimated at this time. The IRS is currently auditing the tax years 2010-2013. |
INFORMATION CONCERNING PARENT,
INFORMATION CONCERNING PARENT, SUBSIDIARIES AND AFFILIATES | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
INFORMATION CONCERNING PARENT, SUBSIDIARIES AND AFFILIATES | INFORMATION CONCERNING PARENT, SUBSIDIARIES AND AFFILIATES MLOA does not have any guarantees for the benefit of an affiliate or related party. As of December 31, 2018, with the permission of the Arizona Department of Insurance, the Company accrued a $70.0 million capital contribution from its parent AEFS. This amount was settled on February 20, 2019. On April 11, 2018, the reinsurance agreement with the AXA RE Arizona Company (“AXA RE”) was novated to EQ AZ Life Re Company (“EQAZ”), a captive insurance company, organized under the laws of Arizona, a subsidiary of AEFS. EQAZ obtained new letters of credit, guaranteed by Holdings, to support the treaties and the letters of credit of AXA RE were canceled. The letter of credit amount as of December 31, 2018 was $45.0 million . For additional information see Note 12. MLOA reported amounts due from affiliates of $74.3 million and $5.2 million at December 31, 2018 and 2017, respectively. The Company reported amounts payable to affiliates of $3.8 million and $22.7 million at December 31, 2018 and 2017, respectively. The receivable and payable are primarily related to capital contributions, expense allocations, reinsurance settlements and commissions payable. MLOA reimburses AXA Equitable Life Insurance Company (“AXA Equitable”) for its use of personnel, property and facilities in carrying out certain of its operations. The associated costs related to the service agreements are allocated to MLOA based on methods that management believes are reasonable, including a review of the nature of such costs and time studies analyzing the amount of employee compensation costs incurred by MLOA. Expenses paid related to these agreements, which are reported as operating expenses, were $156.3 million , $110.5 million and $123.0 million in 2018, 2017 and 2016, respectively. AllianceBernstein provides investment advisory and management services to MLOA on a fee basis which amounted to $1.8 million , $1.8 million and $1.6 million in 2018, 2017 and 2016, respectively. MLOA incurred distribution fee charges from AXA Network, LLC of $113.2 million , $109.1 million and $99.7 million in 2018, 2017 and 2016, respectively, and from AXA Distributors, LLC of $47.5 million , $43.1 million and $42.6 million in 2018, 2017 and 2016, respectively, for distributing MLOA’s products. Investment SCA The Company’s carrying value of its investment in AllianceBernstein was $53.0 million and $48.6 million as of December 31, 2018 and 2017, respectfully. The AllianceBernstein security was updated with the NAIC on July 25, 2018 at a value of $48.8 million . It has been valued under Part 5, Section 2(c)(i) A1 of the NAIC valuation procedures relating to the valuation of common stocks of subsidiary, controlled or affiliated companies. |
CAPITAL SURPLUS AND SHAREHOLDER
CAPITAL SURPLUS AND SHAREHOLDERS DIVIDEND RESTRICTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
CAPITAL AND SURPLUS AND SHAREHOLDERS DIVIDEND RESTRICTIONS | CAPITAL AND SURPLUS AND SHAREHOLDERS DIVIDEND RESTRICTIONS MLOA has 5,000,000 shares of common stock authorized, 2,500,000 shares issued, and 2,500,000 outstanding. All outstanding shares are held by AEFS. On February 7, 2019, the Arizona Department of Insurance granted the Company permission to accrue a $70.0 million capital contribution from AEFS. This amount was settled on February 20, 2019. Under Arizona Insurance Law, a domestic life insurer may without prior approval of the Superintendent, pay a dividend to its shareholders not exceeding an amount calculated based on a statutory formula. Based on this formula, the Company would not be permitted to pay ordinary shareholder dividends during 2019. Any payment of a dividend would require the Company to file notice of its intent to declare such dividends with the Superintendent who then has 30 days to disapprove the distribution. The Company did not pay any dividends in 2018, 2017 and 2016. The Company had no special surplus funds as of December 31, 2018 and 2017. The portion of unassigned surplus represented or (reduced) by cumulative unrealized gains and (losses) was $(21.1) million , $(25.5) million and $ (33.6) million as of December 31, 2018, 2017 and 2016, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation A number of lawsuits, claims, assessments and regulatory inquiries have been filed or commenced against life insurers in the jurisdictions in which MLOA does business. These actions and proceedings involve, among other things, insurers’ sales practices, alleged agent misconduct, alleged failure to properly supervise agents, contract administration, product design, features and accompanying disclosure, cost of insurance increases, the use of captive reinsurers, payments of death benefits and the reporting and escheatment of unclaimed property, alleged breach of fiduciary duties, alleged mismanagement of client funds and other matters. Some of the matters have resulted in the award of substantial fines and judgments against other insurers, including punitive damages, or in substantial settlements. Courts, juries and regulators often have substantial discretion in awarding damage awards and fines, including punitive damages. MLOA, from time to time, is involved in such actions and proceedings. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on MLOA’s financial position or results of operations. However, it should be noted that the frequency of large damage awards, including large punitive damage awards and regulatory fines that bear little or no relation to actual economic damages incurred, continues to create the potential for an unpredictable judgment in any given matter. Contingent Commitments Joint Ventures, Partnerships and Limited Liability Company contingent liabilities To facilitate certain investment related transactions, the Company has provided, from time to time, certain guarantees or commitments to affiliates or investors. These arrangements include commitments for the Company, under certain conditions, to provide equity financing to certain limited partnerships of $0.1 million at December 31, 2018. Other Contingent Commitments The Company has no outstanding commitments under existing mortgage loan or mortgage loan commitment agreements at December 31, 2018. Assessments (1) As of December 31, 2018 and 2017, the Company had a $0.7 million and $0.6 million liability for the estimated portion of future assessments related to insolvent insurers, primarily Executive Life Ins. Co. and Lincoln Memorial Life Insurance Company. These assessments are expected to be paid over an extended period. The Company also held a $0.5 million asset for premium tax offsets that are expected to be realized with respect to these assessments as of December 31, 2018 and 2017, and an additional $0.1 million asset for premium tax offsets for assessments already paid as of December 31, 2018 and 2017. The Company has received no notification in 2018, 2017 or 2016 of any other new insolvencies that are material to the Company’s financial position. (2) Guaranty Fund Liabilities and Assets Related to Assessments from Insolvencies for Long-Term Care Contracts The Company had no significant guarantee fund liability as of December 31, 2018 and 2017. Number of jurisdictions, ranges of years used to discount and weighted average number of years of the discounting time period for payables and recoverables by insolvency: Name of the Insolvency Payables Recoverables Number of Jurisdictions Range of Years Weighted Average Number of Years Number of Jurisdictions Range of Years Weighted Average Number of Years Penn Treaty Network America Insurance Company 45 1-69 11 45 1-69 11 American Network Insurance Company 44 1-69 15 44 1-69 15 |
FAIR VALUE OF OTHER FINANCIAL I
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS | FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS Fair Value Measurement at Reporting Date The following tables provide information as of December 31, 2018 and 2017 about MLOA’s financial assets measured at fair value: As of December 31, 2018 Level 1 Level 2 Level 3 Net Asset Value (NAV) Total (in millions) Assets at Fair Value: Bonds: Commercial Mortgage-Backed Securities $ — $ — $ — $ — $ — Total Bonds — — — — — Common Stocks: Industrial and Miscellaneous — — 2.0 — 2.0 Total Common Stocks — — 2.0 — 2.0 Derivative Assets: Options — 12.4 — — 12.4 Total Derivatives — 12.4 — — 12.4 Separate Accounts Assets (1) — — — 1,850.0 1,850.0 Total Assets at Fair Value $ — $ 12.4 $ 2.0 $ 1,850.0 $ 1,864.4 Liabilities at Fair Value: Derivative Liabilities $ — $ — $ — $ — $ — Total Liabilities at Fair Value $ — $ — $ — $ — $ — _______________ (1) Only Cash and Invested Assets. As of December 31, 2017 Level 1 Level 2 Level 3 Net Asset Value (NAV) Total (in millions) Assets at Fair Value : Bonds: Commercial Mortgage-Backed Securities $ — $ — $ — $ — $ — Total Bonds — — — — — Derivative Assets: Options — 88.9 — — 88.9 Total Derivatives — 88.9 — — 88.9 Separate Accounts Assets (1) — — — 2,014.0 2,014.0 Total Assets at Fair Value $ — $ 88.9 $ — $ 2,014.0 $ 2,102.9 Liabilities at Fair Value: Derivative Liabilities — — — — — Total Liabilities at Fair Value $ — $ — $ — $ — $ — _______________ (1) Only Cash and Invested Assets. Fair Value Measurements in Level 3 of the Fair Value Hierarchy The following table summarizes the changes in assets classified in Level 3 during the years ended December 31, 2018, 2017 and 2016: Beginning Balance at January 1, 2018 Total Gains (Losses) Included in Net Income Total Gains (Losses) Included in Surplus Purchases Sales Total Ending Balance at December 31, 2018 (in millions) Common stock - Industrial and Miscellaneous — — — 2.0 — 2.0 Total $ — $ — $ — $ 2.0 $ — $ 2.0 During 2018 there were no transfers between levels 1, 2 or 3. Beginning Balance at January 1, 2017 Total Gains (Losses) Included in Net Income Total Gains (Losses) Included in Surplus Purchases Sales Total Ending Balance at December 31, 2017 (in millions) Commercial Mortgage-Backed Securities $ 1.6 $ — $ 5.0 $ — $ (6.6 ) $ — Total $ 1.6 $ — $ 5.0 $ — $ (6.6 ) $ — During 2017 there were no transfers between levels 1, 2 or 3. Beginning Balance at January 1, 2016 Transfers into Level 3 Transfers out of Level 3 Total Gains (Losses) Included in Net Income Total Gains (Losses) Included in Surplus Purchases Sales Total Ending Balance at December 31, 2016 (in millions) Commercial Mortgage-Backed Securities (1) $ 4.1 $ 0.6 $ (0.5 ) $ (2.6 ) $ 0.5 $ — $ (0.5 ) $ 1.6 Total $ 4.1 $ 0.6 $ (0.5 ) $ (2.6 ) $ 0.5 $ — $ (0.5 ) $ 1.6 ___________ (1) Amount includes: $0.6 million of Level 3 securities now carried at fair value, which were carried at adjusted cost in prior period and ($0.5) million of Level 3 securities no longer carried at market value, where the adjusted cost is lower than the market value. The following table discloses carrying value and estimated fair value (defined within the fair value hierarchy) as of December 31, 2018 and 2017 for financial instruments: As of December 31, 2018 Type of Financial Instrument Aggregate Fair Value Admitted Assets Level 1 Level 2 Level 3 Net Asset Value (NAV) Not Practicable (Carrying Value) (in millions) Bonds $ 1,013.6 $ 1,065.5 $ — $ 1,002.6 $ 11.0 $ — $ — Preferred Stock $ 3.8 $ 4.2 $ 3.8 $ — $ — $ — $ — Common Stock (1) $ 72.7 $ 55.0 $ — $ — $ 72.7 $ — $ — Mortgage Loans on Real Estate $ 16.2 $ 17.0 $ — $ — $ 16.2 $ — $ — Policy Loans $ 121.9 $ 109.9 $ — $ — $ 121.9 $ — $ — Derivatives $ 18.7 $ 18.7 $ — $ 12.4 $ — $ — $ — Separate Accounts (2) $ 2,271.8 $ 2,276.6 $ 421.8 $ — $ — $ 1,850.0 $ — Policyholders liabilities: Investment contracts $ 4.9 $ 4.9 $ — $ — $ 4.9 $ — $ — _______________ (1) The difference between the admitted value and aggregate fair entirely represents affiliated holdings of AllianceBernstein units, which for statutory admitted carrying value is discounted by 25% as of December 31, 2018. The discount is based on SSAP #97 sliding scale and approved by the SVO. (2) Only Cash and Invested Assets. As of December 31, 2017 Type of Financial Instrument Aggregate Fair Value Admitted Assets Level 1 Level 2 Level 3 Net Asset Value (NAV) Not Practicable (Carrying Value) (in millions) Bonds $ 1,038.0 $ 1,021.4 $ — $ 1,032.5 $ — $ — $ — Preferred Stock $ 4.2 $ 4.2 $ 4.2 $ — $ — $ — $ — Common Stock (1) $ 64.8 $ 48.6 $ — $ — $ 64.8 $ — $ — Mortgage Loans on Real Estate $ 16.8 $ 17.0 $ — $ — $ — $ — $ — Policy Loans $ 65.3 $ 57.2 $ — $ — $ 65.3 $ — $ — Derivatives $ 88.9 $ 88.9 $ — $ 88.9 $ — $ — $ — Separate Accounts (2) $ 2,432.1 $ 2,422.9 $ 418.1 $ — $ — $ 2,014.0 $ — Policyholders liabilities: Investment contracts $ 4.0 $ 4.0 $ — $ — $ — $ — $ — _______________ (1) Entirely represents affiliated holdings of AllianceBernstein units, which for statutory admitted carrying value is discounted by 25% as of December 31, 2017. The discount is based on SSAP #97 sliding scale and approved by the SVO. (2) Only Cash and Invested Assets. |
REINSURANCE AGREEMENTS
REINSURANCE AGREEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE AGREEMENTS | REINSURANCE AGREEMENTS In 2013, the Company entered into the Reinsurance Agreement with Protective to reinsure an in-force book of life insurance and annuity policies written prior to 2004. In addition to the Reinsurance Agreement, the Company entered into a long-term administrative services agreement with Protective whereby Protective will provide all administrative and other services with respect to the reinsured business. For business not reinsured with Protective, the Company generally reinsures its variable life and interest-sensitive life insurance policies on an excess of retention basis. In 2018, the Company generally retained up to a maximum of $4 million of mortality risk on single-life policies and up to a maximum of $6 million of mortality risk on second-to-die policies. For amounts applied for in excess of those limits, reinsurance is ceded to AXA Equitable up to a combined maximum of $20 million of risk on single-life policies and up to a maximum of $25 million on second-to-die policies. For amounts issued in excess of those limits we typically obtain reinsurance from unaffiliated third parties. The reinsurance arrangements obligate the reinsurer to pay a portion of any death claim in excess of the amount we retain in exchange for an agreed-upon premium.The assumed reinsurance business with AXA Global Re is not a part of the Protective Reinsurance Agreement. Beginning in 2016 the group short and long-term disability is being reinsured with Group Reinsurance Plus (GRP) via a quota share arrangement. During the second quarter of 2018, the contracts assumed by Arizona RE were novated to EQAZ, a newly formed affiliated captive insurance company organized under the laws of Arizona, a subsidiary of AEFS. Shortly after the novation of business to EQAZ, AXA RE Arizona was merged with and into AXA Equitable. The no lapse guarantee riders on the variable life product with issue dates from September 2006 through December 2008 are being reinsured on a 90% first dollar quota share basis through EQAZ. Beginning in 2009, lapse guarantee riders were no longer offered on the product. MLOA has a quota share arrangement with an AXA affiliate AXA Global Re (formerly AXA Cessions), assuming a percentage of excess Life/Disability/A&H business. Premiums and benefits assumed under this treaty were $2.4 million and $2.1 million , respectively, for the year ended December 31, 2018, $2.4 million and $1.8 million , respectively, for the year ended December 31, 2017 and $2.5 million and $1.9 million , respectively, for the year ended December 31, 2016. The following table summarizes the effect of reinsurance: 2018 2017 2016 (in millions) Direct premiums $ 719 $ 655 $ 601 Considerations for supplementary contracts 4 4 7 Reinsurance assumed 2 2 3 Reinsurance ceded to Protective (76 ) (92 ) (103 ) Reinsurance ceded - Other (58 ) (50 ) (50 ) Premiums and annuity considerations $ 591 $ 519 $ 458 Reduction in insurance - Protective Reserves, at December 31 (1) $ 1,314 * $ $ 1,383 $ 1,389 Reduction in insurance - Other Reserves, at December 31 $ 282 $ 289 $ 296 ______________ (1) At December 31, 2018 there was $1,023.6 million of assets held in trust at Northern Trust supporting this reinsurance credit. |
RESERVES FOR LIFE CONTRACTS AND
RESERVES FOR LIFE CONTRACTS AND DEPOSIT TYPE CONTRACTS | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
RESERVES FOR LIFE CONTRACTS AND DEPOSIT TYPE CONTRACTS | RESERVES FOR LIFE CONTRACTS AND DEPOSIT TYPE CONTRACTS MLOA waives deduction of deferred fractional premiums upon death of the insured but does not return any portion of the final premium paid beyond the month of death. Surrender values are not promised in excess of the legally computed reserves. Substandard policies are valued from basic actuarial principles using the policy’s substandard rating. At December 31, 2018, the Company had $344.9 million of insurance in-force for which the gross premiums are less than the net premiums according to the standard valuation set by the Arizona Department of Insurance. Reserves to cover the above insurance totaled $1.0 million net of reinsurance at December 31, 2018. |
VARIABLE ANNUITY CONTRACTS - GU
VARIABLE ANNUITY CONTRACTS - GUARANTEED MINIMUM DEATH BENEFIT (GMDB) AND GUARANTEED MINIMUM INCOME BENEFIT (GMIB) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
VARIABLE ANNUITY CONTRACTS - GUARANTEED MINIMUM DEATH BENEFIT (GMDB) AND GUARANTEED MINIMUM INCOME BENEFIT (GMIB) | VARIABLE ANNUITY CONTRACTS - GUARANTEED MINIMUM DEATH BENEFIT ("GMDB") AND GUARANTEED MINIMUM INCOME BENEFIT ("GMIB") Insurance reserves for all products meet the aggregate statutory requirements under Arizona Insurance Law and recognize the specific risks related to each product. MLOA issued certain variable annuity contracts with GMDB and GMIB features that guarantee either: a) Return of Premium: the benefit is the greater of current account value or premium paid (adjusted for withdrawals); b) Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals); c) Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages; or d) Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit. As a result of the Reinsurance Agreement with Protective, MLOA reinsured 100% of the insurance risk and benefits associated with the GMIB reinsurance contracts to Protective. |
ANALYSIS OF ANNUITY ACTUARIAL R
ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS | ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS Withdrawal Characteristics of Annuity Actuarial Reserves and Deposit liabilities as of December 31, 2018 and 2017 were as follows: General Account Separate Accounts with Guarantees Separate Accounts Non-guaranteed (1) Total % of Total (in millions) December 31, 2018: Subject to discretionary withdrawal: With fair value adjustment $ 183.5 $ — $ — $ 183.5 16.8 % At book value less current surrender charge of 5% or more 2.6 — — 2.6 0.3 % At fair value — — 527.5 527.5 48.3 % Total with adjustment or at fair value 186.1 — 527.5 713.6 65.4 % At book value without adjustment (minimal or no charge or adjustment) 302.7 — — 302.7 27.7 % Not subject to discretionary withdrawal 75.3 — — 75.3 6.9 % Total direct and assumed 564.1 — 527.5 1,091.6 100.0 % Less: Reinsurance ceded 559.2 — — 559.2 Total (net) $ 4.9 $ — $ 527.5 $ 532.4 _______________ (1) The entire Separate Accounts annuity reserves are ceded as part of a modified coinsurance treaty with Protective . General Account Separate Accounts with Guarantees Separate Accounts Non-guaranteed (1) Total % of Total (in millions) December 31, 2017: Subject to discretionary withdrawal: With fair value adjustment $ 194.3 $ — $ — $ 194.3 16.0 % At book value less current surrender charge of 5% or more 2.9 — — 2.9 0.2 % At fair value — — 637.0 637.0 52.6 % Total with adjustment or at fair value 197.2 — 637.0 834.2 68.8 % At book value without adjustment (minimal or no charge or adjustment) 298.8 — — 298.8 24.6 % Not subject to discretionary withdrawal 79.2 — — 79.2 6.6 % Total direct and assumed 575.2 — 637.0 1,212.2 100.0 % Less: Reinsurance ceded 571.2 — — 571.2 Total (net) $ 4.0 $ — $ 637.0 $ 641.0 _______________ (1) The entire Separate Accounts annuity reserves are ceded as part of a modified coinsurance treaty with Protective. |
PREMIUM AND ANNUITY CONSIDERATI
PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED | PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED December 31, 2018 2017 (in millions) Line of Business Gross Net of Loading Gross Net of Loading Ordinary new business (0.1 ) (0.1 ) — — Ordinary renewal 2.2 2.2 3.4 3.4 Group life 0.4 0.4 0.8 0.8 Total premium and annuity considerations deferred and uncollected $ 2.5 $ 2.5 $ 4.2 $ 4.2 |
SEPARATE ACCOUNTS
SEPARATE ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
SEPARATE ACCOUNTS | SEPARATE ACCOUNTS Separate Accounts’ Activity The Company utilizes Separate Accounts to record and account for assets and liabilities for particular lines of business and/or transactions. For the current reporting year, The Company reported assets and liabilities from the following product lines/transactions in Separate Accounts. • Variable Life • Variable Annuities In accordance with the domiciliary state procedures approving items within the Separate Accounts, the Separate Accounts classification of Variable Life and Variable Annuities are supported by Arizona Statute Section 20-651. In accordance with the products/transactions recorded within the Separate Accounts, some assets are considered legally insulated whereas others are not legally insulated from the General Account. (The legal insulation of the Separate Accounts assets prevents such assets from being generally available to satisfy claims resulting from the General Account.) As of December 31, 2018 and 2017, the Company’s Separate Accounts statement included legally insulated assets of $2,240.3 million and $2,397.0 million , and not legally insulated of $40.5 million and $30.3 million , respectively. The assets legally insulated include $527.6 million and $637.9 million of variable annuities and $1,712.7 million and $1,759.1 million for variable life as of December 31, 2018 and December 31, 2017, respectfully. The non-insulated assets represent variable life. In accordance with the products/transaction recorded within the Separate Accounts, some Separate Accounts liabilities are guaranteed by the General Account. (In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the General Account.) Most of the Separate Accounts’ products the Company offers with guarantees from the General Account do not have explicit charges broken out from other M & E charges. For products with explicit charges for guarantees from the General Account, the Separate Accounts have paid risk charges of $0.4 million and $0.3 million and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. For the years ended December 31, 2018, 2017 and 2016, the General Account of the Company has paid $1.0 million , $0.8 million and $1.8 million toward Separate Accounts’ guarantees. None of the Company’s Separate Accounts engage in securities lending transactions. General Nature and Characteristics of Separate Accounts Business Separate and variable accounts held by the Company primarily represent funds for individual flexible payment variable annuity contracts of a non-guaranteed nature. These variable annuities generally provide incidental death benefit of the greater of account value or premium paid less any surrenders and surrender charges. Certain other Separate Accounts are used as funding vehicles for flexible premium variable life insurance policies, variable universal life insurance policies, survivorship variable universal life insurance policies, and corporate sponsored variable universal life insurance policies. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative. The assets and liabilities of these accounts are carried at market. This business has been included in Column 4 of the table below. Certain other Separate Accounts are used as funding vehicles for variable universal life insurance policies. These policies provide guaranteed interest rates of 4% or less or are segregated assets to support the equity indexed option of these policies. The assets of these Separate Accounts are carried at amortized cost. This business has been included in Column 1 and Column 2 of the table below. Information regarding the Separate Accounts of the Company is as follows (in millions): Separate Accounts with Guarantees Non-Guaranteed Separate Accounts Total Indexed Non-Indexed Guarantee Less than/equal to 4% Non-Indexed Guarantee More than 4% (in millions) Premiums, considerations or deposits for the year ended December 31, 2018 $ — $ — $ — $ 239.0 $ 239.0 Reserves at December 31, 2018 for accounts with assets at: Market value $ — $ — $ — $ 1,664.6 $ 1,664.6 Amortized cost 30.3 373.5 — — 403.8 Total reserves $ 30.3 $ 373.5 $ — $ 1,664.6 $ 2,068.4 By withdrawal characteristics: Subject to discretionary withdrawal: With market value adjustment $ 30.3 $ — $ — $ — $ 30.3 At book value without market value adjustment and with current surrender charge of 5% or more — — — 1,664.6 1,664.6 At market value At book value without market value adjustment and with current surrender charge less than 5% — 373.5 — — 373.5 Subtotal 30.3 373.5 — 1,664.6 2,068.4 Not subject to discretionary withdrawal — — — — — Total (Gross: Direct and Assumed) (1) $ 30.3 $ 373.5 $ — $ 1,664.6 $ 2,068.4 ____________ (1) The Separate Accounts reserves are subject to $952.6 million of MODCO Reinsurance with Protective. |
LOSS_CLAIM ADJUSTMENT EXPENSES
LOSS/CLAIM ADJUSTMENT EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
LOSS/CLAIM ADJUSTMENT EXPENSES | LOSS/CLAIM ADJUSTMENT EXPENSES The liability for unpaid claims and claim expenses as of December 31, 2018 and 2017 is as follows: Liability for Unpaid Claims and Claim Expenses December 31, 2018 2017 (in millions) Group Employee Benefits $ 31.3 $ 12.0 Gross Balance at January 1, $ 12.0 $ 1.1 Less Reinsurance 4.1 0.1 Net Balance at January 1, $ 7.9 $ 1.0 Incurred Claims (net) Related to: Current Year $ 41.9 $ 17.3 Prior Year — (0.5 ) Total Incurred $ 41.9 $ 16.8 Paid Claims (net) Related to: Current Year $ 24.6 $ 9.7 Prior Year 4.8 0.2 Total Paid $ 29.4 $ 9.9 Net Balance at December 31, $ 20.4 $ 7.9 Add Reinsurance 10.9 4.1 Gross Balance at December 31, $ 31.3 $ 12.0 The table below presents incurred and paid claims development as of December 31, 2018, net of reinsurance, cumulative claims frequency, and total incurred but not reported liability ("IBNR") for MLOA's long-term disability business: 2018 2017 IBNR Claim Frequency (in millions) Long-term Disability Incurral Year 2017 $ 2.5 $ 3.1 $ — 107 2018 7.4 — 2.8 146 Cumulative LTD Incurred Claims $ 9.9 $ 3.1 $ 2.8 The table below presents incurred and paid claims development as of December 31, 2017, net of reinsurance, cumulative claims frequency, and total incurred but not reported liability ("IBNR") for MLOA's long-term disability business: 2017 IBNR Claim Frequency (in millions) Long-term Disability Incurral Year 2017 $ 3.1 $ 1.2 56 Cumulative LTD Incurred Claims $ 3.1 $ 1.2 The claim frequency for long-term disability represents the number of unique claim events for which benefit payments have been made. Claim events are identified using a unique claimant identifier and incurral date (claim event date). Thus, if an individual has multiple claims for different disabling events (and thus different disability dates), each will be reported as a unique claim event. However, if an individual receives multiple benefits under more than one policy (for example, supplementary disability benefits in addition to the base policy), we treat it as a single claim occurrence because they are related to a single claim event. Claim frequency is expected to be lower for the most recent incurral year because claimants have to satisfy elimination period before being eligible for benefits. The historical claim payout pattern for the long-term disability for the years presented in the development table is not available because this is a relatively new line of business. MLOA discounts long-term disability liabilities as benefit payments are made over extended periods. Discount rate assumptions for these liabilities are based on the prescribed Statutory rates by year of incurral. The following table reconciles the long-term disability net incurred and paid claims development table to the liability for unpaid claims and claim expenses in the Company’s balance sheet as of December 31, 2018 and 2017: December 31, 2018 2017 (in millions) Long-Term Disability Claim Development Table, net of reinsurance Undiscounted LTD Incurred Claims, net of reins $ 9.9 $ 3.2 Subtract Cumulative LTD Paid Claims, net of reins (1.3 ) (0.1 ) Subtract Impact of LTD Discounting, net of reins (0.8 ) (0.1 ) LTD liabilities for unpaid claim and claim expense, net of reinsurance $ 7.8 $ 3.0 Unpaid Claims and Claim Expenses, net of reinsurance LTD liabilities for unpaid claim and claim expense, net of reinsurance $ 7.8 $ 3.0 Other short-duration contracts, net of reinsurance 12.6 4.9 Total liabilities for unpaid claim and claim expense, net of reinsurance $ 20.4 $ 7.9 Reinsurance Recoverable on unpaid claims Long-term disability $ 8.9 $ 3.3 Other short-duration contracts 2.0 0.8 Total Reinsurance Recoverable $ 10.9 $ 4.1 Total liability for unpaid claim and claim expense $ 31.3 $ 12.0 |
DEBT AND FEDERAL HOME LOAN BANK
DEBT AND FEDERAL HOME LOAN BANK (FHLB) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT AND FEDERAL HOME LOAN BANK (FHLB) | DEBT AND FEDERAL HOME LOAN BANK (“FHLB”) The Company has no debt and capital note obligations outstanding as of December 31, 2018 or 2017. During 2018, the Company invested $2.0 million in Class B membership stock in the FHLB. There was no investment in 2017. As a result of the investment, the Company has the capacity to borrow up to $300 million from the FHLB. As of December 2018, the Company had no borrowings from FHLB. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Certain employees of AXA Equitable who perform services for MLOA participate in various share-based payment arrangements sponsored by Equitable Holdings or AXA. MLOA was allocated $3 million of compensation costs, included in Operating expenses in the statements of operations - statutory basis, for share-based payment arrangements during each of the years ended December 31, 2018, 2017 and 2016 . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On February 7, 2019, the Arizona Department of Insurance granted the Company permission to accrue as of December 31, 2018, a $70.0 million capital contribution from its parent AEFS. This amount was settled on February 20, 2019. On March 25, 2019, AXA completed a follow-on secondary offering of 46 million shares of common stock of Equitable Holdings and the sale to Equitable Holdings of 30 million shares of common stock of Equitable Holdings. Following the completion of this secondary offering and share buyback by Equitable Holdings, AXA owns 48.3% of the shares of common stock of Equitable Holdings. As a result, Equitable Holdings is no longer a majority owned subsidiary of AXA. Events and transactions subsequent to the balance sheet date have been evaluated by management, for purpose of recognition or disclosure in these financial statements, through their date of issue on April 12, 2019. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Use of Estimates in Preparation of the Financial Statements The preparation of financial statements in conformity with SAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results could differ from those estimates. Some of the significant estimates include those used in determining measurement of an impairment; valuation of investments, including derivatives (in the absence of quoted market values) and the recognition of other than temporary impairments; aggregate reserves; claim liabilities; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters, if applicable. Significant Accounting Policies The accompanying financial statements of MLOA have been prepared in conformity with accounting practices prescribed or permitted by the Arizona Department of Insurance ("SAP"). The Arizona Department of Insurance recognizes only SAP for determining and reporting the financial condition and results of operations of an insurance company in order to determine its solvency under the Arizona State Insurance Laws. The National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted practices by the State of Arizona. NAIC SAP is comprised of the Preamble, the Statements of Statutory Accounting Principles (“SSAP”), and Appendices. |
Accounting Changes | Accounting Changes Accounting changes adopted to conform to the provisions of NAIC SAP are reported as changes in accounting principles. The cumulative effect of changes in accounting principles are reported as an adjustment to unassigned surplus in the period of the change in accounting principle. The cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. During 2018, 2017 and 2016, there were no new accounting changes that had a material effect on the Company’s financial statements. |
New Accounting Pronouncements | New Accounting Pronouncement: Principal based reserving (“PBR”) is a new method of calculating life insurance reserves for term and universal life with secondary guarantees. Adoption of the PBR is optional until January 1, 2020, when it is effective and only applies to new business sold after the Company adopts the methodology. The Company has begun selling PBR-based universal life type products in 2018 and will continue to grow our portfolio of PBR-based products during the PBR phase in period. |
Difference between GAAP and SAP | Difference between Generally Accepted Accounting Principles ("GAAP") and SAP The differences between statutory surplus and capital stock determined in accordance with SAP and total shareholder’s equity under GAAP are primarily: (a) the inclusion in SAP of an Asset Valuation Reserve ("AVR"); (b) policy reserves and deposit life funds under SAP differ from GAAP due to differences between actuarial assumptions and reserving methodologies; (c) certain policy acquisition costs are expensed under SAP but deferred under GAAP and amortized over future periods; (d) under SAP, Federal income taxes are provided on the basis of amounts currently payable and deferred federal income taxes are provided for temporary differences for the expected future tax consequences of events that have been recognized in the Company's financial statements. Changes in deferred income taxes are charged directly to surplus and have no impact on earnings. Further, deferred tax assets are reflected to the extent the probability of realization is more likely than not and admissibility of deferred tax assets than are considered realizable is limited while under GAAP, current and deferred Federal income taxes are reported in both income and comprehensive income and deferred federal income taxes are provided for temporary differences for the expected future tax consequences of events that have been recognized in the Company's financial statements. Deferred tax assets are subject to a similar realization assessment under GAAP; (e) the valuation of assets under SAP and GAAP differ due to different investment valuation and depreciation methodologies, as well as the deferral under SAP of interest-related realized capital gains and losses on fixed income investments through the Interest Maintenance Reserve ("IMR") intended to stabilize surplus from fluctuations in the value of the investment portfolio; (f) the valuation of the investment in AllianceBernstein L.P. ("AllianceBernstein") under SAP reflects a portion of the market value change rather than the equity in the underlying net assets as required under GAAP; (g) certain assets, primarily prepaid assets, certain deferred taxes and computer software development costs, are not admissible under SAP but are admissible under GAAP; (h) the fair valuing of all acquired assets and liabilities including VOBA and intangible assets required for GAAP purchase accounting is not recognized in SAP; (i) reserves and reinsurance recoverables on unpaid claims on reinsured business are netted in aggregate reserves and the liability for life policy claims, respectively, under SAP while under GAAP these reinsured amounts are reflected as an asset; (j) under SAP, premiums, regardless of policy type, are recognized when due and include the change in the deferred premium asset while under GAAP revenue recognition varies by product type and does not include the change in deferred premiums; and (k) derivatives unrealized gains and losses flow through surplus under SAP but through income under GAAP. The effects of the differences between GAAP and SAP on the accompanying statutory financial statements are material. |
Recognition of Insurance Income and Related Expenses | Recognition of Premium and Related Expenses Premiums, considerations and purchase payments are generally recognized as income when due. Payments on deposit-type contracts are recorded to the policy reserve. Policy acquisition costs incurred in connection with the acquiring of new business, such as commissions, underwriting, agency and policy issuance expenses, are charged to operations as incurred. |
Reinsurance Ceded | Reinsurance Ceded Policy and contract liabilities ceded to reinsurers under coinsurance agreements have been reported as reductions of the related reserves. Any reinsurance balance amounts deemed to be uncollectible are written off through a charge to earnings. A liability for reinsurance balances is provided for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability for unauthorized reinsurers are credited or charged to surplus. Any increase in surplus net of tax resulting from a new reinsurance agreement is recognized as a direct credit to surplus. Recognition of the surplus increase as income is amortized net of tax as earnings emerge from the business reinsured, with no additional impact to surplus. Losses from new reinsurance treaties are expensed immediately. |
Investments | Valuation of Investments Bonds, which consist of long-term bonds, are stated primarily at amortized cost in accordance with the valuation prescribed by the Department and the NAIC. Bonds rated by the NAIC are classified into six categories ranging from highest quality bonds to those in or near default. Bonds rated in the top five categories are generally valued at amortized cost while bonds rated at the lowest category are valued at lower of amortized cost or fair market value. The Company follows both the prospective and retrospective methods for amortizing bond premium and discount. Both methods require the recalculation of the effective yield at each reporting date if there has been a change in the underlying assumptions. For the prospective method, the recalculated yield will equate the carrying amount of the investment to the present value of the anticipated future cash flows. The recalculated yield is then used to accrue income on the investment balance for subsequent accounting periods. There are no accounting changes in the current period unless the undiscounted anticipated cash flow is less than the carrying amount of the investment. For the retrospective method, the recalculated yield is the rate that equates the present value of actual and anticipated future cash flows with the original cost of the investment. The current balance of the investment is increased or decreased to the amount that would have resulted had the revised yield been applied since inception and investment income is correspondingly decreased or increased. For other than temporary impairments, the cost basis of the bond excluding loan-backed and structured securities is written down to fair market value as a new cost basis and the amount of the write down is accounted for as a realized loss. Mortgage backed and assets backed bonds are amortized using the effective interest method including anticipated prepayments from the date of purchase; significant changes in the estimated cash flows from original purchase assumptions are accounted for using the retrospective method. Mortgage backed and asset backed bonds carrying values are adjusted for impairment deemed to be other than temporary through write-downs recorded as realized capital losses. Prepayment assumptions for loan-backed bonds and structured securities were obtained from broker-dealer survey values or internal estimates. These assumptions are consistent with the current interest rate and economic environment. The retrospective adjustment method is predominately used to value securities except issues in default; the prospective adjustment method was used to value issues in default and issues that have a variable interest rate. Publicly traded unaffiliated common stocks are stated at market value; common stocks not publicly traded are stated at fair value. Common stock values are adjusted for impairments in value deemed to be other than temporary through write-downs recorded as realized capital losses. Preferred stocks are included with fixed maturities. They are stated principally at amortized cost and are adjusted to regulatory mandated values through the establishment of a valuation allowance, and for impairments in value deemed to be other than temporary through write-downs recorded as realized capital losses. The preferred stock investments include real estate investment trusts (“REIT”) nonredeemable and redeemable preferred stock. Preferred stock investments may not have a stated maturity, may not be cumulative and do not provide for mandatory redemption by the issuer. Short-term investments are stated at cost or amortized cost, which approximates market value. Cash and cash equivalents includes cash on hand, money market funds, amounts due from banks, highly liquid debt instruments purchased with a maturity of three months or less, and certificates of deposit with a maturity of one year or less. Mortgage loans on real estate are stated at unpaid principal balances net of unamortized discounts or premiums, fees and valuation allowances. Valuation allowances are established for mortgage loans that are considered impaired by management and recorded based on the difference between collateral value less estimated sales costs and the amortized cost of the mortgage loan. A mortgage loan that is considered other than temporary impairment impaired by management is written down to collateral value less estimated sales costs with the write-down recorded as a realized capital loss. Mortgage loans for which foreclosure is probable are considered other than temporary impairment impaired by management. Policy loans are stated at unpaid principal balances. Equity partnership investments are accounted for using the equity method. Changes in the equity value are recorded to unrealized capital gains and losses, unless partnership values are adjusted for impairments in value deemed to be other than temporary through write-downs recorded as realized capital losses. Real estate acquired in satisfaction of debt is valued at the lower of unpaid principal balance or estimated fair value at the date of acquisition. Real estate held for investment is reviewed for impairment annually and whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable. Impaired real estate is written down to fair value with the impairment loss being included in net realized capital losses. Real estate which management has committed to disposing of by sale or abandonment is carried at the lower of estimated fair value less disposition costs or depreciated cost. Real estate held for sale is reviewed quarterly with the shortfall recorded as impairment with a corresponding charge to net realized capital losses. As of December 31, 2018, the Company has no real estate. Real estate joint ventures are reported principally on the equity method of accounting. The results of real estate joint ventures are adjusted for depreciation, write-downs and valuation allowances. As of December 31, 2018, the Company has no real estate joint ventures. Depreciation of directly owned real estate and real estate owned by joint ventures is computed using the straight line method, generally ranging from 40 to 50 years . As of December 31, 2018, the Company has no real estate. All insurance subsidiaries are reported at their respective statutory net equity values. Currently, the only affiliate investment the Company has is AllianceBernstein. The reporting valuation bases for all other subsidiaries (excluding AllianceBernstein L.P. (“AllianceBernstein”)) are reported principally on the equity method of accounting. The Company adopted the market valuation method as the reporting valuation basis for its ownership of AllianceBernstein units in order to conform to the provisions of NAIC SAP. The Company and insurance affiliates petitioned and received from the Securities Valuation Office (SVO) a valuation of its AllianceBernstein units. Derivatives are used for asset/liability risk management. If the hedging relationship is effective, the derivative is accounted for in the same manner as the hedged item. If the derivative is not in an effective hedging relationship, the derivative is marked to fair value by recording an unrealized gain or loss (see Note 6 for additional information). In addition, MLOA has executed various collateral arrangements with counterparties to over-the-counter derivative transactions that require both pledging and accepting collateral either in the form of cash or high-quality securities, such as Treasuries or those issued by government agencies, or, for some counterparties, investment-grade corporate bonds. Realized Investment Gains (Losses) and Unrealized Capital Gains (Losses) Realized investment gains (losses) are determined by identification with the specific asset and are presented as a component of net income. The change in unrealized capital gains (losses) is presented as a component of change in surplus. The AVR and IMR are required under SAP. The AVR for the General Account and Separate Accounts for which MLOA bears the investment risk is determined by a specified formula and provides for possible future investment losses through charges to capital and surplus. The AVR requires reserves for bonds, preferred stocks, common stocks, mortgage loans on real estate, real estate, and other investments. The IMR captures, for all types of fixed income investments, the realized investment gains and losses which result from changes in the overall level of interest rates. These deferred investment gains or losses are amortized into income over the remaining term to maturity of the investments sold. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Included in various investment-related line items in the financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value, such as when impaired, or, for certain bonds and preferred stock when carried at the lower of cost or market. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value: Level 1 Quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data. Level 3 Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability. The Company determines fair value based upon quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are measured using present value or other valuation techniques. The fair value determinations are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair values cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument. Management is responsible for the determination of the value of investments carried at fair value and the supporting methodologies and assumptions. Under the terms of various service agreements, the Company often utilizes independent valuation service providers to gather, analyze, and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual securities. These independent valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested. As further described below with respect to specific asset classes, these inputs include, but are not limited to, market prices for recent trades and transactions in comparable securities, benchmark yields, interest rate yield curves, credit spreads, quoted prices for similar securities, and other market-observable information, as applicable. Specific attributes of the security being valued also are considered, including its term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security- or issuer-specific information. When insufficient market observable information is available upon which to measure fair value, the Company either will request brokers knowledgeable about these securities to provide a non-binding quote or will employ widely accepted internal valuation models. Fair values received from independent valuation service providers and brokers and those internally modeled or otherwise estimated are assessed for reasonableness. To validate reasonableness, prices also are internally reviewed by those with relevant expertise through comparison with directly observed recent market trades. |
Separate Accounts | Separate Accounts Separate Accounts’ assets and liabilities represent primarily segregated funds administered and invested by the Company for the benefit of certain contract holders. Approximately 81 percent of these assets consist of securities reported at market value and 19 percent consist of fixed maturity securities carried at amortized cost in a book value Separate Accounts. Premiums, benefits and expenses of the Separate Accounts are included in the Company’s Statements of Operations - Statutory Basis. Under the Protective Reinsurance Agreement, Separate Accounts products subject to the Agreement are ceded on a modified coinsurance (“MODCO”) basis, with Separate Accounts’ assets and liabilities remaining with MLOA. The Separate Accounts net gains from operations and fees associated with these Separate Accounts contracts (recorded to “Other income”) and the Net transfers to or (from) Separate Accounts are ceded to Protective, and included in the “Separate Accounts’ modified coinsurance reinsurance” line in the Statements of Operations - Statutory Basis. |
Nonadmitted Assets | Nonadmitted Assets Certain assets designated as “nonadmitted” (certain deferred taxes, prepaid expenses, furniture and equipment, leasehold improvements, accrued interest on certain investments, intangible asset, and non-operating system software expenses) are excluded from assets and statutory surplus. |
Aggregate Reserve | Aggregate Reserves Aggregate reserves for insurance and annuity policies are generally computed under the Commissioners' Reserve Valuation Method and Commissioners' Annuity Reserve Valuation Method, respectively, or otherwise under the net level premium method or comparable method, and are subject to reserve adequacy testing. Reserves for the indexed universal life products introduced in 2018 are principle-based reserves computed in accordance with NAIC VM-20. Benefit reserves are computed using statutory mortality and interest requirements and are generally determined without consideration of future withdrawals. Interest rates used in establishing such reserves range from 3.5% to 6.0% for life insurance reserves. |
Income Taxes | Federal Income Taxes The Company has a tax sharing agreement with Equitable Holdings and is included in a consolidated federal income tax return together with Equitable Holdings and other affiliates. In accordance with the tax sharing agreement, tax expense is based on a separate company computation. Any loss not currently usable is carried forward and credited when usable by the Company on a separate basis. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Revision of Prior Period Financial Statements | The following tables present line items in the Company’s financial statements - statutory basis as of and for the year ended December 31, 2017 that have been affected by the revisions. For these items, the tables detail the amounts as previously reported, the impact upon those line items due to the adjustments, and the amounts as currently revised. December 31, 2017 As Reported Adjustments As Revised (in millions) Balance Sheets - Statutory Basis LIABILITIES AND CAPITAL AND SURPLUS: Policy reserves and deposit-type funds 1,013.1 15.7 1,028.8 Total Liabilities 3,432.4 15.7 3,448.1 Capital and surplus: Capital and Surplus 302.7 (15.7 ) 287.0 Total Liabilities and Capital and Surplus $ 3,735.1 $ — $ 3,735.1 Year Ended December 31, 2017 As Reported Adjustments As Revised (in millions) Statement of Operations - Statutory Basis BENEFITS AND EXPENSES: Increase (decrease) in reserves 255.1 (1.2 ) 253.9 Total Expenses 696.9 (1.2 ) 695.7 Net gain (loss) from operations before federal income taxes ("FIT") (57.9 ) 1.2 (56.7 ) FIT expense (benefit) incurred (excluding tax on capital gains) (22.3 ) 1.0 (21.3 ) Net gain (loss) from operations (35.6 ) 0.2 (35.4 ) Net income (loss) $ (12.4 ) $ 0.2 $ (12.2 ) Statement of Changes in Capital and Surplus - Statutory Basis Balance, beginning of year: Unassigned surplus (deficit) $ (77.1 ) $ (15.9 ) $ (93.0 ) Total capital and surplus 318.6 (15.9 ) 302.7 Net income (loss) (12.4 ) 0.2 (12.2 ) Net change in Capital and Surplus (15.9 ) 0.2 (15.7 ) Balance, end of year: Unassigned surplus (deficit) (93.0 ) (15.7 ) (108.7 ) Total capital and surplus $ 302.7 $ (15.7 ) $ 287.0 The following tables present line items in the Company’s financial statements -statutory basis for the year ended December 31, 2016 that have been affected by the revisions. For these items, the tables detail the amounts as previously reported, the impact upon those line items due to the adjustments, and the amounts as currently revised. Year Ended December 31, 2016 As Reported Adjustments As Revised (in millions) Statement of Operations - Statutory Basis BENEFITS AND EXPENSES: Increase (decrease) in reserves $ 199.1 $ 6.4 $ 205.5 Total benefits and expenses 593.8 6.4 600.2 Net gain (loss) from operations before federal income taxes ("FIT") (24.5 ) (6.4 ) (30.9 ) FIT incurred (excluding tax on capital gains) (15.2 ) 2.2 (13.0 ) Net gain (loss) from operations (9.3 ) (8.6 ) (17.9 ) Net income (loss) $ (14.4 ) $ (8.6 ) $ (23.0 ) Year Ended December 31, 2016 As Reported Adjustments As Revised (in millions) Statement of Changes in Capital and Surplus - Statutory Basis Balance, beginning of year: Unassigned surplus (deficit) $ (42.9 ) $ (16.4 ) $ (59.3 ) Total capital and surplus 352.8 (16.4 ) 336.4 Net income (loss) (14.4 ) (8.6 ) (23.0 ) Prior year correction (9.1 ) 9.1 — Net change in Capital and Surplus (34.2 ) 0.5 (33.7 ) Balance, end of year: Unassigned surplus (deficit) (77.1 ) (15.9 ) (93.0 ) Total capital and surplus $ 318.6 $ (15.9 ) $ 302.7 |
Statutory Accounting Practices Disclosure | Listed below is the reconciliation between the accompanying audited financial statements and the Annual Statement as filed: 2018 Total Assets Total Liabilities Capital and Surplus Total Liabilities Surplus and Other Funds Net Income (in millions) Annual Statement, as filed $ 3,704.8 $ 3,482.4 $ 222.4 $ 3,704.8 $ (89.4 ) Adjustment for reserves — — — — 0.6 Audited statutory financial statements as reported herein $ 3,704.8 $ 3,482.4 $ 222.4 $ 3,704.8 $ (88.8 ) 2017 Total Assets Total Liabilities Capital and Surplus Total Liabilities Surplus and Other Funds Net Income (in millions) Annual Statement, as filed $ 3,735.1 $ 3,432.4 $ 302.7 $ 3,735.1 $ (12.4 ) Adjustment for reserves — 15.7 (15.7 ) — 0.2 Audited statutory financial statements as reported herein $ 3,735.1 $ 3,448.1 $ 287.0 $ 3,735.1 $ (12.2 ) 2016 Total Assets Total Liabilities Capital and Surplus Total Liabilities Surplus and Other Funds Net Income (in millions) Annual Statement, as filed $ 3,155.6 $ 2,837.0 $ 318.6 $ 3,155.6 $ (14.4 ) Adjustment for reserves 1.0 16.4 (15.9 ) 1.0 (8.6 ) Audited statutory financial statements as reported herein $ 3,156.6 $ 2,853.4 $ 302.7 $ 3,156.6 $ (23.0 ) |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Trading, and Equity Securities, FV-NI | The following tables provide additional information relating to fixed maturities and common stock held: Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) December 31, 2018 Fixed Maturities: U.S. Government $ 8.5 $ 0.1 $ 0.2 $ 8.4 Special Revenue and Special Assess. Obligations 0.5 0.3 — 0.8 Political Subdivisions of States and Territories 3.6 0.1 — 3.7 Industrial and Miscellaneous (Unaffiliated) 1,052.9 2.2 54.4 1,000.7 Preferred Stocks 4.2 — 0.4 3.8 Total Fixed Maturities $ 1,069.7 $ 2.7 $ 55.0 $ 1,017.4 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Adjusted Cost (in millions) Common Stocks: Unaffiliated $ 2.0 $ — $ — $ 2.0 Total Unaffiliated Common Stocks $ 2.0 $ — $ — $ 2.0 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) December 31, 2017 Fixed Maturities: U.S. Government $ 194.3 $ 1.0 $ 0.3 $ 195.0 Special Revenue and Special Assess. Obligations 0.5 — — 0.5 Political Subdivisions of States and Territories 4.5 0.2 — 4.7 Industrial and Miscellaneous (Unaffiliated) 822.1 18.1 2.4 837.8 Preferred Stocks 4.2 — — 4.2 Total Fixed Maturities $ 1,025.6 $ 19.3 $ 2.7 $ 1,042.2 Carrying Value Gross Unrealized Gains Gross Unrealized Losses Adjusted Cost (in millions) Common Stocks: Unaffiliated $ — $ — $ — $ — Total Unaffiliated Common Stocks $ — $ — $ — $ — |
Investments Classified by Contractual Maturity Date | The carrying value and estimated fair value of fixed maturities at December 31, 2018, by contractual maturity are as follows: Carrying Value Estimated Fair (in millions) Due in one year or less $ 0.3 $ 0.6 Due after one year through five years 60.8 61.6 Due after five years through ten years 659.0 639.7 Due after ten years 345.2 311.5 Mortgage-backed securities 0.2 0.2 Preferred stocks 4.2 3.8 Total Fixed maturities $ 1,069.7 $ 1,017.4 |
Schedule of Unrealized Loss on Investments | The following table discloses fixed maturities ( 235 issues) and ( 56 issues), respectively, that have been in a continuous unrealized loss position for less than a twelve month period or greater than a twelve month period as of December 31, 2018 and 2017, respectively (in millions): Less than 12 Months 12 Months or Longer Total Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses (in millions) December 31, 2018 Fixed Maturities: U.S. Government $ — $ — $ 4.6 $ 0.2 $ 4.6 $ 0.2 Industrial and Miscellaneous (Unaffiliated) 372.8 15.6 470.6 38.8 843.4 54.4 Preferred Stocks 1.9 0.1 1.9 0.3 3.8 0.4 Total Fixed Maturities $ 374.7 $ 15.7 $ 477.1 $ 39.3 $ 851.8 $ 55.0 Less than 12 Months 12 Months or Longer Total Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses Estimated Fair Gross Unrealized Losses (in millions) December 31, 2017 Fixed Maturities: U.S. Government $ 16.2 $ 0.2 $ 3.5 $ 0.1 $ 19.7 $ 0.3 Industrial and Miscellaneous (Unaffiliated) 126.5 1.1 44.5 1.3 171.0 2.4 Preferred Stocks 2.2 — — — 2.2 — Total Fixed Maturities $ 144.9 $ 1.3 $ 48.0 $ 1.4 $ 192.9 $ 2.7 All impaired securities (fair value is less than cost or amortized cost) for which an other-than-temporary impairment has not been recognized in earnings as a realized loss (including securities with a recognized other-than-temporary impairment for non-interest related declines when a non-recognized interest related impairment remains) as of December 31, 2018: Less than 12 Months 12 Months or Longer (in millions) The aggregate amount of unrealized losses $ 0.3 $ — The aggregate related fair value of securities with unrealized losses $ 4.7 $ — |
Offsetting Assets And Liabilities | Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities December 31, 2018 Description Gross Amounts Recognized Amount Offset Net Amount Presented in the Balance Sheets (in millions) ASSETS Total Derivatives $ 19.6 $ 0.9 $ 18.7 LIABILITIES Total Derivatives $ 0.9 $ 0.9 $ — Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities December 31, 2017 Description Gross Amounts Recognized Amount Offset Net Amount Presented in the Balance Sheets (in millions) ASSETS Total Derivatives $ 119.3 $ 30.4 $ 88.9 LIABILITIES Total Derivatives $ 30.4 $ 30.4 $ — |
Realized Gain (Loss) on Investments | The following table summarizes the realized capital gains (losses) for the years ended December 31, 2018, 2017 and 2016: Years Ended December 31, 2018 2017 2016 (in millions) Fixed maturities $ (9.5 ) $ 0.2 $ (4.3 ) Derivative instruments 5.8 41.8 (2.0 ) Amounts transferred to interest maintenance reserve (“IMR”) net of tax 5.9 (4.2 ) — Tax (expense) credits (1.2 ) (14.6 ) 1.2 Net Realized Capital Gains (Losses) $ 1.0 $ 23.2 $ (5.1 ) |
INVESTMENT INCOME (Tables)
INVESTMENT INCOME (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Net Investment Income | The following table summarizes the net investment income for December 31, 2018, 2017 and 2016 (in millions): Years Ended December 31, 2018 2017 2016 (in millions) Fixed maturities $ 39.8 $ 34.2 $ 29.1 Affiliated dividends 8.2 6.2 5.1 Mortgage loans 0.6 0.6 0.6 Policy loans 2.2 1.5 1.2 Cash and short-term instruments 1.3 0.5 0.2 Investment expense and other (3.7 ) (3.5 ) (3.2 ) Amortization of IMR 0.8 0.7 0.2 Net investment income $ 49.2 $ 40.2 $ 33.2 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The table below summarizes the market value of the Company’s financial instruments with off-balance-sheet risk. Assets Liabilities 2018 2017 2018 2017 (in millions) Equity options 13.3 119.3 0.9 30.4 Total $ 13.3 $ 119.3 $ 0.9 $ 30.4 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Admission Calculation Components December 31, 2018 December 31, 2017 Change Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total (in millions) Federal income taxes paid in prior years recoverable through loss carrybacks $ — $ — $ — $ — $ — $ — $ — $ — $ — Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: 14.3 — 14.3 10.5 — $ 10.5 3.8 — 3.8 Adjusted gross deferred tax assets expected to be realized following the balance sheet date 14.3 — 14.3 10.5 — $ 10.5 3.8 — 3.8 Adjusted gross deferred tax assets allowed per limitation threshold XXX XXX 31.1 XXX XXX — XXX XXX 31.1 Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities 9.0 — 9.0 19.8 — 19.8 (10.8 ) — (10.8 ) Deferred tax assets admitted as the result of application of SSAP 101 $ 23.3 $ — $ 23.3 $ 30.3 $ — $ 30.3 $ (7.0 ) $ — $ (7.0 ) December 31, 2018 Ordinary Capital Adjusted gross DTAs amount from Note 9A1(c) $ 72.8 $ 2.1 Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies — % — % Net Admitted Adjusted Gross DTAs amount from Note 9A1(e) $ 23.3 $ — Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies — % — % The change in net deferred income taxes is comprised of the following (in millions): December 31, 2018 2017 Change (in millions) Total deferred tax assets $ 74.9 $ 54.3 $ 20.6 Total deferred tax liabilities (9.0 ) (19.8 ) 10.8 Net deferred tax assets/liabilities 65.9 34.5 31.4 Statutory valuation allowance adjustment — — — Net deferred tax assets/liabilities after SVA $ 65.9 $ 34.4 31.4 Tax effect of unrealized gains/(losses) 0.9 Incurred tax items in surplus — Change in net deferred income tax $ 32.3 December 31, 2018 2017 Ratio percentage used to determine recovery period and threshold limitation amount 680.260 % 1,014.312 % (in millions) Amount of adjusted capital and surplus used to determine recovery period and threshold limitation above $ 223.9 $ 292.0 Components of deferred tax assets (DTAs) and deferred tax liabilities (DTLs): DTA/DTL Components December 31, 2018 December 31, 2017 Change Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total (in millions) Gross deferred tax assets $ 72.8 $ 2.1 $ 74.9 $ 54.0 $ 0.3 $ 54.3 $ 18.8 $ 1.8 $ 20.6 Statutory valuation allowance adjustment — — — — — — — — — Adjusted gross deferred tax assets 72.8 2.1 74.9 54.0 0.3 54.3 18.8 1.8 20.6 Deferred tax assets nonadmitted 49.5 2.1 51.6 23.7 0.3 24.0 25.8 1.8 27.6 Subtotal net admitted deferred tax asset 23.3 — 23.3 30.3 — 30.3 (7.0 ) — (7.0 ) Deferred tax liabilities 3.9 5.1 9 16.6 3.2 19.8 (12.7 ) 1.9 (10.8 ) Net admitted deferred tax assets/(net deferred tax liability) $ 19.4 $ (5.1 ) $ 14.3 $ 13.7 $ (3.2 ) $ 10.5 $ 5.7 $ (1.9 ) $ 3.8 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in millions): December 31, 2018 December 31, 2017 Change Ordinary Capital Total Ordinary Capital Total Ordinary Capital Total (in millions) DTAs: Policyholder reserves $ 7.8 $ — $ 7.8 $ 16.3 $ — $ 16.3 $ (8.5 ) $ — $ (8.5 ) Investments — 0.5 0.5 0.3 0.3 — 0.2 0.2 Deferred acquisition costs 39.7 — 39.7 31.3 — 31.3 8.4 — 8.4 Nonadmitted 1.1 — 1.1 0.9 — 0.9 0.2 — 0.2 Net loss carry-forward 21.9 1.6 23.5 3.3 — 3.3 18.6 1.6 20.2 Tax credit carry-forward 1.8 — 1.8 1.8 — 1.8 — — — Other (including items <5% of total ordinary tax assets) 0.5 — 0.5 0.4 — 0.4 0.1 — 0.1 Total gross DTAs 72.8 2.1 74.9 54.0 0.3 54.3 18.8 1.8 20.6 Nonadmitted DTAs 49.5 2.1 51.6 23.7 0.3 24.0 25.8 1.8 27.6 Admitted DTAs 23.3 — 23.3 30.3 — 30.3 (7.0 ) — (7.0 ) DTLs: Investments — (5.1 ) (5.1 ) — (3.2 ) (3.2 ) — (1.9 ) (1.9 ) Deferred and uncollected premium (0.4 ) — (0.4 ) (1.0 ) — (1.0 ) 0.6 — 0.6 Policyholder reserves (3.4 ) — (3.4 ) (15.6 ) — (15.6 ) 12.2 — 12.2 Other (including items <5% of total ordinary tax assets) (0.1 ) — (0.1 ) — — — (0.1 ) — (0.1 ) Total DTLs (3.9 ) (5.1 ) (9.0 ) (16.6 ) (3.2 ) (19.8 ) 12.7 (1.9 ) 10.8 Net admitted (DTL)/DTA $ 19.4 $ (5.1 ) $ 14.3 $ 13.7 $ (3.2 ) $ 10.5 $ 5.7 $ (1.9 ) $ 3.8 |
Schedule of Components of Income Tax Expense (Benefit) | Significant components of income taxes incurred as summarized in the table below: Years Ended December 31, 2018 2017 2016 (in millions) Federal $ 7.6 $ (21.3 ) $ (13.0 ) Foreign — — — Subtotal 7.6 (21.3 ) (13.0 ) Federal income tax on net capital gains 1.2 14.6 (1.2 ) Utilization of capital loss carry-forwards — — — Other (8.4 ) 8.4 7.2 Federal and Foreign income taxes incurred $ 0.4 $ 1.7 $ (7.0 ) |
Schedule of Effective Income Tax Rate Reconciliation | The provision for federal and foreign income taxes incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes including realized capital gains/losses. Description Amount 21% Tax Effect Effective Tax Rate (in millions) Income before taxes (including all realized capital gains / (losses)) $ (85.7 ) $ (18.0 ) 21.00 % Dividends-received deduction (3.7 ) (0.8 ) 0.91 % Interest maintenance reserve (0.8 ) (0.2 ) 0.20 % IRS audit adjustment 1.9 0.4 (0.47 )% Deferred gain on reinsurance (19.8 ) (4.1 ) 4.85 % Incurred tax items in surplus (40.3 ) (8.5 ) 9.88 % Other, provision to return (2.0 ) (0.7 ) 0.81 % Total $ (150.4 ) $ (31.9 ) 37.18 % Federal income taxed incurred $ 0.4 (0.47 )% Change in net deferred income tax (32.3 ) 37.65 % Total statutory income taxes (31.9 ) 37.18 % |
Consolidated Tax Entities | The Company is included in a consolidated federal income tax return together with its ultimate domestic parent, Equitable Holdings and the following subsidiaries and affiliates. AXA Equitable Holdings, Inc. Trusted Investment Advisors Corp. AXA Equitable Life Insurance Company Trusted Insurance Advisors General Agency Corp. AXA Equitable Life and Annuity Company Financial Marketing Agency, Inc. AXA Distribution Holding Corp. AXA Technology Services America, Inc. AllianceBernstein Corp. AXA Corporate Solutions Life Reinsurance Company Equitable Structured Settlement Corp. EQ AZ Life Re Company Equitable Casualty Insurance Co. CS Life RE Company JMR Realty Services, Inc. U.S. Financial Life Insurance Company 1740 Advisers, Inc. AXA IM Holdings US, Inc. MONY Financial Services, Inc. Alpha Unit Holdings, Inc. |
Unrecognized Tax Benefits Reconciliation | A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows: Years Ended December 31, 2018 2017 2016 (in millions) Balance at January 1 $ 4.0 $ 4.0 $ 7.0 Additions for tax positions of prior years 0.2 — — Reduction for tax positions of prior years — — (3.0 ) Settlements with tax authorities — — — Balance at December 31 $ 4.2 $ 4.0 $ 4.0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loss Contingencies by Contingency | Number of jurisdictions, ranges of years used to discount and weighted average number of years of the discounting time period for payables and recoverables by insolvency: Name of the Insolvency Payables Recoverables Number of Jurisdictions Range of Years Weighted Average Number of Years Number of Jurisdictions Range of Years Weighted Average Number of Years Penn Treaty Network America Insurance Company 45 1-69 11 45 1-69 11 American Network Insurance Company 44 1-69 15 44 1-69 15 |
FAIR VALUE OF OTHER FINANCIAL_2
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | Fair Value Measurement at Reporting Date The following tables provide information as of December 31, 2018 and 2017 about MLOA’s financial assets measured at fair value: As of December 31, 2018 Level 1 Level 2 Level 3 Net Asset Value (NAV) Total (in millions) Assets at Fair Value: Bonds: Commercial Mortgage-Backed Securities $ — $ — $ — $ — $ — Total Bonds — — — — — Common Stocks: Industrial and Miscellaneous — — 2.0 — 2.0 Total Common Stocks — — 2.0 — 2.0 Derivative Assets: Options — 12.4 — — 12.4 Total Derivatives — 12.4 — — 12.4 Separate Accounts Assets (1) — — — 1,850.0 1,850.0 Total Assets at Fair Value $ — $ 12.4 $ 2.0 $ 1,850.0 $ 1,864.4 Liabilities at Fair Value: Derivative Liabilities $ — $ — $ — $ — $ — Total Liabilities at Fair Value $ — $ — $ — $ — $ — _______________ (1) Only Cash and Invested Assets. As of December 31, 2017 Level 1 Level 2 Level 3 Net Asset Value (NAV) Total (in millions) Assets at Fair Value : Bonds: Commercial Mortgage-Backed Securities $ — $ — $ — $ — $ — Total Bonds — — — — — Derivative Assets: Options — 88.9 — — 88.9 Total Derivatives — 88.9 — — 88.9 Separate Accounts Assets (1) — — — 2,014.0 2,014.0 Total Assets at Fair Value $ — $ 88.9 $ — $ 2,014.0 $ 2,102.9 Liabilities at Fair Value: Derivative Liabilities — — — — — Total Liabilities at Fair Value $ — $ — $ — $ — $ — _______________ (1) Only Cash and Invested Assets. The following table discloses carrying value and estimated fair value (defined within the fair value hierarchy) as of December 31, 2018 and 2017 for financial instruments: As of December 31, 2018 Type of Financial Instrument Aggregate Fair Value Admitted Assets Level 1 Level 2 Level 3 Net Asset Value (NAV) Not Practicable (Carrying Value) (in millions) Bonds $ 1,013.6 $ 1,065.5 $ — $ 1,002.6 $ 11.0 $ — $ — Preferred Stock $ 3.8 $ 4.2 $ 3.8 $ — $ — $ — $ — Common Stock (1) $ 72.7 $ 55.0 $ — $ — $ 72.7 $ — $ — Mortgage Loans on Real Estate $ 16.2 $ 17.0 $ — $ — $ 16.2 $ — $ — Policy Loans $ 121.9 $ 109.9 $ — $ — $ 121.9 $ — $ — Derivatives $ 18.7 $ 18.7 $ — $ 12.4 $ — $ — $ — Separate Accounts (2) $ 2,271.8 $ 2,276.6 $ 421.8 $ — $ — $ 1,850.0 $ — Policyholders liabilities: Investment contracts $ 4.9 $ 4.9 $ — $ — $ 4.9 $ — $ — _______________ (1) The difference between the admitted value and aggregate fair entirely represents affiliated holdings of AllianceBernstein units, which for statutory admitted carrying value is discounted by 25% as of December 31, 2018. The discount is based on SSAP #97 sliding scale and approved by the SVO. (2) Only Cash and Invested Assets. As of December 31, 2017 Type of Financial Instrument Aggregate Fair Value Admitted Assets Level 1 Level 2 Level 3 Net Asset Value (NAV) Not Practicable (Carrying Value) (in millions) Bonds $ 1,038.0 $ 1,021.4 $ — $ 1,032.5 $ — $ — $ — Preferred Stock $ 4.2 $ 4.2 $ 4.2 $ — $ — $ — $ — Common Stock (1) $ 64.8 $ 48.6 $ — $ — $ 64.8 $ — $ — Mortgage Loans on Real Estate $ 16.8 $ 17.0 $ — $ — $ — $ — $ — Policy Loans $ 65.3 $ 57.2 $ — $ — $ 65.3 $ — $ — Derivatives $ 88.9 $ 88.9 $ — $ 88.9 $ — $ — $ — Separate Accounts (2) $ 2,432.1 $ 2,422.9 $ 418.1 $ — $ — $ 2,014.0 $ — Policyholders liabilities: Investment contracts $ 4.0 $ 4.0 $ — $ — $ — $ — $ — _______________ (1) Entirely represents affiliated holdings of AllianceBernstein units, which for statutory admitted carrying value is discounted by 25% as of December 31, 2017. The discount is based on SSAP #97 sliding scale and approved by the SVO. (2) Only Cash and Invested Assets. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in assets classified in Level 3 during the years ended December 31, 2018, 2017 and 2016: Beginning Balance at January 1, 2018 Total Gains (Losses) Included in Net Income Total Gains (Losses) Included in Surplus Purchases Sales Total Ending Balance at December 31, 2018 (in millions) Common stock - Industrial and Miscellaneous — — — 2.0 — 2.0 Total $ — $ — $ — $ 2.0 $ — $ 2.0 During 2018 there were no transfers between levels 1, 2 or 3. Beginning Balance at January 1, 2017 Total Gains (Losses) Included in Net Income Total Gains (Losses) Included in Surplus Purchases Sales Total Ending Balance at December 31, 2017 (in millions) Commercial Mortgage-Backed Securities $ 1.6 $ — $ 5.0 $ — $ (6.6 ) $ — Total $ 1.6 $ — $ 5.0 $ — $ (6.6 ) $ — During 2017 there were no transfers between levels 1, 2 or 3. Beginning Balance at January 1, 2016 Transfers into Level 3 Transfers out of Level 3 Total Gains (Losses) Included in Net Income Total Gains (Losses) Included in Surplus Purchases Sales Total Ending Balance at December 31, 2016 (in millions) Commercial Mortgage-Backed Securities (1) $ 4.1 $ 0.6 $ (0.5 ) $ (2.6 ) $ 0.5 $ — $ (0.5 ) $ 1.6 Total $ 4.1 $ 0.6 $ (0.5 ) $ (2.6 ) $ 0.5 $ — $ (0.5 ) $ 1.6 ___________ (1) Amount includes: $0.6 million of Level 3 securities now carried at fair value, which were carried at adjusted cost in prior period and ($0.5) million of Level 3 securities no longer carried at market value, where the adjusted cost is lower than the market value. |
REINSURANCE AGREEMENTS (Tables)
REINSURANCE AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance Disclosures [Abstract] | |
Schedule Of Effect Of Reinsurance | The following table summarizes the effect of reinsurance: 2018 2017 2016 (in millions) Direct premiums $ 719 $ 655 $ 601 Considerations for supplementary contracts 4 4 7 Reinsurance assumed 2 2 3 Reinsurance ceded to Protective (76 ) (92 ) (103 ) Reinsurance ceded - Other (58 ) (50 ) (50 ) Premiums and annuity considerations $ 591 $ 519 $ 458 Reduction in insurance - Protective Reserves, at December 31 (1) $ 1,314 * $ $ 1,383 $ 1,389 Reduction in insurance - Other Reserves, at December 31 $ 282 $ 289 $ 296 ______________ (1) At December 31, 2018 there was $1,023.6 million of assets held in trust at Northern Trust supporting this reinsurance credit. |
ANALYSIS OF ANNUITY ACTUARIAL_2
ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Withdrawal Characteristics of Annuity Actuarial Reserves and Deposit Liabilities | Withdrawal Characteristics of Annuity Actuarial Reserves and Deposit liabilities as of December 31, 2018 and 2017 were as follows: General Account Separate Accounts with Guarantees Separate Accounts Non-guaranteed (1) Total % of Total (in millions) December 31, 2018: Subject to discretionary withdrawal: With fair value adjustment $ 183.5 $ — $ — $ 183.5 16.8 % At book value less current surrender charge of 5% or more 2.6 — — 2.6 0.3 % At fair value — — 527.5 527.5 48.3 % Total with adjustment or at fair value 186.1 — 527.5 713.6 65.4 % At book value without adjustment (minimal or no charge or adjustment) 302.7 — — 302.7 27.7 % Not subject to discretionary withdrawal 75.3 — — 75.3 6.9 % Total direct and assumed 564.1 — 527.5 1,091.6 100.0 % Less: Reinsurance ceded 559.2 — — 559.2 Total (net) $ 4.9 $ — $ 527.5 $ 532.4 _______________ (1) The entire Separate Accounts annuity reserves are ceded as part of a modified coinsurance treaty with Protective . General Account Separate Accounts with Guarantees Separate Accounts Non-guaranteed (1) Total % of Total (in millions) December 31, 2017: Subject to discretionary withdrawal: With fair value adjustment $ 194.3 $ — $ — $ 194.3 16.0 % At book value less current surrender charge of 5% or more 2.9 — — 2.9 0.2 % At fair value — — 637.0 637.0 52.6 % Total with adjustment or at fair value 197.2 — 637.0 834.2 68.8 % At book value without adjustment (minimal or no charge or adjustment) 298.8 — — 298.8 24.6 % Not subject to discretionary withdrawal 79.2 — — 79.2 6.6 % Total direct and assumed 575.2 — 637.0 1,212.2 100.0 % Less: Reinsurance ceded 571.2 — — 571.2 Total (net) $ 4.0 $ — $ 637.0 $ 641.0 _______________ (1) The entire Separate Accounts annuity reserves are ceded as part of a modified coinsurance treaty with Protective. |
PREMIUM AND ANNUITY CONSIDERA_2
PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Premium And Annuity Considerations Deferred And Uncollected | December 31, 2018 2017 (in millions) Line of Business Gross Net of Loading Gross Net of Loading Ordinary new business (0.1 ) (0.1 ) — — Ordinary renewal 2.2 2.2 3.4 3.4 Group life 0.4 0.4 0.8 0.8 Total premium and annuity considerations deferred and uncollected $ 2.5 $ 2.5 $ 4.2 $ 4.2 |
SEPARATE ACCOUNTS (Tables)
SEPARATE ACCOUNTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment | Information regarding the Separate Accounts of the Company is as follows (in millions): Separate Accounts with Guarantees Non-Guaranteed Separate Accounts Total Indexed Non-Indexed Guarantee Less than/equal to 4% Non-Indexed Guarantee More than 4% (in millions) Premiums, considerations or deposits for the year ended December 31, 2018 $ — $ — $ — $ 239.0 $ 239.0 Reserves at December 31, 2018 for accounts with assets at: Market value $ — $ — $ — $ 1,664.6 $ 1,664.6 Amortized cost 30.3 373.5 — — 403.8 Total reserves $ 30.3 $ 373.5 $ — $ 1,664.6 $ 2,068.4 By withdrawal characteristics: Subject to discretionary withdrawal: With market value adjustment $ 30.3 $ — $ — $ — $ 30.3 At book value without market value adjustment and with current surrender charge of 5% or more — — — 1,664.6 1,664.6 At market value At book value without market value adjustment and with current surrender charge less than 5% — 373.5 — — 373.5 Subtotal 30.3 373.5 — 1,664.6 2,068.4 Not subject to discretionary withdrawal — — — — — Total (Gross: Direct and Assumed) (1) $ 30.3 $ 373.5 $ — $ 1,664.6 $ 2,068.4 ____________ (1) The Separate Accounts reserves are subject to $952.6 million of MODCO Reinsurance with Protective. |
LOSS_CLAIM ADJUSTMENT EXPENSES
LOSS/CLAIM ADJUSTMENT EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Schedules of Liability for Unpaid Claims and Claims Adjustment Expense | The liability for unpaid claims and claim expenses as of December 31, 2018 and 2017 is as follows: Liability for Unpaid Claims and Claim Expenses December 31, 2018 2017 (in millions) Group Employee Benefits $ 31.3 $ 12.0 Gross Balance at January 1, $ 12.0 $ 1.1 Less Reinsurance 4.1 0.1 Net Balance at January 1, $ 7.9 $ 1.0 Incurred Claims (net) Related to: Current Year $ 41.9 $ 17.3 Prior Year — (0.5 ) Total Incurred $ 41.9 $ 16.8 Paid Claims (net) Related to: Current Year $ 24.6 $ 9.7 Prior Year 4.8 0.2 Total Paid $ 29.4 $ 9.9 Net Balance at December 31, $ 20.4 $ 7.9 Add Reinsurance 10.9 4.1 Gross Balance at December 31, $ 31.3 $ 12.0 The following table reconciles the long-term disability net incurred and paid claims development table to the liability for unpaid claims and claim expenses in the Company’s balance sheet as of December 31, 2018 and 2017: December 31, 2018 2017 (in millions) Long-Term Disability Claim Development Table, net of reinsurance Undiscounted LTD Incurred Claims, net of reins $ 9.9 $ 3.2 Subtract Cumulative LTD Paid Claims, net of reins (1.3 ) (0.1 ) Subtract Impact of LTD Discounting, net of reins (0.8 ) (0.1 ) LTD liabilities for unpaid claim and claim expense, net of reinsurance $ 7.8 $ 3.0 Unpaid Claims and Claim Expenses, net of reinsurance LTD liabilities for unpaid claim and claim expense, net of reinsurance $ 7.8 $ 3.0 Other short-duration contracts, net of reinsurance 12.6 4.9 Total liabilities for unpaid claim and claim expense, net of reinsurance $ 20.4 $ 7.9 Reinsurance Recoverable on unpaid claims Long-term disability $ 8.9 $ 3.3 Other short-duration contracts 2.0 0.8 Total Reinsurance Recoverable $ 10.9 $ 4.1 Total liability for unpaid claim and claim expense $ 31.3 $ 12.0 |
Long-Term Disability Development Tables | The table below presents incurred and paid claims development as of December 31, 2018, net of reinsurance, cumulative claims frequency, and total incurred but not reported liability ("IBNR") for MLOA's long-term disability business: 2018 2017 IBNR Claim Frequency (in millions) Long-term Disability Incurral Year 2017 $ 2.5 $ 3.1 $ — 107 2018 7.4 — 2.8 146 Cumulative LTD Incurred Claims $ 9.9 $ 3.1 $ 2.8 The table below presents incurred and paid claims development as of December 31, 2017, net of reinsurance, cumulative claims frequency, and total incurred but not reported liability ("IBNR") for MLOA's long-term disability business: 2017 IBNR Claim Frequency (in millions) Long-term Disability Incurral Year 2017 $ 3.1 $ 1.2 56 Cumulative LTD Incurred Claims $ 3.1 $ 1.2 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS - NARRATIVE (Details) | 12 Months Ended |
Dec. 31, 2018 | |
AXA Equity Holdings | |
Subsidiary, Sale of Stock [Line Items] | |
Percentage of ownership | 59.00% |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Securities, Available-for-sale [Line Items] | |||
Gain (loss) recognized on assets transferred to separate account | $ (12.5) | $ 17.3 | $ 62.6 |
Equity Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Percentage allocated | 81.00% | ||
Common Stock | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale securities | 0 | ||
Debt Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Percentage allocated | 19.00% | ||
Available-for-sale securities | $ 1,042.2 | ||
Interest Rate | Minimum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Measurement input | 0.035 | ||
Interest Rate | Maximum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Measurement input | 0.060 | ||
Corporate Joint Venture | Minimum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Property, Plant and Equipment, Useful Life | 40 years | ||
Corporate Joint Venture | Maximum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Property, Plant and Equipment, Useful Life | 50 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS - BALANCE SHEET (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities [Abstract] | ||||
Policy reserves and deposit type-funds | $ 1,311.8 | $ 1,028.8 | ||
Policy and contract claims | 22.1 | 14.3 | ||
Total liabilities | 3,482.4 | 3,448.1 | $ 2,853.4 | |
Equity: | ||||
Unassigned surplus (deficit) | (243.3) | (108.7) | ||
Total capital and surplus | 222.4 | 287 | 302.7 | $ 336.4 |
Total Liabilities and Capital and Surplus | 3,704.8 | 3,735.1 | ||
Previously Reported | ||||
Liabilities [Abstract] | ||||
Policy reserves and deposit type-funds | 1,013.1 | |||
Total liabilities | $ 3,482.4 | 3,432.4 | 2,837 | |
Equity: | ||||
Total capital and surplus | 302.7 | 318.6 | 352.8 | |
Total Liabilities and Capital and Surplus | 3,735.1 | |||
Restatement Adjustment | ||||
Liabilities [Abstract] | ||||
Policy reserves and deposit type-funds | 15.7 | |||
Total liabilities | 15.7 | |||
Equity: | ||||
Total capital and surplus | (15.7) | $ (15.9) | $ (16.4) | |
Total Liabilities and Capital and Surplus | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS - STATEMENTS OF INCOME (LOSS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in reserves | $ 282.2 | $ 253.9 | $ 205.5 |
Total benefits and expenses | 798.9 | 695.7 | 600.2 |
Net gain (loss) from operations before federal income taxes (FIT) | (82.2) | (56.7) | (30.9) |
FIT expense (benefit) incurred (excluding tax on capital gains) | 7.6 | (21.3) | (13) |
Net gain (loss) from operations | (35.4) | (17.9) | |
Net income (loss) | (88.8) | (12.2) | (23) |
Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in reserves | 255.1 | 199.1 | |
Total benefits and expenses | 696.9 | 593.8 | |
Net gain (loss) from operations before federal income taxes (FIT) | (57.9) | (24.5) | |
FIT expense (benefit) incurred (excluding tax on capital gains) | (22.3) | (15.2) | |
Net gain (loss) from operations | (35.6) | (9.3) | |
Net income (loss) | $ (89.4) | (12.4) | (14.4) |
Restatement Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in reserves | (1.2) | 6.4 | |
Total benefits and expenses | (1.2) | 6.4 | |
Net gain (loss) from operations before federal income taxes (FIT) | 1.2 | (6.4) | |
FIT expense (benefit) incurred (excluding tax on capital gains) | 1 | 2.2 | |
Net gain (loss) from operations | 0.2 | (8.6) | |
Net income (loss) | $ 0.2 | $ (8.6) |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS - STATEMENTS OF EQUITY AND STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Balance, beginning of year | $ 287 | $ 302.7 | $ 336.4 |
Net Income (Loss) | (88.8) | (12.2) | (23) |
Prior year correction | 0 | ||
Net change in Capital and Surplus | (15.7) | (33.7) | |
Balance, end of year | 222.4 | 287 | 302.7 |
Unassigned Surplus (Deficit) | |||
Statement of Stockholders' Equity [Abstract] | |||
Balance, beginning of year | (108.7) | (93) | (59.3) |
Net Income (Loss) | (88.8) | (12.2) | (23) |
Balance, end of year | (243.3) | (108.7) | (93) |
Previously Reported | |||
Statement of Stockholders' Equity [Abstract] | |||
Balance, beginning of year | 302.7 | 318.6 | 352.8 |
Net Income (Loss) | (89.4) | (12.4) | (14.4) |
Prior year correction | (9.1) | ||
Net change in Capital and Surplus | (15.9) | (34.2) | |
Balance, end of year | 302.7 | 318.6 | |
Previously Reported | Unassigned Surplus (Deficit) | |||
Statement of Stockholders' Equity [Abstract] | |||
Balance, beginning of year | (93) | (77.1) | (42.9) |
Balance, end of year | (93) | (77.1) | |
Restatement Adjustment | |||
Statement of Stockholders' Equity [Abstract] | |||
Balance, beginning of year | (15.7) | (15.9) | (16.4) |
Net Income (Loss) | 0.2 | (8.6) | |
Prior year correction | 9.1 | ||
Net change in Capital and Surplus | 0.2 | 0.5 | |
Balance, end of year | (15.7) | (15.9) | |
Restatement Adjustment | Unassigned Surplus (Deficit) | |||
Statement of Stockholders' Equity [Abstract] | |||
Balance, beginning of year | $ (15.7) | (15.9) | (16.4) |
Balance, end of year | $ (15.7) | $ (15.9) |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - RECONCILIATION OF STATUTORY BASIS OF ACCOUNTING (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Accounting Practices [Line Items] | |||
Total Assets | $ 3,704.8 | $ 3,735.1 | $ 3,156.6 |
Total Liabilities | 3,482.4 | 3,448.1 | 2,853.4 |
Capital and Surplus | 222.4 | 287 | 302.7 |
Total Liabilities Surplus and Other Funds | 3,704.8 | 3,735.1 | 3,156.6 |
Net Income (Loss) | (88.8) | (12.2) | (23) |
Previously Reported | |||
Statutory Accounting Practices [Line Items] | |||
Total Assets | 3,704.8 | 3,735.1 | 3,155.6 |
Total Liabilities | 3,482.4 | 3,432.4 | 2,837 |
Capital and Surplus | 222.4 | 302.7 | 318.6 |
Total Liabilities Surplus and Other Funds | 3,704.8 | 3,735.1 | 3,155.6 |
Net Income (Loss) | (89.4) | (12.4) | (14.4) |
Total Assets | |||
Statutory Accounting Practices [Line Items] | |||
Adjustment for reserves | 0 | 0 | 1 |
Total Liabilities | |||
Statutory Accounting Practices [Line Items] | |||
Adjustment for reserves | 0 | 15.7 | 16.4 |
Capital and Surplus | |||
Statutory Accounting Practices [Line Items] | |||
Adjustment for reserves | 0 | (15.7) | (15.9) |
Total Liabilities Surplus and Other Funds | |||
Statutory Accounting Practices [Line Items] | |||
Adjustment for reserves | 0 | 0 | 1 |
Net Income (Loss) | |||
Statutory Accounting Practices [Line Items] | |||
Adjustment for reserves | $ 0.6 | $ 0.2 | $ (8.6) |
INVESTMENTS - FIXED MATURITY SE
INVESTMENTS - FIXED MATURITY SECURITIES AND COMMON STOCK (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Common stocks | $ 55 | $ 48.6 |
Debt Maturities, Amortized Cost Basis | 1,069.7 | |
Fixed maturities | 1,069.7 | 1,025.6 |
Debt Securities, Available-for-sale, Amortized Cost, Fiscal Year Maturity [Abstract] | ||
Due in one year or less, Amortized Cost | 0.3 | |
Due in years two through five, Amortized Cost | 60.8 | |
Due in years six through ten, Amortized Cost | 659 | |
Due after ten years, Amortized Cost | 345.2 | |
Subtotal | 1,069.7 | |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due in one year or less, Fair Value | 0.6 | |
Due in years two through five, Fair Value | 61.6 | |
Due in years six through ten, Fair Value | 639.7 | |
Due after ten years, Fair Value | 311.5 | |
Subtotal | 1,017.4 | |
Mortgage backed securities | ||
Debt Securities, Available-for-sale, Amortized Cost, Fiscal Year Maturity [Abstract] | ||
Without a single maturity date, amortized cost | 0.2 | |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Without a single maturity date, Fair Value | 0.2 | |
Debt Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 19.3 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 2.7 | |
Amortized cost | 1,025.6 | |
Debt Maturities, Amortized Cost Basis | 1,069.7 | |
Gross Unrealized Gains | 2.7 | |
Gross Unrealized Losses | 55 | |
Fixed maturities | 1,017.4 | |
Fixed maturity securities, fair value | 1,042.2 | |
Common stock - unaffiliated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Common stocks | 2 | |
Equity Securities, FV-NI, Accumulated Gross Unrealized Gain, Before Tax | 0 | |
Equity Securities, FV-NI, Accumulated Gross Unrealized Loss, Before Tax | 0 | |
Equity Securities, FV-NI, Cost | 2 | |
Parent, Subsidiaries and Affiliates | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Amortized cost | 0 | |
Fixed maturity securities, fair value | 0 | |
Public corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0.3 | |
Amortized cost | 194.3 | |
Debt Maturities, Amortized Cost Basis | 8.5 | |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Losses | 0.2 | |
Fixed maturities | 8.4 | |
Fixed maturity securities, fair value | 195 | |
Special revenue and special assess obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Amortized cost | 0.5 | |
Debt Maturities, Amortized Cost Basis | 0.5 | |
Gross Unrealized Gains | 0.3 | |
Gross Unrealized Losses | 0 | |
Fixed maturities | 0.8 | |
Fixed maturity securities, fair value | 0.5 | |
States and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0.2 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Amortized cost | 4.5 | |
Debt Maturities, Amortized Cost Basis | 3.6 | |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Losses | 0 | |
Fixed maturities | 3.7 | |
Fixed maturity securities, fair value | 4.7 | |
Industrial and Miscellaneous | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 18.1 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 2.4 | |
Amortized cost | 822.1 | |
Debt Maturities, Amortized Cost Basis | 1,052.9 | |
Gross Unrealized Gains | 2.2 | |
Gross Unrealized Losses | 54.4 | |
Fixed maturities | 1,000.7 | |
Fixed maturity securities, fair value | 837.8 | |
Common Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Common stocks | 2 | |
Equity Securities, FV-NI, Accumulated Gross Unrealized Gain, Before Tax | 0 | |
Equity Securities, FV-NI, Accumulated Gross Unrealized Loss, Before Tax | 0 | |
Equity Securities, FV-NI, Cost | 2 | |
Amortized cost | 0 | |
Fixed maturity securities, fair value | 0 | |
Preferred Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Amortized cost | 4.2 | |
Debt Maturities, Amortized Cost Basis | 4.2 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0.4 | |
Fixed maturities | 3.8 | |
Fixed maturity securities, fair value | 4.2 | |
Debt Securities, Available-for-sale, Amortized Cost, Fiscal Year Maturity [Abstract] | ||
Without a single maturity date, amortized cost | $ 4.2 | |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Without a single maturity date, Fair Value | $ 3.8 |
INVESTMENTS - CONTINUOUS UNREAL
INVESTMENTS - CONTINUOUS UNREALIZED LOSS POSITION (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | $ 374.7 | $ 144.9 |
Less than 12 Months, Gross Unrealized Losses | 15.7 | 1.3 |
12 Months or Longer, Fair Value | 477.1 | 48 |
12 Months or Longer, Gross Unrealized Losses | 39.3 | 1.4 |
Total Fair Value | 851.8 | 192.9 |
Total, Gross Unrealized Losses | 55 | 2.7 |
Other Than Investment Grade | ||
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 4.7 | |
Less than 12 Months, Gross Unrealized Losses | 0.3 | |
12 Months or Longer, Fair Value | 0 | |
12 Months or Longer, Gross Unrealized Losses | 0 | |
US government agencies debt securities | ||
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 0 | 16.2 |
Less than 12 Months, Gross Unrealized Losses | 0 | 0.2 |
12 Months or Longer, Fair Value | 4.6 | 3.5 |
12 Months or Longer, Gross Unrealized Losses | 0.2 | 0.1 |
Total Fair Value | 4.6 | 19.7 |
Total, Gross Unrealized Losses | 0.2 | 0.3 |
Public corporate | ||
Investments In Fixed Maturity Securities Other Disclosure [Abstract] | ||
Amortized cost | 194.3 | |
Industrial and Miscellaneous | ||
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 372.8 | 126.5 |
Less than 12 Months, Gross Unrealized Losses | 15.6 | 1.1 |
12 Months or Longer, Fair Value | 470.6 | 44.5 |
12 Months or Longer, Gross Unrealized Losses | 38.8 | 1.3 |
Total Fair Value | 843.4 | 171 |
Total, Gross Unrealized Losses | 54.4 | 2.4 |
Investments In Fixed Maturity Securities Other Disclosure [Abstract] | ||
Amortized cost | 822.1 | |
Preferred Stock | ||
Available For Sale Securities Continuous Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 1.9 | 2.2 |
Less than 12 Months, Gross Unrealized Losses | 0.1 | 0 |
12 Months or Longer, Fair Value | 1.9 | 0 |
12 Months or Longer, Gross Unrealized Losses | 0.3 | 0 |
Total Fair Value | 3.8 | 2.2 |
Total, Gross Unrealized Losses | $ 0.4 | 0 |
Investments In Fixed Maturity Securities Other Disclosure [Abstract] | ||
Amortized cost | $ 4.2 |
INVESTMENTS - OFFSETTING FINANC
INVESTMENTS - OFFSETTING FINANCIAL ASSETS (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Gross amounts recognized | $ 19.6 | $ 119.3 |
Gross amounts offset in the balance sheets | 0.9 | 30.4 |
Net amounts presented in the balance sheets | $ 18.7 | $ 88.9 |
INVESTMENTS - OFFSETTING FINA_2
INVESTMENTS - OFFSETTING FINANCIAL LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Gross amount recognized | $ 0.9 | $ 30.4 |
Gross amounts offset in the balance sheets | 0.9 | 30.4 |
Net amounts presented in the balance sheets | $ 0 | $ 0 |
INVESTMENTS - OFFSETTING COLLAT
INVESTMENTS - OFFSETTING COLLATERAL (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Offsetting Assets [Line Items] | ||
Net amounts presented in the balance sheets | $ 18.7 | $ 88.9 |
INVESTMENTS - NET INVESTMENT IN
INVESTMENTS - NET INVESTMENT INCOME (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Investment Income [Line Items] | |||
Amounts transferred to interest maintenance reserve (“IMR”) net of tax | $ 5.9 | $ (4.2) | $ 0 |
Tax (expense) credits | (1.2) | (14.6) | 1.2 |
Net Realized Capital Gains (Losses) | 1 | 23.2 | (5.1) |
Fixed maturities | |||
Net Investment Income [Line Items] | |||
Realized capital gains (losses) before tax | (9.5) | 0.2 | (4.3) |
Derivative | |||
Net Investment Income [Line Items] | |||
Realized capital gains (losses) before tax | $ 5.8 | $ 41.8 | $ (2) |
INVESTMENTS - NARRATIVE (Detail
INVESTMENTS - NARRATIVE (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)loansecurity | Dec. 31, 2017USD ($)loansecurity | Dec. 31, 2016USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sale of securities | $ 264.7 | $ 300.4 | $ 16.3 |
Realized gains | 0.7 | 9.7 | 0.1 |
Realized losses | $ 8.2 | $ 6.8 | $ 0.1 |
Number of loss positions | security | 235 | 56 | |
OTTI on securities | $ 2.1 | $ 0.4 | |
Carrying values of investments held for production of income that are non-income producing | 0.3 | 0.3 | |
Securities deposited with government or state agencies | $ 3.9 | $ 6.7 | |
Number of mortgage loans | loan | 2 | 2 | |
Mortgage loans | $ 17 | $ 17 | |
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturity investments | 1,069.7 | ||
Fixed maturity securities, fair value | 1,069.7 | 1,025.6 | |
Other restricted assets | 3.9 | 6.7 | |
FHLB common stock investment | 2 | 0 | |
Non-investment grade | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturity investments | $ 4.8 | ||
Percentage of investments | 0.40% | ||
Loan backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturity investments | $ 14.5 | 14.7 | |
Fixed maturity securities, fair value | $ 14.5 | $ 15.3 |
INVESTMENT INCOME - NARRATIVE (
INVESTMENT INCOME - NARRATIVE (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Investment due and accrued | $ 0.1 | $ 0 |
INVESTMENT INCOME - SUMMARY OF
INVESTMENT INCOME - SUMMARY OF NET INVESTMENT INCOME (LOSS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | |||
Net investment income | $ 49.2 | $ 40.2 | $ 33.2 |
Fixed maturities | |||
Investment [Line Items] | |||
Gross Investment Income | 39.8 | 34.2 | 29.1 |
Affiliated dividends | |||
Investment [Line Items] | |||
Gross Investment Income | 8.2 | 6.2 | 5.1 |
Mortgage loans | |||
Investment [Line Items] | |||
Gross Investment Income | 0.6 | 0.6 | 0.6 |
Policy loans | |||
Investment [Line Items] | |||
Gross Investment Income | 2.2 | 1.5 | 1.2 |
Cash and short-term investments | |||
Investment [Line Items] | |||
Gross Investment Income | 1.3 | 0.5 | 0.2 |
Investment expense and other | |||
Investment [Line Items] | |||
Investment expense and other | (3.7) | (3.5) | (3.2) |
Amortization of IMR | |||
Investment [Line Items] | |||
Amortization of IMR | $ 0.8 | $ 0.7 | $ 0.2 |
DERIVATIVE INSTRUMENTS - NARRAT
DERIVATIVE INSTRUMENTS - NARRATIVE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | |||
Assets | $ 13.3 | $ 119.3 | |
Notional amount | 254.6 | 1,057.7 | |
Equity contracts-Options | |||
Derivative [Line Items] | |||
Assets | 13.3 | 119.3 | |
Equity contracts-Options | Future position | |||
Derivative [Line Items] | |||
Assets | 6.3 | 0 | |
Realized gain (loss) | (40) | 24 | $ 20.5 |
Equity contracts-Options | Option positions | |||
Derivative [Line Items] | |||
Assets | 12.4 | 88.9 | |
Realized gain (loss) | $ 5.8 | $ 41.8 | $ (2) |
DERIVATIVE INSTRUMENTS - SUMMAR
DERIVATIVE INSTRUMENTS - SUMMARY OF DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Assets | $ 13.3 | $ 119.3 |
Liabilities | 0.9 | 30.4 |
Equity contracts-Options | ||
Derivative [Line Items] | ||
Assets | 13.3 | 119.3 |
Liabilities | $ 0.9 | $ 30.4 |
INCOME TAXES - COMPONENTS OF DE
INCOME TAXES - COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | ||
Gross deferred tax assets | $ 74.9 | $ 54.3 |
Statutory valuation allowance adjustment | 0 | 0 |
Adjusted gross DTAs amount from Note 9A1(c) | 74.9 | 54.3 |
Subtotal net admitted deferred tax asset | 23.3 | 30.3 |
Deferred tax liabilities | 9 | 19.8 |
Net admitted deferred tax assets | 14.3 | 10.5 |
Change | ||
Gross deferred tax assets | 20.6 | |
Statutory valuation allowance adjustment | 0 | |
Adjusted gross deferred tax assets | 20.6 | |
Subtotal net admitted deferred tax asset | 27.6 | |
Subtotal net admitted deferred tax asset | (7) | |
Deferred tax liabilities | (10.8) | |
Net admitted deferred tax assets/(net deferred tax liability) | 3.8 | |
Ordinary | ||
Tax Credit Carryforward [Line Items] | ||
Gross deferred tax assets | 72.8 | 54 |
Statutory valuation allowance adjustment | 0 | 0 |
Adjusted gross DTAs amount from Note 9A1(c) | 72.8 | 54 |
Subtotal net admitted deferred tax asset | 23.3 | 30.3 |
Deferred tax liabilities | 3.9 | 16.6 |
Net admitted deferred tax assets | 19.4 | 13.7 |
Change | ||
Gross deferred tax assets | 18.8 | |
Statutory valuation allowance adjustment | 0 | |
Adjusted gross deferred tax assets | 18.8 | |
Subtotal net admitted deferred tax asset | 25.8 | |
Subtotal net admitted deferred tax asset | (7) | |
Deferred tax liabilities | (12.7) | |
Net admitted deferred tax assets/(net deferred tax liability) | 5.7 | |
Capital | ||
Tax Credit Carryforward [Line Items] | ||
Gross deferred tax assets | 2.1 | 0.3 |
Statutory valuation allowance adjustment | 0 | 0 |
Adjusted gross DTAs amount from Note 9A1(c) | 2.1 | 0.3 |
Subtotal net admitted deferred tax asset | 0 | 0 |
Deferred tax liabilities | 5.1 | 3.2 |
Net admitted deferred tax liabilities | (5.1) | $ (3.2) |
Change | ||
Gross deferred tax assets | 1.8 | |
Statutory valuation allowance adjustment | 0 | |
Adjusted gross deferred tax assets | 1.8 | |
Subtotal net admitted deferred tax asset | 1.8 | |
Subtotal net admitted deferred tax asset | 0 | |
Deferred tax liabilities | 1.9 | |
Net admitted deferred tax assets/(net deferred tax liability) | $ (1.9) |
INCOME TAXES - ADMISSION CALCUL
INCOME TAXES - ADMISSION CALCULATION COMPONENTS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | ||
Federal income taxes paid in prior years recoverable through loss carrybacks | $ 0 | $ 0 |
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: | 14.3 | 10.5 |
Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 14.3 | 10.5 |
Adjusted gross deferred tax assets allowed per limitation threshold | 31.1 | 0 |
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities | 9 | 19.8 |
Deferred tax assets admitted as the result of application of SSAP 101 | 23.3 | $ 30.3 |
Change | ||
Federal income taxes paid in prior years recoverable through loss carrybacks | 0 | |
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: | 3.8 | |
Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 3.8 | |
Adjusted gross deferred tax assets allowed per limitation threshold | 31.1 | |
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities | (10.8) | |
Deferred tax assets admitted as the result of application of SSAP 101 | $ (7) | |
Ratio percentage used to determine recovery period and threshold limitation amount | 680.26% | 1014.312% |
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation above | $ 223.9 | $ 292 |
Ordinary | ||
Tax Credit Carryforward [Line Items] | ||
Federal income taxes paid in prior years recoverable through loss carrybacks | 0 | 0 |
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: | 14.3 | 10.5 |
Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 14.3 | 10.5 |
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities | 9 | 19.8 |
Deferred tax assets admitted as the result of application of SSAP 101 | 23.3 | 30.3 |
Change | ||
Federal income taxes paid in prior years recoverable through loss carrybacks | 0 | |
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: | 3.8 | |
Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 3.8 | |
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities | (10.8) | |
Deferred tax assets admitted as the result of application of SSAP 101 | (7) | |
Capital | ||
Tax Credit Carryforward [Line Items] | ||
Federal income taxes paid in prior years recoverable through loss carrybacks | 0 | 0 |
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: | 0 | 0 |
Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 0 | 0 |
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities | 0 | 0 |
Deferred tax assets admitted as the result of application of SSAP 101 | 0 | $ 0 |
Change | ||
Federal income taxes paid in prior years recoverable through loss carrybacks | 0 | |
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets after application of the threshold limitation: | 0 | |
Adjusted gross deferred tax assets expected to be realized following the balance sheet date | 0 | |
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities | 0 | |
Deferred tax assets admitted as the result of application of SSAP 101 | $ 0 |
INCOME TAXES - TAX PLANNING STR
INCOME TAXES - TAX PLANNING STRATEGIES (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Contingency [Line Items] | ||
Adjusted gross DTAs amount from Note 9A1(c) | $ 74.9 | $ 54.3 |
Deferred tax assets admitted as the result of application of SSAP 101 | 23.3 | 30.3 |
Ordinary | ||
Income Tax Contingency [Line Items] | ||
Adjusted gross DTAs amount from Note 9A1(c) | $ 72.8 | 54 |
Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies | 0.00% | |
Deferred tax assets admitted as the result of application of SSAP 101 | $ 23.3 | 30.3 |
Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies | 0.00% | |
Capital | ||
Income Tax Contingency [Line Items] | ||
Adjusted gross DTAs amount from Note 9A1(c) | $ 2.1 | 0.3 |
Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies | 0.00% | |
Deferred tax assets admitted as the result of application of SSAP 101 | $ 0 | $ 0 |
Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies | 0.00% |
INCOME TAXES - COMPONENTS OF IN
INCOME TAXES - COMPONENTS OF INCOME TAXES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ 7.6 | $ (21.3) | $ (13) |
Foreign | 0 | 0 | 0 |
FIT expense (benefit) incurred (excluding tax on capital gains) | 7.6 | (21.3) | (13) |
Federal income tax on net capital gains | 1.2 | 14.6 | (1.2) |
Utilization of capital loss carry-forwards | 0 | 0 | 0 |
Other | (8.4) | 8.4 | 7.2 |
Federal and Foreign income taxes incurred | $ 0.4 | $ 1.7 | $ (7) |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
DTAs: | ||
Policyholder reserves | $ 7.8 | $ 16.3 |
Investments | 0.5 | 0.3 |
Deferred acquisition costs | 39.7 | 31.3 |
Nonadmitted | 1.1 | 0.9 |
Net loss carry-forward | 23.5 | 3.3 |
Tax credit carry-forward | 1.8 | 1.8 |
Other (including items 5% of total ordinary tax assets) | 0.5 | 0.4 |
Total gross DTAs | 74.9 | 54.3 |
Nonadmitted DTAs | 51.6 | 24 |
Admitted DTAs | 23.3 | 30.3 |
DTLs: | ||
Investments | (5.1) | (3.2) |
Deferred and uncollected premium | (0.4) | (1) |
Policyholder reserves | (3.4) | (15.6) |
Other (including items 5% of total ordinary tax assets) | (0.1) | 0 |
Total DTLs | (9) | (19.8) |
DTAs, Changes: | ||
Policyholder reserves | (8.5) | |
Investments | 0.2 | |
Deferred acquisition costs | 8.4 | |
Nonadmitted | 0.2 | |
Net loss carry-forward | 20.2 | |
Tax credit carry-forward | 0 | |
Other (including items 5% of total ordinary tax assets) | 0.1 | |
Total gross DTAs | 20.6 | |
Nonadmitted DTAs | 27.6 | |
Admitted DTAs | (7) | |
DTLs, Changes | ||
Investments | (1.9) | |
Deferred and uncollected premium | 0.6 | |
Policyholder reserves | 12.2 | |
Other (including items 5% of total ordinary tax assets) | (0.1) | |
Total DTLs | 10.8 | |
Net admitted deferred tax assets | 14.3 | 10.5 |
Net admitted (DTL)/DTA | 3.8 | |
Ordinary | ||
DTAs: | ||
Policyholder reserves | 7.8 | 16.3 |
Investments | 0 | |
Deferred acquisition costs | 39.7 | 31.3 |
Nonadmitted | 1.1 | 0.9 |
Net loss carry-forward | 21.9 | 3.3 |
Tax credit carry-forward | 1.8 | 1.8 |
Other (including items 5% of total ordinary tax assets) | 0.5 | 0.4 |
Total gross DTAs | 72.8 | 54 |
Nonadmitted DTAs | 49.5 | 23.7 |
Admitted DTAs | 23.3 | 30.3 |
DTLs: | ||
Investments | 0 | 0 |
Deferred and uncollected premium | (0.4) | (1) |
Policyholder reserves | (3.4) | (15.6) |
Other (including items 5% of total ordinary tax assets) | (0.1) | 0 |
Total DTLs | (3.9) | (16.6) |
DTAs, Changes: | ||
Policyholder reserves | (8.5) | |
Investments | 0 | |
Deferred acquisition costs | 8.4 | |
Nonadmitted | 0.2 | |
Net loss carry-forward | 18.6 | |
Tax credit carry-forward | 0 | |
Other (including items 5% of total ordinary tax assets) | 0.1 | |
Total gross DTAs | 18.8 | |
Nonadmitted DTAs | 25.8 | |
Admitted DTAs | (7) | |
DTLs, Changes | ||
Investments | 0 | |
Deferred and uncollected premium | 0.6 | |
Policyholder reserves | 12.2 | |
Other (including items 5% of total ordinary tax assets) | (0.1) | |
Total DTLs | 12.7 | |
Net admitted deferred tax assets | 19.4 | 13.7 |
Net admitted (DTL)/DTA | 5.7 | |
Capital | ||
DTAs: | ||
Policyholder reserves | 0 | 0 |
Investments | 0.5 | 0.3 |
Deferred acquisition costs | 0 | 0 |
Nonadmitted | 0 | 0 |
Net loss carry-forward | 1.6 | 0 |
Tax credit carry-forward | 0 | 0 |
Other (including items 5% of total ordinary tax assets) | 0 | 0 |
Total gross DTAs | 2.1 | 0.3 |
Nonadmitted DTAs | 2.1 | 0.3 |
Admitted DTAs | 0 | 0 |
DTLs: | ||
Investments | (5.1) | (3.2) |
Deferred and uncollected premium | 0 | 0 |
Policyholder reserves | 0 | 0 |
Other (including items 5% of total ordinary tax assets) | 0 | 0 |
Total DTLs | (5.1) | (3.2) |
DTAs, Changes: | ||
Policyholder reserves | 0 | |
Investments | 0.2 | |
Deferred acquisition costs | 0 | |
Nonadmitted | 0 | |
Net loss carry-forward | 1.6 | |
Tax credit carry-forward | 0 | |
Other (including items 5% of total ordinary tax assets) | 0 | |
Total gross DTAs | 1.8 | |
Nonadmitted DTAs | 1.8 | |
Admitted DTAs | 0 | |
DTLs, Changes | ||
Investments | (1.9) | |
Deferred and uncollected premium | 0 | |
Policyholder reserves | 0 | |
Other (including items 5% of total ordinary tax assets) | 0 | |
Total DTLs | (1.9) | |
Net admitted deferred tax liabilities | (5.1) | $ (3.2) |
Net admitted (DTL)/DTA | $ (1.9) |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 4 | $ 4 | $ 7 |
Additions for tax positions of prior years | 0.2 | 0 | 0 |
Subtraction for tax positions of prior years | 0 | 0 | (3) |
Settlements with tax authorities | 0 | 0 | 0 |
Balance, End of Year | $ 4.2 | $ 4 | $ 4 |
INCOME TAXES - CHANGES IN DEFER
INCOME TAXES - CHANGES IN DEFERRED TAX ASSETS (LIABILITIES) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Total deferred tax assets | $ 74.9 | $ 54.3 |
Total deferred tax assets, change | 20.6 | |
Total deferred tax liabilities | (9) | (19.8) |
Total deferred tax liabilities, change | 10.8 | |
Net deferred tax assets/liabilities | 65.9 | 34.5 |
Net deferred tax assets/liabilities, change | 31.4 | |
Statutory valuation allowance adjustment | 0 | 0 |
Statutory valuation allowance adjustment, change | 0 | |
Deferred Tax Assets, After Statutory Valuation Allowance | 65.9 | 34.4 |
Net deferred tax assets/liabilities after SVA | 14.3 | $ 10.5 |
Net deferred tax assets/liabilities after SVA, change | 31.4 | |
Tax effect of unrealized gains/(losses) | 0.9 | |
Incurred tax items in surplus | 0 | |
Change in net deferred income tax | $ 32.3 |
INCOME TAXES - EFFECTIVE TAX RA
INCOME TAXES - EFFECTIVE TAX RATE RECONCILIATION (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Income before taxes (including all realized capital gains / (losses)) | $ (85.7) |
Dividends-received deduction | (3.7) |
Interest maintenance reserve | (0.8) |
IRS audit adjustment | 1.9 |
Deferred gain on reinsurance | (19.8) |
Incurred tax items in surplus | (40.3) |
Other, provision to return | (2) |
Total | (150.4) |
21% Tax Effect | |
Income before taxes (including all realized capital gains / (losses)) | (18) |
Dividends-received deduction | (0.8) |
Interest maintenance reserve | (0.2) |
IRS audit adjustment | 0.4 |
Deferred gain on reinsurance | (4.1) |
Incurred tax items in surplus | (8.5) |
Other, provision to return | (0.7) |
Total | (31.9) |
Federal income taxed incurred | 0.4 |
Change in net deferred income tax | $ (32.3) |
Effective Tax Rate | |
Income before taxes (including all realized capital gains / (losses)) | 21.00% |
Dividends-received deduction | 0.91% |
Interest maintenance reserve | 0.20% |
IRS audit adjustment | (0.47%) |
Deferred gain on reinsurance | 4.85% |
Incurred tax items in surplus | 9.88% |
Other, provision to return | 0.81% |
Total | 37.18% |
Federal income taxed incurred | (0.47%) |
Change in net deferred income tax | 37.65% |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Decrease in DTAs | $ 9 | ||
Operating loss carryforward | $ 104.2 | ||
Unrecognized tax benefits that would impact the effective tax rate | 4.6 | 4.2 | |
Interest and penalties included in unrecognized tax benefits | 0.4 | $ 0.3 | $ 0 |
Interest expense related to unrecognized tax benefits | 0.1 | ||
Capital Loss Carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforward | 7.6 | ||
AMT Credit Carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforward | $ 1.7 |
INFORMATION CONCERNING PARENT_2
INFORMATION CONCERNING PARENT, SUBSIDIARIES AND AFFILIATES - NARRATIVE (Details) - USD ($) $ in Millions | Feb. 20, 2019 | Feb. 09, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 25, 2018 |
Related Party Transaction [Line Items] | ||||||
Due from affiliates | $ 74.3 | $ 5.2 | ||||
Due to affiliates | 3.8 | 22.7 | ||||
Letter of Credit | ||||||
Related Party Transaction [Line Items] | ||||||
Line of credit | 45 | |||||
AXA Equitable Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions | 156.3 | 110.5 | $ 123 | |||
AllianceBernstein - Investment Advisory And Management Services | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions | 1.8 | 1.8 | 1.6 | |||
AXA Network LLC - Distribution Fee Charges | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions | 113.2 | 109.1 | 99.7 | |||
AXA Distributors LLC - Distribution Fee Charges | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions | 47.5 | 43.1 | $ 42.6 | |||
AllianceBernstein | ||||||
Related Party Transaction [Line Items] | ||||||
Carrying amount | $ 53 | $ 48.6 | $ 48.8 | |||
Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Capital contribution | $ 70 | |||||
Subsequent Event | Unassigned Surplus (Deficit) | ||||||
Related Party Transaction [Line Items] | ||||||
Capital contribution | $ 70 |
CAPITAL SURPLUS AND SHAREHOLD_2
CAPITAL SURPLUS AND SHAREHOLDERS DIVIDEND RESTRICTIONS - NARRATIVE (Details) - USD ($) $ in Millions | Feb. 20, 2019 | Feb. 09, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | |||
Common stock, shares issued (in shares) | 2,500,000 | 2,500,000 | |||
Common stock, shares outstanding (in shares) | 2,500,000 | 2,500,000 | |||
Unassigned surplus (deficit), unrealized gains (losses) | $ (21.1) | $ (25.5) | $ (33.6) | ||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Capital contribution | $ 70 | ||||
Subsequent Event | Unassigned Surplus (Deficit) | |||||
Class of Stock [Line Items] | |||||
Capital contribution | $ 70 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Private equity financing | $ 0.1 | |
Liability for assessments | 0.7 | $ 0.6 |
Assets for premium tax offsets that are expected to be realized | 0.5 | |
Assets for premium tax offsets already paid | $ 0.1 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - INSOLVENCY (Details) | 12 Months Ended |
Dec. 31, 2018jurisdiction | |
Penn Treaty Network America Insurance Company | |
Payables | |
Number of Jurisdictions | 45 |
Weighted Average Number of Years | 11 years |
Recoverables | |
Number of Jurisdictions | 45 |
Weighted Average Number of Years | 11 years |
Penn Treaty Network America Insurance Company | Maximum | |
Payables | |
Range of Years | 69 years |
Recoverables | |
Range of Years | 69 years |
Penn Treaty Network America Insurance Company | Minimum | |
Payables | |
Range of Years | 1 year |
Recoverables | |
Range of Years | 1 year |
American Network Insurance Company | |
Payables | |
Number of Jurisdictions | 44 |
Weighted Average Number of Years | 15 years |
Recoverables | |
Number of Jurisdictions | 44 |
Weighted Average Number of Years | 15 years |
American Network Insurance Company | Maximum | |
Payables | |
Range of Years | 69 years |
Recoverables | |
Range of Years | 69 years |
American Network Insurance Company | Minimum | |
Payables | |
Range of Years | 1 year |
Recoverables | |
Range of Years | 1 year |
FAIR VALUE OF OTHER FINANCIAL_3
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS - NARRATIVE (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | $ 1,069.7 | $ 1,025.6 |
Common stocks | 55 | 48.6 |
Derivative assets | 13.3 | 119.3 |
Separate Accounts assets | 2,280.8 | 2,427.3 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative Liabilities | 0.9 | 30.4 |
Industrial and Miscellaneous | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 1,000.7 | |
Estimate of Fair Value Measurement | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Common stocks | 2 | |
Derivative assets | 12.4 | 88.9 |
Separate Accounts assets | 1,850 | 2,014 |
Total Assets | 1,864.4 | 2,102.9 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Common stocks | 0 | |
Derivative assets | 0 | 0 |
Separate Accounts assets | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Common stocks | 0 | |
Derivative assets | 12.4 | 88.9 |
Separate Accounts assets | 0 | 0 |
Total Assets | 12.4 | 88.9 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Common stocks | 2 | |
Derivative assets | 0 | 0 |
Separate Accounts assets | 0 | 0 |
Total Assets | 2 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Net Asset Value (NAV) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Common stocks | 0 | |
Derivative assets | 0 | 0 |
Separate Accounts assets | 1,850 | 2,014 |
Total Assets | 1,850 | 2,014 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Commercial mortgage-backed | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Estimate of Fair Value Measurement | Commercial mortgage-backed | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Estimate of Fair Value Measurement | Commercial mortgage-backed | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Estimate of Fair Value Measurement | Commercial mortgage-backed | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Estimate of Fair Value Measurement | Commercial mortgage-backed | Net Asset Value (NAV) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Fixed maturity securities, fair value | 0 | 0 |
Estimate of Fair Value Measurement | Industrial and Miscellaneous | ||
Assets, Fair Value Disclosure [Abstract] | ||
Common stocks | 2 | |
Estimate of Fair Value Measurement | Industrial and Miscellaneous | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Common stocks | 0 | |
Estimate of Fair Value Measurement | Industrial and Miscellaneous | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Common stocks | 0 | |
Estimate of Fair Value Measurement | Industrial and Miscellaneous | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Common stocks | 2 | |
Estimate of Fair Value Measurement | Industrial and Miscellaneous | Net Asset Value (NAV) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Common stocks | 0 | |
Estimate of Fair Value Measurement | Options | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets | 12.4 | 88.9 |
Estimate of Fair Value Measurement | Options | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets | 0 | 0 |
Estimate of Fair Value Measurement | Options | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets | 12.4 | 88.9 |
Estimate of Fair Value Measurement | Options | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets | 0 | 0 |
Estimate of Fair Value Measurement | Options | Net Asset Value (NAV) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets | $ 0 | $ 0 |
FAIR VALUE OF OTHER FINANCIAL_4
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS - LEVEL 3 INSTRUMENTS FAIR VALUE MEASUREMENTS (Details) - Level 3 - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Opening Balance | $ 0 | $ 1.6 | $ 4.1 |
Transfers into Level 3 | 0.6 | ||
Transfers out of Level 3 | (0.5) | ||
Total Gains (Losses) Included in Net Income | 0 | 0 | (2.6) |
Total Gains (Losses) Included in Surplus | 0 | 5 | 0.5 |
Purchases | 2 | 0 | 0 |
Sales | 0 | (6.6) | (0.5) |
Closing Balance | 2 | 0 | 1.6 |
Commercial mortgage-backed | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Opening Balance | 0 | 1.6 | 4.1 |
Transfers into Level 3 | 0.6 | ||
Transfers out of Level 3 | (0.5) | ||
Total Gains (Losses) Included in Net Income | 0 | (2.6) | |
Total Gains (Losses) Included in Surplus | 5 | 0.5 | |
Purchases | 0 | 0 | |
Sales | (6.6) | (0.5) | |
Closing Balance | 0 | $ 1.6 | |
Industrial and Miscellaneous | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Opening Balance | 0 | ||
Total Gains (Losses) Included in Net Income | 0 | ||
Total Gains (Losses) Included in Surplus | 0 | ||
Purchases | 2 | ||
Sales | 0 | ||
Closing Balance | $ 2 | $ 0 |
FAIR VALUE OF OTHER FINANCIAL_5
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS - CARRYING VALUES AND FAIR VALUES OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | $ 1,864.4 | $ 2,102.9 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 12.4 | 88.9 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 2 | 0 |
Total Liabilities at Fair Value | 0 | 0 |
Estimate of Fair Value Measurement | Net Asset Value (NAV) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 1,850 | 2,014 |
Total Liabilities at Fair Value | 0 | 0 |
Bonds | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Bonds | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 1,002.6 | 1,032.5 |
Bonds | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 11 | 0 |
Bonds | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 1,065.5 | 1,021.4 |
Bonds | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 1,013.6 | 1,038 |
Preferred Stock | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 3.8 | 4.2 |
Preferred Stock | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Preferred Stock | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Preferred Stock | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 4.2 | 4.2 |
Preferred Stock | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 3.8 | 4.2 |
Common Stock | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Common Stock | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Common Stock | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 72.7 | 64.8 |
Common Stock | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 55 | 48.6 |
Common Stock | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 72.7 | 64.8 |
Mortgage Loans on Real Estate | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Mortgage Loans on Real Estate | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Mortgage Loans on Real Estate | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 16.2 | 0 |
Mortgage Loans on Real Estate | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 17 | 17 |
Mortgage Loans on Real Estate | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 16.2 | 16.8 |
Policy loans | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Policy loans | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Policy loans | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 121.9 | 65.3 |
Policy loans | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 109.9 | 57.2 |
Policy loans | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 121.9 | 65.3 |
Derivatives | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Derivatives | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 12.4 | 88.9 |
Derivatives | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Derivatives | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 18.7 | 88.9 |
Derivatives | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 18.7 | 88.9 |
Separate Accounts | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 421.8 | 418.1 |
Separate Accounts | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Separate Accounts | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 0 | 0 |
Separate Accounts | Net Asset Value (NAV) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 1,850 | 2,014 |
Separate Accounts | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 2,276.6 | 2,422.9 |
Separate Accounts | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets | 2,271.8 | 2,432.1 |
Policyholders liabilities: Investment contracts | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Liabilities at Fair Value | 0 | 0 |
Policyholders liabilities: Investment contracts | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Liabilities at Fair Value | 0 | 0 |
Policyholders liabilities: Investment contracts | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Liabilities at Fair Value | 4.9 | 0 |
Policyholders liabilities: Investment contracts | Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Liabilities at Fair Value | 4.9 | 4 |
Policyholders liabilities: Investment contracts | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Liabilities at Fair Value | $ 4.9 | $ 4 |
REINSURANCE AGREEMENTS - NARRAT
REINSURANCE AGREEMENTS - NARRATIVE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Premiums assumed | $ 2 | $ 2 | $ 3 |
Variable Universal Term Life Insurance Single Life | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Maximum amount of mortality risk retained | 4 | ||
Variable Universal Term Life Insurance Second To Die Life | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Maximum amount of mortality risk retained | 6 | ||
AXA Equitable | Variable Universal Term Life Insurance Single Life | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Ceded policyholders' account balances | 20 | ||
AXA Equitable | Variable Universal Term Life Insurance Second To Die Life | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Ceded policyholders' account balances | 25 | ||
Quota Share Arrangement | Affiliated Entity | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Premiums assumed | 2.4 | 2.4 | 2.5 |
Benefits assumed | $ 2.1 | $ 1.8 | $ 1.9 |
REINSURANCE AGREEMENTS - SCHEDU
REINSURANCE AGREEMENTS - SCHEDULE OF EFFECT OF REINSURANCE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of Reinsurance [Line Items] | |||
Direct premiums | $ 719 | $ 655 | $ 601 |
Considerations for supplementary contracts | 4 | 4 | 7 |
Reinsurance assumed | 2 | 2 | 3 |
Premiums and annuity considerations | 591.4 | 519.4 | 457.9 |
Protective Life | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance ceded | (76) | (92) | (103) |
Reserve balance | 1,314 | 1,383 | 1,389 |
Other Coverages that use developmental methods to calculate claim reserves | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance ceded | (58) | (50) | (50) |
Reserve balance | 282 | $ 289 | $ 296 |
Northern Trust | Protective Life | |||
Effects of Reinsurance [Line Items] | |||
Reserve balance | $ 1,023.6 |
RESERVES FOR LIFE CONTRACTS A_2
RESERVES FOR LIFE CONTRACTS AND DEPOSIT TYPE CONTRACTS (Details) $ in Millions | Dec. 31, 2018USD ($) |
Insurance [Abstract] | |
Insurance in force, gross premiums less than net premiums | $ 344.9 |
Reserve amount | $ 1 |
ANALYSIS OF ANNUITY ACTUARIAL_3
ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
With fair value adjustment | $ 183.5 | $ 194.3 |
At book value less current surrender charge of 5% or more | 2.6 | 2.9 |
At fair value | 527.5 | 637 |
Total with adjustment or at fair value | 713.6 | 834.2 |
At book value without adjustment (minimal or no charge or adjustment) | 302.7 | 298.8 |
Not subject to discretionary withdrawal | 75.3 | 79.2 |
Total direct and assumed | 1,091.6 | 1,212.2 |
Less: Reinsurance ceded | 559.2 | 571.2 |
Total (net) | $ 532.4 | $ 641 |
With fair value adjustment | 16.80% | 16.00% |
At book value less current surrender charge of 5% or more | 0.30% | 0.20% |
At fair value | 48.30% | 52.60% |
Total with adjustment or at fair value | 65.40% | 68.80% |
At book value without adjustment (minimal or no charge or adjustment) | 27.70% | 24.60% |
Not subject to discretionary withdrawal | 6.90% | 6.60% |
Total direct and assumed | 100.00% | 100.00% |
General Account | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
With fair value adjustment | $ 183.5 | $ 194.3 |
At book value less current surrender charge of 5% or more | 2.6 | 2.9 |
At fair value | 0 | 0 |
Total with adjustment or at fair value | 186.1 | 197.2 |
At book value without adjustment (minimal or no charge or adjustment) | 302.7 | 298.8 |
Not subject to discretionary withdrawal | 75.3 | 79.2 |
Total direct and assumed | 564.1 | 575.2 |
Less: Reinsurance ceded | 559.2 | 571.2 |
Total (net) | 4.9 | 4 |
Separate Accounts with Guarantees | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
With fair value adjustment | 0 | 0 |
At book value less current surrender charge of 5% or more | 0 | 0 |
At fair value | 0 | 0 |
Total with adjustment or at fair value | 0 | 0 |
At book value without adjustment (minimal or no charge or adjustment) | 0 | 0 |
Not subject to discretionary withdrawal | 0 | 0 |
Total direct and assumed | 0 | 0 |
Less: Reinsurance ceded | 0 | 0 |
Total (net) | 0 | 0 |
Non-Guaranteed Separate Accounts | ||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||
With fair value adjustment | 0 | 0 |
At book value less current surrender charge of 5% or more | 0 | 0 |
At fair value | 527.5 | 637 |
Total with adjustment or at fair value | 527.5 | 637 |
At book value without adjustment (minimal or no charge or adjustment) | 0 | 0 |
Not subject to discretionary withdrawal | 0 | 0 |
Total direct and assumed | 527.5 | 637 |
Less: Reinsurance ceded | 0 | 0 |
Total (net) | $ 527.5 | $ 637 |
PREMIUM AND ANNUITY CONSIDERA_3
PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Guarantee Insurance Contracts, Premium Received over Contract Period [Line Items] | ||
Gross | $ 2.5 | $ 4.2 |
Net of Loading | 2.5 | 4.2 |
Ordinary new business | ||
Financial Guarantee Insurance Contracts, Premium Received over Contract Period [Line Items] | ||
Gross | (0.1) | 0 |
Net of Loading | (0.1) | 0 |
Ordinary renewal | ||
Financial Guarantee Insurance Contracts, Premium Received over Contract Period [Line Items] | ||
Gross | 2.2 | 3.4 |
Net of Loading | 2.2 | 3.4 |
Group life | ||
Financial Guarantee Insurance Contracts, Premium Received over Contract Period [Line Items] | ||
Gross | 0.4 | 0.8 |
Net of Loading | $ 0.4 | $ 0.8 |
SEPARATE ACCOUNTS - Summary of
SEPARATE ACCOUNTS - Summary of Separate Accounts (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Premiums, considerations or deposits | $ 239 |
Reserves | 2,068.4 |
Not subject to discretionary withdrawal | 0 |
Market value | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 1,664.6 |
Amortized cost | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 403.8 |
Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 2,068.4 |
With market value adjustment | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 30.3 |
At book value without market value adjustment and with current surrender charge of 5% or more | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 1,664.6 |
At book value without market value adjustment and with current surrender charge of 5% or more | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 373.5 |
Indexed | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Premiums, considerations or deposits | 0 |
Reserves | 30.3 |
Not subject to discretionary withdrawal | 0 |
Indexed | Market value | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Indexed | Amortized cost | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 30.3 |
Indexed | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 30.3 |
Indexed | With market value adjustment | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 30.3 |
Indexed | At book value without market value adjustment and with current surrender charge of 5% or more | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Indexed | At book value without market value adjustment and with current surrender charge of 5% or more | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee Less than/equal to 4% | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Premiums, considerations or deposits | 0 |
Reserves | 373.5 |
Not subject to discretionary withdrawal | 0 |
Non-Indexed Guarantee Less than/equal to 4% | Market value | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee Less than/equal to 4% | Amortized cost | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 373.5 |
Non-Indexed Guarantee Less than/equal to 4% | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 373.5 |
Non-Indexed Guarantee Less than/equal to 4% | With market value adjustment | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee Less than/equal to 4% | At book value without market value adjustment and with current surrender charge of 5% or more | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee Less than/equal to 4% | At book value without market value adjustment and with current surrender charge of 5% or more | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 373.5 |
Non-Indexed Guarantee More than 4% | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Premiums, considerations or deposits | 0 |
Reserves | 0 |
Not subject to discretionary withdrawal | 0 |
Non-Indexed Guarantee More than 4% | Market value | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee More than 4% | Amortized cost | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee More than 4% | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee More than 4% | With market value adjustment | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee More than 4% | At book value without market value adjustment and with current surrender charge of 5% or more | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Indexed Guarantee More than 4% | At book value without market value adjustment and with current surrender charge of 5% or more | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Guaranteed Separate Accounts | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Premiums, considerations or deposits | 239 |
Reserves | 1,664.6 |
Not subject to discretionary withdrawal | 0 |
Non-Guaranteed Separate Accounts | Market value | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 1,664.6 |
Non-Guaranteed Separate Accounts | Amortized cost | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Guaranteed Separate Accounts | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 1,664.6 |
Non-Guaranteed Separate Accounts | With market value adjustment | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 0 |
Non-Guaranteed Separate Accounts | At book value without market value adjustment and with current surrender charge of 5% or more | Subject to discretionary withdrawal: | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | 1,664.6 |
Non-Guaranteed Separate Accounts | At book value without market value adjustment and with current surrender charge of 5% or more | Not subject to discretionary withdrawal | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Reserves | $ 0 |
SEPARATE ACCOUNTS - Narrative (
SEPARATE ACCOUNTS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |||
Separate Accounts assets | $ 2,280.8 | $ 2,427.3 | |
Paid risk charges | 0.4 | 0.3 | $ 0.2 |
Payments to Separate Accounts | 1 | 0.8 | $ 1.8 |
Reserves | 2,068.4 | ||
Legally Insulated | |||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |||
Separate Accounts assets | 2,240.3 | 2,397 | |
Not Legally Insulated | |||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |||
Separate Accounts assets | 40.5 | 30.3 | |
Variable Annuity | Legally Insulated | |||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |||
Separate Accounts assets | 527.6 | 637.9 | |
Variable Life | Legally Insulated | |||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |||
Separate Accounts assets | 1,712.7 | $ 1,759.1 | |
MODCO Reinsurance - Protective | |||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |||
Reserves | $ 952.6 |
LOSS_CLAIM ADJUSTMENT EXPENSE_2
LOSS/CLAIM ADJUSTMENT EXPENSES - ROLLFORWARD OF THE UNPAID CLAIMS AND CLAIM EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Unpaid Claims and Claims Adjustment Expense, [Roll Forward] | ||
Gross balance | $ 12 | $ 1.1 |
Less Reinsurance | 4.1 | 0.1 |
Net balance | 7.9 | 1 |
Incurred Claims (net) Related to: | ||
Current Year | 41.9 | 17.3 |
Prior Year | 0 | (0.5) |
Total Incurred | 41.9 | 16.8 |
Paid Claims (net) Related to: | ||
Current Year | 24.6 | 9.7 |
Prior Year | 4.8 | 0.2 |
Total Paid | 29.4 | 9.9 |
Net balance | 20.4 | 7.9 |
Add Reinsurance | 10.9 | 4.1 |
Gross balance | 31.3 | 12 |
Group Insurance Policies | ||
Liability for Unpaid Claims and Claims Adjustment Expense, [Roll Forward] | ||
Gross balance | 12 | |
Paid Claims (net) Related to: | ||
Gross balance | $ 31.3 | $ 12 |
LOSS_CLAIM ADJUSTMENT EXPENSE_3
LOSS/CLAIM ADJUSTMENT EXPENSES - CUMULATIVE CLAIMS PAID AND INCURRED CLAIMS (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | $ 9.9 | $ 3.1 |
IBNR | 2.8 | 1.2 |
2017 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 2.5 | 3.1 |
IBNR | 0 | 1.2 |
Claim Frequency | 107 | 56 |
2018 | ||
Claims Development [Line Items] | ||
Cumulative long-term disability incurred claims | 7.4 | $ 0 |
IBNR | 2.8 | |
Claim Frequency | $ 146 |
LOSS_CLAIM ADJUSTMENT EXPENSE_4
LOSS/CLAIM ADJUSTMENT EXPENSES - NET LIABILITY (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Undiscounted Incurred Claims, net of reinsurance | $ 41.9 | $ 16.8 | |
Subtract Cumulative Paid Claims, net of reinsurance | (29.4) | (9.9) | |
Liability for unpaid claims and claims adjustment expense, net | 20.4 | 7.9 | $ 1 |
Reinsurance Recoverable on unpaid claims | 10.9 | 4.1 | 0.1 |
Liability for Claims and Claims Adjustment Expense | 31.3 | 12 | $ 1.1 |
Long-Term Disability | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Undiscounted Incurred Claims, net of reinsurance | 9.9 | 3.2 | |
Subtract Cumulative Paid Claims, net of reinsurance | (1.3) | (0.1) | |
Subtract Impact of Discounting, net of reinsurance | (0.8) | (0.1) | |
Liability for unpaid claims and claims adjustment expense, net | 7.8 | 3 | |
Reinsurance Recoverable on unpaid claims | 8.9 | 3.3 | |
Other short-duration contracts | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Liability for unpaid claims and claims adjustment expense, net | 12.6 | 4.9 | |
Reinsurance Recoverable on unpaid claims | $ 2 | $ 0.8 |
DEBT AND FEDERAL HOME LOAN BA_2
DEBT AND FEDERAL HOME LOAN BANK (FHLB) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
FHLB investment | $ 2,000,000 | $ 0 |
Borrowing capacity | 300,000,000 | |
Outstanding borrowings | $ 0 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |||
Allocated compensation costs | $ 3 | $ 3 | $ 3 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) shares in Millions, $ in Millions | Mar. 25, 2019 | Feb. 20, 2019 |
Subsequent Event [Line Items] | ||
Capital contribution | $ 70 | |
EQH | ||
Subsequent Event [Line Items] | ||
Percentage of ownership | 48.30% | |
Secondary Offering | AXA | ||
Subsequent Event [Line Items] | ||
Shares issued (in shares) | 46 | |
Secondary Offering | EQH | ||
Subsequent Event [Line Items] | ||
Shares issued (in shares) | 30 |