Adoption of Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-01, Accounting for Investments in Qualified Affordable Housing Projects ("ASU 2014-01"). ASU 2014-01 applies to all reporting entities that invest in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for a low-income housing tax credit. ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using a newly defined "proportional amortization method" if certain conditions are met. This policy election is required to be applied consistently to all qualifying investments, rather than a decision to be applied to individual investments. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the net investment performance in the Consolidated Statements of Income as components of "Federal income tax expense". We adopted this guidance in the third quarter of 2014 and have made a policy election to use the proportional amortization method. The adoption of this guidance did not materially impact our financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (“ASU 2014-12”). ASU 2014-12 requires that performance targets that affect vesting and could be achieved after the requisite service period be treated as performance conditions. The adoption of ASU 2014-12 in the first quarter of 2016 did not affect us, as we have historically recorded expense consistent with the requirements of this accounting update.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and provide related footnote disclosures. Our adoption of this amendment in the fourth quarter of 2016 did not affect us, as the additional disclosure requirements are applicable only to entities that have been subject to events or conditions that cast substantial doubt as to whether the entity has the ability to continue as a going concern.

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 affects the following areas: (i) limited partnerships and similar legal entities; (ii) the evaluation of fees paid to a decision maker

or a service provider as a variable interest; (iii) the effect of fee arrangements on the primary beneficiary determination; (iv) the

effect of related parties on the primary beneficiary determination; and (v) certain investment funds. We adopted this guidance

in the first quarter of 2016. Under the new guidance, our limited partnership and tax credit investments are variable interest

entities ("VIEs"); however, we are not the primary beneficiary of any of these investments. As such, the adoption had no

impact on our financial condition or results of operations. The required disclosures related to our VIEs are included in Note 5.

“Investments” below.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs to be netted against the related debt liability in the balance sheet rather than presented as a separate asset. However, ASU 2015-03 does not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Therefore, in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (“ASU 2015-15”). ASU 2015-15 clarifies that, in the absence of authoritative guidance on line-of-credit arrangements within ASU 2015-03, the SEC would not object to the deferral and presentation of debt issuance costs as an asset and the subsequent amortization of the deferred costs over the term of the line-of-credit arrangement. We adopted this guidance retrospectively, effective in the fourth quarter of 2015. As such, 2014 balances in this Form 10-K have been restated to reflect the revised guidance, as follows:



Income Statement Information
Year ended December 31, 2014
($ in thousands)	As Originally Reported		As Restated
Interest Expense	$	22,086	23,063
Other Expense	33,673		32,696

In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement

(“ASU 2015-05”). ASU 2015-05 provides guidance to customers with cloud computing arrangements that include a software

license. If a cloud computing arrangement includes a software license, the customer's accounting for the software license

element of the arrangement is consistent with the acquisition of other software licenses. If a cloud computing arrangement

does not include a software license, the customer accounts for the arrangement as a service contract. We adopted this guidance

in the first quarter of 2016, with prospective application. The impact of this adoption did not have a material effect on our

financial condition or results of operations.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value

per Share (or Its Equivalent) (“ASU 2015-07”). ASU 2015-07 provides that investments for which the practical expedient is

used to measure fair value at net asset value per share ("NAV") must be removed from the fair value hierarchy. Instead, those

investments must be included as a reconciling line item so that the total fair value amount of investments in the disclosure is

consistent with the amount on the balance sheet. ASU 2015-07 also includes disclosure requirements for investments for which

the NAV practical expedient was used to determine fair value. We adopted this guidance in the first quarter of 2016 and have included the related disclosures in Note 14. "Retirement Plans" below.

In May 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts (“ASU 2015-09”). ASU 2015-09 requires companies that issue short duration contracts to disclose additional information, including: (i) incurred and paid claims development tables; (ii) frequency and severity of claims; and (iii) information about material changes in judgments made in calculating the liability for unpaid claim adjustment expenses, including reasons for the change and the effects on the financial statements. We adopted this guidance in the fourth quarter of 2016 and have included the related disclosures in Note 9. "Reserves for Losses and Loss Expenses" below.

Pronouncements to be effective in the future

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Sub-topic 825-10): Recognition and

Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 provides guidance to improve

certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Specifically the guidance:

(i) requires equity investments to be measured at fair value with changes in fair value recognized in earnings; (ii) simplifies the

impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to

identify impairment; (iii) eliminates the requirement to disclose the methods and significant assumptions used to estimate the

fair value that is required to be disclosed for financial instruments measured at amortized cost; (iv) requires the use of the exit

price notion when measuring the fair value of financial instruments for disclosure purposes; and (v) clarifies that the need for a

valuation allowance on a deferred tax asset related to an available-for-sale ("AFS") security should be evaluated with other

deferred tax assets.

ASU 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual

periods. Early application to financial statements of annual or interim periods that have not yet been issued are permitted as of

the beginning of the year of adoption, otherwise early adoption of ASU 2016-01 is not permitted. We are currently evaluating

the impact of this guidance on our financial condition and results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires all lessees to

recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the

lease commencement date. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim

reporting periods within that annual period, with early adoption permitted. ASU 2016-02 requires the application of a modified

retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in

the financial statements. While we are currently evaluating ASU 2016-02, we do not expect a material impact on our financial

condition or results of operations from the adoption of this guidance.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee

Share-based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for share-based

payment transactions including: (i) income tax consequences; (ii) classification of awards as either equity or liabilities; (iii)

forfeitures assumptions; and (iv) cash flow classification. ASU 2016-09 is effective for annual periods beginning after

December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. We do not expect this ASU to have a material impact on our financial condition or results of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 will

change the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses

expected to occur over the remaining life of many financial assets, including, among others, HTM debt securities,

trade receivables, and reinsurance receivables. ASU 2016-13 requires a valuation allowance to be calculated on these financial

assets and that they be presented on the financial statements net of the valuation allowance. The valuation allowance is a

measurement of expected losses that is based on relevant information about past events, including historical experience, current

conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This methodology is

referred to as the current expected credit loss model. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted, but no earlier than annual periods

beginning after December 15, 2018. We are currently evaluating the impact of this guidance on our financial condition and

results of operations.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (“ASU 2016-15”). ASU 2016-15 adds or clarifies

guidance on the classification of certain cash receipts and payments in the statements of cash flows including, but not limited to: (i) debt prepayment or debt extinguishment costs; (ii) proceeds from the settlement of corporate-owned life insurance policies including bank-owned life insurance policies; (iii) distributions received from equity method investees; and (iv) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of this guidance on our statements of cash flows.

In October 2016, the FASB issued ASU 2016-17, Consolidation: Interests Held through Related Parties That Are Under Common Control ("ASU 2016-17"). ASU 2016-17 changes how a decision maker considers indirect interests in a VIE held under common control in making the primary beneficiary determination. ASU 2016-17 will be effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. We do not expect this ASU to impact us as we are not the decision maker in any of the VIEs in which we are invested.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash ("ASU 2016-18"). ASU 2016-18, requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents in the reconciliation of beginning and ending cash on the statements of cash flows. This update also requires a reconciliation of the statement of the cash flows to the balance sheet if the balance sheet includes more than one line item of cash, cash equivalents, and restricted cash. ASU 2016-18 is effective, with retrospective adoption, for annual periods beginning after December 15, 2017, and interim periods within those annual periods. We are currently evaluating the impact of this guidance on our statements of cash flows.