XML 29 R9.htm IDEA: XBRL DOCUMENT
v3.3.0.814

Investments | 9 Months Ended
--- | ---
Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract] |
Investments | Note 3 - Investments The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at September 30, 2015 were:
|  | Amortized Cost |  | Gross Unrealized |  | Fair Value
(Dollars in Millions) |  | Gains |  | Losses |
U.S. Government and Government Agencies and Authorities |  | $ | 303.6 |  |  | $ | 29.9 |  |  | $ | (2.2 | ) |  | $ | 331.3 |
States and Political Subdivisions |  | 1,482.3 |  |  | 111.4 |  |  | (2.0 | ) |  | 1,591.7 |
Corporate Securities: |  |  |  |  |  |  |  |
Bonds and Notes |  | 2,626.8 |  |  | 238.2 |  |  | (27.2 | ) |  | 2,837.8 |
Redeemable Preferred Stocks |  | 4.4 |  |  | 0.1 |  |  | — |  |  | 4.5 |
Collateralized Loan Obligations |  | 75.1 |  |  | 0.4 |  |  | (1.2 | ) |  | 74.3 |
Other Mortgage- and Asset-backed |  | 3.8 |  |  | 1.5 |  |  | — |  |  | 5.3 |
Investments in Fixed Maturities |  | $ | 4,496.0 |  |  | $ | 381.5 |  |  | $ | (32.6 | ) |  | $ | 4,844.9 |
The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at December 31, 2014 were:
|  | Amortized Cost |  | Gross Unrealized |  | Fair Value
(Dollars in Millions) |  | Gains |  | Losses |
U.S. Government and Government Agencies and Authorities |  | $ | 315.2 |  |  | $ | 32.3 |  |  | $ | (2.0 | ) |  | $ | 345.5 |
States and Political Subdivisions |  | 1,352.5 |  |  | 126.4 |  |  | (1.8 | ) |  | 1,477.1 |
Corporate Securities: |  |  |  |  |  |  |  |
Bonds and Notes |  | 2,599.3 |  |  | 294.3 |  |  | (15.1 | ) |  | 2,878.5 |
Redeemable Preferred Stocks |  | 5.9 |  |  | 0.8 |  |  | — |  |  | 6.7 |
Collateralized Loan Obligations |  | 64.9 |  |  | 0.3 |  |  | (0.8 | ) |  | 64.4 |
Other Mortgage- and Asset-backed |  | 3.9 |  |  | 1.5 |  |  | — |  |  | 5.4 |
Investments in Fixed Maturities |  | $ | 4,341.7 |  |  | $ | 455.6 |  |  | $ | (19.7 | ) |  | $ | 4,777.6 |
Note 3 - Investments (continued) There were no unsettled sales of Investments in Fixed Maturities at September 30, 2015 or December 31, 2014. Accrued Expenses and Other Liabilities included unsettled purchases of Investments in Fixed Maturities of $12.4 million at September 30, 2015, all of which settled in the following month. There were no unsettled purchases of Investments in Fixed Maturities at December 31, 2014. The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at September 30, 2015 by contractual maturity were:
(Dollars in Millions) |  | Amortized Cost |  | Fair Value
Due in One Year or Less |  | $ | 58.9 |  |  | $ | 59.8 |
Due after One Year to Five Years |  | 793.8 |  |  | 837.6 |
Due after Five Years to Ten Years |  | 1,414.0 |  |  | 1,459.4 |
Due after Ten Years |  | 2,021.0 |  |  | 2,270.8 |
Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date |  | 208.3 |  |  | 217.3 |
Investments in Fixed Maturities |  | $ | 4,496.0 |  |  | $ | 4,844.9 |
The expected maturities of the Company’s Investments in Fixed Maturities may differ from the contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Investments in Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date at September 30, 2015 consisted of securities issued by the Government National Mortgage Association with a fair value of $113.2 million, securities issued by the Federal National Mortgage Association with a fair value of $18.2 million, securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $6.3 million and securities of other non-governmental issuers with a fair value of $79.6 million. Gross unrealized gains and gross unrealized losses on the Company’s Investments in Equity Securities at September 30, 2015 were:
|  |  |  | Gross Unrealized |  |
(Dollars in Millions) |  | Cost |  | Gains |  | Losses |  | Fair Value
Preferred Stocks: |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | $ | 80.8 |  |  | $ | 4.4 |  |  | $ | (0.9 | ) |  | $ | 84.3 |
Other Industries |  | 21.0 |  |  | 2.9 |  |  | (0.5 | ) |  | 23.4 |
Common Stocks: |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | 18.4 |  |  | 4.1 |  |  | (0.8 | ) |  | 21.7 |
Other Industries |  | 9.8 |  |  | 6.0 |  |  | (0.5 | ) |  | 15.3 |
Other Equity Interests: |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 198.7 |  |  | 0.3 |  |  | (12.0 | ) |  | 187.0 |
Limited Liability Companies and Limited Partnerships |  | 181.1 |  |  | 25.9 |  |  | (3.0 | ) |  | 204.0 |
Investments in Equity Securities |  | $ | 509.8 |  |  | $ | 43.6 |  |  | $ | (17.7 | ) |  | $ | 535.7 |
Note 3 - Investments (continued) Gross unrealized gains and gross unrealized losses on the Company’s Investments in Equity Securities at December 31, 2014 were:
|  |  |  | Gross Unrealized |  |
(Dollars in Millions) |  | Cost |  | Gains |  | Losses |  | Fair Value
Preferred Stocks: |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | $ | 85.5 |  |  | $ | 5.2 |  |  | $ | (1.0 | ) |  | $ | 89.7 |
Other Industries |  | 16.3 |  |  | 3.5 |  |  | — |  |  | 19.8 |
Common Stocks: |  |  |  |  |  |  |  |
Manufacturing |  | 43.4 |  |  | 14.9 |  |  | (1.1 | ) |  | 57.2 |
Finance, Insurance and Real Estate |  | 34.3 |  |  | 6.2 |  |  | — |  |  | 40.5 |
Other Industries |  | 26.5 |  |  | 10.0 |  |  | (0.4 | ) |  | 36.1 |
Other Equity Interests: |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 195.2 |  |  | 8.2 |  |  | (0.7 | ) |  | 202.7 |
Limited Liability Companies and Limited Partnerships |  | 160.3 |  |  | 27.7 |  |  | (1.8 | ) |  | 186.2 |
Investments in Equity Securities |  | $ | 561.5 |  |  | $ | 75.7 |  |  | $ | (5.0 | ) |  | $ | 632.2 |
There were no unsettled purchases or sales of Investments in Equity Securities at either September 30, 2015 or December 31, 2014. An aging of unrealized losses on the Company’s Investments in Fixed Maturities and Equity Securities at September 30, 2015 is presented below.
|  | Less Than 12 Months |  | 12 Months or Longer |  | Total
(Dollars in Millions) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Fixed Maturities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and Government Agencies and Authorities |  | $ | 75.6 |  |  | $ | (0.9 | ) |  | $ | 24.7 |  |  | $ | (1.3 | ) |  | $ | 100.3 |  |  | $ | (2.2 | )
States and Political Subdivisions |  | 160.7 |  |  | (1.9 | ) |  | 0.9 |  |  | (0.1 | ) |  | 161.6 |  |  | (2.0 | )
Corporate Securities: |  |  |  |  |  |  |  |  |  |  |  |
Bonds and Notes |  | 605.9 |  |  | (19.1 | ) |  | 119.8 |  |  | (8.1 | ) |  | 725.7 |  |  | (27.2 | )
Collateralized Loan Obligations |  | 44.3 |  |  | (1.1 | ) |  | 0.8 |  |  | (0.1 | ) |  | 45.1 |  |  | (1.2 | )
Other Mortgage- and Asset-backed |  | — |  |  | — |  |  | 0.3 |  |  | — |  |  | 0.3 |  |  | — |
Total Fixed Maturities |  | 886.5 |  |  | (23.0 | ) |  | 146.5 |  |  | (9.6 | ) |  | 1,033.0 |  |  | (32.6 | )
Equity Securities: |  |  |  |  |  |  |  |  |  |  |  |
Preferred Stocks: |  |  |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | 2.7 |  |  | — |  |  | 17.2 |  |  | (0.9 | ) |  | 19.9 |  |  | (0.9 | )
Other Industries |  | 7.5 |  |  | (0.5 | ) |  | 0.5 |  |  | — |  |  | 8.0 |  |  | (0.5 | )
Common Stocks: |  |  |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | 9.9 |  |  | (0.8 | ) |  | — |  |  | — |  |  | 9.9 |  |  | (0.8 | )
Other Industries |  | 3.0 |  |  | (0.5 | ) |  | — |  |  | — |  |  | 3.0 |  |  | (0.5 | )
Other Equity Interests: |  |  |  |  |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 178.2 |  |  | (12.0 | ) |  | — |  |  | — |  |  | 178.2 |  |  | (12.0 | )
Limited Liability Companies and Limited Partnerships |  | 50.9 |  |  | (1.5 | ) |  | 47.3 |  |  | (1.5 | ) |  | 98.2 |  |  | (3.0 | )
Total Equity Securities |  | 252.2 |  |  | (15.3 | ) |  | 65.0 |  |  | (2.4 | ) |  | 317.2 |  |  | (17.7 | )
Total |  | $ | 1,138.7 |  |  | $ | (38.3 | ) |  | $ | 211.5 |  |  | $ | (12.0 | ) |  | $ | 1,350.2 |  |  | $ | (50.3 | )
Note 3 - Investments (continued) The Company regularly reviews its investment portfolio for factors that may indicate that a decline in fair value of an investment is other than temporary. The portions of the declines in the fair values of investments that are determined to be other than temporary are reported as losses in the Condensed Consolidated Statements of Income in the periods when such determinations are made. Unrealized losses on fixed maturities, which the Company has determined to be temporary at September 30, 2015, were $32.6 million, of which $9.6 million was related to fixed maturities that were in an unrealized loss position for 12 months or longer. There were no unrealized losses at September 30, 2015 related to securities for which the Company has recognized credit losses in earnings in the preceding table under the headings “Less Than 12 Months.” or “12 Months or Longer”. Investment-grade fixed maturity investments comprised $20.4 million, and below-investment-grade fixed maturity investments comprised $12.2 million of the unrealized losses on investments in fixed maturities at September 30, 2015. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was less than 6% of the amortized cost basis of the investment. At September 30, 2015, the Company did not have the intent to sell these investments and it was not more likely than not that the Company would be required to sell these investments before it recovered the amortized cost of such investments, which may be at maturity. Based on the Company’s evaluation at September 30, 2015 of the prospects of the issuers, including, but not limited to, the credit ratings of the issuers of the investments in the fixed maturities, and the Company’s intention not to sell and its determination that it would not be required to sell before it recovered the amortized cost of such investments, the Company concluded that the declines in the fair values of the Company’s investments in fixed maturities presented in the preceding table were temporary at the evaluation date. For equity securities, the Company considers various factors when determining whether a decline in the fair value is other than temporary, including, but not limited to:
• | The financial condition and prospects of the issuer;
• | The length of time and magnitude of the unrealized loss;
• | The volatility of the investment;
• | Analyst recommendations and near term price targets;
• | Opinions of the Company’s external investment managers;
• | Market liquidity;
• | Debt-like characteristics of perpetual preferred stocks and issuer ratings; and
• | The Company’s intentions to sell or ability to hold the investments until recovery.
With respect to Investments in Equity Securities, the Company concluded that the unrealized losses on its investments in preferred and common stocks at September 30, 2015 were temporary based on various factors, including the relative short length and magnitude of the losses and overall market volatility. The Company’s investments in other equity interests include investments in limited liability companies and limited partnerships that primarily invest in mezzanine debt, distressed debt, and secondary transactions. By the nature of their underlying investments, the Company believes that some of its investments in the limited liability companies and limited partnerships exhibit debt-like characteristics which, among other factors, the Company also considers when evaluating these investments for impairment. Based on evaluations of the factors in the preceding paragraph, the Company concluded that the declines in the fair values of the Company’s investments in equity securities presented in the preceding table were temporary at September 30, 2015. Note 3 - Investments (continued) An aging of unrealized losses on the Company’s Investments in Fixed Maturities and Equity Securities at December 31, 2014 is presented below.
|  | Less Than 12 Months |  | 12 Months or Longer |  | Total
(Dollars in Millions) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Fixed Maturities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and Government Agencies and Authorities |  | $ | 24.9 |  |  | $ | (0.7 | ) |  | $ | 55.5 |  |  | $ | (1.3 | ) |  | $ | 80.4 |  |  | $ | (2.0 | )
States and Political Subdivisions |  | 1.0 |  |  | — |  |  | 126.3 |  |  | (1.8 | ) |  | 127.3 |  |  | (1.8 | )
Corporate Securities: |  |  |  |  |  |  |  |  |  |  |  |
Bonds and Notes |  | 250.4 |  |  | (5.1 | ) |  | 360.5 |  |  | (10.0 | ) |  | 610.9 |  |  | (15.1 | )
Collateralized Loan Obligations |  | 51.2 |  |  | (0.7 | ) |  | 3.4 |  |  | (0.1 | ) |  | 54.6 |  |  | (0.8 | )
Other Mortgage- and Asset-backed |  | — |  |  | — |  |  | 0.4 |  |  | — |  |  | 0.4 |  |  | — |
Total Fixed Maturities |  | 327.5 |  |  | (6.5 | ) |  | 546.1 |  |  | (13.2 | ) |  | 873.6 |  |  | (19.7 | )
Equity Securities: |  |  |  |  |  |  |  |  |  |  |  |
Preferred Stocks: |  |  |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | 7.5 |  |  | (0.1 | ) |  | 12.1 |  |  | (0.9 | ) |  | 19.6 |  |  | (1.0 | )
Other Industries |  | — |  |  | — |  |  | 0.5 |  |  | — |  |  | 0.5 |  |  | — |
Common Stocks: |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  | 15.1 |  |  | (1.1 | ) |  | — |  |  | — |  |  | 15.1 |  |  | (1.1 | )
Other Industries |  | 4.2 |  |  | (0.4 | ) |  | 1.0 |  |  | — |  |  | 5.2 |  |  | (0.4 | )
Other Equity Interests: |  |  |  |  |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 14.9 |  |  | (0.1 | ) |  | 14.4 |  |  | (0.6 | ) |  | 29.3 |  |  | (0.7 | )
Limited Liability Companies and Limited Partnerships |  | 54.4 |  |  | (1.5 | ) |  | 6.6 |  |  | (0.3 | ) |  | 61.0 |  |  | (1.8 | )
Total Equity Securities |  | 96.1 |  |  | (3.2 | ) |  | 34.6 |  |  | (1.8 | ) |  | 130.7 |  |  | (5.0 | )
Total |  | $ | 423.6 |  |  | $ | (9.7 | ) |  | $ | 580.7 |  |  | $ | (15.0 | ) |  | $ | 1,004.3 |  |  | $ | (24.7 | )
Unrealized losses on fixed maturities, which the Company has determined to be temporary at December 31, 2014, were $19.7 million, of which $13.2 million was related to fixed maturities that were in an unrealized loss position for 12 months or longer. There were no unrealized losses at December 31, 2014 related to securities for which the Company has recognized credit losses in earnings in the preceding table under the headings “Less Than 12 Months” or “12 Months or Longer.” Investment-grade fixed maturity investments comprised $14.1 million and below-investment-grade fixed maturity investments comprised $5.6 million of the unrealized losses on investments in fixed maturities at December 31, 2014. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was less than 4% of the amortized cost basis of the investment. At December 31, 2014, the Company did not have the intent to sell these investments and it was not more likely than not that the Company would be required to sell these investments before recovery of its amortized cost basis, which may be at maturity. Based on the Company’s evaluation at December 31, 2014 of the prospects of the issuers, including, but not limited to, the credit ratings of the issuers of the investments in the fixed maturities, and the Company’s intention not to sell and its determination that it would not be required to sell before recovery of the amortized cost of such investments, the Company concluded that the declines in the fair values of the Company’s investments in fixed maturities presented in the preceding table were temporary at the evaluation date. With respect to Investments in Equity Securities, the Company concluded that the unrealized losses on its investments at December 31, 2014 were temporary based on various factors, including the relative short length and magnitude of the losses and overall market volatility, as well as, the debt-like characteristics of investments in certain other equity interests. Other-than-temporary impairment (“OTTI”) losses on Investments in Fixed Maturities may include a portion that is credit-related that is recognized in Retained Earnings and a portion related to factors other than credit that is recognized in Accumulated Other Comprehensive Income. The following table presents the pre-tax credit portion of OTTI losses on Note 3 - Investments (continued) Investments in Fixed Maturities held with a credit-related loss recognized as of the beginning or end of the periods presented and the changes in the cumulative balances for the periods presented.
|  | Nine Months Ended |  | Three Months Ended
(Dollars in Millions) |  | Sep 30, 2015 |  | Sep 30, 2014 |  | Sep 30, 2015 |  | Sep 30, 2014
Cumulative Balance of Pre-tax Credit Losses Recognized in Retained Earnings at Beginning of Period |  | $ | 5.3 |  |  | $ | 9.9 |  |  | $ | 5.3 |  |  | $ | 12.9 |
Pre-tax Credit Losses on Fixed Maturities without Pre-tax Credit Losses Included in Cumulative Balance at Beginning of Period |  | — |  |  | 2.4 |  |  | — |  |  | — |
Additional Pre-tax Credit Losses on Fixed Maturities with Pre-tax Credit Losses Included in Cumulative Balance at Beginning of Period |  | — |  |  | 0.6 |  |  | — |  |  | — |
Reductions for Change in Impairment Status: |  |  |  |  |  |  |  |
From Status of Credit Loss to Status of Intent-to-sell or Required-to-sell |  | — |  |  | (2.4 | ) |  | — |  |  | (2.4 | )
Cumulative Balance of Pre-tax Credit Losses Recognized in Retained Earnings at End of Period |  | $ | 5.3 |  |  | $ | 10.5 |  |  | $ | 5.3 |  |  | $ | 10.5 |
Gross gains and losses on sales of investments in fixed maturities and equity securities for the nine and three months ended September 30, 2015 and 2014 were:
|  | Nine Months Ended |  | Three Months Ended
(Dollars in Millions) |  | Sep 30, 2015 |  | Sep 30, 2014 |  | Sep 30, 2015 |  | Sep 30, 2014
Fixed Maturities: |  |  |  |  |  |  |  |
Gains on Sales |  | $ | 9.5 |  |  | $ | 5.0 |  |  | $ | 3.6 |  |  | $ | 0.2 |
Losses on Sales |  | (0.7 | ) |  | — |  |  | (0.1 | ) |  | — |
Equity Securities: |  |  |  |  |  |  |  |
Gains on Sales |  | 35.7 |  |  | 11.7 |  |  | 2.8 |  |  | 7.9 |
Losses on Sales |  | (1.4 | ) |  | — |  |  | (0.7 | ) |  | — |
Equity Method Limited Liability Investments include investments in limited liability investment companies and limited partnerships in which the Company’s interests are not deemed minor and are accounted for under the equity method of accounting. The Company’s investments in Equity Method Limited Liability Investments are generally of a passive nature in that the Company does not take an active role in the management of the investment entity. The Company’s maximum exposure to loss at September 30, 2015 is limited to the total carrying value of $179.4 million. In addition, the Company had outstanding commitments totaling approximately $66.8 million to fund Equity Method Limited Liability Investments at September 30, 2015. The carrying values of the Company’s Other Investments at September 30, 2015 and December 31, 2014 were:
(Dollars in Millions) |  | Sep 30, 2015 |  | Dec 31, 2014
Loans to Policyholders at Unpaid Principal |  | $ | 286.9 |  |  | $ | 283.4 |
Real Estate at Depreciated Cost |  | 158.2 |  |  | 160.9 |
Trading Securities at Fair Value |  | 4.6 |  |  | 4.9 |
Other |  | 1.3 |  |  | 0.4 |
Total |  | $ | 451.0 |  |  | $ | 449.6 |

X
- Definition The entire disclosure for investments, including all tables. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Article 6 -Section 10 -Paragraph (c) -Subparagraph (1) + Details
Name: | invest_InvestmentTextBlock
Namespace Prefix: | invest_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration