CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Investments: | ||
Fixed maturities, available for sale, allowance for credit losses | $ 19.9 | $ 2.1 |
Fixed maturities, available for sale, amortized cost | 19,420.2 | 19,179.5 |
Equity securities, cost | 65.9 | 44.2 |
Mortgage loans, allowance for credit losses | 8.3 | 6.7 |
Investments held by variable interest entities, amortized cost | 1,216.4 | $ 1,206.3 |
Investments held by variable interest entities, allowance for credit losses | 37.7 | |
Reinsurance receivables, allowance for current expected credit losses | $ 4.0 | |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 8,000,000,000 | 8,000,000,000 |
Common stock, shares issued (in shares) | 143,610,046 | 148,084,178 |
Common stock, shares outstanding (in shares) | 143,610,046 | 148,084,178 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (21.2) | $ 51.8 |
Other comprehensive income, before tax: | ||
Unrealized gains (losses) on investments: | (1,325.4) | 690.2 |
Adjustment to present value of future profits and deferred acquisition costs | 136.3 | (50.5) |
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized | 135.5 | (31.5) |
Reclassification adjustments: | ||
For net realized investment losses included in net income (loss) | 65.6 | 1.1 |
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income (loss) | (3.4) | 0.2 |
Other comprehensive income (loss) before tax | (991.4) | 609.5 |
Income tax (expense) benefit related to items of accumulated other comprehensive income (loss) | 214.1 | (132.3) |
Other comprehensive income (loss), net of tax | (777.3) | 477.2 |
Comprehensive income (loss) | $ (798.5) | $ 529.0 |
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions |
Total |
Common stock |
Additional paid-in capital |
Accumulated other comprehensive income |
Retained earnings |
---|---|---|---|---|---|
Balance, beginning of period (in shares) at Dec. 31, 2018 | 162,202,000 | ||||
Balance, beginning of period at Dec. 31, 2018 | $ 3,370.9 | $ 1.6 | $ 2,995.0 | $ 177.7 | $ 196.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 51.8 | 51.8 | |||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit) | 477.1 | 477.1 | |||
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) | 0.1 | 0.1 | |||
Common stock repurchased (in shares) | (2,893,000) | ||||
Common stock repurchased | (47.0) | (47.0) | |||
Dividends on common stock | (16.1) | (16.1) | |||
Employee benefit plans, net of shares used to pay tax withholdings (in shares) | 646,000 | ||||
Employee benefit plans, net of shares used to pay tax withholdings | 4.2 | 4.2 | |||
Balance, end of period (in shares) at Mar. 31, 2019 | 159,955,000 | ||||
Balance, end of period at Mar. 31, 2019 | $ 3,837.9 | $ 1.6 | 2,952.2 | 654.9 | 229.2 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 148,084,178 | 148,084,000 | |||
Balance, beginning of period at Dec. 31, 2019 | $ 4,677.0 | $ 1.5 | 2,767.3 | 1,372.5 | 535.7 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (21.2) | (21.2) | |||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit) | (777.3) | (777.3) | |||
Common stock repurchased (in shares) | (5,083,000) | ||||
Common stock repurchased | (83.0) | $ (0.1) | (82.9) | ||
Dividends on common stock | (16.0) | (16.0) | |||
Employee benefit plans, net of shares used to pay tax withholdings (in shares) | 609,000 | ||||
Employee benefit plans, net of shares used to pay tax withholdings | $ 4.1 | 4.1 | |||
Balance, end of period (in shares) at Mar. 31, 2020 | 143,610,046 | 143,610,000 | |||
Balance, end of period at Mar. 31, 2020 | $ 3,765.8 | $ 1.4 | $ 2,688.5 | $ 595.2 | $ 480.7 |
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit) | $ (214.1) | $ 132.3 |
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit) (less than for three months ended March 31, 2019) | $ 0.1 |
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Cash flows from operating activities: | ||
Insurance policy income | $ 575.3 | $ 581.2 |
Net investment income | 285.7 | 272.3 |
Fee revenue and other income | 34.4 | 31.8 |
Insurance policy benefits | (429.2) | (407.7) |
Interest expense | (20.3) | (28.9) |
Deferrable policy acquisition costs | (68.2) | (69.6) |
Other operating costs | (250.1) | (241.8) |
Income taxes | (1.9) | 5.0 |
Net cash from operating activities | 125.7 | 142.3 |
Cash flows from investing activities: | ||
Sales of investments | 417.9 | 1,775.5 |
Maturities and redemptions of investments | 595.7 | 516.2 |
Purchases of investments | (1,178.2) | (2,406.5) |
Net purchases of trading securities | (6.3) | (0.7) |
Other | (7.3) | (10.6) |
Net cash used by investing activities | (178.2) | (126.1) |
Cash flows from financing activities: | ||
Issuance of common stock | 2.7 | 2.8 |
Payments to repurchase common stock | (88.0) | (44.0) |
Common stock dividends paid | (16.2) | (16.4) |
Amounts received for deposit products | 404.8 | 420.1 |
Withdrawals from deposit products | (354.0) | (342.8) |
Issuance of investment borrowings: | ||
Federal Home Loan Bank | 0.0 | 50.0 |
Payments on investment borrowings: | ||
Federal Home Loan Bank | (0.5) | (50.3) |
Related to variable interest entities | (0.5) | (0.9) |
Net cash provided (used) by financing activities | (51.7) | 18.5 |
Net increase (decrease) in cash and cash equivalents | (104.2) | 34.7 |
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period | 654.7 | 656.6 |
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period | $ 550.5 | $ 691.3 |
BUSINESS AND BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | BUSINESS AND BASIS OF PRESENTATION The following notes should be read together with the notes to the consolidated financial statements included in our 2019 Annual Report on Form 10-K. CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products. The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries. Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries. We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets. We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing. Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. As permitted by rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We have reclassified certain amounts from the prior periods to conform to the 2020 presentation. These reclassifications have no effect on net income or shareholders' equity. Results for interim periods are not necessarily indicative of the results that may be expected for a full year, especially when considering the risks and uncertainties associated with the novel coronavirus ("COVID-19") and the impact it may have on our business, results of operations and financial condition. The COVID-19 pandemic has negatively impacted the U.S. and global economies, lowered equity market valuations, created significant volatility and disruption in the capital markets, dramatically increased unemployment levels and has fueled concerns that it will lead to a global recession. Depending on the duration and severity of the pandemic, we foresee the potential for adverse impacts related to, among other things: (i) sales results; (ii) insurance product margin; (iii) net investment income; (iv) invested assets; (v) regulatory capital; (vi) liabilities for insurance products; (vii) deferred acquisition costs; (viii) the present value of future profits; and (ix) income tax assets. The full extent to which COVID-19 will impact our business, results of operations and financial condition remains uncertain. The balance sheet at December 31, 2019, presented herein, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals. If our future experience differs from these estimates and assumptions, our financial statements would be materially affected. The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates.
|
INVESTMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as either net investment income (classified as investment income from policyholder and other special-purpose portfolios) or realized investment gains (losses)). Trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; (ii) investments supporting certain insurance liabilities; and (iii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option. The change in fair value of the income generating investments and investments supporting insurance liabilities and reinsurance agreements is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in realized investment gains (losses). Investment income related to investments supporting certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products. When an available for sale fixed maturity security's fair value is below the amortized cost, the security is considered impaired. If a portion of the decline is due to credit-related factors, we separate the credit loss component of the impairment from the amount related to all other factors and report the credit loss component in net realized investment gains (losses) limited to the difference between estimated fair value and amortized cost. The impairment related to all other factors (non-credit factors) is reported in accumulated other comprehensive income along with unrealized gains related to fixed maturity investments, available for sale, net of tax and related adjustments. The allowance is adjusted for any additional credit losses and subsequent recoveries. When recognizing an allowance associated with a credit loss, the cost basis is not adjusted. When we determine a security is uncollectable, the remaining amortized cost will be written off. In determining the credit loss component, we discount the estimated cash flows on a security by security basis. We consider the impact of macroeconomic conditions on inputs used to measure the amount of credit loss. For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees. For corporate bonds, cash flow estimates are derived by considering asset type, rating, time to maturity, and applying an expected loss rate. If we intend to sell an impaired fixed maturity security, available for sale, or identify an impaired fixed maturity security, available for sale, for which is it more likely than not we will be required to sell before anticipated recovery, the difference between the fair value and the amortized cost is included in net realized investment gains (losses) and the fair value becomes the new amortized cost. The new cost basis is not adjusted for any subsequent recoveries in fair value. The Company reports investment income accrued separately from fixed maturities, available for sale, and has elected not to measure an allowance for credit losses for investment income accrued. Investment income accrued is written off through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments. These amounts, included in shareholders' equity as of March 31, 2020 and December 31, 2019, were as follows (dollars in millions):
________
At March 31, 2020, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions):
At December 31, 2019, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at March 31, 2020, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities (such as asset-backed securities, collateralized loan obligations, commercial mortgage-backed securities, agency residential mortgage-backed securities and non-agency residential mortgage-backed securities, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2019, by contractual maturity.
Gross Unrealized Investment Losses Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active strategic asset allocation and investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities. The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at March 31, 2020 (dollars in millions):
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2019 (dollars in millions):
Based on management's current assessment of investments with unrealized losses at March 31, 2020, the Company believes the issuers of the securities will continue to meet their obligations. While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments. In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery. The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2020 (dollars in millions):
Mortgage Loans Mortgage loans are carried at amortized unpaid balance, net of allowance for estimated credit losses. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Payment terms specified for mortgage loans may include a prepayment penalty for unscheduled payoff of the investment. Prepayment penalties are recognized as investment income when received. The allowance for estimated credit losses is measured using a loss-rate method on an individual asset basis. Inputs used include asset-specific characteristics, current economic conditions, historical loss information and reasonable and supportable forecasts about future economic conditions. At March 31, 2020, the mortgage loan balance was primarily comprised of commercial mortgage loans. At March 31, 2020, there was one commercial mortgage loan in process of foreclosure with a carrying value of $5.9 million and there were three residential mortgage loans that were noncurrent with a carrying value of $.5 million. Our commercial mortgage loan portfolio is comprised of large commercial mortgage loans. Our loans have risk characteristics that are individually unique. At March 31, 2020, we held residential mortgage loan investments with an amortized cost and fair value of $102.9 million and $103.0 million, respectively. The following table provides the amortized cost by year of origination and estimated fair value of our outstanding commercial mortgage loans and the underlying collateral as of March 31, 2020 (dollars in millions):
________________
The following table summarizes changes in the allowance for credit losses related to mortgage loans for the three months ended March 31, 2020 (dollars in millions):
Net Realized Investment Gains (Losses) The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):
_________________
During the first three months of 2020, we recognized net realized investment losses of $115.5 million, which were comprised of: (i) $11.7 million of net losses from the sales of investments; (ii) $15.7 million of losses related to equity securities, including the change in fair value; (iii) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $26.7 million; (iv) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $6.0 million; and (v) an increase in the allowance for credit losses and other-than-temporary impairment losses of $55.4 million. During the first three months of 2019, we recognized net realized investment gains of $16.1 million, which were comprised of: (i) $1.7 million of net gains from the sales of investments; (ii) $10.7 million of gains related to equity securities, including the change in fair value; (iii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $3.6 million; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.3 million; and (v) $2.2 million of writedowns of investments for other than temporary declines in fair value recognized through net income. Our fixed maturity investments are generally purchased in the context of various long-term strategies, including funding insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities. In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities. At March 31, 2020, there were no fixed maturity investments in default. During the first three months of 2020, the $21.4 million of realized losses on sales of $174.3 million of fixed maturity securities, available for sale included: (i) $6.9 million related to various corporate securities; (ii) $11.7 million related to commercial mortgage-backed securities; and (iii) $2.8 million related to various other investments. Securities are generally sold at a loss following unforeseen issuer-specific events or conditions or shifts in perceived relative values. These reasons include but are not limited to: (i) changes in the investment environment, including changes in relative value among potential investment strategies; (ii) expectation that the market value could deteriorate; (iii) our desire to reduce our exposure to an asset class, an issuer or an industry; (iv) prospective or actual changes in credit quality; or (v) changes in expected portfolio cash flows. During the first three months of 2019, the $51.5 million of realized losses on sales of $747.4 million of fixed maturity securities, available for sale, included: (i) $44.6 million related to various corporate securities; (ii) $6.9 million related to various other investments. During the first three months of 2019, we recognized $2.2 million of impairment losses recorded in earnings related to a corporate security due to issuer specific event. Prior to January 1, 2020, we regularly evaluated all of our investments with unrealized losses for possible impairment. Our assessment of whether unrealized losses were "other than temporary" required significant judgment. Factors considered included: (i) the extent to which fair value was less than the cost basis; (ii) the length of time that the fair value had been less than cost; (iii) whether the unrealized loss was event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment was investment-grade and/or had been downgraded since its purchase; (vi) whether the issuer was current on all payments in accordance with the contractual terms of the investment and was expected to meet all of its obligations under the terms of the investment; (vii) whether we intended to sell the investment or it was more likely than not that circumstances would require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment would be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors. Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio. Significant losses could have a material adverse effect on our consolidated financial statements in future periods. The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the three months ended March 31, 2019 (dollars in millions):
__________ (a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis.
|
EARNINGS PER SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):
In the three months ended March 31, 2020, equivalent common shares of 768,000 (related to stock options, restricted stock and performance units) were not included in the diluted weighted average shares outstanding, because their inclusion would have been antidilutive due to the net loss recognized by the Company in such period. |
BUSINESS SEGMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENTS | BUSINESS SEGMENTS Prior to 2020, the Company managed its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which were defined on the basis of product distribution; long-term care in run-off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. In January 2020, we announced a new operating model that changes how we view our operating segments. Instead of the operating business segments described above, we view our operations as four insurance product lines (annuity, health, life and long-term care) and the investment and fee revenue segments. The new structure creates a leaner, more integrated, customer-centric organization that better positions us for long-term success and shareholder value creation. Our new segments are aligned based on their common characteristics, comparability of profit margins and the way management makes operating decisions and assesses the performance of the business. We began reporting under the new segment structure in the first quarter of 2020. Prior period results have been reclassified to conform to the new reporting structure. Our insurance product line segments (including annuity, health, life and long-term care) include marketing, underwriting and administration of the policies our insurance subsidiaries sell. Under our new operating model, the business written in each of the four product categories through all of our insurance subsidiaries is aggregated allowing management and investors to assess the performance of each product category. When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits and interest credited to policyholders; and (ii) amortization, non-deferred commissions and advertising expense. Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average insurance liabilities for the block in each period. Income from insurance products is the sum of the insurance margins of the annuity, health, life and long-term care product lines, less expenses allocated to the insurance lines. It excludes the income from our fee income business, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products help provide a better understanding of the business and a more meaningful analysis of the results of our insurance product lines. Under our new structure, we market our insurance products through the Consumer and Worksite Divisions that reflect the customers served by the Company. The Consumer Division serves individual consumers, engaging with them on the phone, online, face-to-face with agents, or through a combination of sales channels. This structure unifies consumer capabilities into a single division and integrates the strength of our agent sales forces and industry-leading direct-to-consumer business with proven experience in advertising, web/digital and call center support. The Worksite Division focuses on worksite and group sales for businesses, associations, and other membership groups, interacting with customers at their place of employment. By creating a dedicated Worksite Division, we bring a sharper focus to this high-growth business while further capitalizing on the strength of our recent acquisition of Web Benefits Design Corporation ("WBD"). The individual results for the Worksite Division are currently not significant pursuant to accounting standards, but are expected to grow. We plan to analyze the profitability of the insurance products of the Consumer and Worksite Divisions separately when the Worksite Division becomes significant. We also centralized certain functional areas previously housed in the three business segments, including marketing, business unit finance, sales training and support, and agent recruiting, among others. All policy, contract, and certificate terms, conditions, and benefits remain unchanged. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability of this segment is the total net investment income not allocated to the insurance products. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable and investment borrowings; and (iv) certain expenses related to benefit plans that are offset by special-purpose investment income. Investment income not allocated to product lines includes investment income on investments in excess of average insurance liabilities, investments held by our holding companies, the spread we earn from the Federal Home Loan Bank ("FHLB") investment borrowing program and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income from company-owned life insurance ("COLI") and variations in income from alternative investments), net of interest expense on corporate debt. Our fee and other revenue segment includes the earnings generated from sales of third-party insurance products, services provided by WBD (our wholly owned on-line benefit administration firm) and the operations of our broker-dealer and registered investment advisor. Expenses not allocated to product lines include the expenses of our corporate operations, excluding interest expense on debt. We measure segment performance by excluding net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business. Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of net realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business. The net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments. Net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business. Operating information by segment is as follows (dollars in millions):
(continued on next page) (continued from previous page)
A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income is as follows (dollars in millions):
|
ACCOUNTING FOR DERIVATIVES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTING FOR DERIVATIVES | ACCOUNTING FOR DERIVATIVES Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions):
We are required to establish an embedded derivative related to a modified coinsurance agreement pursuant to which we assume the risks of a block of health insurance business. The embedded derivative represents the mark-to-market adjustment for approximately $115 million in underlying investments held by the ceding reinsurer at March 31, 2020. Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period. Typically, on each policy anniversary date, a new index period begins. We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums. The Company accounts for the options attributed to the policyholder for the estimated life of the contract as embedded derivatives. These accounting requirements often create volatility in the earnings from these products. We typically buy call options (including call spreads) referenced to the applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked. The notional amount of these options were $3.2 billion at both March 31, 2020 and December 31, 2019. We purchase certain fixed maturity securities that contain embedded derivatives that are required to be held at fair value on the consolidated balance sheet. We have elected the fair value option to carry the entire security at fair value with changes in fair value recognized in net income. The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions):
Derivative Counterparty Risk If the counterparties to the call options fail to meet their obligations, we may recognize a loss. We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy. At March 31, 2020, all of our counterparties were rated "A" or higher by S&P Global Ratings ("S&P"). The Company and its subsidiaries are parties to master netting arrangements with its counterparties related to entering into various derivative contracts. Exchange-traded derivatives require margin accounts which we offset. The following table summarizes information related to derivatives with master netting arrangements or collateral as of March 31, 2020 and December 31, 2019 (dollars in millions):
|
REINSURANCE |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Insurance [Abstract] | |
REINSURANCE | REINSURANCE The cost of reinsurance ceded totaled $84.0 million and $67.9 million in the first quarters of 2020 and 2019, respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $106.0 million and $108.7 million in the first quarters of 2020 and 2019, respectively. From time to time, we assume insurance from other companies. Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs. Reinsurance premiums assumed totaled $6.0 million and $6.5 million in the first quarters of 2020 and 2019, respectively. Insurance policy benefits related to reinsurance assumed totaled $8.4 million and $8.9 million in the first quarters of 2020 and 2019, respectively.
|
INCOME TAXES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The Company's interim tax expense is based upon the estimated annual effective tax rate for the respective period. Under authoritative guidance, certain items are required to be excluded from the estimated annual effective tax rate calculation. Such items include changes in judgment about the realizability of deferred tax assets resulting from changes in projections of income expected to be available in future years, and items deemed to be unusual, infrequent, or that can not be reliably estimated. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. The components of income tax expense (benefit) are as follows (dollars in millions):
A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows:
The Tax Cuts and Job Act (the “Tax Reform Act”), which was effective in 2018, eliminated a company’s ability to carryback losses to prior years for losses realized in 2018 and beyond. In addition, the utilization of these net operating loss carryforwards ("NOLs") to offset income in 2018 and subsequent years was limited to 80 percent of taxable income. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, a tax-and-spending package intended to provide economic relief to address the impact of the COVID-19 pandemic, was signed into law in March 2020. Provisions in the CARES Act permit NOLs arising in a taxable year beginning after December 31, 2017, and before January 1, 2021 to be allowed as a carryback to each of the five taxable years preceding the taxable year of such loss. Accordingly, we are able to carryback the NOL created in 2018 related to the long-term care reinsurance transaction to 2017 and 2016 resulting in a $34.0 million tax benefit from the difference in tax rates between the current enacted rate of 21% and the enacted rate in 2016 and 2017 of 35%. This provision also accelerated the utilization of approximately $375 million of life NOLs and restored approximately $130 million of non-life NOLs. Further, the CARES Act temporarily repeals the 80 percent limitation for taxable years beginning before January 1, 2021 (as required under the Tax Reform Act). This provision resulted in the acceleration of approximately $105 million of life NOLs and restored approximately $35 million of non-life NOLs. The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):
Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities and NOLs. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. In the fourth quarter of 2019, the Company implemented a tax planning strategy whereby, pursuant to the Internal Revenue Code (the "Code"), the Company will reflect a change in its method of accounting for indirect costs allocable to self-constructed real estate assets in its 2019 federal income tax return filing. Such tax planning strategy is expected to increase taxable income for the tax years 2019 through 2023. We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis using a deferred tax valuation model. Our model is adjusted to reflect changes in our projections of future taxable income including changes resulting from the Tax Reform Act, investment strategies, the impact of the sale or reinsurance of business, the recapture of business previously ceded and tax planning strategies. Our estimates of future taxable income are based on evidence we consider to be objective and verifiable. At March 31, 2020, our projection of future taxable income for purposes of determining the valuation allowance is based on our adjusted average annual baseline taxable income which is assumed to increase by approximately 3.5% for the next five years, and level taxable income thereafter, plus the incremental increase to non-life taxable income associated with a tax planning strategy. Based on our assessment, we have concluded that it is more likely than not that all our deferred tax assets of $599.9 million will be realized through future taxable earnings. Therefore, the Company released its remaining valuation allowance of $193.7 million in the fourth quarter of 2019. Recovery of our deferred tax asset is dependent on achieving the level of future taxable income projected in our deferred tax valuation model and failure to do so could result in an increase in the valuation allowance in a future period. Any future increase in the valuation allowance may result in additional income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future. The Code limits the extent to which losses realized by a non-life entity (or entities) may offset income from a life insurance company (or companies) to the lesser of: (i) 35 percent of the income of the life insurance company; or (ii) 35 percent of the total loss of the non-life entities (including NOLs of the non-life entities). There is no similar limitation on the extent to which losses realized by a life insurance entity (or entities) may offset income from a non-life entity (or entities). Section 382 of the Code imposes limitations on a corporation's ability to use its NOLs when the company undergoes a 50 percent ownership change over a three-year period. Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes. Such transactions may include, but are not limited to, additional repurchases under our securities repurchase program, issuances of common stock and acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account. Many of these transactions are beyond our control. If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income. The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (1.63 percent at March 31, 2020), and the annual restriction could limit our ability to use a substantial portion of our NOLs to offset future taxable income. We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of March 31, 2020, we were below the 50 percent ownership change level that could limit our ability to utilize our NOLs. Pursuant to the Tax Reform Act, NOLs generated subsequent to 2017 do not have an expiration date. We have $2.2 billion of federal NOLs as of March 31, 2020, as summarized below (dollars in millions):
Our life NOLs are expected to be fully utilized in 2020, depending on the level of life taxable income during such period. Our non-life NOLs can be used to offset 35 percent of remaining life insurance company taxable income after application of the life NOLs, until all non-life NOLs are utilized or expire. We also had deferred tax assets related to NOLs for state income taxes of $9.1 million and $10.3 million at March 31, 2020 and December 31, 2019, respectively. The related state NOLs are available to offset future state taxable income in certain states through 2033. |
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS The following notes payable were direct corporate obligations of the Company as of March 31, 2020 and December 31, 2019 (dollars in millions):
Revolving Credit Agreement On May 19, 2015, the Company entered into a $150.0 million four-year unsecured revolving credit agreement with KeyBank National Association, as administrative agent (the "Agent"), and the lenders from time to time party thereto. On May 19, 2015, the Company made an initial drawing of $100.0 million under the Revolving Credit Agreement. On October 13, 2017, the Company entered into an amendment and restatement agreement (the "Amendment Agreement") with respect to its revolving credit agreement (as amended by the Amendment Agreement, the "Revolving Credit Agreement"). The Amendment Agreement, among other things, increased the total commitments available under the revolving credit facility from $150.0 million to $250.0 million, increased the aggregate amount of additional incremental loans the Company may incur from $50.0 million to $100.0 million and extended the maturity date of the revolving credit facility from May 19, 2019 to October 13, 2022. There were no amounts outstanding under the Revolving Credit Agreement during the three months ended March 31, 2020. The interest rates with respect to loans under the Revolving Credit Agreement are based on, at the Company's option, a floating base rate (defined as a per annum rate equal to the highest of: (i) the federal funds rate plus 0.50%; (ii) the "prime rate" of the Agent; and (iii) the eurodollar rate for a one-month interest period plus an applicable margin based on the Company's unsecured debt rating), or a eurodollar rate plus an applicable margin based on the Company's unsecured debt rating. The margins under the Revolving Credit Agreement range from 1.375 percent to 2.125 percent, in the case of loans at the eurodollar rate, and 0.375 percent to 1.125 percent, in the case of loans at the base rate. In addition, the daily average undrawn portion of the Revolving Credit Agreement accrues a commitment fee payable quarterly in arrears. The applicable margin for, and the commitment fee applicable to, the Revolving Credit Agreement, will be adjusted from time to time pursuant to a ratings-based pricing grid. The Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio of not more than 35.0 percent (such ratio was 24.3 percent at March 31, 2020); (ii) an aggregate ratio of total adjusted capital to company action level risk-based capital for the Company's insurance subsidiaries of not less than 250 percent (such ratio was estimated to be 406 percent at March 31, 2020); and (iii) a minimum consolidated net worth of not less than the sum of (x) $2,674 million plus (y) 50.0 percent of the net equity proceeds received by the Company from the issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,170.6 million at March 31, 2020 compared to the minimum requirement of $2,693.0 million). Scheduled Repayment of our Direct Corporate Obligations The scheduled repayment of our direct corporate obligations was as follows at March 31, 2020 (dollars in millions):
|
INVESTMENT BORROWINGS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Borrowings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT BORROWINGS | INVESTMENT BORROWINGS Three of the Company's insurance subsidiaries (Bankers Life and Casualty Company ("Bankers Life"), Washington National Insurance Company ("Washington National") and Colonial Penn Life Insurance Company ("Colonial Penn")) are members of the FHLB. As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. At March 31, 2020, the carrying value of the FHLB common stock was $71.0 million. As of March 31, 2020, collateralized borrowings from the FHLB totaled $1.6 billion and the proceeds were used to purchase fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $2.1 billion at March 31, 2020, which are maintained in a custodial account for the benefit of the FHLB. Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet. The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):
The variable rate borrowings are pre-payable on each interest reset date without penalty. The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on prevailing market interest rates. At March 31, 2020, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $5.5 million. Interest expense of $9.1 million and $12.4 million in the first three months of 2020 and 2019, respectively, was recognized related to total borrowings from the FHLB.
|
CHANGES IN COMMON STOCK |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Equity [Abstract] | |
CHANGES IN COMMON STOCK | CHANGES IN COMMON STOCK In the first three months of 2020, we repurchased 5.1 million shares of common stock for $83.0 million under our securities repurchase program. The Company had remaining repurchase authority of $449.3 million as of March 31, 2020. In light of the current uncertainty related to the COVID-19 pandemic, we suspended share repurchases beginning in mid-March 2020. |
SALES INDUCEMENTS |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Insurance [Abstract] | |
SALES INDUCEMENTS | SALES INDUCEMENTS Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract. Certain of our life insurance products offer persistency bonuses credited to the contract holder's balance after the policy has been outstanding for a specified period of time. These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP. Such amounts are deferred and amortized in the same manner as deferred acquisition costs. Sales inducements deferred totaled $3.3 million and $7.1 million during the three months ended March 31, 2020 and 2019, respectively. Amounts amortized totaled $(.3) million and $1.5 million during the three months ended March 31, 2020 and 2019, respectively. The unamortized balance of deferred sales inducements was $64.3 million and $60.7 million at March 31, 2020 and December 31, 2019, respectively.
|
RECENTLY ISSUED ACCOUNTING STANDARDS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS Pending Accounting Standards In August 2018, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance that makes targeted improvements to the accounting for long-duration contracts. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account liabilities, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions will be required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs are required to be adopted on a modified retrospective transition approach, with an option to elect a full retrospective transition if certain criteria are met. The transition approach for deferred acquisition costs is required to be consistent with the transition applied to the liability for future policyholder benefits. Under the modified retrospective approach, for contracts in-force at the transition date, an entity would continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield would be used at transition through accumulated other comprehensive income and subsequently through other comprehensive income. For market risk benefits, retrospective application is required, with the ability to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. In October 2019, the FASB approved a delay for the effective date of the adoption of this guidance by one year (until January 1, 2022). The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows. Adopted Accounting Standards In February 2016, the FASB issued authoritative guidance related to accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of future lease payments, and a corresponding asset, adjusted for certain items, is also recorded. Expense recognition for lessees will remain similar to current accounting requirements for capital and operating leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance was effective for the Company on January 1, 2019. Based on lease contracts in effect at January 1, 2019, the impact of implementation of the new leasing guidance was the recognition of a "right to use" asset (included in other assets) and a "lease liability" (included in other liabilities) of $72 million and there was no cumulative effect adjustment to retained earnings as of January 1, 2019. The Company elected to apply practical expedients related to the adoption of the new guidance including: not reassessing whether a contract includes an embedded lease at adoption; not reassessing the previously determined classification of a lease as operating or capital; not reassessing our previously recorded initial direct costs; election of an accounting policy that permits inclusion of both the lease and non-lease components as a single component and account for it as a lease; and election of an accounting policy to exclude lease accounting requirements for leases that have terms of less than twelve months. Refer to the note to the consolidated financial statements entitled "Leases" for additional disclosures. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The guidance requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses on available for sale debt securities are measured in a manner similar to current GAAP. However, the guidance requires that credit losses be presented as an allowance rather than as a writedown. The guidance was effective for the Company on January 1, 2020. The impact of adoption, using the modified retrospective approach, was as follows (dollars in millions):
In March 2017, the FASB issued authoritative guidance related to the premium amortization on purchased callable debt securities. The guidance shortens the amortization period for certain callable debt securities held at a premium. Specifically, the new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance was effective for the Company on January 1, 2019. The guidance was applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of January 1, 2019. The impact of adoption was as follows (dollars in millions):
In January 2017, the FASB issued authoritative guidance that removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reported unit's fair value. Upon adoption, the guidance is to be applied prospectively. The guidance was effective for the Company on January 1, 2020. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. In August 2017, the FASB issued authoritative guidance related to derivatives and hedging. The new guidance expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instruments and the hedged item in the financial statements. The new guidance also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance was effective for the Company on January 1, 2019. Based on the Company's current use of derivatives and hedging activities, the adoption of this guidance had no impact on the Company's consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued authoritative guidance related to changes to the disclosure requirements for fair value measurement. The new guidance removes, modifies and adds certain disclosure requirements. The guidance was effective for the Company on January 1, 2020. The adoption of such guidance impacted certain fair value disclosures, but did not impact our consolidated financial position, results of operations or cash flows.
|
LITIGATION AND OTHER LEGAL PROCEEDINGS |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND OTHER LEGAL PROCEEDINGS | LITIGATION AND OTHER LEGAL PROCEEDINGS Legal Proceedings The Company and its subsidiaries are involved in various legal actions in the normal course of business, in which claims for compensatory and punitive damages are asserted, some for substantial amounts. We recognize an estimated loss from these loss contingencies when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Some of the pending matters have been filed as purported class actions and some actions have been filed in certain jurisdictions that permit punitive damage awards that are disproportionate to the actual damages incurred. The amounts sought in certain of these actions are often large or indeterminate and the ultimate outcome of certain actions is difficult to predict. In the event of an adverse outcome in one or more of these matters, there is a possibility that the ultimate liability may be in excess of the liabilities we have established and could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, the resolution of pending or future litigation may involve modifications to the terms of outstanding insurance policies or could impact the timing and amount of rate increases, which could adversely affect the future profitability of the related insurance policies. Based upon information presently available, and in light of legal, factual and other defenses available to the Company and its subsidiaries, the Company does not believe that it is probable that the ultimate liability from either pending or threatened legal actions, after consideration of existing loss provisions, will have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. However, given the inherent difficulty in predicting the outcome of legal proceedings, there exists the possibility that such legal actions could have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. In addition to the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, some matters purport to seek substantial or an unspecified amount of damages for unsubstantiated conduct spanning several years based on complex legal theories and damages models. The alleged damages typically are indeterminate or not factually supported in the complaint, and, in any event, the Company's experience indicates that monetary demands for damages often bear little relation to the ultimate loss. In some cases, plaintiffs are seeking to certify classes in the litigation and class certification either has been denied or is pending and we have filed oppositions to class certification or sought to decertify a prior class certification. In addition, for many of these cases: (i) there is uncertainty as to the outcome of pending appeals or motions; (ii) there are significant factual issues to be resolved; and/or (iii) there are novel legal issues presented. Accordingly, the Company cannot reasonably estimate the possible loss or range of loss in excess of amounts accrued, if any, or predict the timing of the eventual resolution of these matters. The Company reviews these matters on an ongoing basis. When assessing reasonably possible and probable outcomes, the Company bases its assessment on the expected ultimate outcome following all appeals. On December 19, 2018, Melanie Cyganowski, as Equity Receiver for Platinum Partners Credit Opportunities Master Fund, LP ("PPCO") and other Platinum entities (the "PPCO Receiver") brought an action in the United States District Court for the Southern District of New York, Cyganowski v. Beechwood Re Ltd, et al., alleging, among other claims, fraud, aiding and abetting fraud, fraudulent transfer and violation of the Racketeer Influenced and Corrupt Organizations Act against numerous defendants, including Beechwood Re Ltd. ("BRe") and many of its affiliates, CNO Financial Group, Inc., Bankers Conseco Life Insurance Company ("BCLIC"), Washington National and 40|86 Advisors, Inc. The PPCO Receiver alleges that Platinum insiders conspired with BRe and its principals and affiliates in a massive fraudulent scheme to enrich the Platinum and BRe insiders to the detriment of Platinum investors and creditors. The PPCO Receiver alleges that CNO Financial Group, Inc., BCLIC, Washington National and 40|86 Advisors, Inc. have liability for the fraudulent scheme of the Platinum and BRe insiders under a theory that they turned a blind eye to the fraudulent scheme due to their desire to transfer unprofitable legacy portfolios of long-term care insurance via the reinsurance transactions with BRe. On January 24, 2019, the court consolidated the PPCO Receiver action with two other cases (to which the CNO companies are not parties) before it for at least discovery purposes. On August 19, 2019, the court granted in their entirety CNO Financial Group, Inc.’s and 40|86 Advisors, Inc.’s motions to dismiss the PPCO Receiver’s claims against them. The court granted in part and denied in part the motions to dismiss of BCLIC and Washington National, dismissing the PPCO Receiver’s claims for, among other things, fraud, aiding and abetting fraud, securities fraud and violation of the Racketeer Influenced and Corrupt Organizations Act, while denying BCLIC’s and Washington National’s motions to dismiss the PPCO Receiver’s fraudulent transfer and unjust enrichment claims. BCLIC and Washington National have agreed with the PPCO Receiver to fully settle the Cyganowski case and are preparing a settlement agreement for approval by the court. Under the settlement, neither BCLIC nor Washington National will incur any liability or make any payment to anyone, but instead they will be granted an allowed claim against PPCO’s estate. On April 9, 2019, BCLIC and Washington National commenced an action entitled Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Wilmington Trust, National Association, in the Supreme Court of the State of New York, County of New York, Commercial Division (the "Wilmington Action"). In the Wilmington Action, BCLIC and Washington National assert claims against Wilmington Trust, National Association ("Wilmington") for breaching its express contractual obligations under four trust agreements pursuant to which Wilmington was the trustee in regard to trust assets ceded as part of reinsurance agreements with BRe, as well as for breaching its fiduciary duties to BCLIC and Washington National. The Court granted Wilmington’s motion to dismiss this litigation. BCLIC and Washington National are appealing the Court’s decision. On June 7, 2019, the Joint Official Liquidators of Platinum Partners Value Arbitrage Fund L.P. (in Official Liquidation) and Principal Growth Strategies, LLC, commenced suit against, among others, BCLIC, Washington National, 40|86 Advisors, Inc. and CNO Financial Group, Inc. (collectively, the "CNO Parties") in Delaware Chancery Court. Plaintiffs allege that the CNO Parties were unjustly enriched when they terminated BCLIC and Washington National's reinsurance agreements with BRe and recaptured assets from reinsurance trusts, in particular, Agera securities. Plaintiffs contend that the Agera securities were fraudulently transferred to the Reinsurance Trusts by other Platinum-related entities and they are seeking to claw back those Agera securities, or the value of those assets, from the CNO Parties. The CNO Parties are vigorously contesting the plaintiff’s claims. The CNO Parties had removed the case to the United States District Court for the District of Delaware but on April 6, 2020, the District Court granted the plaintiff's motion to remand the case back to the Delaware Chancery Court. On June 28, 2019, BCLIC and Washington National commenced an action entitled Bankers Conseco Life Insurance Company and Washington National Insurance Company v. KPMG LLP, in the Supreme Court of the State of New York, County of New York, Commercial Division (the "KPMG Action"). In the KPMG Action, BCLIC and Washington National assert claims against KPMG LLP ("KPMG") for aiding and abetting fraud, constructive fraud and negligent misrepresentation arising from KPMG's alleged role in the Platinum Partners' scheme to defraud BCLIC and Washington National into reinsuring its long-term care business with BRe. The Court granted KPMG’s motion to dismiss this litigation. BCLIC and Washington National are appealing the Court’s decision. Regulatory Examinations and Fines Insurance companies face significant risks related to regulatory investigations and actions. Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending unsuitable products to customers. We are, in the ordinary course of our business, subject to various examinations, inquiries and information requests from state, federal and other authorities. The ultimate outcome of these regulatory actions (including the costs of complying with information requests and policy reviews) cannot be predicted with certainty. In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of liabilities we have established and we could suffer significant reputational harm as a result of these matters, which could also have a material adverse effect on our business, financial condition, results of operations or cash flows. In August 2011, we were notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company and its subsidiaries. Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File ("SSADMF") to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. We are continuing to provide information to the examiners in response to their requests. A total of 41 states and the District of Columbia participated in this examination. In November 2018, we entered into a Global Resolution Agreement for compliance with laws and regulations concerning the identification, reporting and escheatment of unclaimed contract benefits or abandoned funds. Under the terms of the Global Resolution Agreement, a third-party auditor acting on behalf of the signatory jurisdictions will compare expanded matching criteria to the SSADMF to identify deceased insureds and contract holders where a valid claim has not been made.
|
CONSOLIDATED STATEMENT OF CASH FLOW |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | CONSOLIDATED STATEMENT OF CASH FLOWS The following reconciles net income (loss) to net cash from operating activities (dollars in millions):
Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):
|
LEASES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company rents certain office space for administrative operations under an agreement that expires in 2023. We lease sales offices in various states which are generally short-term in length with remaining lease terms expiring between 2020 and 2027. Many leases include an option to extend or renew the lease term. The exercise of the renewal option is at the Company's discretion. The operating lease liability includes lease payments related to options to extend or renew the lease term only if the Company is reasonably certain of exercising those options. In determining the present value of lease payments, the Company uses its incremental borrowing rate for borrowings secured by collateral commensurate with the terms of the underlying lease. Information related to our right of use assets are as follows (dollars in millions):
|
INVESTMENTS IN VARIABLE INTEREST ENTITIES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS IN VARIABLE INTEREST ENTITIES | INVESTMENTS IN VARIABLE INTEREST ENTITIES We have concluded that we are the primary beneficiary with respect to certain VIEs, which are consolidated in our financial statements. In consolidating the VIEs, we consistently use the financial information most recently distributed to investors in the VIE. All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments. The assets held by the trusts are legally isolated and not available to the Company. The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying loans held by the trusts, not from the assets of the Company. The Company has no financial obligation to the VIEs beyond its investment in each VIE. Certain of our subsidiaries are noteholders of the VIEs. Another subsidiary of the Company is the investment manager for the VIEs. As such, it has the power to direct the most significant activities of the VIEs which materially impacts the economic performance of the VIEs. The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):
The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. At March 31, 2020, such loans had an amortized cost of $1,216.4 million; gross unrealized gains of $.4 million; gross unrealized losses of $141.0 million; allowance for credit losses of $37.7 million; and an estimated fair value of $1,038.1 million. The following table summarizes changes in the allowance for credit losses related to investments held by VIEs for the three months ended March 31, 2020 (dollars in millions):
The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at March 31, 2020, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.
During the first three months of 2020, the VIEs recognized net realized investment losses of $30.1 million which were comprised of: (i) $2.3 million of net losses from the sales of fixed maturities; and (ii) a $27.8 million increase in the allowance for credit losses. Such net realized losses included gross realized losses of $2.3 million from the sale of $18.5 million of investments. During the first three months of 2019, the VIEs recognized net realized investment losses of $8.2 million from the sales of fixed maturities. Such net realized losses included gross realized losses of $8.5 million from the sale of $249.7 million of investments. At March 31, 2020, there were no investments held by the VIEs that were in default. At March 31, 2020, the VIEs held: (i) investments with a fair value of $550.7 million and gross unrealized losses not deemed to have credit losses of $64.2 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $182.0 million and gross unrealized losses not deemed to have credit losses of $31.7 million that had been in an unrealized loss position for twelve months or greater. At December 31, 2019, the VIEs held: (i) investments with a fair value of $153.0 million and gross unrealized losses of $3.1 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $430.1 million and gross unrealized losses of $18.5 million that had been in an unrealized loss position for twelve months or greater. The investments held by the VIEs are evaluated for other-than-temporary declines in fair value in a manner that is consistent with the Company's fixed maturities, available for sale. In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager. These structured securities include asset-backed securities, collateralized loan obligations, commercial mortgage-backed securities, agency residential mortgage-backed securities and non-agency residential mortgage-backed securities. Our maximum exposure to loss on these securities is limited to our cost basis in the investment. We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses. At March 31, 2020, we held investments in various limited partnerships and hedge funds, in which we are not the primary beneficiary, totaling $569.8 million (classified as other invested assets). At March 31, 2020, we had unfunded commitments to these partnerships and hedge funds totaling $94.8 million. Our maximum exposure to loss on these investments is limited to the amount of our investment.
|
FAIR VALUE MEASUREMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price. We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives. We carry our COLI, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs. The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value. Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value. Valuation Hierarchy There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable.
At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value. Our Level 2 assets are valued as follows: •Fixed maturities available for sale, equity securities and trading securities Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. Foreign governments are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances, benchmark yields, credit spreads and issuer rating. Asset-backed securities, agency and non-agency residential mortgage-backed securities, commercial mortgage-backed securities and collateralized loan obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates and issue specific information including, but not limited to, collateral type, seniority and vintage. Equity securities are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads.
Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads.
The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes, time value and volatility factors underlying options, market interest rates and non-performance risk. Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate. The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below. As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. The Company's analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions. In those instances, we may request additional pricing quotes or apply internally developed valuations. However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes. Such inputs typically include: benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data. The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments. For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes. These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs. Approximately 89 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs. The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs. For these securities, we use internally developed valuations. Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market. For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate. The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity. In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity. For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs. The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at March 31, 2020 is as follows (dollars in millions):
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2019 is as follows (dollars in millions):
The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2020 (dollars in millions):
_________
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2019 (dollars in millions):
____________
At March 31, 2020, 95 percent of our Level 3 fixed maturities, available for sale, were investment grade and 77 percent of our Level 3 fixed maturities, available for sale, consisted of corporate securities. Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3. Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument. The amount presented for gains (losses) included in our net income for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date. The amount presented for gains (losses) included in accumulated other comprehensive income (loss) for assets and liabilities still held as of the reporting date primarily represents changes in the fair value of fixed maturities, available for sale, that are held as of the reporting date. The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at March 31, 2020 (dollars in millions):
________________________________
The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2019 (dollars in millions):
________________________________
(f) Embedded derivatives related to fixed index annuity products (classified as policyholder account liabilities) - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on risk free rates (U.S. Treasury rates for similar durations) adjusted for our non-performance risk and risk margins for non-capital market inputs. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.
|
BUSINESS AND BASIS OF PRESENTATION (Policies) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Accounting | When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals. If our future experience differs from these estimates and assumptions, our financial statements would be materially affected.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation | The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | e regularly evaluated all of our investments with unrealized losses for possible impairment. Our assessment of whether unrealized losses were "other than temporary" required significant judgment. Factors considered included: (i) the extent to which fair value was less than the cost basis; (ii) the length of time that the fair value had been less than cost; (iii) whether the unrealized loss was event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment was investment-grade and/or had been downgraded since its purchase; (vi) whether the issuer was current on all payments in accordance with the contractual terms of the investment and was expected to meet all of its obligations under the terms of the investment; (vii) whether we intended to sell the investment or it was more likely than not that circumstances would require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment would be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors. Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio. Significant losses could have a material adverse effect on our consolidated financial statements in future periods. We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as either net investment income (classified as investment income from policyholder and other special-purpose portfolios) or realized investment gains (losses)). |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Restricted shares (including our performance units) are not included in basic earnings per share until vested. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised and restricted stock was vested. The dilution from options and restricted shares is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock and performance units). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Prior to 2020, the Company managed its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which were defined on the basis of product distribution; long-term care in run-off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. In January 2020, we announced a new operating model that changes how we view our operating segments. Instead of the operating business segments described above, we view our operations as four insurance product lines (annuity, health, life and long-term care) and the investment and fee revenue segments. The new structure creates a leaner, more integrated, customer-centric organization that better positions us for long-term success and shareholder value creation. Our new segments are aligned based on their common characteristics, comparability of profit margins and the way management makes operating decisions and assesses the performance of the business. We began reporting under the new segment structure in the first quarter of 2020. Prior period results have been reclassified to conform to the new reporting structure. Our insurance product line segments (including annuity, health, life and long-term care) include marketing, underwriting and administration of the policies our insurance subsidiaries sell. Under our new operating model, the business written in each of the four product categories through all of our insurance subsidiaries is aggregated allowing management and investors to assess the performance of each product category. When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits and interest credited to policyholders; and (ii) amortization, non-deferred commissions and advertising expense. Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average insurance liabilities for the block in each period. Income from insurance products is the sum of the insurance margins of the annuity, health, life and long-term care product lines, less expenses allocated to the insurance lines. It excludes the income from our fee income business, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products help provide a better understanding of the business and a more meaningful analysis of the results of our insurance product lines. Under our new structure, we market our insurance products through the Consumer and Worksite Divisions that reflect the customers served by the Company. The Consumer Division serves individual consumers, engaging with them on the phone, online, face-to-face with agents, or through a combination of sales channels. This structure unifies consumer capabilities into a single division and integrates the strength of our agent sales forces and industry-leading direct-to-consumer business with proven experience in advertising, web/digital and call center support. The Worksite Division focuses on worksite and group sales for businesses, associations, and other membership groups, interacting with customers at their place of employment. By creating a dedicated Worksite Division, we bring a sharper focus to this high-growth business while further capitalizing on the strength of our recent acquisition of Web Benefits Design Corporation ("WBD"). The individual results for the Worksite Division are currently not significant pursuant to accounting standards, but are expected to grow. We plan to analyze the profitability of the insurance products of the Consumer and Worksite Divisions separately when the Worksite Division becomes significant. We also centralized certain functional areas previously housed in the three business segments, including marketing, business unit finance, sales training and support, and agent recruiting, among others. All policy, contract, and certificate terms, conditions, and benefits remain unchanged. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability of this segment is the total net investment income not allocated to the insurance products. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable and investment borrowings; and (iv) certain expenses related to benefit plans that are offset by special-purpose investment income. Investment income not allocated to product lines includes investment income on investments in excess of average insurance liabilities, investments held by our holding companies, the spread we earn from the Federal Home Loan Bank ("FHLB") investment borrowing program and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income from company-owned life insurance ("COLI") and variations in income from alternative investments), net of interest expense on corporate debt. Our fee and other revenue segment includes the earnings generated from sales of third-party insurance products, services provided by WBD (our wholly owned on-line benefit administration firm) and the operations of our broker-dealer and registered investment advisor. Expenses not allocated to product lines include the expenses of our corporate operations, excluding interest expense on debt. We measure segment performance by excluding net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business. Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of net realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business. The net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments. Net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pending Accounting Standards and Adopted Accounting Standards | Pending Accounting Standards In August 2018, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance that makes targeted improvements to the accounting for long-duration contracts. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account liabilities, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions will be required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs are required to be adopted on a modified retrospective transition approach, with an option to elect a full retrospective transition if certain criteria are met. The transition approach for deferred acquisition costs is required to be consistent with the transition applied to the liability for future policyholder benefits. Under the modified retrospective approach, for contracts in-force at the transition date, an entity would continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield would be used at transition through accumulated other comprehensive income and subsequently through other comprehensive income. For market risk benefits, retrospective application is required, with the ability to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. In October 2019, the FASB approved a delay for the effective date of the adoption of this guidance by one year (until January 1, 2022). The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows. Adopted Accounting Standards In February 2016, the FASB issued authoritative guidance related to accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of future lease payments, and a corresponding asset, adjusted for certain items, is also recorded. Expense recognition for lessees will remain similar to current accounting requirements for capital and operating leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance was effective for the Company on January 1, 2019. Based on lease contracts in effect at January 1, 2019, the impact of implementation of the new leasing guidance was the recognition of a "right to use" asset (included in other assets) and a "lease liability" (included in other liabilities) of $72 million and there was no cumulative effect adjustment to retained earnings as of January 1, 2019. The Company elected to apply practical expedients related to the adoption of the new guidance including: not reassessing whether a contract includes an embedded lease at adoption; not reassessing the previously determined classification of a lease as operating or capital; not reassessing our previously recorded initial direct costs; election of an accounting policy that permits inclusion of both the lease and non-lease components as a single component and account for it as a lease; and election of an accounting policy to exclude lease accounting requirements for leases that have terms of less than twelve months. Refer to the note to the consolidated financial statements entitled "Leases" for additional disclosures. In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The guidance requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses on available for sale debt securities are measured in a manner similar to current GAAP. However, the guidance requires that credit losses be presented as an allowance rather than as a writedown. The guidance was effective for the Company on January 1, 2020. The impact of adoption, using the modified retrospective approach, was as follows (dollars in millions):
In March 2017, the FASB issued authoritative guidance related to the premium amortization on purchased callable debt securities. The guidance shortens the amortization period for certain callable debt securities held at a premium. Specifically, the new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance was effective for the Company on January 1, 2019. The guidance was applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of January 1, 2019. The impact of adoption was as follows (dollars in millions):
In January 2017, the FASB issued authoritative guidance that removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reported unit's fair value. Upon adoption, the guidance is to be applied prospectively. The guidance was effective for the Company on January 1, 2020. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. In August 2017, the FASB issued authoritative guidance related to derivatives and hedging. The new guidance expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instruments and the hedged item in the financial statements. The new guidance also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance was effective for the Company on January 1, 2019. Based on the Company's current use of derivatives and hedging activities, the adoption of this guidance had no impact on the Company's consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued authoritative guidance related to changes to the disclosure requirements for fair value measurement. The new guidance removes, modifies and adds certain disclosure requirements. The guidance was effective for the Company on January 1, 2020. The adoption of such guidance impacted certain fair value disclosures, but did not impact our consolidated financial position, results of operations or cash flows. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price. We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives. We carry our COLI, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs. The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value. Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value. Valuation Hierarchy There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable.
At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value. Our Level 2 assets are valued as follows: •Fixed maturities available for sale, equity securities and trading securities Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. Foreign governments are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances, benchmark yields, credit spreads and issuer rating. Asset-backed securities, agency and non-agency residential mortgage-backed securities, commercial mortgage-backed securities and collateralized loan obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates and issue specific information including, but not limited to, collateral type, seniority and vintage. Equity securities are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads.
Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads.
The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes, time value and volatility factors underlying options, market interest rates and non-performance risk. Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate. The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below. As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. The Company's analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions. In those instances, we may request additional pricing quotes or apply internally developed valuations. However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes. Such inputs typically include: benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data. The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments. For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes. These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs. Approximately 89 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs. The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs. For these securities, we use internally developed valuations. Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market. For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate. The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity. In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity. For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs. Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3. Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument. The amount presented for gains (losses) included in our net income for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date.
|
INVESTMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income (loss) | These amounts, included in shareholders' equity as of March 31, 2020 and December 31, 2019, were as follows (dollars in millions):
________ (a) The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date Conseco, Inc., an Indiana corporation, emerged from bankruptcy.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fixed maturities for available for sale securities | At March 31, 2020, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions):
At December 31, 2019, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments classified by contractual maturity date | The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at March 31, 2020, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities (such as asset-backed securities, collateralized loan obligations, commercial mortgage-backed securities, agency residential mortgage-backed securities and non-agency residential mortgage-backed securities, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2019, by contractual maturity.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of unrealized loss on investments | The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at March 31, 2020 (dollars in millions):
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2019 (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in the allowance for current expected credit losses | The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2020 (dollars in millions):
The following table summarizes changes in the allowance for credit losses related to investments held by VIEs for the three months ended March 31, 2020 (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of carrying value and estimated fair value of outstanding commercial mortgage loans and underlying collateral | The following table provides the amortized cost by year of origination and estimated fair value of our outstanding commercial mortgage loans and the underlying collateral as of March 31, 2020 (dollars in millions):
________________ (a) Loan-to-value ratios are calculated as the ratio of: (i) the amortized cost of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in the allowance for current expected credit losses related to mortgage loans | The following table summarizes changes in the allowance for credit losses related to mortgage loans for the three months ended March 31, 2020 (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of realized gain (loss) on investments | The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):
_________________
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of credit losses recognized in earnings on fixed maturity securities, available for sale, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income | The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the three months ended March 31, 2019 (dollars in millions):
__________ (a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis.
|
EARNINGS PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share reconciliation | A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):
|
BUSINESS SEGMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operating information by segment | Operating information by segment is as follows (dollars in millions):
(continued on next page) (continued from previous page)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income | A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income is as follows (dollars in millions):
|
ACCOUNTING FOR DERIVATIVES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value by balance sheet location | Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule pre-tax gains (losses) recognized in net income for derivative instruments | The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives with master netting arrangements | The following table summarizes information related to derivatives with master netting arrangements or collateral as of March 31, 2020 and December 31, 2019 (dollars in millions):
|
INCOME TAXES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of income tax expense (benefit) | The components of income tax expense (benefit) are as follows (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effective income tax rate reconciliation | A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred tax assets and liabilities | The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of operating loss carryforwards | We have $2.2 billion of federal NOLs as of March 31, 2020, as summarized below (dollars in millions):
|
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | The following notes payable were direct corporate obligations of the Company as of March 31, 2020 and December 31, 2019 (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of maturities of long-term debt | The scheduled repayment of our direct corporate obligations was as follows at March 31, 2020 (dollars in millions):
|
INVESTMENT BORROWINGS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Borrowings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of terms of federal home loan bank borrowing | The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):
|
RECENTLY ISSUED ACCOUNTING STANDARDS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of Adoption | The impact of adoption, using the modified retrospective approach, was as follows (dollars in millions):
|
CONSOLIDATED STATEMENT OF CASH FLOW (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the reconciliation for net income (loss) provided by operating activities | The following reconciles net income (loss) to net cash from operating activities (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other significant noncash transactions | Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):
|
LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information related to right to use assets and weighted average information | Information related to our right of use assets are as follows (dollars in millions):
|
INVESTMENTS IN VARIABLE INTEREST ENTITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of impact on balance sheet of consolidating variable interest entities | The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in the allowance for current expected credit losses related to investments held by VIEs | The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2020 (dollars in millions):
The following table summarizes changes in the allowance for credit losses related to investments held by VIEs for the three months ended March 31, 2020 (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of variable interest entities by contractual maturity | The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at March 31, 2020, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.
|
FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial instruments carried at fair value categorized by input level | The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2020 (dollars in millions):
_________
The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2019 (dollars in millions):
____________
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at March 31, 2020 is as follows (dollars in millions):
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2019 is as follows (dollars in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value measurement inputs | The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at March 31, 2020 (dollars in millions):
________________________________
The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2019 (dollars in millions):
________________________________
(f) Embedded derivatives related to fixed index annuity products (classified as policyholder account liabilities) - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on risk free rates (U.S. Treasury rates for similar durations) adjusted for our non-performance risk and risk margins for non-capital market inputs. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.
|
BUSINESS AND BASIS OF PRESENTATION (Details) |
3 Months Ended |
---|---|
Mar. 31, 2020
distribution_channel
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of distribution channels | 3 |
INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ 0.0 | $ 1.1 |
Net unrealized gains on all other fixed maturity securities, available for sale | 0.0 | 2,095.3 |
Net unrealized gains on investments having no allowance for credit losses | 957.4 | 0.0 |
Unrealized losses on investments with an allowance for credit losses | (120.8) | 0.0 |
Adjustment to present value of future profits | (3.9) | (18.9) |
Adjustment to deferred acquisition costs | (71.0) | (227.9) |
Adjustment to insurance liabilities | 0.0 | (96.5) |
Deferred income tax liabilities | (166.5) | (380.6) |
Accumulated other comprehensive income | $ 595.2 | $ 1,372.5 |
INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Jan. 01, 2019 |
---|---|---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | $ 19,420.2 | $ 19,179.5 | ||
Allowance for credit losses | (19.9) | (2.1) | ||
Estimated fair value | 20,379.1 | $ 21,293.1 | 21,295.2 | $ 18,443.7 |
Corporate securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 11,740.8 | 11,403.5 | ||
Gross unrealized gains | 1,207.8 | 1,544.1 | ||
Gross unrealized losses | (313.1) | (12.3) | ||
Allowance for credit losses | (18.2) | (2.1) | ||
Estimated fair value | 12,617.3 | 12,935.3 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
United States Treasury securities and obligations of United States government corporations and agencies | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 150.5 | 161.4 | ||
Gross unrealized gains | 82.1 | 43.3 | ||
Gross unrealized losses | 0.0 | (0.1) | ||
Allowance for credit losses | 0.0 | |||
Estimated fair value | 232.6 | 204.6 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
States and political subdivisions | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 1,970.6 | 2,002.1 | ||
Gross unrealized gains | 254.7 | 246.1 | ||
Gross unrealized losses | (3.3) | (1.5) | ||
Allowance for credit losses | (0.6) | 0.0 | ||
Estimated fair value | 2,221.4 | 2,246.7 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
Foreign governments | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 88.1 | 82.6 | ||
Gross unrealized gains | 6.2 | 13.0 | ||
Gross unrealized losses | (0.7) | 0.0 | ||
Allowance for credit losses | (0.1) | 0.0 | ||
Estimated fair value | 93.5 | 95.6 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
Asset-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 1,272.4 | 1,352.9 | ||
Gross unrealized gains | 14.4 | 36.8 | ||
Gross unrealized losses | (81.1) | (1.8) | ||
Allowance for credit losses | 0.0 | |||
Estimated fair value | 1,205.7 | 1,387.9 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
Agency residential mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 72.7 | 89.2 | ||
Gross unrealized gains | 7.6 | 5.8 | ||
Gross unrealized losses | 0.0 | 0.0 | ||
Allowance for credit losses | 0.0 | |||
Estimated fair value | 80.3 | 95.0 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
Non-agency residential mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 1,854.2 | 1,871.0 | ||
Gross unrealized gains | 48.4 | 172.3 | ||
Gross unrealized losses | (76.5) | (1.0) | ||
Allowance for credit losses | (1.0) | 0.0 | ||
Estimated fair value | 1,825.1 | 2,042.3 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | (0.3) | |||
Commercial mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 1,812.5 | 1,812.7 | ||
Gross unrealized gains | 14.9 | 75.3 | ||
Gross unrealized losses | (123.1) | (1.0) | ||
Allowance for credit losses | 0.0 | |||
Estimated fair value | 1,704.3 | 1,887.0 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
Collateralized loan obligations | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 458.4 | 404.1 | ||
Gross unrealized gains | 0.0 | 0.1 | ||
Gross unrealized losses | (59.5) | (3.4) | ||
Allowance for credit losses | 0.0 | |||
Estimated fair value | 398.9 | 400.8 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | 0.0 | |||
Total fixed maturities, available for sale | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 19,420.2 | 19,179.5 | ||
Gross unrealized gains | 1,636.1 | 2,136.8 | ||
Gross unrealized losses | (657.3) | (21.1) | ||
Allowance for credit losses | (19.9) | |||
Estimated fair value | $ 20,379.1 | 21,295.2 | ||
Other-than-temporary impairments included in accumulated other comprehensive income | $ (0.3) |
INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Jan. 01, 2019 |
---|---|---|---|---|
Amortized cost | ||||
Due in one year or less | $ 305.2 | $ 282.2 | ||
Due after one year through five years | 1,061.5 | 1,082.2 | ||
Due after five years through ten years | 1,371.3 | 1,376.6 | ||
Due after ten years | 11,212.0 | 10,908.6 | ||
Subtotal | 13,950.0 | 13,649.6 | ||
Structured securities | 5,470.2 | 5,529.9 | ||
Amortized cost | 19,420.2 | 19,179.5 | ||
Estimated fair value | ||||
Due in one year or less | 308.8 | 286.0 | ||
Due after one year through five years | 1,065.6 | 1,130.8 | ||
Due after five years through ten years | 1,375.2 | 1,481.7 | ||
Due after ten years | 12,415.2 | 12,583.7 | ||
Subtotal | 15,164.8 | 15,482.2 | ||
Structured securities | 5,214.3 | 5,813.0 | ||
Total fixed maturities, available for sale | $ 20,379.1 | $ 21,293.1 | $ 21,295.2 | $ 18,443.7 |
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair value | ||
Less than 12 months | $ 5,620.7 | $ 1,262.8 |
12 months or greater | 215.0 | 341.2 |
Total | 5,835.7 | 1,604.0 |
Unrealized losses | ||
Less than 12 months | (547.1) | (11.4) |
12 months or greater | (34.4) | (9.7) |
Total | (581.5) | (21.1) |
Corporate securities | ||
Fair value | ||
Less than 12 months | 2,121.2 | 305.5 |
12 months or greater | 15.7 | 96.8 |
Total | 2,136.9 | 402.3 |
Unrealized losses | ||
Less than 12 months | (230.9) | (6.6) |
12 months or greater | (8.8) | (5.7) |
Total | (239.7) | (12.3) |
United States Treasury securities and obligations of United States government corporations and agencies | ||
Fair value | ||
Less than 12 months | 7.0 | |
12 months or greater | 3.5 | |
Total | 10.5 | |
Unrealized losses | ||
Less than 12 months | (0.1) | |
12 months or greater | 0.0 | |
Total | (0.1) | |
States and political subdivisions | ||
Fair value | ||
Less than 12 months | 36.8 | 110.1 |
12 months or greater | 0.0 | 0.0 |
Total | 36.8 | 110.1 |
Unrealized losses | ||
Less than 12 months | (1.2) | (1.5) |
12 months or greater | 0.0 | 0.0 |
Total | (1.2) | (1.5) |
Foreign governments | ||
Fair value | ||
Less than 12 months | 9.8 | 3.4 |
12 months or greater | 0.0 | 0.0 |
Total | 9.8 | 3.4 |
Unrealized losses | ||
Less than 12 months | (0.3) | 0.0 |
12 months or greater | 0.0 | 0.0 |
Total | (0.3) | 0.0 |
Asset-backed securities | ||
Fair value | ||
Less than 12 months | 903.2 | 75.7 |
12 months or greater | 44.7 | 45.5 |
Total | 947.9 | 121.2 |
Unrealized losses | ||
Less than 12 months | (78.1) | (0.4) |
12 months or greater | (3.0) | (1.4) |
Total | (81.1) | (1.8) |
Agency residential mortgage-backed securities | ||
Fair value | ||
Less than 12 months | 8.8 | |
12 months or greater | 0.0 | |
Total | 8.8 | |
Unrealized losses | ||
Less than 12 months | 0.0 | |
12 months or greater | 0.0 | |
Total | 0.0 | |
Non-agency residential mortgage-backed securities | ||
Fair value | ||
Less than 12 months | 1,019.4 | 137.4 |
12 months or greater | 36.4 | 67.2 |
Total | 1,055.8 | 204.6 |
Unrealized losses | ||
Less than 12 months | (71.8) | (0.7) |
12 months or greater | (4.7) | (0.3) |
Total | (76.5) | (1.0) |
Collateralized loan obligations | ||
Fair value | ||
Less than 12 months | 273.8 | 220.7 |
12 months or greater | 116.4 | 115.4 |
Total | 390.2 | 336.1 |
Unrealized losses | ||
Less than 12 months | (41.8) | (1.1) |
12 months or greater | (17.7) | (2.3) |
Total | (59.5) | (3.4) |
Commercial mortgage-backed securities | ||
Fair value | ||
Less than 12 months | 1,256.5 | 394.2 |
12 months or greater | 1.8 | 12.8 |
Total | 1,258.3 | 407.0 |
Unrealized losses | ||
Less than 12 months | (123.0) | (1.0) |
12 months or greater | (0.2) | 0.0 |
Total | $ (123.2) | $ (1.0) |
INVESTMENTS - SUMMARY OF CHANGES IN THE ALLOWANCE FOR CURRENT EXPECTED CREDIT LOSSES (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |
Allowance at January 1, 2020 | $ 2.1 |
Additions for securities for which credit losses were not previously recorded | 19.2 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | (1.1) |
Reduction for securities sold during the period | (0.3) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | 19.9 |
Corporate securities | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |
Allowance at January 1, 2020 | 2.1 |
Additions for securities for which credit losses were not previously recorded | 17.5 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | (1.1) |
Reduction for securities sold during the period | (0.3) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | 18.2 |
States and political subdivisions | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |
Allowance at January 1, 2020 | 0.0 |
Additions for securities for which credit losses were not previously recorded | 0.6 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.0 |
Reduction for securities sold during the period | 0.0 |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | 0.6 |
Foreign governments | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |
Allowance at January 1, 2020 | 0.0 |
Additions for securities for which credit losses were not previously recorded | 0.1 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.0 |
Reduction for securities sold during the period | 0.0 |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | 0.1 |
Non-agency residential mortgage-backed securities | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |
Allowance at January 1, 2020 | 0.0 |
Additions for securities for which credit losses were not previously recorded | 1.0 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.0 |
Reduction for securities sold during the period | 0.0 |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | $ 1.0 |
INVESTMENTS - NARRATIVE (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|||
Debt Securities, Available-for-sale [Line Items] | ||||
Mortgage loan in process of foreclosure | $ 5.9 | |||
Net realized investment gains (losses) | (115.5) | $ 16.1 | ||
Increase (decrease) in fair value of embedded derivative | (83.8) | (37.4) | ||
Change in allowance for current expected credit losses | [1] | 55.4 | 2.2 | |
Total other-than-temporary impairment losses | 2.2 | |||
Value of available for sale securities sold | 174.3 | 747.4 | ||
Embedded Derivative Related to Fixed Maturity Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Increase (decrease) in fair value of embedded derivative | (26.7) | 3.6 | ||
Reinsurance Contract | Coinsurance | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Increase (decrease) in fair value of embedded derivative | (6.0) | 2.3 | ||
Marketable securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Net realized investment gains (losses) | (11.7) | 1.7 | ||
Equity securities - corporate securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Net realized investment gains (losses) | (15.7) | 10.7 | ||
Total fixed maturities, available for sale | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Net realized investment gains (losses) | (35.4) | 7.2 | ||
Gross realized losses on sale | 21.4 | 51.5 | ||
Corporate securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross realized losses on sale | 6.9 | 44.6 | ||
Commercial mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross realized losses on sale | 11.7 | |||
Various other investments | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross realized losses on sale | 2.8 | $ 6.9 | ||
Commercial Portfolio Segment | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated fair value | 1,495.3 | |||
Residential mortgage loan | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Residential mortgage loans that were noncurrent | 0.5 | |||
Carrying value | Residential mortgage loan | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated fair value | 102.9 | |||
Fair value | Residential mortgage loan | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated fair value | $ 103.0 | |||
|
INVESTMENTS - SUMMARY OF CARRYING VALUE AND ESTIMATED FAIR VALUE OF OUTSTANDING COMMERCIAL MORTGAGE LOANS AND UNDERLYING COLLATERAL (Details) - Commercial Portfolio Segment $ in Millions |
Mar. 31, 2020
USD ($)
|
---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | $ 33.8 |
2019 | 135.6 |
2018 | 157.3 |
2017 | 107.5 |
2016 | 114.1 |
Prior | 841.2 |
Total amortized cost | 1,389.5 |
Estimated fair value | 1,495.3 |
Collateral | 3,408.1 |
Less than 60% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 14.6 |
2019 | 111.6 |
2018 | 113.8 |
2017 | 107.5 |
2016 | 63.3 |
Prior | 637.9 |
Total amortized cost | 1,048.7 |
Estimated fair value | 1,134.3 |
Collateral | 2,906.8 |
60% to less than 70% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 19.2 |
2019 | 24.0 |
2018 | 43.5 |
2017 | 0.0 |
2016 | 40.8 |
Prior | 103.8 |
Total amortized cost | 231.3 |
Estimated fair value | 246.4 |
Collateral | 361.6 |
70% to less than 80% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0.0 |
2019 | 0.0 |
2018 | 0.0 |
2017 | 0.0 |
2016 | 0.0 |
Prior | 73.3 |
Total amortized cost | 73.3 |
Estimated fair value | 77.0 |
Collateral | 97.9 |
80% to less than 90% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0.0 |
2019 | 0.0 |
2018 | 0.0 |
2017 | 0.0 |
2016 | 10.0 |
Prior | 26.2 |
Total amortized cost | 36.2 |
Estimated fair value | 37.6 |
Collateral | $ 41.8 |
INVESTMENTS - SUMMARY OF CHANGES IN THE ALLOWANCE FOR CURRENT EXPECTED CREDIT LOSSES RELATED TO MORTGAGE LOANS (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Mortgage loans | |
Allowance for credit losses at January 1, 2020 | $ 6.7 |
Current period provision for expected credit losses | 1.6 |
Initial allowance recognized for purchased financial assets with credit deterioration | 0.0 |
Write-offs charged against the allowance | 0.0 |
Recoveries of amounts previously written off | 0.0 |
Allowance for credit losses at March 31, 2020 | $ 8.3 |
INVESTMENTS - NET REALIZED INVESTMENT GAINS (LOSSES) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Gain (Loss) on Securities [Line Items] | ||
Total realized gains (losses) | $ (115.5) | $ 16.1 |
Decrease in estimated fair value of equity securities | (15.7) | |
Change in allowance for credit losses of other investments (b) | (29.5) | 0.0 |
Variable interest entities, change in allowance for current expected credit losses | 27.8 | |
Decrease in estimated fair value of trading securities | (26.8) | |
Total fixed maturities, available for sale | ||
Gain (Loss) on Securities [Line Items] | ||
Gross realized gains on sale | 11.9 | 60.9 |
Gross realized losses on sale | (21.4) | (51.5) |
Change in allowance for credit losses and other-than-temporary impairment losses | (25.9) | (2.2) |
Total realized gains (losses) | (35.4) | 7.2 |
Equity securities - corporate securities | ||
Gain (Loss) on Securities [Line Items] | ||
Total realized gains (losses) | (15.7) | 10.7 |
Other | ||
Gain (Loss) on Securities [Line Items] | ||
Total realized gains (losses) | $ (34.9) | $ (1.8) |
INVESTMENTS - SUMMARY OF CREDIT LOSSES RECOGNIZED IN EARNINGS ON FIXED MATURITY SECURITIES, AVAILABLE FOR SALE, FOR WHICH A PORTION OF THE OTHER-THAN-TEMPORARY IMPAIRMENT WAS ALSO RECOGNIZED IN OTHER COMPREHENSIVE INCOME (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |
Credit losses on fixed maturity securities, available for sale, beginning of period | $ (0.2) |
Add: credit losses on other-than-temporary impairments not previously recognized | 0.0 |
Less: credit losses on securities sold | 0.0 |
Less: credit losses on securities impaired due to intent to sell | 0.0 |
Add: credit losses on previously impaired securities | 0.0 |
Less: increases in cash flows expected on previously impaired securities | 0.0 |
Credit losses on fixed maturity securities, available for sale, end of period | $ (0.2) |
EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Earnings Per Share [Abstract] | ||
Net income (loss) for basic and diluted earnings per share | $ (21.2) | $ 51.8 |
Shares: | ||
Weighted average shares outstanding for basic earnings per share (in shares) | 145,829 | 160,948 |
Effect of dilutive securities on weighted average shares: | ||
Amounts related to employee benefit plans (in shares) | 0 | 1,241 |
Weighted average shares outstanding for diluted earnings per share (in shares) | 145,829 | 162,189 |
Equivalent common shares not included in diluted weighted average shares outstanding | 768 |
BUSINESS SEGMENTS (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020
USD ($)
|
Mar. 31, 2019
USD ($)
segment
|
|
Segment Reporting [Abstract] | ||
Number of business segments | segment | 3 | |
Revenues: | ||
Insurance policy income | $ 628.7 | $ 619.3 |
Fee revenue and other income | 34.4 | 31.8 |
Total segment revenues | 817.3 | 984.0 |
Expenses: | ||
Insurance policy benefits | 490.8 | 623.5 |
Interest expense | 33.4 | 41.0 |
Other expenses | 213.8 | 234.7 |
Total segment expenses | 711.8 | 900.6 |
Operating earnings before taxes | 105.5 | 83.4 |
Income tax expense on operating income | 21.2 | 17.6 |
Net operating income | 84.3 | 65.8 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||
Total segment revenues | 817.3 | 984.0 |
Net realized investment gains | (115.5) | 16.1 |
Revenues related to VIEs | 10.7 | 17.9 |
Fee revenue related to transition services agreement | 4.7 | 5.0 |
Total revenues | 717.2 | 1,023.0 |
Total segment expenses | 711.8 | 900.6 |
Insurance policy benefits - fair value changes in embedded derivative liabilities | 83.8 | 37.4 |
Amortization related to fair value changes in embedded derivative liabilities | (17.1) | (7.8) |
Amortization related to net realized investment gains | (3.4) | 0.2 |
Expenses related to VIEs | 11.0 | 16.9 |
Fair value changes related to agent deferred compensation plan | 0.0 | 5.3 |
Expenses related to transition services agreement | 2.1 | 4.8 |
Total benefits and expenses | 788.2 | 957.4 |
Income (loss) before income taxes | (71.0) | 65.6 |
Income tax expense (benefit): | ||
Tax expense (benefit) on period income | (15.8) | 13.8 |
Valuation allowance for deferred tax assets and other tax items | (34.0) | 0.0 |
Net income (loss) | (21.2) | 51.8 |
Insurance product lines | ||
Expenses: | ||
Allocated expenses | 136.6 | 135.9 |
Total insurance product margin | 190.7 | 189.7 |
Operating earnings before taxes | 54.1 | 53.8 |
Insurance product lines | Annuities | ||
Revenues: | ||
Insurance policy income | 5.6 | 6.6 |
Net investment income | 117.4 | 115.8 |
Total insurance product line revenue | 123.0 | 122.4 |
Expenses: | ||
Insurance policy benefits | 5.5 | 7.9 |
Interest credited | 42.0 | 43.2 |
Amortization and non-deferred commissions | 16.0 | 15.1 |
Total expenses | 63.5 | 66.2 |
Total insurance product margin | 59.5 | 56.2 |
Insurance product lines | Health | ||
Revenues: | ||
Insurance policy income | 362.1 | 358.2 |
Net investment income | 36.1 | 36.2 |
Total insurance product line revenue | 398.2 | 394.4 |
Expenses: | ||
Insurance policy benefits | 269.6 | 264.9 |
Amortization and non-deferred commissions | 55.0 | 50.6 |
Total expenses | 324.6 | 315.5 |
Total insurance product margin | 73.6 | 78.9 |
Insurance product lines | Life | ||
Revenues: | ||
Insurance policy income | 194.1 | 187.2 |
Net investment income | 34.3 | 34.5 |
Total insurance product line revenue | 228.4 | 221.7 |
Expenses: | ||
Insurance policy benefits | 131.9 | 130.8 |
Interest credited | 10.3 | 10.2 |
Amortization and non-deferred commissions | 41.9 | 37.6 |
Total expenses | 184.1 | 178.6 |
Total insurance product margin | 44.3 | 43.1 |
Insurance product lines | Long-term care | ||
Revenues: | ||
Insurance policy income | 66.9 | 67.3 |
Net investment income | 34.3 | 33.3 |
Total insurance product line revenue | 101.2 | 100.6 |
Expenses: | ||
Insurance policy benefits | 84.2 | 85.5 |
Amortization and non-deferred commissions | 3.7 | 3.6 |
Total expenses | 87.9 | 89.1 |
Total insurance product margin | 13.3 | 11.5 |
Insurance product lines | Allocated expenses | ||
Expenses: | ||
Total insurance product margin | (136.6) | (135.9) |
Investment income not allocated to product lines | ||
Revenues: | ||
Related to fixed index products | (136.5) | 43.6 |
Other investment income | 72.4 | 73.2 |
Expenses: | ||
Market value changes credited to policyholders | (136.5) | 43.6 |
Interest expense | 22.7 | 24.5 |
Other expenses | (7.7) | 5.4 |
Total insurance product margin | 57.4 | 43.3 |
Fee income | ||
Revenues: | ||
Fee revenue and other income | 28.8 | 25.8 |
Expenses: | ||
Distribution and commission expenses | 21.0 | 21.4 |
Total insurance product margin | 7.8 | 4.4 |
Expenses not allocated to product lines | ||
Revenues: | ||
Fee revenue and other income | 1.8 | 2.3 |
Expenses: | ||
Expenses not allocated to product lines | 15.6 | 20.4 |
Total insurance product margin | $ (13.8) | $ (18.1) |
ACCOUNTING FOR DERIVATIVES - FAIR VALUE BY BALANCE SHEET LOCATION (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fixed index call options | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 47.6 | $ 203.8 |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 40.4 | 202.6 |
Liabilities | 1,548.5 | 1,565.4 |
Not Designated as Hedging Instrument | Fixed index call options | Other invested assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 47.6 | 203.8 |
Not Designated as Hedging Instrument | Reinsurance receivables | Other invested assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | (7.2) | (1.2) |
Not Designated as Hedging Instrument | Fixed index products | Future policy benefits | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ 1,548.5 | $ 1,565.4 |
ACCOUNTING FOR DERIVATIVES - NARRATIVE (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Embedded derivative | $ 115 | |
Fixed index call options | ||
Derivative [Line Items] | ||
Notional amount | $ 3,200 | $ 3,200 |
ACCOUNTING FOR DERIVATIVES - SCHEDULE PRE-TAX GAINS (LOSSES) RECOGNIZED IN NET INCOME FOR DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | $ (219.4) | $ 10.0 |
Net investment income (loss) from policyholder and other special-purpose portfolios | Fixed index call options | ||
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | (136.7) | 42.7 |
Net realized gains (losses) | Embedded derivative | Coinsurance agreements | ||
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | (6.0) | 2.3 |
Insurance policy benefits | Embedded derivative | Fixed index annuities | ||
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | $ (76.7) | $ (35.0) |
ACCOUNTING FOR DERIVATIVES - DERIVATIVES WITH MASTER NETTING ARRANGEMENTS (Details) - Fixed index call options - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Gross amounts recognized | $ 47.6 | $ 203.8 |
Gross amounts offset in the balance sheet | 0.0 | 0.0 |
Net amounts of assets presented in the balance sheet | 47.6 | 203.8 |
Financial instruments | 0.0 | 0.0 |
Cash collateral received | 0.0 | 0.0 |
Net amount | $ 47.6 | $ 203.8 |
REINSURANCE (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Insurance [Abstract] | ||
Ceded premiums written | $ 84.0 | $ 67.9 |
Ceded insurance policy benefits | 106.0 | 108.7 |
Assumed premiums written | 6.0 | 6.5 |
Insurance policy benefits related to reinsurance | $ 8.4 | $ 8.9 |
INCOME TAXES - COMPONENTS OF TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Current tax expense (benefit) | $ (63.6) | $ 5.2 |
Deferred tax expense | 47.8 | 8.6 |
Income tax expense (benefit) calculated based on estimated annual effective tax rate | (15.8) | 13.8 |
Carryback of net operating losses to years with a higher statutory corporate rate pursuant to provisions of the CARES Act (as defined below) | (34.0) | 0.0 |
Total income tax expense (benefit) | $ (49.8) | $ 13.8 |
INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
U.S. statutory corporate rate | 21.00% | 21.00% |
Non-taxable income and nondeductible benefits, net | 2.70% | (0.90%) |
State taxes | (1.40%) | 0.90% |
Estimated annual effective tax rate calculated before discrete items | 22.30% | 21.00% |
Carryback of net operating losses to years with a higher statutory corporate rate pursuant to provisions of the CARES Act (as defined below) | 47.80% | 0.00% |
Effective tax rate | 70.10% | 21.00% |
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
|
Operating Loss Carryforwards [Line Items] | |||
Tax benefit resulting from the difference in tax rates | $ 34.0 | $ 0.0 | |
Deferred tax valuation analysis, growth rate for the next five years | 3.50% | ||
Deferred tax assets more likely than not to be realized through future taxable earnings | $ 599.9 | $ 428.9 | |
Release of remaining valuation allowance | 193.7 | ||
Loss limitation based on income of life insurance company, percent | 35.00% | ||
Loss limitation based on loss of non-life entities, percent | 35.00% | ||
Federal long-term tax exempt rate | 1.63% | ||
Net operating loss carryforwards | $ 2,191.7 | ||
Net state operating loss carryforwards | 9.1 | $ 10.3 | |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 2,200.0 | ||
Tax Year 2018 And Beyond | |||
Operating Loss Carryforwards [Line Items] | |||
Acceleration of the utilization of life NOLs | 375.0 | ||
Restoration of non-life NOLs | 130.0 | ||
Tax Years Before 2021 | |||
Operating Loss Carryforwards [Line Items] | |||
Acceleration of the utilization of life NOLs | 105.0 | ||
Restoration of non-life NOLs | $ 35.0 |
INCOME TAXES - DEFERRED ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Jan. 01, 2019 |
---|---|---|---|---|
Deferred tax assets: | ||||
Net federal operating loss carryforwards | $ 460.3 | $ 532.3 | ||
Net state operating loss carryforwards | 9.1 | 10.3 | ||
Insurance liabilities | 346.0 | 351.3 | ||
Indirect costs allocable to self-constructed real estate assets | 51.6 | 50.3 | ||
Other | 55.3 | 40.4 | ||
Gross deferred tax assets | 922.3 | 984.6 | ||
Deferred tax liabilities: | ||||
Investments | (7.4) | (24.4) | ||
Present value of future profits and deferred acquisition costs | (149.1) | (150.1) | ||
Accumulated other comprehensive income | (165.9) | (381.2) | ||
Gross deferred tax liabilities | (322.4) | (555.7) | ||
Net deferred tax assets | 599.9 | 428.9 | ||
Current income taxes prepaid | 103.3 | 3.7 | ||
Income tax assets, net | $ 703.2 | $ 437.5 | $ 432.6 | $ 630.9 |
INCOME TAXES - NET OPERATING LOSSES (Details) $ in Millions |
Mar. 31, 2020
USD ($)
|
---|---|
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 2,191.7 |
Non-life net operating loss carryforwards | 2,145.5 |
2023 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 1,558.9 |
2025 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 85.2 |
2026 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 149.9 |
2027 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 10.8 |
2028 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 80.3 |
2029 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 213.2 |
2030 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.3 |
2031 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.2 |
2032 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 44.4 |
2033 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.6 |
2034 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.9 |
2035 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.8 |
Post 2017 life NOLs with no expiration | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 46.2 |
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Notes payable – direct corporate obligations | $ 989.4 | $ 989.1 |
Unamortized debt issue costs | $ (10.6) | (10.9) |
Senior Notes | 5.250% Senior Notes due May 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.25% | |
Notes payable – direct corporate obligations | $ 500.0 | 500.0 |
Senior Notes | 5.250% Senior Notes due May 2029 | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.25% | |
Notes payable – direct corporate obligations | $ 500.0 | $ 500.0 |
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - NARRATIVE (Details) - USD ($) |
Oct. 13, 2017 |
May 19, 2015 |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Outstanding amount | $ 989,400,000 | $ 989,100,000 | ||
Line of credit | Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Line of credit maximum borrowing capacity | $ 250,000,000.0 | $ 150,000,000.0 | ||
Debt instrument, term | 4 years | |||
Initial drawing amount | $ 100,000,000.0 | |||
Remaining borrowing capacity | $ 100,000,000.0 | $ 50,000,000.0 | ||
Outstanding amount | $ 0 | |||
Debt covenant, required minimum debt to total capitalization ratio | 35.00% | |||
Debt covenant, actual debt to total capitalization ratio at period end | 24.30% | |||
Debt covenant, minimum required aggregate total adjusted capital to company action level risk-based capital ratio | 250.00% | |||
Debt covenant, actual aggregate total adjusted capital to company action level risk-based capital ratio at period end | 406.00% | |||
Debt covenant, minimum required consolidated net worth, component one, amount | $ 2,674,000,000 | |||
Debt covenant, minimum required consolidated net worth, component two, as a percent of net equity proceeds received from issuance and sale of equity interests | 50.00% | |||
Debt covenant, actual consolidated net worth at period end | $ 3,170,600,000 | |||
Debt covenant, required minimum consolidated net worth, amount | $ 2,693,000,000.0 | |||
Line of credit | Revolving Credit Agreement | Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Line of credit | Revolving Credit Agreement | Eurodollar | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.375% | |||
Line of credit | Revolving Credit Agreement | Eurodollar | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.125% | |||
Line of credit | Revolving Credit Agreement | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.375% | |||
Line of credit | Revolving Credit Agreement | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.125% |
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULED REPAYMENT (Details) $ in Millions |
Mar. 31, 2020
USD ($)
|
---|---|
Year ending March 31, | |
2021 | $ 0.0 |
2022 | 0.0 |
2023 | 0.0 |
2024 | 0.0 |
2025 | 0.0 |
Thereafter | 1,000.0 |
Total | $ 1,000.0 |
INVESTMENT BORROWINGS - NARRATIVE (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020
USD ($)
subsidiary
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Debt Instrument [Line Items] | |||
Number of insurance subsidiaries that are members of the FHLB | subsidiary | 3 | ||
Investment borrowings | $ 1,643.9 | $ 1,644.3 | |
Federal Home Loan Bank advances | |||
Debt Instrument [Line Items] | |||
Federal home loan bank stock | 71.0 | ||
Investment borrowings | 1,643.9 | ||
Federal home loan bank, advances, collateral pledged | 2,100.0 | ||
Aggregate fee to prepay all fixed rate FHLB borrowings | 5.5 | ||
Interest expense on FHLB borrowings | $ 9.1 | $ 12.4 |
INVESTMENT BORROWINGS - TERMS OF THE BORROWINGS FROM THE FHLB (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 1,643.9 | $ 1,644.3 |
Federal Home Loan Bank advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | 1,643.9 | |
Federal Home Loan Bank advances | Borrowings due June 2020 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 21.7 | |
Interest rate | 1.96% | |
Federal Home Loan Bank advances | Borrowings due July 2021 at 2.388% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100.0 | |
Interest rate | 2.388% | |
Federal Home Loan Bank advances | Borrowings due July 2021 at 2.351% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100.0 | |
Interest rate | 2.351% | |
Federal Home Loan Bank advances | Borrowings due August 2021 at 2.550% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 27.9 | |
Interest rate | 2.55% | |
Federal Home Loan Bank advances | Borrowings due August 2021 at 2.271% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 57.7 | |
Interest rate | 2.271% | |
Federal Home Loan Bank advances | Borrowings due August 2021 at 1.427% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 125.0 | |
Interest rate | 1.427% | |
Federal Home Loan Bank advances | Borrowings due September 2021 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 2.187% | |
Federal Home Loan Bank advances | Borrowings due May 2022 at 1.930% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 22.0 | |
Interest rate | 1.93% | |
Federal Home Loan Bank advances | Borrowings due May 2022 at 1.371% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100.0 | |
Interest rate | 1.371% | |
Federal Home Loan Bank advances | Borrowings due June 2022 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 10.0 | |
Interest rate | 1.613% | |
Federal Home Loan Bank advances | Borrowings due July 2022 at 2.218% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 2.218% | |
Federal Home Loan Bank advances | Borrowings due July 2022 at 2.181% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 2.181% | |
Federal Home Loan Bank advances | Borrowings due July 2022 at 2.175% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 2.175% | |
Federal Home Loan Bank advances | Borrowings due August 2022 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 2.132% | |
Federal Home Loan Bank advances | Borrowings due December 2022 at 1.880% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 1.88% | |
Federal Home Loan Bank advances | Borrowings due December 2022 at 1.880%, loan 2 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 1.88% | |
Federal Home Loan Bank advances | Borrowings due March 2023 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 23.0 | |
Interest rate | 2.16% | |
Federal Home Loan Bank advances | Borrowings due July 2023 at 1.095% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 1.095% | |
Federal Home Loan Bank advances | Borrowings due July 2023 at 1.190% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100.0 | |
Interest rate | 1.19% | |
Federal Home Loan Bank advances | Borrowings due February 2024 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 2.002% | |
Federal Home Loan Bank advances | Borrowings due May 2024 at 1.180% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 1.18% | |
Federal Home Loan Bank advances | Borrowings due May 2024 at 1.404% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 21.8 | |
Interest rate | 1.404% | |
Federal Home Loan Bank advances | Borrowings due May 2024 at 1.426% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100.0 | |
Interest rate | 1.426% | |
Federal Home Loan Bank advances | Borrowings due May 2024 at 1.471% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50.0 | |
Interest rate | 1.471% | |
Federal Home Loan Bank advances | Borrowings due June 2024 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 75.0 | |
Interest rate | 1.685% | |
Federal Home Loan Bank advances | Borrowings due July 2024 at 2.210% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100.0 | |
Interest rate | 2.21% | |
Federal Home Loan Bank advances | Borrowings due July 2024 at 1.990% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 15.5 | |
Interest rate | 1.99% | |
Federal Home Loan Bank advances | Borrowings due July 2024 at 1.987% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 34.5 | |
Interest rate | 1.987% | |
Federal Home Loan Bank advances | Borrowings due July 2024 at 2.225% | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 15.0 | |
Interest rate | 2.225% | |
Federal Home Loan Bank advances | Borrowings due September 2024 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 25.0 | |
Interest rate | 1.571% | |
Federal Home Loan Bank advances | Borrowings due June 2025 | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 19.8 | |
Interest rate | 2.94% |
CHANGES IN COMMON STOCK (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Equity, Class of Treasury Stock [Line Items] | ||
Stock repurchased and retired during period, value | $ 83.0 | $ 47.0 |
Stock repurchase program, remaining repurchase authorized amount | 449.3 | |
Common stock dividends declared | $ 16.0 | $ 16.1 |
Dividends (in dollars per share) | $ 0.11 | |
Common stock | ||
Equity, Class of Treasury Stock [Line Items] | ||
Stock repurchased and retired during period, shares | 5,083 | 2,893 |
Stock repurchased and retired during period, value | $ 0.1 |
SALES INDUCEMENTS (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Insurance [Abstract] | |||
Deferred sales inducements | $ 3.3 | $ 7.1 | |
Deferred sales inducements, amortization expense | (0.3) | $ 1.5 | |
Unamortized deferred sales inducements | $ 64.3 | $ 60.7 |
RECENTLY ISSUED ACCOUNTING STANDARDS - NARRATIVE (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Mar. 31, 2019 |
Jan. 01, 2019 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total right of use assets | $ 63.9 | $ 65.5 | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total right of use assets | $ 72.0 | ||
Present value of lease liabilities | $ 72.0 |
RECENTLY ISSUED ACCOUNTING STANDARDS - IMPACT OF ADOPTION (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Fixed maturities, available for sale | $ 20,379.1 | $ 21,293.1 | $ 21,295.2 | $ 18,443.7 | ||
Mortgage loans | 1,484.1 | 15,654.3 | 1,566.1 | |||
Investments held by variable interest entities | 1,038.1 | 1,178.7 | 1,188.6 | |||
Income tax assets, net | 703.2 | 437.5 | 432.6 | 630.9 | ||
Reinsurance receivables | 4,727.5 | 4,781.7 | 4,785.7 | |||
Total assets | 32,735.0 | 33,613.1 | 33,630.9 | 31,436.7 | ||
Retained earnings | 480.7 | 517.9 | 535.7 | 193.5 | ||
Total shareholders' equity | $ 3,765.8 | 4,659.2 | 4,677.0 | $ 3,837.9 | 3,367.8 | $ 3,370.9 |
ASU 2016-13 credit losses | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Fixed maturities, available for sale | (2.1) | |||||
Mortgage loans | (6.7) | |||||
Investments held by variable interest entities | (9.9) | |||||
Income tax assets, net | 4.9 | |||||
Reinsurance receivables | (4.0) | |||||
Total assets | (17.8) | |||||
Retained earnings | (17.8) | |||||
Total shareholders' equity | $ (17.8) | |||||
ASU 2017-08 premium amortization on purchased callable debt securities | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Fixed maturities, available for sale | (4.0) | |||||
Income tax assets, net | 0.9 | |||||
Total assets | (3.1) | |||||
Retained earnings | (3.1) | |||||
Total shareholders' equity | $ (3.1) | |||||
Amounts prior to effect of adoption of authoritative guidance | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Fixed maturities, available for sale | 21,295.2 | 18,447.7 | ||||
Mortgage loans | 15,661.0 | |||||
Investments held by variable interest entities | 1,188.6 | |||||
Income tax assets, net | 432.6 | 630.0 | ||||
Reinsurance receivables | 4,785.7 | |||||
Total assets | 33,630.9 | 31,439.8 | ||||
Retained earnings | 535.7 | 196.6 | ||||
Total shareholders' equity | $ 4,677.0 | $ 3,370.9 |
LITIGATION AND OTHER LEGAL PROCEEDINGS (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2020
state
|
Jan. 24, 2019
case
|
|
Loss Contingencies [Line Items] | ||
Number of states participating in examination of compliance with unclaimed property laws | state | 41 | |
Cyganowski v. Beechwood Re Ltd, et al. | Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Number of cases consolidated | case | 2 |
CONSOLIDATED STATEMENT OF CASH FLOW (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Cash flows from operating activities: | ||
Net income (loss) | $ (21.2) | $ 51.8 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Amortization and depreciation | 59.6 | 66.6 |
Income taxes | (51.7) | 18.7 |
Insurance liabilities | 9.7 | 177.9 |
Accrual and amortization of investment income | 116.1 | (83.6) |
Deferral of policy acquisition costs | (68.2) | (69.6) |
Net realized investment (gains) losses | 115.5 | (16.1) |
Other | (34.1) | (3.4) |
Net cash from operating activities | 125.7 | 142.3 |
Amounts related to employee benefit plans | $ 4.6 | $ 4.4 |
LEASES (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Leases [Abstract] | ||
Operating lease expense | $ 6.2 | $ 6.1 |
Cash paid for operating lease liability | 6.3 | 6.0 |
Right of use assets obtained in exchange for lease liabilities (non-cash transactions) | 3.2 | 4.3 |
Total right of use assets | $ 63.9 | $ 65.5 |
INVESTMENTS IN VARIABLE INTEREST ENTITIES - BALANCE SHEET ITEMS (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Assets: | |||
Investments held by variable interest entities (net of allowance for credit losses of $37.7 at March 31, 2020; amortized cost: March 31, 2020 - $1,216.4; December 31, 2019 - $1,206.3) | $ 1,038.1 | $ 1,178.7 | $ 1,188.6 |
Cash and cash equivalents held by variable interest entities | 68.5 | 74.7 | |
Liabilities: | |||
Borrowings related to variable interest entities | 1,152.3 | 1,152.5 | |
VIEs | |||
Assets: | |||
Investments held by variable interest entities (net of allowance for credit losses of $37.7 at March 31, 2020; amortized cost: March 31, 2020 - $1,216.4; December 31, 2019 - $1,206.3) | 1,038.1 | 1,188.6 | |
Notes receivable of VIEs held by subsidiaries | 0.0 | 0.0 | |
Cash and cash equivalents held by variable interest entities | 68.5 | 74.7 | |
Accrued investment income | 1.5 | 1.7 | |
Income tax assets, net | 42.3 | 8.0 | |
Other assets | 2.5 | 2.8 | |
Total assets | 1,152.9 | 1,275.8 | |
Liabilities: | |||
Other liabilities | 48.9 | 42.8 | |
Borrowings related to variable interest entities | 1,152.3 | 1,152.5 | |
Notes payable of VIEs held by subsidiaries | 126.1 | 126.1 | |
Total liabilities | 1,327.3 | 1,321.4 | |
Eliminations | |||
Assets: | |||
Investments held by variable interest entities (net of allowance for credit losses of $37.7 at March 31, 2020; amortized cost: March 31, 2020 - $1,216.4; December 31, 2019 - $1,206.3) | 0.0 | 0.0 | |
Notes receivable of VIEs held by subsidiaries | (113.8) | (113.8) | |
Cash and cash equivalents held by variable interest entities | 0.0 | 0.0 | |
Accrued investment income | 0.0 | 0.0 | |
Income tax assets, net | 0.0 | 0.0 | |
Other assets | (0.9) | (1.4) | |
Total assets | (114.7) | (115.2) | |
Liabilities: | |||
Other liabilities | (3.8) | (4.4) | |
Borrowings related to variable interest entities | 0.0 | 0.0 | |
Notes payable of VIEs held by subsidiaries | (126.1) | (126.1) | |
Total liabilities | (129.9) | (130.5) | |
Net effect on consolidated balance sheet | |||
Assets: | |||
Investments held by variable interest entities (net of allowance for credit losses of $37.7 at March 31, 2020; amortized cost: March 31, 2020 - $1,216.4; December 31, 2019 - $1,206.3) | 1,038.1 | 1,188.6 | |
Notes receivable of VIEs held by subsidiaries | (113.8) | (113.8) | |
Cash and cash equivalents held by variable interest entities | 68.5 | 74.7 | |
Accrued investment income | 1.5 | 1.7 | |
Income tax assets, net | 42.3 | 8.0 | |
Other assets | 1.6 | 1.4 | |
Total assets | 1,038.2 | 1,160.6 | |
Liabilities: | |||
Other liabilities | 45.1 | 38.4 | |
Borrowings related to variable interest entities | 1,152.3 | 1,152.5 | |
Notes payable of VIEs held by subsidiaries | 0.0 | 0.0 | |
Total liabilities | $ 1,197.4 | $ 1,190.9 |
INVESTMENTS IN VARIABLE INTEREST ENTITIES - NARRATIVE (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020
USD ($)
investment
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Variable Interest Entity [Line Items] | |||
Total amortized cost | $ 1,216.4 | ||
Variable interest entity, gross unrealized gains fixed maturity securities | 0.4 | ||
Variable interest entity gross unrealized losses fixed maturity securities | 141.0 | ||
Variable interest entity, allowance for credit losses fixed maturity securities | 37.7 | ||
Estimated fair value of fixed maturity securities | 1,038.1 | ||
Variable interest entities net realized losses on investments | (30.1) | $ (8.2) | |
Variable interest entities net loss from sale of fixed maturity investments | (2.3) | ||
Variable interest entities, change in allowance for credit losses | (27.8) | ||
Variable interest entity, gross investment losses from sale | 2.3 | 8.5 | |
Variable interest entities, investments sold | $ 18.5 | $ 249.7 | |
Number of investments held by VIE, in default | investment | 0 | ||
Fair value, less than 12 months | $ 5,620.7 | $ 1,262.8 | |
Gross unrealized losses, less than 12 months | 547.1 | 11.4 | |
Fair value, 12 months or greater | 215.0 | 341.2 | |
Gross unrealized losses, 12 months or greater | 34.4 | 9.7 | |
Investments held in limited partnerships | 569.8 | ||
Unfunded commitments to limited partnerships | 94.8 | ||
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Fair value, less than 12 months | 550.7 | 153.0 | |
Gross unrealized losses, less than 12 months | 64.2 | 3.1 | |
Fair value, 12 months or greater | 182.0 | 430.1 | |
Gross unrealized losses, 12 months or greater | $ 31.7 | $ 18.5 |
INVESTMENTS IN VARIABLE INTEREST ENTITIES - CHANGES IN ALLOWANCE (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Variable Interest Entity [Line Items] | |
Allowance at January 1, 2020 | $ 2.1 |
Additions for securities for which credit losses were not previously recorded | 19.2 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | (1.1) |
Reduction for securities sold during the period | (0.3) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | 19.9 |
Corporate securities | |
Variable Interest Entity [Line Items] | |
Allowance at January 1, 2020 | 2.1 |
Additions for securities for which credit losses were not previously recorded | 17.5 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | (1.1) |
Reduction for securities sold during the period | (0.3) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | 18.2 |
Variable Interest Entity, Primary Beneficiary | Corporate securities | |
Variable Interest Entity [Line Items] | |
Allowance at January 1, 2020 | 9.9 |
Additions for securities for which credit losses were not previously recorded | 19.1 |
Additions for purchased securities with deteriorated credit | 0.0 |
Additions (reductions) for securities where an allowance was previously recorded | 9.9 |
Reduction for securities sold during the period | (1.2) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0.0 |
Write-offs | 0.0 |
Recoveries of previously written-off amount | 0.0 |
Allowance at March 31, 2020 | $ 37.7 |
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Jan. 01, 2019 |
---|---|---|---|---|
Amortized cost | ||||
Due in one year or less | $ 305.2 | $ 282.2 | ||
Due after one year through five years | 1,061.5 | 1,082.2 | ||
Due after five years through ten years | 1,371.3 | 1,376.6 | ||
Due after ten years | 11,212.0 | 10,908.6 | ||
Amortized cost | 19,420.2 | 19,179.5 | ||
Estimated fair value | ||||
Due in one year or less | 308.8 | 286.0 | ||
Due after one year through five years | 1,065.6 | 1,130.8 | ||
Due after five years through ten years | 1,375.2 | 1,481.7 | ||
Due after ten years | 12,415.2 | 12,583.7 | ||
Total fixed maturities, available for sale | 20,379.1 | $ 21,293.1 | $ 21,295.2 | $ 18,443.7 |
Variable Interest Entity, Primary Beneficiary | ||||
Amortized cost | ||||
Due in one year or less | 1.0 | |||
Due after one year through five years | 706.7 | |||
Due after five years through ten years | 504.7 | |||
Due after ten years | 4.0 | |||
Amortized cost | 1,216.4 | |||
Estimated fair value | ||||
Due in one year or less | 0.4 | |||
Due after one year through five years | 594.7 | |||
Due after five years through ten years | 439.6 | |||
Due after ten years | 3.4 | |||
Total fixed maturities, available for sale | $ 1,038.1 |
FAIR VALUE MEASUREMENTS - NARRATIVE (Details) |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage | 89.00% |
Available for sale fixed maturities classified as level 3, investment grade, percent | 95.00% |
Available for sale fixed maturities classified as Level 3 and corporate securities | 77.00% |
FAIR VALUE MEASUREMENTS - MEASUREMENTS BY INPUT LEVEL (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Jan. 01, 2019 |
---|---|---|---|---|
Assets: | ||||
Fixed maturities, available for sale | $ 20,379.1 | $ 21,293.1 | $ 21,295.2 | $ 18,443.7 |
Equity securities - corporate securities | 50.1 | 44.1 | ||
Total trading securities | 227.8 | 243.9 | ||
Investments held by variable interest entities - corporate securities | 1,038.1 | $ 1,178.7 | 1,188.6 | |
Assets held in separate accounts | 3.2 | 4.2 | ||
Corporate securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 12,617.3 | 12,935.3 | ||
United States Treasury securities and obligations of United States government corporations and agencies | ||||
Assets: | ||||
Fixed maturities, available for sale | 232.6 | 204.6 | ||
States and political subdivisions | ||||
Assets: | ||||
Fixed maturities, available for sale | 2,221.4 | 2,246.7 | ||
Foreign governments | ||||
Assets: | ||||
Fixed maturities, available for sale | 93.5 | 95.6 | ||
Asset-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,205.7 | 1,387.9 | ||
Agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 80.3 | 95.0 | ||
Non-agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,825.1 | 2,042.3 | ||
Collateralized loan obligations | ||||
Assets: | ||||
Fixed maturities, available for sale | 398.9 | 400.8 | ||
Commercial mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,704.3 | 1,887.0 | ||
Significant unobservable inputs (Level 3) | ||||
Assets: | ||||
Total assets carried at fair value by category | 185.7 | 213.3 | ||
Fair Value, Measurements, Recurring | ||||
Assets: | ||||
Fixed maturities, available for sale | 20,379.1 | 21,295.2 | ||
Total trading securities | 227.8 | 243.9 | ||
Investments held by variable interest entities - corporate securities | 1,038.1 | 1,188.6 | ||
Other invested assets - derivatives | 47.6 | 203.8 | ||
Assets held in separate accounts | 3.2 | 4.2 | ||
Total assets carried at fair value by category | 21,745.9 | 22,979.8 | ||
Liabilities: | ||||
Embedded derivatives associated with fixed index annuity products (classified as policyholder account liabilities) | 1,548.5 | 1,565.4 | ||
Fair Value, Measurements, Recurring | Corporate securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 12,617.3 | 12,935.3 | ||
Equity securities - corporate securities | 50.1 | 44.1 | ||
Total trading securities | 15.5 | |||
Fair Value, Measurements, Recurring | United States Treasury securities and obligations of United States government corporations and agencies | ||||
Assets: | ||||
Fixed maturities, available for sale | 232.6 | 204.6 | ||
Fair Value, Measurements, Recurring | States and political subdivisions | ||||
Assets: | ||||
Fixed maturities, available for sale | 2,221.4 | 2,246.7 | ||
Fair Value, Measurements, Recurring | Foreign governments | ||||
Assets: | ||||
Fixed maturities, available for sale | 93.5 | 95.6 | ||
Fair Value, Measurements, Recurring | Asset-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,205.7 | 1,387.8 | ||
Total trading securities | 10.5 | 12.1 | ||
Fair Value, Measurements, Recurring | Agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 80.3 | 95.1 | ||
Total trading securities | 0.4 | 0.4 | ||
Fair Value, Measurements, Recurring | Non-agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,825.1 | 2,042.3 | ||
Total trading securities | 92.3 | 113.4 | ||
Fair Value, Measurements, Recurring | Collateralized loan obligations | ||||
Assets: | ||||
Fixed maturities, available for sale | 398.9 | 400.8 | ||
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,704.3 | 1,887.0 | ||
Total trading securities | 109.1 | 118.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Investments held by variable interest entities - corporate securities | 0.0 | 0.0 | ||
Other invested assets - derivatives | 0.0 | 0.0 | ||
Assets held in separate accounts | 0.0 | 0.0 | ||
Total assets carried at fair value by category | 17.5 | 31.3 | ||
Liabilities: | ||||
Embedded derivatives associated with fixed index annuity products (classified as policyholder account liabilities) | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Corporate securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Equity securities - corporate securities | 17.5 | 31.3 | ||
Total trading securities | 0.0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | United States Treasury securities and obligations of United States government corporations and agencies | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | States and political subdivisions | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Foreign governments | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Asset-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Non-agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Collateralized loan obligations | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Commercial mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets: | ||||
Fixed maturities, available for sale | 20,213.2 | 21,102.7 | ||
Total trading securities | 216.9 | 231.4 | ||
Investments held by variable interest entities - corporate securities | 1,037.5 | 1,188.6 | ||
Other invested assets - derivatives | 47.6 | 203.8 | ||
Assets held in separate accounts | 3.2 | 4.2 | ||
Total assets carried at fair value by category | 21,542.7 | 22,735.2 | ||
Liabilities: | ||||
Embedded derivatives associated with fixed index annuity products (classified as policyholder account liabilities) | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Corporate securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 12,489.5 | 12,756.5 | ||
Equity securities - corporate securities | 24.3 | 4.5 | ||
Total trading securities | 15.5 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | United States Treasury securities and obligations of United States government corporations and agencies | ||||
Assets: | ||||
Fixed maturities, available for sale | 232.6 | 204.6 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | States and political subdivisions | ||||
Assets: | ||||
Fixed maturities, available for sale | 2,221.4 | 2,246.7 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Foreign governments | ||||
Assets: | ||||
Fixed maturities, available for sale | 93.5 | 94.5 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Asset-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,174.8 | 1,375.2 | ||
Total trading securities | 10.5 | 12.1 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 80.3 | 95.1 | ||
Total trading securities | 0.4 | 0.4 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Non-agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,825.1 | 2,042.3 | ||
Total trading securities | 92.3 | 113.4 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Collateralized loan obligations | ||||
Assets: | ||||
Fixed maturities, available for sale | 398.9 | 400.8 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 1,697.1 | 1,887.0 | ||
Total trading securities | 98.2 | 105.5 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets: | ||||
Fixed maturities, available for sale | 165.9 | 192.5 | ||
Total trading securities | 10.9 | 12.5 | ||
Investments held by variable interest entities - corporate securities | 0.6 | 0.0 | ||
Other invested assets - derivatives | 0.0 | 0.0 | ||
Assets held in separate accounts | 0.0 | 0.0 | ||
Total assets carried at fair value by category | 185.7 | 213.3 | ||
Liabilities: | ||||
Embedded derivatives associated with fixed index annuity products (classified as policyholder account liabilities) | 1,548.5 | 1,565.4 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Corporate securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 127.8 | 178.8 | ||
Equity securities - corporate securities | 8.3 | 8.3 | ||
Total trading securities | 0.0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | United States Treasury securities and obligations of United States government corporations and agencies | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | States and political subdivisions | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Foreign governments | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 1.1 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Asset-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 30.9 | 12.6 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Non-agency residential mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Total trading securities | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Collateralized loan obligations | ||||
Assets: | ||||
Fixed maturities, available for sale | 0.0 | 0.0 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Commercial mortgage-backed securities | ||||
Assets: | ||||
Fixed maturities, available for sale | 7.2 | 0.0 | ||
Total trading securities | $ 10.9 | $ 12.5 |
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Cash and cash equivalents: | ||
Held by variable interest entities | $ 68.5 | $ 74.7 |
Fair Value, Measurements, Recurring | Total estimated fair value | ||
Assets: | ||
Mortgage loans | 1,598.3 | 1,651.4 |
Policy loans | 124.7 | 124.5 |
Other invested assets: | ||
Company-owned life insurance | 197.2 | 194.0 |
Cash and cash equivalents: | ||
Unrestricted | 482.0 | 580.0 |
Held by variable interest entities | 68.5 | 74.7 |
Liabilities: | ||
Policyholder account liabilities | 12,138.1 | 12,132.3 |
Investment borrowings | 1,649.4 | 1,647.9 |
Borrowings related to variable interest entities | 1,027.5 | 1,142.1 |
Notes payable – direct corporate obligations | 1,003.8 | 1,117.2 |
Fair Value, Measurements, Recurring | Total carrying amount | ||
Assets: | ||
Mortgage loans | 1,484.1 | 1,566.1 |
Policy loans | 124.7 | 124.5 |
Other invested assets: | ||
Company-owned life insurance | 197.2 | 194.0 |
Cash and cash equivalents: | ||
Unrestricted | 482.0 | 580.0 |
Held by variable interest entities | 68.5 | 74.7 |
Liabilities: | ||
Policyholder account liabilities | 12,138.1 | 12,132.3 |
Investment borrowings | 1,643.9 | 1,644.3 |
Borrowings related to variable interest entities | 1,152.3 | 1,152.5 |
Notes payable – direct corporate obligations | 989.4 | 989.1 |
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | ||
Assets: | ||
Mortgage loans | 0.0 | 0.0 |
Policy loans | 0.0 | 0.0 |
Other invested assets: | ||
Company-owned life insurance | 0.0 | 0.0 |
Cash and cash equivalents: | ||
Unrestricted | 481.9 | 579.9 |
Held by variable interest entities | 68.5 | 74.7 |
Liabilities: | ||
Policyholder account liabilities | 0.0 | 0.0 |
Investment borrowings | 0.0 | 0.0 |
Borrowings related to variable interest entities | 0.0 | 0.0 |
Notes payable – direct corporate obligations | 0.0 | 0.0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||
Assets: | ||
Mortgage loans | 0.0 | 0.0 |
Policy loans | 0.0 | 0.0 |
Other invested assets: | ||
Company-owned life insurance | 197.2 | 194.0 |
Cash and cash equivalents: | ||
Unrestricted | 0.1 | 0.1 |
Held by variable interest entities | 0.0 | 0.0 |
Liabilities: | ||
Policyholder account liabilities | 0.0 | 0.0 |
Investment borrowings | 1,649.4 | 1,647.9 |
Borrowings related to variable interest entities | 1,027.5 | 1,142.1 |
Notes payable – direct corporate obligations | 1,003.8 | 1,117.2 |
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||
Assets: | ||
Mortgage loans | 1,598.3 | 1,651.4 |
Policy loans | 124.7 | 124.5 |
Other invested assets: | ||
Company-owned life insurance | 0.0 | 0.0 |
Cash and cash equivalents: | ||
Unrestricted | 0.0 | 0.0 |
Held by variable interest entities | 0.0 | 0.0 |
Liabilities: | ||
Policyholder account liabilities | 12,138.1 | 12,132.3 |
Investment borrowings | 0.0 | 0.0 |
Borrowings related to variable interest entities | 0.0 | 0.0 |
Notes payable – direct corporate obligations | $ 0.0 | $ 0.0 |
FAIR VALUE MEASUREMENTS - BALANCE SHEET RECURRING (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Embedded derivatives associated with fixed index annuity products (classified as policyholder account liabilities) | ||
Liabilities: | ||
Beginning balance | $ (1,565.4) | $ (1,289.0) |
Purchases, sales, issuances and settlements, net | 93.6 | (48.9) |
Total realized and unrealized gains (losses) included in net income | (76.7) | (35.0) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.0 | 0.0 |
Transfers into level 3 | 0.0 | 0.0 |
Transfers out of level 3 | 0.0 | 0.0 |
Ending balance | (1,548.5) | (1,372.9) |
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date | (76.7) | (35.0) |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | (76.7) | |
Corporate securities | ||
Assets: | ||
Beginning balance | 178.8 | 158.6 |
Purchases, sales, issuances and settlements, net | 20.0 | (16.5) |
Total realized and unrealized gains (losses) included in net income | (0.6) | (2.8) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (1.4) | 3.8 |
Transfers into level 3 | 82.6 | 0.0 |
Transfers out of level 3 | (151.6) | (5.5) |
Ending balance | 127.8 | 137.6 |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | (0.6) | (2.2) |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | (1.9) | |
Foreign governments | ||
Assets: | ||
Beginning balance | 1.1 | 1.0 |
Purchases, sales, issuances and settlements, net | 0.0 | 0.0 |
Total realized and unrealized gains (losses) included in net income | 0.0 | 0.0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.0 | 0.0 |
Transfers into level 3 | 0.0 | 0.0 |
Transfers out of level 3 | (1.1) | 0.0 |
Ending balance | 0.0 | 1.0 |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0.0 | 0.0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | 0.0 | |
Asset-backed securities | ||
Assets: | ||
Beginning balance | 12.6 | 12.0 |
Purchases, sales, issuances and settlements, net | 20.3 | (0.1) |
Total realized and unrealized gains (losses) included in net income | 0.0 | 0.0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (2.0) | 0.4 |
Transfers into level 3 | 0.0 | 0.0 |
Transfers out of level 3 | 0.0 | 0.0 |
Ending balance | 30.9 | 12.3 |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0.0 | 0.0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | (2.0) | |
Commercial mortgage-backed securities | ||
Assets: | ||
Beginning balance | 0.0 | |
Purchases, sales, issuances and settlements, net | 0.0 | |
Total realized and unrealized gains (losses) included in net income | 0.0 | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (1.0) | |
Transfers into level 3 | 8.2 | |
Transfers out of level 3 | 0.0 | |
Ending balance | 7.2 | |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0.0 | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | (1.0) | |
Collateralized loan obligations | ||
Assets: | ||
Beginning balance | 0.0 | |
Purchases, sales, issuances and settlements, net | 5.0 | |
Total realized and unrealized gains (losses) included in net income | 0.0 | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.0 | |
Transfers into level 3 | 0.0 | |
Transfers out of level 3 | 0.0 | |
Ending balance | 5.0 | |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0.0 | |
Total fixed maturities, available for sale | ||
Assets: | ||
Beginning balance | 192.5 | 171.6 |
Purchases, sales, issuances and settlements, net | 40.3 | (11.6) |
Total realized and unrealized gains (losses) included in net income | (0.6) | (2.8) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (4.4) | 4.2 |
Transfers into level 3 | 90.8 | 0.0 |
Transfers out of level 3 | (152.7) | (5.5) |
Ending balance | 165.9 | 155.9 |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | (0.6) | (2.2) |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | (4.9) | |
Equity securities - corporate securities | ||
Assets: | ||
Beginning balance | 8.3 | 9.5 |
Purchases, sales, issuances and settlements, net | 0.0 | 0.0 |
Total realized and unrealized gains (losses) included in net income | 0.0 | (1.2) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.0 | 0.0 |
Transfers into level 3 | 0.0 | 0.0 |
Transfers out of level 3 | 0.0 | 0.0 |
Ending balance | 8.3 | 8.3 |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0.0 | $ 0.0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | 0.0 | |
Trading securities - commercial mortgage-backed securities | ||
Assets: | ||
Beginning balance | 12.5 | |
Purchases, sales, issuances and settlements, net | 0.0 | |
Total realized and unrealized gains (losses) included in net income | (1.8) | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.2 | |
Transfers into level 3 | 0.0 | |
Transfers out of level 3 | 0.0 | |
Ending balance | 10.9 | |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | 0.0 | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | 0.0 | |
Variable Interest Entity, Primary Beneficiary | Corporate securities | ||
Assets: | ||
Beginning balance | 0.0 | |
Purchases, sales, issuances and settlements, net | 0.0 | |
Total realized and unrealized gains (losses) included in net income | (2.9) | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 1.1 | |
Transfers into level 3 | 2.4 | |
Transfers out of level 3 | 0.0 | |
Ending balance | 0.6 | |
Amount of total gains (losses) included in our net income relating to assets and liabilities still held as of the reporting date | (2.9) | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets and liabilities still held as of the reporting date | $ 1.1 |
FAIR VALUE MEASUREMENTS - FAIR VALUE ACTIVITY (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Embedded derivatives associated with fixed index annuity products (classified as policyholder account liabilities) | ||
Liabilities: | ||
Purchases | $ (50.8) | $ (35.0) |
Sales | 119.2 | 1.6 |
Issuances | 0.0 | (39.6) |
Settlements | 25.2 | 24.1 |
Purchases, sales, issuances and settlements, net | 93.6 | (48.9) |
Corporate securities | ||
Assets: | ||
Purchases | 20.0 | 0.0 |
Sales | 0.0 | (16.5) |
Issuances | 0.0 | 0.0 |
Settlements | 0.0 | 0.0 |
Purchases, sales, issuances and settlements, net | 20.0 | (16.5) |
Asset-backed securities | ||
Assets: | ||
Purchases | 20.5 | 0.0 |
Sales | (0.2) | (0.1) |
Issuances | 0.0 | 0.0 |
Settlements | 0.0 | 0.0 |
Purchases, sales, issuances and settlements, net | 20.3 | (0.1) |
Collateralized loan obligations | ||
Assets: | ||
Purchases | 5.0 | |
Sales | 0.0 | |
Issuances | 0.0 | |
Settlements | 0.0 | |
Purchases, sales, issuances and settlements, net | 5.0 | |
Total fixed maturities, available for sale | ||
Assets: | ||
Purchases | 40.5 | 5.0 |
Sales | (0.2) | (16.6) |
Issuances | 0.0 | 0.0 |
Settlements | 0.0 | 0.0 |
Purchases, sales, issuances and settlements, net | $ 40.3 | $ (11.6) |
FAIR VALUE MEASUREMENTS - FAIR VALUE INPUTS (Details) $ in Millions |
Mar. 31, 2020
USD ($)
|
Jan. 01, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Jan. 01, 2019
USD ($)
|
---|---|---|---|---|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fixed maturities, available for sale | $ 20,379.1 | $ 21,293.1 | $ 21,295.2 | $ 18,443.7 |
Equity securities - corporate securities | 50.1 | 44.1 | ||
Corporate securities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fixed maturities, available for sale | 12,617.3 | 12,935.3 | ||
Asset-backed securities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fixed maturities, available for sale | 1,205.7 | 1,387.9 | ||
Significant unobservable inputs (Level 3) | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Total assets carried at fair value by category | 185.7 | 213.3 | ||
Significant unobservable inputs (Level 3) | Unadjusted third-party price source | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Other assets categorized as Level 3 | 157.5 | 57.2 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Future policy benefits | $ 1,548.5 | $ 1,565.4 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Discount margins | Minimum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0055 | 0.0124 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Discount margins | Maximum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0224 | 0.0307 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Discount margins | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0119 | 0.0188 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Projected portfolio yields | Minimum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0471 | 0.0471 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Projected portfolio yields | Maximum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0498 | 0.0498 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Projected portfolio yields | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0472 | 0.0472 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Surrender rates | Minimum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.0160 | 0.0160 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Surrender rates | Maximum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.3190 | 0.3190 | ||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Surrender rates | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, liabilities | 0.1090 | 0.1090 | ||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fixed maturities, available for sale | $ 5.5 | $ 134.2 | ||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | Discount margins | Minimum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.0433 | 0.0107 | ||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | Discount margins | Maximum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.0547 | 0.0842 | ||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | Discount margins | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.0537 | 0.0191 | ||
Significant unobservable inputs (Level 3) | Corporate securities | Recovery method | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fixed maturities, available for sale | $ 1.0 | $ 1.0 | ||
Significant unobservable inputs (Level 3) | Corporate securities | Recovery method | Percent of recovery expected | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.1277 | 0.1277 | ||
Significant unobservable inputs (Level 3) | Asset-backed securities | Discounted cash flow analysis | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fixed maturities, available for sale | $ 13.4 | $ 12.6 | ||
Significant unobservable inputs (Level 3) | Asset-backed securities | Discounted cash flow analysis | Discount margins | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.0189 | 0.0166 | ||
Significant unobservable inputs (Level 3) | Equity securities | Recovery method | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Equity securities - corporate securities | $ 8.3 | $ 8.3 | ||
Significant unobservable inputs (Level 3) | Equity securities | Recovery method | Percent of recovery expected | Minimum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.5927 | 0.5927 | ||
Significant unobservable inputs (Level 3) | Equity securities | Recovery method | Percent of recovery expected | Maximum | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 1.0000 | 1.0000 | ||
Significant unobservable inputs (Level 3) | Equity securities | Recovery method | Percent of recovery expected | Weighted Average | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unobservable inputs, assets | 0.5952 | 0.5952 |
Label | Element | Value |
---|---|---|
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 3,367,800,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 4,659,200,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (17,800,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,100,000) |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 177,700,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 1,372,500,000 |
Common Stock [Member] | ||
Common Stock, Shares, Issued | us-gaap_CommonStockSharesIssued | 162,202,000 |
Common Stock, Shares, Issued | us-gaap_CommonStockSharesIssued | 148,084,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 1,500,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 1,600,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 2,767,300,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 2,995,000,000.0 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 517,900,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 193,500,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,100,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (17,800,000) |