CNO FINANCIAL GROUP, INC., 10-Q filed on 8/3/2018
Quarterly Report
v3.10.0.1
DOCUMENT AND ENTITY INFORMATION - shares
6 Months Ended
Jun. 30, 2018
Jul. 23, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name CNO Financial Group, Inc.  
Entity Central Index Key 0001224608  
Document Type 10-Q  
Document Period End Date Jun. 30, 2018  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Entity Filer Category Large Accelerated Filer  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   164,566,061
v3.10.0.1
CONSOLIDATED BALANCE SHEET (unaudited) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Investments:    
Fixed maturities, available for sale, at fair value (amortized cost: June 30, 2018 - $20,989.5; December 31, 2017 - $20,702.1) $ 22,080.9 $ 22,910.9
Equity securities at fair value (cost: June 30, 2018 - $367.1; December 31, 2017 - $420.0) 366.1 440.6
Mortgage loans 1,649.4 1,650.6
Policy loans 116.0 116.0
Trading securities 254.2 284.6
Investments held by variable interest entities 1,543.3 1,526.9
Other invested assets 946.0 924.5
Total investments 26,955.9 27,854.1
Cash and cash equivalents - unrestricted 639.3 578.4
Cash and cash equivalents held by variable interest entities 106.4 178.9
Accrued investment income 252.5 245.9
Present value of future profits 345.5 359.6
Deferred acquisition costs 1,237.4 1,026.8
Reinsurance receivables 2,127.4 2,175.2
Income tax assets, net 484.8 366.9
Assets held in separate accounts 4.8 5.0
Other assets 318.2 319.5
Total assets 32,472.2 33,110.3
Liabilities for insurance products:    
Policyholder account balances 11,349.7 11,220.7
Future policy benefits 11,268.5 11,521.3
Liability for policy and contract claims 499.5 530.3
Unearned and advanced premiums 260.5 261.7
Liabilities related to separate accounts 4.8 5.0
Other liabilities 654.2 751.8
Investment borrowings 1,646.3 1,646.7
Borrowings related to variable interest entities 1,418.1 1,410.7
Notes payable – direct corporate obligations 915.7 914.6
Total liabilities 28,017.3 28,262.8
Commitments and Contingencies
Shareholders' equity:    
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: June 30, 2018 – 164,433,085; December 31, 2017 – 166,857,931) 1.6 1.7
Additional paid-in capital 3,021.9 3,073.3
Accumulated other comprehensive income 700.2 1,212.1
Retained earnings 731.2 560.4
Total shareholders' equity 4,454.9 4,847.5
Total liabilities and shareholders' equity $ 32,472.2 $ 33,110.3
v3.10.0.1
CONSOLIDATED BALANCE SHEET (unaudited) (Parenthetical) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Investments:    
Fixed maturities, available for sale, amortized cost $ 20,989.5 $ 20,702.1
Equity securities cost $ 367.1 $ 420.0
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) 164,433,085 166,857,931
Common stock, shares outstanding (in shares) 164,433,085 166,857,931
v3.10.0.1
CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Revenues:        
Insurance policy income $ 659.8 $ 664.1 $ 1,319.7 $ 1,327.9
Net investment income:        
General account assets 328.2 322.4 657.3 634.4
Policyholder and other special-purpose portfolios 35.7 43.9 48.5 119.1
Realized investment gains (losses):        
Net realized investment gains (losses), excluding impairment losses 11.0 24.0 (4.2) 40.3
Total other-than-temporary impairment losses 0.0 (4.2) 0.0 (12.6)
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income 0.0 (0.9) 0.0 (0.9)
Net impairment losses recognized 0.0 (5.1) 0.0 (13.5)
Loss on dissolution of a variable interest entity 0.0 (3.7) 0.0 (3.7)
Total realized gains (losses) 11.0 15.2 (4.2) 23.1
Fee revenue and other income 11.6 11.5 32.8 23.3
Total revenues 1,046.3 1,057.1 2,054.1 2,127.8
Benefits and expenses:        
Insurance policy benefits 618.2 634.2 1,204.8 1,303.5
Interest expense 37.7 31.4 71.3 62.2
Amortization 61.0 59.6 132.9 123.1
Loss on extinguishment of borrowings related to variable interest entities 3.8 0.0 3.8 0.0
Other operating costs and expenses 195.8 203.4 403.4 413.8
Total benefits and expenses 916.5 928.6 1,816.2 1,902.6
Income before income taxes 129.8 128.5 237.9 225.2
Income tax expense on period income 27.6 45.1 51.4 79.5
Net income $ 102.2 $ 83.4 $ 186.5 $ 145.7
Basic:        
Weighted average shares outstanding (in shares) 166,098,000 170,556,000 166,579,000 171,994,000
Net income (in dollars per share) $ 0.62 $ 0.49 $ 1.12 $ 0.85
Diluted:        
Weighted average shares outstanding (in shares) 167,978,000 172,352,000 168,828,000 173,708,000
Net income (in dollars per share) $ 0.61 $ 0.48 $ 1.10 $ 0.84
v3.10.0.1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Statement of Comprehensive Income [Abstract]        
Net income $ 102.2 $ 83.4 $ 186.5 $ 145.7
Other comprehensive income, before tax:        
Unrealized gains (losses) for the period (461.3) 457.8 (1,115.0) 673.6
Adjustment to present value of future profits and deferred acquisition costs 33.0 (31.3) 88.7 (23.5)
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized 191.4 (160.0) 403.0 (212.0)
Reclassification adjustments:        
For net realized investment gains included in net income (11.3) (11.2) (11.7) (16.3)
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income 0.4 0.3 0.4 0.3
Other comprehensive income (loss) before tax (247.8) 255.6 (634.6) 422.1
Income tax (expense) benefit related to items of accumulated other comprehensive income (loss) 53.7 (90.7) 139.0 (150.0)
Other comprehensive income (loss), net of tax (194.1) 164.9 (495.6) 272.1
Comprehensive income (loss) $ (91.9) $ 248.3 $ (309.1) $ 417.8
v3.10.0.1
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - USD ($)
$ in Millions
Total
Common stock and additional paid-in capital
Accumulated other comprehensive income
Retained earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Cumulative effect of accounting change $ 0.3 $ 0.9   $ (0.6)
Balance, beginning of period at Dec. 31, 2016 4,486.9 3,213.8 $ 622.4 650.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 145.7     145.7
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) 269.4   269.4  
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) 2.7   2.7  
Cost of common stock repurchased (111.9) (111.9)    
Dividends on common stock (29.4)     (29.4)
Stock options, restricted stock and performance units 15.6 15.6    
Balance, end of period at Jun. 30, 2017 4,779.3 3,118.4 894.5 766.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Cumulative effect of accounting change 0.0 0.0 (16.3) 16.3
Balance, beginning of period at Dec. 31, 2017 4,847.5 3,075.0 1,212.1 560.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 186.5     186.5
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit)) (495.4)   (495.4)  
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit)) (0.2)   (0.2)  
Cost of common stock repurchased (60.5) (60.5)    
Dividends on common stock (32.0)     (32.0)
Stock options, restricted stock and performance units 9.0 9.0    
Balance, end of period at Jun. 30, 2018 $ 4,454.9 $ 3,023.5 $ 700.2 $ 731.2
v3.10.0.1
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) (Parenthetical) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Statement of Stockholders' Equity [Abstract]    
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit) $ (138.9) $ 148.5
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit) $ (0.1) $ 1.5
v3.10.0.1
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Insurance policy income $ 1,243.5 $ 1,257.2
Net investment income 646.9 629.4
Fee revenue and other income 32.8 23.3
Insurance policy benefits (1,032.8) (1,007.9)
Interest expense (65.6) (61.0)
Deferrable policy acquisition costs (125.6) (126.6)
Other operating costs (425.1) (394.7)
Income taxes (30.4) (33.7)
Net cash from operating activities 243.7 286.0
Cash flows from investing activities:    
Sales of investments 2,012.9 880.4
Maturities and redemptions of investments 1,412.0 1,808.5
Purchases of investments (3,689.1) (2,584.8)
Net sales of trading securities 36.3 74.8
Other (13.0) (12.5)
Net cash provided (used) by investing activities (240.9) 166.4
Cash flows from financing activities:    
Issuance of common stock 0.8 5.4
Payments to repurchase common stock (67.5) (111.1)
Common stock dividends paid (31.9) (29.3)
Amounts received for deposit products 753.2 727.8
Withdrawals from deposit products (671.3) (638.9)
Issuance of investment borrowings:    
Federal Home Loan Bank 0.0 132.0
Related to variable interest entities 277.6 30.7
Payments on investment borrowings:    
Federal Home Loan Bank (0.4) (132.4)
Related to variable interest entities (274.9) (164.9)
Net cash used by financing activities (14.4) (180.7)
Net increase (decrease) in cash and cash equivalents (11.6) 271.7
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period 757.3 668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period $ 745.7 $ 939.9
v3.10.0.1
BUSINESS AND BASIS OF PRESENTATION
6 Months Ended
Jun. 30, 2018
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 2017 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 2018 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.

The balance sheet at December 31, 2017, 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.
v3.10.0.1
INVESTMENTS
6 Months Ended
Jun. 30, 2018
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 net investment income (classified as investment income from policyholder and other special-purpose portfolios)).

Our 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 certain reinsurance agreements; 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 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.

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 June 30, 2018 and December 31, 2017, were as follows (dollars in millions):

 
June 30,
2018
 
December 31,
2017
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized
$
2.4

 
$
2.6

Net unrealized gains on all other investments
1,080.2

 
2,227.3

Adjustment to present value of future profits (a)
(82.4
)
 
(94.0
)
Adjustment to deferred acquisition costs
(100.4
)
 
(292.6
)
Adjustment to insurance liabilities
(7.5
)
 
(295.8
)
Deferred income tax liabilities
(192.1
)
 
(335.4
)
Accumulated other comprehensive income
$
700.2

 
$
1,212.1

________
(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.

At June 30, 2018, adjustments to the present value of future profits, deferred acquisition costs, insurance liabilities and deferred tax assets included $(75.8) million, $(28.2) million, $(7.5) million and $25.1 million, respectively, for premium deficiencies that would exist on certain blocks of business (primarily long-term care products) if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields.

At June 30, 2018, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair value
 
Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities
$
13,723.1

 
$
897.7

 
$
(225.4
)
 
$
14,395.4

 
$

United States Treasury securities and obligations of United States government corporations and agencies
150.9

 
24.5

 
(.4
)
 
175.0

 

States and political subdivisions
1,880.8

 
185.1

 
(2.5
)
 
2,063.4

 

Debt securities issued by foreign governments
84.4

 
.5

 
(3.5
)
 
81.4

 

Asset-backed securities
2,600.8

 
164.6

 
(7.2
)
 
2,758.2

 

Collateralized debt obligations
457.1

 
.8

 
(1.9
)
 
456.0

 

Commercial mortgage-backed securities
1,468.3

 
15.9

 
(20.3
)
 
1,463.9

 

Mortgage pass-through securities
1.6

 
.1

 

 
1.7

 

Collateralized mortgage obligations
622.5

 
66.8

 
(3.4
)
 
685.9

 
(.8
)
Total fixed maturities, available for sale
$
20,989.5

 
$
1,356.0

 
$
(264.6
)
 
$
22,080.9

 
$
(.8
)


At December 31, 2017, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions):
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair value
 
Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities
$
13,286.3

 
$
1,699.1

 
$
(27.0
)
 
$
14,958.4

 
$

United States Treasury securities and obligations of United States government corporations and agencies
146.4

 
31.5

 
(.2
)
 
177.7

 

States and political subdivisions
1,821.9

 
234.8

 
(.4
)
 
2,056.3

 

Debt securities issued by foreign governments
79.5

 
3.8

 
(.2
)
 
83.1

 

Asset-backed securities
3,085.9

 
172.6

 
(4.1
)
 
3,254.4

 

Collateralized debt obligations
257.1

 
2.3

 

 
259.4

 

Commercial mortgage-backed securities
1,354.0

 
33.8

 
(10.3
)
 
1,377.5

 

Mortgage pass-through securities
1.8

 
.2

 

 
2.0

 

Collateralized mortgage obligations
669.2

 
73.2

 
(.3
)
 
742.1

 
(1.0
)
Total fixed maturities, available for sale
$
20,702.1

 
$
2,251.3

 
$
(42.5
)
 
$
22,910.9

 
$
(1.0
)
Equity securities
$
420.0

 
$
23.6

 
$
(3.0
)
 
$
440.6

 
 


The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at June 30, 2018, 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 debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.

 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
378.5

 
$
384.9

Due after one year through five years
1,666.3

 
1,720.7

Due after five years through ten years
1,828.2

 
1,860.5

Due after ten years
11,966.2

 
12,749.1

Subtotal
15,839.2

 
16,715.2

Structured securities
5,150.3

 
5,365.7

Total fixed maturities, available for sale
$
20,989.5

 
$
22,080.9



The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2017, by contractual maturity.

 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
328.1

 
$
335.1

Due after one year through five years
1,947.3

 
2,052.3

Due after five years through ten years
1,508.7

 
1,601.3

Due after ten years
11,550.0

 
13,286.8

Subtotal
15,334.1

 
17,275.5

Structured securities
5,368.0

 
5,635.4

Total fixed maturities, available for sale
$
20,702.1

 
$
22,910.9


 
Net Realized Investment Gains (Losses)

The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Gross realized gains on sale
$
31.9

 
$
21.1

 
$
40.1

 
$
28.1

Gross realized losses on sale
(17.8
)
 
(5.2
)
 
(25.5
)
 
(7.9
)
Impairments:
 
 
 
 
 
 
 
Total other-than-temporary impairment losses

 
(3.6
)
 

 
(6.8
)
Other-than-temporary impairment losses recognized in accumulated other comprehensive income

 
(.9
)
 

 
(.9
)
Net impairment losses recognized

 
(4.5
)
 

 
(7.7
)
Net realized investment gains from fixed maturities
14.1

 
11.4

 
14.6

 
12.5

Equity securities, including change in fair value (a)
2.2

 

 
(10.3
)
 
1.9

Mortgage loans

 

 

 
1.0

Impairments of other investments

 
(.6
)
 

 
(5.8
)
Loss on dissolution of a variable interest entity

 
(3.7
)
 

 
(3.7
)
Other (a)
(5.3
)
 
8.1

 
(8.5
)
 
17.2

Net realized investment gains (losses)
$
11.0

 
$
15.2

 
$
(4.2
)
 
$
23.1


_________________
(a)
Changes in the estimated fair value of trading securities that we have elected the fair value option and equity securities (and are still held as of the end of the respective periods) were $(4.2) million and $9.9 million for the six months ended June 30, 2018 and 2017, respectively.

During the first six months of 2018, we recognized net realized investment losses of $4.2 million, which were comprised of: (i) $11.8 million of net gains from the sales of investments; (ii) $10.3 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 $1.5 million; and (iv) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $4.2 million.

During the first six months of 2017, we recognized net realized investment gains of $23.1 million, which were comprised of: (i) $28.7 million of net gains from the sales of investments; (ii) a $3.7 million loss on the dissolution of a variable interest entity ("VIE"); (iii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $9.5 million; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.1 million; and (v) $13.5 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

During the first six months of 2017, a VIE that was required to be consolidated was dissolved. A loss of $3.7 million was recognized representing the difference between the borrowings of such VIE and the contractual distributions required following the liquidation of the underlying assets.

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.

During the first six months of 2018, the $25.5 million of gross realized losses on sales of $760.2 million of fixed maturity securities, available for sale included: (i) $19.0 million related to various corporate securities; (ii) $3.8 million related to commercial mortgage-backed securities; and (iii) $2.7 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; (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.

There were no impairment losses recognized in the first six months of 2018.

During the first six months of 2017, we recognized $13.5 million of impairment losses recorded in earnings which included: (i) $6.3 million of writedowns on fixed maturities in the energy sector; (ii) $5.2 million of writedowns related to a real estate investment; and (iii) $2.0 million of writedowns on other investments.

We regularly evaluate all of our investments with unrealized losses for possible impairment.  Our assessment of whether unrealized losses are "other than temporary" requires significant judgment.  Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is 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 is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will 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 may 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 manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security.  If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings.  If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated.  We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security.  The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating-rate security.  The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security.

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 from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond-specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis.  We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming.

The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment.  The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums.  As of June 30, 2018, other-than-temporary impairments included in accumulated other comprehensive income totaled $.8 million (before taxes and related amortization).

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 and six months ended June 30, 2018 and 2017 (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Credit losses on fixed maturity securities, available for sale, beginning of period
$
(2.8
)
 
$
(5.4
)
 
$
(2.8
)
 
$
(5.5
)
Add: credit losses on other-than-temporary impairments not previously recognized

 

 

 

Less: credit losses on securities sold
2.5

 
1.5

 
2.5

 
1.6

Less: credit losses on securities impaired due to intent to sell (a)

 

 

 

Add: credit losses on previously impaired securities

 
(1.0
)
 

 
(1.0
)
Less: increases in cash flows expected on previously impaired securities

 

 

 

Credit losses on fixed maturity securities, available for sale, end of period
$
(.3
)
 
$
(4.9
)
 
$
(.3
)
 
$
(4.9
)
__________
(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.

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 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 June 30, 2018 (dollars in millions):

 
 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
 
$
25.4

 
$
(.3
)
 
$
.7

 
$

 
$
26.1

 
$
(.3
)
States and political subdivisions
 
91.9

 
(2.1
)
 
14.4

 
(.4
)
 
106.3

 
(2.5
)
Debt securities issued by foreign governments
 
54.1

 
(3.3
)
 
8.0

 
(.2
)
 
62.1

 
(3.5
)
Corporate securities
 
4,235.1

 
(193.8
)
 
259.2

 
(31.7
)
 
4,494.3

 
(225.5
)
Asset-backed securities
 
570.7

 
(5.1
)
 
60.4

 
(2.1
)
 
631.1

 
(7.2
)
Collateralized debt obligations
 
279.3

 
(1.9
)
 

 

 
279.3

 
(1.9
)
Commercial mortgage-backed securities
 
453.8

 
(7.7
)
 
187.4

 
(12.6
)
 
641.2

 
(20.3
)
Mortgage pass-through securities
 
.1

 

 

 

 
.1

 

Collateralized mortgage obligations
 
104.5

 
(3.4
)
 
2.0

 

 
106.5

 
(3.4
)
Total fixed maturities, available for sale
 
$
5,814.9

 
$
(217.6
)
 
$
532.1

 
$
(47.0
)
 
$
6,347.0

 
$
(264.6
)

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, 2017 (dollars in millions):

 
 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
 
$
28.2

 
$
(.2
)
 
$
.7

 
$

 
$
28.9

 
$
(.2
)
States and political subdivisions
 
18.3

 
(.1
)
 
14.9

 
(.3
)
 
33.2

 
(.4
)
Debt securities issued by foreign governments
 
7.7

 
(.1
)
 
5.4

 
(.1
)
 
13.1

 
(.2
)
Corporate securities
 
470.5

 
(6.8
)
 
359.7

 
(20.2
)
 
830.2

 
(27.0
)
Asset-backed securities
 
601.4

 
(2.0
)
 
122.2

 
(2.1
)
 
723.6

 
(4.1
)
Collateralized debt obligations
 
3.0

 

 

 

 
3.0

 

Commercial mortgage-backed securities
 
276.8

 
(1.7
)
 
218.2

 
(8.6
)
 
495.0

 
(10.3
)
Collateralized mortgage obligations
 
20.5

 
(.2
)
 
11.5

 
(.1
)
 
32.0

 
(.3
)
Total fixed maturities, available for sale
 
$
1,426.4

 
$
(11.1
)
 
$
732.6

 
$
(31.4
)
 
$
2,159.0

 
$
(42.5
)
Equity securities
 
$
58.7

 
$
(1.7
)
 
$
21.2

 
$
(1.3
)
 
$
79.9

 
$
(3.0
)


Based on management's current assessment of investments with unrealized losses at June 30, 2018, 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.
v3.10.0.1
EARNINGS PER SHARE
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
EARNINGS PER SHARE

A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Net income for basic and diluted earnings per share
$
102.2

 
$
83.4

 
$
186.5

 
$
145.7

Shares:
 

 
 

 
 
 
 
Weighted average shares outstanding for basic earnings per share
166,098

 
170,556

 
166,579

 
171,994

Effect of dilutive securities on weighted average shares:
 

 
 

 
 
 
 
Stock options, restricted stock and performance units
1,880

 
1,796

 
2,249

 
1,714

Weighted average shares outstanding for diluted earnings per share
167,978

 
172,352

 
168,828

 
173,708



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).
v3.10.0.1
BUSINESS SEGMENTS
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
BUSINESS SEGMENTS
BUSINESS SEGMENTS

The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. We also have a long-term care in run-off segment which is comprised of certain long-term care business that was recaptured in 2016 due to the termination of certain reinsurance agreements.

On August 1, 2018, the Company announced that its wholly-owned subsidiary, Bankers Life and Casualty Company ("Bankers Life"), has entered into an agreement with Wilton Reassurance Company ("Wilton Re") to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Subsequent Events". In anticipation of the reinsurance agreement, the Company will reorganize its business segments to move the block to be ceded from the “Bankers Life segment” to the “Long-term care in run-off segment” in the third quarter of 2018.

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, 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 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):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy income:
 
 
 
 
 
 
 
Annuities
$
4.8

 
$
5.8

 
$
9.4

 
$
11.8

Health
300.5

 
308.1

 
602.7

 
619.7

Life
105.0

 
105.2

 
208.9

 
206.7

Net investment income (a)
259.5

 
256.9

 
497.4

 
529.8

Fee revenue and other income (a)
10.6

 
10.6

 
30.2

 
21.2

Total Bankers Life revenues
680.4

 
686.6

 
1,348.6

 
1,389.2

Washington National:
 

 
 

 
 
 
 
Insurance policy income:
 

 
 

 
 
 
 
Annuities
.2

 
.5

 
.7

 
1.1

Health
164.0

 
160.1

 
327.8

 
319.9

Life
6.8

 
6.9

 
13.5

 
13.6

Net investment income (a)
64.1

 
66.5

 
129.5

 
133.9

Fee revenue and other income (a)
.3

 
.2

 
.5

 
.5

Total Washington National revenues
235.4

 
234.2

 
472.0

 
469.0

Colonial Penn:
 

 
 

 
 
 
 
Insurance policy income:
 

 
 

 
 
 
 
Health
.4

 
.5

 
.9

 
1.1

Life
74.1

 
72.5

 
147.7

 
144.9

Net investment income (a)
11.3

 
11.2

 
22.3

 
22.1

Fee revenue and other income (a)
.4

 
.4

 
.9

 
.6

Total Colonial Penn revenues
86.2

 
84.6

 
171.8

 
168.7

Long-term care in run-off:
 
 
 
 
 
 
 
Insurance policy income - health
4.0

 
4.5

 
8.1

 
9.1

Net investment income (a)                                                                                           
8.6

 
10.0

 
17.0

 
19.7

Total Long-term care in run-off revenues
12.6

 
14.5

 
25.1

 
28.8

Corporate operations:
 

 
 

 
 
 
 
Net investment income
4.0

 
7.4

 
5.2

 
17.8

Fee and other income
1.5

 
2.3

 
3.3

 
4.7

Total corporate revenues
5.5

 
9.7

 
8.5

 
22.5

Total revenues
$
1,020.1

 
$
1,029.6

 
$
2,026.0

 
$
2,078.2



(continued on next page)

(continued from previous page)
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Expenses:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy benefits
$
426.1

 
$
419.3

 
$
837.2

 
$
870.5

Amortization
40.0

 
41.3

 
87.0

 
87.6

Interest expense on investment borrowings
7.5

 
4.8

 
13.6

 
9.0

Other operating costs and expenses
110.7

 
108.6

 
225.2

 
219.8

Total Bankers Life expenses
584.3

 
574.0

 
1,163.0

 
1,186.9

Washington National:
 

 
 

 
 
 
 
Insurance policy benefits
142.5

 
145.3

 
280.2

 
292.0

Amortization
14.4

 
15.3

 
28.9

 
29.6

Interest expense on investment borrowings
2.7

 
1.5

 
4.8

 
2.8

Other operating costs and expenses
50.4

 
48.5

 
98.4

 
97.5

Total Washington National expenses
210.0

 
210.6

 
412.3

 
421.9

Colonial Penn:
 

 
 

 
 
 
 
Insurance policy benefits
50.6

 
50.4

 
107.3

 
103.1

Amortization
4.1

 
4.0

 
8.7

 
8.0

Interest expense on investment borrowings
.4

 
.2

 
.7

 
.4

Other operating costs and expenses
25.7

 
22.0

 
51.2

 
49.5

Total Colonial Penn expenses
80.8

 
76.6

 
167.9

 
161.0

Long-term care in run-off:
 
 
 
 
 
 
 
Insurance policy benefits                                                                                 
9.4

 
12.0

 
21.4

 
25.2

Other operating costs and expenses                                                                                 
.1

 
.8

 
.6

 
1.5

Total Long-term care in run-off expenses
9.5

 
12.8

 
22.0

 
26.7

Corporate operations:
 

 
 

 
 
 
 
Interest expense on corporate debt
11.9

 
11.6

 
23.8

 
23.1

Other operating costs and expenses
19.5

 
22.9

 
38.0

 
44.6

Total corporate expenses
31.4

 
34.5

 
61.8

 
67.7

Total expenses
916.0

 
908.5

 
1,827.0

 
1,864.2

Pre-tax operating earnings by segment:
 

 
 

 
 
 
 
Bankers Life
96.1

 
112.6

 
185.6

 
202.3

Washington National
25.4

 
23.6

 
59.7

 
47.1

Colonial Penn
5.4

 
8.0

 
3.9

 
7.7

Long-term care in run-off
3.1

 
1.7

 
3.1

 
2.1

Corporate operations
(25.9
)
 
(24.8
)
 
(53.3
)
 
(45.2
)
Pre-tax operating earnings
$
104.1

 
$
121.1

 
$
199.0

 
$
214.0

___________________
(a)
It is not practicable to provide additional components of revenue by product or services.

A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income (loss) is as follows (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Total segment revenues                                                                                            
$
1,020.1

 
$
1,029.6

 
$
2,026.0

 
$
2,078.2

Net realized investment gains (losses)                                    
11.0

 
15.2

 
(4.2
)
 
23.1

Revenues related to VIEs
15.2

 
12.3

 
32.3

 
26.5

Consolidated revenues                                                                                       
1,046.3

 
1,057.1

 
2,054.1

 
2,127.8

 
 
 
 
 
 
 
 
Total segment expenses                                                                                            
916.0

 
908.5

 
1,827.0

 
1,864.2

Insurance policy benefits - fair value changes in embedded derivative liabilities
(10.4
)
 
7.2

 
(41.3
)
 
12.7

Amortization related to fair value changes in embedded derivative liabilities
2.1

 
(1.3
)
 
7.9

 
(2.4
)
Amortization related to net realized investment gains
.4

 
.3

 
.4

 
.3

Expenses related to VIEs
19.4

 
13.9

 
33.2

 
27.8

Fair value changes related to agent deferred compensation plan
(11.0
)


 
(11.0
)
 

Consolidated expenses                                                                                       
916.5

 
928.6

 
1,816.2

 
1,902.6

Income before tax
129.8

 
128.5

 
237.9

 
225.2

Income tax expense on period income
27.6

 
45.1

 
51.4

 
79.5

Net income
$
102.2

 
$
83.4

 
$
186.5

 
$
145.7

v3.10.0.1
ACCOUNTING FOR DERIVATIVES
6 Months Ended
Jun. 30, 2018
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):

 
 
Fair value
 
 
June 30,
2018
 
December 31, 2017
Assets:
 
 
 
 
Other invested assets:
 
 
 
 
Fixed index call options
 
$
126.0

 
$
170.2

Reinsurance receivables
 
(5.6
)
 
(1.4
)
Total assets
 
$
120.4

 
$
168.8

Liabilities:
 
 
 
 
Future policy benefits:
 
 
 
 
Fixed index products
 
$
1,333.3

 
$
1,334.8

Total liabilities
 
$
1,333.3

 
$
1,334.8



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 was $3.0 billion at both June 30, 2018 and December 31, 2017.

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 $124 million in underlying investments held by the ceding reinsurer.

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):

 
 
Three months ended
 
Six months ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
Net investment income (loss) from policyholder and other special-purpose portfolios:
 
 
 
 
 
 
 
 
Fixed index call options
 
$
13.4

 
$
20.3

 
$
7.8

 
$
64.8

Net realized gains (losses):
 
 
 
 
 
 
 
 
Embedded derivative related to modified coinsurance agreement
 
(1.5
)
 
1.4

 
(4.2
)
 
2.1

Insurance policy benefits:
 
 
 
 
 
 
 
 
Embedded derivative related to fixed index annuities
 
16.0

 
2.5

 
53.0

 
4.8

Total
 
$
27.9

 
$
24.2

 
$
56.6

 
$
71.7



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 June 30, 2018, 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 June 30, 2018 and December 31, 2017 (dollars in millions):

 
 
 
 
 
 
 
 
 
Gross amounts not offset in the balance sheet
 
 
 
 
 
Gross amounts recognized
 
Gross amounts offset in the balance sheet
 
Net amounts of assets presented in the balance sheet
 
Financial instruments
 
Cash collateral received
 
Net amount
June 30, 2018:
 
 
 
Fixed index call options
 
$
126.0

 
$

 
$
126.0

 
$

 
$

 
$
126.0

December 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed index call options
 
170.2

 

 
170.2

 

 

 
170.2

v3.10.0.1
REINSURANCE
6 Months Ended
Jun. 30, 2018
Reinsurance Disclosures [Abstract]  
REINSURANCE
REINSURANCE

The cost of reinsurance ceded totaled $26.1 million and $26.5 million in the second quarters of 2018 and 2017, respectively, and $50.6 million and $52.8 million in the first six months of 2018 and 2017, respectively.  We deduct this cost from insurance policy income.  Reinsurance recoveries netted against insurance policy benefits totaled $20.8 million and $22.4 million in the second quarters of 2018 and 2017, respectively, and $44.2 million and $46.5 million in the first six months of 2018 and 2017, 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 $7.0 million and $7.7 million in the second quarters of 2018 and 2017, respectively, and $14.2 million and $15.7 million in the first six months of 2018 and 2017, respectively. Insurance policy benefits related to reinsurance assumed totaled $8.7 million and $11.5 million in the second quarters of 2018 and 2017, respectively, and $18.0 million and $23.5 million in the first six months of 2018 and 2017, respectively.
v3.10.0.1
INCOME TAXES
6 Months Ended
Jun. 30, 2018
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 are as follows (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Current tax expense
$
15.4

 
$
22.0

 
$
20.7

 
$
42.6

Deferred tax expense
12.2

 
23.1

 
30.7

 
36.9

Income tax expense calculated based on estimated annual effective tax rate
$
27.6

 
$
45.1

 
$
51.4

 
$
79.5



On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Reform Act") was signed into law and enacted a broad range of changes to the Internal Revenue Code (the "Code") including individual and corporate reforms and numerous changes to U.S. international tax provisions. The Tax Reform Act reduces the corporate tax rate to 21 percent from 35 percent effective January 1, 2018, and makes significant changes to the taxation of life insurance companies. Among other things, the Tax Reform Act modifies the computation of life insurance reserves, increases the capitalization rate and extends the amortization period for policy acquisition costs, imposes limitations on the deductibility of performance-based compensation to "covered employees" and interest expense, and allows for the expensing of certain capital expenditures. For net operating losses ("NOLs") arising after December 31, 2017, the Tax Reform Act limits the ability to utilize NOL carryforwards to 80% of taxable income. In addition, NOLs arising after 2017 can be carried forward indefinitely, but carryback is prohibited. As a result of the reduction in the federal corporate income tax rate, we reduced the value of our net deferred tax assets by $172.5 million (net of the reduction in the valuation allowance for deferred tax assets) which was recorded as additional income tax expense in the fourth quarter of 2017.

The $172.5 million adjustment to our net deferred tax assets was a provisional amount as defined in the SEC's Staff Accounting Bulletin No. 118 ("SAB 118"), issued in December 2017 to address complexities in completing the calculations resulting from the Tax Reform Act. Although we were able to make a reasonable estimate of the impact of the Tax Reform Act based on the information available, we have not analyzed the calculations in sufficient detail to complete the accounting process, including the analysis of the calculations of life insurance tax reserves and future taxable income used to estimate the deferred tax valuation allowance. SAB 118 provides guidance on accounting for the effects of the Tax Reform Act when our accounting process is incomplete but we are able to determine a reasonable estimate. A final determination is required to be made within a measurement period not to extend beyond one year from the enactment date of the Tax Reform Act. We continue to analyze our estimate of the impact of the Tax Reform Act and expect the process to be completed in the fourth quarter of 2018.

A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, before discrete items, reflected in the consolidated statement of operations is as follows:
 
 
Six months ended
 
June 30,
 
2018
 
2017
U.S. statutory corporate rate
21.0
 %
 
35.0
 %
Non-taxable income and nondeductible benefits, net
(.2
)
 
(1.4
)
State taxes
.8

 
1.7

Estimated annual effective tax rate
21.6
 %
 
35.3
 %


The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):

 
June 30,
2018
 
December 31,
2017
Deferred tax assets:
 
 
 
Net federal operating loss carryforwards
$
468.7

 
$
489.6

Net state operating loss carryforwards
9.1

 
9.3

Investments

 
4.3

Insurance liabilities
405.3

 
415.8

Other
47.5

 
48.9

Gross deferred tax assets
930.6

 
967.9

Deferred tax liabilities:
 

 
 

Investments
(3.3
)
 

Present value of future profits and deferred acquisition costs
(159.6
)
 
(165.4
)
Accumulated other comprehensive income
(194.2
)
 
(337.2
)
Gross deferred tax liabilities
(357.1
)
 
(502.6
)
Net deferred tax assets before valuation allowance
573.5

 
465.3

Valuation allowance
(89.1
)
 
(89.1
)
Net deferred tax assets
484.4

 
376.2

Current income taxes prepaid (accrued)
.4

 
(9.3
)
Income tax assets, net
$
484.8

 
$
366.9



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. We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income of the appropriate type during the periods in which our temporary differences become deductible and before our NOLs expire.

Based on our assessment, it appears more likely than not that $484.4 million of our net deferred tax assets of $573.5 million will be realized through future taxable earnings. Accordingly, we have established a deferred tax valuation allowance of $89.1 million at June 30, 2018 ($77.4 million of which relates to our net federal operating loss carryforwards and $11.7 million relates to state operating loss carryforwards). We will continue to assess the need for a valuation allowance in the future. If future results are less than projected, an increase to the valuation allowance may be required to reduce the deferred tax asset, which could have a material impact on our results of operations in the period in which it is recorded.
 
We use a deferred tax valuation model to assess the need for a valuation allowance. 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 and the recapture of business previously ceded. Our estimates of future taxable income are based on evidence we consider to be objective and verifiable.

Our projection of future taxable income for purposes of determining the valuation allowance is based on our adjusted average annual taxable income which is assumed to increase by 3 percent for the next five years, and level taxable income is assumed thereafter. In the projections used for our analysis, our adjusted average taxable income of approximately $345 million consisted of $85 million of non-life taxable income and $260 million of life taxable income.

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).  This limitation is the primary reason a valuation allowance for NOLs is required. 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 (2.31 percent at June 30, 2018), 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 June 30, 2018, we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs.

As of June 30, 2018, we had $2.2 billion of federal NOLs (all of which were non-life NOLs). The following table summarizes the expiration dates of our loss carryforwards (dollars in millions):

 
 
Net operating loss
Year of expiration
 
carryforwards
2023
 
$
1,645.3

2025
 
85.2

2026
 
149.9

2027
 
10.8

2028
 
80.3

2029
 
213.2

2030
 
.3

2031
 
.2

2032
 
44.4

2033
 
.6

2034
 
.9

2035
 
.8

Total federal NOLs
 
$
2,231.9



At June 30, 2018, we also had deferred tax assets related to NOLs for state income taxes of $9.1 million.  The related state NOLs are available to offset future state taxable income in certain states through 2025.

All of the life NOLs were utilized by December 31, 2016. Accordingly, we began making estimated federal tax payments equal to the prescribed federal tax rate applied to 65 percent of our life insurance company taxable income due to the limitations on the extent to which we can use non-life NOLs to offset life insurance company taxable income. Under current law, we will continue to pay tax on 65 percent of our life insurance company taxable income until all non-life NOLs are utilized or expire.

The Company’s various state income tax returns are generally open for tax years beginning in 2014, based on individual state statutes of limitation. Generally, for tax years which generate NOLs, capital losses or tax credit carryforwards, the statute remains open until the expiration of the statute of limitations for the tax year in which such carryforwards are utilized.
v3.10.0.1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS
6 Months Ended
Jun. 30, 2018
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 June 30, 2018 and December 31, 2017 (dollars in millions):

 
June 30,
2018
 
December 31,
2017
4.500% Senior Notes due May 2020
$
325.0

 
$
325.0

5.250% Senior Notes due May 2025
500.0

 
500.0

Revolving Credit Agreement (as defined below)
100.0

 
100.0

Unamortized debt issue costs
(9.3
)
 
(10.4
)
Direct corporate obligations
$
915.7

 
$
914.6



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, resulting in $50.0 million available for additional borrowings. 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 the earlier of October 13, 2022 and the date that is six months prior to the maturity date of the 2020 Notes, which is November 30, 2019.

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% to 2.125%, in the case of loans at the eurodollar rate, and 0.375% to 1.125%, in the case of loans at the base rate. At June 30, 2018, the interest rate on the amounts outstanding under the Revolving Credit Agreement was 3.97 percent. 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 19.8 percent at June 30, 2018); (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 444 percent at June 30, 2018); and (iii) a minimum consolidated net worth of not less than the sum of (x) $2,674 million plus (y) 50.0% 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 $3,754.7 million at June 30, 2018 compared to the minimum requirement of $2,685.8 million).

Scheduled Repayment of our Direct Corporate Obligations

The scheduled repayment of our direct corporate obligations was as follows at June 30, 2018 (dollars in millions):

Year ending June 30,
 
2019
$

2020
425.0

2021

2022

2023

Thereafter
500.0

 
$
925.0

v3.10.0.1
INVESTMENT BORROWINGS
6 Months Ended
Jun. 30, 2018
Investment Borrowings [Abstract]  
INVESTMENT BORROWINGS
INVESTMENT BORROWINGS

Three of the Company's insurance subsidiaries (Washington National Insurance Company ("Washington National"), Bankers Life and Colonial Penn Life Insurance Company ("Colonial Penn")) are members of the Federal Home Loan Bank ("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.  New guidance effective January 1, 2018, requiring equity investments to be measured at fair value (as described in the note entitled "Recently Issued Accounting Standards - Adopted Accounting Standards") do not apply to FHLB common stock and prohibit such investments from being classified as equity securities subject to the new guidance. Accordingly, we have classified our investment in the FHLB common stock as other invested assets. In order to conform to the current presentation, the prior period investment in the FHLB common stock has been reclassified to other invested assets. At June 30, 2018, the carrying value of the FHLB common stock was $71.1 million.  As of June 30, 2018, 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 $2.0 billion at June 30, 2018, 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):

Amount
 
Maturity
 
Interest rate at
borrowed
 
date
 
June 30, 2018
$
50.0

 
January 2019
 
Variable rate – 2.768%
50.0

 
February 2019
 
Variable rate – 2.420%
100.0

 
March 2019
 
Variable rate – 2.565%
21.8

 
July 2019
 
Variable rate – 2.578%
15.0

 
October 2019
 
Variable rate – 2.879%
50.0

 
May 2020
 
Variable rate – 2.593%
21.8

 
June 2020
 
Fixed rate – 1.960%
25.0

 
September 2020
 
Variable rate – 2.960%
100.0

 
September 2020
 
Variable rate – 2.751%
50.0

 
September 2020
 
Variable rate – 2.762%
75.0

 
September 2020
 
Variable rate – 2.454%
100.0

 
October 2020
 
Variable rate – 2.431%
50.0

 
December 2020
 
Variable rate – 2.701%
100.0

 
July 2021
 
Variable rate – 2.898%
100.0

 
July 2021
 
Variable rate – 2.868%
28.2

 
August 2021
 
Fixed rate – 2.550%
57.7

 
August 2021
 
Variable rate - 2.893%
125.0

 
August 2021
 
Variable rate – 2.571%
50.0

 
September 2021
 
Variable rate – 2.859%
22.0

 
May 2022
 
Variable rate – 2.668%
100.0

 
May 2022
 
Variable rate – 2.406%
10.0

 
June 2022
 
Variable rate – 2.941%
50.0

 
July 2022
 
Variable rate – 2.707%
50.0

 
July 2022
 
Variable rate – 2.739%
50.0

 
July 2022
 
Variable rate – 2.739%
50.0

 
August 2022
 
Variable rate – 2.753%
50.0

 
December 2022
 
Variable rate – 2.600%
50.0

 
December 2022
 
Variable rate – 2.600%
24.3

 
March 2023
 
Fixed rate – 2.160%
20.5

 
June 2025
 
Fixed rate – 2.940%
$
1,646.3

 
 
 
 


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 June 30, 2018, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $1.1 million.

Interest expense of $19.1 million and $12.2 million in the first six months of 2018 and 2017, respectively, was recognized related to total borrowings from the FHLB.
v3.10.0.1
CHANGES IN COMMON STOCK
6 Months Ended
Jun. 30, 2018
Stockholders' Equity Note [Abstract]  
CHANGES IN COMMON STOCK
CHANGES IN COMMON STOCK

Changes in the number of shares of common stock outstanding were as follows (shares in thousands):

Balance, December 31, 2017
166,858

 
Treasury stock purchased and retired
(2,998
)
 
Stock options exercised
132

(a)
Restricted and performance stock vested
441

(b)
Balance, June 30, 2018
164,433

 
____________________
(a)
Such amount was reduced by 69 thousand shares which were tendered to the Company for the payment of the exercise price and required federal and state tax withholdings.
(b)
Such amount was reduced by 235 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock.

In the first six months of 2018, we repurchased 3.0 million shares of common stock for $60.5 million under our securities repurchase program. The Company had remaining repurchase authority of $325.1 million as of June 30, 2018.

In the first six months of 2018, dividends declared on common stock totaled $32.0 million ($0.19 per common share). In May 2018, the Company increased its quarterly common stock dividend to $0.10 per share from $0.09 per share.
v3.10.0.1
SALES INDUCEMENTS
6 Months Ended
Jun. 30, 2018
Deferred Sales Inducements [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 $2.8 million and $1.0 million during the six months ended June 30, 2018 and 2017, respectively.  Amounts amortized totaled $5.1 million and $4.3 million during the six months ended June 30, 2018 and 2017, respectively.  The unamortized balance of deferred sales inducements was $40.2 million and $42.5 million at June 30, 2018 and December 31, 2017, respectively.
v3.10.0.1
OUT-OF-PERIOD ADJUSTMENTS
6 Months Ended
Jun. 30, 2018
Other Liabilities Disclosure [Abstract]  
OUT-OF-PERIOD ADJUSTMENTS
OUT-OF-PERIOD ADJUSTMENTS

In the first six months of 2018, we recorded the net effect of out-of-period adjustments related to the calculation of certain insurance liabilities which increased insurance policy benefits by $2.5 million (of which, $1.4 million related to long-term care reserves in the Bankers Life segment and $1.1 million related to a closed block of payout annuities in the Colonial Penn segment), decreased tax expense by $.5 million and decreased our net income by $2.0 million (or 1 cent per diluted share). We evaluated these adjustments taking into account both qualitative and quantitative factors and considered the impact of these adjustments in relation to each period, as well as the periods in which they originated. The impact of recognizing these adjustments in prior years was not significant to any individual period. Management believes these adjustments are immaterial to the consolidated financial statements and all previously issued financial statements.
v3.10.0.1
RECENTLY ISSUED ACCOUNTING STANDARDS
6 Months Ended
Jun. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
RECENTLY ISSUED ACCOUNTING STANDARDS
RECENTLY ISSUED ACCOUNTING STANDARDS

Pending Accounting Standards

In February 2016, the Financial Accounting Standards Board (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 will be effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. 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.

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 will be effective for the Company for fiscal years beginning in 2020, including interim periods within the fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 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.

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 will be effective for the Company on January 1, 2020, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

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 will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has not yet determined the expected impact of adoption of this guidance on our 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 will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. 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 May 2014, the FASB issued authoritative guidance for recognizing revenue from contracts with customers. Certain contracts with customers are specifically excluded from this guidance, including insurance contracts. The core principle of the new guidance is that an entity should recognize revenue when it transfers promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance was effective for the Company on January 1, 2018. The adoption of this new guidance impacts the timing of certain revenues and expenses between quarters of a calendar year for various distribution and marketing agreements with other insurance companies pursuant to which Bankers Life's career agents distribute third party products including prescription drug and Medicare Advantage plans. The annual fee income earned during a calendar year will not change, but the amount recognized during each quarterly period will vary based on the sales of such products in each period. Furthermore, we are recognizing distribution expenses in the same period that the associated fee revenue is earned. Periods prior to the January 1, 2018 adoption date were not restated to reflect the new guidance. The impact of adoption was as follows (dollars in millions):
 
 
Three months ended June 30, 2018
 
 
 
 
Impact of
 
Amounts prior
 
 
As reported
 
adoption
 
to adoption
Fee revenue
 
$
6.6

 
$
(1.8
)
 
$
8.4

Distribution expense (included in other operating costs and expenses)
 
.9

 
(2.3
)
 
3.2

Impact on pre-tax income
 
$
5.7

 
$
.5

 
$
5.2



 
 
Six months ended June 30, 2018
 
 
 
 
Impact of
 
Amounts prior
 
 
As reported
 
adoption
 
to adoption
Fee revenue
 
$
22.4

 
$
5.5

 
$
16.9

Distribution expense (included in other operating costs and expenses)
 
12.4

 
6.5

 
5.9

Impact on pre-tax income
 
$
10.0

 
$
(1.0
)
 
$
11.0



In January 2016, the FASB issued authoritative guidance related to the recognition and measurement of financial assets and financial liabilities which made targeted improvements to GAAP as follows:

(i)
Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
(ii)
Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value.
(iii)
Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.
(iv)
Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.
(v)
Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.
(vi)
Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements.
(vii)
Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The guidance was effective for the Company on January 1, 2018. Accordingly, the Company recorded a cumulative effect adjustment to the balance sheet as of January 1, 2018, related to certain equity investments that are measured at fair value. The impact of adoption was as follows (dollars in millions):
 
January 1, 2018
 
Amounts prior to effect of adoption of authoritative guidance
 
Effect of adoption of authoritative guidance
 
As adjusted
 
 
 
 
 
 
Accumulated other comprehensive income
$
1,212.1

 
$
(16.3
)
 
$
1,195.8

Retained earnings
560.4

 
16.3

 
576.7

Total shareholders' equity
4,847.5

 

 
4,847.5


In August 2016, the FASB issued authoritative guidance related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of corporate-owned life insurance policies ("COLI"), distributions received from equity method investees, and others. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance resulted in reclassifications to certain cash receipts and payments within our consolidated statement of cash flows, but had no impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

In November 2016, the FASB issued authoritative guidance to address the diversity in practice that currently exists regarding the classification and presentation of changes in restricted cash on the statement of cash flows. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Entities are also required to disclose information about the nature of their restricted cash and restricted cash equivalents. Additionally, if cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item in the statement of financial position, entities will be required to present a reconciliation, either on the face of the statement of cash flows or disclosed in the notes, of the totals in the statement of cash flows to the related line item captions in the statement of financial position. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance impacted the presentation of our consolidated statement of cash flows and related cash flow disclosures, but did not have an impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

 
Six months ended
 
June 30, 2017
 
Amounts prior to effect of adoption of authoritative guidance
 
Restricted cash
 
COLI death benefits
 
Distributions received from equity method investments
 
As adjusted
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net investment income
$
618.7

 
$

 
$

 
$
10.7

 
$
629.4

Other operating costs
(391.5
)
 

 
(3.2
)
 

 
(394.7
)
Net cash flow from operating activities
278.5

 

 
(3.2
)
 
10.7

 
286.0

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Sales of investments
891.1

 

 

 
(10.7
)
 
880.4

Change in cash and cash equivalents held by variable interest entities
(201.8
)
 
201.8

 

 

 

Other
(15.7
)
 

 
3.2

 

 
(12.5
)
Net cash provided (used) by investing activities
(27.9
)
 
201.8

 
3.2

 
(10.7
)
 
166.4

 
 
 
 
 
 
 
 
 
 
Net increase in cash and cash equivalents
69.9

 
201.8

 

 

 
271.7

Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period
478.9

 
189.3

 

 

 
668.2

Cash and cash equivalents - unrestricted and held by variable interest entities, end of period
548.8

 
391.1

 

 

 
939.9



In May 2017, the FASB issued authoritative guidance related to which changes to the terms or conditions of a share-based award require an entity to apply modification accounting. The guidance was effective for the Company for fiscal years beginning after December 15, 2017. Early adoption was permitted, including adoption in an interim period. The guidance is to be applied prospectively to an award modified on or after the adoption date. The adoption of this guidance did not have a material impact to the Company's consolidated financial position, results of operations or cash flows.
v3.10.0.1
LITIGATION AND OTHER LEGAL PROCEEDINGS
6 Months Ended
Jun. 30, 2018
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 September 29, 2016, Washington National and Bankers Conseco Life Insurance Company ("BCLIC") commenced an arbitration proceeding seeking compensatory, consequential and punitive damages against Beechwood Re Ltd. ("BRe") based upon BRe’s incurable material breaches of the long-term care reinsurance agreements, conversion, fraud, and breaches of fiduciary duties and the obligation to deal honestly and in good faith. BRe filed a counterclaim against Washington National and BCLIC in the arbitration alleging damages relating to the reinsurance agreements and their termination. In addition, on September 29, 2016, a complaint was filed by BCLIC and Washington National in the United States District Court for the Southern District of New York, Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Moshe M. Feuer, Scott Taylor and David Levy, Case No. 16-cv-7646, alleging, among other claims, fraud/fraudulent concealment, and violation of the Racketeer Influenced and Corrupt Organizations Act. These allegations relate to the long-term care reinsurance agreements between BRe and Washington National and BCLIC, respectively, and emanate from the undisclosed relationships between and among the defendants (who were the principal owners and officers of BRe) and Platinum Partners, LP and its affiliates. On April 27, 2017, an amended complaint was filed adding Beechwood Capital Group, LLC as a defendant. On March 13, 2018, the District Court granted the motion that had been filed by Feuer, Taylor and Levy to compel arbitration of Washington National's and BCLIC's claims and the litigation is now stayed pending the outcome of the arbitration. Washington National and BCLIC intend to vigorously pursue their claims for damages and other remedies in the arbitration and the litigation described above.
By public notice dated July 26, 2017, the Cayman Islands Monetary Authority advised that, effective July 25, 2017, two individuals (the "Controllers") had been appointed pursuant to Section 24(2)(h) of the Cayman Islands Insurance Law to assume control of the affairs of BRe.  According to the public notice, effective with their appointment, the Controllers assumed immediate control of the affairs of BRe and have all the powers necessary to administer the affairs of BRe including power to terminate its insurance business.  The Controllers are responsible for assessing the financial position of BRe and submitting a report to the Cayman Islands Monetary Authority by a date to be specified.  We are in the process of assessing the potential impact of this action on the proceedings described in the foregoing paragraph.

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 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 39 states and the District of Columbia are currently participating in this examination.
v3.10.0.1
CONSOLIDATED STATEMENT OF CASH FLOWS
6 Months Ended
Jun. 30, 2018
Supplemental Cash Flow Elements [Abstract]  
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS

The following reconciles net income to net cash from operating activities (dollars in millions):

 
Six months ended
 
June 30,
 
2018
 
2017
Cash flows from operating activities:
 
 
 
Net income
$
186.5

 
$
145.7

Adjustments to reconcile net income to net cash from operating activities:
 
 
 

Amortization and depreciation
146.7

 
136.2

Income taxes
21.0

 
45.8

Insurance liabilities
94.4

 
222.8

Accrual and amortization of investment income
(58.9
)
 
(124.1
)
Deferral of policy acquisition costs
(125.6
)
 
(126.6
)
Net realized investment (gains) losses
4.2

 
(23.1
)
Loss on extinguishment of borrowings related to variable interest entities
3.8

 

Other
(28.4
)
 
9.3

Net cash from operating activities
$
243.7

 
$
286.0



Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):

 
Six months ended
 
June 30,
 
2018
 
2017
Stock options, restricted stock and performance units
$
14.1

 
$
12.1

v3.10.0.1
INVESTMENTS IN VARIABLE INTEREST ENTITIES
6 Months Ended
Jun. 30, 2018
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 insurance 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):
 
June 30, 2018
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
1,543.3

 
$

 
$
1,543.3

Notes receivable of VIEs held by insurance subsidiaries

 
(146.4
)
 
(146.4
)
Cash and cash equivalents held by variable interest entities
106.4

 

 
106.4

Accrued investment income
2.2

 

 
2.2

Income tax assets, net
3.3

 

 
3.3

Other assets
10.5

 
(7.4
)
 
3.1

Total assets
$
1,665.7

 
$
(153.8
)
 
$
1,511.9

Liabilities:
 

 
 

 
 

Other liabilities
$
116.8

 
$
(10.3
)
 
$
106.5

Borrowings related to variable interest entities
1,418.1

 

 
1,418.1

Notes payable of VIEs held by insurance subsidiaries
158.7

 
(158.7
)
 

Total liabilities
$
1,693.6

 
$
(169.0
)
 
$
1,524.6


 
December 31, 2017
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
1,526.9

 
$

 
$
1,526.9

Notes receivable of VIEs held by insurance subsidiaries

 
(155.5
)
 
(155.5
)
Cash and cash equivalents held by variable interest entities
178.9

 

 
178.9

Accrued investment income
2.6

 
(.1
)
 
2.5

Income tax assets, net
.7

 

 
.7

Other assets
10.0

 
(1.5
)
 
8.5

Total assets
$
1,719.1

 
$
(157.1
)
 
$
1,562.0

Liabilities:
 

 
 

 
 

Other liabilities
$
158.3

 
$
(4.4
)
 
$
153.9

Borrowings related to variable interest entities
1,410.7

 

 
1,410.7

Notes payable of VIEs held by insurance subsidiaries
167.6

 
(167.6
)
 

Total liabilities
$
1,736.6

 
$
(172.0
)
 
$
1,564.6



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 June 30, 2018, such loans had an amortized cost of $1,550.6 million; gross unrealized gains of $3.8 million; gross unrealized losses of $11.1 million; and an estimated fair value of $1,543.3 million.

The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at June 30, 2018, 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.
 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
5.1

 
$
5.0

Due after one year through five years
511.6

 
509.0

Due after five years through ten years
1,033.9

 
1,029.3

Total
$
1,550.6

 
$
1,543.3



During the first six months of 2018, the VIEs recognized net realized investment losses of $2.9 million from the sales of fixed maturities. During the first six months of 2017, the VIEs recognized net realized investment losses of $1.8 million, which were comprised of: (i) $2.3 million of net gains from the sales of fixed maturities; (ii) a $3.7 million loss on the dissolution of a VIE; and (iii) $.4 million of writedowns of investments for other than temporary declines in fair value recognized through net income.

At June 30, 2018, there were no investments held by the VIEs that were in default.

During the first six months of 2018, $44.0 million of investments held by VIEs were sold which resulted in gross investment losses (before income taxes) of $3.1 million. During the first six months of 2017, $72.8 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $1.8 million.

At June 30, 2018, the VIEs held: (i) investments with a fair value of $937.0 million and gross unrealized losses of $8.7 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $52.3 million and gross unrealized losses of $2.4 million that had been in an unrealized loss position for twelve months or greater.

At December 31, 2017, the VIEs held: (i) investments with a fair value of $445.4 million and gross unrealized losses of $4.9 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $28.4 million and gross unrealized losses of $1.7 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 debt obligations, commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations.  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 June 30, 2018, we held investments in various limited partnerships and hedge funds, in which we are not the primary beneficiary, totaling $508.6 million (classified as other invested assets).  At June 30, 2018, we had unfunded commitments to these partnerships and hedge funds totaling $252.1 million.  Our maximum exposure to loss on these investments is limited to the amount of our investment.
v3.10.0.1
FAIR VALUE MEASUREMENTS
6 Months Ended
Jun. 30, 2018
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 company-owned life insurance policy, 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.

Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities.  Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities.

Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data.  Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies.  These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include:  certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund investments; most short-term investments; and non-exchange-traded derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs.

Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions.  Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information.  Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities.  Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions.

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. Any transfers between levels are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in both the first six months of 2018 and 2017.

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.

Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage 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 (primarily comprised of non-redeemable preferred stock) 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.

Investments held by VIEs

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.

Other invested assets - derivatives

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 31 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 June 30, 2018 is as follows (dollars in millions):

 
Quoted prices in active markets
for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
 (Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$

 
$
14,213.5

 
$
181.9

 
$
14,395.4

United States Treasury securities and obligations of United States government corporations and agencies

 
175.0

 

 
175.0

States and political subdivisions

 
2,063.4

 

 
2,063.4

Debt securities issued by foreign governments

 
77.5

 
3.9

 
81.4

Asset-backed securities

 
2,739.8

 
18.4

 
2,758.2

Collateralized debt obligations

 
456.0

 

 
456.0

Commercial mortgage-backed securities

 
1,463.9

 

 
1,463.9

Mortgage pass-through securities

 
1.7

 

 
1.7

Collateralized mortgage obligations

 
685.9

 

 
685.9

Total fixed maturities, available for sale

 
21,876.7

 
204.2

 
22,080.9

Equity securities - corporate securities
226.2

 
130.4

 
9.5

 
366.1

Trading securities:
 

 
 

 
 

 
 

Asset-backed securities

 
92.3

 

 
92.3

Commercial mortgage-backed securities

 
98.2

 

 
98.2

Collateralized mortgage obligations

 
63.7

 

 
63.7

Total trading securities

 
254.2

 

 
254.2

Investments held by variable interest entities - corporate securities

 
1,543.3

 

 
1,543.3

Other invested assets - derivatives

 
126.0

 

 
126.0

Assets held in separate accounts

 
4.8

 

 
4.8

Total assets carried at fair value by category
$
226.2

 
$
23,935.4

 
$
213.7

 
$
24,375.3

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
$

 
$

 
$
1,333.3

 
$
1,333.3



The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2017 is as follows (dollars in millions):

 
Quoted prices in active markets
 for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
 (Level 2)
 
Significant unobservable inputs 
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$

 
$
14,728.0

 
$
230.4

 
$
14,958.4

United States Treasury securities and obligations of United States government corporations and agencies

 
177.7

 

 
177.7

States and political subdivisions

 
2,056.3

 

 
2,056.3

Debt securities issued by foreign governments

 
79.2

 
3.9

 
83.1

Asset-backed securities

 
3,230.2

 
24.2

 
3,254.4

Collateralized debt obligations

 
259.4

 

 
259.4

Commercial mortgage-backed securities

 
1,377.5

 

 
1,377.5

Mortgage pass-through securities

 
2.0

 

 
2.0

Collateralized mortgage obligations

 
742.1

 

 
742.1

Total fixed maturities, available for sale

 
22,652.4

 
258.5

 
22,910.9

Equity securities - corporate securities
287.8

 
131.6

 
21.2

 
440.6

Trading securities:
 

 
 

 
 

 
 

Corporate securities

 
21.6

 

 
21.6

United States Treasury securities and obligations of United States government corporations and agencies

 
.5

 

 
.5

Asset-backed securities

 
95.8

 

 
95.8

Collateralized debt obligations

 
2.7

 

 
2.7

Commercial mortgage-backed securities

 
92.5

 

 
92.5

Collateralized mortgage obligations

 
68.7

 

 
68.7

Equity securities
2.8

 

 

 
2.8

Total trading securities
2.8

 
281.8

 

 
284.6

Investments held by variable interest entities - corporate securities

 
1,522.0

 
4.9

 
1,526.9

Other invested assets - derivatives

 
170.2

 

 
170.2

Assets held in separate accounts

 
5.0

 

 
5.0

Total assets carried at fair value by category
$
290.6

 
$
24,763.0

 
$
284.6

 
$
25,338.2

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
$

 
$

 
$
1,334.8

 
$
1,334.8








The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):
 
June 30, 2018
 
Quoted prices in active markets for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
 (Level 2)
 
Significant unobservable inputs 
(Level 3)
 
Total estimated fair value
 
Total carrying amount
Assets:
 
 
 
 
 
 
 
 
 
Mortgage loans
$

 
$

 
$
1,646.9

 
$
1,646.9

 
$
1,649.4

Policy loans

 

 
116.0

 
116.0

 
116.0

Other invested assets:
 
 
 
 
 
 
 
 
 
Company-owned life insurance

 
182.0

 

 
182.0

 
182.0

Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
Unrestricted
639.2

 
.1

 

 
639.3

 
639.3

Held by variable interest entities
106.4

 

 

 
106.4

 
106.4

Liabilities:
 
 
 
 
 
 
 
 
 
Policyholder account balances

 

 
11,349.7

 
11,349.7

 
11,349.7

Investment borrowings

 
1,647.4

 

 
1,647.4

 
1,646.3

Borrowings related to variable interest entities

 
1,428.4

 

 
1,428.4

 
1,418.1

Notes payable – direct corporate obligations

 
923.3

 

 
923.3

 
915.7


 
December 31, 2017
 
Quoted prices in active markets for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
 (Level 2)
 
Significant unobservable inputs 
(Level 3)
 
Total estimated fair value
 
Total carrying amount
Assets:
 
 
 
 
 
 
 
 
 
Mortgage loans
$

 
$

 
$
1,677.3

 
$
1,677.3

 
$
1,650.6

Policy loans

 

 
116.0

 
116.0

 
116.0

Other invested assets:
 
 
 
 
 
 
 
 
 
Company-owned life insurance

 
182.3

 

 
182.3

 
182.3

Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
Unrestricted
578.4

 

 

 
578.4

 
578.4

Held by variable interest entities
178.9

 

 

 
178.9

 
178.9

Liabilities:
 
 
 
 
 
 
 
 
 
Policyholder account balances

 

 
11,220.7

 
11,220.7

 
11,220.7

Investment borrowings

 
1,648.8

 

 
1,648.8

 
1,646.7

Borrowings related to variable interest entities

 
1,432.9

 

 
1,432.9

 
1,410.7

Notes payable – direct corporate obligations

 
962.3

 

 
962.3

 
914.6








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 June 30, 2018 (dollars in millions):
 
 
June 30, 2018
 
 
 
 
Beginning balance as of March 31, 2018
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2018
 
Amount of total gains (losses) for the three months ended June 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
 
$
200.1

 
$
(6.9
)
 
$
.1

 
$
(.8
)
 
$
4.4

 
$
(15.0
)
 
$
181.9

 
$

Debt securities issued by foreign governments
 
3.8

 

 

 
.1

 

 

 
3.9

 

Asset-backed securities
 
17.6

 
5.9

 

 
(.1
)
 

 
(5.0
)
 
18.4

 

Collateralized debt obligations
 
15.3

 

 

 

 

 
(15.3
)
 

 

Total fixed maturities, available for sale
 
236.8

 
(1.0
)
 
.1

 
(.8
)
 
4.4

 
(35.3
)
 
204.2

 

Equity securities - corporate securities
 
21.4

 
(10.9
)
 
(1.0
)
 

 

 

 
9.5

 

Liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
 
(1,315.4
)
 
(33.9
)
 
16.0

 

 

 

 
(1,333.3
)
 
16.0

_________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2018 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
.1

 
$
(7.0
)
 
$

 
$

 
$
(6.9
)
Asset-backed securities
6.0

 
(.1
)
 

 

 
5.9

Total fixed maturities, available for sale
6.1

 
(7.1
)
 

 

 
(1.0
)
Equity securities - corporate securities

 
(10.9
)
 

 

 
(10.9
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(44.1
)
 
3.2

 
(11.9
)
 
18.9

 
(33.9
)


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 six months ended June 30, 2018 (dollars in millions):
 
 
June 30, 2018
 
 
 
 
Beginning balance as of December 31, 2017
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2018
 
Amount of total gains (losses) for the six months ended June 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
 
$
230.4

 
$
3.7

 
$
1.3

 
$
(3.2
)
 
$

 
$
(50.3
)
 
$
181.9

 
$

Debt securities issued by foreign governments
 
3.9

 

 

 

 

 

 
3.9

 

Asset-backed securities
 
24.2

 
(5.2
)
 

 
(.6
)
 

 

 
18.4

 

Total fixed maturities, available for sale
 
258.5

 
(1.5
)
 
1.3

 
(3.8
)
 

 
(50.3
)
 
204.2

 

Equity securities - corporate securities
 
21.2

 
(10.9
)
 
(.8
)
 

 

 

 
9.5

 

Investments held by variable interest entities - corporate securities
 
4.9

 

 

 

 

 
(4.9
)
 

 

Liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
 
(1,334.8
)
 
(51.5
)
 
53.0

 

 

 

 
(1,333.3
)
 
53.0

_________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the six months ended June 30, 2018 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
15.6

 
$
(11.9
)
 
$

 
$

 
$
3.7

Asset-backed securities
6.0

 
(11.2
)
 

 

 
(5.2
)
Total fixed maturities, available for sale
21.6

 
(23.1
)
 

 

 
(1.5
)
Equity securities - corporate securities

 
(10.9
)
 

 

 
(10.9
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(83.3
)
 
6.9

 
(14.1
)
 
39.0

 
(51.5
)





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 June 30, 2017 (dollars in millions):

 
June 30, 2017
 
 
 
Beginning balance as of March 31, 2017
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2017
 
Amount of total gains (losses) for the three months ended June 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
288.8

 
$
(18.3
)
 
$
7.2

 
$
(8.9
)
 
$
11.6

 
$
(17.1
)
 
$
263.3

 
$
(3.4
)
Debt securities issued by foreign governments
3.9

 

 

 

 

 

 
3.9

 

Asset-backed securities
67.2

 
(4.2
)
 

 
.6

 

 
(4.0
)
 
59.6

 

Collateralized debt obligations
11.5

 

 

 

 

 
(9.0
)
 
2.5

 

Commercial mortgage-backed securities
14.9

 

 

 

 

 
(14.9
)
 

 

Collateralized mortgage obligations

 
(7.3
)
 

 
(1.4
)
 
8.9

 

 
.2

 

Total fixed maturities, available for sale
386.3

 
(29.8
)
 
7.2

 
(9.7
)
 
20.5

 
(45.0
)
 
329.5

 
(3.4
)
Equity securities - corporate securities
24.3

 

 

 

 
.3

 

 
24.6

 

Liabilities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
(1,159.2
)
 
(48.7
)
 
2.5

 

 

 

 
(1,205.4
)
 
2.5

____________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2017 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
10.9

 
$
(29.2
)
 
$

 
$

 
$
(18.3
)
Asset-backed securities

 
(4.2
)
 

 

 
(4.2
)
Collateralized mortgage obligations

 
(7.3
)
 

 

 
(7.3
)
Total fixed maturities, available for sale
10.9

 
(40.7
)
 

 

 
(29.8
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(45.8
)
 
2.2

 
(21.2
)
 
16.1

 
(48.7
)

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 six months ended June 30, 2017 (dollars in millions):

 
June 30, 2017
 
 
 
Beginning balance as of December 31, 2016
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2017
 
Amount of total gains (losses) for the six months ended June 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
258.5

 
$
(14.1
)
 
$
7.8

 
$
(.5
)
 
$
11.6

 
$

 
$
263.3

 
$
(6.7
)
Debt securities issued by foreign governments
3.9

 

 

 

 

 

 
3.9

 

Asset-backed securities
60.4

 
5.8

 

 
1.1

 

 
(7.7
)
 
59.6

 

Collateralized debt obligations
5.4

 

 

 

 

 
(2.9
)
 
2.5

 

Commercial mortgage-backed securities
32.0

 

 

 

 

 
(32.0
)
 

 

Collateralized mortgage obligations

 
(7.9
)
 

 
(1.4
)
 
9.5

 

 
.2

 

Total fixed maturities, available for sale
360.2

 
(16.2
)
 
7.8

 
(.8
)
 
21.1

 
(42.6
)
 
329.5

 
(6.7
)
Equity securities - corporate securities
25.2

 
(.1
)
 
(.1
)
 
(.4
)
 

 

 
24.6

 

Liabilities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
(1,092.3
)
 
(117.9
)
 
4.8

 

 

 

 
(1,205.4
)
 
4.8

____________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the six months ended June 30, 2017 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
34.2

 
$
(48.3
)
 
$

 
$

 
$
(14.1
)
Asset-backed securities
12.0

 
(6.2
)
 

 

 
5.8

Collateralized mortgage obligations

 
(7.9
)
 

 

 
(7.9
)
Total fixed maturities, available for sale
46.2

 
(62.4
)
 

 

 
(16.2
)
Equity securities - corporate securities

 
(.1
)
 

 

 
(.1
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(89.1
)
 
3.5

 
(64.3
)
 
32.0

 
(117.9
)

At June 30, 2018, 59 percent of our Level 3 fixed maturities, available for sale, were investment grade and 89 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 loss 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 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 June 30, 2018 (dollars in millions):

 
Fair value at June 30, 2018
 
Valuation techniques
 
Unobservable inputs
 
Range (weighted average)
Assets:
 
 
 
 
 
 
 
Corporate securities (a)
$
119.5

 
Discounted cash flow analysis
 
Discount margins
 
1.40% - 9.23% (3.97%)
Corporate securities (b)
5.4

 
Recovery method
 
Percent of recovery expected
 
0% - 63.95% (59.42%)
Asset-backed securities (c)
12.5

 
Discounted cash flow analysis
 
Discount margins
 
1.98%
Equity securities (d)
1.2

 
Market comparables
 
EBITDA multiples
 
1.1X
Equity securities (e)
8.2

 
Recovery method
 
Percent of recovery expected
 
59.27% - 100.00% (59.52%)
Other assets categorized as Level 3 (f)
66.9

 
Unadjusted third-party price source
 
Not applicable
 
Not applicable
Total
213.7

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Future policy benefits (g)
1,333.3

 
Discounted projected embedded derivatives
 
Projected portfolio yields
 
5.15% - 5.61% (5.60%)
 
 
 
 
 
Discount rates
 
1.18% - 2.66% (2.41%)
 
 
 
 
 
Surrender rates
 
1.20% - 46.40% (12.30%)
________________________________
(a)
Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(b)
Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(c)
Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(d)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements.
(e)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(f)
Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.
(g)
Future policy benefits - 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 the Treasury rate adjusted by a margin. 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.

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, 2017 (dollars in millions):

 
Fair value at December 31, 2017
 
Valuation techniques
 
Unobservable inputs
 
Range (weighted average)
Assets:
 
 
 
 
 
 
 
Corporate securities (a)
$
149.2

 
Discounted cash flow analysis
 
Discount margins
 
1.45% - 71.29% (6.96%)
Corporate securities (b)
2.8

 
Recovery method
 
Percent of recovery expected
 
0% - 21.73% (18.42%)
Asset-backed securities (c)
24.2

 
Discounted cash flow analysis
 
Discount margins
 
1.80% - 3.71% (2.67%)
Equity securities (d)
1.1

 
Market comparables
 
EBITDA multiples
 
1.1X
Equity securities (e)
20.1

 
Recovery method
 
Percent of recovery expected
 
59.1%
Other assets categorized as Level 3 (f)
87.2

 
Unadjusted third-party price source
 
Not applicable
 
Not applicable
Total
284.6

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Future policy benefits (g)
1,334.8

 
Discounted projected embedded derivatives
 
Projected portfolio yields
 
5.15% - 5.61% (5.60%)
 
 
 
 
 
Discount rates
 
0.92% - 2.51% (2.00%)
 
 
 
 
 
Surrender rates
 
1.20% - 46.40% (12.30%)

________________________________
(a)
Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(b)
Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(c)
Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(d)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is EBITDA multiples. Generally, increases (decreases) in EBITDA multiples would result in higher (lower) fair value measurements.
(e)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(f)
Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.
(g)
Future policy benefits - 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 the Treasury rate adjusted by a margin. 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.
v3.10.0.1
SUBSEQUENT EVENT (Notes)
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
SUBSEQUENT EVENTS

On August 1, 2018, the Company announced that its wholly-owned subsidiary, Bankers Life, has entered into an agreement with Wilton Re to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance. Bankers Life will pay a ceding commission of $825 million to reinsure the block, funded through excess capital in the insurance subsidiaries and at the holding company.

The transaction is subject to customary and other closing conditions and certain regulatory approvals and is expected to close no later than the end of 2018. On the closing date of the proposed transaction, Bankers Life will transfer to Wilton Re assets equal to the statutory liabilities supporting the block plus the ceding commission (subject to a customary post-closing adjustment). In anticipation of the reinsurance agreement, the Company will reorganize its business segments to move the block to be ceded from the “Bankers Life segment” to the “Long-term care in run-off segment” in the third quarter of 2018. Once resegmented, the Company will evaluate and test for loss recognition separately for the ceded block included in the "Long-term care in run-off segment".

Prior to the end of 2018, CNO expects to recognize a charge related to the transaction of approximately $650 million, net of taxes and the gain recognized on the assets transferred to Wilton Re. The charge is primarily attributable to loss recognition on the block due to the ceding commission. Including cash flows related to reinsurance in loss recognition testing is consistent with the Company's past practices and policies.

In addition to the reinsurance agreement, Bankers Life or another CNO company will enter into certain other agreements with Wilton Re, including a trust agreement, an administrative services agreement and a transition services agreement.

Wilton Re will establish and maintain a trust account for the benefit of Bankers Life to secure its obligations under the coinsurance agreement. The trust account will be required to hold qualified assets with book values equal to the statutory liabilities of the block plus an additional amount, initially $500 million, which declines over time.

CNO also announced that in the third quarter of 2018, its insurance subsidiaries will cease sales of home health care only long-term care policies, and comprehensive and nursing home long-term care policies with benefit periods exceeding three years.
v3.10.0.1
RECENTLY ISSUED ACCOUNTING STANDARDS (Policies)
6 Months Ended
Jun. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
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 net investment income (classified as investment income from policyholder and other special-purpose portfolios)).

Our 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 certain reinsurance agreements; 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 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.
We regularly evaluate all of our investments with unrealized losses for possible impairment.  Our assessment of whether unrealized losses are "other than temporary" requires significant judgment.  Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is 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 is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will 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 may 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 manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security.  If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings.  If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated.  We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security.  The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating-rate security.  The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security.

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 from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond-specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis.  We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming.

The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment.  The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums.
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).
Segment Reporting
The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; and corporate operations, comprised of holding company activities and certain noninsurance company businesses. We also have a long-term care in run-off segment which is comprised of certain long-term care business that was recaptured in 2016 due to the termination of certain reinsurance agreements.

On August 1, 2018, the Company announced that its wholly-owned subsidiary, Bankers Life and Casualty Company ("Bankers Life"), has entered into an agreement with Wilton Reassurance Company ("Wilton Re") to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Subsequent Events". In anticipation of the reinsurance agreement, the Company will reorganize its business segments to move the block to be ceded from the “Bankers Life segment” to the “Long-term care in run-off segment” in the third quarter of 2018.

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, 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 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.
Recently Issued Accounting Standards
RECENTLY ISSUED ACCOUNTING STANDARDS

Pending Accounting Standards

In February 2016, the Financial Accounting Standards Board (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 will be effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. 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.

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 will be effective for the Company for fiscal years beginning in 2020, including interim periods within the fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 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.

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 will be effective for the Company on January 1, 2020, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

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 will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has not yet determined the expected impact of adoption of this guidance on our 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 will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. 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 May 2014, the FASB issued authoritative guidance for recognizing revenue from contracts with customers. Certain contracts with customers are specifically excluded from this guidance, including insurance contracts. The core principle of the new guidance is that an entity should recognize revenue when it transfers promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance was effective for the Company on January 1, 2018. The adoption of this new guidance impacts the timing of certain revenues and expenses between quarters of a calendar year for various distribution and marketing agreements with other insurance companies pursuant to which Bankers Life's career agents distribute third party products including prescription drug and Medicare Advantage plans. The annual fee income earned during a calendar year will not change, but the amount recognized during each quarterly period will vary based on the sales of such products in each period. Furthermore, we are recognizing distribution expenses in the same period that the associated fee revenue is earned. Periods prior to the January 1, 2018 adoption date were not restated to reflect the new guidance. The impact of adoption was as follows (dollars in millions):
 
 
Three months ended June 30, 2018
 
 
 
 
Impact of
 
Amounts prior
 
 
As reported
 
adoption
 
to adoption
Fee revenue
 
$
6.6

 
$
(1.8
)
 
$
8.4

Distribution expense (included in other operating costs and expenses)
 
.9

 
(2.3
)
 
3.2

Impact on pre-tax income
 
$
5.7

 
$
.5

 
$
5.2



 
 
Six months ended June 30, 2018
 
 
 
 
Impact of
 
Amounts prior
 
 
As reported
 
adoption
 
to adoption
Fee revenue
 
$
22.4

 
$
5.5

 
$
16.9

Distribution expense (included in other operating costs and expenses)
 
12.4

 
6.5

 
5.9

Impact on pre-tax income
 
$
10.0

 
$
(1.0
)
 
$
11.0



In January 2016, the FASB issued authoritative guidance related to the recognition and measurement of financial assets and financial liabilities which made targeted improvements to GAAP as follows:

(i)
Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
(ii)
Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value.
(iii)
Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.
(iv)
Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.
(v)
Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.
(vi)
Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements.
(vii)
Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The guidance was effective for the Company on January 1, 2018. Accordingly, the Company recorded a cumulative effect adjustment to the balance sheet as of January 1, 2018, related to certain equity investments that are measured at fair value. The impact of adoption was as follows (dollars in millions):
 
January 1, 2018
 
Amounts prior to effect of adoption of authoritative guidance
 
Effect of adoption of authoritative guidance
 
As adjusted
 
 
 
 
 
 
Accumulated other comprehensive income
$
1,212.1

 
$
(16.3
)
 
$
1,195.8

Retained earnings
560.4

 
16.3

 
576.7

Total shareholders' equity
4,847.5

 

 
4,847.5


In August 2016, the FASB issued authoritative guidance related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of corporate-owned life insurance policies ("COLI"), distributions received from equity method investees, and others. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance resulted in reclassifications to certain cash receipts and payments within our consolidated statement of cash flows, but had no impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

In November 2016, the FASB issued authoritative guidance to address the diversity in practice that currently exists regarding the classification and presentation of changes in restricted cash on the statement of cash flows. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Entities are also required to disclose information about the nature of their restricted cash and restricted cash equivalents. Additionally, if cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item in the statement of financial position, entities will be required to present a reconciliation, either on the face of the statement of cash flows or disclosed in the notes, of the totals in the statement of cash flows to the related line item captions in the statement of financial position. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance impacted the presentation of our consolidated statement of cash flows and related cash flow disclosures, but did not have an impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

 
Six months ended
 
June 30, 2017
 
Amounts prior to effect of adoption of authoritative guidance
 
Restricted cash
 
COLI death benefits
 
Distributions received from equity method investments
 
As adjusted
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net investment income
$
618.7

 
$

 
$

 
$
10.7

 
$
629.4

Other operating costs
(391.5
)
 

 
(3.2
)
 

 
(394.7
)
Net cash flow from operating activities
278.5

 

 
(3.2
)
 
10.7

 
286.0

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Sales of investments
891.1

 

 

 
(10.7
)
 
880.4

Change in cash and cash equivalents held by variable interest entities
(201.8
)
 
201.8

 

 

 

Other
(15.7
)
 

 
3.2

 

 
(12.5
)
Net cash provided (used) by investing activities
(27.9
)
 
201.8

 
3.2

 
(10.7
)
 
166.4

 
 
 
 
 
 
 
 
 
 
Net increase in cash and cash equivalents
69.9

 
201.8

 

 

 
271.7

Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period
478.9

 
189.3

 

 

 
668.2

Cash and cash equivalents - unrestricted and held by variable interest entities, end of period
548.8

 
391.1

 

 

 
939.9



In May 2017, the FASB issued authoritative guidance related to which changes to the terms or conditions of a share-based award require an entity to apply modification accounting. The guidance was effective for the Company for fiscal years beginning after December 15, 2017. Early adoption was permitted, including adoption in an interim period. The guidance is to be applied prospectively to an award modified on or after the adoption date. The adoption of this guidance did not have a material impact to the Company's consolidated financial position, results of operations or cash flows.
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 company-owned life insurance policy, 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.

Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities.  Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities.

Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data.  Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies.  These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include:  certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund investments; most short-term investments; and non-exchange-traded derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs.

Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions.  Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information.  Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities.  Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions.

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. Any transfers between levels are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in both the first six months of 2018 and 2017.

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.

Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage 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 (primarily comprised of non-redeemable preferred stock) 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.

Investments held by VIEs

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.

Other invested assets - derivatives

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 31 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 loss 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.
v3.10.0.1
INVESTMENTS (Tables)
6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Schedule of accumulated other comprehensive income (loss)
These amounts, included in shareholders' equity as of June 30, 2018 and December 31, 2017, were as follows (dollars in millions):

 
June 30,
2018
 
December 31,
2017
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized
$
2.4

 
$
2.6

Net unrealized gains on all other investments
1,080.2

 
2,227.3

Adjustment to present value of future profits (a)
(82.4
)
 
(94.0
)
Adjustment to deferred acquisition costs
(100.4
)
 
(292.6
)
Adjustment to insurance liabilities
(7.5
)
 
(295.8
)
Deferred income tax liabilities
(192.1
)
 
(335.4
)
Accumulated other comprehensive income
$
700.2

 
$
1,212.1

________
(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 and equity securities
At June 30, 2018, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair value
 
Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities
$
13,723.1

 
$
897.7

 
$
(225.4
)
 
$
14,395.4

 
$

United States Treasury securities and obligations of United States government corporations and agencies
150.9

 
24.5

 
(.4
)
 
175.0

 

States and political subdivisions
1,880.8

 
185.1

 
(2.5
)
 
2,063.4

 

Debt securities issued by foreign governments
84.4

 
.5

 
(3.5
)
 
81.4

 

Asset-backed securities
2,600.8

 
164.6

 
(7.2
)
 
2,758.2

 

Collateralized debt obligations
457.1

 
.8

 
(1.9
)
 
456.0

 

Commercial mortgage-backed securities
1,468.3

 
15.9

 
(20.3
)
 
1,463.9

 

Mortgage pass-through securities
1.6

 
.1

 

 
1.7

 

Collateralized mortgage obligations
622.5

 
66.8

 
(3.4
)
 
685.9

 
(.8
)
Total fixed maturities, available for sale
$
20,989.5

 
$
1,356.0

 
$
(264.6
)
 
$
22,080.9

 
$
(.8
)


At December 31, 2017, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions):
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair value
 
Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities
$
13,286.3

 
$
1,699.1

 
$
(27.0
)
 
$
14,958.4

 
$

United States Treasury securities and obligations of United States government corporations and agencies
146.4

 
31.5

 
(.2
)
 
177.7

 

States and political subdivisions
1,821.9

 
234.8

 
(.4
)
 
2,056.3

 

Debt securities issued by foreign governments
79.5

 
3.8

 
(.2
)
 
83.1

 

Asset-backed securities
3,085.9

 
172.6

 
(4.1
)
 
3,254.4

 

Collateralized debt obligations
257.1

 
2.3

 

 
259.4

 

Commercial mortgage-backed securities
1,354.0

 
33.8

 
(10.3
)
 
1,377.5

 

Mortgage pass-through securities
1.8

 
.2

 

 
2.0

 

Collateralized mortgage obligations
669.2

 
73.2

 
(.3
)
 
742.1

 
(1.0
)
Total fixed maturities, available for sale
$
20,702.1

 
$
2,251.3

 
$
(42.5
)
 
$
22,910.9

 
$
(1.0
)
Equity securities
$
420.0

 
$
23.6

 
$
(3.0
)
 
$
440.6

 
 
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 June 30, 2018, 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 debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.

 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
378.5

 
$
384.9

Due after one year through five years
1,666.3

 
1,720.7

Due after five years through ten years
1,828.2

 
1,860.5

Due after ten years
11,966.2

 
12,749.1

Subtotal
15,839.2

 
16,715.2

Structured securities
5,150.3

 
5,365.7

Total fixed maturities, available for sale
$
20,989.5

 
$
22,080.9



The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2017, by contractual maturity.

 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
328.1

 
$
335.1

Due after one year through five years
1,947.3

 
2,052.3

Due after five years through ten years
1,508.7

 
1,601.3

Due after ten years
11,550.0

 
13,286.8

Subtotal
15,334.1

 
17,275.5

Structured securities
5,368.0

 
5,635.4

Total fixed maturities, available for sale
$
20,702.1

 
$
22,910.9

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):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Gross realized gains on sale
$
31.9

 
$
21.1

 
$
40.1

 
$
28.1

Gross realized losses on sale
(17.8
)
 
(5.2
)
 
(25.5
)
 
(7.9
)
Impairments:
 
 
 
 
 
 
 
Total other-than-temporary impairment losses

 
(3.6
)
 

 
(6.8
)
Other-than-temporary impairment losses recognized in accumulated other comprehensive income

 
(.9
)
 

 
(.9
)
Net impairment losses recognized

 
(4.5
)
 

 
(7.7
)
Net realized investment gains from fixed maturities
14.1

 
11.4

 
14.6

 
12.5

Equity securities, including change in fair value (a)
2.2

 

 
(10.3
)
 
1.9

Mortgage loans

 

 

 
1.0

Impairments of other investments

 
(.6
)
 

 
(5.8
)
Loss on dissolution of a variable interest entity

 
(3.7
)
 

 
(3.7
)
Other (a)
(5.3
)
 
8.1

 
(8.5
)
 
17.2

Net realized investment gains (losses)
$
11.0

 
$
15.2

 
$
(4.2
)
 
$
23.1


_________________
(a)
Changes in the estimated fair value of trading securities that we have elected the fair value option and equity securities (and are still held as of the end of the respective periods) were $(4.2) million and $9.9 million for the six months ended June 30, 2018 and 2017, respectively.

Schedule of credit losses recognized in earnings
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 and six months ended June 30, 2018 and 2017 (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Credit losses on fixed maturity securities, available for sale, beginning of period
$
(2.8
)
 
$
(5.4
)
 
$
(2.8
)
 
$
(5.5
)
Add: credit losses on other-than-temporary impairments not previously recognized

 

 

 

Less: credit losses on securities sold
2.5

 
1.5

 
2.5

 
1.6

Less: credit losses on securities impaired due to intent to sell (a)

 

 

 

Add: credit losses on previously impaired securities

 
(1.0
)
 

 
(1.0
)
Less: increases in cash flows expected on previously impaired securities

 

 

 

Credit losses on fixed maturity securities, available for sale, end of period
$
(.3
)
 
$
(4.9
)
 
$
(.3
)
 
$
(4.9
)
__________
(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.
Schedule of unrealized loss on investments
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 June 30, 2018 (dollars in millions):

 
 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
 
$
25.4

 
$
(.3
)
 
$
.7

 
$

 
$
26.1

 
$
(.3
)
States and political subdivisions
 
91.9

 
(2.1
)
 
14.4

 
(.4
)
 
106.3

 
(2.5
)
Debt securities issued by foreign governments
 
54.1

 
(3.3
)
 
8.0

 
(.2
)
 
62.1

 
(3.5
)
Corporate securities
 
4,235.1

 
(193.8
)
 
259.2

 
(31.7
)
 
4,494.3

 
(225.5
)
Asset-backed securities
 
570.7

 
(5.1
)
 
60.4

 
(2.1
)
 
631.1

 
(7.2
)
Collateralized debt obligations
 
279.3

 
(1.9
)
 

 

 
279.3

 
(1.9
)
Commercial mortgage-backed securities
 
453.8

 
(7.7
)
 
187.4

 
(12.6
)
 
641.2

 
(20.3
)
Mortgage pass-through securities
 
.1

 

 

 

 
.1

 

Collateralized mortgage obligations
 
104.5

 
(3.4
)
 
2.0

 

 
106.5

 
(3.4
)
Total fixed maturities, available for sale
 
$
5,814.9

 
$
(217.6
)
 
$
532.1

 
$
(47.0
)
 
$
6,347.0

 
$
(264.6
)

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, 2017 (dollars in millions):

 
 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
 
$
28.2

 
$
(.2
)
 
$
.7

 
$

 
$
28.9

 
$
(.2
)
States and political subdivisions
 
18.3

 
(.1
)
 
14.9

 
(.3
)
 
33.2

 
(.4
)
Debt securities issued by foreign governments
 
7.7

 
(.1
)
 
5.4

 
(.1
)
 
13.1

 
(.2
)
Corporate securities
 
470.5

 
(6.8
)
 
359.7

 
(20.2
)
 
830.2

 
(27.0
)
Asset-backed securities
 
601.4

 
(2.0
)
 
122.2

 
(2.1
)
 
723.6

 
(4.1
)
Collateralized debt obligations
 
3.0

 

 

 

 
3.0

 

Commercial mortgage-backed securities
 
276.8

 
(1.7
)
 
218.2

 
(8.6
)
 
495.0

 
(10.3
)
Collateralized mortgage obligations
 
20.5

 
(.2
)
 
11.5

 
(.1
)
 
32.0

 
(.3
)
Total fixed maturities, available for sale
 
$
1,426.4

 
$
(11.1
)
 
$
732.6

 
$
(31.4
)
 
$
2,159.0

 
$
(42.5
)
Equity securities
 
$
58.7

 
$
(1.7
)
 
$
21.2

 
$
(1.3
)
 
$
79.9

 
$
(3.0
)
v3.10.0.1
EARNINGS PER SHARE (Tables)
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Schedule of earnings per share reconciliation
A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Net income for basic and diluted earnings per share
$
102.2

 
$
83.4

 
$
186.5

 
$
145.7

Shares:
 

 
 

 
 
 
 
Weighted average shares outstanding for basic earnings per share
166,098

 
170,556

 
166,579

 
171,994

Effect of dilutive securities on weighted average shares:
 

 
 

 
 
 
 
Stock options, restricted stock and performance units
1,880

 
1,796

 
2,249

 
1,714

Weighted average shares outstanding for diluted earnings per share
167,978

 
172,352

 
168,828

 
173,708



v3.10.0.1
BUSINESS SEGMENTS (Tables)
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Schedule of segment reporting information by segment
Operating information by segment is as follows (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy income:
 
 
 
 
 
 
 
Annuities
$
4.8

 
$
5.8

 
$
9.4

 
$
11.8

Health
300.5

 
308.1

 
602.7

 
619.7

Life
105.0

 
105.2

 
208.9

 
206.7

Net investment income (a)
259.5

 
256.9

 
497.4

 
529.8

Fee revenue and other income (a)
10.6

 
10.6

 
30.2

 
21.2

Total Bankers Life revenues
680.4

 
686.6

 
1,348.6

 
1,389.2

Washington National:
 

 
 

 
 
 
 
Insurance policy income:
 

 
 

 
 
 
 
Annuities
.2

 
.5

 
.7

 
1.1

Health
164.0

 
160.1

 
327.8

 
319.9

Life
6.8

 
6.9

 
13.5

 
13.6

Net investment income (a)
64.1

 
66.5

 
129.5

 
133.9

Fee revenue and other income (a)
.3

 
.2

 
.5

 
.5

Total Washington National revenues
235.4

 
234.2

 
472.0

 
469.0

Colonial Penn:
 

 
 

 
 
 
 
Insurance policy income:
 

 
 

 
 
 
 
Health
.4

 
.5

 
.9

 
1.1

Life
74.1

 
72.5

 
147.7

 
144.9

Net investment income (a)
11.3

 
11.2

 
22.3

 
22.1

Fee revenue and other income (a)
.4

 
.4

 
.9

 
.6

Total Colonial Penn revenues
86.2

 
84.6

 
171.8

 
168.7

Long-term care in run-off:
 
 
 
 
 
 
 
Insurance policy income - health
4.0

 
4.5

 
8.1

 
9.1

Net investment income (a)                                                                                           
8.6

 
10.0

 
17.0

 
19.7

Total Long-term care in run-off revenues
12.6

 
14.5

 
25.1

 
28.8

Corporate operations:
 

 
 

 
 
 
 
Net investment income
4.0

 
7.4

 
5.2

 
17.8

Fee and other income
1.5

 
2.3

 
3.3

 
4.7

Total corporate revenues
5.5

 
9.7

 
8.5

 
22.5

Total revenues
$
1,020.1

 
$
1,029.6

 
$
2,026.0

 
$
2,078.2



(continued on next page)

(continued from previous page)
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Expenses:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy benefits
$
426.1

 
$
419.3

 
$
837.2

 
$
870.5

Amortization
40.0

 
41.3

 
87.0

 
87.6

Interest expense on investment borrowings
7.5

 
4.8

 
13.6

 
9.0

Other operating costs and expenses
110.7

 
108.6

 
225.2

 
219.8

Total Bankers Life expenses
584.3

 
574.0

 
1,163.0

 
1,186.9

Washington National:
 

 
 

 
 
 
 
Insurance policy benefits
142.5

 
145.3

 
280.2

 
292.0

Amortization
14.4

 
15.3

 
28.9

 
29.6

Interest expense on investment borrowings
2.7

 
1.5

 
4.8

 
2.8

Other operating costs and expenses
50.4

 
48.5

 
98.4

 
97.5

Total Washington National expenses
210.0

 
210.6

 
412.3

 
421.9

Colonial Penn:
 

 
 

 
 
 
 
Insurance policy benefits
50.6

 
50.4

 
107.3

 
103.1

Amortization
4.1

 
4.0

 
8.7

 
8.0

Interest expense on investment borrowings
.4

 
.2

 
.7

 
.4

Other operating costs and expenses
25.7

 
22.0

 
51.2

 
49.5

Total Colonial Penn expenses
80.8

 
76.6

 
167.9

 
161.0

Long-term care in run-off:
 
 
 
 
 
 
 
Insurance policy benefits                                                                                 
9.4

 
12.0

 
21.4

 
25.2

Other operating costs and expenses                                                                                 
.1

 
.8

 
.6

 
1.5

Total Long-term care in run-off expenses
9.5

 
12.8

 
22.0

 
26.7

Corporate operations:
 

 
 

 
 
 
 
Interest expense on corporate debt
11.9

 
11.6

 
23.8

 
23.1

Other operating costs and expenses
19.5

 
22.9

 
38.0

 
44.6

Total corporate expenses
31.4

 
34.5

 
61.8

 
67.7

Total expenses
916.0

 
908.5

 
1,827.0

 
1,864.2

Pre-tax operating earnings by segment:
 

 
 

 
 
 
 
Bankers Life
96.1

 
112.6

 
185.6

 
202.3

Washington National
25.4

 
23.6

 
59.7

 
47.1

Colonial Penn
5.4

 
8.0

 
3.9

 
7.7

Long-term care in run-off
3.1

 
1.7

 
3.1

 
2.1

Corporate operations
(25.9
)
 
(24.8
)
 
(53.3
)
 
(45.2
)
Pre-tax operating earnings
$
104.1

 
$
121.1

 
$
199.0

 
$
214.0

___________________
(a)
It is not practicable to provide additional components of revenue by product or services.

Reconciliation of operating profit (loss) from segments to consolidated
A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income (loss) is as follows (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Total segment revenues                                                                                            
$
1,020.1

 
$
1,029.6

 
$
2,026.0

 
$
2,078.2

Net realized investment gains (losses)                                    
11.0

 
15.2

 
(4.2
)
 
23.1

Revenues related to VIEs
15.2

 
12.3

 
32.3

 
26.5

Consolidated revenues                                                                                       
1,046.3

 
1,057.1

 
2,054.1

 
2,127.8

 
 
 
 
 
 
 
 
Total segment expenses                                                                                            
916.0

 
908.5

 
1,827.0

 
1,864.2

Insurance policy benefits - fair value changes in embedded derivative liabilities
(10.4
)
 
7.2

 
(41.3
)
 
12.7

Amortization related to fair value changes in embedded derivative liabilities
2.1

 
(1.3
)
 
7.9

 
(2.4
)
Amortization related to net realized investment gains
.4

 
.3

 
.4

 
.3

Expenses related to VIEs
19.4

 
13.9

 
33.2

 
27.8

Fair value changes related to agent deferred compensation plan
(11.0
)


 
(11.0
)
 

Consolidated expenses                                                                                       
916.5

 
928.6

 
1,816.2

 
1,902.6

Income before tax
129.8

 
128.5

 
237.9

 
225.2

Income tax expense on period income
27.6

 
45.1

 
51.4

 
79.5

Net income
$
102.2

 
$
83.4

 
$
186.5

 
$
145.7



v3.10.0.1
ACCOUNTING FOR DERIVATIVES (Tables)
6 Months Ended
Jun. 30, 2018
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):

 
 
Fair value
 
 
June 30,
2018
 
December 31, 2017
Assets:
 
 
 
 
Other invested assets:
 
 
 
 
Fixed index call options
 
$
126.0

 
$
170.2

Reinsurance receivables
 
(5.6
)
 
(1.4
)
Total assets
 
$
120.4

 
$
168.8

Liabilities:
 
 
 
 
Future policy benefits:
 
 
 
 
Fixed index products
 
$
1,333.3

 
$
1,334.8

Total liabilities
 
$
1,333.3

 
$
1,334.8

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):

 
 
Three months ended
 
Six months ended
 
 
June 30,
 
June 30,
 
 
2018
 
2017
 
2018
 
2017
Net investment income (loss) from policyholder and other special-purpose portfolios:
 
 
 
 
 
 
 
 
Fixed index call options
 
$
13.4

 
$
20.3

 
$
7.8

 
$
64.8

Net realized gains (losses):
 
 
 
 
 
 
 
 
Embedded derivative related to modified coinsurance agreement
 
(1.5
)
 
1.4

 
(4.2
)
 
2.1

Insurance policy benefits:
 
 
 
 
 
 
 
 
Embedded derivative related to fixed index annuities
 
16.0

 
2.5

 
53.0

 
4.8

Total
 
$
27.9

 
$
24.2

 
$
56.6

 
$
71.7

Derivatives with master netting arrangements
The following table summarizes information related to derivatives with master netting arrangements or collateral as of June 30, 2018 and December 31, 2017 (dollars in millions):

 
 
 
 
 
 
 
 
 
Gross amounts not offset in the balance sheet
 
 
 
 
 
Gross amounts recognized
 
Gross amounts offset in the balance sheet
 
Net amounts of assets presented in the balance sheet
 
Financial instruments
 
Cash collateral received
 
Net amount
June 30, 2018:
 
 
 
Fixed index call options
 
$
126.0

 
$

 
$
126.0

 
$

 
$

 
$
126.0

December 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed index call options
 
170.2

 

 
170.2

 

 

 
170.2

v3.10.0.1
INCOME TAXES (Tables)
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Schedule of components of income tax expense
The components of income tax expense are as follows (dollars in millions):

 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
Current tax expense
$
15.4

 
$
22.0

 
$
20.7

 
$
42.6

Deferred tax expense
12.2

 
23.1

 
30.7

 
36.9

Income tax expense calculated based on estimated annual effective tax rate
$
27.6

 
$
45.1

 
$
51.4

 
$
79.5



Schedule of effective income tax rate reconciliation
A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, before discrete items, reflected in the consolidated statement of operations is as follows:
 
 
Six months ended
 
June 30,
 
2018
 
2017
U.S. statutory corporate rate
21.0
 %
 
35.0
 %
Non-taxable income and nondeductible benefits, net
(.2
)
 
(1.4
)
State taxes
.8

 
1.7

Estimated annual effective tax rate
21.6
 %
 
35.3
 %
Schedule of deferred tax assets and liabilities
The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):

 
June 30,
2018
 
December 31,
2017
Deferred tax assets:
 
 
 
Net federal operating loss carryforwards
$
468.7

 
$
489.6

Net state operating loss carryforwards
9.1

 
9.3

Investments

 
4.3

Insurance liabilities
405.3

 
415.8

Other
47.5

 
48.9

Gross deferred tax assets
930.6

 
967.9

Deferred tax liabilities:
 

 
 

Investments
(3.3
)
 

Present value of future profits and deferred acquisition costs
(159.6
)
 
(165.4
)
Accumulated other comprehensive income
(194.2
)
 
(337.2
)
Gross deferred tax liabilities
(357.1
)
 
(502.6
)
Net deferred tax assets before valuation allowance
573.5

 
465.3

Valuation allowance
(89.1
)
 
(89.1
)
Net deferred tax assets
484.4

 
376.2

Current income taxes prepaid (accrued)
.4

 
(9.3
)
Income tax assets, net
$
484.8

 
$
366.9

Summary of operating loss carryforwards
The following table summarizes the expiration dates of our loss carryforwards (dollars in millions):

 
 
Net operating loss
Year of expiration
 
carryforwards
2023
 
$
1,645.3

2025
 
85.2

2026
 
149.9

2027
 
10.8

2028
 
80.3

2029
 
213.2

2030
 
.3

2031
 
.2

2032
 
44.4

2033
 
.6

2034
 
.9

2035
 
.8

Total federal NOLs
 
$
2,231.9



v3.10.0.1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (Tables)
6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Schedule of long-term debt instruments
The following notes payable were direct corporate obligations of the Company as of June 30, 2018 and December 31, 2017 (dollars in millions):

 
June 30,
2018
 
December 31,
2017
4.500% Senior Notes due May 2020
$
325.0

 
$
325.0

5.250% Senior Notes due May 2025
500.0

 
500.0

Revolving Credit Agreement (as defined below)
100.0

 
100.0

Unamortized debt issue costs
(9.3
)
 
(10.4
)
Direct corporate obligations
$
915.7

 
$
914.6

Schedule of maturities of long-term debt
The scheduled repayment of our direct corporate obligations was as follows at June 30, 2018 (dollars in millions):

Year ending June 30,
 
2019
$

2020
425.0

2021

2022

2023

Thereafter
500.0

 
$
925.0

v3.10.0.1
INVESTMENT BORROWINGS (Tables)
6 Months Ended
Jun. 30, 2018
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):

Amount
 
Maturity
 
Interest rate at
borrowed
 
date
 
June 30, 2018
$
50.0

 
January 2019
 
Variable rate – 2.768%
50.0

 
February 2019
 
Variable rate – 2.420%
100.0

 
March 2019
 
Variable rate – 2.565%
21.8

 
July 2019
 
Variable rate – 2.578%
15.0

 
October 2019
 
Variable rate – 2.879%
50.0

 
May 2020
 
Variable rate – 2.593%
21.8

 
June 2020
 
Fixed rate – 1.960%
25.0

 
September 2020
 
Variable rate – 2.960%
100.0

 
September 2020
 
Variable rate – 2.751%
50.0

 
September 2020
 
Variable rate – 2.762%
75.0

 
September 2020
 
Variable rate – 2.454%
100.0

 
October 2020
 
Variable rate – 2.431%
50.0

 
December 2020
 
Variable rate – 2.701%
100.0

 
July 2021
 
Variable rate – 2.898%
100.0

 
July 2021
 
Variable rate – 2.868%
28.2

 
August 2021
 
Fixed rate – 2.550%
57.7

 
August 2021
 
Variable rate - 2.893%
125.0

 
August 2021
 
Variable rate – 2.571%
50.0

 
September 2021
 
Variable rate – 2.859%
22.0

 
May 2022
 
Variable rate – 2.668%
100.0

 
May 2022
 
Variable rate – 2.406%
10.0

 
June 2022
 
Variable rate – 2.941%
50.0

 
July 2022
 
Variable rate – 2.707%
50.0

 
July 2022
 
Variable rate – 2.739%
50.0

 
July 2022
 
Variable rate – 2.739%
50.0

 
August 2022
 
Variable rate – 2.753%
50.0

 
December 2022
 
Variable rate – 2.600%
50.0

 
December 2022
 
Variable rate – 2.600%
24.3

 
March 2023
 
Fixed rate – 2.160%
20.5

 
June 2025
 
Fixed rate – 2.940%
$
1,646.3

 
 
 
 
v3.10.0.1
CHANGES IN COMMON STOCK (Tables)
6 Months Ended
Jun. 30, 2018
Stockholders' Equity Note [Abstract]  
Schedule of options activity
Changes in the number of shares of common stock outstanding were as follows (shares in thousands):

Balance, December 31, 2017
166,858

 
Treasury stock purchased and retired
(2,998
)
 
Stock options exercised
132

(a)
Restricted and performance stock vested
441

(b)
Balance, June 30, 2018
164,433

 
____________________
(a)
Such amount was reduced by 69 thousand shares which were tendered to the Company for the payment of the exercise price and required federal and state tax withholdings.
(b)
Such amount was reduced by 235 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock.
v3.10.0.1
RECENTLY ISSUED ACCOUNTING STANDARDS (Tables)
6 Months Ended
Jun. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles
The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

 
Six months ended
 
June 30, 2017
 
Amounts prior to effect of adoption of authoritative guidance
 
Restricted cash
 
COLI death benefits
 
Distributions received from equity method investments
 
As adjusted
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net investment income
$
618.7

 
$

 
$

 
$
10.7

 
$
629.4

Other operating costs
(391.5
)
 

 
(3.2
)
 

 
(394.7
)
Net cash flow from operating activities
278.5

 

 
(3.2
)
 
10.7

 
286.0

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Sales of investments
891.1

 

 

 
(10.7
)
 
880.4

Change in cash and cash equivalents held by variable interest entities
(201.8
)
 
201.8

 

 

 

Other
(15.7
)
 

 
3.2

 

 
(12.5
)
Net cash provided (used) by investing activities
(27.9
)
 
201.8

 
3.2

 
(10.7
)
 
166.4

 
 
 
 
 
 
 
 
 
 
Net increase in cash and cash equivalents
69.9

 
201.8

 

 

 
271.7

Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period
478.9

 
189.3

 

 

 
668.2

Cash and cash equivalents - unrestricted and held by variable interest entities, end of period
548.8

 
391.1

 

 

 
939.9

The impact of adoption was as follows (dollars in millions):
 
January 1, 2018
 
Amounts prior to effect of adoption of authoritative guidance
 
Effect of adoption of authoritative guidance
 
As adjusted
 
 
 
 
 
 
Accumulated other comprehensive income
$
1,212.1

 
$
(16.3
)
 
$
1,195.8

Retained earnings
560.4

 
16.3

 
576.7

Total shareholders' equity
4,847.5

 

 
4,847.5

The impact of adoption was as follows (dollars in millions):
 
 
Three months ended June 30, 2018
 
 
 
 
Impact of
 
Amounts prior
 
 
As reported
 
adoption
 
to adoption
Fee revenue
 
$
6.6

 
$
(1.8
)
 
$
8.4

Distribution expense (included in other operating costs and expenses)
 
.9

 
(2.3
)
 
3.2

Impact on pre-tax income
 
$
5.7

 
$
.5

 
$
5.2



 
 
Six months ended June 30, 2018
 
 
 
 
Impact of
 
Amounts prior
 
 
As reported
 
adoption
 
to adoption
Fee revenue
 
$
22.4

 
$
5.5

 
$
16.9

Distribution expense (included in other operating costs and expenses)
 
12.4

 
6.5

 
5.9

Impact on pre-tax income
 
$
10.0

 
$
(1.0
)
 
$
11.0

v3.10.0.1
CONSOLIDATED STATEMENT OF CASH FLOWS (Tables)
6 Months Ended
Jun. 30, 2018
Supplemental Cash Flow Elements [Abstract]  
Schedule of the reconciliation for net income provided by operating activities
The following reconciles net income to net cash from operating activities (dollars in millions):

 
Six months ended
 
June 30,
 
2018
 
2017
Cash flows from operating activities:
 
 
 
Net income
$
186.5

 
$
145.7

Adjustments to reconcile net income to net cash from operating activities:
 
 
 

Amortization and depreciation
146.7

 
136.2

Income taxes
21.0

 
45.8

Insurance liabilities
94.4

 
222.8

Accrual and amortization of investment income
(58.9
)
 
(124.1
)
Deferral of policy acquisition costs
(125.6
)
 
(126.6
)
Net realized investment (gains) losses
4.2

 
(23.1
)
Loss on extinguishment of borrowings related to variable interest entities
3.8

 

Other
(28.4
)
 
9.3

Net cash from operating activities
$
243.7

 
$
286.0



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):

 
Six months ended
 
June 30,
 
2018
 
2017
Stock options, restricted stock and performance units
$
14.1

 
$
12.1

v3.10.0.1
INVESTMENTS IN VARIABLE INTEREST ENTITIES (Tables)
6 Months Ended
Jun. 30, 2018
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):
 
June 30, 2018
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
1,543.3

 
$

 
$
1,543.3

Notes receivable of VIEs held by insurance subsidiaries

 
(146.4
)
 
(146.4
)
Cash and cash equivalents held by variable interest entities
106.4

 

 
106.4

Accrued investment income
2.2

 

 
2.2

Income tax assets, net
3.3

 

 
3.3

Other assets
10.5

 
(7.4
)
 
3.1

Total assets
$
1,665.7

 
$
(153.8
)
 
$
1,511.9

Liabilities:
 

 
 

 
 

Other liabilities
$
116.8

 
$
(10.3
)
 
$
106.5

Borrowings related to variable interest entities
1,418.1

 

 
1,418.1

Notes payable of VIEs held by insurance subsidiaries
158.7

 
(158.7
)
 

Total liabilities
$
1,693.6

 
$
(169.0
)
 
$
1,524.6


 
December 31, 2017
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
1,526.9

 
$

 
$
1,526.9

Notes receivable of VIEs held by insurance subsidiaries

 
(155.5
)
 
(155.5
)
Cash and cash equivalents held by variable interest entities
178.9

 

 
178.9

Accrued investment income
2.6

 
(.1
)
 
2.5

Income tax assets, net
.7

 

 
.7

Other assets
10.0

 
(1.5
)
 
8.5

Total assets
$
1,719.1

 
$
(157.1
)
 
$
1,562.0

Liabilities:
 

 
 

 
 

Other liabilities
$
158.3

 
$
(4.4
)
 
$
153.9

Borrowings related to variable interest entities
1,410.7

 

 
1,410.7

Notes payable of VIEs held by insurance subsidiaries
167.6

 
(167.6
)
 

Total liabilities
$
1,736.6

 
$
(172.0
)
 
$
1,564.6

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 June 30, 2018, 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.
 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
5.1

 
$
5.0

Due after one year through five years
511.6

 
509.0

Due after five years through ten years
1,033.9

 
1,029.3

Total
$
1,550.6

 
$
1,543.3

v3.10.0.1
FAIR VALUE MEASUREMENTS (Tables)
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Schedule of financial instruments carried at fair value categorized by input level
The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at June 30, 2018 is as follows (dollars in millions):

 
Quoted prices in active markets
for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
 (Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$

 
$
14,213.5

 
$
181.9

 
$
14,395.4

United States Treasury securities and obligations of United States government corporations and agencies

 
175.0

 

 
175.0

States and political subdivisions

 
2,063.4

 

 
2,063.4

Debt securities issued by foreign governments

 
77.5

 
3.9

 
81.4

Asset-backed securities

 
2,739.8

 
18.4

 
2,758.2

Collateralized debt obligations

 
456.0

 

 
456.0

Commercial mortgage-backed securities

 
1,463.9

 

 
1,463.9

Mortgage pass-through securities

 
1.7

 

 
1.7

Collateralized mortgage obligations

 
685.9

 

 
685.9

Total fixed maturities, available for sale

 
21,876.7

 
204.2

 
22,080.9

Equity securities - corporate securities
226.2

 
130.4

 
9.5

 
366.1

Trading securities:
 

 
 

 
 

 
 

Asset-backed securities

 
92.3

 

 
92.3

Commercial mortgage-backed securities

 
98.2

 

 
98.2

Collateralized mortgage obligations

 
63.7

 

 
63.7

Total trading securities

 
254.2

 

 
254.2

Investments held by variable interest entities - corporate securities

 
1,543.3

 

 
1,543.3

Other invested assets - derivatives

 
126.0

 

 
126.0

Assets held in separate accounts

 
4.8

 

 
4.8

Total assets carried at fair value by category
$
226.2

 
$
23,935.4

 
$
213.7

 
$
24,375.3

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
$

 
$

 
$
1,333.3

 
$
1,333.3



The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2017 is as follows (dollars in millions):

 
Quoted prices in active markets
 for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
 (Level 2)
 
Significant unobservable inputs 
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$

 
$
14,728.0

 
$
230.4

 
$
14,958.4

United States Treasury securities and obligations of United States government corporations and agencies

 
177.7

 

 
177.7

States and political subdivisions

 
2,056.3

 

 
2,056.3

Debt securities issued by foreign governments

 
79.2

 
3.9

 
83.1

Asset-backed securities

 
3,230.2

 
24.2

 
3,254.4

Collateralized debt obligations

 
259.4

 

 
259.4

Commercial mortgage-backed securities

 
1,377.5

 

 
1,377.5

Mortgage pass-through securities

 
2.0

 

 
2.0

Collateralized mortgage obligations

 
742.1

 

 
742.1

Total fixed maturities, available for sale

 
22,652.4

 
258.5

 
22,910.9

Equity securities - corporate securities
287.8

 
131.6

 
21.2

 
440.6

Trading securities:
 

 
 

 
 

 
 

Corporate securities

 
21.6

 

 
21.6

United States Treasury securities and obligations of United States government corporations and agencies

 
.5

 

 
.5

Asset-backed securities

 
95.8

 

 
95.8

Collateralized debt obligations

 
2.7

 

 
2.7

Commercial mortgage-backed securities

 
92.5

 

 
92.5

Collateralized mortgage obligations

 
68.7

 

 
68.7

Equity securities
2.8

 

 

 
2.8

Total trading securities
2.8

 
281.8

 

 
284.6

Investments held by variable interest entities - corporate securities

 
1,522.0

 
4.9

 
1,526.9

Other invested assets - derivatives

 
170.2

 

 
170.2

Assets held in separate accounts

 
5.0

 

 
5.0

Total assets carried at fair value by category
$
290.6

 
$
24,763.0

 
$
284.6

 
$
25,338.2

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
$

 
$

 
$
1,334.8

 
$
1,334.8

Schedule of assets and liabilities measured on a recurring fair value basis
The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):
 
June 30, 2018
 
Quoted prices in active markets for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
 (Level 2)
 
Significant unobservable inputs 
(Level 3)
 
Total estimated fair value
 
Total carrying amount
Assets:
 
 
 
 
 
 
 
 
 
Mortgage loans
$

 
$

 
$
1,646.9

 
$
1,646.9

 
$
1,649.4

Policy loans

 

 
116.0

 
116.0

 
116.0

Other invested assets:
 
 
 
 
 
 
 
 
 
Company-owned life insurance

 
182.0

 

 
182.0

 
182.0

Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
Unrestricted
639.2

 
.1

 

 
639.3

 
639.3

Held by variable interest entities
106.4

 

 

 
106.4

 
106.4

Liabilities:
 
 
 
 
 
 
 
 
 
Policyholder account balances

 

 
11,349.7

 
11,349.7

 
11,349.7

Investment borrowings

 
1,647.4

 

 
1,647.4

 
1,646.3

Borrowings related to variable interest entities

 
1,428.4

 

 
1,428.4

 
1,418.1

Notes payable – direct corporate obligations

 
923.3

 

 
923.3

 
915.7


 
December 31, 2017
 
Quoted prices in active markets for identical assets or liabilities
(Level 1)
 
Significant other observable inputs
 (Level 2)
 
Significant unobservable inputs 
(Level 3)
 
Total estimated fair value
 
Total carrying amount
Assets:
 
 
 
 
 
 
 
 
 
Mortgage loans
$

 
$

 
$
1,677.3

 
$
1,677.3

 
$
1,650.6

Policy loans

 

 
116.0

 
116.0

 
116.0

Other invested assets:
 
 
 
 
 
 
 
 
 
Company-owned life insurance

 
182.3

 

 
182.3

 
182.3

Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
Unrestricted
578.4

 

 

 
578.4

 
578.4

Held by variable interest entities
178.9

 

 

 
178.9

 
178.9

Liabilities:
 
 
 
 
 
 
 
 
 
Policyholder account balances

 

 
11,220.7

 
11,220.7

 
11,220.7

Investment borrowings

 
1,648.8

 

 
1,648.8

 
1,646.7

Borrowings related to variable interest entities

 
1,432.9

 

 
1,432.9

 
1,410.7

Notes payable – direct corporate obligations

 
962.3

 

 
962.3

 
914.6








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 June 30, 2018 (dollars in millions):
 
 
June 30, 2018
 
 
 
 
Beginning balance as of March 31, 2018
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2018
 
Amount of total gains (losses) for the three months ended June 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
 
$
200.1

 
$
(6.9
)
 
$
.1

 
$
(.8
)
 
$
4.4

 
$
(15.0
)
 
$
181.9

 
$

Debt securities issued by foreign governments
 
3.8

 

 

 
.1

 

 

 
3.9

 

Asset-backed securities
 
17.6

 
5.9

 

 
(.1
)
 

 
(5.0
)
 
18.4

 

Collateralized debt obligations
 
15.3

 

 

 

 

 
(15.3
)
 

 

Total fixed maturities, available for sale
 
236.8

 
(1.0
)
 
.1

 
(.8
)
 
4.4

 
(35.3
)
 
204.2

 

Equity securities - corporate securities
 
21.4

 
(10.9
)
 
(1.0
)
 

 

 

 
9.5

 

Liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
 
(1,315.4
)
 
(33.9
)
 
16.0

 

 

 

 
(1,333.3
)
 
16.0

_________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2018 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
.1

 
$
(7.0
)
 
$

 
$

 
$
(6.9
)
Asset-backed securities
6.0

 
(.1
)
 

 

 
5.9

Total fixed maturities, available for sale
6.1

 
(7.1
)
 

 

 
(1.0
)
Equity securities - corporate securities

 
(10.9
)
 

 

 
(10.9
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(44.1
)
 
3.2

 
(11.9
)
 
18.9

 
(33.9
)


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 six months ended June 30, 2018 (dollars in millions):
 
 
June 30, 2018
 
 
 
 
Beginning balance as of December 31, 2017
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2018
 
Amount of total gains (losses) for the six months ended June 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
 
$
230.4

 
$
3.7

 
$
1.3

 
$
(3.2
)
 
$

 
$
(50.3
)
 
$
181.9

 
$

Debt securities issued by foreign governments
 
3.9

 

 

 

 

 

 
3.9

 

Asset-backed securities
 
24.2

 
(5.2
)
 

 
(.6
)
 

 

 
18.4

 

Total fixed maturities, available for sale
 
258.5

 
(1.5
)
 
1.3

 
(3.8
)
 

 
(50.3
)
 
204.2

 

Equity securities - corporate securities
 
21.2

 
(10.9
)
 
(.8
)
 

 

 

 
9.5

 

Investments held by variable interest entities - corporate securities
 
4.9

 

 

 

 

 
(4.9
)
 

 

Liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
 
(1,334.8
)
 
(51.5
)
 
53.0

 

 

 

 
(1,333.3
)
 
53.0

_________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the six months ended June 30, 2018 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
15.6

 
$
(11.9
)
 
$

 
$

 
$
3.7

Asset-backed securities
6.0

 
(11.2
)
 

 

 
(5.2
)
Total fixed maturities, available for sale
21.6

 
(23.1
)
 

 

 
(1.5
)
Equity securities - corporate securities

 
(10.9
)
 

 

 
(10.9
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(83.3
)
 
6.9

 
(14.1
)
 
39.0

 
(51.5
)





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 June 30, 2017 (dollars in millions):

 
June 30, 2017
 
 
 
Beginning balance as of March 31, 2017
 
Purchases, sales, issuances and settlements, net (b)
 
Total realized and unrealized gains (losses) included in net income
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2017
 
Amount of total gains (losses) for the three months ended June 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
288.8

 
$
(18.3
)
 
$
7.2

 
$
(8.9
)
 
$
11.6

 
$
(17.1
)
 
$
263.3

 
$
(3.4
)
Debt securities issued by foreign governments
3.9

 

 

 

 

 

 
3.9

 

Asset-backed securities
67.2

 
(4.2
)
 

 
.6

 

 
(4.0
)
 
59.6

 

Collateralized debt obligations
11.5

 

 

 

 

 
(9.0
)
 
2.5

 

Commercial mortgage-backed securities
14.9

 

 

 

 

 
(14.9
)
 

 

Collateralized mortgage obligations

 
(7.3
)
 

 
(1.4
)
 
8.9

 

 
.2

 

Total fixed maturities, available for sale
386.3

 
(29.8
)
 
7.2

 
(9.7
)
 
20.5

 
(45.0
)
 
329.5

 
(3.4
)
Equity securities - corporate securities
24.3

 

 

 

 
.3

 

 
24.6

 

Liabilities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Future policy benefits - embedded derivatives associated with fixed index annuity products
(1,159.2
)
 
(48.7
)
 
2.5

 

 

 

 
(1,205.4
)
 
2.5

____________
(a)
Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.
(b)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2017 (dollars in millions):

 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Purchases, sales, issuances and settlements, net
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
10.9

 
$
(29.2
)
 
$

 
$

 
$
(18.3
)
Asset-backed securities

 
(4.2
)
 

 

 
(4.2
)
Collateralized mortgage obligations

 
(7.3
)
 

 

 
(7.3
)
Total fixed maturities, available for sale
10.9

 
(40.7
)
 

 

 
(29.8
)
Liabilities:
 
 
 
 
 
 
 
 
 
Future policy benefits - embedded derivatives associated with fixed index annuity products
(45.8
)
 
2.2

 
(21.2
)
 
16.1

 
(48.7
)
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 June 30, 2018 (dollars in millions):

 
Fair value at June 30, 2018
 
Valuation techniques
 
Unobservable inputs
 
Range (weighted average)
Assets:
 
 
 
 
 
 
 
Corporate securities (a)
$
119.5

 
Discounted cash flow analysis
 
Discount margins
 
1.40% - 9.23% (3.97%)
Corporate securities (b)
5.4

 
Recovery method
 
Percent of recovery expected
 
0% - 63.95% (59.42%)
Asset-backed securities (c)
12.5

 
Discounted cash flow analysis
 
Discount margins
 
1.98%
Equity securities (d)
1.2

 
Market comparables
 
EBITDA multiples
 
1.1X
Equity securities (e)
8.2

 
Recovery method
 
Percent of recovery expected
 
59.27% - 100.00% (59.52%)
Other assets categorized as Level 3 (f)
66.9

 
Unadjusted third-party price source
 
Not applicable
 
Not applicable
Total
213.7

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Future policy benefits (g)
1,333.3

 
Discounted projected embedded derivatives
 
Projected portfolio yields
 
5.15% - 5.61% (5.60%)
 
 
 
 
 
Discount rates
 
1.18% - 2.66% (2.41%)
 
 
 
 
 
Surrender rates
 
1.20% - 46.40% (12.30%)
________________________________
(a)
Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(b)
Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(c)
Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(d)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements.
(e)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(f)
Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.
(g)
Future policy benefits - 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 the Treasury rate adjusted by a margin. 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.

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, 2017 (dollars in millions):

 
Fair value at December 31, 2017
 
Valuation techniques
 
Unobservable inputs
 
Range (weighted average)
Assets:
 
 
 
 
 
 
 
Corporate securities (a)
$
149.2

 
Discounted cash flow analysis
 
Discount margins
 
1.45% - 71.29% (6.96%)
Corporate securities (b)
2.8

 
Recovery method
 
Percent of recovery expected
 
0% - 21.73% (18.42%)
Asset-backed securities (c)
24.2

 
Discounted cash flow analysis
 
Discount margins
 
1.80% - 3.71% (2.67%)
Equity securities (d)
1.1

 
Market comparables
 
EBITDA multiples
 
1.1X
Equity securities (e)
20.1

 
Recovery method
 
Percent of recovery expected
 
59.1%
Other assets categorized as Level 3 (f)
87.2

 
Unadjusted third-party price source
 
Not applicable
 
Not applicable
Total
284.6

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Future policy benefits (g)
1,334.8

 
Discounted projected embedded derivatives
 
Projected portfolio yields
 
5.15% - 5.61% (5.60%)
 
 
 
 
 
Discount rates
 
0.92% - 2.51% (2.00%)
 
 
 
 
 
Surrender rates
 
1.20% - 46.40% (12.30%)

________________________________
(a)
Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(b)
Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(c)
Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.
(d)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is EBITDA multiples. Generally, increases (decreases) in EBITDA multiples would result in higher (lower) fair value measurements.
(e)
Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.
(f)
Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.
(g)
Future policy benefits - 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 the Treasury rate adjusted by a margin. 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.
v3.10.0.1
BUSINESS AND BASIS OF PRESENTATION (Details)
6 Months Ended
Jun. 30, 2018
distribution_channel
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of distribution channels 3
v3.10.0.1
INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Jan. 01, 2018
Dec. 31, 2017
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 $ 2.4   $ 2.6
Net unrealized gains on all other investments 1,080.2   2,227.3
Adjustment to present value of future profits (82.4)   (94.0)
Adjustment to deferred acquisition costs (100.4)   (292.6)
Adjustment to insurance liabilities (7.5)   (295.8)
Deferred income tax liabilities (192.1)   (335.4)
Accumulated other comprehensive income $ 700.2 $ 1,195.8 $ 1,212.1
v3.10.0.1
INVESTMENTS - NARRATIVE (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]          
Premium deficiencies adjustments to present value of future profits $ (75.8)   $ (75.8)    
Reduction to deferred acquisition costs due to unrealized gains that would result in premium deficiency if unrealized gains were realized (28.2)   (28.2)    
Adjustment to insurance liabilities 7.5   7.5   $ 295.8
Increase to deferred tax assets due to unrealized gains that would result in premium deficiency if unrealized gains were realized 25.1   25.1    
Net realized investment gains (losses) 11.0 $ 15.2 (4.2) $ 23.1  
Net realized investment gains (losses), excluding impairment losses 11.0 24.0 (4.2) 40.3  
Loss on dissolution of a variable interest entity 0.0 (3.7) 0.0 (3.7)  
Gain (loss) on sale of investments       880.4  
Total other-than-temporary impairment losses 0.0 5.1 0.0 13.5  
Value of available for sale securities sold     760.2    
Impairment losses recognized 0.0 4.2 0.0 12.6  
Other-than-temporary impairments included in accumulated other comprehensive income     (0.8)    
Embedded Derivative Related to Reinsurance Contract          
Schedule of Available-for-sale Securities [Line Items]          
Embedded derivative, loss on embedded derivative     1.5    
Increase in fair value of embedded derivative       9.5  
Coinsurance | Embedded Derivative Related to Reinsurance Contract          
Schedule of Available-for-sale Securities [Line Items]          
Embedded derivative, loss on embedded derivative     4.2    
Increase in fair value of embedded derivative       2.1  
Marketable securities          
Schedule of Available-for-sale Securities [Line Items]          
Net realized investment gains (losses), excluding impairment losses     11.8 28.7  
Equity securities          
Schedule of Available-for-sale Securities [Line Items]          
Net realized investment gains (losses)   0.0   1.9  
Change in fair value of equity securities 2.2   (10.3)    
Total fixed maturities, available for sale          
Schedule of Available-for-sale Securities [Line Items]          
Net realized investment gains (losses) 14.1 11.4 14.6 12.5  
Gross realized losses on sale (17.8) (5.2) (25.5) (7.9)  
Total other-than-temporary impairment losses 0.0 4.5 0.0 7.7  
Corporate securities          
Schedule of Available-for-sale Securities [Line Items]          
Gross realized losses on sale     19.0    
Commercial mortgage-backed securities          
Schedule of Available-for-sale Securities [Line Items]          
Gross realized losses on sale     3.8    
Various other investments          
Schedule of Available-for-sale Securities [Line Items]          
Gross realized losses on sale     2.7    
Impairment losses recognized       2.0  
Fixed income investments | Energy Sector          
Schedule of Available-for-sale Securities [Line Items]          
Impairment losses recognized       6.3  
Mortgage loans          
Schedule of Available-for-sale Securities [Line Items]          
Net realized investment gains (losses) $ 0.0 $ 0.0 $ 0.0 1.0  
Impairment losses recognized       $ 5.2  
v3.10.0.1
INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND OTHER-THAN-TEMPORARY IMPAIRMENTS (Details) - USD ($)
$ in Millions
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost $ 20,989.5 $ 20,702.1
Estimated fair value 22,080.9 22,910.9
Other-than-temporary impairments included in accumulated other comprehensive income 0.8  
Corporate securities    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 13,723.1 13,286.3
Gross unrealized gains 897.7 1,699.1
Gross unrealized losses (225.4) (27.0)
Estimated fair value 14,395.4 14,958.4
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
United States Treasury securities and obligations of United States government corporations and agencies    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 150.9 146.4
Gross unrealized gains 24.5 31.5
Gross unrealized losses (0.4) (0.2)
Estimated fair value 175.0 177.7
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
States and political subdivisions    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 1,880.8 1,821.9
Gross unrealized gains 185.1 234.8
Gross unrealized losses (2.5) (0.4)
Estimated fair value 2,063.4 2,056.3
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
Debt securities issued by foreign governments    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 84.4 79.5
Gross unrealized gains 0.5 3.8
Gross unrealized losses (3.5) (0.2)
Estimated fair value 81.4 83.1
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
Asset-backed securities    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 2,600.8 3,085.9
Gross unrealized gains 164.6 172.6
Gross unrealized losses (7.2) (4.1)
Estimated fair value 2,758.2 3,254.4
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
Collateralized debt obligations    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 457.1 257.1
Gross unrealized gains 0.8 2.3
Gross unrealized losses (1.9) 0.0
Estimated fair value 456.0 259.4
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
Commercial mortgage-backed securities    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 1,468.3 1,354.0
Gross unrealized gains 15.9 33.8
Gross unrealized losses (20.3) (10.3)
Estimated fair value 1,463.9 1,377.5
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
Mortgage pass-through securities    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 1.6 1.8
Gross unrealized gains 0.1 0.2
Gross unrealized losses 0.0 0.0
Estimated fair value 1.7 2.0
Other-than-temporary impairments included in accumulated other comprehensive income 0.0 0.0
Collateralized mortgage obligations    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 622.5 669.2
Gross unrealized gains 66.8 73.2
Gross unrealized losses (3.4) (0.3)
Estimated fair value 685.9 742.1
Other-than-temporary impairments included in accumulated other comprehensive income (0.8) (1.0)
Total fixed maturities, available for sale    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 20,989.5 20,702.1
Gross unrealized gains 1,356.0 2,251.3
Gross unrealized losses (264.6) (42.5)
Estimated fair value 22,080.9 22,910.9
Other-than-temporary impairments included in accumulated other comprehensive income $ (0.8) (1.0)
Equity securities    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost   420.0
Gross unrealized gains   23.6
Gross unrealized losses   (3.0)
Estimated fair value   $ 440.6
v3.10.0.1
INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Amortized cost    
Due in one year or less $ 378.5 $ 328.1
Due after one year through five years 1,666.3 1,947.3
Due after five years through ten years 1,828.2 1,508.7
Due after ten years 11,966.2 11,550.0
Subtotal 15,839.2 15,334.1
Structured securities 5,150.3 5,368.0
Amortized cost 20,989.5 20,702.1
Estimated fair value    
Due in one year or less 384.9 335.1
Due after one year through five years 1,720.7 2,052.3
Due after five years through ten years 1,860.5 1,601.3
Due after ten years 12,749.1 13,286.8
Subtotal 16,715.2 17,275.5
Structured securities 5,365.7 5,635.4
Total fixed maturities, available for sale $ 22,080.9 $ 22,910.9
v3.10.0.1
INVESTMENTS - NET REALIZED INVESTMENT GAINS (LOSSES) (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Gain (Loss) on Investments [Line Items]        
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income $ 0.0 $ (0.9) $ 0.0 $ (0.9)
Net impairment losses recognized 0.0 (5.1) 0.0 (13.5)
Total realized gains (losses) 11.0 15.2 (4.2) 23.1
Loss on dissolution of a variable interest entity 0.0 (3.7) 0.0 (3.7)
Investments        
Gain (Loss) on Investments [Line Items]        
Change in estimated fair value of trading securities     (4.2) 9.9
Total fixed maturities, available for sale        
Gain (Loss) on Investments [Line Items]        
Gross realized gains on sale 31.9 21.1 40.1 28.1
Gross realized losses on sale (17.8) (5.2) (25.5) (7.9)
Impairment losses recognized 0.0 3.6 0.0 6.8
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income 0.0 (0.9) 0.0 (0.9)
Net impairment losses recognized 0.0 (4.5) 0.0 (7.7)
Total realized gains (losses) 14.1 11.4 14.6 12.5
Equity securities        
Gain (Loss) on Investments [Line Items]        
Total realized gains (losses)   0.0   1.9
Change in fair value of equity securities 2.2   (10.3)  
Mortgage loans        
Gain (Loss) on Investments [Line Items]        
Total realized gains (losses) 0.0 0.0 0.0 1.0
Impairments of other investments        
Gain (Loss) on Investments [Line Items]        
Total realized gains (losses) 0.0 (0.6) 0.0 (5.8)
Other        
Gain (Loss) on Investments [Line Items]        
Total realized gains (losses) (5.3) 8.1 (8.5) 17.2
VIEs        
Gain (Loss) on Investments [Line Items]        
Loss on dissolution of a variable interest entity $ 0.0 $ (3.7) $ 0.0 $ (3.7)
v3.10.0.1
INVESTMENTS - SCHEDULE OF OTHER THAN TEMPORARY IMPAIRMENT (Details) - Available-for-sale securities - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]        
Credit losses on fixed maturity securities, available for sale, beginning of period $ (2.8) $ (5.4) $ (2.8) $ (5.5)
Add: credit losses on other-than-temporary impairments not previously recognized 0.0 0.0 0.0 0.0
Less: credit losses on securities sold 2.5 1.5 2.5 1.6
Less: credit losses on securities impaired due to intent to sell 0.0 0.0 0.0 0.0
Add: credit losses on previously impaired securities 0.0 (1.0) 0.0 (1.0)
Less: increases in cash flows expected on previously impaired securities 0.0 0.0 0.0 0.0
Credit losses on fixed maturity securities, available for sale, end of period $ (0.3) $ (4.9) $ (0.3) $ (4.9)
v3.10.0.1
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months $ 5,814.9 $ 1,426.4
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (217.6) (11.1)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 532.1 732.6
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss (47.0) (31.4)
Debt securities, available-for-sale, unrealized loss position 6,347.0 2,159.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss (264.6) (42.5)
United States Treasury securities and obligations of United States government corporations and agencies    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 25.4 28.2
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (0.3) (0.2)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 0.7 0.7
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss 0.0 0.0
Debt securities, available-for-sale, unrealized loss position 26.1 28.9
Debt securities, available-for-sale, unrealized loss position, accumulated loss (0.3) (0.2)
States and political subdivisions    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 91.9 18.3
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (2.1) (0.1)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 14.4 14.9
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss (0.4) (0.3)
Debt securities, available-for-sale, unrealized loss position 106.3 33.2
Debt securities, available-for-sale, unrealized loss position, accumulated loss (2.5) (0.4)
Debt securities issued by foreign governments    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 54.1 7.7
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (3.3) (0.1)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 8.0 5.4
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss (0.2) (0.1)
Debt securities, available-for-sale, unrealized loss position 62.1 13.1
Debt securities, available-for-sale, unrealized loss position, accumulated loss (3.5) (0.2)
Corporate securities    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 4,235.1 470.5
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (193.8) (6.8)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 259.2 359.7
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss (31.7) (20.2)
Debt securities, available-for-sale, unrealized loss position 4,494.3 830.2
Debt securities, available-for-sale, unrealized loss position, accumulated loss (225.5) (27.0)
Asset-backed securities    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 570.7 601.4
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (5.1) (2.0)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 60.4 122.2
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss (2.1) (2.1)
Debt securities, available-for-sale, unrealized loss position 631.1 723.6
Debt securities, available-for-sale, unrealized loss position, accumulated loss (7.2) (4.1)
Collateralized debt obligations    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 279.3 3.0
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (1.9) 0.0
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 0.0 0.0
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss 0.0 0.0
Debt securities, available-for-sale, unrealized loss position 279.3 3.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss (1.9) 0.0
Commercial mortgage-backed securities    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 453.8 276.8
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (7.7) (1.7)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 187.4 218.2
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss (12.6) (8.6)
Debt securities, available-for-sale, unrealized loss position 641.2 495.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss (20.3) (10.3)
Mortgage pass-through securities    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 0.1  
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss 0.0  
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 0.0  
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss 0.0  
Debt securities, available-for-sale, unrealized loss position 0.1  
Debt securities, available-for-sale, unrealized loss position, accumulated loss 0.0  
Collateralized mortgage obligations    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months 104.5 20.5
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss (3.4) (0.2)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer 2.0 11.5
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss 0.0 (0.1)
Debt securities, available-for-sale, unrealized loss position 106.5 32.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss $ (3.4) (0.3)
Equity securities    
Schedule of Available-for-sale Securities [Line Items]    
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months   58.7
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss   (1.7)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer   21.2
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss   (1.3)
Debt securities, available-for-sale, unrealized loss position   79.9
Debt securities, available-for-sale, unrealized loss position, accumulated loss   $ (3.0)
v3.10.0.1
EARNINGS PER SHARE (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract]        
Net income for basic and diluted earnings per share $ 102.2 $ 83.4 $ 186.5 $ 145.7
Shares:        
Weighted average shares outstanding for basic earnings per share (in shares) 166,098,000 170,556,000 166,579,000 171,994,000
Effect of dilutive securities on weighted average shares:        
Stock options, restricted stock and performance units (in shares) 1,880,000 1,796,000 2,249,000 1,714,000
Weighted average shares outstanding for diluted earnings per share (in shares) 167,978,000 172,352,000 168,828,000 173,708,000
v3.10.0.1
BUSINESS SEGMENTS (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Revenues:        
Net investment income       $ 629.4
Fee revenue and other income $ 11.6 $ 11.5 $ 32.8 23.3
Total segment revenues 1,020.1 1,029.6 2,026.0 2,078.2
Expenses:        
Insurance policy benefits 618.2 634.2 1,204.8 1,303.5
Other operating costs and expenses 195.8 203.4 403.4 413.8
Total expenses 916.0 908.5 1,827.0 1,864.2
Pre-tax operating earnings 104.1 121.1 199.0 214.0
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Total segment revenues 1,020.1 1,029.6 2,026.0 2,078.2
Net realized investment gains (losses) 11.0 15.2 (4.2) 23.1
Revenues related to VIEs 15.2 12.3 32.3 26.5
Total revenues 1,046.3 1,057.1 2,054.1 2,127.8
Total segment expenses 916.0 908.5 1,827.0 1,864.2
Insurance policy benefits - fair value changes in embedded derivative liabilities (10.4) 7.2 (41.3) 12.7
Amortization related to fair value changes in embedded derivative liabilities 2.1 (1.3) 7.9 (2.4)
Amortization related to net realized investment gains 0.4 0.3 0.4 0.3
Expenses related to VIEs 19.4 13.9 33.2 27.8
Fair value changes related to agent deferred compensation plan (11.0) 0.0 (11.0) 0.0
Total benefits and expenses 916.5 928.6 1,816.2 1,902.6
Income before tax 129.8 128.5 237.9 225.2
Income tax expense on period income 27.6 45.1 51.4 79.5
Net income 102.2 83.4 186.5 145.7
Operating segments | Bankers Life:        
Segment Reporting Information [Line Items]        
Insurance Policy Income Related To Annuity Products 4.8 5.8 9.4 11.8
Premiums Earned, Net, Accident and Health 300.5 308.1 602.7 619.7
Premiums Earned, Net, Life 105.0 105.2 208.9 206.7
Revenues:        
Net investment income 259.5 256.9 497.4 529.8
Fee revenue and other income 10.6 10.6 30.2 21.2
Total segment revenues 680.4 686.6 1,348.6 1,389.2
Expenses:        
Insurance policy benefits 426.1 419.3 837.2 870.5
Amortization 40.0 41.3 87.0 87.6
Interest expense on investment borrowings 7.5 4.8 13.6 9.0
Other operating costs and expenses 110.7 108.6 225.2 219.8
Total expenses 584.3 574.0 1,163.0 1,186.9
Pre-tax operating earnings 96.1 112.6 185.6 202.3
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Total segment revenues 680.4 686.6 1,348.6 1,389.2
Total segment expenses 584.3 574.0 1,163.0 1,186.9
Operating segments | Washington National:        
Segment Reporting Information [Line Items]        
Insurance Policy Income Related To Annuity Products 0.2 0.5 0.7 1.1
Premiums Earned, Net, Accident and Health 164.0 160.1 327.8 319.9
Premiums Earned, Net, Life 6.8 6.9 13.5 13.6
Revenues:        
Net investment income 64.1 66.5 129.5 133.9
Fee revenue and other income 0.3 0.2 0.5 0.5
Total segment revenues 235.4 234.2 472.0 469.0
Expenses:        
Insurance policy benefits 142.5 145.3 280.2 292.0
Amortization 14.4 15.3 28.9 29.6
Interest expense on investment borrowings 2.7 1.5 4.8 2.8
Other operating costs and expenses 50.4 48.5 98.4 97.5
Total expenses 210.0 210.6 412.3 421.9
Pre-tax operating earnings 25.4 23.6 59.7 47.1
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Total segment revenues 235.4 234.2 472.0 469.0
Total segment expenses 210.0 210.6 412.3 421.9
Operating segments | Colonial Penn:        
Segment Reporting Information [Line Items]        
Premiums Earned, Net, Accident and Health 0.4 0.5 0.9 1.1
Premiums Earned, Net, Life 74.1 72.5 147.7 144.9
Revenues:        
Net investment income 11.3 11.2 22.3 22.1
Fee revenue and other income 0.4 0.4 0.9 0.6
Total segment revenues 86.2 84.6 171.8 168.7
Expenses:        
Insurance policy benefits 50.6 50.4 107.3 103.1
Amortization 4.1 4.0 8.7 8.0
Interest expense on investment borrowings 0.4 0.2 0.7 0.4
Other operating costs and expenses 25.7 22.0 51.2 49.5
Total expenses 80.8 76.6 167.9 161.0
Pre-tax operating earnings 5.4 8.0 3.9 7.7
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Total segment revenues 86.2 84.6 171.8 168.7
Total segment expenses 80.8 76.6 167.9 161.0
Operating segments | Long-term care in run-off:        
Segment Reporting Information [Line Items]        
Premiums Earned, Net, Accident and Health 4.0 4.5 8.1 9.1
Revenues:        
Net investment income 8.6 10.0 17.0 19.7
Total segment revenues 12.6 14.5 25.1 28.8
Expenses:        
Insurance policy benefits 9.4 12.0 21.4 25.2
Other operating costs and expenses 0.1 0.8 0.6 1.5
Total expenses 9.5 12.8 22.0 26.7
Pre-tax operating earnings 3.1 1.7 3.1 2.1
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Total segment revenues 12.6 14.5 25.1 28.8
Total segment expenses 9.5 12.8 22.0 26.7
Corporate        
Revenues:        
Net investment income 4.0 7.4 5.2 17.8
Fee revenue and other income 1.5 2.3 3.3 4.7
Total segment revenues 5.5 9.7 8.5 22.5
Expenses:        
Interest expense on corporate debt 11.9 11.6 23.8 23.1
Other operating costs and expenses 19.5 22.9 38.0 44.6
Total expenses 31.4 34.5 61.8 67.7
Pre-tax operating earnings (25.9) (24.8) (53.3) (45.2)
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]        
Total segment revenues 5.5 9.7 8.5 22.5
Total segment expenses $ 31.4 $ 34.5 $ 61.8 $ 67.7
v3.10.0.1
ACCOUNTING FOR DERIVATIVES - FAIR VALUE BY BALANCE SHEET LOCATION (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Fixed index call options    
Derivatives, Fair Value [Line Items]    
Assets $ 126.0 $ 170.2
Not Designated as Hedging Instrument    
Derivatives, Fair Value [Line Items]    
Assets 120.4 168.8
Liabilities 1,333.3 1,334.8
Not Designated as Hedging Instrument | Fixed index call options | Other invested assets:    
Derivatives, Fair Value [Line Items]    
Assets 126.0 170.2
Not Designated as Hedging Instrument | Reinsurance receivables | Other invested assets:    
Derivatives, Fair Value [Line Items]    
Assets (5.6) (1.4)
Not Designated as Hedging Instrument | Fixed index products | Future policy benefits:    
Derivatives, Fair Value [Line Items]    
Liabilities $ 1,333.3 $ 1,334.8
v3.10.0.1
ACCOUNTING FOR DERIVATIVES (Details)
$ in Millions
Jun. 30, 2018
USD ($)
Embedded Derivative Associated With Modified Coinsurance Agreement  
Derivative [Line Items]  
Embedded derivative $ 124
Fixed index call options  
Derivative [Line Items]  
Notional amount $ 3,000
v3.10.0.1
ACCOUNTING FOR DERIVATIVES - SCHEDULE PRE-TAX GAINS (LOSSES) RECOGNIZED IN NET INCOME FOR DERIVATIVE INSTRUMENTS (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Derivative [Line Items]        
Gains (losses) on derivatives not designated as hedging instruments $ 27.9 $ 24.2 $ 56.6 $ 71.7
Investment Income | Fixed index call options        
Derivative [Line Items]        
Gains (losses) on derivatives not designated as hedging instruments 13.4 20.3 7.8 64.8
Gain (Loss) on Investments | Embedded Derivative | Coinsurance        
Derivative [Line Items]        
Gains (losses) on derivatives not designated as hedging instruments (1.5) 1.4 (4.2) 2.1
Insurance Policy Benefits | Embedded Derivative | Fixed Index Annuity        
Derivative [Line Items]        
Gains (losses) on derivatives not designated as hedging instruments $ 16.0 $ 2.5 $ 53.0 $ 4.8
v3.10.0.1
ACCOUNTING FOR DERIVATIVES - DERIVATIVES WITH MASTER NETTING ARRANGEMENTS (Details) - Fixed index call options - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Derivative [Line Items]    
Gross amounts recognized $ 126.0 $ 170.2
Gross amounts offset in the balance sheet 0.0 0.0
Net amounts of assets presented in the balance sheet 126.0 170.2
Financial instruments 0.0 0.0
Cash collateral received 0.0 0.0
Net amount $ 126.0 $ 170.2
v3.10.0.1
REINSURANCE (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Reinsurance Disclosures [Abstract]        
Ceded premiums written $ 26.1 $ 26.5 $ 50.6 $ 52.8
Ceded insurance policy benefits 20.8 22.4 44.2 46.5
Assumed premiums written 7.0 7.7 14.2 15.7
Insurance policy benefits related to reinsurance $ 8.7 $ 11.5 $ 18.0 $ 23.5
v3.10.0.1
INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Income Tax Disclosure [Abstract]        
Current tax expense $ 15.4 $ 22.0 $ 20.7 $ 42.6
Deferred tax expense 12.2 23.1 30.7 36.9
Income tax expense calculated based on estimated annual effective tax rate $ 27.6 $ 45.1 $ 51.4 $ 79.5
v3.10.0.1
INCOME TAXES - NARRATIVE (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2017
Jun. 30, 2018
Dec. 31, 2017
Operating Loss Carryforwards [Line Items]      
Tax reform provisional income tax expense (benefit) $ 172.5   $ 172.5
Deferred tax assets more likely than not to be realized through future taxable earnings 376.2 $ 484.4 376.2
Net deferred tax assets 465.3 573.5 465.3
Valuation allowance (89.1) $ (89.1) (89.1)
Deferred tax valuation analysis, growth rate for the next five years   3.00%  
Valuation allowance model, forecast period of Model   5 years  
Estimated normalized annual taxable income for the current year   $ 345.0  
Adjusted average non-life taxable income   85.0  
Adjusted average life taxable income   $ 260.0  
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   2.31%  
Ownership change threshold restricting NOL usage   50.00%  
Net operating loss carryforwards   $ 2,231.9  
Net state operating loss carryforwards $ 9.3 $ 9.1 $ 9.3
Future cash tax payments based on income of life insurance company, percent   65.00%  
Federal      
Operating Loss Carryforwards [Line Items]      
Valuation allowance   $ (77.4)  
Net operating loss carryforwards   2,200.0  
State      
Operating Loss Carryforwards [Line Items]      
Valuation allowance   $ (11.7)  
v3.10.0.1
INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Income Tax Disclosure [Abstract]    
U.S. statutory corporate rate 21.00% 35.00%
Non-taxable income and nondeductible benefits, net (0.20%) (1.40%)
State taxes 0.80% 1.70%
Estimated annual effective tax rate 21.60% 35.30%
v3.10.0.1
INCOME TAXES - DEFERRED ASSETS AND LIABILITIES (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Deferred tax assets:    
Net federal operating loss carryforwards $ 468.7 $ 489.6
Net state operating loss carryforwards 9.1 9.3
Investments 0.0 4.3
Insurance liabilities 405.3 415.8
Other 47.5 48.9
Gross deferred tax assets 930.6 967.9
Deferred tax liabilities:    
Investments (3.3) 0.0
Present value of future profits and deferred acquisition costs (159.6) (165.4)
Accumulated other comprehensive income (194.2) (337.2)
Gross deferred tax liabilities (357.1) (502.6)
Net deferred tax assets before valuation allowance 573.5 465.3
Valuation allowance (89.1) (89.1)
Net deferred tax assets 484.4 376.2
Current income taxes prepaid (accrued) 0.4 (9.3)
Income tax assets, net $ 484.8 $ 366.9
v3.10.0.1
INCOME TAXES - NET OPERATING LOSSES (Details)
$ in Millions
6 Months Ended
Jun. 30, 2018
USD ($)
Operating Loss Carryforwards [Line Items]  
Net operating loss carryforwards $ 2,231.9
Carryforward Expiration 2023  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2023
Net operating loss carryforwards $ 1,645.3
Carryforward Expiration 2025  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2025
Net operating loss carryforwards $ 85.2
Carryforward Expiration 2026  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2026
Net operating loss carryforwards $ 149.9
Carryforward Expiration 2027  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2027
Net operating loss carryforwards $ 10.8
Carryforward Expiration 2028  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2028
Net operating loss carryforwards $ 80.3
Carryforward Expiration 2029  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2029
Net operating loss carryforwards $ 213.2
Carryforward Expiration 2030  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2030
Net operating loss carryforwards $ 0.3
Carryforward Expiration 2031  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2031
Net operating loss carryforwards $ 0.2
Carryforward Expiration 2032  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2032
Net operating loss carryforwards $ 44.4
Carryforward Expiration 2033  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2033
Net operating loss carryforwards $ 0.6
Carryforward Expiration 2034  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2034
Net operating loss carryforwards $ 0.9
Carryforward Expiration 2035  
Operating Loss Carryforwards [Line Items]  
Year of expiration Dec. 31, 2035
Net operating loss carryforwards $ 0.8
v3.10.0.1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
May 19, 2015
Debt Instruments [Abstract]      
Direct corporate obligations $ 915.7 $ 914.6  
Unamortized debt issue costs (9.3) (10.4)  
Senior notes | 4.500% Senior Notes due May 2020      
Debt Instruments [Abstract]      
Direct corporate obligations $ 325.0 325.0  
Interest rate 4.50%    
Senior notes | 5.250% Senior Notes due May 2025      
Debt Instruments [Abstract]      
Direct corporate obligations $ 500.0 500.0  
Interest rate 5.25%    
Line of credit | Revolving credit agreement      
Debt Instruments [Abstract]      
Direct corporate obligations $ 100.0 $ 100.0 $ 100.0
v3.10.0.1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - REVOLVING CREDIT AGREEMENT (Details) - USD ($)
$ in Millions
Oct. 13, 2017
May 19, 2015
Jun. 30, 2018
Dec. 31, 2017
Debt Instrument [Line Items]        
Initial drawing amount     $ 915.7 $ 914.6
Revolving credit agreement | Line of credit        
Debt Instrument [Line Items]        
Line of credit maximum borrowing capacity $ 250.0 $ 150.0    
Debt instrument, term   4 years    
Initial drawing amount   $ 100.0 $ 100.0 $ 100.0
Interest rate on amounts outstanding at period end     3.97%  
Debt covenant, required minimum debt to total capitalization ratio 35.00%      
Debt covenant, actual debt to total capitalization ratio at period end     19.80%  
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     444.00%  
Debt covenant, minimum required consolidated net worth, component one, amount   $ 2,674.0    
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     $ 3,754.7  
Debt covenant, required minimum consolidated net worth, amount     $ 2,685.8  
Revolving credit agreement | Line of credit | Federal Funds Rate        
Debt Instrument [Line Items]        
Basis spread on variable rate   0.50%    
Minimum | Eurodollar        
Debt Instrument [Line Items]        
Basis spread on variable rate 1.375%      
Minimum | Base Rate        
Debt Instrument [Line Items]        
Basis spread on variable rate 0.375%      
Minimum | Revolving credit agreement | Line of credit        
Debt Instrument [Line Items]        
Remaining borrowing capacity   $ 50.0    
Maximum | Eurodollar        
Debt Instrument [Line Items]        
Basis spread on variable rate 2.125%      
Maximum | Base Rate        
Debt Instrument [Line Items]        
Basis spread on variable rate 1.125%      
Maximum | Revolving credit agreement | Line of credit        
Debt Instrument [Line Items]        
Remaining borrowing capacity $ 100.0      
v3.10.0.1
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULED REPAYMENT (Details)
$ in Millions
Jun. 30, 2018
USD ($)
Debt Disclosure [Abstract]  
2019 $ 0.0
2020 425.0
2021 0.0
2022 0.0
2023 0.0
Thereafter 500.0
Long-term Debt $ 925.0
v3.10.0.1
INVESTMENT BORROWINGS (Details)
$ in Millions
6 Months Ended
Jun. 30, 2018
USD ($)
subsidiary
Jun. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Number of insurance subsidiaries that are members of the FHLB | subsidiary 3    
Investment borrowings $ 1,646.3   $ 1,646.7
Federal Home Loan Bank advances      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Federal home loan bank stock 71.1    
Investment borrowings 1,646.3    
Federal home loan bank, advances, collateral pledged 2,000.0    
Aggregate fee to prepay all fixed rate FHLB borrowings 1.1    
Interest expense on FHLB borrowings 19.1 $ 12.2  
Federal Home Loan Bank advances | Borrowings due January 2019      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Jan. 31, 2019    
Interest rate 2.768%    
Federal Home Loan Bank advances | Borrowings due February 2019      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Feb. 28, 2019    
Interest rate 2.42%    
Federal Home Loan Bank advances | Borrowings due March 2019      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 100.0    
Maturity date Mar. 31, 2019    
Interest rate 2.565%    
Federal Home Loan Bank advances | Borrowings due July 2019      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 21.8    
Maturity date Jul. 31, 2019    
Interest rate 2.578%    
Federal Home Loan Bank advances | Borrowings due October 2019      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 15.0    
Maturity date Oct. 31, 2019    
Interest rate 2.879%    
Federal Home Loan Bank advances | Borrowing due May 2020      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date May 31, 2020    
Interest rate 2.593%    
Federal Home Loan Bank advances | Borrowings due June 2020      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 21.8    
Maturity date Jun. 30, 2020    
Interest rate 1.96%    
Federal Home Loan Bank advances | Borrowings due September 2020      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 25.0    
Maturity date Sep. 30, 2020    
Interest rate 2.96%    
Federal Home Loan Bank advances | Borrowings due September 2020 rate two      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 100.0    
Maturity date Sep. 30, 2020    
Interest rate 2.751%    
Federal Home Loan Bank advances | Borrowings due September 2020 rate three      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Sep. 30, 2020    
Interest rate 2.762%    
Federal Home Loan Bank advances | Borrowings due September 2020 rate four      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 75.0    
Maturity date Sep. 30, 2020    
Interest rate 2.454%    
Federal Home Loan Bank advances | Borrowings due October 2020      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 100.0    
Maturity date Oct. 31, 2020    
Interest rate 2.431%    
Federal Home Loan Bank advances | Borrowings due December 2020      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Dec. 31, 2020    
Interest rate 2.701%    
Federal Home Loan Bank advances | Borrowings due July 2021      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 100.0    
Maturity date Jul. 31, 2021    
Interest rate 2.898%    
Federal Home Loan Bank advances | Borrowings due July 2021 rate two      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 100.0    
Maturity date Jul. 31, 2021    
Interest rate 2.868%    
Federal Home Loan Bank advances | Borrowings due August 2021      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 28.2    
Maturity date Aug. 31, 2021    
Interest rate 2.55%    
Federal Home Loan Bank advances | Borrowings due August 2021 rate two      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 57.7    
Maturity date Aug. 31, 2021    
Interest rate 2.893%    
Federal Home Loan Bank advances | Borrowings due August 2021 Rate Three      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 125.0    
Maturity date Aug. 31, 2021    
Interest rate 2.571%    
Federal Home Loan Bank advances | Borrowings due September 2021      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Sep. 30, 2021    
Interest rate 2.859%    
Federal Home Loan Bank advances | Borrowings due May 2022, Rate One      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 22.0    
Maturity date May 31, 2022    
Interest rate 2.668%    
Federal Home Loan Bank advances | Borrowings due May 2022, Rate Two      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 100.0    
Maturity date May 31, 2022    
Interest rate 2.406%    
Federal Home Loan Bank advances | Borrowings due June 2022      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 10.0    
Maturity date Jun. 30, 2022    
Interest rate 2.941%    
Federal Home Loan Bank advances | Borrowings due July 2022 rate one      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Jul. 31, 2022    
Interest rate 2.707%    
Federal Home Loan Bank advances | Borrowings due July 2022 rate two      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Jul. 31, 2022    
Interest rate 2.739%    
Federal Home Loan Bank advances | Borrowings due July 2022 rate three      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Jul. 31, 2022    
Interest rate 2.739%    
Federal Home Loan Bank advances | Borrowings due August 2022      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Aug. 31, 2022    
Interest rate 2.753%    
Federal Home Loan Bank advances | Borrowings due December 2022, variable rate 1.795%      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Dec. 31, 2022    
Interest rate 2.60%    
Federal Home Loan Bank advances | Borrowings due December 2022, variable rate 1.795%, loan 2      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 50.0    
Maturity date Dec. 31, 2022    
Interest rate 2.60%    
Federal Home Loan Bank advances | Borrowings due March 2023      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 24.3    
Maturity date Mar. 31, 2023    
Interest rate 2.16%    
Federal Home Loan Bank advances | Borrowings due June 2025      
Schedule of Trading Securities and Other Trading Assets [Line Items]      
Investment borrowings $ 20.5    
Maturity date Jun. 30, 2025    
Interest rate 2.94%    
v3.10.0.1
CHANGES IN COMMON STOCK (Details) - USD ($)
$ / shares in Units, $ in Millions
2 Months Ended 4 Months Ended 6 Months Ended
Jun. 30, 2018
Apr. 30, 2018
Jun. 30, 2018
Jun. 30, 2017
Number of common shares outstanding        
Balance, beginning of year (in shares)   166,857,931 166,857,931  
Balance, end of year (in shares) 164,433,085   164,433,085  
Number of stock tendered for payment of federal and state taxes owed (in shares)     235,000  
Stock repurchased and retired during period, value     $ 60.5 $ 111.9
Stock repurchase program, remaining repurchase authorized amount $ 325.1   325.1  
Common stock dividends declared     $ 32.0 29.4
Dividends (in dollars per share) $ 0.10 $ 0.09 $ 0.19  
Common stock and additional paid-in capital        
Number of common shares outstanding        
Stock repurchased and retired during period, value     $ 60.5 $ 111.9
Common stock        
Number of common shares outstanding        
Balance, beginning of year (in shares)   166,858,000 166,858,000  
Stock repurchased and retired during period, shares     (2,998,000)  
Balance, end of year (in shares) 164,433,000   164,433,000  
Common stock | Stock options        
Number of common shares outstanding        
Shares issued under employee benefit compensation plans (in shares)     132,000  
Number of stock tendered for payment of federal and state taxes owed (in shares)     69,000  
Common stock | Restricted and Performance Stock        
Number of common shares outstanding        
Shares issued under employee benefit compensation plans (in shares)     441,000  
v3.10.0.1
SALES INDUCEMENTS (Details) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Deferred Sales Inducements [Abstract]      
Deferred sales inducements $ 2.8 $ 1.0  
Deferred sales inducements, amortization expense 5.1 $ 4.3  
Unamortized deferred sales inducements $ 40.2   $ 42.5
v3.10.0.1
OUT-OF-PERIOD ADJUSTMENTS (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Increase in insurance policy benefits $ 618.2 $ 634.2 $ 1,204.8 $ 1,303.5
Income tax expense on period income (27.6) (45.1) (51.4) (79.5)
Decrease in net income $ (102.2) $ (83.4) (186.5) $ (145.7)
Restatement Adjustment | Colonial Penn and Bankers Life | Long-term Care and Insurance Benefits and Payouts of Annuities        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Increase in insurance policy benefits     2.5  
Income tax expense on period income     0.5  
Decrease in net income     $ 2.0  
Adjustment to net income per diluted share (in dollars per share)     $ (0.01)  
Restatement Adjustment | Bankers Life | Long-term Care Insurance Benefits        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Increase in insurance policy benefits     $ 1.4  
Restatement Adjustment | Colonial Penn | Payout Annuities        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Increase in insurance policy benefits     $ 1.1  
v3.10.0.1
RECENTLY ISSUED ACCOUNTING STANDARDS (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2018
Jun. 30, 2017
Jan. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Fee revenue $ 6.6 $ 22.4        
Distribution expense (included in other operating costs and expenses) 0.9 12.4        
Impact on pre-tax income 5.7 10.0        
Accumulated other comprehensive income 700.2 700.2   $ 1,195.8 $ 1,212.1  
Retained earnings 731.2 731.2   576.7 560.4  
Total shareholders' equity 4,454.9 4,454.9 $ 4,779.3 4,847.5 $ 4,847.5 $ 4,486.9
Net Investment Income     629.4      
Other operating costs   (425.1) (394.7)      
Net cash from operating activities   243.7 286.0      
Sales of investments     880.4      
Change in cash and cash equivalents held by variable interest entities     0.0      
Other   (13.0) (12.5)      
Net cash provided (used) by investing activities   (240.9) 166.4      
Net increase in cash and cash equivalents   (11.6) 271.7      
Cash and cash equivalents - unrestricted and held by variable interest entities     939.9     668.2
Accounting Standards Update 2016-01            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Accumulated other comprehensive income       (16.3)    
Retained earnings       16.3    
Total shareholders' equity       0.0    
Restricted cash            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Net Investment Income     0.0      
Other operating costs     0.0      
Net cash from operating activities     0.0      
Sales of investments     0.0      
Change in cash and cash equivalents held by variable interest entities     201.8      
Other     0.0      
Net cash provided (used) by investing activities     201.8      
Net increase in cash and cash equivalents     201.8      
Cash and cash equivalents - unrestricted and held by variable interest entities     391.1     189.3
COLI death benefits            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Net Investment Income     0.0      
Other operating costs     (3.2)      
Net cash from operating activities     (3.2)      
Sales of investments     0.0      
Change in cash and cash equivalents held by variable interest entities     0.0      
Other     3.2      
Net cash provided (used) by investing activities     3.2      
Net increase in cash and cash equivalents     0.0      
Cash and cash equivalents - unrestricted and held by variable interest entities     0.0     0.0
Distributions received from equity method investments            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Net Investment Income     10.7      
Other operating costs     0.0      
Net cash from operating activities     10.7      
Sales of investments     (10.7)      
Change in cash and cash equivalents held by variable interest entities     0.0      
Other     0.0      
Net cash provided (used) by investing activities     (10.7)      
Net increase in cash and cash equivalents     0.0      
Cash and cash equivalents - unrestricted and held by variable interest entities     0.0     0.0
Amounts prior to effect of adoption of authoritative guidance            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Accumulated other comprehensive income       1,212.1    
Retained earnings       560.4    
Total shareholders' equity       $ 4,847.5    
Net Investment Income     618.7      
Other operating costs     (391.5)      
Net cash from operating activities     278.5      
Sales of investments     891.1      
Change in cash and cash equivalents held by variable interest entities     (201.8)      
Other     (15.7)      
Net cash provided (used) by investing activities     (27.9)      
Net increase in cash and cash equivalents     69.9      
Cash and cash equivalents - unrestricted and held by variable interest entities     $ 548.8     $ 478.9
Calculated under Revenue Guidance in Effect before Topic 606            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Fee revenue 8.4 16.9        
Distribution expense (included in other operating costs and expenses) 3.2 5.9        
Impact on pre-tax income 5.2 11.0        
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Fee revenue (1.8) 5.5        
Distribution expense (included in other operating costs and expenses) (2.3) 6.5        
Impact on pre-tax income $ 0.5 $ (1.0)        
v3.10.0.1
LITIGATION AND OTHER LEGAL PROCEEDINGS (Details)
6 Months Ended
Jun. 30, 2018
state
Jul. 26, 2017
individual
Commitments and Contingencies Disclosure [Abstract]    
Number of individuals appointed to assume immediate control and power over affairs | individual   2
Number of states participating in examination of compliance with unclaimed property laws | state 39  
v3.10.0.1
CONSOLIDATED STATEMENT OF CASH FLOWS (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:        
Net income $ 102.2 $ 83.4 $ 186.5 $ 145.7
Adjustments to reconcile net income to net cash from operating activities:        
Amortization and depreciation     146.7 136.2
Income taxes     21.0 45.8
Insurance liabilities     94.4 222.8
Accrual and amortization of investment income     (58.9) (124.1)
Deferral of policy acquisition costs     (125.6) (126.6)
Net realized investment (gains) losses     4.2 (23.1)
Loss on extinguishment of borrowings related to variable interest entities $ (3.8) $ 0.0 (3.8) 0.0
Other     (28.4) 9.3
Net cash from operating activities     243.7 286.0
Stock options, restricted stock and performance units     $ 14.1 $ 12.1
v3.10.0.1
INVESTMENTS IN VARIABLE INTEREST ENTITIES - BALANCE SHEET ITEMS (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Assets:    
Investments held by variable interest entities $ 1,543.3 $ 1,526.9
Cash and cash equivalents held by variable interest entities 106.4 178.9
Liabilities:    
Borrowings related to variable interest entities 1,418.1 1,410.7
VIEs    
Assets:    
Investments held by variable interest entities 1,543.3 1,526.9
Notes receivable of VIEs held by insurance subsidiaries 0.0 0.0
Cash and cash equivalents held by variable interest entities 106.4 178.9
Accrued investment income 2.2 2.6
Income tax assets, net 3.3 0.7
Other assets 10.5 10.0
Total assets 1,665.7 1,719.1
Liabilities:    
Other liabilities 116.8 158.3
Borrowings related to variable interest entities 1,418.1 1,410.7
Notes payable of VIEs held by insurance subsidiaries 158.7 167.6
Total liabilities 1,693.6 1,736.6
Eliminations    
Assets:    
Investments held by variable interest entities 0.0 0.0
Notes receivable of VIEs held by insurance subsidiaries (146.4) (155.5)
Cash and cash equivalents held by variable interest entities 0.0 0.0
Accrued investment income 0.0 (0.1)
Income tax assets, net 0.0 0.0
Other assets (7.4) (1.5)
Total assets (153.8) (157.1)
Liabilities:    
Other liabilities (10.3) (4.4)
Borrowings related to variable interest entities 0.0 0.0
Notes payable of VIEs held by insurance subsidiaries (158.7) (167.6)
Total liabilities (169.0) (172.0)
Net effect on consolidated balance sheet    
Assets:    
Investments held by variable interest entities 1,543.3 1,526.9
Notes receivable of VIEs held by insurance subsidiaries (146.4) (155.5)
Cash and cash equivalents held by variable interest entities 106.4 178.9
Accrued investment income 2.2 2.5
Income tax assets, net 3.3 0.7
Other assets 3.1 8.5
Total assets 1,511.9 1,562.0
Liabilities:    
Other liabilities 106.5 153.9
Borrowings related to variable interest entities 1,418.1 1,410.7
Notes payable of VIEs held by insurance subsidiaries 0.0 0.0
Total liabilities $ 1,524.6 $ 1,564.6
v3.10.0.1
INVESTMENTS IN VARIABLE INTEREST ENTITIES - NARRATIVE (Details)
$ in Millions
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
USD ($)
investment
Jun. 30, 2017
USD ($)
Jun. 30, 2018
USD ($)
investment
Jun. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Variable Interest Entity [Line Items]          
Variable interest entity amortized cost securities held $ 1,550.6   $ 1,550.6    
Variable interest entity, gross unrealized gains fixed maturity securities 3.8   3.8    
Variable interest entity gross unrealized losses fixed maturity securities 11.1   11.1    
Estimated fair value of fixed maturity securities 1,543.3   1,543.3    
Variable interest entities net realized gain (loss) on investments     (2.9) $ (1.8)  
Variable interest entities net gain (loss) from sale of fixed maturity investments       2.3  
Loss on dissolution of a variable interest entity $ 0.0 $ (3.7) $ 0.0 (3.7)  
Total other than temporary impairment losses on investments held by variable interest entities       (0.4)  
Number of investments held by VIE, in default | investment 0   0    
Variable interest entities, investments sold     $ 44.0 72.8  
Variable interest entity, gross investment losses from sale     3.1 $ 1.8  
Investments held in limited partnerships $ 508.6   508.6    
Unfunded commitments to limited partnerships 252.1   252.1    
Less than twelve months          
Variable Interest Entity [Line Items]          
Fair value investments held by variable interest entity that had been in an unrealized loss position 937.0   937.0   $ 445.4
Gross unrealized losses for a period     8.7   4.9
Greater than twelve months          
Variable Interest Entity [Line Items]          
Fair value investments held by variable interest entity that had been in an unrealized loss position $ 52.3   52.3   28.4
Gross unrealized losses for a period     $ 2.4   $ 1.7
v3.10.0.1
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (Details)
$ in Millions
Jun. 30, 2018
USD ($)
Investment Holdings [Line Items]  
Total amortized cost $ 1,550.6
Total fair value 1,543.3
Amortized cost  
Investment Holdings [Line Items]  
Due in one year or less 5.1
Due after one year through five years 511.6
Due after five years through ten years 1,033.9
Total amortized cost 1,550.6
Estimated fair value  
Investment Holdings [Line Items]  
Due in one year or less 5.0
Due after one year through five years 509.0
Due after five years through ten years 1,029.3
Total fair value $ 1,543.3
v3.10.0.1
FAIR VALUE MEASUREMENTS - NARRATIVE (Details)
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage 31.00%
Available for sale fixed maturities classified as level 3, investment grade, percent 59.00%
Available for sale fixed maturities classified as Level 3 and corporate securities 89.00%
v3.10.0.1
FAIR VALUE MEASUREMENTS - MEASUREMENTS BY INPUT LEVEL (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale $ 22,080.9 $ 22,910.9
Trading securities 254.2 284.6
Investments held by variable interest entities 1,543.3 1,526.9
Assets held in separate accounts 4.8 5.0
Corporate securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 14,395.4 14,958.4
United States Treasury securities and obligations of United States government corporations and agencies    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 175.0 177.7
States and political subdivisions    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 2,063.4 2,056.3
Debt securities issued by foreign governments    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 81.4 83.1
Asset-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 2,758.2 3,254.4
Collateralized debt obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 456.0 259.4
Commercial mortgage-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 1,463.9 1,377.5
Mortgage pass-through securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 1.7 2.0
Collateralized mortgage obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 685.9 742.1
Equity securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale   440.6
Fair Value, Measurements, Recurring    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities 254.2 284.6
Investments held by variable interest entities 1,543.3 1,526.9
Assets held in separate accounts 4.8 5.0
Total assets carried at fair value by category 24,375.3 25,338.2
Fair Value, Measurements, Recurring | Embedded derivatives associated with fixed index annuity products    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Future policy benefits - embedded derivatives associated with fixed index annuity products 1,333.3 1,334.8
Fair Value, Measurements, Recurring | Derivatives    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other invested assets - derivatives 126.0 170.2
Fair Value, Measurements, Recurring | Corporate securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 14,395.4 14,958.4
Equity securities - corporate securities 366.1 440.6
Trading securities   21.6
Fair Value, Measurements, Recurring | United States Treasury securities and obligations of United States government corporations and agencies    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 175.0 177.7
Trading securities   0.5
Fair Value, Measurements, Recurring | States and political subdivisions    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 2,063.4 2,056.3
Fair Value, Measurements, Recurring | Debt securities issued by foreign governments    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 81.4 83.1
Fair Value, Measurements, Recurring | Asset-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 2,758.2 3,254.4
Trading securities 92.3 95.8
Fair Value, Measurements, Recurring | Collateralized debt obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 456.0 259.4
Trading securities   2.7
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 1,463.9 1,377.5
Trading securities 98.2 92.5
Fair Value, Measurements, Recurring | Mortgage pass-through securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 1.7 2.0
Fair Value, Measurements, Recurring | Collateralized mortgage obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 685.9 742.1
Trading securities 63.7 68.7
Fair Value, Measurements, Recurring | Total fixed maturities, available for sale    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 22,080.9 22,910.9
Fair Value, Measurements, Recurring | Equity securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities   2.8
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1)    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities 0.0 2.8
Investments held by variable interest entities 0.0 0.0
Assets held in separate accounts 0.0 0.0
Total assets carried at fair value by category 226.2 290.6
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Embedded derivatives associated with fixed index annuity products    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Future policy benefits - embedded derivatives associated with fixed index annuity products 0.0 0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Derivatives    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other invested assets - derivatives 0.0 0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Corporate securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Equity securities - corporate securities 226.2 287.8
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    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities   0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | States and political subdivisions    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total 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) | Debt securities issued by foreign governments    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total 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    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities 0.0 0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Collateralized debt obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities   0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Commercial mortgage-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities 0.0 0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Mortgage pass-through securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total 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) | Collateralized mortgage obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities 0.0 0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Total fixed maturities, available for sale    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total 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) | Equity securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities   2.8
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2)    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities 254.2 281.8
Investments held by variable interest entities 1,543.3 1,522.0
Assets held in separate accounts 4.8 5.0
Total assets carried at fair value by category 23,935.4 24,763.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Embedded derivatives associated with fixed index annuity products    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Future policy benefits - embedded derivatives associated with fixed index annuity products 0.0 0.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Derivatives    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other invested assets - derivatives 126.0 170.2
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Corporate securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 14,213.5 14,728.0
Equity securities - corporate securities 130.4 131.6
Trading securities   21.6
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | United States Treasury securities and obligations of United States government corporations and agencies    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 175.0 177.7
Trading securities   0.5
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | States and political subdivisions    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 2,063.4 2,056.3
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Debt securities issued by foreign governments    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 77.5 79.2
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Asset-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 2,739.8 3,230.2
Trading securities 92.3 95.8
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Collateralized debt obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 456.0 259.4
Trading securities   2.7
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 1,463.9 1,377.5
Trading securities 98.2 92.5
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Mortgage pass-through securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 1.7 2.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Collateralized mortgage obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 685.9 742.1
Trading securities 63.7 68.7
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Total fixed maturities, available for sale    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 21,876.7 22,652.4
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Equity securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities   0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities 0.0 0.0
Investments held by variable interest entities 0.0 4.9
Assets held in separate accounts 0.0 0.0
Total assets carried at fair value by category 213.7 284.6
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Embedded derivatives associated with fixed index annuity products    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Future policy benefits - embedded derivatives associated with fixed index annuity products 1,333.3 1,334.8
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Derivatives    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other invested assets - derivatives 0.0 0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Corporate securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 181.9 230.4
Equity securities - corporate securities 9.5 21.2
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    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities   0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | States and political subdivisions    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Debt securities issued by foreign governments    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 3.9 3.9
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Asset-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 18.4 24.2
Trading securities 0.0 0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Collateralized debt obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities   0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Commercial mortgage-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities 0.0 0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Mortgage pass-through securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Collateralized mortgage obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale 0.0 0.0
Trading securities 0.0 0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Total fixed maturities, available for sale    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total fixed maturities, available for sale $ 204.2 258.5
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Equity securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Trading securities   $ 0.0
v3.10.0.1
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Jun. 30, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Unrestricted $ 745.7 $ 757.3 $ 939.9 $ 668.2
Cash and cash equivalents held by variable interest entities 106.4 178.9    
Fair Value, Measurements, Recurring        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Mortgage loans 1,649.4 1,650.6    
Policy loans 116.0 116.0    
Company-owned life insurance 182.0 182.3    
Unrestricted 639.3 578.4    
Cash and cash equivalents held by variable interest entities 106.4 178.9    
Policyholder account balances 11,349.7 11,220.7    
Investment borrowings 1,646.3 1,646.7    
Borrowings related to variable interest entities 1,418.1 1,410.7    
Notes payable – direct corporate obligations 915.7 914.6    
Fair Value, Measurements, Recurring | Estimate of fair value measurement        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Mortgage loans 1,646.9 1,677.3    
Policy loans 116.0 116.0    
Company-owned life insurance 182.0 182.3    
Unrestricted 639.3 578.4    
Cash and cash equivalents held by variable interest entities 106.4 178.9    
Policyholder account balances 11,349.7 11,220.7    
Investment borrowings 1,647.4 1,648.8    
Borrowings related to variable interest entities 1,428.4 1,432.9    
Notes payable – direct corporate obligations 923.3 962.3    
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1)        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Mortgage loans 0.0 0.0    
Policy loans 0.0 0.0    
Company-owned life insurance 0.0 0.0    
Unrestricted 639.2 578.4    
Cash and cash equivalents held by variable interest entities 106.4 178.9    
Policyholder account balances 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)        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Mortgage loans 0.0 0.0    
Policy loans 0.0 0.0    
Company-owned life insurance 182.0 182.3    
Unrestricted 0.1 0.0    
Cash and cash equivalents held by variable interest entities 0.0 0.0    
Policyholder account balances 0.0 0.0    
Investment borrowings 1,647.4 1,648.8    
Borrowings related to variable interest entities 1,428.4 1,432.9    
Notes payable – direct corporate obligations 923.3 962.3    
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Mortgage loans 1,646.9 1,677.3    
Policy loans 116.0 116.0    
Company-owned life insurance 0.0 0.0    
Unrestricted 0.0 0.0    
Cash and cash equivalents held by variable interest entities 0.0 0.0    
Policyholder account balances 11,349.7 11,220.7    
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    
v3.10.0.1
FAIR VALUE MEASUREMENTS - BALANCE SHEET RECURRING (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Interest sensitive products        
Liabilities:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance $ (1,315.4) $ (1,159.2) $ (1,334.8) $ (1,092.3)
Purchases, sales, issuances and settlements, net (33.9) (48.7) (51.5) (117.9)
Total realized and unrealized gains (losses) included in net income 16.0 2.5 53.0 4.8
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) 0.0 0.0 0.0 0.0
Transfers into level 3 0.0 0.0 0.0 0.0
Transfers out of level 3 0.0 0.0 0.0 0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance (1,333.3) (1,205.4) (1,333.3) (1,205.4)
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 16.0 2.5 53.0 4.8
Corporate securities        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance 200.1 288.8 230.4 258.5
Purchases, sales, issuances and settlements, net (6.9) (18.3) 3.7 (14.1)
Total realized and unrealized gains (losses) included in net income 0.1 7.2 1.3 7.8
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) (0.8) (8.9) (3.2) (0.5)
Transfers into level 3 4.4 11.6 0.0 11.6
Transfers out of level 3 (15.0) (17.1) (50.3) 0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance 181.9 263.3 181.9 263.3
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 0.0 (3.4) 0.0 (6.7)
Debt securities issued by foreign governments        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance 3.8 3.9 3.9 3.9
Purchases, sales, issuances and settlements, net 0.0 0.0 0.0 0.0
Total realized and unrealized gains (losses) included in net income 0.0 0.0 0.0 0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) 0.1 0.0 0.0 0.0
Transfers into level 3 0.0 0.0 0.0 0.0
Transfers out of level 3 0.0 0.0 0.0 0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance 3.9 3.9 3.9 3.9
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 0.0 0.0 0.0 0.0
Asset-backed securities        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance 17.6 67.2 24.2 60.4
Purchases, sales, issuances and settlements, net 5.9 (4.2) (5.2) 5.8
Total realized and unrealized gains (losses) included in net income 0.0 0.0 0.0 0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) (0.1) 0.6 (0.6) 1.1
Transfers into level 3 0.0 0.0 0.0 0.0
Transfers out of level 3 (5.0) (4.0) 0.0 (7.7)
Fair value, measurement with unobservable inputs reconciliation, ending balance 18.4 59.6 18.4 59.6
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 0.0 0.0 0.0 0.0
Collateralized debt obligations        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance 15.3 11.5   5.4
Purchases, sales, issuances and settlements, net 0.0 0.0   0.0
Total realized and unrealized gains (losses) included in net income 0.0 0.0   0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) 0.0 0.0   0.0
Transfers into level 3 0.0 0.0   0.0
Transfers out of level 3 (15.3) (9.0)   (2.9)
Fair value, measurement with unobservable inputs reconciliation, ending balance 0.0 2.5 0.0 2.5
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 0.0 0.0   0.0
Commercial mortgage-backed securities        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance   14.9   32.0
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   (14.9)   (32.0)
Fair value, measurement with unobservable inputs reconciliation, ending balance   0.0   0.0
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   0.0   0.0
Collateralized mortgage obligations        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance   0.0   0.0
Purchases, sales, issuances and settlements, net   (7.3)   (7.9)
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)   (1.4)   (1.4)
Transfers into level 3   8.9   9.5
Transfers out of level 3   0.0   0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance   0.2   0.2
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   0.0   0.0
Total fixed maturities, available for sale        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance 236.8 386.3 258.5 360.2
Purchases, sales, issuances and settlements, net (1.0) (29.8) (1.5) (16.2)
Total realized and unrealized gains (losses) included in net income 0.1 7.2 1.3 7.8
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) (0.8) (9.7) (3.8) (0.8)
Transfers into level 3 4.4 20.5 0.0 21.1
Transfers out of level 3 (35.3) (45.0) (50.3) (42.6)
Fair value, measurement with unobservable inputs reconciliation, ending balance 204.2 329.5 204.2 329.5
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 0.0 (3.4) 0.0 (6.7)
Equity securities        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance 21.4 24.3 21.2 25.2
Purchases, sales, issuances and settlements, net (10.9) 0.0 (10.9) (0.1)
Total realized and unrealized gains (losses) included in net income (1.0) 0.0 (0.8) (0.1)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) 0.0 0.0 0.0 (0.4)
Transfers into level 3 0.0 0.3 0.0 0.0
Transfers out of level 3 0.0 0.0 0.0 0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance 9.5 24.6 9.5 24.6
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 0.0 $ 0.0 0.0 $ 0.0
Investments held by variable interest entities | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Investments held by variable interest entities - corporate securities        
Assets:        
Fair value, measurement with unobservable inputs reconciliation, beginning balance     4.9  
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)     0.0  
Transfers into level 3     0.0  
Transfers out of level 3     (4.9)  
Fair value, measurement with unobservable inputs reconciliation, ending balance $ 0.0   0.0  
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     $ 0.0  
v3.10.0.1
FAIR VALUE MEASUREMENTS - FAIR VALUE ACTIVITY (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Mar. 31, 2018
Dec. 31, 2017
Mar. 31, 2017
Dec. 31, 2016
Interest sensitive products                
Liabilities:                
Purchases $ (44.1) $ (45.8) $ (83.3) $ (89.1)        
Sales 3.2 2.2 6.9 3.5        
Issuances (11.9) (21.2) (14.1) (64.3)        
Settlements 18.9 16.1 39.0 32.0        
Purchases, sales, issuances and settlements, net (33.9) (48.7) (51.5) (117.9)        
Fair value, measurement with unobservable inputs reconciliations, recurring basis, liability value (1,333.3) (1,205.4) (1,333.3) (1,205.4) $ (1,315.4) $ (1,334.8) $ (1,159.2) $ (1,092.3)
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability, gain (loss) included in earnings 16.0 2.5 53.0 4.8        
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) 0.0 0.0 0.0 0.0        
Transfers into level 3 0.0 0.0 0.0 0.0        
Transfers out of level 3 0.0 0.0 0.0 0.0        
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 16.0 2.5 53.0 4.8        
Corporate securities                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value 181.9 263.3 181.9 263.3 200.1 230.4 288.8 258.5
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 0.0 (3.4) 0.0 (6.7)        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss) (0.8) (8.9) (3.2) (0.5)        
Assets:                
Purchases 0.1 10.9 15.6 34.2        
Sales (7.0) (29.2) (11.9) (48.3)        
Issuances 0.0 0.0 0.0 0.0        
Settlements 0.0 0.0 0.0 0.0        
Purchases, sales, issuances and settlements, net (6.9) (18.3) 3.7 (14.1)        
Liabilities:                
Transfers into level 3 4.4 11.6 0.0 11.6        
Transfers out of level 3 (15.0) (17.1) (50.3) 0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings 0.1 7.2 1.3 7.8        
Debt securities issued by foreign governments                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value 3.9 3.9 3.9 3.9 3.8 3.9 3.9 3.9
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 0.0 0.0 0.0 0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss) 0.1 0.0 0.0 0.0        
Assets:                
Purchases, sales, issuances and settlements, net 0.0 0.0 0.0 0.0        
Liabilities:                
Transfers into level 3 0.0 0.0 0.0 0.0        
Transfers out of level 3 0.0 0.0 0.0 0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings 0.0 0.0 0.0 0.0        
Asset-backed securities                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value 18.4 59.6 18.4 59.6 17.6 24.2 67.2 60.4
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 0.0 0.0 0.0 0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss) (0.1) 0.6 (0.6) 1.1        
Assets:                
Purchases 6.0 0.0 6.0 12.0        
Sales (0.1) (4.2) (11.2) (6.2)        
Issuances 0.0 0.0 0.0 0.0        
Settlements 0.0 0.0 0.0 0.0        
Purchases, sales, issuances and settlements, net 5.9 (4.2) (5.2) 5.8        
Liabilities:                
Transfers into level 3 0.0 0.0 0.0 0.0        
Transfers out of level 3 (5.0) (4.0) 0.0 (7.7)        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings 0.0 0.0 0.0 0.0        
Collateralized debt obligations                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value 0.0 2.5 0.0 2.5 15.3   11.5 5.4
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 0.0 0.0   0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss) 0.0 0.0   0.0        
Assets:                
Purchases, sales, issuances and settlements, net 0.0 0.0   0.0        
Liabilities:                
Transfers into level 3 0.0 0.0   0.0        
Transfers out of level 3 (15.3) (9.0)   (2.9)        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings 0.0 0.0   0.0        
Commercial mortgage-backed securities                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value   0.0   0.0     14.9 32.0
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   0.0   0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss)   0.0   0.0        
Assets:                
Purchases, sales, issuances and settlements, net   0.0   0.0        
Liabilities:                
Transfers into level 3   0.0   0.0        
Transfers out of level 3   (14.9)   (32.0)        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings   0.0   0.0        
Total fixed maturities, available for sale                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value 204.2 329.5 204.2 329.5 236.8 258.5 386.3 360.2
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 0.0 (3.4) 0.0 (6.7)        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss) (0.8) (9.7) (3.8) (0.8)        
Assets:                
Purchases 6.1 10.9 21.6 46.2        
Sales (7.1) (40.7) (23.1) (62.4)        
Issuances 0.0 0.0 0.0 0.0        
Settlements 0.0 0.0 0.0 0.0        
Purchases, sales, issuances and settlements, net (1.0) (29.8) (1.5) (16.2)        
Liabilities:                
Transfers into level 3 4.4 20.5 0.0 21.1        
Transfers out of level 3 (35.3) (45.0) (50.3) (42.6)        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings 0.1 7.2 1.3 7.8        
Equity securities                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value 9.5 24.6 9.5 24.6 $ 21.4 21.2 24.3 25.2
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 0.0 0.0 0.0 0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss) 0.0 0.0 0.0 (0.4)        
Assets:                
Purchases 0.0   0.0 0.0        
Sales (10.9)   (10.9) (0.1)        
Issuances 0.0   0.0 0.0        
Settlements 0.0   0.0 0.0        
Purchases, sales, issuances and settlements, net (10.9) 0.0 (10.9) (0.1)        
Liabilities:                
Transfers into level 3 0.0 0.3 0.0 0.0        
Transfers out of level 3 0.0 0.0 0.0 0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings (1.0) 0.0 (0.8) (0.1)        
Collateralized mortgage obligations                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value   0.2   0.2     $ 0.0 $ 0.0
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   0.0   0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss)   (1.4)   (1.4)        
Assets:                
Purchases   0.0   0.0        
Sales   (7.3)   (7.9)        
Issuances   0.0   0.0        
Settlements   0.0   0.0        
Purchases, sales, issuances and settlements, net   (7.3)   (7.9)        
Liabilities:                
Transfers into level 3   8.9   9.5        
Transfers out of level 3   0.0   0.0        
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings   $ 0.0   $ 0.0        
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Investments held by variable interest entities | Investments held by variable interest entities - corporate securities                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset value $ 0.0   0.0     $ 4.9    
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     0.0          
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in other comprehensive income (loss)     0.0          
Assets:                
Purchases, sales, issuances and settlements, net     0.0          
Liabilities:                
Transfers into level 3     0.0          
Transfers out of level 3     (4.9)          
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset, gain (loss) included in earnings     $ 0.0          
v3.10.0.1
FAIR VALUE MEASUREMENTS - FAIR VALUE INPUTS (Details) - USD ($)
$ in Millions
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments $ 26,955.9 $ 27,854.1
Other invested assets 946.0 924.5
Significant unobservable inputs (Level 3)    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments 213.7 284.6
Other invested assets 66.9 87.2
Policyholder account balances $ 1,333.3 $ 1,334.8
Significant unobservable inputs (Level 3) | Minimum | Interest sensitive products    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Projected portfolio yields 5.15% 5.15%
Discount rates 1.18% 0.92%
Surrender rates 1.20% 1.20%
Significant unobservable inputs (Level 3) | Maximum | Interest sensitive products    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Projected portfolio yields 5.61% 5.61%
Discount rates 2.66% 2.51%
Surrender rates 46.40% 46.40%
Significant unobservable inputs (Level 3) | Weighted Average | Interest sensitive products    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Projected portfolio yields 5.60% 5.60%
Discount rates 2.41% 2.00%
Surrender rates 12.30% 12.30%
Significant unobservable inputs (Level 3) | Corporate securities    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments $ 119.5 $ 149.2
Significant unobservable inputs (Level 3) | Corporate securities | Minimum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Discount margins 1.40% 1.45%
Significant unobservable inputs (Level 3) | Corporate securities | Maximum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Discount margins 9.23% 71.29%
Significant unobservable inputs (Level 3) | Corporate securities | Weighted Average    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Discount margins 3.97% 6.96%
Significant unobservable inputs (Level 3) | Asset-backed securities    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments $ 12.5 $ 24.2
Significant unobservable inputs (Level 3) | Asset-backed securities | Minimum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Discount margins 1.80%
Significant unobservable inputs (Level 3) | Asset-backed securities | Maximum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Discount margins 3.71%
Significant unobservable inputs (Level 3) | Asset-backed securities | Weighted Average    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Discount margins 1.98% 2.67%
Significant unobservable inputs (Level 3) | Equity securities    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments $ 1.2 $ 1.1
Significant unobservable inputs (Level 3) | Equity securities | Weighted Average    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
EBITDA multiple 110.00% 110.00%
Percent of recovery expected   59.10%
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments $ 5.4 $ 2.8
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities | Minimum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Percent of recovery expected 0.00% 0.00%
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities | Maximum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Percent of recovery expected 63.95% 21.73%
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities | Weighted Average    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Percent of recovery expected 59.42% 18.42%
Recovery method | Significant unobservable inputs (Level 3) | Equity securities    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Investments $ 8.2 $ 20.1
Recovery method | Significant unobservable inputs (Level 3) | Equity securities | Minimum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Percent of recovery expected 59.27%  
Recovery method | Significant unobservable inputs (Level 3) | Equity securities | Maximum    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Percent of recovery expected 100.00%  
Recovery method | Significant unobservable inputs (Level 3) | Equity securities | Weighted Average    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Percent of recovery expected 59.52%  
v3.10.0.1
SUBSEQUENT EVENT (Details) - Scenario, Forecast - Subsequent Event
$ in Millions
5 Months Ended
Dec. 31, 2018
USD ($)
Subsequent Event [Line Items]  
Negative ceding commission $ 825
Statutory liabilities transferred in reinsurance transaction 2,700
Reinsurance transaction, after-tax charge 650
Trust account assets, amount of over collateralization $ 500